Cryo-Cell International(CCEL) - 2025 Q1 - Quarterly Report

Cord Blood and Tissue Services - The company currently stores over 240,000 cord blood and cord tissue specimens, having been the first private cord blood bank to separate and store stem cells in 1992[136]. - The company introduced its cord tissue service in 2011, which stores a section of the umbilical cord tissue, expanding its service offerings[137]. - The company has a 100% viability rate of its specimens upon thaw for therapeutic use since inception[151]. - The company charges an annual fee for storage after the first year, with options for 18-year and lifetime pre-paid storage plans[149]. - The company offers a payment warranty of up to $100,000 for clients if the umbilical cord blood product fails to engraft for a stem cell transplant[151]. Financial Performance - Revenue for the three months ended February 28, 2025 was$7,968,880, an increase of 2% compared to $7,852,235 for the same period in 2024[164]. - Processing and storage fees for the three months ended February 28, 2025 were$7,865,888, reflecting a 4% increase in recurring annual storage fee revenue, despite a 12% decrease in new domestic cord blood specimens processed[165]. - Product revenue for the three months ended February 28, 2025 was $20,913, significantly up from$3,000 in the same period in 2024[166]. - Cost of sales decreased by 4% to $1,984,588 for the three months ended February 28, 2025, compared to$2,066,371 for the same period in 2024[167]. - Selling, general and administrative expenses increased by 5% to $4,638,285 for the three months ended February 28, 2025, compared to$4,428,566 in 2024[168]. - Research, development, and related engineering expenses dropped to $98,143 for the three months ended February 28, 2025, down from$502,889 in the same period in 2024[169]. - Interest expense increased to $494,962 for the three months ended February 28, 2025, compared to$256,459 in the same period in 2024[171]. - Cash and cash equivalents decreased to $223,122 as of February 28, 2025, down from$560,960 at November 30, 2024[178]. Duke License Agreement Dispute - The company recorded an impairment charge of $13,108,064 during the fourth quarter of fiscal 2023 related to the Duke License Agreement[141]. - The Company anticipates needing over$50 million over the next 5 years to fund activities related to the Duke License Agreement[180]. - The Company has filed an Arbitration Demand against Duke, alleging damages exceeding $100 million due to fraudulent inducement and breaches of the License Agreement[181]. - Duke has responded with counterclaims for breach of the License Agreement, seeking unspecified damages[182]. - The Company is unable to predict funding needs related to the Duke License Agreement until the dispute is resolved, pausing investments except for a comparability study costing less than$350,000[183]. - Previously, the Company estimated needing over $50 million over the next 5 years for activities related to the Duke License Agreement, but this is now uncertain due to the ongoing arbitration[184]. - If required to continue investing in the Duke License Agreement, the Company plans to use cash-on-hand, future cash flows, a revolving line of credit, and potential debt or equity financing[184]. Research and Development - The company has expanded its research and development activities to include technologies related to stem cells harvested from sources beyond umbilical cord blood[137]. - The company believes that the market for cord blood stem cell preservation is enhanced by global discussions on stem cell research and the focus on reducing healthcare costs[148]. - The company anticipates opening the Cryo-Cell Institute for Cellular Therapies in the fourth quarter of fiscal 2024, although this is currently on hold due to the Duke dispute[139][140]. Market Competition - The company has faced challenges with competition from public cord blood banks, particularly in overseas markets[134].