UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
DC 20549





FORM
10-K





(Mark
One)





x
              ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934.For
      the fiscal year ended October 31,
2009




OR




 ̈
              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
                        
                        (I.R.S.
      Employer Identification No.)incorporation
      or organization)215
      Morris Avenue, Spring Lake, New Jersey
                        
                        07762(Address
      of principal executive offices)
                        
                        (Zip
      Code)




Registrant’s
telephone number, including area code:      (732)
282-1620





Securities
registered under Section 12(b) of the Act:   None





Securities
registered under Section 12(g) of the Act:





Common Stock, par value
$0.001


(Title of
class)





Indicate by check mark if the
Registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act.   Yes  ̈        No   x





Indicate by check mark if the
Registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act.   Yes  ̈         No   x





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 preceding 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    x
        No  ̈




Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of the Registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K.   x





Indicate by check mark whether theRegistrant 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 Exchange
Act.  (Check one):




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





Indicate by check mark whether the
Registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).  Yes o          No   x





As of
January 27, 2010, the aggregate fair value of the Registrant’s common stock held
by non-affiliates was approximately $1,155,000.





As of
January 27, 2010, there were 26,981,210 shares of the Registrant’s common stock
outstanding.




DOCUMENTS INCORPORATED BY
REFERENCE




None





SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS




Certain information included in this
Annual Report on Form 10-K 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.  Such statements are subject to
certain risks, trends and uncertainties that could cause actual results to
differ materially from expected results.  Among these risks, trends
and uncertainties are economic conditions generally and in the industries in
which the Registrant may participate; competition within the Registrant’s chosen
industries, including competition from much larger competitors; technological
advances; available capital; regulatory approvals; and failure by the Registrant
to successfully acquire, develop or market products and form new business
relationships.




In some cases, forward-looking
statements can be identified by terminology such as “may,” “will,” “should,”
“could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,”
“potential” or “continue” or the negative of such terms or other comparable
terminology.  Although the Registrant believes that the expectations
reflected in the forward-looking statements contained herein are reasonable, the
Registrant cannot guarantee future results, levels of activity, performance or
achievements.  Moreover, neither the Registrant, nor any other person
assumes responsibility for the accuracy and completeness of such
statements.  The Registrant is under no duty to update any of the
forward-looking statements contained herein after the date this Annual Report on
Form 10-K is submitted to the Securities and Exchange Commission (the
“SEC”).


ii


SCIVANTA
MEDICAL CORPORATION




INDEX TO FORM
10-K




PART IItem
      1.
                          Business
                          1Item
      1A.
                          Risk
      Factors
                          13Item
      1B.
                          Unresolved
      Staff Comments
                          13Item
      2.
                          Properties
                          13Item
      3.
                          Legal
      Proceedings
                          13Item
      4.
                          Submission
      of Matters to a Vote of Security Holders
                          13PART IIItem
      5.
                          Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
                          14Item
      6.
                          Selected
      Financial Data
                          15Item
      7.
                          Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                          15Item
      7A.
                          Quantitative
      and Qualitative Disclosures About Market Risk
                          21Item
      8.
                          Financial
      Statements and Supplementary Data
                          21Item
      9.
                          Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
                          21Item
      9A.
                          Controls
      and Procedures
                          21Item
      9B.
                          Other
      Information
                          22PART IIIItem
      10.
                          Directors,
      Executive Officers and Corporate Governance
                          23Item
      11.
                          Executive
      Compensation
                          27Item
      12.
                          Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                          30Item
      13.
                          Certain
      Relationships and Related Transactions, and Director
      Independence
                          35Item
      14.
                          Principal
      Accountant Fees and Services
                          35PART IVItem
      15.
                          Exhibits
      and Financial Statement Schedules
                          36SIGNATURES
                          37




iii


PART
I




Item
1.            Business




General




Scivanta
Medical Corporation (“Scivanta”), originally incorporated in New Jersey on
November 29, 1982, is currently a Nevada corporation headquartered in Spring
Lake, New Jersey.  Scivanta ceased selling all products during the
fiscal year ended October 31, 2004 and has not had any revenue from the sale of
products since the second quarter of 2003.




On
November 10, 2006, we acquired the exclusive world-wide rights to develop,
manufacture and distribute certain proprietary technologies known as the
Scivanta Cardiac Monitoring System (the “SCMS”), formerly known as the Hickey
Cardiac Monitoring System (HCMS), a minimally invasive two-balloon esophageal
catheter system used to monitor cardiac performance.  The SCMS is
currently in the development stage.  See “Item 1. Business – Strategy
for Business Development - SCMS.”




Strategy
for Business Development




SCMS




The SCMS
will provide the primary measurements of cardiac performance, including left
atrial pressure, which is a crucial measurement in monitoring cardiac challenged
patients.  The essential hardware, software and catheter components
for the SCMS have been completed.  Scivanta currently has a fully
assembled SCMS device that has been used in initial clinical
trials.  The two major items remaining in the development of the SCMS
are the completion of the clinical trials and the design and engineering of the
production model of the SCMS.




We
conducted an initial clinical trial for the SCMS in Buffalo, New York at Kaleida
Health/Millard Fillmore Hospital.  This initial clinical trial
commenced in October 2008 and was completed in March 2009.  The
initial clinical trial was designed to obtain data concerning the safety and
efficacy of the SCMS by comparing data obtained from the SCMS with that
generated during a left heart catheterization performed by a cardiologist in the
cardiac catheterization unit.  In particular, the initial clinical
trial focused on comparing the mean left atrial pressure measurements detected
with the SCMS to left ventricular end-diastolic pressure readings measured in a
simultaneous left heart catheterization procedure.  These measurements
of cardiac performance are used by physicians in the critical evaluation of a
patient’s cardiac health.




In five
patients enrolled in the initial clinical trial, the mean left atrial pressure
as determined by the SCMS matched the left ventricular end-diastolic pressure as
determined by the left heart catheterization procedure within 0.1mmHg to
0.5mmHg, which translates into a maximum deviation of 3.3% when compared to the
left heart catheterization data.  These results for the SCMS are
considered by the Company to be highly accurate.  Two additional
patients enrolled in the initial clinical trial, but the data collected was
incomplete and therefore not considered relevant.  There were no
adverse events reported during the course of the initial clinical
trial.




1




Subject
to the receipt of additional funding, we expect to test a minimum of 40
additional patients in clinical trials at Kaleida Health/Millard Fillmore
Hospital and at three other locations consisting of Wellstar Health System in
Marietta, Georgia; Southeastern Heart and Vascular Center in Greensboro, North
Carolina; and Christiana Care Health Services in Newark,
Delaware.  These multi-center clinical trials are expected to take
approximately two months to complete from the date they commence.  The
length of time and the number of patients tested in the clinical trials could
change depending on the rate of patient recruitment and the data results
produced.




The design and engineering of the
production model will run concurrent with the clinical trials.  In
addition, we must also receive the appropriate regulatory approvals before the
SCMS can be marketed in the United States or abroad.  Scivanta will
submit its 510(k) premarket notification for the SCMS to the United States Food
and Drug Administration (“FDA”) once it has obtained sufficient clinical data
for the SCMS.  Upon completion of the SCMS production model, we will
also seek European Union market approval (CE mark).




We will
not be able to complete the clinical trials or the design and engineering of the
production model of the SCMS without obtaining additional cash through an equity
and/or debt financing or through corporate partnerships.  We are
aggressively pursuing potential investors and have engaged several placement
agents to assist in this endeavor.  No assurances can be given that we
will be able to obtain sufficient capital to finish the development of the SCMS
through any corporate partnerships and/or through equity and/or debt
financing.  In addition, no assurances can be given that if we
successfully develop and market the SCMS, such product will become
profitable.




Depending
upon our ability to secure additional financing, the length of the clinical
trials and the length of the FDA’s review, Scivanta estimates that it could have
510(k) premarket notification clearance from the FDA for the SCMS by the end of
September 2010, which will allow Scivanta to commence sales of the SCMS in the
United States shortly thereafter.  Scivanta estimates that it will
commence European sales within three months following the commencement of sales
in the United States.




Other
Potential Product Acquisitions




In
addition to developing the SCMS, our strategy for business development, once
sufficient funding is obtained, will focus on the acquisition, through licensing
or purchasing, of technologies or products that are sold or are capable of being
sold in a specialty or niche market.  Technologies or products of
interest include, but are not limited to, medical devices, pharmaceuticals and
other proprietary technologies or patented products.  Specialty or
niche-market technologies or products, in comparison to commodities, generally
offer greater operating margins.  These products are distributed
through specialty distributor networks or manufacturer representatives to the
original equipment manufacturer market, supplier and provider markets and to the
general marketplace.




Annual sales, if any, of the
prospective technologies and products that we will evaluate are generally less
than $5 million.  We believe that these technologies or products
generally are not attractive to larger companies because they do not represent
opportunities for revenues and earnings that would be material to those
companies.  We will consider technologies and products that generally
experience lower sales or lack of development because of inadequate distribution
channels, lack of companion products or insufficient capital.


2




Below is a listing of criteria we
utilize in identifying and evaluating potential technology or product
acquisitions:




·
            Whether
      the technology or product is a specialty or niche-market product which is
      distributed through specialty
distributors.




·
            Whether
      the technology or product is unique or
patented.




·
            Whether
      the technology or product has, or is capable of achieving, an attractive
      gross margin, usually in excess of
35%.




·
            Whether
      the prospective seller is receptive to receiving equity as part of the
      purchase price.




·
            Whether
      the market for the technology or product is expanding, but not to such a
      degree as to attract larger manufacturers or result in the technology or
      product achieving commodity status.




·
            Whether
      we can access marketing channels to market and distribute the technology
      or product.




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




Principal
Product




The SCMS is a minimally invasive cardiac
monitoring device that will provide the primary measurements of cardiac
performance, including left atrial pressure, which is a crucial measurement in
monitoring cardiac challenged patients.  The SCMS uses a two-balloon
esophageal catheter, which is attached to a specialized computer and monitor
containing proprietary software.The SCMS is
designed to provide continuous, long-term cardiac performance monitoring in a
cost effective manner with minimal risk to the patient.




The SCMS
two balloon catheter is inserted into the esophagus and capitalizes on the
anatomic relationship of the left atrium and aortic arch proximate to the
esophagus.  Once positioned, the catheter’s balloons are
inflated.  The wall motion in the left atrium and the aorta generates
pressure changes in the respective balloons.  The electronic
monitoring system captures and processes signals from these pressure changes as
well as data from an electrocardiogram, phonocardiogram and automated blood
pressure cuff.  The monitoring system then translates this raw data
into relevant, real-time clinical measurements utilizing a proprietary software
algorithm.


3


The SCMS
provides the following cardiac measurements:




·
            mean
      left atrial pressure




·
            left
      ventricular contractility during isovolumic
  contraction




·
            cardiac
      output by pulse contour




·
            arterial
      pulse wave velocity




·
            left
      atrial transmural pressure




·
            pleural
      pressure




·
            systolic
      time interval




The
current standard of care for monitoring critically ill cardiac challenged
patients suffering from various cardiovascular conditions is an invasive
procedure known as pulmonary artery catheterization.  That procedure
requires an incision into a patient’s neck or groin and the insertion of a
pulmonary artery catheter, commonly known as a Swan-Ganz catheter, into the
right atrium and ventricle of the heart, and then into a pulmonary
artery.  That procedure must be performed within a hospital’s cardiac
catheterization lab or intensive care unit.




Unlike
the Swan-Ganz catheter, the SCMS does not require a catheterization lab or
intensive care unit to be inserted into a patient, providing Scivanta with an
expanded market opportunity when compared to the Swan-Ganz.  We
believe that the SCMS will be used throughout a hospital including surgical
suites, emergency departments and post-surgical settings.  We also
believe that the SCMS will ultimately be used on an outpatient basis within a
physician’s office and/or surgical centers. In addition, the SCMS also provides
clinical measurements of left ventricular contractility, left atrial transmural
pressure and pleural pressure, which the Swan–Ganz does not
provide.  We believe that the measure of contractility during
isovolumic contraction is an important advance offered by the SCMS, and is a
distinct advantage over the Swan-Ganz catheter.  Measurement of left
ventricular contractility is potentially a new standard for monitoring the
treatment of congestive heart failure.





For
additional information on the status of the SCMS development and clinical
trials, see “Item 1. Business – Strategy for Business Development -
SCMS.”




Scivanta
Agreements




SCMS
License Agreement




On
November 10, 2006, we entered into a technology license agreement (the “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 License Agreement was amended on June 29, 2007,
October 24, 2008, January 6, 2009 and October 29, 2009.


4


Pursuant
to the License Agreement, the Licensor granted Scivanta 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.  The term of the License Agreement commenced on November
10, 2006 and ends on the later of (a) the expiration date of the last to expire
patent right related to the SCMS, which is currently May 1, 2027, or (b)
thirteen years from the sale of the first licensed product on a country by
country basis.




Scivanta
agreed to make an initial payment of $264,300 which was subsequently reduced to
$262,957 pursuant to the first amendment to the License Agreement dated June 29,
2007.  Scivanta paid $40,900 on November 16, 2006, $80,000 on October
31, 2007 and was required to pay $142,057 on November 1,
2008.  Pursuant to the second amendment to the License Agreement dated
October 24, 2008, the $142,057 payment was restructured as
follows:  (a) $39,101 was paid in cash to Hickey on October 24, 2008;
(b) $34,567 was paid in cash to Lundgren on October 24, 2008; (c) $33,822 was
paid by issuing 187,900 shares of our common stock to the Foundation on October
28, 2008; and (d) $34,567 was paid in cash to Lundgren on February 4,
2009.




Further,
pursuant to the second amendment to the License Agreement dated October 24,
2008, any milestone payments that Scivanta was required or may have been
required to pay to the Licensor under the original terms of the License
Agreement were eliminated in exchange for the following:  (a) a
one-time cash payment by Scivanta to Hickey of $158,438 due on the date that was
thirty days after the first commercial sale of a product utilizing the licensed
technology, but no later than December 31, 2009; (b) the issuance of 224,960
shares of our common stock to the Foundation on October 28, 2008;
(c)  the issuance of 162,500 shares of our common stock to Hickey on
October 28, 2008 and (d) the issuance of 426,560 shares of our common stock to
Lundgren on October 28, 2008.




Pursuant
to the fourth amendment to the License Agreement, the payment of $158,438 that
was due to Hickey no later than December 31, 2009 was restructured as
follows:  (a) a cash payment of $50,000 is due to Hickey on or before
February 28, 2010 and (b) a cash payment of $108,438 is due to Hickey on the
date that is thirty (30) days after the first commercial sale of a product
utilizing the licensed technology, but no later than October 31,
2010.




Pursuant
to the License Agreement, Scivanta is required to pay the Licensor a royalty of
5% on annual net sales, as defined in the License Agreement, subject to certain
reductions as detailed in the License Agreement.  Beginning with the
first full year of sales of the SCMS in the United States and for two years
thereafter, Scivanta is required to pay an annual minimum royalty of $100,000 to
the Licensor against which any royalty on net sales paid in the same calendar
year for sales in the United States will be credited.  Further,
beginning with the first full year of sales of the SCMS outside the United
States and for two years thereafter, Scivanta is required to pay an annual
minimum royalty of $100,000 to the Licensor against which any royalty on net
sales paid in the same calendar year for sales outside the United States will be
credited.  The Company is also required to pay the Licensor 25% of all
sublicensing revenue, as defined in the License Agreement, received by the
Company in connection with the Company’s sublicense of the rights granted to the
Company under the License Agreement.




The
License Agreement also requires Scivanta to use commercially reasonable efforts
to commercialize and market the SCMS within certain timeframes, subject to
specified exceptions, as detailed in the License Agreement, the third amendment
to the License Agreement dated January 6, 2009 and the fourth amendment to the
License Agreement dated October 29, 2009.  Further, the License
Agreement contains standard provisions regarding indemnification, termination
and patent prosecution.


5




Subcontractor
Agreement and NYSTAR Contract




On June
27, 2007, Scivanta and the Foundation entered into a subcontractor
agreement.  Pursuant to this agreement, the Foundation contracted
Scivanta to develop the software and hardware components of the SCMS outlined in
the contract awarded by the New York State Office of Science Technology and
Academic Research (“NYSTAR”) to the Foundation and the Foundation’s company
partner, Ethox International, Inc. (“Ethox”), on December 1, 2005 (the “NYSTAR
Contract”).  On November 30, 2008, the NYSTAR Contract
expired.




Pursuant
to the first amendment to the License Agreement dated June 29, 2007, the
Licensor and Ethox entered into a non-exclusive manufacturing license agreement,
dated June 29, 2007, whereby Ethox was granted the right to manufacture the
catheter component of the SCMS for Scivanta.




As a
result of the subcontractor agreement, the first amendment to the License
Agreement and the non-exclusive license agreement between the Licensor and
Ethox, the development of the SCMS was partially funded through the NYSTAR
Contract.  Pursuant to the terms of the NYSTAR Contract, $937,500 of
funding was available for the development of the SCMS with the State of New York
providing $750,000 and Ethox providing $187,500 of the funding.  Ethox
and Hickey also provided $535,500 and $27,000, respectively, of in-kind
contributions.




Pursuant
to the development agreement between Scivanta and Ethox dated June 29, 2007,
Scivanta provided Ethox with the $187,500 of cash required under the NYSTAR
Contract while Ethox provided the $562,500 of in-kind contributions (primarily
contributed services).  The funding received from the NYSTAR Contract
partially supported the development of:  the catheter component of the
SCMS by Ethox; the software component of the SCMS by Applied Sciences Group,
Inc. (“ASG”); the hardware component of the SCMS by Sparton Medical Systems
(“Sparton”) and the related clinical trials.  Under the terms of the
subcontractor agreement between the Foundation and Scivanta, the Foundation,
utilizing the $937,500 of funding provided under the NYSTAR Contract, reimbursed
Scivanta $928,580 of allowable expenditures incurred by Scivanta in connection
with the development of the software and hardware components of the SCMS and
related clinical trials.




As of
November 30, 2008, no further amounts were available for reimbursement to
Scivanta under the NYSTAR Contract.  For the fiscal years ended
October 31, 2009 and 2008, Scivanta submitted to the Foundation for
reimbursement $19,110 and $855,987, respectively, of expenses related to the
software and hardware development of the SCMS and the related clinical trials,
which were recorded by Scivanta as a reduction to research and development
expenses.




6


Ethox
Development Agreement




On June
29, 2007, Scivanta and Ethox entered into a development agreement whereby Ethox
will provide Scivanta engineering and development support for the catheter
component of the SCMS in exchange for the rights to manufacture the component
upon regulatory approval and commercialization of the SCMS.  Pursuant
to the development agreement, Scivanta paid $187,500 to Ethox in connection with
the NYSTAR Contract in $46,875 installments on each of September 12, 2007,
February 13, 2008, June 16, 2008 and August 27, 2008.  These payments
were recognized as research and development expenses on a pro-rata basis as the
SCMS was developed pursuant to the NYSTAR Contract and were fully recognized as
of October 31, 2008.  During the fiscal year ended October 31, 2008,
Scivanta recorded $169,690 of research and development expenses related to the
NYSTAR Contract payment.




The
development agreement had a two year term that expired on June 29,
2009.  The services provided by Ethox included:  (1) the
management of project costs and schedule, (2) the development of system
functional specifications based on marketing inputs, (3) the development of
disposable catheter specifications to achieve functional requirements, (4) the
manufacturing of disposable catheters in accordance with applicable requirements
for clinical trials, and (5) the provision of regulatory resources for the
management of clinical submissions for marketing approval from the
FDA.  Pursuant to the development agreement, Scivanta is responsible
for the selection and costs of all raw materials and for the packaging
design.  During the term of the development agreement and for a period
of twelve months thereafter, Ethox will not participate in the design,
development, creation or production of a double balloon catheter to be used as
part of a cardiac monitoring system for any party other than
Scivanta.  The development agreement also contained standard
provisions regarding indemnification and termination.  Scivanta and
Ethox are currently negotiating an extension of the development
agreement.  Ethox is continuing to provide services under the
development agreement during the negotiations.




Terms for
the manufacturing of the catheter component of the SCMS are contained in a
supply agreement which will be entered into by Scivanta and Ethox upon
regulatory approval of the SCMS.  The supply agreement will have a
four year term commencing on the date of the first commercial production of the
catheter component of the SCMS, and thereafter shall renew on an annual basis
unless terminated by either party in accordance with the supply
agreement.  The supply agreement will also contain a minimum order
requirement, a pricing schedule and will provide for an additional payment to
Ethox of up to $535,000, which will be paid to Ethox over the term of the supply
agreement on a per unit basis based on the minimum number of units that Scivanta
is required to order under the supply agreement.




During
the fiscal years ended October 31, 2009 and 2008, Scivanta submitted to Ethox
for reimbursement $0 and $119,874, respectively, of expenses related to the
software and hardware development of the SCMS, which amounts were recorded by
Scivanta as a reduction to research and development expenses.




ASG
Development Agreement




On July
2, 2007, Scivanta entered into a development agreement with
ASG.  Pursuant to the terms of this agreement, ASG will provide
software engineering services to Scivanta on the continuing development of the
SCMS.  Scivanta can terminate the agreement at any time upon written
notification.  For the fiscal years ended October 31, 2009 and 2008,
Scivanta recorded $103,569 and $374,540, respectively, of research and
development expenses for services and materials provided under this development
agreement.


