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Item 1. Financial Statements

2022-03-11 compared with 2021-09-01 · 481 added, 665 removed, 244 unchanged (82% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

and cash equivalents

expenses and other current assets

thousands, except share and per share data)

Current assets:

lease right-of-use asset

Cash and cash

Short-term investments

expenses and other current assets

Total current assets

Operating lease right-of-use

LIABILITIES AND

Current liabilities:

Accounts payable

Accrued expenses

lease liability

current liabilities

and contingencies (Note 10)

Shareholders’

stock, par value $ 100 per share;

Operating lease liability,

Commitments and contingencies (Note 9)

Shareholders’ equity:

Preferred stock, par value $ 100 per share;

19,860 shares authorized;

no shares issued or outstanding

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

stock, par value $ .01 per share;

Preferred stock

Common stock, par value $ .01 per share;

shares authorized;

29,949,905 and 24,248,695 shares issued and outstanding, respectively

paid-in capital

( 200,776,749 )

( 191,835,618 )

shareholders’ equity

30,132,319 and 30,050,894 shares issued and outstanding as of January 31, 2022 and October 31, 2021, respectively

Additional paid-in capital

Total shareholders’

Noncontrolling

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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

For the Three Months Ended

For the Nine Months Ended

thousands, except per share data)

the Three Months Ended January 31,

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 $ 1,687,754 ,

and $ 1,250,497 ,

respectively)

General and administrative expenses (including non-cash share-based compensation

expenses of $ 1,499,572 ,

and $ 1,922,722 ,

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 $ 1,276 and $ 290 , respectively)

and administrative expenses (including non-cash share-based compensation expenses of $ 1,078 and $ 696 , respectively)

operating costs and expenses

Loss from operations

( 4,388,236 )

( 2,435,969 )

( 9,058,649 )

( 7,735,975 )

Other expense

Interest income

( 4,387,610 )

( 2,576,787 )

( 9,056,876 )

( 7,851,352 )

Net loss attributable to noncontrolling interest

Net loss attributable to common shareholders

$ ( 4,333,989 )

$ ( 2,561,684 )

$ ( 8,941,131 )

$ ( 7,794,320 )

Net loss per common share attributable to common shareholders:

Weighted average common shares outstanding:

Net loss attributable

to noncontrolling interest

Net loss attributable

to common shareholders

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.

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED )

THE THREE MONTHS ENDED JULY 31, 2021

Paid-in Capital

Accumulated Deficit

Shareholders’ Equity

controlling Interest

Paid-in Capital

Accumulated Deficit

Shareholders’ Equity

controlling Interest

Balance, April 30, 2021

$ 233,742,019

$ ( 196,442,760 )

$ ( 559,107 )

Stock option compensation to employees and directors

Stock options issued to consultants

Common stock issued upon exercise of stock options

Common stock issued upon exercise of stock options, shares

Common stock issued in at-the-market offering, net of offering expenses

Common stock issued in at-the-market offering, net of offering expenses, shares

Common stock issued pursuant to employee stock purchase plan

Common stock issued pursuant to employee stock purchase plan, shares

Common stock issued in a public offering, net of offering expenses

Common stock issued in a public offering, net of offering expenses, shares

Expired restricted stock award to employee

( 1,500,000 )

Stock options and warrants issued to consultants

( 4,333,989 )

( 4,387,610 )

Balance, July 31, 2021

$ 236,944,345

$ ( 200,776,749 )

$ ( 612,728 )

THE THREE MONTHS ENDED July 31, 2020

Paid-in Capital

Accumulated Deficit

Shareholders’ Equity

controlling Interest

Balance, April 30, 2020

$ 192,122,260

$ ( 187,049,899 )

$ ( 464,904 )

Stock option compensation to employees and directors

Stock options issued to consultants

Common stock issued upon exercise of stock options

Common stock issued in at-the-market offering, net of offering expenses of $ 155,776

( 2,561,684 )

( 2,576,787 )

Balance, July 31, 2020

$ 197,993,060

$ ( 189,611,583 )

$ ( 480,007 )

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

BIOSCIENCES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED )

THE NINE MONTHS ENDED JULY 31, 2021

Paid-in Capital

Accumulated Deficit

Shareholders’ Equity

controlling Interest

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

THE THREE MONTHS ENDED JANUARY 31, 2022 (UNAUDITED )

Shareholders’

Balance, October 31, 2021

$ ( 204,790 )

$ ( 191,835,618 )

$ ( 496,983 )

Stock option compensation to employees and directors

Expired restricted stock award to employee

( 1,500,000 )

Stock option compensation to employees and

Stock options and warrants issued to consultants

Common stock issued upon exercise of stock options

Common stock issued pursuant to employee stock purchase plan

Common stock issued in a public offering, net of

offering expenses of $ 2,208,150

Common stock issued in at-the-market offering, net of offering expenses of $ 340,775

( 8,941,131 )

( 9,056,876 )

Balance, July 31, 2021

$ 236,944,345

$ ( 200,776,749 )

Common stock issued upon exercise of stock

options and warrants

Common stock issued upon exercise of stock

options, shares

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

stock issued in at-the-market offering, net of offering expenses , shares

Balance, January 31, 2022

$ ( 208,619 )

THE NINE MONTHS ENDED JULY 31, 2020

Paid-in Capital

Accumulated Deficit

Shareholders’ Equity

controlling Interest

THE THREE MONTHS ENDED JANUARY 31, 2021 (UNAUDITED )

Shareholders’

Balance, October 31, 2020

$ ( 191,836 )

$ ( 181,817,263 )

$ ( 422,975 )

Stock option compensation to employees and directors

Stock options issued to consultants

Common stock issued upon exercise of stock options

Common stock issued pursuant to employee stock purchase plan

Common stock issued in at-the-market offering, net of offering expenses of $ 314,072

Common stock issued in at-the-market offering, net of offering expenses

( 7,794,320 )

( 7,851,352 )

Balance, July 31, 2020

$ 197,993,060

$ ( 189,611,583 )

Stock option compensation to employees and

Stock options and warrants issued to consultants

Common stock issued upon exercise of stock

Common stock issued in at-the-market offering,

net of offering expenses of $ 185

Balance, January 31, 2021

$ ( 194,044 )

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the nine months ended July 31,

the three months ended January 31,

Cash flows from operating activities:

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

$ ( 9,056,876 )

$ ( 7,851,352 )

Stock option compensation to employees and directors

Stock options and warrants issued to consultants

Depreciation of property and equipment

Loss on disposal of property and equipment

Gain on sale of equipment

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

( 3,892,707 )

( 4,761,589 )

Reconciliation

of net loss to net cash used in operating activities:

option compensation to employees and directors

options and warrants issued to consultants

on sale of equipment

of operating lease right-to-use asset

in operating assets and liabilities:

expenses and other current assets

lease liability

cash used in operating activities

Cash flows from investing activities:

Disbursements to acquire short-term investments

( 10,399,784 )

( 5,510,000 )

Proceeds from maturities of short-term investments

Purchase of property and equipment

Proceeds from sale of equipment

Net cash used in investing activities

( 6,724,337 )

Disbursements

to acquire short-term investments

from maturities of short-term investments

from sale of equipment

cash provided by investing activities

Cash flows from financing activities:

Gross proceeds from sale of common stock in a public offering

Expenses of the public offering

( 2,208,150 )

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

Expenses of the at-the-market offering

Proceeds from sale of common stock pursuant to employee stock purchase plan

Proceeds from exercise of stock options

Net cash provided by financing activities

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

from exercise of stock options

cash provided by financing activities

Net increase 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

Supplemental disclosure of non-cash financing activity:

Fair value of warrants issued in connection with the public offering

Cash and cash equivalents

at beginning of period

Cash and cash equivalents

at end of period

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

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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.

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.

Our therapeutics programs include (i) the development of a chimeric endocrine receptor

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

cancer, which is being developed at our subsidiary, Certainty Therapeutics, Inc.

(“Certainty”), and (ii) the discovery and

ultimately development of anti-viral drug candidates for the treatment of COVID-19 focused on inhibiting certain protein functions of

Our vaccine programs include (i) the development of a preventative vaccine against triple negative breast cancer (“TNBC”),

the most lethal form of breast cancer, as well other forms of breast cancer and (ii) a preventative vaccine against ovarian cancer.

subsidiary, Certainty, is developing immuno-therapy drugs against cancer.

Certainty holds an exclusive worldwide, royalty-bearing license

to use certain intellectual property owned or controlled by The Wistar Institute (“Wistar”), the nation’s first independent

biomedical research institute and a leading National Cancer Institute designated cancer research center, relating to Wistar’s chimeric

endocrine receptor targeted therapy technology.

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

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

The license agreement requires

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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

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

of the common stock of Certainty.

in collaboration with the H.

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(“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

Through an iterative process with the FDA, we responded to their information requests and in August 2021, we received authorization

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

We are performing the activities necessary

to prepare for treatment of patients in the Phase 1 clinical trial, and we anticipate treating the first enrolled patient in early 2022.

clinical testing of the CAR-T technology licensed by Certainty from Wistar aimed initially at treating ovarian cancer.

We submitted an

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

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

in August 2021, we received authorization from the FDA to commence enrollment and treatment of patients in a Phase 1 clinical trial.

We are performing the activities necessary to prepare for treatment of patients in the Phase 1 clinical trial, and we anticipate initiating

the trial in the first calendar quarter of 2022.

This study is a dose-escalation trial with two arms based on injection method—intraperitoneal

or intravenous—to determine the maximum tolerated dose in patients with recurrent epithelial ovarian cancer and to assess persistence,

expansion and efficacy of the modified T-cells.

The study is being conducted at Moffitt and will consist of 24 to 48 patients who have

received at least two prior lines of chemotherapy.

The study is estimated to be completed in two to four years depending on multiple

factors including when maximum tolerated dose is reached and the rate of patient recruitment.

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

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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 tested them in animal models.

In these animal studies, the two compounds were compared

to Remdesivir, which is the only anti-viral drug authorized 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 proceeded to the next

stage of drug development and selected one of the compounds around which we are currently performing combinatorial synthetic medicinal

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

In addition, we have added chemical structures

which we feel, based on our data and recently published data, could be potent anti-virals.

including the virus’ main protease, M pro .

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 tested them in animal

In these animal studies, the two compounds were compared to Remdesivir, which at the time the assays were performed was the only

anti-viral drug authorized by the FDA for the treatment of 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

between each of our compounds and Remdesivir.

Based on this promising data in the animal study, we directed our team to proceed to the

next stage of drug development and we selected one of the compounds around which our team is performing combinatorial synthetic medicinal

chemistry to evaluate whether potency can be increased and pharmacokinetics optimized.

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.

August 2021, in an attempt to evaluate whether our compounds might be effective against the Delta variant of SARS-CoV-2, we undertook

an analysis of certain enzyme mutations in the Delta variant.

We note that the Delta variant is characterized by mutations in the

spike protein of the virus.

Corresponding to the mutations in the spike protein, we found some of the Delta variants exhibited a mutation

in the enzyme that is our target.

Sequence analysis of several Delta variant samples demonstrated that the resultant enzyme mutation

indicates that our novel compounds could be stronger inhibitors of the Delta variant that the original version of the virus.

As a result of

the MolGenie spin-out, there was no change in the personnel working on our project, and the assignment caused no interruptions to the

program’s development.

use of preventative vaccines is widespread throughout much of the developed world, we believe that there is and will continue to be a

need for effective treatments for COVID-19.

We believe that there are a number of factors that have limited the effectiveness, both in

the near and long term, of the vaccines currently in use, including, but not limited to, vaccine persistence, viral escape and perceptions

of long-term safety resulting in vaccine resistance.

Furthermore, there are currently two new anti-viral treatments, Pfizer’s Paxlovid,

which is a combination therapy consisting of the protease-inhibitor nirmatrelvir and the antiretroviral ritonavir and Merck’s polymerase-inhibitor

molnupiravir, that have recently been authorized for emergency use in the U.S.

These treatments use oral formulations, while all other

currently authorized or approved treatments require intravenous administration.

As the main component of Pfizer’s treatment is

a protease-inhibitor targeting M pro , it is most similar to our compounds, and we therefore conducted a head-to-head analysis

via a Fluorescence Resonance Energy Transfer (FRET) assay that tested the ability of the compounds to inhibit the function of M pro .

The results of this head-to-head in vitro analysis suggest that our compounds may be five times more effective at inhibiting M pro

than Pfizer’s nirmatrelvir.

Whereas we believe Pfizer’s Paxlovid is a repurposed drug based on research done

on other viruses and not designed specifically for SARS-CoV-2, our compounds were designed specifically against the main protease

of SARS-CoV-2 and at the current time we do not anticipate the need for a combination therapy.

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

this technology, we are working in collaboration with Cleveland Clinic to develop a method to vaccinate women against contracting breast

cancer, focused specifically on TNBC.

The focus of this vaccine is a specific protein, α-lactalbumin, that is only expressed during

lactation in a healthy mother’s mammary tissue.

This protein disappears when the mother is no longer lactating, 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 treating the first enrolled patient in September

submission of an IND application with the FDA in November 2020, and the FDA’s subsequent authorization to proceed with clinical

trials in December 2020, in October 2021, we commenced dosing patients in a Phase 1 clinical trial of our breast cancer vaccine.

Department of Defense grant, this study is a multiple-ascending dose Phase 1 trial to determine the maximum tolerated dose

of the vaccine in patients with early-stage, triple-negative breast cancer as well as monitor immune response.

The study is being conducted

at Cleveland Clinic and will consist of 18 to 24 patients who have completed treatment for early-stage, triple-negative breast cancer

within the past three years and are currently tumor-free but at high risk for recurrence.

During the course of the study, participants

will receive three vaccinations, each two weeks apart, and will be closely monitored for side effects and immune response.

is estimated to be completed in the third calendar quarter of 2022.

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

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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.

This technology pertains to among other things, the use of vaccines for the treatment or prevention of ovarian cancers

which express the anti-Mullerian hormone receptor 2 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.

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 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”)

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nor the transfer of any rights to the Company’s assets.

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, if any, was derived from technology licensing and the sale of patented technologies, including revenue

from the settlement of litigation.

the next several quarters, we expect the development of our breast and ovarian cancer vaccines, our COVID-19 therapeutic discovery 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 its liquid biopsy platform, 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

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.

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and Management’s Plans

on currently available information as of September 1, 2021, we believe that our existing cash, cash equivalents, short-term investments

on currently available information as of March 11, 2022, 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.

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to obtain more working capital.

During the nine months ended July 31, 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.

Our at-the-market equity program

was terminated on June 16, 2021.

We may seek to obtain working capital during our fiscal year 2022 or thereafter through sales of our

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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 July 31, 2021, and results of operations and cash flows for the interim periods represented.

position as of January 31, 2022, and results of operations and cash flows for the interim periods represented.

