| Segment Reporting |
Note 6 – Segment Reporting
During the third quarter of fiscal 2015, the Company purchased
certain assets and assumed certain liabilities and contracts that
CytoMedical used in the operation of its cord blood business (See
Note 2). The Company evaluated and determined that this acquisition
qualifies as a separate segment.
The Company is organized in two reportable segments:
| |
1. |
The cellular processing and cryogenic
storage of umbilical cord blood and cord tissue stem cells for
family use. Revenue is generated from the initial processing and
testing fees and the annual storage fees charged each year for
storage (the “Umbilical cord blood and cord tissue stem cell
service”). |
| |
2. |
The manufacture of
PrepaCyte® CB units, the processing
technology used to process umbilical cord blood stem cells. Revenue
is generated from the sales of the PrepaCyte® CB units (the
“PrepaCyte® CB”). |
The following table shows, by segment: net revenue, cost of sales,
operating profit, depreciation and amortization, interest expense,
income tax benefit (expense) and other comprehensive income for the
three months and six months ended May 31, 2017:
|
|
|
|
|
|
|
|
|
| |
|
For the three months
ended May 31, 2017 |
|
|
For the six months
ended May 31, 2017 |
|
|
Net revenue
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
6,174,896 |
|
|
$ |
11,786,720 |
|
|
PrepaCyte®-CB
|
|
|
61,855 |
|
|
|
226,655 |
|
|
|
|
|
|
|
|
|
|
|
Total net revenue
|
|
$ |
6,236,751 |
|
|
$ |
12,013,375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
1,517,078 |
|
|
$ |
2,909,873 |
|
|
PrepaCyte®-CB
|
|
|
74,888 |
|
|
|
198,190 |
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales
|
|
$ |
1,591,966 |
|
|
$ |
3,108,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
22,873 |
|
|
$ |
45,439 |
|
|
PrepaCyte®-CB
|
|
|
9,063 |
|
|
|
18,127 |
|
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization
|
|
$ |
31,936 |
|
|
$ |
63,566 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
1,214,346 |
|
|
$ |
2,298,038 |
|
|
PrepaCyte®-CB
|
|
|
(22,096 |
) |
|
|
10,338 |
|
|
|
|
|
|
|
|
|
|
|
Total operating income
|
|
$ |
1,192,250 |
|
|
$ |
2,308,376 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
325,314 |
|
|
$ |
622,358 |
|
|
PrepaCyte®-CB
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Total interest expense
|
|
$ |
325,314 |
|
|
$ |
622,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
(331,737 |
) |
|
$ |
(637,454 |
) |
|
PrepaCyte®-CB
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Total income tax expense
|
|
$ |
(331,737 |
) |
|
$ |
(637,454 |
) |
|
|
|
|
|
|
|
|
|
The following table shows the assets by segment as of May 31,
2017 and November 30, 2016:
|
|
|
|
|
|
|
|
|
| |
|
As of May 31, 2017 |
|
|
As of November 30,
2016 |
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
20,562,496 |
|
|
$ |
18,960,261 |
|
|
PrepaCyte®-CB
|
|
|
474,121 |
|
|
|
578,207 |
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$ |
21,036,617 |
|
|
$ |
19,538,468 |
|
|
|
|
|
|
|
|
|
|
The following table shows, by segment: net revenue, cost of sales,
operating profit, depreciation and amortization, interest expense,
income tax benefit (expense) and other comprehensive income for the
three months and six months ended May 31, 2016:
|
|
|
|
|
|
|
|
|
| |
|
For the three months
ended May 31, 2016 |
|
|
For the six months
ended May 31, 2016 |
|
|
Net revenue
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
5,706,677 |
|
|
$ |
10,727,136 |
|
|
PrepaCyte®-CB
|
|
|
66,379 |
|
|
|
198,118 |
|
|
|
|
|
|
|
|
|
|
|
Total net revenue
|
|
$ |
5,773,056 |
|
|
$ |
10,925,254 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
1,345,370 |
|
|
$ |
2,590,393 |
|
|
PrepaCyte®-CB
|
|
|
85,730 |
|
|
|
188,998 |
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales
|
|
$ |
1,431,100 |
|
|
$ |
2,779,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
28,555 |
|
|
$ |
57,233 |
|
|
PrepaCyte®-CB
|
|
|
13,317 |
|
|
|
26,187 |
|
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization
|
|
$ |
41,872 |
|
|
$ |
83,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
915,052 |
|
|
$ |
1,056,069 |
|
|
PrepaCyte®-CB
|
|
|
(32,668 |
) |
|
|
(17,263 |
) |
|
|
|
|
|
|
|
|
|
|
Total operating income
|
|
$ |
882,384 |
|
|
$ |
1,038,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
335,589 |
|
|
$ |
582,532 |
|
|
PrepaCyte®-CB
|
|
|
7,874 |
|
|
|
22,265 |
|
|
|
|
|
|
|
|
|
|
|
Total interest expense
|
|
$ |
343,463 |
|
|
$ |
604,797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income expense
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
(201,735 |
) |
|
$ |
(201,735 |
) |
|
PrepaCyte®-CB
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Total income expense
|
|
$ |
(201,735 |
) |
|
$ |
(201,735 |
) |
|
|
|
|
|
|
|
|
|
|