Good afternoon, ladies and gentlemen, and welcome to the Champions Oncology Fourth Quarter Fiscal Year 2022 Earnings Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Ronnie Morris, CEO of Champions Oncology. Sir, the floor is yours.

Good afternoon. I am Ronnie Morris, CEO of Champions Oncology. Joining me today is David Miller, our Chief Financial Officer. Thank you for joining us for our quarterly earnings call. Before I begin, I'll remind you that we'll be making forward-looking statements during today's call and that actual results could differ materially from what is described in those statements. Additional information on factors that could cause results to differ is available on our Forms 10-Q and Form 10-K. A reconciliation of non-GAAP financial measures that may be discussed during the call to GAAP financial measures is available in the earnings release. Overall, we had another year of significant progress, successfully expanding our business and core capabilities while continuing to evolve and deliver on our longer-term strategy. On last year's year-end call, I outlined our strategic vision, highlighting our platform that emanates from the uniqueness of our tumor bank and related data. That vision included the expansion of our core services business, embarking on a drug discovery effort and finding a commercial path to unleash the power of our data and analytics. Fiscal year 2022 represented an execution of this strategic plan. We expanded our core services and continued to develop our Ex Vivo platform, driving our improved financial results. This year, we will continue to invest further in expanding our platform with a concentration on our unique Ex Vivo platform that we believe has a strong potential for significant revenue growth. With regards to our multifaceted data platform, we have our Lumin software product in the data and analytics that are found within the system. Our Lumin SaaS sales and renewals have been slower than anticipated, and we have not reached the growth phase of the product life cycle as quickly as we expected. We view user education as the…

Thanks, Ronnie. Our full results on Form 10-K will be filed with the SEC on or before July 29. Overall, we had another year of significant financial milestones for Champions Oncology. Our annual revenue for 2022 was a record $49.1 million compared to $41 million for 2021, representing year-over-year growth of 20% and coming in at the high end of our guidance of 15% to 20%. Excluding stock comp and depreciation, our adjusted EBITDA, which excludes stock-based compensation, depreciation and amortization was $3.1 million for 2022 compared to $2.1 million a year ago. On a GAAP basis, income from operations for fiscal 2022 was $605,000 compared to income from operations of $337,000 in the year ago period. Turning the focus to the fourth quarter. Revenue increased to $12.9 million compared to $10.6 million in the year ago period, an increase of $2.3 million or 22%. Adjusted EBITDA was $445,000 compared to breakeven results in the year ago period. Focusing as we do on adjusted EBITDA, total cost of sales was $6 million compared to $5.6 million in our fourth quarter last year, a modest 8% increase on revenue growth of 22%. The increase compared to the prior year was primarily related to SaaS expenses, which are no longer capitalized. Our total gross margin for the fourth quarter was 53% compared to 47% for the period ended April 30, 2021. Our gross margin for the full fiscal year was 53% compared to 48% for fiscal 2021. As discussed throughout the year, our reduction in outsourcing Ex Vivo work coupled with the leverage in our operating model has led to the gross margin improvement. Additionally, the gross margin continues to be driven primarily from our legacy services with room for additional expansion as higher-margin products such as Ex Vivo will actually contribute…

[Operator Instructions] Your first question is coming from Matt Hewitt from Craig-Hallum.

Maybe, Ronnie, you addressed this a little bit in your prepared remarks, but regarding the state of the biotech and small pharma funding environment, what areas of your business are you seeing any impact? Or if not, what do you think is separating you from some of your peers that have started to see maybe a little bit of a slowdown in their business?

Yes. So, so far, we haven't seen a real impact to the business. I think what we've seen maybe is just a little more deliberation from biotech and pharma and just kind of the speed at which they might sign some of their statements of work in terms of doing work. But we seem to have a robust pipeline. People are still interested in doing preclinical work. We certainly have been working with many of these customers for many years. So I don't really see any signs right now that things are slowing down. However, as I said, we are -- we certainly are cognizant of the fact that we know many smaller biotechs, especially are being a little more careful or cutting back on some of the R&D expense. So we're looking at all of that. Part of it is a combination of just us always expanding our services, doing more, having a lot more earlier on from the discovery to the late-stage efficacy stage of offerings. So that probably also potentially could be why we're not seeing any slowdown because we're just doing more for more people, so...

Got it. That's helpful. Regarding the Ex Vivo platform, obviously, it sounds like a very strong quarter and a strong year. As you look at the opportunity with that platform in '23, what can you add to that to expand the market opportunity and help drive incremental growth for Ex Vivo?

Yes. So the way I would look at it, Matt, is I kind of feel like our current Ex Vivo platform is what we would call like a version 1 or 1.5 Ex Vivo platform. I think we're adding a lot of capabilities, especially when it comes to imaging and different types of abilities to analyze our Ex Vivo output. So what we're really building is the next-generation Ex Vivo platform. And what we're excited about is we have, as you know, a very unique well-characterized tumor bank that a lot of people are interested in understanding, especially because we have a lot of data associated with them, plus we have unique tumors. So this gives customers in biotech and pharma partners another avenue to do larger screening studies to really understand where their molecules might be -- have an interesting indication. And then hopefully, more hits will lead to more in vivo studies to confirm the ex vivo. So we're excited about the ex vivo space, the ex vivo space in terms of technology for us and for others is getting more advanced. And there's a lot better capabilities now that we could do with whether it's organoids or other areas within the ex vivo space. So we're excited about utilizing our core strong, unique tumor bank with these new tools that we think is just not only going to enhance our Ex Vivo assays and the way pharma uses our Ex Vivo assays but also translates to how they're going to use the whole service line, all the way from discovery to ex vivo to biomarker discovery to in vivo.

Got it. Maybe one last one for me, and I'll hop back in the queue. Regarding Lumin, it sounds like we're still early stages. What do you think it's going to take to increase market awareness and drive adoption of that software platform?

Yes, that's a good question. I think that we have a bunch of users on Lumin. And what we've learned is that it's -- it can't be everything to everybody, but it is a useful platform for a lot of people, and primarily the people that have invested in really understanding how to use Lumin. So I think there's 2 things that we need to do better. One, we need to really invest in user education and spend more time with our users to really get them very comfortable with the system. It's not -- it isn't apparently like riding a bike for most people, and it takes time. So we need to come up with a strategy to -- everyone is busy in their lives, the researchers and everyone. We need to find a way to incorporate some type of training program and making it easier for users to get the training they need to really feel comfortable in the program. And the second thing we need to do is we need to beef up our business development activities to get out to more scientists and the PIs within the pharma and Bioceutical -- biotech world just to have more reach out there. We've been focused a little bit away from signing up more subscribers to people who are interested in using Lumin for data and signing up people who just want to extract data from that. So we need to be able to have the resource to do both extraction of data and going out after new subscribers, and we were a little bit constrained in terms of our ability from a business development perspective to do both initiatives. So I think it's going to take a little more time. I think it's going to take more for the adoption to really build in. And I think we have some work to do on our side to understand that we need to invest more into the users and invest more from a business development perspective to go out and get more people to start to use the system and to really get educated on the system.

Understood. And congratulations on the progress in '22.

[Operator Instructions] There are no further questions in the queue.

Okay. So thank you so much, everybody, for joining us for our year-end and quarter -- Q4 call. We're really excited about the progress we've made about the vision about the evolution of Champions Oncology, and we look forward to giving everybody an update in another 6 weeks on Q1 and then continuing to update people regularly about the business. Thank you again for joining us.

Thank you, ladies and gentlemen. This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.