Company: ANIX
Filing Date: 2025-09-10
Form Type: 10-Q
Source: 0001493152-25-013000
Chunk: 47

Company: Anixa Biosciences Inc
Filing Date: 2025-09-10
Form: 10-Q
Item: Part I, Item 8
Chunk 47
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 of effort expended in each reporting period.

At
each balance sheet date, management estimates prepaid and accrued research and development costs by discussing progress or stage of completion
of activities with internal personnel and external service providers, and comparing this information to payments made, invoices received,
and the agreed-upon contractual fee to be paid for such services 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 $829,000 and $1,094,000 during the three months ended July 31, 2025
and 2024, respectively, and approximately $2,822,000 and $3,440,000 during the nine months ended July 31, 2025 and 2024, respectively.

The
compensation cost for service-based stock