Property and Equipment

12 Months Ended

Apr. 30, 2023

Property, Plant and Equipment [Abstract]

Property and equipment consisted of the following (in thousands):


	April 30,
	2023		2022
Furniture and fixtures	$	246	$	246
Computer equipment and software	2,102		1,667
Laboratory equipment	10,390		8,618
Capitalized software development costs	1,888		1,888
Assets in progress	1,079		181
Leasehold improvements	111		111

Total property and equipment	15,816		12,711
Less: Accumulated depreciation and amortization	(8,630)		(5,577)

Property and equipment, net	$	7,186	$	7,134

Depreciation and amortization expense was $2.2 million and $1.6 million for the years ended April 30, 2023 and 2022, respectively. Depreciation and amortization expense, excluding expense recorded under finance leases, was $2.1 million and $1.5 million for the years ended April 30, 2023 and 2022, respectively.

As of April 30, 2023 and 2022, property, plant and equipment included gross assets held under finance leases of $1.0 million and $713,000, respectively. Related depreciation expense for these assets was $135,000 and $87,000 for the years ended April 30, 2023 and 2022, respectively.

Capitalized software development costs under a hosting arrangement

The Company accounts for the cost of computer software obtained or developed for internal use as well as the software development and implementation costs associated with a hosting arrangement ("internal-use software") that is a service contract in accordance and with ASC 350, Intangibles - Goodwill and Other ("ASC-350"). We capitalize certain costs in the development of our internal-use software when the preliminary project stage is completed and it is probable that the project itself will be completed and the software will perform as intended. These capitalized costs include personnel and related expenses for employees and costs of third-party consultants who are directly associated with and who devote time to these internal-use software projects. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended purpose. Costs incurred for significant upgrades, increased functionality, and enhancements to the Company's internal-use software solutions are also capitalized. Costs incurred for training, maintenance, and minor modifications are expensed as incurred. Capitalized software development costs are amortized using the straight-line method over an estimated useful economic life of three years.

The Company has capitalized development and implementation costs in accordance with accounting guidance for its bioinformatics platform, Lumin. Lumin is the Company's oncology data-driven software program and data tool which is operates as Software as a Service (SaaS). These capitalized costs represent salaries, including direct payroll-related costs, certain software development consultant expenses and molecular sequencing programming costs incurred in the engineering and coding of the software development. Capitalized costs are classified as assets in progress during the development process until development is complete and the asset is available for sale. There are no capitalized software development costs classified as assets in progress as of April 30 2023 or 2022. The total cost capitalized gross asset investment for the Lumin platform that was launched and placed into service was $1.9 million. Ordinary amortization expense related to this asset addition was $630,000 and $317,000 for the years ended April 30, 2023 and 2022, respectively.

During the fourth quarter of fiscal 2023, the Company assessed the recoverability of the Lumin capitalized software development costs by comparing the forecasted future revenues from Lumin sales, based on management’s best estimates and using appropriate assumptions and projections, to the carrying amount of the capitalized asset. The Company considered several factors in this analysis including the decrease in Lumin revenue growth from the prior year, the deceleration of new Lumin bookings in the current year, and the strategic consideration for additional capital investment into the platform, sales team, and marketing campaigns to bolster awareness and growth. As the carrying value was determined not to be recoverable from future

revenues, an impairment loss was recognized for the year ending April 30, 2023 equal to the amount by which the carrying amount exceeded the future revenues, or, its net book value at that date of $807,000.

Finance Lease

During fiscal 2022, the Company recognized a finance lease for laboratory equipment. This equipment was obtained as the result of a laboratory supplies purchase commitment with costs of approximately $370,000 at inception through December 2025. Cash payments for this lease are in the form of consideration for purchasing lab supplies under a purchase commitment agreement. The present value of the minimum future obligations of $370,000 was calculated based on an interest rate of 3.25%. Depreciation and amortization expense related to this finance lease was $72,000 and $87,000 for the years ended April 30, 2023 and 2022, respectively.

During fiscal 2023, the Company recognized a finance lease for laboratory equipment. This equipment was obtained as the result of a laboratory supplies purchase commitment with costs of approximately $368,000 at inception through December 2025. Cash payments for this lease are in the form of consideration for purchasing lab supplies under a purchase commitment agreement. The present value of the minimum future obligations of $368,000 was calculated based on an interest rate of 3.5%. Depreciation and amortization expense related to this finance lease was $63,000 and zero for the years ended April 30, 2023 and 2022, respectively.