Cryoport, Inc. — Form 10-K Summary
Reporting period: Fiscal year ended March 31, 2015. The filing also provides unaudited results for the quarter ended March 31, 2015; this is not a standalone quarterly 10-K. Financial and per-share data reflect the 1-for-12 reverse stock split effective May 19, 2015.
Business context
Cryoport provides cryogenic logistics to life sciences customers, combining reusable liquid-nitrogen dry-vapor shippers, shipment monitoring, the Cryoportal logistics platform, and logistics services. Its shippers are designed to maintain temperatures of -150°C or below. FedEx, DHL, and UPS were distribution partners; Zoetis was its largest customer.
Financial results and liquidity
| Metric | FY2015 | FY2014 |
|---|---|---|
| Revenue | $3.935 million | $2.660 million |
| Gross profit / margin | $1.169 million / 29.7% | $0.437 million / 16.4% |
| Operating loss | $5.593 million | $5.078 million |
| Net loss | $7.027 million | $19.565 million |
| Net loss attributable to common stockholders | $12.197 million | $19.565 million |
| Interest expense | $1.428 million | $0.784 million |
- Revenue grew 47.9%, driven by more customers and shipments, reproductive-medicine growth, and expanded Zoetis services. Reproductive-medicine revenue was $924,300, up 59%; Zoetis revenue was $893,200, up 9%.
- Gross margin improved as freight costs declined as a share of revenue and fixed manufacturing costs decreased. SG&A rose 25.5% to $6.409 million, largely from sales expansion, investor relations, equity compensation, and public-company costs.
- FY2015 operating cash use was $4.128 million; investing cash use was $70,100; financing provided $5.233 million. Cash was $1.405 million at year-end, versus $370,000 a year earlier. Working capital was negative $835,000 and stockholders’ deficit was $416,000.
- At March 31, liabilities totaled $3.023 million, including $535,500 of notes payable and $1.003 million of related-party notes payable. The $915,000 7% secured bridge notes were repaid in April 2015.
- For the March 2015 quarter, unaudited revenue was $1.198 million, gross profit $370,000, operating loss $1.693 million, and net loss $1.937 million.
Changes, outlook, and key risks
- FY2014 included a $13.714 million non-cash induced debt-conversion expense. FY2015 instead included a $4.864 million preferred-stock beneficial-conversion charge and $305,000 of undeclared cumulative preferred dividends in the loss attributable to common stockholders.
- The company reported recurring losses and negative operating cash flows since inception. Its auditor cited substantial doubt about its ability to continue as a going concern. Management expected available cash, subsequent preferred-stock proceeds, and operating revenue to fund planned operations into Q3 FY2016, but said additional capital would be needed thereafter. It anticipated seeking up to $15 million through a public offering; financing availability and terms were uncertain.
- After year-end, Cryoport raised $4.2 million gross (approximately $3.6 million after offering costs) from additional Class B preferred stock through May 18, 2015. The company reported $2.1 million of cash as of May 8.
- No numerical revenue or profitability guidance was provided. Management cited customer adoption, commercialization, sales expansion, and cost control as important to future performance.
- Major risks include financing and dilution, lengthy customer qualification cycles, reliance on large customers and distribution partners without minimum-volume commitments, execution of sales growth, third-party carrier and supplier dependence, software-development reliance, and product, regulatory, and intellectual-property risks. One customer represented 22.7% of FY2015 revenue; the United States accounted for 84.3% of revenue.
- Management reported effective disclosure controls and internal control over financial reporting as of March 31, 2015. The filing disclosed no legal proceedings believed likely to have a material adverse effect.
Investor facts to verify
- Whether Cryoport secured sufficient financing after the reported preferred-stock proceeds, and how long available liquidity supports operations.
- Whether revenue growth and gross-margin improvement continued, particularly from Zoetis, reproductive medicine, and the FedEx, DHL, and UPS channels.
- The current status and terms of outstanding preferred stock, related-party debt, warrants, and potential share dilution.
- Customer concentration, including the largest customer’s continued share of revenue and receivables.
- Whether the company’s going-concern outlook, cash burn, and planned public offering changed in subsequent filings.