STOCK BASED COMPENSATION ARRANGEMENTS

3 Months Ended

Jan. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure Of Compensation Related Costs, Share-Based Payments [Text Block]

12. STOCK BASED COMPENSATION ARRANGEMENTS

Stock-based compensation expense in the three months ended January 31, 2015 and 2014 amounted to $220 and $373, respectively. Stock-based compensation expense is recorded in general and administrative expenses in the accompanying consolidated statements of operations.

A summary of the Company’s stock option activity in the three months ended January 31, 2015 is presented below:

Outstanding at beginning of period	429,200
Forfeited	(49,444)
Expired	(4,081)
Outstanding at end of period	375,675

In addition, in the three months ended January 31, 2015, the Company approved the issuance of stock options totaling 366,468 to certain directors and employees, subject to the approval by the Company’s shareholders of an equity compensation plan. The shareholder approval is not considered perfunctory and therefore, the options are not considered granted as of January 31, 2015 and, accordingly, the Company has recognized no related compensation cost. The options have an exercise price of $0.68 per share and a term of five years.

A summary of the Company’s restricted stock activity in the three months ended January 31, 2015 is presented below:

Outstanding at beginning of period	126,239
Granted	481,730
Vested	(52,892)
Canceled	(9,716)
Outstanding at end of period	545,361

Restricted shares granted during the period include 300,000 shares issued to a consultant and 88,002 shares issued to employees and directors that vest only upon the completion certain performance conditions. The shares issued to employees are accounted for in accordance with ASC 718 Compensation-Stock Compensation and measured on the date of grant and recorded as an expense over the expected period of performance. The shares issued to non-employees are accounted for in accordance with ASC 505-50 Equity Based Payments to Non-Employees and will be measured and recorded as an operating expense in the period in which the performance condition occurs. The company considers vesting of the shares to be probable within a two year period. The cost of the 300,000 consultant shares is recognizable in future periods upon the completion of a transaction at their then-current fair value.