Company: ANIX
Filing Date: 2025-05-28
Form Type: 10-Q
Source: 0001641172-25-012701
Chunk: 25

Company: Anixa Biosciences Inc
Filing Date: 2025-05-28
Form: 10-Q
Item: Part I, Item 8
Chunk 25
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 days of execution of the agreement, of contractually determined, one-time, paid-up license fees in settlement
of litigation and in consideration for the grant of certain intellectual property rights for patented technologies owned or controlled
by the Company. These arrangements typically include some combination of the following: (i) the grant of a non-exclusive, retroactive
and future license to manufacture and/or sell products covered by patented technologies owned or controlled by the Company, (ii) a covenant-not-to-sue,
(iii) the release of the licensee from certain claims, and (iv) the dismissal of any pending litigation. In such instances, the intellectual
property rights granted have been perpetual in nature, extending until the expiration 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.

19

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).

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