Property and Equipment

9 Months Ended

Jan. 31, 2024

Property, Plant and Equipment [Abstract]

Property and equipment is recorded at cost and primarily consists of laboratory equipment, computer equipment and software, capitalized software development costs, and furniture and fixtures. Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of the various assets ranging from three to nine years. Property and equipment consisted of the following (table in thousands):


	January 31, 2024		April 30, 2023
Furniture and fixtures	$	246	$	246
Computer equipment and software	2,152		2,102
Capitalized software development costs	1,888		1,888
Laboratory equipment	11,888		10,390
Assets in progress	4		1,079
Leasehold improvements	316		111

Total property and equipment	16,494		15,816
Less: Accumulated depreciation and amortization	(9,961)		(8,630)

Property and equipment, net	$	6,533	$	7,186

Depreciation and amortization expense was $481,000 and $575,000 for the three months ended January 31, 2024 and 2023, respectively. Depreciation and amortization expense was $1.4 million and $1.7 million for the nine months ended January 31, 2024 and 2023, respectively. Depreciation and amortization expense, excluding expense recorded under finance leases, was $445,000 and $540,000 for the three months ended January 31, 2024 and 2023, respectively. Depreciation and amortization expense, excluding expense recorded under finance leases, was $1.3 million and $1.6 million for the nine months ended January 31, 2024 and 2023, respectively.

As of January 31, 2024 and April 30, 2023, property, plant and equipment included gross assets held under finance leases of $1.0 million. Related depreciation expense was approximately $36,000 and $35,000 for the three months ended January 31, 2024 and 2023, respectively, and $108,000 and $99,000 for the nine months ended January 31, 2024 and 2023, respectively.

During the nine months ended January 31, 2024, the Company disposed of two assets and recognized a loss on disposal of equipment of $81,000 within other income (loss) as presented in the condensed consolidated statement of operations. The first asset, laboratory equipment, was acquired for $128,000 and had accumulated depreciation of $62,000, resulting in a loss of $66,000 upon disposal. The second asset, acquired software, was purchased for $33,000 and had accumulated amortization of $18,000, resulting in a loss of $15,000 upon disposal.

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 Lumin platform. Lumin is the Company's oncology data-driven software program and data tool which operates as 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. Total capitalized gross asset costs for the Lumin platform that was launched and placed into service were $1.9 million. During the fourth quarter of fiscal year 2023, an impairment loss was recognized equal to the amount by which the carrying amount exceeded the future net revenues, or, its net book value at April 30, 2023 of $807,000. Amortization expense related to this asset was $0 and $157,000 for the three months ended January 31, 2024 and 2023, respectively, and $0 and $471,000 for the nine months ended January 31, 2024 and 2023, respectively.

Finance Lease

During fiscal year 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 June 2027. 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 $17,800 and $17,100 for the three months ended January 31, 2024 and 2023, respectively, and $52,800 and $45,100 for the nine months ended January 31, 2024 and 2023, respectively.

During fiscal year 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. At the commencement of the commitment, 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 $18,700 and $18,000 for the three months ended January 31, 2024 and 2023, respectively, and $55,600 and $54,000 for the nine months ended January 31, 2024 and 2023, respectively.

The liabilities related to these finance leases are classified under other current liability and other non-current liabilities on the Company's balance sheet. The weighted average remaining lease term of these leases is 2.83 years.

Refer to Note 7, Leases, for information on operating leases.