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Item 1. Financial Statements

2021-06-10 compared with 2021-03-11 · 783 added, 637 removed, 242 unchanged (85% of the section changed)

4 unchanged sentences

Current assets:

Cash and cash equivalents

Short-term investments in certificates of deposit

Prepaid expenses and other current assets

Cash and cash

Short-term investments

expenses and other current assets

Total current assets

Operating lease right-of-use asset

LIABILITIES AND EQUITY

LIABILITIES AND

Current liabilities:

1 unchanged sentence

Accrued expenses

Operating lease liability

Total current liabilities

lease liability

current liabilities

Commitments and contingencies (Note 10)

Shareholders’

Preferred stock, par value $100 per share;

Preferred stock, par value

$100 per share;

19,860 shares authorized;

no shares issued or outstanding

Series A convertible preferred stock, par value $100 per share;

Series A convertible preferred

stock, par value $100 per share;

140 shares authorized;

no shares issued or outstanding

Common stock, par value $.01 per share;

Common stock, par value

$.01 per share;

100,000,000 shares authorized;

1 unchanged sentence

Additional paid-in capital

Accumulated deficit

(196,442,760 )

1 unchanged sentence

Total shareholders’

Noncontrolling interest (Note 1)

Total liabilities and equity

Noncontrolling

interest (Note 1)

liabilities and equity

accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

For the Three Months Ended

Three Months Ended

Six Months Ended

Operating costs and expenses:

Inventor royalties, contingent legal fees, litigation and licensing expenses

Research and development expenses (including non-cash share-based compensation expenses of $290,207 and $397,523, respectively)

General and administrative expenses (including non-cash share-based compensation expenses of $695,892 and $623,811, respectively)

Total operating costs and expenses

Inventor royalties, contingent

legal fees, litigation and

licensing expenses

Research and development

expenses (including non-cash share-based compensation expenses of $447,176, $458,132, $737,382 and $855,655, respectively)

and administrative expenses (including non-cash share-based compensation expenses of $604,096, $651,954, $1,299,989 and $1,275,765,

respectively)

operating costs and expenses

Loss from operations

Interest income

Net loss attributable to noncontrolling interest

Net loss attributable to common shareholders

Net loss attributable

to noncontrolling interest

Net loss attributable

to common shareholders

$ (2,398,851 )

$ (2,640,093 )

Net loss per common share attributable to common shareholders:

Basic and diluted

$ (4,607,142 )

$ (5,232,636 )

Net loss per common share attributable to common

shareholders:

Weighted average common shares outstanding:

Basic and diluted

accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’

THE THREE MONTHS ENDED JANUARY 31, 2021 (UNAUDITED )

EQUITY (UNAUDITED )

THE THREE MONTHS ENDED APRIL 30, 2021

Shareholders’

October 31, 2020

Balance, January 31, 2021

$ 207,382,102

$ (194,043,909 )

option compensation to employees and directors

options and warrants issued to consultants

stock issued upon exercise of stock options

stock issued in at-the-market offering, net of offering expenses of $184,510

January 31, 2021

Stock option compensation to employees and

Stock options and warrants issued to consultants

Common stock issued upon exercise of stock

Common stock issued pursuant to employee stock

purchase plan

Common stock issued in a public offering, net

offering expenses of $2,208,150

Common stock issued in at-the-market offering,

net of offering expenses of $156,265

Balance, April 30, 2021

$ 233,742,019

$ (196,442,760 )

THE THREE MONTHS ENDED JANUARY 31, 2020 (UNAUDITED )

THE THREE MONTHS ENDED APRIL 30, 2020

Shareholders’

October 31, 2019

Balance, January 31, 2020

$ 189,646,000

$ (184,409,806 )

option compensation to employees and directors

options issued to consultants

stock issued upon exercise of stock options

stock issued in at-the-market offering, net of offering expenses of $100,972

January 31, 2020

Stock option compensation to employees and

Stock options and warrants issued to consultants

Common stock issued upon exercise of stock

Common stock issued pursuant to employee stock

purchase plan

Common stock issued in at-the-market offering,

net of offering expenses of $57,324

Balance, April 30, 2020

$ 192,122,260

3 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’

EQUITY (UNAUDITED )

THE SIX MONTHS ENDED APRIL 30, 2021

Shareholders’

Balance, October 31, 2020

$ 200,354,488

$ (191,835,618 )

Stock option compensation to employees and

Stock options and warrants issued to consultants

Common stock issued upon exercise of stock

Common stock issued pursuant to employee stock

purchase plan

Common stock issued in a public offering, net

offering expenses of $2,208,150

Common stock issued in at-the-market offering,

net of offering expenses of $340,775

Balance, April 30, 2021

$ 233,742,019

$ (196,442,760 )

THE SIX MONTHS ENDED APRIL 30, 2020

Shareholders’

Balance, October 31, 2019

$ 186,849,299

$ (181,817,263 )

Stock option compensation to employees and

Stock options and warrants issued to consultants

Common stock issued upon exercise of stock

Common stock issued pursuant to employee stock

purchase plan

Common stock issued in at-the-market offering,

net of offering expenses of $158,296

Balance, April 30, 2020

$ 192,122,260

$ (187,049,899 )

accompanying notes are an integral part of these condensed consolidated financial statements.

BIOSCIENCES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the three months ended

the six months ended April 30,

Cash flows from operating activities:

Reconciliation of net loss to net cash used in operating activities:

Reconciliation of net loss

to net cash used in operating activities:

$ (4,669,266 )

$ (5,274,565 )

Stock option compensation to employees and directors

Stock options and warrants issued to consultants

Depreciation of property and equipment

Stock option compensation

to employees and directors

Stock options and warrants

issued to consultants

Depreciation of property

and equipment

Gain on sale of equipment

Amortization of operating lease right-to-use asset

Change in operating assets and liabilities:

Prepaid expenses and other current assets

Amortization of operating

lease right-of-use asset

Change in operating assets

and liabilities:

Prepaid expenses and other

current assets

Accounts payable

Accrued expenses

Operating lease liability

Net cash used in operating activities

lease liability

cash used in operating activities

Cash flows from investing activities:

Disbursements to acquire short-term investments in certificates of deposit

Proceeds from maturities of short-term investments in certificates of deposit

Purchase of property and equipment

Proceeds from sale of equipment

Net cash provided by (used in) investing activities

Disbursements to acquire

short-term investments

(10,399,300 )

Proceeds from maturities

of short-term investments

Purchase of property and

from sale of equipment

cash used in investing activities

Cash flows from financing activities:

Net proceeds from sale of common stock in at-the-market offering

Proceeds from exercise of stock options

Net cash provided by financing activities

Gross proceeds from sale

of common stock in a public offering

Expenses of the public

Gross proceeds from sale

of common stock in an at-the-market offering

Expenses of the at-the-market

Proceeds from sale of common

stock pursuant to employee stock purchase

from exercise of stock options

cash provided by financing activities

Net increase (decrease)in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental cash flow information:

Cash proceeds from interest income

Cash and cash equivalents

at beginning of period

Cash and cash equivalents

at end of period

Supplemental cash flow

proceeds from interest income

Supplemental disclosure

of non-cash financing activity:

value of warrants issued in connection with the public offering

accompanying notes are an integral part of these condensed consolidated financial statements.

8 unchanged sentences

or “Anixa”

Biosciences, Inc.

means Anixa Biosciences,

and its consolidated subsidiaries.

Our primary operations involve developing therapies and vaccines that are

focused on critical unmet needs in oncology and infectious disease.

Our therapeutics programs include the development of a chimeric

endocrine receptor T-cell technology, a novel form of chimeric antigen receptor T-cell (“CAR-T”) technology, initially

focused on treating ovarian cancer, and discovery and ultimately development of anti-viral drug candidates for the treatment of

COVID-19 focused on inhibiting certain protein functions of the virus.

Our vaccine programs include the development of a vaccine

against breast cancer, specifically triple negative breast cancer (“TNBC”), the most lethal form of the disease, and

a vaccine against ovarian cancer.

Our primary operations involve developing therapies and vaccines that are focused on critical

unmet needs in oncology and infectious disease.

Our therapeutics programs include the development of a chimeric endocrine receptor T-cell

technology, a novel form of chimeric antigen receptor T-cell (“CAR-T”) technology, initially focused on treating ovarian

cancer, and discovery and ultimately development of anti-viral drug candidates for the treatment of COVID-19 focused on inhibiting certain

protein functions of the virus.

Our vaccine programs include the development of a vaccine against breast cancer, specifically triple

negative breast cancer (“TNBC”), the most lethal form of the disease, and a vaccine against ovarian cancer.

subsidiary, Certainty Therapeutics, Inc.

(“Certainty”), is developing immuno-therapy drugs against cancer.

holds an exclusive worldwide, royalty-bearing license to use certain intellectual property owned or controlled by The Wistar Institute

(“Wistar”) relating to Wistar’s CAR-T technology.

We have initially focused on the development of a treatment

for ovarian cancer, but we may also pursue applications of the technology for the development of treatments for additional solid

The license agreement requires Certainty to make certain cash and equity payments to Wistar upon achievement of specific

development milestones.

With respect to Certainty’s equity obligations to Wistar, Certainty issued to Wistar shares of its

common stock equal to five percent (5%) of the common stock of Certainty.

Certainty, in collaboration

Certainty holds

an exclusive worldwide, royalty-bearing license to use certain intellectual property owned or controlled by The Wistar Institute (“Wistar”)

relating to Wistar’s CAR-T technology.

We have initially focused on the development of a treatment for ovarian cancer, but we may

also pursue applications of the technology for the development of treatments for additional solid tumors.

The license agreement requires

Certainty to make certain cash and equity payments to Wistar upon achievement of specific development milestones.

With respect to Certainty’s

equity obligations to Wistar, Certainty issued to Wistar shares of its common stock equal to five percent (5%) of the common stock of

in collaboration with the H.

Lee Moffitt Cancer Center and Research Institute, Inc.

(“Moffitt”), is advancing toward human clinical

testing its CAR-T technology for treating ovarian cancer.

We are currently testing the clinical grade vector and preparing an

Investigational New Drug (“IND”) application for submission to the U.S.

Food and Drug Administration (“FDA”).

We anticipate filing the IND in the first calendar quarter of 2021.

Assuming the FDA approves our IND application, we anticipate

beginning the human clinical trials during the second half of 2021.

In April 2020, we entered

into a collaboration with OntoChem GmbH (“OntoChem”), to discover and ultimately develop anti-viral drug candidates

against COVID-19.

Through this collaboration, we utilized advanced computational methods, machine learning, and molecular modeling

techniques to perform in silico screening of over 1.2 billion compounds in chemical libraries (including publicly available

compounds and OntoChem’s proprietary libraries) to evaluate if any of these compounds could disrupt one of two key enzymes

of SARS-CoV-2, the virus that causes the disease COVID-19.

The screening process

resulted in the identification of multiple compounds that could potentially disrupt critical enzymes of the virus.

these compounds were synthesized and tested in in vitro biological assays.

(“Moffitt”), is advancing toward human

clinical testing its CAR-T technology for treating ovarian cancer.

We submitted an Investigational New Drug (“IND”) application

Food and Drug Administration (“FDA”) in March 2021.

In April 2021, the FDA informed us that they needed additional

information before allowing us to proceed with the clinical trial.

In May 2021, the FDA provided us with the details of their information

request, and we are currently working with Moffitt to address the FDA’s request.

We anticipate submitting our response to the FDA

in June 2021, after which the FDA will have approximately 30 days to respond.

Assuming the FDA finds our response acceptable, we anticipate

beginning the human clinical trials in the fourth quarter of 2021.

April 2020, we entered into a collaboration with OntoChem GmbH (“OntoChem”), to discover and ultimately develop anti-viral

drug candidates against COVID-19.

Through this collaboration, we utilized advanced computational methods, machine learning, and molecular

modeling techniques to perform in silico screening of over 1.2 billion compounds in chemical libraries (including publicly available

compounds and OntoChem’s proprietary libraries) to evaluate if any of these compounds could disrupt one of two key enzymes of SARS-CoV-2,

the virus that causes the disease COVID-19.

screening process resulted in the identification of multiple compounds that could potentially disrupt critical enzymes of the virus.

Several of these compounds were synthesized and tested in in vitro biological assays.

Upon completion of these biological assays,

we identified two of the most promising compounds and have begun testing them in animal models.

In these animal studies, the

two compounds are being compared to Remdesivir, which is the only anti-viral drug authorized by the FDA for

We anticipate this proof-of-concept animal study to be completed by the end of the first calendar quarter of 2021.

hold an exclusive worldwide, royalty-bearing license to use certain intellectual property owned or controlled by The Cleveland

Clinic Foundation (“Cleveland Clinic”) relating to certain breast cancer vaccine technology developed at Cleveland

We are working in collaboration with Cleveland Clinic to develop a method to vaccinate women against contracting breast

cancer, focused specifically on TNBC.

A specific protein, alpha-lactalbumin, has been identified that is only present during lactation

in healthy women, but reappears in many forms of breast cancer, especially TNBC.

Studies have shown that vaccinating against this

protein prevents breast cancer in mice.

In December 2020, we received authorization from the FDA to commence enrollment and treatment

of patients in a Phase 1a clinical trial.

We are performing the activities necessary to prepare for treatment of patients in the

Phase 1a clinical trial, and we anticipate being prepared to treat the first enrolled patient by mid-year 2021.

we identified two of the most promising compounds and tested them in animal models.

In these animal studies, the two compounds were compared

to Remdesivir, which is the only anti-viral drug approved by the FDA for COVID-19.

The data showed that administration of the drugs to

infected hamsters did not cause any noticeable adverse effects, and monitoring of weight and general animal behavior demonstrated comparable

efficacy of both compounds as well as Remdesivir.

Based on this promising data in the animal study, we are proceeding to the next stage

of drug development and have selected one of the compounds around which we have now begun performing combinatorial synthetic medicinal

chemistry to evaluate whether we can increase potency and optimize pharmacokinetics.

We anticipate completing this process by early fourth

quarter of 2021.

May 2021, after completion of the aforementioned animal studies, OntoChem assigned its rights and obligations related to this collaboration

to MolGenie GmbH (“MolGenie”), a company spun-out from OntoChem focused on drug discovery and development.

hold an exclusive worldwide, royalty-bearing license to use certain intellectual property owned or controlled by The Cleveland Clinic

Foundation (“Cleveland Clinic”) relating to certain breast cancer vaccine technology developed at Cleveland Clinic.

working in collaboration with Cleveland Clinic to develop a method to vaccinate women against contracting breast cancer, focused specifically

A specific protein, alpha-lactalbumin, has been identified that is only expressed during lactation in a healthy woman’s

mammary tissue.

This protein disappears when the woman is no longer lactating, but reappears in many forms of breast cancer, especially

Studies have shown that vaccinating against this protein prevents breast cancer in mice.

In December 2020, we received authorization

from the FDA to commence enrollment and treatment of patients in a Phase 1a clinical trial.

We are performing the activities necessary

to prepare for treatment of patients in the Phase 1a clinical trial, and we anticipate being prepared to treat the first enrolled patient

in July 2021.

November 2020, we executed a license agreement with Cleveland Clinic pursuant to which the Company was granted an exclusive worldwide,

royalty-bearing license to use certain intellectual property owned or controlled by Cleveland Clinic relating to certain ovarian

cancer vaccine technology.

This technology pertains to the use of vaccines for the treatment or prevention of ovarian cancers

which express the anti-Mullerian hormone receptor II protein containing an extracellular domain (“AMHR2-ED”).

tissue, this protein regulates growth and development of egg-containing follicles in the ovary.

While expression of AMHR2-ED naturally

and markedly declines after menopause, this protein is expressed at high levels in the ovaries of postmenopausal women with ovarian

Researchers at Cleveland Clinic believe that a vaccine targeting AMHR2-ED could prevent the occurrence of ovarian cancer.

