Delaware
|
98-0204758
|
(State
or other jurisdiction of incorporation or organization)
|
(IRS
Employer Identification No.)
|
Title
of each class
|
Name
of each exchange on which
registered
|
Common
Stock, $0.0001 par value
|
The
NASDAQ Stock Market LLC
(NASDAQ
Global Market)
|
|
|
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PAGE
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PART
I
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Item
1.
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Business
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4
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Item
1A.
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Risk
Factors
|
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9
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Item
2.
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Properties
|
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14
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Item
3.
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Legal
Proceedings
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14
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Item
4.
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Submission
of Matters to a Vote of Security Holders
|
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14
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PART
II
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||||
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Item
5.
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Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of
Equity Securities
|
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15
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Item
6.
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Selected
Financial Data
|
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17
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Item
7.
|
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
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18
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Item
7A.
|
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Quantitative
and Qualitative Disclosures about Market Risk
|
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29
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|
Item
8.
|
|
Financial
Statements and Supplementary Data
|
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F-1-F-31
|
|
Item
9.
|
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosures
|
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30
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|
Item
9A.
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Controls
and Procedures
|
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30
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Item
9B.
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Other
Information
|
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30
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PART
III
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||||
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Item
10.
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Directors,
Executive Officers and Corporate Governance
|
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31
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|
Item
11.
|
|
Executive
Compensation
|
|
34
|
|
Item
12.
|
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
|
39
|
|
Item
13.
|
|
Certain
Relationships and Related Transactions, and Director
Independence
|
|
41
|
|
Item
14.
|
|
Principal
Accountant Fees and Services
|
|
41
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|
|
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|
PART
IV
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||||
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||
Item
15.
|
|
Exhibits
and Financial Statement Schedules
|
|
42
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|
|
|
|
|
|
|
Signatures
|
|
47
|
|
•
|
Mobility.
Mobile
communications and computing are among the driving forces behind
the
demand for wireless connectivity. The increased functionality and
declining cost of mobile wireless devices has fueled further growth.
Mobile connectivity has led to greater productivity as organizations
transmit data and gather information from remote staff and locations
where
land line connectivity is unavailable. Such mobile connectivity has
created significant cost savings in data collection, increased
responsiveness, enabled greater access to enterprise resources and
improved controls.
|
•
|
Capacity.
Current
technology allows wireless transmission with capacity, quality and
reliability superior to land line and comparable to fiber. For example,
current radio technology is capable of two-way data transfer at rates
up
to 1 gigabits per second, allowing wireless networks to transmit
content
as quickly as over fiber in most
instances.
|
•
|
Cost.
Wireless
networks cost less than comparable landline networks both to deploy
and to
operate. Wireless deployment is less expensive because the installation
of
a landline network is more labor-intensive, requires more time and
may
involve substantial right-of-way expenditures. We expect the main
cost
component of wireless networks, equipment, to continue to decline
as
technology advances and production volumes increase. Operating costs
of
wireless networks are also lower because landlines require extensive
troubleshooting to execute repairs. In addition, wireless networks
bypass
local service providers, eliminating recurring monthly
charges.
|
•
|
Deployment.
Because
enterprise wireless networks do not require negotiating rights of
way,
substantial infrastructure engineering, time-consuming third party
coordination efforts or additional FCC licensing, they can be deployed
quickly and less expensively. Rapid deployment allows organizations
to
install networks more closely in line with immediate needs rather
than
having to commit to time-consuming engineering projects in anticipation
of
future growth.
|
•
|
Increased
security of wireless data
transmission;
|
•
|
Introduction
of new technologies;
|
•
|
Increasing
accessibility and affordability of wireless mobile devices;
and
|
•
|
Increased
capacity of wireless networks, making them a legitimate substitute
for
land line communications.
|
• | Provide additional services for our customers. Each acquisition we make expands our customer base. We seek to expand these new customer relationships by making them aware of the diverse products and services we offer. We believe that providing these customers the full range of our services will lead to new projects or revenue opportunities and increased profitability. |
•
|
Maintain
and expand our focus in vertical markets. We
have deployed successful, innovative wireless solutions for multiple
customers in a number of vertical markets, such as public safety,
healthcare, security and gaming. We will continue to seek additional
customers in these targeted vertical markets who can benefit from
our
expertise and look for new ways in which we can deploy wireless networks
to enhance productivity within these markets. We also look to expand
our
vertical market coverage and include these new markets as
appropriate.
|
•
|
Strengthen
our relationships with technology providers. We
will continue to strengthen the relationships we have with technology
providers. These companies rely on us to deploy their technology
products
within their customer base. We have worked with these providers in
testing
new equipment they develop and our personnel maintain certifications
on
our technology providers’ products. We also look for innovative products
that can be of benefit to our customers, and endeavor to establish
similar
relationships with new technology providers as part of our commitment
to
offering the most advanced
solutions.
|
•
|
Seek
strategic acquisitions.
We will continue to look for additional acquisitions of compatible
businesses that can be assimilated into our organization, expand
our
geographic coverage and add accretive earnings to our business. Our
preferred acquisition candidates will have experience with specialty
communication systems. Since April 30, 2007, we have signed letters
of
intent to acquire Major Electric, Inc. and Max Engineering LLC. We
expect
these acquisitions to close by August 1, 2007, subject to completion
of
due diligence and the execution of definitive agreements.
|
•
|
Asset
tracking, which is a wireless network that monitors the location
of mobile
assets such as vehicles or stationary assets such as
equipment;
|
•
|
Telematics,
which are instructions sent through a wireless network that controls
a
device such as a slot machine or traffic signal;
and
|
•
|
Telemetry,
which is the acquisition of data from a measuring device, such as
devices
used at a water treatment plant to maintain the integrity of drinking
water.
|
•
|
Installation,
testing and commissioning of base station equipment, which is the
installation of radio frequency equipment inside the shelter at a
cell
site, and testing to ensure that the equipment is operating prior
to cell
site activation;
|
•
|
Equipment
modification and reconfiguration, which involves replacing old equipment
with new equipment, re-routing cables, and re-locating equipment
at the
cell site;
|
•
|
Network
modifications, which refers to work done on existing cell sites to
increase capacity or change the direction of sectors or
antennas;
|
•
|
Sectorization,
which is the installation of antennas to existing cell towers to
increase
the capacity of the cell site; and
|
•
|
Maintenance,
which includes antenna maintenance to replace damaged antennas, installing
tower lighting control panels or sensors, or repairing damaged
shelters.
|
•
|
the
timing and size of network deployments and technology upgrades by
our
customers;
|
•
|
fluctuations
in demand for outsourced network
services;
|
•
|
the
ability of certain customers to sustain capital resources to pay
their
trade accounts receivable balances and required changes to our allowance
for doubtful accounts based on periodic assessments of the collectibility
of our accounts receivable
balances;
|
•
|
reductions
in the prices of services offered by our
competitors;
|
•
|
our
success in bidding on and winning new business;
and
|
•
|
our
sales, marketing and administrative cost
structure.
|
•
|
quarterly
variations in operating results;
|
•
|
announcements
of new services by us or our
competitors;
|
•
|
the
gain or loss of significant
customers;
|
•
|
changes
in analysts’ earnings estimates;
|
•
|
rumors
or dissemination of false
information;
|
•
|
pricing
pressures;
|
•
|
short
selling of our common stock;
|
•
|
impact
of litigation;
|
•
|
general
conditions in the market;
|
•
|
changing
the exchange or quotation system on which we list our common stock
for
trading;
|
•
|
political
and/or military events associated with current worldwide conflicts;
and
|
•
|
events
affecting other companies that investors deem comparable to
us.
|
|
·
|
changes
in the region’s economic, social and political conditions or government
policies;
|
|
·
|
changes
in trade laws, tariffs and other trade restrictions or
licenses;
|
|
·
|
changes
in foreign exchange regulation in China may limit our ability to
freely
convert currency to make dividends or other payments in U.S.
dollars;
|
|
·
|
fluctuation
in the value of the RMB ( Chinese Yuan) could adversely affect the
value
of our investment in China;
|
|
·
|
limitations
on the repatriation of earnings or assets, including
cash;
|
|
·
|
adverse
changes in tax laws and
regulations;
|
|
·
|
difficulties
in managing or overseeing our China operations, including the need
to
implement appropriate systems, policies, benefits and compliance
programs;
and
|
|
·
|
different
liability standards and less developed legal systems that may be
less
predictable than those in the United
States.
|
|
Minimum
|
||
|
Lease
|
Annual
|
|
Location
|
Subsidiary
|
Expiration
Date
|
Rent
|
Exton,
Pennsylvania
|
WPCS
Corporate headquarters
|
February
1, 2008
|
$51,000
|
Auburn,
California (1)
|
Clayborn
|
Month-to-month
|
$64,440
|
St.
