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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 September 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 October 28, 2022 there were 48,999,839 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 September 30, 2022 (Unaudited) and December 31, 2021

3

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

4

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

5

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

6

Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 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

52

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

55

ITEM 3. Defaults Upon Senior Securities

56

ITEM 4. Mine Safety Disclosures

56

ITEM 5. Other Information

56

ITEM 6. Exhibits

56

SIGNATURES

57

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share data)

September 30, 

December 31, 

    

2022

    

2021

(unaudited)

ASSETS

Current Assets:

  

  

Cash and cash equivalents

$

30,724

$

139,101

Short-term investments

 

498,801

 

489,698

Accounts receivable, net

 

44,419

 

39,412

Inventories

 

24,542

 

16,501

Prepaid expenses and other current assets

 

10,639

 

8,804

Total current assets

 

609,125

 

693,516

Property and equipment, net

 

57,680

49,029

Operating lease right-of-use assets

24,820

20,675

Intangible assets, net

 

192,140

201,427

Goodwill

147,458

146,954

Deposits

 

926

950

Deferred tax assets

1,642

419

Total assets

$

1,033,791

$

1,112,970

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

  

 

  

Current Liabilities:

 

  

 

  

Accounts payable and other accrued expenses

$

27,441

$

28,583

Accrued compensation and related expenses

 

8,625

9,912

Deferred revenue

 

549

547

Current portion of operating lease liabilities

3,007

3,542

Current portion of notes payable

1,010

Current portion of finance lease liabilities

 

96

61

Total current liabilities

 

40,728

 

42,645

Convertible senior notes, net

406,071

404,171

Notes payable, net

351

1,086

Operating lease liabilities, net of current portion

23,112

18,144

Finance lease liabilities, net of current portion

171

51

Deferred tax liability

3,037

4,018

Other long-term liabilities

455

298

Contingent consideration

4,145

729

Total liabilities

 

478,070

 

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

16,275

10,275

Common stock, $0.001 par value; 100,000,000 shares authorized; 48,558,431 and 49,616,154 issued and outstanding at September 30, 2022 and December 31, 2021, respectively

49

50

Additional paid-in capital

 

1,086,112

 

1,100,287

Accumulated deficit

 

(503,787)

 

(467,541)

Accumulated other comprehensive loss

 

(42,928)

 

(1,243)

Total stockholders’ equity

 

555,721

 

641,828

Total liabilities and stockholders’ equity

$

1,033,791

$

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

Nine Months Ended

September 30, 

September 30, 

    

2022

    

2021

    

2022

    

2021

Service revenues

$

33,296

$

30,899

$

100,791

$

87,342

Product revenues

27,168

25,794

76,128

78,826

Total revenues

60,464

56,693

176,919

166,168

Cost of service revenues

18,913

18,114

56,742

50,409

Cost of product revenues

 

15,134

15,066

42,581

42,295

Total cost of revenues

34,047

33,180

99,323

92,704

Gross margin

 

26,417

23,513

77,596

73,464

 

  

 

  

 

  

Operating costs and expenses:

 

  

 

  

 

  

 

  

Selling, general and administrative

 

30,235

23,901

87,420

69,977

Engineering and development

 

3,985

4,188

11,045

12,953

Total operating costs and expenses

 

34,220

28,089

98,465

82,930

 

 

  

 

 

Loss from operations

 

(7,803)

(4,576)

(20,869)

(9,466)

Other income (expense):

 

 

  

 

  

 

  

Investment income

2,485

851

5,797

1,618

Interest expense

 

(1,609)

(1,189)

(4,686)

(3,563)

Other income (expense), net

 

1,668

(588)

(7,377)

(1,469)

Total other expense, net

2,544

(926)

(6,266)

(3,414)

Loss before provision for income taxes

 

(5,259)

(5,502)

(27,135)

(12,880)

Provision for income taxes

 

(57)

(1,024)

(762)

(2,562)

Net loss

$

(5,316)

$

(6,526)

$

(27,897)

$

(15,442)

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

(2,000)

(2,000)

(6,000)

(6,196)

Net loss attributable to common stockholders

$

(7,316)

$

(8,526)

$

(33,897)

$

(21,638)

Net loss per share - basic and diluted

$

(0.15)

$

(0.18)

$

(0.69)

$

(0.48)

Weighted average shares outstanding – basic and diluted

 

48,520,696

46,137,147

49,148,558

45,220,319

See accompanying notes to condensed consolidated financial statements.

4

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2022

    

2021

    

2022

    

2021

Net loss

$

(5,316)

$

(6,526)

$

(27,897)

$

(15,442)

Other comprehensive loss, net of tax:

 

Net unrealized loss on available-for-sale debt securities

 

(6,537)

(384)

(25,912)

(1,544)

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

(31)

46

7

Foreign currency translation adjustments

 

(7,215)

(512)

(15,819)

(3,666)

Other comprehensive loss

 

(13,752)

(927)

(41,685)

(5,203)

Total comprehensive loss

$

(19,068)

$

(7,453)

$

(69,582)

$

(20,645)

See accompanying notes to condensed consolidated financial statements.

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 June 30, 2021

 

200,000

6,275

45,892,448

46

841,537

(200,929)

1,100

648,029

Net loss

 

(6,526)

(6,526)

Other comprehensive loss, net of taxes

 

(927)

(927)

Stock-based compensation expense

 

4,148

4,148

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

2,000

(2,000)

Proceeds from exercise of stock options

 

315,118

2,502

2,502

Balance at September 30, 2021

$

$

200,000

$

8,275

46,207,566

$

46

$

846,187

$

(207,455)

$

173

$

647,226

Balance at June 30, 2022

200,000

14,275

48,482,502

49

1,081,747

(498,471)

(29,176)

568,424

Net loss

(5,316)

(5,316)

Other comprehensive loss, net of taxes

(13,752)

(13,752)

Stock-based compensation expense

5,366

5,366

Paid-in-kind preferred stock dividend

2,000

(2,000)

Vesting of restricted stock units

4,500

Proceeds from exercise of stock options

71,429

999

999

Balance at September 30, 2022

$

$

200,000

$

16,275

48,558,431

$

49

$

1,086,112

$

(503,787)

$

(42,928)

$

555,721

Balance at December 31, 2020

 

250,000

2,844

39,837,058

40

566,451

(192,013)

5,376

382,698

Net loss

 

(15,442)

(15,442)

Other comprehensive loss, net of taxes

(5,203)

(5,203)

Stock-based compensation expense

 

11,151

11,151

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

6,196

(6,196)

Proceeds from exercise of stock options and warrants

 

701,360

1

5,985

5,986

Balance at September 30, 2021

 

$

$

200,000

$

8,275

46,207,566

$

46

$

846,187

$

(207,455)

$

173

$

647,226

Balance at December 31, 2021

 

200,000

10,275

49,616,154

50

1,100,287

(467,541)

(1,243)

641,828

Net loss

(27,897)

(27,897)

Other comprehensive loss, net of taxes

(41,685)

(41,685)

Stock-based compensation expense

14,749

14,749

Paid-in-kind preferred stock dividend

6,000

(6,000)

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

 

97,062

Proceeds from exercise of stock options

 

171,634

1,596

1,596

Balance at September 30, 2022

 

$

$

200,000

$

16,275

48,558,431

$

49

$

1,086,112

$

(503,787)

$

(42,928)

$

555,721

See accompanying notes to condensed consolidated financial statements.

6

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)

For the Nine Months Ended

September 30, 

    

2022

    

2021

Cash Flows From Operating Activities:

 

  

 

  

Net loss

$

(27,897)

$

(15,442)

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

 

  

Depreciation and amortization

16,631

14,944

Amortization of debt discount

1,930

736

Unrealized loss on investments in equity securities

12,436

308

Realized loss on available-for-sale investments

113

77

Stock-based compensation expense

14,749

 

11,163

Loss on disposal of property and equipment

574

 

125

Provision for bad debt

13

 

263

Excess and obsolete inventory

546

Gain on insurance settlement

(4,815)

Insurance proceeds for operations

6,429

 

Contingent consideration

145

Changes in operating assets and liabilities:

Accounts receivable

(8,307)

(6,564)

Inventories

(11,179)

(2,980)

Prepaid expenses and other current assets

(1,419)

2,722

Deposits

9

210

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

316

303

Accounts payable and other accrued expenses

(3,172)

(2,334)

Accrued compensation and related expenses

(1,218)

1,245

Deferred revenue

(420)

(137)

Deferred tax (asset) liability