STOCKHOLDERS' EQUITY

12 Months Ended

Oct. 31, 2012

Equity [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

11.  STOCKHOLDERS’ EQUITY

Common stock warrants

The following table sets forth the number shares of common stock purchasable under outstanding stock purchase warrants at October 31, 2012 and 2011:

Issued in connection with	Issue date	Expiration date	Exercise Price		October 31, 2012		October 31, 2011
Equity financing	September 5, 2007	March 5, 2013	$	2.04		1,110,001		1,110,001
Consulting services	June 14, 2006	May 31, 2013	$	1.55		16,500		16,500
Consulting services	March 29, 2010	March 28, 2015	$	1.06		50,000		70,000
						1,176,501		1,196,501

On September 5, 2007, the Company completed a private placement of 3,966,668 units, each consisting of one share of common stock and a warrant to purchase 0.4 shares of common stock, in which the Company raised $6.0 million in gross proceeds. The warrants issued in the transaction have an exercise price of $2.04 per share and a term of five years, beginning six months from the issue date. Additionally, the warrants contain a cashless exercise feature if a registration statement is not effective on the date of exercise, and a provision for exercise price adjustments under certain circumstances as defined in the warrant agreement. Therefore, they are classified as liabilities in accordance with ASC Topic 480, Distinguishing Liabilities from Equity. The Company initially allocated $2.1 million of the proceeds received in the transaction to the warrants based on the fair values of the warrants on the date of the transaction. The Company measures the fair value of the warrants at each balance sheet date, and records the change in fair value as a non-cash charge or gain to earnings each period. The warrants were valued at $17 and $1,949 at October 31, 2012 and 2011, respectively, primarily due to fluctuations in the Company’s stock price. This resulted in a non-cash gain of $1,932, a non-cash loss of $2,847 and a non-cash gain of $482 due to the change in fair value of warrants during the years ended October 31, 2012, 2011 and 2010, respectively. The Company used the Black-Scholes method to value the warrants (see Note 3).

Additionally, in connection with the September 5, 2007 equity financing, the Company issued unit purchase options, to purchase at $1.50 per share, units consisting of (1) 277,667 shares of common stock, and (2) warrants to purchase up to 111,067 shares of common stock at $2.04, with terms identical to the warrants issued in the financing. The units and underlying warrants were exercised in the year ended October 31, 2011.

A summary of the status of the Company’s outstanding warrants and units as of October 31 and changes during the years then ended is presented below:

	2012			2011			2010
Outstanding at beginning of year		1,196,501			2,226,469			2,201,469
Issued		-			100,000			100,000
Exercised		(20,000	)		(1,029,968	)		—
Cancelled		-			(100,000	)		(75,000	)
Outstanding at end of year		1,176,501			1,196,501			2,226,469