10-Q/A

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q/A

(Amendment No. 1)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period	Commission file number 0-16416
ended July 31, 2011

MICRO IMAGING TECHNOLOGY, INC.

 (Exact name of registrant as specified in its charter)

California	33-0056212
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)

970 Calle Amanecer, Suite F, San Clemente, California  92673

(Address of principal executive offices)          (Zip Code)

Registrant’s telephone number, including area code:  (949) 388-4547

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.01 per share

(Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ý    No  o.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes  o    No  ý.

At August 15, 2011, there were 402,028,521 shares of the Registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:  NONE

Explanatory Note

Micro Imaging Technology, Inc. (the “Company”) is filing this Amendment No. 1 (this “Form 10-Q/A”) to our Quarterly Report on Form 10-Q for the nine months ended July 31, 2011 submit Exhibit 101 in accordance with Rule 405 of Regulation S-T. Exhibit 101 consists of the Interactive Data Files relating to this Amendment No. 1 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended July 31, 2011.  This Form 10-Q/A does not otherwise update or amend any other exhibits as originally filed and does not otherwise reflect events occurring after the original filing date of the Quarterly Report.  Accordingly, this Form 10-Q/A should be read in conjunction with our filings with the SEC subsequent to the original filing of our Quarterly Report on September 19, 2011.

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Item 6.             Exhibits and Reports on Form 8-K

(a)Exhibits:

31.1	Certification of Chief Executive Officer *
31.2	Certification of Chief Financial Officer *
32.1	906 Certification of Chief Executive Officer *
32.2	906 Certification of Chief Financial Officer *
101**	Interactive Date Files of Financial Statements and Notes formatted in Extensible Business Reporting Language (XBRL).

*       Filed as referenced Exhibit to Form 10-Q as filed with the SEC on September 19, 2011.

**       XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Exchange Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

(b)Reports on Form 8-K.

On January 26, 2011, the Company filed Form 8-K to report that on January 26, 2011 it entered into a Securities Purchase Agreement with Asher Enterprises, Inc.  Pursuant to the Agreement, the Company agreed to sell and issue to Asher an 8% convertible promissory note in the aggregate principal amount of $32,500.  The note is convertible into shares of the Company’s common stock at a price calculable pursuant to Section 1.2 of the Convertible Promissory Note.

On March 18, 2011, the Company filed Form 8-K to report a change in the Company’s certifying accountant.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated:  November 1, 2011	MICRO IMAGING TECHNOLOGY, INC.
	By	/s/ Victor A. Hollander
		Victor A. Hollander
		(Chief Financial Officer with
		responsibility to sign on behalf of Registrant as a
		duly authorized officer and principal financial officer)

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Condensed Consolidated Balance Sheet [Parenthetical] (USD $)	Jul. 31, 2011	Oct. 31, 2010
Unamortized discount on convertible notes payable, current (in dollars)	$ 72,055	$ 44,902
Unamortized discount on convertible notes payable, noncurrent (in dollars)	$ 0	$ 55,138
preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
preferred stock, shares authorized	2,600,000	2,600,000
preferred stock, shares issued	2,600,000	2,600,000
preferred stock, shares outstanding	2,600,000	2,600,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	352,538,521	177,941,922
Common stock, shares outstanding	352,538,521	177,941,922

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Condensed Consolidated Statements of Operations (USD $)	3 Months Ended		9 Months Ended		69 Months Ended
	Jul. 31, 2011	Jul. 31, 2010	Jul. 31, 2011	Jul. 31, 2010	Jul. 31, 2011
Sales	$ 0	$ 0	$ 0	$ 0	$ 58,000
Cost of Sales	0	0	0	0	29,886
Gross profit	0	0	0	0	28,114
Operating costs and expenses:
Research and development	106,533	194,857	388,521	503,479	4,732,329
Sales, general and administrative	115,021	1,008,770	419,616	1,465,963	7,133,529
Total operating expenses	221,554	1,203,627	808,137	1,969,442	11,865,858
Loss from operations	(221,554)	(1,203,627)	(808,137)	(1,969,442)	(11,837,744)
Other income (expense):
Interest income	0	0	3	1	11,357
Interest expense	(90,593)	9,788	(266,036)	(599,444)	(4,258,163)
Other income (expense), net	27,827	(3,088)	27,827	(3,088)	189,025
Total other income (expense), net	(62,766)	6,700	(238,206)	(602,531)	(4,057,781)
Loss from operations: Before provision for income tax	(284,320)	(1,196,927)	(1,046,343)	(2,571,973)	(15,895,525)
Provision for income tax	0	0	(1,600)	(1,600)	(9,600)
Net loss	(284,320)	(1,196,927)	(1,047,943)	(2,573,573)	(15,905,125)
Net loss attributable to:
Non-controlling interest	(20,937)	(38,480)	(75,872)	(98,510)	(1,040,493)
Micro Imaging Technology, Inc. stockholders	(262,383)	(1,158,447)	(972,071)	(2,475,063)	(14,864,632)
Net loss	$ (284,320)	$ (1,196,927)	$ (1,047,943)	$ (2,573,573)	$ (15,905,125)
Net loss per share, basic and diluted (in dollars per share)	$ 0	$ (0.01)	$ 0	$ (0.02)
Shares used in computing net loss per share, basic and diluted (in shares)	267,326,629	150,389,132	227,162,672	134,914,977