We entered into a joint development agreement with Cleveland Clinic, to advance this vaccine technology toward human clinical

the next several quarters, we expect the development of our breast and ovarian cancer vaccines, our COVID-19 therapeutic program

and Certainty’s CAR-T technology to be the primary focus of the Company.

As part of our legacy operations, the Company remains

engaged in limited patent licensing activities regarding the Cchek™

liquid biopsy platform (operations for which were suspended

in July 2020), as well as 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.

the past several years, our revenue was derived from technology licensing and the sale of patented technologies, including revenue

from the settlement of litigation.

royalty-bearing license to use certain intellectual property owned or controlled by Cleveland Clinic relating to certain ovarian cancer

vaccine technology.

This technology pertains to the use of vaccines for the treatment or prevention of ovarian cancers which express

the anti-Mullerian hormone receptor II protein containing an extracellular domain (“AMHR2-ED”).

In healthy tissue, this protein

regulates growth and development of egg-containing follicles in the ovary.

While expression of AMHR2-ED naturally and markedly declines

after menopause, this protein is expressed at high levels in the ovaries of postmenopausal women with ovarian cancer.

Researchers at

Cleveland Clinic believe that a vaccine targeting AMHR2-ED could prevent the occurrence of ovarian cancer.

We entered into a joint development

agreement with Cleveland Clinic, to advance this vaccine technology toward human clinical testing.

May 2021, Cleveland Clinic was granted an award for our ovarian cancer vaccine technology by the National Cancer Institute’s (“NCI”)

PREVENT program.

The NCI is a part of the National Institutes of Health.

The PREVENT program is a peer-reviewed agent development program

designed to support preclinical development of innovative interventions and biomarkers for cancer prevention and interception towards

clinical trials.

The scientific and financial resources of the PREVENT program will be used for our ovarian cancer vaccine technology

to perform virtually all pre-clinical research and development, manufacturing and IND-enabling studies.

This work will be performed at

NCI facilities, by NCI scientific staff and with NCI financial resources.

the next several quarters, we expect the development of our breast and ovarian cancer vaccines, our COVID-19 therapeutic program and

Certainty’s CAR-T technology to be the primary focus of the Company.

As part of our legacy operations, the Company remains engaged

in limited patent licensing activities regarding the Cchek™

liquid biopsy platform (operations for which were suspended in July

2020), as well as 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.

the past several years, our revenue was derived from technology licensing and the sale of patented technologies, including revenue from

the settlement of litigation.

We have not generated any revenue to date from our therapeutics or vaccine programs.

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.

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

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.

and Management’s Plans

on currently available information as of March 11, 2021, we believe that our existing cash, cash equivalents, short-term investments

and expected cash flows will be sufficient to fund our activities for the next twelve months.

on currently available information as of June 10, 2021, 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 three months ended January 31, 2021, we raised approximately $5,957,000,

net of expenses, through an at-the-market equity offering of 1,900,547 shares of common stock, under which offering we may issue

up to $50 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 January 31, 2021, we may sell an additional approximately $34,670,000 of common stock.

seek to obtain working capital during our fiscal year 2021 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 could 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

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, 2021, we raised approximately $20,292,000, net of expenses, through a public

offering in which we sold an aggregate of 4,285,715 shares of common stock and approximately $10,834,000, net of expenses, through our

at-the-market equity program in which we sold an aggregate of 2,806,410 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 April 30, 2021, we may sell an additional approximately

$29.6 million of common stock.

We may seek to obtain working capital during our fiscal year 2021 or thereafter through sales of our equity

securities or through bank credit facilities or public or private debt from various financial institutions where possible.

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.

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.

of Presentation

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting

principles in the United States of America (“US GAAP”) for interim financial information and with the instructions

to Form 10-Q and Rule 8-03 of Regulation S-X.

Accordingly, certain information and disclosures required by generally accepted

accounting principles in annual financial statements have been omitted or condensed.

These interim condensed consolidated financial

statements should be read in conjunction with the audited consolidated financial statements and related disclosures included in

our Annual Report on Form 10-K for the year ended October 31, 2020.

The accompanying October 31, 2020 condensed consolidated balance

sheet data was derived from the audited financial statements but does not include all disclosures required by US GAAP.

The condensed

consolidated financial statements include all adjustments of a normal recurring nature which, in the opinion of management, are

necessary for a fair statement of our financial position as of January 31, 2021, and results of operations and cash flows for

the interim periods represented.

The results of operations for the three months ended January 31, 2021 are not necessarily indicative

of the results to be expected for the entire year.

principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form

10-Q and Rule 8-03 of Regulation S-X.

Accordingly, certain information and disclosures required by generally accepted accounting principles

in annual financial statements have been omitted or condensed.

These interim condensed consolidated financial statements should be read

in conjunction with the audited consolidated financial statements and related disclosures included in our Annual Report on Form 10-K

for the year ended October 31, 2020.

The accompanying October 31, 2020 condensed consolidated balance sheet data was derived from the

audited financial statements but does not include all disclosures required by US GAAP.

The condensed consolidated financial statements

include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair statement of our financial

position as of April 30, 2021, and results of operations and cash flows for the interim periods represented.

The results of operations

for the six months ended April 30, 2021 are not necessarily indicative of the results to be expected for the entire year.

Noncontrolling

1 unchanged sentence

interest represents Wistar’s equity ownership in Certainty and is presented as a component of equity.

The following table

sets forth the changes in noncontrolling interest for the three months ended January 31, 2021:

The following table sets

forth the changes in noncontrolling interest for the six months ended April 30, 2021:

Balance, October 31, 2020

Net loss attributable to noncontrolling interest

Balance, January 31, 2021

Net loss attributable

to noncontrolling interest

Balance, April 30, 2021

revenue has been derived solely from technology licensing and the sale of patented technologies.

Revenue is recognized upon transfer

of control of intellectual property rights and satisfaction of other contractual performance obligations to licensees in an amount

that reflects the consideration we expect to receive.

of control of intellectual property rights and satisfaction of other contractual performance obligations to licensees in an amount that

reflects the consideration we expect to receive.

follow the accounting guidance of Accounting Standards Codification 606 (“ASC 606”), Revenue from Contracts with Customers.

In accordance with ASC 606 we are required to make certain judgments and estimates in connection with the accounting for revenue.

Such areas may include determining the existence of a contract and identifying each party’s rights and obligations to transfer

goods and services, identifying the performance obligations in the contract, determining the transaction price and allocating

judgments and estimates may include determining the existence of a contract and identifying each party’s rights and obligations

to transfer goods and services, identifying the performance obligations in the contract, determining the transaction price and allocating

the transaction price to separate performance obligations, estimating the timing of satisfaction of performance obligations, determining

whether a promise to grant a license is distinct from other promised goods or services and evaluating whether a license transfers

to a customer at a point in time or over time.

revenue arrangements provide for the payment, within 30 days of execution of the agreement, of contractually determined, one-time,

paid-up license fees in settlement of litigation and in consideration for the grant of certain intellectual property rights for

patented technologies owned or controlled by the Company.

whether a promise to grant a license is distinct from other promised goods or services and evaluating whether a license transfers to

a customer at a point in time or over time.

revenue arrangements provide for the payment, within 30 days of execution of the agreement, of contractually determined, one-time, paid-up

license fees in settlement of litigation and in consideration for the grant of certain intellectual property rights for patented technologies

owned or controlled by the Company.

These arrangements typically include some combination of the following:

(i) the grant of a non-exclusive, retroactive and future license to manufacture and/or sell products covered by patented technologies

owned or controlled by the Company, (ii) a covenant-not-to-sue, (iii) the release of the licensee from certain claims, and (iv)

the dismissal of any pending litigation.

In such instances, the intellectual property rights granted have been perpetual in nature,

extending until the expiration of the related patents.

Pursuant to the terms of these agreements, 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.

Licensees obtained control of the intellectual property rights they have acquired upon execution of

the agreement.

