[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) |

Financial Data and Key Metrics Changes - The second quarter revenue was $11.6 million, a decline of 19% from the second quarter of fiscal 2023 [7] - The loss for the second quarter of 2024 was approximately $2 million, compared to a gain of $8,000 in the prior year [7] - Gross margin for the quarter was 43%, down from 49% for the same period last year [8] - Adjusted EBITDA loss was approximately $1.4 million for the quarter, compared to an adjusted EBITDA profit of $686,000 in the year-ago period [26] Business Line Data and Key Metrics Changes - The total cost of sales was $6.6 million, a decline of 9% compared to $7.2 million in the second quarter last year [8] - R&D expense was approximately $2.5 million, slightly down from $2.6 million in the year-ago period, with $1.2 million invested in drug discovery efforts [27] Market Data and Key Metrics Changes - Cancellations have receded back to historical levels, indicating a potential stabilization in the market [4][35] - The company noted a mixed outlook from pharmaceutical and biotech companies regarding budget planning for the upcoming year [16] Company Strategy and Development Direction - The company has made operational changes, including key hires and internal restructuring, to improve efficiencies and operations [4] - There is a focus on expanding the clinical biomarkers pipeline and ex vivo offerings to drive long-term revenue growth [23] - The company anticipates a gradual improvement in operational results, including revenue growth and profitability within the next couple of quarters [11] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about a return to revenue growth and profitability, despite recent revenue weakness [5][11] - The company is confident that bookings, a leading indicator of revenue, remain strong, and operational corrections are beginning to take effect [11][35] - Management acknowledged that while the environment is not as robust as a couple of years ago, it is better than the previous year, with larger pharmaceutical companies showing healthier budgets [16][37] Other Important Information - The company ended the quarter with $5.5 million in cash and no debt, with cash generated from operating activities of approximately $600,000 [28] - The company anticipates remaining in a generally cash-neutral position for the next quarter or two, with gradual acceleration expected towards the end of fiscal 2024 [10] Q&A Session Summary Question: Are cancellations broad-based or due to one or two large cancellations? - Management indicated that cancellations were broad-based and not due to one or two customers, reflecting an industry-wide trend [14] Question: What are the expectations from pharma and biotech companies for next year? - Management noted mixed feelings, with larger pharmaceutical companies showing healthier budgets compared to smaller biotech firms [16][32] Question: How is the company positioned for future growth? - Management expressed confidence in the company's robust bookings and operational improvements, indicating a positive outlook for returning to normal profitability and growth [35][40]

PART I – FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes in equity, and cash flows, along with explanatory notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, including assets, liabilities, and equity, as of October 31, 2023, and April 30, 2023 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Oct 31, 2023 (unaudited) | Apr 30, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $5,513 | $10,118 | | Total current assets | $14,017 | $19,457 | | Total assets | $28,294 | $34,311 | | **Liabilities & Equity** | | | | Total current liabilities | $20,950 | $21,733 | | Total liabilities | $28,201 | $29,675 | | Total stockholders' equity | $93 | $4,636 | | Accumulated deficit | ($81,954) | ($77,317) | [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net loss for the three and six months ended October 31, 2023 and 2022 Operating Results for the Three Months Ended October 31 (in thousands, except per share) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Oncology services revenue | $11,573 | $14,281 | | Total costs and operating expenses | $13,528 | $14,274 | | Income (loss) from operations | ($1,955) | $7 | | Net loss | ($2,071) | ($16) | | Net loss per common share | ($0.15) | $0.00 | Operating Results for the Six Months Ended October 31 (in thousands, except per share) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Oncology services revenue | $24,134 | $28,026 | | Total costs and operating expenses | $28,641 | $28,303 | | (Loss) Income from operations | ($4,507) | ($277) | | Net loss | ($4,637) | ($335) | | Net loss per common share | ($0.34) | ($0.02) | [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This section outlines the changes in the company's stockholders' equity, including the impact of net loss and share repurchases - Total stockholders' equity decreased from **$4.6 million** at April 30, 2023, to **$93,000** at October 31, 2023. The decrease was primarily driven by a net loss of **$4.6 million** and common stock repurchases totaling approximately **$708,000**, partially offset by stock-based compensation and proceeds from stock option exercises[76](index=76&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the company's cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary for the Six Months Ended October 31 (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($3,402) | $3,091 | | Net cash used in investing activities | ($821) | ($1,358) | | Net cash (used in) provided by financing activities | ($382) | $86 | | **Net (decrease) increase in cash** | **($4,605)** | **$1,819** | | Cash at end of period | $5,513 | $10,826 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements - The company believes its cash on hand of **$5.5 million**, along with expected cash from operations, is adequate to fund operations for at least the next 12 months. However, it acknowledges that if revenue expectations are not met, cost reduction strategies may be implemented[94](index=94&type=chunk) Disaggregated Revenue for Six Months Ended October 31 (in thousands) | Service Line | 2023 | 2022 | | :--- | :--- | :--- | | Pharmacology services | $22,735 | $26,236 | | Other TOS revenue | $1,381 | $1,679 | | Personalized oncology services | $18 | $111 | | **Total oncology services revenue** | **$24,134** | **$28,026** | - The company initiated a share repurchase program on March 29, 2023, authorizing up to **$5.0 million** in purchases. As of October 31, 2023, approximately **120,300 shares** were repurchased for about **$708,000**, leaving **$4.3 million** available[150](index=150&type=chunk) - Royalty expenses related to licensed tumor models were approximately **$126,200** for the six months ended October 31, 2023, compared to **$108,000** for the same period in 2022[32](index=32&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 discusses a significant decline in oncology services revenue, attributing it to an increase in study cancellations, leading to an operating loss and lower margins, while expressing confidence in liquidity [Overview and Recent Developments](index=21&type=section&id=Overview%20and%20Recent%20Developments) This section provides an overview of the company's business, core offerings, and strategic initiatives in drug discovery and development - The company is a technology-enabled research organization focused on drug discovery and development, utilizing pharmacology, biomarker, and data platforms[38](index=38&type=chunk) - Core offerings include Translational Oncology Solutions (TOS) using the TumorGraft Technology Platform, and Lumin Bioinformatics, a Software as a Service (SaaS) program for computational cancer research[39](index=39&type=chunk)[40](index=40&type=chunk) - The company is actively developing its own pipeline of therapeutic targets and regularly evaluates strategic options for its drug discovery business, such as spin-outs or capital raises[42](index=42&type=chunk)[43](index=43&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, accumulated deficit, and management's assessment of its ability to fund operations - As of October 31, 2023, the company had **$5.5 million** in cash and an accumulated deficit of approximately **$82.0 million**[45](index=45&type=chunk) - For the six months ended October 31, 2023, the company experienced a net loss of **$4.6 million** and used **$3.4 million** in cash from operations[45](index=45&type=chunk) - Management believes current cash and expected cash flows are sufficient to fund operations for at least the next 12 months, with cost reduction strategies available if needed[45](index=45&type=chunk) [Operating Results](index=22&type=section&id=Operating%20Results) This section analyzes the company's revenue, costs, and operating loss, highlighting key drivers of financial performance Comparison of Operating Results for the Six Months Ended October 31 (in thousands) | Metric | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Oncology services revenue | $24,134 | $28,026 | (13.9)% | | Cost of oncology services | $14,302 | $14,495 | (1.3)% | | Research and development | $5,308 | $5,491 | (3.3)% | | Sales and marketing | $3,491 | $3,392 | 2.9% | | General and administrative | $5,540 | $4,925 | 12.5% | | **(Loss) Income from operations** | **($4,507)** | **($277)** | **1,527.1%** | - The **13.9% decrease** in six-month revenue was attributed to an increase in study cancellations during fiscal year 2023, which reduced net bookings and available convertible revenue[47](index=47&type=chunk) - Gross margin for the six months ended October 31, 2023, decreased to **40.7%** from **48.3%** in the prior year, primarily due to the decline in revenue against a relatively unchanged cost base[49](index=49&type=chunk) [Cash Flows](index=23&type=section&id=Cash%20Flows) This section provides a detailed breakdown of cash flows from operating, investing, and financing activities for the period - Net cash used in operating activities was **$3.4 million** for the six months ended October 31, 2023, primarily due to the net loss for the period[22](index=22&type=chunk) - Net cash used in investing activities was **$821,000** for the six months ended October 31, 2023, for investments in lab and computer equipment[23](index=23&type=chunk) - Net cash used in financing activities was **$382,000** for the six months ended October 31, 2023, reflecting the stock repurchase program, offset by cash from stock option exercises[24](index=24&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company, as a smaller reporting company, is not required to provide the information for this item - As a smaller reporting company, the company is exempt from providing disclosures about market risk[59](index=59&type=chunk) [Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of October 31, 2023. No material changes to the internal control over financial reporting were identified during the quarter [Evaluation of Disclosure Controls and Procedures](index=24&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section details management's assessment of the effectiveness of the company's disclosure controls and procedures - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of October 31, 2023[3](index=3&type=chunk) - The evaluation confirmed that required information is recorded, processed, summarized, and reported within the timeframes specified by the SEC[3](index=3&type=chunk) [Changes in Internal Control Over Financial Reporting](index=24&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports on any material changes to the company's internal control over financial reporting during the quarter - There were no changes in the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[4](index=4&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently party to any legal proceedings - None[7](index=7&type=chunk) [Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, this section is not required. The company refers readers to the Risk Factors section in its Annual Report on Form 10-K filed on July 24, 2023 - As a smaller reporting company, this item is not required. The company directs readers to its Form 10-K filed on July 24, 2023, for a discussion of risk factors[8](index=8&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=25&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company reported no unregistered sales of equity securities or use of proceeds from such sales. It provided an update on its ongoing share repurchase program, noting that approximately $708,000 worth of common stock has been purchased under the $5.0 million authorization, leaving a balance of $4.3 million [Unregistered Sales of Equity Securities](index=25&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities) This section reports on any unregistered sales of equity securities by the company - None[9](index=9&type=chunk) [Use of Proceeds](index=25&type=section&id=Use%20of%20Proceeds) This section reports on the use of proceeds from any equity security sales - None[10](index=10&type=chunk) [Issuer Purchases of Equity Securities](index=25&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) This section provides details on the company's common stock repurchase program and recent purchases - On March 29, 2023, the Board approved a share repurchase program authorizing up to **$5.0 million** of the company's common stock[11](index=11&type=chunk) - As of October 31, 2023, the company had purchased approximately **120,300 shares** at an average price of **$5.73 per share**, for a total of about **$708,000**[11](index=11&type=chunk) - Approximately **$4.3 million** remains available for repurchases under the authorized program[11](index=11&type=chunk) [Defaults Upon Senior Securities](index=25&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[12](index=12&type=chunk) [Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[13](index=13&type=chunk) [Other Information](index=25&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this item - None[14](index=14&type=chunk) [Exhibits](index=26&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including CEO and CFO certifications (Sections 302 and 906) and iXBRL data files - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act[16](index=16&type=chunk) - Interactive Data Files (iXBRL documents) are also filed as exhibits[16](index=16&type=chunk)

