1.
Nature of Business
Celularity
Inc., (“Celularity” or the “Company”), formerly known as GX Acquisition Corp, was incorporated in Delaware
on August 24, 2018. Celulairty is a cellular and regenerative medicine company focused on the development of products derived from
post-partum human placental tissue. The Company’s activities include placental-derived allogeneic cellular therapies,
placental-derived biomaterial products, and biobanking services.
Going
Concern
The
Company has evaluated whether there are certain conditions and 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 that the consolidated financial statements
are issued.
The
Company has minimal cash on hand, does 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. The Company has 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 the Company will achieve cash positive operations.
As
of the date the accompanying consolidated financial statements were filed, management evaluated the significance
of the following adverse conditions and events in considering its ability to continue as a going concern:
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Since its inception, the
Company has incurred significant operating losses and net cash used in operating activities. For the year ended December 31, 2025, the
Company incurred a net loss of $91,716 and
net cash used in operating activities of $13,254.
As of December 31, 2025, the Company had an accumulated deficit of $991,483
and also had a working capital deficit of $68,440.
The Company expects to continue to incur significant operating losses and use net cash for operations for the foreseeable future. |
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As of the date the accompanying
consolidated financial statements were issued the Company is experiencing difficulties generating the liquidity and working capital
necessary to sustain the Company’s current levels of operating activities. |
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The Company expects to
incur substantial expenditures to fund its investments for the foreseeable future. In order to fund these investments, the Company
will need to secure additional sources of outside capital. While the Company is actively seeking to secure additional outside
capital (and has historically been able to successfully secure such capital), as of the issuance date, additional outside capital
sufficient to fund operations for the next six months has not been secured or was deemed probable of being secured. In addition,
management can provide no assurance that the Company will be able to secure significant additional outside capital in the future or
on terms that are acceptable to the Company. Absent an ability to secure additional outside capital in the very near term, the
Company will be unable to meet its obligations as they become due over the next 12 months beyond this filing. |
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On
April 16, 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-K for the period ended December
31, 2025. The Company intends to regain compliance; however, there can be no assurance that it will be able to do so within any applicable
period or that its securities will continue to be listed on Nasdaq. |
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In the event the Company
is unable to secure additional outside capital to fund the Company’s obligations when they become due over the next 12 months
beyond the filing date, which includes the funds needed to repay the Company’s outstanding debt, management will be required
to seek other strategic alternatives, which may include, among others, a significant curtailment of the Company’s operations,
a sale of certain of the Company’s assets, a sale of the entire Company to strategic or financial investors, and/or allowing
the Company to become insolvent by filing for bankruptcy protection under the provisions of the U.S. Bankruptcy Code. |
These
uncertainties raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated
financial statements have been prepared on the basis that the Company will continue to operate as a going concern, which contemplates
that the Company will be able to realize assets and settle liabilities and commitments in the normal course of business for the foreseeable
future. Accordingly, the accompanying consolidated financial statements do not include any adjustments that may result from the outcome
of these uncertainties.
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