Anixa Biosciences Inc

Previous wording

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Previous wording

Information included in this Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are not statements of historical facts, but rather reflect our current expectations concerning future events and results. We generally use the words “believes,” “expects,” “intends,” “plans,” “anticipates,” “likely,” “will” and similar expressions to identify forward-looking statements. Such forward-looking statements, including those concerning our expectations, involve risks, uncertainties and other factors, some of which are beyond our control, which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and factors include, but are not limited to, those factors set forth in our Annual Report on Form 10-K for the fiscal year ended October 31, 2023 and the condensed consolidated financial statements included in this Report. Except as required by applicable law, including the securities laws of the United States, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this Report.

Current wording

Information included in this Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are not statements of historical facts, but rather reflect our current expectations concerning future events and results. We generally use the words “believes,” “expects,” “intends,” “plans,” “anticipates,” “likely,” “will” and similar expressions to identify forward-looking statements. Such forward-looking statements, including those concerning our expectations, involve risks, uncertainties and other factors, some of which are beyond our control, which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and factors include, but are not limited to, those factors set forth in our Annual Report on Form 10-K for the fiscal year ended October 31, 2023. Except as required by applicable law, including the securities laws of the United States, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this Report.

Previous wording

Research and development expenses are related to the development of our cancer therapeutics and vaccine programs and the expenses incurred in the three months ended April 30, 2024 consisted of approximately $798,000 and $848,000 for CAR-T therapeutics and cancer vaccines, respectively.

Current wording

Research and development expenses are related to the development of our cancer therapeutics and vaccine programs and the expenses incurred in the three months ended July 31, 2024 consisted of approximately $666,000 and $1,259,000 for CAR-T therapeutics and cancer vaccines, respectively.

Previous wording

Research and development expenses increased by approximately $648,000 to approximately $1,646,000 in the three months ended April 30, 2024, from approximately $998,000 in the three months ended April 30, 2023. The increase in research and development expenses was primarily due to an increase in outside research and development expenses related to our CAR-T therapeutics program of approximately $266,000, an increase in outside research and development expenses related to our breast cancer vaccine program of approximately $229,000, an increase in employee compensation and related costs, other than stock option compensation expense, of approximately $111,000, and an increase in employee stock option compensation of approximately $62,000.

Current wording

Research and development expenses increased by approximately $837,000 to approximately $1,925,000 in the three months ended July 31, 2024, from approximately $1,088,000 in the three months ended July 31, 2023. The increase in research and development expenses was primarily due to an increase in outside research and development expenses related to our breast cancer vaccine program of approximately $694,000 and an increase in outside research and development expenses related to our CAR-T therapeutics program of approximately $235,000, offset by a decrease in outside research and development expenses related to our ovarian cancer vaccine program of approximately $99,000.

Previous wording

Interest income increased by approximately $151,000 to approximately $606,000 in the six months ended April 30, 2024, from approximately $455,000 in the six months ended April 30, 2023, due to an increase in interest rates and the increased average dollar amount held in short-term investments.

Current wording

Interest income decreased by approximately $19,000 to approximately $277,000 in the three months ended July 31, 2024, from approximately $296,000 in the three months ended July 31, 2023, due to the decreased average dollar amount held in short-term investments, offset by increased interest rates.

Previous wording

The net loss attributable to noncontrolling interest, representing Wistar’s ownership interest in Certainty’s net loss, increased by approximately $22,000 to approximately $41,000 in the three months ended April 30, 2024, from approximately $19,000 in the three months ended April 30, 2023, as Certainty’s net loss increased.

Current wording

The net loss attributable to noncontrolling interest, representing Wistar’s ownership interest in Certainty’s net loss, increased by approximately $1,000 to approximately $38,000 in the three months ended July 31, 2024, from approximately $37,000 in the three months ended July 31, 2023, as Certainty’s net loss increased.

Previous wording

Six months ended April 30, 2024 compared with six months ended April 30, 2023

Current wording

Nine months ended July 31, 2024 compared with nine months ended July 31, 2023

Previous wording

We had no revenue during the three months ended April 30, 2024. For the three months ended April 30, 2023, we recorded revenue of approximately $210,000 from one license agreement. The license agreement provided for a one-time, non-recurring, lump sum payment in exchange for a non-exclusive retroactive and future license, and covenant not to sue. Pursuant to the terms of the agreement, we have no further obligations with respect to the granted intellectual property rights, including no obligation to maintain or upgrade the technology, or provide future support or services. Accordingly, the performance obligations from this license agreement were satisfied and 100% of the revenue was recognized upon execution of the license agreement.

Current wording

We had no revenue during the nine months ended July 31, 2024. For the nine months ended July 31, 2023, we recorded revenue of approximately $210,000 from one license agreement. The license agreement provided for a one-time, non-recurring, lump sum payment in exchange for a non-exclusive retroactive and future license, and covenant not to sue. Pursuant to the terms of the agreement, we have no further obligations with respect to the granted intellectual property rights, including no obligation to maintain or upgrade the technology, or provide future support or services. Accordingly, the performance obligations from this license agreement were satisfied and 100% of the revenue was recognized upon execution of the license agreement.

Previous wording

We had no inventor royalties, contingent legal fees, litigation and licensing expenses during the three months ended April 30, 2024. Inventor royalties, contingent legal fees, litigation and licensing expenses for the three months ended April 30, 2023 were approximately $161,000. Inventor royalties and contingent legal fees are expensed in the period that the related revenues are recognized. Litigation and licensing expenses related to patent assertion, other than contingent legal fees, are expensed in the period incurred.

Current wording

We had no inventor royalties, contingent legal fees, litigation and licensing expenses during the nine months ended July 31, 2024. Inventor royalties, contingent legal fees, litigation and licensing expenses for the nine months ended July 31, 2023 were approximately $161,000. Inventor royalties and contingent legal fees are expensed in the period that the related revenues are recognized. Litigation and licensing expenses related to patent assertion, other than contingent legal fees, are expensed in the period incurred.

Previous wording

Research and development expenses are related to the development of our cancer therapeutics and vaccine programs and the expenses incurred in the six months ended April 30, 2024 consisted of approximately $1,427,000 and $1,568,000 for CAR-T therapeutics and cancer vaccines, respectively.

Current wording

Research and development expenses are related to the development of our cancer therapeutics and vaccine programs and the expenses incurred in the nine months ended July 31, 2024 consisted of approximately $2,093,000 and $2,827,000 for CAR-T therapeutics and cancer vaccines, respectively.

Previous wording

Research and development expenses increased by approximately $929,000 to approximately $2,995,000 in the six months ended April 30, 2024, from approximately $2,066,000 in the six months ended April 30, 2023. The increase in research and development expenses was primarily due to an increase in outside research and development expenses related to our CAR-T therapeutics program of approximately $407,000, an increase in outside research and development expenses related to our breast cancer vaccine program of approximately $394,000, an increase in employee compensation and related costs, other than stock option compensation expense, of approximately $195,000, and an increase in employee stock option compensation of approximately $80,000, offset by a decrease in outside research and development expenses related to our ovarian cancer vaccine program of approximately $96,000 and a decrease in consultant stock option expense of approximately $68,000.

Current wording

Research and development expenses increased by approximately $1,766,000 to approximately $4,920,000 in the nine months ended July 31, 2024, from approximately $3,154,000 in the nine months ended July 31, 2023. The increase in research and development expenses was primarily due to an increase in outside research and development expenses related to our breast cancer vaccine program of approximately $1,088,000, an increase in outside research and development expenses related to our CAR-T therapeutics program of approximately $642,000, an increase in employee compensation and related costs, other than stock option compensation expense, of approximately $120,000, an increase in consulting fees of approximately $72,000, an increase in employee stock option compensation of approximately $57,000, and an increase in outside research and development expenses related to our new cancer vaccine discovery program of approximately $56,000, offset by a decrease in outside research and development expenses related to our ovarian cancer vaccine program of approximately $195,000 and a decrease in consultant stock option expense of approximately $103,000.

Previous wording

General and administrative expenses increased by approximately $982,000 to approximately $4,081,000 in the six months ended April 30, 2024, from approximately $3,099,000 in the six months ended April 30, 2023. The increase in general and administrative expenses was primarily due to an increase in investor and public relations expense of approximately $579,000, an increase in director stock option compensation expense of approximately $86,000, an increase in consulting fees of approximately $84,000, an increase in employee stock option compensation expense of approximately $68,000, an increase in legal fees of approximately $68,000, and an increase in director fees of approximately $67,000.

Current wording

General and administrative expenses increased by approximately $893,000 to approximately $5,748,000 in the nine months ended July 31, 2024, from approximately $4,855,000 in the nine months ended July 31, 2023. The increase in general and administrative expenses was primarily due to an increase in investor and public relations expense of approximately $611,000, an increase in employee stock option compensation expense of approximately $128,000, an increase in consulting fees of approximately $48,000, and increase in legal fees of approximately $34,000, an increase in consultant stock option expense of approximately $29,000, and an increase in patent-related expenses of approximately $26,000.

Previous wording

Interest income increased by approximately $34,000 to approximately $287,000 in the three months ended April 30, 2024, from approximately $253,000 in the three months ended April 30, 2023, due to an increase in interest rates and the increased average dollar amount held in short-term investments.

Current wording

Interest income increased by approximately $132,000 to approximately $883,000 in the nine months ended July 31, 2024, from approximately $751,000 in the nine months ended July 31, 2023, due to increased interest rates and the increased average dollar amount held in short-term investments.

Previous wording

The net loss attributable to noncontrolling interest, representing Wistar’s ownership interest in Certainty’s net loss, increased by approximately $25,000 to approximately $76,000 in the six months ended April 30, 2024, from approximately $51,000 in the six months ended April 30, 2023, as Certainty’s net loss increased.

