Company: ANIX
Filing Date: 2025-05-28
Form Type: 10-Q
Source: 0001641172-25-012701
Chunk: 16

Company: Anixa Biosciences Inc
Filing Date: 2025-05-28
Form: 10-Q
Item: Part I, Item 8
Chunk 16
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 deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases
of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. A valuation
allowance is established, when necessary, to reduce deferred tax assets to the amount expected to be realized. We have provided a full
valuation allowance against our deferred tax asset due to our historical pre-tax losses and the uncertainty regarding the realizability
of these deferred tax assets.

We have substantial net operating
loss carryforwards for Federal and California income tax returns. These net operating loss carryforwards could be subject to limitations
under Internal Revenue Code section 382, the effects of which have not been determined by the Company. We have no unrecognized income
tax benefits as of April 30, 2025 and October 31, 2024 and we account for interest and penalties related to income tax matters, if any,
in general and administrative expenses.

    14

9. LEASES

We lease approximately 2,000 square
feet of office space at 3150 Almaden Expressway, San Jose, California (our principal executive offices) from an unrelated party pursuant
to an operating lease that, as amended, will expire on September 30, 2027, with an option to extend the lease an additional two years.
The base rent is approximately $5,000 per month and the lease provides for annual increases of approximately 3% and an escalation clause
for increases in certain operating costs. The lease, as amended, resulted in a right-of-use asset and lease liability of approximately
$250,000 with a discount rate of 12%. Rent expense was approximately $16,000 and $17,000, respectively, for the three months ended April
30, 2025 and 2024, and approximately $31,000 and $33,000, respectively, for the six months ended April 30 2025 and 2024.

For operating leases, the lease
liability is initially and subsequently measured at the present value of the unpaid lease payments. The remaining 53-month lease term
as of April 30, 2025 for the Company’s lease includes the noncancelable period of the lease and the additional two-year option period
that the Company is reasonably certain to exercise. All right-of-use assets are reviewed for impairment when indications of impairment
are present.

As of April 30, 2025, the annual
minimum future