250626
10-K
2011-10-31
false
PASSUR AEROSPACE, INC.
0000225628
--10-31
Smaller Reporting Company
Yes
No
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2011
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<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 5.1pt 0pt 0in"><b>2. Property, Plant and Equipment</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Property, plant and equipment consist of the following as of October 31, 2011 and 2010:</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <div align="center"> <table width="100%" style="WIDTH:100%; BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td width="24%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:24%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Estimated useful lives</b></p></td> <td width="13%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:13%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>2011</b></p></td> <td width="13%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:13%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">2010</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Leasehold improvements</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">3-5 years</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>$201,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">$180,000</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Equipment</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">5-10 years</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>3,311,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">3,073,000</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Furniture and fixtures</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">5-10 years</p></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>531,000</b></p></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">503,000</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>4,043,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">3,756,000</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Less accumulated depreciation and amortization</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>3,672,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">3,597,000</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Total</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 2.25pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>$371,000</b></p></td> <td style="BORDER-BOTTOM:windowtext 2.25pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">$159,000</p></td></tr></table></div> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company recorded depreciation and amortization expense on the assets included in property, plant and equipment of $75,000 and $237,000 for fiscal years 2011 and 2010, respectively. Included in equipment are $155,000 of assets in development as of October 31, 2011, and no depreciation was recorded relating to these assets.</p>
<!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><b>4. </b><b>Capitalized Software Development Costs</b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">As of October 31, 2011 and 2010, the Company had $7,454,000 and $5,431,000 of capitalized software development costs, and $2,812,000 and $2,096,000 of accumulated amortization related to such costs, resulting in a net asset of $4,642,000 and $3,335,000, respectively. The average amortization period of the Company’s capitalized software development costs was 3.2 years as of October 31, 2011. Amortization related to capitalized software development projects was $716,000 and $468,000 in fiscal years 2011 and 2010, respectively. Beginning in fiscal year 2012, future amortization expense for capitalized software development costs where amortization has commenced, is estimated to approximate $870,000, $777,000, $626,000, $539,000, and $240,000, for the next five fiscal years, respectively. As of October 31, 2011, the Company had $1,605,000 of capitalized software development costs relating to projects in development which are not yet subject to amortization.</p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>3. PASSUR® Network</b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">As of October 31, 2011 and 2010, the Company had $13,977,000 and $13,632,000 of Company-owned PASSUR® Systems capitalized, and $7,695,000 and $6,331,000 of accumulated depreciation related to such costs, resulting in a net asset of $6,282,000 and $7,301,000, respectively. Depreciation is charged to cost of revenues and is calculated using the straight-line method over the estimated useful life of the asset, which is estimated at seven years. PASSUR® Network Systems which are not installed in the PASSUR® Network are carried at cost and no depreciation is recorded. These costs amounted to $134,000 and $168,000 as of October 31, 2011 and 2010, respectively. The Company capitalized $345,000 and $1,250,000 of costs to the PASSUR® Network during fiscal years 2011 and 2010, respectively. Included in the PASSUR® Network are $637,000 and $540,000 of costs pertaining to raw material, work-in-process, and finished goods components as of October 31, 2011 and 2010, respectively. Depreciation expense related to the Company-owned PASSUR® Network was $1,364,000 and $1,241,000 in fiscal years 2011 and 2010, respectively. The Company did not dispose of any PASSUR® Network assets in fiscal years 2011 or 2010.</p>
<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>5. Accrued Expenses and Other Current Liabilities</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Accrued expenses and other current liabilities consist of the following as of October 31, 2011 and 2010:</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <div align="center"> <table width="100%" style="WIDTH:100%; BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td width="13%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:13%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>2011</b></p></td> <td width="13%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:13%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">2010</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Payroll, payroll taxes, and benefits</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><b><font style="LETTER-SPACING:-0.2pt">$375,000</font></b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><font style="LETTER-SPACING:-0.2pt">$286,000</font></p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Professional fees</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><b><font style="LETTER-SPACING:-0.2pt">135,000</font></b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><font style="LETTER-SPACING:-0.2pt">188,000</font></p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Commissions</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><b><font style="LETTER-SPACING:-0.2pt">102,000</font></b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><font style="LETTER-SPACING:-0.2pt">186,000</font></p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Consulting fees</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><b><font style="LETTER-SPACING:-0.2pt">54,000</font></b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><font style="LETTER-SPACING:-0.2pt">16,000</font></p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">License fees</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><b><font style="LETTER-SPACING:-0.2pt">50,000</font></b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><font style="LETTER-SPACING:-0.2pt">50,000</font></p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Travel expenses</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><b><font style="LETTER-SPACING:-0.2pt">25,000</font></b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><font style="LETTER-SPACING:-0.2pt">70,000</font></p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Other liabilities</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><b><font style="LETTER-SPACING:-0.2pt">100,000</font></b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><font style="LETTER-SPACING:-0.2pt">103,000</font></p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Total</p></td> <td style="BORDER-BOTTOM:windowtext 2.25pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><b><font style="LETTER-SPACING:-0.2pt">$841,000</font></b></p></td> <td style="BORDER-BOTTOM:windowtext 2.25pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:14pt; MARGIN:0in 0in 0pt; tab-stops:center 3.0in right 6.0in" align="right"><font style="LETTER-SPACING:-0.2pt">$899,000</font></p></td></tr></table></div>
