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

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

~~1325 Avenue of the Americas, 25th Floor~~(Registrant’s telephone number, including area code)

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

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 ~~August 7, 2019, 28,750,000~~May 18, 2023, the registrant had 180,530,272 shares of Class A common stock, $0.0001 par value ~~$0.0001~~ per share, ~~were issued and outstanding and 7,187,500 shares~~outstanding.

Table of ~~Class B common stock, par value $0.0001 per share, were issued and outstanding.~~Contents

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.

The Celularity logo, Celularity IMPACT, Biovance, Interfyl, Lifebank, CentaFlex and other trademarks or service marks of Celularity Inc. appearing in this quarterly report are the property of Celularity Inc. This quarterly report on Form 10-Q also contains registered marks, trademarks and trade names of other companies. All other trademarks, registered marks and trade names appearing herein are the property of their respective holders

Some of the statements contained in this quarterly report on Form 10-Q, including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations", 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:

These forward-looking statements are based on information available as of the date of this quarterly report, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties that could 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. Some factors that could cause actual results to differ include:

For a further discussion of these and other factors that could cause our future results, performance or transactions to differ significantly from those expressed in any forward-looking statement, please see the section titled “Risk Factors” in our annual report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2023, or the 2022 Form 10-K. Given these risks, you should not place undue reliance on any forward-looking statements, which are based only on information currently available to us (or to third parties making the forward-looking statements). While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. Except to the extent required by applicable law, we are under no obligation (and expressly disclaim any such obligation) to update or revise their forward-looking statements whether as a result of new information, future events, or otherwise.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~The accompanying notes are an integral part of the condensed financial statements.~~

~~CONDENSED STATEMENT OF CASH FLOWS~~(1) Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02” or “ASC 842”)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Nature of Business

~~GX ACQUISITION CORP.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~JUNE 30, 2019~~

~~(Unaudited)~~

~~NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS~~

Celularity Inc., (“Celularity” or the “Company”), formerly known as GX Acquisition Corp. ~~(the “Company”~~(“GX”) is, was a blank check company incorporated in Delaware on August 24, ~~2018.~~2018. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more ~~businesses~~businesses.

On July 16, 2021 (the “Closing Date”), the Company consummated the previously announced merger pursuant to the Merger Agreement and Plan of Reorganization, dated January 8, 2021 (the “Merger Agreement”), by and among GX, Alpha First Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of GX (“First Merger Sub”), Celularity LLC (f/k/a Alpha Second Merger Sub LLC), a Delaware limited liability company and a direct, wholly owned subsidiary of GX (“Second Merger Sub”), and the entity formerly known as Celularity Inc., incorporated under the laws of the state of Delaware on August 29, 2016 (“Legacy Celularity”). The Company refers to these mergers as the “Mergers” and, collectively with the other transactions described in the Merger Agreement, the “Business Combination”. Upon completion of the merger transaction GX changed its name to Celularity Inc. The business combination was accounted for as a reverse recapitalization in conformity with accounting principles generally accepted in the United States.

Description of Business

Celularity is a biotechnology company leading the next evolution in cellular medicine by developing off-the-shelf placental-derived allogeneic cell therapies for the treatment of cancer and immune and infectious diseases. Celularity is developing a pipeline of off-the-shelf placental-derived allogeneic cell therapy product candidates including T cells engineered with a chimeric antigen receptor ("CAR")~~.The~~, natural killer ("NK"), cells, and mesenchymal-like adherent stromal cells ("MLASCs") and exosomes. These therapeutic candidates target indications across cancer, infectious and degenerative diseases. Celularity believes that by harnessing the placenta’s unique biology and ready availability, it will be able to develop therapeutic solutions that address a significant unmet global need for effective, accessible and affordable therapeutics. Celularity also actively develops and markets biomaterial products derived from the placenta. Prior to 2023, Celularity marketed those products domestically primarily serving the orthopedic and wound care markets. Celularity now intends to market placental biomaterials outside of the U.S. with an initial focus on markets in the Middle East and North Africa. Celularity's biomaterials business today is comprised primarily of the sale of its Biovance and Interfyl products, directly or through its distribution network. Biovance is decellularized, dehydrated human amniotic membrane derived from the placenta of a healthy, full-term pregnancy. It is an intact, natural extracellular matrix that provides a foundation for the wound regeneration process and acts as a scaffold for restoration of functional tissue. Interfyl is human connective tissue matrix derived from the placenta of a healthy, full-term pregnancy. It is used by a variety of medical specialists to fill soft tissue deficits resulting from wounds, trauma, or surgery. Celularity is developing new placental biomaterial products to deepen the commercial pipeline beyond Biovance and Interfyl. The Company also plans to leverage its core expertise in cellular therapeutic development and manufacturing to generate revenues by providing contract manufacturing and development services to third parties. The initial focus of this new service offering will be to assist development stage cell therapy companies with the development and manufacturing of their therapeutic candidates for clinical trials. In January 2023, the Company announced reprioritization of efforts, which resulted in a reduction of approximately one-third of its workforce as of March 2023.

Celularity is headquartered in Florham Park, NJ. Legacy Celularity acquired Anthrogenesis Corporation (“Anthrogenesis”) in August 2017 from Celgene Corporation (“Celgene”), a global biotechnology company that merged with Bristol Myers Squibb Company. Previously, Anthrogenesis operated as Celgene Cellular Therapeutics, Celgene’s cell therapy division. Celularity currently has two active clinical trials and is in the process of working with the U.S. Food and Drug Administration (“FDA”) to resolve its questions on an investigational new drug application (“IND”) it submitted in the first quarter of 2022 before commencing an additional clinical trial.

The Celularity IMPACT platform capitalizes on the benefits of placenta-derived cells to target multiple diseases, and provides seamless integration, from bio sourcing through manufacturing cryopreserved and packaged allogeneic cells at its purpose-built U.S.-based 147,215 square foot facility. Celularity’s placental-derived cells are allogeneic, meaning they are intended for use in any patient, as compared to autologous cells, which are derived from an individual patient for that patient’s use. From a single source material, the postpartum human placenta, the Company derives five allogeneic cell or extracellular vesicle types: T cells, unmodified NK cells, genetically modified NK cells, MLASCs and exosomes, which are used in seven key cell therapeutic programs—CYCART-19, CYCART-201, CYNK-001, CYNK-301, CYNK-302, APPL-001, and pEXO-001. CYCART-19 is a placental-derived CAR-T cell therapy, in development for the treatment of B-cell malignancies, initially targeting the cluster of differentiation 19 ("CD19"), receptor, the construct and related CARs for which are in-licensed from Sorrento. In the first quarter of 2022, the Company submitted an IND to investigate CYCART-19 for treatment of B-cell malignancies and in late May 2022, received formal written communication from FDA requesting additional information before it can proceed with the planned Phase 1/2 clinical trial. The Company is in the process of working with the FDA in an ~~early stage~~effort to resolve its questions as promptly as possible. The Company expects to commence the trial, if the IND is cleared by FDA, and ~~emerging growth company~~sufficient funding is available, in second half of 2023. The Company also expects to progress

CYCART-201, its genetically modified T-cell expressing CD16 with a T-cell receptor ("TCR"), knockout in combination with monoclonal antibodies ("mAbs"), in non-Hodgkin's lymphoma ("NHL"), and in solid tumors. CYNK-001 is a placental-derived unmodified NK cell. In 2022, the Company had active and approved clinical trials under development for the treatment of acute myeloid leukemia ("AML"), a blood cancer, and for glioblastoma multiforme ("GBM"), a solid tumor cancer. The Company will also advance CYNK-301 as ~~such,~~its next generation CAR-NK that has the potential to overcome some of the challenges faced by NK therapies in treating relapse refractory AML ("rrAML"). Due to a need to prioritize corporate resources, in January 2023 the Company announced its intention to cease recruitment in the GBM and the HER2+ gastric trials. In addition, in April 2023, the Company announced based on the preliminary results of the phase 1 trial data of CYNK-001, the AML trial will be closed to further enrollment. The Company will however, continue to advance its solid tumor research programs. CYNK-302 is a next generation CAR-NK being developed in solid tumors with an initial focus on non-small cell lung cancer ("NSCLC"), an area of continued high unmet need. APPL-001 is a placenta-derived MLASC being developed for the treatment of Crohn’s disease, and other degenerative diseases. pExo-001 is placenta-derived exosome being developed for the treatment of osteoarthritis.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with governmental regulations and the ability to secure additional capital to fund operations. Drug candidates currently under development will require significant additional approval prior to commercialization, including extensive preclinical and clinical testing and regulatory approval. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

Going Concern

In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) (“ASU 205-40”), 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 condensed consolidated financial statements are issued.

As an emerging clinical-stage biotechnology company, Celularity is subject to certain inherent risks and uncertainties associated with the development of an enterprise. In this regard, since the Company’s inception, substantially all of management’s efforts have been devoted to making investments in research and development including basic scientific research into placentally-derived allogeneic cells, pre-clinical studies to support its current and future clinical programs in cellular therapeutics, and clinical development of its cell programs as well as facilities and selling, general and administrative expenses that support its core business operations (collectively the ~~risks associated with early stage~~“investments”), all at the expense of the Company’s short-term profitability. The Company has historically funded these investments through limited revenues generated from its biobanking and ~~emerging growth companies.~~degenerative disease businesses and issuances of equity and debt securities to public and private investors (these issuances are collectively referred to as “outside capital”). Notwithstanding these efforts, management can provide no assurance that the Company’s research and development and commercialization efforts will be successfully completed, or that adequate protection of the Company’s intellectual property will be adequately maintained. Even if these efforts are successful, it is uncertain when, if ever, the Company will generate significant sales or operate in a profitable manner to sustain the Company’s operations without needing to continue to rely on outside capital. Continued decline in the Company’s share price and further discontinuation of clinical trials could result in impairment of goodwill or long-lived assets in a future period.

As of ~~June 30, 2019,~~the date the accompanying condensed consolidated financial statements were issued (the “issuance date”), management evaluated the significance of the following adverse conditions and events in accordance with ASU 205-40:

•

Since its inception, the Company has incurred significant operating losses and net cash used in operating activities. For the three months ended March 31, 2023, the Company incurred a net operating loss of $63,870 and net cash used in operating activities of $14,995. As of March 31, 2023, the Company had ~~not yet commenced any operations. All activity~~an accumulated deficit of $709,513. The Company expects to continue to incur significant operating losses and use net cash for operations for the ~~period August 24, 2018 (inception) through June 30, 2019 relates~~foreseeable future.

•

As of the issuance date, the Company had approximately $5,700 of unrestricted cash and cash equivalents available to fund the Company’s ~~formation,~~operations and no available additional sources of outside capital to sustain the ~~initial public offering (the “Initial Public Offering”), which is described below, and identifying a target company~~Company’s operations for a ~~Business Combination.~~ period of 12 months beyond the issuance date.

•

The Company ~~will not generate any operating revenues until after~~expects to incur substantial expenditures to fund its investments for the ~~completion of its initial Business Combination, at~~foreseeable future. In order to fund these investments, the ~~earliest. The~~ Company will ~~generate non-operating income in the form~~need to secure additional sources of ~~interest income from the proceeds derived from the Initial Public Offering.~~

~~The registration statement for the Company’s Initial Public Offering was declared effective on May 20, 2019. On May 23, 2019,~~outside capital. While the Company ~~consummated the Initial Public Offering of 28,750,000 units (the “Units” and, with respect~~is actively seeking to ~~the shares of Class A common stock included in the Units sold, the “Public Shares”)~~secure additional outside capital (and has historically been able to successfully secure such capital), ~~which includes the full exercise by the underwriter~~as of the ~~over-allotment option to purchase an~~issuance date, no additional ~~3,750,000 Units, at $10.00 per Unit, generating gross proceeds~~outside capital has been secured or was deemed probable of ~~$287,500,000, which is described in Note 3.~~

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 7,000,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Company’s sponsor, GX Sponsor LLC (the “Sponsor”), generating gross proceeds of $7,000,000, which is described in Note 4.

~~Transaction costs amounted to $16,473,117, consisting of $5,000,000 of underwriting fees, $10,812,500 of deferred underwriting fees and $660,617 of other offering costs.~~being secured. In addition, ~~$1,218,001 of cash was held outside of the Trust Account (as defined below) and is available for working capital purposes.~~

Following the closing of the Initial Public Offering on May 23, 2019, an amount of $287,500,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), which have been invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.

~~The Company’s~~ management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. NASDAQ rulescan provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (as defined below) (less any deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the signing a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to ~~successfully effect a Business Combination.~~secure additional outside capital in the future or on

~~The~~

terms that are acceptable to the Company. Absent an ability to secure additional outside capital in the very near term, the Company will ~~provide~~be unable to meet its ~~holders of~~obligations as they become due over the ~~outstanding Public Shares (the “public shareholders”) with~~next 12 months beyond the ~~opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i)~~issuance date.

•

As disclosed in Note 16, in connection with clinical data received in April 2023, the Company expects to incur a ~~shareholder meeting called~~full impairment charge on its CYNK-001 acquired in-process research and development ("IPR&D") asset for $89,100 and will be evaluating the potential impact on any further goodwill impairment on the Cell Therapy reporting unit as well as analyzing the potential impact for any impairment for any other long-lived assets for the quarter ended June 30, 2023.

•

As disclosed in Note 7, the Company had approximately $32,400 of principal borrowings outstanding under a financing arrangement referred to ~~approve~~as the ~~Business Combination or (ii) by means of a tender offer. In connection~~PPA with a ~~proposed Business Combination,~~private investor, Yorkville, as of March 31, 2023. These borrowings are scheduled to mature in September 2023 absent Yorkville’s election to convert some or all of the borrowings into shares of the Company’s Class A common stock. On February 22, 2023, Yorkville provided notice to the Company ~~may seek shareholder approval~~that a “triggering event” had occurred, as provided for under the terms of the PPA. As a ~~Business Combination at~~result of this triggering event, the Company is now required to make repayments of $6,000 per month plus a ~~meeting called~~payment premium of 5% of the principal amount being paid and all outstanding accrued and unpaid interest (collectively the “repayment amount”). On March 24, 2023, the Company paid $1,950 of the repayment amount owed to Yorkville. On April 10, 2023, the Company paid $5,500 to repay Yorkville the remaining balance on the first trigger payment and a partial payment towards the second for ~~such purpose at which shareholders may seek~~approximately $900. In April 2023, the Company and Yorkville agreed to ~~redeem their shares, regardless~~defer the remaining second repayment amount owed of ~~whether they vote for or against a Business Combination.~~approximately $5,600 to May 14, 2023. On May 16, 2023, the Company repaid the $5,600 remaining balance due on the second trigger payment. The Company ~~will proceed with~~owes Yorkville a Business Combination only if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation of a Business Combination and, if the Company seeks shareholder approval, a majoritythird trigger payment on June 14, 2023 for approximately $6,600 as of the ~~outstanding shares voted are voted in favor of the Business Combination.~~

issuance date. If the Company ~~seeks shareholder approval~~fails to secure a waiver from Yorkville and fails to pay the remaining repayment amount currently due, Yorkville could deem such non-payment an event of ~~a Business Combination~~default under the PPA. If Yorkville deems such non-payment an event of default, Yorkville may, at its discretion, exercise its rights and ~~it does not conduct redemptions pursuant to~~remedies as provided in the ~~tender offer rules,~~PPA which may include, among others, accelerating the Company’s Amended and Restated Certificate of Incorporation provides that, a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13repayment of the ~~Securities Exchange Act~~total principal due under the PPA (approximately $32,400 as of ~~1934,~~March 31, 2023 or approximately $21,800 as ~~amended (the “Exchange Act”))~~of issuance date), ~~will be restricted from seeking redemption rights with respect to 15%~~ plus accrued and unpaid interest and the 5% premium, and/or ~~more of the Public Shares without the Company’s prior written consent.~~

~~GX ACQUISITION CORP.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~JUNE 30, 2019~~

~~(Unaudited)~~

The public shareholders will be entitled to redeem their shares for a pro rata portion of the amount then in the Trust Account (initially $10.00 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released toforce the Company to pay its tax obligations). The per-share amount to be distributed to shareholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 6). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation, offer such redemption pursuant to the tender offer rules of the Securities and Exchange Commission (the “SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination.

The Company’s Sponsor has agreed (a) to vote its Founder Shares (as defined in Note 5), the common stock included in the Private Units (the “Private Shares”) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination, (b) not to propose an amendment to the Company’s Amended and Restated Certificate of Incorporation with respect to the Company’s pre-Business Combination activities prior to the consummation of a Business Combination unless the Company provides dissenting public shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment; (c) not to redeem any shares (including the Founder Shares) and Private Placement Warrants (including underlying securities) into the right to receive cash from the Trust Account in connection with a shareholder vote to approve a Business Combination (or to sell any shares in a tender offer in connection with a Business Combination if the Company does not seek ~~shareholder approval in connection therewith) or a vote to amend~~protection under the provisions of the U.S. Bankruptcy Code. The Company is also seeking stockholder approval to lower the floor price at which shares may be sold to Yorkville pursuant to the PPA to $0.50.

