Discontinued Operations in India

3 Months Ended

Apr. 30, 2012

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

17. Discontinued Operations in India

The Company decided to discontinue operations in its India glove manufacturing facility and put the assets and business up for sale. The Company decided to sell this division primarily because it has incurred significant operating losses since inception, and the Company has been unsuccessful in developing sufficient sales to reach at least break even. The Company is attempting to sell the operations as an ongoing operation but shut down its operations in December 2011.

Prior year financial statements for the three months ended October 31, 2010, have been restated to present the operations of the India glove manufacturing subsidiary as a discontinued operation.

In conjunction with the discontinuance of operations in FY12, the Company recognized a pretax loss on disposal of $1.7 million, primarily consisting of $0.9 million in fixed asset write-downs, $0.4 million in inventory write-downs and $0.1 million in professional fees relating to the sale and $0.3 million in shutdown expenses. The assets and liabilities of the discontinued operations are presented separately under the captions “Assets of discontinued operations in India” and “Liabilities of discontinued operations in India,” respectively, in the accompanying Balance Sheets at April 30, 2012 and January 31, 2012, and consist of the following:

	April 30, 2012		January 31, 2012
Cash	$	233,312	$	230,502
Accounts receivable		—		6,772
Inventory		217,037		200,000
Other current asset		23,368		27,262
Property and equipment		1,529,933		1,534,034
Total assets of discontinued operations		2,003,649		1,998,570
Liabilities of discontinued operations:
Accounts payable		2,892		5,715
Other liabilities		40,448		59,065
Total liabilities of discontinued operations		43,340		64,780
Net assets of discontinued operations	$	1,960,309	$	1,933,790

The following table illustrates the reporting of the discontinued operations reclassified on the face of the Statements of Operations for the three months ended April 30, 2012 and 2011:

	Three Months Ended April 30,
	2012		2011
Net sales		—	$	168,027
Cost of goods sold		—		363,884
Gross profit (loss)		—		(195,857	)
Operating expense		—		44,780
Operating loss		—		(240,637	)
Shutdown expense accrual		—		(4,924	)
Loss from discontinued operations before income taxes		—		(245,561	)
Benefit from income taxes from discontinued operations		—		(88,402	)
Net loss from discontinued operations			$	(157,159	)

The above amounts presented for the previous fiscal year have been reclassified to conform to the current presentation.