<!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><b>6. Notes Payable </b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Effective November 1, 2008, the Company entered into an agreement, renewing and extending the term of the $13,815,000 notes payable due to G.S. Beckwith Gilbert, the Company’s significant shareholder and Chairman, from one year to three years with a maturity of November 1, 2011. Under the agreement, beginning February 1, 2009 and effective through October 31, 2011, the interest rate was increased from 4.5% to 9%, payable as follows: interest at the annual rate of 6%, was payable in cash, and the remaining interest, at the annual rate of 3%, was payable at the option of the Company in cash or “paid in kind” and added to the principal of the notes payable. Annual interest payments were due at October 31 of each fiscal year. During October 2009, the Company entered into an agreement to extend the due date of the interest payment owed to Mr. Gilbert on October 31, 2009 to December 31, 2009. This interest payment was paid in full by the Company prior to the extended due date. During fiscal year 2009, Mr. Gilbert loaned the Company an additional $100,000, bringing the principal amount of the notes payable due to Mr. Gilbert to $13,915,000 on October 31, 2009.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">In fiscal year 2010, Mr. Gilbert loaned the Company an additional $1,150,000, which was used in part to fund the prior fiscal year’s interest payment, thereby increasing the principal balance of the notes payable to $15,065,000. During fiscal year 2010, the Company paid fiscal year 2010 interest to Mr. Gilbert of $914,000, representing the entire cash portion of the fiscal year 2010 interest due, thereby meeting the cash payment requirements of the loan agreement. Total cash payments for interest made to Mr. Gilbert in fiscal year 2010 were $2,037,000, including the remaining fiscal year 2009 interest payment. The balance of the fiscal year 2010 interest payable of $446,000 was accrued. In October 2010, the Company made a $250,000 principal payment, reducing the loan principal to $14,815,000, resulting in a total of $15,261,000 due to Mr. Gilbert on October 31, 2010.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On May 9, 2011, as a result of the transactions described in “Private Placement” below, the Company’s outstanding notes payable to Mr. Gilbert were reduced by $10,000,000, and a new note payable was issued to Mr. Gilbert in the amount of $4,815,000. The new note payable bears a maturity date of November 1, 2014 and an annual interest rate of 9%, payable as follows: interest at the annual rate of 6% will be payable in cash, and the remaining interest of 3% per annum will be payable at the option of the Company in cash or "paid in kind" and added to the principal of the note payable. Interest payments are to be made annually on October 31 of each year. On September 6, 2011, the Company entered into an amendment to the note payable agreement, reducing the annual interest rate from 9% to an annual rate of 6%, payable in cash, and the Company’s option to pay the remaining interest of 3% per annum in cash or “paid in kind” was discontinued.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">During fiscal year 2011, the Company paid fiscal year 2011 interest to Mr. Gilbert of $912,000, representing the entire fiscal year 2011 interest due, thereby meeting the payment requirements of the loan agreement. Total payments for interest made to Mr. Gilbert in fiscal year 2011 were $1,358,000, including the remaining fiscal year 2010 interest payment.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company has received a commitment from Mr. Gilbert, dated January 4, 2012, that if the Company, at any time, is unable to meet its obligations through January 4, 2013, Mr. Gilbert will provide the necessary continuing financial support to the Company in order for the Company to meet such obligations. Such commitment for financial support may be in the form of additional advances or loans to the Company, in addition to the deferral of principal and/or interest payments due on the existing loans, if deemed necessary. The note payable is secured by the Company’s assets.</p>
<!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><b>7. Private Placement</b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On May 9, 2011, the Company entered into securities purchase agreements to sell 1,044,644 shares of the Company’s common stock, subject to trading restrictions, in a private placement financing with a select group of accredited investors, including certain members of the Board of Directors of the Company - 687,500 shares of restricted common stock were sold to non-affiliated investors at a price of $4.00 per share and 357,144 shares of restricted common stock were sold to three of the Company’s Directors at a price of $4.20 per share, resulting in aggregate gross proceeds of $4,250,000.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">In addition, on the same day, the Company entered into a debt conversion agreement with Mr. Gilbert, pursuant to which the Company (1) repaid, from the private placement proceeds, $4,250,000 of principal on the outstanding notes payable to Mr. Gilbert and (2) converted $5,750,000 of the principal amount of the notes payable held by Mr. Gilbert into 1,369,048 shares of common stock, subject to trading restrictions. A new note payable was issued to Mr. Gilbert equal to the remaining $4,815,000 principal balance of the existing notes payable following such conversion. In addition, on the same day, the Company entered into a debt conversion agreement with Mr. Gilbert, pursuant to which the Company (1) repaid, from the private placement proceeds, $4,250,000 of principal on the outstanding notes payable to Mr. Gilbert and (2) converted $5,750,000 of the principal amount of the notes payable held by Mr. Gilbert into 1,369,048 shares of common stock, subject to trading restrictions. A new note payable was issued to Mr. Gilbert equal to the remaining $4,815,000 principal balance of the existing notes payable following such conversion. The stock issued by the Company to Mr. Gilbert was done so based on the trading price of the Company’s stock and thus considered to be fair value based on a Level 1 input per ASC Topic 820, “Fair Value Measurements and Disclosures”, and accordingly no gain or loss resulted from the conversion.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The new note payable bears a maturity date of November 1, 2014 and an annual interest rate of 9%, payable as follows: interest at the annual rate of 6% will be payable in cash, and the remaining interest of 3% per annum will be payable at the option of the Company in cash or "paid in kind" and added to the principal of the note payable. Interest payments will be made annually on October 31 of each year.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On September 6, 2011, the Company entered into an amendment to the note payable agreement, reducing the annual interest rate from 9% to an annual rate of 6%, payable in cash, and the Company’s option to pay the remaining interest of 3% per annum in cash or “paid in kind” was discontinued.</p>
