FLORHAM PARK, N.J., Jan. 18, 2024 (GLOBE NEWSWIRE) -- Celularity Inc. (NASDAQ:CELU) has posted a Letter to Shareholders from Robert J. Hariri, M.D., Ph.D., Chairman, CEO, and Founder, which is included below and can also be accessed here. Dear Shareholders, I would like to wish everyone belated greetings for the new year as I take a moment and share some personal thoughts for the year ahead. Celularity as you know is a novel combination of two commercial-stage, revenue-producing businesses — one manufacturi ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) The financial statements for the period ending September 30, 2023, reveal significant financial distress, marked by asset reduction, net losses, and going concern doubts [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2023, total assets decreased to $157.2 million, driven by goodwill and intangible asset impairments, reducing equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $273 | $13,966 | | Goodwill | $7,347 | $119,694 | | Intangible assets, net | $11,554 | $120,994 | | **Total Assets** | **$157,192** | **$401,066** | | **Liabilities** | | | | Total current liabilities | $84,632 | $62,088 | | Acquisition-related contingent consideration | $1,606 | $105,945 | | **Total Liabilities** | **$126,945** | **$202,165** | | **Total Stockholders' Equity** | **$30,247** | **$198,901** | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) For Q3 2023, the company reported a **net loss of $93.9 million**, primarily due to an $82.7 million goodwill impairment, contrasting with a $4.8 million net income in Q3 2022 Q3 2023 vs Q3 2022 Statement of Operations (in thousands) | Metric | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | Total Revenues | $3,786 | $4,135 | | Loss from Operations | $(99,256) | $(5,646) | | Goodwill Impairment | $82,714 | $0 | | **Net (Loss) Income** | **$(93,876)** | **$4,799** | | Net (Loss) Income per Share | $(0.50) | $0.03 | Nine Months 2023 vs 2022 Statement of Operations (in thousands) | Metric | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | | Total Revenues | $10,659 | $13,846 | | Loss from Operations | $(205,602) | $(43,085) | | Goodwill Impairment | $112,347 | $0 | | IPR&D Impairment | $107,800 | $0 | | **Net Loss** | **$(205,842)** | **$(10,242)** | | Net Loss per Share | $(1.19) | $(0.07) | [Condensed Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity significantly decreased from $198.9 million at year-end 2022 to $30.2 million by September 30, 2023, primarily due to the accumulated net loss - Total stockholders' equity fell from **$198.9 million** at December 31, 2022, to **$30.2 million** at September 30, 2023, mainly due to the accumulated net loss for the period[41](index=41&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2023, net cash used in operating activities was $34.3 million, with financing activities providing $24.1 million, resulting in a net decrease in cash Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(34,344) | $(108,291) | | Net cash used in investing activities | $(3,468) | $(4,457) | | Net cash provided by financing activities | $24,108 | $118,153 | | **Net (decrease) increase in cash** | **$(13,704)** | **$5,405** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes highlight substantial doubt about the company's going concern ability due to recurring losses, low cash, debt defaults, and significant impairment charges from discontinued clinical programs - The company has raised substantial doubt about its ability to continue as a going concern due to significant losses, low cash reserves, debt defaults, and the need to secure additional capital[26](index=26&type=chunk)[56](index=56&type=chunk) - The company has ceased recruitment in its major clinical trials for CYNK-001 and terminated the development of CYCART-19, leading to significant impairment charges[20](index=20&type=chunk)[46](index=46&type=chunk) - The company is in default on its debt agreements, including failure to make required payments to Yorkville and breaching the minimum liquidity covenant on loans with RWI and C.V. Starr[25](index=25&type=chunk)[59](index=59&type=chunk) - A dispute with Palantir Technologies over a software agreement led to the company ceasing use of the platform and recognizing a **$24.2 million** liability for remaining contract payments[146](index=146&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strategic reprioritization, including workforce reduction and halting clinical programs, to focus on biomaterials, while highlighting a severe liquidity crisis and substantial doubt about going concern - The company has reprioritized its efforts, resulting in a **one-third reduction of its workforce** and a halt to active recruitment in its clinical programs to focus on biomaterials and contract manufacturing[334](index=334&type=chunk) - Management explicitly states that adverse conditions, including significant losses, low cash, and debt defaults, raise substantial doubt about the company's ability to continue as a going concern[353](index=353&type=chunk)[377](index=377&type=chunk) - The company recognized a goodwill impairment charge of **$82.7 million** for Q3 2023 and a total of **$112.3 million** for the nine months ended Sep 30, 2023, in its Cell Therapy reporting unit[325](index=325&type=chunk) - An IPR&D impairment charge of **$107.8 million** was recorded during the nine months ended September 30, 2023, due to the discontinuation of Cell Therapy clinical trials[325](index=325&type=chunk) [Results of Operations](index=50&type=section&id=Results%20of%20Operations) For Q3 2023, total revenues decreased by 8.4% to $3.8 million, and the loss from operations dramatically widened to $99.3 million, primarily due to an $82.7 million goodwill impairment Comparison of Three Months Ended September 30 (in thousands) | Line Item | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $3,786 | $4,135 | (8.4%) | | Research and development | $5,182 | $20,351 | (74.5%) | | Selling, general and administrative | $10,748 | $14,907 | (27.9%) | | Goodwill impairment | $82,714 | $0 | 100.0% | | **Loss from operations** | **$(99,256)** | **$(5,646)** | **1658.0%** | Comparison of Nine Months Ended September 30 (in thousands) | Line Item | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $10,659 | $13,846 | (23.0%) | | Research and development | $30,737 | $67,373 | (54.4%) | | Software cease-use costs | $24,161 | $0 | 100.0% | | Goodwill impairment | $112,347 | $0 | 100.0% | | IPR&D impairment | $107,800 | $0 | 100.0% | | **Loss from operations** | **$(205,602)** | **$(43,085)** | **377.2%** | [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces a critical liquidity position with only $0.3 million in cash, an accumulated deficit of $851.3 million, and insufficient capital to fund operations for the next 12 months - As of the issuance date, the company had only **$0.3 million** of unrestricted cash and cash equivalents and insufficient capital to sustain operations for the next 12 months[403](index=403&type=chunk) - The company expects to finance its cash needs through equity offerings, debt financings, or other capital sources, but failure to do so may force it to curtail operations or seek bankruptcy protection[427](index=427&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is noted as not applicable for the company - The company states that this item is not applicable[412](index=412&type=chunk) [Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of September 30, 2023, due to multiple material weaknesses in internal control over financial reporting - Management concluded that disclosure controls and procedures were not effective as of September 30, 2023[413](index=413&type=chunk) - Multiple material weaknesses were identified across all five components of internal control: Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring[435](index=435&type=chunk)[436](index=436&type=chunk) - A key reason for the weaknesses was insufficient resources with the appropriate knowledge and expertise to design and operate effective internal controls[414](index=414&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in arbitration with Palantir, a lawsuit against Evolution Biologyx for unpaid invoices, and a Civil Investigative Demand regarding federal insurance claims for its Interfyl product - The company is in arbitration with Palantir Technologies over a disputed Master Service Agreement, with Palantir seeking damages equal to the full contract value[454](index=454&type=chunk) - Celularity has sued Evolution Biologyx, LLC to recover approximately **$2.35 million** in unpaid invoices for biomaterial products[421](index=421&type=chunk) - The company received a Civil Investigative Demand under the False Claims Act related to federal insurance claims for its Interfyl product[442](index=442&type=chunk) [Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) The company's operations and financial results are subject to various risks and uncertainties, as described in its Annual Report on Form 10-K - The report refers to the Risk Factors section of the company's Annual Report on Form 10-K for the year ended December 31, 2022[456](index=456&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section is noted as 'None' - The company reported no unregistered sales of equity securities during the period[444](index=444&type=chunk) [Defaults Upon Senior Securities](index=57&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section is noted as 'None', although debt defaults are extensively discussed elsewhere in the report - The company reports 'None' under this item, though defaults on debt agreements are detailed elsewhere in the report, such as in Note 1 and Note 7 of the financial statements[25](index=25&type=chunk)[59](index=59&type=chunk)[457](index=457&type=chunk) [Mine Safety Disclosures](index=57&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is noted as not applicable - The company states that this item is not applicable[445](index=445&type=chunk) [Other Information](index=57&type=section&id=Item%205.%20Other%20Information) This section is noted as 'None' - The company reported no other information under this item[446](index=446&type=chunk) [Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the quarterly report, including corporate governance documents, various financing agreements, and certifications - Exhibits filed include various loan agreements, securities purchase agreements, and amendments to warrants, reflecting the company's recent financing activities[461](index=461&type=chunk)

The Company accounted for the March 2023 PIPE Warrants and common stock as a single non-arm's length transaction. The Company applied the guidance for this transaction in accordance with ASU 2020-06, (Subtopic 470-20): Debt - Debt with Conversion and Other Options, ASC 815 Derivatives and Hedging, and ASC 480 Distinguishing Liabilities from Equity. Accordingly, the net proceeds were allocated between common stock and the March 2023 PIPE warrants at their respective fair value, which resulted in a net premiu ...

The Company's cash equivalents consisted of a money market funds. The money market fund was valued using inputs observable in active markets for similar securities, which represents a Level 1 measurement in the fair value hierarchy. The carrying values of accounts receivable, accounts payable, deferred revenue and other current liabilities approximate fair value in the accompanying condensed consolidated financial statements due to the short-term nature of those instruments. The Company believes that the ca ...

Our research and development and manufacturing activities involve the controlled use of potentially hazardous substances, including chemical and biological materials. We are subject to federal, state and local laws and regulations in the United States governing the use, manufacture, storage, handling and disposal of medical and hazardous materials. Although we believe our procedures, as well as the procedures of our third party suppliers for using, handling, storing and disposing of these materials comply w ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-38914 Celularity Inc. (Exact name of registrant as specified in its charter) Delaware 83-1702591 (State or other jurisdic ...

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The company presents unaudited financial statements for H1 2022, reporting a $15.0 million net loss and expressing substantial doubt about its ability to continue as a going concern Condensed Consolidated Balance Sheet Data (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $37,996 | $37,240 | | Total current assets | $75,453 | $59,100 | | Total assets | $429,337 | $414,128 | | Total current liabilities | $32,939 | $26,225 | | Total liabilities | $279,187 | $314,710 | | Total stockholders' equity | $150,150 | $99,418 | Condensed Consolidated Statements of Operations Data (in thousands) | Account | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Total revenues | $9,711 | $5,857 | | Research and development | $47,022 | $39,901 | | Selling, general and administrative | $32,034 | $36,489 | | Income (loss) from operations | ($37,439) | ($105,006) | | Net income (loss) | ($15,041) | ($146,016) | Condensed Consolidated Statements of Cash Flows Data (in thousands) | Account | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($70,571) | ($43,280) | | Net cash used in investing activities | ($2,894) | ($2,487) | | Net cash provided by (used in) financing activities | $74,214 | ($827) | | Net increase (decrease) in cash | $749 | ($46,594) | - The company has concluded that there is substantial doubt about its ability to continue as a going concern, as it expects its cash and cash equivalents as of June 30, 2022, will only fund operations into the fourth quarter of 2022[45](index=45&type=chunk)[46](index=46&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's biotechnology business, accounting policies, segment reporting, and key equity transactions including a $30 million PIPE financing - Celularity is a clinical-stage biotechnology company developing off-the-shelf placental-derived allogeneic cell therapies Its key programs include CYCART-19, CYNK-001, CYNK-101, APPL-001, and PDA-002, targeting cancer, infectious, and degenerative diseases[34](index=34&type=chunk)[35](index=35&type=chunk) - On January 1, 2022, the company adopted the new lease accounting standard (ASU 2016-02), resulting in the initial recording of Right-of-Use (ROU) assets of **$15.7 million** and lease liabilities of **$30.5 million**[71](index=71&type=chunk)[113](index=113&type=chunk) - In May 2022, the company completed a PIPE financing, raising approximately **$30 million** in gross proceeds through the sale of 4,054,055 shares of Class A Common Stock and accompanying warrants[136](index=136&type=chunk) - The company operates in three segments: Cell Therapy (R&D), Degenerative Disease (product sales like Biovance and Interfyl), and BioBanking (stem cell storage)[63](index=63&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) - On July 14, 2022, the company's President, Andrew L Pecora, M.D., notified the board of his decision to resign, effective August 31, 2022[192](index=192&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, noting increased revenues and a narrowed net loss for H1 2022, while reiterating the going concern issue due to insufficient cash Comparison of Results for the Six Months Ended June 30 (in thousands) | Account | 2022 | 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $9,711 | $5,857 | $3,854 | 65.8% | | Research and development | $47,022 | $39,901 | $7,121 | 17.8% | | Selling, general and administrative | $32,034 | $36,489 | ($4,455) | (12.2)% | | Change in fair value of contingent consideration | ($40,198) | $30,704 | ($70,902) | (230.9)% | | Loss from operations | ($37,439) | ($105,006) | $67,567 | (64.3)% | - The increase in total revenues for the six months ended June 30, 2022, was primarily driven by a **$4.1 million** increase in license, royalty, and other revenues from increased product sales to distribution partners[237](index=237&type=chunk) - R&D expenses increased by **$7.1 million (17.8%)** in the first six months of 2022 compared to 2021, driven by Palantir platform fees, higher personnel costs, and lab supplies to support cell therapy process development[240](index=240&type=chunk) - The company's cash and cash equivalents of **$38.0 million** as of June 30, 2022, are not sufficient to fund operations for the next 12 months, leading to substantial doubt about its ability to continue as a going concern[203](index=203&type=chunk)[245](index=245&type=chunk) - Net cash from financing activities was **$74.2 million** for the first six months of 2022, primarily from **$46.5 million** in warrant exercises and **$27.5 million** from the May 2022 PIPE financing[252](index=252&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that this item is not applicable - This section is not applicable for the registrant[259](index=259&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of June 30, 2022, due to material weaknesses, and is implementing a remediation plan - Management concluded that disclosure controls and procedures were not effective as of the end of the period covered by this report[260](index=260&type=chunk) - The ineffectiveness is due to previously identified material weaknesses in internal control over financial reporting, including: - Insufficient internal resources with appropriate accounting expertise (Control Environment) - Incorrect assumptions in the calculation of contingent consideration liability - Errors in the calculation of deferred tax assets and liabilities - Incorrect assumptions in the calculation of warrant liabilities[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk) - The company is implementing a remediation plan that includes hiring more accounting staff, formalizing controls, and engaging an outside firm to assist with documenting and implementing the internal control environment[263](index=263&type=chunk)[268](index=268&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not party to any legal proceedings that would be reasonably expected to have a material adverse effect on its business - The company states that it is not currently party to any claim or litigation that is expected to have a material adverse effect on its business[272](index=272&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) The company states that this item is not applicable - This section is not applicable for the registrant[273](index=273&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities or use of proceeds for this period - None reported[275](index=275&type=chunk) [Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None reported[277](index=277&type=chunk) [Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company states that this item is not applicable - This section is not applicable for the registrant[278](index=278&type=chunk) [Other Information](index=48&type=section&id=Item%205.%20Other%20Information) The company reports no other information - None reported[280](index=280&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the quarterly report, including the Certificate of Incorporation, Bylaws, various agreements related to a securities purchase, and officer certifications

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-38914 Celularity Inc. (Exact name of registrant as specified in its charter) Delaware 83-1702591 (State or other jurisdiction o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38914 Celularity Inc. (Exact name of registrant as specified in its charter) Delaware 83-1702591 (State or other jurisdiction of inco ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 001-38914 Celularity Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 83-1702591 (State or other jurisdicti ...