What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-01-16 compared with 2023-01-04 · 653 added, 643 removed, 477 unchanged (73% of the section changed)

2 unchanged sentences

maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

supervision and with the participation of our management, including our Chief Executive Officer and our President, Chief Operating Officer

and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant

to Rule 13a-15 and 15d-15 of the Exchange Act.

Based upon that evaluation, our Chief Executive Officer and our President, Chief Operating

Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of fiscal year

supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we evaluated

the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 and 15d-15 of the Exchange

Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and

procedures were effective as of the end of fiscal year 2023.

Report on Internal Control Over Financial Reporting

17 unchanged sentences

Management’s report was not subject to attestation by the Company’s independent registered

public accounting firm pursuant to a permanent exemption of the Commission that permits the Company to provide only management’s

report in this Annual Report on Form 10-K.

Accordingly, our management’s assessment of the effectiveness of our internal control

over financial reporting as of October 31, 2022 has not been audited by our auditors, Haskell & White LLP.

public accounting firm pursuant to an exemption of the Commission that permits smaller reporting companies and non-accelerated filers,

such as the Company, to provide only management’s report in this Annual Report on Form 10-K.

Accordingly, our management’s

assessment of the effectiveness of our internal control over financial reporting as of October 31, 2023 has not been audited by our auditors,

Haskell & White LLP.

in Internal Control Over Financial Reporting

25 unchanged sentences

accompanying “Index to Consolidated Financial Statements.”

Certificate of Incorporation, as amended.

(Incorporated by reference to Form 10-Q for the fiscal quarter ended July 31, 1992 and Form S-3, dated February 11, 2014.)

Amendment to the Certificate of Incorporation.

of Incorporation, as amended.

(Incorporated by reference to Form 10-Q for the fiscal quarter ended July 31, 1992 and Form S-3, dated

February 11, 2014.)

to the Certificate of Incorporation.

(Incorporated by reference to Exhibit 3.2 to our Form 10-K for the fiscal year ended October

Certificate of Amendment to the Certificate of Incorporation.

(Incorporated by reference to Exhibit 3.1 to our Form 8-K, dated September 4, 2014.)

Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock.

of Amendment to the Certificate of Incorporation.

(Incorporated by reference to Exhibit 3.1 to our Form 8-K, dated September 4, 2014.)

Certificate of Amendment to the Certificate of Incorporation.

of Designations, Preferences and Rights of Series A Convertible Preferred Stock.

(Incorporated by reference to Exhibit 3.1 to our

Form 8-K, dated September 10, 2014.)

of Amendment to the Certificate of Incorporation.

(Incorporated by reference to Exhibit 3.1 to our Form 8-K, dated June 25, 2015.)

Certificate of Amendment to the Certificate of Incorporation.

(Incorporated by reference to Exhibit 3.1 to our Form 10-Q for the fiscal quarter ended April 30, 2018.)

Certificate of Amendment to the Certificate of Incorporation.

of Amendment to the Certificate of Incorporation.

(Incorporated by reference to Exhibit 3.1 to our Form 10-Q for the fiscal quarter

ended April 30, 2018.)

of Amendment to the Certificate of Incorporation.

(Incorporated by reference to Exhibit 3.1 to our Form 8-K, dated October 1, 2018.)

Certificate of Amendment to the Certificate of Incorporation.

of Amendment to the Certificate of Incorporation.

(Incorporated by reference to Exhibit 3.1 to our Form 8-K, dated August 13, 2020.)

Amended and Restated By-laws.

and Restated By-laws.

(Incorporated by reference to Exhibit 3.8 to our Form 10-K for the fiscal year ended October 31, 2019.)

Amendment to the Amended and Restated Bylaws of the Company.

to the Amended and Restated Bylaws of the Company.

(Incorporated by reference to our Form 8-K, dated April 2, 2021.)

Form of Underwriter Warrants.

of Underwriter Warrants.

(Incorporated by reference to Exhibit 4.1 to our Form 8-K, dated March 24, 2021.)

Description of the Company’s Securities Registered under Section 12 of the Exchange Act (Incorporated by reference to the description of our common stock contained in our Current Report on Form 8-K filed on March 31, 2014.)

of the Company’s Securities Registered under Section 12 of the Exchange Act (Incorporated by reference to the description of

our common stock contained in our Current Report on Form 8-K filed on March 31, 2014.)

Share Incentive Plan.

(Incorporated by reference to Exhibit 10.1 to our Form 8-K, dated July 20, 2010.)

Amendment No.

1 to the 2010 Share Incentive Plan.

(Incorporated by reference to Exhibit 10.1 to our Form 8-K, dated July 7, 2011.)

Amendment No.

2 to the 2010 Share Incentive Plan.

(Incorporated by reference to Exhibit 10.1 to our Form 8-K, dated September 5, 2012.)

Amendment No.

3 to the 2010 Share Incentive Plan.

(Incorporated by reference to Exhibit 10.1 to our Form 10-Q for the fiscal quarter ended January 31, 2014.)

(Incorporated by reference to Exhibit 10.1 to our Form 10-Q for the fiscal quarter ended

January 31, 2014.)

Share Incentive Plan.

(Incorporated by reference to Exhibit 4.13 to our Form S-8 dated October 1, 2018.)

License Agreement, dated November 13, 2017, between Certainty Therapeutics, Inc.

Agreement, dated November 13, 2017, between Certainty Therapeutics, Inc.

and The Wistar Institute of Anatomy and Biology.

(Incorporated by reference to Exhibit 10.14 to our Form 10-K, dated January 9, 2018.) (Portions of this exhibit have been redacted pursuant to a request for confidential treatment.

(Incorporated

by reference to Exhibit 10.14 to our Form 10-K, dated January 9, 2018.) (Portions of this exhibit have been redacted pursuant to

a request for confidential treatment.

The redacted portions have been separately filed with the Securities and Exchange Commission.)

Amendment to License Agreement between Certainty Therapeutics, Inc.

to License Agreement between Certainty Therapeutics, Inc.

and The Wistar Institute of Anatomy and Biology.

(Incorporated by reference to Exhibit 10.1 to our Form 10-Q for the fiscal quarter ended January 31, 2021.) (Certain information has been redacted in the marked portions of the exhibit.)

Amended and Restated Master Collaboration Agreement, dated November 1, 2021, between Certainty Therapeutics, Inc.

Lee Moffitt Cancer Center and Research Institute, Inc.

(Incorporated by reference to Exhibit 10.8 to our Form 10-K for the fiscal year ended October 31, 2021.)

Exclusive License Agreement, dated July 8, 2019, between the Company and The Cleveland Clinic Foundation.

(Incorporated by reference to Exhibit 10.1 to our Form 10-Q for the fiscal quarter ended July 31, 2019.) (Certain information has been redacted in the marked portions of the exhibit.)

Collaboration Agreement, dated April 14, 2020, between the Company and OntoChem GmbH.

(Incorporated by reference to Exhibit 10.1 to our Form 10-Q for the fiscal quarter ended April 30, 2020.) (Certain information has been redacted in the marked portions of the exhibit.)

Amendment to Collaboration Agreement between the Company and OntoChem GmbH.

(Incorporated by reference

to Exhibit 10.1 to our Form 10-Q for the fiscal quarter ended January 31, 2021.) (Certain information has been redacted in the marked

portions of the exhibit.)

and Restated Master Collaboration Agreement, dated November 1, 2021, between Certainty Therapeutics, Inc.

Lee Moffitt Cancer

Center and Research Institute, Inc.

(Incorporated by reference to Exhibit 10.8 to our Form 10-K for the fiscal year ended October

Assignment Agreement dated May 1, 2021, between the Company, OntoChem GmbH and MolGenie GmbH.

(Incorporated by reference to Exhibit 10.1 to our Form 10-Q for the fiscal quarter ended April 30, 2021.)

Amendment 2 to the Collaboration Agreement between the Company and MolGenie GmbH.

(Incorporated by reference to Exhibit 10.2 to our Form 10-Q for the fiscal quarter ended April 30, 2021.) (Certain information has been redacted in the marked portions of the exhibit.)

Exclusive License Agreement, dated October 20, 2020, between the Company and The Cleveland Clinic Foundation.

(Incorporated by reference to Exhibit 10.14 to our Form 10-K, for the fiscal year ended October 31, 2020.) (Certain information has been redacted in the marked portions of the exhibit.)

Amendment No.

License Agreement, dated July 8, 2019, between the Company and The Cleveland Clinic Foundation.

(Incorporated by reference to Exhibit

10.1 to our Form 10-Q for the fiscal quarter ended July 31, 2019.) (Certain information has been redacted in the marked portions

of the exhibit.)

to Exclusive License Agreement between the Company and The Cleveland Clinic Foundation.

(Incorporated by reference to Exhibit 10.1 to our Form 10-Q for the fiscal quarter ended July 31, 2022.) (Certain information has been redacted in the marked portions of the exhibit.)

Joint Development and Option Agreement, dated January 26, 2021, between the Company and The Cleveland Clinic Foundation.

(Incorporated by reference to Exhibit 10.2 to our Form 10-Q for the fiscal quarter ended January 31, 2021.) (Certain information has been redacted in the marked portions of the exhibit.)

Form of Controlled Equity Offering SM Sales Agreement (Incorporated by reference to Exhibit 10.1 to our Form S-3 dated September 9, 2022)

Code of Conduct (Incorporated by reference to Exhibit 14 to our Form 10-K, for the fiscal year ended October 31, 2020.)

Subsidiaries of Anixa Biosciences, Inc.

(Filed herewith.)

License Agreement, dated October 20, 2020, between the Company and The Cleveland Clinic Foundation.

(Incorporated by reference to

Exhibit 10.14 to our Form 10-K, for the fiscal year ended October 31, 2020.) (Certain information has been redacted in the marked

portions of the exhibit.)

1 to Exclusive License Agreement between the Company and The Cleveland Clinic Foundation.

(Incorporated by reference to Exhibit

10.1 to our Form 10-Q for the fiscal quarter ended July 31, 2022.) (Certain information has been redacted in the marked portions

of the exhibit.)

of Controlled Equity Offering SM Sales Agreement (Incorporated by reference to Exhibit 10.1 to our Form S-3 dated September

of Conduct (Incorporated by reference to Exhibit 14 to our Form 10-K, for the fiscal year ended October 31, 2020.)

Trading Policy (Filed herewith.)

of Anixa Biosciences, Inc.

(Incorporated by reference to Exhibit 21 to our Form 10-K, for the fiscal year ended October 31, 2020.)

Consent of Haskell & White LLP.

of Haskell & White LLP.

(Filed herewith.)

Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated January 4, 2023.

Certification

of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated January 16, 2024.

(Filed herewith.)

Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated January 4, 2023.

Certification

of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated January 16, 2024.

(Filed herewith.)

Statement of Chief Executive Officer, pursuant to Section 1350 of Title 18 of the United States Code, dated January 4, 2023.

of Chief Executive Officer, pursuant to Section 1350 of Title 18 of the United States Code, dated January 16, 2024.

(Filed herewith.)

Statement of Chief Financial Officer, pursuant to Section 1350 of Title 18 of the United States Code, dated January 4, 2023.

of Chief Financial Officer, pursuant to Section 1350 of Title 18 of the United States Code, dated January 16, 2024.

(Filed herewith.)

Policy (Filed herewith.)

Form 10-K Summary.

12 unchanged sentences

Financial Officer

Accounting Officer)

Financial and Accounting Officer)

Titterton, Jr.

7 unchanged sentences

of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of October 31, 2022 and 2021

Consolidated Statements of Operations for the years ended October 31, 2022 and 2021

Consolidated Statements of Equity for the years ended October 31, 2022 and 2021

Consolidated Statements of Cash Flows for the years ended October 31, 2022 and 2021

Notes to Consolidated Financial Statements

Balance Sheets as of October 31, 2023 and 2022

Statements of Operations for the years ended October 31, 2023 and 2022

Statements of Equity for the years ended October 31, 2023 and 2022

Statements of Cash Flows for the years ended October 31, 2023 and 2022

to Consolidated Financial Statements

information required by schedules called for under Regulation S-X is either not applicable or is included in the consolidated financial

4 unchanged sentences

on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Anixa Biosciences,

(the “Company”) as of October 31, 2022 and 2021, and the related consolidated statements of operations, equity, and cash

flows for each of the two years in the period ended October 31, 2022, and the related notes (collectively, the “consolidated financial

statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial

position of the Company as of October 31, 2022 and 2021, and the consolidated results of its operations and its cash flows for each of

the years in the two year period ended October 31, 2022, in conformity with accounting principles generally accepted in the United States

have audited the accompanying consolidated balance sheets of Anixa Biosciences, Inc.

(the “Company”) as of October 31, 2023

and 2022, and the related consolidated statements of operations, equity, and cash flows for each of the two years in the period ended

October 31, 2023, and the related notes (collectively, the “consolidated financial statements”).

In our opinion, the consolidated

financial statements present fairly, in all material respects, the consolidated financial position of the Company as of October 31, 2023

and 2022, and the consolidated results of its operations and its cash flows for each of the years in the two year period ended October

31, 2023, in conformity with accounting principles generally accepted in the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

20 unchanged sentences

Audit Matters

Critical audit matters are matters arising from the current period audit

of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective,

or complex judgments.

We determined that there were no critical audit matters.

critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements

that was communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are

material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial

statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical

audit matter or on the accounts or disclosures to which it relates.

and Development Expenses – Refer to Note 2 of the Consolidated Financial Statements

Audit Matter Description:

Company recognizes research and development expenses as incurred.

Advance payments for future research and development activities are

deferred and expensed as the services are performed.

The Company recognizes its preclinical studies and clinical trial expenses based

on the services performed pursuant to contracts with research institutions, clinical research organizations (“CROs”), clinical

manufacturing organizations (“CMOs”), and other parties that conduct and manage various stages of research and development

activities on the Company’s behalf.

