Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

November 4, 2021

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Table of Contents

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, 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

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 29, 2021 there were 46,295,658 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 September 30, 2021 (Unaudited) and December 31, 2020

3

Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020

4

Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2021 and 2020

5

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2021 and 2020

6

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

47

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

2

Table of Contents

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share data)

September 30, 

December 31, 

2021

    

2020

(unaudited)

ASSETS

Current Assets:

  

  

Cash and cash equivalents

$

43,680

$

36,873

Short-term investments

 

305,802

 

56,444

Accounts receivable, net

 

38,460

 

31,377

Inventories

 

13,484

 

10,535

Prepaid expenses and other current assets

 

8,958

 

11,928

Total current assets

 

410,384

 

147,157

Property and equipment, net

 

42,853

30,036

Operating lease right-of-use assets

18,425

14,044

Intangible assets, net

 

205,240

213,908

Goodwill

146,371

145,282

Deposits

 

955

1,184

Other long-term assets

158

794

Total assets

$

824,386

$

552,405

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

  

 

  

Current Liabilities:

 

  

 

  

Accounts payable and other accrued expenses

$

29,235

$

24,844

Accrued compensation and related expenses

 

8,649

7,441

Deferred revenue

 

308

445

Operating lease liabilities

2,820

2,231

Finance lease liabilities

 

61

59

Total current liabilities

 

41,073

 

35,020

Convertible senior notes, net of discount of $3.1 million and $3.7 million, respectively

 

111,924

 

111,344

Note payable, net of discount of $0.1 million and $0, respectively

4,509

4,912

Contingent consideration

731

Operating lease liabilities, net of current portion

16,355

12,261

Finance lease liabilities, net of current portion

64

112

Deferred tax liability

2,356

5,882

Other long-term liabilities

148

176

Total liabilities

 

177,160

 

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

8,275

2,844

Common stock, $0.001 par value; 100,000,000 shares authorized; 46,207,566 and 39,837,058 issued and outstanding at September 30, 2021 and December 31, 2020, respectively

46

40

Additional paid-in capital

 

846,187

 

566,451

Accumulated deficit

 

(207,455)

 

(192,013)

Accumulated other comprehensive income

 

173

 

5,376

Total stockholders’ equity

 

647,226

 

382,698

Total liabilities and stockholders’ equity

$

824,386

$

552,405

See accompanying notes to condensed consolidated financial statements.

3

Table of Contents

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, 

    

2021

    

2020

    

2021

    

2020

Service revenues

$

30,899

$

11,172

$

87,342

$

30,335

Product revenues

25,794

78,826

Total revenues

56,693

11,172

166,168

30,335

Cost of service revenues

18,114

5,117

50,409

13,895

Cost of product revenues

 

15,066

 

42,295

 

Total cost of revenues

33,180

5,117

92,704

13,895

Gross margin

 

23,513

6,055

 

73,464

 

16,440

 

  

 

  

 

  

Operating costs and expenses:

 

  

 

  

 

  

 

  

Selling, general and administrative

 

23,901

 

14,476

 

69,977

 

30,613

Engineering and development

 

4,188

 

2,312

 

12,953

 

5,991

Total operating costs and expenses

 

28,089

 

16,788

 

82,930

 

36,604

 

 

  

 

 

Loss from operations

 

(4,576)

 

(10,733)

 

(9,466)

 

(20,164)

Other income (expense):

 

  

 

  

 

  

 

  

Investment income

851

188

1,618

808

Interest expense

 

(1,189)

 

(1,889)

 

(3,563)

 

(2,290)

Other income (expense), net

 

(588)

 

987

 

(1,469)

 

536

Total other expense, net

(926)

 

(714)

(3,414)

 

(946)

Loss before provision for income taxes

 

(5,502)

 

(11,447)

 

(12,880)

 

(21,110)

(Provision for) benefit from income taxes

 

(1,024)

 

29

 

(2,562)

 

(54)

Net loss

$

(6,526)

$

(11,418)

$

(15,442)

$

(21,164)

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

(2,000)

(6,196)

Net loss attributable to common stockholders

$

(8,526)

$

(11,418)

$

(21,638)

$

(21,164)

Net loss per share attributable to common stockholders– basic and diluted

$

(0.18)

$

(0.29)

$

(0.48)

$

(0.55)

Weighted average shares outstanding – basic and diluted

 

46,137,147

 

39,144,916

 

45,220,319

 

38,211,327

See accompanying notes to condensed consolidated financial statements.

4

Table of Contents

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2021

    

2020

    

2021

    

2020

Net loss

$

(6,526)

$

(11,418)

$

(15,442)

$

(21,164)

Other comprehensive income (loss), net of tax:

 

  

 

  

 

  

 

  

Net unrealized gain (loss) on available-for-sale debt securities

 

(384)

 

(105)

 

(1,544)

 

251

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

(31)

28

7

(19)

Foreign currency translation adjustments

 

(512)

 

24

 

(3,666)

 

20

Other comprehensive income (loss)

 

(927)

 

(53)

 

(5,203)

 

252

Total comprehensive loss

$

(7,453)

$

(11,471)

$

(20,645)

$

(20,912)

5

Table of Contents

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, 2020

 

$

 

$

$

 

38,565,193

$

39

$

295,424

$

(169,066)

$

260

$

126,657

Net loss

 

 

 

 

 

 

 

 

 

(11,418)

 

 

(11,418)

Other comprehensive loss, net of taxes

 

 

 

 

 

 

 

 

 

 

(53)

 

(53)

Stock-based compensation expense

 

 

 

 

 

 

 

 

2,412

 

 

 

2,412

Issuance of common stock for board of director compensation

 

 

 

 

 

 

432

 

 

21

 

 

 

21

Proceeds from exercise of common stock options and warrants

 

 

 

 

 

 

418,199

 

 

2,417

 

 

 

2,417

Balance at September 30, 2020

$

$

$

38,983,824

$

39

$

300,274

$

(180,484)

$

207

$

120,036

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 and warrants

 

 

 

 

 

 

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 December 31, 2019

 

$

 

$

$

 

37,339,787

$

37

$

285,609

$

(159,320)

$

(45)

$

126,281

Net loss

 

 

 

 

 

 

 

 

 

(21,164)

 

 

(21,164)

Other comprehensive income, net of taxes

 

 

 

 

 

 

 

 

 

 

252

 

252

Stock-based compensation expense

6,293

6,293

Issuance of common stock for board of director compensation

2,400

62

62

Proceeds from exercise of common stock options and warrants

 

 

 

 

 

 

1,641,637

 

2

 

8,310

 

 

 

8,312

Balance at September 30, 2020

 

$

 

$

$

 

38,983,824

$

39

$

300,274

$

(180,484)

$

207

$

120,036

 

  

 

  

 

  

 

  

  

 

  

 

 

 

 

 

 

  

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

11,152

11,152

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

 

5,984

 

 

 

5,985

Balance at September 30, 2021

 

$

 

$

200,000

$

8,275

 

46,207,566

$

46

$

846,187

$

(207,455)

$

173

$

647,226

See accompanying notes to condensed consolidated financial statements.

6

Table of Contents

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)

For the Nine Months Ended

September 30, 

    

2021

    

2020

Cash Flows From Operating Activities:

 

  

 

  

Net loss

$

(15,442)

$

(21,164)

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

 

  

 

Depreciation and amortization

 

14,944

 

2,499

Amortization of debt discount

 

736

 

248

Unrealized loss (gain) on investments in equity securities

 

308

 

(438)

Realized loss on investments in equity securities

805

Realized loss (gain) on available-for-sale investments

77

(10)

Stock-based compensation expense

 

11,163

 

6,355

Loss on disposal of property and equipment

 

125

 

214

Provision for bad debt

 

263

 

64

Changes in operating assets and liabilities:

Accounts receivable

 

(6,564)

 

(749)

Inventories

 

(2,980)

 

(3)

Prepaid expenses and other current assets

 

2,722

 

151

Deposits

 

210

 

(99)

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

303

61

Accounts payable and other accrued expenses

 

(2,334)

 

6,365

Accrued compensation and related expenses