v3.26.3
Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2026
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The Company’s unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and in accordance with the U.S. Securities and Exchange Commission’s (“SEC”) rules for the presentation of interim financial statements, which permit certain disclosures to be condensed or omitted. These financial statements should be read in conjunction with the Company’s annual financial statements as of and for the year ended December 31, 2025, included in the Annual Report on Form 10-K. The unaudited condensed consolidated financial statements include the accounts of wholly owned subsidiaries, after elimination of intercompany accounts and transactions. The unaudited condensed consolidated financial information presented herein includes all financial information that, in the opinion of management, is necessary for a fair statement of consolidated financial position, results of operations and cash flows for the periods presented.

 

 
Use of Estimates

Use of Estimates

 

The preparation of the Company’s condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, assumptions related to the Company’s goodwill and intangible asset impairment assessments, determination of incremental borrowing rates, accrual of research and development expenses, and the valuations of inventory, contingent consideration, short-term debt, stock options and stock warrants. The Company based its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

 
Fair Value Measurements

Fair Value Measurements

 

Certain assets and liabilities of the Company are presented at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities presented at fair value are classified and disclosed in the following hierarchy:

 

●Level 1 — Observable quoted prices in active markets for identical assets or liabilities.

 

●Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

 

●Level 3 — Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

 
Revenue Recognition

Revenue Recognition

 

The Company generates revenue from (i) sales of degenerative disease products Biovance®, Biovance 3L®, CentaFlex®, and Interfyl® (ii) sales of biobanking umbilical cord and placental blood and tissue collection, processing and storage services and (iii) license, royalty and other arrangements. See the unaudited condensed consolidated statements of operations for net sales by category.

 
Concentrations of Credit Risk and Significant Customers and Allowance for Doubtful Accounts

Concentrations of Credit Risk and Significant Customers and Allowance for Doubtful Accounts

 

Financial instruments that subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and restricted cash, and accounts receivable. The Company generally maintains balances in various operating accounts at financial institutions that management believes to be of high credit quality, in amounts that may exceed federally insured limits. The Company has not experienced any losses related to its cash and cash equivalents or restricted cash and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

 

The Company is subject to collection risk from trade accounts receivable related to both degenerative disease product sales and biobanking services. The Company provides for estimates of uncollectible accounts receivable based on historical collection experience, the age of accounts receivable balances, and the credit quality of its customers. All product and services customers are in the United States. As of March 31, 2026, two of the Company’s customers, each of which individually comprised at least 10%, represented an aggregate 36% of the Company’s outstanding gross accounts receivable. As of December 31, 2025, two of the Company’s customers, each of which individually comprised at least 10%, represented an aggregate 37% of the Company’s outstanding gross accounts receivable.

 

 

During the three months ending March 31, 2026, the Company had two customers, each of which individually comprised at least 10%, provide for an aggregate 37% of revenue. During the three months ending March 31, 2025, the Company had two customers, each of which individually comprised at least 10%, provide for an aggregate 50% of revenue.

 
Equity Method Investments

Equity Method Investments

 

The Company accounts for its investment in Defeye, Inc. using the equity method. Defeye’s shares are not publicly traded and their fair value is not readily determinable. The Company uses the measurement alternative under ASC 321; the investment was recorded at cost, adjusted for observable price changes in orderly transactions for the same or similar securities of Defeye. In the fourth quarter of 2025, the Company determined that the fair value of the investment was fully impaired due to uncertain market prospects and was expensed.

 
Net Income (Loss) per Share

Net Income (Loss) per Share

 

Basic net income (loss) per share of common stock is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during each period. Diluted net income (loss) per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as redeemable convertible preferred stock, convertible debt, stock options, restricted stock units and warrants, which would result in the issuance of incremental shares of common stock. The dilutive effect of stock options, restricted stock units and warrants is computed using the treasury stock method, and the dilutive effect of convertible preferred stock and convertible debt is computed using the if-converted method. However, potential common shares are excluded if their effect is anti-dilutive. The Company uses the two-class method, because certain warrants are participating securities that participate in dividends with Class A common stock for basic net loss per share. Under the two-class method, undistributed earnings are allocated between Class A common stock and the participating warrants based on their respective rights to receive dividends. Net losses are not allocated to the participating warrants because the holders do not have a contractual obligation to share in the Company’s losses; accordingly, the net loss for the three months ended March 31, 2025 was not allocated to the warrants, while net income for the three months ended March 31, 2026 was allocated as described above.

 

The computation of basic and diluted net income (loss) per share was as follows:

 

   2026   2025 
   Three Months Ended March 31, 
   2026   2025 
Numerator:          
Net income (loss)  $874   $(19,754)
Earnings allocated to participating warrants   (199)   - 
Net income (loss) allocated to common shareholders  $675   $(19,754)
           
Denominator:          
Weighted-average shares outstanding - basic   29,068,076    23,530,877 
Effect of dilutive securities:          
Stock options   2,555    — 
Preferred stock   1,229,373    — 
Weighted-average shares outstanding - diluted   30,300,004    23,530,877 
           
Net income (loss) per share:          
Basic  $0.02   $(0.84)
Diluted  $0.02   $(0.84)

 

 

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of Class A common stock outstanding as they would be anti-dilutive:

 

   2026   2025 
   March 31, 
   2026   2025 
Stock options   3,945,712    3,941,137 
Restricted stock units   624,193    581,832 
Market condition stock units   28,665    — 
Warrants   25,774,577    10,133,302 
Convertible debt   1,807,229    1,195,302 
Total   32,180,376    15,851,573 

 
Segment Information

Segment Information

 

The Company’s Chief Executive Officer is the chief operating decision maker and manages Company operations in three distinct businesses segments: Cell Therapy, BioBanking and Degenerative Disease. Assets are not tracked at a segment level.

 
Allowance for Credit Losses

Allowance for Credit Losses

 

The Company recognizes credit losses based on forward-looking current expected credit losses. The Company makes estimates of expected credit losses based upon its assessment of various factors, including historical collection experience, the age of accounts receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers.

 
Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

 

The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its financial statements.

 

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, as subsequently amended by ASU 2025-01 to clarify the effective date, which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of operations and comprehensive loss. The guidance in this ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the consolidated financial statements. The Company is currently evaluating the impacts of the adoption of ASU 2025-11 on the consolidated financial statements

 

In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Scope Application of Profits Interest and Similar Awards and Accounting for Certain Share-Based Payment Awards Issued to a Customer. This update clarifies how to determine whether a profits interest or similar award should be accounted for under Topic 718 and provides guidance on accounting for share-based payment awards granted to customers in conjunction with revenue arrangements. The ASU removes the option to elect a policy to account for forfeitures as they occur, instead requiring entities to estimate forfeitures. The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impacts of the adoption of ASU 2025-11 on the consolidated financial statements

 

In September 2025, the FASB issued ASU No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration From a Customer in a Revenue Contract. ASU 2025-07 introduces guidance for applying derivative accounting to contracts that include features tied to the operations or activities of one of the parties to the contract. It also aims to reduce diversity in how share-based payments are accounted for in revenue contracts. ASU 2025-07 will be effective for the annual periods beginning after December 15, 2026 with early adoption permitted. The Company is currently evaluating the potential impact that the adoption of this standard will have on the consolidated financial statements.