7




Sparton
Development Agreement




On August
22, 2007, Scivanta and Sparton, a business group of Sparton Electronics Florida,
Inc., entered into a development agreement whereby Sparton provided Scivanta
engineering and development support for the hardware component of the
SCMS.  On October 1, 2008, Scivanta terminated the development
agreement with Sparton.  For the fiscal year ended October 31, 2008,
Scivanta recorded $608,630 of research and development expenses for services and
materials provided under the development agreement.




Rivertek
Service Agreement




On
February 1, 2008, Scivanta and Rivertek Medical Systems, Inc. (“Rivertek”)
entered into a service agreement, which was amended on April 28, 2008, whereby
Rivertek provided Scivanta with project management services related to the
development of the SCMS.  The service agreement was amended and
restated on February 5, 2009.  Pursuant to the amended and restated
service agreement, Rivertek will assist Scivanta in the development of the
hardware component of the SCMS and will continue to assist in the management of
the development of the software and catheter components of the
SCMS.  The amended and restated service agreement will expire on
December 31, 2010 and can be terminated earlier by either party upon three days
written notice.  The services rendered to Scivanta provided under this
contract are to be billed on a time and material basis.




On April
28, 2008, Scivanta issued a warrant to purchase 125,000 shares of its common
stock to Rivertek as partial consideration for services rendered under the
service agreement.  During the fiscal years ended October 31, 2009 and
2008, Scivanta recorded $110,638 and $143,115 respectively, of research and
development expenses for services and materials provided under both the service
agreement and the amended and restated service agreement.




Patents
and Copyrights




The SCMS
is the subject of 12 United States patents and corresponding patents in major
international markets, including Canada, the European Union, Japan and
India.  The patents cover the important facets of the SCMS, including
catheter design and construction, catheter positioning, monitor design,
algorithms and balloon inflation techniques.  The United States
patents include United States Patent and Trademark Office numbers: 5,048,532;
5,181,517; 5,263,485; 5,398,692; 5,551,439; 5,570,671; 5,697,375; 5,921,935;
6,120,442; 6,238,349; 6,432,059; and 7,527,599.  In addition, the
software that converts the pressure signals into useful clinical information is
the subject of copyright.




Manufacturing
and Principal Suppliers




We currently intend to outsource the
manufacturing of the components for the SCMS.  We have entered into a
development agreement with Ethox whereby Ethox is assisting in the development
of the catheter component of the SCMS and will manufacture the catheter
component of the SCMS.  See “Item 1. Business - Scivanta Agreements -
Ethox Development Agreement.”  No other formal manufacturing
agreements have been entered into at this time.




8


Distribution,
Sales and Marketing




We currently do not maintain a
dedicated sales force and currently do not sell any products.  We
currently intend to outsource the distribution and sales requirements related to
the SCMS.  No formal distribution or sales agreements have been
entered into at this time.




Competition




There are
four primary types of devices that are used to measure cardiac performance and
it is anticipated that such devices would compete with the SCMS for market
share.  The four types are:  (a) pulmonary artery catheter
(e.g. Swan-Ganz catheter); (b) trans-esophageal echocardiography; (c) pulsed
doppler sonography; and (d) impedance cardiography.




The
pulmonary artery catheter, otherwise known as the Swan-Ganz catheter, is the
established tool for monitoring cardiac performance and left atrial
pressure.  The Swan-Ganz catheter is inserted through a vein into the
right atrium and ventricle of the heart, and threaded into the pulmonary
artery.  Due to the invasive nature of the Swan-Ganz catheter, it must
be inserted within a hospital’s catheterization lab or intensive care unit and
is not recommended for long-term cardiac monitoring.  The major
distributor of the Swan-Ganz catheter is Edwards Lifesciences
Corporation.





Trans-esophageal
echocardiography, pulsed doppler sonography and impedance cardiography are all
considered to be non-invasive or minimally invasive methods to measure cardiac
performance.  None of these products have been as successful as the
Swan-Ganz catheter primarily due to the fact that these devices cannot provide
cardiac measurements as precisely as a Swan-Ganz catheter.





Trans-esophageal
echocardiography devices measure the aortic diameter and the movement of red
blood cells to determine the velocity and direction of blood flow to calculate
stroke volume and thus cardiac performance.  Trans-esophageal
echocardiography is thought to generate inconsistent results, is dependent on
technician skill and technique, is limited in the kinds of patients it can
address and is time intensive.  Trans-esophageal echocardiography is
an imaging modality, and, accordingly, is not generally used as a device for
monitoring cardiac performance.  Major distributors of
echocardiography devices include Siemens Medical Solutions Inc. and Philips
Medical Systems.





Pulsed
doppler sonography utilizing a doppler transducer have been utilized to generate
echocardiographic images from an extracorporeal position in close proximity to
the heart.  This method also has not met with widespread clinical
acceptance for reasons of accuracy and clinical value of the data
generated.  This device is not a monitoring technology, but rather an
imaging technology.  Arrow International, Inc. markets this type of
device.





Impedance
cardiography uses the heart’s electrical characteristics in order to measure the
heart’s mechanical, or blood flow, characteristics.  The procedure is
inaccurate in many circumstances, such as in patients with septic shock and/or
severe aortic valve regurgitation and/or irregular heartbeats.  In
addition, measurements can be inaccurate if the patient moves excessively while
monitoring.  CardioDynamics International Corporation, which was
recently acquired by SonoSite, Inc., markets this type of
device.


9


Government
Regulation




As a developer and possible future
distributor of medical devices, we are subject to regulation by, among other
governmental entities, the FDA, and the corresponding agencies of the states and
foreign countries in which we may sell its products.  These
regulations govern the introduction of new medical devices, the observance of
certain standards with respect to the manufacture, testing and labeling of such
devices, the maintenance of certain records, the tracking of devices, and other
matters. These regulations could have a material impact on our future operations
in the event we successfully develop the SCMS and implement our strategy for
business development and acquire or develop additional medical devices and
related products.




All medical device manufacturing
establishments are required to be registered with the FDA.  Similarly,
all categories of medical devices marketed by a company in the United States are
required to be listed.  This listing information must be updated
pursuant to FDA regulations.  The FDA can take regulatory action
against a company that does not provide or update its registration and listing
information.  Pursuant to the Food, Drug and Cosmetic Act (the “FDC
Act”), medical devices intended for human use are classified into three
categories, Classes I, II and III, on the basis of the controls deemed necessary
by the FDA to reasonably assure their safety and effectiveness.  Class
I devices are subject to general controls (for example, labeling, pre-market
notification and adherence to good manufacturing practice regulations) and Class
II devices are subject to general and special controls (for example, performance
standards, post-market surveillance, patient registries, and FDA
guidelines).  Generally, Class III devices are those which must
receive pre-market approval (“PMA”) from the FDA to ensure their safety and
effectiveness (for example, life-sustaining, life-supporting and implantable
devices, or new devices which have not been found substantially equivalent to
legally marketed devices).




Some Class I devices and most Class II
devices require pre-market notification (510(k)) clearance pursuant to Section
510(k) of the FDC Act.  Most Class III devices are required to have an
approved PMA application.  Obtaining PMA approval can take up to
several years or more and involve preclinical studies and clinical
testing.  In contrast, the process of obtaining a 510(k) premarket
notification clearance typically requires the submission of substantially less
data and generally involves a shorter review period.  A 510(k)
premarket notification clearance indicates that the FDA agrees with an
applicant’s determination that the product for which clearance has been sought
is substantially equivalent in terms of safety and effectiveness to another
medical device that has been previously marketed, but does not indicate that the
product is safe and effective.




In addition to requiring clearance or
approval for new products, the FDA may require clearance or approval prior to
marketing products that are modifications of existing products.  FDA
regulations provide that new 510(k) premarket notification clearances are
required when, among other things, there is a major change or modification in
the intended use of the device or a change or modification to a legally marketed
device that could significantly affect its safety or
effectiveness.  The developer and/or manufacturer is expected to make
the initial determination as to whether a proposed change to a cleared device or
to its intended use is of a kind that would necessitate the filing of a new
510(k) premarket notification.


10


In order
to conduct clinical trials of an uncleared or unapproved device, companies
generally are required to comply with the FDA’s Investigational Device
Exemptions regulations.  For significant risk devices, the
Investigational Device Exemptions regulations require FDA approval of an
investigational device before a clinical study may begin.  In its
approval letter for significant risk investigational device studies, the agency
may limit the number of patients that may be treated with the device and/or the
number of institutions at which the device may be used.  Device
studies subject to the Investigational Device Exemption regulations, including
both significant risk and non-significant risk device studies, are subject to
various restrictions imposed by the FDA.  Patients must give informed
consent to be treated with an investigational device.  The
institutional review board of each institution where a study is being conducted
must also approve the clinical study.  The device generally may not be
advertised or otherwise promoted.  Unexpected adverse experiences must
be reported to the FDA.  The company sponsoring the investigation must
ensure that the investigation is being conducted in accordance with the
Investigational Device Exemptions regulations.




Pursuant
to the FDA’s Good Manufacturing Practices under the Quality System Regulations,
a medical device manufacturer must manufacture products and maintain records in
a prescribed manner with respect to manufacturing, testing and control
activities.  Further, the manufacturer, distributor and/or owner of a
medical device are required to comply with FDA requirements for labeling and
promotion of its medical devices.  For example, the FDA prohibits
cleared or approved devices from being marketed or promoted for uncleared or
unapproved uses.  The medical device reporting regulations require
that a company provide information to the FDA whenever there is evidence to
reasonably suggest that one of the company’s devices may have caused or
contributed to a death or serious injury, or that there has occurred a
malfunction that would be likely to cause or contribute to a death or serious
injury if the malfunction were to recur.  Additionally, the FDA
imposes other requirements on medical device manufacturers, including reporting
and record keeping requirements for device corrections and removals
(recalls).




Medical
device manufacturers and distributors are generally subject to periodic
inspections by the FDA.  If the FDA determines that a company is not
in compliance with applicable laws and regulations, it can, among other things,
issue a warning letter apprising the company of violative conduct, detain or
seize products, issue a recall, enjoin future violations and assess civil and
criminal penalties against the company, its officers or its
employees.  In addition, it is possible that clearances or approvals
could be withdrawn in certain circumstances.  Failure to comply with
regulatory requirements or any adverse regulatory action could have a material
adverse effect on our future business, financial condition and results of
operations.




Medical
device laws and regulations are also in effect in many of the countries in which
we may conduct business outside the United States.  These range from
comprehensive device approval requirements for certain medical device products
to simple requests for product data or certifications.  The number and
scope of these requirements are increasing.  Medical device laws and
regulations are also in effect in many of the states in which we may conduct
business in the future.  State and foreign medical device laws and
regulations may have a material impact on us.  In addition,
international sales of certain medical devices manufactured in the United
States, but not cleared or approved by the FDA for distribution in the United
States, are subject to the FDA export requirements and policies, including a
policy whereby we provide a statement to the FDA certifying that the product to
be exported meets certain criteria and FDA issues a certificate to facilitate
device export.


11




Federal,
state and foreign laws and regulations regarding the manufacture, sale and
distribution of medical devices are subject to future changes.  For
example, Congress enacted the Medical Device User Fee and Modernization Act of
2002, which included several significant amendments to the prior law governing
medical devices.  Additionally, the FDA made significant changes to
its Good Manufacturing Practices under the Quality System Regulations in 1996
and may make changes to other regulations as well.  We cannot predict
what impact, if any, such changes might have on our future business; however,
such changes could have a material impact on us and our business, financial
condition and operating results.




If the
FDA does not grant us a 510(k) premarket notification clearance for the SCMS, we
would be required to apply for a PMA from the FDA which could significantly
increase the amount of time required to receive the FDA’s approval to market the
SCMS.  No assurance can be given that the FDA will ultimately approve
the SCMS for sale. See “Item 1. Business – Strategy for Business Development -
SCMS.”




When offering for sale medical devices,
we may also have to comply with federal and state anti-kickback and other
healthcare fraud and abuse laws.  Moreover, approval may be required
for a medical device by comparable governmental regulatory authorities in
foreign countries prior to the commencement of clinical trials and subsequent
marketing of such medical device in those countries.  The approval
procedure varies from country to country, and the time required may be longer or
shorter than that required for FDA approval.




The regulatory policies of the FDA and
other regulatory bodies may change and additional governmental regulations may
be enacted which could prevent or delay regulatory approval of the products we
may distribute in the future.  We cannot predict the likelihood,
nature or extent of adverse governmental regulation that might arise from future
legislative or administrative action, within the United States or
abroad.




Insurance




We
maintain insurance in such amounts and against such risks as we deem prudent,
although no assurance can be given that such insurance will be sufficient under
all circumstances to protect us against significant claims for
damages.  The occurrence of a significant event not fully-insured
could materially and adversely affect our business, financial condition and
results of operations.  Moreover, no assurance can be given that we
will be able to maintain adequate insurance in the future at commercially
reasonable rates or on acceptable terms.




Employees




We currently have three full-time
employees, including David R. LaVance, President and Chief Executive Officer,
and Thomas S. Gifford, Executive Vice President, Chief Financial Officer and
Secretary.  We have not experienced any work stoppages to date and we
believe that our relationship with these employees is good.


12


Item
1A.         Risk
Factors




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




Item
1B.         Unresolved Staff
Comments




None.




Item
2.            Properties




Scivanta’s principal office is located
at 215 Morris Avenue, Spring Lake, New Jersey 07762.  Scivanta rents
approximately 2,000 square feet of office space at this location from Century
Capital Associates LLC (“Century Capital”) pursuant to a sublease
agreement.  David R. LaVance, Scivanta’s Chairman, President and Chief
Executive Officer, and Thomas S. Gifford, the Scivanta’s Executive Vice
President, Chief Financial Officer and Secretary, are principals of Century
Capital.   This sublease agreement has a month to month term that
requires sixty days written notice to terminate and a monthly rental fee of
$5,000.  Scivanta is responsible for all operating costs associated
with the office space, including utilities, maintenance and property
taxes.




Item
3.            Legal
Proceedings




None.




Item
4.            Submission of Matters to a
Vote of Security Holders




No matters were submitted to a vote of
the Scivanta’s stockholders during the fourth quarter of fiscal
2009.




13




PART II




Item 5.
              Market for
      Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity
Securities




Our
common stock trades on the NASDAQ OTC Bulletin Board under the ticker symbol
“SCVM.”  Since secondary market activity for shares of our common
stock has been limited and sporadic, such quotations may not actually reflect
the price or prices at which purchasers and sellers would currently be willing
to purchase or sell such shares.




The following table shows the range of
high and low closing bid prices for our common stock for the period commencing
November 1, 2007 through October 31, 2009 as reported by the OTC Bulletin
Board.  These quotations represent prices between dealers and may not
include retail markups, markdowns or commissions and may not necessarily
represent actual transactions.




Year
      Ended October 31, 2009
                      
                      High
                      
                      
                      LowFirst
      Quarter
                      
                      $
                      0.22
                      
                      
                      $
                      0.10Second
      Quarter
                      
                      
                      0.18
                      
                      
                      
                      0.10Third
      Quarter
                      
                      
                      0.19
                      
                      
                      
                      0.07Fourth
      Quarter
                      
                      
                      0.12
                      
                      
                      
                      0.07Year
      Ended October 31, 2008
                      
                      High
                      
                      
                      LowFirst
      Quarter
                      
                      $
                      0.15
                      
                      
                      $
                      0.09Second
      Quarter
                      
                      
                      0.16
                      
                      
                      
                      0.10Third
      Quarter
                      
                      
                      0.17
                      
                      
                      
                      0.12Fourth
      Quarter
                      
                      
                      0.23
                      
                      
                      
                      0.07





The
NASDAQ OTC Bulletin Board is generally considered to be a less active and
efficient market than the NASDAQ Global Market, the NASDAQ Capital Market or any
national exchange and will not provide investors with the liquidity that the
NASDAQ Global Market, the NASDAQ Capital Market or a national exchange would
offer.  As of January 27, 2010, the following were market makers for
our common stock:  Mercer, Bokert, Buckman and Reid, Inc., Natixis
Bleichroeder LLC, Domestic Securities, Inc., Hudson Securities, Inc. and Knight
Equity Markets, L.P.




Stockholders




As of
January 27, 2010, the approximate number of registered holders of our common
stock was 430; the number of issued and outstanding shares of our common stock
was 26,981,210; and there were 1,496,750 shares of common stock subject to
outstanding warrants, 2,537,000 shares of common stock subject to outstanding
stock options, and 1,041,667 shares of common stock subject to outstanding
convertible debentures.


14


Dividends




It is
anticipated that cash dividends will not be declared on our common stock in the
foreseeable future.  Our dividend policy is subject to the discretion
of our board of directors and depends upon a number of factors, including
operating results, financial condition and general business
conditions.  Holders of our common stock are entitled to receive
dividends as, if and when declared by our board of directors out of funds
legally available therefor.  We may pay cash dividends if net income
available to stockholders fully funds the proposed dividends, and the expected
rate of earnings retention is consistent with capital needs, asset quality and
overall financial condition.




Sales
of Unregistered Securities for the Fiscal Year Ended October 31,
2009




There
were no sales of unregistered securities during the fiscal year ended October
31, 2009, other than those set forth below or otherwise reported on Forms 10-Q
and/or 8-K filed by Scivanta during the fiscal year ended October 31,
2009.





Repurchases
of Securities




We did
not repurchase any securities within the fourth quarter of the fiscal year
covered by this report.




Item 6.
            Selected Financial
      Data




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




Item 7.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operation




We have
provided below information about Scivanta’s financial condition and results of
operations for the fiscal years ended October 31, 2009 and 2008.  This
information should be read in conjunction with Scivanta’s audited financial
statements for the fiscal years ended October 31, 2009 and 2008 and the related
notes thereto, which begin on page F-1 of this report.




Background




Scivanta
is a Nevada corporation headquartered in Spring Lake, New
Jersey.  Scivanta ceased selling all products during the fiscal year
ended October 31, 2004 and has not had any revenue from the sale of products
since the second quarter of 2003.




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.  The SCMS will
provide the primary measurements of cardiac performance, including left atrial
pressure, which is a crucial measurement in monitoring cardiac challenged
patients.  See “Item 1. Business – Strategy for Business Development -
SCMS.”




15


Critical
Accounting Policies




The
discussion and analysis of our financial condition is based upon the financial
statements contained elsewhere herein, which have been prepared in accordance
with U.S. generally accepted accounting principles.  The preparation
of these financial statements required us to make estimates and judgments that
affect the reported amounts of assets, liabilities, expenses, and related
disclosure of contingent assets and liabilities.  On an on-going
basis, we evaluate our estimates, including those related to bad debts, income
taxes, contingencies and litigation.  Scivanta based its 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.




We
believe the following critical accounting policies affect the more significant
judgments and estimates used in preparation of the financial statements
contained elsewhere herein.




Income
Taxes




Scivanta
accounts for income taxes under Accounting Standard Codification (“ASC”) 740,
“Income Taxes” (“ASC 740”).  ASC 740 requires that we recognize a
current tax liability or asset for current taxes payable or refundable and a
deferred tax liability or asset for the estimated future tax effects of
temporary differences and carryforwards to the extent they are
realizable.  We record a valuation allowance to reduce our deferred
tax assets to the amount that is more likely than not to be
realized.  While Scivanta has considered future taxable income and
ongoing prudent and feasible tax planning strategies in assessing the need for
the valuation allowance, in the event we were to determine that we would be able
to realize the deferred tax assets in the future in excess of the net recorded
amount, an adjustment to the deferred tax asset would increase income in the
period such determination was made.  Likewise, deferred tax assets are
reduced by a valuation allowance, when in our opinion, it is more likely than
not that some portion or all of the deferred tax asset will not be
realized.




Stock
Based Compensation




Scivanta
accounts for stock-based payments to employees in accordance with 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.


Scivanta
accounts for stock-based payments to non-employees in accordance with ASC 718
and Topic 505-50, “Equity-Based Payments to Non-Employees.”   All
stock-based payments to non-employees are issuances of warrants that are
recognized in the statement of operations based on the value of the vested
portion of the warrant issuance as measured at its then-current fair value as of
each financial reporting date.


16


Scivanta
calculates the fair value of option grants and warrant issuances utilizing the
Black-Scholes pricing model.  The amount of stock-based compensation
recognized during a period is based on the value of the portion of the awards
that are ultimately expected to vest.  ASC 718 requires forfeitures to
be estimated at the time stock options are granted and warrants are issued and
revised, if necessary, in subsequent periods if actual forfeitures differ from
those estimates.  The term “forfeitures” is distinct from
“cancellations” or expirations” and represents only the unvested portion of the
surrendered stock option or warrant.  Scivanta estimates forfeiture
rates for all unvested awards when calculating the expense for the
period.  In estimating the forfeiture rate, Scivanta monitors both
stock option and warrant exercises as well as employee and non-employee
termination patterns.




The
resulting stock-based compensation expense for both employee and non-employee
awards is generally recognized on a straight-line basis over the requisite
service period of the award.





Recent
Accounting Pronouncements Applicable to Scivanta




Effective
November 1, 2008, Scivanta adopted ASC 820, "Fair Value Measurements and
Disclosures” (“ASC 820”).  This guidance establishes a new framework
for measuring fair value and expands related disclosures.  This
framework does not require any new fair value measurements, but provides
guidance on how to measure fair value by providing a fair value hierarchy used
to classify the source of the information.  Effective April 1, 2009,
the FASB amended ASC 820 in relation to determining fair value when the volume
and level of activity for an asset or liability have significantly decreased and
identifying transactions that are not orderly.  The adoption of ASC
820 did not have a significant impact on Scivanta’s financial position or
results of operations.





In June
2009, the FASB established the FASB Accounting Standards Codification, or
the  Codification, which on July 1, 2009 became the single
official source of authoritative, nongovernmental generally accepted accounting
principles, superseding all existing non-SEC accounting and reporting standards.
The Codification does not change U.S. generally accepted accounting principles
but instead reorganizes the U.S. generally accepted accounting principles
pronouncements into accounting topics, and displays all topics using a
consistent structure. As a result, all references to accounting literature in
our SEC filings will conform to the appropriate reference within the
Codification.  The adoption of the Codification, which became
effective during September 2009, did not have any impact on Scivanta’s financial
position or results of operations.





In August
2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-05, “Fair
Value Measurements and Disclosures” (“ASU 2009-05”).  ASU 2009-05
amends ASC 820 by providing additional guidance clarifying the measurement of
liabilities at fair value.  ASU 2009-05 did not have a significant
impact on Scivanta’s financial position or results of operations.





Scivanta
is not aware of other recently issued, but not yet effective, accounting
standards that would have a significant impact on Scivanta’s financial position
or results of operations.


17


Results
of Operations




Net
Sales.  Scivanta discontinued all product sales during the
fiscal year ended October 31, 2004 and currently does not have any recurring
revenue.




Research and
Development.For the fiscal year ended October 31, 2009,
research and development expenses, on a net basis, were $257,288, which
consisted of gross research and development expenses of $276,898 offset by
$19,610 of research and development expenses reimbursed by the
Foundation.  For the fiscal year ended October 31, 2008, research and
development expenses, on a net basis, were $718,183, which consisted of gross
research and development expenses of $1,694,044 offset by $855,987 of research
and development expenses reimbursed by the Foundation and $119,874 of research
and development expenses reimbursed by Ethox.  The $460,895, or 64%,
decrease in research and development expenses, on a net basis, for the fiscal
year ended October 31, 2009 was primarily due to a $304,962 decrease in license
costs related to the SCMS as well as a $1,020,368 decrease in software and
hardware development costs for the SCMS and a $80,364 decrease in consulting
expenses related to the development of the SCMS resulting from our decision to
slowdown the remaining development of the SCMS as we seek additional
capital.  These decreases to research and development expense, on a
net basis, for the fiscal year ended October 31, 2009 were partially offset by a
$29,164 increase in clinical trial costs and a $956,251 decrease in the
reimbursement of software, hardware and clinical trial expenses by the
Foundation resulting from the expiration of the NYSTAR Contract.





The
amount of research and development expense to be incurred by us during the
fiscal year ending October 31, 2010 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 our research and development program, we would expect
research and development expenses, on both a gross and net basis, for the fiscal
year ending October 31, 2010 to significantly increase.  If we are
unable to obtain additional capital sufficient to fund our research and
development program, we would expect research and development expenses for the
fiscal year ending October 31, 2010, on both a gross and net basis, to
significantly decrease as we reduce our research and development
activities.





General and
Administrative.For the fiscal year ended October 31, 2009,
general and administrative expenses were $1,326,802, as compared to $1,463,561
for the fiscal year ended October 31, 2008.  The $136,759, or 9%,
decrease in general and administrative expenses for the fiscal year ended
October 31, 2009 was primarily due a $77,110 decrease in employee payroll and
related tax and benefit costs, a $33,061 decrease in legal expenses due to a
decrease in costs associated with securities reporting and other corporate
activities, a $38,015 decrease in consulting expense for investor relations, a
$8,162 decrease in travel costs and a $4,364 decrease in the cost of director
and officer liability insurance.  These decreases in general and
administrative expenses for the fiscal year ended October 31, 2009 were
partially offset by a $22,586 increase in stock based compensation expense
primarily related to stock options granted to employees and
directors.


18


The
amount of general and administrative expense to be incurred by us during the
fiscal year ending October 31, 2010 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 our development and marketing of the SCMS, we would
expect general and administrative expenses for the fiscal year ending October
31, 2010 to increase as we build the administrative infrastructure necessary to
support the development and marketing of the SCMS.  If we are unable
to obtain additional capital sufficient to fund our development and marketing of
the SCMS, we would expect general and administrative expenses for the fiscal
year ending October 31, 2010 to decrease as we reduce our operating
activities.





Other Income
(Expenses).  During the fiscal years ended October 31, 2009 and
2008, we incurred interest expense of $21,233 and $30,700,
respectively.  The $9,467, or 31%, decrease in interest expense for
the fiscal year ended October 31, 2009 was primarily due to a decrease in
interest associated with the note payable related to the License
Agreement.





Interest
income for the fiscal years ended October 31, 2009 and 2008 was $2,941 and
$43,598, respectively.  The $40,657, or 93%, decrease in interest
income for the fiscal year ended October 31, 2009 was due to a decrease in cash
and cash equivalents and a decrease in interest rates.





Income Tax
Benefit.  During the fiscal years ended October 31, 2009 and
2008, we recorded an income tax benefit of $179,468 and $512,354, respectively,
related to the sale of a portion of our unused net operating loss carryovers for
the State of New Jersey to a third party through the New Jersey Economic
Development Authority (the “NJEDA”) Technology Business Tax Certificate Transfer
Program.





Net Loss.For the
fiscal year ended October 31, 2009, Scivanta had a net loss of $1,422,914, or
$0.05 per share (basic and diluted), as compared to a net loss of $1,656,492, or
$0.06 per share (basic and diluted), for the fiscal year ended October 31,
2008.  The decrease in the net loss was primarily attributable to a
$460,895 decrease in research and development expenses, on a net basis, and a
$136,759 decrease in general and administrative expenses.  These
decreases in net loss for the fiscal year ended October 31, 2009 were partially
offset by a $332,886 decrease in income tax benefit related to the sale of a
portion of our unused net operating loss carryovers for the State of New Jersey
and $40,657 decrease in interest income.





Liquidity
and Capital Resources





As of
October 31, 2009, Scivanta had working capital deficiency of $701,366 and cash
and cash equivalents on hand of $97,415.  The $501,229 decrease in
cash on hand from October 31, 2008 was primarily due to our continuing operating
expenses offset by the receipt of $512,354 of net proceeds related to the sale
of a portion of our unused net operating loss carryovers for the State of New
Jersey to a third party through the 2008 NJEDA Technology Business Tax
Certificate Transfer Program and the receipt of $211,438 of receivables due from
the Foundation and Ethox.





During
the past several years, Scivanta has 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, proceeds received from the settlement of litigation and the sale
of our State of New Jersey tax losses.


19




On
January 20, 2010, we received $179,468 of net proceeds related to the sale of a
portion of our unused net operating loss carryovers for the State of New Jersey
to a third party through the 2009 NJEDA Technology Business Tax Certificate
Transfer Program.  We will use these proceeds for working capital
purposes.




As of
January 27, 2010, our cash position was approximately
$155,000.  Without any additional financing, we will only be able to
continue our administrative operations for approximately three to five months
from the filing date of this Form 10-K.  We are reducing operating
expenses, deferring vendor payments, deferring payment of a portion of the
officers’ salaries ($160,417 as of October 31, 2009) and deferring payment of
$102,000 of bonus awards for fiscal 2008 ($82,500 due to
officers).  If we are unable to secure additional capital, we will
explore strategic alternatives, including, but not limited to, the possible sale
of Scivanta.  Our independent registered public accounting firm
included an emphasis of a matter paragraph in their report included in our
annual report on Form 10-K for the fiscal year ended October 31, 2009, 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 aggressively pursuing potential equity and or debt
investors and have engaged several placement agents to assist us in this
initiative.  In addition, we are reducing operating
expenses.  While we are aggressively 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.




Expenditures
under our development agreements with Ethox, ASG and Rivertek are at our
discretion.  Assuming that we are successful in obtaining additional
financing, we estimate that we could potentially spend approximately $1,000,000
related to these agreements over the next seven to nine months.





Inflation
and Seasonality





Inflation has had no material effect on
the operations or financial condition of our business.  In addition,
our operations are not considered seasonal in nature.


20


Item
7A.         Quantitative and Qualitative
Disclosures About Market Risk




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




Item
8.            Financial Statements and
Supplementary Data




The financial statement and
supplementary data of Scivanta called for by this item are submitted under a
separate section of this report.  Reference is made to the Index of
Financial Statements contained on page F-1 of this report.




Item
9.            Changes In and Disagreements
with Accountants on Accounting andFinancial
Disclosure




None.




Item
9A.         Controls and
Procedures




As
required by Rule 13a-15 under the Exchange Act, as of the end of the period
covered by this Annual Report on Form 10-K, Scivanta carried out an evaluation
of the effectiveness of the design and operation of Scivanta's disclosure
controls and procedures. This evaluation was carried out under the supervision
and with the participation of Scivanta's management, including Scivanta's
President and Chief Executive Officer and Scivanta’s Executive Vice President,
Chief Financial Officer and Secretary, who concluded that Scivanta's disclosure
controls and procedures are effective.  There has been no change in
Scivanta’s internal control over financial reporting during Scivanta’s last
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, Scivanta'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 Scivanta's reports filed or
submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and
forms.  Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed in Scivanta's reports filed under the Exchange Act is
accumulated and communicated to management, including Scivanta's Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure.


21


Management’s Annual Report
on Internal Control Over Financial Reporting.




The
management of Scivanta is responsible for establishing and maintaining adequate
internal control over financial reporting.  Internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with U.S. generally
accepted accounting principles.  Internal controls over financial
reporting includes those policies and procedures that: (1) pertain to the
maintenance of records that in reasonable detail accurately and fairly reflect
the transactions and dispositions of the assets of Scivanta; (2) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with U.S. generally accepted
accounting principles, and that receipts and expenditures of Scivanta are being
made only in accordance with authorizations of management and directors of
Scivanta; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the
Scivanta’s assets that could have a material effect on the financial
statements.




Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluations of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.




Management
conducted an evaluation of the effectiveness of Scivanta’s internal control over
financial reporting based on the framework in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this evaluation, management concluded that the
Scivanta’s internal control over financial reporting was effective as of
October 31, 2009.




This
Annual Report on Form 10-K does not include an attestation report of our
registered public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the SEC that
permit us to provide only management’s report in this Annual Report on Form
10-K.





Changes in Internal Control
Over Financial Reporting





There has
been no change in Scivanta’s internal control over financial reporting during
Scivanta’s last fiscal quarter that has materially affected, or is reasonably
likely to materially affect, Scivanta's internal control over financial
reporting.





Item
9B.         Other
Information





None.


22


PART
III




Item 10.
              Directors, Executive
      Officers and Corporate
Governance





Directors




Each
director serves for a term set to expire at the next annual meeting of
stockholders of Scivanta. The name, age, principal occupation or employment and
biographical information of each member of the board of directors of Scivanta
who served as of October 31, 2009 are set forth below:




Name
                                
                                Age
                                
                                Principal Occupation or
      EmploymentDavid
      R. LaVance
                                
                                56
                                
                                Chairman
      of the Board, President and Chief
      Executive   OfficerThomas
      S. Gifford
                                
                                41
                                
                                Executive
      Vice President, Chief Financial Officer and SecretaryRichard
      E. Otto
                                
                                60
                                
                                ConsultantLawrence
      M. Levy
                                
                                71
                                
                                Senior
      Counsel at Brown Rudnick LLPAnthony
      Giordano, III
                                
                                44
                                
                                Senior
      Executive Vice President and Chief Financial Officer of Central Jersey
      Bancorp and Central Jersey Bank, National
  Association





There are
no family relationships among the current executive officers and directors of
Scivanta.  None of the current executive officers or directors of
Scivanta are directors of any company with a class of securities registered
pursuant to Section 12 of the Exchange Act or subject to the requirements of
Section 15(d) of the Exchange Act or any company registered as an investment
company under the Investment Company Act of 1940, as amended, except for Mr.
LaVance and Mr. Levy, who serve as directors of Hologic, Inc.
(NASDAQ:  HOLX).




Biographical
Information




David R.
LaVance:Mr. LaVance
became Scivanta’s President and Chief Executive Officer and the Chairman of its
Board of Directors on March 21, 2003.  He also is the President and
co-founder of Century Capital which was founded in 1997.  Mr. LaVance
was a Managing Director of KPMG Health Ventures, an advisory group providing
investment banking services to healthcare companies from 1995 through
1997.  Prior to joining KPMG Health Ventures, Mr. LaVance was a
founder of Physicians Data Corporation, a startup health informatics company
formed in 1994, and served as the President of Nuclear Care, Inc., a nuclear
imaging clinical services provider from 1992 through 1995.  Before
founding Nuclear Care, Mr. LaVance held a series of operating positions with
Dornier MedTech America, Inc., a medical device company that specializes in
lithotriptors and other medical devices, ultimately serving as the President of
Dornier MedTech in Japan from 1990 to 1992.  Mr. LaVance currently is
a member of the board of directors of Hologic, Inc. (NASDAQ:  HOLX), a
publicly traded medical device company specializing in digital
imaging.  Mr. LaVance received a B.A. degree from Furman University
and a J.D. degree from Washington College of Law of the American
University.


23




Thomas
S. Gifford:  Mr. Gifford became Scivanta’s Executive Vice
President, Chief Financial Officer and a director on March 21,
2003.  He later became the Secretary of Scivanta on July 22,
2003.  Mr. Gifford is also the Vice President and co-founder of
Century Capital.  He is a licensed attorney in New York and New Jersey
and is a Certified Public Accountant.  He was formerly a Manager and
Associate Director of KPMG Health Ventures.  Prior to KPMG Health
Ventures, Mr. Gifford was an accountant for KPMG Peat Marwick LLP from 1990
through 1994, where he provided auditing and financial due diligence services to
various publicly traded and privately held emerging technology
companies.  Mr. Gifford currently serves on the board of directors of
Maloy Risk Services, Inc., a privately held insurance brokerage.  Mr.
Gifford received a B.S. degree from Rutgers University and a J.D. degree from
Seton Hall University School of Law.




Richard
E. Otto:  Mr. Otto was elected as a director of Scivanta on May
6, 2003.  He has been a consultant since June
2007.  Beginning January 2002, Mr. Otto served as the Chief Executive
Officer and a director of Corautus Genetics Inc., a publicly traded
biopharmaceutical company and its predecessor Vascular Genetics Inc., until June
2007 when Corautus merged with VIA Pharmaceuticals, Inc., a publicly traded
biotechnology company (NASDAQ: VIAP).  From June 1995 through April
1998, he was Chief Executive Officer and a director of CardioDynamics
International Corporation, a publicly traded company that develops, manufactures
and markets noninvasive heart-monitoring devices that is now a wholly-owed
subsidiary of SonoSite, Inc. (NASDAQ:  SONO).  Mr. Otto has
served as a consultant to the founder of WebMD and as a consultant to key
management positions with Cardiac Pacemakers Inc. (now a Guidant
company).  Mr. Otto also held positions at Intermedics, Inc.,
Medtronic Inc., and Eli Lilly and Company.  He received a B.S. degree
from the University of Georgia.




Lawrence
M. Levy:  Mr. Levy was elected as a director of Scivanta
on March 15, 2007.  He has been Senior Counsel at Brown Rudnick LLP,
an international law firm, since February 2005 and, for more than 30 years
before that, had been a Partner at Brown Rudnick, specializing in corporate and
securities law. Mr. Levy is also a member of the boards of directors of
Hologic, Inc. (NASDAQ: HOLX), a publicly traded medical device company
specializing in digital imaging, Option N.V. of Belgium, a broadband wireless company
specializing in data cards, embedded wireless modules, fixed mobile devices and
related software and the Facing History and Ourselves National
Foundation. Mr. Levy received a B.A. from Yale University and a L.L.B. from
Harvard Law School.




Anthony
Giordano, III:  Mr. Giordano was elected as a director of
Scivanta on March 15, 2007.  He currently serves as the Senior
Executive Vice President, Chief Financial Officer, Treasurer and Assistant
Secretary of Central Jersey Bancorp (formerly Monmouth Community Bancorp), a
publicly traded bank holding company (NASDAQ:  CJBK), and its
wholly-owned subsidiary, Central Jersey Bank, N.A. (formerly Monmouth Community
Bank, N.A.).  Prior to the consummation of the combination of Monmouth
Community Bancorp and Allaire Community Bank on January 1, 2005, he served as an
Executive Vice President and the Chief Financial Officer, Treasurer and
Secretary of Monmouth Community Bancorp and its bank subsidiary, Monmouth
Community Bank, N.A.  Prior to joining Monmouth Community Bank, N.A. in May
1998, Mr. Giordano was employed by PNC Bank (formerly Midlantic Bank), where he
served as Real Estate Banking Officer from 1996 to 1998 and Senior
Accountant/Financial Analyst from 1994 to 1996.  From 1988 to 1994, Mr.
Giordano served in various positions at Shadow Lawn Savings Bank, including
Budget and Financial Planning Manager and Financial Analyst.  Mr. Giordano
received a M.B.A degree from Monmouth University and a B.S. degree in finance
from Kean University.


24




Executive
Officers




The
executive officers serve in accordance with Scivanta’s bylaws and at the
discretion of Scivanta’s board of directors.  The name, age, current
position and biographical information of each executive officer of Scivanta are
set forth below:




Name
                            
                            Age
                            
                            Capacities in Which
  ServedDavid
      R. LaVance
                            
                            56
                            
                            Chairman
      of the Board, President and Chief Executive OfficerThomas
      S. Gifford
                            
                            41
                            
                            Executive
      Vice President, Chief Financial Officer and
  Secretary





For the
biographical information for David R. LaVance and Thomas S. Gifford, see “Item
10. Directors, Executive Officers and Corporate Governance -
Directors.”




Corporate
Governance




Meetings
and Committees of the Board of Directors




The board of directors conducts
business through meetings of the board or by unanimous written consents of the
board.  In addition, the board sometimes conducts business through its
committees, including an audit committee and compensation
committee.  Following the election of directors at the 2009 Annual
Meeting of Stockholders, the board of directors for fiscal 2009 consisted
of:  David R. LaVance, Thomas S. Gifford, Richard E. Otto, Lawrence M.
Levy and Anthony Giordano, III.  Messrs. Otto, Levy and Giordano
qualify as independent directors in accordance with NASDAQ’s definition of
“independent director” and the rules and regulations of the SEC.




Audit
Committee




The audit
committee of the board of directors for fiscal 2009 consisted
of:  Richard E. Otto, Lawrence M. Levy and Anthony Giordano,
III.  Mr. Giordano is the chairman of the audit
committee.  Each of Mr. Giordano, Mr. Otto and Mr. Levy qualify as an
independent director in accordance with the rules of NASDAQ and the rules and
regulations of the SEC.  In addition, the board has determined that
Mr. Otto and Mr. Giordano both qualify as financial experts pursuant to SEC
rules.  The audit committee’s primary responsibility is to assist the
board in fulfilling its oversight responsibilities with respect to financial
reports and other financial information, as well as such other responsibilities
set forth in the amended and restated charter of the audit committee which was
adopted on May 14, 2004.


25




Compensation
Committee




The compensation committee of the board
of directors for fiscal 2009 consisted of:  Richard E. Otto, Lawrence
M. Levy and Anthony Giordano, III.  Mr. Otto is the Chairman of the
Compensation Committee.  Each of Mr. Giordano, Mr. Otto and Mr. Levy
qualify as an independent director in accordance with the rules of NASDAQ and
the rules and regulations of the SEC.  The compensation committee does
not have a formal charter.  The compensation committee is responsible
for determining whether Scivanta’s compensation and benefits packages are
suitable and do not provide excessive benefits or result in material financial
loss to Scivanta.  The compensation committee is also responsible for
approving or recommending to the Board compensation packages and plans for
senior management and directors.  These compensation packages include
salaries, bonuses, vacations, termination benefits, profit-sharing plans,
contributions to employee pension plans, stock option and stock purchase plans,
indemnification agreements and employment/change of control
contracts.  When reviewing the proposed compensation packages, the
compensation committee will consider:  (1) the combined value of all
cash and noncash benefits provided to the individual or individuals; (2) the
compensation history of the individual or individuals as compared to other
individuals with comparable expertise at Scivanta; (3) the financial condition
of Scivanta; (4) comparable compensation packages at similar institutions based
upon such factors as asset size, geographic location and the services provided;
(5) the projected total cost and benefit to Scivanta for post employment
benefits; and (6) any connection between the individual and any fraudulent act
or omission, breach of trust of fiduciary duty or insider abuse with regard to
Scivanta.




Section
16 Compliance




Section
16(a) of the Exchange Act requires Scivanta’s directors, executive officers and
persons who own more than 10% of Scivanta’s common stock on Forms 3, 4 and 5
with the SEC.  Executive officers, directors and greater than 10%
beneficial owners are required by SEC regulations to furnish Scivanta with
copies of all Forms 3, 4 and 5 reports they file.





