SECURITIES AND EXCHANGE COMMISSION



þ☑	QUARTERLY REPORT PURSUANT TO SECTION 13OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended January 31, ~~2018~~2024



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


Delaware		52-1401755

~~Delaware~~	~~52-1401755~~
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One University Plaza, Suite 307		07601
Hackensack, New Jersey		(Zip Code)
(Address of principal executive offices)

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 Web site, 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 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” and “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨

Smaller reporting company þ☑

Emerging growth company o☐

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No þ

The number of ~~Common Shares~~shares of common stock of the Registrant outstanding as of March ~~16, 2018~~8, 2024 was ~~11,000,847.~~

Item 1. Financial Statements

January 31,
2018 April 30,
2017
(unaudited)
ASSETS

Current assets:

Cash and cash equivalents $ 1,062
$ 3,295
Accounts receivable, net 2,942
2,274
Prepaid expenses and other current assets 185
300

Total current assets 4,189
5,869

Restricted cash 150
150
Property and equipment, net 1,980
1,216
Other Long Term Assets 107
107
Goodwill 669
669

Total assets $ 7,095
$ 8,011

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable $ 1,961
$ 1,852
Accrued liabilities 365
685
Deferred revenue 3,851
4,910

Total current liabilities 6,177
7,447

Other non-current liabilities 446
164

Total liabilities 6,623
7,611

Stockholders’ equity:

Common stock, $.001 par value; 200,000,000 shares authorized; 11,277,675 and 11,251,844 shares issued and 11,000,847 and 10,982,159 shares outstanding as of January 31, 2018 and April 30, 2017, respectively 11
11
Treasury stock, at cost, 269,685 common shares as of January 31, 2018 and April 30, 2017 (1,252 ) (1,252 )
Additional paid-in capital 71,906
70,991
Accumulated deficit (70,193 ) (69,350 )

Total stockholders’ equity 472
400

Total liabilities and stockholders’ equity $ 7,095
$ 8,011

Three Months Ended
January 31, Nine Months Ended
January 31,
2018 2017 2018 2017
Operating revenue:

Personalized oncology solutions $ 259
$ 347
$ 1,077
$ 1,354
Translational oncology solutions 4,823
3,218
14,242
10,337

Total operating revenue 5,082
3,565
15,319
11,691

Costs and operating expenses:

Cost of personalized oncology solutions 220
320
871
1,167
Cost of translational oncology solutions 2,253
2,086
6,866
5,965
Research and development 1,045
998
3,308
3,217
Sales and marketing 627
726
1,862
2,369
General and administrative 1,004
836
3,167
3,393

Total costs and operating expenses 5,149
4,966
16,074
16,111

Loss from operations (67 ) (1,401 ) (755 ) (4,420 )

Other (expense):

Other (expense) (7 ) (8 ) (71 ) (33 )

Total other (expense) (7 ) (8 ) (71 ) (33 )

Loss before provision for income taxes (74 ) (1,409 ) (826 ) (4,453 )
Provision for income taxes 2
—
18
7

Net loss $ (76 ) $ (1,409 ) $ (844 ) $ (4,460 )

Net loss per common share outstanding

basic and diluted $ (0.01 ) $ (0.13 ) $ (0.08 ) $ (0.44 )

Weighted average common shares outstanding

basic and diluted 10,994,434
10,967,738
10,987,797
10,130,460

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

~~CHAMPIONS ONCOLOGY, INC.~~

~~UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Dollars in Thousands)~~

Nine Months Ended
January 31,
2018 2017
Operating activities:

Net loss $ (844 ) $ (4,460 )

Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation expense 848
1,901
Depreciation expense 253
127
Issuance of common stock for services 15
20
Changes in operating assets and liabilities:

Accounts receivable (669 ) (714 )
Prepaid expenses and other current assets 115
(98 )
Accounts payable 124
(572 )
Accrued liabilities (320 ) 55
Other non-current liability 302
20
Deferred revenue (1,059 ) 483

Net cash used in operating activities (1,235 ) (3,238 )

Investing activities:

Purchase of property and equipment (1,017 ) (181 )

Net cash used in investing activities (1,017 ) (181 )

Financing activities:

Proceeds from June 2016 Public Offering, net of financing costs of $742 —
4,340
Proceeds from exercise of options 38
—
Capital lease payments (19 ) (18 )

Net cash provided by financing activities 19
4,322

(Decrease)/Increase in cash and cash equivalents. (2,233 ) 903
Cash and cash equivalents, beginning of period 3,295
2,585

Cash and cash equivalents, end of period $ 1,062
$ 3,488


	Three Months Ended January 31,				Nine Months Ended January 31,
	2024		2023		2024		2023

Oncology services revenue	$	12,019	$	12,773	$	36,153	$	40,799

Costs and operating expenses:
Cost of oncology services	7,849		7,699		22,151		22,194
Research and development	2,186		3,202		7,494		8,693
Sales and marketing	1,797		1,761		5,288		5,153
General and administrative	2,764		2,569		8,305		7,494

Total costs and operating expenses	14,596		15,231		43,238		43,534

Loss from operations	(2,577)		(2,458)		(7,085)		(2,735)


Other income (loss)	58		36		(33)		9

Loss before provision for income taxes	(2,519)		(2,422)		(7,118)		(2,726)
Provision for income taxes	11		17		49		48

Net loss	$	(2,530)	$	(2,439)	$	(7,167)	$	(2,774)

Net loss per common share outstanding
basic and diluted	$	(0.19)	$	(0.18)	$	(0.53)	$	(0.20)


Weighted average common shares outstanding
basic and diluted	13,593,758		13,558,642		13,538,480		13,532,990

CHAMPIONS ONCOLOGY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)

(Dollars in Thousands)


	Common Stock			Treasury Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Equity (Deficiency)
	Shares	Amount		Shares	Amount
Balance April 30, 2023	13,544,228	$	14	14,422	$	(74)	$	82,013	$	(77,317)	$	4,636
Stock-based compensation	—	—		—	—		423		—		423



Issuance of common stock on exercise of stock options	40,897	—		—	—		12		—		12
Repurchase of common stock	(101,015)	—		101,015	(602)						(602)


Net loss	—	—		—	—		—		(2,566)		(2,566)
Balance July 31, 2023	13,484,110	$	14	115,437	$	(676)	$	82,448	$	(79,883)	$	1,903
Stock-based compensation	—	—		—	—		53		—		53



Issuance of common stock on exercise of stock options	114,552	—		—	—		240		—		240
Repurchase of common stock	(4,896)	—		4,896	(32)		—		—		(32)


Net loss	—	—		—	—		—		(2,071)		(2,071)
Balance October 31, 2023	13,593,766	$	14	120,333	$	(708)	$	82,741	$	(81,954)	$	93
Stock-based compensation	—	—		—	—		379		—		379

Net loss	—	—		—	—		—		(2,530)		(2,530)
Balance January 31, 2024	13,593,766	$	14	120,333	(708)		$	83,120	$	(84,484)	$	(2,058)

	Common Stock			Treasury Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance April 30, 2022	13,522,441	$	14	—	$	—	$	81,064	$	(71,982)	$	9,096
Stock-based compensation	—	—		—	—		206		—		206


Net loss	—	—		—	—		—		(319)		(319)
Balance July 31, 2022	13,522,441	$	14	—	$	—	$	81,270	$	(72,301)	$	8,983
Stock-based compensation	—	—		—	—		119		—		119
Issuance of common stock on exercise of stock options	36,209			—	—		86		—		86
Net loss	—	—		—	—		—		(16)		(16)
Balance October 31, 2022	13,558,650	$	14	—	—		$	81,475	$	(72,317)	$	9,172

Stock-based compensation	—	—		—	—		331		—		331

Net loss	—	—		—	—		—		(2,439)		(2,439)
Balance January 31, 2023	13,558,650	$	14	—	—		$	81,806	$	(74,756)	$	7,064

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

CHAMPIONS ONCOLOGY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)


	Nine Months Ended January 31,
	2024		2023
Operating activities:
Net loss	$	(7,167)	$	(2,774)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Stock-based compensation	855		656

Depreciation and amortization expense	1,410		1,663
Loss on disposal of equipment	81		—


Operating lease right-of use assets	782		817
Provision for doubtful accounts	314		83


Changes in operating assets and liabilities:
Accounts receivable	(197)		1,377
Prepaid expenses and other current assets	493		482
Other long term assets	(170)		—
Accounts payable	(578)		1,430
Accrued liabilities	160		(383)



Operating lease liabilities	(857)		(775)
Deferred revenue	553		2,088

Net cash provided by (used in) operating activities	(4,321)		4,664

Investing activities:
Purchase of property and equipment	(947)		(2,112)




Net cash used in investing activities	(947)		(2,112)

Financing activities:

Proceeds from exercise of options	252		86
Repurchases of common stock	(634)		—






Net cash provided by (used in) financing activities	(382)		86

Increase (decrease) in cash	(5,650)		2,638
Cash at beginning of period	10,118		9,007

Cash at end of period	$	4,468	$	11,645

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

CHAMPIONS ONCOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization, Use of Estimates and Basis of Presentation

Champions Oncology, Inc. (the ~~“Company”~~"Company") is a technology-enabled research organization engaged in ~~the development and sale of advanced~~creating technology solutions to be utilized in drug discovery and ~~products~~development. The Company's research center operates in both regulatory and non-regulatory environments and consists of a comprehensive set of computational and experimental research platforms. Its pharmacology, biomarker, and data platforms are designed to ~~personalize the~~facilitate drug discovery and development at lower costs 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: 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.increased speeds.

