Cryo-Cell International(CCEL) - 2021 Q4 - Annual Report

Financial Performance - For the fiscal year ended November 30, 2021, the Company reported total revenue of $28,884,902, a decrease of 7% compared to $31,147,593 for the fiscal year ended November 30, 2020[99]. - The Company experienced a net income of $2,083,521, or $0.26 per basic common share, down from $3,624,596, or $0.48 per basic common share in fiscal 2020, primarily due to the 7% decrease in revenues[93]. - Cost of sales decreased by 7% to $8,989,736 for the fiscal year ended November 30, 2021, compared to $9,657,442 in fiscal 2020[106]. - Selling, general and administrative expenses increased by 2% to $14,625,311 for the fiscal year ended November 30, 2021, compared to $14,294,233 in fiscal 2020[107]. - Licensee income dropped to $0 in fiscal 2021 from $629,702 in fiscal 2020, due to the expiration of the royalty income from India[102]. - The impairment charge for public inventory was $1,164,499 for the fiscal year ended November 30, 2021, compared to $1,284,238 in fiscal 2020[110]. - U.S. income tax expense for the twelve months ended November 30, 2021 was $527,710, a decrease of 60.9% compared to $1,346,625 for the same period in 2020[113]. Cash Flow and Investments - Cash and cash equivalents decreased to $8,263,088 at November 30, 2021 from $10,361,125 at November 30, 2020, primarily due to net cash provided by operating activities of $7,926,094 in fiscal 2021[122]. - Net cash used in investing activities for fiscal 2021 was $6,951,171, including $1,510,150 for real estate purchases and $5,106,224 for a Patent Option and Technology License Agreement with Duke[122]. - The Company anticipates discretionary capital expenditures of approximately $14,000,000 over the next twelve months for software enhancements and property purchases[126]. - Net cash used in financing activities in fiscal 2021 was $3,072,960, primarily for repayments of notes payable[122]. - The Company anticipates funding future property and equipment purchases with cash-on-hand and cash flows from future operations[127]. - The Company does not have a line of credit, which may impact its financing options[125]. Business Strategy and Expansion - The Company plans to expand its business units to include biopharmaceutical manufacturing and infusion clinic services, with the Cryo-Cell Institute for Cellular Therapies projected to open in Q4 2022[91]. - The Company is exploring strategic options, including potential mergers or acquisitions, to maximize shareholder value[98]. Inventory and Accounts Receivable - As of November 30, 2021, the Company had approximately 6,000 cord blood units in inventory, with an impairment charge of $1,164,499 recognized in Q4 fiscal 2021 to reduce inventory from cost to net realizable value[148]. - Accounts receivable consist of uncollateralized amounts due from clients and license affiliates, with amounts outstanding longer than 30 days considered past due[145]. - If the financial condition of the Company's clients deteriorates, it may need to increase the allowance for doubtful accounts, negatively impacting earnings[145]. 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 each in India, Nicaragua, and Costa Rica[143]. - The Company earns royalties on processing and storage fees from licensees, which are included in processing and storage fees revenue on the consolidated statements of comprehensive income[144]. - Revenue Sharing Agreements (RSAs) allow parties to receive a percentage of future storage revenues, with non-refundable up-front fees recognized as long-term liabilities[150]. - The Company processes and stores specimens from licensees in multiple countries, including El Salvador, Guatemala, Ecuador, and others, impacting ongoing license income[144]. Legal and Contingent Liabilities - The Company incurs legal costs for patent and trademark applications, which are capitalized and amortized over the expected life of the patent or trademark[149]. - The Company has a contingent consideration liability related to the earnout from the sale of public cord blood inventory, with its fair value determined using a Monte Carlo analysis[151]. - The Company has no off-balance sheet arrangements that materially affect its financial condition or results of operations[154].