10-Q: Quarterly report pursuant to Section 13 or 15(d)
Published on November 9, 2023
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of |
(I.R.S. Employer |
(Address of principal executive offices, including zip code)
(
(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: |
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Trading Symbol(s) |
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Name of each exchange on which registered: |
The |
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.
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).
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. ☐
☒ |
Accelerated filer |
☐ |
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Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
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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
As of November 3, 2023 there were
TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION |
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ITEM 1. Financial Statements |
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Condensed Consolidated Balance Sheets at September 30, 2023 (Unaudited) and December 31, 2022 |
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4 |
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5 |
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6 |
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7 |
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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 |
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Cryoport, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share data)
September 30, |
December 31, |
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2023 |
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2022 |
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(unaudited) |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
$ |
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$ |
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Short-term investments |
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Accounts receivable, net |
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Inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use assets |
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Intangible assets, net |
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Goodwill |
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Deposits |
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Deferred tax assets |
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Total assets |
$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current Liabilities: |
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Accounts payable and other accrued expenses |
$ |
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$ |
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Accrued compensation and related expenses |
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Deferred revenue |
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Current portion of operating lease liabilities |
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Current portion of finance lease liabilities |
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Current portion of notes payable |
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Total current liabilities |
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Convertible senior notes, net of discount of $ |
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Notes payable |
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Operating lease liabilities, net of current portion |
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Finance lease liabilities, net of current portion |
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Deferred tax liabilities |
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Other long-term liabilities |
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Contingent consideration |
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Total liabilities |
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Commitments and contingencies |
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Stockholders’ Equity: |
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Preferred stock, $ |
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Class A convertible preferred stock - $ |
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— |
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— |
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Class B convertible preferred stock - $ |
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— |
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— |
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Class C convertible preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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( |
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Accumulated other comprehensive loss |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ |
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$ |
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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 |
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September 30, |
September 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Service revenues |
$ |
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$ |
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$ |
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$ |
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Product revenues |
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Total revenues |
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Cost of service revenues |
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Cost of product revenues |
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Total cost of revenues |
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Gross margin |
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Operating costs and expenses: |
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Selling, general and administrative |
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Engineering and development |
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Total operating costs and expenses |
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Loss from operations |
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( |
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( |
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( |
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( |
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Other income (expense): |
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Investment income |
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Interest expense |
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( |
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( |
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( |
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( |
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Gain on extinguishment of debt, net |
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— |
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— |
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Other income (expense), net |
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( |
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( |
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Total other income (expense), net |
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( |
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Loss before provision for income taxes |
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( |
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( |
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( |
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( |
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Provision for income taxes |
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( |
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( |
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( |
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( |
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Net loss |
$ |
( |
$ |
( |
$ |
( |
$ |
( |
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Paid-in-kind dividend on Series C convertible preferred stock |
( |
( |
( |
( |
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Net loss attributable to common stockholders |
$ |
( |
$ |
( |
$ |
( |
$ |
( |
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Net loss per share - basic and diluted |
$ |
( |
$ |
( |
$ |
( |
$ |
( |
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Weighted average shares outstanding – basic and diluted |
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See accompanying notes to condensed consolidated financial statements.
4
Cryoport, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Loss
(unaudited, in thousands)
Three Months Ended |
Nine Months Ended |
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September 30, |
September 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Net loss |
$ |
( |
$ |
( |
$ |
( |
$ |
( |
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Other comprehensive income (loss), net of tax: |
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Net unrealized gain (loss) on available-for-sale debt securities |
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( |
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( |
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Reclassification of realized loss on available-for-sale debt securities to earnings |
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— |
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Foreign currency translation adjustments |
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( |
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( |
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( |
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( |
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Other comprehensive income (loss) |
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( |
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( |
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Total comprehensive loss |
$ |
( |
$ |
( |
$ |
( |
$ |
( |
See accompanying notes to condensed consolidated financial statements.
5
Cryoport, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
(In thousands, except share data)
(unaudited)
Class A |
Class B |
Class C |
Other |
Total |
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Preferred Stock |
Preferred Stock |
Preferred Stock |
Common Stock |
Additional |
Accumulated |
Comprehensive |
Stockholders’ |
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Shares |
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Amount |
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Shares |
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Amount |
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Shares |
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Amount |
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Shares |
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Amount |
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Paid–In Capital |
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Deficit |
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Loss |
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Equity (Deficit) |
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Balance at June 30, 2022 |
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— |
$ |
— |
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— |
$ |
— |
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$ |
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$ |
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$ |
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$ |
( |
$ |
( |
$ |
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||||||||||
Net loss |
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— |
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— |
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— |
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— |
— |
— |
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— |
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— |
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— |
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( |
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— |
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( |
||||||||||
Other comprehensive loss, net of taxes |
|
— |
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— |
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— |
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— |
— |
— |
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— |
|
— |
|
— |
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— |
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( |
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( |
||||||||||
Stock-based compensation expense |
|
— |
|
— |
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— |
|
— |
— |
— |
|
— |
|
— |
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— |
|
— |
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|
||||||||||
Paid-in-kind preferred stock dividend |
— |
— |
— |
— |
— |
|
— |
— |
( |
— |
— |
— |
||||||||||||||||||||
Vesting of restricted stock units |
— |
— |
— |
— |
— |
— |
|
— |
— |
— |
— |
— |
||||||||||||||||||||
Proceeds from exercise of stock options |
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— |
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— |
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— |
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— |
— |
— |
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— |
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— |
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— |
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||||||||||
Balance at September 30, 2022 |
— |
$ |
— |
— |
$ |
— |
|
$ |
|
|
$ |
|
$ |
|
$ |
( |
$ |
( |
$ |
|
||||||||||||
Balance at June 30, 2023 |
|
— |
$ |
— |
|
— |
$ |
— |
|
$ |
|
|
|
$ |
|
$ |
|
$ |
( |
$ |
( |
$ |
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|||||||||
Net loss |
|
— |
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— |
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— |
|
— |
— |
— |
|
— |
|
— |
|
— |
|
( |
|
— |
|
( |
||||||||||
Other comprehensive loss, net of taxes |
|
— |
|
— |
|
— |
|
— |
— |
— |
|
— |
|
— |
|
— |
|
— |
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||||||||||
Stock-based compensation expense |
|
— |
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— |
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— |
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— |
— |
— |
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— |
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— |
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— |
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— |
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||||||||||
Paid-in-kind preferred stock dividend |
|
— |
|
— |
|
— |
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— |
— |
|
|
— |
|
— |
|
( |
|
— |
|
— |
|
— |
||||||||||
Vesting of restricted stock units |
— |
— |
— |
— |
— |
— |
|
— |
— |
— |
— |
— |
||||||||||||||||||||
Proceeds from exercise of stock options |
|
— |
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— |
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— |
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— |
— |
— |
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— |
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— |
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— |
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||||||||||
Balance at September 30, 2023 |
— |
$ |
— |
— |
$ |
— |
|
$ |
|
|
$ |
|
$ |
|
$ |
( |
$ |
( |
$ |
|
||||||||||||
Balance at December 31, 2021 |
|
— |
$ |
— |
|
— |
$ |
— |
|
$ |
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|
|
$ |
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$ |
|
$ |
( |
$ |
( |
$ |
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|||||||||
Net loss |
|
— |
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— |
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— |
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— |
— |
— |
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— |
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— |
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— |
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( |
|
— |
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( |
||||||||||
Other comprehensive loss, net of taxes |
|
— |
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— |
|
— |
|
— |
— |
— |
|
— |
|
— |
|
— |
|
— |
|
( |
|
( |
||||||||||
Stock-based compensation expense |
|
— |
|
— |
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— |
|
— |
— |
— |
|
— |
|
— |
|
|
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— |
|
— |
|
|
||||||||||
Paid-in-kind preferred stock dividend |
— |
— |
— |
— |
— |
|
— |
— |
( |
— |
— |
— |
||||||||||||||||||||
Issuance of common stock for Cell&Co acquisition |
— |
— |
— |
— |
— |
— |
|
— |
|
— |
— |
|
||||||||||||||||||||
Repurchase of common stock |
— |
— |
— |
— |
— |
— |
( |
( |
( |
( |
— |
( |
||||||||||||||||||||
Vesting of restricted stock units |
|
— |
|
— |
|
— |
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— |
— |
— |
|
|
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— |
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— |
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— |
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— |
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— |
||||||||||
Proceeds from exercise of stock options |
— |
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— |
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— |
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— |
— |
— |
|
|
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— |
|
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— |
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— |
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|||||||||||
Balance at September 30, 2022 |
— |
$ |
— |
|
— |
$ |
— |
|
$ |
|
|
|
$ |
|
$ |
|
$ |
( |
$ |
( |
$ |
|
||||||||||
Balance at December 31, 2022 |
|
— |
$ |
— |
|
— |
$ |
— |
|
$ |
|
|
|
$ |
|
$ |
|
$ |
( |
$ |
( |
$ |
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|||||||||
Net loss |
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— |
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— |
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— |
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— |
— |
— |
|
— |
|
— |
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— |
|
( |
|
— |
|
( |
||||||||||
Other comprehensive income, net of taxes |
|
— |
|
— |
|
— |
|
— |
— |
— |
|
— |
|
— |
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— |
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— |
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||||||||||
Stock-based compensation expense |
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— |
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— |
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— |
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— |
— |
— |
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— |
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— |
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— |
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— |
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||||||||||
Paid-in-kind preferred stock dividend |
— |
— |
— |
— |
— |
|
— |
— |
( |
— |
— |
— |
||||||||||||||||||||
Vesting of restricted stock units |
|
— |
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— |
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— |
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— |
— |
— |
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— |
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— |
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— |
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— |
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— |
||||||||||
Proceeds from exercise of stock options |
— |
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— |
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— |
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— |
— |
— |
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— |
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— |
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Balance at September 30, 2023 |
— |
$ |
— |
|
— |
$ |
— |
|
$ |
|
|
|
$ |
|
$ |
|
$ |
( |
$ |
( |
$ |
|
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, |
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2023 |
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2022 |
|||
Cash Flows From Operating Activities: |
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Net loss |
$ |
( |
$ |
( |
||
Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Amortization of debt discount |
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Non-cash operating lease expense |
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Unrealized (gain) loss on investments in equity securities |
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Realized loss on available-for-sale investments |
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Stock-based compensation expense |
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Loss on disposal of property and equipment |
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Gain on extinguishment of debt, net |
( |
— |
||||
Gain on insurance settlement |
|
( |
|
( |
||
Change in credit losses |
( |
|
||||
Excess and obsolete inventory |
— |
|
||||
Insurance proceeds for operations |
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||||
Change in contingent consideration |
( |
|
||||
Changes in operating assets and liabilities: |
||||||
Accounts receivable |
|
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( |
||
Inventories |
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( |
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( |
||
Prepaid expenses and other current assets |
|
( |
|
( |
||
Deposits |
|
( |
|
|
||
Operating lease liabilities |
( |
( |
||||
Accounts payable and other accrued expenses |
|
( |
|
( |
||
Accrued compensation and related expenses |
|
|
|
( |
||
Deferred revenue |
|
|
|
( |
||
Net deferred tax liability |
( |
( |
||||
Net cash used in operating activities |
|
( |
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( |
||
|
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|
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Cash Flows From Investing Activities: |
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|
|||
Purchases of property and equipment |
|
( |
|
( |
||
Insurance proceeds for loss of fixed assets |
|
|
||||
Software development costs |
( |
( |
||||
Purchases of short-term investments |
— |
( |
||||
Acquisitions |
— |
( |
||||
Sales/maturities of short-term investments |
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||
Patent and trademark costs |
( |
( |
||||
Net cash provided by (used in) investing activities |
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( |
||
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Cash Flows From Financing Activities: |
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|||
Proceeds from exercise of stock options |
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|
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|
||
Repurchase of common stock |
— |
( |
||||
Cash paid for repurchase of 2026 Senior Notes |
( |
— |
||||
Repayment of notes payable |
( |
( |
||||
Repayment of finance lease liabilities |
( |
( |
||||
Net cash used in financing activities |
|
( |
|
( |
||
Effect of exchange rates on cash and cash equivalents |
|
( |
|
( |
||
Net change in cash and cash equivalents |
|
( |
||||
Cash and cash equivalents — beginning of period |
|
|
|
|
||
Cash and cash equivalents — end of period |
$ |
|
$ |
|
||
Supplemental Disclosure of Cash Flow Information: |
||||||
Cash paid for interest |
$ |
|
$ |
|
||
Cash paid for income taxes |
$ |
|
$ |
|
||
Supplemental Disclosure of Non-Cash Financing Activities: |
||||||
Operating lease right-of-use assets and operating lease liabilities |
$ |
|
$ |
|
||
Net unrealized gain (loss) on available-for-sale debt securities |
$ |
|
$ |
( |
||
Reclassification of realized gain (loss) on available-for-sale debt securities to earnings |
$ |
|
$ |
( |
||