Louis, Missouri
|
Heinz
|
August
31, 2010
|
$56,142
|
Exton,
Pennsylvania
|
Heinz
|
July
31, 2008
|
$8,640
|
Windsor,
Connecticut
|
NECS
|
April
30, 2014
|
$80,821
|
Chicopee,
Massachusetts
|
NECS
|
August
31, 2007
|
$3,000
|
Lakewood,
New Jersey
|
Quality
|
August
31, 2007
|
$118,370
|
Sarasota,
Florida (2)
|
SECS
|
July
31, 2011
|
$51,360
|
Trenton,
New Jersey (3)
|
Voacolo
|
April
1, 2008
|
$54,000
|
Fairfield,
California (4)
|
Walker
Comm
|
February
28, 2011
|
$96,950
|
Rocklin,
California
|
Walker
Comm
|
January
31, 2008
|
$27,300
|
San
Leandro, California
|
Walker
Comm
|
July
31, 2008
|
$13,824
|
Period
|
High
|
Low
|
|||||
Fiscal
Year Ended April 30, 2007:
|
|||||||
First
Quarter
|
$
|
9.80
|
$
|
6.53
|
|||
Second
Quarter
|
10.75
|
6.60
|
|||||
Third
Quarter
|
10.58
|
8.64
|
|||||
Fourth
Quarter
|
13.74
|
9.30
|
|||||
Fiscal
Year Ending April 30, 2006:
|
|||||||
First
Quarter
|
$
|
9.18
|
$
|
4.32
|
|||
Second
Quarter
|
9.03
|
5.58
|
|||||
Third
Quarter
|
12.78
|
6.12
|
|||||
Fourth
Quarter
|
12.45
|
7.20
|
Reverse
Merger
|
4/30/03
|
4/30/04
|
4/30/05
|
4/30/06
|
4/30/07
|
|
WPCS
International
|
$
100.00
|
$
46.00
|
$
45.60
|
$
16.50
|
$
28.10
|
$
44.83
|
NASDAQ
Composite Index
|
$
100.00
|
$
86.74
|
$
113.74
|
$
113.83
|
$
137.57
|
$
149.57
|
NASDAQ
Telecommunications Index
|
$
100.00
|
$
91.94
|
$
124.49
|
$
124.29
|
$
157.46
|
$
175.28
|
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||
REVENUE
|
$
|
70,000,070
|
$
|
52,144,575
|
$
|
40,148,233
|
$
|
22,076,246
|
$
|
5,422,858
|
||||||
COSTS
AND EXPENSES:
|
||||||||||||||||
Cost
of revenue
|
47,781,351
|
38,010,945
|
32,445,470
|
17,286,099
|
3,768,495
|
|||||||||||
Selling,
general and administrative expenses
|
13,244,909
|
9,191,392
|
7,032,504
|
4,441,776
|
1,892,609
|
|||||||||||
Depreciation
and amortization
|
1,239,486
|
837,789
|
682,397
|
382,510
|
116,501
|
|||||||||||
Total
costs and expenses
|
62,265,746
|
48,040,126
|
40,160,371
|
22,110,385
|
5,777,605
|
|||||||||||
OPERATING
INCOME (LOSS)
|
7,734,324
|
4,104,449
|
(12,138
|
) |
(34,139
|
) |
(354,747
|
) | ||||||||
OTHER
EXPENSE (INCOME):
|
||||||||||||||||
Interest
expense
|
496,330
|
256,022
|
31,865
|
14,048
|
6,997
|
|||||||||||
Interest
income
|
(525,524
|
) |
(121,720
|
) |
(10,817
|
) | - | - | ||||||||
Minority
interest
|
23,099
|
-
|
- | - | - | |||||||||||
Loss
(gain) on change in fair value of warrants
|
-
|
4,078,494
|
(1,414,263
|
) | - | - | ||||||||||
INCOME
(LOSS) BEFORE INCOME TAX PROVISION
|
7,740,419
|
(108,347
|
) |
1,381,077
|
(48,187
|
) |
(361,744
|
) | ||||||||
Income
tax provision
|
3,146,818
|
1,515,773
|
52,096
|
76,000
|
19,550
|
|||||||||||
NET
INCOME (LOSS)
|
$
|
4,593,601
|
($1,624,120
|
)
|
$
|
1,328,981
|
($124,187
|
)
|
($381,294
|
)
|
||||||
Basic
net income (loss) per common share
|
$
|
0.80
|
($0.40
|
)
|
$
|
0.50
|
($0.01
|
)
|
($0.05
|
)
|
||||||
Diluted
net income (loss) per common share
|
$
|
0.72
|
($0.40
|
)
|
$
|
0.49
|
($0.01
|
)
|
($0.05
|
)
|
BALANCE
SHEET DATA:
|
||||||||||||||||
CASH
AND CASH EQUIVALENTS
|
$ |
21,558,739
|
$ |
12,279,646
|
$ |
989,252
|
$ |
1,984,636
|
$ |
167,547
|
||||||
TOTAL
ASSETS
|
71,691,670
|
44,122,318
|
30,176,711
|
20,882,097
|
9,821,226
|
|||||||||||
LONG-TERM
DEBT
|
7,337,105
|
3,487,757
|
831,156
|
815,418
|
-
|
|||||||||||
WORKING
CAPITAL ( Current Assets less
|
30,319,951
|
20,175,844
|
5,095,320
|
2,396,169
|
1,435,134
|
|||||||||||
Current
Liabilities)
|
||||||||||||||||
SHAREHOLDERS'
EQUITY
|
$ |
51,531,983
|
$ |
32,563,270
|
12,628,407
|
$ |
11,287,755
|
$ |
7,460,887
|
|||||||
|
·
|
For
the year ended April 30, 2007, the specialty communication systems
segment
represented approximately 81% of total revenue, and the wireless
infrastructure services segment represented approximately 19% of
total
revenue, which remains consistent with our historical services revenue
mix.
|
|
·
|
As
we continue to search for acquisitions, our primary goal is to identify
companies which are performing well financially and are compatible
with
the services that we perform in the specialty communication systems
segment. This trend could lead to a further shift in our revenue
composition towards the specialty communication systems segment.
We
believe that the strength of our experience in the design and
deployment of specialty communication systems gives us a competitive
advantage.
|
|
·
|
We
also seek to achieve organic growth in our existing business by maximizing
the value of our existing customer base, maintaining and expanding
our
focus in vertical markets and developing our relationships with technology
providers.
|
|
·
|
We
believe that the emergence of new and improved technologies such
as WiMAX
will create additional opportunities for us to design and deploy
solutions
through the use of the latest technologies and assisting existing
customers in enhancing the efficiency of their existing wireless
networks
using new technologies.
|
|
·
|
We
believe that the wireless carriers will continue to make expenditures
to
build and upgrade their networks, increase existing capacity, upgrade
their networks with new technologies and maintain their existing
infrastructure. In response to this trend, we will continue to provide
network deployment services that address wireless carrier
needs.
|
|
·
|
In
connection with the sale of our common stock and warrants to certain
investors during the third quarter ended January 31, 2005, we granted
certain registration rights that provided for liquidated damages
in the
event of failure to timely perform under the agreements. During the
third
quarter of fiscal 2006, we became aware that the SEC had recently
announced its preferred interpretation of the accounting for common
stock
and warrants with registration rights under Emerging Issues Task
Force
(EITF) 00-19, “Accounting for Derivative Financial Instruments Indexed To,
and Potentially Settled in the Company’s Own Stock,” and EITF 05-04, “The
Effect of a Liquidated Damages Clause on a Freestanding Financial
Instrument Subject to EITF 00-19.” Although the EITF was still reviewing
the guidance in EITF 05-04, the SEC concluded that under EITF 00-19,
the
common stock and warrants subject to registration rights where significant
liquidated damages could be required to be paid to the holder of
the
instrument in the event the issuer fails to maintain the effectiveness
of
a registration statement for a preset time period does not meet the
tests
required for shareholders’ equity classification and accordingly, must be
reflected as temporary equity in the balance sheet until the conditions
are eliminated. Additionally, the fair value of warrants should be
recorded as a liability, with an offsetting reduction to shareholders’
equity, adjusted to market value at the end of each period. In analyzing
instruments under EITF 00-19, the SEC concluded that the likelihood
or
probability related to the failure to maintain an effective registration
statement was not a factor at that time. During fiscal 2006, the
warrant
liability increased by $4,078,494, due to the increase in the market
value
of our common stock, resulting in a net non-cash loss on fair value
of
warrants for the fiscal year ended April 30, 2006. The non-cash loss
on
warrants had no effect on our cash flows or liquidity. On April 11,
2006,
we entered into a waiver agreement with the institutional investors
related to this private placement. Under the waiver, the parties
agreed to
modify the registration rights agreement associated with the common
stock
and warrants issued in November 2004 affected by EITF 00-19, thereby
eliminating the penalty provisions that could have resulted from
not
maintaining an effective registration statement related to these
common
shares and shares underlying the warrants, and eliminating any similar
non-cash charges in subsequent fiscal
years.
|
Year
Ended
|
|||||||||||||
April
30,
|
|||||||||||||
2007
|
2006
|
||||||||||||
REVENUE
|
$
|
70,000,070
|
100.0
|
%
|
$
|
52,144,575
|
100.0
|
%
|
|||||
COSTS
AND EXPENSES:
|
|||||||||||||
Cost
of revenue
|
47,781,351
|
68.3
|
%
|
38,010,945
|
72.9
|
%
|
|||||||
Selling,
general and administrative expenses
|
13,244,909
|
18.9
|
%
|
9,191,392
|
17.6
|
%
|
|||||||
Depreciation
and amortization
|
1,239,486
|
1.8
|
%
|
837,789
|
1.6
|
%
|
|||||||
Total
costs and expenses
|
62,265,746
|
89.0
|
%
|
48,040,126
|
92.1
|
%
|
|||||||
OPERATING
INCOME
|
7,734,324
|
11.0
|
%
|
4,104,449
|
7.9
|
%
|
|||||||
OTHER
EXPENSE (INCOME):
|
|||||||||||||
Interest
expense
|
496,330
|
0.7
|
%
|
256,022
|
0.5
|
%
|
|||||||
Interest
income
|
(525,524
|
)
|
(0.8
|
%)
|
(121,720
|
)
|
(0.2
|
%)
|
|||||
Minority
interest
|
23,099
|
0.0
|
%
|
-
|
0.0
|
%
|
|||||||
Loss
on change in fair value of warrants
|
-
|
0.0
|
%
|
4,078,494
|
7.8
|
%
|
|||||||
INCOME
(LOSS) BEFORE INCOME TAX PROVISION
|
7,740,419
|
11.1
|
%
|
(108,347
|
)
|
(0.2
|
%)
|
||||||
Income
tax provision
|
3,146,818
|
4.5
|
%
|
1,515,773
|
2.9
|
%
|
|||||||
NET
INCOME (LOSS)
|
$
|
4,593,601
|
6.6
|
%
|
($1,624,120
|
)
|
(3.1
|
%)
|
|||||
Year
Ended
|
|||||||||||||
April
30,
|
|||||||||||||
2006
|
2005
|
||||||||||||
REVENUE
|
$
|
52,144,575
|
100.0
|
%
|
$
|
40,148,233
|
100.0
|
%
|
|||||
COSTS
AND EXPENSES:
|
|||||||||||||
Cost
of revenue
|
38,010,945
|
72.9
|
%
|
32,445,470
|
80.8
|
%
|
|||||||
Selling,
general and administrative expenses
|
9,191,392
|
17.6
|
%
|
7,032,504
|
17.5
|
%
|
|||||||
Depreciation
and amortization
|
837,789
|
1.6
|
%
|
682,397
|
1.7
|
%
|
|||||||
Total
costs and expenses
|
48,040,126
|
92.1
|
%
|
40,160,371
|
100.0
|
%
|
|||||||
OPERATING
INCOME (LOSS)
|
4,104,449
|
7.9
|
%
|
(12,138
|
)
|
0.0
|
%
|
||||||
OTHER
EXPENSE (INCOME):
|
|||||||||||||
Interest
expense
|
256,022
|
0.5
|
%
|
31,865
|
0.1
|
%
|
|||||||
Interest
income
|
(121,720
|
)
|
(0.2
|
%)
|
(10,817
|
)
|
0.0
|
%
|
|||||
Loss
(gain) on change in fair value of warrants
|
4,078,494
|
7.8
|
%
|
(1,414,263
|
)
|
(3.5
|
%)
|
||||||
INCOME
(LOSS) BEFORE INCOME TAX PROVISION
|
(108,347
|
)
|
(0.2
|
%)
|
1,381,077
|
3.4
|
%
|
||||||
Income
tax provision
|
1,515,773
|
2.9
|
%
|
52,096
|
0.1
|
%
|
|||||||
NET
INCOME (LOSS)
|
($1,624,120
|
)
|
(3.1
|
%)
|
$
|
1,328,981
|
3.3
|
%
|
Less
than
|
1-2
|
3-5
|
More
than
|
|||||||||||||
Total
|
1
Year
|
Years
|
Years
|
5
Years
|
||||||||||||
Borrowings
under line of credit
|
$
|
4,454,217
|
$
|
-
|
$ |
-
|
$
|
4,454,217
|
$ |
-
|
||||||
Loans
payable
|
2,882,888
|
2,598,872
|
227,381
|
47,115
|
9,520
|
|||||||||||
Operating
leases
|
2,242,566
|
759,245
|
837,736
|
544,870
|
100,715
|
|||||||||||
Employment
agreements
|
5,494,583
|
2,612,800
|
2,881,783
|
-
|
-
|
|||||||||||
Total
obligations
|
$
|
15,074,254
