Celularity Inc
For the period ended Dec 31, 2025. Filed Apr 30, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Apr 30, 2026
CELU$0.76+4.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-05-08.
0001641172-25-009319
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-04-30.
0001493152-26-020424
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 92 previous paragraphs and 97 current paragraphs.
35 unchanged; 18 reworded; 42 added; 39 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 4 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (42)
Current report
We are a cellular and regenerative medicine company focused on advancing health longevity and redefining the standard of care for age-related disease using novel therapies derived from the postpartum human placenta. The objective of extending health longevity is to meaningfully reduce the duration and severity in which an individual experiences aging-related degenerative diseases and disorders associated with increased mortality towards the end of life. Aging is known to be a major risk factor for many degenerative disorders and diseases across multiple high-value therapeutic areas, including immunology and regenerative medicine. Common to all degenerative disorders and diseases is the progressive loss of function or structure (or both) of affected tissues and organs driven by underlying cellular dysfunction. These processes directly impact regenerative capacity, healthspan and overall lifespan. Likewise, age-associated immunosenescence and other physiological changes contribute to increased vulnerability to infections. Infections further exacerbate aging-related decline and are increasingly associated with frailty and adverse clinical outcomes.
Current report
Aging and longevity are determined by a complex combination of genetic, nongenetic, and environmental factors. While aging is not itself a disease, it increases vulnerability to disease and is among the most important known risk factors for most chronic diseases. For example, aging is a primary driver of cancer and other chronic conditions. The accumulation of senescent cellsin aged tissues is suggested to be a key factor underlying age related cancer. Likewise, age is a key risk factor for autoimmune disease, and many autoimmune diseases preferentially occur in the second half of adulthood as immune function declines. These processes are increasingly linked to age-related immune dysregulation.
Current report
Aging is associated with a progressive degeneration of tissues, resulting in significant impairment on the structure and function of vital organs. Chronic, low-grade systemic inflammation often referred to as “inflammaging” is characterized by higher levels of circulating pro-inflammatory cytokines driven by cellular damage and senescent cell accumulation. Senescent cells contribute to disease progression by limiting the regenerative capacity of tissue stem cells and inducing the accumulation of cellular damage.
Current report
There is a close relationship between inflammation and cellular senescence, a process in which cells lose their ability to divide and function properly, and cellular senescence has been described as a link between cancer and age-related degenerative disease. These cells promote inflammation through well-characterized signaling pathways, including NF-κB activation. In younger organisms, cellular senescence prevents the proliferation of damaged cells. With aging, impaired clearance leads to accumulation of these cells, contributing to disease and tissue dysfunction. Stem cell exhaustion also contributes to aging by reducing the regenerative potential of tissues and limits tissue repair capacity. We believe these processes may be modulated by increasing the number and quality of stem cells in order to restore tissues’ regenerative power. Aging is also associated with immunosenescence, or the immune dysfunction that occurs with age and contributes to increased susceptibility to infection and possibly autoimmune disease and cancer. We believe immune function may be improved by increasing the number and the quality of immune cells like natural killer or NK cells and naive T cells that improve immune rejuvenation and repair function in damaged tissues.
Current report
We believe the development of effective therapies against the degenerative processes (including aging-ameliorating preventive therapies) that underlie aging-related diseases and disease complications and susceptibilities will be central to the extension of health longevity. By harnessing the placenta’s unique biology and ready availability, we may be able to develop therapeutic solutions that address a significant unmet global need for effective, accessible, and affordable therapeutics to promote health longevity. To this end, we are developing a pipeline of off-the-shelf placental-derived allogeneic cellular therapy product candidates such as, human placental-derived stems cells and MLASCs, including cenplacel-L. These therapeutic candidates have the potential to target indications across multiple age-related degenerative diseases and conditions, including immune and infectious disease and cancer.
Current report
Specifically, we are developing a differentiated portfolio of off-the-shelf, placental-derived allogeneic cellular therapies and advanced biomaterial products for the treatment of degenerative disorders and diseases including those associated with aging. Our cellular therapy candidates are designed to address core biological drivers of aging, including stem cell exhaustion and cellular senescence. One of our MLASCs candidates, cenplacel-L, has demonstrated encouraging clinical data in Phase 1 and Phase 2 studies, and we are selectively advancing programs with a focus on longevity applications.
Current report
We also develop and market commercial-stage, off-the-shelf placental-derived biomaterial products, including allografts and connective tissue matrices for use in soft tissue repair and reconstructive procedures addressing a broad range of degenerative and surgical indications. We are actively expanding our biomaterials pipeline and advancing multiple product candidates toward regulatory submission. Our currently marketed advanced biomaterial products include:
Current report
In addition to our cell therapy candidates, and commercial-stage biomaterial products, we actively pursue revenue-generating opportunities that leverage our core expertise in cellular therapeutic development and manufacturing by providing contract manufacturing and development services to third parties. These services are designed to accelerate translational and clinical development while addressing key industry challenges, including process variability, supply chain constraints and scalability limitations.. Likewise, our biomaterial contract manufacturing and development services enable scalable production across both early-stage and commercial volumes. Leveraging over three decades of experience in human tissue procurement and biobanking, we maintain a reliable supply of cryopreserved placental tissue procured from informed consent donors, enabling on-demand conversion into finished biomaterial products and addressing the structural inefficiencies inherent to most tissue supply chains.
Current report
Our Celularity IMPACT (IMmunomodulatoryPlacenta-derivedAllogeneicCellularTherapy) platform is designed to harness the unique biological advantages of placenta-derived cells to address multiple disease areas through a fully integrated, end-to-end platform, from biosourcing postpartum placentas from informed consent donors through manufacturing cryopreserved and packaged allogeneic cells in our purpose-built U.S.-based 147,215 square foot facility. We believe placental-derived cells offer distinct scientific and economic advantages. First, relative to adult-derived cells, placental-derived cells demonstrate greater stemness, meaning the ability to expand and persist. Second, placental-derived cells are immunologically naïve, meaning the cells have never been exposed to a specific antigen, which may translate into improved tolerability and reduced risk of graft-versus-host disease. Third, our placental-derived cells are allogeneic, meaning they are intended for use in any patient, as compared to autologous cells, which are derived from an individual patient for that patient’s sole use. We believe this enables readily available, off-the-shelf therapies that can be delivered more efficiently, consistently and at scale.
Current report
The Company has minimal cash on hand, does not generate sufficient cash from operations to operate the business for the next twelve months, and may not be able to continue as a going concern. The Company has historically funded operations through sales of products and services and equity and debt securities issuances to public and private investors. There is no assurance that such cash flows will continue in the future or that the Company will achieve cash positive operations.
Current report
Product sales were $13.2 million in 2025 compared to $35.3 million in 2024, a decrease of $22.2 million, or 62.7%, mainly driven by lower Biovance 3L and Rebound product sales and in part by changes in customer purchasing behavior due to an uncertain insurance reimbursement environment. Ongoing developments and delays in the rollout of coverage guidance from Medicare Administrative Contractors (MACs), the regional entities responsible for administering Medicare claims and issuing coverage determinations, particularly with respect to skin substitute grafts, created ambiguity around which products would ultimately qualify for reimbursement and under what criteria. As a result, providers and distributors appear to have adopted a more cautious approach to inventory and utilization, including deferring purchases or limiting order volumes until greater clarity on coverage parameters was established.
Current report
Revenues from BioBanking services were $5.4 million in 2025 compared to $5.1 million in 2024, an increase of $0.3 million, or 5.7%.
Current report
Revenues from license, royalty and other were $7.9 million in 2025 compared to $13.7 million in 2024, a decrease of $5.8 million or 42.2%. Certain license agreements ended during 2025 resulting in lower revenues.
Current report
Cost of revenues from product sales were $12.9 million in 2025 compared to $4.9 million in 2024, an increase of $8.0 million or 161.0%. The increase was driven by an inventory realizable value impairment of $4.3 million caused by decreases in product pricing and decreases in the expected price for returns of Rebound product to Sequence. Further, cost of revenues from product sales increased due to a $5.3 million write-off of capitalized bulk material costs that occurred during 2025.
Current report
Cost of Services revenues were $0.3 million lower in 2025 compared to 2024 due to lower BioBanking processing costs.