<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>8. Leases </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company’s headquarters, located in Stamford, Connecticut, are subject to a lease for the five year period ending January 21, 2015, at an average annual rental rate of $209,000. The Company’s software development and manufacturing facility, located in Bohemia, New York, is subject to a lease through October 31, 2012, at an annual rental rate of $113,000. These leases provide for additional payments of real estate taxes and other operating expenses over the base amount in the rental agreement. Other short-term operating leases are included below. All other operating leases are under a month-to-month arrangement.</p> <div align="center"> <table width="100%" style="WIDTH:100%; BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td colspan="3" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>Contractual obligations</b></p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Fiscal Year Ended October 31:</p></td> <td colspan="3" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b><u>under operating leases</u></b></p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">2012</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">$ 359,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">2013</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">213,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">2014</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">218,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">2015</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">51,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">2016</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">-</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Total minimum contractual obligations</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>$ 841,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr></table></div>
<!--egx--><p style="LINE-HEIGHT:normal; TEXT-INDENT:-0.25in; MARGIN:0in 0in 0pt 0.25in"><b>10.</b><b> </b><b>Stock Options </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">In fiscal year 2009, the Company’s Board of Directors approved the Company’s 2009 stock option plan, which provides for the granting of stock options for up to 500,000 shares of the Company’s common stock. During fiscal year 2010, the plan was amended to provide for the granting of another 500,000 stock option shares, for a total provision of 1,000,000 stock option shares of the Company’s common stock as of October 31, 2010. During fiscal year 2011, the plan was amended for the granting of another 500,000 stock option shares, for a total provision of 1,500,000 stock option shares of the Company’s common stock as of October 31, 2011. The Company's prior stock option plan, which provided for the granting of stock options for up to 2,200,000 shares of the Company's common stock, expired during fiscal year 2009. The stock option’s exercise price per share is typically the fair market value of the Company’s common stock at the date of grant. Stock options granted may be exercised up to a maximum of ten years from the date of grant; however, individuals who own more than 10% of the Company’s common stock must exercise their stock options within five years of the date of the grant, and are exercisable at 110% of the fair market value of the Company’s common stock at the date of grant.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Black-Scholes stock option valuation model was developed for use in estimating the fair value of traded stock options, which have no vesting restrictions and are fully transferable. In addition, stock option valuation models require the input of highly subjective assumptions including expected stock price volatility.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options due to changes in subjective input assumptions which may materially affect the fair value estimate. In addition, the Company’s stock options have characteristics significantly different from those of traded options.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">There were 538,000 shares of common stock reserved for future issuance under the Company’s 2009 stock option plan as of October 31, 2011. For fiscal year 2011 stock-based compensation expense of $259,000 was primarily charged to selling, general, and administrative expense, consisting of $41,000 for stock options granted during fiscal year 2011 and $218,000 for stock options granted prior to October 31, 2010. There was $955,000 of unrecognized stock-based compensation costs related to non-vested, stock-based compensation arrangements, expected to be recognized over a weighted average period of 3.3 years as of October 31, 2011. The Company had 397,800 unvested stock options as of October 31, 2011.</p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Information with respect to the Company’s stock options for fiscal years 2011 and 2010 is as follows:</p> <table width="100%" style="MARGIN:auto auto auto 5.4pt; WIDTH:100%; BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr> <td width="49%" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:49%; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="13%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:13%; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>Number of stock options</b></p></td> <td width="10%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:10%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>Weighted average exercise price</b></p></td> <td width="16%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:16%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>Weighted average remaining contractual term (in years)</b></p></td> <td width="12%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:12%; PADDING-RIGHT:6.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>Aggregate intrinsic value</b></p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Stock options outstanding at November 1, 2009</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">1,627,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">$ .70</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Stock options granted in fiscal year 2010</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">394,500</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">$3.32</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Stock options exercised in fiscal year 2010</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">(397,500)</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">$ .52</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Stock options forfeited and expired in fiscal year 2010</p></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">(146,000)</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">$1.23</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Outstanding at October 31, 2010</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>1,478,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>$1.40</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Stock options granted in fiscal year 2011</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>80,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>$3.73</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Stock options exercised in fiscal year 2011</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>(70,000)</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>$ .53</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Stock options forfeited in fiscal year 2011</p></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>(82,500)</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>$2.97</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Stock options outstanding at October 31, 2011</p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>1,405,500</b></p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>$1.49</b></p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>4.7</b></p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>$2,084,000</b></p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Stock options exercisable at October 31, 2011</p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>1,007,700</b></p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>$ .75</b></p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>3.2</b></p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>$ 756,000</b></p></td></tr></table> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The weighted average grant date fair value of the Company’s stock options granted during fiscal years 2011 and 2010 was $3.90 and $2.42, respectively. The total intrinsic value of stock options exercised was $37,000 and $206,000 during fiscal years 2011 and 2010, respectively.</p>
<!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><b>11. Major Customers</b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company’s principal business is to provide its customers business intelligence and predictive analytics solutions serving the needs of the aviation industry, primarily airlines, airports, and other aviation related companies. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Credit losses historically have been immaterial.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Two customers accounted for 32% and 23% of total revenues for fiscal years 2011 and 2010, respectively. One customer, a U.S. government agency, accounted for 21% of total revenues, or $2,843,000, and one customer accounted for 11% of total revenues, or $1,500,000, for fiscal year 2011. American Airlines accounted for 12% of total revenues, or $1,313,000, and one customer accounted for 11% of total revenues, or $1,191,000, for fiscal year 2010. There were no significant past due accounts receivable balances for these customers as of the fiscal year ended October 31, 2011.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">American Airlines parent corporation, AMR Corporation, filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code on November 29, 2011. In December 2011, the Company was notified by American Airlines that it will continue operating under the original contract between the Company and American Airlines, with an immaterial revision. The pre-petition receivable from American Airlines is less that the provision of doubtful accounts as of October 31, 2011.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company had foreign sales of $217,000 and $147,000 in fiscal years 2011 and 2010, respectively. All sales, including foreign sales, are denominated in U.S. dollars.</p>
1358290
2036837
12789
26324
<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>9. Income Taxes </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company’s provision for income taxes in each fiscal year consists of current state, and local minimum taxes.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">A reconciliation of the U.S statutory tax rate to the Company’s effective tax rate for fiscal years 2011 and 2010 is as follows:</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <table width="100%" style="WIDTH:100%; BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td colspan="5" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>2011</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td colspan="5" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">2010</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="9%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:9%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>Amount</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="9%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:9%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>Percent</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="9%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:9%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">Amount</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td width="9%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:9%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">Percent</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">U.S. statutory tax</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>$</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>361,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>34.0</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>%</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">$</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">23,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">34.0</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">%</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Decrease in valuation allowance</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>(2,018,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>)</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>(190.1</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>)</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">(83,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">)</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">(122.3</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">)</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Permanent differences</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>73,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>6.9</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">(38,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">)</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">(56.8</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">)</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">NOL stock-compensation adjustment</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>-</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>-</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">116,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">171.4</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">State tax, net of