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STOCK BASED COMPENSATION | 3 Months Ended
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Jan. 31, 2022
Share-based Payment Arrangement [Abstract] |
STOCK BASED COMPENSATION |
2. | STOCK BASED COMPENSATION
The Company maintains stock equity incentive plans under which the Company grants incentive stock options, non-qualified stock options, stock appreciation rights, stock awards, performance awards, or stock units to employees, directors and consultants. Stock Option Compensation Expense The compensation cost for service-based stock options granted to employees and directors is measured at the grant date, based on the fair value of the award using the Black-Scholes pricing model, and is expensed on a straight-line basis over the requisite service period (the vesting period of the stock option) which is one to four years. We recorded stock-based compensation expense related to service-based stock options granted to employees and directors of approximately $730,000 and $875,000 during the three months ended January 31, 2022 and 2021. For stock options granted to employees and directors that vest based on market conditions, such as the trading price of the Company’s common stock exceeding certain price targets, we use a Monte Carlo Simulation in estimating the fair value at grant date and recognize compensation cost over the implied service period (median time to vest). On June 1, 2021, our Chairman, President and Chief Executive Officer and our Chief Operating Officer and Chief Financial Officer were awarded market condition stock options for 2,000,000 shares and 100,000 shares of common stock, respectively, that vest in four equal installments upon the Company’s share price achieving targets ranging from $5.00 to $8.00 per share, with implied service periods of three to fifteen months. We recorded market condition stock-based compensation expense during the three months ended January 31, 2022 and 2021 of approximately $1,405,000 and $0, respectively. The compensation cost for service-based stock options granted to consultants is measured at the grant date, based on the fair value of the award using the Black-Scholes pricing model, and is expensed on a straight-line basis over the requisite service period (the vesting period of the stock option) which is one to three years. We recorded stock-based consulting expense related to stock options granted to consultants of approximately $109,000 and $54,000 during the three months ended January 31, 2022 and 2021, respectively. Stock Option Plans During the three months ended January 31, 2022, we had two stock option plans: the Anixa Biosciences, Inc. 2010 Share Incentive Plan (the “2010 Share Plan”) and the Anixa Biosciences, Inc. 2018 Share Incentive Plan (the “2018 Share Plan”), which were adopted by our Board of Directors on July 14, 2010 and January 25, 2018, respectively. The 2018 Share Plan was approved by our shareholders on March 29, 2018. Stock Option Activity During the three months ended January 31, 2022 and 2021, we granted options to purchase 30,000 shares and 1,130,000 shares of common stock, respectively, to employees and consultants, with exercise prices ranging from $2.83 to $3.24 per share, pursuant to the 2018 Share Plan. During the three months ended January 31, 2022 and 2021, stock options to purchase 100,000 shares of common stock, net of 53,091 shares withheld on a cashless exercise, and 29,880 shares of common stock, respectively, were exercised with aggregate proceeds of $0 and approximately $104,000, respectively. 2010 Share Plan The 2010 Share Plan provided for the grant of nonqualified stock options, stock appreciation rights, stock awards, performance awards and stock units to employees, directors and consultants. In accordance with the provisions of the 2010 Share Plan, the plan terminated with respect to the ability to grant future awards on July 14, 2020. Information regarding the 2010 Share Plan for the three months ended January 31, 2022 is as follows: SCHEDULE OF OPTION ACTIVITY
|  | Shares |  |  | Weighted Average Exercise Price Per Share |  |  | Aggregate Intrinsic Value (in thousands) |
Options outstanding at October 31, 2021 |  |  | 1,718,634 |  |  | $ | 2.82 |  |  |  |  |
Granted |  |  | - |  |  | $ | - |  |  |  |  |
Exercised |  |  | (100,000 | ) |  | $ | 2.92 |  |  |  |  |
Forfeited/Expired |  |  | - |  |  | $ | - |  |  |  |  |
Options outstanding and exercisable at January 31, 2022 |  |  | 1,618,634 |  |  | $ | 2.81 |  |  | $ | 1,216 |
Options Outstanding |  |  | - |  |  | $ | - |  |  | $ | - |