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Document and Entity Information	9 Months Ended
	Jul. 31, 2011	Aug. 15, 2011
Entity Registrant Name	MICRO IMAGING TECHNOLOGY, INC.
Entity Central Index Key	0000808015
Current Fiscal Year End Date	--10-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	mmtc
Entity Common Stock, Shares Outstanding		402,028,521
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jul. 31, 2011
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2011

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Employee Retirement Plan

9 Months Ended

Jul. 31, 2011

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

7. Employee Retirement Plan

Commencing on January 1, 2005, the Company sponsored a Simple IRA retirement plan which covers substantially all qualified full-time employees.  Participation in the plan is voluntary and employer contributions are determined on an annual basis.  Currently employer contributions are being made at the rate of three percent (3%) of the employees’ base annual wages.  The Company’s contribution to the IRA plan for the nine months ended July 31, 2011 and 2010 was $0 and $639, respectively.

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Inventories

9 Months Ended

Jul. 31, 2011

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

3.  Inventories

Inventories are stated at the lower of cost of market.  Cost is determined by the first-in-first-out (FIFO) method.  Inventory consists of the following at July 31, 2011 and October 31, 2010.

Raw Materials	$	15,115
Finished Goods		75,789
Total	$	90,904

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Subsequent Events

9 Months Ended

Jul. 31, 2011

Subsequent Events [Abstract]

Subsequent Events [Text Block]

9. Subsequent Events

In accordance with his consulting arrangement, in August 2011, the Company issued 50,000 shares of common stock to its Chief Executive Officer, Michael Brennan.  Also in August 2011, as part of his employment arrangement, Mr. Brennan was also granted two-year options to purchase 100,000 shares of common stock at an exercise price of $0.30 per share.

On August 2, 2011, the Company received an additional $22,500, net of fees and expenses, from Asher Enterprises, Inc. pursuant to a Stock Purchase Agreement.

In August 2011, Asher converted an additional $9,800 in principal loans into 24,500,000 shares of common stock at $0.004 per share.

On August 2, 2011, the Company sold 25,000,000 shares of common stock in a private placement transaction to an unaffiliated investor for proceeds of $50,000.  As additional consideration for the purchase, the Company granted the purchaser a two-year warrant to purchase up to an additional $50,000 in common stock at a 25% discount to the average closing price of the stock on the 3 trading days prior to exercise of the warrant.

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Securities Transactions

9 Months Ended

Jul. 31, 2011

Securities Transactions Disclosure [Abstract]

Securities Transactions [Text Block]

8. Securities Transactions

Common Stock issued to Officers, Directors and Certain Consultants

During the nine months ended July 31, 2011, pursuant to his compensation arrangement, the Company issued 450,000 shares of common stock to its Chief Executive Officer, Michael W. Brennan, at $0.01 per share.  The aggregate fair market value of the shares was determined to be $4,500.  For additional services rendered, Mr. Brennan received 3,000,000 shares of common stock valued at $18,000, or $0.006 per share, under the Company’s 2011 Employee Benefit Plan on February 17, 2011  as well as on June 1, 2011 valued at the same price per share for a second $18,000.

On June 1, 2011, the Company issued 3,000,000 shares of common stock to its Chief Financial Officer, Victor Hollander, for additional services rendered to the Company.  The fair market value of the shares was determined to be $18,000, or $0.006 per share.

The Company issued 75,000 shares of common stock to a consultant of the Company, during the nine months ended July 31, 2011 in accordance with his compensation arrangement.  The shares were issued at $0.01 per share, with an aggregate fair market value of $750.

The Company issued 4,500,000 shares of common stock to three consultants of the Company, during the nine months ended July 31, 2011 under Company’s 2011 Employee Benefit Plan. The shares were issued at prices ranging from $0.006 to $0.01 per share, with an aggregate fair market value of $45,000.

Common Stock Issued in Private Placement Transactions

Between November 5, 2010 and July 31, 2011, Dutchess Opportunity Fund purchased 9,408,038 shares of common stock at prices ranging from $0.006 to $0.01 per share under the terms of the May 4, 2010 Securities Purchase Agreement.  The Company received proceeds of $60,192, net of $880 in transfer fees, over eight separate sale transactions.

Common Stock Issued in Cancellation of Debt

Between November 2, 2010 and July 31, 2011, the Company issued 141,829,228 shares of common stock to Asher Enterprises, Inc. upon conversion of $203,965 in convertible notes, plus $3,500 in accrued interest thereon, at prices ranging from $0.001 to $0.0004 per share.

On February 17, 2011, the Company converted $18,000 in accrued legal fees due the Company legal firm into 3,000,000 shares of common stock at $0.006 per share.

On June 1, 2011, the Company issued 5,733,333 shares of common stock to a consultant upon the conversion of $34,000 of a convertible note at $0.006 per share.

Common Stock Issued for Loan

In May 2011, the Company issued 600,000 shares of common stock at $0.05 per share as partial consideration for a $30,000 loan.

