Celularity 迟到两个多月的 2026 Q2 10-Q 终于披露：持续经营存疑、6月末现金仅58.6万美元，但补报本身化解纳斯达克逾期停牌风险，净方向为多空交织，无可交易边际

----- form10-q.htm -----
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
☒
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended
June 30,
2026
or
☐
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:
001-38914
Celularity
Inc.
(Exact
name of registrant as specified in its charter)
Delaware
83-1702591
(State
or other jurisdiction
of
incorporation or organization)
(I.R.S.
Employer
Identification
No.)
170 Park Ave
,
Florham
Park
,
NJ
07932
(Address of principal
executive offices)
(Zip Code)
(908)
768-2170
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
Trading
Symbol(s)
Name
of each exchange on which registered
Class A Common Stock, par
value $0.0001 per share
CELU
The
Nasdaq
Stock Market
LLC
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.
Yes
☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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).
Yes
☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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
☐
Accelerated filer
☐
Non-accelerated filer
☒
Smaller reporting company
☒
Emerging growth company
☐
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. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
☒
As
of October 19, 2026, the registrant had
32,450,679
shares of Class A common stock, $
0.0001
par value per share, outstanding.
Table
of Contents
Page
PART I.
FINANCIAL INFORMATION
Item 1.
Unaudited Financial Statements
1
Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025
1
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2026 and 2025
2
Condensed Consolidated Statements of Changes In Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2026 and 2025
3
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025
4
Notes to Unaudited Condensed Consolidated Financial Statements
5
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
27
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
37
Item 4.
Controls and Procedures
37
PART II.
OTHER INFORMATION
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
Signatures
39
Unless
the context indicates otherwise, references in this quarterly report to the “Company,” “Celularity,” “we,”
“us,” “our” and similar terms refer to Celularity Inc. and its consolidated subsidiaries.
This
quarterly report on Form 10-Q also contains registered marks, trademarks and trade names of other companies. Celularity Inc. has exclusive
rights to the use of the Celularity logo, Celularity IMPACT, Biovance, Interfyl, Lifebank, CentaFlex and other trademarks or service
marks of Celularity Inc. appearing in this quarterly report. All other trademarks, registered marks and trade names appearing herein
are the property of their respective holders.
i
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some
of the statements contained in this report on Form 10-Q constitute forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act.
Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and
similar expressions concerning matters that are not historical facts. These statements relate to our future events, including our anticipated
operations, research, development and commercialization activities, clinical trials, operating results and financial condition. These
forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance
or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking
statements. Forward-looking statements may include, but are not limited to, statements about:
●
the success, cost, timing
and potential indications of our cellular therapy candidate development activities and clinical trials, as well as our ability to
expand our biomaterials business and leverage our core expertise in cellular therapeutic development and manufacturing to generate
revenues by providing contract manufacturing and development services to third parties;
●
the size of the markets
for our therapeutic candidates and biomaterials products, and our ability to serve those markets;
●
the timing of the initiation,
enrollment and completion of planned clinical trials in the United States and foreign countries;
●
our ability to obtain and
maintain regulatory approval of our therapeutic candidates in any of the indications for which we plan to develop them, and any related
restrictions, limitations, and/or warnings in the label of any approved therapeutic;
●
our ability to obtain funding
for our operations, including funding necessary to complete the clinical trials of any of our therapeutic candidates;
●
our ability and plans to
research, develop, manufacture and commercialize our therapeutic candidates, as well as our degenerative disease products;
●
our ability to attract
and retain collaborators with development, regulatory and commercialization expertise;
●
our ability to successfully
commercialize our therapeutic candidates and biomaterials products and the ability for such therapeutic products and biomaterials
products to qualify for reimbursement;
●
our ability to develop
and maintain sales and marketing capabilities, whether alone or with potential future collaborators;
●
our estimates regarding
future expenses, revenues, capital requirements and needs for additional financing;
●
our use of cash and other
resources;
●
our expectations regarding
our ability to obtain and maintain and preserve our licenses in, and our intellectual property protection for our therapeutic candidates,
degenerative disease products, and our ability to operate our business without infringing on the intellectual property rights of
others.
●
the success, timing and
anticipated benefits of our strategic transactions and collaborations, including our ability to realize the expected operational,
financial and commercial benefits of recently entered agreements and other strategic arrangements;
ii
●
our ability to attract,
retain and successfully manage collaborators, suppliers and other third parties, and to realize the anticipated benefits of such
relationships;
●
our estimates regarding
future expenses, revenues, capital requirements and the impact of strategic transactions, collaborations or other arrangements on
our financial condition and liquidity; and
●
the impact of recently
completed or announced transactions, agreements or other strategic initiatives on our business, operations and financial condition.
In
some cases, you can identify these forward-looking statements by the use of terminology such as “anticipate,” “believe,”
“can,” “contemplate,” “continue,” “could,” “estimate,” “expect,”
“forecast,” “intends,” “may,” “might,” “outlook,” “plan,” “possible,”
“potential,” “predict,” “project,” “seek,” “should,” “strive,”
“target,” “will,” “would” and the negative version of these words or other comparable words or phrases,
but the absence of these words does not mean that a statement is not forward-looking. These statements reflect our current views with
respect to future events, are based on assumptions and are subject to risks and uncertainties. Given these risks and uncertainties, you
should not place undue reliance on these forward-looking statements. We discuss many of these risks in greater detail under the headings
“Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
in this report on Form 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot
be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions
of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results
could differ materially from those projected in the forward-looking statements.
Moreover,
we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management
to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Considering
these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may not occur and actual
results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You
should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events
and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by law, neither
we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation
to update publicly any forward-looking statements for any reason after the date of this report on Form 10-Q to conform these statements
to actual results or to changes in our expectations.
You
should read this report on Form 10-Q and the documents that we reference completely and with the understanding that our actual future
results may be materially different from what we expect. We qualify all forward-looking statements by these cautionary statements. Except
as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether because
of any new information, future events, changed circumstances, or otherwise. Readers are cautioned not to place undue reliance on the
forward-looking statements, which speak only as of the date of this report on Form 10-Q.
iii
PART
I—FINANCIAL INFORMATION
Item
1. Financial Statements.
Celularity
Inc.
Unaudited
Condensed Consolidated Balance Sheets
(In
thousands, except share and per share amounts)
June 30,
December 31,
2026
2025
Assets
Current assets:
Cash and cash equivalents
$
586
$
6,175
Accounts receivable, net of allowance of $
7,884
and $
7,647
as of June 30, 2026 and December 31, 2025, respectively
4,681
4,653
Inventory
718
571
Prepaid expenses and other current assets
463
920
Total current assets
6,448
12,319
Property and equipment, net
53,383
55,797
Goodwill
7,347
7,347
Intangible assets, net
6,334
7,756
Right-of-use assets - operating
10,684
10,720
Restricted cash
9,808
10,197
Inventory, net of current portion
1,925
2,946
Other long-term assets
238
247
Total assets
$
96,167
$
107,329
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable
$
14,578
$
26,422
Accrued expenses and other current liabilities
24,894
32,574
Short-term debt - unaffiliated
3,862
9,563
Short-term debt - related parties
5,105
4,440
Short-term license obligation
4,227
2,113
Deferred revenue
5,130
5,255
Preferred stock redemption liability
1,942
300
Derivative liability
-
92
Total current liabilities
59,738
80,759
Deferred revenue, net of current portion
13,070
2,799
Noncurrent acquisition - related contingent consideration
1,413
1,413
Noncurrent lease liabilities - operating
27,054
26,898
Warrant liabilities
567
1,545
Long-term license obligation
29,585
31,699
Deferred income tax liabilities
12
12
Other liabilities
259
266
Total liabilities
131,698
145,391
Commitments and contingencies (Note 13)
Stockholders’ equity (deficit)
Preferred stock, $
0.0001
par value,
10,000,000
shares authorized;
0
and
1,732,084
shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively
—
—
Common Stock, $
0.0001
par value,
730,000,000
shares authorized;
29,283,614
and
28,837,787
shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively
3
3
Additional paid-in capital
954,369
953,418
Accumulated other comprehensive loss
—
—
Accumulated deficit
(
989,903
)
(
991,483
)
Total stockholders’ deficit
(
35,531
)
(
38,062
)
Total liabilities and stockholders’ deficit
$
96,167
$
107,329
The
accompanying notes are an integral part of these condensed consolidated financial statements.
1
Celularity
Inc.
Condensed
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)
(In
thousands, except share and per share amounts)
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Net revenues
Product sales
$
4,061
$
2,379
$
4,927
$
11,397
Services
652
1,275
1,902
2,683
License, royalty and other
719
2,082
2,449
3,082
Total revenues
5,432
5,736
9,278
17,162
Operating expenses
Cost of revenues (excluding amortization of acquired intangible assets)
Product sales
2,071
2,550
2,243
5,056
Services
227
220
449
429
License, royalty and other
49
2,472
1,107
3,311
Research and development
2,028
3,352
5,022
7,080
Selling, general and administrative
4,940
12,634
14,105
26,896
Amortization of acquired intangible assets
354
372
722
740
Total operating expenses
9,669
21,600
23,648
43,512
Loss from operations
(
4,237
)
(
15,864
)
(
14,370
)
(
26,350
)
Other income (expense):
Interest income
11
62
73
138
Interest expense
(
177
)
(
1,943
)
(
529
)
(
4,380
)
Change in fair value of warrant liabilities
1,065
(
1,276
)
978
(
1,034
)
Gain on SLS Settlement
6,730
-
6,730
-
Loss on Helena Settlement
(
2,500
)
-
(
2,500
)
-
Change in fair value of debt
(
175
)
(
1,075
)
(
341
)
(
1,087
)
Loss on debt extinguishment
-
-
-
(
5,736
)
Sale of New Jersey state tax loss benefits
-
-
12,159
-
Other expense, net
(
11
)
(
4,428
)
(
620
)
(
5,829
)
Total other income (expense)
4,943
(
8,660
)
15,950
(
17,928
)
Income (loss) before income taxes
706
(
24,524
)
1,580
(
44,278
)
Income tax expense (benefit)
-
—
—
—
Net income (loss)
$
706
$
(
24,524
)
$
1,580
$
(
44,278
)
Deemed dividend relating to inducement of Dragasac warrants
-
-
-
(
64
)
Earnings allocated to participating warrants
(
160
)
-
(
359
)
-
Net income (loss) attributable to common shareholders
$
546
$
(
24,524
)
$
1,221
$
(
44,342
)
Per share information:
Net income (loss) per share - basic
$
0.02
$
(
1.02
)
$
0.04
$
(
1.86
)
Weighted average shares outstanding - basic
29,204,376
24,020,193
29,136,603
23,775,535
Net income (loss) per share - diluted
$
0.02
$
(
1.02
)
$
0.04
$
(
1.86
)
Weighted average shares outstanding - diluted
29,344,664
24,020,193
29,348,929
23,775,535
Net income (loss)
$
706
$
(
24,524
)
$
1,580
$
(
44,278
)
Other comprehensive income (loss)
Change in fair value of debt due to change in credit risk, net of tax
-
(
3
)
—
2
Comprehensive income (loss)
$
706
$
(
24,527
)
$
1,580
$
(
44,276
)
The
accompanying notes are an integral part of these condensed consolidated financial statements.
2
Celularity
Inc.,
Condensed
Consolidated Statements of Changes In Stockholders’ Equity (Deficit) (Unaudited)
(In
thousands, except share amounts)
Common Stock
Series A Preferred Stock
Additional
Paid-in
Accumulated
Accumulated Other Comprehensive
Total
Stockholders’
Equity
Shares
Amount
Shares
Amount
Capital
Deficit
Income (Loss)
(Deficit)
Balances at January 1, 2025
22,546,671
$
2
-
-
$
908,523
$
(
899,683
)
$
(
5
)
$
8,837
Vesting of restricted stock units
87,419
-
-
-
-
-
-
-
Tax withholding on vesting of restricted stock units
-
-
-
-
(
98
)
-
-
(
98
)
Issuance to Dragasac in connection with warrant repricing
1,188,255
-
-
-
2,460
-
-
2,460
Dragasac Warrant Issuance Inducement
-
-
-
-
64
(
64
)
-
-
Issuance of common stock consideration shares to Yorkville in connection with Side Letter
100,000
-
-
-
149
-
-
149
Issuance of common stock in connection with settlement of debt
21,739
-
-
-
51
-
-
51
Issuance and modification of warrants to C. V. Starr
-
-
-
-
207
-
-
207
Change in FV of debt
-
-
-
-
-
-
5
5
Stock-based compensation expense
-
-
-
-
2,637
-
-
2,637
Net loss
-
-
-
-
-
(
19,754
)
-
(
19,754
)
Balances at March 31, 2025
23,944,084
$
2
-
$
-
$
913,993
$
(
919,501
)
$
-
$
(
5,506
)
Tax withholding on vesting of restricted stock units
-
-
-
-
(
14
)
-
-
(
14
)
Vesting of restricted stock units
13,435
-
-
-
-
-
-
-
Issuance of common stock consideration shares to Yorkville in connection with Side Letter
100,000
-
-
-
233
-
-
233
Common stock issued pursuant to short—term debt conversion
490,632
-
-
-
922
-
-
922
Issuance of common stock in exchange for consulting services
50,000
-
-
-
108
-
-
108
Issuance of common stock in connection with settlement of debt
12,000
-
-
-
21
-
-
21
Issuance of equity-classified warrants
-
-
-
-
317
-
-
317
Reclassification of liability-classified warrants to equity-classified warrants
-
-
-
-
501
-
-
501
Change in fair value of debt
-
-
-
-
-
-
(
3
)
(
3
)
Stock-based compensation expense
-
-
-
-
2,448
-
-
2,448
Net loss
-
-
-
-
-
(
24,524
)
-
(
24,524
)
Balances at June 30, 2025
24,610,151
$
2
-
$
-
$
918,529
$
(
944,025
)
$
(
3
)
$
(
25,497
)
Common Stock
Series A Preferred Stock
Additional
Paid-in
Accumulated
Accumulated Other Comprehensive
Total
Stockholders’
Shares
Amount
Shares
Amount
Capital
Deficit
Income (Loss)
Deficit
Balances at January 1, 2026
28,837,787
$
3
1,732,084
-
$
953,418
$
(
991,483
)
$
-
$
(
38,062
)
Issuance of warrants for Strategic Advisory Services
-
-
-
-
256
-
-
256
Issuance of common stock in connection with legal settlement
233,790
-
-
-
300
-
-
300
Stock-based compensation expense
-
-
-
-
1,243
-
-
1,243
Vesting of restricted stock units
9,711
-
-
-
-
-
-
-
Director fees paid with restricted stock units
98,463
-
-
-
128
-
-
128
Net income
-
-
-
-
-
874
-
874
Balances at March 31, 2026
29,179,751
$
3
1,732,084
$
-
$
955,345
$
(
990,609
)
$
-
$
(
35,261
)
Issuance of warrants for Strategic Advisory Services
-
-
-
-
49
-
-
49
Issuance of common stock in connection with legal settlement
100,000
-
-
-
73
-
-
73
Stock-based compensation expense
-
-
-
-
844
-
-
844
Vesting of restricted stock units
3,863
-
-
-
-
-
-
-
Series A Convertible Preferred Share Conversion to the Exchange Promissory Note
-
-
(
1,732,084
)
-
(
1,942
)
-
-
(
1,942
)
Net income
-
-
-
-
-
706
-
706
Balances at June 30, 2026
29,283,614
$
3
-
$
-
$
954,369
$
(
989,903
)
$
-
$
(
35,531
)
The
accompanying notes are an integral part of these condensed consolidated financial statements.
3
Celularity
Inc.
