What changed in this filing

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Item 1. Financial Statements

2024-09-13 compared with 2024-03-15 · 125 added, 155 removed, 319 unchanged (47% of the section changed)

29 unchanged sentences

13,714,099 and 13,714,099 shares issued;

and 13,593,766 and 13,544,228 outstanding as of January 31, 2024 and April 30, 2023, respectively

and 13,593,766 and 13,593,766 outstanding as of July 31, 2024 and April 30, 2024, respectively

Treasury stock, at cost ( 708 ) ( 708 )

8 unchanged sentences

Three Months Ended

January 31, Nine Months Ended

2024 2023 2024 2023

Oncology services revenue $ 14,061 $ 12,561

5 unchanged sentences

Total costs and operating expenses 12,732 15,113

Loss from operations ( 2,577 ) ( 2,458 ) ( 7,085 ) ( 2,735 )

Other income (loss) 58 36 ( 33 ) 9

Loss before provision for income taxes ( 2,519 ) ( 2,422 ) ( 7,118 ) ( 2,726 )

Income (loss) from operations 1,329 ( 2,552 )

Other income 5 14

Income (loss) before provision for income taxes 1,334 ( 2,538 )

Provision for income taxes 21 28

Net loss $ ( 2,530 ) $ ( 2,439 ) $ ( 7,167 ) $ ( 2,774 )

Net loss per common share outstanding

basic and diluted $ ( 0.19 ) $ ( 0.18 ) $ ( 0.53 ) $ ( 0.20 )

Net income (loss) $ 1,313 $ ( 2,566 )

Net income (loss) per common share outstanding

basic $ 0.10 $ ( 0.19 )

and diluted $ 0.09 $ ( 0.19 )

Weighted average common shares outstanding

basic and diluted 13,593,758 13,558,642 13,538,480 13,532,990

basic 13,593,766 13,506,782

and diluted 14,042,379 13,506,782

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

10 unchanged sentences

Stock-based compensation — — — — 258 — 258

Issuance of common stock on exercise of stock options 40,897 — — — 12 — 12

Repurchase of common stock ( 101,015 ) — 101,015 ( 602 ) ( 602 )

Net loss — — — — — ( 2,566 ) ( 2,566 )

Net income — — — — — 1,313 1,313

Balance July 31, 2024 13,714,099 $ 14 120,333 $ ( 708 ) $ 83,642 $ ( 83,280 ) $ ( 332 )

Stock-based compensation — — — — 53 — 53

Issuance of common stock on exercise of stock options 114,552 — — — 240 — 240

Repurchase of common stock ( 4,896 )

— 4,896 ( 32 ) — — ( 32 )

Net loss — — — — — ( 2,071 ) ( 2,071 )

Balance October 31, 2023 13,593,766 $ 14 120,333 $ ( 708 ) $ 82,741 $ ( 81,954 ) $ 93

Stock-based compensation — — — — 379 — 379

Net loss — — — — — ( 2,530 ) ( 2,530 )

Balance January 31, 2024 13,593,766 $ 14 120,333 ( 708 ) $ 83,120 $ ( 84,484 ) $ ( 2,058 )

Common Stock Treasury Stock Additional

5 unchanged sentences

Stock-based compensation — — — — 423 — 423

Net loss — — — — — ( 319 ) ( 319 )

Balance July 31, 2022 13,522,441 $ 14 — $ — $ 81,270 $ ( 72,301 ) $ 8,983

Stock-based compensation — — — — 119 — 119

Issuance of common stock on exercise of stock options 40,897 — — — 12 — 12

Net loss — — — — — ( 16 ) ( 16 )

Balance October 31, 2022 13,558,650 $ 14 — — $ 81,475 $ ( 72,317 ) $ 9,172

Stock-based compensation — — — — 331 — 331

Repurchase of common stock ( 101,015 ) — 101,015 ( 602 ) ( 602 )

