Securities Transactions

9 Months Ended

Jul. 31, 2013

Equity [Abstract]

Securities Transactions

10. Securities Transactions

Common Stock Issued in Private Placement Transactions

On May 8, 2012, Board member, Gregg J. Newhuis, entered into a Subscription Agreement, as amended on October 31, 2012, to purchase a total of 1,800,000 shares of the Company’s common stock at $0.50 per share over a six-month period. Mr. Newhuis also received a one-year option to purchase up to an additional 266,667 shares of common stock at $1.50 per share in September 2012. This option was cancelled in October 2012. The Company received the final $100,000 from Mr. Newhuis on November 29, 2012 pursuant to his May 2012 subscription arrangement. Giving effect to the February 8, 2013 reverse stock split, the Company issued a total of 200,000 shares of common stock at $0.50 per share for the November 29, 2012 purchase.

On April 20, 2012, the Company granted three-year warrants to purchase 80,000 shares of common stock to a major stockholder as part of a Subscription Agreement for the purchase of 80,000 shares of common stock at $0.75 per share. The warrants are exercisable at $1.00 per share within one year of the subscription; $2.50 per share within two years; and at $5.00 per share during the third year of the warrant. On January 11, 2013, the warrant holder exercised his right to purchase one half of the warrants granted and paid $40,000. Giving effect to the February 8, 2013 reverse stock split, the Company issued 40,000 shares of common stock at $1.00 per share on this transaction.

On January 11, 2013, Victor Hollander, a Director and the Company’s Chief Financial Officer, purchased 3,333 shares of common stock for proceeds of $5,000, at the fair market value of $1.50 per share.

On May 21, 2012, the Company entered into a Subscription Agreement with a major stockholder to purchase a total of 400,000 shares of the Company’s common stock at $0.50 per share, for a total of $200,000 which the Company received during fiscal 2012. As additional consideration, the purchaser was granted a one-year option to purchase up to an additional 66,667 shares of common stock at $1.50 per share commencing on the date the final dollars are invested. On February 6, 2013, this stockholder surrendered his rights to the referenced warrants in full.

On February 6, 2013, the Company entered into a Subscription Agreement with a major stockholder to purchase up to $180,000 in shares of common stock at a purchase price of $0.85 per share over a three month period. Between February 6, 2013 and April 3, 2013, the stockholder purchased a total of 211,764 shares of common stock and paid $180,000.

Pursuant to an April 1, 2012 consulting arrangement, the Company agreed to pay Jeffrey Nunez a five percent (5%) transaction fee on all proceeds received by the Company during the one year term of such agreement. The fee is payable in shares of the Company’s common stock which are to be valued as the average closing price of the common stock for the five (5) trading days prior to the transaction which triggers the fee. Between April 20 and October 31, 2012, the Company issued Mr. Nunez a total of 35,512 shares of common stock valued at $53,000 pursuant to the transaction fee arrangement. As of January 31, 2013, an additional $7,000 was due Mr. Nunez under this arrangement at which time the transaction fee arrangement was terminated by mutual agreement. On April 26, 2013, $6,007 of the transaction fee due him was credited against a receivable that Mr. Nunez owed the Company and the remaining $993 balance was paid in the form of 435 and 196 shares of common stock at $1.63 and $1.45 per share, respectively.

On June 4, 2013, a major stockholder purchased 50,000 shares of common stock at $0.50 per share in a private transaction and received three-year warrants to purchase an additional 50,000 shares of common stock at $0.50 per share and another 100,000 shares of common stock at $1.00 per share.

On June 28, 2013, the Company sold 13,333 shares of common stock to a stockholder for proceeds of $10,000, or $0.75 per share.

Common Stock Issued in Cancellation of Debt

On January 16, 2013, the Company issued its legal counsel a total of 8,000 shares of common stock in payment for $12,000 in legal services rendered for $1.50 per share.

On February 22, 2013, the Company issued an additional 8,000 shares of common stock to legal counsel in payment of $8,400 in legal services rendered for $1.05 per share.

On June 15, 2013, a stockholder converted a $12,500 principal note, plus $1,299 in accrued interest, into 23,998 shares of common stock at $0.575 per share.