STOCK BASED COMPENSATION ARRANGEMENTS

3 Months Ended

Jan. 31, 2017

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

STOCK BASED COMPENSATION ARRANGEMENTS

Stock-based compensation expense during the three months ended January 31, 2017 and 2016 amounted to approximately $4.4 million and $547,000 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, 2017 is presented below:

	Number of shares		Weighted-Average Exercise Price
Outstanding - October 31, 2016		382,020	$	5.73
Granted		2,540,000	$	3.15
Outstanding - January 31, 2017		2,922,020	$	3.49
Options exercisable - January 31, 2017		562,020	$	4.90
Weighted-average fair value of options granted during the period			$	2.11

 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions for the three months ended January 31, 2017:

Risk free annual interest rate		1.78-2.28	%
Expected volatility		71.65-82.86	%
Expected life		5.04-6.00
Assumed dividends	None

The value of stock option grants is amortized over the vesting period of, generally, one to three years. As of January 31, 2017, there was approximately $4.0 million of unrecognized compensation cost related to non-vested stock option awards, which is expected to be recognized over a remaining weighted-average vesting period of 2.0 years.

A summary of the Company’s restricted stock activity in the three months ended January 31, 2017 is presented below:

	Number of shares			Weighted-Average Grant-Date Fair Value
Unvested - October 31, 2016		274,829		$	6.00
Granted		733,000		$	3.16
Vested		(367,645	)	$	4.43
Unvested - January 31, 2017		640,184		$	3.65

 During the three months ended January 31, 2017, the Company granted 733,000 restricted shares to employees and non-employees. 283,000 were issued to non-employees during the quarter, with the remaining 450,000 expected to be issue at a future date.

The weighted-average fair value of restricted shares granted during the three months ended January 31, 2017 was $3.16. The total fair value of restricted stock granted during the three months ended January 31, 2017 was approximately $2.3 million.

The value of restricted stock grants are measured based on their fair value on the date of grant and amortized over the vesting period of, generally, six months to three years. As of January 31, 2017, there was approximately $539,000 of unrecognized compensation cost related to unvested restricted stock awards, which is expected to be recognized over a remaining weighted-average vesting period of 0.3 years..