Executive Summary

Q3 2021 revenue was $7.50M, down 8% year over year from $8.11M, while net income rose to $0.86M and diluted EPS held at $0.10; sequentially, revenue improved vs Q2 2021’s $7.21M but EPS fell from $0.14 diluted due to higher SG&A and amortization tied to the Duke license .
Mix shift: recurring annual storage fees grew 8% YoY, but average selling price declined 37% YoY and license/royalty income dropped to $0 (India licensee cap reached), pressuring revenue growth despite stable volumes .
Strategic transformation continued under the Duke University Patent & Technology License; Q3 included ~$240K amortization from the license and incremental SG&A spend for the Institute for Cellular Therapies, supporting a vertical integration strategy into biopharma manufacturing and clinics .
Key near-term catalysts: execution on clinic/manufacturing plans and clarity on minimum royalty obligations to Duke ($0.5M in Year 2 scaling to $5.0M annually in Year 5+), alongside discretionary capex (~$10M over 12 months), which may shape cash deployment and investor sentiment .

What Went Well and What Went Wrong

Stable profitability despite revenue headwinds: Operating income of $1.60M and net income of $0.86M in Q3, up YoY, with disciplined cost management and lower contingent consideration liability versus prior year .
Recurring storage resilience: Annual storage fees rose 8% YoY, offsetting weaker new processing fees and product sales, demonstrating durability of the installed base .
Strategic progress: “We are proud to report another quarter of solid financial results even with the additional expenses related to our transformation into a vertically integrated, cellular therapy company,” said Chairman and Co-CEO David Portnoy, reinforcing commitment to the Duke-enabled therapy strategy .

Pricing pressure: Average selling price fell 37% YoY, compressing top-line despite stable volumes; product revenues also declined materially (Q3 product revenue $18K vs $83K YoY), highlighting near-term mix/price headwinds .
SG&A and amortization step-up: SG&A increased 3% YoY on Institute build-out and patent maintenance; amortization rose due to the Duke license, weighing on EPS sequentially vs Q2 .
License/royalty income dropped to $0: India licensee reached its lifetime cap (~$10M), removing a prior recurring revenue stream (Q3 2020 licensee income was $428K) .

Metric	Q3 2020	Q1 2021	Q2 2021	Q3 2021
Revenue ($USD Millions)	$8.114	$6.860	$7.210	$7.504
Net Income ($USD Millions)	$0.784	$0.694	$1.170	$0.856
EPS - Basic ($)	$0.10	$0.09	$0.15	$0.10
EPS - Diluted ($)	$0.10	$0.08	$0.14	$0.10
Operating Income ($USD Millions)	$2.480	—	—	$1.596

Notes: No Wall Street consensus estimates available from S&P Global for Q3 2021; comparisons vs estimates are not presented.

Segment revenue and profitability (Q3 2021 vs Q3 2020):

Segment	Q3 2020 Revenue ($)	Q3 2021 Revenue ($)	Q3 2020 Operating Income ($)	Q3 2021 Operating Income ($)
Umbilical cord blood & tissue service	$7,914,732	$7,326,516	$2,736,798	$1,941,976
PrepaCyte-CB	$82,800	$18,200	$21,291	$(42,193)
Public cord blood banking	$116,826	$158,936	$(277,868)	$(303,445)

Key KPIs and balance/cash indicators (Q3 2021):

KPI	Q3 2021	Q3 2020 / Prior Reference
Cash & Cash Equivalents	$7,700,806	$8,107,608 (9M 2020 end)
Deferred Revenue (Short/Long)	$9,326,124 / $30,395,653	$9,183,450 / $27,200,910 (FY20)
Accounts Receivable (net)	$5,449,313	$6,322,960 (FY20)
Public Bank Inventory Units	~6,000 units	—
Average Selling Price change YoY	Down 37%	—
Recurring Annual Storage Fees YoY	Up 8%	—

Metric	Period	Previous Guidance	Current Guidance	Change
Discretionary Capex (software, equipment, Duke obligations)	Next 12 months	Not previously specified	~$10,000,000	New disclosure
Minimum Annual Royalties to Duke	Year 2 / 3 / 4 / 5+	Not previously specified	$0.5M / $1.0M / $2.5M / $5.0M annually	New contractual obligations
Strategic Plan Narrative (triad: bank, manufacturing, clinics)	Multi-year	Strategic exploration	Execute on biopharma manufacturing (post BLA/EUA) and clinic services under FDA EAP	Expanded scope

Management did not provide quantitative revenue/EPS margin guidance ranges in Q3 materials .

No Q3 2021 earnings call transcript was found in the filing set; themes are synthesized from Q3 10-Q and press releases.

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3 2021)	Trend
Technology/biopharma initiatives (Duke license)	Q1: License signed; future opportunities with Duke; Q2: amortization begins and operations planning	Continued build-out; $240K amortization; Institute development spend; vertical integration narrative	Advancing execution; costs ramping
Pricing/ASP	Not highlighted	Average selling price down 37% YoY	Pricing pressure intensified
Recurring storage vs new processing	Q1/Q2: resilience amid COVID; declines in new specimens	Recurring storage up 8% YoY; minimal change in new domestic specimens	Base stable; new adds soft
Supply chain/inflation	Not emphasized	Higher lab supply costs drove COGS increase	Cost inflation pressure
License/royalty (India)	Ongoing royalties; cap approaching	Licensee income $0 as cap reached (~$10M lifetime)	Royalty tail ended
COVID/macro	Q1/Q2: consumer confidence/birth trends affected demand	Ongoing impact to new client/public banking sales	Persistent headwind

“We are proud to report another quarter of solid financial results even with the additional expenses related to our transformation into a vertically integrated, cellular therapy company.” — David Portnoy, Chairman & Co-CEO .
“We are actively working on our plans for the future, which include many new opportunities related to our licensing agreement with Duke University and look forward to sharing more details in the near future.” — David Portnoy .
The Company plans to expand to a triad of core business units (cord blood bank, biopharmaceutical manufacturing, and clinics), leveraging Duke’s IP, regulatory data, and clinical protocols under the FDA’s Expanded Access Program .

No earnings call transcript or Q&A was filed for Q3 2021; therefore, no management Q&A clarifications are available from primary sources during the period [ListDocuments earnings-call-transcript returned 0].

Wall Street consensus EPS and revenue estimates via S&P Global were unavailable for Q3 2021; as a result, we cannot present a beat/miss analysis versus consensus. Values retrieved from S&P Global were unavailable due to request limits; management did not provide quantitative guidance ranges ].

Core storage revenue durability (up 8% YoY) offsets near-term ASP declines; monitoring pricing discipline and promotional activity is key for margin trajectory .
The cessation of India license/royalty income removes a prior contributor; replacement growth must come from new client adds, pricing normalization, and Duke-enabled therapy commercialization .
Operating leverage is sensitive to supply cost inflation and SG&A tied to Institute/Patent maintenance; sequential EPS fell vs Q2 despite revenue uptick, highlighting investment phase dynamics .
Upcoming cash commitments (minimum royalties to Duke and ~$10M capex over 12 months) warrant close attention to operating cash flow and balance sheet flexibility (cash $7.7M at Q3) .
Stock catalysts: tangible milestones on clinic opening, manufacturing readiness (BLA/EUA paths), and early therapy program traction under FDA EAP could re-rate the narrative from storage provider to integrated cell therapy platform .
Risks: continued ASP pressure, lingering COVID demand impacts, and execution risk on biopharma/clinic strategy could weigh on near-term profitability .