| Segment Reporting |
Note 6 – Segment Reporting
During the third quarter of fiscal 2018, the Company purchased the
assets and assumed contracts that Cord: Use 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 three 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”).
|
| |
3. |
The cellular processing and cryogenic storage of
umbilical cord blood stem cells for public use. Revenue is
generated from the sale of the cord blood units to the National
Marrow Donor Program (“NMDP”) , which distributes the
cord blood units to transplant centers located in the United
States, and around the world.
|
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, 2018:
|
|
|
|
|
|
|
|
|
| |
|
For the three months
ended August 31, 2018 |
|
|
For the nine months
ended August 31, 2018 |
|
|
Net revenue
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
7,776,339 |
|
|
$ |
20,475,020 |
|
|
Prepacyte®-CB
|
|
|
29,308 |
|
|
|
84,208 |
|
|
Public cord blood banking
|
|
|
65,575 |
|
|
|
65,575 |
|
|
|
|
|
|
|
|
|
|
|
Total net revenue
|
|
$ |
7,871,222 |
|
|
$ |
20,624,803 |
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
2,149,778 |
|
|
$ |
5,431,359 |
|
|
Prepacyte®-CB
|
|
|
27,740 |
|
|
|
124,805 |
|
|
Public cord blood banking
|
|
|
308,662 |
|
|
|
308,662 |
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales
|
|
$ |
2,486,180 |
|
|
$ |
5,864,826 |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
43,008 |
|
|
$ |
97,674 |
|
|
Prepacyte®-CB
|
|
|
9,064 |
|
|
|
27,191 |
|
|
Public cord blood banking
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Total depreciation and amortization
|
|
$ |
52,072 |
|
|
$ |
124,865 |
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
1,170,704 |
|
|
$ |
3,521,625 |
|
|
Prepacyte®-CB
|
|
|
(7,496 |
) |
|
|
(67,788 |
) |
|
Public cord blood banking
|
|
|
(243,086 |
) |
|
|
(243,087 |
) |
|
|
|
|
|
|
|
|
|
|
Total operating income
|
|
$ |
920,122 |
|
|
$ |
3,056,995 |
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
410,366 |
|
|
$ |
995,437 |
|
|
Prepacyte®-CB
|
|
|
— |
|
|
|
— |
|
|
Public cord blood banking
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Total interest expense
|
|
$ |
410,366 |
|
|
$ |
995,437 |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
(303,072 |
) |
|
$ |
(3,821,660 |
) |
|
Prepacyte®-CB
|
|
|
— |
|
|
|
— |
|
|
Public cord blood banking
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Total income tax expense
|
|
$ |
(303,072 |
) |
|
$ |
(3,821,660 |
) |
|
|
|
|
|
|
|
|
|
The following table shows the assets by segment as of
August 31, 2018 and November 30, 2017:
|
|
|
|
|
|
|
|
|
| |
|
As of August 31,
2018 |
|
|
As of November 30,
2017 |
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Umbilical cord blood and cord tissue stem cell service
|
|
$ |
26,300,294 |
|
|
$ |
23,360,715 |
|
|
Prepacyte®-CB
|
|
|
469,998 |
|
|
|
549,282 |
|
|
Public cord blood banking
|
|
|
15,880,068 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$ |
42,650,360 |
|
|
$ |
23,909,997 |
|
|
|
|
|
|
|
|
|
|
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
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 |
|
|
Public cord blood banking
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
Public cord blood banking
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
Public cord blood banking
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
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 |
) |
|
Public cord blood banking
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
— |
|
|
|
— |
|
|
Public cord blood banking
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
— |
|
|
|
— |
|
|
Public cord blood banking
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
Total income tax expense
|
|
$ |
(490,558 |
) |
|
$ |
(1,128,012 |
) |
|
|
|
|
|
|
|
|
|
|