CSBR 10-K & 10-Q changes, risk factors and insider trading

For the fiscal year ended April 30, 2025,2026, the Company had a net incomeloss of approximately $4.7$1.2 million, an accumulated deficit of approximately $79.9$81.1 million, and a cash balance of $9.8$4.9 million. The Company also hadused cash provided byin operations of approximately $7.4$4.5 million for the twelve months ending April 30, 2025.2026. We believe that our cash on hand, together with expected cash flows from operations, are adequate to fund our operations through at least August 2026.2027.

We have goodwill on our balance sheet. If the future growth and operating results of our business are not as strong as anticipated and/or our market capitalization declines, this could impact the assumptions usedresult in calculatingan the fair valueimpairment of our goodwill. To the extent any future impairment occurs, the carrying value of our assets will be written down to an implied fair value and an impairment charge will be made to our income from continuing operations. Such an impairment charge could materially and adversely affect our operating results.

Collectively, our officers, our directors and threefour significant stockholders own or exercise voting and investment control of approximately 72%71% of our outstanding common stock as of July 21,23, 2025.2026. As a result, investors may be prevented from affecting matters involving our company, including:

Our ChiefChairman Executiveof Officerthe Board of Directors 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.

One of our wholly owned subsidiaries is based in Israel. While we do not have a physical facility located in Israel, our ChiefChairman Executiveof Officerthe Board of Directors 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. 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.

It is currently not possible to predict the duration or severity of the ongoing warwars with Iran and its proxies, or its effects on our business, operations, and financial conditions. The ongoing war is rapidly evolving and developing, andwars could disrupt our customers' business and operations. 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.

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 transactionstransactions, licensing opportunities, or capital raises.

•Other TOS Revenuerevenue includes additional clinical services provided to the Company's pharmaceutical and biotechnology customers,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 was $28.4$30.9 million and $29.4$28.4 million for the years ended April 30, 20252026 and 2024,2025, respectively, aan decreaseincrease of $1.0$2.5 million or 3.4%. Cost of oncology revenue is comprised primarily of expenses for mice, laboratory supplies, compensation, and outsourced lab services.8.8%. The reduction from prior yearincrease was primarily driven by lowerhigher compensation,outsourced suchlaboratory ascosts overtime,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 lab supplyassociated costs duefor tofiscal operational improvements, along with a decrease in outsourced lab services.2027.

Research and development expense was $6.8$9.1 million and $9.5$6.8 million for the years ended April 30, 20252026 and 2024,2025, respectively, aan decreaseincrease of $2.7$2.3 million or 28.5%.33.1%.

Sales and marketing expense wasincreased $7.5$1.8 million andor $7.1 million23.5% for the yearsyear ended April 30, 20252026 andcompared 2024,to respectively,the anprior increase of $481,000 or 6.8%.year. The increase was mainlyprimarily duedriven toby an increase inhigher compensation costs includingassociated with the expansion of the DataCompany's Licensecommercial dealsorganization, team.including personnel supporting both its pharmacology services and data licensing businesses.

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, 20252026 and 2024,2025, the Company had net income of approximately $4.7 million and a net loss of approximately $7.3$1.2 million and net income of approximately $4.7 million, respectively. As of April 30, 2025,2026, the Company had an accumulated deficit of approximately $79.9$81.1 million, negative working capital of $1.5 million$703,000 and cash of $9.8$4.9 million. For the twelve months ended April 30, 2025,2026, the Company realizedused cash flow from operations of approximately $7.4$4.5 million. Despite our negative working capital at this date,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 2026.2027. 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.

Net cash used in investing activities was $389,000$540,000 and $836,000$389,000 for the years ended April 30, 20252026 and 2024,2025, 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.

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. Net cash used in financing activities was $527,000 for the year ended April 30, 2024. Cash flows provided by financing activities in both 2026 and 2025 was primarilygenerated from the proceeds fromof stock option exercises offset by financing lease payments. Net cash used in financing activities for 2024 was for the repurchase of common stock per our stock buyback program and financing lease payments and was partially offset by stock option exercise proceeds.

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 now 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.

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. We report cash flows resulting from tax deductions in excess of the compensation cost recognized from those options (excess tax benefits) as financing cash flows when the cash tax benefit is received.

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, 2025,2024, with early adoption permitted. The Company isadopted this ASU as of May 1, 2025, and it has been included in the processrequired ofdisclosures completingin the assessment of the impact that the adoption of this ASU will have on itsour financial statements,statements which is not expected to be material.since.

As a smaller reporting company under Rule 12-212b-2 of the Exchange Act, we are not required to include risk factors in this Report. However, as of the date of this Report, there have been no material changes with respect to those risk factors previously disclosed in our 20252026 Annual Report. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks could arise that may also affect our business. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

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 ninethree months ended JanuaryJuly 31, 2026 and 2025, the Company had a net losslosses of $508,000$426,000 and net income of $6.5 million,$466,000, respectively. As of JanuaryJuly 31, 2026, the Company had an accumulated deficit of approximately $80.4$81.5 million, negative working capital of $492,000$563,000 and cash of $7.1$4.4 million. For the ninethree months ended JanuaryJuly 31, 2026, the Company used cash flow in operations of approximately $2.5 million.$492,000. Despite our negative working capital at this date and cash used in operations for the period, we believe that our cash on hand, together with expected cash flows from operations, are adequate to fund operations through at least MarchSeptember 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.

Oncology revenue, primarily derived from research services, totaled $16.6$15.2 million for the three months ended JanuaryJuly 31, 2026, compared to $17.0 million for the same period in 2025, a decrease of $480,000 or 2.8%. Oncology revenue, primarily derived from research services, totaled $45.6 million for the nine months ended January 31, 2026, compared to $44.6$14.0 million for the same period in 2025, an increase of $1.0$1.2 million or 2.2%.8.8%.

Cost of oncology revenue increaseddecreased $2.2 million$461,000 or 33.5%5.8% to $8.8$7.5 million for the three months ended JanuaryJuly 31, 2026, as compared to $6.6 million in the prior year period. For the nine months ended January 31, 2026, cost of oncology revenue increased $3.0 million or 14.1% to $24.1 million, as compared to $21.1$8.0 million in the prior year period. The increasesdecrease for both periods werewas primarily attributable to lower outsourced laboratory services,service costs, including more than $2.0 million of radiolabeling work performed by third-party laboratorieslaboratories, duringpartially offset by higher royalty costs associated with the currentincrease quarter.in Management expects that as this radiolabeling work transitions into Champions’ laboratories over the coming quarters, the Company will benefit from a more favorable cost structure.revenue.

Sales and marketing expenses were $2.7$3.1 million for the three months ended JanuaryJuly 31, 2026, compared to $1.8$1.9 million for the same period in 2025, an increase of $860,000 or 47.6%. For the nine months ended January 31, 2026 sales and marketing expenses were $6.5 million, compared to $5.2 million for the prior year period, an increase of $1.3$1.2 million or 24.5%.66.6%. The increasesincrease for both periods werewas primarily driven by higher compensation expense associated with the expansion of the Company’s commercial organization, including personnel supporting both the Company’s core research services business and its data licensing initiatives. Sales and marketing expenses are expected to remain elevated as the Company continues to invest in commercial capabilities to support these growth initiatives.

General and administrative expenses were $3.0$2.7 million for the three months ended JanuaryJuly 31, 2026, compared to $2.4$2.6 million for the same period in 2025, an increase of $577,000,$103,000, or 24.1%. For the nine months ended January 31, 2026, general and administrative expenses were $8.5 million compared to $6.8 million for the same period in 2025 , an increase of $1.7 million, or 25.0%.4.0%. General and administrative expenses primarily consist of compensation, insurance, professional fees, IT infrastructure, and depreciation and amortization. The increasesincrease for both periods werewas primarily attributable to higher compensation expenses associated with executive leadership changes andmade increasedin the second quarter of fiscal 2026 offset by a decrease in IT infrastructure costs supporting the Company’s investment in its data business.costs.

For the ninethree months ended JanuaryJuly 31, 2026, net cash used in operating activities was $2.5 million.$492,000. The use of cash was primarily driven by athe decreasenet inloss deferredfor revenue,the which reflects lower upfront billings.quarter. For the ninethree months ended JanuaryJuly 31, 2025, net cash provided by operating activities was $518,000.$600,000. The cash provided by operating activities in the prior year period was primarilysupported dueby toreceivables incomeconversion fromand operationsnormal working capital activity, partially offset by changesa inquarterly ournet working capital accounts in the ordinary course of business.loss.

Net cash used in investing activities for the ninethree months ended JanuaryJuly 31, 2026 and 2025 was approximately $302,000$55,000 and $136,000.$46,000. Cash used in investing activities was for the purchases of lab and computer equipment.

Net cash provided by financing activities was $118,000$33,000 for the ninethree months ended JanuaryJuly 31, 2026 resulting from proceeds received for stock option exercises, partially offset by financing lease payments. Net cash providedused byin financing activities was $202,000$14,000 for the ninethree months ended JanuaryJuly 31, 2025, resulting from proceeds received for stock option exercises, partially offset by financing lease payments.

There have been no changes to our critical accounting policies during the ninethree months ended JanuaryJuly 31, 2026. Critical accounting policies and the significant estimates made in accordance with such policies are regularly discussed with our Audit Committee. Those policies are discussed under “Critical Accounting Policies” in “Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” as well as in our Condensed Consolidated Financial Statements and the footnotes thereto, each included in our 20252026 Annual Report.