|
$
|
5,970,917
|
$
|
3,946,900
|
$
|
5,046,202
|
$
|
110,235
|
||||||
Page
|
||||
Report
of Independent Registered Public Accounting Firm
|
F-2
|
|||
Consolidated
Balance Sheets as of April 30, 2007 and 2006
|
F-3
- F-4
|
|||
Consolidated
Statements of Operations for the years ended April
30, 2007, 2006 and 2005
|
F-5
|
|||
Consolidated
Statements of Shareholders' Equity for the years ended April 30,
2007,
2006 and 2005
|
F-6
- F-8
|
|||
Consolidated
Statements of Cash Flows for the years ended April
30, 2007, 2006 and 2005
|
F-9
- F-11
|
|||
Notes
to Consolidated Financial Statements
|
F-12
- F-31
|
April
30,
|
April
30,
|
||||||
ASSETS
|
2007
|
2006
|
|||||
CURRENT
ASSETS:
|
|||||||
Cash
and cash equivalents
|
$
|
21,558,739
|
$
|
12,279,646
|
|||
Accounts
receivable, net of allowance of $98,786 and $104,786 at April 30,
2007 and
2006, respectively
|
16,560,636
|
12,141,789
|
|||||
Costs
and estimated earnings in excess of billings on uncompleted
contracts
|
2,499,940
|
1,441,977
|
|||||
Inventory
|
2,260,082
|
1,204,540
|
|||||
Prepaid
expenses and other current assets
|
732,043
|
286,625
|
|||||
Deferred
tax assets
|
54,000
|
78,000
|
|||||
Total
current assets
|
43,665,440
|
27,432,577
|
|||||
PROPERTY
AND EQUIPMENT, net
|
5,488,920
|
1,352,216
|
|||||
OTHER
INTANGIBLE ASSETS, net
|
1,683,349
|
864,388
|
|||||
GOODWILL
|
20,469,608
|
14,239,918
|
|||||
DEBT
ISSUANCE COSTS, net
|
10,000
|
111,091
|
|||||
DEFERRED
TAX ASSETS
|
111,000
|
51,000
|
|||||
OTHER
ASSETS
|
263,353
|
71,128
|
|||||
Total
assets
|
$
|
71,691,670
|
$
|
44,122,318
|
|||
April
30,
|
April
30,
|
||||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
2007
|
2006
|
|||||
CURRENT
LIABILITIES:
|
|||||||
Current
portion of loans payable
|
$
|
2,598,872
|
$
|
231,065
|
|||
Accounts
payable and accrued expenses
|
6,802,110
|
4,989,861
|
|||||
Billings
in excess of costs and estimated earnings on uncompleted
contracts
|
2,272,688
|
1,085,312
|
|||||
Deferred
revenue
|
504,458
|
128,052
|
|||||
Due
to shareholders
|
707,000
|
381,377
|
|||||
Income
taxes payable
|
433,361
|
420,066
|
|||||
Deferred
tax liabilities
|
27,000
|
21,000
|
|||||
Total
current liabilities
|
13,345,489
|
7,256,733
|
|||||
Borrowings
under line of credit
|
4,454,217
|
3,000,000
|
|||||
Loans
payable, net of current portion
|
284,016
|
256,692
|
|||||
Due
to shareholders, net of current portion
|
-
|
514,623
|
|||||
Deferred
tax liabilities
|
722,000
|
531,000
|
|||||
Total
liabilities
|
18,805,722
|
11,559,048
|
|||||
Minority
interest in subsidiary
|
1,353,965
|
-
|
|||||
COMMITMENTS
AND CONTINGENCIES
|
|||||||
SHAREHOLDERS'
EQUITY:
|
|||||||
Preferred
stock - $0.0001 par value, 5,000,000 shares authorized, none
issued
|
-
|
-
|
|||||
Common
stock - $0.0001 par value, 75,000,000 shares authorized, 6,971,698
and
5,264,284 shares issued and outstanding at April 30, 2007 and 2006,
respectively
|
696
|
526
|
|||||
Additional
paid-in capital
|
47,901,160
|
33,525,130
|
|||||
Retained
earnings (accumulated deficit)
|
3,631,215
|
(962,386
|
)
|
||||
Accumulated
other comprehensive loss on translation of currency
exchange
|
(1,088
|
)
|
-
|
||||
Total
shareholders' equity
|
51,531,983
|
32,563,270
|
|||||
Total
liabilities and shareholders' equity
|
$
|
71,691,670
|
$
|
44,122,318
|
Year
Ended
|
||||||||||
April
30,
|
||||||||||
2007
|
2006
|
2005
|
||||||||
REVENUE
|
$
|
70,000,070
|
$
|
52,144,575
|
$
|
40,148,233
|
||||
COSTS
AND EXPENSES:
|
||||||||||
Cost
of revenue
|
47,781,351
|
38,010,945
|
32,445,470
|
|||||||
Selling,
general and administrative expenses
|
13,244,909
|
9,191,392
|
7,032,504
|
|||||||
Depreciation
and amortization
|
1,239,486
|
837,789
|
682,397
|
|||||||
Total
costs and expenses
|
62,265,746
|
48,040,126
|
40,160,371
|
|||||||
OPERATING
INCOME (LOSS)
|
7,734,324
|
4,104,449
|
(12,138
|
)
|
||||||
OTHER
EXPENSE (INCOME):
|
||||||||||
Interest
expense
|
496,330
|
256,022
|
31,865
|
|||||||
Interest
income
|
(525,524
|
)
|
(121,720
|
)
|
(10,817
|
)
|
||||
Minority
interest
|
23,099
|
-
|
- | |||||||
Loss
(gain) on change in fair value of warrants
|
-
|
4,078,494
|
(1,414,263
|
)
|
||||||
INCOME
(LOSS) BEFORE INCOME TAX PROVISION
|
7,740,419
|
(108,347
|
)
|
1,381,077
|
||||||
Income
tax provision
|
3,146,818
|
1,515,773
|
52,096
|
|||||||
NET
INCOME (LOSS)
|
$
|
4,593,601
|
($1,624,120
|
)
|
$
|
1,328,981
|
||||
Basic
net income (loss) per common share
|
$
|
0.80
|
($0.40
|
)
|
$
|
0.50
|
||||
Diluted
net income (loss) per common share
|
$
|
0.72
|
($0.40
|
)
|
$
|
0.49
|
||||
Basic
weighted average number of common shares outstanding
|
5,772,423
|
4,057,940
|
2,679,529
|
|||||||
Diluted
weighted average number of common shares outstanding
|
6,409,333
|
4,057,940
|
2,729,866
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained
|
||||
Additional
|
Unearned
|
Earnings
|
Total
|
||||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Paid-In
|
Consulting
|
(Accumulated
|
Shareholders' | ||||||||||||||||||||
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
Services
|
Deficit)
|
Equity
|
|||||||
BALANCE,
MAY 1, 2004
|
-
|
$
|
-
|
1,737,498
|
$
|
174
|
$
|
11,993,387
|
$
|
(38,559
|
)
|
($667,247
|
)
|
$
|
11,287,755
|
||||||||||
Common
stock issuance costs
|
-
|
-
|
-
|
-
|
(26,888
|
)
|
-
|
-
|
(26,888
|
)
|
|||||||||||||||
Amortization
of unearned consulting services
|
-
|
-
|
-
|
-
|
-
|
38,559
|
-
|
38,559
|
|||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
-
|
-
|
1,328,981
|
1,328,981
|
|||||||||||||||||
BALANCE,
APRIL 30, 2005
|
-
|
-
|
1,737,498
|
174
|
11,966,499
|
-
|
661,734
|
12,628,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
Total
|
|
Preferred
Stock
|
Common
Stock
|
Paid-In
|
(Accumulated
|
Shareholders'
|
||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit)
|
Equity
|
||||||||||||||||
Reclassification
of proceeds from sales of common stock
|
||||||||||||||||||||||
with
registration rights to additional paid-in capital
|
-
|
-
|
2,083,887
|
208
|
5,731,908
|
-
|
5,732,116
|
|||||||||||||||
Net
proceeds from exercise of warrants
|
-
|
-
|
554,717
|
55
|
4,167,092
|
-
|
4,167,147
|
|||||||||||||||
Reclassification
of fair value of warrant liability to additional
|
||||||||||||||||||||||
paid-in
capital from exercise of warrants
|
-
|
-
|
-
|
-
|
2,849,302
|
-
|
2,849,302
|
|||||||||||||||
Reclassification
of fair value of warrant liability to additional
|
||||||||||||||||||||||
paid-in
capital from the termination of liquidated
|
||||||||||||||||||||||
damages
provision under registration rights agreement
|
-
|
-
|
-
|
-
|
3,223,760
|
-
|
3,223,760
|
|||||||||||||||
Net
proceeds from issuance of common stock
|
-
|
-
|
876,931
|
88
|
5,528,078
|
-
|
5,528,166
|
|||||||||||||||
Net
proceeds from exercise of stock options
|
-
|
-
|
11,251
|
1
|
58,491
|
-
|
58,492
|
|||||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
-
|
(1,624,120
|
)
|
(1,624,120
|
)
|
|||||||||||||
BALANCE,
APRIL 30, 2006
|
-
|
-
|
5,264,284
|
526
|
33,525,130
|
(962,386
|
)
|
32,563,270
|
Accumulated
|
|||||||||||||||||||||||||
|
Other
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
Compre-
|
Total
|
|||||||||||
Preferred
Stock
|
Common
Stock
|
Paid-In
|
Retained
|
hensive
|
Shareholders' | ||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Earnings
|
|
Loss
|
Equity
|
|||||||||||||||||
Net
issuance of common stock, acquisition of
|
|||||||||||||||||||||||||
Southeastern
Communication Service, Inc.
|
-
|
-
|
200,288
|
20
|
1,349,631
|
- | - |
1,349,651
|
|||||||||||||||||
Net
issuance of common stock, acquisition of
|
|||||||||||||||||||||||||
Voacolo
Eletric Inc
|
113,534
|
11
|
1,249,869
|
- | - |
1,249,880
|
|||||||||||||||||||
Net
issuance of common stock, acquisition of
|
|||||||||||||||||||||||||
TAGS
|
61,277
|
6
|
719,864
|
- | - |
719,870
|
|||||||||||||||||||
Net
issuance of common stock
|
-
|
-
|
1,109,023
|
111
|
9,337,780
|
- | - |
9,337,891
|
|||||||||||||||||
Net
proceeds from exercise of warrants
|
-
|
-
|
30,281
|
3
|
197,873
|
- | - |
197,876
|
|||||||||||||||||
Fair
value of stock options granted to employees
|
-
|
-
|
-
|
-
|
37,526
|
- | - |
37,526
|
|||||||||||||||||
Net
proceeds from exercise of stock options
|
-
|
-
|
193,011
|
19
|
1,225,487
|
- | - |
1,225,506
|
|||||||||||||||||
Excess
tax benefit from exercise of stock options
|
- | - | - | - |
258,000
|
- | - |
258,000
|
|||||||||||||||||
Accumulated
other comprehensive loss
|
- | - | - | - |
-
|
- |
($1,088
|
) |
(1,088
|
) | |||||||||||||||