Scivanta
believes that all filings required to be made by its executive officers and
directors pursuant to Section 16(a) of the Exchange Act have been filed within
the time periods prescribed.





Chief
Executive and Senior Financial Officer Code of Ethics





The chief
executive and senior financial officers of Scivanta are held to the highest
standards of honest and ethical conduct when conducting the affairs of
Scivanta.  All such individuals must act ethically at all times in
accordance with the policies contained in Scivanta's Chief Executive and Senior
Financial Officer Code of Ethics.  Copies of the Chief Executive and
Senior Financial Officer Code of Ethics will be furnished without charge upon
written request received from any shareholder of record.  Requests
should be directed to Scivanta Medical Corporation, 215 Morris Avenue, Spring
Lake, New Jersey  07762, Attention: Secretary.  The Chief
Executive and Senior Financial Officer Code of Ethics is also available on
Scivanta’s website at www.scivanta.com.


26




Item
      11.
            Executive
      Compensation




The
following table sets forth information concerning the annual and long-term
compensation for services in all capacities to Scivanta for the fiscal years
ended October 31, 2009 and 2008 of any person who served as Scivanta’s President
and Chief Executive Officer during the fiscal year ended October 31, 2009 and
each other executive officer of Scivanta whose total annual salary and bonus for
the fiscal year ended October 31, 2009 exceeded $100,000 (the “Named Executive
Officers”).




SUMMARY
COMPENSATION TABLE




Name
      and
                    Principal
      Position
                
                Year
                
                Salary ($)
                
                
                Bonus ($)
                
                
                Stock
                    Awards
                    ($)
                
                
                Option
                    Awards ($)
                
                
                Non-
                    Equity
                    Incentive
                    Plan
                    Compen-
                    sation ($)
                
                
                Non-
                    Qualified
                    Deferred
                    Compen-
                    sation
                    Earnings
                    ($)
                
                
                All
                    Other
                    Compen-
                    sation ($)
                
                
                Total
      ($)David
      R. LaVance,
                
                2009
                
                $
                275,000
                (1)
                
                $
                —
                
                
                $
                —
                
                
                $
                43,115
                (2)
                
                $
                —
                
                
                $
                —
                
                
                $
                —
                
                
                $
                318,115President
      and Chief Executive Officer
                
                2008
                
                $
                275,000
                
                
                $
                41,250
                (3)
                
                $
                —
                
                
                $
                32,328
                (2)
                
                $
                —
                
                
                $
                —
                
                
                $
                —
                
                
                $
                348,578Thomas
      S. Gifford,
                
                2009
                
                $
                275,000
                (1)
                
                $
                —
                
                
                $
                —
                
                
                $
                43,115
                (2)
                
                $
                —
                
                
                $
                —
                
                
                $
                —
                
                
                $
                318,115Executive
      Vice President, Chief Financial Officer and Secretary
                
                2008
                
                $
                275,000
                
                
                $
                41,250
                (3)
                
                $
                —
                
                
                $
                32,328
                (2)
                
                $
                —
                
                
                $
                —
                
                
                $
                —
                
                
                $
                348,578





(1)
            $80,208
      of the salary for the Named Executive Officer ($160,416 in the aggregate)
      has been accrued, and will be paid upon Scivanta receiving additional
      funding.




(2)
              Amounts
      shown do not reflect compensation actually received by the Named Executive
      Officer.  Instead, the amounts shown are the compensation costs
      we recognized in the fiscal years 2009 and 2008 in accordance with ASC
      718.  The accounting for stock based compensation and the
      assumptions used to calculate the value of the option grants are set forth
      under Note 3 “Summary of Significant Accounting Policies – Stock Based
      Compensation” and Note 7 “Stockholders’ Equity,” respectively, of our
      audited financial statements for the fiscal years ended October 31, 2009
      and 2008 and the related notes thereto, which begin on page F-1 of this
      report.




(3)
            The
      bonus awarded for fiscal 2008 has been accrued, and will be paid at the
      discretion of the compensation
committee.




Employment
Agreements




On
January 1, 2008, Scivanta entered into an executive employment agreement with
each of David R. LaVance, Scivanta’s President and Chief Executive Officer, and
Thomas S. Gifford, Scivanta’s Executive Vice President, Chief Financial Officer
and Secretary (collectively, the “Employment Agreements”).  The term
of each of the Employment Agreements commenced on January 1, 2008 and ends on
December 31, 2010, but can be renewed for successive one year periods unless
terminated as provided in the Employment Agreements.  Both Messrs.
LaVance and Gifford shall be paid an annual base salary of $275,000, which may
be increased by the compensation committee.  In addition, both Messrs.
LaVance and Gifford shall be eligible to receive an annual performance bonus
based on the achievement of certain performance objectives as determined by the
compensation committee.  Scivanta will also provide certain benefits
to Messrs. LaVance and Gifford, which include a comprehensive medical package,
dental insurance, long-term disability coverage, a 401(k) Savings Plan/Profit
Sharing Plan and a Section 125 Cafeteria Plan.  Messrs. LaVance and
Gifford will also be entitled to vacation days in accordance with Scivanta’s
policies.


27


In the
event that Mr. LaVance or Mr. Gifford is terminated without Good Cause (as
defined in the Employment Agreements and used herein), or Mr. LaVance or Mr.
Gifford terminates his employment for Good Reason (as defined in the Employment
Agreements and used herein), Mr. LaVance or Mr. Gifford, as the case may be,
will be entitled to receive a severance payment equal to his annual base salary
in effect on the date of termination.




In
addition, in the event that within one-hundred eighty days of a Change of
Control (as defined in the Employment Agreements and used herein) of Scivanta,
the employment of Mr. LaVance or Mr. Gifford is terminated by Scivanta or its
successor without Good Cause, or Mr. LaVance or Mr. Gifford terminates his
employment with Scivanta or its successor for Good Reason, Mr. LaVance or Mr.
Gifford, as the case may be, shall be paid a severance payment; provided
however, that if the termination of employment occurs prior to the Change of
Control, the Change of Control must have been considered by Scivanta at the time
of termination for Mr. LaVance or Mr. Gifford to be entitled to the severance
payment.  The amount of the severance payment will be equal to two
times the sum of Mr. LaVance’s or Mr. Gifford’s annual base salary in effect
immediately prior to the termination of Mr. LaVance’s or Mr. Gifford’s
employment and an amount which is the lesser of (1) $150,000 and (2) the
aggregate amount of any bonuses paid to Mr. LaVance or Mr. Gifford during the
twelve months prior to the earlier of (A) the effective date of the Change of
Control and (B) the date Mr. LaVance’s or Mr. Gifford’s employment terminates
with Scivanta.




Pursuant
to the Employment Agreements, any severance payment to be paid by Scivanta to
Mr. LaVance or Mr. Gifford is subject to Scivanta and Mr. LaVance or Mr. Gifford
entering into and not revoking a release of claims in favor of
Scivanta.




Each of
Mr. LaVance and Mr. Gifford has agreed that (a) during the term of his
employment with Scivanta and (b) for one year after the termination of his
employment with Scivanta, he will not, directly or indirectly, be employed by,
provide consulting services to or have any ownership interest (as a stockholder,
partner or otherwise) in any Competing Business (as defined in the Employment
Agreements), except for as permitted in the Employment Agreements.




Each of
Mr. LaVance and Mr. Gifford has also agreed that (a) during the term of his
employment with the Scivanta, and (b) for a period of three years after the
termination of his employment with the Scivanta, he will not recruit any
employee of the Scivanta or solicit, divert or take away the business or
patronage of any of the clients, customers or accounts of the Scivanta that were
served by the Scivanta while he was employed by the Scivanta.


28


Outstanding
Equity Awards at Fiscal Year-End




The
following table provides information about all equity compensation awards held
by the Named Executive Officers at October 31, 2009.




OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-ENDOption
      Awards
                                            
                                            Stock
      AwardsName
                                            
                                            Date of
                                                Grant
                                            
                                            Number of
                                                Securities
                                                Underlying
                                                Unexercised
                                                Options
                                                (#)
                                                Exercisable
                                            
                                            
                                            Number of
                                                Securities
                                                Underlying
                                                Unexercised
                                                Options
                                                (#) Un-
                                                exercisable
                                            
                                            
                                            Equity
                                                Incentive
                                                Plan
                                                Awards:
                                                Number of
                                                Securities
                                                Underlying
                                                Unexercised
                                                Unearned
                                                Options (#)
                                            
                                            
                                            Option
                                                Exercise
                                                Price ($)
                                            
                                            Option
                                                Expir-
                                                ation
                                                Date
                                            
                                            Number
                                                of
                                                Shares
                                                or Units
                                                of Stock
                                                That
                                                Have
                                                Not
                                                Vested
                                                (#)
                                            
                                            
                                            Market
                                                Value of
                                                Shares
                                                or Units
                                                of Stock
                                                That
                                                Have
                                                Not
                                                Vested
                                                ($)
                                            
                                            
                                            Equity
                                                Incentive
                                                Plan
                                                Awards:
                                                Number of
                                                Unearned
                                                Shares,
                                                Units or
                                                Other
                                                Rights
                                                That Have
                                                Not Vested
                                                (#)
                                            
                                            
                                            Equity
                                                Incentive
                                                Plan
                                                Awards:
                                                Market or
                                                Payout
                                                Value of
                                                Unearned
                                                Shares,
                                                Units or
                                                Other
                                                Rights
                                                That Have
                                                Not Vested
                                                ($)David
      R .LaVance
                                            
                                            5/14/04
                                            
                                            
                                            200,000
                                            (1)
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            0.04
                                            
                                            5/14/14
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            —President
      and Chief Executive Officer
                                            
                                            2/5/07
                                            
                                            
                                            487,000
                                            (2)
                                            
                                            
                                            13,000
                                            (2)
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            0.20
                                            
                                            2/5/17
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            —1/1/08
                                            
                                            
                                            33,333
                                            (3)
                                            
                                            
                                            66,667
                                            (3)
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            0.14
                                            
                                            1/1/18
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            —1/21/09
                                            
                                            
                                            —
                                            
                                            
                                            
                                            250,000
                                            (4)
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            0.14
                                            
                                            1/21/19
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            —Thomas
      S. Gifford
                                            
                                            5/14/04
                                            
                                            
                                            200,000
                                            (1)
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            0.04
                                            
                                            5/14/14
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            —Executive
                                            
                                            2/5/07
                                            
                                            
                                            487,000
                                            (2)
                                            
                                            
                                            13,000
                                            (2)
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            0.20
                                            
                                            2/5/17Vice
      President,
                                            
                                            1/1/08
                                            
                                            
                                            33,333
                                            (3)
                                            
                                            
                                            66,667
                                            (3)
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            0.14
                                            
                                            1/1/18
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            —Chief
      Financial Officer and Secretary
                                            
                                            1/21/09
                                            
                                            
                                            —
                                            
                                            
                                            
                                            250,000
                                            (4)
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            0.14
                                            
                                            1/21/19
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            —
                                            
                                            
                                            
                                            —
                                            
                                            
                                            $
                                            —





(1)
            Represents
      200,000 shares subject to the warrant issued on May 14, 2004 to Century
      Capital to purchase a total of 700,000 shares of Scivanta’s common
      stock.  Mr. LaVance and Mr. Gifford are principals of Century
      Capital.  Each of Mr. LaVance and Mr. Gifford disclaims
      beneficial ownership of these shares except to the extent of his ownership
      interest in Century Capital.




(2)
            On
      February 5, 2007, Scivanta granted a non-qualified stock option to
      purchase 500,000 shares of its common stock pursuant to the 2002 Equity
      Incentive Plan to each of Messrs. LaVance and Gifford.  An
      aggregate amount of 1,000,000 shares of Scivanta’s common stock could be
      issued pursuant to these options.  Each option has a ten year
      term and is exercisable at $0.20 per share.  The shares of
      common stock underlying each option vest or vested as
      follows:  14,000 shares vested on the last day of each month
      commencing February 28, 2007 through October 31, 2009; 25,000 shares of
      common stock underlying each option vested upon Scivanta’s execution of
      its development agreement with Ethox; and the remaining 13,000 shares vest
      on November 30, 2009.




(3)
            On
      January 1, 2008, Scivanta granted a non-qualified stock option to purchase
      100,000 shares of its common stock under the 2007 Equity Incentive Plan to
      each of Messrs. LaVance and Gifford.  An aggregate of 200,000
      shares of Scivanta’s common stock could be purchased pursuant to these
      options.  Each option has a ten year term and is exercisable at
      $0.14 per share.  The shares of common stock underlying each
      option vest or vested as follows:  33,333 shares vested on
      December 31, 2008; 33,333 shares vest on December 31, 2009; and 33,334
      shares vest on December 31, 2010.    In the event of a
      change in control of Scivanta, as defined in the 2007 Equity Incentive
      Plan, each of the options becomes fully vested as of ten days prior to the
      change in control.




(4)
            On
      January 21, 2009, Scivanta granted a non-qualified stock option to
      purchase 250,000 shares of Scivanta’s common stock under the 2007 Equity
      Incentive Plan to each of Messrs. LaVance and Gifford.  An
      aggregate of 500,000 shares of Scivanta’s common stock could be purchased
      pursuant to these options.  Each option has a ten year term and
      is exercisable at $0.14 per share.  The shares of common stock
      underlying each option vests as follows:  83,333 shares vest on
      December 31, 2009; 83,333 shares vest on December 31, 2010; and 83,334
      shares vest on December 31, 2011.    In the event of a
      change in control of Scivanta, as defined in the 2007 Equity Incentive
      Plan, each of the options becomes fully vested as of ten days prior to the
      change in control.




29


Directors’
Compensation





The
following table sets forth information concerning the compensation of the board
of directors who are not Named Executive Officers for the fiscal year ended
October 31, 2009.




Name
                      
                      Fees Earned
                        or Paid in
                        Cash ($)
                        (1)(2)
                      
                      
                      Stock
                        Awards
                        ($)
                      
                      
                      Option
                        Awards
                        ($)
                        (3)(4)
                      
                      
                      Non-
                        Equity
                        Incentive
                        Plan
                        Compen-
                        sation ($)
                      
                      
                      Change in
                        Pension
                        Value and
                        Non-
                        Qualified
                        Deferred
                        Compen-
                        sation
                        Earnings
                        ($)
                      
                      
                      All Other
                        Compen-
                        sation ($)
                      
                      
                      Total ($)Richard
      E. Otto
                      
                      $
                      14,500
                      
                      
                      $
                      —
                      
                      
                      $
                      10,624
                      
                      
                      $
                      —
                      
                      
                      $
                      —
                      
                      
                      $
                      —
                      
                      
                      $
                      25,124Lawrence
      M. Levy
                      
                      $
                      14,500
                      
                      
                      $
                      —
                      
                      
                      $
                      12,036
                      
                      
                      $
                      —
                      
                      
                      $
                      —
                      
                      
                      $
                      —
                      
                      
                      $
                      26,536Anthony
      Giordano, III
                      
                      $
                      14,500
                      
                      
                      $
                      —
                      
                      
                      $
                      12,442
                      
                      
                      $
                      —
                      
                      
                      $
                      —
                      
                      
                      $
                      —
                      
                      
                      $
                      26,942





(1)
            Effective
      January 1, 2008, Scivanta’s compensation committee approved the following
      compensation for independent directors:  (a)  annual
      retainer of $10,000; (b) in-person daily meeting fee of $2,000; and (c)
      telephonic meeting fee of $500.




(2)
            $9,000
      of the fees earned for each director ($27,000 in aggregate) has been
      accrued, and will be paid upon Scivanta receiving additional
      funding.




(3)
            Option
      awards consist of warrants issued and options granted to purchase Scivanta
      common stock.  Amounts shown do not reflect compensation
      actually received by the director.  Instead, the amounts shown
      are the compensation costs we recognized in the fiscal year 2009 in
      accordance with ASC 718.  The accounting for stock based
      compensation and the assumptions used to calculate the value of the
      warrant issuances and option grants are set forth under Note 2 “Summary of
      Significant Accounting Policies – Stock Based Compensation” and Note 7
      “Stockholders’ Equity,” respectively, of our audited financial statements
      for the fiscal years ended October 31, 2009 and 2008 and the related notes
      thereto, which begin on page F-1 of this
report.




(4)
            As
      of October 31, 2009, the aggregate number of shares of Scivanta common
      stock underlying warrants issued and options granted to each director were
      as follows:  Richard E. Otto – 473,000 shares; Lawrence M. Levy
      – 165,000 shares; and Anthony Giordano, III – 177,000
    shares.




Item
      12.
            Security Ownership of
      Certain Beneficial Owners and Management and Related Stockholder
      Matters




Security
Ownership of Certain Beneficial Owners and Management


The
following table sets forth information as of January 27, 2010, with respect to
the beneficial ownership (as defined in Rule 13d-3 of the Exchange Act) of
Scivanta’s common stock, which is the only class of Scivanta capital stock with
shares issued and outstanding, by (1) each director and nominee for director of
Scivanta, (2) each of the Named Executive Officers, (3) each person or group of
persons known by Scivanta to be the beneficial owner of greater than 5% of
Scivanta’s outstanding common stock, and (4) all directors and executive
officers of Scivanta as a group.  Beneficial ownership is determined
in accordance with the rules of the SEC and generally includes voting or
investment power with respect to securities.  Except as indicated by
footnote, the persons named in the table below have sole voting power and
investment power with respect to the shares of Scivanta common stock shown as
beneficially owned by them.


30




Beneficial
      Ownership of
                  Common
      StockName of Beneficial Owner
              
              No. of Shares (1)
              
              
              Percent of
                  ClassDavid
      R. LaVance (2)(3)(4)(5)
              
              
              4,712,499
              
              
              
              16.93
              %Thomas
      S. Gifford (3)(5)(6)(7)
              
              
              5,023,437
              
              
              
              18.05
              %Lawrence
      M. Levy (3)(8)
              
              
              165,000
              
              
              
              *Anthony
      Giordano, III (3)(9)
              
              
              177,000
              
              
              
              *Richard
      E. Otto (3)(10)
              
              
              473,000
              
              
              
              1.72
              %John
      A. Moore (11)(12)
              
              
              1,360,270
              
              
              
              5.02
              %Richard
      S. Rimer (13)
              
              
              2,731,948
              
              
              
              10.13
              %All
      directors and executive officers as a group
      (4)(5)(7)(8)(9)(10)
              
              
              10,239,998
              
              
              
              34.72
              %




*
Represents less than 1% of the issued and outstanding shares of Scivanta’s
common stock.




(1)
            In
      accordance with Rule 13d-3 of the Exchange Act, a person is deemed to be
      the beneficial owner, for purposes of this table, of any shares of
      Scivanta’s common stock if he, she or it has voting or investment power
      with respect to such shares.  This includes shares (a) subject
      to options and warrants exercisable within sixty days of January 27, 2010,
      and (b) (1) owned by a spouse, (2) owned by other immediate family
      members, or (3) held in trust or held in retirement accounts or funds for
      the benefit of the named individuals, over which shares the person named
      in the table may possess voting and/or investment
  power.




(2)
            Such
      person serves as Scivanta’s President and Chief Executive
      Officer.




(3)
            Such
      person serves as a director of Scivanta and maintains a mailing address of
      215 Morris Avenue, Spring Lake, New
    Jersey  07762.




(4)
            Includes
      649,999 shares currently available for purchase or which are available for
      purchase within sixty days of January 27, 2010 under the options granted
      by Scivanta to Mr. LaVance on February 5, 2007, January 1, 2008 and
      January 21, 2009.  Also, includes 310,938shares held by the
      LaVance Trust for Children, a trust established for the benefit of Mr.
      LaVance’s children.  Mr. LaVance disclaims beneficial ownership
      of the shares held in trust.




(5)
            Includes
      200,000 shares currently available for purchase under the warrant issued
      on May 14, 2004 to Century Capital.  Mr. LaVance and Mr. Gifford
      are the principals of Century Capital.  Each of Mr. LaVance and
      Mr. Gifford disclaims beneficial ownership of these shares except to the
      extent of his ownership in Century
Capital.




(6)
            Such
      person serves as Scivanta’s Executive Vice President, Chief Financial
      Officer and Secretary.




(7)
            Includes
      649,999 shares currently available for purchase or which are available for
      purchase within sixty days of January 27, 2010 under the options granted
      by Scivanta to Mr. Gifford on February 5, 2007, January 1, 2008 and
      January 21, 2009.  Also includes 310,938 shares held by the
      LaVance Trust for Children.  Mr. Gifford is the trustee for the
      LaVance Trust for Children.  Mr. Gifford disclaims beneficial
      ownership of the shares held in
trust.




(8)
            Represents
      the shares currently available for purchase or which are available for
      purchase within sixty days of January 27, 2010 under the warrant issued by
      Scivanta to Mr. Levy on March 15, 2007 and the options granted by Scivanta
      to Mr. Levy on January 1, 2008 and January 21,
  2009.




(9)
            Represents
      the shares currently available for purchase or which are available for
      purchase within sixty days of January 27, 2010 under the warrant issued by
      Scivanta to Mr. Giordano on March 15, 2007 and the options granted by
      Scivanta to Mr. Giordano on January 1, 2008 and January 21,
      2009.




