Nevada | 22-2436721 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer
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o | Accelerated filer |
o
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Non-accelerated filer
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o | Smaller reporting company |
x
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(Do not check if a smaller reporting company)
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Page
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PART I
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Item 1.
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1
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2
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3 | ||
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4
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5
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Item 2.
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13
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Item 3.
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17
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Item 4.
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17
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PART II
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Item 1.
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18
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Item 1A.
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18
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Item 2.
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18
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Item 3.
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18
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Item 4.
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18
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Item 5.
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18
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Item 6.
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18
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19
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E-1
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July 31,
2013
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October 31,
2012
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|||||||
Assets
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||||||||
Current assets:
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||||||||
Cash
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$ | 36,073 | $ | 64,325 | ||||
Prepaid expenses
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16,254 | 9,543 | ||||||
Total current assets
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$ | 52,327 | $ | 73,868 | ||||
Liabilities and Stockholders’ Deficiency
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||||||||
Current liabilities:
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||||||||
Accounts payable
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$ | 277,126 | $ | 222,845 | ||||
Accounts payable - related party
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57,389 | 82,651 | ||||||
Accrued expenses
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30,321 | 90,043 | ||||||
Accrued compensation
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-- | 225,627 | ||||||
Notes payable
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11,407 | 105,000 | ||||||
Convertible debentures
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300,000 | 25,000 | ||||||
Total current liabilities
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676,243 | 751,166 | ||||||
Convertible debenture
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100,000 | 375,000 | ||||||
Note payable
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105,000 | -- | ||||||
Total liabilities
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881,243 | 1,126,166 | ||||||
Commitments
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||||||||
Stockholders' deficiency:
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||||||||
Preferred stock, $.001 par value; 20,000,000 shares authorized; no shares issued
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-- | -- | ||||||
Common stock, $.001 par value; 500,000,000 and 10,000,000 shares authorized, respectively; 5,429,384 and 3,111,691 shares issued and outstanding, respectively
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5,429 | 3,112 | ||||||
Additional paid-in capital
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22,880,390 | 22,371,230 | ||||||
Accumulated deficit
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(23,714,735 | ) | (23,426,640 | ) | ||||
Total stockholders' deficiency
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(828,916 | ) | (1,052,298 | ) | ||||
Total liabilities and stockholders' deficiency
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$ | 52,327 | $ | 73,868 |
Three Months Ended July 31,
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Nine Months Ended July 31,
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|||||||||||||||
2013
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2012
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2013
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2012
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|||||||||||||
Revenue | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||
Operating expenses:
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||||||||||||||||
Research and development
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3,115 | 5,540 | 3,115 | 14,430 | ||||||||||||
General and administrative
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65,389 | 62,209 | 260,551 | 180,562 | ||||||||||||
Loss from operations
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(68,504 | ) | (67,749 | ) | (263,666 | ) | (194,992 | ) | ||||||||
Interest expense
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(8,296 | ) | (6,217 | ) | (24,429 | ) | (19,349 | ) | ||||||||
Loss on conversion of convertible debentures
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-- | -- | -- | (21,750 | ) | |||||||||||
Net loss
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$ | (76,800 | ) | $ | (73,966 | ) | $ | (288,095 | ) | $ | (236,091 | ) | ||||
Net loss per common share, basic and diluted
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$ | (0.01 | ) | $ | (0.02 | ) | $ | (0.06 | ) | $ | (0.08 | ) | ||||
Weighted average number of common shares outstanding, basic and diluted
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5,429,384 | 3,111,691 | 4,494,496 | 3,098,337 | ||||||||||||
Nine Months Ended
July 31,
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2013