•

On March 14, 2023, the Company received a notice from the Nasdaq notifying the Company that they no longer comply with the minimum bid price requirement for continued listing on the Nasdaq Capital Market because the closing bid price for the Company’s ~~Amended~~Class A common stock has fallen below $1.00 per share for the last 30 consecutive business days. The Company has a period of 180 calendar days, or until September 11, 2023, to regain compliance with the minimum bid price requirement. The Company intends to actively monitor the closing bid price of its Class A common stock and ~~Restated Certificate of Incorporation relating~~will evaluate available options to ~~shareholders’ rights of pre-Business Combination activity and (d)~~regain compliance with the minimum bid requirement. However, management can provide no assurance that the Founder Shares and Private Placement Warrants (including underlying securities) shall not participate in any liquidating distributions upon winding up if a Business Combination is not consummated. However, the SponsorCompany will be ~~entitled~~able to ~~liquidating distributions from~~regain compliance with the ~~Trust Account~~minimum bid requirement during the 180-day compliance period, secure a second period of 180 days to regain compliance, or maintain compliance with ~~respect to any Public Shares purchased during or after~~ the ~~Initial Public Offering if~~other Nasdaq listing requirements. In the ~~Company fails to complete its Business Combination.~~

~~The Company will have until May 23, 2021 to complete a Business Combination (the “Combination Period”). If~~event the Company is unable to ~~complete a Business Combination within~~regain or maintain compliance with the ~~Combination Period,~~Nasdaq listing requirements, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approvalliquidity of the ~~remaining stockholders~~Company's publicly traded securities will be adversely affected and the Company’s ~~board of directors, proceed~~ability to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law. The underwriter has agreed to waive its rights to the deferred underwriting commission held in the Trust Account insecure additional outside capital through public markets will be adversely affected.

•

In the event the Company ~~does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available~~is unable to secure additional outside capital to fund the ~~redemption~~Company’s obligations when they become due over the next 12 months beyond the issuance date, which includes the funds needed to repay the outstanding principal on the PPA (plus unpaid accrued interest and the 5% premium) that has become due and will become fully due in September 2023, and/or obtain a waiver to defer the remaining repayment amount currently due to Yorkville, and/or regain compliance with the Nasdaq listing requirements, management will be required to seek other strategic alternatives, which may include, among others, a significant curtailment of the ~~Public Shares. In~~Company’s operations, a sale of certain of the ~~event~~Company’s assets, a sale of ~~such distribution, it is possible~~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 condensed consolidated financial statements have been prepared on the basis that the ~~per share value of the assets remaining available for distribution~~Company will ~~be less than the Initial Public Offering price per Unit ($10.00).~~

~~Our Sponsor has agreed~~continue to operate as a going concern, which contemplates that ~~it will be liable to~~ the Company if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entering into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the day of liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriter of this offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and believe that our Sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our Sponsor would be able to ~~satisfy those obligations. None~~realize assets and settle liabilities and commitments in the normal course of ~~our officers or directors will indemnify~~business for the ~~Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.~~foreseeable future. Accordingly, the accompanying condensed consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties.

Summary of Significant Accounting Policies

~~GX ACQUISITION CORP.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~JUNE 30, 2019~~

~~(Unaudited)~~

~~NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

Basis of ~~presentation~~Presentation

The ~~accompanying~~Company’s unaudited condensed consolidated financial statements ~~have been~~are prepared in accordance with accounting principles generally accepted in the United States ~~of America~~ (“GAAP”) ~~for interim~~. 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 ~~and~~presented herein reflects all financial information that, in ~~accordance with~~ the ~~instructions to Form 10-Q and Article 8~~opinion of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotesmanagement, is necessary for a ~~complete presentation~~fair statement of consolidated financial position, results of operations or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The ~~accompanying unaudited~~Company’s condensed consolidated financial statements are prepared in accordance with the U.S. Securities and Exchange Commission’s 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 ~~prospectus~~annual financial statements as ~~filed with~~of and for the ~~SEC on May 21, 2019, as well as~~year ended December 31, 2022.

In the opinion of management, the accompanying interim financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements) considered necessary to present fairly the Company’s ~~Current Reports on Form 8-K,~~financial position as ~~filed with~~of March 31, 2023, and its results of operations, statement of changes in stockholder’s equity and cash flows for the ~~SEC onMay 24, 2019~~three months ended March 31, 2023 and~~May 30, 2019. The interim~~ 2022. Operating results for the three ~~and six~~ months ended ~~June 30, 2019~~March 31, 2023, are not necessarily indicative of the results tothat may be expected for the year ending December 31, 2023. The interim financial statements, presented herein, do not contain the required disclosures under GAAP for annual financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s annual audited financial statements and related notes as of and for the year ended December 31, ~~2019~~2022 included in the Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 31, 2023, (the “2022 Form 10-K”).

Use of Estimates

The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with GAAP 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 impairment assessment, the valuation of inventory, contingent consideration, short-term debt, determination of incremental borrowing rates, accrual of research and development expenses, and the valuations of 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 carried at fair value under GAAP. 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 carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

• Level 1 — 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.

Comprehensive Income (Loss)

Comprehensive income (loss) refers to revenues, expenses, gains and losses that under U.S. GAAP are included in comprehensive income (loss) but are excluded from net income (loss) as these amounts are recorded directly as an adjustment to accumulated other comprehensive income (loss). The Company’s only component of other comprehensive income (loss) is comprised of the portion of the total change in fair value of indebtedness accounted for under the fair value option that is attributable to changes in instrument-specific

credit risk. During the three months ended March 31, 2023, the Company recorded instrument-specific credit risk income of $2,810 and reclassified $152 from accumulated other comprehensive income to other expense on the condensed consolidated statements of operations upon short-term debt conversion. These amounts have been recorded as a separate component of stockholders’ equity. During the three months ended March 31, 2022, the Company did not have a component of other comprehensive income (loss).

Net Loss per Share

Basic net income (loss) per share of common stock is computed by dividing net income (loss) 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. However, potential common shares are excluded if their effect is anti-dilutive. For diluted net income (loss) per share in periods where the Company has a net loss, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive.

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of Class A common stock outstanding, prior to the use of the two-class method, as they would be anti-dilutive:


	For the Three Months Ended March 31,
	2023		2022
Stock options		24,744,009		23,999,206
Restricted stock units		5,814,980		517,616
Warrants		43,590,201		29,404,809
Convertible debt		41,161,480		-
		115,310,670		53,921,631

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources in assessing performance. The Company manages its operations through an evaluation of three distinct businesses segments: Cell Therapy, Degenerative Disease and BioBanking. These segments are presented for the three months ended March 31, 2023 and 2022 in Note 14.

Allowance for Credit Losses and Concentrations of Credit Risk

With the adoption of ASU 2016-13 Financial Instruments — Credit Losses, as noted below, the Company recognizes credit losses based on a 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 ~~interim periods.~~economic conditions, and other factors that may affect its ability to collect from customers.

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and restricted cash. 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.

~~Emerging growth company~~

The Company is ~~an “emerging growth company,” as defined~~subject to credit risk from trade accounts receivable related to both degenerative disease product sales and biobanking services. All trade accounts receivables are a result from product sales and services performed in ~~Section 2(a)~~the United States. As of March 31, 2023, two of the ~~Securities Act, as modified by~~Company's customers comprised 63% of the Company's outstanding gross accounts receivable. As of December 31, 2022, three of the Company's customers comprised 71% of the Company's outstanding gross accounts receivable. During the three months ended March 31, 2023, the Company had two customers provide for 36% of revenue. During the three months ended March 31, 2022, the Company had three customers provide for 67% of revenue.

Emerging Growth Company

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

~~Further, Section 102(b)(1) of the JOBS Act~~ exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act of 1933, as amended, registration statement declared effective or do not have a class of securities registered under the Securities Exchange ~~Act)~~Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that aan emerging growth company can elect to opt out of the extended transition period and comply with the

requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison of the Company’s condensed consolidated financial statements with another public company ~~which~~that is neither an emerging growth company nor an emerging growth company ~~and which~~that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Reclassifications

~~Use of estimates~~

~~The preparation of condensed financial statements in conformity~~Certain prior period amounts have been reclassified to conform with ~~GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of~~current year presentation on the condensed ~~financial~~consolidated balance sheets and condensed consolidated statements of cash flows between accrued expenses and accrued research and development ("R&D") software to separately present the ~~reported amounts of revenues and expenses~~Palantir cease-use liability recorded during the ~~reporting period.~~three months ended March 31, 2023 (See Note 9 for further information).

Recently Adopted Accounting Pronouncements

~~Making estimates requires management to exercise significant judgment. It~~In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (“ASU 2016-13”), which changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. ASU 2016-13 also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is ~~at least reasonably possible that~~effective for annual periods beginning after December 15, 2022 (fiscal year 2023 for the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly fromCompany), and interim periods within those ~~estimates.~~

~~Cash and cash equivalents~~

periods, with early adoption permitted. The Company ~~considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.~~adoptedASU 2016-13 effective January 1, 2023. The ~~Company~~standard did ~~not~~not have ~~any cash equivalents as of June 30, 2019 and December 31, 2018.~~

~~Marketable securities held in Trust Account~~

~~At June 30, 2019, substantially all of~~a material impact on the ~~assets held in the Trust Account were held in U.S. Treasury Bills.~~

7unaudited condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

~~GX ACQUISITION CORP.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~JUNE 30, 2019~~

~~(Unaudited)~~

~~Common stock subject to possible redemption~~

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheet.

~~Income taxes~~

The Company complies with the accounting and reporting requirements of ASC Topic 740 “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2019 and December 31, 2018. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

~~Net loss per common share~~

Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at June 30, 2019, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 21,375,000 shares of common stock in the calculation of diluted net loss per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented.

~~GX ACQUISITION CORP.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~JUNE 30, 2019~~

~~(Unaudited)~~

~~Reconciliation of net loss per common share~~

The Company’s net income is adjusted for the portion of income that is attributable to common stock subject to possible redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted net loss per common share is calculated as follows:

Three Months
Ended
June 30, Six Months
Ended
June 30,
2019 2019
Net income $ 634,660 $ 634,539
Less: Income attributable to common stock subject to possible redemption (664,565 ) (664,565 )
Adjusted net loss $ (29,905 ) $ (30,026 )

Weighted average shares outstanding, basic and diluted 7,258,681 7,378,674

Basic and diluted net loss per common share $ (0.00 ) $ (0.00 )

~~Concentration of credit risk~~

Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. At June 30, 2019 and December 31, 2018, the Company had not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

~~Fair value of financial instruments~~

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.

~~Recently~~recently issued accounting standards

~~Management does not believe that any recently issued, but~~ not yet ~~effective, accounting pronouncements, if currently~~ adopted which would have a material effect on the Company’s ~~condensed~~ financial statements.

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 March 31, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents - money market funds	$	7,554	$	—	$	—	$	7,554
Convertible note receivable		—		—		2,115		2,115
	$	7,554	$	—	$	2,115	$	9,669

Liabilities:
Acquisition-related contingent consideration obligations	$	—	$	—	$	87,013	$	87,013
Contingent stock consideration		—		—		76		76
Short-term debt - Yorkville		—		—		30,945		30,945
Warrant liability - May 2022 PIPE Warrants		—		—		491		491
Warrant liability - Sponsor Warrants		—		—		510		510
Warrant liability - Public Warrants		862		—		—		862
	$	862	$	—	$	119,035	$	119,897

~~NOTE~~10


	Fair Value Measurements as of December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents - money market funds	$	12,174	$	—	$	—	$	12,174
Convertible note receivable		—		—		2,514		2,514
	$	12,174	$	—	$	2,514	$	14,688

Liabilities:
Acquisition-related contingent consideration obligations	$	—	$	—	$	105,945	$	105,945
Contingent stock consideration		—		—		186		186
Short-term debt - Yorkville		—		—		37,603		37,603
Warrant liability - May 2022 PIPE Warrants		—		—		1,402		1,402
Warrant liability - Sponsor Warrants		—		—		1,190		1,190
Warrant liability - Public Warrants		1,006		—		—		1,006
	$	1,006	$	—	$	146,326	$	147,332

During the three months ended March 31, 2023 and 2022, there were no transfers between Level 1, Level 2 and Level 3. ~~INITIAL PUBLIC OFFERING~~

~~Pursuant~~The Company’s cash equivalents consisted of a money market funds. The money market fund was valued using inputs observable in active markets for similar securities, which represents a Level 1 measurement in the fair value hierarchy. The carrying values of accounts receivable, accounts payable, deferred revenue and other current liabilities approximate fair value in the accompanying condensed consolidated financial statements due to the ~~Initial Public Offering,~~short-term nature of those instruments. The Company believes that the carrying value of its long-term debt approximates fair value because the stated terms of this debt is consistent with current market rates.

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 as of March 31, 2023 and December 31, 2022:


	Balance as of December 31, 2022		Net transfers in to (out of) Level 3		Purchases, settlements and other net		Fair value adjustments			Balance as of March 31, 2023
Liabilities:
Acquisition-related contingent consideration obligations	$	105,945	$	—	$	—	$	(18,932	)	$	87,013


	Balance as of December 31, 2021		Net transfers in to (out of) Level 3		Purchases, settlements and other net		Fair value adjustments			Balance as of December 31, 2022
Liabilities:
Acquisition-related contingent consideration obligations	$	232,222	$	—	$	—	$	(126,277	)	$	105,945

The fair value of the liability to make potential future milestone and earn-out payments was estimated by the Company ~~sold 28,750,000 Units~~at each reporting date based, in part, on the results of a third-party valuation using a probability-weighted expected return method ("PWERM") for the regulatory milestones and a real options technique for commercial and royalty milestones based on various estimates and 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 condensed consolidated statements of operations. 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 all of the contingent consideration as a long-term liability in the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022. See Note 9, “Commitment and Contingencies”, for more information on contingent consideration.

Valuation of Warrant Liability

The warrant liability at March 31, 2023 is composed of the fair value of warrants to purchase shares of Company Class A common stock, par value $0.0001 per share ("Class A common stock" or "common stock"). The liability classified warrants were recorded at their respective Closing Date fair values based on a Black-Scholes option pricing model that utilizes inputs for: (i) value of the underlying asset, (ii) the exercise price, (iii) the risk-free rate, (iv) the volatility of the underlying asset, (v) the dividend yield of the underlying asset and (vi) maturity. The Black-Scholes option pricing model’s primary unobservable input utilized in determining the fair value of the liability classified warrants is the expected volatility of the Class A common stock. Prior to the Mergers, Legacy Celularity was historically a private company and lacks sufficient company-specific historical and implied volatility information for its stock. Therefore, it estimates 50% of its expected stock price volatility based on the historical volatility of publicly traded peer companies and 50% based on the Company's historical volatility. Inputs to the Black-Scholes option pricing model for the warrants are updated each reporting period to reflect fair value. The public warrants assumed upon the Business Combination (the “Public Warrants”) were recorded at the closing date fair value based on the close price of such warrants. Each subsequent reporting period, the Public Warrants are marked-to-market based on the period-end close price.

As of March 31, 2023 and December 31, 2022, the fair value of the warrant liabilities was $1,863 and $3,598, respectively. 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.

The following table provides a roll-forward of the aggregate fair values of the Company’s warrant liabilities for which fair values are determined using either Level 1 or Level 3 inputs:


Balance as of December 31, 2021	$	25,962
May 2022 PIPE warrant issuance		19,745
Gain recognized in earnings from change in fair value		(42,109	)
Balance as of December 31, 2022	$	3,598

Balance as of December 31, 2022	$	3,598
Gain recognized in earnings from change in fair value		(1,735	)
Balance as of March 31, 2023	$	1,863

The fair value of the liability classified warrants are as follows:


	March 31, 2023		December 31, 2022
Public Warrants	$	862	$	1,006
Sponsor Warrants		510		1,190
May 2022 PIPE Warrants		491		1,402
Total	$	1,863	$	3,598

Significant inputs for the Sponsor Warrants are as follows:


	March 31, 2023			December 31, 2022
Common share price	$	0.62		$	1.29
Exercise price	$	11.50		$	11.50
Dividend yield		0	%		0	%
Term (years)		3.3			3.5
Risk-free interest rate		3.78	%		4.16	%
Volatility		91.0	%		75.0	%

Significant inputs for the May 2022 PIPE Warrants are as follows:


	March 31, 2023			December 31, 2022
Common share price	$	0.62		$	1.29
Exercise price	$	8.25		$	8.25
Dividend yield		0	%		0	%
Term (years)		4.1			4.4
Risk-free interest rate		3.71	%		3.99	%
Volatility		89.6	%		81.2	%

Valuation of the Convertible Note Receivable

The convertible note receivable was received in connection with the disposition of the UltraMIST/MIST business in 2020. At any time on or after January 1, 2021, at the sole discretion of the Company, amounts outstanding under the convertible note receivable (including accrued interest) may be converted into Sanuwave common stock at a defined rate. The convertible promissory note was to be paid on or before August 6, 2021, however, remains outstanding in full at March 31, 2023. As of March 31, 2023 and December 31, 2022, the Company utilized Level 3 inputs on a probability weighted model based on outcomes of a default, repayment and conversion of the note. The measurement is based upon unobservable inputs supported by little or no market activity based on the Company’s own assumptions. The fair value of the convertible note receivable was $2,115 and $2,514 as of March 31, 2023 and December 31, 2022, respectively.

