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What changed in CRYO CELL INTERNATIONAL INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CRYO CELL INTERNATIONAL INC's 2023 and 2024 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 2024 report.

+266 added−213 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-28)

Top changes in CRYO CELL INTERNATIONAL INC's 2024 10-K

266 paragraphs added · 213 removed · 173 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

54 edited+29 added−28 removed62 unchanged
Biggest changeAs 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.
Biggest changeThe Company is also obligated to pay Duke $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 mesenchymal stromal cells for an indication other than Autism Spectrum Disorder, of which there can be no assurances.
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.
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.
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.
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.
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.
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.
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.
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.
The Company anticipates this New Facility will expand the Company’s cryopreservation and cold storage business by introducing a new service, ExtraVault ( www.extravault.com ). With over 30 years of experience in handling biological specimens for both research and clinical use, Cryo-Cell intends to leverage this expertise and offer these biorepository services to biopharmaceutical companies and healthcare institutions.
The Company anticipates this New Facility will expand the Company’s cryopreservation and cold storage business by introducing a new service, ExtraVault ( www.extravault.com ). With over 30 years of experience in 4 handling biological specimens for both research and clinical use, Cryo-Cell intends to leverage this expertise and offer these biorepository services to biopharmaceutical companies and healthcare institutions.
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.
Competitive Advantages The Company believes that it provides several key advantages over its competitors, including: 3 • The world’s first private cord blood bank, that in combination with its global affiliates, currently stores over 240,000 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 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.
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 2 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.
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.
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.
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.
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.
At present, the Company intends to defer the reversal of the liability, until such time as these amounts can be determined. During the periods when the Company defers the reversal of the liability, the quarterly payments made during these periods are treated as interest expense, which is recognized as the payments become due.
At present, the Company intends to defer the reversal of the liability, until such time as these amounts can be determined. During the periods when the Company defers the reversal of the liability, the quarterly payments made during these periods are treated as interest expense, which is 9 recognized as the payments become due.
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").
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 Carolina ("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”).
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”).
The units are listed on the NMDP Single Point of Access Registry and are available to transplant centers worldwide. The Company is reimbursed via cost recovery for public cord blood units distributed for transplant through the NMDP.
The units are listed on the NMDP Single Point of Access Registry and are available to transplant centers 6 worldwide. The Company is reimbursed via cost recovery for public cord blood units distributed for transplant through the NMDP.
The new facility is being constructed to offer state-of-the-art biologic, reagent and vaccine storage at cost effective prices. A robust inventory management system is planned to be implemented that Cryo-Cell believes will allow customers to view their own inventory through a customer portal and place distribution orders online.
The new facility will offer state-of-the-art biologic, reagent and vaccine storage at cost effective prices. A robust inventory management system is planned to be implemented that Cryo-Cell believes will allow customers to view their own inventory through a customer portal and place distribution orders online.
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.
The Company, in combination with its global affiliates, currently stores over 240,000 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.
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.
New expectant parent referrals during fiscal 2024 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.
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.
The Company believes 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.
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.
At November 30, 2024 and November 30, 2023, 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 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.
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 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.
The Company now 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 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.
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.
As stated above, through the Duke License Agreement, the Company had intended 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) were approved by the FDA.
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.
Specifically, pursuant to the Duke License Agreement, Duke 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.
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.
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 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.
The Company recorded an RSA accrual of $1,344,866 and $1,076,411 as of November 30, 2024 and November 30, 2023, respectively, related to interest owed to the RSA holders, which is included in accrued expenses.
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.
The Company made total payments to all RSA holders of $1,058,311 and $1,009,813 for the fiscal years ended November 30, 2024 and November 30, 2023 respectively, exclusive of termination and repurchase payments.
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.
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 does not intend to enter into additional RSAs.
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.
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.
Medical technology is constantly evolving which may provide new uses for cryopreserved cord blood stem cells. Our Cord Blood Stem Cell Storage Services The Company enters into storage agreements with its clients under which the Company charges a fee for the processing and testing and first year of storage of the umbilical cord blood.
Our Cord Blood Stem Cell Storage Services The Company enters into storage agreements with its clients under which the Company charges a fee for the processing and testing and first year of storage of the umbilical cord blood.
The final rule allows the FDA to inspect cord blood laboratories to determine compliance with the provisions of 21 CFR Part 1271.
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.
These types of activities are also governed by the FDA, specifying oversight by an Institutional Review Board (IRB). The IRB is a board or committee that approves the initiation of, and conducts periodic review of, biomedical research involving human subjects. The primary purpose of such review is to assure the protection of the rights and welfare of the human subjects.
The IRB is a board or committee that approves the initiation of, and conducts periodic review of, biomedical research involving human subjects. The primary purpose of such review is to assure the protection of the rights and welfare of the human subjects.
The Company's U.S.-based business operations, including the processing and storage of specimens, are handled from its headquarters facility in Oldsmar, Florida. The specimens are stored in commercially available cryogenic storage units at this technologically and operationally advanced facility.
The Company's U.S.-based business operations, including the processing and storage of specimens, are handled from its headquarters facility in Oldsmar, Florida.
During the first quarter of fiscal 2021, the Company capitalized $15,372,382 as a Duke Agreement which was considered to be an asset acquisition and which represented the costs to obtain the Duke Agreement, and also recorded a corresponding liability to Duke for the Duke Agreement.
In fiscal 2021, the Company capitalized $15,372,382 in connection with the Duke License Agreement, which was considered to be an asset acquisition and which represented the costs to obtain the Duke License Agreement, and also recorded a corresponding liability to Duke for the Duke License Agreement. The Company was amortizing these costs over 16 years.
An individual’s own bone marrow may be used for a transplant if the cancer has not entered the marrow system (metastasized). Otherwise, a marrow donor needs to be identified to provide the needed bone marrow.
They can be returned to the individual from whom they were taken (autologous) or donated to someone else (allogeneic). An individual’s own bone marrow may be used for a transplant if the cancer has not entered the marrow system (metastasized). Otherwise, a marrow donor needs to be identified to provide the needed bone marrow.
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.
During fiscal 2023, the Company recognized that there were indications of impairment of the assets associated with the Duke License Agreement. 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.
In recent years, utilizing its infrastructure, experience and resources derived from its umbilical cord blood stem cell business, the Company has expanded its research and development activities to develop technologies related to stem cells harvested from sources beyond umbilical cord blood stem cells.
The specimens are primarily stored in commercially available cryogenic storage units at the Company's technologically and operationally advanced facility in Durham, NC. 1 In recent years, utilizing its infrastructure, experience and resources derived from its umbilical cord blood stem cell business, the Company has expanded its research and development activities to develop technologies related to stem cells harvested from sources beyond umbilical cord blood stem cells.
Evolving legislation and regulations governing private cord blood banking in various jurisdictions throughout the world may impact the Company’s international licensees. In addition, as the organization grows and evolves, other legislation and regulations are expected to impact the Company. One such evolution involves activities that may be designated as or involve medical research or cooperative agreements associated with medical research.
Evolving legislation and regulations governing private cord blood banking in various jurisdictions throughout the world may impact the Company’s international licensees. 7 In addition, as the organization grows and evolves, other legislation and regulations are expected to impact the Company.
Expectant parents may request and receive information about the umbilical cord blood and cord tissue service and enroll online. Viewers may read about successful transplants using Cryo-Cell stored cord blood stem cells and access other topical information.
The site, which is frequently updated and improved, is divided into areas of interest, including sections for expectant parents, medical caregivers and investors. Expectant parents may request and receive information about the umbilical cord blood and cord tissue service and enroll online. Viewers may read about successful transplants using Cryo-Cell stored cord blood stem cells and access other topical information.
Expectant parents have also received information via emails and internet marketing campaigns. The Company’s client support team advisors are available by telephone to enroll clients and educate both expectant parents and the medical community on the life-saving potential of cord blood stem cell preservation.
The Company’s client support team advisors are available by telephone to enroll clients and educate both expectant parents and the medical community on the life-saving potential of cord blood stem cell preservation. 5 The Company continues to use its website, www.cryo-cell.com, to market its services and to provide resource information to expectant parents.
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.
The Company also recorded interest expense of $1,326,766 and $1,077,967 for the fiscal years ended November 30, 2024 and 2023, respectively, which is reflected in interest expense on the accompanying consolidated statements of operations.
As a result, it is anticipated ExtraVault will provide expertise, experience, customer electronic access and cost sensitive solutions to the Company’s partners in the biopharma and healthcare industries.
As a result, it is anticipated ExtraVault will provide expertise, experience, customer electronic access and cost sensitive solutions to the Company’s partners in the biopharma and healthcare industries. Information on our website is not incorporated into this Annual Report on Form 10-K and should not be considered part of this Annual Report on Form 10-K.
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.
The Company believes 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.
Today, cryopreservation of umbilical cord blood stem cells gives individuals the opportunity to potentially take advantage of evolving cellular therapies and other medical technologies. Hematopoietic stem cells are the building blocks of our blood and immune systems. They form the white blood cells that fight infection, red blood cells that carry oxygen throughout the body and platelets that promote healing.
Historically, cryopreservation was required for organ transplants, blood banking and medical research. Today, cryopreservation of umbilical cord blood stem cells gives individuals the opportunity to potentially take advantage of evolving cellular therapies and other medical technologies. Hematopoietic stem cells are the building blocks of our blood and immune systems.
With continued research in this area of medical technology, other therapeutic uses for cord blood stem cells are being explored.
Today, stem cell transplants are known and accepted treatments for approximately 80 diseases, a number of them life-threatening. With continued research in this area of medical technology, other therapeutic uses for cord blood stem cells are being explored.
Cord Blood Stem Cell Processing and Storage Business Background of Business Nearly fifty years ago researchers discovered that cells could be cryopreserved at extremely low temperatures and all cellular activity would cease until the specimens were thawed. Historically, cryopreservation was required for organ transplants, blood banking and medical research.
As a result, during the fourth quarter of fiscal 2023, the Company recorded an impairment charge of the full carrying value of $13,108,064. Cord Blood Stem Cell Processing and Storage Business Background of Business Nearly fifty years ago researchers discovered that cells could be cryopreserved at extremely low temperatures and all cellular activity would cease until the specimens were thawed.
Marketing Marketing Approach 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. Today, stem cell transplants are known and accepted treatments for approximately 80 diseases, a number of them life-threatening.
On May 15, 2024, the Company received the Certificate of Occupancy for the facility in Durham, North Carolina. Marketing Marketing Approach 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.
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).
They form the white blood cells that fight infection, red blood cells that carry oxygen throughout the body and platelets that promote healing. 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.
Additional employees and staff will be hired on an "as needed" basis. The Company believes its relationship with its employees is good. None of our employees are members of any labor union, and we are not a party to any collective bargaining agreement. 10
None of our employees are members of any labor union, and we are not a party to any collective bargaining agreement. 10
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.
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. The Company believes that the market for cord blood stem cell preservation is enhanced by global discussion on stem cell research developments and the current focus on reducing prohibitive health care costs.
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 a result, during the fourth quarter of fiscal 2023, the Company recorded an impairment charge of the full carrying value of $13,108,064. As of the twelve months ended November 30, 2024 and November 30, 2023, the Company recorded $0 and $960,774, respectively, in amortization expense which is reflected in amortization expense on the accompanying consolidated statements of income.
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.
License 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 (“affiliates”). Under the marketing agreements, the Company earns processing and storage revenues from affiliates that store specimens in the Company's facility.
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. 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.
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. Revenue Sharing Agreements (“RSAs”) The Company entered into RSAs prior to 2002 with various third and related parties.
The Company believes that the market for cord blood stem cell preservation is enhanced by global discussion on stem cell research developments and the current focus on reducing prohibitive health care costs. With the increasing costs of bone marrow matches and transplants, a newborn’s umbilical cord blood cells can be stored as a precautionary measure.
With the increasing costs of bone marrow matches and transplants, a newborn’s umbilical cord blood cells can be stored as a precautionary measure. Medical technology is constantly evolving which may provide new uses for cryopreserved cord blood stem cells.
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.
The Company has made the required payments due to Duke to date under the Duke License Agreement, and in Q4 2024 made the final payment of $187,400 under the Clinical Study and Research Agreement that the Company entered into with Duke dated March 3, 2023 in connection with the Second Amendment to the Duke License 8 Agreement.
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The Company continues to use its website, www.cryo-cell.com, to market its services and to provide resource information to expectant parents. The site, which is frequently updated and improved, is divided into areas of interest, including sections for expectant parents, medical caregivers and investors.
Added
As discussed further in Note 12, effective as of February 23, 2021, the Company entered into a Patent and Technology License Agreement (the “Duke License Agreement”) with Duke University (“Duke”). The Duke License Agreement grants the Company certain rights to proprietary processes and regulatory data related to cord blood and cord tissue developed at Duke.
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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.
Added
Through the Duke License Agreement, the Company had anticipated, either directly or through its wholly-owned subsidiary, Celle Corp., exploring, testing, and administering treatments to patients with osteoarthritis and with conditions for which there are limited U.S. Food and Drug Administration (“FDA”) approved therapies, including cerebral palsy, autism, and multiple sclerosis.
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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.
Added
These treatments were expected to utilize the unique immunomodulatory and potential regenerative properties derived from cord blood and cord tissue.
Removed
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.
Added
Through the Duke License Agreement, the Company, together with Celle Corp., hoped to develop three business units, namely: (1) its cord blood bank and other storage services (its historical business); (2) cord blood and cord tissue infusion clinic services initially under the FDA's Expanded Access Program 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) were approved by the FDA.
Removed
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.
Added
Additionally, to support such business expansion, the Company had anticipated opening and launching its Cryo-Cell Institute for Cellular Therapies, which it initially hoped to open as early as the fourth quarter of fiscal 2021, but no later than the first quarter of fiscal 2022, but more recently reported that it anticipated opening it during the fourth quarter of fiscal 2024.
Removed
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
As of the date hereof, the Company can make no assurances it will be able to expand its business into business units (2) and (3) above.
Removed
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.
Added
Until the Duke arbitration claims are resolved, the Company does not anticipate making further investments (other than the completion of a comparability study estimated to cost less than $350,000 in additional capital) in activities related to the Duke License Agreement.
Removed
Upon expiration of the applicable Royalty Term with respect to a particular licensed product or licensed processes, the licenses and rights granted by Duke to the Company under the Agreement with respect to such product or process become fully paid-up, royalty-free, perpetual and irrevocable.
Added
The opening of the Cryo-Cell Institute for Cellular Therapies is also on pause and the Company can make no assurances as to when it will be opened. Additionally, the proposed spinoff of Celle Corp. is also on hold and may not take place depending on the final outcome of the Duke dispute. See, “Risk Factors”.
Removed
In accordance with the original Duke License Agreement, the Company is required to pay Duke a license fee equal to $12,000,000, of which $10,000,000 has been paid to date and an additional $2,000,000 was due on February 23, 2023.
Added
However, the Company believes evolving medical technology could significantly increase the utilization of the umbilical cord blood for transplantation and/or other types of treatments. The Company believes it offers the highest quality, highest value service targeted to a broad base of the market.
Removed
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.
Added
Expectant parents have also received information via emails and internet marketing campaigns.
Removed
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.
Added
One such evolution involves activities that may be designated as or involve medical research or cooperative agreements associated with medical research. These types of activities are also governed by the FDA, specifying oversight by an Institutional Review Board (IRB).
Removed
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.
Added
License Agreement with Duke University As previously disclosed, the Company entered into a Patent and Technology License Agreement dated effective as of February 23, 2021 with Duke University (“Duke”), for exclusive commercial rights to novel infusion treatments for patients with serious neurological conditions (as amended, the “Duke License Agreement”).
Removed
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.
Added
The Duke License Agreement was amended pursuant to the First Amendment to License Agreement dated February 4, 2022 and the Second Amendment to License Agreement dated February 17, 2023.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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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.
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.
Our certificate of incorporation and bylaws include provisions that: • authorize the board of directors to issue, without stockholder approval, blank-check preferred stock that, if issued, could operate as a “poison pill” to dilute the stock ownership of a potential hostile acquirer to prevent an acquisition that is not approved by the board of directors; • establish advance notice requirements for stockholder nominations of directors and for stockholder proposals that can be acted on at stockholder meetings; • limit who may call stockholder meetings; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • provide that the board may increase the size of our board of directors and authorize the board to fill any vacancies on our board of directors by a majority of directors then in office; • authorize us to indemnify officers and directors against losses that they may incur in investigations and legal proceedings resulting from their services to us, which may include services in connection with takeover defense measures; and • establish the Court of Chancery of the State of Delaware, unless the Corporation consents to an alternative forum, as the sole and exclusive forum for certain for any current or former shareholder (including a current or former beneficial owner) to bring any claim relating to an internal matter, other than as to any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination).
Our certificate of incorporation and bylaws include provisions that: • authorize the board of directors to issue, without stockholder approval, blank-check preferred stock that, if issued, could operate as a “poison pill” to dilute the stock ownership of a potential hostile acquirer to prevent an acquisition that is not approved by the board of directors; • establish advance notice requirements for stockholder nominations of directors and for stockholder proposals that can be acted on at stockholder meetings; • limit who may call stockholder meetings; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; 24 • provide that the board may increase the size of our board of directors and authorize the board to fill any vacancies on our board of directors by a majority of directors then in office; • authorize us to indemnify officers and directors against losses that they may incur in investigations and legal proceedings resulting from their services to us, which may include services in connection with takeover defense measures; and • establish the Court of Chancery of the State of Delaware, unless the Corporation consents to an alternative forum, as the sole and exclusive forum for certain for any current or former shareholder (including a current or former beneficial owner) to bring any claim relating to an internal matter, other than as to any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination).
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.
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 19 • compliance with complex foreign and U.S. laws and regulations applicable to international operations may increase the cost of doing business in international jurisdictions.
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.
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.
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.
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 15 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.
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.
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.
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.
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.
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.
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.
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 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 requirements for compliance to this section include annual registration of the device, listing of devices with the FDA, good manufacturing practice, labeling, and prohibitions against misbranding and adulteration. Currently, the states of California, Illinois, Maryland, New Jersey and New York require cord blood banks to be registered or licensed.
The requirements for compliance to this section include annual registration of the device, listing of devices with the FDA, good manufacturing practice, labeling, and prohibitions against misbranding and adulteration. 17 Currently, the states of California, Illinois, Maryland, New Jersey and New York require cord blood banks to be registered or licensed.
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.
From time to time, the Company is subject to proceedings, lawsuits, contract disputes and other claims in the normal course of its business. 16 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.
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.
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.
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.
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.
We anticipate that service fees from the processing and storage of umbilical cord blood stem cells will continue to comprise a substantial majority of our revenue in the future and, therefore, our future success depends on the successful and continued market acceptance of this service.
We anticipate that service fees from the processing and storage of umbilical cord blood stem cells will continue to comprise a substantial majority of our revenue in the future and, therefore, our future success depends on 12 the successful and continued market acceptance of this service.
Significant preclinical or nonclinical testing and studies or clinical trial delays for our investigational treatments could allow our competitors to bring products to market before we do. Our product candidates are subject to substantial government regulation, including the regulation of nonclinical testing and clinical trials.
Significant preclinical or nonclinical testing and studies or clinical trial delays for our investigational treatments could allow our competitors to bring products to market before we do. 13 Our product candidates are subject to substantial government regulation, including the regulation of nonclinical testing and clinical trials.
Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States.
Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their 21 own products and further may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States.
In addition, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the NYSE American LLC and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
In addition, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the NYSE American and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
Decreased disclosures in our SEC filings due to our status a “smaller reporting company” may make it harder for investors to analyze our operating results and financial prospects. We are responsible for the indemnification of our officers and directors.
Decreased disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder for investors to analyze our operating results and financial prospects. We are responsible for the indemnification of our officers and directors.
Failure of these systems or any significant breach of our data security could have an adverse effect on our business and may materially adversely affect our operating results and financial condition.
Failure of these systems 20 or any significant breach of our data security could have an adverse effect on our business and may materially adversely affect our operating results and financial condition.
Risks Related to being a Public Company We incur significant costs and demands as a result of operating as a public company. We incur significant legal, accounting and other expenses to meet our obligations as a publicly traded company.
Risks Related to being a Public Company 22 We incur significant costs and demands as a result of operating as a public company. We incur significant legal, accounting and other expenses to meet our obligations as a publicly traded company.
The Company is in compliance with these requirements, but not assurances can be made that we will be able to meet future regulatory requirements. The division of FDA which regulates HCT/Ps is the Center for Biologics Evaluation and Research (“CBER”). Since 2004, the FDA has formulated a “Tissue Action Plan” which consists of these three rules: 1.
The Company is in compliance with these requirements, but no assurances can be made that we will be able to meet future regulatory requirements. The division of FDA which regulates HCT/Ps is the Center for Biologics Evaluation and Research (“CBER”). Since 2004, the FDA has formulated a “Tissue Action Plan” which consists of these three rules: 1.
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.
International trade disputes could result in tariffs and other protectionist measures that could adversely affect the Company’s business. 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.
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.
Our common stock may be delisted from NYSE American LLC ("NYSE") if we fail to comply with continued listing standards. 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.
Our future success depends upon our ability to retain our key management and other personnel and will also depend in large part on our ability to attract and retain additional qualified software developers, bioinformaticists, operations personnel, sales and marketing personnel, and business development personnel.
Our future success depends upon our ability to retain our key management and other personnel and will also depend in large part on our ability to attract and retain additional qualified doctors, nurses, scientists, software developers, bioinformaticists, operations personnel, sales and marketing personnel, and business development personnel.
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.
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 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.
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.
Based upon shares of common stock outstanding as of November 30, 2024, our executive officers, directors, 5% stockholders (known to us through publicly available information) and their affiliates beneficially owned 23 approximately 45% of our voting stock. Therefore, these stockholders have the ability to substantially influence us through this ownership position.
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.
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”).
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.
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.
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.
Additionally, depending in part on the outcome of the Duke Arbitration Demand, the Company may require capital to pay for the startup expenses relating to its planned infusion clinic, to finance clinical trials related to the Duke License Agreement, to develop biopharmaceutical manufacturing capabilities and for capital expenditures for software enhancements and purchases of equipment and obligations under the Duke License Agreement.
We may encounter such delays and rejection of our product candidates by the FDA or other regulatory authority may also adversely affect our business. Such delays or rejection may be encountered due to, among other reasons, government or regulatory delays, lack of efficacy during clinical trials, unforeseen safety issues, or changes in regulatory policy during the period of product development.
Such delays or rejection may be encountered due to, among other reasons, government or regulatory delays, lack of efficacy during clinical trials, unforeseen safety issues, or changes in regulatory policy during the period of product development.
Although we believe we are in compliance with all applicable laws, a violation of such laws, or the future enactment of more stringent laws or regulations, could subject us to liability, or require us to incur costs that would have an adverse effect on us.
Although we believe we are in compliance with all applicable laws, a violation of such laws, or the future enactment of more stringent laws or regulations, could subject us to liability, or require us to incur costs that would have an adverse effect on us. 18 Risks Related to International Operations Our international operations are subject to risk and we may not be able to successfully protect our intellectual property.
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, 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.
Delisting of the common stock could depress the price of our stock, substantially limit liquidity of our common stock and materially adversely affect our ability to raise capital on terms acceptable to us, or at all.
If we fail to comply with the NYSE's continued listing standards, we may be delisted from the NYSE. Delisting of the common stock could depress the price of our stock, substantially limit liquidity of our common stock and materially adversely affect our ability to raise capital on terms acceptable to us, or at all.
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.
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.
Risks Related to International Operations Our international operations are subject to risk and we may not be able to successfully protect our intellectual property. International licenses of our technology and services account for a portion of our income and our international growth may be limited if we are unable to successfully manage our international activities.
International licenses of our technology and services account for a portion of our income and our international growth may be limited if we are unable to successfully manage our international activities. We are subject to a number of challenges that relate to our international business activities.
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 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.
Accordingly, any significant shortfall in revenues would likely have an immediate material adverse effect on our business, operating results and financial condition.
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.
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.
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.
In addition to testing and approval procedures, extensive regulations also govern marketing, manufacturing, distribution, labeling, and record-keeping procedures. If we do not comply with applicable regulatory requirements, such violations could result in warning letters, non-approval, suspensions of regulatory approvals or ongoing clinical trials, civil penalties and criminal fines, product seizures and recalls, operating restrictions, injunctions, and criminal prosecution.
If we do not comply with applicable regulatory requirements, such violations could result in warning letters, non-approval, suspensions of regulatory approvals or ongoing clinical trials, civil penalties and criminal fines, product seizures and recalls, operating restrictions, injunctions, and criminal prosecution. 14 We may encounter such delays and rejection of our product candidates by the FDA or other regulatory authority may also adversely affect our business.
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.
However, if required to continue to invest in the Duke License Agreement, the Company anticipates funding the related 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Any of the risks described below could significantly and adversely affect our business, prospects, financial condition or results of operations. Our common stock may be delisted from NYSE American LLC ("NYSE") if we fail to comply with continued listing standards.
Any of the risks described below could significantly and adversely affect our business, prospects, financial condition or results of operations. There is uncertainty with regard to whether we will be able to maximize shareholder value through the completion of a strategic transaction or successfully spinoff Celle Corp.
We believe we have sufficient capital to fund our operations for at least the next 12 to 18 months. However, cash flows from operations will depend primarily upon revenues from sales of our umbilical cord blood cellular storage services and controlling expenses. There can be no assurance that sales will continue to increase or even maintain current levels.
However, cash flows from operations will depend primarily upon revenues from sales of its umbilical cord blood and cord tissue cellular storage services and managing discretionary expenses.
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.
Any reductions in expenditures, if necessary, may have an adverse effect on the Company’s business operations, including sales activities and the development of new services and technology. 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.
Removed
We are subject to a number of challenges that relate to our international business activities.
Added
On February 22, 2024, the Company formed its wholly owned Delaware subsidiary, Celle Corp. Celle Corp. was created to hold certain assets of Cryo-Cell not directly associated with the recurring revenue stream from privately banked, umbilical cord blood specimens. The Duke Agreement has been transferred to Celle Corp. and other assets and liabilities were expected to be transferred.
Removed
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
As previously disclosed, the Company’s Board of Directors has authorized the spin-off of Celle Corp. to the Company’s shareholders and to explore all strategic alternatives for the Company (post spin-off) to maximize shareholder value. As result of the Arbitration Demand against Duke, there can be no assurance that any such spinoff or any contemplated strategic alternatives will take place.
Removed
This indemnification policy could result in substantial expenditures, which we may be unable to recoup.
Added
There are several conditions that must first be satisfied, including obtaining certain third party consents, such as that of the Company’s lender.
Added
If the Company is unable to spinoff Cell Corp., it will continue to own Cell Corp. and will continue to be obligated under the Duke Agreement and related agreements, such as the Duke Research Agreement and the Master Services Agreement with Emmes Biopharma Services LLC, all of which impose significant funding obligations, which could negatively impact the Company’s financial condition.
Added
The Company anticipates that its cash and cash equivalents, marketable securities and cash flows from operations, together with external sources of capital will be sufficient to fund its known cash needs for at least the next 12 months.
Added
While the Company previously anticipated that over $50 million would be needed over the next 5 years to fund its activities related to the Duke License Agreement, 11 as a result of the Company’s Arbitration Demand against Duke, as discussed further in Note 18, the Company currently is unable to predict its funding needs for those activities.
Added
Until the Duke arbitration claims are resolved, the Company does not anticipate making further investments (other than the completion of a comparability study estimated to cost less than $350,000 in additional capital) in activities related to the Duke License Agreement.
Added
There can be no assurances that the Company will be able to obtain such additional debt or equity financing on favorable terms or at all.
Added
If expected increases in revenues are not realized, or if expenses are higher than anticipated, or if the Company is unable to obtain additional financing, the Company will be required to reduce or defer cash expenditures or otherwise manage its cash resources during the next 12 months so that they are sufficient to meet the Company’s cash needs for that period.
Added
In addition to testing and approval procedures, extensive regulations also govern marketing, manufacturing, distribution, labeling, and record-keeping procedures.
Added
There is uncertainty with regard to the outcome of the Duke Arbitration Demand.
Added
As discussed in Note 18, on October 4, 2024, the Company filed a demand for arbitration (the “Arbitration Demand”) against Duke with the American Arbitration Association, alleging, among other things, that Duke breached the Duke License Agreement, breached the implied contractual covenant of good faith and fair dealing, fraudulently induced the Company to enter the Duke License Agreement, and violated North Carolina’s Unfair Trade Practices Act.
Added
In connection therewith, the Company has requested an award in the Company’s favor and against Duke for damages in an amount to be proved at a final hearing, interest, attorneys’ fees, and arbitration fees and costs, along with all other relief to which the Company is entitled at law or in equity.
Added
On November 18, 2024, Duke responded to the Arbitration Demand and asserted counterclaims against the Company for breach of the License Agreement and indemnity, seeking unspecified damages and related relief. On December 12, 2024, the Company filed an answering statement in response to Duke’s counterclaims. The Company cannot currently predict the outcome of the arbitration.
Added
It is possible that there could be an unfavorable outcome or resolution of any claims asserted, which could negatively and materially impact the Company’s business, consolidated financial position and results of operations. Litigation is inherently uncertain and expensive and there can be no assurance that the Company will prevail or how long such proceedings may last.
Added
The Company is not currently including an estimate of legal fees and other related litigation costs in its estimate of loss contingencies. There is uncertainty with regard to whether we will be able to maximize shareholder value through the Duke License Agreement.
Added
On February 22, 2024, the Company formed its wholly owned Delaware subsidiary, Celle Corp., to hold certain assets of Cryo-Cell not directly associated with the recurring revenue stream from privately banked, umbilical cord blood specimens.
Added
The Duke License Agreement has been transferred to Celle Corp. and other assets and liabilities were expected to be transferred to Cell Corp. in connection therewith. As previously disclosed, the Company’s Board of Directors has authorized the spin-off of Celle Corp. to the Company’s shareholders and to explore all strategic alternatives for the Company (post spin-off) to maximize shareholder value.
Added
As discussed further in Note 18, on October 4, 2024, the Company filed the Arbitration Demand against Duke, alleging that Duke fraudulently induced Cryo-Cell to enter the Duke License Agreement and breached the agreement on various occasions.
Added
As result of the Arbitration Demand against Duke, there can be no assurance that any such the spinoff or any contemplated strategic alternatives will take place.
Added
Furthermore, as further discussed in Note 18, there can be no assurances the Company will be able to commercialize the rights licensed under the Duke License Agreement, treat patients using the rights and technologies licensed from Duke, spinoff Cell Corp. or otherwise obtain the benefits of the Duke License Agreement.
Added
Nor can there be any assurances it will open the Cryo-Cell Institute for Cellular Therapies. We are not assured of recouping our damages related to the Arbitration Demand against Duke nor our investment in the Duke License Agreement.
Added
On October 4, 2024, the Company filed the Arbitration Demand against Duke with the AAA, alleging, among other things, that Duke is in breach of the Duke License Agreement, breached the implied contractual covenant of good faith and fair dealing, fraudulently induced the Company to enter into the Duke License Agreement, and violated North Carolina’s Unfair Trade Practices Act.
Added
In connection therewith, the Company has requested an award in the Company’s favor and against Duke for damages in an amount to be proved at a final hearing, interest, attorneys’ fees, and arbitration fees and costs, along with all other relief to which the Company is entitled at law or in equity.
Added
Cryo-Cell has notified Duke that it believes such damages exceed $100 million. On November 18, 2024, Duke responded to the Arbitration Demand and asserted counterclaims against the Company for breach of the License Agreement and indemnity, seeking unspecified damages and related relief. On December 12, 2024, the Company filed an answering statement in response to Duke’s counterclaims.
Added
The Company cannot currently predict the outcome of the arbitration. It is possible that there could be an unfavorable outcome or resolution of any 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.
Added
The Company may not be able to recover all or any of its damages or all or any of its investment in the Duke License Agreement.
Added
If required, we may not be able to obtain such royalty or license agreements or obtain them on terms acceptable to us.
Added
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.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−0 removed4 unchanged
Biggest changeThe 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
Biggest changeThe future minimum rental payments under the current operating lease are as follows: Fiscal Year Ending November 30, Rent 2025 $ 495,350 2026 $ 493,502 2027 $ 38,247 26
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.
Rent charged to operations was $442,874 and $400,716 for the fiscal years ended November 30, 2024 and 2023, respectively, and is included in cost of sales and selling, general and administrative expenses in the consolidated statements of operations.
Added
On June 25, 2024, the Company entered into an extension of this lease for a two-year term for annual rent of approximately $53,000 commencing on July 1, 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

4 edited+8 added−0 removed4 unchanged
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.
Biggest changeIt is possible, however, that there could be an unfavorable outcome or resolution of the claims asserted (inclusive of the claims the Company asserts against Duke and the counterclaims Duke asserts against the Company), which could negatively and materially impact the Company’s business, consolidated financial position and results of operations.
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.
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. On March 19, 2024, the Company filed an answering statement and counterclaim in response to the plaintiff’s claims.
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.
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. 27 PART II
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.
The Company believes that the resolution of the Duke counterclaims should not have a material adverse effect on the Company’s business, consolidated financial position or results of operations.
Added
A final hearing on the plaintiff’s remaining individual claims and on the Company’s counterclaim is scheduled for September 2025. The Company believes the plaintiff’s claims are unlikely to prevail and is contesting the action vigorously.
Added
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. 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.
Added
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 October 4, 2024, the Company filed a demand for arbitration (the “Arbitration Demand”) against Duke University with the American Arbitration Association alleging that Duke fraudulently induced the Company to enter its Patent and Technology License Agreement with Duke and that Duke breached the agreement on various occasions.
Added
The Arbitration Demand includes five counts against Duke, as follows: Count I – Breach of the Duke License Agreement; Count II – Breach of the Implied Contractual Covenant of Good Faith and Fair Dealing; Count III – Fraudulent Inducement to Enter the Duke License Agreement; Count IV – Violation of North Carolina’s Unfair Trade Practices Act; and Count V – Unjust Enrichment.
Added
In connection therewith, the Company has requested an award in the Company’s favor and against Duke for damages in an amount to be proved at a final hearing, interest, attorneys’ fees, and arbitration fees and costs, along with all other relief to which the Company is entitled at law or in equity.
Added
On November 18, 2024, Duke responded to the Arbitration Demand and asserted counterclaims against the Company for breach of the License Agreement and indemnity, seeking unspecified damages and related relief. On December 12, 2024, the Company filed an answering statement in response to Duke’s counterclaims. The Company believes Duke’s counterclaims are without merit and intends to contest them vigorously.
Added
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. See “Note 18” and "Risk Factors" for additional information regarding Duke.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+1 added−0 removed0 unchanged
Biggest changeThe 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.
Biggest changeThe dividend was funded by a revolving line of credit from Susser Bank (see Note 4).
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.
As of November 30, 2024, the Company had 144 shareholders of record, and management believes there are approximately 1,500 additional beneficial holders of the Company’s common stock.
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.
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, 2025 was $8.05 per share.
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
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 15,000 $ 3.09 — Cryo-Cell International, Inc. 2012 Stock Incentive Plan 188,578 $ 8.09 — Cryo-Cell International, Inc. 2022 Stock Incentive Plan 765,300 $ 9.46 724,700 Total 968,878 $ 9.10 724,700
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.
Stock Repurchases in the Fourth Quarter There were no purchases of the Company's common stock during the three months ended November 30, 2024. The following table sets forth as of November 30, 2024, 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.
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. The total paid by the Company was $7,672,728.
On October 29, 2024, the Board of Directors of the Company declared a cash dividend of $0.25 per share of common stock to be paid to its stockholders of record as of the close of business on November 29, 2024. The total paid by the Company was $2,020,539.
Added
On January 24, 2025, subsequent to the balance sheet date, the Board of Directors of the Company declared a cash dividend of $0.25 per share of common stock to be paid to its stockholders of record as of the close of business on February 28, 2025. Unregistered Sale of Equity Securities and Use of Proceeds None.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

59 edited+25 added−9 removed66 unchanged
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.
Biggest changeThe increase in cash and cash equivalents during the twelve months ended November 30, 2024 was primarily attributable to the following: • Net cash provided by operating activities in fiscal 2024 was $6,010,910 which was attributable to the Company’s operating activities. • Net cash provided by operating activities in fiscal 2023 was $8,919,754 which was attributable to the Company’s operating activities. • Net cash used in investing activities in fiscal 2024 was $4,876,899 which was primarily attributable to $2,403,708 used to purchase equipment, $1,200,000 used as part of the Patent and Technology License Agreement with Duke (See Note 18), and $2,891,423 for the purchase of marketable securities, which was offset by the sale of marketable securities in the amount of $1,516,359. • 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 including a new facility, $799,999 used as part of the Patent Option and Technology License Agreement with Duke (See Note 18) and $1,083,923 for the purchase of marketable securities, which was offset by the sale of marketable securities in the amount of $397,831. • Net cash used in financing activities in fiscal 2024 was $979,118 which was primarily attributable to the payments of $136,382 to partially repay the Susser Bank notes payable described above, $1,423,871 used to repurchase the Company's common stock, and $2,922,728 to repay the RCF which was partially offset by the receipt of $5,220,000 received per a RCF from Susser Bank described above. • Net cash from 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.
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.
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.
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.
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.
Given the criteria under which these RSAs are established, cash flows related to these contracts can fluctuate from period to period. All payments made to the other parties to the RSAs are recognized as interest expense. At such time as the total payments can be determined, the Company will commence amortizing these liabilities under the effective interest method.
Given the criteria under which these RSAs are established, cash flows related to these contracts can fluctuate from period to period. All payments made to the other 38 parties to the RSAs are recognized as interest expense. At such time as the total payments can be determined, the Company will commence amortizing these liabilities under the effective interest method.
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 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 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 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 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 processes and stores specimens sent directly 37 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 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 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.
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.
Due to changes in sales trends and estimated recoverability of cost capitalized into inventory, an impairment charge of $0 and $3,737,133 was recognized during the fourth quarter of 2024 and 2023, 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.
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.
The following discussion and analysis of the financial condition and results of operations of the Company for the two years ended November 30, 2024, 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.
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.
Overview The Company currently stores over 240,000 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.
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
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. 39
ITEM 6. R E SERVED. Not applicable. ITEM 7 . MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS .
ITEM 6. R E SERVED. Not applicable. 28 ITEM 7 . MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS .
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 Company did not note any impairment for the twelve months ended November 30, 2024 and November 30, 2023. 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, 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 decrease in cost of sales for the twelve months ended November 30, 2024 versus November 30, 2023 is due to the decrease in the number of new domestic cord blood specimens processed during the twelve months ended November 30, 2024 versus November 30, 2023. Selling, General and Administrative Expenses.
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.
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. 36 Stock Compensation As of November 30, 2024, the Company has three stock-based employee compensation plans, which are described in Note 10 to the consolidated financial statements.
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.
The contingent consideration was remeasured to fair value as of November 30, 2024. 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 Company anticipates that its cash and cash equivalents, marketable securities and cash flows from future operations, together with external sources of capital will be sufficient to fund its known cash needs for at least the next 12 months.
The Company anticipates that its cash and cash equivalents, marketable securities and cash flows from operation, together with external sources of capital will be sufficient to fund its known cash needs for at least the next 12 months.
The impairment of public inventory for the twelve months ended November 30, 2023 was $3,737,133 compared to $0 for the 2022 period.
The impairment of public inventory for the twelve months ended November 30, 2024 was $0 compared to $3,737,133 for the 2023 period.
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.
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 $2,717,000 and $1,821,000 of U.S. income taxes paid for fiscal years ended November 30, 2024 and November 30, 2023, respectively.
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.
The remaining interest expense for the twelve months ended November 30, 2023 is due to the accretion of the outstanding liability due to Duke per the Agreement, see Note 18. During fiscal 2024 and fiscal 2023, the Company capitalized $409,307 and $683,524, respectively, of interest related to the construction of the Company's new facility in North Carolina.
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.
The factors that might cause such differences include, among others: a. the complexities, uncertainties, required consents and timing related to the potential spinoff of Celle Corp., b. any adverse effect or limitations caused by recent increases in government regulation of stem cell storage facilities; c. any increased competition in our business including increasing competition from public cord blood banks particularly in overseas markets but also in the U.S.; d. 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; e. 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; f. 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; g. any technological or medical breakthroughs that would render our business of stem cell preservation obsolete; h. any material failure or malfunction in our storage facilities; or any natural disaster or act of terrorism that adversely affects stored specimens; i. any adverse results to our prospects, financial condition or reputation arising from any material failure or compromise of our information systems; j. the costs associated with defending or prosecuting litigation matters, particularly including litigation related to intellectual property, and any material adverse result from such matters; k. the success of our licensing agreements and their ability to provide us with royalty fees; l. any difficulties and increased expense in enforcing our international licensing agreements; m. any adverse performance by or relations with any of our licensees; n. any inability to enter into new licensing arrangements including arrangements with non-refundable upfront fees; 29 o. any inability to realize cost savings as a result of recent acquisitions; p. any inability to realize a return on an investment; q. 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; r. the success of our global expansion initiatives and product diversification; s. our actual future ownership stake in future therapies emerging from our collaborative research partnerships; t. our ability to minimize our future costs related to R&D initiatives and collaborations and the success of such initiatives and collaborations; u. any inability to successfully identify and consummate strategic acquisitions; v. any inability to realize benefits from any strategic acquisitions; w. the Company’s ability to realize a profit on the acquisition of PrepaCyte-CB; x. the Company’s ability to realize a profit on the acquisition of Cord:Use; 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, cc. the expense, timing and uncertain results of clinical trials related to the Duke Agreement, dd. the Company's ability to commercialize the rights licensed under the Duke License Agreement, treat patients using the rights and technologies licensed from Duke or otherwise obtaining the benefits of the Duke License Agreement, ee. the Company's spinoff of Celle Corp., ff. the outcome of the Company's Arbitration Demad against Duke, and gg. 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.
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.
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 $118,859 for the year ended November 30, 2024 compared to $171,697 for the 2023 period.
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.
Change in the fair value of the contingent consideration for the fiscal year ended November 30, 2024 was an increase of $2,794 compared to an decrease of $1,050,978 for fiscal 2023. 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.
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.
Interest Expense is also comprised of $1,326,766 and $1,077,967 as of the twelve months ended November 30, 2024 and November 30, 2023, respectively, for amounts due to the parties to the Company’s revenue sharing agreements based on the Company’s storage revenue collected.
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.
Due to changes in sales trends and estimated recoverability of cost capitalized into inventory, an impairment charge of $0 and $3,737,133 was recognized during the fourth quarter of November 30, 2024 and November 30, 2023, respectively, to reduce inventory from cost to net realizable value. Impairment of investment – Tianhe stock.
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.
Inventories As part of the Asset Purchase Agreement, the Company has an agreement with Duke University (“Duke”) for Duke to receive, process, and store cord blood units for the Public Cord Blood Bank (“Duke Services”). As of November 30, 2024, the Company had approximately 6,000 cord blood units in inventory.
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.
Also, included in Cost of Sales is $45,082 and $35,490 related to the costs associated with production of the PrepaCyte CB processing and storage system for the twelve months ended November 30, 2024 and November 30, 2023, respectively.
Any reductions in expenditures, if necessary, may have an adverse effect on the Company’s business operations, including sales activities and the development of new services and technology.
Any reductions in expenditures, if necessary, may have an adverse effect on the Company’s business operations, including sales activities and the development of new services and technology. See "Note 18" and "Risk Factors".
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.
Also included in Cost of Sales is $1,012,788 and $1,138,096 related to public cord blood banking for the twelve months ended November 30, 2024 and November 30, 2023, respectively.
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 .
Processing and storage fee revenue is attributable to a 4% 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 2024 to fiscal year 2023. Product Revenue .
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.
Interest expense during the fiscal year ended November 30, 2024 was $1,864,684 compared to $1,236,794 in fiscal 2023, of which $532,188 and $140,589, 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, 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 .
For the twelve months ended November 30, 2024, revenue from the public cord blood banking sales was $366,672 compared to $481,148 for the twelve months ended November 30, 2023. Cost of Sales .
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, 2024, the Company had revenue of $31,986,106 compared to $31,343,695 for the fiscal year ended November 30, 2023, an increase of 2% as a result of the reasons discussed below. Processing and Storage Fees.
In order to undertake any of the aforementioned activities, the Company may take on substantial debt or equity capital which could increase the risk of investment in the Company. Results of Operations Revenue.
These options may or may not be related to the Company’s current business. In order to undertake any of the aforementioned activities, the Company may take on substantial debt or equity capital which could increase the risk of investment in the Company. Results of Operations Revenue.
In accordance with ASC 606, the Company is required to capitalize certain contract acquisition costs consisting primarily of commissions paid when contracts are signed and amortize these costs on a systematic basis, consistent with the pattern of transfer of the storage services provided over time for which the asset relates.
In accordance with ASC 606, the Company is required to capitalize certain contract acquisition costs consisting primarily of commissions paid when contracts are signed and amortize these costs on a systematic basis, consistent with the pattern of transfer of the storage services provided over time for which the asset relates. 35 Under ASC 606, revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised services are transferred to the customers.
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 .
For the twelve months ended November 30, 2024, revenue from the product sales was $67,884 compared to $66,456 for the twelve months ended November 30, 2023. 31 Public Cord Blood Banking Revenue .
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”).
Liquidity and Capital Resources On July 18, 2022, the Company entered into a Credit Agreement (“Susser Agreement ”) with Susser Bank, a Texas state bank, as administrative agent (“Susser”) on behalf of itself and the other lenders (collectively, the “Lenders”), which was amended pursuant to an Amendment to Credit Agreement dated July 29, 2022, 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”).
Cash flows from operations will depend primarily upon increasing revenues from sales of its umbilical cord blood and cord tissue cellular storage services, developing its infusion services at the Cryo-Cell Institute for Cellular Therapies and managing discretionary expenses.
However, cash flows from operations will depend primarily upon increasing revenues from sales of its umbilical cord blood and cord tissue cellular storage services and managing discretionary 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.
Selling, general and administrative expenses during the fiscal year ended November 30, 2024 were $18,521,218 as compared to $17,167,361 for the fiscal year ended November 30, 2023 representing an 8% 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.
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.
Through the Duke License Agreement, the Company intended to develop three business units, namely: (1) its cord blood bank and other storage services (its historical business); (2) cord blood and cord tissue infusion clinic services 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 biologics license application (“BLA”) approvals for new indications, and (3) biopharmaceutical manufacturing if BLA(s) were approved by the FDA.
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.
For the fiscal year ended November 30, 2024, processing and storage fees were $31,551,550 compared to $30,796,091 for the fiscal year ended November 30, 2023.
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.
During fiscal 2023, the Company recognized that there were indications of impairment of the assets associated with the Duke License Agreement. 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.
The Company offers the cord tissue service in combination with the umbilical cord blood service. On February 23, 2021, the Company entered into a Patent and Technology License Agreement (the “Duke Agreement”) with Duke University (“Duke”). The Duke Agreement grants the Company the rights to proprietary processes and regulatory data related to cord blood and cord tissue developed at Duke.
The Company offers the cord tissue service in combination with the umbilical cord blood service. 30 As discussed further in Note 18, on February 23, 2021, the Company entered into a Patent and Technology License Agreement (the “Duke License Agreement”) with Duke University (“Duke”).
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.
Depreciation and Amortization . Depreciation and amortization (not included in Cost of Sales) for the fiscal year ended November 30, 2024 was $483,522 compared to $1,124,228 for fiscal 2023. The decrease is due to the impairment of the assets associated with the Duke License Agreement, see Note 18. Change in the Fair Value of Contingent Consideration.
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, 2024, cost of sales was $7,947,752 as compared to $8,390,463 for the fiscal year ended November 30, 2023, representing a 5% decrease.
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.
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.
Consistent with its fiduciary duties, the board of directors and management has reviewed and will continue to review strategic options and opportunities for the Company, in order to maximize shareholder value.
Consistent with its fiduciary duties, the board of directors and management has reviewed and will continue to review strategic options and opportunities for the Company, in order to maximize shareholder value. These options may include, but are not limited to, strategic mergers or acquisitions, investments in other public and/or private companies, repurchases of the Company's common stock or RSA interests.
Under ASC 606, revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised services are transferred to the customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring services to a customer ("transaction price").
Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring services to a customer ("transaction price").
On July 29, 2022, the Company entered into an Amendment to Credit Agreement (“Amendment”) with Susser on behalf of itself and the lenders. The Company is exposed to interest rate risk related to its variable rate debt obligation under the Term Note.
See Note 4. The Company is exposed to interest rate risk related to its variable rate debt obligation under the Term Note. On March 27, 2023, the Company entered into an interest rate swap agreement with Susser to manage exposure to interest rate risk related to its variable rate debt obligation under the Term Note.
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.
However, if required to continue to invest in the Duke License Agreement, the Company anticipates funding the related 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.
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 swap agreement had a notional amount equal to the Term Loan. The agreement is to pay the Company monthly SOFR plus 3.25% on the notional amount and the Company is to pay a fixed rate of interest equal to 6.96%.
The Company plans to explore, test, and/or administer these treatments to patients with osteoarthritis and with conditions for which there are limited U.S. Federal Drug Administration (“FDA”) approved therapies, including cerebral palsy, autism, and multiple sclerosis. These treatments utilize the unique immunomodulatory and potential regenerative properties derived from cord blood and cord tissue.
Food and Drug Administration (“FDA”) approved therapies, including cerebral palsy and autism. These treatments were expected to utilize the unique immunomodulatory and potential regenerative properties derived from cord blood and cord tissue.
The effective date of the amended term loan was July 29, 2022 with a maturity date of July 29, 2032. On November 18, 2022, the Company terminated the interest rate swap agreement recording a gain on interest rate swap of $446,200 for the fiscal year ended November 30, 2022.
The effective date of the amended term loan was March 27, 2023 with a maturity date of July 29, 2032. On April 15, 2024, the Company terminated the interest 33 rate swap agreement and recorded proceeds of $228,000.
A variable interest rate will be paid on the outstanding balance of the Term Note. Prior to the loans, the Company’s principal source of cash has been from sales of its umbilical cord blood program to customers and royalties from licensees.
Prior to the loans, the Company’s principal source of cash has been from sales of its umbilical cord blood program to customers and royalties from licensees. At November 30, 2024, the Company had cash and cash equivalents of $560,960 as compared to $406,067 at November 30, 2023.
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.
During fiscal 2023, the Company recognized that there were indications of impairment of the assets associated with the Duke license agreement. The Company evaluated the triggering events that existed as of November 30, 2023, tested the asset group for recoverability and measured the 32 long-lived asset impairment.
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 .
Research, development and related engineering expenses for the fiscal year ended November 30, 2024, were $1,242,536 as compared to $1,171,456 in 2023, of which $324,435 and $0, respectively, related to the Clinical Study and Research Agreement with Duke University to provide funding to complete the Duke IMPACT Study (See Note 18) and $396,731 and $0, respectively, related to clinical trial expenses related to the Company's Master Services Agreement with Emmes (See Note 18).
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.
U.S. income tax expense for the twelve months ended November 30, 2024 was $2,402,026 compared to an income tax benefit of $3,842,826 for the twelve months ended November 30, 2023. $1,314,454 of the income tax expense for the twelve months ended November 30, 2024, is attributable to the impact of the state of Florida revenue apportionment methodology change.
Our executive offices are located at 700 Brooker Creek Blvd, Suite 1800, Oldsmar, Florida 34677 and our telephone number at such office is (813) 749-2100. Our website address is https://www.cryo-cell.com . Information contained on our website is not deemed part of this report.
As a result, during the fourth quarter of fiscal 2023, the Company recorded an impairment charge of the full carrying value of $13,108,064. Corporate Information We are a Delaware corporation that was incorporated in 1989. Our executive offices are located at 700 Brooker Creek Blvd, Suite 1800, Oldsmar, Florida 34677 and our telephone number at such office is (813) 749-2100.
Removed
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.
Added
The Duke License Agreement grants the Company certain rights to proprietary processes and regulatory data related to cord blood and cord tissue developed at Duke. Through the Duke License Agreement, the Company had anticipated, either directly or through its wholly-owned subsidiary, Celle Corp., exploring, testing, and administering treatments to patients for which there are limited U.S.
Removed
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.
Added
Additionally, to support such business expansion, the Company had anticipated opening and launching the Cryo-Cell Institute for Cellular Therapies, which it initially hoped to open as early as the fourth quarter of fiscal 2021, but no later than the first quarter of fiscal 2022 (and more recently reported as anticipated to open during the fourth quarter of fiscal 2024).
Removed
These options may include, but are not limited to, strategic mergers or acquisitions, investments in other public and/or private companies, repurchases of the Company's common stock or RSA interests, These options may or may not be related to the Company’s current business.
Added
As of the date hereof, the Company can make no assurances it will be able to expand its business into business units (2) and (3) above.
Removed
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.
Added
Until the Duke Dispute is resolved, the Company does not anticipate making further investments (other than the completion of a comparability study estimated to cost less than $350,000 in additional capital) in activities related to the Duke License Agreement.
Removed
At November 30, 2023, the Company had cash and cash equivalents of $406,067 as compared to $1,703,958 at November 30, 2022.
Added
The opening of the Cryo-Cell Institute for Cellular Therapies is also on pause and the Company can make no assurances as to when it will be opened. Additionally, the proposed spinoff of Celle Corp. is also on hold and may not take place depending on the final outcome of the Duke Dispute. See, “Risk Factors”.
Removed
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
Our website address is https://www.cryo-cell.com . Information on our website is not incorporated into this Annual Report on Form 10-K and should not be considered part of this Annual Report on Form 10-K.
Removed
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.
Added
The impairment of investment – Tianhe stock for the twelve months ended November 30, 2024 was $308,000 compared to $0 for the same period in 2023.
Removed
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
In accordance with the Asset Purchase Agreement between Cryo-Cell and Cord:Use dated June 11, 2018, Cryo-Cell acquired Cord:Use’s shares of common stock of Tianhe Stem Cell Biotechnologies, Inc., an Illinois corporation, engaged in medical and life science research that involves the use of stem cells derived from umbilical cord blood units in clinical trials for humans.
Removed
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.
Added
The Tianhe stock investment value is based on fair value. Due to the lack of activity and lack of any profits, the Company believes that the investment is fully impaired. Impairment of Duke Assets. The impairment of Duke assets for the twelve months ended November 30, 2024 was $0 compared to $13,108,064 for the 2023 period.
Added
Gain on Interest Rate Swap . Gain on the change in the fair value of a derivative for the fiscal year ended November 30, 2024 was $105,887 versus $122,133 for the fiscal year ended November 30, 2023.
Added
The change decreased the value of the Company’s deferred tax asset by $1,314,454 resulting in an increase of income tax expense on the accompanying consolidated statement of operations as of November 30, 2024. Deferred tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled.
Added
The Company has a revolving line of credit, described above. The balance as of November 30, 2024 is $3,520,000 and is reflected on the accompanying balance sheet. As previously disclosed, the Company entered into a Patent and Technology License Agreement dated effective as of February 23, 2021 (as amended, the "Duke License Agreement") with Duke University (“Duke”).

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