12.       SUBSEQUENT EVENT

On September 6, 2017, the compensation committee of the Company re-priced certain issued and outstanding stock options to purchase in the aggregate 2,029,600 shares of Company common stock for all of the current officers, directors and employees of the Company along with certain consultants (the”Re-Priced Options”) pursuant to the authority granted to the compensation committee by the Board of Directors of the Company.  The new exercise price of the Re-Priced Options is $0.67, the closing sales price of the Company’s common stock on September 6, 2017. 

All other terms of the previously granted Re-Priced Options remain the same, including without limitation, the number of shares underlying the options granted, the vesting periods of the options, and the expiration dates of the options.

The Company expects to record additional stock-based compensation expense resulting from the incremental value of the fair value of the Re-Priced Options compared to the fair value of the original options immediately prior to the re-pricing, in the fourth quarter of the fiscal year ended October 31, 2017.  The Company has not yet determined the amount of this non-cash charge.