What changed in this filing

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Item 9A. Controls and Procedures

2024-07-19 compared with 2023-07-24 · 171 added, 166 removed, 704 unchanged (32% of the section changed)

8 unchanged sentences

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.

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.

1 unchanged sentence

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, 2023, the year covered by this Annual Report.

Changes in Internal Controls

There were no changes in the Company’s internal controls over financial reporting during the year ended April 30, 2023, that materially affected, or were reasonably likely to materially affect the Company’s internal control over financial reporting.

There were no changes in the Company’s internal controls over financial reporting during the quarter ended April 30, 2024, that materially affected, or were reasonably likely to materially affect the Company’s internal control over financial reporting.

Other Information

16 unchanged sentences

Consolidated Statements of Operations F-4

Consolidated Statement of Changes in Stockholders' Equity F-5

Consolidated Statement of Changes in Stockholders' (Deficiency) Equity F-5

Consolidated Statements of Cash Flows F-6

52 unchanged sentences

Not Required.

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CHAMPIONS ONCOLOGY, INC.

3 unchanged sentences

(principal executive officer)

Pursuant to the requirements of 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.

Pursuant to the requirements of the Securities Exchange Act of 1934, 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

18 unchanged sentences

Consolidated Statements of Operations

Consolidated Statements of Changes in Stockholders' Equity

Consolidated Statements of Changes in Stockholders' (Deficiency) Equity

Consolidated Statements of Cash Flows

5 unchanged sentences

We have audited the accompanying consolidated balance sheets of Champions Oncology, Inc.

and Subsidiaries (the “Company") as of April 30, 2023 and 2022, 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”).

and Subsidiaries (the “Company") as of April 30, 2024 and 2023, and the related consolidated statements of operations, stockholders’ (deficiency) 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, 2024 and 2023, 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.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company has experienced net losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 2.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

19 unchanged sentences

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.

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.

1 unchanged sentence

Pharmacology services revenues for the years ended April 30, 2024 and 2023 were approximately $47.0 million and $50.7 million, respectively.

Pharmacology deferred revenue as of April 30, 2024 and 2023 was approximately $12.0 million and $12.7 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.

2 unchanged sentences

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.

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 correspondence 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

1 unchanged sentence

EISNERAMPER LLP

Iselin, New Jersey

West Palm Beach, Florida

July 19, 2024

24 unchanged sentences

Total liabilities $ 28,035 $ 29,675

Stockholders' equity:

Stockholders' (deficiency) equity:

Common stock, $ .001 par value;

5 unchanged sentences

Accumulated deficit ( 84,593 ) ( 77,317 )

Total stockholders' equity 4,636 9,096

Total liabilities and stockholders' equity $ 34,311 35,378

Total stockholders' (deficiency) equity ( 1,903 ) 4,636

Total liabilities and stockholders' (deficiency) equity $ 26,132 34,311

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

9 unchanged sentences

General and administrative 11,067 10,240

Loss on disposal of equipment 435 —

Asset impairment — 807

Total costs and operating expenses 57,511 59,126

(Loss) income from operations ( 5,256 ) 607

Other expense:

Other expense, net ( 11 ) ( 24 )

(Loss) income before income tax expense ( 5,267 ) 583

Provision for income tax 68 35

Net (loss) income $ ( 5,335 ) $ 548

Net (loss) income per common share outstanding

basic $ ( 0.39 ) $ 0.04

and diluted $ ( 0.39 ) $ 0.04

Loss from operations ( 7,356 ) ( 5,256 )

Other income (expense):

Other income (expense), net 48 ( 11 )

Loss before income tax expense ( 7,308 ) ( 5,267 )

(Benefit) provision for income tax ( 32 ) 68

Net loss $ ( 7,276 ) $ ( 5,335 )

Net loss per common share outstanding

basic and diluted $ ( 0.54 ) $ ( 0.39 )

Weighted average common shares outstanding

basic 13,541,559 13,197,170

and diluted 13,541,559 14,159,799

basic and diluted 13,547,604 13,541,559

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

CHAMPIONS ONCOLOGY, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ (DEFICIENCY) EQUITY

(In Thousands except for shares)

Stockholders'

(Deficiency) Equity

Common Stock Treasury Stock Additional

Capital Accumulated

Deficit Total

Stockholders'

Shares Amount Shares Amount

2 unchanged sentences

Issuance of common stock on exercise of stock options 36,209 — — — 85 — 85

Net income — — — — — 548 548

Repurchase of common stock — — 14,422 ( 74 ) — — ( 74 )

Net loss — — — — — ( 5,335 ) ( 5,335 )

Balance, April 30, 2023 13,558,650 $ 14 14,422 $ ( 74 ) $ 82,013 $ ( 77,317 ) $ 4,636

10 unchanged sentences

Operating activities:

Net (loss) income $ ( 5,335 ) $ 548

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

Net loss $ ( 7,276 ) $ ( 5,335 )

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

Stock-based compensation expense 1,118 864

Depreciation and amortization expense 1,867 2,246

Net gain on disposal of equipment — ( 4 )

Net loss on disposal of equipment 435 —

Operating lease right-of-use assets 1,066 952

Asset impairment — 807

Allowance for doubtful accounts 195 292

Allowance for doubtful accounts and estimated credit losses 476 195

Changes in operating assets and liabilities:

1 unchanged sentence

Prepaid expenses and other current assets ( 167 ) ( 184 )

Other long term assets ( 169 ) —

Accounts payable 465 2,465

2 unchanged sentences

Deferred revenue ( 683 ) 1,706

Net cash provided by operating activities 3,972 6,497

Net cash (used in) provided by operating activities ( 6,137 ) 3,972

Investing activities:

4 unchanged sentences

Repurchases of common stock ( 634 ) ( 74 )

Net cash provided by financing activities 11 207

Increase in cash 1,111 4,320

Finance lease payments ( 146 ) —

Net cash (used in) provided by financing activities ( 527 ) 11

(Decrease) increase in cash ( 7,500 ) 1,111

Cash, beginning of year 10,118 9,007

1 unchanged sentence

Non-cash financing and investing activities:

Purchased equipment under finance lease — 368

Right-of-use assets obtained in exchange for operating lease liabilities $ — $ 231

9 unchanged sentences

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.

The Company has four operating subsidiaries:

Champions Oncology (Israel), Limited, Champions Biotechnology U.K., Limited, Champions Oncology S.R.L., and Corellia AI, Inc.

For the years ended April 30, 2024 and 2023, there were no revenues earned by these subsidiaries.

5 unchanged sentences

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.

All intercompany balances and transactions have been eliminated in consolidation.

Foreign Currency

2 unchanged sentences

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

7 unchanged sentences

The Company maintains its cash balances in three major financial institutions.

The Company regularly monitors the financial stability of these financial institutions and believes that it

The Company regularly monitors the financial stability of these financial institutions and believes that it is not exposed to any significant credit risk in its cash.

If any liquidity and/or financial stability concerns arise with respect to

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

is not exposed to any significant credit risk in its cash.

However, in March and April 2023, certain U.S.

government banking regulators took steps to intervene in the operations of certain financial institutions due to liquidity concerns, which caused general heightened uncertainties in financial markets.

While these events have not had a material direct impact on the Company's operations, if further liquidity and financial stability concerns arise with respect to banks and financial institutions, either nationally or in specific regions, the Company's ability to access cash or enter into new financing arrangements may be threatened, which could have a material adverse effect on its business, financial condition and results of operations.

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, 2023, the Company had a net loss of approximately $ 5.3 million, an accumulated deficit of approximately $ 77.3 million, negative working capital of $ 2.3 million and cash of $ 10.1 million.

Despite the negative working capital, we believe that our cash on hand, together with expected cash flows from operations, are adequate to fund operations through at least August 2024.

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.

banks and financial institutions, either nationally or in specific regions, the Company's ability to access cash or enter into new financing arrangements may be threatened, which could have a material adverse effect on its business, financial condition and results of operations.

Liquidity and Going Concern

In accordance with Accounting Standards Codification ("ASC") Subtopic 205-40, Presentation of Financial Statements—Going Concern (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its obligations as they become due within one year after the date that the financial statements are issued.

As required under ASC 205-40, management’s evaluation should initially not take into consideration the potential mitigating effects of management’s plans that have not been fully implemented as of the date the financial statements are issued.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

In performing this evaluation, we concluded that under the standards of ASC 205-40 the following conditions raised substantial doubt about our ability to continue as a going concern:

• a history of net losses, including a net loss of $ 7.3 million for the year ending April 30 2024;

• cash used in operations of $ 6.1 million for the year ended April 30, 2024;

• working capital deficit of $ 7.9 million as of April 30, 2024;

• an accumulated deficit of $ 84.6 million.

The Company's 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.

Most recently, the Company has met these cash requirements through cash on hand, working capital management, and sales of products and services.

In the past, the Company has also received proceeds from certain private placements and public offerings of our securities.

While the Company believes it has strategies to increase revenues and reduce costs which can be implemented without disrupting the business or completely restructuring the Company, there can be no assurances.

Should the Company be required to raise additional capital or seek to obtain financing, there can be no assurance that management would be successful in raising such capital or obtaining such financing on terms acceptable to us, if at all.

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

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.

11 unchanged sentences

Refer to Footnote 4, "Property and Equipment" for a detailed discussion.

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.

The Company accounts for its leases under Financial Accounting Standards Board ("FASB") 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

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

1 unchanged sentence

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.

Amortization expense for the ROU asset associated with its finance leases is recognized on a straight-line basis over the term of the lease and interest expense associated with its finance lease is recognized on the balance of the lease liability using the effective interest method based on the estimated incremental borrowing rate.

Impairment of Long-Lived Assets

2 unchanged sentences

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

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 recognized an impairment loss of $ 807,000 for its Lumin Bioinformatics platform ("Lumin") for the year ending April 30, 2023 resulting from a recoverability analysis performed at that date.

The net book value of Lumin at April 30, 2023 is zero.

Refer to Note 4, "Property and Equipment".

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.

For the year ending April 30, 2023, the Company recognized an impairment loss of $ 807,000 for its Lumin Bioinformatics platform ("Lumin") resulting from a recoverability analysis performed at that date.

The net book value of Lumin at April 30, 2023 was zero .

The Company did no t recognized any impairment losses for the Company’s long-lived assets for the year ending April 30, 2024.

Refer to Note 4, "Property and Equipment".

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.

5 unchanged sentences

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.

The Company assesses goodwill impairment by reporting unit.

Translational Oncology Solutions ("TOS") is the only reporting unit with remaining goodwill.

Judgments regarding the existence of impairment indicators are based on legal factors, market conditions and operational performance of the businesses.

4 unchanged sentences

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.

Revenue related to deferred revenue is expected to be recognized within one year.

Other Non-Current Liabilities

1 unchanged sentence

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.

Cost of oncology services relates primarily to our 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

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Organizations 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.

2 unchanged sentences

Research and Development

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

28 unchanged sentences

As of April 30, 2024 and 2023, 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.

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

2 unchanged sentences

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

The Company accrued $ 0 for interest and penalties on the Company’s statement of operations for the years ended April 30, 2023

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

and 2022, respectively as the Company believes its recorded liability for uncertain tax positions covers any potential interest and/or penalties.

The Company accrued $ 0 for any additional interest and or penalties on the Company’s consolidated statements of operations for the years ended April 30, 2024 and 2023, respectively, as the Company believes its recorded liability for uncertain tax positions covers any potential interest and/or penalties.

The Company does not anticipate any significant unrecognized tax benefits to be recorded during the next 12 months.

For the years ended April 30, 2023 and 2022, the Company recognized a provision for income taxes of $ 68,000 and $ 35,000 , respectively.

These amounts are mainly attributable to taxable income earned in Israel relating to transfer pricing and, in fiscal 2023, state net operating loss limitations.

For the years ended April 30, 2024 and 2023, the Company recognized a benefit for income taxes of $ 32,000 and a provision for income taxes of $ 68,000 , respectively.

These amounts are mainly attributable to taxable income earned in Israel and Italy relating to transfer pricing, U.S.

state net operating loss limitations and, in fiscal 2024, net of a return to provision adjustment in Israel of $ 95,000 .

Revenue Recognition

25 unchanged sentences

Incremental Costs of Obtaining a Contract (Sales Commissions)

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

2 unchanged sentences

Variable Consideration

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

12 unchanged sentences

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

Accounting Pronouncements Adopted

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").

This update required 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 May 1, 2023 for the Company.

The Company is currently assessing the impact of this update on its consolidated financial statements but does not expect the adoption of the pronouncement to have a material impact on its balance sheet or results of operations.

The Company adopted this ASU on May 1, 2023 and the adoption did not have a material effect on its consolidated financial statements and related disclosures.

Accounts Receivable, Unbilled Services and Deferred Revenue

4 unchanged sentences

Total accounts receivable and unbilled services 10,827 8,836 10,143

allowance for doubtful accounts ( 825 ) ( 630 ) ( 338 )

allowance for doubtful accounts and estimated credit losses ( 1,301 ) ( 825 ) ( 630 )

Total accounts receivable, net $ 9,526 $ 8,011 $ 9,513

Deferred revenue was as follows (in thousands):

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

April 30, 2024 April 30, 2023

1 unchanged sentence

Deferred revenue is shown as a current liability on the Company's balance sheet.

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Property and Equipment

11 unchanged sentences

Depreciation and amortization expense, excluding expense recorded under finance leases, was $ 1.7 million and $ 2.1 million for the years ended April 30, 2024 and 2023, respectively.

As of April 30, 2023 and 2022, property, plant and equipment included gross assets held under finance leases of $ 1.0 million and $ 713,000 , respectively.

As of April 30, 2024 and 2023, property, plant and equipment included gross assets held under finance leases of $ 1.0 million, respectively.

Related depreciation expense for these assets was $ 146,000 and $ 135,000 for the years ended April 30, 2024 and 2023, respectively.

During the year ended April 30, 2024, the Company disposed of lab equipment with a cost of $ 542,000 and accumulated depreciation of $ 107,000 as of the disposal date, resulting in a loss on disposal of equipment recorded of $ 435,000 .

There were no disposals and therefore no gain or loss recorded during the year ended April 30, 2023.

Capitalized software development costs under a hosting arrangement

6 unchanged sentences

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 bioinformatics platform, Lumin.

Lumin is the Company's 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.

There are no capitalized software development costs classified as assets in progress as of April 30 2023 or 2022.

The total cost capitalized gross asset investment for the Lumin platform that was launched and placed into service was $ 1.9 million.

Ordinary amortization expense related to this asset addition was $ 630,000 and $ 317,000 for the years ended April 30, 2023 and 2022, respectively.

During the fourth quarter of fiscal 2023, the Company assessed the recoverability of the Lumin capitalized software development costs by comparing the forecasted future revenues from Lumin sales, based on management’s best estimates and using appropriate assumptions and projections, to the carrying amount of the capitalized asset.

The Company considered several factors in this analysis including the decrease in Lumin revenue growth from the prior year, the deceleration of new Lumin bookings in the current year, and the strategic consideration for additional capital investment into the platform, sales team, and marketing campaigns to bolster awareness and growth.

As the carrying value was determined not to be recoverable from future

The Company capitalized development and implementation costs in accordance with accounting guidance for its bioinformatics platform, Lumin.

Lumin is the Company's oncology data-driven software program and data tool which operates as Software as a Service (SaaS).

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

revenues, an impairment loss was recognized for the year ending April 30, 2023 equal to the amount by which the carrying amount exceeded the future revenues, or, its net book value at that date of $ 807,000 .

coding of the software development.

Total capitalized gross asset costs for the Lumin platform that was launched and placed into service were $ 1.9 million.

During the fourth quarter of fiscal year 2023, an impairment loss for Lumin was recognized equal to the amount by which the carrying amount exceeded the future net revenues, or, its net book value at April 30, 2023 of $ 807,000 .

Amortization expense related to this asset was $ 0 and $ 630,000 for the years ended April 30, 2024 and 2023, respectively.

Finance Lease

4 unchanged sentences

Depreciation and amortization expense related to this finance lease was $ 75,000 and $ 72,000 for the years ended April 30, 2024 and 2023, respectively.

Interest on the related finance lease liability was approximately $ 6,000 and $ 8,000 for the years ended April 30, 2024 and 2023, respectively.

During fiscal 2023, the Company recognized a finance lease for laboratory equipment.

2 unchanged sentences

The present value of the minimum future obligations of $ 368,000 was calculated based on an interest rate of 3.5 %.

Depreciation and amortization expense related to this finance lease was $ 63,000 and zero for the years ended April 30, 2023 and 2022, respectively.

Depreciation and amortization expense related to this finance lease was $ 71,000 and $ 63,000 for the years ended April 30, 2024 and 2023, respectively.

Interest on the related finance lease liability was approximately $ 9,000 and $ 11,000 for the years ended April 30, 2024 and 2023, respectively.

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

Total undiscounted liabilities 387

Imputed interest ( 16 )

Present value of minimum lease payments $ 371

Revenue from Contracts with Customers

7 unchanged sentences

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.

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Contract Balances

6 unchanged sentences

Significant Customers

For the years ended April 30, 2023 and 2022, one of our customers accounted for more than 10% of our total revenue, at 14 % and 13 %, respectively.

For the year ended April 30, 2024, one of our customers accounted for more than 10% of our total revenue, at 10 %.

For the year ended April 30, 2023, one of our customers accounted for more than 10% of our total revenue, at 14 %.

This was the same customer for both years.

As of April 30, 2024, one customer accounted for 12 % of our total accounts receivable balance.

1 unchanged sentence

Commitments and Contingencies

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Legal Matters

13 unchanged sentences

Stock-based Payments

Stock-based compensation in the amount of $ 864,000 and $ 912,000 was recognized for years ended April 30, 2023 and 2022, respectively.

Stock-based compensation in the amount of $ 1.1 million and $ 864,000 was recognized for years ended April 30, 2024 and 2023, respectively.

Stock-based compensation costs were recorded as follows (in thousands):

CHAMPIONS ONCOLOGY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended April 30,

4 unchanged sentences

Total stock-based compensation expense $ 1,118 $ 864

The Company has in place a 2021 Equity Incentive Plan, 2010 Equity Incentive Plan and 2008 Equity Incentive Plan ("the Plans").

The Company has in place a 2021 Equity Incentive Plan and 2010 Equity Incentive Plan ("the Plans").

In general, these plans provide for stock-based compensation to the Company’s employees, directors and non-employees.

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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 expire no later than ten years from the date of grant and the awards vest as determined by the Board of Directors (the "Board") or Chief Executive Officer.

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.

As of April 30, 2024, approximately 1.3 million shares were left to issue under this plan.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2010 Equity Incentive Plan

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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 expire no later than ten years from the date of grant and the awards vest as determined by the Board.

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.

On December 12, 2013, the Compensation Committee of the Board (the "Committee") 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 were 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 was 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 were also to receive an annual grant of a five-year option to purchase 1,667 shares of the Company’s common stock.

During fiscal year 2021, the plan was modified to an annual base compensation of $ 100,000 for each Board Director which could be taken in either company options or a combination of company options and cash, not to exceed $ 35,000 .

During fiscal year 2021, the Committee adopted the Director Compensation Plan of 2021 (the "2021 Plan").

Under the 2021 Plan, independent directors are entitled to an annual base compensation of $ 100,000 which can be received in either ten-year company options or a combination of company options and cash, not to exceed $ 35,000 .

The Chairman of the Board’s annual compensation was set at an equivalent of $ 150,000 .

Compensation for independent directors who serve as chairperson of a committee was set at an equivalent of between $ 110,000 to $ 120,000 .

All options issued under the Director Plan vest quarterly at a rate of 25 %.

All options issued under the 2021 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 compensation upon joining the Board equal to a pro-rata equivalent for the remainder of the year.

Options issued under the Director Plan are now issued pursuant to the 2021 Equity Plan.

Options issued under the 2021 Plan are 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, 2023 and 2022 were as follows:

Black-Scholes weighted average assumptions used to calculate the fair value of options granted during the years ended April 30, 2024 and 2023 were as follows:

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Year Ended April 30,

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The Company’s stock options activity and related information as of and for the years ended April 30, 2024 and 2023 is as follows:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Employees Non-

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1,436,932 1,875 1,438,807 4.35 3.8 $ 2,681,000

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Share Repurchase Program

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As of April 30, 2024, the Company had purchased approximately 120,300 shares of its common stock, at an average price of $ 5.73 per share, totaling approximately $ 708,000 and leaving an available balance of approximately $ 4.3 million authorized by the Board for use in the program as of that date.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Provision for Income Taxes

The components of the provision for income taxes are as follows (in thousands):

Provision for (Benefit from) Income Taxes

The components of the (benefit) provision for income taxes are as follows (in thousands):

Year Ended April 30, 2024

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Significant components of the Company’s deferred tax assets and liabilities as of April 30, 2024 and 2023 consist of the following (in thousands):

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As of April 30,

Accrued liabilities $ 1,269 $ 273

Right of use, net asset/liability 403 316

Operating leases 279 403

Depreciation and amortization ( 318 ) ( 297 )

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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, 2024 and 2023.

For the years ended April 30, 2023 and 2022, the Company recorded a valuation allowance

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

of $ 16.8 million and $ 15.5 million, respectively.

For the years ended April 30, 2024 and 2023, the Company recorded a valuation allowance of $ 18.1 million and $ 16.8 million, respectively.

The net changes in the valuation allowance of $ 1.4 million and $ 1.3 million during the fiscal years ended April 30, 2024 and 2023, respectively, were mainly due to increases in the deferred tax asset related to capitalized research expenses and other timing differences.

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Balance, end of year $ 181 $ 181

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of April 30, 2024 and 2023, the above amounts of $ 181,000 for each fiscal year were included in other long-term liabilities.

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A reconciliation of net income and number of shares used in computing basic and diluted earnings per share was as follows:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended April 30,

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

Net income (loss) attributable to common stockholders $ ( 5,335 ) $ 548

Weighted Average common shares - basic 13,541,559 13,197,170

Basic net income (loss) per share $ ( 0.39 ) $ 0.04

Diluted income (loss) per share computation

Net income (loss) attributable to common stockholders $ ( 5,335 ) $ 548

Income (loss) available to common stockholders $ ( 5,335 ) $ 548

Weighted Average common shares 13,541,559 13,197,170

Incremental shares from assumed exercise of warrants and stock options — 962,629

Adjusted weighted average share – diluted 13,541,559 14,159,799

Diluted net income (loss) per share $ ( 0.39 ) $ 0.04

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

Net loss attributable to common stockholders $ ( 7,276 ) $ ( 5,335 )

Weighted Average common shares - basic and diluted 13,547,604 13,541,559

Basic and diluted net loss per share $ ( 0.54 ) $ ( 0.39 )

The following table reflects the total potential stock-based instruments outstanding at April 30, 2024 and 2023 that could have an effect on the future computation of dilution per common share.

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For both years ended April 30, 2024 and 2023, the Company paid a member of its Board of Directors $ 36,000 for consulting services unrelated to his duties as a board member.

During the years ended April 30, 2023 and 2022, the Company paid another board member zero 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.

All of the amounts paid to these related parties have been recognized in expense in the period the services were performed within general and administrative expenses.

The Company accounts for its leases under ASC 842.

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The Company recognizes rent expense on a straight-line basis over the lease term for these short-term leases.

The Company has determined that no material

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embedded leases exist.

The Company has determined that no material embedded leases exist.

Under ASC 842, the Company determines if an arrangement is a lease at inception.

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Operating Leases

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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 for each the years ended April 30, 2023 and 2022.

Rent expenses totaled $ 1.8 million and $ 1.9 million for the years ended April 30, 2024 and 2023, respectively.

The Company leases the following facilities:

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During fiscal 2023, the Company executed a new lease to consolidate its office and laboratory space at a new nearby location in Italy.

The lease expires October 31, 2028 and it replaces the previous two leases, which were terminated.

Upon new lease execution, the Company recognized an operating ROU asset and related operating lease liability for the lab and office space of $ 231,000 each, respectively.

Upon termination of the office space lease, the Company recognized a reduction in the related net operating ROU asset and operating lease liability of approximately $ 41,000 .

Upon termination of the laboratory space lease, the Company recognized a reduction in the related net operating ROU asset and operating lease liability of approximately $ 20,000 .

The lease expires October 31, 2028 and it replaces the previous two leases, which were terminated during fiscal 2023.

The Company recognized $ 50,000 and $ 98,000 of rent expense associated with the leases in Italy for fiscal 2024 and 2023, respectively.

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As of April 30, 2024, the weighted average remaining operating lease term and the weighted average discount rate were 4.7 years and 5.88 %, respectively.

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

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Thereafter 2,390

As of April 30, 2023, the weighted average remaining operating lease term and the weighted average discount rate were 5.7 years and 5.82 %, respectively.

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

Total undiscounted liabilities 14,027

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Present value of minimum lease payments $ 7,430

The composition of total lease cost for the years ended April 30, 2024 and 2023 were as follows (in thousands):

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Year Ended April 30

Operating lease costs $ 1,680 $ 1,566

Financing lease costs:

Amortization of leased assets 146 135

Interest on lease liabilities 15 19

Total lease costs $ 1,841 $ 1,720

Refer to Note 4, Property and Equipment, for more information on financing leases.

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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**

31.1 Certification of the Princ ipal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Ex change Act of 1934 , as adopted pursuant to Section 302 of the S arbanes -Oxley Act of 2002 *

31.2 Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1 Section Cert ification of Principal Execu tive Officer and the Principal Financial Officer pursuant to 18 U.S.C.

1350 , as a dopted pursuant to Section 906 of the Sarbanes -Oxley Act of 2002 **

97 Policy Related to Recovery of Erroneously Awarded Compensation, adopted December 1, 2023*

101.INS* XBRL Instance Document.

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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 9A. Controls and Procedures