Anixa Biosciences(ANIX) - 2025 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements. This section presents Anixa Biosciences' unaudited consolidated financial statements and notes for Q3 2025 and FY2024 Condensed Consolidated Balance Sheets (Unaudited) (in thousands) | Item | July 31, 2025 | October 31, 2024 | | :-------------------------------- | :------------ | :--------------- | | ASSETS | | | | Cash and cash equivalents | $1,495 | $1,271 | | Short-term investments | $14,534 | $18,653 | | Total current assets | $17,449 | $21,362 | | Total assets | $17,651 | $21,591 | | LIABILITIES AND EQUITY | | | | Total current liabilities | $2,066 | $2,500 | | Total liabilities | $2,240 | $2,703 | | Total shareholders' equity | $16,595 | $19,998 | | Total equity | $15,411 | $18,888 | - Total assets decreased from $21,591 thousand as of October 31, 2024, to $17,651 thousand as of July 31, 2025, a reduction of approximately 18.2%[13] - Total equity decreased from $18,888 thousand as of October 31, 2024, to $15,411 thousand as of July 31, 2025, a reduction of approximately 18.4%[13] Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except per share data) | Item | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $0 | $0 | $0 | $0 | | Research and development expenses | $1,055 | $1,925 | $3,929 | $4,920 | | General and administrative expenses | $1,381 | $1,667 | $4,896 | $5,748 | | Total operating expenses | $2,436 | $3,592 | $8,825 | $10,668 | | Loss from operations | $(2,436) | $(3,592) | $(8,825) | $(10,668) | | Interest income | $156 | $277 | $519 | $883 | | Net loss | $(2,280) | $(3,315) | $(8,306) | $(9,785) | | Net loss attributable to common shareholders | $(2,258) | $(3,277) | $(8,232) | $(9,671) | | Basic and diluted net loss per common share | $(0.07) | $(0.10) | $(0.25) | $(0.30) | - The company reported no revenue for both the three and nine months ended July 31, 2025 and 2024[15] - Net loss attributable to common shareholders decreased by approximately 31.1% for the three months ended July 31, 2025, to $(2,258) thousand from $(3,277) thousand in the prior year period. For the nine months, it decreased by approximately 14.9% to $(8,232) thousand from $(9,671) thousand[15] Condensed Consolidated Statements of Equity (Unaudited) - Three Months Changes in Total Equity (in thousands) for the Three Months Ended July 31 | Item | 2025 | 2024 | | :------------------------------------------------ | :----- | :----- | | Balance, April 30 | $14,906 | $22,581 | | Stock option compensation to employees and directors | $829 | $1,094 | | Common stock issued in at-the-market offering, net | $1,928 | $(45) | | Net loss | $(2,280) | $(3,315) | | Balance, July 31 | $15,411 | $20,691 | - Total equity decreased from $20,691 thousand as of July 31, 2024, to $15,411 thousand as of July 31, 2025, for the three-month period[18][20] - The company issued 596,974 shares of common stock in an at-the-market offering, generating $1,928 thousand net of expenses, during the three months ended July 31, 2025[18] Condensed Consolidated Statements of Equity (Unaudited) - Nine Months Changes in Total Equity (in thousands) for the Nine Months Ended July 31 | Item | 2025 | 2024 | | :------------------------------------------------ | :----- | :----- | | Balance, October 31 | $18,888 | $23,371 | | Stock option compensation to employees and directors | $2,822 | $3,440 | | Common stock issued in at-the-market offering, net | $1,924 | $2,984 | | Net loss | $(8,306) | $(9,785) | | Balance, July 31 | $15,411 | $20,691 | - Total equity decreased from $20,691 thousand as of July 31, 2024, to $15,411 thousand as of July 31, 2025, for the nine-month period[22][24] - The company issued 611,686 shares of common stock in an at-the-market offering, generating $1,924 thousand net of expenses, during the nine months ended July 31, 2025[22] Condensed Consolidated Statements of Cash Flows (Unaudited) Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) for the Nine Months Ended July 31 | Cash Flow Activity | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Net cash used in operating activities | $(5,918) | $(6,408) | | Net cash provided by investing activities | $4,212 | $3,409 | | Net cash provided by financing activities | $1,930 | $3,309 | | Net increase in cash and cash equivalents | $224 | $310 | | Cash and cash equivalents at end of period | $1,495 | $1,225 | - Net cash used in operating activities decreased by approximately 7.6% to $(5,918) thousand for the nine months ended July 31, 2025, compared to $(6,408) thousand in the prior year[26] - Net cash provided by investing activities increased by approximately 23.6% to $4,212 thousand for the nine months ended July 31, 2025, primarily due to proceeds from