Discontinued Operations

9 Months Ended

Feb. 29, 2012

Discontinued Operations

Discontinued Operations

D. Discontinued Operations

In May 2011, the Company sold its AMT product line in exchange for $250,000 in cash and a note receivable for $162,500. The note receivable accrued interest at a rate of 1% per month and has been collected in full at February 29, 2012.  In accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations, the accompanying consolidated statements of operations and cash flows present the operating results of AMT as discontinued operations for the three and nine month periods ended February 28, 2011. Following completion of the Recapitalization Transaction in March 2011, the new management team determined that the AMT product line was not a strategic component of the ongoing business. AMT’s technologies are aimed directly at small Tool & Die shops located primarily in Michigan and Indiana performing services for the automotive industry. We entered into direct negotiations with the long tenured manager of that product line that resulted in the completion of the sale on May 24, 2011.

The operating results of discontinued operations included on the Consolidated Statements of Operations for the three and nine months ended February 28, 2011 were as follows (in thousands):

		For the three months ended February 28, 2011
Revenue	$	140
Cost of revenue		28
Gross margin		112
Research and development expenses		52
Selling, general and administrative expenses		11
Income from discontinued operations before income taxes		49
Provision for income taxes		-
Income from discontinued operations	$	49

		For the nine months ended February 28, 2011
Revenue	$	383
Cost of revenue		75
Gross margin		308
Research and development expenses		154
Selling, general and administrative expenses		32
Income from discontinued operations before income taxes		122
Provision for income taxes		-
Income from discontinued operations	$	122

Expenses related to centrally provided general and administrative services such as human resources, accounting, cash management, payroll and management were not allocated to the AMT product line. No allocation of interest expense was included in the operating results of AMT.