Significant inputs for the convertible note valuation model are as follows:


	March 31, 2023			December 31, 2022
Face value	$	4,000		$	4,000
Coupon rate	12% - 17%			12% - 17%
Stock price	$	0.04		$	0.02
Term (years)	.76 - 3.45			1.01 - 3.45
Risk-free interest rate		4.79	%		4.73	%
Volatility	n/a			n/a

Valuation of the Contingent Stock Consideration

The contingent stock consideration liability at March 31, 2023, is comprised of the fair value of potential future issuance of Class A common stock to CariCord participating shareholders pursuant to a settlement agreement signed during the year ended December 31, 2021. The fair value measurement of the contingent stock consideration obligation is determined using Level 3 inputs and is based on a PWERM. The measurement is largely 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 the contingent stock consideration obligation measured on a recurring basis using Level 3 inputs as of March 31, 2023 and December 31, 2022:


	Balance as of December 31, 2022		Net transfers in to (out of) Level 3		Purchases, settlements and other net		Fair value adjustments			Balance as of March 31, 2023
Liabilities:
Contingent stock consideration	$	186	$	—	$	—	$	(110	)	$	76


	Balance as of December 31, 2021		Net transfers in to (out of) Level 3		Purchases, settlements and other net		Fair value adjustments		Balance as of December 31, 2022
Liabilities:
Contingent stock consideration	$	-	$	—	$	—	$	186	$	186

The fair value of the liability to issue future shares of Class A common stock was estimated by the Company at each reporting date based on the results of a third-party valuation using a PWERM based on various inputs and assumptions, including the Company’s common share price, discount rates, and the probability of achieving specified future operational targets. The actual settlement of

contingent stock consideration could differ from current estimates based on the actual achievement of these specified targets and movements in the Company’s common share price.

At each reporting date, the Company revalues the contingent stock consideration obligation to estimated fair value and records changes in fair value as income or expense in the Company’s condensed consolidated statements of operations. Changes in the fair value of the contingent stock consideration obligation may result from changes in discount rates, changes in the Company’s common share price, and changes in probability assumptions with respect to the likelihood of achieving specified operational targets. The Company has classified all of the contingent stock consideration as a current liability in the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022.

Valuation of Short-Term Debt - Yorkville

The Company elected the fair value option to account for the financial instrument with Yorkville signed on September 15, 2022 (see Note 7). During the three months ended March 31, 2023, the Company applied a different valuation model for Yorkville given the movement in the Company's share price falling below the floor price and triggering of debt repayments. The estimate of the fairvalue was determined using a scenario analysis which incorporates various repayment and conversion scenarios and corresponding probabilities. The significant inputs to the scenario (PWERM) analysis used to determine the value of each scenario prior to weighting included the following (i) term between 0.25 to 0.46 years (ii) risk-free rate ranging between 4.85% to 4.92% and (iii) interest coupon rate from 6% to 15%. The estimate of the fair value as of December 31, 2022 was determined using a binomial lattice model. The fair value measurement of the debt is determined using Level 3 inputs and assumptions unobservable in the market. Changes in the fair value of debt that is accounted for at fair value, inclusive of related accrued interest expense, are presented as gains or losses in the accompanying condensed consolidated statements of operations and comprehensive income (loss) under change in fair value of debt. The portion of total changes in fair value of debt attributable to changes in instrument-specific credit risk are determined through specific measurement of periodic changes in the discount rate assumption exclusive of base market changes and are presented as a component of accumulated comprehensive income in the accompanying condensed balance sheets. The actual settlement of the short-term debt could differ from current estimates based on the timing of when and if Yorkville elects to convert amounts into common shares, potential cash repayment by the Company prior to maturity, and movements in the Company’s common share price.

The following table provides a roll-forward of the aggregate fair values of the Company’s Yorkville debt for which fair values are determined using Level 3 inputs:


Liabilities:
Balance as of December 31, 2022	$	37,603
Conversion of debt into common shares		(3,510	)
Principal repayments		(1,618	)
Fair value adjustment through earnings		1,280
Fair value adjustment through accumulated other comprehensive income		(2,810	)
Balance as of March 31, 2023	$	30,945

Significant inputs for the Yorkville short-term debt valuation model as of December 31, 2022 were as follows:


	December 31, 2022
Common share price	$	1.29
Credit spread		13.71	%
Dividend yield		0	%
Term (years)		0.71
Risk-free interest rate		4.75	%
Volatility		45.0	%
Discount yield		18.46	%

Inventory

The Company’s major classes of inventories were as follows:


	March 31, 2023			December 31, 2022
Raw materials	$	7,784		$	7,719
Work in progress		14,951			12,381
Finished goods		8,473			9,256
Inventory, gross		31,208			29,356
Less: inventory reserves		(1,138	)		(1,099	)
Inventory, net		30,070			28,257
Balance Sheet Classification:
Inventory		5,484			5,308
Inventory, net of current portion		24,586			22,949
	$	30,070		$	28,257

Inventory, net of current portion includes inventory expected to remain on-hand beyond one year from each balance sheet date presented.

Property and Equipment, Net

Property and equipment, net consisted of the following:


	March 31, 2023			December 31, 2022
Leasehold improvement	$	70,113		$	70,113
Laboratory and production equipment		14,433			14,433
Machinery, equipment and fixtures		7,780			7,780
Construction in progress		3,883			3,660
Property and equipment		96,209			95,986
Less: Accumulated depreciation and amortization		(22,153	)		(20,331	)
Property and equipment, net	$	74,056		$	75,655

Depreciation and amortization expense was $1,822 and $1,743 for the three months ended March 31, 2023 and 2022, respectively.

Goodwill and Intangible Assets, Net

During the three months ended March 31, 2023, the Company experienced a sustained decline in its stock price resulting in its market capitalization being less than the carrying value of its combined reporting units. The Company concluded the sustained decline in its stock price and decision to discontinue certain Cell Therapy clinical trials were triggering events during the quarter and performed a quantitative impairment test on goodwill and acquired IPR&D assets. Based on the results of the impairment analysis, the Company recognized a $29,633 goodwill impairment charge for the three months ended March 31, 2023, relating to the Cell Therapy reporting unit in its condensed consolidated statements of operations. During the three months ended March 31, 2022, no goodwill impairment was recognized.

The carrying values of goodwill assigned to the Company’s reporting units are as follows:



	Cell Therapy			Biobanking		Degenerative Disease		Total
Balance at December 31, 2022	$	112,347		$	7,347	$	-	$	119,694
Impairment(1)		(29,633	)		-		-		(29,633	)
Balance at March 31, 2023	$	82,714		$	7,347	$	-	$	90,061

(1)As of March 31, 2023 and December 31, 2022, the accumulated goodwill impairment for the Degenerative Disease reporting unit was $3,610 and for Cell Therapy the accumulated goodwill impairment was $29,633 and $0 as of March 31, 2023 and December 31, 2022, respectively.

Intangible Assets, Net

Intangible assets, net consisted of the following:


	March 31, 2023			December 31, 2022			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		(6,839	)		(6,549	)
Customer relationships		(1,501	)		(1,435	)
Trade names & trademarks		(288	)		(275	)
Reacquired rights		(3,412	)		(3,240	)
		(12,040	)		(11,499	)
Amortizable intangible assets, net		11,953			12,494

Non-amortized intangible assets
Acquired IPR&D product rights		108,500			108,500		indefinite
	$	120,453		$	120,994

For the three months ended March 31, 2023 and 2022, amortization expense for intangible assets was $541 and $541, respectively. No impairment charges were recorded on intangible assets for the three months ended March 31, 2023 and 2022.

Debt

Short-Term Debt - Yorkville

On September 15, 2022, the Company entered into a Pre-Paid Advance Agreement (the “PPA”) with YA II PN, Ltd. ("Yorkville"), pursuant to which the Company may request advances of up to $40,000 in cash from Yorkville (or such greater amount that the parties may mutually agree) (each, a “Pre-Paid Advance”) over an 18-month period, with an aggregate limitation of $150,000. Pre-Paid Advances are issued at a 2% discount, bear interest at an annual rate equal to 6% (increased to 15% in the event of default as described in the PPA) and may be offset by the issuance of shares of common stock, at Yorkville’s option, at a price per share calculated pursuant to the PPA, which in no event will be less than $0.75 per share. The issuance of the shares under the PPA is subject to certain limitations, including that the aggregate number of shares of common stock issued pursuant to the PPA cannot exceed 19.9% of the Company’s outstanding stock as of September 15, 2022, as well as a beneficial ownership limitation of 4.99%. Further, Yorkville agreed not to purchase any shares of common stock for 60 days following entry into the PPA, nor may Yorkville purchase more than $6,000 of shares of common stock during a 30-day period, in each case at a price per share less than the Fixed Price, as defined in the PPA. In the event the daily volume weighted average price ("VWAP") of the Class A common stock is below $0.75 (the "floor price") for any five of seven consecutive trading days, the Company will pay Yorkville a monthly cash payment of $6,000, plus any accrued and unpaid interest along with a 5.0% redemption premium until such time as the daily VWAP for five consecutive trading days immediately prior to the due date of the next monthly payment is at least 10% greater than $0.75. On February 22, 2023, Yorkville provided notice to the Company that a "triggering event" under the terms of the PPA occurred on February 21, 2023 and approximately $6,500 was due to Yorkville consisting of principal, accrued interest, and payment premium of 5% of the principal amount being paid (collectively the “repayment amount”). On March 24, 2023, the Company paid $1,950 of the repayment amount owed to Yorkville towards the first trigger payment. Refer to Note 16 for additional information regarding subsequent events.

In connection with the entry into the PPA, the Company received the initial Pre-Paid Advance of $40,000 gross or $39,200 net of discount. Each Pre-Paid Advance has a maturity of 12 months. Further Pre-Paid Advances will be based upon the mutual agreement of the parties. Direct costs and fees related to the PPA were recognized in earnings. At issuance, the Company concluded that certain features of the PPA would be considered a derivative that would require bifurcation. In lieu of bifurcation, the Company elected the fair value option for this financial instrument and will record changes in fair value within the statements of operations and comprehensive income (loss) at the end of each reporting period. Under the fair value option, upon derecognition the Company will include in net income the cumulative amount of the gain or loss on the debt that resulted from changes in instrument-specific credit risk.

During the first quarter of 2023, Yorkville elected to convert $3,000 of principal and $224 of accrued interest into 3,656,118 shares of common stock and $152 was recognized in earnings from changes in instrument-specific credit risk. As of March 31, 2023, the fair

value of the debt was $30,945 and the principal balance was $32,382. As of December 31, 2022, the fair value of the debt was $37,603 and the principal balance was $37,000. Refer to Note 3 for additional details regarding the fair value measurement.

Long-Term Debt – Senior Secured Bridge Loan

On March 17, 2023, the Company entered into a loan agreement (the "Starr Bridge Loan") with C.V. Starr & Co., Inc. (“C.V. Starr”), a stockholder of the Company, for an aggregate principal amount of $5,000 net of an original issue discount of $100. The loan bears interest at a rate equal to 12.0% per year, with the first year of interest being paid in kind on the last day of each month, and matures on March 17, 2025. In addition, the parties entered into a warrant agreement to acquire up to an aggregate 750,000 shares of Class A common stock ("Starr Warrant"), at a purchase price of ~~$10.00~~$0.125 per ~~Unit, which includes~~whole share underlying the ~~full exercise by the underwriter of its option to purchase an additional 3,750,000 Units at $10.00 per Unit. Each Unit consists of one share of the Company’s Class A common stock, $0.0001 par value,~~Starr Warrant or $94. The Starr Warrant has a five-year term and ~~one-half of one redeemable warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase one share of Class A common stock at~~ an exercise price of ~~$11.50 per whole share (see Note 7).~~

~~NOTE 4. PRIVATE PLACEMENT~~

Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 7,000,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant ($7,000,000 in the aggregate), each exercisable to purchase one share of Class A common stock at a price of $11.50$0.71 per share. The ~~proceeds from~~Company applied the ~~sale~~guidance for this transaction in accordance with ASC 470-20, Debt with Conversion and Other Options and ASC 815, Derivatives and Hedging. The net proceeds of the ~~Private Placement~~Starr Bridge Loan and Starr Warrants were ~~added to~~recorded at fair value, which resulted in a discount on the ~~net proceeds from~~Starr Warrants of $180 based on the ~~Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period,~~difference between the proceeds ~~from the sale~~and fair value of the ~~Private Placement Warrants will be used to fund the redemption~~Starr Warrants. The fair value of the ~~Public Shares (subject to~~Starr Warrants was determined using a Black-Scholes option pricing model. The Starr Warrants met the requirements ~~of applicable law)~~for a derivative scope exception under ASC 815-10-15-74(a) for instruments that are both indexed to an entity’s own stock and ~~the Private Placement Warrants will expire worthless.~~

~~GX ACQUISITION CORP.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~JUNE 30, 2019~~

~~(Unaudited)~~

~~NOTE 5. RELATED PARTY TRANSACTIONS~~

~~Founder Shares~~

~~In September 2018, the Company issued an aggregate of 8,625,000 shares (the “Founder Shares”) to the Sponsor for an aggregate purchase price of $25,000~~classified in ~~cash. In April 2019, the Sponsor contributed back to the Company, for no consideration, 1,437,500 Founder Shares, resulting in an aggregate of 7,187,500 Founder Shares outstanding.~~stockholders’ equity. The 7,187,500 Founder Shares included an aggregate of up to 937,500 shares subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment was not exercised in full or in part, so that the Sponsor would collectively own 20%carrying amount of the ~~Company’s issued~~Starr Bridge Loan was deemed to approximate fair value. The original issue discount and ~~outstanding shares after~~warrant discount are amortized over the ~~Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering and excluding the Private Placement Warrants and underlying securities). As a result~~term of the ~~underwriter’s election to fully exercise its over-allotment option, 937,500 Founder Shares are no longer subject to forfeiture.~~

The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the shareholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up.

~~Promissory Note – Related Party~~

On September 24, 2018, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). The Note was non-interest bearing and was payable on the earlierStarr Bridge Loan. As of March 31, ~~2019 or~~2023, the ~~completion~~carrying value of long-term debt is $4,745 on the Initial Public Offering. On March 29, 2019, the Sponsor and the Company, for no consideration, agreed to extend the maturity date of the Note from the earlier of March 31, 2019 or the completion of the Initial Public Offering to the earlier of June 30, 2019 or the completion of the Initial Public Offering. The borrowings outstanding under the Note of $280,000 were repaid upon the consummation of the Initial Public Offering on May 23, 2019.condensed consolidated balance sheets.

~~Related Party Loans~~

In order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion. Up to $1,500,000 of notes may be converted upon consummation of a Business Combination into additional Private Units at a price of $10.00 per Unit. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.

~~Administrative Support Agreement~~

The Company entered into an agreement whereby, commencing on May 20, 2019, the Company will pay an affiliate of the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the three and six months ended June 30, 2019, the Company incurred $20,000 in fees for these services.

~~NOTE 6. COMMITMENTS AND CONTINGENCIES~~

~~Registration Rights~~

Pursuant to a registration rights agreement entered into on May 20, 2019, the holders of the Founder Shares, Private Placement Warrants (and their underlying securities) and any Units that may be issued upon conversion of the Working Capital Loans (and underlying securities) will be entitled to registration rights. The holders of 25% of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The registration rights agreement will not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

~~GX ACQUISITION CORP.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~JUNE 30, 2019~~

~~(Unaudited)~~

~~Underwriter’s Agreement~~

The underwriter is entitled to a deferred fee of $10,812,500, which will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject toUnder the terms of the ~~underwriting agreement.~~Starr Bridge Loan, the Company agreed to customary negative covenants restricting its ability to repay indebtedness, pay dividends to stockholders, repay or incur other indebtedness other than as permitted, grant or suffer to exist a security interest in any of the Company’s assets, other than as permitted, or hold cash and cash equivalents less than $3,000 for more than five consecutive business days. In addition to the negative covenants in the Starr Bridge Loan, the Starr Bridge Loan includes customary events of default and the Company granted C.V. Starr a senior security interest in all of its assets.

Leases

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 was $984 and $983 for the three months ended March 31, 2023 and 2022, respectively.

