What changed in this filing

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Item 1A. Risk Factors

2022-07-22 compared with 2021-07-26 · 43 added, 50 removed, 207 unchanged (31% of the section changed)

3 unchanged sentences

We historically incurred losses from operating activities, may require significant capital and may never achieve sustained profitability.

For the years ended April 30, 2021 and 2020, the Company had net income of approximately $362,000 and a net loss of approximately $2,093,000, respectively.

For the years ended April 30, 2022 and 2021, the Company had net income of approximately $548,000 and $362,000, respectively.

As of April 30, 2022, the Company has an accumulated deficit of approximately $72.0 million.

As of April 30, 2022, we had working capital of $2.2 million and cash of $9.0 million.

We believe that our cash on hand, together with future improved cash flows from operations, are adequate to fund our operations through at least August 2022.

We believe that our cash on hand, together with expected cash flows from operations, are adequate to fund our operations through at least August 2023.

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

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To become sustainably profitable, we will need to generate revenues to offset our operating costs, including our research and development and general and administrative expenses.

We may not achieve or, if achieved, sustain our revenue or profit objectives.

If our losses increase in the future and we are unable to obtain sufficient capital either from operations or externals sources, ultimately, we may have to cease operations.

We may not achieve or sustain our revenue or profit objectives.

If we incur losses in the future and/or we are unable to obtain sufficient capital either from operations or externals sources, ultimately, we may have to cease operations.

In order to grow revenues, we must invest capital to implement our sales and marketing efforts and to successfully develop our technology platforms.

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Our inability to obtain or maintain any or all these factors could impair our ability to implement our business strategies successfully, which could have material adverse effects on our results of operations and financial condition.

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

The FDA has claimed regulatory authority over all laboratory-developed tests, or LDTs, such as our POS services, but has generally not exercised its regulatory authority for most LDTs performed by CLIA-certified laboratories such as our facilities.

The FDA has announced several regulatory and guidance initiatives that may impact our business, including by increasing FDA’s regulation of LDTs.

On July 31, 2014 the FDA notified Congress of the FDA’s intent to issue a draft oversight framework for LDTs based on risk to patients rather than whether they were made by a conventional manufacturer or a single laboratory.

This draft oversight framework includes pre-market review for higher-risk LDTs, like those used to guide treatment decisions, including the many companion diagnostics that have entered the market as LDTs.

In addition, under the draft framework, the FDA would continue

to exercise enforcement discretion for low-risk LDTs and LDTs for rare diseases, among others.

The framework would be phased in over many years.

In January 2017, FDA summarized comments it had received on the 2014 draft guidance in a discussion paper which noted that it would not be issuing a final guidance on oversight of LDTs for the time being.

Final guidance on the framework has not since been issued by FDA although various legislative approaches to regulation over LDTs remain in discussion.

If this framework or one similar to it is implemented, these initiatives may lead to an increased regulatory burden on our Company, which may result in a requirement for FDA review and clearance or approval of our POS services.

Any increased regulatory burdens would probably result in an increase in the cost of our POS services and could keep us from selling POS services until such time as any required FDA clearance or approval is obtained.

If our POS services become subject to FDA’s approval and oversight as medical devices, the additional regulatory burdens may be significant, and may require the addition of experienced medical device quality, regulatory and compliance personnel to assume these burdens.

Any POS services that we provide in other countries may be similarly subject to regulation by foreign regulatory agencies, which would also increase our costs.

These matters could hurt our business and our financial results of business.

Our laboratories are subject to regulation and licensure requirements, and the healthcare industry is highly regulated;

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Such regulation and requirements are subject to change, and may result in additional costs or delays in providing our products to our customers.

In addition, the healthcare industry in general is highly regulated in the United States at both the federal and state levels.

In addition, the healthcare industry in general is highly regulated in the United States at both the federal and state

We seek to conduct our business in compliance with all applicable laws, but many of the laws and regulations potentially applicable to us are vague or unclear.

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This may be difficult in the healthcare industry where competition for skilled personnel is intense.

We have identified that there is a material weaknesses in our internal control over financial reporting, which if not remediated, could materially adversely affect our ability to timely and accurately report our results of operations and financial condition.

This material weakness has not been fully remediated as of the filing date of this Form 10-K.

fail to maintain an effective system of internal controls, the accuracy and timing of our financial reporting may be adversely affected.

As described in “Part II, Item 9A - Controls and Procedures,” of this Form 10-K we have concluded that there is a material weakness in our internal control over financial reporting.

In fiscal 2021, we identified that there was a material weaknesses in our internal control over financial reporting, which if not remediated, could materially adversely affect our ability to timely and accurately report our results of operations and financial condition.

We believe this material weakness has since been remediated as of the filing date of this Form 10-K.

If we fail to maintain an effective system of internal controls, the accuracy and timing of our financial reporting may be adversely affected.

As described in “Part II, Item 9A - Controls and Procedures,” of this Form 10-K we have concluded that there was a material weakness in our internal control over financial reporting in our prior fiscal reporting year.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

It is necessary for us to maintain effective internal control over financial reporting to prevent fraud and errors and to maintain effective disclosure controls and procedures so that we can provide timely and reliable financial and other information.

Specifically, our risk assessment procedures over certain of our contractual arrangements requiring the payment of royalties for the licensing of technology from third-parties did not adequately identify the risks and consider the Company's obligations based on the recognition of oncology services revenue.

As a result, the Company had missing process level controls over the review of royalty arrangements and the timely determination and recognition of related liabilities.

As further described in Part II, Item 9A in this Annual Report on Form 10-K, while we are in the process of implementing a remediation plan to remediate this material weakness, there can be no assurance that this will not occur in future reports.

As further described in Part II, Item 9A in this Annual Report on Form 10-K, while we believe that we have implemented and carried out a remediation plan to remediate this material weakness, there can be no assurance that this will not occur in future reports.

We may identify additional material weaknesses in our internal control over financial reporting in the future.

If we are unable to remediate this material weakness or we identify additional material weaknesses in our internal control over financial reporting in the future, our ability to analyze, record and report financial information accurately, to prepare our financial statements within the time periods specified by the rules.

we are unable to fully remediate this material weakness or we identify additional material weaknesses in our internal control over financial reporting in the future, we may not be able to analyze, record and report financial information accurately, and/or to prepare our financial statements within the time periods specified by the rules.

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

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We rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position.

We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific

collaborators, contract manufacturers, consultants, advisors and other third parties.

We also seek to enter into confidentiality and invention assignment agreements with our employees and consultants.

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Patent applications are maintained in secrecy in the United States and also are maintained in secrecy outside the United States until the application is published.

Accordingly, we can conduct only limited searches to determine whether our technology infringes the patents or patent applications of others.

Accordingly, we can conduct only limited searches to determine whether our technology

infringes the patents or patent applications of others.

Any claims of patent infringement asserted by third parties would be time-consuming and could likely:

3 unchanged sentences

• require us to enter into royalty or licensing agreements.

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

Currently, patients are unable to obtain reimbursement from third party payers for our services.

Furthermore, the continuing efforts of government and insurance companies, health maintenance organizations (“HMOs”) and other payers of healthcare costs to contain or reduce costs of health care could affect our revenues and profitability.

In the U.S., given recent federal and state government initiatives directed at lowering the total cost of health care, the U.S.

Congress and state legislatures will likely continue to focus on health care reform, the cost of prescription pharmaceuticals and on the reform of the Medicare and Medicaid systems.

While we cannot predict whether any such legislative or regulatory proposals will be adopted, the inability to obtain reimbursement from third party payers for our services limits the market acceptance of our services.

As a result, we may not achieve significant revenues.

Our ability to expand our business may depend in part on the extent to which appropriate reimbursement levels for the cost of our proposed formulations and products and related treatments are obtained by governmental authorities, private health insurers and other organizations, such as HMOs.

The trend toward managed health care in the U.S.

and the concurrent growth of organizations such as HMOs, which could control or significantly influence the purchase of health care services and drugs, as well as legislative proposals to reform health care or reduce government insurance programs, may all result in lower prices for or rejection of our services.

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

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We could also face competition from open-source software initiatives, in which developers provide software and intellectual property free over the Internet.

In addition, some of our

customers spend significant internal resources in order to develop their own software.

In addition, some of our customers spend significant internal resources in order to develop their own software.

There can be no assurance that our current or potential competitors will not develop products, services, or technologies that are comparable to, superior to, or render obsolete, the products, services, and technologies we offer.

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For example, we may fail to identify promising product candidates, our product candidates may fail to be safe and effective in preclinical tests or clinical trials, or we may have inadequate financial or other resources to pursue discovery and development efforts for new product candidates.

From time to time, we may establish and announce certain development goals for our product candidates and programs, including.

From time to time, we may establish and announce certain development goals for our product candidates and programs.

However, given the complex nature of the drug discovery and development process, it is difficult to predict accurately if and when we will achieve these goals.

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From time to time, we may establish and announce certain development goals for our product candidates and programs.

However, given the complex nature of the drug discovery and development process, it is difficult to predict accurately if and when we will achieve these goals.

However, given the complex nature of the drug discovery and development process, it is difficult to predict accurately if and

when we will achieve these goals.

If we are unsuccessful in advancing our research and development programs into clinical testing or in obtaining regulatory approval, our long-term business prospects will be harmed.

6 unchanged sentences

Under Section 382 of the Internal Revenue Code of 1986, as amended, referred to as the Internal Revenue Code, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period), the corporation’s ability to use its pre-change net operating loss carry-forwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited.

We believe that our 2016 public offering, taken together with our private placements and other transactions that have occurred over the past five years, may have triggered an “ownership change” limitation.

We believe that our 2016 public offering, taken together with our private placements and other transactions that have occurred since then, may have triggered an “ownership change” limitation.

We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership.

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The statutes have the effect of making it more difficult to effect a change in control of a Delaware company.

Our management and three significant stockholders collectively own a substantial majority of our common stock.

Our management and four significant stockholders collectively own a substantial majority of our common stock.

Collectively, our officers, our directors and three significant stockholders own or exercise voting and investment control of approximately 67% of our outstanding common stock as of July 20, 2022.

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Furthermore, this concentration of voting power could have the effect of delaying, deterring or preventing a change of control or other business combination that might otherwise be beneficial to our stockholders.

This significant concentration of share ownership may also adversely affect the trading price for our common stock because investors may perceive disadvantages in owning stock in a company that is controlled by a small number of stockholders.

This significant concentration of share

ownership may also adversely affect the trading price for our common stock because investors may perceive disadvantages in owning stock in a company that is controlled by a small number of stockholders.

We have not paid any cash dividends in the past and have no plans to issue cash dividends in the future, which could cause the value of our common stock to have a lower value than other similar companies which do pay cash dividends.

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If any analyst who may cover us was to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our common stock or trading volume to decline.

Our business operations could be disrupted if our information technology systems fail to perform adequately.

We rely on information technology networks and systems, including the Internet, to process, transmit, and store information, to manage and support a variety of business processes and activities, and to comply with regulatory, legal, and tax requirements.

Our information technology systems, some of which are dependent on services provided by third parties, may be vulnerable to damage, interruption, or shutdown due to any number of causes outside of our control such as catastrophic events, natural disasters, fires, power outages, systems failures, telecommunications failures, employee error or malfeasance, security breaches, computer viruses or other malicious codes, ransomware, unauthorized access attempts, denial of service attacks, phishing, hacking, and other cyberattacks.

While we have experienced threats to our data and systems, to date, we are not aware that we have experienced a material breach.

Cyberattacks are occurring more frequently, are constantly evolving in nature and are becoming more sophisticated.

Additionally, continued geopolitical turmoil, including the Russia-Ukraine military conflict, has heightened the risk of cyberattacks.

While we attempt to continuously monitor and mitigate against cyber risks, we may incur significant costs in protecting against or remediating cyberattacks or other cyber incidents.

Sophisticated cybersecurity threats pose a potential risk to the security and viability of our information technology systems, as well as the confidentiality, integrity, and availability of the data stored on those systems, including cloud-based platforms.

In addition, new technology that could result in greater operational efficiency may further expose our computer systems to the risk of cyber-attacks.

If we do not allocate and effectively manage the resources necessary to build and sustain the proper technology infrastructure and associated automated and manual control processes, we could be subject to billing and collection errors, business disruptions, or damage resulting from security breaches.

If any of our significant information technology systems suffer severe damage, disruption, or shutdown, and our business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition, and results of operations may be materially and adversely affected, and we could experience delays in reporting our financial results.

In addition, there is a risk of business interruption, violation of data privacy laws and regulations, litigation, and reputational damage from leakage of confidential information.

Any interruption of our information technology systems could have operational, reputational, legal, and financial impacts that may have a material adverse effect on our business.

A pandemic, epidemic, or outbreak of an infectious disease in the United States or elsewhere may adversely affect our business and we are unable to predict the potential impact.

We are subject to risks related to public health crises such as the global pandemic associated with COVID-19.

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

The global spread of COVID-19 from China resulted in the World Health Organization declaring the outbreak a “pandemic,” or a worldwide spread of a new disease, in early 2020.

The global spread of COVID-19 resulted in the World Health Organization declaring the outbreak a “pandemic,” or a worldwide spread of a new disease, in early 2020.

This virus eventually spread world wide to most countries, and to all 50 states within the United States.

In response, most countries around the world imposed quarantines and restrictions on travel and mass gatherings in an effort to contain the spread of the virus.

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

Employers worldwide were also required to increase, as much as possible, the capacity

and arrangement for employees to work remotely.

More recently, many of the restrictions and travel bans have been eased or lifted completely as global society as a whole works to return to pre-pandemic business and personal practices.

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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 the COVID-19 virus, the actions to contain COVID-19, or treat its impact.

Deterioration in general economic conditions in the United States and globally, including the effect of prolonged periods of inflation on our customers and suppliers, could harm our business and results of operations.

Our business and results of operations could be adversely affected by changes in national or global economic conditions.

These conditions include but are not limited to inflation, rising interest rates, availability of capital markets, energy availability and costs (including fuel surcharges), the negative impacts caused by pandemics and public health crises (including the COVID-19 pandemic), negative impacts resulting from the military conflict between Russia and the Ukraine, and the effects of governmental initiatives to manage economic conditions.

Impacts of such conditions could be passed on to our business in the form of a reduced customer base and/or potential for new bookings due to possible reductions in pharmaceutical and biotech industry-wide spend on research and development and/or economic pressure on our suppliers to pass on increased costs.

Unresolved Staff Comments

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-K

Item 1A. Risk Factors