Company: ANIX
Filing Date: 2025-05-28
Form Type: 10-Q
Source: 0001641172-25-012701
Chunk: 26

Company: Anixa Biosciences Inc
Filing Date: 2025-05-28
Form: 10-Q
Item: Part I, Item 8
Chunk 26
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 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. Treasury note with
a term equal to the expected term of the underlying grants. We made the dividend yield assumption based on our history of not paying dividends
and our expectation not to pay dividends in the future.

We will reconsider use of the
Black-Scholes pricing model and the Monte Carlo Simulation if additional information becomes available in the future that indicates another
model would be more appropriate. If factors change and we employ different assumptions in future periods, the compensation expense that
we record may differ significantly from what we have recorded in the current period.

Research and Development Expenses

We recognize research and development
expenses as incurred. Advance payments for future research and development activities are deferred and expensed as the services are performed.
We recognize our preclinical studies and clinical trial expenses based on the services performed pursuant to contracts with research institutions,
clinical research organizations (“CROs”), clinical manufacturing organizations (“CMOs”), and other parties that
conduct and manage various stages of research and development activities on our behalf. Fees for such services are recognized based on
management’s estimates after considering the activities and tasks completed by each service provider in a given period, the time
period over which services are expected to be performed, and the level 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.

20

EFFECT OF RECENTLY ISSUED PRONOUNCEMENTS

We discuss the effect of recently
issued pronouncements