##### 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 July 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 July 31, 2008 (Unaudited) and April 30,
2008 (Audited)
    
    
    4Condensed Consolidated Statements of Operations
for the three months ended July 31, 2008 and 2007 (Unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the
three months ended July 31, 2008 and 2007 (Unaudited)
    
    
    6Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    7-14Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15-17Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    17Item 4. Controls and Procedures
    
    
    17-18PART II. Other InformationItem 1. Legal Proceedings.
    
    
    19Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
    
    
    19Item 3. Defaults Upon Senior Securities.
    
    
    19Item 4. Submission of Matters to a Vote of Security Holders.
    
    
    19Item 5. Other Information
    
    
    19Item 6. Exhibits
    
    
    19Signatures
    
    
    20Exhibit 31.1Exhibit 31.2Exhibit 32.1
   3




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PART I
 
 Item 1.
    
    Financial Statements
 CHAMPIONS BIOTECHNOLOGY, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 July 31, 2008
    
    
    April 30, 2008(Restated)
    
    
    (Restated)(Unaudited)
    
    
    (Audited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    3,494,872
    
    
    $
    3,709,136Accounts receivable
    
    
    6,173
    
    
    
    Prepaid expenses
    
    
    71,483
    
    
    
    52,873Prepaid contract expenses
    
    
    95,795
    
    
    
    Total current assets
    
    
    3,668,323
    
    
    
    3,762,009Intangibles assets
    
    
    241,836
    
    
    
    227,465Goodwill
    
    
    661,909
    
    
    
    661,909TOTAL ASSETS
    
    $
    4,572,068
    
    
    $
    4,651,383LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable
    
    $
    189,006
    
    
    $
    147,971Deferred revenue
    
    
    806,937
    
    
    
    504,622Other accrued expenses
    
    
    
    
    
    
    361,275Total current liabilities
    
    
    995,943
    
    
    
    1,013,868COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    STOCKHOLDERS 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
July 31, 2008 and April 30, 2008, respectively
    
    
    33,273
    
    
    
    33,248Additional paid-in capital
    
    
    11,188,535
    
    
    
    11,119,343Accumulated deficit
    
    
    (7,645,683
    )
    
    
    (7,515,076
    )Total stockholders equity
    
    
    3,576,125
    
    
    
    3,637,515TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    4,572,068
    
    
    $
    4,651,383
   4




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CHAMPIONS BIOTECHNOLOGY, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 FOR THE THREE MONTHS ENDED JULY 31, 2008 AND 2007 (UNAUDITED)
 2008
    
    
    2007(Restated)
    
    
    (Restated)REVENUESPersonalized oncology and preclinical contract revenue
    
    $
    673,117
    
    
    $
    250,000Total revenues
    
    
    673,117
    
    
    
    250,000OPERATING EXPENSESResearch and development
    
    
    217,163
    
    
    
    75,000Cost of personalized oncology and preclinical contract revenue
    
    
    259,600
    
    
    
    80,562General and administrative
    
    
    347,677
    
    
    
    150,538Total operating expenses
    
    
    824,440
    
    
    
    306,100OPERATING LOSS
    
    
    (151,323
    )
    
    
    (56,100
    )OTHER INCOMEInterest income
    
    
    20,716
    
    
    
    5,359LOSS BEFORE TAXES
    
    
    (130,607
    )
    
    
    (50,741
    )Provision for income taxes
    
    
    
    
    
    
    NET LOSS
    
    $
    (130,607
    )
    
    $
    (50,741
    )Loss per common share:Basic and diluted
    
    $
    (0.00
    )
    
    $
    (0.00
    )Shares used in calculating loss per common share:Basic and diluted
    
    
    33,268,914
    
    
    
    30,842,049
   5




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CHAMPIONS BIOTECHNOLOGY, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE THREE MONTHS ENDED JULY 31, 2008 AND 2007 (UNAUDITED)
 2008
    
    
    2007(Restated)
    
    
    (Restated)CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (130,607
    )
    
    $
    (50,741
    )Adjustments to reconcile net (loss) to net cash (used in) provided by operating activities:Share based compensation expense expense
    
    
    61,717
    
    
    
    86,147Changes in:(Increase) in accounts receivable
    
    
    (6,173
    )
    
    
    (Increase) in prepaid expenses
    
    
    (18,609
    )
    
    
    (Increase) in prepaid contract expenses
    
    
    (95,795
    )
    
    
    Increase in accounts payable
    
    
    41,035
    
    
    
    12,689Increase in deferred revenue
    
    
    302,315
    
    
    
    (Decrease) increase in other accrued expenses
    
    
    (361,275
    )
    
    
    27,488Net cash (used in) provided by operating activities
    
    
    (207,392
    )
    
    
    75,583CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of intangible assets
    
    
    (14,372
    )
    
    
    Cash received in Biomerk, Inc. acquisition
    
    
    
    
    
    
    471,377Net cash (used in) provided by investing activities
    
    
    (14,372
    )
    
    
    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
    
    
    (214,264
    )
    
    
    503,267CASH AND CASH EQUIVALENTS  BEGINNING OF PERIOD
    
    
    3,709,136
    
    
    
    3,758CASH AND CASH EQUIVALENTS  END OF PERIOD
    
    $
    3,494,872
    
    
    $
    507,025SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the year 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 the shares of Biomerk, Inc.
     6




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CHAMPIONS BIOTECHNOLOGY, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 JULY 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
   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 July 31, 2008
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedCurrent assets:Cash and cash equivalents
    
    $
    3,494,872
    
    
    $
    
    
    
    $
    3,494,872Accounts receivable
    
    
    6,173
    
    
    
    
    
    
    
    6,173Prepaid expenses
    
    
    71,483
    
    
    
    
    
    
    
    71,483Prepaid contract expenses
    
    
    95,795
    
    
    
    
    
    
    
    95,795Total current assets
    
    
    3,668,323
    
    
    
    
    
    
    
    3,668,323Intangible assets
    
    
    241,836
    
    
    
    
    
    
    
    241,836Goodwill
    
    
    661,909
    
    
    
    
    
    
    
    661,909Total assets
    
    $
    4,572,068
    
    
    $
    
    
    
    $
    4,572,068Current liabilities:Accounts payable
    
    $
    189,006
    
    
    $
    
    
    
    $
    189,006Deferred revenue
    
    
    806,937
    
    
    
    
    
    
    
    806,937Total current liabilities
    
    
    995,943
    
    
    
    
    
    
    
    995,943Commitments and contingenciesStockholders equity:Common stock
    
    
    33,273
    
    
    
    
    
    
    
    33,273Additional paid-in capital
    
    
    11,580,064
    
    
    
    (391,529
    )
    
    
    11,188,535Accumulated deficit
    
    
    (7,236,029
    )
    
    
    (409,654
    )
    
    
    (7,645,683
    )Prepaid consulting fees
    
    
    (801,183
    )
    
    
    801,183
    
    
    
    Total stockholders equity
    
    
    3,576,125
    
    
    
    
    
    
    
    3,576,125Total liabilities and stockholders equity
    
    $
    4,572,068
    
    
    $
    
    
    
    $
    4,572,068
  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 Three Months Ended July 31, 2008
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedOperating revenue:Personalized oncoloy services and
preclinical contract review
    
    $
    673,117
    
    
    $
    
    
    
    $
    673,117Total operating revenue
    
    
    673,117
    
    
    
    
    
    
    
    673,117Operating expenses:Research and development
    
    
    217,163
    
    
    
    
    
    
    
    217,163Cost of personalized oncology services
and preclinical contract review
    
    
    259,600
    
    
    
    
    
    
    
    259,600General and administrative
    
    
    384,552
    
    
    
    (36,875
    )
    
    
    347,677Total operating expenses
    
    
    861,315
    
    
    
    (36,875
    )
    
    
    824,440Operating loss
    
    
    (188,198
    )
    
    
    36,875
    
    
    
    (151,323
    )Other income:Interest income
    
    
    20,716
    
    
    
    
    
    
    
    20,716Loss before income taxes
    
    
    (167,482
    )
    
    
    36,875
    
    
    
    (130,607
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (167,482
    )
    
    $
    36,875
    
    
    $
    (130,607
    )Loss per common share:Basic and diluted
    
    $
    (0.01
    )
    
    $
    0.01
    
    
    $
    (0.00
    )Shares used in calculating loss per common share:Basic and diluted
    
    
    33,268,914
    
    
    
    33,268,914
    
    
    
    33,268,914
  10




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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended July 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
    
    
    75,000
    
    
    
    
    
    
    
    75,000Cost of personalized oncology
services
    
    
    80,562
    
    
    
    
    
    
    
    80,562General and administrative
    
    
    91,229
    
    
    
    59,309
    
    
    
    150,538Total operating expenses
    
    
    246,791
    
    
    
    59,309
    
    
    
    306,100Operating income (loss)
    
    
    3,209
    
    
    
    (59,309
    )
    
    
    (56,100
    )Other income:Interest income
    
    
    5,359
    
    
    
    
    
    
    
    5,359Income (loss) before income taxes
    
    
    8,568
    
    
    
    (59,309
    )
    
    
    (50,741
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    8,568
    
    
    $
    (59,309
    )
    
    $
    (50,741
    )Income (loss) per common share:Basic
    
    $
    0.00
    
    
    $
    (0.00
    )
    
    $
    (0.00
    )Diluted
    
    $
    0.00
    
    
    $
    (0.00
    )
    
    $
    (0.00
    )Shares used in calculating income (loss)
per common share:Basic
    
    
    30,842,049
    
    
    
    30,842,049
    
    
    
    30,842,049Diluted
    
    
    31,080,085
    
    
    
    30,842,049
    
    
    
    30,842,049
  11




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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ended July 31, 2008
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedCash flows from operating activities:Net loss
    
    $
    (167,482
    )
    
    $
    36,875
    
    
    $
    (130,607
    )Adjustments to reconcile net loss to net
cash (used in) operating activities:Share based compensation expense
    
    
    98,592
    
    
    
    (36,875
    )
    
    
    61,717Changes in operating assets and liabilities:(Increase) in accounts receivable
    
    
    (6,173
    )
    
    
    
    
    
    
    (6,173
    )(Increase) in prepaid expenses
    
    
    (18,609
    )
    
    
    
    
    
    
    (18,609
    )(Increase) in prepaid contract
expenses
    
    
    (95,795
    )
    
    
    
    
    
    
    (95,795
    )Increase in accounts payable
    
    
    41,035
    
    
    
    
    
    
    
    41,035Increase in deferred revenue
    
    
    302,315
    
    
    
    
    
    
    
    302,315(Decrease) in other accrued expenses
    
    
    (361,275
    )
    
    
    
    
    
    
    (361,275
    )Net cash (used in) operating activities
    
    
    (207,392
    )
    
    
    
    
    
    
    (207,392
    )Cash flows from investing activities:Purchase of intangible assets
    
    
    (14,372
    )
    
    
    
    
    
    
    (14,372
    )Net (used in) investing activities
    
    
    (14,372
    )
    
    
    
    
    
    
    (14,372
    )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
    
    
    (214,264
    )
    
    $
    
    
    
    
    (214,264
    )Cash and cash equivalents  Beginning of period
    
    
    3,709,136
    
    
    
    
    
    
    
    3,709,136Cash and cash equivalents  End of period
    
    $
    3,494,872
    
    
    
    
    
    
    $
    3,494,872
  12




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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ended July 31, 2007
 As Previously
    
    
    RestatementReported
    
    
    Adjustments
    
    
    As RestatedCash flows from operating activities:Net income (loss)
    
    $
    8,568
    
    
    $
    (59,309
    )
    
    $
    (50,741
    )Adjustments to reconcile net income (loss)
to net cash provided by operating activities:Share based compensation expense
    
    
    26,838
    
    
    
    59,309
    
    
    
    86,147Changes in operating assets and
liabilities:Increase in accounts payable
    
    
    12,689
    
    
    
    
    
    
    
    12,689Increase in other accrued expenses
    
    
    27,488
    
    
    
    
    
    
    
    27,488Net cash provided by operating activities
    
    
    75,583
    
    
    
    
    
    
    
    75,583Cash 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 increase in cash and cash equivalents
    
    
    503,267
    
    
    $
    
    
    
    
    503,267Cash and cash equivalents  Beginning of period
    
    
    3,758
    
    
    
    
    
    
    
    3,758Cash and cash equivalents  End of period
    
    $
    507,025
    
    
    
    
    
    
    $
    507,025
 (3) NET (LOSS) PER SHARE
   July 31, 2008
    
    
    July 31, 2007Net (loss)
    
    $
    (130,607
    )
    
    $
    (50,741
    )Weighted-average common shares
outstanding (basic and diluted)
    
    
    33,268,914
    
    
    
    30,842,049
 (4) COMMITMENTS AND CONTINGENCIES
 Operating leases
   13




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(5) SHARE BASED COMPENSATION
  (6) PROVISION FOR INCOME TAXES
   July 31, 2008
    
    
    April 30, 2008Deferred tax asset
    
    $
    2,675,989
    
    
    $
    2,630,277Less: valuation allowance
    
    
    (2,675,989
    )
    
    
    (2,630,277
    )Net deferred tax asset
    
    $
    -0-
    
    
    $
    -0-
  (7) RELATED PARTY TRANSACTIONS
   14




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
    Restatement
    Overview
    15




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##### Table of Contents



Results of Operations
 Three Months Ended July 30, 2008 and 2007
 Revenues .
  Expenses (Restated) .
 Research and development expenses
  Cost of personalized oncology and preclinical contract services
   16




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General and administrative expenses (Restated)
   Net Loss (Restated) .
 Liquidity and Capital Resources
    Critical Accounting Policies
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4.
    
    Controls and Procedures
        17




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Remediation of Material Weaknesses
       18




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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
  19




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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  20




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##### Table of Contents



EXHIBIT INDEX
 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
  21