(10)
            Represents
      the shares currently available for purchase or which are available for
      purchase within sixty days of January 27, 2010 under the warrants issued
      by Scivanta to Mr. Otto on February 25, 2005 and February 5, 2007 and the
      options granted by Scivanta to Mr. Otto on January 1, 2008 and January 21,
      2009.




(11)
            Mr.
      Moore maintains a mailing address at 403 Marsh Lane, Wilmington,
      Delaware  19804.




31


(12)
            Includes
      100,000 shares currently available for purchase under the warrant issued
      by Scivanta to Mr. Moore on February 5,
2007.




(13)
            Mr.
      Rimer maintains a mailing address at 17 Chemin De La Sapinere, 1253
      Vandoeuvres, Geneva, Switzerland.





Stock
Option Plans




Scivanta
currently has two stock option plans in place:  the 2002 Equity
Incentive Plan and the 2007 Equity Incentive Plan.  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 2,000,000.  As of October 31, 2009,
options to purchase 1,470,000 shares of Scivanta’s common stock were outstanding
under the 2002 Equity Incentive Plan.  As a result of the adoption
Scivanta’s 2007 Equity Incentive Plan, no further awards are permitted under the
2002 Equity Incentive Plan.




On May
31, 2007, the stockholders approved Scivanta’s 2007 Equity Incentive
Plan.  The aggregate number of shares of common stock which may be
awarded under the 2007 Equity Incentive Plan is 3,000,000, subject to adjustment
as provided in the 2007 Equity Incentive Plan.  As of October 31,
2009, options to purchase 1,067,000 shares of Scivanta’s common stock were
outstanding under the 2007 Equity Incentive Plan.




Securities
Authorized for Issuance under Equity Compensation Plans




The
following table provides information as of October 31, 2009, on the number of
securities to be issued upon the exercise of outstanding options under the 2002
Equity Incentive Plan and the 2007 Equity Incentive Plan and the number of
securities remaining available for future issuance under the 2007 Equity
Incentive Plan.




EQUITY COMPENSATION PLAN TABLEPlan Category
                  
                  Number of securities to be
                      issued upon exercise of
                      outstanding options,
                      warrants and rights
                      (a)
                  
                  
                  Weighted-average
                      exercise price of
                      outstanding options,
                      warrants and rights
                      (b)
                  
                  
                  Number of securities
                      remaining available for
                      future issuance under
                      equity compensation plans
                      (excluding securities
                      reflected in column (a))
                      (c)Equity
      compensation plan approved by security holders (1)
                  
                  
                  2,537,000
                  
                  
                  $
                  0.16
                  
                  
                  
                  1,933,000Equity
      compensation arrangements not approved by security holders
    (2)
                  
                  
                  1,496,750
                  
                  
                  $
                  0.15
                  
                  
                  
                  —Total
                  
                  
                  4,033,750
                  
                  
                  $
                  0.16
                  
                  
                  
                  1,933,000







(1)
            Scivanta
      currently has two equity compensation plans, the 2002 Equity Incentive
      Plan and the 2007 Equity Incentive Plan.  Both of these plans
      are described herein and each has been approved by Scivanta’s
      stockholders.  As a result of the adoption of the 2007 Equity
      Incentive Plan, no further awards are permitted under the 2002 Equity
      Incentive Plan.




(2)
            Represents
      warrants to purchase common stock which were issued and outstanding as of
      October 31, 2009.  See discussion below for additional
      information.


32


Equity
Compensation Arrangements Not Approved by the Security Holders




Warrants
Issued to Consultants Dated October 23, 2008




On
October 23, 2008, Scivanta issued warrants to purchase an aggregate of 120,000
shares of common stock to Donald D. Hickey, M.D. and Clas E. Lundgren, M.D.,
Ph.D. as consideration for their service as product development consultants to
Scivanta.  Each of the warrants has a five year term and is
exercisable at $0.20 per share.  As of October 31, 2009, all 120,000
shares underlying the warrants were available for purchase.




Warrant
Issued to Consultant Dated April 28, 2008




On April
28, 2008, Scivanta issued a warrant to purchase 125,000 shares of common stock
to Rivertek Medical Systems, Inc. as partial consideration for its services as a
product development consultant to Scivanta.  The warrant has a five
year term and is exercisable at $0.13 per share.  As of October 31,
2009, all 125,000 shares underlying the warrant were available for
purchase.




Warrant
Issued to Consultant Dated April 1, 2008




On April
1, 2008, Scivanta issued a warrant to purchase 150,000 shares of common stock to
Catalyst Financial Resources LLC (“Catalyst”) as partial consideration for the
services to be provided by Catalyst to Scivanta as an investor relations
consultant.  The warrant has a five year term.  As of
October 31, 2009, 75,000 shares underlying the warrant were available for
purchase (37,500 exercisable at $0.20 per share and 37,500 exercisable at $0.25
per share) and 75,000 shares underlying the warrant were cancelled.




Warrants
Issued to Consultants Dated November 1, 2007




On
November 1, 2007, Scivanta issued warrants to purchase an aggregate of 160,000
shares of common stock to Harvey Sacks, MD, Andrew D. Shaw, MD and Paul
Sierzenski, MD as partial consideration for their service as medical consultants
to Scivanta.  Each of the warrants has a five year term and is
exercisable at $0.13 per share.  As of October 31, 2009, all 160,000
shares underlying the warrants were available for purchase.




Warrants
Issued to Directors Dated March 15, 2007




On March
15, 2007, Scivanta issued warrants to purchase an aggregate of 214,000 shares of
common stock to Lawrence M. Levy and Anthony Giordano, III as consideration for
their service as members of the Board of Directors and related committees in
2007.  Each of the warrants has a five year term and is exercisable at
$0.25 per share.  The shares of common stock underlying the warrants
vest or vested as follows:  13,500 shares vested on each of March 31,
2007, June 30, 2007 and September 30, 2007; 53,500 shares vested on December 31,
2007; 40,000 shares vested on December 31, 2008; and 40,000 shares vest on each
of December 31, 2009 and December 31, 2010.  In the event of a change
in control of Scivanta, as defined in the warrants, the warrants become fully
vested as of ten days prior to the change in control.  As of October
31, 2009, 134,000 shares underlying the warrant were available for purchase and
80,000 shares underlying the warrant were unvested and were not yet available
for purchase.


33


Warrant
Issued to Director Dated February 5, 2007




On
February 5, 2007, Scivanta issued a warrant to purchase 209,000 shares of common
stock to Richard E. Otto as consideration for his service as a member of the
board of directors and related committees of Scivanta in 2006 and
2007.  The warrant has a five year term and is exercisable at $0.20
per share.  The shares of common stock underlying the warrant vest or
vested as follows:  100,000 shares vested immediately on February 5,
2007; 7,250 shares vested on each of March 31, 2007, June 30, 2007 and September
30, 2007; 27,250 shares vested on December 31, 2007; 20,000 shares vested on
December 31, 2008; and 20,000 shares vest on each of December 31, 2009 and
December 31, 2010.  In the event of a change in control of Scivanta,
as defined in the warrant, the warrant becomes fully vested as of ten days prior
to the change in control.  As of October 31, 2009, 169,000 shares
underlying the warrant were available for purchase and 40,000 shares underlying
the warrant were unvested and were not yet available for purchase.




Warrant
Issued to Former Director Dated February 5, 2007




On
February 5, 2007, Scivanta issued a warrant to purchase 100,000 shares of common
stock to John A. Moore as consideration for his service as a member of the board
of directors and related committees of Scivanta in 2006.  The warrant
has a five year term and is exercisable at $0.20 per share.  As of
October 31, 2009, all 100,000 shares underlying the warrant were available for
purchase.




Warrant
Issued to Consultant Dated January 1, 2007




On
January 1, 2007, Scivanta issued a warrant to purchase 125,000 shares of common
stock to the principal owner of the Investors Relations Group in connection with
an investor relations and public relations consulting agreement entered into by
Scivanta and the Investors Relations Group.  The warrant has a five
year term and is exercisable at $0.25 per share until December 31,
2012.  As of October 31, 2009, 93,750 shares underlying the warrant
were available for purchase and 31,250 shares underlying the warrant were
cancelled.




Warrant
Issued to Director Dated February 25, 2005




On
February 5, 2007, Scivanta issued a warrant to purchase 200,000 shares of common
stock to Richard E. Otto as consideration for his service as a member of the
board of directors and related committees of Scivanta in 2005.  The
warrant has a five year term and is exercisable at $0.03 per
share.  As of October 31, 2009, all 200,000 shares underlying the
warrant were available for purchase.




Warrant
Issued to Century Capital Dated May 14, 2004




On May 14, 2004, Scivanta issued a
warrant to purchase 700,000 shares of common stock to Century Capital as partial
consideration for consulting services.  The warrant has a ten year
term and is exercisable at $0.04 per share.  As of October 31, 2009,
500,000 shares underlying the warrant had been purchased and 200,000 shares
underlying the warrant were available for purchase.


34


Item
      13.
            Certain Relationships
      and Related Transactions and Director
  Independence





Certain
Relationships and Related Transactions




David R.
LaVance, Scivanta’s Chairman, President and Chief Executive Officer, and Thomas
S. Gifford, the Scivanta’s Executive Vice President, Chief Financial Officer and
Secretary, are principals of Century Capital, a consulting
firm.   Effective February 1, 2007, Scivanta and Century Capital
entered into a Sublease Agreement pursuant to which Scivanta rents office space
approximating 2,000 square feet inside Century Capital’s existing
offices.  In addition, Scivanta 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.  Scivanta is responsible for all operating costs
associated with the office space, including utilities, maintenance and property
taxes.




During
the fiscal year ended October 31, 2009, Scivanta was billed $70,679 pursuant to
the terms of the Sublease Agreement.  As of October 31, 2009, Scivanta
owed Century Capital $900 for expenses due under the Sublease Agreement and $883
for other expenses, which amounts are included in accounts payable – related
party and were paid by Scivanta subsequent to October 31, 2009.




Director
Independence





Richard
E. Otto, Lawrence M. Levy and Anthony Giordano, III each qualify as independent
directors in accordance with NASDAQ’s definition of “independent director” and
the rules and regulations of the SEC.  Messrs. Otto, Levy and Giordano
also serve on the audit committee and qualify as independent directors for the
audit committee in accordance with NASDAQ’s definition of “independent director”
and the rules and regulations of the SEC.




Item
      14.
            Principal Accountant
      Fees and Services





Audit Fees.Scivanta
was billed $58,400 and $55,800 by Weiser LLP for audit fees relating to
Scivanta’s fiscal years ended October 31, 2009 and 2008,
respectively.  Audit fees incurred in each of the fiscal years ended
October 31, 2009 and 2008 consisted of fees for the audit of Scivanta’s annual
financial statements and review of quarterly financial statements.





Audit Related
Fees.  Scivanta did not incur any fees associated with audit
related services with Weiser LLP, or any other accounting firm, relating to
fiscal years ended October 31, 2009 and 2008.  Audit-related fees are
fees for assurance and related services, including primarily employee benefit
plan audits, due diligence related to acquisitions, accounting consultations in
connection with acquisitions, consultation concerning financial accounting and
reporting standards and consultation concerning matters related to Section 404
of the Sarbanes Oxley Act of 2002.





Tax Fees.  Scivanta
did not incur any fees associated with tax services relating to the fiscal years
ended October 31, 2009 and 2008.


35


All Other
Fees.  Scivanta did not incur any fees associated with
non-audit services with Weiser LLP, or any other accounting firm, relating to
fiscal years ended October 31, 2009 and 2008.





Pre-Approval Policies and
Procedures.  The audit committee is responsible for appointing,
setting compensation and overseeing the work of the independent registered
public accounting firm.  In accordance with its charter, the audit
committee approves, in advance, all audit and permissible non-audit services to
be performed by the independent registered public accounting
firm.  Such approval process ensures that the independent registered
public accounting firm does not provide any non-audit services to Scivanta that
are prohibited by law or regulation.





PART
IV




Item
      15.
            Exhibits and Financial
      Statement Schedules




(a)
            Exhibits


Reference
is made to the Index of Exhibits beginning on page E-1 of this
report.




(b)
            Financial Statement
      Schedules


Reference
is made to the Index of Financial Statements on page F-1 of this
report.  No schedules are included with the financial statements
because the required information is inapplicable or is presented in the
financial statements or notes thereto.


36


SIGNATURES





In accordance with Section 13 or 15(d)
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 CORPORATIONJanuary
      29, 2010
                By:
                /s/  David R.
    LaVanceDavid
      R. LaVanceChairman
      of the Board of Directors,
                  President
      and Chief Executive
Officer





In accordance with the Exchange Act,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.





Signatures
              
              Title
              
              Date/s/  David R.
    LaVance
              
              Chairman
      of the Board of
              
              January
      29, 2010David
      R. LaVance
              
              Directors,
      President andChief
      Executive Officer/s/  Thomas S.
      Gifford
              
              Executive
      Vice President,
              
              January
      29, 2010Thomas
      S. Gifford
              
              Chief
      Financial Officer,Secretary
      and Director/s/  Richard E.
    Otto
              
              Director
              
              January
      29, 2010Richard
      E. Otto/s/  Lawrence M.
    Levy
              
              Director
              
              January
      29, 2010Lawrence
      M. Levy/s/  Anthony Giordano,
      III
              
              Director
              
              January
      29, 2010Anthony
      Giordano, III




37


Scivanta
Medical Corporation





Financial
Statements





Contents





Report
      of Independent Registered Public Accounting Firm
                F-2Balance
      Sheets as of October 31, 2009 and 2008
                F-3Statements
      of Operations for the Years Ended October 31, 2009 and
2008
                F-4Statements
      of Stockholders’ Equity (Deficiency) for the Years Ended October 31, 2009
      and 2008
                F-5Statements
      of Cash Flows for the Years Ended October 31, 2009 and
2008
                F-6Notes
      to the Financial Statements
                F-7




F-1


REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors and


Stockholders
of Scivanta Medical Corporation





We have
audited the accompanying balance sheets of Scivanta Medical Corporation (the
“Company”), as of October 31, 2009 and 2008 and the related statements of
operations, stockholders’ equity (deficiency) and cash flows for the years then
ended.  These financial statements are the responsibility of the
Company’s management.  Our responsibility is to express an opinion on
these financial statements based upon our audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged, to perform an audit of its
internal control over financial reporting.  Our audits include
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Scivanta Medical Corporation as of
October 31, 2009 and 2008 and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 2 to the
financial statements, the Company has incurred significant recurring operating
losses and negative cash flows from operations.  The Company also has
no lending relationships with commercial banks and is dependent on the
completion of a financing in order to continue operations.  These
factors raise substantial doubt about the Company’s ability to continue as a
going concern.  Management’s plans in regard to these matters are also
described in Note 2.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.





/s/
Weiser LLP





New York,
New York


January
29, 2010


F-2


Scivanta
Medical Corporation


Balance
Sheets





October 31,
                    2009
                  
                  
                  October 31,
                    2008AssetsCurrent
      assets:Cash
      and cash equivalents
                  
                  $
                  97,415
                  
                  
                  $
                  598,644Prepaid
      expenses and other
                  
                  
                  10,331
                  
                  
                  
                  33,286Tax
      loss receivable
                  
                  
                  179,468
                  
                  
                  
                  512,354Other
      receivables
                  
                  
                  —
                  
                  
                  
                  211,438Total
      current assets
                  
                  
                  287,214
                  
                  
                  
                  1,355,722Other
                  
                  
                  2,527
                  
                  
                  
                  7,568Total
      assets
                  
                  $
                  289,741
                  
                  
                  $
                  1,363,290LiabilitiesCurrent
      liabilities:Accounts
      payable
                  
                  $
                  269,913
                  
                  
                  $
                  226,909Accounts
      payable - related party
                  
                  
                  1,783
                  
                  
                  
                  2,632Accrued
      expenses
                  
                  
                  42,181
                  
                  
                  
                  20,821Accrued
      compensation
                  
                  
                  262,417
                  
                  
                  
                  102,000Notes
      payable
                  
                  
                  162,286
                  
                  
                  
                  34,567Convertible
      debentures
                  
                  
                  250,000
                  
                  
                  
                  —Total
      current liabilities
                  
                  
                  988,580
                  
                  
                  
                  386,929Long-term
      liabilities:Note
      payable
                  
                  
                  —
                  
                  
                  
                  158,438Convertible
      debentures
                  
                  
                  —
                  
                  
                  
                  250,000Total
      long-term liabilities
                  
                  
                  —
                  
                  
                  
                  408,438Commitments
      and contingenciesStockholders'
      (deficiency) equityCommon
      stock, $.001 par value; 100,000,000 shares authorized; 26,981,210 and
      26,852,364 shares issued and outstanding, respectively
                  
                  
                  26,981
                  
                  
                  
                  26,852Additional
      paid-in capital
                  
                  
                  21,009,649
                  
                  
                  
                  20,853,626Accumulated
      deficit
                  
                  
                  (21,735,469
                  )
                  
                  
                  (20,312,555
                  )Total
      stockholders' (deficiency) equity
                  
                  
                  (698,839
                  )
                  
                  
                  567,923Total
      liabilities and stockholders' (deficiency) equity
                  
                  $
                  289,741
                  
                  
                  $
                  1,363,290





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


F-3


Scivanta
Medical Corporation


Statements
of Operations





Years Ended
                    October 31,2009
                  
                  
                  2008Net
      sales
                  
                  $
                  —
                  
                  
                  $
                  —Cost
      of sales
                  
                  
                  —
                  
                  
                  
                  —Gross
      profit
                  
                  
                  —
                  
                  
                  
                  —Operating
      expenses:Research
      and development, net
                  
                  
                  257,288
                  
                  
                  
                  718,183General
      and administrative
                  
                  
                  1,326,802
                  
                  
                  
                  1,463,561Loss
      from operations
                  
                  
                  (1,584,090
                  )
                  
                  
                  (2,181,744
                  )Other
      income (expense):Interest
      income
                  
                  
                  2,941
                  
                  
                  
                  43,598Interest
      expense
                  
                  
                  (21,233
                  )
                  
                  
                  (30,700
                  )Loss
      before income tax benefit
                  
                  
                  (1,602,382
                  )
                  
                  
                  (2,168,846
                  )Income
      tax benefit
                  
                  
                  179,468
                  
                  
                  
                  512,354Net
      loss
                  
                  $
                  (1,422,914
                  )
                  
                  $
                  (1,656,492
                  )Net
      loss per common share, basic and diluted
                  
                  $
                  (0.05
                  )
                  
                  $
                  (0.06
                  )Weighted
      average number of common shares outstanding, basic and
    diluted
                  
                  
                  26,944,145
                  
                  
                  
                  25,833,551





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


F-4


Scivanta
Medical Corporation


Statements
of Stockholders’ Equity (Deficiency)


For
the Years Ended October 31, 2009 and 2008





TotalCommon Stock
                    
                    
                    Additional
                    
                    
                    
                    
                    
                    Stockholders'Number
                    
                    
                    $0.001
                    
                    
                    Paid-in
                    
                    
                    Accumulated
                    
                    
                    Equityof Shares
                    
                    
                    Par Value
                    
                    
                    Capital
                    
                    
                    Deficit
                    
                    
                    (Deficiency)Balance
      at October 31, 2007
                    
                    
                    25,750,444
                    
                    
                    $
                    25,750
                    
                    
                    $
                    20,528,807
                    
                    
                    $
                    (18,656,063
                    )
                    
                    $
                    1,898,494Shares
      issued to consultants as payment for services rendered
                    
                    
                    100,000
                    
                    
                    
                    100
                    
                    
                    
                    3,400
                    
                    
                    
                    
                    
                    
                    
                    3,500Shares
      issued as additional consideration under technology license
      agreement
                    
                    
                    814,020
                    
                    
                    
                    814
                    
                    
                    
                    145,710
                    
                    
                    
                    
                    
                    
                    
                    146,524Shares
      issued as partial payment of note payable
                    
                    
                    187,900
                    
                    
                    
                    188
                    
                    
                    
                    33,634
                    
                    
                    
                    
                    
                    
                    
                    33,822Stock
      based compensation
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    142,075
                    
                    
                    
                    
                    
                    
                    
                    142,075Net
      loss
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (1,656,492
                    )
                    
                    
                    (1,656,492
                    )Balance
      at October 31, 2008
                    
                    
                    26,852,364
                    
                    
                    
                    26,852
                    
                    
                    
                    20,853,626
                    
                    
                    
                    (20,312,555
                    )
                    
                    
                    567,923Shares
      cancelled previously issued to consultants
                    
                    
                    (25,000
                    )
                    
                    
                    (25
                    )
                    
                    
                    25
                    
                    
                    
                    
                    
                    
                    
                    —Shares
      issued as payment of interest due on the February 1, 2007 convertible
      debentures
                    
                    
                    153,846
                    
                    
                    
                    154
                    
                    
                    
                    19,846
                    
                    
                    
                    
                    
                    
                    
                    20,000Stock
      based compensation
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    136,152
                    
                    
                    
                    
                    
                    
                    
                    136,152Net
      loss
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (1,422,914
                    )
                    
                    
                    (1,422,914
                    )Balance
      at October 31, 2009
                    
                    
                    26,981,210
                    
                    
                    $
                    26,981
                    
                    
                    $
                    21,009,649
                    
                    
                    $
                    (21,735,469
                    )
                    
                    $
                    (698,839
                    )





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


F-5


Scivanta
Medical Corporation


Statements
of Cash Flows




Years Ended
                  October 31,2009
                
                
                2008Cash
      flows from operating activities:Net
      loss
                
                $
                (1,422,914
                )
                
                $
                (1,656,492
                )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
                
                
                5,041
                
                
                
                3,040Stock
      based compensation expense
                
                
                136,152
                
                
                
                145,575License
      expense
                
                
                —
                
                
                
                304,962Interest
      imputed on note payable
                
                
                —
                
                
                
                10,700Changes
      in operating assets and liabilities:Prepaid
      expenses and other
                
                
                52,560
                
                
                
                21,698Tax
      loss receivable
                
                
                332,886
                
                
                
                (205,551
                )Other
      receivables
                
                
                211,438
                
                
                
                (157,955
                )Deposit
                
                
                —
                
                
                
                60,000Accounts
      payable
                
                
                43,004
                
                
                
                140,948Accounts
      payable - related party
                
                
                (849
                )
                
                
                209Accrued
      expenses
                
                
                41,360
                
                
                
                (16,731
                )Accrued
      compensation
                
                
                160,417
                
                
                
                17,000Net
      cash used in operating activities
                
                
                (440,905
                )
                
                
                (1,332,597
                )Cash
      flows from investing activity:Purchase
      of fixed assets
                
                
                —
                
                
                
                (4,000
                )Cash
      flows from financing activity:Repayment
      of notes payable
                
                
                (60,324
                )
                
                
                (73,668
                )Decrease
      in cash and cash equivalents
                
                
                (501,229
                )
                
                
                (1,410,265
                )Cash
      and cash equivalents - beginning of period
                
                
                598,644
                
                
                
                2,008,909Cash
      and cash equivalents - end of period
                
                $
                97,415
                
                
                $
                598,644Supplemental
      disclosure of cash flow information:Cash
      paid for interest
                
                $
                1,233
                
                
                $
                20,000Cash
      paid for income taxes
                
                $
                2,415
                
                
                $
                1,820Noncash
      operating activity:Issuance
      of common stock as payment for consulting services
                
                $
                —
                
                
                $
                10,125Noncash
      investing and financing activities:Issuance
      of notes payable as payment for insurance premiums
                
                $
                29,605
                
                
                $
                —Issuance
      of 153,846 shares of common stock as payment of accrued interest on
      convertible debentures
                
                $
                20,000
                
                
                $
                —Issuance
      of 187,900 shares of common stock as partial payment of note payable
      related to technology license
                
                $
                —
                
                
                $
                33,822Issuance
      of note payable as additional payment for technology
    license
                
                $
                —
                
                
                $
                158,438




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


F-6


Scivanta
Medical Corporation


Notes
to the Financial Statements





1.
            Organization
      and Description of Business




Scivanta
Medical Corporation (“Scivanta” or the “Company”), originally incorporated in
New Jersey on November 29, 1982, is currently a Nevada corporation headquartered
in Spring Lake, New Jersey.  The Company ceased selling all products
during the fiscal year ended October 31, 2004 and has not had any revenue from
the sale of products since the second quarter of 2003.




On
November 10, 2006, the Company acquired the exclusive world-wide rights to
develop, manufacture and distribute certain proprietary technologies known as
the Scivanta Cardiac Monitoring System (the “SCMS”), formerly known as the
Hickey Cardiac Monitoring System (HCMS), a minimally invasive two-balloon
esophageal catheter system used to monitor cardiac performance.  The
SCMS will provide the primary measurements of cardiac performance, including
left atrial pressure, which is a crucial measurement in monitoring cardiac
challenged patients.  The essential hardware, software and catheter
components for the SCMS have been completed.  Scivanta currently has a
fully assembled SCMS device that has been used in initial clinical trials. The
two major items remaining in the development of the SCMS are the completion of
the clinical trials and the design and engineering of the production model of
the SCMS.




The
Company will not be able to complete the clinical trials or the design and
engineering of the production model of the SCMS without obtaining additional
cash through an equity and/or debt financing or through corporate
partnerships.  The Company is aggressively pursuing potential
investors and has engaged several placement agents to assist in this
endeavor.  No assurances can be given that we will be able to obtain
sufficient capital to finish the development of the SCMS through any corporate
partnerships and/or through equity and/or debt financing.  In
addition, no assurances can be given that if we successfully develop and market
the SCMS, such product will become profitable.




Depending
upon Scivanta’s ability to secure additional financing, the length of the
clinical trials and the length of the FDA’s review, Scivanta estimates that it
could have 510(k) premarket notification clearance from the FDA for the SCMS by
the end of September 2010, which will allow Scivanta to commence sales of the
SCMS in the United States shortly thereafter.  Scivanta estimates that
it will commence European sales within three months following the commencement
of United States sales.




2.
            Basis
      of Presentation




The
accompanying financial statements have been prepared assuming that Scivanta will
continue as a going concern.  The Company has incurred significant
recurring operating losses, negative cash flows from operations, a working
capital deficiency and has an accumulated deficit of $21,735,469 as of October
31, 2009.  The Company also has no lending relationships with
commercial banks and is dependent on the completion of a financing in order to
continue operations.  The current economic slowdown could make
financing more difficult to obtain.  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.


F-7


The
Company continues to seek equity and or debt investors and has engaged several
placement agents to assist the Company in this initiative.  In
addition, the Company is reducing operating expenses, deferring vendor payments,
deferring payment of a portion of the officers’ salaries ($160,417 as of October
31, 2009) and deferring payment of $102,000 of bonus awards for fiscal 2008
($82,500 due to officers).  While the Company is aggressively pursuing
the opportunities and actions described above, there can be no assurance that
the Company will be successful in its capital raising efforts.  If the
Company is unable to secure additional capital, it will explore strategic
alternatives, including, but not limited to, the possible sale of the
Company.  Any additional equity financing may result in substantial
dilution to the Company’s stockholders.




3.
            Summary
      of Significant Accounting Policies




Use
of Estimates




The
preparation of the financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.




Although
the Company regularly assesses these estimates, actual results could differ
materially from these estimates. Changes in estimates are recorded in the period
in which they become known.  The Company based its estimates on
historical experience and various other assumptions that it believes to be
reasonable under the circumstances.  Actual results may differ from
management’s estimates if past experience or other assumptions do not turn out
to be substantially accurate.  All of these estimates reflect
management's best judgment about current economic and market conditions and
their effects based on information available as of the date of these financial
statements.  If such conditions persist longer or deteriorate further
than expected, it is reasonably possible that the judgments and estimates could
change.




Fair
Value of Financial Instruments




The
carrying amounts of the Company’s financial instruments, which include cash and
cash equivalents, tax loss receivable, other receivables, accounts payable and
accrued expenses, approximate their fair values due to their short
maturities.




The fair
value of the convertible debentures and the notes payable approximate the
unamortized portion of the principal amounts thereof, as such investments are at
market rates currently available to the Company.




Cash
and Cash Equivalents




The
Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.  Cash and cash
equivalents consist of cash on deposit with banks and money market
instruments.  The Company places its cash and cash equivalents with
established United States of America financial institutions.


F-8


Concentration
of Credit Risk




The
Company has no significant off balance sheet risk such as foreign exchange
contracts, option contracts or other foreign hedging
arrangements.  The Company’s financial instruments that are exposed to
concentration of credit risks consist primarily of cash and cash
equivalents.  The Company maintains its cash and cash equivalents in
bank accounts which, at times, exceed federally-insured limits.  The
Company invests its cash in high-quality money market instruments andhas not experienced any
losses in such accounts and, accordingly, believes it is not exposed to
significant credit risk on cash and cash equivalents.




Property
and Equipment




Property
and equipment are stated at cost, less accumulated
depreciation.  Depreciation is computed using the straight-line method
over the estimated useful lives of the respective assets which average from
three to seven years. Leasehold improvements are amortized over the lesser of
the lease term or the estimated useful lives of the related
assets.  Expenditures for repairs and maintenance are expensed as
incurred.  Gross assets as of both October 31, 2009 and 2008 amounted
to $14,095 and accumulated depreciation amounted to $11,568 and $6,527,
respectively.  The net book value as of October 31, 2009 and 2008 of
$2,527 and $7,568, respectively, represents the entire balance of other
assets.




Income
Taxes




The
Company provides for deferred income taxes in accordance with Accounting
Standards Codification (“ASC”) 740, “Income Taxes” (“ASC 740”).  ASC
740 requires an asset and liability approach for financial accounting and
reporting for income taxes based on tax effects of differences between the
financial statement and tax bases of assets and liabilities, based on enacted
rates expected to be in effect when such basis differences reverse in future
periods.  Deferred tax assets are reduced by a valuation allowance,
when in the opinion of management, it is more likely than not that some portion
or all of the deferred tax asset will not be realized.  Valuation
allowances are recorded when realizability of deferred tax assets is not
likely.




Research
and Development




The
Company expenses research and development costs as incurred.  Advance
payments related to development agreements are recorded as prepaid expenses and
expensed as the work is performed.  Initial and milestone payments
made to third parties in connection with technology license agreements are also
expensed as incurred as research and development costs, up to the point of
regulatory approval.  Payments made to third parties subsequent to
regulatory approval will be capitalized and amortized over the estimated
remaining useful life of the related product.  The SCMS is currently
in the development stage and has not received regulatory approval.




Stock
Based Compensation




The
Company accounts for stock-based payments to employees in accordance with 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.


F-9


The
Company accounts for stock-based payments to non-employees in accordance with
ASC 718 and Topic 505-50, “Equity-Based Payments to
Non-Employees.’   All stock-based payments to non-employees are
issuances of warrants that are recognized in the statement of operations based
on the value of the vested portion of the warrant issuance as measured at its
then-current fair value as of each financial reporting date.





The
Company calculates the fair value of option grants and warrant issuances
utilizing the Black-Scholes pricing model.  The amount of stock-based
compensation recognized during a period is based on the value of the portion of
the awards that are ultimately expected to vest.  ASC 718 requires
forfeitures to be estimated at the time stock options are granted and warrants
are issued to employees and revised, if necessary, in subsequent periods if
actual forfeitures differ from those estimates.  The term
“forfeitures” is distinct from “cancellations” or expirations” and represents
only the unvested portion of the surrendered stock option or
warrant.  Scivanta estimates forfeiture rates for all unvested awards
when calculating the expense for the period.  In estimating the
forfeiture rate, Scivanta monitors both stock option and warrant exercises as
well as employee termination patterns.




The
resulting stock-based compensation expense for both employee and non-employee
awards is generally recognized on a straight-line basis over the requisite
service period of the award.




During
the fiscal years ended October 31, 2009 and 2008, the Company recorded
stock-based compensation expense as follows:





Year Ended
                    October 31,2009
                  
                  
                  2008Research
      and development
                  
                  $
                  (3,871
                  )
                  
                  $
                  32,009General
      and administrative
                  
                  
                  140,023
                  
                  
                  
                  113,566Total
                  
                  $
                  136,152
                  
                  
                  $
                  145,575





For the
fiscal years ended October 31, 2009 and 2008, the Company recorded stock-based
compensation expense related to stock options granted to employees of $140,023
and $94,748, respectively.





For the
fiscal year ended October 31, 2009, the Company recorded a reduction of $3,871
to stock-based compensation expense related to warrants issued to
non-employees.  This reduction resulted from the variable accounting
treatment associated with these warrants.  Stock-based compensation
expense related to warrants issued to non-employees during the fiscal year ended
October 31, 2008 amounted to $50,827.




During
the fiscal year ended October 31, 2009, the Company granted 625,000 stock
options to its employees (estimated fair value of $62,788 at the date of grant)
and granted 111,000 stock options to its directors (estimated fair value of
$11,151 at the date of grant) (see Note 7).





During
the fiscal year ended October 31, 2008, the Company granted 250,000 options to
its employees (estimated value of $17,498 at the date of grant) and granted
81,000 options to its directors (estimated value of $5,670 at the date of
grant).  During the fiscal year ended October 31, 2008, the Company
issued warrants to purchase 555,000 shares of common stock of the Company to
consultants (see Note 7).


F-10


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.  The
dilutive effect of the outstanding stock options and warrants is computed using
the treasury stock method.




For the
fiscal year ended October 31, 2009, diluted net loss per share did not include
the effect of 2,537,000 shares of common stock issuable upon the exercise of
outstanding options, 1,496,750 shares of common stock issuable upon the exercise
of outstanding warrants and 1,041,677 shares of common stock issuable upon the
conversion of convertible debt, as their effect would be
anti-dilutive.




For the
fiscal year ended October 31, 2008, diluted net loss per share did not include
the effect of 1,801,000 shares of common stock issuable upon the exercise of
outstanding options, 1,838,350 shares of common stock issuable upon the exercise
of outstanding warrants and 1,041,677 shares of common stock issuable upon the
conversion of convertible debt, as their effect would be
anti-dilutive.




Subsequent
Events




Management
has evaluated subsequent events from the fiscal year ended October 31, 2009
through January 29, 2010, which is the date the Company's financial statements
were issued.  No material subsequent events have occurred since the
fiscal year ended October 31, 2009 through January 29, 2010 that would
require recognition or additional disclosure in these financial statements (see
Note 5).




Recent
Accounting Pronouncements Applicable to the Company




Effective
November 1, 2008, Scivanta adopted ASC 820, "Fair Value Measurements and
Disclosures” (“ASC 820”).  This guidance establishes a new framework
for measuring fair value and expands related disclosures.  This
framework does not require any new fair value measurements, but provides
guidance on how to measure fair value by providing a fair value hierarchy used
to classify the source of the information.  Effective April 1, 2009,
the FASB amended ASC 820 in relation to determining fair value when the volume
and level of activity for an asset or liability have significantly decreased and
identifying transactions that are not orderly.  The adoption of ASC
820 did not have a significant impact on Scivanta’s financial position or
results of operations.





In June
2009, the FASB established the FASB Accounting Standards Codification, or the
Codification, which on July 1, 2009 became the single official source of
authoritative, nongovernmental generally accepted accounting principles,
superseding all existing non-SEC accounting and reporting
standards.  The Codification does not change U.S. generally accepted
accounting principles but instead reorganizes the U.S. generally accepted
accounting principles pronouncements into accounting topics, and displays all
topics using a consistent structure.  As a result, all references to
accounting literature in our SEC filings will conform to the appropriate
reference within the Codification.  The adoption of the Codification,
which became effective during September 2009, did not have any impact on
Scivanta’s financial position or results of operations.


F-11


In August
2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-05, “Fair
Value Measurements and Disclosures” (“ASU 2009-05”).  ASU 2009-05
amends ASC 820 by providing additional guidance clarifying the measurement of
liabilities at fair value.  ASU 2009-05 did not have a significant
impact on Scivanta’s financial position or results of operations.





The
Company is not aware of other recently issued, but not yet effective, accounting
standards that would have a significant impact on the Company’s financial
position or results of operations.





Reclassifications





Certain
prior year balances have been reclassified to conform to the current financial
statement presentation.





4.
            License
      and Development Agreements




SCMS
License Agreement




On
November 10, 2006, Scivanta entered into a technology license agreement (the
“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 License Agreement was amended on June 29, 2007,
October 24, 2008, January 6, 2009 and October 29, 2009.




Pursuant
to the License Agreement, the Licensor granted Scivanta 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.  The term of the License Agreement commenced on November
10, 2006 and ends on the later of (a) the expiration date of the last to expire
patent right related to the SCMS, which is currently May 1, 2027, or (b)
thirteen years from the sale of the first licensed product on a country by
country basis.




Scivanta
agreed to make an initial payment of $264,300 which was subsequently reduced to
$262,957 pursuant to the first amendment to the License Agreement dated June 29,
2007.  Scivanta paid $40,900 on November 16, 2006, $80,000 on October
31, 2007 and was required to pay $142,057 on November 1,
2008.  Pursuant to the second amendment to the License Agreement dated
October 24, 2008, the $142,057 payment was restructured as
follows:  (a) $39,101 was paid in cash to Hickey on October 24, 2008;
(b) $34,567 was paid in cash to Lundgren on October 24, 2008; (c) $33,822 was
paid by issuing 187,900 shares of our common stock to the Foundation on October
28, 2008; and (d) $34,567 was paid in cash to Lundgren on February 4,
2009.


F-12


Further,
pursuant to the second amendment to the License Agreement dated October 24,
2008, any milestone payments that Scivanta was required or may have been
required to pay to the Licensor under the original terms of the License
Agreement were eliminated in exchange for the following:  (a) a
one-time cash payment by Scivanta to Hickey of $158,438 due on the date that was
thirty days after the first commercial sale of a product utilizing the licensed
technology, but no later than December 31, 2009; (b) the issuance of 224,960
shares of our common stock to the Foundation on October 28, 2008;
(c)  the issuance of 162,500 shares of our common stock to Hickey on
October 28, 2008 and (d) the issuance of 426,560 shares of our common stock to
Lundgren on October 28, 2008.




Pursuant
to the fourth amendment to the License Agreement, the payment of $158,438 that
was due to Hickey no later than December 31, 2009 was restructured as
follows:  (a) a cash payment of $50,000 is due to Hickey on or before
February 28, 2010 and (b) a cash payment of $108,438 is due to Hickey on the
date that is thirty (30) days after the first commercial sale of a product
utilizing the licensed technology, but no later than October 31,
2010.  In addition, certain product development milestones and
timeframes were modified as was the term of the Technology License
Agreement.  Further, certain reporting requirements to the Licensor
related to product development were modified and certain observation rights were
granted to the Foundation.




Pursuant
to the License Agreement, Scivanta is required to pay the Licensor a royalty of
5% on annual net sales, as defined in the License Agreement, subject to certain
reductions as detailed in the License Agreement.  Beginning with the
first full year of sales of the SCMS in the United States and for two years
thereafter, Scivanta is required to pay an annual minimum royalty of $100,000 to
the Licensor against which any royalty on net sales paid in the same calendar
year for sales in the United States will be credited.  Further,
beginning with the first full year of sales of the SCMS outside the United
States and for two years thereafter, Scivanta is required to pay an annual
minimum royalty of $100,000 to the Licensor against which any royalty on net
sales paid in the same calendar year for sales outside the United States will be
credited.  The Company is also required to pay the Licensor 25% of all
sublicensing revenue, as defined in the License Agreement, received by the
Company in connection with the Company’s sublicense of the rights granted to the
Company under the License Agreement.




The
License Agreement also requires Scivanta to use commercially reasonable efforts
to commercialize and market the SCMS within certain timeframes, subject to
specified exceptions, as detailed in the License Agreement, the third amendment
to the License Agreement dated January 6, 2009 and the fourth amendment to the
License Agreement dated October 29, 2009.  Further, the License
Agreement contains standard provisions regarding indemnification, termination
and patent prosecution.




Subcontractor
Agreement and NYSTAR Contract




On June
27, 2007, Scivanta and the Foundation entered into a subcontractor
agreement.  Pursuant to this agreement, the Foundation contracted
Scivanta to develop the software and hardware components of the SCMS outlined in
the contract awarded by the New York State Office of Science Technology and
Academic Research (“NYSTAR”) to the Foundation and the Foundation’s company
partner, Ethox International, Inc. (“Ethox”), on December 1, 2005 (the “NYSTAR
Contract”).  On November 30, 2008, the NYSTAR Contract
expired.




Pursuant
to the first amendment to the License Agreement dated June 29, 2007, the
Licensor and Ethox entered into a non-exclusive manufacturing license agreement,
dated June 29, 2007, whereby Ethox was granted the right to manufacture the
catheter component of the SCMS for Scivanta.


F-13


As a
result of the subcontractor agreement, the first amendment to the License
Agreement and the non-exclusive license agreement between the Licensor and
Ethox, the development of the SCMS was partially funded through the NYSTAR
Contract.  Pursuant to the terms of the NYSTAR Contract, $937,500 of
funding was available for the development of the SCMS with the State of New York
providing $750,000 and Ethox providing $187,500 of the funding.  Ethox
and Hickey also provided $535,500 and $27,000, respectively, of in-kind
contributions.




Pursuant
to the development agreement between Scivanta and Ethox dated June 29, 2007,
Scivanta provided Ethox with the $187,500 of cash required under the NYSTAR
Contract while Ethox provided the $562,500 of in-kind contributions (primarily
contributed services).  The funding received from the NYSTAR Contract
partially supported the development of:  the catheter component of the
SCMS by Ethox; the software component of the SCMS by Applied Sciences Group,
Inc. (“ASG”); the hardware component of the SCMS by Sparton Medical Systems
(“Sparton”) and the related clinical trials.  Under the terms of the
subcontractor agreement between the Foundation and Scivanta, the Foundation,
utilizing the $937,500 of funding provided under the NYSTAR Contract, reimbursed
Scivanta $928,580 of allowable expenditures incurred by Scivanta in connection
with the development of the software and hardware components of the SCMS and
related clinical trials.




