What changed in this filing

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Item 1. Financial Statements

2024-12-16 compared with 2024-09-13 · 107 added, 60 removed, 384 unchanged (30% of the section changed)

29 unchanged sentences

13,819,236 and 13,714,099 shares issued;

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

and 13,698,903 and 13,593,766 outstanding as of October 31, 2024 and April 30, 2024, respectively

Treasury stock, at cost ( 708 ) ( 708 )

8 unchanged sentences

Three Months Ended

October 31, Six Months Ended

2024 2023 2024 2023

Oncology services revenue $ 13,489 $ 11,573 $ 27,550 $ 24,134

6 unchanged sentences

Income (loss) from operations 732 ( 1,955 ) 2,061 ( 4,507 )

Other income 5 14

Other income (expense) 7 ( 105 ) 11 ( 91 )

Income (loss) before provision for income taxes 739 ( 2,060 ) 2,072 ( 4,598 )

21 unchanged sentences

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

Stock-based compensation — — — — 9 — 9

Issuance of common stock on exercise of stock options 105,137 — — — 276 — 276

Net income — — — — — 728 728

Balance October 31, 2024 13,819,236 $ 14 120,333 $ ( 708 ) $ 83,927 $ ( 82,552 ) $ 681

Common Stock Treasury Stock Additional

9 unchanged sentences

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

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

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

2 unchanged sentences

(Dollars in Thousands)

Three Months Ended

Six Months Ended

Operating activities:

Net income (loss) $ 2,041 $ ( 4,637 )

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

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

Stock-based compensation 267 476

Depreciation and amortization expense 848 929

Loss on disposal of equipment — 65

Operating lease right-of use assets 583 502

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

Allowance for doubtful accounts and reversal of provision for credit losses ( 280 ) 234

Changes in operating assets and liabilities:

14 unchanged sentences

Repurchases of common stock — ( 634 )

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

Net cash provided by (used in) financing activities 202 ( 456 )

Increase (decrease) in cash 136 ( 4,605 )

12 unchanged sentences

(Italy), and Corellia A.I..

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

For the three and six months ended October 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.

13 unchanged sentences

Significant Accounting Policies

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

2 unchanged sentences

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 has experienced negative operating cash flows and has incurred substantial operating losses from its activities, until recently.

The Company also has a working capital deficit and an accumulated deficit of $ 4.8 million and $ 82.6 million, respectively, as of October 31, 2024.

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

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.

1 unchanged sentence

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.

Such conditions raise substantial doubts about the Company’s ability to continue as a going concern.

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

Earnings Per Share

3 unchanged sentences

The following table reflects these calculations.

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

As of October 31, 2023, all of the Company's potential common stock was considered anti-dilutive due to the Company's net losses in the related period.

Three Months Ended

October 31, Six Months Ended October 31,

(Dollars in Thousands) 2024 2023 2024 2023

9 unchanged sentences

Diluted net income (loss) per share $ 0.05 $ ( 0.15 ) $ 0.15 $ ( 0.34 )

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:

The following table reflects the total potential common stock instruments outstanding at October 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.

Total common stock equivalents 907,979 1,831,867

4 unchanged sentences

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

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.

As of October 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 July 31, 2024 and April 30, 2024.

The Company recorded $ 181,000 of liabilities related to uncertain tax positions relative to one of its foreign operations as of October 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 month period ended July 31, 2024 and 2023.

The Company did no t recognize interest or penalties on its consolidated statements of operations during the three or six month periods ended October 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 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.

The provision for income taxes for both the three months ended October 31, 2024 and 2023 was $ 11,000 .

The provision for income taxes for the six months ended October 31, 2024 and 2023 was $ 31,000 and $ 39,000 , 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.

33 unchanged sentences

Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

The estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company.

The estimate of variable consideration and determination of whether to include

estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company.

Trade Receivables, Unbilled Services and Deferred Revenue

9 unchanged sentences

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.

Accounting Pronouncements Adopted

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period’s presentation.

Recently Issued Accounting Pronouncements

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

7 unchanged sentences

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 November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures" (Subtopic 220-40) "Disaggregation of Income Statement Expenses".

The new guidance is intended to enhance transparency and disclosures by requiring public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.

The ASU is effective for annual reporting periods after December 15, 2026, and for interim reporting periods beginning December 15, 2027, 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)

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

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

Accounts receivable $ 4,857 $ 4,886 $ 3,843

6 unchanged sentences

Provision for credit losses and bad debt —

Reversals for amounts subsequently collected ( 71 )

Ending balance July 31, 2024 $ 1,230

Reversal of provision for credit losses and bad debt, net ( 209 )

Reversal for amounts subsequently collected ( 71 )

Ending balance October 31, 2024 $ 1,021

Deferred revenue was as follows (in thousands):

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

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

Deferred revenue $ 10,220 $ 12,094 $ 12,776

1 unchanged sentence

Oncology Services Revenue

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

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

Three Months Ended

October 31, Six Months Ended October 31,

2024 2023 2024 2023

Pharmacology services $ 12,498 $ 10,876 $ 25,567 $ 22,735

17 unchanged sentences

Property and equipment, net $ 4,967 $ 5,721

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.

Depreciation and amortization expense was $ 399,000 and $ 484,000 for the three months ended October 31, 2024 and 2023, respectively.

Depreciation and amortization expense, excluding expense recorded under finance leases, was $ 362,000 and $ 448,000 for the three months ended October 31, 2024 and 2023, respectively.

Depreciation and amortization expense was $ 848,000 and $ 929,000 for the six months ended October 31, 2024 and 2023, respectively.

Depreciation and amortization expense, excluding expense recorded under finance leases, was $ 774,000 and $ 857,000 for the six months ended October 31, 2024 and 2023, respectively.

As of October 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 October 31, 2024 and 2023, respectively.

Related depreciation expense was approximately $ 74,000 and $ 72,000 for the six months ended October 31, 2024 and 2023, respectively.

Capitalized Software Development Costs Under a Hosting Arrangement

11 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 $ 18,000 and $ 17,400 for the three months ended July 31, 2024 and 2023, respectively.

Depreciation and amortization expense related to this finance lease was $ 18,000 and $ 17,600 for the three months ended October 31, 2024 and 2023, respectively, and $ 36,000 and $ 35,000 for the six months ended 2024 and 2023, respectively.

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

1 unchanged sentence

Cash payments for this lease are in the form of consideration for purchasing lab supplies under a purchase commitment agreement.

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 $ 19,000 and $ 18,400 for the three months ended July 31, 2024 and 2023, respectively.

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 $ 19,000 and $ 18,500 for the three months ended October 31, 2024 and 2023, respectively, and $ 38,000 and $ 36,900 for the six months ended 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.

1 unchanged sentence

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

October 31, 2024 April 30, 2024

Financing lease net asset $ 296 $ 370

10 unchanged sentences

Three Months Ended

October 31, Six Months Ended

2024 2023 2024 2023

General and administrative $ ( 95 ) $ 31 $ 90 $ 215

13 unchanged sentences

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 Company's 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 Company's 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.

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

As of October 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 months ended July 31, 2024 and 2023 were as follows:

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

Three Months Ended

October 31, Six Months Ended

2024 2023 2024 2023

Expected term in years 6

Risk-free interest rates 3.58 % - 3.77 %

3.58 % - 4.48 %

3.95 % - 4.49 %

Volatility 59.47 % - 59.57 %

59.47 % - 62.72 %

62.83 % - 63.30 %

Dividend yield — % — % — % — %

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:

The weighted average fair value of stock options granted during the three months ended October 31, 2024 and 2023 was $ 2.48 and $ 4.02 , respectively.

The weighted average fair value of stock options granted during the six months ended October 31, 2024 and 2023 was $ 2.49 and $ 3.95 , respectively.

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

Employees Non-

8 unchanged sentences

Expired ( 1,500 ) — ( 1,500 ) 6.11

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

Outstanding, October 31, 2024 1,667,779 36,331 1,704,110 4.96 4.8 $ 1,275,000

Vested and expected to vest as of October 31, 2024 1,667,779 36,331 1,704,110 4.96 4.8 $ 1,275,000

Exercisable as of October 31, 2024 1,566,097 3,750 1,569,847 4.94 4.4 $ 1,275,000

Share Repurchase Program

4 unchanged sentences

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

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.

As of October 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 for the three months ended July 31, 2024 and 2023.

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

Rent expense totaled $ 907,000 for the six months ended October 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 of rent expense relative to this lease for both the three months ended July 31, 2024 and 2023.

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

The Company recognized $ 38,000 of rent expense relative to this lease for both the six months ended October 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 and $ 423,000 of rent expense relative to this lease for both the three months ended July 31, 2024 and 2023, respectively.

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

The Company recognized $ 843,000 and $ 846,000 of rent expense relative to this lease for the six months ended October 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 of rent expense relative to its current lease for both the three months ended July 31, 2024 and 2023.

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

The Company recognized $ 25,000 and $ 26,000 of rent expense relative to this lease for the six months ended October 31, 2024 and 2023, respectively.

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

July 31, 2024 April 30, 2024

October 31, 2024 April 30, 2024

Operating lease right-of-use assets, net

2 unchanged sentences

Non-current portion of operating lease liabilities 5,374 6,093

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.

As of October 31, 2024, the weighted average remaining operating lease term and the weighted average discount rate were 4.24 years and 5.88 %, respectively.

As of October 31, 2023, the weighted average remaining operating lease term and the weighted average discount rate were 5.22 years and 5.87 %, respectively.

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

3 unchanged sentences

Present value of minimum lease payments $ 6,775

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,

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

Three Months Ended October 31, Six Months Ended October 31,

2024 2023 2024 2023

Operating lease costs $ 432 $ 420 $ 861 $ 834

8 unchanged sentences

Consulting Services

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.

During the three months ended October 31, 2024 and 2023, the Company recognized $ 6,000 and $ 9,000 , respectively, for consulting services provided by an affiliate of a Board member, unrelated to his duty as a Board member.

During the six months ended October 31, 2024 and 2023, the Company recognized $ 15,000 and $ 18,000 , respectively, for consulting services provided by an affiliate of a Board member, 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 July 31, 2024, $ 0 was due to this related party.

As of October 31, 2024, $ 3,000 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 July 31, 2024 and 2023, we have recognized approximately $ 81,000 and $ 73,000 , respectively, in expense related to these royalty arrangements.

For the three months ended October 31, 2024 and 2023, we have recognized approximately $ 104,000 and $ 53,200 , respectively, in expense related to these royalty arrangements.

For the six months ended October 31, 2024 and 2023, we have recognized approximately $ 185,000 and $ 126,200 , respectively, in expense related to these royalty arrangements.

Subsequent Events

In December 2024, the Company executed a licensing agreement under which the Company will license and provide access to certain of its PDX data in exchange for approximately $ 5.0 million.

Within the agreement, the customer has the option to license additional data and models for an another $ 3.0 million.

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