Condensed
Consolidated Statements of Cash Flows (Unaudited)
(in
thousands)
Six Months Ended June 30,
2026
2025
Cash flow from operating activities:
Net income (loss)
$
1,580
$
(
44,278
)
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operations:
Depreciation and amortization
3,136
3,668
Non cash lease expense
36
61
Provision for inventory obsolescence
-
(
37
)
Gain on SLS Settlement
(
6,730
)
-
Loss on Helena Settlement
2,500
-
Provision for credit losses
299
(
53
)
Change in fair value of warrant liabilities
(
978
)
1,034
Issuance of warrants due to Strategic Advisory Agreement
305
-
Loss on issuance of common stock to Yorkville in connection with the Side Letter
-
382
Loss on issuance of common stock in connection with settlements
373
72
Issuance of warrants for services
-
317
Share-based compensation expense
2,087
5,085
Issuance of common stock as compensation expense for consulting services
-
108
Director fees paid with RSU’s
128
-
Loss on extinguishment of debt
-
5,736
Change in fair value of debt
341
1,087
Non cash interest expense
340
3,782
Changes in operating assets and liabilities:
Accounts receivable
(
327
)
2,458
Inventory, including current portion
874
6,214
Prepaid expenses and other assets
467
47
Accounts payable
(
5,615
)
1,104
Accrued expenses and other liabilities
(
3,779
)
8,935
Lease liabilities
156
169
Deferred revenue
5,146
117
Net cash provided by (used in) operating activities
339
(
3,992
)
Cash flow from financing activities:
Issuance of common stock to Dragasac as consideration for inducement agreement
-
2,460
Repayments of short-term debt - unaffiliated
(
7,042
)
-
Payment of SEPA commitment fee
(
300
)
-
Proceeds from merchant cash receivable
-
891
Redemption of preferred stock
(
300
)
-
Repayment of merchant cash advance
-
(
221
)
Repayments of short-term debt - related parties
-
(
77
)
Proceeds from June 2026 Promissory Note
1,000
-
Proceeds from Gordon Promissory Note
325
-
Tax withholding on vesting of restricted stock units
-
(
112
)
Proceeds from the sale of common stock in PIPE Offering
-
1,010
Net cash (used in) provided by financing activities
(
6,317
)
3,951
Net decrease in cash, cash equivalents and restricted cash
(
5,978
)
(
41
)
Cash, cash equivalents and restricted cash at beginning of period
16,372
10,977
Cash, cash equivalents and restricted cash at end of period
$
10,394
$
10,936
Supplemental disclosure of cash flow information:
Cash paid for income taxes
$
-
$
-
Supplemental non-cash investing and financing activities:
NexGel convertible promissory note issued to settle liabilities with Helena and Sequence
$
5,000
$
-
Conversion of Series A Preferred Stock to Promissory Note
1,942
-
Change in fair value of contingent consideration
-
650
Issuance of common stock in connection with note payable conversion
-
922
Reclassification of warrants from liability classified to equity classified
-
501
Deemed dividend relating to inducement of Dragasac warrants
-
64
The
accompanying notes are an integral part of these condensed consolidated financial statements.
4
Celularity
Inc.
Notes
to Unaudited Condensed Consolidated Financial Statements
(in
thousands, except share and per share amounts)
1.
Business
Celularity
Inc., (“Celularity” or the “Company” and formerly known as GX Acquisition Corp), was incorporated in
Delaware on August 24, 2018. The Company’s wholly-owned subsidiaries include, among others, Celularity, LLC, CariCord, Inc.
and Anthrogenesis, LLC. Celularity is a longevity-focused regenerative and cellular medicine company developing and manufacturing
investigational cellular therapy candidates derived from the postpartum placenta. Celularity leverages the placenta’s unique
biology, immunologic properties and scalable availability to develop therapeutic solutions targeting fundamental mechanisms of aging
and age-related disease to address age-related diseases, tissue degeneration and declines in human function. Its business includes
cellular therapy research and development, manufacturing and related services, biobanking services operated primarily under the
Lifebank brand, and biomaterials activities conducted through applicable licensing, manufacturing, supply and distribution
arrangements. The Company’s strategy is to concentrate resources on its cellular therapy platform and manufacturing
capabilities while pursuing revenue-generating opportunities through third-party services, biobanking and retained biomaterials
activities.
Going
Concern
In
accordance with ASC 205-40, Presentation of Financial Statements — Going Concern, management evaluates whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern
within one year after the date these condensed consolidated financial statements are issued. Management has evaluated the Company’s
current financial position, liquidity, capital resources, and projected cash flows and has determined that there is substantial doubt
about the Company’s ability to continue as a going concern.
The
Company has generally not been profitable and since its inception, the Company has incurred significant operating losses and used net
cash for operating activities. During the six months ended June 30, 2026, the Company recorded net income of $
1,580
. Net cash provided
by operating activities was $
339
for the six months ended June 30, 2026, which included $
12,159
of proceeds from the sale of New Jersey
net operating loss carryforwards; excluding those proceeds, operating activities used net cash. As of June 30, 2026, the Company had
an accumulated deficit of $
989,903
and had a working capital deficit of $
53,290
. The Company needs to secure additional financing however
there is no assurance that financing can be raised or at acceptable terms. These factors indicate the Company may be unable to meet its
obligations as they become due over the next 12 months or sooner and continue as a going concern.
The
Company has historically funded operations through sales of products and services, alongside equity and debt securities financings from
both public and private investors. Based on the Company’s current cash burn rate, existing cash on hand is insufficient to fund
operations, meet payroll and satisfy contractual debt obligations for the 12-month period following the issuance date of these condensed
consolidated financial statements.
In
early 2026, the Company implemented operational restructuring initiatives aimed at reducing overhead costs, streamlining headcount, and
reallocating resources toward core commercial opportunities. Revenue growth, which is not certain, will be required to achieve break-even
operating cash flows on a monthly, quarterly or annual basis.
On
September 24, 2026, the Company announced an initial closing that generated $
8.8
million in net cash proceeds from a private
placement of senior secured convertible notes and warrants. The closing is part of a broader recapitalization plan contemplating up to
$
25.0
million in new cash investment, which encompasses the $
10.0
million initial funding, plus a potential additional $
15.0
million of funding.
The transaction also provides for the restructuring of approximately $
3.0
million in existing
indebtedness, incremental to the $
25.0
million investment. The terms of the original $
3.0
million note were modified to conform to the structure of the
new notes issued, which significantly extended the maturity from December 31, 2026 to December 31, 2028.
Management
is also actively seeking additional capital through public or private equity offerings, debt financings, strategic collaborations, or
other financing transactions. However, these plans are not fully committed, are subject to market conditions, and remain outside of the
Company’s control. Accordingly, management cannot conclude that it is probable these plans will be successfully implemented or
that, if implemented, they will alleviate the substantial doubt.
5
On June 9, 2026, the Company received a notice from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that it was not in
compliance with Nasdaq Listing Rule 5550(b)(2) due to its market value of listed securities falling below the $
35
million threshold for 30 consecutive business days. Nasdaq provided the Company until December 7, 2026 to regain compliance with
this requirement. On July 23, 2026, Nasdaq additionally notified the Company of non-compliance with the $
1.00
minimum bid price requirement after its closing bid price remained below that threshold for 30 consecutive business days. Nasdaq
provided the Company until January 19, 2027 to regain compliance with the minimum bid price requirement. On August 21, 2026, the
Company received a notice from Nasdaq indicating that it remained out of compliance with the timely filing requirement under Nasdaq
Listing Rule 5250(c)(1) due to its failure to timely file its Form 10-Q for the period ended June 30, 2026. The Company submitted a compliance plan to Nasdaq on
September 3, 2026. Any extension granted by Nasdaq would extend no later than November 16, 2026.
To
regain compliance with the market value and minimum bid price requirements, the Company must satisfy the applicable threshold for at
least 10 consecutive business days within the respective compliance period, subject to Nasdaq’s discretion to require a longer
period. On September 11, 2026 the Company received written confirmation from Nasdaq that it has regained compliance with these requirements.
While the Company is taking steps to regain compliance with all applicable Nasdaq rules, there can be no assurance that it will do so
within the applicable periods, and failure to do so could result in the delisting of the Company’s common stock. Delisting could
severely impair the liquidity and market value of the Company’s common stock and significantly restrict its ability to raise additional
capital.
If
the Company is unable to secure sufficient additional capital or generate positive cash flows from operations to satisfy its obligations
as they become due over the next 12 months, including the repayment or refinancing of outstanding indebtedness, management will be forced
to pursue strategic alternatives. These alternatives may include, but are not limited to:
●
Severely curtailing or
ceasing commercial and research operations;
●
Monetizing or selling core
intellectual property and operating assets;
●
Completing a merger or
sale of the business to a strategic or financial partner; or
●
Seeking relief under the
U.S. Bankruptcy Code or entering into an out-of-court liquidation or assignment for the benefit of creditors.
The
combination of recurring operating losses, working capital deficits, insufficient cash reserves, debt maturities, and Nasdaq non-compliance
status raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these
financial statements are issued. The accompanying condensed consolidated financial statements have been prepared on a going concern basis,
which assumes the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements
do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification
of liabilities that might be necessary should the Company be unable to continue as a going concern.
2.
Summary of Significant Accounting Policies
Basis
of Presentation
The
Company’s unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally
accepted in the United States (“GAAP”) and in accordance with the U.S. Securities and Exchange Commission’s (“SEC”)
rules for the presentation of interim financial statements, which permit certain disclosures to be condensed or omitted. These financial
statements should be read in conjunction with the Company’s annual financial statements as of and for the year ended December 31,
2025, included in the Annual Report on Form 10-K. The unaudited condensed consolidated financial statements include the accounts of wholly
owned subsidiaries, after elimination of intercompany accounts and transactions. The unaudited condensed consolidated financial information
presented herein includes all financial information that, in the opinion of management, is necessary for a fair statement of consolidated
financial position, results of operations and cash flows for the periods presented.
6
Use
of Estimates
The
preparation of the Company’s condensed consolidated financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed
consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates
and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, assumptions related to
the Company’s goodwill and intangible asset impairment assessments, determination of incremental borrowing rates, accrual of research
and development expenses, and the valuations of inventory, contingent consideration, short-term debt, stock options and stock warrants.
The Company based its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes
to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances,
facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those
estimates.
Fair
Value Measurements
Certain
assets and liabilities of the Company are presented at fair value. Fair value is defined as the exchange price that would be received
for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability
in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize
the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities presented at fair value are
classified and disclosed in the following hierarchy:
●
Level 1 — Observable quoted prices in active
markets for identical assets or liabilities.
●
Level 2 — Observable
inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices
in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated
by observable market data.
●
Level 3 — Unobservable
inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities,
including pricing models, discounted cash flow methodologies and similar techniques.
Revenue
Recognition
The
Company generates revenue from (i) sales of degenerative disease products Biovance
®
, Biovance 3L
®
, CentaFlex
®
,
and Interfyl
®
(ii) sales of biobanking umbilical cord and placental blood and tissue collection, processing and storage
services and (iii) license, royalty and other arrangements. See the unaudited condensed consolidated statements of operations for net
sales by category.
Concentrations
of Credit Risk and Significant Customers and Allowance for Doubtful Accounts
Financial
instruments that subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and restricted cash,
and accounts receivable. The Company generally maintains balances in various operating accounts at financial institutions that management
believes to be of high credit quality, in amounts that may exceed federally insured limits. The Company has not experienced any losses
related to its cash and cash equivalents or restricted cash and does not believe that it is subject to unusual credit risk beyond the
normal credit risk associated with commercial banking relationships.
The
Company is subject to collection risk from trade accounts receivable related to both degenerative disease product sales and biobanking
services. The Company provides for estimates of uncollectible accounts receivable based on historical collection experience, the age
of accounts receivable balances, and the credit quality of its customers. All product and services customers are in the United States.
As of June 30, 2026, two of the Company’s customers, each of which individually comprised at least 10%, represented an aggregate
33
% of the Company’s outstanding gross accounts receivable. As of December 31, 2025, two of the Company’s customers, each
of which individually comprised at least 10%, represented an aggregate
37
% of the Company’s outstanding gross accounts receivable.
7
During
the six months ending June 30, 2026, the Company had three customers, each of which individually comprised at least 10%, provide for
an aggregate
49.8
%
of revenue. During the six months ending June 30, 2025, the Company had two customers, each of which individually comprised at least
10%, provide for an aggregate
45.0
%
of revenue. During the three months ending June 30, 2026, the Company had two customers, each of which individually comprised at
least 10%, provide for an aggregate
53.5
% of revenue. During the three months ending June 30, 2025, the Company had two customers,
each of which individually comprised at least 10%, provide for an aggregate
42.9
% of revenue.
Equity
Method Investments
Until
June 3, 2026, the Company accounted for its investment in Defeye, Inc. using the equity method. Defeye’s shares are not
publicly traded and their fair value is not readily determinable. After June 3, 2026, the Company used the measurement alternative
under ASC 321; the investment was recorded at cost, adjusted for observable price changes in orderly transactions for the same or
similar securities of Defeye. In the fourth quarter of 2025, the Company determined that the fair value of the investment was fully
impaired due to uncertain market prospects and was expensed. On June 3, 2026 the Company and Defeye entered into a Letter Agreement
in which Celularity transferred back to Defeye
3,910,706
shares of Defeye Series Seed-2 Preferred Stock. As a result of the Letter Agreement, the Company lost significant influence in
Defeye and discontinued the equity method of accounting. Refer to
Note 9
– Investments
– Equity Securities
for additional information.
Net
Income (Loss) per Share
Basic
net income (loss) per share of common stock is computed by dividing net income (loss) attributable to common stockholders by the weighted-average
number of shares of common stock outstanding during each period. Diluted net income (loss) per share of common stock includes the effect,
if any, from the potential exercise or conversion of securities, such as redeemable convertible preferred stock, convertible debt, stock
options, restricted stock units and warrants, which would result in the issuance of incremental shares of common stock. The dilutive
effect of stock options, restricted stock units and warrants is computed using the treasury stock method, and the dilutive effect of
convertible preferred stock and convertible debt is computed using the if-converted method. However, potential common shares are
excluded if their effect is anti-dilutive. The Company uses the two-class method, because certain warrants are participating securities
that participate in dividends with Class A common stock for net loss per share. Under the two-class method, undistributed earnings are
allocated between Class A common stock and the participating warrants based on their respective rights to receive dividends. Net losses
are not allocated to the participating warrants because the holders do not have a contractual obligation to share in the Company’s
losses; accordingly, the net (loss) for the three and six months ended June 30, 2025 was not allocated to the warrants.
The
computation of basic and diluted net income (loss) per share for the three months ended June 30, 2026 and 2025 was as follows:
Three Months Ended June 30,
2026
2025
Numerator:
Net income (loss)
$
706
$
(
24,524
)
Earnings allocated to participating warrants
(
160
)
-
Net income (loss) allocated to common shareholders
$
546
$
(
24,524
)
Denominator:
Weighted-average shares outstanding - basic
29,204,376
24,020,193
Effect of dilutive securities:
Restricted stock units
140,288
-
Weighted-average shares outstanding - diluted
29,344,664
24,020,193
Net income (loss) per share:
Basic
$
0.02
$
(
1.02
)
Diluted
$
0.02
$
(
1.02
)
8
The
computation of basic and diluted net income (loss) per share for the six months ended June 30, 2026 and 2025 was as follows:
Six Months Ended June 30,
2026
2025
Numerator:
Net income (loss)
$
1,580
$
(
44,278
)
Earnings allocated to participating warrants
(
359
)
-
Deemed dividend relating to inducement of Dragasac warrants
-
(
64
)
Net income (loss) allocated to common shareholders
$
1,221
$
(
44,342
)
Denominator:
Weighted-average shares outstanding - basic
29,136,603
23,775,535
Effect of dilutive securities:
Restricted stock units
212,326
-
Weighted-average shares outstanding - diluted
29,348,929
23,775,535
Net income (loss) per share:
Basic
$
0.04
$
(
1.86
)
Diluted
$
0.04
$
(
1.86
)
The
following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of Class A common
stock outstanding as they would be anti-dilutive:
June 30,
2026
2025
Stock options
3,848,739
4,149,592
Restricted stock units
-
558,530
Market condition stock units
28,665
—
Warrants
25,774,577
11,633,302
Convertible debt
1,885,542
972,094
Total
31,537,523
17,313,518
Segment
Information
The
Company’s Chief Executive Officer is the chief operating decision maker and manages Company operations in
three
distinct business
segments: Cell Therapy, BioBanking and Degenerative Disease. Assets are not tracked at a segment level.
Allowance
for Credit Losses
The
Company recognizes credit losses based on forward-looking current expected credit losses. The Company makes estimates of expected credit
losses based upon its assessment of various factors, including historical collection experience, the age of accounts receivable balances,
credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and
other factors that may affect its ability to collect from customers.
Recently
Issued Accounting Pronouncements
The
Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting
pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change
to its financial statements.
9
In
November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
2024-03,
Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):
Disaggregation of Income Statement Expenses
, as subsequently amended by ASU 2025-01 to clarify the effective date (“ASU 2024-03”), which is
intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation,
depreciation and amortization) included in certain expense captions presented on the consolidated statement of operations and
comprehensive loss. The guidance in this ASU is effective for fiscal years beginning after December 15, 2026, and interim periods
within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1)
prospectively to financial statements issued for periods after the effective date of this ASU or (2) retrospectively to all prior
periods presented in the consolidated financial statements. The Company is currently evaluating the impacts of the adoption of ASU
2024-03 on the consolidated financial statements.
In
May 2025, the FASB issued ASU 2025-04,
Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with
Customers (Topic 606): Clarifications to share-based consideration payable to a customer
(“ASU 2025-04”). This
update provides guidance on accounting for share-based payment awards granted to customers in conjunction with revenue arrangements.
The ASU removes the option to elect a policy to account for forfeitures as they occur, instead requiring entities to estimate
forfeitures. The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within those
fiscal years, with early adoption permitted. The Company is currently evaluating the impacts of the adoption of ASU 2025-04 on the
consolidated financial statements.
In
September 2025, the FASB issued ASU No. 2025-07,
Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers
(Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration From a Customer in a
Revenue Contract
(“ASU 2025-07”). ASU 2025-07 introduces guidance for applying derivative accounting to contracts that include features tied to
the operations or activities of one of the parties to the contract. It also aims to reduce diversity in how share-based payments are
accounted for in revenue contracts. ASU 2025-07 will be effective for the annual periods beginning after December 15, 2026 with
early adoption permitted. The Company is currently evaluating the potential impact that the adoption of this standard will have on
the consolidated financial statements.
