November 9, 2023 - 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 September 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

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 November 3, 2023 there were 48,963,717 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, 2023 (Unaudited) and December 31, 2022	3

Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022	4

Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2023 and 2022	5

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022	6

Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 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	26

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	39

ITEM 4. Controls and Procedures	38

PART II. OTHER INFORMATION	40

ITEM 1. Legal Proceedings	39

ITEM 1A. Risk Factors	40

ITEM 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	40

ITEM 3. Defaults Upon Senior Securities	40

ITEM 4. Mine Safety Disclosures	40

ITEM 5. Other Information	40

ITEM 6. Exhibits	42

SIGNATURES	43

Table of Contents

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share data)


	September 30,		December 31,
	2023		2022
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	59,473	$	36,595
Short-term investments		406,389		486,728
Accounts receivable, net		42,626		43,858
Inventories		29,104		27,678
Prepaid expenses and other current assets		11,548		9,317
Total current assets		549,140		604,176
Property and equipment, net		74,520		63,603
Operating lease right-of-use assets		32,561		26,877
Intangible assets, net		192,962		191,009
Goodwill		148,954		151,117
Deposits		1,656		1,017
Deferred tax assets		863		947
Total assets	$	1,000,656	$	1,038,746

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and other accrued expenses	$	27,875	$	28,046
Accrued compensation and related expenses		10,426		8,458
Deferred revenue		1,580		439
Current portion of operating lease liabilities		4,759		3,720
Current portion of finance lease liabilities		195		128
Current portion of notes payable		70		60
Total current liabilities		44,905		40,851
Convertible senior notes, net of discount of $7.6 million and $10.1 million, respectively		377,955		406,708
Notes payable		307		355
Operating lease liabilities, net of current portion		29,757		24,721
Finance lease liabilities, net of current portion		632		216
Deferred tax liabilities		4,708		4,929
Other long-term liabilities		484		451
Contingent consideration		4,380		4,677
Total liabilities		463,128		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		24,275		18,275
Common stock, $0.001 par value; 100,000,000 shares authorized; 48,963,717 and 48,334,280 issued and outstanding at September 30, 2023 and December 31, 2022, respectively		49		48
Additional paid-in capital		1,127,335		1,114,896
Accumulated deficit		(580,030)		(542,832)
Accumulated other comprehensive loss		(34,101)		(34,549)
Total stockholders’ equity		537,528		555,838
Total liabilities and stockholders’ equity	$	1,000,656	$	1,038,746

See accompanying notes to condensed consolidated financial statements.

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,
	2023		2022		2023		2022
Service revenues	$	36,022	$	33,296	$	107,062	$	100,791
Product revenues		20,135		27,168		68,933		76,128
Total revenues		56,157		60,464		175,995		176,919

Cost of service revenues		20,803		18,913		59,887		56,742
Cost of product revenues		11,088		15,134		40,037		42,581
Total cost of revenues		31,891		34,047		99,924		99,323
Gross margin		24,266		26,417		76,071		77,596

Operating costs and expenses:
Selling, general and administrative		36,023		30,235		108,066		87,420
Engineering and development		5,152		3,985		13,291		11,045
Total operating costs and expenses		41,175		34,220		121,357		98,465

Loss from operations		(16,909)		(7,803)		(45,286)		(20,869)
Other income (expense):
Investment income		2,848		2,485		7,962		5,797
Interest expense		(1,357)		(1,609)		(4,197)		(4,686)
Gain on extinguishment of debt, net		5,679		—		5,679		—
Other income (expense), net		(3,059)		1,668		242		(7,377)
Total other income (expense), net		4,111		2,544		9,686		(6,266)
Loss before provision for income taxes		(12,798)		(5,259)		(35,600)		(27,135)
Provision for income taxes		(471)		(57)		(1,598)		(762)
Net loss	$	(13,269)	$	(5,316)	$	(37,198)	$	(27,897)
Paid-in-kind dividend on Series C convertible preferred stock		(2,000)		(2,000)		(6,000)		(6,000)
Net loss attributable to common stockholders	$	(15,269)	$	(7,316)	$	(43,198)	$	(33,897)
Net loss per share - basic and diluted	$	(0.31)	$	(0.15)	$	(0.89)	$	(0.69)
Weighted average shares outstanding – basic and diluted		48,904,102		48,520,696		48,660,646		49,148,558

See accompanying notes to condensed consolidated financial statements.

Table of Contents

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

(unaudited, in thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net loss	$	(13,269)	$	(5,316)	$	(37,198)	$	(27,897)
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on available-for-sale debt securities		624		(6,537)		3,076		(25,912)
Reclassification of realized loss on available-for-sale debt securities to earnings		758		—		1,389		46
Foreign currency translation adjustments		(995)		(7,215)		(4,017)		(15,819)
Other comprehensive income (loss)		387		(13,752)		448		(41,685)
Total comprehensive loss	$	(12,882)	$	(19,068)	$	(36,750)	$	(69,582)

See accompanying notes to condensed consolidated financial statements.

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 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 June 30, 2023	—	$	—	—	$	—	200,000	$	22,275	48,879,018	$	49	$	1,123,180	$	(566,761)	$	(34,488)	$	544,255
Net loss	—		—	—		—	—		—	—		—		—		(13,269)		—		(13,269)
Other comprehensive loss, net of taxes	—		—	—		—	—		—	—		—		—		—		387		387
Stock-based compensation expense	—		—	—		—	—		—	—		—		5,976		—		—		5,976
Paid-in-kind preferred stock dividend	—		—	—		—	—		2,000	—		—		(2,000)		—		—		—
Vesting of restricted stock units	—		—	—		—	—		—	12,499		—		—		—		—		—
Proceeds from exercise of stock options	—		—	—		—	—		—	72,200		—		179		—		—		179
Balance at September 30, 2023	—	$	—	—	$	—	200,000	$	24,275	48,963,717	$	49	$	1,127,335	$	(580,030)	$	(34,101)	$	537,528

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

Balance at December 31, 2022	—	$	—	—	$	—	200,000	$	18,275	48,334,280	$	48	$	1,114,896	$	(542,832)	$	(34,549)	$	555,838
Net loss	—		—	—		—	—		—	—		—		—		(37,198)		—		(37,198)
Other comprehensive income, net of taxes	—		—	—		—	—		—	—		—		—		—		448		448
Stock-based compensation expense	—		—	—		—	—		—	—		—		16,960		—		—		16,960
Paid-in-kind preferred stock dividend	—		—	—		—	—		6,000	—		—		(6,000)		—		—		—
Vesting of restricted stock units	—		—	—		—	—		—	221,623		—		—		—		—		—
Proceeds from exercise of stock options	—		—	—		—	—		—	407,814		1		1,479		—		—		1,480
Balance at September 30, 2023	—	$	—	—	$	—	200,000	$	24,275	48,963,717	$	49	$	1,127,335	$	(580,030)	$	(34,101)	$	537,528

See accompanying notes to condensed consolidated financial statements.

Table of Contents

Cryoport, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)



	For the Nine Months Ended
	September 30,
	2023		2022
Cash Flows From Operating Activities:
Net loss	$	(37,198)	$	(27,897)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		20,038		16,631
Amortization of debt discount		1,928		1,930
Non-cash operating lease expense		3,403		2,688
Unrealized (gain) loss on investments in equity securities		2,255		12,436
Realized loss on available-for-sale investments		62		113
Stock-based compensation expense		16,960		14,749
Loss on disposal of property and equipment		277		574
Gain on extinguishment of debt, net		(5,679)		—
Gain on insurance settlement		(2,642)		(4,815)
Change in credit losses		(135)		13
Excess and obsolete inventory		—		546
Insurance proceeds for operations		1,212		6,429
Change in contingent consideration		(205)		145
Changes in operating assets and liabilities:
Accounts receivable		1,088		(8,307)
Inventories		(1,572)		(11,179)
Prepaid expenses and other current assets		(2,298)		(1,419)
Deposits		(652)		9
Operating lease liabilities		(3,009)		(2,372)
Accounts payable and other accrued expenses		(36)		(3,172)
Accrued compensation and related expenses		2,013		(1,218)
Deferred revenue		1,141		(420)
Net deferred tax liability		(190)		(969)
Net cash used in operating activities		(3,239)		(5,505)

Cash Flows From Investing Activities:
Purchases of property and equipment		(27,212)		(14,250)
Insurance proceeds for loss of fixed assets		976		3,000
Software development costs		(4,830)		(965)
Purchases of short-term investments		—		(155,353)
Acquisitions		—		(6,554)
Sales/maturities of short-term investments		82,487		107,835
Patent and trademark costs		(616)		(518)
Net cash provided by (used in) investing activities		50,805		(66,805)

Cash Flows From Financing Activities:
Proceeds from exercise of stock options		1,480		1,596
Repurchase of common stock		—		(33,349)
Cash paid for repurchase of 2026 Senior Notes		(25,003)		—
Repayment of notes payable		(26)		(2,069)
Repayment of finance lease liabilities		(123)		(46)
Net cash used in financing activities		(23,672)		(33,868)
Effect of exchange rates on cash and cash equivalents		(1,016)		(2,199)
Net change in cash and cash equivalents		22,878		(108,377)
Cash and cash equivalents — beginning of period		36,595		139,101
Cash and cash equivalents — end of period	$	59,473	$	30,724

Supplemental Disclosure of Cash Flow Information:

Cash paid for interest	$	1,792	$	1,904

Cash paid for income taxes	$	951	$	1,276

Supplemental Disclosure of Non-Cash Financing Activities:
Operating lease right-of-use assets and operating lease liabilities	$	9,581	$	5,084

Net unrealized gain (loss) on available-for-sale debt securities	$	3,076	$	(25,912)

Reclassification of realized gain (loss) on available-for-sale debt securities to earnings	$	1,389	$	(46)

Form: 10-Q

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