Cryo-Cell International(CCEL) - 2023 Q4 - Annual Report

Facility and Service Expansion - The company completed the purchase of a 56,000 square foot facility in Durham, North Carolina, to support internal storage needs and offer cold storage services to third-party pharmaceutical companies [26]. - The company introduced an advanced new cord tissue service in August 2011, which stores a section of umbilical cord tissue, enhancing its service offerings [24]. - The company has expanded its research and development activities to include technologies related to stem cells harvested from sources beyond umbilical cord blood [18]. - The Company acquired substantially all assets of Cord:Use, enhancing its public cord blood inventory, which is stored in North Carolina and distributed globally through the National Marrow Donor Program [43]. Marketing and Sales - The company has a national sales force to increase marketing activities with clinical referral sources, including physicians, midwives, and hospitals [29]. - During fiscal 2023, new expectant parent referrals were driven by physicians, midwives, and client-to-client referrals, indicating high customer satisfaction [46]. - The Company continues to promote its services through internet marketing and updates its website to provide resources for expectant parents [47][48]. Financial Performance - Total revenue for the year ended November 30, 2023, was $31,343,695, an increase of 3.3% from $30,336,749 in 2022 [426]. - Processing and storage fees contributed $30,796,091 to total revenue, up from $29,771,123, reflecting a growth of 3.4% [426]. - The company reported a net loss of $9,521,669 for the year, compared to a net income of $2,771,408 in the previous year, indicating a significant decline [426]. - Total current assets decreased to $9,452,837 from $9,610,185, a reduction of 1.6% [424]. - Total liabilities increased to $72,252,002, up from $66,412,356, representing an increase of 8.3% [424]. - Cash and cash equivalents decreased significantly to $406,067 from $1,703,958, a decline of 76.1% [424]. - The company incurred $17,115,514 in selling, general and administrative expenses, an increase of 9.9% from $15,580,274 [426]. - Total stockholders' deficit increased to $31,159,182 as of November 30, 2023, compared to $21,637,513 in the previous year [457]. Impairment and Charges - An impairment charge of $13,108,064 was recorded due to the results of a phase 2/3 trial showing no benefit from mesenchymal stem cell preparations compared to standard care [419]. - The company incurred an impairment of $13,108,064 related to the Duke License Agreement asset [455]. - The Company recognized an impairment of $377,810 related to patents associated with the Duke assets for the twelve months ended November 30, 2023, compared to no impairment in the previous year [559]. Deferred Revenue and Liabilities - As of November 30, 2023, the total deferred revenue amounted to $50,891,353, with $9,704,553 expected to be recognized over the next twelve months [470]. - The company’s contract liabilities (deferred revenue) increased from $45,586,386 to $50,891,353 during the twelve months ended November 30, 2023 [482]. - The minimum annual royalties payable to Duke have been amended, with Year 3 set at $500,000 and Year 4 at $1,000,000 [59]. Accreditations and Compliance - The company holds AABB and FACT accreditations, positioning it as a quality leader in the private cord blood banking industry [49]. - The company is required to register with the FDA and is subject to FDA inspection due to its ongoing cellular storage business [33]. - The company is currently registered or licensed to operate in states with specific requirements, including California, Illinois, Maryland, New Jersey, and New York [53]. Inventory and Assets - The company has approximately 6,000 cord blood units in inventory valued at the lower of cost or net realizable value as of November 30, 2023 [507]. - Total inventory as of November 30, 2023, was $6,028,996, down from $10,126,574 as of November 30, 2022, representing a decrease of approximately 40.5% [557]. - The Company’s work-in-process inventory increased to $341,692 as of November 30, 2023, from $254,953 in the previous year, reflecting a growth of approximately 34% [557]. - Finished goods inventory decreased to $48,045 as of November 30, 2023, from $62,554 in the previous year, a decline of about 23.3% [557]. Stock and Compensation - The company recognized a compensatory element of stock options amounting to $816,639 during the year [457]. - The Company’s stock-based compensation expense is recognized over the requisite service period, with estimates based on fair value at the grant date [551]. - Performance-based equity awards are contingent on achieving specific financial performance goals, with adjustments made based on the probability of meeting these targets [553]. Research and Development - Research, development, and related engineering costs are expensed as incurred, with no specific figures provided in the documents [543]. - The Company does not intend to enter into additional Revenue Sharing Agreements (RSAs) as reflected in the financial statements [528].