This annual report on Form 10-K and other reports filed by American CryoStem Corporation (the "Company") from time to time with the U.S. Securities and Exchange Commission (the "SEC") contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company's management as well as estimates and assumptions made by Company's management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words "anticipate," "believe," "estimate," "expect," "future," "intend," "plan," or the negative of these terms and similar expressions as they relate to the Company or the Company's management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the "Risk Factors" section of this Annual Report on Form 10-K., relating to the Company's industry, the Company's operations and results of operations, and any businesses that the Company may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management's judgment in its application. There are also areas in which management's judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.





Background

We were 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 our common stock, par value $0.001 per share, to ACS (the "Asset Purchase"). We filed a Current Report on Form 8-K with the Securities and Exchange Commission on April 27, 2011 disclosing the Asset Purchase and certain related matters including, but not limited to, the appointment of our present officers and directors as well as the resignation by the former chief executive officer and sole director. Our fiscal year ends September 30 of each calendar year.



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Overview

American CryoStem Corporation; (CRYO) founded in 2008, has evolved to become a biotechnology pioneer, standardizing adipose tissue derived technologies (Adult Stem Cells) for the fields of Regenerative and Personalized Medicine. These standardized technologies which include granted patents, are the basis for our chemistry, manufacturing, and control (cGMP Manufacturing) of our ATCell product for clinical use in clinical investigations for Biologic License Applications with the US Food and Drug Administration. Our laboratory stem cell products are characterized adult human Mesenchymal Stem Cell (MSC's) derived from adipose tissue that work in conjunction with our patented (non-animal) medium lines.

The Company 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 Personnel" File number 19089 was approved by the FDA on September 17, 2020. Post-Concussion Syndrome is an incurable condition affecting a significant number of athletes involved in contact sports such as football, boxing, soccer, and other sports with a significant number of participants have suffered one or more concussions. In addition, published research has indicated that up to 30% of all military personal, active and retired, may suffer from this condition.

The Company built and validated a new cGMP clean room processing and manufacturing area at our facility in Monmouth Junction NJ, implemented and validated cGMP Standard Operating Procedures (SOPs) and installed a new Quality Management System to support its increased focus on patent and product development and support additional clinical activities.

The Company has built a domestic and international patent portfolio consisting of 32 patents. Our 4 primary operating patents regarding the "collection - processing - storage and return to point of care" of adipose stem cells have been granted.

The Company is expanding its efforts in attracting and developing collaborative partners to accelerate its development efforts of products derived from our processing platform that incorporate our completed processing products and provide opportunities for rapid expansion of our platform. The R&D efforts are focused on university and private collaborations to discover, develop, and commercialize our cellular therapies and laboratory products and combinations with synergistic technologies to create regenerative medicine applications and new intellectual property.





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 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 discussed above, 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.





Fiscal 2020 Operations

In Fiscal 2021, The Company's Total Revenue decreased to $20,590 from $557,903 in Fiscal 2020, due to the adjustment of the revenue recognition related to our agreement with Baoxin (see Note 3, 13 and 14 of the Financial Statements). Accounts Receivable decreased to $78,782 in Fiscal 2021 from $500,000 in Fiscal 2020 due to the billing of Annual Storage Fees due to the adjustment of Accounts Receivable related to our Agreement with Baoxin (See Note 3, 13 and 14 of the Financial Statements). In Fiscal 2021, Licensing Fees and Royalties decreased to $0 from $523,333 in Fiscal 2020. In Fiscal 2021, Tissue Processing & Storage increased to $19,830 from $11,900 in Fiscal 2020. Short term liabilities increased to $1,630,908 in Fiscal 2021 from $1,049,634 in Fiscal 2020. Long term debt increased to $1,272,901 in 2021 from $848,414 in 2020; due to increases in Accrued Executive Compensation a new convertible note, finance lease and an increase to the note to the related party. Cost of Sales decreased to $13,573 in Fiscal 2021 from $43,837 in Fiscal 2020. Research and Development increased to $374,284 in Fiscal 2021 from $19,176 in 2020, since the company's primary focus in 2021 was clinical studies for its current and planned IND filings. Stock Compensation increased to $902,853 in Fiscal 2021 from $417,542, due to stock options granted. Bad Debt Expense increased to $860,933 in Fiscal 2021 from $326,650 in Fiscal 2020 (See Note 14 of the Financial Statements.) Management increased its allowance for Bad Debt by $542,370. The majority of the increase in Bad Debt Allowance was caused by Management's concern for its International Partner, Baoxin's ability to pay caused by the continuing affects of the COVID-19 Pandemic See Note 13 and 14 of the Financial Statements.



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Going Concern

As of the date of this annual 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.

We have suffered recurring losses from operations since our inception. In addition, we have yet to generate an internal cash flow from our business operations or successfully raised the financing required to expand our business. As a result of these and other factors, our independent auditor has expressed substantial doubt about our ability to continue as a going concern. Our future success and viability, therefore, are dependent upon our ability to generate capital financing. The failure to generate sufficient revenues or raise additional capital may have a material and adverse effect upon us and our shareholders.

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.

Liquidity and Capital Resources

As of the fiscal year ended September 30, 2021, the Company had a cash balance of $8,244 and net accounts receivable of $78,782. Our sources of funds in 2021, were tissue processing and storage fees, and financing activities. In Fiscal 2021, we used $303,920 of net cash for Operations, and $91,345 for investment activities, including Patent Development, and the establishment of a new finance lease for laboratory equipment. Additionally, the Company generated $361,749 from financing activities, which included issuance of convertible notes, issuance of common stock, a finance lease and proceeds from a related party note.

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 if not 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 fiscal year ended September 30, 2021.

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. We periodically evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements. See Note 1 and Note 3 of the Financial Statements for additional 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 States of America, whereby revenues are recognized in the period earned and expenses when incurred.



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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.

Fair Value of Financial Instruments

Our financial instruments consist of cash and cash equivalents. The fair value of cash and cash equivalents approximates the recorded amounts because of the liquidity and short-term nature of these items.

Recent Accounting Pronouncements

The FASB recently issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, to reduce complexity in applying GAAP to certain financial instruments with characteristics of liabilities and equity.

The guidance in ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives.

In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer's own stock and classified in stockholders' equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract.

The amendments in ASU 2020-06 further revise the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares.

The amendments in ASU 2020-06 are effective for our company for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is currently assessing the impact of these amendments on its future financial reporting.

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.





Related Party Transactions.

At September 30, 2021, the Company was indebted to a company that is majority owned by the Company's two chief executive officers for $147,775.

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