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What changed in CHAMPIONS ONCOLOGY, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CHAMPIONS ONCOLOGY, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+118 added−103 removedSource: 10-K (2024-07-19) vs 10-K (2023-07-24)

Top changes in CHAMPIONS ONCOLOGY, INC.'s 2024 10-K

118 paragraphs added · 103 removed · 92 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeGovernment Regulation The research, development, and marketing of our products, the performance of our legacy POS testing services, and the operation of our facilities are generally subject to federal, state, local, or foreign legislation, including licensure of our laboratory located in Rockville, Maryland by the State of Maryland and compliance with federal, state, local or foreign legislation applicable to the use of live animals in scientific testing, research and education. 5 The FDA has claimed regulatory authority over laboratory developed tests such as our legacy POS products, but has generally not exercised it.
Biggest changeGovernment Regulation The research, development, and marketing of our products, the performance of our legacy Personalized Oncology Solutions ("POS") testing services, and the operation of our facilities are generally subject to federal, state, local, or foreign legislation, 5 including licensure of our laboratory located in Rockville, Maryland by the State of Maryland and compliance with federal, state, local or foreign legislation applicable to the use of live animals in scientific testing, research and education.
While there are a minimal number of software solutions that offer the degree of analytics available within Lumin Bioinformatics, the know-how and workflows of these analytics are well established in bioinformatics labs across academia and the biopharmaceutical industry. As a result, the barrier to entry for developing a SaaS tool leveraging these analytics is relatively low.
While there are a minimal number of software solutions that offer the degree of analytics available within Lumin, the know-how and workflows of these analytics are well established in bioinformatics labs across academia and the biopharmaceutical industry. As a result, the barrier to entry for developing a SaaS tool leveraging these analytics is relatively low.
Through our website, we make available, free of charge, access to all reports filed with the United States Securities and Exchange Commission, or SEC, including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, our Proxy Statements on Schedules 14A and amendments to those reports, as filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Through our website, we make available, free of charge, access to all reports filed with the United States Securities and Exchange Commission, (the "SEC"), including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, our Proxy Statements on Schedules 14A and amendments to those reports, as filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Our goal is to leverage our unique Datacenter to establish elegant ways to better understand the molecular dynamics of cancer, and the development novel therapeutics. 4 Competition Champions currently competes in three different markets: Research Services : Pharmaceutical companies rely on outsourcing preclinical studies to Clinical Research Organizations ("CROs").
Our goal is to leverage our 4 unique Datacenter to establish elegant ways to better understand the molecular dynamics of cancer, and the development of novel therapeutics. Competition Champions currently competes in three different markets: Research Services : Pharmaceutical companies rely on outsourcing preclinical studies to Clinical Research Organizations.
We continue to find ways to differentiate our dataset, however there can be no assurance that developments by other companies or academic institutions in data curation will not render our Datacenter obsolete or non-competitive. The second component of Lumin Bioinformatics is the data analytics.
We continue to find ways to differentiate our dataset, however there can be no assurance that developments by other companies or academic institutions in data curation will not render our Datacenter obsolete or non-competitive. The second component of Lumin is the data analytics.
These companies, as well as academic institutions, governmental agencies, and private research organizations also compete with us in recruiting and retaining highly qualified scientific, technical and professional personnel and consultants. SaaS: There are two important components of Lumin Bioinformatics: the Datacenter and the Analytics.
These companies, as well as academic institutions, governmental agencies, and private research organizations also compete with us in recruiting and retaining highly qualified scientific, technical and professional personnel and consultants. SaaS : There are two important components of Lumin: the Datacenter and the Analytics.
Item 1. Business Overview We are a technology-enabled research organization engaged in creating transformative technology solutions to be utilized in drug discovery and development. Our research center operates in both regulatory and non-regulatory environments and consists of a comprehensive set of computational and experimental research platforms.
Item 1. Business Overview We are a technology-enabled research organization engaged in creating technology solutions to be utilized in drug discovery and development. Our research center operates in both regulatory and non-regulatory environments and consists of a comprehensive set of computational and experimental research platforms.
The PDX bank is highly characterized at the molecular, phenotypic and pharmacological levels, which provides a differentiated layer of data for our large oncology dataset (the “Datacenter”). The Datacenter combines our proprietary dataset with other large publicly available datasets.
The PDX bank is highly characterized at the molecular, phenotypic and pharmacological levels, which provides a differentiated layer of data for our large oncology dataset (the "Datacenter"). The Datacenter combines our proprietary dataset with other large publicly available datasets.
We regularly evaluate strategic options to create additional value from our drug discovery business, which may include, but are not limited to, potential spin-out transactions or capital raises. Our sales and marketing efforts are dependent on a dedicated sales force of approximately 31 professionals that sell our services directly to pharmaceutical and biotechnology companies.
We regularly evaluate strategic options to create additional value from our drug discovery business, which may include, but are not limited to, potential spin-out transactions or capital raises. Our sales and marketing efforts are dependent on a dedicated sales force of approximately 27 professionals that sell our services directly to pharmaceutical and biotechnology companies.
Company History We were incorporated as a merger and acquisition company under the laws of the State of Delaware on June 4, 1985, under the name “International Group, Inc.” In September 1985, the Company completed a public offering and shortly thereafter acquired the world-wide rights to the Champions sports theme restaurant concept and changed its name to “Champions Sports, Inc.” In 1997, the Company sold its Champions service mark and concept to Marriott International, Inc. and until 2005, was a consultant to Marriott International, Inc. and operated one Champions Sports Bar Restaurant.
Company History We were incorporated as a merger and acquisition company under the laws of the State of Delaware on June 4, 1985, under the name “International Group, Inc.” In September 1985, the Company completed a public offering and shortly thereafter acquired the worldwide rights to the Champions sports theme restaurant concept and changed its name to “Champions Sports, Inc.” In 1997, the Company sold its Champions service mark and concept to Marriott International, Inc. and until 2005, was a consultant to Marriott International, Inc. and operated one Champions Sports Bar Restaurant.
One unique feature of this proprietary dataset is the fact that it is derived from a living TumorBank. This allows us to continue characterizing the TumorBank over time, and increasing the depth of characterization of the accumulated data. The combination of the breadth and depth of the TumorBank, and associated characterization, drives the value of our Datacenter.
One unique feature of this proprietary dataset is the fact that it is derived from a living TumorBank. This allows us to continue characterizing the TumorBank over time and increase the depth of characterization of the accumulated data. The combination of the breadth and depth of the TumorBank, and associated characterization, drives the value of our Datacenter.
Our strategy for growth has multiple components: • Growing our TumorBank: We grow our TumorBank in two ways. First, leverage a medical affairs team that works with a well established clinical network to facilitate access to patients diagnosed with prioritized tumors subtypes.
