0001019056-21-000307.txt : 20210517 0001019056-21-000307.hdr.sgml : 20210517 20210517163047 ACCESSION NUMBER: 0001019056-21-000307 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 65 CONFORMED PERIOD OF REPORT: 20210331 FILED AS OF DATE: 20210517 DATE AS OF CHANGE: 20210517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN CRYOSTEM Corp CENTRAL INDEX KEY: 0001468679 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISC HEALTH & ALLIED SERVICES, NEC [8090] IRS NUMBER: 264574088 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-54672 FILM NUMBER: 21931331 BUSINESS ADDRESS: STREET 1: 1 MERIDIAN ROAD CITY: EATONTOWN STATE: NJ ZIP: 07724 BUSINESS PHONE: 732-747-1007 MAIL ADDRESS: STREET 1: 1 MERIDIAN ROAD CITY: EATONTOWN STATE: NJ ZIP: 07724 FORMER COMPANY: FORMER CONFORMED NAME: R & A Productions, Inc. DATE OF NAME CHANGE: 20090720 10-Q 1 acryo_2q21.htm FORM 10-Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2021

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from    to   

 

Commission file number: 000-54672

 

American CryoStem Corporation

 

(Exact Name of Registrant as Specified in its Charter)

 

     
Nevada   26-4574088
(State or Other Jurisdiction of   (I.R.S. Employer
Incorporation or Organization)   Identification No.)

 

1 Meridian Road, Eatontown, NJ 07724

 

(Address of Principal Executive Offices)  (Zip Code)

 

(732) 747-1007

 

(Registrant’s Telephone Number, Including Area Code)

 

 

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading symbol(s) Name of each exchange on which registered
     

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

   
Large accelerated filer o Accelerated filer o
Non-accelerated filer x Smaller reporting company x
Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of May 15, 2021, the issuer’s $0.001 par value Common Stock totaled 60,833,131 shares outstanding.

 
 

TABLE OF CONTENTS

 

    Page No.
PART I. - FINANCIAL INFORMATION 3
Item 1. Consolidated Financial Statements. 3
Item 2. Management’s Discussion and Analysis of Financial Condition and Plan of Operations. 18
Item 3. Quantitative and Qualitative Disclosures About Market Risk. 37
Item 4 Controls and Procedures. 37
     
PART II - OTHER INFORMATION 38
Item 1. Legal Proceedings. 38
Item 1A. Risk Factors. 38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 38
Item 3. Defaults Upon Senior Securities. 38
Item 4. Mine Safety Disclosures. 38
Item 5. Other Information. 38
Item 6. Exhibits. 38
2
 

PART I. — FINANCIAL INFORMATION

 

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS.

American CryoStem Corporation

Consolidated Balance Sheets

As of March 31, 2021 and September 30, 2020

 

  31-Mar-21   30-Sep-20 
   Unaudited     
ASSETS        
Current Assets:          
Cash  $109,108   $41,760 
Accounts Receivable - net of allowance for bad debt   749,350    500,000 
Other Receivables   4,961     
Inventory   21,540    20,401 
Prepaid Expenses   46,900    5,000 
Total Current Assets   931,859    567,161 
           
Other Assets:          
Investment in Baoxin - at cost   300,000    300,000 
Security Deposit   13,540    13,540 
Patents and Patents Development - net of accumulated amortization   355,385    365,676 
Fixed Assets - net of accumulated depreciation   120,035    126,591 
Finance Lease - Right-of-Use-Asset   76,626    85,817 
Operating Lease Right-of-Use-Asset   2,631    18,064 
           
Total Assets  $1,800,076   $1,476,849 
           
LIABILITIES AND SHAREHOLDERS’ DEFICIT          
           
Current Liabilities:          
Accounts Payable & Accrued Expenses  $286,668   $181,924 
Legal & Accounting Payable   29,168    23,568 
Bridge Notes Payable   226,500    226,500 
Convertible Notes Payable   573,500    558,552 
PPP Loan - Current Portion   22,107    14,304 
Finance Lease Liability   6,917    26,722 
Operating Lease Liability   2,631    18,064 
Total Current Liabilities   1,147,491    1,049,634 
           
Long Term Liabilities:          
PPP Loan   1,300    9,103 
Accrued Executive Salaries   860,186    740,186 
Convertible Notes Payable   125,805     
Payable to Related Parties   147,775    99,125 
Total Liabilities   2,282,557    1,898,048 
           
Commitments and Contingencies   0    0 
           
Shareholders’ Deficit:          
Preferred Stock - $.0001 par value, 50,000,000 shares authorized, 0 shares issued and outstanding at March 31, 2021 and September 30, 2020   0    0 
Common Stock - $.001 par value, 300,000,000 shares authorized, 60,471,697 shares issued and outstanding at March 31, 2021 and 59,570,666 issued and outstanding at September 30, 2020   60,473    59,572 
Additional Paid in Capital   16,205,988    15,917,408 
Accumulated Deficit   (16,748,942)   (16,398,179)
Total Shareholders’ Deficit   (482,481)   (421,199)
           
Total Liabilities & Shareholders’ Deficit  $1,800,076   $1,476,849 
           

See the notes to the financial statements.

3
 

American CryoStem Corporation

Consolidated Statements of Operations

For the Six Months and the Three Months Ended March 31, 2021 and 2020

Unaudited

 

   6 months   3 months 
   31-Mar-21   31-Mar-20   31-Mar-21   31-Mar-20 
Revenues                    
Tissue Processing & Storage  $2,775   $11,900   $1,175   $11,900 
Product Sales   760    15,900    760    14,440 
Licensing Fees & Royalties   250,000    266,667    125,000    135,000 
Total Revenues   253,535    294,467    126,935    161,340 
Less Cost of Revenues   (8,090)   (16,710)   (4,789)   (11,522)
                     
Gross Margin   245,445    277,757    122,146    149,818 
                     
Operating Expenses                    
Research & Development   179,319    19,176    149,576     
Laboratory Expense   32,344    44,622    15,461    27,224 
Sales & Marketing   4,010    22,761    3,248    8,960 
Professional Fees   102,190    72,220    84,255    38,072 
Bad Debt Expense       326,800        324,800 
General & Administrative   251,209    234,246    144,680    102,887 
Total Operating Expenses   569,072    719,825    397,220    501,943 
                     
Net Gain (Loss) from Operations   (323,627)   (442,068)   (275,074)   (352,125)
                     
Other Income (Expenses):                    
Interest Income   3    22    1    22 
Laboratory Rent   3,000             
Gain on Value of Derivative       133,892        132,019 
Gain on write off of Liability   24,000    166,667        166,667 
Loss on Debt Settlement       (2,504)       (2,504)
Foreign Taxes       (13,808)       (7,247)
Loss on Loan Issuance       (92,951)        
Amortization of Debt Discount       (84,000)       (42,000)
Exchange Rate   86        86     
Interest Expense   (38,139)   (42,930)   (21,847)   (21,343)
Interest Expense (beneficial conversion feature-debenture)   (16,086)   (41,382)   (7,895)   (20,691)
Penalties       (25)       (25)
                     
Net Loss  $(350,763)  $(419,087)  $(304,729)  $(147,227)
                     
Basic & Fully Diluted Net Income (Loss) per Common Share:  $(0.006)  $(0.008)  $(0.005)  $(0.003)
                     
Weighted Average of Common Shares Outstanding - Basic & fully diluted   59,963,564    49,883,110    60,248,623    50,262,918 
                     

 See the notes to the financial statements.

4
 

American CryoStem Corporation

Consolidated Statements of Cash Flows

For the Six Months and the Three Months Ended March 31, 2021 and 2020

Unaudited

 

   31-Mar-21   31-Mar-20 
Operating Activities:          
Net loss  $(350,763)  $(419,087)
Adjustments to reconcile net loss items not requiring the use of cash:          
Gain on Write Off of Liability   (24,000)    
Derivative change in fair value       (133,892)
Loss on Loan Issuance       92,951 
Amortization of Debt Discount       84,000 
Bad Debt Expense       326,800 
Common Stock for Services   20,000     
Interest paid in Common Stock   26,148     
Interest Expense - Beneficial Conversion Feature   16,086    41,382 
Depreciation & Amortization Expense   45,274    16,689 
           
Changes in operating assets and liabilities          
Accounts Receivable   (249,350)   (249,941)
Related Party Receivable   (4,961)    
Prepaid expense   33,100     
Inventory   (1,139)   (11,253)
Accounts Payable and Accrued Expenses   134,344    (175,260)
Accrued Executive Compensation   120,000    120,000 
Deferred Revenue       (16,666)
Net cash used by operations   (235,261)   (324,277)
           
Investing activities:          
Purchase of equipment       (2,740)
Patents development   (19,236)   (5,190)
Net cash used by investing activities   (19,236)   (7,930)
           
Financing activities:          
Issuance of Common Shares   143,000    175,000 
Note Converted to Stock       168,000 
Issuance of Convertible Notes   150,000     
Paid down Finance Lease   (19,805)   (17,210)
Payable to related party   48,650    (6,166)
Net cash provided by financing activities   321,845    319,624 
           
Net change in cash   67,348    (12,583)
           
Cash balance at beginning of the period   41,760    23,800 
           
Cash balance at end of the period  $109,108   $11,217 
           
Supplemental disclosures of cash flow information:          
Interest paid during the period  $1,312   $3,907 
Income taxes paid during the period        
           

See the notes to the financial statements.

5
 

American CryoStem Corporation

Consolidated Statements of Changes in Shareholders’ Deficit

For the Six Months and the Three Months Ended March 31, 2021 and 2020

Unaudited

 

   Common   Par   Paid in   Accumulated   Total 
   Shares   Value   Capital   Deficit   Deficit 
Balance at September 30, 2019   49,387,918   $49,389   $13,931,500   $(15,218,894)  $(1,238,005)
                          
Issuance of common shares   875,000    875    174,125         175,000 
Net loss                  (419,087)   (419,087)
                          
Balance at March 31, 2020   50,262,918   $50,264   $14,105,625   $(15,637,981)  $(1,482,092)
                          
Balance at September 30, 2020   59,570,665   $59,572   $15,917,408   $(16,398,179)  $(421,199)
                          
Issuance of common shares   640,000    640    142,360         143,000 
Common Stock for Services   80,000    80    19,920         20,000 
Common Stock for Prepaid Expenses   100,000    100    74,900         75,000 
Common Stock for Interest   81,031    81    26,067         26,148 
Beneficial Conversion Feature             25,333         25,333 
Net loss                  (350,763)   (350,763)
                          
Balance at March 31, 2021   60,471,696   $60,473   $16,205,988   $(16,748,942)  $(482,481)
                          
Balance at December 31, 2019   50,262,918   $50,264   $14,105,625   $(15,490,754)  $(1,334,865)
                          
Net loss                  (147,227)   (147,227)
                          
Balance at March 31, 2020   50,262,918   $50,264   $14,105,625   $(15,637,981)  $(1,482,092)
                          
Balance at December 31, 2020   60,063,165   $60,064   $16,024,416   $(16,444,213)  $(359,733)
                          
Issuance of common shares   227,500    228    55,272         55,500 
Common Stock for Prepaid Expenses   100,000    100    74,900         75,000 
Common Stock for Interest   81,031    81    26,067         26,148 
Beneficial Conversion Feature             25,333         25,333 
Net loss                  (304,729)   (304,729)
                          
Balance at March 31, 2021   60,471,696   $60,473   $16,205,988   $(16,748,942)  $(482,481)

 

See the notes to the financial statements.

6
 

American CryoStem Corporation

Notes to the Consolidated Financial Statements

March 31, 2021

Unaudited

 

NOTE 1. Organization of the Company and Significant Accounting Policies

American CryoStem Corporation (the “Company”) is a publicly held corporation formed on March 13, 2009 in the state of Nevada as R&A Productions Inc. (R&A).

In April 2011, R&A purchased substantially all the assets and liabilities of American CryoStem Corporation (ACS) a company formed in 1987, for 21 million shares of common stock. ACS was deemed to be the accounting acquirer. At the date of the purchase, the former operations of R&A were discontinued and the name of the Company was changed to American CryoStem Corporation.

The Company is in the business of collecting adipose tissue, processing it to separate the adult stem cells, and preparing such stem cells for long-term storage. The process allows individuals to preserve their stem cells for future personal use in cellular therapy. The adipose derived stem cells are prepared and stored in their raw form without manipulation, bio-generation or the addition of biomarkers or other materials, making them suitable for use in cellular treatments and therapies offered by existing and planned treatment centers worldwide. Individualized collection and storage of adult stem cells provides personalized medicine solutions by making the patient’s own preserved stem cells available for future cellular therapies.

The Company’s first US Clinical Study (FDA file No. 19089) for its flagship cellular therapy product ATCell was initiated in September of 2020. The clinical study for Post Concussion Syndrome will establish safety and collect efficacy data for the use of ATCell delivered by infusion therapy. The Company is planning additional studies with collaborators which the Company expects to file upon completion of the protocol and submission and approval by the US Food and Drug Administration.

On December 3, 2020, the Company entered into a Cooperative Research and Development Agreement (CRADA) with Walter Reed National Military Medical Center (WRNMMC), the nation’s largest and most renowned joint military medical center serving the Army, Navy, Air Force and Marines located in Bethesda, Maryland. The Company maintains the rights to commercialize all technology developed under this CRADA Agreement. The technology is centered on creating in vitro (test tube) assays to standardize and commercialize new treatment protocols; optimizing quality control measures; and developing standardized protocol potency assays for precise therapy dosing.

The Company has devoted a significant amount of its time and resources to develop its technologies and intellectual property. These efforts have resulted in the development of cell lines, cell culture medium and other laboratory products which the Company believes are suitable for licensing and distribution by third parties. Additionally the Company has initiated a licensing program to license its technologies to laboratories currently processing other types of biologic materials including cord blood and general blood banks. The Company closed its first licensing agreement in 2014 and intends to pursue additional licensing partners in the future.

The accompanying consolidated financial statements include the accounts of American CryoStem Corporation and its wholly owned subsidiaries.  The Company’s subsidiaries are APAC CryoStem Limited, a Hong Kong company and APAC CryoStem (Shenzhen) Ltd. which were established to support its licensing agreement and operations, and collect the licensing fees in Hong Kong and China. Currently Mr. Arnone and Mr. Dudzinski serve as management and directors of both companies. All significant intercompany accounts and transactions have been eliminated in the consolidation. Management believes all amounts have been adjusted properly.

Accounting policies refer to specific accounting principles and the methods of applying those principles to present fairly the company’s financial position and results of operations in accordance with generally accepted accounting principles. The policies discussed below include those that management has determined to be the most appropriate in preparing the company’s financial statements.

The Consolidated Financial Statement Disclosures for the quarter ended March 31, 2021 are condensed and all necessary adjustments have been made. These Financial Statements should be read in conjunction with the Company’s Form 10K for the year ended September 30, 2020.

Use of Estimates – The preparation of the financial statements in conformity with United States generally accepted accounting principles (“GAAP”) uniformly applied requires management to make reasonable estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses at the date of the financial statements and for the period they include. Actual results may differ from these estimates.

Cash – For the purpose of calculating changes in cash flows, cash includes all cash balances and highly liquid short-term investments with an original maturity of three months or less. Occasionally, the Company maintains cash balances at financial institutions that exceed federally insured limits.

Accounting for Investments – The Company accounts for investments based upon the type and nature of the investment and the availability of current information to determine its value. Investments in marketable securities in which there is a trading market will be valued at market value on the nearest trading date relative to the Company’s financial reporting requirements. Investments which there is no trading market from which to obtain recent pricing and trading data for valuation purposes will be valued based upon management’s review of available financial information, disclosures related to the investment and recent valuations related to the investment’s fundraising efforts.

7
 

American CryoStem Corporation

Notes to the Consolidated Financial Statements

March 31, 2021

Unaudited

 

NOTE 1. Organization of the Company and Significant Accounting Policies (continued)

Revenue Recognition – Effective October 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective transition method. We recognized the cumulative effect of applying the new revenue standard to all contracts with customers that were not completed as of October 1, 2018. The comparative information has not been restated and continues to be reported under the accounting standards in effect for the periods presented, since there is no material effect on the presentation of the financial positions or statements of operations. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, certain collaboration arrangements and financial instruments. ASC 606 also impacts certain other areas, such as the accounting for costs to obtain or fulfill a contract. The standard also requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The adoption of ASC 606 did not have an impact on the amount of reported revenues. See Note 3 “Revenue Recognition” for additional information.

 

Advertising – Advertising Cost are reported as they are incurred. Advertising Costs were $370 and $222 for the six months ended and the three months ended March 31, 2021; and $0 for the six months ended March 31, 2020 and $0 for the three months ended March 31, 2020, which is included in Sales and Marketing Expenses within the Consolidated Statements of Operations.

 

Bad Debt Expense – The Company provides, through charges to income or loss, a charge for bad debt expense, which is based upon management’s evaluation of numerous factors. These factors include economic conditions prevailing, a predictive analysis of the outcome of the current portfolio by client, and prior credit loss experience of each client. The Company uses the information from this analysis to develop an estimate of bad debt reserve based upon the amount of accounts receivable by client at the balance sheet date. The Allowance for Doubtful Accounts was $337,515 at March 31, 2021 and $337,515 at September 30, 2020. See Note 12 for further explanation.

 

Inventory – Inventory is valued at lower of cost or market using the first in, first out method. Inventory consists of the disposables and materials used to create production kits, for processing of adipose tissue and cellular samples, the manufacture of Medias used to prepare the samples and cryoprotectant for the storage of the samples.

Inventory was composed of Raw Materials and Finished Goods, which was valued at $21,540 at March 31, 2021 and $20,401 at September 30, 2020.

 

Long Lived Assets – The Company reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount.

 

Fixed Assets – Fixed assets are stated at cost. Depreciation expense is computed using the straight-line method over the estimated useful life of the assets, which is estimated as follows:

 

Office Equipment 5 years
Lab Equipment & Furniture 7 years
Lab Software 5 years
Leasehold Improvements 15 years

 

Income taxes – The Company accounts for income taxes in accordance with generally accepted accounting principles which require an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between financial statement and income tax bases of assets and liabilities that will result in taxable income or deductible expenses in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period adjusted for the change during the period in deferred tax assets and liabilities.

8
 

American CryoStem Corporation

Notes to the Consolidated Financial Statements

March 31, 2021

Unaudited

 

NOTE 1. Organization of the Company and Significant Accounting Policies (continued)

The Company follows the accounting requirements associated with uncertainty in income taxes using the provisions of Financial Accounting Standards Board (FASB) ASC 740, Income Taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the positions will be sustained upon examination by the tax authorities. It also provides guidance for derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of March 31, 2021 and September 30, 2020, the Company has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. All tax returns from fiscal years 2014 to 2019 are subject to IRS and State of New Jersey audit.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments-Credit Losses.  The new guidance provides better representation about expected credit losses on financial instruments. This Update requires the use of a methodology that reflects expected losses and requires consideration of a broader range of reasonable and supportive information to inform credit loss estimates.  This ASU is effective for reporting periods beginning after December 15, 2022, with early adoption permitted.  The company is studying the impact of adopting the ASU in fiscal year 2024, and what effect it could have. The Company believes the accounting change would not have a material effect on the financial statements.

In November 2018, the FASB issued ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606. This new ASU applies to companies that have collaborative arrangements, or agreements that involve two parties that actively participate in a joint operating activity. We believe our contract with Baoxin falls under the collaborative arrangements guidance in (ASC 808). ASU 2018-18 is effective for public companies for years beginning after December 15, 2019. The Company has implemented ASU 2018-18 in Fiscal 2021.

Implementation of ASU 2018-18 has not affected prior or current revenue recognition, since according to the contract we bill License Fees for the use of our intellectual property and for any products shipped.

NOTE 2. Going Concern

The accompanying consolidated financial statements have been presented in accordance with generally accepted accounting principles in the U.S., which assume the continuity of the Company as a going concern. However, the Company has incurred significant losses since its inception which raises substantial doubt about the Company’s ability to continue as a going concern. Management has made this assessment for the period one year from date of the issuance of this report. Management’s plans with regard to this matter are to continue to fund its operations through fundraising activities in fiscal 2021 for future operations and business expansion.

NOTE 3. Revenue Recognition

Under ASC 606, we recognize revenue when our customer obtains control of promised goods or services in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform the following five steps:

a.Identify the contract(s) with a customer;
b.Identify the performance obligations in the contract;
c.Determine the transaction price;
d.Allocate the transaction price to the performance obligations in the contract; and
e.Recognize revenue when (or as) the performance obligations are satisfied.

 

We only apply the five step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception, if the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract, determine those that are performance obligations, and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

9
 

American CryoStem Corporation

Notes to the Consolidated Financial Statements

March 31, 2021

Unaudited

 

NOTE 3. Revenue Recognition (continued)

Our major sources of revenue during the reporting periods were 1. Tissue Collection, Processing and Storage revenue from various customers; 2. Annual Storage Fees for our ATGRAFT and ATCELL products, from customers who have stored in our laboratory facility, along with former Bio-Life and Cytori storage customers purchased by American CryoStem; 3. Licensing and other fees from Baoxin, Cell Source, CryoViva, Pepro-Tech and Personal Cell Sciences; and 4. Products sales revenues from Baoxin and CryoViva. The adoption of ASC 606 did not have an impact on the pattern or timing of recognition of our Tissue Processing, Storage Fees or Product Sales Revenue, since:

1.Tissue Collection, Processing & Storage Revenue is recognized on the date the process is completed and stored in our facility.
2.Storage Fees are charged annually.
3.Licensing and other Fees - This is based on the passage of time and as the customer has access to the license. The Company reviewed and analyzed the contract with Baoxin. Management’s judgments are:
a.Baoxin qualifies as a customer since American CryoStem does not take significant risks or receive significant gains from the agreement.
b.The right to use the license does not have significant standalone functionality because consulting is required by American CryoStem in order for the customer to be able to use the license.
c.The Company has determined as of the date of this report not to make an allowance upon recognition of the Baoxin revenue based upon review of Baoxin’s most recent audited financial statements, documentation provided by Baoxin concerning the completion of their new 100,000 sq ft facility during the pandemic and the ongoing uncertainties regarding the continuing effects of the COVID 19 pandemic in China.
4.The majority of our Product Sales Revenue continues to be recognized when the customer takes control of the product.

We believe our contract with Baoxin falls under the collaborative arrangements guidance in (ASC 808) from the FASB issued ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606. Implementation of ASU 2018-18 has not affected prior or current revenue recognition, since according to the contract, we bill License Fees for the use of our intellectual property and for any products shipped.

Revenue and Allowances

The following table provides information about Fees and Product Sales Revenue for the Six Months and Three Months ended March 31, 2021 and 2020.

Licensing & Other Fees  6 months
3-31-2021
   6 months
3-31-2020
   3 months
3-31-2021
   3 months
3-31-2020
 
Baoxin  $250,0 00   $250,000   $125,000   $125,000 
Cell Source       16,667        10,000 
Totals  $250,000   $266,667   $125,000   $135,000 
                     
Product Sales                    
Baoxin  $   $5,840   $   $4,380 
CryoViva       10,060        10,060 
Science Diagnostics   760        760     
Totals  $760   $15,900   $760   $14,440 
10
 

American CryoStem Corporation

Notes to the Consolidated Financial Statements

March 31, 2021

Unaudited

 

NOTE 3. Revenue Recognition (continued)

Performance Obligations

At contract inception, we assess the goods and services promised in our contracts and identify the performance obligations for each promise to transfer to the customer goods or to provide the customer with a service that is distinct. To identify the performance obligations, we consider all of the goods and services promised in the contract regardless of whether they are specifically stated or are implied by customary business practices. We determined that the following distinct goods or services represent separate performance obligations:

 

·ATGRAFT and ATCELL Customer Tissue Processing Fees
·ATGRAFT and ATCELL Customer Storage Fees
·Licensing and other Fees
·Supply of our Tissue Collection, Processing and Storage Products to Baoxin and CryoViva

We principally sell our products to end users, who have agreements with us to utilize our processing and storage technology. We provide processing and storage services to individual customers. We charge various fees for consulting services or licensing of our technologies; which includes processing and storage agreements, arrangements with biotechnology processing facilities for the provision of our services within a limited geographic area.

For the customers that purchase our Tissue Collection, Processing and Storage Products we transfer control at the point in time when the goods are shipped from our facility, shipping costs are paid by the customer and these costs are not accrued when the related revenue is recognized.

Variable Consideration

Under ASC 606, we are required to make estimates of the net sales price, including estimates of variable consideration (such as rebates and discounts) and recognize the estimated amount as revenue when we transfer control of the product or provide the service to our customers. Variable Consideration must be determined using either an “expected value” or a “most likely amount” method. At the current time the Company does not offer rebates or discounts on our provision of ATGRAFT and ATCELL customer processing and storage fees; Licensing and other Fees; and offer Tissue Collection, Processing and Storage products; therefore we have not made any provisions for variable consideration related to discounts or rebates.

Product Returns

We only offer product returns in the event a delivered product is found to be defective for which we offer replacement only. The Company has not had any product returned based upon a defective product claim; however return experience may change over time.

NOTE 4. Loss per Share

The Company applies ASC 260, “Earnings per Share” to calculate loss per share. In accordance with ASC 260, basic and fully diluted net loss per share has been computed based on the weighted average of common shares outstanding during the years. The dilutive effects of the convertible notes and the options outstanding are not included in the calculation of loss per share since their inclusion would be anti-dilutive.

The Company had 7,986,500 and 8,761,500 shares of Common Stock issuable upon exercise of all outstanding stock options for the six months ended March 31, 2021 and 2020, respectively; and 2,268,117 and 2,134,784 shares issuable on the conversion of outstanding Convertible Notes for the three months ended March 31, 2021 and 2020, respectively.

Net Loss per share for the following periods is computed below:

   6 months   3 months 
   31-Mar-21   31-Mar-20   31-Mar-21   31-Mar-20 
Net Loss  $(350,763)  $(419,087)  $(304,729)  $(147,227)
Basic & Fully Diluted Net Income (Loss) per Common Share:  $(0.006)  $(0.008)  $(0.005)  $(0.003)
Weighted Average of Common Shares Outstanding -  Basic & fully diluted   59,963,564    49,883,110    60,248,623    50,262,918 
11
 

American CryoStem Corporation

Notes to the Consolidated Financial Statements

March 31, 2021

Unaudited

 

NOTE 5. Fixed Assets

The fixed assets accounts of the Company are comprised as follows:

   March 31,
2021
   September 30,
2020
 
Laboratory Equipment  $257,905   $257,905 
Laboratory Leasehold Improvements   110,286    110,286 
Laboratory Furniture   1,841    1,841 
Office Equipment   27,869    27,869 
Office Leasehold Improvements   2,650    2,650 
Office Furniture   1,812    1,812 
Accumulated Depreciation   (282,327)   (275,772)
Net Property and Equipment  $120,036   $126,591 
           

Depreciation expense for the six months ended March 31, 2021 and 2020 were $6,555 and $4,666, respectively and for the three months ended March 31, 2021 and 2020 were $3,277 and $3,207, respectively.

NOTE 6. Patent & Patents Filings

The patent and patents development are recorded at cost and are being amortized on a straight line basis over a period of seventeen years. The company capitalizes Legal and Administrative Fees incurred in the process of filing for its patents. The Company has only been amortizing the patents issued. Amortization Expense for the six and three months ended March 31, 2021 were $29,527 and $28,104, respectively and for the six and three months ended March 31, 2020 were $2,832 and $1,408, respectively

Patents still in the application process and trademarks have not been amortized. The unamortized costs of patents in the application process along with costs of trademarks are $174,794 as of March 31, 2021 and $297,731 as of September 30, 2020. Amortizable Patent Costs were $238,172 at March 31, 2021 and $96,000 at September 30, 2020. The following is the amortization expense for these patents for the next 5 years:

For the twelve months ending March 31,    
2022  $14,010 
2023  $14,010 
2024  $14,010 
2025  $14,010 
2026  $14,010 

The following is a description of the Company’s patent assets:

On August 2, 2011, the Company was awarded U.S. Patent No. US 7,989,205 B2, titled Cell Culture Media, Kits, and Methods of Use. The Patent is for cell culture media kits for the support of primary culture of normal non-hematopoietic cells of mesodermal origin suitable for both research and clinical applications. The Company filed and maintains a continuation (U.S. Serial No. 13/194,900) and additional claims were granted on November 8, 2016 under patent Number 9,487,755. The Company filed an additional continuation on November 7, 2016 as part of our overall patent strategy and to cover expanded modifications of the original patent grant, US Patent Application No. 15/344,805.

On July 3, 2018, the Company was awarded U. S. Patent No. US 10,014,079 B2 titled “Business Method for Collection, Cryogenic Storage and Distribution of a Biologic Sample Material originally filed as US Serial No 13/702,304 filed June 6, 2011 with a priority date of June 6, 2010. The patent covers the Company’s comprehensive business method for collecting, processing, cryogenic storage and distribution of a biologic sample material. The Company has filed a continuation of the patent to cover addition claims and will file additional Continuation in Part claims for improvements that it has developed since the original patent filing.

On December 18, 2018, the Company was awarded US Patent No. US 10,154,664 B2 titled “Systems and Methods for the Digestion of Adipose Tissue Samples Obtained from a Client for Cryopreservation” U.S. Serial No. 13/646,647 filed October 5, 2012 with a priority date of October 6, 2011.

The Company has filed the following additional patents to extend its intellectual property to encompass additional aspects of the Company’s platform processing technologies. To date the following additional patent filings have been made:

A business method for Collection, Cryogenic Storage and Distribution of a Biologic Sample Material US Serial No 13/702,304 filed June 6, 2011 with a priority date of June 6, 2010.

12
 

American CryoStem Corporation

Notes to the Consolidated Financial Statements

March 31, 2021

Unaudited

 

NOTE 6. Patent & Patents Filings (continued)

Additionally, this patent has been filed European Union Application No. EPI3800847.9 and China Application No. 2013800391988.

Human Serum for Cell Culture Medium for Clinical Growth of Human Adipose Stromal Cells, International PCT filing PCT/US/68350 filed December 31, 2015 with a priority date of December 31, 2014. During 2017, the Company extended the filing into China, the EU, India, Japan, the Kingdom of Saudi Arabia, Canada and Mexico.

NOTE 7. Debt

The following table describes the Company’s debt outstanding as of March 31, 2021:

 

Debt  Carrying
Value
   Maturity   Rate 
Bridge Notes  $226,500    Demand    8.00%
Convertible Notes @ 75 cents  $150,000    Fiscal 2022    5.00%
Convertible Notes @ 40 cents  $100,000    Demand    8.00%
Convertible Notes @ 35 cents  $83,500    Demand    8.00%
Convertible Notes @ 33 cents  $150,000    Demand    5.00%
Convertible Notes @ 30 cents  $45,000    Demand    8.00%
Convertible Notes @ 20 cents  $155,000    Demand    8.00%
Convertible Notes @ 15 cents  $40,000    Demand    8.00%
Finance Lease Liability  $7,039    Fiscal 2021    14.00%
Operating Lease Liability  $2,631    Fiscal 2021    8.00%
                

The convertible notes are exercisable at any time and have exercise prices ranging from $0.15 to $0.75 with the amount of shares exercisable based on the face value of the convertible note. The holders of the bridge notes also have an option to purchase shares of the Company at $0.05 per share with the number of shares dependent upon the face value of the bridge note. As of the date of this report, 36,500 of these options remain outstanding.

On April 6, 2018, the Company issued a debenture and received proceeds of $100,000. The debenture matured March 2020 and has an exercise price of $.40 with interest at 8%. The entire Carrying Value of $100,000 was due March 2020.

In April 2019, the Company issued debentures and received proceeds of $150,000. The debentures mature in 2021 and have an exercise price of $.33 with interest at 5%. The entire Carrying Value of $150,000 is due in Fiscal 2021.

As a result of the issue, the Company recognized interest expense of $61,364 as a beneficial conversion feature of the debenture which has been amortized over the life of the note. The Interest Expense due to the Beneficial Conversion Feature for the Six and Three Months ended March 31, 2021 was $14,948 and $6,757, respectively; and $16,382 and $8,191 for the Six and Three Months ended March 31, 2020, respectively.

In March 2021, the Company issued debentures and received proceeds of $150,000. The debentures mature in December 2022 and have an exercise price of $.75 with interest at 5%. The entire Carrying Value of $150,000 is due in Fiscal 2022.

As a result of the issue, the Company recognized interest expense of $25,333 as a beneficial conversion feature of the debentures, which has been amortized over the lives of the notes. The Interest Expense due to the Beneficial Conversion Feature for the Six and Three Months ended March 31, 2021 was $1,138 and $1,138, respectively.

13
 

American CryoStem Corporation

Notes to the Consolidated Financial Statements

March 31, 2021

Unaudited

 

Note 8. Common Stock Issuances

During the six months ended March 31, 2021, the Company issued 640,000 shares and received proceeds of $143,000. The share price was determined by agreement with the purchasers, based upon the current market price less a discount for purchasing restricted securities.

During the six months ended March 31, 2021, the Company issued 80,000 shares and for services valued at $20,000. The share price was determined by agreement with the service provider, based upon the current market price less a discount for purchasing restricted securities.

During the six months ended March 31, 2021, the Company issued 100,000 shares for services to be provided valued at $75,000. The share price was determined by agreement with the service provider, based upon the current market price less a discount for purchasing restricted securities.

During the six months ended March 31, 2021, the Company issued 81,031 shares to pay interest due holders of bridge notes and convertible notes. The amount of interest paid was $26,147. The share prices were determined by the aggregate market price for the week in which the interest became due.

NOTE 9. Option Issuances

The Company applies ASC 718, “Accounting for Stock-Based Compensation” to account for its option issues. Accordingly, all options granted are recorded at fair value using a generally accepted option pricing model at the date of the grant. The Company uses the Black-Sholes option pricing model to measure the fair values of its option grants. For purposes of determining the option values at issuance, the fair value of each option granted is measured at the date of the grant by the option pricing model using the parameters of the volatility of the Company’s share prices and the risk free interest rate.

The Company normally issues options to its key personnel and consultants at the end of each fiscal year or as may be included in retainer or employment agreements. The Company prepares an option agreement for each option grant that includes the date of the grant, the vesting schedule, the expiration date and other terms of the granted options.  The Company’s option plan calls for the immediate expiration and cancellation of the granted options in the event of the termination of employment or the contract associated with the original option grant except for certain circumstances including retirement or disability.  The Company’s method for exercising options is to require delivery of the executed option agreement with the payment of the option price to the Company by the option holder. Upon receipt and confirmation of payment of the exercise price by Company management, the Company prepares board minutes and issues instructions to the Company’s transfer agent to issue the requisite number of shares underlying the option exercise The company did not issue any options and there was no stock based compensation for the six months ended March 31, 2021 and 2020.

   Amount   Exercise
Price Range
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Term (Years)
 
Outstanding at September 30, 2019   8,761,500    $0.05 - $0.40   $0.26    1.85 
                     
Granted                   
Exercised                   
Expired                   
Forfeited                   
Outstanding at March 31, 2020   8,761,500    $0.05 - $0.40   $0.26    1.80 
                     
Outstanding at September 30, 2020   7,936,500    $0.05 - $0.40    0.26    2.32 
                     
Granted                   
Exercised                   
Expired       $0.40           
Forfeited                   
Outstanding at March 31, 2021   7,936,500    $0.05 - $0.40   $0.26    1.85 
Vested at March 31, 2021   6,686,500    $0.05 - $0.40    0.26    1.53 
                     

Option forfeitures are recorded as they occur. The intrinsic value of the outstanding stock options is $4,031,225 and the intrinsic value of the vested stock options is $3,703,725 at March 31, 2021.

14
 

American CryoStem Corporation

Notes to the Consolidated Financial Statements

March 31, 2021

Unaudited

 

NOTE 10. Fair Values of Financial Instruments

Fair Value Measurements under generally accepted accounting principles clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

The Company valued Accounts Receivable, Bridge Notes and Convertible Notes at cost. Financial instruments’ carrying value approximates fair value. Stock Options and Derivative Liability are valued using level 3 of the fair value hierarchy.

Note 11. Leases

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, one of the Company’s leases does not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate which is based on the interest rate of similar debt outstanding. Effective October 1, 2019, the Company adopted the provision of ASC 842 Leases.

Finance Lease

 

The Company leases Equipment at its laboratory from NFS Leasing, Inc. The final lease payment is scheduled for May 1, 2021. When the final payment is made, the Company will own the equipment. The table below presents the lease related asset and liability recorded on the Company’s consolidated balance sheets as of March 31, 2021:

        
   Classification on Balance Sheet  March 31,
2021
 
Assets        
Finance Lease Asset  Finance lease right of use asset  $76,626 
Total Finance lease assets     $76,626 
         
Liabilities        
Current Liabilities        
Finance lease liability  Current finance lease liability  $6.917 
Noncurrent liabilities        
Finance lease liability  Long-Term finance lease liability    
Total operating lease liability     $6.917 

 

Finance Lease obligations at March 31, 2021:    
Total Payments  $7,039 
Amount representing interest   (122)
Finance lease obligation, net  $6,917 
Finance lease obligation, current portion   6,917 
Finance lease obligation, long-term portion  $ 

 

The lease expense for the six months and three months ended March 31, 2021 was $10,503 and $5,078, respectively which consisted of amortization expenses of $9,191 and $4,596, respectively along with interest expenses of $1,312 and $482, respectively. At March 31, 2021, the remaining lease term was 0.17 years (2 months) and the discount rate was 14.17%.

15
 

American CryoStem Corporation

Notes to the Consolidated Financial Statements

March 31, 2021

Unaudited

 

Operating Lease

 

The Company leases its office facility, in Eatontown, New Jersey, from Eaton Holdings LLC. The lease expires on April 30, 2021 and the Company can exercise a renewal option for an additional three years. The table below presents the lease related asset and liability recorded on the Company’s consolidated balance sheets as of March 31, 2021:

   Classification on Balance Sheet  March 31,
2021
 
Assets        
Operating Lease Asset  Operating lease right of use asset  $2,631 
Total Operating lease assets     $2,631 
         
Liabilities        
Current Liabilities        
Operating lease liability  Current operating lease liability  $2,631 
Noncurrent liabilities        
Operating lease liability  Long-Term operating lease liability    
Total operating lease liability     $2,631 

 

Lease obligations at March 31, 2021:     
Total Payments  $2,650 
Amount representing interest   (19)
Operating lease obligation, net  $2,631 
Operating lease obligation, current portion   (2,631)
Operating lease obligation, long-term portion  $ 

The lease expense for the six months and three months ended March 31, 2021 was $15,900 and $7,950, respectively which consisted of amortization expense of $15,433 and $7,793, respectively and interest expense of $467 and $157, respectively. The cash paid under the operating lease during the six months ended March 31, 2021 was $15,900. At March 31, 2021, the remaining lease term was 0.083.years (1 month) and the discount rate was 8%.

The Company leases its laboratory facility, in Monmouth Junction, New Jersey, from Princeton Corporate Plaza LLC. The lease expired on March 31, 2020 and the Company can exercise a renewal option for an additional 6 months. The Company is currently in negotiations with the landlord regarding renewing the lease. While the Company is negotiating the lease, it continues to pay rent on a month to month basis. Since the lease obligation is less than twelve months, the Company does not report a lease related asset or liability for this lease. Rent paid for the laboratory facility for the six months and three months ended March 31, 2021 was $14,334 and $7,167, respectively.

NOTE 12. Concentration of Credit

The Company received 97% of its revenues for the six ended March 31, 2021 from one client, Baoxin. The Company received 96% of its revenues for the six months ended March 31, 2020 from three clients, Baoxin, Cell Source and CryoViva. The Company also had accounts receivable from Baoxin of $1,075,000 at March 31, 2021 and $578,295 at March 31, 2020. For the Baoxin receivable, the Company has recorded an allowance for doubtful accounts of $325,000.

NOTE 13. Investments

During the first quarter of 2018, the Company invested $300,000 in Baoxin Ltd., a Chinese company that is involved in tissue storage and processing in Baoxin, China.  Baoxin is not a publically traded corporation and the investment is carried at cost at March 31, 2021 and September 30, 2020. The Company annually reviews its investments for impairment. After reviewing recent investment transactions of Baoxin, the Company has determined that no impairment of its investment is necessary for the six months ended March 31, 2021.

Baoxin will develop, own and operate multiple laboratory/treatment/training facilities in China using American CryoStem’s intellectual property. American CryoStem has received an upfront fee of $300,000 USD and a 5 year minimum annual guarantee of $500,000 USD per year from Baoxin. Additionally, as part of the transaction American CryoStem has invested $300,000 into Baoxin to obtain a 5% minority equity in Baoxin (China) and an option to acquire up to a 20% equity ownership interest in its Regenerative Medicine Center in Hong Kong (HK). The short term goals are to set up two additional GMP grade adipose tissue processing and storage facilities in Beijing and Shanghai to cover the need of the whole China region, and a proper education facility in China to promote the use of ATGRAFT as a more natural dermal filler over artificial fillers.

16
 

American CryoStem Corporation

Notes to the Consolidated Financial Statements

March 31, 2021

Unaudited

 

NOTE 14. Related Party Transactions

 

On October 1, 2020, the Company executed a note with ACS Global for a principal amount of $99,125 representing the outstanding balance due to ACS Global. Inc. The Note matures on October 1, 2023 and carries an interest rate of 10% per annum which may be paid in cash or stock. The note is due and payable in full upon maturity. On March 1, 2021 the note was increased by $49,000 for advances to the Company. The note may be prepaid at any time by the Company. The principal balance of the note at March 31, 2021 is $147,775.

The Company was indebted to a company that is majority owned by the Company’s two officers in the amount of $99,125 at September 30, 2020. The advances were unsecured, and carried no interest rate and were collectible at the discretion of the company’s two officers/directors.

As of March 31, 2021, a Company majority owned by the CEO and Chairman of American CryoStem was indebted to American CryoStem Corporation in the amount of $4,961 for advances paid for expenses incurred.

NOTE 15. Subsequent Events

The Company has made a review of material subsequent events from March 31, 2021 through the date of issuance of this report and reports there are no subsequent events.

17
 
ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS

 

Forward-looking Statements

 

We and our representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this quarterly report and other filings with the Securities and Exchange Commission (the “SEC”), reports to our stockholders and news releases. All statements that express expectations, estimates, forecasts or projections are forward-looking statements. In addition, other written or oral statements which constitute forward-looking statements may be made by us or on our behalf. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “project,” “forecast,” “may,” “should,” variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. We undertake no obligation to update or revise any of the forward-looking statements after the date of this quarterly report to conform forward-looking statements to actual results. Important factors on which such statements are based on assumptions concerning uncertainties, including but not limited to, uncertainties associated with the following:

 

  · Inadequate capital and barriers to raising the additional capital or to obtaining the financing needed to implement our business plans;
     
  · Our failure to earn revenues or profits;
     
  · Inadequate capital to continue business;
     
  · Volatility or decline of our stock price;
     
  · Potential fluctuation in quarterly results;
     
  · Rapid and significant changes in markets;
     
  · Litigation with or legal claims and allegations by outside parties; and
     
  ·

Insufficient revenues to cover operating costs.

     

The following discussion should be read in conjunction with the financial statements and the notes thereto which are included in this quarterly report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ substantially from those anticipated in any forward-looking statements included in this discussion as a result of various factors.

18
 

Background

 

American CryoStem Corporation was incorporated in the state of Nevada on March 13, 2009. On April 20, 2011, we acquired, through our wholly owned subsidiary American CryoStem Acquisition Corporation, substantially all of the assets from, and assumed substantially all of the liabilities of, ACS Global, Inc. (“ACS”) in exchange for our issuance of 21,000,000 shares of Common Stock to ACS (the “Asset Purchase”). We filed a Current Report on Form 8-K with the Securities and Exchange Commission (SEC) on April 27, 2011 disclosing the Asset Purchase and certain related matters.

 

Overview

 

American CryoStem Corporation is a biotechnology pioneer in the field of Regenerative and Personalized Medicine and operates a state-of-the-art, FDA-registered, laboratory dedicated to standardized processing, bio-banking and development of cellular tools, and applications, using autologous adipose (fat) tissue and adipose derived stem cells (“ADSCs”). The Company has built a strong, strategic portfolio of intellectual property, patent applications, and proprietary operating processes that form its core standardized cellular platform which we believe supports and promotes a growing pipeline of biologic products and processes, services and international licensing opportunities. Our FDA registered laboratory for human tissue processing, cryo-storage and cell culture and differentiation media development is located in Monmouth Junction, New Jersey.

