Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Non-compliance with Nasdaq's audit committee requirement (two independent board members instead of three).

Mitigation Strategies

• Working diligently to comply with Nasdaq's requirements within the provided cure period.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Increased competition in the stem cell preservation market, including from public cord blood banks.
• Decreased demand for cord blood stem cell storage services.
• Increased costs associated with business growth, including operation of facilities and commercial launch of new stem cell types.
• Risks related to international operations, including local business laws and practices.
• Technological or medical breakthroughs that could render stem cell preservation obsolete.
• Material failure or malfunction in storage facilities or natural disasters.
• Material failure or compromise of information systems.
• Costs associated with litigation.
• Difficulties enforcing international licensing agreements.
• Inability to realize cost savings from acquisitions.
• Inability to realize a return on investment.
• Adverse impact on revenue and operating margins due to discounting services.
• Difficulties in global expansion and product diversification.

Mitigation Strategies

• The Company is monitoring the situation and taking action to protect its business, operations, and financial condition.
• The Company is managing discretionary expenses.
• The Company is exploring strategic mergers or acquisitions, investments in other companies, repurchases of common stock or RSA interests.
• The Company intends to transfer assets related to the Duke License Agreement into a new subsidiary and explore spinning it off to shareholders.
• The Company is implementing processes to improve its internal control over financial reporting.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Increased competition in the stem cell preservation market.
• Potential for negative results in clinical trials for efficacy of MSCs.
• Government regulation of stem cell storage facilities.
• Data security breaches.
• Risks associated with international operations.
• Compliance with ESG policies and practices.

Mitigation Strategies

• Implementing cybersecurity safeguards and procedures.
• Monitoring the situation carefully and taking action to protect its business, operations and financial condition.
• Intending to transfer assets related to the Patent and Technology License Agreement with Duke University and certain other assets into a newly formed, wholly-owned subsidiary to provide more financial flexibility to fund future projects.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Increased competition in our business including increasing competition from public cord blood banks particularly in overseas markets but also in the U.S.
• Any decrease or slowdown in the number of people seeking to store umbilical cord blood stem cells or decrease in the number of people paying annual storage fees
• Any adverse impacts on revenue or operating margins due to the costs associated with increased growth in our business, including the possibility of unanticipated costs relating to the operation of our facility and costs relating to the commercial launch of new types of stem cells
• Any unique risks posed by our international activities, including but not limited to local business laws or practices that diminish our affiliates’ ability to effectively compete in their local markets
• Any technological or medical breakthroughs that would render our business of stem cell preservation obsolete
• Any material failure or malfunction in our storage facilities; or any natural disaster or act of terrorism that adversely affects stored specimens
• Any adverse results to our prospects, financial condition or reputation arising from any material failure or compromise of our information systems
• The costs associated with defending or prosecuting litigation matters, particularly including litigation related to intellectual property, and any material adverse result from such matters
• The success of our licensing agreements and their ability to provide us with royalty fees
• Any difficulties and increased expense in enforcing our international licensing agreements
• Any adverse performance by or relations with any of our licensees
• Any inability to enter into new licensing arrangements including arrangements with non-refundable upfront fees
• Any inability to realize cost savings as a result of recent acquisitions
• Any inability to realize a return on an investment
• Any adverse impact on our revenues and operating margins as a result of discounting of our services in order to generate new business in tough economic times where consumers are selective with discretionary spending
• The success of our global expansion initiatives and product diversification
• Our actual future ownership stake in future therapies emerging from our collaborative research partnerships
• Our ability to minimize our future costs related to R&D initiatives and collaborations and the success of such initiatives and collaborations
• Any inability to successfully identify and consummate strategic acquisitions
• Any inability to realize benefits from any strategic acquisitions
• The Company’s ability to realize a profit on the acquisition of PrepaCyte-CB
• The Company’s ability to realize a profit on the acquisition of Cord:Use
• The Company's actual future competitive position in stem cell innovation
• Future success of its core business and the competitive impact of public cord blood banking on the Company’s business
• The success of the Company’s initiative to expand its core business units to include biopharmaceutical manufacturing and operating clinics, the uncertainty of profitability from its biopharmaceutical manufacturing and operating clinics, the Company’s ability to minimize future costs to the Company related to R&D initiatives and collaborations and the success of such initiatives and collaborations
• The success of the Company's new facility and the expansion of the Company’s cryopreservation and cold storage business by introducing a new service, ExtraVault
• The expense, timing and uncertain results of clinical trials related to the Duke Agreement

Mitigation Strategies

• Entered into an interest rate swap agreement with Susser to manage exposure to interest rate risk related to its variable rate debt obligation under the Term Note.
• Intends to transfer the assets related to the Patent and Technology License Agreement with Duke University and certain other assets into a newly formed, wholly-owned subsidiary to provide more financial flexibility to fund future projects. Once such transfer is completed, the Company also intends to explore spinning off this subsidiary to the Company’s shareholders.
• Anticipates that its cash and cash equivalents, marketable securities and cash flows from future operations, together with external sources of capital will be sufficient to fund its known cash needs for at least the next 12 months.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Increased competition in the stem cell preservation market.
• Potential for regulatory changes impacting the stem cell storage industry.
• Risks associated with the Duke License Agreement and potential litigation.
• Maintaining sufficient liquidity and capital resources.
• Risks related to information technology and data security.
• Risks related to intellectual property protection.
• Costs and demands of operating as a public company.
• Increasing scrutiny of ESG policies and practices.

Mitigation Strategies

• Maintaining a cGMP- and cGTP-compliant facility with AABB and FACT accreditation.
• Implementing cybersecurity safeguards and procedures.
• Filing a demand for arbitration against Duke University.
• Securing a credit agreement with Susser Bank.
• Implementing processes to help alleviate risks associated with open source software.

Supply Chain Management

Climate-Related Risks & Opportunities