8. INCOME TAXES

Income tax provision (benefit) consists of the following:

 SCHEDULE OF INCOME TAX PROVISION (BENEFIT)

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The tax effects of temporary differences that give rise to significant portions of the deferred tax asset, net, at October 31, 2022 and 2021, are as follows:

 SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

As of October 31, 2022, we had Federal tax net operating loss and tax credit carryforwards of approximately $91,947,000 and $1,614,000, respectively. At the federal level, businesses can carry forward their net operating losses indefinitely, but the deductions are limited to 80 percent of taxable income. Prior to the Tax Cuts and Jobs Act (TCJA) of 2017, businesses could carry losses forward for 20 years (without a deductibility limit). If the tax benefits relating to deductions of option holders’ income are ultimately realized, those benefits will be credited directly to additional paid-in capital. Certain changes in stock ownership can result in a limitation on the amount of net operating loss and tax credit carryovers that can be utilized each year. As of October 31, 2022, management has not determined the extent of any such limitations, if any.

We had California tax net operating loss carryforwards of approximately $42,712,000 as of October 31, 2022, available within statutory limits (expiring at various dates between 2023 and 2042), to offset future corporate taxable income and taxes payable, if any, under certain computations of such taxes.

We have provided a 100% valuation allowance against our deferred tax asset due to our current and historical pre-tax losses and the uncertainty regarding their realizability. The primary differences from the Federal statutory rate of 21% and the effective rate of 0% is attributable to expiring net operating losses and a change in the valuation allowance. The following is a reconciliation of income taxes at the Federal statutory tax rate to income tax expense (benefit):

 SCHEDULE OF RECONCILIATION OF INCOME TAXES

During the two fiscal years ended October 31, 2022, we incurred no Federal and no State income taxes. We have no unrecognized tax benefits as of October 31, 2022 and 2021 and we account for interest and penalties related to income tax matters in general and administrative expenses. Tax years to which our net operating losses relate remain open to examination by Federal and California authorities to the extent which the net operating losses have yet to be utilized.

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS