Company: ANIX
Filing Date: 2025-03-11
Form Type: 10-Q
Source: 0001493152-25-009854
Chunk: 8

Company: Anixa Biosciences Inc
Filing Date: 2025-03-11
Form: 10-Q
Item: Part I, Item 8
Chunk 8
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 in the applicable contract or statements of work.

In addition,
we allocate certain internal compensation costs to research and development expenses based on management’s estimates of each employee’s
time and effort expended.

Investment Policy

The Company’s investment
policy is designed to optimize returns while managing risk and liquidity. The policy allows for investments in a diversified range of
financial instruments, including U.S. government debt securities with fixed maturities and contractual cash flows, as well as alternative
investments such as Bitcoin and Bitcoin-based exchange traded funds (collectively, the “Bitcoin Assets”).

The Company acquires U.S. government
debt securities that it has the positive intent and ability to hold to maturity. These securities are recorded at amortized cost, net
of any applicable discount which is amortized to interest income, and are accounted for as held-to-maturity securities. The Company’s
Bitcoin Assets are measured at fair value based on quoted prices on active exchanges. The Company recognizes changes in the fair value
of Bitcoin Assets as gains or losses in the statement of operations during the period in which they occur.

3. STOCK-BASED COMPENSATION

The Company maintains stock equity
incentive plans under which the Company may grant 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

We account for stock options granted
to employees, directors and consultants using the accounting guidance in ASC 718, Stock Compensation. We estimate the fair value of service-based
stock options on the date of grant, using the Black-Scholes pricing model, and recognize compensation expense over the requisite service
period of the grant. We recorded stock-based compensation expense related to service-based stock options granted to employees and directors
of approximately $1,031,000 and $1,108,000 during the three months ended January 31, 2025 and 2024.

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 $24,000 and
$56,000 during the three months ended January 31, 2025 and 2024,