UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

☒     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended July 31, 2015

 

☐    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______ to ______

 

Commission file number 0-27119

 

	SCIVANTA MEDICAL CORPORATION
	(Exact name of registrant as specified in its charter)

 

Nevada		22-2436721
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

215 Morris Avenue, Spring Lake, New Jersey 07762

(Address of principal executive offices)

 

(732) 282-1620

(Issuer’s telephone number)

 

                                                                               

(Former name, former address and former fiscal year, if changed since last report)

 

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 past 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  ☒   No  ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ☒   No  ☐

 

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 definitions of “large accelerated filer,” “accelerated filer,” and smaller reporting company in Rule 12b-2 of the Securities Exchange Act of 1934.

 

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

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes  ☐   No  ☒

 

As of September 16, 2015, there were 6,359,055 shares of the registrant’s common stock, par value $.001 per share, outstanding.

 

 

  

SCIVANTA MEDICAL CORPORATION

 

INDEX TO FORM 10-Q

 

				Page
PART I		FINANCIAL INFORMATION
Item 1.		Financial Statements		1
		Balance Sheets (unaudited) as of July 31, 2015 and October 31, 2014		2
		Statements of Operations (unaudited) for the three months and nine months ended July 31, 2015 and 2014		3
		Statements of Cash Flows (unaudited) for the nine months ended July 31, 2015 and 2014		4
		Notes to the Unaudited Financial Statements		5
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		17
Item 4.		Controls and Procedures		17
PART II		OTHER INFORMATION
Item 1.		Legal Proceedings		18
Item 1A.		Risk Factors		18
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		18
Item 3.		Defaults Upon Senior Securities		18
Item 4.		Mine Safety Disclosures		18
Item 5.		Other Information		18
Item 6.		Exhibits		18
Signatures				19
Index of Exhibits				E-1

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Certain information included in this quarterly report on Form 10-Q and other filings of the registrant under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as information communicated orally or in writing between the dates of such filings, contains or may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

 

Forward-looking statements may include the words “may”, “could”, “estimate”, “intend”, “continue”, “believe”, “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this quarterly report on Form 10-Q. Except as may be required under applicable securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement. You should, however, consult further disclosures we make in future filings of our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Additionally, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 most likely do not apply to our forward-looking statements because we are considered a penny stock issuer.

 

 

  PART I. FINANCIAL INFORMATION

 

Item 1.

Financial Statements

 

The balance sheet as of July 31, 2015 and the related statements of operations for the three and nine months ended July 31, 2015 and 2014 and cash flows for the nine months ended July 31, 2015 and 2014 for Scivanta Medical Corporation (“Scivanta” or the “Company”) included in Item 1, have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted from the following financial statements pursuant to the rules and regulations of the SEC.  In the opinion of management, the accompanying financial statements include all adjustments, which are of a normal and recurring nature, necessary to present fairly our financial position and results of operations. It is suggested that the following financial statements be read in conjunction with the financial statements and notes thereto included in the registrant’s annual report on Form 10-K for the fiscal year ended October 31, 2014.

 

The results of operations for the three and nine months ended July 31, 2015 are not necessarily indicative of the results of the entire fiscal year or for any other period.

 

 

Scivanta Medical Corporation

Balance Sheets

(Unaudited)

 

		July 31, 2015				October 31, 2014
Assets
Current assets:
Cash		$	13,530			$	26,114
Prepaid expenses			2,890				6,673
Total current assets and total assets		$	16,420			$	32,787
Liabilities and Stockholders’ Deficiency
Current liabilities:
Accounts payable		$	99,336			$	101,055
Accounts payable - related party			328,728				211,898
Accrued expenses			100,726				62,144
Convertible debentures			670,913				617,262
Total current liabilities			1,199,703				992,359
Note payable			105,000				105,000
Total liabilities			1,304,703				1,097,359
Commitments
Stockholders' deficiency:
Preferred stock, $.001 par value; 20,000,000 shares authorized; no shares issued			--				--
Common stock, $.001 par value; 500,000,000 shares authorized; 6,359,055 shares issued and outstanding			6,359				6,359
Additional paid-in capital			23,078,199				23,070,589
Accumulated deficit			(24,372,841	)			(24,141,520	)
Total stockholders' deficiency			(1,288,283	)			(1,064,572	)
Total liabilities and stockholders' deficiency		$	16,420			$	32,787

        

The accompanying notes are an integral part of these financial statements.    

 

 

Scivanta Medical Corporation

Statements of Operations

(Unaudited)

 

		Three Months Ended July 31,								Nine Months Ended July 31,
		2015				2014				2015				2014
Revenue		$	--			$	--			$	--			$	--
Operating expenses:
General and administrative			62,829				87,162				176,979				332,721
Gain on settlement of accounts payable			--				--				--				(80,656	)
Loss from operations			(62,829	)			(87,162	)			(176,979	)			(252,065	)
Interest expense			(16,916	)			(23,013	)			(54,342	)			(55,856	)
Net loss		$	(79,745	)		$	(110,175	)		$	(231,321	)		$	(307,921	)
Net loss per common share, basic and diluted		$	(0.01	)		$	(0.02	)		$	(0.04	)		$	(0.05	)
Weighted average number of common shares outstanding, basic and diluted			6,359,055				6,359,055				6,359,055				6,076,995

 

The accompanying notes are an integral part of these financial statements.

    

 

Scivanta Medical Corporation

Statements of Cash Flows

(Unaudited)

 

		Nine Months Ended July 31,
		2015				2014
Cash flows from operating activities:
Net loss		$	(231,321	)		$	(307,921	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation expense			--				32,333
Gain on settlement of accounts payable			--				(80,656	)
Accretion of interest on convertible debentures			11,261				19,783
Changes in operating assets and liabilities:
Prepaid expenses			3,783				8,334
Accounts payable			(1,719	)			(14,780	)
Accounts payable - related party			116,830				102,905
Accrued expenses			38,582				34,519
Net cash used in operating activities			(62,584	)			(205,483	)
Cash flows from financing activities:
Repayment of notes payable			--				(4,615	)
Proceeds from issuance of convertible debentures			50,000				225,000
Net cash provided by financing activities			50,000				220,385
(Decrease) increase in cash			(12,584	)			14,902
Cash - beginning of period			26,114				19,908
Cash – end of period		$	13,530			$	34,810
Supplemental disclosure of cash flow information:
Cash paid for interest		$	--			$	54
Cash paid for income taxes		$	500			$	500
Noncash financing activities:
Issuance of 461,538 shares of common stock as payment of accounts payable – related party		$	--			$	60,000
Issuance of 230,769 shares of common stock as payment of accounts payable		$	--			$	30,000
Issuance of 237,364 shares of common stock as payment of interest due on convertible debentures		$	--			$	32,000
Discount recorded in connection with issuance of convertible debentures		$	7,610			$	36,796

 

The accompanying notes are an integral part of these financial statements.

 

 

Scivanta Medical Corporation

Notes to the Unaudited Financial Statements

 

1.	Basis of Presentation

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred significant recurring operating losses and negative cash flows from operations. The Company had a working capital deficiency of $1,183,283 and an accumulated deficit of $24,372,841 as of July 31, 2015. The Company has not made $625,000 of principal payments due on certain convertible debentures and, as a result, these obligations can be placed in default by the holders. The Company also has no lending relationships with commercial banks and is dependent on the completion of a financing involving the private placement of its securities in order to continue operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

The Company has ceased all development activity related to the Scivanta Cardiac Monitoring System (the “SCMS”) (see Note 2) and does not intend to resume development of the SCMS. The Company expects to return all of the technology related to the SCMS to the licensor and is currently attempting to negotiate an agreement with the licensor related to the return of the SCMS technology.

 

The Company’s strategy for business development is focused on the acquisition, through licensing or purchasing, of medical devices, pharmaceuticals and other proprietary technologies, patented products or services. Any such acquisitions will be contingent upon the Company’s ability to secure the financing required to fund such acquisitions.

 

The Company continues to seek equity and/or debt investors and from time to time engages placement agents to assist the Company in this initiative. Effective November 1, 2011, each of the Company’s officers agreed to waive the annual base salary due to them and each of the Company’s directors agreed to waive the annual retainer and meeting fees due to them until the Company is able to raise sufficient capital that would provide the Company with the ability to pay cash compensation to its officers and directors. The Company has also paid certain obligations with shares of its common stock and has deferred certain other vendor payments until the Company secures sufficient additional debt or equity financing.

 

While the Company is pursuing the opportunities and actions described above, there can be no assurance that it will be successful in its efforts. If the Company is unable to secure additional capital, it will explore other strategic alternatives, including, but not limited to, the sale of the Company. Any additional equity financing may result in substantial dilution to our stockholders.

 

 

2.	Amended and Restated SCMS License Agreement

 

On February 14, 2011, the Company entered into an Amended and Restated Technology License Agreement with The Research Foundation of State University of New York, for and on behalf of the University at Buffalo (the “Foundation”), Donald D. Hickey, M.D. (“Hickey”) and Clas E. Lundgren (“Lundgren”). The Foundation, Hickey and Lundgren shall be collectively referred to herein as the “Licensor”. The Amended and Restated Technology License Agreement, as further amended on March 14, 2013, is referred to herein as the “License Agreement”.

 

Pursuant to the License Agreement, the Licensor granted the Company the exclusive world-wide rights to develop, manufacture and distribute certain proprietary technologies known as the SCMS. A cash payment of $105,000 is payable by the Company to Hickey as follows: (a) $50,000 is due to Hickey on or before a date that is thirty (30) days after the closing of any single financing by the Company of at least $3,000,000 or any series of financings by the Company within a six (6) month period totaling at least $3,000,000; and (b) $55,000 is due to Hickey on or before the date that is thirty (30) days after the first commercial sale of a product utilizing the licensed technology (see Note 4).

 

The License Agreement requires the Company to use commercially reasonable efforts to develop and market the SCMS within certain timeframes, subject to specified exceptions. The Company has not met certain development timeframes and as a result, could be issued a notice of default of the License Agreement by the Licensor. The Company has ceased all development activity related to the SCMS and does not intend to resume development of the SCMS. The Company expects to return all of the technology related to the SCMS to the Licensor and is currently attempting to negotiate an agreement with the Licensor related to the return of the SCMS technology.

 

3.	Related Party Transactions

 

David R. LaVance, the Company’s Chairman, President and Chief Executive Officer, and Thomas S. Gifford, the Company’s Executive Vice President, Chief Financial Officer and Secretary, are principals of Century Capital Associates LLC (“Century Capital”). Effective February 1, 2007, the Company and Century Capital entered into a sublease agreement pursuant to which the Company rents office space approximating 2,000 square feet inside Century Capital’s existing offices. In addition, the Company rents office furniture and other equipment from Century Capital. This agreement has a month to month term that requires sixty days written notice to terminate and a monthly rental fee of $5,000. The Company is responsible for all operating costs associated with the office space, including utilities, maintenance and property taxes.

 

During the three and nine months ended July 31, 2015, the Company was billed $19,057 and $53,750, respectively, pursuant to the terms of the sublease agreement. As of July 31, 2015, the Company owed Century Capital $90,000 for rent due under the sublease agreement, $25,059 for expenses due under the sublease agreement and $213,669 for other expenses, which amounts are presented in accounts payable – related party. During the three and nine months ended July 31, 2014, the Company was billed $16,005 and $50,311, respectively, pursuant to the terms of the sublease agreement.

