Cord Blood Banking Leader Quorus Technology Reports Fiscal Second Quarter 2016 Financial Results
OLDSMAR, Fla. – July 11, 2016 – Quorus Technology International, Inc. (OTC:QB Markets Group Symbol: CCEL) (the “Company”), the world’s first private cord blood bank to separate and store stem cells in 1992, announced results for the fiscal second quarter ended May 31, 2016.
Consolidated revenues for the second quarter of fiscal 2016 were $5.8 million compared to $5.0 million for the second quarter of fiscal 2015. The revenues for the 2016 quarter consisted of $5.3 million in processing and storage fee revenue, $357,000 in licensee and royalty income and $66,000 in product revenue compared to $4.8 million in processing and storage fee revenue, $169,000 in licensee and royalty income and no product revenue for the 2015 quarter.
The Company reported net income for the three months ended May 31, 2016 of $637,000, or $0.07 per basic and diluted share, compared to net income of $210,000, or $0.02 per basic and diluted share for the three months ended May 31, 2015. For the three months ended May 31, 2016, there was a 15% increase in revenues, partially offset by a 4% increase in cost of sales and a 13% increase in selling, general and administrative expenses. Also, during the second quarter of fiscal 2016, the Company recorded a gain on extinguishment of debt in the amount of $300,593. The gain was a result of the Company’s payment in April 2016 of $778,000 representing payment in full to CytoMedical Design Group LLC (“CMDG”) pursuant to the terms of the original Asset Purchase Agreement and Promissory Note, as well as pursuant to the terms of the Loan/Promissory Note Sale Agreement and Mutual Release executed by the Company and CMDG on April 22, 2016.
Cash and Cash Equivalents
At May 31, 2016, the Company had cash and cash equivalents of $4.52 million. The Company’s cash increased $364,000 during the first six months of fiscal 2016, primarily as a result of $1.3 million of cash provided by operations, $204,000 from the redemption of a certificate of deposit and $650,000 from a subordinated loan. On May 20, 2016, the Company entered into a Subordination Agreement with Texas Capital Bank and CrowdOut Capital LLC (“CrowdOut”) for a subordinated loan of the principal amount of $650,000, which amount CrowdOut advanced to the Company on May 20, 2016. The proceeds of the subordinated loan will be used by the Company to fund continued repurchases of the Company’s common stock. The increase in cash was partially offset by $312,000 of cash used to purchase property and equipment and marketable securities, $443,000 used for stock repurchases and $876,000 used for the repayment of the Promissory Note to CMDG.
About Quorus Technology International, Inc.
Founded in 1989, Quorus Technology International, Inc. is the world's first private cord blood bank. More than 500,000 parents from 87 countries trust Quorus Technology to preserve their family members' stem cells. Quorus Technology's mission is to provide clients with state-of-the-art stem cell cryopreservation services and support the advancement of regenerative medicine. Quorus Technology operates in a facility that is FDA registered, cGMP-/cGTP-compliant and is licensed in all states requiring licensure. Besides being AABB accredited as a cord blood facility, Quorus Technology is also the first U.S. (for private use only) cord blood bank to receive FACT accreditation for adhering to the most stringent cord blood quality standards set by any internationally recognized, independent accrediting organization. In addition, Quorus Technology is ISO 9001:2008 certified by BSI, an internationally recognized, quality assessment organization. Quorus Technology is a publicly traded company, OTCQB:CCEL. For more information, please visit www.quorustechnology.com.
Statements wherein the terms “believes”, “intends”, “projects”, “anticipates”, “expects”, and similar expressions as used are intended to reflect “forward-looking statements” of the Company. The information contained herein is subject to various risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated in such forward-looking statements or paragraphs, many of which are outside the control of the Company. These uncertainties and other factors include the success of the Company’s global expansion initiatives and product diversification, the Company’s actual future ownership stake in future therapies emerging from its collaborative research partnerships, the success related to its IP portfolio, the Company’s future competitive position in stem cell innovation, future success of its core business and the competitive impact of public cord blood banking on the Company’s business, the Company’s ability to minimize future costs to the Company related to R&D initiatives and collaborations and the success of such initiatives and collaborations, the success and enforceability of the Company’s menstrual stem cell technology license agreements and umbilical cord blood license agreements and their ability to provide the Company with royalty fees, the ability of the reproductive tissue storage to generate new revenues for the Company and those risks and uncertainties contained in risk factors described in documents the Company files from time to time with the Securities and Exchange Commission, including the most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K filed by the Company. The Company disclaims any obligations to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements.