##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q/A
 (AMENDMENT NO. 1)
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended October 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 0-17263
 CHAMPIONS BIOTECHNOLOGY, INC.
  Delaware
    
    52-1401755(State or other jurisdiction of 
organization)
    
    (I.R.S. Employer
Identification No.)
 855 N. Wolfe Street, Suite 619, Baltimore, MD
    
    21205(Address of principal executive offices)
    
    (Zip code)
 (Registrants telephone number, including area code)
 o þ
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
 Yes o No þ




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Explanatory Note:
   Background:
    Share Based Payment Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or
in Conjunction with Selling, Goods or Services
   
  2




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##### 



CHAMPIONS BIOTECHNOLOGY, INC.  FORM 10-Q/A   INDEX
 PART I. Financial InformationItem 1. Financial StatementsCondensed Consolidated Balance Sheets as of October 31, 2008 (Unaudited) and April 30, 2008 (Audited)
    
    
    4Condensed Consolidated Statements of Operations
for the six months and three months ended October 31, 2008 and 2007 (Unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the
six months ended October 31, 2008 and 2007 (Unaudited)
    
    
    6Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    7-15Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16-19Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    19Item 4. Controls and Procedures
    
    
    19PART II. Other InformationItem 1. Legal Proceedings
    
    
    20Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    20Item 3. Defaults Upon Senior Securities
    
    
    20Item 4. Submission of Matters to a Vote of Security Holders
    
    
    20Item 5. Other Information
    
    
    20Item 6. Exhibits
    
    
    20Signatures
    
    
    21Exhibit 31.1Exhibit 31.2Exhibit 32.1
   3




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##### Table of Contents



PART I
 
 Item 1.
    
    Financial Statements
 CHAMPIONS BIOTECHNOLOGY, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 October 31, 2008
    
    
    April 30, 2008(Restated)
    
    
    (Restated)(Unaudited)
    
    
    (Audited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    3,052,558
    
    
    $
    3,709,136Accounts receivable
    
    
    77,091
    
    
    
    Prepaid expenses
    
    
    152,242
    
    
    
    52,873Prepaid contract expenses
    
    
    43,374
    
    
    
    Total Current Assets
    
    
    3,325,265
    
    
    
    3,762,009Intangibles assets
    
    
    236,531
    
    
    
    227,465Goodwill
    
    
    661,909
    
    
    
    661,909TOTAL ASSETS
    
    $
    4,223,705
    
    
    $
    4,651,383LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable
    
    $
    307,828
    
    
    $
    147,971Deferred revenue
    
    
    461,838
    
    
    
    504,622Other accrued expenses
    
    
    
    
    
    
    361,275Total current liabilities
    
    
    769,666
    
    
    
    1,013,868COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITYPreferred stock, $10 par value; 56,075 shares authorized;
0 shares issued and outstandingCommon stock, $.001 par value; 50,000,000 shares authorized;
33,272,718 and 33,247,718 shares issued and outstanding at
October 31, 2008 and April 30, 2008, respectively
    
    
    33,273
    
    
    
    33,248Additional paid-in capital
    
    
    11,227,330
    
    
    
    11,119,343Accumulated deficit
    
    
    (7,806,564
    )
    
    
    (7,515,076
    )Total stockholders equity
    
    
    3,454,039
    
    
    
    3,637,515TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    4,223,705
    
    
    $
    4,651,383
   4




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CHAMPIONS BIOTECHNOLOGY, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 FOR THE SIX MONTHS AND THREE MONTHS ENDED OCTOBER 31, 2008 AND 2007 (UNAUDITED)
 Six Months Ended October 31,
    
    
    Three Months Ended October 31,2008
    
    
    2007
    
    
    2008
    
    
    2007(Restated)
    
    
    (Restated)
    
    
    (Restated)
    
    
    (Restated)REVENUESPersonalized oncology and preclinical contract revenue
    
    $
    1,717,289
    
    
    $
    250,000
    
    
    $
    1,044,172
    
    
    $
    Total revenues
    
    
    1,717,289
    
    
    
    250,000
    
    
    
    1,044,172
    
    
    
    OPERATING EXPENSESResearch and development
    
    
    636,567
    
    
    
    105,910
    
    
    
    419,404
    
    
    
    30,910Cost of personalized oncology and preclinical contract revenue
    
    
    718,186
    
    
    
    80,562
    
    
    
    458,586
    
    
    
    General and administrative
    
    
    699,853
    
    
    
    617,334
    
    
    
    352,176
    
    
    
    466,796Total operating expenses
    
    
    2,054,606
    
    
    
    803,806
    
    
    
    1,230,166
    
    
    
    497,796OPERATING LOSS
    
    
    (337,317
    )
    
    
    (553,806
    )
    
    
    (185,994
    )
    
    
    (497,796
    )OTHER INCOMEInterest income
    
    
    45,829
    
    
    
    9,994
    
    
    
    25,113
    
    
    
    4,635LOSS BEFORE TAXES
    
    
    (291,488
    )
    
    
    (543,812
    )
    
    
    (160,881
    )
    
    $
    (493,071
    )Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NET LOSS
    
    $
    (291,488
    )
    
    $
    (543,812
    )
    
    $
    (160,881
    )
    
    $
    (493,071
    )Loss per common share:Basic and diluted
    
    $
    (0.01
    )
    
    $
    (0.02
    )
    
    $
    (0.00
    )
    
    $
    (0.02
    )Shares used in calculating loss per common share:Basic and diluted
    
    
    33,270,816
    
    
    
    31,233,353
    
    
    
    33,272,718
    
    
    
    31,624,658
   5




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CHAMPIONS BIOTECHNOLOGY, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE SIX MONTHS ENDED OCTOBER 31, 2008 AND 2007 (UNAUDITED)
 2008
    
    
    2007(Restated)
    
    
    (Restated)CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (291,488
    )
    
    $
    (543,812
    )Adjustments to reconcile net (loss) to net cash (used in) operating activities:Stock based compensation expense
    
    
    100,512
    
    
    
    470,104Changes in:(Increase) in accounts receivable
    
    
    (77,091
    )
    
    
    (Increase) in prepaid expenses
    
    
    (99,368
    )
    
    
    (Increase) in prepaid contract expenses
    
    
    (43,374
    )
    
    
    Increase (decrease) in accounts payable
    
    
    159,858
    
    
    
    (7,561
    )(Decrease) in deferred revenue
    
    
    (42,785
    )
    
    
    (Decrease) increase in other accrued expenses
    
    
    (361,275
    )
    
    
    15,743Net cash (used in) operating activities
    
    
    (655,011
    )
    
    
    (65,526
    )CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of intangible assets
    
    
    (9,067
    )
    
    
    Cash received in Biomerk, Inc. acquisition
    
    
    
    
    
    
    471,377Net cash (used in) provided by investing activities
    
    
    (9,067
    )
    
    
    471,377CASH FLOWS FROM FINANCING ACTIVITIESPayment of officers loan payable
    
    
    
    
    
    
    (43,693
    )Proceeds from exercise of options
    
    
    7,500
    
    
    
    Net cash provided by (used in) financing activities
    
    
    7,500
    
    
    
    (43,693
    )Net (decrease) increase in cash and cash equivalents
    
    
    (656,578
    )
    
    
    362,158CASH AND CASH EQUIVALENTS  BEGINNING OF PERIOD
    
    
    3,709,136
    
    
    
    3,758CASH AND CASH EQUIVALENTS  END OF PERIOD
    
    $
    3,052,558
    
    
    $
    365,916SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the period for:Interest paid
    
    $
    
    
    
    $
    Income tax paid
    
    $
    
    
    
    $
    SUPPLEMENTAL SCHEDULE OF NON-CASH FLOW INVESTING AND FINANCING ACTIVITIES:In May 2007, the Company issued 4,000,000 shares for 100% of Biomerk, Inc.
   6




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CHAMPIONS BIOTECHNOLOGY, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 OCTOBER 31, 2008
 (UNAUDITED)
 (1) ORGANIZATION AND BASIS OF PRESENTATION
  Impact of Recent Accounting Pronouncements
 Fair Value
Measurement,
 The Fair Value
Option for Financial Assets and Liabilities
 Non-controlling Interests in Consolidated Financial
Statements: an amendment of ARB No. 51
 Disclosures about Derivative Instruments and Hedging
Activities: an amendment of FASB Statement No. 133
 The Hierarchy of Generally Accepted Accounting
Principles The Meaning of Present Fairly in Conformity with Generally Accepted
Accounting Principles
 Reclassifications
   7




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(2) RESTATEMENT OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
   Share Based Payment Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services Accounting Recognition for Certain Transactions
involving Equity Instruments Granted to Other Than Employees
  CONDENSED CONSOLIDATED BALANCE SHEET
As of October 31, 2008
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedCurrent assets:Cash and cash equivalents
    
    $
    3,052,558
    
    
    $
    
    
    
    $
    3,052,558Accounts receivable
    
    
    77,091
    
    
    
    
    
    
    
    77,091Prepaid expenses
    
    
    152,242
    
    
    
    
    
    
    
    152,242Prepaid contract expenses
    
    
    43,374
    
    
    
    
    
    
    
    43,374Total current assets
    
    
    3,325,265
    
    
    
    
    
    
    
    3,325,265Intangible assets
    
    
    236,531
    
    
    
    
    
    
    
    236,531Goodwill
    
    
    661,909
    
    
    
    
    
    
    
    661,909Total assets
    
    $
    4,223,705
    
    
    $
    
    
    
    $
    4,223,705Current liabilities:Accounts payable
    
    $
    307,828
    
    
    $
    
    
    
    $
    307,828Deferred revenue
    
    
    461,838
    
    
    
    
    
    
    
    461,838Total current liabilities
    
    
    769,666
    
    
    
    
    
    
    
    769,666Commitments and contingenciesStockholders equity:Common stock
    
    
    33,273
    
    
    
    
    
    
    
    33,273Additional paid-in capital
    
    
    11,643,233
    
    
    
    (415,903
    )
    
    
    11,227,330Accumulated deficit
    
    
    (7,467,619
    )
    
    
    (338,945
    )
    
    
    (7,806,564
    )Prepaid consulting fees
    
    
    (754,848
    )
    
    
    754,848
    
    
    
    Total stockholders equity
    
    
    3,454,039
    
    
    
    
    
    
    
    3,454,039Total liabilities and stockholders equity
    
    $
    4,223,705
    
    
    $
    
    
    
    $
    4,223,705
  8




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CONDENSED CONSOLIDATED BALANCE SHEET
As of April 30, 2008
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedCurrent assets:Cash and cash equivalents
    
    $
    3,709,136
    
    
    $
    
    
    
    $
    3,709,136Prepaid expenses
    
    
    52,873
    
    
    
    
    
    
    
    52,873Total current assets
    
    
    3,762,009
    
    
    
    
    
    
    
    3,762,009Intangible assets
    
    
    227,465
    
    
    
    
    
    
    
    227,465Goodwill
    
    
    661,909
    
    
    
    
    
    
    
    661,909Total assets
    
    $
    4,651,383
    
    
    $
    
    
    
    $
    4,651,383Current liabilities:Accounts payable
    
    $
    147,971
    
    
    $
    
    
    
    $
    147,971Deferred revenue
    
    
    504,622
    
    
    
    
    
    
    
    504,622Other accrued expenses
    
    
    361,275
    
    
    
    
    
    
    
    361,275Total current liabilities
    
    
    1,013,868
    
    
    
    
    
    
    
    1,013,868Commitments and contingenciesStockholders equity:Common stock
    
    
    33,248
    
    
    
    
    
    
    
    33,248Additional paid-in capital
    
    
    11,715,182
    
    
    
    (595,839
    )
    
    
    11,119,343Accumulated deficit
    
    
    (7,068,547
    )
    
    
    (446,529
    )
    
    
    (7,515,076
    )Prepaid consulting fees
    
    
    (1,042,368
    )
    
    
    1,042,368
    
    
    
    Total stockholders equity
    
    
    3,637,515
    
    
    
    
    
    
    
    3,637,515Total liabilities and stockholders equity
    
    $
    4,651,383
    
    
    $
    
    
    
    $
    4,651,383
  9




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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended October 31, 2008
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedOperating revenue:Personalized oncoloy services and
and preclinical contract review
    
    $
    1,717,289
    
    
    $
    
    
    
    $
    1,717,289Total operating revenue
    
    
    1,717,289
    
    
    
    
    
    
    
    1,717,289Operating expenses:Research and development
    
    
    636,567
    
    
    
    
    
    
    
    636,567Cost of personalized oncology services
and preclinical contract review
    
    
    718,186
    
    
    
    
    
    
    
    718,186General and administrative
    
    
    807,437
    
    
    
    (107,584
    )
    
    
    699,853Total operating expenses
    
    
    2,162,190
    
    
    
    (107,584
    )
    
    
    2,054,606Operating loss
    
    
    (444,901
    )
    
    
    107,584
    
    
    
    (337,317
    )Other income:Interest income
    
    
    45,829
    
    
    
    
    
    
    
    45,829Loss before income taxes
    
    
    (399,072
    )
    
    
    107,584
    
    
    
    (291,488
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (399,072
    )
    
    $
    107,584
    
    
    $
    (291,488
    )Loss per common share:Basic and diluted
    
    $
    (0.01
    )
    
    $
    0.00
    
    
    $
    (0.01
    )Shares used
in calculating loss per common share:Basic and diluted
    
    
    33,270,816
    
    
    
    33,270,816
    
    
    
    33,270,816
  10




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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended October 31, 2007
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedOperating revenue:Personalized oncoloy services
    
    $
    250,000
    
    
    $
    
    
    
    $
    250,000Total operating revenue
    
    
    250,000
    
    
    
    
    
    
    
    250,000Operating expenses:Research and development
    
    
    105,910
    
    
    
    
    
    
    
    105,910Cost of personalized oncology services
    
    
    80,562
    
    
    
    
    
    
    
    80,562General and administrative
    
    
    210,517
    
    
    
    406,817
    
    
    
    617,334Total operating expenses
    
    
    396,989
    
    
    
    406,817
    
    
    
    803,806Operating loss
    
    
    (146,989
    )
    
    
    (406,817
    )
    
    
    (553,806
    )Other income:Interest income
    
    
    9,994
    
    
    
    
    
    
    
    9,994Loss before income taxes
    
    
    (136,995
    )
    
    
    (406,817
    )
    
    
    (543,812
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (136,995
    )
    
    $
    (406,817
    )
    
    $
    (543,812
    )Loss per common share:Basic and diluted
    
    $
    (0.00
    )
    
    $
    (0.02
    )
    
    $
    (0.02
    )Shares used in calculating loss
per common share:Basic and diluted
    
    
    31,233,353
    
    
    
    31,233,353
    
    
    
    31,233,353
  11




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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended October 31, 2008
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedOperating revenue:Personalized oncoloy services and
preclinical contract review
    
    $
    1,044,172
    
    
    $
    
    
    
    $
    1,044,172Total operating revenue
    
    
    1,044,172
    
    
    
    
    
    
    
    1,044,172Operating expenses:Research and development
    
    
    419,404
    
    
    
    
    
    
    
    419,404Cost of personalized oncology services
and preclinical contract review
    
    
    458,586
    
    
    
    
    
    
    
    458,586General and administrative
    
    
    422,885
    
    
    
    (70,709
    )
    
    
    352,176Total operating expenses
    
    
    1,300,875
    
    
    
    (70,709
    )
    
    
    1,230,166Operating loss
    
    
    (256,703
    )
    
    
    70,709
    
    
    
    (185,994
    )Other income:Interest income
    
    
    25,113
    
    
    
    
    
    
    
    25,113Loss before income taxes
    
    
    (231,590
    )
    
    
    70,709
    
    
    
    (160,881
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (231,590
    )
    
    $
    70,709
    
    
    $
    (160,881
    )Loss per common share:Basic and diluted
    
    $
    (0.01
    )
    
    $
    0.01
    
    
    $
    (0.00
    )Shares used in calculating loss per
common share:Basic and diluted
    
    
    33,272,718
    
    
    
    33,272,718
    
    
    
    33,272,718
 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended October 31, 2007
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedOperating expenses:Research and development
    
    $
    30,910
    
    
    $
    
    
    
    $
    30,910General and administrative
    
    
    119,288
    
    
    
    347,508
    
    
    
    466,796Total operating expenses
    
    
    150,198
    
    
    
    347,508
    
    
    
    497,706Operating loss
    
    
    (150,198
    )
    
    
    (347,508
    )
    
    
    (497,706
    )Other income:Interest income
    
    
    4,635
    
    
    
    
    
    
    
    4,635Loss before income taxes
    
    
    (145,563
    )
    
    
    (347,508
    )
    
    
    (493,071
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (145,563
    )
    
    $
    (347,508
    )
    
    $
    (493,071
    )Loss per common share:Basic and diluted
    
    $
    (0.00
    )
    
    $
    (0.02
    )
    
    $
    (0.02
    )Shares used in calculating loss per
common share:Basic and diluted
    
    
    31,624,658
    
    
    
    31,624,658
    
    
    
    31,624,658
  12




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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended October 31, 2008
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedCash flows from operating activities:Net loss
    
    $
    (399,072
    )
    
    $
    107,584
    
    
    $
    (291,488
    )Adjustments to reconcile net loss to net
cash (used in) operating activities:Share based compensation expense
    
    
    208,096
    
    
    
    (107,584
    )
    
    
    100,512Changes in operating assets and liabilities:(Increase) in accounts receivable
    
    
    (77,091
    )
    
    
    
    
    
    
    (77,091
    )(Increase) in prepaid expenses
    
    
    (99,368
    )
    
    
    
    
    
    
    (99,368
    )(Increase) in prepaid contract expenses
    
    
    (43,374
    )
    
    
    
    
    
    
    (43,374
    )Increase in accounts payable
    
    
    159,858
    
    
    
    
    
    
    
    159,858(Decrease) in deferred revenue
    
    
    (42,785
    )
    
    
    
    
    
    
    (42,785
    )(Decrease) in other accrued expenses
    
    
    (361,275
    )
    
    
    
    
    
    
    (361,275
    )Net cash (used in) operating activities
    
    
    (655,011
    )
    
    
    
    
    
    
    (655,011
    )Cash flows from investing activities:Purchase of intangible assets
    
    
    (9,067
    )
    
    
    
    
    
    
    (9,067
    )Net (used in) investing activities
    
    
    (9,067
    )
    
    
    
    
    
    
    (9,067
    )Cash flows from financing activities:Proceeds from exercise of stock warrants
    
    
    7,500
    
    
    
    
    
    
    
    7,500Net cash provided by financing activities
    
    
    7,500
    
    
    
    
    
    
    
    7,500Net decrease in cash and cash equivalents
    
    
    (656,578
    )
    
    $
    
    
    
    
    (656,578
    )Cash and cash equivalents  Beginning of period
    
    
    3,709,136
    
    
    
    
    
    
    
    3,709,136Cash and cash equivalents  End of period
    
    $
    3,052,558
    
    
    
    
    
    
    $
    3,052,558
  13




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##### Table of Contents



CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended October 31, 2007
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedCash flows from operating activities:Net loss
    
    $
    (136,995
    )
    
    $
    (406,817
    )
    
    $
    (543,812
    )Adjustments to reconcile net loss to net
cash provided by operating activities:Share based compensation expense
    
    
    63,287
    
    
    
    406,817
    
    
    
    470,104Changes in operating assets and liabilities:(Decrease) in accounts payable
    
    
    (7,561
    )
    
    
    
    
    
    
    (7,561
    )Increase in other accrued expenses
    
    
    15,743
    
    
    
    
    
    
    
    15,743Net cash (used in) operating activities
    
    
    (65,526
    )
    
    
    
    
    
    
    (65,526
    )Cash flows from investing activities:Cash received in Biomerk, Inc. acquisition
    
    
    471,377
    
    
    
    
    
    
    
    471,377Net provided by investing activities
    
    
    471,377
    
    
    
    
    
    
    
    471,377Cash flows from financing activities:Payment of officers loan payable
    
    
    (43,693
    )
    
    
    
    
    
    
    (43,693
    )Net cash (used in) financing activities
    
    
    (43,693
    )
    
    
    
    
    
    
    (43,693
    )Net decrease in cash and cash equivalents
    
    
    362,158
    
    
    $
    
    
    
    
    362,158Cash and cash equivalents  Beginning of period
    
    
    3,758
    
    
    
    
    
    
    
    3,758Cash and cash equivalents  End of period
    
    $
    365,916
    
    
    
    
    
    
    $
    365,916
 (3) NET (LOSS) PER SHARE
   October 31,
    
    
    October 31,2008
    
    
    2007Net (loss)
    
    $
    (291,488
    )
    
    $
    (543,812
    )Weighted-average common shares
outstanding (basic and diluted)
    
    
    33,270,816
    
    
    
    31,233,353
  14




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##### Table of Contents



(4) COMMITMENTS AND CONTINGENCIES
 Operating leases
   (5) SHARE BASED COMPENSATION
  (6) PROVISION FOR INCOME TAXES
   October 31,
    
    
    April 30,2008
    
    
    2008Deferred tax asset
    
    $
    2,732,297
    
    
    $
    2,630,277Less: valuation allowance
    
    
    (2,732,297
    )
    
    
    (2,630,277
    )Net deferred tax asset
    
    $
    -0-
    
    
    $
    -0-
  (7) RELATED PARTY TRANSACTIONS
   15




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    Restatement
    Overview
    16




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##### Table of Contents



Results of Operations
  Three Months Ended October 31, 2008 and 2007
 Revenues.
  Expenses (Restated).
 
    
    Research and development expenses. For the three months ended October 31,
2008, research and development expenses were $419,404, compared to $30,910 for the
three months ended October 31, 2007. The increase of $388,494 or 1,256% for the three
months ended October 31, 2008 was primarily a result of the increase in Tumorgrafts
acquired and their propagation, characterization and development for utilization in
preclinical studies. Increases also resulted from development activities directed
toward building our drug pipeline and evaluating synergistic technologies as well as
preclinical development expenses for the Companys lead oncology drug candidate, SG410.
 
    
    Cost of personalized oncology and preclinical contract services. For the
three months ended October 31, 2008, the costs of personalized oncology and preclinical
contract services were $458,586, compared to zero for the corresponding 2007 period.
The fiscal 2008 costs were primarily for conducting the Companys personalized oncology
services, including medical information panels and the development and testing of
personalized Tumorgrafts, but also include costs related to preclinical evaluation
studies in progress under contract.
 
    
    General and administrative expenses (Restated). For the three months ended
October 31, 2008, general and administrative expenses were $352,176, compared to
$466,796 for the three months ended October 31, 2007, a decrease of $114,620 or 25%.
Share based compensation decreased by $355,162 from $393,957 for the three months ended
October 31, 2007 to $38,795 for the three months ended October 31, 2008. General and
administrative expenses other than share based compensation were $313,381 for the three
months ended October 31, 2008 compared to $72,839 for the three months ended October 31,
2007. The increase of $240,542 or 330% was due to increased expenses as we built and
grew our infrastructure including the addition of personnel, consultants and other
initiatives to facilitate current and future growth.
  17




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##### Table of Contents



Net Loss (Restated).
 Six Months Ended October 31, 2008 and 2007
 Revenues.
  Expenses (Restated).
 
    
    Research and development expenses. For the six months ended October 31,
2008, research and development expenses were $636,567, compared to $105,910 for the
corresponding 2007 period. The increase of $530,657 or 501% was primarily a result of
the increase in Tumorgrafts acquired and their propagation, characterization and
development for utilization in preclinical studies. Increases also resulted from
development activities directed toward building our drug pipeline and evaluating
synergistic technologies as well as preclinical development expenses for the Companys
oncology drug candidate, SG410.
 
    
    Cost of personalized oncology and preclinical contract services. For the
six months ended October 31, 2008, the costs of personalized oncology and preclinical
contract services were $718,186, compared to $80,562 for the six months ended October
31, 2007, an increase of $637,624 or 791%. These costs were primarily for conducting
the Companys personalized oncology services, including medical information panels and
the development and testing of personalized tumorgrafts, but also include costs related
to preclinical evaluation studies in progress under contract.
 
    
    General and administrative expenses (Restated). For the six months ended
October 31, 2008, general and administrative expenses were $699,853, compared to
$617,334 for the six months ended October 31, 2007, an increase of $82,519 or 13%. The
increase is primarily due to higher expenses in 2008 as we built and grew our
infrastructure including the addition of personnel, consultants and other initiatives
to facilitate current and future growth. The overall increase was partially offset by
lower share based compensation expense for the six months ended October 31, 2008
compared to the 2007 six month period.
  Net Loss (Restated).
 Financial Condition and Liquidity
   18




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##### Table of Contents



Critical Accounting Policies
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4.
    
    Controls and Procedures
       Remediation of Material Weaknesses
       19




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3.
    
    Defaults Upon Senior Securities
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
  
 Item 5.
    
    Other Information
  
 Item 6 Exhibits
 Exhibit No.31.1
    
    
    Rule 13a-14(a)/15d-14(a) Certification of President and Principal Executive Officer31.2
    
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer32.1
    
    
    Section 1350 Certifications
  20




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##### Table of Contents



SIGNATURES
  CHAMPIONS BIOTECHNOLOGY, INC.(Registrant)Date: August 26, 2009
    By:
    /s/ Douglas D. BurkettDouglas D. BurkettPresident and Principal
Executive OfficerBy:
    /s/ Mark R. SchonauMark R. SchonauChief Financial Officer  21




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##### Table of Contents



ExhibitNo.
    
    Description31.1
    
    

Rule 13a-14(a)/15d-14(a)
Certification of President and Principal Executive Officer31.2
    
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer32.1
    
    
    Section 1350 Certifications
  22