What changed in this filing

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Item 1. Financial Statements

2021-03-15 compared with 2020-12-14 · 113 added, 93 removed, 389 unchanged (35% of the section changed)

28 unchanged sentences

200,000,000 shares authorized;

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

13,390,172 and 12,726,728 shares issued and outstanding as of January 31, 2021 and April 30, 2020, respectively

Additional paid-in capital 79,711 77,978

7 unchanged sentences

Three Months Ended

October 31, Six Months Ended

January 31, Nine Months Ended

2021 2020 2021 2020

6 unchanged sentences

Total costs and operating expenses 10,049 8,579 29,681 23,266

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

Other income 9 27 73 15

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

Income from operations 763 433 795 109

Other income (expense) ( 8 ) ( 14 ) 64 1

Income before provision for income taxes 755 419 859 110

Provision for income taxes 15 12 43 38

Net income (loss) $ 1 $ 307 $ 76 $ ( 334 )

Net income (loss) per common share outstanding

Net income $ 740 $ 407 $ 816 $ 72

Net income per common share outstanding

basic $ 0.06 $ 0.03 $ 0.06 $ 0.01

21 unchanged sentences

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

Stock-based compensation — — 232 — 232

Issuance of common stock on exercise of stock options 21,627 — 2 — 2

Net income — — — 740 740

Balance January 31, 2021 13,390,172 $ 13 $ 79,711 $ ( 71,857 ) $ 7,867

Common Stock Additional

11 unchanged sentences

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

Stock-based compensation — — 229 — 229

Issuance of common stock on exercise of stock options and warrants 203,111 — 427 — 427

Net income — — — 407 407

Balance January 31, 2020 11,823,274 $ 12 $ 73,790 $ ( 70,625 ) $ 3,177

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

2 unchanged sentences

(Dollars in Thousands)

Six Months Ended

Nine Months Ended

Operating activities:

Net income (loss) $ 76 $ ( 334 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 816 $ 72

Adjustments to reconcile net income to net cash provided by operating activities:

Stock-based compensation 437 437

20 unchanged sentences

Finance lease payments ( 173 ) ( 51 )

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

Net cash provided by financing activities 1,123 378

Increase (decrease) in cash ( 913 ) 45

10 unchanged sentences

Champions Oncology, Inc.

(the “Company”) is engaged in an end-to-end range of research and development technology solutions and services to improve the development and use of oncology drugs.

(the “Company”) is engaged in transforming drug discovery and development through data-driven research strategies and innovative pharmacology, biomarker and data platforms.

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.

4 unchanged sentences

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

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

For the three and nine months ended January 31, 2021 and 2020, there were no revenues earned by these subsidiaries.

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

12 unchanged sentences

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

As of January 31, 2021 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 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.

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

For the nine months ended January 31, 2021, the Company had net income of approximately $ 816,000 and cash provided by operations of $ 299,000 .

As of January 31, 2021, the Company had an accumulated deficit of approximately $ 71.9 million, working capital of $ 2.6 million and cash of $ 7.4 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.

3 unchanged sentences

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 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 commencement date in determining the present value of lease payments.

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.

5 unchanged sentences

Three Months Ended

October 31, Six Months Ended October 31,

January 31, Nine Months Ended January 31,

2021 2020 2021 2020

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

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

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

Net income attributable to common stockholders $ 740 $ 407 $ 816 $ 72

Weighted Average common shares – basic 13,371,613 11,752,619 12,974,470 11,653,115

Basic net income (loss) per share $ — $ 0.03 $ 0.01 $ ( 0.03 )

Diluted income (loss) per share computation:

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

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

Basic net income per share $ 0.06 $ 0.03 $ 0.06 $ 0.01

Diluted income per share computation:

Net income attributable to common stockholders $ 740 $ 407 $ 816 $ 72

Net income available to common stockholders $ 740 $ 407 $ 816 $ 72

Weighted Average common shares 13,371,613 11,752,619 12,974,470 11,653,115

1 unchanged sentence

Adjusted weighted average share – diluted 14,507,155 13,673,672 14,510,280 13,440,861

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

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:

Diluted net income per share $ 0.05 $ 0.03 $ 0.06 $ 0.01

The following table reflects the total potential share-based instruments outstanding at January 31, 2021 and 2020 that could have an effect on the future computation of dilution per common share, had their effect not been anti-dilutive:

Stock options 1,693,312 2,366,598

6 unchanged sentences

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

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.

As of January 31, 2021 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.

4 unchanged sentences

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 $ 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.

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 $ 181,000 and $ 178,000 of liabilities related to uncertain tax positions relative to one of its foreign operations as of January 31, 2021 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 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 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.

The Company recognized approximately $ 3,000 for interest and penalties on the Company’s balance sheets as of January 31, 2021, and recognized approximately $ 3,000 of interest and penalties in the statement of operations for the nine months ended January 31, 2021.

Other than approximately $ 4,500 for interest and penalties, the Company does not anticipate additional unrecognized tax benefits will be recorded during the next 12 months.

The provision for income taxes for the three months ended January 31, 2021 and 2020 was $ 15,000 and $ 12,000 , respectively, and for the nine months ended January 31, 2021 and 2020 was $ 43,000 and $ 38,000 , respectively.

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

Revenue Recognition

5 unchanged sentences

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.

Pharmacology Study, POS Services and Other Services

Pharmacology Study and Other Services

The Company generally enters into contracts with customers to provide oncology services with payments based on fixed-fee arrangements.

24 unchanged sentences

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.

We are currently assessing the impact of this update on our consolidated financial statements and do not anticipate a significant impact.

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

2 unchanged sentences

This ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years with early adoption permitted.

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

We are currently assessing the impact of this update on our consolidated financial statements and do not anticipate a significant impact.

In June 2016, the FASB issued ASU No.

5 unchanged sentences

Early adoption is permitted.

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

We are currently assessing the impact of this update on our consolidated financial statements and do not anticipate a significant impact.

Recently Adopted Accounting Pronouncements

18 unchanged sentences

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.

7 unchanged sentences

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

October 31, 2020 April 30, 2020

January 31, 2021 April 30, 2020

Accounts receivable $ 3,333 $ 2,655

4 unchanged sentences

Deferred revenue was as follows (in thousands):

October 31, 2020 April 30, 2020

January 31, 2021 April 30, 2020

Deferred revenue $ 6,615 $ 5,815

16 unchanged sentences

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

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.

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.

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 and six months ended October 31, 2020 and 2019:

The following tables represents disaggregated revenue for the three and nine months ended January 31, 2021 and 2020:

Three Months Ended

October 31, Six Months Ended October 31,

January 31, Nine Months Ended January 31,

2021 2020 2021 2020

9 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 October 31, 2020 and April 30, 2020.

There were no material contract assets or liabilities recorded on the condensed consolidated balance sheets as of January 31, 2021 and April 30, 2020.

Property and Equipment

11 unchanged sentences

Property and equipment, net $ 5,540 $ 3,993

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.

Depreciation and amortization expense, excluding expense recorded under the finance lease, was $ 279,000 and $ 184,000 for the three months ended January 31, 2021 and 2020, respectively.

Depreciation and amortization expense, excluding expense recorded under the finance lease, was $ 757,000 and $ 491,000 for the nine months ended January 31, 2021 and 2020, respectively.

As of January 31, 2021 and April 30, 2020, property, plant and equipment included gross assets held under finance leases of $ 343,000 .

Related depreciation expense was approximately $ 18,000 and $ 35,000 for the three months ended January 31, 2021 and 2020, respectively, and $ 124,000 and $ 88,000 for the nine months ended January 31, 2021 and 2020, 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 October 31, 2020 the asset has been fully depreciated and book value is nil.

As of January 31, 2021 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.

2 unchanged sentences

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

During the quarter ended October 31, 2019, the Company traded in this asset and received a $ 160,000 reduction in the purchase price of two newly acquired assets.

The net book value of the asset traded in at the time of trade in was $ 108,000 , resulting in a gain on the disposal of the asset of $ 53,000 , which was included as an offset in the other expense line within the Company's consolidated statement of operations for the nine months ended January 31, 2020.

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

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 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 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.

The lease term expired December 2020.

Depreciation and amortization expense related to this finance lease was $ 18,000 and $ 35,000 for the three months ended January 31, 2021 and 2020, respectively, and $ 124,000 and $ 35,000 for the nine months ended January 31, 2021 and 2020, respectively.

Share-Based Payments

6 unchanged sentences

Three Months Ended

October 31, Six Months Ended

January 31, Nine Months Ended

2021 2020 2021 2020

5 unchanged sentences

Stock Option Grants

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:

Black-Scholes assumptions used to calculate the fair value of options granted during the three and nine months ended January 31, 2021 and 2020 were as follows:

Three Months Ended

October 31, Six Months Ended

January 31, Nine Months Ended

2021 2020 2021 2020

1 unchanged sentence

Risk-free interest rates 0.12 %

1.57 %- 1.80 %

0.12 %- 0.39 %

1.57 %- 1.80 %

Volatility 74.98 %

69.14 %- 70.99 %

72.64 %- 74.98 %

69.14 %- 71.11 %

Dividend yield — % — % — % — %

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:

The weighted average fair value of stock options granted during the three months ended January 31, 2021 and 2020 was $ 5.80 and $ 2.56 , respectively, and $ 5.08 and $ 3.09 for the nine months ended January 31, 2021 and 2020, respectively.

The Company’s stock options activity for the nine months ended January 31, 2021 was a s follows:

Employees Non-

8 unchanged sentences

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

Outstanding, January 31, 2021 1,657,896 35,416 1,693,312 4.02 5.66 $ 11,975,000

Vested and expected to vest as of January 31, 2021 1,657,896 35,416 1,693,312 4.02 5.66 $ 11,975,000

Exercisable as of January 31, 2021 1,289,104 9,584 1,298,688 3.25 4.93 $ 10,173,000

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 $ 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.

Rent expenses totaled $ 941,000 and $ 717,000 for the nine months ended January 31, 2021 and 2020, respectively.

For the three months ended January 31, 2021 and 2020, rent expenses totaled $ 312,000 and $ 240,000 , respectively.

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

2 unchanged sentences

The lease expires in November 2021.

The Company recognized $ 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.

The Company recognized $ 67,000 and $ 71,000 of rental costs relative to this lease for the nine months ended January 31, 2021 and 2020, respectively, and $ 24,000 for each the three months ended January 31, 2021 and 2020.

• 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 this lease on January 11, 2017.

The Company executed this lease (the "Original Premises") on January 11, 2017.

The operating commencement date was August 11, 2017.

7 unchanged sentences

◦ 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 $ 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.

◦ For the leases related to the Original and Expansion Premises at Piccard Drive, the Company recognized $ 823,000 and $ 454,000 of rental expense for the nine months ended January 31, 2021 and 2020, and $ 288,000 and $ 152,000 for the three months ended January 31, 2021 and 2020, respectively.

◦ On December 22, 2020, the Company executed the second amendment to this lease to expand the existing premises at 1330 Piccard Drive, Suites 025, 050, and 104 ("Additional Expansion Premises") to add on Suite 201.

The Additional Expansion Premises operating lease commencement date is April 1, 2021 and, under the second amendment, reaffirms that all three leases expire February 28, 2029.

The Company did not recognize any rental expense under this lease for the three and nine month periods ended January 31, 2021 as the lease commencement date is subsequent to this time period.

◦ Upon the Additional Expansion Premises operating lease commencement date (April 1, 2021), the Company expects to recognize an operating ROU asset and related operating lease liability for Suite 201 of $ 3.3 million, each, respectively.

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

The Company executed this lease on November 1, 2018.

3 unchanged sentences

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.

The Company also recognized $ 43,000 and $ 193,000 of rental expense for the nine months ended January 31, 2021 and 2020, and zero and $ 64,000 for the three months ended January 31, 2021 and 2020, respectively.

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

October 31, 2020 April 30, 2020

January 31, 2021 April 30, 2020

Operating lease right-of-use assets, net

2 unchanged sentences

Non-current portion of operating lease liabilities 5,798 3,170

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.

As of January 31, 2021, the weighted average remaining operating lease term and the weighted average discount rate were 7.98 years and 6.07 %, respectively.

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

7 unchanged sentences

Consulting Services

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.

During the three months ended January 31, 2021 and 2020, the Company paid an affiliate of a board member $ 12,000 and $ 18,000 , respectively, for consulting services unrelated to his duty as a board member.

During the three months ended January 31, 2021 and 2020, the Company paid an affiliate of another board member $ 3,900 and $ 10,100 , respectively, for consulting services unrelated to their duties as a board member.

During the nine months ended January 31, 2021 and 2020, the Company paid an affiliate of a board member $ 45,000 and $ 54,000 for consulting services unrelated to his duty as a board member.

During the nine months ended January 31, 2021 and 2020, the Company paid an affiliate of another board member $ 13,400 and $ 39,100 , respectively, for consulting services unrelated to their duties as a board member.

As of January 31, 2021, $ 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 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.

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

In addition, on March 11, 2020, the President of the United States issued a proclamation to restrict travel to the United States from foreign nationals who have recently been in certain European and Latin American countries.

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.

These could include disruptions or restrictions on our ability to travel, pursue partnerships and other business transactions, receive shipments of biologic materials, as well as be impacted by the temporary closure of the facilities of suppliers.

The spread of an infectious disease, including COVID-19, may also result in the inability of our suppliers to deliver supplies to us on a timely basis.

The global spread of COVID-19 from China to other countries 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, including the United States, subsequently imposed various degrees of restrictions and other measures, including but not limited to, mandatory temporary closures, quarantine and shelter in place guidelines, and restrictions on mass gatherings and on travel in an effort to slow and/or reduce the spread of the virus.

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

While the COVID-19 pandemic has continued to evolve and remains highly unpredictable and dynamic in its duration and severity, many of these previously imposed restrictions and other measures have now been eased and/or lifted, while governments continue to monitor active cases and the health and safety of their citizens.

The spread of COVID-19 and the related actions implemented by the governments of the United States and elsewhere across the globe, may worsen again over time.

Thus, the COVID-19 pandemic may continue to have a negative impact on the US and Global economies for the foreseeable future.

Although, to date, these restrictions and the affect on the Global economy have not materially impacted the

Company's operations, the future effect on its business will largely depend on future developments which are highly uncertain and cannot be predicted at this time.

The Company continues to monitor its 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 the Company's business operations.

These could include disruptions or restrictions on the Company's ability to travel, pursue partnerships and other business transactions, receive shipments of biologic materials, as well as an impact by the temporary closure of the facilities of its suppliers.

The spread of an infectious disease, including COVID-19, may also result in the inability of the Company's suppliers to deliver supplies to them on a timely basis.

In addition, health professionals may reduce staffing and reduce or postpone meetings with clients in response to the spread of an infectious disease.

Though we have not yet experienced such events, if they would occur, they could result in a period of business disruption, and in reduced operations, any of which could materially affect our business, financial condition and results of operations.

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.

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.

Though the Company has not yet experienced such events related to COVID-19, if they would occur, they could result in a period of business disruption, and in reduced operations, any of which could materially affect its business, financial condition and results of operations.

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

and, currently, and it does not expect any material impact on its long-term activity.

As noted, the extent to which COVID-19 impacts the Company's 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 the COVID-19 virus, the actions to contain COVID-19, or treat its impact.

Legal Matters

2 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