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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly period ended July 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 0-17263
 CHAMPIONS BIOTECHNOLOGY, INC.
  Delaware
    
    52-1401755(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)855 N. Wolfe Street, Suite 619,Baltimore, Maryland
    
    21205(Address of principal executive offices)
    
    (Zip Code)
 (410) 369-0365
   þ o
 Yes o
No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-Accelerated Filer o
    
    Smaller Reporting Company þ
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CHAMPIONS BIOTECHNOLOGY, INC.
FORM 10-Q
 INDEX
 PART I. Financial InformationItem 1. Financial StatementsCondensed
Consolidated Balance Sheets as of July 31, 2009 (unaudited) and
April 30, 2009
    
    
    3Condensed Consolidated Statements of Operations
for the three months ended July 31, 2009 and 2008 (unaudited)
    
    
    4Condensed Consolidated Statements of Cash Flows for the
three months ended July 31, 2009 and 2008 (unaudited)
    
    
    5Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    13Item 4. Controls and Procedures
    
    
    14PART II. Other InformationItem 1. Legal Proceedings
    
    
    15Item 1A. Risk Factors
    
    
    15Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    15Item 3. Defaults Upon Senior Securities
    
    
    15Item 4. Submission of Matters to a Vote of Security Holders
    
    
    15Item 5. Other Information
    
    
    15Item 6. Exhibits
    
    
    15Signatures
    
    
    16Exhibit 31.1Exhibit 31.2Exhibit 32.1
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PART I. FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements
 CHAMPIONS BIOTECHNOLOGY, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 July 31, 2009
    
    
    April 30, 2009(unaudited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    1,530,000
    
    
    $
    1,728,000Short term investments
    
    
    
    
    
    
    1,017,000Prepaid expenses, deposits, and other receivables
    
    
    942,000
    
    
    
    1,125,000Total current assets
    
    
    2,472,000
    
    
    
    3,870,000Property and equipment, net
    
    
    102,000
    
    
    
    81,000Goodwill
    
    
    669,000
    
    
    
    669,000TOTAL ASSETS
    
    $
    3,243,000
    
    
    $
    4,620,000LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable
    
    $
    1,401,000
    
    
    $
    1,414,000Accrued liabilities
    
    
    86,000
    
    
    
    67,000Deferred revenue
    
    
    946,000
    
    
    
    1,223,000Total current liabilities
    
    
    2,433,000
    
    
    
    2,704,000COMMITMENTS AND CONTINGENCIESAccrued
stock repurchase
    
    $
    250,000
    
    
    
    STOCKHOLDERS EQUITYPreferred stock, $10 par value; 56,075 shares authorized;
0 shares issued and outstanding
    
    
    
    
    
    
    Common stock, $0.001 par value; 50,000,000 shares
authorized; 33,594,000 and 33,579,000 issued at July 31, 2009 and
April 30, 2009, respectively,
and 32,692,000 and 32,989,000 shares outstanding at July 31, 2009 and
April 30, 2009, respectively
    
    
    34,000
    
    
    
    34,000Treasury
stock, at cost, 902,000 and 590,000 shares at July 31, 2009 and
April 30, 2009, respectively
    
    
    (157,000
    )
    
    
    (1,000
    )Additional paid-in capital
    
    
    11,443,000
    
    
    
    11,640,000Accumulated deficit
    
    
    (10,760,000
    )
    
    
    (9,757,000
    )Total stockholders equity
    
    
    560,000
    
    
    
    1,916,000TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    3,243,000
    
    
    $
    4,620,000
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CHAMPIONS BIOTECHNOLOGY, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 Three Months Ended July 31,2009
    
    
    2008OPERATING REVENUEPersonalized oncology services
    
    $
    899,000
    
    
    $
    616,000Preclinical eValuation services
    
    
    63,000
    
    
    
    57,000Total operating revenue
    
    
    962,000
    
    
    
    673,000COSTS AND OPERATING EXPENSESCost of personalized oncology services
    
    
    634,000
    
    
    
    226,000Cost of preclinical eValuation services
    
    
    34,000
    
    
    
    34,000Research and development
    
    
    496,000
    
    
    
    231,000General and administrative
    
    
    806,000
    
    
    
    334,000Total costs and operating expenses
    
    
    1,970,000
    
    
    
    825,000LOSS BEFORE OTHER INCOME
    
    
    (1,008,000
    )
    
    
    (152,000
    )Interest income
    
    
    5,000
    
    
    
    21,000LOSS BEFORE PROVISION FOR INCOME TAXES
    
    
    (1,003,000
    )
    
    
    (131,000
    )Provision for income taxes
    
    
    
    
    
    
    NET LOSS
    
    $
    (1,003,000
    )
    
    $
    (131,000
    )NET LOSS PER SHARE BASIC AND DILUTED
    
    $
    (0.03
    )
    
    $
    (0.00
    )WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC AND DILUTED
    
    
    32,757,000
    
    
    
    33,269,000
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CHAMPIONS BIOTECHNOLOGY, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Three Months Ended July 31,2009
    
    
    2008OPERATING ACITIVITIESNet loss
    
    $
    (1,003,000
    )
    
    $
    (131,000
    )Adjustments to reconcile net loss to net cash
used in operating activities:Stock-based compensation
    
    
    50,000
    
    
    
    62,000Depreciation
    
    
    8,000
    
    
    
    Changes in operating assets and liabilities:Prepaid expenses, deposits, and other receivables
    
    
    186,000
    
    
    
    (120,000
    )Accounts
payable
    
    
    (1,000
    )
    
    
    41,000Accrued liabilities
    
    
    19,000
    
    
    
    (361,000
    )Deferred revenue
    
    
    (277,000
    )
    
    
    302,000Net cash used in operating activities
    
    
    (1,018,000
    )
    
    
    (207,000
    )INVESTING ACTIVITIESProceeds from certificate of deposit
    
    
    1,017,000
    
    
    
    Purchase of property and equipment
    
    
    (44,000
    )
    
    
    Purchase of intangibles
    
    
    
    
    
    
    (14,000
    )Net cash provided by (used in) investing activities
    
    
    973,000
    
    
    
    (14,000
    )FINANCING ACTIVITIESPurchase of treasury stock
    
    
    (156,000
    )
    
    
    Proceeds from exercise of options and warrants
    
    
    3,000
    
    
    
    7,000Net cash (used in) provided by financing activities
    
    
    (153,000
    )
    
    
    7,000NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (198,000
    )
    
    
    (214,000
    )CASH AND CASH EQUIVALENTS  BEGINNING OF PERIOD
    
    
    1,728,000
    
    
    
    3,709,000CASH AND CASH EQUIVALENTS  END OF PERIOD
    
    $
    1,530,000
    
    
    $
    3,495,000SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid during the period:Interest
    
    $
    
    
    
    $
    Income tax
    
    $
    
    
    
    $
    
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CHAMPIONS BIOTECHNOLOGY, INC.
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Organization and Basis of Presentation
  Basis of Presentation
  Note 2. Summary of Significant Accounting Policies
 Unaudited Interim Financial Information
  Principles of Consolidation
   Segment Reporting
  Use of Estimates
  Reclassifications
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Cash and Cash Equivalents
  Fair Value of Financial Instruments
  Goodwill
  Revenue Recognition
   Research and Development
 
 Recent
Accounting Pronouncements
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Note 3. Basic and Diluted Loss per Common Share
    Three Months Ended July 31,2009
    
    
    2008Stock options
    
    
    470,000
    
    
    
    349,000Warrants
    
    
    468,000
    
    
    
    491,000Total common stock equivalents
    
    
    938,000
    
    
    
    840,000
 Note 4. Property and Equipment
 
 July 31, 2009
    
    

April 30, 2009Furniture and fixtures
    
    $
    32,000
    
    
    $
    26,000Computer equipment and software
    
    
    57,000
    
    
    
    55,000Laboratory equipment
    
    
    23,000
    
    
    
    4,000Leasehold improvements
    
    
    2,000
    
    
    
    Total property and equipment
    
    
    114,000
    
    
    
    85,000Less accumulated depreciation
    
    
    (12,000
    )
    
    
    (4,000
    )Property and equipment, net
    
    $
    102,000
    
    
    $
    81,000
  Note
5. Licensing Agreements
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Note 6. Stock-Based Compensation
 Stock Options
   .
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Three Months Ended July 31,2009
    
    
    2008Cost of
personalized oncology services
    
    $
    6,000
    
    
    $
    Research and development
    
    
    (12,000
    )
    
    
    14,000General and administrative
    
    
    56,000
    
    
    
    48,000Total share-based compensation expense
    
    $
    50,000
    
    
    $
    62,000
  Three Months Ended July 31,2009
    
    
    2008Expected term in years
    
    
    6.0
    
    
    
    6.0Risk free interest rates
    
    
    3.0%
    
    
    
    2.4%Volatility
    
    
    94%
    
    
    
    69%Dividend yield
    
    
    0%
    
    
    
    0%
 Note 7. Stockholders Equity
 Common Stock
   Warrants
   Note 8. Related Party Transactions
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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations.
 The following discussion of our historical results of operations and our liquidity and capital
resources should be read in conjunction with the financial statements and related notes that appear
elsewhere in this report.
 Forward-Looking Statements
 Managements Discussion and Analysis of
Financial Condition and Results of Operations
   Overview
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Results of Operations
 Three Months Ended July 31, 2009 and 2008
 Revenues
   Operating Expenses
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Interest
Income
  Net Loss
  Liquidity and Capital Resources
  
 Commitments
and Contractual Obligations
  Ability to Continue As A Going Concern
  Off Balance Sheet Arrangements
  
 Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
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Item 4T.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
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PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings.
  
 Item 1A.
    
    Risk Factors.
  
 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 31.1
    
    Certification by the Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002Exhibit 31.2
    
    Certification by the Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002Exhibit 32.1
    
    Certification by the Chief Executive Officer and the Chief
Financial Officer Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
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SIGNATURES
  CHAMPIONS BIOTECHNOLOGY, INC.
(Registrant)Date: September 14, 2009
    By:
    /s/ Douglas D. BurkettDouglas D. BurkettPresident and Principal Executive OfficerBy:
    /s/ Mark R. SchonauMark R. SchonauChief Financial Officer  - 16 -




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EXHIBIT INDEX
 ExhibitNumber
    
    DescriptionExhibit 31.1
    
    Certification by the Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002Exhibit 31.2
    
    Certification by the Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002Exhibit 32.1
    
    Certification by the Chief Executive Officer and the Chief
Financial Officer Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
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