~~Consulting Agreement~~On March 13, 2019, Legacy Celularity entered into a lease agreement for a 147,215 square foot facility consisting of office, manufacturing and laboratory space in Florham Park, New Jersey, which expires in 2036. The Company has the option to renew the term of the lease for two additional five-year terms so long as the lease is then in full force and effect. The lease term commenced on March 1, 2020 subject to an abatement of the fixed rent for the first 13 months following the lease commencement date. The initial monthly base rent is approximately $230 and will increase annually. The Company is obligated to pay real estate taxes and costs related to the premises, including costs of operations, maintenance, repair, replacement and management of the new leased premises. In connection with entering into this lease agreement, Legacy Celularity issued a letter of credit of $14,722 which is classified as restricted cash (non-current) on the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022. The lease agreement allows for a landlord provided tenant improvement allowance of $14,722 to be applied to the costs of the construction of the leasehold improvements.

The components of the Company’s lease costs are classified on its condensed consolidated statements of operations as follows:


	Three Months Ended March 31,		Three Months Ended March 31,
	2023		2022
Operating lease cost	$	760	$	760
Variable lease cost		304		325
Total operating lease cost	$	1,064	$	1,085
Short term lease cost	$	-	$	46

The table below shows the cash and non-cash activity related to the Company’s lease liabilities during the period:


	Three Months Ended March 31,		Three Months Ended March 31,
	2023		2022
Cash paid related to lease liabilities:
Operating cash flows from operating leases	$	715	$	708

Non-cash lease liability activity:
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	-	$	-

As of March 31, 2023, the maturities of the Company’s operating lease liabilities were as follows:


2023 (remaining nine months)	$	2,181
2024		2,969
2025		3,042
2026		3,116
2027		3,190
Thereafter		70,341
Total lease payments		84,839
Less imputed interest		(56,790	)
Total	$	28,049

As of March 31, 2023, the weighted average remaining lease term of the Company’s operating lease was 23.0 years, and the weighted average discount rate used to determine the lease liability for the operating lease was 11.12%.

10.

Equity

Common Stock

As of March 31, 2023 and ~~introduce~~December 31, 2022, the Company’s certificate of incorporation, as amended and restated, authorized the Company to potential targets and provide assistance with the negotiations in connection with a Business Combination. The agreement provides for monthly fee of $12,500. For the three and six months ended June 30, 2019, the Company incurred $15,500 in such fees.

~~NOTE 7. STOCKHOLDERS’ EQUITY~~

~~Preferred Stock~~ ~~— The Company is authorized to~~ issue ~~1,000,000~~730,000,000 shares of ~~$0.0001~~$0.0001 par value ~~preferred stock. At June 30, 2019 and December 31, 2018, there were no preferred shares issued or outstanding.~~

Class A ~~Common Stock~~ ~~— The Company is authorized to issue up to 100,000,000 shares~~common stock.

Voting Power

Except as otherwise required by law or as otherwise provided in any certificate of ~~Class A, $0.0001 par value~~designation for any series of preferred stock, the holders of common ~~stock. Holders~~stock possess all voting power for the election of the Company’s directors and all other matters requiring stockholder action. Holders of common stock are entitled to one vote per share on matters to be voted on by stockholders.

Dividends

Holders of Class A common stock will be entitled to receive such dividends, if any, as may be declared from time to time by the Company’s board of directors in its discretion out of funds legally available therefor. In no event will any stock dividends or stock splits or combinations of stock be declared or made on common stock unless the shares of common stock at the time outstanding are treated equally and identically.

Liquidation, Dissolution and Winding Up

In the event of the Company’s voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up, the holders of the common stock will be entitled to receive an equal amount per share of all of the Company’s assets of whatever kind available for distribution to stockholders, after the rights of the holders of the preferred stock have been satisfied.

Preemptive or Other Rights

The Company’s stockholders have no preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to common stock.

Election of Directors

The Company’s board of directors is divided into three classes, Class I, Class II and Class III, with only one class of directors being elected in each ~~share. At June 30, 2019~~year and each class serving a three-year term, except with respect to the election of directors at the special meeting held in connection with the merger with GX, Class I directors are elected to an initial one-year term (and three-year terms subsequently), the Class II directors are elected to an initial two-year term (and three-year terms subsequently) and the Class III directors are elected to an initial three-year term (and three-year terms subsequently). There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors.

Preferred Stock

The Company’s certificate of incorporation authorized 10,000,000 shares of preferred stock and provides that shares of preferred stock may be issued from time to time in one or more series. The Company’s board of directors is authorized to fix the voting rights, if any, designations, powers and preferences, the relative, participating, optional or other special rights, and any qualifications, limitations and restrictions thereof, applicable to the shares of each series of preferred stock. The Company’s board of directors is able to, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of common stock and could have anti-takeover effects. The ability of the Company’s board of directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of Celularity or the removal of existing management. As of March 31, 2023 and December 31, ~~2018, there were 1,452,839 and~~ 2022, the Company does not have any outstanding preferred stock.

May 2022 PIPE

On May 18, 2022, the Company entered into a securities purchase agreement with an institutional accredited investor providing for the private placement of (i) 4,054,055 shares of Class A common stock ~~issued~~ and ~~outstanding, excluding 27,297,161 and no~~(ii) accompanying warrants to purchase up to 4,054,055 shares of Class A common stock (the “May 2022 PIPE Warrants”), for $7.40 per share and accompanying warrant, or an aggregate purchase price of approximately $30,000 gross, or $27,396 net of related costs of $2,604 which were recorded as a reduction to additional paid-in-capital. The net proceeds were allocated to the warrant liability as noted below with the remainder of $7,651 recorded in additional paid-in capital. Each warrant has an exercise price of $8.25 per share, is immediately exercisable, will expire on May 20,

2027 (five years from the date of issuance) (the “May 2022 PIPE Financing”). The closing of the May 2022 PIPE Financing occurred on May 20, 2022. In the event of certain fundamental transactions involving the Company, the holders of May 2022 PIPE Warrants may require the Company to make a payment based on a Black-Scholes valuation, using specified inputs that are not considered indexed to the Company’s stock in accordance with ASC 815. Therefore, the Company accounted for the Warrants as liabilities and were recorded at the Closing Date fair value $19,745 which was based on a Black-Scholes option pricing model. The remainder of the proceeds were allocated to the Class A common stock issued and recorded as a component of equity. Refer to Note 16 for additional information regarding subsequent events.

ATM Agreement

On September 8, 2022, the Company entered into an At-the-Market Sales Agreement (the “ATM Agreement”) with BTIG, LLC, Oppenheimer & Co. Inc. and B. Riley Securities, Inc., acting as sales agents and/or principals, pursuant to which the Company may offer and sell, from time to time in its sole discretion, shares of its common stock, having an aggregate offering price of up to $150,000, subject to ~~possible redemption, respectively.~~

~~Class B Common Stock~~ —certain limitations as set forth in the ATM Agreement. The Company is ~~authorized~~not obligated to ~~issue~~make any sales of shares under the ATM Agreement.

Any shares offered and sold in the at-the-market offering will be issued pursuant to the Company’s effective shelf registration statement on Form S-3 and the related prospectus supplement. Under the ATM Agreement, the sales agents may sell shares of common stock by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended. The Company will pay the sales agents a commission rate of up to ~~10,000,000~~3% of the gross sales proceeds of any shares sold and has agreed to provide the sales agents with customary indemnification, contribution and reimbursement rights. The ATM Agreement contains customary representations and warranties and conditions to the placements of the shares pursuant thereto.

During the three months ended March 31, 2023, the Company received gross and net proceeds of $141 and $136, respectively, from the sale of 132,958 shares of ~~Class B, $0.0001 par value common stock. Holders of the Company’s~~its common stock ~~are entitled to one vote~~at an average price of $1.06 per share under the ATM Agreement.

March 2023 PIPE

On March 20, 2023, the Company entered into a securities purchase agreement with two accredited investors, including its Chairman and Chief Executive Officer, Dr. Robert Hariri, providing for ~~each share. The~~the private placement of (i) 9,381,841 shares of its Class BA common stock, ~~will automatically convert into~~and (ii) accompanying warrants to purchase up to 9,381,841 shares of Class A common stock (the "March 2023 PIPE Warrants"), for $0.8343 per share and $0.125 per accompanying March 2023 PIPE Warrant, for an aggregate purchase price of $9,000 (of which Dr. Hariri subscribed for $2,000). The closing of the private placement occurred on March 27, 2023. Each March 2023 PIPE Warrant has an exercise price of $3.00 per share, is immediately exercisable, will expire on March 27, 2028 (five years from the date of issuance), and is subject to customary adjustments for certain transactions affecting the Company's capitalization. The March 2023 PIPE Warrants may not be exercised if the aggregate number of shares of Class A common stock beneficially owned by the holder thereof (together with its affiliates) would exceed the specified percentage cap provided therein (which may be adjusted upon 61 days advance notice) immediately after exercise thereof.

The Company accounted for the March 2023 PIPE Warrants and common stock as a single non-arm's length transaction. The Company applied the guidance for this transaction in accordance with ASU 2020-06, (Subtopic 470-20): Debt - Debt with Conversion and Other Options,ASC 815 Derivatives and Hedging, and ASC 480 Distinguishing Liabilities from Equity. Accordingly, the net proceeds were allocated between common stock and the March 2023 PIPE warrants at their respective fair value, which resulted in a net premium of $1,650 based on the difference between the proceeds and fair value of the common stock and March 2023 PIPE warrants, which was recorded as additional paid in capital. The fair value of the March 2023 PIPE Warrants was determined using a Black-Scholes option pricing model and the common stock based on closing date share price. The Company evaluated the March 2023 PIPE warrants under ASC 815 and determined that they did not require liability classification and met the requirements for a derivative scope exception under ASC 815-10-15-74(a) for instruments that are both indexed to an entity’s own stock and classified in stockholders’ equity. The warrants were recorded in additional paid-in capital within stockholders' equity on the condensed consolidated balance sheets.

Warrants

On March 1, 2022, Celularity and certain of the related party investors amended and restated the investors’ respective Legacy Celularity Warrants (the “A&R Warrants”) to (i) reduce the exercise price per share from $7.53 per share to $3.50 per share, subject to adjustment as set forth in the A&R Warrants, (ii) remove the transfer restrictions set forth in the A&R Warrants, and (iii) make other changes reflecting the impact of the business combination. In conjunction with the amendment, those investors exercised 13,281,386 of the A&R Warrants in exchange for 13,281,386 shares of Class A common stock for gross proceeds of $46,485. The Company accounted for the amendment as a cost to issue equity with the incremental fair value of $15,985 related to the amendment recognized as an offset to the proceeds received. However, because these were equity classified warrants, the net impact to the condensed consolidated statements of stockholders’ equity was zero.

As of March 31, 2023, the Company had 43,590,201 outstanding warrants to purchase Class A common stock. A summary of the warrants is as follows:


	Number of shares		Exercise price			Expiration date
Dragasac Warrant		6,529,818	$	6.77	*	March 16, 2025
Public Warrants		14,374,488	$	11.50		July 16, 2026
Sponsor Warrants		8,499,999	$	11.50		July 16, 2026
May 2022 PIPE Warrants		4,054,055	$	8.25	**	May 20, 2027
March 2023 PIPE Warrants		9,381,841	$	3.00		March 27, 2028
March 2023 Loan Warrants		750,000	$	0.71		March 17, 2028
		43,590,201

* The exercise price is the lessor of $6.77 per share or 80% of either (i) the value attributed to one share of Legacy Celularity Series B Preferred Stock upon consummation of a change in control or the closing of a strategic transaction or (ii) the price at which one share of common stock is sold to the public market in an initial public offering.

** The exercise price was amended to $0.75 effective April 10, 2023 in connection with the registered direct offering. The expiration date was also amended to be five and one-half years following the closing of the offering or October 10, 2028. Refer to Note 16 for additional information regarding subsequent events.

Delaware Section 205 Proceeding

On July 14, 2021, Celularity, then operating as GX Acquisition Corp. (“Pre-Merger Company”), held a special meeting of stockholders (the “Special Meeting”) to approve certain matters related to the business combination between the Pre-Merger Company and Celularity Operations, Inc. (“Legacy Celularity”), including a proposal to adopt a certificate of amendment to the Pre-Merger Company’s amended and restated certificate of incorporation (the “Pre-Merger Charter”) to increase the number of authorized shares of its common stock from 110,000,000 to 730,000,000 (the "Increase Amendment”). The Increase Amendment received approval from the holders of a majority of the Pre-Merger Company’s outstanding shares of Class A common stock and Class B common stock, voting together as a single class, that were outstanding as of the record date for such Special Meeting. Following the Special Meeting, the business combination closed, the Pre-Merger Company changed its name to “Celularity Inc.” and the Pre-Merger Charter, as amended to give effect to the Authorized Share Amendment (the “New Charter”), became effective.

A recent decision by the Court of Chancery of the State of Delaware (the “Court”) in Garfield v. Boxed, Inc., 2022 WL 17959766 (Del. Ch. Dec. 27, 2022), created uncertainty as to whether Section 242(b)(2) of the Delaware General Corporation Law (“DGCL”) would have required the Celularity to seek and obtain a vote of a majority of the shares of Class A common stock to approve the Increase Amendment to the Pre-Merger Charter. Thus, to resolve any potential uncertainty, on March 14, 2023, Celularity filed a petition (the “Petition”) in the Court under Section 205 of the DGCL seeking validation and a declaration of effectiveness of the New Charter and actions taken in reliance thereon, including the Increase Amendment and the shares issued pursuant thereto, captioned In re Celularity, Inc., C.A. No. 2023-0317-LWW (Del. Ch.) (the “Section 205 Action”). Section 205 of the DGCL permits the Court, in its discretion, to ratify and validate potentially validate corporate acts and stock after considering a variety of factors.

On March 29, 2023, the Court of Chancery held a hearing in the Section 205 Action and orally granted the Petition, and, later that same day, the Court issued an order in the Section 205 Action, in which it validated and declared effective the Increase Amendment and the Certificate of Incorporation as of 10:00 a.m. (EDT) on July 16, 2021, and all shares of capital stock of the Company issued in reliance on the effectiveness of the Increase Amendment and the Certificate of Incorporation as of the date and time of the original issuance of such shares. The Courts order has addressed and eliminated the uncertainty created by the Garfield Court’s decision.

11.

Stock-Based Compensation

2021 Equity Incentive Plan

In July 2021, the Company’s board of directors adopted, and the Company’s stockholders approved the 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan provides for the grant of incentive stock options (“ISOs”) to employees and for the grant of nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of stock awards to employees, directors and consultants.

The number of shares of Class A common stock initially reserved for issuance under the 2021 Plan is 20,915,283. As of March 31, 2023, 17,548,731 shares remain available for future grant under the 2021 Plan. The number of shares reserved for issuance will automatically increase on January 1 of each year, for a period of 10 years, from January 1, 2022 through January 1, 2031, by 4% of the total number of shares of Celularity capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Company’s board of directors. Shares subject to stock awards granted under the 2021 Plan that

expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, will not reduce the number of shares available for issuance under the 2021 Plan. Additionally, shares issued pursuant to stock awards under the 2021 Plan that are repurchased or forfeited, as well as shares that are reacquired as consideration for the exercise or purchase price of a stock award or to satisfy tax withholding obligations related to a stock award, will become available for future grant under the 2021 Plan.

The 2021 Plan is administered by the Company’s board of directors. The Company’s board of directors, or a duly authorized committee thereof, may delegate to one or more officers the authority to (i) designate employees other than officers to receive specified stock awards and (ii) determine the number of shares to be subject to such stock awards. Subject to the terms of the 2021 Plan, the plan administrator has the authority to determine the terms of awards, including recipients, the exercise price or strike price of stock awards, if any, the number of shares subject to each stock award, the fair market value of a share, the vesting schedule applicable to the awards, together with any vesting acceleration, the form of consideration, if any, payable upon exercise or settlement of the stock award and the terms and conditions of the award agreements for use under the 2021 Plan. The plan administrator has the power to modify outstanding awards under the 2021 Plan. Subject to the terms of the 2021 Plan and in connection with a corporate transaction or capitalization adjustment, the plan administrator may not reprice or cancel and regrant any award at a lower exercise price, strike price or purchase price or cancel any award with an exercise price, strike price or purchase price in exchange for cash, property or other awards without first obtaining the approval of the Company’s stockholders.

2017 Equity Incentive Plan

The 2017 Equity Incentive Plan (the “2017 Plan”) adopted by Legacy Celularity’s board of directors and approved by Legacy Celularity’s stockholders provided for Legacy Celularity to grant stock options to employees, directors and consultants of Legacy Celularity. In connection with the closing of the Business Combination and effectiveness of the 2021 Plan, no further grants will be made under the 2017 Plan.