The results of operations

for the nine months ended July 31, 2021 are not necessarily indicative of the results to be expected for the entire year.

for the three months ended January 31, 2022 are not necessarily indicative of the results to be expected for the entire year.

Noncontrolling

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The following table sets

forth the changes in noncontrolling interest for the nine months ended July 31, 2021:

OF CHANGES IN NONCONTROLLING INTEREST

forth the changes in noncontrolling interest for the three months ended January 31, 2022 (in thousands):

OF NONCONTROLLING INTEREST AS A COMPONENT OF EQUITY

Balance, October 31, 2021

$ ( 496,983 )

Net loss attributable to noncontrolling interest

Balance, July 31, 2021

$ ( 612,728 )

Net loss attributable

to noncontrolling interest

Balance, January 31, 2022

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

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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.

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 recognition policy requires us to make certain judgments and estimates in connection with the accounting for revenue.

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

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

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Accordingly, the performance obligations from

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

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

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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.

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.

and other direct costs associated with developing immuno-therapy drugs against cancer, developing anti-viral drug candidates for COVID-19,

developing our breast cancer vaccine, and developing our ovarian cancer vaccine, are expensed in the consolidated financial statements

in the period incurred.

BASED COMPENSATION

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We recorded stock-based compensation expense related to service-based

stock options granted to employees and directors of approximately $ 1,066,000 and $ 997,000 during the three months ended July 31, 2021

and 2020, respectively, and approximately $ 2,822,000 and $ 3,016,000 during the nine months ended July 31, 2021 and 2020, respectively.

stock options granted to employees and directors of approximately $ 730,000 and $ 875,000 during the three months ended January 31, 2022

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.

The remaining tranches did not vest as of May 31, 2021 and expired.

June 1, 2021, 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 of common stock, respectively, that vest

in four equal installments upon the Company’s share price achieving targets ranging from $ 5.00

per share, with implied service periods of three

to fifteen months.

The assumptions used in the Monte Carlo Simulation for the June 1, 2021 grants were stock price on date of grant of

contract term of 10

years, expected volatility of 75 %

and risk-free interest rate of 1.62 %.

We recorded stock-based compensation expense related to market condition stock options of approximately $ 1,981,000

for both the three and nine month periods

ended July 31, 2021.

We did not record any market condition stock-based compensation expense for these grants during the three and nine

month periods ended July 31, 2020.

As of July 31, 2021, the unrecognized compensation cost related to market condition stock options

was approximately $ 4,528,000

which will be recognized over future periods

through the fourth quarter of fiscal 2022.

On June 1, 2021, our Chairman, President and Chief Executive

Officer and our Chief Operating Officer and Chief Financial Officer were awarded market condition stock options for 2,000,000 shares

and 100,000 shares of common stock, respectively, that vest in four equal installments upon the Company’s share price achieving

targets ranging from $ 5.00 to $ 8.00 per share, with implied service periods of three to fifteen months.

We recorded market condition

stock-based compensation expense during the three months ended January 31, 2022 and 2021 of approximately $ 1,405,000 and $ 0 , respectively.

compensation cost for service-based stock options granted to consultants is measured at the grant date, based on the fair value of the

2 unchanged sentences

We recorded stock-based consulting expense related to stock options granted

to consultants of approximately $ 139,000 and $ 45,000 during the three months ended July 31, 2021 and 2020, respectively, and approximately

$ 326,000 and $ 157,000 during the nine months ended July 31, 2021 and 2020, respectively.

the nine months ended July 31, 2021, we had two stock option plans:

to consultants of approximately $ 109,000 and $ 54,000 during the three months ended January 31, 2022 and 2021, respectively.

the three months ended January 31, 2022, we had two stock option plans:

the Anixa Biosciences, Inc.

5 unchanged sentences

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 nine months ended July 31, 2020.

Option Activity

the three months ended July 31, 2021 and 2020, we granted options to purchase 2,990,000 shares and - 0 - shares of common stock, respectively,

and during the nine months ended July 31, 2021 and 2020, we granted options to purchase 4,370,000 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 July 31, 2021 and 2020, stock options to purchase - 0 - shares and 7,200 shares of common stock, respectively,

were exercised with aggregate proceeds of approximately $- 0 - and $ 19,000 , respectively.

During the nine months ended July 31, 2021 and

2020, stock options to purchase 107,451 shares, net of 7,937 shares withheld on a cashless exercise, and 51,100 shares of common stock,

respectively, were exercised with aggregate proceeds of approximately $ 294,000 and $ 122,000 , 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 Share Plan, the plan terminated with

respect to the ability to grant future awards on April 21, 2013.

regarding the 2003 Plan for the nine months ended July 31, 2020 is as follows:

SCHEDULE OF OPTION ACTIVITY

Average Exercise

Price Per Share

Options outstanding at October 31, 2019

Forfeited/Expired

Options outstanding and exercisable at

July 31, 2020

Options outstanding at July 31, 2020

Options exercisable at July 31, 2020

the three months ended January 31, 2022 and 2021, we granted options to purchase 30,000 shares and 1,130,000 shares of common stock,

respectively, to employees and consultants, with exercise prices ranging from $ 2.83 to $ 3.24 per share, pursuant to the 2018 Share Plan.

