UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

þ
þ
ANNUAL REPORT PURSUANT TO SECTION 13OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 2018

For the fiscal year endedApril 30, 2015

or

¨
¨
TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto

For the transition period fromto

Commission file number 0-17263

001-11504

CHAMPIONS ONCOLOGY, INC.

(Exact name of registrant as defined in its charter)

Delaware52-1401755
Delaware52-1401755
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
  
One University Plaza, Suite 30707601
Hackensack, New Jersey(Zip Code)
(Address of principal executive offices) 

Registrant’s telephone number, including area code:

(201) 808-8400

Securities registered pursuant to Section 12(g)12(b) of the Act:

Title of Each Class Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share Over-the-Counter Bulletin Board (OTCBB)Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act:
None.

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨     No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨     No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ     No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.¨


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer¨¨Accelerated filer¨Non-accelerated filer¨Smaller reporting companyþ¨
  (Do
Non-accelerated filer
¨ (Do not check if a smaller reporting company)
  Smaller reporting companyx
Emerging growth company¨


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes ¨     No þ

The approximate aggregate market value of the voting stock held by non-affiliates of the Registrant as of October 31, 20142017 was $30$18.6 million based on the closing price of the Registrant’s Common Shares as quoted on the OTCBBNasdaq Capital Market as of that date.

The number of Common Shares of the Registrant outstanding as of July 15, 201513, 2018 was 104,425,102.

11,025,609.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive Proxy Statement for its 20152018 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, are incorporated by reference into Part II and Part III of this Form 10-K.

 


INDEX TO FORM 10-K

FOR THE YEAR ENDED APRIL 30, 2014

2018
PART I
Item 1.
Business
2
Item 1A.
Risk Factors
6
Item 1B.
Unresolved Staff Comments
11
12
Item 2.
Properties
11
12
Item 3.
Legal Proceedings
12
Item 4.
Mine Safety Disclosures
12
   
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
12
Item 6.
Selected Financial Data
13
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
13
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
19
Item 8.
Financial Statements and Supplementary Data
19
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
19
Item 9A.
Controls and Procedures
20
19
Item 9B.
Other Information
20
19
   
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
20
19
Item 11.
Executive Compensation
20
19
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
20
19
Item 13.
Certain Relationships and Related Transactions, and Director Independence
20
19
Item 14.
Principal Accounting Fees and Services
20
19
   
PART IV
Item 15.
Exhibits, Financial Statement Schedules.
21
19
Item 16.
Form 10-K Summary
22
Signatures
23
Exhibit Index



As used in this Annual Report on Form 10-K (the "Annual Report"), “Champions Oncology, Inc.,” “Champions,” the “Company,” “we,” “ours,” and “us” refer to Champions Oncology, Inc. and its subsidiaries, except where the context otherwise requires or as otherwise indicated.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This documentAnnual 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, that inherently involve risk and uncertainties.  Forward-looking statements may be identified by the words “project,” “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “should,” “would,” “could,” “will,” “may,” “likely” or similar expressions. Forward-looking statements in this Annual Report include statements about our business strategies and products development activities, including the anticipated benefits and risks associated with those strategies as well as statements about the sufficiency of our capital resources.  One should not place undue reliance on these forward-looking statements.  We cannot guarantee that we will achieve the plans, intentions or expectations expressed or implied in our forward-looking statement.  There are a number of important factors that could cause actual results, levels of activity, performance or events to differ materially from those expressed or implied in the forward-looking statements we make.  These important factors are described under “Risk Factors” set forth below.  In addition, any forward-looking statements we make in this documentAnnual Report speak only as of the date of this document, and we do not intend to update any such forward-looking statements to reflect events or circumstances that occur after that date, except as required by law.  As a result of these and other factors, our stock price may fluctuate dramatically.

PART I

Item 1.Business

Overview

Champions Oncology, Inc. is

We are engaged in the development and sale of advanced technology solutions and products to personalize the development and use of oncology drugs.  The Company’sUtilizing our TumorGraft Technology Platform, we provide select services to pharmaceutical and biotechnology companies seeking personalized approaches to drug development. By performing studies to predict the efficacy of oncology drugs, our Platform facilitates drug discovery with lower costs and increased speed of drug development as well as increased adoption of existing drugs. The current oncology drug development paradigm is challenging for the pharmaceutical and biotechnology industry. We believe that on average, the clinical trial process in oncology currently:

costs more than $1.2 billion;
takes approximately 8 years to complete;
has a 93% failure rate; and
results in approved compounds that cost more than $11,000 per month.

Our platform provides a novel approach to personalizing cancer care, based uponsimulating the implantationresults of human tumorsclinical trials used in immune-deficient mice.  The Company uses this technology,developing oncology drugs. According to a 2013 study conducted by Cutting Edge Information, it can cost up to $100,000 per patient in conjunctiononcology clinical trials and the typical cost for each phase of development per year increases from approximately $3 million in the pre-clinical setting to approximately $150 million in phase III. Simulating trials before executing them provides benefits to both pharmaceutical companies and patients. Pharmaceutical companies can lower the risk of spending resources on drugs that do not show significant anti-cancer activities and increase the chance that the clinical development path they pursue will be focused on an appropriate patient population and a successful combination with related services, to offer solutions for two customer groups:

·Our Personalized Oncology Solutions, or “POS”, business, which provides services to physicians and patients looking for information to help guide the development of personalized treatment plans.
·Our Translational Oncology Solutions, or “TOS”, business, which provides services to pharmaceutical and biotechnology companies seeking personalized approaches to drug development that will lower costs and increase the speed of developing new drugs, as well as increase the adoption of existing drugs.

other drugs.


TumorGraft Technology Platform

Our technologyclinical trial simulation platform consists of processes, physical tumors, and information that we use to personalize the development and use of oncology drugs.  Each tumor from individual patients that we have preserved for future implantation in mice, along with the patient data and molecular information associated with these tumors, are referred to as “TumorGrafts” or “Patient Derived XenoGrafts” or “PDX Models”. Our process technology which we call “TumorGrafts,” involves the:

·implantation of human tumor fragments in immune-deficient mice;
·expansion of the original human tumor into a larger colony of mice through the passage of the tumor to a limited number of generations of mice;
·treatment of the implanted mice with oncology drugs; and
·the following:
implantation of human tumor fragments in immune-deficient mice;
expansion of the original human tumor into a larger colony of mice through the passage of the tumor to a limited number of generations of mice;
treatment of the implanted mice with oncology drugs;
measurement of tumor growth inhibition in treated mice relative to a control group of mice to determine the response of the tumor to the drug.

Our process is used for our POS business to test numerous drugs or drug combinations against a single patient’s tumor in the mice to determine which therapythe response of the tumor to the drug; and



permanent cryo-preservation of fragments of tumor tissue for future use in additional clinical trial simulations.

A growing body of evidence demonstrates the power of PDX to predict the response of individual patients to oncology drugs. Our platform has demonstrated a positive predictive value of approximately 87% and negative predictive value of approximately 94%. As a result, we believe our PDX platform results in simulated clinical studies with approximately 90% accuracy in predicting human response with approximately 90% lower costs than a human clinical trial while shortening the most efficacious responsetimelines from the tumor.

Our technology platform also includes a bank2-3 years for human trial to 6 months for PDX studies.


TumorBank

The collection of tumorsTumorGrafts that we have acquired, collected, processed, validated, and stored for usebuilt is referred to as our "TumorBank". We currently have approximately 1,500 PDX Models in our TOS business, whichTumorBank that we call our “TumorBank”believe reflect characteristics of patients who enroll in clinical trials (late stage, pretreated and metastic). We implant these tumors in mice to provide pharmaceutical and biotechnology companies the opportunity to test oncology compounds on multiple tumors to test efficacy and simulate the results of human clinical trials.


Increasing breadth and depth of the TumorBank is an important strategic effort of the company. We invest significant research and development resources to increase the number of PDX Models in our TumorBank and add unique and different sub-types of cancer that we have not historically addressed. In addition, we are also developing an extensive database of information about the tumors in our TumorBank.  We expect that this database will include certain information about the patient (e.g. age, gender), the response of the tumors to different oncology drugs or drug combinations, mutational status of key oncogenes, and other genetic and epigenetic data about each tumor. We expect that such data could be valuable to companies seeking to develop new cancer drugs.

Based on our extensive knowledge of the industry, we believe that we are a leading provider of Patient Derived XenoGrafts and a pioneer in the use of PDX Models for use with efficacy studies, patients and clinical trial simulations. Our intention isresearch and development efforts and customer sponsored platform development has contributed to the acceptance of the accuracy of PDX Models as a valuable tool in the development and use this database to provide our pharmaceutical and biotechnology customers with information that may assist them with their drug development process.

of oncology drugs.


Our Strategy

Our strategy is to use TumorGrafts as a platform technology to drive multiple synergistic revenue streams. We continue to build this platform with investments in research and development. Our goal is to populate our TumorBank and its related database with tumors and information we receive from our POS business,patients, research collaborations and validation studies. The tumors and information in the TumorBank are then available for TOS studies. We believe that the result is well-differentiated products for patients, physicians, and drug development companies.work with pharmaceutical company customers. In addition, we are looking for additional opportunities to utilize the data we are gathering about the tumors to develop proprietary biomarkers and signatures of response that can predict the resistance or sensitivity of individual patients to oncology drugs.

Personalized Oncology Solutions Business

Our POS business offers physicians and patients information to help guide the development of personalized treatment plans.  Our core products, TumorGraft implants and drug panels, previously known as studies, utilize TumorGraft technology to empirically test the response of a patient’s tumor to multiple oncology drugs or drug combinations.  The response of the tumors in the mice is tracked over time and analyzed to determine which drug or drug combination is providing the highest level of tumor growth inhibition in the mice.  Our data, which is currently limited in nature, indicates that there may be a correlation between the response to drugs of a tumor in a mouse with the response to drugs of a tumor in a patient.

In addition to our core TumorGraft POS products, we  offer non-core related POS products to our customers, including personalized tumor boards, previously known as tumor panels, and gene sequencing.  Personalized tumor boards are designed to provide access to oncologists with expertise in particular tumor types.   We also provide access to gene sequencing that analyzes the genetic makeup of patient’s tumor for the purpose of identifying potentially useful drugs. We will continue to offer related personal oncology products to our customers; however, we expect future POS revenues to be driven by our core products.

We rely on the internet, word of mouth, and a small sales force to market these services to patients and physicians.

For the year ended April 30, 2015, our revenues from POS totaled $1.7 million, a decrease of 26.5% from the previous year.


Translational Oncology Solutions Business

Our TOSTranslational Oncology Solutions ("TOS") business utilizes our technology platform to assist pharmaceutical and biotechnology companies with their drug development process.  We provide studies, or license tumors for use in studies, thatwhich we believe may predict the efficacy of experimental oncology drugs or approved drugs as stand-alone therapies or in combination with other drugs and can stimulate the results of human clinical trials.  These studies include in vivo studies that rely on implanting multiple tumors from our TumorBank in mice and testing the therapy of interest on these tumors.  Studies may also include bioinformatics analysesanalysis that reveal the differences in the genetic signatures of the tumors that responded to a therapy as compared to the tumors that did not respond.  Our studies can be used to determine which types of cancer, if any, may be inhibited by a drug.  The studies can also be used to identify specific sub-populations, often characterized by particular genetic mutations that are differentially sensitive or resistant to a drug or drug combination.  These studies, used in pre-clinical testing or during phase I or II of a clinical trial, can help guide the clinical development path of new compounds or find new indications or combinations for compounds that are already approved by the United States Food and Drug Administration, or FDA. We believe that the results may lead to lower costs and shorter timeframes for drug development.

We have performed studies for approximately 200 different pharmaceutical and biotechnology companies over the past seven years. We have a high rate of repeat business. Typical studies range in price from $50,000 to $250,000 with increasing number of studies in the $500,000 range. Revenue from this business has grown at a cumulative annual growth rate of 41% since the current management team joined the company in fiscal 2010.

Our sales and marketing efforts are dependent on a dedicated sales force that sells our services directly to pharmaceutical and biotechnology companies.

We have a team of nine professionals dedicated to this sales and marketing effort. The team is focused



on identifying and selling studies to new customers as well as increasing our revenue from existing customers. We spend significant resources in informing our current customers and reaching out to new contacts within companies that we currently serve. These efforts are aimed at moving our customers along the adoption curve for PDX-based clinical trial simulation and increasing the number of studies and the average study size of our existing customers. Our success in these efforts is demonstrated by the growing number of customers who have increased their annual spend on our services over the past three years.
For the year ended April 30, 2015, our2018, revenues from our TOS products totaled $7.2approximately $18.8 million, an increase of approximately 37.2% from the previous year.

Personalized Oncology Solutions Business
Our Personalized Oncology Solutions ("POS") business, which supports our TOS business, offers physicians and patients information to help guide the development of personalized treatment plans.  Our core products, TumorGraft implants and drug panels, utilize TumorGraft technology to empirically test the response of a patient’s tumor to multiple oncology drugs or drug combinations.  The response of the tumors in the mice is tracked over time and analyzed to determine which drug or drug combination is providing the highest level of tumor growth inhibition in the mice.  This process simulates the results of multiple, simultaneous clinical trials in which a patient might consider participating. By providing this product, we achieve an important goal of adding PDX Models to our TumorBank, and gain valuable data about the accuracy of PDX Models in predicting patient response and in building the operational capabilities to collect, implant and grow tumors from patients, physicians and hospitals around the United States and internationally. Our data, which is currently limited in nature, indicates that there may be a correlation between the response to drugs of a tumor in a mouse with the response to drugs of a tumor in a patient.
In addition to our core TumorGraft POS products, we offer non-core related POS products to our customers, including personalized tumor boards and gene sequencing.  Personalized tumor boards are designed to provide access to oncologists with expertise in particular tumor types.   We also provide access to gene sequencing that analyzes the genetic makeup of patient’s tumor for the purpose of identifying potentially useful drugs.

As previously disclosed, our POS business is not the focus of our growth moving forward. We continue to offer the POS products in support of our TOS business.

For the year ended April 30, 2018, revenues from our POS business totaled approximately $1.5 million, a decrease of 22.5%approximately 15.4% from the previous year.

Recent Developments

On December

Our Growth and Expansion Strategy

Our strategy is to continue to use TumorGrafts as a platform technology to drive multiple synergistic revenue streams.
Our current strategy for growth has three components:  
Growing our TumorBank: 1, 2014,We grow our TumorBank in two ways.  First, we increase the Company entered into note purchase agreements with and issued convertible promissory notesnumber of TumorGrafts in the principalbank for our existing tumor types to ensure customers are finding the specific models they need for their studies.  Second, we add new tumor types to the bank to enable studies in tumor types that we have not historically been able to run for our pharmaceutical and biotechnology customers.
Adding new PDX technologies:  The fields of oncology research and drug development are evolving.  To keep up with new approaches, we add new technologies to our PDX platform.  We are currently investing in developing ImmunoGrafts, a new PDX model that is developed in a mouse with a humanized immune system.  These models are built to specifically serve the needs of pharmaceutical and biotechnology companies developing immune oncology drugs.  This is a relatively new area of oncology research that has shown significant promise and is attracting a significant amount of $1 million eachresearch and development interest.
Increasing the scale of studies:  We have facilitated studies for over 200 pharmaceutical and biotechnology companies.  We believe there is significant opportunity to Joel Ackerman,grow our revenue by increasing the Company’s Chief Executive Officer, and Dr. Ronnie Morris, the Company’s President, to finance the operationssize of the Company. The transaction was approved bystudies these customers run.  To accomplish this, we are developing new study designs that offer solutions to compounds that are in phase I and phase II clinical trials.  We believe that the Company’s audit committee.

The notes bore interest at 12% per annum and had an initial termincreased budgets of 90 days. The notes, including any accrued but unpaid interest, were convertible at the option of each noteholder: (a) upon the closing of any equity financing that occurred during the term of the notes, into the securities offeredthese drugs, as compared to drugs in the financingpre-clinical stage, will enable us to other investors at a 5% discount to the price per share paid by other investors in the financing; and (b) upon the maturity date of the notes, into the Company’s common stock at the volume weighted average closing price of the common stock for the five trading days prior to such conversion.

On February 28, 2015, the Company entered into amendments to the convertible promissory notes issued on December 1, 2014. The amendments extended the maturity dates of the convertible promissory notes to April 1, 2015. The amendments were approved by the Company’s audit committee.

On March 11, 2015, the convertible promissory notes and all accrued interest were converted into equity as part of the 2015 Securities Purchase Agreement.

On March 11, 2015, the Company entered into a Securities Purchase Agreement (the "2015 Securities Purchase Agreement") with Battery Ventures IX, L.P. and Battery Investment Partners IX, LLC (collectively, "Battery"), New Enterprise Associates 14, Limited Partnership ("NEA"), Joel Ackerman, Chief Executive Officer and a director of the Company ("Ackerman"), Dr. Ronnie Morris, President and a director of the Company ("Morris"), Daniel Mendelson, a director of the Company ("Mendelson") and certain other investors (collectively with Battery, NEA, Ackerman, Morris and Mendelson, the "Investors"), for the sale to the Investors of 35,271,053 units, each unit consisting of one share of the Company's Common Stock, par value $0.001 per share (the "Common Stock") and a warrant to buy 0.55 shares of Common Stock at $0.48 per share (the "Warrants"), at a purchase price of $0.40 per unit, for an aggregate of $14,000,000. The Warrants expire five years after the closing date. Ackerman and Morris converted convertible promissory notes dated December 1, 2014 in the principal amounts of $1 million each, plus accrued interest, into the units at a 5% discount, pursuant to the terms of the convertible promissory notes.

The Investors have the right to require the Company to repurchase the purchased shares (the "Put Option") for cash for $0.40 per share upon a change of control or sale or exclusive license of substantially all of the Company's assets only if approved by the Company's board of directors. The Put Option will terminate upon the achievement of certain financial and other milestones.

The Investors have certain participation rights with respect to future financings of the Company. The Company covenanted to register the resale of the shares of Common Stock to be issued to the Investors and the shares of Common Stock issuable upon exercise of the Warrants pursuant to a 2015 Amended and Restated Registration Rights Agreement, to pay certain liquidated damages if the Company fails to file such registration statement by a certain deadline, and to have it declared effective by a certain deadline or keep it effective for a certain period of time.

The issuance of the shares of Common Stock resulted in the Company issuing an additional 2,264,450 shares of Common Stock to investors who purchased shares of Common Stock pursuant to a Securities Purchase Agreement dated as of March 24, 2011 (the "2011 Securities Purchase Agreement") due to contractual antidilution provisions in the 2011 Securities Purchase Agreement. The Company also amended and restated the 2011 Securities Purchase Agreement to eliminate these antidilution provisions going forward, and conform aspects of the put option in that 2011 Securities Purchase Agreement to terms of the Put Option in the 2015 Securities Purchase Agreement. The Company also issued an additional 1,583,335 warrants to its investors under the 2011 Warrant Agreements under the Securities Purchase Agreement and had its investors agree on certain amendments of the warrants to eliminate the antidilution rights for future transactions, by extending the term of the warrants  by one year, and revising the exercise price to $0.40 (See Note 7 for further discussion).

The Company and its investors have  amended and restated its Securities Purchase Agreement dated January 28, 2013 (the "2013 Securities Purchase Agreement") to conform aspects of the put option in the 2013 Securities Purchase Agreement to the Put Option in the 2015 Securities Purchase Agreement. The Company issued an additional 1,209,001 warrants to investors under the 2013 Warrant Agreements under the Securities Purchase Agreement andhadsell larger studies.its investorsagree on certain amendments of these warrants issued in connection with the 2013 Securities Purchase Agreement to eliminate the antidilution rights for future transactions, by extending the term of the warrant  by one year, revising the exercise price to $0.40 (See Note 7 for further discussion).

On March 16, 2015, the Company and certain members of its senior management team agreed to exchange existing options to purchase shares of the Company's common stock with new options. The new options have the same values as the existing options in that they are exercisable for fewer shares but at a lower exercise price, and have the same vesting schedules and the same termination expiration dates as the existing options. The Company used the Black Scholes valuation method to determine if the modification created additional stock option expense. Due to the modification the Company had an additional stock option modification expense for the current period of $213,951 and future additional stock option modification expense of $386,578. All additional expense will be recorded as stock option expense and be included within Note 6. The members of the senior management team whose options were exchanged include Joel Ackerman, the Company's Chief Executive Officer and a member of its Board of Directors, Ronnie Morris, the Company's President and a member of its Board of Directors, James McGorry, the Company's Executive Vice President and General Manager, Translational Oncology Solutions and David Miller, the Company's Vice President, Finance. As a result of the option exchange, an aggregate of 19,872,875 existing options with exercise prices ranging from $0.47 to $1.33 per share were exchanged for an aggregate of 17,617,929 new options with exercise prices of $0.41 per share.

Also on March 16, 2015, the Company and each of Mr. Ackerman and Dr. Morris agreed to amend their employment agreements with the Company. Their current employment agreements provide that, for the year from November 1, 2014 to October 31, 2015, Mr. Ackerman and Dr. Morris's salaries would be paid half in cash and half in options to purchase shares of common stock. To conserve the Company's cash, Mr. Ackerman and Dr. Morris have agreed to accept all of their compensation in options, and none of it in cash for such year. Mr. Ackerman received 1,155,400 options and Dr. Morris received 1,084,298 options. These options were granted on March 16, 2015 and vest over a one year period starting from November 1, 2014 which is concurrent with their employment contract.

On April 24, 2015, the Company filed an amendment to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, which increased the total number of shares of common stock the Company is authorized to issue to 200,000,000 from 125,000,000.


Competition

Our TumorGraft Technology Platform is proprietary and requires significant know-how to both initiate and operate, but is not patented.  It is, therefore, possible for competitors to develop other implantation procedures or to discover the same procedures utilized by the Company that could compete with the Company in its market.  Competition in our industry is intense and based


significantly on scientific, technological, and market forces, which include the effectiveness of the technology and products and the ability to commercialize technological developments.  The Company faces significant competition from other healthcare companies in the United States and abroad.  The majority of these competitors are, and will be, substantially larger than the Company, and have substantially greater resources and operating histories.  There can be no assurance that developments by other companies will not render our products or technologies obsolete or non-competitive or that we will be able to keep pace with the technological or product developments of our competitors.  These companies, as well as academic institutions, governmental agencies, and private research organizations also compete with us in recruiting and retaining highly qualified scientific, technical and professional personnel and consultants.

5

Research and Development

For the years ended April 30, 20152018 and 2014,2017, we spent approximately $4.8$4.4 million and $2.3$4.3 million, respectively, to develop our TumorGraft Technology Platform. We continue to expand our TumorBank through the acquisitioninclusion of tumor tissue and implanted models from the POS business. In addition, we expect to grow our tumor bank through research collaborations and relationships with hospitals and academic institutions. Our research and development efforts were focused on increasing our understanding of our TumorGraft models, their clinical predictability, improving growth and tumor take rates, and other biological and molecular characteristics of the models.

Government Regulation

The research, development, and marketing of our products, the performance of our POS testing services, and the operation of our facilities are generally subject to federal, state, local, or foreign legislation, including licensure of our laboratory located in Baltimore,Rockville, Maryland by the StatesState of Maryland and New York, and compliance with federal, state, local or foreign legislation applicable to the use of live animals in scientific testing, research and education.

The FDA has claimed regulatory authority over laboratory developed tests such as our POS products, but has generally not exercised it. The FDA has announced regulatory and guidance initiatives that could increase federal regulation of our business. We are subject to federal and international regulations with regard to shipment of hazardous materials, including the Department of Transportation and the International Air Transit Authority. These regulations require interstate, intrastate, and foreign shipments comply with applicable labeling, documentation, and training requirements.

Employees

As of April 30, 2015,July 15, 2018, we had 7192 full-time equivalent employees, “FTEs”, including 2625 with doctoral or other advanced degrees.  Of our workforce, 51 FTEs77 employees are engaged in research and development and laboratory operations, 13 FTEs9 employees are engaged in sales and marketing, and 7 FTEs6 employees are engaged in finance and administration.  None of our employees are represented by a labor union or covered by collective bargaining agreements.  We have never experienced a work stoppage and believe our relationship with our employees is good.

Company History

Our predecessor was

We were incorporated as a merger and acquisition company under the laws of the State of Delaware on June 4, 1985, asunder the name “International Group, Inc.” In September 1985, wethe Company completed a public offering and shortly thereafter acquired the world-wide rights to the Champions sports-themesports theme restaurant concept and changed ourits name to “Champions Sports, Inc.” In November 1997, wethe Company sold ourits Champions service mark and concept to Marriott International, Inc. and until 2005, werewas a consultant to Marriott International, Inc. and operated one Champions sports bar restaurant.Sports Bar Restaurant. In January 2007, wethe Company changed ourits business direction to focus on biotechnology and subsequently changed ourits name to Champions Biotechnology, Inc. On May 18, 2007, the Company acquired Biomerk, Inc., at which time we began focusing on our current line of business. In April 2011, wethe Company changed ourits name to Champions Oncology, Inc. to reflect the Company's new strategic focus on developing advanced technologies to personalize the development and use of oncology drugs.

Available Information

Our internet website address iswww.championsoncology.com.  Information on our website is not part of this Annual Report. Through our website, we make available, free of charge, access to all reports filed with the United States Securities and Exchange Commission, or SEC, including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, our Proxy Statements on Schedules 14A and amendments to those reports, as filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.  Copies of any materials we file with, or furnish to, the SEC can also be obtained free of charge through the SEC’s website at http://www.sec.gov or at the SEC’s Public Reference Room at 100 F Street, N.E.,


Room 1580, Washington, DC 20549.  You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

Item 1A.Risk Factors

You should carefully consider the risks described below together with all of the other information included in this report.Annual Report.  The risks and uncertainties described below are not the only ones we face.  Additional risks not presently known, or those we currently consider insignificant, may also impair our business operations in the future.

Risks Related to Our Business

We historically incurred losses from operating activities, expect losses for the foreseeable future,may require significant capital and may never achieve sustained profitability.

For the years ended April 30, 20152018 and 2014,2017, the Company had a net loss of approximately $13.1$1.5 million and $7.4$6.9 million, respectively.  As of April 30, 2015,2018, the Company has an accumulated deficit of approximately $52$70.8 million.

As of April 30, 2018, we had negative working capital of $2.4 million and cash and cash equivalents of $856,000. We believe that our cash and cash equivalents on hand, together with continued improved cash flows from operations, are adequate to fund our operations through at least August 2019.

The amount of theseour losses and liquidity requirements may vary significantly from year-to-year and quarter-to-quarter and will depend on, among other factors:

·the cost of continuing to build out our TumorGraft Technology Platform;
·the cost and rate of progress toward growing our POS and TOS businesses;
·the cost and rate of progress toward building our sales forces;
·the cost of increasing our research and development;
·the cost of renting our laboratory and animal testing facilities and payment for associated services;
·the timing and cost of obtaining and maintaining any necessary regulatory approvals;
·the cost of expanding and building out our infrastructure; and
·the cost incurred in hiring and maintaining qualified personnel.

the cost of continuing to build out our TumorGraft Technology Platform;
the cost and rate of progress toward growing our TOS businesses;
the cost and rate of progress toward building our sales forces;
the cost of increasing our research and development;
the cost of renting our laboratory and animal testing facilities and payment for associated services;
the timing and cost of obtaining and maintaining any necessary regulatory approvals;
the cost of expanding and building out our infrastructure; and
the cost incurred in hiring and maintaining qualified personnel.

Currently, the Company derives revenue from POSTOS products and TOSPOS products, while pursuing efforts to further develop bioinformatics from its TumorBank and its TumorGraft Technology Platform.  In addition, we are building our sales and marketing operations to grow the sales of our TOS andproducts.  Our POS products.  Accordingly, we expect to generate operating losses inproducts are not the future until such time as we are able to generate significantly more revenue.

focus of our growth moving forward.

To become sustainably profitable, we will need to generate revenues to offset our operating costs, including our research and development and general and administrative expenses. We may not achieve or, if achieved, sustain our revenue or profit objectives. Our losses may increase in the future, and, ultimately, we may have to cease operations.

In order to grow revenues, we must invest capital to implement our sales and marketing efforts and to successfully develop our bioinformatics from our TumorBank and our TumorGraft Technology Platform. Because we do not have sufficient history of commercial efforts, our sales and marketing efforts may never generate significant increases in revenues or achieve profitability and it is likely that we will be required to raise additional capital to continue our operations as currently contemplated. If we must devote a substantial amount of time to raising capital, it will delay our ability to achieve our business goals within the time frames that we now expect, which could increase the amount of capital we need. In addition, the amount of time expended by our management on fundraising distracts them from concentrating on our business affairs. If we require additional capital and are not successful in raising the needed capital, we may have to cease operations.

We may not be able to maintain or increase our revenues due to our reduction in POS product prices, the length of time it takes to conduct TumorGrafts, the uncertainty of whether TumorGrafts will successfully implant and the limited information about the correlation between the response to drugs of a tumor in mice with the response to those drugs of the tumor in patients.

We may not be able to successfully maintain or increase our POS products on a profitable basis. Our gross margin for this service has fluctuated significantly, and was negative 21% for 2014 and negative 64% for 2015.

In addition, it can take more than six months from the time that a tumor is implanted until it has been expanded to a larger colony of mice and treated with the drugs, although we generally cease efforts after six months. As a result, potential POS customers who need information quickly for their treatment may not elect to use our TumorGraft products. Moreover, not all TumorGrafts result in successful tumor growths; if TumorGrafts are not successful, studies of drugs cannot be conducted, which makes the TumorGrafts of limited value to potential POS customers. Finally, our information about the correlation between the response to drugs of a tumor in mice to the response to those drugs of the tumor in a patient is based on a very limited amount of information, and so may not be accurate with respect to oncology patients in general. If we are unable to demonstrate a correlation between the TumorGraft drug study results and patients’ actual treatment results, customers may not be interested in our POS products, which could result in low growth or a decrease in revenues. In addition, the limited data regarding the clinical outcomes associated with the use of our POS products substantially restricts the promotional claims we may make about those products, limiting the effectiveness of our marketing efforts.

7

We may incur greater costs than anticipated, which could result in sustained losses.

We use reasonable efforts to assess and predict the expenses necessary to pursue our business strategies. However, implementing our business strategies may require more employees, capital equipment, supplies or other expenditure items than management has predicted. Similarly, the cost of compensating additional management, employees and consultants or other operating costs may be more than we estimate, which could result in ongoing and sustained losses.

We may not be able to implement our business strategies which could impair our ability to continue operations.



Implementation of our business strategies will depend in large part on our ability to (i) attract and maintain a significant number of customers; (ii) effectively provide acceptable services to our customers; (iii) develop and license new products and technologies; (iv)  maintain appropriate internal procedures, policies, and systems; (v) hire, train, and retain skilled employees and management; (vi) continue to operate despite increasing competition in our industry; and (vii) establish, develop and maintain our name recognition. Our inability to obtain or maintain any or all these factors could impair our ability to implement our business strategies successfully, which could have material adverse effects on our results of operations and financial condition.

Our business could be adversely impacted by changes in FDA’s regulatory oversight of laboratory-developed tests such as our POS services that are currently under consideration or by other changes in the regulatory requirements applicable to our POS services imposed by the FDA or regulatory authorities in other countries in which our services are provided.

The FDA has claimed regulatory authority over all laboratory-developed tests, or LDTs, such as our POS services, but has generally not exercised its regulatory authority for most LDTs performed by CLIA-certified laboratories such as our facilities. The FDA has announced several regulatory and guidance initiatives that may impact our business, including by increasing FDA’s regulation of LDTs.

On July 31, 2014 the FDA notified Congress of the FDA’s intent to issue a draft oversight framework for LDTs based on risk to patients rather than whether they were made by a conventional manufacturer or a single laboratory. This draft oversight framework includes pre-market review for higher-risk LDTs, like those used to guide treatment decisions, including the many companion diagnostics that have entered the market as LDTs. In addition, under the draft framework, the FDA would continue to exercise enforcement discretion for low-risk LDTs and LDTs for rare diseases, among others. The framework would be phased in over many years. If this framework is implemented, these initiatives may lead to an increased regulatory burden on our Company, which may result in a requirement for FDA review and clearance or approval of our POS services. Any increased regulatory burdens would probably result in an increase in the cost of our POS services and could keep us from selling POS services until such time as any required FDA clearance or approval is obtained. If our POS services become subject to FDA’s approval and oversight as medical devices, the additional regulatory burdens may be significant, and may require the addition of experienced medical device quality, regulatory and compliance personnel to assume these burdens. Any POS services that we provide in other countries may be similarly subject to regulation by foreign regulatory agencies, which would also increase our costs. These matters could hurt our business and our financial results.

Our laboratories are subject to regulation and licensure requirements, and the healthcare industry is highly regulated; we may face substantial penalties, and our business activities may be impacted, if we fail to comply.

Our TumorGraft products are performed in laboratories that are subject to state regulation and licensure requirements. Such regulation and requirements are subject to change, and may result in additional costs or delays in providing our products to our customers. In addition, the healthcare industry in general is highly regulated in the United States at both the federal and state levels. We seek to conduct our business in compliance with all applicable laws, but many of the laws and regulations potentially applicable to us are vague or unclear. These laws and regulations may be interpreted or applied by an authority in a way that could require us to make changes in our business. We may not be able to obtain all regulatory approvals needed to operate our business or sell our products. If we fail to do so, we could be subject to civil and criminal penalties or fines or lose the authorizations necessary to operate our business, as well as incur additional liabilities from third parties. If any of these events happened, they could hurt our business and financial results.

If our laboratory facility isfacilities are damaged or destroyed, or we have a dispute with one of our landlord, or our mice population has a health crisis,landlords, our business would be negatively affected.

We currently utilize three laboratoriesone laboratory in Rockville, Maryland. We opened the lab during the first quarter of fiscal 2018 and transitioned our activities from the Baltimore Maryland, Gaithersburg, Maryland and New York, New Yorklab to perform the work of our tumor studies and develop and bank our TumorGraft Technology Platform models. The lab in Baltimore is where a majority of the work is performed.this new facility. If this facility werewas to be significantly damaged or destroyed, we could suffer a loss of our ongoing and future drug studies, as well as our TumorGraft bank.TumorBank. In addition, we lease the space for thisthe laboratory from a third party. If we had a dispute with our landlord or otherwise could not utilize this space, it would take time to find and move to a new facility, which could negatively affect our results of operations. Finally,
Any health crisis impacting our colony of laboratory mice could have a negative impact on our business.

Our TumorGraft operations depend on having a colony of live mice available. If this population experienced a health crisis, such as a virus thator other pathogen, such crisis would affect the success of both currentour existing TOS and POS and TOS business and future business, as we would have to rebuild the population and repeat current TumorGrafts.

8



We have limited experience marketing and selling our products  and may need to rely on third parties to successfully market and sell our products and generate revenues.

Currently, we rely on the internet, word of mouth, and a small sales force to market our services. We needhave to continue building acompete with other pharmaceutical, biotechnology and life science technology and service companies to recruit, hire, train, and retain marketing and sales function or enter into agreements with consultants to market our products. Our ability to gain market acceptance and generate revenuespersonnel. However, there can be no assurance that we will be substantially dependent upon our abilityable to successfully market our products and/or enter into such agreements on favorable termsdevelop in-house sales, and to manage the efforts of those employees or service providers, as the casea result, we may be.  If we are not successful in building market share, profitability, and our future prospects will not be realized.

able to generate product revenue. 

We will continue to be dependent upon key employees.

Our success, currently, is dependent upon the efforts of several full-time key employees, the loss of the services of one or more of which would have a material adverse effect on our business and financial condition. We intend to continue to develop our management team and attract and retain qualified personnel in all functional areas to expand and grow our business. This may be difficult in the healthcare industry where competition for skilled personnel is intense.

Because our industry is very competitive and many of our competitors have substantially greater capital resources and more experience in research and development, we may not succeed in selling or increasing sales of our products and technologies.

We are engaged in a rapidly changing and highly competitive field. Potential competitors in the United States and abroad are numerous and include diagnostic companies and providers of clinical research services, most of which have substantially greater capital resources and more experience in research and development capabilities. Furthermore, new companies will likely enter our market from the United States and abroad, as scientific developments surrounding other cancer diagnosticpre-clinical and clinical services continue to accelerategrow in the multibillion dollar oncology marketplace.  Our competitors may succeed in selling their products to our potential patientpharmaceutical and physicianbiotech customers more effectively than we sell our products.   In addition, academic institutions, hospitals, governmental agencies, and other public and private research organizations also may conduct similar research, seek patent protection, and may develop and commercially introduce competing products or technologies on their own or through joint ventures. If one or more of our competitors succeeds in developing similar technologies and products that are more effective or successful than any of those that we currently sell or will develop, our results of operations will be significantly adversely affected.

If we are unable to protect our intellectual property, we may not be able to compete as effectively.

It is important in the healthcare industry to obtain patent and trade secret protection for new technologies, products, and processes. Our success will depend, in part, upon our ability to obtain, enjoy, and enforce protection for any products we have, develop or acquire under United States and foreign patent laws and other intellectual property laws, preserve the confidentiality of our trade secrets, and operate without infringing the proprietary rights of third parties. Where appropriate, we will seek patent protection for certain aspects of our technology. However, while our TumorGraft Technology Platform is proprietary and requires significant know-how to both initiate and operate, it is not patented. It is, therefore, possible for competitors to develop other implantation procedures, or to discover the same procedures utilized by us, that could compete with us in our market.

It also is unclear whether efforts to secure our trade secrets will provide useful protection. While we will use reasonable efforts to protect our trade secrets, our employees or consultants may unintentionally or willfully disclose our proprietary information to competitors resulting in a loss of protection. Enforcing a claim that someone else illegally obtained and is using our trade secrets, like patent litigation, is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets. Finally, our competitors may independently develop equivalent knowledge, methods and know-how.


If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

We rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties. We also seek to enter into confidentiality and invention assignment agreements with our employees and consultants. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Our trade secrets may also be obtained by third parties by other means, such as breaches of our physical or computer security systems. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor,


we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed.

Claims by others that our products infringe their patents or other intellectual property rights could adversely affect our financial condition.

The healthcare industry has been characterized by frequent litigation regarding patent and other intellectual property rights. Patent applications are maintained in secrecy in the United States and also are maintained in secrecy outside the United States until the application is published. Accordingly, we can conduct only limited searches to determine whether our technology infringes the patents or patent applications of others. Any claims of patent infringement asserted by third parties would be time-consuming and could likely:

·result in costly litigation;
·divert the time and attention of our technical personnel and management;
·require us to develop non-infringing technology; or
·require us to enter into royalty or licensing agreements.

result in costly litigation;
divert the time and attention of our technical personnel and management;
require us to develop non-infringing technology; or
require us to enter into royalty or licensing agreements.

Patients are unable to obtain reimbursement from third-party payers for our services, limiting the market acceptance of our services, and as a result we may not achieve significant revenues.

Currently, patients are unable to obtain reimbursement from third party payers for our services. Furthermore, the continuing efforts of government and insurance companies, health maintenance organizations (“HMOs”) and other payers of healthcare costs to contain or reduce costs of health care could affect our revenues and profitability. In the U.S., given recent federal and state government initiatives directed at lowering the total cost of health care, the U.S. Congress and state legislatures will likely continue to focus on health care reform, the cost of prescription pharmaceuticals and on the reform of the Medicare and Medicaid systems. While we cannot predict whether any such legislative or regulatory proposals will be adopted, the inability to obtain reimbursement from third party payers for our services limits the market acceptance of our services. As a result, we may not achieve significant revenues.

Our ability to expand our business may depend in part on the extent to which appropriate reimbursement levels for the cost of our proposed formulations and products and related treatments are obtained by governmental authorities, private health insurers and other organizations, such as HMOs. The trend toward managed health care in the U.S. and the concurrent growth of organizations such as HMOs, which could control or significantly influence the purchase of health care services and drugs, as well as legislative proposals to reform health care or reduce government insurance programs, may all result in lower prices for or rejection of our services.

TOS studies are subject to cancellation based on changes in customer’s development plans.

Our revenue is primarily derived from studies performed for pharmaceutical and biotechnology companies to assist in the development of oncology drugs. There are many factors that could result in the change of our customers development plans for specific drugs, including without limitation to their research and development budgets and drug development strategies. These changes could lead to the cancellation or modification of on-going or planned studies. This would have a negative impact on the Company’s revenue growth and profit margin.

Our ability to use our net operating loss carry-forwards and certain other tax attributes may be limited.

Under Section 382 of the Internal Revenue Code of 1986, as amended, referred to as the Internal Revenue Code, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period), the corporation’s ability to use its pre-change net operating loss carry-forwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited. We believe that our recent public offering, taken together with our private placements and other transactions that have occurred over the past three years, we may have triggered an “ownership change” limitation. We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership. As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carry-forwards to offset U.S. federal taxable income may be subject to limitations, which potentially could result in increased future tax liability to us.
We have a limited market for our common stock, which makes our securities very speculative.


Trading activity in our common stock is and has been limited. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations of the price of our common stock. There can be no assurance that a more active market for our common stock will develop, or if one should develop, there is no assurance that it will be sustained. This could severely limit the liquidity of our common stock, and would likely have a material adverse effect on the market price of our common stock and on our ability to raise additional capital. Furthermore, like many stocks quoted on the Nasdaq Capital Market, trading in our common stock is thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance.

Investment in our common stock may be diluted if we issue additional shares in the future.

We may issue additional shares of common stock, which will reduce shareholders’ percentage ownership and may dilute per share value. Our Certificate of Incorporation authorizes the issuance of 200,000,000 shares of common stock. As of July 15, 2015,13, 2018, we had 107,561,33811,295,294 shares of common stock issued and 104,425,10211,025,609 shares outstanding. The future issuance of all or part of the remaining authorized common stock would result in substantial dilution in the percentage of the common stock held by existing shareholders. The issuance of common stock for future services, acquisitions, or other corporate actions may have the effect of diluting the value of the shares held by existing shareholders, and might have an adverse effect on any market for our common stock.

Although we are not currently pursuing additional financing, to

To the extent that we raise additional funds by issuing equity securities or convertible debt securities in the future, our stockholders may experience significant dilution. Sale of additional equity and/or convertible debt securities at prices below certain levels will trigger anti-dilution provisions with respect to certain securities we have previously sold. If additional funds are raised through a credit facility or the issuance of debt securities or preferred stock, lenders under the credit facility or holders of these debt securities or preferred stock would likely have rights that are senior to the rights of holders of our common stock, and any credit facility or additional securities could contain covenants that would restrict our operation.

Potential future sales or issuances of our common stock to raise capital, or the perception that such sales could occur, could cause dilution to our current stockholders and the price of our common stock to fall.

We have historically supported our operations through the issuance of equity and expect tomay continue to do so in the future. Although we may not be successful in obtaining financing through equity sales on terms that are favorable to us, if at all, any such sales that do occur could result in substantial dilution to the interests of existing holders of our common stock.

Additionally, the sale of a substantial number of shares of our common stock or other equity securities to any new investors, or the anticipation of such sales, could cause the trading price of our common stock to fall.

There is a limited trading market for our common stock, which may make it difficult for you to sell your shares and you may be subject to state securities laws for any resale.

Our common stock is quoted on the over-the-counter or OTC Bulletin Board. Like many stocks quoted on the OTC Bulletin Board, trading in our common stock is thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, trading on the OTC Bulletin Board is often more sporadic and volatile than the trading on security exchanges like NASDAQ or New York Stock Exchange. Accordingly, you may have difficulty reselling your shares of our common stock in short time periods. In addition, unlike shares of companies listed on NASDAQ or New York Stock Exchange, re-sales of our shares are not exempt from state, or “blue sky,” securities laws. As a result, you may need to comply with or find an exemption from any registration requirements of state securities laws if you resell our shares.

The exercise of outstanding options and warrants may dilute current shareholders.

As of July 15, 2015,13, 2018, there were 49,366,102 warrants and options outstanding of which 42,429,162 were vested to purchase an aggregate of 4,690,129 shares of our common stock.stock, of which 2,442,099 were vested. The exercise of a substantial number of these outstanding warrants and options could adversely affect our share price and dilute current shareholders.

Our stock price is volatile.

volatile and therefore investors may not be able to sell their common stock at or above the price they paid for it.

The stock market in general and the market for biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their common stock at or above the price they paid for it. The market price for our common stock may be influenced by many factors, including:

·regulatory developments in the United States and foreign countries;
·variations in our financial results or those of companies that are perceived to be similar to us;
·
regulatory developments in the United States and foreign countries;
variations in our financial results or those of companies that are perceived to be similar to us;
changes in the healthcare payment system overseas to the degree we receive revenue from such healthcare systems overseas;
·announcements by us of significant acquisition, strategic partnerships, joint ventures or capital commitments;
·sales of significant shares of stock by large investors;
·intellectual property, product liability, or other litigation against us; and
·the other key facts described in this “Risk Factors” section.

Our common stock may be deemed a “penny stock,” which would make it more difficult for you to sell your shares.

Our common stock is subject to the “penny stock” rules adopted under Section 15(g)degree we receive revenue from such healthcare systems overseas;

announcements by us of the Securities Exchange Actsignificant acquisition, strategic partnerships, joint ventures or capital commitments;
sales of 1934, as amended. These rules require, among other things, that brokers who trade penny stocks complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our common stock. Because our common stock is subject to the penny stock rules, you may find it more difficult to dispose of the shares of our common stock that you have purchased.

by large investors;

intellectual property, product liability, or other litigation against us; and
the other key facts described in this “Risk Factors” section.


Certain provisions of Delaware law, of our charter and bylaws and of our contractual agreements contain provisions that could delay and discourage takeover attempts and any attempts to replace our current management by shareholders.

Certain provisions of our certificate of incorporation and bylaws, applicable provisions of Delaware corporate law, and our contractual agreements could make it difficult for or prevent a third party from acquiring control of us or changing our Boardboard of Directorsdirectors and management. These provisions include:

·requirements that our stockholders comply with advance notice procedures in order to nominate candidates for election to our Board of Directors or to place stockholders’ proposals on the agenda for consideration at meetings of stockholders; and
·in connection with private placements of our stock in 2011, 2013 and 2015, we covenanted that we would not merge or consolidate with another company unless either the transaction and the trading volume of our stock met certain thresholds and qualifications or we obtained the consent of certain of the investors who purchased our stock in those private placements.

Insiders

requirements that our stockholders comply with advance notice procedures in order to nominate candidates for election to our board of directors or to place stockholders’ proposals on the agenda for consideration at meetings of stockholders; and
in connection with private placements of our stock in 2011, 2013 and 2015, we covenanted that we would not merge or consolidate with another company unless either the transaction and the trading volume of our stock met certain thresholds and qualifications or we obtained the consent of certain of the investors who purchased our stock in those private placements.

Certainprovisions of Delaware law make it more difficult for a third party to acquire us and make a takeover more difficult to complete, even if such a transaction were in the stockholders’ interest.

The Delaware General Corporation Law contain provisions that may have the effect of making it more difficult or delaying attempts by others to obtain control of us, even when these attempts may be in the best interests of our stockholders. We also are subject to the anti-takeover provisions of the Delaware General Corporation Law, which prohibit us from engaging in a “business combination” with an “interested stockholder” unless the business combination is approved in a prescribed manner and prohibit the voting of shares held by persons acquiring certain numbers of shares without obtaining requisite approval. The statutes have the effect of making it more difficult to effect a change in control of a Delaware company.

Our management and six significant stockholders collectively own a significant amountsubstantial majority of the outstandingour common stock.

Insiders


Collectively, our officers, our directors and six significant stockholders own a significant amountor exercise voting and investment control of approximately 60% of our outstanding common stock as of July 13, 2018. As a result, investors may be prevented from affecting matters involving our company, including:
the composition of our board of directors and, through it, any determination with respect to our business direction and policies, including the appointment and removal of officers;
any determinations with respect to mergers or other business combinations;
our acquisition or disposition of assets; and
our corporate financing activities.
Furthermore, this concentration of voting power could have the effect of delaying, deterring or preventing a change of control or other business combination that might otherwise be beneficial to our stockholders. This significant concentration of share ownership may also adversely affect the trading price for our common stock because investors may perceive disadvantages in owning stock in a company that is controlled by a small number of stockholders.
We have not paid any cash dividends in the past and have no plans to issue cash dividends in the future, which could discourage takeover attempts. Our directors, affiliates and executive officers collectively beneficially own approximately 77%cause the value of our outstandingcommon stock to have a lower value than other similar companies which do pay cash dividends.
We have not paid any cash dividends on our common stock to date and do not anticipate any cash dividends being paid to holders of our common stock in the foreseeable future. While our dividend policy will be based on the operating results and capital needs of the business, it is anticipated that any earnings will be retained to finance our future expansion. As we have no plans to issue cash dividends in the future, our common stock could be less desirable to other investors and as a result, the value of June 30, 2015.

our common stock may decline, or fail to reach the valuations of other similarly situated companies who have historically paid cash dividends in the past.


If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our common stock adversely, the price of our common stock and trading volume could decline.
The trading market for our common stock may be influenced by the research and reports that securities or industry analysts may publish about us, our business, our market or our competitors. If any of the analysts who may cover us change their recommendation regarding our common stock adversely, or provide more favorable relative recommendations about our competitors, the price of our common stock would likely decline. If any analyst who may cover us was to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our common stock or trading volume to decline.


Item 1B.Unresolved Staff Comments

None.

Item 2.Properties

We lease

The Company leases its office facilities. Rent expenses totaled $657,000 and $398,000 for the years ended April 30, 2018 and 2017, respectively. The Company considers its facilities adequate for its current operational needs.

The Company leases the following facilities under non-cancelable operating lease agreements:

·One University Plaza, Suite 307, Hackensack, New Jersey 07601, which, since November 2011, serves as the Company’s corporate headquarters and consists of approximately 3,800 square feet of office space. The lease expires in November 2016. The Company recognized $85,000 and $75,000 of rental costs relative to this lease for fiscal 2015 and 2014, respectively.
·855 North Wolfe Street, Suite 619, Baltimore, Maryland 21205, which consists of laboratories and office space where the Company conducts operations related to its primary service offerings.  This lease expires in June 2016. The Company recognized $86,000 and $85,000 of rental costs relative to this lease for fiscal 2015 and 2014, respectively.

·17 Hatidhar Street, Ra’anana, Israel, which serves as office headquarters for Champions Oncology, Israel. The Company recognized nil and $6,000 of rental costs relative to this lease for fiscal 2015 and 2014, respectively. This lease expired in July 2013 and was not renewed. Following the expiration of this lease, the Company utilizes office space on a limited basis from one of its stockholders. The fair value of rental costs associated with the new office space is immaterial.

·57 Mohamed Sultan Road, Singapore, which serves as office headquarters for Champions Oncology, Singapore. The lease expired in January 2015. The Company has not renewed this lease. The Company recognized $4,000 and $5,000 of rental costs relative to this lease for fiscal 2015 and 2014, respectively.

·450 East 29th Street, New York, New York, 10016, which is a laboratory at which we implant tumors. This lease expires in September 2015 and can be renewed by the Company for subsequent one year terms. The Company recognized $47,000 and $4,000 of rental costs relative to this lease for fiscal 2015 and 2014, respectively.

One University Plaza, Suite 307, Hackensack, New Jersey 07601, which, since November 2011, serves as the Company’s corporate headquarters. The lease expires in November 2021. The Company recognized $90,000 and $86,000 of rental costs relative to this lease for fiscal 2018 and 2017, respectively.

855 North Wolfe Street, Suite 619, Baltimore, Maryland 21205, which consists of laboratories and office space where the Company conducts operations related to its primary service offerings.  This lease was terminated in October 2017. The Company transitioned its activities from this location to the new location in Rockville, MD. The Company recognized $59,000 and $105,000 of rental costs relative to this lease for fiscal 2018 and 2017, respectively.

450 East 29th Street, New York, New York, 10016, which was a laboratory facility. The Company recognized $52,000 and $207,000 of rental expense for fiscal 2018 and 2017, respectively. This lease expired in May 2017 and was not renewed.

1330 Piccard Drive, Suite 025, Rockville, MD 20850, which consists of laboratory and office space where the Company will conduct operations related to its primary service offerings. The Company executed this lease on January 11, 2017. The operating commencement date was August 11, 2017. This lease expires in August 2028. The Company recognized $454,000 and nil of rental expense for fiscal 2018 and 2017, respectively.

910 Clopper Road, Suites 260S and 280S, Gaithersburg, Maryland 20878, which consists of laboratory and office space where the Company will conduct operations related to its primary service offerings. The Company executed this lease on April 1, 2018. The operating commencement date is May 1, 2018. This lease expires in August 31, 2028. The Company recognized nil of rental expense for fiscal 2018.

Item 3.Legal Proceedings

None.

Item 4.Mine Safety Disclosures

None.

PART II

Item 5.Market for Registrant’s Common Equity, Related StockholderMatters and Issuer Purchases of Equity Securities

Principal Market or Markets

Our shares of common stock are currently quoted on the Nasdaq Capital Market under the symbol “CSBR.” Our common stock commenced trading on the Nasdaq Capital Market on August 21, 2015. Prior to such date, our shares of common stock were traded over-the-counter and quoted on the OTCQB Marketplace.
The following informationtable below sets forth the high and low quotationbid prices forof our common stock, for each quarter within the last two fiscal years.  Our common stock (symbol CSBR) is traded over-the-counter and quotedas reported on the electronic Bulletin Board maintained by the National Association of Securities Dealers.  The quotations represent prices between dealers and do not reflect the retailer markups, markdowns or commissions, and may not represent actual transactions.  Our securities are presently classified as “penny stocks” as defined by existing securities laws.  This classification places significant restrictions upon broker-dealers desiring to make a market in such securities.  High and low closing prices for our common stockNasdaq for the last two fiscal years were:

  High  Low 
Fiscal Year Ended April 30, 2015:        
First quarter $1.05  $0.88 
Second quarter  0.90   0.42 
Third quarter  0.71   0.26 
Fourth quarter  0.84   0.20 
         
  High  Low 
Fiscal Year Ended April 30, 2014:        
First quarter $1.19  $0.43 
Second quarter  1.99   1.08 
Third quarter  1.65   0.80 
Fourth quarter  1.20   0.80 

periods shown:



 High Low
Fiscal Year Ended April 30, 2018: 
  
First quarter$2.88
 $2.33
Second quarter3.97
 2.93
Third quarter4.39
 3.21
Fourth quarter4.49
 3.39
 High Low
Fiscal Year Ended April 30, 2017: 
  
First quarter$4.10
 $1.96
Second quarter2.00
 1.48
Third quarter4.75
 1.57
Fourth quarter4.57
 2.65

Approximate Number of Holders of Common Stock

As of July 15, 2015,13, 2018, there were approximately 2,1601,900 record holders of the Company’s common stock.

Dividends

Holders of our common stock and redeemable common stock are entitled to receive such dividends as may be declared by our Board of Directors.  No dividends have been declared or paid with respect to our common stock and redeemable common stock and no dividends are anticipated to be paid in the foreseeable future.  Any future decisions as to the payment of dividends will be at the discretion of our Board of Directors, subject to applicable law.

Securities Authorized for Issuance Under Equity Compensation Plans

The information regarding securities authorized for issuance under our equity compensation plans is disclosed in Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

Recent Sales by the Company of Unregistered Securities

None.

Repurchases of Securities

None.


Use of Proceeds
None.

Item 6.Selected Financial Data

Not applicable.

Item 7.Management’s Discussion and Analysis of Financial Condition andResults of Operations

You should read the following discussion and analysis together with our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K.Report.  This discussion contains forward-looking statements that are based on our current expectations, estimates, and projections about our business and operations.  Our actual results may differ materially from those


currently anticipated and expressed in such forward-looking statements as a result of a number of factors, including those we discuss under Item 1A – “Risk Factors” and elsewhere in this Annual Report.

Overview and Recent Developments

Champions Oncology, Inc. is

We are engaged in the development and sale of advanced technology solutions and products to personalize the development and use of oncology drugs.  The Company’sUtilizing our TumorGraft Technology Platform, iswe provide select services to pharmaceutical and biotechnology companies seeking personalized approaches to drug development. By performing studies to predict the efficacy of oncology drugs, our Platform facilitates drug discovery with lower costs and increased speed of drug development as well as increased adoption of existing drugs.

Our Platform provides a novel approach to personalizing cancer care, based uponsimulating the implantationresults of human tumorsclinical trials used in immune-deficient mice.  The Company uses this technology,developing oncology drugs. We believe it costs more than $100,000 per patient in conjunctiononcology clinical trials and the typical cost for each phase of development per year increases from approximately $3 million in the pre-clinical setting to approximately $150 million in phase III. Simulating trials before executing them provides benefits to both pharmaceutical companies and patients. Pharmaceutical companies can lower the risk of spending resources on drugs that do not show significant anti-cancer activities and increase the chance that the clinical development path they pursue will be focused on an appropriate patient population and a successful combination with related products, to offer solutions for two customer groups:

·Our Personalized Oncology Solutions, or “POS”, business, which provides services to physicians and patients looking for information to help guide the development of personalized treatment plans.
·Our Translational Oncology Solutions, or “TOS”, business, which provides services to pharmaceutical and biotechnology companies seeking personalized approaches to drug development that will lower costs and increase the speed of developing new drugs, as well as increase the adoption of existing drugs.

other drugs.


We plan to continue our efforts to expand our TumorGraft Technology Platform in order to expand our POS and TOS programs.

program.

On July 30, 2013,June 15, 2016, the Company entered intoclosed a public offering of 2,000,000 registered shares of its common stock at an agreement with Teva Pharmaceutical Industries Ltd. pursuant to whichoffering price of $2.25 per share. In addition, the Company agreed to conduct TumorGraft studies on multiple proprietary chemical compounds provided by Teva to determine the activity or response of these compounds in potential clinical indications. Under the agreement, Teva agreed to, pay an upfront payment and, under certain conditions, pay the Company various amounts upon achieving certain milestones, based on the performanceunderwriter exercised a partial exercise of the compounds in preclinical testingover-allotment option granted to the underwriter to purchase an additional 258,749 shares at the public offering price. The net proceeds from the offering, including the partial exercise of the over-allotment option, were approximately $4.3 million, after deducting the underwriting discount and dependent upon testingoffering-related expenses of $742,000. The Company used the compound in clinical settingsnet proceeds of this offering for research and obtaining FDA approval. In addition, Teva agreeddevelopment to pay the Company royalties on any commercialized products developed under the agreement. This agreement terminated a prior collaborative agreement between Cephalon, Inc. a wholly-owned subsidiary of Teva,grow our TumorGraft platform, and the Company. Forbalance of the year ended April 30, 2015net proceeds for working capital and 2014, revenue of $724,000 and 194,000 were recognized relating to this agreement.

general corporate purposes.


Results of Operations

The following table summarizes our operating results for the periods presented below (dollars in thousands):

  For the Years Ended April 30, 
     % of     % of  % 
  2015  Revenue  2014  Revenue  Change 
Operating revenue:                    
Personalized oncology solutions $1,663   18.8% $2,264   19.6%  (26.5)%
Translational oncology solutions  7,200   81.2   9,286   80.4   (22.5)
                     
Total operating revenue  8,863   100.0   11,550   100.0   (23.3)
                     
Costs and operating expenses:                    
Cost of personalized oncology solutions  2,733   30.8   2,731   23.6   0.1 
Cost of translational oncology solutions  4,900   55.3   3,532   30.6   38.7 
Research and development  4,845   54.7   2,265   19.6   113.9 
Sales and marketing  4,283   48.3   3,155   27.3   35.8 
General and administrative  5,340   61.4   6,127   53.0   (11.2)
                     
Total costs and operating expenses  22,101   250.5   17,810   154.2   24.7 
                     
Loss from operations $(13,238)  (150.5)% $(6,260)  (54.2)%  113.1%

 For the Years Ended April 30,
 2018 
% of
Revenue
 2017 
% of
Revenue
 
%
Change
Operating revenue: 
  
  
  
  
Oncology solutions$20,241
 100.0 % $15,411
 100.0 % 31.3 %
          
Total operating revenue20,241
 100.0
 15,411
 100.0
 31.3
     

    
Costs and operating expenses: 
        
Cost of oncology solutions10,553
 52.1
 9,703
 63.0
 8.8
Research and development4,401
 21.7
 4,293
 27.9
 2.5
Sales and marketing2,570
 12.7
 3,261
 21.2
 (21.2)
General and administrative4,071
 20.1
 4,963
 32.2
 (18.0)
          
Total costs and operating expenses21,595
 106.6
 22,220
 144.3
 (2.8)
          
Loss from operations$(1,354) (6.7)% $(6,809) (44.3)% (80.1)%
Operating Revenues

Operating revenues for the years ended April 30, 20152018 and 20142017 were $8.9$20.2 million and $11.6$15.4 million, respectively, a decreasean increase of $2.7$4.8 million, or 23.3%31.3%, primarily driven by the increase in TOS revenue of $5.1 million offset by a decrease in POS revenue of $265,000. The increase is TOS revenue.

Personalizedrevenue is due to increased sales, both in number and size of studies, and growth of the platform.




Cost of Oncology Solutions Revenues

POS revenues

Cost of oncology solutions were $1.7$10.6 million and $2.3$9.7 million for the years ended April 30, 20152018 and 2014,2017, respectively, an increase of $850,000 or 8.8%. For the years ended April 30, 2018 and 2017, gross margins were 47.9% and 37.0%, respectively. The increase in cost of sales was due to an increase in the number of TOS studies. Gross margin varies based on timing differences between expense and revenue recognition; however, the improvement can be attributed to aggressively managing our costs and leveraging cost of sales against a decrease of $0.6 million or 26.5%. Core revenues, consisting of implantsgrowing revenue base.

 Research and drug panels, were $1.4Development
Research and development expense was $4.4 million and $1.8$4.3 million for the years ended April 30, 20152018 and 2014,2017, respectively, a decrease of 21%. The number of implants during fiscal 2015 was 245, an increase of 1% over fiscal 2014.$108,000 or 2.5%.
Sales and Marketing
The number of patients for whom studies were completedSales and marketing expense was 90 for fiscal 2015, an increase of 3% over fiscal 2014. The decrease in core revenue is due to a reduction in the number of tests per panel resulting in a $300,000 decrease in panel revenue. Non-core revenues, consisting of tumor boards and sequencing, decreased $212,000.

Translational Oncology Solutions Revenues

TOS revenues were $7.2$2.6 million and $9.3$3.3 million for the years ended April 30, 20152018 and 2014,2017, respectively, a decrease of $2.1 million$692,000 or 22.5%(21.2%). The decrease is mainly due to a reduction in payroll and travel expenses.


General and Administrative
General and administrative expense was due in part to slower recognition of study revenue caused by longer duration in study times and study extensions.

Cost of Personalized Oncology Solutions

POS cost of sales were $2.7 million for both years ended April 30, 2015 and 2014.For the years ended April 30, 2015 and 2014, gross margins for POS were negative 64% and negative 21%, respectively. The decline in gross margin is attributed to the decline in core POS revenue and a fixed component to the cost of sales. Non-core revenue, which has lower cost of sale and higher margins, declined, contributing to lower overall margins.

14

Cost of Translational Oncology Solutions

TOS cost of sales were $4.9$4.1 million and $3.5$5.0 million for the years ended April 30, 20152018 and 2014,2017, respectively, an increasea decrease of $1.4 million,$892,000, or 38.7%(18.0%).For the years ended April 30, 2015 and 2014, gross margins for TOS were 32% and 63%, respectively. The increase in TOS cost of salesdecrease is mainlyprimarily due to an increasea decrease in TOS studies, the revenue of which will be recognized upon study completion.

Researchstock based compensation expense.

Other Income/(Expense)
Other Expense was ($88,000) and Development

Research and development expense was $4.8 million and $2.3 million($56,000) for the years ended April 30, 20152018 and 2014, respectively, an increase of $2.5 million or 114%.2017, respectively. The increasecurrent year expense is largelymainly due to investment in characterizing the TumorBank.

Sales and Marketing

Sales and marketing expense was $4.3 million and $3.2 million for the years ended April 30, 2015 and 2014, respectively, an increase of $1.1 million, or 35.8%. The increase was due to the expansion of the TOS sales force offset by reduced sales and marketing expense for POS.

General and Administrative

General and administrative expense was $5.3 million and $6.1 million for the years ended April 30, 2015 and 2014, respectively, a decrease of $0.8 million, or 12.8%.

Other Income/(Expense)

Other Income/(expense) consists of the change in the fair value of warrants that were accounted for as liabilities and are described further below and in Note 6 to the accompanying consolidated financial statements, a modification charge due to the extinguishment of the liability as stated in the amended 2011 and 2013 Warrant Agreements both of which are described further below and in Note 6 to the accompanying consolidated financial statements and other miscellaneous charges. Other Income/(expense) was $225,000 and ($1.1) million for the years ended April 30, 2015 and 2014, respectively. This change in the fair value of the warrant liability was a result of revaluing the warrant liability based on the Monte Carlo simulation valuation model, impacted primarily by the quoted price of the Company's common stock. The revaluation of the warrant liability has no impact on our cash balances.

foreign currency transaction losses.

Inflation

Inflation does not have a meaningful impact on the results of our operations.

Liquidity and Capital Resources

Our liquidity needs have typically arisen from the funding of our research and development programs and the launch of new products, working capital requirements, and other strategic initiatives. In the past, we have met these cash requirements through our cash and cash equivalents, working capital management, and proceeds from certain private placements and public offerings of our securities.securities and sales of products and services. For the years ended April 30, 2018 and 2017, the Company had a net loss of approximately $1.5 million and $6.9 million, respectively. As of April 30, 2015, we2018, the Company had an accumulated deficit of approximately $70.8 million, negative working capital of $6.9$2.4 million and cash and cash equivalents of $9.4 million.$856,000. We believe that our cash and cash equivalents on hand, at April 30, 2015together with continued improved cash flows from operations, are adequate to fund operations forthrough at least through our 1st quarter of fiscal year 2017.August 2019. Should the Company be required to raise additional capital, there can be no assurance that management would be successful in raising such capital on terms acceptable to us, if at all.

On December 1, 2014, the Company entered into note purchase agreements with and issued convertible promissory notes in the principal amount of $1 million each to Joel Ackerman, the Company’s Chief Executive Officer, and Dr. Ronnie Morris, the Company’s President, to finance the operations of the Company. The transaction was approved by the Company’s audit committee.

The notes bore interest at 12% per annum and had an initial term of 90 days. The notes, including any accrued but unpaid interest, were convertible at the option of each noteholder: (a) upon the closing of any equity financing that occurred during the term of the notes, into the securities offered in the financing to other investors at a 5% discount to the price per share paid by other investors in the financing; and (b) upon the maturity date of the notes, into the Company’s common stock at the volume weighted average closing price of the common stock for the five trading days prior to such conversion.

On February 28, 2015, the Company entered into amendments to the convertible promissory notes issued on December 1, 2014. The amendments extended the maturity dates of the convertible promissory notes to April 1, 2015. The amendments were approved by the Company’s audit committee.

On March 11, 2015, the convertible promissory notes and accrued interest were converted into equity as part of the 2015 Securities Purchase Agreement.

On March 11, 2015,October 30, 2017, the Company entered into a 2015 Securities Purchase Agreement (the "2015 Securities Purchase Agreement")line of credit agreement with Battery Ventures IX, L.P. and Battery Investment Partners IX, LLC (collectively, "Battery"), New Enterprise Associates 14, Limited Partnership ("NEA"), Joel Ackerman, Chief Executive Officer and a director ofnational bank which provides that the Company ("Ackerman"), Dr. Ronnie Morris, Presidentmay borrow up to $1.5 million. Borrowings under the line bear interest payable monthly at the Wall Street Journal Prime Rate plus 1.5% to 2.0% and a director of the Company ("Morris"), Daniel Mendelson, a director of the Company ("Mendelson") and certain other investors (collectively with Battery, NEA, Ackerman, Morris and Mendelson, the "Investors"), for the sale to the Investors of units, each unit consisting of one share of the Company's Common Stock, par value $0.001 per share (the "Common Stock") and a warrant to buy 0.55 shares of Common Stock at $0.48 per share (the "Warrants"), at a purchase price of $0.40 per unit, for an aggregate of $14,000,000. The Warrants expire five years after the closing date. Ackerman and Morris converted convertible promissory notes dated December 1, 2014 in the principal amounts of $1 million each, plus accrued interest, into the units at a 5% discount, pursuant to the terms of the convertible promissory notes.

The Investors have the right to require the Company to repurchase the purchased shares (the "Put Option") for cash for $0.40 per share upon a change of control or sale or exclusive license of substantiallyare secured by all of the Company's assets only if approved by the Company's board of directors. The Put Option will terminate upon the achievement of certain financial and other milestones.

The Investors have certain participation rights with respect to future financings of the Company. The Company covenanted to register the resalebalances payable under this arrangement are due on demand. As of the shares of Common Stock to be issued to the Investors and the shares of Common Stock issuable upon exercise of the Warrants pursuant to a 2015 Amended and Restated Registration Rights Agreement, to pay certain liquidated damages if the Company fails to file such registration statement by a certain deadline, and to have it declared effective by a certain deadline or keep it effective for a certain period of time.

April 30, 2018, there were no outstanding borrowings. The issuance of the shares of Common Stock resulted in the Company issuing an additional 1,865,853 shares of Common Stock to investors who purchased shares of Common Stock pursuant to a Securities Purchase Agreement dated as of March 24, 2011 (the "2011 Securities Purchase Agreement") due to contractual antidilution provisions in that 2011 Securities Purchase Agreement. The Company also amended and restated the 2011 Securities Purchase Agreement to eliminate these antidilution provisions going forward, and conform aspects of the put option in that 2011 Securities Purchase Agreement to terms of the Put Option in the 2015 Securities Purchase Agreement. The Company also issued an additional 1,583,335 warrants to its investors under the 2011 Warrant Agreements under the Securities Purchase Agreement and had its investors agree on certain amendments of the warrants to eliminate the antidilution rights for future transactions, by extending the term of the warrants  by one year, and revising the exercise price to $0.40.

The Company and its investors have  amended and restated its Securities Purchase Agreement dated January 28, 2013 (the "2013 Securities Purchase Agreement") to conform aspects of the put option in that 2013 Securities Purchase Agreement to the Put Option in the 2015 Securities Purchase Agreement. The Company issued an additional 1,209,001 warrants to investors under the 2013 Warrant Agreements under the Securities Purchase Agreement andhadits investorsagree on certain amendments of these warrants issued in connection with the 2013 Securities Purchase Agreement to eliminate the antidilution rights for future transactions, by extending the term of the warrant  by one year, revising the exercise price to $0.40.

revolving line maturity date is October 29, 2018.


Cash Flows

The following discussion relates to the major components of our cash flows:

Cash Flows from Operating Activities

Net cash used in operating activities was $9.6$1.2 million and $3.4$2.8 million for the years ended April 30, 20152018 and 2014,2017, respectively. The increasedecrease of $6.2$1.6 million cash used in operations relates to a decreasean increase in revenues in conjunction with increase inthe reduction of fixed costs for business expansion.

and effective management of variable lab costs.



Cash Flows from Investing Activities

Cash

Net cash used in investing activities was $114,000$1.2 million and $234,000$766,000 for the years ended April 30, 20152018 and 2014,2017, respectively. These cash flows relate to the purchase of property and equipment.

Cash Flows from Financing Activities

Net cash provided by financing activities was $13.2$13,000 and $4.3 million and $21,000 for the years ended April 30, 20152018 and 2014,2017, respectively. TheseThe cash flows in 2015fiscal year 2017 primarily relate to the private placementpublic offering of common stock and warrants that occurred on March 13, 2015, which is explained more in Liquidity and Capital Resources section, and the exercise of stock options and warrants.

June 15, 2016.

Critical Accounting Policies

We believe that of our significant accounting policies (refer to the Notes to Consolidated Financial Statements contained in Item 15 of this Annual Report), the following may involve a higher degree of judgment and complexity:

General

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States or GAAP.  The preparation of the consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure of contingent assets and liabilities. Significant estimates of the Company include, among other things, accounts receivable realization, revenue recognition (replacement of licensed tumors), valuation allowance for deferred tax assets, valuation of goodwill, and stock compensation and warrant assumptions. We have not identified any estimates that require a significant level of judgment or are otherwise subject to an inherent degree of uncertainty.   We base our estimates on historical experience, our observance of trends in particular areas and information or valuations and various other assumptions that we believe to be reasonable under the circumstances and which form the basis for making judgments about the carrying value of assets and liabilities that may not be readily apparent from other sources.  Actual amounts could differ significantly from amounts previously estimated.

Revenue Recognition

The Company derives revenue from its POSTOS and TOSPOS businesses. Personalized oncology solutions assist physicians by providing information to help guide the development of personalized treatment plans for their patients using our core offerings, including testing oncology drugs and drug combinations on personalized TumorGrafts, and through other products. Translational oncology solutions offer a preclinical TumorGraft platform to pharmaceutical and biotechnology companies using proprietary TumorGraft studies, which the Company believes may be predictive of how drugs may perform in clinical settings.  The Company recognizes revenue when the following four basic criteria are met: (i) a contract has been entered into with its customers; (ii) delivery has occurred or services rendered to its customers; (iii) the fee is fixed and determinable as noted in the contract; and (iv) collectability is reasonably assured.  The Company utilizes a proportional performance revenue recognition model for its TOS business, under which it recognizes revenue as performance occurs, based on the relative outputs of the performance that have occurred up to that point in time under the respective agreement, typically the delivery of reports to its customers documenting the results of testing protocols.

When a POSTOS or TOSPOS arrangement involves multiple elements, the items included in the arrangement (deliverables) are evaluated to determine whether they represent separate units of accounting.  We perform this evaluation at the inception of an arrangement and as each item in the arrangement is delivered.  Generally, we account for a deliverable (or a group of deliverables) separately if: (i) the delivered item(s) has standalone value to the customer, and (ii) we have given the customer a general right of return relative to the delivered item(s) and the delivery or performance of the undelivered item(s) or service(s) is probable and substantially in our control. Revenue on multiple element arrangements is recognized using a proportional method for each separately identified element.  All revenue from contracts determined not to have separate units of accounting is recognized based on consideration of the most substantive delivery factor of all the elements in the contract or if there is no predominant deliverable upon delivery of the final element of the arrangement.

During Starting May 1, 2018, the third quarter of fiscal year 2014 we entered intoCompany will evaluate each contract under Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” which requires companies to use a contract that may require the replacement of licensed tumors in the event that certain contractual terms have not been satisfied. Duefive-step process to such requirements we have estimated an amount of licensed tumors that may need todetermine how revenue should be replaced, and we have deferred this revenue until all provisions of the agreement have been met. There was $258,000 of deferred revenue as of April 30, 2015 relating to our estimate of replacement of licensed tumors.

Share-Basedrecognized.

Stock-Based Payments



We typically recognize expense for share-basedstock-based payments based on the fair value of awards on the date of grant.  We use the Black-Scholes option pricing model to estimate fair value.  The option pricing model requires us to estimate certain key assumptions such as expected life, volatility, risk free interest rates, and dividend yield to determine the fair value of share-basedstock-based awards.  These assumptions are based on historical information and management judgment.  We expense share-basedstock-based payments over the period that the awards are expected to vest, net of estimated forfeitures.  If actual forfeitures differ from management’s estimates, compensation expense is adjusted.  We report cash flows resulting from tax deductions in excess of the compensation cost recognized from those options (excess tax benefits) as financing cash flows when the cash tax benefit is received.

Goodwill

Goodwill represents the excess of the cost over the fair market value of the net assets acquired including identifiable assets.  Goodwill is tested annually, or more frequently, if circumstances indicate potential impairment, by comparing its fair value to its carrying amount.  The determination of whether or not goodwill is impaired involves significant judgment.  Although we believe our goodwill is not impaired, changes in strategy or market conditions could significantly impact the judgments and may require future adjustments to the carrying value of goodwill.  We use a two-step process to test for goodwill impairment.  The first step is to screen for potential impairment, while the second step measures the amount of the impairment, if any.  The first step of the goodwill impairment test compares the fair value of each reporting unit with its carrying amount, including goodwill.  If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired.  If the carrying value of the reporting unit’s net assets, including goodwill, exceeds the fair value of the reporting unit, then we determine the implied fair value of goodwill.  If the carrying value of goodwill exceeds its implied fair value, then an impairment of goodwill has occurred and an impairment loss would be recognized for the difference between the carrying amount and the implied fair value of goodwill as a component of operating income.  The implied fair value of goodwill is calculated by subtracting the fair value of tangible and intangible assets associated with the reporting unit from the fair value of the unit.

In addition, we evaluate impairment if events or circumstances change between the annual assessments, indicating a possible impairment.  Examples of such events or circumstances include: (i) a significant adverse change in legal factors or in the business climate; (ii) an adverse action or assessment by a regulator; or (iii) a significant decline in market capitalization as compared to book value.

We have two operating segmentsone reportable segment. The Company evaluated its TOS and two reporting units.POS business operations and determined that the POS operations no longer qualified as a separate reportable segment primarily due to its revenue representing only 7% of total revenue. The Company assesses goodwill by business unit. The estimated fair value of each reportingbusiness unit, as calculated for the April 30, 20152018 impairment test, exceeded the carrying value of the reportingbusiness unit.  Judgments regarding the existence of impairment indicators are based on legal factors, market conditions and operational performance of the acquired businesses.  Future events, including but not limited to continued declines in economic activity, loss of contracts or a significant number of customers or a rapid increase in costs or capital expenditures, could cause us to conclude that impairment indicators exist and that goodwill is impaired.  Any resulting goodwill impairment could have a material adverse impact on our financial condition and results of operations.

Accounting for Income Taxes

We use the asset and liability method to account for income taxes.  Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets.  In preparing the consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate.  This process involves estimating the actual current tax liability together with assessing temporary differences resulting from differing treatment of items, such as deferred revenue, depreciation on property, plant and equipment, goodwill and losses for tax and accounting purposes.  These differences result in deferred tax assets, which include tax loss carry-forwards, and liabilities, which are included within the consolidated balance sheet.  We then assess the likelihood that deferred tax assets will be recovered from future taxable income, and to the extent that recovery is not likely or there is insufficient operating history, a valuation allowance is established.  To the extent a valuation allowance is established or increased in a period, we include an expense within the tax provision of the consolidated statements of operations.  As of April 30, 20152018 and 2014,2017, we have established a full valuation allowance for all deferred tax assets.

As of April 30, 2015,2018 and 2017, we recognized a liability for uncertain tax positions on the balance sheet relative to foreign operations in the amount of $100,000.$151,000 and $121,000, respectively. We do not anticipate any significant unrecognized tax benefits will be recorded during the next 12 months.  Any interest or penalties related to unrecognized tax benefits is recognized in income tax expense. Since there are no unrecognized tax benefits as a result of tax positions taken, there are noThe Company has not accrued for any penalties orand interest. There were no uncertain tax positions as of April 30, 2014.

18

Recent Accounting Pronouncements



In May 2014, the FASBFinancial Accounting Standards Board (“FASB”) issued ASUAccounting Standards Update (“ASU”) No. 2014-09,“Revenue “Revenue from Contracts with Customers” (“ASU 2014-09”), which will replace mostsupersedes nearly all existing revenue recognition guidance in U.S. Generally Accepted Accounting Principles and is intended to improve and converge with international standards the financial reporting requirements for revenue from contracts with customers.under GAAP. The core principle of ASU 2014-09 is that an entity shouldto recognize revenue for the transfer ofrevenues when promised goods or services equalare transferred to thecustomers in an amount that itreflects the consideration to which an entity expects to be entitled to receive for those goods or services. ASU 2014-09 alsodefines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. In addition, this guidance requires new or expanded disclosures related to the judgments made by companies when following this framework and additional quantitative disclosures aboutregarding contract balances and remaining performance obligations. On July 9, 2015, the nature, timingFASB voted to defer the effective date by one year to December 15, 2017 for interim and uncertaintyannual reporting periods beginning after that date. Early adoption of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU 2014-09 allows for both retrospective and prospective methods of adoption and is permitted but not before the original effective fordate (annual periods beginning after December 15, 2016. On July 9,2016). When effective, ASU 2014-09 prescribes either of the FASB decidedfollowing transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to delayelect certain practical expedients; or (ii) a retrospective approach with the effectivecumulative effect of initially adopting ASU 2014-09 recognized at the date of the new revenue standard by one year.adoption (which includes additional footnote disclosures). The Company is currently evaluatingwill adopt this guidance on May 1, 2018.

The Company has evaluated the overall impact that the adoption of ASU 2014-09 will have on ourthe Company’s consolidated financial statements.

In June 2014, FASB has issued Accounting Standards Update (“ASU”) No. 2014-12,“Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments Whenstatements, as well as the Termsexpected timing and method of adoption. The Company established an Award Provide That a Performance Target Could Be Achieved afterimplementation team, including external advisers, and is finalizing the Requisite Service Period”. This ASU requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair valuereview of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achievedCompany’s revenue portfolio and should represent the compensation cost attributablerelated contracts across its various business units and geographies. Discussions regarding changes to the period(s) for whichCompany’s current accounting policies and practices remain ongoing and preliminary conclusions are subject to change.


Upon adoption, the requisite service has already been rendered.. The amendmentsCompany will recognize revenue from contracts with customers as each performance obligation is satisfied, either at a point in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted.time or over a period of time, based on when control transfers to customers. The adoption of this standardupdate is not expected to have a material impact on our consolidated financial statements.

The Company plans to adopt the new revenue recognition standard under the modified retrospective transition method by recognizing the cumulative effect of applying the standard as an adjustment to the Company’s condensed consolidated balance sheetsBalance Sheet. The Company has been assessing the impact of  the new revenue recognition standard, and resultsthe Company does not anticipate being able to provide the full impact on the Balance Sheets or Statements of operations.

Operations until they complete the review of all of their contracts during fiscal 2019. From the initial review and assessment of a sample of contracts with customers, the Company will evaluate the measurement and timing of revenue recognition for certain of its co-clinical contracts under the new standard. The Company will also provide enhanced disclosure regarding revenue recognition, including disclosures of revenue streams, performance obligations, variable consideration and the related judgments and estimates necessary to apply the new standard.



In August 2014, the FASB issued Accounting Standards Update (“ASU”)ASU No. 2014-15,“Presentation of Financial Statements — Going Concern: Disclosure “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. This ASU requires management to evaluate,The amendments in this update state that in connection with preparing financial statements for each annual and interim reporting period, an entity’s management should evaluate whether there are conditions or events considered in the aggregate, that raise substantial doubt about anthe entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued, when applicable) and provide related disclosures. ASU 2014-15 is. The amendments in this update are effective for the annual reporting period endingbeginning after December 15, 2016 and for annual periods and interim periods thereafter. Early adoptionapplication is permitted. The Company adopted this updated in fiscal 2018 and it did not have a material impact on our consolidated financial statements.

In February 2016, the FASB ASU No. 2016-02, Leases. The new standard will require most leases to be recognized on the balance sheet which will increase reported assets and liabilities. Lessor accounting remains substantially similar to current guidance. The new standard is effective for annual and interim periods in fiscal years beginning after December 15, 2018, which for us is the first quarter of fiscal 2019 and mandates a modified retrospective transition method. We are currently evaluatingassessing the impact of ASU 2014-15this update on itsour consolidated financial statements.


In April 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting”. The new standard simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU No. 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted this standard in fiscal 2018 and, as expected, it did not have a material impact on our consolidated financial statements.



In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments” . The new standard attempts to reduce diversity in practice in how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU No. 2016-15 provides guidance on eight specific cash flow issues. The new guidance will be effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted including adoption in an interim period. We do not intend to early adopt and the adoption of this update is not expected to have a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): “Simplifying the Test for Goodwill Impairment”. The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. It affects public entities that have goodwill reported in their financial statements and have not elected the private company alternative for the subsequent measurement of goodwill. A public entity that is a U.S. Securities and Exchange Commission ("SEC") filer should adopt the amendments in this update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. For the Company, the amendments are effective January 1, 2020. The Company has early adopted this ASU in fiscal 2018. The adoption of this ASU did not have a material impact on our consolidated financial statements.

Off-Balance Sheet Financing

We have no off-balance sheet debt or similar obligations.  We have no transactions or obligations with related parties that are not disclosed, consolidated into or reflected in our reported results of operations or financial position.  We do not guarantee any third-party debt.

Item 7A.Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 8.Financial Statements and Supplementary Data

Consolidated balance sheets as of April 30, 20152018 and 2014,2017, consolidated statements of operations, comprehensive loss, stockholders’ equity, (deficit), and cash flows for each of the years in the two-year period then ended April 30, 20152018 together with the reports of our independent registered public accounting firms, are set forth in the “F” pages in Item 15 of this Annual Report on Form 10-K in Item 15.

Report.

Item 9.Changes in and Disagreements With Accountants on Accounting andFinancial Disclosure

None.

Item 9A.Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Vice President, Finance,our principal financial and accounting officer, have reviewed and evaluated our disclosure controls and procedures (as defined in the Securities Exchange Act Rule 13a-15(e)) as of the end of the period covered by this Form 10-K.  Based on that evaluation, our management, including our Chief Executive Officer and Vice President, Finance, hasour principal financial and accounting officer, have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this Form 10-K in ensuring that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to management, including our Chief Executive Officer and Vice President, Finance, as appropriate, to allow timely decisions regarding required disclosure.

10-K.

Management’s Annual Report on Internal Control Over Financial Reporting

The

Our management of Champions Oncology, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a–15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Vice President, Finance,principal financial and accounting officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on control criteria framework of the Committee of Sponsoring Organizations, or COSO, of the Treadway Commission published in its report entitledInternal Control – Integrated Framework (2013).  Based on our evaluation, our management concluded that our internal control over financial reporting was effective as of April 30, 2015.

2018.

Management’s Annual Report on Changes in Internal Controls

There were no changes in our internal controls over financial reporting during the quarter ended April 30, 2015,2018, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.Other Information

None.

PART III

Item 10.Directors, Executive Officers and Corporate Governance

The information required by item 10 iswill be contained in the Proxy Statement and is incorporated herein by reference.

Item 11.Executive Compensation

The information required by item 11 iswill be contained in the Proxy Statement and is incorporated herein by reference.

Item 12.Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters

The information required by item 12 iswill be contained in the Proxy Statement and is incorporated herein by reference.

Item 13.Certain Relationships and Related Transactions, and DirectorIndependence

The information required by item 13 iswill be contained in the Proxy Statement and is incorporated herein by reference.

Item 14.Principal Accounting Fees and Services

The information required by item 14 iswill be contained in the Proxy Statement and is incorporated herein by reference.

PART IV

Item 15.Exhibits, Financial Statement Schedules

(a)1. Financial Statements

Report of Independent Registered Public Accounting Firm
F-2
Report of Independent Registered Public Accounting FirmF-3F-2
Consolidated Balance SheetsF-3
Consolidated Statements of OperationsF-4
Consolidated Statements of Comprehensive LossF-4
Consolidated Statement of Changes in Stockholders' EquityF-5
Consolidated Statements of Cash FlowsF-6
Notes to Consolidated Financial StatementsF-7

(a)2. Financial Statement Schedules

All schedules have been omitted because they are not applicable.

(a)3. Exhibits required to be filed by Item 601 of Regulation S-K.

Exhibit No.
  
   


3.1 Amended and Restated Articles of Incorporation (incorporated by reference to Appendix A to the Company’s Information Statement on Schedule 14C filed March 7, 2011)
   
3.1.1 Certificate of Amendment to Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3(i) to the Company’s Current Report on Form 8-K filed April 28, 2015)
   
3.2 
Amended and Restated Bylaws, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed February 22, 2011)
4.1Securities Purchase Agreement, dated March 11, 2015, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 12, 2015)
4.22015 Amended and Restated Registration Rights Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to (i) the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto, (ii) the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto, and (iii) the Securities Purchase Agreement, dated March 11, 2015, between the Company. And each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 17, 2015)

4.3Form of Investor Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K field March 17, 2015)
10.1Employment Agreement, dated November 5, 2013, between the Company and Joel Ackerman (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 12, 2013)
10.1.1Amendment to Employment Agreement, dated March 16, 2015, between the Company and Joel Ackerman (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed March 20, 2015)May 9, 2017)

   
10.2 Employment Agreement, dated November 5, 2013, between the Company and Ronnie Morris, M.D. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed November 12, 2013)
   
10.2.110.3 Amendment to Employment Agreement, dated March 16, 2015, between the Company and Ronnie Morris (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed March 20, 2015)
10.3Offer letter dated August 12, 2013 between the Company and James McGorry (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K field July 26, 2013)
   
10.4 Offer letter dated June 3, 2013 between the Company and David Miller (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 3, 2013)
   
10.5 Master Supply and Services Contract, made on December 3, 2013, between Pfizer, Inc. and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended January 31, 2014, filed March 14, 2013) **
   
10.6 2010 Equity Incentive Plan (incorporated by reference to Appendix B to the Company’s Definitive Information Statement on Schedule 14C filed March 7, 2011)
   
10.7 Form of Note Purchase Agreement, dated December 1, 2014, between the Company and each of  Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 5, 2014)
   
10.8 Form of Convertible Promissory Note, dated December 1, 2014, issued to each of Joel Ackerman and Ronnie Morris in connection with the Note Purchase Agreement, dated December 1, 2014 between the Company and each of Joel Ackerman and Ronnie Morris incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 5, 2014)
   
10.8.1 Amendment No. 1 to Convertible Promissory Note, dated December 1, 2014 issued to Joel Ackerman in connection with the Note Purchase Agreement, dated December , 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 2, 2015)
   
10.8.2 Amendment No. 1 to Convertible Promissory Note, dated December 1, 2014 issued to Ronnie Morris in connection with the Note Purchase Agreement, dated December , 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 2, 2015)
   
10.9 Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 30, 2011)
   
10.9.1 Amendment No. 1 to Securities Purchase Agreement, dated January 29, 2014, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 6, 2014)

10.9.2 Amended and Restated 2011 Securities Purchase Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 17, 2015)
   
10.10 Amended and Restated Registration Rights Agreement, dated January 28, 2013, between the Company and each person or entities that are signatories to (i) the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto, and (ii) the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed January 30, 2013)
   
10.10.1Amended and Restated Registration Rights Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to (i) the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto, (ii) the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto, and (iii) the Securities Purchase Agreement, dated March 11, 2015, between the Company. And each investor identified on the signature page thereto (included in Exhibit 4.2)
10.11 Form of warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed January 30, 2013)*
   


10.11.1 Amendment No. 1 to warrants, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed March 17, 2015)
   
10.12 Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 30, 2013)
   
10.12.1 Amendment No. 1 to Securities Purchase Agreement, dated January 29, 2014, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 6, 2014)
   
10.12.2 Amended and Restated 2013 Securities Purchase Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed March 17, 2015)
   
10.13Amended and Restated Registration Rights Agreement, dated January 28, 2013, between the Company and each person or entities that are signatories to (i) the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto, and (ii) the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto (included in Exhibit 10.10)
10.13.1Amended and Restated Registration Rights Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to (i) the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto, (ii) the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto, and (iii) the Securities Purchase Agreement, dated March 11, 2015, between the Company. And each investor identified on the signature page thereto (included in Exhibit 4.2)
10.14 Form of warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed January 30, 2013)

10.14.1 Amendment No. 1 to warrants, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed March 17, 2015)
   
10.15 Put Right Agreement, dated January 29, 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 6, 2014)
   
10.16 Securities Purchase Agreement, dated March 11, 2015, between the Company and each investor identified on the signature pages thereto (included in(incorporated by reference to Exhibit 4.1)10.1 to the Company’s Current Report on Form 8-K filed March 12, 2015)
   
10.17 2015 Amended and Restated Registration Rights Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to (i) the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto, (ii) the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto, and (iii) the Securities Purchase Agreement, dated March 11, 2015, between the Company. And each investor identified on the signature page thereto (included in(incorporated by reference to Exhibit 4.2)10.1 to the Company’s Current Report on Form 8-K filed March 17, 2015)
   
10.18 Form of Investor Warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated March 11, 2015, between the Company and each investor identified on the signature page thereto (included in(incorporated by reference to Exhibit 4.3)10.2 to the Company’s Current Report on Form 8-K filed March 17, 2015)
   
10.19 Option Exchange Agreement, dated March 16, 2015, between the Company and Joel Ackerman (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 20, 2015)
   
10.20 Option Exchange Agreement, dated March 16, 2015, between the Company and Ronnie Morris (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 20, 2015)
   
10.21 Option Exchange Agreement, dated March 16, 2015, between the Company and James McGorry (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 20, 2015)
   
10.22 Option Exchange Agreement, dated March 16, 2015, between the Company and David Miller (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed March 20, 2015)
   
14 Code of Ethics (incorporated by reference to Exhibit 14 of the April 30, 2008 Form 10-KSB)
   
21 List of Subsidiaries (incorporated by reference to Exhibitexhibit 21 toof the Company’sCompany's Form 10-K filed on July 26, 2013)28, 2017)
   

23.1

 

Consent of Independent Registered Public Accounting Firm*

   


23.2

Consent of Independent Registered Public Accounting Firm*

31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer*
   
31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer*
   
32.1 Section 1350 Certifications***
   
101101.INS* Interactive data files providing financial information from the Registrant’s Annual Report on Form 10-K for the fiscal year ended April 30, 2015 in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of April 30, 2015 and 2014; (ii) Consolidated Statements of Operations for the years ended April 30, 2015 and 2014; (iii) Consolidated Statement of Stockholders’ Equity (Deficit) for the years ended April 30, 2015 and 2014; (iv) Consolidated Statements of Cash Flows for the years ended April 30, 2015 and 2014; and (v) Notes to Consolidated Financial Statements*Instance Document.
101.SCH*XBRL Taxonomy Extension Schema Document.
101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document.

___________________________

* Filed herewith


** Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.


*** Furnished hereto.

Item 16. Form 10-K Summary

Not Required.



SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 CHAMPIONS ONCOLOGY, INC.
  
July 30, 2018/s/ JOEL ACKERMANRONNIE MORRIS
 Joel AckermanRonnie Morris
 Chief Executive Officer
 (principal executive officer)

July 29, 2015

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date
     
/s/ JOEL ACKERMANRONNIE MORRIS Chief Executive Officer and Director July 29, 201530, 2018
Joel AckermanRonnie Morris  (principal(principal executive officer)  
     
/s/ DAVID MILLER Vice President, FinanceChief Financial Officer July 29, 201530, 2018
David Miller  (principal(principal financial and accounting officer)
/s/ JOEL ACKERMANDirector,July 30, 2018
Joel AckermanChairman of the Board of Directors  
     
/s/ DAVID SIDRANSKY Director July 29, 201530, 2018
David SidranskyChairman of the Board of Directors
/s/ RONNIE MORRISPresident and DirectorJuly 29, 2015
Ronnie Morris
/s/ ARTHUR G. EPKERDirectorJuly 29, 2015
Arthur G. Epker    
     
/s/ ABBA D. POLIAKOFF Director July 29, 201530, 2018
Abba D. Poliakoff    
     
/s/ SCOTT R. TOBIN Director July 29, 201530, 2018
Scott R. Tobin    
     
/s/ DANIEL MENDELSON Director July 29, 201530, 2018
Daniel Mendelson    

25
/s/ PHILIP BREITFELDDirectorJuly 30, 2018
Philip Breitfeld 



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm
F-2
Report of Independent Registered Public Accounting FirmF-3
Consolidated Balance Sheets
F-4
F-3
Consolidated Statements of Operations
F-5
F-4
Consolidated Statements of Comprehensive LossF-5
Consolidated Statement of Changes in Stockholders' Equity
F-6
F-5
Consolidated Statements of Cash Flows
F-7
F-6
Notes to Consolidated Financial Statements
F-8
F-7



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The



To the Board of Directors and Stockholders of

Champions Oncology, Inc.



Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheetsheets of Champions Oncology, Inc. and Subsidiaries (the “Company”“Company") as of April 30, 2015,2018 and 2017, and the related consolidated statementstatements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the year then ended. Theyears in the two-year period April 30, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of April 30, 2018 and 2017, and the consolidated results of their operations and their cash flows for each of the years in the two-year period ended April 30, 2018, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on thesethe Company’s financial statements based on our audit.

audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our auditaudits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included considerationAs part of our audits we are required to obtain an understanding of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Champions Oncology, Inc. and Subsidiaries as of April 30, 2015, and the consolidated results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ EisnerAmper LLP

Iselin, New Jersey

July 29, 2015

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

Champions Oncology, Inc.

We have audited the accompanying consolidated balance sheet of Champions Oncology, Inc. (the “Company”) as of April 30, 2014, and the related consolidated statement of operations, comprehensive loss, changes in stockholders' equity, and cash flows for the year ended April 30, 2014. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes


Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements, assessingstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, andas well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audit providesaudits provide a reasonable basis for our opinion.

In our opinion,


{Signature or /s/ EisnerAmper LLP}

We have served as the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Champions Oncology, Inc. at AprilCompany’s auditor since 2015.

EISNERAMPER LLP
Iselin, New Jersey
July 30, 2014, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Baltimore, Maryland

July 28, 2014

2018



CHAMPIONS ONCOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

AS OF APRIL 30

(Dollars in Thousands)

  2015  2014 
ASSETS        
Current assets:        
Cash and cash equivalents. $9,357  $5,891 
Accounts receivable, net  1,060   1,325 
Prepaid expenses and other current assets  346   383 
         
Total current assets  10,763   7,599 
         
Restricted cash  163   165 
Property and equipment, net  452   434 
Goodwill  669   669 
         
Total assets  12,047  $8,867 
         
LIABILITIES        
AND STOCKHOLDERS' EQUITY        
Current liabilities:        
Accounts payable $1,414  $981 
Accrued liabilities  373   587 
Deferred revenue  2,009   2,091 
         
Total current liabilities  3,796   3,659 
         
Warrant liability  -   2,011 
Other Non-current liability  192   - 
         
Total liabilities  3,988   5,670 
         
Stockholders' equity:        
Common stock, $.001 par value; 200,000,000 and 125,000,000 shares authorized; 107,561,338 and 70,122,086 shares issued and 104,425,102 and  66,885,850 shares outstanding as of April 30, 2015 and 2014, respectively  108   70 
Treasury stock, at cost, 3,236,236 common shares as of April 30, 2015 and 2014  (1,252)  (1,252)
Additional paid-in capital  61,223   43,259 
Accumulated deficit  (52,020)  (38,880)
         
Total stockholders' equity  8,059   3,197 
         
Total liabilities and stockholders' equity  12,047  $8,867 

In Thousands except for shares)

 2018 2017
ASSETS   
Current assets:   
Cash and cash equivalents$856
 $3,295
Accounts receivable, net3,917
 2,274
Prepaid expenses and other current assets287
 300
    
Total current assets5,060
 5,869
    
Restricted cash150
 150
Property and equipment, net2,083
 1,216
Other long term assets116
 107
Goodwill669
 669
    
Total assets8,078
 $8,011
    
LIABILITIES
AND STOCKHOLDERS' EQUITY
   
Current liabilities:   
Accounts payable$2,154
 $1,852
Accrued liabilities595
 685
Deferred revenue4,704
 4,910
    
Total current liabilities7,453
 7,447
    
Other non-current liabilities622
 164
    
Total liabilities8,075
 7,611
    
Stockholders' equity:   
Common stock, $.001 par value; 200,000,000 shares authorized; 11,277,675 and 11,251,844 shares issued and 11,003,228 and 10,982,159 shares outstanding as of April 30, 2018 and 2017, respectively11
 11
Treasury stock, at cost, 269,685 common shares as of April 30, 2018 and 2017(1,252) (1,252)
Additional paid-in capital72,070
 70,991
Accumulated deficit(70,826) (69,350)
    
Total stockholders' equity3
 400
    
Total liabilities and stockholders' equity8,078
 $8,011
The accompanying notes are an integral part of these Consolidated Financial Statements.




CHAMPIONS ONCOLOGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands Except Per Share Amounts)

  Year Ended April 30, 
  2015  2014 
Operating revenue:        
Personalized oncology solutions $1,663  $2,264 
Translational oncology solutions  7,200   9,286 
         
Total operating revenue  8,863   11,550 
         
Costs and operating expenses:        
Cost of personalized oncology solutions  2,733   2,731 
Cost of translational oncology solutions  4,900   3,532 
Research and development  4,845   2,265 
Sales and marketing  4,283   3,155 
General and administrative  5,340   6,127 
         
Total costs and operating expenses  22,101   17,810 
         
Loss from operations  (13,238)  (6,260)
         
Other income/(expense):        
Change in fair value of warrant liability  981   (965)
Warrant modification charge  (586)  - 
Other expense (170)  (164)
         
Total other income/(expense)  225   (1,129)
         
Net loss before income tax expense  (13,013)  (7,389)
Provision for income tax  127   17 
         
Net loss$(13,140) $(7,406)
         
Net loss per common share outstanding   
basic and diluted $(0.18) $(0.11)
and diluted $(0.18) $(0.11)
         
Weighted average common shares outstanding basic and diluted  71,824,146   66,863,915 

 Year Ended April 30,
 2018 2017
Operating revenue: 
  
Oncology solutions$20,241
 $15,411
    
Total operating revenue20,241
 15,411
    
Costs and operating expenses: 
  
Cost of oncology solutions10,553
 9,703
Research and development4,401
 4,293
Sales and marketing2,570
 3,261
General and administrative4,071
 4,963
    
Total costs and operating expenses21,595
 22,220
    
Loss from operations(1,354) (6,809)
    
Other expense: 
  
Other expense(89) (56)
    
Total other expense(89) (56)
    
Net loss before income tax expense(1,443) (6,865)
Provision for income tax33
 19
    
Net loss$(1,476) $(6,884)
    
Net loss per common share outstanding   
basic and diluted$(0.13) $(0.64)
    
Weighted average common shares outstanding basic and diluted10,991,105
 10,684,395


CHAMPIONS ONCOLOGY, INC.
CONSOLIDATED STATEMENTSSTATEMENT OF COMPREHENSIVE LOSS

CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(Dollars in Thousands)                

Net loss $(13,140) $(7,406)
Foreign currency translation adjustment  -   100 
         
Comprehensive loss $(13,140) $(7,306)

In Thousands except for shares)

 Common Stock Treasury Stock 
Additional
Paid-in
Capital
 
Accumulated
Deficit
 
Total
Stockholders'
Equity
 Shares Amount Shares Amount   
Balance, May 1, 20168,704,846
 $9
 269,685
 $(1,252) $63,947
 $(62,466) $238
Stock-based compensation—
 —
 —
 —
 2,662
 —
 2,662
Sale of common stock, net of issuance costs of $742k2,258,749
 2
 —
 —
 4,338
 —
 4,340
Issuance of common stock for services18,564
 —
 —
 —
 44
 —
 44
Net loss—
 —
 —
 —
 —
 (6,884) (6,884)
              
Balance, April 30, 201710,982,159
 $11
 269,685
 $(1,252) $70,991
 $(69,350) $400
Stock-based compensation and modification expense—
 —
 —
 —
 1,004
 —
 1,004
Issuance of common stock for services8,569
 —
 —
 —
 37
 —
 37
Issuance of common stock on exercise of stock options12,500
 —
 —
 —
 38
 —
 38
Net loss—
 —
 —
 —
 —
 (1,476) (1,476)
              
Balance, April 30, 201811,003,228
 $11
 269,685
 $(1,252) $72,070
 $(70,826) $3
The accompanying notes are an integral part of these Consolidated Financial Statements.

F-5


CHAMPIONS ONCOLOGY, INC.

CONSOLIDATED STATEMENTSTATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

CASH FLOWS

(Dollars in Thousands)

                    Accumulated    
              Additional     Other  Total 
  Common Stock  Treasury Stock  Paid-in  Accumulated  Comprehensive  Stockholders' 
  Shares  Amount  Shares  Amount  Capital  Deficit  Loss  Equity 
                         
Balance, April 30, 2013  35,643,767  $39   3,236,000  $(1,252) $23,580  $(31,474) $(100) $(9,206)
Stock-based compensation  -   -   -   -   2,807   -   -   2,807 
Exercise of options and warrants  33,750   -   -   -   21   -   -   21 
Issuance of restricted stock  75,000   -   -   -   -   -   -   - 
Amendment to Redeemable Stock  31,133,333   31   -   -   16,851   -   -   16,881 
Foreign currency translation adjustment  -   -   -   -   -   -   100   100 
Net loss  -   -   -   -   -   (7,406)  -   (7,406)
                                 
Balance, April 30, 2014  66,885,850  $70   3,236,000  $(1,252) $43,259  $(38,880) $-  $3,197 
                                 
Stock-based compensation  -   -   -   -   2,948   -   -   2,948 
Exercise of options and warrants  3,750   -   -   -   2   -   -   2 
Conversion of convertible notes and accrued interest  -   -   -   -   2,060   -   -   2,060 
Sale of common stock, net of issuance costs of $880k  35,271,052   36   -   -   11,124   -   -   11,160 
Issuance of share under anti-dilution provisions  2,264,450   2   -   -   -   -   -   2 
Stock Option Modification  -   -   -   -   214   -   -   214 
Reclassification of warrant Liability  -   -   -   -   1,616   -   -   1,616 
Net loss  -   -   -   -   -   (13,140)  -   (13,140)
                                 
Balance, April 30, 2015  104,425,102  $108   3,236,000  $(1,252) $61,223  $(52,020) $-  $8,059 

 Year Ended April 30,
 2018 2017
Operating activities: 
  
Net loss$(1,476) $(6,884)
    
Adjustments to reconcile net loss to net cash  used in operating activities: 
  
Stock-based compensation and modification expense1,004
 2,662
Depreciation and amortization expense360
 168
Deferred Rent454
 —
Deferred Compensation7
 —
Allowance for doubtful accounts(44) 24
Issuance of common stock for services30
 44
Changes in operating assets and liabilities: 
  
Accounts receivable(1,600) (986)
Prepaid expenses and other current assets13
 143
Other long term assets(9) (107)
Accounts payable301
 (43)
Accrued liabilities(90) 412
Other non-current liabilities30
 (44)
Deferred revenue(206) 1,771
    
Net cash used in operating activities(1,226) (2,840)
    
Investing activities: 
  
Purchase of property and equipment(1,229) (766)
Gain on disposal of fixed assets3
 —
    
Net cash used in investing activities(1,226) (766)
    
Financing activities: 
  
Proceeds from June 2016 public offering, net of financing costs of $742—
 4,340
Proceeds from exercise of options and warrants38
 —
Capital lease payments(25) (24)
    
Net cash provided by financing activities13
 4,316
    
Increase (decrease) in cash and cash equivalents(2,439) 710
Cash and cash equivalents, beginning of year3,295
 2,585
    
Cash and cash equivalents, end of year$856
 $3,295
The accompanying notes are an integral part of these Consolidated Financial Statements.

F-6


CHAMPIONS ONCOLOGY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

  Year Ended April 30, 
  2015  2014 
Operating activities:        
Net loss $(13,140) $(7,406)
         
Adjustments to reconcile net loss to net cash  used in operating activities:        
Stock-based compensation and modification expense  3,162   2,807 
Net foreign currency remeasurement loss  -   124 
Depreciation and amortization expense  214   213 
Change in fair value of warrant liability  (981)  965 
Modification of warrant liability  586   - 
Gain/loss on sales of assets  5   - 
Changes in operating assets and liabilities:        
Accounts receivable  265   (825)
Prepaid expenses, deposits and other  37   (68)
Restricted cash  2   27 
Accounts payable  433   (223)
Accrued liabilities  (232)  (24)
Other Non-current liability  100   - 
Deferred revenue  (82)  977 
         
Net cash used in operating activities  (9,630)  (3,433)
         
Investing activities:        
Purchase of property and equipment  (119)  (234)
Proceeds from sale of fixed assets  5   - 
         
Net cash used in investing activities  (114)  (234)
         
Financing activities:        
Private placement financing, net of financing costs of $880k  11,220   - 
Proceeds from Executive Note financing  2,000   - 
Capital lease payments  (12)  - 
Proceeds from exercise of options and warrants  2   21 
         
Net cash provided by financing activities  13,210   21 
         
Exchange rate effect on cash and cash equivalents  -   (24)
         
Increase (decrease) in cash and cash equivalents  3,466   (3,670)
Cash and cash equivalents, beginning of year  5,891   9,561 
         
Cash and cash equivalents, end of year $9,357  $5,891 
         
Non-cash investing and financing activities:        
Purchased equipment under capital lease  124   - 
         
Conversion of executive note financing  2,000   - 
         
Reclassification of warrant liability to equity  1,616   - 

The accompanying notes are an integral part of these Consolidated Financial Statements.

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Basis of Presentation

Background

Champions Oncology, Inc. (the “Company”), is engaged in the development and sale of advanced technology solutions and products to personalize the development and use of oncology drugs. The Company’s TumorGraft Technology Platform is a novel approach to personalizing cancer care based upon the implantation of human tumors in immune-deficient mice. The Company uses this technology, in conjunction with related services, to offer solutions for two consumer groups: Translational Oncology Solutions (“TOS”) and Personalized Oncology Solutions (“POS”) and Translational Oncology Solutions (“TOS”). POS assists physicians in developing personalized treatment options for their cancer patients through tumor specific data obtained from drug panels and related personalized oncology services. The Company’s TOS business offers a technology platform to pharmaceutical and biotechnology companies using proprietary TumorGraft studies, which the Company believes may be predictive of how drugs may perform in clinical settings.

settings and POS assists physicians in developing personalized treatment options for their cancer patients through tumor specific data obtained from drug panels and related personalized oncology services.

The Company has threetwo operating subsidiaries: Champions Oncology (Israel), Limited and Champions Biotechnology U.K., Limited and Champions Oncology Singapore, PTE LTD.Limited. For the years ended April 30, 20152018 and 2014,2017, there were no material revenues earned by these subsidiaries.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

As of April 30, 2018, the Company determined that it operates in one reportable business segment. The Company evaluated its POS and TOS business operations and determined that the POS operations no longer qualify as a separate reportable segment primarily due to its revenue representing only 7% of total revenue.

Liquidity

Our liquidity needs have typically arisen from the funding of our research and development programs and the launch of new products, working capital requirements, and other strategic initiatives. In the past, we have met these cash requirements through our cash and cash equivalents, working capital management, proceeds from certain private placements and public offerings of our securities and sales of products and services. For the years ended April 30, 2018 and 2017, the Company had a net loss of approximately $1.5 million and $6.9 million, respectively. As of April 30, 2018, the Company had an accumulated deficit of approximately $70.8 million, negative working capital of $2.4 million and cash and cash equivalents of $856,000. We believe that our cash and cash equivalents on hand, together with continued improved cash flows from operations, are adequate to fund operations through at least August 2019. Should the Company be required to raise additional capital, there can be no assurance that management would be successful in raising such capital on terms acceptable to us, if at all.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

The Company’s foreign subsidiaries functional currency is the U.S. dollar. Transaction gains and losses are recognized in earnings. The Company is subject to foreign exchange rate fluctuations in connection with the Company’s international operations.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


Reclassification of Prior Year Presentation

CHAMPIONS ONCOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Certain prior year amounts related to revenue and cost of sales for our POS and TOS business operations have been reclassified for consistency with the current year presentation, reflecting one reportable segment. These reclassifications had no effect on the reported results of operations.
Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less at the time of purchase, to be cash equivalents. At various times, the Company has amounts on deposit at financial institutions in excess of federally insured limits.

F-8

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fair Value

The carrying value of cash and cash equivalents, accounts receivable, prepaid expenses, deposits and other receivables, accounts payable, and accrued liabilities approximate their fair value based on the liquidity or the short-term maturities of these instruments. The fair value hierarchy promulgated by GAAP consists of three levels:

·Level one — Quoted market prices in active markets for identical assets or liabilities;
·Level two — Inputs other than level one inputs that are either directly or indirectly observable; and
·Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Level one — Quoted market prices in active markets for identical assets or liabilities;
Level two — Inputs other than level one inputs that are either directly or indirectly observable; and
Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The Company had one liability measured at fair value on a recurring basis, which relate to warrants that were issued in connection with the 2011 and 2013 private placements of the Company’s securities. On March 11, 2015 the Company entered into a securities purchase agreement and amended certain agreements which eliminated the provisions within the warrant agreements requiring the liability classification of the warrant liability. Accordingly, the warrant liability was reclassified to equity at the date of such modification which is discussed more fully in Note 7. As of March 11, 2015 and April 30, 2014, these warrants had an estimated fair value of $1.6 million and $2 million, respectively, which was calculated by the Monte Carlo simulation valuation method using level three inputs. The Company has no assets that are measured at fair value on a recurring basis and there were no assets or liabilities measured at fair value on a non-recurring basis during the yearsyear ended April 30, 2015 and 2014.

The following table presents information about our warrant liability, which was our only financial instrument measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of April 30 (dollars in thousands):

  2015  2014 
         
Balance beginning of year $(2,011) $(1,046)
Transfers to (from) Level 3  -   - 
Change in fair value included in earnings  981   (965)
Modification Charge  (586)    
Reclassification to equity  1,616   - 
         
Balance end of year $-  $(2,011)

2018.

Accounts Receivable

Accounts receivable represent amounts due under agreements with pharmaceutical and biotechnology companies for TOS and amounts due under agreements with patients for POS. At each reporting period, the Company evaluates open accounts receivable for collectability and records an allowance for potentially uncollectible accounts. For both April 30, 20152018 and 2014,2017, the allowance for these accounts was $2,000.$13,000 and $56,000, respectively. Accounts receivable is also comprised of certain unbilled accounts receivable for services completed under TOS that have not been billed as of the balance sheet date. As of April 30, 20152018 and 2014,2017, the Company had unbilled receivables of $636,000$2.1 million and $884,000,$1.6 million, respectively.

Restricted Cash

As of April 30, 20152018 and 2014,2017, the Company has restricted cash of $163,000$150,000 and $165,000,$150,000, respectively, which is classified as a noncurrentnon-current asset on the consolidated balance sheets. This restricted cash serves primarily as collateral for corporate credit cards to provide financial assurance that the Company will fulfill its obligations. The cash is held in custody by the issuing bank, is restricted as to withdrawal or use, and is currently invested in an interest-bearing Certificate of Deposit (“CD”). ThoughAs of November 2017, the Company has switched vendors and is no longer obligated to restrict this cash. The CD matures in the second quarter of fiscal 2016,2019 at which time the cashCompany will be reinvested into another CD to continue use of the corporate cards. The Company accountsnot renew and will no longer account for this CD as a non-current asset supporting operations of the business.

F-9
restricted cash.

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



Property and Equipment

Property and equipment is recorded at cost and primarily consists of laboratory equipment, furniture and fixtures, and computer hardware and software. Assets in progress include equipment not yet placed in service for the new laboratory facility. Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of the various assets ranging from three to seven years. Property and equipment consisted of the following (in thousands):

  April 30, 
  2015  2014 
       
Furniture and fixtures $70  $69 
Computer equipment and software  685   655 
Laboratory equipment  493   296 
Leasehold improvements  2   2 
         
Total property and equipment  1,250   1,022 
Less: Accumulated depreciation and amortization  (798)  (588)
         
Property and equipment, net $452  $434 

 April 30,
 2018 2017
Furniture and fixtures$73
 $74
Computer equipment and software973
 872
Laboratory equipment2,490
 918
Assets in progress15
 472
Leasehold improvements—
 2
    
Total property and equipment3,551
 2,338
Less: Accumulated depreciation and amortization(1,468) (1,122)
    
Property and equipment, net$2,083
 $1,216
Depreciation and amortization expense was $214,000$360,000 and $213,000$168,000 for the years ended April 30, 20152018 and 2014,2017, respectively. The company disposed of fixed assets which reduced total property and equipment and accumulated depreciation by $16,000 and $(13,000), respectively, leaving a gain on disposal of fixed asset of $3,000. Additionally, included in “Laboratory equipment” for FY 2015as of April 30, 2018 and 2017 is a capital lease asset of $124,000.$130,000 and $124,000, respectively. Depreciation and amortization expense relating the capital lease was $12,405$26,753 and $24,045 for the yearyears ended ArilApril 30, 2015.

2018 and 2017, respectively.


Capital Lease

In November 2014, the Company entered into a lease for laboratory equipment. The lease iswas determined to be a capital lease that has costs of approximately $149,000, at inception, through November 2019. The current monthly capital lease payment is approximately $3,000.

The following is a schedule by years of future minimum lease payments under this capital lease together with the present value of the net minimum lease payments as of April 30, 2015:

For the Years Ended April 30, 2016  23 
  2017  24 
  2018  25 
  2019  26 
  2020  16 
       
Total minimum lease payments   $114 
Less: current maturity    (23)
Long-term maturity    91 

2018 (table in thousands):

For the Years Ended April 30,2019 $28
 2020 16
Total minimum lease payments  44
Less: amount representing interest  (2)
Present value of minimum payments  42
Less: current portion  (26)
   $16
The present value of minimum future obligations shown above is calculated based on interest rate of 5%. DepreciationThe short-term and amortization expense was $12,405 forlong-term components of the year endedcapital lease obligation are included in accrued liabilities and other non-current liabilities, respectively at April 30, 2015.

2018 and 2017.

Impairment of Long-Lived Assets

Impairment losses are to be recognized when the carrying amount of a long-lived asset is not recoverable or exceeds its fair value.  The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that a carrying value may not be recoverable.  The Company uses estimates of future cash flows over the remaining useful life of a long- lived asset or asset group to determine the recoverability of the asset.  These estimates only include the net cash flows directly associated with, and that are expected to arise as a direct result of, the use and eventual disposition of the asset or asset group.  The
CHAMPIONS ONCOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Company has not recognized any impairment losses for the Company’s long-lived assets for the years ending April 30, 20152018 and 2014.

2017.

Other long term assets

Other long term assets represents amount relating to lease deposits for our Hackensack, New Jersey and Rockville, Maryland locations.

Goodwill

Goodwill represents the excess of the cost over the fair market value of the net assets acquired including identifiable assets.  Goodwill is tested annually, or more frequently if circumstances indicate potential impairment, by comparing its fair value to its carrying amount.  The determination of whether or not goodwill is impaired involves significant judgment.  Although the Company believes its goodwill is not impaired, changes in strategy or market conditions could significantly impact the judgments and may require future adjustments to the carrying value of goodwill.  The Company uses a two-step process to test for goodwill impairment.  The first step is to screen for potential impairment, while the second step measures the amount of the impairment, if any.  The first step of the goodwill impairment test compares the fair value of each reporting unit with its carrying amount, including goodwill.  If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired.  If the carrying value of the reporting unit’s net assets, including goodwill, exceeds the fair value of the reporting unit, then the Company determines the implied fair value of goodwill.  If the carrying value of goodwill exceeds its implied fair value, then an impairment of goodwill has occurred and an impairment loss would be recognized for the difference between the carrying amount and the implied fair value of goodwill as a component of operating income.  The implied fair value of goodwill is calculated by subtracting the fair value of tangible and intangible assets associated with the reporting unit from the fair value of the unit. The Company tests for goodwill impairment at the operatingreporting unit segment level.

The Company has not recognized any impairment losses for the Company’s goodwill for the years endingended April 30, 20152018 and 2014.

2017.

Deferred Revenue

Deferred revenue represents payments received in advance for products to be delivered.  When products are delivered, deferred revenue is then recognized as earned.

F-10

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Warrant Liability

Warrant liability represented the fair value

Other Non-Current Liabilities

Other non-current liabilities represents amounts relating to deferred rent for our Rockville, Maryland laboratory facility, non-current portion of warrants issued in connection with the 2011capital lease for laboratory equipment and 2013 private placementsuncertain tax positions relating to one of the Company’s common stock, which are described more fully in Note 8. These warrants were presented as liabilities based on the certain exercise price reset provisions.  The  liability, which was recorded at fair value on the accompanying consolidated balance sheets, was calculated by the Monte Carlo simulation valuation method.  The change in fair value of these warrants were recognized as other income or expense in the consolidated statements of operations. On March 11, 2015 the Company entered into a securities purchase agreement and amended the 2011 and 2013 warrant agreements which eliminated the liability feature of these warrants. Such warrants were transferred to equity which is discussed more fully in Note 7.

our foreign entities.


Revenue Recognition

The Company derives revenue from its TOS and POS businesses. Translational oncology solutions offer a preclinical TumorGraft platform to pharmaceutical and TOS businesses.biotechnology companies using proprietary TumorGraft studies, which the Company believes may be predictive of how drugs may perform in clinical settings. Personalized oncology solutions assist physicians by providing information to help guide the development of personalized treatment plans for their patients using our core offerings, including testing oncology drugs and drug combinations on personalized TumorGrafts, and through other products. Translational oncology solutions offer a preclinical TumorGraft platform to pharmaceutical and biotechnology companies using proprietary TumorGraft studies, which the Company believes may be predictive of how drugs may perform in clinical settings. The Company recognizes revenue when the following four basic criteria are met: (i) a contract has been entered into with its customers; (ii) delivery has occurred or services rendered to its customers; (iii) the fee is fixed and determinable as noted in the contract; and (iv) collectability is reasonably assured.  The Company utilizes a proportional performance revenue recognition model for its TOS business, under which it recognizes revenue as performance occurs, based on the relative outputs of the performance that have occurred up to that point in time under the respective agreement, typically the delivery of reports to its customers documenting the results of testing protocols.

When a POSTOS or TOSPOS arrangement involves multiple elements, the items included in the arrangement (deliverables) are evaluated to determine whether they represent separate units of accounting.  The Company performs this evaluation at the inception of an arrangement and as each item in the arrangement is delivered.  Generally, the Company accounts for a deliverable (or a group of deliverables) separately if: (i) the delivered item(s) has standalone value to the customer, and (ii) if the Company has given the customer a general right of return relative to the delivered item(s) and the delivery or performance of the undelivered item(s) or service(s) is probable and substantially in the Company’s control.  All revenue from contracts determined not to have separate
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


units of accounting is recognized based on consideration of the most substantive delivery factor of all the elements in the contract or if there is no predominant deliverable upon delivery of the final element of the arrangement.

During the third quarter

Cost of fiscal year 2014 we entered into a contract that may require the replacementOncology Solutions
Cost of licensed tumors in the event that certain contractual terms have not been satisfied. Due to such requirements we have estimated an amount of licensed tumors that may need to be replaced, and we have deferred this revenue until all provisions of the agreement have been met. There was $258,000 of deferred revenue as of April 30, 2015 relatingoncology solutions relates to our estimateTOS and POS business units. TOS costs consist of replacementdirect costs related to mice purchases and maintenance costs for studies completed internally and charges from CROs for studies handled externally. Indirect costs include salaries for personnel directly engaged in providing TOS products. All costs of licensed tumors.

Costperforming studies in-house are expensed as incurred. All TOS costs of Personalized Oncology Solutions

Cost ofperforming studies from external sources, if any, are expensed when incurred. POS consists of costs related to POS revenue earned from implantations, drug panels, tumor boards, and gene sequencing services, as well as indirect internal costs, such as salaries for personnel directly engaged in these products. Direct costs associated with implantation revenues are primarily related to mice purchases and maintenance and shipping of tumor tissue. Direct drug panel costs are primarily incurred from mice purchases and maintenance and drug purchases. Direct tumor board costs are primarily related to physicians’ honorariums and any tumor board participation costs such as travel, lodging and meals. Direct gene sequencing costs are primarily related to costs billed from the gene sequencing service provider. All POS costs are expensed as incurred.

Cost of Translational Oncology Solutions

Cost of TOS consists of costs related to TOS revenue.  Direct costs include mice purchases and maintenance costs for studies completed internally and charges from CROs for studies handled externally. Indirect costs include salaries for personnel directly engaged in providing TOS products. All costs of performing studies in-house are expensed as incurred. All costs of performing studies from external sources, if any, are expensed when received.

Research and Development

Research and development costs represent both costs incurred internally for research and development activities, including personnel costs and mice purchases and maintenance, as well as costs incurred externally to facilitate research activities, such as tumor tissue procurement and characterization expenses.  All research and development costs are expensed as incurred. 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Sales and Marketing

Selling and marketing expenses represent costs incurred to promote the Company’s products offered, including salaries, benefits and related costs of our sales and marketing personnel, and represent costs of advertising and other selling and marketing expenses. All sales and marketing costs, including advertising costs, are expensed as incurred.

Basic and Dilutive Loss Per Common Share

Basic net loss per share is computed by dividing the net loss for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss for the period by the weighted-average number of shares of common stock plus dilutive potential common stock considered outstanding during the period. Such dilutive shares consist of incremental shares that would be issued upon exercise of the Company’s derivativecommon stock purchase warrants whichand stock options. For the twelve months ended April 30, 2018 and 2017, basic and dilutive loss per share were reclassified to equitythe same, as discussed in note 7.

  Year Ended April 30, 
  2015  2014 
Basic loss per share computation        
Net loss attributable to common stockholders $(13,139,820) $(7,406,367)
Weighted Average common shares - basic  71,824,146   66,863,915 
Basic net loss per share $(0.18) $(0.11)
         
Diluted loss per share computation        
Net loss attributable to common stockholders $(13,139,820) $(7,406,367)
Less: Gain on derivative warrant liability  980,519   - 
Loss available to common stockholders $(14,120,339) $(7,406,367)
         
Weighted Average common shares  71,824,146   66,863,915 
Incremental shares from assumed exercise of warrants and stock options  5,268,777   - 
Adjusted weighted average share – diluted  77,092,923   66,863,915 
         
Diluted net loss per share $(0.18) $(0.11)

the potentially dilutive securities did not have a dilutive effect.


 Year Ended April 30,
 2018 2017
Basic and diluted net loss per share computation (dollars in thousands except per share amounts) 
  
Net loss attributable to common stockholders$(1,476) $(6,884)
Weighted Average common shares10,991,105
 10,684,395
Basic and diluted net loss per share$(0.13) $(0.64)
The following table reflects the total potential share-basedstock-based instruments outstanding at April 30, 20152018 and 20142017 that could have an effect on the future computation of dilution per common share:

  Year Ended April 30, 
  2015  2014 
       
Stock options  24,048,020   23,351,037 
Warrants  25,318,082   3,276,667 
         
Total common stock equivalents  49,366,102   26,627,704 

Share-Based

 Year Ended April 30
 2018 2017
Stock options2,705,845
 2,308,704
Warrants2,004,284
 2,004,284
    
Total common stock equivalents4,710,129
 4,312,988
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Stock-based Payments

The Company typically recognizes expense for share-basedstock-based payments based on the fair value of awards on the date of grant.  The Company uses the Black-Scholes option pricing model to estimate fair value.  The Black-Scholes option valuation model was developed for use in estimating the fair value of short-traded options that have no vesting restrictions and are fully transferable.  The option pricing model requires the Company to estimate certain key assumptions such as expected life, volatility, risk free interest rates and dividend yield to determine the fair value of share-basedstock-based awards.  These assumptions are based on historical information and management judgment.  The risk-free interest rate used is based on the United States treasury security rate with a term consistent with the expected term of the award at the time of the grant. Since the Company has limited option exercise history, it has generally elected to estimate the expected life of an award based upon the Securities and Exchange Commission-approved “simplified method” noted under the provisions of Staff Accounting Bulletin No. 107 with the continued use of this method extended under the provisions of Staff Accounting Bulletin No. 110. During fiscal 2013,  Estimated volatility is based upon the Company changed its method used to calculate expectedhistorical volatility from an index, which was based onof the Company’s historic volatility and certain comparable guideline companies, to the use of only the Company’s historic volatility which had an immaterial effect on the financial statements.Company's common stock.  The Company does not anticipate paying a dividend, and therefore, no expected dividend yield was used.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company expenses share-basedstock-based payments over the period that the awards are expected to vest, net of estimated forfeitures.  If actual forfeitures differ from management’s estimates, compensation expense is adjusted.  The Company expenses modification charges in the period of modification and, if required, over the remaining period the awards are expected to vest. The Company will report cash flows resulting from tax deductions in excess of the compensation cost recognized from those options (excess tax benefits) as financing cash flows, if they should arise.

Income Taxes

Deferred income taxes have been provided to show the effect of temporary differences between the recognition of expenses for financial and income tax reporting purposes and between the tax basis of assets and liabilities, and their reported amounts in the consolidated financial statements.  In assessing the realizability of deferred tax assets, the Company assesses the likelihood that deferred tax assets will be recovered through tax planning strategies or from future taxable income, and to the extent that recovery is not likely or there is insufficient operating history, a valuation allowance is established.  The Company adjusts the valuation allowance in the period management determines it is more likely than not that net deferred tax assets will or will not be realized.  Changes in valuation allowances from period to period are included in the tax provision in the period of change. As of April 30, 20152018 and 2014,2017, the Company provided a valuation allowance for all net deferred tax assets, as recovery is not more likely than not based on an insufficient history of earnings.

Tax positions are positions taken in a previously filed tax return or positions expected to be taken in a future tax return that are reflected in measuring current or deferred income tax assets and liabilities reported in the consolidated financial statements.  Tax positions include, but are not limited to, the following:

·An allocation or shift of income between taxing jurisdictions;
·The characterization of income or a decision to exclude reportable taxable income in a tax return; or
·A decision to classify a transaction, entity or other position in a tax return as tax exempt.

An allocation or shift of income between taxing jurisdictions;
The characterization of income or a decision to exclude reportable taxable income in a tax return; or
A decision to classify a transaction, entity or other position in a tax return as tax exempt.

The Company reflects tax benefits only if it is more likely than not that we will be able to sustain the tax position, based on its technical merits.  If a tax benefit meets this criterion, it is measured and recognized based on the largest amount of benefit that is cumulatively greater than 50% likely to be realized.  The Company has $100,000recorded $151,000 and $121,000 of unrecognizedliabilities related to uncertain tax benefitspositions relative to one of its foreign operations as of April 30, 20152018 and none as of April 30, 2014.

2017, respectively.

The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties on the Company’s balance sheets at April 30, 20152018 and 2014,2017, and has not recognized interest and/or penalties in the statement of operations for either period. We do not anticipate any significant unrecognized tax benefits will be recorded during the next 12 months.  

Recent Accounting Pronouncements

In May 2014, the FASBFinancial Accounting Standards Board (“FASB”) issued ASUAccounting Standards Update (“ASU”) No. 2014-09,“Revenue “Revenue from Contracts with Customers” (“ASU 2014-09”), which will replace mostsupersedes nearly all existing revenue recognition guidance in U.S. Generally Accepted Accounting Principles and is intended to improve and converge with international standards the financial reporting requirements for revenue from contracts with customers.under GAAP. The core principle of ASU 2014-09 is that an entity shouldto recognize revenue for the transfer ofrevenues when promised goods or services equalare transferred to thecustomers in an amount that itreflects the consideration to which an entity expects to be entitled to receive for those goods or services. ASU 2014-09 alsodefines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. In addition, this guidance requires new or expanded disclosures related to the judgments made by companies when following this framework and additional quantitative disclosures about
CHAMPIONS ONCOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


regarding contract balances and remaining performance obligations. On July 9, 2015, the nature, timingFASB voted to defer the effective date by one year to December 15, 2017 for interim and uncertaintyannual reporting periods beginning after that date. Early adoption of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU 2014-09 allows for both retrospective and prospective methods of adoption and is permitted but not before the original effective fordate (annual periods beginning after December 15, 2016.2016). When effective, ASU 2014-09 prescribes either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients; or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluatingwill adopt this guidance on May 1, 2018.

The Company has evaluated the overall impact that the adoption of ASU 2014-09 will have on ourthe Company’s consolidated financial statements. On July 9,statements, as well as the FASB decided to delayexpected timing and method of adoption. The Company established an implementation team, including external advisers, and is finalizing the effective datereview of the newCompany’s revenue standard by one year.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In June 2014, FASB has issued Accounting Standards Update (“ASU”) No. 2014-12,“Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. This ASU requires that a performance target that affects vesting,portfolio and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achievedrelated contracts across its various business units and should represent the compensation cost attributablegeographies. Discussions regarding changes to the period(s) for whichCompany’s current accounting policies and practices remain ongoing and preliminary conclusions are subject to change.


Upon adoption, the requisite service has already been rendered.. The amendmentsCompany will recognize revenue from contracts with customers as each performance obligation is satisfied, either at a point in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted.time or over a period of time, based on when control transfers to customers. The adoption of this standardupdate is not expected to have a material impact on our consolidated financial statements.

The Company plans to adopt the new revenue recognition standard under the modified retrospective transition method by recognizing the cumulative effect of applying the standard as an adjustment to the Company’s condensed consolidated balance sheetsBalance Sheet. The Company has been assessing the impact of  the new revenue recognition standard, and resultsthe Company does not anticipate being able to provide the full impact on the Balance Sheets or Statements of operations.

Operations until they complete the review of all of their contracts during fiscal 2019. From the initial review and assessment of a sample of contracts with customers, the Company will evaluate the measurement and timing of revenue recognition for certain of its co-clinical contracts under the new standard. The Company will also provide enhanced disclosure regarding revenue recognition, including disclosures of revenue streams, performance obligations, variable consideration and the related judgments and estimates necessary to apply the new standard.



The Company plans to adopt the new revenue recognition standard under the modified retrospective transition method by recognizing the cumulative effect of applying the standard as an adjustment to the Company’s Balance Sheet. Until the Company completes testing of the new revenue recognition standard, the Company does not anticipate being able to provide the impact of the new standard on the Balance Sheet or Statements of Operations; however, from the initial review and assessment of a sample of contracts with customers, the Company does not anticipate the new accounting pronouncement to have a material impact on the Company’s financial statements, except enhanced disclosure regarding revenue recognition, including disclosures of revenue streams, performance obligations, variable consideration and the related judgments and estimates necessary to apply the new standard.

In August 2014, the FASB issued Accounting Standards Update (“ASU”)ASU No. 2014-15,“Presentation of Financial Statements — Going Concern: Disclosure “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. This ASU requires management to evaluate,The amendments in this update state that in connection with preparing financial statements for each annual and interim reporting period, an entity’s management should evaluate whether there are conditions or events considered in the aggregate, that raise substantial doubt about anthe entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued, when applicable) and provide related disclosures. ASU 2014-15 is. The amendments in this update are effective for the annual reporting period endingbeginning after December 15, 2016 and for annual periods and interim periods thereafter. Early adoptionapplication is permitted. The Company adopted this updated in fiscal 2018 and did not have a material impact on our consolidated financial statements.

In February 2016, the FASB ASU No. 2016-02, Leases. The new standard will require most leases to be recognized on the balance sheet which will increase reported assets and liabilities. Lessor accounting remains substantially similar to current guidance. The new standard is effective for annual and interim periods in fiscal years beginning after December 15, 2018, which for us is the first quarter of fiscal 2019 and mandates a modified retrospective transition method. We are currently evaluatingassessing the impact of ASU 2014-15this update on itsour consolidated financial statements.

Note 3. Teva Agreement

On July 30, 2013,


In April 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting”. The new standard simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU No. 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted this standard in fiscal 2018 and, as expected, it did not have a material impact on our consolidated financial statements.

CHAMPIONS ONCOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments” . The new standard attempts to reduce diversity in practice in how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU No. 2016-15 provides guidance on eight specific cash flow issues. The new guidance will be effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted including adoption in an interim period. We do not intend to early adopt and the adoption of this update is not expected to have a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): “Simplifying the Test for Goodwill Impairment”. The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. It affects public entities that have goodwill reported in their financial statements and have not elected the private company alternative for the subsequent measurement of goodwill. A public entity that is a U.S. Securities and Exchange Commission ("SEC") filer should adopt the amendments in this update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. For the Company, entered into an agreement with Teva Pharmaceutical Industries Ltd., pursuant to which the amendments are effective January 1, 2020. The Company agreed to conduct TumorGraft studieshas early adopted this ASU in fiscal 2018. The adoption of this ASU did not have a material impact on multiple proprietary chemical compounds provided by Teva to determine the activity or response of these compounds in potential clinical indications. Under the agreement, Teva agreed to pay an upfront payment and, under certain conditions, pay the Company various amounts upon achieving certain milestones, based on the performance of the compounds in preclinical testing and dependent upon testing the compound in clinical settings and obtaining FDA approval. In addition, Teva agreed to pay the Company royalties on any commercialized products developed under the agreement. This agreement terminated a prior collaborative agreement between Cephalon, Inc. a wholly-owned subsidiary of Teva, and the Company. For the years ended April 30, 2015 and 2014, revenue of $724,000 and $194,000, respectively, were recognized relating to this agreement.

our consolidated financial statements.

Note 4.3. Significant Customers

For the year ended April 30, 2015, three2018, two of our customers accounted for more than 10.0% of our total revenue in the amount of $0.9 million, $0.9$4.2 million and $0.8 million.$2.6 million, or 20.6% and 12.8%. The revenue from these customers is part of the TOS business and captured in the TOSconsolidated oncology solutions revenue line item within the income statement.

For the year ended April 30, 2014, three2017, one of our customers accounted for more than 10.0% of our total revenue in the amount of $1.6$3.3 million, $1.5 million and $1.5 million.or 21.3%. The revenue from these customersthis customer is part of the TOS business and was captured in the TOSconsolidated oncology solutions revenue line item within the income statement.

For the year ended

As of April 30, 2015,2018, two of our customers accounted for more than 10.0% of our total accounts receivable balance in the amount of $153,446$878,530 and $119,540,$736,071, or 14.5%22.6% and 11.3%19.0%, respectively.

For the year ended

As of April 30, 2014,2017, two of our customers accounted for more than 10.0% of our total accounts receivable balance in the amount of $398,053$994,095 and $171,962,$256,022, or 30.4%43.7% and 13.2%11.3%, respectively.

Note 5.4. Commitments and Contingencies

Operating Leases

As of

The Company currently leases its office and laboratory facilities under non-cancelable operating leases. Rent expenses totaled $657,000 and $398,000 for the years ended April 30, 2015, we lease2018 and 2017, respectively. The Company considers its facilities adequate for our current operational needs.

The Company leases the following facilities under non-cancelable operating lease agreements:

·One University Plaza, Suite 307, Hackensack, New Jersey 07601, which, since November 2011, serves as the Company’s corporate headquarters. The lease expires in November 2016. The Company recognized $85,000 and $75,000 of rental costs relative to this lease for fiscal 2015 and 2014, respectively.

·855 North Wolfe Street, Suite 619, Baltimore, Maryland 21205, which consists of laboratories and office space where the Company conducts operations related to its primary service offerings.  This lease expires in June 2016.  The Company recognized $86,000 and $85,000 of rental costs relative to this lease for fiscal 2015 and 2014, respectively.

·17 Hatidhar Street, Ra’anana, Israel, which serves as office headquarters for Champions Oncology, Israel. The Company recognized nil and $6,000 of rental costs relative to this lease for fiscal 2015 and 2014, respectively. Following the expiration of this lease, the Company utilizes office space on a limited basis from one of its stockholders. The fair value of rental costs associated with the new office space is immaterial.

One University Plaza, Suite 307, Hackensack, New Jersey 7601, which, since November 2011, serves as the Company’s corporate headquarters. The lease expires in November 2021. The Company recognized $90,000 and $86,000 of rental costs relative to this lease for fiscal 2018 and 2017, respectively.
855 North Wolfe Street, Suite 619, Baltimore, Maryland 21205, which consists of laboratories and office space where the Company conducts operations related to its primary service offerings.  This lease was terminated in October 2017.  The Company transitioned its activities from this location to the new location in Rockville, MD. The Company recognized $59,000 and $105,000 of rental costs relative to this lease for fiscal 2018 and 2017, respectively.
450 East 29th Street, New York, New York, 10016, which was a laboratory facility. The Company recognized $52,000 and $207,000 of rental expense for fiscal 2018 and 2017, respectively. This lease expired in May 2017 and was not renewed.
1330 Piccard Drive, Suite 025, Rockville, MD 20850, which consists of laboratory and office space where the Company will conduct operations related to its primary service offerings. The Company executed this lease on January 11, 2017. The operating commencement date was August 11, 2017. This lease expires in August 2028. The Company recognized $454,000 and nil of rental expense for fiscal 2018 and 2017, respectively.
910 Clopper Road,Suites 260S and 280S, Gaithersburg, Maryland 20878, which consists of laboratory and office space where the Company will conduct operations related to its primary service offerings. The Company executed this lease on April 1, 2018. The operating commencement date is May 1, 2018. This lease expires in August 31, 2028. The Company recognized nil of rental expense for fiscal 2018 and 2017.

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

·57 Mohamed Sultan Road, Singapore, which serves as office headquarters for Champions Oncology, Singapore. The lease expired in January 2015. The Company has not renewed this lease. The Company recognized $4,000 and $5,000 of rental costs relative to this lease for fiscal 2015 and 2014, respectively.

·450 East 29th Street, New York, New York, 10016, which is a laboratory at which we implant tumors. This lease expires in September 2015 and can be renewed by the Company for subsequent one year terms. The Company recognized $47,000 and $4,000 of rental costs relative to this lease for fiscal 2015 and 2014, respectively.



Future minimum lease payments due each fiscal year are as follows (in thousands):

2017 $192,013 
2018  64,149 
2019  - 
     
Total $256,162 

2019$437,983
2020740,249
2021817,864
2022790,243
2023745,872
Thereafter$3,798,433
Total$7,330,644

Legal Matters

The Company is not currently party to any legal matters to its knowledge. The Company is not aware of any other matters that would have a material impact on the Company’s financial position or results of operations.

Registration Payment Arrangements

The Company has entered into an Amended and Restated Registration Rights Agreement in connection with the March 2015 Private Placement and is discussed more fully in Note 7 below.Placement. This Amended and Restated Registration Rights Agreement contains provisions that may call for the Company to pay penalties in certain circumstances. This registration payment arrangement primarily relates to the Company’s ability to file a registration statement within a particular time period, have a registration statement declared effective within a particular time period and to maintain the effectiveness of the registration statement for a particular time period. The Company doeshas not believe it is probable that penalty payments will be made foraccrued any liquidated damages associated with the Amended and Restated Registration RightsRight Agreement discussedas the Company has filed the required registration statement and anticipates continued compliance with the agreement.

Royalties

The Company contracts with third-party vendors to license tumor samples for development into PDX models and use in Note 7our TOS business. These types of arrangements have an upfront fee ranging from nil to $7,000 per tumor sample depending on the successful growth of the tumor model and accordingly, has not accruedability to develop them into a sellable product. The upfront costs are expensed as incurred. In addition, under certain agreements, for such potential penalties asa limited period of time, the Company is subject to royalty payments if the licensed tumor models are used for sale in our TOS business,  ranging from 2% to 5% of the contract price after recouping certain initiation costs. As of April 30, 2015 and 2014.

2018, no royalties have been paid or incurred.


Note 6. Share-Based5. Stock-based Payments

Stock-based compensation in the amount of $3.2$1.0 million and $2.8$2.6 million was recognized for years ended April 30, 20152018 and 2014,2017, respectively. Included in 2015 stock-based compensation expense for the twelve months ended April 30, 2018  and 2017 under “general"general and administrative”administrative" line item is thean option modification charge of $213,952.$56,529 and $612,534, respectively, and $15,000 related to the issuance of common stock as compensation for services performed. Stock-based compensation costs were recorded as follows (in thousands):

  Year Ended April 30, 
  2015  2014 
       
General and administrative $2,204  $2,298 
Sales and marketing  561   352 
Research and development  352   36 
TOS cost of sales  23   56 
POS cost of sales  22   65 
         
Total stock-based compensation expense $3,162  $2,807 

 Year Ended April 30,
 2018 2017
General and administrative$689
 $2,193
Sales and marketing112
 201
Research and development166
 216
TOS cost of sales65
 50
POS cost of sales2
 2
    
Total stock-based compensation expense$1,034
 $2,662
2010 Equity Incentive Plan

CHAMPIONS ONCOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


On February 18, 2011, shareholders owning a majority of the issued and outstanding shares of the Company executed a written consent approving the 2010 Equity Incentive Plan (“2010 Equity Plan”). The purpose of the 2010 Equity Plan is to grant (i) Non-statutory Stock Options; (ii) Restricted Stock Awards; and (iii) Stock Appreciation Rights (collectively, stock-based compensation) to its employees, directors and non-employees. Total stock awards under the 2010 Equity Plan shall not exceed 30,000,000 shares of common stock. Options and Stock Appreciation Rights expire no later than ten years from the date of grant and the awards vest as determined by the Board of Directors. Options and Stock Appreciation Rights have a strike price not less than 100% of the fair market value of the common stock subject to the option or right at the date of grant.

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2008 Equity Incentive Plan

The Company has previously granted (i) Non-statutory Stock Options; (ii) Restricted Stock Awards; and (iii) Stock Appreciation Rights (collectively, stock-based compensation) to its employees, directors and non-employees under a 2008 Equity Incentive Plan (the “2008 Equity Plan”).  Such awards may be granted by the Company’s Board of Directors.  Options granted under the 2008 Equity Plan expire no later than ten years from the date of grant and the awards vest as determined by the Board of Directors.

For share-basedstock-based payments to non-employee consultants under both the 2010 and 2008 Equity Incentive Plan, the fair value of the share-basedstock-based consideration issued is used to measure the transaction, as management believes this to be a more reliable measure of fair value than the services received.  The fair value of the award is expensed over the period service is provided to the Company; however, it is ultimately measured at the price of the Company’s common stock or the fair value of stock options using the Black-Scholes valuation model on the date that the commitment for performance by the non-employee consultant has been reached or performance is complete, which is generally the vesting date of the award.

Director Compensation Plan

On December 12, 2013, the Compensation Committee of the Board of Directors of the Company adopted changes to the Director Compensation Plan of 2010 (the “Director Plan”) effective commencing December 1, 2013.  Under the Director Plan, independent directors of the Company are entitled to an annual award of a five-year option to purchase 100,0008,333 shares of the Company’s common stock, and the Chairman of the Board of the Company is entitled to an annual award of a five yearyears option to purchase 200,00016,667 shares of the Company’s common stock.  Independent directors who serve as chairperson of a committee will also receive an annual grant of a five-year option to purchase 20,0001,667 shares of the Company’s unregistered common stock. All options issued under the Director Plan vest quarterly at a rate of 25%. Option grants will typically be issued after the annual shareholder meeting which will generally be held in October of each year. New directors will receive a grant upon joining the Board equal to the pro-rata annual grant for the remainder of the year. Options issued under the Director Plan are issued pursuant to the 2010 Equity Plan. 

Stock Option Grants

Black-Scholes assumptions used to calculate the fair value of options granted during the years ended April 30, 20152018 and 20142017 were as follows:

  Year Ended April 30, 
  2015  2014 
       
Expected term in years  2.5 - 6.0   3.0 - 6.0 
Risk-free interest rates  0.8% - 1.9%   0.7% - 2.4% 
Volatility  86% - 102%
   84% - 102% 
Dividend yield  0%   0%
 

F-16

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

 Year Ended April 30,
 2018 2017
Expected term in years3 - 6 3 - 6
Risk-free interest rates1.8% - 2.6% 0.6% - 1.9%
Volatility84% - 88% 72% - 88%
Dividend yield—% —%

The weighted average fair value of stock options granted during the years ending April 30, 20152018 and 2014,2017, was $0.61$2.19 and $0.96,$1.71, respectively. The Company’s stock options activity and related information as of and for the years ended April 30, 20152018 and 20142017 is as follows (dollars in thousands):

              Weighted    
           Weighted  Average    
     Directors     Average  Remaining  Aggregate 
  Non-  and     Exercise  Contractual  Intrinsic 
  Employees  Employees  Total  Price  Life (Years)  Value 
                   
Outstanding, May 1, 2014  765,000   22,586,037   23,351,037  $1.01   7.5  $985,000 
Granted  80,000   21,080,562   21,160,562   0.66         
Exercised  -   (3,750)  (3,750)  0.49         
Canceled  -   (19,872,875)  (19,872,875)  1.04         
Forfeited  -   (151,250)  (151,250)  0.96         
Expired  (150,000)  (285,704)  (435,704)  0.99         
                         
Outstanding, April 30, 2015  695,000   23,353,020   24,048,020   0.48   6.7  $4,166,000 
                         
Vested and expected to vest as of April 30, 2015  695,000   23,353,020   24,048,020       6.7  $4,166,000 
                         
Vested as of April 30, 2015  487,500   16,623,580   17,111,080   0.49   5.9  $2,879,000 

              Weighted    
           Weighted  Average    
     Directors     Average  Remaining  Aggregate 
  Non-  and     Exercise  Contractual  Intrinsic 
  Employees  Employees  Total  Price  Life (Years)  Value 
                   
Outstanding, May 1, 2013  765,000   13,125,205   13,890,205  $0.85   7.0  $89,000 
Granted  -   9,793,332   9,793,332   1.23         
Exercised  -   (33,750)  (33,750)  0.63         
Canceled  -   -   -   -         
Forfeited  -   (72,500)  (72,500)  0.82         
Expired  -   (226,250)  (226,250)  0.73         
                         
Outstanding, April 30, 2014  765,000   22,586,037   23,351,037   1.01   7.5  $985,000 
                         
Vested and expected to vest as of April 30, 2014  765,000   22,586,037   23,351,037       7.5  $985,000 
                         
Vested as of April 30, 2014  522,292   13,042,285   13,564,577   0.85   6.1  $927,000 

follows:

CHAMPIONS ONCOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


 
Non-
Employees
 
Directors
and
Employees
 Total 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life (Years)
 
Aggregate
Intrinsic
Value
Outstanding, May 1, 201750,000
 2,258,704
 2,308,704
 $2.86
 6.1 $1,282,000
Granted—
 455,310
 455,310
 3.01
 9.6 $603,000
Exercised—
 (12,500) (12,500) 3.00
    
Canceled—
 —
 —
 —
    
Forfeited—
 (7,042) (7,042) 6.86
    
Expired—
 (38,627) (38,627) 5.21
    
            
Outstanding, April 30, 201850,000
 2,655,845
 2,705,845
 2.85
 5.9 $5,265,000
            
Vested and expected to vest as of April 30, 201850,000
 2,655,845
 2,705,845
 2.85
 5.9 $5,265,000
            
Vested as of April 30, 201825,836
 2,436,263
 2,462,099
 2.79
 5.6 $5,036,000
 
Non-
Employees
 
Directors
and
Employees
 Total 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life (Years)
 
Aggregate
Intrinsic
Value
Outstanding, May 1, 201651,250
 2,161,507
 2,212,757
 $5.58
 6.1 $10,000
Granted—
 2,420,681
 2,420,681
 1.99
    
Exercised—
 —
 —
 —
    
Canceled—
 (1,793,779) (1,793,779) 4.92
    
Forfeited—
 (421,487) (421,487) 2.03
    
Expired(1,250) (108,218) (109,468) 7.86
    
            
Outstanding, April 30, 201750,000
 2,258,704
 2,308,704
 2.86
 6.1 $1,282,000
            
Vested and expected to vest as of April 30, 201750,000
 2,258,704
 2,308,704
  
 6.1 $1,282,000
            
Vested as of April 30, 201733,336
 2,028,469
 2,061,805
 2.93
 5.9 $1,101,000
On June 30, 2017, the Board of Directors extended the expiration terms of a previous employee's vested grants to November 2018. As a result of this modification, the Company had an additional stock option expense of $56,529, which was expensed under the "General and Administrative" line item on the income statement.

Included in the balances outstandingforfeited balance in the fiscal 2017 table above are 2,695,954203,043 options (which vest based on serviceperformance criteria) granted to each of the Company’sCompany's Chief Executive Officer and its President as of November 5, 2013 as part of their new employment agreements. In addition to the above, there are 2,695,954 additional options granted to the Company’s Chief Executive Officer and President which vest based on both service and performance criteria.  The service-based conditions of these options provide for vesting to occur monthly over a period of three years.  The service-based options, like all of the Company’s service-basedPerformance-based options are expensed on a straight-line basis.  Since the straight-line method is not available for performance or market-based share-based payments, the 2,695,954 performance-based options will be expensed on an accelerated basis once the Company determines it is probable that the performance-based conditions will be met.

It was determined the performance conditions will not be set and as such the 203,043 options have been forfeited. Additionally, included in the forfeited balance in the table above are 209,383 options which were granted to the previous Chief Executive Officer as part of his yearly compensation beginning in November 2016. The Chief Executive Officer has transitioned to Chairman of the Board of Directors as of January 31, 2017.


On April 24, 2017, the Board of Directors extended the expiration terms of the previous Chief Executive Officer's vested grants to its contractual life. As a result of this modification, the Company had an additional stock option expense of $612,534 which was expensed under the "General and Administrative" line item on the income statement.
CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



On March 16, 2015,July 21, 2016, the Company and certain members of its senior management team agreed to exchange existing options to purchase shares of the Company's common stock with new options. The new options have a lower exercise price for fewer shares and have the same vesting schedules and the same termination expiration dates as the existing options. The Company used the Black Scholes valuation method to determine if the modification created additional stock option expense. As a result of the option exchange, an aggregate of 1,793,781 existing options with exercise prices ranging from $4.55 to $6.96 per share were exchanged for an aggregate of 1,568,191 new options with exercise prices of $2.10 per share. Due to the modification the Company had an additional stock option modification expense forof $414,756 of which $39,920 related to the performance awards that have been forfeited as noted above, $373,069 of which was recognized during the current periodfiscal year and $1,767 of $213,951 and future additional stock option modification expense of $386,578. All additional expensewhich will be recordedrecognized over the next year as stock option expense. The members of the senior management team whose options were exchanged include Joel Ackerman, the Company's Chief Executive Officer and a member of its Board of Directors, Ronnie Morris, the Company's President and a member of its Board of Directors, James McGorry, the Company's Executive Vice President and General Manager, Translational Oncology Solutions and David Miller, the Company's Vice President, Finance. As a result of the option exchange, an aggregate of 19,872,875 existing options with exercise prices ranging from $0.47continue to $1.33 per share were exchanged for an aggregate of 17,617,929 new options with exercise prices of $0.41 per share.

Also on March 16, 2015, the Company and each of Mr. Ackerman and Dr. Morris agreed to amend their employment agreements with the Company. Their current employment agreements provide that, for the year from November 1, 2014 to October 31, 2015, Mr. Ackerman and Dr. Morris's salaries would be paid half in cash and half in options to purchase shares of common stock. To conserve the Company's cash, Mr. Ackerman and Dr. Morris have agreed to accept all of their compensation in options, and none of it in cash for such year. Mr. Ackerman received 1,155,400 options and Dr. Morris received 1,084,298 options. These options were granted on March 16, 2015 and vest over a one year period starting from November 1, 2014 which is concurrent with their employment contract. 

Restricted vest.


Stock Grants

The total fair value of shares vested during the years ended April 30, 2015 and 2014 was nil and $15,000, respectively. Purchase Warrants

As of April 30, 2015, there was no unrecognized stock compensation expense related to nonvested restricted stock awards.

Stock Purchase Warrants

As of April 30, 2015,2018, the Company had warrants outstanding for the purchase of 25,318,0822,004,284 shares of its common stock, all of which were exercisable. Of these warrants, 22,191,415 were issued in connection with the March 2015 Private Placement as further discussed in Note 7. Activity related to these warrants, which expire at various dates through January 2019, is summarized as follows (dollars in thousands):

        Weighted    
     Weighted  Average    
  Number  Average  Remaining  Aggregate 
  of  Exercise  Contractual  Intrinsic 
  Shares  Price  Life (Years)  Value 
             
Outstanding, May 1, 2014  3,276,667  $0.61   2.9  $984,333 
Granted  22,191,415   0.47   4.9   3,108,271 
Exercised  -   -   -   - 
Forfeited  -   -   -   - 
Expired  (150,000)  -   -   - 
                 
Outstanding, April 30, 2015  25,318,082  $0.49   4.6  $3,247,604 

follows:

 
Number
of
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life (Years)
 
Aggregate
Intrinsic
Value
Outstanding, May 1, 20172,004,284
 $5.57
 2.8
 $—
Granted—
 —
 —
 —
Exercised—
 —
 —
 —
Forfeited—
 —
 —
 —
Expired—
 —
 —
 —
        
Outstanding, April 30, 20182,004,284
 $5.57
 1.8
 $—

 
Number
of
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life (Years)
 
Aggregate
Intrinsic
Value
Outstanding, May 1, 20162,109,840
 $5.54
 3.6
 $—
Granted—
 —
 —
 —
Exercised—
 —
 —
 —
Forfeited—
 —
 —
 —
Expired(105,556) 4.80
 —
 —
        
Outstanding, April 30, 20172,004,284
 $5.57
 2.8
 $—
Note 6. Common Stock

On June 15, 2016, the Company closed a public offering ("The June 2016 Public Offering") of 2,000,000 registered shares of its common stock at an offering price of $2.25 per share. In addition, the underwriter exercised a partial exercise of the over-allotment option granted to the underwriter to purchase an additional 258,749 shares of its common stock at the public offering price. All of the shares have been offered by the Company.

The net proceeds from The June 2016 Public Offering, including the partial exercise of the over-allotment option, was $4.3 million, after deducting the underwriting discount and offering-related expenses of $742,000. The Company used the net proceeds of this offering for research and development to grow the TumorGraft platform, and the balance of the net proceeds for working capital and general corporate purposes.

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

        Weighted    
     Weighted  Average    
  Number  Average  Remaining  Aggregate 
  of  Exercise  Contractual  Intrinsic 
  Shares  Price  Life (Years)  Value 
             
Outstanding, May 1, 2013  3,276,667  $0.61   3.9  $- 
Granted  -   -   -   - 
Exercised  -   -   -   - 
Forfeited  -   -   -   - 
Expired  -   -   -   - 
                 
Outstanding, April 30, 2014  3,276,667  $0.61   2.9  $984,333 

Note 7. Common Stock and Stock Purchase Warrants

On January 28, 2013,



As of April 30, 2018, the Company entered intoissued a Securities Purchase Agreement with several accredited investors for the saletotal of an aggregate 18,600,000 shares of the Company’s Common Stock at a purchase price of $0.50 per share, for aggregate proceeds of $9.3 million (net proceeds of $9.1 million due to issuance costs), $0.5 million of which was sold to officers and directors of the Company. This private placement transaction closed on January 28, 2013 (the “January 2013 Private Placement”). As part of this transaction, the Company also issued warrants to purchase an aggregate 1,860,000 shares of Common Stock at an exercise price of $0.66 per share. These warrants expire five years after the closing date . The Company also entered into an Amended and Restated Registration Rights Agreement on January 28, 2013 that provided certain registration rights with respect to the shares of Common Stock issued and the shares of Common Stock issuable upon exercise of the warrants. Furthermore, certain investors will have the right to require the Company to redeem the purchased common shares held by all of the investors (the “January 2013 Private Placement Put Option”) for cash of $0.50 per share upon a change of control or sale or exclusive license of substantially all of the Company’s assets. The January 2013 Private Placement Put Option will terminate upon the achievement of certain financial milestones by the Company, the sale of 25% of the common shares purchased by an investor, with respect only to the shares owned by such investor, or in certain other circumstances as outlined in the Securities Purchase Agreement for the January 2013 Private Placement. The January 2013 Private Placement investors also have certain participation rights with respect to future financings of the Company. The terms of the January 2013 Private Placement resulted in the issuance of an additional 1,064,658 common shares to the investors of the April 2011 Private Placement under the anti-dilution protections granted such investors, which are discussed below.

On March 24, 2011, the Company entered into a Securities Purchase Agreement with several accredited investors for the sale of an aggregate 12,533,333 shares of the Company’s Common Stock at a purchase price of $0.75 per share, for aggregate proceeds of $9.4 million, $0.5 million of which was sold to officers and directors of the Company. This private placement transaction closed April 4, 2011 (the “April 2011 Private Placement”). As part of this transaction, the Company also issued warrants to purchase an aggregate 1,266,667 shares of Common Stock at an exercise price of $0.90 per share. These warrants expire five years after the closing date. The Securities Purchase Agreement governing the April 2011 Private Placement contains certain anti-dilution protections for the investors. The Amended and Restated Registration Rights Agreement referenced above provides certain registration rights with respect to the shares of Common Stock issued and the shares of Common Stock issuable upon exercise of the warrants. Furthermore, certain investors have the right to require the Company to redeem the purchased common shares held by all of the investors (the “April 2011 Private Placement Put Option”) for cash for $0.75 per share upon a change of control or sale or exclusive license of substantially all of the Company’s assets. The April 2011 Private Placement Put Option will terminate upon the achievement of certain financial milestones by the Company, the sale of 25% of the common shares purchased by an investor, with respect only to the shares owned by such investor, or in certain other circumstances as outlined in the Securities Purchase Agreement for the April 2011 Private Placement.

Due to the April 2011 Private Placement Put Option and the January 2013 Private Placement Put Option described above, the Company has accounted for the Common Stock for the April 2011 Private Placement and January 2013 Private Placement as temporary equity, which is reflected under the caption “redeemable common stock” on the accompanying consolidated balance sheets for 2013. The total amount allocated to the redeemable common stock was $8.8 million for the January 2013 Private Placement and $8.2 million for the April 2011 Private Placement. For the January 2013 Private Placement, this allocation is equal to the total proceeds of $9.3 million less the amount allocated to the warrants of $0.4 million and is also net of the direct and incremental costs associated with the January 2013 Private Placement of $0.2 million. For the April 2011 Private Placement, this allocation is equal to the total proceeds of $9.4 million, less the amount allocated to the warrants of $0.9 million and is also net of direct and incremental costs associated with the April 2011 Private Placement of $0.3 million.

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On January 29, 2014, the Company executed amendments to existing securities purchase agreements entered into during 2011 and 2013 (collectively the “2011 Securities Purchase Agreement” and the “2013 Securities Purchase Agreement”) with certain of the parties thereto, in each case revising the definition of “Change of Control” as it appears on the Securities Purchase Agreements, to eliminate rights to redeem8,569 shares of common stock purchased under these arrangements. Such common stock which was classifiedvalued at $22,500 in the mezzanine section as redeemable common stock as a result of these provisions was re-classified as equity.

On January 29, 2014, the Company also entered into an agreement with Joel Ackerman, its Chief Executive Officer and a Director, and Ronnie Morris, its President and a Director, both of whom bought securities from the Company pursuant to the Securities Purchase Agreements, that, if the Company’s Board of Directors votes on a transaction, event or approval that would constitute a Put Option Trigger Event (as defined in each of the Securities Purchase Agreements), each of Ackerman and Morris shall either (a) recuse themselves from voting as a member of the Board of Directors on such transaction, event or approval or (b) be entitled to vote but forego exercising or receiving the benefit of their Put Right (as defined in each of the Securities Purchase Agreements).

Prior to the January 29, 2014 amendments the Put Option Trigger Event (as defined in each of the Securities Purchase Agreements) was outside of the Company’s control.  Subsequent to the January 29, 2014 amendments the Put Option Trigger Event is within the Company’s control.  This change resulted in the common stock related to the April 2011 Private Placement and the 2013 Private Placement to be reclassified from outside of permanent equity (reflected under the caption “redeemable common stock”) to inside permanent equity (reflected in the captions “common stock” and “additional paid-in capital”)consideration for 2014.

The warrants issued in connection with both the April 2011 Private Placement and January 2013 Private Placement contained certain exercise price reset provisions. Under these provisions, the exercise price of the warrants may be adjusted downward should the Company have future sales of its Common Stock for no consideration or for a consideration per share less than the Per Share Price (as such term is defined in the April 2011 Private Placement and January 2013 Private Placement). These exercise price reset provisions resulted in a downward adjustment to the exercise price of the warrants issued in the April 2011 Private Placement from $0.90 to $0.50 in January 2013 as part of the 2013 Private Placement.

On December 1, 2014, the Company entered into note purchase agreements with and issued convertible promissory notes in the principal amount of $1 million each to Joel Ackerman, the Company’s Chief Executive Officer, and Dr. Ronnie Morris, the Company’s President, to finance the operations of the Company. The transaction was approved by the Company’s audit committee.

The notes bore interest at 12% per annum and had an initial term of 90 days. The notes, including any accrued but unpaid interest, were convertible at the option of each noteholder: (a) upon the closing of any equity financing that occurred during the term of the notes, into the securities offered in the financing to other investors at a 5% discount to the price per share paid by other investors in the financing; and (b) upon the maturity date of the notes, into the Company’s common stock at the volume weighted average closing price of the common stock for the five trading days prior to such conversion.

On February 28, 2015, the Company entered into amendments to the convertible promissory notes issued on December 1, 2014. The amendments extended the maturity dates of the convertible promissory notes to April 1, 2015. The amendments were approved by the Company’s audit committee.

On March 11, 2015, the convertible promissory notes and accrued interest of $60,000 were converted into equity at a 5% discount as part of the 2015 Securities Purchase Agreement. The 5% discount was contingent up until the closing of the 2015 Securities Purchase Agreement at which time the 5% discount was converted to an amount of $100,000 and classified into equity along with the $60,000 accrued interest noted above.

On March 11, 2015, the Company entered into a Securities Purchase Agreement (the "2015 Securities Purchase Agreement") with Battery Ventures IX, L.P. and Battery Investment Partners IX, LLC (collectively, "Battery"), New Enterprise Associates 14, Limited Partnership ("NEA"), Joel Ackerman, Chief Executive Officer and a director of the Company ("Ackerman"), Dr. Ronnie Morris, President and a director of the Company ("Morris"), Daniel Mendelson, a director of the Company ("Mendelson") and certain other investors (collectively with Battery, NEA, Ackerman, Morris and Mendelson, the "Investors"), for the sale to the Investors of units, each unit consisting of one share of the Company's Common Stock, par value $0.001 per share (the "Common Stock") and a warrant to buy 0.55 shares of Common Stock at $0.48 per share (the "Warrants"), at a purchase price of $0.40 per unit, for an aggregate of $14,000,000. The Warrants expire five years after the closing date. Ackerman and Morris converted convertible promissory notes dated December 1, 2014 in the principal amounts of $1 million each, plus accrued interest, into the units at a 5% discount, pursuant to the terms of the convertible promissory notes.

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company has accounted for the Common Stock for the March 2015 Private Placement as equity on the accompanying consolidated balance sheets for 2015. The amount allocated to common stock was $8.0 million. This allocation is equal to the total proceeds of $14 million less the amount allocated to warrants of $5.1 million and is also net of the direct and incremental costs associated with the 2015 Private Placement of $0.88 million. The Black Scholes pricing model was used to calculate the value of warrants relating to the 2015 Securities Purchase Agreement.

The Investors have the right to require the Company to repurchase the purchased shares (the "Put Option") for cash for $0.40 per share upon a change of control or sale or exclusive license of substantially all of the Company's assets only if approved by the Company's board of directors. The Put Option will terminate upon the achievement of certain financial and other milestones.

The Investors have certain participation rights with respect to future financings of the Company. The Company covenanted to register the resale of the shares of Common Stock to be issued to the Investors and the shares of Common Stock issuable upon exercise of the Warrants pursuant to a 2015 Amended and Restated Registration Rights Agreement, to pay certain liquidated damages if the Company fails to file such registration statement by a certain deadline, and to have it declared effective by a certain deadline or keep it effective for a certain period of time. The Company has not accrued any liquidated damages associated with the Amended and Restated Registration Right Agreement as the Company has filed the required registration statement and anticipates continued compliance with the agreement.

The issuance of the shares of Common Stock resulted in the Company issuing an additional 2,264,450 shares of Common Stock to investors who purchased shares of Common Stock pursuant to a Securities Purchase Agreement dated as of March 24, 2011 (the "2011 Securities Purchase Agreement") due to contractual antidilution provisions in that 2011 Securities Purchase Agreement. The Company also amended and restated the 2011 Securities Purchase Agreement to eliminate these antidilution provisions going forward, and conform aspects of the put option in that 2011 Securities Purchase Agreement to terms of the Put Option in the 2015 Securities Purchase Agreement. The Companyalso issued an additional 1,583,335 warrants to its investors under the antidilution provision of 2011 Warrant Agreements under the Securities Purchase Agreement. Concurrently its investors agreed on certain amendments of the warrants to eliminate the antidilution rights for future transactions, by extending the term of the warrants  by one year,andadjusting the exercise price to $0.40 as an incentive to remove the antidulution rights. This resulted in a modification charge of $413,521.

The Company and its investors have  amended and restated its Securities Purchase Agreement dated January 28, 2013 (the "2013 Securities Purchase Agreement") to conform aspects of the put option in that 2013 Securities Purchase Agreement to the Put Option in the 2015 Securities Purchase Agreement. The Company issued an additional 1,209,001 warrants to investors under the antidilution provision of 2013 Warrant Agreements under the Securities Purchase Agreement. Concurrentlyits investorsagree on certain amendments of these warrants to eliminate the antidilution rights for future transactions, by extending the term of the warrant  by one year and adjusting the exercise price to $0.40 as an incentive to remove the antidilution rights. This resulted in a modification charge of $172,344.

On April 24, 2015, the Company filed an amendment to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, which increased the total number of shares of common stock the Company is authorized to issue to 200,000,000 from 125,000,000.

The Company had accounted for the warrants issued in connection with the April 2011 Private Placement and January 2013 Private Placement as a liability based on the exercise price reset provisions described above. This liability, which was recorded at fair value on the accompanying consolidated balance sheets, totaled $1.6 million at the time of the close of the March 2015 Private Placement Agreement. Due to the amendments noted above, the liability has been reclassified to equity as shown in note 1 above. consulting services.


As of April 30, 2015 and 2014, the fair value of these warrants was nil and $2.01 million, respectively. The change in fair value of these warrants prior to the amendments noted above was recognized as other income (expense) on the Company’s consolidated statements of operations. The fair value of these warrants was calculated by the Monte Carlo simulation valuation method. Assumptions used to calculate the fair value of these warrants were as follows:

  Year Ended April 30, 
  2015  2014 
       
Expected term in years  1.1 - 4.9   1.9 - 3.7 
Risk-free interest rates  0.5% - 1.76%   0.4% - 1.17% 
Volatility  73% - 107%   95% - 113% 
Dividend yield  0%   0% 

The Company estimated the volatility based upon the applicable look-back periods or historical volatility observed for the Company. For the Risk-free rate2017, the Company used the yield onissued a T-bill with maturity closest to the expected time to the warrant expiration.

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In addition to the assumptions above, the Company also took intototal of 18,564 share of common stock valued at $43,040 in consideration the probability of the Company’s participation in another round of financing, the type of such financing and the range of the stock price for the financing at that time.

consulting services.

Note 8.7. Provision for Income Taxes

The components of the provision (benefit) for income taxes are as follows (in thousands):

  Year Ended April 30, 2015 
  Federal  State  Foreign  Total 
             
Current $-  $3  $124  $127 
Deferred  (25,948)  (1,771)  8   (27,711)
Change in valuation allowance  25,948   1,771   (8)  27,711 
                 
Total $-  $3  $124  $127 

  Year Ended April 30, 2014 
  Federal  State  Foreign  Total 
             
Current $-  $5  $12  $17 
Deferred  (2,015)  (148)  -   (2,163)
Change in valuation allowance  2,015   148   -   2,163 
                 
Total $-  $5  $12  $17 

 Year Ended April 30, 2018
 Federal State Foreign Total
Current$—
 $3
 $30
 $33
        
Total$—
 $3
 $30
 $33
 Year Ended April 30, 2017
 Federal State Foreign Total
Current$(14) $—
 $33
 $19
        
Total$(14) $—
 $33
 $19
A reconciliation between the Company’s effective tax rate and the United States statutory tax rate for the years ended April 30, 20152018 and 20142017 is as follows:

  Year Ended April 30, 
  2015  2014 
       
Federal income tax at statutory rate  34.0%  34.0%
State income tax, net of federal benefit  2.6   2.1 
Permanent differences  0.9   (5.6)
Increase in uncertain tax position  (0.8)  - 
Other  (6.9)  (2.1)
Change in valuation allowance  (30.8)  (27.2)
Changes in tax rates  -   (1.4)
         
Income tax expense  (1.1)%  (0.2)%

F-22

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

 Year Ended April 30,
 2018 2017
Federal income tax at statutory rate29.7 % 34.0 %
US vs. foreign tax rate difference0.1
 —
State income tax, net of federal benefit(0.2) 3.9
Permanent differences(2.0) (0.2)
Increase in uncertain tax position(2.1) 1.6
Other2.5
 (0.3)
Change in valuation allowance498.0
 (39.8)
Changes in tax rates(528.0) 0.5
    
Income tax expense(2.0)% (0.3)%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  Significant components of the Company’s deferred tax assets and liabilities as of April 30, 20152018 and 20142017 consist of the following (in thousands):

  As of April 30, 
  2015  2014 
       
Accrued liabilities $21  $38 
Depreciation and amortization  -   9 
State taxes  1   1 
Stock-based compensation expense  4,803   4,511 
Capitalized research and development costs  433   556 
Foreign net operating loss carry-forward  235   244 
Net operating loss carry-forward  9,719   5,608 
         
Total deferred tax assets  15,212   10,968 
Less: Valuation allowance  (15,212)  (10,968)
         
Net deferred tax asset $-  $- 

CHAMPIONS ONCOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


 As of April 30,
 2018 2017
Accrued liabilities$71
 $103
Depreciation and amortization(58) —
State taxes1
 22
Stock-based compensation expense4,466
 6,503
Capitalized research and development costs43
 195
Foreign net operating loss carry-forward208
 214
Net operating loss carry-forward9,678
 14,786
    
Total deferred tax assets14,409
 21,823
Less: Valuation allowance(14,409) (21,779)
    
Net deferred tax asset$—
 $44
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made broad and significant changes to the U.S. tax code including, but not limited to, a change in the federal rate from 34% to 21%, as well as the requirement to pay a one-time transition tax (“deemed repatriation tax”) on all undistributed earnings of foreign subsidiaries. As a result of the enactment of the legislation, the Company recorded a one-time reduction to its deferred tax assets of approximately $7.6 million, which was offset by a similar reduction in the valuation allowance.   In accordance with Staff Accounting Bulletin 118 (“SAB 118”), income tax effects of the Tax Act may be refined upon obtaining, preparing, or analyzing additional information during the measurement period and such changes could be material. During the measurement period, provisional amounts may be adjusted for the effects, if any, of interpretative guidance issued after December 31, 2017, by U.S. regulatory and standard-setting bodies. While we are able to make reasonable estimates of the impact of the reduction in corporate rate and the deemed repatriation transition tax, the final impact of the Tax Act may differ from these estimates, due to, among other things, changes in our interpretations and assumptions, additional guidance that may be issued by the I.R.S., and actions we may take. We are continuing to gather additional information to determine the final impact.

Management has evaluated the available evidence about future tax planning strategies, taxable income and other possible sources of realization of deferred tax assets and has established a full valuation allowance against its net deferred tax assets as of April 30, 20152018 and 2014.2017.  For the years ended April 30, 20152018 and 2014,2017, the Company recorded a valuation allowance of $14.9$14.4 million and $11.0$21.8 million, respectively. 


As of April 30, 20152018 and 2014,2017, the Company’s estimated U.S. net operating loss carry-forwards were approximately $26$41 million and $15$41 million, respectively, which will begin expiring in 20222025 for federal and 20172031 for state purposes.  As of April 30, 20152018 and 2014,2017, the Company’s foreign net operating loss carry-forward was approximately $1million for both periods,$890,000 and $890,000, respectively, which have an unlimited carryforward period. A valuation allowance has been recorded against all of these losses due to continued overall losses.

The Company may be subject to the net operating loss provisions of Section 382 of the Internal Revenue Code. Due to the company's funding transaction, the company may have triggered a net operating loss limitation under Internal Revenue Code §382. The company has not calculated if an ownership change has occurred. The effect of an ownership change would be the imposition of an annual limitation on the use of NOL carryforwards attributable to periods before the change. The amount of the annual limitation depends upon the value of the Company immediately before the change, changes to the Company’s capital during a specified period, and the federal published interest rate.

The Company has made no provision for U.S. taxes on the cumulative earnings of foreign subsidiaries as those earnings are intended to be reinvested for an indefinite period of time.  Upon distribution of these earnings in the form of dividends or otherwise, the Company may be subject to U.S. income taxes and foreign withholding taxes.  It is not practical, however, to estimate the amount of taxes that may be payable on the eventual repatriation of these earnings.

The Company files income tax returns in various jurisdictions with varying statues of limitations.  As of April 30, 2015,2018, the earliest tax year still subject to examination for state purposes is fiscal 2012.2015.  The Company’s tax years for periods ending April 30, 20012002 and forward are subject to examination by the United States and certain states due to the carry-forward of unutilized net operating losses.

The following table indicates the changes to the Company’s uncertain tax positions for the period and years ended April 30, 20152018 and 20142017 in thousands:

  Year Ended April 30, 
  2015  2014 
       
Balance, beginning of the year $-  $- 
Addition based on tax positions related to prior years  21   - 
Addition based on tax positions related to current year  79   - 
         
Balance, end of year $100  $- 

CHAMPIONS ONCOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


 Year Ended April 30,
 2018 2017
Balance, beginning of the year$121
 $165
Addition based on tax positions related to prior years—
 —
Payment made on tax positions related to prior years—
 (84)
Addition based on tax positions related to current year30
 40
    
Balance, end of year$151
 $121
As of April 30, 20152018 the above amount of $100,000$151,000 was included in other long-term liabilities.

Note 9.8. Related Party Transactions

Related party transactions include transactions between the Company and its shareholders, management, or affiliates.  The following transactions were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the parties.

Consulting Services

During the

For both years ended April 30, 20152018 and 2014,2017, the Company paid a member of its Board of Directors $62,500 and $150,000, respectively,$72,000 for consulting services unrelated to theirhis duties as board members.member. During the years ended April 30, 20152018 and 2014,2017, the Company paid a board member’s company $3,700member $94,933 and $15,800,$48,214, respectively, and in year ended April 30 2017, granted 45,000 options that vest annually over a three year period and have a fair value of $94,192 for consulting services.services unrelated to his duties as a board member. All of the amounts paid to these related parties have been recognized in expense in the period the services were performed.

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Private Placement

During

Note 9. Lines of Credit

On October 30, 2017, the year endedCompany entered into a line of credit agreement with a national bank which provides that the Company may borrow up to $1.5 million. Borrowings under the line bear interest payable monthly at the Wall Street Journal Prime Rate plus 1.5% to 2.0% and are secured by all assets of the Company. The balances payable under this arrangement are due on demand. As of April 30, 2015, the Company sold an aggregate of 5,421,053 shares of common stock at a price of $0.40 per share and warrants to purchase an aggregate of 2,981,519 additional shares of common stock at an exercise price of $0.48 per share to two of its officers and directors in the March 2015 Private Placement.2018, there were no outstanding borrowings. The proceedsrevolving line maturity date is October 29, 2018.

Exhibit Index

Exhibit No.
3.1Amended and Restated Articles of Incorporation (incorporated by reference to Appendix A to the Company’s Information Statement on Schedule 14C filed March 7, 2011)
3.1.1Certificate of Amendment to Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3(i) to the Company’s Current Report on Form 8-K filed April 28, 2015)
3.2
Amended and Restated Bylaws, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed May 9, 2017)

10.2Employment Agreement, dated November 5, 2013, between the Company and Ronnie Morris, M.D. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed November 12, 2013)
10.3Amendment to Employment Agreement, dated March 16, 2015, between the Company and Ronnie Morris (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed March 20, 2015)
10.4Offer letter dated June 3, 2013 between the Company and David Miller (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 3, 2013)
10.5Master Supply and Services Contract, made on December 3, 2013, between Pfizer, Inc. and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the period ended January 31, 2014, filed March 14, 2013) **
10.62010 Equity Incentive Plan (incorporated by reference to Appendix B to the Company’s Definitive Information Statement on Schedule 14C filed March 7, 2011)
10.7Form of Note Purchase Agreement, dated December 1, 2014, between the Company and each of  Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 5, 2014)

10.8Form of Convertible Promissory Note, dated December 1, 2014, issued to each of Joel Ackerman and Ronnie Morris in connection with the Note Purchase Agreement, dated December 1, 2014 between the Company and each of Joel Ackerman and Ronnie Morris incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 5, 2014)
10.8.1Amendment No. 1 to Convertible Promissory Note, dated December 1, 2014 issued to Joel Ackerman in connection with the Note Purchase Agreement, dated December , 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 2, 2015)
10.8.2Amendment No. 1 to Convertible Promissory Note, dated December 1, 2014 issued to Ronnie Morris in connection with the Note Purchase Agreement, dated December , 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 2, 2015)
10.9Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 30, 2011)
10.9.1Amendment No. 1 to Securities Purchase Agreement, dated January 29, 2014, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 6, 2014)
10.9.2Amended and Restated 2011 Securities Purchase Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 17, 2015)
10.10Amended and Restated Registration Rights Agreement, dated January 28, 2013, between the Company and each person or entities that are signatories to (i) the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto, and (ii) the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed January 30, 2013)
10.11Form of warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed January 30, 2013)
10.11.1Amendment No. 1 to warrants, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed March 17, 2015)
10.12Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 30, 2013)
10.12.1Amendment No. 1 to Securities Purchase Agreement, dated January 29, 2014, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 6, 2014)
10.12.2Amended and Restated 2013 Securities Purchase Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed March 17, 2015)
10.14Form of warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed January 30, 2013)
10.14.1Amendment No. 1 to warrants, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed March 17, 2015)

10.15Put Right Agreement, dated January 29, 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 6, 2014)
10.16Securities Purchase Agreement, dated March 11, 2015, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 12, 2015)
10.17Amended and Restated Registration Rights Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to (i) the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto, (ii) the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto, and (iii) the Securities Purchase Agreement, dated March 11, 2015, between the Company. And each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 17, 2015)
10.18Form of Investor Warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated March 11, 2015, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K field March 17, 2015)
10.19Option Exchange Agreement, dated March 16, 2015, between the Company and Joel Ackerman (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 20, 2015)
10.20Option Exchange Agreement, dated March 16, 2015, between the Company and Ronnie Morris (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 20, 2015)
10.21Option Exchange Agreement, dated March 16, 2015, between the Company and James McGorry (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 20, 2015)
10.22Option Exchange Agreement, dated March 16, 2015, between the Company and David Miller (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed March 20, 2015)
14Code of Ethics (incorporated by reference to Exhibit 14 of the April 30, 2008 Form 10-KSB)
21List of Subsidiaries (incorporated by reference to exhibit 21 of the Company's Form 10-K filed July 28, 2017)
23.1
Consent of Independent Registered Public Accounting Firm*
31.1
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer*
31.2
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer*
32.1
Section 1350 Certifications***
101.INS*XBRL Instance Document.
101.SCH*XBRL Taxonomy Extension Schema Document.
101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document.

__________________________
* Filed herewith
** Portions of this sale were fromexhibit have been omitted and filed separately with theconvertible promissory notes that were entered into on December 1, 2014 between the Company Securities and two of its executive officers as described further in Note 7 above.

Note 10. Business Segment Information

The Company operates in two segments, POS and TOS. The accounting policies of the Company’s segments are the same as those described in Note 2. The Company evaluates performance of its segments based on profit or loss from operations before stock compensation expense, depreciation and amortization, interest expense, interest income, gain on sale of assets, special charges or benefits, and income taxes (“segment profit”). Management uses segment profit informationExchange Commission pursuant to a request for internal reporting and control purposes and considers it important in making decisions regarding the allocation of capital and other resources, risk assessment, and employee compensation, among other matters. The following tables summarize, for the periods indicated, operating results by business segment (in thousands):

Year Ended April 30, 2015 Personalized
Oncology
Solutions
(POS)		  Translational
Oncology
Solutions
(TOS)		  Unallocated
Corporate
Overhead		  Consolidated 
Net revenue $1,663  $7,200  $-  $8,863 
Direct cost of services  (2,711)  (4,877)  -   (7,588)
Sales and marketing costs  (1,514)  (2,208)  -   (3,722)
Other operating expenses  -   (4,493)  (3,136)  (7,729)
Stock compensation expense (1)  -   -   (3,162)  (3,162)
                 
Segment profit (loss) $(2,562) $(4,378) $(6,298) $(13,238)

Year Ended April 30, 2014 

Personalized

Oncology

Solutions

(POS)

  

Translational

Oncology

Solutions

(TOS)

  

Unallocated

Corporate

Overhead

  Consolidated 
Net revenue $2,264  $9,286  $-  $11,550 
Direct cost of services  (2,667)  (3,496)  -   (6,163)
Sales and marketing costs  (1,723)  (1,080)  -   (2,803)
Other operating expenses  -   (2,209)  (3,828)  (6,037)
Stock compensation expense (1)  -   -   (2,807)  (2,807)
                 
Segment loss $(2,126) $2,501  $(6,635) $(6,260)

(1) Stock compensation expense is shown separately and is excluded from direct costs of services, sales and marketing costs, and other operating expenses, as it is managed on a consolidated basis and is not used by management to evaluate the performance of its segments.

All of the Company’s revenue is recorded in the United States and substantially all of its long-lived assets are in the United States.

confidential treatment.
F-24
*** Furnished hereto.