federal benefit</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>12,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>1.1</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">30,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">45.1</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Other, net</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>-</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>-</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">(2,000</p></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">)</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">(3.0</p></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">)</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Effective tax rate</p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>$</b></p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>(1,572,000</b></p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>)</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>(148.1</b></p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>)%</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">$</p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">46,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">68.4</p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">%</p></td></tr></table> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The tax effects of temporary differences that give rise to deferred tax assets and liabilities as of October 31, 2011 and 2010 is as follows:</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <table width="100%" style="WIDTH:100%; BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td colspan="2" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>2011</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td colspan="2" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">2010</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td width="17%" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:17%; PADDING-RIGHT:0in; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Deferred tax assets and liabilities:</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Net operating loss carry-forward</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>$</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>4,696,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">$</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">4,924,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Accrued interest</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>-</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">178,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Accrued vacation</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>103,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">78,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Allowance for doubtful accounts receivable</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>40,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">10,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Stock compensation-nonqualified</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>41,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">7,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Contributions</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>-</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">4,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Depreciation</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>(984,000</b></p></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>)</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">(802,000</p></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">)</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Deferred tax assets and liabilities</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>3,896,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">4,399,000</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Less: valuation allowance</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>(2,306,000</b></p></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>)</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">(4,399,000</p></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">)</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Net deferred tax assets and liabilities</p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>$</b></p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>1,590,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">$</p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">-</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr></table> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The income tax (benefit) provision for fiscal years ended October 31, 2011 and 2010, consisted of the following:</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <table width="100%" style="WIDTH:100%; BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td colspan="2" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>2011</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td colspan="2" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">2010</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td width="16%" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:16%; PADDING-RIGHT:0in; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Current:</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Federal</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>$</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>-</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">$</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">-</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">State</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>18,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">46,000</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Income tax provision-current</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>18,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">46,000</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Deferred:</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Federal</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>(1,232,000</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>)</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">-</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">State</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>(358,000</b></p></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>)</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">-</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Total income tax (benefit) provision</p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>$</b></p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>(1,572,000</b></p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>)</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">$</p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">46,000</p></td></tr></table> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">At October 31, 2011, the Company had available a federal net operating loss carry-forward of $12,014,000 for income tax purposes, which will expire in various tax years from 2012 through 2029. The Company evaluates whether a valuation allowance related to deferred tax assets is required each reporting period. A valuation allowance is established if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. During 2011 the Company reversed $1,590,000 of a total valuation allowance of $3,896,000 related to deferred tax assets, since it was determined that it is more likely than not these assets will be realized. This determination was primarily based on cumulative positive earnings in recent years and projected taxable income in the future. In evaluating whether or not to realize a deferred tax asset, the Company considered all available positive and negative evidence, including past operating results and a forecast of future taxable income.</p>
