Champions Oncology Inc.

07/27/2026 | Press release | Distributed by Public on 07/27/2026 14:45

Annual Report for Fiscal Year Ending April 30, 2026 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis together with our consolidated financial statements and the related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements that are based on our current expectations, estimates, and projections about our business and operations. 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.
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. We perform studies which we believe may predict the efficacy of experimental oncology drugs or approved drugs as stand-alone therapies or in combination with other drugs and can stimulate the results of human clinical trials. These studies include in vivo studies that rely on implanting multiple tumors from our TumorBank in mice and testing the therapy of interest on these tumors. Studies may also include bioinformatics analysis that reveal the differences in the genetic signatures of the tumors that responded to a therapy as compared to the tumors that did not respond. Additionally, we provide computational or experimental support to identify novel therapeutic targets, select appropriate patient populations for clinical evaluation, identify potential therapeutic combination strategies, and develop biomarker hypothesis of sensitivity or resistance. These studies include the use of our in vivo, ex vivo, analytical and computational platforms.
We are engaged in the development and sale of advanced technology solutions and products to personalize the development and use of oncology drugs through our Translational Oncology Solutions ("TOS"). This technology ranges from computational-based discovery platforms, unique oncology software solutions, and innovative and proprietary experimental tools such as in vivo, ex vivo and biomarker platforms. Utilizing our TumorGraft Technology Platform (the "Platform"), a comprehensive bank of unique, well characterized Patient Derived Xenograft ("PDX") models, we provide select services to pharmaceutical and biotechnology companies seeking personalized approaches to drug development. 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 offer access to certain PDX model data via licensing agreements. As our Platform has been expanded over time with the collection of models and the enhancement of their characterization, we have developed a robust multi-omic dataset with substantial potential for both drug discovery and development. This dataset serves as a vital resource for both our pharmaceutical and biotechnology customer who gain access to model-specific data and further their research via licensed access.
We also offer Lumin Bioinformatics ("Lumin"), an oncology data-driven software program which contains comprehensive information derived from our research services and clinical studies. 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. 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.
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.
We have a pipeline of targets at various stages of discovery and validation, with a select group that has progressed to early stage therapeutic development. Our commercial strategy for the validated targets and therapeutics established from this business is wide-ranging and still being developed. It will depend on many factors, and will be specific for each target or therapeutic area identified. Any expenses associated with this part of our business are research and development and are expensed as incurred.
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, licensing opportunities, or capital raises.
Results of Operations
The following table summarizes our operating results for the periods presented below (dollars in thousands):
For the Years Ended April 30,
2026 % of
Revenue 		2025 % of
Revenue
%
Change
Oncology revenue $ 59,425 100.0 % $ 56,944 100.0 % 4.4 %
Costs and operating expenses:
Cost of oncology revenue 30,900 52.0 28,389 49.9 8.8
Research and development 9,084 15.3 6,825 12.0 33.1
Sales and marketing 9,318 15.7 7,545 13.2 23.5
General and administrative 11,152 18.8 9,339 16.4 19.4
Loss on disposal of equipment 111 0.2 293 0.5 (62.1)
Total costs and operating expenses 60,565 102.0 52,391 92.0 15.6
Income (loss) from operations (1,140) (2.0) 4,553 8.0 (125.0)
Oncology Revenue
Oncology revenue, which is primarily derived from research services, was $59.4 million and $56.9 million, for the years ended April 30, 2026 and 2025, respectively, an increase of $2.5 million, or 4.4%.
Our revenues are comprised of the following:
For the Years Ended April 30,
(in 000s) 2026 2025
Pharmacology services $ 57,133 $ 48,585
TOS data license revenue 764 4,676
Other TOS revenue 1,528 3,683
Total oncology revenue $ 59,425 $ 56,944
Pharmacology Services
•Pharmacology services revenue increased for the year ended April 30, 2026 compared to the prior year. The increase was primarily driven by improved conversion of previously booked studies into revenue, including studies that had been expected to convert in the prior fiscal year but were delayed into fiscal 2026. The timing and progress of study activity can impact the period in which bookings convert to revenue.
TOS Data License Revenue
•TOS data license revenue decreased for the year ended April 30, 2026 compared to the prior year. Fiscal 2025 revenue primarily reflected a significant data license transaction with a single customer, while fiscal 2026 revenue was generated from multiple, smaller customer contracts. Although fiscal 2026 did not include a comparable large transaction, the Company expanded its data licensing customer base during the year.
Other TOS Revenue
•Other TOS revenue includes additional clinical services provided to the Company's pharmaceutical and biotechnology customers specifically for flow cytometry and SaaS provided via Lumin. Other TOS revenue decreased for the year ended April 30, 2026 compared to the prior year, primarily due to lower flow cytometry revenue as the Company strategically shifted its focus and investment away from this area of the business.
Cost of Oncology Revenue
Cost of oncology revenue was $30.9 million and $28.4 million for the years ended April 30, 2026 and 2025, respectively, an increase of $2.5 million or 8.8%. The increase was primarily driven by higher outsourced laboratory costs associated with the expansion of our radiopharmacology services. During fiscal 2026, we transitioned these capabilities in-house, which we expect will reduce our reliance on outsourced laboratory services and associated costs for fiscal 2027.
Research and Development
Research and development expense was $9.1 million and $6.8 million for the years ended April 30, 2026 and 2025, respectively, an increase of $2.3 million or 33.1%.
The significant components of research and development expense were comprised of the following:
Years Ended April 30,
(in 000s) 2026 2025
Compensation $ 3,400 $ 2,800
Laboratory Supplies 2,400 2,000
Mice Costs 130 550
Outside Services 2,270 590
Research and development expense increased $2.3 million, or 33.1% for the year ended April 30, 2026 compared to the prior year. The increase was primarily driven by increased investment in the Company's data platform, including higher sequencing and laboratory costs, as well as higher compensation expenses associated with these initiatives.
Sales and Marketing
Sales and marketing expense increased $1.8 million or 23.5% for the year ended April 30, 2026 compared to the prior year. The increase was primarily driven by higher compensation costs associated with the expansion of the Company's commercial organization, including personnel supporting both its pharmacology services and data licensing businesses.
General and Administrative
General and administrative expense increased $1.8 million, or 19.4% for the year ended April 30, 2026 compared to the prior year. The increase was primarily driven by higher information technology costs, stock-based compensation and compensation-related expenses, including costs associated with changes in executive leadership.
Loss on Disposal of Equipment
Loss on disposal of equipment was $111,000 and $293,000 for the years ended April 30, 2026 and 2025, respectively, a decrease of $182,000 or 62%. For both years ended April 30, 2026 and 2025, the losses 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, net
Other income, net, was $211,000 and $73,000 for the years ended April 30, 2026 and 2025, respectively. The increase was primarily attributable to higher interest income.
Income Taxes, net
For the years ended April 30, 2026 and 2025, the Company recognized income tax expense of $246,000 and an income tax benefit of $75,000, respectively. For the year ended April 30, 2026, income tax expense of $246,000 is mainly attributable to U.S. state income taxes due to net operating loss limitations and taxable income earned in Israel and Italy relating to transfer pricing. For the year ended April 30, 2025, the income tax benefit of $75,000 is related to the same items as indicated for the year ending 2026, net of a $181,000 reversal of an uncertain tax liability in Israel.
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. 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, 2026 and 2025, the Company had a net loss of approximately $1.2 million and net income of approximately $4.7 million, respectively. As of April 30, 2026, the Company had an accumulated deficit of approximately $81.1 million, negative working capital of $703,000 and cash of $4.9 million. For the twelve months ended April 30, 2026, the Company used cash flow from operations of approximately $4.5 million. Despite our negative working capital at this date and use of cash from operations, we believe that our cash on hand, together with expected cash flows from operations, are adequate to fund operations through at least August 2027. 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.
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 $4.5 million for the year ended April 30, 2026 compared to net cash provided by operating activities of $7.4 million for the year ended April 30, 2025. The decrease was primarily driven by a $6.6 million decrease in deferred revenue, compared to a $3.3 million increase in the prior year. The decrease in deferred revenue was primarily attributable to lower bookings and the timing of customer billings and study activity. Cash flow from operations was also impacted by the net loss in fiscal 2026 and an increase in accounts receivable, partially offset by an increase in accounts payable.
Cash Flows from Investing Activities
Net cash used in investing activities was $540,000 and $389,000 for the years ended April 30, 2026 and 2025, respectively. The cash used was for the investment in lab and computer equipment which, in fiscal 2026, was partially offset by proceeds from the sale of certain equipment.
Cash Flows from Financing Activities
Net cash provided by financing activities was $99,000 for the year ended April 30, 2026. Net cash provided by financing activities was $170,000 for the year ended April 30, 2025. Cash flows provided by financing activities in both 2026 and 2025 was generated from the proceeds of stock option exercises offset by financing lease payments.
Critical Accounting Policies
We prepare our Consolidated Financial Statements in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). Our significant accounting policies are described in Note 2 - Summary of Significant Accounting Policies to our Consolidated Financial Statements attached hereto. We believe the following critical accounting policies involve the most significant judgments and estimates used in the preparation of our Consolidated Financial Statements.
Revenue Recognition
The Company accounts for revenue under the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. In accordance with ("ASC 606"), revenue is recognized when, or as, a customer obtains control of promised services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services.
A performance obligation is a promise (or a combination of promises) in a contract to transfer distinct goods or services to a customer and is the unit of accounting under ASC 606 for the purposes of revenue recognition. A contract's transaction price is allocated to each separate performance obligation based upon the standalone selling price and is recognized as revenue, when, or as, the performance obligation is satisfied. The majority of the Company's contracts have a single performance
obligation because the promise to transfer individual services is not separately identifiable from other promises in the contracts, and therefore, is not distinct.
The majority of the Company's revenue arrangements are service contracts that are completed within a year or less. There are a few contracts that range in duration between 1 and 3 years. Substantially all of the Company's performance obligations, and associated revenue, are transferred to the customer over time. Most of the Company's contracts can be terminated by the customer without cause. In the event of termination, the Company's contracts provide that the customer pay the Company for services rendered through the termination date. The Company generally receives compensation based on a predetermined invoicing schedule relating to specific milestones for that contract.
Amendments to contracts are common. The Company evaluates each amendment which meets the criteria of a contract modification under ASC 606. Each modification is further evaluated to determine whether the contract modification should be accounted for as a separate contract or as a continuation of the original agreement.
The Company accounts for amendments as a separate contract when they meet the criteria under ASC 606-10-25-12.
Stock-Based Payments
We typically recognize expense for stock-based payments based on the fair value of awards on the date of grant. We use the Black-Scholes option pricing model to estimate fair value. The option pricing model requires us to estimate certain key assumptions such as expected life, volatility, risk free interest rates, and dividend yield to determine the fair value of stock-based awards. These assumptions are based on historical information and management judgment. We expense stock-based payments over the period that the awards are expected to vest. In the event of forfeitures, compensation expense is adjusted.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, "Improvements to Tax Disclosures" (Topic 740). The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and the income taxes paid information disclosed. The ASU is effective retrospectively for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted this ASU as of May 1, 2025, and it has been included in the required disclosures in our financial statements since.
In November 2024 and January 2025, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures" (Subtopic 220-40) "Disaggregation of Income Statement Expenses" and ASU 2025-01 "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures" (Subtopic 220-40): Clarifying the Effective Date". The new guidance is intended to enhance transparency and disclosures by requiring public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The ASU is effective for the first annual reporting periods after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is in the process of evaluating the impact that the adoption of this ASU will have on its financial statements and related disclosures, which is not expected to be material.
Off-Balance Sheet Financing
We have no off-balance sheet debt or similar obligations. We have no transactions or obligations with related parties that are not disclosed, consolidated into or reflected in our reported results of operations or financial position. We do not guarantee any third-party debt.
Champions Oncology Inc. published this content on July 27, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on July 27, 2026 at 20:45 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]