The total number of stock options that could have been issued under the 2017 Plan was 32,342,049. Shares that expired, forfeited, canceled or otherwise terminated without having been fully exercised were available for future grant under the 2017 Plan.

The 2017 Plan is administered by the Company’s board of directors or, at the discretion of the Company’s board of directors, by a committee of the board of directors. The exercise prices, vesting and other restrictions were determined at the discretion of Legacy Celularity’s board of directors, or its committee if so delegated, except that the exercise price per share of stock options could not be less than 100% of the fair market value of the share of common stock on the date of grant and the term of stock option could not be greater than ten years. Stock options granted to employees, officers, members of the board of directors and consultants typically vested over a three or four year period.

Stock Option Valuation

Awards with Service Conditions

The fair value of each option is estimated on the date of grant using a Black-Scholes option pricing model that takes into account inputs such as the exercise price, the estimated fair value of the underlying common stock at grant date, expected term, expected stock price volatility, risk-free interest rate, and dividend yield. The fair value of each grant of stock options was determined by the Company using the methods and assumptions discussed below. Certain of these inputs are subjective and generally require judgment to determine.

•

The expected term of employee stock options with service-based vesting is determined using the “simplified” method, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to the Company’s lack of sufficient historical data. The expected term of non-employee options is equal to the contractual term or estimated term based on the underlying agreement.

•

The expected stock price volatility is based on historical volatilities of comparable public entities within the Company’s industry.

•

The risk-free interest rate is based on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a ~~Business Combination~~period that is commensurate with the respective expected term or contractual term.

•

The expected dividend yield is 0% because the Company has not historically paid, and does not expect, for the foreseeable future, to pay a dividend on its common stock.

The following table presents, on a ~~one-for-one~~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 three months ended March 31, 2023 and 2022:


	Three Months Ended
	March 31, 2023	March 31, 2022
Risk-free interest rate	N/A		1.8	%
Expected term (in years)	N/A		6.0
Expected volatility	N/A		76.5	%
Expected dividend yield	N/A		—	%

The weighted average grant-date fair value per share of stock options granted during the three months ended March 31, 2023 and 2022, was $0 and $3.39, respectively.

The following table summarizes option activity with service conditions under the 2021 Plan and the 2017 Plan:


	Options			Weighted Average Exercise Price		Weighted Average Contract Term (years)		Aggregate Intrinsic Value
Outstanding at January 1, 2023		25,059,409		$	4.90		6.1	$	7,851
Granted		—			—
Exercised		(1,071,000	)		0.28
Forfeited		(294,400	)		8.58
Outstanding at March 31, 2023		23,694,009		$	5.06		5.8	$	2,277
Vested and expected to vest March 31, 2023		23,694,009		$	5.06		5.8	$	2,277
Exercisable at March 31, 2023		19,589,188		$	4.43		5.3	$	2,277

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of Class A common stock for those options that had exercise prices lower than the fair value of Class A common stock.

During the three months ended March 31, 2023, the aggregate intrinsic value was $482 for the stock options exercised.

The Company recorded stock-based compensation expense relating to option awards with service conditions of $2,412 and $1,568 for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, unrecognized compensation cost for options issued with service conditions was $20,250 and will be recognized over an estimated weighted-average amortization period of 2.32 years.

Awards with Performance Conditions

In connection with the advisory agreement signed with Robin L. Smith, MD (see Note 15), the Company awarded options to acquire a total of 1,050,000 shares with an exercise price of $2.99 to Dr. Smith, a member of the Company’s board of directors. The initial tranche of 250,000 stock options vested upon execution of the advisory agreement on August 16, 2022. The remaining 800,000 stock options are subject to ~~adjustment for~~vesting upon achievement of certain predefined milestones in relation to the expansion of the degenerative disease business. On November 1, 2022, the second tranche of 200,000 stock ~~splits, stock dividends, reorganizations, recapitalizations~~options vested upon achievement of the first milestone. The fair value of the award was determined based on a Black-Scholes option-pricing model. The Company's grant date fair value assumptions were 79.9% expected volatility, 2.95% risk-free interest rate, 5 year expected term, and 0% expected dividend yield. There were no milestones achieved and accordingly there was no stock-based compensation recorded during the three months ended March 31, 2023 and 2022. As of March 31, 2023, the remaining unrecognized compensation cost was $1,175, and will be recognized upon probable achievement of the milestones.

Awards with Market Conditions

In September 2021, the Company awarded options to acquire a total of 2,469,282 shares with an exercise price of $6.32 to the Company’s former President in connection with the commencement of his employment. The grant was comprised of four equal tranches, and would vest in up to five equal installments in respect of achieving certain share price targets between the third and fourth anniversary of the effective date, subject to his continued employment with the Company. The Company’s President resigned effective August 31, 2022, and the ~~like. As~~President’s award was terminated at such time, all previously recognized stock-based compensation expense was reversed, and a ~~result~~consulting agreement was signed thereafter, refer to Note 15 for further details. The Company recognized $432 in stock-based compensation for the three months ended March 31, 2022.

Restricted Stock Units

The Company issues restricted stock units (“RSUs”) to employees that generally vest over a four-year period, with 25% vesting on the anniversary of the ~~underwriter’s election~~grant date, and the remainder vesting in equal annual installments thereafter so that vested in full on the

four-year anniversary of the grant date. At times, the board of directors may approve exceptions to ~~fully exercise its over-allotment option, 937,500 Founder Shares are no longer subject~~the standard RSU vesting terms. Any unvested shares will be forfeited upon termination of services. The fair value of an RSU is equal to ~~forfeiture. At June 30, 2019 and December 31, 2018, there were 7,187,500 and 8,625,000 shares~~the fair market value price of ~~Class B~~the Company’s common stock ~~issued and outstanding, respectively.~~on the date of grant. RSU expense is amortized straight-line over the vesting period.

The following table summarizes activity related to RSU stock-based payment awards:


	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at January 1, 2023		2,274,029		$	7.34
Granted		4,094,900		$	0.70
Vested		(253,390	)	$	8.38
Forfeited		(300,559	)	$	6.83
Outstanding at March 31, 2023		5,814,980		$	2.64

The Company ~~may issue additional common stock or preferred stock~~recorded stock-based compensation expense of $1,576 and $420 for the three months ended March 31, 2023 and 2022, respectively, related to ~~complete its Business Combination or under an employee incentive plan after completion~~RSUs. As of March 31, 2023, the total unrecognized expense related to all RSUs was $12,634, which the Company expects to recognize over a weighted-average period of 1.67 years.

Stock-Based Compensation Expense

The Company recorded stock-based compensation expense in the following expense categories of its ~~Business Combination.~~condensed consolidated statements of operations:


	For the Three Months Ended March 31,
	2023		2022
Cost of revenues	$	164	$	37
Research and development		558		248
Selling, general and administrative		3,266		2,137
	$	3,988	$	2,422

12.

Revenue Recognition

The following table provides information about disaggregated revenue by product and services:

~~Warrants —~~


	Three Months Ended March 31,
	2023		2022
Product sales and rentals, net	$	1,043	$	651
Processing and storage fees, net		1,357		1,283
License, royalty and other		1,535		4,001
Net revenue	$	3,935	$	5,935

The ~~Public Warrants~~following table provides changes in deferred revenue from contract liabilities:


	2023			2022
Balance at January 1	$	4,492		$	4,067
Deferral of revenue*		1,195			1,649
Recognition of unearned revenue		(1,163	)		(1,610	)
Balance at March 31	$	4,524		$	4,106

* Deferral of revenue resulted 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.

13.

License and Distribution Agreements

Sorrento Therapeutics, Inc. License and Transfer Agreement

The Company and Sorrento Therapeutics, Inc. (“Sorrento”), a related party, are party to a License and Transfer Agreement for the exclusive worldwide license to CD19 CAR-T constructs for use in placenta-derived cells and/or cord blood-derived cells for the treatment of any disease or disorder (the “2020 Sorrento License Agreement”). The Company retains the right to sublicense the rights granted under the agreement with Sorrento’s prior written consent. As consideration for the license, the Company is obligated to pay Sorrento a royalty equal to low single-digit percentage of net sales (as defined within the agreement) and a royalty equal to low double-digit percentage of all sublicensing revenues (as defined within the agreement). The 2020 Sorrento License Agreement will ~~become exercisable on~~remain in effect until terminated by either the ~~later of (a) 30~~Company or Sorrento for uncured material breach upon 90 days written notice or, after the ~~consummation~~first anniversary of ~~a Business Combination or (b) 12 months from~~ the effective date of the ~~registration statement relating~~2020 Sorrento License Agreement, by the Company for convenience upon six months’ written notice to Sorrento.

The Company and Sorrento are actively negotiating a new supply agreement related to the ~~Initial Public Offering. No Public Warrants~~2020 Sorrento License Agreement. The 2020 Sorrento Term Sheet details certain aspects of this supply agreement, including pricing terms on material and/or licensed product supplied under the 2020 Sorrento License Agreement. The Company did not incur incentive payments related to the 2020 Sorrento Term Sheet.

Genting Innovation PTE LTD Distribution Agreement

On May 4, 2018, concurrently with Dragasac’s equity investment in Legacy Celularity, Legacy Celularity entered into a distribution agreement with Genting Innovation PTE LTD (“Genting”), a related party, pursuant to which Genting was granted supply and distribution rights to certain Company products in select Asia markets (the “Genting Agreement”). The Genting Agreement grants Genting limited distribution rights to the Company’s then-current portfolio of degenerative disease products and provides for the automatic rights to future products developed by or on behalf of the Company.

The term of the Genting Agreement was renewed on January 31, 2023, and automatically renews for successive 12-month terms unless Genting provides written notice of its intention not to renew at least three months prior to a renewal term or the Genting Agreement is otherwise terminated by either party for cause.

Genting and Dragasac are both direct subsidiaries of Genting Berhad, a public limited liability company incorporated and domiciled in Malaysia.

Celgene Corporation License Agreement

The Company is party to a license agreement with Celgene (the “Celgene Agreement”) pursuant to which the Company granted Celgene two separate licenses to certain intellectual property. The Celgene Agreement grants Celgene a royalty-free, fully-paid up, worldwide, non-exclusive license to the certain intellectual property (“IP”) for pre-clinical research purposes in all fields and a royalty-free, fully-paid up, worldwide license, with the right to grant sublicenses, for the development, manufacture, commercialization and exploitation of products in the field of the construction of any CAR, the modification of any T-lymphocyte or NK cell to express such a CAR, and/or the use of such CARs or T-lymphocytes or NK cells for any purpose, including prophylactic, diagnostic, and/or therapeutic uses thereof. The Celgene Agreement will remain in effect until its termination by either party for cause.

Pulthera, LLC Binding Term Sheet

Concurrent with the entry into the securities purchase agreement for the private placement described in Note 10 above, the Company executed a binding term sheet to negotiate and enter into a sublicense agreement of certain assets from an affiliate of Pulthera, LLC (the "sublicensor"). Pursuant to the binding term sheet, the Company paid sublicensor $3,000 option fee in cash and issued $1,000 of shares of its Class A common stock (1,694,915 shares based on the closing price on March 17, 2023) as consideration for stem-cells inventory to be used in research and development. The option fee paid by the Company will be applied towards an initial license fee as outlined in the sublicense agreement. The Company is required to use diligent and reasonable efforts to develop and obtain regulatory approval to market at least one licensed product contingent upon a firm written commitment to provide further financing to the Company. The $3,000 option fee was recorded as acquired IPR&D expense included in research and development expense on the condensed consolidated statements of operations for the three months ended March 31, 2023, as the acquired IPR&D had no alternative future use.

14.

Segment Information

The Company regularly reviews its segments and the approach used by management to evaluate performance and allocate resources. The Company manages its operations through an evaluation of three distinct business segments: Cell Therapy, Degenerative

Disease, and BioBanking. The chief operating decision maker uses the revenues and earnings (losses) of the operating segments, among other factors, for performance evaluation and resource allocation among these segments.

The reportable segments were determined based on the distinct nature of the activities performed by each segment. Cell Therapy broadly refers to therapies the Company is researching and developing. Therapies being researched are unproven and in various phases of development. Degenerative Disease produces, sells and licenses products used in surgical and wound care markets. Biobanking collects stem cells from umbilical cords and placentas and provides storage of such cells on behalf of individuals for future use.

The Company manages its assets on a total company basis, not by operating segment. Therefore, the chief operating decision maker does not regularly review any asset information by operating segment and, accordingly, asset information is not reported by operating segment. Total assets were $362,416 and $401,066 as of March 31, 2023 and December 31, 2022, respectively.

Financial information by segment for the three months ended March 31, 2023 and 2022 is as follows:


	Three Months Ended March 31, 2023
	Cell Therapy			BioBanking		Degenerative Disease			Other				Total
Net sales	$	-		$	1,357	$	2,578		$	-			$	3,935
Gross profit		-			885		1,047			-				1,932
Direct expenses		40,162			344		3,009			11,155				54,670
Segment contribution	$	(40,162	)	$	541	$	(1,962	)		(11,155	)			(52,738	)
Indirect expenses										11,132		(a)		11,132
Loss from operations													$	(63,870	)

(a) Components of other
Change in fair value of contingent consideration liability										(18,932	)
Change in fair value of contingent stock consideration										(110	)
Goodwill impairment										29,633
Amortization										541
Total other									$	11,132


	Three Months Ended March 31, 2022
	Cell Therapy			BioBanking			Degenerative Disease		Other				Total
Net sales	$	-		$	1,283		$	4,652	$	-			$	5,935
Gross profit		-			335			1,574		-				1,909
Direct expenses		21,213			626			1,459		13,270				36,568
Segment contribution		(21,213	)		(291	)		115		(13,270	)			(34,659	)
Indirect expenses										6,955		(b)		6,955
Loss from operations													$	(41,614	)

(b) Components of other
Change in fair value of contingent consideration liability										4,849
Change in fair value of contingent stock consideration										1,565
Amortization										541
Total other									$	6,955

15.

Related Party Transactions

Amended and Restated Employment Agreement with Dr. Robert Hariri

On January 25, 2023, in order to address the Company's current working capital requirements, Robert Hariri, M.D., Ph.D., the Company's Chairman and Chief Executive Officer, agreed to temporarily reduce payment of his salary pursuant to his employment agreement to minimum wage level with the remaining salary deferred until December 31, 2023. As of March 31, 2023, $215 was recorded to accrued expenses on the condensed consolidated balance sheets.

Consulting Agreement with Dr. Andrew Pecora

On August 31, 2022, Dr. Pecora resigned as the Company’s President, and subsequently entered into a consulting agreement with the Company dated September 21, 2022, to receive a $10 monthly fee for an initial six-month term and will be automatically renewed for one additional six- month term if either party does not provide notice of non-renewal. Simultaneously, the Company entered into a scientific and clinical advisor agreement (the “SAB Agreement”), effective as of September 1, 2022, whereby Dr. Pecora agreed to serve as co-chair of the Company’s scientific and clinical advisory board for a $10 monthly fee and a one-time grant of RSUs having a value of $125 on the grant date and will vest equally over four years. The SAB Agreement has a one-year term and may be renewed for

successive one-year terms upon mutual agreement of both parties. The consulting agreement was early terminated effective January 14, 2023. Dr. Pecora continues to serve on the Company’s scientific and clinical advisory board. The Company paid Dr. Pecora SAB fees of $10 for the three months ended March 31, 2023, and $20 was recorded to accrued expenses on the condensed consolidated balance sheets as of March 31, 2023.

Advisory Agreement with Robin L. Smith MD

On August 16, 2022, the Company entered into an advisory agreement with Robin L. Smith, MD, a member of the Company’s board of directors, to receive $20 per month for advisory fees, an equity grant for a total amount of 1,050,000 stock options with the initial tranche of 250,000 stock options vesting upon execution of the advisory agreement and the remaining shares subject to vesting upon achievement of certain predefined milestones. The agreement also provides for a one-time cash bonus of $1,500 upon the successful achievement of the trigger event, as defined in the agreement. The Company paid advisory fees of $20 for the three months ended March 31, 2023, and $40 was recorded to accrued expenses on the condensed consolidated balance sheets as of March 31, 2023.

COTA, Inc

In November 2020, Legacy Celularity and COTA, Inc. (“COTA”) entered into an Order Schedule (the “Order Schedule No. 2”), to the Master Data License Agreement between Legacy Celularity and COTA, dated October 29, 2018, pursuant to which COTA will provide the licensed data in connection with AML patients. The COTA Order Schedule No. 2 will terminate on the one-year anniversary following the final licensed data deliverable described therein. Andrew Pecora, M.D., Celularity’s former President, is the Founder and Chairman of the Board of COTA and Dr. Robin L. Smith, a member of the Company’s board of directors, is an investor in COTA. The Company did not make any payments to COTA for the three months ended March 31, 2023 and 2022.