 

The Company believes the reproducibility of scientific studies is a substantial issue in life science research from drug discovery and development through clinical trials as researchers throughout the world continue to use different protocols for processes associated with sample preparation, cryopreservation and cold chain management. We believe by standardizing handling, storage, and transportation protocols we can substantially improve the quality and reproducibility of preclinical and clinical data to help accelerate the transition from lab research to product development and market launch.  To this end, we have licensed affiliates operating on our cellular collection-processing and storage platform in Thailand, Hong Kong, and China. Significant to our efforts to advance our technology and business methods, the Company updated its Standard Operating Procedures (SOP’s) to FDA, cGMP standards, entered into a Cooperative Research and Development Agreement (CRADA) with Walter Reed National Military Medical Center (WRNMMC) and filed its first Investigational New Drug Application (IND) with the US Food and Drug Administration (FDA) for our ATCELL cellular therapy product. The IND filing is titled ATCell Expanded Autologous Adipose Derived Mesenchymal Stem Cells deployed via Intravenous Infusion for the Treatment of Post Concussion Syndrome (PCS) in Retired Athletes and Military PersonnelFile number 19089 was accepted and approved on September 17, 2020. In advance of the filing the Company built and validated a new cGMP clean room processing and manufacturing area at our facility in Monmouth Junction NJ, implemented and validated new Standard Operating Procedures and installed a new Quality Management System.

 

Our proprietary, patent pending processing platform allows for the collection, preparation, and cryo-preservation of adipose tissue without manipulation, bio-generation, animal-derived products or other chemical materials which require removal from the tissue sample upon retrieval or prior to use. Management believes this core process makes each tissue sample suitable for use in cosmetic grafting procedures or for further processing to adult stem cells for other types of stem cell therapies.

 

Products and Services

 

American CryoStem is focused on multiple high margin business lines capable of generating sustainable, recurring revenue streams from each of our developed products and services. The Company incorporates its proprietary and patented or patent pending laboratory products, such as our ACSelerate cell culture media, into our processing product production and contract manufacturing services. Additionally, the Company requires licensees of our tissue and cell processing technologies to purchase the consumable products required in the collection, processing and storage of tissue/stem cells as part of the licensing agreement including our CELLECT® Collection, Transportation, and Storage System and ACSelerate Cell Culture Media Products.

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To date, we have generated minimal revenue; however, subject to, among other factors, obtaining the requisite financing, management believes that we are well positioned to utilize our developed products and services as the foundation for domestic and international distribution through licensees of our technologies and a host of Regenerative Medicine application uses and future therapy products. In the US we operate an FDA registered laboratory facility that generates revenue from; the processing and storage of adipose tissue (ATGRAFT), the processing of adipose tissue into its cellular components for future use (ATCELL) and the production and sale of our tissue collection boxes (CELLECT®), and patented media products (ACSelerate).

 

Our branded product and service offerings include:

CELLECT® Validated Collection, Transportation, and Storage System – An unbreakable “chain of custody” clinical solution for physicians or researchers to collect and deliver tissue samples utilizing proprietary and patent pending methods and materials. The CELLECT® service is monitored in real-time and assures the highest cell viability upon laboratory receipt. The CELLECT® system incorporates our proprietary ACSelerate–TR transport medium into all collection bags which supports the health of the tissue during transport at ambient temperature. The CELLECT® kit is an integral part of our validated ATGRAFT and ATCELL technology platform to be used by our domestic physician network and international licensees of our platform technologies. The CELLECT® service is included in our granted patent “Business Method for Collection, Processing, Cryogenic Storage and Distribution of a Biologic Sample Material” US Patent Number 10,014,079, issued July 3, 2018.

 

American CryoStem is the first tissue bank to globally incorporate through its CELLECT® service the International Blood Banking identification and labeling and product identification coding system. The coding was developed in conjunction with the American Association of Blood Banks (AABB), the American Red Cross and the International Society of Blood Transfusion (ISBT). These groups form the International Council for Commonality in Blood Banking Automation (ICCBBA) and developed the ISBT 128 Standard for machine readable labeling. This labeling system is an acceptable machine readable labeling standard, product description, and bar coding system for FDA Center for Biologics Evaluation and Research under 21 CFR 606.12(c) 13. American CryoStem conforms to this standard in its laboratory facility and all cellular and tissue products produced at the facility carry our W3750 ICCBBA facility identifier allowing any hospital, clinic, laboratory and regulator worldwide to identify the origin and obtain additional information on any sample produced at an American CryoStem facility. The Company promotes this standard in all laboratories that license or utilize our technology.

 

ATGRAFT Adipose Tissue Storage Service – A clinical fat storage solution allowing physicians to provide their patients with multiple tissue and cell storage options. Through one liposuction procedure, the ATGRAFT service, allows individuals to prepare for future cosmetic or regenerative procedures by storing multiple samples of their own adipose tissue to be returned in the future as a natural biocompatible filler, or the sample may be further processed to create cellular therapy applications without the trauma of further liposuctions. ATGRAFT procedures may include breast reconstruction, layered augmentation, buttocks enhancement or volume corrections of the hands, feet, face and neck areas that experience significant adipose tissue (fat) volume reduction as we age. ATGRAFT is processed and stored utilizing our validated standard operating procedures so that stored fat tissue sample(s) may be retrieved in the future and re-processed to create stem cells “ATCELL” for use in Regenerative medicine applications. The ATGRAFT service is included in our granted patent “Business Method for Collection, Processing, Cryogenic Storage and Distribution of a Biologic Sample Material” US Patent Number 10,014,079, issued July 3, 2018.

 

The Company charges standardized fees for ATGRAFT tissue processing and a minimum annual storage fee depending on the volume of tissue stored. These processing and storage fees may be paid to the Company by the collecting/treating physician or the consumer. The Company earns additional fees, for the thawing, packaging and shipment of the stored samples back to the physician or clinic for immediate use upon receipt. Additionally, physicians or patients may request that any stored ATGRAFT tissue sample of 25ml or greater be reprocessed utilizing the Company’s ATCELL and Autokine-CM processing. The Company charges fees for the reprocessing of a 25ml stored ATGRAFT sample and may charge additional fee’s if expansion of the newly created ATCELL sample is also requested.

 

The Company believes the ATGRAFT service may create significant revenue opportunities and patient retention for the participating physician. The ATGRAFT service lowers physician/patient overall costs by eliminating additional liposuction procedures for each scheduled fat transfer or therapy procedure. Physician cost savings may include: materials, supplies, equipment, and the expenses of utilizing a surgical center, hospital operating room or an in-office aseptic procedure room. The ATGRAFT service is designed to operate under the minimally manipulated regulations contained in both 21 CFR 1271.10 and PHS 361.

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ATCELL Adipose Derived Stem Cells (ADSCs) Processed and characterized adipose derived regenerative cells (ADRCs) are cultured utilizing the Company’s proprietary Standard Operating Procedures (SOPs) and ACSelerate patented cell culture media. ATCELL is the Company’s trademarked name for its ADRCs and differentiated cell products and processing methodology. The Company maintains multiple master and differentiated cell lines labeled according to their characterization. (i.e. ATCELL (adipose derived stem cells) ATCELL-SVF (stromal vascular fraction), ATCELL–CH (differentiated chondrocytes), etc. Cell lines are custom created and stored for patients desiring to have “On Demand” samples of their cells for their personal use in future Regenerative Medicine procedures. The Company charges its customers fees for newly collected client tissue samples to be processed and to process a previously stored ATGRAFT sample. All customer samples submitted for processing must utilize the CELLECT® collection system and ACSelerate mediums to conform to our internal SOPs and quality control standards.

 

The Company believes it will earn additional fees based upon the proposed storage configuration of the final ATCELL sample, and for future cellular product creation by culturing additional samples in the ACSelerate cell culture and differentiation media. Cell culturing and differentiation can be performed upon receipt of the raw tissue sample or at any time on a previously processed and cryopreserved ATGRAFT or ATCELL sample. ATCELL has shown that it is ideally suited for expansion and differentiation into additional cell types utilizing the ACSelerate line of culture and differentiation mediums. The ATCELL processing, products and services are incorporated into our granted patent “Systems and Methods for the Digestion of Adipose Tissue Samples Obtained from a Client for Cryopreservation” US 10,154,664 issued December 18, 2018, and “Business Method for Collection, Processing, Cryogenic Storage and Distribution of a Biologic Sample Material” US Patent Number 10,014,079, issued July 3, 2018. The ACSelerate Medium products are incorporated into our granted patents “Cell Culture Media, Kits and Methods of Use”; US Patent No. 7,989,205 issued August 2, 2011 with additional claims granted in US Patent No. 9,487,755 granted November 8, 2016.

 

The Company’s ATCELL cell lines are processed and cultured in our patented ACSelerate cell culture media. All tissue, cells, and research materials made available for sale to research institutions are tested for sterility, disease, lifespan, and population doubling rate (PDL). Cell morphology is confirmed by (i) flow cytometry and (ii) differentiation analysis using ACSelerate differentiation media. Each ATCELL line can be further cultured and differentiated allowing the Company to provide genetically matched cell types. We believe this research methodology may provide opportunities for the Company’s ATCELL and ACSelerate products to become the building blocks of final developed commercial applications.

 

The Company intends to support its cell therapy application research, development and collaborative efforts by making ATCELL and ATGRAFT samples available for research and product development purposes through joint ventures, and university and commercial collaborations. We believe these adipose tissue and cell line samples, will be highly sought after by private researchers and universities for use in pre-clinical trial studies and in-vitro research due to our clinical processing methodology, donor sample data and the ability to create multiple cell types that have identical genetic profiles. Additionally, we believe our clinical processing methods, data collection, ATCELL testing and the ability to make multiple cell types from the same donor line allows research teams to focus on application development and avoid bench to commercialization delays. The Company also makes available research samples of its ATCELL cell products to users of its ACSelerate cell culture media for application development.

 

The Company filed its first Investigational New Drug Application (IND) with the US Food and Drug Administration (FDA) for the ATCELL cellular therapy product titled “ATCell Expanded Autologous Adipose Derived Mesenchymal Stem Cells deployed via Intravenous Infusion for the Treatment of Post Concussion Syndrome (PCS) in Retired Athletes and Military Personnel”, File number 19089, which was accepted for review by the FDA on October 22, 2019, and approved on September 17, 2020.

ACSelerate Cell Culture Media Products – Manufactured patented cell culture media products for growing human stromal cells (including all cells found in human skin, fat and other connective tissue). Certain ACSelerate cell culture media lines are available in animal serum free, which is suitable for human clinical and therapeutic uses or a low serum version for application development and research purposes. The patented ACSelerate cell culture media line was specifically developed to address increasing industry demand for animal serum-free cell culture products and for the acceleration of products from the laboratory to the patient.

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The Company entered into a licensing and manufacturing agreement with PeproTech (April 4, 2016) a life sciences company formed in 1988. PeproTech is the trusted source for the development and manufacturing of high quality cytokine products for the life-science and cell therapy markets.  PeproTech has grown into a global enterprise with state-of-the-art manufacturing facilities in the US, and offices around the world. With over 2,000 products PeproTech has developed and refined innovative protocols to ensure quality, reliability and consistency. The licensed medium is marketed under both PeproTech’s PeproGrow and the Company’s ACSelerate MAX brands.

 

On August 2, 2011, the Company was issued US patent number 7,989,205 for “Cell Culture Media, Kits and Methods of Use.” The granted claims include media variations for cellular differentiation of ADSCs into osteoblasts (bone), chondrocytes (cartilage), adipocytes (fat), neural cells, and smooth muscles cells in both HSA medium (clinical) grade and FBS (research) grade. This patent covers both research grades and grades - suitable for cell culture of adipose-derived stem cells intended for use in humans. Additionally, on November 8, 2016, the Company was granted additional claims from the continuation U.S. Serial No. 13/194,900 issued as a new Patent Serial No. 9,487,755.

 

The Company has created several versions of its ACSelerate cell culture media including:

·ACSelerate-MAX - xeno serum free cell culture media,
·ACSelerate-SFM - animal serum free cell culture media,
·ACSelerate-LSM - low FBS (0.05%) cell culture media,
·ACSelerate-CY - for differentiation of ATCELL into chondrocytes (ATCELL-CY),
·ACSelerate-OB - for differentiation of ATCELL into osteoblasts (ATCELL-OB)
·ACSelerate-AD - for differentiation of ATCELL into adipocytes (ATCELL-AD)
·ACSelerate-MY - for differentiation of ATCELLinto myocytes (ATCELL-MY)
·ACSelerate-CP - non-DMSO (Dimethyl Sulfoxide) cellular cryopreservation media
·ACSelerate-TR - sterile transportation medium designed to maintain the viability of the tissue during the shipment of adipose tissue to our processing facility.

 

The Company continues to optimize additional versions of ACSelerate media through further research and testing to develop medium versions for differentiation of ATCELL ADSCs into neural, lung and other specific cell types that may be necessary for use in future clinical applications. On December 31, 2014 the Company filed a patent application for an advanced medium formulation titled Human Albumin Serum for Cell Culture Medium for Clinical Growth of Human Adipose Stromal Cells. (US Serial No. 62/098799). On December 31, 2015, the Company converted the provisional application to an international PCT filing (PCT/US/68350) under the title Human Serum for Cell Culture for Clinical Growth of Human Adipose Stromal Cells. To date the patent has also been filed in the following additional countries: China and Hong Kong, India, Mexico, Brazil, the European Union, US, Japan, Thailand, Brazil, Russia, Australia, New Zealand, Canada, and Saudi Arabia.

 

Contract Manufacturing, Autokine-CM® Anti-Aging, Autologous Skin Care Product Line – Under agreement with Personal Cell Sciences Corp. (PCS), we manufacture the key ingredient Autokine-CM® (autologous adipose derived stem cell conditioned medium) for PCS’ U-Autologous anti-aging topical formulation. Each product is genetically unique to the individual and custom blended, deriving its key ingredients from the individual client’s own stem cells. The Company provides its CELLECT® Tissue Collection service to collect the required tissue to manufacture the U-Autologous product and processes it under the same Standard Operating Procedures that it developed for the ATGRAFT and ATCELL cell processing services utilizing ACSelerate cell culture media. The Company receives collection, processing and long-term storage fees and earns a royalty on all U-Autologous product sales. The utilization of the Company’s core services in its contract manufacturing relationships provides opportunities for the Company and its ATGRAFT and ATCELL products.

 

Our Company’s contract manufacturing services can be extended to develop custom and/or white label products and services for both local and global cosmetic and regenerative medicine companies, physicians, wellness clinics and medical spas. The Company intends to expand its relationships and contract manufacturing regionally through its physician networks and globally through its International Licensing Program.

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International Licensing Program – Many jurisdictions outside the US currently permit use of cellular therapies and regenerative medicine applications. The Company has received international inquiries concerning the sale or licensing of our SOPs, products and services in the Regenerative Medicine and Medical Tourism Markets. The Company believes that the inquiries to date are a result of the global boom in Medical Tourism, Regenerative Medicine and the slow pace of approval of cellular therapies and regenerative medicine applications in the US. To address the Company’s sales, marketing and branding opportunities globally, the Company has created its international licensing program. To date we have licensed our technologies in Hong Kong, Shenzhen and Shanghai, China, and Bangkok Thailand. The Company is currently in discussions for additional licensed territories.

 

The Company believes it can take advantage of the significant growth of the global cellular therapy market through its international licensing and marketing efforts. A recently published study by Transparency Market Research predicts the global market for stem cells is expected to register a healthy CAGR of 13.8% during the period from 2017 to 2025 to become worth US$270.5 bn by 2025.

(https://www.transparencymarketresearch.com/pressrelease/stem-cells-market.htm)

 

China

On July 12, 2018, the Company announced the national launch of CRYO’s ATGRAFT tissue collection, processing and storage technology by Baoxin Asia Pacific Biotechnology (Shenzhen) Co. Ltd. (“Baoxin”) in China. The Company’s management team traveled throughout south east China with the management and marketing team of Baoxin to present the ATGRAFT platform to leading plastic and cosmetic surgery hospitals in Shenzhen, Nanning, Guangzhou, Guangxi and Changsha. Additionally, Mr. Arnone and Mr. Dudzinski attended the signing of investment documents between Baoxin and Chinese government and Banking officials in Shenzhen, China to construct one of the largest biotech stem cell processing and storage laboratories in China as well as the official launch presentation and evening gala hosted by Baoxin in Shenzhen.

The China launch activities are in support of the Company’s previously announced licensing and supply agreement with Baoxin, under which Baoxin will pay the Company a minimum annual guarantee against a fixed fee per process and purchase certain necessary consumables from CRYO required for the collection, processing and storage of the collected adipose tissue. Under the terms of the Agreements signed in Fiscal 2018, the Company invested in and currently holds approximately five percent (5%) of Baoxin shares. Additionally, Mr. Arnone and Mr. Dudzinski were elected to serve as Directors of Baoxin during their visit to Shenzhen, China. Mr. Arnone resigned as a board Member of Baoxin in 2019. Mr. Dudzinski continues to serve the Company’s interests as a board member of Baoxin. During Fiscal 2020 due to the effects and government regulations Baoxin suspended operations from February 2020 to December 2020. We have been informed by the Company Chairman and CEO that they and recently completed their new facility located in Shenzhen, China. CRYO management is working with Baoxin during this time to assist them in bringing their new facility online for processing tissue in 2021.

 

Hong Kong

On June 30, 2014, the Company granted Health Information Technology Company, LTD (“HIT”) exclusive rights to utilize the Company’s Standard Operating Procedures (SOP’s) to market the Company’s ATGRAFT tissue storage service in Hong Kong. The Agreement called for upfront fees, royalties and the purchase by HIT of certain consumables manufactured by the Company. The Company and HIT reached further agreement to extend their relationship on a non-exclusive basis to include HIT’s cord blood laboratory located in Shenzhen, Guangdong Province, one of China’s most successful Special Economic Zones. The HIT agreement includes, initial upfront fees and royalty payments for predetermined gross revenue volumes. HIT will also purchase CRYO ACSelerate storage media, CELLECT collection and transportation kits as well as other American CryoStem products necessary for clinical adipose tissue processing and storage at the Shenzhen facility. The final master licensing agreement is for a period of 5 years with renewal options and was executed between the parties on September 24, 2014, the Agreement automatically renewed on September 24, 2019 for an additional 3 year period.

In 2017, as part of the Company’s transaction with Baoxin, HIT and the Company agreed to transfer certain product and distribution rights granted to HIT under its 2014 agreement to Baoxin. The Company was paid of fee of US $100,000 in the transaction and was provided with an initial ownership position in a planned Regenerative Treatment Center to be established by HIT in Hong Kong.

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Thailand

On April 5, 2018, the Company announced further expansion of its global laboratory and cellular technology footprint by entering into an agreement to license its ATGRAFT and ATCELL adipose tissue (fat) processing and storage technologies with Cryoviva (Thailand) Ltd., a Bangkok, Thailand, based Cord Blood processing and storage facility. Cryoviva, Thailand, currently offers collection; processing and storage of Cord Blood derived biologics to patients throughout Thailand and South East Asia.

American CryoStem has licensed to Cryoviva (Thailand) Ltd., established in 2007, the rights to utilize the Company’s Standard Operating Procedures (SOP’s) to create and market the Company’s ATGRAFT tissue storage service and ATCELL adipose derived stem cell processing and storage services in Thailand. The financial terms generally, call for the payment of certain training fees and, a percentage of the gross revenue subject to annual minimum payments generated from our products. Additionally, the Agreement calls for the purchase of CRYO consumable products required for ATGRAFT and ATCELL sample processing including CRYO’s ACSelerate non-DMSO cryogenic tissue storage media, transportation media, Cellect tissue collection kit, and ACSelerate – Max cell culture medium.

The Company has been assisting CRYOVIVA with the development of their branding and marketing campaign for Thailand and providing technical assistance and support for their import of consumables purchased from the Company. CRYOVIVA has scheduled the launch of its marketing campaign for the first quarter of 2020. Unfortunately, due to the global impact from COVID-19, CRYOVIVA suspended their tissue banking operation for most of fiscal 2020. We are currently assisting them with the restart of their operations and initiation of their marketing program for calendar 2021.

Japan

 

In June 2015, The Company entered into a licensing agreement with CellSource, LTD. (“CellSource”) located in Shibuya, Tokyo Japan for the licensing of our AGRAFT tissue processing and storage technology and the purchase of our CELLECT® collection products which include our ACSelerate-TR transport medium. The Company also assisted CellSource in upgrading its facility in Japan and provided training in the ATGRAFT processing and recordkeeping procedures. CellSource began marketing the new services initially within its existing network of clinics throughout Japan and began purchasing its CELLECT and ACSelerate-CP cryoprotectant from the Company in the third quarter of 2015. Upon execution of the Agreement, the Company received an upfront payment and will receive additional minimum annual payments, and consumable product sales revenue - in future years. The non-exclusive agreement expired in June of 2020.

Product Development

Our strategic approach to product development is to design, develop and launch new products and services that utilize our existing products and services, i.e. the use of the CELLECT® collection materials in providing ATGRAFT tissue storage services. Management believes that this approach will provide the Company with opportunities to produce near term cash flow, strong recurring revenue streams, strong international licensing partners and complementary scientific data. We focus on developing products, services and applications that require tissue collection and processing as the initial requirement to produce cellular therapies and products. These products and services may include adipose tissue and stem cell sample processing and storage as a form of personal “bio-insurance”, adipose tissue (fat) storage for cosmetic fat engraftment procedures, and the creation and production of topical applications and ingredients used by other companies in the wound care and cosmetic industries as well as cellular applications and bio-materials development.

 

We focus our efforts on expanding our product and services pipelines based upon our intellectual property portfolio, collaborative development relationships, product sales and distribution, and international licensing and partnering opportunities. Our current activities include supporting collaborations by providing our products and services (ACSelerate and ATCELL) with the expectation that our products and services become the basis for new adipose tissue and stem cell based Regenerative Medicine and cellular therapy applications.

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Investigational New Drug (IND)

 

The Company filed its first Investigational New Drug Application (IND) with the US Food and Drug Administration (FDA) for the ATCELL cellular therapy product. The IND filing is titled “ATCell Expanded Autologous Adipose Derived Mesenchymal Stem Cells deployed via Intravenous Infusion for the Treatment of Post Concussion Syndrome (PCS) in Retired Athletes and Military Personnel. The Company made the original filing in August of 2019 to the FDA Electronic Common Technical Document system (eCTD) for technical review. Following this review, the Company made several amendments and received additional technical comments from FDA’s technical group. The Company completed all technical changes to the filing in October 2019 and was assigned File number 19089, for the filing accepted for review by the FDA on October 22, 2019. The Company received further comments from the FDA in a clinical hold letter dated December 19, 2019. The letter requested additional information, clarification of certain aspects of the filed documents, amendment to the screening and treatment protocols, and the implementation of additional testing during the production and release of the final samples. These additional testing requirements necessitated amendments to the processing and release protocols and validation of the new test methods which will be completed in the Company’s fiscal third quarter. The Company expects to file the completed response in the third fiscal quarter.

 

The Company upon Phase 1 approval by FDA intends to invite additional developers of cellular therapies to initiate additional arms of the clinical study focused on the use of ATCELL for use in systemic inflammatory response relief for patient suffering from systemic diseases. A number of these additional study targets have been identified and ongoing discussions support the Company’s belief that additional investigations can be developed and rapidly added upon completion of the new study protocol and outcome assessment methodologies.

 

Cooperative Research and Development Agreement (CRADA)

On December 3, 2020, the Company entered into a Cooperative Research and Development Agreement (CRADA) with Walter Reed National Military Medical Center (WRNMMC), the nation’s largest and most renowned joint military medical center serving the Army, Navy, Air Force and Marines located in Bethesda, Maryland.

A Cooperative Research and Development Agreement (CRADA) is a written agreement between a government agency and a non-federal entity that allows the federal government and its non-federal partners to optimize and maximize use of their resources, exchange technical expertise in a protected fashion, share intellectual property resulting from collaborative effort, and speed commercialization of federally developed technology. The Company has committed to provide materials including ATCell samples and Umbilical Cord stem cells, ACSelerate Max Growth and differentiation mediums testing and other processing supplies, processing and testing methods. The Company’s total in-kind and financial commitments are limited to $120,000 in supplies and expense reimbursement during the life of the Agreement.

The Company maintains the rights to commercialize all technology developed under this CRADA Agreement. The technology is centered on creating in vitro (test tube) assays to standardize and commercialize new treatment protocols; optimizing quality control measures; and developing standardized protocol potency assays for precise therapy dosing.

Management believes that these new assays can be commercialized to generate substantial sales and licensing revenues and create value for the Company’s stakeholders.

Through the Collaboration entitled “Stem Cells for Regeneration and Medical Innovation, a multi-faceted and multi-staged research project with WRNMMC Biomedical Laboratories, the Company plans to develop, validate and standardize baseline and assay metrics to identify mesenchymal stem cell (MSC) characteristics and quantities across various cell biomarkers and exosome expressions data sets for its ATCell product for biologics developers’ use worldwide. The focus of the Collaboration is to enable the creation of predictive and prescriptive cellular models which will further enhance American CryoStem’s mission as a premier biologics’ manufacturer and developer and be highly valuable to the medical community, biotech developers, and the public at large.

WRNMMC is part of The Military Health System (MHS) which is the enterprise within the United States Department of Defense that provides health care to active duty, Reserve component and retired U.S. Military personnel and their dependents.

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The missions of the MHS are complex and interrelated: To ensure America’s 1.4 million active duty and 331,000 reserve-component personnel are healthy so they can complete their national security missions.

·To ensure that all active and reserve medical personnel in uniform are trained and ready to provide medical care in support of operational forces around the world.
·To provide a medical benefit commensurate with the service and sacrifice of more than 9.5 million active-duty personnel, military retirees, and their families.

 

The MHS also provides health care, through the TRICARE health plan, to:

·Active-duty service members and their families,
·Retired service members and their families,
·Reserve component members and their families,
·Surviving family members,
·Medal of Honor recipients and their families,
·Some former spouses, and
·Others identified as eligible in the Defense Enrollment Eligibility Reporting System

 

The MHS has a $50+ billion budget and serves approximately 9.5 million beneficiaries. The MHS employs more than 144,217 in 51 hospitals, 424 clinics, 248 dental clinics and 251 veterinary facilities across the nation and around the world, as well as in contingency and combat-theater operations worldwide.

The Company’s long term research is focused on further developing standardized cellular processing models to support FDA, IND treatment protocol approvals by further identifying, and validating certain mechanisms and characteristics of mesenchymal stem cells related to regulating modulation of immune response(s) and promoting tissue regeneration and stability (homeostasis) for the treatment of traumatic injuries, inflammation, auto-immune diseases, and brain and organ damage associated with viruses such as SARS-CoV-2 (COVID-19), including, the expanding group of people dealing with the chronic and debilitating symptoms of what is commonly termed “Long Haul COVID” or “Long COVID.”

PeproTech, Inc.

On April 4, 2016, the Company entered into an Agreement with PeproTech, Inc of Rocky Hill, NJ. Under the Agreement PeproTech manufactures, markets and distributes the Company’s ACSelerate – Max cell growth medium. The Company and PeproTech completed the optimization and scale up manufacturing studies and the licensed medium is marketed under both PeproTech’s, PeproGrow and the Company’s ACSelerate MAX brands. PeproTech plans to leverage its current global sales relationships which reach a majority of all research laboratories worldwide to maximize distribution of the optimized media while the Company will concentrate its sales efforts on its collaborative and international licensing partners. Additionally, the Company and PeproTech are discussing the licensing of additional American CryoStem patented media and products for production and distribution by PeproTech, any additional media licensed to PeproTech will undergo similar optimization and scale up production testing prior to being released for sale. The Company is in ongoing discussion with PeproTech related to increasing the visibility and sales of the medium and the optimization of additional medium products focused on the differentiation of adult stem cells that are synergistic to the cell culture medium. In connection with these discussions, the Company has completed an amendment to its original agreement for the expansion its collaborative efforts to finalize development of its differentiation mediums and support additional product development. The proposed amendment calls for the use of the Company’s facility by PeproTech employees for the development efforts which require the use of the Company’s cell processing facility and research samples of ATCELL throughout the testing and development. This project was scheduled for initiation in February of 2020 but has been delayed by the recent COVID 1 pandemic. The Company and PeproTech completed the amendment on August 1, 2020 and expect initial work under the amendment to begin in 2021.

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Cells on Ice:

In August 2015, the Company entered into an Agreement with Cells On Ice, Inc. (COI) located in Los Angeles, California to process and cryopreserve adipose tissue and adipose derived cellular samples for future use in Regenerative Medicine. COI is a network of physicians interested in the development and use of adipose tissue and adipose derived cellular samples in regenerative therapies and cellular medicine. The Company agreed to distribute its CELLECT® collection boxes and provide its ATGRAFT and ATCELL processing services for the collection, processing and storage of tissue samples at its NJ facility. Under the agreement, COI paid the Company for the processing and storage of each sample generated by COI network physicians. COI planned to seek regulatory approval for use of the stored samples in clinical studies utilizing adipose tissue processed into Stromal Vascular Fraction (SVF) and ultimately expanded adipose derived mesenchymal adult stem cells. The Company incorporated its existing Standard Operating Procedures (SOPs), processing protocols and patented products into COI’s studies and may provide processing and other data to COI in support of their ongoing efforts to develop and obtain regulatory approval of its cellular therapies. This initial work became the basis for Investigational New Drug and Investigational Device Exemption filings with the FDA.

 

On January 3, 2018, the Company received a warning letter from the US FDA concerning its contract manufacturing services provided to Cells On Ice. The FDA informed the Company that the FDA has determined that its autologous adipose derived cell product ATCELL is a drug under current FDA regulations and guidance and requested that the Company file an Investigational New Drug (IND) application. In response to the letter the Company ceased shipment of its ATCELL product within the United States and entered into discussions with the FDA concerning the filing of an IND. Since the Company’s initial response to the Warning letter, it has spent considerable time and effort to comply with the concerns and observations highlighted in the letter. Specifically, the Company designed and filed it first Investigation New Drug Application with FDA which was accepted for review on October 22, 2019 and was approved on September 17, 2020. Additionally, the Company has implemented, qualified, validated a complete redesigned of its manufacturing SOPs and Quality Management program, as well as constructed new cleanroom manufacturing space in its facility in Monmouth Junction, N.J, The Company has completed its final responses to FDA regarding the Warning Letter which was delivered to FDA OTAT in January 2020. The FDA has acknowledged the receipt of our response and has indicated that upon resumption of the production of ATCELL for our clinical study that an audit of our new manufacturing facility and processes may be performed at the completion of Phase I, prior to beginning Phase II.

 

Additional Collaborations

The Company is in the early stages of developing collaborations with additional industry and university partners. These developing relationships in their earliest stages are covered by Confidential Disclosure Agreements and those that are more advanced also include Material Transfer Agreements under which the Company supplies either ATCELL or ACSelerate medium products for evaluation, testing, and the development of new cellular therapy applications.

The Company has entered into Non-Disclosure and Material Transfer Agreements with a number of potential collaborators. No assurance can be given that these relationships will progress to full collaborative agreements or ultimately result in new technology for future commercialization.

Intellectual Property

 

From the Company’s formation, our strategy has been to invest time and capital in intellectual property protection. This strategy is intended to strengthen our Company’s foundation in any defensive or offensive legal challenge. In addition, we are developing our IP portfolio to ensure and enhance our business flexibility and allow us to gain favorable terms in potential future collaborative partnerships with third parties. Our intellectual property portfolio currently includes four issued U.S. patents (No. 7,989,205, and Serial No. 9,487,755, “Cell Culture Media Kits and Methods of Use”, “Systems and Methods for the Digestion of Adipose Tissue Samples Obtained from a Client for Cryopreservation” US 10,154,664 issued December 18, 2018, and “Business Method for Collection, Processing, Cryogenic Storage and Distribution of a Biologic Sample Material” US Patent Number 10,014,079, issued July 3, 2018);and has additional pending patent applications which are detailed in the following chart:

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Title Technology Patent / Application Number
Cell culture media, Kits, and Methods of Use

ACS cell culture media line

Covers 12 types of Medium

US Patent No. 7,989,205

Issued August 2, 2011

Cell culture media, Kits, and Methods of Use

ACS cell culture media line

Additional claim Granted for all 12 medium types

US Patent No. 9,487,755

Issued November 8, 2016

Continuation of US Patent No. 7,989,205

Cell culture media, Kits, and Methods of Use

ACS cell culture media line

Continuation of Granted Patent covering additional improvements

US Patent Application No. 15/344,805

Continuation of US Patent No. 7,989,205

Human serum for cell culture medium for  growth of human adipose stromal cells

A cell culture medium for growth of human adipose stromal cells for human and therapeutic applications

 

PCT/US15/68350

30 month National Phase entry date of June 31, 2017, additional International Filings for China, India, the European Union, Saudi Arabia, Israel, Brazil, Mexico, Australia and New Zealand.

A Business Method for Collection, Cryogenic Storage and Distribution of a Biological Sample Material

Company Core Tissue Collection Processing and Storage Methodology

Covers CELLECT Kit, Transport and Cryopreservation Medium for ATGRAFT and ATCELL Products

US Serial No 13/194,900

Filed June 6, 2010

Patent Application Published

December 5, 2013 Claims Granted US Patent No. 10,014,079. Continuation filed upon issuance.

A Business Method for Collection, Cryogenic Storage and Distribution of a Biological Sample Material

Company Core Tissue Collection Processing and Storage Methodology

Continuation covering Improvements

Developed Improvement established; Divisional, Continuation-In-Part claiming priority to US Serial No. 13/194,900 imminent  (PCT Application filing planned)
Systems and Methods for the Digestion of Adipose Tissue Samples Obtained From a Client For Cryopreservation

Adipose Tissue Digestion Laboratory Processing Methods

 

U.S. Serial No. 13/646,647 filed October 6, 2011, Claims Granted US Patent No.10,154,664  December 18,2018. Continuation filed upon issuance.
Systems and Methods for the Digestion of Adipose Tissue Samples Obtained From a Client For Cryopreservation

Adipose Tissue Digestion Laboratory Processing Methods

 

Developed Improvement established; Divisional, Continuation-In-Part claiming priority to US Serial No. 13/646,900 imminent  (PCT Application filing planned)
Compositions and Methods for “Collecting, Washing, Cryoprocessing, Recovering and Return of Lipoaspirate to Physicians for Autologous Adipose Transfer Procedures” Company Adipose Tissue Storage Platform for Cosmetic Procedures Covers the core processing adipose tissue for ATGRAFT adipose tissue dermal filler product

U.S. Serial No. 14/406,203 National Phase entry date of December 5, 2014 based on PCT/US2013/044621

 

European Union Application No. EPI3800847.9

China Application No. 2013800391988

Compositions and Methods for “Collecting, Washing, Cryoprocessing, Recovering and Return of Lipoaspirate to Physicians for Autologous Adipose Transfer Procedures”

Company Adipose Tissue Storage Platform for Cosmetic Procedures

Covers additional claims related to ATGRAFT process not included in original application

Developed Improvement established; Divisional, Continuation-In-Part claiming priority to US Serial No. 14/406,203 imminent  (PCT Application filing planned)
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The Company in-licenses the following IP:

 

Patent Title Use of Patent Application #

Cosmetic compositions including tropoelastin isomorphs

(wound healing)

Protein Genomics and American CryoStem (Autogenesis) collaboration USPTO #5,726,040

Cosmetic compositions

(wound healing)

Protein Genomics and American CryoStem (Autogenesis) collaboration USPTO #6,451,326

Recombinant hair treatment compositions

(wound healing)

Protein Genomics and American CryoStem (Autogenesis) collaboration USPTO #6,572,845

Wound healing compositions and methods using tropoelastin and lysyl oxidase

(wound healing)

Protein Genomics and American CryoStem (Autogenesis) collaboration USPTO: #6,808,707

Business methods, processes and systems for collection, cryogenic storage and distribution of cosmetic formulations from an obtained stem cell based a biological

(PCS)

Personal Cell Sciences and American CryoStem collaboration USPTO application #61/588,841

 

Trademarks

In addition to patents, the Company has registered the following trademarks with the U.S. Patent and Trademark Office: American CryoStem®, American CryoStem “America’s Stem Cell Bank”®, CELLECT® and ATGRAFT. We utilize additional trademarks for our products, slogans and themes to be used in our marketing initiatives including, for example, ACSelerate – MAX SFM, ACSelerate-SFM, ACSelerate- LSM and ATCELL.

 

The Company has also secured a number of online domain names relevant to its business, including www.americancryostem.com, www.acslaboratories.com and ATGRAFT.com.

 

Marketing and Distribution

 

The key objective of our marketing strategy is to position American CryoStem in the market as the “Gold Standard” for adipose tissue collection, cell processing and cryogenic storage, therapeutic applications, and research/commercial uses of adipose tissue within the current regulatory framework. The combination of a traditional sales approach supported by continuous internal and external marketing programs is closely coordinated with the expansion of our laboratory processing capabilities. Our initial marketing efforts intend to disseminate current and future uses of adipose tissue and adult stem cells which support our business model, products and services. We intend to continue to employ advertising and social media sales campaigns. In addition, we plan to continue to utilize key leaders, and early adopters in the medical community as a marketing resource to enhance awareness of our proprietary, patented products and services and to increase the number of surgeons who join our network, university and private collaboration and consumers who use our products and services.

 

We plan to continue marketing programs focused on reaching plastic and cosmetic surgeons to join the initial group of providers that began to offer our services to their patients. This marketing initiative has been implemented using a traditional sales approach common to the pharmaceutical and biotechnology industries. This fundamental sales approach at the core of our marketing activities is being strategically and tactically expanded using a combination of in-house sales personnel and outside independent channels.

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Our plan, capital permitting, provides for a comprehensive integrated marketing approach using various traditional and new media, such as the Internet, social media/blogging, video, print, TV, radio and trade shows to reach targeted potential consumers and promote awareness of our Company and our branded products and services. The essence of this targeted strategy is to reach the end-users as quickly as possible and to accelerate the adoption curve of our products and services. We also plan to utilize outside marketing resources and trade groups to increase the number of surgeons willing to offer our products and services to their patients.

 

Market Size and Opportunities

By leveraging and capitalizing on our proprietary Adipose Tissue Processing Platform, we are working to address multiple high growths, multi-billion-dollar market opportunities, including those prevailing within the Regenerative Medicine, Cosmeceuticals, Medical Tourism and Cell Culture Media markets. The Company regularly reviews independent market research to gauge the market dynamics of its intended domestic and international markets and to identify additional areas within these markets where the Company’s cell culture medium, laboratory products, and tissue and cellular processing services, can be marketed, sold and/or licensed.

 

Global Stem Cells Market

 

A report from Transparency Market Research (TMR) forecasts that the global stem cells market is expected to register a healthy CAGR of 13.8% during the period from 2017 to 2025 to become worth US$270.5 bn by 2025. Depending upon geography, the key segments of the global stem cells market are North America, Latin America, Europe, Asia Pacific, and the Middle East and Africa. At present, North America dominates the market because of the substantial investments in the field, impressive economic growth, rising instances of target chronic diseases, and technological progress. As per the TMR report, the market in North America will likely retain its dominant share in the near future to become worth US$167.33 bn by 2025.

 

A report published by Markets and Markets Research in 2017 titled “Cell Expansion Market by Product (Reagent, Media, Flow Cytometer, Centrifuge, Bioreactor), Cell Type (Human, Animal), Application (Regenerative Medicine & Stem Cell Research, Cancer), End user (Research Institute, Cell Bank) - Global Forecasts to 2021”. The report states: The global cell expansion market is expected to reach USD 18.76 Billion by 2021 from USD 8.34 Billion in 2016 at a CAGR of 17.6%. Geographically, the cell expansion market is dominated by North America, followed by Europe, Asia, and the Rest of the World (RoW). Growth in the North American segment is primarily driven by increasing incidence of chronic diseases in the North American countries. According to the American Medical Association and the American Medical Group Association, more than 50% of Americans suffered from one or more chronic diseases in 2012; the number of Americans suffering from chronic diseases was around 133 million in 2005 and this figure is expected to reach around 157 million by 2020. With this significant growth in the number of patients suffering from chronic diseases, the market for cell expansion is expected to grow in this region in the coming years.

 

Regenerative Medicine Market

 

The Global Translational Regenerative Medicine market is expected to grow significantly over the forecast period. The Global Translational Regenerative Medicine market was valued at $5.8bn in 2016. Vision gain forecasts this market to increase to $14.5bn in 2021. The market is estimated to grow at a CAGR of 19.9% in the first half of the forecast period and 17.7% from 2016 to 2027.

 

Cell Culture Market

Cell Culture Market Global Forecast to 2023, according to “marketsandmarkets” the cell culture market is expected to reach USD $26.28 Billion by 2023 from USD $15.32 Billion in 2018, at a CAGR of 11.4%. Growth in this market is driven by the growing number of regulatory approvals for cell culture-based vaccines, increasing demand for monoclonal antibodies (mAbs), funding for cell-based research, growing preference for single-use technologies, and the launch of advanced cell culture products.

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Development of Regional U.S. Markets

Physician Network

 

The Company continues to develop relationships to leverage our products and services through existing cosmetic surgery and regenerative medicine practices The Company continues its efforts to develop and expand its network of individual physicians and surgeons seeking to adopt the Company’s products and services focusing on surgeons performing liposuction, tissue transfer and regenerative procedures involving the use of adipose tissue. The Company intends to expand its efforts to medical professionals interested in Regenerative Medicine applications utilizing ADSCs to establish itself as a primary source of collection, processing and preparation of cellular therapies as they are developed and approved for patient use by the FDA.

 

Development of International Markets

 

International Licensing Program – Globally, many jurisdictions outside the US permit the use of adipose tissue based cellular therapies and regenerative medicine applications. The Company has received numerous inquiries concerning the sale or licensing of our products and services in these jurisdictions. The Company believes that the inquiries to date are a result of the global boom in Medical Tourism and the slow pace of approval of cellular therapies and regenerative medicine applications in the US. To address these inquiries and to expand the Company’s sales, marketing and branding opportunities the Company has designed and is offering an International Licensing Program.

The program is designed to permit the licensing of the Company’s products and services to organizations that meet the Company’s financial and technical criteria. The licensing program allows for a variety of business relationship including franchising, partnering and joint venturing. Marketing efforts to date have been to clinics, physician and hospitals in foreign jurisdictions capable of rapidly building or committing the appropriate facilities and personnel to create the required laboratory facilities to operate the CELLECT®, ATGRAFT and ATCELL services in their local market. Strategically, the Company’s international licensees will maintain the branding of the Company’s services along the lines of the “Intel Inside” branding program.

Qualified Licensees can quickly take advantage of the rapidly expanding opportunity to collect, process, store and culture individual regenerative cell samples for their clients with the comfort and confidence that they are providing services that have been developed to conform to US FDA standards. Core to the relationship is the developed proprietary patented and patent pending processing and laboratory operational methodologies contained in our Standard Operating Procedures, Training, and Continuous Quality Management, Testing Program, and Laboratory Operations manuals.

Licensing programs may be initiated through a letter of intent (LOI) agreement between the Company and the prospective licensee. This LOI agreement is designed for due diligence and facility qualifications purposes. The Company may receive an initial fee under the agreement which may or may not be credited toward future royalty payments. Following evaluation of the prospective licensee the Company will enter into a final Agreement which outlines all upfront fees, minimum royalties, consumable purchase obligations of the Licensee and may contain a minimum annual license fee.

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Significant to our international development activities is the global expansion of the American CryoStem branded services and patented products, as well as the expansion of the Company’s services, technology and products as the core platform to implement cellular therapies and regenerative medicine.

Cryoviva (Thailand) Ltd

On March 23, 2018, the Company into an agreement to license its ATGRAFT and ATCELL adipose tissue (fat) processing and storage technologies to Cryoviva (Thailand) Ltd., (“Cryoviva”) a Bangkok, Thailand based Cord Blood processing and storage facility. Cryoviva, Thailand, currently offers collection; processing and storage of Cord Blood derived biologics to patients throughout Thailand and South East Asia.

American CryoStem licensed to Cryoviva (Thailand) Ltd., established in 2007, the rights to utilize the Company’s Standard Operating Procedures (SOP’s) to create and market the Company’s ATGRAFT tissue storage service and ATCELL adipose derived stem cell processing and storage services in Thailand. The financial terms include the payment of certain training fees and, a percentage of the gross revenue subject to annual minimum payments generated from our products. Additionally, the Agreement calls for the purchase of CRYO consumable products required for ATGRAFT and ATCELL sample processing including CRYO’s ACSelerate non-DMSO cryogenic tissue storage media, transportation media, Cellect tissue collection kit, and ACSelerate – Max cell culture medium.

The Company has been assisting CRYOVIVA with the development of their branding and marketing campaign for Thailand and providing technical assistance and support for their import of consumables purchased from the Company. CRYOVIVA has scheduled the launch of its marketing campaign for the first quarter of 2020 and the Company believes that it will see an increase in the sale of consumables and licensing fees from CRYOVIVA in fiscal 2020. Based upon communication with the management team of CRYOVIVA, the scheduled launch of CRYOVIVA’s marketing plan has been delayed due to the COVID 19 outbreak, response and lockdown in Thailand and the US. The Company believes that the Marketing program will commence in 2021.

Baoxin Asia Pacific Biotechnology (Shenzhen) Co., Ltd

On July 12, 2018, the Company announced the national launch of CRYO’s ATGRAFT tissue collection, processing and storage technology by Baoxin Asia Pacific Biotechnology (Shenzhen) Co. Ltd. (“Baoxin”) in China. The management team traveled throughout south east China with the management and marketing team of Baoxin to present the ATGRAFT platform to leading plastic and cosmetic surgery hospitals in Shenzhen, Nanning, Guangzhou, Guangxi and Changsha. The China launch activities are in support of the Company’s previously announced licensing and supply agreement with Baoxin, under which Baoxin will pay the Company a minimum annual guarantee against a fixed fee per process and purchase certain necessary consumables from CRYO required for the collection, processing and storage of the collected adipose tissue. Under the terms of the Agreements signed in Fiscal 2018, the Company invested in and currently holds five percent (5%) of Baoxin shares. Additionally, Mr. Arnone and Mr. Dudzinski were elected to serve as Directors of Baoxin during their visit to Shenzhen, China. During 2019 Mr. Arnone resigned from the board of Baoxin.

 

During Fiscal 2020, due to the effects of the COVID 19 Pandemic and government regulations, Baoxin suspended operations. We have been informed by the Company Chairman and CEO that they have recently completed their new facility in Shenzhen, China. CRYO management is working with Baoxin during this time to assist them in bringing their new facility online for tissue processing in 2021.

 

CellSource, LTD. – Tokyo, Japan

 

In the second quarter of 2015, the Company entered into negotiations with CellSource, LLC in Tokyo, Japan for the licensing of its ATGRAFT products and services and on June 2, 2015 the Company and Cell Source entered into an initial term sheet licensing the ATGRAFT technology to CellSource for Japan. The non- exclusive agreement expired in June of 2020 and has not been renewed.

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Health Information Technology Company, LTD – Hong Kong and Shenzhen, China

On June 30, 2014, the Company granted Health Information Technology Company, LTD (“HIT”) exclusive rights to utilize the Company’s Standard Operating Procedures (SOP’s) to market the Company’s ATGRAFT tissue storage service in Hong Kong. The Agreement calls for upfront fees, royalties and the purchase by HIT of certain consumables manufactured by the Company. The Company and HIT have reached further agreement to extend their relationship on a non exclusive basis to include HIT’s cord blood laboratory located in Shenzhen, Guangdong Province, one of China’s most successful Special Economic Zones. The HIT agreement includes, initial upfront fees and royalty payments for predetermined gross revenue volumes. HIT will also purchase CRYO ACSelerate storage media, CELLECT collection and transportation kit as well as other American CryoStem products necessary for clinical adipose tissue processing and storage at the Shenzhen cord blood collection facility. The final master licensing agreement is for a period of 5 years with renewal options and was executed between the parties on September 24, 2014. In 2017 as part of the Company’s transaction with Baoxin, HIT and the Company agreed to transfer certain product and distribution rights granted to HIT under its 2014 agreement to Baoxin. The Company was paid a fee in the transaction and was provided with an initial ownership position in a planned Regenerative Treatment Center to be established by HIT in Hong Kong.

The HIT license has been extended per the terms of Schedule B of the Term Sheet, dated June 30, 2014, for an additional 3 year period to June 30, 2023.

Corporate Information

 

Our principal executive offices are located at 1 Meridian Road, Eatontown, New Jersey 07724 and our telephone number is (732) 747-1007 our fax number is 732-747-7782. Our website is www.americancryostem.com. We also lease and operate a tissue processing laboratory in Monmouth Junction, New Jersey at 7 Deer Park Drive, Monmouth Junction, NJ 08852.

 

Available Information

We file electronically with the U.S. Securities and Exchange Commission (SEC) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. The public can obtain materials that we file with the SEC through the SEC’s website at http://www.sec.gov or at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549.  Information on the operation of the Public Reference Room is available by calling the SEC at 800-SEC-0330.

 

Going Concern

 

As of the date of this report, there is substantial doubt regarding our ability to continue as a going concern as we have not generated sufficient cash flow to fund our proposed business.

 

The accompanying consolidated financial statements have been presented in accordance with generally accepted accounting principles in the U.S., which assume the continuity of the Company as a going concern. However, the Company has incurred significant losses since its inception which raises substantial doubt about the Company’s ability to continue as a going concern. Management has made this assessment for the period one year from date of the issuance of these financial statements. Management’s plan with regard to this matter is to continue to fund its operations through fundraising activities in fiscal 2021 to fund future operations and business expansion.

 

Our plans with regard to these matters encompass the following actions: (i) obtaining funding from new investors to alleviate our working capital deficiency, and (ii) implementing a plan to generate sales of our proposed products. Our continued existence is dependent upon our ability to resolve our liquidity problems and achieve profitability in our current business operations. However, the outcome of management’s plans cannot be ascertained with any degree of certainty. Our financial statements do not include any adjustments that might result from the outcome of these risks and uncertainties.

 

Results of Operations — Three Months

 

The Company’s revenue for the quarter ended March 31, 2021 decreased to $126,935 versus $161,340 in the same period of Fiscal 2020. Licensing Revenue decreased to $125,000 compared to $135,000 in Fiscal 2020.

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Operating expenses decreased to $397,220 for the quarter ended March 31, 2021, from $501,943 for the same period in Fiscal 2020. Although the company increased its Research and Development efforts and increased it Professional Fees due to hiring an Investor Relations firm, it was able to reduce its overall Operating Expenses, since in 2020 it increased its Allowance for Doubtful Accounts.

 

Administrative expenses increased to $144,680 from $102.887 due to an increase in amortization of patents.

 

Interest expense for the quarter ending March 31, 2021 decreased to $29,742 as compared to $42,034 for the same period in 2020. The interest expense for the quarters ended March 31, 2021 and 2020 includes an additional $7,985 and $20,691 respectively for the effects of the beneficial conversion feature associated with debenture holders.

 

Net loss for the second quarter of Fiscal 2021 was $304,729 compared to a net loss of $147,227 for the second quarter of Fiscal 2020. The increase of the loss for the 2021 quarter was primarily due to the absence of Other Income Items such as the Gain on the value of the derivative and the Gain due to the write-off of an outstanding liability in the 2020 quarter.

 

Liquidity and Capital Resources

 

As of March 31, 2021, the Company had a cash balance of $109,108, an increase of $67,348 since September 30, 2020. We used $235,261 of our cash for operations and $19,236 for investing activities. The main sources of cash provided by financing activities included new equity and debt issuances totaling $342,500

 

Accounts Receivable increased to $749,350 at March 31, 2021 from $500,000 at September 30, 2020 mainly due to an increase in receivables from Baoxin for licensing fees. Due to the current economic and health conditions in China, including increased tariffs and the Corona virus, the Company is closely monitoring the impact of these circumstances.

 

Convertible debt increased to $699,305 an increase of $140,753 since September 30, 2020. This increase was due to the issuance of an additional $150,000 of new Convertible Notes along with the effects of increasing and amortizing the beneficial conversion feature of these notes. See Note 7. Debt reported in the financial statements.

 

The Company will continue to focus on its financing and investment activities, but should we be unable to raise sufficient funds, we will be required to curtail our operating plans or cease them entirely. We cannot assure you that we will generate the necessary funding to operate or develop our business. Please see “Cash Requirements” above for our existing plans with respect to raising the capital we believe will be required. In the event that we are able to obtain the necessary financing to move forward with our business plan, we expect that our expenses will increase significantly as we attempt to grow our business. Accordingly, the above estimates for the financing required may not be accurate and must be considered in light these circumstances.

 

There was no significant impact on the Company’s operations as a result of inflation for the three months ended March 31, 2021.

 

Cash Requirements

 

We will require additional capital to fund marketing, operational expansion, processing staff training, as well as for working capital. We are attempting to raise sufficient funds that would enable us to satisfy our cash requirements for a period of the next 12 to 24 months. In order to finance further market development with the associated expansion of operational capabilities for the time period, we will need to raise additional working capital. However, we cannot assure you we can attract sufficient capital to enable us to fully fund our anticipated cash requirements during this period. In addition, we cannot assure you that the requisite financing, whether over the short or long term, will be raised within the necessary time frame or on terms acceptable to us, if at all. Should we be unable to raise sufficient funds we may be required to curtail our operating plans if not cease them entirely. As a result, we cannot assure you that we will be able to operate profitably on a consistent basis, or at all, in the future.

 

In order to move our Company through its next critical growth phase of development and commercialization and to ensure we are in position to support our research collaborations and market penetration strategies, Management continues to seek new investment into the Company from existing and new investors with particular emphasis on identifying the best deal structure to attract and retain meaningful capital sponsorship from both the retail and institutional investing communities, while limiting dilution to our current shareholders. Management also focuses its efforts on increasing sales and licensing revenue and reducing expenses.

34
 

Effects of COVID 19

 

The main effects of the COVID 19 pandemic were with the Company’s US domestic physician network and its international partners. China, Hong Kong and Thailand have been in lockdown since January 2020. This has hindered our attempts to resolve our outstanding receivable from Baoxin. Considering this, we elected to increase our provision for doubtful accounts by $325,000 in Fiscal 2019 with regard to their outstanding balance. Cryoviva Thailand was in the midst of implementing a new marketing program in January 2021 which continues to be delayed due to the circumstances. Based upon our discussions in March 2021 with Cryoviva (Thailand) and Baoxin (China) we expect them to restart the marketing campaign efforts in 2021.

 

Commitments

 

Effective October 1, 2019, the Company adopted the provision of ASC 842 Leases. The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, one of the Company’s leases does not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate which is based on the interest rate of similar debt outstanding.

 

Finance Lease

 

The Company leases Equipment at its laboratory from NFS Leasing, Inc. The final lease payment was made on May 1, 2021. Now that the final payment has been made, the Company owns the equipment. See Note 11: Leases in the financial statements.

 

Operating Lease

 

The Company leases its office facility, in Eatontown, New Jersey, from Eaton Holdings LLC. The lease expired on April 30, 2021 and the Company exercised a renewal option for an additional three years. See Note 11. Leases in the Financial Statements.

 

The Company leases a laboratory facility in Monmouth Junction, New Jersey, from Princeton Corporate Plaza LLC. The lease expired on March 31, 2021 and is on a month-to-month basis. The Company is currently negotiating an extension of the lease to March 31, 2022. The rent payment was $2,389 per month. Total rent paid for the laboratory facility for the three months ended March 31, 2021 was $7,167.

 

Since the lease obligation is less than twelve months, the Company does not report a lease related asset or liability for this lease.

 

The Company was not party to any litigation against it and is not aware of any litigation contemplated against it as of March 31, 2021. See also Legal Proceedings below.

 

We anticipate that any further capital commitments that may be incurred will be financed principally through the issuance of our securities. However, we cannot assure you that additional financing will be available to us on a timely basis, on acceptable terms, or at all.

 

Related Party Transactions

 

On October 1, 2020, the Company executed a note with ACS Global for a principal amount of $99,125 representing the outstanding balance due to ACS Global. The Company increased the amount of the note to $148,125 on March 1, 2021. The Note matures on October 1, 2023 and carries an interest rate of 10% per annum which may be paid in cash or stock. The note is due and payable in full upon maturity. The note may be prepaid at any time by the Company. The principal balance of the note at March 31, 2021 is $147,775.

The Company was indebted to a company (ACS Global) that is majority owned by the Company’s two officers in the amount of $99,125 at September 30, 2020. The advances were unsecured, and carried no interest rate and were collectible at the discretion of the company’s two officers/directors.

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Off Balance Sheet Arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

Critical Accounting Policies

 

We prepare financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”), which requires us to make estimates and assumptions that affect the amounts reported in our combined and consolidated financial statements and related notes. See Note 1 and Note 3 to the Financial Statements for more information.

 

Basis of Presentation

 

Our financial statements are presented on the accrual basis of accounting in accordance with generally accepted accounting principles in the United State of America, whereby revenues are recognized in the period earned and expenses when incurred.

Management’s Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

 

Long-Lived Assets

 

We review and evaluate our long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, we compare the assets’ carrying amounts against the estimated undiscounted cash flows to be generated by those assets over their estimated useful lives. If the carrying amounts are greater than the undiscounted cash flows, the fair values of those assets are estimated by discounting the projected cash flows. Any excess of the carrying amounts over the fair values are recorded as impairments in that fiscal period.

 

Statement of Cash Flows

 

For purposes of the statement of cash flows, we consider all highly liquid investments (i.e., investments which, when purchased, have original maturities of three months or less) to be cash equivalents.

 

Recent Accounting Pronouncements

 

In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments-Credit Losses.  The new guidance provides better representation about expected credit losses on financial instruments. This Update requires the use of a methodology that reflects expected losses and requires consideration of a broader range of reasonable and supportive information to inform credit loss estimates.  This ASU is effective for reporting periods beginning after December 15, 2022, with early adoption permitted.  The company is studying the impact of adopting the ASU in fiscal year 2024, and what effect it could have. The Company believes the accounting change would not have a material effect on the financial statements.

 

In November 2018, the FASB issued ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606. This new ASU applies to companies that have collaborative arrangements, or agreements that involve two parties that actively participate in a joint operating activity. The company policy is to enter into collaborative arrangements that benefit its expansion of its products and services. We believe our contract with Baoxin falls under the collaborative arrangements guidance in (ASC 808). We are collaborating with Baoxin to develop and expand clinical study of our product in China. According to the agreement, we retain all rights to co-developed intellectual property, while providing a Licensing Agreement to our collaborator allowing the use of our intellectual property in their geographic region. Since ASU 2018-18 is effective for public companies for years beginning after December 15, 2019, the Company has implemented ASU 2018-18 for Fiscal 2021. Implementation of ASU 2018-18 has not affected prior or current revenue recognition, since according to the contract we bill License Fees for the use of our intellectual property and for any products shipped.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not Applicable

 

ITEM 4. CONTROLS AND PROCEDURES

 

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

 

The Company’s disclosure controls and procedures are designed to ensure (i) that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms; and (ii) that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Our principal executive officer and principal financial officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2021 and concluded that the disclosure controls and procedures were effective as a whole.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

 

ITEM 1.

LEGAL PROCEEDINGS

 

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

 

ITEM 1A. RISK FACTORS

 

Not applicable.

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

During the six months ended March 31, 2021, the Company issued 640,000 shares and received proceeds of $143,000. The share price was determined by agreement with the purchasers, based upon the current market price less a discount for purchasing restricted securities.

During the six months ended March 31, 2021, the Company issued 80,000 shares and for services valued at $20,000. The share price was determined by agreement with the service provider, based upon the current market price less a discount for purchasing restricted securities.

During the six months ended March 31, 2021, the Company issued 100,000 shares for services to be provided valued at $75,000. The share price was determined by agreement with the service provider, based upon the current market price less a discount for purchasing restricted securities.

During the six months ended March 31, 2021, the Company issued 81,031 shares to pay interest due holders of bridge notes and convertible notes. The amount of interest paid was $26,147. The share prices were determined by the aggregate market price for the week in which the interest became due.

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4.

MINE SAFETY DISCLOSURES

 

Not Applicable

 

ITEM 5.

OTHER INFORMATION

 

None

 

ITEM 6. EXHIBITS

 

(a) Exhibits furnished as Exhibits hereto:

 

Exhibit No.

Description
   
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
38
 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

AMERICAN CRYOSTEM CORPORATION

     
May 17, 2021 By: /s/ John Arnone
    John Arnone, Chief Executive Officer
   

(Principal Executive Officer)

     
May 17, 2021 By: /s/ Anthony Dudzinski
    Anthony Dudzinski, Treasurer
    (Principal Financial Officer)
39

 

EX-31.1 2 ex31_1.htm EXHIBIT 31.1
 

EXHIBIT 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

 

I, John Arnone, certify that:

 

1. I have reviewed this Form 10-Q of American CryoStem Corporation;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
   
4. Along with the Principal Accounting Officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
     
  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
     
5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
     
  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b) Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

May 17, 2021

By:  /s/ John Arnone  
    John Arnone  
   

Principal Executive Officer

American CryoStem Corporation

 
40
EX-31.2 3 ex31_2.htm EXHIBIT 31.2
 

EXHIBIT 31.2

 

CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

 

I, Anthony Dudzinski, certify that:

 

1. I have reviewed this Form 10-Q of American CryoStem Corporation;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
   
4. Along with the Principal Executive Officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
     
  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
     
5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
     
  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b) Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

May 17, 2021 By: /s/ Anthony Dudzinski  
    Anthony Dudzinski  
   

Principal Financial Officer

American CryoStem Corporation

 
41
EX-32.1 4 ex32_1.htm EXHIBIT 32.1
 

EXHIBIT 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

 

In connection with this Quarterly Report of American CryoStem Corporation (the “Company”), on Form 10-Q for the six months ended March 31, 2021, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, John Arnone, Chief Executive Officer of the registrant and Anthony Dudzinski, Principal Financial Officer of the registrant, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)

Such Quarterly Report on Form 10-Q for the six months ended March 31, 2021 fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

The information contained in such Quarterly Report on Form 10-Q for the six months ended March 31, 2021 fairly presents, in all material respects, the financial condition and results of operations of the Company.

       

May 17, 2021

By:  /s/ John Arnone  
    John Arnone  
   

Chief Executive Officer

American CryoStem Corporation

 
       