Current wording

The net loss attributable to noncontrolling interest, representing Wistar’s ownership interest in Certainty’s net loss, increased by approximately $26,000 to approximately $114,000 in the nine months ended July 31, 2024, from approximately $88,000 in the nine months ended July 31, 2023, as Certainty’s net loss increased.

Previous wording

Based on currently available information as of June 4, 2024, we believe that our existing cash, cash equivalents, short-term investments and expected cash flows will be sufficient to fund our activities for at least the next twelve months. We have implemented a business model that conserves funds by collaborating with third parties to develop our technologies. However, our projections of future cash needs and cash flows may differ from actual results. If current cash on hand, cash equivalents, short-term investments and cash that may be generated from our business operations are insufficient to continue to operate our business, or if we elect to invest in or acquire a company or companies or new technology or technologies that are synergistic with or complementary to our technologies, we may be required to obtain more working capital. During the six months ended April 30, 2024, we raised approximately $3,029,000, net of expenses, through an at-the-market equity offering of 785,290 shares of common stock, under which offering we may issue up to $100 million of common stock. Under our at-the-market equity program, which is currently effective and may remain available for us to use in the future, as of April 30, 2024, we may sell an additional approximately $97 million of common stock. We may seek to obtain working capital during our fiscal year 2024 or thereafter through sales of our equity securities or through bank credit facilities or public or private debt from various financial institutions where possible. We cannot be certain that additional funding will be available on acceptable terms, or at all. If we do identify sources for additional funding, the sale of additional equity securities or convertible debt will result in dilution to our stockholders. We can give no assurance that we will generate sufficient cash flows in the future to satisfy our liquidity requirements or sustain future operations, or that other sources of funding, such as sales of equity or debt, would be available or would be approved by our security holders, if needed, on favorable terms or at all. If we fail to obtain additional working capital as and when needed, such failure could have a material adverse impact on our business, results of operations and financial condition. Furthermore, such lack of funds may inhibit our ability to respond to competitive pressures or unanticipated capital needs, or may force us to reduce operating expenses, which would significantly harm the business and development of operations.

Current wording

Based on currently available information as of September 6, 2024, we believe that our existing cash, cash equivalents, short-term investments and expected cash flows will be sufficient to fund our activities for at least the next twelve months. The Company has approximately $20,745,000 of cash, cash equivalents, and short-term investments at July 31, 2024 compared to approximately $23,844,000 at October 31, 2023 which is a reduction of approximately $3,099,000 during the nine months ended July 31, 2024. Therefore, the Company believes that it has sufficient cash, cash equivalents, and short-term investments to operate its business, as currently contemplated, for significantly longer than 12 months from the date of this Report. We have implemented a business model that conserves funds by collaborating with third parties to develop our technologies. During the nine months ended July 31, 2024, we raised approximately $2,984,000, net of expenses, through an at-the-market equity offering of 785,290 shares of common stock, under which offering we may issue up to $100 million of common stock. Under our at-the-market equity program, which is currently effective and may remain available for us to use in the future, as of July 31, 2024, we may sell an additional approximately $97 million of common stock.

Previous wording

During the six months ended April 30, 2024, cash used in operating activities was approximately $3,765,000. Cash provided by investing activities was approximately $685,000, resulting from the maturities of short-term investments of approximately $35,423,000, offset by purchases of short-term investments totaling approximately $34,738,000. Cash provided by financing activities was approximately $3,160,000, resulting from the sale of 785,290 shares of common stock in an at-the-market equity offering of approximately $3,029,000, net of expenses, proceeds from stock option exercises of approximately $124,000, and proceeds from the sale of common stock pursuant to an employee stock purchase plan of approximately $7,000. As a result, our cash, cash equivalents, and short-term investments at April 30, 2024 decreased approximately $605,000 to approximately $23,239,000 from approximately $23,844,000 at the end of fiscal year 2023.

Current wording

During the nine months ended July 31, 2024, cash used in operating activities was approximately $6,408,000. Cash provided by investing activities was approximately $3,409,000, resulting from the maturities of short-term investments of approximately $50,716,000, offset by purchases of short-term investments totaling approximately $47,307,000. Cash provided by financing activities was approximately $3,309,000, resulting from the sale of 785,290 shares of common stock in an at-the-market equity offering of approximately $2,984,000, net of expenses, proceeds from stock option exercises of approximately $318,000, and proceeds from the sale of common stock pursuant to an employee stock purchase plan of approximately $7,000. As a result, our cash, cash equivalents, and short-term investments at July 31, 2024 decreased approximately $3,099,000 to approximately $20,745,000 from approximately $23,844,000 at the end of fiscal year 2023.

Previous wording

We discuss the effect of recently issued pronouncements in Note 7 of the accompanying condensed consolidated financial statements.

Current wording

We discuss the effect of recently issued pronouncements in Note 7 of the condensed consolidated financial statements, included elsewhere in this Report.