CHAMPIONS ONCOLOGY, INC. 10-K

Item 9A. Controls and Procedures Management's Report on Disclosure Controls and Procedures Our management, under the supervision and with the participation of our Principal Executive Officer (our Chief Executive Officer) and Principal Financial Officer (our Chief Financial Officer), has evaluated the effectiveness of our disclosure controls and procedures as of April 30, 2025, the end of our fiscal year covered by this Annual Report. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of April 30, 2025, our Chief Executive Officer and Chief Financial Officer have concluded that, as of April 30, 2025, our disclosure controls and procedures are effective. Management’s Annual Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. This rule defines internal control over financial reporting as a process designed by, or under the supervision of, Company management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Management has assessed the effectiveness of our internal control over financial reporting using the components established in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. 21 A system of internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A material weakness is any deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our company’s annual or interim financial statements will not be prevented or detected on a timely basis. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was effective as of April 30, 2025, the end of the fiscal 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 quarter ended April 30, 2025, that materially affected, or were reasonably likely to materially affect the Company’s internal control over financial reporting. Item 9B. Other Information None . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not Applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this Item will be contained in our 2025 Proxy Statement and such information is incorporated herein by this reference. 22 Item 11. Executive Compensation The information required by this Item will be contained in our 2025 Proxy Statement and such information is incorporated herein by this reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item will be contained in our 2025 Proxy Statement and such information is incorporated herein by this reference. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item will be contained in our 2025 Proxy Statement and such information is incorporated herein by this reference. Item 14. Principal Accounting Fees and Services The information required by this Item will be contained in our 2025 Proxy Statement and such information is incorporated herein by this reference. PART IV Item 15. Exhibits and Financial Statement Schedules (a) The following documents are filed as part of this Annual Report: 1. Financial Statements Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets F-3 Consolidated Statements of Operations F-4 Consolidated Statement of Changes in Stockholders' Equity (Deficiency) F-5 Consolidated Statements of Cash Flows F-6 Notes to Consolidated Financial Statements F-7 2. Financial Statement Schedules All schedules have been omitted because they are not applicable. 3. Exhibits required to be filed by Item 601 of Regulation S-K. We hereby file as part of this Annual Report the exhibits listed in the attached Exhibit Index. Exhibits that are incorporated herein by reference can be inspected on the SEC website at www.sec.gov. Item 16. Form 10-K Summary Not Required. 23 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID# 274 ) F- 2 Consolidated Balance Sheets F- 4 Consolidated Statements of Operations F- 5 Consolidated Statements of Changes in Stockholders' Equity (Deficiency) F- 6 Consolidated Statements of Cash Flows F- 7 Notes to Consolidated Financial Statements F- 8 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Champions Oncology, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Champions Oncology, Inc. and Subsidiaries (the “Company”) as of April 30, 2025 and 2024, and the related consolidated statements of operations, stockholders’ equity (deficiency), 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, 2025 and 2024, and the consolidated results of their operations and their cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates . Revenue Recognition As described further in Note 2 to the financial statements, revenues are primarily derived from contracts with customers to provide pharmacology services with payments based on fixed fee arrangements. During the year ended April 30, 2025, the Company recorded $4.5 million of license revenue from a first-time contract for the sale of a license to access certain of the Company's PDX data. We identified the assessment of the accounting for the new license agreement as a critical audit matter due to the complexity in assessing the revenue contract, which requires management to interpret and apply complex terms of the agreements and the appropriate accounting guidance. As such, there was a high degree of auditor judgement and subjectivity, and significant audit effort was required in performing procedures to evaluate management’s conclusions and determination of the amounts to be recognized. Addressing the critical audit matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included, among others, (i) obtaining an understanding of and evaluating the design of controls related to revenue recognition; (ii) obtaining the agreement and evaluating the terms and conditions of the agreement and assessing the reasonableness of management’s interpretation and application of the appropriate accounting guidance; and (iii) performing substantive testing over the recognition of the revenue including the determination of the transaction price, allocation of the price and fulfillment of the performance obligation. /s/ EisnerAmper LLP We have served as the Company’s auditor since 2015. EISNERAMPER LLP Iselin, New Jersey July 23, 2025 CHAMPIONS ONCOLOGY, INC. CONSOLIDATED BALANCE SHEETS AS OF APRIL 30 (In Thousands except for shares) 2025 2024 ASSETS Current assets: Cash $ 9,785 $ 2,618 Accounts receivable, net 11,234 9,526 Prepaid expenses and other current assets 1,350 1,495 Total current assets 22,369 13,639 Operating lease right-of-use assets, net 5,080 6,252 Property and equipment, net 4,375 5,721 Other long term assets 185 185 Goodwill 335 335 Total assets $ 32,344 $ 26,132 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) Current liabilities: Accounts payable $ 4,248 $ 5,800 Accrued liabilities 2,556 2,160 Current portion of operating lease liabilities 1,471 1,337 Other current liabilities 135 150 Deferred revenue 15,443 12,094 Total current liabilities 23,853 21,541 Non-current portion operating lease liabilities 4,634 6,093 Other non-current liabilities 85 401 Total liabilities $ 28,572 $ 28,035 Stockholders' equity (deficiency): Common stock, $ .001 par value; 200,000,000 shares authorized; 13,897,503 and 13,714,099 shares issued; and 13,777,170 and 13,593,766 shares outstanding at April 30, 2025 and 2024, respectively 14 14 Treasury Stock, at cost ( 708 ) ( 708 ) Additional paid-in capital 84,358 83,384 Accumulated deficit ( 79,892 ) ( 84,593 ) Total stockholders' equity (deficiency) 3,772 ( 1,903 ) Total liabilities and stockholders' equity (deficiency) $ 32,344 26,132 The accompanying notes are an integral part of these Consolidated Financial Statements. CHAMPIONS ONCOLOGY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Thousands Except Share and Per Share Amounts) Year Ended April 30, 2025 2024 Oncology revenue $ 56,944 $ 50,155 Costs and operating expenses: Cost of oncology revenue 28,389 29,401 Research and development 6,825 9,544 Sales and marketing 7,545 7,064 General and administrative 9,339 11,067 Loss on disposal of equipment 293 435 Total costs and operating expenses 52,391 57,511 Income (loss) from operations 4,553 ( 7,356 ) Other income (expense): Other income, net 73 48 Income (loss) before income tax expense 4,626 ( 7,308 ) Benefit for income tax ( 75 ) ( 32 ) Net income (loss) $ 4,701 $ ( 7,276 ) Net income (loss) per common share outstanding basic $ 0.34 $ ( 0.54 ) diluted $ 0.33 $ ( 0.54 ) Weighted average common shares outstanding basic 13,659,786 13,547,604 diluted 14,266,781 13,547,604 The accompanying notes are an integral part of these Consolidated Financial Statements. CHAMPIONS ONCOLOGY, INC. CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ (DEFICIENCY) EQUITY (In Thousands except for shares) Total Stockholders' Equity (Deficiency) Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Shares Amount Shares Amount Balance, April 30, 2023 13,558,650 $ 14 14,422 $ ( 74 ) $ 82,013 $ ( 77,317 ) $ 4,636 Stock-based compensation expense — — — — 1,118 — 1,118 Issuance of common stock on exercise of stock options 155,449 — — — 253 — 253 Repurchase of common stock — — 105,911 ( 634 ) — — ( 634 ) Net loss — — — — — ( 7,276 ) ( 7,276 ) Balance, April 30, 2024 13,714,099 $ 14 120,333 $ ( 708 ) $ 83,384 $ ( 84,593 ) $ ( 1,903 ) Stock-based compensation expense — — — — 654 — 654 Issuance of common stock on exercise of stock options 183,404 — — — 320 — 320 Net income — — — — — 4,701 4,701 Balance, April 30, 2025 13,897,503 $ 14 120,333 $ ( 708 ) $ 84,358 $ ( 79,892 ) $ 3,772 The accompanying notes are an integral part of these Consolidated Financial Statements. CHAMPIONS ONCOLOGY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) Year Ended April 30, 2025 2024 Operating activities: Net income (loss) $ 4,701 $ ( 7,276 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Stock-based compensation expense 654 1,118 Depreciation and amortization expense 1,640 1,867 Net loss on disposal of equipment 293 435 Decrease in uncertain tax position ( 181 ) — Operating lease right-of-use assets 1,172 1,066 Allowance and estimated credit losses ( 272 ) 476 Changes in operating assets and liabilities: Accounts receivable ( 1,436 ) ( 1,991 ) Prepaid expenses and other current assets 144 ( 167 ) Other long term assets — ( 169 ) Accounts payable ( 1,749 ) 465 Accrued liabilities 395 ( 109 ) Operating lease liabilities ( 1,324 ) ( 1,169 ) Deferred revenue 3,349 ( 683 ) Net cash provided by (used in) operating activities 7,386 ( 6,137 ) Investing activities: Purchase of property and equipment ( 389 ) ( 836 ) Net cash used in investing activities ( 389 ) ( 836 ) Financing activities: Proceeds from exercise of options 320 253 Repurchases of common stock — ( 634 ) Finance lease payments ( 150 ) ( 146 ) Net cash provided by (used in) financing activities 170 ( 527 ) Increase (decrease) in cash 7,167 ( 7,500 ) Cash, beginning of year 2,618 10,118 Cash, end of year $ 9,785 $ 2,618 Non-cash investing activities: Equipment purchased in accounts payable 197 — The accompanying notes are an integral part of these Consolidated Financial Statements. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Organization and Basis of Presentation Background Champions Oncology, Inc. (the “Company”), is engaged in drug discovery and development through data-driven research strategies and innovative pharmacology, biomarker and data platforms. The Company’s TumorGraft Technology Platform ("the "Platform”), a comprehensive Bank of unique, well characterized "Patient Derived XenoGrafts" (PDX) models, is an approach to personalizing cancer care based upon the implantation of human tumors in immune-deficient mice. The Company provides a technology platform to pharmaceutical and biotechnology companies using proprietary TumorGraft studies, which the Company believes may be predictive of how drugs may perform in clinical settings. Utilizing the Platform, the Company offers multiple services to pharmaceutical and biotechnology companies seeking personalized approaches to drug development. By performing studies to predict the efficacy of oncology drugs, our Platform is designed to facilitate drug discovery with lower costs and increased speed of drug development as well as increased adoption of existing drugs. The Company has 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, 2025 and 2024, there were no revenues earned by these subsidiaries. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company operates in one reportable business segment. Note 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Foreign Currency The Company’s foreign subsidiaries' functional currency is the U.S. dollar. Transaction gains and losses are recognized in earnings. The Company is subject to foreign exchange rate fluctuations in connection with the Company’s international operations. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experience, our observance of trends in particular areas and information or valuations and various other assumptions that we believe to be reasonable under the circumstances and which form the basis for making judgments about the carrying value of assets and liabilities that may not be readily apparent from other sources. Actual amounts could differ significantly from amounts previously estimated. Cash and Cash Equivalents The Company considers only those investments which are highly liquid, readily convertible to cash, and with original maturities of three months or less to be cash equivalents. As of April 30, 2025 and 2024, the Company had cash balances of $ 9.8 million and $ 2.6 million, respectively, and no cash equivalents. The Company maintains its cash balances in three major financial institutions which exceed federally insured limits. 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 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. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Liquidity Our liquidity needs have typically arisen from the funding of our research and development programs and the launch of new products, working capital requirements, and other strategic initiatives. In the past, we have met these cash requirements through our cash on hand, working capital management, proceeds from certain private placements and public offerings of our securities, and sales of products and services. For the year ended April 30, 2025, the Company had net income of approximately $ 4.7 million, an accumulated deficit of approximately $ 79.9 million, negative working capital of $ 1.5 million and cash of $ 9.8 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 2026. Should the Company be required to raise additional capital, there can be no assurance that management would be successful in raising such capital on terms acceptable to us, if at all. Fair Value The carrying value of cash, accounts receivable, prepaid expenses, and other current assets, accounts payable, and accrued liabilities approximate their fair value based on the liquidity or the short-term maturities of these instruments. The fair value hierarchy promulgated by GAAP consists of three levels: • Level one — Quoted market prices in active markets for identical assets or liabilities; • Level two — Inputs other than level one inputs that are either directly or indirectly observable; and • Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The Company has no assets or liabilities that are measured at fair value on a recurring and/or non-recurring basis during the years ended April 30, 2025 and 2024. Property and Equipment Property and equipment is recorded at cost and primarily consists of laboratory equipment, furniture and fixtures, computer hardware and software, leasehold improvements, and internally developed software. Assets in progress include equipment or software not yet placed in service. Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of the various assets ranging from three to seven years . Refer to Footnote 4, "Property and Equipment" for a detailed discussion. Leases The Company accounts for its leases under Financial Accounting Standards Board ("FASB") ASC Topic 842, Leases ("ASC 842"). Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right-of-use ("ROU") asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. As the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. 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 Impairment losses are to be recognized when the carrying amount of a long-lived asset is not recoverable or exceeds its fair value. The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that a carrying value may not be recoverable. The Company uses estimates of future cash flows over the remaining useful life of a long- lived asset or asset group to determine the recoverability of the asset. These estimates only include the net cash flows directly associated with, and that are expected to arise as a direct result of, the use and eventual disposition of the asset or asset CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) group. The Company did no t recognize any impairment losses for the Company’s long-lived assets for the years ended April 30, 2025 and 2024 . Refer to Note 4, "Property and Equipment". Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The Company evaluates the carrying value of goodwill annually in connection with the annual budgeting and forecast process and also between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit to which goodwill was allocated to below its carrying amount. Such circumstances could include, but are not limited to: (1) a significant adverse change in legal factors, market conditions, or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. When evaluating goodwill for impairment, the Company may first perform an assessment qualitatively whether it is more likely than not that a reporting unit’s carrying amount exceeds its fair value, referred to as a “step zero” approach. Subsequently (if necessary after step zero), an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying value. Under FASB's Accounting Standards Update ("ASU") 2014-02, Topic 350, "Intangibles—Goodwill and Other" goodwill impairment is measured as the excess of the carrying amount of the reporting unit over its fair value. Judgments regarding the existence of impairment indicators are based on legal factors, market conditions and operational performance of the businesses. Future events, including but not limited to continued declines in economic activity, loss of contracts or a significant number of customers, or a rapid increase in costs or capital expenditures, could cause the Company to conclude that impairment indicators exist and that goodwill is impaired. For the years ended April 30, 2025 and 2024, the Company's annual assessment did no t result in any impairment indicators. Cost of Oncology Revenue Cost of oncology revenue consists of direct costs related to laboratory supplies, mice purchases, and maintenance costs for studies completed internally as well as charges from Contract Research 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. All costs of performing studies in-house are expensed as incurred. All costs of performing studies from external sources, are expensed when incurred. Research and Development Research and development costs represent both costs incurred internally for research and development activities, including personnel costs, mice purchases, and maintenance, as well as costs incurred externally to facilitate research activities, such as tumor tissue procurement and characterization expenses. All research and development costs are expensed as incurred. Sales and Marketing Sales and marketing expenses represent costs incurred to promote the Company’s products offered, including salaries, benefits and related costs of our sales and marketing personnel, and represent costs of advertising and other selling and marketing expenses. All sales and marketing costs, including advertising costs, are expensed as incurred. Earnings Per Share Basic net income or loss per share is computed by dividing the net income or loss for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing the net income for the period by the weighted-average number of shares of common stock plus dilutive potential common stock considered outstanding during the period. Such dilutive shares consist of incremental shares that would be issued upon exercise of the Company’s common stock options. Dilutive earnings per share is not presented when it would be antidilutive to do so. Stock-based Payments The Company typically recognizes expense for stock-based payments based on the fair value of awards on the date of grant. The Company uses the Black-Scholes option pricing model to estimate fair value. The Black-Scholes option valuation model was developed for use in estimating the fair value of short-traded options that have no vesting restrictions and are fully transferable. The option pricing model requires the Company to estimate certain key assumptions such as expected life, volatility, risk free interest rates and dividend yield to determine the fair value of stock-based awards. These assumptions are based on historical information and management judgment. The risk-free interest rate used is based on the United States CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) treasury security rate with a term consistent with the expected term of the award at the time of the grant. Since the Company has limited option exercise history, it has generally elected to estimate the expected life of an award based upon the Securities and Exchange Commission-approved “simplified method” noted under the provisions of Staff Accounting Bulletin No. 107 with the continued use of this method extended under the provisions of Staff Accounting Bulletin No. 110. Estimated volatility is based upon the historical volatility of the Company's common stock. The Company does not anticipate paying a dividend, and therefore, no expected dividend yield was used. Forfeitures are accounted for as they occur. The Company expenses stock-based payments over the period that the awards are expected to vest. In the event of forfeitures, compensation expense is adjusted. The Company expenses modification charges in the period of modification and, if required, over the remaining period the awards are expected to vest. The Company will report cash flows resulting from tax deductions in excess of the compensation cost recognized from those options (excess tax benefits) as financing cash flows, if they should arise. Income Taxes Deferred income taxes have been provided to show the effect of temporary differences between the recognition of expenses for financial and income tax reporting purposes and between the tax basis of assets and liabilities, and their reported amounts in the consolidated financial statements. In assessing the realizability of deferred tax assets, the Company assesses the likelihood that deferred tax assets will be recovered through tax planning strategies or from future taxable income, and to the extent that recovery is not likely or there is insufficient operating history, a valuation allowance is established. The Company adjusts the valuation allowance in the period management determines it is more likely than not that net deferred tax assets will or will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. As of April 30, 2025 and 2024, the Company provided a valuation allowance for all net deferred tax assets, as recovery is not more likely than not based on an insufficient history of earnings. The Company reflects tax benefits only if it is more likely than not that we will be able to sustain the tax position, based on its technical merits. If a tax benefit meets this criterion, it is measured and recognized based on the largest amount of benefit that is cumulatively greater than 50% likely to be realized. As of April 30, 2025 and 2024, the Company has recorded $ 0 and $ 181,000 , respectively, of liabilities related to uncertain tax positions relative to one of its foreign operations. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company accrued $ 0 for any additional interest and or penalties on the Company’s consolidated statements of operations for the years ended April 30, 2025 and 2024, respectively, as the Company believes its recorded liability for uncertain tax positions, if applicable, covers any potential interest and/or penalties. The Company reversed the liability for uncertain tax positions as of April 30, 2025 due to the expiration of the statute of limitations. The Company does not anticipate any significant unrecognized tax benefits to be recorded during the next 12 months. For the years ended April 30, 2025 and 2024, the Company recognized a benefit for income taxes of $ 75,000 and $ 32,000 , 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, a $ 181,000 reversal of an uncertain tax liability in Israel in fiscal 2025, and a return to provision adjustment benefit in Israel of $ 95,000 in fiscal 2024. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, "Revenue from Contracts with Customers". The objective of the standard is to establish a single comprehensive revenue recognition model that is designed to create greater comparability of financial statements across industries and jurisdictions. Under this standard, companies recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services. All revenue is generated from contracts with customers. The Company recognizes revenue when control of these services is transferred to the customer in an amount, referred to as the transaction price, that reflects the consideration to which the Company is expected to be entitled in exchange for those services. The Company determines revenue recognition utilizing the following five steps: (1) identification of the contract with a customer, (2) identification of the performance obligations in the contract (promised goods or services that are distinct), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations, and (5) recognition of revenue when, or as, the Company transfers control of the product or service for each performance obligation. The Company records revenues net of any tax assessments by governmental authorities, such as value added taxes, that are imposed on and concurrent with specific revenue generating transactions. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The majority of the Company's revenue arrangements are service contracts that are completed within a year or less. There are a few contracts that range in duration between 1 and 3 years. Substantially all of the Company's performance obligations, and associated revenue, are transferred to the customer over time. Most of the Company's contracts can be terminated by the customer without cause. In the event of termination, the Company's contracts provide that the customer pay the Company for services rendered through the termination date. The Company generally receives compensation based on a predetermined invoicing schedule relating to specific milestones for that contract. Amendments to contracts are common. The Company evaluates each amendment which meets the criteria of a contract modification under ASC 606. Each modification is further evaluated to determine whether the contract modification should be accounted for as a separate contract or as a continuation of the original agreement. The Company accounts for amendments as a separate contract as they meet the criteria under ASC 606-10-25-12. Pharmacology Study and Other Services The Company generally enters into contracts with customers to provide oncology services with payments based on fixed-fee arrangements. At contract inception, the Company assesses the services promised in the contracts with customers to identify the performance obligations in the arrangement. The Company's fixed-fee arrangements for oncology services are considered a single performance obligation because the Company provides a highly-integrated service. The Company recognizes revenue over time using a progress-based input method since there is no single output measure that would fairly depict the transfer of control over the life of the performance obligation. Revenue is recognized for the single performance obligation over time due to the Company's right to payment for work performed to date and the performance does not create an asset with an alternative use. The Company recognizes revenue as portions of the overall performance obligation are completed as this best depicts the progress toward the complete satisfaction of the performance obligation. License Revenue The Company also enters into contracts to provide access to certain Patient Derived Xenograft ("PDX") model data via a license agreement with payments based on a fixed-fee arrangement. The Company's current data licenses contain a single performance obligation of delivering access to the data license. The Company recognizes this license revenue up-front, at a point in time, when the performance obligation is satisfied with the delivery of the data. Incremental Costs of Obtaining a Contract (Sales Commissions) Under ASC 606, the costs of obtaining a contract can be expensed immediately, rather than capitalized and amortized, if the amortization period is one year or shorter. Sales commissions for the Company represent contract costs with a term of one year or less. Therefore, under ASC 606, the Company elected the practical expedient to expense these costs as incurred. Accounts Receivables, Unbilled Services and Deferred Revenue In general, billings and payments are established by contractual provisions including predetermined payment schedules, which may or may not correspond to the timing of the transfer of control of the Company's services under the contract. In general, the Company's intention in its invoicing (payment terms) is to maintain cash neutrality over the life of the contract. Upfront payments, when they occur, are intended to cover certain expenses the Company incurs at the beginning of the contract. Neither the Company nor its customers view such upfront payments and contracted payment schedules as a means of financing. Unbilled services primarily arise when the revenue recognized exceeds the amount billed to the customer. Such situations occur due to divergences between revenue recognition and the invoicing milestones which are based on predetermined payment terms. Deferred revenue consists of unearned payments received in excess of revenue recognized. As the contracted services are subsequently performed and the associated revenue recognized, the deferred revenue balance is reduced by the amount of the revenue recognized during the period. Deferred revenue is classified as a current liability on the consolidated balance sheet as the Company expects to recognize the associated revenue in less than one year. Segment Reporting CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the Company’s chief operating decision maker (“CODM”) and relied upon when making decisions regarding resource allocation and assessing performance. When evaluating the Company’s financial performance, the CODM reviews total revenues, total expenses, and expenses by functional classification, using this information to make decisions on a Company-wide basis. The Company currently operates in one reportable segment pertaining to oncology services. The CODM for the Company is the Chief Executive Officer (the “CEO”). The Company’s CEO reviews operating results on an aggregate basis and manages the Company’s operations on a consolidated basis for the purpose of evaluating financial performance and allocating resources. Accordingly, the Company has determined that it has a single reportable and operating segment structure. The CEO uses net income or loss as well as revenue results to allocate resources in the annual budgeting and forecasting process and also uses that measure as a basis for evaluating financial performance regularly by comparing actual results with established budgets and forecasts. All significant expense categories are presented on our Consolidated Statements of Operations. The measure of segment assets is reported on the Consolidated Balance Sheet as total assets. Segment revenues and expenses are identical to that disclosed in the accompanying Consolidated Statements of Operations. Recent Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, “Segment Reporting” (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The amendments require entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within segment profit and loss, as well as the title and position of the CODM. The Company has adopted this standard effective May 1, 2024, noting that it did not have a material impact on its consolidated financial statements or related disclosures. 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, 2025, with early adoption permitted. The Company is in the process of completing the assessment of the impact that the adoption of this ASU will have on its financial statements, which is not expected to be material. In November 2024 and January 2025, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures" (Subtopic 220-40) "Disaggregation of Income Statement Expenses" and ASU 2025-01 "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures" (Subtopic 220-40): Clarifying the Effective Date". 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 the first annual reporting periods after December 15, 2026, and interim periods within annual reporting periods beginning after 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. Note 3. Accounts Receivable, Unbilled Services and Deferred Revenue Accounts receivable and unbilled services were as follows (in thousands): April 30, 2025 April 30, 2024 April 30, 2023 Accounts receivable $ 6,865 $ 4,886 $ 3,843 Unbilled services 5,398 5,941 4,993 Total accounts receivable and unbilled services 12,263 10,827 8,836 Less: allowance for estimated credit losses ( 1,029 ) ( 1,301 ) ( 825 ) Total accounts receivable, net $ 11,234 $ 9,526 $ 8,011 Deferred revenue was as follows (in thousands): CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) April 30, 2025 April 30, 2024 April 30, 2023 Deferred revenue $ 15,443 $ 12,094 $ 12,776 Deferred revenue is shown as a current liability on the Company's balance sheet. Note 4. Property and Equipment Property and equipment consisted of the following (in thousands): April 30, 2025 2024 Furniture and fixtures $ 246 $ 246 Computer equipment and software 2,165 2,152 Laboratory equipment 11,323 11,506 Capitalized software development costs 1,888 1,888 Assets in progress 124 3 Leasehold improvements 317 317 Total property and equipment 16,063 16,112 Less: Accumulated depreciation and amortization ( 11,688 ) ( 10,391 ) Property and equipment, net $ 4,375 $ 5,721 Depreciation and amortization expense was $ 1.6 million and $ 1.9 million for the years ended April 30, 2025 and 2024, respectively. Depreciation and amortization expense, excluding expense recorded under finance leases, was $ 1.5 million and $ 1.7 million for the years ended April 30, 2025 and 2024, respectively. As of April 30, 2025 and 2024, property, plant and equipment included gross assets held under finance leases of $ 1.0 million, respectively. Related depreciation expense for these assets was approximately $ 150,000 and $ 146,000 for the years ended April 30, 2025 and 2024, respectively. During the year ended April 30, 2025, the Company disposed of lab equipment with a cost of $ 636,000 and accumulated depreciation of $ 343,000 as of the disposal date, resulting in a loss on disposal of equipment recorded of $ 293,000 . 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 . Finance Lease During fiscal 2022, the Company recognized a finance lease for laboratory equipment. This equipment was obtained as the result of a laboratory supplies purchase commitment with costs of approximately $ 370,000 at inception through December 2025. Cash payments for this lease are in the form of consideration for purchasing lab supplies under a purchase commitment agreement. The present value of the minimum future obligations of $ 370,000 was calculated based on an interest rate of 3.25 %. Depreciation and amortization expense related to this finance lease was $ 77,000 and $ 75,000 for the years ended April 30, 2025 and 2024, respectively. Interest on the related finance lease liability was approximately $ 3,000 and $ 6,000 for the years ended April 30, 2025 and 2024, respectively. During fiscal 2023, the Company recognized a finance lease for laboratory equipment. This equipment was obtained as the result of a laboratory supplies purchase commitment with costs of approximately $ 368,000 at inception through May 2027. Cash payments for this lease are in the form of consideration for purchasing lab supplies under a purchase commitment agreement. The present value of the minimum future obligations of $ 368,000 was calculated based on an interest rate of 3.5 %. Depreciation and amortization expense related to this finance lease was $ 73,000 and $ 71,000 for the years ended April 30, 2025 CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) and 2024, respectively. Interest on the related finance lease liability was approximately $ 7,000 and $ 9,000 for the years ended April 30, 2025 and 2024, respectively. Future minimum lease payments due each fiscal year as follows (in thousands): 2026 $ 140 2027 80 2028 7 Thereafter — Total undiscounted liabilities 227 Less: Imputed interest ( 7 ) Present value of minimum lease payments $ 220 Current portion financing lease 135 Long-term portion financing lease 85 As noted above, the Company's financing leases are for laboratory equipment. The associated liabilities for these leases are classified on the consolidated balance sheets within other current and other non-current liabilities . Note 5. Revenue from Contracts with Customers Oncology Revenue The following table represents disaggregated revenue for the twelve months ended April 30, 2025 and 2024: Year Ended April 30, 2025 2024 Pharmacology services $ 48,585 $ 47,035 TOS data license revenue 4,676 — Other TOS revenue 3,683 3,102 Personalized oncology services — 18 Total oncology revenue $ 56,944 $ 50,155 Other TOS revenue represents additional services provided to the Company's pharmaceutical and biotechnology customers, specifically flow cytometry services, and SaaS provided via our Lumin Bioinformatics software. Contract Balances Contract assets include unbilled amounts typically resulting from revenue recognized in excess of the amounts billed to the customer for which the right to payment is subject to factors other than the passage of time. These amounts may not exceed their net realizable value. Contract assets are classified as current. Contract liabilities consist of customer payments received in advance of performance and billings in excess of revenue recognized, net of revenue recognized from the balance at the beginning of the period. Contract assets and liabilities are presented on the balance sheet on a net contract-by-contract basis at the end of each reporting period. Refer to Note 3 for related balances. Note 6. Significant Customers For the year ended April 30, 2025, two of our customers accounted for 10% or more of our total revenue, at 13 % and 10 %, respectively. For the year ended April 30, 2024, one of our customers accounted for 10% or more of our total revenue, at 10 %. This same customer qualified as significant in both years ending 2025 and 2024, at 13 % and 10 %, respectively, with an additional customer qualifying as significant for the year ending 2025 at 10 %. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) As of April 30, 2025, one customer, who is also one of our two significant customers, accounted for 19 % of our total accounts receivable balance. Note 7. Commitments and Contingencies Legal Matters The Company is not currently party to any legal matters to its knowledge. The Company is not aware of any other matters that would have a material impact on the Company’s financial position or results of operations. Registration Payment Arrangements The Company has entered into an Amended and Restated Registration Rights Agreement in connection with a private placement in March 2015. This Amended and Restated Registration Rights Agreement contains provisions that may call for the Company to pay penalties in certain circumstances. This registration payment arrangement primarily relates to the Company’s ability to file a registration statement within a particular time period, have a registration statement declared effective within a particular time period and to maintain the effectiveness of the registration statement for a particular time period. The Company has not accrued any liquidated damages associated with the Amended and Restated Registration Right Agreement as the Company has filed the required registration statement and anticipates continued compliance with the agreement. Royalties The Company contracts with third-party vendors to license tumor samples for development into PDX models and use in our TOS business. These types of arrangements have an upfront fee ranging from approximately nil to $ 30,000 per tumor sample depending on the successful growth of the tumor model and ability to develop them into a sellable product. The upfront costs are expensed as incurred. In addition, under certain agreements, for a limited period of time, the Company is subject to royalty payments if the licensed tumor models are used for sale in our TOS business, ranging from 2 % to 20 % of the contract price after recouping certain initiation costs. Some of these arrangements also set forth an annual minimum royalty due regardless of tumor models used for sale. For the years ended April 30, 2025 and 2024, the Company has recognized approximately $ 462,000 and $ 362,000 in expense related to these royalty arrangements, respectively. Royalty expense is included in cost of oncology revenue in the accompanying consolidated statements of operations. Note 8. Stock-based Payments Stock-based compensation in the amount of $ 654,000 and $ 1.1 million was recognized for years ended April 30, 2025 and 2024, respectively. Stock-based compensation costs were recorded as follows (in thousands): Year Ended April 30, 2025 2024 General and administrative $ 414 $ 706 Sales and marketing 125 168 Research and development 10 21 TOS cost of sales 105 223 Total stock-based compensation expense $ 654 $ 1,118 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. The Plans also provide for limits on the aggregate number of shares that may be granted, the term of grants and the strike price of option awards. 2021 Equity Incentive Plan As part of the 2021 Annual Shareholders Meeting, shareholders approved the adoption of the 2021 Equity Incentive Plan (“2021 Equity Plan”). The purpose of the 2021 Equity Plan is to grant (i) Non-statutory Stock Options; (ii) Incentive Stock CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Options; (iii) Restricted Stock Awards; and/or (iv) Stock Appreciation Rights (collectively, stock-based compensation) to its employees, directors and non-employees. Total stock awards under the 2021 Equity Plan shall not exceed 2 million shares of common stock. Options and Stock Appreciation Rights expire no later than ten years from the date of grant and the awards vest as determined by the Board of Directors (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, 2025, approximately 1.2 million shares were left to issue under this plan. 2010 Equity Incentive Plan On February 18, 2011, shareholders owning a majority of the issued and outstanding shares of the Company executed a written consent approving the 2010 Equity Incentive Plan (“2010 Equity Plan”). The purpose of the 2010 Equity Plan is to grant (i) Non-statutory Stock Options; (ii) Restricted Stock Awards; and (iii) Stock Appreciation Rights (collectively, stock-based compensation) to its employees, directors and non-employees. Total stock awards under the 2010 Equity Plan shall not exceed 30,000,000 shares of common stock. Options and Stock Appreciation Rights expire no later than ten years from the date of grant and the awards vest as determined by the Board. 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. Director Compensation Plan 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 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 options to purchase shares of the Company's stock, which vest fully over a one-year period, or a combination of options and cash, where cash received is 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 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 2021 Plan are issued pursuant to the 2021 Equity Plan. Stock Option Grants Black-Scholes weighted average assumptions used to calculate the fair value of options granted during the years ended April 30, 2025 and 2024 were as follows: Year Ended April 30, 2025 2024 Expected term in years 6 6 Risk-free interest rates 3.6 % - 4.5 % 4.0 % - 4.5 % Volatility 54 % - 63 % 63 % - 64 % Dividend yield 0 % 0 % The weighted average fair value of stock options granted during the years ended April 30, 2025 and 2024, was $ 2.86 and $ 3.75 , respectively. The Company’s stock options activity and related information as of and for the years ended April 30, 2025 and 2024 is as follows: CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Directors and Employees Non- Employees Total Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding, May 1, 2024 1,883,166 36,331 1,919,497 $ 5.04 5.2 $ 2,172,000 Granted 330,955 — 330,955 5.01 9.6 $ — Exercised ( 183,404 ) — ( 183,404 ) 3.64 Canceled ( 83,325 ) — ( 83,325 ) 5.83 Forfeited ( 268,375 ) — ( 268,375 ) 6.05 Expired ( 36,666 ) — ( 36,666 ) 5.43 Outstanding, April 30, 2025 1,642,351 36,331 1,678,682 4.98 4.9 $ 4,434,000 Vested and expected to vest as of April 30, 2025 1,642,351 36,331 1,678,682 4.98 4.9 $ 4,434,000 Exercisable as of April 30, 2025 1,461,067 5,625 1,466,692 4.86 4.3 $ 4,096,000 Directors and Employees Non- Employees Total Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding, May 1, 2023 1,739,336 36,331 1,775,667 4.8 4.6 $ 2,683,000 Granted 444,730 — 444,730 6.08 9.5 — Exercised ( 155,449 ) — ( 155,449 ) 2.31 Canceled ( 50,535 ) — ( 50,535 ) 4.82 Forfeited ( 40,750 ) — ( 40,750 ) 6.21 Expired ( 54,166 ) — ( 54,166 ) 12.78 Outstanding, April 30, 2024 1,883,166 36,331 1,919,497 5.04 5.2 $ 2,172,000 Vested and expected to vest as of April 30, 2024 1,883,166 36,331 1,919,497 5.04 5.2 $ 2,172,000 Exercisable as of April 30, 2024 1,481,145 3,750 1,484,895 4.65 4.2 $ 2,172,000 Share Repurchase Program On March 29, 2023, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to an aggregate of $ 5.0 million of the Company’s common stock. The share repurchase program is designed in accordance with Rule 10b-18 of the Exchange Act. The shares may be purchased from time to time in the open market, as permitted under applicable rules and regulations, at prevailing market prices. The timing and amount of repurchases will depend on market conditions, share price, applicable legal requirements and other factors. The program does not obligate the Company to acquire a minimum number of shares. As of April 30, 2025, 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. The Company did no t purchase any shares of its common stock during the year ended April 30, 2025. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 9. Provision for (Benefit from) Income Taxes The components of the (benefit) provision for income taxes are as follows (in thousands): Year Ended April 30, 2025 Federal State Foreign Total Current $ — $ 20 $ ( 95 ) $ ( 75 ) Total $ — $ 20 $ ( 95 ) $ ( 75 ) Year Ended April 30, 2024 Federal State Foreign Total Current $ — $ 7 $ ( 39 ) $ ( 32 ) Total $ — $ 7 $ ( 39 ) $ ( 32 ) A reconciliation between the Company’s effective tax rate and the United States statutory tax rate for the years ended April 30, 2025 and 2024 is as follows: Year Ended April 30, 2025 2024 Federal income tax at statutory rate 21.0 % 21.0 % US vs. foreign tax rate difference 0.2 ( 0.1 ) State income tax, net of federal benefit 4.1 ( 2.3 ) Permanent differences ( 0.6 ) 0.4 Decrease in uncertain tax position ( 3.9 ) — Deferred tax asset adjustment 48.2 — Change in valuation allowance ( 70.6 ) ( 18.5 ) Income tax expense ( 1.6 ) % 0.5 % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of April 30, 2025 and 2024 consist of the following (in thousands): As of April 30, 2025 2024 Accrued liabilities $ 1,633 $ 1,269 Operating leases 250 279 Depreciation and amortization ( 217 ) ( 318 ) Stock-based compensation expense 1,212 3,792 Capitalized research and development costs 3,712 4,046 Net operating loss carry-forward 8,248 9,038 Total deferred tax assets 14,838 18,106 Less: Valuation allowance ( 14,838 ) ( 18,106 ) Net deferred tax asset $ — $ — 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 CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) of April 30, 2025 and 2024. For the years ended April 30, 2025 and 2024, the Company recorded a valuation allowance of $ 14.8 million and $ 18.1 million, respectively. The net decrease in the valuation allowance of $ 3.3 million during the fiscal year ended April 30, 2025, was mainly due to decreases in the deferred tax assets related to the net operating loss carryforward, stock-based compensation, and capitalized research expenses. The net increase in the valuation allowance of $ 1.4 million during the fiscal year ended April 30, 2024 was mainly due to increases in the deferred tax assets related to capitalized research expenses and other timing differences. Management continues to assess the realizability of the deferred tax assets at each interim and annual balance sheet date based upon actual and forecasted operating results. As of April 30, 2025 and 2024, the Company’s estimated U.S. net operating loss carry-forwards were approximately $ 35.1 million and $ 38.6 million, respectively. Net operating losses generated prior to May 1, 2018 have a 20-year carryforward and will begin expiring in 2034 for federal and 2031 for state purposes. Losses generated in the fiscal years since the year ended April 30, 2019 may be carried forward indefinitely. A valuation allowance has been recorded against all of these loss carryforwards. Under the provisions of the Internal Revenue Code, certain substantial changes in the Company’s ownership may result in a limitation on the amount of net operating losses that may be utilized in future years. During the fiscal year ended April 30, 2013, approximately $ 12.0 million of the Company’s net operating losses became subject to limitation under Internal Revenue Code Section 382 in connection with an ownership change on January 28, 2013. As a result of the ownership change, the Company’s annual limitation on its use of net operating loss carry-forwards is approximately $ 432,000 . The Company files income tax returns in various jurisdictions with varying statutes of limitations. As of April 30, 2025, the earliest tax year still subject to examination for state purposes is fiscal 2021. The Company’s tax years for periods ending April 30, 2014 and forward are subject to examination by the United States and certain states due to the carry-forward of unutilized net operating losses. The following table indicates the changes to the Company’s uncertain tax positions for the period and years ended April 30, 2025 and 2024 in thousands: Year Ended April 30, 2025 2024 Balance, beginning of the year $ 181 $ 181 Addition based on tax positions related to prior years — — Payment made on tax positions related to prior years — — Expiration of statute of limitations ( 181 ) — Addition based on tax positions related to current year — — Balance, end of year $ — $ 181 As of April 30, 2024, the above amounts of $ 181,000 was included in other long-term liabilities. Note 10. Earnings Per Share A reconciliation of net income and number of shares used in computing basic and diluted earnings per share was as follows: CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Year Ended April 30, 2025 2024 Basic and diluted net income (loss) per share computation (dollars in thousands): Net income (loss) attributable to common stockholders $ 4,701 $ ( 7,276 ) Weighted Average common shares - basic and diluted 13,659,786 13,547,604 Basic and diluted net income (loss) per share $ 0.34 $ ( 0.54 ) Diluted income (loss) per share computation Net income (loss) attributable to common stockholders $ 4,701 $ ( 7,276 ) Weighted Average common shares 13,659,786 13,547,604 Incremental shares from assumed exercise of stock options 606,995 — Adjusted weighted average share – diluted 14,266,781 13,547,604 Diluted net income (loss) per share $ 0.33 $ ( 0.54 ) The following table reflects the total potential stock-based instruments outstanding at April 30, 2025 and 2024 that could have an effect on the future computation of dilution per common share. These figures were not included in the above calculation as, to do so, would be antidilutive: Year Ended April 30, 2025 2024 Stock options 126,353 1,919,497 Total common stock equivalents 126,353 1,919,497 Note 11. Related Party Transactions Related party transactions include transactions between the Company and its shareholders, management, or affiliates. The following transactions were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the parties. Consulting Services For fiscal years ended April 30, 2025 and 2024, the Company paid a member of its Board of Directors $ 12,000 and $ 36,000 , respectively for consulting services unrelated to his duties as a board member. All of the amounts paid to this related party have been recognized in expense in the period the services were performed within general and administrative expenses in the accompanying consolidated statements of operations. Note 12. Leases The Company accounts for its leases under ASC 842. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet as both an operating lease ROU asset and operating lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. Variable lease expenses, if any, are recorded when incurred. The Company has elected to apply the short-term lease exemption practical expedient for each class of underlying assets and excludes short-term leases having initial terms of 12 months or less. The Company recognizes rent expense on a straight-line basis over the lease term for these short-term leases. The Company has determined that no material embedded leases exist. Under ASC 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As the CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Operating Leases The Company currently leases certain office equipment and its office and laboratory facilities under non-cancelable operating leases. Rent expense for operating leases is recognized on a straight-line basis over the lease term from the lease commencement date through the scheduled expiration date. Rent expenses totaled $ 1.8 million for the years ended April 30, 2025 and 2024. The Company leases the following facilities: • One University Plaza, Suite 307, Hackensack, New Jersey 07601, which, since November 2011, serves as the Company’s corporate headquarters. The lease expires in November 2026. The Company recognized $ 75,000 and $ 77,000 of rent expense relative to this lease for fiscal 2025 and 2024, respectively. • 1330 Piccard Drive Suite 025, Rockville, MD 20850, which consists of laboratory and office space where the Company conducts operations related to its primary service offerings. The Company executed the original lease in January 2017. The lease was amended to expand the premises and extend the expiration date in March 2020 and again in December 2020. The operating commencement date was August 11, 2017. This lease expires in February 2029. The Company recognized $ 1.7 million of rent expense for both fiscal 2025 and 2024. • 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. During fiscal 2023, the Company executed its current lease for this office and laboratory space. The lease expires October 31, 2028. The Company recognized $ 50,000 of rent expense associated with this lease in Italy for both fiscal 2025 and 2024. ROU assets and lease liabilities related to the Company's current operating leases are as follows (in thousands): April 30, 2025 April 30, 2024 Operating lease right-of-use assets, net 5,080 6,252 Current portion of operating lease liabilities 1,471 1,337 Non-current portion of operating lease liabilities 4,634 6,093 As of April 30, 2025, the weighted average remaining operating lease term and the weighted average discount rate were 3.75 years and 5.89 %, respectively. 