Cryo-Cell International, Inc. (CCEL) - Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended February 28, 2026. Cryo-Cell International, Inc. operates in three segments: private cord blood and tissue storage, manufacture of PrepaCyte CB processing units, and public cord blood banking. The company is headquartered in Oldsmar, Florida, with storage facilities in Durham, North Carolina. As of April 14, 2026, there were 8,055,150 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenue | $7,683,117 | $7,968,880 |
| Net Income | $47,108 | $282,855 |
| Operating Income | $765,134 | $1,056,011 |
| Net Cash from Operating Activities | $651,827 | $954,063 |
| Cash and Cash Equivalents (End of Period) | $249,672 | $223,122 |
| Total Debt (Current + Long-Term) | $9,918,711 | $10,653,780 |
| Stockholders' Deficit | ($18,400,272) | ($18,605,929) |
Note: Total Debt includes $1,600,000 in line of credit and $8,318,711 in net note payable obligations.
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 4% to $7.68 million. This was driven by a 16% drop in new domestic cord blood specimens processed and a significant 98% decline in public banking revenue ($1,410 vs. $82,079).
- Profitability Compression: Net income fell 83% to $47,108. Operating income decreased 28% to $765,134.
- Expense Increases: Selling, general, and administrative (SG&A) expenses rose 8% to $5.01 million. This increase was primarily due to legal fees and expert opinion expenses of approximately $1.23 million related to the ongoing arbitration with Duke University, compared to $206,000 in the prior year.
- Investment Losses: The company recorded a loss on marketable securities of $240,458, compared to $31,401 in the prior year.
- Debt Reduction: The company reduced its line of credit balance from $2.3 million to $1.6 million during the quarter.
Outlook, Risks, and Contingencies
- Duke University Arbitration: The company is engaged in a significant legal dispute with Duke University regarding a Patent and Technology License Agreement. Cryo-Cell alleges fraudulent inducement and breach of contract, seeking damages exceeding $100 million. Duke has counterclaimed and terminated the agreement as of May 17, 2025. A final hearing is scheduled for late April 2026.
- Strategic Pause: Due to the Duke dispute, the company has paused the opening of the Cryo-Cell Institute for Cellular Therapies and placed the proposed spinoff of its subsidiary, Celle Corp., on hold. Future investment in Duke-related activities is suspended pending resolution.
- Listing Compliance Risk: On March 9, 2026, the company received notice from NYSE American of non-compliance with continued listing standards (Section 1003(a)). A compliance plan was submitted on April 8, 2026. Failure to regain compliance could result in delisting, which would adversely affect liquidity and stock price.
- Liquidity: Management anticipates that cash, marketable securities, and operating cash flows will be sufficient to fund needs for the next 12 months. However, future capital needs remain uncertain depending on the outcome of the Duke arbitration.
Investor Verification Checklist
- NYSE American Compliance: Verify the status of the compliance plan submitted to NYSE American and the likelihood of avoiding delisting.
- Duke Arbitration Timeline: Monitor the April 2026 hearing date and any updates regarding the $100 million+ damages claim and Duke's counterclaims.
- Revenue Trends: Assess the sustainability of the 16% decline in new domestic specimen processing and the near-total collapse of public banking revenue.
- Legal Expense Run-Rate: Evaluate if the $1.23 million in legal fees for the quarter is a one-time spike or indicative of ongoing costs for the arbitration.
- Debt Covenants: Confirm continued compliance with the Susser Bank Credit Agreement covenants (leverage ratio and debt service coverage ratio) given the reduction in operating income.