Cryoport Systems, Inc

During the three months ended March 31, 2023 and 2022, the Company made payments totaling $30 and $20, respectively to Cryoport Systems, Inc (“Cryoport”) for transportation of cryopreserved materials. The Company’s Chief Executive Officer and director, Dr. Robert Hariri, M.D, Ph.D., has served on Cryoport’s board of directors since September 2015.

C.V. Starr Loan

On March 17, 2023 the Company entered into a $5,000 loan agreement with C.V. Starr. C.V. Starr is an investor in the Company, holding 750,000 warrants to purchase Class A common stock and 7,640,693 shares of Class A common stock as of March 31, 2023.

Sorrento Therapeutics, Inc.

In September 2020, the Company entered into the 2020 Sorrento Agreement, with Sorrento. Henry Ji, Ph.D., a member of Legacy Celularity’s board of directors, currently serves as President and Chief Executive Officer of Sorrento. Sorrento is also a significant stockholder of the Company and invested in the July 2021 private investment in public equity financing. During the three months ended March 31, 2023, the Company made payments totaling $0 and $1,821 was owed to Sorrento as of March 31, 2022, which was paid on April 8, 2022 for supply of products pursuant to the supply agreement.

16.

Subsequent Events

The Company has evaluated subsequent events and there are no items requiring disclosure except the following:

Cell Therapy Clinical Trial Update

On April 27, 2023, the Company announced preliminary results from its Phase 1 trial of CYNK-001, its investigational unmodified NK cell therapy in development for the treatment of R/R AML and MRD positive AML. Based on preliminary analysis of the Phase 1 trial data made available to the Company in April 2023, this trial will now be closed to further enrollment. As a result, the Company expects to incur a full impairment charge on its CYNK-001 IPR&D asset for $89,100 and will be evaluating the potential impact for any further goodwill impairment on the Cell Therapy reporting unit, as well as analyzing the potential impact for any impairment for any other long-lived assets for the quarter ended June 30, 2023.

Yorkville Pre-Paid Advance

In April 2023, the Company and Yorkville agreed that Yorkville would not accelerate any amounts outstanding under the PPA provided that (i) the Company pays the remaining balance on the first trigger payment of approximately $4,600 within two business days of closing a financing transaction, but in any event no later than April 14, 2023; and (ii) the Company pays in full the payment due on the second trigger payment of approximately $6,500 within two business days of closing a financing transaction, but in any event no later than May 14, 2023. As noted below, in April 2023, the Company used the net proceeds from the registered direct offering to pay

in full the remaining balance on the first trigger payment and approximately $900 was applied towards the second trigger payment. Further, in May 2023 as discussed below, the Company used the net proceeds from the RWI Bridge Loan (as defined below) to repay the remaining balance on the second trigger payment in full for approximately $5,600.

The Company also agreed to include a proposal in its definitive proxy statement filed on May 1, 2023 with the SEC, seeking stockholder approval for the issuance of more than 20% of its pre-transaction Class A common stock outstanding at a price below the minimum price pursuant to the PPA. Further, absent prior written consent from Yorkville, the Company agreed it will not increase the size or amount borrowed under the C.V. Starr loan facility nor will not incur other borrowings or liens of any kind as long as any amounts are due and remain outstanding to Yorkville until paid in full. The Company agreed that all obligations due and owing to Yorkville will become secured obligations upon any violation under the PPA. Default interest rate of 15% will apply from March 30, 2023, until such date Yorkville is paid in full for the balance of both the first and second trigger payments. Interest shall accrue at the regular rate following payment of the obligations cited above if the price of the Company's stock trades sufficiently above the floor price such that no triggering event is in effect at the time of the full repayment. The Company is also seeking stockholder approval to lower the floor price at which shares may be sold to Yorkville pursuant to the PPA to $0.50. Refer to the Going Concern disclosure in Note 1 for further details.

Registered Direct Offering

On April 10, 2023, the Company closed on a registered direct offering of 9,230,770 shares of its Class A common stock together with warrants to purchase up to 9,230,770 shares of its Class A common stock at a combined purchase price of $0.65 per share and accompanying warrant, resulting in total gross proceeds of approximately $6,000 before deducting placement agent commissions and other estimated offering expenses. The warrants have an exercise price of $0.75, will be exercisable ~~for cash unless~~beginning six months after the date of issuance and will expire five years thereafter. The Company ~~has an effective and current registration statement covering the common shares issuable upon exercise of the Public Warrants and a current prospectus relating~~also amended existing warrants to such common shares. Notwithstanding the foregoing, if a registration statement covering the common shares issuable upon the exercise of the Public Warrants is not effective within 90 days from the consummation of a Business Combination, the holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuantpurchase up to an ~~available exemption from registration under the Securities Act. If~~aggregate of 4,054,055 shares at an ~~exemption from registration is not available, holders will not be able to~~ exercise ~~their Public Warrants on a cashless basis. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation.~~

~~The Company may call the Public Warrants for redemption (excluding the Private Placement Warrants), in whole and not in part, at a~~ price of ~~$0.01~~$8.25 per ~~warrant:~~

	●	~~at any time while the Public Warrants are exercisable,~~
	●	~~upon not less than 30 days’ prior written notice of redemption to each Public Warrant holder,~~
	●	if, and only if, there is a current registration statement in effect with respect to the issuance of the common stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the common shares issuable upon the exerciseshare, with an expiration date of the Private Placement Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be non-redeemable so long as they areMay 20, 2027, held by the ~~initial purchasers~~same investor, effective upon the closing of the offering, to reduce the exercise price to $0.75 per share and extended expiration date to five and one-half years following the closing of the offering. The Company used the $5,500 net proceeds from the offering to repay its obligations to Yorkville under the PPA.

RWI Senior Secured Bridge Loan

On May 16, 2023, with written consent provided by Yorkville, the Company entered into a senior secured loan agreement ("RWI Bridge Loan") with Resorts World Inc Pte Ltd, ("RWI") providing for a loan in the aggregate principal amount of $6,000 net of an original issue discount of $120, which bears interest at a rate of 12.5% per year, with the first year of interest being paid in kind on the last day of each month, and matures June 14, 2023. Pursuant to the terms of the RWI Bridge Loan, the Company is required to apply the net proceeds from the RWI Bridge Loan to the payment due to Yorkville pursuant to that certain pre-paid advance agreement dated September 15, 2022, as amended, or ~~their permitted transferees. If~~ the ~~Private Placement Warrants are held~~PPA. Any other use of proceeds requires prior written approval by ~~someone~~RWI. RWI is affiliated with Lim Kok Thay, a member of the Company's board of directors.

Pursuant to the terms of the RWI Bridge Loan, the Company agreed to customary negative covenants restricting its ability to repay indebtedness, pay dividends to stockholders, repay or incur other indebtedness other than as permitted, grant or suffer to exist a security interest in any of its assets, other than as permitted, or hold cash and cash equivalents less than $3,000 for more than five consecutive business days. In addition to the ~~initial purchasers~~negative covenants in the RWI Bridge Loan, the RWI Bridge Loan includes customary events of default. Pursuant to the terms of the RWI Bridge Loan, the Company granted RWI a senior security interest in all of its assets, pari passu with C.V. Starr pursuant to the Starr Bridge Loan (see Note 7).

Officer Departure

On May 16, 2023, Bradley Glover, Ph.D., Executive Vice President and Chief Operating Officer and principal operating officer, notified the Company of his decision to resign from his role effective as of May 31, 2023 to pursue another opportunity. Dr. Glover’s decision to resign was not due to any disagreement with the Company on any matter, or ~~their permitted transferees, the~~relating to its operations, policies, or practices.

May 2023 Private Placement

On May 17, 2023, the Company entered into a securities purchase agreement with a group of accredited investors, providing for the private placement of an aggregate (i) 5,813,945 shares of its Class A common stock and (ii) accompanying warrants to purchase up to 5,813,945 shares of Class A common stock (the “May 2023 PIPE Warrants”), for $0.52 per share and $0.125 per accompanying May 2023 PIPE Warrant, for an aggregate purchase price of approximately $3,700, which private placement closed on May 18, 2023 upon satisfaction of customary closing conditions.

beneficially owned by the holder thereof (together with its affiliates) would exceed the specified percentage cap provided therein (which may be adjusted upon 61 days advance notice) immediately after exercise thereof.

The Company also entered into a registration rights agreement with the purchasers whereby it agreed to register the resale of the shares of Class A common stock and ~~exercisable by such holders on~~ the ~~same basis as the Public Warrants.~~

~~GX ACQUISITION CORP.~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~JUNE 30, 2019~~

~~(Unaudited)~~

~~The exercise price and number of~~ shares of Class A common stock issuable upon exercise of the ~~warrants may~~May 2023 PIPE Warrants. The Company will be ~~adjusted in certain circumstances including~~required to prepare and file a registration statement with the SEC, within 30 days, and to use commercially reasonable efforts to have the registration statement declared effective within 45 days if there is no review by the SEC, and within 90 days in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such ~~issue price or effective issue price to be determined in good faith by the Company’s board of directors~~review, and in ~~the case of~~ any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent moreevent, no later than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.

Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of common shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless.

~~NOTE 8. FAIR VALUE MEASUREMENTS~~

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

	~~Level 1:~~	Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

	~~Level 2:~~	Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

	~~Level 3:~~	~~Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.~~

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at June 30, 2019, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description Level June 30,
2019
Assets:
Marketable securities held in Trust Account 1 $ 288,418,585

~~NOTE 9. SUBSEQUENT EVENTS~~

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.

July 31, 2023.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations~~Operations.

~~References in this report (the “Quarterly Report”) to “we,” “us” or~~You should read the “Company” refer to GX Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to GX Sponsor, LLC. The following discussion ~~and analysis~~ of ~~the Company’s~~our financial condition and results of operations ~~should be read in conjunction~~together with the unaudited interim condensed consolidated financial statements and the notes thereto ~~contained~~included elsewhere in this ~~Quarterly Report. Certain~~report and other financial information ~~contained~~included in ~~the~~this report. The following discussion may contain predictions, estimates and ~~analysis set forth below includes~~other forward-looking ~~statements that involve risks and uncertainties.~~

~~Special~~statements. See “Special Note Regarding Forward-Looking ~~Statements~~

~~This Quarterly Report includes “forward-looking statements” within the meaning~~Statements.” These forward-looking statements involve a number of ~~Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts, and involve~~ risks and uncertainties, ~~that~~including those discussed in this report and under “Part I — Item 1A. Risk Factors” in the 2022 Form 10-K. These risks could cause our actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events orany future performance but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering filed with the SEC. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.suggested below.

Overview

~~Overview~~

We are a ~~blank check~~biotechnology company ~~formed under~~leading the ~~laws~~next evolution in cellular medicine by developing off-the-shelf placental-derived allogeneic cell therapies for the treatment of cancer and immune and infectious diseases. We are developing a pipeline of off-the-shelf placental-derived allogeneic cell therapy product candidates including T cells engineered with a chimeric antigen receptor, or CAR, natural killer, or NK, cells, mesenchymal-like adherent stromal cells, or MLASCs and exosomes. These therapeutic candidates target indications across cancer, infectious and degenerative diseases. We believe that by harnessing the placenta’s unique biology and ready availability, we will be able to develop therapeutic solutions that address a significant unmet global need for effective, accessible and affordable therapeutics. We also actively develop and market biomaterial products derived from the placenta. Prior to 2023, we marketed those products domestically primarily serving the orthopedic and wound care markets. We now intend to market placental biomaterials outside of the ~~State~~United States with an initial focus on markets in the Middle East and North Africa. Our biomaterials business today is comprised primarily of Delaware on August 24, 2018 for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses. We intend to effectuate our Business Combination using cash from the proceeds of Initial Public Offering and the sale of our Biovance and Interfyl products, directly or through our distribution network. Biovance is decellularized, dehydrated human amniotic membrane derived from the ~~Private Placement Warrants,~~placenta of a healthy, full-term pregnancy. It is an intact, natural extracellular matrix that provides a foundation for the wound regeneration process and acts as a scaffold for restoration of functional tissue. Interfyl is human connective tissue matrix derived from the placenta of a healthy, full-term pregnancy. It is used by a variety of medical specialists to fill soft tissue deficits resulting from wounds, trauma, or surgery. We are developing new placental biomaterial products to deepen the commercial pipeline beyond Biovance and Interfyl. We also plan to leverage our ~~securities, debt or~~core expertise in cellular therapeutic development and manufacturing to generate revenues by providing contract manufacturing and development services to third parties. The initial focus of this new service offering will be to assist development stage cell therapy companies with the development and manufacturing of their therapeutic candidates for clinical trials. In January 2023, we announced reprioritization of efforts, which resulted in a ~~combination~~reduction of ~~cash, securities~~approximately one-third of our workforce as of March 2023.

Our Celularity IMPACT platform capitalizes on the benefits of placenta-derived cells to target multiple diseases, and ~~debt. Our efforts~~provides seamless integration, from bio sourcing through manufacturing cryopreserved and packaged allogeneic cells, in our purpose-built U.S.-based 147,215 square foot facility. We believe the use of placental-derived cells, sourced from the placentas of full-term healthy informed consent donors, has potential inherent advantages, from a scientific and an economic perspective. First, relative to ~~identify a prospective target business will not be limited~~adult-derived cells, placental-derived cells demonstrate greater stemness, meaning the ability to expand and persist. Second, placental-derived cells are immunologically naïve, meaning the cells have never been exposed to a ~~particular geographic region~~specific antigen, and suggesting the potential for less toxicity and for low or ~~industry.~~no graft-versus-host disease, or GvHD, in transplant. Third, our placental-derived cells are allogeneic, meaning they are intended for use in any patient, as compared to autologous cells, which are derived from an individual patient for that patient’s sole use. We believe this is a key difference that will enable readily available off-the-shelf treatments that can be delivered faster, more reliably, at greater scale and to more patients.

~~The issuance~~From a single source material, the postpartum human placenta, we derive five allogeneic cell or extracellular vesicle types: T cells, unmodified NK cells, genetically modified NK cells, MLASCs and exosomes, which are used in seven key cell therapeutic programs—CYCART-19, CYCART-201, CYNK-001, CYNK-301, CYNK-302, APPL-001, and pEXO-001. CYCART-19 is a placental-derived CAR-T cell therapy, in development for the treatment of B-cell malignancies, initially targeting the cluster of differentiation 19, or CD19, receptor, the construct and related CARs for which are in-licensed from Sorrento. In the first quarter of 2022, we submitted an IND to investigate CYCART-19 for treatment of B-cell malignancies and in late May 2022, received formal written communication from FDA requesting additional ~~shares~~information before we can proceed with the planned Phase 1/2 clinical trial. We are in ~~connection~~the process of working with the FDA in an effort to resolve its questions as promptly as possible. We expect to commence the trial, if the IND is cleared by FDA, and sufficient funding is available, in second half of 2023. We also expect to progress CYCART-201, our genetically modified T-cell expressing CD16 with a T-cell receptor, or TCR, knockout in combination with monoclonal antibodies, or mAbs, in non-Hodgkin's lymphoma, or NHL, and in solid tumors. CYNK-001 is a placental-derived unmodified NK cell. In 2022, we had active and approved clinical trials under development for the treatment of acute myeloid leukemia, or AML, a blood cancer, and for glioblastoma multiforme, or GBM, a solid tumor cancer. We will also advance CYNK-301 as our next generation CAR-NK that has the potential to overcome some of the challenges faced by NK therapies in treating relapse refractory AML, or rrAML. Due to a need to prioritize corporate resources, in January 2023 we announced our intention to cease recruitment in the GBM and the HER2+ gastric trials. In addition, in April 2023, we announced based on the preliminary results of the phase 1 trial data of CYNK-001, the AML trial will be closed to further enrollment. We will however, continue to advance our solid tumor research programs. CYNK-302 is a next generation CAR-NK being developed in solid tumors with an initial focus on non-small cell lung cancer, or NSCLC, an area of continued

high unmet need. APPL-001 is a placenta-derived MLASC being developed for the treatment of Crohn’s disease, and other degenerative diseases. pExo-001 is placenta-derived exosome being developed for the treatment of osteoarthritis.

Our Celularity IMPACT manufacturing process is a seamless, fully integrated process designed to optimize speed and scalability from the sourcing of placentas from full-term healthy informed consent donors through the use of proprietary processing methods, cell selection, product-specific chemistry, manufacturing and controls, or CMC, advanced cell manufacturing and cryopreservation. The result is a suite of allogeneic inventory-ready, on demand placental-derived cell therapy products. We also operate and manage a commercial biobanking business ~~combination~~that includes the collection, processing and cryogenic storage of certain birth byproducts for third-parties.

Our current science is the product of the cumulative background and effort over two decades of our seasoned and experienced management team. We have our roots in Anthrogenesis Corporation, or Anthrogenesis, a company founded under the name Lifebank in 1998 by Robert J. Hariri, M.D., Ph.D., our founder and Chief Executive Officer, and acquired in 2002 by Celgene Corporation, or Celgene. The team continued to hone their expertise in the field of placental-derived technology at Celgene through August 2017, when we acquired Anthrogenesis. We have a robust global intellectual property portfolio comprised of over 1,500 patents and patent applications protecting our Celularity IMPACT platform, our processes, technologies and current key cell therapy programs. We believe this know-how, expertise and intellectual property will drive the rapid development and, if approved, commercialization of these potentially lifesaving therapies for patients with unmet medical needs.

Recent Developments

Private Placement - March 2023

In March 2023, we closed a private placement of (i) 9,381,841 shares of our Class A common stock, and (ii) accompanying warrants to purchase up to 9,381,841 shares of our Class A common stock, or the March 2023 PIPE Warrants, for $0.8343 per share and $0.125 per accompanying March 2023 PIPE Warrant, for an aggregate purchase price of approximately $9.0 million (of which Dr. Hariri subscribed for $2.0 million) pursuant to that certain securities purchase agreement dated March 20, 2023 with two accredited investors, including our Chairman and Chief Executive Officer, Dr. Robert Hariri. Each March 2023 PIPE Warrant has an exercise price of $3.00 per share, is immediately exercisable, will expire on March 27, 2028 (five years from the date of issuance), and is subject to customary adjustments for certain transactions affecting our capitalization.

We also entered into a registration rights agreement with the purchasers whereby we agreed to register the resale of the shares of our Class A common stock and the shares of our Class A common stock issuable upon exercise of the March 2023 PIPE Warrants as well as the shares issued as payment pursuant to the ~~owners~~binding term sheet for a sublicense (described below). We were required to prepare and file a registration statement with the Securities and Exchange Commission, or SEC, within 30 days of the ~~target~~filing of our annual report on Form 10-K for the year ended December 31, 2022, and to use commercially reasonable efforts to have the registration statement declared effective within 45 days if there is no review by the SEC, and within 90 days in the event of such review, and in any event, no later than June 30, 2023.

Senior Secured Bridge Loans

In March 2023, we entered into a Loan Agreement with C.V. Starr & Co. Inc., one of our stockholders, or C.V. Starr, providing for a loan in the aggregate principal amount of $5.0 million net of an original issue discount of $100,000, which bears interest at a rate of 12.0% per year, with the first year of interest being paid in kind on the last day of each month, and matures March 17, 2025, or the Starr Bridge Loan, and warrants to acquire up to an aggregate 750,000 shares of our Class A common stock, or the Starr Warrant, at a purchase price of $0.125 per whole share underlying the Starr Warrant (or $93,750). The Starr Warrant has a 5-year term and an exercise price of $0.71 per share.

Pursuant to the terms of the Starr Bridge Loan, we agreed to customary negative covenants restricting our ability to repay indebtedness, pay dividends to stockholders, repay or incur other ~~investors:~~indebtedness other than as permitted, grant or suffer to exist a security interest in any our assets, other than as permitted, or hold cash and cash equivalents less than $3.0 million for more than five consecutive business days. In addition to the negative covenants in the Starr Bridge Loan, the Starr Bridge Loan include customary events of default. Pursuant to the terms of the Starr Bridge Loan, we granted Starr a senior security interest in all of our assets.

●

may significantly dilute the equity interest of investors, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A shares on a greater than one -to-one basis upon conversion of the Class B common stock;

●

~~may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock;~~

●

could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

●

~~may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and~~

●

~~may adversely affect prevailing market prices for our Class A common stock and/or warrants.~~

In May 2023, we entered into a senior secured loan agreement with Resorts World Inc Pte Ltd, or RWI, providing for a loan in the aggregate principal amount of $6.0 million net of an original issue discount of $120,000, which bears interest at a rate of 12.5% per year, with the first year of interest being paid in kind on the last day of each month, and matures June 14, 2023, or the RWI Bridge Loan. Pursuant to the terms of the RWI Bridge Loan, we are required to apply the net proceeds from the RWI Bridge Loan to the payment due to Yorkville pursuant to that certain pre-paid advance agreement dated September 15, 2022, as amended, or the PPA. Any other use of proceeds requires prior written approval by RWI. RWI is affiliated with Lim Kok Thay, a member of our board of directors.

~~Similarly,~~Pursuant to the terms of the RWI Bridge Loan, we agreed to customary negative covenants restricting our ability to repay indebtedness, pay dividends to stockholders, repay or incur other indebtedness other than as permitted, grant or suffer to exist a security interest in any of our assets, other than as permitted, or hold cash and cash equivalents less than $3.0 million for more than five

consecutive business days. In addition to the negative covenants in the RWI Bridge Loan, the RWI Bridge Loan includes customary events of default. Pursuant to the terms of the RWI Bridge Loan, we granted RWI a senior security interest in all of our assets, pari passu with C.V. Starr pursuant to the Starr Bridge Loan.

Binding Term Sheet for Sublicense Agreement

Concurrent with the entry into the securities purchase agreement for the March 2023 private placement described above; we executed a binding term sheet to negotiate and enter into a sublicense of certain assets from an affiliate of the accredited investor party to the private placement transaction. Pursuant to the binding term sheet, we paid the sublicensor $3.0 million in cash and issued $1.0 million of shares of our Class A common stock (1,694,915 shares based on the closing price on March 17, 2023) as consideration for stem-cells inventory to be used in research and development.

Registered Direct Offering

In April 2023, we closed on a registered direct offering of 9,230,770 shares of our Class A common stock together with warrants to purchase up to 9,230,770 shares of our Class A common stock at a combined purchase price of $0.65 per share and accompanying warrant, resulting in total gross proceeds of approximately $6.0 million before deducting placement agent commissions and other estimated offering expenses. The warrants have an exercise price of $0.75, will be exercisable beginning six months after the date of issuance and will expire five years thereafter. We also amended existing warrants to purchase up to an aggregate of 4,054,055 shares at an exercise price of $8.25 per share, with an expiration date of May 20, 2027, held by the same investor, effective upon the closing of the offering to reduce the exercise price to $0.75 per share and extended expiration date to five and one-half years following the closing of the offering. We used the $5.5 million net proceeds from the offering to repay our obligations to Yorkville under that certain pre-paid advance agreement dated September 15, 2022, as amended, or the PPA.

Private Placement – May 2023

In May 2023, we entered into a securities purchase agreement with a group of accredited investors, providing for the private placement of an aggregate (i) 5,813,945 shares of our Class A common stock and (ii) accompanying warrants to purchase up to 5,813,945 shares of Class A common stock, or the May 2023 PIPE Warrants, for $0.52 per share and $0.125 per accompanying May 2023 PIPE Warrant, for an aggregate purchase price of approximately $3.7 million, which private placement closed on May 18, 2023 upon satisfaction of customary closing conditions.

Each May 2023 PIPE Warrant has an exercise price of $1.00 per share, is immediately exercisable, will expire on May 18, 2028 (five years from the date of issuance), and is subject to customary adjustments for certain transactions affecting our capitalization. The May 2023 PIPE Warrants may not be exercised if the aggregate number of shares of Class A common stock beneficially owned by the holder thereof (together with its affiliates) would exceed the specified percentage cap provided therein (which may be adjusted upon 61 days advance notice) immediately after exercise thereof.

We also entered into a registration rights agreement with the purchasers whereby we ~~issue~~agreed to register the resale of the shares of Class A common stock and the shares of Class A common stock issuable upon exercise of the May 2023 PIPE Warrants. We will be required to prepare and file a registration statement with the SEC within 30 days, and to use commercially reasonable efforts to have the registration statement declared effective within 45 days if there is no review by the SEC, and within 90 days in the event of such review, and in any event, no later than July 31, 2023.

Cell Therapy – Goodwill Impairment

During the three months ended March 31, 2023, we experienced a sustained decline in our stock price resulting in our market capitalization being less than the carrying value of our combined reporting units. We concluded the sustained decline in its stock price and decision to discontinue certain Cell Therapy clinical trials were triggering events during the quarter and we performed a quantitative impairment test on goodwill and acquired in-process research and development (IPR&D) assets. Based on the results of the impairment analysis, we recognized a $29.6 million goodwill impairment charge for the three months ended March 31, 2023, relating to our Cell Therapy reporting unit in our condensed consolidated statements of operations.

Palantir – Cease-Use Costs

In May 2021, our subsidiary, Legacy Celularity executed a Master Subscription Agreement with Palantir Technologies, Inc., or Palantir, under which it agreed to pay $40.0 million over five years for access to Palantir’s Foundry platform along with certain professional services. In January 2023, we ceased use of the software and provided a notice of dispute to Palantir on the basis that the software has not performed as promised and that Palantir has failed to provide us with the professional services necessary to successfully implement, integrate and enable the Foundry platform. As a result, in accordance with ASC 420 Exit or Disposal Costs, during the three months ended March 31, 2023, we recognized the remaining related cease-use costs and liability estimated based on the discounted future cash flows of contract payments for $23.7 million which is included as a component of research and development expense in the condensed consolidated statements of operations. We have both a current and noncurrent liability for accrued research and development software on the condensed consolidated balance sheets for a total liability of $31.0 million and $7.3 million as of March 31, 2023 and December 31, 2022, respectively. For the three months ended March 31, 2022, we had recorded $2.0 million, which was on a

straight-line basis, which was included as a component of research and development expense in our condensed consolidated statements of operations. Palantir has filed to compel arbitration of this dispute. See also Item 1 of Part II of this quarterly report on Form 10-Q.

Going Concern

In accordance with Accounting Standards Update ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), or ASU 205-40, we evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

As an emerging clinical-stage biotechnology company, we are subject to certain inherent risks and uncertainties associated with the development of an enterprise. In this regard, since our inception, substantially all of management’s efforts have been devoted to making investments in research and development including basic scientific research into placentally-derived allogeneic cells, pre-clinical studies to support our current and future clinical programs in cellular therapeutics, and clinical development of our cell programs as well as facilities and selling, general and administrative expenses that support our core business operations (collectively the “investments”), all at the expense of our short-term profitability. We have historically funded these investments through limited revenues generated from our biobanking and degenerative disease businesses and issuances of equity and debt securities to public and private investors (these issuances are collectively referred to as “outside capital”). Notwithstanding these efforts, management can provide no assurance that our research and development and commercialization efforts will be successfully completed, or ~~otherwise incur~~that adequate protection of our intellectual property will be adequately maintained. Even if these efforts are successful, it is uncertain when, if ever, we will generate significant ~~debt~~sales or operate in a profitable manner to ~~bank~~sustain our operations without needing to continue to rely on outside capital. Continued decline in our share price could result in impairment of goodwill or ~~other lenders~~long-lived assets in a future period.

As of the date the accompanying consolidated financial statements were issued, or the ~~owners~~issuance date, management evaluated the significance of the following adverse conditions and events in accordance with ASU 205-40:

•

Since inception, we have incurred significant operating losses and cash used in operating activities. For the three months ended March 31, 2023, we incurred a ~~target, it could result in:~~

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~~default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;~~

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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

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~~our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;~~

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~~our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;~~

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~~our inability to pay dividends on our common stock;~~

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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes;

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~~limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;~~

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~~increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;~~

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~~limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and~~

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~~other purposes and other disadvantages compared to our competitors who have less debt.~~

net operating loss of $63.9 million and cash used in operating activities of $15.0 million. As of March 31, 2023, we had an accumulated deficit of $709.5 million. We expect to continue to incur significant operating losses and use net cash in operations for the foreseeable future.

•

We expect to incur substantial expenditures to fund our investments for the foreseeable future. In order to fund these investments, we will need to secure additional sources of outside capital. While we are actively seeking to secure additional outside capital (and have historically been able to successfully secure such capital), as of the issuance date, no additional outside capital has been secured or was deemed probable of being secured. In addition, management can provide no assurance that we will be able to secure additional outside capital in the future or on terms that are acceptable to us. Absent an ability to secure additional outside capital in the very near term, we will be unable to meet our obligations as they become due over the next 12 months beyond the issuance date.

•

In connection with clinical data received in April 2023, we expect to incur a full impairment charge on our CYNK-001 IPR&D asset for $89.1 million and will be evaluating the potential impact on any further goodwill impairment on our Cell Therapy reporting unit as well as analyzing the potential impact for any impairment for any other long-lived assets for the quarter ended June 30, 2023.

•

We had approximately $32.4 million of borrowings outstanding under a financing arrangement referred to as the PPA with a private investor, Yorkville, as of March 31, 2023. These borrowings are scheduled to mature in September 2023 absent Yorkville’s election to convert some or all of the borrowings into shares of our Class A common stock. On February 22, 2023, Yorkville provided notice to us that a “triggering event” had occurred, we are now required to make repayments of $6.0 million per month plus a payment premium of 5% of the principal amount being paid and all outstanding accrued and unpaid interest (collectively the “repayment amount”). On March 24, 2023, we paid approximately $2.0 million of the repayment amount owed to Yorkville. On April 10, 2023, we paid approximately $5.5 million from the net proceeds from the registered direct to repay Yorkville the remaining balance on the first trigger payment and partial payment towards the second for $900,000. In April 2023, we and Yorkville agreed to defer the remaining second repayment amount owed of approximately $5.6 million to May 14, 2023. On May 16, 2023, we repaid the $5.6 million remaining balance due on the second trigger payment from the net proceeds from the RWI Bridge Loan. We owe Yorkville a third trigger payment of approximately $6.6 million as of the issuance date. If we fail to secure a waiver from Yorkville and fails to pay the remaining repayment amount currently due, Yorkville could deem such non-payment an event of default under the PPA. If Yorkville deems such non-payment an event of default, Yorkville may, at its discretion, exercise its rights and remedies as provided in the PPA which may include, among others, accelerating the repayment of the total principal due under the PPA

(approximately $32.4 million as of March 31, 2023 or approximately $21.8 million as of issuance date), plus accrued and unpaid interest and the 5% premium, and/or force us to seek protection under the provisions of the U.S. Bankruptcy Code. We are also seeking stockholder approval to lower the floor price at which shares may be sold to Yorkville pursuant to the PPA to $0.50.

•

On March 14, 2023, we received a notice from the Nasdaq notifying us that we no longer comply with the minimum bid price requirement for continued listing on the Nasdaq Capital Market because the closing bid price for our Class A common stock has fallen below $1.00 per share for the last 30 consecutive business days. We have a period of 180 calendar days, or until September 11, 2023, to regain compliance with the minimum bid price requirement. We intend to actively monitor the closing bid price of our Class A common stock and will evaluate available options to regain compliance with the minimum bid requirement. However, management can provide no assurance that we will be able to regain compliance with the minimum bid requirement during the 180-day compliance period, secure a second period of 180 days to regain compliance, or maintain compliance with the other Nasdaq listing requirements. In the event we are unable to regain or maintain compliance with the Nasdaq listing requirements, the liquidity of our publicly traded securities will be adversely affected and our ability to secure additional outside capital through public markets will be adversely affected.

•

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 issuance date, which includes the funds needed to repay the outstanding principal on the PPA (plus unpaid accrued interest and the 5% premium) that has become due and will become fully due in September 2023, and/or obtain a waiver to defer the remaining repayment amount currently due to Yorkville, and/or regain compliance with the Nasdaq listing requirements, 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 our 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 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 consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties.

COVID-19 Pandemic and Other Uncertainties

While the impact of COVID-19 has largely subsided, the residual effect of COVID-19 and its variants, as well as new risks emerging from geopolitical conflict, inflation, bank failures and the threat of a recession continue to cause economic instability and could affect our ability to operate our business. During 2022 and the first quarter of 2023, we did not experience any significant impact to operations as a result of such uncertainties.

Business Segments

We manage our operations through an evaluation of three distinct business segments: Cell Therapy, Degenerative Disease, and BioBanking. 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, which are unproven and in various phases of development. All of the cell therapy programs fall into the Cell Therapy segment. We have no approved cell therapy product and have not generated revenue from the sale of cellular therapies to date. Degenerative Disease produces, sells and licenses products used in surgical and wound care markets, such as Biovance, Biovance 3L, Interfyl and CentaFlex. We sell products in this segment both using our own sales force as well as independent distributors. We are developing 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 14, “Segment Information” of our unaudited interim condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q.

Acquisitions and Divestitures

Our current operations reflect strategic acquisitions and divestitures that we have made since formation. Additional details regarding the following acquisitions can be found in Note 1, “Nature of Business” to our unaudited interim condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q.

In May 2017, we acquired HLI Cellular Therapeutics, LLC, or HLI CT, from Human Longevity Inc. HLI CT operated LifebankUSA, a private umbilical cord blood stem cell and cord tissue bank that offers parents the option to collect, process and cryogenically preserve newborn umbilical cord blood stem cells and cord tissue units. The HLI CT acquisition also provided us with rights to a portfolio of biomaterial assets, including Biovance and Interfyl. At the time of the HLI CT acquisition, Biovance and Interfyl

were subject to an exclusive distribution arrangement with Alliqua Biomedical, Inc., or Alliqua. In May 2018, we acquired certain assets from Alliqua, including Alliqua’s biologic wound care business, which included the marketing and distribution rights to Biovance and Interfyl.