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Nature of our Business, Development Stage Company and Continuance of Operations

9 Months Ended

Jul. 31, 2011

Nature Of Business Development Stage Company and Continuance Of Opreations [Abstract]

Nature Of Business Development Stage Company and Continuance Of Opreations [Text Block]

1. Nature of our Business, Development Stage Company and Continuance of Operations

These unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America applicable to a going concern which contemplated the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.  Since inception, the Company has incurred substantial losses and there is substantial doubt that the Company will generate sufficient revenues in the foreseeable future to meet its operating cash requirements.  Accordingly, the Company’s ability to continue operations depends on its success in obtaining additional capital in an amount sufficient to meet its cash needs. This raises substantial doubt about its ability to continue as a going concern. These financial statements do not include any adjustments that might result from this uncertainty.

Our independent registered public accounting firm has included an explanatory paragraph in its report on the financial statements for the year ended October 31, 2010 which raises substantial doubt about our ability to continue as a going concern.

Micro Imaging Technology, Inc. (the “Company”), a California corporation, is a holding company whose operations are conducted through its Nevada subsidiary, Micro Imaging Technology (“MIT”).  As of July 31, 2011, the Company owns eighty point seven percent (80.7%) of the issued and outstanding stock of MIT.

The losses incurred to date which are applicable to the minority stockholders of the Company’s consolidated subsidiary, MIT, exceed the value of the equity held by the minority stockholders.  Such losses have been allocated to the Company as the majority stockholder and are included in the net loss and accumulated deficit in the condensed consolidated financial statements for the nine months ended July 31, 2011.  Any future profits reported by our subsidiary will be allocated to the Company until the minority’s share of losses previously absorbed by the Company have been recovered.

In 1997, the Company began marketing a small, point-of-use water treatment product aimed at the high purity segment of commercial and industrial water treatment markets. In February 2000, the Company formed Electropure EDI, Inc. (EDI), a wholly-owned Nevada subsidiary, through which all manufacturing and sales of its proprietary water treatment products were then conducted. In October 2005, the Company sold the assets of the EDI subsidiary and discontinued operations.

The Company acquired, in October 1997, an exclusive license to patent and intellectual property rights involving laser light scattering techniques to be utilized in the detection and monitoring of toxicants in drinking water. In February 2000, the Company formed Micro Imaging Technology (MIT), a majority-owned Nevada subsidiary, to conduct research and development based upon advancements developed and patented from the licensed technology.   The technology being developed is a non-biologically based system utilizing both proprietary hardware and software to rapidly (near real time) determine the specific specie of an unknown microbe present in a fluid with a high degree of statistical probability (“MIT system”).  It will analyze a sample presented to it and compare its characteristics to a library of known microbe characteristics on file.  At present, it is the Company’s only operation.

Effective with the sale of its EDI operation in October 2005, the Company’s planned principal operation, the further development and marketing of its remaining technology, has not produced any significant revenue and, as such, the Company, beginning with the fiscal year starting November 1, 2005, is considered a development stage enterprise.

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Summary of Significant Accounting Policies

9 Months Ended

Jul. 31, 2011

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

4. Summary of Significant Accounting Policies

The accounting policies followed are as set forth in Note 1 of the Notes to Financial Statements in the Company’s 2010 Annual Report on Form 10-K. The Company has not experienced any material change in its critical accounting policies since November 1, 2010. The Company’s discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments regarding uncertainties that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, the Company evaluates its estimates, which are based upon historical experience and on other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The Company considers the following accounting policies to be most critical in their potential effect on its financial position or results of operations.

Earnings Per Share

Basic earnings per share is based on the weighted average number of shares outstanding for a period.  Diluted earnings per share is based upon the weighted average number of shares and potentially dilutive common shares outstanding.  Potential common shares outstanding principally include convertible notes payable and stock options under our stock plan.  Since the Company has incurred losses, the effect of any common stock equivalent would be anti-dilutive.

Stock Based Compensation

Stock-based compensation costs for stock options issued to employees is measured at the grant date, based on the fair value of the award using the Black Scholes Option Pricing Model, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant).

No stock-based compensation was recognized during the nine months ended July 31, 2011.

In May 1999, the Company adopted the Micro Imaging Technology, Inc. 1999 stock option plan (the “Plan”), for officers, directors, employees, consultants, and advisors of the Company. The Plan provides two types of options: (i) Incentive Stock Options and (ii) Non-Qualified Stock Options. The Plan authorizes the granting of options up to 1,000,000 shares of common stock. The exercise price per share on options granted may not be less than the fair market value per share of the Company’s common stock at the date of grant. The exercise price per share of Incentive Stock Options granted to anyone who owns more than ten percent (10%) of the voting power of all classes of the Company’s common stock must be a minimum of one hundred ten percent (110%) of the fair market value per share at the date of grant. The options exercise price may be paid in cash or its equivalent including cashless exercises as determined and approved by the plan administrator.  The term of each Incentive Stock Option granted is fixed by the plan administrator and shall not exceed ten (10) years, except that for those who own ten percent (10%) of the voting power of the Company the term of the option may be no more than five (5) years. Non-qualified Stock Options may not be granted for more than ten (10) years. The vesting periods for both Incentive Stock Options and Non-Qualified Stock Options are determined by the administrator at or after the date of grant.  As of the fiscal year ended October 31, 2008, all of the options available for issuance under the Plan have been granted.

In September 2007, the Company’s subsidiary adopted the Micro Imaging Technology 2007 Stock Option Plan authorizing the granting of options up to 3,000,000 shares of common stock.  This plan is otherwise identical to the above 1999 stock option plan of its parent company in eligibility requirements, types of options and other terms and conditions.  There have been no options granted under this plan to date.

The Company adopted the Micro Imaging Technology 2008 Employee Benefit Plan (the “Benefit Plan”) effective December 3, 2007.  Under the Benefit Plan, the Company can grant up to three (3) million shares of common stock or options to purchase common stock to eligible employees, directors, officers, consultants or advisors.  Eligibility and terms of each grant is determined by the Board of Directors.  Between September 2007 and March 2008, all three (3) million shares of common stock authorized under the Benefit Plan were issued to Michael Brennan (1,750,000 shares) and Victor Hollander (1,250,000 shares) for services rendered.   

In May 2008, the Company adopted the Micro Imaging Technology 2008 Employee Incentive Stock Plan (“Stock Plan”) effective May 2, 2008.  Similar to the above-referenced Benefit Plan, the Stock Plan permits the Company to grant up to three (3) million shares of common stock or options or purchase common stock to eligible employees, directors, officers, consultants or advisors.  Between May 2008 and November 2009, 2,634,472 shares of common stock were issued under the Stock Plan to various individuals, including officers and directors, in exchange for cancellation of loans and interest as well as fees and expenses due to consultants and corporate counsel of the Company.

The Company adopted the 2009 Employee Benefit Plan in October 2008.  Under the Benefit Plan, the Company can grant up to four (4) million shares of common stock or options to purchase common stock to eligible employees, directors, officers, consultants or advisors.  Eligibility and terms of each grant is determined by the Board of Directors.  The Company granted 2,250,000 options under the Benefit Plan during the fiscal year ended October 31, 2008.  In May 2009, the Company granted 500,000 shares, valued at $28,088, under the Benefit Plan to Michael Brennan.  In November 2009, the Company issued 1,300,000 shares valued at $49,018 to legal firms rendering services to the Company for accrued fees.

On January 7, 2010, the Board of Directors authorized the formation of the 2010 Employee Benefit Plan which is authorized to grant up to twelve (12) million shares of common stock or options to purchase common stock to eligible employees, directors, officers, consultants or advisors.  Eligibility is determined by the Board of Directors.  During the fiscal year ended October 31, 2010, the Company issued all of the twelve (12) million shares of common stock under the Benefit Plan to consultants for services rendered in the aggregate sum of $523,000.

On February 16, 2011 the Board of Directors authorized the formation of the 2011 Employee Benefit Plan which is authorized to grant up to Fifteen (15) million shares of common stock or options to purchase common stock to eligible employees, directors, officers, consultants or advisors.  Eligibility is determined by the Board of Directors.  During the nine month period ended July 31, 2011, the Company issued thirteen million five hundred thousand (13,500,000) shares of common stock under the Benefit Plan to consultants for services rendered in the aggregate sum of $99,000.

The following table summarizes information about options granted under the Company’s equity compensation plans through July 31, 2011 and otherwise to employees, directors and consultants of the Company. Generally, options vest on an annual pro rata basis over various periods of time and are exercisable, upon proper notice, in whole or in part at any time upon vesting. Typically, in the case of an employee, vested options terminate when an employee leaves the Company. The options granted have contractual lives ranging from three to ten years.

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at October 31, 2010		5,900,000		$	0.10		1.9	$	—
Granted		—			—
Exercised		—			—
Expired		(250,000	)		0.14
Canceled		—			—
Outstanding at July 31, 2011		5,650,000		$	0.10		1.3	$	—

Summary information about the Company’s options outstanding at July 31, 2011 is set forth in the table below.  Options outstanding at July 31, 2011 expire between August 2011 and January 2016.

Range of Exercise Prices	Options Outstanding July 31, 2010		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Options Exercisable July 31, 2010		Weighted Average Exercise Price
$ 0.02 - $0.15		4,900,000		1.3	$	0.07		4,900,000	$	0.07
$ 0.24 - $0.30		750,000		1.1	$	0.29		750,000	$	0.29
TOTAL:		5,650,000						5,650,000

As of July 31, 20111, all outstanding options had fully vested and there was no estimated unrecognized compensation from unvested stock options.

The following table summarizes the information relating to warrants granted to non-employees as of October 31, 2010 and changes during the nine months ended July 31, 2011

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at October 31, 2010		5,500,000	$	0.02		1.8	$	—
Granted		—		—
Exercised		—		—
Expired		—		—
Canceled		—		—
Outstanding at July 31, 2011		5,500,000	$	0.02		1.0	$	—

Summary information about the Company’s warrants outstanding at July 31, 2011 is set forth in the table below.  Warrants outstanding at July 31, 2011 expire between September 2011 and October 2012.

New Accounting Pronouncements

The following accounting standards updates were recently issued and have not yet been adopted by us.  These standards are currently under review to determine their impact on our consolidated financial position, results of operations, or cash flows.

In April 2011, FASB issued Accounting Standard Update (ASU) 2011-02, Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. The update provides additional guidance to creditors on evaluating whether a modification or restructuring of a receivable is a troubled debt restructuring (TDR) and clarifies the existing guidance on whether (1) the creditor has granted a concession and (2) whether the debtor is experiencing financial difficulties, which are the two criteria used to determine whether a modification or restructuring is a TDR. This guidance is effective for interim or annual periods beginning on or after June 15, 2011 and should be applied retrospectively to the beginning of the annual period of adoption. Management is currently assessing the impact of this guidance on the Company’s financial position and results of operations.

In April 2011, the FASB issued ASU 2011-03, Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements. The update removes from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. This guidance is effective prospectively for transactions, or modifications of existing transactions, that occur on or after the first interim or annual period beginning on or after December 15, 2011. Management is currently assessing the impact of this guidance on the Company’s financial position and results of operations.

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRSs. The new guidance results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between US GAAP and International Financial Reporting Standards. While many of the amendments to US GAAP are not expected to have a significant effect on practice, the new guidance changes some fair value measurement principles and disclosure requirements. This guidance is effective prospectively for interim and annual periods beginning after December 15, 2011. Early adoption is not permitted. Management is currently assessing the impact of this guidance on the Company’s financial position and results of operations.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (ASU 2011-05), which removes the option of presenting comprehensive income in the Consolidated Statements of Changes in Stockholder’s Equity. ASU 2011-05 provides entities with an option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income (OCI) either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Under either method, entities must display adjustments for items that are reclassified from OCI to net income in both net income and OCI. This guidance does not change the items that must be reported in OCI or when an item of OCI must be reclassified to net income. This guidance, related only to disclosures, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and should be applied retrospectively. Early adoption is permitted.

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Convertible Debentures

9 Months Ended

Jul. 31, 2011

Convertible Debt Disclosure [Abstract]

Convertible Debt Disclosure [Text Block]

5. Convertible Debentures

Anthony M. Frank

In December 2008, the Company authorized a private offering to sell up to $2,500,000 in convertible debentures.  On March 16, 2009, the Company’s largest stockholder, Anthony M. Frank, purchased $75,000 of the convertible debentures.  The debenture matures on March 16, 2012 and is convertible at any time at the option of the holder into the Company’s common stock at a fair market value of eighty percent (80%) of the lowest closing bid price per share for the twenty (20) trading days immediately preceding conversion.  The debentures are also redeemable by the Company:  1) if before three months at one hundred twenty percent (120%) of the principal value, plus interest; or 2) if after three months, at one hundred thirty one percent (131%) of principal, plus interest.

During the nine months ended July 31, 2011, the Company expensed $5,610 in accrued interest on the above debenture.  The intrinsic value of the beneficial conversion feature (which represents the twenty percent (20%) discount in the conversion price of the common stock) was determined to be $18,750 and is being amortized over the three-year life of the debenture.  The Company expensed $4,675 of this cost during the nine months ended July 31, 2011.

Asher Enterprises, Inc.

On August 16, 2010, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. in connection with the issuance of an eight percent (8%) convertible note in the aggregate principal amount of $50,000.  The Note matured on May 18, 2011 and is convertible into common shares at a thirty nine percent (39%) discount to the average of the lowest three closing bid prices of the common stock during the ten trading days prior to the conversion date.  The Note provided that Asher may convert any or all of the unpaid principal note prior to the maturity date, commencing one hundred eighty (180) days following the date of the Note.  The Company received the proceeds of the Note on September 8, 2010, less a $3,000 reimbursement to Asher for fees and expenses related to the referenced agreements. The debentures carry a beneficial conversion feature allowing conversion at the option of the holder at any time after purchase into common stock at sixty one percent (61%) of the average of the lowest three closing bids during the ten trading days ending one trading day prior to the date the conversion notice is sent.  The Company calculated the intrinsic value of the conversion feature as of the date of issuance of the debentures (using the same criteria as noted above) and fully amortized the $31,967 cost as of July 31, 2011 pursuant to the fact that between March 9 and April 25, 2011, Asher converted the full principal balance of the Note, plus $2,000 in accrued interest, into 20,480,039 shares of common stock at prices ranging from $0.0018 to $0.0035 per share.

On October 5, 2010, the Company entered into a second Securities Purchase Agreement with Asher Enterprises, Inc. in connection with the issuance of an eight percent (8%) convertible note in the aggregate principal amount of $37,500.  The Note matured on July 8, 2011 and was convertible into common shares at a thirty nine percent (39%) discount to the average of the lowest three closing bid prices of the common stock during the ten trading days prior to the conversion date.  The Note provided that Asher may convert any or all of the unpaid principal note prior to the maturity date, commencing one hundred eighty (180) days following the date of the Note.  The Company received the proceeds of the Note on October 12, 2010, less a $2,500 reimbursement to Asher for fees and expenses related to the referenced agreements.  The value of the conversion feature, $23,975, was fully amortized as of July 31, 2011 pursuant to the fact that between May 19 and July 11, 2011, Asher converted the full principal balance of the Note, plus $1,500 in accrued interest, into 33,283,731 shares of common stock at prices ranging from $0.0009 to $0.0016 per share.   The Company granted Asher an extension until July 11, 2011 to complete the conversion of this Note.

