8.           Stockholders’ Equity

 

Issuance of Common Stock as Payment of Certain Obligations

On January 23, 2013, the Company issued an aggregate of 588,236 shares of its common stock to its two executive officers (294,118 shares of common stock were issued to each of Mr. LaVance and Mr. Gifford), as settlement of $225,627 of accrued compensation due to them and other related costs.

 

On January 23, 2013, the Company issued an aggregate of 50,000 shares of its common stock to its current independent directors and a former independent director as settlement of $17,000 of fees owed to them.

 

On January 23, 2013, the Company issued 279,412 shares of its common stock to Century Capital as settlement of $95,000 of office rent owed by Scivanta through January 31, 2013 ($80,000 accrued as of October 31, 2012).

 

On March 22, 2013, the Company issued 36,477 shares of its common stock to a third party service provider as payment of $12,534 of offering costs ($9,125 accrued as of October 31, 2012) related to certain private placements of the Company’s securities.

 

On April 8, 2013, the Company issued 33,750 shares of its common stock to a third party service provider as payment of $4,725 of consulting fees.

 

Issuance of Common Stock as Payment of Interest Due on Convertible Debentures

 

On January 23, 2013, the Company issued an aggregate of 32,000 shares of its common stock to the holders of the 8% convertible debentures dated February 1, 2007 (the “February 2007 Debentures”) in satisfaction of $16,000 of interest due for the period February 1, 2011 through January 31, 2012 (see Note 9).

 

On January 23, 2013, the Company issued 16,000 shares of its common stock to the holder of the 8% convertible debenture dated May 20, 2011 (the “May 2011 Debenture”) in satisfaction of $8,000 of interest due for the period May 20, 2011 through May 19, 2012 (see Note 9).

 

On April 16, 2013, the Company issued an aggregate of 145,454 shares of its common stock to the holders of the February 2007 Debentures  in satisfaction of $16,000 of interest due for the period February 1, 2012 through January 31, 2013 (see Note 9).

 

Sale of Common Stock

 

On January 25, 2013, the Company sold to an individual investor, 454,545 shares of its common stock for an aggregate purchase price of $50,000, or $0.11 per share.  The Company did not incur any offering costs in connection with this private placement.

 

On March 22, 2013, the Company sold to an individual investor, 454,545 shares of its common stock for an aggregate purchase price of $50,000, or $0.11 per share.  The Company incurred offering costs of $5,000 in connection with this private placement.

 

On April 16, 2013, the Company sold to an individual investor, 227,274 shares of its common stock for an aggregate purchase price of $25,000, or $0.11 per share.  The Company did not incur any offering costs in connection with this private placement.

 

Stock Option Plans

 

The Company currently has two stock option plans in place:  the 2002 Equity Incentive Plan and the 2007 Equity Incentive Plan (collectively, the “Equity Incentive Plans”).  The 2002 Equity Incentive Plan was approved by the stockholders on July 5, 2002.  The aggregate number of shares of common stock which could have been awarded under the 2002 Equity Incentive Plan was 200,000 shares.  As of October 31, 2013, options to purchase 147,000 shares of the Company’s common stock were outstanding under the 2002 Equity Incentive Plan.  As a result of the adoption of the Company’s 2007 Equity Incentive Plan, no further awards are permitted under the 2002 Equity Incentive Plan.

 

On May 31, 2007, the stockholders approved the Company’s 2007 Equity Incentive Plan.  The 2007 Equity Incentive Plan was placed into effect in order to encourage and enable employees and directors of the Company to acquire or increase their holdings of the Company’s common stock and to promote these individual’s interests in the Company thereby enhancing the efficiency, soundness, profitability, growth and stockholder value of the Company.  The 2007 Equity Incentive Plan provides for awards in the form of restricted shares, incentive stock options, non-qualified stock options and stock appreciation rights.  The original aggregate number of shares of common stock which could be awarded under the 2007 Equity Incentive Plan was 300,000 shares, subject to adjustment as provided in the 2007 Equity Incentive Plan.  As of October 31, 2013, options to purchase 94,432 shares of the Company’s common stock were outstanding under the 2007 Equity Incentive Plan and up to 205,568 shares of the Company’s common stock could be awarded under the 2007 Equity Incentive Plan.  As permitted under the 2007 Equity Incentive Plan, the Company’s board of directors increased, effective December 27, 2013, the number of shares of common stock that could be awarded under the 2007 Equity Incentive Plan to 814,408 shares.

 

Stock option awards under the Equity Incentive Plans were granted at prices as determined by the Company’s compensation committee, but such prices were not less than the fair market value of the Company's common stock on the date of grant.  Stock options granted and outstanding include only non-qualified options.  These non-qualified options vest over a period of up to five years and have a maximum term of ten years from the date of grant.

 

A summary of stock option transactions for employees and directors under the Equity Incentive Plans during the fiscal years ended October 31, 2013 and 2012 is as follows:

 

No stock options were granted during the fiscal years ended October 31, 2013 or 2012.

 

Information with respect to outstanding options and options exercisable as of October 31, 2013 that were granted to employees is as follows:

 

Warrants to Purchase Common Stock

 

A summary of warrant transactions during the fiscal years ended October 31, 2013 and 2012 is as follows:

 

Warrants issued by the Company contain exercise prices as determined by the Company’s board of directors, but such exercise prices were not less than the market value of the Company's common stock on the date of issuance.  Warrants issued may vest over a period of up to five years and have a maximum term of ten years from the date of issuance.

The weighted average remaining contractual life of the warrants outstanding and exercisable at October 31, 2013 is six months.