SEGMENT REPORTING

6 Months Ended

Oct. 31, 2011

Notes to Financial Statements

SEGMENT REPORTING

In the Company’s operation of its business, management, including its chief operating decision maker, the Company’s Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements prepared on a basis not consistent with GAAP.

The Company operates in a single market consisting of the design, development, marketing, sales and support of its Dermacyte® cosmetic segment. The Company's commercial revenues are derived from sales of the Dermacyte line of topical cosmetic products in the United States, Latin America and Europe. The Company does not engage in intercompany revenue transfers between segments.

The Company's management evaluates performance based primarily on revenues in the geographic locations in which the Company operates. Segment profit or loss for each segment includes certain sales and marketing expenses directly attributable to the segment and excludes certain expenses that are managed outside the reportable segments.

Costs that are identifiable are allocated to the segments that benefit. Allocated costs may include those relating to development and marketing of products and services from which multiple segments benefit, or those costs relating to services performed by one segment on behalf of other segments. Each allocation is measured differently based on the specific facts and circumstances of the costs being allocated. Certain other corporate-level activity is not allocated to the Company’s segments, including costs of: human resources; legal; finance; information technology; corporate development and procurement activities; research and development; and employee severance.

The Company has recast certain prior period amounts within this note to conform to the way it internally managed and monitored segment performance during the current fiscal year.

Net revenues and segment profit, classified by the Company's reportable segments are as follows:

	For the three months ending October 31,						For the six months ending October 31,
		2011			2010			2011			2010
Product revenue
United States	$	27,415		$	36,083		$	60,892		$	42,981
Latin America		—			—			26,000			—
Europe		—			—			—			—
Total product revenue	$	27,415		$	36,083		$	86,892		$	42,981
Segment loss (income)
United States	$	117,120		$	133,077		$	332,165		$	233,043
Latin America		—			—			(10,585	)		—
Europe		—			—			—			—
Unallocated revenues
Government grant revenue		(78,244	)		—			(78,244	)		—
Unallocated expenses
General  and administrative		1,526,775			1,351,011			3,098,431			3,129,003
Research and development		488,577			572,649			1,140,538			1,717,892
Net interest and other expense (income)		875,695			(4,800	)		1,316,687			(25,702	)
Net loss	$	2,929,923		$	2,051,937		$	5,798,992		$	5,054,236

Assets are not allocated to segments for internal reporting presentations. A portion of amortization and depreciation may be included with various other costs in an overhead allocation to each segment and it is impracticable for the Company to separately identify the amount of amortization and depreciation by segment that is included in the measure of segment profit or loss.