The Company has ~~two~~four operating subsidiaries: Champions Oncology (Israel), Limited, ~~and~~ Champions Biotechnology U.K., ~~Limited.~~Limited, Champions Oncology, S.R.L. (Italy), and Corellia A.I.. For the three and nine months ended January 31, ~~2018~~2024 and ~~2017,~~2023, there were no revenues earned by these subsidiaries.

The Company’s functional currency for its 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.

These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC. ~~All significant intercompany~~Intercompany transactions and accounts have been eliminated. Certain information related to the Company’s organization, significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States, or GAAP, has been condensed or omitted. The April 30, 2023 condensed consolidated balance sheet in the accompanying interim condensed consolidated financial statements was derived from audited consolidated financial statements. The accounting policies followed in the preparation of these unaudited condensed consolidated financial statements are consistent with those followed in the Company’s annual consolidated financial statements for the fiscal year ended April 30, ~~2017,~~2023, as filed in the Company's Annual Report on Form ~~10-K.~~10-K with the SEC on July 24, 2023 (the "Annual Report"). In the opinion of management, these unaudited condensed consolidated financial statements contain all material adjustments necessary to fairly state our financial position, results of operations and cash flows for the periods presented and the presentations and disclosures herein are adequate when read in conjunction with the Company’s 2023 Annual ~~Report on Form 10-K~~Report. The results of operations for the ~~year ended April 30, 2017.~~interim periods are not necessarily indicative of the results of operations for a full fiscal year.

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

Note 2. Significant Accounting Policies

Cash and Cash Equivalents

The Company considers only those investments which are highly liquid, readily convertible to cash, and with original maturities of three months or less to be cash equivalents. As of January 31, 2024 the Company had cash equivalents of approximately $2.9 million and, as of April 30, 2023, the Company had no cash equivalents.

The Company is subject to a concentration of credit risk in the form of its cash deposits held at multiple banking institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of January 31, 2024 and April 30, 2023, the Company had approximately $3.3 million and $8.7 million in excess of the FDIC insured limit, respectively.

Liquidity

~~Our~~The Company's 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. InRecently, the ~~past, we have~~Company has met these cash requirements through ~~our~~cash on hand, working capital management, and sales of products and ~~services, working capital management, and~~services. In the past, the Company has also received proceeds from certain private placements and public offerings of ~~our~~its securities. For the nine months ended January 31, ~~2018, we~~2024, the Company had a net loss of ~~$844,000~~approximately $7.2 million and ~~net operating~~ cash ~~outflows~~used in operations of ~~$1.2~~approximately $4.3 million. ~~In addition, as~~As of January 31, ~~2018, we~~2024, the Company had ~~negative working capital~~an accumulated deficit of ~~$2.0~~approximately $84.5 million and cash ~~and cash equivalents~~ on hand of $1.1 million. The reduction of cash from year-end was mainly due to the $910,000 investment in equipment for our new lab facility along with the realization of deferred revenue, timing of accounts receivable collections and expense payments in the normal course of business. Additionally, we incurred approximately ~~$100,000 of non-capitalized, non-recurring costs related to the new lab set-up. Finally, we closed on a line of credit ("LOC") agreement which provides that the Company may borrow up to $1.5~~$4.5 million. The Company ~~does not plan to utilize the LOC as we believe~~believes that ~~our~~ cash ~~and cash equivalents~~ on hand, ~~at January 31, 2018 and future revenues~~together with expected cash to be provided from operations during fiscal year 2025, are adequate to fund ~~our~~ operations through at least ~~March 2019.~~

12 months from the filing of this Quarterly Report on Form 10-Q (this "Report"). However, in order for us to continue our operations beyond March 2019, we need to continue to increase revenues while managing increases in expense levels. If we are unable to maintain our operating levels, we may need to obtain capital from external sources. If weshould the Company's revenue expectations not materialize, the Company believes it has cost reduction strategies that could ~~not obtain additional financing, we may~~be implemented without disrupting the business or restructuring the Company. Should the Company be required to ~~reduce the scope~~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.

Fair Value

The carrying value of ~~or delay or eliminate, some of our research and development~~cash, accounts receivable, prepaid expenses, and other ~~activities,~~current assets, 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 ~~could harm our financial condition~~are developed by the reporting entity and ~~operating results. Financing may not be available~~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. As of January 31, 2024 the Company had assets measured at fair value on acceptable terms or at all, and our failure to raise capital when needed could negatively impact our growth plans and our financial condition and results of operations. Additional equity financing may be dilutive to the holders of our common stock and debt financing, if available, may involve significant cash payment obligations and covenantsa recurring and/or ~~financial ratios that could restrict our ability to operate our business.~~non-recurring basis as follows:


(in 000s)	January 31, 2024
	Level 1		Level 2		Level 3
Cash Equivalents:


Money market fund	2,854		—		—

Total	$	2,854	$	—	$	—

As of January 31, 2024, the Company had no liabilities measured at fair value on a recurring and/or non-recurring basis. As of April 30, 2023, the Company had no assets or liabilities measured at fair value on a recurring and/or non-recurring basis.

Earnings Per Share

Basic net income or loss per share is computed by dividing the net income or loss for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted net ~~loss~~income per share is computed by dividing the net ~~loss~~income 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 common stock ~~purchase warrants and stock~~ options. ~~For the three and nine months ended~~

As of January 31, ~~2018~~2024 and ~~2017, basic and dilutive loss per share were~~2023, all of the ~~same, as the potentially dilutive securities did not have a dilutive effect.~~Company's potential common stock is considered anti-dilutive.

Three Months Ended
January 31, Nine Months Ended
January 31,
2018 2017 2018 2017
Basic and diluted net loss per share computation:

Net loss attributable to common stockholders $ (75,359 ) $ (1,408,904 ) $ (843,094 ) $ (4,459,773 )
Weighted Average common shares – basic 10,994,434
10,967,738
10,987,797
10,130,460
Basic and diluted net loss per share $ (0.01 ) $ (0.13 ) $ (0.08 ) $ (0.44 )

The following table reflects the total potential share-based instruments outstanding at January 31, ~~2018~~2024 and ~~2017~~2023 including those that could have an effect on the future computation of dilution per common ~~share:~~share, had their effect not been anti-dilutive due to the Company's net losses in the related periods:

January 31,
2018 2017
Stock options 2,518,845
2,308,704
Warrants 2,004,284
2,109,840

Total common stock equivalents 4,523,129
4,418,544


	January 31,
	2024	2023



Total common stock equivalents	1,903,747	1,779,167

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~~earnings history, a valuation allowance is established. The Company's ability to utilize net operating losses (“NOL”) carryforwards to offset future taxable income would be limited if the Company had undergone or were to undergo an “ownership change” within the meaning of Section 382 of the Internal Revenue Code (the “IRC”). 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 January 31, ~~2018~~2024 and April 30, ~~2017,~~2023, the Company provided a valuation allowance for all net deferred tax assets as ~~recovery~~it is more likely than not that the assets will not be recovered 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.~~

The Company reflects tax benefits only if it is more likely than not that wethe Company 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~~ recorded ~~$121,000~~$181,000 of liabilities related to uncertain tax positions relative to one of its foreign operations as of January 31, ~~2018~~2024 and April 30, ~~2017.~~2023.

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~~did not recognize interest or penalties on its consolidated statements of operations during the ~~Company’s balance sheets at~~three and nine-month periods ended January 31, ~~2018~~2024 and ~~April 30, 2017, and has~~2023. The Company does 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.

The provision for income ~~tax~~taxes for the three months ended January 31, 2024 and 2023 was $11,000 and $17,000, respectively. The provision for income taxes for the nine months ended January 31, ~~2018~~2024 and ~~2017~~2023 was ~~$18,000~~$49,000 and ~~$7,000,~~$48,000, respectively. The provision is mainly attributable to taxable income earned in Israel and/or Italy relating to transfer pricing.

~~On December 22, 2017,~~Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification ("ASC") 606 ("ASC 606"), Revenue from Contracts with Customers. Under this standard, companies recognize revenue to depict the ~~Tax Cuts~~transfer of goods or services to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services.

All revenue is generated from contracts with customers. The Company's arrangements are service type contracts that mainly have a duration of less than a year. The Company recognizes revenue when control of these services is transferred to the customer in an amount, referred to as the transaction price, that reflects the consideration to which the Company is expected to be entitled in exchange for those services. The Company determines revenue recognition utilizing the following five steps: (1)

identification of the contract with a customer, (2) identification of the performance obligations in the contract (promised goods or services that are distinct), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations, and ~~Jobs Act (the “Act”~~(5) recognition of revenue when, or as, the Company transfers control of the product or service for each performance obligation. The Company records revenues net of any tax assessments by governmental authorities, such as value added taxes, that are imposed on and concurrent with specific revenue generating transactions.

The majority of the Company's revenue arrangements are service contracts that are completed within a year or less. There are a few contracts that range in duration between 1 and 3 years. Substantially all of the Company's performance obligations, and associated revenue, are transferred to the customer over time. Most of the Company's contracts can be terminated by the customer without cause. In the event of termination, the Company's contracts provide that the customer pay the Company for services rendered through the termination date. The Company generally receives compensation based on a predetermined invoicing schedule relating to specific milestones for that contract.

Amendments to contracts are common. The Company evaluates each amendment which meets the criteria of a contract modification under ASC 606. Each modification is further evaluated to determine whether the contract modification should be accounted for as a separate contract or as a continuation of the original agreement.

The Company accounts for amendments as a separate contract as they meet the criteria under ASC 606-10-25-12.

Pharmacology Study and Other Services

The Company generally enters into contracts with customers to provide oncology services with payments based on fixed-fee arrangements. At contract inception, the Company assesses the services promised in the contracts with customers to identify the performance obligations in the arrangement. The Company's fixed-fee arrangements for oncology services are considered a single performance obligation because the Company provides a highly-integrated service.

The Company recognizes revenue over time using a progress-based input method since there is no single output measure that would fairly depict the transfer of control over the life of the performance obligation. Revenue is recognized for the single performance obligation over time due to the Company's right to payment for work performed to date and the performance does not create an asset with an alternative use. The Company recognizes revenue as portions of the overall performance obligation are completed as this best depicts the progress of the performance obligation.

Incremental Costs of Obtaining a Contract (Sales Commissions)

Under ASC 606, the costs of obtaining a contract can be expensed immediately, rather than capitalized and amortized, if the amortization period is one year or shorter. Sales commissions for the Company represent contract costs with a term of one year or less. Therefore, under ASC 606, the Company elected the practical expedient to expense these costs as incurred.

Variable Consideration

In some cases, contracts provide for variable consideration that is contingent upon the occurrence of uncertain future events, such as the success of the initial performance obligation. Variable consideration is estimated at the expected value or at the most likely amount depending on the type of consideration. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company.

Trade Receivables, Unbilled Services and Deferred Revenue

In general, billings and payments are established by contractual provisions including predetermined payment schedules, which may or may not correspond to the timing of the transfer of control of the Company's services under the contract. In general, the Company's intention in its invoicing (payment terms) is to maintain cash neutrality over the life of the contract. Upfront payments, when they occur, are intended to cover certain expenses the Company incurs at the beginning of the contract. Neither the Company nor its customers view such upfront payments and contracted payment schedules as a means of financing. Unbilled services primarily arise when the revenue recognized exceeds the amount billed to the customer. Such situations occur due to divergences between revenue recognition and the invoicing milestones which are based on predetermined payment terms.

Deferred revenue consists of unearned payments received in excess of revenue recognized. As the contracted services are subsequently performed and the associated revenue is recognized, the deferred revenue balance is reduced by the amount of the revenue recognized during the period. Deferred revenue is classified as a current liability on the condensed consolidated balance sheet as the Company expects to recognize the associated revenue in less than one year.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, “Financial Instruments—Credit Losses” (Topic 326). This ASU represents a significant change in the current accounting model by requiring immediate recognition of management’s estimates of current expected credit losses. Under the prior model, losses were recognized only as they were incurred, which delayed recognition of expected losses that might not yet have met the threshold of being probable. The Company adopted ASU 2016-03 on April 1, 2023 and the adoption did not have any material effect on our condensed consolidated financial statements and related disclosures.

Note 3. Accounts Receivable, Unbilled Services and Deferred Revenue

Accounts receivable and unbilled services were as follows (in thousands)


	January 31, 2024		April 30, 2023
Accounts receivable	$	4,653	$	3,843
Unbilled services	4,380		4,993
Total accounts receivable and unbilled services	9,033		8,836
Less: Allowances	(1,138)		(825)
Total accounts receivable, net	$	7,895	$	8,011

Deferred revenue was ~~signed into law. Among other provisions,~~as follows (in thousands):


	January 31, 2024		April 30, 2023
Deferred revenue	$	13,329	$	12,776

Deferred revenue is shown as a current liability on the ~~Act reduced~~Company's condensed consolidated balance sheets.

As of May 1, 2023 and 2022, respectively, the ~~federal statutory corporate income tax rate from 35% to 21%, limited the deduction~~consolidated balance of net ~~operating losses generated in tax years beginning after December 31, 2017 to 80%~~accounts receivable was $8.0 million and $9.5 million, respectively, and deferred revenue was $12.8 million and $11.1 million, respectively. As of ~~taxable income, provided for indefinite carryforward~~November 1, 2023 and 2022, respectively, the consolidated balance of net ~~operating losses generated in tax years after 2018~~accounts receivable was $7.7 million and ~~elimination of net operating loss carrybacks, changes the treatment of offshore earnings regardless of whether they are repatriated~~$9.0 million, respectively, and ~~provides~~deferred revenue was $13.0 million and $11.2 million, respectively.

Note 4. Revenue from Contracts with Customers

Oncology Services Revenue

The following table represents disaggregated revenue for the three and nine months ended January 31, 2024 and 2023:


	Three Months Ended January 31,				Nine Months Ended January 31,
	2024		2023		2024		2023
Pharmacology services	$	11,184	$	12,119	$	33,919	$	38,355
Other TOS revenue	835		648		2,216		2,328
Personalized oncology services	—		6		18		116
Total oncology services revenue	$	12,019	$	12,773	$	36,153	$	40,799

Other Translational Oncology Solutions ("TOS") revenue represents additional services provided to the Company's pharmaceutical and biotechnology customers, specifically flow cytometry services and software-as-a-service ("SaaS") provided via our Lumin Bioinformatics software ("Lumin").

Contract Balances

Contract assets include unbilled amounts typically resulting from revenue recognized in excess of the amounts billed to the customer for which the right to payment is subject to factors other than the passage of time. These amounts may not exceed their net realizable value. Contract assets are classified as current ~~inclusion~~and included in ~~U.S. federal taxable income~~accounts receivable. Contract liabilities consist of ~~certain earnings~~customer payments received in advance of ~~controlled foreign corporations. We measure our~~performance and billings in excess of revenue recognized, net of revenue recognized from the balance at the beginning of the period and included in deferred ~~tax~~revenue. Contract assets and liabilities ~~using~~are presented on the ~~enacted tax rates that we believe will apply in~~balance sheet on a net contract-by-contract basis at the ~~years in which the temporary differences are expected to be recovered or paid. As~~end of January 31, 2018, we have made a reasonable estimate of the effects of the Tax Act on our existing deferred taxes and related disclosures by reducing our net federal and state deferred tax assets by $7 million for the reduction in corporate tax rate. This adjustment to our deferred tax assets is offset against the valuation allowance.each reporting period.

Additionally, the SEC staff has issued SAB 118, which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. Because the Company is still in the process of analyzing certain provisions of the Tax Act, the Company has determined that the adjustment to its deferred taxes was a provisional amount as permitted under SAB 118.

Note 2.5. Property and Equipment

Property and equipment is recorded at cost and primarily consists of laboratory equipment, ~~leasehold improvements, furniture and fixtures, and~~ computer equipment and ~~software.~~software, capitalized software development costs, and furniture and fixtures. Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of the various assets ranging from three to ~~seven~~nine years. Property and equipment consisted of the following (table in thousands):


	January 31, 2024		April 30, 2023
Furniture and fixtures	$	246	$	246
Computer equipment and software	2,152		2,102
Capitalized software development costs	1,888		1,888
Laboratory equipment	11,888		10,390
Assets in progress	4		1,079
Leasehold improvements	316		111

Total property and equipment	16,494		15,816
Less: Accumulated depreciation and amortization	(9,961)		(8,630)

Property and equipment, net	$	6,533	$	7,186

January 31,
2018 April 30,
2017
(unaudited)
Furniture and fixtures $ 73
$ 74
Computer equipment and software 961
872
Laboratory equipment 2,255
918
Assets in progress 50
472
Leasehold improvements —
2

Total property and equipment 3,339
2,338
Less: Accumulated depreciation (1,359 ) (1,122 )

Property and equipment, net $ 1,980
$ 1,216

Depreciation and amortization expense was $481,000 and $575,000 for the three months ended January 31, 2024 and 2023, respectively. Depreciation and amortization expense was $1.4 million and $1.7 million for the nine months ended January 31, 2024 and 2023, respectively. Depreciation and amortization expense, excluding expense recorded under ~~capital lease,~~finance leases, was ~~$98,000~~$445,000 and ~~$34,000~~$540,000 for the three months ended January 31, ~~2018~~2024 and ~~2017, respectively,~~2023, respectively. Depreciation and ~~$233,000~~amortization expense, excluding expense recorded under finance leases, was $1.3 million and ~~$108,000~~$1.6 million for the nine months ended January 31, ~~2018~~2024 and ~~2017,~~2023, respectively.

As of January 31, ~~2018~~2024 and April 30, ~~2017,~~2023, property, plant and equipment included gross assets held under ~~capital lease~~finance leases of ~~$130,000 and $124,000, respectively.~~$1.0 million. Related depreciation expense was ~~$7,000~~approximately $36,000 and ~~$6,000, respectively,~~$35,000 for the three months ended January 31, ~~2018~~2024 and ~~2017,~~2023, respectively, and ~~$20,000~~$108,000 and ~~$19,000~~$99,000 for the nine months ended January 31, ~~2018~~2024 and ~~2017,~~2023, respectively.

~~In November 2014,~~During the nine months ended January 31, 2024, the Company ~~entered~~disposed of two assets and recognized a loss on disposal of equipment of $81,000 within other income (loss) as presented in the condensed consolidated statement of operations. The first asset, laboratory equipment, was acquired for $128,000 and had accumulated depreciation of $62,000, resulting in a loss of $66,000 upon disposal. The second asset, acquired software, was purchased for $33,000 and had accumulated amortization of $18,000, resulting in a loss of $15,000 upon disposal.

Capitalized Software Development Costs Under a Hosting Arrangement

The Company accounts for the cost of computer software obtained or developed for internal use as well as the software development and implementation costs associated with a hosting arrangement ("internal-use software") that is a service contract

in accordance and with ASC 350, Intangibles - Goodwill and Other ("ASC-350"). We capitalize certain costs in the development of our internal-use software when the preliminary project stage is completed and it is probable that the project itself will be completed and the software will perform as intended. These capitalized costs include personnel and related expenses for employees and costs of third-party consultants who are directly associated with and who devote time to these internal-use software projects. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended purpose. Costs incurred for significant upgrades, increased functionality, and enhancements to the Company's internal-use software solutions are also capitalized. Costs incurred for training, maintenance, and minor modifications are expensed as incurred. Capitalized software development costs are amortized using the straight-line method over an estimated useful economic life of three years.

The Company has capitalized development and implementation costs in accordance with accounting guidance for its Lumin platform. Lumin is the Company's oncology data-driven software program and data tool which operates as SaaS. These capitalized costs represent salaries, including direct payroll-related costs, certain software development consultant expenses and molecular sequencing programming costs incurred in the engineering and coding of the software development. Total capitalized gross asset costs for the Lumin platform that was launched and placed into service were $1.9 million. During the fourth quarter of fiscal year 2023, an impairment loss was recognized equal to the amount by which the carrying amount exceeded the future net revenues, or, its net book value at April 30, 2023 of $807,000. Amortization expense related to this asset was $0 and $157,000 for the three months ended January 31, 2024 and 2023, respectively, and $0 and $471,000 for the nine months ended January 31, 2024 and 2023, respectively.

During fiscal year 2023, the Company recognized a ~~capital~~finance lease for laboratory equipment. ~~The lease has~~This equipment was obtained as the result of a laboratory supplies purchase commitment with costs of approximately ~~$149,000 and matures on November 2019.~~$368,000 at inception through June 2027. Cash payments for this lease are in the form of consideration for purchasing lab supplies under a purchase commitment agreement. 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 January 31, 2018 (table in thousands):~~

For the Years Ended April 30, Total
2018 (remaining) $ 8
2019 28
2020 16

Total minimum payments 52
Less: amount representing interest (3 )
Present value of minimum payments 49
Less: current portion (26 )
$ 23

~~The present value of~~ minimum future obligations ~~shown above is~~of $368,000 was calculated based on an interest rate of 5%3.5%. ~~The short-term~~Depreciation and ~~long-term components~~amortization expense related to this finance lease was $17,800 and $17,100 for the three months ended January 31, 2024 and 2023, respectively, and $52,800 and $45,100 for the nine months ended January 31, 2024 and 2023, respectively.

During fiscal year 2022, the Company recognized a finance lease for laboratory equipment. This equipment was obtained as the result of a laboratory supplies purchase commitment with costs of approximately $370,000 at inception through December 2025. Cash payments for this lease are in the form of consideration for purchasing lab supplies under a purchase commitment agreement. At the commencement of the ~~capital~~commitment, the present value of the minimum future obligations of $370,000 was calculated based on an interest rate of 3.25%. Depreciation and amortization expense related to this finance lease ~~obligation~~was $18,700 and $18,000 for the three months ended January 31, 2024 and 2023, respectively, and $55,600 and $54,000 for the nine months ended January 31, 2024 and 2023, respectively.

The liabilities related to these finance leases are ~~included in accrued liabilities~~classified under other current liability and other non-current liabilities ~~respectively at January 31, 2018 and April 30, 2017.~~on the Company's balance sheet. The weighted average remaining lease term of these leases is 2.83 years.

Refer to Note 7, Leases, for information on operating leases.

Note 3.6. Share-Based Payments

Stock-based compensation expense was recognized as follows (table in thousands):


	Three Months Ended January 31,				Nine Months Ended January 31,
	2024		2023		2024		2023
General and administrative	$	272	$	235	$	487	$	380
Sales and marketing	73		50		160		148
Research and development	5		6		17		13
Cost of oncology services	29		40		191		115
Total stock-based compensation expense	$	379	$	331	$	855	$	656

The Company has in place a 2021 Equity Incentive Plan and 2010 Equity Incentive Plan ~~and a 2008 Equity Incentive Plan.~~(collectively, the "Plans"). In general, these ~~plans~~Plans provide for stock-based compensation ~~in the form of (i) Non-statutory Stock Options; (ii) Restricted Stock Awards; and (iii) Stock Appreciation Rights~~ to the Company’s employees, directors and non-employees. The ~~plans~~Plans also provide for limits on the aggregate number of shares that may be granted, the term of grants and the strike price of option awards.

~~Stock-based compensation in~~2021 Equity Incentive Plan

As part of the ~~amount~~2021 Annual Shareholders Meeting, shareholders approved the adoption of ~~$152,000~~the 2021 Equity Incentive Plan (“2021 Equity Plan”). The purpose of the 2021 Equity Plan is to grant (i) Non-statutory Stock Options; (ii) Incentive Stock Options; (iii) Restricted Stock Awards; and/or (iv) Stock Appreciation Rights (collectively, stock-based compensation) to its employees, directors and ~~$237,000 was recognized for~~non-employees. Total stock awards under the ~~three months ended~~2021 Equity Plan shall not exceed 2 million 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 Company's 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. As of January 31, ~~2018~~2024, approximately 1.3 million shares were available for issue under this plan.

2010 Equity Incentive Plan

On February 18, 2011, shareholders owning a majority of the issued and ~~2017, respectively,~~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 ~~$863,000~~(iii) Stock Appreciation Rights (collectively, stock-based compensation) to its employees, directors and ~~$1.9~~non-employees. Total stock awards under the 2010 Equity Plan shall not exceed 30 million ~~was recognized for~~shares of common stock. Options and Stock Appreciation Rights expire no later than ten years from the ~~nine months ended January 31, 2018~~date of grant and ~~2017, respectively. Included in stock-based compensation expense for~~ the awards vest as determined by the ~~nine months ended January 31, 2018 under general~~Board of Directors. Options and ~~administrative line item is an option modification charge~~Stock Appreciation Rights have a strike price not less than 100% of ~~$56,529 and $15,000 related~~the fair market value of the common stock subject to the ~~issuance~~option or right at the date of ~~common stock as compensation for services performed. Stock-based compensation expense was recognized as follows (table in thousands):~~grant. After February 2021, no more shares were available to be issued from this plan.

Three Months Ended
January 31, Nine Months Ended
January 31,
2018 2017 2018 2017
General and administrative $ 110
$ 184
$ 629
$ 1,482
Sales and marketing 7
7
47
194
Research and development 33
44
156
174
TOS cost of sales 2
2
30
49
POS cost of sales —
—
1
2
Total stock-based compensation expense $ 152
$ 237
$ 863
$ 1,901

~~On January 31, 2018, there was $203,420 in unrecognized stock based compensation which will be recognized as expense over 4.3 years.~~

Black-Scholes assumptions used to calculate the fair value of options granted during the three and nine months ended January 31, ~~2018~~2024 and ~~2017~~2023 were as follows:

The weighted average fair value of stock options granted during the three months ended January 31, ~~2018~~2024 and ~~2017~~2023 was ~~$2.32~~$3.41 and ~~$1.35, respectively, and $1.95 and $1.71 was recognized for~~$4.20, respectively. The weighted average fair value of stock options granted during the nine months ended January 31, ~~2018~~2024 and ~~2017,~~2023 was $3.77 and $4.33, respectively.

The Company’s stock options activity for the nine months ended January 31, ~~2018~~2024 was as follows:

Share Repurchase Program

On March 29, 2023, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to an aggregate of $5.0 million of the Company’s common stock. The share repurchase program is designed in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as ~~follows:~~amended (the "Exchange Act"). The shares may be purchased from time to time in the open market, as permitted under applicable rules and regulations, at prevailing market prices. The timing and amount of repurchases will depend on market conditions, share price, applicable legal requirements and other factors. The program does not obligate the Company to acquire a minimum number of shares. As of January 31, 2024, the Company had purchased approximately 120,300 shares of its common stock, at an average price of $5.73 per share, totaling approximately $708,000 and leaving an available balance of approximately $4.3 million authorized by the Board for use in the program as of that date.

The Company accounts for its leases under FASB ASC Topic 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right-of-use ("ROU") asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease, if applicable, or the Company’s incremental borrowing rate. As the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term.

The Company currently leases certain office equipment and its office and laboratory facilities under non-cancelable operating leases. Rent expense for operating leases is recognized on a straight-line basis over the lease term from the lease commencement date through the scheduled expiration date. Rent expense totaled $454,000 and $475,000 for the three months ended January 31, 2024 and 2023, respectively. Rent expense totaled $1.4 million for both the nine months ended January 31, 2024 and 2023. The Company considers its facilities adequate for its current operational needs.

The Company leases the following facilities:

Non-
Employees

Directors
and
Employees
Total
Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Life (Years)

Aggregate
Intrinsic
Value
Outstanding, May 1, 2017 50,000
2,258,704
2,308,704
$ 2.86
6.1 $ 1,282,000
Granted —
267,310
267,310
2.68

Exercised —
(12,500 ) (12,500 ) 3.00

Forfeited —
(6,042 ) (6,042 ) 7.58

Canceled —
—
—
—

Expired —
(38,627 ) (38,627 ) 5.21

Outstanding, January 31, 2018 50,000
2,468,845
2,518,845
2.80
5.8 $ 3,921,000

Vested and expected to vest as of January 31, 2018 50,000
2,468,845
2,518,845
2.80
5.8 $ 3,921,000

Exercisable as of January 31, 2018 25,836
2,389,471
2,415,307
2.77
5.7 $ 3,847,000
•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 2026. The Company recognized $19,000 and $20,000 of rent expense relative to this lease for the three months ended January 31, 2024 and 2023, respectively.The Company recognized $57,000 and $62,000 of rent expense relative to this lease for the nine months ended January 31, 2024 and 2023, respectively.

•1330 Piccard Drive Suite 025, Rockville, MD 20850, which consists of laboratory and office space where the Company conducts operations related to its primary service offerings. The Company executed the original lease in January 2017. The lease was amended to expand the premises and extend the expiration date in March 2020 and again in December 2020. The operating commencement date was August 11, 2017. This lease expires in February 2029. The Company recognized $422,000 of rent expense relative to this lease for both the three months ended January 31, 2024 and 2023, and $1.3 million of rent expense relative to this lease for both the nine months ended January 31, 2024 and 2023.

~~Stock Purchase Warrants~~•VIA LEONE XIII, 14, Milan, Italy, which consists of laboratory and office space where the Company conducts operations related to its flow cytometry service offerings. The Company executed separate leases for its laboratory space and office space during fiscal 2022. During fiscal 2023, the Company executed a new lease to consolidate its office and laboratory space at a new nearby location in Italy. The lease expires October 31, 2028 and it replaces the previous two leases, which were terminated during fiscal year 2023. The Company recognized $13,000 and $34,000 of rent expense relative to these leases for the three months ended January 31, 2024 and 2023, respectively, and $38,000 and $81,000 for the nine months ended January 31, 2024 and 2023, respectively.

ROU assets and lease liabilities related to our current operating leases are as follows (in thousands):


	January 31, 2024		April 30, 2023
Operating lease right-of-use assets, net	$	6,536	$	7,318
Current portion of operating lease liabilities	1,305		1,208
Non-current portion of operating lease liabilities	6,437		7,391


2024 remaining	$	716
2025	2,902
2026	2,950
2027	2,916
2028	2,867
Thereafter	2,392
Total undiscounted liabilities	14,743
Less: Imputed interest	(7,001)
Present value of minimum lease payments	$	7,742

Number
of
Shares

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Life (Years)

Aggregate
Intrinsic
Value
Outstanding, May 1, 2017 2,004,284
$ 5.57
2.8
$ —
Granted —
—
—
—
Exercised —
—
—
—
Expired —
—
—
—

Outstanding, January 31, 2018 2,004,284
$ 5.57
2.3
$ —

Note 4.8. 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 and recorded at the exchange amount, which is the amount of consideration established and agreed to by the parties.

During both the ~~nine~~three months ended January 31, ~~2018~~2024 and 2017, the Company paid a member of its Board of Directors $54,000 and $54,000, respectively, for consulting services unrelated to his duties as a board member. During the nine months ended January 31, 2018 and 2017,2023, the Company paid an affiliate of a ~~board~~Board member ~~$73,000 and $22,000, respectively,~~$9,000 for consulting services unrelated to ~~their duties~~his duty as ~~board members.~~a Board member. During both the nine months ending January 31, 2024 and

2023, the Company paid an affiliate of a Board member $27,000 for consulting services unrelated to his duty as a Board member.

Such amounts are included in general and administrative expenses in the accompanying condensed consolidated statements of operations. As of January 31, ~~2018, no amounts were~~2024, $0 was due to ~~these~~this related ~~parties.~~party.

Note 5.9. Commitments and Contingencies

~~Operating Leases~~

The Company currently leases its office facilities. Rent expenses totaled $480,000 and $297,000 for the nine months ended January 31, 2018 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:~~

~~450 East 29t~~h Street, New York, New York, 10016, which is a laboratory facility. The Company recognized $52,000 and $155,000 of rental expense for the nine months ended January 31, 2018 and 2017, respectively. The lease expired in May 2017 and was not renewed.

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 in the Company’s Form 10-K for the fiscal year ended April 30, 2017.~~private 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 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.

~~Note 6. Segment Information~~

The Company ~~operates~~contracts with third-party vendors to license tumor samples for development into Patient Derived Xenograft (PDX) models and use in ~~two reportable segments, POS and TOS. The accounting policies~~our pharmacology TOS business. These types of arrangements have an upfront fee ranging from nil to $30,000 per tumor sample depending on the successful growth of the Company’s segments are the same as those described in Note 2 of the Company’s annual financial statements for the year ended April 30, 2017, as filed on Form 10-K. The Company evaluates performance of its segments based on profit or loss from operations before stock compensation expense, depreciationtumor model and amortization, interest expense, interest income, gain on sale of assets, special charges or benefits, and income taxes (“segment profit”). Management uses segment profit information for internal reporting and control purposes and considers it 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 reportable segment (table in thousands):

Three Months Ended January 31, 2018
Personalized
Oncology
Solutions
(POS)

Translational
Oncology
Solutions
(TOS)

Unallocated
Corporate
Overhead
Consolidated
Net revenue $ 259
$ 4,823
$ —
$ 5,082
Direct cost of services (220 ) (2,251 ) —
(2,471 )
Sales and marketing costs (94 ) (526 ) —
(620 )
Other operating expenses —
(1,013 ) (893 ) (1,906 )
Stock- based compensation expense (1) —
—
(152 ) (152 )

Segment profit (loss) $ (55 ) $ 1,033
$ (1,045 ) $ (67 )

Three Months Ended January 31, 2017
Personalized
Oncology
Solutions
(POS)

Translational
Oncology
Solutions
(TOS)

Unallocated
Corporate
Overhead
Consolidated
Net revenue $ 347
$ 3,218
$ —
$ 3,565
Direct cost of services (320 ) (2,084 ) —
(2,404 )
Sales and marketing costs (128 ) (591 ) —
(719 )
Other operating expenses —
(953 ) (653 ) (1,606 )
Stock- based compensation expense (1) —
—
(237 ) (237 )

Segment profit (loss) $ (101 ) $ (410 ) $ (890 ) $ (1,401 )

Nine Months Ended January 31, 2018 Personalized
Oncology
Solutions
(POS) Translational
Oncology
Solutions
(TOS) Unallocated
Corporate
Overhead Consolidated
Net revenue $ 1,077
$ 14,242
$ —
$ 15,319
Direct cost of services (870 ) (6,836 ) —
(7,706 )
Sales and marketing costs (265 ) (1,550 ) —
(1,815 )
Other operating expenses —
(3,152 ) (2,538 ) (5,690 )
Stock- based compensation expense (1) —
—
(863 ) (863 )

Segment profit (loss) $ (58 ) $ 2,704
$ (3,401 ) $ (755 )

Nine Months Ended January 31, 2017 Personalized
Oncology
Solutions
(POS) Translational
Oncology
Solutions
(TOS) Unallocated
Corporate
Overhead Consolidated
Net revenue $ 1,354
$ 10,337
$ —
$ 11,691
Direct cost of services (1,165 ) (5,916 ) —
(7,081 )
Sales and marketing costs (397 ) (1,778 ) —
(2,175 )
Other operating expenses —
(3,043 ) (1,911 ) (4,954 )
Stock- based compensation expense (1) —
—
(1,901 ) (1,901 )

Segment profit (loss) $ (208 ) $ (400 ) $ (3,812 ) $ (4,420 )

(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 managementability to evaluate the performance of its segments. See Note 3 for the allocation of stock compensation expense relative to the individual line items as it is reported on the Company's Consolidated Statements of Operations.

~~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.~~

~~Note 7. Lines of Credit~~

~~On October 30, 2017, the Company entered~~develop them 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% andsellable product. The upfront costs are secured by all assets of the Company. The balances payable under this arrangement are due on demand. As of January 31, 2018, there were no outstanding borrowings. The revolving line maturity date is October 29, 2018.

~~Note 8. Recent Accounting Pronouncements~~

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines 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.expensed as incurred. In addition, this guidance requires new or expanded disclosures related to the judgments made by companies when following this framework and additional quantitative disclosures regarding contract balances and remaining performance obligations. On July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017under certain agreements, for interim and annual reporting periods beginning after that date. Early adoption of ASU 2014-09 is permitted but not before the original effective date (annual periods beginning after December 15, 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 will adopt this guidance on May 1, 2018.

The Company is currently evaluating the overall impact that ASU 2014-09 will have on the Company’s consolidated financial statements, as well as the expected timing and method of adoption. The Company has established an implementation team, including external advisers, and has commenced the review of the Company’s revenue portfolio and related contracts across its various business units and geographies. Discussions regarding changes to the Company’s current accounting policies and practices remain ongoing and preliminary conclusions are subject to change.

~~Upon adoption, the Company will recognize revenue from contracts with customers as each performance obligation is satisfied, either at a point in time or over a~~limited period of time, ~~based on when control transfers to customers.~~

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~~is subject to royalty payments if the licensed tumor models are used for sale in our TOS business, ranging from 2% to 20% of the ~~new revenue recognition standard, the Company does not anticipate being able to provide the impact~~contract price after recouping certain initiation costs. Some of ~~the new standard on the Balance Sheets or Statements~~these arrangements also set forth an annual minimum royalty due regardless 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 ASU No. 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. The amendments in this update state that in connection with preparing financial statementstumor models used for each annual and interim reporting period, an entity’s management should evaluate whether there are conditions or events that raise substantial doubt about the 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). The amendments in this update are effective for the annual reporting period beginning after December 15, 2016 and for annual periods and interim periods thereafter. Early application is permitted. The adoption of this update 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 assessing the impact of this update on our 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. Early adoption is permitted for financial statements that have not already been issued. The adoption of this update 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 we are currently assessing the impact of adoption of this update will have 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.sale. For the ~~Company,~~three months ended January 31, 2024 and 2023, we have recognized approximately $114,000 and $21,000, respectively, in expense related to these royalty arrangements. For the ~~amendments are effective~~nine months ended January ~~1, 2020. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.~~31, 2024 and 2023, we have recognized approximately $240,000 and $129,000, respectively, in expense related to these royalty arrangements.

Item 2. Management’s Discussion and Analysis of Financial Condition andResults of Operations

The following discussion of our historical results of operations and our liquidity and capital resources should be read in conjunction with the condensed consolidated financial statements and related notes that appear elsewhere in this ~~report~~Report and our ~~most recent annual report for the year ended April 30, 2017, as filed on Form 10-K.~~2023 Annual Report.

Forward-Looking Statements

This ~~Quarterly~~ Report ~~on Form 10-Q~~ contains certain “forward-looking statements,” which include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation, and availability of resources. These forward-looking statements include, without limitation, statements regarding: proposed new programs; expectations that regulatory developments or other matters will not have a material adverse effect on our financial position, results

of operations, or liquidity; statements concerning projections, predictions, expectations, estimates, or forecasts as to our business, financial and operational results, and future economic performance; and statements of management’s goals and objectives and other similar expressions concerning matters that are not historical facts. Words such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar expressions, as well as statements in future tense, identify forward-looking statements.

Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are

based on information available at the time those statements are made or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.

Forward-looking statements speak only as of the date the statements are made. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, those described in “Risk Factors” in Part I, Item 1A of our 2023 Annual Report, ~~on Form 10-K for the fiscal year ended April 30, 2017,~~ as updated in our subsequent reports filed with the SEC, including any updates found in Part II, Item 1A of this or other reports on Form ~~10-Q.~~10-Q, if any. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Overview and Recent Developments

We are a technology-enabled research organization engaged in creating transformative technology solutions to be utilized in drug discovery and development. Our research center consists of a comprehensive set of computational and experimental research platforms. Our pharmacology, biomarker, and data platforms are designed to facilitate drug discovery and development at lower costs and increased speeds. We perform studies which 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 simulate 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 analysis 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. Additionally, we provide computational or experimental support to identify novel therapeutic targets, select appropriate patient populations for clinical evaluation, identify potential therapeutic combination strategies, and develop biomarker hypothesis of sensitivity or resistance. These studies include the use of our in vivo, ex vivo, analytical and computational platforms.

We are engaged in the development and sale of advanced technology solutions and products ~~utilized in~~to personalize the development and use of oncology ~~drugs.~~drugs through our Translational Oncology Solutions ("TOS"). This technology ranges from computational-based discovery platforms, unique oncology software solutions, and innovative and proprietary experimental tools such as in vivo, ex vivo and biomarker platforms. Utilizing our TumorGraft Technology Platform (the "Platform"), a comprehensive bank of unique, well characterized models, 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.

We offer Lumin Bioinformatics ("Lumin"), an oncology data-driven Software as a Service (SaaS) program. Our Lumin software contains comprehensive information derived from our research services and clinical studies. Lumin leverages our large Datacenter coupled with analytics and artificial intelligence to provide a robust tool for computational cancer research. Insights developed using Lumin can provide the basis for biomarker hypotheses, reveal potential mechanisms of therapeutic resistance, and guide the direction of additional preclinical evaluations.

Our ~~platform provides~~drug discovery and development business leverages the computational and experimental capabilities within our platforms. Our discovery strategy utilizes our Datacenter, coupled with artificial intelligence and other advanced computational analytics, to identify novel therapeutic targets. We then employ the use of our proprietary experimental platforms to validate these targets for further drug development efforts.

We have a ~~novel approach~~pipeline of targets at various stages of discovery and validation, with a select group that has progressed to ~~simulating~~therapeutic development. Our commercial strategy for the ~~results of human clinical trials used in developing oncology drugs. According to a 2013 study conducted by Cutting Edge Information, it can cost up to $100,000 per patient in oncology clinical trials~~validated targets and ~~the typical cost~~therapeutics established from this business is wide-ranging and still being developed. It will depend on many factors, and will be specific for each ~~phase~~target or therapeutic area identified. All expenses associated with this part of our business are research and 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 other drugs.are expensed as incurred.

We ~~plan~~regularly evaluate strategic options to ~~continue~~create additional value from our ~~efforts~~drug discovery business, which may include, but are not limited to, ~~expand our TumorGraft Technology Platform in order to expand our TOS program. Our POS program will not be the focus of our growth moving forward.~~potential spin-out transactions or capital raises.

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,~~Recently, we have met these cash requirements through ~~our~~cash, working capital management, and sales of products and ~~services, working capital management, and~~services. In the past, we have also received proceeds from certain private placements and public offerings of our securities. For the nine months ended January 31, ~~2018, we~~2024, the Company had a net loss of ~~$844,000~~approximately $7.2 million and ~~net operating~~ cash ~~outflows~~used in operations of ~~$1.2~~approximately $4.3 million. ~~In addition, as~~As of January 31, ~~2018, we~~2024, the Company had ~~negative working capital~~an accumulated deficit of ~~$2.0~~approximately $84.5 million and cash ~~and cash equivalents~~ on hand of ~~$1.1~~approximately $4.5 million. The reduction of cash from year-end was mainly due to the $910,000 investment in equipment for our new lab facility along with the realization of deferred revenue, timing of accounts receivable collections and expense payments in the normal course of business. Additionally, we incurred approximately $100,000 of non-capitalized, non-recurring costs related to the new lab set-up. Finally, we closed on a line of credit ("LOC") agreement which provides that the Company may borrow up to $1.5 million. The Company does not plan to utilize the LOC as weWe believe that our cash ~~and cash equivalents~~ on hand, ~~at January 31, 2018 and future revenue~~together with expected cash flows from operations to be provided for during fiscal 2025, are adequate to fund ~~our~~ operations through at least ~~December 2018.~~

12 months from the filing of this Report. However, ~~in order for us to continue~~should our ~~operations beyond March 2019,~~revenue expectations not materialize, we ~~need to continue to increase revenues while managing increases in expense levels. If~~believe we ~~are unable to maintain our operating levels, we may need to obtain capital from external sources. If we~~have cost reduction strategies that could ~~not obtain additional financing, we may~~be implemented without disrupting the business or restructuring the Company. Should the Company be required to ~~reduce the scope of, or delay or eliminate, some of our research and development and other activities, which could harm our financial condition and operating results. Financing may not~~raise additional capital, there can be ~~available~~no assurance that management would be successful in raising such capital on terms acceptable ~~terms or~~to us, if at all, and our failure to raise capital when needed could negatively impact our growth plans and our financial condition and results of operations. Additional equity financing may be dilutive to the holders of our common stock and debt financing, if available, may involve significant cash payment obligations and covenants and/or financial ratios that could restrict our ability to operate our business.all.

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



	For the Nine months ended January 31,
	2024		% of Revenue		2023		% of Revenue		% Change

Oncology services revenue	$	36,153	100.0	%	$	40,799	100.0	%	(11.4)	%

Costs and operating expenses:
Cost of oncology services	22,151		61.3		22,194		54.4		(0.2)
Research and development	7,494		20.7		8,693		21.3		(13.8)
Sales and marketing	5,288		14.6		5,153		12.6		2.6
General and administrative	8,305		23.0		7,494		18.4		10.8

Total costs and operating expenses	43,238		119.6		43,534		106.7		(0.7)
Loss from operations	$	(7,085)	(19.6)		$	(2,735)	(6.7)	%	159.0	%

For the Three Months Ended January 31,
2018
% of
Revenue
2017
% of
Revenue

%
Change
Operating revenue:

Personalized oncology solutions $ 259
5.1 % $ 347
9.7 % (25.4 )%
Translational oncology solutions 4,823
94.9
3,218
90.3
49.9 %

Total operating revenue 5,082
100.0
3,565
100.0
42.6

Costs and operating expenses:

Cost of personalized oncology solutions 220
4.3
320
9.0
(31.3 )
Cost of translational oncology solutions 2,253
44.3
2,086
58.5
8.0
Research and development 1,045
20.6
998
28.0
4.7
Sales and marketing 627
12.3
726
20.4
(13.6 )
General and administrative 1,004
19.8
836
23.5
20.1

Total costs and operating expenses 5,149
101.3
4,966
139.4
3.7
Loss from operations $ (67 ) (1.3 )% $ (1,401 ) (39.4 )% (95.2 )%
Oncology Services Revenue

For the Nine Months Ended January 31,
2018 % of
Revenue 2017 % of
Revenue %
Change
Operating revenue:

Personalized oncology solutions $ 1,077
7.0 % $ 1,354
11.6 % (20.5 )%
Translational oncology solutions 14,242
93.0
10,337
88.4
37.8

Total operating revenue 15,319
100.0
11,691
100.0
31.0

Costs and operating expenses:

Cost of personalized oncology solutions 871
5.7
1,167
10.0
(25.4 )
Cost of translational oncology solutions 6,866
44.8
5,965
51.0
15.1
Research and development 3,308
21.6
3,217
27.5
2.8
Sales and marketing 1,862
12.2
2,369
20.3
(21.4 )
General and administrative 3,167
20.7
3,393
29.0
(6.7 )

Total costs and operating expenses 16,074
104.9
16,111
137.8
(0.2 )
Loss from operations $ (755 ) (4.9 )% $ (4,420 ) (37.8 )% (82.9 )%

~~Operating Revenues~~

~~Operating revenues were $5.1~~Oncology services revenue, which is primarily derived from pharmacology studies, was $12.0 million and ~~$3.6~~$12.8 million for the three months ended January 31, ~~2018~~2024 and ~~2017,~~2023, respectively, ~~an increase~~a decrease of ~~$1.5~~$0.8 million or ~~42.6%~~5.9%. ~~Operating revenues were $15.3~~Oncology services revenue was $36.2 million and ~~$11.7~~$40.8 million for the nine months ended January 31, ~~2018~~2024 and ~~2017,~~2023, respectively, a decrease of

$4.6 million or 11.4%. The decrease in revenue resulted from an increase in study cancellations during fiscal year 2023, thereby reducing our net bookings and available convertible revenue in the current year.

Cost of ~~$3.6 million or 31%.~~Oncology Services

~~POS revenues were $259,000 and $347,000~~Cost of oncology services for the three months ended January 31, ~~2018~~2024 and ~~2017, respectively, a decrease of $88,000, or (25.4%). The decrease is due mainly to a decrease in implant and drug study revenue. POS revenues~~2023 were $1$7.8 million and ~~$1.4~~$7.7 million, respectively, an increase of $150,000 or 1.9%. Cost of oncology services for the nine months ended January 31, ~~2018~~2024 and ~~2017,~~2023 were $22.2 million and $22.2 million, respectively, a slight decrease of ~~$400,000~~$43,000 or ~~(20.5%)~~0.2%.

~~TOS revenues were $4.8 million and $3.2 million~~ The net increase in cost of oncology services for the three months ended January 31, ~~2018 and 2017, respectively,~~2024 was primarily from an increase ~~of $1.6 million, or 49.9%.TOS revenues were $14.2 million~~in compensation expense and ~~$10.3 million for the nine months ended January 31, 2018 and 2017, respectively, an increase of $3.9 million, or 37.8%.~~

~~Cost of Personalized Oncology Solutions~~

Cost of POS for the three months ended January 31, 2018 and 2017 were $220,000 and $320,000, respectively, a decrease of $100,000, or (31.3%). Cost of POS for the nine months ended January 31, 2018 and 2017 were $900,000 and $1.2 million, respectively, a decrease of $300,000 or (25.4%).mouse costs. For the three months ended January 31, ~~2018~~2024 and ~~2017, gross~~2023, margins ~~for POS~~ were ~~15.1%~~34.7% and ~~7.8%~~39.7%, respectively.~~The improvement is attributed to the increase in higher margin sequencing revenue.~~ For the nine months ended January ~~31, 2018~~2024 and ~~2017, gross~~2023, margins ~~for POS~~ were ~~19.1%~~38.7% and ~~13.8%~~45.6%, respectively.

~~Cost of Translational Oncology Solutions~~

~~Cost of TOS~~ The lower margin for both the three months ~~ended January 31, 2018~~ and ~~2017 were $2.3 million and $2.1 million, respectively, an increase of $200,000, or 8%. Cost of TOS for the~~ nine months ended January 31, ~~2018~~2024 resulted primarily from a decline in top line revenue against a generally unchanged cost base.

Research and 2017 was $6.9 million and $6 million, respectively, an increase of $900,000, or 15.1%. For the three months ended January 31, 2018 and 2017, gross margins for TOS were 53.3% and 35.2%, respectively. The increase in TOS cost of sales was due to an increase in the number and size of TOS studies. The gross margin often fluctuates quarter to quarter, resulting from timing differences between revenue and expense recognition. For the nine months ended January 31, 2018 and 2017, gross margins for TOS were 51.8% and 42.3%, respectively.Development

~~Research and Development~~

Research and development expenses for the three months ended January 31, ~~2018~~2024 and ~~2017~~2023 were $2.2 million and $3.2 million, respectively, a decrease of approximately $1.0 ~~million.~~million or 31.7%. Research and development expenses for the nine months ended January ~~31, 2018~~2024 and ~~2017~~2023 were ~~$3.3~~$7.5 million and ~~$3.2~~$8.7 million, respectively, ~~an increase~~a decrease of ~~$100,000,~~approximately $1.2 million or ~~2.8%~~13.8%. The decrease in both the three and nine month periods was primarily due to a reduction in investment related to our target discovery program.

Sales and marketing expenses for the three months ended January 31, ~~2018~~2024 and ~~2017~~2023 were ~~$627,000~~$1.8 million and ~~$726,000,~~$1.8 million, respectively, a ~~decrease~~slight increase of ~~$99,000,~~$36,000 or ~~(13.6%)~~2.0%. ~~The decrease is mainly due to a reduction of marketing resources for the POS division.~~ Sales and marketing expenses for the nine months ended January ~~31, 2018~~2024 and ~~2017 was $1.9~~2023 were $5.3 million and ~~$2.4~~$5.2 million, respectively, ~~a decrease~~an increase of ~~$500,000~~$135,000 or ~~(21.4%)~~2.6%. Sales and marketing expenses are primarily comprised of compensation expenses to support business development.

General and Administrative

General and administrative expenses for the three months ended January 31, ~~2018~~2024 and ~~2017~~2023 were $1$2.8 million and ~~$836,000,~~$2.6 million, respectively, an increase of ~~$164,000,~~$195,000, or ~~20.1%~~7.6%. General and administrative expenses for the nine months ended January 31, ~~2018~~2024 and ~~2017~~2023 were ~~$3.2~~$8.3 million and ~~$3.4~~$7.5 million, respectively, ~~a decrease~~an increase of ~~$200,000~~$811,000, or ~~(6.7%)~~10.8%. General and administrative expenses are primarily comprised of compensation, insurance, professional fees, IT and depreciation and amortization expenses. The increase for the nine months ended January 31, 2024 was primarily from compensation and recruiting expenses and an increase in allowances for credit losses and bad debt reserves.

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

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

Cash Flows from Operating Activities

~~Net~~For the nine months ended January 31, 2024, net cash used in operating activities was ~~$1.2 million~~$4.3 million. The cash used in operating activities was primarily due to the loss for the ~~nine months ended January 31, 2018 compared to $3.2 million for the nine months ended January 31, 2017, respectively.~~period resulting from lower revenue.

Cash Flows from Investing Activities

Net cash used in investing activities was $1$947,000 and $2.1 million ~~and $181,000~~ for the nine months ended January 31, ~~2018~~2024 and ~~2017,~~2023, respectively. ~~These current~~The cash ~~outflows were primarily due to~~used in investing activities was for the ~~purchase of property~~investment in additional lab and ~~equipment relating to the Company's new lab facility in Rockville, Maryland.~~computer equipment.

Cash Flows from Financing Activities

Net cash ~~provided by~~used in financing activities was ~~$19,000 and $4.3 million~~$382,000 for the nine months ended January 31, ~~2018 and 2017, respectively.~~2024. The ~~net~~ cash used was for the Company's stock repurchase program, offset by cash received from stock option exercises.

Factors That May Adversely Affect our Results of Operations

Our results of operations may be adversely affected by various factors that could cause economic uncertainty and volatility in ~~financing activities relates to~~the financial markets, many of which are beyond our ~~capital lease~~control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the ongoing effects of the COVID-19 pandemic, including resurgences and the ~~exercise~~emergence of ~~stock options.~~new variants, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. We cannot at this time fully predict the likelihood of one or more of the above events, their duration, or magnitude or the extent to which they may negatively impact our business.

Critical Accounting Estimates and Policies

The preparation of these condensed consolidated financial statements in conformity with ~~accounting principles generally accepted~~GAAP in the United States requires management to apply methodologies and make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. 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~~stock-based compensation and warrant assumptions. Actual results could differ from those estimates. The Company’s critical accounting policies are summarized in ~~the Company’s~~our 2023 Annual ~~Report on Form 10-K, filed with the SEC on July 28, 2017.~~

~~Recent Accounting Pronouncements~~

For detailed information regarding recently issued accounting pronouncements and the expected impact on our condensed consolidated financial statements, see Note 8, "Recent Accounting Pronouncements" in the accompanying Notes to Condensed Consolidated Financial Statements included in Item 1 of this Report on Form 10-Q.Report.

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 3. Quantitative and Qualitative Disclosures About Market Risk

~~Not applicable to~~We are a smaller reporting ~~companies.~~companies company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

It is management’s responsibility to establish and maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the ~~Securities~~ Exchange ~~Act of 1934.~~Act. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this ~~quarterly report.~~Report. In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily is required to apply its judgment in evaluating the relationship between the benefit of desired controls and procedures and the cost of implementing new controls and procedures.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Our management has assessed the effectiveness of our internal control over financial reporting as of January 31, 2024. Based on that ~~evaluation,~~assessment, our management, including our Chief Executive Officer and our Chief Financial Officer, have concluded that our disclosure controls and procedures were effective as of January 31, ~~2018~~2024 at the reasonable assurance level 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~~SEC’s rules and forms and is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure. Further, management concluded that our consolidated financial statements in this Report present fairly, in all material respects, the Company’s financial position, results of operations and cash flows as of the dates, and for the periods presented, in conformity with U.S. GAAP.

Changes in Internal Control Over Financial Reporting

There ~~were~~have been no changes in our internal control over financial reporting in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 1. Legal Proceedings

~~None.~~To the knowledge of our management team, there is no litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such, or against any of our property.

Item 1A. Risk Factors

As a smaller reporting company under Rule 12-2 of the Exchange Act, we are not required to include risk factors in this Report. However, as of the date of this Report, there have been no material changes with respect to those risk factors previously disclosed in our 2023 Annual Report. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks could arise that may also affect our business. We may ~~not be able~~disclose changes to ~~meet~~such risk factors or disclose additional risk factors from time to time in our ~~cash requirements beyond March 2019 without reducing~~future filings with the ~~scope of our activities or obtaining additional capital from external sources, and if we are unable to do so, we may not be able to continue as a going concern.~~SEC.

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 strategic initiatives. In the past, we have met these cash requirements through our sales of products and services, working capital management, and proceeds from certain private and public offerings of our securities. For the nine months ended January 31, 2018, we had a net loss of $844,000 and net operating cash outflows of $1.2 million. In addition, as of January 31, 2018, we had negative working capital of $2.0 million and cash and cash equivalents on hand of $1.1million. The reduction of cash from year-end was mainly due to the $910,000 investment in equipment for our new lab facility along with the realization of deferred revenue, timing of accounts receivable collections and expense payments in the normal course of business. Additionally, we incurred approximately $100,000 of non-capitalized, non-recurring costs related to the new lab set-up. Finally, we closed on a line of credit ("LOC") agreement which provides that the Company may borrow up to $1.5 million. The Company does not plan to utilize the LOC as we believe that our cash and cash equivalents on hand at January 31, 2018 and future revenue are adequate to fund our operations through at least December 2018.

However, in order for us to continue our operations beyond March 2019, we need to continue to increase revenues while managing increases in expense levels. If we are unable to maintain our operating levels, we may need to obtain capital from external sources. If we could not obtain additional financing, we may be required to reduce the scope of, or delay or eliminate, some of our research and development and other activities, which could harm our financial condition and operating results. Financing may not be available on acceptable terms or at all, and our failure to raise capital when needed could negatively impact our growth plans and our financial condition and results of operations. Additional equity financing may be dilutive to the holders of our common stock and debt financing, if available, may involve significant cash payment obligations and covenants and/or financial ratios that could restrict our ability to operate our business.

Unregistered Sales of Equity Securities

Issuer Purchases of Equity Securities

Item 3. Defaults Upon Senior Securities

Item 4. Mine Safety Disclosures

Item 5. Other Information

Item 6. Exhibits


No.		Exhibit
31.1*
~~No.~~	~~Exhibit~~
31.1*	~~8650~~ Section 302 Certification of Principal Executive Officer
31.2*		~~8650~~ Section 302 Certification of Principal Financial Officer
32.1**		Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*

iXBRL Instance Document.

101.SCH*

101.INS*

~~XBRL Instance Document.~~

101.SCH*

~~XBRL~~iXBRL Taxonomy Extension Schema Document.

101.CAL*

~~XBRL~~iXBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*

~~XBRL~~iXBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*

~~XBRL~~iXBRL Taxonomy Extension Label Linkbase Document.

101.PRE*

~~XBRL~~iXBRL Taxonomy Extension Presentation Linkbase Document.

* filed herewith

** furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	CHAMPIONS ONCOLOGY, INC.
		(Registrant)

Date: March ~~19, 2018~~14, 2024		By:	/s/ Ronnie Morris
			Ronnie Morris
			Chief Executive Officer
			(principal executive officer)

Date: March ~~19, 2018~~14, 2024		By:	/s/ David Miller
			David Miller
			Chief Financial Officer
			(principal financial and accounting officer)



Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer¨þ	Smaller reporting company þ☑
~~Non-accelerated filer~~ o	~~(Do not check if a smaller reporting company)~~		Emerging growth company o☐


	Three Months Ended January 31,

	Three Months Ended January 31,		Nine Months Ended January 31,
	2018	2017	2018	2017
Expected term in years	3	3	3 - 6	3 - 6
Expected term in years
Expected term in years
Risk-free interest rates
Risk-free interest rates
Risk-free interest rates	1.98%	0.59% - 1.90%	1.77% - 1.98%	0.59% - 1.90%
Volatility	85.59%	72.12% - 87.96%	85.59% - 87.66%	72.12% - 87.96%
Volatility
Volatility
Dividend yield	—%	—%	—%	—%
Dividend yield
Dividend yield


	Directors and Employees	Non- Employees	Total	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding, April 30, 2023	1,739,336	36,331	1,775,667	$	4.80	4.6	$	2,683,000
Granted	419,730	—	419,730	6.10		9.7
Exercised	(155,449)	—	(155,449)	2.31
Forfeited	(40,750)	—	(40,750)	6.21
Canceled	(41,285)	—	(41,285)	4.44
Expired	(54,166)	—	(54,166)	12.78

Outstanding, January 31, 2024	1,867,416	36,331	1,903,747	5.04		5.4	$	3,068,000

Vested and expected to vest as of January 31, 2024	1,867,416	36,331	1,903,747	5.04		5.4	$	3,068,000

Exercisable as of January 31, 2024	1,453,363	3,750	1,457,113	4.63		4.3	$	3,011,000



	PART I - FINANCIAL INFORMATION
Item 1.		Financial Statements.
		Condensed Consolidated Balance Sheets as of January 31, ~~2018~~202 4 (unaudited) and April 30, ~~2017~~20 23	4
		Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended January 31, ~~2018~~202 4 and ~~2017 (unaudited)~~202 3	5
		Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficiency) for the Three and Nine Months Ended January 31, 202 4 and 20 2 3	6
		Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended January 31, ~~2018~~202 4 and ~~2017 (unaudited)~~20 23	67
		Notes to Unaudited Condensed Consolidated Financial Statements	78
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	1518
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	1922
Item 4.		Controls and Procedures	1922

		PART II - OTHER INFORMATION
Item 1.		Legal Proceedings	1924
Item 1A.		Risk Factors	1924
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	2024
Item 3.		Defaults Upon Senior Securities	2024
Item 4.		Mine Safety Disclosures	2024
Item 5.		Other Information	2024
Item 6.		Exhibits	2125



	January 31, 2018			April 30, 2017
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,062		$	3,295
Accounts receivable, net	2,942			2,274
Prepaid expenses and other current assets	185			300

Total current assets	4,189			5,869

Restricted cash	150			150
Property and equipment, net	1,980			1,216
Other Long Term Assets	107			107
Goodwill	669			669

Total assets	$	7,095		$	8,011

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	1,961		$	1,852
Accrued liabilities	365			685
Deferred revenue	3,851			4,910

Total current liabilities	6,177			7,447

Other non-current liabilities	446			164

Total liabilities	6,623			7,611

Stockholders’ equity:
Common stock, $.001 par value; 200,000,000 shares authorized; 11,277,675 and 11,251,844 shares issued and 11,000,847 and 10,982,159 shares outstanding as of January 31, 2018 and April 30, 2017, respectively	11			11
Treasury stock, at cost, 269,685 common shares as of January 31, 2018 and April 30, 2017	(1,252		)	(1,252		)
Additional paid-in capital	71,906			70,991
Accumulated deficit	(70,193		)	(69,350		)

Total stockholders’ equity	472			400

Total liabilities and stockholders’ equity	$	7,095		$	8,011



For the Years Ended April 30,	Total
2018 (remaining)	$	8
2019	28
2020	16

Total minimum payments	52
Less: amount representing interest	(3		)
Present value of minimum payments	49
Less: current portion	(26		)
	$	23



	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding, May 1, 2017	2,004,284	$	5.57	2.8	$	—
Granted	—	—		—	—
Exercised	—	—		—	—
Expired	—	—		—	—

Outstanding, January 31, 2018	2,004,284	$	5.57	2.3	$	—



Three Months Ended January 31, 2018	Personalized Oncology Solutions (POS)			Translational Oncology Solutions (TOS)			Unallocated Corporate Overhead			Consolidated
Net revenue	$	259		$	4,823		$	—		$	5,082
Direct cost of services	(220		)	(2,251		)	—			(2,471		)
Sales and marketing costs	(94		)	(526		)	—			(620		)
Other operating expenses	—			(1,013		)	(893		)	(1,906		)
Stock- based compensation expense (1)	—			—			(152		)	(152		)

Segment profit (loss)	$	(55	)	$	1,033		$	(1,045	)	$	(67	)



Three Months Ended January 31, 2017	Personalized Oncology Solutions (POS)			Translational Oncology Solutions (TOS)			Unallocated Corporate Overhead			Consolidated
Net revenue	$	347		$	3,218		$	—		$	3,565
Direct cost of services	(320		)	(2,084		)	—			(2,404		)
Sales and marketing costs	(128		)	(591		)	—			(719		)
Other operating expenses	—			(953		)	(653		)	(1,606		)
Stock- based compensation expense (1)	—			—			(237		)	(237		)

Segment profit (loss)	$	(101	)	$	(410	)	$	(890	)	$	(1,401	)



Nine Months Ended January 31, 2018	Personalized Oncology Solutions (POS)			Translational Oncology Solutions (TOS)			Unallocated Corporate Overhead			Consolidated
Net revenue	$	1,077		$	14,242		$	—		$	15,319
Direct cost of services	(870		)	(6,836		)	—			(7,706		)
Sales and marketing costs	(265		)	(1,550		)	—			(1,815		)
Other operating expenses	—			(3,152		)	(2,538		)	(5,690		)
Stock- based compensation expense (1)	—			—			(863		)	(863		)

Segment profit (loss)	$	(58	)	$	2,704		$	(3,401	)	$	(755	)



Nine Months Ended January 31, 2017	Personalized Oncology Solutions (POS)			Translational Oncology Solutions (TOS)			Unallocated Corporate Overhead			Consolidated
Net revenue	$	1,354		$	10,337		$	—		$	11,691
Direct cost of services	(1,165		)	(5,916		)	—			(7,081		)
Sales and marketing costs	(397		)	(1,778		)	—			(2,175		)
Other operating expenses	—			(3,043		)	(1,911		)	(4,954		)
Stock- based compensation expense (1)	—			—			(1,901		)	(1,901		)

Segment profit (loss)	$	(208	)	$	(400	)	$	(3,812	)	$	(4,420	)


	For the Three Months Ended January 31,
	2024		% of Revenue		2023		% of Revenue		% Change

Oncology services revenue	$	12,019	100.0	%	$	12,773	100.0	%	(5.9)	%

Costs and operating expenses:
Cost of oncology services	7,849		65.3		7,699		60.3		1.9
Research and development	2,186		18.2		3,202		25.1		(31.7)
Sales and marketing	1,797		15.0		1,761		13.8		2.0
General and administrative	2,764		23.0		2,569		20.1		7.6

Total costs and operating expenses	14,596		121.4		15,231		119.3		(4.2)
Loss from operations	$	(2,577)	(21.4)	%	$	(2,458)	(19.2)	%	4.8	%