What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-01-04 compared with 2022-01-04 · 47 added, 68 removed, 135 unchanged (46% of the section changed)

16 unchanged sentences

As part of our legacy operations, the Company remains engaged in limited patent licensing activities

regarding the Cchek™ 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.

regarding our 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.

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

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and development expenses incurred in fiscal year 2022 associated with each of our development programs consisted of approximately $2,765,000

for CAR-T therapeutics, approximately $2,231,000 for cancer vaccines, approximately $1,323,000 for anti-viral therapeutics and approximately

$2,000 for cancer diagnostics.

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

drug program, and increased by approximately $1,809,000 to approximately $6,190,000 in fiscal year 2021, from approximately $4,381,000

in fiscal year 2020.

The increase in research and development expenses was primarily due to an increase in employee stock option expense

of approximately $2,440,000, an increase in outside research and development related to our development programs, other than our cancer

diagnostics program, of approximately $772,000, an increase in consultant stock option expense of approximately $241,000 and an increase

in legal fees primarily related to collaborative and license agreements of approximately $30,000, offset by a decrease in outside research

and development expense related to our cancer diagnostics program of approximately $1,112,000, a decrease in employee compensation and

related costs, other than stock option compensation expense, of approximately $515,000 and a decrease in depreciation expense of approximately

$35,000, all such decreases primarily due to suspension of development of our cancer diagnostics program in July 2020.

for CAR-T therapeutics, approximately $2,514,000 for cancer vaccines, and approximately $1,424,000 for anti-viral therapeutics.

and development expenses are related to the development of our cancer therapeutic and vaccine programs, and our anti-viral drug program,

and increased by approximately $513,000 to approximately $6,703,000 in fiscal year 2022, from approximately $6,190,000 in fiscal year

The increase in research and development expenses was primarily due to an increase in employee compensation and related costs,

other than stock option compensation expense, of approximately $731,000, an increase in outside research and development related to our

development programs of approximately $170,000 and an increase in license fees of approximately $140,000, offset by a decrease in employee

stock option compensation expense of approximately $562,000.

and Administrative Expenses

1 unchanged sentence

in fiscal year 2021.

The increase in general and administrative expenses was principally due to an increase in employee stock

option expense of approximately $1,108,000, 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 $336,000, an increase in directors compensation of approximately $209,000,

an increase in warrant expense of approximately $96,000, an increase in corporate insurance expense of approximately $59,000 primarily

due to an increase in our directors and officers insurance premium and an increase in investor and public relations expense of approximately

$52,000, offset by a decrease in employee compensation and related costs, other than stock option expense, of approximately $584,000

and a decrease in consulting expense, other than warrant expense, of approximately $133,000.

(Loss) on Disposal of Property and Equipment

(loss) on disposal of property and equipment was a gain of approximately $5,000 in fiscal year 2021 compared to a loss of approximately

$148,000 in fiscal year 2020.

The disposal of property and equipment was in connection with the suspension of development of our cancer

diagnostics program.

income decreased to approximately $2,000 in fiscal year 2021 compared to approximately $34,000 in fiscal year 2020, due to a decrease

The increase in general and administrative expenses was principally due to an increase in employee compensation

and related costs, other than stock option compensation expense, of approximately $593,000, an increase in investor and public relations

expense of approximately $421,000, and an increase in professional fees of approximately $235,000, offset by a decrease in director compensation

of approximately $664,000, a decrease in employee stock option compensation expense of approximately $356,000, a decrease in patent expense

of approximately $71,000 and a decrease in consultant stock option expense of approximately $57,000.

income increased to approximately $104,000 in fiscal year 2022 compared to approximately $2,000 in fiscal year 2021, due to an increase

in interest rates.

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net loss increased.

The increase in Certainty’s net loss was primarily due to an increase in employee stock option expense of approximately

$1,422,000, an increase in outside research and development of approximately $407,000 and an increase in patent expense of approximately

and Capital Resources

10 unchanged sentences

to obtain more working capital.

During fiscal year 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 an 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 equity securities

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

We cannot be certain

that additional funding will be available on acceptable terms, or at all.

If we do identify sources for additional funding, the sale

of additional equity securities or convertible debt will result in dilution to our stockholders.

We can give no assurance that we will

generate sufficient cash flows in the future to satisfy our liquidity requirements or sustain future operations, or that other sources

of funding, such as sales of equity or debt, would be available or would be approved by our security holders, if needed, on favorable

terms or at all.

If we fail to obtain additional working capital as and when needed, such failure could have a material adverse impact

on our business, results of operations and financial condition.

Furthermore, such lack of funds may inhibit our ability to respond to

competitive pressures or unanticipated capital needs, or may force us to reduce operating expenses, which would significantly harm the

business and development of operations.

the year ended October 31, 2021, cash used in operating activities was approximately $4,937,000.

Cash used in investing activities was

approximately $3,918,000, resulting from the purchase of short-term investments of approximately $16,499,000, which was offset by the

proceeds on maturities of short-term investments of approximately $12,539,000, the proceeds from the sale of equipment of approximately

$35,000 and proceeds received on sale of common stock by ZQX Advisors, LLC of approximately $6,000.

Cash provided by financing activities

was approximately $31,566,000, 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 $434,000 and proceeds from the sale of common stock pursuant to employee stock purchase

plan of approximately $6,000.

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

$26,671,000 to approximately $35,728,000 from approximately $9,057,000 at the end of fiscal year 2020.

have a future cash obligation related to the lease of our offices through 2026, estimated at approximately $331,000.

Under our at-the-market equity program which is currently effective and may remain available for us to

use in the future, as of October 31, 2022, we may sell up to $100 million of common stock.

We did not sell any shares under our at-the-market

equity program during the fiscal year ended October 31, 2022.

We may seek to obtain working capital during our fiscal year 2023 or thereafter

through sales of our equity securities or through bank credit facilities or public or private debt from various financial institutions

where possible.

We cannot be certain that additional funding will be available on acceptable terms, or at all.

If we do identify sources

for additional funding, the sale of additional equity securities or convertible debt will result in dilution to our stockholders.

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 fiscal year ended October 31, 2022, cash used in operating activities was approximately $6,49 2 ,000.

Cash used in investing activities

was approximately $10,27 8 ,000, resulting from the purchase of short-term investments of approximately $22,486,000, which was offset by

the proceeds on maturities of short-term investments of approximately $11,75 8 ,000.

Cash provided by financing activities was approximately

$452,000, resulting proceeds from exercise of stock options of approximately $439,000 and proceeds from the sale of common stock pursuant

to employee stock purchase plan of approximately $13,000.

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

31, 2022 decreased approximately $6,040,000 to approximately $29,687,000 from approximately $35,727,000 at the end of fiscal year 2021.

have expected future cash obligation s related to the lease of our offices through 2026, estimated at approximately $268,000.

Sheet Arrangements

13 unchanged sentences

policies require our most difficult, subjective, or complex judgments:

● Stock-Based

Compensation.

49 unchanged sentences

underlying grants.

We made the dividend yield assumption based on our history of not paying dividends and our expectation not to pay

dividends in the future.

We made the dividend yield assumption based on our history of not paying cash dividends and our expectation not to

pay dividends in the future.

will reconsider use of the Black-Scholes pricing model and Monte Carlo Simulation if additional information becomes available in the

12 unchanged sentences

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-K

Item 7. Management’s Discussion and Analysis