Anixa Biosciences(ANIX) - 2024 Q3 - Quarterly Report

Revenue and Financial Performance - Revenue for the three months ended July 31, 2024 and 2023 was $0, with no significant revenue expected from legacy patent licensing activities[86][95] - Revenue recognition is based on one-time, paid-up license fees, with 100% of revenue recognized upon execution of licensing agreements[111] Research and Development Expenses - Research and development expenses increased by $837,000 to $1,925,000 in Q3 2024, driven by higher expenses in breast cancer vaccine ($694,000) and CAR-T therapeutics ($235,000) programs[89] - Research and development expenses for the nine months ended July 31, 2024 totaled $4,920,000, a $1,766,000 increase from 2023, driven by breast cancer vaccine ($1,088,000) and CAR-T therapeutics ($642,000) programs[99] - Research and development expenses are recognized as incurred, with advance payments deferred and expensed as services are performed[117] - Preclinical and clinical trial expenses are recognized based on services performed under contracts with research institutions, CROs, and CMOs[117] - Management estimates prepaid and accrued R&D costs by discussing progress with internal and external service providers and comparing to payments and invoices[118] - Internal compensation costs are allocated to R&D expenses based on management's estimates of employee time and effort[118] General and Administrative Expenses - General and administrative expenses decreased by $89,000 to $1,667,000 in Q3 2024, primarily due to reduced director stock option compensation ($97,000) and director fees ($53,000)[90] - General and administrative expenses for the nine months ended July 31, 2024 increased by $893,000 to $5,748,000, primarily due to higher investor and public relations expenses ($611,000) and employee stock option compensation ($128,000)[100] Interest Income and Investments - Interest income decreased by $19,000 to $277,000 in Q3 2024 due to lower average short-term investment balances, despite higher interest rates[92] - Interest income for the nine months ended July 31, 2024 increased by $132,000 to $883,000 due to higher interest rates and increased short-term investment balances[101] - Cash, cash equivalents, and short-term investments decreased by $3,099,000 to $20,745,000 as of July 31, 2024, with the company raising $2,984,000 through an at-the-market equity offering[104][106] Cash Reserves and Funding - The company expects its current cash reserves to fund operations for at least the next 12 months, with the ability to raise an additional $97 million through its at-the-market equity program[104] Stock Option Valuation and Assumptions - The company uses the Black-Scholes pricing model and Monte Carlo Simulation to estimate fair value, requiring assumptions on expected term, volatility, risk-free interest rates, and dividend yield[115] - The expected term for employee stock options is determined using a simplified method, combining vesting and contractual terms, due to operational changes impacting historical performance[115] - The company estimates expected volatility based on historical share price volatility over a period equal to the expected term of the grants[115] - The risk-free interest rate is estimated using the implied yield of U.S. Treasury notes with terms matching the expected term of the grants[115] - The company assumes no dividend yield based on its history and expectation of not paying dividends in the future[115] Disclosure Controls and Procedures - The company's disclosure controls and procedures were deemed effective as of the end of the reporting period[120]