Cryo-Cell International(CCEL) - 2024 Q3 - Quarterly Report

Financial Performance - Revenue for the nine months ended August 31, 2024 was $23,961,761, a 2.1% increase from $23,466,980 in the same period in 2023[138]. - Processing and storage fee revenue increased by 3%, while there was a 4% decrease in the number of new domestic cord blood specimens processed[139]. - Public cord blood banking revenue for the nine months ended August 31, 2024 was $205,799, down from $398,896 in the same period in 2023, reflecting customer demand volatility[139]. - Revenue for the three months ended August 31, 2024 was $8,066,715, a 3% increase from $7,869,875 in the same period in 2023[147]. - Public cord blood banking revenue for the three months ended August 31, 2024 was $120,609, significantly up from $4,383 in the same period in 2023, indicating a recovery in customer demand[148]. Expenses and Financial Metrics - Selling, general and administrative expenses increased by 7% to $12,510,787 for the nine months ended August 31, 2024, compared to $11,722,435 in 2023[141]. - Research and development expenses rose to $937,907 for the nine months ended August 31, 2024, up from $727,648 in 2023, with significant funding for clinical studies[141]. - Selling, general and administrative expenses for the three months ended August 31, 2024, increased by 9% to $4,149,785 compared to $3,804,564 in the same period of 2023[150]. - Research, development, and related engineering expenses decreased to $193,933 for the three months ended August 31, 2024, down from $344,132 in 2023[150]. - Interest expense decreased to $1,119,196 for the nine months ended August 31, 2024, down from $1,405,825 in the same period in 2023[145]. - Interest expense rose to $533,464 for the three months ended August 31, 2024, compared to $469,642 in the same period of 2023[153]. - Gains on marketable securities significantly increased to $522,458 for the three months ended August 31, 2024, from $93,386 in 2023[153]. - Cash and cash equivalents decreased to $197,437 as of August 31, 2024, down from $406,067 at November 30, 2023[159]. - Net cash from operating activities for the nine months ended August 31, 2024, was $3,853,917, compared to $5,575,440 in the same period of 2023[159]. - The balance of the revolving line of credit as of August 31, 2024, was $2,222,728[160]. Legal and Regulatory Matters - During fiscal 2023, the company recorded an impairment charge of $13,108,064 related to the Duke License Agreement[117]. - The company has paused investments related to the Duke License Agreement until arbitration claims are resolved, with only a comparability study costing less than $350,000 planned[117]. - The proposed spinoff of Celle Corp. is on hold and may not occur depending on the outcome of the Duke dispute[117]. - The company filed a demand for arbitration against Duke, alleging damages exceeding $100 million[162]. - The company does not anticipate making further investments in activities related to the Duke License Agreement until arbitration claims are resolved[163]. - The company anticipates needing over $50 million over the next 5 years for activities related to the Duke License Agreement, but current arbitration claims may affect this[161][165]. Business Operations and Strategy - The company currently stores over 235,000 cord blood and cord tissue specimens for newborns and their families[115]. - The anticipated opening of the Cryo-Cell Institute for Cellular Therapies has been postponed to the fourth quarter of fiscal 2024[116]. - The company aims to maximize growth potential through superior quality, value-driven competitive leadership, and increased public awareness[123]. - The company believes that the market for cord blood stem cell preservation is enhanced by global discussions on stem cell research and reducing healthcare costs[124]. - The company operates from a nearly 18,000 square-foot cGMP/cGTP-compliant facility designed for security and operational redundancies[126]. - The company has expanded its R&D activities to develop technologies related to stem cells harvested from sources beyond umbilical cord blood[115]. - The Company completed the purchase of a 56,000 square foot facility in Durham, North Carolina, to expand its cryopreservation and cold storage business[130]. - The new facility is expected to introduce the ExtraVault service, providing cold storage solutions to biopharmaceutical companies and healthcare institutions[131].