May 17, 2021

By:  /s/ Anthony Dudzinski  
    Anthony Dudzinski  
   

Chief Principal Officer

American CryoStem Corporation

 
42
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(R&#38;A).</p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 10pt">In April 2011, R&#38;A purchased substantially all the assets and liabilities of American CryoStem Corporation (ACS) a company formed in 1987, for 21 million shares of common stock. ACS was deemed to be the accounting acquirer. At the date of the purchase, the former operations of R&#38;A were discontinued and the name of the Company was changed to American CryoStem Corporation.</p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 10pt">The Company is in the business of collecting adipose tissue, processing it to separate the adult stem cells, and preparing such stem cells for long-term storage. The process allows individuals to preserve their stem cells for future personal use in cellular therapy. The adipose derived stem cells are prepared and stored in their raw form without manipulation, bio-generation or the addition of biomarkers or other materials, making them suitable for use in cellular treatments and therapies offered by existing and planned treatment centers worldwide. Individualized collection and storage of adult stem cells provides personalized medicine solutions by making the patient&#8217;s own preserved stem cells available for future cellular therapies.</p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 10pt">The Company&#8217;s first US Clinical Study (FDA file No. 19089) for its flagship cellular therapy product ATCell was initiated in September of 2020. The clinical study for Post Concussion Syndrome will establish safety and collect efficacy data for the use of ATCell delivered by infusion therapy. The Company is planning additional studies with collaborators which the Company expects to file upon completion of the protocol and submission and approval by the US Food and Drug Administration.</p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 10pt">The Company has devoted a significant amount of its time and resources to develop its technologies and intellectual property. These efforts have resulted in the development of cell lines, cell culture medium and other laboratory products which the Company believes are suitable for licensing and distribution by third parties. Additionally the Company has initiated a licensing program to license its technologies to laboratories currently processing other types of biologic materials including cord blood and general blood banks. The Company closed its first licensing agreement in 2014 and intends to pursue additional licensing partners in the future.</p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 10pt; background-color: white">The accompanying consolidated financial statements include the accounts of American CryoStem Corporation and its wholly owned subsidiaries.&#160; The Company&#8217;s subsidiaries are APAC CryoStem Limited, a Hong Kong company and APAC CryoStem (Shenzhen) Ltd. which were established to support its licensing agreement and operations, and collect the licensing fees in Hong Kong and China. Currently Mr. Arnone and Mr. Dudzinski serve as management and directors of both companies. All significant intercompany accounts and transactions have been eliminated in the consolidation. Management believes all amounts have been adjusted properly.</p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 10pt">Accounting policies refer to specific accounting principles and the methods of applying those principles to present fairly the company&#8217;s financial position and results of operations in accordance with generally accepted accounting principles. The policies discussed below include those that management has determined to be the most appropriate in preparing the company&#8217;s financial statements.</p> <p style="font: 8pt Times New Roman, Times, Serif; margin: 0 0 10pt">The Consolidated Financial Statement Disclosures for the quarter ended March 31, 2021 are condensed and all necessary adjustments have been made. 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debenture) Penalties Net loss Basic & fully diluted net income (loss) per common share Weighted average of common shares outstanding - basic & fully diluted Statement of Cash Flows [Abstract] Operating Activities: Net loss Adjustments to reconcile net loss items not requiring the use of cash: Gain on write off of liability Derivative change in fair value Loss on loan issuance Amortization of debt discount Common stock for services Interest paid in common stock Interest expense - beneficial conversion feature Depreciation & amortization expense Changes in operating assets and liabilities Accounts receivable Related party receivable Prepaid expense Inventory Accounts payable and accrued expenses Accrued executive compensation Deferred revenue Net cash used by operations Investing Activities: Purchase of equipment Patents development Net cash used by investing activities Financing Activities: Issuance of common shares Note converted to stock Issuance of convertible notes Paid down finance lease Payable to related party Net cash provided by financing activities Net change in cash Cash and equivalents, beginning of the period Cash and equivalents, end of the period Supplemental Disclosures of Cash Flow Information: Interest paid during the period Income taxes paid during the period Beginning balance (in shares) Beginning balance Issuance of common shares (in shares) Issuance of common shares Common stock for services (in shares) Common stock for services Common stock for prepaid expenses (in shares) Common stock for prepaid expenses Common stock for interest (in shares) Common stock for interest Beneficial conversion feature Net loss Ending balance (in shares) Ending balance Organization, Consolidation and Presentation of Financial Statements [Abstract] Organization of the Company and Significant Accounting Policies Going Concern Going Concern Revenue Recognition [Abstract] Revenue Recognition Earnings Per Share [Abstract] Loss per Share Property, Plant and Equipment [Abstract] Fixed Assets Finite-Lived Intangible Assets, Net [Abstract] Patents & Patents Filings Debt Disclosure [Abstract] Debt Equity [Abstract] Common Stock Issuances Share-based Payment Arrangement [Abstract] Option Issuances Fair Value Disclosures [Abstract] Fair Values of Financial Instruments Leases [Abstract] Leases Risks and Uncertainties [Abstract] Concentrations of Credit Investments [Abstract] Investments Related Party Transactions [Abstract] Related Party Transactions Subsequent Events [Abstract] Subsequent Events Use of Estimates Cash Accounting for Investments Revenue Recognition Advertising Bad Debt Expense Inventory Long Lived Assets Fixed Assets Income Taxes Recently Issued Accounting Pronouncements Schedule of estimated useful life of assets Schedule of revenue and allowances Schedule of computation of net loss per share Schedule of fixed assets Schedule of patent amortization Schedule of debt outstanding Schedule of common stock option activity Schedule of finance lease related assets and liabilities Schedule of finance lease obligations Schedule of opertating lease related assets and liabilities Schedule of operating lease obligations Long-Lived Tangible Asset [Axis] Estimated useful life of assets Advertising costs Allowance for doubtful accounts Weighted average shares outstanding - basic & fully diluted Shares excluded from computation of earnings per share Fixed assets, gross Accumulated depreciation Fixed assets, net Depreciation expense 2022 2023 2024 2025 2026 Amortization expense Unamortized costs of patents Amortizable patent costs Carrying value Maturity Rate Number of options outstanding, beginning Number of options granted Number of options exercised Number of options expired Number of options forfeited Number of options outstanding, ending Number of options vested Range of exercise price options outstanding, beginning Range of exercise price options granted Range of exercise price options exercised Range of exercise price options expired Range of exercise price options forfeited Range of exercise price options outstanding, ending Range of exercise price options vested Weighted average exercise price outstanding, beginning Weighted average exercise price outstanding, ending Weighted average exercise price vested Weighted average remaining term, beginning Weighted average remaining term, ending Weighted average remaining term vested Intrinsic value of the outstanding common stock options Intrinsic value of the outstanding vested stock options Assets Finance lease asset Total finance lease assets Liabilities Current liabilities Noncurrent liabilities Finance lease liability Total finance lease liability Total payments Amount representing interest Finance lease obligation, net Finance lease obligation, current portion Finance lease obligation, long-term portion Assets Operating lease asset Total operating lease assets Liabilities Current liabilities Noncurrent liabilities Operating lease liability Total operating lease liability Total payments Amount representing interest Operating lease obligation, net Operating lease obligation, current portion Operating lease obligation, long-term portion Finance lease expense Amortization expense Interest expense Finance lease remaining lease term Finance lease discount rate Operating lease expense Amortization expense Interest expense Cash paid under operating lease Operating lease remaining lease term Operating lease discount rate Rent paid for the laboratory facility Concentration percent Accounts receivable Due to related parties Custom Element. Activities and balances associated with laboratory equipment. Represents laboratory furniture. Custom Element. Assets, Current Assets [Default Label] Liabilities, Current Convertible Notes Payable, Noncurrent Liabilities [Default Label] Stockholders' Equity Attributable to Parent Liabilities and Equity Cost of Revenue Gross Profit Operating Expenses [Default Label] Operating Income (Loss) Operating Leases, Rent Expense Taxes, Other Effect of Exchange Rate on Cash and Cash Equivalents Interest Expense Penalties GainLossOnWriteOffOfLiability Increase (Decrease) in Derivative Assets Increase (Decrease) in Accounts Receivable Increase (Decrease) in Due from Related Parties Increase (Decrease) in Prepaid Expense Increase (Decrease) in Inventories Net Cash Provided by (Used in) Operating Activities Payments to Acquire Property, Plant, and Equipment Increase (Decrease) in Intangible Assets, Current Net Cash Provided by (Used in) Investing Activities Debt Conversion, Converted Instrument, Amount Repayments of Long-term Capital Lease Obligations Net Cash Provided by (Used in) Financing Activities Cash and Cash Equivalents, Period Increase (Decrease) Shares, Outstanding Stock Issued During Period, Value, New Issues Stock Issued During Period, Value, Issued for Services Net Income (Loss), Including Portion Attributable to Noncontrolling Interest Substantial Doubt about Going Concern [Text Block] Cash and Cash Equivalents, Policy [Policy Text Block] Revenue [Policy Text Block] Inventory, Policy [Policy Text Block] Property, Plant and Equipment, Policy [Policy Text Block] Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number NumberOfOptionsExercised Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price Finance Lease, Liability, Undiscounted Excess Amount Lessee, Operating Lease, Liability, to be Paid Lessee, Operating Lease, Liability, Undiscounted Excess Amount Finance Lease, Right-of-Use Asset, Amortization Operating Lease, Right-of-Use Asset, Amortization Expense OperatingLeaseInterestExpense EX-101.PRE 10 cryo-20210331_pre.xml XBRL PRESENTATION FILE XML 11 R1.htm IDEA: XBRL DOCUMENT v3.21.1
Document and Entity Information - shares
6 Months Ended
Mar. 31, 2021
May 15, 2021
Cover [Abstract]    
Entity Registrant Name AMERICAN CRYOSTEM Corp  
Document Type 10-Q  
Document Period End Date Mar. 31, 2021  
Amendment Flag false  
Entity Central Index Key 0001468679  
Current Fiscal Year End Date --09-30  
Entity Common Stock, Shares Outstanding   60,833,131
Entity Filer Category Non-accelerated Filer  
Entity Emerging Growth Company false  
Entity Small Business true  
Entity Current Reporting Status Yes  
Entity Shell Company false  
Entity Interactive Data Current Yes  
Entity Incorporation, State or Country Code NV  
Entity File Number 000-54672  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q2  
XML 12 R2.htm IDEA: XBRL DOCUMENT v3.21.1
Consolidated Balance Sheets - USD ($)
Mar. 31, 2021
Sep. 30, 2020
Current Assets:    
Cash $ 109,108 $ 41,760
Accounts receivable - net of allowance for bad debt 749,350 500,000
Other receivables 4,961 0
Inventory 21,540 20,401
Prepaid expenses 46,900 5,000
Total current assets 931,859 567,161
Other Assets:    
Investment in Baoxin- at cost 300,000 300,000
Security deposit 13,540 13,540
Patent and patents development - net of accumulated amortization 355,385 365,676
Fixed assets - net of accumulated depreciation 120,035 126,591
Finance lease - right-of-use-asset 76,626 85,817
Operating lease - right-of-use-asset 2,631 18,064
Total assets 1,800,076 1,476,849
Current Liabilities:    
Accounts payable & accrued expenses 286,668 181,924
Legal & accounting payable 29,168 23,568
Bridge notes payable 226,500 226,500
Convertible notes payable 573,500 558,552
PPP Loan - current portion 22,107 14,304
Finance lease liability 6,917 26,722
Operating lease liability 2,631 18,064
Total current liabilities 1,147,491 1,049,634
Long Term Liabilities:    
PPP Loan 1,300 9,103
Accrued executive salaries 860,186 740,186
Convertible notes payable 125,805 0
Payable to related parties 147,775 99,125
Total liabilities 2,282,557 1,898,048
Commitments and contingencies 0 0
Shareholders' Deficit:    
Preferred stock - $.0001 par value, 50,000,000 shares authorized, 0 shares issued and outstanding at March 31, 2021 and September 30, 2020 0 0
Common stock - $.001 par value, 300,000,000 shares authorized, 60,471,697 shares issued and outstanding at March 31, 2021 and 59,570,666 issued and outstanding at September 30, 2020 60,473 59,572
Additional paid in capital 16,205,988 15,917,408
Accumulated deficit (16,748,942) (16,398,179)
Total shareholders' deficit (482,481) (421,199)
Total liabilities & shareholders' deficit $ 1,800,076 $ 1,476,849
XML 13 R3.htm IDEA: XBRL DOCUMENT v3.21.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Mar. 31, 2021
Sep. 30, 2020
Statement of Financial Position [Abstract]    
Preferred stock, par value $ .0001 $ 0.0001
Preferred stock, authorized 50,000,000 50,000,000
Preferred stock, issued 0 0
Preferred stock, outstanding 0 0
Common stock, par value $ 0.001 $ 0.001
Common stock, authorized 300,000,000 300,000,000
Common stock, issued 60,471,697 59,570,666
Common stock, outstanding 60,471,697 59,570,666
XML 14 R4.htm IDEA: XBRL DOCUMENT v3.21.1
Consolidated Statements of Operations - USD ($)
3 Months Ended 6 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Mar. 31, 2021
Mar. 31, 2020
Total revenues $ 126,935 $ 161,340 $ 253,535 $ 294,467
Less: cost of revenues (4,789) (11,522) (8,090) (16,710)
Gross margin 122,146 149,818 245,445 277,757
Operating Expenses        
Research & development 149,576 0 179,319 19,176
Laboratory expense 15,461 27,224 32,344 44,622
Sales & marketing 3,248 8,960 4,010 22,761
Professional fees 84,255 38,072 102,190 72,220
Bad debt expense 0 324,800 0 326,800
General & administrative 144,680 102,887 251,209 234,246
Total operating expenses 397,220 501,943 569,072 719,825
Net gain (loss) from operations (275,074) (352,125) (323,627) (442,068)
Other Income (Expenses):        
Interest income 1 22 3 22
Laboratory rent 0 0 3,000 0
Gain on value of derivative 0 132,019 0 133,892
Gain on write off of liability 0 166,667 24,000 166,667
Loss on debt settlement 0 (2,504) 0 (2,504)
Foreign taxes 0 (7,247) 0 (13,808)
Loss on loan issuance 0 0 0 (92,951)
Amortization of debt discount 0 (42,000) 0 (84,000)
Exchange rate 86 0 86 0
Interest expense (21,847) (21,343) (38,139) (42,930)
Interest expense (beneficial conversion feature - debenture) (7,895) (20,691) (16,086) (41,382)
Penalties 0 (25) 0 (25)
Net loss $ (304,729) $ (147,227) $ (350,763) $ (419,087)
Basic & fully diluted net income (loss) per common share $ (0.005) $ (0.003) $ (0.006) $ (0.008)
Weighted average of common shares outstanding - basic & fully diluted 60,248,623 50,262,918 59,963,564 49,883,110
Tissue Processing & Storage        
Total revenues $ 1,175 $ 11,900 $ 2,775 $ 11,900
Product Sales        
Total revenues 760 14,440 760 15,900
Licensing Fees & Royalties        
Total revenues $ 125,000 $ 135,000 $ 250,000 $ 266,667
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Consolidated Statements of Cash Flows - USD ($)
6 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Operating Activities:    
Net loss $ (350,763) $ (419,087)
Adjustments to reconcile net loss items not requiring the use of cash:    
Gain on write off of liability (24,000) 0
Derivative change in fair value 0 (133,892)
Loss on loan issuance 0 92,951
Amortization of debt discount 0 84,000
Bad debt expense 0 326,800
Common stock for services 20,000 0
Interest paid in common stock 26,148 0
Interest expense - beneficial conversion feature 16,086 41,382
Depreciation & amortization expense 45,274 16,689
Changes in operating assets and liabilities    
Accounts receivable (249,350) (249,941)
Related party receivable (4,961) 0
Prepaid expense 33,100 0
Inventory (1,139) (11,253)
Accounts payable and accrued expenses 134,344 (175,260)
Accrued executive compensation 120,000 120,000
Deferred revenue 0 (16,666)
Net cash used by operations (235,261) (324,277)
Investing Activities:    
Purchase of equipment 0 (2,740)
Patents development (19,236) (5,190)
Net cash used by investing activities (19,236) (7,930)
Financing Activities:    
Issuance of common shares 143,000 175,000
Note converted to stock 0 168,000
Issuance of convertible notes 150,000 0
Paid down finance lease (19,805) (17,210)
Payable to related party 48,650 (6,166)
Net cash provided by financing activities 321,845 319,624
Net change in cash 67,348 (12,583)
Cash and equivalents, beginning of the period 41,760 23,800
Cash and equivalents, end of the period 109,108 11,217
Supplemental Disclosures of Cash Flow Information:    
Interest paid during the period 1,312 3,907
Income taxes paid during the period $ 0 $ 0
XML 16 R6.htm IDEA: XBRL DOCUMENT v3.21.1
Consolidated Statement of Changes in Shareholder's Deficit - USD ($)
Common Shares
Paid in Capital
Accumulated Deficit
Total
Beginning balance (in shares) at Sep. 30, 2019 49,387,918     49,387,918
Beginning balance at Sep. 30, 2019 $ 49,389 $ 13,931,500 $ (15,218,894) $ (1,238,005)
Issuance of common shares (in shares) 875,000     875,000
Issuance of common shares $ 875 174,125   $ 175,000
Net loss (419,087) $ (419,087)
Ending balance (in shares) at Mar. 31, 2020 50,262,918     50,262,918
Ending balance at Mar. 31, 2020 $ 50,264 14,105,625 (15,637,981) $ (1,482,092)
Beginning balance (in shares) at Dec. 31, 2019 50,262,918     50,262,918
Beginning balance at Dec. 31, 2019 $ 50,264 14,105,625 (15,490,754) $ (1,334,865)
Net loss (147,227) $ (147,227)
Ending balance (in shares) at Mar. 31, 2020 50,262,918     50,262,918
Ending balance at Mar. 31, 2020 $ 50,264 14,105,625 (15,637,981) $ (1,482,092)
Beginning balance (in shares) at Sep. 30, 2020 59,570,665      
Beginning balance at Sep. 30, 2020 $ 59,572 15,917,408 (16,398,179) $ (421,199)
Issuance of common shares (in shares) 640,000     640,000
Issuance of common shares $ 640 142,360   $ 143,000
Common stock for services (in shares) 80,000     80,000
Common stock for services $ 80 19,920   $ 20,000
Common stock for prepaid expenses (in shares) 100,000     100,000
Common stock for prepaid expenses $ 100 74,900   $ 75,000
Common stock for interest (in shares) 81,031     81,031
Common stock for interest $ 81 26,067   $ 26,148
Beneficial conversion feature   25,333   25,333
Net loss (350,763) (350,763)
Ending balance (in shares) at Mar. 31, 2021 60,471,696      
Ending balance at Mar. 31, 2021 $ 60,473 16,205,988 (16,748,942) $ (482,481)
Beginning balance (in shares) at Dec. 31, 2020 60,063,165     60,063,165
Beginning balance at Dec. 31, 2020 $ 60,064 16,024,416 (16,444,213) $ (359,733)
Issuance of common shares (in shares) 227,500     227,500
Issuance of common shares $ 228 55,272   $ 55,500
Common stock for prepaid expenses (in shares) 100,000     100,000
Common stock for prepaid expenses $ 100 74,900   $ 75,000
Common stock for interest (in shares) 81,031     81,031
Common stock for interest $ 81 26,067   $ 26,148
Beneficial conversion feature   25,333   25,333
Net loss (304,729) (304,729)
Ending balance (in shares) at Mar. 31, 2021 60,471,696      
Ending balance at Mar. 31, 2021 $ 60,473 $ 16,205,988 $ (16,748,942) $ (482,481)
XML 17 R7.htm IDEA: XBRL DOCUMENT v3.21.1
1. Organization of the Company and Significant Accounting Policies
6 Months Ended
Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization of the Company and Significant Accounting Policies

American CryoStem Corporation (the “Company”) is a publicly held corporation formed on March 13, 2009 in the state of Nevada as R&A Productions Inc. (R&A).

In April 2011, R&A purchased substantially all the assets and liabilities of American CryoStem Corporation (ACS) a company formed in 1987, for 21 million shares of common stock. ACS was deemed to be the accounting acquirer. At the date of the purchase, the former operations of R&A were discontinued and the name of the Company was changed to American CryoStem Corporation.

The Company is in the business of collecting adipose tissue, processing it to separate the adult stem cells, and preparing such stem cells for long-term storage. The process allows individuals to preserve their stem cells for future personal use in cellular therapy. The adipose derived stem cells are prepared and stored in their raw form without manipulation, bio-generation or the addition of biomarkers or other materials, making them suitable for use in cellular treatments and therapies offered by existing and planned treatment centers worldwide. Individualized collection and storage of adult stem cells provides personalized medicine solutions by making the patient’s own preserved stem cells available for future cellular therapies.

The Company’s first US Clinical Study (FDA file No. 19089) for its flagship cellular therapy product ATCell was initiated in September of 2020. The clinical study for Post Concussion Syndrome will establish safety and collect efficacy data for the use of ATCell delivered by infusion therapy. The Company is planning additional studies with collaborators which the Company expects to file upon completion of the protocol and submission and approval by the US Food and Drug Administration.

The Company has devoted a significant amount of its time and resources to develop its technologies and intellectual property. These efforts have resulted in the development of cell lines, cell culture medium and other laboratory products which the Company believes are suitable for licensing and distribution by third parties. Additionally the Company has initiated a licensing program to license its technologies to laboratories currently processing other types of biologic materials including cord blood and general blood banks. The Company closed its first licensing agreement in 2014 and intends to pursue additional licensing partners in the future.

The accompanying consolidated financial statements include the accounts of American CryoStem Corporation and its wholly owned subsidiaries.  The Company’s subsidiaries are APAC CryoStem Limited, a Hong Kong company and APAC CryoStem (Shenzhen) Ltd. which were established to support its licensing agreement and operations, and collect the licensing fees in Hong Kong and China. Currently Mr. Arnone and Mr. Dudzinski serve as management and directors of both companies. All significant intercompany accounts and transactions have been eliminated in the consolidation. Management believes all amounts have been adjusted properly.

Accounting policies refer to specific accounting principles and the methods of applying those principles to present fairly the company’s financial position and results of operations in accordance with generally accepted accounting principles. The policies discussed below include those that management has determined to be the most appropriate in preparing the company’s financial statements.

The Consolidated Financial Statement Disclosures for the quarter ended March 31, 2021 are condensed and all necessary adjustments have been made. These Financial Statements should be read in conjunction with the Company’s Form 10K for the year ended September 30, 2020.

Use of Estimates - The preparation of the financial statements in conformity with United States generally accepted accounting principles (“GAAP”) uniformly applied requires management to make reasonable estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses at the date of the financial statements and for the period they include. Actual results may differ from these estimates.

Cash - For the purpose of calculating changes in cash flows, cash includes all cash balances and highly liquid short-term investments with an original maturity of three months or less. Occasionally, the Company maintains cash balances at financial institutions that exceed federally insured limits.

Accounting for Investments - The Company accounts for investments based upon the type and nature of the investment and the availability of current information to determine its value. Investments in marketable securities in which there is a trading market will be valued at market value on the nearest trading date relative to the Company’s financial reporting requirements. Investments which there is no trading market from which to obtain recent pricing and trading data for valuation purposes will be valued based upon management’s review of available financial information, disclosures related to the investment and recent valuations related to the investment’s fundraising efforts.

 

Revenue Recognition - Effective October 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective transition method. We recognized the cumulative effect of applying the new revenue standard to all contracts with customers that were not completed as of October 1, 2018. The comparative information has not been restated and continues to be reported under the accounting standards in effect for the periods presented, since there is no material effect on the presentation of the financial positions or statements of operations. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, certain collaboration arrangements and financial instruments. ASC 606 also impacts certain other areas, such as the accounting for costs to obtain or fulfill a contract. The standard also requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The adoption of ASC 606 did not have an impact on the amount of reported revenues. See Note 3 “Revenue Recognition” for additional information.

 

Advertising – Advertising Cost are reported as they are incurred. Advertising Costs were $370 and $222 for the six months ended and the three months ended March 31, 2021; and $0 for the six months ended March 31, 2020 and $0 for the three months ended March 31, 2020, which is included in Sales and Marketing Expenses within the Consolidated Statements of Operations.

 

Bad Debt Expense - The Company provides, through charges to income or loss, a charge for bad debt expense, which is based upon management’s evaluation of numerous factors. These factors include economic conditions prevailing, a predictive analysis of the outcome of the current portfolio by client, and prior credit loss experience of each client. The Company uses the information from this analysis to develop an estimate of bad debt reserve based upon the amount of accounts receivable by client at the balance sheet date. The Allowance for Doubtful Accounts was $337,515 at March 31, 2021 and $337,515 at September 30, 2020. See Note 12 for further explanation.

 

Inventory - Inventory is valued at lower of cost or market using the first in, first out method. Inventory consists of the disposables and materials used to create production kits, for processing of adipose tissue and cellular samples, the manufacture of Medias used to prepare the samples and cryoprotectant for the storage of the samples.

 

Inventory was composed of Raw Materials and Finished Goods, which was valued at $21,540 at March 31, 2021 and $20,401 at September 30, 2020.

 

Long Lived Assets - The Company reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount.

 

Fixed Assets – Fixed assets are stated at cost. Depreciation expense is computed using the straight-line method over the estimated useful life of the assets, which is estimated as follows:

 

Office Equipment 5 years
Lab Equipment & Furniture 7 years
Lab Software 5 years
Leasehold Improvements 15 years

 

Income taxes - The Company accounts for income taxes in accordance with generally accepted accounting principles which require an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between financial statement and income tax bases of assets and liabilities that will result in taxable income or deductible expenses in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period adjusted for the change during the period in deferred tax assets and liabilities.

 

The Company follows the accounting requirements associated with uncertainty in income taxes using the provisions of Financial Accounting Standards Board (FASB) ASC 740, Income Taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the positions will be sustained upon examination by the tax authorities. It also provides guidance for derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of March 31, 2021 and September 30, 2020, the Company has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. All tax returns from fiscal years 2014 to 2019 are subject to IRS and State of New Jersey audit.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments-Credit Losses.  The new guidance provides better representation about expected credit losses on financial instruments. This Update requires the use of a methodology that reflects expected losses and requires consideration of a broader range of reasonable and supportive information to inform credit loss estimates.  This ASU is effective for reporting periods beginning after December 15, 2022, with early adoption permitted.  The company is studying the impact of adopting the ASU in fiscal year 2024, and what effect it could have. The Company believes the accounting change would not have a material effect on the financial statements.

In November 2018, the FASB issued ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606. This new ASU applies to companies that have collaborative arrangements, or agreements that involve two parties that actively participate in a joint operating activity. We believe our contract with Baoxin falls under the collaborative arrangements guidance in (ASC 808). ASU 2018-18 is effective for public companies for years beginning after December 15, 2019. The Company has implemented ASU 2018-18 in Fiscal 2021.

Implementation of ASU 2018-18 has not affected prior or current revenue recognition, since according to the contract we bill License Fees for the use of our intellectual property and for any products shipped.

XML 18 R8.htm IDEA: XBRL DOCUMENT v3.21.1
2. Going Concern
6 Months Ended
Mar. 31, 2021
Going Concern  
Going Concern

The accompanying consolidated financial statements have been presented in accordance with generally accepted accounting principles in the U.S., which assume the continuity of the Company as a going concern. However, the Company has incurred significant losses since its inception which raises substantial doubt about the Company’s ability to continue as a going concern. Management has made this assessment for the period one year from date of the issuance of this report. Management’s plans with regard to this matter are to continue to fund its operations through fundraising activities in fiscal 2021 for future operations and business expansion

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3. Revenue Recognition
6 Months Ended
Mar. 31, 2021
Revenue Recognition [Abstract]  
Revenue Recognition

Under ASC 606, we recognize revenue when our customer obtains control of promised goods or services in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform the following five steps:

  a. Identify the contract(s) with a customer;

 

  b. Identify the performance obligations in the contract;

 

  c. Determine the transaction price;

 

  d. Allocate the transaction price to the performance obligations in the contract; and

 

  e. Recognize revenue when (or as) the performance obligations are satisfied.

 

We only apply the five step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception, if the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract, determine those that are performance obligations, and assess whether each promised good or services is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

 

Our major sources of revenue during the reporting periods were 1. Tissue Collection, Processing and Storage revenue from various customers; 2. Annual Storage Fees for our ATGRAFT and ATCELL products, from customers who have stored in our laboratory facility, along with former Bio-Life and Cytori storage customers purchased by American CryoStem; 3. Licensing and other fees from Baoxin, Cell Source, CryoViva, Pepro-Tech and Personal Cell Sciences; and 4. Products sales revenues from Baoxin and CryoViva. The adoption of ASC 606 did not have an impact on the pattern or timing of recognition of our Tissue Processing, Storage Fees or Product Sales Revenue, since:

  1. Tissue Collection, Processing & Storage Revenue is recognized on the date the process is completed and stored in our facility.

 

  2. Storage Fees are charged annually.

 

  3. Licensing and other Fees - This is based on the passage of time and as the customer has access to the license. The Company reviewed and analyzed the contract with Baoxin. Management’s judgments are:

 

  a. Baoxin qualifies as a customer since American CryoStem does not take significant risks or receive significant gains from the agreement.

 

  b. The right to use the license does not have significant standalone functionality because consulting is required by American CryoStem in order for the customer to be able to use the license.

 

  c. The Company has determined as of the date of this report not to make an allowance upon recognition of the Baoxin revenue based upon review of Baoxin’s most recent audited financial statements, documentation provided by Baoxin concerning the completion of their new 100,000 sq ft facility during the pandemic and the ongoing uncertainties regarding the continuing effects of the COVID 19 pandemic in China.

 

  4. The majority of our Product Sales Revenue continues to be recognized when the customer takes control of the product.

We believe our contract with Baoxin falls under the collaborative arrangements guidance in (ASC 808) from the FASB issued ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606. Implementation of ASU 2018-18 has not affected prior or current revenue recognition, since according to the contract, we bill License Fees for the use of our intellectual property and for any products shipped.

Revenue and Allowances

The following table provides information about Fees and Product Sales Revenue for the Six Months and Three Months ended March 31, 2021 and 2020.

Licensing & Other Fees   6 months
3-31-2021
    6 months
3-31-2020
    3 months
3-31-2021
    3 months
3-31-2020
 
Baoxin   $ 250,0 00     $ 250,000     $ 125,000     $ 125,000  
Cell Source           16,667             10,000  
Totals   $ 250,000     $ 266,667     $ 125,000     $ 135,000  
                                 
Product Sales                                
Baoxin   $     $ 5,840     $     $ 4,380  
CryoViva           10,060             10,060  
Science Diagnostics     760             760        
Totals   $ 760     $ 15,900     $ 760     $ 14,440  

  

Performance Obligations

At contract inception, we assess the goods and services promised in our contracts and identify the performance obligations for each promise to transfer to the customer goods or to provide the customer with a service that is distinct. To identify the performance obligations, we consider all of the goods and services promised in the contract regardless of whether they are specifically stated or are implied by customary business practices. We determined that the following distinct goods or services represent separate performance obligations:

 

  · ATGRAFT and ATCELL Customer Tissue Processing Fees

 

  · ATGRAFT and ATCELL Customer Storage Fees

 

  · Licensing and other Fees

 

  · Supply of our Tissue Collection, Processing and Storage Products to Baoxin and CryoViva

We principally sell our products to end users, who have agreements with us to utilize our processing and storage technology. We provide processing and storage services to individual customers. We charge various fees for consulting services or licensing of our technologies; which includes processing and storage agreements, arrangements with biotechnology processing facilities for the provision of our services within a limited geographic area.

For the customers that purchase our Tissue Collection, Processing and Storage Products we transfer control at the point in time when the goods are shipped from our facility, shipping costs are paid by the customer and these costs are not accrued when the related revenue is recognized.

Variable Consideration

Under ASC 606, we are required to make estimates of the net sales price, including estimates of variable consideration (such as rebates and discounts) and recognize the estimated amount as revenue when we transfer control of the product or provide the service to our customers. Variable Consideration must be determined using either an “expected value” or a “most likely amount” method. At the current time the Company does not offer rebates or discounts on our provision of ATGRAFT and ATCELL customer processing and storage fees; Licensing and other Fees; and offer Tissue Collection, Processing and Storage products; therefore we have not made any provisions for variable consideration related to discounts or rebates.

Product Returns

We only offer product returns in the event a delivered product is found to be defective for which we offer replacement only. The Company has not had any product returned based upon a defective product claim; however return experience may change over time.

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4. Loss per Share
6 Months Ended
Mar. 31, 2021
Earnings Per Share [Abstract]  
Loss per Share

The Company applies ASC 260, “Earnings per Share” to calculate loss per share. In accordance with ASC 260, basic and fully diluted net loss per share has been computed based on the weighted average of common shares outstanding during the years. The dilutive effects of the convertible notes and the options outstanding are not included in the calculation of loss per share since their inclusion would be anti-dilutive.

The Company had 7,986,500 and 8,761,500 shares of Common Stock issuable upon exercise of all outstanding stock options for the six months ended March 31, 2021 and 2020, respectively; and 2,268,117 and 2,134,784 shares issuable on the conversion of outstanding Convertible Notes for the three months ended March 31, 2021 and 2020, respectively.

Net Loss per share for the following periods is computed below:

    6 months     3 months  
    31-Mar-21     31-Mar-20     31-Mar-21     31-Mar-20  
Net Loss   $ (350,763 )   $ (419,087 )   $ (304,729 )   $ (147,227 )
Basic & Fully Diluted Net Income (Loss) per Common Share:   $ (0.006 )   $ (0.008 )   $ (0.005 )   $ (0.003 )
Weighted Average of Common Shares Outstanding -  Basic & fully diluted     59,963,564       49,883,110       60,248,623       50,262,918  
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5. Fixed Assets
6 Months Ended
Mar. 31, 2021
Property, Plant and Equipment [Abstract]  
Fixed Assets

The fixed assets accounts of the Company are comprised as follows:

    March 31,
2021
    September 30,
2020
 
Laboratory Equipment   $ 257,905     $ 257,905  
Laboratory Leasehold Improvements     110,286       110,286  
Laboratory Furniture     1,841       1,841  
Office Equipment     27,869       27,869  
Office Leasehold Improvements     2,650       2,650  
Office Furniture     1,812       1,812  
Accumulated Depreciation     (282,327 )     (275,772 )
Net Property and Equipment   $ 120,036     $ 126,591  

 

Depreciation expense for the six months ended March 31, 2021 and 2020 were $6,555 and $4,666, respectively and for the three months ended March 31, 2021 and 2020 were $3,277 and $3,207, respectively.

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6. Patents & Patents Filings
6 Months Ended
Mar. 31, 2021
Finite-Lived Intangible Assets, Net [Abstract]  
Patents & Patents Filings

The patent and patents development are recorded at cost and are being amortized on a straight line basis over a period of seventeen years. The company capitalizes Legal and Administrative Fees incurred in the process of filing for its patents. The Company has only been amortizing the patents issued. Amortization Expense for the six and three months ended March 31, 2021 were $29,527 and $28,104, respectively and for the six and three months ended March 31, 2020 were $2,832 and $1,408, respectively

Patents still in the application process and trademarks have not been amortized. The unamortized costs of patents in the application process along with costs of trademarks are $174,794 as of March 31, 2021 and $297,731 as of September 30, 2020. Amortizable Patent Costs were $238,172 at March 31, 2021 and $96,000 at September 30, 2020. The following is the amortization expense for these patents for the next 5 years:

For the twelve months ending March 31,      
2022   $ 14,010  
2023   $ 14,010  
2024   $ 14,010  
2025   $ 14,010  
2026   $ 14,010  

The following is a description of the Company’s patent assets:

On August 2, 2011, the Company was awarded U.S. Patent No. US 7,989,205 B2, titled Cell Culture Media, Kits, and Methods of Use. The Patent is for cell culture media kits for the support of primary culture of normal non-hematopoietic cells of mesodermal origin suitable for both research and clinical applications. The Company filed and maintains a continuation (U.S. Serial No. 13/194,900) and additional claims were granted on November 8, 2016 under patent Number 9,487,755. The Company filed an additional continuation on November 7, 2016 as part of our overall patent strategy and to cover expanded modifications of the original patent grant, US Patent Application No. 15/344,805.

On July 3, 2018, the Company was awarded U. S. Patent No. US 10,014,079 B2 titled “Business Method for Collection, Cryogenic Storage and Distribution of a Biologic Sample Material originally filed as US Serial No 13/702,304 filed June 6, 2011 with a priority date of June 6, 2010. The patent covers the Company’s comprehensive business method for collecting, processing, cryogenic storage and distribution of a biologic sample material. The Company has filed a continuation of the patent to cover addition claims and will file additional Continuation in Part claims for improvements that it has developed since the original patent filing.

On December 18, 2018, the Company was awarded US Patent No. US 10,154,664 B2 titled “Systems and Methods for the Digestion of Adipose Tissue Samples Obtained from a Client for Cryopreservation” U.S. Serial No. 13/646,647 filed October 5, 2012 with a priority date of October 6, 2011.

The Company has filed the following additional patents to extend its intellectual property to encompass additional aspects of the Company’s platform processing technologies. To date the following additional patent filings have been made:

A business method for Collection, Cryogenic Storage and Distribution of a Biologic Sample Material US Serial No 13/702,304 filed June 6, 2011 with a priority date of June 6, 2010.

 

Additionally, this patent has been filed European Union Application No. EPI3800847.9 and China Application No. 2013800391988.

Human Serum for Cell Culture Medium for Clinical Growth of Human Adipose Stromal Cells, International PCT filing PCT/US/68350 filed December 31, 2015 with a priority date of December 31, 2014. During 2017 the Company extended the filing into China, the EU, India, Japan, the Kingdom of Saudi Arabia, Canada and Mexico.

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7. Debt
6 Months Ended
Mar. 31, 2021
Debt Disclosure [Abstract]  
Debt

The following table describes the Company’s debt outstanding as of March 31, 2021:

 

Debt   Carrying
Value
    Maturity     Rate  
Bridge Notes   $ 226,500       Demand       8.00 %
Convertible Notes @ 75 cents   $ 150,000       Fiscal 2022       5.00 %
Convertible Notes @ 40 cents   $ 100,000       Demand       8.00 %
Convertible Notes @ 35 cents   $ 83,500       Demand       8.00 %
Convertible Notes @ 33 cents   $ 150,000       Demand       5.00 %
Convertible Notes @ 30 cents   $ 45,000       Demand       8.00 %
Convertible Notes @ 20 cents   $ 155,000       Demand       8.00 %
Convertible Notes @ 15 cents   $ 40,000       Demand       8.00 %
Finance Lease Liability   $ 7,039       Fiscal 2021       14.00 %
Operating Lease Liability   $ 2,631       Fiscal 2021       8.00 %

 

The convertible notes are exercisable at any time and have exercise prices ranging from $0.15 to $0.75 with the amount of shares exercisable based on the face value of the convertible note. The holders of the bridge notes also have an option to purchase shares of the Company at $0.05 per share with the number of shares dependent upon the face value of the bridge note. As of the date of this report, 36,500 of these options remain outstanding.

On April 6, 2018, the Company issued a debenture and received proceeds of $100,000. The debenture matured March 2020 and has an exercise price of $.40 with interest at 8%. The entire Carrying Value of $100,000 was due March 2020.

In April 2019, the Company issued debentures and received proceeds of $150,000. The debentures mature in 2021 and have an exercise price of $.33 with interest at 5%. The entire Carrying Value of $150,000 is due in Fiscal 2021.

As a result of the issue, the Company recognized interest expense of $61,364 as a beneficial conversion feature of the debenture which has been amortized over the life of the note. The Interest Expense due to the Beneficial Conversion Feature for the Six and Three Months ended March 31, 2021 was $14,948 and $6,757, respectively; and $16,382 and $8,191 for the Six and Three Months ended March 31, 2020, respectively.

In March 2021, the Company issued debentures and received proceeds of $150,000. The debentures mature in December 2022 and have an exercise price of $.75 with interest at 5%. The entire Carrying Value of $150,000 is due in Fiscal 2022.

As a result of the issue, the Company recognized interest expense of $25,333 as a beneficial conversion feature of the debentures, which has been amortized over the lives of the notes. The Interest Expense due to the Beneficial Conversion Feature for the Six and Three Months ended March 31, 2021 was $1,138 and $1,138, respectively.

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8. Common Stock Issuances
6 Months Ended
Mar. 31, 2021
Equity [Abstract]  
Common Stock Issuances

During the six months ended March 31, 2021, the Company issued 640,000 shares and received proceeds of $143,000. The share price was determined by agreement with the purchasers, based upon the current market price less a discount for purchasing restricted securities.

During the six months ended March 31, 2021, the Company issued 80,000 shares and for services valued at $20,000. The share price was determined by agreement with the service provider, based upon the current market price less a discount for purchasing restricted securities.

During the six months ended March 31, 2021, the Company issued 100,000 shares for services to be provided valued at $75,000. The share price was determined by agreement with the service provider, based upon the current market price less a discount for purchasing restricted securities.

During the six months ended March 31, 2021, the Company issued 81,031 shares to pay interest due holders of bridge notes and convertible notes. The amount of interest paid was $26,147. The share prices were determined by the aggregate market price for the week in which the interest became due.

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9. Option Issuances
6 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]  
Option Issuances

The Company applies ASC 718, “Accounting for Stock-Based Compensation” to account for its option issues. Accordingly, all options granted are recorded at fair value using a generally accepted option pricing model at the date of the grant. The Company uses the Black-Sholes option pricing model to measure the fair values of its option grants. For purposes of determining the option values at issuance, the fair value of each option granted is measured at the date of the grant by the option pricing model using the parameters of the volatility of the Company’s share prices and the risk free interest rate.

The Company normally issues options to its key personnel and consultants at the end of each fiscal year or as may be included in retainer or employment agreements. The Company prepares an option agreement for each option grant that includes the date of the grant, the vesting schedule, the expiration date and other terms of the granted options.  The Company’s option plan calls for the immediate expiration and cancellation of the granted options in the event of the termination of employment or the contract associated with the original option grant except for certain circumstances including retirement or disability.  The Company’s method for exercising options is to require delivery of the executed option agreement with the payment of the option price to the Company by the option holder. Upon receipt and confirmation of payment of the exercise price by Company management, the Company prepares board minutes and issues instructions to the Company’s transfer agent to issue the requisite number of shares underlying the option exercise The company did not issue any options and there was no stock based compensation for the six months ended March 31, 2021 and 2020.

    Amount     Exercise
Price Range
    Weighted
Average
Exercise
Price
    Weighted
Average
Remaining
Term (Years)
 
Outstanding at September 30, 2019     8,761,500       $0.05 - $0.40     $ 0.26       1.85  
                                 
Granted                              
Exercised                              
Expired                              
Forfeited                              
Outstanding at March 31, 2020     8,761,500       $0.05 - $0.40     $ 0.26       1.80  
                                 
Outstanding at September 30, 2020     7,936,500       $0.05 - $0.40       0.26       2.32  
                                 
Granted                              
Exercised                              
Expired           $ 0.40                  
Forfeited                              
Outstanding at March 31, 2021     7,936,500       $0.05 - $0.40     $ 0.26       1.85  
Vested at March 31, 2021     6,686,500       $0.05 - $0.40       0.26       1.53  

 

Option forfeitures are recorded as they occur. The intrinsic value of the outstanding stock options is $4,031,225 and the intrinsic value of the vested stock options is $3,703,725 at March 31, 2021.

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10. Fair Values of Financial Instruments
6 Months Ended
Mar. 31, 2021
Fair Value Disclosures [Abstract]  
Fair Values of Financial Instruments

Fair Value Measurements under generally accepted accounting principles clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

The Company valued Accounts Receivable, Bridge Notes and Convertible Notes at cost. Financial instruments’ carrying value approximates fair value. Stock Options and Derivative Liability are valued using level 3 of the fair value hierarchy.

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11. Leases
6 Months Ended
Mar. 31, 2021
Leases [Abstract]  
Leases

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, one of the Company’s leases does not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate which is based on the interest rate of similar debt outstanding. Effective October 1, 2019, the Company adopted the provision of ASC 842 Leases.

Finance Lease

 

The Company leases Equipment at its laboratory from NFS Leasing, Inc. The final lease payment is scheduled for May 1, 2021. When the final payment is made, the Company will own the equipment. The table below presents the lease related asset and liability recorded on the Company’s consolidated balance sheets as of March 31, 2021:

 

    Classification on Balance Sheet   March 31,
2021
 
Assets            
Finance Lease Asset   Finance lease right of use asset   $ 76,626  
Total Finance lease assets       $ 76,626  
Liabilities            
Current Liabilities            
Finance lease liability   Current finance lease liability   $ 6.917  
Noncurrent liabilities            
Finance lease liability   Long-Term finance lease liability      
Total operating lease liability       $ 6.917  

 

Finance Lease obligations at March 31, 2021:      
         
Total Payments   $ 7,039  
Amount representing interest     (122 )
Finance lease obligation, net   $ 6,917  
Finance lease obligation, current portion     6,917  
Finance lease obligation, long-term portion   $  

 

The lease expense for the six months and three months ended March 31, 2021 was $10,503 and $5,078, respectively which consisted of amortization expenses of $9,191 and $4,596, respectively along with interest expenses of $1,312 and $482, respectively. At March 31, 2021, the remaining lease term was 0.17 years (2 months) and the discount rate was 14.17%.

 

Operating Lease

 

The Company leases its office facility, in Eatontown, New Jersey, from Eaton Holdings LLC. The lease expires on April 30, 2021 and the Company can exercise a renewal option for an additional three years. The table below presents the lease related asset and liability recorded on the Company’s consolidated balance sheets as of March 31, 2021:

    Classification on Balance Sheet   March 31,
2021
 
Assets            
Operating Lease Asset   Operating lease right of use asset   $ 2,631  
Total Operating lease assets       $ 2,631  
Liabilities            
Current Liabilities            
Operating lease liability   Current operating lease liability   $ 2,631  
Noncurrent liabilities            
Operating lease liability   Long-Term operating lease liability      
Total operating lease liability       $ 2,631  

 

Lease obligations at March 31, 2021:

Total Payments   $ 2,650  
Amount representing interest     (19 )
Operating lease obligation, net   $ 2,631  
Operating lease obligation, current portion     (2,631 )
Operating lease obligation, long-term portion   $  

The lease expense for the six months and three months ended March 31, 2021 was $15,900 and $7,950, respectively which consisted of amortization expense of $15,433 and $7,793, respectively and interest expense of $467 and $157, respectively. The cash paid under the operating lease during the six months ended March 31, 2021 was $15,900. At March 31, 2021, the remaining lease term was 0.083.years (1 month) and the discount rate was 8%.

The Company leases its laboratory facility, in Monmouth Junction, New Jersey, from Princeton Corporate Plaza LLC. The lease expired on March 31, 2020 and the Company can exercise a renewal option for an additional 6 months. The Company is currently in negotiations with the landlord regarding renewing the lease. While the Company is negotiating the lease, it continues to pay rent on a month to month basis. Since the lease obligation is less than twelve months, the Company does not report a lease related asset or liability for this lease. Rent paid for the laboratory facility for the six months and three months ended March 31, 2021 was $14,334 and $7,167, respectively.

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12. Concentrations of Credit
6 Months Ended
Mar. 31, 2021
Risks and Uncertainties [Abstract]  
Concentrations of Credit

The Company received 97% of its revenues for the six ended March 31, 2021 from one client, Baoxin. The Company received 96% of its revenues for the six months ended March 31, 2020 from three clients, Baoxin, Cell Source and CryoViva. The Company also had accounts receivable from Baoxin of $1,075,000 at March 31, 2021 and $578,295 at March 31, 2020. For the Baoxin receivable, the Company has recorded an allowance for doubtful accounts of $325,000.

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13. Investments
6 Months Ended
Mar. 31, 2021
Investments [Abstract]  
Investments

During the first quarter of 2018, the Company invested $300,000 in Baoxin Ltd., a Chinese company that is involved in tissue storage and processing in Baoxin, China.  Baoxin is not a publically traded corporation and the investment is carried at cost at March 31, 2021 and September 30, 2020. The Company annually reviews its investments for impairment. After reviewing recent investment transactions of Baoxin, the Company has determined that no impairment of its investment is necessary for the six months ended March 31, 2021.

Baoxin will develop, own and operate multiple laboratory/treatment/training facilities in China using American CryoStem’s intellectual property. American CryoStem has received an upfront fee of $300,000 USD and a 5 year minimum annual guarantee of $500,000 USD per year from Baoxin. Additionally, as part of the transaction American CryoStem has invested $300,000 into Baoxin to obtain a 5% minority equity in Baoxin (China) and an option to acquire up to a 20% equity ownership interest in its Regenerative Medicine Center in Hong Kong (HK). The short term goals are to set up two additional GMP grade adipose tissue processing and storage facilities in Beijing and Shanghai to cover the need of the whole China region, and a proper education facility in China to promote the use of ATGRAFT as a more natural dermal filler over artificial fillers.

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14. Related Party Transactions
6 Months Ended
Mar. 31, 2021
Related Party Transactions [Abstract]  
Related Party Transactions

On October 1, 2020 the Company executed a note with ACS Global for a principal amount of $99,125 representing the outstanding balance due to ACS Global. Inc. The Note matures on October 1, 2023 and carries an interest rate of 10% per annum which may be paid in cash or stock. The note is due and payable in full upon maturity. On March 1, 2021 the note was increased by $49,000 for advances to the Company. The note may be prepaid at any time by the Company. The principal balance of the note at March 31, 2021 is $147,775.

The Company was indebted to a company that is majority owned by the Company’s two officers in the amount of $99,125 at September 30, 2020. The advances were unsecured, and carried no interest rate and were collectible at the discretion of the company’s two officers/directors.

As of March 31, 2021, a Company majority owned by the CEO and Chairman of American CryoStem was indebted to American CryoStem Corporation in the amount of $4,961 for advances paid for expenses incurred.

