Company: ANIX
Filing Date: 2025-09-10
Form Type: 10-Q
Source: 0001493152-25-013000
Chunk: 65

Company: Anixa Biosciences Inc
Filing Date: 2025-09-10
Form: 10-Q
Item: Part I, Item 8
Chunk 65
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 of the related
patents. Pursuant to the terms of these agreements, we have no further obligations with respect to the granted intellectual property
rights, including no obligation to maintain or upgrade the technology, or provide future support or services. Licensees obtained control
of the intellectual property rights they have acquired upon execution of the agreement. Accordingly, the performance obligations from
these agreements were satisfied and 100% of the revenue was recognized upon the execution of the agreements.

Stock-Based
Compensation

The
compensation cost for service-based stock options granted to employees, directors and consultants is measured at the grant date, based
on the fair value of the award using the Black-Scholes pricing model, and is recognized as an expense on a straight-line basis over the
requisite service period (the vesting period of the stock option) which is one to four years. For employee options vesting if the trading
price of the Company’s common stock exceeds 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.

For
stock awards granted to employees and directors that vest at date of grant we recognize expense based on the grant date market price
of the underlying common stock. For restricted stock awards vesting upon achievement of a price target of our common stock, 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).

20

The
Black-Scholes pricing model and the Monte Carlo Simulation we use to estimate fair value requires valuation assumptions of expected term,
expected volatility, risk-free interest rates and expected dividend yield. The expected term of stock options represents the weighted
average period the stock options are expected to remain outstanding. For employees we use the simplified method, which is a weighted
average of the vesting term and contractual term, to determine expected term. The simplified method was adopted since we do not believe
that historical experience is representative of future performance because of the impact of the changes in our operations and the change
in terms from historical options. For consultants we use the contract term for expected term. Under the Black-Scholes pricing model,
we estimated the expected volatility of our shares of common stock based upon the historical volatility of our share price over a period
of time equal to the expected term of the grants. We estimated the risk-free interest rate based on the implied yield available on the
applicable grant date of a U.S.