CRYO CELL INTERNATIONAL INC

Previous wording

our future performance and operating results;

Current wording

performance and operating results;

Previous wording

the success of the Company's new facility and the expansion of the Company's cryopreservation and cold storage business by introducing a new service, Extravault;

Current wording

the success of the Company's initiative to purchase a new facility and expand the Company's cryopreservation and cold storage business by introducing a new service, Extravault,

Previous wording

As discussed further in Note 12, on February 23, 2021, the Company entered into a Patent and Technology License Agreement (the “Duke License Agreement”) with Duke University (“Duke”). The Duke License Agreement grants the Company certain rights to proprietary processes and regulatory data related to cord blood and cord tissue developed at Duke. Through the Duke License Agreement, the Company had anticipated, either directly or through its wholly-owned subsidiary, Celle Corp., exploring, testing, and administering treatments to patients for which there are limited U.S. Food and Drug Administration (“FDA”) approved therapies, including cerebral palsy and autism. These treatments were expected to utilize the unique immunomodulatory and potential regenerative properties derived from cord blood and cord tissue. Through the Duke License Agreement, the Company intended to develop three business units, namely: (1) its cord blood bank and other storage services (its historical business); (2) cord blood and cord tissue infusion clinic services services initially under the FDA’s Expanded Access Program and in conjunction with the undertaking of cord blood and cord tissue clinical trials to obtain biologics license application (“BLA”) approvals for new indications, and (3) biopharmaceutical manufacturing if BLA(s) were approved by the FDA. Additionally, to support such business expansion, the Company had anticipated opening and launching the Cryo-Cell Institute for Cellular Therapies, which it initially hoped to open as early as the fourth quarter of fiscal 2021, but no later than the first quarter of fiscal 2022 (and more recently reported as anticipated to open during the fourth quarter of fiscal 2024). As of the date hereof, the Company can make no assurances it will be able to expand its business into business units (2) and (3) above.

Current wording

As discussed further in Note 12, on February 23, 2021, the Company entered into a Patent and Technology License Agreement (the “Duke License Agreement”) with Duke University (“Duke”). The Duke License Agreement grants the Company certain rights to proprietary processes and regulatory data related to cord blood and cord tissue developed at Duke. Through the Duke License Agreement, the Company had anticipated, either directly or through its wholly-owned subsidiary, Celle Corp., exploring, testing, and administering treatments to patients for which there are limited U.S. Food and Drug Administration (“FDA”) approved therapies, including cerebral palsy and autism. These treatments were expected to utilize the unique immunomodulatory and potential regenerative properties derived from cord blood and cord tissue. Through the Duke License Agreement, the Company intended to develop three business units, namely: (1) its cord blood bank and other storage services (its historical business); (2) cord blood and cord tissue infusion clinic services initially under the FDA’s Expanded Access Program and in conjunction with the undertaking of cord blood and cord tissue clinical trials to obtain biologics license application (“BLA”) approvals for new indications, and (3) biopharmaceutical manufacturing if BLA(s) were approved by the FDA. Additionally, to support such business expansion, the Company had anticipated opening and launching the Cryo-Cell Institute for Cellular Therapies, which it initially hoped to open as early as the fourth quarter of fiscal 2021, but no later than the first quarter of fiscal 2022 (and more recently reported as anticipated to open during the fourth quarter of fiscal 2024). As discussed further in Note 12, the Company has received from Duke a notice of termination of the License Agreement as of May 17, 2025. As of the date hereof, it is unlikely that the Company will be able to expand its business into business units (2) and (3) above through the Duke License Agreement.

Previous wording

Until the Duke dispute is resolved, the Company does not anticipate making further investments (other than the completion of a comparability study estimated to cost less than $350,000 in additional capital) in activities related to the Duke License Agreement. The opening of the Cryo-Cell Institute for Cellular Therapies is also on pause and the Company can make no assurances as to when it will be opened. Additionally, the proposed spinoff of Celle Corp. is also on hold and may not take place depending on the final outcome of the Duke dispute. See, “Risk Factors”.

Current wording

Until the Duke dispute is resolved, the Company does not anticipate making further investments (other than the completion of a comparability study estimated to cost less than $350,000 in additional capital) in activities related to the Duke License Agreement. The opening of the Cryo-Cell Institute for Cellular Therapies is also on pause and the Company can make no assurances as to when or if it will be opened. Additionally, the proposed spinoff of Celle Corp. is also on hold and may not take place depending on the final outcome of the Duke dispute. See, “Risk Factors” and Note 12 for additional information regarding Duke.

Previous wording

Stem cells are found in umbilical cord blood (“cord blood stem cells”) and can be collected and stored after a baby is born. Over 50,000 cord blood stem cell transplants have been performed to date. The Company believes that many parents will want to save and store these cells for potential future use by their family, either for the donor or for another family member. Today, stem cell transplants are known and accepted treatments for approximately 80 diseases, we believe, a number of them life-threatening. With continued research in this area of medical technology, other therapeutic uses for cord blood stem cells are being explored. Moreover, researchers believe they may be utilized in the future for treating diseases that currently have no cure.

Current wording

Stem cells are found in umbilical cord blood (“cord blood stem cells”) and can be collected and stored after a baby is born. Over 50,000 cord blood stem cell transplants have been performed to date. The Company believes that many parents will want to save and store these cells for potential future use by their family, either for the donor or for another family member. Today, stem cell transplants are known and accepted treatments for at least 78 diseases, we believe, a number of them life-threatening. With continued research in this area of medical technology, other therapeutic uses for cord blood stem cells are being explored. Moreover, researchers believe they may be utilized in the future for treating diseases that currently have no cure.

Previous wording

It is the Company’s mission to inform expectant parents and their prenatal care providers of the potential medical benefits from preserving stem cells and to provide them the means and processes for collection and storage of these cells. A vast majority of expectant parents are simply unaware that umbilical cord blood contains a rich supply of non-controversial stem cells and that they can be collected, processed and stored for the potential future use of the newborn and possibly related family members. A baby’s stem cells are a perfect match for the baby throughout its life and have a 1-in-4 chance of being a perfect match and a 3-in-4 chance of being an acceptable match for a sibling. There is no assurance, however, that a perfect match means the cells could be used to treat certain diseases of the newborn or a relative.

Current wording

It is the Company’s mission to inform expectant parents and their prenatal care providers of the potential medical benefits from preserving stem cells and to provide them the means and processes for collection and storage of these cells. A vast majority of expectant parents are simply unaware that umbilical cord blood contains a rich supply of non-controversial stem cells and that they can be collected, processed and stored for the potential future use of the newborn and possibly related family members. A baby’s stem cells are a perfect match for the baby throughout its life and have a 1-in-4 chance of being a perfect match and a 3-in-4 chance of being an acceptable match for a sibling. There is no assurance, however, that a perfect match means the cells could be used to treat certain diseases of the newborn or a relative. Today, it is still common for the cord blood (the blood remaining in the umbilical cord and placenta) to be discarded at the time of birth as medical waste.

Previous wording

Despite the potential benefits of umbilical cord blood stem cell preservation, the number of parents of newborns participating in stem cell preservation is still relatively small compared to the number of births (four million per annum) in the United States. Today, it is still common for the cord blood (the blood remaining in the umbilical cord and placenta) to be discarded at the time of birth as medical waste. Some reasons for this low level of market penetration are the misperception of the high cost of stem cell storage and a general lack of awareness of the benefits of stem cell preservation programs. However, evolving medical technology could significantly increase the utilization of the umbilical cord blood for transplantation and/or other types of treatments. The Company believes it offers the highest quality, highest value service targeted to a broad base of the market. We intend to maximize our growth potential through our superior quality, value-driven competitive leadership position, product differentiation, an embedded client base, increased public awareness and accelerated market penetration.

Current wording

Despite the potential benefits of umbilical cord blood stem cell preservation, the number of parents of newborns participating in stem cell preservation is still relatively small compared to the number of births (four million per annum) in the United States. Some reasons for this low level of market penetration are the misperception of the high cost of stem cell storage and a general lack of awareness of the benefits of stem cell preservation programs. However, evolving medical technology could significantly increase the utilization of the umbilical cord blood for transplantation and/or other types of treatments. The Company believes it offers the highest quality, highest value service targeted to a broad base of the market. We intend to maximize our growth potential through our superior quality, value-driven competitive leadership position, product differentiation, an embedded client base, increased public awareness and accelerated market penetration.

Previous wording

We are a Delaware corporation that was incorporated in 1989. Our executive offices are located at 700 Brooker Creek Blvd, Suite 1800, Oldsmar, Florida 34677 and our telephone number at such office is (813) 749-2100. Our website address ishttps://www.cryo-cell.com. Information contained on our website is not deemed part of this quarterly report.

Current wording

We are a Delaware corporation that was incorporated in 1989. Our executive offices are located at 700 Brooker Creek Blvd, Suite 1800, Oldsmar, Florida 34677 and our telephone number at such office is (813) 749-2100. Our website address ishttps://www.cryo-cell.com. Information contained on our website is not deemed part of this report.

Previous wording

Processing and Storage Fees. For the three months ended February 28, 2025, processing and storage fees were $7,865,888 compared to $7,805,522 for the three months ended February 29, 2024. Processing and storage fee revenue is attributable to a 4% increase in recurring annual storage fee revenue offset by a 12% decrease in the number of new domestic cord blood specimens processed for the three months ended February 28, 2025 versus the three months ended February 29, 2024.

Current wording

Processing and Storage Fees. For six months ended May 31, 2025 and May 31, 2024 processing and storage fees were $15,737,607 and $15,771,022, respectively. The decrease in processing and storage fee revenue is attributable to a 4% increase in recurring annual storage fee revenue offset by a 15% decrease in the number of new domestic cord blood specimens processed in the first six months of fiscal 2025 versus the same period in 2024.

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Product Revenue. For the three months ended February 28, 2025, revenue from the product sales was $20,913 compared to $3,000 for the three months ended February 29, 2024.

Current wording

Product Revenue. For the three months ended May 31, 2025, revenue from the product sales was $14,436 compared to $35,834 for the three months ended May 31, 2024.

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Public Cord Blood Banking Revenue. For the three months ended February 28, 2025, revenue from the public cord blood banking sales was $82,079 compared to $43,713 for the three months ended February 29, 2024.

Current wording

Public Cord Blood Banking Revenue. For the three months ended May 31, 2025, revenue from the public cord blood banking sales was $42,688 compared to $41,477 for the three months ended May 31, 2024.

Previous wording

Cost of Sales. Cost of sales for the three months ended February 28, 2025 was $1,984,588 as compared to $2,066,371 for the same period in 2024, representing a 4% decrease. Cost of sales includes wages and supplies associated with process enhancements to the existing production procedures and quality systems in the processing of cord blood specimens at the Company’s facility in Oldsmar, Florida and depreciation expense of approximately $31,000 and $31,000 for the three months ended February 28, 2025 and February 29, 2024, respectively. Cost of Sales also includes $6,959 and $25,483 for the three months ended February 28, 2025 and February 29, 2024, respectively, related to the costs associated with production of the PrepaCyte®-CB processing and storage system. Also included in Cost of Sales is $275,994 and $250,419 for the three months ended February 28, 2025 and February 29, 2024, respectively, related to the public banks.

Current wording

Cost of Sales. Cost of sales for the three months ended May 31, 2025 was $1,856,539 as compared to $2,024,750 for the same period in 2024, representing an 8% decrease. Cost of sales includes wages and supplies associated with process enhancements to the existing production procedures and quality systems in the processing of cord blood specimens at the Company’s facility in Oldsmar, Florida and depreciation expense of approximately $35,000 and $29,000 for the three months ended May 31, 2025 and May 31, 2024, respectively. Cost of Sales also includes $4,283 and $10,380 for the three months ended May 31, 2025 and May 31, 2024, respectively, related to the costs associated with production of the PrepaCyte®-CB processing and storage system. Also included in Cost of Sales is $200,148 and $183,917 for the three months ended May 31, 2025 and May 31, 2024, respectively, related to the public banks.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three months ended February 28, 2025 were $4,638,285 as compared to $4,428,566 for the 2024 period representing a 5% increase. These expenses are primarily comprised of selling and marketing expenses, salaries and wages for personnel and professional fees.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three months ended May 31, 2025 were $4,257,857 as compared to $4,017,660 for the 2024 period representing a 6% increase. These expenses are primarily comprised of selling and marketing expenses, salaries and wages for personnel and professional fees.

Previous wording

Research, Development and Related Engineering Expenses. Research, development and related engineering expenses for the three months ended February 28, 2025 were $98,143 as compared to $502,889 for the 2024 period of which $0 and $162,221, respectively, related to the Clinical Study and Research Agreement with Duke University to provide funding to complete the Duke IMPACT Study (See Note 12) and $0 and $94,099, respectively, related to clinical trial expenses related to the Company's Master Services Agreement with Emmes (See Note 12).

Current wording

Research, Development and Related Engineering Expenses. Research, development and related engineering expenses for the three months ended May 31, 2025 were $131,711 as compared to $241,085 for the 2024 period of which $0 and $108,147, respectively, related to the Clinical Study and Research Agreement with Duke University to provide funding to complete the Duke IMPACT Study (See Note 12) and $0 and $87,849, respectively, related to clinical trial expenses related to the Company's Master Services Agreement with Emmes (See Note 12).

Previous wording

Depreciation and Amortization. Depreciation and amortization (not included in Cost of Sales) for the three months ended February 28, 2025 was $191,853 compared to $33,186 for the 2024 period. The increase in depreciation and amortization for the three months ended February 28, 2025 was due to the Company's building in Durham, NC.

Current wording

Depreciation and Amortization. Depreciation and amortization (not included in Cost of Sales) for the three months ended May 31, 2025 was $190,102 compared to $59,798 for the 2024 period. The increase in depreciation and amortization for the three months ended May 31, 2025 was due to the Company's building in Durham, NC.

Previous wording

Interest Expense. Interest expense during the three months ended February 28, 2025, was $494,962 compared to $256,459 during the comparable period in 2024, of which, $228,247 and $0, respectively, related to the credit and subordination agreement with Susser Bank as described in Note 5. Interest expense also includes of $263,152 and $254,550 as of the three months ended February 28, 2025 and February 29, 2024, respectively, for amounts due to the parties to the Company’s revenue sharing agreements based on the

Current wording

Interest Expense. Interest expense during the three months ended May 31, 2025, was $551,126 compared to $329,273 during the comparable period in 2024, of which, $244,373 and $257,864, respectively, related to the credit and subordination agreements with Susser Bank as described in Note 5. Interest expense also includes of $304,030 and $280,197 as of the three months ended May 31, 2025 and May 31, 2024, respectively, for amounts due to the parties to the Company’s revenue sharing agreements based on the Company’s storage revenue collected. During the three months ended May 31, 2024, the Company capitalized interest expense of $210,700 related to the construction of the Company's new facility in North Carolina.

Previous wording

Loss on Interest Rate Swap. Loss on the change in the fair value of a derivative for the three months ended February 28, 2025 was $0 versus $45,288 for the three months ended February 29, 2024. The fair value is based on prevailing market data and derived from proprietary models based on well recognized financial principles and reasonable estimates about relevant future market conditions.

Current wording

Gain on Interest Rate Swap. Gain on the change in the fair value of a derivative for the three months ended May 31, 2025 was $0. Gain on the change in the fair value of a derivative for the three months ended May 31, 2024 was $151,175. The fair value is based on prevailing market data and derived from proprietary models based on well recognized financial principles and reasonable estimates about relevant future market conditions.

Previous wording

Income Taxes. U.S. income tax expense for the three months ended February 28, 2025 was $250,863 compared to $238,269 for the three months ended February 29, 2024.

Current wording

Income Taxes. U.S. income tax expense for the three months ended May 31, 2025 was $219,318 compared to $816,390 for the three months ended May 31, 2024.

Previous wording

At February 28, 2025, the Company had cash and cash equivalents of $223,122 as compared to $560,960 at November 30, 2024. The decrease in cash and cash equivalents during the three months ended February 28, 2025 was primarily attributable to the following:

Current wording

At May 31, 2025, the Company had cash and cash equivalents of $137,491 as compared to $560,960 at November 30, 2024. The decrease in cash and cash equivalents during the six months ended May 31, 2025 was primarily attributable to the following:

Previous wording

Net cash provided by operating activities for the three months ended February 28, 2025 was $954,063, which was attributable to the Company’s operating activities.

Current wording

Net cash provided by operating activities for the six months ended May 31, 2025 was $1,661,077 which was attributable to the Company’s operating activities.

Previous wording

Net cash used in operating activities for the three months ended February 29, 2024 was $356,865, which was attributable to the Company’s operating activities.

Current wording

Net cash provided by operating activities for the six months ended May 31, 2024 was $1,416,616 which was attributable to the Company’s operating activities.

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Net cash used in investing activities for the three months ended February 29, 2024 was $341,049 which was primarily attributable to $457,722 used to purchase equipment and $743,811 used to purchase marketable securities, which was offset by the sale of marketable securities in the amount of $860,484.

Current wording

Net cash used in investing activities for the six months ended May 31, 2025 was $1,790,284 which was primarily attributable to $124,461 used to purchase equipment and $2,574,249 used to purchase marketable securities, which was offset by the sale of marketable securities in the amount of 793,426 and the sale of equipment in the amount of $115,000.

Previous wording

Net cash used in investing activities for the three months ended February 28, 2025 was $287,484 which was primarily attributable to $62,053 used to purchase equipment and $599,611 used to purchase marketable securities, which was offset by the sale of marketable securities in the amount of $374,180.

Current wording

Net cash used in investing activities for the six months ended May 31, 2024 was $3,095,647 which was primarily attributable to $2,209,654 used to purchase equipment and $854,869 used to purchase marketable securities, which was offset by the sale of marketable securities in the amount of $902,210.

Previous wording

Net cash used in financing activities for the three months ended February 28, 2025 was $1,004,417 which was primarily attributable to the proceeds received from the line of credit with Susser Bank described above in the amount of $2,800,000, which were offset by payments of $1,783,878 to partially repay the Susser note payable and line of credit described above and $2,020,539 used to pay a cash dividend of $0.25 per share of common stock to the Company's shareholders of record on February 14, 2025. The dividend was paid on February 28, 2025.

Current wording

Net cash used in financing activities for the six months ended May 31, 2025 was $294,262 which was primarily attributable to the proceeds received from the line of credit with Susser Bank described above in the amount of $6,800,000, which were offset by payments of $3,774,416 to partially repay the Susser Bank note payable and line of credit described above, $88,619 used to repurchase the Company's common stock and $3,231,227 used to pay cash dividends of $0.15 and $0.25 per share of common stock to the Company's shareholders of record on May 21, 2025 and February 14, 2025, respectively. The dividends were paid on May 30, 2025 and February 28, 2025, respectively.

Previous wording

Net cash provided by financing activities for the three months ended February 29, 2024 was $538,959 which was primarily attributable to the proceeds received from the line of credit with Susser Bank described above in the amount of

Current wording

Net cash provided by financing activities for the six months ended May 31, 2024 was $1,742,159 which was primarily attributable to the proceeds received from the line of credit with Susser Bank described above in the amount of $3,200,000, which were offset by payments of $278,370 to partially repay the Susser Bank note payable and line of credit described above and $1,407,471 used to repurchase the Company's common stock.

Previous wording

The Company has a revolving line of credit, described above. The balance as of February 28, 2025 is $4,570,000 and is reflected on the accompanying balance sheet.

Current wording

The Company has a revolving line of credit, described above. The balance as of May 31, 2025 is $6,620,000 and is reflected on the accompanying balance sheet.

Previous wording

As result of the Company’s Arbitration Demand against Duke, the Company currently is unable to predict its funding needs for activities related to the Duke License Agreement. Until the Duke dispute is resolved, the Company does not anticipate making further investments (other than the completion of a comparability study estimated to cost less than $350,000 in additional capital) in activities related to the Duke License Agreement. The opening of the Cryo-Cell Institute for Cellular Therapies is also on pause and the Company can make no assurances as to when it will be opened. Additionally, the proposed spinoff of Celle Corp. is also on hold and may not take place depending on the final outcome of the Duke dispute.

Current wording

As a result of the Company’s Arbitration Demand against Duke, the Company currently is unable to predict its funding needs for activities related to the Duke License Agreement. Until the Duke dispute is resolved, the Company does not anticipate making further investments (other than the completion of a comparability study estimated to cost less than $350,000 in additional capital) in activities related to the Duke License Agreement. As discussed further in Note 12, the Company has received from Duke a notice of termination of the License Agreement as of May 17, 2025. The opening of the Cryo-Cell Institute for Cellular Therapies is also on pause and the Company can make no assurances as to when or if it will be opened. Additionally, the proposed spinoff of Celle Corp. is also on hold and may not take place depending on the final outcome of the Duke dispute. See “Risk Factors” and Note 12 for additional information regarding Duke.