maturities of short-term investments[26] Notes to Condensed Consolidated Financial Statements (Unaudited) 1. BUSINESS AND FUNDING Anixa Biosciences develops oncology therapies and vaccines, leveraging collaborations and existing capital for funding - Anixa Biosciences is a biotechnology company developing therapies and vaccines for oncology, including CAR-T cell therapy for ovarian cancer and vaccines for breast and ovarian cancers[29] - The CAR-T therapy for ovarian cancer is in a Phase 1 dose-escalation clinical trial, with patients in the fourth dose cohort (30x higher dose) showing well-tolerated treatment as of September 2025. Anecdotal signs of efficacy, including T cell infiltration and tumor necrosis, have been observed[31][32][33] - The breast cancer vaccine is in a fully enrolled Phase 1 clinical trial (funded by a U.S. Department of Defense grant), with antigen-specific immune responses observed across all dose levels and patient groups (early-stage TNBC, high-risk BRCA/PALB2 mutation carriers, and post-operative TNBC with residual disease). Final Phase 1 data is anticipated in December 2025, with preparations for a Phase 2 trial underway[35] - The ovarian cancer vaccine technology has been accepted into the NCI's PREVENT program, which will fund and perform virtually all pre-clinical R&D, manufacturing, and IND-enabling studies without material financial expenditures by Anixa[37] - The company believes existing cash, cash equivalents, and short-term investments of approximately $16,029,000 as of July 31, 2025, are sufficient to fund activities for significantly longer than 12 months[41] 2. SIGNIFICANT ACCOUNTING POLICIES This section details the company's significant accounting policies for financial statements, revenue, R&D, and investments - Noncontrolling interest represents Wistar's 4.1% equity ownership in Certainty Therapeutics as of July 31, 2025, and is presented as a component of equity[30][43] - Revenue is derived solely from technology licensing and patent sales, recognized upon transfer of control of intellectual property rights. No revenue has been generated from vaccine or therapeutics programs to date[40][44] - Research and development expenses are recognized as incurred, including employee compensation and payments to third parties for R&D activities, preclinical studies, and clinical trials[48] - The investment policy allows for U.S. government debt securities (held-to-maturity at amortized cost) and Bitcoin Assets (measured at fair value with changes recognized in the statement of operations)[51][52] 3. STOCK-BASED COMPENSATION This section details the company's stock-based compensation, covering equity plans, options, warrants, and accounting methods Stock-Based Compensation Expense (in thousands) | Period | Employees & Directors | Consultants | Total | | :--------------------------- | :-------------------- | :---------- | :---- | | 3 Months Ended July 31, 2025 | $829 | $26 | $855 | | 3 Months Ended July 31, 2024 | $1,094 | $23 | $1,117 | | 9 Months Ended July 31, 2025 | $2,822 | $77 | $2,899 | | 9 Months Ended July 31, 2024 | $3,440 | $101 | $3,541 | - For the nine months ended July 31, 2025, 1,430,000 stock options were granted to employees and consultants, with exercise prices ranging from $2.37 to $3.07 per share[56] - As of July 31, 2025, there were 12,476,094 options outstanding under the 2018 Share Plan and 986,283 options outstanding under the 2010 Share Plan[59][60] - The company had 300,000 warrants outstanding as of July 31, 2025, to purchase common stock at $6.56 per share, expiring March 22, 2026[62][63] 4. FAIR VALUE MEASUREMENTS This section describes the company's fair value measurements for financial assets and liabilities using a three-level hierarchy Financial Assets Measured at Fair Value (in thousands) as of July 31, 2025 | Item | Level 1 | Level 2 | Level 3 | Total | | :-------------------------- | :------ | :------ | :------ | :------ | | Money market funds | $1,448 | $- | $- | $1,448 | | Bitcoin exchange traded funds | $- | $12 | $- | $12 | | U.S. treasury bills | $- | $14,522 | $- | $14,522 | | Total financial assets | $1,448 | $14,534 | $- | $15,982 | Financial Assets Measured at Fair Value (in thousands) as of October 31, 2024 | Item | Level 1 | Level 2 | Level 3 | Total | | :-------------------------- | :------ | :------ | :------ | :------ | | Money market funds | $1,170 | $- | $- | $1,170 | | U.S. treasury bills | $- | $18,653 | $- | $18,653 | | Total financial assets | $1,170 | $18,653 | $- | $19,823 | - The company's financial assets primarily consist of money market funds (Level 1) and U.S. treasury bills (Level 2), with a small amount in Bitcoin exchange traded funds (Level 2) as of July 31, 2025[70] 5. ACCRUED