Net loss — — — — — ( 2,566 ) ( 2,566 )

Balance January 31, 2023 13,558,650 $ 14 — — $ 81,806 $ ( 74,756 ) $ 7,064

Balance July 31, 2023 13,484,110 $ 14 115,437 $ ( 676 ) $ 82,448 $ ( 79,883 ) $ 1,903

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

2 unchanged sentences

(Dollars in Thousands)

Nine Months Ended

Three Months Ended

Operating activities:

Net loss $ ( 7,167 ) $ ( 2,774 )

Net income (loss) $ 1,313 $ ( 2,566 )

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

1 unchanged sentence

Depreciation and amortization expense 449 445

Loss on disposal of equipment 81 —

Operating lease right-of use assets 289 270

Provision for doubtful accounts 314 83

Allowance for doubtful accounts and estimated credit losses ( 71 ) 162

Changes in operating assets and liabilities:

12 unchanged sentences

Proceeds from exercise of options — 12

Finance lease payments ( 37 ) —

Repurchases of common stock — ( 602 )

Net cash provided by (used in) financing activities ( 382 ) 86

Net cash used in financing activities ( 37 ) ( 590 )

Increase (decrease) in cash 274 ( 5,249 )

6 unchanged sentences

Champions Oncology, Inc.

(the "Company") is a technology-enabled research organization engaged in creating technology solutions to be utilized in drug discovery and development.

(the "Company", "us", "we", and "our") is a technology-enabled research organization engaged in creating technology solutions to be utilized in drug discovery and development.

The Company's research center operates in both regulatory and non-regulatory environments and consists of a comprehensive set of computational and experimental research platforms.

3 unchanged sentences

(Italy), and Corellia A.I..

For the three and nine months ended January 31, 2024 and 2023, there were no revenues earned by these subsidiaries.

For the three months ended July 31, 2024 and 2023, there were no revenues earned by these subsidiaries.

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

1 unchanged sentence

The Company is subject to foreign exchange rate fluctuations in connection with the Company’s international operations.

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.

These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC.

Intercompany transactions and accounts have been eliminated.

Certain information related to the Company’s organization, significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States, or GAAP, has been condensed or omitted.

The April 30, 2024 condensed consolidated balance sheet in the accompanying interim condensed consolidated financial statements was derived from audited consolidated financial statements.

The accounting policies followed in the preparation of these unaudited condensed consolidated financial statements are consistent with those followed in the Company’s annual consolidated financial statements for the fiscal year ended April 30, 2024, as filed in the Company's Annual Report on Form 10-K with the SEC on July 19, 2024 (the "Annual Report").

In the opinion of management, these unaudited condensed consolidated financial statements contain all material adjustments necessary to fairly state our financial position, results of operations and cash flows for the periods presented and the presentations and disclosures herein are adequate when read in conjunction with the Company’s 2023 Annual Report.

The results of operations for the interim periods are not necessarily indicative of the results of operations for a full fiscal year.

2 unchanged sentences

Significant Accounting Policies

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 January 31, 2024 the Company had cash equivalents of approximately $ 2.9 million and, as of April 30, 2023, the Company had no cash equivalents.

The Company is subject to a concentration of credit risk in the form of its cash deposits held at multiple banking institutions.

Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000.

As of January 31, 2024 and April 30, 2023, the Company had approximately $ 3.3 million and $ 8.7 million in excess of the FDIC insured limit, respectively.

The significant accounting policies used in the preparation of these condensed consolidated financial statements are disclosed in our 2024 Annual Report and there have been no changes to the Company's significant accounting policies during the three months ended July 31, 2024.

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 and cash provided for the three months ended July 31, 2024 of $ 311,000 ;

• working capital deficit of $ 6.0 million as of July 31, 2024;

• an accumulated deficit of $ 83.3 million as of July 31, 2024.

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.

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 its securities.

For the nine months ended January 31, 2024, the Company had a net loss of approximately $ 7.2 million and cash used in operations of approximately $ 4.3 million.

As of January 31, 2024, the Company had an accumulated deficit of approximately $ 84.5 million and cash on hand of approximately $ 4.5 million.

The Company believes that cash on hand, together with expected cash to be provided from operations during fiscal year 2025, are adequate to fund operations through at least 12 months from the filing of this Quarterly Report on Form 10-Q (this "Report").

However, should the Company's revenue expectations not materialize, the Company believes it has cost reduction strategies that could be implemented without disrupting the business or restructuring the Company.

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.

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;

•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.

As of January 31, 2024 the Company had assets measured at fair value on a recurring and/or non-recurring basis as follows:

(in 000s) January 31, 2024

Level 1 Level 2 Level 3

Cash Equivalents:

Money market fund 2,854 — —

Total $ 2,854 $ — $ —

As of January 31, 2024, the Company had no liabilities measured at fair value on a recurring and/or non-recurring basis.

As of April 30, 2023, the Company had no assets or liabilities measured at fair value on a recurring and/or non-recurring basis.

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.

Earnings Per Share

2 unchanged sentences

Such dilutive shares consist of incremental shares that would be issued upon exercise of the Company’s common stock options.

As of January 31, 2024 and 2023, all of the Company's potential common stock is considered anti-dilutive.

The following table reflects the total potential share-based instruments outstanding at January 31, 2024 and 2023 including those that could have an effect on the future computation of dilution per common share, had their effect not been anti-dilutive due to the Company's net losses in the related periods:

The following table reflects these calculations.

Note, as of July 31, 2023, all of the Company's potential common stock was considered anti-dilutive.

Three Months Ended

(Dollars in Thousands) 2024 2023

Basic net income (loss) per share computation:

Net income (loss) attributable to common stockholders $ 1,313 $ ( 2,566 )

Weighted Average common shares – basic 13,593,766 13,506,782

Basic net income (loss) per share $ 0.10 $ ( 0.19 )

Diluted net income (loss) per share computation:

Net income (loss) attributable to common stockholders $ 1,313 $ ( 2,566 )

Weighted Average common shares 13,593,766 13,506,782

Incremental shares from assumed exercise of stock options 448,613 —

Adjusted weighted average share – diluted 14,042,379 13,506,782

Diluted net income (loss) per share $ 0.09 $ ( 0.19 )

The following table reflects the total potential share-based instruments outstanding at July 31, 2024 and 2023 including those that could have an effect on the future computation of dilution per common share, had their effect not been anti-dilutive due to the Company's net losses in the related periods:

Total common stock equivalents 1,131,624 1,766,752

4 unchanged sentences

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

As of January 31, 2024 and April 30, 2023, the Company provided a valuation allowance for all net deferred tax assets as it is more likely than not that the assets will not be recovered based on an insufficient history of earnings.

As of July 31, 2024 and April 30, 2024, the Company provided a valuation allowance for all net deferred tax assets as it is more likely than not that the assets will not be recovered based on an insufficient history of earnings.

The Company reflects tax benefits only if it is more likely than not that the Company will be able to sustain the tax position, based on its technical merits.

If a tax benefit meets this criterion, it is measured and recognized based on the largest amount of benefit that is cumulatively greater than 50% likely to be realized.

The Company recorded $ 181,000 of liabilities related to uncertain tax positions relative to one of its foreign operations as of January 31, 2024 and April 30, 2023.

The Company recorded $ 181,000 of liabilities related to uncertain tax positions relative to one of its foreign operations as of July 31, 2024 and April 30, 2024.

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

The Company did no t recognize interest or penalties on its consolidated statements of operations during the three and nine-month periods ended January 31, 2024 and 2023.

The Company did no t recognize interest or penalties on its consolidated statements of operations during the three month period ended July 31, 2024 and 2023.

The Company does no t anticipate unrecognized tax benefits will be recorded during the next 12 months.

The provision for income taxes for the three months ended January 31, 2024 and 2023 was $ 11,000 and $ 17,000 , respectively.

The provision for income taxes for the nine months ended January 31, 2024 and 2023 was $ 49,000 and $ 48,000 , respectively.

The provision is mainly attributable to taxable income earned in Israel and/or Italy relating to transfer pricing.

The provision for income taxes for the three months ended July 31, 2024 and 2023 was $ 21,000 and $ 28,000 , respectively.

The provision is mainly attributable to taxable income earned in Israel and/or Italy relating to transfer pricing, and U.S.

state income taxes for which net operating losses are limited.

Revenue Recognition

40 unchanged sentences

Such situations occur due to divergences between revenue recognition and the invoicing milestones which are based on predetermined payment terms.

Unbilled services are classified as a component of accounts receivable on the balance sheet.

Deferred revenue consists of unearned payments received in excess of revenue recognized.

1 unchanged sentence

Deferred revenue is classified as a current liability on the condensed consolidated balance sheet as the Company expects to recognize the associated revenue in less than one year.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, “Financial Instruments—Credit Losses” (Topic 326).

This ASU represents a significant change in the current accounting model by requiring immediate recognition of management’s estimates of current expected credit losses.

Under the prior model, losses were recognized only as they were incurred, which delayed recognition of expected losses that might not yet have met the threshold of being probable.

The Company adopted ASU 2016-03 on April 1, 2023 and the adoption did not have any material effect on our condensed consolidated financial statements and related disclosures.

Accounting Pronouncements Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, “Segment Reporting” (Topic 280):

Improvements to Reportable Segment Disclosures.

The new guidance is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

The ASU is effective retrospectively for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company is in the process of evaluating the impact that the adoption of this ASU will have on its financial statements and related disclosures, which is not expected to be material.

In December 2023, the FASB issued ASU 2023-09, “Improvements to Tax Disclosures” (Topic 740).

The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and the income taxes paid information disclosed.

The ASU is effective retrospectively for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is in the process of evaluating the impact that the adoption of this ASU will have on its financial statements and related disclosures, which is not expected to be material.

Accounts Receivable, Unbilled Services and Deferred Revenue

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

January 31, 2024 April 30, 2023

July 31, 2024 April 30, 2024 May 1, 2023

Accounts receivable $ 4,722 $ 4,886 $ 3,843

1 unchanged sentence

Total accounts receivable and unbilled services 10,262 10,827 8,836

Allowances ( 1,138 ) ( 825 )

Allowances for credit losses and bad debt ( 1,230 ) ( 1,301 ) ( 825 )

Total accounts receivable, net $ 9,032 $ 9,526 $ 8,011

Allowances for credit losses and bad debt were as follows:

Beginning balance April 30, 2024 $ 1,301

Provision for credit losses and bad debt —

Reversals for amounts subsequently collected ( 71 )

Ending balance July 31, 2024 $ 1,230

Deferred revenue was as follows (in thousands):

January 31, 2024 April 30, 2023

July 31, 2024 April 30, 2024 May 1, 2023

Deferred revenue $ 10,312 $ 12,094 $ 12,776

Deferred revenue is shown as a current liability on the Company's condensed consolidated balance sheets.

As of May 1, 2023 and 2022, respectively, the consolidated balance of net accounts receivable was $ 8.0 million and $ 9.5 million, respectively, and deferred revenue was $ 12.8 million and $ 11.1 million, respectively.

As of November 1, 2023 and 2022, respectively, the consolidated balance of net accounts receivable was $ 7.7 million and $ 9.0 million, respectively, and deferred revenue was $ 13.0 million and $ 11.2 million, respectively.

Revenue from Contracts with Customers

Oncology Services Revenue

The following table represents disaggregated revenue for the three and nine months ended January 31, 2024 and 2023:

The following table represents disaggregated revenue for the three months ended July 31, 2024 and 2023:

Three Months Ended

January 31, Nine Months Ended January 31,

2024 2023 2024 2023

Pharmacology services $ 13,069 $ 11,860

3 unchanged sentences

Other Translational Oncology Solutions ("TOS") revenue represents additional services provided to the Company's pharmaceutical and biotechnology customers, specifically flow cytometry services and software-as-a-service ("SaaS") provided via our Lumin Bioinformatics software ("Lumin").

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 and included in accounts receivable.

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 and included in deferred revenue.

Contract assets and liabilities are presented on the balance sheet on a net contract-by-contract basis at the end of each reporting period.

Property and Equipment

12 unchanged sentences

Property and equipment, net $ 5,272 $ 5,721

Depreciation and amortization expense was $ 481,000 and $ 575,000 for the three months ended January 31, 2024 and 2023, respectively.

Depreciation and amortization expense was $ 1.4 million and $ 1.7 million for the nine months ended January 31, 2024 and 2023, respectively.

Depreciation and amortization expense, excluding expense recorded under finance leases, was $ 445,000 and $ 540,000 for the three months ended January 31, 2024 and 2023, respectively.

Depreciation and amortization expense, excluding expense recorded under finance leases, was $ 1.3 million and $ 1.6 million for the nine months ended January 31, 2024 and 2023, respectively.

As of January 31, 2024 and April 30, 2023, property, plant and equipment included gross assets held under finance leases of $ 1.0 million.

Related depreciation expense was approximately $ 36,000 and $ 35,000 for the three months ended January 31, 2024 and 2023, respectively, and $ 108,000 and $ 99,000 for the nine months ended January 31, 2024 and 2023, respectively.

During the nine months ended January 31, 2024, the Company disposed of two assets and recognized a loss on disposal of equipment of $ 81,000 within other income (loss) as presented in the condensed consolidated statement of operations.

The first asset, laboratory equipment, was acquired for $ 128,000 and had accumulated depreciation of $ 62,000 , resulting in a loss of $ 66,000 upon disposal.

The second asset, acquired software, was purchased for $ 33,000 and had accumulated amortization of $ 18,000 , resulting in a loss of $ 15,000 upon disposal.

Depreciation and amortization expense was $ 449,000 and $ 445,000 for the three months ended July 31, 2024 and 2023, respectively.

Depreciation and amortization expense, excluding expense recorded under finance leases, was $ 412,000 and $ 409,000 for the three months ended July 31, 2024 and 2023, respectively.

As of July 31, 2024 and April 30, 2024, property, plant and equipment included gross assets held under finance leases of $ 1.0 million.

Related depreciation expense was approximately $ 37,000 and $ 36,000 for the three months ended July 31, 2024 and 2023, respectively.

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.

The Company capitalizes 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.

3 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 Lumin platform.

Lumin is the Company's oncology data-driven software program and data tool which operates as 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.

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 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 $ 157,000 for the three months ended January 31, 2024 and 2023, respectively, and $ 0 and $ 471,000 for the nine months ended January 31, 2024 and 2023, respectively.

Finance Lease

3 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 $ 17,800 and $ 17,100 for the three months ended January 31, 2024 and 2023, respectively, and $ 52,800 and $ 45,100 for the nine months ended January 31, 2024 and 2023, respectively.

Depreciation and amortization expense related to this finance lease was $ 18,000 and $ 17,400 for the three months ended July 31, 2024 and 2023, respectively.

During fiscal year 2022, the Company recognized a finance lease for laboratory equipment.

2 unchanged sentences

At the commencement of the commitment, 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 $ 18,700 and $ 18,000 for the three months ended January 31, 2024 and 2023, respectively, and $ 55,600 and $ 54,000 for the nine months ended January 31, 2024 and 2023, respectively.

Depreciation and amortization expense related to this finance lease was $ 19,000 and $ 18,400 for the three months ended July 31, 2024 and 2023, respectively.

The liabilities related to these finance leases are classified under other current liability and other non-current liabilities on the Company's balance sheet.

The weighted average remaining lease term of these leases is 2.36 years.

Financing lease assets (lab equipment) and lease liabilities related to our current financing leases are as follows (in thousands):

July 31, 2024 April 30, 2024

Financing lease net asset $ 333 $ 370

Current portion of financing lease liabilities

Non-current portion of financing lease liabilities 182 220

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

2025 (remaining) $ 120

Total undiscounted liabilities 346

Imputed interest ( 13 )

Present value of minimum lease payments $ 333

Refer to Note 7, Leases, for information on operating leases.

2 unchanged sentences

Three Months Ended

January 31, Nine Months Ended

2024 2023 2024 2023

General and administrative $ 185 $ 184

15 unchanged sentences

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 January 31, 2024, approximately 1.3 million shares were available for 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 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 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.

As of July 31, 2024, approximately 1.3 million shares were available for issue under this plan.

Stock Option Grants

Black-Scholes assumptions used to calculate the fair value of options granted during the three and nine months ended January 31, 2024 and 2023 were as follows:

Black-Scholes assumptions used to calculate the fair value of options granted during the three months ended July 31, 2024 and 2023 were as follows:

Three Months Ended

January 31, Nine Months Ended

2024 2023 2024 2023

Expected term in years 6

Risk-free interest rates 4.48 %

3.95 % - 4.49 %

2.87 % - 3.70 %

Volatility 62.72 %

62.83 % - 63.41 %

61.88 % - 62.58 %

Dividend yield — % — %

The weighted average fair value of stock options granted during the three months ended January 31, 2024 and 2023 was $ 3.41 and $ 4.20 , respectively.

The weighted average fair value of stock options granted during the nine months ended January 31, 2024 and 2023 was $ 3.77 and $ 4.33 , respectively.

The Company’s stock options activity for the nine months ended January 31, 2024 was a s follows:

The weighted average fair value of stock options granted during the three months ended July 31, 2024 and 2023 was $ 3.02 and $ 3.72 , respectively.

The Company’s stock options activity for the three months ended July 31, 2024 was a s follows:

Employees Non-

8 unchanged sentences

Expired — — — —

Outstanding, January 31, 2024 1,867,416 36,331 1,903,747 5.04 5.4 $ 3,068,000

Vested and expected to vest as of January 31, 2024 1,867,416 36,331 1,903,747 5.04 5.4 $ 3,068,000

Exercisable as of January 31, 2024 1,453,363 3,750 1,457,113 4.63 4.3 $ 3,011,000

Outstanding, July 31, 2024 1,883,666 36,331 1,919,997 5.04 5.0 $ 2,125,000

Vested and expected to vest as of July 31, 2024 1,883,666 36,331 1,919,997 5.04 5.0 $ 2,125,000

Exercisable as of July 31, 2024 1,551,829 3,750 1,555,579 4.74 4.1 $ 2,125,000

Share Repurchase Program

4 unchanged sentences

The program does not obligate the Company to acquire a minimum number of shares.

As of January 31, 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.

As of July 31, 2024, the Company had purchased 120,333 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.

The Company accounts for its leases under FASB ASC Topic 842, Leases.

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, if applicable, or the Company’s incremental borrowing rate.

As the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.

As the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement

date in determining the present value of lease payments.

Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term.

3 unchanged sentences

Rent expense for operating leases is recognized on a straight-line basis over the lease term from the lease commencement date through the scheduled expiration date.

Rent expense totaled $ 454,000 and $ 475,000 for the three months ended January 31, 2024 and 2023, respectively.

Rent expense totaled $ 1.4 million for both the nine months ended January 31, 2024 and 2023.

Rent expense totaled $ 454,000 for the three months ended July 31, 2024 and 2023.

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

2 unchanged sentences

The lease expires in November 2026.

The Company recognized $ 19,000 and $ 20,000 of rent expense relative to this lease for the three months ended January 31, 2024 and 2023, respectively.The Company recognized $ 57,000 and $ 62,000 of rent expense relative to this lease for the nine months ended January 31, 2024 and 2023, respectively.

The Company recognized $ 19,000 of rent expense relative to this lease for both the three months ended July 31, 2024 and 2023.

• 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.

3 unchanged sentences

This lease expires in February 2029.

The Company recognized $ 422,000 of rent expense relative to this lease for both the three months ended January 31, 2024 and 2023, and $ 1.3 million of rent expense relative to this lease for both the nine months ended January 31, 2024 and 2023.

The Company recognized $ 422,000 and $ 423,000 of rent expense relative to this lease for both the three months ended July 31, 2024 and 2023, 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.

2 unchanged sentences

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

The Company recognized $ 13,000 and $ 34,000 of rent expense relative to these leases for the three months ended January 31, 2024 and 2023, respectively, and $ 38,000 and $ 81,000 for the nine months ended January 31, 2024 and 2023, respectively.

The Company recognized $ 13,000 of rent expense relative to its current lease for both the three months ended July 31, 2024 and 2023.

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

January 31, 2024 April 30, 2023

July 31, 2024 April 30, 2024

Operating lease right-of-use assets, net

2 unchanged sentences

Non-current portion of operating lease liabilities 5,738 6,093

As of January 31 2024, the weighted average remaining operating lease term and the weighted average discount rate were 4.98 years and 5.88 %, respectively.

As of July 31, 2024, the weighted average remaining operating lease term and the weighted average discount rate were 4.49 years and 5.88 %, respectively.

As of July 31, 2023, the weighted average remaining operating lease term and the weighted average discount rate were 5.47 years and 5.87 %, respectively.

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

2025 (remaining) $ 2,180

Thereafter 2,392

Total undiscounted liabilities 13,305

1 unchanged sentence

Present value of minimum lease payments $ 7,107

The composition of total lease cost for three months ended July 31, 2024 and 2023 were as follows (in thousands):

Three Months Ended July 31,

Operating lease costs $ 429 $ 416

Financing lease costs:

Amortization of leased assets 37 36

Interest on lease liabilities 3 4

Total lease costs $ 469 $ 456

Refer to Note 5, Property and Equipment, for information on financing leases.

3 unchanged sentences

Consulting Services

During both the three months ended January 31, 2024 and 2023, the Company paid an affiliate of a Board member $ 9,000 for consulting services unrelated to his duty as a Board member.

During both the nine months ending January 31, 2024 and

2023, the Company paid an affiliate of a Board member $ 27,000 for consulting services unrelated to his duty as a Board member.

During both the three months ended July 31, 2024 and 2023, the Company paid an affiliate of a Board member $ 9,000 for consulting services unrelated to his duty as a Board member.

Such amounts are included in general and administrative expenses in the accompanying condensed consolidated statements of operations.

As of January 31, 2024, $ 0 was due to this related party.

As of July 31, 2024, $ 0 was due to this related party.

Commitments and Contingencies

12 unchanged sentences

Some of these arrangements also set forth an annual minimum royalty due regardless of tumor models used for sale.

For the three months ended January 31, 2024 and 2023, we have recognized approximately $ 114,000 and $ 21,000 , respectively, in expense related to these royalty arrangements.

For the nine months ended January 31, 2024 and 2023, we have recognized approximately $ 240,000 and $ 129,000 , respectively, in expense related to these royalty arrangements.

For the three months ended July 31, 2024 and 2023, we have recognized approximately $ 81,000 and $ 73,000 , respectively, in expense related to these royalty arrangements.

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

What changed 10-Q

Item 1. Financial Statements