Commitments and Contingencies
|9 Months Ended
Aug. 31, 2022
|Commitments and Contingencies Disclosure [Abstract]
|Commitments and Contingencies
Note 9 – Commitments and Contingencies
The Company has employment agreements in place for certain members of management. These employment agreements are for periods ranging from to two years and contain certain provisions for severance payments in the event of certain events, including termination or change of control.
Purchase Contract - New Property
On March 14, 2022, the Company entered into a $11.2 million purchase contract with Scannell Properties #502, LLC (“Scannell”) for a 56,000 square foot facility located near the Research Triangle Park in the Regional Commerce Center in Durham, North Carolina (the “New Facility”). Pursuant to the Agreement, on March 16, 2022, the Company transferred an initial earnest deposit of $200,000. On June 10, 2022, the Company exercised its right to extend the closing date and transferred an additional deposit of $50,000 for a closing extension. On July 18, 2022, the Company completed the purchase of the property. The Company transferred $2,240,000 from cash on hand and financed the remaining balance of $8,960,000 with a term loan from Susser Bank (see Note 5). The New Facility has space for not only its existing and future internal storage needs, but also has the capacity to offer third party pharmaceutical companies and medical institutions cold storage services (“ExtraVault” – see www.extravault.com), to set up a cellular therapy laboratory to manufacture mesenchymal stromal cells from cord tissue (“MSCs) and the space to consolidate the Cryo-Cell Institute for Cellular Therapies under the same roof.
The Company anticipates this New Facility will expand the Company’s cryopreservation and cold storage business by introducing a new service, ExtraVault (www.extravault.com). With over 30 years of experience in handling biological specimens for both research and clinical use, Cryo-Cell intends to leverage this expertise and offer these biorepository services to biopharmaceutical companies and healthcare institutions. The new facility is being constructed to offer state-of-the-art biologic, reagent and vaccine storage at cost effective prices. A robust inventory management system is planned to be implemented that Cryo-Cell believes will allow customers to view their own inventory through a customer portal and place distribution orders online. As a result, it is anticipated ExtraVault will provide expertise, experience, customer electronic access and cost sensitive solutions to the Company’s partners in the biopharma and healthcare industries.
Contract to Sell Property
On June 10, 2022, the Company entered into a $1.85 million Agreement for Purchase and Sale of Improved Real Property with HFK Properties, LLC to sell the 8,800 square foot medical condominium building in Durham that was purchased by the Company in fiscal 2021. The building was originally purchased to become the Cryo-Cell Institute for Cellular Therapies which will now be in the new facility (see above). HFK Properties, LLC transferred the initial earnest deposit of $50,000 into escrow on June 15, 2022. The closing date is expected to be in the fourth quarter of fiscal 2022.
On August 19, 2022, the Board of Directors of the Company declared a one-time, special cash dividend of $0.90 per share of common stock to be paid to its stockholders of record as of the close of business on September 2, 2022. The total paid by the Company was $7,672,728. The special dividend was funded by a revolving line of credit from Susser Bank (see Note 5).
The Company is not currently a party to any legal proceedings. However, from time to time, the Company may be subject to proceedings, lawsuits, contract disputes and other claims in the normal course of its business. It is possible, if the Company becomes subject to any such proceeding, that there could be an unfavorable ultimate outcome for or resolution of any such claim, which could be material to the Company’s results of operations for a particular quarterly reporting period. Litigation is inherently uncertain and there can be no assurance that the Company will prevail. The Company does not include an estimate of legal fees and other related defense costs in its estimate of loss contingencies.