As of
November 30, 2008, no further amounts were available for reimbursement to
Scivanta under the NYSTAR Contract.  For the fiscal years ended
October 31, 2009 and 2008, Scivanta submitted to the Foundation for
reimbursement $19,110 and $855,987, respectively, of expenses related to the
software and hardware development of the SCMS and the related clinical trials,
which were recorded by Scivanta as a reduction to research and development
expenses.




Ethox
Development Agreement




On June
29, 2007, Scivanta and Ethox entered into a development agreement whereby Ethox
will provide Scivanta engineering and development support for the catheter
component of the SCMS in exchange for the rights to manufacture the component
upon regulatory approval and commercialization of the SCMS.  Pursuant
to the development agreement, Scivanta paid $187,500 to Ethox in connection with
the NYSTAR Contract funding in $46,875 installments on each of September 12,
2007, February 13, 2008, June 16, 2008 and August 27, 2008.  These
payments were recognized as research and development expense on a pro-rata basis
as the SCMS was developed pursuant to the NYSTAR Contract and were fully
recognized as of October 31, 2008.  During the fiscal year ended
October 31, 2008, Scivanta recorded $169,690 of research and development expense
related to the NYSTAR Contract payment.




The
development agreement had a two year term that expired on June 29,
2009.  The services provided by Ethox included:  (1) the
management of project costs and schedule, (2) the development of system
functional specifications based on marketing inputs, (3) the development of
disposable catheter specifications to achieve functional requirements, (4) the
manufacturing of disposable catheters in accordance with applicable requirements
for clinical trials, and (5) the provision of regulatory resources for the
management of clinical submissions for marketing approval from the
FDA.  Pursuant to the development agreement, Scivanta is responsible
for the selection and costs of all raw materials and for the packaging
design.  During the term of the development agreement and for a period
of twelve months thereafter, Ethox will not participate in the design,
development, creation or production of a double balloon catheter to be used as
part of a cardiac monitoring system for any party other than
Scivanta.  The development agreement also contained standard
provisions regarding indemnification and termination.  Scivanta and
Ethox are currently negotiating an extension of the development
agreement.  Ethox is continuing to provide services under the
development agreement during the negotiations.


F-14


Terms for
the manufacturing of the catheter component of the SCMS are contained in a
supply agreement which will be entered into by Scivanta and Ethox upon
regulatory approval of the SCMS.  The supply agreement will have a
four year term commencing on the date of the first commercial production of the
catheter component of the SCMS, and thereafter shall renew on an annual basis
unless terminated by either party in accordance with the supply
agreement.  The supply agreement will also contain a minimum order
requirement, a pricing schedule and will provide for an additional payment to
Ethox of up to $535,000, which will be paid to Ethox over the term of the supply
agreement on a per unit basis based on the minimum number of units that Scivanta
is required to order under the supply agreement.




During
the fiscal years ended October 31, 2009 and 2008, Scivanta submitted to Ethox
for reimbursement $0 and $119,874, respectively, of expenses related to the
software and hardware development of the SCMS, which amounts were recorded by
Scivanta as a reduction to research and development expense.




ASG
Development Agreement




On July
2, 2007, the Company entered into a development agreement with
ASG.  Pursuant to the terms of this agreement, ASG will provide
software engineering services to Scivanta on the continuing development of the
SCMS.  Scivanta can terminate the agreement at any time upon written
notification.  For the fiscal years ended October 31, 2009 and 2008,
the Company recorded $103,569 and $374,540, respectively, of research and
development expense for services and materials provided under this development
agreement.




Sparton
Development Agreement




On August
22, 2007, Scivanta and Sparton, a business group of Sparton Electronics Florida,
Inc., entered into a development agreement whereby Sparton provided Scivanta
engineering and development support for the hardware component of the
SCMS.  On October 1, 2008, Scivanta terminated the development
agreement with Sparton.  For the fiscal year ended October 31, 2008,
Scivanta recorded $608,630 of research and development expense for services and
materials provided under the development agreement.




Rivertek
Service Agreement




On
February 1, 2008, Scivanta and Rivertek Medical Systems, Inc. (“Rivertek”)
entered into a service agreement, which was amended on April 28, 2008, whereby
Rivertek provided Scivanta with project management services related to the
development of the SCMS.  The service agreement was amended and
restated on February 5, 2009.  Pursuant to the amended and restated
service agreement, Rivertek will assist Scivanta in the development of the
hardware component of the SCMS and will continue to assist in the management of
the development of the software and catheter components of the
SCMS.  The amended and restated service agreement will expire on
December 31, 2010 and can be terminated earlier by either party upon three days
written notice.  The services rendered to Scivanta provided under this
contract are to be billed on a time and material basis.


F-15


On April
28, 2008, Scivanta issued a warrant to purchase 125,000 shares of its common
stock to Rivertek as partial consideration for services rendered under the
service agreement.  During the fiscal years ended October 31, 2009 and
2008, Scivanta recorded $110,638 and $143,115 respectively, of research and
development expense for services and materials provided under both the service
agreement and the amended and restated service agreement.





5.
            Income
      Taxes




In
December 2009, the Company was approved by the New Jersey Economic Development
Authority (the “NJEDA”) to participate in the 2009 NJEDA Technology Business Tax
Certificate Transfer Program.  This program enables approved,
unprofitable technology companies based in the State of New Jersey to sell their
unused net operating loss carryovers and unused research and development tax
credits to unaffiliated, profitable corporate taxpayers in the State of New
Jersey for at least 75% of the value of the tax benefits.  On January
20, 2010, the Company received $179,468 of net proceeds ($206,782 gross proceeds
less $27,314 of expenses incurred) from a third party related to the sale of
approximately $2,298,000 of our unused net operating loss carryovers for the
State of New Jersey.  The Company will use these proceeds for working
capital purposes.




In
November 2008, the Company was approved by the NJEDA to participate in the 2008
NJEDA Technology Business Tax Certificate Transfer Program.  On
December 18, 2008, the Company received $512,354 of net proceeds ($585,061 gross
proceeds less $72,707 of expenses incurred) from a third party related to the
sale of approximately $6,500,000 of its unused net operating loss carryovers for
the State of New Jersey.




The
difference between the statutory federal income tax rate on the Company’s
pre-tax loss and the Company’s effective income tax rate is summarized as
follows:





Years EndedOctober 31,
                  2009
                
                
                October 31,
                  2008Amount
                
                
                Percent
                
                
                Amount
                
                
                PercentIncome
      tax provision at federal statutory rate
                
                $
                (544,810
                )
                
                
                34
                %
                
                $
                (737,408
                )
                
                
                34
                %Effect
      of state taxes, net of federal benefit
                
                
                (96,143
                )
                
                
                6
                
                
                
                (130,131
                )
                
                
                6Change
      in valuation allowance
                
                
                430,095
                
                
                
                (27
                )
                
                
                272,700
                
                
                
                (13
                )Stock
      based compensation
                
                
                54,461
                
                
                
                (4
                )
                
                
                58,230
                
                
                
                (3
                )License
      costs
                
                
                (14,536
                )
                
                
                1
                
                
                
                115,362
                
                
                
                (5
                )Other
                
                
                (8,535
                )
                
                
                1
                
                
                
                (91,107
                )
                
                
                4$
                (179,468
                )
                
                
                11
                %
                
                $
                (512,354
                )
                
                
                23
                %





Significant
components of the Company’s deferred tax assets as of October 31, 2009 and 2008
are shown below.  In determining the realizability of the Company’s
deferred tax assets, the Company considered numerous factors, including
historical profitability, estimated future taxable income and the industry in
which it operates.  As of October 31, 2009 and 2008, a valuation
allowance was recorded to fully offset the net deferred tax asset, as it was
determined by management that the realization of the deferred tax asset was not
likely to occur in the foreseeable future.  The valuation allowance
increased $430,095 during the fiscal year ended October 31, 2009, attributable
primarily to the non-realizability of the Company’s net operating
losses.


F-16


The tax
effects of temporary differences and carryforwards that give rise to deferred
taxes consist of the following:




Years Ended
                    October 31,2009
                  
                  
                  2008Net
      operating loss
                  
                  $
                  5,401,962
                  
                  
                  $
                  5,012,956Write-down
      of impaired assets
                  
                  
                  77,883
                  
                  
                  
                  77,883Depreciation
      and amortization
                  
                  
                  60,691
                  
                  
                  
                  59,467License
      costs
                  
                  
                  188,547
                  
                  
                  
                  203,061Stock
      based compensation
                  
                  
                  173,039
                  
                  
                  
                  118,660Other
                  
                  
                  5,076
                  
                  
                  
                  5,076Total
      gross deferred tax assets
                  
                  
                  5,907,198
                  
                  
                  
                  5,477,103Valuation
      allowance
                  
                  
                  (5,907,198
                  )
                  
                  
                  (5,477,103
                  )Net
      deferred tax assets
                  
                  $
                  —
                  
                  
                  $
                  —





As of
October 31, 2009, the Company had federal and state operating losses of
approximately $15,953,000 and $2,529,000.  The federal operating
losses begin to expire in the year 2022 through 2029 and the state operating
losses begin to expire in the year 2015 through 2016.





Utilization
of the net operating loss carryforwards may be subject to a substantial annual
limitation due to the ownership change limitations provided by the Internal
Revenue Code of 1986, as amended (the “Internal Revenue Code”), and similar
state provisions.  The Company has not performed a detailed analysis
to determine whether an ownership change under Section 382 of the Internal
Revenue Code occurred.  The effect of an ownership change would be the
imposition of an annual limitation on the use of net operating loss
carryforwards attributable to periods before the change.




6.
            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 fiscal year ended October 31, 2009, the Company was billed $70,679 pursuant
to the terms of the Sublease Agreement.  As of October 31, 2009, the
Company owed Century Capital $900 for expenses due under the Sublease Agreement
and $883 for other expenses, which amounts are included in accounts payable –
related party and were paid by the Company subsequent to October 31,
2009.  During the fiscal year ended October 31, 2008, the Company was
billed $70,120 pursuant to the terms of the Sublease Agreement.


F-17


7.
            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.  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 2,000,000.  As
of October 31, 2009, options to purchase 1,470,000 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 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 aggregate number of shares of common stock which may be
awarded under the 2007 Equity Incentive Plan is 3,000,000, subject to adjustment
as provided in the 2007 Equity Incentive Plan.  As of October 31,
2009, options to purchase 1,067,000 shares of the Company’s common stock were
outstanding under the 2007 Equity Incentive Plan and up to 1,933,000 additional
shares of the Company’s common stock can be awarded under the 2007 Equity
Incentive Plan.




Stock
option awards under the 2002 Equity Incentive Plan and the 2007 Equity Incentive
Plan 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 and vest over a period of up
to five years and have a maximum term of ten years from the date of
grant.


F-18


A summary of stock option transactions
for employees and directors under the 2002 Equity Incentive Plan and the 2007
Equity Incentive Plan during the fiscal years ended October 31, 2009 and 2008
were as follows:




Stock
                    Option
                    Shares
                  
                  
                  Weighted
                    Average
                    Exercise
                    Price Per
                    Common
                    Share
                  
                  
                  Aggregate
                    Intrinsic
                    ValueOutstanding
      at October 31, 2007
                  
                  
                  1,470,000
                  
                  
                  $
                  0.17
                  
                  
                  $
                  13,200Granted
      during the period
                  
                  
                  331,000
                  
                  
                  $
                  0.14Exercised
      during the period
                  
                  
                  —
                  
                  
                  
                  —Terminated
      during the period
                  
                  
                  —
                  
                  
                  
                  —Outstanding
      at October 31, 2008
                  
                  
                  1,801,000
                  
                  
                  $
                  0.16
                  
                  
                  $
                  52,340Granted
      during the period
                  
                  
                  736,000
                  
                  
                  $
                  0.14Exercised
      during the period
                  
                  
                  —
                  
                  
                  
                  —Terminated
      during the period
                  
                  
                  —
                  
                  
                  
                  —Outstanding
      at October 31, 2009
                  
                  
                  2,537,000
                  
                  
                  $
                  0.16
                  
                  
                  $
                  1,750Exercisable
      at October 31, 2009
                  
                  
                  1,658,248
                  
                  
                  $
                  0.16
                  
                  
                  $
                  1,750Exercisable
      at October 31, 2008
                  
                  
                  1,077,083
                  
                  
                  $
                  0.16
                  
                  
                  $
                  45,673





The fair
value of the stock options granted during the fiscal years ended October 31,
2009 and 2008 was determined using the Black Scholes option pricing model with
the following assumptions:




Year EndedOctober 31,
                      2009
                    
                    
                    October 31,
                      2008Risk-free
      interest rates
                    
                    
                    1.60
                    %
                    
                    
                    3.45
                    %Expected
      life (in years)
                    
                    
                    5.0
                    
                    
                    
                    5.0Expected
      volatility
                    
                    
                    93.86
                    %
                    
                    
                    53.90
                    %Dividend
      yield
                    
                    
                    0.00
                    %
                    
                    
                    0.00
                    %





The
risk-free interest rate is based on a treasury instrument whose term is
consistent with the expected life of the stock options at the date of
grant.  In projecting expected stock price volatility, the Company
used historical stock price volatility of its common stock which the Company
believes is representative of future volatility.  The Company
estimated the expected life of stock options based on historical experience
using employee exercise and option expiration data.


F-19


Information
with respect to outstanding options and options exercisable as of October 31,
2009 that were granted to employees is as follows:





Stock Options Outstanding
                              
                              
                              Stock Options ExercisableExercise
                                  Price
                              
                              
                              Number of
                                  Shares
                                  Available
                                  Under
                                  Outstanding
                                  Stock
                                  Options
                              
                              
                              Weighted
                                  Average
                                  Remaining
                                  Contractual
                                  Life (Years)
                              
                              
                              Weighted
                                  Average
                                  Exercise
                                  Price Per
                                  Common
                                  Share
                              
                              
                              Number of
                                  Shares
                                  Available
                                  for
                                  Purchase
                                  Under
                                  Outstanding
                                  Stock
                                  Options
                              
                              
                              Weighted
                                  Average
                                  Exercise
                                  Price Per
                                  Common
                                  Share
                              
                              
                              Weighted
                                  Average
                                  Remaining
                                  Contractual
                                  Life (Years)$
                              0.02
                              
                              
                              
                              35,000
                              
                              
                              
                              5.2
                              
                              
                              $
                              0.02
                              
                              
                              
                              35,000
                              
                              
                              $
                              0.02
                              
                              
                              
                              5.2$
                              0.08
                              
                              
                              
                              335,000
                              
                              
                              
                              4.8
                              
                              
                              $
                              0.08
                              
                              
                              
                              335,000
                              
                              
                              $
                              0.08
                              
                              
                              
                              4.8$
                              0.14
                              
                              
                              
                              1,067,000
                              
                              
                              
                              8.0
                              
                              
                              $
                              0.14
                              
                              
                              
                              247,582
                              
                              
                              $
                              0.14
                              
                              
                              
                              6.9$
                              0.20
                              
                              
                              
                              1,100,000
                              
                              
                              
                              7.3
                              
                              
                              $
                              0.20
                              
                              
                              
                              1,040,666
                              
                              
                              $
                              0.20
                              
                              
                              
                              7.32,537,000
                              
                              
                              
                              7.2
                              
                              
                              $
                              0.16
                              
                              
                              
                              1,658,248
                              
                              
                              $
                              0.16
                              
                              
                              
                              6.7




A summary
of the nonvested shares subject to options granted under the 2002 Equity
Incentive Plan and the 2007 Equity Incentive Plan as of October 31, 2009 and
2008 were as follows:





Stock
                      Option
                      Shares
                    
                    
                    Weighted
                      Average
                      Grant Date
                      Fair Value
                      Per ShareNonvested
      at October 31, 2007
                    
                    
                    848,000
                    
                    
                    $
                    0.19Granted
      during the period
                    
                    
                    331,000
                    
                    
                    $
                    0.14Vested
      during the period
                    
                    
                    (455,083
                    )
                    
                    $
                    0.19Terminated
      during the period
                    
                    
                    —
                    
                    
                    
                    —Nonvested
      at October 31, 2008
                    
                    
                    723,917
                    
                    
                    $
                    0.14Granted
      during the period
                    
                    
                    736,000
                    
                    
                    $
                    0.10Vested
      during the period
                    
                    
                    (581,165
                    )
                    
                    $
                    0.15Terminated
      during the period
                    
                    
                    —
                    
                    
                    
                    —Nonvested
      at October 31, 2009
                    
                    
                    878,752
                    
                    
                    $
                    0.10





As of
October 31, 2009, there was $61,227 of total unrecognized compensation cost
related to nonvested share based compensation arrangements granted under the
2002 Equity Incentive Plan and the 2007 Equity Incentive Plan.  That
cost is expected to be recognized over a weighted average period of ten
months.


F-20


Warrants
to Purchase Common Stock




A summary
of warrant transactions during the fiscal years ended October 31, 2009 and 2008
were as follows:




Warrant
                    Shares
                  
                  
                  Weighted
                    Average
                    Exercise
                    Price Per
                    Common
                    Share
                  
                  
                  Aggregate
                    Intrinsic
                    ValueOutstanding
      at October 31, 2007
                  
                  
                  1,847,932
                  
                  
                  $
                  0.17
                  
                  
                  $
                  48,662Issued
      during the period
                  
                  
                  555,000
                  
                  
                  $
                  0.18Exercised
      during the period
                  
                  
                  —
                  
                  
                  
                  —Terminated
      during the period
                  
                  
                  (564,582
                  )
                  
                  $
                  0.26Outstanding
      at October 31, 2008
                  
                  
                  1,838,350
                  
                  
                  $
                  0.14
                  
                  
                  $
                  109,574Issued
      during the period
                  
                  
                  —
                  
                  
                  
                  —Exercised
      during the period
                  
                  
                  —
                  
                  
                  
                  —Terminated
      during the period
                  
                  
                  (341,600
                  )
                  
                  $
                  0.10Outstanding
      at October 31, 2009
                  
                  
                  1,496,750
                  
                  
                  $
                  0.15
                  
                  
                  $
                  14,000Exercisable
      at October 31, 2009
                  
                  
                  1,376,750
                  
                  
                  $
                  0.15
                  
                  
                  $
                  14,000Exercisable
      at October 31, 2008
                  
                  
                  1,488,852
                  
                  
                  $
                  0.13
                  
                  
                  $
                  104,849





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 fair market
value of the Company's common stock on the date of issuance.  Warrants
issued vest over a period of up to five years and have a maximum term of five
years from the date of issuance.





The fair
value of the warrants issued during the fiscal year ended October 31, 2008 was
determined using the Black Scholes option pricing model with the following
assumptions:





Risk-free
      interest rates
                  2.30%
      - 2.80%Expected
      life (in years)
                  4.0
      - 5.0Expected
      volatility
                  69.77%
      - 70.66%Dividend
      yield
                  0.00%





The
risk-free interest rate is based on a treasury instrument whose term is
consistent with the expected life of the stock options.  In projecting
expected stock price volatility, the Company used historical stock price
volatility of its common stock which the Company believes is representative of
future volatility.  The Company estimated the expected life of
warrants based on historical experience using employee exercise and option
expiration data.


F-21


Information
with respect to outstanding warrants and warrants exercisable at October 31,
2009 is as follows:




Warrants Outstanding
                  
                  
                  Warrants ExercisableRange of
                      Exercise
                      Prices
                  
                  
                  Number of
                      Shares
                      Available
                      Under
                      Outstanding
                      Warrants
                  
                  
                  Weighted
                      Average
                      Remaining
                      Contractual
                      Life (Years)
                  
                  
                  Weighted
                      Average
                      Exercise
                      Price Per
                      Common
                      Share
                  
                  
                  Number of
                      Shares
                      Available
                      for
                      Purchase
                      Under
                      Outstanding
                      Warrants
                  
                  
                  Weighted
                      Average
                      Exercise
                      Price Per
                      Common
                      Share
                  
                  
                  Weighted
                      Average
                      Remaining
                      Contractual
                      Life (Years)$
                  0.03
      - 0.04
                  
                  
                  
                  400,000
                  
                  
                  
                  2.4
                  
                  
                  $
                  0.04
                  
                  
                  
                  400,000
                  
                  
                  $
                  0.04
                  
                  
                  
                  2.4$
                  0.13
                  
                  
                  
                  285,000
                  
                  
                  
                  3.2
                  
                  
                  $
                  0.13
                  
                  
                  
                  285,000
                  
                  
                  $
                  0.13
                  
                  
                  
                  3.2$
                  0.20
      - 0.25
                  
                  
                  
                  811,750
                  
                  
                  
                  2.6
                  
                  
                  $
                  0.22
                  
                  
                  
                  691,750
                  
                  
                  $
                  0.22
                  
                  
                  
                  2.71,496,750
                  
                  
                  
                  2.7
                  
                  
                  $
                  0.15
                  
                  
                  
                  1,376,750
                  
                  
                  $
                  0.15
                  
                  
                  
                  2.7





A summary
of the nonvested shares subject to warrants as of October 31, 2009 and 2008 is
as follows:





Warrant
                      Shares
                    
                    
                    Weighted
                      Average
                      Grant Date
                      Fair Value
                      Per ShareNonvested
      at October 31, 2007
                    
                    
                    292,000
                    
                    
                    $
                    0.24Issued
      during the period
                    
                    
                    555,000
                    
                    
                    $
                    0.18Vested
      during the period
                    
                    
                    (466,252
                    )
                    
                    $
                    0.18Terminated
      during the period
                    
                    
                    (31,250
                    )
                    
                    $
                    0.25Nonvested
      at October 31, 2008
                    
                    
                    349,498
                    
                    
                    $
                    0.14Issued
      during the period
                    
                    
                    —
                    
                    
                    
                    —Vested
      during the period
                    
                    
                    (154,498
                    )
                    
                    $
                    0.13Terminated
      during the period
                    
                    
                    (75,000
                    )
                    
                    $
                    0.03Nonvested
      at October 31, 2009
                    
                    
                    120,000
                    
                    
                    $
                    0.22





As of
October 31, 2009, there was $15,525 of total unrecognized compensation cost
related to nonvested share based compensation arrangements involving
warrants.  That cost is expected to be recognized over a weighted
average period of eight months.





