Anixa Biosciences(ANIX) - 2021 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements This section presents the unaudited condensed consolidated financial statements for the three and six months ended April 30, 2021, and 2020, detailing financial position, operational results, and cash flows Condensed Consolidated Balance Sheets The balance sheet as of April 30, 2021, reflects a substantial strengthening of the company's financial position, driven by significant increases in cash, investments, and equity from recent capital raises | Financial Metric | April 30, 2021 (Unaudited) | October 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $27,703,435 | $6,417,061 | | Total current assets | $38,471,948 | $9,368,624 | | Total assets | $38,497,522 | $9,452,964 | | Total current liabilities | $1,442,871 | $1,188,591 | | Total shareholders' equity | $37,613,758 | $8,761,356 | Condensed Consolidated Statements of Operations The company reported no revenue for the three months ended April 30, 2021, but recognized $512,500 in six-month revenue from a licensing agreement, with net loss and loss per share improving year-over-year | Metric | Three Months Ended April 30, 2021 | Three Months Ended April 30, 2020 | | :--- | :--- | :--- | | Revenue | $ - | $ - | | Loss from operations | $(2,437,282) | $(2,670,137) | | Net loss attributable to common shareholders | $(2,398,851) | $(2,640,093) | | Net loss per share (Basic and diluted) | $(0.08) | $(0.12) | | Metric | Six Months Ended April 30, 2021 | Six Months Ended April 30, 2020 | | :--- | :--- | :--- | | Revenue | $512,500 | $ - | | Loss from operations | $(4,670,413) | $(5,300,006) | | Net loss attributable to common shareholders | $(4,607,142) | $(5,232,636) | | Net loss per share (Basic and diluted) | $(0.17) | $(0.25) | Condensed Consolidated Statements of Shareholders' Equity Shareholders' equity significantly increased to $37.1 million by April 30, 2021, primarily driven by approximately $31.1 million in net proceeds from public and at-the-market offerings - Completed a public offering in March 2021, selling 4,285,715 shares and raising net proceeds of approximately $20.3 million[10][13][42] - Raised net proceeds of approximately $10.8 million from an at-the-market (ATM) offering during the six months ended April 30, 2021[14] Condensed Consolidated Statements of Cash Flows For the six months ended April 30, 2021, cash used in operating and investing activities was significantly offset by $31.4 million provided by financing activities, resulting in a net increase of $21.3 million in cash and cash equivalents | Cash Flow Activity (Six Months Ended April 30) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,411,946) | $(3,470,654) | | Net cash used in investing activities | $(7,723,853) | $(285,791) | | Net cash provided by financing activities | $31,422,173 | $3,153,017 | | Net increase (decrease) in cash | $21,286,374 | $(603,428) | | Cash and cash equivalents at end of period | $27,703,435 | $2,888,197 | Notes to Condensed Consolidated Financial Statements The notes detail the company's primary focus on developing oncology and infectious disease therapies and vaccines, outlining collaborations, clinical trial progress, financing activities, and segment-level financial data - The company's primary operations involve developing therapies and vaccines for oncology (CAR-T for ovarian cancer, vaccines for breast and ovarian cancer) and infectious diseases (COVID-19 therapeutics)[19] - An Investigational New Drug (IND) application for the CAR-T ovarian cancer therapy was submitted to the FDA in March 2021; the company is addressing an FDA information request and anticipates beginning clinical trials in Q4 2021[21] - Received FDA authorization in December 2020 to begin a Phase 1a clinical trial for a breast cancer vaccine, with the first patient expected to be treated in July 2021[26] - The company manages five reportable segments: CAR-T Therapeutics, Cancer Vaccines, Anti-Viral Therapeutics, Cancer Diagnostics, and Patent Licensing; for the six months ended April 30, 2021, CAR-T Therapeutics incurred the highest operating costs excluding non-cash compensation ($1.49 million)[94][95] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial results, noting decreased R&D expenses due to program suspension, $513,000 in licensing revenue, and confirming sufficient liquidity for the next twelve months due to recent financing activities - For the six months ended April 30, 2021, the company recorded revenue of approximately $513,000 from one license agreement[106] - Research and development expenses for the six months ended April 30, 2021 decreased by approximately $869,000 compared to the prior year, primarily due to the suspension of the cancer diagnostics program[110] - The company believes its existing cash, cash equivalents, and short-term investments are sufficient to fund activities for at least the next twelve months, supported by approximately $31.1 million in net proceeds from a public offering and an at-the-market program in H1 2021[116] - Management identifies Revenue Recognition and Stock-Based Compensation as its most critical accounting policies, which require significant judgments and estimates[120] Quantitative and Qualitative Disclosures About Market Risk The company's market risk is limited to interest rate risk on its short-term, fixed-rate, and highly liquid investments, which could affect future returns upon reinvestment - The company's investments consist of short-term, fixed-rate, and highly liquid instruments, which are subject to interest rate risk that could affect returns upon reinvestment[128] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of April 30, 2021, with no material changes to internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures are effective as of the end of the reporting period[129] - No material changes were made to the company's internal control over financial reporting during the second quarter of fiscal year 2021[129] PART II. OTHER INFORMATION Legal Proceedings The company is not involved in any litigation or other legal proceedings that would have a material adverse effect on its financial condition or results of operations - The company is not involved in any material litigation or legal proceedings[131] Risk Factors There have been no material changes to the company's risk factors from those disclosed in its Annual Report on Form 10-K for the fiscal year ended October 31, 2020 - No material changes in risk factors have occurred since the fiscal year 2020 Form 10-K filing[132] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[132] Exhibits This section lists the exhibits filed with the Form 10-Q, including an assignment agreement, an amendment to a collaboration agreement, and CEO/CFO certifications - Filed exhibits include an Assignment Agreement with OntoChem GmbH and MolGenie GmbH, and CEO/CFO certifications pursuant to the Sarbanes-Oxley Act[133] Signatures - The report was signed on June 10, 2021, by Dr. Amit Kumar, Chairman, President and CEO, and Michael J. Catelani, COO and CFO[135]