4.         PATENT ACQUISITION OBLIGATION

In November 2013, we incurred a patent acquisition obligation due no later than November 2017 related to the acquisition of patents.  The payment due in November 2017 was payable at the option of the Company in cash or common stock.  We recorded interest expense of approximately $228,000 and $520,000, respectively, for the years ended October 31, 2017 and 2016, for the accretion of interest on patent acquisition obligation. 

            On March 27, 2017, the Company issued 947,606 shares of common stock in satisfaction of the obligation.  The carrying value of the patent acquisition obligation at the date of extinguishment was approximately $4,400,000.  The fair value of the shares of common stock issued to satisfy the obligation on the date of extinguishment was approximately $2,843,000, resulting in the recognition of a gain on the debt extinguishment of approximately $1,548,000.