3.
Asset Purchases and Sales
Sequence
Asset Purchase
I
n
October 2024, the Company acquired Sequence LifeScience, Inc. (“Sequence”) Rebound™ full thickness placental-derived
allograft matrix product and related intangible assets in exchange for $
5,500
, comprised of cash payments totaling $
1,500
and monthly
milestone payments totaling $
4,000
. A contingent liability was recorded for future milestone payments. Transaction costs were not significant.
The fair value of the net assets acquired exceeded the initial cash payments for the purchase and the value of intangible assets acquired
were reduced accordingly. Milestone payments are calculated at
20
% of net related product sales collected from customers during the preceding
calendar month and
milestone payments made reduce the contingent consideration liability.
As
of December 31, 2025, the accrued milestone payments were $
3,127
(
none
as of June 30, 2026).
On
April 14, 2026, Sequence and Celularity entered into a Settlement Agreement and Mutual General Release to settle and resolve all claims,
disputes and differences existing between both parties arising out of, or in connection with the Asset Purchase Agreement dated October
9, 2024 and related supply agreement. Refer to
Note 13 – Commitments and Contingencies
for additional information.
License
In
April 2026, the Company sold NexGel, Inc. (“NexGel”) an exclusive, transferable and sublicensable license to develop and
commercialize certain degenerative disease products in exchange for $
13.3
million. NexGel paid the Company $
4.8
million cash at closing
and $
0.6
million cash in the 2
nd
quarter of 2026, which was contingent on the Company filing its 2025 Report on Form 10-K,
NexGel assumed the obligation to pay sales commissions of $
2.9
million earned by and owed to certain Celularity employees, and NexGel
issued Celularity a $
5.0
million 18-month convertible note which, subject to certain conditions, is convertible into NexGel common stock.
The note was simultaneously split into two notes of $
2.5
million each, one of which was issued to Helena Global Investment Opportunities,
Ltd (“Helena”) as partial satisfaction of amounts due Helena and one of which was issued to Sequence LifeSciences, Inc.
(“Sequence”) as partial satisfaction of amounts due Sequence, see
Note 13 - Commitments and Contingencies
for additional
information on these settlements.
The
NexGel license agreement entitles the Company to earn up to $
20.0
million in milestone payments, with the first milestone payment of
$
2.5
million due to the Company upon the earlier of NexGel achieving $
25.0
million in net sales or 15 months, provided that net sales
of at least $
15.0
million have been achieved. As of June 30, 2026, NexGel has not achieved any of the milestones.
Concurrent with the NexGel license agreement, the Company entered into a Contract Manufacturing Agreement with NexGel, whereby it will
act as an independent contractor of NexGel providing manufacturing and other services. Refer to Note 17 – License and Distribution
Agreements for additional information on the license arrangement with NexGel.
10
4.
Fair Value of Financial Assets and Liabilities
The
following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring
basis and indicate the level of the fair value hierarchy used to determine such fair values:
Fair Value Measurements as of June 30, 2026
Level 1
Level 2
Level 3
Total
Liabilities:
Acquisition-related contingent consideration obligations
$
-
$
-
$
1,413
$
1,413
December 2025 Convertible Note
-
-
2,862
2,862
Warrant liability - July 2023 Registered Direct Warrants
-
-
188
188
Warrant liability - April 2023 Registered Direct Warrants
-
-
154
154
Warrant liability - May 2022 PIPE Warrants
-
-
81
81
Warrant liability - Public Warrants
144
-
-
144
$
144
$
-
$
4,698
$
4,842
Fair Value Measurements as of December 31, 2025
Level 1
Level 2
Level 3
Total
Liabilities:
Acquisition-related contingent consideration obligations
$
—
$
—
$
1,413
$
1,413
December 2025 Convertible Note
—
—
2,687
2,687
December 2025 Promissory Note
—
—
6,876
6,876
Warrant liability - July 2023 Registered Direct Warrants
—
—
534
534
Warrant liability - April 2023 Registered Direct Warrants
—
—
483
483
Warrant liability - May 2022 PIPE Warrants
—
—
240
240
Warrant liability - Public Warrants
288
—
—
288
Bifurcated embedded derivative - Series A Preferred Stock
—
—
92
92
288
$
—
$
12,325
$
12,613
During
the three and six months ended June 30, 2026 and 2025, there were no transfers between Level 1, Level 2 and Level 3. The carrying values
of other current liabilities approximate fair value in the accompanying condensed consolidated financial statements due to the short-term
nature of those instruments.
Valuation
of Contingent Consideration
The
fair value measurement of the contingent consideration obligations is determined using Level 3 inputs and is based on a probability-weighted
income approach. The measurement is based upon unobservable inputs supported by little or no market activity based on the Company’s
own assumptions.
The
following table presents a reconciliation of contingent consideration obligations measured on a recurring basis using Level 3 inputs
for the periods ended June 30, 2026 and December 31, 2025:
Balance as of
January 1,
2026
Net
transfers
in to (out of)
Level 3
Purchases,
settlements
and other
net
Fair value
adjustments
Balance
as of June 30,
2026
Liabilities:
Acquisition-related contingent consideration obligations
$
1,413
$
—
$
—
$
—
$
1,413
Balance as of
January 1,
2025
Net
transfers
in to (out of)
Level 3
Purchases,
settlements
and other
net
Fair value
adjustments
Balance as of December 31, 2025
Liabilities:
Acquisition-related contingent consideration obligations
$
1,413
$
—
$
—
$
—
$
1,413
11
The
fair value of the liability to make potential future milestone and earn-out payments was estimated by the Company at each reporting date
based, in part, on the results of a discounted cash flow analysis based on various assumptions, including
the probability of achieving specified events, discount rates, and the period of time until earn-out payments are payable and the conditions
triggering the milestone payments are met. The actual settlement of contingent consideration could differ from current estimates based
on the actual occurrence of these specified events.
At
each reporting date, the Company revalues the contingent consideration obligation to estimated fair value and records changes in fair
value as income or expense in the Company’s consolidated statements of operations and comprehensive loss. Changes in the fair value
of the contingent consideration obligations may result from changes in discount periods and rates, changes in the timing and amount of
revenue estimates and changes in probability assumptions with respect to the likelihood of achieving the various contingent consideration
obligations. The Company has classified the contingent consideration as a long-term liability in the condensed consolidated balance sheets
as of June 30, 2026 and December 31, 2025.
Valuation
of Short-Term Debt –Unaffiliated
The
following table presents a reconciliation of short-term debt obligations measured on a recurring basis using Level 3 inputs for the year
ended December 31, 2025 and six months ended June 30, 2026:
Liabilities:
Balance as of January 1, 2026
$
9,563
Repayment of December 2025 Promissory Note
(
7,042
)
Fair value adjustment through earnings
341
Balance as of June 30, 2026
$
2,862
Liabilities:
Balance as of January 1, 2025
$
2,485
Issuance of December 2025 Convertible Note
2,804
Issuance of December 2025 Promissory Note
6,861
Conversion of unsecured senior convertible note into common shares
(
922
)
Settlement of Yorkville Convertible Promissory Note in connection with issuance of common stock
(
3,469
)
Fair value adjustment through earnings
1,809
Fair value adjustment through accumulated other comprehensive income
(
5
)
Balance as of December 31, 2025
$
9,563
December
2025 Convertible Note and December 2025 Promissory Note
On
December 19, 2025, the Company entered into a series of definitive agreements with an investor whereby the company issued the investor
warrants, a senior secured non-convertible promissory note (the “December 2025 Promissory Note”) and a secured convertible
note financing (the “December 2025 Convertible Note”).
Due
to certain embedded features within the December 2025 Promissory Note and December 2025 Convertible Note, the Company elected to account
for both notes including the embedded features at fair value at inception. Subsequent changes in fair value are recorded as a component
of non-operating loss in the consolidated statement of operations and comprehensive loss.
The
fair values of the December 2025 Promissory Note and December 2025 Convertible Note are based on a Probability Weighted Expected Return
Method (“PWERM”) based on various inputs and assumptions, including the likelihood of various possible scenarios, and a yield
rate. The fair value of the December 2025 Convertible Note was $
2,862
and $
2,687
as of June 30, 2026 and December 31, 2025. The fair
value of the December 2025 Promissory Note was $
6,876
as of December 31, 2025. The December 2025 Promissory Note was repaid in full in
February 2026 for $
7,042
.
Significant
inputs for the December 2025 Promissory Note valuation model were as follows:
December 31, 2025
Likelihood of optional redemption
70.00
%
Likelihood of optional redemption upon default
5.00
%
Likelihood of default
5.00
%
Yield
15.09
%
12
Significant
inputs for the December 2025 Convertible Note valuation model were as follows:
June 30, 2026
December 31, 2025
Likelihood of optional conversion
20.00
%
20.00
%
Likelihood of dissolution
15.00
%
15.00
%
Yield
23.01
%
14.98
%
Valuation
of Warrant Liability
The
warrant liability on June 30, 2026, is comprised of the fair value of warrants to purchase shares of Class A common stock. The Public
Warrants are recorded at fair value based on the period-end publicly stated close price, which is a Level 1 input. The Registered Direct,
and PIPE Warrants are recorded at their respective closing date fair values based on a Black-Scholes option pricing model that utilizes
inputs for: (i) the value of the underlying stock, (ii) the exercise price, (iii) the risk-free rate, (iv) the volatility of the underlying
stock, (v) the dividend yield of the underlying stock and (vi) maturity, which are Level 3 inputs. The Black-Scholes option pricing model’s
primary unobservable input utilized in determining the fair values of the warrant liabilities is the expected volatility of the Class
A common stock. The Company estimates expected volatility based solely on the historical volatility of its common stock. The risk-free
interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the estimated remaining
term of the warrants. Inputs to the Black-Scholes option pricing models for the warrants are updated each reporting period to reflect
fair value.
The
following table presents a reconciliation of the warrant liabilities measured on a recurring basis using Level 3 inputs for the six months
ended June 30, 2026:
Warrant liabilities:
Balance as of January 1, 2026
$
1,257
Gain recognized in earnings from change in fair value
(
834
)
Balance as of June 30, 2026
$
423
5.
Inventory
Inventory
consisted of the following:
June 30, 2026
December 31, 2025
Raw materials
$
42
42
Work in progress
1,369
1,488
Finished goods
3,232
3,987
Inventory, gross
4,643
5,517
Less: inventory reserves
(
2,000
)
(
2,000
)
Inventory, net
$
2,643
3,517
Balance Sheet Classification:
Inventory
$
718
571
Inventory, net of current portion
1,925
2,946
$
2,643
3,517
Inventory,
net of current portion includes inventory expected to remain on-hand beyond one year from each balance sheet date presented.
13
6.
Prepaid Expenses and Other  Current Assets
Prepaid
expenses and other current assets consisted of the following:
June 30, 2026
December 31, 2025
Prepaid clinical expenses
$
211
$
221
Prepaid insurance expense
21
477
Other
231
222
Total
$
463
$
920
7.
Property and Equipment, Net
Property
and equipment, net consisted of the following:
June 30, 2026
December 31, 2025
Leasehold improvements
$
73,211
$
73,211
Laboratory and production equipment
14,093
14,093
Machinery, equipment and fixtures
7,163
7,163
Property and equipment
94,467
94,467
Less: Accumulated depreciation and amortization
(
41,084
)
(
38,670
)
Property and equipment, net
$
53,383
$
55,797
Depreciation
and amortization expense was $
1,184
and $
1,462
for the three months ended June 30, 2026, and 2025, respectively. Depreciation and amortization
expense was $
2,414
and $
2,928
for the six months ended June 30, 2026, and 2025, respectively.
8.
Goodwill and Intangible Assets, Net
Goodwill
There
were no goodwill impairments recognized during the three and six months ended June 30, 2026 and 2025. The carrying value of goodwill,
all of which is assigned to the Company’s BioBanking reporting unit, was $
7,347
at both June 30, 2026 and December 31, 2025.
Intangible
Assets, net
Intangible
assets, net consisted of the following:
June 30, 2026
December 31, 2025
Estimated
Useful Lives
Amortizable intangible assets:
Developed technology
$
16,810
16,810
11
–
16
years
Customer relationships
2,413
2,413
10
years
Trade names & trademarks
570
570
10
–
13
years
Reacquired rights
4,200
4,200
6
years
23,993
23,993
Less accumulated amortization:
Developed technology
(
10,650
)
(
10,068
)
Customer relationships
(
2,342
)
(
2,229
)
Trade names & trademarks
(
467
)
(
440
)
Reacquired rights
(
4,200
)
(
4,200
)
(
17,659
)
(
16,937
)
Amortizable intangible assets, net
6,334
7,056
Non-amortized intangible assets
Acquired IPR&D product rights
-
700
indefinite
$
6,334
7,756
14
Amortization
expense for intangible assets was $
354
and $
372
for the three months ended June 30, 2026 and 2025, respectively. Amortization expense
for intangible assets was $
722
and $
740
for the six months ended June 30, 2026 and 2025, respectively.
During
the second quarter of 2026, the Company derecognized $
0.7
million in acquired IPR&D product rights intangible assets upon reaching
its settlement with Sequence. Under this settlement, the Company granted Sequence a fully paid, royalty-free, irrevocable, perpetual,
transferrable, worldwide sublicense with respect to all of the assets properties, contractual rights, goodwill, going concern value,
rights and claims licensed to or otherwise controlled by the Company related to Rebound Matrix Placental-Derived Allograft. Refer to
Note 13 – Commitments and Contingencies
for additional information.
No
impairment charges were recorded on intangible assets for the three and six months ended June 30, 2025.
Aggregate
amortization expense for each of the five succeeding years and thereafter related to intangible assets held as of June 30, 2026 is estimated
as follows:
2026
$
634
2027
1,258
2028
1,208
2029
1,155
2030
1,155
Thereafter
924
$
6,334
9.
Investments – Equity Securities
In
August 2025, the Company purchased
7,198,630
shares of Defeye Inc.’s (“Defeye”) Series Seed-2 Preferred Stock in exchange
for $
2,890
of product purchase credits pursuant to a supply and distribution agreement. The fair value of the consideration the product
purchase credits was recorded as deferred revenue and the Company is obligated to deliver product to Defeye when ordered.
In
October 2025, the Company entered into a license agreement (the “Defeye License Agreement”) with Defeye under which the Company
granted Defeye an exclusive license to certain intellectual property. In consideration for the license, the Company received
7,471,980
additional shares of Defeye Series Seed Preferred Stock. As a result of the additional equity interests obtained under the Defeye License
Agreement, the Company’s cumulative ownership and associated rights provide the Company with the ability to exercise significant
influence over Defeye’s operating and financial policies. In the fourth quarter of 2025, the Company determined that the fair value
of the investment was fully impaired due to uncertain market prospects and the preferred stock value was expensed.
On
June 3, 2026, the Company entered into a binding Letter Agreement (the “Defeye Letter Agreement”) with Defeye to resolve
outstanding commercial disputes. Under the terms of the Defeye Letter Agreement, product credits were permitted to be applied to product
invoiced through May 6, 2026, after which any remaining unused credits were permanently waived and extinguished. As part of the settlement,
the Company granted Defeye a defined discount of up to $
0.3
million.
The
Defeye Letter Agreement also established parameters for an approved secondary back-up manufacturer in the event of supply shortfalls,
under which Defeye must pay the Company a variable fee based on the greater of a defined percentage of the contractual price or a defined
percentage of the cost savings for units sourced from the secondary manufacturer.
The Company also returned
3,910,706
shares of Defeye Series Seed-2 Preferred Stock pursuant to the Defeye Letter Agreement, reducing
its voting interest below
20
%. Consequently, the Company determined it lost significant influence over DefEYE and discontinued equity
method accounting as of June 3, 2026.
10.
Accrued Expenses and Other Current Liabilities
Accrued
expenses and other current liabilities consisted of the following:
June 30, 2026
December 31, 2025
Accrued clinical trial expense
$
189
$
189
Accrued professional fees
1,262
488
Accrued wages, bonuses, commissions, and vacation
2,452
6,383
Accrued compliance fee
17,164
16,550
Accrued vendor expenses
815
1,417
Royalty
-
3,127
Vendor settlements
1,142
1,802
Other
1,870
2,618
Total
$
24,894
$
32,574
15
11.