EXPENSES This section details accrued expenses, including payroll, royalties, and legal fees, for July 31, 2025, and October 31, 2024 Accrued Expenses (in thousands) | Item | July 31, 2025 | October 31, 2024 | | :------------------------------ | :------------ | :--------------- | | Payroll and related expenses | $865 | $1,126 | | Accrued royalty and contingent legal fees | $626 | $626 | | Accrued other | $260 | $194 | | Total Accrued expenses | $1,751 | $1,946 | - Total accrued expenses decreased by approximately 10% from $1,946 thousand as of October 31, 2024, to $1,751 thousand as of July 31, 2025, primarily due to a decrease in payroll and related expenses[72] 6. NET LOSS PER SHARE OF COMMON STOCK This section explains basic and diluted net loss per common share, where diluted equals basic due to anti-dilutive equivalents - Basic and diluted net loss per common share were $(0.07) for the three months ended July 31, 2025, and $(0.25) for the nine months ended July 31, 2025[15] - Stock options (13,462,377 shares) and warrants (300,000 shares) were excluded from the diluted EPS calculation for the nine months ended July 31, 2025, as their inclusion would be anti-dilutive[73] 7. EFFECT OF RECENTLY ADOPTED AND ISSUED PRONOUNCEMENTS This section discusses recent FASB pronouncements on Segment Reporting, Income Taxes, and Expense Disaggregation, with impact under evaluation - FASB issued ASU 2023-07 (Segment Reporting) effective for fiscal years beginning after December 15, 2023, requiring more disaggregated expense information for reportable segments[74] - FASB issued ASU 2023-09 (Income Taxes) effective for fiscal years beginning after December 15, 2024, requiring disaggregated effective tax rate reconciliation and income taxes paid information[75] - FASB issued ASU 2024-03 (Expense Disaggregation Disclosures) effective for fiscal years beginning after December 15, 2026, to improve disclosures about expense types[76] 8. INCOME TAXES This section addresses income tax accounting, deferred tax assets, valuation allowances, and net operating loss carryforward limitations - A full valuation allowance has been provided against deferred tax assets due to historical pre-tax losses and uncertainty of realization[77] - The company has substantial net operating loss carryforwards for Federal and California income tax returns, which could be subject to limitations under Internal Revenue Code section 382[78] 9. LEASES This section details the company's operating lease for executive offices, expiring September 30, 2027, and future payments - The company leases approximately 2,000 square feet of office space, with the lease expiring on September 30, 2027, and an option for a two-year extension[79] Annual Minimum Future Lease Payments (in thousands) as of July 31, 2025 | For Years Ended October 31, | Operating Leases | | :-------------------------- | :--------------- | | 2025 (remaining) | $15 | | 2026 | $63 | | 2027 | $64 | | 2028 | $66 | | 2029 | $63 | | Total future minimum lease payments, undiscounted | $271 | | Present value of future minimum lease payments | $213 | 10. COMMITMENTS AND CONTINGENCES This section outlines commitments and contingencies, including legal proceedings, license, and R&D agreement payments - The company is not a party to any material pending legal proceedings, other than patent enforcement lawsuits[82] - As of July 31, 2025, license commitments for the next twelve months were approximately $150,000[83] - Future payments under research & development agreements may be approximately $1.8 million over up to a three-year period, dependent on development milestones[84] 11. SEGMENT INFORMATION This section provides financial information for Cancer Vaccines, CAR-T Therapeutics, and Other segments, including net loss and assets Net Loss by Segment (in thousands) for the Nine Months Ended July 31 | Segment | 2025 | 2024 | | :----------------- | :----- | :----- | | Cancer Vaccines | $(5,195) | $(5,628) | | CAR-T Therapeutics | $(3,074) | $(4,115) | | Other | $(37) | $(42) | | Total | $(8,306) | $(9,785) | Total Assets by Segment (in thousands) | Segment | July 31, 2025 | October 31, 2024 | | :----------------- | :------------ | :--------------- | | Cancer Vaccines | $9,842 | $12,917 | | CAR-T Therapeutics | $7,691 | $8,535 | | Other | $118 | $139 | | Total | $17,651 | $21,591 | - Operating costs and expenses excluding non-cash stock-based compensation decreased across all segments for the nine months ended July 31, 2025, compared to the prior year, with Cancer Vaccines decreasing by $274 thousand and CAR-T Therapeutics by $763 thousand[85] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. This section analyzes financial condition, operations, liquidity, capital