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 to four years. We recorded stock-based compensation expense related to service-based stock options granted to employees and directors of approximately $875,000 and $964,000 during the three months ended January 31, 2021 and 2020.

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 May 8, 2018, we issued market condition options to purchase 1,500,000 shares of common stock, to our Chairman, President and Chief Executive Officer, vesting at target trading prices of $5.00 to $8.00 per share before May 31, 2021, with implied service periods of three to seven months. In October 2018, the first tranche of 500,000 shares of market condition options became exercisable upon achieving an average closing price above $5.00 per share for twenty consecutive trading days. We did not record any market condition stock-based compensation expense during the three months ended January 31, 2021 and 2020.

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 $54,000 and $57,000 during the three months ended January 31, 2021 and 2020, respectively.

Stock Option Plans

During the three months ended January 31, 2021, 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.

During the three months ended January 31, 2020, the remaining outstanding options under the Anixa Biosciences, Inc. 2003 Share Incentive Plan (the “2003 Plan”) expired.

Stock Option Activity

During the three months ended January 31, 2021 and 2020, we granted options to purchase 1,130,000 shares and 800,000 shares of common stock, respectively, to employees and consultants, with exercise prices ranging from $2.83 to $4.04 per share, pursuant to the 2018 Share Plan. During the three months ended January 31, 2021 and 2020, stock options to purchase 29,880 and 18,900 shares of common stock, respectively, were exercised with aggregate proceeds of approximately $104,000 and $28,000, respectively.

2003 Plan

The 2003 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 2003 Plan, the plan terminated with respect to the ability to grant future awards on April 21, 2013. Information regarding the 2003 Plan for the three months ended January 31, 2020 is as follows:

2010 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 three months ended January 31, 2021 is as follows:

The following table summarizes information about stock options outstanding and exercisable under the 2010 Share Plan as of January 31, 2021:

Information regarding the 2010 Share Plan for the three months ended January 31, 2020 is as follows:

The following table summarizes information about stock options outstanding and exercisable under the 2010 Share Plan as of January 31, 2020:

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. As of January 31, 2021, the 2018 Share Plan had 2,000,000 shares available for future grants. Information regarding the 2018 Share Plan for the three months ended January 31, 2021 is as follows:

The following table summarizes information about stock options outstanding and exercisable under the 2018 Share Plan as of January 31, 2021:

Information regarding the 2018 Share Plan for the three months ended January 31, 2020 is as follows:

The following table summarizes information about stock options outstanding and exercisable under the 2018 Share Plan as of January 31, 2020:

Outside of Share Plans

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 three months ended January 31, 2021 is as follows:

The following table summarizes information about stock options outstanding and exercisable that were granted outside of Share Plans as of January 31, 2021:

Information regarding stock options that were granted outside of Share Plans for the three months ended January 31, 2020 is as follows:

The following table summarizes information about stock options outstanding and exercisable that were granted outside of Share Plans as of January 31, 2020:

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 market price of the underlying common stock. We did not grant any stock awards that vested upon grant during the three months ended January 31, 2021 or 2020.

On May 8, 2018, a restricted stock award of 1,500,000 shares of common stock was granted under the 2018 Share Plan to our Chairman, President and Chief Executive Officer. The restricted stock award vests in its entirety upon achievement of a target trading price of $11.00 per share of the Company’s common stock before May 31, 2021. For restricted stock awards vesting upon achievement of a price target of our common stock 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). We did not record any compensation expense related to the restricted stock award during the three months ended January 31, 2021 and 2020.

Employee Stock Purchase Plan

The Company maintains the Anixa Biosciences, Inc. Employee Stock Purchase Plan (“ESPP”) 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 three months ended January 31, 2021 and 2020, no shares were purchased under the ESPP.

Warrants

On October 30, 2020 we issued a warrant, expiring on October 30, 2025, to purchase 60,000 shares of common stock at $2.06 per share, vesting over five months, to a consultant for investor relations services. We recorded consulting expense of approximately $57,000 during the three months ended January 31, 2021, based on the fair value of the warrant on the date of grant recognized on a straight-line basis over the vesting period. We did not record any consulting expense related to warrants during the three months ended January 31, 2020. No warrants were issued during the three-month periods ended January 31, 2021 and 2020.

As of January 31, 2021, we also had warrants outstanding to purchase 500,000 shares of common stock at $5.03 per share, issued during fiscal year 2017 and expiring on November 30, 2021.