Current report
Cost of License, royalty and other revenues decreased $2.5 million in 2025 compared to 2024 primarily due to decreased costs incurred from servicing our licensing agreements.
Current report
Research and development expenses were $15.0 million in 2025, a decrease of $2.4 million, or 13.6%, compared to 2024. The decrease was primarily due to a $2.2 million decrease in lab supplies, a decrease of $1.5 million in salaries expense, a decrease in stock-based compensation of $0.5 million, offset primarily by an increase in facilities expense of $2.3 million.
Current report
Selling, general and administrative expenses were $51.2 million compared to $58.6 million in 2024, a decrease of $7.4 million, or 12.6%. The decrease was primarily due to $8.6 million decrease in sales commissions on lower sales, a $2.7 million decrease in facilities expense and a $0.5 million decrease in insurance expense, offset primarily by a $2.7 million increase in professional fees.
Current report
Total other expense was $30.4 million in 2025 compared to $19.5 million in 2024, an increase of $10.9 million, or 55.7%. The increase was primarily due to the $3.7 million increase in the change in fair value of warrant liabilities, a $2.3 million loss on issuance of convertible note with warrants, a $2.5 million increase in loss on debt extinguishment, an increase in interest expense of $0.5 million, an increase in the change in fair value of debt of $1.3 million and a $2.9 million impairment of preferred stock investment.
Current report
As of December 31, 2025, we had cash and cash equivalents of $6.2 million, an accumulated deficit of $991.5 million, and a working capital deficit of $68.4 million. Our primary sources of cash are from financing activities and from products, services and licensing sales. We use this cash to fund our operations and satisfy our debt obligations.
Current report
As of the filing date, our current cash resources are not sufficient to fund our operations for a period of 12 months beyond the filing date and we are actively pursuing additional sources of capital and strategic sales partnerships to improve our liquidity and financial position, including transactions designed to monetize assets, reduce indebtedness and transition to a more capital-efficient operating model. While our ability to secure additional financing is subject to market conditions and other factors, these uncertainties raise substantial doubt about our ability to continue as a going concern.
Current report
Inflation has not significantly impacted on our business, however, sustained increases in inflation or interest rates could affect the broader economy and, in turn, impact our cash flows.
Current report
We used cash of $13.3 million for operating activities in 2025 compared to $6.4 million in 2024. This increase in cash used was driven by lower revenues and higher cost of revenues, offset in part by lower operating expenses and from lower inventories and accrued expense uses.
Current report
We made no investing cash expenditures in 2025 compared to a net of $0.5 million produced by investing activities in 2024.
Current report
In 2025 we produced cash of $18.6 million from financing activities compared to $6.7 million produced in 2024. During 2025 our financing activities included the receipt of $10.0 million in proceeds from the issuance of promissory notes with warrants and the receipt of $6.8 million in proceeds from a related party note and warrants. We also received proceeds of $5.0 million from the sale of warrants, common stock and preferred stock. Further, we received $2.5 million of proceeds from the issuance of common stock from warrant exercises pursuant to an inducement agreement. Additionally, we received proceeds from merchant cash advances of $3.3 million and made repayments on merchant cash advances of $2.6 million. Lastly, we made repayments of $5.9 million for related party notes.
Current report
In 2024, our financing activities included the receipt of a $15.0 million from the issuance of warrants and short-term debt with related parties and the receipt of $3.6 million in proceeds from short-term debt. A further $6.0 million in proceeds were received due to the issuance of preferred stock with warrants in a PIPE offering. During 2024 we made repayments of approximately $17.4 million on short-term debt.
Current report
During the year ended December 31, 2025, the Company undertook a series of financing and strategic transactions to support its liquidity and operations and to restructure certain of its outstanding indebtedness.
Current report
In the first half of 2025, the Company entered into various arrangements with existing lenders, including forbearance extensions and amendments, and completed multiple equity and debt financing transactions to provide working capital and fund operations.
Current report
Throughout 2025 the Company generated financing for working capital by entering into merchant cash advances. In 2025, the Company received cash proceeds of $3.3 million from merchant cash advances, as well as made cash repayments of $2.6 million due to merchant cash advances.
Current report
In July 2025, the Company issued a promissory note with an aggregate principal amount of approximately $6.8 million. A portion of the proceeds was used to repay existing indebtedness, including amounts owed under a prior loan agreement, resulting in the settlement of outstanding obligations and the recognition of a gain related to the forgiveness of certain accrued interest.
Current report
In August 2025, the Company entered into an asset purchase agreement pursuant to which it transferred certain intellectual property in exchange for the assignment and extinguishment of outstanding indebtedness with an aggregate principal balance of approximately $33.8 million, plus accrued interest. In connection with this transaction, the Company also entered into a related license agreement providing for continued access to the transferred intellectual property.
Current report
In October 2025, the Company entered into a securities purchase agreement providing for the issuance of Series A Convertible Preferred Stock and related warrants in multiple tranches, the initial closing of which occurred during the period. The Company also agreed to certain registration rights and granted a security interest in certain assets in connection with this transaction. On April 16, 2026, the holder (“Helena”) of the Series A Convertible Preferred Stock delivered an exchange notice to the Company pursuant to that certain securities purchase agreement, pursuant to which Helena elected to exchange 1,732,084 shares of Series A Convertible Preferred Stock for a Convertible Promissory Note in the original principal amount of approximately $2.0 million (the “Helena Note”). The Helena Note bears interest at a rate of 18.0% per annum and matures on October 16, 2026, unless earlier converted, prepaid or accelerated in accordance with its terms.
Current report
On April 17, 2026, Helena delivered to the Company a notice of event of default (the “Helena Default Notice”) under the Helena Note. In the Helena Default Notice, Helena asserted that one or more events of default had occurred under the Helena Note, including among other things, the Company’s failure to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended, including becoming delinquent in its filings. The Company believes the asserted default arose from the Company’s failure to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Current report
Under the Helena Note, if an event of default is not cured within the applicable cure period, which is five business days for this type of asserted default, Helena may declare due and payable the “Mandatory Default Amount,” which is equal to 115% of the outstanding principal amount, accrued interest and all other amounts owing under the Helena Note. In addition, following an event of default, any outstanding principal balance accrues interest at a rate of 15% per annum, compounded annually.
Current report
In December 2025 the Company entered into agreements with an investor providing financing through senior secured and convertible notes. The Company issued a Senior Secured Non-Convertible Promissory Note of $7.0 million (the “Senior Note”) and a warrant to purchase up to 2,448,917 shares of the Company’s Class A common stock (the “Senior Note Warrant”). The Company also issued a Secured Convertible Promissory Note of $3.0 million and a warrant to purchase up to 1,258,740 shares of the Company’s Class A common stock (the “Convertible Note Warrant”). The Senior Note Warrant and the Convertible Note Warrant are both exercisable commencing on June 19, 2026 through December 19, 2030 at a price of $2.00 per share. The Company may sell up to an aggregate of $8.4 million of Senior Notes before June 19, 2026.
Current report
In February 2026 the Company sold the rights to State of New Jersey income tax net operating loss carryforwards to a 3rd party under a State of New Jersey program and received net proceeds of $12.2 million.
Current report
On March 6, 2026, the Company entered into an Asset Purchase and Exclusive License Agreement (the “NexGel Agreement”) with NexGel, Inc. (“NexGel”), pursuant to which the Company granted NexGel an exclusive, transferable and sublicensable license to develop and commercialize certain products within the Company’s degenerative disease business. The licensed products include certain biomaterial products and pipeline programs that are part of the Company’s advanced biomaterials platform and are subject to underlying rights licensed from Celeniv Pte. Ltd. Under the agreement, the Company is entitled to receive aggregate consideration of $35 million, consisting of an initial payment of $15 million due by April 15, 2026, additional milestone payments of up to $20 million upon the achievement of specified milestones and royalties on certain development stage products.
Current report
On April 17, 2026, the Company entered into an amendment (the “NexGel Amendment”) to the NexGel Agreement. Among other things, the NexGel Amendment provides that: (i) the aggregate consideration payable to the Company under the NexGel Agreement is $13.3 million, consisting of an upfront cash payment of $8.3 million on the transaction commencement date, net of payments to settle outstanding sales representative obligations, and a convertible promissory note in the original principal amount of $5.0 million with an 18-month term; (ii) effective as of the transaction commencement date, NexGel will assume, satisfy, perform and discharge all sales representative obligations and such obligations will constitute assumed liabilities of NexGel from and after such date; (iii) the first milestone payment of $2.5 million will be payable upon the earlier of the achievement of $25.0 million in net sales or the date that is 15 months following the transaction commencement date, provided that net sales of at least $15.0 million have been achieved as of such date. The Company received net proceeds of $4.8 million from NexGel on the closing date, April 17, 2026.
Current report
In April 2026, the Company implemented certain organizational changes in connection with its ongoing strategic realignment and previously announced divestiture of its biomaterials business to NexGel, Inc. On April 9, 2026, the Company terminated the employment of John R. Haines, its Senior Vice President, Global Manager and Chief Administrative Officer, without cause. Mr. Haines’ final day of employment is expected to be May 8, 2026. On April 13, 2026, Stephen A. Brigido, the Company’s President, Degenerative Diseases, resigned from his position, with an effective date of separation of April 15, 2026.. These leadership changes reflect the Company’s continued focus on aligning its organizational structure and resources with its core cell therapy platform and strategic priorities.
Current report
On April 14, 2026, the Company entered into a Settlement Agreement and Mutual General Release (the “Settlement Agreement”) with Sequence LifeScience, Inc. (“SLS”) to resolve certain disputes arising under the parties’ prior asset purchase and supply agreements. Pursuant to the Settlement Agreement, and subject to the closing of the Company’s previously announced transaction with NexGel, Inc. (the “NexGel Transaction”), the Company agreed to provide consideration to SLS, including (i) the grant of a sublicense to certain intellectual property and related assets, (ii) the return of certain product inventory, (iii) the assignment of a portion of future milestone payments payable to the Company in connection with the NexGel Transaction, (iv) the assignment of a portion of the convertible promissory note to be received from NexGel, and (v) certain manufacturing rights. The Settlement Agreement is expressly contingent upon the closing of the NexGel Transaction on or before April 17, 2026. The NexGel Transaction closed on April 17, 2026. The Company expects that, upon effectiveness, the Settlement Agreement will resolve all outstanding disputes between the parties related to these prior agreements.
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Removed paragraphs (39)
Previous report
We are a regenerative and cellular medicines company focused on addressing aging related and degenerative diseases. Our goal is to ensure all individuals have the opportunity to live healthier longer. We develop off-the-shelf placental-derived allogeneic cell therapy product candidates including mesenchymal-like adherent stromal cells, or MLASCs, for which we have clinical datasets from Phase I and Phase II clinical studies and are prioritizing advanced stage programs in diabetic foot ulcer, or DFU, and Crohn’s Disease, or CD. It also includes natural killer, or NK cells, product candidates for which we have clinical datasets from Phase I and Phase II clinical studies and are currently investigating in preclinical studies as senoablatant candidates. We believe that by harnessing the placenta’s unique biology and ready availability, we will be able to develop therapeutic solutions that address a significant unmet global need for effective, accessible and affordable therapeutics. Our advanced biomaterials business today is comprised primarily of the sale of Biovance 3L and Rebound product lines, directly or through our distribution network. Biovance 3L is a tri-layer decellularized, dehydrated human amniotic membrane derived from the placenta of a healthy, full-term pregnancy. It is an intact, natural extracellular matrix that provides a foundation for the wound regeneration process and acts as a scaffold for restoration of functional tissue. Rebound is a full thickness extracellular matrix that contains amnion and chorion. We are developing new placental biomaterial products to deepen the biomaterials commercial pipeline. We also plan to leverage our core expertise in cellular therapeutic development and manufacturing to generate revenues by providing contract manufacturing and development services to third parties. The initial focus of this new service offering will be to assist development stage cell therapy companies with the development and manufacturing of their therapeutic candidates for clinical trials.
Previous report
We are working toward a set of milestones with respect to off-the-shelf placental-derived allogeneic biomaterial product candidates and cell therapy product candidates, respectively. With respect to our biomaterial product candidate pipeline, we expect to submit a 510(k) application for our Celularity Tendon Wrap, or CTW, in the second half of 2025. We expect to advance the development of our FUSE Bone Void Filler, or FUSE, with the objective of a 510(k) filing in the second half of 2026, and to advance the development of our Celularity Placental Matrix, or CPM, with the objective of a 510(k) filing in the second half of 2027. With respect to our MLASCs cell therapy product candidate for DFU (PDA 002), we expect in the first half of 2025 to request an End of Phase 2, or EOP2, meeting with the FDA as part of which we intend to discuss with the FDA our Phase 3 plan and protocols. In addition, with respect to our MLASCs cell therapy product candidate (PDA 001), we expect to complete, in the first half of 2025, our safety and efficacy assessment of previously generated data that is one factor in determining whether to progress our MLASCs cell therapy product candidate in CD to a Phase 3 clinical trial.
Previous report
Our Celularity IMPACT manufacturing process is a seamless, fully integrated process designed to optimize speed and scalability from the sourcing of placentas from full-term healthy informed consent donors through the use of proprietary processing methods, cell selection, product-specific chemistry, manufacturing and controls, or CMC, advanced cell manufacturing and cryopreservation. The result is a suite of allogeneic inventory-ready, on demand placental-derived cell therapy products. We also operate and manage a commercial biobanking business that includes the collection, processing and cryogenic storage of certain birth byproducts for third-parties. A biobank is an organized collection of biological human material and its associated information stored for future retrieval and use in research, regenerative medicine, and innovation. We provide a fee-based biobanking service to expectant parents who contract with us to collect, process, cryogenically preserve and store certain biomaterial, including umbilical cord blood and placenta derived cells and tissue. We receive a one-time fee for the collection, processing, and cryogenic preservation of the biomaterials, and a storage fee to maintain the biomaterials in our biobank payable annually generally over a period of 18 to 25 years. We intend to explore opportunities to diversify our biobanking business, including adult cell banking.
Previous report
Our current science is the product of the cumulative background and effort over two decades of our seasoned and experienced management team. We have our roots in Anthrogenesis Corporation, or Anthrogenesis, a company founded under the name Lifebank in 1998 by Robert J. Hariri, M.D., Ph.D., our founder and Chief Executive Officer, and acquired in 2002 by Celgene Corporation, or Celgene. The team continued to hone their expertise in the field of placental-derived technology at Celgene through August 2017, when we acquired Anthrogenesis. We have a robust global intellectual property portfolio comprised of over 300 patents and patent applications protecting our Celularity IMPACT platform, our processes, technologies and cell therapy programs that we are actively developing or are seeking to out-license/find a collaboration partner to develop. We believe this know-how, expertise and intellectual property will drive the rapid development and, if approved, commercialization of these potentially lifesaving therapies for patients with unmet medical needs.
Previous report
On October 9, 2024, we entered into an asset purchase agreement with Sequence LifeScience, Inc., or Sequence, pursuant to which we acquired Sequence’s Rebound™ full thickness placental-derived allograft matrix product, or the Product, and certain assets related thereto, collectively the Asset. We will pay aggregate consideration for the Asset of up to $5.5 million, which consists of (i) an upfront cash payment of $1.0 million (ii) an aggregate of up to $4.0 million in monthly milestone payments, or the Milestone Payments, and (iii) a credit of $0.5 million for the previous payment made by the Company to Sequence pursuant to that certain letter of intent between us and Sequence dated August 16, 2024. Pursuant to the terms of the Asset Purchase Agreement, the Milestone Payments are calculated based on 20% of net sales collected by us from our customers during the preceding calendar month, commencing the first full month after the closing of the transaction. The closing of the transaction occurred on October 9, 2024. Concurrently with the execution of the Asset Purchase Agreement, we entered into an exclusive supply agreement with Sequence for the manufacture and supply of the Product for a minimum period of six months. We retain the right to manufacture the Product internally and intend to commence a technology transfer as soon as practicable.
Previous report
On November 25, 2024, we entered into a securities purchase agreement with an accredited investor pursuant to which we agreed to sell and issue to the investor and other purchasers in a private placement transaction, in one or more closings, unsecured senior convertible notes (the “November Notes”) and warrants (the “November Warrants”). As of the date of this annual report, we have issued and sold $0.75 million in aggregate principal amount of November Notes and related November Warrants. The November Notes bear interest at an annual rate of 8% (increasing to 10% in the event of default as defined in the securities purchase agreement) and have a maturity date of one year from the date of issuance. Upon an event of default, the November Notes are convertible at the holder’s option into shares of our Class A common stock at a price per share equal to (i) $2.85 (adjusted for stock splits, reverse stock splits, stock dividends, or similar transactions); or (ii) the offering price of a subsequent financing transaction with gross proceeds of $2.5 million or more, subject to a floor price of $1.00 per share. The November Warrants entitle the holder thereof to purchase shares of Class A common stock equal to the principal amount of November Notes purchased by such holder, divided by the exercise price of $2.85 per share. The exercise price, and the number of shares of Class A common stock issuable under the November Warrants, are subject to a one-time reset upon the completion of a subsequent financing transaction with gross proceeds of $2.5 million or more, subject to a floor price of $1.00 per share. The November Warrants are immediately exercisable and have a five-year term. In connection with the transaction, we issued a five-year warrant to the placement agent to purchase 52,500 shares of Class A common stock (the “Placement Agent Warrants”) at an exercise price equal to 125% of the offering price, or $3.56. The Placement Agent Warrants are subject to the same one-time reset upon completion of a subsequent financing transaction as the November Warrants, except that the reset price for the Placement Agent Warrants shall be 125% of the reset price of the November Warrants.
Previous report
On December 27, 2024, we entered into a securities purchase agreement with an institutional investor for the issuance and sale in a private placement (the “December Placement”) of (i) 1,263,157 shares of our Class A common stock and (ii) five-year warrants to purchase up to 1,263,157 shares of our Class A common stock, at a purchase price of $2.375 per share of Class A common stock and accompanying warrant. Effective as of January 23, 2025, the December Placement was terminated.
Previous report
On January 24, 2025, we agreed with the holder of warrants dated January 16, 2024 to purchase 535,274 shares of Class A common stock (the “2024 Warrant”) and warrants dated January 9, 2020, as amended, to purchase 652,981 shares of Class A common stock (the “2020 Warrant” and together with the 2024 Warrants, the “Warrants”) to amend the exercise price of the Warrants to $2.07 per share from $2.49 per share. The holder agreed to exercise the Warrants for gross proceeds to us of approximately $2.46 million.
Previous report
On January 29, 2025, Dr. Robert Hariri, our CEO, extended the maturity date of his outstanding loans from December 31, 2024 to December 31, 2025.
Previous report
On February 12, 2025, we entered into a binding term sheet with Resorts World Inc Pte Ltd, or RWI, pursuant to which RWI agreed to, among other things, an extension of that certain second forbearance agreement dated as of March 13, 2024 whereby RWI has agreed not to exercise its rights and remedies upon the occurrence of any default under certain loans owed to RWI and whereby the maturity date of the foregoing loans is extended to February 15, 2026. Pursuant to the RWI binding term sheet, we agreed to (i) use a portion of the proceeds from our next registered public offering to pay RWI approximately $1.3 million, representing cash interest through January 31, 2025 and (ii) issue to RWI, on July 24, 2025, a new five-year warrant to purchase up to 500,000 shares of our Class A common stock. In addition, we agreed to reprice certain outstanding warrants held by RWI.
Previous report
On February 12, 2025, we entered into a binding term sheet, with C.V. Starr & Co., Inc., or Starr, pursuant to which Starr agreed to, among other things, an extension of that certain forbearance agreement dated March 13, 2024 whereby Starr agreed not to exercise its rights and remedies upon the occurrence of any default under certain loans owed to Starr and whereby the maturity date of the loan is extended to February 15, 2026. Pursuant to the Starr binding term sheet, we agreed to (i) use a portion of the proceeds from our next registered public offering to pay Starr approximately $0.8 million, representing cash interest through January 31, 2025 and (ii) issue to Starr a new five-year warrant to purchase up to 100,000 shares of our Class A common stock. In addition, we agreed to reprice certain outstanding warrants held by Starr.
Previous report
On April 22, 2025, we were notified by Nasdaq that we had not paid certain fees required by Listing Rule 5250(f) totalling $70,000, and as a result, we will be delisted unless we appeal this determination. We paid the assessed fees on April 24, 2025, and Nasdaq informed us on April 30, 2025, that we were in compliance with Listing Rule 5250(f) and the matter is now closed. Additionally, on April 16, 2025, Nasdaq provided formal notice to us that as a result of our failure to timely file this annual report on Form 10-K, we no longer complied with the continued listing requirements under the timely filing criteria outlined in Nasdaq Listing Rule 5250(c)(1). Pursuant to Listing Rule 5810(d)(2), this delinquency serves as an additional and separate basis for delisting, and as such, our common stock will be suspended from trading on May 1, 2025, unless we appeal Nasdaq’s determination before a Hearing Panel. On April 29, 2025, we filed an appeal requesting an oral hearing with a Nasdaq Hearing Panel. There can be no assurance that the appeal will be successful or that we will maintain compliance with the Nasdaq listing requirements. If relief is not granted by the Nasdaq Hearing Panel or we are unable to regain compliance, our securities will be delisted from the Nasdaq.
Previous report
Going Concern
Previous report
As a small clinical-stage biotechnology company, we are subject to certain inherent risks and uncertainties associated with the development of an enterprise. In this regard, since our inception, substantially all of management’s efforts have been devoted to making investments in research and development including basic scientific research into placentally-derived allogeneic cells, pre-clinical studies to support our current and future clinical programs in cellular therapeutics, and clinical development of our cell programs as well as facilities and selling, general and administrative expenses that support our core business operations (collectively the “investments”), all at the expense of our short-term profitability. We have historically funded these investments through limited revenues generated from our biobanking and degenerative disease businesses and issuances of equity and debt securities to public and private investors (these issuances are collectively referred to as “outside capital”). Notwithstanding these efforts, management can provide no assurance that our research and development and commercialization efforts will be successfully completed, or that adequate protection of our intellectual property will be adequately maintained. Even if these efforts are successful, it is uncertain when, if ever, we will generate significant sales or operate in a profitable manner to sustain our operations without needing to continue to rely on outside capital. Continued decline in our share price could result in further impairment of our goodwill or long-lived assets in a future period.
Previous report
Celularity Inc., formerly known as GX Acquisition Corp. (“GX”), was a blank check company incorporated in Delaware on August 24, 2018. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. On July 16, 2021 (the “Closing Date”), the Company consummated the previously announced merger pursuant to the Merger Agreement and Plan of Reorganization, dated January 8, 2021 (the “Merger Agreement”), by and among GX, Alpha First Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of GX (“First Merger Sub”), Celularity LLC (f/k/a Alpha Second Merger Sub LLC), a Delaware limited liability company and a direct, wholly owned subsidiary of GX (“Second Merger Sub”), and the entity formerly known as Celularity Inc., incorporated under the laws of the state of Delaware on August 29, 2016 (“Legacy Celularity”). Upon completion of the merger transaction, GX changed its name to Celularity Inc.
Previous report
Comparison of Year Ended December 31, 2024 to December 31, 2023
Previous report
Net Revenues and Cost of Revenues
Previous report
Net revenues for the year ended December 31, 2024 was $54.2 million, an increase of $31.4 million, or 138.1%, compared to the prior year period. The increase was primarily due to a $22.2 million increase in product sales driven mainly by increased sales of Biovance 3L and Rebound and a $9.6 million increase in license, royalty and other driven by Rebound distributor sales, which we started selling in the third quarter of 2024 through an exclusive distribution agreement with Sequence. On October 9, 2024, we acquired Rebound in an asset purchase agreement with Sequence. For more information about the Rebound asset purchase agreement, see Note 3, “Asset Acquisition” in our audited consolidated financial statements included elsewhere in this annual report on Form 10-K.
