NOTES
TO THE CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1.
NATURE OF OPERATIONS
Advaxis,
Inc. (“Advaxis” or the “Company”) is a clinical-stage biotechnology company focused on the development
and commercialization of proprietary Listeria monocytogenes (“Lm”)-based antigen delivery products.
The Company is using its Lm platform directed against tumor-specific targets in order to engage the patient’s immune
system to destroy tumor cells. Through a license from the University of Pennsylvania, Advaxis has exclusive access to this proprietary
formulation of attenuated Lm called Lm TechnologyTM. Advaxis’ proprietary approach is designed
to deploy a unique mechanism of action that redirects the immune system to attack cancer in three distinct ways:
|
●
|
Alerting
and training the immune system by activating multiple pathways in Antigen-Presenting Cells (“APCs”) with the equivalent
of multiple adjuvants;
|
|
●
|
Attacking
the tumor by generating a strong, cancer-specific T cell response; and
|
|
●
|
Breaking
down tumor protection through suppression of the protective cells in the tumor microenvironment (“TME”) that shields
the tumor from the immune system. This enables the activated T cells to begin working to attack the tumor cells.
|
Advaxis’
proprietary Lm platform technology has demonstrated clinical activity in several of its programs and has been dosed in
over 470 patients across multiple clinical trials and in various tumor types. The Company believes that Lm Technology immunotherapies
can complement and address significant unmet needs in the current oncology treatment landscape. Specifically, its product candidates
have the potential to work synergistically with other immunotherapies, including checkpoint inhibitors, while having a generally
well-tolerated safety profile.
Liquidity
and Capital Resources
Liquidity
and Management’s Plans
Similar
to other development stage biotechnology companies, the Company’s products that are being developed have not generated significant
revenue. As a result, the Company has suffered recurring losses and requires significant cash resources to execute its business
plans. These losses are expected to continue for the foreseeable future.
As
of January 31, 2021, the Company had approximately $33.3 million in cash and cash equivalents. Although the Company expects to
have sufficient capital to fund its obligations, as they become due, in the ordinary course of business until at least March 2022,
the actual amount of cash that it will need to operate is subject to many factors. Over the past year, the Company has taken steps
to obtain additional financing, including an at-the-market (“ATM”) program through A.G.P./Alliance Global Partners
and an equity line financing arrangement with Lincoln Park Capital. Pursuant to these warrant exercises, the Company received
aggregate proceeds of about $2.6 million which were payable upon exercise. With these funds raised and a reduction in the operating
expenses the Company believes that it has enough cash to fund its operations for one year from the date of filing.
The
Company recognizes it will need to raise additional capital in order to continue to execute its business plan in the future. There
is no assurance that additional financing will be available when needed or that management will be able to obtain financing on
terms acceptable to the Company or whether the Company will become profitable and generate positive operating cash flow. If the
Company is unable to raise sufficient additional funds, it will have to further scale back its operations.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
Basis
of Presentation/Estimates
The
accompanying unaudited interim condensed financial statements and related notes have been prepared in accordance with accounting
principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and
in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) with respect to Form
10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S.
GAAP for complete financial statements and the accompanying unaudited interim condensed balance sheet as of January 31, 2021 has
been derived from the Company’s October 31, 2020 audited financial statements. In the opinion of management, the unaudited
interim condensed financial statements furnished include all adjustments (consisting of normal recurring accruals) necessary for
a fair statement of the results for the interim periods presented.
Operating
results for interim periods are not necessarily indicative of the results to be expected for the full year. The preparation of
financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during
the reporting period. Significant estimates include the timelines associated with revenue recognition on upfront payments received,
fair value and recoverability of the carrying value of property and equipment and intangible assets, fair value of warrant liability,
grant date fair value of options, deferred tax assets and any related valuation allowance and related disclosure of contingent
assets and liabilities. On an on-going basis, the Company evaluates its estimates, based on historical experience and on various
other assumptions that it believes to be reasonable under the circumstances. Actual results could materially differ from these
estimates.
These
unaudited interim condensed financial statements should be read in conjunction with the financial statements of the Company as
of and for the fiscal year ended October 31, 2020 and notes thereto contained in the Company’s 2020 Annual Report on Form
10-K, as filed with the SEC on January 22, 2021, and as amended by Amendment No. 1 thereto on Form 10-KA filed on
February 26, 2021.
Net
Income (Loss) per Share
Basic
net income or loss per common share is computed by dividing net income or loss available to common stockholders by the weighted
average number of common shares outstanding during the period. Diluted earnings per share give effect to dilutive options, warrants,
restricted stock units and other potential common stock outstanding during the period. In the case of a net loss, the impact of
the potential common stock resulting from warrants, outstanding stock options and convertible debt are not included in the computation
of diluted loss per share, as the effect would be anti-dilutive. In the case of net income, the impact of the potential common
stock resulting from these instruments that have intrinsic value are included in the diluted earnings per share. The table below
sets forth the number of potential shares of common stock that have been excluded from diluted net loss per share as of January
31, 2021 and 2020. As of January 31, 2021 and 2020, 0 and 343,838 warrants, respectively, are included in the basic earnings per
share computation because the exercise price was $0.
|
|
As
of January 31,
|
|
|
|
2021
|
|
|
2020
|
|
Warrants
|
|
|
8,014,220
|
|
|
|
5,405,726
|
|
Stock options
|
|
|
1,047,377
|
|
|
|
553,446
|
|
Restricted stock
units
|
|
|
5,556
|
|
|
|
11,644
|
|
Total
|
|
|
9,067,153
|
|
|
|
5,970,816
|
|
Recent
Accounting Standards
Management
does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material
impact on the accompanying condensed financial statements.
3.
PROPERTY AND EQUIPMENT
Property
and equipment, net consisted of the following (in thousands):
|
|
January
31, 2021
|
|
|
October
31, 2020
|
|
|
|
|
|
|
|
|
Leasehold improvements
|
|
$
|
2,335
|
|
|
$
|
2,335
|
|
Laboratory equipment
|
|
|
1,131
|
|
|
|
1,218
|
|
Furniture and fixtures
|
|
|
744
|
|
|
|
744
|
|
Computer equipment
|
|
|
409
|
|
|
|
409
|
|
Construction
in progress
|
|
|
19
|
|
|
|
19
|
|
Total property and equipment
|
|
|
4,638
|
|
|
|
4,725
|
|
Accumulated depreciation
and amortization
|
|
|
(2,449
|
)
|
|
|
(2,332
|
)
|
Net property
and equipment
|
|
$
|
2,189
|
|
|
$
|
2,393
|
|
Depreciation
expense for the three months ended January 31, 2021 and 2020 was $0.2 million.
4.
INTANGIBLE ASSETS
Intangible
assets, net consisted of the following (in thousands):
|
|
January
31, 2021
|
|
|
October
31, 2020
|
|
|
|
|
|
|
|
|
Patents
|
|
$
|
4,689
|
|
|
$
|
4,479
|
|
Licenses
|
|
|
777
|
|
|
|
777
|
|
Software
|
|
|
117
|
|
|
|
117
|
|
Total intangibles
|
|
|
5,583
|
|
|
|
5,373
|
|
Accumulated amortization
|
|
|
(2,179
|
)
|
|
|
(2,112
|
)
|
Intangible assets
|
|
$
|
3,404
|
|
|
$
|
3,261
|
|
The
expiration dates of the existing patents range from 2021 to 2040 but the expiration dates can be extended based on market approval
if granted and/or based on existing laws and regulations. Capitalized costs associated with patent applications that are abandoned
without future value are charged to expense when the determination is made not to further pursue the application. Patent applications
having a net book value of $0 million and $0.3 million were abandoned and were charged to general and administrative expenses
in the statement of operations for each of the three months ended January 31, 2021 and 2020, respectively. Amortization expense
for intangible assets that was charged to general and administrative expense in the statement of operations aggregated $ 67 thousand
and $0.1 million for each of the three months ended January 31, 2021 and 2020, respectively.
Management
has reviewed its long-lived assets for impairment whenever events and circumstances indicate that the carrying value of an asset
might not be recoverable. Net assets are recorded on the balance sheet for patents and licenses related to axalimogene filolisbac
(AXAL), ADXS-HOT, ADXS-PSA and ADXS-HER2 and other products that are in development. However, if a competitor were to gain FDA
approval for a treatment before us or if future clinical trials fail to meet the targeted endpoints, the Company will likely record
an impairment related to these assets. In addition, if an application is rejected or fails to be issued, the Company would record
an impairment of its estimated book value. Lastly, if the Company is unable to raise enough capital to continue funding its studies
and developing its intellectual property, the Company would likely record an impairment to these assets.
As
of January 31, 2021, the estimated amortization expense by fiscal year based on the current carrying value of intangible assets
is as follows (in thousands):
|
|
Fiscal
year ending October 31,
|
|
|
|
|
|
2021 (Remaining)
|
|
$
|
205
|
|
2022
|
|
|
273
|
|
2023
|
|
|
273
|
|
2024
|
|
|
273
|
|
2025
|
|
|
273
|
|
Thereafter
|
|
|
2,107
|
|
Total
|
|
$
|
3,404
|
|
5.
ACCRUED EXPENSES:
The
following table summarizes accrued expenses included in the condensed balance sheets (in thousands):
|
|
January
31, 2021
|
|
|
October
31, 2020
|
|
|
|
|
|
|
|
|
Salaries and other compensation
|
|
$
|
496
|
|
|
$
|
737
|
|
Vendors
|
|
|
1,414
|
|
|
|
671
|
|
Professional
fees
|
|
|
232
|
|
|
|
329
|
|
Total accrued
expenses
|
|
$
|
2,142
|
|
|
$
|
1,737
|
|
6.
COMMON STOCK PURCHASE WARRANTS AND WARRANT LIABILITY
Warrants
As
of January 31, 2021, there were outstanding warrants to purchase 8,341,558 shares of our common stock with exercise prices ranging
from $0 to $281.25 per share. Information on the outstanding warrants is as follows:
Exercise
Price
|
|
|
Number
of Shares
Underlying Warrants
|
|
|
Expiration
Date
|
|
Type
of Financing
|
$
|
281.25
|
|
|
|
25
|
|
|
N/A
|
|
Other
warrants
|
$
|
0.30
|
|
|
|
70,863
|
|
|
July
2024
|
|
September
2018 Public Offering
|
$
|
2.80
|
|
|
|
327,338
|
|
|
September
2024
|
|
July
2019 Public Offering
|
$
|
0.35
|
|
|
|
7,943,332
|
|
|
November
2025
|
|
November
2020 Public Offering
|
|
Grand
Total
|
|
|
|
8,341,558
|
|
|
|
|
|
As
of October 31, 2020, there were outstanding warrants to purchase 398,226 shares of our common stock with exercise prices ranging
from $0 to $281.25 per share. Information on the outstanding warrants is as follows:
Exercise
Price
|
|
|
Number
of Shares
Underlying Warrants
|
|
|
Expiration
Date
|
|
Type
of Financing
|
$
|
-
|
|
|
|
327,338
|
|
|
July
2024
|
|
July
2019 Public Offering
|
$
|
281.25
|
|
|
|
25
|
|
|
N/A
|
|
Other
Warrants
|
$
|
0.372
|
|
|
|
70,863
|
|
|
September
2024
|
|
September
2018 Public Offering
|
|
Grand
Total
|
|
|
|
398,226
|
|
|
|
|
|
A
summary of warrant activity for the quarter ended January 31, 2021 is as follows (in thousands, except share and per share data):
|
|
Warrants
|
|
|
Weighted
Average
Exercise Price
|
|
|
Weighted
Average
Remaining
Contractual Life
In Years
|
|
|
Aggregate
Intrinsic Value
|
|
Outstanding and exercisable
warrants at October 31, 2020
|
|
|
398,226
|
|
|
$
|
0.08
|
|
|
|
3.76
|
|
|
$
|
110,640
|
|
Issued
|
|
|
15,333,332
|
|
|
|
0.35
|
|
|
|
4.82
|
|
|
|
|
|
Exercised
|
|
|
(7,390,000
|
)
|
|
|
0.35
|
|
|
|
|
|
|
|
|
|
Outstanding and
exercisable warrants at January 31, 2021
|
|
|
8,341,558
|
|
|
$
|
0.45
|
|
|
|
4.76
|
|
|
$
|
3,048,937
|
|
As
of January 31, 2021, the Company had 8,270,695 of its total 8,341,558 outstanding warrants classified as equity (equity warrants).
At October 31, 2020, the Company had 327,363 of its total 398,226 outstanding warrants classified as equity (equity warrants).
At issuance, equity warrants are recorded at their relative fair values, using the relative fair value method, in the stockholders’
equity section of the condensed balance sheets.
Warrant
Liability
As
of January 31, 2021, the Company had 70,863 of its total 8,341,558 outstanding warrants from September 2018 Public Offering classified
as liabilities (liability warrants). At October 31, 2020, the Company had 70,863 of its total 398,226 outstanding warrants classified
as liabilities (liability warrants). These warrants contain a down round feature, except for exempt issuances as defined in the
warrant agreement, in which the exercise price would immediately be reduced to match a dilutive issuance of common stock, options,
convertible securities and changes in option price or rate of conversion. As of January 31, 2021, the down round feature was triggered
three times and the exercise price of the warrants were reduced from $22.50 to $0.30. The warrants require liability classification
as the warrant agreement requires the Company to maintain an effective registration statement and does not specify any circumstances
under which settlement in other than cash would be permitted or required. As a result, net cash settlement is assumed and liability
classification is warranted. For these liability warrants, the Company utilized the Monte Carlo simulation model to calculate
the fair value of these warrants at issuance and at each subsequent reporting date.
In
measuring the warrant liability at January 31, 2021 and October 31, 2020, the Company used the following inputs in its Monte Carlo
simulation model:
|
|
January
31, 2021
|
|
|
October
31, 2020
|
|
Exercise Price
|
|
$
|
0.30
|
|
|
$
|
0.37
|
|
Stock Price
|
|
$
|
0.73
|
|
|
$
|
0.34
|
|
Expected Term
|
|
|
3.61
years
|
|
|
|
3.87
years
|
|
Volatility %
|
|
|
114
|
%
|
|
|
106
|
%
|
Risk Free Rate
|
|
|
0.20
|
%
|
|
|
0.29
|
%
|
7.
SHARE BASED COMPENSATION
The
following table summarizes share-based compensation expense included in the condensed statements of operations (in thousands):
|
|
Three
Months Ended January 31,
|
|
|
|
2021
|
|
|
2020
|
|
Research and development
|
|
$
|
57
|
|
|
$
|
91
|
|
General and administrative
|
|
|
179
|
|
|
|
151
|
|
Total
|
|
$
|
236
|
|
|
$
|
242
|
|
Restricted
Stock Units (RSUs)
A
summary of the Company’s RSU activity and related information for the three months ended January 31, 2021 is as follows:
|
|
Number
of
RSUs
|
|
|
Weighted-Average
Grant
Date Fair Value
|
|
|
|
|
|
|
|
|
Balance at October 31, 2020
|
|
|
5,556
|
|
|
$
|
24.32
|
|
Vested
|
|
|
-
|
|
|
|
|
|
Cancelled
|
|
|
-
|
|
|
|
|
|
Balance at January 31, 2021
|
|
|
5,556
|
|
|
$
|
24.32
|
|
As
of January 31, 2021, there was approximately $30,000 of unrecognized compensation cost related to non-vested RSUs, which is expected
to be recognized over a remaining weighted average vesting period of approximately 0.22 years.
As
of January 31, 2021, the aggregate intrinsic value of non-vested RSU’s was approximately $4,100.
Employee
Stock Awards
Common
Stock issued to executives and employees related to vested incentive retention awards, employment inducements, management purchases
and employee excellence awards totaled 0 shares and 2,957 shares during the three months ended January 31, 2021 and 2020, respectively.
Total stock compensation expense associated with employee awards for the three months ended January 31, 2021 and 2020 was approximately
$0 and $56,000, respectively.
Stock
Options
A
summary of changes in the stock option plan for the three months ended January 31, 2021 is as follows:
|
|
Shares
|
|
|
Weighted
Average
Exercise Price
|
|
|
Weighted
Average
Remaining
Contractual Life
In Years
|
|
|
Aggregate
Intrinsic Value
(in thousands)
|
|
Outstanding as of October 31, 2020
|
|
|
1,011,768
|
|
|
$
|
33.43
|
|
|
|
8.04
|
|
|
$
|
4
|
|
Granted
|
|
|
50,000
|
|
|
|
0.39
|
|
|
|
|
|
|
|
|
|
Cancelled or
expired
|
|
|
(14,391
|
)
|
|
|
21.49
|
|
|
|
|
|
|
|
|
|
Outstanding as of January 31, 2021
|
|
|
1,047,377
|
|
|
$
|
32.02
|
|
|
|
7.89
|
|
|
$
|
143
|
|
Vested and exercisable
at January 31, 2021
|
|
|
313,268
|
|
|
$
|
103.55
|
|
|
|
4.72
|
|
|
$
|
18
|
|
Options
Outstanding
|
|
Options
Exercisable
|
|
|
|
|
|
|
Weighted
|
|
|
Weighted
|
|
|
|
|
|
Weighted
|
|
|
Weighted
|
|
|
|
|
|
|
Average
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
Average
|
|
Exercise
|
|
Number
|
|
|
Remaining
|
|
|
Exercise
|
|
|
Number
|
|
|
Remaining
|
|
|
Exercise
|
|
Price
Range
|
|
Outstanding
|
|
|
Contractual
|
|
|
Price
|
|
|
Exercisable
|
|
|
Contractual
|
|
|
Price
|
|
$
|
0.30-$10.00
|
|
|
|
793,412
|
|
|
|
9.20
|
|
|
$
|
3.52
|
|
|
|
83,201
|
|
|
|
8.30
|
|
|
$
|
3.52
|
|
$
|
10.01-$100.00
|
|
|
|
91,727
|
|
|
|
6.93
|
|
|
$
|
29.17
|
|
|
|
67,829
|
|
|
|
6.83
|
|
|
$
|
31.01
|
|
$
|
100.01-$200.00
|
|
|
|
92,847
|
|
|
|
2.51
|
|
|
$
|
166.04
|
|
|
|
92,847
|
|
|
|
2.51
|
|
|
$
|
166.04
|
|
$
|
200.01-$277.50
|
|
|
|
69,391
|
|
|
|
1.33
|
|
|
$
|
210.79
|
|
|
|
69,391
|
|
|
|
1.33
|
|
|
$
|
210.79
|
|
During
the three months end January 31, 2021, the Company granted options to purchase 50,000 shares of its common stock to an employee.
The stock options have a ten-year term, vest over three years from the date of grant, and have an exercise price of $0.39.
Total
compensation cost related to the Company’s outstanding stock options, recognized in the condensed statements of operations
for the three months ended January 31, 2021 and 2020 was approximately $0.2 million.
As
of January 31, 2021, there was approximately $0.4 million of unrecognized compensation cost related to non-vested stock option
awards, which is expected to be recognized over a remaining weighted average vesting period of 1.54 years.
As
of January 31, 2021, the aggregate intrinsic value of vested and exercisable options was $143 thousand and the aggregate intrinsic
value of non-vested options was approximately $18 thousand.
In
determining the fair value of the stock options granted during the three months ended January 31, 2021, the Company used the following
inputs in its Black Scholes Merton model:
|
|
Three
Months
Ended
January 31, 2021
|
|
|
|
|
|
Expected Term
|
|
|
6
years
|
|
Expected Volatility
|
|
|
103.27
|
%
|
Expected Dividends
|
|
|
0
|
%
|
Risk Free Interest Rate
|
|
|
0.53
|
%
|
Employee
Stock Purchase Plan
During
the three months ended January 31, 2021 and 2020, the Company issued 0 and 5,555 shares, respectively, that were purchased under
the 2018 Employee Stock Purchase Plan (“ESPP”).
8.
COLLABORATION AND LICENSING AGREEMENTS
OS
Therapies LLC
On
September 4, 2018, the Company entered into a development, license and supply agreement with OS Therapies (“OST”)
for the use of ADXS31-164, also known as ADXS-HER2, for evaluation in the treatment of osteosarcoma in humans. Under the terms
of the license agreement, as amended, OST will be responsible for the conduct and funding of a clinical study evaluating ADXS-HER2
in recurrent, completely resected osteosarcoma. Under the most recent amendment to the licensing agreement, OST agreed to pay
Advaxis $25,000 per month (“Monthly Payment”) starting on April 30, 2020 until it achieved its funding milestone of
$2,337,500. Upon receipt of the first Monthly Payment, Advaxis initiated the transfer of the intellectual property and licensing
rights of ADXS31-164, which were licensed pursuant to the Penn Agreement, back to the University of Pennsylvania. Contemporaneously,
OST will enter negotiations with the University of Pennsylvania to establish a licensing agreement for ADXS31-164 to OST for clinical
and commercial development of the ADXS31-164 technology.
In
December 2020 and January 2021, the Company received an aggregate of $1,615,000 from OS Therapies upon achievement of the funding
milestone set forth in the license agreement. The Company therefore transferred and OST took full ownership of, the IND application
for ADXS31-164 in its entirety along with agreements and promises contained therein, as well as all obligations associated with
this IND or any HER2 product/program development.
9.
COMMITMENTS AND CONTINGENCIES
Legal
Proceedings
The
Company is from time to time involved in legal proceedings in the ordinary course of our business. The Company does not believe
that any of these claims or proceedings against us is likely to have, individually or in the aggregate, a material adverse effect
on the financial condition or results of operations.
10.
LEASES
Operating
Leases
The
Company leases its corporate office and manufacturing facility in Princeton, New Jersey under an operating lease that expires
in November 2025. The Company has the option to renew the lease term for two additional five-year terms. The renewal periods were
not included the lease term for purposes of determining the lease liability or right-of-use asset. The Company has provided a
security deposit of approximately $182,000, which is recorded as Other Assets in the condensed balance sheet.
The
Company identified and assessed the following significant assumptions in recognizing its right-of-use assets and corresponding
lease liabilities:
|
●
|
As
the Company does not have sufficient insight to determine an implicit rate, the Company estimated the incremental borrowing
rate in calculating the present value of the lease payments. The Company utilized a synthetic credit rating model to determine
a benchmark for its incremental borrowing rate for its leases. The benchmark rate was adjusted to arrive at an appropriate
discount rate for the lease.
|
|
|
|
|
●
|
Since
the Company elected to account for each lease component and its associated non-lease components as a single combined component,
all contract consideration was allocated to the combined lease component.
|
|
|
|
|
●
|
Renewal
option periods have not been included in the determination of the lease terms as they are not deemed reasonably certain of
exercise.
|
|
|
|
|
●
|
Variable
lease payments, such as common area maintenance, real estate taxes, and property insurance are not included in the determination
of the lease’s right-of-use asset or lease liability.
|
Supplemental
balance sheet information related to leases as of January 31, 2021 is as follows (in thousands):
Operating leases:
|
|
|
|
|
Operating
lease right-of-use assets
|
|
$
|
4,644
|
|
|
|
|
|
|
Operating lease liability
|
|
$
|
992
|
|
Operating lease
liability, net of current portion
|
|
|
4,795
|
|
Total
operating lease liabilities
|
|
$
|
5,787
|
|
Supplemental
lease expense related to leases was as follows (in thousands):
Lease
Cost (in thousands)
|
|
Statements
of Operations Classification
|
|
For
the Three
Months Ended
January 31, 2021
|
|
|
For
the Three
Months Ended
January 31, 2020
|
|
Operating lease cost
|
|
General and administrative
|
|
|
290
|
|
|
|
290
|
|
Short-term lease cost
|
|
General and administrative
|
|
|
-
|
|
|
|
85
|
|
Variable lease
cost
|
|
General and
administrative
|
|
$
|
437
|
|
|
|
141
|
|
Total
lease expense
|
|
|
|
$
|
727
|
|
|
|
516
|
|
Other
information related to leases where the Company is the lessee is as follows:
|
|
For
the Three
Months Ended
January 31, 2021
|
|
Weighted-average remaining lease
term
|
|
|
4.8
years
|
|
Weighted-average discount
rate
|
|
|
6.5
|
%
|
Supplemental
cash flow information related to operating leases was as follows:
|
|
For
the Three
Months Ended
January 31, 2021
|
|
|
For
the Three
Months Ended
January 31, 2020
|
|
Cash
paid for operating lease liabilities
|
|
$
|
324
|
|
|
|
300
|
|
Future
minimum lease payments under non-cancellable leases as of January 31, 2021 is as follows (in thousands):
Fiscal Year ending October
31,
|
|
|
|
2021 (Remaining)
|
|
$
|
1,369
|
|
2022
|
|
|
1,395
|
|
2023
|
|
|
1,419
|
|
2024
|
|
|
1,444
|
|
2025
|
|
|
120
|
|
Thereafter
|
|
|
993
|
|
Total minimum lease
payments
|
|
|
6,740
|
|
Less: Imputed
interest
|
|
|
(953
|
)
|
Total
|
|
$
|
5,787
|
|
Under
ASC 842, future minimum payments under the Company’s operating lease were as follows (in thousands):
Fiscal Year ending October
31,
|
|
|
|
2021 (Remaining)
|
|
$
|
993
|
|
2022
|
|
|
1,369
|
|
2023
|
|
|
1,395
|
|
2024
|
|
|
1,419
|
|
2025
|
|
|
1,444
|
|
Thereafter
|
|
|
120
|
|
Total
|
|
$
|
6,740
|
|
Under
ASC 842, rent expense for each of the three months ended January 31, 2021 and 2020 was approximately $0.3 million.
11.
STOCKHOLDERS’ EQUITY
Public
Offerings
In
November 2020, the Company closed on a public offering of 30,666,665 shares of its common stock at a public offering price of
$0.30 per share, for gross proceeds of $9.2 million, which gives effect to the exercise of the underwriter’s option in full.
In addition, the Company also undertook a concurrent private placement of warrants to purchase up to 15,333,332 shares of common
stock. The warrants have an exercise price per share of $0.35, are exercisable immediately and will expire five years from the
date of issuance. The warrants also provide that if there is no effective registration statement registering, or no current prospectus
available for, the issuance or resale of the warrant shares, the warrants may be exercised via a cashless exercise. After deducting
the underwriting discounts and commissions and other offering expenses, the net proceeds from the offering were approximately
$8.5 million.
During
the three months ended January 31, 2020, warrant holders from the Company’s November 2020 offering exercised 7,390,000 warrants
in exchange for 7,390,000 shares of the Company’s common stock. Pursuant to these warrant exercises, the Company received
aggregate proceeds of about $2.6 million which were payable upon exercise.
A
summary of the changes in stockholders’ equity for the three months ended January 31, 2021 and 2020 is presented below (in
thousands, except share data):
|
|
Preferred
Stock
|
|
|
Common
Stock
|
|
|
Additional
Paid-In
|
|
|
Accumulated
|
|
|
Total
Shareholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Equity
|
|
Balance at November 1, 2019
|
|
|
-
|
|
|
$
|
-
|
|
|
|
50,201,671
|
|
|
$
|
50
|
|
|
$
|
423,750
|
|
|
$
|
(384,269
|
)
|
|
$
|
39,531
|
|
Stock-based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
2,957
|
|
|
|
-
|
|
|
|
242
|
|
|
|
-
|
|
|
|
242
|
|
Advaxis public offerings, net of offering
costs
|
|
|
-
|
|
|
|
-
|
|
|
|
10,000,000
|
|
|
|
10
|
|
|
|
9,618
|
|
|
|
-
|
|
|
|
9,628
|
|
Warrant exercises
|
|
|
-
|
|
|
|
-
|
|
|
|
26,416
|
|
|
|
-
|
|
|
|
2
|
|
|
|
-
|
|
|
|
2
|
|
Issuance of shares to employees under
ESPP Plan
|
|
|
-
|
|
|
|
-
|
|
|
|
5,555
|
|
|
|
-
|
|
|
|
2
|
|
|
|
-
|
|
|
|
2
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(7,857
|
)
|
|
|
(7,857
|
)
|
Balance at January 31, 2020
|
|
|
-
|
|
|
$
|
-
|
|
|
|
60,236,599
|
|
|
$
|
60
|
|
|
$
|
433,614
|
|
|
$
|
(392,126
|
)
|
|
$
|
41,548
|
|
|
|
Preferred
Stock
|
|
|
Common
Stock
|
|
|
Additional
Paid-In
|
|
|
Accumulated
|
|
|
Total
Shareholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Equity
|
|
Balance at November 1, 2020
|
|
|
-
|
|
|
$
|
-
|
|
|
|
78,074,023
|
|
|
$
|
78
|
|
|
$
|
440,840
|
|
|
$
|
(410,738
|
)
|
|
$
|
30,180
|
|
Stock-based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
236
|
|
|
|
-
|
|
|
|
236
|
|
Advaxis public offerings, net of offering
costs
|
|
|
-
|
|
|
|
-
|
|
|
|
30,666,665
|
|
|
|
31
|
|
|
|
8,519
|
|
|
|
-
|
|
|
|
8,550
|
|
Warrant exercises
|
|
|
-
|
|
|
|
-
|
|
|
|
7,390,000
|
|
|
|
7
|
|
|
|
2,579
|
|
|
|
-
|
|
|
|
2,586
|
|
Net Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,977
|
)
|
|
|
(3,977
|
)
|
Balance at January 31, 2021
|
|
|
-
|
|
|
$
|
-
|
|
|
|
116,130,688
|
|
|
$
|
116
|
|
|
$
|
452,174
|
|
|
$
|
(414,715
|
)
|
|
$
|
37,575
|
|
12.
FAIR VALUE
The
authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset
or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in
an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the
principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance
describes a fair value hierarchy based on the levels of inputs, of which the first two are considered observable and the last
unobservable, that may be used to measure fair value which are the following:
●
Level 1 — Quoted prices in active markets for identical assets or liabilities.
●
Level 2— Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar
assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or corroborated by observable
market data or substantially the full term of the assets or liabilities.
●
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the value of
the assets or liabilities.
The
following table provides the assets and liabilities carried at fair value measured on a recurring basis as of January 31, 2021
and October 31, 2020 (in thousands):
January
31, 2021
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Total
|
|
Common stock warrant liability,
warrants exercisable at $0.372 through September 2024
|
|
|
-
|
|
|
|
-
|
|
|
$
|
44
|
|
|
$
|
44
|
|
October
31, 2020
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Total
|
|
Common stock warrant liability,
warrants exercisable at $0.372 through September 2024
|
|
|
-
|
|
|
|
-
|
|
|
$
|
17
|
|
|
$
|
17
|
|
The
following table sets forth a summary of the changes in the fair value of the Company’s warrant liabilities (in thousands):
|
|
For
the
Three Months
Ended
January 31, 2021
|
|
Beginning balance
|
|
$
|
17
|
|
Warrant exercises
|
|
|
-
|
|
Change in
fair value
|
|
|
27
|
|
Ending Balance
|
|
$
|
44
|
|
13.
Subsequent Events
In
February 2021, warrant holders exercised about 3.3 million warrants from the Company’s November 2020’s offering.
The Company received aggregate proceeds of about $1.2 million from these exercises.