What changed in CRYO CELL INTERNATIONAL INC's 10-K — 2022 vs 2023
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Paragraph-level year-over-year comparison of CRYO CELL INTERNATIONAL INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.
+197 added−165 removedSource: 10-K (2024-02-28) vs 10-K (2023-02-28)
Top changes in CRYO CELL INTERNATIONAL INC's 2023 10-K
197 paragraphs added · 165 removed · 151 edited across 6 sections
- Item 1. Business+68 / −55 · 46 edited
- Item 6. [Reserved]+60 / −53 · 52 edited
- Item 1A. Risk Factors+54 / −45 · 43 edited
- Item 3. Legal Proceedings+6 / −4 · 3 edited
- Item 5. Market for Registrant's Common Equity+6 / −6 · 5 edited
Item 1. Business
Business — how the company describes what it does
46 edited+22 added−9 removed76 unchanged
Item 1. Business
Business — how the company describes what it does
46 edited+22 added−9 removed76 unchanged
2022 filing
2023 filing
Biggest changeThe Company continues to evaluate and pursue, certain opportunities for global expansion, on a selective basis, in which operational synergies and economic potential align with Cryo-Cell’s strategic direction. Revenue Sharing Agreements (“RSAs”) The Company entered into RSAs prior to 2002 with various third and related parties.
Biggest changeSubsidiaries and Joint Ventures Since its inception, Cryo-Cell has entered into a number of business activities through subsidiaries and joint ventures, including the following activities and those described under “International” below. The Company continues to evaluate and pursue, certain opportunities for global expansion, on a selective basis, in which operational synergies and economic potential align with Cryo-Cell’s strategic direction.
Unless the Agreement is terminated or renegotiated as permitted per the Agreement, the Company is also required to pay Duke minimum annual royalties beginning on the second anniversary of the effective date as follows: • Year 2: $500,000 • Year 3: $1,000,000 • Year 4: $2,500,000 • Year 5 and each year thereafter during the term of this Agreement: $5,000,000 In addition, the Company is required to pay Duke certain milestone payments, as follows: • $2,000,000 upon initiation of the first Phase III clinical trial for an indication other than Autism Spectrum Disorder, for a licensed product comprising cord tissue; and • A number of shares of the Company’s common stock equal to the corresponding percentage of the Company’s fully-diluted equity ownership outstanding as of February 23, 2021 as follows: 7 (1) 5.0% upon execution of the Agreement (which shares have been issued); (2) 2.5% upon cumulative net sales of licensed product and licensed process of $10,000,000; (3) 2.5% upon cumulative net sales of licensed product and licensed process of $75,000,000; (4) 2.5% at each of the following market cap of the Company (based on a rolling 30-day average closing market cap) triggers: o Equal to or greater than $300,000,000, provided such trigger occurs within eighteen (18) months of February 23, 2021; and o Equal to or greater than $500,000,000, provided such trigger occurs within twenty-four (24) months of February 23, 2021.
Unless the Agreement is terminated or renegotiated as permitted per the Agreement, the Company is also required to pay Duke minimum annual royalties beginning on the second anniversary of the effective date as follows: • Year 2: $500,000 • Year 3: $1,000,000 • Year 4: $2,500,000 • Year 5 and each year thereafter during the term of this Agreement: $5,000,000 In addition, the Company is required to pay Duke certain milestone payments, as follows: • $2,000,000 upon initiation of the first Phase III clinical trial for an indication other than Autism Spectrum Disorder, for a licensed product comprising cord tissue; and • A number of shares of the Company’s common stock equal to the corresponding percentage of the Company’s fully-diluted equity ownership outstanding as of February 23, 2021 as follows: (1) 5.0% upon execution of the Agreement (which shares have been issued); (2) 2.5% upon cumulative net sales of licensed product and licensed process of $10,000,000; (3) 2.5% upon cumulative net sales of licensed product and licensed process of $75,000,000; (4) 2.5% at each of the following market cap of the Company (based on a rolling 30-day average closing market cap) triggers: o Equal to or greater than $300,000,000, provided such trigger occurs within eighteen (18) months of February 23, 2021; and o Equal to or greater than $500,000,000, provided such trigger occurs within twenty-four (24) months of February 23, 2021.
As amended, the minimum annual royalties are as follows: • Year 3: $500,000 • Year 4: $1,000,000 • Year 5: $2,500,000 • Year 6 and each year thereafter during the term of this Agreement: $5,000,000 The Amendment also changed the requirements of the Company to pay Duke certain milestone payments, as follows: • $2,000,000 two years after the first patient or subject is treated in the first Phase III clinical trial of a licensed product comprising cord tissue derived MSC for an indication other than Autism Spectrum Disorder.
As amended, the minimum annual royalties are as follows: • Year 3: $500,000 • Year 4: $1,000,000 • Year 5: $2,500,000 • Year 6 and each year thereafter during the term of this Agreement: $5,000,000 The Amendment also changed the requirements of the Company to pay Duke certain milestone payments, as follows: 8 • $2,000,000 two years after the first patient or subject is treated in the first Phase III clinical trial of a licensed product comprising cord tissue derived MSC for an indication other than Autism Spectrum Disorder.
These achievements position Cryo-Cell as an industry quality leader as a cGMP- and cGTP-compliant private cord blood bank with AABB and FACT accreditations. 4 The Company believes that its longevity and experience; value-based pricing strategy; superior customer service; premier technical and operational expertise; state-of-the-art facilities; innovative marketing programs and its expansive client base will continue to provide a competitive advantage.
These achievements position Cryo-Cell as an industry quality leader as a cGMP- and cGTP-compliant private cord blood bank with AABB and FACT accreditations. The Company believes that its longevity and experience; value-based pricing strategy; superior customer service; premier technical and operational expertise; state-of-the-art facilities; innovative marketing programs and its expansive client base will continue to provide a competitive advantage.
Thereafter, the client is charged an annual fee to store the specimen, unless the client has entered into an 18-year pre-paid storage plan or a lifetime pre-paid storage plan. The Company’s corporate headquarters are located in a nearly 18,000 square-foot state-of-the-art current Good Manufacturing Practice and Good Tissue Practice (cGMP/cGTP)-compliant facility.
Thereafter, the client is charged an annual fee to store the specimen, unless the client entered into an 18-year pre-paid storage plan or a lifetime pre-paid storage plan. The Company’s corporate headquarters are located in a nearly 18,000 square-foot state-of-the-art current Good Manufacturing Practice and Good Tissue Practice (cGMP/cGTP)-compliant facility.
Promotional activities also include advertisements in clinical journals and telemarketing activities. In addition, the Company exhibits at conferences, trade shows and other meetings attended by medical professionals. Significant portions of client referrals to the Company are from medical caregiver professionals. To increase awareness among expectant parent audiences, the Company continues to promote its service through internet marketing.
Promotional activities also include advertisements in clinical journals and telemarketing activities. In addition, the Company exhibits at conferences, trade shows and other meetings attended by medical professionals. Significant portions of client referrals to the Company are from medical caregiver professionals. 4 To increase awareness among expectant parent audiences, the Company continues to promote its service through internet marketing.
These products must be disposed in a manner that does not adversely affect the environment from which it came or where disposed of. The Department of Health on the local level primarily regulates systems and associated equipment employed in recovery activities such as back-up generators; therefore, governing specific internal processes.
These products must be disposed in a manner that does not adversely affect the environment from which it came or where disposed of. The Department of Health on the local level primarily regulates systems 6 and associated equipment employed in recovery activities such as back-up generators; therefore, governing specific internal processes.
Stem cells are found in bone marrow where they continue to generate cells throughout our lives. Stem cells can be stored in a cryogenic environment, and upon thawing, infused into a patient. They can be returned to the 1 individual from whom they were taken (autologous) or donated to someone else (allogeneic).
These cells are found in bone marrow where they continue to generate cells throughout our lives. Stem cells can be stored in a cryogenic environment, and upon thawing, infused into a patient. They can be returned to the 1 individual from whom they were taken (autologous) or donated to someone else (allogeneic).
Federal and state laws govern the Company’s ability to obtain and, in some cases, to use and disclose data that we may need to conduct certain activities. The HIPAA requires the Department of Health and Human Services 5 to issue a series of regulations establishing standards for the electronic transmission of certain health information.
Federal and state laws govern the Company’s ability to obtain and, in some cases, to use and disclose data that we may need to conduct certain activities. The HIPAA requires the Department of Health and Human Services to issue a series of regulations establishing standards for the electronic transmission of certain health information.
A vast majority of expectant parents are simply unaware that umbilical 3 cord blood contains a rich supply of non-controversial stem cells and that they can be collected, processed and stored for the potential future use of the newborn and possibly related family members.
A vast majority of expectant parents are simply unaware that umbilical cord blood contains a rich supply of non-controversial stem cells and that they can be collected, processed and stored for the potential future use of the newborn and possibly related family members.
ExtraVault On July 18, 2022, the Company completed the purchase of a 56,000 square foot facility located near the Research Triangle Park in the Regional Commerce Center in Durham, North Carolina (the “New Facility”).
ExtraVault 3 On July 18, 2022, the Company completed the purchase of a 56,000 square foot facility located near the Research Triangle Park in the Regional Commerce Center in Durham, North Carolina (the “New Facility”).
In addition, Duke has provided its manufactured MSCs for one arm of a four arm, placebo controlled, multi-site, double blinded Phase 3 clinical trial, run by Emory University to treat osteoarthritis of the knee, in which cells from three different sources are compared to the current standard of care.
In addition, Duke has provided its manufactured MSCs from cord tissue for one arm of a four arm, placebo controlled, multi-site, double blinded Phase 3 clinical trial, run by Emory University to treat osteoarthritis of the knee, in which cells from three different sources are compared to the current standard of care.
New expectant parent referrals during fiscal 2022 were provided by physicians, midwives and childbirth educators, and by client-to-client referrals and repeat clients storing the stem cells of their additional children. The Company has a national sales force to increase its marketing activities with its clinical referral sources, including physicians, midwives and hospitals.
New expectant parent referrals during fiscal 2023 were provided by physicians, midwives and childbirth educators, and by client-to-client referrals and repeat clients storing the stem cells of their additional children. The Company has a national sales force to increase its marketing activities with its clinical referral sources, including physicians, midwives and hospitals.
At November 30, 2022 and November 30, 2021, the Company was in compliance with these requirements. The division of FDA which regulates HCT/Ps is the Center for Biologics Evaluation and Research (“CBER”). The section of FDA Code of Federal Regulations (“CFR”) pertaining to cord blood is 21 CFR 1271.
At November 30, 2023 and November 30, 2022, the Company was in compliance with these requirements. The division of FDA which regulates HCT/Ps is the Center for Biologics Evaluation and Research (“CBER”). The section of FDA Code of Federal Regulations (“CFR”) pertaining to cord blood is 21 CFR 1271.
The Public Cord Blood Inventory creates a large, ethnically diverse, high quality inventory of available cord blood stem cell units for those in need of life saving therapy. The Company collects cord blood units at hospitals in Florida, Arizona, California, Michigan and Washington.
The Public Cord Blood Inventory creates a large, ethnically diverse, high quality inventory of available cord blood stem cell units for those in need of life saving therapy. The Company collects cord blood units at hospitals in Florida, Arizona, and California.
Stem cells are found in umbilical cord blood ("cord blood stem cells") and can be collected and stored after a baby is born. Over 50,000 cord blood stem cell transplants have been performed to date.
Stem cells are found in umbilical cord blood (“cord blood stem cells”) and can be collected and stored after a baby is born. Over 50,000 cord blood stem cell transplants have been performed to date.
The Company, in combination with its global affiliates, currently stores nearly 500,000 cord blood and cord tissue specimens worldwide for the exclusive benefit of newborn babies and possibly other members of their families. Founded in 1989, the Company was the world’s first private cord blood bank to separate and store stem cells in 1992.
The Company, in combination with its global affiliates, currently stores over 235,000 cord blood and cord tissue specimens worldwide for the exclusive benefit of newborn babies and possibly other members of their families. Founded in 1989, the Company was the world’s first private cord blood bank to separate and store stem cells in 1992.
Competitive Advantages The Company believes that it provides several key advantages over its competitors, including: • The world’s first private cord blood bank, that in combination with its global affiliates, currently stores nearly 500,000 cord blood and cord tissue specimens worldwide, • our status as a cGMP- and cGTP-compliant private cord blood bank with AABB accreditation and FACT (the Foundation for the Accreditation for Cellular Therapy) accreditation, • a state-of-the-art laboratory processing facility, • utilization of a processing method using superior technology that yields the maximum recovery of healthy stem cells and provides superior red blood depletion over all other methods, • a five-compartment cord blood freezer bag that allows for multiple uses of the baby’s cord blood stem cells, • a safe, secure and monitored storage environment, • since inception, 100% viability rate of the Company’s specimens upon thaw for therapeutic use, • a state-of the-art, insulated collection kit that protects cord blood specimens thirty times longer under extreme conditions than competitor’s kits, 2 • 7 day per week processing capability, and • a payment warranty under which the Company agrees to pay $50,000 (effective February 1, 2012 this payment was increased to $75,000 for new clients, effective June 1, 2017 this payment was increased to $100,000 for new clients that choose the premium cord blood processing method, PrepaCyte CB) to its client if the umbilical cord blood product retrieved is used for a stem cell transplant for the donor or an immediate family member and fails to engraft, subject to various restrictions.
Competitive Advantages The Company believes that it provides several key advantages over its competitors, including: • The world’s first private cord blood bank, that in combination with its global affiliates, currently stores over 235,000 cord blood and cord tissue specimens worldwide, • our facility's status as a cGMP- and cGTP-compliant private cord blood bank with AABB accreditation and FACT (the Foundation for the Accreditation for Cellular Therapy) accreditation, • a state-of-the-art laboratory processing facility, • utilization of a processing method using superior technology that yields the maximum recovery of healthy stem cells and provides superior red blood depletion over all other methods, • a five-compartment cord blood freezer bag that allows for multiple uses of the baby’s cord blood stem cells, • a safe, secure and monitored storage environment, • since inception, 100% viability rate of the Company’s specimens upon thaw for therapeutic use, • a state-of the-art, insulated collection kits, • 7 day per week processing capability, and • a payment warranty under which the Company agrees to pay $50,000 (effective February 1, 2012 this payment was increased to $75,000 for new clients, effective June 1, 2017 this payment was increased to $100,000 for new clients that choose the premium cord blood processing method, PrepaCyte CB) to its client if the umbilical cord blood product retrieved is used for a stem cell transplant for the donor or an immediate family member and fails to engraft, subject to various restrictions.
The New Facility has space for not only its existing and future internal storage needs, but also has the capacity to offer third party pharmaceutical companies and medical institutions cold storage services (“ExtraVault” – see www.extravault.com) , to set up a cellular therapy laboratory to manufacture mesenchymal stromal cells from cord tissue (“MSCs”) and the space to consolidate the Cryo-Cell Institute for Cellular Therapies under the same roof.
The New Facility has space for not only its existing and future internal storage needs, but also has the capacity to offer third party pharmaceutical companies and medical institutions cold storage services (“ExtraVault” – see www.extravault.com) , to set up a cellular therapy laboratory to manufacture MSCs from cord tissue and the space to consolidate the Cryo-Cell Institute for Cellular Therapies under the same roof.
License Agreement with Duke University On February 23, 2021, the Company entered into a Patent and Technology License Agreement (the “Duke Agreement”) with Duke, pursuant to which Duke has granted to the Company an exclusive license to make, have made, use, import, offer for sale, sell and otherwise commercially exploit (with the right to sublicense) certain licensed products and to practice certain licensed processes, and the exclusive right to use certain regulatory data and technical information in connection with such licensed patent rights, in the treatment, prevention, cure, reduction, mitigation or other management of certain diseases in humans, except, with regard to certain patent rights, in certain excluded fields of use and in certain territories, subject to Duke’s reserved rights to practice the licensed rights for all research, public service, internal (including clinical) and/or educational purposes. 6 Duke has completed or in progress a total of 19 FDA approved clinical trials related to the Duke License Agreement.
License Agreement with Duke University On February 23, 2021, the Company entered into a Patent and Technology License Agreement (the “Duke Agreement”) with Duke, pursuant to which Duke has granted to the Company an exclusive license to make, have made, use, import, offer for sale, sell and otherwise commercially exploit (with the right to sublicense) certain licensed products and to practice certain licensed processes, and the exclusive right to use certain regulatory data and technical information in connection with such licensed patent rights, in the treatment, prevention, cure, reduction, mitigation or other management of certain diseases in humans, except, with regard to certain patent rights, in certain excluded fields of use and in certain territories, subject to Duke’s reserved rights to practice the licensed rights for all research, public service, internal (including clinical) and/or educational purposes.
Cord Tissue In August 2011, the Company introduced its advanced new cord tissue service, which stores a section of the umbilical cord tissue. Approximately six inches of the cord tissue is procured and transported to the Company’s laboratory for processing, testing and cryopreservation for future potential use. Umbilical cord tissue is a rich source of mesenchymal stem cells (MSCs).
Cord Tissue In August 2011, the Company introduced its advanced new cord tissue service, which stores a section of the umbilical cord tissue. Approximately six inches of the cord tissue is procured and transported to the Company’s laboratory for processing, testing and cryopreservation for future potential use.
Through this Agreement, the Company intends to expand to a triad of core business units to include: (1) its cord blood bank and other storage services; (2) cord blood and cord tissue infusion clinic services initially under the FDA’s Expanded Access Program and in conjunction with the undertaking of cord blood and cord tissue clinical trials to obtain BLA approvals for new indications, and (3) biopharmaceutical manufacturing if BLA(s) are approved by the FDA.
Through the Duke License Agreement, the Company intends to expand to a triad of core business units to include: (1) its cord blood bank and other storage services; (2) cord blood and cord tissue infusion clinic services in conjunction with the undertaking of cord blood and cord tissue clinical trials to obtain BLA approvals for new indications, and (3) biopharmaceutical manufacturing if BLA(s) are approved by the FDA.
The Company also recorded interest expense of $1,092,370 and $1,030,521 for the fiscal years ended November 30, 2022 and 2021, respectively, which is reflected in interest expense on the accompanying consolidated statements of income. International The Company enters into two types of international licensing agreements and in both types, the Company earns revenue on the initial license fees.
The Company also recorded interest expense of $1,077,967 and $1,092,370 for the fiscal years ended November 30, 2023 and 2022, respectively, which is reflected in interest expense on the accompanying consolidated statements of operations. International The Company enters into two types of licensing agreements and in both types, the Company earns revenue on the initial license fees.
In the future, the Company could reverse the liability relating to the RSAs up-front payments over an appropriate period of time, based on the Company’s expectations of the total amount of payments it expects to pay to the other party under the particular RSA.
The Company does not intend to enter into additional RSAs. 9 In the future, the Company could reverse the liability relating to the RSAs up-front payments over an appropriate period of time, based on the Company’s expectations of the total amount of payments it expects to pay to the other party under the particular RSA.
Marketing Agreements The Company has definitive license agreements to market the Company's umbilical cord blood stem cell programs in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Pakistan. 9 Employees At November 30, 2022, the Company had 80 full-time employees and 8 part-time employees on the staff of the Company.
Marketing Agreements The Company has definitive license agreements to market the Company's umbilical cord blood stem cell programs in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. Employees At November 30, 2023, the Company had 82 full-time employees and 6 part-time employees on the staff of the Company.
The Company recorded an RSA accrual of $1,005,598 and $883,265 as of November 30, 2022 and November 30, 2021, respectively, related to interest owed to the RSA holders, which is included in accrued expenses.
The Company recorded an RSA accrual of $1,076,411 and $1,005,598 as of November 30, 2023 and November 30, 2022, respectively, related to interest owed to the RSA holders, which is included in accrued expenses.
If fully executed, in consideration for the work to be performed under the Research Agreement, the Company will be obligated to make 14 equal monthly payments of $187,407 commencing in March or April, 2023 and a final payment of $187,400 upon the submission of a draft proposed publication for peer review and delivered to the Company of the completed IMPACT Study.
In consideration for the work to be performed under the Research Agreement, the Company is obligated to make a total of 14 monthly payments of $187,407 commencing in March 2023 and a final payment of $187,400 upon the submission of a draft proposed publication for peer review and delivered to the Company of the completed IMPACT Study.
MSCs have many unique functions including the ability to inhibit inflammation following tissue damage, to secrete growth factors that aid in tissue repair, and to differentiate into many cell types including neural cells, bone cells, fat cells and cartilage.
Umbilical cord tissue is a rich source of MSCs, which have many unique functions including the ability to inhibit inflammation following tissue damage, to secrete growth factors that aid in tissue repair, and to differentiate into many cell types including neural cells, bone cells, fat cells and cartilage.
As empty spaces result from attrition, the Company has agreed to fill them as soon as 8 possible. The Company reflects these up-front payments as long-term liabilities on the accompanying consolidated financial statements. The Company does not intend to enter into additional RSAs.
As empty spaces result from attrition, the Company has agreed to fill them as soon as possible. The Company reflects these up-front payments as long-term liabilities on the accompanying consolidated financial statements.
The Company made total payments to all RSA holders of $970,037 and $909,829 for the fiscal years ended November 30, 2022 and November 30, 2021 respectively, exclusive of termination and repurchase payments.
The Company made total payments to all RSA holders of $1,009,813 and $970,037 for the fiscal years ended November 30, 2023 and November 30, 2022 respectively, exclusive of termination and repurchase payments.
Upon execution of the acquisition of all of the assets of Cord:Use, the Company acquired the cord blood operations which included both public (PHS 351) and private (PHS 361) banks. The Company closed the Cord:Use location and maintains its operations in Oldsmar, FL.
As part of this oversight authority, the FDA conducts unannounced inspections of cord blood banks. 5 Upon execution of the acquisition of all of the assets of Cord:Use, the Company acquired the cord blood operations which included both public (PHS 351) and private (PHS 361) banks. The Company closed the Cord:Use location and maintains its operations in Oldsmar, FL.
In addition, during the Royalty Term, subject to certain minimum royalties, the Company is required to pay Duke royalties based on a portion of the net sales varying from 7% - 12.5% based on volume. The Company is also obligated to pay certain legal fees and expenses associated with related patents.
In addition, during the Royalty Term, subject to certain minimum royalties, the Company is required to pay Duke royalties based on a portion of the net sales varying from 7% - 12.5% based on volume.
The final rule allows the FDA to inspect cord blood laboratories to determine compliance with the provisions of 21 CFR Part 1271. As part of this oversight authority, the FDA conducts unannounced inspections of cord blood banks.
The final rule allows the FDA to inspect cord blood laboratories to determine compliance with the provisions of 21 CFR Part 1271.
The Company intends to fund additional clinical trials, as necessary, to provide the proof of efficacy that is required by the FDA to issue BLAs for some or all of the indications mentioned above.
Duke has completed or has in progress a total of 19 FDA approved clinical trials related to the Duke License Agreement. The Company intends to fund additional clinical trials, as necessary, to provide the proof of efficacy that is required by the FDA to issue BLAs for some or all of the indications mentioned above.
The Second Amendment also added a new ctMSC milestone that the Company will open a manufacturing facility for the licensed product prior to the first initiation of a Phase III clinical trial using ctMSC’s.
The Second Amendment added a new milestone payment upon FDA approval of the first licensed product comprising cord tissue derived MSC (“ctMSC”) for autism spectrum disorder. The Second Amendment also added a new ctMSC milestone that the Company will open a manufacturing facility for the licensed product prior to the initiation of a Phase III clinical trial using ctMSC’s.
During fiscal 2011, the Company introduced the advanced new cord tissue service, which stores a section of the umbilical cord tissue. The Company offers the cord tissue service in combination with the umbilical cord blood service. This service is growing; however, the umbilical cord blood service continues to be the Company’s main focus.
During fiscal 2011, the Company introduced the advanced new cord tissue service, which stores a section of the umbilical cord tissue. The Company offers the cord tissue service in combination with the umbilical cord blood service.
The Agreement extends until expiration of the last Royalty Term, unless sooner terminated as provided in the Agreement. Royalty Term generally means the period beginning on the first commercial sale of each licensed product or licensed process and ending fifteen (15) years thereafter.
Royalty Term generally means the period beginning on the first commercial sale of each licensed product or licensed process and ending fifteen (15) years thereafter.
Previously, the FDA has granted Duke the right to treat certain patients with infusions of cord blood under its Expanded Access Program.
Previously, the FDA has granted Duke the right to treat certain patients with infusions of cord blood under its Expanded Access Program. In November 2023, Duke University transferred to the Company an IND relating to the use of umbilical cord blood to treat children with cerebral palsy.
On February 17, 2023, subsequent to the balance sheet date, the Company entered into a Second Amendment to the License Agreement (the “Second Amendment”) with Duke. The Second Amendment changes the license fee due to Duke. The final $2,000,000 payment that was due on February 23, 2023 was removed and the license fee is paid in full.
The Company is also obligated to pay certain legal fees and expenses associated with related patents. 7 On February 17, 2023, Company entered into a Second Amendment to the License Agreement (the “Second Amendment”) with Duke. The Second Amendment changes the license fee due to Duke. The final payment of $2,000,000 was due on February 23, 2023.
As of the twelve months ended November 30, 2022 and 2021, the Company recorded $960,774 and $720,580, respectively, in amortization expense which is reflected in amortization expense on the accompanying consolidated statements of income.
As of the twelve months ended November 30, 2023 and 2022, the Company recorded $960,774 and $960,774, respectively, in amortization expense which is reflected in amortization expense on the accompanying consolidated statements of operations. During fiscal 2023, the Company recognized that there were indications of impairment of the assets associated with the Duke license agreement.
As part of the Second Amendment, the Company also agreed to enter into a sponsored research agreement (the “Research Agreement”) with Duke to provide funding to complete the Duke IMPACT Study. If the Research Agreement is not entered into by March 1, 2023, the Second Amendment will be voided and the License Agreement will be unchanged.
As part of the Second Amendment, on March 3, 2023, the Company entered into the Clinical Study and Research Agreement (the “Research Agreement”) with Duke to provide funding to complete the Duke IMPACT Study ("the Study"). The Second Amendment allocated the $2,000,000 required payment toward the funding and completion of the Study.
Due to equipment delivery delays, the Company is projecting to open the Cryo-Cell Institute for Cellular Therapies and begin infusing patients during fiscal 2024. Subsidiaries and Joint Ventures Since its inception, Cryo-Cell has entered into a number of business activities through subsidiaries and joint ventures, including the following activities and those described under “International” below.
Due to equipment delivery delays and delays in FDA filings, the Company is projecting to open the Cryo-Cell Institute for Cellular Therapies and begin infusing patients during fiscal 2024.
The Company believes that parents will want to save and store these cells for potential future use by their family, either for the donor or for another family member. Moreover, researchers believe they may be utilized in the future for treating diseases that currently have no cure.
The Company believes that many parents will want to save and store these cells for potential future use by their family, either for the donor or for another family member. Today, stem cell transplants are known and accepted treatments for at least 78 diseases, we believe, a number of them life-threatening.
In addition, the cellular products cryogenic storage area has been designed as a “bunker,” with enhanced provisions for security, building fortification for environmental element protection and back-up systems for operational redundancies. The Company believes that it was the first private bank to process cord blood in a technologically and operationally advanced cGMP/cGTP-compliant facility.
The Company believes that it was the first private bank to process cord blood in a technologically and operationally advanced cGMP/cGTP-compliant facility.
Food and Drug Administration (“FDA”) 21 CFR Part 1271, effective in May 2005, requires human cellular and tissue-based products to be manufactured in compliance with good tissue practices (cGTPs). The Company’s laboratory processing facility contains a Class 10,000 clean room and Class 100 environments for the processing of cord blood stem cells and other cellular tissues.
Food and Drug Administration (“FDA”) 21 CFR Part 1271, effective in May 2005, requires human cellular and tissue-based products to be manufactured in compliance with good tissue practices (cGTPs). In addition, the cellular products cryogenic storage area has been designed as a “bunker,” with enhanced provisions for security, building fortification for environmental element protection and back-up systems for operational redundancies.
If the Duke MSCs prove to be the most efficacious, the Company intends to design and fund a Phase 3 registration trial for that indication. The readout from the Emory trial is expected in 2023. The Company purchased a 56,000 square feet facility in Durham in which it plans to open the Cryo-Cell Institute for Cellular Therapies.
The results did not show any benefit from any of the sources compared to the current standard of care. The Company purchased a 56,000 square feet facility in Durham in which it plans to open the Cryo-Cell Institute for Cellular Therapies.
Removed
MSCs are increasingly being researched in regenerative medicine for a wide range of conditions including heart and kidney disease, ALS, wound healing and auto-immune diseases. MSCs from several different tissues are being tested in clinical trials for efficacy. Specifically, cells derived from cord tissue are currently being used in many clinical trials.
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With continued research in this area of medical technology, other therapeutic uses for cord blood stem cells are being explored. Moreover, researchers believe they may be utilized in the future for treating diseases that currently have no cure.
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Disorders being treated include cardiomyopathy, ulcerative colitis, diabetes, anemia, autism and cirrhosis of the liver.
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It is the Company’s mission to inform expectant parents and their prenatal care providers of the potential medical benefits from preserving stem cells and to provide them the means and processes for collection and storage of these cells.
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The Company intends to file an IND to conduct a clinical trial for either cerebral palsy or autism and will ask for similar rights to treat pediatric patients with certain neurological disorders (such as CP or autism) at its clinic. There can be no assurance that the FDA will approve of this or any IND filed by the Company.
Added
Due to the limited storage capacity of its existing facility in Oldsmar, FL, the Company purchased a 56,000 square foot facility located near the Research Triangle Park in the Regional Commerce Center in Durham, North 2 Carolina ("New Facility").
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The Second Amendment added a new milestone payment of $1,000,000 upon FDA approval of the first licensed product comprising cord tissue derived MSC (“ctMSC”) for autism spectrum disorder.
Added
The Company believes it will have space for not only its existing and future internal storage needs, but also will have the capacity to offer third party pharmaceutical companies and medical institutions storage services, to set up a cellular therapy laboratory to manufacture mesenchymal stromal cells ("MSCs") and the Cryo-Cell Institute for Cellular Therapies under the same roof.
Removed
The Company has executed the sponsored research agreement and is waiting for Duke’s signature.
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MSCs are increasingly being researched in regenerative medicine for a wide range of conditions.
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Duke agrees this will be no later than September 30, 2024.
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A vast majority of expectant parents are simply unaware that umbilical cord blood contains a rich supply of non-controversial stem cells and that they can be collected, processed and stored for the potential future use of the newborn and possibly related family members.
Removed
Per the License and Royalty Agreement with LifeCell, there was a $1,000,000 cap on the amount of royalty due to the Company per year and a $10,000,000 cap on the amount of royalties due to the Company for the term of the License and Royalty Agreement.
Added
A baby’s stem cells are a perfect match for the baby throughout its life and have a 1-in-4 chance of being a perfect match and a 3-in-4 chance of being an acceptable match for a sibling.
Removed
Since inception of the License and Royalty Agreement, the Company has recorded approximately $10,000,000 in royalty income due under the terms of the License and Royalty Agreement, of which, LifeCell has paid the Company in full as of November 30, 2022.
Added
There is no assurance, however, that a perfect match means the cells could be used to treat certain diseases of the newborn or a relative. Today, it is still common for the cord blood (the blood remaining in the umbilical cord and placenta) to be discarded at the time of birth as medical waste.
Removed
As of November 30, 2020, the Company had recognized all of the licensee income due under the License and Royalty Agreement with LifeCell.
Added
Despite the potential benefits of umbilical cord blood stem cell preservation, the number of parents of newborns participating in stem cell preservation is still relatively small compared to the number of births (four million per annum) in the United States.
Added
Some reasons for this low level of market penetration are the misperception of the high cost of stem cell storage and a general lack of awareness of the benefits of stem cell preservation programs. However, evolving medical technology could significantly increase the utilization of the umbilical cord blood for transplantation and/or other types of treatments.
Added
The Company believes it offers the highest quality, highest value service targeted to a broad base of the market. We intend to maximize our growth potential through our superior quality, value-driven competitive leadership position, product differentiation, an embedded client base, increased public awareness and accelerated market penetration.
Added
In February 2024, the Company submitted the protocol related to a Phase 3 clinical trial under this IND utilizing allogeneic umbilical cord blood to treat children with cerebral palsy and requested RMAT designation. The Agreement extends until expiration of the last Royalty Term, unless sooner terminated as provided in the Agreement.
Added
Duke agreed this will be no later than September 30, 2024. The additional costs to be incurred above $2 million represent additional consideration payable to Duke under the Research Agreement. The nature of these costs is the outsourcing of funding for research and development (R&D) of the licensed product.
Added
The Data Safety Monitoring Board for the IMPACT Study recently has determined that the trial’s targeted accrual has been reached and consists of 137 patients.
Added
The Company evaluated the triggering events that existed as of November 30, 2023, tested the asset group for recoverability and measured the long-lived asset impairment.
Added
During the fourth quarter of fiscal 2023, the results received from a phase 2/3 trial to treat osteoarthritis of the knee conducted to compare the effectiveness of an injection of a corticosteroid control to mesenchymal stem cell (MSC) preparations from autologous bone marrow concentrate (BMAC), adipose derived stem cells in the form of Stromal Vascular Fraction (SVF), and third-party human mesenchymal stem cells manufactured from umbilical cord tissue at Duke University for the treatment of unilateral Knee Osteoarthritis (OA).
Added
No benefit was shown from any of the sources compared to the current standard of care.
Added
Given these results (that included the Duke MSCs to which the Company licensed the exclusive rights) and other factors, it was determined that the uncertain future cash flows from the Duke license agreement may not be enough to recover the carrying value of the asset resulting in a fully impaired asset.
Added
On August 10, 2023, the Company entered into a Master Services Agreement with Emmes Biopharma Services LLC ("Emmes") serving as the Company's contract research organization, to conduct a phase 3 clinical trial infusing allogeneic umbilical cord blood into children with cerebral palsy.
Added
In consideration for the services to be rendered by Emmes, the Company will make payments in accordance with the budget and payment scheduled outlined in the work order. The period of performance is November 1, 2023 through April 6, 2028. The total fees will be $6,352,291.
Added
Included in the total fees is a $100,000 payment due upon execution and a monthly management fee of $21,862 per month payable for 53 months commencing during the first quarter of 2024. The total cost of the trial is currently estimated at $20 million.
Added
Revenue Sharing Agreements (“RSAs”) The Company entered into RSAs prior to 2002 with various third and related parties.
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
43 edited+11 added−2 removed141 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
43 edited+11 added−2 removed141 unchanged
2022 filing
2023 filing
Biggest changeIn general, Section 203 prohibits a publicly-held Delaware corporation from engaging, under certain circumstances, in a business combination with an interested stockholder for a period of three years following the date the person became an interested stockholder unless: prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; or upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or at or subsequent to the date of the transaction, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66-2/3% of the outstanding voting stock which is not owned by the interested stockholder.
Biggest changeIn general, Section 203 prohibits a publicly-held Delaware corporation from engaging, under certain circumstances, in a business combination with an interested stockholder for a period of three years following the date the person became an interested stockholder unless: prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; or upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or at or subsequent to the date of the transaction, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66-2/3% of the outstanding voting stock which is not owned by the interested stockholder. 23 Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the “interested stockholder” and an “interested stockholder” is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting stock.
Our growth and future license income and return on investments from these sources will be impacted by these challenges, which include: • failure of local laws to provide the same degree of protection against infringement of our intellectual property rights; • certain laws and business practices that could prevent our business from operating or favor local competitors, which could slow or limit our growth in international markets; • entering into licensing agreements with organizations capable of undertaking and sustaining operations; • the expense of entering into licensing and investment arrangements in new foreign markets; • changes in local political, economic, social, and labor conditions, which may adversely affect our business; • risks associated with trade restrictions and foreign import requirements, including the importation and exportation of our solutions, as well as changes in trade, tariffs, restrictions or requirements; • heightened risks of unethical, unfair or corrupt business practices, actual or claimed, in certain geographies; • fluctuations in currency exchange rates, which may make doing business with us less appealing as our contracts are generally denominated in U.S. dollars; • greater difficulty in enforcing contracts; • lack of brand awareness that can make commercializing our products more difficult and expensive; • management communication and integration problems resulting from cultural differences and geographic dispersion; • the uncertainty and limitation of protection for intellectual property rights in some countries; • potentially different pricing environments, longer payment cycles in some countries, increased credit risk, and higher levels of payment fraud; • uncertainty regarding liability for products and services, including uncertainty as a result of local laws and lack of legal precedent; • different employee/employer relationships, existence of workers’ councils and labor unions, and other challenges caused by distance, language, and cultural differences, making it harder to do business in certain jurisdictions; and • compliance with complex foreign and U.S. laws and regulations applicable to international operations may increase the cost of doing business in international jurisdictions.
Our growth and future license income and return on investments from these sources will be impacted by these challenges, which include: • failure of local laws to provide the same degree of protection against infringement of our intellectual property rights; • certain laws and business practices that could prevent our business from operating or favor local competitors, which could slow or limit our growth in international markets; • entering into licensing agreements with organizations capable of undertaking and sustaining operations; • the expense of entering into licensing and investment arrangements in new foreign markets; • changes in local political, economic, social, and labor conditions, which may adversely affect our business; 17 • risks associated with trade restrictions and foreign import requirements, including the importation and exportation of our solutions, as well as changes in trade, tariffs, restrictions or requirements; • heightened risks of unethical, unfair or corrupt business practices, actual or claimed, in certain geographies; • fluctuations in currency exchange rates, which may make doing business with us less appealing as our contracts are generally denominated in U.S. dollars; • greater difficulty in enforcing contracts; • lack of brand awareness that can make commercializing our products more difficult and expensive; • management communication and integration problems resulting from cultural differences and geographic dispersion; • the uncertainty and limitation of protection for intellectual property rights in some countries; • potentially different pricing environments, longer payment cycles in some countries, increased credit risk, and higher levels of payment fraud; • uncertainty regarding liability for products and services, including uncertainty as a result of local laws and lack of legal precedent; • different employee/employer relationships, existence of workers’ councils and labor unions, and other challenges caused by distance, language, and cultural differences, making it harder to do business in certain jurisdictions; and • compliance with complex foreign and U.S. laws and regulations applicable to international operations may increase the cost of doing business in international jurisdictions.
As a result, the exclusive forum provision will not apply to suits brought to 22 enforce any duty or liability created by the Securities Act or any other claim for which the federal and state courts have concurrent jurisdiction. Delaware anti-takeover statute. We are subject to the provisions of Section 203 of the DGCL regulating corporate takeovers.
As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Securities Act or any other claim for which the federal and state courts have concurrent jurisdiction. Delaware anti-takeover statute. We are subject to the provisions of Section 203 of the DGCL regulating corporate takeovers.
The Company’s operations and performance depend significantly on global and regional economic conditions. 11 Adverse macroeconomic conditions, including inflation, slower growth or recession, new or increased tariffs, changes to fiscal and monetary policy, tighter credit, higher interest rates, high unemployment and currency fluctuations could materially adversely affect demand for the Company’s products and services.
The Company’s operations and performance depend significantly on global and regional economic conditions. Adverse macroeconomic conditions, including inflation, slower growth or recession, new or increased tariffs, changes to fiscal and monetary policy, tighter credit, higher interest rates, high unemployment and currency fluctuations could materially adversely affect demand for the Company’s products and services.
As of January 21, 2004, all cord blood banks are required to register with the FDA. Any cord blood bank which has a laboratory should be on the web page of FDA Registered Establishments. 2. The second rule was published May 20, 2004, and became effective May 25, 2005. It pertains to donor eligibility.
As of January 21, 2004, all cord blood banks are required to register with the FDA. Any cord blood bank which has a laboratory should be on the web page of FDA Registered Establishments. 15 2. The second rule was published May 20, 2004, and became effective May 25, 2005. It pertains to donor eligibility.
Further, if we should substantially increase our operating expenses to increase sales and marketing or to develop our technology and cord blood processing and storage systems, and such expenses are not subsequently followed by increased revenues, our operating performance and results would be adversely affected and if sustained could have a material adverse effect on our business.
Further, if we should substantially increase our operating expenses to increase sales and marketing or to develop our technology and cord blood processing and storage systems, and such expenses are not subsequently followed by 11 increased revenues, our operating performance and results would be adversely affected and if sustained could have a material adverse effect on our business.
Our systems and operations are vulnerable to damage or interruption from fire, flood, equipment failure, break-ins, tornadoes and similar events for which we do not have redundant systems or a formal disaster recovery plan and may not carry sufficient business interruption insurance to compensate us for losses that may occur.
Our systems and operations 14 are vulnerable to damage or interruption from fire, flood, equipment failure, break-ins, tornadoes and similar events for which we do not have redundant systems or a formal disaster recovery plan and may not carry sufficient business interruption insurance to compensate us for losses that may occur.
International trade disputes could result in tariffs and other protectionist measures that could adversely affect the Company’s business. Already the Ukrainian-Russian conflict has caused market volatility, a sharp increase in certain commodity prices, such as wheat and oil, and an increasing number and frequency of cybersecurity threats.
International trade disputes could result in tariffs and other protectionist measures that could adversely affect the Company’s business. 18 Already the Ukrainian-Russian conflict has caused market volatility, a sharp increase in certain commodity prices, such as wheat and oil, and an increasing number and frequency of cybersecurity threats.
The outcome of clinical trials is inherently uncertain. Clinical development is lengthy and uncertain. Our public blood bank research involves clinical testing, which is expensive, complex and lengthy, and subject to various regulations, including the “Common Rule.” The Common Rule is a rule of ethics in the United States regarding biomedical and behavioral research involving human subjects.
The outcome of clinical trials is inherently uncertain. Clinical development is lengthy and uncertain. Our public blood bank research involves clinical testing, which is expensive, complex and lengthy, and subject to various regulations, including the “Common Rule.” The Common Rule is a rule of ethics in the United 12 States regarding biomedical and behavioral research involving human subjects.
The PrepaCyte CB (Cord Blood) Processing System is intended for use in cell processing laboratories to process and store total nucleated cells (TNC) from human umbilical cord blood, prior to banking. The device is 15 composed of a bag with separation media. The system is 510(k) cleared as a Class II device.
The PrepaCyte CB (Cord Blood) Processing System is intended for use in cell processing laboratories to process and store total nucleated cells (TNC) from human umbilical cord blood, prior to banking. The device is composed of a bag with separation media. The system is 510(k) cleared as a Class II device.
Competition for these types of employees is intense due to the limited number of qualified professionals and the high demand for them, particularly 14 in the Tampa Bay area of Florida, where our headquarters are located. We have in the past experienced difficulty in recruiting qualified personnel, especially in the area of sales.
Competition for these types of employees is intense due to the limited number of qualified professionals and the high demand for them, particularly in the Tampa Bay area of Florida, where our headquarters are located. We have in the past experienced difficulty in recruiting qualified personnel, especially in the area of sales.
The IND is the means through which the sponsor technically obtains this exemption from the FDA. This approval would be required in the case of a clinical trial. We may be required to spend substantial amounts to comply with legislative and regulatory initiatives relating to patient privacy.
The IND is the means through 16 which the sponsor technically obtains this exemption from the FDA. This approval would be required in the case of a clinical trial. We may be required to spend substantial amounts to comply with legislative and regulatory initiatives relating to patient privacy.
We and our 12 strategic collaborators, including Duke, also may experience unforeseen events during, or as a result of, any clinical trials that we or they conduct that could delay or prevent us or them from successfully developing our investigational medicines and gaining approval from regulators.
We and our strategic collaborators, including Duke, also may experience unforeseen events during, or as a result of, any clinical trials that we or they conduct that could delay or prevent us or them from successfully developing our investigational medicines and gaining approval from regulators.
These claims could result in litigation and could require us to make our software source code freely available, purchase a costly license or cease offering the implicated products or services unless and until we can re-engineer them to avoid infringement.
These claims could result in litigation and could require us to make our software 19 source code freely available, purchase a costly license or cease offering the implicated products or services unless and until we can re-engineer them to avoid infringement.
The defense and prosecution of such intellectual property claims are costly, time-consuming, divert the attention of 19 management and technical personnel and could result in substantial cost and uncertainty regarding our future viability.
The defense and prosecution of such intellectual property claims are costly, time-consuming, divert the attention of management and technical personnel and could result in substantial cost and uncertainty regarding our future viability.
It governed Institutional Review Boards for oversight of human research. It is encapsulated in the 1991 revision to the U.S. Department of Health and Human Services Title 45 CFR 46 Subparts A, B, C and D. Subpart A. The outcome of clinical tries is inherently uncertain.
It governed Institutional Review Boards for oversight of human research. It is encapsulated in the 1991 revision to the U.S. Department of Health and Human Services Title 45 CFR 46 Subparts A, B, C and D. Subpart A. The outcome of clinical trials is inherently uncertain.
If we fail to meet any of the continued listing standards of the NYSE, our common stock could be delisted from the exchange. These continued listing standards include specifically enumerated criteria, including compliance with the NYSE's corporate governance requirements.
If we fail to meet any of the continued listing standards of the NYSE, our common stock could be delisted from the exchange. These continued listing standards include specifically enumerated criteria, including compliance with the NYSE's corporate governance requirements. If we fail to comply with the NYSE's continued listing standards, we may be delisted from the NYSE.
Based upon shares of common stock outstanding as of November 30, 2022, our executive officers, directors, 5% stockholders (known to us through publicly available information) and their affiliates beneficially owned approximately 47% of our voting stock. Therefore, these stockholders have the ability to substantially influence us through this ownership position.
Based upon shares of common stock outstanding as of November 30, 2023, our executive officers, directors, 5% stockholders (known to us through publicly available information) and their affiliates beneficially owned approximately 51% of our voting stock. Therefore, these stockholders have the ability to substantially influence us through this ownership position.
Individuals who use or come in contact with the specimens may file 16 claims related to their use and these claims could result in litigation that could be expensive to defend or result in judgements that exceed our resources and our insurance coverage. Any such litigations and judgement could adversely affect our business, financial condition and results of operations.
Individuals who use or come in contact with the specimens may file claims related to their use and these claims could result in litigation that could be expensive to defend or result in judgments that exceed our resources and our insurance coverage. Any such litigations and judgment could adversely affect our business, financial condition and results of operations.
Violations of these laws and regulations could result in fines and penalties, criminal sanctions against us, our officers, or our employees, prohibitions on the conduct of our business and on our ability to offer our products and services in one or more countries, and could also materially affect our brand, our international expansion efforts, our ability to attract and retain employees, our business, and our operating results. 17 The occurrence of any one of these risks could harm our international business and, consequently, our results of operations.
Violations of these laws and regulations could result in fines and penalties, criminal sanctions against us, our officers, or our employees, prohibitions on the conduct of our business and on our ability to offer our products and services in one or more countries, and could also materially affect our brand, our international expansion efforts, our ability to attract and retain employees, our business, and our operating results.
Approximately six inches of the cord tissue is procured and transported to the Company’s laboratory for processing, testing and cryopreservation for future potential use. Umbilical cord tissue is a rich source of mesenchymal stromal cells (“MSCs”).
Approximately six inches of the cord tissue is procured and transported to the Company’s laboratory for processing, testing and cryopreservation for future potential use. Umbilical cord tissue is a rich source of MSCs.
In addition, a clinical trial may be suspended or terminated by us, the FDA, the board overseeing the trial, or other regulatory authorities due to a number of factors, including: • failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols; • inspection of the clinical trial operations or trial sites by the FDA or other regulatory authorities; • inspection of manufacturing and drug packaging operations by regulatory authorities; • unforeseen safety issues or lack of effectiveness; and • lack of adequate funding to continue the clinical trial. 13 We cannot assure you that clinical trials will demonstrate the safety or effectiveness of any of our product candidates, or will otherwise satisfy regulatory requirements.
In addition, a clinical trial may be suspended or terminated by us, the FDA, the board overseeing the trial, or other regulatory authorities due to a number of factors, including: 13 • failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols; • inspection of the clinical trial operations or trial sites by the FDA or other regulatory authorities; • inspection of manufacturing and drug packaging operations by regulatory authorities; • unforeseen safety issues or lack of effectiveness; and • lack of adequate funding to continue the clinical trial.
Additionally, the Company will require capital to pay for the build out of the new property purchased in July 2022 and start up expenses relating to the planned infusion clinic, to finance clinical trials related to the Duke Agreement, to develop biopharmaceutical manufacturing capabilities related to MSCs and for capital expenditures for software enhancements and purchases of equipment and obligations under the Duke Agreement.
Additionally, the Company will require capital to pay for the startup expenses relating to the planned infusion clinic, to finance clinical trials related to the Duke Agreement, to develop biopharmaceutical manufacturing capabilities related to MSCs and for capital expenditures for software enhancements and purchases of equipment and obligations under the Duke Agreement.
If our security measures are breached, or if our services are subject to attacks that degrade or deny the ability of users to access our platforms, our platforms and applications may be perceived as not being secure, customers and suppliers may curtail or stop using our services, and we may incur significant legal and financial exposure.
If required, we may not be able to obtain such royalty or license agreements or obtain them on terms acceptable to us. 20 If our security measures are breached, or if our services are subject to attacks that degrade or deny the ability of users to access our platforms, our platforms and applications may be perceived as not being secure, customers and suppliers may curtail or stop using our services, and we may incur significant legal and financial exposure.
We are a “smaller reporting company” and, as a result of the reduced disclosure and governance requirements applicable to smaller reporting companies, our common stock may be less attractive to investors. 21 We are a “smaller reporting company,” meaning that we have a public float of less than $250 million, have annual revenues of less than $100 million during the most recently completed fiscal year and the value of our voting and nonvoting common stock held by non-affiliates on the last business day of our second fiscal quarter in that fiscal year is less than $700.0 million.
We are a “smaller reporting company,” meaning that we have a public float of less than $250 million, have annual revenues of less than $100 million during the most recently completed fiscal year and the value of our voting and nonvoting common stock held by non-affiliates on the last business day of our second fiscal quarter in that fiscal year is less than $700.0 million.
As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers, which may adversely affect investor confidence in us and could cause our business or stock price to suffer. 20 If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
These provisions, which are summarized below, are expected to discourage certain types of coercive takeover practices and inadequate takeover bids. These provisions are also designed, in part, to encourage persons seeking to acquire control of us to first negotiate with our board of directors. Certificate of Incorporation and Bylaws.
These provisions are also designed, in part, to encourage persons seeking to acquire control of us to first negotiate with our board of directors. Certificate of Incorporation and Bylaws.
Our ESG practices may not meet the standards of all of our stakeholders and advocacy groups may campaign for further changes. A failure, or perceived failure, to respond to expectations of all parties could cause harm to our business and reputation and have a negative impact on the market price of our securities.
A failure, or perceived failure, to respond to expectations of all parties could cause harm to our business and reputation and have a negative impact on the market price of our securities.
Additionally, operating in international markets requires significant management attention and financial resources. We cannot be certain that the investment and additional resources required to operate in other countries will produce desired levels of revenue or profitability. We are subject to the Foreign Corrupt Practices Act.
The occurrence of any one of these risks could harm our international business and, consequently, our results of operations. Additionally, operating in international markets requires significant management attention and financial resources. We cannot be certain that the investment and additional resources required to operate in other countries will produce desired levels of revenue or profitability.
We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
We may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall. Accordingly, any significant shortfall in revenues would likely have an immediate material adverse effect on our business, operating results and financial condition.
Accordingly, any significant shortfall in revenues would likely have an immediate material adverse effect on our business, operating results and financial condition.
The Company believes that the resolution of these matter should not have a material adverse effect on the Company’s business, consolidated financial position or results of operations.
From time to time, the Company is subject to proceedings, lawsuits, contract disputes and other claims in the normal course of its business. The Company believes that the resolution of these matter should not have a material adverse effect on the Company’s business, consolidated financial position or results of operations.
There can be no assurance that we will be able to grow or effectively operate our business. To the extent we are unable to achieve growth in our business we may continue to incur losses. We cannot assure you that we will be successful or make progress in the growth and operation of our business.
To the extent we are unable to achieve growth in our business we may continue to incur losses. We cannot assure you that we will be successful or make progress in the growth and operation of our business. Our success will depend in large part on widespread market acceptance of cryopreservation of stem cells.
Increasing use of social media could give rise to liability, breaches of data security, or reputational damage. We and our employees are increasingly utilizing social media tools as a means of communication both internally and externally.
We and our employees are increasingly utilizing social media tools as a means of communication both internally and externally.
As cyber threats continue to evolve, we may be required to expend additional resources to enhance our cybersecurity measures or to investigate or remediate any vulnerabilities or breaches. 18 Although we maintain insurance to protect ourselves in the event of a breach or disruption of certain of our information systems, we cannot ensure that the coverage is adequate to compensate for any damages that may be incurred.
Although we maintain insurance to protect ourselves in the event of a breach or disruption of certain of our information systems, we cannot ensure that the coverage is adequate to compensate for any damages that may be incurred. Increasing use of social media could give rise to liability, breaches of data security, or reputational damage.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.
These inherent limitations include the realities that judgments in decision-making can be faulty, and that 21 breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.
The Company anticipates funding these capital expenditures with cash-on-hand, cash flows from future operations, the Company’s revolving line of credit (see Note 4) and potential additional debt financing. We may not be able to successfully grow or operate our business. Our business may decline, may not grow or may grow more slowly than expected.
We currently anticipate that over $50 million will be needed over the next 5 years to fund these activities. The Company anticipates funding these capital expenditures with cash-on-hand, cash flows from future operations, the Company’s revolving line of credit (see Note 4), potential additional debt financing and potential equity sales.
This indemnification policy could result in substantial expenditures, which we may be unable to recoup. If these expenditures are significant or involve issues which result in significant liability for our key personnel, we may be unable to continue operating as a going concern.
If these expenditures are significant or involve issues which result in significant liability for our key personnel, we may be unable to continue operating as a going concern. 22 Certain provision of our charter, bylaws and Delaware law may delay, defer or prevent a tender offer or takeover attempt that public stockholders might consider in their best interest.
Our success will depend in large part on widespread market acceptance of cryopreservation of stem cells. Our current and future expense levels are based on our operating plans and estimates of future revenues and are subject to increase as we implement our strategy.
Our current and future expense levels are based on our operating plans and estimates of future revenues and are subject to increase as we implement our strategy. We may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall.
Increasing scrutiny and changing expectations from investors, customers, and governments with respect to Environmental, Social and Governance (“ESG”) policies and practices may cause us to incur additional costs or expose us to additional risks. There has been increasing public focus and scrutiny from investors, governmental and nongovernmental organizations, and customers on corporate ESG practices.
Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected. Increasing scrutiny and changing expectations from investors, customers, and governments with respect to Environmental, Social and Governance (“ESG”) policies and practices may cause us to incur additional costs or expose us to additional risks.
Certain provision of our charter, bylaws and Delaware law may delay, defer or prevent a tender offer or takeover attempt that public stockholders might consider in their best interest. Certain provisions of Delaware law, our certificate of incorporation and our bylaws could have the effect of delaying, deferring or discouraging another party from acquiring control of us.
Certain provisions of Delaware law, our certificate of incorporation and our bylaws could have the effect of delaying, deferring or discouraging another party from acquiring control of us. These provisions, which are summarized below, are expected to discourage certain types of coercive takeover practices and inadequate takeover bids.
Failure to attract, assimilate, and retain personnel would have a material adverse effect on our business and potential growth. From time to time, the Company is subject to proceedings, lawsuits, contract disputes and other claims in the normal course of its business.
Failure to attract, assimilate, and retain personnel would have a material adverse effect on our business and potential growth. Because our industry is subject to rapid technological and therapeutic changes and new developments, our future success will depend on the continued viability of the use of stem cells.
Broad use and acceptance of our service requires that we incur marketing expenditures and devote time in connection with education and awareness of consumers and medical practitioners. Additionally, negative publicity regarding the uses of stem cells, including negative results in clinical trials for efficacy regarding the uses of stem cells could adversely affect market acceptance.
Broad use and acceptance of our service requires marketing expenditures and education and awareness of consumers and medical practitioners, and the time and expense required to accomplish such education and awareness of our services and its potential benefits could adversely affect market acceptance.
Removed
If required, we may not be able to obtain such royalty or license agreements or obtain them on terms acceptable to us.
Added
We may not be able to successfully grow or operate our business. Our business may decline, may not grow or may grow more slowly than expected. There can be no assurance that we will be able to grow or effectively operate our business.
Removed
Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the “interested stockholder” and an “interested stockholder” is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting stock.
Added
We cannot assure you that clinical trials will demonstrate the safety or effectiveness of any of our product candidates, or will otherwise satisfy regulatory requirements.
Added
Our success depends to a significant extent upon our ability to enhance and expand the use of and utility of our services so that they gain increased market acceptance. There can be no assurance that expectant parents will use our services or that our services will provide competitive advantages with current or future technologies.
Added
Failure to achieve increased market acceptance could have a material adverse effect on our business, financial condition and results of operations. The use of stem cells in the treatment of disease is subject to potentially revolutionary technological, medical and therapeutic changes. Future technological and medical developments could render the use of stem cells and our equipment obsolete and unmarketable.
Added
We may incur significant costs in replacing or modifying equipment in which we have already made a substantial investment prior to the end of its anticipated useful life. In addition, there may be significant advances in other treatment methods, such as genetics, or in disease prevention techniques, which could significantly reduce the need for the services we provide.
Added
We are subject to the Foreign Corrupt Practices Act.
Added
As cyber threats continue to evolve, we may be required to expend additional resources to enhance our cybersecurity measures or to investigate or remediate any vulnerabilities or breaches.
Added
As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers, which may adversely affect investor confidence in us and could cause our business or stock price to suffer.
Added
There has been increasing public focus and scrutiny from investors, governmental and nongovernmental organizations, and customers on corporate ESG practices. Our ESG practices may not meet the standards of all of our stakeholders and advocacy groups may campaign for further changes.
Added
We are a “smaller reporting company” and, as a result of the reduced disclosure and governance requirements applicable to smaller reporting companies, our common stock may be less attractive to investors.
Added
This indemnification policy could result in substantial expenditures, which we may be unable to recoup.
Item 2. Properties
Properties — owned and leased real estate
2 edited+1 added−0 removed3 unchanged
Item 2. Properties
Properties — owned and leased real estate
2 edited+1 added−0 removed3 unchanged
2022 filing
2023 filing
Biggest changeThe Company entered into a one-year lease in November 2013 for an additional 800 square feet of office space in Miami, Florida for annual rent of approximately $38,000. The lease commenced during December 2013. In December 2016, the Company extended this lease through December 31, 2019. In April 2021, the Company extended the lease through April 30, 2023.
Biggest changeOn May 2, 2023, the Company extended this lease through December 31, 2026. The Company entered into a one-year lease in July 2023 for an additional 800 square feet of office space in Miami, Florida for annual rent of approximately $48,000. The lease commenced during July 2023.
Rent charged to operations was $346,097 and $328,877 for the fiscal years ended November 30, 2022 and 2021, respectively, and is included in cost of sales and selling, general and administrative expenses in the consolidated statements of income. 23 The future minimum rental payments under the current operating lease are as follows: Fiscal Year Ending November 30, Rent 2023 $ 330,129 2024 $ 309,282 2025 $ 24,980
Rent charged to operations was $400,716 and $346,097 for the fiscal years ended November 30, 2023 and 2022, respectively, and is included in cost of sales and selling, general and administrative expenses in the consolidated statements of operations.
Added
The future minimum rental payments under the current operating lease are as follows: Fiscal Year Ending November 30, Rent 2024 $ 337,282 2025 $ 435,970 2026 $ 458,026 2027 $ 38,247
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
3 edited+3 added−1 removed2 unchanged
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
3 edited+3 added−1 removed2 unchanged
2022 filing
2023 filing
Biggest changeThe Company believes that the resolution of this matter should not have a material adverse effect on the Company’s business, consolidated financial position or results of operations. It is possible, however, that there could be an unfavorable outcome or resolution of the claims asserted, which could negatively and materially impact the Company’s business, consolidated financial position and results of operations.
Biggest changeIt is possible, however, that there could be an unfavorable outcome or resolution of the claims asserted, which could negatively and materially impact the Company’s business, consolidated financial position and results of operations. Litigation is inherently uncertain and there can be no assurance that the Company will prevail.
In addition to the above lawsuit, from time to time, the Company is subject to proceedings, lawsuits, contract disputes and other claims in the normal course of its business. ITEM 4. MINE SAFE TY DISCLOSURES. Not applicable. 24 PART II
The Company does not include an estimate of legal fees and other related defense costs in its estimate of loss contingencies. In addition to the above lawsuit, from time to time, the Company is subject to proceedings, lawsuits, contract disputes and other claims in the normal course of its business. ITEM 4. MINE SAFE TY DISCLOSURES.
The complaint alleges that the Company’s advertising does not accurately represent the value and efficacy of its services and asserts claims (and seeks unspecified damages) under Florida law. The Company has not yet responded to the complaint. The Company believes the plaintiff’s claims are without merit and intends to contest the action vigorously.
The complaint alleged that the Company’s advertising does not accurately represent the value and efficacy of its services and asserted claims (and sought unspecified damages) under Florida law.
Removed
Litigation is inherently uncertain and there can be no assurance that the Company will prevail. The Company does not include an estimate of legal fees and other related defense costs in its estimate of loss contingencies.
Added
On March 14, 2023, the Company removed the case to the United States District Court for the Southern District of Florida (Case No. 9:23-cv-80405-AMC), and on March 21, 2023, moved to compel arbitration and stay the case. On October 10, 2023, the Court granted the Company’s motion to compel arbitration and stayed the case.
Added
On October 27, 2023, the plaintiff filed a demand for arbitration and statement of claims with the American Arbitration Association, and on January 18, 2024, the plaintiff filed an amended statement of claims dropping her class action allegations against the Company. The Company has not yet responded to the plaintiff’s claims.
Added
The Company believes 24 the plaintiff’s claims are unlikely to prevail and intends to contest the action vigorously. The Company believes that the resolution of this matter should not have a material adverse effect on the Company’s business, consolidated financial position or results of operations.
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
5 edited+1 added−1 removed0 unchanged
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
5 edited+1 added−1 removed0 unchanged
2022 filing
2023 filing
Biggest changeQuarter Ended Low Closing Bid High Closing Bid February 28, 2021 7.33 10.00 May 31, 2021 8.40 10.00 August 31, 2021 8.30 11.31 November 30, 2021 11.21 14.16 February 28, 2022 8.21 13.90 May 31, 2022 6.00 8.90 August 31, 2022 5.20 7.25 November 30, 2022 4.54 7.53 On August 19, 2022, the Board of Directors of the Company declared a one-time, special cash dividend of $0.90 per share of common stock to be paid to its stockholders of record as of the close of business on September 2, 2022.
Biggest changeOn August 19, 2022, the Board of Directors of the Company declared a one-time, special cash dividend of $0.90 per share of common stock to be paid to its stockholders of record as of the close of business on September 2, 2022. The total paid by the Company was $7,672,728.
The following table sets forth as of November 30, 2022, the Company’s equity compensation plans approved by shareholders. At such date the Company had no equity compensation plans that had not been approved by shareholders.
The following table sets forth as of November 30, 2023, the Company’s equity compensation plans approved by shareholders. At such date the Company had no equity compensation plans that had not been approved by shareholders.
Equity Compensation plans approved by stockholders Number of securities to be issued upon exercise of outstanding options, warrants, rights and issued restricted shares Weighted- average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) Cryo-Cell International, Inc. 2006 Stock Incentive Plan 22,500 $ 3.47 — Cryo-Cell International, Inc. 2012 Stock Incentive Plan 242,214 $ 7.86 — Cryo-Cell International, Inc. 2022 Stock Incentive Plan 463,100 $ 4.05 1,036,900 Total 727,814 $ 5.30 1,036,900
Equity Compensation plans approved by stockholders Number of securities to be issued upon exercise of outstanding options, warrants, rights and issued restricted shares Weighted- average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) Cryo-Cell International, Inc. 2006 Stock Incentive Plan 17,500 $ 3.58 — Cryo-Cell International, Inc. 2012 Stock Incentive Plan 198,578 $ 7.84 — Cryo-Cell International, Inc. 2022 Stock Incentive Plan 661,700 $ 9.93 838,300 Total 877,778 $ 9.33 838,300
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED ST OCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES . The Company's common stock is quoted on the NYSE American LLC under the symbol “CCEL”. The following table shows, for the fiscal quarters indicated, the high and low closing bid quotations for the Company's common stock as reported by Yahoo Finance.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED ST OCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES . The Company's common stock is quoted on the NYSE American LLC under the symbol “CCEL”. The last price of our common stock as reported on the NYSE American on February 20, 2024 was $5.34 per share.
The total paid by the Company was $7,672,728. The special dividend was funded by a revolving line of credit from Susser Bank (see Note 4). As of November 30, 2022, the Company had 144 shareholders of record, and management believes there are approximately 1,500 additional beneficial holders of the Company’s common stock.
As of November 30, 2023, the Company had 144 shareholders of record, and management believes there are approximately 1,500 additional beneficial holders of the Company’s common stock.
Removed
The quotations represent inter-dealer prices without retail mark-up, markdown or commission and may not necessarily represent actual transactions.
Added
The special dividend was funded by a revolving line of credit from Susser Bank (see Note 4). Unregistered Sale of Equity Securities and Use of Proceeds None. Stock Repurchases in the Fourth Quarter There were no purchases of the Company's common stock during the three months ended November 30, 2023.
Item 6. [Reserved]
Selected Financial Data — reserved (removed by SEC in 2021)
52 edited+8 added−1 removed74 unchanged
Item 6. [Reserved]
Selected Financial Data — reserved (removed by SEC in 2021)
52 edited+8 added−1 removed74 unchanged
2022 filing
2023 filing
Biggest changeThe decrease in cash and cash equivalents during the twelve months ended November 30, 2022 was primarily attributable to the following: • Net cash provided by operating activities in fiscal 2022 was $8,572,647 which was attributable to the Company’s operating activities and a portion of the Company’s new clients choosing the prepaid storage plans versus the annual storage fee plan. • Net cash provided by operating activities in fiscal 2021 was $7,926,094 which was attributable to the Company’s operating activities and a portion of the Company’s new clients choosing the prepaid storage plans versus the annual storage fee plan. • Net cash used in investing activities in fiscal 2022 was $15,279,639 which was primarily attributable to $12,168,459 used to purchase property and equipment including a new facility (See Note 18) and $5,000,000 used as part of the Patent Option and Technology License Agreement with Duke (See Note 18). • Net cash used in investing activities in fiscal 2021 was $6,951,171 which was primarily attributable $1,510,150 used to purchase real estate for the Company’s Institute of Cellular Therapies in North Carolina, $323,847 used to the purchase equipment and software and $5,106,224 used as part of the Patent Option and Technology License Agreement with Duke (See Note 18). • Net cash from financing activities in fiscal 2022 was $147,862 which was primarily attributable to the payments of $1,908,433 to partially repay the TCB and Susser Bank notes payable described above, $1,819,915 used to repurchase the Company's common stock, $7,672,728 used to pay a dividend to the Company's shareholders and $5,400,000 to repay the RCF which was partially offset by the receipt of $551,274 from the exercise of stock options, $8,960,000 received per a Credit Agreement with Susser Bank described above and $7,672,728 received per a RCF from Susser Bank described above. • Net cash used in financing activities in fiscal 2021 was $3,072,960 which was primarily attributable to the payments of $4,100,000 to repay the note payable described above, offset by the receipt of $1,276,417 from the exercise of stock options.
Biggest changeThe decrease in cash and cash equivalents during the twelve months ended November 30, 2023 was primarily attributable to the following: • Net cash provided by operating activities in fiscal 2023 was $8,919,754 which was attributable to the Company’s operating activities and a portion of the Company’s new clients choosing the prepaid storage plans versus the annual storage fee plan. • Net cash provided by operating activities in fiscal 2022 was $8,572,647 which was attributable to the Company’s operating activities and a portion of the Company’s new clients choosing the prepaid storage plans versus the annual storage fee plan. • Net cash used in investing activities in fiscal 2023 was $8,144,754 which was primarily attributable to $6,838,969 used to purchase property and equipment related to the new facility (See Note 18), $799,999 used as part of the Patent Option and Technology License Agreement with Duke (See Note 18), and $1,082,924 for the purchase of marketable securities. • Net cash used in investing activities in fiscal 2022 was $15,279,639 which was primarily attributable to $12,168,459 used to purchase property and equipment including a new facility (See Note 18) and $5,000,000 used as part of the Patent Option and Technology License Agreement with Duke (See Note 18). • Net cash used in financing activities in fiscal 2023 was $2,072,891 which was primarily attributable to the payments of $156,355 to partially repay the Susser Bank notes payable described above, $799,036 used to repurchase the Company's common stock, and $2,000,000 to repay the RCF which was partially offset by the receipt of $950,000 received per a RCF from Susser Bank described above. • Net cash from financing activities in fiscal 2022 was $147,862 which was primarily attributable to the payments of $1,946,996 to partially repay the TCB and Susser Bank notes payable described above, $1,819,915 used to repurchase the Company's common stock, $7,672,728 used to pay a dividend to the Company's shareholders and $5,400,000 to repay the RCF.
Pursuant to the Duke Agreement, the Company has been granted exclusive commercial rights to Duke’s granted exclusive commercial rights to Duke’s intellectual property assets, FDA regulatory data, clinical expertise and manufacturing protocols associated with various applications of cord blood and cord tissue stem cells.
Pursuant to the Duke Agreement, the Company has been granted exclusive commercial rights to Duke’s intellectual property assets, FDA regulatory data, clinical expertise and manufacturing protocols associated with various applications of cord blood and cord tissue stem cells.
Costs incurred related to cord blood units that cannot be sold are expensed in the period incurred and are included in facility operating costs in the accompanying statements of operations. The Company records a reserve against inventory for 33 units which have been processed and frozen but may not ultimately become distributable (see Note 2).
Costs incurred related to cord blood units that cannot be sold are expensed in the period incurred and are included in facility operating costs in the accompanying statements of operations. The Company records a reserve against inventory for units which have been processed and frozen but may not ultimately become distributable (see Note 2).
If the licensee’s customer base were to decrease, it would negatively impact the Company’s ongoing license income. Accounts Receivable Accounts receivable consist of uncollateralized amounts due from clients that have enrolled and processed in the umbilical cord blood stem cell processing and storage programs and amounts due from license affiliates, and sublicensee territories.
If the licensee’s customer base were to decrease, it would negatively impact the Company’s ongoing license income. Accounts Receivable Accounts receivable consist of uncollateralized amounts due from clients that have enrolled and processed in the umbilical cord blood stem cell processing and storage programs and amounts due from license affiliates, and 34 sublicensee territories.
This Form 10-K press releases and certain information provided periodically in writing or orally by the Company's officers or its agents may contain statements which constitute "forward‑looking statements". The terms "Cryo-Cell International, Inc.," “Cryo-Cell,” "Company," "we," "our" and "us" refer to Cryo-Cell International, Inc.
This Form 10-K press releases and certain information provided periodically in writing or orally by the Company's officers or its agents may contain statements which constitute "forward‑looking statements". The terms "Cryo-Cell International, Inc.," 26 “Cryo-Cell,” "Company," "we," "our" and "us" refer to Cryo-Cell International, Inc.
In July 2022, the Company entered into an interest rate swap agreement with Susser to manage exposure arising from this risk. The swap agreement had a notional amount equal to the Term Note. The 29 agreement pays the Company monthly SOFR plus 3.25% on the notional amount and the Company pays a fixed rate of interest equal to 6.09%.
In July 2022, the Company entered into an interest rate swap agreement with Susser to manage exposure arising from this risk. The swap agreement had a notional amount equal to the Term Note. The agreement pays the Company monthly SOFR plus 3.25% on the notional amount and the Company pays a fixed rate of interest equal to 6.09%.
The Company anticipates funding future property build out, equipment purchases, obligations under the Patent Technology License Agreement with Duke University and software enhancements with cash-on-hand, cash flows from future operations, the Company’s revolving line of credit (see Note 4) and potential additional debt financing.
The Company anticipates funding future 31 property build out, equipment purchases, obligations under the Patent Technology License Agreement with Duke University and software enhancements with cash-on-hand, cash flows from future operations, the Company’s revolving line of credit (see Note 4) and potential additional debt financing.
In the future, the Company anticipates using a substantial amount of cash to fund clinical trials related to the Patent and Technology License Agreement with Duke University (see Note 18) and to 30 develop its biopharmaceutical manufacturing capabilities related to mesenchymal stromal cells derived from umbilical cord tissue.
In the future, the Company anticipates using a substantial amount of cash to fund clinical trials related to the Patent and Technology License Agreement with Duke University (see Note 18) and to develop its biopharmaceutical manufacturing capabilities related to mesenchymal stromal cells derived from umbilical cord tissue.
The Company evaluates its contracts for legal enforceability at contract inception and subsequently throughout the Company’s relationship with its customers. If legal enforceability with regards to the rights and obligations exist for both the Company and the customer, then the Company has an enforceable contract and revenue recognition is permitted subject to the satisfaction of the other criteria.
The Company evaluates its contracts for legal enforceability at contract inception and subsequently throughout the Company’s relationship with its customers. If legal enforceability with regards to the rights and obligations exist for 32 both the Company and the customer, then the Company has an enforceable contract and revenue recognition is permitted subject to the satisfaction of the other criteria.
The fair value of service-based vesting condition and performance-based vesting condition stock option awards is determined using the Black-Scholes valuation model. For stock option awards with only service-based vesting conditions and graded vesting features, the Company recognizes stock compensation expense based on the graded-vesting method. To value awards with market-based vesting conditions the Company uses a binomial valuation model.
The fair value of service-based vesting condition and performance-based vesting condition stock option awards is determined using the Black-Scholes valuation model. For stock option awards with only service-based vesting conditions and graded vesting features, the Company recognizes stock compensation expense based on the graded-vesting method. To value awards with market-based vesting conditions the Company uses a binomial 33 valuation model.
The carrying amount of the liability may fluctuate significantly and actual amounts paid may be materially different from the estimated value of the liability. Recently Issued Accounting Pronouncements See Note 1 to the Consolidated Financial Statements.
The carrying amount of the 35 liability may fluctuate significantly and actual amounts paid may be materially different from the estimated value of the liability. Recently Issued Accounting Pronouncements See Note 1 to the Consolidated Financial Statements.
The factors that might cause such differences include, among others: a. any adverse effect or limitations caused by recent increases in government regulation of stem cell storage facilities; b. any increased competition in our business including increasing competition from public cord blood banks particularly in overseas markets but also in the U.S.; c. any decrease or slowdown in the number of people seeking to store umbilical cord blood stem cells or decrease in the number of people paying annual storage fees; d. any adverse impacts on revenue or operating margins due to the costs associated with increased growth in our business, including the possibility of unanticipated costs relating to the operation of our facility and costs relating to the commercial launch of new types of stem cells; e. any unique risks posed by our international activities, including but not limited to local business laws or practices that diminish our affiliates’ ability to effectively compete in their local markets; f. any technological or medical breakthroughs that would render our business of stem cell preservation obsolete; g. any material failure or malfunction in our storage facilities; or any natural disaster or act of terrorism that adversely affects stored specimens; h. any adverse results to our prospects, financial condition or reputation arising from any material failure or compromise of our information systems; i. the costs associated with defending or prosecuting litigation matters, particularly including litigation related to intellectual property, and any material adverse result from such matters; j. the success of our licensing agreements and their ability to provide us with royalty fees; k. any difficulties and increased expense in enforcing our international licensing agreements; l. any adverse performance by or relations with any of our licensees; m. any inability to enter into new licensing arrangements including arrangements with non-refundable upfront fees; n. any inability to realize cost savings as a result of recent acquisitions; o. any inability to realize a return on an investment; 26 p. any adverse impact on our revenues and operating margins as a result of discounting of our services in order to generate new business in tough economic times where consumers are selective with discretionary spending; q. the success of our global expansion initiatives and product diversification; r. our actual future ownership stake in future therapies emerging from our collaborative research partnerships; s. our ability to minimize our future costs related to R&D initiatives and collaborations and the success of such initiatives and collaborations; t. any inability to successfully identify and consummate strategic acquisitions; u. any inability to realize benefits from any strategic acquisitions; v. the Company’s ability to realize a profit on the acquisition of PrepaCyte-CB; w. the Company’s ability to realize a profit on the acquisition of Cord:Use; x. the impact of the COVID-19 pandemic on our sales, operations and supply chain; y. the Company's actual future competitive position in stem cell innovation; z. future success of its core business and the competitive impact of public cord blood banking on the Company’s business; aa. the success of the Company’s initiative to expand its core business units to include biopharmaceutical manufacturing and operating clinics, the uncertainty of profitability from its biopharmaceutical manufacturing and operating clinics, the Company’s ability to minimize future costs to the Company related to R&D initiatives and collaborations and the success of such initiatives and collaborations, bb. the success of the Company's initiative to purchase a new facility and expand the Company's cryopreservation and cold storage business by introducing a new service, ExtraVault, and cc. the other risk factors set forth in this Report under the heading "Risk Factors." Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof.
The factors that might cause such differences include, among others: a. any adverse effect or limitations caused by recent increases in government regulation of stem cell storage facilities; b. any increased competition in our business including increasing competition from public cord blood banks particularly in overseas markets but also in the U.S.; c. any decrease or slowdown in the number of people seeking to store umbilical cord blood stem cells or decrease in the number of people paying annual storage fees; d. any adverse impacts on revenue or operating margins due to the costs associated with increased growth in our business, including the possibility of unanticipated costs relating to the operation of our facility and costs relating to the commercial launch of new types of stem cells; e. any unique risks posed by our international activities, including but not limited to local business laws or practices that diminish our affiliates’ ability to effectively compete in their local markets; f. any technological or medical breakthroughs that would render our business of stem cell preservation obsolete; g. any material failure or malfunction in our storage facilities; or any natural disaster or act of terrorism that adversely affects stored specimens; h. any adverse results to our prospects, financial condition or reputation arising from any material failure or compromise of our information systems; i. the costs associated with defending or prosecuting litigation matters, particularly including litigation related to intellectual property, and any material adverse result from such matters; j. the success of our licensing agreements and their ability to provide us with royalty fees; k. any difficulties and increased expense in enforcing our international licensing agreements; l. any adverse performance by or relations with any of our licensees; m. any inability to enter into new licensing arrangements including arrangements with non-refundable upfront fees; n. any inability to realize cost savings as a result of recent acquisitions; o. any inability to realize a return on an investment; p. any adverse impact on our revenues and operating margins as a result of discounting of our services in order to generate new business in tough economic times where consumers are selective with discretionary spending; q. the success of our global expansion initiatives and product diversification; r. our actual future ownership stake in future therapies emerging from our collaborative research partnerships; 27 s. our ability to minimize our future costs related to R&D initiatives and collaborations and the success of such initiatives and collaborations; t. any inability to successfully identify and consummate strategic acquisitions; u. any inability to realize benefits from any strategic acquisitions; v. the Company’s ability to realize a profit on the acquisition of PrepaCyte-CB; w. the Company’s ability to realize a profit on the acquisition of Cord:Use; x. the Company's actual future competitive position in stem cell innovation; y. future success of its core business and the competitive impact of public cord blood banking on the Company’s business; z. the success of the Company’s initiative to expand its core business units to include biopharmaceutical manufacturing and operating clinics, the uncertainty of profitability from its biopharmaceutical manufacturing and operating clinics, the Company’s ability to minimize future costs to the Company related to R&D initiatives and collaborations and the success of such initiatives and collaborations, aa. the success of the Company's initiative to purchase a new facility and expand the Company's cryopreservation and cold storage business by introducing a new service, ExtraVault, and bb. the other risk factors set forth in this Report under the heading "Risk Factors." Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof.
If the awards are forfeited prior to the completion of the derived service period, any 32 recognized compensation is reversed. If the awards are forfeited after the completion of the derived service period, the compensation cost is not reversed, even if the awards never vest.
If the awards are forfeited prior to the completion of the derived service period, any recognized compensation is reversed. If the awards are forfeited after the completion of the derived service period, the compensation cost is not reversed, even if the awards never vest.
If the implied fair value exceeds the carrying value then goodwill is not impaired; otherwise, an impairment loss would be recorded by the amount the carrying value exceeds the implied fair value. Stock Compensation As of November 30, 2022, the Company has three stock-based employee compensation plans, which are described in Note 10 to the consolidated financial statements.
If the implied fair value exceeds the carrying value then goodwill is not impaired; otherwise, an impairment loss would be recorded by the amount the carrying value exceeds the implied fair value. Stock Compensation As of November 30, 2023, the Company has three stock-based employee compensation plans, which are described in Note 10 to the consolidated financial statements.
Inventories As part of the Asset Purchase Agreement, the Company has an agreement with Duke University (“Duke”) expiring on January 31, 2025 for Duke to receive, process, and store cord blood units for the Public Cord Blood Bank (“Duke Services”). As of November 30, 2022, the Company had approximately 6,000 cord blood units in inventory.
Inventories As part of the Asset Purchase Agreement, the Company has an agreement with Duke University (“Duke”) expiring on January 31, 2025 for Duke to receive, process, and store cord blood units for the Public Cord Blood Bank (“Duke Services”). As of November 30, 2023, the Company had approximately 6,000 cord blood units in inventory.
The following discussion and analysis of the financial condition and results of operations of the Company for the two years ended November 30, 2022, should be read in conjunction with the consolidated financial statements and related notes as well as other information contained in this Annual Report on Form 10-K.
The following discussion and analysis of the financial condition and results of operations of the Company for the two years ended November 30, 2023, should be read in conjunction with the consolidated financial statements and related notes as well as other information contained in this Annual Report on Form 10-K.
Off-Balance Sheet Arrangements The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. 34
Off-Balance Sheet Arrangements The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. 36
ITEM 6. R E SERVED. Not applicable. 25 ITEM 7 . MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS .
ITEM 6. R E SERVED. Not applicable. ITEM 7 . MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS .
The Company processes and stores specimens sent directly from customers of licensees in El Salvador, Guatemala, Ecuador, Panama, Honduras, Nicaragua, Costa Rica, Pakistan and Venezuela. These fees are included in processing and storage fees revenue on the consolidated statements of income.
The Company processes and stores specimens sent directly from customers of licensees in El Salvador, Guatemala, Ecuador, Panama, Honduras, Nicaragua, Costa Rica, Pakistan and Venezuela. These fees are included in processing and storage fees revenue on the consolidated statements of operations.
The Company did not note any impairment for the twelve months ended November 30, 2022 and November 30, 2021. Goodwill Goodwill represents the excess of the purchase price of the assets acquired from Cord:Use over the estimated fair value of the net tangible and identifiable assets acquired.
The Company did not note any impairment for the twelve months ended November 30, 2023 and November 30, 2022. Goodwill Goodwill represents the excess of the purchase price of the assets acquired from Cord:Use over the estimated fair value of the net tangible and identifiable assets acquired.
The decrease in cost of sales for the twelve months ended November 30, 2022 versus November 30, 2021 is due to the decrease in the number of new domestic cord blood specimens processed during the twelve months ended November 30, 2022 versus November 30, 2021. Selling, General and Administrative Expenses.
The decrease in cost of sales for the twelve months ended November 30, 2023 versus November 30, 2022 is due to the decrease in the number of new domestic cord blood specimens processed during the twelve months ended November 30, 2023 versus November 30, 2022. Selling, General and Administrative Expenses.
The contingent consideration was remeasured to fair value as of November 30, 2022. The estimated fair value of the contingent earnout was determined using a Monte Carlo analysis examining the frequency and mean value of the resulting earnout payments. The resulting value captures the risk associated with the form of the payout structure.
The contingent consideration was remeasured to fair value as of November 30, 2023. The estimated fair value of the contingent earnout was determined using a Monte Carlo analysis examining the frequency and mean value of the resulting earnout payments. The 29 resulting value captures the risk associated with the form of the payout structure.
Overview The Company currently stores nearly 225,000 cord blood and cord tissue specimens for the exclusive benefit of newborn babies and possibly other members of their families. Founded in 1989, the Company was the world’s first private cord blood bank to separate and store stem cells in 1992.
Overview The Company currently stores over 235,000 cord blood and cord tissue specimens for the exclusive benefit of newborn babies and possibly other members of their families. Founded in 1989, the Company was the world’s first private cord blood bank to separate and store stem cells in 1992.
On July 18, 2022, the Company entered into a Credit Agreement (“Agreement Susser”) with Susser Bank, a Texas state bank, as administrative agent (“Susser”) on behalf of itself and the other lenders (collectively, the “Lenders”) for (i) a revolving credit facility in an aggregate principal amount of up to $10,000,000 (the “RCF”); and (ii) a term loan facility in an original principal amount of $8,960,000 (the “Term Loan Susser” and together with the RCF collectively, the “Loans”).
The Company has no further obligations under the Credit Agreement. 30 On July 18, 2022, the Company entered into a Credit Agreement (“Agreement Susser”) with Susser Bank, a Texas state bank, as administrative agent (“Susser”) on behalf of itself and the other lenders (collectively, the “Lenders”) for (i) a revolving credit facility in an aggregate principal amount of up to $10,000,000 (the “RCF”); and (ii) a term loan facility in an original principal amount of $8,960,000 (the “Term Loan Susser” and together with the RCF collectively, the “Loans”).
We examine the evidence related to the recent history of tax losses, the economic conditions in which we operate and our forecasts and projections to make that determination. There was approximately $1,573,000 and $3,533,000 of U.S. income taxes paid for fiscal years ended November 30, 2022 and November 30, 2021, respectively.
We examine the evidence related to the recent history of tax losses, the economic conditions in which we operate and our forecasts and projections to make that determination. There was approximately $1,821,000 and $1,573,000 of U.S. income taxes paid for fiscal years ended November 30, 2023 and November 30, 2022, respectively.
Through this Agreement, the Company intends to expand to a triad of core business units to include: (1) its cord blood bank and other storage services; (2) cord blood and cord tissue infusion clinic services initially under the FDA’s 27 Expanded Access Program and in conjunction with the undertaking of cord blood and cord tissue clinical trials to obtain biologics license application (“BLA”) approvals for new indications, and (3) biopharmaceutical manufacturing if BLA(s) are approved by the FDA.
Through this Agreement, the Company intends to expand to a triad of core business units to include: (1) its cord blood bank and other storage services; (2) cord blood and cord tissue infusion clinic services in conjunction with the undertaking of cord blood and cord tissue clinical trials to obtain biologics license application (“BLA”) approvals for new indications, and (3) biopharmaceutical manufacturing if BLA(s) are approved by the FDA.
Cost of sales includes wages and supplies associated with process enhancements to the existing production procedures and quality systems in the processing of cord blood specimens at the Company’s facility in Oldsmar, Florida and depreciation expense of $208,482 for the year ended November 30, 2022 compared to $203,892 for the 2021 period.
Cost of sales includes wages and supplies associated with process enhancements to the existing production procedures and quality systems in the processing of cord blood specimens at the Company’s facility in Oldsmar, Florida and depreciation expense of $171,697 for the year ended November 30, 2023 compared to $208,482 for the 2022 period.
Liquidity and Capital Resources During fiscal 2016 through fiscal 2018, the Company entered into Credit Agreements (“Credit Agreements”) with Texas Capital Bank, National Association (“TCB”) totaling $15,500,00. As of July 1, 2022, the Company paid the TCB term loan in full. The Company has no further obligations under the Credit Agreement.
Liquidity and Capital Resources During fiscal 2016 through fiscal 2018, the Company entered into Credit Agreements (“Credit Agreements”) with Texas Capital Bank, National Association (“TCB”) totaling $15,500,00. As of July 1, 2022, the Company paid the TCB term loan in full.
Processing and storage fee revenue is attributable to an 6% increase in recurring annual storage fee revenue offset by a 6% decrease in the number of new domestic cord blood specimens processed in Fiscal Year 2022 to Fiscal Year 2021. Product Revenue .
Processing and storage fee revenue is attributable to a 5% increase in recurring annual storage fee revenue offset by an 8% decrease in the number of new domestic cord blood specimens processed in fiscal year 2023 to fiscal year 2022. Product Revenue .
Change in the fair value of the contingent consideration for the fiscal year ended November 30, 2022 was an increase of $435,333 compared to a decrease of $782,481 for fiscal 2021. The contingent consideration is the earnout that Cord:Use is entitled to from the Company’s sale of the public cord blood inventory from and after closing, described above.
Change in the fair value of the contingent consideration for the fiscal year ended November 30, 2023 was a decrease of $1,050,978 compared to an increase of $435,333 for fiscal 2022. The contingent consideration is the earnout that Cord:Use is entitled to from the Company’s sale of the public cord blood inventory from and after closing, described above.
Research, development and related engineering expenses for the fiscal year ended November 30, 2022, were $384,789 as compared to $49,870 in 2021. The increase for the twelve months ended November 30, 2022 is due to the expenses related to the development of a manufacturing laboratory related to the Duke License Agreement (See Note 18). Depreciation and Amortization .
Research, development and related engineering expenses for the fiscal year ended November 30, 2023, were $1,171,456 as compared to $384,789 in 2022. The increase for the twelve months ended November 30, 2022 is due to the expenses related to the development of a manufacturing laboratory related to the Duke License Agreement (See Note 18). Depreciation and Amortization .
Interest Expense is also comprised of $1,092,370 and $1,030,521 as of the twelve months ended November 30, 2022 and November 30, 2021, respectively, for amounts due to the parties to the Company’s revenue sharing agreements based on the Company’s storage revenue collected.
Interest Expense is also comprised of $1,077,967 and $1,092,370 as of the twelve months ended November 30, 2023 and November 30, 2022, respectively, for amounts due to the parties to the Company’s revenue sharing agreements based on the Company’s storage revenue collected.
Also, included in Cost of Sales is $100,715 and $154,140 related to the costs associated with production of the PrepaCyte CB processing and storage system for the twelve months ended November 30, 2022 and November 30, 2021, respectively.
Also, included in Cost of Sales is $35,490 and $100,715 related to the costs associated with production of the PrepaCyte CB processing and storage system for the twelve months ended November 30, 2023 and November 30, 2022, respectively.
Gain on the change in the fair value of a derivative for the fiscal year ended November 30, 2022 was $446,200. The fair value is based on prevailing market data and derived from proprietary models based on well recognized financial principles and reasonable estimates about relevant future market conditions. Income Taxes.
Gain on Interest Rate Swap . Gain on the change in the fair value of a derivative for the fiscal year ended November 30, 2023 was $122,113. The fair value is based on prevailing market data and derived from proprietary models based on well recognized financial principles and reasonable estimates about relevant future market conditions. Income Taxes.
Depreciation and amortization (not included in Cost of Sales) for the fiscal year ended November 30, 2022 was $1,119,528 compared to $834,845 for fiscal 2021. 28 Change in the Fair Value of Contingent Consideration.
Depreciation and amortization (not included in Cost of Sales) for the fiscal year ended November 30, 2023 was $1,124,228 compared to $1,119,528 for fiscal 2022. Change in the Fair Value of Contingent Consideration.
Selling, general and administrative expenses during the fiscal year ended November 30, 2022 were $15,580,274 as compared to $14,610,200 for the fiscal year ended November 30, 2021 representing a 7% increase. These expenses are primarily comprised of selling and marketing expenses, salaries and wages for personnel and professional fees. Research, Development and Related Engineering Expenses.
Selling, general and administrative expenses during the fiscal year ended November 30, 2023 were $17,115,514 as compared to $15,580,274 for the fiscal year ended November 30, 2022 representing a 10% increase. These expenses are primarily comprised of selling and marketing expenses, salaries and wages for personnel and professional fees. Research, Development and Related Engineering Expenses.
Due to changes in sales trends and estimated recoverability of cost capitalized into inventory, an impairment charge of $0 and $1,164,499 was recognized during fiscal 2022 and 2021, respectively, to reduce inventory from cost to net realizable value. Patents and Trademarks The Company incurs certain legal and related costs in connection with patent and trademark applications.
Due to changes in sales trends and estimated recoverability of cost capitalized into inventory, an impairment charge of $3,737,133 and $0 was recognized during the fourth quarter of 2023 and 2022, respectively, to reduce inventory from cost to net realizable value. Patents and Trademarks The Company incurs certain legal and related costs in connection with patent and trademark applications.
Interest expense during the fiscal year ended November 30, 2022 was $1,521,767 compared to $1,378,926 in fiscal 2021, of which $320,561 and $174,968, respectively, related to the credit and subordination agreements with Texas Capital Bank, National Association and Susser Bank as described in Note 4.
Interest expense during the fiscal year ended November 30, 2023 was $1,236,794 compared to $1,521,767 in fiscal 2022, of which $140,589 and $320,561, respectively, related to the credit and subordination agreements with Texas Capital Bank, National Association and Susser Bank as described in Note 4.
For the twelve months ended November 30, 2022, revenue from the public cord blood banking sales was $461,626 compared to $376,101 for the twelve months ended November 30, 2021. Cost of Sales .
For the twelve months ended November 30, 2023, revenue from the public cord blood banking sales was $481,148 compared to $461,626 for the twelve months ended November 30, 2022. Cost of Sales .
Due to equipment delivery delays, the Company is projecting to open the Cryo-Cell Institute for Cellular Therapies and begin infusing patients during fiscal 2024. Corporate Information We are a Delaware corporation that was incorporated in 1989.
Due to equipment delivery delays, the Company is projecting to open the Cryo-Cell Institute for Cellular Therapies and begin infusing patients during fiscal 2024 if granted such rights by the FDA under IND(s). Corporate Information 28 We are a Delaware corporation that was incorporated in 1989.
For the twelve months ended November 30, 2022, revenue from the product sales was $104,000 compared to $111,400 for the twelve months ended November 30, 2021. Public Cord Blood Banking Revenue .
For the twelve months ended November 30, 2023, revenue from the product sales was $66,456 compared to $104,000 for the twelve months ended November 30, 2022. Public Cord Blood Banking Revenue .
U.S. income tax expense for the twelve months ended November 30, 2022 was $547,540 compared to $527,710 for the twelve months ended November 30, 2021. Deferred tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled.
U.S. income tax benefit for the twelve months ended November 30, 2023 was $3,842,826 compared to an income tax expense of $547,540 for the twelve months ended November 30, 2022. Deferred tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled.
For the fiscal year ended November 30, 2022, the Company had revenue of $30,336,749 compared to $28,884,902 for the fiscal year ended November 30, 2021, an increase of 5% as a result of the reasons discussed below. Processing and Storage Fees.
For the fiscal year ended November 30, 2023, the Company had revenue of $31,343,695 compared to $30,336,749 for the fiscal year ended November 30, 2022, an increase of 3% as a result of the reasons discussed below. Processing and Storage Fees.
For the fiscal year ended November 30, 2022, cost of sales was $8,792,358 as compared to $8,989,736 for the fiscal year ended November 30, 2021, representing a 2% decrease.
For the fiscal year ended November 30, 2023, cost of sales was $8,442,310 as compared to $8,792,358 for the fiscal year ended November 30, 2022, representing a 4% decrease.
For the fiscal year ended November 30, 2022, processing and storage fees were $29,771,123 compared to $28,397,401 for the fiscal year ended November 30, 2021.
For the fiscal year ended November 30, 2023, processing and storage fees were $30,796,091 compared to $29,771,123 for the fiscal year ended November 30, 2022.
At November 30, 2022, the Company had cash and cash equivalents of $1,703,958 as compared to $8,263,088 at November 30, 2021.
At November 30, 2023, the Company had cash and cash equivalents of $406,067 as compared to $1,703,958 at November 30, 2022.
The Company examines the evidence related to the recent history of losses, the economic conditions in which the Company operates and forecasts and projections to make that determination. 31 Long-Lived Assets The Company evaluates the realizability of its long-lived assets, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment, such as reductions in demand or when significant economic slowdowns are present.
Long-Lived Assets The Company evaluates the realizability of its long-lived assets, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment, such as reductions in demand or when significant economic slowdowns are present.
The Company anticipates making discretionary capital expenditures of approximately $10,000,000 over the next twelve months for property build out, purchases of property and equipment, obligations under the Patent and Technology License Agreement with Duke University and software enhancements.
The balance as of November 30, 2023 is $1,222,728 and is reflected on the accompanying balance sheet. The Company anticipates making discretionary capital expenditures of approximately $5,000,000 over the next twelve months for property build out, purchases of equipment, obligations under the Patent and Technology License Agreement with Duke University and software enhancements.
The impairment of public inventory for the twelve months ended November 30, 2022 was $0 compared to $1,164,499 for the 2021 period.
The impairment of public inventory for the twelve months ended November 30, 2023 was $3,737,133 compared to $0 for the 2022 period.
Due to changes in sales trends and estimated recoverability of cost capitalized into inventory, an impairment charge of $0 and $1,164,499 was recognized during the twelve months ended November 30, 2022 and November 30, 2021, respectively, to reduce inventory from cost to net realizable value. Interest Expense.
Due to changes in sales trends and estimated recoverability of cost capitalized into inventory, an impairment charge of $3,737,133 and $0 was recognized during the fourth quarter of November 30, 2023 and November 30, 2022, respectively, to reduce inventory from cost to net realizable value. Impairment of Duke Assets.
Also included in Cost of Sales is $1,596,530 and $1,484,186 for the twelve months ended November 30, 2022 and November 30, 2021, respectively.
Also included in Cost of Sales is $1,138,096 and $1,596,530 related to public cord blood banking for the twelve months ended November 30, 2023 and November 30, 2022, respectively.
The remaining interest expense for the twelve months ended November 30, 2022 and November 30, 2021 is due to the accretion of the outstanding liability due to Duke per the Agreement, see Note 18. Gain on Interest Rate Swap .
The remaining interest expense for the twelve months ended November 30, 2023 and November 30, 2022 is due to the accretion of the outstanding liability due to Duke per the Agreement, see Note 18. During fiscal 2023, the Company capitalized $683,524 of interest related to the construction of the Company's new facility in North Carolina.
Removed
The Company has a revolving line of credit, described above. The balance as of November 30, 2022 is $2,272,728 and is reflected on the accompanying balance sheet.
Added
The impairment of Duke assets for the twelve months ended November 30, 2023 was $13,108,064 compared to $0 for the 2022 period. During fiscal 2023, the Company recognized that there were indications of impairment of the assets associated with the Duke license agreement.
Added
The Company evaluated the triggering events that existed as of November 30, 2023, tested the asset group for recoverability and measured the long-lived asset impairment.
Added
During the fourth quarter of fiscal 2023, the results received from a phase 2/3 trial to treat osteoarthritis of the knee conducted to compare the effectiveness of an injection of a corticosteroid control to mesenchymal stem cell (MSC) preparations from autologous bone marrow concentrate (BMAC), adipose derived stem cells in the form of Stromal Vascular Fraction (SVF), and third-party human mesenchymal stem cells manufactured from umbilical cord tissue at Duke University for the treatment of unilateral Knee Osteoarthritis (OA).
Added
No benefit was shown from any of the sources compared to the current standard of care.
Added
Given these results (that included the Duke MSCs to which the Company licensed the exclusive rights) and other factors, it was determined that the uncertain future cash flows from the Duke license agreement may not be enough to recover the carrying value of the asset resulting in a fully impaired asset. Interest Expense.
Added
These payments were partially offset by the receipt of $551,274 from the exercise of stock options, $8,960,000 received per a Credit Agreement with Susser Bank described above and $7,672,728 received per a RCF from Susser Bank described above. The Company has a revolving line of credit, described above.
Added
The Company intends to transfer the assets related to the Patent and Technology License Agreement with Duke University and certain other assets into a newly formed, wholly-owned subsidiary to provide more financial flexibility to fund future projects. Once such transfer is completed, the Company also intends to explore spinning off this subsidiary to the Company’s shareholders.
Added
The Company examines the evidence related to the recent history of losses, the economic conditions in which the Company operates and forecasts and projections to make that determination.