Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.10.0.1
Segment Reporting
9 Months Ended
Aug. 31, 2018
Segment Reporting [Abstract]  
Segment Reporting

Note 6Segment 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