On October 26, 2010, Asher Enterprises entered into third a Purchase Agreement with an unaffiliated note holder to purchase the Amended and Restated ten percent (10%) Convertible Note issued to the latter by the Company in the aggregate amount of $64,865 for a $60,000 loan made to the Company in June 2009, plus the $4,865 in interest accrued on such loan.  The Note matures on May 31, 2012 and is convertible into common shares at a forty two percent (42%) discount to the average of the lowest three closing bid prices of the common stock during the ten trading days prior to the conversion date.  Asher may convert any or all of the unpaid principal note prior to the maturity date.  The Company has calculated the intrinsic value of the conversion feature to be $46,971 as of the date of issuance of the debentures using the same criteria as noted above.  Between November 2, 2010 and January 26, 2011, Asher converted the entire principal amount of the note into a total of 13,741,791 shares of common stock at prices ranging from $.0034 to $.0075 per share.

On November 19, 2010, the Company entered into a fourth Securities Purchase Agreement with Asher Enterprises, Inc. in connection with the issuance of an eight percent (8%) convertible note in the aggregate principal amount of $35,000.  The Note matured on August 23, 2011 and was convertible into common shares at a thirty nine (39%) discount to the average of the lowest three closing bid prices of the common stock during the ten trading days prior to the conversion date.  Asher may convert any or all of the unpaid principal note prior to the maturity date, commencing one hundred eighty (180) days following the date of the Note.  The Company received the proceeds of the Note on December 3, 2010, less a $2,500 reimbursement to Asher for fees and expenses related to the referenced agreements.  The value of the conversion feature, $22,377, is being amortized over the life of the loan and the Company has expensed $13,426 of that amount as of July 31, 2011.  Between July 19 and July 31, 2011, Asher converted $26,600 of the principal amount of this Note into 66,500,000 shares of common stock at $0.0004 per share.  See also Note 9 – “Subsequent Events.”

On December 6, 2010, Asher Enterprises entered into a fifth Purchase Agreement with an unaffiliated note holder to purchase the Amended and Restated eight percent (8%) Convertible Note issued to the latter by the Company in the principal amount of $25,000 for a loan made to the Company in December 2009.  The Note matures on December 31, 2011 and is convertible into common shares at a forty two percent (42%) discount to the average of the lowest three closing bid prices of the common stock during the ten trading days prior to the conversion date.  Asher may convert any or all of the unpaid principal note prior to the maturity date.  The Company calculated the intrinsic value of the conversion feature to be $18,159 as of the date of issuance of the debentures using the same criteria as noted above.  During December 2010, Asher converted the entire principal amount of the note into a total of 7,823,519 shares of common stock at prices ranging from $.003 to $.0034 per share.

On January 25, 2011, the Company entered into a sixth Securities Purchase Agreement with Asher Enterprises, Inc. in connection with the issuance of an eight percent (8%) convertible note in the aggregate principal amount of $32,500. The Note matures on September 25, 2011 and is convertible into common shares at a thirty nine (39%) discount to the average of the lowest three closing bid prices of the common stock during the ten trading days prior to the conversion date.  Asher may convert any or all of the unpaid principal note prior to the maturity date, commencing one hundred eighty (180) days following the date of the Note.  The Company received the proceeds of the Note on February 18, 2011, less a $2,500 reimbursement to Asher for fees and expenses related to the referenced agreements.  The value of the conversion feature, $20,779, is being amortized over the life of the loan and the Company has expensed $14,314 of that amount as of July 31, 2011.

On April 12, 2011, the Company entered into a seventh Securities Purchase Agreement with Asher Enterprises, Inc. in connection with the issuance of an eight percent (8%) convertible note in the aggregate principal amount of $37,500.  The Note matures on January 14, 2012 and is convertible into common shares at a thirty nine (39%) discount to the average of the lowest three closing bid prices of the common stock during the ten trading days prior to the conversion date.  Asher may convert any or all of the unpaid principal note prior to the maturity date, commencing one hundred eighty (180) days following the date of the Note.  The Company received the proceeds of the Note on May 9, 2011, less a $2,500 reimbursement to Asher for fees and expenses related to the referenced agreements.  The value of the conversion feature, $23,975, is being amortized over the life of the loan and the Company has expensed $9,768 of that amount as of July 31, 2011.

On June 21, 2011, the Company entered into an eighth Securities Purchase Agreement with Asher Enterprises, Inc. in connection with the issuance of an eight percent (8%) convertible note in the aggregate principal amount of $30,000.  The Note matures on March 23, 2012 and is convertible into common shares at a forth five (45%) discount to the average of the lowest three closing bid prices of the common stock during the ten trading days prior to the conversion date.  Asher may convert any or all of the unpaid principal note prior to the maturity date, commencing one hundred eighty (180) days following the date of the Note.  The Company received the proceeds of the Note on July 7, 2011, less a $2,500 reimbursement to Asher for fees and expenses related to the referenced agreements.  The value of the conversion feature, $24,545, is being amortized over the life of the loan and the Company has expensed $3,636 of that amount as of July 31, 2011.

On August 2, 2011, the Company received an additional $22,500 from Asher Enterprises, net of a $2,500 reimbursement for fees and expenses.  See Note 9 – “Subsequent Events.”

Concurrent with the issuance of these notes to Asher, the Company, as requested by the above creditor, has instructed it stock transfer agent to reserve an agreed upon number of shares of the Company’s common stock to be issued if the notes are converted.  As of July 31, 2011, there have been are 42,062,123 shares reserved, but are not considered as issued and outstanding.

Other Convertible

On November 10, 2010, the Company borrowed $64,868 from an unaffiliated party on terms similar to the Asher notes.  The Notes matures on May 31, 2012 and bears interest at the rate of ten percent (10%) per annum.  The Note is convertible into common shares at a forty two percent (42%) discount to the average of the lowest three closing bid prices of the common stock during the ten trading days prior to the conversion date.  Asher may convert any or all of the unpaid principal note prior to the maturity date.  The Company calculated the intrinsic value of the conversion feature to be $46,973 as of the date of issuance of the debentures using the same criteria as noted above and is amortizing the expense over the life of the loan.   The Company has expensed $21,674 with regard to this beneficial conversion feature as of July 31, 2011.

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Notes Payable

9 Months Ended

Jul. 31, 2011

Notes Payables Disclosures [Abstract]

Notes Payable [Text Block]

6. Notes Payable

Between May 1 and June 24, 2009, the Company borrowed a total of $95,000 from its Chief Executive Officer, Michael W. Brennan.  On February 15, 2010, Mr. Brennan transferred title to $25,000 in principal loans to an unaffiliated third party.  This loan was reclassified into a convertible term note with provisions identical to the “Convertible Term Loans” discussed below in this Note 6.  It was subsequently sold to Asher Enterprises and converted into common stock.  The loans from Mr. Brennan are due upon demand and accrue interest at the rate of six percent (6%) per annum.  The Company has recorded $10,061 in interest expense as of July 31, 2011 on these loans from Mr. Brennan.

Our largest stockholder, Anthony M. Frank, loaned the Company $64,000 on September 23, 2009.  The loan bears interest at six percent (6%) per annum and is convertible into common stock at the option of the holder.  The Company has accrued a total of $7,154 in interest on the loan as of July 31, 2011.  The loan was due on March 10, 2010 and the Company is currently negotiating with Mr. Frank to extend the maturity date.

On July 15, 2010, Mr. Frank loaned the Company an additional $30,000 at six percent (6%) interest for ninety (90) days.  The loan is convertible into common stock at the option of the holder into common stock at $0.025 per share or the average closing price of the common stock for the twenty (20) trading days prior to conversion.  The Company accrued interest of $1,884 on this loan as of July 31, 2011 and is negotiating with Mr. Frank to extend the maturity date.

On March 28, 2011, the Company borrowed $4,000 from its Chief Financial Officer, Victor

A. Hollander.  The loan bears interest at the rate of six percent (6%) and is payable on demand.  As of the nine months ended July 31, 2011, the Company had accrued $82 in interest on this loan.

Convertible Term Loans

Between November 1, 2009 and April 20, 2010, the Company borrowed $172,000 from five unaffiliated lenders and $20,000 from our largest stockholder.  The Convertible Term Loans mature in twelve (12) months, bear interest at six percent (6%) per annum and require the Company to make payments on the loans each fiscal quarter from a sinking fund to be established from any proceeds received from operating profits, proceeds derived from a securities purchase agreement entered into with Ascendiant Capital Group in October 2009 (which was subsequently terminated by the Company on May 6, 2010), and/or from other equity funding.  The loans are convertible, at the option of the lender, into common stock at a twenty percent (20%) discount to fair market value or $0.10 per share, whichever is greater.  As additional consideration for the loan, the lender receives restricted common stock, the number of which is determined by dividing the principal amount of the loan by the greater of $0.05 per share or the fair market value on the loan date.  One lender also received a two-year warrant to purchase 500,000 shares of common stock at $0.03 per share as additional consideration for a $30,000 loan.

During April 2010, the Company borrowed an additional $25,000 under the terms of the above Convertible Term Loans.  However, this loan provides that it is convertible at the option of the lender, into common stock at a twenty percent (20%) discount to fair market value or $0.05 per share, whichever is greater.  In May 2011, the Company borrowed an additional $30,000 under the Convertible Term Loan arrangement from this same individual.

Including the $25,000 loan transferred by Mr. Brennan as discussed above under “Notes Payable,” as of July 31, 2011, the Company had issued 4,540,000 and 600,000 shares of common stock in fiscal 2010 and during the nine months ended July 31, 2011, respectively, for all of the above $257,000 loans and has expensed an aggregate of $19,821 in interest accrued on the loans as of July 31, 2011.

On April 9, 2010, our Chief Executive Officer, Michael Brennan and our Chief Financial Officer, Victor Hollander, converted $90,000 and $160,000, respectively, into convertible term loans.  Also, on April 9, 2010, a consultant to the Company converted $55,000 into a convertible term loan.  The funds converted represented unpaid fees and expenses that had been accrued on the Company’s books.  The terms of the loans are identical to the above Convertible Term Loans received through March 2010 and provide for the issuance of common stock as additional consideration.  Consequently, the Company expensed $305,000 in fiscal 2010 on the issuance of 6,100,000 shares of common stock for these loans and has expensed an aggregate of $23,630 in interest accrued on the loans as of July 31, 2011.  On June 1, 2011, $34,000 of the $55,000 converted in fiscal 2010 by the consultant was converted into 5,733,333 shares of common stock at the rate of $0.006 per share.

