What changed in this filing

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Item 1. Financial Statements

2020-12-14 compared with 2020-09-14 · 127 added, 65 removed, 355 unchanged (35% of the section changed)

3 unchanged sentences

(Dollars in Thousands)

2020 April 30,

Current assets:

Cash $ 8,553 $ 8,342

Accounts receivable, net 5,960 4,770

4 unchanged sentences

Other long-term assets 36 128

Goodwill 335 335

Total assets $ 25,760 $ 20,751

LIABILITIES AND STOCKHOLDERS’ EQUITY

12 unchanged sentences

200,000,000 shares authorized;

12,727,888 and 12,726,728 shares issued and outstanding as of July 31, 2020 and April 30, 2020, respectively

13,368,545 and 12,726,728 shares issued and outstanding as of October 31, 2020 and April 30, 2020, respectively

Additional paid-in capital 79,477 77,978

7 unchanged sentences

Three Months Ended

October 31, Six Months Ended

2020 2019 2020 2019

Oncology services revenue $ 10,117 $ 7,625 $ 19,664 $ 14,362

6 unchanged sentences

Income (loss) from operations 7 291 31 ( 323 )

Other income (expense):

Other income (expense)

Other income 9 27 73 15

Income (loss) before provision for income taxes 16 318 104 ( 308 )

2 unchanged sentences

Net income (loss) per common share outstanding

basic $ — $ 0.03 $ 0.01 $ ( 0.03 )

and diluted $ — $ 0.02 $ 0.01 $ ( 0.03 )

Weighted average common shares outstanding

basic 13,064,191 11,619,686 12,811,921 11,619,569

and diluted 15,062,103 12,964,792 14,563,060 11,619,569

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

CHAMPIONS ONCOLOGY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars in Thousands)

Common Stock Additional

Capital Accumulated

Deficit Total

Stockholders'

Shares Amount

Balance April 30, 2020 12,726,728 13 $ 77,978 $ ( 72,673 ) $ 5,318

1 unchanged sentence

Issuance of common stock on exercise of stock options 1,160 — — $ — $ —

Net income — — — 75 75

Balance July 31, 2020 12,727,888 13 $ 78,098 $ ( 72,598 ) $ 5,513

Stock-based compensation — — 85 $ — $ 85

Issuance of common stock on exercise of stock options 640,657 — 1,294 $ — $ 1,294

Net income — — — 1 1

Balance October 31, 2020 13,368,545 13 79,477 ( 72,597 ) 6,893

Common Stock Additional

Capital Accumulated

Deficit Total

Stockholders'

Shares Amount

Balance April 30, 2019 11,619,538 12 $ 72,924 $ ( 70,698 ) $ 2,238

Stock-based compensation — — 131 — 131

Net loss — — — ( 641 ) ( 641 )

Balance July 31, 2019 11,619,538 12 $ 73,055 $ ( 71,339 ) $ 1,728

Stock-based compensation — — 77 — 77

Issuance of common stock on exercise of stock options and warrants 625 — 2 — 2

Net income — — — 307 307

Balance October 31, 2019 11,620,163 12 73,134 ( 71,032 ) 2,114

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

2 unchanged sentences

(Dollars in Thousands)

Three Months Ended

Six Months Ended

Operating activities:

3 unchanged sentences

Depreciation and amortization expense 584 360

Gain on disposal of equipment — ( 52 )

Gain on termination of operating lease ( 75 ) —

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Deferred revenue 373 124

Net cash used in operating activities

Net cash provided by operating activities 164 81

Investing activities:

3 unchanged sentences

Financing activities:

Proceeds from exercise of options and warrants 1,294 2

Finance lease payments ( 115 ) ( 14 )

Net cash used in financing activities

Decrease in cash

Net cash provided by (used in) financing activities 1,179 ( 12 )

Increase (decrease) in cash 211 ( 453 )

Cash at beginning of period 8,342 3,237

2 unchanged sentences

Right-of-use assets obtained in exchange for operating lease liabilities 3,872 3,205

Unpaid portion of property and equipment purchase 240 321

Credit received on purchase of equipment $ — $ 160

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

10 unchanged sentences

Champions Oncology (Israel), Limited and Champions Biotechnology U.K., Limited.

For the three months ended July 31, 2020 and 2019 , there were no revenues earned by these subsidiaries.

For the three and six months ended October 31, 2020 and 2019, there were no revenues earned by these subsidiaries.

The Company’s foreign subsidiaries functional currency is the U.S.

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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 July 31, 2020 and April 30, 2020 the Company had no cash equivalents.

As of October 31, 2020 and April 30, 2020 the Company had no cash equivalents.

Our liquidity needs have typically arisen from the funding of our research and development programs and the launch of new products, working capital requirements, and other strategic initiatives.

In the past, we have met these cash requirements through our cash, working capital management, proceeds from certain private placements and public offerings of our securities, and sales of products and services.

For the three months ended July 31, 2020 , the Company had net income of approximately $75,000 and cash used in operations of $715,000 .

As of July 31, 2020 , the Company had an accumulated deficit of approximately $72.6 million , working capital of $1.3 million and cash of $6.9 million .

We believe that our cash on hand, together with expected net positive cash used in operations for fiscal year 2021, are adequate to fund operations through at least 12 months from the filing of this 10-Q.

For the six months ended October 31, 2020, the Company had net income of approximately $ 76,000 and cash provided by operations of $ 164,000 .

As of October 31, 2020, the Company had an accumulated deficit of approximately $ 72.6 million, working capital of $ 2.2 million and cash of $ 8.6 million.

We believe that our cash on hand, together with expected net positive cash provided by operations for fiscal year 2021, are adequate to fund operations through at least 12 months from the filing of this 10-Q.

However, should our revenue expectations not materialize, we believe we have cost reduction strategies that could be implemented without disrupting the business or restructuring the Company.

10 unchanged sentences

Three Months Ended

Basic and diluted net (loss) income per share computation (dollars in thousands):

October 31, Six Months Ended October 31,

2020 2019 2020 2019

Basic and diluted net income (loss) per share computation (dollars in thousands):

Net income (loss) attributable to common stockholders $ 1 $ 307 $ 76 $ ( 334 )

3 unchanged sentences

Net income (loss) attributable to common stockholders $ 1 $ 307 $ 76 $ ( 334 )

Income (loss) available to common stockholders

Net income (loss) available to common stockholders $ 1 $ 307 $ 76 $ ( 334 )

Weighted Average common shares 13,064,191 11,619,686 12,811,921 11,619,569

2 unchanged sentences

Diluted net income (loss) per share $ — $ 0.02 $ 0.01 $ ( 0.03 )

The following table reflects the total potential share-based instruments outstanding at July 31, 2020 and 2019 that could have an effect on the future computation of dilution per common share, had their effect not been anti-dilutive:

The following table reflects the total potential share-based instruments outstanding at October 31, 2020 and 2019 that could have an effect on the future computation of dilution per common share, had their effect not been anti-dilutive:

Stock options 1,651,478 2,453,874

Warrants — 1,669,773

Total common stock equivalents 1,651,478 4,123,647

4 unchanged sentences

Changes in valuation allowances from period to period are included in the tax provision in the period of change.

As of July 31, 2020 and April 30, 2020 , the Company provided a valuation allowance for all net deferred tax assets, as recovery is not more likely than not based on an insufficient history of earnings.

As of October 31, 2020 and April 30, 2020, the Company provided a valuation allowance for all net deferred tax assets, as recovery is not more likely than not based on an insufficient history of earnings.

Tax positions are positions taken in a previously filed tax return or positions expected to be taken in a future tax return that are reflected in measuring current or deferred income tax assets and liabilities reported in the consolidated financial statements.

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The Company reflects tax benefits only if it is more likely than not that the 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 recorded $178,000 and $178,000 of liabilities related to uncertain tax positions relative to one of its foreign operations as of July 31, 2020 and April 30, 2020 , respectively.

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 recorded $ 180,000 and $ 178,000 of liabilities related to uncertain tax positions relative to one of its foreign operations as of October 31, 2020 and April 30, 2020, respectively.

The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense.

The Company had no accrual for interest or penalties on the Company’s balance sheets at July 31, 2020 and April 30, 2020 , and has not recognized interest and/or penalties in the statement of operations for either period.

The Company had no accrual for interest or penalties on the Company’s balance sheets at October 31, 2020 and April 30, 2020, and has not recognized interest and/or penalties in the statement of operations for either period.

We do not anticipate any significant unrecognized tax benefits will be recorded during the next 12 months.

The provision for income taxes for the three months ended July 31, 2020 and 2019 was $13,000 and $15,000 , respectively, mainly attributable to taxable income earned in Israel.

The provision for income taxes for the three months ended October 31, 2020 and 2019 was $ 15,000 and $ 11,000 , respectively, and for the six months ended October 31, 2020 and 2019 was $ 28,000 and $ 26,000 , respectively.

These amounts are mainly attributable to taxable income earned in Israel.

Revenue Recognition

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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.

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.

Accounting Pronouncements Being Evaluated

In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, Simplifying the Accounting for Income Taxes.

In October 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-10, Codification Improvements.

The purpose of the ASU is to clarify, correct errors in, or make minor improvements to a variety of ASC topics.

The changes in ASU 2020-03 are not expected to have a significant effect on the Company's current accounting practices.

The ASU improves various topics in the Codification to increase stakeholder awareness of the amendments and to expedite the improvement process by making the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications.

The ASU is effective for fiscal years beginning after December 15, 2020 with early application permitted.

We are currently assessing the impact of this update on our consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes.

The ASU enhances and simplifies various aspects of the income tax accounting guidance in ASC Topic 740 and removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods.

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This ASU expands the scope of Topic 718, Compensation—Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services.

Under the new guidance, the existing employee guidance will apply to nonemployee share based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost.

Under the new guidance, the existing employee guidance will apply to nonemployee share

based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost.

The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services.

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

July 31, 2020

April 30, 2020

October 31, 2020 April 30, 2020

Accounts receivable $ 3,249 $ 2,655

4 unchanged sentences

Deferred revenue was as follows (in thousands):

July 31, 2020

April 30, 2020

October 31, 2020 April 30, 2020

Deferred revenue $ 6,188 $ 5,815

16 unchanged sentences

This variable consideration is generally awarded upon achievement of certain performance metrics.

For the purposes of revenue recognition, variable consideration is assessed on a contract-by-contract basis and the amount to be recorded is estimated based on the assessment of the Company's anticipated performance and consideration of all information that is reasonably available.

purposes of revenue recognition, variable consideration is assessed on a contract-by-contract basis and the amount to be recorded is estimated based on the assessment of the Company's anticipated performance and consideration of all information that is reasonably available.

Variable consideration is recognized as revenue if and when it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved in the future.

5 unchanged sentences

The Company does not consider these services part of their core product offerings.

The following tables represents disaggregated revenue for the three months ended July 31, 2020 and 2019 :

The following tables represents disaggregated revenue for the three and six months ended October 31, 2020 and 2019:

Three Months Ended

October 31, Six Months Ended October 31,

2020 2019 2020 2019

Pharmacology services $ 10,041 $ 7,358 $ 19,454 $ 13,888

Personalized oncology services 37 232 150 412

Other 39 35 60 62

Total oncology services revenue $ 10,117 $ 7,625 $ 19,664 $ 14,362

5 unchanged sentences

Contract assets and liabilities are presented on the balance sheet on a net contract-by-contract basis at the end of each reporting period.

There were no material contract assets or liabilities recorded on the condensed consolidated balance sheets as of July 31, 2020 and April 30, 2020.

There were no material contract assets or liabilities recorded on the condensed consolidated balance sheets as of October 31, 2020 and April 30, 2020.

Property and Equipment

2 unchanged sentences

Property and equipment consisted of the following (table in thousands):

2020 April 30,

Furniture and fixtures $ 238 $ 180

6 unchanged sentences

Property and equipment, net $ 4,872 $ 3,993

Depreciation and amortization expense, excluding expense recorded under the finance lease, was $224,000 and $145,000 for the three months ended July 31, 2020 and 2019 , respectively.

As of July 31, 2020 and April 30, 2020 , property, plant and equipment included gross assets held under finance leases of $343,000 and $366,000 , respectively.

Related depreciation expense was approximately $53,000 and $37,000 for the three months ended July 31, 2020 and 2019 .

Depreciation and amortization expense, excluding expense recorded under the finance lease, was $ 254,000 and $ 162,000 for the three months ended October 31, 2020 and 2019, respectively.

Depreciation and amortization expense, excluding expense recorded under the finance lease, was $ 478,000 and $ 307,000 for the six months ended October 31, 2020 and 2019, respectively.

As of October 31, 2020 and April 30, 2020, property, plant and equipment included gross assets held under finance leases of $ 343,000 and $ 366,000 , respectively.

Related depreciation expense was approximately $ 53,000 and $ 16,000 for the three months ended October 31, 2020 and 2019 and $ 106,000 and $ 53,000 for the six months ended October 31, 2020 and 2019, respectively.

Finance Lease

2 unchanged sentences

The final lease payment under this finance lease of $ 2,000 was paid during the three months ended January 31, 2020.

As of July 31, 2020 the asset has been fully depreciated and book value is nil.

As of October 31, 2020 the asset has been fully depreciated and book value is nil.

In July 2018, the Company entered into a second finance lease for laboratory equipment.

The lease had total costs of approximately $266,000 , inclusive of interest and taxes, with a monthly payment of approximately $11,000 .

Although the lease

was originally due to mature in July 2020, the Company decided to pay the outstanding balance on February 1, 2019.

As a result, the entire outstanding balance of the lease was nil as of July 31, 2019.

The lease had costs of approximately $ 266,000 , inclusive of interest and taxes, with a monthly payment of approximately $ 11,000 .

Although the lease was originally due to mature in July 2020, the Company decided to pay the outstanding balance on February 1, 2019.

As a result, the entire outstanding balance of the lease was nil for periods subsequent to that date.

In December 2019, the Company entered into a finance lease for laboratory equipment.

The lease has costs of approximately $231,000 , at inception, through November 2020.

The lease had costs of approximately $ 231,000 , at inception, through November 2020.

This lease expires December 2020.

The current monthly finance lease payment is approximately $ 19,000 .

The future minimum lease payments remaining under this finance lease are $77,000 .

The future minimum lease payments remaining under this finance lease are approximately $ 19,000 .

The present value of minimum future obligations is calculated based on interest rate of 4.75 %.

Depreciation and amortization expense related to this finance lease was $53,100 for the three months ended July 31, 2020.

Depreciation and amortization expense related to this finance lease was $ 53,100 and nil for the three months ended October 31, 2020 and 2019, respectively, and $ 106,000 and nil for the six months ended October 31, 2020 and 2019, respectively.

Share-Based Payments

6 unchanged sentences

Three Months Ended

October 31, Six Months Ended

2020 2019 2020 2019

General and administrative $ 10 $ 39 $ 57 $ 171

4 unchanged sentences

Stock Option Grants

Black-Scholes assumptions used to calculate the fair value of options granted during the three months ended July 31, 2020 and 2019 were as follows:

Black-Scholes assumptions used to calculate the fair value of options granted during the three and six months ended October 31, 2020 and 2019 were as follows:

Three Months Ended

October 31, Six Months Ended

2020 2019 2020 2019

Expected term in years 6 6 6 6

Risk-free interest rates 0.27 % 1.57 % 0.27 %- 0.39 %

Volatility 72.83 % 71.11 % 72.64 %- 72.83 %

Dividend yield — % — % — % — %

The weighted average fair value of stock options granted during the three months ended July 31, 2020 was $9.85 .

There was no stock options granted during the three months ended July 31, 2019.

The Company’s stock options activity for the three months ended July 31, 2020 was a s follows:

The weighted average fair value of stock options granted during the three months ended October 31, 2020 and 2019 was $ 7.05 and $ 3.32 , respectively, and $ 7.29 and $ 3.32 for the six months ended October 31, 2020 and 2019, respectively.

The Company’s stock options activity for the six months ended October 31, 2020 was a s follows:

Employees Non-

Employees Total Weighted

Price Weighted

Life (Years) Aggregate

Outstanding, April 30, 2020 2,228,326 43,332 2,271,658 $ 3.23 5.0 $ 10,663,000

Outstanding, July 31, 2020

Vested and expected to vest as of July 31, 2020

Exercisable as of July 31, 2020

Granted 60,000 — 60,000 7.29 9.84

Exercised ( 640,657 ) ( 1,160 ) ( 641,817 ) 2.24

Forfeited ( 5,500 ) — ( 5,500 ) 6.76

Canceled ( 26,106 ) ( 923 ) ( 27,029 ) 4.00

Expired — ( 5,834 ) ( 5,834 ) 10.80

Outstanding, October 31, 2020 1,616,063 35,415 1,651,478 3.71 5.83 $ 8,641,000

Vested and expected to vest as of October 31, 2020 1,616,063 35,415 1,651,478 3.71 5.83 $ 8,641,000

Exercisable as of October 31, 2020 1,303,396 9,584 1,312,980 3.15 5.12 $ 7,660,000

The Company accounts for its leases under ASU 2016-02, "Leases", Topic 842.

2 unchanged sentences

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 expenses totaled $307,000 and $239,000 for the three months ended July 31, 2020 and 2019, respectively.

Rent expenses totaled $ 629,000 and $ 477,000 for the six months ended October 31, 2020 and 2019, respectively.

For the three months ended October 31, 2020 and 2019, rent expenses totaled $ 314,000 and $ 239,000 , respectively.

The Company considers its facilities adequate for its current operational needs.

2 unchanged sentences

The lease expires in November 2021.

The Company recognized $20,000 and $24,000 of rental costs relative to this lease for the three months ended July 31, 2020 and 2019, respectively.

The Company recognized $ 44,000 and $ 47,000 of rental costs relative to this lease for the six months ended October 31, 2020 and 2019, respectively, and $ 24,000 for each the three months ended October 31, 2020 and 2019.

• 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.

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◦ Upon the Expansion Premises operating lease commencement date (June 1, 2020), the Company recognized an operating ROU asset and related operating lease liability for Suites 050 and 104 of $ 3.8 million, each, respectively.

For the leases related to Piccard Drive, the Company recognized $244,000 and $151,000 of rental expense for the three months ended July 31, 2020 and 2019.

◦ For the leases related to Piccard Drive, the Company recognized $ 534,000 and $ 302,000 of rental expense for the six months ended October 31, 2020 and 2019, and $ 290,000 and $ 151,000 for the three months ended October 31, 2020 and 2019, respectively.

• 1405 Research Boulevard, Suite 125, Rockville, Maryland 20850 (“New Location”), which consists of laboratory and office space where the Company conducted operations related to its primary service offerings.

2 unchanged sentences

This lease was set to expire in April 2024.

The Company recognized $43,000 and $64,000 of rental expense for the three months ended July 31, 2020 and 2019, respectively.

The Company terminated this lease on June 30, 2020 and transitioned its activities from this location to the Expansion Premises, as defined above, during the first quarter of fiscal 2021.

Upon lease termination, the Company recognized a decrease in the related operating ROU asset and operating lease liability of approximately $ 850,000 and $ 926,000 , respectively, as well as a gain on lease termination of $ 76,000 .

The Company also recognized $ 43,000 and $ 128,000 of rental expense for the six months ended October 31, 2020 and 2019, and zero and $ 64,000 for the three months ended October 31, 2020 and 2019, respectively.

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

July 31, 2020

July 31, 2019

October 31, 2020 April 30, 2020

Operating lease right-of-use assets, net

$ 5,527 $ 2,798

Current portion of operating lease liabilities

Non-current portion of operating lease liabilities 5,932 3,170

As of July 31, 2020, the weighted average remaining operating lease term and the weighted average discount rate were 8.42 years and 6.10% , respectively.

As of October 31, 2020, the weighted average remaining operating lease term and the weighted average discount rate were 8.20 years and 6.08 %, respectively.

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

Remainder of 2021 $ 850

Thereafter 7,268

Total $ 15,498

Refer to Note 5, Property and Equipment, for more information on financing leases.

3 unchanged sentences

Consulting Services

During the three months ended July 31, 2020 and 2019 , the Company paid an affiliate of a board member $ 18,000 for consulting services unrelated to his duty as a board member.

During the three months ended July 31, 2020 and 2019 , the Company paid an affiliate of another board member $ 5,600 and 15,200 , respectively, for consulting services unrelated to their duties as a board member.

As of July 31, 2020 , $ 7,400 was due to these related parties.

During the three months ended October 31, 2020 and 2019, the Company paid an affiliate of a board member $ 15,000 and $ 18,000 , respectively, for consulting services unrelated to his duty as a board member.

During the three months ended October 31, 2020 and 2019, the Company paid an affiliate of another board member $ 3,900 and $ 14,000 , respectively, for consulting services unrelated to their duties as a board member.

During the six months ended October 31, 2020 and 2019, the Company paid an affiliate of a board member $ 33,000 and $ 36,000 for consulting services unrelated to his duty as a board member.

During the six months ended October 31, 2020 and 2019, the Company paid an affiliate of another board member $ 9,500 and $ 29,000 , respectively, for consulting services unrelated to their duties as a board member.

As of October 31, 2020, $ 4,000 was due to these related parties.

Commitments and Contingencies

1 unchanged sentence

In December 2019, a novel strain of coronavirus, COVID-19, was first identified in Wuhan, China.

This virus continues to spread globally and, as of July 2020, has spread to over 200 countries, including the United States.

This virus continues to spread globally and, as of December 2020, has spread to over 200 countries, including the United States.

The spread of COVID-19 from China to other countries has resulted in the World Health Organization declaring the outbreak of COVID-19 as a “pandemic,” or a worldwide spread of a new disease, on March 11, 2020.

Many countries around the world have imposed quarantines and restrictions

on travel and mass gatherings to slow the spread of the virus.

Many countries around the world have imposed quarantines and restrictions on travel and mass gatherings to slow the spread of the virus.

Employers are also required to increase, as much as possible, the capacity and arrangement for employees to work remotely.

1 unchanged sentence

Although, to date, these restrictions have not impacted our operations, the effect on our business, from the spread of COVID-19 and the actions implemented by the governments of the United States and elsewhere across the globe, may worsen over time.

We continue to monitor our operations and applicable government recommendations and requirements.

Any outbreak of contagious diseases, or other adverse public health developments, could have a material and adverse effect on our business operations.

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However, as of the date of this Form 10-Q, we have not experienced a material adverse effect on our business nor the need for reduction in our work force;

and, currently, and we do not expect any material impact on our long-term activity.

and, currently, and we do

not expect any material impact on our long-term activity.

The extent to which COVID-19 impacts our business will depend on future developments which are highly uncertain and cannot be predicted, including, but not limited to, new information which may emerge concerning the increased severity of COVID-19, the actions to contain COVID-19, or treat its impact.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements