UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______

Commission file number 001-37492

ANIXA BIOSCIENCES, INC.

(Exact name of registrant as specified in its charter)

Delaware		11-2622630
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

3150 Almaden Expressway, Suite 250
San Jose, CA		95118
(Address of principal executive offices)		(Zip Code)

(408) 708-9808

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol		Name of exchange on which registered
Common Stock, par value $.01 per share		ANIX		NASDAQ Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐				Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

On June 10, 2022 the registrant had outstanding 30,471,001 shares of Common Stock, par value $.01 per share, which is the registrant’s only class of common stock.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

	Condensed Consolidated Balance Sheets as of April 30, 2022 (Unaudited) and October 31, 2021	1

	Condensed Consolidated Statements of Operations (Unaudited) for the three and six months ended April 30, 2022 and 2021	2

	Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) for the three months ended April 30, 2022 and 2021	3

	Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) for the six months ended April 30, 2022 and 2021	4

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended April 30, 2022 and 2021	5

	Notes to Condensed Consolidated Financial Statements (Unaudited)	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		19

Item 3. Quantitative and Qualitative Disclosures About Market Risk.		24

Item 4. Controls and Procedures.		24

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.		25

Item 1A. Risk Factors.		25

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		25

Item 3. Defaults Upon Senior Securities.		25

Item 4. Mine Safety Disclosures.		25

Item 5. Other Information.		25

Item 6. Exhibits.		25

SIGNATURES		26

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	April 30, 2022			October 31, 2021
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	27,732		$	29,128
Short-term investments		4,499			6,599
Prepaid expenses and other current assets		332			276
Total current assets		32,563			36,003

Operating lease right-of-use asset		234			254
Total assets	$	32,797		$	36,257

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	93		$	136
Accrued expenses		1,057			1,095
Operating lease liability		39			39
Total current liabilities		1,189			1,270

Operating lease liability, non-current		202			220
Total liabilities		1,391			1,490

Commitments and contingencies (Note 9)		-			-

Equity:
Shareholders’ equity:
Preferred stock, par value $100 per share; 19,860 shares authorized; no 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; 100,000,000 shares authorized; 30,154,708 and 30,050,894 shares issued and outstanding as of April 30, 2022 and October 31, 2021, respectively		302			301
Additional paid-in capital		244,032			239,927
Accumulated deficit		(212,163	)		(204,790	)
Total shareholders’ equity		32,171			35,438
Noncontrolling interest (Note 1)		(765	)		(671	)
Total equity		31,406			34,767

Total liabilities and equity	$	32,797		$	36,257

The accompanying notes are an integral part of these condensed consolidated financial statements.

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)

	2022			2021			2022			2021
	For the three months ended						For the six months ended
	April 30,						April 30,
	2022			2021			2022			2021

Revenue	$	-		$	-		$	-		$	513

Operating costs and expenses:
Inventor royalties, contingent legal fees, litigation and licensing expenses		-			-			-			385
Research and development expenses (including non-cash share-based compensation expenses of $966, $447, $2,243 and $737, respectively)		1,735			1,022			3,573			1,850
General and administrative expenses (including non-cash share-based compensation expenses of $715, $604, $1,793 and $1,300, respectively)		1,854			1,415			3,896			2,948
Total operating costs and expenses		3,589			2,437			7,469			5,183

Loss from operations		(3,589	)		(2,437	)		(7,469	)		(4,670	)

Interest income		1			-			2			1

Net loss		(3,588	)		(2,437	)		(7,467	)		(4,669	)

Less: Net loss attributable to noncontrolling interest		(44	)		(38	)		(94	)		(62	)

Net loss attributable to common shareholders	$	(3,544	)	$	(2,399	)	$	(7,373	)	$	(4,607	)

Net loss per common share attributable to common shareholders:
Basic and diluted	$	(0.12	)	$	(0.08	)	$	(0.24	)	$	(0.17	)

Weighted average common shares outstanding:
Basic and diluted		30,152			28,669			30,138			26,888

The accompanying notes are an integral part of these condensed consolidated financial statements.

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

(in thousands, except share data)

FOR THE THREE MONTHS ENDED APRIL 30, 2022

	Shares		Par Value		Capital		Deficit			Equity			Interest			Equity
					Additional					Total			Non-
	Common Stock				Paid-in		Accumulated			Shareholders’			controlling			Total
	Shares		Par Value		Capital		Deficit			Equity			Interest			Equity

Balance, January 31, 2022		30,132,319	$	301	$	242,281	$	(208,619	)	$	33,963		$	(721	)	$	33,242
Stock option compensation to employees and directors		-		-		1,462		-			1,462			-			1,462
Stock options and warrants issued to consultants		-		-		219		-			219			-			219
Common stock issued to consultants		20,000		1		63		-			64			-			64
Common stock issued pursuant to employee stock purchase plan		2,389		-		7		-			7			-			7
Net loss		-		-		-		(3,544	)		(3,544	)		(44	)		(3,588	)
Balance, April 30, 2022		30,154,708	$	302	$	244,032	$	(212,163	)	$	32,171		$	(765	)	$	31,406