Our strategy for growth has multiple components: • Growing our TumorBank: We grow our TumorBank in two ways. First, we leverage a medical affairs team that works with a well-established clinical network to facilitate access to patients diagnosed with prioritized tumor subtypes.
Drug Discovery and Developmen t: Our Drug Discovery and Development business places us in a good position of also competing against the same customers of our Research Services and/or SaaS businesses: the global biopharmaceutical industry. The global oncology drug market is estimated to be as high as $188B in 2023.
Drug Discovery and Developmen t: Our Drug Discovery and Development business places us in a good position of also competing against the same customers of our Research Services and/or SaaS businesses: the global biopharmaceutical industry. The global oncology drug market is estimated to be as high as $223 billion in 2023.
These companies, as well as academic institutions, governmental agencies, and private research organizations also compete with us in recruiting and retaining highly qualified scientific, technical and professional personnel and consultants. Research and Development For the years ended April 30, 2023 and 2022, we spent approximately $11.5 million and $9.4 million, respectively, to further develop our platforms.
These companies, as well as academic institutions, governmental agencies, and private research organizations also compete with us in recruiting and retaining highly qualified scientific, technical and professional personnel and consultants. Research and Development For the fiscal years ended April 30, 2024 and 2023, we spent approximately $9.5 million and $11.5 million, respectively, to further develop our platforms.
Through our technology platforms, we have designed an ecosystem of business lines consisting of: • The sale of research services utilizing our innovative research platforms to biopharmaceutical companies • The sale of oncology research Software as a Service ("SaaS") tools to cancer research scientists • The discovery and development of novel oncology therapeutics 2 Translational Oncology Solutions (TOS) Business Research Services Our research services utilize our research center to assist pharmaceutical and biotechnology companies with their drug development process.
Through our technology platforms, we have designed an ecosystem of business lines consisting of: • The sale of research services utilizing our innovative research platforms to biopharmaceutical companies • The sale of oncology research SaaS tools to cancer research scientists • The discovery and development of novel oncology therapeutics 2 Translational Oncology Solutions (TOS) Business Research Services Our research services utilize our research center to assist pharmaceutical and biotechnology companies with their drug development process.
Revenue from this business has grown at an average annual growth rate of 23% since 2018 and represents the primary source of our current revenue stream.
Revenue from this business has grown at an average annual growth rate of 13% since 2019 and represents the primary source of our current revenue stream.
Software As A Service (SaaS) Business Our SaaS business, launched in fiscal year 2021, is centered around our proprietary software platform and data tool, Lumin Bioinformatics ("Lumin”), which contains comprehensive information derived from our research services and clinical studies and is sold to customers on an annual subscriptions basis.
Software As A Service (SaaS) Business Our SaaS business, launched during the fiscal year ended April 30, 2021, is centered around our proprietary software platform and data tool, Lumin Bioinformatics ("Lumin"), which contains comprehensive information derived from our research services and clinical studies and is sold to customers on an annual subscription basis.
Our software development teams consist of bioinformatics scientists, mathematicians as well as software engineers. Lumin leverages Champions’ large Datacenter coupled with analytics and artificial intelligence to provide a robust tool for computational cancer research. It is the combination of the Datacenter and the analytics that create the foundation for Lumin.
The software was developed by a team that consisted of bioinformatics scientists and mathematicians as well as software engineers. Lumin leverages Champions’ large Datacenter coupled with analytics and artificial intelligence to provide a robust tool for computational cancer research. It is the combination of the Datacenter and the analytics that create the foundation for Lumin.
For the year ended April 30, 2023, revenues from our products and services totaled approximately $53.8 million, an increase of approximately 10% from the previous year. Our Current Strategy Our strategy is to use our various platform technologies to drive multiple synergistic revenue streams. We continue to build upon this with investments in research and development.
For the fiscal year ended April 30, 2024, revenues from our products and services totaled approximately $50.1 million, a decrease of approximately 7% from the previous year. Our Current Strategy Our strategy is to use our various platform technologies to drive multiple synergistic revenue streams. We continue to build upon this with investments in research and development.
Human Capital Resources As of July 15, 2023, we had 230 full-time employees, including 73 with doctoral or other advanced degrees. Of our workforce, 176 employees are engaged in research and development and laboratory operations, 31 employees are engaged in sales and marketing, and 23 employees are engaged in finance and administration.
Human Capital Resources As of July 15, 2024, we had 210 full-time employees, including 96 with doctoral or other advanced degrees. Of our workforce, 160 employees are engaged in research and development and laboratory operations, 30 employees are engaged in sales and marketing, and 20 employees are engaged in finance and administration.
We then employ the use of our proprietary experimental platforms to rapidly validate these targets for further drug development efforts. Our efforts center around three areas of focus: 1. Targeted therapy with drug conjugates 2. Immune oncology 3.
Our discovery strategy utilizes our Datacenter, coupled with artificial intelligence and other advanced computational analytics, to identify novel therapeutic targets. We then employ the use of our proprietary experimental platforms to rapidly validate these targets for further drug development efforts. Our efforts center around three areas of focus: 1. Targeted therapy with drug conjugates 2. Immune oncology 3.
The FDA has announced regulatory and guidance initiatives that could increase federal regulation of our business. We are subject to federal and international regulations with regard to shipment of hazardous materials, including the Department of Transportation and the International Air Transit Authority. These regulations require interstate, intrastate, and foreign shipments comply with applicable labeling, documentation, and training requirements.
We are subject to federal and international regulations with regard to shipment of hazardous materials, including those issued by the Department of Transportation and the International Air Transit Authority. These regulations require interstate, intrastate, and foreign shipments to comply with applicable labeling, documentation, and training requirements.
Insights developed using Lumin can provide the basis for biomarker hypotheses, reveal potential mechanisms of therapeutic resistance, and guide the direction of additional preclinical evaluations. See Note 4 to the consolidated financial statements for further discussion as to impairment of Lumin assets in fiscal 2023.
Insights developed using Lumin can provide the basis for biomarker hypotheses, reveal potential mechanisms of therapeutic resistance, and guide the direction of additional preclinical evaluations. During the fiscal year ended April 30, 2023, we recorded an impairment charge for the capitalized software development costs of Lumin related to return on investment guidelines.
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Drug Discovery and Development Business Our nascent drug discovery and development business leverages the computational and experimental capabilities within our platforms. Our discovery strategy utilizes our Datacenter, coupled with artificial intelligence and other advanced computational analytics, to identify novel therapeutic targets.
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However, we continue to maintain the Lumin platform and sell subscriptions as part of our product offerings as the Lumin data is an integral part of the Company’s long term strategy and value proposition. Drug Discovery and Development Business Our nascent drug discovery and development business leverages the computational and experimental capabilities within our platforms.
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The U.S. Food and Drug Administration (the "FDA") has claimed regulatory authority over laboratory developed tests such as our legacy POS products, but has generally not exercised it. The FDA has announced regulatory and guidance initiatives that could increase federal regulation of our business.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeImpacts of such conditions could be passed on to our business in the form of a reduced customer base and/or potential for new bookings due to possible reductions in pharmaceutical and biotech industry-wide spend on research and development and/or economic pressure on our suppliers to pass on increased costs. Item 1B. Unresolved Staff Comments None.
Biggest changeImpacts of such conditions could be passed on to our business in the form of a reduced customer base and/or potential for new bookings due to possible reductions in pharmaceutical and biotech industry-wide spend on research and development and/or economic pressure on our suppliers to pass on increased costs. 13 Our Chief Executive Officer resides in Israel and we have several customers with their operations located in Israel, and, therefore, our leadership continuity and results may be adversely affected by political, economic, and military instability in Israel.
These provisions include: • requirements that our stockholders comply with advance notice procedures in order to nominate candidates for election to our board of directors or to place stockholders’ proposals on the agenda for consideration at meetings of stockholders; and • in connection with private placements of our stock in 2011, 2013 and 2015, we covenanted that we would not merge or consolidate with another company unless either the transaction and the trading volume of our stock met certain thresholds and qualifications or we obtained the consent of certain of the investors who purchased our stock in those private placements.
These provisions include: • requirements that our stockholders comply with advance notice procedures in order to nominate candidates for election to our Board of Directors or to place stockholders’ proposals on the agenda for consideration at meetings of stockholders; and • in connection with private placements of our stock in 2011, 2013 and 2015, we covenanted that we would not merge or consolidate with another company unless either the transaction and the trading volume of our stock met certain thresholds 11 and qualifications or we obtained the consent of certain of the investors who purchased our stock in those private placements.
Our information technology systems, some of which are dependent on services provided by third parties, may be vulnerable to damage, interruption, or shutdown due to any number of causes outside of our control such as catastrophic events, natural disasters, fires, power outages, systems failures, telecommunications failures, employee error or malfeasance, security breaches, computer viruses or other malicious codes, ransomware, unauthorized access attempts, denial of service attacks, phishing, hacking, and other cyberattacks.
Our information technology systems, some of which are dependent on services provided by third parties, may be vulnerable to damage, interruption, or shutdown due to any number of causes outside of our control such as catastrophic events, natural disasters, fires, power outages, systems failures, telecommunications failures, employee error or malfeasance, security breaches, computer viruses or other malicious codes, ransomware, unauthorized access attempts, denial of service attacks, 12 phishing, hacking, and other cyberattacks.
Under Section 382 of the Internal Revenue Code of 1986, as amended, referred to as the Internal Revenue Code, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period), the corporation’s ability to use its pre-change net operating loss carry-forwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited.
Under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period), the corporation’s ability to use its pre-change net operating loss carry-forwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited.
Implementation of our business strategies will depend in large part on our ability to (i) attract and maintain a significant number of customers; (ii) effectively provide acceptable services to our customers; (iii) develop and license new products and technologies; (iv) maintain appropriate internal procedures, policies, and systems; (v) hire, train, and retain skilled employees and management; (vi) continue to operate despite increasing competition in our industry; and (vii) establish, develop and maintain our name recognition.
Implementation of our business strategies will depend in large part on our ability to (i) attract and maintain a significant number of customers; (ii) effectively provide acceptable services to our customers; (iii) develop and license new products and technologies; (iv) maintain appropriate internal procedures, policies, and systems; (v) hire, train, and retain skilled employees and management; (vi) continue to operate despite increasing competition in our industry; and (vii) establish, develop and 7 maintain our name recognition.
Furthermore, like many stocks quoted on the Nasdaq Capital Market, trading in our common stock is thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance.
Furthermore, like many stocks quoted on the Nasdaq Capital Market, trading in our common stock is thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do 10 with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance.
If any of these events happened, they could hurt our business and financial results. 7 If our laboratory facilities are damaged or destroyed, or we have a dispute with one of our landlords, our business would be negatively affected. We currently utilize several office suites where our laboratories are located within one facility in Rockville, Maryland.
If any of these events happened, they could hurt our business and financial results. If our laboratory facilities are damaged or destroyed, or we have a dispute with one of our landlords, our business would be negatively affected. We currently utilize several office suites where our laboratories are located within one facility in Rockville, Maryland.
If one or more of our competitors succeeds in developing similar technologies and products that are more effective or successful than any of those that we currently sell or will develop, our results of operations will be significantly adversely affected. If we are unable to protect our intellectual property, we may not be able to compete as effectively.
If one or 8 more of our competitors succeeds in developing similar technologies and products that are more effective or successful than any of those that we currently sell or will develop, our results of operations will be significantly adversely affected. If we are unable to protect our intellectual property, we may not be able to compete as effectively.
In addition, courts 8 outside the United States are sometimes less willing to protect trade secrets. Finally, our competitors may independently develop equivalent knowledge, methods and know-how. If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
In addition, courts outside the United States are sometimes less willing to protect trade secrets. Finally, our competitors may independently develop equivalent knowledge, methods and know-how. If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
In addition, there is a risk of business interruption, 12 violation of data privacy laws and regulations, litigation, and reputational damage from leakage of confidential information. Any interruption of our information technology systems could have operational, reputational, legal, and financial impacts that may have a material adverse effect on our business.
In addition, there is a risk of business interruption, violation of data privacy laws and regulations, litigation, and reputational damage from leakage of confidential information. Any interruption of our information technology systems could have operational, reputational, legal, and financial impacts that may have a material adverse effect on our business.
Drug development programs, particularly those in early stages of development, may never be commercialized. 9 Our future success depends, in part, on our ability to select successful product candidates, complete preclinical development of these product candidates and advance them to and through clinical trials.
Drug development programs, particularly those in early stages of development, may never be commercialized. Our future success depends, in part, on our ability to select successful product candidates, complete preclinical development of these product candidates and advance them to and through clinical trials.
Certain provisions of our certificate of incorporation and bylaws, and our contractual agreements could make it difficult for or prevent a third party from acquiring control of us or changing our board of directors and management.
Certain provisions of our certificate of incorporation and bylaws, and our contractual agreements could make it difficult for or prevent a third party from acquiring control of us or changing our board of directors (the "Board" or Board of Directors") and management.
However, as of the date of this Annual Report on Form 10-K, we have not experienced a material adverse effect on our business nor the need for reduction in our work force; and, currently, we do not expect any material impact on our long-term activity.
However, as of the date of this Annual Report, we have not experienced a material adverse effect on our business nor the need for reduction in our work force; and, currently, we do not expect any material impact on our long-term activity.
If we are unsuccessful in advancing our research and development programs into clinical testing or in obtaining regulatory approval, our long-term business prospects will be harmed. Impairment of goodwill or other long term assets may adversely impact future results of operations We have intangible assets, including goodwill and capitalized software development costs, on our balance sheet.
If we are unsuccessful in advancing our research and development programs into clinical testing or in obtaining regulatory approval, our long-term business prospects will be harmed. Impairment of goodwill or other long-term assets may adversely impact future results of operations. We have intangible assets and goodwill on our balance sheet.
Currently, the Company derives revenue primarily from research services, while pursuing efforts to further develop its drug discovery business units. To become sustainably profitable, we will need to generate revenues to offset our operating costs, including our research and development and general and administrative expenses. We may not achieve or sustain our revenue or profit objectives.
Currently, we derive revenue primarily from research services, while pursuing efforts to further develop our drug discovery business units. To become sustainably profitable, we will need to generate revenues to offset our operating costs, including our research and development and general and administrative expenses. We may not achieve or sustain our revenue or profit objectives.
These conditions include but are not limited to inflation, rising interest rates, availability of capital markets, energy availability and costs (including fuel surcharges), the negative impacts caused by pandemics and public health crises (such as the COVID-19 pandemic), negative impacts resulting from the military conflict between Russia and the Ukraine, and the effects of governmental initiatives to manage economic conditions.
These conditions include but are not limited to inflation, rising interest rates, availability of capital markets, energy availability and costs (including fuel surcharges), the negative impacts caused by pandemics and public health crises (such as the COVID-19 pandemic), negative impacts resulting from the military conflicts between Russia and the Ukraine and/or in the Middle East, and the effects of governmental initiatives to manage economic conditions.
Although, to date, these restrictions have not materially impacted our operations, the effect on our business, from the spread of COVID-19 and the actions implemented by the governments of the United States and elsewhere across the globe, may, once again, worsen over time and we are unable to predict the potential impact on our business.
Although, to date, these restrictions have not materially impacted our operations, the effect on our business, from the spread of COVID-19 or any new and similar viral crisis and the actions implemented by the governments of the United States and elsewhere across the globe implemeted to deal with such, may, once again, worsen over time and we are unable to predict the potential impact on our business.
There are many factors that could result in the change of our customers development plans for specific drugs, including without limitation to their research and development budgets and drug development strategies. These changes could lead to the cancellation or modification of on-going or planned studies. This would have a negative impact on the Company’s revenue growth and profit margin.
There are many factors that could result in the change of our customers development plans for specific drugs, including without limitation to their research and development budgets and drug development strategies. These changes could lead to the cancellation or modification of on-going or planned studies.
We believe that our cash on hand, together with expected cash flows from operations, are adequate to fund our operations through at least August 2024. 6 The amount of our income or losses and liquidity requirements may vary significantly from year-to-year and quarter-to-quarter and will depend on, among other factors: • the cost of continuing to build out our TumorGraft bank; • the cost and rate of progress toward growing our technology platforms; • the cost and rate of progress toward building our business units; • the cost of increasing our research and development; • the cost of renting our laboratory and animal testing facilities and payment for associated services; • the timing and cost of obtaining and maintaining any necessary regulatory approvals; • the cost of expanding and building out our infrastructure; and • the cost incurred in hiring and maintaining qualified personnel.
The amount of our income or losses and liquidity requirements may vary significantly from year-to-year and quarter-to-quarter and will depend on, among other factors: • the cost of continuing to build out our TumorGraft bank; • the cost and rate of progress toward growing our technology platforms; • the cost and rate of progress toward building our business units; • the cost of increasing our research and development; • the cost of renting our laboratory and animal testing facilities and payment for associated services; • the timing and cost of obtaining and maintaining any necessary regulatory approvals; • the cost of expanding and building out our infrastructure; and • the cost incurred in hiring and maintaining qualified personnel.
More recently, many of the restrictions and travel bans have been eased or lifted completely as global society as a whole works to return to pre-pandemic business and personal practices.
The restrictions and travel bans have been eased or lifted completely as global society as a whole returned to pre-pandemic business and personal practices.
As of July 18, 2023, we had 13,544,228 shares of common stock issued and 13,459,539 outstanding. The future issuance of all or part of the remaining authorized common stock would result in substantial dilution in the percentage of the common stock held by existing shareholders.
As of July 18, 2024, we had 13,714,099 shares of common stock issued and 13,593,766 outstanding. The future issuance of all or part of the remaining authorized common stock would result in substantial dilution in the percentage of the common stock held by existing shareholders.
Our management and four significant stockholders collectively own a substantial majority of our common stock. 11 Collectively, our officers, our directors and three significant stockholders own or exercise voting and investment control of approximately 71% of our outstanding common stock as of July 18, 2023.
Collectively, our officers, our directors and three significant stockholders own or exercise voting and investment control of approximately 71% of our outstanding common stock as of July 18, 2024.
We face competition in the life science market for computational software and for bioinformatics products. The market for our computational software platform for the life science market is competitive. We currently face competition from other scientific software providers, larger technology and solutions companies, in-house development by our customers and academic and government institutions, and the open-source community.
We currently face competition from other scientific software providers, larger technology and solutions companies, in-house development by our customers and academic and government institutions, and the open-source community.
Sale of additional equity and/or convertible debt securities at prices below certain levels will trigger anti-dilution provisions with respect to certain securities we have previously sold.
To the extent that we raise additional funds by issuing equity securities or convertible debt securities in the future, our stockholders may experience significant dilution. Sale of additional equity and/or convertible debt securities at prices below certain levels will trigger anti-dilution provisions with respect to certain securities we have previously sold.
The issuance of common stock for future services, acquisitions, or other corporate actions may have the effect of diluting the value of the shares held by existing shareholders, and might have an adverse effect on any market for our common stock. 10 To the extent that we raise additional funds by issuing equity securities or convertible debt securities in the future, our stockholders may experience significant dilution.
The issuance of common stock for future services, acquisitions, or other corporate actions may have the effect of diluting the value of the shares held by existing shareholders, and might have an adverse effect on any market for our common stock.
The statutes have the effect of making it more difficult to effect a change in control of a Delaware company.
The statutes have the effect of making it more difficult to effect a change in control of a Delaware company. Our management and four significant stockholders collectively own a substantial majority of our common stock.
We historically incurred losses from operating activities, may require significant capital and may never achieve sustained profitability. For the years ended April 30, 2023 and 2022, the Company had a net loss of approximately $5.3 million and net income of $548,000, respectively.
We historically incurred losses from operating activities, may require significant capital and may never achieve sustained profitability.
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As of April 30, 2023, the Company has an accumulated deficit of approximately $77.3 million, negative working capital of $2.3 million, and a cash balance of $10.1 million. The Company also had cash provided by operations of approximately $4.0 million for the twelve months ending April 30, 2023.
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These conditions raise a substantial doubt about our ability to continue as a going concern. 6 For the fiscal year ended April 30, 2024, the Company had a net loss of approximately $7.3 million and used cash flows in operations of approximately $6.1 million. These conditions raise substantial doubt about our ability to continue as a going concern.
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During 2023, we recorded an asset impairment charge related to software development costs of $807,000, reducing the net book value to zero.
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The accompanying financial statements do not include any adjustments that might result from these uncertainties. In its report dated July 19, 2024, EisnerAmper LLP, our independent registered public accounting firm, expressed substantial doubt about our ability to continue as a going concern as we have suffered recurring losses from operations and have insufficient liquidity to fund our future operations.
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If we are unable to improve our liquidity position, we may not be able to continue as a going concern.
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The accompanying consolidated financial statements do not include any adjustments that might result if we are unable to continue as a going concern and, therefore, be required to realize our assets and discharge our liabilities other than in the normal course of business which could cause investors to suffer the loss of all or a substantial portion of their investment.
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As of April 30, 2024, we had cash on hand of $2.6 million. Based on our available cash at April 30, 2024, in order to continue to fund our operations we may need to raise additional equity or debt capital in the near term and cannot provide any assurance that we will be successful in doing so.
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If we are unable to obtain additional financing in the near future, we may be required to pursue a reorganization proceeding, including under applicable bankruptcy or insolvency laws. Holders of our common shares will likely not receive any value or payments in a restructuring or similar scenario.
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In the event we pursue bankruptcy protection, we will be subject to the risks and uncertainties associated with such proceedings. There can be no guarantees that if we seek bankruptcy protection, we will emerge from bankruptcy protection as a going concern or that holders of our common shares will receive any recovery from any bankruptcy proceedings.
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This would have a negative impact on the Company’s revenue growth and profit margin. 9 We face competition in the life science market for computational software and for bioinformatics products. The market for our computational software platform for the life science market is competitive.
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One of our wholly owned subsidiaries is based in Israel. While we do not have a physical facility located in Israel, our Chief Executive Officer resides there and we have several customers whose operations are based there. Accordingly, political, economic, and military conditions in Israel may directly affect our business.
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Since the establishment of the modern State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our business, results of operations, and leadership continuity.
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Any armed conflicts, war, terrorist activities, or political instability in the region and the consequences thereof, such as our customers' ability to conduct operations and pay their suppliers of goods and services (such as our company), could adversely affect business conditions and could harm our results of operations.
Added
It is currently not possible to predict the duration or severity of the ongoing war or its effects on our business, operations, and financial conditions. The ongoing war is rapidly evolving and developing, and could disrupt our customers' business and operations.
Added
While we have not experienced any disruptions that have materially impacted our business or results of operations, there can be no assurances that further unforeseen events will not have a material adverse effect on us or our operations in the future. Item 1B. Unresolved Staff Comments None.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe lease expires October 31, 2028. The Company recognized $98,000 and $81,000 of rental costs relative to these leases for fiscal 2023 and 2022, respectively. Item 3. Legal Proceedings None. Item 4. Mine Safety Disclosures Not applicable. PART II
Biggest changeThe Company consolidated its lab and office space leases at this location into one lease during fiscal 2023. The lease expires October 31, 2028. The Company recognized $50,000 and $98,000 of rental costs in Italy for fiscal 2024 and 2023, respectively.
The Company considers its facilities adequate for its current operational needs. The Company leases the following facilities: 13 • One University Plaza, Suite 307, Hackensack, New Jersey 07601, which, since November 2011, serves as the Company’s corporate headquarters. The lease expires in November 2026.
The Company considers its facilities adequate for its current operational needs. The Company leases the following facilities: • One University Plaza, Suite 307, Hackensack, New Jersey 07601, which, since November 2011, serves as the Company’s corporate headquarters. The lease expires in November 2026.
Item 2. Properties The Company currently leases its office and laboratory facilities under non-cancelable operating leases. Rent expense for operating leases is recognized on a straight-line basis over the lease term from the lease commencement date through the scheduled expiration date. Rent expenses totaled $1.9 million for the years ended April 30, 2023 and 2022, respectively.
Item 2. Properties The Company currently leases its office and laboratory facilities under non-cancelable operating leases. Rent expense for operating leases is recognized on a straight-line basis over the lease term from the lease commencement date through the 14 scheduled expiration date. Rent expenses totaled $1.8 million and $1.9 million for the years ended April 30, 2024 and 2023, respectively.
The Company recognized $83,000 and $88,000 of rental costs relative to this lease for fiscal 2023 and 2022, respectively. • 1330 Piccard Drive, Suite 025, Rockville, MD 20850, which consists of laboratory and office space where the Company conducts operations related to its primary service offerings. The lease expires February 28, 2029.
The Company recognized $77,000 and $83,000 of rental costs relative to this lease for fiscal 2024 and 2023, respectively. • 1330 Piccard Drive, Suite 025, Rockville, MD 20850, which consists of laboratory and office space where the Company conducts operations related to its primary service offerings. The lease expires February 28, 2029.
The Company recognized $1.7 million of rental costs relative to this lease for fiscal 2023 and 2022, respectively. • VIA LEONE XIII, 14, Milan, Italy, which consists of laboratory and office space where the Company conducts operations related to its flow cytometry service offerings. The Company consolidated its lab and office space leases into one lease during fiscal 2023.
The Company recognized $1.7 million of rental costs relative to this lease for each of fiscal 2024 and 2023. • VIA LEONE XIII, 14, Milan, Italy, which consists of laboratory and office space where the Company conducts operations related to its flow cytometry service offerings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe table below sets forth the high and low bid prices of our common stock, as reported on Nasdaq for the periods shown: High Low Fiscal Year Ended April 30, 2023: First quarter $ 9.53 $ 6.81 Second quarter 9.88 6.90 Third quarter 7.24 3.75 Fourth quarter 5.54 3.95 High Low Fiscal Year Ended April 30, 2022: First quarter $ 11.25 $ 8.45 Second quarter 11.00 9.23 Third quarter 10.38 7.60 Fourth quarter 8.93 7.06 Approximate Number of Holders of Common Stock As of July 18, 2023 there were approximately 1,900 record holders of the Company’s common stock.
Biggest changeThe table below sets forth the high and low bid prices of our common stock, as reported on Nasdaq for the periods shown: High Low Fiscal Year Ended April 30, 2024: First quarter $ 7.32 $ 4.17 Second quarter 7.01 5.10 Third quarter 7.13 4.51 Fourth quarter 6.26 4.74 High Low Fiscal Year Ended April 30, 2023: First quarter $ 9.53 $ 6.81 Second quarter 9.88 6.90 Third quarter 7.24 3.75 Fourth quarter 5.54 3.95 Approximate Number of Holders of Common Stock 15 As of July 18, 2024 there were approximately 1,900 record holders of the Company’s common stock.
Dividends 14 Holders of our common stock are entitled to receive such dividends as may be declared by our Board of Directors. No dividends have been declared or paid with respect to our common stock and no dividends are anticipated to be paid in the foreseeable future.
Dividends Holders of our common stock are entitled to receive such dividends as may be declared by our Board of Directors. No dividends have been declared or paid with respect to our common stock and no dividends are anticipated to be paid in the foreseeable future.
As of April 30, 2023, the Company had purchased approximately 14,000 shares of its common stock, at an average price of $5.11 per share, totaling approximately $74,000 and leaving an available balance of approximately $4.9 million authorized by the Board for use in the program as of that date. Use of Proceeds None. Item 6. Reserved
As of April 30, 2024, the Company had purchased approximately 120,300 shares of its common stock, at an average price of $5.73 per share, totaling approximately $708,000 and leaving an available balance of approximately $4.3 million authorized by the Board for use in the program as of that date. Use of Proceeds None. Item 6. [ Reserved ]
Any future decisions as to the payment of dividends will be at the discretion of our Board of Directors, subject to applicable law. Recent Sales by the Company of Unregistered Securities None.
Any future decisions as to the payment of dividends will be at the discretion of our Board of Directors, subject to applicable law.
Added
Securities Authorized for Issuance Under Equity Compensation Plans Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders 1,484,895 4.65 1,252,998 Equity compensation plans not approved by security holders — — — Total 1,484,895 4.65 1,252,998 Recent Sales by the Company of Unregistered Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations The following table summarizes our operating results for the periods presented below (dollars in thousands): For the Years Ended April 30, 2023 % of Revenue 2022 % of Revenue % Change Oncology services revenue $ 53,870 100.0 % $ 49,109 100.0 % 9.7 % Costs and operating expenses: Cost of oncology services 29,532 54.8 23,632 48.1 25.0 Research and development 11,545 21.4 9,374 19.1 23.2 Sales and marketing 7,002 13.0 6,379 13.0 9.8 General and administrative 10,240 19.0 9,117 18.6 12.3 Asset Impairment 807 1.5 — — 100.0 Total costs and operating expenses 59,126 109.7 48,502 98.8 21.9 (Loss) income from operations $ (5,256) (9.7) % $ 607 1.2 % (965.9) % Oncology Services Revenue Oncology services revenue, which is primarily derived from research services, was $53.9 million and $49.1 million, for the years ended April 30, 2023 and 2022, respectively, an increase of $4.8 million, or 9.7%.
Biggest changeResults of Operations The following table summarizes our operating results for the periods presented below (dollars in thousands): 17 For the Years Ended April 30, 2024 % of Revenue 2023 % of Revenue % Change Oncology services revenue $ 50,155 100.0 % $ 53,870 100.0 % (6.9) % Costs and operating expenses: Cost of oncology services 29,401 58.6 29,532 54.8 (0.4) Research and development 9,544 19.0 11,545 21.4 (17.3) Sales and marketing 7,064 14.1 7,002 13.0 0.9 General and administrative 11,067 22.1 10,240 19.0 8.1 Loss on disposal of equipment 435 0.9 — — 100.0 Asset Impairment — — 807 1.5 (100.0) Total costs and operating expenses 57,511 114.7 59,126 109.7 (2.7) Loss from operations (7,356) (14.7) (5,256) (9.8) 40.0 Oncology Services Revenue Oncology services revenue, which is primarily derived from research services, was $50.2 million and $53.9 million, for the years ended April 30, 2024 and 2023, respectively, a decrease of $3.7 million, or 6.9%.
Recoverability of Capitalized Software Development Costs The Company accounts for the cost of computer software obtained or developed for internal use as well as the software development and implementation costs associated with a hosting arrangement ("internal-use software") that is a service contract in accordance and with ASC 350, Intangibles - Goodwill and Other ("ASC-350").
Recoverability of Capitalized Software Development Costs The Company accounts for the cost of computer software obtained or developed for internal use as well as the software development and implementation costs associated with a hosting arrangement ("internal-use software") that is a service contract in accordance and with ASC 350, Intangibles - Goodwill and Other.
By performing studies to predict the efficacy of oncology drugs, our Platform 15 facilitates drug discovery with lower costs and increased speed of drug development as well as increased adoption of existing drugs. We also sell Lumin Bioinformatics ("Lumin"), an oncology data-driven software program which contains comprehensive information derived from our research services and clinical studies.
By performing studies to predict the efficacy of oncology drugs, our Platform facilitates drug discovery with lower costs and increased speed of drug development as well as increased adoption of existing drugs. We also sell Lumin Bioinformatics ("Lumin"), an oncology data-driven software program which contains comprehensive information derived from our research services and clinical studies.
There are a few contracts that range in duration between 1 and 3 years. Substantially all of the Company's performance obligations, 18 and associated revenue, are transferred to the customer over time. Most of the Company's contracts can be terminated by the customer without cause.
There are a few contracts that range in duration between 1 and 3 years. Substantially all of the Company's performance obligations, and associated revenue, are transferred to the customer over time. Most of the Company's contracts can be terminated by the customer without cause.
Variable consideration is recognized as revenue if and when it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved in the future. Amendments to contracts are common.
Variable consideration is recognized as revenue if and when it is deemed probable that a significant 20 reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved in the future. Amendments to contracts are common.
Lumin leverages Champions’ large Datacenter coupled with analytics and artificial intelligence to provide a robust tool for computational cancer research. It is the combination of the Datacenter and the analytics that create a unique foundation for Lumin.
Lumin leverages Champions’ large Datacenter coupled with analytics and artificial intelligence to provide a robust tool for computational cancer research. It is the combination of the Datacenter and the analytics that create a foundation for Lumin.
As the carrying value was determined not to be recoverable from future revenues, an impairment loss was recognized for the year ending April 30, 2023 equal to the amount by which the carrying amount exceeded the future revenues, or, its net book value at that date of $807,000. There were no impairment charges for the year ending April 30, 2022.
As the carrying value was determined not to be recoverable from future revenues, an impairment loss was recognized for the year ending April 30, 2023 equal to the amount by which the carrying amount exceeded the future revenues, or, its net book value at that date of $807,000. There were no impairment charges for the year ending April 30, 2024.
Our discovery strategy utilizes our rich and unique Datacenter, coupled with artificial intelligence and other advanced computational analytics, to identify novel therapeutic targets. We then employ the use of our proprietary experimental platforms to rapidly validate these targets for further drug development efforts.
Our drug discovery and development business leverages the computational and experimental capabilities within our platforms. Our discovery strategy utilizes our rich and unique Datacenter, coupled with artificial intelligence and other advanced computational analytics, to identify novel therapeutic targets. We then employ the use of our proprietary experimental platforms to rapidly validate these targets for further drug development efforts.
This update requires immediate recognition of management’s estimates of current expected credit losses ("CECL"). Under the prior model, losses were recognized only as they were incurred. The new model is applicable to all financial instruments that are not accounted for at fair value through net income. The standard is effective May 1, 2023 for the Company.
This update requires immediate recognition of management’s estimates of current expected credit losses. Under the prior model, losses were recognized only as they were incurred. The new model is applicable to all financial instruments that are not accounted for at fair value through net income.
The Company has not accrued penalties or interest during the year ended April 30, 2023 as we believe the liability for uncertain tax positions accurately reflects penalties and/or interest as of this date. Accounting Pronouncements Being Evaluated In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses".
The Company has not accrued any additional penalties or interest during the year ended April 30, 2024 as we believe the liability for uncertain tax positions accurately reflects penalties and/or interest as of this date. Accounting Pronouncements Adopted 21 In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses".
General and Administrative General and administrative expense was $10.2 million and $9.1 million for the years ended April 30, 2023 and 2022, respectively, an increase of $1.1 million, or 12.3%. General and administrative expenses were primarily comprised of compensation, insurance, professional fees, IT, and depreciation and amortization expenses.
General and Administrative General and administrative expense was $11.1 million and $10.2 million for the years ended April 30, 2024 and 2023, respectively, an increase of $0.8 million, or 8.1%. General and administrative expense was primarily comprised of compensation, insurance, professional fees, IT, and depreciation and amortization expenses.
Asset Impairment During the fourth quarter of fiscal 2023, we assessed the recoverability of the Lumin capitalized software development costs by comparing the forecasted future revenues from Lumin sales, based on management’s best estimates and using appropriate assumptions and projections, to the carrying amount of the capitalized asset.
These increases were partially offset by a decrease in IT and professional fees. 18 Asset Impairment During the fourth quarter of fiscal 2023, we assessed the recoverability of the Lumin capitalized software development costs by comparing the forecasted future revenues from Lumin sales, based on management’s best estimates and using appropriate assumptions and projections, to the carrying amount of the capitalized asset.
Accounting for Income Taxes We use the asset and liability method to account for income taxes. Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets.
There were no impairment charges related to software development costs recorded during fiscal 2024. Accounting for Income Taxes We use the asset and liability method to account for income taxes. Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets.
Insights developed using Lumin can provide the basis for biomarker hypotheses, reveal potential mechanisms of therapeutic resistance, and guide the direction of additional preclinical evaluations. During fiscal 2023, we recorded an asset impairment related to Lumin software development costs of $807,000. Our drug discovery and development business leverages the computational and experimental capabilities within our platforms.
Insights developed using Lumin can provide the basis for biomarker hypotheses, reveal potential mechanisms of therapeutic resistance, and guide the direction of additional preclinical evaluations. During fiscal 2023, we recorded an asset impairment related to Lumin software development costs of $807,000. There were no impairment charges recorded for fiscal 2024.
Other Expense Other expense, net was $11,000 and $24,000 for the years ended April 30, 2023 and 2022, respectively and resulted primarily from foreign currency transaction net losses offset by interest income.
Other expense, net, was $11,000 for the year ended April 30, 2023. For the year ended April 30, 2024, other income resulted primarily from interest income of $92,000 partially offset by foreign currency transaction net losses of approximately $16,000 and interest expense of $28,000.
Overview and Recent Developments We are a technology-enabled research organization engaged in creating transformative technology solutions to be utilized in drug discovery and development. Our research center consists of a comprehensive set of computational and experimental research platforms. Our pharmacology, biomarker, and data platforms are designed to facilitate drug discovery and development at lower costs and increased speeds.
Our research center consists of a comprehensive set of computational and experimental research platforms. Our pharmacology, biomarker, and data platforms are designed to facilitate drug discovery and development at lower costs and increased speeds.
To the extent a valuation allowance is established or increased in a period, we include an expense within the tax provision of the consolidated statements of operations.
To the extent a valuation allowance is established or increased in a period, we include an expense within the tax provision of the consolidated statements of operations. As of April 30, 2024 and 2023, we have established a full valuation allowance for all deferred tax assets.
General Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States or GAAP.
There are also areas in which the selection of an available alternative policy would not produce a materially different result. General Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP").
Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors, including those we discuss under Item 1A – “Risk Factors” and elsewhere in this Annual Report.
Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors, including those we discuss under Item 1A – “Risk Factors” and elsewhere in this Annual Report. 16 Overview and Recent Developments We are a technology-enabled research organization engaged in creating transformative technology solutions to be utilized in drug discovery and development.
Liquidity and Capital Resources Our liquidity needs have typically arisen from the funding of our research and development programs and the launch of new products, working capital requirements, and other strategic initiatives.
No adjustments have been made to the financials statements as a result this uncertainty. Our liquidity needs have typically arisen from the funding of our research and development programs and the launch of new products, working capital requirements, and other strategic initiatives.
Cash Flows The following discussion relates to the major components of our cash flows: 17 Cash Flows from Operating Activities Net cash provided by operating activities was $4.0 million and $6.5 million for the years ended April 30, 2023 and 2022, respectively. The decrease in cash provided by operations resulted primarily from the net loss realized in fiscal 2023.
Cash Flows The following discussion relates to the major components of our cash flows: Cash Flows from Operating Activities Net cash used in operating activities was $6.1 million for the year ended April 30, 2024. Net cash provided by operating activities was $4.0 million for the year ended April 30, 2023.
The cash used was for the investment in lab and computer equipment. Cash Flows from Financing Activities Net cash provided by financing activities was $11,000 and $207,000 for the years ended April 30, 2023 and 2022, respectively.
Cash Flows from Financing Activities Net cash used in financing activities was $527,000 for the year ended April 30, 2024. Net cash provided by financing activities was $11,000 for the year ended April 30, 2023.
It is not intended to be a comprehensive list of all of our significant accounting policies, which are more fully described in Note 2 of the notes to the consolidated financial statements included in this document.
It is not intended to be a comprehensive list of all of our significant accounting policies, which are more fully described in Note 2 to the consolidated financial statements included in this document. In many cases, the accounting treatment of a particular transaction is specifically dictated by generally accepted accounting principles, with no need for management’s judgment in their application.
We do not anticipate any significant unrecognized tax benefits will be recorded during the next 12 months. Any interest or penalties related to unrecognized tax benefits is recognized in income tax expense.
As of April 30, 2024 and 2023, we recognized a liability for uncertain tax positions on the balance sheet relative to foreign operations in the amount of $181,000. We do not anticipate any significant unrecognized tax benefits will be recorded during the next 12 months. Any interest or penalties related to unrecognized tax benefits is recognized in income tax expense.
In the past, we have met these cash requirements through our cash on hand, working capital management, proceeds from certain private placements and public offerings of our securities and sales of products and services. For the years ended April 30, 2023 and 2022, the Company had a net loss of approximately $5.3 million and net income of approximately $548,000, respectively.
Most recently, we have met these cash requirements through cash on hand, working capital management, and sales of products and services. In the past, we have also received proceeds from certain private placements and public offerings of our securities.
Sales and Marketing Sales and marketing expense was $7.0 million and $6.4 million for the years ended April 30, 2023 and 2022, respectively, an increase of $0.6 million or 9.8%.
Sales and Marketing Sales and marketing expense was $7.1 million and $7.0 million for the years ended April 30, 2024 and 2023, respectively, remaining relatively flat with a slight increase of $0.1 million or 0.9%. The increase was mainly due to increased conference attendance.
Cash flows provided by financing activities was due to exercises of stock options and decreased from the prior year due to lower volume of exercises. During fiscal 2023, cash provided by financing was offset by cash used to repurchase common stock per our stock buyback program.
Cash flows used in financing activities was for the repurchase of common stock per our stock buyback program and financing lease payments and was offset by stock options exercise proceeds.
Cash generated from operations in 2023 was primarily due to changes in our working capital accounts in the ordinary course of business and an increase in deferred revenue. Cash Flows from Investing Activities Net cash used in investing activities was $2.9 million and $2.4 million for the years ended April 30, 2023 and 2022, respectively.
The decrease in cash from operations was primarily due to the net loss realized in fiscal 2024. Cash Flows from Investing Activities 19 Net cash used in investing activities was $836,000 and $2.9 million for the years ended April 30, 2024 and 2023, respectively. The cash used was for the investment in lab and computer equipment.
We are currently assessing the impact of this update on our consolidated financial statements but we do not expect the adoption of the pronouncement to have a material impact on our balance sheet or results of operations. Off-Balance Sheet Financing We have no off-balance sheet debt or similar obligations.
The Company adopted this ASU on May 1, 2023 and the adoption did not have a material effect on its condensed consolidated financial statements and related disclosures. Off-Balance Sheet Financing We have no off-balance sheet debt or similar obligations.
The increase was primarily due to the investments in new service capabilities and our drug discovery and development programs with the increase coming primarily from compensation, lab supply, and outsourced discovery expenses.
These factors led to a decline in compensation and lab supply expenses. The decrease was also due to a reduction in spend for our drug discovery and development programs.
Cost of Oncology Services Cost of oncology services were $29.5 million and $23.6 million for the years ended April 30, 2023 and 2022, respectively, an increase of $5.9 million or 25.0%. The increase in cost of oncology services was primarily from an increase in compensation 16 and supply expenses.
Cost of Oncology Services Cost of oncology services were $29.4 million and $29.5 million for the years ended April 30, 2024 and 2023, respectively, a slight decrease of $0.1 million or 0.4%. Gross margin was 41% for the twelve months ended April 30, 2024 compared to 45% for the twelve months ended April 30, 2023.
Research and Development Research and development expense was $11.5 million and $9.4 million for the years ended April 30, 2023 and 2022, respectively, an increase of $2.2 million or 23.2%.
Research and Development Research and development expense was $9.5 million and $11.5 million for the years ended April 30, 2024 and 2023, respectively, a decrease of $2.0 million or (17.3)%. The decrease was primarily due to cost cutting measures along with a reduction in research and development work required as our newer platforms mature.
The general and administrative expenses increase was primarily due to increases in non-cash depreciation and amortization expenses.
The general and administrative expense increase was primarily due to compensation and recruiting expenses due to the addition to the executive team. Additionally, non-cash stock compensation and allowances for estimated credit losses and bad debt reserves increased.
Removed
The increase in revenue was primarily due to the expansion of both our platform and product lines creating additional demand for our services, leading to larger pharmacology study sizes in both our in-vivo and ex-vivo platforms.
Added
The decrease in revenue was primarily due to a combination of factors including an increase in study cancellations during fiscal year 2023 and a slowdown of bookings expansion. These two factors reduced our net bookings and available convertible revenue in the current year.
Removed
Gross margin was 45% for the twelve months ended April 30, 2023 compared to 52% for the twelve months ended April 30, 2022. The decrease in gross margin was the result of increasing costs in compensation and supplies to support revenue growth that didn't materialize as expected.
Added
The decrease in gross margin was the result of relatively unchanged variable costs on a revenue decline. Variable costs were a higher percentage of revenue due to increases in mice and supply expenses. These increases were caused by operational inefficiencies creating the need for additional mice and lab supplies.
Removed
The increase was mainly due to compensation expense, driven by the continued expansion of our business development teams, and marketing initiatives, including increased conference attendance due to the easing of Covid restrictions.
Added
Loss on Disposal of Equipment Loss on disposal of equipment was $435,000 and zero for the years ended April 30, 2024 and 2023, respectively.
Removed
As of April 30, 2023, the Company had an accumulated deficit of approximately $77.3 million, negative working capital of $2.3 million and cash of $10.1 million. For the twelve months ended April 30, 2023, the Company realized cash flow from operations of approximately $4.0 million.
Added
For the year ended April 30, 2024, the loss resulted from the disposal of equipment which could no longer be utilized and had a net book value, or carrying value on the balance sheet, as of the disposal date. Other Income (Expense) Other income, net, was $48,000 for the year ended April 30, 2024.
Removed
Despite our negative working capital at this date, we believe that our cash on hand, together with expected cash flows from operations, are adequate to fund operations through at least August 2024.
Added
For the year ended April 30, 2023, other expense, net resulted primarily from foreign currency transaction net losses.
Removed
Should the Company be required to raise additional capital, there can be no assurance that management would be successful in raising such capital on terms acceptable to us, if at all.
Added
Liquidity and Capital Resources Under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued.
Removed
In many cases, the accounting treatment of a particular transaction is specifically dictated by generally accepted accounting principles, with no need for management’s judgment in their application. There are also areas in which the selection of an available alternative policy would not produce a materially different result.
Added
The following conditions raised substantial doubt about our ability to continue as a going concern: a history of net losses, working capital deficits, accumulated deficit and declining cash position. Going concern matters are more fully discussed in Notes to the Consolidated Financial Statements, Note 2, Summary of Significant Accounting Policies.
Removed
As of April 30, 2023 and 2022, we have established a full valuation allowance for all deferred tax assets. 19 As of April 30, 2023 and 2022, we recognized a liability for uncertain tax positions on the balance sheet relative to foreign operations in the amount of $181,000.
Added
For the years ended April 30, 2024 and 2023, the Company had a net loss of approximately $7.3 million and a net loss of approximately $5.3 million, respectively. While we believe we have strategies to increase our revenues and reduce our costs which can be implemented without disrupting the business or completely restructuring the Company, there can be no assurances.
Added
In order to continue to fund our operations we may need to raise additional equity or debt capital in the near term and cannot provide any assurance that we will be successful in doing so, and if we can, on whether the terms will be acceptable to us.
Added
If we are unable to obtain additional financing in the near future, we may be required to pursue a reorganization proceeding, including under applicable bankruptcy or insolvency laws.

Other CSBR 10-K year-over-year comparisons