NOTE B – DISCONTINUED OPERATIONS

In December 2016, the Company entered into a share purchase agreement with certain foreign counterparties with respect to a potential sale of Gillam-FEI (“Gillam”), the Company’s Belgian subsidiary. However, these counterparties have not yet performed their obligations under that agreement. Because the counterparties have failed to perform their obligations under the share purchase agreement the Company has a right to terminate that share purchase agreement. The Company continues to negotiate with these counterparties to effectuate a closing of the transaction contemplated by the share purchase agreement, but the Company is also discussing a sale of the Gillam business with other potential buyers. In April 2017, the Company decided to sell its Gillam business as soon as practicable, and began contacting potential buyers other than the counterparty to the stock purchase agreement. The Company believes that the divestment should be completed by the end of fiscal year 2018. Accordingly, the Company determined that the assets and liabilities of this reportable segment met the discontinued operations criteria in Accounting Standards Codification 205-20-45 for the year ended April 30, 2017, and Gillam’s results have been classified as discontinued operations in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

Summarized operating results for the Gillam discontinued operations, for the three and six months ended October 31, 2017 and 2016 respectively, are as follows:

	Six months						Three months
	Periods ended October 31,
	2017			2016			2017			2016
	(UNAUDITED)			(UNAUDITED)			(UNAUDITED)			(UNAUDITED)
	(In thousands except par value)
Revenues	$	1,955		$	2,294		$	943		$	1,448
Cost of Revenues		1,390			1,621			674			1,064
Gross Margin		565			673			269			384
Selling and administrative expenses		703			950			346			456
Research and development expenses		268			277			118			94
Operating Loss		(406	)		(554	)		(195	)		(166	)
Other income (expense):
Investment (loss) income
Other income (expense), net		(3	)		(3	)		(2	)		(2	)
Loss before provision for income taxes		(409	)		(557	)		(197	)		(168	)
Benefit for income taxes		1			-			5			-
Net Loss	$	(408	)	$	(557	)	$	(192	)	$	(168	)

The carrying amounts of assets and liabilities for the Gillam discontinued operations are as follows:

	October 31,		April 30,
	2017		2017

Cash and cash equivalents	$	794	$	575
Accounts receivable, net of allowance for doubtful accounts		2,525		3,202
Inventories, net		4,633		3,980
Prepaid expenses and other		205		408
Total current assets of discontinued operations	$	8,157	$	8,165
Property, plant and equipment, at cost, net of accumulated depreciation and amortization	$	547	$	555
Investments		15		14
Deferred taxes – non-current		-		-
Total non-current assets of discontinued operations	$	562	$	569

Accounts payable – trade	$	1,004	$	949
Accrued liabilities		974		1,300
Total current liabilities of discontinued operations		1,978		2,249
Deferred rent and other liabilities		1,387		1,215
Total non-current liabilities of discontinued operations	$	1,387	$	1,215