Accordingly, the performance obligations from these agreements were satisfied and 100% of the revenue was recognized

upon the execution of the agreements.

of revenues include the costs and expenses incurred in connection with our patent licensing and enforcement activities, including

inventor royalties paid to original patent owners, contingent legal fees paid to external counsel, other patent-related legal

expenses paid to external counsel and licensing and enforcement related research, consulting and other expenses paid to third-parties.

These costs are included under the caption “Operating costs and expenses”

in the accompanying condensed consolidated

statements of operations.

(i) the grant of a non-exclusive,

retroactive and future license to manufacture and/or sell products covered by patented technologies owned or controlled by the Company,

(ii) a covenant-not-to-sue, (iii) the release of the licensee from certain claims, and (iv) the dismissal of any pending litigation.

In such instances, the intellectual property rights granted have been perpetual in nature, extending until the expiration of the related

Pursuant to the terms of these agreements, 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.

Licensees obtained control

of the intellectual property rights they have acquired upon execution of the agreement.

Accordingly, the performance obligations from

these agreements were satisfied and 100% of the revenue was recognized upon the execution of the agreements.

of revenues include the costs and expenses incurred in connection with our patent licensing and enforcement activities, including inventor

royalties paid to original patent owners, contingent legal fees paid to external counsel, other patent-related legal expenses paid to

external counsel and licensing and enforcement related research, consulting and other expenses paid to third-parties.

These costs are

included under the caption “Operating costs and expenses”

in the accompanying condensed consolidated statements of operations.

and Development Expenses

and development expenses, consisting primarily of employee compensation, payments to third parties for research and development

activities and other direct costs associated with developing immuno-therapy drugs against cancer, preventative cancer vaccines

and anti-viral drug candidates for COVID-19, are expensed in the accompanying condensed consolidated financial statements in the

period incurred.

and development expenses, consisting primarily of employee compensation, payments to third parties for research and development activities

and other direct costs associated with developing immuno-therapy drugs against cancer, preventative cancer vaccines and anti-viral drug

candidates for COVID-19, are expensed in the accompanying condensed consolidated financial statements in the period incurred.

PUBLIC OFFERING

March 25, 2021, the Company completed a public offering in which we sold an aggregate of 4,285,715 shares of its common stock, which

represented 15.8% of the Company’s outstanding shares at the time of the offering, at a public offering price of $5.25 per share.

The Company realized net proceeds of approximately $20,292,000 from the public offering, after deducting underwriting discounts and deal

In connection with the public offering, the Company issued to certain designees of the underwriter, as compensation, warrants

expiring on March 22, 2026, to purchase 300,000 shares of common stock at $6.5625 per share.

STOCK BASED COMPENSATION

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.

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.

Option Compensation Expense

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.

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 $881,000 and $1,055,000 during the three months ended April 30, 2021

and 2020, respectively, and approximately $1,756,000 and $2,019,000 during the six months ended April 30, 2021 and 2020, respectively.

stock options granted to employees and directors that vest based on market conditions, such as the trading price of the Company’s

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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.

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.

the three months ended January 31, 2021, we had two stock option plans:

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.

The second and third tranches did not vest as of May 31, 2021.

We did not record any market condition stock-based compensation

expense during the six months ended April 30, 2021 and 2020.

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 $132,000 and $55,000 during the three months ended April 30, 2021 and 2020, respectively, and approximately

$186,000 and $112,000 during the six months ended April 30, 2021 and 2020, respectively.

the six months ended April 30, 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.

the three months ended January 31, 2020, the remaining outstanding options under the Anixa Biosciences, Inc.

2003 Share Incentive

Plan (the “2003 Plan”) expired.

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.

Further, we had an additional stock option plan:

the Anixa Biosciences, Inc.

2003 Share Incentive Plan (the “2003

Share Plan”), under which all outstanding options expired during the six months ended April 30, 2020.

Option Activity

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 provided for the grant of nonqualified stock options, stock appreciation rights, stock awards, performance awards and

the three months ended April 30, 2021 and 2020, we granted options to purchase 250,000 shares and -0- shares of common stock, respectively,

and during the six months ended April 30, 2021 and 2020, we granted options to purchase 1,380,000 shares and 800,000 shares of common

stock, respectively, to employees and consultants, with exercise prices ranging from $2.83 to $5.30 per share, pursuant to the 2018 Share

During the three months ended April 30, 2021 and 2020, stock options to purchase 77,571 shares, net of 7,937 shares withheld on

a cashless exercise, and 25,000 shares of common stock, respectively, were exercised with aggregate proceeds of approximately $189,000

and $75,000, respectively.

During the six months ended April 30, 2021 and 2020, stock options to purchase 107,451 shares, net of 7,937

shares withheld on a cashless exercise, and 43,900 shares of common stock, respectively, were exercised with aggregate proceeds of approximately

$294,000 and $104,000, respectively.

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.

In accordance with the provisions of the 2003 Plan, the plan terminated with

In accordance with the provisions of the 2003 Share 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:

regarding the 2003 Plan for the six months ended April 30, 2020 is as follows:

Average Exercise

Price Per Share

Aggregate Intrinsic

Options outstanding at October 31, 2019

Forfeited/Expired

Options outstanding and exercisable at January 31, 2020

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:

Options outstanding

and exercisable at

April 30, 2020

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.

regarding the 2010 Share Plan for the six months ended April 30, 2021 is as follows:

Average Exercise

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Options outstanding

at January 31, 2021

Options exercisable

at January 31, 2021

following table summarizes information about stock options outstanding and exercisable under the 2010 Share Plan as of January

Options Outstanding

at April 30, 2021

Options exercisable

Exercise Prices

Contractual Life

at April 30, 2021

following table summarizes information about stock options outstanding and exercisable under the 2010 Share Plan as of April 30, 2021:

Average Remaining Contractual Life

Exercise Price

Contractual Life

Average Remaining Contractual Life

Exercise Price

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$ 3.46 - $ 5.30

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

regarding the 2010 Share Plan for the six months ended April 30, 2020 is as follows:

Average Exercise

Price Per Share

Options Outstanding at October 31, 2019

Forfeited/Expired

Options Outstanding at January 31, 2020

Options Exercisable at January 31, 2020

following table summarizes information about stock options outstanding and exercisable under the 2010 Share Plan as of January

Options outstanding

Options Exercisable

Exercise Prices

Contractual Life

Exercise Price

Contractual Life

at October 31, 2019

Forfeited/Expired

outstanding at April 30, 2020

exercisable at April 30, 2020

following table summarizes information about stock options outstanding and exercisable under the 2010 Share Plan as of April 30, 2020:

Average Remaining Contractual Life

Exercise Price

Average Remaining Contractual Life

$ 0.67 - $2.30

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$ 3.46 - $ 5.75

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:

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 April 30, 2021, the 2018 Share Plan had 1,757,937 shares

available for future grants.

regarding the 2018 Share Plan for the six months ended April 30, 2021 is as follows:

Average Exercise

Price Per Share

Aggregate Intrinsic Value

Intrinsic Value

Options outstanding at October 31, 2020

Forfeited/Expired

Options outstanding at January 31, 2021

Options exercisable at January 31, 2021

following table summarizes information about stock options outstanding and exercisable under the 2018 Share Plan as of January

Options Outstanding

Options Exercisable

Exercise Prices

Contractual Life

Exercise Price

Contractual Life

Options outstanding at April 30, 2021

Options exercisable at April 30, 2021

following table summarizes information about stock options outstanding and exercisable under the 2018 Share Plan as of April 30, 2021:

of Exercise Prices

Average Remaining Contractual Life

Average Exercise Price

Average Remaining Contractual Life

Average Exercise Price

regarding the 2018 Share Plan for the six months ended April 30, 2020 is as follows:

Average Exercise

Price Per Share

Intrinsic Value

Options outstanding at October 31, 2019

Options outstanding at April 30, 2020

Options exercisable at April 30, 2020

following table summarizes information about stock options outstanding and exercisable under the 2018 Share Plan as of April 30, 2020:

of Exercise Prices

Average Remaining Contractual Life

Weighted Average

Exercise Price

$ 2.09 - $3.70

$ 3.84 - $4.61

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

Average Remaining Contractual Life

Average Exercise Price

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 (the “Non-Plan Options”).

regarding Non-Plan Options for the six months ended April;

30, 2021 is as follows:

Average Exercise

Price Per Share

Aggregate Intrinsic Value

Options outstanding at October 31, 2020

Options Outstanding at January 31, 2020

Options Exercisable at January 31, 2020

following table summarizes information about stock options outstanding and exercisable under the 2018 Share Plan as of January

Options outstanding

Options Exercisable

Exercise Prices

Contractual Life

Exercise Price

Contractual Life

Exercise Price

$ 3.84 - $4.61

of Share Plans

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:

Average Exercise Price Per Share

Intrinsic Value

outstanding at October 31, 2020

outstanding and exercisable at January 31, 2021

following table summarizes information about stock options outstanding and exercisable that were granted outside of Share Plans

as of January 31, 2021:

and exercisable at

April 30, 2021

following table summarizes information about Non-Plan Options outstanding and exercisable as of April 30, 2021:

Exercise Prices

Weighted Average Remaining Contractual Life

Average Remaining Contractual Life

Exercise Price

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

Average Exercise Price Per Share

regarding Non-Plan Options for the six months ended April 30, 2020 is as follows:

Weighted Average

Exercise Price Per Share

Intrinsic Value

outstanding at October 31, 2019

outstanding and exercisable at January 31, 2020

following table summarizes information about stock options outstanding and exercisable that were granted outside of Share Plans

as of January 31, 2020:

Options outstanding at October 31, 2019

Options outstanding and exercisable at

following table summarizes information about Non-Plan Options outstanding and exercisable as of April 30, 2020:

Exercise Prices

Weighted Average

Contractual Life

Exercise Price

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.

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.

June 1, 2021, stock options to purchase 2,990,000 shares were granted under the 2018 Share Plan.

Each of our non-employee directors was

awarded options for 30,000 shares that vest over one year.

Our Lead Independent Director, our Chairman, President and Chief Executive

Officer and our Chief Operating Officer and Chief Financial Officer were awarded options for 200,000 shares, 500,000 shares and 100,000

shares, respectively, that vest over three years.

Further, our Chairman, President and Chief Executive Officer and our Chief Operating

Officer and Chief Financial Officer were awarded options for 2,000,000 shares and 100,000 shares, respectively, that vest in four equal

installments upon the Company’s share price achieving targets ranging from $5.00 to $8.00 per share.

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 was to vest 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.

The restricted stock award did not vest as of 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 six months ended April 30, 2021 and 2020.

Stock Purchase Plan

Company maintains the Anixa Biosciences, Inc.

Employee Stock Purchase Plan (“ESPP”) which permits eligible employees

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 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.

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

No warrants were issued during the three-month periods ended January 31, 2021 and 2020.

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.

The plan was adopted by our Board of Directors on August 13, 2018 and approved

by our shareholders on September 27, 2018.

During the six months ended April 30, 2021 and 2020, employees purchased 1,634 and 9,618 shares,

respectively, with aggregate proceeds of approximately $3,000 and $15,000, respectively.

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 $38,000 and $96,000,

respectively, during the three and six months ended April 30, 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 and six

months ended April 30, 2020.

discussed in Note 2, in connection with the March 25, 2021 public offering we issued to certain designees of the underwriter, as compensation,

warrants to purchase 300,000 shares of common stock at $6.5625 per share, expiring on March 22, 2026.

No warrants were issued during

the six-month period ended April 30, 2020.

of April 30, 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.

FAIR VALUE MEASUREMENTS

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based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below.

the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based

on the lowest level input that is significant to the fair value measurement of the instrument.

assets and liabilities recorded in the accompanying condensed consolidated balance sheets are categorized based on the inputs

to the valuation techniques as follows:

1 - Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in

an active market which we have the ability to access at the measurement date.

2 - Financial assets and liabilities whose values are based on quoted market prices in markets where trading occurs infrequently

or whose values are based on quoted prices of instruments with similar attributes in active markets.

Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are

both unobservable and significant to the overall fair value measurement.

These inputs reflect management’s own assumptions

about the assumptions a market participant would use in pricing the asset and liabilities.

following table presents the hierarchy for our financial assets measured at fair value on a recurring basis as of January 31,

If the inputs

used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level

input that is significant to the fair value measurement of the instrument.

assets and liabilities recorded in the accompanying condensed consolidated balance sheets are categorized based on the inputs to the

valuation techniques as follows:

1 - Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active

market which we have the ability to access at the measurement date.

2 - Financial assets and liabilities whose values are based on quoted market prices in markets where trading occurs infrequently or whose

values are based on quoted prices of instruments with similar attributes in active markets.

Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both

unobservable and significant to the overall fair value measurement.

These inputs reflect management’s own assumptions about the

assumptions a market participant would use in pricing the asset and liabilities.

following table presents the hierarchy for our financial assets measured at fair value on a recurring basis as of April 30, 2021:

Money market funds:

Cash and cash equivalents

Cash and cash

Certificates of deposit:

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Short-term investments

Treasury bills and bonds:

Total financial assets

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Money market funds:

Cash and cash equivalents

Cash and cash

Certificates of deposit:

Cash and cash equivalents

Short-term investments

Total financial assets

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whenever events or changes in circumstances indicate a condition of impairment exists.

The estimated fair value of prepaid expenses

and other current assets, accounts payable and accrued expenses approximates their individual carrying amounts due to the short-term

nature of these measurements.

The estimated fair value of prepaid expenses and

other current assets, accounts payable and accrued expenses approximates their individual carrying amounts due to the short-term nature

of these measurements.

Cash and cash equivalents are stated at carrying value which approximates fair value.

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Accrued royalty and contingent legal fees

Accrued collaborative research and license expense

Accrued collaborative research and license

Accrued other

NET LOSS PER SHARE OF COMMON STOCK

net loss per common share (“Basic EPS”) is computed by dividing net loss by the weighted average number of common

shares outstanding.

Diluted net loss per common share (“Diluted EPS”) is computed by dividing net loss by the weighted

average number of common shares and dilutive common share equivalents and convertible securities then outstanding.

for all periods presented is the same as Basic EPS, as the inclusion of the effect of common share equivalents then outstanding

would be anti-dilutive.

For this reason, excluded from the calculation of Diluted EPS for the three months ended January 31, 2021

and 2020, were stock options to purchase 8,659,134 and 8,407,234 shares, respectively, and warrants to purchase 560,000 and 500,000

shares, respectively.

net loss per common share (“Basic EPS”) is computed by dividing net loss by the weighted average number of common shares

Diluted net loss per common share (“Diluted EPS”) is computed by dividing net loss by the weighted average number

of common shares and dilutive common share equivalents and convertible securities then outstanding.

Diluted EPS for all periods presented

is the same as Basic EPS, as the inclusion of the effect of common share equivalents then outstanding would be anti-dilutive.

reason, excluded from the calculation of Diluted EPS for the six months ended April 30, 2021 and 2020, were stock options to purchase

8,813,626 and 8,382,234 shares, respectively, and warrants to purchase 860,000 and 500,000 shares, respectively.

EFFECT OF RECENTLY ADOPTED AND ISSUED PRONOUNCEMENTS

February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2016-02 (“ASU 2016-02”)

Accounting Standards Codification Topic 842, Leases (ASC 842), which supersedes Topic 840, Leases, and which requires lessees

Accounting Standards Codification Topic 842, Leases (“ASC 842”), which supersedes Topic 840, Leases, and which requires lessees

to recognize most leases on the balance sheet.

The new lease standard does not substantially change lessor accounting.

companies, the standard was effective for the first interim reporting period within annual periods beginning after December 15,

2018, although early adoption was permitted.

Lessees and lessors were required to apply the new standard at the beginning of the

earliest period presented in the financial statements in which they first apply the new guidance.

In July 2018, FASB issued ASU

2018-11, Leases, which provides an additional transition option for an entity to apply the provisions of ASC 842 by recognizing

a cumulative effect adjustment at the effective date of adoption without adjusting the prior comparative periods presented.

requirements of this standard include a significant increase in required disclosures.

For public companies,

the standard was effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early

adoption was permitted.

Lessees and lessors were required to apply the new standard at the beginning of the earliest period presented

in the financial statements in which they first apply the new guidance.

In July 2018, FASB issued ASU 2018-11, Leases, which provides

an additional transition option for an entity to apply the provisions of ASC 842 by recognizing a cumulative effect adjustment at the

effective date of adoption without adjusting the prior comparative periods presented.

The requirements of this standard include a significant

increase in required disclosures.

The Company adopted ASU 2016-02 on November 1, 2019.

The adoption of this standard did not have a material impact on our condensed consolidated financial statements.

Note 8 regarding the accounting and disclosures related to our office lease.

recognize deferred tax assets and liabilities for the estimated future tax effects of events that have been recognized in our

financial statements or tax returns.

Under this method, deferred tax assets and liabilities are determined based on the difference

between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which

the differences are expected to reverse.

A valuation allowance is established, when necessary, to reduce deferred tax assets to

the amount expected to be realized.

We have provided a full valuation allowance against our deferred tax asset due to our historical

pre-tax losses and the uncertainty regarding the realizability of these deferred tax assets.

The adoption of this standard did not have a material

impact on our condensed consolidated financial statements.

See Note 9 regarding the accounting and disclosures related to our office

recognize deferred tax assets and liabilities for the estimated future tax effects of events that have been recognized in our financial

statements or tax returns.

Under this method, deferred tax assets and liabilities are determined based on the difference between the

financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are

expected to reverse.

A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount expected to be

We have provided a full valuation allowance against our deferred tax asset due to our historical pre-tax losses and the uncertainty

regarding the realizability of these deferred tax assets.

have substantial net operating loss carryforwards for Federal and California income tax returns.

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could be subject to limitations under Internal Revenue Code section 382.

We have no unrecognized income tax benefits as of January

31, 2021 and October 31, 2020 and we account for interest and penalties related to income tax matters, if any, in general and

administrative expenses.

lease approximately 2,000 square feet of office space at 3150 Almaden Expressway, San Jose, California (our principal executive

offices) from an unrelated party pursuant to an operating lease that expires September 30, 2021.

Our base rent is approximately

$5,000 per month and the lease provides for annual increases of approximately 3% and an escalation clause for increases in certain

operating costs.

Rent expense was approximately $16,000 and $16,000, respectively, for the three months ended January 31, 2021

November 1, 2019, the Company adopted ASC 842, which increases transparency and comparability by recognizing a lessee’s

rights and obligations resulting from leases by recording them on the balance sheet as lease assets and lease liabilities.

new guidance requires the recognition of the right-of-use (“ROU”) assets and related operating lease liabilities on

the balance sheet.

We have no unrecognized income tax benefits as of April 30,

2021 and October 31, 2020 and we account for interest and penalties related to income tax matters, if any, in general and administrative

lease approximately 2,000 square feet of office space at 3150 Almaden Expressway, San Jose, California (our principal executive offices)

from an unrelated party pursuant to an operating lease that expires September 30, 2021.

Our base rent is approximately $5,000 per month

and the lease provides for annual increases of approximately 3% and an escalation clause for increases in certain operating costs.

expense was approximately $16,000 and $16,000, respectively, for the three months ended April 30, 2021 and 2020, and approximately $32,000

and $32,000, respectively, for the six months ended April 30, 2021 and 2020.

November 1, 2019, the Company adopted ASC 842, which increases transparency and comparability by recognizing a lessee’s rights

and obligations resulting from leases by recording them on the balance sheet as lease assets and lease liabilities.

The new guidance

requires the recognition of the right-of-use (“ROU”) assets and related operating lease liabilities on the balance sheet.

The Company adopted the new guidance using the modified retrospective approach on November 1, 2019.

Company elected the package of practical expedients permitted within the standard, which allow an entity to forgo reassessing

(i) whether a contract contains a lease, (ii) classification of leases, and (iii) whether capitalized costs associated with a

lease meet the definition of initial direct costs.

Also, the Company elected the expedient allowing an entity to use hindsight

to determine the lease term and impairment of ROU assets and the expedient to allow the Company to not have to separate lease

and non-lease components.

The Company has also elected the short-term lease accounting policy under which Anixa would not recognize

a lease liability or ROU asset for any lease that at the commencement date has a lease term of twelve months or less and does

not include a purchase option that Anixa is more than reasonably certain to exercise.

operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments.

The remaining 8-month lease term as of January 31, 2021 for the Company’s lease includes the noncancelable period of the

The lease does not contain a Company option to extend the lease or an option to extend the lease controlled by the lessor.

All ROU assets are reviewed for impairment.

The remaining

5-month lease term as of April 30, 2021 for the Company’s lease includes the noncancelable period of the lease.

The lease does

not contain a Company option to extend the lease or an option to extend the lease controlled by the lessor.

All ROU assets are reviewed

for impairment.

sheet information related to the Company’s lease is presented below:

Balance Sheet

Operating Lease:

Right-of-use asset

Operating lease right-of-use asset

Right-of-use liability, current

Right-of-use liability,

Operating lease liability

of January 31, 2021, the annual minimum lease payments of our operating lease liabilities were as follows:

Operating Leases

of April 30, 2021, the annual minimum lease payments of our operating lease liabilities were as follows:

2021 future minimum payments, undiscounted

Imputed interest

Present value of future minimum lease payments

COMMITMENTS AND CONTINGENCES

value of future minimum lease payments

COMMITMENTS AND CONTINGENCIES

are not involved in any litigation or other legal proceedings and management is not aware of any pending litigation or legal proceeding

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March 10, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic.

The virus and actions taken to mitigate

its spread have had and are expected to continue to have a broad adverse impact on the economies and financial markets of many

countries, including the geographical areas in which the Company operates and conducts its business and which the Company’s

partners operate and conduct their business.

We are currently following the recommendations of local health authorities to minimize

exposure risk for our team members and visitors.

However, the scale and scope of this pandemic is unknown and the duration of

the business disruption and related financial impact cannot be reasonably estimated at this time.

The virus and actions taken to mitigate its

spread have had and are expected to continue to have a broad adverse impact on the economies and financial markets of many countries,

including the geographical areas in which the Company operates and conducts its business, and which the Company’s partners operate

and conduct their business.

We are currently following the recommendations of local health authorities to minimize exposure risk for

our team members and visitors.

However, while the outlook is improving, and there has been a loosening of restrictions in many of the

areas in which we and our partners operate and conduct our business, the scale and scope of this pandemic is unknown, and the duration

of the business disruption and related financial impact cannot be reasonably estimated at this time.

While we have implemented specific

business continuity plans to reduce the potential impact of COVID-19, there is no guarantee that our continuity plans will be

have already experienced certain disruptions to our business such as temporary closure of our offices and similar disruptions

have occurred for our partners.

Specifically, the outbreak has caused temporary shutdowns of the laboratories and other service

providers that we rely on to develop our programs, and those laboratories and service providers that have been operating or that

have begun operating recently have been doing so with more limited capacity due to social distancing requirements.

our progress has been slowed and there is no assurance that we will be able to meet our previously announced timelines regarding

the advancement of our programs.

extent to which COVID-19 or any other health epidemic may impact our results will depend on future developments, which are highly

uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions

to contain COVID-19 or treat its impact, among others.

Accordingly, COVID-19 could have a material adverse effect on our business,

results of operations, financial condition and prospects.

business, continuity plans to reduce the potential impact of COVID-19, there is no guarantee that our continuity plans will be successful.

have experienced certain disruptions to our business such as temporary closure of our offices and similar disruptions have occurred for

our partners.