Previous report
Cost of revenues for the year ended December 31, 2024 was $15.0 million, a decrease of $1.0 million, or 6.4%, compared to the prior year period. The decrease was primarily due to a $3.7 million decrease in product sales costs, which was primarily related to lower inventory impairment charges. Included in product sales costs in the current year were inventory impairment and obsolescence charges of $0.8 million, compared to inventory impairment charges of $5.4 million in the prior year period due to lower of cost or market adjustments. The decrease in product sales costs was partially offset by an increase of $3.2 million in licenses, royalty and other costs, primarily driven by Rebound distributor sales. As a percentage of revenues, cost of revenues decreased to 28% for the year ended December 31, 2024 compared to 70% in the prior year period. This decrease was due to an increase in Biovance 3L and Rebound sales, which have a higher gross profit margin than other biomaterial products and lower inventory impairment charges.
Previous report
Research and development expenses for the year ended December 31, 2024 were $17.4 million, a decrease of $13.1 million, or 42.9%, compared to the prior year period. The decrease was primarily due to: (i) $8.2 million decrease in outside services, driven by a $2.8 million decrease in clinical trial costs, resulting from discontinuing certain clinical trials related to cell therapy candidates and $4.0 million included in the prior year period in connection with the Pulthera, LLC sublicense agreement for stem cells inventory to be used in research and development; (ii) $3.6 million decrease in personnel costs, mainly due to a reduction in force implemented in March 2023; and, (iii) $1.9 million decrease in corporate allocations.
Previous report
Selling, general and administrative expenses for the year ended December 31, 2024 were $58.6 million, an increase of $8.1 million, or 16.0%, compared to the prior year period. The increase was primarily due to higher selling expenses, which were driven by an increase in biomaterial sales.
Previous report
Impairments
Previous report
There were no impairment charges for the year ended December 31, 2024. For the year ended December 31, 2023, we recorded goodwill and IPR&D impairment charge of $112.3 million and $107.8 million, respectively, due to the decline in future revenue projections in the Cell Therapy business driven by discontinuation of clinical trials and changes in our strategy and pipeline.
Previous report
For the year ended December 31, 2024, total other expense was $19.5 million compared to $4.0 million in the prior year period. The decrease was primarily due to changes in the fair value of warrant liabilities of $5.8 million, a loss on debt extinguishment of $3.9 million and an increase in interest expense of $3.2 million. Change in fair value of warrant liability for the year ended December 31, 2023, was a $6.2 million gain primarily due to decreases in the price of our Class A common stock during the prior year period (see Note 4, “Fair Value of Financial Assets and Liabilities” of our audited consolidated financial statements included elsewhere in this annual report on Form 10-K). Included in the year ended December 31, 2024 was a $3.9 million loss on debt extinguishment recorded in connection with the January 12, 2024 RWI Second Amended Bridge Loan (for more information about the RWI Second Amended Bridge Loan refer to Note 10, “Debt” in our audited consolidated financial statements included elsewhere in this annual report on Form 10-K). The $3.2 million increase in interest expense was primarily driven by interest on the January 12, 2024, RWI Second Amended Bridge Loan. Other expense, net increased $3.3 million from the prior period primarily due to an accrual for liquidated damages resulting from our failure to satisfy certain public information conditions pursuant to the securities purchase agreement dated May 18, 2022.
Previous report
As of December 31, 2024, we had $0.7 million of unrestricted cash and cash equivalents and an accumulated deficit of $899.7 million. Our primary sources of cash are revenues generated through our biomaterials and biobanking commercial businesses, as well as financing activities. Our capital resources are primarily used to fund our operating expenses, including: selling, general and administrative costs to operate our commercial businesses; costs to maintain our GMP manufacturing and research and development facility; and, costs related to development of our advanced biomaterial and cell therapy product candidates, along with cash used for debt repayment.
Previous report
On October 9, 2024, we entered into an asset purchase agreement with Sequence LifeScience, Inc., or Sequence, pursuant to which we acquired Sequence’s Rebound™ full thickness placental-derived allograft matrix product, or the Product, and certain assets related thereto, collectively the Asset. We will pay aggregate consideration for the Asset of up to $5.5 million, which consists of (i) an upfront cash payment of $1.0 million (ii) an aggregate of up to $4.0 million in monthly milestone payments, or the Milestone Payments, and (iii) a credit of $0.5 million for the previous payment made by us to Sequence pursuant to that certain letter of intent between us and Sequence dated August 16, 2024. Pursuant to the terms of the Asset Purchase Agreement, the Milestone Payments are calculated based on 20% of net sales collected by us from our customers during the preceding calendar month, commencing the first full month after the closing of the transaction. The closing of the transaction occurred on October 9, 2024. Concurrently with the execution of the Asset Purchase Agreement, we entered into an exclusive supply agreement with Sequence for the manufacture and supply of the Product for a minimum period of six months. We retain the right to manufacture the Product internally and intend to commence a technology transfer as soon as practicable.
Previous report
On November 25, 2024, we entered into a securities purchase agreement with an accredited investor pursuant to which we agreed to sell and issue to the investor and other purchasers in a private placement transaction, in one or more closings, unsecured senior convertible notes (the “November Notes”) and warrants (the “November Warrants”). As of the date of this annual report, we have issued and sold $0.75 million in aggregate principal amount of November Notes and related November Warrants. The November Notes bear interest at an annual rate of 8% (increasing to 10% in the event of default as defined in the securities purchase agreement) and have a maturity date of one year from the date of issuance. Upon an event of default, the November Notes are convertible at the holder’s option into shares of our Class A common stock at a price per share equal to (i) $2.85 (adjusted for stock splits, reverse stock splits, stock dividends, or similar transactions); or (ii) the offering price of a subsequent financing transaction with gross proceeds of $2.5 million or more, subject to a floor price of $1.00 per share. The November Warrants entitle the holder thereof to purchase shares of Class A common stock equal to the principal amount of November Notes purchased by such holder, divided by the exercise price of $2.85 per share. The exercise price, and the number of shares of Class A common stock issuable under the November Warrants, are subject to a one-time reset upon the completion of a subsequent financing transaction with gross proceeds of $2.5 million or more, subject to a floor price of $1.00 per share. The November Warrants are immediately exercisable and have a five-year term. In connection with the transaction, we issued a five-year warrant to the placement agent to purchase 52,500 shares of Class A common stock (the “Placement Agent Warrants”) at an exercise price equal to 125% of the offering price, or $3.56. The Placement Agent Warrants are subject to the same one-time reset upon completion of a subsequent financing transaction as the November Warrants, except that the reset price for the Placement Agent Warrants shall be 125% of the reset price of the November Warrants.
Previous report
On January 24, 2025, we agreed with the holder of warrants dated January 16, 2024 to purchase 535,274 shares of Class A common stock (the “2024 Warrant”) and warrants dated January 9, 2020, as amended, to purchase 652,981 shares of Class A common stock (the “2020 Warrant” and together with the 2024 Warrants, the “Warrants”) to amend the exercise price of the Warrants to $2.07 per share from $2.49 per share. The holder agreed to exercise the Warrants for gross proceeds to us of approximately $2.46 million.
Previous report
On January 29, 2025, Dr. Robert Hariri, our CEO, extended the maturity date of his outstanding loans from December 31, 2024 to December 31, 2025.
Previous report
As of the issuance date, we had insufficient unrestricted cash and cash equivalents available to fund our operations and no available additional sources of outside capital to sustain our operations for a period of 12 months beyond the issuance date. These uncertainties raise substantial doubt about our ability to continue as a going concern. Refer to the Going Concern section above for further details.
Previous report
To date, inflation has not had a significant impact on our business. However, any significant increase in inflation and interest rates could have a significant effect on the economy in general and, thereby, could affect our future operating results.
Previous report
The following table summarizes our cash flows for the periods indicated:
Previous report
We used $6.4 million of net cash in operations for the year ended December 31, 2024 compared to $38.7 million for the year ended December 31, 2023. The decrease was primarily due to higher net revenues driven mainly by increased sales of Biovance 3L and Rebound and lower operating expenses mainly due to lower research and development costs resulting from discontinuation of certain clinical trials related to cell therapy candidates.
Previous report
Net cash provided by investing activities was $0.5 million during the year ended December 31, 2024 compared to net cash used in investing activities of $4.0 million during the year ended December 31, 2023. Net cash provided by investing activities for the year ended December 31, 2024 included $2.2 million settlement of a convertible note receivable from Sanuwave, offset by $1.5 million for the Rebound asset purchase and $0.2 million of capital expenditures. Net cash used in investing activities for the year ended December 31, 2023, included $1.0 million of capital expenditures and $3.0 million used to acquire in-process research and development.
Previous report
Net cash provided by financing activities was $6.7 million for the year ended December 31, 2024, which consisted of $15.0 million from the RWI Second Amended Bridge Loan entered into on January 12, 2024, $6.0 million from the January 2024 private placement with Dragasac and $3.6 million net proceeds from convertible debt issuances, including $3.0 million from the March 13, 2024 convertible promissory note issued to Yorkville and $0.6 million from the November 2024 convertible promissory note issued to an accredited investor, partially offset by $17.4 million for the payment in full of the Yorkville PPA. We generated $24.1 million of net cash from financing activities for the year ended December 31, 2023, which included: $11.6 million aggregate net cash proceeds from senior secured bridge loan and warrant agreements entered into with Resorts World Inc Pte Ltd, in May 2023 and June 2023; $12.8 million in cash proceeds from PIPE financings, consisting of a $9.0 million PIPE entered into in March 2023 and a $3.8 million PIPE entered into in May 2023; $5.0 million in proceeds from the issuance of a senior secured bridge loan and warrants to C.V. Starr in March 2023; $8.2 million net proceeds from registered direct offerings, consisting of net proceeds of $5.5 million from a registered direct offering in April 2023 and $2.7 million registered direct offering in July 2023; and $3.0 million in proceeds from loan agreements entered into in August 2023, including a $1.0 million loan agreement with Dr. Robert Hariri, our Chairman and Chief Executive Officer. Partially offsetting these sources was $16.8 million principal repayments of the PPA.
Previous report
Valuation of Goodwill and Intangible Assets
Previous report
We have acquired and may continue to acquire significant intangible assets in connection with business combinations, which we record at fair value. The determination of fair value requires the use of forecasts, estimates and assumptions, which requires significant judgment by management. Each of these factors are subject to uncertainty and can significantly affect the value of the intangible asset.
Previous report
Goodwill and indefinite-lived intangible assets are reviewed for impairment annually or when an event occurs that could result in an impairment. The impairment analysis requires the exercise of significant judgment by management and can involve both the assessment of qualitative factors (which are subject to uncertainty and can change significantly from period to period), as well as a quantitative. For our quantitative impairment tests, we use an estimated future cash flow approach that requires significant judgment with respect to future volume, revenue and expense growth rates, the selection of an appropriate discount rate, asset groupings and other assumptions and estimates. The estimates and assumptions used are subject to uncertainty. The use of alternative estimates and assumptions could increase or decrease the estimated fair value of the assets and could potentially impact our results of operations. Actual results may differ from our estimates. For the year ended December 31, 2023, we recognized goodwill impairment charges of $112.3 million and indefinite-lived intangible asset impairment charges associated with IPR&D of $107.8 million. For more information about the trigger events leading to the impairments refer to Note 2, “Summary of Significant Accounting Policies” and Note 8, “Goodwill and Intangibles, Net” of our consolidated financial statements included elsewhere in this annual report on Form 10-K).
Previous report
Short-Term Debt
Reworded paragraphs (18)
Previous wording
In accordance with Accounting Standards Update, or ASU, No. 2014-15,Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), or ASU 205-40, we evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
Current wording
The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date of this filing.
Previous wording
As of the date the accompanying consolidated financial statements were issued, or the issuance date, management evaluated the significance of the following adverse conditions and events in accordance with ASU 205-40:
Current wording
As of the date the accompanying consolidated financial statements were issued, or the issuance date, management evaluated the significance of the following adverse conditions and events in considering its ability to continue as a going concern:
Previous wording
These uncertainties raise substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements have been prepared on the basis that we will continue to operate as a going concern, which contemplates that we will be able to realize assets and settle liabilities and commitments in the normal course of business for the foreseeable future. Accordingly, the accompanying consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties.
Current wording
These uncertainties raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements have been prepared on the basis that the Company will continue to operate as a going concern, which contemplates that the Company will be able to realize assets and settle liabilities and commitments in the normal course of business for the foreseeable future.
Previous wording
We manage our operations through an evaluation of three distinct business segments: Cell Therapy, Degenerative Disease, and BioBanking. The reportable segments were determined based on the distinct nature of the activities performed by each segment. Cell Therapy broadly refers to cellular therapies we are researching and developing. Therapies being researched are unproven and in various phases of development. All of the cell therapy programs fall into the Cell Therapy segment. Degenerative Disease produces, sells and licenses products used in surgical and wound care markets, such as Biovance, Biovance 3L, Interfyl and CentaFlex. We sell products in this segment using independent sales representatives as well as distributors. We are developing additional tissue-based products for the Degenerative Disease segment. BioBanking collects stem cells from umbilical cords and placentas and provides storage of such cells on behalf of individuals for future use. We operate in the biobanking business primarily under the LifebankUSA brand. For more information about our reportable business segments refer to Note 19, “Segment Information” of our audited consolidated financial statements included elsewhere in this annual report on Form 10-K.
Current wording
We manage our operations through an evaluation of three distinct business segments: Cell Therapy, BioBanking and Degenerative Disease. The reportable segments were determined based on the distinct nature of the activities performed by each segment. Cell Therapy broadly refers to cellular therapies we are researching and developing. Therapies being researched are unproven and in various phases of development. All of the cell therapy programs fall into the Cell Therapy segment. Degenerative Disease produces, sells and licenses products used in surgical and wound care markets, such as Biovance, Biovance 3L, InterfylCentaFlex and Rebound. We sell products in this segment using independent sales representatives as well as distributors. We intend to develop additional tissue-based products for the Degenerative Disease segment. BioBanking collects stem cells from umbilical cords and placentas and provides storage of such cells on behalf of individuals for future use. We operate in the biobanking business primarily under the LifebankUSA brand. For more information about our reportable business segments refer to Note 21, “Segment Information” of our audited consolidated financial statements included elsewhere in this annual report on Form 10-K.
Previous wording
Our principal executive offices are located at 170 Park Avenue, Florham Park, New Jersey 07932, and our telephone number is (908) 768-2170. We maintain a website athttps://celularity.com/ where general information about us is available. The information contained on our website is not incorporated by reference into this annual report on Form 10-K, and you should not consider any information contained on, or that can be accessed through, our website as part of this annual report or in deciding whether to purchase our securities.
Current wording
Our principal executive offices are located at 170 Park Avenue, Florham Park, New Jersey 07932, and our telephone number is (908) 768-2170.
Previous wording
Our research and development expenses primarily relate to basic scientific research into placentally derived allogeneic cells, pre-clinical studies to support our current and future clinical programs in cellular medicine, clinical development of our NK cell programs and facilities, depreciation and other direct and allocated expenses incurred as a result of research and development activities. We incur expenses for personnel expenses for research scientists, specialized chemicals and reagents used to conduct biologic research, expense for third party testing and validation and various overhead expenses including rent and facility maintenance expense. Basic research, research collaborations involving partners and research designed to enable successful regulatory submissions is critical to our current and future success in cell therapy. The amount of our research and development expenditures will depend on numerous factors, including the timing of clinical trials, preliminary evidence of efficacy in clinical trials and the number of indications that we choose to pursue.
Current wording
Our research and development expenses primarily relate to basic scientific research into placentally derived allogeneic cells, pre-clinical studies to support our current and future clinical programs in cellular medicine, clinical development of our NK cell programs and facilities, depreciation and other direct and allocated expenses incurred through research and development activities. We incur expenses for research scientist personnel, specialized chemicals and reagents used to conduct biologic research, expenses for third party testing and validation and various overhead expenses including rent and facility maintenance expenses. Basic research, research collaborations involving partners and research designed to enable successful regulatory submissions are critical to our current and future success in cell therapy. The amount of our research and development expenditures will depend on numerous factors, including the timing of clinical trials, preliminary evidence of efficacy in clinical trials and the number of indications that we choose to pursue.
Previous wording
Selling, general and administrative expense consists primarily of personnel costs including salaries, bonuses, stock compensation and benefits for specialized staff that support our core business operations. Executive management, finance, legal, human resources and information technology are key components of selling, general and administrative expense and those expenses are recognized when incurred. We expect that as a result of our reprioritization efforts, we will see a decrease in our selling, general and administrative costs in the near term. The magnitude and timing of our selling, general and administrative costs will depend on the progress of clinical trials, commercialization efforts for any approved therapies including the release of new products within the degenerative disease portfolio, changes in the regulatory environment or staffing needs to support our business strategy.
Current wording
Selling, general and administrative expense consists primarily of personnel costs including salaries, bonuses, stock compensation and benefits for specialized staff that support our core business operations. Executive management, finance, legal, human resources and information technology are key components of selling, general and administrative expense and those expenses are recognized when incurred. The magnitude and timing of our selling, general and administrative costs will depend on the progress of clinical trials, commercialization efforts for any approved therapies including the release of new products within the degenerative disease portfolio, changes in the regulatory environment or staffing needs to support our business strategy.
Previous wording
Because the acquisitions of Anthrogenesis from Celgene and HLI CT were accounted for as business combinations, we recognized acquisition-related contingent consideration on the balance sheets in accordance with the acquisition method of accounting. See Note 12, “Commitments and Contingencies” for more information. The fair value of contingent consideration liability is determined based on a probability-weighted income approach derived from revenue estimates and a probability assessment with respect to the likelihood of achieving regulatory and commercial milestone obligations and royalty obligations. The fair value of acquisition related contingent consideration is remeasured each reporting period with changes in fair value recorded in the consolidated statements of operations and comprehensive loss. Changes in contingent consideration fair value estimates result in an increase or decrease in our contingent consideration obligation and a corresponding charge or reduction to operating results. Key elements of the contingent consideration are regulatory milestone payments, sales milestone payments and royalty payments. Regulatory payments are due on regulatory approval of certain cell types in the United States and the European Union. Regulatory milestone payments are one time but are due prior to any potential commercial success of a cell type in a specific indication. Royalty payments are a percentage of net sales. Sales milestone payments are due when certain aggregate sales thresholds have been met. Management must use substantial judgment in evaluating the value of the contingent consideration. Estimates used by management include but are not limited to: (i) the number and type of clinical programs that we are likely to pursue based on the quality of our preclinical data, (ii) the time required to conduct clinical trials, (iii) the odds of regulatory success in those trials, (iv) the potential number of patients treatable for the indications in which we are successful and (v) the pricing of treatments that achieve commercial status. All of these areas involve substantial judgment on the part of management and are inherently uncertain.
Current wording
Because the acquisitions of Anthrogenesis from Celgene and HLI CT were accounted for as business combinations, we recognized acquisition-related contingent consideration on the balance sheets in accordance with the acquisition method of accounting. See Note 15, “Commitments and Contingencies” for more information. The fair value of contingent consideration liability is determined based on a probability-weighted income approach derived from revenue estimates and a probability assessment with respect to the likelihood of achieving regulatory and commercial milestone obligations and royalty obligations. The fair value of acquisition-related contingent consideration is remeasured each reporting period with changes in fair value recorded in the consolidated statement of operations and comprehensive loss. Changes in contingent consideration fair value estimates result in an increase or decrease in our contingent consideration obligation and a corresponding charge or reduction to operating results. Key elements of the contingent consideration are regulatory milestone payments, sales milestone payments and royalty payments. Regulatory payments are due on regulatory approval of certain cell types in the United States and the European Union. Regulatory milestone payments are one time but are due prior to any potential commercial success of a cell type in a specific indication. Royalty payments are a percentage of net sales. Sales milestone payments are due when certain aggregate sales thresholds have been met. Management must use substantial judgment in evaluating the value of the contingent consideration. Estimates used by management include but are not limited to: (i) the number and type of clinical programs that we are likely to pursue based on the quality of our preclinical data, (ii) the time required to conduct clinical trials, (iii) the odds of regulatory success in those trials, (iv) the potential number of patients treatable for the indications in which we are successful and (v) the pricing of treatments that achieve commercial status. All of these areas involve substantial judgment on the part of management and are inherently uncertain.
Previous wording
The acquisition-related contingent consideration liability decreased to $1.4 million as of December 31, 2024, compared to $1.6 million at December 31, 2023. This decrease, resulting in a gain of $0.2 million for the year ended December 31, 2024, was driven by adjustments to market-based assumptions related to future consideration payable in connection with the HLI Cellular Therapeutics acquisition. In 2023, we discontinued our cell therapy clinical trials, which led to the full write-off the Anthrogenesis acquisition-related contingent consideration liability. As a result, we recognized a gain of $104.3 million for the year ended December 31, 2023. For more information about changes in the fair value of contingent consideration liability refer to Note 4, “Fair Value of Financial Assets and Liabilities” of our audited consolidated financial statements included elsewhere in this annual report on Form 10-K).
Current wording
The acquisition-related contingent consideration liability was unchanged at $1.4 million as of December 31, 2025, compared to December 31, 2024, and there were no changes to market-based assumptions related to future consideration payable in connection with the HLI Cellular Therapeutics acquisition.
Previous wording
To date, we have not had any cellular therapeutics approved for sale and have not generated any revenues from the sale of our cellular therapeutics and we are not actively developing any cellular therapeutics in our pipeline given our liquidity. We do not expect to generate any revenues from cellular therapeutic product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our therapeutic candidates, which we expect will take a number of years. If we obtain regulatory approval for any of our therapeutic candidates, we expect to incur significant commercialization expenses related to therapeutic sales, marketing, manufacturing and distribution as our current commercialization efforts are limited to our biobanking and degenerative disease businesses. As a result, until such time, if ever, as we can generate sufficient revenues to fund operations, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including commercial sales of our biomaterials products, as well as potentially collaborations, licenses and other similar arrangements for our cellular therapeutic candidates. We continue to explore licensing and collaboration arrangements for our cellular therapeutics as well as distribution arrangements for our degenerative disease business. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. Failure to obtain this necessary capital or address our liquidity needs may force us to delay, limit or terminate our operations, make further reductions in our workforce, discontinue our commercialization efforts for our biomaterials products as well as other clinical trial programs, liquidate all or a portion of our assets or pursue other strategic alternatives, and/or seek protection under the provisions of the U.S. Bankruptcy Code.
Current wording
We are evaluating and pursuing commercialization of certain investigational cellular therapies, including cenplacel-L, in jurisdictions that permit the use of such products outside of traditional regulatory approval pathways, subject to applicable local laws and regulations. If we obtain regulatory approval for any of our therapeutic candidates, we expect to incur significant commercialization expenses related to therapeutic sales, marketing, manufacturing and distribution as our current commercialization efforts are limited to our biobanking and degenerative disease businesses.
Previous wording
We expect to incur substantial expenses in the foreseeable future for the expansion of our degenerative disease business and ongoing internal research and development programs. We will require substantial additional funding in the future to build the sales, marketing and distribution infrastructure that will be necessary to commercialize our biomaterials products.
Current wording
We expect to incur substantial expenses in the foreseeable future for our degenerative disease business and ongoing internal research and development programs. We may require substantial additional funding in the future to build the sales, marketing and distribution infrastructure that will be necessary to commercialize our biomaterials products.
Previous wording
The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, assumptions related to goodwill and intangible impairment assessment, the valuation of inventory, gross-to-net sales adjustments, contingent consideration, short-term debt, and contingent stock consideration, determination of incremental borrowing rates, and the valuations of stock options and preferred stock warrants. We based our estimates on historical experience, known trends and other market-specific or other relevant factors that we believe to be reasonable under the circumstances. On an ongoing basis, management evaluates these estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.
Current wording
The preparation of the Company’s consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the determination of incremental borrowing rates, the valuations of inventory, and fair value of contingent consideration, short-term debt, stock options and stock warrants. The Company based its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.
Previous wording
Products within our Degenerative Disease segment generally do not contain multiple elements. We allow for a right of return for those products but to date returns have been minimal.
Current wording
Products within our Degenerative Disease segment generally do not contain multiple elements. We allow for the right of return for those products but to date returns have been minimal.
Previous wording
We have disclosed our inventory valuation policy in Note 2, “Summary of Significant Accounting Policies” of our consolidated financial statements included elsewhere in this annual report on Form 10-K. We periodically analyze the inventory levels to determine whether there is any obsolete, expired, or excess inventory. If any inventory is (i) expected to expire prior to being sold, (ii) has a cost basis in excess of its net realizable value, (iii) is in excess of expected sales requirements as determined by internal sales forecasts, or (iv) fails to meet commercial sale specifications, the inventory is written-down through a charge to cost of revenues. The determination of whether inventory costs will be realizable requires estimates by management of future expected inventory requirements, based on sales forecasts. If actual market conditions are less favorable than those projected by management, inventory write-downs may be required. Inventory, net of current portion on our consolidated balance sheets includes inventory expected to remain on hand beyond one year. For the year ended December 31, 2024, we recognized inventory impairment and obsolescence charges totaling $0.8 million. In comparison, for the year ended December 31, 2023, we recorded inventory impairment charges of $5.4 million, consisting of lower of cost or net realizable value adjustments for finished goods and work in progress of $2.1 million and $3.3 million, respectively. Both years’ inventory impairment charges are reflected in cost of revenues in our consolidated statements of operations and comprehensive loss.
Current wording
We periodically analyze the inventory levels to determine whether there is any obsolete, expired, or excess inventory. If any inventory is (i) expected to expire prior to being sold, (ii) has a cost basis in excess of its net realizable value, (iii) is in excess of expected sales requirements as determined by internal sales forecasts, or (iv) fails to meet commercial sale specifications, the inventory is written-down through a charge to cost of revenues. The determination of whether inventory costs will be realizable requires estimates by management of future expected inventory requirements, based on sales forecasts. If actual market conditions are less favorable than those projected by management, inventory write-downs may be required. Inventory, net of current portion on our consolidated balance sheets includes inventory expected to remain on hand beyond one year.
Previous wording
We have acquisition-related contingent consideration, which consists of potential milestone and royalty obligations, which was recorded in the consolidated balance sheets at our acquisition-date estimated fair value. We remeasure the fair value each reporting period, with changes recorded in the consolidated statements of operations and comprehensive loss. The determination of fair value requires the exercise of significant judgment and estimates by management. These include estimates and assumptions regarding the achievement and timing of milestones, forecasted revenues and assumptions utilized in calculating a discount rate. If management’s assumptions prove to be inaccurate, it could result in changes to the contingent consideration liability and have a material effect on our results of operations.
Current wording
A liability for acquisition-related contingent consideration was recorded at its estimated fair value, which consists of potential milestone and royalty obligations. We remeasure the fair value each reporting period, with changes recorded in the consolidated statement of operations and comprehensive loss. The determination of fair value requires the exercise of significant judgment and estimates by management. These include estimates and assumptions regarding the achievement and timing of milestones, forecasted revenues and assumptions utilized in calculating a discount rate. If management’s assumptions prove to be inaccurate, it could result in changes to the contingent consideration liability and have a material effect on our results of operations.
Previous wording
Accounting for liability classified warrants requires management to exercise judgment and make estimates and assumptions regarding their fair value (for more information about the material inputs and assumptions used to value the liability classified warrants refer to Note 4, “Fair Value of Financial Assets and Liabilities” of our audited consolidated financial statements included elsewhere in this annual report on Form 10-K). The warrant liabilities are initially recorded at fair value upon the date of issuance and subsequently remeasured to fair value at each reporting date, with changes recognized in the consolidated statements of operations and comprehensive loss. Changes in the fair value of the liability classified warrants will continue to be recognized until the warrants are exercised, expire or qualify for equity classification.
Current wording
Accounting for liability classified warrants requires management to exercise judgment and make estimates and assumptions regarding their fair value (for more information about the material inputs and assumptions used to value the liability classified warrants refer to Note 4, “Fair Value of Financial Assets and Liabilities” of our audited consolidated financial statements included elsewhere in this annual report on Form 10-K). The warrant liabilities are initially recorded at fair value upon the date of issuance and subsequently remeasured to fair value at each reporting date, with changes recognized in the consolidated statement of operations and comprehensive loss. Changes in the fair value of the liability classified warrants will continue to be recognized until the warrants are exercised, expire or qualify for equity classification.
Previous wording
We cannot readily determine the interest rate implicit in the lease, therefore, we use our incremental borrowing rate, or IBR, to measure lease liabilities. The IBR is the rate of interest that we would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use, or ROU, asset in a similar economic environment. The IBR therefore reflects what we ‘would have to pay’, which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. We estimate the IBR using observable inputs (such as market interest rates) when available and are required to make certain entity and asset-specific estimates. The IBR used in the calculation of the present value of lease payments in calculating lease liabilities and the corresponding ROU requires the use of significant judgment by management.
Current wording
We cannot readily determine the interest rate implicit in our lease, therefore, we use our incremental borrowing rate, or IBR, to measure lease liabilities. The IBR is the rate of interest that we would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use, or ROU, asset in a similar economic environment. The IBR therefore reflects what we “would have to pay”, which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. We estimate the IBR using observable inputs (such as market interest rates) when available and are required to make certain entity and asset-specific estimates. The IBR used in the calculation of the present value of lease payments in calculating lease liabilities and the corresponding ROU requires the use of significant judgment by management.
Previous wording
We elected the fair value option to account for the Yorkville PPA. Due to its short-term nature, as of December 31, 2023, the Yorkville PPA fair value approximated the January 17, 2024 settlement amount. We also elected the fair value option to account for the Yorkville convertible promissory note, issued on March 13, 2024, and the unsecured senior convertible notes, issued pursuant to the securities purchase agreement signed on November 25, 2024. The Yorkville convertible promissory note and the unsecured senior convertible notes are comprised of the debt host instruments and embedded derivatives. The fair values of the Yorkville convertible promissory note and unsecured senior convertible notes are based on valuations which employ a Monte Carlo model and a credit default model. The fair value measurement of the debt was determined using Level 3 inputs and assumptions unobservable in the market. Changes in the fair value of debt that is accounted for at fair value, inclusive of related accrued interest expense, are presented as gains or losses in the accompanying consolidated statements of operations and comprehensive income (loss) under change in fair value of debt. The portion of total changes in fair value of debt attributable to changes in instrument-specific credit risk are determined through specific measurement of periodic changes in the discount rate assumption exclusive of base market changes and are presented as a component of comprehensive income (loss) in the accompanying consolidated statements of operations and comprehensive income (loss). The actual settlement of the short-term debt could differ from estimates based on the timing of when and if the investors elect to convert amounts into common shares, potential cash repayment by us prior to maturity, and movements in our common share price.
Current wording
The fair value measurement of the debt was determined using Level 3 inputs and assumptions unobservable in the market. Changes in the fair value of debt that is accounted for at fair value, inclusive of related accrued interest expense, are presented as gains or losses in the accompanying consolidated statement of operations and comprehensive loss under change in fair value of debt. The portion of total changes in fair value of debt attributable to changes in instrument-specific credit risk are determined through specific measurement of periodic changes in the discount rate assumption exclusive of base market changes and are presented as a component of comprehensive loss in the accompanying consolidated statement of operations and comprehensive loss. The actual settlement of the short-term debt could differ from estimates based on the timing of when and if the investors elect to convert amounts into common shares, potential cash repayment by us prior to maturity, and movements in our common share price.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
We expect to finance our cash needs through equity offerings, debt financings or other capital sources, and from commercial sales of our biomaterials products, and from sales collaborations, licenses and other similar arrangements for our cellular therapeutics. We continue to explore licensing and collaboration arrangements for our cellular therapeutics as well as distribution arrangements for our degenerative disease business. We may be unable to raise additional funds or enter such other arrangements when needed. Failure to raise needed cash could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies.
Current report — wording carried from elsewhere
We use the fair value option to account for the Yorkville PPA. As of December 31, 2023, the Yorkville PPA fair value approximated the January 17, 2024 settlement amount. We also elected the fair value option to account for the Yorkville convertible promissory note, issued on March 13, 2024, and the unsecured senior convertible notes, issued pursuant to the securities purchase agreement signed on November 25, 2024. On December 19, 2025, the Company entered into a series of definitive agreements with an investor whereby the Company issued the investor warrants, a senior secured non-convertible promissory note (the “December 2025 Promissory Note”) and a secured convertible note financing (the “December 2025 Convertible Note”). The Company has elected the fair value option to account for the December 2025 Promissory Note and the December 2025 Convertible Note.