Company: ANIX
Filing Date: 2025-09-10
Form Type: 10-Q
Source: 0001493152-25-013000
Chunk: 17

Company: Anixa Biosciences Inc
Filing Date: 2025-09-10
Form: 10-Q
Item: Part I, Item 1
Chunk 17
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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 condensed consolidated statements of operations.

    9

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 in the applicable contract or statements of work.

In
addition, we allocate certain internal compensation costs to research and development expenses based on management’s estimates
of each employee’s time and effort expended.

Investment
Policy

The
Company’s investment policy is designed to optimize returns while managing risk and liquidity. The policy allows for investments
in a diversified range of financial instruments, including U.S. government debt securities with fixed maturities and contractual cash
flows, as well as alternative investments such as Bitcoin and Bitcoin-based exchange traded funds (collectively, the “Bitcoin Assets”).

The
Company acquires U.S. government debt securities that it has the positive intent and ability