Fees for such services are recognized based on management’s estimates after considering

the activities and tasks completed by each service provider in a given period, the time period over which services are expected to be

performed, and the level of effort expended in each reporting period.

each balance sheet date, management estimates prepaid and accrued research and development costs by discussing progress or stage of completion

of activities with internal personnel and external service providers, and comparing this information to payments made, invoices received,

and the agreed-upon contractual fee to be paid for such services in the applicable contract or statements of work.

addition, the Company allocates certain internal compensation costs to research and development expenses based on management’s

estimates of each employee’s time and effort expended.

the Critical Matter was Addressed in the Audit:

primary procedures we performed to address this critical audit matter included the following:

obtained an understanding, and evaluated the design and implementation, of controls relating

to research and development costs, including controls over the review of third-party contracts,

the process of gathering information from external and internal sources and management’s

review thereof, and the determination of prepaid positions, period-end accruals, and expense

the Company’s significant third-party contracts, we performed the following procedures:

obtained and read related master service agreements, statements of work, or other supporting

agreements with the research institution, CRO, or CMO.

performed corroborating inquiries with management personnel responsible for the oversight

of the activities regarding the nature and status of work performed.

evaluated evidence of services provided by third parties including invoices regarding activities

completed, and we inspected evidence supporting payments made by the Company.

compared the data and evidence obtained from internal and external sources to the amounts

recorded by management and recalculated the related research and development expense and

prepaid research and development expense.

the Company’s internal compensation allocations, we performed the following procedures:

performed corroborating inquiries with management personnel responsible for the oversight

of the activities regarding the nature of employee services performed.

evaluated the reasonableness of allocations estimated by management by comparisons with prior

periods and evaluating the reasonableness of significant changes made by management.

obtained written representations from management regarding the appropriateness of allocation

have served as the Company’s auditor since 2013

4 unchanged sentences

Current assets:

Cash and cash equivalents

Cash and cash

Short–term investments

Prepaid expenses and other current assets

expenses and other current assets

Total current assets

Operating lease right-of-use asset

LIABILITIES AND EQUITY

Operating lease right-of-use

LIABILITIES AND

Current liabilities:

1 unchanged sentence

Accrued expenses

Operating lease liability

lease liability

Total current liabilities

Operating lease liability, non-current

Total liabilities

Operating lease liability,

Commitments and contingencies (Note 6)

Shareholders’ equity:

Preferred stock, par value $ 100 per share;

19,860 shares authorized;

Preferred stock, par value

19,860 shares

issued or outstanding

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

140 shares authorized;

no shares issued or outstanding

Preferred stock

Common stock, par value $ .01 per share;

Series A convertible preferred

stock, par value $ 100

shares authorized;

shares issued or outstanding

Preferred stock, value

Common stock, par value

100,000,000 shares

31,145,219 and

shares issued and outstanding as of October 31, 2022 and 2021, respectively

30,913,902 shares

issued and outstanding as of October 31, 2023 and 2022, respectively

Additional paid-in capital

Accumulated deficit

Total shareholders’ equity

Noncontrolling interest (Note 2)

Total liabilities and equity

Total shareholders’

Noncontrolling

interest (Note 2)

liabilities and equity

accompanying notes are an integral part of these statements.

3 unchanged sentences

thousands, except per share data)

For the years ended October 31,

the years ended October 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 $ 3,635 and $ 4,166 , respectively)

General and administrative expenses (including non-cash share based compensation expenses of $ 3,020 and $ 3,892 , 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 $ 2,037

and $ 3,635 ,

respectively)

and administrative expenses (including non-cash share based compensation expenses of $ 2,698

and $ 3,117 ,

respectively)

Total operating costs

Loss from operations

Gain on disposal of property and equipment

Interest income

Net loss attributable to noncontrolling interest

Net loss attributable to common stockholders

Net loss attributable

to noncontrolling interest

Net loss attributable

to common stockholders

Net loss per share:

Basic and diluted

Weighted average common shares outstanding:

Basic and diluted

accompanying notes are an integral part of these statements.

5 unchanged sentences

Shareholders’

BALANCE, October 31, 2020

$ ( 191,836 )

Stock option compensation to employees and directors

Expired restricted stock award to employee

October 31, 2021

$ ( 204,790 )

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

Common stock issued in an at-the-market offering, net of offering expenses of $ 341

Proceeds received on sale of common stock held by ZQX Advisors, LLC

BALANCE, October 31, 2021

option compensation to employees and directors

options and warrants issued to consultants

stock issued upon exercise of stock options and warrants

stock issued to consultants

stock issued pursuant to employee stock purchase plan

October 31, 2022

$ ( 218,385 )

Balance, value

$ ( 218,385 )

Stock option compensation to employees and directors

Stock options and warrants issued to consultants

Common stock issued upon exercise of stock options and warrants

Common stock issued to consultants

Common stock issued pursuant to employee stock purchase plan

BALANCE, October 31, 2022

option compensation to employees and directors

options issued to consultants

stock issued upon exercise of stock options

stock issued to consultants

stock issued pursuant to employee stock purchase plan

October 31, 2023

$ ( 228,196 )

Balance, value

$ ( 228,196 )

Shareholders’ Equity [Member]

accompanying notes are an integral part of these statements.

2 unchanged sentences

STATEMENTS OF CASH FLOWS

For the years ended October 31,

the years ended October 31,

Cash flows from operating activities:

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

Stock option compensation to employees and directors

Stock options and warrants issued to consultants

Common stock issued to consultants

Gain on disposal of property and equipment

Amortization of operating lease right-of-use asset

Change in operating assets and liabilities:

Prepaid expenses and other current assets

Reconciliation of net loss to net cash used

in operating activities:

Stock option compensation

to employees and directors

Stock options and warrants

issued to consultants

Common stock issued to

Amortization of operating

lease right-of-use asset

Change in operating assets

and liabilities:

Prepaid expenses and other

current assets

Accounts payable

Accrued expenses

Operating lease liability

Net cash used in operating activities

lease liability

cash used in operating activities

Cash flows from investing activities:

Disbursements to acquire short-term investments

Proceeds from maturities of short-term investments

Proceeds from sale of equipment

Proceeds received on sale of common stock by ZQX Advisors, LLC

Net cash used in investing activities

Disbursements to acquire

short-term investments

from maturities of short-term investments

cash used in investing activities

Cash flows from financing activities:

Proceeds from sale of common stock in a public offering, net of expenses

Proceeds from sale of common stock in an at-the-market offering, net of expenses

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

Proceeds from exercise of stock options and warrants

Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Proceeds from sale of common

stock pursuant to employee stock purchase plan

from exercise of stock options and warrants

cash provided by financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents

at beginning of year

Cash and cash equivalents

at end of year

Supplemental cash flow information:

Cash proceeds from interest income

Supplemental disclosure of non-cash investing activity:

Operating lease right-of-use asset

Supplemental disclosure of non-cash financing activities:

Operating lease liability

Fair value of warrants issued in connection with public offering

proceeds from interest income

accompanying notes are an integral part of these statements.

5 unchanged sentences

and its consolidated subsidiaries.

is a biotechnology company developing therapies and vaccines that are focused on critical unmet needs in oncology and infectious disease.

Biosciences, Inc.

is a biotechnology company developing vaccines and therapies that are focused on critical unmet needs in oncology.

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

4 unchanged sentences

at our subsidiary, Certainty Therapeutics, Inc.

(“Certainty”), and (ii) the development of anti-viral drug candidates for

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

(“Certainty”), and (ii) until March 2023, the development of anti-viral drug

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

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.

agreement requires us to make certain cash payments to Cleveland Clinic upon achievement of specific development milestones.

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.

cancer, focused initially on TNBC.

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

3 unchanged sentences

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

Food and Drug Administration’s (“FDA”) 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.

This study, which is being funded

Department of Defense grant, is a multiple-ascending dose Phase 1 trial to determine the maximum tolerated dose (“MTD”)

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

October 2021, following the U.S.

Food and Drug Administration’s (“FDA”) authorization to proceed, we commenced dosing

patients in a Phase 1 clinical trial of our breast cancer vaccine.

This study, which is being funded by a U.S.

Department of Defense

grant to Cleveland Clinic, is a multiple-ascending dose Phase 1 trial to determine the maximum tolerated dose (“MTD”) 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.

Initial indications

from preliminary analyses suggest that an immune response is being observed.

In December 2022, we announced that we had reached the MTD.

We are now expanding the MTD cohort and are vaccinating additional participants at that dose level.

Upon completion of vaccination and

follow-up tests of the expanded cohort, we will compile and analyze the data, and we anticipate presenting the complete immunological

data from the trial at a scientific conference or similar setting in the second calendar quarter of 2023.

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

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

vaccine technology.

This technology pertains to 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.

at Cleveland Clinic.

The first segment of the study, Phase 1a, 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.

that 42% of TNBC patients will have a recurrence of their cancer, with most of the recurrences occurring in the first two to three years

after standard of care treatment.

During the course of the Phase 1a study, participants will receive three vaccinations, each two weeks

apart, and will be closely monitored for side effects and immune response.

In January 2023, the number of participants in each dose cohort

was expanded, and as of August 2023, we had completed vaccinating all patients in these expanded cohorts.

In December 2023, we presented

the immunological data collected to date at the San Antonio Breast Cancer Symposium.

The data presented show that in the vaccinated women

who had been tested to date, various levels of antigen-specific T cell responses were observed at all dose levels.

We have begun vaccinating

participants in up to three additional dose cohorts at dose levels higher than the currently determined MTD and lower than the highest

dose where we observed dose limiting toxicity.

Further, we have commenced vaccination of participants in the second segment of the trial,

Phase 1b, that includes participants who have never had cancer, but carry certain genetic mutations such as BRCA1, BRCA2 or PALB2, that

indicate a greater risk of developing TNBC in the future, and have elected to have a prophylactic mastectomy.

Finally, we are currently

enrolling participants in the third segment of the trial, Phase 1c, that includes post-operative TNBC patients that have residual disease

following neoadjuvant chemo-immunotherapy and are currently undergoing treatment with pembrolizumab (Keytruda®).

BIOSCIENCES, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

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

PREVENT program.

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

The PREVENT program is a peer-reviewed agent development program

designed to support pre-clinical development of innovative interventions and biomarkers for cancer prevention and interception towards

clinical trials.

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

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

This work is being performed

at NCI facilities, by NCI scientific staff and with NCI financial resources and will require no material financial expenditures by the

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

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

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

vaccine technology.

The license agreement requires us to make certain cash payments to Cleveland Clinic upon achievement of specific

development milestones.

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”).

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

While expression of AMHR2-ED naturally

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

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

May 2021, Cleveland Clinic was granted acceptance for our ovarian cancer vaccine technology into the National Cancer Institute’s

(“NCI”) PREVENT program.

The NCI is a part of the National Institutes of Health (“NIH”).

The PREVENT program

is a peer-reviewed agent development program designed to support pre-clinical development of innovative interventions and biomarkers

for cancer prevention and interception towards clinical trials.

The scientific and financial resources of the PREVENT program are being

used for our ovarian cancer vaccine technology to perform virtually all pre-clinical research and development, manufacturing and Investigational

New Drug (“IND”) application enabling studies.

This work is being performed at NCI facilities, by NCI scientific staff and

with NCI financial resources and will require no material financial expenditures by the Company, nor the transfer of any rights of the

Company’s assets.

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

1 unchanged sentence

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

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

With respect to Certainty’s

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

biomedical research institute and a leading NCI 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 Certainty to make certain

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

With respect to Certainty’s equity obligations

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

of the common stock of Certainty, such equity stake subject to dilution by further funding of Certainty’s activities by the Company.

Due to such Company funding, Wistar’s equity stake in Certainty was 4.6% as of October 31, 2023.

in collaboration with the H.

Lee Moffitt Cancer Center and Research Institute, Inc.

(“Moffitt”), is advancing toward human

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

We received authorization

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

We began patient recruitment

for the trial in March 2022, and in August 2022, we treated the first patient in the trial.

The treatment appears to have been well-tolerated

by the patient, and we continue to monitor her condition.

The process of recruiting additional patients is ongoing.

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, the rate of patient

recruitment, and how long we maintain the two different injection methods.

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

drug candidates against COVID-19.

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

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

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

the virus that causes the disease COVID-19.

(“Moffitt”), has begun human clinical

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

After receiving authorization

from the FDA, we commenced enrollment of patients in a Phase 1 clinical trial and treated the first patient in August 2022.

in May 2023 and August 2023, we treated the second and third patients in the trial, respectively, at the same dose level as the first

patient, and the treatment appears to have been well-tolerated by all patients treated to date.

We anticipate that we will begin enrolling

the successive patient cohort, that we expect to give a three-times higher dose of cells, in the first calendar quarter of 2024.

study is a dose-escalation trial with two arms based on delivery 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

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, the rate of patient enrollment, and how long we maintain the two different delivery methods.

BIOSCIENCES, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

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

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 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.

This work is ongoing.

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.

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 new anti-viral treatments, such as Pfizer’s

Paxlovid, which is a combination therapy consisting of the protease-inhibitor nirmatrelvir and the antiretroviral ritonavir, that have

been authorized for use in the U.S.

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.

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 and in the area of encrypted audio/video conference

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.

April 2020, we entered into a collaboration with OntoChem GmbH (“OntoChem”) which was later assigned to MolGenie GmbH, a

company spun-out from OntoChem focused on drug discovery and development, to discover and ultimately develop anti-viral drug candidates

against COVID-19.

Through this collaboration, we identified compounds that appeared to be effective in disrupting the main protease of

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

While our compounds have shown promise as an effective treatment, results of

animal studies indicate that there is not sufficient oral bioavailability, and it is unclear whether an orally delivered treatment may

be developed.

We do not currently believe that there is a viable market for an injectable treatment given the current oral treatments

Furthermore, we believe the needed additional investment in research for alternative delivery methods would divert resources

from more promising projects.

Therefore, in March 2023, we decided to pause further development of our COVID-19 therapeutic.

to prosecute our U.S.

patent applications of this technology and may decide to restart development at some time in the future.

the next several quarters, we expect the development of our vaccines and therapeutics to be the primary focus of the Company.

of our legacy operations, the Company remains engaged in limited patent licensing activities of its various patent portfolios.

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.

In addition, while

we pursue our therapeutics and vaccine programs, we may also make investments in and form new companies to develop additional emerging

technologies.

We do not expect to begin generating revenue with respect to any of our current therapy or vaccine programs in the near

Our strategy is to achieve a profitable outcome by eventually licensing our technologies to large pharmaceutical companies that

have the resources and infrastructure in place to manufacture, market and sell our technologies as therapeutics or vaccines.

licensing of any of our technologies may take several years, if it is to occur at all, and may depend on positive results from human

clinical trials.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

the settlement of litigation (during the year ended October 31, 2023, we derived approximately $ 210,000

of revenue from these activities).

generated any revenue to date from our vaccine or therapeutics programs.

In addition, while we pursue our vaccine and therapeutics programs,

we may also make investments in and form new companies to develop additional emerging technologies.

We do not expect to begin generating

revenue with respect to any of our current vaccine or therapy programs in the near term.

We hope to achieve a profitable outcome by eventually

licensing our technologies to large pharmaceutical companies that have the resources and infrastructure in place to manufacture, market

and sell our technologies as vaccines or therapeutics.

The eventual licensing of any of our technologies may take several years, if it

is to occur at all, and may depend on positive results from human clinical trials.

and Management’s Plans

10 unchanged sentences

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 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.

use in the future, as of October 31, 2023, 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, 2023.

We may seek to obtain working capital during

our fiscal year 2024 or thereafter through sales of our equity securities or through bank credit facilities or public or private debt

from various financial institutions where possible.

We cannot be certain that additional funding will be available on acceptable terms,

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.

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.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 unchanged sentences

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

The following table

sets forth the changes in noncontrolling interest for the two years ended October 31, 2022 (in thousands):

The following table sets

forth the changes in noncontrolling interest for the two years ended October 31, 2023 (in thousands):

OF CHANGES IN NONCONTROLLING INTEREST

Balance October 31, 2021

Net loss attributable to noncontrolling interest

Net loss attributable

to noncontrolling interest

Balance October 31, 2022

Net loss attributable to noncontrolling interest

Net loss attributable

to noncontrolling interest

Balance October 31,

8 unchanged sentences

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

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

owned or controlled by the Company.

These arrangements typically include some combination of the following:

(i) the grant of a non-exclusive,

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

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

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

Pursuant to the terms of these agreements, we have no further obligations with respect to the granted intellectual property

rights, including no obligation to maintain or upgrade the technology, or provide future support or services.

Licensees obtained control

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

Accordingly, the performance obligations from

these agreements were satisfied and 100 %

of the revenue was recognized upon the execution of the agreements.

BIOSCIENCES, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

technologies owned or controlled by the Company.

These arrangements typically include some combination of the following:

(i) the grant

of a non-exclusive, retroactive and future license to manufacture and/or sell products covered by patented technologies owned or controlled

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

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

of the related patents.

Pursuant to the terms of these agreements, we have no further obligations with respect to the granted intellectual

property rights, including no obligation to maintain or upgrade the technology, or provide future support or services.

Licensees obtained

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

Accordingly, the performance obligations

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

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

4 unchanged sentences

and Development Expenses

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

including expenses related to clinical trials, 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 year incurred.

and development expenses consist primarily of payments to third parties for research and development activities, including expenses related

to clinical trials, employee compensation, and other direct costs associated with developing our therapeutics and vaccines.

recognize research and development expenses as incurred.

Advance payments for future research and development activities are deferred

and expensed as the services are performed.

We recognize our preclinical studies and clinical trial expenses based on the services performed

pursuant to contracts with research institutions, clinical research organizations (“CROs”), clinical manufacturing organizations

(“CMOs”), and other parties that conduct and manage various stages of research and development activities on our behalf.

Fees for such services are recognized based on management’s estimates after considering the activities and tasks completed by each

service provider in a given period, the time period over which services are expected to be performed, and the level of effort expended

in each reporting period.

each balance sheet date, management estimates prepaid and accrued research and development costs by discussing progress or stage of completion

of activities with internal personnel and external service providers, and comparing this information to payments made, invoices received,

and the agreed-upon contractual fee to be paid for such services in the applicable contract or statements of work.

In addition, we allocate certain internal compensation

costs to research and development expenses based on management’s estimates of each employee’s time and effort expended.

Value Measurements

12 unchanged sentences

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

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

2 – Financial instruments whose values are based on quoted market prices in markets where trading occurs infrequently or whose

4 unchanged sentences

a market participant would use in pricing the instrument.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

following table presents the hierarchy for our financial assets measured at fair value on a recurring basis as of October 31, 2023 (in

OF HIERARCHY OF FINANCIAL ASSETS

market funds:

term investments

OF FAIR VALUE MEASUREMENTS

Money market funds:

Cash equivalents

Certificates of deposit:

Short term investments

treasury bills:

term investments

financial assets

Total financial assets

following table presents the hierarchy for our financial assets measured at fair value on a recurring basis as of October 31, 2022 (in

market funds:

term investments

Money market funds:

Cash equivalents

Certificates of deposit:

Cash equivalents

Short term investments

treasury bills:

term investments

financial assets

Total financial assets

non-financial assets that are measured on a non-recurring basis are property and equipment and other assets which are measured using

4 unchanged sentences

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

equivalents consists of highly liquid, short-term investments with original maturities of three months or less when purchased.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

equivalents consist of highly liquid, short-term investments with original maturities of three months or less when purchased.

October 31, 2023 and 2022, we had certificates of deposit and United States treasury bills with maturities greater than 90 days and less

than 12 months when acquired of $ 17,327 and $ 6,599 , respectively, that were classified as short-term investments and reported at fair

than 12 months when acquired of approximately $ 22,929,000

and $ 17,327,000 ,

respectively, that were classified as short-term investments and reported at fair value.

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

4 unchanged sentences

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

maintain stock equity incentive plans under which we may grant non-qualified stock options, incentive stock options, stock appreciation

rights, stock awards, performance awards and stock units to employees, non-employee directors and consultants.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

maintain equity incentive plans under which we may grant incentive stock options, non-qualified stock options, stock appreciation rights,

stock awards, performance awards, or stock units to employees, directors and consultants.

Option Compensation Expense

3 unchanged sentences

recorded stock-based compensation expense, related to service-based stock options granted to employees and directors, of approximately

$ 3,463,000 and $ 3,531,000 , during the years ended October 31, 2022 and 2021, respectively.

Included in stock-based compensation cost

for service-based options granted to employees and directors during the years ended October 31, 2022 and 2021 was approximately $ 2,788,000

and $ 1,841,000 , respectively, related to the amortization of compensation cost for stock options granted in prior periods but not yet

As of October 31, 2022, there was unrecognized compensation cost related to non-vested service-based stock options granted to

employees and directors of approximately $ 5,141,000 , which will be recognized over a weighted-average period of 1 year.

stock options that vest based on market conditions, such as the trading price of the Company’s common stock exceeding certain

price targets, we use a Monte Carlo Simulation in estimating the fair value at grant date and recognize compensation expense over

the implied service period (median time to vest).

On May 8, 2018, we issued market condition stock options to purchase 1,500,000

shares of common stock, to our Chairman, then-President and Chief Executive Officer, vesting at target trading prices of $ 5.00

per share before May

31, 2021 , with implied service periods of three

The assumptions used in the Monte Carlo Simulation for the May 18, 2018 grant were stock price on date of grant and

and $ 3,463,000 ,

during the years ended October 31, 2023 and 2022, respectively.

Included in stock-based compensation cost for service-based options granted

to employees and directors during the years ended October 31, 2023 and 2022 was approximately $ 3,023,000

and $ 2,788,000 ,

respectively, related to the amortization of compensation cost for stock options granted in prior periods but not yet vested.

As of October

31, 2023, there was unrecognized compensation cost related to non-vested service-based stock options granted to employees and directors

of approximately $ 5,194,000 ,

which will be recognized over a weighted-average period of 1.7

stock options that vest based on market conditions, such as the trading price of the Company’s common stock exceeding certain price

targets, we use a Monte Carlo Simulation in estimating the fair value at grant date and recognize compensation expense over the implied

service period (median time to vest).

On June 1, 2021, our Chairman, then-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

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 and

exercise price of $ 4.02 ,

2 unchanged sentences

and risk-free interest rate of 1.62 %.

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.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

June 1, 2021, our Chairman, then-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.

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

exercise price of $ 4.02 , contract term of 10 years, expected volatility of 75 % and risk-free interest rate of 1.62 %.

As of October 31, 2023, 500,000

2022, 500,000 options and 25,000 options granted to our Chairman, then-President and Chief Executive Officer and our Chief Operating Officer

and Chief Financial Officer, respectively, have vested.

recorded stock-based compensation expense related to market condition stock options granted to employees of approximately $ 2,537,000

during the year ended October 31, 2022, which amount represented expense related to the amortization of compensation cost for stock options

granted during the year ended October 31, 2021.

options and 25,000

options granted to our Chairman, then-President

and Chief Executive Officer and our Chief Operating Officer and Chief Financial Officer, respectively, have vested.

the year ended October 31, 2023, we recorded no

stock-based compensation expense related to market

condition stock options granted to employees.

We recorded stock-based compensation expense related to market condition stock options

granted to employees of approximately $ 3,972,000 during the year ended October 31, 2021, which amount did not include any expense related

to the amortization of compensation cost for stock options granted in prior periods.

As of October 31, 2022, there was no unrecognized

compensation cost related to market condition stock options granted to employees.

granted to employees of approximately $ 2,537,000

during the year ended October 31, 2022, which

amount represented expense related to the amortization of compensation cost for stock options granted during the year ended October 31,

As of October 31, 2023, there was no

unrecognized compensation cost related to market

condition stock options granted to employees.

recorded consulting expense, related to service-based stock options granted to consultants, during the years ended October 31, 2023 and

2021 of approximately $ 434,000 and $ 460,000 , respectively.

Included in stock-based consulting expense for the years ended October 31,

2022 and 2021 was approximately $ 434,000 and $ 103,000 , respectively, related to compensation cost for stock options granted in prior

periods but not yet vested.

As of October 31, 2022, there was unrecognized consulting expense related to non-vested service-based stock

options granted to consultants of approximately $ 466,000 , which will be recognized over a weighted-average period of 1.2 years.

2022 of approximately $ 221,000

and $ 434,000 ,

respectively.

Included in stock-based consulting expense for the years ended October 31, 2023 and 2022 was approximately $ 209,000

and $ 434,000 ,

respectively, related to compensation cost for stock options granted in prior periods but not yet vested.

As of October 31, 2023, there

was unrecognized consulting expense related to non-vested service-based stock options granted to consultants of approximately $ 281,000 ,

which will be recognized over a weighted-average period of 2.5

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Value Determination

2 unchanged sentences

The stock options we granted during each of the years ended October 31, 2023 and 2022 consisted

of awards with 5 -year and 10 -year terms that vest over 12 to 36 months.

of awards with 5 -year

terms that vest over 12

following weighted average assumptions were used in estimating the fair value of stock options granted during the years ended October

1 unchanged sentence

OF WEIGHTED AVERAGE ASSUMPTIONS USED IN ESTIMATING FAIR VALUE OF STOCK OPTIONS

Ended October 31,

Weighted average fair value at grant date Valuation assumptions:

the Year Ended October 31,

Weighted average fair value at

Valuation assumptions:

Expected life (years)

2 unchanged sentences

Expected dividend yield

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

expected term of stock options represents the weighted average period the stock options are expected to remain outstanding.

employees and directors, we use the simplified method, which is a weighted average of the vesting term and contractual term, to

determine expected term.

The simplified method was adopted since we do not believe that historical experience is representative of

future performance because of the impact of the changes in our operations.

For consultants we use the contract term for expected

Under the Black-Scholes pricing model, we estimated the expected volatility of our shares of common stock based upon the

historical volatility of our share price over a period of time equal to the expected term of the options.

For employees

and directors, we use the simplified method, which is a weighted average of the vesting term and contractual term, to determine expected

The simplified method was adopted since we do not believe that historical experience is representative of future performance because

of the impact of the changes in our operations and the change in terms from historical operations.

For consultants, we use the contract

term for expected term.

Under the Black-Scholes pricing model, we estimated the expected volatility of our shares of common stock based

upon the historical volatility of our share price over a period of time equal to the expected term of the options.

We estimated the risk-free

interest rate based on the implied yield available on the applicable grant date of a U.S.

Treasury note with a term equal to the

expected term of the underlying grants.

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

our expectation not to pay dividends in the future.

Treasury note with a term equal to the expected

term of the underlying grants.

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

not to pay dividends in the future.

ASC 718, the amount of stock-based compensation expense recognized is based on the portion of the awards that are ultimately expected

7 unchanged sentences

the compensation expense that we record under ASC 718 may differ significantly from what we have recorded in the current period.

Award Compensation Expense

account for stock awards granted to employees, directors and consultants in accordance with ASC 718.

On May 8, 2018, a restricted stock

award of 1,500,000 shares of common stock was granted to our Chairman, then-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).

The assumptions used in the Monte Carlo Simulation were stock price on date

of grant of $ 3.70 , contract term of 3.06 years, expected volatility of 128.8 % and risk-free interest rate of 2.66 %.

We did not record

any compensation expense related to the restricted stock award during the years ended October 31, 2022 and 2021.

We did not issue any

stock awards during the years ended October 31, 2022 and 2021.

As of October 31, 2022, there was no unrecognized compensation cost related

to the restricted stock awards.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

warrants granted to consultants for services rendered, we estimate the fair value using the Black-Scholes pricing model on the date of

During the years ended October 31, 2022 and 2021 we recorded consulting expense, based on the fair value, of approximately $ 221,000

and $ 96,000 , respectively, for warrants granted to consultants.

During the years ended October 31, 2023 and 2022 we recorded consulting expense, based on the fair value, of $ 0

and approximately $ 221,000 ,

respectively, for warrants granted to consultants.

Loss Per Share of Common Stock

7 unchanged sentences

For this reason, excluded from the calculation of Diluted EPS for the years ended October 31,

2022 and 2021 were options to purchase 10,318,872 shares and 10,770,626 shares, respectively, and warrants to purchase 300,000 shares

and 860,000 shares, respectively.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

2023 and 2022 were options to purchase 11,430,000

shares and 10,318,872

shares, respectively, and warrants to purchase

shares and 300,000

shares, respectively.

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires

4 unchanged sentences

results could differ from those estimates.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

of Recently 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 consolidated financial statements and related disclosures.

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

7 unchanged sentences

within those fiscal years.

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

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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 consolidated financial statements and related disclosures.

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

related disclosures.

May 2021, the FASB issued Accounting Standards Update 2021-04 (“ASU 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.

The amendments in this

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

of this standard did not have a material impact on our consolidated financial statements and related disclosures.

October 2021, the FASB issued Accounting Standards Update 2021-08 (“ASU 2021-08”), Business Combinations (Topic 805):

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 Customers.

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 consolidated financial statements and related disclosures.

Concentration

11 unchanged sentences

during fiscal year 2023.

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 exercisable for $ 6.5625 per share.

ACCRUED EXPENSES

liabilities consist of the following as of:

3 unchanged sentences

Accrued other

Accrued expenses

SHAREHOLDERS’

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

SHAREHOLDERS’ EQUITY

the year ended October 31, 2023, we had two stock option plans:

5 unchanged sentences

The 2018 Share Plan was approved by our shareholders on March

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

the year ended October 31, 2022, stock options to purchase 793,103 shares, net of 1,083,517 shares withheld on cashless exercises, were

exercised with aggregate proceeds of approximately $ 439,000 .

During the year ended October 31, 2021, stock options to purchase 207,697

shares, net of 60,691 shares withheld on cashless exercises, were exercised with aggregate proceeds of approximately $ 434,000 .

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

In accordance with the provisions of the 2010 Share Plan, the plan terminated with respect to the grant of future securities

on July 14, 2020.

the years ended October 31, 2023 and 2022, stock options to purchase 157,761

shares of common stock, respectively, were exercised

on a cash basis, with aggregate proceeds of approximately $ 353,000

and $ 439,000 ,

respectively.