Financial Data and Key Metrics Changes - The first quarter revenue was $12.6 million, a decline of 9% from the first quarter of 2023 [4] - Gross margin for the quarter was 40%, down from 50% for the same period last year, with expectations of gradual improvement as revenue accelerates [5][7] - Loss from operations for the first quarter of 2024 was $2.6 million compared to a loss of $284,000 in the prior year, with an adjusted loss of $1.7 million compared to adjusted EBITDA of $450,000 in the year ago period [46] Business Line Data and Key Metrics Changes - The company has seen an increase in lead generation and clinical bookings, indicating positive developments in the clinical biomarker services [29] - R&D expense was approximately $2.8 million, slightly down from $2.9 million in the year-ago period, with $1.2 million invested in drug discovery efforts [32] Market Data and Key Metrics Changes - Cancellations have decreased over the last few months, retreating towards historical levels, which is a positive sign for future bookings [44] - The economic pressures impacting customer behavior are easing, leading to a more normalized environment for capital [50] Company Strategy and Development Direction - The company is focused on operational efficiency and has made key hires to support its drug discovery platform and clinical services [25][40] - There is an emphasis on expanding the ex vivo platform, which is anticipated to lead to increased sales and revenue growth [44] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about reversing negative trends and expects gradual improvement in operational results, including revenue growth and profitability [25][47] - The mood in the biotech sector is improving, with companies feeling more optimistic about raising funds [50] Other Important Information - The total cost of sales was $7.5 million, an increase of 9% compared to $6.9 million in the first quarter last year, primarily due to increased outsourced lab services [31] - The company ended the quarter with $5 million in cash and no debt, with cash used in operating activities amounting to $3.8 million [33] Q&A Session Summary Question: What are you hearing from your customers regarding cancellations? - Management noted that cancellations are decreasing, primarily due to customers reprioritizing their pipelines [9] Question: Regarding gross margin, can any outsourced services be brought in-house? - Management acknowledged that some services could potentially be brought in-house to reduce dependence on external providers [11] Question: How is the hiring strategy being affected by current results? - Management indicated that hiring goals remain stable, with a focus on maintaining a strong team rather than increasing or decreasing hiring significantly [58]

Revenue and Financial Performance - Oncology services revenue for the three months ended July 31, 2023, was $12.6 million, a decrease of 8.6% from $13.7 million in the same period of 2022[79]. - The company reported a net loss of approximately $2.6 million for the three months ended July 31, 2023, compared to a loss of $284,000 in the same period last year, representing a 798.6% increase in loss[79]. - Total costs and operating expenses increased by 7.7% to $15.1 million in Q3 2023, compared to $14.0 million in Q3 2022[79]. Cash and Liquidity - As of July 31, 2023, the company had cash on hand of approximately $4.9 million and an accumulated deficit of approximately $79.9 million[78]. - The company’s liquidity needs are primarily driven by research and development funding, with cash used in operations amounting to approximately $4.0 million for the three months ended July 31, 2023[78]. - Net cash used in operating activities was $4.0 million for the three months ended July 31, 2023, compared to cash used of $195,000 in the same period of 2022, primarily due to an operating loss and increased accounts receivable[123]. Expenses - Research and development expenses for Q3 2023 were $2.8 million, accounting for 22.2% of revenue, a slight decrease from 21.0% in Q3 2022[79]. - General and administrative expenses increased by 22.6% to $2.9 million in Q3 2023, compared to $2.4 million in Q3 2022[79]. - General and administrative expenses increased to $2.9 million for the three months ended July 31, 2023, up $542,000 or 22.6% from $2.4 million in 2022, primarily due to increased bad debt expense and non-cash stock-based compensation[122]. - Total stock-based compensation expense for the three months ended July 31, 2023, was $423,000, compared to $206,000 in the same period of 2022, reflecting a significant increase[114]. Investments and Capital Expenditures - Net cash used in investing activities was $668,000 for the three months ended July 31, 2023, down from $754,000 in 2022, attributed to investments in additional lab and computer equipment[124]. - The company recognized a finance lease for laboratory equipment with costs of approximately $368,000, with cash payments structured as part of a purchase commitment agreement[109]. - The total capitalized gross asset costs for the Lumin platform, which was launched and placed into service, amounted to $1.9 million, with an impairment loss recognized of $807,000 as of April 30, 2023[108]. Lease Obligations - The company’s operating leases resulted in a total undiscounted liability of $16.2 million, with a present value of minimum lease payments at $8.4 million as of July 31, 2023[87]. 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, indicating ongoing research efforts[100]. - For the three months ended July 31, 2023, research and development expenses were $2.8 million, a slight decrease of approximately $0.1 million or 3.3% compared to $2.9 million in the same period of 2022[120]. Shareholder Actions - The company has a share repurchase program authorized for up to $5.0 million, with approximately 115,000 shares purchased at an average price of $5.62 per share, totaling approximately $676,000[82]. - As of July 31, 2023, approximately 1.6 million shares remain available for issuance under the 2021 Equity Incentive Plan, which allows for various forms of stock-based compensation[112]. Accounting Changes - The company adopted ASU 2016-03 on April 1, 2023, which did not have a material effect on its financial statements[89]. Depreciation and Amortization - Depreciation and amortization expense for the three months ended July 31, 2023, was $445,000, compared to $528,000 in the same period of 2022[103].

Financial Data and Key Metrics Changes - For fiscal year 2023, the company reported a loss from operations of $5.3 million compared to an income of $607,000 in the prior year, with non-cash expenses totaling $3.9 million [4] - Fourth quarter revenue increased to $13.1 million, a 2% increase from $12.9 million in the year-ago period, while adjusted loss was $920,000 compared to adjusted EBITDA of $445,000 in the previous year [5] - Gross margin for the fourth quarter was 45% and approximately 47% for the year, down from approximately 53% in the same period last year [7] Business Line Data and Key Metrics Changes - R&D expenses for the fourth quarter were approximately $2.9 million, up from $2.6 million in the year-ago period, and for the year, R&D expenses were $11.5 million compared to $9.3 million for fiscal 2022 [8] - Sales and marketing expenses increased to $1.8 million in the fourth quarter, up approximately $200,000 from the previous year, and for the year, expenses were $6.8 million compared to $6.2 million [9] - G&A expenses for the year were $8.1 million, an increase from $7.2 million in the prior year, primarily due to IT and professional fees [10] Market Data and Key Metrics Changes - The company achieved record annual revenue of approximately $54 million, representing a year-over-year growth of 10% [13] - Bookings rebounded in the second half of the year, reaching new highs, and the company anticipates continued strength in bookings for fiscal 2024 [14][60] Company Strategy and Development Direction - The company is focusing on its proprietary business, particularly the ex vivo platform, which is expected to drive revenue growth [40] - A new subsidiary, Corellia, has been established to focus on therapeutic discovery and development, leveraging the company's existing resources [61] - The company plans to automate its ex vivo platform and other lab functions to increase capacity and improve efficiencies [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that operational issues and external challenges impacted financial performance, but they are confident in returning to robust profitability in the second half of the fiscal year [44][15] - The company projects revenue growth for fiscal 2024 to be between 5% and 15%, with expectations of improved revenue conversion in the latter half of the year [14][45] Other Important Information - The company ended the year with $10.1 million in cash and no debt, with cash used in operating activities amounting to $700,000 for the quarter [11] - The company anticipates a decline in cash balance over the first half of the year but expects a rebound as revenue conversion improves [12] Q&A Session Summary Question: Customer landscape and investment willingness - Management noted an increase in customer willingness to adapt priorities based on budgetary feelings, contributing to cancellations, but they believe stabilization is occurring [18][19] Question: Internal operational issues - Management discussed management changes leading to operational issues, which have been addressed, and they are confident in returning to normalcy [22][23] Question: Update on Alloy Therapeutics partnership - The partnership is progressing well, focusing on building antibody drug conjugates, and the company is actively raising funds for this initiative [25] Question: Year-over-year bookings context - Bookings were reported to be up 15% year-over-year, but specific historical numbers were not disclosed [28][31] Question: AI's impact on the business - Management believes AI enhances the business by facilitating new hypotheses and discoveries, thus increasing the need for their services [34][35] Question: Core business and new initiatives balance - Management acknowledged the need to focus on core business while managing new initiatives separately to avoid spreading resources too thin [39][40]

Revenue and Growth - Oncology services revenue increased by 9.7% to $53.9 million for the year ended April 30, 2023, compared to $49.1 million in 2022[113]. - Total costs and operating expenses increased by 21.9% to $59.1 million in 2023, compared to $48.5 million in 2022[112]. - Sales and marketing expenses rose by 9.8% to $7.0 million in 2023, reflecting increased compensation and marketing initiatives[117]. - Research and development expenses increased by 23.2% to $11.5 million in 2023, compared to $9.4 million in 2022, driven by investments in new service capabilities[116]. Cost and Expenses - Cost of oncology services rose by 25.0% to $29.5 million in 2023, up from $23.6 million in 2022, primarily due to increased compensation and supply expenses[114]. - Gross margin decreased to 45% in 2023 from 52% in 2022, attributed to rising costs that did not support expected revenue growth[115]. - General and administrative expenses increased by 12.3% to $10.2 million in 2023, primarily due to higher non-cash depreciation and amortization expenses[118]. Financial Position - Net cash provided by operating activities was $4.0 million in 2023, down from $6.5 million in 2022, primarily due to the net loss in fiscal 2023[123]. - As of April 30, 2023, the company had an accumulated deficit of approximately $77.3 million and negative working capital of $2.3 million[121]. - The company recorded an asset impairment of $807,000 related to Lumin software development costs in fiscal 2023, with no impairment charges in 2022[119]. - The company recorded an asset impairment charge related to software development costs of $807,000 during fiscal 2023[136]. Tax and Regulatory Matters - As of April 30, 2023, the company established a full valuation allowance for all deferred tax assets[137]. - The company recognized a liability for uncertain tax positions related to foreign operations amounting to $181,000 as of April 30, 2023[138]. - The company is currently assessing the impact of ASU No. 2016-13 on its consolidated financial statements, effective May 1, 2023, but does not expect a material impact[139]. - The company has no off-balance sheet debt or similar obligations[140].

Champions Oncology, Inc. (NASDAQ:CSBR) Q3 2023 Earnings Conference Call March 15, 2023 4:30 PM ET Company Participants Ronnie Morris - CEO David Miller - CFO Conference Call Participants Matthew Hewitt - Craig-Hallum Operator Good day, everyone, and welcome to the Champions Oncology Third Quarter Fiscal Year 2023 Earnings Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Dr. Ronnie Morris, Chief Executive Officer of Champions Oncology. Sir, the floor is yours. Ronnie ...

Form 10-Q | --- | --- | |----------------------------------------------------------------------------|--------------------------------------------| | (Exact name of registrant as \nDelaware | defined in its charter) \n52-1401755 | | (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | | | | | One University Plaza, Suite 307 | 07601 | | Hackensack, New Jersey | (Zip Code) | (Address of principal executive of ices) Not Applicable (Former name, former address ...

Champions Oncology, Inc. (NASDAQ:CSBR) Q2 2023 Earnings Conference Call December 13, 2022 4:30 PM ET Company Participants Ronnie Morris - CEO David Miller - CFO Conference Call Participants Scott Henry - ROTH Capital Operator Good day, ladies and gentlemen, and welcome to the Champions Oncology Second Quarter Fiscal Year 2023 Earnings Call. At this time, all participants have been placed on a listen-only mode and the floor will be opened for you questions and comments after the presentation. It is now my pl ...