What changed in this filing

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Item 1A. Risk Factors

2024-07-19 compared with 2023-07-24 · 42 added, 23 removed, 206 unchanged (24% of the section changed)

3 unchanged sentences

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

For the years ended April 30, 2023 and 2022, the Company had a net loss of approximately $5.3 million and net income of $548,000, respectively.

As of April 30, 2023, the Company has an accumulated deficit of approximately $77.3 million, negative working capital of $2.3 million, and a cash balance of $10.1 million.

The Company also had cash provided by operations of approximately $4.0 million for the twelve months ending April 30, 2023.

We believe that our cash on hand, together with expected cash flows from operations, are adequate to fund our operations through at least August 2024.

These conditions raise a substantial doubt about our ability to continue as a going concern.

For the fiscal year ended April 30, 2024, the Company had a net loss of approximately $7.3 million and used cash flows in operations of approximately $6.1 million.

These conditions raise substantial doubt about our ability to continue as a going concern.

The accompanying financial statements do not include any adjustments that might result from these uncertainties.

In its report dated July 19, 2024, EisnerAmper LLP, our independent registered public accounting firm, expressed substantial doubt about our ability to continue as a going concern as we have suffered recurring losses from operations and have insufficient liquidity to fund our future operations.

If we are unable to improve our liquidity position, we may not be able to continue as a going concern.

The accompanying consolidated financial statements do not include any adjustments that might result if we are unable to continue as a going concern and, therefore, be required to realize our assets and discharge our liabilities other than in the normal course of business which could cause investors to suffer the loss of all or a substantial portion of their investment.

As of April 30, 2024, we had cash on hand of $2.6 million.

Based on our available cash at April 30, 2024, in order to continue to fund our operations we may need to raise additional equity or debt capital in the near term and cannot provide any assurance that we will be successful in doing so.

If we are unable to obtain additional financing in the near future, we may be required to pursue a reorganization proceeding, including under applicable bankruptcy or insolvency laws.

Holders of our common shares will likely not receive any value or payments in a restructuring or similar scenario.

In the event we pursue bankruptcy protection, we will be subject to the risks and uncertainties associated with such proceedings.

There can be no guarantees that if we seek bankruptcy protection, we will emerge from bankruptcy protection as a going concern or that holders of our common shares will receive any recovery from any bankruptcy proceedings.

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

7 unchanged sentences

• the cost incurred in hiring and maintaining qualified personnel.

Currently, the Company derives revenue primarily from research services, while pursuing efforts to further develop its drug discovery business units.

Currently, we derive revenue primarily from research services, while pursuing efforts to further develop our drug discovery business units.

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

17 unchanged sentences

(vi) continue to operate despite increasing competition in our industry;

and (vii) establish, develop and maintain our name recognition.

and (vii) establish, develop and

maintain our name recognition.

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

31 unchanged sentences

In addition, academic institutions, hospitals, governmental agencies, and other public and private research organizations also may conduct similar research, seek patent protection, and may develop and commercially introduce competing products or technologies on their own or through joint ventures.

If one or more of our competitors succeeds in developing similar technologies and products that are more effective or successful than any of those that we currently sell or will develop, our results of operations will be significantly adversely affected.

more of our competitors succeeds in developing similar technologies and products that are more effective or successful than any of those that we currently sell or will develop, our results of operations will be significantly adversely affected.

If we are unable to protect our intellectual property, we may not be able to compete as effectively.

7 unchanged sentences

Enforcing a claim that someone else illegally obtained and is using our trade secrets, like patent litigation, is expensive and time consuming, and the outcome is unpredictable.

In addition, courts

outside the United States are sometimes less willing to protect trade secrets.

In addition, courts outside the United States are sometimes less willing to protect trade secrets.

Finally, our competitors may independently develop equivalent knowledge, methods and know-how.

41 unchanged sentences

Impairment of goodwill or other long-term assets may adversely impact future results of operations.

We have intangible assets, including goodwill and capitalized software development costs, on our balance sheet.

During 2023, we recorded an asset impairment charge related to software development costs of $807,000, reducing the net book value to zero.

We have intangible assets and goodwill on our balance sheet.

If the future growth and operating results of our business are not as strong as anticipated and/or our market capitalization declines, this could impact the assumptions used in calculating the fair value of goodwill or recoverability of any future capitalized software development costs.

2 unchanged sentences

Our ability to use our net operating loss carry-forwards and certain other tax attributes may be limited.

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

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

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

7 unchanged sentences

This could severely limit the liquidity of our common stock, and would likely have a material adverse effect on the market price of our common stock and on our ability to raise additional capital.

Furthermore, like many stocks quoted on the Nasdaq Capital Market, trading in our common stock is thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects.

with our operations or business prospects.

This volatility could depress the market price of our common stock for reasons unrelated to operating performance.

24 unchanged sentences

Certain provisions of our charter and bylaws and of our contractual agreements contain provisions that could delay and discourage takeover attempts and any attempts to replace our current management by stockholders.

Certain provisions of our certificate of incorporation and bylaws, and our contractual agreements could make it difficult for or prevent a third party from acquiring control of us or changing our board of directors and management.

These provisions include:

• requirements that our stockholders comply with advance notice procedures in order to nominate candidates for election to our Board of Directors or to place stockholders’ proposals on the agenda for consideration at meetings of stockholders;

• in connection with private placements of our stock in 2011, 2013 and 2015, we covenanted that we would not merge or consolidate with another company unless either the transaction and the trading volume of our stock met certain thresholds and qualifications or we obtained the consent of certain of the investors who purchased our stock in those private placements.

and qualifications or we obtained the consent of certain of the investors who purchased our stock in those private placements.

Certain provisions of Delaware law make it more difficult for a third party to acquire us and make a takeover more difficult to complete, even if such a transaction were in the stockholders’ interest.

21 unchanged sentences

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

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

phishing, hacking, and other cyberattacks.

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

6 unchanged sentences

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

In addition, there is a risk of business interruption,

violation of data privacy laws and regulations, litigation, and reputational damage from leakage of confidential information.

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

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

5 unchanged sentences

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

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

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

The restrictions and travel bans have been eased or lifted completely as global society as a whole returned to pre-pandemic business and personal practices.

Although, to date, these restrictions have not materially impacted our operations, the effect on our business, from the spread of COVID-19 or any new and similar viral crisis and the actions implemented by the governments of the United States and elsewhere across the globe implemeted to deal with such, may, once again, worsen over time and we are unable to predict the potential impact on our business.

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

3 unchanged sentences

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

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

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

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

2 unchanged sentences

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

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

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

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

Unresolved Staff Comments

Our Chief Executive Officer resides in Israel and we have several customers with their operations located in Israel, and, therefore, our leadership continuity and results may be adversely affected by political, economic, and military instability in Israel.

One of our wholly owned subsidiaries is based in Israel.

While we do not have a physical facility located in Israel, our Chief Executive Officer resides there and we have several customers whose operations are based there.

Accordingly, political, economic, and military conditions in Israel may directly affect our business.

Since the establishment of the modern State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries.

Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our business, results of operations, and leadership continuity.

Any armed conflicts, war, terrorist activities, or political instability in the region and the consequences thereof, such as our customers' ability to conduct operations and pay their suppliers of goods and services (such as our company), could adversely affect business conditions and could harm our results of operations.

It is currently not possible to predict the duration or severity of the ongoing war or its effects on our business, operations, and financial conditions.

The ongoing war is rapidly evolving and developing, and could disrupt our customers' business and operations.

While we have not experienced any disruptions that have materially impacted our business or results of operations, there can be no assurances that further unforeseen events will not have a material adverse effect on us or our operations in the future.

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

What changed 10-K

Item 1A. Risk Factors