Annual report pursuant to Section 13 and 15(d)

SHAREHOLDERS' EQUITY

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SHAREHOLDERS' EQUITY
12 Months Ended
Oct. 31, 2019
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]

4.         SHAREHOLDERS’ EQUITY         


Stock Option Plans


As of October 31, 2019, we have three stock option plans: the Anixa Biosciences, Inc. 2003 Share Incentive Plan (the “2003 Share Plan”), 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 April 21, 2003, July 14, 2010 and January 25, 2018, respectively.  The 2018 Share Plan was approved by our shareholders on March 29, 2018


During the years ended October 31, 2019 and 2018, stock options to purchase 47,600 and 76,178 shares of common stock, respectively, were exercised with aggregate proceeds of approximately $122,000 and $58,000, respectively.  Under certain circumstances, stock options may be exercised on a cashless basis.  During the year ended October 31, 2018, 9,459 shares of common stock were withheld in connection with cashless exercises of stock options.  During the year ended October 31, 2019 no shares of common stock were withheld in connection with cashless exercises of stock options.


2003 Plan


The 2003 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.  The exercise price with respect to all of the options granted under the 2003 Share Plan since its inception was equal to the fair market value of the underlying common stock at the grant date.   In accordance with the provisions of the 2003 Share Plan, the plan terminated with respect to the grant of future options on April 21, 2013.  Information regarding the 2003 Share Plan for the two years ended October 31, 2019 is as follows:


     

Weighted

Average Exercise

 Price Per Share

     
       

Aggregate

 Intrinsic Value

 

Shares

   
               

Options Outstanding at October 31, 2017

30,600

 

 

$      3.16

 

 

 

Exercised

(10,600)

 

 

$      0.67

     

Forfeited

(8,000)

 

 

$      7.04

 

 

 

Options Outstanding at October 31, 2018

12,000

 

 

$      2.77

     

Exercised

(11,600)

 

 

$      2.94

 

 

 

Options Outstanding and Exercisable at October 31, 2019

400

 

 

$    17.00

 

 

$    -0-


The following table summarizes information about stock options outstanding and exercisable under the 2003 Share Plan as of October 31, 2019:


Weighted Average

Remaining

Contractual Life

(in years)

Weighted

Average

Exercise Price

Range of

Exercise Prices

Number

Outstanding

$  17.00

 

400

 

0.03

 

$ 17.00


2010 Plan


The 2010 Share Plan provides for the grant of nonqualified stock options, stock appreciation rights, stock awards, performance awards and stock units to employees, directors and consultants.  On the first business day of each calendar year the maximum aggregate number of shares available for future issuance is replenished such that 800,000 shares are available.  The exercise price with respect to all of the options granted under the 2010 Share Plan was equal to the fair market value of the underlying common stock at the grant date.  As of October 31, 2019, the 2010 Share Plan had 901,200 shares available for future grants.  Information regarding the 2010 Share Plan for the two years ended October 31, 2019 is as follows:


 Weighted

Average Exercise

 Price Per Share

Aggregate
 Intrinsic

 Value

Shares

Options Outstanding at October 31, 2017

1,637,246

 

 

$    1.50       

 

 

 

Granted

610,000

 

$    3.68       

 

Exercised

(65,578)

 

 

$    1.33       

 

 

   

Forfeited

(49,800)

 

$    2.15       

Options Outstanding at October 31, 2018

2,131,868  

 

 

$    2.11       

 

 

 

Granted

10,000

 

$    3.64       

Exercised

(32,000)

 

 

$    2.27       

 

 

 

Forfeited

(111,200)

 

 

$    3.89       

 

 

 

Options Outstanding at October 31, 2019

1,998,668

 

$    2.80       

 

$    2,422,486   

Options Exercisable at October 31, 2019

1,700,194

 

 

$    2.85       

 

 

$    2,008,344   


The following table summarizes information about stock options outstanding under the 2010 Share Plan as of October 31, 2019:


Options Outstanding

Options Exercisable

Weighted

Average

Remaining

Contractual Life

(in years)

Weighted

Average

Remaining

Contractual Life

(in years)

Weighted

Average

Exercise Price

Weighted

Average

Exercise Price

Range of

Exercise Prices

Number

Outstanding

Number

Exercisable

 

$0.67 - $2.30

574,000

6.56

$1.54

458,026

6.27

$1.70

$2.58 - $3.13

890,134

3.63

$2.79

890,134

4.26

$2.79

$3.46 - $5.75

534,534

8.19

$4.16

 

352,034

7.99

$4.52


2018 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.  On the first business day of each calendar year the maximum aggregate number of shares available for future issuance is replenished such that 2,000,000 shares are available.  The exercise price with respect to all of the options granted under the 2018 Share Plan was equal to the fair market value of the underlying common stock at the grant date.  As of October 31, 2018, the 2018 Share Plan had 1,543,000 shares available for future grants.  Information regarding the 2018 Share Plan for the two years ended October 31, 2019 is as follows:


 Weighted

Average Exercise

 Price Per Share

Aggregate
 Intrinsic

 Value

Shares

Options Outstanding at October 31, 2017

-

 

 

 

 

 

Granted

3,482,000

 

$    3.65       

 

Options Outstanding at October 31, 2018

3,482,000

 

 

$    3.73       

 

 

 

Granted

465,000

 

$    3.87       

Exercised

(4,000)

 

 

$    3.84       

 

 

 

Forfeited

(8,000)

 

 

$    3.84       

 

 

 

Options Outstanding at October 31, 2019

3,935,000

 

$    3.74       

 

$    536,300   

Options Exercisable at October 31, 2019

1,485,280

 

 

$    3.73       

 

 

$    225,908   


The following table summarizes information about stock options outstanding under the 2018 Share Plan as of October 31, 2019:


Options Outstanding

Options Exercisable

Weighted

Average

Remaining

Contractual Life

(in years)

Weighted

Average

Remaining

Contractual Life

(in years)

Weighted

Average

Exercise Price

Weighted

Average

Exercise Price

Range of

Exercise Prices

Number

Outstanding

Number

Exercisable

 

$3.70

3,100,000

8.53

$3.70

1,300,000

8.53

$3.70

$ 3.84 - $4.61

835,000

9.09

$3.91

185,280

8.47

$3.93


Outside of Plans


In addition to options granted under the 2003 Share Plan, the 2010 Share Plan and the 2018 Share Plan, 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 not granted under the 2003 Share Plan, the 2010 Share Plan or the 2018 Share Plan for the two years ended October 31, 2019 is as follows:


     

Weighted

Average Exercise

Price Per Share

   

Aggregate

Intrinsic

Value

         
 

Shares

   

 

Options Outstanding at October 31, 2017

1,780,000

   

$ 1.58

     

Options Outstanding at October 31, 2018

1,780,000

 

 

$ 1.58

 

 

 

Forfeited

(82,000)

 

 

$ 5.32

 

 

 

Options Outstanding and exercisable at October 31, 2019

1,698,000

 

 

$ 2.58

 

 

$ 2,198,910


The following table summarizes information about stock options outstanding and exercisable that were not granted under the 2003 Share Plan, the 2010 Share Plan or the 2018 Share Plan as of October 31, 2019:


Weighted Average

Remaining

Contractual Life

(in years)

Number

Outstanding
and

Exercisable

Weighted

Average

Exercise Price

Range of

Exercise Prices

$2.58

1,698,000

2.74

$ 2.58


Re-Priced Stock Options


On August 21, 2019, the Company entered into a settlement agreement in connection with a putative shareholder derivative complaint filed in the Court of Chancery of the State of Delaware on November 5, 2018.  Pursuant to the settlement agreement the Company agreed, among other things, to reprice certain stock options that were repriced on September 6, 2017 to $0.67 to the option price immediately prior to that repricing. Accordingly, 4,000 stock options in the 2003 Share Plan with exercise prices of $2.58, 878,400 stock options in the 2010 Share Plan with exercise prices ranging from $0.96 to $5.30 and 1,046,000 stock options that were not granted under the 2003 Share Plan, the 2010 Share Plan or the 2018 Share Plan with exercise prices of $2.58, were re-priced to the option price immediately prior to the September 6, 2017 repricing.  In addition, certain individual defendants in the derivative complaint who had exercised stock options that were re-priced in the 2017 re-pricing and sold the underlying shares paid approximately $45,000 to the Company representing a portion of the amount received for those shares. 


Employee Stock Purchase Plan


The Company maintains the Anixa Biosciences, Inc. Employee Stock Purchase Plan which permits eligible employees to purchase shares at not less than 85% of the market value of the Company’s common stock on the offering date or the purchase date of the applicable offering period, whichever is lower.  The plan was adopted by our Board of Directors on August 13, 2018 and approved by our shareholders on September 27, 2018.  During the year ended October 31, 2019, employees purchased 11,650 shares with aggregate proceeds of approximately $39,000.


Common Stock Purchase Warrants


During the year ended October 31, 2019 we issued a warrant, expiring on November 1, 2023, to purchase 25,000 shares of common stock at $4.04 per share, vesting over 12 months, to a consultant for investor relations services.  We recorded consulting expense of approximately $85,000 during the year ended October 31, 2019, based on the fair value of the warrant recognized on a straight-line basis over the vesting period. 


In July 2018 we issued a warrant exercisable at $3.65 per share vested upon grant to purchase 25,000 shares of common stock to a consultant for investor relations services.  We recorded consulting expense of approximately $57,000 during the year ended October 31, 2018, based on the fair value of the warrant.  This warrant was exercised in October 2018.


As of October 31, 2019, we also had warrants outstanding to purchase 500,000 shares of common stock at $5.03 per share expiring on November 30, 2021.