CHAMPIONS ONCOLOGY, INC. 10-K

Item 9A. Controls and Procedures Management's Report on Disclosure Controls and Procedures Our management, under the supervision and with the participation of our Principal Executive Officer (our Chief Executive Officer) and Principal Financial Officer (our Chief Financial Officer), has evaluated the effectiveness of our disclosure controls and procedures as of April 30, 2022, the end of our fiscal year covered by this annual report. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of April 30, 2022, that consider remediation efforts commenced by the Company as a result of the material weakness noted during the assessment of the effectiveness of the Company’s internal controls over financial reporting as of and for the year ended April 30, 2021, our Chief Executive Officer and Chief Financial Officer have concluded that, as of April 30, 2022, our disclosure controls and procedures are effective. Management’s Annual Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. This rule defines internal control over financial reporting as a process designed by, or under the supervision of, Company management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Management has assessed the effectiveness of our internal control over financial reporting using the components established in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. 21 A system of internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A material weakness is any deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our company’s annual or interim financial statements will not be prevented or detected on a timely basis. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was effective as of April 30, 2022, the year covered by this Annual Report. Remediation of Prior Year Material Weakness in Internal Control over Financial Reporting For the year ended April 30, 2021, we identified a material weakness in the consolidated financial statements close process. 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. Although no material misstatements were identified in our consolidated financial statements, these control deficiencies resulted in immaterial misstatements to our previously issued consolidated financial statements which were corrected in the consolidated financial statements included in the Form 10-K for our fiscal year ended April 30, 2021. During fiscal year 2022, the Company’s management designed and implemented certain measures to address the above-described material weakness and enhance the Company’s internal controls which has included enhanced processes and controls such as ensuring adequate identification and review of royalty agreement terms and obligations which have been formalized as of the completion of its third fiscal quarter of fiscal 2022. As part of our remediation measures, the Company has continually monitored its control environment and management has concluded that the remediation plan was implemented, tested, effective, and completed as of April 30, 2022. Changes in Internal Controls Other than the remediation of the prior year material weakness, there were no other changes in the Company’s internal controls over financial reporting during the year ended April 30, 2022, that materially affected, or were reasonably likely to materially affect the Company’s internal control over financial reporting. Item 9B. Other Information None. PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this item will be contained in our 2022 Proxy Statement and such information is incorporated herein by this reference. 22 Item 11. Executive Compensation The information required by this item will be contained in our 2022 Proxy Statement and such information is incorporated herein by this reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this item will be contained in our 2022 Proxy Statement and such information is incorporated herein by this reference. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item will be contained in our 2022 Proxy Statement and such information is incorporated herein by this reference. Item 14. Principal Accounting Fees and Services The information required by this item will be contained in our 2022 Proxy Statement and such information is incorporated herein by this reference. PART IV Item 15. Exhibits, Financial Statement Schedules (a)1. Financial Statements Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets F-3 Consolidated Statements of Operations F-4 Consolidated Statement of Changes in Stockholders' Equity F-5 Consolidated Statements of Cash Flows F-6 Notes to Consolidated Financial Statements F-7 (a)2. Financial Statement Schedules All schedules have been omitted because they are not applicable. (a)3. Exhibits required to be filed by Item 601 of Regulation S-K. Exhibit No . 3.1 Amended and Restated Articles of Incorporation (incorporated by reference to Appendix A to the Company’s Information Statement on Schedule 14C filed March 7, 2011) 3.1.1 Certificate of Amendment to Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3(i) to the Company’s Current Report on Form 8-K filed April 28, 2015) 3.2 Amended and Restated Bylaws, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed May 9, 2017) 4.1 Description of Registered Securities (incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed July 28, 2020) 23 10.1 Employment Agreement, dated November 5, 2013, between the Company and Ronnie Morris, M.D. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed November 12, 2013) 10.2 Amendment to Employment Agreement, dated March 16, 2015, between the Company and Ronnie Morris (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed March 20, 2015) 10.3 Offer letter dated June 3, 2013 between the Company and David Miller (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 3, 2013) 10.4 2010 Equity Incentive Plan (incorporated by reference to Appendix B to the Company’s Definitive Information Statement on Schedule 14C filed March 7, 2011) 10.5 Form of Note Purchase Agreement, dated December 1, 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 5, 2014) 10.6 Form of Convertible Promissory Note, dated December 1, 2014, issued to each of Joel Ackerman and Ronnie Morris in connection with the Note Purchase Agreement, dated December 1, 2014 between the Company and each of Joel Ackerman and Ronnie Morris incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 5, 2014) 10.7 Amendment No. 1 to Convertible Promissory Note, dated December 1, 2014 issued to Joel Ackerman in connection with the Note Purchase Agreement, dated December , 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 2, 2015) 10.8 Amendment No. 1 to Convertible Promissory Note, dated December 1, 2014 issued to Ronnie Morris in connection with the Note Purchase Agreement, dated December , 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 2, 2015) 10.9 Amended and Restated 2011 Securities Purchase Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.10 Form of warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed January 30, 2013) 10.11 Amendment No. 1 to warrants, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.12 Amended and Restated 2013 Securities Purchase Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.13 Form of warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed January 30, 2013) 10.14 Amendment No. 1 to warrants, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.15 Put Right Agreement, dated January 29, 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 6, 2014) 10.16 Securities Purchase Agreement, dated March 11, 2015, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 12, 2015) 24 10.17 Amended and Restated Registration Rights Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to (i) the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto, (ii) the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto, and (iii) the Securities Purchase Agreement, dated March 11, 2015, between the Company. And each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.18 Form of Investor Warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated March 11, 2015, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.19 Option Exchange Agreement, dated March 16, 2015, between the Company and Joel Ackerman (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 20, 2015) 10.20 Option Exchange Agreement, dated March 16, 2015, between the Company and Ronnie Morris (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 20, 2015) 10.21 Option Exchange Agreement, dated March 16, 2015, between the Company and David Miller (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed March 20, 2015) 14 Code of Ethics (incorporated by reference to Exhibit 14 of the April 30, 2008 Form 10-KSB) 21 List of Subsidiaries (incorporated by reference to Exhibit 21 of the Company's Form 10-K filed July 28, 2017) 23.1 Consent of Independent Registered Public Accounting Firm* 31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer* 31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer* 32.1 Section 1350 Certifications** 101.INS* XBRL Instance Document. 101.SCH* XBRL Taxonomy Extension Schema Document. 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document. ___________________________ * Filed herewith ** Furnished hereto. Item 16. Form 10-K Summary Not Required. 25 SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CHAMPIONS ONCOLOGY, INC. July 22, 2022 /s/ RONNIE MORRIS Ronnie Morris Chief Executive Officer (principal executive officer) In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ RONNIE MORRIS Chief Executive Officer and Director July 22, 2022 Ronnie Morris (principal executive officer) /s/ DAVID MILLER Chief Financial Officer July 22, 2022 David Miller (principal financial and accounting officer) /s/ JOEL ACKERMAN Director, July 22, 2022 Joel Ackerman Chairman of the Board of Directors /s/ DAVID SIDRANSKY Director July 22, 2022 David Sidransky /s/ ROBERT BRAININ Director July 22, 2022 Robert Brainin /s/ SCOTT R. TOBIN Director July 22, 2022 Scott R. Tobin /s/ DANIEL MENDELSON Director July 22, 2022 Daniel Mendelson /s/ PHILIP BREITFELD Director July 22, 2022 Philip Breitfeld 26 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID# 274 ) F- 2 Consolidated Balance Sheets F- 4 Consolidated Statements of Operations F- 4 Consolidated Statements of Changes in Stockholders' Equity F- 6 Consolidated Statements of Cash Flows F- 7 Notes to Consolidated Financial Statements F- 8 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Champions Oncology, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Champions Oncology, Inc. and Subsidiaries (the “Company") as of April 30, 2022 and 2021, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of April 30, 2022 and 2021, and the consolidated results of their operations and their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recognition As described further in Note 2 to the consolidated financial statements, revenues are primarily derived from contracts with customers to provide pharmacology services with payments based on fixed fee arrangements. The Company recognizes revenue over time using a progress-based input method that depicts 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. Customer payments may be made in advance or on a schedule in the statement of work (“SOW”) unrelated to when revenue is recognized resulting in deferred revenue. The determination of the progress as the overall performance obligation is being completed is based on the worked performed in accordance with the SOW and requires management estimates. Pharmacology services revenues for the year ended April 30, 2022 and 2021 were approximately $46.8 million and $39.5 million, respectively. We identified the accounting for revenue and the related deferred revenue recognized over time as a critical audit matter due to the complexity and subjectivity of management’s estimate of the progress towards completion of its projects. This in turn led to a high degree of auditor judgement and subjectivity and significant audit effort was required in performing procedures to evaluate management’s determination of the project completion progress, related costs incurred and deferred revenue. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. We obtained an understanding and evaluated the design of controls relating to the Company's revenue recognition and deferred revenue. Our audit procedures related to the recognition of revenue over time and deferred revenue included the following procedures, among others, (i) testing the Company’s estimates of project progress by evaluating the appropriate SOW and customer acceptance documentation, (ii) testing the significant assumptions used to develop the estimates of project progress pursuant to the SOW and (iii) testing completeness and accuracy of the underlying data. /s/ EisnerAmper LLP We have served as the Company’s auditor since 2015. EISNERAMPER LLP Iselin, New Jersey July 22, 2022 CHAMPIONS ONCOLOGY, INC. CONSOLIDATED BALANCE SHEETS AS OF APRIL 30 (In Thousands except for shares) 2022 2021 ASSETS Current assets: Cash $ 9,007 $ 4,687 Accounts receivable, net 9,513 6,986 Prepaid expenses and other current assets 1,144 957 Total current assets 19,664 12,630 Operating lease right-of-use assets, net 8,230 8,521 Property and equipment, net 7,134 6,090 Other long term assets 15 15 Goodwill 335 335 Total assets $ 35,378 $ 27,591 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,868 $ 1,894 Accrued liabilities 2,414 2,231 Current portion of operating lease liabilities 1,054 818 Other current liabilities 72 — Deferred revenue 11,071 6,256 Total current liabilities 17,479 11,199 Non-current portion operating lease liabilities 8,412 8,783 Other non-current liabilities 391 181 Total liabilities $ 26,282 $ 20,163 Stockholders' equity: Common stock, $ .001 par value; 200,000,000 shares authorized; 13,522,441 and 13,414,066 shares issued and outstanding at April 30, 2022 and 2021, respectively 14 13 Additional paid-in capital 81,064 79,945 Accumulated deficit ( 71,982 ) ( 72,530 ) Total stockholders' equity 9,096 7,428 Total liabilities and stockholders' equity $ 35,378 27,591 The accompanying notes are an integral part of these Consolidated Financial Statements. CHAMPIONS ONCOLOGY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Thousands Except Share and Per Share Amounts) Year Ended April 30, 2022 2021 Oncology services revenue $ 49,109 $ 41,040 Costs and operating expenses: Cost of oncology services 23,632 21,446 Research and development 9,374 7,196 Sales and marketing 6,379 5,520 General and administrative 9,117 6,512 Total costs and operating expenses 48,502 40,674 Income from operations 607 366 Other expense: Other income (expense), net ( 24 ) 71 Income before income tax expense 583 437 Provision for income tax 35 75 Net income $ 548 $ 362 Net income per common share outstanding basic $ 0.04 $ 0.03 and diluted $ 0.04 $ 0.02 Weighted average common shares outstanding basic 13,197,170 13,138,995 and diluted 14,159,799 14,573,561 The accompanying notes are an integral part of these Consolidated Financial Statements. CHAMPIONS ONCOLOGY, INC. CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (In Thousands except for shares) Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders' Equity Shares Amount Shares Amount Balance, April 30, 2020 12,726,728 $ 13 $ 77,978 $ ( 72,892 ) $ 5,099 Stock-based compensation expense — — — — 598 — 598 Issuance of common stock on exercise of stock options 687,338 — — — 1,369 — 1,369 Net income — — — — — 362 362 Balance, April 30, 2021 13,414,066 $ 13 — $ — $ 79,945 $ ( 72,530 ) $ 7,428 Stock-based compensation expense — — — — 912 — 912 Issuance of common stock on exercise of stock options 108,375 1 — — 207 — 208 Net income — — — — — 548 548 Balance, April 30, 2022 13,522,441 $ 14 — $ — $ 81,064 $ ( 71,982 ) $ 9,096 The accompanying notes are an integral part of these Consolidated Financial Statements. CHAMPIONS ONCOLOGY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) Year Ended April 30, 2022 2021 Operating activities: Net income $ 548 $ 362 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Stock-based compensation expense 912 598 Depreciation and amortization expense 1,627 1,184 Net gain on disposal of equipment ( 4 ) — Operating lease right-of-use assets 786 398 Gain on termination of operating lease — ( 75 ) Allowance for doubtful accounts 292 49 Changes in operating assets and liabilities: Accounts receivable ( 2,818 ) ( 2,265 ) Prepaid expenses and other current assets ( 187 ) ( 572 ) Accounts payable 974 ( 1,246 ) Accrued liabilities 183 ( 316 ) Operating lease liabilities ( 631 ) ( 242 ) Other non-current liability — 3 Deferred revenue 4,815 441 Net cash provided by (used in) operating activities 6,497 ( 1,681 ) Investing activities: Purchase of property and equipment ( 2,384 ) ( 3,281 ) Refund of security deposit — 112 Net cash used in investing activities ( 2,384 ) ( 3,169 ) Financing activities: Proceeds from exercise of options and warrants 207 1,369 Finance lease payments — ( 174 ) Net cash provided by financing activities 207 1,195 Increase (decrease) in cash 4,320 ( 3,655 ) Cash, beginning of year 4,687 8,342 Cash, end of year $ 9,007 $ 4,687 Non-cash financing and investing activities: Right-of-use assets obtained in exchange for operating lease liabilities $ 205 $ 6,121 The accompanying notes are an integral part of these Consolidated Financial Statements. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Organization and Basis of Presentation Background Champions Oncology, Inc. (the “Company”), is engaged in drug discovery and development through data-driven research strategies and innovative pharmacology, biomarker and data platforms. The Company’s TumorGraft Technology Platform is an approach to personalizing cancer care based upon the implantation of human tumors in immune-deficient mice. The Company provides 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. Utilizing the TumorGraft Technology Platform (the "Platform"), a comprehensive Bank of unique, well characterized "Patient Derived XenoGrafts" (PDX) models, the Company offers multiple services to pharmaceutical and biotechnology companies seeking personalized approaches to drug development. By performing studies to predict the efficacy of oncology drugs, our Platform is designed to facilitate drug discovery with lower costs and increased speed of drug development as well as increased adoption of existing drugs. The Company has three operating subsidiaries: Champions Oncology (Israel), Limited and Champions Biotechnology U.K., Limited, and Champions Oncology S.R.L. For the years ended April 30, 2022 and 2021, there were no revenues earned by these subsidiaries. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company operates in one reportable business segment. Note 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. Foreign Currency The Company’s foreign subsidiaries functional currency is the U.S. dollar. Transaction gains and losses are recognized in earnings. The Company is subject to foreign exchange rate fluctuations in connection with the Company’s international operations. Foreign currency balances are translated at each month end to US dollars, and any resulting gain or loss is recognized in our results of operations, as the amounts are not material. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include, among other things, accounts receivable realization, revenue recognition, valuation allowance for deferred tax assets, recoverability of capitalized software development costs, and stock-based compensation and warrant assumptions. We base our estimates on historical experience, our observance of trends in particular areas and information or valuations and various other assumptions that we believe to be reasonable under the circumstances and which form the basis for making judgments about the carrying value of assets and liabilities that may not be readily apparent from other sources. Actual amounts could differ significantly from amounts previously estimated. 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 April 30, 2022 and 2021 the Company had cash balances of $ 9.0 million and $ 4.7 million, respectively, and no cash equivalents. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Liquidity Our liquidity needs have typically arisen from the funding of our research and development programs and the launch of new products, working capital requirements, and other strategic initiatives. In the past, we have met these cash requirements through our cash on hand, working capital management, proceeds from certain private placements and public offerings of our securities, and sales of products and services. For the year ended April 30, 2022, the Company had net income of approximately $ 548,000 , an accumulated deficit of approximately $ 72.0 million, working capital of $ 2.2 million and cash of $ 9.0 million. We believe that our cash on hand, together with expected cash flows from operations, are adequate to fund operations through at least August 2023. Should the Company be required to raise additional capital, there can be no assurance that management would be successful in raising such capital on terms acceptable to us, if at all. Fair Value The carrying value of cash, accounts receivable, prepaid expenses, and other 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 are developed by the reporting entity and reflect those assumptions that a market participant would use. Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The Company has no assets or liabilities that are measured at fair value on a recurring and/or non-recurring during the years ended April 30, 2022 and 2021. Property and Equipment Property and equipment is recorded at cost and primarily consists of laboratory equipment, furniture and fixtures, computer hardware and software, and internally developed software. Assets in progress include equipment or software not yet placed in service. Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of the various assets ranging from three to seven years . Refer to Footnote 4, "Property and Equipment" for a detailed discussion. Leases The Company accounts for its leases under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 842, Leases ("ASC 842"). 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 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. 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. Impairment of Long-Lived Assets Impairment losses are to be recognized when the carrying amount of a long-lived asset is not recoverable or exceeds its fair value. The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that a carrying value may not be recoverable. The Company uses estimates of future cash flows over the remaining useful life of a long- lived asset or asset group to determine the recoverability of the asset. These estimates only include the net cash flows directly associated with, and that are expected to arise as a direct result of, the use and eventual disposition of the asset or asset group. The Company has no t recognized any impairment losses for the Company’s long-lived assets for the years ending April 30, 2022 and 2021. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The Company evaluates the carrying value of goodwill annually in connection with the annual budgeting and forecast process and also between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit to which goodwill was allocated to below its carrying amount. Such circumstances could include, but are not limited to: (1) a significant adverse change in legal factors, market conditions, or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. When evaluating goodwill for impairment, we may first perform an assessment qualitatively whether it is more likely than not that a reporting unit’s carrying amount exceeds its fair value, referred to as a “step zero” approach. Subsequently (if necessary after step zero), an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying value. Under FASB's Accounting Standards Update ("ASU") 2014-02, Topic 350, "Intangibles—Goodwill and Other" goodwill impairment is measured as the excess of the carrying amount of the reporting unit over its fair value. The impairment evaluation test involves comparing the current fair value of each business unit to its carrying value, including goodwill. Fair value is typically estimated using a discounted cash flow analysis, which requires the Company to estimate the future cash flows anticipated to be generated by the business unit being tested for impairment as well as to select a risk-adjusted discount rate to measure the present value of the anticipated cash flows. When determining future cash flow estimates, the Company considers historical results adjusted to reflect current and anticipated operating conditions. The Company estimates cash flows for the business unit over a discrete period (typically four or five years) and the terminal period (considering expected long term growth rates and trends). Estimating future cash flows requires significant judgment by management in such areas as future economic conditions, industry-specific conditions, product pricing, and necessary capital expenditures. The use of different assumptions or estimates for future cash flows or significant changes in risk-adjusted discount rates due to changes in market conditions could produce substantially different estimates of the fair value of the business unit. The Company has one reportable segment. The Company assesses goodwill impairment by business unit. Judgments regarding the existence of impairment indicators are based on legal factors, market conditions and operational performance of the businesses. Future events, including but not limited to continued declines in economic activity, loss of contracts or a significant number of customers, or a rapid increase in costs or capital expenditures, could cause us to conclude that impairment indicators exist and that goodwill is impaired. For the year ended April 30, 2022, the Company's annual assessment did not result in any impairment indicators. Deferred Revenue Deferred revenue represents payments received in advance of products to be delivered or services to be performed. When products are delivered and/or services are performed, deferred revenue is recognized as earned. Deferred revenue is expected to be recognized within one year. Other Non-Current Liabilities Other non-current liabilities represent amounts for uncertain tax positions relating to one of our foreign entities and a financing lease of laboratory equipment in exchange for a lab supplies purchasing commitment. Cost of Oncology Services Cost of oncology services relates primarily to our Translational Oncology Solutions ("TOS") business unit. TOS costs consist of direct costs related to laboratory supplies, mice purchases, and maintenance costs for studies completed internally as well as charges from Contract Research Organization's for studies handled externally. Indirect costs include salaries and other payroll related costs of compensation for personnel directly engaged in providing TOS products and services. All costs of performing studies in-house are expensed as incurred. All costs of performing studies from external sources, are expensed when incurred. Research and Development Research and development costs represent both costs incurred internally for research and development activities, including personnel costs, mice purchases, and maintenance, as well as costs incurred externally to facilitate research activities, such as tumor tissue procurement and characterization expenses. All research and development costs are expensed as incurred. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Sales and Marketing Sales and marketing expenses represent costs incurred to promote the Company’s products offered, including salaries, benefits and related costs of our sales and marketing personnel, and represent costs of advertising and other selling and marketing expenses. All sales and marketing costs, including advertising costs, are expensed as incurred. 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 income per share is computed by dividing the net 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. Stock-based Payments The Company typically recognizes expense for stock-based payments based on the fair value of awards on the date of grant. The Company uses the Black-Scholes option pricing model to estimate fair value. The Black-Scholes option valuation model was developed for use in estimating the fair value of short-traded options that have no vesting restrictions and are fully transferable. The option pricing model requires the Company to estimate certain key assumptions such as expected life, volatility, risk free interest rates and dividend yield to determine the fair value of stock-based awards. These assumptions are based on historical information and management judgment. The risk-free interest rate used is based on the United States treasury security rate with a term consistent with the expected term of the award at the time of the grant. Since the Company has limited option exercise history, it has generally elected to estimate the expected life of an award based upon the Securities and Exchange Commission-approved “simplified method” noted under the provisions of Staff Accounting Bulletin No. 107 with the continued use of this method extended under the provisions of Staff Accounting Bulletin No. 110. Estimated volatility is based upon the historical volatility of the Company's common stock. The Company does not anticipate paying a dividend, and therefore, no expected dividend yield was used. The Company expenses stock-based payments over the period that the awards are expected to vest. In the event of forfeitures, compensation expense is adjusted. The Company expenses modification charges in the period of modification and, if required, over the remaining period the awards are expected to vest. The Company will report cash flows resulting from tax deductions in excess of the compensation cost recognized from those options (excess tax benefits) as financing cash flows, if they should arise. Income Taxes Deferred income taxes have been provided to show the effect of temporary differences between the recognition of expenses for financial and income tax reporting purposes and between the tax basis of assets and liabilities, and their reported amounts in the consolidated financial statements. In assessing the realizability of deferred tax assets, the Company assesses the likelihood that deferred tax assets will be recovered through tax planning strategies or from future taxable income, and to the extent that recovery is not likely or there is insufficient operating history, a valuation allowance is established. The Company adjusts the valuation allowance in the period management determines it is more likely than not that net deferred tax assets will or will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. As of April 30, 2022 and 2021, 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. The Company reflects tax benefits only if it is more likely than not that we will be able to sustain the tax position, based on its technical merits. If a tax benefit meets this criterion, it is measured and recognized based on the largest amount of benefit that is cumulatively greater than 50% likely to be realized. As of April 30, 2022 and 2021 the Company has recorded $ 181,000 of liabilities related to uncertain tax positions relative to one of its foreign operations. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company accrued $ 0 and $ 3,000 , for interest and penalties on the Company’s statement of operations for the years ended April 30, 2022 and 2021, respectively. The Company does not anticipate any significant unrecognized tax benefits to be recorded during the next 12 months. For the year ended April 30, 2022 and 2021, the Company recognized a provision for income taxes of $ 35,000 and $ 75,000 , respectively. These amounts are mainly attributable to taxable income earned in Israel relating to transfer pricing. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. The objective of the standard is to establish a single comprehensive revenue recognition model that is designed to create greater comparability of financial statements across industries and jurisdictions. Under this standard, companies recognize revenue to depict the 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 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 (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. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 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 consolidated balance sheet as the Company expects to recognize the associated revenue in less than one year. Accounting Pronouncements Being Evaluated In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses". This update requires immediate recognition of management’s estimates of current expected credit losses ("CECL"). Under the prior model, losses were recognized only as they were incurred. The new model is applicable to all financial instruments that are not accounted for at fair value through net income. The standard is effective for fiscal years beginning after December 15, 2022 for public entities qualifying as smaller reporting companies. Early adoption is permitted. We are currently assessing the impact of this update on our consolidated financial statements and have not yet determined the impact on our consolidated financial statements. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (ASC 740) — Simplifying the Accounting for Income Taxes. ASU 2019-12 which modifies ASC 740 to simplify the accounting for income taxes. The ASU removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2020. We adopted this guidance on May 1, 2021. The adoption of this ASU did not have a material impact is reflected in the Company's current year consolidated financial statements. Note 3. Accounts Receivable, Unbilled Services and Deferred Revenue Accounts receivable and unbilled services were as follows (in thousands): April 30, 2022 April 30, 2021 Accounts receivable $ 6,037 $ 4,304 Unbilled services 4,106 3,020 Total accounts receivable and unbilled services 10,143 7,324 Less: allowance for doubtful accounts ( 630 ) ( 338 ) Total accounts receivable, net $ 9,513 $ 6,986 Deferred revenue was as follows (in thousands): April 30, 2022 April 30, 2021 Deferred revenue $ 11,071 $ 6,256 CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Deferred revenue is shown as a current liability on the Company's balance sheet. As of April 30, 2020 unbilled services was $ 2.4 million and deferred revenue was $ 5.8 million. Note 4. Property and Equipment Property and equipment consisted of the following (in thousands): April 30, 2022 2021 Furniture and fixtures $ 246 $ 246 Computer equipment and software 1,667 1,461 Laboratory equipment 8,618 6,640 Capitalized software development costs 1,888 484 Assets in progress 181 1,211 Leasehold improvements 111 4 Total property and equipment 12,711 10,046 Less: Accumulated depreciation and amortization ( 5,577 ) ( 3,956 ) Property and equipment, net $ 7,134 $ 6,090 Depreciation and amortization expense was $ 1.6 million and $ 1.2 million for the years ended April 30, 2022 and 2021, respectively. Depreciation and amortization expense, excluding expense recorded under finance leases, was $ 1.5 million and $ 925,000 for the years ended April 30, 2022 and 2021. As of April 30, 2022 and 2021, property, plant and equipment included gross assets held under finance leases of $ 713,000 and $ 343,000 , respectively. Related depreciation expense for these assets was $ 87,000 and $ 124,000 for the years ended April 30, 2022 and 2021. 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 Bioinformatics platform ("Lumin"). Lumin is the Company's new oncology data-driven software program and data tool which is operates as Software as a Service (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. Capitalized costs are classified as assets in progress during the development process until development is complete and the asset is available for sale. The initial version of the Lumin platform was launched during fiscal year 2021, at which time initial capitalization ceased and amortization commenced. The total Lumin assest placed into service and available for sale as of July 31, 2020 was $ 484,000 . The Company continued to develop increased functionality, expand product design and usability, and add enhancements to the Lumin platform. In accordance with accounting guidance, these costs were capitalized. This developmental work did not render the initial released version to be obsolete or diminished in value but, rather, added to the base functionality of the existing platform. During the third quarter of fiscal year 2022, these capitalized costs were placed into CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) service as the enhanced version was launched and made available for sale. The total cost of the enhanced Lumin asset placed into service and available for sale as of January 31, 2022 was $ 1.4 million, bringing the total capitalized gross asset investment to $ 1.9 million. Amortization expense related to this asset addition was $ 317,000 and $ 134,000 for the years ended April 30, 2022 and 2021, respectively. Finance Lease During fiscal 2020, 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 expired December 2020. Prior to expiration, the monthly finance lease payment was approximately $ 19,000 . The future minimum lease payments remaining under this finance lease at April 30, 2021 and 2020 were zero and $ 135,000 , respectively. The present value of minimum future obligations was calculated based on interest rate of 4.75 %. Depreciation and amortization expense related to this finance lease was zero and $ 124,000 for the years ended April 30, 2022 and 2021, respectively. During fiscal 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. 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 was $ 87,000 and zero for the years ended April 30, 2022 and 2021, respectively. Note 5. Revenue from Contracts with Customers Oncology Services Revenue The following table represents disaggregated revenue for the twelve months ended April 30, 2022 and 2021: Year Ended April 30, 2022 2021 Pharmacology services $ 46,833 $ 39,473 Other TOS revenue 2,227 1,401 Personalized oncology services 49 166 Total oncology services revenue $ 49,109 $ 41,040 Other TOS revenue represents additional services provided to the Company's pharmaceutical and biotechnology customers, specifically flow cytometry services and SaaS provided via our Lumin Bioinformatics software. 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. Contract liabilities consist of customer payments received in advance of performance and billings in excess of revenue recognized, net of revenue recognized from the balance at the beginning of the period. Contract assets and liabilities are presented on the balance sheet on a net contract-by-contract basis at the end of each reporting period. Refer to Note 3 for related balances. Note 6. Significant Customers For the years ended April 30, 2022 and 2021, one and none of our customers accounted for more than 10% of our total revenue, respectively. As of April 30, 2022, one customer accounted for 17 % of our total accounts receivable balance. As of April 30, 2021, no customers accounted for 10% or more of our total accounts receivable balance. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 7. Commitments and Contingencies Legal Matters The Company is not currently party to any legal matters to its knowledge. The Company is not aware of any other matters that would have a material impact on the Company’s financial position or results of operations. Registration Payment Arrangements The Company has entered into an Amended and Restated Registration Rights Agreement in connection with the March 2015 Private Placement. 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. Royalties The Company contracts with third-party vendors to license tumor samples for development into PDX models and use in our TOS business. These types of arrangements have an upfront fee ranging from approximately nil to $ 30,000 per tumor sample depending on the successful growth of the tumor model and ability to develop them into a sellable product. The upfront costs are expensed as incurred. In addition, under certain agreements, for a limited period of time, the Company is subject to royalty payments if the licensed tumor models are used for sale in our TOS business, ranging from 2 % to 20 % of the contract price after recouping certain initiation costs. Some of these arrangements also set forth an annual minimum royalty due regardless of tumor models used for sale. For the years ended April 30, 2022 and 2021, we have recognized approximately $ 401,000 and $ 127,000 in expense related to these royalty arrangements, respectively. Note 8. Stock-based Payments Stock-based compensation in the amount of $ 912,000 and $ 598,000 was recognized for years ended April 30, 2022 and 2021, respectively. Stock-based compensation costs were recorded as follows (in thousands): Year Ended April 30, 2022 2021 General and administrative $ 563 $ 292 Sales and marketing 189 199 Research and development 18 23 TOS cost of sales 142 84 Total stock-based compensation expense $ 912 $ 598 The Company has in place a 2021 Equity Incentive Plan, 2010 Equity Incentive Plan and 2008 Equity Incentive Plan ("the Plans"). In general, these plans provide for stock-based compensation to the Company’s employees, directors and non-employees. The 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. 2021 Equity Incentive Plan As part of the 2021 Annual Shareholders Meeting, shareholders approved the adoption of 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 non-employees. Total stock awards under the 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 Board of Directors. Options and Stock Appreciation Rights have a strike price not less than 100 % of the CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) fair market value of the common stock subject to the option or right at the date of grant. As of April 30, 2022, approximately 1.8 million shares were left to issue under this plan. 2010 Equity Incentive Plan On February 18, 2011, shareholders owning a majority of the issued and outstanding shares of the Company executed a written consent approving the 2010 Equity Incentive Plan (“2010 Equity Plan”). The purpose of the 2010 Equity Plan is to grant (i) Non-statutory Stock Options; (ii) Restricted Stock Awards; and (iii) Stock Appreciation Rights (collectively, stock-based compensation) to its employees, directors and non-employees. Total stock awards under the 2010 Equity Plan shall not exceed 30,000,000 shares of common stock. Options and Stock Appreciation Rights expire no later than ten years from the date of grant and the awards vest as determined by the Board of Directors. Options and Stock Appreciation Rights have a strike price not less than 100 % of the fair market value of the common stock subject to the option or right at the date of grant. After February 2021, no more shares were available to be issued from this plan. 2008 Equity Incentive Plan The Company has previously granted (i) Non-statutory Stock Options; (ii) Restricted Stock Awards; and (iii) Stock Appreciation Rights (collectively, stock-based compensation) to its employees, directors and non-employees under a 2008 Equity Incentive Plan (the “2008 Equity Plan”). Such awards may be granted by the Company’s Board of Directors. Options granted under the 2008 Equity Plan expire no later than ten years from the date of grant and the awards vest as determined by the Board of Directors. For stock-based payments to non-employee consultants under the Plans, the fair value of the stock-based consideration issued is used to measure the transaction, as management believes this to be a more reliable measure of fair value than the services received. The fair value of the award is expensed over the period service is provided to the Company; however, it is ultimately measured at the price of the Company’s common stock or the fair value of stock options using the Black-Scholes valuation model on the date that the commitment for performance by the non-employee consultant has been reached or performance is complete, which is generally the vesting date of the award. After 2018, no more shares were available to be issued from this plan. Director Compensation Plan On December 12, 2013, the Compensation Committee of the Board of Directors of the Company adopted changes to the Director Compensation Plan of 2010 (the “Director Plan”) effective December 1, 2013. Under the Director Plan, independent directors of the Company are entitled to an annual award of a five-year option to purchase 8,333 shares of the Company’s common stock, and the Chairman of the Board of the Company is entitled to an annual award of a five-year option to purchase 16,667 shares of the Company’s common stock. Independent directors who serve as chairperson of a committee will also receive an annual grant of a five-year option to purchase 1,667 shares of the Company’s common stock. All options issued under the Director Plan vest quarterly at a rate of 25 %. Option grants will typically be issued after the annual shareholder meeting which will generally be held in October of each year. New directors will receive a grant upon joining the Board equal to the pro-rata annual grant for the remainder of the year. Options issued under the Director Plan are now issued pursuant to the 2021 Equity Plan. Stock Option Grants Black-Scholes assumptions used to calculate the fair value of options granted during the years ended April 30, 2022 and 2021 were as follows: Year Ended April 30, 2022 2021 Expected term in years 6 3 - 6 Risk-free interest rates 0.8 % - 1.2 % 0.1 % - 0.5 % Volatility 64 % - 66 % 70 % - 75 % Dividend yield — % — % CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The weighted average fair value of stock options granted during the years ending April 30, 2022 and 2021, was $ 5.56 and $ 5.11 , respectively. The Company’s stock options activity and related information as of and for the years ended April 30, 2022 and 2021 is as follows: Directors and Employees Non- Employees Total Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding, May 1, 2021 1,618,231 35,415 1,653,646 $ 3.96 5.4 $ 11,384,000 Granted 155,552 10,500 166,052 9.44 9.3 $ — Exercised ( 108,375 ) — ( 108,375 ) 2.29 Canceled ( 11,209 ) — ( 11,209 ) 4.71 Forfeited ( 36,875 ) — ( 36,875 ) 7.45 Expired — ( 5,000 ) ( 5,000 ) 9.60 Outstanding, April 30, 2022 1,617,324 40,915 1,658,239 4.51 4.9 $ 6,131,000 Vested and expected to vest as of April 30, 2022 1,617,324 40,915 1,658,239 4.51 4.9 $ 6,131,000 Vested as of April 30, 2022 1,349,895 4,584 1,354,479 3.93 4.2 $ 5,778,000 Directors and Employees Non- Employees Total Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding, May 1, 2020 2,228,326 43,332 2,271,658 $ 3.23 5.0 $ 10,663,000 Granted 135,834 — 135,834 9.24 7.3 259,000 Exercised ( 686,178 ) ( 1,160 ) ( 687,338 ) 2.33 Canceled ( 47,751 ) ( 923 ) ( 48,674 ) 6.03 Forfeited ( 12,000 ) — ( 12,000 ) 7.48 Expired — ( 5,834 ) ( 5,834 ) 10.80 Outstanding, April 30, 2021 1,618,231 35,415 1,653,646 3.96 5.4 $ 11,384,000 Vested and expected to vest as of April 30, 2021 1,618,231 35,415 1,653,646 3.96 5.4 $ 11,384,000 Vested as of April 30, 2021 1,323,270 9,584 1,332,854 3.34 4.8 $ 9,995,000 Note 9. Provision for Income Taxes The components of the provision for income taxes are as follows (in thousands): CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Year Ended April 30, 2022 Federal State Foreign Total Current $ — $ 10 $ 25 $ 35 Total $ — $ 10 $ 25 $ 35 Year Ended April 30, 2021 Federal State Foreign Total Current $ — $ 13 $ 62 $ 75 Total $ — $ 13 $ 62 $ 75 A reconciliation between the Company’s effective tax rate and the United States statutory tax rate for the years ended April 30, 2022 and 2021 is as follows: Year Ended April 30, 2022 2021 Federal income tax at statutory rate 21.0 % 21.0 % US vs. foreign tax rate difference 1.3 0.5 State income tax, net of federal benefit 3.3 80.8 Permanent differences ( 47.3 ) ( 61.5 ) Increase in uncertain tax position — 0.7 Change in valuation allowance 27.7 ( 24.3 ) Income tax expense 6.0 % 17.2 % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of April 30, 2022 and 2021 consist of the following (in thousands): As of April 30, 2022 2021 Accrued liabilities $ 162 $ 232 Right of use, net asset/liability 316 271 Depreciation and amortization ( 396 ) ( 206 ) Stock-based compensation expense 3,874 3,640 Net operating loss carry-forward 11,546 11,404 Total deferred tax assets 15,502 15,341 Less: Valuation allowance ( 15,502 ) ( 15,341 ) Net deferred tax asset $ — $ — On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The Act contains several new or changed income tax provisions, including but not limited to the following: increased limitation threshold for determining deductible interest expense; class life changes to qualified improvements (in general, from 39 years to 15 years); and the ability to carry back net operating losses incurred from tax years 2018 through 2020 up to the five preceding tax years. The Company has evaluated the new tax provisions of the CARES Act and determined the impact to be either immaterial or not applicable. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Management has evaluated the available evidence about future tax planning strategies, taxable income, and other possible sources of realization of deferred tax assets and has established a full valuation allowance against its net deferred tax assets as of April 30, 2022 and 2021. For the years ended April 30, 2022 and 2021, the Company recorded a valuation allowance of $ 15.5 million and $ 15.3 million, respectively. As of April 30, 2022 and 2021, the Company’s estimated U.S. net operating loss carry-forwards were approximately $ 48.0 million and $ 46.9 million, respectively. Net operating losses generated prior to May 1, 2018 have a 20-year carryforward and will begin expiring in 2025 for federal and 2031 for state purposes. Losses generated in the fiscal years since the year ended April 30, 2019 may be carried forward indefinitely. A valuation allowance has been recorded against all of these loss carryforwards. Under the provisions of the Internal Revenue Code, certain substantial changes in the Company’s ownership may result in a limitation on the amount of net operating losses that may be utilized in future years. During the fiscal year ended April 30, 2013, approximately $ 12.0 million of the Company’s net operating losses became subject to limitation under Internal Revenue Code Section 382 in connection with an ownership change on January 28, 2013. As a result of the ownership change, the Company’s annual limitation on its use of net operating loss carry-forwards is approximately $ 432,000 . The Company files income tax returns in various jurisdictions with varying statutes of limitations. As of April 30, 2022, the earliest tax year still subject to examination for state purposes is fiscal 2018. The Company’s tax years for periods ending April 30, 2002 and forward are subject to examination by the United States and certain states due to the carry-forward of unutilized net operating losses. The following table indicates the changes to the Company’s uncertain tax positions for the period and years ended April 30, 2022 and 2021 in thousands: Year Ended April 30, 2022 2021 Balance, beginning of the year $ 181 $ 178 Addition based on tax positions related to prior years — — Payment made on tax positions related to prior years — — Addition based on tax positions related to current year — 3 Balance, end of year $ 181 $ 181 As of April 30, 2022 and 2021, the above amounts of $ 181,000 for each fiscal year were included in other long-term liabilities. Note 10. Earnings Per Share A reconciliation of net income and number of shares used in computing basic and diluted earnings per share was as follows: CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Year Ended April 30, 2022 2021 Basic and diluted net income per share computation (dollars in thousands): Net income attributable to common stockholders $ 548 $ 362 Weighted Average common shares - basic 13,197,170 13,138,995 Basic net income per share $ 0.04 $ 0.03 Diluted income per share computation Net income attributable to common stockholders $ 548 $ 362 Income available to common stockholders $ 548 $ 362 Weighted Average common shares 13,197,170 13,138,995 Incremental shares from assumed exercise of warrants and stock options 962,629 1,434,566 Adjusted weighted average share – diluted 14,159,799 14,573,561 Diluted net income per share $ 0.04 $ 0.02 The following table reflects the total potential stock-based instruments outstanding at April 30, 2022 and 2021 that could have an effect on the future computation of dilution per common share. These figures were not included in the above calculation as, to do so, would be antidilutive: Year Ended April 30 2022 2021 Stock options 1,332,854 1,653,646 Total common stock equivalents 1,332,854 1,653,646 Note 11. Related Party Transactions Related party transactions include transactions between the Company and its shareholders, management, or affiliates. The following transactions were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the parties. Consulting Services For both years ended April 30, 2022 and 2021, the Company paid a member of its Board of Directors $ 36,000 and $ 54,000 for consulting services unrelated to his duties as a board member. During the years ended April 30, 2022 and 2021, the Company paid another board member $ 17,000 and $ 5,500 , respectively, for consulting services unrelated to his duties as a board member. All of the amounts paid to these related parties have been recognized in expense in the period the services were performed. Note 12. Leases The Company accounts for its leases under ASC 842. 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 an operating lease ROU asset and operating lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. 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. Variable lease expenses, if any, are recorded when incurred. The Company has elected to apply the short-term lease exemption practical expedient for each class of underlying assets and excludes short-term leases having initial terms of 12 months or less. The Company recognizes rent CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) expense on a straight-line basis over the lease term for these short-term leases. The Company has determined that no material embedded leases exist. Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. 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. Operating Leases 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 expenses totaled $ 1.9 million and $ 1.3 million for the years ended April 30, 2022 and 2021, respectively. The Company leases the following facilities: • One University Plaza, Suite 307, Hackensack, New Jersey 07601, which, since November 2011, serves as the Company’s corporate headquarters. The lease was renewed during fiscal 2022 and expires in November 2026. The Company recognized $ 88,000 and $ 91,000 of rent expense relative to this lease for fiscal 2022 and 2021, 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 this lease (the "Original Premises") on January 11, 2017. The operating commencement date was August 11, 2017. This lease originally expired in August 2028. ◦ On March 30, 2020, the Company executed the first amendment to this lease to expand the existing premises at 1330 Piccard Drive, Suite 025 ("Expansion Premises") to add on Suites 050 and 104. This amendment also extended the current lease term by six months . The Expansion Premises operating lease commencement date was June 1, 2020 and, under the amendment, both leases expire February 28, 2029. ◦ In accordance with ASC 842, the Company evaluated the first amendment and also performed a reassessment of the existing lease for Suite 025 to determine the impact of the six-month term extension. As a result of this assessment, the Company recognized an additional operating ROU asset and related operating lease liability for Suite 025 of $ 118,000 and $ 125,000 , respectively, as well as an incremental net rent expense of $ 8,000 during the three months ended July 31, 2020. The Company did not recognize the incremental rental expense under this amendment during fiscal 2020 as the Expansion Premises lease commencement date was during fiscal 2021. ◦ 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. ◦ 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") and add on Suite 201. The Additional Expansion Premises operating lease commencement date was April 1, 2021 and, under the second amendment, reaffirms that all three leases expire February 28, 2029. Upon the Additional Expansion Premises operating lease commencement date (April 1, 2021), the Company also recognized an operating ROU asset and related operating lease liability for Suite 201 of $ 3.3 million, each, respectively. ◦ For the leases related to the premises at Piccard Drive, the Company recognized $ 1.7 million and $ 1.2 million of rental expense for fiscal 2022 and 2021, 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. The operating commencement date was January 17, 2019. This lease was set to expire in April 2024. 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 recognized zero and $ 43,000 of rental expense for fiscal 2022 and 2021, respectively. • 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 the lease for its laboratory space in June 2021, and commenced occupancy during the three months ended October 31, 2021. This lease expires May 2023. The Company executed the lease for its office space on October 1, 2021. This lease expires September 2027. ◦ The Company recognized an operating ROU asset and related operating lease liability for the lab and office space of $ 205,000 each, respectively. ◦ The Company recognized rental costs associated with these leases of $ 81,000 and zero for fiscal 2022 and 2021, respectively. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) ROU assets and lease liabilities related to our current operating leases are as follows (in thousands): April 30, 2022 April 30, 2021 Operating lease right-of-use assets, net 8,230 8,521 Current portion of operating lease liabilities 1,054 818 Non-current portion of operating lease liabilities 8,412 8,783 As of April 30, 2022, the weighted average remaining operating lease term and the weighted average discount rate were 6.7 years and 5.73 %, respectively. Future minimum lease payments due each fiscal year as follows (in thousands): 2023 $ 2,735 2024 2,809 2025 2,848 2026 2,895 2027 2,860 Thereafter 5,164 Total undiscounted liabilities 19,311 Less: Imputed interest ( 9,845 ) Present value of minimum lease payments $ 9,466 Refer to Note 4, Property and Equipment, for more information on financing leases. Exhibit Index Exhibit No . 3.1 Amended and Restated Articles of Incorporation (incorporated by reference to Appendix A to the Company’s Information Statement on Schedule 14C filed March 7, 2011) 3.1.1 Certificate of Amendment to Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3(i) to the Company’s Current Report on Form 8-K filed April 28, 2015) 3.2 Amended and Restated Bylaws, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed May 9, 2017) 4.1 Description of Registered Securities (incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed July 28, 2020) 10.1 Employment Agreement, dated November 5, 2013, between the Company and Ronnie Morris, M.D. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed November 12, 2013) 10.2 Amendment to Employment Agreement, dated March 16, 2015, between the Company and Ronnie Morris (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed March 20, 2015) 10.3 Offer letter dated June 3, 2013 between the Company and David Miller (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 3, 2013) 10.4 2010 Equity Incentive Plan (incorporated by reference to Appendix B to the Company’s Definitive Information Statement on Schedule 14C filed March 7, 2011) 10.5 Form of Note Purchase Agreement, dated December 1, 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 5, 2014) 10.6 Form of Convertible Promissory Note, dated December 1, 2014, issued to each of Joel Ackerman and Ronnie Morris in connection with the Note Purchase Agreement, dated December 1, 2014 between the Company and each of Joel Ackerman and Ronnie Morris incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 5, 2014) 10.7 Amendment No. 1 to Convertible Promissory Note, dated December 1, 2014 issued to Joel Ackerman in connection with the Note Purchase Agreement, dated December , 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 2, 2015) 10.8 Amendment No. 1 to Convertible Promissory Note, dated December 1, 2014 issued to Ronnie Morris in connection with the Note Purchase Agreement, dated December , 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 2, 2015) 10.9 Amended and Restated 2011 Securities Purchase Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.10 Form of warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed January 30, 2013) 10.11 Amendment No. 1 to warrants, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.12 Amended and Restated 2013 Securities Purchase Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.13 Form of warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed January 30, 2013) 10.14 Amendment No. 1 to warrants, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.15 Put Right Agreement, dated January 29, 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 6, 2014) 10.16 Securities Purchase Agreement, dated March 11, 2015, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 12, 2015) 10.17 Amended and Restated Registration Rights Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to (i) the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto, (ii) the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto, and (iii) the Securities Purchase Agreement, dated March 11, 2015, between the Company. And each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.18 Form of Investor Warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated March 11, 2015, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.19 Option Exchange Agreement, dated March 16, 2015, between the Company and Joel Ackerman (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 20, 2015) 10.20 Option Exchange Agreement, dated March 16, 2015, between the Company and Ronnie Morris (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 20, 2015) 10.21 Option Exchange Agreement, dated March 16, 2015, between the Company and David Miller (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed March 20, 2015) 14 Code of Ethics (incorporated by reference to Exhibit 14 of the April 30, 2008 Form 10-KSB) 21 List of Subsidiaries (incorporated by reference to Exhibit 21 of the Company's Form 10-K filed July 28, 2017) 23.1 Consent of Independent Registered Public Accounting Firm* 31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer* 31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer* 32.1 Section 1350 Certifications** 101.INS* XBRL Instance Document. 101.SCH* XBRL Taxonomy Extension Schema Document. 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document. 101.LAB* XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document. __________________________ * Filed herewith ** Furnished hereto.