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15. Subsequent Events
6 Months Ended
Mar. 31, 2021
Subsequent Events [Abstract]  
Subsequent Events

The Company has made a review of material subsequent events from March 31, 2021 through the date of issuance of this report and reports there are no subsequent events.

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1. Organization of the Company and Significant Accounting Policies (Policies)
6 Months Ended
Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Use of Estimates

The preparation of the financial statements in conformity with United States generally accepted accounting principles (“GAAP”) uniformly applied requires management to make reasonable estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses at the date of the financial statements and for the period they include. Actual results may differ from these estimates.

Cash

For the purpose of calculating changes in cash flows, cash includes all cash balances and highly liquid short-term investments with an original maturity of three months or less. Occasionally, the Company maintains cash balances at financial institutions that exceed federally insured limits.

Accounting for Investments

The Company accounts for investments based upon the type and nature of the investment and the availability of current information to determine its value. Investments in marketable securities in which there is a trading market will be valued at market value on the nearest trading date relative to the Company’s financial reporting requirements. Investments which there is no trading market from which to obtain recent pricing and trading data for valuation purposes will be valued based upon management’s review of available financial information, disclosures related to the investment and recent valuations related to the investment’s fundraising efforts.

Revenue Recognition

Effective October 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective transition method. We recognized the cumulative effect of applying the new revenue standard to all contracts with customers that were not completed as of October 1, 2018. The comparative information has not been restated and continues to be reported under the accounting standards in effect for the periods presented, since there is no material effect on the presentation of the financial positions or statements of operations. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, certain collaboration arrangements and financial instruments. ASC 606 also impacts certain other areas, such as the accounting for costs to obtain or fulfill a contract. The standard also requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The adoption of ASC 606 did not have an impact on the amount of reported revenues. See Note 3 “Revenue Recognition” for additional information.

Advertising

Advertising Cost are reported as they are incurred. Advertising Costs were $370 and $222 for the six months ended and the three months ended March 31, 2021; and $0 for the six months ended March 31, 2020 and $0 for the three months ended March 31, 2020, which is included in Sales and Marketing Expenses within the Consolidated Statements of Operations.

Bad Debt Expense

The Company provides, through charges to income or loss, a charge for bad debt expense, which is based upon management’s evaluation of numerous factors. These factors include economic conditions prevailing, a predictive analysis of the outcome of the current portfolio by client, and prior credit loss experience of each client. The Company uses the information from this analysis to develop an estimate of bad debt reserve based upon the amount of accounts receivable by client at the balance sheet date. The Allowance for Doubtful Accounts was $337,515 at March 31, 2021 and $337,515 at September 30, 2020. See Note 12 for further explanation.

Inventory

Inventory is valued at lower of cost or market using the first in, first out method. Inventory consists of the disposables and materials used to create production kits, for processing of adipose tissue and cellular samples, the manufacture of Medias used to prepare the samples and cryoprotectant for the storage of the samples.

 

Inventory was composed of Raw Materials and Finished Goods, which was valued at $21,540 at March 31, 2021 and $20,401 at September 30, 2020.

Long Lived Assets

The Company reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount.

Fixed Assets

Fixed assets are stated at cost. Depreciation expense is computed using the straight-line method over the estimated useful life of the assets, which is estimated as follows:

 

Office Equipment 5 years
Lab Equipment & Furniture 7 years
Lab Software 5 years
Leasehold Improvements 15 years

 

Income Taxes

The Company accounts for income taxes in accordance with generally accepted accounting principles which require an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between financial statement and income tax bases of assets and liabilities that will result in taxable income or deductible expenses in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period adjusted for the change during the period in deferred tax assets and liabilities.

 

The Company follows the accounting requirements associated with uncertainty in income taxes using the provisions of Financial Accounting Standards Board (FASB) ASC 740, Income Taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the positions will be sustained upon examination by the tax authorities. It also provides guidance for derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of March 31, 2021 and September 30, 2020, the Company has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. All tax returns from fiscal years 2014 to 2019 are subject to IRS and State of New Jersey audit.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments-Credit Losses.  The new guidance provides better representation about expected credit losses on financial instruments. This Update requires the use of a methodology that reflects expected losses and requires consideration of a broader range of reasonable and supportive information to inform credit loss estimates.  This ASU is effective for reporting periods beginning after December 15, 2022, with early adoption permitted.  The company is studying the impact of adopting the ASU in fiscal year 2024, and what effect it could have. The Company believes the accounting change would not have a material effect on the financial statements.

In November 2018, the FASB issued ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606. This new ASU applies to companies that have collaborative arrangements, or agreements that involve two parties that actively participate in a joint operating activity. We believe our contract with Baoxin falls under the collaborative arrangements guidance in (ASC 808). ASU 2018-18 is effective for public companies for years beginning after December 15, 2019. The Company has implemented ASU 2018-18 in Fiscal 2021.

Implementation of ASU 2018-18 has not affected prior or current revenue recognition, since according to the contract we bill License Fees for the use of our intellectual property and for any products shipped.

XML 33 R23.htm IDEA: XBRL DOCUMENT v3.21.1
1. Organization of the Company and Significant Accounting Policies (Tables)
6 Months Ended
Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of estimated useful life of assets
Office Equipment 5 years
Lab Equipment & Furniture 7 years
Lab Software 5 years
Leasehold Improvements 15 years
XML 34 R24.htm IDEA: XBRL DOCUMENT v3.21.1
3. Revenue Recognition (Tables)
6 Months Ended
Mar. 31, 2021
Revenue Recognition [Abstract]  
Schedule of revenue and allowances
Licensing & Other Fees   6 months
3-31-2021
    6 months
3-31-2020
    3 months
3-31-2021
    3 months
3-31-2020
 
Baoxin   $ 250,0 00     $ 250,000     $ 125,000     $ 125,000  
Cell Source           16,667             10,000  
Totals   $ 250,000     $ 266,667     $ 125,000     $ 135,000  
                                 
Product Sales                                
Baoxin   $     $ 5,840     $     $ 4,380  
CryoViva           10,060             10,060  
Science Diagnostics     760             760        
Totals   $ 760     $ 15,900     $ 760     $ 14,440  
XML 35 R25.htm IDEA: XBRL DOCUMENT v3.21.1
4. Loss per share (Tables)
6 Months Ended
Mar. 31, 2021
Earnings Per Share [Abstract]  
Schedule of computation of net loss per share
    6 months     3 months  
    31-Mar-21     31-Mar-20     31-Mar-21     31-Mar-20  
Net Loss   $ (350,763 )   $ (419,087 )   $ (304,729 )   $ (147,227 )
Basic & Fully Diluted Net Income (Loss) per Common Share:   $ (0.006 )   $ (0.008 )   $ (0.005 )   $ (0.003 )
Weighted Average of Common Shares Outstanding -  Basic & fully diluted     59,963,564       49,883,110       60,248,623       50,262,918  
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.21.1
5. Fixed Assets (Tables)
6 Months Ended
Mar. 31, 2021
Property, Plant and Equipment [Abstract]  
Schedule of fixed assets
    March 31,
2021
    September 30,
2020
 
Laboratory Equipment   $ 257,905     $ 257,905  
Laboratory Leasehold Improvements     110,286       110,286  
Laboratory Furniture     1,841       1,841  
Office Equipment     27,869       27,869  
Office Leasehold Improvements     2,650       2,650  
Office Furniture     1,812       1,812  
Accumulated Depreciation     (282,327 )     (275,772 )
Net Property and Equipment   $ 120,036     $ 126,591  
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.21.1
6. Patent & Patents Filings (Tables)
6 Months Ended
Mar. 31, 2021
Finite-Lived Intangible Assets, Net [Abstract]  
Schedule of patent amortization
For the twelve months ending March 31,      
2022   $ 14,010  
2023   $ 14,010  
2024   $ 14,010  
2025   $ 14,010  
2026   $ 14,010  
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.21.1
7. Debt (Tables)
6 Months Ended
Mar. 31, 2021
Debt Disclosure [Abstract]  
Schedule of debt outstanding
Debt   Carrying
Value
    Maturity     Rate  
Bridge Notes   $ 226,500       Demand       8.00 %
Convertible Notes @ 75 cents   $ 150,000       Fiscal 2022       5.00 %
Convertible Notes @ 40 cents   $ 100,000       Demand       8.00 %
Convertible Notes @ 35 cents   $ 83,500       Demand       8.00 %
Convertible Notes @ 33 cents   $ 150,000       Demand       5.00 %
Convertible Notes @ 30 cents   $ 45,000       Demand       8.00 %
Convertible Notes @ 20 cents   $ 155,000       Demand       8.00 %
Convertible Notes @ 15 cents   $ 40,000       Demand       8.00 %
Finance Lease Liability   $ 7,039       Fiscal 2021       14.00 %
Operating Lease Liability   $ 2,631       Fiscal 2021       8.00 %
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.21.1
9. Option Issuances (Tables)
6 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]  
Schedule of common stock option activity
    Amount     Exercise
Price Range
    Weighted
Average
Exercise
Price
    Weighted
Average
Remaining
Term (Years)
 
Outstanding at September 30, 2019     8,761,500       $0.05 - $0.40     $ 0.26       1.85  
                                 
Granted                              
Exercised                              
Expired                              
Forfeited                              
Outstanding at March 31, 2020     8,761,500       $0.05 - $0.40     $ 0.26       1.80  
                                 
Outstanding at September 30, 2020     7,936,500       $0.05 - $0.40       0.26       2.32  
                                 
Granted                              
Exercised                              
Expired           $ 0.40                  
Forfeited                              
Outstanding at March 31, 2021     7,936,500       $0.05 - $0.40     $ 0.26       1.85  
Vested at March 31, 2021     6,686,500       $0.05 - $0.40       0.26       1.53  
                                 
XML 40 R30.htm IDEA: XBRL DOCUMENT v3.21.1
11. Leases (Tables)
6 Months Ended
Mar. 31, 2021
Leases [Abstract]  
Schedule of finance lease related assets and liabilities
           
    Classification on Balance Sheet   March 31,
2021
 
Assets            
Finance Lease Asset   Finance lease right of use asset   $ 76,626  
Total Finance lease assets       $ 76,626  
Liabilities            
Current Liabilities            
Finance lease liability   Current finance lease liability   $ 6.917  
Noncurrent liabilities            
Finance lease liability   Long-Term finance lease liability      
Total operating lease liability       $ 6.917  
Schedule of finance lease obligations
Finance Lease obligations at March 31, 2021:      
         
Total Payments   $ 7,039  
Amount representing interest     (122 )
Finance lease obligation, net   $ 6,917  
Finance lease obligation, current portion     6,917  
Finance lease obligation, long-term portion   $  
Schedule of opertating lease related assets and liabilities
    Classification on Balance Sheet   March 31,
2021
 
Assets            
Operating Lease Asset   Operating lease right of use asset   $ 2,631  
Total Operating lease assets       $ 2,631  
Liabilities            
Current Liabilities            
Operating lease liability   Current operating lease liability   $ 2,631  
Noncurrent liabilities            
Operating lease liability   Long-Term operating lease liability      
Total operating lease liability       $ 2,631  
Schedule of operating lease obligations

Lease obligations at March 31, 2021:

Total Payments   $ 2,650  
Amount representing interest     (19 )
Operating lease obligation, net   $ 2,631  
Operating lease obligation, current portion     (2,631 )
Operating lease obligation, long-term portion   $  
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.21.1
1. Organization of the Company and Significant Accounting Policies (Details)
6 Months Ended
Mar. 31, 2021
Office Equipment  
Estimated useful life of assets 5 years
Lab Equipment & Furniture  
Estimated useful life of assets 7 years
Lab Software  
Estimated useful life of assets 5 years
Leasehold Improvements  
Estimated useful life of assets 15 years
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.21.1
1. Organization of the Company and Significant Accounting Policies (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Mar. 31, 2021
Mar. 31, 2020
Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]          
Advertising costs $ 222 $ 0 $ 370 $ 0  
Allowance for doubtful accounts 337,515   337,515   $ 337,515
Inventory $ 21,540   $ 21,540   $ 20,401
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.21.1
3. Revenue Recognition (Details) - USD ($)
3 Months Ended 6 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Jun. 30, 2021
Mar. 31, 2021
Jun. 30, 2020
Mar. 31, 2020
Total revenues $ 126,935 $ 161,340   $ 253,535   $ 294,467
Licensing Fees & Royalties            
Total revenues 125,000 135,000   250,000   266,667
Licensing Fees & Royalties | Baoxin            
Total revenues 152,000 125,000   250,000   250,000
Licensing Fees & Royalties | Cell Source            
Total revenues 0 10,000   0   16,667
Product Sales            
Total revenues 760 14,440   760   15,900
Product Sales | Baoxin            
Total revenues 0 4,380   $ 0   $ 5,840
Product Sales | CryoViva            
Total revenues 0 10,060 $ 0   $ 10,060  
Product Sales | Science Diagnostic            
Total revenues $ 760 $ 0 $ 760   $ 0  
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.21.1
4. Loss Per Share (Details) - USD ($)
3 Months Ended 6 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Mar. 31, 2021
Mar. 31, 2020
Earnings Per Share [Abstract]        
Net loss $ (304,729) $ (147,227) $ (350,763) $ (419,087)
Basic & fully diluted net income (loss) per common share $ (0.005) $ (0.003) $ (0.006) $ (0.008)
Weighted average shares outstanding - basic & fully diluted 60,248,623 50,262,918 59,963,564 49,883,110
XML 45 R35.htm IDEA: XBRL DOCUMENT v3.21.1
4. Loss Per Share (Details Narrative) - shares
6 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Stock Options    
Shares excluded from computation of earnings per share 7,986,500 8,761,500
Convertible Notes    
Shares excluded from computation of earnings per share 2,268,117 2,134,784
XML 46 R36.htm IDEA: XBRL DOCUMENT v3.21.1
5. Fixed Assets (Details) - USD ($)
Mar. 31, 2021
Sep. 30, 2020
Accumulated depreciation $ (282,327) $ (275,772)
Fixed assets, net 120,036 126,591
Laboratory Equipment    
Fixed assets, gross 257,905 257,905
Laboratory Leasehold Improvements    
Fixed assets, gross 110,286 110,286
Laboratory Furniture    
Fixed assets, gross 1,841 1,841
Office Equipment    
Fixed assets, gross 27,869 27,869
Office Leasehold Improvements    
Fixed assets, gross 2,650 2,650
Office Furniture    
Fixed assets, gross $ 1,812 $ 1,812
XML 47 R37.htm IDEA: XBRL DOCUMENT v3.21.1
5. Fixed Assets (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Mar. 31, 2021
Mar. 31, 2020
Property, Plant and Equipment [Abstract]        
Depreciation expense $ 3,277 $ 3,207 $ 6,555 $ 4,666
XML 48 R38.htm IDEA: XBRL DOCUMENT v3.21.1
6. Patent & Patents Filings (Details)
Mar. 31, 2021
USD ($)
Finite-Lived Intangible Assets, Net [Abstract]  
2022 $ 14,010
2023 14,010
2024 14,010
2025 14,010
2026 $ 14,010
XML 49 R39.htm IDEA: XBRL DOCUMENT v3.21.1
6. Patent & Patents Filings (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Mar. 31, 2021
Mar. 31, 2020
Sep. 30, 2020
Finite-Lived Intangible Assets, Net [Abstract]          
Amortization expense $ 28,104 $ 1,408 $ 29,527 $ 2,832  
Unamortized costs of patents 174,794   174,794   $ 297,731
Amortizable patent costs $ 238,172   $ 238,172   $ 96,000
XML 50 R40.htm IDEA: XBRL DOCUMENT v3.21.1
7. Debt (Details)
3 Months Ended 6 Months Ended
Mar. 31, 2021
USD ($)
Mar. 31, 2021
USD ($)
Bridge Notes    
Carrying value $ 226,500 $ 226,500
Maturity   Demand
Rate 8.00% 8.00%
Convertible Notes @ 75 cents    
Carrying value $ 150,000 $ 150,000
Maturity Fiscal 2022  
Rate 5.00% 5.00%
Convertible Notes @ 40 cents    
Carrying value $ 100,000 $ 100,000
Maturity   Demand
Rate 8.00% 8.00%
Convertible Notes @ 35 cents    
Carrying value $ 83,500 $ 83,500
Maturity   Demand
Rate 8.00% 8.00%
Convertible Notes @ 33 cents    
Carrying value $ 150,000 $ 150,000
Maturity   Demand
Rate 5.00% 5.00%
Convertible Notes @ 30 cents    
Carrying value $ 45,000 $ 45,000
Maturity   Demand
Rate 8.00% 8.00%
Convertible Notes @ 20 cents    
Carrying value $ 155,000 $ 155,000
Maturity   Demand
Rate 8.00% 8.00%
Convertible Notes @ 15 cents    
Carrying value $ 40,000 $ 40,000
Rate 8.00% 8.00%
Finance Lease Liability    
Carrying value $ 7,039 $ 7,039
Maturity   Fiscal 2021
Rate 14.00% 14.00%
Operating Lease Liability    
Carrying value $ 2,631 $ 2,631
Maturity   Fiscal 2021
Rate 8.00% 8.00%
XML 51 R41.htm IDEA: XBRL DOCUMENT v3.21.1
8. Common Stock Issuances (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Mar. 31, 2021
Mar. 31, 2021
Mar. 31, 2020
Equity [Abstract]      
Issuance of common shares (in shares) 227,500 640,000 875,000
Issuance of common shares $ 55,500 $ 143,000 $ 175,000
Common stock for services (in shares)   80,000  
Common stock for services   $ 20,000  
Common stock for interest (in shares) 81,031 81,031  
Common stock for interest $ 26,148 $ 26,148  
XML 52 R42.htm IDEA: XBRL DOCUMENT v3.21.1
9. Option Issuances (Details) - $ / shares
6 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Share-based Payment Arrangement [Abstract]    
Number of options outstanding, beginning 7,936,500 8,761,500
Number of options granted 0 0
Number of options exercised 0 0
Number of options expired 0 0
Number of options forfeited 0 0
Number of options outstanding, ending 7,936,500 8,761,500
Number of options vested 6,686,500  
Range of exercise price options outstanding, beginning $0.05 - $0.40 $0.05 - $0.40
Range of exercise price options granted
Range of exercise price options exercised
Range of exercise price options expired $0.40
Range of exercise price options forfeited  
Range of exercise price options outstanding, ending $0.05 - $0.40 $0.05 - $0.40
Range of exercise price options vested $0.05 - $0.40  
Weighted average exercise price outstanding, beginning $ .26 $ .26
Weighted average exercise price outstanding, ending .26 $ .26
Weighted average exercise price vested $ .26  
Weighted average remaining term, beginning 2 years 3 months 25 days 1 year 10 months 6 days
Weighted average remaining term, ending 1 year 10 months 6 days 1 year 9 months 18 days
Weighted average remaining term vested 1 year 6 months 11 days  
XML 53 R43.htm IDEA: XBRL DOCUMENT v3.21.1
9. Option Issuances (Details Narrative)
Mar. 31, 2021
USD ($)
Share-based Payment Arrangement [Abstract]  
Intrinsic value of the outstanding common stock options $ 4,031,225
Intrinsic value of the outstanding vested stock options $ 3,703,725
XML 54 R44.htm IDEA: XBRL DOCUMENT v3.21.1
11. Leases (Details) - USD ($)
Mar. 31, 2021
Sep. 30, 2020
Assets    
Finance lease asset $ 76,626 $ 85,817
Total finance lease assets 76,626 85,817
Current liabilities    
Finance lease liability 6,917 $ 26,722
Noncurrent liabilities    
Finance lease liability 0  
Total finance lease liability $ 6,917  
XML 55 R45.htm IDEA: XBRL DOCUMENT v3.21.1
11. Leases (Details 1) - USD ($)
Mar. 31, 2021
Sep. 30, 2020
Leases [Abstract]    
Total payments $ 7,039  
Amount representing interest (122)  
Finance lease obligation, net 6,917  
Finance lease obligation, current portion (6,917) $ (26,722)
Finance lease obligation, long-term portion $ 0  
XML 56 R46.htm IDEA: XBRL DOCUMENT v3.21.1
11. Leases (Details 2) - USD ($)
Mar. 31, 2021
Sep. 30, 2020
Assets    
Operating lease asset $ 2,631 $ 18,064
Total operating lease assets 2,631 18,064
Current liabilities    
Operating lease liability 2,631 $ 18,064
Noncurrent liabilities    
Operating lease liability 0  
Total operating lease liability $ 2,631  
XML 57 R47.htm IDEA: XBRL DOCUMENT v3.21.1
11. Leases (Details 3) - USD ($)
Mar. 31, 2021
Sep. 30, 2020
Leases [Abstract]    
Total payments $ 2,650  
Amount representing interest (19)  
Operating lease obligation, net 2,631  
Operating lease obligation, current portion (2,631) $ (18,064)
Operating lease obligation, long-term portion $ 0  
XML 58 R48.htm IDEA: XBRL DOCUMENT v3.21.1
11. Leases (Details Narrative)
3 Months Ended 6 Months Ended
Mar. 31, 2021
USD ($)
Mar. 31, 2021
USD ($)
Leases [Abstract]    
Finance lease expense $ 5,078 $ 10,503
Amortization expense 4,596 9,191
Interest expense $ 482 $ 1,312
Finance lease remaining lease term 2 months 2 months
Finance lease discount rate 14.17% 14.17%
Operating lease expense $ 7,950 $ 15,900
Amortization expense 7,793 15,433
Interest expense $ 157 467
Cash paid under operating lease   $ 15,900
Operating lease remaining lease term 1 month 1 month
Operating lease discount rate 8.00% 8.00%
Rent paid for the laboratory facility $ 7,167 $ 14,334
XML 59 R49.htm IDEA: XBRL DOCUMENT v3.21.1
12. Concentrations of Credit (Details Narrative) - USD ($)
6 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Sep. 30, 2020
Allowance for doubtful accounts $ 337,515   $ 337,515
Baoxin      
Accounts receivable 1,075,000 $ 578,295  
Allowance for doubtful accounts $ 325,000 $ 325,000  
Revenue | Baoxin      
Concentration percent 97.00%    
Revenue | Baoxin, Cell Source and CryoViva      
Concentration percent   96.00%  
XML 60 R50.htm IDEA: XBRL DOCUMENT v3.21.1
14. Related Party Transactions (Details Narrative) - USD ($)
Mar. 31, 2021
Sep. 30, 2020
Related Party Transactions [Abstract]    
Due to related parties $ 147,775 $ 99,125
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