During the three months ended January 31, 2022 and 2021, stock options to purchase 100,000 shares of common stock, net of 53,091 shares

withheld on a cashless exercise, and 29,880 shares of common stock, respectively, were exercised with aggregate proceeds of $ 0 and approximately

$ 104,000 , respectively.

2010 Share Plan provided for the grant of nonqualified stock options, stock appreciation rights, stock awards, performance awards and

2 unchanged sentences

respect to the ability to grant future awards on July 14, 2020.

regarding the 2010 Share Plan for the nine months ended July 31, 2021 is as follows:

Information regarding the 2010 Share Plan for the three months ended

January 31, 2022 is as follows:

SCHEDULE OF OPTION ACTIVITY

1 unchanged sentence

Price Per Share

Intrinsic Value

(in thousands)

Options outstanding at October 31, 2021

Forfeited/Expired

Options outstanding and exercisable at July 31, 2021

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

Options outstanding

and exercisable at

January 31, 2022

following table summarizes information about stock options outstanding and exercisable under the 2010 Share Plan as of January 31, 2022:

SCHEDULE OF OUTSTANDING AND EXERCISABLE

Exercise Prices

Weighted Average

Outstanding and

Contractual Life

Exercise Price

$ .67 - $ 2.30

regarding the 2010 Share Plan for the nine months ended July 31, 2020 is as follows:

Weighted Average Exercise Price Per Share

Options outstanding at October 31, 2019

Forfeited/Expired

Options outstanding at July 31, 2020

Options exercisable at July 31, 2020

The following table summarizes

information about stock options outstanding and exercisable under the 2010 Share Plan as of July 31, 2020:

regarding the 2010 Share Plan for the three months ended January 31, 2021 is as follows:

Average Exercise

Price Per Share

Intrinsic Value

(in thousands)

Options Outstanding

Options Exercisable

Range of Exercise Prices

Number Outstanding

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price

Number Exercisable

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price

0.67 - $ 2.30

2.58 - $ 3.13

3.46 - $ 5.75

2018 Share Plan

The 2018 Share Plan provides

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

stock units to employees, directors and consultants.

As of July 31, 2021, the 2018 Share Plan had 1,257,937

at October 31, 2020

Forfeited/Expired

Outstanding at January 31, 2021

Exercisable at January 31, 2021

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

Exercise Prices

Contractual Life

Exercise Price

Contractual Life

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, 2022, the 2018 Share Plan had 2,000,000

shares available for future grants.

Information regarding the 2018

Share Plan for the nine months ended July 31, 2021 is as follows:

Information regarding the 2018 Share Plan for the three months ended January 31, 2022 is as follows:

SCHEDULE OF OPTION ACTIVITY

1 unchanged sentence

Price Per Share

Aggregate Intrinsic Value

Options outstanding at October 31, 2020

Forfeited/Expired

Options outstanding at July 31, 2021

Options exercisable at July 31, 2021

The following table summarizes

information about stock options outstanding and exercisable under the 2018 Share Plan as of July 31, 2021:

SCHEDULE OF OUTSTANDING AND EXERCISABLE

(in thousands)

Options outstanding

Options Exercisable

Range of Exercise Prices

Number Outstanding

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price

Number Exercisable

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price

2.09 - $ 3.70

3.84 - $ 5.30

Information regarding the 2018

Share Plan for the nine months ended July, 2020 is as follows:

SCHEDULE OF OPTION ACTIVITY

at October 31, 2021

outstanding at January 31, 2022

exercisable at January 31, 2022

following table summarizes information about stock options outstanding and exercisable under the 2018 Share Plan as of January 31, 2022:

SCHEDULE OF OUTSTANDING AND EXERCISABLE

Exercise Prices

Contractual Life

Exercise Price

Contractual Life

regarding the 2018 Share Plan for the three months ended January 31, 2021 is as follows:

Average Exercise

Price Per Share

Aggregate Intrinsic Value

Options outstanding at October 31, 2019

Forfeited/Expired

Options outstanding at July 31, 2020

Options exercisable at July 31, 2020

The following table summarizes

information about stock options outstanding and exercisable under the 2018 Share Plan as of July 31, 2020:

(in thousands)

Options outstanding

Options Exercisable

Range of Exercise Prices

Number Outstanding

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price

Number Exercisable

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price

3.84 - $ 4.61

Non-Plan Options

In addition to options granted

under stock option plans, during the years ended October 31, 2012 and 2013, the Board of Directors approved the grant of stock options

to certain employees and directors (the “Non-Plan Options”).

Information regarding Non-Plan

Options for the nine months ended July 31, 2021 is as follows:

OF OPTION ACTIVITY

Average Exercise

at October 31, 2020

Forfeited/Expired

outstanding at January 31, 2021

exercisable at January 31, 2021

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

Exercise Prices

Contractual Life

Exercise Price

Contractual Life

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, 2022 is as follows:

SCHEDULE OF OPTION ACTIVITY

Price Per Share

(in thousands)

Options outstanding at October

Options outstanding and exercisable at

July 31, 2021

The following table summarizes

information about Non-Plan Options outstanding and exercisable as of July 31, 2021:

OF OUTSTANDING AND EXERCISABLE

Exercise Prices

Weighted Average Remaining Contractual Life

Options outstanding

and exercisable at

January 31, 2022

following table summarizes information about stock options outstanding and exercisable that were granted outside of share plans as of

January 31, 2022:

SCHEDULE OF OUTSTANDING AND EXERCISABLE

Average Remaining

Contractual Life

Exercise Price

Information regarding Non-Plan

Options for the nine months ended July 31, 2020 is as follows:

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

Aggregate Intrinsic Value

(in thousands)

Options outstanding at October

Options outstanding and exercisable at

July 31, 2020

The following table summarizes

information about Non-Plan Options outstanding and exercisable as of July 31, 2020:

Options 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:

Exercise Prices

Weighted Average

Contractual Life

Exercise Price

On May 8, 2018, a restricted

stock award of 1,500,000 shares of common stock was granted under the 2018 Share Plan to our Chairman, President and Chief Executive Officer.

The restricted stock award 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 and expired.

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 nine months ended July 31, 2021 and 2020.

Employee Stock Purchase Plan

The Company maintains the Anixa

Biosciences, Inc.

Employee Stock Purchase Plan 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 nine

months ended July 31, 2021 and 2020, employees purchased 1,634 and 9,618 shares, respectively, with aggregate proceeds of approximately

$ 3,000 and $ 15,000 , respectively.

On October 30, 2020 we issued

a warrant, expiring on October

30, 2025 , to purchase 60,000

shares of common stock at $ 2.06

per share, vesting over five

months, to a consultant for investor relations services.

We recorded consulting expense of approximately $ -0-

and $ 96,000 ,

respectively, during the three and nine months ended July 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.

record any consulting expense related to warrants during the three and nine months ended July 31, 2020.

As 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 nine month period ended July

As of July 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 .

FAIR VALUE MEASUREMENTS

US GAAP defines fair value and

establishes a framework for measuring fair value.

We have categorized our financial assets and liabilities, based on the priority of the

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

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.

Financial assets and liabilities

recorded in the accompanying condensed consolidated balance sheets are categorized based on the inputs to the valuation techniques as

Level 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.

Level 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.

Level 3 – 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.

The following table presents

the hierarchy for our financial assets measured at fair value on a recurring basis as of July 31, 2021:

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, 2022 or 2021.

Stock Purchase Plan

Company maintains the Anixa Biosciences, Inc.

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

to purchase shares at not less than 85 % of the market value of the Company’s common stock on the offering date or the purchase

date of the applicable offering period, whichever is lower.

The 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, 2022 and 2021, no shares were purchased under the

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.

On November 16, 2021, the warrant was exercised on a cashless basis and 25,484 shares were withheld as payment.

November 1, 2021 we issued a warrant, expiring on October 30, 2026 , to purchase 60,000 shares of common stock at $ 4.77 per share, vesting

over five months , to a consultant for investor relations services.

We recorded consulting expense of approximately $ 110,000 during the

three months ended January 31, 2022, based on the fair value of the warrant on the date of grant recognized on a straight-line basis

over the vesting period.

of January 31, 2022, we also had warrants outstanding to purchase 300,000 shares of common stock at $ 6.56 per share, issued during fiscal

year 2021 and expiring on March 22, 2026 .

VALUE MEASUREMENTS

GAAP defines fair value and establishes a framework for measuring fair value.

We have categorized our financial assets and liabilities,

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

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.

3 – 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, 2022:

OF FAIR VALUE MEASUREMENTS

(in thousands)

Money market funds:

Cash and cash equivalents

Cash and cash

Certificates of deposit:

1 unchanged sentence

Short-term investments

Treasury bills and bonds:

Short-term investments

treasury bills

Total financial assets

The following table presents

the hierarchy for our financial assets measured at fair value on a recurring basis as of October 31, 2020:

following table presents the hierarchy for our financial assets measured at fair value on a recurring basis as of October 31, 2021:

(in thousands)

Money market funds:

Cash and cash equivalents

Cash and cash

Certificates of deposit:

Cash and cash equivalents

Short term investments

treasury bills

Total financial assets

Our non-financial assets that

are measured on a non-recurring basis include our other assets which are measured using fair value techniques 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.

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

ACCRUED EXPENSES

Accrued expenses consist of the

following as of:

estimated fair value of prepaid expenses and other current assets and accounts payable approximates their individual carrying

amounts due to the short-term nature of these instruments.

Cash and cash equivalents are stated at carrying value which approximates

expenses consist of the following as of:

of ACCRUED EXPENSES

July 31, 2021

October 31, 2020

(in thousands)

Payroll and related expenses

Accrued royalty and contingent legal fees

Accrued collaborative research and license expense

Accrued other

NET LOSS PER SHARE OF COMMON STOCK

Basic 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.

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.

For this reason, excluded from the

calculation of Diluted EPS for the nine months ended July 31, 2021 and 2020, were stock options to purchase 10,303,626 and 8,101,658 shares,

respectively, and warrants to purchase 860,000 and 500,000 shares, respectively.

EFFECT OF RECENTLY ADOPTED AND ISSUED PRONOUNCEMENTS

In 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 to recognize most leases on

the balance sheet.

The new lease standard does not substantially change lessor accounting.

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.

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

In January 2020, the FASB issued

Accounting Standards Update 2020-01 (“ASU 2020-01”) Investments-Equity Securities (Topic 321), Investments-Equity Method and

Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815).

The amendments in ASU 2020-01 clarify certain interactions between

the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method

of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the

measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract

or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance

with Topic 825, Financial Instruments.

These amendments improve current GAAP by reducing diversity in practice and increasing comparability

of the accounting for these interactions.

The amendments in this update are effective for fiscal years beginning after December 15, 2020,

and interim periods within those fiscal years.

The adoption of this standard will not have a material impact on our disclosures or consolidated

financial statements.

We 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.

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.

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.

We have substantial net operating

loss carryforwards for Federal and California income tax returns.

These net operating loss carryforwards could be subject to limitations

under Internal Revenue Code section 382.

We have no unrecognized income tax benefits as of July 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.

We 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.

Accrued expenses

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

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 three months ended January 31, 2022 and 2021, were stock options to purchase

10,700,626 and 8,659,134 shares, respectively, and warrants to purchase 360,000 and 560,000 shares, respectively.

OF RECENTLY ADOPTED AND ISSUED PRONOUNCEMENTS

January 2020, the FASB issued Accounting Standards Update 2020-01 (“ASU 2020-01”) Investments-Equity Securities (Topic 321),

Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815).

The amendments in ASU 2020-01 clarify

certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments

under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity

security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of

the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value

option in accordance with Topic 825, Financial Instruments.

These amendments improve current GAAP by reducing diversity in practice and

increasing comparability of the accounting for these interactions.

The amendments in this update are effective for fiscal years beginning

after December 15, 2020, and interim periods within those fiscal years.

The adoption of this standard did not have a material impact

on our condensed consolidated financial statements and related disclosures.

August 2020, the FASB issued Accounting Standards Update 2020-06 (“ASU 2020-06”), Accounting for Convertible Instruments

and Contracts in an Entity’s Own Equity.

The amendments in ASU 2020-06 include guidance on convertible instruments and the derivative

scope exception for contracts in an entity’s own equity and simplifies the accounting for convertible instruments which include

beneficial conversion features or cash conversion features by removing certain separation models in Subtopic 470-20.

Additionally, ASU

2020-06 will require entities to use the “if-converted” method when calculating diluted earnings per share for convertible

The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods

within those fiscal years.

We do not expect the adoption of this standard to have a material impact on our condensed consolidated financial

statements and related disclosures.

May 2021, the FASB issued Accounting Standards Update 2021-04 (“ASU No.

2021-04”), Issuer’s Accounting for Certain

Modifications or Exchanges of Freestanding Equity-Classified Written Call Options.

The guidance in ASU 2021-04 requires the issuer to

treat a modification of an equity-classified written call option (the “option”) that does not cause the option to become

liability-classified as an exchange of the original option for a new option.

This guidance applies whether the modification is structured

as an amendment to the terms and conditions of the option or as termination of the original option and issuance of a new option.

amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal

We do not expect the adoption of this standard to have a material impact on our condensed consolidated financial statements and

related disclosures.

October 2021, the FASB issued Accounting Standards Update 2021-08 (“ASU No.

2021-08”), Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, to require that an acquirer recognize and measure

contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with

At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it

had originated the contracts.

The amendments in this update should be applied prospectively and are effective for fiscal years beginning

after December 15, 2022, including interim periods within those fiscal years.

We do not expect the adoption of this standard to have

a material impact on our condensed consolidated financial statements and related disclosures.

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.

These net operating loss carryforwards

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

We have no unrecognized income tax benefits as of January 31,

2022 and October 31, 2021 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 was to expire

Effective August 17, 2021, the lease

was amended to extend the expiration date to September 30, 2024, with an option to extend the lease an additional two years.

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.

The amendment to the lease resulted in a right-of-use asset and lease

liability of approximately $ 260,000

with a discount rate of 10 %.

Rent expense was approximately $ 17,000

$ 16,000 and $ 16,000 , respectively, for the three months ended July 31, 2021 and 2020, and approximately $ 48,000 and $ 48,000 , respectively,

for the nine months ended July 31, 2021 and 2020.

On 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.

For operating leases, the lease

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

The remaining 2 -month lease term as

of July 31, 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.

Balance sheet information related

to the Company’s lease is presented below:

and $ 16,000 ,

respectively, for the three months ended January 31, 2022 and 2021.

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

The remaining 56 -month

lease term as of January 31, 2022 for the Company’s lease includes the noncancelable period of the lease and the additional two-year

option period that the Company expects to exercise.

All right-of-use assets are reviewed for impairment.

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

of OPERATING LEASE

Balance Sheet Location

July 31, 2021

October 31, 2020

Operating Lease:

Right-of-use asset

Operating lease right-of-use asset

Right-of-use liability, current

Right-of-use liability,

Operating lease liability

As of July 31, 2021, the annual

minimum lease payments of our operating lease liabilities were as follows:

Operating lease liability,

of January 31, 2022, the annual minimum lease payments of our operating lease liabilities were as follows:

of MINIMUM LEASE PAYMENTS

Operating Leases

2021 future minimum payments, undiscounted

Ended October 31,

(in thousands)

future minimum lease payments, undiscounted

Imputed interest

Present value of future minimum lease payments

In August 2021 the lease was extended

until September 30, 2024 under substantially the same terms as the existing lease.

COMMITMENTS AND CONTINGENCES

Litigation Matters

We are not involved in any litigation

or other legal proceedings and management is not aware of any pending litigation or legal proceeding against us that would have a material

adverse effect upon our results of operations or financial condition.

Impact of Coronavirus Pandemic

On 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.

are currently following the recommendations of local health authorities to minimize exposure risk for our team members and visitors.

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 successful.

We 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.

The 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

SEGMENT INFORMATION

We follow the accounting guidance

of ASC 280 “Segment Reporting” (“ASC 280”).

Reportable operating segments are determined based on the management

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.

value of future minimum lease payments

AND CONTINGENCES

than lawsuits related to the enforcement of our patent rights, we are not a party to any material pending legal proceedings, nor are

we aware of any pending litigation or legal proceeding against us that would have a material adverse effect upon our results of operations

or financial condition.

Collaborative

Research and License Commitments

of January 31, 2022, our commitments under the collaborative and license agreements with Moffitt, Wistar, Cleveland Clinic and MolGenie

for the year ending October 31, 2022 were approximately $ 320,000 .

of Coronavirus Pandemic

ongoing global outbreak of COVID-19 has resulted in significant governmental measures being implemented to control the spread of the

virus, and while the breadth of these measures has been reduced recently, the Company cannot predict their scope or the severity of the

outbreak in the future, and these developments and measures could materially and adversely affect the Company’s business, the operations

of the Company’s collaboration partners, and the Company’s results of operations and financial condition.

The Company is

closely monitoring the impact of the COVID-19 pandemic on all aspects of its business and has taken steps to minimize its impact on the

Company’s business.

Although COVID-19 has not had a material adverse impact on the Company’s operations and its clinical

and preclinical programs, the extent to which COVID-19 ultimately impacts the Company’s business, results of operations or financial

condition will depend on future developments which are highly uncertain and cannot be predicted with confidence, such as the duration

of the outbreak, the occurrence of new mutations of the SARS-CoV-2 virus, new information that may emerge concerning the severity of

COVID-19 or the effectiveness of actions taken to contain the pandemic or mitigate its impact, among others.

Certain of the Company’s

collaboration partners have experienced shutdowns or other business disruptions.

As a result, the Company’s ability to conduct

its business in the manner and on the timelines presently planned could be materially or negatively affected, which could have a material

adverse impact on the Company’s business, results of operations and financial condition.

follow the accounting guidance of ASC 280 “Segment Reporting” (“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 four reportable

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

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

(iii) Anti-Viral Therapeutics and (iv) Other.

The following represents selected financial information for our segments for the three

and nine months ended July 31, 2021 and 2020 and as of July 31, 2021 and October 31, 2020:

months ended January 31, 2022 and 2021 and as of January 31, 2022 and October 31, 2021:

of SEGMENT INFORMATION

For the Three Months Ended

For the Nine Months Ended

Net Income/(Loss):

For the Three Months Ended January

(in thousands)

CAR-T Therapeutics

1 unchanged sentence

Anti-Viral Therapeutics

Cancer Diagnostics

Patent Licensing

Net Income/(Loss)

Total operating costs and expenses

Less non-cash share-based compensation

Operating costs and expenses

excluding non-cash share-based

Operating costs and expenses excluding

non-cash share-based compensation

costs and expenses excluding

non-cash share-based compensation

Operating costs and expenses excluding non-cash

share based compensation expense:

CAR-T Therapeutics

1 unchanged sentence

Anti-Viral Therapeutics

Cancer Diagnostics

Patent Licensing

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

Operating costs and expenses excluding non-cash

share based compensation expense

(in thousands)

Total assets:

2 unchanged sentences

Anti-Viral Therapeutics

Cancer Diagnostics

Patent Licensing

Operating costs and expenses

excluding non-cash share-based compensation expense is the measurement the chief operating decision-maker uses in managing the enterprise.

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 $ 513,000 and inventor royalties, contingent legal fees, litigation and licensing expense of $ 385,000

for the three months ended January 31, 2021 were solely related to our encrypted audio/video conference calling technology, which is

included in our other segment.

All our revenue is generated domestically (United States) based on the country in which the licensee is

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements