Financial Performance - Total revenue for Q2 fiscal 2025 was $13.5 million, a 17% increase from $11.6 million in Q2 fiscal 2024[7] - Adjusted EBITDA for Q2 fiscal 2025 was $1.1 million, compared to an adjusted EBITDA loss of $1.4 million in Q2 fiscal 2024[8] - Gross profit for Q2 fiscal 2025 was $6.1 million, with a margin of 45%, up from a margin of 43% in Q2 fiscal 2024[9] - For the first half of fiscal 2025, total revenue increased 14.2% to $27.6 million compared to $24.1 million in the same period last year[15] - The company projects revenue growth for the year of at least 10% to 15%[6] - Oncology services revenue for the three months ended October 31, 2024, was $13.489 million, a 16.6% increase from $11.573 million for the same period in 2023[27] - Net income for the six months ended October 31, 2024, was $2.041 million, compared to a net loss of $4.637 million for the same period in 2023[27] - The company reported a basic net income per share of $0.05 for the three months ended October 31, 2024, compared to a loss of $0.15 per share for the same period in 2023[27] Expenses and Costs - Research and development expenses for Q2 fiscal 2025 decreased by 32.8% to $1.7 million compared to $2.5 million in Q2 fiscal 2024[10] - Total costs and operating expenses for Q2 fiscal 2025 were $12.8 million, a decrease of 5.7% from $13.5 million in Q2 fiscal 2024[7] - Cost of oncology services for Q2 fiscal 2025 was $7.4 million, an increase of 12.2% from $6.6 million in Q2 fiscal 2024[9] - Research and development expenses for the three months ended October 31, 2024, were $1.689 million, down from $2.515 million for the same period in 2023[27] Assets and Liabilities - Total current assets increased to $14.084 million as of October 31, 2024, from $13.639 million as of April 30, 2024[28] - Total liabilities decreased to $24.559 million as of October 31, 2024, from $28.035 million as of April 30, 2024[28] - Cash and cash equivalents increased to $2.754 million as of October 31, 2024, from $2.618 million as of April 30, 2024[28] - Deferred revenue decreased to $10.220 million as of October 31, 2024, from $12.094 million as of April 30, 2024[28] Cash Flow - The company ended the quarter with cash on hand of approximately $2.8 million and no debt[14] - Net cash provided by operating activities for the six months ended October 31, 2024, was $28, compared to a net cash used of $3.402 million for the same period in 2023[29] Share Information - The weighted average common shares outstanding for the three months ended October 31, 2024, was 13,593,766, compared to 13,497,061 for the same period in 2023[27]

Revenue and Income - Oncology services revenue for the three months ended July 31, 2024, was $14.1 million, an increase of 11.9% from $12.6 million in the same period of 2023[72]. - The company reported a net income of approximately $1.3 million for the three months ended July 31, 2024, with cash provided by operations of approximately $311,000[70]. Costs and Expenses - Cost of oncology services decreased to $7.1 million for the three months ended July 31, 2024, down 8.0% from $7.7 million in 2023[73]. - Research and development expenses were $1.5 million for the three months ended July 31, 2024, a decrease of 47.9% from $2.8 million in 2023[74]. - General and administrative expenses decreased to $2.5 million for the three months ended July 31, 2024, down 14.0% from $2.9 million in 2023[76]. - Total costs and operating expenses for the three months ended July 31, 2024, were $12.7 million, a decrease of 15.8% from $15.1 million in 2023[71]. Financial Position - As of July 31, 2024, the company had an accumulated deficit of approximately $83.3 million and cash on hand of approximately $2.9 million[70]. - The company may need to raise additional equity or debt capital in the near term to continue funding operations[70]. Research and Development - The company has a pipeline of targets at various stages of discovery and validation, with a select group progressing to therapeutic development[68]. - The company is engaged in developing advanced technology solutions for personalized oncology drug development through its Translational Oncology Solutions[66].

Financial Data and Key Metrics Changes - The first quarter revenue was $14.1 million, an increase of 12% from the first quarter of 2024 [8] - GAAP income from operations for Q1 2025 was $1.3 million, compared to a loss of $2.6 million in the prior year [8] - Adjusted EBITDA for the quarter was $2 million, compared to an adjusted loss of $1.7 million in the year-ago period [8] Business Line Data and Key Metrics Changes - Total cost of sales was $7 million, a decline of 6% from $7.5 million in the first quarter last year, due to operational efficiencies [9] - R&D expense was approximately $1.5 million, down from $2.8 million in the year-ago period, reflecting a strategic reduction [10] - Sales and marketing expense remained flat at $1.6 million, while G&A expense decreased to $1.9 million from $2.3 million in the prior year [10] Market Data and Key Metrics Changes - The funding environment for biotech has improved compared to the previous year, although it remains tight for small biotech firms [13] - Larger pharmaceutical companies are cutting back but still have budgets to continue work, indicating a mixed market response [13] Company Strategy and Development Direction - The company is focused on operational improvements and has rightsized to minimize negative impacts from challenges [5] - There is an emphasis on maintaining a strong cash position while reducing costs, particularly in non-core developmental programs [10] - The company is actively engaged in discussions to out-license several programs from its drug development subsidiary, Corellia [6] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the turnaround, indicating that improvements in operations and external pressures are beginning to ease [4] - The company anticipates continued volatility in financial results but is confident in its path toward sustainable revenue and profitability [5][12] Other Important Information - The company ended the quarter with $2.9 million in cash and no debt, with cash generated from operating activities amounting to $300,000 [11] - The company expects to report its second quarter results in mid-December [12] Q&A Session Summary Question: Insights from customers regarding funding environment - Management noted that while the environment is still tight for small biotech firms, it is improving, especially for mid-sized to larger pharmaceutical companies [13] Question: Trends in conversion rates and cancellations - Management confirmed that both revenue conversion rates and cancellation rates have improved, indicating positive trends [14] Question: Impact of the BIOSECURE Act on competition - Management indicated that the passage of the BIOSECURE Act could potentially help the company by limiting competition from certain entities [15]

Financial Performance - Total revenue for the first quarter of fiscal 2025 was $14.1 million, an increase of 12% compared to $12.6 million in the same period last year[3] - Adjusted EBITDA for the first quarter was $2.0 million, a significant improvement from an adjusted EBITDA loss of $1.7 million in the first quarter of fiscal 2024[4] - Net income for the first quarter was $1.3 million, compared to a net loss of $2.6 million in the same period last year[4] - Total costs and operating expenses for the first quarter were $12.7 million, a decrease of $2.4 million or 15.8% from $15.1 million in the first quarter of fiscal 2024[3] - Total margin improved to 49.7% for the first quarter, up from 38.8% in the same period last year[5] Cost Management - Cost of oncology services decreased by $612,000, or 8.0%, to $7.1 million compared to $7.7 million for the same period last year[5] - Research and development expenses decreased by $1.3 million, or 47.9%, to $1.5 million compared to $2.8 million for the same period last year[6] - The company plans to continue focusing on cost reductions to maintain profitability despite potential revenue and margin volatility in upcoming quarters[2] - Stock-based compensation expense decreased to $258 from $423 year-over-year[16] Cash Flow and Liquidity - The company ended the quarter with cash on hand of approximately $2.9 million and has no debt[7] - Net cash provided by operating activities was $311, a significant improvement from a cash used of $3,991 in the prior year[16] - Cash at the end of the period was $2,892, down from $4,869 at the end of the same period last year[16] - Net cash used in investing activities was $668, with no purchases of property and equipment reported for the current period[16] - Net cash used in financing activities was $37, compared to $590 in the previous year[16] - The company reported a net increase in cash of $274, contrasting with a decrease of $5,249 in the same period last year[16] - Changes in operating assets and liabilities resulted in a cash outflow of $1,927, an improvement from $2,725 in the previous year[16] Future Outlook - The company is cautiously optimistic about future growth, citing operational improvements and a strong team as key factors[2] Depreciation and Allowance - Depreciation and amortization expense remained relatively stable at $449, compared to $445 in the prior year[16] - Allowance for doubtful accounts and estimated credit losses showed a reversal of $71, compared to an expense of $162 in the previous year[16]

Revenue and Financial Performance - Oncology services revenue decreased to $50.2 million in fiscal 2024 from $53.9 million in fiscal 2023, a decline of 6.9%[124] - The company reported a net loss of approximately $7.3 million for fiscal 2024, compared to a net loss of approximately $5.3 million in fiscal 2023[133] - Net cash used in operating activities was $6.1 million for fiscal 2024, a decrease from net cash provided of $4.0 million in fiscal 2023[134] Expenses - Gross margin for oncology services was 41% in fiscal 2024, down from 45% in fiscal 2023, attributed to unchanged variable costs amid revenue decline[125] - Research and development expenses decreased by 17.3% to $9.5 million in fiscal 2024 from $11.5 million in fiscal 2023 due to cost-cutting measures[126] - General and administrative expenses increased by 8.1% to $11.1 million in fiscal 2024, primarily due to compensation and recruiting expenses[128] Asset Impairment and Liabilities - The company recognized an asset impairment of $807,000 related to Lumin software development costs in fiscal 2023, with no impairment charges in fiscal 2024[129] - The company recorded an asset impairment charge related to software development costs of $807,000 during fiscal 2023, with no impairment charges recorded during fiscal 2024[147] - As of April 30, 2024 and 2023, the company recognized a liability for uncertain tax positions related to foreign operations amounting to $181,000[149] - The company has established a full valuation allowance for all deferred tax assets as of April 30, 2024 and 2023[148] Cash Flow and Investments - Cash used in investing activities was $836,000 in fiscal 2024, down from $2.9 million in fiscal 2023, primarily for lab and computer equipment[136] - Loss on disposal of equipment was $435,000 in fiscal 2024, compared to zero in fiscal 2023[130] Strategic Initiatives - The company is exploring strategic options to create additional value from its drug discovery business, including potential spin-out transactions or capital raises[121] Accounting Policies - The company adopted ASU No. 2016-13 on May 1, 2023, which requires immediate recognition of management's estimates of current expected credit losses, with no material effect on financial statements[152] - The company has no off-balance sheet debt or similar obligations, nor any transactions with related parties that are not disclosed[153] - Capitalized software development costs are amortized over an estimated useful economic life of three years[146] - The recoverability of capitalized software development costs is assessed by comparing forecasted future revenues to the carrying amount of the costs[147] - Stock-based payments are recognized based on fair value using the Black-Scholes option pricing model, with expenses adjusted for forfeitures[145] - The company does not anticipate any significant unrecognized tax benefits will be recorded during the next 12 months[149] - Amendments to contracts are evaluated to determine if they should be accounted for as separate contracts or as a continuation of the original agreement[144]

Financial Data and Key Metrics Changes - Fiscal 2024 saw a revenue decline of approximately $4 million or 7%, totaling $15 million, marking a contraction for the first time in many years [8][12] - In Q4, revenue increased to $14 million, up from $13.1 million in the prior year, representing a 7% increase [9] - Adjusted EBITDA for Q4 was approximately $900,000, compared to an adjusted loss of $900,000 in Q4 of 2023 [9][17] - The loss from operations for fiscal year 2024 was $7.4 million, compared to a loss of $5.3 million in 2023 [17] Business Line Data and Key Metrics Changes - The pharmacology services gross margin expanded to 49% in Q4, compared to 47% in the same quarter last year [39] - R&D expenses decreased to approximately $2 million in Q4 from $2.8 million in the prior year, and for the year, R&D expenses were $9.5 million compared to $11.5 million in fiscal 2023 [45] - Sales and marketing expenses remained relatively unchanged at $1.8 million for Q4 and $6.9 million for the year [46] Market Data and Key Metrics Changes - The biotech economic environment led to fewer new companies booking services and a slight decrease in average study size, impacting bookings growth [4][12] - Cancellations on recently signed bookings have slowed, indicating a potential stabilization in the market [5] Company Strategy and Development Direction - The company is focusing on expanding relationships with large pharma customers, which are less susceptible to downturns in the biotech sector [5] - Corellia, the drug development subsidiary, is actively seeking to out-license several programs while minimizing costs [7] - The company aims to improve operational efficiencies and scalability to support revenue growth with a smaller increase in operating costs [6][14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about emerging positive trends and a gradual loosening of R&D budgets leading to increased opportunities [3][13] - The company anticipates maintaining a cash-neutral position while improving bottom-line results in fiscal year 2025 [21][41] - Management is confident in returning to profitability and revenue growth compared to the first half of 2023 [41] Other Important Information - The company ended the year with $2.6 million in cash and no debt, with cash used in operating activities amounting to $1.8 million [21] - The company has made significant investments in prior periods to automate its ex-vivo platform, which is expected to enhance capacity and efficiency [21] Q&A Session Summary Question: Was the Q4 growth due to delayed projects or new business? - Management indicated that Q4 growth was a combination of improved opportunity generation, reduced cancellations, and operational efficiencies [24][25] Question: What operational improvements have been implemented? - Management confirmed that they have made significant operational changes to enhance efficiency and scalability, which are expected to yield benefits moving forward [27][28] Question: What percentage of revenues come from large pharma? - Approximately 40% of revenues are derived from top-tier customers, with a focus on deepening relationships with these clients [29]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) [Management Commentary & Outlook](index=1&type=section&id=Management%20Commentary%20%26%20Outlook) Management acknowledged fiscal 2024 challenges, but anticipates market recovery and sustained profitability in fiscal 2025, while seeking investment for its AI subsidiary Corellia - The company faced hurdles in fiscal 2024 due to a challenging biotech funding environment and variable spending from large pharma, leading to slower sales growth and increased cancellations[2](index=2&type=chunk) - Management believes the market is showing signs of recovery and that the company has 'turned a corner' entering fiscal 2025[2](index=2&type=chunk) - Strategic cost-cutting measures and operational efficiencies led to positive adjusted EBITDA in Q4, with expectations for sustained profitability in fiscal 2025[2](index=2&type=chunk) - The company is actively seeking investment for its wholly-owned AI subsidiary, Corellia, while managing its expenses[2](index=2&type=chunk) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) The company reported **$14.0 million** revenue and positive adjusted EBITDA in Q4 FY2024, contrasting with **$50.2 million** revenue and an adjusted EBITDA loss for the full fiscal year Q4 Fiscal 2024 Highlights | Metric | Value | | :--- | :--- | | Revenue | $14.0 million (+7% YoY) | | Adjusted EBITDA Income | $884,000 | | Gross Margin (Pharmacology) | 49% | Full Fiscal Year 2024 Highlights | Metric | Value | | :--- | :--- | | Annual Revenue | $50.2 million (-7% YoY) | | Adjusted EBITDA Loss | $3.9 million | | Gross Margin (Pharmacology) | 42% | [Detailed Financial Results](index=1&type=section&id=Detailed%20Financial%20Results) [Fourth Quarter Fiscal 2024 Results](index=1&type=section&id=Fourth%20Quarter%20Fiscal%202024%20Results) Q4 FY2024 saw revenue grow 7% to **$14.0 million**, operating expenses decrease 9%, leading to a positive adjusted EBITDA of **$884,000** and gross margin expansion to **48%** Q4 FY2024 vs Q4 FY2023 Performance | Metric | Q4 FY2024 | Q4 FY2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $14.0M | $13.1M | +7% | | Total Operating Expenses | $14.2M | $15.6M | -9% | | Loss from Operations | ($190K) | ($2.5M) | +92% | | Adjusted EBITDA | $884K | ($922K) | N/A | - Gross margin for the quarter improved to **48%** from **44%** in the prior year, attributed to better revenue conversion and a stable cost structure[6](index=6&type=chunk) - Research and development (R&D) expenses decreased by **28%** to **$2.0 million** due to careful monitoring of spending[7](index=7&type=chunk) - Net cash used in operating activities was approximately **$1.8 million** for the quarter and the company ended the quarter with **$2.6 million** in cash and no debt[8](index=8&type=chunk) [Full Fiscal Year 2024 Results](index=2&type=section&id=Full%20Fiscal%20Year%202024%20Results) Full fiscal year 2024 saw total revenue decline **7%** to **$50.2 million**, leading to a widened net loss from operations of **$7.4 million** and an adjusted EBITDA loss of **$3.9 million**, with gross margin contracting to **41%** Fiscal Year 2024 vs 2023 Performance | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $50.2M | $53.9M | -7% | | Total Operating Expenses | $57.5M | $59.1M | -3% | | Net Loss from Operations | ($7.4M) | ($5.3M) | -39.6% | | Adjusted EBITDA Loss | ($3.9M) | ($1.3M) | -200% | - The decline in annual revenue was primarily attributed to customer cancellations in fiscal year 2023, which impacted study revenue in fiscal year 2024[9](index=9&type=chunk) - Gross margin for the fiscal year decreased to **41%** from **45%** in the prior year, as the variable cost component did not decline meaningfully with the lower study volume[12](index=12&type=chunk) - Net cash used in operations for the fiscal year was **$6.1 million** and the company paused its stock repurchase program[14](index=14&type=chunk) [Financial Statements and Reconciliations](index=5&type=section&id=Financial%20Statements%20and%20Reconciliations) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported an annual net loss of **$7.3 million** for FY2024, while Q4 net loss significantly narrowed to **$109,000**, with annual revenue at **$50.2 million** and quarterly revenue at **$14.0 million** Statement of Operations Highlights (in thousands) | Metric | Twelve Months Ended Apr 30, 2024 | Twelve Months Ended Apr 30, 2023 | | :--- | :--- | :--- | | Oncology services revenue | $50,155 | $53,870 | | Loss from operations | $(7,356) | $(5,256) | | Net loss | $(7,276) | $(5,335) | | Net loss per share | $(0.54) | $(0.39) | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of April 30, 2024, cash decreased to **$2.6 million**, total assets declined to **$26.1 million**, and the company reported a stockholders' deficit of **$1.9 million** Balance Sheet Summary (in thousands) | Metric | April 30, 2024 | April 30, 2023 | | :--- | :--- | :--- | | Cash | $2,618 | $10,118 | | Total Current Assets | $13,639 | $19,457 | | Total Assets | $26,132 | $34,311 | | Total Current Liabilities | $21,541 | $21,733 | | Total Liabilities | $28,035 | $29,675 | | Stockholders' (Deficit) Equity | $(1,903) | $4,636 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For FY2024, net cash used in operating activities was **$6.1 million**, leading to a **$7.5 million** decrease in cash, with the year-end balance at **$2.6 million** Cash Flow Summary (in thousands) | Metric | Twelve Months Ended Apr 30, 2024 | Twelve Months Ended Apr 30, 2023 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(6,137) | $3,972 | | Net cash used in investing activities | $(836) | $(2,872) | | Net cash (used in) provided by financing activities | $(527) | $11 | | (Decrease) increase in cash | $(7,500) | $1,111 | | Cash, end of period | $2,618 | $10,118 | [GAAP to Non-GAAP Reconciliation](index=5&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) The company reconciles GAAP to Non-GAAP net income and EPS, primarily by excluding stock-based compensation, reporting a FY2024 Non-GAAP net loss of **$6.2 million** and Q4 Non-GAAP net income of **$154,000** GAAP to Non-GAAP Net Income (Loss) Reconciliation (in thousands) | Metric | Q4 FY2024 | Q4 FY2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | Net loss - GAAP | $(109) | $(2,561) | $(7,276) | $(5,335) | | Stock-based compensation | $263 | $209 | $1,118 | $864 | | Net income (loss) - non-GAAP | $154 | $(2,352) | $(6,158) | $(4,471) | GAAP to Non-GAAP EPS Reconciliation (Basic) | Metric | Q4 FY2024 | Q4 FY2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | EPS - GAAP, basic | $(0.01) | $(0.19) | $(0.54) | $(0.39) | | EPS - non-GAAP, basic | $0.01 | $(0.17) | $(0.46) | $(0.33) |

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Champions Oncology, Inc. reported a $7.2 million net loss on $36.2 million revenue for the nine months ended January 31, 2024, with total assets decreasing and operating cash flow turning negative [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $26.8 million by January 31, 2024, primarily from reduced cash, leading to a $2.1 million stockholders' deficiency Condensed Consolidated Balance Sheet Highlights | Account | Jan 31, 2024 (unaudited) ($ thousands) | Apr 30, 2023 ($ thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $4,468 | $10,118 | | Accounts receivable, net | $7,895 | $8,011 | | Total current assets | $13,198 | $19,457 | | Total assets | $26,787 | $34,311 | | **Liabilities & Equity** | | | | Deferred revenue | $13,329 | $12,776 | | Total current liabilities | $21,969 | $21,733 | | Total liabilities | $28,845 | $29,675 | | Total stockholders' equity (deficiency) | $(2,058) | $4,636 | [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For the nine months ended January 31, 2024, revenue decreased to $36.2 million, widening the net loss to $7.2 million from $2.8 million Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended Jan 31, 2024 ($ thousands) | Three Months Ended Jan 31, 2023 ($ thousands) | Nine Months Ended Jan 31, 2024 ($ thousands) | Nine Months Ended Jan 31, 2023 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | Oncology services revenue | $12,019 | $12,773 | $36,153 | $40,799 | | Total costs and operating expenses | $14,596 | $15,231 | $43,238 | $43,534 | | Loss from operations | $(2,577) | $(2,458) | $(7,085) | $(2,735) | | Net loss | $(2,530) | $(2,439) | $(7,167) | $(2,774) | | Net loss per share (basic and diluted) | $(0.19) | $(0.18) | $(0.53) | $(0.20) | [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficiency)](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20%28Deficiency%29) Stockholders' equity shifted from $4.6 million to a $2.1 million deficiency by January 31, 2024, driven by a $7.2 million net loss - The company's equity position shifted from a positive **$4,636 thousand** to a deficiency of **$(2,058) thousand** over the nine months ended January 31, 2024[39](index=39&type=chunk) - Key activities impacting equity included a net loss of **$7,167 thousand**, stock-based compensation of **$855 thousand**, and common stock repurchases totaling **$634 thousand**[39](index=39&type=chunk)[41](index=41&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $4.3 million for the nine months ended January 31, 2024, leading to a $5.7 million overall cash decrease Consolidated Statements of Cash Flows Highlights | Cash Flow Activity | Nine Months Ended Jan 31, 2024 ($ thousands) | Nine Months Ended Jan 31, 2023 ($ thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(4,321) | $4,664 | | Net cash used in investing activities | $(947) | $(2,112) | | Net cash provided by (used in) financing activities | $(382) | $86 | | **Increase (decrease) in cash** | **$(5,650)** | **$2,638** | | Cash at beginning of period | $10,118 | $9,007 | | **Cash at end of period** | **$4,468** | **$11,645** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, revenue recognition, and liquidity, with management asserting sufficient cash for the next 12 months - The company is a technology-enabled research organization focused on drug discovery and development, operating through several subsidiaries, though none of the foreign subsidiaries generated revenue in the reported periods[17](index=17&type=chunk)[42](index=42&type=chunk) - Management believes that cash on hand (**$4.5 million**) and expected cash from operations are adequate to fund operations for at least 12 months, but has cost reduction strategies if revenue expectations are not met[21](index=21&type=chunk) - Revenue is recognized over time using a progress-based input method for its highly-integrated oncology services, which are typically completed within a year[53](index=53&type=chunk)[55](index=55&type=chunk)[79](index=79&type=chunk) - The company has a share repurchase program authorized for up to **$5.0 million** As of January 31, 2024, approximately **$708,000** had been used to repurchase shares, with **$4.3 million** remaining[127](index=127&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 11.4% revenue decrease and widened $7.1 million net loss to prior year study cancellations and fixed costs [Overview and Recent Developments](index=21&type=section&id=Overview%20and%20Recent%20Developments) The company provides drug discovery solutions via its TumorGraft Platform and Lumin SaaS, while evaluating strategic options for its pipeline - The company's core business involves providing Translational Oncology Solutions (TOS) using its proprietary platforms to facilitate drug discovery for pharmaceutical and biotech companies[114](index=114&type=chunk)[138](index=138&type=chunk) - The company offers a SaaS program, Lumin Bioinformatics, which leverages its large dataset with analytics and AI for computational cancer research[161](index=161&type=chunk) - Strategic options for its drug discovery business, such as spin-outs or capital raises, are under regular evaluation to create additional value[162](index=162&type=chunk) [Operating Results](index=22&type=section&id=Operating%20Results) Nine-month oncology services revenue decreased 11.4% to $36.2 million, leading to a gross margin drop and a 159% increase in operating loss Operating Results Summary (Nine Months Ended Jan 31, in thousands) | Line Item | 2024 ($ thousands) | 2023 ($ thousands) | % Change | | :--- | :--- | :--- | :--- | | Oncology services revenue | $36,153 | $40,799 | (11.4)% | | Cost of oncology services | $22,151 | $22,194 | (0.2)% | | Research and development | $7,494 | $8,693 | (13.8)% | | Sales and marketing | $5,288 | $5,153 | 2.6% | | General and administrative | $8,305 | $7,494 | 10.8% | | **Loss from operations** | **$(7,085)** | **$(2,735)** | **159.0%** | - The decrease in revenue was attributed to an increase in study cancellations during fiscal year 2023, which reduced the available convertible revenue for the current year[142](index=142&type=chunk) - The decline in gross margin for both the three and nine-month periods was primarily due to the drop in revenue against a generally unchanged cost base[119](index=119&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) As of January 31, 2024, the company had $4.5 million in cash, asserting sufficient liquidity for 12 months despite a $7.2 million net loss - The company had cash on hand of approximately **$4.5 million** and an accumulated deficit of **$84.5 million** as of January 31, 2024[163](index=163&type=chunk) - Management asserts that cash on hand plus expected cash flows are adequate for at least 12 months, but has contingency plans for cost reduction if revenue targets are not met[163](index=163&type=chunk) [Cash Flows](index=23&type=section&id=Cash%20Flows) For the nine months ended January 31, 2024, the company used $4.3 million in operating cash, $0.9 million in investing, and $0.4 million in financing - Net cash used in operating activities was **$4.3 million**, driven by the period's net loss[171](index=171&type=chunk) - Investing activities consisted of **$947,000** used for purchasing lab and computer equipment[172](index=172&type=chunk) - Financing activities used **$382,000**, mainly for the stock repurchase program[173](index=173&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Champions Oncology, Inc. is exempt from providing market risk disclosures - The company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information otherwise required under this Item[148](index=148&type=chunk) [Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of January 31, 2024, with no material changes to internal controls during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of January 31, 2024, at a reasonable assurance level[150](index=150&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[178](index=178&type=chunk) [PART II – OTHER INFORMATION](index=26&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) To management's knowledge, no litigation is currently pending or contemplated against the company, its officers, or directors - The company is not currently party to any legal proceedings[180](index=180&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors from the company's 2023 Annual Report on Form 10-K have occurred - As a smaller reporting company, risk factors are not required in this report There have been no material changes from the risk factors disclosed in the 2023 Annual Report[181](index=181&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or information on the use of proceeds during the period - There were no unregistered sales of equity securities during the period[154](index=154&type=chunk) [Defaults Upon Senior Securities](index=26&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable as the company reported no defaults upon senior securities - Not applicable[155](index=155&type=chunk) [Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations, therefore no mine safety disclosures are reported - None[183](index=183&type=chunk) [Other Information](index=26&type=section&id=Item%205.%20Other%20Information) No other information was reported for the period - None[187](index=187&type=chunk) [Exhibits](index=27&type=section&id=Item%206.%20Exhibits) The report lists filed exhibits, including CEO and CFO certifications and iXBRL documents - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1) and iXBRL Instance Documents[3](index=3&type=chunk)[184](index=184&type=chunk)

Financial Data and Key Metrics Changes - The third quarter revenue was $12 million, a decline of 6% from the same quarter in fiscal 2023, with expectations of gradual improvement starting from Q3 [5][11] - Gross margin dipped to 35% for the quarter compared to 41% for the same period last year, with expectations for improvement as revenue expands [14][20] - The loss for the third quarter was approximately $2.6 million compared to $2.5 million in the prior year, with an adjusted EBITDA loss of approximately $1.7 million for the quarter [20][21] Business Line Data and Key Metrics Changes - Sales and marketing expense remained unchanged at $1.7 million, while G&A expense was mostly flat at $2 million compared to $1.9 million in Q3 2023 [6] - R&D expense was approximately $2.2 million compared to $3.2 million in the year-ago period, with a significant reduction in investment towards drug discovery efforts [41] Market Data and Key Metrics Changes - The company noted a modest uptick in clinical bookings, although this area has lagged behind internal expectations [12] - There has been a loosening of R&D budgets in the biotech sector, with increased activity observed in recent months compared to the previous year [17][27] Company Strategy and Development Direction - The company is focusing on expanding work with larger pharmaceutical companies, which generally have more stable budgets compared to smaller biotech firms [3][27] - The company is actively engaged in raising capital to support growth and is evaluating potential near-term licensing opportunities [4][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging third quarter but expressed confidence in positive developments that will lead to improving results in the coming quarters [11][28] - The anticipated turnaround has taken longer than expected, but management is optimistic about achieving quarterly profitability and expanding operating margins over time [27][28] Other Important Information - The company ended the quarter with $4.5 million in cash and no debt, with cash used in operating activities approximately $900,000 [21][30] - The total cost of sales increased to $7.8 million compared to $7.5 million in the third quarter last year, primarily due to increased mouse costs [29] Q&A Session Summary Question: What is the progress update on Corellia AI and investment during Q3? - Management indicated a significant reduction in investment for Corellia in Q4 and Q1, while expressing optimism about potential out-licensing deals for some assets [19][33] Question: What are the expectations regarding the press release and customer budgets? - Management acknowledged a technical issue with the press release timing and noted that customer budgets are showing signs of improvement, although it is still early to determine the extent of recovery [43][44]

[Management Commentary and Business Outlook](index=1&type=section&id=Management%20Commentary%20and%20Business%20Outlook) Management acknowledges a challenging economic environment, particularly in the biotech sector, which has impacted revenue growth. In response, the company is strategically reducing costs to improve short-term results. Despite the downturn, leadership remains confident in a future rebound and is actively seeking capital for its AI subsidiary, Corellia, AI, while progressing its lead targets towards potential licensing deals - The company is navigating a challenging economic environment that began approximately one year ago, particularly affecting the biotech sector[3](index=3&type=chunk) - Strategic initiatives include 'right-sizing' the business to reduce costs and improve short-term financial results without impacting long-term potential[3](index=3&type=chunk) - The company is actively engaged in raising capital for its wholly owned AI subsidiary, Corellia, AI[3](index=3&type=chunk) - Two lead drug targets are progressing, with a potential licensing deal anticipated in the coming quarters[3](index=3&type=chunk) [Third Quarter Fiscal 2024 Financial Performance](index=1&type=section&id=Third%20Quarter%20Fiscal%2024%20Financial%20Performance) For the third quarter of fiscal 2024, Champions Oncology reported a 5.9% decrease in revenue to $12.0 million, primarily due to prior-period customer cancellations. Gross margin contracted to 34.7% from 39.7% year-over-year due to lower revenue against fixed costs and operational inefficiencies. The company recorded an operating loss of $2.6 million and an adjusted EBITDA loss of $1.7 million, both slightly wider than the prior year's quarter [Q3 Revenue and Profitability](index=1&type=section&id=Q3%20Revenue%20and%20Profitability) Q3 FY2024 vs Q3 FY2023 Key Financial Metrics | Metric | Q3 FY2024 | Q3 FY2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $12.0M | $12.8M | -5.9% | | Gross Margin | 34.7% | 39.7% | -5.0 p.p. | | Loss from Operations | ($2.6M) | ($2.5M) | +4.1% | | Adjusted EBITDA Loss | ($1.7M) | ($1.6M) | +6.3% | - The decline in revenue was primarily attributed to customer cancellations in prior periods, which led to lower study revenue in the current quarter[4](index=4&type=chunk)[5](index=5&type=chunk) - Lower gross margin was a result of decreased revenue against relatively fixed costs, combined with higher variable costs from operational inefficiencies[7](index=7&type=chunk) [Q3 Operating Expenses](index=2&type=section&id=Q3%20Operating%20Expenses) Q3 FY2024 Operating Expenses (in thousands) | Expense Category | Q3 FY2024 | Q3 FY2023 | YoY Change | | :--- | :--- | :--- | :--- | | Cost of Oncology Solutions | $7,849 | $7,699 | +1.9% | | Research & Development | $2,186 | $3,202 | -31.7% | | Sales & Marketing | $1,797 | $1,761 | +2.0% | | General & Administrative | $2,764 | $2,569 | +7.6% | - The significant decrease in R&D expense was primarily due to reduced investment in the company's target discovery program[8](index=8&type=chunk) - The increase in G&A expense was mainly driven by higher compensation, recruiting expenses, and an increase in bad debt reserves[8](index=8&type=chunk) [Q3 Cash Flow](index=2&type=section&id=Q3%20Cash%20Flow) - Net cash used in operating activities was approximately **$920,000** for the quarter, primarily due to the operational loss[9](index=9&type=chunk) - Net cash used in investing activities was approximately **$125,000** for investments in lab and computer equipment[9](index=9&type=chunk) - There were no financing activities during the third quarter of fiscal year 2024[9](index=9&type=chunk) [Year-To-Date Fiscal 2024 Financial Performance](index=2&type=section&id=Year-To-Date%20Fiscal%202024%20Financial%20Performance) For the first nine months of fiscal 2024, revenue decreased by 11.4% to $36.2 million compared to the same period last year. The gross margin fell to 38.7% from 45.6%. This resulted in a significantly wider loss from operations of $7.1 million and an adjusted EBITDA loss of $4.8 million, compared to losses of $2.7 million and $0.4 million, respectively, in the prior year period. The company ended the quarter with $4.5 million in cash and no debt [YTD Revenue and Profitability](index=2&type=section&id=YTD%20Revenue%20and%20Profitability) YTD FY2024 vs YTD FY2023 Key Financial Metrics | Metric | YTD FY2024 | YTD FY2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $36.2M | $40.8M | -11.4% | | Gross Margin | 38.7% | 45.6% | -6.9 p.p. | | Loss from Operations | ($7.1M) | ($2.7M) | +163% | | Adjusted EBITDA Loss | ($4.8M) | ($0.4M) | +1100% | - The year-to-date revenue decline was also attributed to customer cancellations in fiscal year 2023, leading to lower study revenue in fiscal 2024[10](index=10&type=chunk) [YTD Operating Expenses](index=3&type=section&id=YTD%20Operating%20Expenses) YTD FY2024 Operating Expenses (in thousands) | Expense Category | YTD FY2024 | YTD FY2023 | YoY Change | | :--- | :--- | :--- | :--- | | Cost of Oncology Solutions | $22,151 | $22,194 | -0.2% | | Research & Development | $7,494 | $8,693 | -13.8% | | Sales & Marketing | $5,288 | $5,153 | +2.6% | | General & Administrative | $8,305 | $7,494 | +10.8% | - The decrease in R&D expense was primarily from reduced investment in the target discovery program[13](index=13&type=chunk) - The increase in G&A expense was mainly due to higher compensation, recruiting expenses, and allowances for bad debt, partially offset by lower IT costs[13](index=13&type=chunk) [YTD Cash Flow and Financial Position](index=3&type=section&id=YTD%20Cash%20Flow%20and%20Financial%20Position) - Net cash used in operating activities for the nine-month period was **$4.3 million**[14](index=14&type=chunk) - Net cash used in investing activities was **$950,000**, primarily for lab and computer equipment[14](index=14&type=chunk) - Net cash used in financing activities was **$382,000**, resulting from stock repurchases offset by proceeds from option exercises[14](index=14&type=chunk) - The company ended the quarter with approximately **$4.5 million** in cash and cash equivalents and **no debt**[15](index=15&type=chunk) [Financial Statements and Reconciliations](index=5&type=section&id=Financial%20Statements%20and%20Reconciliations) The provided financial statements detail the company's performance. The Statement of Operations shows increased net losses for both the third quarter and year-to-date periods. The Balance Sheet indicates a decrease in total assets and a shift to a stockholders' deficit. The Statement of Cash Flows reflects negative cash flow from operations for the nine-month period, a significant reversal from the positive cash flow in the prior year. GAAP to Non-GAAP reconciliations are provided to adjust for stock-based compensation [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Q3 FY2024 Statement of Operations Highlights (in thousands) | Line Item | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | Oncology Services Revenue | $12,019 | $12,773 | | Loss from Operations | ($2,577) | ($2,458) | | Net Loss | ($2,530) | ($2,439) | | Net Loss per Share (basic & diluted) | ($0.19) | ($0.18) | YTD FY2024 Statement of Operations Highlights (in thousands) | Line Item | YTD FY2024 | YTD FY2023 | | :--- | :--- | :--- | | Oncology Services Revenue | $36,153 | $40,799 | | Loss from Operations | ($7,085) | ($2,735) | | Net Loss | ($7,167) | ($2,774) | | Net Loss per Share (basic & diluted) | ($0.53) | ($0.20) | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Balance Sheet Highlights (in thousands) | Account | Jan 31, 2024 | Apr 30, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,468 | $10,118 | | Total current assets | $13,198 | $19,457 | | Total assets | $26,787 | $34,311 | | Total liabilities | $28,845 | $29,675 | | Stockholders' equity (deficit) | ($2,058) | $4,636 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Nine Months Ended Jan 31 Cash Flow Summary (in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($4,321) | $4,664 | | Net cash used in investing activities | ($947) | ($2,112) | | Net cash (used in) provided by financing activities | ($382) | $86 | | Net decrease in cash | ($5,650) | $2,638 | | Cash at end of period | $4,468 | $11,645 | [GAAP to Non-GAAP Reconciliation](index=5&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) Q3 Net Loss Reconciliation (in thousands) | Metric | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | Net Loss - GAAP | ($2,530) | ($2,439) | | Stock-based compensation | $379 | $331 | | Net Loss - Non-GAAP | ($2,151) | ($2,108) | Q3 EPS Reconciliation | Metric | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | EPS - GAAP | ($0.19) | ($0.18) | | Effect of stock-based compensation | $0.03 | $0.02 | | EPS - Non-GAAP | ($0.16) | ($0.16) |