LEASES

3 Months Ended

Jan. 31, 2022

Leases

LEASES

8. LEASES

We lease approximately 2,000 square feet of office space at 3150 Almaden Expressway, San Jose, California (our principal executive offices) from an unrelated party pursuant to an operating lease that was to expire on September 30, 2021. Effective August 17, 2021, the lease was amended to extend the expiration date to September 30, 2024, with an option to extend the lease an additional two years. Our base rent is approximately $5,000 per month and the lease provides for annual increases of approximately 3% and an escalation clause for increases in certain operating costs. The amendment to the lease resulted in a right-of-use asset and lease liability of approximately $260,000 with a discount rate of 10%. Rent expense was approximately $17,000 and $16,000, respectively, for the three months ended January 31, 2022 and 2021.

For operating leases, the lease liability is initially measured at the present value of the unpaid lease payments. The remaining 56-month lease term as of January 31, 2022 for the Company’s lease includes the noncancelable period of the lease and the additional two-year option period that the Company expects to exercise. All right-of-use assets are reviewed for impairment.

Balance sheet information related to the Company’s lease is presented below:

	Balance Sheet Location	January 31, 2022		October 31,2021
		(in thousands)
Operating Lease:
Right-of-use asset	Operating lease right-of-use asset	$	244	$	254
Right-of-use liability, current	Operating lease liability		41		39
Right-of-use liability, non-current	Operating lease liability, non-current		209		220

As of January 31, 2022, the annual minimum lease payments of our operating lease liabilities were as follows:

For years Ended October 31,	Operating Leases
	(in thousands)
2022	$	48
2023		66
2024		67
2025		70
2026		65
Total future minimum lease payments, undiscounted		316
Less: Imputed interest		66
Present value of future minimum lease payments	$	250