Stockholder Equity

3 Months Ended

Jan. 31, 2022

Equity [Abstract]

Stockholder Equity

Note 5 – Stockholder Equity

Additional Paid-In Capital

During the three months ended January 31, 2022, approximately $309,700 of stock option expense was recognized and contributed an addition to Additional Paid-In Capital. Also, during the three months ended January 31, 2022, on November 1, 2021, RSUs previously granted to employees vested and shares of Common Stock were issued, which contributed approximately $74,451 to Additional Paid-In Capital, resulting in a total increase in Additional Paid-In Capital during the three months ended January 31, 2022 of approximately $384,151.

Preferred Shares Issued

The authorized preferred stock of the Company consists of 5,000,000 shares with a par value of $0.001 per share, of which 3,000,000 shares were designated as Series A Convertible Preferred Stock (the “Series A Preferred Stock”). Each share of the Series A Preferred Stock was initially convertible into 100 shares of Common Stock; however, as a result of the Reverse Stock Split, the conversion rate was adjusted such that each share of the Series A Preferred Stock is convertible into approximately 8.33 shares of Common Stock. All 3,000,000 shares of Series A Preferred Stock were issued and outstanding as of January 31, 2022.

Common Shares Issued

The Company implemented the Reverse Stock Split, effective prior to the opening of the market on Tuesday, July 20, 2021. The Reverse Stock Split was implemented by the Company in support of its application to list on the Nasdaq Capital Market (“Nasdaq”). As a result of the Reverse Stock Split at the 1-for-12 ratio, every 12 shares of the Common Stock were exchanged for one share of the Common Stock. The Company has retroactively adjusted all share amounts and per share data herein to give effect to the Reverse Stock Split.

The authorized Common Stock of the Company consists of 1,000,000,000 shares with a par value of $0.001. There were 30,236,696 shares of Common Stock issued and outstanding as of January 31, 2022.

 Warrants Shares Issued

As part of the Company’s firm underwritten public offering during fiscal 2021, the Company issued warrants to purchase a total of 4,053,750 shares of Common Stock at an exercise price of $1.90 per share. These warrants expire in the year 2026. During the year ended October 31, 2021, warrants for 879,828 shares were exercised for $1,665,113. No warrants were exercised during the three-month period ended January 31, 2022. The aggregate intrinsic value of the outstanding Common Stock warrants as of January 31, 2022 and October 31, 2021 was $0. The weighted average remaining term of the outstanding Common Stock warrants is 4.68 years as of January 31, 2022.

The following is a summary of the stock warrant plan activity during the fiscal three months ended January 31, 2022 and the year ended October 31, 2021.

	2022				2021
	Number of Warrants		Weighted Average Exercise Price		Number of Warrants			Weighted Average Exercise Price
Warrants Outstanding at Beginning of the Period		3,173,922	$	1.90		—		$	1.90
Granted		—		—		4,053,750			1.90
Exercised		—		—		(879,828	)		1.90
Canceled, forfeited, expired		—		—		—			1.90
Warrants Outstanding and Exercisable at End of Period		3,173,922	$	1.90		3,173,922		$	1.90

Restricted Stock Unit Awards

On November 5, 2021, the Company issued 61,250 shares of Common Stock to 7 employees in accordance with the vesting schedules set forth in RSU agreements previously entered into with such employees, resulting in the recognition of approximately $110,250 of share-based compensation. Of the shares issued to employees, 19,866 shares were withheld by the Company to satisfy tax withholding obligations and/or satisfy cash settlement options to employees, equaling approximately $35,759. As of January 31, 2022, there remained 437,917 unvested RSUs with approximately $900,769 of related unvested compensation.

Stock Options

During fiscal year 2021, the Company granted options exercisable for up to 150,000 shares of Common Stock of which 15,000 fully vested on March 17, 2021, 7,500 fully vested on June 30, 2021, 41,667 fully vested on December 1, 2021, 68,333 vest over the next 2 years on March 17, 2022, and 2023, and 17,500 vest over the next 2 years on June 30, 2022 and 2023. The options have exercise prices ranging from $9.12 to $28.68 per share. These options have a weighted average remaining life of 9.43 years as of October 31, 2021 and of 9.08 years as of January 31, 2022. The options expire in the year 2031. On July 19, 2021, two of the stock option agreements, exercisable for an aggregate of 50,000 shares of Common Stock, were modified to accelerate the full vesting period from 3 years to 2 years. The Company granted no new options during the three months ended January 31, 2022. The aggregate intrinsic value of these outstanding options as of October 31, 2021 and January 31, 2022 was $0.

The fair values of the options on the grant dates was approximately $3,088,002 using a Black-Scholes option pricing model with the following assumptions: stock price range of $9.12 to $27.36 per share (based on the quoted trading price on the date of grant), volatility range of 294.57% to 301.53%, expected term of 10 years, and a risk-free interest rate range of 1.19% to 1.63%. The Company is amortizing the expense over the vesting terms of each option. The total stock option expense for the three months ended January 31, 2022 was approximately $309,700. The fiscal year 2021 total unamortized stock option expense at October 31, 2021 was approximately $1,314,056. The fiscal year 2022 unamortized stock option expense at January 31, 2022 was approximately $1,004,356.