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2012
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Cash flows from operating activities:
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Net loss
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$ | (288,095 | ) | $ | (236,091 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
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||||||||
Stock based compensation expense
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4,725 | 3,716 | ||||||
Loss on conversion of convertible debentures
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-- | 21,750 | ||||||
Changes in operating assets and liabilities:
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||||||||
Grant receivable
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-- | 131,979 | ||||||
Prepaid expenses
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13,509 | 12,633 | ||||||
Accounts payable
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71,281 | 18,881 | ||||||
Accounts payable - related party
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69,738 | 25,566 | ||||||
Accrued expenses
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(10,597 | ) | 3,770 | |||||
Net cash used in operating activities
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(139,439 | ) | (17,796 | ) | ||||
Cash flows from financing activities:
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||||||||
Repayment of notes payable
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(8,813 | ) | (10,455 | ) | ||||
Proceeds from sale of common stock, net of offering costs
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120,000 | - | ||||||
Net cash provided by (used in) financing activities
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111,187 | (10,455 | ) | |||||
Decrease in cash
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(28,252 | ) | (28,251 | ) | ||||
Cash - beginning of period
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64,325 | 46,245 | ||||||
Cash – end of period
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$ | 36,073 | $ | 17,994 | ||||
Supplemental disclosure of cash flow information:
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||||||||
Cash paid for interest
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$ | 526 | $ | 579 | ||||
Cash paid for income taxes
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$ | 500 | $ | -- | ||||
Noncash financing activities:
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Issuance of 588,236 shares of common stock as settlement of accrued compensation and other related costs
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$ | 225,627 | $ | -- | ||||
Issuance of 279,412 shares of common stock as settlement of certain accounts payable – related party
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$ | 95,000 | $ | -- | ||||
Issuance of 50,000 shares of common stock as settlement of certain accounts payable for director fees
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$ | 17,000 | $ | -- | ||||
Issuance of 193,454 shares of common stock as payment of interest due on convertible debentures
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$ | 40,000 | $ | -- | ||||
Issuance of 36,477 shares of common stock as payment of offering costs related to private placements
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$ | 12,534 | $ | -- | ||||
Issuance of 55,237 shares of common stock as payment of $50,000 of principal and $3,729 of interest due on convertible debentures
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$ | - | $ | 53,729 | ||||
Issuance of notes payable as payment for insurance premiums
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$ | 20,220 | $ | 15,867 |
1.
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Basis of Presentation
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2.
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Amendment to Restated Articles of Incorporation
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3.
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Amended and Restated SCMS License Agreement
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4.
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Related Party Transactions
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5.
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Notes Payable
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6.
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Convertible Debentures
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7.
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Stock-Based Compensation
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8.
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Net Loss Per Common Share
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9.
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Stockholders’ Equity
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Stock
Option
Shares
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Weighted Average
Exercise Price Per Common Share
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Aggregate
Intrinsic
Value
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||||||||||
Outstanding at October 31, 2012
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249,532 | $ | 1.57 | $ | 700 | |||||||
Granted during the period
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-- | -- | ||||||||||
Exercised during the period
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-- | -- | ||||||||||
Expired during the period
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(8,100 | ) | $ | 1.40 | ||||||||
Outstanding at July 31, 2013
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241,432 | $ | 1.57 | $ | -- | |||||||
Exercisable at July 31, 2013
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241,432 | $ | 1.57 | $ | -- | |||||||
Exercisable at October 31, 2012
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249,532 | $ | 1.57 | $ | 700 |
Stock Options Outstanding
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Stock Options Exercisable
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|||||||||||||||||||||||||
Exercise
Price
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Number of
Shares
Available
Under
Outstanding
Stock
Options
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Weighted
Average
Exercise
Price Per
Common
Share
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Weighted
Average
Remaining
Contractual
Life (Years)
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Number of Shares
Available for
Purchase
Under
Outstanding
Stock
Options
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Weighted
Average
Exercise
Price Per
Common
Share
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Weighted
Average
Remaining
Contractual
Life (Years)
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||||||||||||||||||||
$ | 0.20 | 3,500 | $ | 0.20 | 1.4 | 3,500 | $ | 0.20 | 1.4 | |||||||||||||||||
$ | 0.80 | 33,500 | $ | 0.80 | 1.1 | 33,500 | $ | 0.80 | 1.1 | |||||||||||||||||
$ | 1.40 | 94,432 | $ | 1.40 | 4.6 | 94,432 | $ | 1.40 | 4.6 | |||||||||||||||||
$ | 2.00 | 110,000 | $ | 2.00 | 3.5 | 110,000 | $ | 2.00 | 3.5 | |||||||||||||||||
241,432 | $ | 1.57 | 3.5 | 241,432 | $ | 1.57 | 3.5 |
Warrant Shares
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Weighted Average
Exercise Price Per Common Share
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Aggregate Intrinsic Value
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||||||||||
Outstanding at October 31, 2012
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93,000 | $ | 1.19 | $ | -- | |||||||
Issued during the period
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-- | -- | ||||||||||
Exercised during the period
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-- | -- | ||||||||||
Expired during the period
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(61,000 | ) | $ | 1.29 | ||||||||
Outstanding at July 31, 2013
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32,000 | $ | 1.00 | $ | -- | |||||||
Exercisable at July 31, 2013
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32,000 | $ | 1.00 | $ | -- | |||||||
Exercisable at October 31, 2012
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93,000 | $ | 1.19 | $ | -- |
Warrants Outstanding
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Warrants Exercisable
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Range of
Exercise Prices
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Number of
Shares
Available
Under
Outstanding
Warrants
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Weighted
Average
Exercise
Price Per
Common
Share
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Weighted
Average
Remaining
Contractual
Life (Years)
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Number of Shares
Available
for
Purchase
Under
Outstanding
Warrants
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Weighted
Average
Exercise
Price Per
Common
Share
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Weighted
Average
Remaining
Contractual
Life (Years)
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||||||||||||||||||||
$ | 0.40 | 20,000 | $ | 0.40 | 0.8 | 20,000 | $ | 0.40 | 0.8 | |||||||||||||||||
$ | 2.00 | 12,000 | $ | 2.00 | 0.3 | 12,000 | $ | 2.00 | 0.3 | |||||||||||||||||
32,000 | $ | 1.00 | 0.6 | 32,000 | $ | 1.00 | 0.6 |
DATE: | SCIVANTA MEDICAL CORPORATION | |
September 16, 2013 | By: | /s/ David R. LaVance |
David R. LaVance
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President and Chief Executive Officer
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September 16, 2013 | By: | /s/ Thomas S. Gifford |
Thomas S. Gifford
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Executive Vice President, Chief Financial Officer and Secretary
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Exhibit
Number
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Description of Exhibit
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3.1
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Amended and Restated Articles of Incorporation of Scivanta Medical Corporation, (the “Company”), which was filed in the Office of the Secretary of State of the State of Nevada on April 22, 2013 (incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on April 22, 2013).
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3.2
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Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s quarterly report on Form 10-QSB for the quarter ended January 31, 2006, filed with the SEC on January 29, 2007).
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4.1
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Specimen stock certificate representing the Company’s common stock (incorporated by reference to Exhibit 4.1 to the Company’s quarterly report on Form 10-QSB for the quarter ended January 31, 2006, filed with the SEC on January 29, 2007).
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4.2
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Form of Convertible Debenture, dated as of February 1, 2007, issued to the following persons and in the following amounts: Jesse H. Austin, III ($50,000); Andrew O. Whiteman and Gwen C. Whiteman, JTWROS ($25,000); Jack W. Cumming ($25,000); Scott C. Withrow ($25,000); Terrence McQuade ($25,000); Steven J. Olsen ($25,000); and Marc G. Robinson and Joshua Goldfarb ($25,000) (incorporated by reference to Exhibit 4.8 to the Company’s quarterly report on Form 10-QSB for the quarter ended January 31, 2007, filed with the SEC on March 14, 2007).
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4.3
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Form of Addendum to Convertible Debenture, dated as of January 31, 2010, issued to the persons set forth in Exhibit 4.2 (incorporated by reference to Exhibit 4.3 to the Company’s annual report on Form 10-K for the fiscal year ended October 31, 2009, filed with the SEC on January 29, 2010).
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4.4
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Form of Addendum to Convertible Debenture, dated as of January 31, 2012, issued to certain persons set forth in Exhibit 4.2 (incorporated by reference to Exhibit 4.4 to the Company’s quarterly report on Form 10-Q for the quarter ended January 31, 2012, filed with the SEC on March 16, 2012).
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4.5
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8% Convertible Debenture, dated as of May 20, 2011, in the principal amount of $100,000 issued to Zanett Opportunity Fund, Ltd. (incorporated by reference to Exhibit 4.4 to the Company’s quarterly report on Form 10-Q for the quarter ended April 30, 2011, filed with the SEC on June 14, 2011).
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4.6
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8% Convertible Debenture, dated as of August 15, 2012, in the principal amount of $100,000 issued to Zanett Opportunity Fund, Ltd. (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed with the SEC on August 21, 2012).
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Exhibit
Number
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Description of Exhibit
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10.1
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The Company’s 2002 Equity Incentive Plan, adopted and effective January 1, 2002 (incorporated by reference to Exhibit B of the Company’s definitive proxy statement, filed with the SEC on June 10, 2002).
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10.2
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Sublease Agreement, dated February 1, 2007, between the Company and Century Capital Associates LLC (incorporated by reference to Exhibit 10.14 to the Company’s quarterly report on Form 10-QSB for the quarter ended January 31, 2007, filed with the SEC on March 14, 2007).
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10.3
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Amended and Restated Technology License Agreement between the Company and The Research Foundation of State University of New York for and on behalf of University of Buffalo, and Donald D. Hickey, M.D. and Clas E. Lundgren dated February 14, 2011 (incorporated by reference to Exhibit 10.8 to the Company’s annual report on Form 10-K for the fiscal year ended October 31, 2010, filed with the SEC on February 15, 2011).
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10.3.1
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First Addendum to the Amended and Restated Technology License Agreement between the Company and The Research Foundation for State University of New York for and on behalf of University of Buffalo, and Donald D. Hickey, M.D. and Clas E. Lundgren dated March 14, 2013 (incorporated by reference to Exhibit 10.3.1 to the Company’s quarterly report on Form 10-Q for the quarter ended January 31, 2013, filed with the SEC on March 18, 2013).
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10.4
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Stock Option Agreement and Notice of Grant, dated February 5, 2007, pursuant to which David R. LaVance was granted a non-qualified stock option to purchase up to 500,000 shares of common stock of the Company (incorporated by reference to Exhibit 10.16 to the Company’s quarterly report on Form 10-QSB for the quarter ended January 31, 2007, filed with the SEC on March 14, 2007).
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10.5
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Stock Option Agreement and Notice of Grant, dated February 5, 2007, pursuant to which Thomas S. Gifford was granted a non-qualified stock option to purchase up to 500,000 shares of common stock of the Company (incorporated by reference to Exhibit 10.17 to the Company’s quarterly report on Form 10-QSB for the quarter ended January 31, 2007, filed with the SEC on March 14, 2007).
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10.6
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Company’s 2007 Equity Incentive Plan, adopted and effective May 31, 2007 (incorporated by reference to Appendix to the Company’s definitive proxy statement, filed with the SEC on April 27, 2007).
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10.7
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Stock Option Agreement and Notice of Grant, dated January 1, 2008, pursuant to which David R. LaVance was granted a non-qualified stock option to purchase up to 100,000 shares of common stock of the Company (incorporated by reference to Exhibit 10.21 to the Company’s current report on Form 8-K filed with the SEC on January 2, 2008).
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10.8
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Stock Option Agreement and Notice of Grant, dated January 1, 2008, pursuant to which Thomas S. Gifford was granted a non-qualified stock option to purchase up to 100,000 shares of common stock of the Company (incorporated by reference to Exhibit 10.22 to the Company’s current report on Form 8-K filed with the SEC on January 2, 2008).
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Exhibit
Number
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Description of Exhibit
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10.9
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Executive Employment Agreement, dated as of January 1, 2008, between the Company and David R. LaVance (incorporated by reference to Exhibit 10.26 to the Company’s current report on Form 8-K filed with the SEC on January 2, 2008).
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10.10
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Executive Employment Agreement, dated as of January 1, 2008, between the Company and Thomas S. Gifford (incorporated by reference to Exhibit 10.27 to the Company’s current report on Form 8-K filed with the SEC on January 2, 2008).
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10.11
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Amendment No. 1 dated as of June 18, 2010 to the Executive Employment Agreement, dated as of January 1, 2008, between the Company and David R. LaVance (incorporated by reference to Exhibit 10.27 to the Company’s quarterly report on Form 10-Q for the quarter ended April 30, 2010, filed with the SEC on June 21, 2010).
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10.12
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Amendment No. 1 dated as of June 18, 2010 to the Executive Employment Agreement, dated as of January 1, 2008, between the Company and Thomas S. Gifford (incorporated by reference to Exhibit 10.28 to the Company’s quarterly report on Form 10-Q for the quarter ended April 30, 2010, filed with the SEC on June 21, 2010).
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10.13
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Amendment No. 2 dated as of January 3, 2012 to the Executive Employment Agreement, dated as of January 1, 2008, between the Company and David R. LaVance (incorporated by reference to Exhibit 10.23 to the Company’s annual report on Form 10-KSB for the fiscal year ended October 31, 2011, filed with the SEC on January 30, 2012).
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10.14
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Amendment No. 2 dated as of January 3, 2012 to the Executive Employment Agreement, dated as of January 1, 2008, between the Company and Thomas S. Gifford (incorporated by reference to Exhibit 10.24 to the Company’s annual report on Form 10-KSB for the fiscal year ended October 31, 2011, filed with the SEC on January 30, 2012).
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10.15
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Stock Option Agreement and Notice of Grant, dated January 21, 2009, pursuant to which David R. LaVance was granted a non-qualified stock option to purchase up to 25,000 shares of common stock of the Company (incorporated by reference to Exhibit 10.32 to the Company’s annual report on Form 10-KSB for the fiscal year ended October 31, 2008, filed with the SEC on January 29, 2009).
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10.16
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Stock Option Agreement and Notice of Grant, dated January 21, 2009, pursuant to which Thomas S. Gifford was granted a non-qualified stock option to purchase up to 25,000 shares of common stock of the Company (incorporated by reference to Exhibit 10.33 to the Company’s annual report on Form 10-KSB for the fiscal year ended October 31, 2008, filed with the SEC on January 29, 2009).
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10.17
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Stock Option Agreement and Notice of Grant, dated January 21, 2009, pursuant to which Lawrence M. Levy was granted a non-qualified stock option to purchase up to 3,500 shares of common stock of the Company (incorporated by reference to Exhibit 10.35 to the Company’s annual report on Form 10-KSB for the fiscal year ended October 31, 2008, filed with the SEC on January 29, 2009).
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Exhibit
Number
|
Description of Exhibit
|
|
10.18
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Stock Option Agreement and Notice of Grant, dated January 21, 2009, pursuant to which Anthony Giordano, III was granted a non-qualified stock option to purchase up to 3,900 shares of common stock of the Company (incorporated by reference to Exhibit 10.36 to the Company’s annual report on Form 10-KSB for the fiscal year ended October 31, 2008, filed with the SEC on January 29, 2009).
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31.1
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Section 302 Certification of Chief Executive Officer.
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31.2
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Section 302 Certification of Chief Financial Officer.
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32.1
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Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
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32.2
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Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
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|
101*
|
The following materials from the Company’s quarterly report on Form 10-Q for the period ended July 31, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) balance sheets; (ii) statements of operations; (iii) statements of cash flows; and (iv) notes to the financial statements.
|
Date: September 16, 2013 | By: | /s/ David R. LaVance |
David R. LaVance
|
||
President and Chief Executive Officer
|
Date: September 16, 2013 | By: | /s/ Thomas S. Gifford |
Thomas S. Gifford
|
||
Executive Vice President, Chief Financial Officer and Secretary
|
Date: September 16, 2013 | By: | /s/ David R. LaVance |
David R. LaVance
|
||
President and Chief Executive Officer
|
Date: September 16, 2013 | By: | /s/ Thomas S. Gifford |
Thomas S. Gifford
|
||
Executive Vice President, Chief Financial Officer and Secretary
|
Basis of Presentation (Details) (USD $)
|
0 Months Ended | ||
---|---|---|---|
Jan. 23, 2013
|
Jul. 31, 2013
|
Oct. 31, 2012
|
|
Basis of Presentation (Textual) | |||
Working Capital Deficiency | $ 623,916 | ||
Accumulated deficit | (23,714,735) | (23,426,640) | |
Value of common stock issued as full payment of accrued compensation due to its officers | 225,627 | ||
Issuance of common stock in payment of fee to its current independent directors and a former independent director | 17,000 | ||
Issuance of common stock in payment of office rent | 95,000 | ||
Accrued rent | $ 80,000 |
Statements of Operations (Unaudited) (USD $)
|
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2013
|
Jul. 31, 2012
|
|
Statements Of Operations [Abstract] | ||||
Revenue | ||||
Operating expenses: | ||||
Research and development | 3,115 | 5,540 | 3,115 | 14,430 |
General and administrative | 65,389 | 62,209 | 260,551 | 180,562 |
Loss from operations | (68,504) | (67,749) | (263,666) | (194,992) |
Interest expense | (8,296) | (6,217) | (24,429) | (19,349) |
Loss on conversion of convertible debentures | (21,750) | |||
Net loss | $ (76,800) | $ (73,966) | $ (288,095) | $ (236,091) |
Net loss per common share, basic and diluted | $ (0.01) | $ (0.02) | $ (0.06) | $ (0.08) |
Weighted average number of common shares outstanding, basic and diluted | 5,429,384 | 3,111,691 | 4,494,496 | 3,098,337 |
Related Party Transactions
|
9 Months Ended | ||
---|---|---|---|
Jul. 31, 2013
|
|||
Related Party Transactions [Abstract] | |||
Related Party Transactions |
David R. LaVance, the Company’s President and Chief Executive Officer, and Thomas S. Gifford, the Company’s Executive Vice President, Chief Financial Officer and Secretary, are principals of Century Capital Associates LLC (“Century Capital”). Effective February 1, 2007, the Company and Century Capital entered into a sublease agreement pursuant to which the Company rents office space approximating 2,000 square feet inside Century Capital’s existing offices. In addition, the Company rents office furniture and other equipment from Century Capital. The sublease agreement has a month to month term that requires sixty days written notice to terminate and a monthly rental fee of $5,000. The Company is responsible for all operating costs associated with the office space, including utilities, maintenance and property taxes.
During the three and nine months ended July 31, 2013, the Company was billed $24,905 and $59,662, respectively, pursuant to the terms of the sublease agreement. As of July 31, 2013, the Company owed Century Capital $30,000 for rent and $27,389 for other expenses, which is included in accounts payable – related party. During the three and nine months ended July 31, 2012, the Company was billed $17,730 and $54,297, respectively, pursuant to the terms of the sublease agreement. |
Net Loss Per Common Share (Details)
|
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2013
|
Jul. 31, 2012
|
|
Stock Options [Member]
|
||||
Net Loss Per Common Share (Textual) | ||||
Anti-dilutive shares which were not included in computation of diluted per share | 241,432 | 249,532 | 241,432 | 249,532 |
Warrant [Member]
|
||||
Net Loss Per Common Share (Textual) | ||||
Anti-dilutive shares which were not included in computation of diluted per share | 32,000 | 93,000 | 32,000 | 93,000 |
Convertible Debt Securities [Member]
|
||||
Net Loss Per Common Share (Textual) | ||||
Anti-dilutive shares which were not included in computation of diluted per share | 666,667 | 416,667 | 666,667 | 416,667 |
Amendment to Restated Articles of Incorporation (Details) (USD $)
|
1 Months Ended | ||
---|---|---|---|
Apr. 22, 2013
|
Jul. 31, 2013
|
Oct. 31, 2012
|
|
Amendment to Restated Articles of Incorporation (Textual) | |||
Reverse stock split ratio | 10-for-1 | ||
Authorized capital stock | 520,000,000 | ||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 10,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Statements of Cash Flows (Unaudited) (Parenthetical) (USD $)
|
9 Months Ended |
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Jul. 31, 2013
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Statements Of Cash Flows [Abstract] | |
Common stock shares issued as payment of accrued compensation and other related costs | 588,236 |
Common stock shares issued as payment of certain accounts payable related party | 279,412 |
Common stock shares issued as payment of certain accounts payable for director fees | 50,000 |
Common stock shares issued as payment for interest due on convertible debentures | 193,454 |
Common stock shares issued as payment of offering costs related to private placements | 36,477 |
Shares issued as payment of principal and interest on convertible debentures | 55,237 |
Principal value of convertible debentures | $ 50,000 |
Interest on convertible debentures | $ 3,729 |
Amendment to Restated Articles of Incorporation
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9 Months Ended | ||
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Jul. 31, 2013
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Amendment To Restated Articles Of Incorporation [Abstract] | |||
Amendment to Restated Articles of Incorporation |
Effective April 22, 2013, the Company amended its Restated Articles of Incorporation to, among other items, effectuate a 10-for-1 reverse stock split (the “Reverse Stock Split”) with respect to its outstanding shares of common stock and increase the amount of authorized capital stock to 520,000,000 shares, notwithstanding the effect of the Reverse Stock Split, consisting of 500,000,000 shares of common stock, par value $.001 per share, and 20,000,000 shares of preferred stock, par value $.001 per share. All references in the accompanying financial statements to the number of shares outstanding and per-share amounts have been restated to reflect the Reverse Stock Split. In connection with the amendments to the Restated Articles of Incorporation, the par value of the Company’s common stock remained $.001 per share, resulting in a reclassification between common stock and additional paid-in capital in order to account for the Reverse Stock Split. |
Note Payable
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9 Months Ended | ||
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Jul. 31, 2013
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Notes Payable and Convertible Debentures [Abstract] | |||
Notes Payable |
Note Payable – IPFS
On March 20, 2013, the Company entered into a finance agreement with IPFS Corporation (“IPFS”). Pursuant to the terms of this finance agreement, IPFS loaned the Company the principal amount of $20,220, which amount would accrue interest at a rate of 9.3% per annum, in order to partially fund the payment of the premium of the Company’s director and officer liability insurance. The finance agreement requires the Company to make nine monthly payments of $2,335, including interest, commencing April 13, 2013. For the three and nine months ended July 31, 2013, the Company recorded a total of $229 and $526, respectively, of interest expense related to this finance agreement. As of July 31, 2013, the outstanding principal balance related to this finance agreement was $11,407. |
