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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______.

Commission File Number: 001-34632

Graphic

CRYOPORT, INC.

(Exact Name of Registrant as Specified in its Charter)

Nevada

88-0313393

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

112 Westwood Place, Suite 350

Brentwood, TN 37027

(Address of principal executive offices, including zip code)

(949470-2300

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

    

Trading Symbol(s)

    

Name of each exchange on which registered:

Common Stock, $0.001 par value

CYRX

The Nasdaq Stock Market LLC (The Nasdaq Capital Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

  

Smaller reporting company

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes      No  

As of July 29, 2022 there were 48,489,803 shares of the registrant’s common stock outstanding.

TABLE OF CONTENTS

 

Page

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

Condensed Consolidated Balance Sheets at June 30, 2022 (Unaudited) and December 31, 2021

3

Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021

4

Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2022 and 2021

5

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021

6

Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021

7

Notes to Condensed Consolidated Financial Statements (Unaudited)

8

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

37

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

51

ITEM 4. Controls and Procedures

51

PART II. OTHER INFORMATION

52

ITEM 1. Legal Proceedings

52

ITEM 1A. Risk Factors

52

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

54

ITEM 3. Defaults Upon Senior Securities

55

ITEM 4. Mine Safety Disclosures

55

ITEM 5. Other Information

55

ITEM 6. Exhibits

55

SIGNATURES

56

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share data)

June 30, 

December 31, 

    

2022

    

2021

(unaudited)

ASSETS

Current Assets:

  

  

Cash and cash equivalents

$

37,034

$

139,101

Short-term investments

 

513,584

 

489,698

Accounts receivable, net

 

43,903

 

39,412

Inventories

 

23,070

 

16,501

Prepaid expenses and other current assets

 

8,250

 

8,804

Total current assets

 

625,841

 

693,516

Property and equipment, net

 

54,011

49,029

Operating lease right-of-use assets

22,740

20,675

Intangible assets, net

 

196,013

201,427

Goodwill

145,201

146,954

Deposits

 

926

950

Deferred tax asset

1,597

419

Total assets

$

1,046,329

$

1,112,970

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

  

 

  

Current Liabilities:

 

  

 

  

Accounts payable and other accrued expenses

$

31,086

$

28,583

Accrued compensation and related expenses

 

8,354

9,912

Deferred revenue

 

818

547

Operating lease liabilities

2,656

3,542

Current portion of notes payable

1,079

Other liabilities

 

53

61

Total current liabilities

 

44,046

 

42,645

Convertible senior notes, net

405,436

404,171

Notes payable, net

374

1,086

Operating lease liabilities, net of current portion

21,106

18,144

Deferred tax liability

3,745

4,018

Other long-term liabilities

378

349

Contingent consideration

2,820

729

Total liabilities

 

477,905

 

471,142

Commitments and contingencies

 

  

 

  

Stockholders’ Equity:

 

  

 

  

Preferred stock, $0.001 par value; 2,500,000 shares authorized:

 

  

 

  

Class A convertible preferred stock — $0.001 par value; 800,000 shares authorized; none issued and outstanding

 

 

Class B convertible preferred stock — $0.001 par value; 585,000 shares authorized; none issued and outstanding

 

 

Class C convertible preferred stock, $0.001 par value; 250,000 shares authorized; 200,000 issued and outstanding

14,275

10,275

Common stock, $0.001 par value; 100,000,000 shares authorized; 48,482,502 and 49,616,154 issued and outstanding at June 30, 2022 and December 31, 2021, respectively

49

50

Additional paid-in capital

 

1,081,747

 

1,100,287

Accumulated deficit

 

(498,471)

 

(467,541)

Accumulated other comprehensive loss

 

(29,176)

 

(1,243)

Total stockholders’ equity

 

568,424

 

641,828

Total liabilities and stockholders’ equity

$

1,046,329

$

1,112,970

See accompanying notes to condensed consolidated financial statements.

3

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2022

    

2021

    

2022

    

2021

Service revenues

$

34,585

$

29,679

$

67,495

$

56,443

Product revenues

29,568

26,512

48,960

53,032

Total revenues

64,153

56,191

116,455

109,475

Cost of service revenues

19,111

16,742

37,829

32,294

Cost of product revenues

 

16,204

14,047

 

27,447

 

27,229

Total cost of revenues

35,315

30,789

65,276

59,523

Gross margin

 

28,838

25,402

 

51,179

 

49,952

 

  

 

  

 

  

Operating costs and expenses:

 

  

 

  

 

  

 

  

Selling, general and administrative

 

30,563

 

24,688

 

57,185

 

46,076

Engineering and development

 

3,522

 

4,462

 

7,060

 

8,766

Total operating costs and expenses

 

34,085

 

29,150

 

64,245

 

54,842

 

 

  

 

 

Loss from operations

 

(5,247)

 

(3,748)

 

(13,066)

 

(4,890)

Other income (expense):

 

 

  

 

  

 

  

Investment income

2,048

368

3,312

766

Interest expense

 

(1,586)

 

(1,164)

 

(3,077)

 

(2,373)

Other expense, net

 

(4,028)

 

(346)

 

(9,045)

 

(881)

Total other expense, net

(3,566)

 

(1,142)

(8,810)

 

(2,488)

Loss before provision for income taxes

 

(8,813)

 

(4,890)

 

(21,876)

 

(7,378)

Provision for income taxes

 

(364)

 

(499)

 

(705)

 

(1,538)

Net loss

$

(9,177)

$

(5,389)

$

(22,581)

$

(8,916)

Paid-in-kind dividend on Series C convertible preferred stock

(2,000)

(2,000)

(4,000)

(4,196)

Net loss attributable to common stockholders

$

(11,177)

$

(7,389)

$

(26,581)

$

(13,112)

Net loss per share - basic and diluted

$

(0.23)

$

(0.16)

$

(0.54)

$

(0.29)

Weighted average shares outstanding – basic and diluted

 

48,792,559

 

45,757,532

 

49,467,691

 

44,786,403

4

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2022

    

2021

    

2022

    

2021

Net loss

$

(9,177)

$

(5,389)

$

(22,581)

$

(8,916)

Other comprehensive loss, net of tax:

 

 

 

 

Net unrealized loss on available-for-sale debt securities

 

(5,310)

 

(432)

 

(19,374)

 

(1,178)

Reclassification of realized loss on available-for-sale debt securities to earnings

14

8

46

38

Foreign currency translation adjustments

 

(7,558)

 

644

 

(8,605)

 

(3,136)

Other comprehensive income (loss)

 

(12,854)

 

220

 

(27,933)

 

(4,276)

Total comprehensive loss

$

(22,031)

$

(5,169)

$

(50,514)

$

(13,192)

5

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share data)

Other 

Class A

Class B

Class C

Comprehensive 

Total 

Preferred Stock

Preferred Stock

Preferred Stock

Common Stock

Additional

Accumulated 

Income

Stockholders’

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Paid–In Capital

    

Deficit

    

(Loss)

    

Equity  (Deficit)

Balance at March 31, 2021

 

 

200,000

4,275

 

45,693,692

45

837,615

(195,540)

880

647,275

Net loss

 

 

 

 

 

 

 

 

 

(5,389)

 

 

(5,389)

Other comprehensive loss, net of taxes

 

 

 

 

 

 

 

 

 

 

220

 

220

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,025

 

 

 

4,025

Paid-in-kind preferred stock dividend, including beneficial conversion feature

2,000

(2,000)

Proceeds from exercise of stock options

 

 

 

 

 

 

198,756

 

1

 

1,897

 

 

 

1,898

Balance at June 30, 2021

$

$

200,000

$

6,275

45,892,448

$

46

$

841,537

$

(200,929)

$

1,100

$

648,029

Balance at March 31, 2022

200,000

12,275

49,453,307

50

1,102,725

(489,294)

(16,322)

609,434

Net loss

(9,177)

(9,177)

Other comprehensive loss, net of taxes

(12,854)

(12,854)

Stock-based compensation expense

5,258

5,258

Issuance of common stock for Cell&Co acquisition

15,152

479

479

Paid-in-kind preferred stock dividend

2,000

(2,000)

Repurchase of common stock

(1,035,271)

(1)

(24,999)

(25,000)

Vesting of restricted stock units

22,517

Proceeds from exercise of stock options

26,797

284

284

Balance at June 30, 2022

$

$

200,000

$

14,275

48,482,502

$

49

$

1,081,747

$

(498,471)

$

(29,176)

$

568,424

Balance at December 31, 2020

 

 

250,000

2,844

 

39,837,058

40

566,451

(192,013)

5,376

382,698

Net loss

 

 

 

 

 

 

 

 

 

(8,916)

 

 

(8,916)

Other comprehensive loss, net of taxes

(4,276)

(4,276)

Stock-based compensation expense

 

 

 

 

 

 

 

 

7,003

 

 

 

7,003

Issuance of common stock for board of director compensation

 

 

 

 

 

 

229

 

 

11

 

 

 

11

Cost of Series C preferred stock conversion

(1,800)

(1,800)

Issuance of common stock in public offering, net of costs of $17.7 million

4,356,059

4

269,821

269,825

Conversion of Series C preferred shares to common stock

(50,000)

(765)

1,312,860

1

764

Paid-in-kind preferred stock dividend, including beneficial conversion feature

4,196

(4,196)

Proceeds from exercise of stock options and warrants

 

 

 

 

 

 

386,242

 

1

 

3,483

 

 

 

3,484

Balance at June 30, 2021

 

$

 

$

200,000

$

6,275

 

45,892,448

$

46

$

841,537

$

(200,929)

$

1,100

$

648,029

Balance at December 31, 2021

 

 

200,000

10,275

 

49,616,154

50

1,100,287

(467,541)

(1,243)

641,828

Net loss

(22,581)

(22,581)

Other comprehensive loss, net of taxes

(27,933)

(27,933)

Stock-based compensation expense

9,383

9,383

Paid-in-kind preferred stock dividend

 

 

 

 

 

4,000

 

 

 

(4,000)

 

 

 

Issuance of common stock for Cell&Co acquisition

15,152

479

479

Repurchase of common stock

(1,341,571)

(1)

(24,999)

(8,349)

(33,349)

Vesting of restricted stock units

80,912

Proceeds from exercise of stock options

 

 

 

 

 

 

111,855

 

 

597

 

 

 

597

Balance at June 30, 2022

 

$

 

$

200,000

$

14,275

 

48,482,502

$

49

$

1,081,747

$

(498,471)

$

(29,176)

$

568,424

See accompanying notes to condensed consolidated financial statements.

6

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)

For the Six Months Ended

June 30, 

    

2022

    

2021

Cash Flows From Operating Activities:

 

  

 

  

Net loss

$

(22,581)

$

(8,916)

Adjustments to reconcile net loss to net cash used in operating activities:

 

  

Depreciation and amortization

10,845

 

9,787

Amortization of debt discount

1,286

 

496

Unrealized loss on investments in equity securities

8,556

 

156

Realized loss on available-for-sale investments

80

85

Stock-based compensation expense

9,383

 

7,015

Loss on disposal of property and equipment

304

 

113

Provision for bad debt

35

 

215

Excess and obsolete inventory

546

Insurance proceeds for operations

6,311

 

Changes in operating assets and liabilities:

Accounts receivable

(4,291)

 

(5,590)

Inventories

(9,476)

 

(1,138)

Prepaid expenses and other current assets

(1,043)

 

(512)

Deposits

27

 

230

Change in operating lease right-of-use assets and lease liabilities

27