Cryo Cell International Inc 10-Q for FY2021 Q2

Cryo Cell International Inc (CCEL)

10-Q 2021-07-15 For: 2021-05-31

Added on April 06, 2026

About this 10-Q

Cryo Cell International Inc filed this 10-Q on July 15, 2021, covering the quarter ended May 31, 2021 (FY2021 Q2).

Headline figures

Quarter ended May 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $7.21M; down 8.5% from $7.87M a year earlier
Net income: $1.17M; up 22.8% from net income of $953.34K a year earlier
Diluted EPS: $0.14; up 16.7% from $0.12 a year earlier

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	PAGE
PART I - FINANCIAL INFORMATION (UNAUDITED)

Item 1. Financial Statements

Consolidated Balance Sheets	3

Consolidated Statements of Income	4

Consolidated Statements of Cash Flows	5

Consolidated Statements of Stockholders’ Equity (Deficit)	6

Notes to Consolidated Financial Statements	7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	33

Item 3. Quantitative and Qualitative Disclosures about Market Risk	41

Item 4. Controls and Procedures	41

PART II - OTHER INFORMATION	43

Item 1. Legal Proceedings	43

Item 1A. Risk Factors	43

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 3. Defaults Upon Senior Securities	43

Item 4. Mine Safety Disclosures	43

Item 5. Other Information	43

Item 6. Exhibits	44

SIGNATURES	45

	(Unaudited)
	May 31,			November 30,
	2021			2020
ASSETS
Current Assets
Cash and cash equivalents	$	7,948,069		$	10,361,125
Marketable securities		73,388			88,476
Accounts receivable (net of allowance for doubtful accounts of $2,794,455 and $2,781,668, respectively)		5,215,556			6,322,960
Prepaid expenses		349,936			611,627
Inventory, current portion		890,388			927,318
Other current assets		305,995			244,696
Total current assets		14,783,332			18,556,202
Property and Equipment-net		1,552,984			1,640,774
Other Assets
Investment - Tianhe stock		308,000			308,000
Patent option agreement		—			350,000
Duke license agreement		15,132,189			—
Intangible assets, net		1,596,849			1,181,588
Inventory, net of current portion		10,992,550			11,064,034
Goodwill		1,941,411			1,941,411
Deferred tax assets		10,363,967			10,363,967
Operating lease right-of-use asset		1,067,664			299,089
Deposits and other assets, net		579,466			495,029
Total other assets		41,982,096			26,003,118
Total assets	$	58,318,412		$	46,200,094
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable	$	1,236,190		$	957,390
Accrued expenses		1,491,135			2,898,211
Current portion of note payable		3,100,000			3,100,000
Current portion of operating lease liability		301,613			275,570
Current portion of Duke license agreement liability		4,889,830			—
Deferred revenue		9,101,008			9,183,450
Total current liabilities		20,119,776			16,414,621
Other Liabilities
Deferred revenue, net of current portion		29,126,311			27,200,910
Contingent consideration		1,230,647			1,509,852
Note payable, net of current portion and debt issuance costs		326,286			2,841,214
Operating lease long-term liability		769,021			23,632
Duke license agreement liability		1,868,253			—
Long-term liability - revenue sharing agreements		875,000			875,000
Total other liabilities		34,195,518			32,450,608
Total liabilities		54,315,294			48,865,229
Commitments and contingencies (Note 9)		—			—
Stockholders' Equity (Deficit)
Preferred stock ($.01 par value, 500,000 authorized and none issued and outstanding)		—			—
Series A Junior participating preferred stock ($.01 par value, 20,000 authorized and none issued and outstanding)		—			—
Common stock ($.01 par value, 20,000,000 authorized; 14,533,040 issued and 8,445,015 outstanding as of May 31, 2021 and 13,633,638 issued and 7,545,613 outstanding as of November 30, 2020)		145,330			136,336
Additional paid-in capital		41,376,640			36,581,600
Treasury stock, at cost		(20,563,357	)		(20,563,357	)
Accumulated equity		(16,955,495	)		(18,819,714	)
Total stockholders' equity (deficit)		4,003,118			(2,665,135	)
Total liabilities and stockholders' equity (deficit)	$	58,318,412		$	46,200,094

	For the Three Months Ended						For the Six Months Ended
	May 31,			May 31,			May 31,			May 31,
	2021			2020			2021			2020
Revenue:
Processing and storage fees	$	7,158,886		$	7,399,074		$	13,897,517		$	14,805,362
Public banking revenue		46,309			213,642			130,295			367,721
Licensee and royalty income		—			201,828			—			201,828
Product revenue		—			57,300			38,000			117,707
Total revenue		7,205,195			7,871,844			14,065,812			15,492,618
Costs and Expenses:
Cost of sales		2,222,671			2,480,543			4,234,868			4,983,687
Selling, general and administrative expenses		3,148,396			3,558,568			6,581,708			7,428,597
Change in fair value of contingent consideration		(431,599	)		27,423			(279,205	)		(23,989	)
Research, development and related engineering		3,237			9,821			9,427			15,543
Depreciation and amortization		267,422			43,303			288,685			87,524
Total costs and expenses		5,210,127			6,119,658			10,835,483			12,491,362
Operating Income		1,995,068			1,752,186			3,230,329			3,001,256
Other Expense:
(Losses) gains on marketable securities		(12,512	)		(53,572	)		(15,088	)		1,376
Other income		25			105			50			732
Interest expense		(341,390	)		(365,371	)		(621,609	)		(730,670	)
Total other expense		(353,877	)		(418,838	)		(636,647	)		(728,562	)
Income before income tax expense		1,641,191			1,333,348			2,593,682			2,272,694
Income tax expense		(470,562	)		(380,010	)		(729,463	)		(632,390	)
Net Income	$	1,170,629		$	953,338		$	1,864,219		$	1,640,304
Net income per common share - basic	$	0.15		$	0.13		$	0.24		$	0.22
Weighted average common shares outstanding - basic		7,956,301			7,545,613			7,765,724			7,543,376
Net income per common share - diluted	$	0.14		$	0.12		$	0.23		$	0.20
Weighted average common shares outstanding - diluted		8,279,277			8,112,289			8,066,016			8,120,454

	For the Six Months Ended
	May 31,			May 31,
	2021			2020
Cash flows from operating activities:
Net income	$	1,864,219		$	1,640,304
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		391,218			190,872
Loss on disposal of property and equipment		—			1,032
Change in fair value of contingent consideration		(279,205	)		(23,989	)
Losses (gains) on marketable securities		15,088			(1,376	)
Compensatory element of stock options		152,572			288,752
Provision for doubtful accounts		105,279			401,679
Amortization of debt issuance costs		35,072			46,818
Amortization of operating lease right-of-use asset		136,116			131,351
Changes in assets and liabilities:
Accounts receivable		1,002,125			(278,805	)
Prepaid expenses		261,691			(184,615	)
Inventory		108,414			293,762
Other current assets		(61,299	)		18,519
Deposits and other assets, net		(113,564	)		(35,340	)
Accounts payable		278,800			(417,259	)
Accrued expenses		(1,407,076	)		(146,354	)
Operating lease liability		(133,259	)		(131,185	)
Deferred revenue		1,842,959			1,643,589
Net cash provided by operating activities		4,199,150			3,437,755
Cash flows from investing activities:
Purchases of property and equipment		(22,272	)		(50,228	)
Payment of Duke License Agreement		(5,106,224	)		—
Net cash used in investing activities		(5,128,496	)		(50,228	)
Cash flows from financing activities:
Repayments of note payable		(2,550,000	)		(1,549,999	)
Proceeds from the exercise of stock options		1,066,290			41,000
Net cash used in financing activities		(1,483,710	)		(1,508,999	)
Change in cash and cash equivalents		(2,413,056	)		1,878,528
Cash and cash equivalents - beginning of period		10,361,125			6,541,037
Cash and cash equivalents - end of period	$	7,948,069		$	8,419,565
Supplemental non-cash operating activities:
Operating lease liability and right-of-use asset due to adoption of ASC 842	$	—		$	562,775
Lease liability arising from right-of-use asset	$	904,691		$	—
Patent option agreement credit to purchase of patents and licenses	$	500,000		$	—
Liabilities incurred for the purchase of patents and licenses	$	11,258,083		$	—
Supplemental financing activities:
Stock issued for the purchase of patents and licenses	$	3,585,172		$	—

700 Brooker Creek Blvd. Oldsmar, FL 34677
(Address of Principal Executive Offices) (Zip Code)

	For the Three Months Ended May 31, 2021
					Additional								Total
	Common Stock				Paid-In		Treasury			Accumulated			Stockholders'
	Shares		Amount		Capital		Stock			Deficit			Equity
Balance at February 28, 2021		13,658,938	$	136,589	$	36,857,787	$	(20,563,357	)	$	(18,126,124	)	$	(1,695,105	)
Common stock issued		874,102		8,741		4,451,099								4,459,840
Compensatory element of stock options						67,754								67,754
Net income											1,170,629			1,170,629
Balance at May 31, 2021		14,533,040	$	145,330	$	41,376,640	$	(20,563,357	)	$	(16,955,495	)	$	4,003,118

	For the Six Months Ended May 31, 2021
					Additional								Total
	Common Stock				Paid-In		Treasury			Accumulated			Stockholders'
	Shares		Amount		Capital		Stock			Deficit			Equity
Balance at November 30, 2020		13,633,638	$	136,336	$	36,581,600	$	(20,563,357	)	$	(18,819,714	)	$	(2,665,135	)
Common stock issued		899,402		8,994		4,642,468								4,651,462
Compensatory element of stock options						152,572								152,572
Net income											1,864,219			1,864,219
Balance at May 31, 2021		14,533,040	$	145,330	$	41,376,640	$	(20,563,357	)	$	(16,955,495	)	$	4,003,118

	For the Three Months Ended May 31, 2020
					Additional								Total
	Common Stock				Paid-In		Treasury			Accumulated			Stockholders'
	Shares		Amount		Capital		Stock			Deficit			Deficit
Balance at February 29, 2020		13,633,638	$	136,336	$	36,183,738	$	(20,563,357	)	$	(21,757,344	)	$	(6,000,627	)
Compensatory element of stock options						64,494								64,494
Net income											953,338			953,338
Balance at May 31, 2020		13,633,638	$	136,336	$	36,248,232	$	(20,563,357	)	$	(20,804,006	)	$	(4,982,795	)

	For the Six Months Ended May 31, 2020
					Additional								Total
	Common Stock				Paid-In		Treasury			Accumulated			Stockholders'
	Shares		Amount		Capital		Stock			Deficit			Deficit
Balance at November 30, 2019		13,598,909	$	135,989	$	35,918,827	$	(20,563,357	)	$	(22,444,310	)	$	(6,952,851	)
Common stock issued		34,729		347		40,653								41,000
Compensatory element of stock options						288,752								288,752
Net income											1,640,304			1,640,304
Balance at May 31, 2020		13,633,638	$	136,336	$	36,248,232	$	(20,563,357	)	$	(20,804,006	)	$	(4,982,795	)

	May 31, 2021		November 30, 2020
Contract assets (sales commissions)	$	499,628	$	466,141
Accounts receivables	$	5,215,556	$	6,322,960
Short-term contract liabilities (deferred revenue)	$	9,101,008	$	9,183,450
Long-term contract liabilities (deferred revenue)	$	29,126,311	$	27,200,910

	Balance at December 1, 2020		Additions		Deductions			Balance at May 31, 2021
Contract assets (sales commissions)	$	466,141	$	45,934	$	(12,447	)	$	499,628
Accounts receivables	$	6,322,960	$	18,178,409	$	(19,285,813	)	$	5,215,556
Contract liabilities (deferred revenue)	$	36,384,360	$	8,430,850	$	(6,587,891	)	$	38,227,319

	Balance at December 1, 2019		Additions		Deductions			Balance at May 31, 2020
Contract assets (sales commissions)	$	398,535	$	45,801	$	(10,461	)	$	433,875
Accounts receivables	$	6,097,331	$	17,585,653	$	(17,708,527	)	$	5,974,457
Contract liabilities (deferred revenue)	$	32,508,511	$	8,703,442	$	(7,059,853	)	$	34,152,100

	Fair Value at			Fair Value Measurements
	May 31,			at May 31, 2021 Using
Description	2021			Level 1		Level 2		Level 3
Assets:
Marketable securities	$	73,388		$	73,388		—		—
Total	$	73,388		$	73,388		—		—

Liabilities:
Contingent consideration	$	1,230,647		$	—		—	$	1,230,647
Total	$	1,230,647		$	—		—	$	1,230,647

Contingent Consideration:
Beginning Balance as of November 30, 2020	$	1,509,852
Subtractions – Cord:Use earnout		—
Fair value adjustment as of May 31, 2021		(279,205	)
Ending balance as of May 31, 2021	$	1,230,647

	For the three months ended May 31, 2021			For the three months ended May 31, 2020
Net revenue
Umbilical cord blood and cord tissue stem cell service	$	7,158,886		$	7,600,902
PrepaCyte®-CB		—			57,300
Public cord blood banking		46,309			213,642
Total net revenue	$	7,205,195		$	7,871,844

Cost of sales
Umbilical cord blood and cord tissue stem cell service	$	1,869,769		$	1,966,441
PrepaCyte®-CB		41,203			32,014
Public cord blood banking		311,699			482,088
Total cost of sales	$	2,222,671		$	2,480,543

Depreciation and amortization
Umbilical cord blood and cord tissue stem cell service	$	260,226		$	36,408
PrepaCyte®-CB		6,894			6,895
Public cord blood banking		302			—
Total depreciation and amortization	$	267,422		$	43,303

Operating income
Umbilical cord blood and cord tissue stem cell service	$	2,308,856		$	2,002,877
PrepaCyte®-CB		(48,097	)		17,984
Public cord blood banking		(265,691	)		(268,675	)
Total operating income	$	1,995,068		$	1,752,186

Interest expense
Umbilical cord blood and cord tissue stem cell service	$	341,390		$	365,371
PrepaCyte®-CB		—			—
Public cord blood banking		—			—
Total interest expense	$	341,390		$	365,371

	May 31, 2021			November 30, 2020
Raw materials	$	—		$	—
Work-in-process		195,030			273,430
Work-in-process – Public Bank		—			—
Finished goods		92,008			63,327
Finished goods – Public Bank		11,562,350			11,629,307
Collection kits		41,268			33,006
Inventory reserve		(7,718	)		(7,718	)
Total inventory	$	11,882,938		$	11,991,352

	For the six months ended May 31, 2021			For the six months ended May 31, 2020
Net revenue
Umbilical cord blood and cord tissue stem cell service	$	13,897,517		$	15,007,190
PrepaCyte®-CB		38,000			117,707
Public cord blood banking		130,295			367,721
Total net revenue	$	14,065,812		$	15,492,618

Cost of sales
Umbilical cord blood and cord tissue stem cell service	$	3,509,784		$	4,021,515
PrepaCyte®-CB		76,084			73,131
Public cord blood banking		649,000			889,041
Total cost of sales	$	4,234,868		$	4,983,687

Depreciation and amortization
Umbilical cord blood and cord tissue stem cell service	$	274,594		$	73,735
PrepaCyte®-CB		13,789			13,789
Public cord blood banking		302			—
Total depreciation and amortization	$	288,685		$	87,524

Operating income
Umbilical cord blood and cord tissue stem cell service	$	3,801,209		$	3,492,424
PrepaCyte®-CB		(51,873	)		30,379
Public cord blood banking		(519,007	)		(521,547	)
Total operating income	$	3,230,329		$	3,001,256

Interest expense
Umbilical cord blood and cord tissue stem cell service	$	621,609		$	730,670
PrepaCyte®-CB		—			—
Public cord blood banking		—			—
Total interest expense	$	621,609		$	730,670

	As of May 31, 2021		As of November 30, 2020
Assets
Umbilical cord blood and cord tissue stem cell service	$	46,465,499	$	34,215,780
PrepaCyte®-CB		283,830		302,683
Public cord blood banking		11,569,083		11,681,631
Total assets	$	58,318,412	$	46,200,094

	Useful lives	May 31, 2021			November 30, 2020
Patents and Domain Names	10-20 years		234,570			234,570
Less: Accumulated amortization			(52,961	)		(47,150	)
Patents - Acquired with Duke License Agreement	16 years		456,224			—
Less: Accumulated amortization			(7,129	)		—
License agreement	10 years		470,000			470,000
Less: Intangible asset impairment			(185,000	)		(185,000	)
Less: Accumulated amortization			(190,068	)		(178,443	)
Customer relationships-PrepaCyte CB	15 years		41,000			41,000
Less: Intangible asset impairment			(26,267	)		(26,267	)
Less: Accumulated amortization			(7,520	)		(7,122	)
Brand	1 year		31,000			31,000
Less: Accumulated amortization			(31,000	)		(31,000	)
Customer relationships-Cord:Use	30 years		960,000			960,000
Less: Accumulated amortization			(96,000	)		(80,000	)

Net Intangible Assets		$	1,596,849		$	1,181,588

	May 31, 2021			November 30, 2020
Note payable	$	3,458,433		$	6,008,433
Unamortized debt issuance costs		(32,147	)		(67,219	)
Net note payable	$	3,426,286		$	5,941,214

Current portion of note payable	$	3,100,000		$	3,100,000
Long-term note payable, net of debt issuance costs		326,286			2,841,214
Total	$	3,426,286		$	5,941,214

	For the three months ended May 31, 2021		For the six months ended May 31, 2021
Interest expense on notes payable	$	32,894	$	73,432
Debt issuance costs		15,390		35,072
Total interest expense	$	48,284	$	108,504

	Three Months Ended				Six Months Ended
	May 31, 2021		May 31, 2020		May 31, 2021		May 31, 2020
Numerator:
Net Income	$	1,170,629	$	953,338	$	1,864,219	$	1,640,304
Denominator:
Weighted-average shares outstanding-basic		7,956,301		7,545,613		7,765,724		7,543,376
Dilutive common shares issuable upon exercise of stock options		322,976		566,676		300,292		577,078
Weighted-average shares-diluted		8,279,277		8,112,289		8,066,016		8,120,454
Net income per common share:
Basic	$	0.15	$	0.13	$	0.24	$	0.22
Diluted	$	0.14	$	0.12	$	0.23	$	0.20

	Three Months Ended	Three Months Ended	Six Months Ended	Six Months Ended
	May 31, 2021	May 31, 2020	May 31, 2021	May 31, 2020
Weighted average values:
Expected dividends	0%	-	0%	0%
Expected volatility	49.85%	-	49.85%	64.25%
Risk free interest rate	1.35%	-	1.35%	1.90%
Expected life	6 years	-	6 years	9 years

				Weighted		Weighted Average
				Average		Remaining		Aggregate
	Shares			Exercise Price		Contractual Term (Years)		Intrinsic Value
Outstanding at November 30, 2020		1,174,943		$	3.72		3.42	$	4,502,324

Granted		20,000			9.50				—
Exercised		(489,668	)		2.18				3,058,530
Expired/forfeited		—			—				—

Outstanding at May 31, 2021		705,275		$	4.96		4.49	$	2,624,683
Exercisable at May 31, 2021		622,865		$	4.52		4.12	$	2,572,674

	Outstanding						Exercisable
			Weighted Average		Weighted				Weighted
			Remaining		Average				Average
Range of Exercise Prices	Outstanding		Contractual Life (Years)		Exercise Price		Outstanding		Exercise Price
$1.01 to $ 2.00		22,500		2.14	$	1.95		22,500	$	1.95
$2.01 to $ 3.00		180,632		0.73		2.73		180,632		2.73
$3.01 to $4.00		204,729		4.74		3.14		204,729		3.14
$6.01 to $7.00		3,833		5.10		6.52		3,388		6.51
$7.01 to $8.00		266,581		6.81		7.64		210,566		7.62
$9.01 to $10.00		27,000		6.70		9.40		1,050		9.10
		705,275		4.49	$	4.96		622,865	$	4.52

				Weighted Average
				Grant-Date
	Shares			Fair Value
Non-vested at November 30, 2020		93,380		$	4.65

Granted		20,000			4.56
Vested		(30,970	)		4.96
Forfeited		—			—
Non-vested at May 31, 2021		82,410		$	4.51

	Processing and Storage Royalties
	Three Months Ended May 31, 2021		Six Months Ended May 31, 2021
License and royalty income	$	—	$	—

Total	$	—	$	—

	Three Months Ended May 31, 2020		Six Months Ended May 31, 2020
License and royalty income	$	201,828	$	201,828

Total	$	201,828	$	201,828

	Future Operating
Fiscal Year Ending November 30,	Lease Payments
2021 (remaining 6 months)	$	165,090
2022		339,182
2023		313,996
2024		295,086
2025		24,590
Less: Imputed interest		(67,310	)
Present value of lease liabilities	$	1,070,634

	May 31, 2021
Lease Term and Discount Rate
Remaining lease term (years)
Operating lease		3.6
Discount rate (percentage)
Operating lease		3.5	%

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
March 1 – 31, 2021		—		—		—		1,906,465
April 1 – 30, 2021		—		—		—		1,906,465
May 1 – 31, 2021		—		—		—		1,906,465

31.1		Certification of Co-CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Co-CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.3		Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)


		Cryo-Cell International, Inc.

		/s/ David Portnoy
		David Portnoy
		Co-Chief Executive Officer

		Cryo-Cell International, Inc.

		/s/ Mark Portnoy
		Mark Portnoy
		Co-Chief Executive Officer

		Cryo-Cell International, Inc.

		/s/ Jill M. Taymans
		Jill M. Taymans
		Vice President, Finance, Chief Financial Officer