8.
            Convertible
      Debentures




On
February 8, 2007, the Company closed on a private placement of 8% convertible
debentures dated February 1, 2007 (the “February 2007
Debentures”).  The gross proceeds received in connection with this
private placement were $250,000.  The February 2007 Debentures
originally had a three year term, maturing on January 31, 2010.  In
January 2010, the holders agreed to amend the February 2007
Debentures.  Pursuant to this amendment to the February 2007
Debentures, the holders agreed to a new maturity date of January 31, 2012,
extending the term of the February 2007 Debentures an additional two
years.  The February 2007 Debentures bear interest at a rate of 8% per
annum.  Interest is payable in annual installments, beginning on
February 1, 2008, in cash or, at the option of the Company, in shares of the
Company’s common stock.  If the Company elects to pay the interest in
shares of the Company’s common stock, the number of shares issued as payment
will be equal to the quotient of the unpaid interest divided by the market price
of the Company’s common stock as defined in the February 2007
Debentures.


F-22


Up to 50%
of the aggregate principal amount of the February 2007 Debentures are
convertible into shares of the Company’s common stock at the option of the
holders at a conversion price of $0.20 per share.  The remaining 50%
of the aggregate principal amount of the February 2007 Debentures are
convertible at the option of the holders at a conversion price of $0.30 per
share.  The fair value of the Company’s common stock as of February 1,
2007 was $0.20 per share.  An aggregate amount of 1,041,667 shares of
common stock can be issued pursuant to the February 2007
Debentures.  The February 2007 Debentures contain demand registration
rights upon the request of the holders of more than 50% of the aggregate
principal amount of the then outstanding February 2007 Debentures or the
securities issuable upon the conversion of the February 2007
Debentures.  The Company has determined that the value attributable to
the demand registration rights is de minimis.




On
February 1, 2009, the Company issued 153,846 shares of its common stock to the
February 2007 Debenture holders as payment for $20,000 of interest due for the
period commencing February 1, 2008 and ending January 31, 2009.  The
number of shares issued as payment of the interest due was calculated based on
the market price of the Company’s common stock ($0.13 per share) as defined in
the February 2007 Debentures.




For each
of the fiscal years ended October 31, 2009 and 2008, the Company recorded a
total of $20,000 of interest expense related to the February 2007
Debentures.  As of October 31, 2009, $15,000 of interest due on the
February 2007 Debentures was accrued.




9.
            Notes
      Payable




Note
Payable – SCMS License Agreement




Pursuant
to the terms of the License Agreement, as amended (see Note 4 – SCMS License
Agreement), the Company was required to make a payment to the Licensor of
$262,957.  This payment obligation was non-interest
bearing.  The Company paid $40,900 on November 16, 2006 and $80,000 on
October 31, 2007.   Pursuant to a second amendment to the License
Agreement dated October 24, 2008, the Company paid the remaining outstanding
amount of $142,057 as follows:  a) $73,668 was paid in cash ($39,101
to Hickey and $34,567 to Lundgren) on October 24, 2008; b) $33,822 was paid on
October 28, 2008 by issuing 187,900 shares of the Company’s common stock to the
Foundation; and c) $34,567 was paid in cash to Lundgren on February 4,
2009.




The
Company recorded a note payable on November 10, 2006 of $235,557 based on the
present value of the original payment obligation, as amended, with a
corresponding discount rate of 8%.  The difference between the present
value of the original payment obligation, as amended ($235,557), and the face
value of the original payment obligation, as amended ($262,957), was accreted as
interest expense through November 1, 2008, the original maturity date of the
payment obligation (total imputed interest of $27,400).  For the
fiscal year ended October 31, 2008, the Company recognized $10,700 of interest
expense related to the note payable.


F-23


Note
Payable – Hickey





Pursuant
to the second amendment to the License Agreement dated October 24, 2008, the
Company is required to make a one-time cash payment to Hickey of
$158,438.  This payment is due on the date that is thirty days after
the first commercial sale of a product utilizing the licensed technology, but no
later than December 31, 2009.





Pursuant
to the fourth amendment to the License Agreement, the payment of $158,438 that
was due to Hickey no later than December 31, 2009 was restructured as
follows:  (a) a cash payment of $50,000 is due to Hickey on or before
February 28, 2010 and (b) a cash payment of $108,438 is due to Hickey on the
date that is thirty (30) days after the first commercial sale of a product
utilizing the licensed technology, but no later than October 31,
2010.




Notes
Payable – Insurance





On
January 9, 2009, the Company entered into a finance agreement with AICCO, Inc.
(“AICCO”).  Pursuant to the terms of this agreement, AICCO loaned the
Company the principal amount of $24,706, which amount would accrue interest at a
rate of 10.93% per annum, in order to partially fund the payment of the premium
of the Company’s director and officer liability insurance.  The
agreement required the Company to make nine monthly payments of $2,872,
including interest, commencing on January 28, 2009 and ending on September 28,
2009.  For the fiscal year ended October 31, 2009, the Company
recorded a total of $1,139 of interest expense related to this finance
agreement.  As of October 31, 2009, the principal balance related to
this finance agreement was paid in full by the Company.





On July
29, 2009, the Company entered into a finance agreement with
AICCO.  Pursuant to the terms of this agreement, AICCO loaned the
Company the principal amount of $4,899, which amount would accrue interest at a
rate of 12.24% per annum, in order to partially fund the payment of the premium
of the Company’s workers compensation and general liability
insurance.  The agreement requires the Company to make nine monthly
payments of $572, including interest.  The first payment was made by
the Company on August 26, 2009.  For the fiscal year ended October 31,
2009, the Company recorded a total of $95 of interest expense related to this
finance agreement.  As of October 31, 2009, the outstanding principal
balance related to this finance agreement was $3,848.





10.
            Commitments
      and Contingencies




Executive
Employment Agreements




On
January 1, 2008, the Company entered into an executive employment agreement with
each of David R. LaVance, the Company’s President and Chief Executive Officer,
and Thomas S. Gifford, the Company’s Executive Vice President, Chief Financial
Officer and Secretary (collectively, the “Employment
Agreements”).  The term of each of the Employment Agreements commenced
on January 1, 2008 and ends on December 31, 2010, but can be renewed for
successive one year periods unless terminated as provided in the Employment
Agreements.  Both Messrs. LaVance and Gifford shall be paid an annual
base salary of $275,000, which may be increased by the compensation committee of
the Company’s board of directors.  In addition, both Messrs. LaVance
and Gifford shall participate in the Company’s benefit programs and shall be
eligible to receive an annual performance bonus based on the achievement of
certain performance objectives as determined by the compensation committee of
the Company’s board of directors.


F-24


In the
event that Mr. LaVance or Mr. Gifford is terminated without Good Cause (as
defined in the Employment Agreements and used herein), or Mr. LaVance or Mr.
Gifford terminates his employment for Good Reason (as defined in the Employment
Agreements and used herein), Mr. LaVance or Mr. Gifford, as the case may be,
will be entitled to receive a severance payment equal to his annual base salary
in effect on the date of termination.




In
addition, in the event that within one-hundred eighty days of a Change of
Control (as defined in the Employment Agreements and used herein) of the
Company, the employment of Mr. LaVance or Mr. Gifford is terminated by the
Company or its successor without Good Cause, or Mr. LaVance or Mr. Gifford
terminates his employment with the Company or its successor for Good Reason, Mr.
LaVance or Mr. Gifford, as the case may be, shall be paid a severance payment;
provided however, that if the termination of employment occurs prior to the
Change of Control, the Change of Control must have been considered by the
Company at the time of termination for Mr. LaVance or Mr. Gifford to be entitled
to the severance payment.  The amount of the severance payment will be
equal to two times the sum of Mr. LaVance’s or Mr. Gifford’s annual base salary
in effect immediately prior to the termination of Mr. LaVance’s or Mr. Gifford’s
employment and an amount which is the lesser of (1) $150,000 and (2) the
aggregate amount of any bonuses paid to Mr. LaVance or Mr. Gifford during the
twelve months prior to the earlier of (A) the effective date of the Change of
Control and (B) the date Mr. LaVance’s or Mr. Gifford’s employment terminates
with the Company.




As of
October 31, 2009, the Company had accrued $242,917 of compensation payments
related to the Employment Agreements.  Of this amount, $160,147
related to salary payments due to Messrs. LaVance and Gifford for the fiscal
year ended October 31, 2009 and $82,500 related to bonus payments due to Messrs.
LaVance and Gifford for the fiscal year ended October 31, 2008.


F-25


INDEX
OF EXHIBITS




Exhibit No.
                            
                            Description of Exhibit3.1
                            
                            Restated
      Articles of Incorporation of Scivanta Medical Corporation, formerly
      Medi-Hut Co., Inc. (the “Registrant”), which was filed in the Office of
      the Secretary of State of the State of Nevada on January 23, 2007
      (Incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly
      Report on Form 10-QSB for the quarter ended January 31, 2006, filed with
      the Securities and Exchange Commission (the “SEC”) on January 29,
      2007).3.2
                            
                            Amended
      and Restated Bylaws of the Registrant (Incorporated by reference to
      Exhibit 3.2 to the Registrant’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 Registrant’s common stock (Incorporated
      by reference to Exhibit 4.1 to the Registrant’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); Alan Eicoff ($25,000); Jack W. Cumming ($25,000); Scott C.
      Withrow ($25,000); Terrence McQuade ($25,000); Steven J. Olsen ($25,000);
      Robert P. Reynolds ($12,500); Chartwell Partners, LLP ($12,500); and Marc
      G. Robinson and Joshua Goldfarb ($25,000)  (Incorporated by
      reference to Exhibit 4.8 to the Registrant’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 4.2.10.1
                            
                            The
      Registrant’s 2002 Equity Incentive Plan, adopted and effective January 1,
      2002 (Incorporated by reference to Exhibit B of the Registrant’s
      definitive proxy statement, filed with the SEC on June 10,
      2002).10.2
                            
                            Sublease
      Agreement, dated February 1, 2007, between the Registrant and Century
      Capital Associates LLC (Incorporated by reference to Exhibit 10.14 to the
      Registrant’s Quarterly Report on Form 10-QSB for the quarter ended January
      31, 2007, filed with the SEC on March 14, 2007).10.3
                            
                            Technology
      License Agreement between the Registrant 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 November 10, 2006
      (Incorporated by reference to Exhibit 10.24 to the Registrant’s Current
      Report on Form 8-K filed with the SEC on November 14,
    2006).


E-1





Exhibit No.
                          
                          Description of Exhibit10.4
                          
                          Addendum
      to the Technology License Agreement, dated November 10, 2006, between the
      Registrant and The Research Foundation of State University of New York,
      for and on behalf of the University at Buffalo, and Donald D. Hickey, M.D.
      and Clas E. Lundgren, dated June 29, 2007 (Incorporated by reference to
      Exhibit 10.18 to the Registrant’s Current Report on Form 8-K filed with
      the SEC on July 3, 2007).10.5
                          
                          Second
      Addendum to the Technology License Agreement dated November 10, 2006,
      between the Registrant and The Research Foundation of State University of
      New York, for and on behalf of the University at Buffalo, and Donald D.
      Hickey, M.D. and Clas E. Lundgren, dated October 24, 2007 (Incorporated by
      reference to Exhibit 10.25 to the Registrant’s Current Report on Form 8-K
      filed with the SEC on October 28, 2008).10.6
                          
                          Third
      Addendum to the Technology License Agreement dated November 10, 2006,
      between the Registrant and The Research Foundation of State University of
      New York, for and on behalf of the University at Buffalo, and Donald D.
      Hickey, M.D. and Clas E. Lundgren, dated December 10, 2008 (Incorporated
      by reference to Exhibit 10.13 to the Registrant’s Annual Report on Form
      10-KSB for the fiscal year ended October 31, 2008, filed with the SEC on
      January 29, 2009).10.7
                          
                          Fourth
      Addendum to the Technology License Agreement dated November 10, 2006,
      between the Registrant and The Research Foundation of State University of
      New York, for and on behalf of the University at Buffalo, and Donald D.
      Hickey, M.D. and Clas E. Lundgren, dated October 29, 2009 (Incorporated by
      reference to Exhibit 10.31 to the Registrant’s Current Report on Form 8-K
      filed with the SEC on October 30, 2008).10.8*
                          
                          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 Registrant
      (Incorporated by reference to Exhibit 10.16 to the Registrant’s Quarterly
      Report on Form 10-QSB for the quarter ended January 31, 2007, filed with
      the SEC on March 14, 2007).10.9*
                          
                          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 Registrant
      (Incorporated by reference to Exhibit 10.17 to the Registrant’s Quarterly
      Report on Form 10-QSB for the quarter ended January 31, 2007, filed with
      the SEC on March 14, 2007).10.10*
                          
                          Warrant
      to purchase 209,000 shares of common stock of the Registrant, dated
      February 5, 2007, issued to Richard E. Otto (Incorporated by reference to
      Exhibit 10.18 to the Registrant’s Quarterly Report on Form 10-QSB for the
      quarter ended January 31, 2007, filed with the SEC on March 14,
      2007).


E-2





Exhibit No.
                            
                            Description of Exhibit10.11*
                            
                            Warrant
      to purchase 105,000 shares of common stock of the Registrant, dated March
      15, 2007, issued to Lawrence M. Levy (Incorporated by reference to Exhibit
      10.19 to the Registrant’s Current Report on Form 8-K filed with the SEC on
      March 19, 2007).10.12*
                            
                            Warrant
      to purchase 109,000 shares of common stock of the Registrant, dated March
      15, 2007, issued to Anthony Giordano, III (Incorporated by reference to
      Exhibit 10.19 to the Registrant’s Current Report on Form 8-K filed with
      the SEC on March 19, 2007).10.13
                            
                            The
      Registrant’s 2007 Equity Incentive Plan, adopted and effective May 31,
      2007 (Incorporated by reference to Appendix to the Registrant’s definitive
      proxy statement, filed with the SEC on April 27, 2007).10.14
                            
                            Product
      Development Agreement, dated June 29, 2007, between the Registrant and
      Ethox International, Inc. including Schedule 2.4 – Form of Agreement to
      Manufacture Disposable Catheters.  Upon the request of the SEC,
      the Registrant agrees to furnish copies of each of the following
      schedules:  Schedule 2.1 – Project Costs and Schedule; Schedule
      2.2 – System Hardware and Software Specifications; and Schedule 2.3 –
      Disposable Catheter Specifications (Incorporated by reference to Exhibit
      10.17 to the Registrant’s Current Report on Form 8-K filed with the SEC on
      July 3, 2007).10.15
                            
                            Software
      Engineering Agreement, dated July 2, 2007, between the Registrant and
      Applied Sciences Group, Inc. (Incorporated by reference to Exhibit 10.19
      to the Registrant’s Current Report on Form 8-K filed with the SEC on July
      3, 2007).10.16
                            
                            Product
      Development Agreement, dated August 23, 2007, between the Registrant and
      Sparton Medical Systems, a business group of Sparton Electronics Florida,
      Inc., including Exhibit B – Change Approval Form and Exhibit D – Payment
      Terms.  Upon the request of the SEC, the Registrant agrees to
      furnish copies of each of the following exhibits:  Exhibit A –
      Statement of Work; and Exhibit C – Sparton Medical Systems Labor Rates
      (Incorporated by reference to Exhibit 10.20 to the Registrant’s Current
      Report on Form 8-K filed with the SEC on August 23,
  2007).10.17
                            
                            Service
      Agreement, dated February 1, 2008, between the Registrant and Rivertek
      Medical Systems, Inc. (Incorporated by reference to Exhibit 10.23 to the
      Registrant’s Annual Report on Form 10-KSB for the fiscal year ended
      October 31, 2008, filed with the SEC on January 29,
  2009).10.18
                            
                            Amendment
      No. 1 to the Service Agreement dated February 1, 2008 between the
      Registrant and Rivertek Medical Systems, Inc., dated April 28,
      2008.  (Incorporated by reference to Exhibit 10.24 to the
      Registrant’s Annual Report on Form 10-KSB for the fiscal year ended
      October 31, 2008, filed with the SEC on January 29,
  2009).


E-3





Exhibit No.
                            
                            Description of Exhibit10.19
                            
                            Amended
      and Restated Service Agreement dated February 5, 2009 between the
      Registrant and Rivertek Medical Systems, Inc. (Incorporated by reference
      to Exhibit 10.25 to the Registrant’s Quarterly Report on Form 10-Q for the
      quarter ended January 31, 2009, filed with the SEC on March 17,
      2009).10.20*
                            
                            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 Registrant
      (Incorporated by reference to Exhibit 10.21 to the Registrant’s Current
      Report on Form 8-K filed with the SEC on January 2,
  2008).10.21*
                            
                            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 Registrant
      (Incorporated by reference to Exhibit 10.22 to the Registrant’s Current
      Report on Form 8-K filed with the SEC on January 2,
  2008).10.22*
                            
                            Stock
      Option Agreement and Notice of Grant, dated January 1, 2008, pursuant to
      which Richard E. Otto was granted a non-qualified stock option to purchase
      up to 27,000 shares of common stock of the Registrant (Incorporated by
      reference to Exhibit 10.23 to the Registrant’s Current Report on Form 8-K
      filed with the SEC on January 2, 2008).10.23*
                            
                            Stock
      Option Agreement and Notice of Grant, dated January 1, 2008, pursuant to
      which Lawrence M. Levy was granted a non-qualified stock option to
      purchase up to 25,000 shares of common stock of the Registrant
      (Incorporated by reference to Exhibit 10.24 to the Registrant’s Current
      Report on Form 8-K filed with the SEC on January 2,
  2008).10.24*
                            
                            Stock
      Option Agreement and Notice of Grant, dated January 1, 2008, pursuant to
      which Anthony Giordano, III was granted a non-qualified stock option to
      purchase up to 29,000 shares of common stock of the Registrant
      (Incorporated by reference to Exhibit 10.25 to the Registrant’s Current
      Report on Form 8-K filed with the SEC on January 2,
  2008).10.25*
                            
                            Executive
      Employment Agreement, dated as of January 1, 2008, between the Registrant
      and David R. LaVance (Incorporated by reference to Exhibit 10.26 to the
      Registrant’s Current Report on Form 8-K filed with the SEC on January 2,
      2008).10.26*
                            
                            Executive
      Employment Agreement, dated as of January 1, 2008, between the Registrant
      and Thomas S. Gifford (Incorporated by reference to Exhibit 10.27 to the
      Registrant’s Current Report on Form 8-K filed with the SEC on January 2,
      2008).


E-4





Exhibit No.
                        
                        Description of Exhibit10.27*
                        
                        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 250,000 shares of common stock of the
      Registrant.  (Incorporated by reference to Exhibit 10.32 to the
      Registrant’s Annual Report on Form 10-KSB for the fiscal year ended
      October 31, 2008, filed with the SEC on January 29,
  2009).10.28*
                        
                        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 250,000 shares of common stock of the
      Registrant.  (Incorporated by reference to Exhibit 10.33 to the
      Registrant’s Annual Report on Form 10-KSB for the fiscal year ended
      October 31, 2008, filed with the SEC on January 29,
  2009).10.29*
                        
                        Stock
      Option Agreement and Notice of Grant, dated January 21, 2009, pursuant to
      which Richard E. Otto was granted a non-qualified stock option to purchase
      up to 37,000 shares of common stock of the
      Registrant.  (Incorporated by reference to Exhibit 10.34 to the
      Registrant’s Annual Report on Form 10-KSB for the fiscal year ended
      October 31, 2008, filed with the SEC on January 29,
  2009).10.30*
                        
                        Stock
      Option Agreement and Notice of Grant, dated January 21, 2009, pursuant to
      which Lawrence M. Levy was granted a non-qualified stock option to
      purchase up to 35,000 shares of common stock of the
      Registrant.  (Incorporated by reference to Exhibit 10.35 to the
      Registrant’s Annual Report on Form 10-KSB for the fiscal year ended
      October 31, 2008, filed with the SEC on January 29,
  2009).10.31*
                        
                        Stock
      Option Agreement and Notice of Grant, dated January 21, 2009, pursuant to
      which Anthony Giordano, III was granted a non-qualified stock option to
      purchase up to 39,000 shares of common stock of the
      Registrant.  (Incorporated by reference to Exhibit 10.36 to the
      Registrant’s Annual Report on Form 10-KSB for the fiscal year ended
      October 31, 2008, filed with the SEC on January 29,
  2009).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.




*
Constitutes a management contract.


E-5