<!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><b>12. Royalty Agreement </b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company is a party to a license agreement, as amended in fiscal year 2001, whereby the Company is granted the exclusive right and license worldwide to manufacture and sell PASSUR® Systems for use with airline dispatch systems and in other aircraft flight tracking systems. The Company is also granted an exclusive worldwide license to sell PASSUR® Systems and/or data subscriptions for noise applications, dispatch activities, and new applications based on modifications to existing designs. Under the terms of agreement, the Company paid a royalty based on the number of PASSUR® Systems sold and/or installed and generating subscription revenues, subject to a minimum annual royalty of $75,000. During fiscal year 2009, the Company amended the agreement to a fixed fee royalty of $50,000 per year. The Company had $50,000 accrued as a component of accrued expenses and other accrued liabilities as of October 31, 2011 and 2010. This license agreement is in effect until the date of expiration of the last licensed patent to expire, which occurs in 2013.</p>
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<!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>1. Description of Business and Significant Accounting Policies</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 5.1pt 0pt 0in"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 5.1pt 0pt 0in"><b>Nature of Business</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company is a business intelligence company which develops predictive analytics built on proprietary algorithms and on concurrent integration and simultaneous mining of multiple databases.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Basis of Presentation</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The consolidated financial statements include the accounts of PASSUR Aerospace, Inc. and its wholly-owned Subsidiary. All significant inter-company transactions and balances have been eliminated in consolidation.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Certain financial information in the footnotes has been rounded to the nearest thousand for presentation purposes.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Revenue Recognition Policy</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company follows the provisions of FASB ASC 985-605 (SOP 97-2, “<i>Software Revenue Recognition”)</i>, as amended. ASC 985-605 delineates the accounting practices for software products, maintenance, support services, and professional services revenue. Under ASC 985-605, the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is determinable, and collection of the resulting receivable is probable. For arrangements involving multiple elements (e.g. maintenance, support, and other services), the Company allocates revenue to each element of the arrangement based on vendor-specific objective evidence of its fair value, or for products not being sold separately, the objective and verifiable fair value established by management.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company recognizes service and maintenance revenues on a straight-line basis over the service contract period. Revenues for data subscription services are recognized on a monthly basis upon the execution of an agreement and the customer’s receipt of the data. The Company performs certain professional services for customers on a subscription basis that have stand-alone value. Such subscription-based professional services are recognized over the subscription period.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company recognizes license fee revenues on a straight-line basis over the term of the license agreement, which typically does not exceed five years.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company recognizes initial set-up fee revenues and associated costs on a straight-line basis over the estimated life of the customer relationship period, typically five years.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Use of Estimates</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 5.1pt 0pt 0in"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 5.1pt 0pt 0in"><b>Subsequent Events</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Management has evaluated subsequent events after the balance sheet date, through the issuance of the financial statements, for appropriate accounting and disclosure.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">American Airlines parent corporation, AMR Corporation, filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code on November 29, 2011. In December 2011, the Company was notified by American Airlines that it will continue operating under the original contract between the Company and American Airlines, with an immaterial revision.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Accounts Receivable</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company uses installment license and/or maintenance agreements as part of its standard business practice. The Company has a history of successfully collecting all amounts due under the original payment terms without making concessions. Net accounts receivable is comprised of the monthly, quarterly, or annual committed amounts due from customers pursuant to the terms of each respective customer’s agreement. These account receivable balances include unearned revenue attributable to deferred subscription revenues, deferred maintenance revenues, and unamortized license fee revenues.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Accounts receivable balances also include initial set-up fees billed when the service is performed. Revenues are recognized on a straight-line basis over the estimated life of the customer relationship period, typically five years.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">American Airlines parent corporation, AMR Corporation, filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code on November 29, 2011. In December 2011, the Company was notified by American Airlines that it will continue operating under the original contract between the Company and American Airlines, with an immaterial revision.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The provision for doubtful accounts was $94,000 and $25,000 as of October 31, 2011 and 2010, respectively. The Company monitors its outstanding accounts receivable balances and believes the provision is reasonable. The pre-petition receivable from American Airlines is less that the provision of doubtful accounts as of October 31, 2011.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Property, Plant and Equipment</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Property, plant and equipment are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of the related assets. Amortization of leasehold improvements is calculated on a straight-line basis over the estimated useful life of the improvements or the term of the lease, including renewal options expected to be exercised, whichever is shorter.