Annual report pursuant to Section 13 and 15(d)

COMMITMENTS AND CONTINGENCIES

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COMMITMENTS AND CONTINGENCIES
12 Months Ended
Oct. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]

6.         COMMITMENTS AND CONTINGENCIES


Leases


We lease approximately 2,000 square feet of office space at 3150 Almaden Expressway, San Jose, California (our principal executive offices) from an unrelated party pursuant to a lease that expires September 30, 2019.  Our base rent is approximately $4,000 per month and the lease provides for annual increases of approximately 3% and an escalation clause for increases in certain operating costs.  We also lease approximately 3,000 square feet of office space at 12100 Wilshire Boulevard, Los Angeles, California (our former executive offices) from an unrelated party pursuant to a lease that expires May 31, 2019.  Our base rent is approximately $11,000 per month and the lease provides for annual increases of approximately 3% and an escalation clause for increases in certain operating costs. 


During the fourth quarter of fiscal 2017 we vacated the office space at 12100 Wilshire Boulevard, Los Angeles, California and as of October 31, 2018 we have accrued an expense of approximately $31,000 related to future rents of these facilities.  As of August 1, 2018, we have subleased these facilities.  As of October 31, 2018, our non-cancelable operating lease commitments for the year ending October 31, 2019 was approximately $129,000.  Rent expense for the years ended October 31, 2018 and 2017, was approximately $114,000 and $229,000, respectively. 


Litigation Matters


Other than below and lawsuits we bring to enforce our patent rights we are not a party to any material pending legal proceedings other than that which arise in the ordinary course of business.  We believe that any liability that may ultimately result from the resolution of these matters will not, individually or in the aggregate, have a material adverse effect on our financial position or results of operations.


On November 5, 2018, a putative shareholder derivative complaint was filed in the Court of Chancery of the State of Delaware, captioned Howland v. Kumar et al., C.A. No. 2018-0804-KSJM, that alleges claims for breach of fiduciary duty and unjust enrichment.  The complaint named as defendants certain of the Company’s current and former officers and directors, and the Company is named solely as a nominal defendant.  The complaint seeks, on behalf of the Company, a declaration that the defendant officers and directors breached their fiduciary duties, unspecified damages, certain changes to the Company’s internal procedures, and an award of the plaintiff’s attorneys’ fees and costs.  The defendants moved to dismiss the complaint on November 29, 2018 and the parties are currently engaged in briefing the motion. Due to the early nature of the complaint and that the complaint does not specify a dollar amount of damages, we cannot make a reasonable estimate of potential losses at this time.


Collaborative Agreement with Moffitt


            As of October 31, 2018, our commitments under the collaborative agreement with Moffitt for the years ending October 31, 2019 and 2020 were approximately $455,000 and $228,000, respectively.