STOCK BASED COMPENSATION ARRANGEMENTS

6 Months Ended

Apr. 30, 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 and six months ended April 30, 2015 amounted to $168 and $388, respectively. Stock-based compensation expense in the three and six months ended April 30, 2014 amounted to $270 and $643, 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 six months ended April 30, 2015 is presented below:

Outstanding at beginning of period	429,200
Granted	323,427
Forfeited or expired	(84,046)
Outstanding at end of period	668,581

In the six months ended April 30, 2015, the Company granted options to purchase 301,998 shares of common stock to certain directors and employees, which vest upon the achievement of certain performance conditions related to acquisition or financing events or a change of control. The options have an exercise price of $0.68 per share and a term of five years and may be exercised on a cashless basis. The Company accrues compensation cost for these options based upon its assessment of the probable outcome of the performance conditions, including the estimated service period. Certain stock options held by former employees and directors are classified as other liabilities.

A summary of the Company’s restricted stock activity in the six months ended April 30, 2015 is presented below:

Outstanding at beginning of period	126,239
Granted	511,730
Vested	(140,025)
Canceled	(18,139)
Outstanding at end of period	479,805

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.