Anixa Biosciences(ANIX) - 2024 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements The company reported no revenue and a $6.47 million net loss for the six months ended April 30, 2024, with total assets at $24.36 million and $3.77 million cash used in operations Condensed Consolidated Balance Sheets Total assets decreased to $24.36 million as of April 30, 2024, from $25.52 million at October 31, 2023, with total liabilities and equity also declining Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | April 30, 2024 | October 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $995 | $915 | | Short-term investments | $22,244 | $22,929 | | Total current assets | $24,214 | $25,356 | | Total assets | $24,355 | $25,522 | | Total current liabilities | $1,681 | $2,028 | | Total liabilities | $1,774 | $2,151 | | Total equity | $22,581 | $23,371 | Condensed Consolidated Statements of Operations The company reported no revenue for the three and six months ended April 30, 2024, with net loss widening to $3.18 million for the quarter and $6.47 million for the six months due to increased expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | Six Months Ended April 30, 2024 | Six Months Ended April 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $0 | $210 | $0 | $210 | | Research and development expenses | $1,646 | $998 | $2,995 | $2,066 | | General and administrative expenses | $1,821 | $1,611 | $4,081 | $3,099 | | Loss from operations | ($3,467) | ($2,560) | ($7,076) | ($5,116) | | Net loss | ($3,180) | ($2,307) | ($6,470) | ($4,661) | | Net loss per share (Basic & Diluted) | ($0.10) | ($0.07) | ($0.20) | ($0.15) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities increased to $3.77 million for the six months ended April 30, 2024, while investing activities provided $685,000 and financing activities provided $3.16 million Cash Flow Summary for the Six Months Ended April 30 (in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($3,765) | ($2,795) | | Net cash provided by (used in) investing activities | $685 | ($4,029) | | Net cash provided by financing activities | $3,160 | $84 | | Net increase (decrease) in cash | $80 | ($6,740) | Notes to Condensed Consolidated Financial Statements The notes detail the company's focus on oncology vaccines and therapies, progress in Phase 1 clinical trials for breast cancer vaccine and CAR-T therapy, a new development agreement with Cleveland Clinic, and increased operating costs across its CAR-T Therapeutics and Cancer Vaccines segments - Anixa is a biotechnology company focused on developing vaccines and therapies for oncology, including a preventative vaccine for Triple Negative Breast Cancer (TNBC) and ovarian cancer, and a CAR-T therapy for ovarian cancer[23] - The Phase 1 clinical trial for the breast cancer vaccine is ongoing, with patient dosing commenced in October 2021, expanding to multiple cohorts[25] - The Phase 1 clinical trial for the CAR-T therapy for ovarian cancer is underway, with the first two patients in the second, higher-dose cohort treated in February and May 2024[31] - In May 2024, the company entered a Joint Development and Option Agreement with Cleveland Clinic to develop additional cancer vaccines for high-incidence malignancies[29][83] Segment Net Loss for Six Months Ended April 30 (in thousands) | Segment | 2024 | 2023 | | :--- | :--- | :--- | | CAR-T Therapeutics | ($2,970) | ($1,908) | | Cancer Vaccines | ($3,469) | ($1,871) | | Other | ($31) | ($882) | | Total | ($6,470) | ($4,661) | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the increased net loss to higher R&D and G&A expenses, driven by advancing CAR-T and breast cancer vaccine programs and increased investor relations, while $23.2 million in cash and investments are deemed sufficient for the next twelve months, supported by a $3.0 million ATM offering Results of Operations For the six months ended April 30, 2024, the company reported no revenue, with R&D expenses increasing by $0.93 million and G&A expenses rising by $0.98 million, primarily due to program advancements and investor relations costs - The company had no revenue in the three and six months ended April 30, 2024, compared to $210,000 in prior-year periods from a one-time license agreement[88][98] - For the six months ended April 30, 2024, the $929,000 increase in R&D expenses was primarily due to higher outside research costs for the CAR-T therapeutics program (approx. $407,000) and the breast cancer vaccine program (approx. $394,000)[103] - The $982,000 increase in G&A expenses for the six-month period was mainly due to a $579,000 increase in investor and public relations expenses[104] Liquidity and Capital Resources The company believes its $23.2 million in cash, cash equivalents, and short-term investments are sufficient for the next twelve months, having raised approximately $3.0 million, net of expenses, through an at-the-market equity offering - Management believes existing cash, cash equivalents, and short-term investments are sufficient to fund activities for at least the next twelve months[109] - Raised approximately $3,029,000, net of expenses, through an at-the-market equity offering during the six months ended April 30, 2024[109][110] - Cash, cash equivalents, and short-term investments decreased by approximately $605,000 to $23,239,000 at April 30, 2024, from the end of fiscal year 2023[110] Item 3. 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, potentially affecting the rate of return upon reinvestment - The company's primary market risk is related to changes in interest rates, which could affect the rate of return on its short-term, fixed-rate investments at the time of reinvestment[125] Item 4. Controls and Procedures Management, including the CEO and CFO, deemed the company's disclosure controls and procedures effective as of April 30, 2024, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of the end of the period covered by the report[126] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[126] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not a party to any material pending legal proceedings, except for lawsuits related to patent enforcement - Other than lawsuits related to patent enforcement, the company is not a party to any material pending legal proceedings[127] Item 1A. Risk Factors No material changes have occurred in the company's risk factors since its Annual Report on Form 10-K for the fiscal year ended October 31, 2023 - No material changes have occurred in the company's risk factors since its last Annual Report on Form 10-K[128] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the six months ended April 30, 2024, the company issued 29,336 shares of common stock for investor relations services under a Section 4(a)(2) exemption - In the six months ended April 30, 2024, the company issued 29,336 shares of common stock as payment for investor relations services[129]