During the years ended October 31, 2023 and 2022, stock options to purchase 161,111

shares of common stock, of which 116,225

shares were withheld, and 1,488,881

shares of common stock, of which 1,083,517

shares were withheld, were exercised on a cashless

basis, respectively.

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

stock units to employees, directors and consultants.

On the first business day of each calendar year the aggregate number of shares available

for future issuance is replenished such that 800,000 shares are available.

The exercise price with respect to all of the options granted

under the 2010 Share Plan was equal to the fair market value of the underlying common stock at the grant date.

In accordance with the

provisions of the 2010 Share Plan, the plan terminated with respect to the grant of future options on July 14, 2020.

Information regarding

the 2010 Share Plan for the two years ended October 31, 2022 is as follows:

for future issuance was replenished such that 800,000

shares were available.

The exercise price with

respect to all of the options granted under the 2010 Share Plan was equal to the fair market value of the underlying common stock at

the grant date.

Information regarding the 2010 Share Plan for the two years ended October 31, 2023 is as follows:

OF OPTION ACTIVITY

Average Exercise

Price Per Share

Aggregate Intrinsic Value

Exercise Price

Intrinsic Value

Options Outstanding at October

Options Outstanding at October 31, 2022

Options Outstanding and Exercisable at

October 31, 2022

Options Outstanding

and Exercisable at October 31, 2023

following table summarizes information about stock options outstanding under the 2010 Share Plan as of October 31, 2023:

OF OUTSTANDING AND EXERCISABLE

Outstanding and

Weighted Average

Contractual Life

$ 0.67 - $ 2.27

$ 3.46 - $ 5.30

of Exercise Prices

BIOSCIENCES, INC.

4 unchanged sentences

On the first business day of each calendar year the maximum

aggregate number of shares available for future issuance is replenished such that 2,000,000 shares are available.

The exercise price

with respect to all of the options granted under the 2018 Share Plan was equal to the fair market value of the underlying common stock

at the grant date.

As of October 31, 2022, the 2018 Share Plan had 605,134 shares available for future grants.

Information regarding

the 2018 Share Plan for the two years ended October 31, 2022 is as follows:

aggregate number of shares available for future issuance is replenished such that 2,000,000

shares are available.

The exercise price with

respect to all of the options granted under the 2018 Share Plan was equal to the fair market value of the underlying common stock at

the grant date.

As of October 31, 2023, the 2018 Share Plan had 750,000

shares available for future grants.

regarding the 2018 Share Plan for the two years ended October 31, 2023 is as follows:

OF OPTION ACTIVITY

Average Exercise

Price Per Share

Aggregate Intrinsic Value

Options Outstanding at October 31, 2020

( 1,392,781 )

Exercise Price

Intrinsic Value

Options Outstanding at October

Options Outstanding at October 31, 2022

Options Exercisable at October 31, 2022

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

OF OUTSTANDING AND EXERCISABLE

Forfeited/Expired

Options Outstanding

at October 31, 2023

Options Exercisable

Exercise Prices

Contractual Life

$ 2.09 -$ 3.87

$ 3.96 -$ 5.30

at October 31, 2023

following table summarizes information about stock options outstanding under the 2018 Share Plan as of October 31, 2023:

OF OUTSTANDING AND EXERCISABLE

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”).

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

regarding the Non-Plan Options for the two years ended October 31, 2023 is as follows:

OF OPTION ACTIVITY

Average Exercise

Price Per Share

Options Outstanding at October 31, 2020

Exercise Price

Options Outstanding October 31,

( 1,642,000 )

Options Outstanding and Exercisable at October 31, 2022

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Options Outstanding

and Exercisable at October 31, 2022

Stock Purchase Plan

1 unchanged sentence

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.

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,

During the years ended October 31, 2022 and 2021, employees purchased 4,741 and 2,377 shares, respectively, with aggregate

proceeds of approximately $ 13,000 and $ 6,000 , respectively.

During the years ended October 31, 2023 and 2022, employees purchased 4,360

shares, respectively, with aggregate proceeds

of approximately $ 13,000

and $ 13,000 ,

respectively.

Stock Purchase Warrants

October 30, 2020 we issued a warrant, expiring on October

November 1, 2021 we issued a warrant, expiring on October

30, 2026 , to purchase 60,000

1 unchanged sentence

per share, vesting over five

months , to a consultant for investor relations services.

months , to a consultant for investor relations

We recorded consulting expense of approximately $ 221,000

during the year ended October 31, 2021, based on the fair value of the warrant recognized on a straight-line basis over the vesting

On November 16, 2021, the warrant was exercised in full 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 $ 221,000 during the

year ended October 31, 2022, based on the fair value of the warrant recognized on a straight-line basis over the vesting period.

warrant terminated in May 2022 upon termination of the consulting agreement.

discussed in Note 3, 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 .

during the year ended October 31, 2022, based

on the fair value of the warrant recognized on a straight-line basis over the vesting period.

The warrant terminated in May 2022 upon

termination of the consulting agreement.

connection with a public offering in March 2021, we issued to certain designees of the underwriter, as compensation, warrants to purchase

shares of common stock at $ 6.5625

per share, expiring on March

regarding the Company’s warrants for the two years ended October 31, 2023 is as follows:

OF WARRANTS ACTIVITY

Average Exercise

Price Per Share

Intrinsic Value

Warrants Outstanding at October 31, 2020

Exercise Price

Warrants Outstanding at October

Warrants Outstanding and Exercisable at

October 31, 2022

Warrants Outstanding

and Exercisable at October 31, 2022 and October 31, 2023

following table summarizes information about the Company’s outstanding and exercisable warrants as of October 31 , 2023:

OF OUTSTANDING AND EXERCISABLE

BIOSCIENCES, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

following table summarizes information about the Company’s outstanding and exercisable warrants as of October 31 , 2022:

OF OUTSTANDING AND EXERCISABLE

Outstanding and

Weighted Average

Contractual Life

Advisors, LLC

Advisors, LLC (“ZQX”) was an inactive joint venture in which we held a 19.5 % interest, and which was dissolved during fiscal

The only assets of ZQX were shares of our common stock which were sold during fiscal year 2021, for which we received proceeds

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, as amended, will

expire on September

30, 2024 , with an

option to extend the lease an additional two years.

base rent is approximately $ 5,000

per month and the lease provides for annual increases

of approximately 3 %

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 set to expire on September 30, 2021 .

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

and an escalation clause for increases in certain operating costs.

The lease, as amended, resulted in a right-of-use asset and lease

liability of approximately $ 260,000

with a discount rate of 10 %.

Rent expense was approximately $ 66,000 and $ 64,000 , respectively, for the years ended October 31, 2022 and

Rent expense was approximately $ 66,000 for

each of the years ended October 31, 2023 and 2022.

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

The remaining

47 month lease term as of October 31, 2022 for the Company’s lease includes the noncancelable period of the lease and the additional

two-year option period that the Company believes it is reasonably certain to exercise.

All right-of-use assets are reviewed for impairment when indications of

impairment are present.

lease term as of October 31, 2023 for the Company’s lease includes the noncancelable period of the lease and the additional two-year

option period that the Company believes it is reasonably certain to exercise.

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

indications of impairment are present.

of October 31, 2023, the annual minimum lease payments of our operating lease liability were as follows (in thousands):

1 unchanged sentence

For Years Ending October 31,

Operating Leases

Total future minimum lease payments, undiscounted

Total future minimum lease

payments, undiscounted

Imputed interest

value of future minimum lease payments

AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

than lawsuits we bring to enforce our patent rights, we are not involved in any litigation or other legal proceedings and management

1 unchanged sentence

or financial condition.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Collaborative

Research and License Commitments

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

for the year ending October 31, 2023 were approximately $ 70,000 .

of Coronavirus Pandemic

extent to which the COVID-19 pandemic impacts our business, operations and financial results will depend on numerous evolving factors

that we may not be able to accurately predict, including:

the duration and scope of the pandemic;

governmental, business and individuals’

actions that have been and continue to be taken in response to the pandemic;

the impact of the pandemic on economic activity and actions

taken in response;

our ability to continue daily operations, including as a result of travel restrictions and people working from home;

the effect the pandemic may have on the ability to recruit patients to participate in our clinical trials;

and any closures of our and

our business partners’ offices and facilities.

the Company and its partners are not currently experiencing significant negative impact of COVID-19, there can be no assurance that the

current situation will continue.

Further, events such as natural disasters and public health emergencies divert our attention away from

normal operations and limited resources.

Our inability to timely resume normal operations following any pandemic disruption could adversely

affect our business, financial condition or results of operations in a material manner.

of October 31, 2023, our commitments under the license agreements with Wistar and Cleveland Clinic for the year ending October 31, 2024

were approximately $ 70,000 .

& Development Agreements

have entered into certain research and development agreements with various third-party vendors related to the manufacturing of materials

necessary for the expected Phase 2 clinical trial of our breast cancer vaccine.

As of October 31, 2023, future payments the Company may

make under these agreements may be approximately $ 3.5 million and such payments may be made over up to a five-year period.

tax provision (benefit) consists of the following:

OF INCOME TAX PROVISION (BENEFIT)

Year Ended October 31,

Ended October 31,

( 1,739,000 )

Adjustment to valuation allowance related

to net deferred tax assets

Income tax provision

( 1,021,000 )

Adjustment to valuation

allowance related to net deferred tax assets

BIOSCIENCES, INC.

5 unchanged sentences

Long-term deferred tax assets:

Federal and state NOL and tax credit carryforwards

state NOL and tax credit carryforwards

Deferred compensation

2 unchanged sentences

( 29,602,000 )

Deferred tax asset, net

of October 31, 2022, we had Federal tax net operating loss and tax credit carryforwards of approximately $ 91,947,000 and

$ 1,614,000 ,

tax asset, net

of October 31, 2023, we had Federal tax net operating loss and tax credit carryforwards of approximately $ 95,752,000

and $ 1,870,000 ,

respectively.

At the federal level, businesses can carry forward their net operating losses indefinitely, but the deductions are

limited to 80 percent of taxable income.

Prior to the Tax Cuts and Jobs Act (TCJA) of 2017, businesses could carry losses forward

for 20 years (without a deductibility limit).

If the tax benefits relating to deductions of option holders’ income are

ultimately realized, those benefits will be credited directly to additional paid-in capital.

Certain changes in stock ownership can

result in a limitation on the amount of net operating loss and tax credit carryovers that can be utilized each year.

As of October

31, 2022, management has not determined the extent of any such limitations, if any.

had California tax net operating loss carryforwards of approximately $ 42,712,000 as of October 31, 2022, available within statutory limits

( expiring at various dates between 2023 and 2042 ), to offset future corporate taxable income and taxes payable, if any, under certain

computations of such taxes.

have provided a 100 % valuation allowance against our deferred tax asset due to our current and historical pre-tax losses and the

uncertainty regarding their realizability.

The primary differences from the Federal statutory rate of 21 %

At the federal level, businesses can carry forward their net operating losses indefinitely, but the deductions are limited

to 80 percent of taxable income.

Prior to the Tax Cuts and Jobs Act (TCJA) of 2017, businesses could carry losses forward for 20 years

(without a deductibility limit).

If the tax benefits relating to deductions of option holders’ income are ultimately realized,

those benefits will be credited directly to additional paid-in capital.

Certain changes in stock ownership can result in a limitation

on the amount of net operating loss and tax credit carryovers that can be utilized each year.

As of October 31, 2023, management has

not determined the extent of any such limitations, if any.

had California tax net operating loss carryforwards of approximately $ 51,065,000

as of October 31, 2023, available within statutory

limits ( expiring

at various dates between 2024 and 2043 ), to offset

future corporate taxable income and taxes payable, if any, under certain computations of such taxes.

have provided a 100 %

valuation allowance against our deferred tax

asset due to our current and historical pre-tax losses and the uncertainty regarding their realizability.

The primary differences from

the Federal statutory rate of 21 %

and the effective rate of 0 %

is attributable to expiring net operating losses and a change in the valuation allowance.

The following is a reconciliation of

income taxes at the Federal statutory tax rate to income tax expense (benefit):

The following is a reconciliation of income

taxes at the Federal statutory tax rate to income tax expense (benefit):

OF RECONCILIATION OF INCOME TAXES

Year Ended October 31,

Ended October 31,

Income tax benefit at U.S.

Federal statutory income tax rate

statutory income tax rate

( 2,085,000 )

2 unchanged sentences

Permanent differences

Expiring net operating losses, credits and other

Change in valuation allowance

Income tax provision

the two fiscal years ended October 31, 2022, we incurred no Federal and no State income taxes.

We have no unrecognized tax benefits as

of October 31, 2022 and 2021 and we account for interest and penalties related to income tax matters in general and administrative expenses.

Tax years to which our net operating losses relate remain open to examination by Federal and California authorities to the extent which

the net operating losses have yet to be utilized.

Expiring net operating losses, credits and

Change in valuation

tax provision

BIOSCIENCES, INC.

1 unchanged sentence

TO CONSOLIDATED FINANCIAL STATEMENTS

the two fiscal years ended October 31, 2023, we incurred no Federal and no State income taxes.

unrecognized tax benefits as of October 31, 2023

and 2022 and we account for interest and penalties related to income tax matters in general and administrative expenses.

which our net operating losses relate remain open to examination by Federal and California authorities to the extent which the net operating

losses have yet to be utilized.

SEGMENT INFORMATION

follow the accounting guidance of ASC 280, Segment Reporting (“ASC 280”).

4 unchanged sentences

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 years ended October 31,

2022 and 2021:

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)

The following represents selected financial information for our segments for the years ended October 31, 2023 and 2022:

OF SEGMENT INFORMATION

Year Ended October 31,

Ended October 31,

Net income (loss):

2 unchanged sentences

Anti-Viral Therapeutics

Net income (loss)

income (loss)

Total operating costs and expenses

Less non-cash share-based compensation

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

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

Less non-cash share-based

costs and expenses excluding non-cash share-based compensation

Operating costs and expenses excluding non-cash

share based compensation:

CAR-T Therapeutics

1 unchanged sentence

Anti-Viral Therapeutics

Operating costs and expenses excluding non-cash share based compensation

costs and expenses excluding non-cash share based compensation

Total assets:

4 unchanged sentences

the enterprise.

Company’s consolidated revenue of $ 512,000 and inventor royalties, contingent legal fees, litigation and licensing expense of $ 385,000 ,

for the year ended October 31, 2021 were solely related to our patent licensing segment.

All our revenue is generated domestically (United

States) based on the country in which the licensee is located.

Company’s consolidated revenue of $ 210,000

and inventor royalties, contingent legal fees, litigation and

licensing expense of $ 161,000 ,

for the year ended October 31, 2023 were solely related to our other segment.

All our revenue is generated domestically (United States)

based on the country in which the licensee is located.

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 9A. Controls and Procedures