CHAMPIONS ONCOLOGY, INC.

Champions Oncology, Inc. operates in the oncology drug discovery and development industry, providing technology-enabled research services through computational and experimental platforms. The company's research center operates in both regulatory and non-regulatory environments and consists of a comprehensive set of computational and experimental research platforms designed to facilitate drug discovery and development at lower costs and increased speeds. The global oncology drug market was estimated to exceed $286 billion in 2026 with continued projected growth. The industry is characterized by intense competition based on scientific, technological, and market forces, including the effectiveness of technology and products and the ability to commercialize technological developments.

The company faces significant competition from other healthcare companies in the United States and abroad, the majority of which are substantially larger and have greater resources and operating histories. In research services, competition is intense and based significantly on scientific, technological, and market forces. In the SaaS market, while the company's Datacenter is considered unique, there are a large number of publicly available datasets accessible free of charge, and the barrier to entry for developing a SaaS tool leveraging analytics is relatively low. In drug discovery and development, the company competes against the global biopharmaceutical industry, including companies with a wide range of strategic and operational approaches. The company has performed studies for approximately 500 different pharmaceutical and biotechnology companies over the past ten years and has a high rate of repeat business, contracting with companies across North America, Europe and Asia.

The company generates revenue primarily through the sale of research services utilizing its innovative research platforms to biopharmaceutical companies, the sale of PDX model data and oncology research SaaS tools to cancer research scientists, and the discovery and development of novel oncology therapeutics. Revenue is primarily derived from research services, which represent the primary source of the company's current revenue stream. The company's SaaS business centers around its proprietary software platform and data tool, Lumin Bioinformatics, which is sold to customers on an annual subscription basis. The company's drug discovery and development business leverages computational and experimental capabilities within its platforms, with efforts centered around three areas of focus: targeted therapy with drug conjugates, immune oncology, and cell therapy.

For the fiscal year ended April 30, 2026, oncology revenue totaled $59.425 million ¹, an increase of 4.4% ² from the prior year. Revenue is comprised of pharmacology services, TOS data license revenue, and other TOS revenue. Pharmacology services revenue was $57.133 million ³ for fiscal 2026 compared to $48.585 million ⁴ in fiscal 2025. TOS data license revenue was $0.764 million ⁵ in fiscal 2026 compared to $4.676 million ⁶ in fiscal 2025. Other TOS revenue was $1.528 million ⁷ in fiscal 2026 compared to $3.683 million ⁸ in fiscal 2025. Cost of oncology revenue was $30.9 million ⁹ for fiscal 2026, an increase of 8.8% ¹⁰ from $28.389 million ¹¹ in fiscal 2025.

The company's core platform is its proprietary bank of Patient Derived Xenograft (PDX) models, which currently includes approximately 1,500 PDX Models ¹² in its TumorBank. The Datacenter combines the company's proprietary dataset with other large publicly available datasets, currently including approximately 3,500 molecular datasets ¹³, approximately 3,000 clinical drug responses ¹⁴, approximately 3,500 in vivo drug responses ¹⁵, and approximately 20,000 publicly available datasets ¹⁶. The company's research services include in vivo studies, bioinformatics analysis, and computational or experimental support to identify novel therapeutic targets, select appropriate patient populations for clinical evaluation, identify potential therapeutic combination strategies, and develop biomarker hypotheses. Typical studies are in the $125,000 ¹⁷ price range, with an increasing number of studies in the $250,000 to $500,000 ¹⁸ range. The company's SaaS business is centered around Lumin Bioinformatics, which leverages the Datacenter coupled with analytics and artificial intelligence.

On March 29, 2023, the Board of Directors approved a share repurchase program authorizing the company to purchase up to an aggregate of $5.0 million ¹⁹ of the company's common stock. As of April 30, 2026, the company had purchased approximately 120,300 shares ²⁰ of its common stock, at an average price of $5.73 per share ²¹, totaling approximately $708,000 ²² and leaving an available balance of approximately $4.3 million ²³ authorized by the Board for use in the program. The company did not purchase any shares of its common stock during the fiscal years ended April 30, 2026 or 2025. The company terminated its lease in Milan, Italy effective April 30, 2026. The company is investing in developing additional proprietary pharmacology platforms aimed at enhancing scientific output and driving innovation in the oncology research sector, including expanding capabilities to support the evaluation of radiopharmaceutical therapies through preclinical research platforms.

For the fiscal year ended April 30, 2026, oncology revenue was $59.425 million ²⁴, an increase of 4.4% ²⁵ from $56.944 million ²⁶ in the prior year. The company reported a net loss of approximately $1.175 million ²⁷ for fiscal 2026 compared to net income of approximately $4.701 million ²⁸ in fiscal 2025. Income from operations was a loss of $1.140 million ²⁹ for fiscal 2026 compared to income of $4.553 million ³⁰ in fiscal 2025. The company had an accumulated deficit of approximately $81.1 million ³¹ as of April 30, 2026, and a cash balance of $4.9 million ³². The company used cash in operations of approximately $4.5 million ³³ for the twelve months ending April 30, 2026.

The company's growth strategy includes growing its TumorBank in two ways: first, by leveraging a medical affairs team that works with a well-established clinical network to facilitate access to patients diagnosed with prioritized tumor subtypes, and second, by maintaining the ability to utilize its legacy Personalized Oncology Services business to establish novel PDX models from patients who use this service. The company is currently investing in developing additional proprietary pharmacology platforms aimed at enhancing the scientific output and driving innovation in the oncology research sector, including expanding capabilities to support the evaluation of radiopharmaceutical therapies through its preclinical research platforms. The company is also investing in the development of sophisticated analytical platforms which allow scientists to derive deeper insights when using its pharmacology platforms. The company's discovery strategy utilizes its Datacenter, coupled with artificial intelligence and other advanced computational analytics, to identify novel therapeutic targets, and then employs proprietary experimental platforms to rapidly validate these targets for further drug development efforts.

The company's growth strategy also includes computational power investments, having developed sophisticated and innovative computational approaches and invested in the development of novel artificial intelligence, data structures, and analytics. The goal is to leverage the unique Datacenter to establish elegant ways to better understand the molecular dynamics of cancer and the development of novel therapeutics. The company's drug discovery and development business has a rich pipeline of targets at various stages of discovery and validation, with a select group that has progressed to therapeutic development. The commercial strategy for validated targets and therapeutics is wide-ranging and still being developed, and the company regularly evaluates strategic options to create additional value from its drug discovery business, which may include potential spin-out transactions, licensing opportunities, or capital raises. The company's enterprise strategy consists of establishing a global leadership position in oncology research, focusing on bringing better drugs to patients faster, leading innovation in oncology research and development platforms, cultivating a solid reputation for quality data acquisition and interpretation, collaborating across the global biopharma landscape, and achieving profitable growth across all business lines.

Cost of oncology revenue increased 8.8% ³⁴ for fiscal 2026 compared to the prior year, primarily driven by higher outsourced laboratory costs associated with the expansion of radiopharmacology services. During fiscal 2026, the company transitioned these capabilities in-house, which management expects will reduce reliance on outsourced laboratory services and associated costs for fiscal 2027. Research and development expense increased 33.1% ³⁵ to $9.084 million ³⁶ in fiscal 2026 from $6.825 million ³⁷ in fiscal 2025, driven by increased investment in the company's data platform, including higher sequencing and laboratory costs, as well as higher compensation expenses. Sales and marketing expense increased 23.5% ³⁸ 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 expense increased 19.4% ³⁹ primarily driven by higher information technology costs, stock-based compensation and compensation-related expenses, including costs associated with changes in executive leadership.

The company's research services operations depend on having a colony of live mice available, and any health crisis impacting this colony could negatively affect business. The company currently utilizes several office suites where its laboratories are located within one facility in Rockville, Maryland. If this facility was significantly damaged or destroyed, the company could suffer a loss of ongoing and future drug studies as well as its TumorBank. The company leases its laboratories from a third party, and a dispute with the landlord or inability to utilize the space could negatively affect results of operations. The company's information technology systems may be vulnerable to damage, interruption, or shutdown due to 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.

For the fiscal years ended April 30, 2026 and 2025, the company spent approximately $9.1 million ⁴⁰ and $6.8 million ⁴¹, respectively, to further develop its platforms. Capital expenditures for property and equipment were $564,000 ⁴² in fiscal 2026 and $389,000 ⁴³ in fiscal 2025. The company has a share repurchase program authorizing up to an aggregate of $5.0 million ⁴⁴ of common stock, with approximately $4.3 million ⁴⁵ remaining available as of April 30, 2026. The company has not paid any cash dividends on its common stock to date and does not anticipate any cash dividends being paid in the foreseeable future. The company's dividend policy will be based on operating results and capital needs of the business, and it is anticipated that any earnings will be retained to finance future expansion.

The company faces structural headwinds including the risk that its research service studies are subject to cancellation based on changes in customers' development plans, as revenue is primarily derived from studies performed for pharmaceutical and biotechnology companies. There are many factors that could result in changes to customers' development plans, including research and development budgets and drug development strategies, which could lead to cancellation or modification of on-going or planned studies. The company also faces the risk that drug development programs, particularly those in early stages of development, may never be commercialized, as early-stage product candidates require significant investment in development, preclinical studies and clinical trials, regulatory clearances and substantial additional investment before they can be commercialized. The company's research and development programs may not lead to commercially viable products for several reasons, including failure to identify promising product candidates, failure of product candidates to be safe and effective in preclinical tests or clinical trials, or inadequate financial or other resources to pursue discovery and development efforts.

Geographic and macro factors identified as constraints include the company's Chairman of the Board of Directors residing in Israel and the company having several customers with operations located in Israel, making leadership continuity and results potentially adversely affected by political, economic, and military instability in Israel. One of the company's wholly owned subsidiaries is based in Israel. 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, and any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect the company's business, results of operations, and leadership continuity. The ongoing wars with Iran and its proxies could disrupt customers' business and operations. Deterioration in general economic conditions in the United States and globally, including the effect of prolonged periods of inflation on customers and suppliers, could harm the company's business and results of operations, with impacts including reduced customer base and potential for new bookings due to possible reductions in pharmaceutical and biotech industry-wide spend on research and development.

The company historically incurred losses from operating activities and may never achieve sustained profitability, having reported a net loss of approximately $1.2 million ⁴⁶ for fiscal 2026, an accumulated deficit of approximately $81.1 million ⁴⁷, and a cash balance of $4.9 million ⁴⁸ as of April 30, 2026, with cash used in operations of approximately $4.5 million ⁴⁹ for the twelve months ending April 30, 2026. The company's revenue is primarily derived from studies performed for pharmaceutical and biotechnology companies, and these studies are subject to cancellation based on changes in customers' development plans, which could negatively impact revenue growth and profit margin. The company faces intense competition from substantially larger competitors with greater resources, and there can be no assurance that developments by other companies will not render the company's products or technologies obsolete or non-competitive. The company's drug development programs, particularly those in early stages, may never be commercialized, as early-stage product candidates require significant investment in development, preclinical studies and clinical trials before they can be commercialized. The company's ability to use its net operating loss carry-forwards may be limited under Section 382 of the Internal Revenue Code due to an ownership change that may have been triggered by the 2016 public offering, private placements, and other transactions.

Management's message emphasizes the company's strategy to use its various platform technologies to drive multiple synergistic revenue streams, with a focus on bringing better drugs to patients faster and leading innovation in oncology research and development platforms. The company's enterprise strategy consists of establishing a global leadership position in oncology research, cultivating a solid reputation for the quality of data acquisition and interpretation, collaborating across the global biopharma landscape, and achieving profitable growth across all business lines. Management highlights that revenue from the research services business has grown at an average annual growth rate of 12% ⁵⁰ since 2019 and represents the primary source of the company's current revenue stream. The company's growth strategy has multiple components including growing the TumorBank, adding new experimental technologies, and computational power. Management notes that the company is currently investing in developing additional proprietary pharmacology platforms aimed at enhancing scientific output and driving innovation in the oncology research sector, including expanding capabilities to support the evaluation of radiopharmaceutical therapies through preclinical research platforms. The company regularly evaluates strategic options to create additional value from its drug discovery business, which may include potential spin-out transactions, licensing opportunities, or capital raises. Management believes that cash on hand, together with expected cash flows from operations, are adequate to fund operations through at least August 2027 ⁵¹.