Debt
The
following is a summary of the Company’s indebtedness:
June 30, 2026
December 31, 2025
Short-term debt - unaffiliated:
December 2025 Convertible Note (measured at fair value)
$
2,862
$
2,687
June 2026 Promissory Note
1,000
-
December 2025 Promissory Note (measured at fair value)
-
6,876
Total short-term debt - unaffiliated
3,862
9,563
Debt - related parties:
CEO promissory note (See Note 21)
4,780
4,440
Gordon Promissory Note
325
-
Total debt
$
8,967
$
14,003
Balance sheet classification:
Short-term debt - unaffiliated
$
3,862
$
9,563
Short-term debt – related parties
5,105
4,440
$
8,967
$
14,003
December
2025 Promissory Note and December 2025 Convertible Note
As
of June 30, 2026, the December 2025 Convertible Note had a fair value of $
2,862
and a principal balance of $
3,000
and is presented within short-term debt – unaffiliated on the consolidated balance sheets. The December 2025 Promissory Note
was repaid in full in February 2026 for $
7,042
,
using proceeds from the sale of State of New Jersey net operating loss carryforwards. During the six months ended June 30, 2026, the
Company recorded a change in fair value of $
175
related to the December 2025 Convertible Note, which is presented within change in fair value of debt in the condensed consolidated
statement of operations. During the six months ended June 30, 2026, the Company recorded a change in fair value of $
166
related to the December 2025 Promissory Note, which is presented within change in fair value of debt in the condensed consolidated
statement of operations.
Helena
Promissory Note
On
April 16, 2026, Helena provided notice to Celularity of a triggering event under the Securities Purchase Agreement dated October 24,
2025. Helena elected to exchange
1,732,084
Series A convertible preferred shares with a stated value of $
1.9
million, plus accrued and unpaid dividends for a convertible promissory note (the “Helena Note”). The maturity date of
the Helena Note was October 16, 2026, or six months from the exchange date.
On
April 17, 2026, Helena delivered to us a notice of event of default (the “Helena Default Notice”) under the Helena Note.
In the Helena Default Notice, Helena asserted that one or more events of default had occurred under the Helena Note, including among
other things, our failure to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended, including becoming
delinquent in its filings. Refer to
Note 13 – Commitments and Contingencies
for additional information.
June
2026 Promissory Note
On
June 29, 2026, the Company entered into a Loan Agreement with the Philip & Daniele Barach Family Trust (the “Lender”),
pursuant to which the Lender provided a term loan to the Company in an aggregate principal amount of $
1,000
(the “June 2026 Promissory
Note”). The June 2026 Promissory Note carries a base interest rate of
4.0
% per annum (increasing to
18.0
% per annum upon the occurrence
and during the continuance of an Event of Default) and matures on the earlier of (i) 30 days after the Closing Date or (ii) the Company’s
receipt of gross proceeds equal to or exceeding $
1,000
from a Subsequent Transaction, as defined in the agreement. The Company may prepay
the Loan in whole or in part at any time without penalty upon three business days’ prior written notice. On September 24, 2026,
Philip A. Barach was added to the Company’s board of directors.
16
Gordon
Promissory Note
On
June 19, 2026, Steven N. Gordon, its Chief Operating Officer was appointed to the Company’s Board of Directors and Mr. Gordon loaned
the Company $
0.3
million to aid working capital needs. The loan is in the form of unsecured promissory note which provides for annual interest at
4
% compounded annually. Principal and accrued interest are payable in a single installment upon the earliest of (i)
June 19, 2027, (ii) consummation of a Qualified Financing or (iii) consummation of a Change of Control, as defined in the note. A Qualified
Financing includes an equity or debt financing transaction, or series of related transactions, generating aggregate gross cash proceeds
of at least $
1,000
. Proceeds are restricted to working capital purposes and may not be used to repay indebtedness. Upon a continuing
event of default, the outstanding principal bears interest at
16
% per annum, compounded annually, subject to applicable law, and the
holder may accelerate repayment.
12.
Lease Agreements
ROU
assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s
obligation to make lease payments arising from the lease. The Company’s lease ROU assets and liabilities are recognized at the
lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments,
the Company uses its incremental borrowing rate based on the information available at the lease commencement date to determine the appropriate
discount rate by multiple asset classes. Variable lease payments that are not based on an index or that result from changes to an index
subsequent to the initial measurement of the corresponding lease liability are not included in the measurement of lease ROU assets or
liabilities and instead are recognized in earnings in the period in which the obligation for those payments is incurred. Lease terms
may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise any such options. Lease
expense is recognized on a straight-line basis over the expected lease term. Rent expense, including related property taxes, was $
1,346
and $
1,317
for the three months ended June 30, 2026 and 2025, respectively. Rent expense, including related property taxes, was $
2,743
and $
2,756
for the six months ended June 30, 2026 and 2025, respectively. These amounts are included as a component of selling, general
and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.
The
components of the Company’s lease costs are classified on its condensed consolidated statements of operations and comprehensive
loss as follows:
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Operating lease cost
$
978
$
977
$
1,955
$
1,955
Variable lease cost
368
340
788
801
Total operating lease cost
$
1,346
$
1,317
$
2,743
$
2,756
The
table below shows the cash and non-cash activity related to the Company’s lease liabilities during the period:
Six Months Ended June 30,
2026
2025
Cash paid related to lease liabilities:
Operating cash flows from operating leases
$
1,763
$
1,726
As
of June 30, 2026, the maturities of the Company’s operating lease liabilities were as follows:
Year ending December 31,
2026 (remaining 6 months)
$
1,763
2027
3,599
2028
3,673
2029
3,746
2030
3,820
Thereafter
77,002
Total lease payments
93,603
Less imputed interest
(
66,549
)
Total
$
27,054
17
As
of June 30, 2026, the weighted average remaining lease term of the Company’s operating lease was
19.75
years, and the weighted average
discount rate used to determine the lease liability for the operating lease was
14.24
%.
13.
Commitments and Contingencies
Indemnification
Agreements
In
the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners
and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from
intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements
with members of its board of directors and its executive officers that will require the Company, among other things, to indemnify them
against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount
of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date,
the Company has not incurred any material costs as a result of such indemnifications. The Company is not currently aware of any indemnification
claims and has not accrued any liabilities related to such obligations in its consolidated financial statements as of June 30, 2026 and
December 31, 2025.
Acquisition-Related
Contingent Consideration
In
connection with the Company’s  acquisition in 2017 of HLI Cellular Therapeutics, LLC and Anthrogenesis, it has
agreed to pay future consideration to the sellers upon the achievement of certain regulatory and commercial milestones. As a result,
the Company recorded $
1,413
as contingent consideration as of June 30, 2026 and December 31, 2025, respectively. Due to the contingent
nature of these milestone and royalty payments, there is a high degree of judgment in the management estimates that determine the fair
value of the contingent consideration. See
Note 4 – Fair Value of Financial Assets and Liabilities
for further discussion.
Legal
Proceedings
Civil
Investigative Demand
The
Company received a Civil Investigative Demand (the “Demand”) under the False Claims Act, 31 U.S.C. § 3729, dated August
14, 2022, from the U.S. Attorney’s Office for the Eastern District of Pennsylvania. The Demand requests documents and information
relating to claims submitted to Medicare, Medicaid, or other federal insurers for services or procedures involving injectable human tissue
therapy products derived from amniotic fluid or birth tissue and includes Interfyl. The Company is cooperating with the request and is
engaged in an ongoing dialogue with the Assistant U.S. Attorneys handling the Demand. The matter is still in preliminary stages and there
is uncertainty as to whether the Demand will result in any liability.
Celularity
Inc. v. Evolution Biologyx, LLC, et al.
On
April 17, 2023, the Company filed a complaint against Evolution Biologyx, LLC, Saleem S. Saab, individually, and Encyte, LLC (collectively,
“Evolution”) in the United States District Court for the District of New Jersey to recover unpaid invoice amounts for the
sale of its biomaterial products in the amount of approximately $
2,350
, plus interest. The claim arose from a September 2021 distribution
agreement between the Company and Evolution. The complaint alleged claims for breach of contract, quasi contract and fraud. Evolution
subsequently filed a counter claim breach of contract, breach of warranty, quasi contract and fraud. On June 9, 2026, with the assistance
of the court, the parties reached a settlement on the major issues that would result in mutual releases without payments by either side.
The agreement is being documented while a minor issue is being negotiated. The Company’s balance of accounts receivable due from
Evolution has been fully reserved within the allowance for doubtful accounts as of June 30, 2026 and December 31, 2025.
TCWGlobal
v. Celularity Inc.
On
March 27, 2024, WMBE Payrolling, Inc., dba TCWGlobal, filed a complaint in the United States District Court for the Southern District
of California alleging a breach of contract and account stated claims relating to a Master Services Agreement dated May 4, 2020, or the
TCWGlobal MSA, for the provision of certain leased workers to perform services on the Company’s behalf. The complaint alleges that
the Company breached the TCWGlobal MSA by failing to make payments on certain invoices for the services of the leased workers. On May
7, 2024, the Company entered into a settlement agreement and mutual release with TCWGlobal whereupon the Company agreed to pay $
516
in
tiered monthly installments, with the last payment due and payable on May 1, 2025, in exchange for a dismissal of the complaint and full
release of all claims. The Company defaulted on the payments in November 2024. On April 21, 2025, the Company was served with a motion
by TCWGlobal to enforce the settlement and enter judgment against the Company in the amount of $
350
, for which the Company has accrued
within accounts payable on the consolidated balance sheet as of December 31, 2025. The Court granted the motion and entered judgment
on June 3, 2025. On February 26, 2026, TCWGlobal and the Company agreed to settle the balance due in one payment of $
100
due by March
3, 2026, and two payments of $
125
due by the end of March 2026 and April 2026, respectively. As of the issuance date of the financial
statements, the Company had made all required payments. This case was settled in April 2026.
18
Hackensack
Meridian Health v. Celularity Inc.
On
March 27, 2025, Hackensack Meridian Health (“HUMC”) filed a complaint in the Superior Court of New Jersey seeking $
948
allegedly
owed by Celularity for costs associated with previous clinical trials. The Company determined that there were significant duplications
in the invoices, so after a joint review of the charges, the parties agreed that the actual amount due from the Company to HUMC is $
668
,
which the Company accrued within accrued expenses and other current liabilities as of June 30, 2026 and December 31, 2025. The Company
defaulted on the payments, and HUMC moved for entry of default judgment that was granted on December 5, 2025.
Shareholder
Derivative Action
On
February 28, 2025, a shareholder derivative action,
Dorrance v. Diamandis
, Index No. 651165/2025, was filed against the Company’s
current and former members of the board of directors as defendants, and the Company, as a nominal defendant, in the Supreme Court of
the State of New York. The Plaintiff alleges that the board members’ compensation of its nonemployee directors was excessive in
2021, 2022 and 2023 and seeks to recoup excessive compensation and set controls on the board’s ability to award themselves excessive
compensation in the future. The derivative action is also seeking payment of an undisclosed amount of attorney’s fees. After extended
negotiations, the Company settled for a payment of $
3
in cash and $
300
worth of restricted stock to plaintiff’s counsel. The settlement
is recorded as legal settlement expense in the condensed consolidated Statement of Operations.
Legal
Settlements
Helena
Settlement
On
April 17, 2026, Helena delivered to the Company a notice of event of default (the “Helena Default Notice”) under the Helena
Note. In the Helena Default Notice, Helena asserted that one or more events of default had occurred under the Helena Note, including
among other things, the Company’s failure to comply with the reporting requirements of the Securities Exchange Act of 1934, as
amended, including becoming delinquent in its filings. The Company believes the asserted reporting default arose from the Company’s
failure to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Under
the Helena Note, if an event of default is not cured within the applicable cure period, which is five business days for this type of
asserted default, Helena may declare due and payable the “Mandatory Default Amount,” which is equal to
115
% of the outstanding
principal amount, accrued interest and all other amounts owing under the Helena Note. In addition, following an event of default, any
outstanding principal balance accrues interest at a rate of
15
% per annum, compounded annually.
Subsequent
to the default notice, the Company entered into a settlement agreement with Helena on May 21, 2026 (the “Helena
Settlement”) to compromise and resolve all triggering events, default notices, and related claims. Under the terms of the
Helena Settlement, the Company agreed to pay Helena $
500
in cash at closing, make five consecutive monthly cash installment payments of $
100
each, totaling an additional $
500
of which $
100
was paid as of June 30, 2026, and assign to Helena a portion of the convertible promissory note totaling $
2,500
to be received from
NexGel. Helena’s release of claims was conditioned on the Company’s satisfaction of specified release conditions. The
Company did not make the installment payments due on July 21 and August 21, 2026 timely. On August 25, 2026, we paid Helena $
200
,
bringing our aggregate cash payments under the settlement agreement to $
800
.
Helena has asserted that the missed payments constitute defaults and that it is entitled to exercise conversion rights under the
Helena Note. The Company dispute Helena’s asserted entitlement to the conversion amount it has demanded. The Company is
engaged in discussions to resolve the matter. For the three and six months ended June 30, 2026, the Company recognized a loss on settlement with Helena of $
2,500
.
Settlement
Agreement with Sequence LifeScience, Inc.
On
April 14, 2026, Sequence and Celularity entered into a Settlement Agreement and Mutual General Release to settle and resolve all claims,
disputes and differences existing between both parties arising out of, or in connection with the Asset Purchase Agreement dated October
9, 2024 (the “APA”) and related supply agreement (the “SLS Settlement”). The SLS Settlement included the following:
.●.Celularity
granted Sequence a fully paid, royalty-free, irrevocable, perpetual, transferrable, worldwide sublicense with respect to:
(i) all of the assets properties, contractual rights, goodwill, going concern value, rights and claims licensed to or otherwise controlled
by Celularity related to Rebound Matrix Placental-Derived Allograft (“Rebound”) and the assets acquired under the APA and
(ii) all of the assets, properties, contractual rights, goodwill, going concern value, rights and claims licensed to or otherwise controlled
by Celularity related to Rebound and the acquired assets developed by or on behalf of Celularity since the APA (including enhancements,
improvements and intellectual property rights) (the “Rebound Sublicense”). Immediately prior to the SLS Settlement, the Company held a $
700
acquired IPR&D product rights intangible asset
related to Rebound.
.●.Celularity
returned Rebound inventory of $
2,856
, which had no carrying value on the Company’s condensed consolidated balance sheet.
19
.●.Celularity
assigned to Sequence the right to receive $
500
of each milestone payment in connection with the Company’s Asset Purchase and Exclusive
License Agreement with NexGel, Inc. (“NexGel”), until Sequence has received the total sum of $
1,500
. NexGel will remit payment
of these milestones directly to SLS.
.●.Celularity
assigned to Sequence a $
2,500
convertible promissory note in connection with the Company’s Asset Purchase and Exclusive License
Agreement with NexGel. The convertible promissory note was issued by NexGel directly to Sequence.
.●.Celularity
assigned to Sequence
the right to manufacture no less than 10% of the manufacturing requirements for each product on behalf of NexGel
for a period of no less than two years, commencing with the completion and successful validation of the technology transfer to Sequence.
.●.Sequence
granted Celularity a full and final release from all prior defaults, unpaid purchase prices under the APA and unpaid transfer prices
under the related supply agreement in the aggregate of $
9,930
.
The
Company evaluated the SLS Settlement under ASC 405-20,
Extinguishment of Liabilities
, derecognizing $
9,930
of accounts payable and accrued liabilities, derecognizing $
2,500
for the assigned NEXGEL note asset, derecognizing $
700
of acquired IPR&D product rights intangible assets and recognizing a net
gain on settlement of $
6,730
within other income (expense) on the condensed consolidated statements of operations for the three and six months ended June 30,
2026.
Letter Agreement with Defeye
On
June 3, 2026, the Company entered into a binding Letter Agreement (the “Defeye Letter Agreement”) with Defeye to resolve
outstanding commercial disputes. Under the terms of the Defeye Letter Agreement, product credits were permitted to be applied to
product invoiced through May 6, 2026, after which any remaining unused credits were permanently waived and extinguished. As part of
the settlement, the Company granted Defeye a defined discount of up to $
300
to be applied against gross product purchases made up to a cap of $
1,500
.
Immediately
prior to execution of the Defeye Letter Agreement, the Company held $
1,472
in
deferred revenue (contract liability) associated with the unused product credits, which was derecognized upon the legal release of
the Company’s performance obligation to deliver future goods. The Company determined that the $
300
defined
discount represents a material right under ASC 606 recorded as deferred revenue for the material right, to be recognized as product
purchases are made. The remaining unused product credits were
recognized as revenue for the three and six months ended June 30, 2026.
The
Defeye Letter Agreement also established parameters for an approved secondary back-up manufacturer in the event of supply shortfalls,
under which Defeye must pay the Company a variable fee based on the greater of a defined percentage of the contractual price or a defined
percentage of the cost savings for units sourced from the secondary manufacturer.
The Company also returned
3,910,706
shares of Defeye Series Seed-2 Preferred Stock pursuant to the Defeye Letter Agreement, reducing
its voting interest below
20
%. Consequently, the Company determined it lost significant influence over DefEYE and discontinued equity
method accounting as of June 3, 2026.
14.
Equity
Warrant
Modifications
Under
the Starr agreement of February 12, 2025, the maturity date of Starr’s $
5
million loan (net of $
100
original issue discount) was
extended to February 15, 2026. The Company also issued Starr a new five-year warrant to purchase
100,000
shares of Class A common stock
at $
1.69
per share. The exercise price of the
75,000
March 2023 Loan Warrants expiring
March 17, 2028
and of the
50,000
June 2023 Warrants
expiring
June 20, 2028
was changed from $
5.90
per share to $
1.69
per share. The Company recorded a $
5,736
loss on debt extinguishment
for the difference between the reacquisition price and the net carrying amount. This loss is reported as other expense in the condensed
consolidated statements of operations and comprehensive loss for the six months ended June 30, 2025.
20
On
February 12, 2025, the Company and RWI agreed to, among other things, an extension of the RWI 2nd Forbearance. Agreement whereby RWI
has agreed not to exercise its rights and remedies upon the occurrence of any default under certain loans owed to RWI and whereby the
maturity date of the foregoing loans is extended to
February
15, 2026
. Pursuant to the RWI binding term sheet,
the Company agreed to (i) use a portion of the proceeds from its next registered public offering to pay RWI approximately $
1,300
,
representing cash interest through January 31, 2025 and (ii) issue to RWI, on July 24, 2025, a new five-year warrant to purchase up to
500,000
shares of its Class A common stock. In addition, the Company
agreed to reprice certain outstanding warrants held by RWI. Management evaluated the binding term sheet with RWI under ASC 470 and determined
that it resulted in a substantial modification of certain loans owed to RWI, meeting the criteria for debt extinguishment accounting.
Accordingly, the Company recognized a loss on extinguishment of debt of $
233
,
representing the difference between the fair value of the newly issued debt and the net carrying amount of the existing debt immediately
prior to the First Amendment. This loss is presented as “Loss on debt extinguishment” in the condensed consolidated statement
of operations for the six months ended June 30, 2025.
15.
Stock-Based Compensation
There
have been no material changes in the Company’s stock-based compensation since December 31, 2025, except as disclosed below. Refer
to
Note 16 – Stock-Based Compensation
in the Company’s 2025 Annual Report on Form 10-K for additional information
and definitions of certain terms used in this Note.
Stock
Option Valuation
Awards
with Service Conditions
The
following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the
grant-date fair value of stock options granted during the six months ended June 30, 2026 and 2025:
Six Months Ended
June 30, 2026
Six Months Ended
June 30, 2025
Risk-free interest rate
3.72
%
4.0
%
Expected term (in years)
6.0
6.0
Expected volatility
98.58
%
97.6
—
108.6
%
Expected dividend yield
0
%
0
%
The
weighted average grant-date fair value per share of stock options granted during the six months ended June 30, 2026 and 2025 was $
0.72
and $
1.89
, respectively.
The
following table summarizes option activity with service and performance conditions under the 2021 Plan and the 2017 Plan:
Options
Weighted Average Exercise Price
Weighted Average Contract Term
Aggregate Intrinsic Value
Outstanding at January 1, 2026
3,941,760
$
24.12
Granted
50,000
$
1.20
Exercised
-
$
-
Forfeited/Expired
(
143,021
)
$
3.61
Outstanding at June 30, 2026*
3,848,739
$
24.58
5.1
$
—
Vested and expected to vest at June 30, 2026
3,848,739
$
24.58
5.1
$
—
Exercisable at June 30, 2026
3,015,442
$
30.83
4.1
$
—
*
Options outstanding on
June 30, 2026 under the 2021 Plan and 2017 Plan were
3,008,631
and
885,108
, respectively, including
45,000
options with performance
and service conditions.
21
The
aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value
of the Company’s Class A common stock for those options that had exercise prices lower than the fair value of Class A common stock.
The
Company recorded stock-based compensation expense relating to option awards with service and performance conditions of $
598
and $
1,344
for the three and six months ended June 30, 2026, respectively. The Company recorded stock-based compensation expense relating to option
awards with service conditions of $
1,729
and $
3,458
for the three and six months ended June 30, 2025, respectively. Unrecognized compensation
cost as of June 30, 2026 for options issued with service conditions was $
790
and will be recognized over an estimated weighted-average
amortization period of
1.15
years.
Restricted
Stock Units (“RSU”)
The
following table summarizes activity related to RSU stock-based payment awards under the 2021 Plan:
Number
of
Shares
Weighted
Average
Grant Date Fair Value
Outstanding at January 1, 2026
643,859
$
4.48
Granted
98,463
$
1.30
Vested*
(
240,659
)
$
7.32
Forfeited
(
45,164
)
$
7.15
Outstanding at June 30, 2026
456,499
2.03
*
During the six
months ended June 30, 2026,
240,659
RSUs vested. Upon settlement of these awards, the Company withheld
5,958
shares to satisfy employee
tax withholding obligations. Accordingly,
234,701
net shares were issued to employees. In addition, there were
125,912
RSUs that vested
in Q1 and Q2 2026 and the related shares of common stock will be issued and delivered subsequent to June 30, 2026. There were also
3,248
RSUs that were issued in Q1 2026 but fully vested in Q4 2025.
The
Company recorded stock-based RSU compensation expense of $
238
and $
712
for the three months ended June 30, 2026 and 2025, respectively.
For the six months ending June 30, 2026 and 2025, stock-based compensation expense relating to RSUs was $
855
and $
1,612
, respectively.
As of June 30, 2026, the total unrecognized RSU compensation expense was $
447
to be recognized over a weighted-average period of
0.59
years.
Stock
Units with Market Condition Vesting
In
July 2023, the Company granted
174,500
market condition stock unit awards (“MCUs”) under the 2021 Plan to certain members
of management. The awards are scheduled to vest over a period of one to three years from the grant date based on continuous employment
and specified market conditions based on the Company’s stock price at the time of vest. As of June 30, 2026, none of the MCUs were
forfeited as a result of the participant’s termination of continuous service. Stock-based compensation expense for the remaining
28,665
MCUs is being recognized over the requisite service period based on the award’s fair value on the grant date. The Company
recorded stock-based compensation expense relating to MCUs of $
8
and $
16
for the three and six months ended June 30, 2026.
Stock-Based
Compensation Expense
Stock-based
compensation expense follows:
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Cost of revenues
$
19
$
76
$
84
$
139
Research and development
24
197
182
386
Selling, general and administrative
801
2,175
1,949
4,560
$
844
$
2,448
$
2,215
$
5,085
16.
Deferred Revenue
Changes
in deferred revenue from contract liabilities follows:
2026
2025
Balance January 1,
$
8,054
$
6,255
Deferral of revenue
(1)
15,828
2,939
Revenue recognized
(
5,682
)
(
2,822
)
Balance June 30,
$
18,200
$
6,372
(1)
As
of June 30, 2026, deferral of revenue includes (i) $
13.3
million in upfront consideration related to the license agreement with NexGel (refer to
Note 17 – License and Distribution Agreements
for additional information) and (ii) $
2.4
million as of June 30, 2026 resulting from payments received in
advance of performance under the biobanking services storage contracts that are recognized as revenue under the contract as performance
is completed. Deferral of revenue includes $
1,208
as of June 30, 2025 resulting from payments received in advance of performance
under the biobanking services storage contracts that are recognized as revenue under the contract as performance is completed.
22
17.
License and Distribution Agreements
There
have been no material changes in the Company’s license and distribution arrangements since December 31, 2025, except as disclosed
below. Refer to
Note 18 – License and Distribution Agreements
in the Company’s 2025 Annual Report on Form 10-K for
additional information and definitions of certain terms used in this Note.
DefEYE
Collaboration and License Agreement
On
October 22, 2025, the Company entered into a license agreement with Defeye pursuant to which the Company granted Defeye an exclusive,
royalty-free, fully paid-up license to develop, manufacture and commercialize certain placental-derived biomaterial products in the field
of ophthalmology (the “Field”) worldwide (excluding certain Asia-Pacific territories). The Defeye License Agreement replaced
and terminated a prior supply and distribution arrangement and provides for exclusive rights to specified products, including Biovance
ocular products and related derivatives, within the defined Field. The Company retains rights outside the Field and in other therapeutic
areas. The agreement also includes provisions related to manufacturing, supply, regulatory support, intellectual property ownership,
and commercialization responsibilities. Pursuant to the Defeye License Agreement, the Company is responsible for manufacturing and supply
of products, subject to potential future manufacturing transfer provisions, and the parties collaborate through governance structures,
including joint oversight of development and commercialization activities.
On
June 3, 2026 the Company and Defeye entered into a Letter Agreement to settle a dispute concerning non-payment of amounts due under the
Defeye License Agreement. Refer to
Note 13 – Commitments and Contingencies
for additional information.
Asset
Purchase and Exclusive License Agreement with NexGel, Inc .
In
April 2026, the Company sold NexGel an exclusive, transferable and sublicensable license to develop and commercialize certain
degenerative disease products in exchange for $
13.3
million. NexGel paid the Company $
4.8
million cash at closing, $
0.6
million cash in the 2
nd
quarter of 2026, which was contingent on the Company filing its 2025 Report on Form 10-K, NexGel
assumed the obligation to pay sales commissions of $
2.9
million earned by and owed to certain Celularity employees, and NexGel was to issue Celularity a $
5.0
million 18-month convertible note which, subject to certain conditions, is convertible into NexGel common stock. The convertible
notes were deemed to be issued at fair value. The note was simultaneously split into two notes of $
2.5
million each, one of which was issued to Helena as partial satisfaction of amounts due Helena
and one of which was issued to Sequence as partial satisfaction of amounts due Sequence. Concurrent with the NexGel license agreement, the Company entered into a Contract Manufacturing Agreement with NexGel,
whereby it will act as an independent contractor of NexGel providing manufacturing and other services.
The
NexGel license agreement entitles the Company to earn up to $
20.0
million in milestone payments, with the first milestone payment of
$
2.5
million due to the Company upon the earlier of NexGel achieving $
25.0
million in net sales or 15 months, provided that net sales
of at least $
15.0
million have been achieved.
The
Company evaluated the transaction under ASC 805,
Business Combinations
, and determined it did not meet the definition of a
business, as no substantive processes or operational workforce were transferred. Accordingly, the license and concurrent contract
manufacturing agreements were evaluated under ASC 606, and determined to represent a single, combined contract with a customer
containing a single bundled performance obligation. The transaction price includes the specific product price as well as the upfront
consideration and milestone and royalty payments, which are recognized over time based on estimated progress of expected output over
the five year initial noncancelable term of the Contract Manufacturing agreement. The upfront consideration of $
13,300
was
recorded as deferred revenue upon closing and is being recognized as revenue over the
5
-year
initial noncancelable term of the contract manufacturing agreement. Milestone (as described above) and royalty (on specific products
ranging from
3
% to
5
% of gross sales) payments based on estimated progress of total expected output of manufactured product
represent variable consideration subject to constraints under ASC 606 and will be recognized as revenue when the underlying sales
targets or commercial events are probable and that a significant reversal of cumulative revenue recognized will not occur when the
uncertainty is subsequently resolved. to be achieved. Pursuant to a settlement agreement executed with Sequence, $
500
of
each milestone payment achieved will be assigned to Sequence, up to $
1,500
,
which will be accounted for as a reduction of future milestone revenue when earned. The concurrent
5-year
sublease of office space
to NexGel is
accounted for as an operating lease under ASC 842,
Leases
, with sublease income recognized on a straight-line basis over the
lease term.
Revenue from the NexGel license and manufacturing agreement was approximately
$
1,500
for the three and six months ended June 30, 2026.
18.
Benefit Plan
The
Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers all employees
who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis.
Matching contributions to the plan may be made at the discretion of the Company’s board of directors. Contributions for the three and six months ended June 30, 2026 and 2025 were minimal.
23
19.
Income Taxes - Sale of Rights to Net Operating Loss Carryforwards
Under
the State of New Jersey Technology Business Tax Certificate Transfer Program, qualifying technology and biotechnology businesses may
sell unused New Jersey net operating loss carryforwards and research and development tax credits to unaffiliated corporate taxpayers.
The Company accounts for proceeds from these sales when the transfer is approved by the New Jersey Economic Development Authority and
the sale is completed, at which point the proceeds are realizable and no longer contingent.
Because
the Company maintains a full valuation allowance against its New Jersey deferred tax assets, no deferred tax asset was recognized for
the carryforwards sold and the sale therefore generated no reversal of a previously recognized asset. The Company presents the proceeds
within other income (expense), net in the condensed consolidated statements of operations, and within cash flows from operating activities
in the condensed consolidated statements of cash flows.
In
February 2026, the Company sold New Jersey net operating loss carryforwards and received net proceeds of $
12,159
. There were no comparable
sales during the six months ended June 30, 2025. The Company’s ability to participate in the program in future periods depends
on continued eligibility, annual program funding and State approval, and no assurance can be given that further sales will be available
or approved.
20.
Segment Information
There
have been no material changes in the Company’s segments since December 31, 2025, except as disclosed below. Refer to
Note 17
– Segment Information
in the Company’s 2025 Annual Report on Form 10-K for additional information and definitions of
certain terms used in this Note.
Financial
information by segment for the three months ended June 30, 2026 and 2025 is as follows:
Three Months Ended June 30, 2026
Cell Therapy
BioBanking
Degenerative Disease
Other
Total
Net revenues
$
1,339
$
652
$
3,441
$
-
$
5,432
Cost of revenues
-
227
2,120
-
2,347
Direct expenses
1,808
164
224
4,772
6,968
Segment contribution
$
(
469
)
$
261
$
1,097
$
(
4,772
)
$
(
3,883
)
Indirect expenses
(a)
354
Loss from operations
$
(
4,237
)
Other income, net
$
4,943
Income before income taxes
$
706
Three Months Ended June 30, 2025
Cell
Therapy
BioBanking
Degenerative
Disease
Other
Total
Net revenues
$
759
$
1,275
$
3,702
$
—
$
5,736
Cost of revenues (excluding amortization of acquired intangible assets)
—
220
5,022
—
5,242
Direct expenses
2,927
387
1,854
10,818
15,986
Segment contribution
$
(
2,168
)
$
668
$
(
3,174
)
$
(
10,818
)
$
(
15,492
)
Indirect expenses
(a)
372
372
Loss from operations
$
(
15,864
)
Other expense, net
$
(
8,660
)
Income before income taxes
$
(
24,524
)
(a)
Comprised
of amortization of intangible assets.
24
Financial
information by segment for the six months ended June 30, 2026 and 2025 is as follows:
Six Months Ended June 30, 2026
Cell Therapy
BioBanking
Degenerative Disease
Other
Total
Net revenues
$
1,832
$
1,902
$
5,544
$
-
$
9,278
Cost of revenues
-
449
3,350
-
3,799
Direct expenses
4,275
407
1,812
12,633
19,127
Segment contribution
$
(
2,443
)
$
1,046
$
382
$
(
12,633
)
$
(
13,648
)
Indirect expenses
(a)
722
722
Loss from operations
$
(
14,370
)
Other income, net
$
15,950
Income before income taxes
$
1,580
Six Months Ended June 30, 2025
Cell
Therapy
BioBanking
Degenerative
Disease
Other
Total
Net revenues
$
1,023
$
2,683
$
13,456
$
—
$
17,162
Cost of revenues (excluding amortization of acquired intangible assets)
—
429
8,367
—
8,796
Direct expenses
6,184
756
6,601
20,435
33,976
Segment contribution
$
(
5,161
)
$
1,498
$
(
1,512
)
$
(
20,435
)
$
(
25,610
)
Indirect expenses
(a)
740
740
Loss from operations
$
(
26,350
)
Other expense, net
$
(
17,928
)
Net loss before income taxes
$
(
44,278
)
(a)
Comprised of amortization
of intangible assets.
21.
Related Party Transactions
Amended
and Restated CEO Employment Agreement
In
January 2023 the Company’s Chief Executive Officer deferred his salary to aid working capital needs. Deferred salary remained unpaid
and was $
1,935
as of June 30, 2026 and December 31, 2025, respectively. Deferred salary is included in accrued expenses.
In order to comply with the Securities Purchase Agreement dated January
12, 2024 with Dragasac Limited, Dr. Hariri is not to be paid the $
1,088
in base salary that was otherwise due to him for the 2023 calendar
year unless the Company raises additional cash through offerings of equity securities with aggregate net proceeds equal or greater to
$
21,000
at a valuation at least equal to the valuation, cost per security or exercise/conversion price, as applicable, of the Class A
common stock and January 2024 PIPE Warrant purchased by Dragasac Limited in January 2024. In compliance with the requirements of Internal
Revenue Code Section 409A, the compensation committee of the Company’s board of directors approved a cash bonus program, or bonus
program, effective February 16, 2024, pursuant to which Dr. Hariri will be paid
125
% of his unpaid base salary upon the satisfaction of
the foregoing performance conditions. Accordingly, the Company entered into a second amendment to Dr. Hariri’s employment agreement
implementing the
85
% base salary reduction effective as of February 16, 2024 and documenting the bonus program. As a result of the reduction,
Dr. Hariri’s annual rate of base salary for the 2024 year was $
180
. Beginning on January 1, 2025, Dr. Hariri’s base salary
was paid a reduced rate of
50
% of his base compensation through December 31, 2025.
CEO
Loan Agreement
In
August 2023, the Company borrowed $
1,000
from its CEO. The loan provides for interest of
15
% per year, the first year of interest was
due in kind and the loan was repayable in August 2024. The loan maturity date was subsequently amended to December 31, 2026. In September
2024, the CEO assumed the loans of two unaffiliated lenders from an August 2023 loan agreement. The two loans had a principal and accrued
interest of $
2,331
on the assumption date.
In
October, 2023, the CEO loaned the Company $
285
through a note which provides for interest at
15.0
% per year.
In
January 2025 the CEO loans were amended to extend the maturity dates to December 31, 2025. In December 2025, the CEO loans were amended
to extend the PIK interest period and maturity dates to December 31, 2026.
KTL
Note, RWI Note, and Celeniv Licensing Obligation
In
July 2025 the Company borrowed $
6,812
from a former Director of the Company through a secured promissory loan. The loan provided for
annual interest of
2.0
% and had a maturity date of March 21, 2026. A portion of the loan proceeds were to be used to repay the Starr
loan. The KTL Note was issued with a warrant to purchase up to
3,700,000
shares of the Company’s class A common stock at an exercise
price of $
2.53
per share and has a
5
-year term. The warrants were considered equity due to their fixed exercise price.
In
May 2023, the Company borrowed $
6,000
(net of an original issue discount of $
120
) from RWI through a senior secured loan agreement. The
loan had a maturity of June 14, 2023 and provided for interest of
12.5
% per year (
15.5
% in the event of default), the first year of interest
was paid in kind. The loan agreement was amended in June 2023.
25
In
August 2025, the Company sold certain intellectual property to Celeniv Pte. Ltd (“Celeniv”) in exchange for the assignment
of the RWI and KTL loans to Celeniv. The value of the loans assigned were principal $
33,812
, accrued interest $
4,031
, accrued paid-in
kind interest $
3,835
and unamortized debt discount $
5,955
.
The
sale granted Celeniv an exclusive, worldwide, royalty-bearing license. Royalties are due to Celeniv in amount equal to
12.5
%
of the purchase price payable in quarterly installments commencing on the one-year anniversary through the earlier of (A) the
closing of the Asset Purchase (as defined below) and (B) the fifth anniversary of the License Agreement (including the Negotiation
Period). Each quarterly installment is equal to approximately $
1,057
, with the first payment due on September 30, 2026.
As of June 30, 2026 the Company had not made any payments to Celeniv for the License Agreement.
Pursuant
to the License Agreement, the Company has the option to purchase from Celeniv all (not part) of Celeniv’s right, title and interest
in the Licensed Technology (as defined in the License Agreement) and Licensed Marks (“Asset Purchase”). The Option shall
be in effect for a period of five years beginning August 13, 2025 (the “Option Period”). Unless terminated earlier or otherwise
extended pursuant to the terms of the License Agreement, the License Agreement shall terminate on August 13, 2030. Celeniv may terminate
the License Agreement (i) if the Company breaches the terms thereof, unless such breach is cured within 60 days of the receipt of written
notice of the breach from Celeniv or (ii) immediately in the event that any action is taken by the Company or its creditors to effectuate
the Company’s liquidation, dissolution or winding-up. The License Agreement will automatically terminate upon the closing of the
Asset Purchase or may be terminated upon mutual agreement of the parties.
The
Company accounted for the transaction as a financing arrangement as the transaction did not meet the sale criteria of ASC
606-10-25-30, and the Company recognized a licensing obligation of $
35,723
,
including a premium of $
1,911
.
The accrued interest on the assigned loans was forgiven, and the licensing obligation premium was fully amortized during the year
ended December 31, 2025. Future quarterly payments under the License Agreement will reduce the licensing obligation over the course
of the term. The total licensing obligation was $
33,812
at June 30, 2026 and December 31, 2025, respectively.
Employment
of Family Member
The
CEO’s daughter is employed by the Company as Vice President, Corporate Strategy & Business Development at a compensation structure
commensurate with those of Company employees in similar positions.
Fountain
Life Management LLC
In
November 2024, the Company entered into a Technology Services Agreement with Fountain Life Management LLC (“Fountain
Life”), under which the Company processes and stores mononuclear cells isolated from blood samples collected by Fountain Life
or its authorized representatives. Fountain Life paid the Company a one-time fee of two thousand five hundred dollars ($
2,500
) per
sample. The Technology Services Agreement automatically extends for one-year periods unless earlier terminated by either party.
There were no revenues from the agreement in 2026 and revenues were minimal in 2025. Revenue from sales of other products were $
519
and $
715
for the three and six months ended June 30, 2026, respectively (minimal for the three and six months ended June 30, 2025).
Accounts receivable were $
200
and $
0
as of June 30, 2026 and December 31, 2025, respectively. The Company’s CEO, and a Director, Peter Diamandis, M.D., are
founding partners of Fountain Life.
Gordon Promissory Note
On June 19, 2026, Steven N. Gordon,
its Chief Operating Officer was appointed to the Company’s Board of Directors and Mr. Gordon loaned the Company $
0.3
million to
aid working capital needs. Refer to
Note 11 – Debt
for additional information.
22.
Subsequent Events
Nasdaq
Deficiency Notices
On
August 21, 2026, the Company received a notice from Nasdaq Stock Market LLC indicating that it is not in compliance with the timely filing
requirement under Nasdaq Listing Rule 5250(c)(1) due to its failure to timely file its Form 10-Q for the period ended June 30, 2026.
Manufacturing
Collaboration with MuseCell Innovations Pte. Ltd.
On
August 27, 2026, the Company announced a manufacturing collaboration with MuseCell Innovations Pte. Ltd. (“MCI”), a Singapore-based
company that owns the Dezawa MuseCell
®
platform, to manufacture Dezawa MuseCells and related derivative products at the
Company’s Florham Park, New Jersey facility. The collaboration contemplates an initial manufacturing program, following which the
parties intend to explore an expanded manufacturing relationship. MCI has estimated that purchases under the initial program and potential
future collaboration could exceed $
300
million in the aggregate over five years. This estimate is non-binding, does not represent committed
orders or Company revenue guidance, and depends on successful execution of the initial program, further agreements between the parties
and future demand. There can be no assurance that an expanded relationship will be established or that purchases will occur in the estimated
amount, within the anticipated timeframe or at all. The products contemplated by the collaboration have not been approved by the U.S.
Food and Drug Administration.
Financing
On
September 23, 2026, the Company entered into a Securities Purchase Agreement providing for the issuance of senior secured convertible
notes and warrants for aggregate gross proceeds of up to approximately $
25.0
million. On September 24, 2026, the Company completed the initial
closing under the agreement, resulting in aggregate gross proceeds of $
9.7
million. Net proceeds were $
8.8
million after legal and advisory fees of $
863
. Additional proceeds are subject to the terms
and conditions of the Securities Purchase Agreement.
June 2026 Promissory Note Default Notice
In a September
1, 2026 letter, the lender’s counsel asserted that an event of default had occurred, the applicable forbearance had expired and
default interest at 18% per annum applied beginning August 5, 2026. The letter reserved the lender’s rights but did not demand immediate
repayment of principal.
BioCellgraft, Inc. Default
Notice
On July
28, 2026, the Company delivered a notice of default to BioCellgraft, Inc. relating to unpaid license fee installments of $
250
each due
on March 31 and June 30, 2026 under its December 1, 2025 license agreement. The Company suspended performance under the applicable agreements
and engaged in discussions regarding a potential resolution.
Termination of Chief Commercial Officer
On August 5, 2026, the Company terminated the employment
of Rick Gonzalez, our Chief Commercial Officer, effective immediately. On September 1, 2026, counsel for Mr. Gonzalez sent the Company
a letter claiming compensation totaling $
632
for alleged unpaid wages, bonuses and benefits arising from his employment and termination.
Mr. Gonzalez’s employment terms were set forth in an offer letter, rather than an employment agreement. The Company is attempting
to reach an amicable resolution.
26
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You
should read the following discussion of our financial condition and results of operations together with the unaudited interim condensed
consolidated financial statements and the notes thereto included elsewhere in this report and our audited consolidated financial statements
and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, or the 2025 Form 10-K. The following
discussion contains forward-looking statements, including statements regarding our business strategy, development programs, manufacturing
activities, strategic transactions and anticipated financial performance. See “Special Note Regarding Forward-Looking Statements.”
These statements involve risks and uncertainties, including those discussed in this report and under “Part I—Item 1A. Risk
Factors” in the 2025 Form 10-K, that could cause our actual results to differ materially from those expressed or implied by these
forward-looking statements.
Overview
We
are a longevity-focused regenerative and cellular medicine company developing and manufacturing placenta-derived cellular therapy candidates
intended to address age-related diseases, tissue degeneration and declines in human function. Our business combines cellular therapy
research and development, manufacturing capabilities, biobanking services and participation in the commercialization and supply of placental-derived
biomaterial products through licensing and other contractual arrangements. Our strategy is to concentrate resources on our cellular therapy
platform and manufacturing infrastructure while pursuing opportunities to generate revenue from third-party manufacturing services, biobanking
and our retained biomaterials activities.
Business
Realignment
Our
business has evolved from the broader development and direct commercialization model historically associated with our cellular therapy,
biomaterials and biobanking activities. In March 2026, we entered into agreements with NexGel, Inc. (“NexGel”), providing
for the transfer of certain commercial and other assets associated with our biomaterials portfolio and an exclusive license to develop
and commercialize specified products, subject to territorial and other contractual limitations. We completed the transaction in April
2026. The transaction shifted responsibility for specified biomaterials commercialization and development activities to NexGel while
preserving certain contractual rights and opportunities for future economic participation.
Our
biomaterials portfolio has included Biovance
®
, Biovance
®
3L, Biovance
®
3L Ocular, Interfyl
®
,
CentaFlex
®
and Rebound™, which are placental-derived allografts and connective tissue matrices developed for surgical,
wound care and related applications. Our continuing activities with respect to these products depend on the applicable product rights,
territories and manufacturing, supply, licensing and distribution arrangements. Accordingly, our historical biomaterials product sales
and operating expenses may not be indicative of our results following the transaction and related organizational changes.
In
connection with this realignment, we reduced personnel and other expenditures associated with certain commercial and product development
functions. These actions are intended to reduce operating costs and concentrate investment on our cellular therapy programs and manufacturing
capabilities. The extent to which we realize these benefits will depend on our execution, the performance of our counterparties and our
ongoing contractual obligations.
Cellular
Therapy Platform and Development Strategy
Our
cellular therapy strategy is based on the potential of cells derived from the postpartum placenta to address biological processes associated
with age-related disease, including chronic inflammation, impaired tissue repair and immune dysfunction. Our objective is to develop
therapies that may extend health span, which we define as the period of life spent in good health and with preserved function.
Aging
is associated with progressive changes in tissue structure, regenerative capacity and immune function. Cellular senescence, stem cell
exhaustion and chronic inflammation are among the biological processes implicated in these changes. We believe placenta-derived cells
may offer opportunities to modulate certain of these processes. However, the ability of our product candidates to produce clinically
meaningful benefits must be established through appropriate studies.
27
Our
development priorities include cenplacel-L, a placenta-derived mesenchymal-like adherent stromal cell, product candidate. We are pursuing
its potential application in diabetic foot ulcers and evaluating development opportunities in age-related frailty and other degenerative
conditions. Our broader platform also includes placenta-derived natural killer, or NK, cells, including CYNK-001, which we are evaluating
for potential applications involving immune function and the clearance of senescent cells. The advancement, timing and scope of individual
programs depend on available funding, regulatory requirements, scientific and clinical results, and strategic priorities.
Our
cellular therapy candidates are investigational and have not been approved by the U.S. Food and Drug Administration. Their safety and
effectiveness for the proposed indications have not been established. We also evaluate opportunities involving physician access and collaborations
in jurisdictions with potentially applicable treatment pathways, subject to federal, state and foreign legal and regulatory requirements.
These activities do not constitute regulatory approval or establish the safety or effectiveness of our candidates.
Manufacturing
and Third-Party Services
Our
Celularity IMPACT (
IM
munomodulatory
P
lacenta-derived
A
llogeneic
C
ellular
T
herapy) platform integrates
the sourcing of postpartum placentas from donors who have provided informed consent with cell isolation, expansion, characterization,
cryopreservation and manufacturing. Our infrastructure includes our purpose-built, approximately 147,215-square-foot facility in Florham
Park, New Jersey, which supports our cellular therapy programs and other manufacturing and biobanking activities.
We
believe postpartum placentas provide a scalable source of cells with biological properties that may support the development of allogeneic
therapies. Allogeneic therapies use donor-derived cells and are intended for use in multiple recipients, potentially enabling inventory-based,
off-the-shelf supply. The suitability, tolerability and clinical performance of each candidate depend on its characteristics, manufacturing
process, route of administration and intended use.
In
addition to supporting our internal programs, we pursue revenue-generating opportunities to provide manufacturing and related technical
services to third parties. Depending on the engagement, these services may include cell processing and expansion, production, analytical
testing, cryopreservation, storage and related support. We also undertake biomaterials manufacturing and supply activities under applicable
contractual arrangements. These activities are intended to utilize our existing infrastructure and expertise, although their contribution
to revenue and operating results depends on customer demand, capacity utilization, contractual terms and our ability to meet applicable
specifications and delivery requirements.
Our
ability to advance our development programs, expand manufacturing services and realize the anticipated benefits of our business realignment
remain dependent on access to capital, effective management of our operating expenses, regulatory developments and the performance of
our commercial and strategic counterparties.
Biobanking
We
continue to operate our biobanking business primarily under the LifebankUSA brand, providing collection, processing and storage services
for umbilical cord and placental blood and tissue for potential future use. This business provides service revenue and supports our broader
expertise in biological material processing, cryopreservation and long-term storage. We are also evaluating opportunities to expand cell
banking services in support of our longevity-focused strategy. The potential future use of banked materials depends on their suitability
and the availability of appropriate therapies and regulatory pathways.
Going
Concern
We
have determined there are conditions that raise substantial doubt about our ability to continue as a going concern within one year from
the date these financial statements were issued. We have less than twelve-months cash on hand, do not generate sufficient cash from operations
to operate the business for the next twelve months, and may not be able to continue as a going concern. We have historically funded operations
through sales of products and services and equity and debt securities financings from both public and private investors. There is no
assurance that such cash flows will continue in the future or that we will achieve cash positive operations.
28
We
have generally not been profitable and since our inception, we have incurred significant operating losses and used net cash for operating
activities. During the six months ended June 30, 2026, net income was $1.6 million and net cash provided by operating activities
was $0.3 million which included proceeds of $12.2 million from the sale of New Jersey net operating loss carryforwards. Excluding these
proceeds, operating activities used net cash. As of June 30, 2026, we have an accumulated deficit of $989.9 million and have a working
capital deficit of $53.3 million. We restructured operations in the first six months of 2026 and believe increased sales are required
to achieve break even operating cash flows in the next 12 months, however there is no assurance this will be achieved and significant
operating losses and net cash uses for operations may continue for the foreseeable future. We will need to secure additional financing,
however there is no assurance that financing can be raised or at acceptable terms. These factors indicate we may be unable to meet our
obligations as they become due over the next twelve months, or sooner, and continue as a going concern.
On
August 21, 2026, we received a notice from Nasdaq Stock Market LLC indicating that we are not in compliance with the timely filing requirement
under Nasdaq Listing Rule 5250(c)(1) due to our failure to timely file its Form 10-Q for the period ended June 30, 2026. We intend to
regain compliance; however, there can be no assurance that we will be able to do so within any applicable period or that our securities
will continue to be listed on Nasdaq.
In
the event we are unable to secure additional outside capital to fund our obligations when they become due over the next 12 months beyond
the filing date, which includes the funds needed to repay our outstanding debt, management will be required to seek other strategic alternatives,
which may include, among others, a significant curtailment of our operations, a sale of certain of our assets, a sale of the entire Company
to strategic or financial investors, and/or allowing us to become insolvent by filing for bankruptcy protection under the provisions
of the U.S. Bankruptcy Code.
These
uncertainties raise substantial doubt about our ability to continue as a going concern. The accompanying condensed consolidated financial
statements have been prepared on the basis that we will continue to operate as a going concern, which contemplates that we will be able
to realize assets and settle liabilities and commitments in the normal course of business for the foreseeable future. Accordingly, the
accompanying condensed consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties.
Business
Segments
We
manage our operations through an evaluation of three distinct business segments: Cell Therapy, BioBanking and Degenerative Disease. The
reportable segments were determined based on the distinct nature of the activities performed by each segment. Cell Therapy broadly refers
to cellular therapies we are researching and developing. Therapies being researched are unproven and in various phases of development.
All of the cell therapy programs fall into the Cell Therapy segment. Degenerative Disease produces, sells and licenses products used
in surgical and wound care markets, such as Biovance, Biovance 3L, Interfyl, CentaFlex and Rebound. We sell products in this segment
using independent sales representatives as well as distributors. We intend to develop additional tissue-based products for the Degenerative
Disease segment. BioBanking collects stem cells from umbilical cords and placentas and provides storage of such cells on behalf of individuals
for future use. We operate in the biobanking business primarily under the LifebankUSA brand. For more information about our reportable
business segments refer to Note 20, “Segment Information” of our condensed consolidated financial statements included in
this quarterly report on Form 10-Q.
Corporate
Information
Our
principal executive offices are located at 170 Park Avenue, Florham Park, New Jersey 07932, and our telephone number is (908) 768-2170.
Components
of Operating Results
Net
revenues
Net
revenues include: (i) sales of biomaterial products, including Biovance, Biovance 3L, ReboundTM, Interfyl, and CentaFlex of which our
direct sales are included in Product Sales while sales through our network of distribution partners are included in License, royalty
and other; and (ii) the collection, processing and storage of umbilical cord and placental blood and tissue after full-term pregnancies,
collectively, Services.
29
Cost
of revenues
Cost
of revenues consists of labor, material and overhead costs associated with our two existing commercial business segments, biobanking
and degenerative disease. Biobanking costs include the cost of storage and transportation kits for newly banked materials as well as
tank and facility overhead costs for cord blood and other units in storage. Degenerative disease costs include costs associated with
procuring placentas, qualifying the placental material and processing the placental tissue into a marketable product. Costs in the
degenerative disease segment include labor and overhead costs associated with the production of the Biovance, Biovance 3L,
ReboundTM, Interfyl and CentaFlex product lines. Cost of revenues associated with direct sales are part of Product Sales while cost
of revenues associated with sales through our network of distribution partners are included in License, royalty and
other.
Research
and development expense
Research
and development expenses primarily relate to basic scientific research into placentally derived allogeneic cells, pre-clinical studies
to support our current and future clinical programs in cellular medicine, clinical development of our NK cell programs and facilities,
depreciation and other direct and allocated expenses incurred through research and development activities. We incur expenses for research
scientist personnel, specialized chemicals and reagents used to conduct biologic research, expenses for third party testing and validation
and various overhead expenses including rent and facility maintenance expenses. Basic research, research collaborations involving partners
and research designed to enable successful regulatory submissions are critical to our current and future success in cell therapy. The
amount of our research and development expenditures will depend on numerous factors, including the timing of clinical trials, preliminary
evidence of efficacy in clinical trials and the number of indications that we choose to pursue.
Selling,
general and administrative expense
Selling,
general and administrative expenses consists primarily of personnel costs including salaries, bonuses, stock compensation and benefits
for specialized staff that support our core business operations. Executive management, finance, legal, human resources and information
technology are key components of selling, general and administrative expense and those expenses are recognized when incurred. The magnitude
and timing of our selling, general and administrative costs commercialization efforts for any approved therapies including the release
of new products within the degenerative disease portfolio, changes in the regulatory environment or staffing needs to support our business
strategy.
Results
of Operations
Comparison
of Three Months Ended June 30, 2026 to June 30, 2025
Three Months Ended June 30,
Percent
2026
2025
Increase
(Decrease)
Increase
(Decrease)
Net revenues:
Product sales
$
4,061
$
2,379
$
1,682
70.7
%
Services
652
1,275
(623
)
(48.9
)%
License, royalty and other
719
2,082
(1,363
)
(65.5
)%
Total revenues
5,432
5,736
(304
)
(5.3
)%
Operating expenses:
Cost of revenues (excluding amortization of acquired intangible assets)
Product sales
2,071
2,550
(479
)
(18.8
)%
Services
227
220
7
3.2
%
License, royalty and other
49
2,472
(2,423
)
(98
)%
Research and development
2,028
3,352
(1,324
)
(39.5
)%
Selling, general and administrative
4,940
12,634
(7,694
)
(60.9
)%
Amortization of acquired intangible assets
354
372
(18
)
(4.8
)%
Total operating expense
9,669
21,600
(11,931
)
(55.2
)%
Loss from operations
$
(4,237
)
$
(15,864
)
$
11,627
(73.3
)%
30
Product
sales were $4.1 million for the three months ended June 30, 2026, compared to $2.4 million in 2025, an increase of $1.7 million, 70.7%,
mainly driven by increased Biovance 3L product sales offset in part by changes in customer purchasing behavior due to the
insurance reimbursement environment.
Revenues
from Services were $0.7 million in 2026 compared to $1.3 million in 2025, a decrease of $0.6 million, 48.9% driven by one-time Biobanking
sales adjustments of $0.6 million.
Revenues
from license, royalty and other were $0.7 million in 2026 compared to $2.1 million in 2025, a decrease of $1.4 million, 65.5%, driven
by lower distributor BioCellgraft demand.
Cost of revenues from product
sales were $2.1 million in 2026 compared to $2.6 million in 2025, a decrease of $0.5 million, 18.8%. The decrease was primarily due to
a write-off of capitalized bulk material costs of $2.5 million in the prior year period, partially offset by increased costs driven by
higher product sales volume.
Cost
of Services revenues were $0.2 million in 2026 and 2025.
Cost of License, royalty and other revenues were minimal (license and royalty
revenues have minimal cost of sales ) for the three months ended June 30, 2026 compared to $2.5 million in the prior year period
due to lower distributor sales and distributor inventory net realizable value adjustments required in 2025 and not in 2026.
Research
and Development Expenses
Research
and development expenses were $2.0 million in 2026 compared to $3.4 million in 2025, a decrease of $1.3 million, 39.5%, driven by lower
headcount and headcount related allocations.
Selling,
General and Administrative Expenses
Selling, general and administrative
expenses were $4.9 million compared to $12.6 million in 2025, a decrease of $7.7 million, 60.9%. The decrease was driven by lower headcount
which decreased compensation and headcount related IT, legal, facilities, human resources, security and other administrative expenses
of $4.3 million, lower independent sales representative compensation of $2.1 million due to lower sales and a shift to sales compensation
plans with lower commission rates, decreased audit, tax and legal fees of $0.5 million, and lower general expenditures of $0.8 million
from other expense reductions.
Other
Income (Expense)
(in thousands)
Three Months Ended June 30,
Percent
2026
2025
Change
Change
Interest income
$
11
$
62
$
(51
)
(82.3
)%
Interest expense
(177
)
(1,943
)
1,766
(90.9
)%
Change in fair value of warrant liabilities
1,065
(1,276
)
2,341
(183.5
)%
Gain on SLS Settlement
6,730
-
6,730
100.0
%
Loss on Helena Settlement
(2,500
)
-
(2,500
)
(100.0
)%
Change in fair value of debt
(175
)
(1,075
)
900
(83.7
)%
Other expense, net
(11
)
(4,428
)
4,417
(99.8
)%
Total other income (expense)
$
4,943
$
(8,660
)
$
13,603
(157.1
)%
Total other
income was $4.9 million in 2026 compared to total other expense of $8.7 million in 2025, a favorable swing of $13.6 million. The
change was primarily due to the gain recognized on SLS settlement of $6.7 million, a decrease in interest expense of $1.8 million
due to lower period over period debt outstanding, a decrease in warrant fair values of $2.3 million, a decrease in the fair value of
debt of $0.9 million and a decrease in other expense of $4.4 million due to the accrual of Compliance Fees in the prior period,
partially offset by a $2.5 million loss on settlement with Helena.
31
Comparison
of Six Months Ended June 30, 2026 to June 30, 2025
Six Months Ended June 30,
Percent
2026
2025
Increase
(Decrease)
Increase
(Decrease)
Net revenues:
Product sales
$
4,927
$
11,397
$
(6,470
)
(56.8
)%
Services
1,902
2,683
(781
)
(29.1
)%
License, royalty and other
2,449
3,082
(633
)
(20.5
)%
Total revenues
9,278
17,162
(7,884
)
(45.9
)%
Operating expenses:
Cost of revenues (excluding amortization of acquired intangible assets)
Product sales
2,243
5,056
(2,813
)
(55.6
)%
Services
449
429
20
4.7
%
License, royalty and other
1,107
3,311
(2,204
)
(66.6
)%
Research and development
5,022
7,080
(2,058
)
(29.1
)%
Selling, general and administrative
14,105
26,896
(12,791
)
(47.6
)%
Amortization of acquired intangible assets
722
740
(18
)
(2.4
)%
Total operating expense
23,648
43,512
(19,864
)
(45.7
)%
Loss from operations
$
(14,370
)
$
(26,350
)
$
11,980
(45.5
)%
Product
sales were $4.9 million for the six months ended June 30, 2026, compared to $11.4 million in 2025, a decrease of $6.5 million, 56.8%,
mainly driven by lower Biovance 3L and Rebound product sales and in part by changes in customer purchasing behavior due to the insurance
reimbursement environment.
Revenues
from BioBanking services were $1.9 million in 2026 compared to $2.7 million in 2025, a decrease of $0.8 million, 29.1% driven by one-time
Biobanking sales adjustments of $0.6 million.
Revenues
from license, royalty and other were $2.4 million in 2026 compared to $3.1 million in 2025, a decrease of $0.6 million, 20.5%, driven
by lower distributor BioCellgraft demand.
Cost of revenues from product
sales were $2.2 million in 2026 compared to $5.1 million in 2025, a decrease of $2.8 million, 55.6% driven by lower product sales volume
and cost of revenues from product sales in 2025 included a write-off of capitalized material costs of $1.9 million. License
and royalty revenues have minimal cost of sales.
Cost
of Services revenues were $0.4 million in 2026 and 2025.
Cost
of License, royalty and other revenues were $1.1 million in 2026 compared to $3.3 million in 2025, a decrease of $2.2 million due
primarily to lower distributor sales of $2.0 million and lower Rebound™ royalties in 2026.
Research
and Development Expenses
Research
and development expenses were $5.0 million in 2026 compared to $7.1 million in 2025 a decrease of $2.1 million, 29.1% driven by lower
headcount which decreased compensation and headcount related IT, legal, facilities,
human resources, security and other research and development expenses.
32
Selling,
General and Administrative Expenses
Selling, general and administrative
expenses were $14.1 million in 2026 compared to $26.9 million in 2025, a decrease of $12.8 million. The decrease was driven by lower headcount
which decreased compensation and headcount related IT, legal, facilities, human resources, security and other administrative expenses
of $5.7 million, lower independent sales representative compensation of $4.7 million due to lower sales and a shift to sales
compensation plans with lower commission rates, decreased audit, tax and legal fees of $1.5 million, decreased bad debt expense of $0.4
million and lower general expenditures of $0.5 million from other expense reductions.
Other
Income (Expense)
(in thousands)
Six Months Ended June 30,
Percent
2026
2025
Change
Change
Interest income
$
73
$
138
$
(65
)
(47.1
)%
Interest expense
(529
)
(4,380
)
3,851
(87.9
)%
Change in fair value of warrant liabilities
978
(1,034
)
2,012
n/m
Gain on SLS Settlement
6,730
-
6,730
100.0
%
Loss on Helena Settlement
(2,500
)
-
(2,500
)
(100.0
)%
Change in fair value of debt
(341
)
(1,087
)
746
(68.6
)%
Loss on debt extinguishment
-
(5,736
)
5,736
(100.0
)%
Sale of New Jersey state tax loss benefit
12,159
-
12,159
100.0
%
Other expense, net
(620
)
(5,829
)
5,209
(89.4
)%
Total other income (expense)
$
15,950
$
(17,928
)
$
33,878
n/m
Total other income was $16.0 million in 2026 and a loss of $17.9 million
in 2025 primarily driven by: (i) the sale of New Jersey state tax loss benefit of $12.2 million, (ii) the gain on the SLS settlement of
$6.7 million, (iii) a decrease in interest expense of $3.9 million due to lower debt and (iv) accrual of Compliance Fees in the prior
period, partially offset by a $2.5 million loss on settlement with Helena.
Liquidity
and Capital Resources
As of June 30, 2026, cash and cash equivalents were $0.6 million, the accumulated
deficit was $989.9 million, and the working capital deficit was $53.3 million. Our primary sources of cash are from financing activities
and from products, services and licensing sales. We use this cash to fund our operations and satisfy our debt obligations.
Our
current cash resources are not sufficient to fund our operations for a period of 12 months beyond the filing date and we are actively
pursuing additional sources of capital and strategic sales partnerships to improve our liquidity and financial position, including transactions
designed to monetize assets, reduce indebtedness and transition to a more capital-efficient operating model. While our ability to secure
additional financing is subject to market conditions and other factors, these uncertainties raise substantial doubt about our ability
to continue as a going concern.
We
are evaluating and pursuing commercialization of certain investigational cellular therapies, including cenplacel-L, in jurisdictions
that permit the use of such products outside of traditional regulatory approval pathways, subject to applicable local laws and regulations.
If we obtain regulatory approval for any of our therapeutic candidates, we expect to incur significant commercialization expenses related
to therapeutic sales, marketing, manufacturing and distribution as our current commercialization efforts are limited to our biobanking
and degenerative disease businesses.
We
expect to finance our cash needs through equity offerings, debt financings or other capital sources, and from commercial sales of our
biomaterials products, and from sales collaborations, licenses and other similar arrangements for our cellular therapeutics and these
sales activities must increase to achieve positive cash flows from operations. We continue to explore licensing and collaboration arrangements
for our cellular therapeutics as well as distribution arrangements for our degenerative disease business. We may be unable to raise additional
funds or enter such other arrangements when needed. Failure to raise the cash needed will have a negative impact on our financial condition
and on our ability to pursue our business plans and strategies.
33
We
expect to incur substantial expenses in the foreseeable future for our degenerative disease business and ongoing internal research and
development programs. We will require substantial additional funding in the future to build the sales, marketing and distribution infrastructure
that will be necessary to commercialize our cell therapies products.
Inflation
has not significantly impacted our business, however, sustained increases in inflation or interest rates could affect the broader
economy and, in turn, impact our cash flows.
Cash
Flows
(in thousands)
Six Months Ended June 30,
2026
2025
Change
Cash provided by/(used in):
Operating activities
$
339
$
(3,992
)
$
4,331
Financing activities
(6,317
)
3,951
(10,268
)
Net change in cash, cash equivalents and restricted cash
$
(5,978
)
$
(41
)
$
(5,937
)
Operating
Activities
Cash provided by operating activities
was $0.3 million in 2026 compared to cash used of $4.0 million in 2025. The change was primarily driven by higher earnings adjusted for
non-cash items, inclusive of the receipt of proceeds from the sale of New Jersey net operating loss carryforwards of $12.2 million, partially
offset by unfavorable period over period changes in working capital.
Investing
Activities
We
made no investing cash expenditures in the six months ended June 30, 2026 and 2025.
Financing
Activities
Cash
used in financing activities was $6.3 million in 2026 compared to $4.0 million provided in 2025 driven by $7.0 million of repayments
of short-term unaffiliated debt, offset by $1.3 million of promissory note borrowings.
In
2025, our financing activities included $2.5 million of proceeds from the issuance of common stock to Dragasac in connection with a warrant
inducement agreement and the sale of accounts receivable of $0.9 million.
Recent
Developments
In
December 2025 we entered into agreements with an investor providing financing through senior secured and convertible notes. We issued
a Senior Secured Non-Convertible Promissory Note of $7.0 million (the “Senior Note”) and a warrant to purchase up to 2,448,917
shares of our Class A common stock (the “Senior Note Warrant”). On February 13, 2026, we repaid in full the outstanding principal
and accrued interest under the Senior Note. We also issued a Secured Convertible Promissory Note of $3.0 million and a warrant to purchase
up to 1,258,740 shares of our Class A common stock (the “Convertible Note Warrant”). The Senior Note Warrant and the Convertible
Note Warrant are both exercisable commencing on June 19, 2026 through December 19, 2030 at a price of $2.00 per share.
34
On
April 17, 2026, Helena delivered to us a notice of event of default (the “Helena Default Notice”) under the Helena Note.
In the Helena Default Notice, Helena asserted that one or more events of default had occurred under the Helena Note, including among
other things, our failure to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended, including becoming
delinquent in its filings. We believe the asserted default arose from our failure to timely file our Annual Report on Form 10-K for the
fiscal year ended December 31, 2025. Under the Helena Note, if an event of default is not cured within the applicable cure period, which
is five business days for this type of asserted default, Helena may declare due and payable the “Mandatory Default Amount,”
which is equal to 115% of the outstanding principal amount, accrued interest and all other amounts owing under the Helena Note. In addition,
following an event of default, any outstanding principal balance accrues interest at a rate of 15% per annum, compounded annually. On
May 21, 2026, we entered into a settlement agreement with Helena to resolve certain existing claims and restructure obligations under
our existing transaction documents. Under the settlement agreement, we agreed to make an initial payment of $500,000 and five monthly
installment payments of $100,000 each, assign rights under a $2.5 million portion of the NexGel promissory note described below, and
amend the existing security agreement. Helena’s release of claims was conditioned on our satisfaction of specified release conditions.
We did not make the installment payments due on July 21 and August 21, 2026 timely. On August 25, 2026, we paid Helena $200,000, bringing
our aggregate cash payments under the settlement agreement to $800,000. Helena has asserted that the missed payments constitute defaults
and that it is entitled to exercise conversion rights under the Helena Note. We dispute Helena’s asserted entitlement to the conversion
amount it has demanded. We are engaged in discussions to resolve the matter. For the three and six months ended June 30, 2026, we recognized a loss on settlement with Helena of $2.5 million.
