STOCK BASED COMPENSATION | 2. STOCK BASED COMPENSATION The Company maintains stock equity incentive plans under which the Company grants 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 The compensation cost for service-based stock options granted to employees and directors 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 four years 875,000 881,000 1,605,000 1,756,000 For stock options granted to employees and directors that vest based on market conditions, such as the trading price of the Company’s common stock exceeding 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 (median time to vest). On June 1, 2021, our Chairman and Chief Executive Officer and our President, Chief Operating Officer and Chief Financial Officer were awarded market condition stock options for 2,000,000 100,000 5.00 8.00 587,000 0 1,993,000 0 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 $ 109,000 132,000 218,000 186,000 Stock Option Plans During the three months ended April 30, 2022, we had two stock option plans: the Anixa Biosciences, Inc. 2010 Share Incentive Plan (the “2010 Share Plan”) and the Anixa Biosciences, Inc. 2018 Share Incentive Plan (the “2018 Share Plan”), which were adopted by our Board of Directors on July 14, 2010 and January 25, 2018, respectively. The 2018 Share Plan was approved by our shareholders on March 29, 2018. Stock Option Activity During the three months ended April 30, 2022 and 2021, we granted options to purchase 1,400,000 shares and 250,000 shares of common stock, respectively, and during the six months ended April 30, 2022 and 2021, we granted options to purchase 1,430,000 shares and 1,380,000 shares of common stock, respectively, to employees and consultants, with exercise prices ranging from $ 2.62 to $ 5.30 per share, pursuant to the 2018 Share Plan. During the three months ended April 30, 2022 and 2021, stock options to purchase 0 shares of common stock and 77,571 shares of common stock, net of 7,937 shares withheld on a cashless exercise, respectively, were exercised with aggregate proceeds of $ 0 and $ 0 , respectively. During the six months ended April 30, 2022 and 2021, stock options to purchase 46,909 shares of common stock, net of 53,091 shares withheld on a cashless exercise and 107,451 shares of common stock, net of 7,937 shares withheld on a cashless exercise, respectively, were exercised with aggregate proceeds of $ 0 and $ 0 , respectively. 2010 Share Plan The 2010 Share Plan provided for the grant of nonqualified stock options, stock appreciation rights, stock awards, performance awards and stock units to employees, directors and consultants. In accordance with the provisions of the 2010 Share Plan, the plan terminated with respect to the ability to grant future awards on July 14, 2020. Information regarding the 2010 Share Plan for the six months ended April 30, 2022 is as follows: SCHEDULE OF OPTION ACTIVITY Shares Weighted Aggregate Options outstanding at October 31, 2021 1,1,718,634 $ 2.82 Exercised (100,000 ) $ 2.92 Options outstanding and exercisable at 1,618,634 $ 2.81 $ 1,182 The following table summarizes information about stock options outstanding and exercisable under the 2010 Share Plan as of April 30, 2022: SCHEDULE OF OUTSTANDING AND EXERCISABLE Range of Number Exercisable Weighted Average (in years) Weighted $ 0.67 2.30 527,500 4.0 $ 1.54 $ 2.58 3.13 577,000 2.7 $ 2.76 $ 3.46 5.30 514,134 6.0 $ 4.16 2018 Share Plan The 2018 Share Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, performance awards and stock units to employees, directors and consultants. As of April 30, 2022, the 2018 Share Plan had 600,000 SCHEDULE OF OPTION ACTIVITY Shares Weighted Aggregate Intrinsic Value Options outstanding at October 31, 2021 7,409,992 $ 3.76 Granted 1,430,000 $ 2.74 Options outstanding at April 30, 2022 8,839,992 $ 3.60 $ 1,371 Options exercisable at April 30, 2022 4,364,161 $ 3.63 $ 426 The following table summarizes information about stock options outstanding and exercisable under the 2018 Share Plan as of April 30, 2022: SCHEDULE OF OUTSTANDING AND EXERCISABLE Options Outstanding Options Exercisable Range of Number Weighted (in years) Weighted Number Weighted (in years) Weighted $ 2.09 3.87 5,369,992 7.9 $ 3.24 3,298,050 7.0 $ 3.49 $ 3.96 5.30 3,470,000 8.5 $ 4.16 1,066,111 7.6 $ 4.07 Non-Plan Options In addition to options granted under stock option plans, during the years ended October 31, 2012 and 2013, the Board of Directors approved the grant of stock options to certain employees and directors. Information regarding stock options that were granted outside of share plans for the six months ended April 30, 2022 is as follows: SCHEDULE OF OPTION ACTIVITY Shares Weighted Aggregate Intrinsic Value Options outstanding at October 31, 2021 1,642,000 $ 2.58 Options outstanding and exercisable at 1,642,000 $ 2.58 $ 1,108 The following table summarizes information about stock options outstanding and exercisable that were granted outside of share plans as of April 30, 2022: SCHEDULE OF OUTSTANDING AND EXERCISABLE Range of Exercise Prices Number and Exercisable Weighted Average Remaining Contractual Life (in years) Weighted $ 2.58 1,642,000 0.3 $ 2.58 Stock Awards For stock awards granted to employees, directors and consultants that vest upon grant, we recognize expense at the date of grant based on the grant date closing price of the underlying common stock. We did not grant any stock awards that vested upon grant during the six months ended April 30, 2022 or 2021. Employee Stock Purchase Plan The Company maintains the Anixa Biosciences, Inc. Employee Stock Purchase Plan (the “ESPP”) which permits eligible employees to purchase shares at not less than 85 2,389 1,634 7,000 3,000 Warrants On October 30, 2020, we issued a warrant, expiring on October 30, 2025 60,000 2.06 five months 38,000 96,000 25,484 On November 1, 2021 we issued a warrant, expiring on October 30, 2026 60,000 4.77 five months 110,000 220,000 As of April 30, 2022, we also had warrants outstanding to purchase 300,000 6.56 March 22, 2026 |