Business Segments

6 Months Ended

Jan. 31, 2013

Business Segments [Abstract]

Business Segments

8. Business Segments

The Company’s business segments are internally organized primarily by geographic location of the operating facilities.  In accordance with GAAP regarding disclosures about business segments, the Company has segregated the Netherlands operation and the United States operations into separate reportable segments.  Segment revenue for the Netherlands operation includes only revenue generated out of the Netherlands subsidiary and does not include rest of world revenue attributable to the United States operations.

The Company evaluates the performance of and allocates resources to each of the segments based on their operating results.  Unaudited information concerning our operating business segments is as follows for the periods indicated (in thousands):

	Three months ended January 31, 2013
	United States		Netherlands		Eliminations			Consolidated
Revenue -  external customers	$	7,304	$	174	$	-		$	7,478
Revenue - intercompany		54		7		(61)	1		-
Cost of revenue		1,688		94		(61)	1		1,721
Operating expense		6,179		144		-			6,323
Interest expense		269		36		(36)	2		269
Other expense (income)		(40)		-		36	2		(4)
Income (loss) before provision
for income taxes	$	(738)	$	(93)	$	-		$	(831)
	Six months ended January 31, 2013
	United States		Netherlands		Eliminations			Consolidated
Revenue -  external customers	$	13,071	$	349	$	-		$	13,420
Revenue - intercompany		125		14		(139)	1		-
Cost of revenue		3,074		194		(139)	1		3,129
Operating expense		10,271		283		-			10,554
Interest expense		337		53		(53)	2		337
Other expense (income)		(61)		-		53	2		(8)
Income (loss) before provision for
income taxes	$	(425)	$	(167)	$	-		$	(592)
		As of January 31, 2013
	United States		Netherlands		Eliminations			Consolidated
Total assets	$	32,993	$	192	$	(1,829)	3	$	31,356

1  The Netherlands segment charges the United States segment for customer support services and the United States segment charges the Netherlands segment for software royalties.

2  The United States segment charges the Netherlands segment for interest on the intercompany loan at a rate of 4.25%.

3  Net intercompany loan due from the Netherlands.

	Three months ended January 31, 2012
	United States		Netherlands		Eliminations			Consolidated
Revenue -  external customers	$	5,306	$	195	$	-		$	5,501
Revenue - intercompany		68		8		(76)	1		-
Cost of revenue		1,222		105		(76)	1		1,251
Operating expense		3,970		110		-			4,080
Interest expense		59		35		(35)	2		59
Other expense (income)		(45)		(1)		35	2		(11)
Income (loss) before provision
for income taxes	$	168	$	(46)	$	-		$	122
	Six months ended January 31, 2012
	United States		Netherlands		Eliminations			Consolidated
Revenue -  external customers	$	10,511	$	400	$	-		$	10,911
Revenue - intercompany		140		18		(158)	1		-
Cost of revenue		2,343		202		(158)	1		2,387
Operating expense		7,623		235		-	-		7,858
Interest expense		121		75		(75)	2		121
Other expense (income)		(91)		(1)		75	2		(17)
Income (loss) before provision for
income taxes	$	655	$	(93)	$	-		$	562
	As of July 31, 2012
	United States		Netherlands		Eliminations			Consolidated
Total assets	$	21,800	$	258	$	(1,549)	3	$	20,509

1  Netherlands segment charges the United States segment for customer support services and the United Statessegment charges the Netherland segment for software royalties.

2  The United States segment charges the Netherlands segment for interest on the intercompany loan at a rate of 8%.

3Net intercompany loan due from the Netherlands.