Quarterly Report for Quarter Ending July 31, 2025 (Form 10-Q)

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

Information included in this Quarterly Report on Form 10-Q (this "Report") contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are not statements of historical facts, but rather reflect our current expectations concerning future events and results. We generally use the words "believes," "expects," "intends," "plans," "anticipates," "likely," "will" and similar expressions to identify forward-looking statements. Such forward-looking statements, including those concerning our expectations, involve risks, uncertainties and other factors, some of which are beyond our control, which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and factors include, but are not limited to, those factors set forth in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024. Except as required by applicable law, including the securities laws of the United States, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this Report.

GENERAL

We discuss the description of our business in the Notes to our Condensed Consolidated Financial Statements.

RESULTS OF OPERATIONS

Three months ended July 31, 2025 compared with three months ended July 31, 2024

Revenue

We had no revenue during the three-month periods ended July 31, 2025 and 2024.

We have not generated any revenue to date from our therapeutics or vaccine programs. In addition, while we pursue our therapeutics and vaccine programs, we may also make investments in and form new companies to develop additional emerging technologies. We do not expect to begin generating revenue with respect to any of our current therapy or vaccine programs in the near term. We hope to achieve a profitable outcome by eventually licensing our technologies to large pharmaceutical companies that have the resources and infrastructure in place to manufacture, market and sell our technologies as therapeutics or vaccines. The eventual licensing of any of our technologies may take several years, if it is to occur at all, and may depend on positive results from human clinical trials.

Research and Development Expenses

During the three months ended July 31, 2025, research and development expenses related to the development of our cancer vaccines and CAR-T therapeutics consisted of approximately $615,000 and $440,000, respectively. During the three months ended July 31, 2024 research and development expenses related to the development of our cancer vaccines and CAR-T therapeutics consisted of approximately $1,259,000 and $666,000, respectively.

Research and development expenses decreased by approximately $870,000 to approximately $1,055,000 in the three months ended July 31, 2025, from approximately $1,925,000 in the three months ended July 31, 2024. The decrease in research and development expenses was primarily due to a decrease in outside research and development expenses related to our breast cancer vaccine of approximately $631,000, a decrease in outside research and development expenses related to our ovarian cancer CAR-T therapeutic of approximately $170,000, a decrease in employee stock-based compensation expense of approximately $106,000, and a decrease in clinical consulting services of approximately $52,000, offset by an increase in employee compensation and related costs, other than stock-based compensation expense, of approximately $96,000.

General and Administrative Expenses

General and administrative expenses decreased by approximately $286,000 to approximately $1,381,000 in the three months ended July 31, 2025, from approximately $1,667,000 in the three months ended July 31, 2024. The decrease in general and administrative expenses was primarily due to a decrease in director stock-based compensation of approximately $98,000, a decrease in investor and public relations expense of approximately $94,000, a decrease in employee compensation and related costs, other than stock-based compensation expense, of approximately $77,000 and a decrease in employee stock-based compensation of approximately $61,000.

Interest Income

Interest income decreased by approximately $121,000 to approximately $156,000 in the three months ended July 31, 2025, from approximately $277,000 in the three months ended July 31, 2024, primarily due to a decrease in the amount of short-term investments held and a decrease in interest rates.

Net Loss Attributable to Noncontrolling Interest

The net loss attributable to noncontrolling interest, representing Wistar's ownership interest in Certainty's net loss, decreased by approximately $16,000 to approximately $22,000 in the three months ended July 31, 2025 from approximately $38,000 in the three months ended July 31, 2024, as Certainty's net loss decreased.

Nine months ended July 31, 2025 compared with nine months ended July 31, 2024

Revenue

We had no revenue during the nine-month periods ended July 31, 2025 and 2024.

We have not generated any revenue to date from our therapeutics or vaccine programs. In addition, while we pursue our therapeutics and vaccine programs, we may also make investments in and form new companies to develop additional emerging technologies. We do not expect to begin generating revenue with respect to any of our current therapy or vaccine programs in the near term. We hope to achieve a profitable outcome by eventually licensing our technologies to large pharmaceutical companies that have the resources and infrastructure in place to manufacture, market and sell our technologies as therapeutics or vaccines. The eventual licensing of any of our technologies may take several years, if it is to occur at all, and may depend on positive results from human clinical trials.

Research and Development Expenses

During the nine months ended July 31, 2025, research and development expenses related to the development of our cancer vaccines and CAR-T therapeutics consisted of approximately $2,489,000 and $1,440,000, respectively. During the nine months ended July 31, 2024 research and development expenses related to the development of our cancer vaccines and CAR-T therapeutics consisted of approximately $2,827,000 and $2,093,000, respectively.

Research and development expenses decreased by approximately $991,000 to approximately $3,929,000 in the nine months ended July 31, 2025, from approximately $4,920,000 in the nine months ended July 31, 2024. The decrease in research and development expenses was primarily due to a decrease in outside research and development expenses related to our breast cancer vaccine of approximately $524,000, a decrease in outside research and development expenses related to our ovarian cancer CAR-T therapeutic of approximately $402,000, a decrease in employee stock-based compensation expense of approximately $271,000, offset by an increase in outside research and development expenses related to our new vaccine discovery program of approximately $113,000, and an increase in technology licensing fees of approximately $56,000.

General and Administrative Expenses

General and administrative expenses decreased by approximately $852,000 to approximately $4,896,000 in the nine months ended July 31, 2025, from approximately $5,748,000 in the nine months ended July 31, 2024. The decrease in general and administrative expenses was primarily due to a decrease in investor and public relations expense of approximately $478,000, a decrease in director stock-based compensation of approximately $280,000, a decrease in employee stock-based compensation of approximately $68,000, and a decrease in consulting fees of approximately $58,000, offset by an increase in patent-related costs of approximately $67,000.

Interest Income

Interest income decreased by approximately $364,000 to approximately $519,000 in the nine months ended July 31, 2025, from approximately $883,000 in the nine months ended July 31, 2024, primarily due to a decrease in the amount of short-term investments held and a decrease in interest rates.

Net Loss Attributable to Noncontrolling Interest

The net loss attributable to noncontrolling interest, representing Wistar's ownership interest in Certainty's net loss, decreased by approximately $40,000 to approximately $74,000 in the nine months ended July 31, 2025 from approximately $114,000 in the nine months ended July 31, 2024, as Certainty's net loss decreased.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash, cash equivalents and short-term investments.

Based on currently available information as of September 10, 2025, we believe that our existing cash, cash equivalents and short-term investments will be sufficient to fund our activities for at least the next twelve months. The Company had approximately $16,029,000 of cash, cash equivalents and short-term investments at July 31, 2025 compared to approximately $19,924,000 at October 31, 2024 which is a reduction of approximately $3,895,000 for the nine months ended July 31, 2025. Therefore, the Company believes that it has sufficient cash, cash equivalents and short-term investments to operate its business, as currently contemplated, for significantly longer than 12 months from the date of this Report. We have implemented a business model that conserves funds by collaborating with third parties to develop our technologies. During the nine months ended July 31, 2025, we raised approximately $1,924,000, net of expenses, through an at-the-market equity offering of 611,686 shares of common stock. Under our at-the-market equity program, which is currently effective and may remain available for us to use in the future, as of July 31, 2025, we may sell approximately $95 million of common stock.

During the nine months ended July 31, 2025, cash used in operating activities was approximately $5,918,000. Cash provided by investing activities was approximately $4,212,000, resulting from the maturities of short-term investments of approximately $40,912,000, offset by purchases of short-term investments of approximately $36,700,000. Cash provided by financing activities was approximately $1,930,000, resulting from the sale of 611,686 shares of common stock in an at-the-market equity offering of approximately $1,924,000, net of expenses, proceeds from the sale of common stock pursuant to an employee stock purchase plan of approximately $4,000 and proceeds from stock option exercises of approximately $2,000. As a result, our cash, cash equivalents, and short-term investments at July 31, 2025 decreased approximately $3,895,000 to approximately $16,029,000 from approximately $19,924,000 at the end of fiscal year 2024.

CRITICAL ACCOUNTING POLICIES

The Company's condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. In preparing these financial statements, we make assumptions, judgments and estimates that can have a significant impact on amounts reported in our condensed consolidated financial statements. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. On a regular basis, we evaluate our assumptions, judgments and estimates and make changes accordingly.

We believe that, of the significant accounting policies discussed in Note 2 to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024, the following accounting policies require our most difficult, subjective or complex judgments:

	●	Revenue Recognition,
	●	Stock-Based Compensation, and
	●	Research and Development Expenses.

Revenue Recognition

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.

Our revenue recognition policy requires us 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.

Our revenue arrangements provide for the payment, within 30 days of execution of the agreement, 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.

Stock-Based Compensation

The compensation cost for service-based stock options granted to employees, directors and consultants is measured at the grant date, based on the fair value of the award using the Black-Scholes pricing model, and is recognized as an expense on a straight-line basis over the requisite service period (the vesting period of the stock option) which is one to four years. For employee options vesting if the trading price of the Company's common stock exceeds 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.

For stock awards granted to employees and directors that vest at date of grant we recognize expense based on the grant date market price of the underlying common stock. 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).

The Black-Scholes pricing model and the Monte Carlo Simulation we use to estimate fair value requires valuation assumptions of expected term, expected volatility, risk-free interest rates and expected dividend yield. The expected term of stock options represents the weighted average period the stock options are expected to remain outstanding. For employees we use the simplified method, which is a weighted average of the vesting term and contractual term, to determine expected term. The simplified method was adopted since we do not believe that historical experience is representative of future performance because of the impact of the changes in our operations and the change in terms from historical options. For consultants we use the contract term for expected term. Under the Black-Scholes pricing model, we estimated the expected volatility of our shares of common stock based upon the historical volatility of our share price over a period of time equal to the expected term of the grants. We estimated the risk-free interest rate based on the implied yield available on the applicable grant date of a U.S. Treasury note with a term equal to the expected term of the underlying grants. We made the dividend yield assumption based on our history of not paying dividends and our expectation not to pay dividends in the future.

We will reconsider use of the Black-Scholes pricing model and the Monte Carlo Simulation if additional information becomes available in the future that indicates another model would be more appropriate. If factors change and we employ different assumptions in future periods, the compensation expense that we record may differ significantly from what we have recorded in the current period.

Research and Development Expenses

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.

EFFECT OF RECENTLY ISSUED PRONOUNCEMENTS

We discuss the effect of recently issued pronouncements in Note 7 of the condensed consolidated financial statements, included elsewhere in this Report.