In
March 2026 and as amended in April 2026, the Company sold NexGel, Inc. an exclusive, transferable and sublicensable license to develop
and commercialize certain degenerative disease products in exchange for $13.3 million. NexGel paid the Company $4.8 million cash at closing,
$0.6 million cash in the 2
nd
quarter of 2026, which was contingent on the Company filing its 2025 Report on Form 10-K, NexGel
assumed the obligation to pay sales commissions of $2.9 million earned by and owed to certain Celularity employees, and NexGel issued
Celularity a $5.0 million 18-month convertible note which, subject to certain conditions, is convertible into NexGel common stock. The
note was subsequently split into two notes of $2.5 million each, one of which was assigned to Helena Global Investment Opportunities,
Ltd (“Helena”) as partial satisfaction of amounts due Helena and one of which was assigned to Sequence as partial satisfaction
of amounts due Sequence.
The
NexGel license agreement entitles the Company to earn up to $20.0 million in milestone payments, with the first milestone payment of
$2.5 million due to the Company upon the earlier of NexGel achieving $25.0 million in net sales or 15 months, provided that net sales
of at least $15.0 million have been achieved. Milestones have not been achieved as of June 30, 2026.
On
April 14, 2026, the Company entered into a Settlement Agreement and Mutual General Release (the “SLS Settlement Agreement”)
with Sequence LifeScience, Inc. (“Sequence”) to resolve certain disputes arising under the parties’ prior asset purchase
and supply agreements. Pursuant to the SLS Settlement Agreement, and subject to the closing of our previously announced transaction with
NexGel (the “NexGel Transaction”), we agreed to provide consideration to Sequence, including (i) the grant of a sublicense
to certain intellectual property and related assets, (ii) the return of certain product inventory, (iii) the assignment of a portion
of future milestone payments payable to us in connection with the NexGel Transaction, (iv) the assignment of a portion of the convertible
promissory note to be received from NexGel, and (v) certain manufacturing rights. The SLS Settlement Agreement was expressly contingent
upon the closing of the NexGel Transaction. The NexGel Transaction closed on April 17, 2026.
In
April 2026, we implemented certain organizational changes in connection with its ongoing strategic realignment and previously announced
the sale of certain biomaterials assets and out-license of specified products. On April 9, 2026, we terminated the employment of John
R. Haines, our Senior Executive Vice President, Global Manager and Chief Administrative Officer, without cause. Mr. Haines’ final
day of employment was May 8, 2026. On April 13, 2026, Stephen A. Brigido, our President, Degenerative Diseases, resigned from his position,
with an effective date of separation of April 15, 2026. These leadership changes reflect the Company’s continued focus on aligning
our organizational structure and resources with its core cell therapy platform and strategic priorities.
35
On May 27, 2026, we received a notice from Nasdaq Stock Market LLC indicating
that we were not in compliance with the timely filing requirement under Nasdaq Listing Rule 5250(c)(1) due to our failure to timely file
our Form 10-Q for the period ended March 31, 2026. On June 9, 2026, we received written notice from Nasdaq indicating that our market
value of listed securities had been below the $35.0 million minimum required by Nasdaq Listing Rule 5550(b)(2) for 30 consecutive business
days. Under Nasdaq Listing Rule 5810(c)(3)(C), we were provided 180 calendar days, or until December 7, 2026, to regain compliance. To
regain compliance, our market value of listed securities must equal or exceed $35.0 million for at least 10 consecutive business days
during that period, subject to Nasdaq’s discretion to require a longer period. On September 11, 2026, Celularity Inc. (“Celularity”)
received written notifications from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) confirming
that Celularity has regained compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2) and the minimum market
value of listed securities requirement under Nasdaq Listing Rule 5550(b)(2). Nasdaq has advised Celularity that each of these matters
is now closed.
On
August 21, 2026, we received an additional notice indicating that we remained delinquent in filing that report and had not timely filed
our Form 10-Q for the period ended June 30, 2026. Nasdaq requested and we submitted a plan to regain compliance. Any exception granted
by Nasdaq would be limited to a maximum of 180 calendar days from the prescribed due date of the initial delinquent filing, or November
16, 2026. We intend to regain compliance; however, there can be no assurance that we will be able to do so within any applicable period
or that its securities will continue to be listed on Nasdaq.
On
June 3, 2026, we entered into a letter agreement with DefEYE, Inc. (“DefEYE”) resolving a dispute following our May 7, 2026
notice asserting nonpayment of approximately $1.3 million in outstanding invoices. The agreement terminates the availability of the product
purchase credit provided under the August 5, 2025 Fourth Amendment to the Supply Agreement, which previously governed our relationship
with DefEYE, for product invoiced after May 6, 2026 and requires DefEYE to pay for subsequent purchases under the applicable contractual
terms. As a transition accommodation, we agreed to provide a one-time 20% discount on the next $1.5 million of eligible purchases, payable
on net 30-day terms, and returned 3,910,706 shares of DefEYE Series Seed-2 Preferred Stock, satisfying the related condition to effectiveness.
The agreement also establishes a framework for secondary manufacturing of specified shortfalls, while preserving our position as primary
manufacturer and providing us fees on secondary manufacturing purchases.
On
June 29, 2026, we entered into a loan agreement with the Barach Family Trust providing for a $1.0 million secured loan. The loan bears
interest at 4% per annum, with a default interest rate of 18% per annum, and matures upon the earlier of 30 days after issuance or the
completion of a subsequent transaction meeting the repayment threshold specified in the agreement. In a September 1, 2026 letter, the
lender’s counsel asserted that an event of default had occurred, the applicable forbearance had expired and default interest at
18% per annum applied beginning August 5, 2026. The letter reserved the lender’s rights but did not demand immediate repayment
of principal.
On
July 28, 2026, we delivered a notice of default to BioCellgraft, Inc. relating to unpaid license fee installments of $250,000 each due
on March 31 and June 30, 2026 under our December 1, 2025 license agreement. We suspended performance under the applicable agreements
and engaged in discussions regarding a potential resolution.
On
August 5, 2026, we terminated the employment of Rick Gonzalez, our Chief Commercial Officer, effective immediately. On September 1, 2026,
counsel for Mr. Gonzalez sent us a letter claiming compensation totaling $632,480 for alleged unpaid wages, bonuses and benefits arising
from his employment and termination. Mr. Gonzalez’s employment terms were set forth in an offer letter, rather than an employment
agreement. We are attempting to reach an amicable resolution.
On
September 23, 2026, we entered into a Securities Purchase Agreement providing for the issuance of senior secured convertible notes and
warrants for aggregate gross proceeds of up to approximately $25.0 million. On September 24, 2026, we completed the initial closing under the agreement,
resulting in aggregate gross proceeds of $9.7 million. Additional proceeds are subject to the terms and conditions of the Securities Purchase
Agreement.
Critical
Accounting Policies
Our
significant accounting policies are summarized in Note 2, “
Summary of Significant Accounting Policies
,” included in
our consolidated financial statements included elsewhere in this report on Form 10-Q.
36
Item
3. Quantitative and Qualitative Disclosures About Market Risk.
Not
applicable.
Item
4. Controls and Procedures.
Evaluation
of Disclosure Controls and Procedures
The
term “disclosure controls and procedures”, as defined under Rules 13a-15(e) and 15d-15(e) under the Exchange Act or the Act,
means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by an issuer in
the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified
in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed
to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated
and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management,
with the participation of our Principal Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure
controls and procedures as of June 30, 2026 and concluded, consistent with prior reporting periods, that these controls and procedures
were not effective due to material weaknesses in internal control over financial reporting for complicated financial transactions causing
the Company to file quarterly and annual reports late.
Internal
Control Over Financial Reporting
Management
is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed
to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published
financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. An
internal control material weakness is a significant deficiency, or aggregation of deficiencies, that does not reduce to a relatively
low level the risk that material misstatements in financial statements will be prevented or detected on a timely basis by employees in
the normal course of their work. An internal control significant deficiency, or aggregation of deficiencies, is one that could result
in a misstatement of the financial statements that is more than inconsequential. In making its assessment of internal control over financial
reporting Management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control — Integrated Framework (2013).
Material
Weakness in Internal Control Over Financial Reporting
We
previously disclosed material weaknesses in our internal control over financial reporting. Specifically, we had insufficient resources
with the appropriate knowledge and expertise to design, implement, and operate effective internal controls over our financial reporting
process that contributed to other material weaknesses within our system of internal control over financial reporting at the control activity
level. In addition, we failed to timely file quarterly reports on Form 10-Q for quarters within the year ended December 31, 2025 and
the first and second quarters of 2026, and the report on Form 10-K for the year ended December 31, 2025. As a result, we have identified
the following material weaknesses as of June 30, 2026:
i.
Control Environment
:
We failed to demonstrate a commitment to attract, develop, and retain competent and sufficient qualified resources with an appropriate
level of knowledge, experience, and training in certain areas around our financial reporting process.
ii.
Risk Assessment:
We failed to design and implement certain risk assessment activities related to identifying and analyzing risks to achieve objectives
and identifying and assessing changes in the business that could impact our system of internal controls.
iii.
Control Activities:
We failed to design and implement certain control activities that address relevant risks and retain sufficient evidence of the performance
of control activities.
iv.
Information and Communication:
We failed to design and implement certain information and communication activities related to obtaining or generating and using relevant
quality information to support the functioning of internal control.
v.
Monitoring:
We failed
to design and implement certain monitoring activities to ascertain whether the components of internal control are present and functioning.
vi.
Privileged Access: C
ertain
finance and accounting personnel have privileged access (also known as Super User Access) to our ERP systems, a material weakness
in internal control which could result in unauthorized, inappropriate and undetected changes to financial-reporting systems.
Remediation
Plans
Company
Financial Management led by the Chief Financial Officer will participate in all strategic transactions and assess if these transactions
yield complicated financial accounting and reporting issues. Internal resources will then be charged with evaluating if the Company has
the necessary expertise to account for and report on the transactions in a timely manner. If not, outside expert resources will be contracted
to assist in a timely manner to ensure timely quarterly and annual report filings. The Super User Access available to certain finance
and accounting personnel was removed in the 2
nd
quarter of 2026 and limited to appropriate Information Technology personnel.
Changes
in Internal Control over Financial Reporting
For
the quarter ended June 30, 2026 there have been no changes in our internal control over financial reporting, except as noted above.
37
PART
II—OTHER INFORMATION
Item
1. Legal Proceedings.
Information
pertaining to legal proceedings can be found in
Note 13. Commitments and Contingencies
in this Quarterly Report on Form 10-Q and
is incorporated by reference herein.
Item
1A. Risk Factors.
Our
operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, “Risk
Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on April 30, 2026.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item
3. Defaults Upon Senior Securities.
None.
Item
4. Mine Safety Disclosures.
Not
applicable.
Item
5. Other Information.
None
of our directors or “officers,” as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934,
adopted
or
terminated
a Rule 10b5-1 trading plan or arrangement or a non-Rule 10b5-1 trading plan or arrangement, as defined in Item 408(c) of Regulation S-K,
during the fiscal quarter covered by this report.
Item
6. Exhibits.
Exhibit
Number
Description
4.1
Form of Helena Note dated April 16, 2026 (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K, filed with the Commission on April 21, 2026).
4.2*
Form of Senior Secured Convertible Promissory Note (incorporated by reference to Exhibit 4.1 to the current report on Form 8-K, filed with the Commission on September 28, 2026)
4.3*
Form of Class A Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.2 to the current report on Form 8-K, filed with the Commission on September 28, 2026)
4.4*
Amended and Restated Senior Secured Convertible Promissory Note, dated September 23, 2026, issued to the Philip & Daniele Barach Family Trust (incorporated by reference to Exhibit 4.3 to the current report on Form 8-K, filed with the Commission on September 28, 2026)
4.5*
Amended and Restated Senior Warrant, effective as of September 23, 2026, issued to the Philip & Daniele Barach Family Trust (incorporated by reference to Exhibit 4.4 to the current report on Form 8-K, filed with the Commission on September 28, 2026)
10.1
Settlement Agreement dated May 21, 2026 by and between Celularity Inc. and Helena Global Investment Opportunities 1 Ltd. (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K, filed with the Commission on May 28, 2026).
10.2
Loan
Agreement dated June 29, 2026 by and between Celularity, Inc. and the Philip & Daniele Barach Family Trust (incorporated
by reference to Exhibit 10.1 to the current report on Form 8-K, filed with the Commission on June 30, 2026).
10.3*
Securities Purchase Agreement, dated as of September 23, 2026, by and among Celularity Inc. and the purchasers party hereto (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K, filed with the Commission on September 28, 2026)
10.4*
Security Agreement, dated as of September 23, 2026, by and among Celularity Inc., the other grantors party thereto and Philip Barach, as collateral agent(incorporated by reference to Exhibit 10.2 to the current report on Form 8-K, filed with the Commission on September 28, 2026)
10.5*
Registration Rights Agreement, dated as of September 23, 2026, by and among Celularity Inc. and the purchasers party thereto (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K, filed with the Commission on September 28, 2026)
10.6*
Board Rights Agreement dated as of September 23, 2026, by and between Celularity Inc. and Philip & Daniele Barach Family Trust (incorporated by reference to Exhibit 10.4 to the current report on Form 8-K, filed with the Commission on September 28, 2026)
10.7*
Intercreditor Agreement dated as of September 23, 2026 by and among the parties thereto (incorporated by reference to Exhibit 10.5 to the current report on Form 8-K, filed with the Commission on September 28, 2026)
10.8*
Settlement, Release and Termination Agreement, dated September 18, 2026 by and between Celularity Inc. and Helena Global Investment Opportunities 1 Ltd. (incorporated by reference to Exhibit 10.6 to the current report on Form 8-K, filed with the Commission on September 28, 2026)
31.1
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
The cover page for the Company’s quarterly report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101
#
Indicates a management contract or any compensatory plan, contract or arrangement.
*
The certifications attached as Exhibits 32.1 and 32.2 accompanying this report are not deemed filed with the Securities and Exchange
Commission and are not to be incorporated by reference into any filing of Celularity Inc. under the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this report, irrespective of any general
incorporation language contained in such filing.
+
Celularity Inc. has omitted certain schedules and exhibits pursuant to Item 601(a)(5) of Regulation S-K and shall furnish supplementally
to the Securities and Exchange Commission copies of any of the omitted schedules and exhibits upon request by the SEC.
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.
CELULARITY
INC.
Date:
October 20, 2026
By:
/s/
Robert J. Hariri
Robert
J. Hariri, M.D., Ph.D.
Chief Executive Officer
(Principal Executive
Officer)
Date:
October 20, 2026
By:
/s/
John M. Sprague
John
M. Sprague
Chief
Financial Officer
(Principal Financial
and Accounting Officer)
39

----- ex31-1.htm -----
EX-31.1
2
ex31-1.htm
EX-31.1
Exhibit
31.1
CERTIFICATION
PURSUANT TO
RULES
13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I,
Robert J. Hariri, certify that:
1.
I have reviewed this Quarterly
Report on Form 10-Q of Celularity Inc.;
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 presented in this report;
4.
The registrant’s
other certifying officer(s) and I are 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 13a-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 financial 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.
The registrant’s
other certifying officer(s) and 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 involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.
Date:
October 20, 2026
By:
/s/
Robert J. Hariri
Robert
J. Hariri, M.D., Ph.D.
Chief
Executive Officer
(Principal
Executive Officer)

----- ex31-2.htm -----
EX-31.2
3
ex31-2.htm
EX-31.2
Exhibit
31.2
CERTIFICATION
PURSUANT TO
RULES
13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I,
John M. Sprague, certify that:
1.
I have reviewed this Quarterly
Report on Form 10-Q of Celularity Inc.;
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 presented in this report;
4.
The registrant’s
other certifying officer(s) and I are 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 13a-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 financial 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.
The registrant’s
other certifying officer(s) and 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 involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.
Date:
October 20, 2026
By:
/s/
John M. Sprague
John
M. Sprague
Chief
Financial Officer
(Principal
Financial and Accounting Officer)

----- ex32-1.htm -----
EX-32.1
4
ex32-1.htm
EX-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 the Quarterly Report of Celularity Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2026,
as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)
The Report fully complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”);
and
(2)
The information contained
in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date:
October 20, 2026
By:
/s/
Robert J. Hariri
Robert
J. Hariri, M.D., Ph.D.
Chief
Executive Officer
(Principal
Executive Officer)
This
certification accompanies the Quarterly Report on Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange
Commission and is not to be incorporated by reference into any filing of Celularity Inc. under the Securities Act of 1933, as amended,
or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained
in such filing. A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided
to Celularity Inc. and will be retained by Celularity Inc. and furnished to the Securities and Exchange Commission or its staff upon
request.

----- ex32-2.htm -----
EX-32.2
5
ex32-2.htm
EX-32.2
Exhibit
32.2
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 the Quarterly Report of Celularity Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2026,
as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)
The Report fully complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”);
and
(2)
The information contained
in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date:
October 20, 2026
By:
/s/
John M. Sprague
John
M. Sprague
Chief
Financial Officer
(Principal Financial and
Accounting Officer)
This
certification accompanies the Quarterly Report on Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange
Commission and is not to be incorporated by reference into any filing of Celularity Inc. under the Securities Act of 1933, as amended,
or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained
in such filing. A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided
to Celularity Inc. and will be retained by Celularity Inc. and furnished to the Securities and Exchange Commission or its staff upon
request.