Anixa Biosciences Inc

Previous wording

Item 7. 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

Over the past several years, our revenue, if any, was derived from technology licensing and the sale of patented technologies, including revenue from the settlement of litigation. As part of our legacy operations, the Company remains engaged in limited patent licensing activities in the area of encrypted audio/video conference calling. We do not expect these activities to be a significant part of the Company’s ongoing operations, nor do we expect these activities to require material financial resources or attention of senior management.

Current wording

We did not have any revenue in fiscal years 2025 and 2024. Over the past several years, our revenue, if any, was derived from technology licensing and the sale of patented technologies, including revenue from the settlement of litigation. As part of our legacy operations, the Company remains engaged in limited patent licensing activities in the area of encrypted audio/video conference calling. We do not expect these activities to be a significant part of the Company’s ongoing operations, nor do we expect these activities to require material financial resources or attention of senior management.

Previous wording

We have not generated any revenue to date from our therapeutics or vaccine programs. In addition, while we pursue our therapeutics and vaccine programs, we may also make investments in and form new companies to develop additional emerging technologies. We do not expect to begin generating revenue with respect to any of our current therapy or vaccine programs in the near term. We hope to achieve a profitable outcome by eventually licensing our technologies to large pharmaceutical companies that have the resources and infrastructure in place to manufacture, market and sell our technologies as therapeutics or vaccines. The eventual licensing of any of our technologies may take several years, if it is to occur at all, and may depend on positive results from human clinical trials.

Current wording

We have not generated any revenue to date from our therapeutics or vaccine programs. In addition, while we pursue our therapeutics and vaccine programs, we may also make investments in and form new companies to develop additional emerging technologies. We do not expect to begin generating revenue with respect to any of our current therapy or vaccine programs in the near term. Our plan is to achieve a profitable outcome by eventually licensing our technologies to large pharmaceutical companies that have the resources and infrastructure in place to manufacture, market and sell our technologies as therapeutics or vaccines. The eventual licensing of any of our technologies may take several years, if it is to occur at all, and may depend on positive results from human clinical trials.

Previous wording

In fiscal year 2024, research and development expenses were related to the development of our cancer therapeutics and vaccine programs and the expenses incurred consisted of approximately $3,748,000 and $2,648,000 for cancer vaccines and CAR-T therapeutics, respectively. In fiscal year 2023, research and development expenses were related to the development of our cancer therapeutics and vaccines, as well as our anti-viral therapeutics program, and the expenses incurred consisted of approximately $2,682,000, $1,839,000 and $248,000 for cancer vaccines, CAR-T therapeutics and anti-viral therapeutics, respectively.

Current wording

Our research and development expenses are related to the development of our cancer vaccines and CAR-T therapeutics programs and in fiscal year 2025, the expenses incurred consisted of approximately $3,121,000 and $1,950,000 for cancer vaccines and CAR-T therapeutics, respectively. In fiscal year 2024, research and development expenses for our cancer vaccines and CAR-T therapeutics were approximately $3,748,000 and $2,648,000, respectively.

Previous wording

Research and development expenses increased by approximately $1,627,000 to approximately $6,396,000 in fiscal year 2024, from approximately $4,769,000 in fiscal year 2023. The increase in research and development expenses was primarily due to an increase in research and development expenses related to our CAR-T development program of approximately $845,000, an increase in research and development expenses related to our breast cancer vaccine development program of approximately $834,000, an increase in research and development expenses related to our new vaccine discover program of approximately $113,000, an increase in clinical trial consulting services of approximately $101,000, offset by a decrease in research and development expenses related to our ovarian cancer vaccine development program of approximately $170,000 and a decrease in consultant stock option expense of approximately $137,000.

Current wording

Research and development expenses decreased by approximately $1,325,000 to approximately $5,071,000 in fiscal year 2025, from approximately $6,396,000 in fiscal year 2024. The decrease in research and development expenses was primarily due to a decrease in research and development expenses related to our breast cancer vaccine development program as a result of fluctuations in the timing of certain materials manufacturing activities of approximately $674,000, a decrease in research and development expenses related to our CAR-T development program as a result of fluctuations in the timing of certain materials manufacturing activities of approximately $406,000, a decrease in employee stock option expense as a result of decreases in the calculated fair market value of stock options granted during the year and allocations of headcount to research and development activities of approximately $274,000, and a decrease in employee compensation expense other than stock-based compensation as a result of changes in allocations of headcount to research and development activities of approximately $61,000, offset by an increase in research and development expenses related to our new vaccine discovery program due to a full year of activity compared to the prior year of approximately $113,000.

Previous wording

General and administrative expenses increased by approximately $1,144,000 to approximately $7,435,000 in fiscal year 2024, from approximately $6,291,000 in fiscal year 2023. The increase in general and administrative expenses was principally due to an increase in investor and public relations firm expenses of approximately $629,000, an increase in stock compensation for investor and public relations firm of approximately $145,000, an increase in employee compensation and related costs, other than stock option compensation expense, of approximately $141,000 and an increase in employee stock option compensation expense of approximately $111,000.

Current wording

General and administrative expenses decreased by approximately $805,000 to approximately $6,630,000 in fiscal year 2025, from approximately $7,435,000 in fiscal year 2024. The decrease in general and administrative expenses was principally due to a decrease in investor and public relations firm expenses as a result of changes in firms used during the year of approximately $454,000, a decrease in director stock option compensation expense as a result of decreases in the calculated fair market value of stock options granted during the year of approximately $359,000, a decrease in stock compensation for investor and public relations firms as a result of changes in firms used during the year of approximately $219,000, a decrease in employee stock option compensation expense as a result of decreases in the calculated fair market value of stock options granted during the year of approximately $106,000, and a decrease in employee compensation expense other than stock-based compensation as a result of changes in allocations of headcount between research and development and general and administrative activities as well as changes in employee compensation of approximately $54,000, offset by an increase in expenses related to a change in clinical materials manufacturing vendors of approximately $244,000, an increase in shareholder relations expenses of approximately $74,000, and an increase in patent prosecution expenses of approximately $73,000.

Previous wording

Interest income increased to approximately $1,133,000 in fiscal year 2024 compared to approximately $1,081,000 in fiscal year 2023, due to an increase in interest rates and the increased average dollar amount held in short-term investments.

Current wording

Interest income decreased to approximately $673,000 in fiscal year 2025 compared to approximately $1,133,000 in fiscal year 2024, due to a decrease in the amount of short-term investments held and a decrease in interest rates.

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 $144,000 in fiscal year 2024, from approximately $119,000 in fiscal year 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, decreased by approximately $43,000 to approximately $101,000 in fiscal year 2025, from approximately $144,000 in fiscal year 2024, as Certainty’s net loss decreased.

Previous wording

Based on currently available information as of January 10, 2025, 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 year ended October 31, 2024, we raised approximately $2,955,000, net of expenses, through an at-the-market equity offering of 785,290 shares 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 October 31, 2024, we may sell up to $97 million of common stock. We may seek to obtain working capital during our fiscal year 2025 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 could significantly harm the business and development of operations.

Current wording

Based on currently available information as of January 12, 2026, 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 year ended October 31, 2025, we raised approximately $2,378,000, net of expenses, through an at-the-market equity offering of 772,001 shares 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 October 31, 2025, we may sell up to $100 million of common stock. We may seek to obtain working capital during our fiscal year 2026 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 could significantly harm the business and development of operations.

Previous wording

During the fiscal year ended October 31, 2024, cash used in operating activities was approximately $7,335,000. Cash provided by investing activities was approximately $4,276,000, resulting from the proceeds on maturities of short-term investments of approximately $68,046,000, which was offset by the purchase of short-term investments of approximately $63,770,000. Cash provided by financing activities was approximately $3,415,000, resulting from the sale of 785,290 shares of common stock in at at-the-market equity offering of approximately $2,955,000, proceeds from the exercise of stock options of approximately $456,000 and proceeds from the sale of common stock pursuant to an employee stock purchase plan of approximately $10,000, offset by the purchase of treasury stock of approximately $6,000. As a result, our cash, cash equivalents, and short-term investments at October 31, 2024 decreased approximately $3,920,000 to approximately $19,924,000 from approximately $23,844,000 at the end of fiscal year 2023.

Current wording

During the fiscal year ended October 31, 2025, cash used in operating activities was approximately $7,173,000. Cash provided by investing activities was approximately $4,866,000, resulting from the proceeds on maturities of short-term investments of approximately $49,226,000, which was offset by the purchase of short-term investments of approximately $44,360,000. Cash provided by financing activities was approximately $2,280,000, resulting from the sale of 772,001 shares of common stock in an at-the-market equity offering of approximately $2,378,000 net of expenses and proceeds from the sale of common stock pursuant to an employee stock purchase plan of approximately $7,000, offset by net costs from the exercise of stock options of approximately $105,000. As a result, our cash, cash equivalents, and short-term investments at October 31, 2025 decreased approximately $4,750,000 to approximately $15,174,000 from approximately $19,924,000 at the end of fiscal year 2024.

Previous wording

We have expected future cash obligations related to the lease of our offices through 2029, inclusive of extension periods, estimated at approximately $312,000.

Current wording

We have expected future cash obligations related to the lease of our offices through 2029, inclusive of extension periods, estimated at approximately $256,000.

Previous wording

For stock awards granted to employees and directors that vest at date of grant, we recognize expense based on the grant date market price of the underlying common stock. 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).

Current wording

For restricted stock awards granted to employees and directors that vest at date of grant, we recognize expense based on the grant date market price of the underlying common stock. 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).

Previous wording

The Black-Scholes pricing model and the Monte Carlo Simulation we use to estimate fair value requires valuation assumptions of expected term, expected volatility, risk-free interest rates and expected dividend yield. The expected term of stock options represents the weighted average period the stock options are expected to remain outstanding. For employees, we use the simplified method, which is a weighted average of the vesting term and contractual term, to determine expected term. The simplified method was adopted since we do not believe that historical experience is representative of future performance because of the impact of the changes in our operations and the change in terms from historical options. For consultants we use the contract term for expected term. Under the Black-Scholes pricing model, we estimated the expected volatility of our shares of common stock based upon the historical volatility of our share price over a period of time equal to the expected term of the grants. We estimated the risk-free interest rate based on the implied yield available on the applicable grant date of a U.S. Treasury note with a term equal to the expected term of the underlying grants. We made the dividend yield assumption based on our history of not paying dividends and our expectation not to pay dividends in the future.

Current wording

The Black-Scholes pricing model and the Monte Carlo Simulation we use to estimate fair value requires valuation assumptions of expected term, expected volatility, risk-free interest rates and expected dividend yield. The expected term of stock options represents the weighted average period the stock options are expected to remain outstanding. For employees, we use the simplified method, which is a weighted average of the vesting term and contractual term, to determine expected term. The simplified method was adopted since we do not believe that we have sufficient historical exercise data on which to base our own estimate. For consultants, we use the contract term for expected term. Under the Black-Scholes pricing model, we estimated the expected volatility of our shares of common stock based upon the historical volatility of our share price over a period of time equal to the expected term of the grants. We estimated the risk-free interest rate based on the implied yield available on the applicable grant date of a U.S. Treasury note with a term equal to the expected term of the underlying grants. We made the dividend yield assumption based on our history of not paying dividends and our expectation not to pay dividends in the future.