3. 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

We account for stock options granted to employees, directors and others using the accounting guidance in ASC 718, Stock Compensation (“ASC 718”). 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 $1,094,000 and $1,153,000 during the three months ended July 31, 2024 and 2023, respectively, and approximately $3,440,000 and $3,265,000 during the nine months ended July 31, 2024 and 2023, respectively.

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 $23,000 and $47,000 during the three months ended July 31, 2024 and 2023, respectively, and approximately $101,000 and $175,000 during the nine months ended July 31, 2024 and 2023, respectively.

Stock Option Plans

During the three and nine months ended July 31, 2024, 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 July 31, 2024 and 2023, we did not grant any options to purchase shares of common stock, and during the nine months ended July 31, 2024 and 2023, we granted options to purchase 1,350,000 shares and 1,505,000 shares of common stock, respectively, to employees, directors and consultants, with exercise prices ranging from $3.17 to $4.39 per share, pursuant to the 2018 Share Plan. During the three months ended July 31, 2024, stock options to purchase 80,000 shares of common stock were exercised on a cash basis, with aggregate proceeds of approximately $194,000. During the three months ended July 31, 2023, stock options to purchase 160,000 shares of common stock, of which 115,417 shares were withheld, were exercised on a cashless basis and stock options to purchase 10,446 shares of common stock were exercised on a cash basis, with aggregate proceeds of approximately $3,000. During the nine months ended July 31, 2024, stock options to purchase 123,999 shares of common stock were exercised on a cash basis, with aggregate proceeds of approximately $318,000. During the nine months ended July 31, 2023, stock options to purchase 161,111 shares of common stock, of which 116,225 shares were withheld, were exercised on a cashless basis and stock options to purchase 39,525 shares of common stock were exercised on a cash basis, with aggregate proceeds of approximately $81,000.

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 nine months ended Jul 31, 2024 is as follows:

 SCHEDULE OF OPTION ACTIVITY 

The following table summarizes information about stock options outstanding and exercisable under the 2010 Share Plan as of July 31, 2024:

 SCHEDULE OF OPTIONS OUTSTANDING AND EXERCISABLE 

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 July 31, 2024, the 2018 Share Plan had 938,907 shares available for future grants. Information regarding the 2018 Share Plan for the nine months ended July 31, 2024 is as follows:

 SCHEDULE OF OPTION ACTIVITY

The following table summarizes information about stock options outstanding and exercisable under the 2018 Share Plan as of July 31, 2024:

 SCHEDULE OF OPTIONS OUTSTANDING AND EXERCISABLE

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% 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 ESPP was adopted by our Board of Directors on August 13, 2018 and approved by our shareholders on September 27, 2018. During the three and nine months ended July 31, 2024 and 2023, employees purchased 2,616 and 1,903 shares, respectively, with aggregate proceeds of approximately $7,000 and $6,000, respectively.

Warrants

As of July 31, 2024, we had warrants outstanding to purchase 300,000 shares of common stock at $6.56 per share, issued during fiscal year 2021 and expiring on March 22, 2026.

Information regarding the Company’s warrants for the nine months ended July 31, 2024 is as follows:

 SCHEDULE OF WARRANTS ACTIVITY

The following table summarizes information about the Company’s outstanding and exercisable warrants as of July 31, 2024:

 SCHEDULE OF OUTSTANDING AND EXERCISABLE

Stock Awards

During the three months ended July 31, 2024 and 2023, we issued 60,000 shares and 4,076 shares of common stock, respectively, to consultants providing investor relations services and recorded expense of approximately $62,000 and $17,000, respectively. During the nine months ended July 31, 2024 and 2023, we issued 89,336 shares and 17,554 shares of common stock, respectively, to consultants providing investor relations services and recorded expense of approximately $158,000 and $67,000, respectively. As of July 31, 2024 and 2023, approximately $97,000 and $0, respectively, was recorded as a prepaid expense.