Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Oct. 31, 2021

6.       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 was set to expire on September 30, 2021. Effective August 17, 2021, the lease was amended to extend the expiration date to September 30, 2024, with an option to extend the lease an additional two years. Our 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 amendment to the lease resulted in a right-of-use asset and lease liability of approximately $260,000 with a discount rate of 10%. Rent expense was approximately $64,000 and $64,000, respectively, for the years ended October 31, 2021 and 2020.


On November 1, 2019, the Company adopted ASC 842, which increases transparency and comparability by recognizing a lessee’s rights and obligations resulting from leases by recording them on the balance sheet as lease assets and lease liabilities. The new guidance requires the recognition of the right-of-use (“ROU”) assets and related operating lease liabilities on the balance sheet. The Company adopted the new guidance using the modified retrospective approach on November 1, 2019. The Company elected the package of practical expedients permitted within the standard, which allow an entity to forgo reassessing (i) whether a contract contains a lease, (ii) classification of leases, and (iii) whether capitalized costs associated with a lease meet the definition of initial direct costs. Also, the Company elected the expedient allowing an entity to use hindsight to determine the lease term and impairment of ROU assets and the expedient to allow the Company to not have to separate lease and non-lease components. The Company has also elected the short-term lease accounting policy under which Anixa would not recognize a lease liability or ROU asset for any lease that at the commencement date has a lease term of twelve months or less and does not include a purchase option that Anixa is more than reasonably certain to exercise.


For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments. The remaining 59-month lease term as of October 31, 2021 for the Company’s lease includes the noncancelable period of the lease and the additional two-year option period that the Company expects to exercise. All ROU assets are reviewed for impairment.







Balance sheet information related to the Company’s lease is presented below:



Balance Sheet



October 31,



October 31,


Operating Lease:                    

Right-of-use asset


Operating lease right- of-use asset

    253,955       54,340  

Right-of-use liability, current

  Operating lease liability     39,397       55,198  

Right-of-use liability, long-term


Operating lease liability, non-current

    220,082       -  


As of October 31, 2021, the annual minimum lease payments of our operating lease liability were as follows:


For Years Ending October 31,   Operating Leases  
2022   $ 63,579  
2023     65,491  
2024     67,452  
2025     69,473  
2026     65,428  
Total future minimum lease payments, undiscounted     331,423  
Less: Imputed interest     71,944  
Present value of future minimum lease payments   $ 259,479