Amended and Restated SCMS License Agreement
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9 Months Ended | ||
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Jul. 31, 2013
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Amended and Restated Scms License Agreement Disclosure [Abstract] | |||
Amended and Restated SCMS License Agreement |
On February 14, 2011, the Company entered into an Amended and Restated Technology License Agreement (the “License Agreement”) with The Research Foundation of State University of New York, for and on behalf of the University at Buffalo (the “Foundation”), Donald D. Hickey, M.D. (“Hickey”) and Clas E. Lundgren (“Lundgren”). The Foundation, Hickey and Lundgren shall be collectively referred to herein as the “Licensor”. The License Agreement was amended on March 14, 2013 (the “Amendment”).
Pursuant to the License Agreement, the Licensor has granted Scivanta the exclusive world-wide rights to develop, manufacture and distribute the Scivanta Cardiac Monitoring System (the “SCMS”), a minimally invasive two-balloon esophageal catheter system used to monitor cardiac performance. The term of the License Agreement ends on the later of (a) the expiration date of the last to expire patent right related to the SCMS, which is currently May 1, 2027, or (b) 17 years from the sale of the first licensed product on a country by country basis.
Under the License Agreement, Scivanta made a cash payment of $30,000 to Hickey on June 3, 2011 and was required to make a cash payment of $105,000 to Hickey on July 31, 2012. Pursuant to the Amendment, the $105,000 payment was restructured as follows: (a) $50,000 is due to Hickey on or before a date that is thirty (30) days after the closing of any single financing by the Company of at least $3,000,000 or any series of financings by the Company within a six (6) month period totaling at least $3,000,000; and (b) $55,000 is due to Hickey on or before the date that is thirty (30) days after the first commercial sale of a product utilizing the licensed technology. As of July 31, 2013 and October 31, 2012, the Company recorded the $105,000 due to Hickey as a non-current note payable.
In addition, pursuant to the Amendment, the Company agreed to issue shares of its common stock to the Licensor with a value equal to $130,000 on the date the Company files for approval to market and sell a product utilizing the licensed technology. The Company also agreed to issue shares of its common stock to the Licensor with a value equal to $160,000 on the date the Company receives approval to market and sell a product utilizing the licensed technology. The number of shares of the Company’s common stock to be issued to the Licensor will be calculated based on the market price of the Company’s common stock, as defined in the Amendment, on the date that each of the respective above noted events occur.
Scivanta is required to pay the Licensor a royalty of 5% of annual net sales, as defined in the License Agreement, subject to certain reductions as detailed in the License Agreement. Beginning with the first full year of sales of the SCMS in the United States and for two years thereafter, Scivanta is required to pay an annual minimum royalty of $100,000 to the Licensor against which any royalty on net sales paid in the same calendar year for sales in the United States will be credited. Further, beginning with the first full year of sales of the SCMS outside the United States and for two years thereafter, Scivanta is required to pay an annual minimum royalty of $100,000 to the Licensor against which any royalty on net sales paid in the same calendar year for sales outside the United States will be credited. The Company is also required to pay the Licensor 25% of all sublicensing revenue, as defined in the License Agreement, received by the Company in connection with the Company’s sublicense of the rights granted to the Company under the License Agreement.
The License Agreement, as amended by the Amendment, also requires Scivanta to use commercially reasonable efforts to develop and market the SCMS within certain timeframes, subject to specified exceptions. If Scivanta materially fails to perform any covenant, condition or undertaking of the License Agreement, including the failure to make any payments when due, the Licensor may give written notice of such default to Scivanta. If Scivanta should fail to cure such default within ninety (90) days of notice of such default, then the Licensor, at its option, may terminate the License Agreement. Further, the License Agreement contains standard provisions regarding indemnification and patent prosecution. |