Cryo-Cell International(US:CCEL)2023-04-20 16:00Storage and Services - The company currently stores over 500,000 cord blood and cord tissue specimens, benefiting newborns and their families [221]. - The company completed the purchase of a 56,000 square foot facility in Durham, North Carolina, which will enhance its storage capabilities and offer third-party services [215]. - The company introduced a new cord tissue service in 2011, which stores a section of the umbilical cord tissue, complementing its existing cord blood service [205]. - The company plans to open the Cryo-Cell Institute for Cellular Therapies and begin patient infusions during fiscal 2024 [223]. - The company anticipates expanding its cryopreservation and cold storage business through the ExtraVault service, targeting biopharmaceutical companies and healthcare institutions [231]. - The company has definitive license agreements to market its umbilical cord blood stem cell programs in several Central American countries [234]. - The company entered into a License and Royalty Agreement with LifeCell to market its umbilical cord blood and menstrual stem cell programs in India, indicating a strategy for market expansion [152]. - The company plans to expand into three core business units: cord blood bank services, cord blood and tissue infusion clinic services, and biopharmaceutical manufacturing, contingent on FDA approvals [200]. Financial Performance - Revenue for the three months ended February 28, 2023, was $7,824,415, a 7.8% increase from $7,258,531 in the same period of 2022, driven by a 6% increase in processing and storage fees [236]. - Product revenue for the same period was $32,200, up from $18,200 in 2022, indicating a significant growth in product sales [238]. - Cost of sales decreased by 2% to $2,067,364 for the three months ended February 28, 2023, compared to $2,103,202 in 2022, attributed to a reduction in the number of new domestic cord blood specimens processed [239]. - Research, development, and related engineering expenses were $78,834 for the three months ended February 28, 2023, down from $147,220 in the prior year, reflecting a focus on cost management [240]. - U.S. income tax expense increased to $447,715 for the three months ended February 28, 2023, compared to $323,647 in the same period of 2022 [242]. Stock and Compensation - The company repurchased 57,281 shares at an average price of $4.25 per share during the three months ended February 28, 2023, totaling approximately $243,000 [155]. - The fair value of stock options granted during the three months ended February 28, 2023, was calculated at $2.79 per option, with 113,000 options granted [150][163]. - As of February 28, 2023, the company had 121,643 non-vested options, with a fair value of $3.24 per option, and a total of approximately $316,000 in unrecognized compensation cost related to non-vested share-based compensation arrangements [166]. - The company recognized approximately $15,000 in compensation cost for market-based vesting condition options as of February 28, 2023, with $117,000 of unrecognized compensation cost remaining to be recognized over 1.36 years [169]. Agreements and Obligations - The company has entered into a Patent and Technology License Agreement with Duke University to explore treatments for conditions with limited FDA-approved therapies [222]. - The company is required to pay Duke a total license fee of $12,000,000, of which $10,000,000 has been paid, with an additional $2,000,000 due on February 23, 2023 [180]. - The company recorded $240,193 in amortization expense related to the Duke Agreement for both the three months ended February 28, 2023 and 2022 [183]. - The Company entered into a Second Amendment to the License Agreement with Duke, which includes a final payment of $2,000,000 due on February 23, 2023, and new milestone payments upon FDA approval of the first licensed product for autism spectrum disorder [197]. - The Company will make 14 equal monthly payments of $187,407 starting in March 2023, totaling approximately $2,600,000 for the completion of the Duke IMPACT Study, with a final payment of $187,400 due by September 30, 2024 [197]. - The minimum annual royalties payable to Duke have been amended, with Year 3 set at $500,000, Year 4 at $1,000,000, Year 5 at $2,500,000, and Year 6 and thereafter at $5,000,000 [199]. Assets and Liabilities - The company has a revolving line of credit with a balance of $1,772,728 as of February 28, 2023, which is part of a larger credit agreement totaling $10,000,000 [247][245]. - The company anticipates that its cash and cash equivalents, along with marketable securities and cash flows from operations, will be sufficient to fund its known cash needs for at least the next 12 months [248]. - The company’s operating lease right-of-use asset decreased from $606,034 as of November 30, 2022, to $526,710 as of February 28, 2023 [175]. - The company’s total lease liability decreased from $610,989 as of November 30, 2022, to $530,941 as of February 28, 2023 [175]. - The company repurchased 139,626 shares of its common stock at an average price of $3.37 per share subsequent to February 28, 2023 [174].