| 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
CMDG 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,
depreciation and amortization, operating profit, interest expense,
and income tax (expense) benefit for the three months and nine
months ended August 31, 2017:
|
|
|
|
|
|
|
|
|
| |
|
For the three months
ended August 31,
2017 |
|
|
For the nine months
ended August 31, 2017 |
|
|
Net revenue
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
6,780,565 |
|
|
$ |
18,567,285 |
|
|
Prepacyte®-CB
|
|
|
115,376 |
|
|
|
342,031 |
|
|
|
|
|
|
|
|
|
|
|
Total net revenue
|
|
$ |
6,895,941 |
|
|
$ |
18,909,316 |
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
1,771,403 |
|
|
$ |
4,681,276 |
|
|
Prepacyte®-CB
|
|
|
206,072 |
|
|
|
404,262 |
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales
|
|
$ |
1,977,475 |
|
|
$ |
5,085,538 |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
24,295 |
|
|
$ |
69,734 |
|
|
Prepacyte®-CB
|
|
|
9,064 |
|
|
|
27,191 |
|
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization
|
|
$ |
33,359 |
|
|
$ |
96,925 |
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
1,552,168 |
|
|
$ |
3,850,206 |
|
|
Prepacyte®-CB
|
|
|
(99,935 |
) |
|
|
(89,597 |
) |
|
|
|
|
|
|
|
|
|
|
Total operating income
|
|
$ |
1,452,233 |
|
|
$ |
3,760,609 |
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
314,890 |
|
|
$ |
937,248 |
|
|
Prepacyte®-CB
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Total interest expense
|
|
$ |
314,890 |
|
|
$ |
937,248 |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
(490,558 |
) |
|
$ |
(1,128,012 |
) |
|
Prepacyte®-CB
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Total income tax expense
|
|
$ |
(490,558 |
) |
|
$ |
(1,128,012 |
) |
|
|
|
|
|
|
|
|
|
The following table shows the assets by segment as of
August 31, 2017 and November 30, 2016:
|
|
|
|
|
|
|
|
|
| |
|
As of August 31, 2017 |
|
|
As of November 30,
2016
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
20,761,483 |
|
|
$ |
18,960,261 |
|
|
Prepacyte®-CB
|
|
|
555,328 |
|
|
|
578,207 |
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$ |
21,316,811 |
|
|
$ |
19,538,468 |
|
|
|
|
|
|
|
|
|
|
The following table shows, by segment: net revenue, cost of sales,
depreciation and amortization, operating profit, interest expense,
and income tax (expense) benefit for the three months and nine
months ended August 31, 2016:
|
|
|
|
|
|
|
|
|
| |
|
For the three months
ended August 31,
2016 |
|
|
For the nine months
ended August 31, 2016 |
|
|
Net revenue
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
6,243,803 |
|
|
$ |
16,970,939 |
|
|
Prepacyte®-CB
|
|
|
88,135 |
|
|
|
286,253 |
|
|
|
|
|
|
|
|
|
|
|
Total net revenue
|
|
$ |
6,331,938 |
|
|
$ |
17,257,192 |
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
1,482,900 |
|
|
$ |
4,073,293 |
|
|
Prepacyte®-CB
|
|
|
68,331 |
|
|
|
257,329 |
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales
|
|
$ |
1,551,231 |
|
|
$ |
4,330,622 |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
27,310 |
|
|
$ |
84,542 |
|
|
Prepacyte®-CB
|
|
|
12,436 |
|
|
|
38,624 |
|
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization
|
|
$ |
39,746 |
|
|
$ |
123,166 |
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
808,254 |
|
|
$ |
1,864,325 |
|
|
Prepacyte®-CB
|
|
|
(1,870,329 |
) |
|
|
(1,887,594 |
) |
|
|
|
|
|
|
|
|
|
|
Total operating loss
|
|
$ |
(1,062,075 |
) |
|
$ |
(23,269 |
) |
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
199,439 |
|
|
$ |
781,971 |
|
|
Prepacyte®-CB
|
|
|
— |
|
|
|
22,265 |
|
|
|
|
|
|
|
|
|
|
|
Total interest expense
|
|
$ |
199,439 |
|
|
$ |
804,236 |
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
898,838 |
|
|
$ |
697,103 |
|
|
Prepacyte®-CB
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Total income tax benefit
|
|
$ |
898,838 |
|
|
$ |
697,103 |
|
|
|
|
|
|
|
|
|
|
|