Options Exercisable |  |  | - |  |  | $ | - |  |  | $ | - |
The following table summarizes information about stock options outstanding and exercisable under the 2010 Share Plan as of January 31, 2022: SCHEDULE OF OUTSTANDING AND EXERCISABLE
Range of Exercise Prices |  |  | Number Outstanding and Exercisable |  |  | Weighted Average Remaining Contractual Life (in years) |  |  | Weighted Average Exercise Price |
$ | 0.67 - $2.30 |  |  |  | 527,500 |  |  |  | 4.3 |  |  | $ | 1.54 |
$ | 2.58 - $3.13 |  |  |  | 577,000 |  |  |  | 2.9 |  |  | $ | 2.76 |
$ | 3.46 - $5.30 |  |  |  | 514,134 |  |  |  | 6.2 |  |  | $ | 4.16 |
Information regarding the 2010 Share Plan for the three months ended January 31, 2021 is as follows:
|  | Shares |  |  | Weighted Average Exercise Price Per Share |  |  | Aggregate Intrinsic Value (in thousands) |
Options Outstanding at October 31, 2020 |  |  | 1,907,534 |  |  | $ | 2.82 |  |  |  |  |
Exercised |  |  | (6,000 | ) |  | $ | 2.32 |  |  |  |  |
Forfeited/Expired |  |  | (400 | ) |  | $ | 5.75 |  |  |  |  |
Options Outstanding at January 31, 2021 |  |  | 1,901,134 |  |  | $ | 2.82 |  |  | $ | 1,906 |
Options Exercisable at January 31, 2021 |  |  | 1,823,634 |  |  | $ | 2.83 |  |  | $ | 1,822 |
The following table summarizes information about stock options outstanding and exercisable under the 2010 Share Plan as of January 31, 2021:
|  |  | Options Outstanding |  | Options Exercisable
| Range of Exercise Prices |  |  | Number Outstanding |  |  |  | Weighted Average Remaining Contractual Life (in years) |  |  |  | Weighted Average Exercise Price |  |  |  | Number Exercisable |  |  |  | Weighted Average Remaining Contractual Life (in years) |  |  | Weighted Average Exercise Price
$ | 0.67 - $2.30 |  |  | 544,000 |  |  |  | 5.2 |  |  | $ | 1.56 |  |  |  | 516,500 |  |  |  | 5.2 |  |  | $ | 1.60
$ | 2.58 - $ 3.13 |  |  | 833,000 |  |  |  | 3.1 |  |  | $ | 2.79 |  |  |  | 833,000 |  |  |  | 3.5 |  |  | $ | 2.79
$ | 3.46 - $ 5.30 |  |  | 524,134 |  |  |  | 7.1 |  |  | $ | 4.17 |  |  |  | 474,134 |  |  |  | 7.1 |  |  | $ | 4.25
2018 Share Plan The 2018 Share Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, performance awards and stock units to employees, directors and consultants. As of January 31, 2022, the 2018 Share Plan had 2,000,000 shares available for future grants. Information regarding the 2018 Share Plan for the three months ended January 31, 2022 is as follows: SCHEDULE OF OPTION ACTIVITY
|  | Shares |  |  | Weighted Average Exercise Price Per Share |  |  | Aggregate Intrinsic Value (in thousands) |
Options outstanding at October 31, 2021 |  |  | 7,409,992 |  |  | $ | 3.76 |  |  |  |  |
Granted |  |  | 30,000 |  |  | $ | 3.24 |  |  |  |  |
Options outstanding at January 31, 2022 |  |  | 7,439,992 |  |  | $ | 3.76 |  |  | $ | 676 |
Options exercisable at January 31, 2022 |  |  | 3,986,659 |  |  | $ | 3.66 |  |  | $ | 347 |
The following table summarizes information about stock options outstanding and exercisable under the 2018 Share Plan as of January 31, 2022: SCHEDULE OF OUTSTANDING AND EXERCISABLE
|  |  | Options Outstanding |  |  | Options Exercisable |
| Range of Exercise Prices |  |  |  | Number Outstanding |  |  |  | Weighted Average Remaining Contractual Life (in years) |  |  |  | Weighted Average Exercise Price |  |  |  | Number Exercisable |  |  |  | Weighted Average Remaining Contractual Life (in years) |  |  |  | Weighted Average Exercise Price |
$ | 2.09 - $3.87 |  |  |  | 3,969,992 |  |  |  | 7.5 |  |  | $ | 3.42 |  |  |  | 3,030,548 |  |  |  | 7.1 |  |  | $ | 3.53 |
$ | 3.96 - $5.30 |  |  |  | 3,470,000 |  |  |  | 8.7 |  |  | $ | 4.16 |  |  |  | 956,111 |  |  |  | 7.8 |  |  | $ | 4.08 |
Information regarding the 2018 Share Plan for the three months ended January 31, 2021 is as follows:
|  | Shares |  |  | Weighted Average Exercise Price Per Share |  |  | Aggregate Intrinsic Value (in thousands) |
Options outstanding at October 31, 2020 |  |  | 4,346,661 |  |  | $ | 3.69 |  |  |  |  |
Granted |  |  | 1,130,000 |  |  | $ | 2.83 |  |  |  |  |
Exercised |  |  | (23,880 | ) |  | $ | 3.78 |  |  |  |  |
Forfeited/Expired |  |  | (392,781 | ) |  | $ | 3.70 |  |  |  |  |
Options outstanding at January 31, 2021 |  |  | 5,060,000 |  |  | $ | 3.49 |  |  | $ | 1,185 |
Options exercisable at January 31, 2021 |  |  | 2,312,640 |  |  | $ | 3.69 |  |  | $ | 148 |
The following table summarizes information about stock options outstanding and exercisable under the 2018 Share Plan as of January 31, 2021:
|  |  | Options Outstanding |  |  | Options Exercisable |
| Range of Exercise Prices |  |  |  | Number Outstanding |  |  |  | Weighted Average Remaining Contractual Life (in years) |  |  |  | Weighted Average Exercise Price |  |  |  | Number Exercisable |  |  |  | Weighted Average Remaining Contractual Life (in years) |  |  |  | Weighted Average Exercise Price |
$ | 2.09 - $3.70 |  |  |  | 3,975,000 |  |  |  | 8.1 |  |  | $ | 3.38 |  |  |  | 1,664,862 |  |  |  | 7.5 |  |  | $ | 3.61 |
$ | 3.84 - $4.61 |  |  |  | 1,085,000 |  |  |  | 8.0 |  |  | $ | 3.90 |  |  |  | 647,778 |  |  |  | 7.7 |  |  | $ | 3.92 |
Non-Plan Options In addition to options granted under stock option plans, during the years ended October 31, 2012 and 2013, the Board of Directors approved the grant of stock options to certain employees and directors. Information regarding stock options that were granted outside of share plans for the three months ended January 31, 2022 is as follows: SCHEDULE OF OPTION ACTIVITY
|  | Shares |  |  | Weighted Average Exercise Price Per Share |  |  | Aggregate Intrinsic Value (in thousands) |
Options outstanding at October 31, 2021 |  |  | 1,642,000 |  |  | $ | 2.58 |  |  |  |  |
Options outstanding and exercisable at January 31, 2022 |  |  | 1,642,000 |  |  | $ | 2.58 |  |  | $ | 1,158 |
The following table summarizes information about stock options outstanding and exercisable that were granted outside of share plans as of January 31, 2022: SCHEDULE OF OUTSTANDING AND EXERCISABLE
Range of Exercise Prices |  |  | Number Outstanding and Exercisable |  |  | Weighted Average Remaining Contractual Life (in years) |  |  | Weighted Average Exercise Price |
$ | 2.58 |  |  |  | 1,642,000 |  |  |  | 0.6 |  |  | $ | 2.58 |
Information regarding stock options that were granted outside of share plans for the three months ended January 31, 2021 is as follows:
|  | Shares |  |  | Weighted Average Exercise Price Per Share |  |  | Aggregate Intrinsic Value (in thousands) |
Options outstanding at October 31, 2020 |  |  | 1,698,000 |  |  | $ | 2.58 |  |  |  |  |
Options outstanding and exercisable at January 31, 2021 |  |  | 1,698,000 |  |  | $ | 2.58 |  |  | $ | 1,825 |
The following table summarizes information about stock options outstanding and exercisable that were granted outside of share plans as of January 31, 2021:
Range of Exercise Prices |  |  | Number Outstanding and Exercisable |  |  | Weighted Average Remaining Contractual Life (in years) |  |  | Weighted Average Exercise Price |
$ | 2.58 |  |  |  | 1,698,000 |  |  |  | 1.6 |  |  | $ | 2.58 |
Stock Awards For stock awards granted to employees, directors and consultants that vest upon grant we recognize expense at the date of grant based on the grant date market price of the underlying common stock. We did not grant any stock awards that vested upon grant during the three months ended January 31, 2022 or 2021. Employee Stock Purchase Plan The Company maintains the Anixa Biosciences, Inc. Employee Stock Purchase Plan (the “ESPP”) which permits eligible employees to purchase shares at not less than 85% of the market value of the Company’s common stock on the offering date or the purchase date of the applicable offering period, whichever is lower. The plan was adopted by our Board of Directors on August 13, 2018 and approved by our shareholders on September 27, 2018. During the three months ended January 31, 2022 and 2021, no shares were purchased under the ESPP. Warrants On October 30, 2020 we issued a warrant, expiring on October 30, 2025, to purchase 60,000 shares of common stock at $2.06 per share, vesting over five months, to a consultant for investor relations services. We recorded consulting expense of approximately $57,000 during the three months ended January 31, 2021, based on the fair value of the warrant on the date of grant recognized on a straight-line basis over the vesting period. On November 16, 2021, the warrant was exercised on a cashless basis and 25,484 shares were withheld as payment. On November 1, 2021 we issued a warrant, expiring on October 30, 2026, to purchase 60,000 shares of common stock at $4.77 per share, vesting over five months, to a consultant for investor relations services. We recorded consulting expense of approximately $110,000 during the three months ended January 31, 2022, based on the fair value of the warrant on the date of grant recognized on a straight-line basis over the vesting period. As of January 31, 2022, we also had warrants outstanding to purchase 300,000 shares of common stock at $6.56 per share, issued during fiscal year 2021 and expiring on March 22, 2026.

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