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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q/A
 (AMENDMENT NO. 2)
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended January 31, 2009
 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)
 (410) 369-0365
 o þ
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 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 Revenue
Arrangements with Multiple Deliverables
  2




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3




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CHAMPIONS BIOTECHNOLOGY, INC.
FORM 10-Q/A
 INDEX
 PART I. Financial InformationItem 1. Financial StatementsCondensed Consolidated Balance Sheets as of January 31, 2009 (Unaudited) and April 30, 2008 (Audited)
    
    
    5Condensed Consolidated Statements of Operations for the nine months and three months ended January 31, 2009 and 2008 (Unaudited)
    
    
    6Condensed Consolidated Statements of Cash Flows for the nine months ended January 31, 2009 and 2008 (Unaudited)
    
    
    7Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    8-18Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19-22Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    22Item 4. Controls and Procedures
    
    
    22-23PART II. Other InformationItem 1. Legal Proceedings
    
    
    23Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    23Item 3. Defaults Upon Senior Securities
    
    
    23Item 4. Submission of Matters to a Vote of Security Holders
    
    
    23Item 5. Other Information
    
    
    23Item 6. Exhibits
    
    
    23Signatures
    
    
    24Exhibit 31.1Exhibit 31.2Exhibit 32.1
   4




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PART I
 
 Item 1.
    
    Financial Statements
 CHAMPIONS BIOTECHNOLOGY, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 January 31, 2009
    
    
    April 30, 2008(Restated)
    
    
    (Restated)(Unaudited)
    
    
    (Audited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    2,624,866
    
    
    $
    3,709,136Certificate of deposit
    
    
    1,005,319
    
    
    
    Prepaid expenses
    
    
    637,585
    
    
    
    52,873Prepaid contract expenses
    
    
    43,374
    
    
    
    Total Current Assets
    
    
    4,311,144
    
    
    
    3,762,009Intangibles assets
    
    
    265,798
    
    
    
    227,465Goodwill
    
    
    661,909
    
    
    
    661,909TOTAL ASSETS
    
    $
    5,238,851
    
    
    $
    4,651,383LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable
    
    $
    695,548
    
    
    $
    147,971Deferred revenue
    
    
    1,429,985
    
    
    
    504,622Other accrued expenses
    
    
    
    
    
    
    361,275Total current liabilities
    
    
    2,125,533
    
    
    
    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
January 31, 2009 and April 30, 2008, respectively
    
    
    33,273
    
    
    
    33,248Additional paid-in capital
    
    
    11,450,381
    
    
    
    11,119,343Accumulated deficit
    
    
    (8,370,336
    )
    
    
    (7,515,076
    )Total stockholders equity
    
    
    3,113,318
    
    
    
    3,637,515TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    5,238,851
    
    
    $
    4,651,383
   5




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CHAMPIONS BIOTECHNOLOGY, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS AND THREE MONTHS ENDED JANUARY 31, 2009 AND 2008 (UNAUDITED)
 Nine Months Ended January 31,
    
    
    Three Months Ended January 31,2009
    
    
    2008
    
    
    2009
    
    
    2008(Restated)
    
    
    (Restated)
    
    
    (Restated)
    
    
    (Restated)REVENUESPersonalized oncology and preclinical contract revenue
    
    $
    2,700,589
    
    
    $
    874,940
    
    
    $
    983,300
    
    
    $
    624,940Total revenues
    
    
    2,700,589
    
    
    
    874,940
    
    
    
    983,300
    
    
    
    624,940OPERATING EXPENSESResearch and development
    
    
    1,071,841
    
    
    
    105,910
    
    
    
    435,274
    
    
    
    Cost of personalized oncology and preclinical contract revenue
    
    
    1,387,796
    
    
    
    281,784
    
    
    
    669,610
    
    
    
    201,222General and administrative
    
    
    1,163,089
    
    
    
    730,602
    
    
    
    463,236
    
    
    
    113,268Total operating expenses
    
    
    3,622,726
    
    
    
    1,118,296
    
    
    
    1,568,120
    
    
    
    314,490OPERATING INCOME (LOSS)
    
    
    (922,137
    )
    
    
    (243,356
    )
    
    
    (584,820
    )
    
    
    310,450OTHER INCOMEInterest income
    
    
    66,877
    
    
    
    16,058
    
    
    
    21,048
    
    
    
    6,064INCOME (LOSS) BEFORE TAXES
    
    
    (855,260
    )
    
    
    (227,298
    )
    
    
    (563,772
    )
    
    $
    316,514Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NET INCOME (LOSS)
    
    $
    (855,260
    )
    
    $
    (227,298
    )
    
    $
    (563,772
    )
    
    $
    316,514Income (loss) per common share:Basic and diluted
    
    $
    (0.03
    )
    
    $
    (0.01
    )
    
    $
    (0.02
    )
    
    $
    0.01Shares used in calculating income (loss) per common share:Basic
    
    
    33,271,450
    
    
    
    31,386,454
    
    
    
    33,272,718
    
    
    
    31,692,654Diluted
    
    
    33,271,450
    
    
    
    31,386,454
    
    
    
    33,272,718
    
    
    
    32,774,544
   6




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CHAMPIONS BIOTECHNOLOGY, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JANUARY 31, 2009 AND 2008 (UNAUDITED)
 2009
    
    
    2008(Restated)
    
    
    (Restated)CASH FLOWS FROM OPERATING ACTIVITIESNet (loss)
    
    $
    (855,260
    )
    
    $
    (227,298
    )Adjustments to reconcile net (loss) to net cash (used in) provided by operating activities:Share based compensation expense
    
    
    323,563
    
    
    
    510,259Changes in assets and liabilities:(Increase) in prepaid expenses
    
    
    (584,711
    )
    
    
    (47,466
    )(Increase) in prepaid contract expenses
    
    
    (43,374
    )
    
    
    Increase in accounts payable
    
    
    547,578
    
    
    
    61,268Increase in deferred revenue
    
    
    925,362
    
    
    
    300,000(Decrease) increase in other accrued expenses
    
    
    (361,275
    )
    
    
    15,743Net cash provided by (used in) provided by operating activities
    
    
    (48,117
    )
    
    
    612,506CASH FLOWS FROM INVESTING ACTIVITIESPurchase of certificate of deposit
    
    
    (1,005,319
    )
    
    
    Acquisition of intangible assets
    
    
    (38,334
    )
    
    
    Cash received in Biomerk, Inc. acquisition
    
    
    
    
    
    
    471,377Net cash (used in) provided by investing activities
    
    
    (1,043,653
    )
    
    
    471,377CASH FLOWS FROM FINANCING ACTIVITIESPayment of officers loan payable
    
    
    
    
    
    
    (43,693
    )Proceeds from exercise of options
    
    
    7,500
    
    
    
    Proceeds from exercise of warrants
    
    
    
    
    
    
    28,505Net cash provided by (used in) financing activities
    
    
    7,500
    
    
    
    (15,188
    )Net (decrease) increase in cash and cash equivalents
    
    
    (1,084,270
    )
    
    
    1,068,695CASH AND CASH EQUIVALENTS  BEGINNING OF PERIOD
    
    
    3,709,136
    
    
    
    3,758CASH AND CASH EQUIVALENTS  END OF PERIOD
    
    $
    2,624,866
    
    
    $
    1,072,453SUPPLEMENTAL 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.
   7




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CHAMPIONS BIOTECHNOLOGY, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2009
(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
   8




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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
 Revenue Arrangements with Multiple Deliverables
  9




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CONDENSED CONSOLIDATED BALANCE SHEET
As of January 31, 2009
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedCurrent assets:Cash and cash equivalents
    
    $
    2,624,866
    
    
    $
    
    
    
    $
    2,624,866Certificate of deposit
    
    
    1,005,319
    
    
    
    
    
    
    
    1,005,319Prepaid expenses
    
    
    408,418
    
    
    
    229,167
    
    
    
    637,585Prepaid contract expenses
    
    
    43,374
    
    
    
    
    
    
    
    43,374Total current assets
    
    
    4,081,977
    
    
    
    229,167
    
    
    
    4,311,144Intangible assets
    
    
    265,798
    
    
    
    
    
    
    
    265,798Goodwill
    
    
    661,909
    
    
    
    
    
    
    
    661,909Total assets
    
    $
    5,009,684
    
    
    $
    229,167
    
    
    $
    5,238,851Current liabilities:Accounts payable
    
    $
    695,548
    
    
    $
    
    
    
    $
    695,548Deferred revenue
    
    
    1,361,110
    
    
    
    68,875
    
    
    
    1,429,985Total current liabilities
    
    
    2,056,658
    
    
    
    68,875
    
    
    
    2,125,533Commitments and contingenciesStockholders equity:Common stock
    
    
    33,273
    
    
    
    
    
    
    
    33,273Additional paid-in capital
    
    
    11,656,583
    
    
    
    (206,202
    )
    
    
    11,450,381Accumulated deficit
    
    
    (8,090,853
    )
    
    
    (279,483
    )
    
    
    (8,370,336
    )Prepaid consulting fees
    
    
    (645,977
    )
    
    
    645,977
    
    
    
    Total stockholders equity
    
    
    2,953,026
    
    
    
    160,292
    
    
    
    3,113,318Total liabilities and stockholders equity
    
    $
    5,009,684
    
    
    $
    229,167
    
    
    $
    5,238,851
  10




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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
  11




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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended January 31, 2009
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedOperating revenue:Personalized oncoloy services and
preclinical contract review
    
    $
    2,769,464
    
    
    $
    (68,875
    )
    
    $
    2,700,589Total operating revenue
    
    
    2,769,464
    
    
    
    (68,875
    )
    
    
    2,700,589Operating expenses:Research and development
    
    
    1,144,010
    
    
    
    (72,169
    )
    
    
    1,071,841Cost of personalized oncology services
and preclinical contract review
    
    
    1,824,089
    
    
    
    (436,293
    )
    
    
    1,387,796General and administrative
    
    
    890,548
    
    
    
    272,541
    
    
    
    1,163,089Total operating expenses
    
    
    3,858,647
    
    
    
    (235,921
    )
    
    
    3,622,726Operating loss
    
    
    (1,089,183
    )
    
    
    167,046
    
    
    
    (922,137
    )Other income:Interest income
    
    
    66,877
    
    
    
    
    
    
    
    66,877Loss before income taxes
    
    
    (1,022,306
    )
    
    
    167,046
    
    
    
    (855,260
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (1,022,306
    )
    
    $
    167,046
    
    
    $
    (855,260
    )Loss per common share:Basic and diluted
    
    $
    (0.03
    )
    
    $
    0.00
    
    
    $
    (0.03
    )Shares used in calculating loss per
common share:Basic and diluted
    
    
    33,271,450
    
    
    
    33,271,450
    
    
    
    33,271,450
  12




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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended January 31, 2008
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedOperating revenue:Personalized oncoloy services
    
    $
    874,940
    
    
    $
    
    
    
    $
    874,940Total operating revenue
    
    
    874,940
    
    
    
    
    
    
    
    874,940Operating expenses:Research and development
    
    
    105,910
    
    
    
    
    
    
    
    105,910Cost of personalized oncology services
    
    
    281,784
    
    
    
    
    
    
    
    281,784General and administrative
    
    
    329,293
    
    
    
    401,309
    
    
    
    730,602Total operating expenses
    
    
    716,987
    
    
    
    401,309
    
    
    
    1,118,296Operating income (loss)
    
    
    157,953
    
    
    
    (401,309
    )
    
    
    (243,356
    )Other income:Interest income
    
    
    16,058
    
    
    
    
    
    
    
    16,058Income (loss) before income taxes
    
    
    174,011
    
    
    
    (401,309
    )
    
    
    (227,298
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    174,011
    
    
    $
    (401,309
    )
    
    $
    (227,298
    )Income (loss) per common share:Basic
    
    $
    0.01
    
    
    $
    (0.02
    )
    
    $
    (0.01
    )Diluted
    
    $
    0.01
    
    
    $
    (0.02
    )
    
    $
    (0.01
    )Shares used in calculating income (loss)
per common share:Basic
    
    
    31,386,454
    
    
    
    31,386,454
    
    
    
    31,386,454Diluted
    
    
    32,468,344
    
    
    
    31,386,454
    
    
    
    31,386,454
  13




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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended January 31, 2009
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedOperating revenue:Personalized oncoloy services and
preclinical contract review
    
    $
    1,052,175
    
    
    $
    (68,875
    )
    
    $
    983,300Total operating revenue
    
    
    1,052,175
    
    
    
    (68,875
    )
    
    
    983,300Operating expenses:Research and development
    
    
    507,443
    
    
    
    (72,169
    )
    
    
    435,274Cost of personalized oncology services
and preclinical contract review
    
    
    1,105,903
    
    
    
    (436,293
    )
    
    
    669,610General and administrative
    
    
    83,111
    
    
    
    380,125
    
    
    
    463,236Total operating expenses
    
    
    1,696,457
    
    
    
    (128,337
    )
    
    
    1,568,120Operating loss
    
    
    (644,282
    )
    
    
    59,462
    
    
    
    (584,820
    )Other income:Interest income
    
    
    21,048
    
    
    
    
    
    
    
    21,048Loss before income taxes
    
    
    (623,234
    )
    
    
    59,462
    
    
    
    (563,772
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (623,234
    )
    
    $
    59,462
    
    
    $
    (563,772
    )Loss per common share:Basic and diluted
    
    $
    (0.02
    )
    
    $
    0.00
    
    
    $
    (0.02
    )Shares used in calculating loss per
common share:Basic and diluted
    
    
    33,272,718
    
    
    
    33,272,718
    
    
    
    33,272,718
  14




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##### Table of Contents



CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended January 31, 2008
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedOperating revenue:Personalized oncoloy services
    
    $
    624,940
    
    
    $
    
    
    
    $
    624,940Total operating revenue
    
    
    624,940
    
    
    
    
    
    
    
    624,940Operating expenses:Research and development
    
    
    
    
    
    
    
    
    
    
    Cost of personalized oncology services
    
    
    201,222
    
    
    
    
    
    
    
    201,222General and administrative
    
    
    118,776
    
    
    
    (5,508
    )
    
    
    113,268Total operating expenses
    
    
    319,998
    
    
    
    (5,508
    )
    
    
    314,490Operating income
    
    
    304,942
    
    
    
    5,508
    
    
    
    310,450Other income:Interest income
    
    
    6,064
    
    
    
    
    
    
    
    6,064Income before income taxes
    
    
    311,006
    
    
    
    5,508
    
    
    
    316,514Income taxes
    
    
    
    
    
    
    
    
    
    
    Net income
    
    $
    311,006
    
    
    $
    5,508
    
    
    $
    316,514Income per common share:Basic
    
    $
    0.01
    
    
    $
    0.00
    
    
    $
    0.01Diluted
    
    $
    0.01
    
    
    $
    0.00
    
    
    $
    0.01Shares used in calculating income per
common share:Basic
    
    
    31,692,654
    
    
    
    31,692,654
    
    
    
    31,692,654Diluted
    
    
    32,774,544
    
    
    
    32,774,544
    
    
    
    32,774,544
  15




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##### Table of Contents



CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Nine Months Ended January 31, 2009
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedCash flows from operating activities:Net loss
    
    $
    (1,022,306
    )
    
    $
    167,046
    
    
    $
    (855,260
    )Adjustments to reconcile net loss to net
cash (used in) operating activities:Share based compensation expense
    
    
    330,317
    
    
    
    (6,754
    )
    
    
    323,563Changes in operating assets and liabilities:(Increase) in prepaid expenses
    
    
    (355,544
    )
    
    
    (229,167
    )
    
    
    (584,711
    )(Increase) in prepaid contract expenses
    
    
    (43,374
    )
    
    
    
    
    
    
    (43,374
    )Increase in accounts payable
    
    
    547,578
    
    
    
    
    
    
    
    547,578Increase in deferred revenue
    
    
    856,487
    
    
    
    68,875
    
    
    
    925,362(Decrease) in other accrued expenses
    
    
    (361,275
    )
    
    
    
    
    
    
    (361,275
    )Net cash (used in) operating activities
    
    
    (48,117
    )
    
    
    
    
    
    
    (48,117
    )Cash flows from investing activities:Purchase of certificate of deposit
    
    
    (1,005,319
    )
    
    
    
    
    
    
    (1,005,319
    )Purchase of intangible assets
    
    
    (38,334
    )
    
    
    
    
    
    
    (38,334
    )Net (used in) investing activities
    
    
    (1,043,653
    )
    
    
    
    
    
    
    (1,043,653
    )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
    
    
    (1,084,270
    )
    
    $
    
    
    
    
    (1,084,270
    )Cash and cash equivalents  Beginning of period
    
    
    3,709,136
    
    
    
    
    
    
    
    3,709,136Cash and cash equivalents  End of period
    
    $
    2,624,866
    
    
    
    
    
    
    $
    2,624,866
  16




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##### Table of Contents



CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Nine Months Ended January 31, 2008
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedCash flows from operating activities:Net income (loss)
    
    $
    174,011
    
    
    $
    (401,309
    )
    
    $
    (227,298
    )Adjustments to reconcile net income (loss)
to net cash provided by operating activities:Share based compensation expense
    
    
    108,950
    
    
    
    401,309
    
    
    
    510,259Changes in operating assets and liabilities:(Increase) in prepaid expenses
    
    
    (47,466
    )
    
    
    
    
    
    
    (47,466
    )Increase in accounts payable
    
    
    61,268
    
    
    
    
    
    
    
    61,268Increase in deferred revenue
    
    
    300,000
    
    
    
    
    
    
    
    300,000Increase in other accrued expenses
    
    
    15,743
    
    
    
    
    
    
    
    15,743Net cash provided by operating activities
    
    
    612,506
    
    
    
    
    
    
    
    612,506Cash 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
    )Proceeds from exercise of stock warrants
    
    
    28,505
    
    
    
    
    
    
    
    28,505Net cash (used in) financing activities
    
    
    (15,188
    )
    
    
    
    
    
    
    (15,188
    )Net decrease in cash and cash equivalents
    
    
    1,068,695
    
    
    $
    
    
    
    
    1,068,695Cash and cash equivalents  Beginning of period
    
    
    3,758
    
    
    
    
    
    
    
    3,758Cash and cash equivalents  End of period
    
    $
    1,072,453
    
    
    
    
    
    
    $
    1,072,453
 (3) NET (LOSS) PER SHARE
   January 31,
    
    
    January 31,2009
    
    
    2008Net loss
    
    $
    (855,260
    )
    
    $
    (227,298
    )Weighted-average common shares outstanding (basic and diluted)
    
    
    33,271,450
    
    
    
    31,386,454
  17




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##### Table of Contents



(4) COMMITMENTS AND CONTINGENCIES
 Operating leases
   (5) SHARE BASED COMPENSATION
  (6) PROVISION FOR INCOME TAXES
   January 31, 2009
    
    
    April 30, 2008Deferred tax asset
    
    $
    2,929,618
    
    
    $
    2,630,277Less: valuation allowance
    
    
    (2,929,618
    )
    
    
    (2,630,277
    )Net deferred tax asset
    
    $
    -0-
    
    
    $
    -0-
  (7) RELATED PARTY TRANSACTIONS
  (8) SUBSEQUENT EVENT
   18




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
    Restatement
     Overview
   19




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##### Table of Contents



Results of Operations
  Three Months Ended January 31, 2009 and 2008
 Revenues (Restated):
  Expenses (Restated):
 
    
    Research and development expenses (Restated): For the three
months ended January 31, 2009, research and development expenses
were $435,274 and zero for the same period in 2008. The increase
was due to the Companys efforts to build its preclinical
platform, build its drug pipeline and develop its drug, SG410.
Research and development expenses consist of consultants,
Tumorgraft acquisition costs, their subsequent propagation,
maintenance and storage, salaries and related benefits, and
travel. Business development expenses incurred relate to salaries
and related benefits, consultants, legal and travel for activities
directed towards building our drug pipeline.
  20




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##### Table of Contents




    
    Personalized oncology and preclinical expenses (Restated): For
the three months ended January 31, 2009, personalized oncology and
preclinical expenses totaled $669,610, compared to $201,222 for
the similar period a year ago, an increase of $468,388 or 233%.
These costs were primarily for conducting the Companys
personalized oncology services, including salaries and related
benefits, medical information panels which include honoraria,
travel and testing procedures. During the 2009 quarter the
Company also entered into an agreement with a pharmaceutical
company whereby the Company purposely reduced its gross margin on
preclinical eValuation services revenues in exchange for a royalty
agreement on future sales for a specific indication of the
compound being tested.
    
    General and administrative expenses (Restated): For the three
months ended January 31, 2009, general and administrative expenses
were $463,236 compared to $113,268 for the same period in 2008, an
increase of $349,968 or 309%. Expenses increased as the Company
continued to expand and build out its management team and meet the
requirements of a publicly traded company. Expenses included
salaries and related expenses, legal, audit, occupancy, marketing,
investor relations and consulting.
 Net Loss (Restated):
 Nine Months Ended January 31, 2009 and 2008
 Revenues (Restated):
  Expenses (Restated):
 
    
    Research and development expenses (Restated): For the nine months
ended January 31, 2009, research and development expenses were
$1,071,841 compared to $105,910 for the same period in 2008, an
increase of 912%. The increase was mainly attributable to the
fact that the Company did not have any significant research and
development efforts ongoing in the 2008 time period other then the
purchase of a limited supply of Tumorgrafts. Research and
development expenses incurred for the 2009 time period consist of
salaries and related expenses, stock compensation charges,
consultants, travel, Tumorgraft acquisition costs and their
subsequent propagation, storage and maintenance. In addition we
began to build out our business development team that is tasked
with identifying and securing the Companys future drug pipeline.
    
    Personalized oncology and preclinical expenses (Restated): For
the nine months ended January 31, 2009, personalized oncology and
preclinical expenses totaled $1,387,796 compared to $281,784 for
the same period in 2008, an increase of $1,106,012 or 393%.
Personalized oncology expenses incurred for the nine months ended
January 31, 2009 consisted mainly of salaries and related employee
benefits, stock based compensation, and the costs of conducting
panels which include honoraria, travel and related testing
procedures. With respect to preclinical expenses, the Company
incurred expenses related to the propagation and testing of
Biomerk Tumorgrafts. The Company did not have any expenses
related to its preclinical business in the 2008 time period.
    
    General and administrative expenses (Restated): For the nine
months ended January 31, 2009 general and administrative expenses
were $1,163,089 compared to $730,602 for the similar period in
2008, an increase of $432,487 or 59%. General and administrative
expenses saw a significant increase mainly due to the fact that
the Company was in a start up mode during the 2008 time frame with
a limited staff and resources. The increase for these factors was
partially offset by lower share based compensation of $323,563 for
the nine months ended January 31, 2009 compared to $510,259 for
the same period in 2008. In the 2009 time period the Company
continued to build out its corporate infrastructure. General and
administrative expenses included salaries and related employee
benefits, stock based compensation, investor relations, marketing,
rent, supplies, legal, accounting and recruiting expenses.
  21




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##### Table of Contents



Net Loss (Restated):
 FINANCIAL CONDITION AND LIQUIDITY
     Critical Accounting Policies
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4.
    
    Controls and Procedures
        22




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##### Table of Contents



Remediation of Material Weaknesses
      
 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.10.1
    
    
    Lease between Champions Biotechnology, Inc. and 855 N. Wolfe Street, LLC dated
January 30, 2009 for office and laboratory space in the Science and Technology
Park at Johns Hopkins located at 855 N. Wolfe Street, Suite 616, Baltimore,
Maryland*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
 *  Previously filed  23




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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  24




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description10.1
    
    
    Lease between Champions Biotechnology, Inc. and 855 N. Wolfe Street,
LLC dated January 30, 2009 for office and laboratory space in the
Science and Technology Park at Johns Hopkins located at 855 N. Wolfe
Street, Suite 616, Baltimore, Maryland*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
 *  Previously filed  25