Champions Oncology(US:CSBR)2025-07-23 21:01PART I Business Champions Oncology is a research organization leveraging proprietary PDX models for drug discovery, offering research services, data licensing, and developing novel therapeutics - The company's business is centered around a proprietary bank of approximately 1,500 Patient Derived Xenograft (PDX) models, which are used in its pharmacology, biomarker, and data platforms17 - The company's ecosystem consists of three primary business lines: research services for biopharma, sales of PDX model data and SaaS tools, and the discovery of novel oncology therapeutics19 Fiscal Year 2025 Revenue | Metric | Value | Year-over-Year Change | | :--- | :--- | :--- | | Total Revenue | $56.9 million | ~14% increase | - The company's growth strategy focuses on expanding its TumorBank, adding new experimental technologies, and leveraging its computational power and unique Datacenter for drug discovery3334 - As of July 15, 2025, the company had 213 full-time employees, with 159 engaged in research and development and laboratory operations42 Risk Factors The company faces risks including historical losses, capital needs, intense competition, intellectual property vulnerabilities, concentrated ownership, and geopolitical instability - The company has a history of losses, with an accumulated deficit of approximately $79.9 million as of April 30, 2025, despite achieving a net income of $4.7 million in FY2025, sustained profitability is not guaranteed49 - The company's core TumorGraft Technology Platform is proprietary but not patented, creating a risk that competitors could develop similar procedures64 - The company faces intense competition in research services, SaaS, and drug development from larger entities with substantially greater capital resources and experience353762 - A significant concentration of ownership exists, with officers, directors, and three major stockholders controlling approximately 72% of the outstanding common stock, potentially limiting other shareholders' influence87 - Geopolitical risks are present as the company's CEO resides in Israel and several customers are based there, making leadership continuity and business operations susceptible to regional instability96 Unresolved Staff Comments The company reports no unresolved staff comments - None100 Cybersecurity The company maintains a cybersecurity program with board oversight, reporting no material threats or incidents to date - The company has implemented a cybersecurity program involving ongoing monitoring, employee training, and consultation with external experts to manage risks101 - Oversight is provided by the Board of Directors' Audit Committee, with the senior leadership team responsible for managing and reporting on cybersecurity threats102 - As of the report date, no known cybersecurity threats have materially affected the company's business, operations, or financial condition103 Properties The company leases all its office and laboratory facilities across key locations in New Jersey, Maryland, and Italy Leased Facilities and Rent Expense (FY2025) | Location | Purpose | Lease Expiration | FY2025 Rent Expense | | :--- | :--- | :--- | :--- | | Hackensack, NJ | Corporate HQ | Nov 2026 | $75,000 | | Rockville, MD | Lab & Office | Feb 2029 | $1.7 million | | Milan, Italy | Lab & Office | Oct 2028 | $50,000 | - Total rent expense was consistent at $1.8 million for both fiscal years 2025 and 2024104 Legal Proceedings Management is unaware of any pending or contemplated litigation against the company or its officers and directors - To the knowledge of management, there is no pending or contemplated litigation against the company107 Mine Safety Disclosures This item is not applicable to the company - Not applicable108 PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on Nasdaq, experiencing volatility, with no dividends paid and a limited share repurchase program - The company's common stock (CSBR) is listed on the Nasdaq Capital Market110 Quarterly Stock Price Range (Fiscal Year 2025) | Quarter | High | Low | | :--- | :--- | :--- | | First | $5.44 | $4.50 | | Second | $5.45 | $3.60 | | Third | $11.99 | $3.79 | | Fourth | $11.98 | $7.01 | - The company has a share repurchase program with approximately $4.3 million remaining authorized as of April 30, 2025, with no shares repurchased in fiscal year 2025115116 - No dividends have been declared or paid, and none are anticipated in the foreseeable future113 Management's Discussion and Analysis of Financial Condition and Results of Operations The company achieved a financial turnaround in FY2025 with net income and strong revenue growth, driven by improved operational efficiency and positive cash flow from operations Results of Operations FY2025 saw revenue growth and reduced operating expenses, shifting from an operating loss to a $4.6 million operating income Summary of Operations (in thousands) | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Oncology Revenue | $56,944 | $50,155 | 13.5% | | Cost of Oncology Revenue | $28,389 | $29,401 | (3.4)% | | Research and Development | $6,825 | $9,544 | (28.5)% | | Sales and Marketing | $7,545 | $7,064 | 6.8% | | General and Administrative | $9,339 | $11,067 | (15.6)% | | Income (Loss) from Operations | $4,553 | ($7,356) | (161.9)% | Revenue Breakdown (in thousands) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Pharmacology services | $48,585 | $47,035 | | TOS data license revenue | $4,676 | $0 | | Other TOS revenue | $3,683 | $3,102 | | Personalized oncology services | $0 | $18 | | Total oncology revenue | $56,944 | $50,155 | - The decrease in R&D expense was primarily due to a reduction in investment in developmental programs, including its subsidiary Corellia136 - The decrease in G&A expense was mainly due to lower compensation expenses and professional fees138 Liquidity and Capital Resources The company significantly improved its cash position and operating cash flow in FY2025, expecting sufficient liquidity through August 2026 Key Liquidity Metrics (as of April 30, 2025) | Metric | Value | | :--- | :--- | | Cash | $9.8 million | | Accumulated Deficit | ($79.9 million) | | Working Capital | ($1.5 million) | Cash Flow Summary (in thousands) | Cash Flow Source | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Operating Activities | $7,386 | ($6,137) | | Investing Activities | ($389) | ($836) | | Financing Activities | $170 | ($527) | - Management asserts that current cash and expected cash flows from operations are adequate to fund the company through at least August 2026143 Critical Accounting Policies Critical accounting policies involve significant judgments in revenue recognition for services and data licenses, and stock-based compensation valuation - Revenue from service contracts is primarily recognized over time, while revenue from data licenses is recognized at a point in time upon delivery241242 - The company uses the Black-Scholes option pricing model to determine the fair value of stock-based awards, requiring management judgment for key assumptions154227 Quantitative and Qualitative Disclosures About Market Risk This item is not applicable to the company - Not applicable160 Financial Statements and Supplementary Data This section presents the company's audited consolidated financial statements, including the independent auditor's report and notes - The independent auditor, EisnerAmper LLP, issued an opinion that the financial statements present fairly, in all material respects, the consolidated financial position of the company185 - A critical audit matter was identified concerning revenue recognition for a new, first-time data license contract for $4.5 million, due to the complexity of the agreement and the application of accounting guidance190191 Consolidated Balance Sheet Highlights (in thousands) | Account | April 30, 2025 | April 30, 2024 | | :--- | :--- | :--- | | Cash | $9,785 | $2,618 | | Total Current Assets | $22,369 | $13,639 | | Total Assets | $32,344 | $26,132 | | Total Current Liabilities | $23,853 | $21,541 | | Total Liabilities | $28,572 | $28,035 | | Total Stockholders' Equity (Deficiency) | $3,772 | ($1,903) | Consolidated Statement of Operations Highlights (in thousands) | Account | Year Ended April 30, 2025 | Year Ended April 30, 2024 | | :--- | :--- | :--- | | Oncology Revenue | $56,944 | $50,155 | | Total Costs and Operating Expenses | $52,391 | $57,511 | | Income (Loss) from Operations | $4,553 | ($7,356) | | Net Income (Loss) | $4,701 | ($7,276) | | Diluted EPS | $0.33 | ($0.54) | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None162 Controls and Procedures Management concluded that disclosure controls and internal control over financial reporting were effective as of April 30, 2025 - Management concluded that the company's disclosure controls and procedures were effective as of April 30, 2025164 - Management concluded that the company's internal control over financial reporting was effective as of April 30, 2025167 - No material changes were made to internal controls over financial reporting during the quarter ended April 30, 2025168 Other Information The company reports no other information - None169 PART III Directors, Executive Officers and Corporate Governance Information for this item is incorporated by reference from the 2025 Proxy Statement - Information is incorporated by reference from the forthcoming 2025 Proxy Statement172 Executive Compensation Information for this item is incorporated by reference from the 2025 Proxy Statement - Information is incorporated by reference from the forthcoming 2025 Proxy Statement173 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information for this item is incorporated by reference from the 2025 Proxy Statement - Information is incorporated by reference from the forthcoming 2025 Proxy Statement174 Certain Relationships and Related Transactions, and Director Independence Information for this item is incorporated by reference from the 2025 Proxy Statement - Information is incorporated by reference from the forthcoming 2025 Proxy Statement175 Principal Accounting Fees and Services Information for this item is incorporated by reference from the 2025 Proxy Statement - Information is incorporated by reference from the forthcoming 2025 Proxy Statement176 PART IV Exhibits and Financial Statement Schedules This section lists all documents filed as part of the Annual Report, including financial statements and required exhibits - This item includes the consolidated financial statements and a list of all exhibits filed with the report178180