Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

August 9, 2023

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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 June 30, 2023

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 28, 2023 there were 48,879,018 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, 2023 (Unaudited) and December 31, 2022

3

Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022

4

Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2023 and 2022

5

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022

6

Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022

7

Notes to Condensed Consolidated Financial Statements (Unaudited)

8

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

24

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

37

ITEM 4. Controls and Procedures

37

PART II. OTHER INFORMATION

38

ITEM 1. Legal Proceedings

38

ITEM 1A. Risk Factors

38

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

38

ITEM 3. Defaults Upon Senior Securities

38

ITEM 4. Mine Safety Disclosures

39

ITEM 5. Other Information

39

ITEM 6. Exhibits

40

SIGNATURES

41

Table of Contents

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share data)

June 30, 

December 31, 

    

2023

    

2022

(unaudited)

ASSETS

Current Assets:

  

  

Cash and cash equivalents

$

67,314

$

36,595

Short-term investments

 

437,360

 

486,728

Accounts receivable, net

 

43,076

 

43,858

Inventories

 

28,821

 

27,678

Prepaid expenses and other current assets

 

8,616

 

9,317

Total current assets

 

585,187

 

604,176

Property and equipment, net

 

69,008

63,603

Operating lease right-of-use assets

30,011

26,877

Intangible assets, net

 

194,992

191,009

Goodwill

149,308

151,117

Deposits

 

1,210

1,017

Deferred tax assets

934

947

Total assets

$

1,030,650

$

1,038,746

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

  

Current Liabilities:

 

 

  

Accounts payable and other accrued expenses

$

26,124

$

28,046

Accrued compensation and related expenses

 

8,717

8,458

Deferred revenue

 

927

439

Current portion of operating lease liabilities

4,234

3,720

Current portion of finance lease liabilities

 

191

128

Current portion of notes payable

61

60

Total current liabilities

 

40,254

 

40,851

Convertible senior notes, net of discount of $8.9 million and $10.1 million, respectively

407,992

406,708

Notes payable

347

355

Operating lease liabilities, net of current portion

27,520

24,721

Finance lease liabilities, net of current portion

624

216

Deferred tax liabilities

4,658

4,929

Other long-term liabilities

361

451

Contingent consideration

4,639

4,677

Total liabilities

 

486,395

 

482,908

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

22,275

18,275

Common stock, $0.001 par value; 100,000,000 shares authorized; 48,879,018 and 48,334,280 issued and outstanding at June 30, 2023 and December 31, 2022, respectively

49

48

Additional paid-in capital

 

1,123,180

 

1,114,896

Accumulated deficit

 

(566,761)

 

(542,832)

Accumulated other comprehensive loss

 

(34,488)

 

(34,549)

Total stockholders’ equity

 

544,255

 

555,838

Total liabilities and stockholders’ equity

$

1,030,650

$

1,038,746

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 June 30,

Six Months Ended June 30,

    

2023

    

2022

    

2023

    

2022

Service revenues

$

35,204

$

34,585

$

71,040

$

67,495

Product revenues

21,817

29,568

48,798

48,960

Total revenues

57,021

64,153

119,838

116,455

Cost of service revenues

20,008

19,111

39,084

37,829

Cost of product revenues

 

12,280

16,204

28,949

27,447

Total cost of revenues

32,288

35,315

68,033

65,276

Gross margin

 

24,733

28,838

51,805

51,179

 

 

 

Operating costs and expenses:

 

 

 

 

Selling, general and administrative

 

38,802

30,563

72,043

57,185

Engineering and development

 

4,263

3,522

8,139

7,060

Total operating costs and expenses

 

43,065

34,085

80,182

64,245

 

 

 

 

Loss from operations

 

(18,332)

(5,247)

(28,377)

(13,066)

Other income (expense):

 

 

 

 

Investment income

2,647

2,048

5,114

3,312

Interest expense

 

(1,331)

(1,586)

(2,840)

(3,077)

Other income (expense), net

 

(704)

(4,028)

3,301

(9,045)

Total other income (expense), net

612

(3,566)

5,575

(8,810)

Loss before provision for income taxes

 

(17,720)

(8,813)

(22,802)

(21,876)

Provision for income taxes

 

(635)

(364)

(1,127)

(705)

Net loss

$

(18,355)

$

(9,177)

$

(23,929)

$

(22,581)

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

(2,000)

(2,000)

(4,000)

(4,000)

Net loss attributable to common stockholders

$

(20,355)

$

(11,177)

$

(27,929)

$

(26,581)

Net loss per share - basic and diluted

$

(0.42)

$

(0.23)

$

(0.58)

$

(0.54)

Weighted average shares outstanding – basic and diluted

 

48,709,384

48,792,559

48,536,901

49,467,691

See accompanying notes to condensed consolidated financial statements.

4

Table of Contents

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

(unaudited, in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

    

2023

    

2022

    

2023

    

2022

Net loss

$

(18,355)

$

(9,177)

$

(23,929)

$

(22,581)

Other comprehensive income (loss), net of tax:

 

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

 

(1,223)

(5,310)

2,452

(19,374)

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

532

14

631

46

Foreign currency translation adjustments

 

(4,226)

(7,558)

(3,022)

(8,605)

Other comprehensive income (loss)

 

(4,917)

(12,854)

61

(27,933)

Total comprehensive loss

$

(23,272)

$

(22,031)

$

(23,868)

$

(50,514)

See accompanying notes to condensed consolidated financial statements.

5

Table of Contents

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share data)

(unaudited)

Class A

Class B

Class C

Other 

Total 

Preferred Stock

Preferred Stock

Preferred Stock

Common Stock

Additional

Accumulated 

Comprehensive 

Stockholders’

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

Paid–In Capital

    

Deficit

    

Loss

    

Equity (Deficit)

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 March 31, 2023

$

$

200,000

$

20,275

48,501,406

$

48

$

1,118,172

$

(548,406)

$

(29,571)

$

560,518

Net loss

(18,355)

(18,355)

Other comprehensive loss, net of taxes

(4,917)

(4,917)

Stock-based compensation expense

5,800

5,800

Paid-in-kind preferred stock dividend

2,000

(2,000)

Vesting of restricted stock units

52,536

Proceeds from exercise of stock options

325,076

1

1,208

1,209

Balance at June 30, 2023

$

$

200,000

$

22,275

48,879,018

$

49

$

1,123,180

$

(566,761)

$

(34,488)

$

544,255

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

Balance at December 31, 2022

 

$

$

200,000

$

18,275

48,334,280

$

48

$

1,114,896

$

(542,832)

$

(34,549)

$

555,838

Net loss

(23,929)

(23,929)

Other comprehensive income, net of taxes

61

61

Stock-based compensation expense

10,984

10,984

Paid-in-kind preferred stock dividend

4,000

(4,000)

Vesting of restricted stock units

 

209,124

Proceeds from exercise of stock options

 

335,614

1

1,300

1,301

Balance at June 30, 2023

 

$

$

200,000

$

22,275

48,879,018

$

49

$

1,123,180

$

(566,761)

$

(34,488)

$

544,255

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 Six Months Ended

June 30, 

    

2023

    

2022

Cash Flows From Operating Activities:

 

  

 

  

Net loss

$

(23,929)

$

(22,581)

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

 

  

Depreciation and amortization

13,127

10,845

Amortization of debt discount

1,283

1,286

Non-cash operating lease expense

2,281

1,834

Unrealized (gain) loss on investments in equity securities

(105)

8,556

Realized loss on available-for-sale investments

69

80

Stock-based compensation expense

10,984

9,383

Loss on disposal of property and equipment

190

304

Gain on insurance settlement

(2,642)

Change in credit losses

(133)

35

Excess and obsolete inventory

546

Insurance proceeds for operations

1,212

6,311

Change in contingent consideration

(68)

Changes in operating assets and liabilities:

Accounts receivable

1,104

(4,291)

Inventories

(1,247)

(9,476)

Prepaid expenses and other current assets

1,251

(1,043)

Deposits

(197)

27

Operating lease liabilities

(2,102)

(1,807)

Accounts payable and other accrued expenses

(2,874)

(4,283)

Accrued compensation and related expenses

248

(1,581)

Deferred revenue

488

(151)

Net deferred tax liability

(220)

(481)

Net cash used in operating activities

(1,280)

(6,487)

 

  

Cash Flows From Investing Activities:

 

  

Purchases of property and equipment

(18,243)

(9,060)

Insurance proceeds for loss of fixed assets

976

3,000

Software development costs

(2,534)

(564)

Purchases of short-term investments

(136,611)

Acquisitions

(2,107)

Sales/maturities of short-term investments

52,487

84,760

Patent and trademark costs

(391)

(358)

Net cash provided by (used in) investing activities

32,295

(60,940)

 

  

Cash Flows From Financing Activities:

 

  

Proceeds from exercise of stock options

1,300

597

Repurchase of common stock

(33,349)

Repayment of notes payable

(11)

(639)

Repayment of finance lease liabilities

(70)

(18)

Net cash provided by (used in) financing activities

1,219

(33,409)

Effect of exchange rates on cash and cash equivalents

(1,515)

(1,231)

Net change in cash and cash equivalents

30,719

(102,067)

Cash and cash equivalents — beginning of period

36,595

139,101

Cash and cash equivalents — end of period

$

67,314

$

37,034

Supplemental Disclosure of Cash Flow Information:

Cash paid for interest

$

1,725

$

1,884

Cash paid for income taxes

$

1,103

$

714

Supplemental Disclosure of Non-Cash Financing Activities:

Operating lease right-of-use assets and operating lease liabilities

$

5,603

$

2,103

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

$

2,452

$

(19,374)

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

$

(631)

$

(46)

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

$

4,000

$

4,000

Fixed assets included in accounts payable and accrued liabilities

$

822

$

397

Common stock issued for Cell&Co acquisition

$

$

479

See accompanying notes to condensed consolidated financial statements.