August 6, 2021 - 10-Q: Quarterly report pursuant to Section 13 or 15(d)

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, 2021


☐	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

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)

(949) 470-2300

(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 30, 2021 there were 46,022,469 shares of the registrant’s common stock outstanding.

Table of Contents

TABLE OF CONTENTS


	Page

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

Condensed Consolidated Balance Sheets at June 30, 2021 (Unaudited) and December 31, 2020	3

Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020	4

Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2021 and 2020	5

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2021 and 2020	6

Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020	7

Notes to Condensed Consolidated Financial Statements (Unaudited)	8

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	35

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	46

ITEM 4. Controls and Procedures	47

PART II. OTHER INFORMATION	48

ITEM 1. Legal Proceedings	48

ITEM 1A. Risk Factors	48

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	49

ITEM 3. Defaults Upon Senior Securities	49

ITEM 4. Mine Safety Disclosures	49

ITEM 5. Other Information	49

ITEM 6. Exhibits	50

SIGNATURES	51

Table of Contents

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share data)


	June 30,		December 31,
	2021		2020
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	60,357	$	36,873
Short-term investments		289,056		56,444
Accounts receivable, net		38,102		31,377
Inventories		11,665		10,535
Prepaid expenses and other current assets		12,574		11,928
Total current assets		411,754		147,157
Property and equipment, net		37,811		30,036
Operating lease right-of-use assets		17,936		14,044
Intangible assets, net		209,127		213,908
Goodwill		146,974		145,282
Deposits		947		1,184
Other long-term assets		759		794
Total assets	$	825,308	$	552,405

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and other accrued expenses	$	29,336	$	24,844
Accrued compensation and related expenses		6,781		7,441
Deferred revenue		459		445
Operating lease liabilities		1,523		2,231
Finance lease liabilities		55		59
Total current liabilities		38,154		35,020
Convertible senior notes, net of discount of $3.3 million and $3.7 million, respectively		111,729		111,344
Note payable, net of discount of $0.2 million and $0, respectively		4,573		4,912
Contingent consideration		640		—
Operating lease liabilities, net of current portion		17,081		12,261
Finance lease liabilities, net of current portion		83		112
Deferred tax liability		4,843		5,882
Other long-term liabilities		176		176
Total liabilities		177,279		169,707

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		6,275		2,844
Common stock, $0.001 par value; 100,000,000 shares authorized; 45,892,448 and 39,837,058 issued and outstanding at June 30, 2021 and December 31, 2020, respectively		46		40
Additional paid-in capital		841,537		566,451
Accumulated deficit		(200,929)		(192,013)
Accumulated other comprehensive income		1,100		5,376
Total stockholders’ equity		648,029		382,698
Total liabilities and stockholders’ equity	$	825,308	$	552,405

See accompanying notes to condensed consolidated financial statements.

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Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Service revenues	$	29,679	$	9,389	$	56,443	$	19,163
Product revenues		26,512		—		53,032		—
Total revenues		56,191		9,389		109,475		19,163

Cost of service revenues		16,742		4,262		32,294		8,778
Cost of product revenues		14,047		—		27,229		—
Total cost of revenues		30,789		4,262		59,523		8,778
Gross margin		25,402		5,127		49,952		10,385

Operating costs and expenses:
Selling, general and administrative		24,688		9,026		46,076		16,138
Engineering and development		4,462		1,947		8,766		3,679
Total operating costs and expenses		29,150		10,973		54,842		19,817

Loss from operations		(3,748)		(5,846)		(4,890)		(9,432)
Other income (expense):
Investment income		368		313		766		620
Interest expense		(1,164)		(398)		(2,373)		(401)
Other income (expense), net		(346)		178		(881)		(450)
Total other expense, net		(1,142)		93		(2,488)		(231)
Loss before provision for income taxes		(4,890)		(5,753)		(7,378)		(9,663)
Provision for income taxes		(499)		(50)		(1,538)		(83)
Net loss	$	(5,389)	$	(5,803)	$	(8,916)	$	(9,746)
Paid-in-kind dividend on Series C convertible preferred stock		(2,000)		—		(4,196)		—
Net loss attributable to common stockholders	$	(7,389)	$	(5,803)	$	(13,112)	$	(9,746)
Net loss per share attributable to common stockholders– basic and diluted	$	(0.16)	$	(0.15)	$	(0.29)	$	(0.26)
Weighted average common shares outstanding – basic and diluted		45,757,532		38,281,087		44,786,403		37,914,818

See accompanying notes to condensed consolidated financial statements.

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Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Net loss	$	(5,389)	$	(5,803)	$	(8,916)	$	(9,746)
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on available-for-sale debt securities		(432)		(145)		(1,178)		336
Reclassification of realized (gain) loss on available-for-sale debt securities to earnings		8		(15)		38		(27)
Foreign currency translation adjustments		644		(3)		(3,136)		(4)
Other comprehensive income (loss)		220		(163)		(4,276)		305
Total comprehensive loss	$	(5,169)	$	(5,966)	$	(13,192)	$	(9,441)

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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, 2020	—	$	—	—	$	—	—	$	—	37,930,255	$	37	$	290,107	$	(163,263)	$	423	$	127,304
Net loss	—		—	—		—	—		—	—		—		—		(5,803)		—		(5,803)
Other comprehensive loss, net of taxes	—		—	—		—	—		—	—		—		—		—		(163)		(163)
Stock-based compensation expense	—		—	—		—	—		—	—		—		2,281		—		—		2,281
Issuance of common stock for board of director compensation	—		—	—		—	—		—	699		1		21		—		—		22
Proceeds from exercise of common stock options and warrants	—		—	—		—	—		—	634,239		1		3,015		—		—		3,016

Balance at June 30, 2020	—	$	—	—	$	—	—	$	—	38,565,193	$	39	$	295,424	$	(169,066)	$	260	$	126,657


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 income, 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 and warrants	—		—	—		—	—		—	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 December 31, 2019	—	$	—	—	$	—	—	$	—	37,339,787	$	37	$	285,609	$	(159,320)	$	(45)	$	126,281
Net loss	—		—	—		—	—		—	—		—		—		(9,746)		—		(9,746)
Other comprehensive loss, net of taxes	—		—	—		—	—		—	—		—		—		—		305		305
Stock-based compensation expense	—		—	—		—	—		—	—		—		3,881		—		—		3,881
Issuance of common stock for board of director compensation	—		—	—		—	—		—	1,968		1		41		—		—		42
Proceeds from exercise of common stock options and warrants	—		—	—		—	—		—	1,223,438		1		5,893		—		—		5,894
Balance at June 30, 2020	—	$	—	—	$	—	—	$	—	38,565,193	$	39	$	295,424	$	(169,066)	$	260	$	126,657

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 income, 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

See accompanying notes to condensed consolidated financial statements.

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Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)


	For the Six Months Ended
	June 30,
	2021		2020
Cash Flows From Operating Activities:
Net loss	$	(8,916)	$	(9,746)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		9,787		1,669
Amortization of debt discount		496		60
Unrealized gain on investments in equity securities		156		(337)
Realized loss on investments in equity securities		—		805
Realized loss (gain) on available-for-sale investments		85		(17)
Stock-based compensation expense		7,015		3,922
Loss on disposal of property and equipment		113		121
Provision for bad debt		215		34
Changes in operating assets and liabilities:
Accounts receivable		(5,590)		25
Inventories		(1,138)		(64)
Prepaid expenses and other current assets		(512)		205
Deposits		230		(98)
Change in operating lease right-of-use assets and lease liabilities		220		13
Accounts payable and other accrued expenses		(4,983)		3,150
Accrued compensation and related expenses		(661)		(51)
Deferred revenue		14		(37)
Deferred tax liability		105		36
Net cash used in operating activities		(3,364)		(310)

Cash Flows From Investing Activities:
Purchases of property and equipment		(6,705)		(2,542)
Software development costs		(449)		—
Purchases of short-term investments		(241,993)		(136,252)
Sales/maturities of short-term investments		8,000

Form: 10-Q

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