FOR THE THREE MONTHS ENDED APRIL 30, 2021

	Shares		Par Value		Capital		Deficit			Equity			Interest			Equity
					Additional					Total			Non-
	Common Stock				Paid-in		Accumulated			Shareholders’			controlling			Total
	Shares		Par Value		Capital		Deficit			Equity			Interest			Equity

Balance, January 31, 2021		26,179,122	$	262	$	207,382	$	(194,044	)	$	13,600		$	(521	)	$	13,079
Stock option compensation to employees and directors		-		-		881		-			881			-			881
Stock options and warrants issued to consultants		-		-		170		-			170			-			170
Common stock issued upon exercise of stock options		77,571		1		189		-			190			-			190
Common stock issued pursuant to employee stock purchase plan		1,634		-		3		-			3			-			3
Common stock issued in a public offering, net of offering expenses of $2,208		4,285,715		43		20,249		-			20,292			-			20,292
Common stock issued in at-the-market offering, net of offering expenses of $156		905,863		9		4,868		-			4,877			-			4,877
Net loss		-		-		-		(2,399	)		(2,399	)		(38	)		(2,437	)
Balance, April 30, 2021		31,449,905	$	315	$	233,742	$	(196,443	)	$	37,614		$	(559	)	$	37,055

The accompanying notes are an integral part of these condensed consolidated financial statements.

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

(in thousands, except share data)

FOR THE SIX MONTHS ENDED APRIL 30, 2022

	Shares		Par Value		Capital		Deficit			Equity			Interest			Equity
					Additional					Total			Non-
	Common Stock				Paid-in		Accumulated			Shareholders’			controlling			Total
	Shares		Par Value		Capital		Deficit			Equity			Interest			Equity

Balance, October 31, 2021		30,050,894	$	301	$	239,927	$	(204,790	)	$	35,438		$	(671	)	$	34,767
Stock option compensation to employees and directors		-		-		3,598		-			3,598			-			3,598
Stock options and warrants issued to consultants		-		-		437		-			437			-			437
Common stock issued upon exercise of stock options and warrants		81,425		-		-		-			-			-			-
Common stock issued to consultants		20,000		1		63		-			64			-			64
Common stock issued pursuant to employee stock purchase plan		2,389		-		7		-			7			-			7
Net loss		-		-		-		(7,373	)		(7,373	)		(94	)		(7,467	)
Balance, April 30, 2022		30,154,708	$	302	$	244,032	$	(212,163	)	$	32,171		$	(765	)	$	31,406

FOR THE SIX MONTHS ENDED APRIL 30, 2021

	Shares		Par Value		Capital		Deficit			Equity			Interest			Equity
					Additional					Total			Non-
	Common Stock				Paid-in		Accumulated			Shareholders’			controlling			Total
	Shares		Par Value		Capital		Deficit			Equity			Interest			Equity

Balance, October 31, 2020		24,248,695	$	242	$	200,355	$	(191,836	)	$	8,761		$	(497	)	$	8,264
Stock option compensation to employees and directors		-		-		1,756		-			1,756			-			1,756
Stock options and warrants issued to consultants		-		-		282		-			282			-			282
Common stock issued upon exercise of stock options		107,451		1		292		-			293			-			293
Common stock issued pursuant to employee stock purchase plan		1,634		-		3		-			3			-			3
Common stock issued in a public offering, net of offering expenses of $2,208		4,285,715		44		20,248		-			20,292			-			20,292
Common stock issued in at-the-market offering, net of offering expenses of $341		2,806,410		28		10,806		-			10,834			-			10,834
Net loss		-		-		-		(4,607	)		(4,607	)		(62	)		(4,669	)
Balance, April 30, 2021		31,449,905	$	315	$	233,742	$	(196,443	)	$	37,614		$	(559	)	$	37,055

The accompanying notes are an integral part of these condensed consolidated financial statements.

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	2022			2021
	For the six months ended April 30,
	2022			2021
Cash flows from operating activities:
Reconciliation of net loss to net cash used in operating activities:
Net loss	$	(7,467	)	$	(4,669	)
Stock option compensation to employees and directors		3,598			1,756
Stock options and warrants issued to consultants		437			282
Common stock issued to consultants		64			-
Gain on sale of equipment		-			(5	)
Amortization of operating lease right-of-use asset		21			29
Change in operating assets and liabilities:
Prepaid expenses and other current assets		(56	)		(58	)
Accounts payable		(44	)		205
Accrued expenses		(37	)		77
Operating lease liability		(19	)		(29	)
Net cash used in operating activities		(3,503	)		(2,412	)

Cash flows from investing activities:
Disbursements to acquire short-term investments		(4,249	)		(10,399	)
Proceeds from maturities of short-term investments		6,349			2,640
Proceeds from sale of equipment		-			35
Net cash provided by (used in) investing activities		2,100			(7,724	)

Cash flows from financing activities:
Gross proceeds from sale of common stock in a public offering		-			22,500
Expenses of the public offering		-			(2,208	)
Gross proceeds from sale of common stock in an at-the-market offering		-			11,175
Expenses of the at-the-market offering		-			(341	)
Proceeds from sale of common stock pursuant to employee stock purchase plan		7

SEC Form 10-Q filed by Anixa Biosciences Inc.