Cryo-Cell International(CCEL) - 2024 Q4 - Annual Report

Financial Performance - For the fiscal year ended November 30, 2024, the Company reported revenue of $31,986,106, a 2$31,343,695 in the previous year[174]. - Processing and storage fees increased to $31,551,550, reflecting a 4$366,672, down from $481,148 in the previous year[177]. - Interest expense for the fiscal year ended November 30, 2024, was$1,864,684, an increase from $1,236,794 in fiscal 2023[187]. - 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[189]. - Net cash provided by operating activities in fiscal 2024 was$6,010,910, down from $8,919,754 in fiscal 2023[198]. - The Company recorded a gain of$105,887 on the change in the fair value of a derivative for the fiscal year ended November 30, 2024[188]. Expenses - Cost of sales decreased by 5% to $7,947,752, attributed to reduced processing of new domestic cord blood specimens[178]. - Selling, general and administrative expenses rose by 8$18,521,218, primarily due to increased selling and marketing expenses and personnel costs[179]. - Research, development, and related engineering expenses increased to $1,242,536, with$324,435 allocated to the Clinical Study and Research Agreement with Duke University[180]. Impairment and Legal Matters - The Company recorded an impairment charge of $13,108,064 for the Duke License Agreement in the fourth quarter of fiscal 2023[171]. - The Company filed a demand for arbitration against Duke, alleging damages exceeding$100 million[197]. - As of November 30, 2024, the Company had approximately 6,000 cord blood units in inventory, with an impairment charge of $3,737,133 recognized during the fourth quarter of 2023[220]. Business Operations and Future Plans - The Company plans to expand its business into biopharmaceutical manufacturing and operating clinics, contingent on the resolution of the Duke Dispute[169]. - The proposed spinoff of Celle Corp. is currently on hold pending the outcome of the Duke Dispute[170]. - The Company has stored over 240,000 cord blood and cord tissue specimens, maintaining its position as a leading private cord blood bank since its founding in 1989[167]. Cash Flow and Financing - Net cash used in investing activities in fiscal 2024 was$4,876,899, primarily due to $2,403,708 for equipment purchases and$1,200,000 related to the Duke License Agreement[198]. - The Company had cash and cash equivalents of $560,960 as of November 30, 2024, compared to$406,067 at November 30, 2023[194]. - The balance of the revolving line of credit as of November 30, 2024, was $3,520,000[195]. - The Company anticipates needing over$50 million over the next 5 years for activities related to the Duke License Agreement, but current funding needs are uncertain due to ongoing arbitration[196][200]. Stock and Compensation - The Company has three stock-based employee compensation plans, with expenses recognized based on fair value and vesting conditions[210]. - The Company has adopted the 2022 Equity Incentive Plan, reserving 1,500,000 shares for stock options and other stock awards[215]. Licensing and Revenue Sharing - The Company has entered into licensing agreements in various international markets, including one agreement each in El Salvador, Guatemala, Panama, Honduras, and Pakistan, and two agreements in India, Nicaragua, and Costa Rica[216]. - The Company earns royalties on processing and storage fees from licensees, which are included in processing and storage fees revenue[218]. - The Company recognizes non-refundable fees from Revenue Sharing Agreements as a long-term liability, with cash flows fluctuating from period to period[222]. - Accounts receivable are due within 30 days and are stated net of an allowance for doubtful accounts, which may increase if clients' financial conditions deteriorate[219]. Contingent Consideration - The estimated fair value of contingent consideration from the sale of public cord blood inventory is determined using a Monte Carlo analysis[224]. - The Company did not note any impairment for long-lived assets for the twelve months ended November 30, 2024, and November 30, 2023[208]. - The Company capitalized $409,307 and$683,524 of interest related to the construction of its new facility in North Carolina during fiscal 2024 and 2023, respectively[187].