Specifically, the outbreak has caused temporary shutdowns of the laboratories and other service providers that we rely

on to develop our programs, and those laboratories and service providers that have been operating or that have begun operating recently

have been doing so with more limited capacity due to social distancing requirements.

As a result, our progress has been slowed and there

is no assurance that we will be able to meet our previously announced timelines regarding the advancement of our programs.

extent to which COVID-19 or any other health epidemic may impact our results will depend on future developments, which are highly uncertain

and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19

or treat its impact, among others.

Accordingly, COVID-19 could have a material adverse effect on our business, results of operations,

financial condition and prospects.

SEGMENT INFORMATION

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(“ASC 280”).

Reportable operating segments

are determined based on the management approach.

The management approach, as defined by ASC 280, is based on the way that the

chief operating decision-maker organizes the segments within an enterprise for making operating decisions and assessing performance.

While our results of operations are primarily reviewed on a consolidated basis, the chief operating decision-maker manages the

enterprise in five reportable segments, each with different operating and potential revenue generating characteristics:

Therapeutics, (ii) Cancer Vaccines, (iii) Anti-Viral Therapeutics, (iv) Cancer Diagnostics and (v) our legacy Patent Licensing

The following represents selected financial information for our segments for the three months ended January 31, 2021

and 2020 and as of January 31, 2021 and October 31, 2020:

For the Three Months Ended

Reportable operating segments are

determined based on the management approach.

The management approach, as defined by ASC 280, is based on the way that the chief operating

decision-maker organizes the segments within an enterprise for making operating decisions and assessing performance.

While our results

of operations are primarily reviewed on a consolidated basis, the chief operating decision-maker manages the enterprise in five reportable

segments, each with different operating and potential revenue generating characteristics:

(i) CAR-T Therapeutics, (ii) Cancer Vaccines,

(iii) Anti-Viral Therapeutics, (iv) Cancer Diagnostics and (v) Patent Licensing activities.

The following represents selected financial

information for our segments for the three and six months ended April 30, 2021 and 2020 and as of April 30, 2021 and October 31, 2020:

the Three Months Ended

the Six Months Ended

Net Income/(Loss):

CAR-T Therapeutics

$ (1,445,758 )

$ (2,406,494 )

$ (1,125,363 )

Cancer Vaccines

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Cancer Diagnostics

Patent Licensing

$ (2,436,889)

$ (2,657,990 )

$ (4,669,266 )

$ (5,274,565 )

Total operating costs and expenses

Less non-cash share-based compensation

Operating costs and expenses excluding non-cash share-based compensation

Operating costs and expenses excluding non-cash share based compensation expense:

Less non-cash share-based

(1,110,086 ))

costs and expenses

excluding non-cash share-based

Operating costs and expenses excluding

share based compensation:

CAR-T Therapeutics

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Cancer Diagnostics

Patent Licensing

Total assets:

3 unchanged sentences

Cancer Diagnostics

Patent Licensing

costs and expenses excluding non-cash share-based compensation is the measurement the chief operating decision-maker uses in managing

the enterprise.

Company’s consolidated revenue of $512,500 and inventor royalties, contingent legal fees, litigation and licensing expense

of $385,002 for the three months ended January 31, 2021 were solely related to our patent licensing segment which consists of

our encrypted audio/video conference calling technology.

All our revenue is generated domestically (United States) based on the

country in which the licensee is located.

costs and expenses excluding non-cash share-based compensation expense is the measurement the chief operating decision-maker uses in

managing the enterprise.

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

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.

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

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,”

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“will”

and similar expressions to identify forward-looking

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, 2020 and the condensed consolidated financial statements included in this Report.

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.

and similar expressions to identify forward-looking statements.

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, 2020 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.

discuss the description of our business in the Notes to our Condensed Consolidated Financial Statements.

OF OPERATIONS

months ended January 31, 2021 compared with three months ended January 31, 2020

the three months ended January 31, 2021, we recorded revenue of $512,500 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

months ended April 30, 2021 compared with three months ended April 30, 2020

the past several years, our revenue was derived from technology licensing and the sale of patented technologies, including revenue from

the settlement of litigation.

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

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.

had no revenue during the three-month periods ended April 30, 2021 and 2020.

Royalties, Contingent Legal Fees, Litigation and Licensing Expenses

had no inventor royalties, contingent legal fees, litigation and licensing expenses during the three-month periods ended April 30, 2021

and Development Expenses

and development expenses incurred in the three months ended April 30, 2021 associated with each of our development programs consisted

of approximately $548,000 for CAR-T therapeutics, approximately $336,000 for cancer vaccines, approximately $118,000 for anti-viral therapeutics

and $-0- for cancer diagnostic.

and development expenses are related to the development of our cancer therapeutics, vaccine and diagnostics programs and our anti-viral

drug program, and decreased by approximately $207,000 to approximately $1,022,000 in the three months ended April 30, 2021, from approximately

$1,229,000 in the three months ended April 30, 2020.

The decrease in research and development expenses was primarily due to a decrease

in outside research and development expense related to our cancer diagnostics program of approximately $305,000 and decreases in employee

compensation and related costs, other than stock option compensation expense, of approximately $124,000 and employee stock option compensation

expense of approximately $89,000, all due to the suspension of development of our cancer diagnostics program.

In addition, no license

payments related to our collaborative agreement with OntoChem concerning discovery and development of anti-viral drugs for COVID-19 were

required in the current period compared to approximately $111,000 in the prior year period.

These decreases in expenses were offset by

an increase in research and development expenses related to our other development programs of approximately $331,000 and an increase

in consultant stock option and warrant expense of approximately $78,000.

and Administrative Expenses

and administrative expenses decreased by approximately $26,000 to approximately $1,415,000 in the three months ended April 30, 2021,

from approximately $1,441,000 in the three months ended April 30, 2020.

The decrease in general and administrative expenses was primarily

due to a decrease in employee compensation and related costs, other than stock option expense, of approximately $100,000, a decrease

in consultant expense of approximately $78,000, a decrease in director compensation of approximately $38,000, offset by an increase in

patent expense of approximately $110,000, an increase in shareholder relations expense of approximately $54,000 and an increase in corporate

insurance expense of approximately $25,000.

income decreased by approximately $12,000 to less than $1,000 in the three months ended April 30, 2021, from approximately $12,000 in

the comparable prior year period as a result of a decrease in interest rates.

Loss Attributable to Noncontrolling Interest

net loss attributable to noncontrolling interest, representing Wistar’s 5% ownership interest in Certainty’s net loss, was

approximately $38,000 and $18,000, respectively, in the three months ended April 30, 2021 and 2020.

months ended April 30, 2021 compared with six months ended April 30, 2020

the six months ended April 30, 2021, we recorded revenue of approximately $513,000 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

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.

As discussed in Note 1 to our condensed consolidated financial statements, as part of our legacy operations,

the Company remains engaged in limited patent licensing activities which we do not expect to be a significant part of our ongoing

operations or revenue.

had no revenue during the three-month period ended January 31, 2020.

Accordingly, the performance

obligations from this license agreement were satisfied and 100% of the revenue was recognized upon execution of the license agreement.

As discussed in Note 1 to our condensed consolidated financial statements, as part of our legacy operations, the Company remains engaged

in limited patent licensing activities which we do not expect to be a significant part of our ongoing operations or revenue.

had no revenue during the six-month period ended April 30, 2020.

Royalties, Contingent Legal Fees, Litigation and Licensing Expenses

royalties, contingent legal fees, litigation and licensing expenses increased to approximately $385,000 in the three months ended

January 31, 2021 from $-0- in the three months ended January 31, 2020.

The increase was primarily due to the increase in related

Inventor royalties and contingent legal fees are expensed in the period that the related revenues are recognized.

and licensing expenses related to patent assertion, other than contingent legal fees, are expensed in the period incurred.

royalties, contingent legal fees, litigation and licensing expenses increased to approximately $385,000 in the six months ended April

30, 2021 from $-0- in the six months ended April 30, 2020.

The increase was primarily due to the increase in related revenues.

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.

and Development Expenses

and development expenses incurred in the six months ended April 30, 2021 associated with each of our development programs consisted of

approximately $910,000 for CAR-T therapeutics, approximately $630,000 for cancer vaccines, approximately $288,000 for anti-viral therapeutics

and approximately $2,000 for cancer diagnostic.

and development expenses are related to the development of our cancer therapeutics, vaccine and diagnostics programs and our anti-viral

drug program, and decreased by approximately $663,000 to approximately $828,000 in the three months ended January 31, 2021, from

approximately $1,491,000 in the three months ended January 31, 2020.

The decrease in research and development expenses was primarily

due to a decrease in outside research and development expense, excluding license expense, of approximately $414,000, a decrease

in employee compensation and related costs, other than stock option compensation expense, of approximately $269,000 and a decrease

in employee stock option compensation expense of approximately $105,000, all due to the suspension of development of our cancer

diagnostics program, offset by an increase in license fees of approximately $155,000 primarily related to development of our cancer

vaccine technologies.

and development expenses incurred in the three months ended January 31, 2021 associated with each of our development programs

consisted of approximately $363,000 for CAR-T therapeutics, approximately $294,000 for cancer vaccines, approximately $169,000

for anti-viral therapeutics and approximately $2,000 for cancer diagnostics.

drug program, and decreased by approximately $869,000 to approximately $1,850,000 in the six months ended April 30, 2021, from approximately

$2,719,000 in the six months ended April 30, 2020.

The decrease in research and development expenses was primarily due to a decrease

in outside research and development expense related to our cancer diagnostics program of approximately $816,000 and decreases in employee

compensation and related costs, other than stock option compensation expense, of approximately $394,000 and employee stock option compensation

expense of approximately $194,000, all due to the suspension of development of our cancer diagnostics program.

These expense reductions

were offset by an increase in research and development expenses related to our other development programs of approximately $428,000 and

an increase in consultant expense of approximately $51,000.

and Administrative Expenses

and administrative expenses increased by approximately $394,000 to approximately $1,533,000 in the three months ended January

31, 2021, from approximately $1,139,000 in the three months ended January 31, 2020.

The increase in general and administrative

expenses was primarily due to non-recurring income in the prior year period resulting from the discharge in January 2020 of a

disputed liability of approximately $337,000 upon the expiration of the vendor’s statutory right to pursue collection of

the disputed liability, an increase in directors compensation of approximately $81,000, an increase in patent expense of approximately

$76,000 and an increase in consultant stock option and warrant expense of approximately $56,000, offset by a decrease in employee

compensation and related costs, other than stock option compensation expense, of approximately $148,000.

income decreased by approximately $12,000 to approximately $1,000 in the three months ended January 31, 2021, from approximately

and administrative expenses increased by approximately $367,000 to approximately $2,948,000 in the six months ended April 30, 2021, from

approximately $2,581,000 in the six months ended April 30, 2020.

The increase in general and administrative expenses was primarily due

to non-recurring income in the prior year period resulting from the discharge in January 2020 of a disputed liability of approximately

$337,000 upon the expiration of the vendor’s statutory right to pursue collection of the disputed liability, an increase in patent

expense of approximately $186,000, an increase in corporate insurance expense of approximately $47,000, an increase in directors compensation

of approximately $43,000, offset by a decrease in employee compensation and related costs, other than stock option compensation expense,

of approximately $248,000.

income decreased by approximately $24,000 to approximately $1,000 in the six months ended April 30, 2021, from approximately $25,000

in the comparable prior year period as a result of a decrease in interest rates.

Loss Attributable to Noncontrolling Interest

net loss attributable to noncontrolling interest, representing Wistar’s 5% ownership interest in Certainty’s net loss,

was approximately $24,000 and $24,000, respectively, in the three months ended January 31, 2021 and 2020.

net loss attributable to noncontrolling interest, representing Wistar’s 5% ownership interest in Certainty’s net loss, was

approximately $62,000 and $42,000, respectively, in the six months ended April 30, 2021 and 2020.

AND CAPITAL RESOURCES

primary sources of liquidity are cash, cash equivalents and short-term investments.

on currently available information as of March 11, 2021, we believe that our existing cash, cash equivalents, short-term investments

and expected cash flows will be sufficient to fund our activities for the next twelve months.

on currently available information as of June 10, 2021, 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 three months ended January 31, 2021, we raised approximately $5,957,000,

net of expenses, through an at-the-market equity offering of 1,900,547 shares of common stock, under which offering we may issue

up to $50 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 January 31, 2021, we may sell an additional approximately $34,670,000 of common stock.

seek to obtain working capital during our fiscal year 2021 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 could 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

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, 2021, we raised approximately $20,292,000, net of expenses, through a public

offering in which we sold an aggregate of 4,285,715 shares of common stock and approximately $10,834,000, net of expenses, through our

at-the-market equity program in which we sold an aggregate of 2,806,410 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 April 30, 2021, we may sell an additional approximately

$29.6 million of common stock.

We may seek to obtain working capital during our fiscal year 2021 or thereafter through sales of our equity

securities or through bank credit facilities or public or private debt from various financial institutions where possible.

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.

the three months ended January 31, 2021, cash used in operating activities was approximately $1,170,000.

Cash provided by investing

activities was approximately $675,000, resulting from the proceeds on maturities of certificates of deposit totaling $1,640,000

and the proceeds from the sale of equipment of approximately $35,000, which was offset by the purchases of certificates of deposit

of approximately $1,000,000.

Cash provided by financing activities was approximately $6,061,000, resulting from the sale of 1,900,547

shares of common stock in an at-the-market equity offering of approximately $5,957,000 and the proceeds from exercise of stock

options of approximately $104,000.

As a result, our cash, cash equivalents, and short-term investments at January 31, 2021 increased

approximately $4,926,000 to approximately $13,983,000 from approximately $9,057,000 at the end of fiscal year 2020.

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.

the six months ended April 30, 2021, cash used in operating activities was approximately $2,412,000.

Cash used in investing activities

was approximately $7,724,000, resulting from the purchase of short-term investments of approximately $10,399,000, which was offset by

the proceeds on maturities of short-term investments of approximately $2,640,000 and the proceeds from the sale of equipment of approximately

Cash provided by financing activities was approximately $31,422,000, resulting from net proceeds of approximately $20,292,000

from a public offering of 4,285,715 shares of common stock, the sale of 2,806,410 shares of common stock in an at-the-market equity offering

of approximately $10,834,000, proceeds from exercise of stock options of approximately $294,000 and proceeds from the sale of common

stock pursuant to employee stock purchase plan of approximately $3,000.

As a result, our cash, cash equivalents, and short-term investments

at April 30, 2021 increased approximately $29,046,000 to approximately $38,103,000 from approximately $9,057,000 at the end of fiscal

ACCOUNTING POLICIES

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in the United States of America.

In preparing these financial statements, we make assumptions, judgments and estimates that can

have a significant impact on amounts reported in our condensed consolidated financial statements.

We base our assumptions, judgments

and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances.

results could differ materially from these estimates under different assumptions or conditions.

On a regular basis, we evaluate

our assumptions, judgments and estimates and make changes accordingly.

believe that, of the significant accounting policies discussed in Note 2 to our consolidated financial statements in our Annual

Report on Form 10-K for the fiscal year ended October 31, 2020, the following accounting policies require our most difficult,

subjective or complex judgments:

In preparing these financial statements, we make assumptions, judgments and estimates that can have

a significant impact on amounts reported in our condensed consolidated financial statements.

We base our assumptions, judgments and estimates

on historical experience and various other factors that we believe to be reasonable under the circumstances.

Actual results could differ

materially from these estimates under different assumptions or conditions.

On a regular basis, we evaluate our assumptions, judgments

and estimates and make changes accordingly.

believe that, of the significant accounting policies discussed in Note 2 to our consolidated financial statements in our Annual Report

on Form 10-K for the fiscal year ended October 31, 2020, the following accounting policies require our most difficult, subjective or

complex judgments: