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, 2020

 

Commission file number 0-11254

 

 

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   X       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   X     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 [X]

Smaller reporting company [X]                     

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   X  

 

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

 

On June 9, 2020 the registrant had outstanding 22,975,950 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, 2020 (Unaudited) and October 31, 2019

1

Condensed Consolidated Statements of Operations (Unaudited) for the six months ended April 30, 2020 and 2019          

2

 

Condensed Consolidated Statements of Operations (Unaudited) for the three months ended April 30, 2020 and 2019

3

 

 

 

Condensed Consolidated Statement of Shareholders’ Equity (Unaudited) for the six months ended April 30, 2020

4

Condensed Consolidated Statement of Shareholders’ Equity (Unaudited) for the three months ended April 30, 2020

5

 

 

 

 

Condensed Consolidated Statement of Shareholders’ Equity (Unaudited) for the six months ended April 30, 2019

6

 

 

 

 

Condensed Consolidated Statement of Shareholders’ Equity (Unaudited) for the three months ended April 30, 2019

7

 

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended April 30, 2020 and 2019

8

 

 

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

9

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations.

27

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

34

Item 4.

Controls and Procedures.

35

PART II.  OTHER INFORMATION

Item 1.

Legal Proceedings.

36

Item 1A.

Risk Factors.

36

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

38

Item 3.

Defaults Upon Senior Securities.

38

Item 4.

Mine Safety Disclosures.

38

Item 5.

Other Information.

38

Item 6.

Exhibits.

38

SIGNATURES                      

39

 


Table of Contents

 

PART I.  FINANCIAL INFORMATION

 

Item 1.  Financial Statements.

 

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

April 30,

2020

October 31,

2019

ASSETS

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

2,888,197

$

3,491,625

Short-term investments in certificates of deposit

 

2,620,000

 

 

2,350,000

Receivables

32,338

66,527

Prepaid expenses and other current assets

 

116,252

 

 

184,972

Total current assets

5,656,787

6,093,124

 

 

 

 

 

 

Property and equipment, net of accumulated depreciation of $124,433 and
    $95,015, respectively

186,942

200,569

Operating lease right-of-use asset

 

81,166

 

 

-

Total assets

$

5,924,895

$

6,293,693

 

 

 

 

 

 

LIABILITIES AND EQUITY

Current liabilities:

 

 

 

 

 

Accounts payable

$

170,778

$

585,817

Accrued expenses

 

850,155

 

 

895,498

Operating lease liability

 

55,748

 

-

Total current liabilities

 

1,076,681

 

 

1,481,315

Operating lease liability, non-current                                                                      

 

25,964

 

 

-

Total liabilities

 

1,102,645

 

1,481,315

 

 

 

 

 

 

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

 

-

 

 

-

Common stock, par value $.01 per share; 48,000,000 shares authorized;
    21,479,335 and 20,331,754 shares issued and outstanding, respectively

214,793

203,317

Additional paid-in capital

 

192,122,260

 

 

186,849,299

Accumulated deficit

 

(187,049,899)

 

(181,817,263)

Total shareholders’ equity

 

5,287,154

 

 

5,235,353

Noncontrolling interest (Note 1)

 

(464,904)

 

(422,975)

Total equity

 

4,822,250

 

 

4,812,378

 

Total liabilities and equity

$

5,924,895

 

$

6,293,693

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

 

1

Table of Contents

 

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

For the Six Months Ended

April 30,

2020

2019

Revenue

$

-

 

$

250,000

Operating costs and expenses:

 

 

 

 

 

Inventor royalties, contingent legal fees, litigation and licensing
    expenses related to patent assertion

-

166,250

Amortization of patents

 

-

 

 

376,875

Research and development expenses (including non-cash share-based
    compensation expenses of $855,655 and $2,228,845, respectively)

2,719,378

3,516,665

General and administrative expenses (including non-cash share-based
    compensation expenses of $1,275,765 and $1,842,769, respectively)

 

2,580,628

 

 

3,348,422

Impairment in carrying amount of patent asset (Note 1)

 

-

 

418,750

Total operating costs and expenses

 

5,300,006

 

 

7,826,962

Loss from operations

 

(5,300,006)

 

 

(7,576,962)

Interest income 

 

25,441

 

 

35,419

Loss before income taxes

 

(5,274,565)

 

 

(7,541,543)

Provision for income taxes

 

-

 

 

-

    

Net loss

 

(5,274,565)

 

 

(7,541,543)

                   

Less: Net loss attributable to noncontrolling interest

 

(41,929)

 

 

(122,010)

Net loss attributable to common shareholders

$

(5,232,636)

 

$

(7,419,533)

Net loss per common share attributable to common shareholders:

 

 

 

 

 

Basic and diluted

$

(0.25)

$

(0.38)

 

 

 

 

 

 

Weighted average common shares outstanding:

Basic and diluted

 

20,927,212

 

 

19,403,933

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

 

2


Table of Contents

 

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

For the Three Months Ended

April 30,

2020

2019

Revenue

$

-

 

$

250,000

Operating costs and expenses:

 

 

 

 

 

Inventor royalties, contingent legal fees, litigation and licensing
    expenses related to patent assertion

-

166,250

Amortization of patents

 

-

 

 

125,625

Research and development expenses (including non-cash share-based
    compensation expenses of $458,132 and $655,066, respectively)

1,228,790

1,269,393

General and administrative expenses (including non-cash share-based
    compensation expenses of $651,954 and $666,384 respectively)

 

1,441,347

 

 

1,281,966

Total operating costs and expenses

 

2,670,137

 

2,843,234

 

 

 

 

 

 

Loss from operations

(2,670,137)

(2,593,234)

 

 

 

 

 

 

Interest income 

 

12,147

 

18,300

 

 

 

 

 

 

Loss before income taxes

(2,657,990)

(2,574,934)

 

 

 

 

 

 

Provision for income taxes

 

-

 

-

 

 

 

 

 

    

Net loss

(2,657,990)

(2,574,934)

 

 

 

 

 

                   

Less: Net loss attributable to noncontrolling interest

 

(17,897)

 

(37,242)

 

 

 

 

 

 

Net loss attributable to common shareholders

$

(2,640,093)

$

(2,537,692)

 

 

 

 

 

 

Net loss per common share attributable to common shareholders:

 

Basic and diluted

$

(0.12)

 

$

(0.13)

Weighted average common shares outstanding:

 

 

 

 

 

Basic and diluted

21,155,505

19,645,140

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


3

Table of Contents

 

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED APRIL 30, 2020 (UNAUDITED)

Additional

Paid-in

Capital

Total

Shareholders’

Equity

Non-

controlling

Interest

Common Stock

Accumulated

Deficit

Total

Equity

Shares

Par Value

Balance, October 31, 2019

20,331,754

 

$

203,317

 

$

186,849,299

 

$

(181,817,263)

 

$

5,235,353

 

$

(422,975)

 

$

4,812,378

Stock option compensation to employees and
    directors

-

 

 

-

 

 

2,019,211

 

 

-

 

 

2,019,211

 

 

-

 

 

2,019,211

Stock options issued to consultants

-

 

 

-

 

 

112,209

 

 

-

 

 

112,209

 

 

-

 

 

112,209

Common stock issued upon exercise of stock
    options

43,900

 

 

439

 

 

103,291

 

 

-

 

 

103,730

 

 

-

 

 

103,730

Common stock issued pursuant to employee
    stock purchase plan

9,618

 

 

96

 

 

15,356

 

 

-

 

 

15,452

 

 

-

 

 

15,452

Common stock issued in at-the-market offering,
    net of offering expenses of $158,296

1,094,063

 

 

10,941

 

 

3,022,894

 

 

-

 

 

3,033,835

 

 

-

 

 

3,033,835

Net loss

-

 

 

-

 

 

-

 

 

(5,232,636)

 

 

(5,232,636)

 

 

(41,929)

 

 

(5,274,565)

Balance, April 30, 2020

21,479,335

 

$

214,793

 

$

192,122,260

 

$

(187,049,899)

 

$

5,287,154

 

$

(464,904)

 

$

4,822,250

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

 

4


Table of Contents

 

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED APRIL 30, 2020 (UNAUDITED)

 

Additional

Paid-in

Capital

Total

Shareholders’

Equity

Non-

controlling

Interest

Common Stock

Accumulated

Deficit

Total

Equity

Shares

Par Value

Balance, January 31, 2020

20,841,309

 

$

208,413

 

$

189,646,000

 

$

(184,409,806)

 

$

5,444,607

 

$

(447,007)

 

$

4,997,600

Stock option compensation to employees and
    directors

-

 

 

-

 

 

1,055,331

 

 

-

 

 

1,055,331

 

 

-

 

 

1,055,331

Stock options and warrants issued to consultants

-

 

 

-

 

 

54,755

 

 

-

 

 

54,755

 

 

-

 

 

54,755

Common stock issued upon exercise of stock
    options

25,000

 

 

250

 

 

75,000

 

 

-

 

 

75,250

 

 

-

 

 

75,250

Common stock issued pursuant to employee
    stock purchase plan

9,618

 

 

96

 

 

15,356

 

 

-

 

 

15,452

 

 

-

 

 

15,452

Common stock issued in at-the-market offering,
    net of offering expenses of $57,324

603,408

 

 

6,034

 

 

1,275,818

 

 

-

 

 

1,281,852

 

 

-

 

 

1,281,852

Net loss

-

 

 

-

 

 

-

 

 

(2,640,093)

 

 

(2,640,093)

 

 

(17,897)

 

 

(2,657,990)

Balance, April 30, 2020

21,479,335

 

$

214,793

 

$

192,122,260

 

$

(187,049,899)

 

$

5,287,154

 

$

(464,904)

 

$

4,822,250

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

 

5


Table of Contents

 

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED APRIL 30, 2019 (UNAUDITED)

 

Additional

Paid-in

Capital

Total

Shareholders’

Equity

Non-

controlling

Interest

Common Stock

Accumulated

Deficit

Total

Equity

Shares

Par Value

Balance, October 31, 2018

18,908,632

 

$

189,086

 

$

175,415,931

 

$

(170,170,209)

 

$

5,434,808

 

$

(251,377)

 

$

5,183,431

Stock option compensation to employees and
    directors

-

 

 

-

 

 

2,024,664

 

 

-

 

 

2,024,664

 

 

-

 

 

2,024,664

Stock options and warrants issued to consultants

-

 

 

-

 

 

92,509

 

 

-

 

 

92,509

 

 

-

 

 

92,509

Common stock issued upon exercise of stock
    options

30,000

 

 

300

 

 

79,500

 

 

-

 

 

79,800

 

 

-

 

 

79,800

Restricted stock award compensation to
    employee pursuant to stock incentive plan

-

 

 

-

 

 

1,954,441

 

 

-

 

 

1,954,441

 

 

-

 

 

1,954,441

Common stock issued pursuant to employee
    stock purchase plan

5,411

 

 

54

 

 

18,506

 

 

-

 

 

18,560

 

 

-

 

 

18,560

Common stock issued in at-the-market offering,
    net of offering expenses of $152,911

1,061,032

 

 

10,610

 

 

4,347,193

 

 

-

 

 

4,357,803

 

 

-

 

 

4,357,803

Net loss

-

 

 

-

 

 

-

 

 

(7,419,533)

 

 

(7,419,533)

 

 

(122,010)

 

 

(7,541,543)

Balance, April 30, 2019

20,005,075

 

$

200,050

 

$

183,932,744

 

$

(177,589,742)

 

$

6,543,052

 

$

(373,387)

 

$

6,169,665

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

 

6

Table of Contents

 

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED APRIL 30, 2019 (UNAUDITED)

 

Additional

Paid-in

Capital

Total

Shareholders’

Equity

Non-

controlling

Interest

Common Stock

Accumulated

Deficit

Total

Equity

Shares

Par Value

Balance, January 31, 2019

19,470,235

 

$

194,702

 

$

180,336,763

 

$

(175,052,050)

 

$

5,479,415

 

$

(336,145)

 

$

5,143,270

Stock option compensation to employees and
    directors

-

 

 

-

 

 

805,104

 

 

-

 

 

805,104

 

 

-

 

 

805,104

Stock options and warrants issued to consultants

-

 

 

-

 

 

46,290

 

 

-

 

 

46,290

 

 

-

 

 

46,290

Common stock issued upon exercise of stock
    options

20,000

 

 

200

 

 

56,900

 

 

-

 

 

57,100

 

 

-

 

 

57,100

Restricted stock award compensation to
    employee pursuant to stock incentive plan

-

 

 

-

 

 

470,056

 

 

-

 

 

470,056

 

 

-

 

 

470,056

Common stock issued pursuant to employee
    stock purchase plan

5,411

 

 

54

 

 

18,506

 

 

-

 

 

18,560

 

 

-

 

 

18,560

Common stock issued in at-the-market offering,
    net of offering expenses of $85,750

509,429

 

 

5,094

 

 

2,199,125

 

 

-

 

 

2,204,219

 

 

-

 

 

2,204,219

Net loss

-

 

 

-

 

 

-

 

 

(2,537,692)

 

 

(2,537,692)

 

 

(37,242)

 

 

(2,574,934)

Balance, April 30, 2019

20,005,075

 

$

200,050

 

$

183,932,744

 

$

(177,589,742)

 

$

6,543,052

 

$

(373,387)

 

$

6,169,665

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

 

7


Table of Contents

 

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the six months ended
April 30,

2020

2019

Cash flows from operating activities:

 

 

 

 

 

Reconciliation of net loss to net cash used in operating activities:

Net loss

$

(5,274,565)

 

$

(7,541,543)

Stock option compensation to employees and directors

2,019,211

2,024,664

Stock options and warrants issued to consultants

 

112,209

 

 

92,509

Restricted stock award compensation to employee pursuant to stock
    incentive plan

-

1,954,441

Depreciation of property and equipment

 

29,418

 

 

18,108

Amortization of operating lease right-of-use asset, net of lease payments

546

-

Amortization of patents

 

-

 

 

376,875

Impairment in carrying amount of patent assets

-

418,750

Change in operating assets and liabilities:

 

 

 

 

 

Receivables

34,189

(489,963)

Prepaid expenses and other current assets

 

68,720

 

 

51,219

Accounts payable

(415,039)

135,908

Accrued expenses

 

(45,343)

 

 

194,742

Net cash used in operating activities

 

(3,470,654)

 

(2,764,290)

 

 

 

 

 

 

Cash flows from investing activities:

Disbursements to acquire short-term investments in certificates of deposit                                                             

(2,620,000)

 

 

(1,000,000)

Proceeds from maturities of short-term investments in certificates of deposit             

2,350,000

250,000

Purchase of property and equipment

 

(15,791)

 

 

(175,457)

Net cash used in investing activities

 

(285,791)

 

(925,457)

 

 

 

 

 

 

Cash flows from financing activities:

Net proceeds from sale of common stock in at-the-market offering

 

3,033,835

 

 

4,357,803

Proceeds from sale of common stock pursuant to employee stock purchase
    plan

15,452

18,560

Proceeds from exercise of stock options

 

103,730

 

 

79,800

Net cash provided by financing activities

 

3,153,017

 

4,456,163

 

 

 

 

 

 

Net (decrease) increase in cash and cash equivalents

(603,428)

766,416

Cash and cash equivalents at beginning of period

 

3,491,625

 

 

3,055,890

Cash and cash equivalents at end of period

$

2,888,197

$

3,822,306

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

Operating lease right-of-use asset

$

(106,221)

 

$

-

Operating lease liability

$

106,299

$

-

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

 

8


Table of Contents

 

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

(UNAUDITED)

 

1.         BUSINESS AND FUNDING

Description of Business       

As used herein, “we,” “us,” “our,” the “Company” or “Anixa” means Anixa Biosciences, Inc. and its consolidated subsidiaries.  Our primary operations involve developing a number of programs addressing cancer and infectious disease.  Our therapeutics programs consist of development of a vaccine against triple negative breast cancer (“TNBC”), development of chimeric endocrine receptor T-cell technology, a novel form of CAR-T technology, initially focused on treating ovarian cancer, and discovery and ultimately development of anti-viral drug candidates for the treatment of COVID-19 focused on inhibiting certain viral protein function.  Our cancer diagnostics program consists of development of the artificial intelligence (AI) driven Cchek™ liquid biopsy platform for early cancer detection. 

 

We hold an exclusive worldwide, royalty-bearing license to use certain intellectual property owned or controlled by The Cleveland Clinic Foundation (“Cleveland Clinic”) related to certain breast cancer vaccine technology developed at Cleveland Clinic.  We are working in collaboration with Cleveland Clinic to develop a method to vaccinate women against contracting breast cancer, focused specifically on TNBC, the most lethal form of the disease.  A specific protein, alpha-lactalbumin, has been identified that is only present during lactation in healthy women, but reappears in many forms of breast cancer, especially TNBC.  Studies have shown that vaccinating against this protein prevents breast cancer in mice.  We are working with researchers at Cleveland Clinic to advance this vaccine toward human clinical testing, and we are in the process of manufacturing the vaccine and upon completion we will be prepared to file an Investigational New Drug (“IND”) application with the U.S. Food and Drug Administration (“FDA”).  While we anticipate filing the IND during the third calendar quarter of 2020, we may experience delays in the vaccine manufacturing and characterization process due to the global coronavirus pandemic.  We do not currently anticipate any potential delays to significantly alter our expected timeline.  The IND application, after review and approval by the FDA, will enable us to begin testing our vaccine in human subjects.

 

Our subsidiary, Certainty Therapeutics, Inc. (“Certainty”), is developing immuno-therapy drugs against cancer.  Certainty holds an exclusive worldwide, royalty-bearing license to use certain intellectual property owned or controlled by The Wistar Institute (“Wistar”) relating to Wistar’s CAR-T technology.  We have initially focused on the development of a treatment for ovarian cancer, but we may also pursue applications of the technology for the development of treatments for additional solid tumors.  The license agreement requires Certainty to make certain cash and equity payments to Wistar.  With respect to Certainty’s equity obligations to Wistar, Certainty issued to Wistar shares of its common stock equal to five percent (5%) of the common stock of Certainty.

 

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Certainty, in collaboration with the H. Lee Moffitt Cancer Center and Research Institute, Inc. (“Moffitt”), is advancing toward human clinical testing its CAR-T technology for treating ovarian cancer.  Clinical grade materials are currently being manufactured and upon completion will undergo extensive testing.  Once the materials have been successfully tested, we will be prepared to submit an IND application with the FDA.  While we anticipate filing the IND by the end of 2020, we may experience delays in completing the manufacturing and testing of clinical materials due to the global coronavirus pandemic.  We do not currently anticipate any potential delays to significantly alter our expected timeline.  The IND application, after review and approval by the FDA, will enable us to begin testing our therapy in ovarian cancer patients. 

 

In April 2020, in collaboration with OntoChem GmbH (“OntoChem”), we have commenced a project to discover and ultimately develop anti-viral drug candidates for COVID-19.  Through this collaboration, we are utilizing advanced computational methods, machine learning, and molecular modeling techniques to perform in silico screening of over 1.2 billion compounds in chemical libraries (including publicly available compounds and OntoChem’s proprietary libraries) to evaluate if any of these compounds could disrupt one of two key enzymes of SARS-CoV-2, the virus that causes the disease COVID-19. 

 

While the screening process is ongoing and we anticipate discovering several drug candidates, we have identified a lead molecule as well as three similar analog compounds.  Our in silico molecular modeling indicates that any of these four compounds might disrupt the interaction of the virus’ endoribonuclease with a host human protein that is necessary for the virus to replicate upon infection.  Disrupting this protein-protein interaction is expected to dramatically reduce or eliminate the virus’ ability to cause disease.  The biological testing of these compounds will initially determine how well they bind to the endoribonuclease, and then how well this translates into reducing viral replication in human host cells.  We anticipate completing  the in vitro biological assays within the next two to three months.  If the biological activity of any of these compounds is verified, they will be tested in animal studies to further evaluate their candidacy as COVID-19 therapeutics.

 

Our subsidiary, Anixa Diagnostics Corporation (“Anixa Diagnostics”), is developing Cchek™, an AI driven platform of non-invasive blood tests for the early detection of cancer which is based on the body’s immune response to the presence of a malignancy.  We have demonstrated the efficacy of Cchek™ with 20 different types of cancer:  breast, lung, colon, melanoma, ovarian, liver, thyroid, pancreatic, appendiceal, uterine, osteosarcoma, leiomyosarcoma, liposarcoma, vulvar, prostate, bladder, cervical, head and neck, gastric and testicular cancers.  Breast, lung, colon and prostate cancers represent the four largest categories of cancer worldwide.

 

Based on a number of factors, including key scientific, clinical, and commercial considerations, for the past year the primary commercial focus for Cchek™ has been on developing a prostate cancer confirmatory test.  In February 2019 we formed a strategic alliance with ResearchDx, a CLIA certified, CAP Accredited laboratory, to prepare the Cchek™ Prostate Cancer Confirmation (“Cchek™ PCC”) test for launch as a laboratory developed test.  In December 2019, upon completion of independent analytical validation by ResearchDx, we announced the commercial launch of Cchek™ PCC.  We are currently conducting a number of activities to support the marketing of Cchek™ PCC, including the completion of a clinical validation study, development of marketing materials, education of key opinion leaders in urology and development of a reimbursement path for the test.  These activities, including the clinical validation study, have been delayed for a number of reasons, including the global coronavirus pandemic.

 

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Over the next several quarters, we expect the development of our breast cancer vaccine, Certainty’s CAR-T technology, our COVID-19 therapeutic discovery program and Anixa Diagnostic’s Cchek™ to be the primary focus of the Company.  As part of our legacy operations, the Company remains engaged in limited patent licensing activities in the area of encrypted audio/video conference calling.  We do not expect these activities to be a significant part of the Company’s ongoing operations nor do we expect these activities to require material financial resources or attention of senior management.

 

Over the past several years, our revenue was derived from technology licensing and the sale of patented technologies, including revenue from the settlement of litigation.  We have not generated any revenue to date from our cancer therapeutics and diagnostics programs.  In addition, while we pursue our cancer therapeutics and diagnostics programs, we may also make investments in and form new companies to develop additional emerging technologies.

 

Funding and Management’s Plans

 

Based on currently available information as of June 9, 2020, we believe that our existing cash, cash equivalents, short-term investments and expected cash flows will be sufficient to fund our activities for the next twelve months.  We have implemented a business model that conserves funds by collaborating with third parties to develop our technologies.  However, our projections of future cash needs and cash flows may differ from actual results.  If current cash on hand, cash equivalents, short-term investments and cash that may be generated from our business operations are insufficient to continue to operate our business, or if we elect to invest in or acquire a company or companies or new technology or technologies that are synergistic with or complementary to our technologies, we may be required to obtain more working capital.  During the six months ended April 30, 2020, we raised an aggregate of approximately $3,034,000, net of expenses, through the sale of 1,094,063 shares of common stock in our at-the-market equity offerings. This included  approximately $427,000, net of expenses, through the sale of 112,238 shares of common stock in an at-the market equity offering which expired in November 2019 and approximately $2,607,000, net of expenses, through the sale of 981,825 shares of common stock in an at-the-market equity offering under which we may issue up to $50 million of common stock.  Under our current at-the-market equity program which is currently effective and may remain available for us to use in the future, we may sell an additional approximately $47,248,000 of common stock.  We may seek to obtain working capital during our fiscal year 2020 or thereafter through sales of our equity securities or through bank credit facilities or public or private debt from various financial institutions where possible.  We cannot be certain that additional funding will be available on acceptable terms, or at all.  If we do identify sources for additional funding, the sale of additional equity securities or convertible debt could result in dilution to our stockholders. We can give no assurance that we will generate sufficient cash flows in the future to satisfy our liquidity requirements or sustain future operations, or that other sources of funding, such as sales of equity or debt, would be available or would be approved by our security holders, if needed, on favorable terms or at all.  If we fail to obtain additional working capital as and when needed, such failure could have a material adverse impact on our business, results of operations and financial condition.  Furthermore, such lack of funds may inhibit our ability to respond to competitive pressures or unanticipated capital needs, or may force us to reduce operating expenses, which would significantly harm the business and development of operations.

 

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Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X.  Accordingly, certain information and disclosures required by generally accepted accounting principles in annual financial statements have been omitted or condensed.  These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures included in our Annual Report on Form 10-K for the year ended October 31, 2019.  The accompanying October 31, 2019 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by US GAAP.  The condensed consolidated financial statements include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair statement of our financial position as of April 30, 2020, and results of operations and cash flows for the interim periods represented.  The results of operations for the six months ended April 30, 2020 are not necessarily indicative of the results to be expected for the entire year.

 

Noncontrolling Interest

 

Noncontrolling interest represents Wistar’s equity ownership in Certainty and is presented as a component of equity.  The following table sets forth the changes in noncontrolling interest for the six months ended April 30, 2020:

 

Balance, October 31, 2019

$

(422,975)

Net loss attributable to noncontrolling interest

 

(41,929)

Balance, April 30, 2020

$

(464,904)

 

Revenue Recognition

 

Since fiscal 2016 our revenue has been derived solely from technology licensing and the sale of patented technologies.  Revenue is recognized upon transfer of control of intellectual property rights and satisfaction of other contractual performance obligations to licensees in an amount that reflects the consideration we expect to receive. 

 

On November 1, 2018 we adopted Accounting Standards Update 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers using the modified retrospective method.  Upon adoption of ASU 2014-09 we are required to make certain judgments and estimates in connection with the accounting for revenue.  Such areas may include determining the existence of a contract and identifying each party’s rights and obligations to transfer goods and services, identifying the performance obligations in the contract, determining the transaction price and allocating the transaction price to separate performance obligations, estimating the timing of satisfaction of performance obligations, determining whether a promise to grant a license is distinct from other promised goods or services and evaluating whether a license transfers to a customer at a point in time or over time.

 

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Our revenue arrangements provide for the payment of contractually determined, one-time, paid-up license fees in settlement of litigation and in consideration for the grant of certain intellectual property rights for patented technologies owned or controlled by the Company.  These arrangements typically include some combination of the following: (i) the grant of a non-exclusive, retroactive and future license to manufacture and/or sell products covered by patented technologies owned or controlled by the Company, (ii) a covenant-not-to-sue, (iii) the release of the licensee from certain claims, and (iv) the dismissal of any pending litigation.  In such instances, the intellectual property rights granted have been perpetual in nature, extending until the expiration of the related patents.  Pursuant to the terms of these agreements, we have no further obligations with respect to the granted intellectual property rights, including no obligation to maintain or upgrade the technology, or provide future support or services.  Licensees obtained control of the intellectual property rights they have acquired upon execution of the agreement.  Accordingly, the performance obligations from these agreements were satisfied and 100% of the revenue was recognized upon the execution of the agreements.  The adoption of ASU 2014-09 had no impact on revenue recognized.

 

Cost of Revenues

 

Cost of revenues include the costs and expenses incurred in connection with our patent licensing and enforcement activities, including inventor royalties paid to original patent owners, contingent legal fees paid to external counsel, other patent-related legal expenses paid to external counsel, licensing and enforcement related research, consulting and other expenses paid to third-parties and the amortization of patent-related investment costs.  These costs are included under the caption “Operating costs and expenses” in the accompanying condensed consolidated statements of operations.

 

Research and Development Expenses

Research and development expenses, consisting primarily of employee compensation, payments to third parties for research and development activities and other direct costs associated with developing a platform for non-invasive blood tests for early detection of cancer, developing immuno-therapy drugs against cancer, development of our breast cancer vaccine and development of anti-viral drugs candidates for COVID-19, are expensed in the consolidated financial statements in the period incurred.

 

2.         STOCK BASED COMPENSATION

 

The Company maintains stock equity incentive plans under which the Company grants incentive stock options, non-qualified stock options, stock appreciation rights, stock awards, performance awards, or stock units to employees, directors and consultants.

 

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Stock Option Compensation Expense

 

The compensation cost for service-based stock options granted to employees and directors is measured at the grant date, based on the fair value of the award using the Black-Scholes pricing model, and is expensed on a straight-line basis over the requisite service period (the vesting period of the stock option) which is one to four years.  We recorded stock-based compensation expense related to service-based stock options granted to employees and directors of approximately $2,019,000 and $1,649,000 during the six months ended April 30, 2020 and 2019, respectively, and approximately $1,055,000 and $805,000 during the three months ended April 30, 2020 and 2019, respectively.

 

For stock options granted to employees and directors that vest based on market conditions, such as the trading price of the Company’s common stock exceeding certain price targets, we use a Monte Carlo Simulation in estimating the fair value at grant date and recognize compensation cost over the implied service period (median time to vest).  On May 8, 2018, we issued market condition options to purchase 1,500,000 shares of common stock, to our Chairman, President and Chief Executive Officer, vesting at target trading prices of $5.00 to $8.00 per share before May 31, 2021, with implied service periods of three to seven months.  In October 2018, the first tranche of 500,000 shares of market condition options became exercisable upon achieving an average closing price above $5.00 per share for twenty consecutive trading days.  We recorded stock-based compensation expense related to market condition stock options granted to employees of approximately $-0- and $376,000 during the six months ended April 30, 2020 and 2019, respectively.  We did not have any market condition stock-based compensation expense during the three months ended April 30, 2020 and 2019.

 

On November 1, 2018 we adopted Accounting Standards Update 2018-07 (“ASU 2018-07”) for stock options granted to consultants.  Upon adoption of ASU 2018-07 we estimated the fair value of unvested service-based and performance-based stock options at the date of adoption, using the Black-Scholes pricing model.  Subsequent to adoption of ASU 2018-07, future grants to consultants are measured at the grant date, based on the fair value of the award using the Black-Scholes pricing model, consistent with our policy for grants to employees and directors.  In prior periods, in accordance with US GAAP, we estimated the fair value of service-based and performance-based stock options granted to consultants at each reporting period using the Black-Scholes pricing model.  We recognize the fair value of stock options granted to consultants as consulting expense over the requisite or implied service period of the grant.  We recorded stock-based consulting expense related to stock options granted to consultants of approximately $112,000 and $50,000 during the six months ended April 30, 2020 and 2019, respectively, and approximately $55,000 and $25,000 during the three months ended April 30, 2020 and 2019, respectively.

 

Stock Option Activity

 

During the six months ended April 30, 2020, we granted options to purchase 800,000 shares of common stock to employees and consultants, with exercise prices ranging from $3.84 to $4.04 per share, pursuant to the Anixa Biosciences, Inc. 2018 Share Incentive Plan (the “2018 Share Plan”).  We did not grant any options during the six months ended April 30, 2019.  During the six months ended April 30, 2020 and 2019, stock options to purchase 43,900 and 30,000 shares of common stock, respectively, were exercised with aggregate proceeds of approximately $104,000 and $80,000, respectively. 

 

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Stock Option Plans

 

During the six months ended April 30, 2020, we had three stock option plans: the Anixa Biosciences, Inc. 2003 Share Incentive Plan (the "2003 Share Plan"), the Anixa Biosciences, Inc. 2010 Share Incentive Plan (the "2010 Share Plan") and the 2018 Share Plan, which were adopted by our Board of Directors on April 21, 2003, July 14, 2010 and January 25, 2018, respectively.  The 2018 Share Plan was approved by our shareholders on March 29, 2018.

 

2003 Plan

 

During the six months ended April 30, 2020, the remaining outstanding options granted under the 2003 Share Plan expired.  In accordance with the provisions of the 2003 Share Plan, the plan terminated with respect to the ability to grant future options on April 21, 2013.  Information regarding the 2003 Share Plan for the six months ended April 30, 2020 is as follows:

 

Weighted

Average Exercise

Price Per Share

Aggregate
Intrinsic
Value

Shares

Options outstanding at October 31, 2019

  400

 

 

$ 17.00

 

 

Forfeited

  (400)

 

$ 17.00

Options outstanding and exercisable at

   April 30, 2020

        -

 

 

   $  -0-

 

 

$  -0-

 

Information regarding the 2003 Share Plan for the six months ended April 30, 2019 is as follows:

 

Weighted

Average Exercise

Price Per Share

Aggregate
Intrinsic
Value

Shares

Options outstanding at October 31, 2018

  12,000

 

 

$ 2.77

 

 

Exercised

  (4,000)

 

$ 3.63

Options outstanding and exercisable at

   April 30, 2019

    8,000

 

 

     $ 2.34

 

 

$ 19,666

 

The following table summarizes information about stock options outstanding and exercisable under the 2003 Share Plan as of April 30, 2019:

 

Weighted Average

Remaining

Contractual Life

(in years)

Weighted

Average

Exercise
Price

Range of

Exercise Prices

Number

Outstanding

and

Exercisable

$ 0.67 - $17.00

 

8,000

 

0.45

 

$ 2.34

 

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2010 Plan

 

The 2010 Share Plan provides for the grant of nonqualified stock options, stock appreciation rights, stock awards, performance awards and stock units to employees, directors and consultants.  As of April 30, 2020, the 2010 Share Plan had 800,000 shares available for future grants.  Information regarding the 2010 Share Plan for the six months ended April 30, 2020 is as follows:

 

 Weighted

Average Exercise

 Price Per Share

Aggregate
 Intrinsic

 Value

Shares

Options Outstanding at October 31, 2019

1,998,668

 

 

$ 2.80       

 

 

 

Exercised

(43,900)

 

$ 2.36       

 

Forfeited

(5,534)

 

 

$ 2.58       

 

 

   

Options Outstanding at April 30, 2020

     1,949,234

 

$ 2.81       

 

$ 291,195

Options Exercisable at April 30, 2020

1,740,484

 

 

$ 2.85       

 

 

$ 213,820

 

The following table summarizes information about stock options outstanding and exercisable under the 2010 Share Plan as of April 30, 2020:

 

Options Outstanding

Options Exercisable

Weighted

Average

Remaining

Contractual Life

(in years)

Weighted

Average

Remaining

Contractual Life

(in years)

Weighted

Average

Exercise Price

Weighted

Average

Exercise Price

Range of

Exercise Prices

Number

Outstanding

Number

Exercisable

 

$0.67 - $2.30

561,500

6.03

$1.56

480,250

5.84

$1.66

$2.58 - $3.13

853,200

3.28

$2.79

853,200

3.72

$2.79

$3.46 - $5.75

534,534

7.69

$4.16

 

407,034

7.54

$4.38

 

Information regarding the 2010 Share Plan for the six months ended April 30, 2019 is as follows:

 

 Weighted

Average Exercise

 Price Per Share

Aggregate
 Intrinsic

 Value

Shares

Options outstanding at October 31, 2018

2,131,868

 

 

$ 2.11

 

 

 

Exercised

(22,000)

 

$ 2.27

 

Forfeited

(87,200)

 

 

$ 3.34

 

 

 

Options outstanding at April 30, 2019

2,022,668

 

$ 2.06

 

$ 4,452,704

Options exercisable at April 30, 2019

1,580,168

 

 

$ 1.88

 

 

$ 3,732,441

 

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The following table summarizes information about stock options outstanding and exercisable under the 2010 Share Plan as of April 30, 2019:

           

Options Outstanding

Options Exercisable

Weighted

Average

Remaining

Contractual Life

(in years)

Weighted

Average

Remaining

Contractual Life

(in years)

Weighted

Average

Exercise Price

Weighted

Average

Exercise Price

Range of

Exercise Prices

Number

Outstanding

Number

Exercisable

 

$0.67

938,000

6.19

$0.67

776,750

5.78

$0.67

$ 2.27 -$ 3.01

610,134

4.07

$2.58

610,134

4.07

$2.58

$ 3.46 -$ 7.00

474,534

8.62

$4.13

 

193,284

7.64

$4.57

 

            2018 Plan

 

The 2018 Share Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, performance awards and stock units to employees, directors and consultants.  As of April 30, 2020, the 2018 Share Plan had 2,000,000 shares available for future grants.  Information regarding the 2018 Share Plan for the six months ended April 30, 2020 is as follows:

 

 Weighted

Average Exercise

 Price Per Share

Aggregate
 Intrinsic

 Value

Shares

Options Outstanding at October 31, 2019

3,935,500

 

 

$ 3.74

 

 

 

Granted

800,000

 

$ 3.85

 

Options Outstanding at April 30, 2020

4,735,000

 

$ 3.76

 

$ -0-

Options Exercisable at April 30, 2020

2,107,779

 

 

$ 3.75

 

 

$ -0-

 

The following table summarizes information about stock options outstanding and exercisable under the 2018 Share Plan as of April 30, 2020:

 

Options Outstanding

Options Exercisable

Weighted

Average

Remaining

Contractual Life

(in years)

Weighted

Average

Remaining

Contractual Life

(in years)

Weighted

Average

Exercise Price

Weighted

Average

Exercise Price

Range of

Exercise Prices

Number

Outstanding

Number

Exercisable

 

$3.70

3,100,000

8.03

$3.70

1,566,666

8.03

$3.70

$ 3.84 - $4.61

1,635,000

8.92

$3.88

541,113

8.37

$3.75

 

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Information regarding the 2018 Share Plan for the six months ended April 30, 2019 is as follows:

 

 Weighted

Average Exercise

 Price Per Share

Aggregate
 Intrinsic

 Value

Shares

Options outstanding at October 31, 2018

3,482,000

 

 

$ 3.73

 

 

 

Exercised

(4,000)

 

$ 3.84

 

Forfeited

(8,000)

 

 

$ 3.84

 

 

 

Options outstanding at April 30, 2019

3,470,000

 

$ 3.73

 

$ 1,525,200

Options exercisable at April 30, 2019

1,156,947

 

 

$ 3.72

 

 

$ 511,156

 

The following table summarizes information about stock options outstanding and exercisable under the 2018 Share Plan as of April 30, 2019:

 

Options Outstanding

Options Exercisable

Weighted

Average

Remaining

Contractual Life

(in years)

Weighted

Average

Remaining

Contractual Life

(in years)

Weighted

Average

Exercise Price

Weighted

Average

Exercise Price

Range of

Exercise Prices

Number

Outstanding

Number

Exercisable

 

$ 3.70 - $4.61

3,470,000

9.03

$3.73

1,156,947

9.02

$ 3.72

 

Outside of Share Plans

 

In addition to options granted under the 2003 Share Plan, the 2010 Share Plan and the 2018 Share Plan, during the years ended October 31, 2012 and 2013, the Board of Directors approved the grant of stock options to certain employees and directors.  Information regarding stock options that were granted outside of Share Plans for the six months ended April 30, 2020 is as follows:

 

Weighted

Average Exercise

Price Per Share

Aggregate

Intrinsic

Value

Shares

 

Options Outstanding at October 31, 2019

1,698,000

$ 2.58

$ -0-

Options Outstanding and exercisable at  

   April 30, 2020

1,698,000

 

 

$ 2.58

 

 

$ -0-

 

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The following table summarizes information about stock options outstanding and exercisable that were granted outside of Share Plans as of  April 30, 2020:

 

Weighted Average

Remaining

Contractual Life

(in years)

Number

Outstanding
and

Exercisable

Weighted

Average

Exercise Price

Range of

Exercise Prices

$2.58

1,698,000

2.25

$ 2.58

 

Information regarding stock options that were granted outside of Share Plans for the six months ended April 30, 2019 is as follows:

 

Weighted

Average Exercise

Price Per Share

Aggregate

Intrinsic

Value

Shares

 

Options outstanding at October 31, 2018

1,780,000

$ 1.58

Options outstanding and exercisable at  

    April 30, 2019

1,780,000

 

 

$ 1.58

 

 

$ 4,683,960

 

The following table summarizes information about stock options outstanding and exercisable that were granted outside of Share Plans as of April 30, 2019:

 

Weighted Average

Remaining

Contractual Life

(in years)

Number

Outstanding
and

Exercisable

Weighted

Average

Exercise Price

Range of

Exercise Prices

$0.67

1,046,000

3.30

$ 0.67

$ 2.58-$ 5.56

 

734,000

 

2.85

 

$ 2.88

 

Stock Awards

 

For stock awards granted to employees, directors and consultants that vest upon grant we recognize expense at the date of grant based on the grant date market price of the underlying common stock.  We did not grant any stock awards that vested upon grant during the six months ended April 30, 2020 or 2019.

 

On May 8, 2018, a restricted stock award of 1,500,000 shares of common stock was granted under the 2018 Share Plan to our Chairman, President and Chief Executive Officer.  The restricted stock award vests in its entirety upon achievement of a target trading price of $11.00 per share of the Company’s common stock before May 31, 2021.  For restricted stock awards vesting upon achievement of a price target of our common stock we use a Monte Carlo Simulation in estimating the fair value at grant date and recognize compensation cost over the implied service period (median time to vest).  During the six-month and three-month periods ended April 30, 2019, we recorded compensation expense related to the restricted stock award of approximately $1,954,000 and $470,000, respectively.  We did not record any compensation expense related to the restricted stock award during the six-month period ended April 30, 2020.

 

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Employee Stock Purchase Plan

 

            The Company maintains the Anixa Biosciences, Inc. Employee Stock Purchase Plan which permits eligible employees to purchase shares at not less than 85% of the market value of the Company’s common stock on the offering date or the purchase date of the applicable offering period, whichever is lower.  The plan was adopted by our Board of Directors on August 13, 2018 and approved by our shareholders on September 27, 2018.  During the six months ended April 30, 2020, employees purchased 9,618 shares with aggregate proceeds of approximately $15,000.  During the six months ended April 30, 2019, employees purchased 5,411 shares with aggregate proceeds of approximately $19,000.

 

Warrants

 

During the six months ended April 30, 2019 we issued a warrant, expiring on November 1, 2023, to purchase 25,000 shares of common stock at $4.04 per share, vesting over 12 months, to a consultant for investor relations services.  On November 1, 2019 the warrant was exchanged for a stock option with the same terms as the warrant.  During the six-month and three-month periods ended April 30, 2019, we recorded consulting expense of approximately $43,000 and $21,000, respectively, based on the fair value of the warrant recognized on a straight-line basis over the vesting period.  No warrants were issued during the six months ended April 30, 2020.

 

As of April 30, 2020, we also had warrants outstanding to purchase 500,000 shares of common stock at $5.03 per share expiring on November 30, 2021.

 

3.         FAIR VALUE MEASUREMENTS

US GAAP defines fair value and establishes a framework for measuring fair value.  We have categorized our financial assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below.  If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

 

Financial assets and liabilities recorded in the accompanying condensed consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:

 

Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market which we have the ability to access at the measurement date.

 

Level 2 - Financial assets and liabilities whose values are based on quoted market prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets.  

 

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Table of Contents

 

Level 3 – Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset and liabilities.

 

The following table presents the hierarchy for our financial assets measured at fair value on a recurring basis as of April 30, 2020:

 

  

Level 1

Level 2

Level 3

Total

Money market funds:

    Cash and cash equivalents

 

$

 

2,596,963

 

 

$

 

-

 

 

$

 

-

 

 

$

 

2,596,963

Certificates of deposit:

    Short-term investments

 

 

 

-

 

 

 

 

2,620,000

 

 

 

 

-

 

 

 

 

2,620,000

Total financial assets

$

2,596,963

 

$

2,620,000

 

$

-

 

$

5,216,963

 

The following table presents the hierarchy for our financial assets measured at fair value on a recurring basis as of October 31, 2019:

 

Level 1

Level 2

Level 3

Total

Money market funds: 

    Cash and cash equivalents

 

$

 

2,706,944

 

 

$

 

-

 

 

$

 

-

 

 

$

 

2,706,944

Certificates of deposit:

    Cash and cash equivalents

 

 

500,000

 

 

 

-

 

 

 

-

 

 

 

500,000

 Short-term investments

 

-

 

 

2,350,000

 

 

-

 

 

2,350,000

Total financial assets

$

3,206,944

$

2,350,000

$

-

$

5,556,944

 

The following table presents the hierarchy for our financial liabilities measured at fair value on a recurring basis as of April 30, 2020:

 

  

Level 1

Level 2

Level 3

Total