resources, and critical accounting policies for Q3 2025 and FY2024 GENERAL The company's business description is discussed in the Notes to the Condensed Consolidated Financial Statements - The company's business description is discussed in the Notes to the Condensed Consolidated Financial Statements[88] RESULTS OF OPERATIONS Three months ended July 31, 2025 compared with three months ended July 31, 2024 Revenue The company generated no revenue during the three months ended July 31, 2025 and 2024 - The company generated no revenue during the three months ended July 31, 2025 and 2024[89] - Revenue from current therapy or vaccine programs is not expected in the near term, with a long-term goal of licensing technologies to large pharmaceutical companies[90] Research and Development Expenses Research and Development Expenses (in thousands) | Period | 2025 | 2024 | Change | | :--------------------------- | :----- | :----- | :----- | | 3 Months Ended July 31 | $1,055 | $1,925 | $(870) | | Cancer Vaccines | $615 | $1,259 | $(644) | | CAR-T Therapeutics | $440 | $666 | $(226) | - The decrease in R&D expenses was primarily due to a $631 thousand decrease in breast cancer vaccine expenses, a $170 thousand decrease in ovarian cancer CAR-T therapeutic expenses, and a $106 thousand decrease in employee stock-based compensation[93] General and Administrative Expenses General and Administrative Expenses (in thousands) | Period | 2025 | 2024 | Change | | :--------------------------- | :----- | :----- | :----- | | 3 Months Ended July 31 | $1,381 | $1,667 | $(286) | - The decrease was mainly driven by a $98 thousand decrease in director stock-based compensation, a $94 thousand decrease in investor and public relations expense, and a $77 thousand decrease in employee compensation[94] Interest Income Interest Income (in thousands) | Period | 2025 | 2024 | Change | | :--------------------------- | :----- | :----- | :----- | | 3 Months Ended July 31 | $156 | $277 | $(121) | - The decrease in interest income was primarily due to a lower amount of short-term investments held and a decrease in interest rates[95] Net Loss Attributable to Noncontrolling Interest Net Loss Attributable to Noncontrolling Interest (in thousands) | Period | 2025 | 2024 | Change | | :--------------------------- | :----- | :----- | :----- | | 3 Months Ended July 31 | $(22) | $(38) | $16 | - The decrease in net loss attributable to noncontrolling interest was due to a decrease in Certainty's net loss[96] Nine months ended July 31, 2025 compared with nine months ended July 31, 2024 Revenue The company generated no revenue during the nine months ended July 31, 2025 and 2024 - The company generated no revenue during the nine months ended July 31, 2025 and 2024[97] - Revenue from current therapy or vaccine programs is not expected in the near term, with a long-term goal of licensing technologies to large pharmaceutical companies[98] Research and Development Expenses Research and Development Expenses (in thousands) | Period | 2025 | 2024 | Change | | :--------------------------- | :----- | :----- | :----- | | 9 Months Ended July 31 | $3,929 | $4,920 | $(991) | | Cancer Vaccines | $2,489 | $2,827 | $(338) | | CAR-T Therapeutics | $1,440 | $2,093 | $(653) | - The decrease in R&D expenses was primarily due to a $524 thousand decrease in breast cancer vaccine expenses, a $402 thousand decrease in ovarian cancer CAR-T therapeutic expenses, and a $271 thousand decrease in employee stock-based compensation[100] - These decreases were partially offset by a $113 thousand increase in expenses for the new vaccine discovery program and a $56 thousand increase in technology licensing fees[100] General and Administrative Expenses General and Administrative Expenses (in thousands) | Period | 2025 | 2024 | Change | | :--------------------------- | :----- | :----- | :----- | | 9 Months Ended July 31 | $4,896 | $5,748 | $(852) | - The decrease was mainly due to a $478 thousand decrease in investor and public relations expense, a $280 thousand decrease in director stock-based compensation, and a $68 thousand decrease in employee stock-based compensation[101] Interest Income Interest Income (in thousands) | Period | 2025 | 2024 | Change | | :--------------------------- | :----- | :----- | :----- | | 9 Months Ended July 31 | $519 | $883 | $(364) | - The decrease in interest income was primarily due to a lower amount of short-term investments held and a decrease in interest rates[102] Net Loss Attributable to Noncontrolling Interest Net Loss Attributable to Noncontrolling Interest (in thousands) | Period | 2025 | 2024 | Change | | :--------------------------- | :----- | :----- | :----- | | 9 Months Ended July 31 | $(74) | $(114) | $40 | - The decrease in net loss attributable to noncontrolling interest was due to a decrease in Certainty's net loss[103] LIQUIDITY AND CAPITAL RESOURCES This section discusses liquidity from cash and investments, detailing cash flow activities for the nine months ended July 31, 2025 - As of September 10, 2025, the company believes its $16,029,000 in cash, cash equivalents, and short-term investments (as of July 31, 2025) are sufficient to fund activities for significantly longer than 12 months[41][105] - During the nine months ended July 31, 2025, the company raised approximately $1,924,000 (net of expenses) through an at-the-market equity offering of 611,686 shares[41][105] Cash Flow Summary (in thousands) for the Nine Months Ended July 31, 2025 | Activity | Amount | | :------------------------------------ | :----- | | Cash used in operating activities | $(5,918) | | Cash provided by investing activities | $4,212 | | Cash provided by financing activities | $1,930 | | Net decrease in cash, cash equivalents, and short-term investments | $(3,895) | | Cash, cash equivalents, and short-term investments at July 31, 2025 | $16,029 | CRITICAL ACCOUNTING POLICIES This section highlights critical accounting policies for revenue, stock-based compensation, and R&D expenses - Critical accounting policies include Revenue Recognition, Stock-Based Compensation, and Research and Development Expenses, which require significant assumptions, judgments, and estimates[107][113] - Revenue from technology licensing and patent sales is recognized upon transfer of control of intellectual property rights, involving judgments on contract existence, performance obligations, and transaction price allocation[108][109][110] - Stock-based compensation expense is measured at grant date fair value using the Black-Scholes pricing model or Monte Carlo Simulation, with assumptions for expected term, volatility, risk-free interest rates, and dividend yield[111][112][114] - Research and development expenses are recognized as incurred, with estimates for preclinical studies and clinical trial expenses based on services performed and stage of completion[116][117][118] EFFECT OF RECENTLY ISSUED PRONOUNCEMENTS - The effect of recently issued pronouncements is discussed in Note 7 of the condensed consolidated financial statements[119] Item 3. Quantitative and Qualitative Disclosures About Market Risk. This section states that there are no applicable quantitative and qualitative disclosures about market risk for the company - The company has no applicable quantitative and qualitative disclosures about market risk[120] Item 4. Controls and Procedures. Management confirmed effective disclosure controls and procedures as of July 31, 2025, with no material internal control changes - Disclosure controls and procedures were evaluated and deemed effective as of July 31, 2025[120] - No material changes in internal control over financial reporting occurred during the three months ended July 31, 2025[121] PART II. OTHER INFORMATION Item 1. Legal Proceedings. The company is not a party to any material legal proceedings, except for patent enforcement lawsuits - The company is not involved in any material pending legal proceedings, other than those related to patent rights enforcement[123] Item 1A. Risk Factors. No material changes to risk factors have occurred since the Annual Report on Form 10-K for fiscal year ended October 31, 2024 - No material changes to risk factors have occurred since the Annual Report on Form 10-K for the fiscal year ended October 31, 2024[124] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. This section reports that there were no unregistered sales of equity securities or use of proceeds during the period - There were no unregistered sales of equity securities or use of proceeds[125] Item 3. Defaults Upon Senior Securities. This section states that there were no defaults upon senior securities during the period - There were no defaults upon senior securities[126] Item 4. Mine Safety Disclosures. This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[126] Item 5. Other Information. This section reports that there is no other information to disclose - No other information to disclose[125] Item 6. Exhibits. This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and Inline XBRL documents - Exhibits include certifications from the CEO and CFO (Sections 302 and 1350), and various Inline XBRL documents[125] SIGNATURES This section contains the signatures of the registrant's authorized officers, confirming the filing of the report - The report is signed by Dr. Amit Kumar, Chairman and Chief Executive Officer, and Michael J. Catelani, President, Chief Operating Officer and Chief Financial Officer, on September 10, 2025[129]