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 for operating leases due each fiscal year as follows (in thousands): 2026 $ 2,956 2027 2,922 2028 2,871 2029 2,392 Thereafter — Total undiscounted liabilities 11,141 Less: Imputed interest ( 5,036 ) Present value of minimum lease payments $ 6,105 The composition of total lease cost for the years ended April 30, 2025 and 2024 were as follows (in thousands): CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Year Ended April 30, 2025 2024 Operating lease costs $ 1,730 $ 1,680 Financing lease costs: Amortization of leased assets 150 146 Interest on lease liabilities 10 15 Total lease costs $ 1,890 $ 1,841 Refer to Note 4, Property and Equipment, for more information on financing leases. Note 13. Subsequent Events Appointment of New Chief Executive Officer Subsequent to the balance sheet date of April 30, 2025, the Board of Directors announced the appointment of Robert Brainin as the Company's new Chief Executive Officer, effective August 25, 2025. Mr. Brainin, who has served on the Company's Board of Directors since 2021 and will remain on the Board as a Director, will succeed Dr. Ronnie Morris, who has led the Company as CEO since 2017. Dr. Morris will transition to the role of Executive Chairman of the Board, supporting the leadership transition while remaining actively involved in the Company’s strategic initiatives. Mr. Brainin has entered into an Employment Agreement with the Company. Pursuant to the agreement, he will receive an annual base salary of $ 500,000 and will have the opportunity to earn a discretionary target incentive bonus of 75 % of his base salary. He will also receive multiple equity awards, including 225,000 options to purchase the Company’s common stock, which will vest over a four-year period, and 475,000 options to purchase the Company’s common stock, which will vest at varying time points and are based on varying performance criteria. Tax Update On July 4, 2025, the One Big Beautiful Bill was enacted, introducing significant and wide-ranging changes to the U.S. tax system. These include expanded deductions for certain expenses, the restoration of 100% bonus depreciation, and immediate expensing for U.S.-based research and development. The legislation also reinstates EBITDA-based interest deductions and makes several business tax incentives permanent. The Company is currently assessing the potential impact of this legislation on its financial position, results of operations, and cash flows. In accordance with U.S. GAAP, the effects, if any, will be recognized in the period of enactment. CHAMPIONS ONCOLOGY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) SIGNATURES 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. July 23, 2025 /s/ RONNIE MORRIS Ronnie Morris Chief Executive Officer (principal executive officer) 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 /s/ RONNIE MORRIS Chief Executive Officer and Director July 23, 2025 Ronnie Morris (principal executive officer) /s/ DAVID MILLER Chief Financial Officer July 23, 2025 David Miller (principal financial and accounting officer) /s/ JOEL ACKERMAN Director, July 23, 2025 Joel Ackerman Chairman of the Board of Directors /s/ DAVID SIDRANSKY Director July 23, 2025 David Sidransky /s/ ROBERT BRAININ Director July 23, 2025 Robert Brainin /s/ SCOTT R. TOBIN Director July 23, 2025 Scott R. Tobin /s/ DANIEL MENDELSON Director July 23, 2025 Daniel Mendelson /s/ PHILIP BREITFELD Director July 23, 2025 Philip Breitfeld Exhibit Index Exhibit No . 3.1 Amended and Restated Articles of Incorporation (incorporated by reference to Appendix A to the Company’s Information Statement on Schedule 14C filed March 7, 2011) 3.1.1 Certificate of Amendment to Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3(i) to the Company’s Current Report on Form 8-K filed April 28, 2015) 3.2 Amended and Restated Bylaws, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed May 9, 2017) 4.1 Description of Registered Securities (incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed July 28, 2020) 10.1 Employment Agreement, dated November 5, 2013, between the Company and Ronnie Morris, M.D. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed November 12, 2013) *** 10.2 Amendment to Employment Agreement, dated March 16, 2015, between the Company and Ronnie Morris (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed March 20, 2015) *** 10.3 Offer letter dated June 3, 2013 between the Company and David Miller (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 3, 2013) *** 10.4 2010 Equity Incentive Plan (incorporated by reference to Appendix B to the Company’s Definitive Information Statement on Schedule 14C filed March 7, 2011) *** 10.5 Form of Note Purchase Agreement, dated December 1, 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 5, 2014) 10.6 Form of Convertible Promissory Note, dated December 1, 2014, issued to each of Joel Ackerman and Ronnie Morris in connection with the Note Purchase Agreement, dated December 1, 2014 between the Company and each of Joel Ackerman and Ronnie Morris incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 5, 2014) 10.7 Amendment No. 1 to Convertible Promissory Note, dated December 1, 2014 issued to Joel Ackerman in connection with the Note Purchase Agreement, dated December , 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 2, 2015) 10.8 Amendment No. 1 to Convertible Promissory Note, dated December 1, 2014 issued to Ronnie Morris in connection with the Note Purchase Agreement, dated December , 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 2, 2015) 10.9 Amended and Restated 2011 Securities Purchase Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.10 Form of warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed January 30, 2013) 10.11 Amendment No. 1 to warrants, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.12 Amended and Restated 2013 Securities Purchase Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.13 Form of warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed January 30, 2013) 10.14 Amendment No. 1 to warrants, dated March 13, 2015, between the Company and each person or entities that are signatories to the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.15 Put Right Agreement, dated January 29, 2014, between the Company and each of Joel Ackerman and Ronnie Morris (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 6, 2014) 10.16 Securities Purchase Agreement, dated March 11, 2015, between the Company and each investor identified on the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 12, 2015) 10.17 Amended and Restated Registration Rights Agreement, dated March 13, 2015, between the Company and each person or entities that are signatories to (i) the Securities Purchase Agreement, dated March 24, 2011, between the Company and each investor identified on the signature page thereto, (ii) the Securities Purchase Agreement, dated January 28, 2013, between the Company and each investor identified on the signature page thereto, and (iii) the Securities Purchase Agreement, dated March 11, 2015, between the Company. And each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.18 Form of Investor Warrant issued to each person or entities that are signatories to the Securities Purchase Agreement, dated March 11, 2015, between the Company and each investor identified on the signature page thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 17, 2015) 10.19 Option Exchange Agreement, dated March 16, 2015, between the Company and Joel Ackerman (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 20, 2015) 10.20 Option Exchange Agreement, dated March 16, 2015, between the Company and Ronnie Morris (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 20, 2015) 10.21 Option Exchange Agreement, dated March 16, 2015, between the Company and David Miller (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed March 20, 2015) 14 Code of Ethics (incorporated by reference to Exhibit 14 of the April 30, 2008 Form 10-KSB) 19 Insider Trading Policy * 21 List of Subsidiaries (incorporated by reference to Exhibit 21 to th e Company's Annual Report on Form 10-K filed July 1 9 , 2024) 23.1 Consent of Independent Registered Public Accounting Firm* 31.1 Certification of the Principal Executive 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* 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 Certification of Principal Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** 97 Policy Related to Recovery of Erroneously Awarded Compensation, adopted December 1, 2023 (incorporated by reference to Exhibit 97 to the Company’s Annual Report on Form 10-K filed July 19, 2024) 101.INS* XBRL Instance Document. 101.SCH* XBRL Taxonomy Extension Schema Document. 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document. 101.LAB* XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document. __________________________ * Filed herewith ** Furnished hereto. *** Management contract or compensatory plan or arrangement.