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Condensed Consolidated Statements of Cash Flows (USD $)	9 Months Ended		69 Months Ended
	Jul. 31, 2011	Jul. 31, 2010	Jul. 31, 2011
Cash flows from operating activities:
Net loss	$ (1,047,943)	$ (2,573,573)	$ (15,905,125)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	13,603	20,725	139,559
Amortization of costs and fees related to convertible debentures	213,239	3,368	833,082
Common stock issued for services	45,750	762,100	2,147,790
Common stock issued to officers and directors for services	58,500	408,200	3,077,810
Common stock issued for shares of subsidiary stock	0	0	254,000
Common stock of subsidiary issued to employees and consultants	0	0	2,815
Common stock issued as a commission	0	0	33,000
Common stock issued for accounts payable	18,000	49,018	278,583
Common stock issued to former licensee	0	0	41,319
Common stock issued/recovered on cancelled agreements	0	0	20,478
Non-cash compensation for stock options and warrants	0	26,740	631,894
Costs and fees related to issuance of convertible debt	30,000	530,000	567,113
Interest expense related to beneficial conversion feature		0	1,944,800
Interest paid with common stock	0	0	104,836
Interest on notes receivable for common stock	0	0	(1,373)
(Increase) decrease in assets:
Prepaid expenses	85,648	(125,480)	24,371
Inventories	0	0	(90,904)
Notes receivable	0	0	0
Increase (decrease) in liabilities:
Trade accounts payable	90,956	234,262	569,754
Accounts payable to officers and directors	139,242	105,494	616,939
Accrued payroll and other expenses	94,511	103,672	256,555
Net cash used in operating activities	(258,494)	(455,474)	(4,452,704)
Cash flows from investing activities:
Purchase of fixed assets	0	0	(137,354)
Net cash used in investing activities	0	0	(137,354)
Cash flows from financing activities:
Principal payments on notes payable to stockholders	(25,000)	0	(1,158,000)
Proceeds from issuance of notes payable to a related party	34,000	0	1,039,800
Proceeds from issuance of notes and convertible notes payable	199,868	230,000	1,389,233
Proceeds from issuance of common stock, net	61,072	180,000	2,139,298
Net cash provided by financing activities	269,940	410,000	3,410,331
Net change in cash	11,446	(45,474)	(1,179,727)
Cash at beginning of period	(7,876)	2,148	1,195,298
Cash at end of period	3,750	(43,326)	3,750
Supplemental Disclosure of Cash Flow Information
Interest paid	664	2,041	10,985
Income taxes paid	1,600	1,600	18,640
Supplemental Schedule of Non-Cash Investing and Financing Activities
Beneficial conversion feature of convertible debentures	0	(6,250)
Common stock issued in consideration for loans	34,000	305,000
Conversion of convertible notes payable to shares of common stock	$ 207,465	$ 0

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Basis of Presentation

9 Months Ended

Jul. 31, 2011

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Accounting [Text Block]

2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include all adjustments, consisting solely of normal recurring adjustments which management believes are necessary for a fair presentation of the Company’s financial position at July 31, 2011 and results of operations for the periods presented.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

Results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The accompanying condensed consolidated financial statements should be read in conjunction with our audited financial statements and footnotes as of and for the year ended October 31, 2010, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 11, 2011.

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Condensed Consolidated Balance Sheet (USD $)	Jul. 31, 2011	Oct. 31, 2010
ASSETS
Cash	$ 3,750	$ (7,876)
Inventories	90,904	90,904
Prepaid expenses	1,220	86,868
Total current assets	95,694	177,772
Fixed assets, net	4,278	17,881
Total assets	99,972	195,653
LIABILITIES AND STOCKHOLDERS' DEFICIT
Bank overdraft	0	7,876
Notes payable to stockholder	671,000	696,000
Convertible notes payable, net of unamortized discount of $72,055 and $44,902 in 2011 and 2010, respectively	176,213	42,598
Trade accounts payable	639,130	548,174
Accounts payable to officers and directors	312,485	173,243
Accrued payroll	243,301	193,056
Other accrued expenses	126,349	82,083
Total current liabilities	2,168,478	1,743,030
Long term liabilities:
Convertible notes payable, net of unamortized discount of $0 and $55,138 in 2011 and 2010, respectively	0	84,727
Redeemable convertible preferred stock, $0.01 par value; 2,600,000 shares authorized, issued and outstanding at July 31, 2011 and October 31, 2010	26,000	26,000
Total long term liabilities	26,000	110,727
Total liabilities	2,194,478	1,853,757
Commitments and contingencies
Stockholders' deficit:
Common stock, $0.01 par value; 500,000,000 shares authorized; 352,538,521 and 177,941,922 shares issued and outstanding at July 31, 2011 and October 31, 2010, respectively	3,525,385	1,779,429
Additional paid-in capital	38,094,435	39,228,850
Accumulated deficit from previous operating activities	(27,809,201)	(27,809,201)
Deficit accumulated during the development stage	(15,905,125)	(14,857,182)
Total stockholders' deficit	(2,094,506)	(1,658,104)
Total liabilities and stockholders' deficit	$ 99,972	$ 195,653