 

 

4.	Note Payable

 

Pursuant to the License Agreement (see Note 2), a cash payment of $105,000 is payable to Hickey as follows: (a) $50,000 is due to Hickey on or before a date that is thirty (30) days after the closing of any single financing by the Company of at least $3,000,000 or any series of financings by the Company within a six (6) month period totaling at least $3,000,000; and (b) $55,000 is due to Hickey on or before the date that is thirty (30) days after the first commercial sale of a product utilizing the licensed technology. As of July 31, 2015 and October 31, 2014, the Company classified the $105,000 due to Hickey as a non-current note payable.

 

5.	Convertible Debentures

 

February 2007 Convertible Debentures

 

On February 8, 2007, the Company issued 8% convertible debentures, dated February 1, 2007, in an aggregate principal amount of $250,000 to individual investors (the “February 2007 Debentures”). The February 2007 Debentures bear interest at a rate of 8% per annum and originally had a three year term, maturing on January 31, 2010, which was initially extended to January 31, 2012. On January 11, 2012, the Company issued 50,000 shares of common stock as full payment of $50,000 of outstanding principal on certain February 2007 Debentures. The Company has not made payment on the remaining outstanding balances of the February 2007 Debentures and, as a result, such obligations can be placed in default by the holders.

 

For the three and nine months ended July 31, 2015, the Company recorded a total of $4,033 and $11,968, respectively, of interest expense related to the February 2007 Debentures. For the three and nine months ended July 31, 2014, the Company recorded a total of $4,033 and $11,967, respectively, of interest expense related to the February 2007 Debentures. As of July 31, 2015, $23,936 of interest due on the February 2007 Debentures was accrued and is included as a component of accrued expense. As of July 31, 2015 and October 31, 2014, the Company recorded the $200,000 of outstanding principal due on the February 2007 Debentures as a component of current convertible debentures.

 

May 2011 Convertible Debenture

 

On May 20, 2011, the Company issued an 8% convertible debenture in the amount of $100,000 to an institutional investor (the “May 2011 Debenture”). The May 2011 Debenture bears interest at a rate of 8% per annum and originally had a three year term maturing on May 20, 2014. Effective May 20, 2014, the holder agreed to a new maturity date of May 20, 2015. The Company has not made payment on the outstanding balance of the May 2011 Debenture and, as a result, such obligation can be placed in default by the holder.

 

For each of the three and nine months ended July 31, 2015 and 2014, the Company recorded a total of $2,017 and $5,985, respectively, of interest expense related to the May 2011 Debenture. As of July 31, 2015, $17,607 of interest due on the May 2011 Debenture was accrued and is included as a component of accrued expenses. As of July 31, 2015 and October 31, 2014, the Company recorded the $100,000 of outstanding principal due on the May 2011 Debenture as a component of current convertible debentures.

 

 

August 2012 Convertible Debenture

 

On August 15, 2012, the Company issued an 8% convertible debenture in the amount of $100,000 to an institutional investor (the “August 2012 Debenture”). The August 2012 Debenture has a three year term maturing on August 15, 2015 and bears interest at a rate of 8% per annum. As of September 14, 2015, the Company has not made payment on the outstanding balance of the August 2012 Debenture and, as a result, such obligation can be placed in default by the holder.

 

For each of the three and nine months ended July 31, 2015 and 2014, the Company recorded a total of $2,017 and $5,985, respectively, of interest expense related to the August 2012 Debenture. As of July 31, 2015, $15,787 of interest due on the August 2012 Debenture was accrued and is included as a component of accrued expenses. As of July 31, 2015 and October 31, 2014, the Company recorded the $100,000 of outstanding principal due on the August 2012 Debenture as a component of current convertible debentures.

 

December 2013 and April 2014 Convertible Debentures and Warrants

 

On December 12, 2013, the Company issued 10% convertible debentures to two individual investors (the “December 2013 Debentures”) and on April 1, 2014, the Company issued a 10% convertible debenture to one individual investor (the “April 2014 Debenture” and together with the December 2013 Debentures, the “Debentures”). In connection with the issuance of the Debentures, the Company issued warrants (the “Debenture Warrants”) to purchase shares of the Company’s common stock equal to 20% of the aggregate principal amount of the Debentures. The gross proceeds received in connection with this private placement were $225,000. The Debentures have a one year term with principal and interest on the December 2013 Debentures due December 12, 2014 and principal and interest on the April 2014 Debenture due April 1, 2015. The Debentures bear interest at a rate of 10% per annum. The Company has not made payment on the outstanding balances of the Debentures and, as a result, such obligations can be placed in default by the holders.

 

The Company separately accounted for the liability and equity components of the Debentures based upon the relative fair value of the liability and equity components on the date of issuance. As a result, the Company recorded a discount of $36,796 for the Debentures to account for the relative fair value attributable to the Debenture Warrants. The $36,796 debt discount was accreted as interest expense using the effective interest method over the respective one-year terms of the Debentures.

 

For the three and nine months ended July 31, 2015, the Company recorded a total of $5,671 and $24,566 ($7,738 accreted), respectively, of interest expense related to the Debentures. As of July 31, 2015, $34,581 of interest due on the Debentures was accrued and is included as a component of accrued expenses. As of July 31, 2015, there was no remaining unamortized discount on the Debentures. Accordingly, the net carrying value of the Debentures was $225,000, which was recorded as a component of current convertible debentures. For the three and nine months ended July 31, 2014, the Company recorded a total of $14,946 ($9,275 accreted) and $31,865 ($19,783 accreted), respectively, of interest expense related to the Debentures.

 

 

February 2015 Convertible Debenture and Warrant

 

On February 12, 2015, the Company issued a 10% convertible debenture to an individual investor (the “February 2015 Debenture”). In connection with the issuance of the February 2015 Debenture, the Company issued a warrant (the “February 2015 Debenture Warrant”) to purchase shares of its common stock equal to 20% of the aggregate principal amount of the February 2015 Debenture. The gross proceeds received in connection with this private placement were $50,000. The February 2015 Debenture has a one-year term with principal and interest due February 12, 2016. The February 2015 Debenture bears interest at a rate of 10% per annum.

 

The entire principal and accrued interest amount of the February 2015 Debenture is convertible into shares of the Company’s common stock: (a) upon the Company issuing equity securities and/or debt in a transaction or a series of transactions resulting in aggregate gross proceeds to the Company of at least $3,000,000 (a “Qualified Financing”); (b) at the option of the holder, at the maturity date of the February 2015 Debenture; or (c) at the option of the holder, upon a Change in Control of the Company, as defined in the February 2015 Debenture. Upon the occurrence of a Qualified Financing, the February 2015 Debenture is convertible into shares of the Company’s common stock at a conversion price equal to: (i) 80% of the per share price paid by the purchasers of the Company’s common stock in the Qualified Financing; (ii) 80% of the per share conversion price of any instrument convertible into shares of the Company’s common stock, if no shares of the Company’s common stock are issued in the Qualified Financing; or (iii) $0.13, if no shares of the Company’s common stock or instruments convertible into shares of the Company’s common stock are issued in the Qualified Financing. On the maturity date or upon a Change in Control of the Company, the February 2015 Debenture is convertible into shares of the Company’s common stock at $0.13 per share. The quoted market price of the Company’s common stock on February 12, 2015 was $0.10 per share. An aggregate of 384,615 shares of the Company’s common stock can be issued pursuant to the February 2015 Debenture at the current conversion price of $0.13 per share. The Company will use the proceeds received in this private placement for working capital purposes.

 

The February 2015 Debenture Warrant has a three year term and provides the holder the right to purchase shares of the Company’s common stock equal to 20% of the principal amount of the related February 2015 Debenture divided by: (a) 80% of the per share price paid by the purchasers of the Company’s common stock in a Qualified Financing; (b) 80% of the per share conversion price of any instrument convertible into shares of the Company’s common stock issued in a Qualified Financing, if no shares of the Company’s common stock are issued in the Qualified Financing; or (c) $0.13, if no shares of the Company’s common stock or no instruments convertible into shares of the Company’s common stock are issued in a Qualified Financing or if a Qualified Financing is not consummated within one year from the February 2015 Debenture Warrant issuance date. An aggregate of 76,923 shares of the Company’s common stock can be issued under the February 2015 Debenture Warrant at the current exercise price of $0.13 per share. All of the shares of the Company’s common stock underlying the February 2015 Debenture Warrant vest on the earlier of (a) one year from the February 2015 Debenture Warrant issuance date, or (b) the consummation of a Qualified Financing. The exercise price of the February 2015 Debenture Warrant will be subject to adjustment for stock dividends, stock splits, or similar events.

 

 

The Company separately accounted for the liability and equity components of the February 2015 Debenture based upon the relative fair value of the liability and equity components on the date of issuance. As a result, the Company recorded a discount of $7,610 for the February 2015 Debenture to account for the relative fair value attributable to the February 2015 Debenture Warrant. The $7,610 debt discount is being accreted as interest expense using the effective interest method over the one-year term of the February 2015 Debenture.

 

For the three and nine months ended July 31, 2015, the Company recorded a total of $3,178 ($1,918 accreted) and $5,838 ($3,523 accreted), respectively, of interest expense related to the February 2015 Debenture. As of July 31, 2015, $2,315 of interest due on the February 2015 Debenture was accrued and is included as a component of accrued expenses. As of July 31, 2015, the unamortized discount on the February 2015 Debenture was $4,087 and the net carrying value of the Debentures was $45,913, which was recorded as a component of current convertible debentures.

 

6.	Stock-Based Compensation

 

The Company accounts for stock-based payments to employees in accordance with Accounting Standards Codification (“ASC”) 718, “Stock Compensation” (“ASC 718”). All stock-based payments to employees are grants of stock options that are recognized in the statement of operations based on their fair values at the date of grant. For the three and nine months ended July 31, 2015 and 2014, the Company did not record any employee stock-based compensation expense.

 

The Company accounts for stock-based payments to non-employees in accordance with ASC 718 and ASC 505-50, “Equity-Based Payments to Non-Employees.” For the three and nine months ended July 31, 2015, the Company did not record any non-employee stock-based compensation expense. For the three and nine months ended July 31, 2014, the Company recorded non-employee stock-based compensation expense of $0 and $32,333, respectively.

 

7.	Net Loss Per Common Share

 

Basic net loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options and warrants and conversion of convertible debt that are not deemed to be anti-dilutive. The dilutive effect of the outstanding stock options and warrants is computed using the treasury stock method.

 

For the three and nine months ended July 31, 2015, diluted net loss per share did not include the effect of 203,332 shares of common stock issuable upon the exercise of outstanding options, 673,077 shares of common stock issuable upon the exercise of outstanding warrants and 2,782,051 shares of common stock issuable upon the conversion of convertible debt, as their effect would be anti-dilutive.

 

 

For the three and nine months ended July 31, 2014, diluted net loss per share did not include the effect of 206,832 shares of common stock issuable upon the exercise of outstanding options, 596,154 shares of common stock issuable upon the exercise of outstanding warrants and 2,397,436 shares of common stock issuable upon the conversion of convertible debt, as their effect would be anti-dilutive.

 

8.	Stockholders’ Equity

 

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. As of July 31, 2015, options to purchase 120,000 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 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. Effective December 27, 2013, as permitted under the 2007 Equity Incentive Plan, the Company’s board of directors increased the number of shares of common stock that could be awarded under the 2007 Equity Incentive Plan to 814,408 shares. As of July 31, 2015, options to purchase 83,332 shares of the Company’s common stock were outstanding under the 2007 Equity Incentive Plan and up to 731,076 shares of the Company’s common stock remain available for awards under the 2007 Equity Incentive Plan.

 

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 stock options and 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 nine months ended July 31, 2015 is as follows:

		Stock Option Shares				Weighted Average Exercise Price Per Common Share				Aggregate Intrinsic Value
Outstanding at October 31, 2014			206,832			$	1.67			$	--
Granted during the period			--				--				--
Exercised during the period			--				--				--
Expired during the period			(3,500	)		$	0.20
Outstanding at July 31, 2015			203,332			$	1.70			$	--
Exercisable at July 31, 2015			203,332			$	1.70			$	--
Exercisable at October 31, 2014			206,832			$	1.67			$	--

 

Information with respect to stock options outstanding and stock options exercisable as of July 31, 2015 that were granted to employees is as follows:

 

				Stock Options Outstanding												Stock Options Exercisable
Exercise Price				Number of Shares Available Under Outstanding Stock Options				Weighted Average Exercise Price Per Common Share				Weighted Average Remaining Contractual Life (Years)				Number of Shares Available for Purchase Under Outstanding Stock Options				Weighted Average Exercise Price Per Common Share				Weighted Average Remaining Contractual Life (Years)
$	0.80				10,000			$	0.80				0.4				10,000			$	0.80				0.4
$	1.40				83,332			$	1.40				3.1				83,332			$	1.40				3.1
$	2.00				110,000			$	2.00				1.5				110,000			$	2.00				1.5
					203,332			$	1.70				2.1				203,332			$	1.70				2.1

 

 

Warrant to Purchase Common Stock

 

A summary of warrant transactions during the nine months ended July 31, 2015 is as follows:

 

		Warrant Shares				Weighted Average Exercise Price Per Common Share				Aggregate Intrinsic Value
Outstanding at October 31, 2014			596,154			$	0.13			$	--
Issued during the period			76,923			$	0.13
Exercised during the period			--				--
Expired during the period			--				--
Outstanding at July 31, 2015			673,077			$	0.13			$	--
Exercisable at July 31, 2015			596,154			$	0.13			$	--
Exercisable at October 31, 2014			250,000			$	0.13			$	--

 

As of July 31, 2015, the weighted average remaining contractual life for warrants outstanding and for warrants exercisable was 2.3 years.

 

9.	Subsequent Events

 

On September 14, 2015, the Company issued 10% convertible debentures to three individual investors (the “September 2015 Debentures”). In connection with the issuance of the September 2015 Debentures, the Company issued warrants (the “September 2015 Debenture Warrants”) to purchase shares of its common stock equal to 20% of the aggregate principal amount of the September 2015 Debentures. The gross proceeds received in connection with this private placement were $25,000. The September 2015 Debentures have a one-year term with principal and interest due September 14, 2016. The September 2015 Debentures bear interest at a rate of 10% per annum.

 

The entire principal and accrued interest amount of the September 2015 Debentures is convertible into shares of the Company’s common stock: (a) upon a Qualified Financing; (b) at the option of the holder, at the maturity date of the September 2015 Debentures; or (c) at the option of the holder, upon a Change in Control of the Company, as defined in the September 2015 Debentures. Upon the occurrence of a Qualified Financing, the September 2015 Debentures are convertible into shares of the Company’s common stock at a conversion price equal to: (i) 80% of the per share price paid by the purchasers of the Company’s common stock in the Qualified Financing; (ii) 80% of the per share conversion price of any instrument convertible into shares of the Company’s common stock, if no shares of the Company’s common stock are issued in the Qualified Financing; or (iii) $0.065, if no shares of the Company’s common stock or instruments convertible into shares of the Company’s common stock are issued in the Qualified Financing. On the maturity date or upon a Change in Control of the Company, the September 2015 Debentures are convertible into shares of the Company’s common stock at $0.065 per share. The quoted market price of the Company’s common stock on September 11, 2015 was $0.043 per share. An aggregate of 384,615 shares of the Company’s common stock can be issued pursuant to the September 2015 Debentures at the current conversion price of $0.065 per share. The Company will use the proceeds received in this private placement for working capital purposes.

 

The September 2015 Debenture Warrants have a three year term and provides the holder the right to purchase shares of the Company’s common stock equal to 20% of the principal amount of the related September 2015 Debenture divided by: (a) 80% of the per share price paid by the purchasers of the Company’s common stock in a Qualified Financing; (b) 80% of the per share conversion price of any instrument convertible into shares of the Company’s common stock issued in a Qualified Financing, if no shares of the Company’s common stock are issued in the Qualified Financing; or (c) $0.065, if no shares of the Company’s common stock or no instruments convertible into shares of the Company’s common stock are issued in a Qualified Financing or if a Qualified Financing is not consummated within one year from the September 2015 Debenture Warrants issuance date. An aggregate of 76,923 shares of the Company’s common stock can be issued under the September 2015 Debenture Warrants at the current exercise price of $0.065 per share. All of the shares of the Company’s common stock underlying the September 2015 Debenture Warrants vest on the earlier of (a) one year from the September 2015 Debenture Warrants issuance date, or (b) the consummation of a Qualified Financing. The exercise price of the September 2015 Debenture Warrants will be subject to adjustment for stock dividends, stock splits, or similar events.

 

  

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Background

 

Scivanta is a Nevada corporation headquartered in Spring Lake, New Jersey. Scivanta currently does not sell any products or technologies.

 

On November 10, 2006, we acquired the exclusive world-wide rights to develop, manufacture and distribute the SCMS, a minimally invasive two-balloon esophageal catheter system used to monitor cardiac performance. Since the end of fiscal 2009, all development activity related to the SCMS ceased. Scivanta does not intend to resume development of the SCMS and is currently searching for a new technology, product or service to acquire. Scivanta expects to return all of the technology related to the SCMS to the Licensor and is currently attempting to negotiate an agreement with the Licensor related to the return of the SCMS technology.

