Company: ANIX
Filing Date: 2025-03-11
Form Type: 10-Q
Source: 0001493152-25-009854
Chunk: 7

Company: Anixa Biosciences Inc
Filing Date: 2025-03-11
Form: 10-Q
Item: Part I, Item 8
Chunk 7
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 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.

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 and consulting and other expenses paid to third-parties. These costs are included under the caption “Operating
costs and expenses” in the accompanying consolidated statements of operations.

     8 

Research and Development Expenses

Research and development expenses
consist primarily of employee compensation, payments to third parties for research and development activities and other direct costs associated
with developing our therapeutics and vaccines. We recognize research and development expenses as incurred. Advance payments for future
research and development activities are deferred and expensed as the services are performed. We recognize our preclinical studies and
clinical trial expenses based on the services performed pursuant to contracts with research institutions, clinical research organizations
(“CROs”), clinical manufacturing organizations (“CMOs”), and other parties that conduct and manage various stages
of research and development activities on our behalf. Fees for such services are recognized based on management’s estimates after
considering the activities and tasks completed by each service provider in a given period, the time period over which services are expected
to be performed, and the level of effort expended in each reporting period.

At each
balance sheet date, management estimates prepaid and accrued research and development costs by discussing progress or stage of completion
of activities with internal personnel and external service providers, and comparing this information to payments made, invoices received,
and the agreed-upon contractual fee to be paid for such services