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 5.1pt 0pt 0in"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 5.1pt 0pt 0in"><b>PASSUR® Network</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The PASSUR® Network includes PASSUR® Systems and the related software workstations used for the data derived from PASSUR® Systems, as well as costs pertaining to raw material, work-in-process, and finished goods components. PASSUR® Network installations include the direct and indirect production and installation costs incurred for each of the Company-owned PASSUR® Systems, and are recorded at cost, net of accumulated depreciation of $7,695,000 and $6,331,000 as of October 31, 2011 and 2010, respectively. Depreciation is charged to cost of revenues and is calculated using the straight-line method over the estimated useful life of the asset, which is estimated at seven years. PASSUR® Network assets which are not installed in the PASSUR® Network are carried at cost and no depreciation is recorded.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Capitalized Software Development Costs</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company follows the provisions of FASB ASC 985-20 (SFAS 86, “<i>Accounting for the Costs of Software to be Sold, Leased, or Otherwise Marketed.</i>”) Capitalized software development costs are comprised of costs incurred to develop and significantly enhance software products to be sold or otherwise marketed. When technological feasibility is established, the Company begins to capitalize development costs, and once the software product is available for general release to the public, the Company begins to amortize such costs to cost of revenues.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Amortization of capitalized software costs is provided on a product-by-product basis based on the greater of the ratio of current gross revenues to the total of current and anticipated future gross revenues or the straight-line method over the estimated economic life of the product beginning at the point the product becomes available for general release, typically over five years. Costs incurred to improve and support products after they become available for general release are charged to expense as incurred.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The assessment of recoverability of capitalized software development costs requires the exercise of judgment by management. In the opinion of management, all such costs capitalized as of October 31, 2011 are recoverable through anticipated future sales of such applicable products. The Company capitalized $2,023,000 and $1,287,000 of such costs in fiscal years 2011 and 2010, respectively. The Company recorded $716,000 and $468,000 of amortization related to software development projects during fiscal years 2011 and 2010, respectively. The Company released capitalized software products for sale during fiscal years 2011 and 2010, and had other software products in development as of October 31, 2011 and 2010.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company did not write off any significant capitalized software projects during fiscal years 2011 and 2010.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Long-Lived Assets</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company reviews long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable. Impairment is recognized to the extent the sum of undiscounted estimated future cash flows expected to result from the use of the asset is less than the carrying value. Assets to be disposed of are carried at the lower of their carrying value or fair value, less costs to sell. The Company evaluates the periods of amortization continually in determining whether later events and circumstances warrant revised estimates of useful lives. If estimates are changed, the unamortized costs will be allocated to the increased or decreased number of remaining periods in the revised life.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 5.1pt 0pt 0in"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 5.1pt 0pt 0in"><b>Cost of Revenues</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Costs associated with subscription and maintenance revenues consist primarily of direct labor, depreciation of PASSUR® Network Systems, amortization of capitalized software development costs, communication costs, data feeds, allocated overhead costs, travel and entertainment, and consulting fees. Also included in cost of revenues are costs associated with upgrades to PASSUR® Network Systems necessary to make such systems compatible with new software applications, as well as the ordinary repair and maintenance of existing PASSUR® Network Systems. Additionally, cost of revenues in each reporting period is impacted by: (1) the number of PASSUR® Network units added to the Network, which include the cost of production, shipment, and installation of these assets, which are capitalized to the PASSUR® Network; and (2) capitalized costs associated with software development projects. Both of these are referred to as “Capitalized Assets”, and are depreciated and/or amortized over their respective useful lives and charged to cost of revenues.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Income Taxes</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company follows the liability method of accounting for income taxes. Deferred income taxes are recorded to reflect the temporary differences in the tax bases of the assets or liabilities and their reported amounts in the financial statements. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount currently estimated to be realized. The Company follows ASC 740-10 (Financial Accounting Standards Board (“FASB”) Interpretation No. 48), <i>“Accounting for Uncertainty in Income Taxes – An Interpretation of FASB Statement No. 109” </i>(“FIN 48”), where tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in tax returns that do not meet these recognition and measurement standards. At October 31, 2011, the Company did not have any uncertain tax positions. As permitted by ASC-740-10 (FIN 48), the Company’s accounting policy is to prospectively classify accrued interest and penalties related to any unrecognized tax benefits in its income tax provision.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Research and Development Costs</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Research and development costs are expensed as incurred.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 5.1pt 0pt 0in"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 5.1pt 0pt 0in"><b>Net Income per Share Information</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Basic net income per share is computed based on the weighted average number of shares outstanding. Diluted net income per share is based on the sum of the weighted average number of common shares outstanding and common stock equivalents. Shares used to calculate net income per share for fiscal years 2011 and 2010 are as follows:</p> <table width="100%" style="WIDTH:100%; BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td width="11%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:11%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center"><b>2011</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td width="11%" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:11%; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="center">2010</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:9pt; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; TEXT-INDENT:-9pt; MARGIN:0in 0in 0pt">Basic weighted average shares outstanding</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>5,894,817</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">4,553,681</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Effect of dilutive stock options</p></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>811,641</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">788,618</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Diluted weighted average shares outstanding</p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>6,706,458</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">5,342,299</p></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Weighted average shares which are not included in the calculation of diluted net income per share because their impact is anti-dilutive</p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td></tr> <tr> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:9pt; PADDING-RIGHT:0.1in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="LINE-HEIGHT:normal; TEXT-INDENT:-9pt; MARGIN:0in 0in 0pt">Stock options</p></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right"><b>673,859</b></p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"></td> <td style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt" align="right">689,381</p></td></tr></table> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Deferred Revenue</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Deferred revenue includes advances received on subscription services and/or maintenance agreements, which are derived from the Company’s PASSUR® Network and which may be prepaid either annually or quarterly, as well as the unamortized portion of one-time payments received for license fees relating to Company software applications. Revenues from subscription and maintenance services are recognized as income ratably over the subscription and/or maintenance period that coincides with the respective agreement.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company recognizes license fee revenues on a straight-line basis over the term of the license agreement, which typically does not exceed five years.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company recognizes initial set-up fee revenues and associated costs on a straight-line basis over the estimated life of the customer relationship period, typically five years.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Fair Value of Financial Instruments</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The recorded amounts of the Company’s cash, receivables, accounts payable, and accrued liabilities approximate their fair values principally because of the short-term nature of these items. The fair value of related party debt is not practicable to determine due primarily to the fact that the Company’s related party debt is held by its Chairman and significant shareholder, and the Company does not have any third-party debt with which to compare.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">Additionally, on a recurring basis, the Company uses fair value measures when analyzing asset impairments. Long-lived assets and certain identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined such indicators are present, and the review indicates that the assets will not be fully recoverable based on the undiscounted estimated future cash flows expected to result from the use of the asset, their carrying values are reduced to estimated fair value.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Stock-Based Compensation </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company follows FASB ASC 718 (SFAS 123R, <i>“Share-Based Payments”</i>) which requires measurement of compensation cost for all stock-based awards at fair value on date of grant, and recognition of stock-based compensation expense over the service period for awards expected to vest. The fair value of stock options was determined using the Black-Scholes valuation model. Such fair value is recognized as an expense over the service period, net of forfeitures. Stock-based compensation expense was $259,000 and $120,000 in fiscal years 2011 and 2010, respectively, and was primarily included in selling, general, and administrative expenses.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company’s stock options vest over a period of three and five years. The fair value for these stock options was estimated at the date of grant using a Black-Scholes stock option pricing model, with the following weighted average assumptions for fiscal years 2011 and 2010; risk-free interest rates of 3.51% to 4.47%, volatility factor of the expected market price of the Company’s common stock of 109% to 128%, no dividend yield, and a weighted average expected life of the stock options of 6.5 years.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Comprehensive Income</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">The Company’s comprehensive income is equivalent to that of the Company’s total net income for fiscal years 2011 and 2010.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b> </b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b>Recent Accounting Pronouncements</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">In June 2011, the FASB issued new guidance on the presentation of comprehensive income. Specifically, the new guidance allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The new guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. While the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under current accounting guidance. We do not expect that the adoption of this disclosure-only guidance will have an impact on our consolidated financial results and becomes effective during the second quarter of fiscal 2012.</p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"> </p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt">In May 2011, the FASB issued amendments to fair value measurement and disclosure requirements. This guidance amends United States generally accepted accounting principles (“U.S. GAAP”) to conform with measurement and disclosure requirements in International Financial Reporting Standards (“IFRS”). The amendments change the wording used to describe the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. This includes clarification of the Board’s intent about the application of existing fair value measurement and disclosure requirements and those that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. In addition, to improve consistency in application across jurisdictions, some changes in wording are necessary to ensure that U.S. GAAP and IFRS fair value measurement and disclosure requirements are described in the same way (for example, using the word “shall” rather than “should” to describe the requirements in U.S. GAAP). This amended guidance is to be applied prospectively and becomes effective during the second quarter of fiscal 2012. We do not expect this guidance will have a material impact on results of operations or financial position.</p>
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