 

Scivanta is currently operating on a limited basis as it continues to seek additional financing that will allow it to acquire a new technology, product or service. Our business development strategy will depend upon our ability to secure additional financing.

 

In the event that we acquire a new technology, product or service, no assurances can be given that we will have the financial and other resources necessary for us to acquire additional technologies, products or services. In addition, no assurances can be given that any technology, product or service that we acquire as part of our business development strategy will be profitable.

 

 

Critical Accounting Policies and Estimates

 

The discussion and analysis of the Company’s financial condition and results of operations are based upon the interim financial statements contained elsewhere herein, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements required us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to income taxes, contingencies and litigation. We based our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

The critical accounting estimates that we believe affect the more significant judgments and estimates used in preparation of the financial statements contained elsewhere herein are described in the Management’s Discussion and Analysis of Financial Condition and Results of Operations and in the Notes to the Financial Statements included in the Company’s annual report on Form 10-K for the fiscal year ended October 31, 2014. There have been no material changes to the critical accounting policies.

 

Results of Operations

 

Research and Development. There was no research and development expense recorded for each of the three and nine months ended July 31, 2015 and 2014.

 

The amount of research and development expense to be incurred by us during the fiscal year ending October 31, 2015 will depend upon our ability to secure additional capital through an equity and/or debt financing or corporate partnerships. In the event that we are able to acquire a new technology, product or service and are able to obtain additional capital to fund such acquisition, we would expect research and development expenses for the fiscal year ending October 31, 2015 to significantly increase. Otherwise, we would expect research and development expenses for the fiscal year ending October 31, 2015 to remain at the current level.

 

General and Administrative. For the three months ended July 31, 2015, general and administrative expenses were $62,829, as compared to $87,162 for the three months ended July 31, 2014. The $24,333, or 28%, decrease in general and administrative expenses for the three months ended July 31, 2015 was primarily due to a $19,483 decrease in travel costs and a $4,290 decrease in legal fees, each related to our fiscal year 2014 fundraising efforts and evaluation of potential acquisitions.

 

For the nine months ended July 31, 2015, general and administrative expenses were $176,979, as compared to $332,721 for the nine months ended July 31, 2014. The $155,742, or 47%, decrease in general and administrative expenses for the nine months ended July 31, 2015 was primarily due to a $51,016 decrease in legal fees, a $35,000 decrease in consulting fees, a $33,863 decrease in travel costs and a $32,333 decrease in stock based compensation expense to consultants, each related to our fiscal year 2014 fundraising efforts and evaluation of potential acquisitions.

 

 

The amount of general and administrative expense to be incurred by us during the fiscal year ending October 31, 2015 will depend upon our ability to secure additional capital through an equity and/or debt financing or corporate partnerships. In the event that we are able to obtain additional capital sufficient to fund the acquisition of a new product, technology or service, we would expect general and administrative expenses for the fiscal year ending October 31, 2015 to increase as we build the administrative infrastructure necessary to support the development or sale of a new product, technology or service. If we are unable to obtain additional capital sufficient to fund the acquisition of a new product, technology or service, we would expect general and administrative expenses for the fiscal year ending October 31, 2015 to decrease as we continue to reduce our operating activities.

 

Gain on Settlement of Accounts Payable. For the nine months ended July 31, 2014, we recognized a gain on the settlement of accounts payable related to certain vendor obligations of $80,656.

 

Interest Expense. For the three months ended July 31, 2015, interest expense was $16,916, as compared to $23,013 for the three months ended July 31, 2014. The $6,097, or 26%, decrease in interest expense for the three months ended July 31, 2015 was due to a $7,357 decrease in accreted interest on debt discount, offset by a $1,260 increase in interest expense, related to convertible debentures.

 

For the nine months ended July 31, 2015, interest expense was $54,342, as compared to $55,856 for the nine months ended July 31, 2014. The $1,514, or 3%, decrease in interest expense for the nine months ended July 31, 2015 was primarily due to a $8,522 decrease in accreted interest on debt discount, offset by a $7,061 increase in interest expense, related to convertible debentures.

 

Net Loss. For the three months ended July 31, 2015, our net loss was $79,745, or $0.01 per share (basic and diluted), as compared to a net loss of $110,175, or $0.02 per share (basic and diluted), for the three months ended July 31, 2014. The $30,430, or 28%, decrease in net loss for the three months ended July 31, 2015 was due to a $24,333 decrease in general and administrative expenses and a $6,097 decrease in interest expense.

 

For the nine months ended July 31, 2015, our net loss was $231,321, or $0.04 per share (basic and diluted), as compared to a net loss of $307,921, or $0.05 per share (basic and diluted), for the nine months ended July 31, 2014. The $76,600, or 25%, decrease in net loss for the nine months ended July 31, 2015 was due to a $155,742 decrease in general and administrative expenses and a $1,514 decrease in interest expense, offset by a $80,656 decrease in the gain on the settlement of accounts payable.

 

Liquidity and Capital Resources

 

As of July 31, 2015, we had a working capital deficiency of $1,183,283 and cash on hand of $13,530. The $12,584 decrease in cash on hand from October 31, 2014 was primarily due to our continuing operating expenses, offset by the receipt of $50,000 of gross proceeds from a convertible debenture issued on February 12, 2015.

 

 

During the past several years, we generally sustained recurring losses and negative cash flows from operations. We currently do not generate any revenue from operations. Our operations most recently have been funded through a combination of the sale of our convertible debentures and common stock and through the issuance of our common stock in exchange for services.

 

On September 14, 2015, we issued 10% convertible debentures to three individual investors. The gross proceeds received in connection with this private placement were $25,000.

 

As of September 16, 2015, our cash position was approximately $37,800. Without any additional financing, we will only be able to continue our administrative operations, on a limited basis, for approximately five months from the filing date of this quarterly report on Form 10-Q. Effective November 1, 2011, Scivanta’s officers agreed to waive the annual base salary due to them and Scivanta’s directors agreed to waive the annual retainer and meeting fees due to them until Scivanta is able to raise sufficient capital that would provide Scivanta with the ability to pay cash compensation to its officers and directors. Scivanta has also deferred certain vendor payments until it secures sufficient additional financing. We did not make $625,000 of principal payments due on certain convertible debentures and, as a result, these obligations can be placed in default by the holders. Our independent registered public accounting firm included an emphasis of a matter paragraph in its report included in our annual report on Form 10-K for the fiscal year ended October 31, 2014, which expressed substantial doubt about our ability to continue as a going concern. Our financial statements included herein do not include any adjustments related to this uncertainty.

 

We currently do not have any lending relationships with commercial banks and do not anticipate establishing such relationships in the foreseeable future due to our limited operations and assets. We believe that our focus should be on obtaining additional capital through the private placement of our securities. We are pursuing potential equity and/or debt investors and have from time to time engaged placement agents to assist us in this initiative. While we are pursuing the opportunities and actions described above, there can be no assurance that we will be successful in our efforts. If we are unable to secure additional capital, we will explore other strategic alternatives, including, but not limited to, the sale of Scivanta. Any additional equity financing may result in substantial dilution to our stockholders.

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

Scivanta is a smaller reporting company and is therefore not required to provide this information.

 

Item 4.

Controls and Procedures

 

As required by Rule 13a-15 under the Exchange Act, as of the end of the period covered by this quarterly report on Form 10-Q, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of the Company’s management, including the Company’s President and Chief Executive Officer and the Company’s Executive Vice President, Chief Financial Officer and Secretary, who concluded that the Company’s disclosure controls and procedures are effective. There has been no change in the Company’s internal control over financial reporting during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

PART II. OTHER INFORMATION

 

Item 1.

Legal Proceedings

 

None.

 

Item 1A.

Risk Factors

 

Scivanta is a smaller reporting company and is therefore not required to provide this information.

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

Other than unregistered sales of equity securities previously reported in the Company’s annual report on Form 10-K, or quarterly reports on Form 10-Q, or current reports on Form 8-K, there were no unregistered sales of equity securities by the Company during the period ended July 31, 2015.

 

Item 3.

Defaults Upon Senior Securities

 

Not Applicable.

 

Item 4.

Mine Safety Disclosures

 

Not Applicable.

 

Item 5.

Other Information

 

None.

 

Item 6.

Exhibits

 

See Index of Exhibits Commencing on Page E-1.

 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

DATE:	SCIVANTA MEDICAL CORPORATION
September 17, 2015	By:	/s/ David R. LaVance
		David R. LaVance
		President and Chief Executive Officer

 

September 17, 2015	By:	/s/ Thomas S. Gifford
		Thomas S. Gifford
		Executive Vice President, Chief Financial Officer and Secretary

 

 

INDEX OF EXHIBITS

 

Exhibit
Number		Description of Exhibit
3.1		Amended and Restated Articles of Incorporation of Scivanta Medical Corporation, (the “Company”), which was filed in the Office of the Secretary of State of the State of Nevada on April 22, 2013 (incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on April 22, 2013).
3.2		Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s quarterly report on Form 10-QSB for the quarter ended January 31, 2006, filed with the SEC on January 29, 2007).
4.1		Specimen stock certificate representing the Company’s common stock (incorporated by reference to Exhibit 4.1 to the Company’s quarterly report on Form 10-QSB for the quarter ended January 31, 2006, filed with the SEC on January 29, 2007).
4.2		Form of Convertible Debenture, dated as of February 1, 2007, issued to the following persons and in the following amounts:  Jesse H. Austin, III ($50,000); Andrew O. Whiteman and Gwen C. Whiteman, JTWROS ($25,000); Jack W. Cumming ($25,000); Scott C. Withrow ($25,000); Terrence McQuade ($25,000); Steven J. Olsen ($25,000); and Marc G. Robinson and Joshua Goldfarb ($25,000) (incorporated by reference to Exhibit 4.8 to the Company’s quarterly report on Form 10-QSB for the quarter ended January 31, 2007, filed with the SEC on March 14, 2007).
4.3		Form of Addendum to Convertible Debenture, dated as of January 31, 2010, issued to the persons set forth in Exhibit 4.2 (incorporated by reference to Exhibit 4.3 to the Company’s annual report on Form 10-K for the fiscal year ended October 31, 2009, filed with the SEC on January 29, 2010).
4.4		Form of Addendum to Convertible Debenture, dated as of January 31, 2012, issued to certain persons set forth in Exhibit 4.2 (incorporated by reference to Exhibit 4.4 to the Company’s quarterly report on Form 10-Q for the quarter ended January 31, 2012, filed with the SEC on March 16, 2012).
4.5		8% Convertible Debenture, dated as of May 20, 2011, in the principal amount of $100,000 issued to Zanett Opportunity Fund, Ltd. (incorporated by reference to Exhibit 4.4 to the Company’s quarterly report on Form 10-Q for the quarter ended April 30, 2011, filed with the SEC on June 14, 2011).
4.6		8% Convertible Debenture, dated as of August 15, 2012, in the principal amount of $100,000 issued to Zanett Opportunity Fund, Ltd. (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed with the SEC on August 21, 2012).
4.7		Form of 10% Convertible Debenture issued on December 12, 2013 for $150,000, April 1, 2014 for $75,000, February 12, 2015 for $50,000 and September 14, 2015 for $25,000 (incorporated by reference to Exhibit 4.1 to the Company’s current reports on Form 8-K filed with the SEC on December 17, 2013).

 

 

Exhibit
Number		Description of Exhibit
10.1		The Company’s 2002 Equity Incentive Plan, adopted and effective January 1, 2002 (incorporated by reference to Exhibit B of the Company’s definitive proxy statement, filed with the SEC on June 10, 2002).
10.2		Sublease Agreement, dated February 1, 2007, between the Company and Century Capital Associates LLC (incorporated by reference to Exhibit 10.14 to the Company’s quarterly report on Form 10-QSB for the quarter ended January 31, 2007, filed with the SEC on March 14, 2007).
10.3		Amended and Restated Technology License Agreement between the Company and The Research Foundation of State University of New York for and on behalf of University of Buffalo, and Donald D. Hickey, M.D. and Clas E. Lundgren dated February 14, 2011 (incorporated by reference to Exhibit 10.8 to the Company’s annual report on Form 10-K for the fiscal year ended October 31, 2010, filed with the SEC on February 15, 2011).
10.3.1		First Addendum to the Amended and Restated Technology License Agreement between the Company and The Research Foundation for State University of New York for and on behalf of University of Buffalo, and Donald D. Hickey, M.D. and Clas E. Lundgren dated March 14, 2013 (incorporated by reference to Exhibit 10.3.1 to the Company’s quarterly report on Form 10-Q for the quarter ended January 31, 2013, filed with the SEC on March 18, 2013).
10.4		Stock Option Agreement and Notice of Grant, dated February 5, 2007, pursuant to which David R. LaVance was granted a non-qualified stock option to purchase up to 500,000 shares of common stock of the Company (incorporated by reference to Exhibit 10.16 to the Company’s quarterly report on Form 10-QSB for the quarter ended January 31, 2007, filed with the SEC on March 14, 2007).
10.5		Stock Option Agreement and Notice of Grant, dated February 5, 2007, pursuant to which Thomas S. Gifford was granted a non-qualified stock option to purchase up to 500,000 shares of common stock of the Company (incorporated by reference to Exhibit 10.17 to the Company’s quarterly report on Form 10-QSB for the quarter ended January 31, 2007, filed with the SEC on March 14, 2007).
10.6		Company’s 2007 Equity Incentive Plan, adopted and effective May 31, 2007 (incorporated by reference to Appendix to the Company’s definitive proxy statement, filed with the SEC on April 27, 2007).
10.7		Stock Option Agreement and Notice of Grant, dated January 1, 2008, pursuant to which David R. LaVance was granted a non-qualified stock option to purchase up to 100,000 shares of common stock of the Company (incorporated by reference to Exhibit 10.21 to the Company’s current report on Form 8-K filed with the SEC on January 2, 2008).
10.8		Stock Option Agreement and Notice of Grant, dated January 1, 2008, pursuant to which Thomas S. Gifford was granted a non-qualified stock option to purchase up to 100,000 shares of common stock of the Company (incorporated by reference to Exhibit 10.22 to the Company’s current report on Form 8-K filed with the SEC on January 2, 2008).

 

 

Exhibit
Number		Description of Exhibit
10.9		Executive Employment Agreement, dated as of January 1, 2008, between the Company and David R. LaVance (incorporated by reference to Exhibit 10.26 to the Company’s current report on Form 8-K filed with the SEC on January 2, 2008).
10.10		Executive Employment Agreement, dated as of January 1, 2008, between the Company and Thomas S. Gifford (incorporated by reference to Exhibit 10.27 to the Company’s current report on Form 8-K filed with the SEC on January 2, 2008).
10.11		Amendment No. 1 dated as of June 18, 2010 to the Executive Employment Agreement, dated as of January 1, 2008, between the Company and David R. LaVance (incorporated by reference to Exhibit 10.27 to the Company’s quarterly report on Form 10-Q for the quarter ended April 30, 2010, filed with the SEC on June 21, 2010).
10.12		Amendment No. 1 dated as of June 18, 2010 to the Executive Employment Agreement, dated as of January 1, 2008, between the Company and Thomas S. Gifford (incorporated by reference to Exhibit 10.28 to the Company’s quarterly report on Form 10-Q for the quarter ended April 30, 2010, filed with the SEC on June 21, 2010).
10.13		Amendment No. 2 dated as of January 3, 2012 to the Executive Employment Agreement, dated as of January 1, 2008, between the Company and David R. LaVance (incorporated by reference to Exhibit 10.23 to the Company’s annual report on Form 10-KSB for the fiscal year ended October 31, 2011, filed with the SEC on January 30, 2012).
10.14		Amendment No. 2 dated as of January 3, 2012 to the Executive Employment Agreement, dated as of January 1, 2008, between the Company and Thomas S. Gifford (incorporated by reference to Exhibit 10.24 to the Company’s annual report on Form 10-KSB for the fiscal year ended October 31, 2011, filed with the SEC on January 30, 2012).
10.15		Stock Option Agreement and Notice of Grant, dated January 21, 2009, pursuant to which David R. LaVance was granted a non-qualified stock option to purchase up to 25,000 shares of common stock of the Company (incorporated by reference to Exhibit 10.32 to the Company’s annual report on Form 10-KSB for the fiscal year ended October 31, 2008, filed with the SEC on January 29, 2009).
10.16		Stock Option Agreement and Notice of Grant, dated January 21, 2009, pursuant to which Thomas S. Gifford was granted a non-qualified stock option to purchase up to 25,000 shares of common stock of the Company (incorporated by reference to Exhibit 10.33 to the Company’s annual report on Form 10-KSB for the fiscal year ended October 31, 2008, filed with the SEC on January 29, 2009).

 

 

Exhibit
Number		Description of Exhibit
31.1		Section 302 Certification of Chief Executive Officer.
31.2		Section 302 Certification of Chief Financial Officer.
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
101*		The following materials from the Company’s quarterly report on Form 10-Q for the period ended July 31, 2015, formatted in Extensible Business Reporting Language (XBRL):  (i) balance sheets; (ii) statements of operations; (iii) statements of cash flows; and (iv) notes to the financial statements.

 

* Pursuant to Rule 406T of Regulation S-T, the interactive data files included as Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

 

 

E-4