In August 2017, we acquired Anthrogenesis, a wholly-owned subsidiary of Celgene. The Anthrogenesis acquisition included a portfolio of pre-clinical and clinical stage assets, including key cellular therapeutic assets that we continue to develop. The Anthrogenesis acquisition gives us access to Anthrogenesis’ proprietary technologies and processes for the recovery of large quantities of high-potential stem cells and cellular therapeutic products derived from postpartum human placentas, each an Anthrogenesis Product. As part of the Anthrogenesis acquisition, some of the inventors of the Anthrogenesis Products and other key members of the Anthrogenesis Product development team joined us.

In October 2018, we acquired CariCord Inc., or CariCord, a family cord blood bank established by ClinImmune Labs University of Colorado Cord Blood Bank and the Regents of the University of Colorado, a body corporate, for and on behalf of the University of Colorado School of Medicine.

Licensing Agreements

In the ordinary course of business, we license intellectual property and other rights from third parties and have also out-licensed our intellectual property and other rights, including in connection with our acquisitions and divestitures, described above. Additional details regarding our licensing agreements can be found in Note 13, “License and Distribution Agreements” to our unaudited interim condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q.

In September 2020, we entered into a license and transfer agreement, or the Sorrento Agreement, with Sorrento. Henry Ji, Ph.D., a former member of the board of directors of our wholly-owned subsidiary, which we refer to as Legacy Celularity, currently serves as President and Chief Executive Officer of Sorrento. Sorrento is also a significant stockholder of our company and invested in the July 2021 private investment in public equity financing concurrent with the closing of the business combination among our company and Legacy Celularity. Pursuant to the Sorrento Agreement, we obtained a worldwide license for the CD19 CAR construct that forms the basis of the genetic modification for CYCART-19. We are currently in the process of negotiating a supply agreement with Sorrento for the manufacturing and supply of the CD19 CAR construct licensed from Sorrento.

In August 2017, in connection with the Anthrogenesis acquisition, we entered into a license agreement, or the Celgene License, with Celgene, which has since been acquired by Bristol Meyers Squibb. Pursuant to the Celgene License, we granted Celgene a worldwide, royalty-free, fully-paid up, non-exclusive license, without the right to grant sublicenses (other than to its affiliates), under Anthrogenesis’ intellectual property in existence as of the date of the Celgene License or as developed by Celgene in connection with any transition services activities related to the merger for non-commercial pre-clinical research purposes, as well as to develop, manufacture, commercialize and fully exploit products and services that relate to the construction of any CAR, the modification of any T-cell or NK cell to express such a CAR, and/or the use of such CARs or T-cells or NK cells for any purpose, which commercial license is sublicensable. Either party may terminate the Celgene License upon an uncured material breach of the agreement by the other party or insolvency of the other party.

In August 2017, Legacy Celularity also issued shares of its Series X Preferred Stock to Celgene as merger consideration and entered into a contingent value rights agreement, or the CVR Agreement, with Celgene pursuant to which Legacy Celularity issued one contingent value right or CVR, in respect of each share of Legacy Celularity Series X Preferred Stock issued to Celgene in connection with the Anthrogenesis acquisition. The CVR Agreement entitles the holders of the CVRs to an aggregate amount, on a per program basis, of $50 million in regulatory milestones and an aggregate $125 million in commercial milestone payments with respect to certain of our investigational therapeutic programs. In addition, with respect to each such program and calendar year, the CVR holders will be entitled to receive a royalty equal to a mid-teen percentage of the annual net sales for such program’s therapeutics from the date of the first commercial sale of such program’s therapeutic in a particular country until the latest to occur of the expiration of the last to expire of any valid patent claim covering such program therapeutic in such country, the expiration of marketing exclusivity with respect to such therapeutic in such country, and August 2027 (i.e., the tenth anniversary of the closing of the acquisition of Anthrogenesis). No payments under the CVR Agreement have been made to date. We estimate the liability associated with the CVR quarterly. Changes to that liability include but are not limited to changes in our clinical programs, assumptions about the commercial value of those programs and the time value of money.

Components of Operating Results

Net revenues

Net revenues include: (i) sales of biomaterial products, including Biovance, Biovance 3L, Interfyl, and CentaFlex of which our direct sales are included in Product Sales and Rentals 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.

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, Interfyl and CentaFlex product lines. Cost of revenues associated with direct sales are part of Product Sales and Rentals while cost of revenues associated with sales through our network of distribution partners are included in License, royalty and other.

Research and development expense

Our 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 as a result of research and development activities. We incur expenses for third party CROs, that assist in running clinical trials, clinical trial supply costs, personnel expenses for research scientists, specialized chemicals and reagents used to conduct biologic research, expense for third party testing and validation and various overhead expenses including rent and facility maintenance expense. Basic research, research collaborations involving partners and research designed to enable successful regulatory submissions is critical to our current and future success in cell therapy. As a result of our reprioritization efforts, we anticipate that our research and development expenditures will decrease in the near term. 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.

General and administrative expense

Selling, general and administrative expense 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. We expect that as a result of our reprioritization efforts, we will see a decrease in our selling, general and administrative costs in the ~~pursuit~~near term. The magnitude and timing of our ~~initial~~selling, general and administrative costs will depend on the progress of clinical trials, 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 ~~combination plans. We cannot assure you~~strategy.

Change in fair value of contingent consideration liability

Because the acquisitions of Anthrogenesis from Celgene and HLI CT were accounted for as business combinations, we recognized acquisition-related contingent consideration on the balance sheets in accordance with the acquisition method of accounting. See “— Acquisitions and Divestitures” for more information. The fair value of contingent consideration liability is determined based on a probability-weighted income approach derived from revenue estimates and a probability assessment with respect to the likelihood of achieving regulatory and commercial milestone obligations and royalty obligations. The fair value of acquisition related contingent consideration is remeasured each reporting period with changes in fair value recorded in the condensed consolidated statements of operations. Changes in contingent consideration fair value estimates result in an increase or decrease in our contingent consideration obligation and a corresponding charge or reduction to operating results. Key elements of the contingent consideration are regulatory milestone payments, sales milestone payments and royalty payments. Regulatory payments are due on regulatory approval of certain cell types in the United States and the European Union. Regulatory milestone payments are one time but are due prior to any potential commercial success of a cell type in a specific indication. Royalty payments are a percentage of net sales. Sales milestone payments are due when certain aggregate sales thresholds have been met. Management must use substantial judgment in evaluating the value of the contingent consideration. Estimates used by management include but are not limited to: (i) the number and type of clinical programs that we are likely to pursue based on the quality of our ~~plans~~preclinical data, (ii) the time required to ~~raise capital or to complete our initial Business Combination will be successful.~~conduct clinical trials, (iii) the odds of regulatory success in those trials, (iv) the potential number of patients treatable for the indications in which we are successful and (v) the pricing of treatments that achieve commercial status. All of these areas involve substantial judgment on the part of management and are inherently uncertain.

Results of Operations

Comparison of Three Months Ended March 31, 2023 to March 31, 2022


	Three Months Ended March 31,									Percent
	2023			2022			Increase (Decrease)			Increase (Decrease)
Net revenues:
Product sales and rentals	$	1,043		$	651			392			60.2	%
Services		1,357			1,283			74			5.8	%
License, royalty and other		1,535			4,001			(2,466	)		(61.6	)%
Total revenues		3,935			5,935			(2,000	)		(33.7	)%
Operating expenses:
Cost of revenues (excluding amortization of acquired intangible assets)
Product sales and rentals		722			474			248			52.3	%
Services		472			948			(476	)		(50.2	)%
License, royalty and other		809			2,604			(1,795	)		(68.9	)%
Research and development		16,951			21,673			(4,722	)		(21.8	)%
Software cease-use costs		23,675			—			23,675			100.0	%
Selling, general and administrative		13,934			16,460			(2,526	)		(15.3	)%
Change in fair value of contingent consideration liability		(18,932	)		4,849			(23,781	)		(490.4	)%
Goodwill impairment		29,633			—			29,633			100.0	%
Amortization of acquired intangible assets		541			541			-			—	%
Total operating expense		67,805			47,549			20,256			42.6	%
Loss from operations	$	(63,870	)	$	(41,614	)	$	(22,256	)		53.5	%

Net Revenues and Cost of Revenues

Net revenues for the three months ended March 31, 2023 was $3.9 million, a decrease of $2.0 million, or 33.7% compared to the prior year period. The decrease was primarily due to $2.5 million decrease in license, royalty and other revenues driven by decreased product sales to distribution partners.

Cost of revenues for the three months ended March 31, 2023 was $2.0 million, a decrease of $2.0 million, or 50.2% compared to the prior year period. The decrease was primarily driven by lower sales to our distribution partners corresponding to our decrease in license, royalty and other revenues.

Research and Development Expenses

Research and development expenses for the three months ended March 31, 2023 were $17.0 million, a decrease of $4.7 million, or 21.8% compared to the prior year period. The decrease was primarily due to a reduction in allocated costs from the prior period as well as lower lab supplies and personnel costs partially offset by $3.0 million purchase of acquired IPR&D with no alternative future use expensed during the three months ended March 31, 2023.

Software Cease-Use Costs

Software cease-use costs for the three months ended March 31, 2023 was $23.7 million compared to $0 for the prior period due to the recognition of the remaining contract value associated with the Palantir platform fees. See Note 9 to our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q for additional information related to the Palantir agreement.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended March 31, 2023 were $13.9 million, a decrease of $2.5 million, or 15.3% compared to the prior year period. The primary reason for the decrease was driven by lower personnel costs and lower consulting expenses.

Change in Fair Value of Contingent Consideration Liability

The change in fair value of contingent consideration liability for the three months ended March 31, 2023 was $18.9 million, a decrease of $23.8 million, or 490.4% compared to the period year period. The decrease resulted from a change in market-based assumptions (for more information about changes in the fair value of contingent consideration liability refer to Note 3, “Fair Value of Financial Assets and Liabilities” in our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q).

Other Income (Expense)


	For the Three Months Ended March 31,									Percent
	2023			2022			Increase (Decrease)			Increase (Decrease)
Interest income	$	116		$	6		$	110			1833.3	%
Interest expense		(277	)		—			(277	)		100.0	%
Change in fair value of warrant liabilities		1,735			(20,932	)		22,667			(108.3	)%
Change in fair value of debt		(1,280	)		—			(1,280	)		100.0	%
Other expense, net		(441	)		(327	)		(114	)		34.9	%
Total other income (expense)	$	(147	)	$	(21,253	)	$	21,106			(99.3	)%

For the three months ended March 31, 2023, other income (expense) increased by $21.1 million compared to the prior year period. The increase was primarily related to a change in the fair value of the warrant liabilities due to the decrease in the price of our Class A common stock (see Note 3, “Fair Value of Financial Assets and Liabilities” in our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q).

Liquidity and Capital Resources

As of March 31, 2023, we had $8.5 million of cash and cash equivalents and an accumulated deficit of $709.5 million. Our primary use of our capital resources is funding our operating expenses, which consist primarily of funding the research and development of our cellular therapeutic candidates, and to a lesser extent, selling, general and administrative expenses.

As of the issuance date, we had approximately $5.7 million of unrestricted cash and cash equivalents available to fund our operations and no available additional sources of outside capital to sustain our operations for a period of 12 months beyond the issuance date. These uncertainties raise substantial doubt about our ability to continue as a going concern. Refer to the Going Concern section above for further details.

To date, we have ~~neither engaged in~~not had any ~~operations nor~~cellular therapeutics approved for sale and have not generated any revenues ~~to date. Our only activities~~ from ~~August 24, 2018 (inception) through June 30, 2019 were organizational activities~~the sale of our cellular therapeutics. We generate limited revenues from our biobanking and ~~those necessary to prepare for the Initial Public Offering, described below, and, after our Initial Public Offering, identifying a target company for a Business Combination.~~degenerative disease businesses. We do not expect to generate any ~~operating~~ revenues from cellular therapeutic product sales unless and until ~~after the completion~~we successfully complete development and obtain regulatory approval for one or more of our ~~Business Combination. We generate non-operating income in the form~~therapeutic candidates, which we expect will take a number of ~~interest income on marketable securities held in the Trust Account. We~~years. 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 ~~incurring expenses as~~limited to our biobanking and degenerative disease businesses. As a result, until such time, if ever, as we can generate substantial revenue from therapeutics and sales of ~~being a public company (for legal, financial reporting, accounting~~our biomaterials products, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potentially collaborations, licenses and ~~auditing compliance)~~other similar arrangements, including drawdowns under the At-The-Market Sales Agreement, dated as of September 8, 2022, by and between us and BTIG, LLC, Oppenheimer & Co. Inc. and B. Riley Securities, Inc., or the ATM Program, and we continue to explore licensing and collaboration arrangements for our cellular therapeutics as well as distribution arrangements for our degenerative disease business including our distribution agreements with CH Trade Group, Tamer and AD Ports to support expansion abroad. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. Failure to obtain this necessary capital or address our liquidity needs may force us to delay, limit or terminate our operations, make further reductions in our workforce, discontinue our commercialization efforts for our biomaterials products as well as other clinical trial programs, liquidate all or a portion of our assets or pursue other strategic alternatives, and/or seek protection under the provisions of the U.S. Bankruptcy Code.

We expect to incur substantial expenses in the foreseeable future for the development and potential commercialization of our cellular therapeutic candidates, expansion of our degenerative disease business and ongoing internal research and development programs. At this time, we cannot reasonably estimate the nature, timing or aggregate amount of costs for our development, potential commercialization, and internal research and development programs. However, to complete our current and future preclinical studies and clinical trials, and to complete the process of obtaining regulatory approval for our therapeutic candidates, as well as to build the sales, marketing and distribution infrastructure that we believe will be necessary to commercialize our cellular therapeutic candidates, if approved, and biomaterials products we may require substantial additional funding in the future.

To date, inflation has not had a significant impact on our business. However, any significant increase in inflation and interest rates could have a significant effect on the economy in general and, thereby, could affect our future operating results.

Cash Flows

The following table summarizes our cash flows for the three months ended March 31, 2023 and 2022:


	For the Three Months Ended March 31,
	2023			2022			Change
Cash (used in)/provided by
Operating activities	$	(14,995	)	$	(34,253	)	$	19,258
Investing activities		(3,209	)		(1,454	)		(1,755	)
Financing activities		12,759			46,495			(33,736	)
Net change in cash, cash equivalents and restricted cash	$	(5,445	)	$	10,788		$	(16,233	)

Operating Activities

Net cash used in operations for the three months ended March 31, 2023 was $19.3 million lower than the prior year period, primarily due ~~diligence expenses.~~to adjustments for non-cash items and recognition of the Palantir cease-use liability (see Note 9).

Investing Activities

We used $3.2 million and $1.5 million of net cash in investing activities for the three months ended March 31, 2023 and 2022, respectively, which consisted of capital expenditures in each period and $3.0 million used to acquire in-process research and development for the three months ended March 31, 2023.

Financing Activities

We generated $12.8 million of net cash from financing activities for the three months ended March 31, 2023, which consisted of $9.0 million from the March 2023 private placement, $5.0 million of proceeds from the Starr Bridge Loan, partially offset by $1.6 million of principal repayments on the Yorkville PPA. For the three months ended ~~June 30, 2019,~~March 31, 2022 we ~~had~~generated $46.5 million of net ~~income of $634,660,~~cash in financing activities, which consisted primarily of ~~interest income~~$46.5 million in cash proceeds from the exercise of warrants to acquire 13,281,386 shares of our Class A common stock.

Critical Accounting Estimates

Our significant accounting policies are summarized in Note 2, “Summary of Significant Accounting Policies,” included within the Notes to our unaudited condensed consolidated financial statements included elsewhere in this quarterly report on ~~marketable securities held~~Form 10-Q and in Note 2 to our audited annual financial statements included in the ~~Trust Account of $671,993 and unrealized gain on marketable securities held~~2022 Form 10-K.

There have been no significant changes in our ~~Trust Account of $246,592, offset by operating costs of $115,250 and a provision for income taxes of $168,675.~~

~~For~~critical accounting policies during the ~~six~~three months ended ~~June 30, 2019, we had net income of $634,539, which consisted of interest income on marketable securities held~~March 31, 2023 as compared with those previously disclosed in the ~~Trust Account~~2022 Form 10-K.

Recent Accounting Pronouncements

See Note 2 to our unaudited condensed consolidated financial statements included herein and Note 2 to our audited annual financial statements for the year ended December 31, 2022 included in the 2022 Form 10-K for information about recent accounting pronouncements, the timing of ~~$671,993~~their adoption, and ~~unrealized gain~~our assessment, to the extent we have made one, of their potential impact on ~~marketable securities held~~our financial condition and results of operations.

JOBS Act Accounting Election

We are an “emerging growth company,” as defined in ~~our Trust Account of $246,592, offset by operating costs of $115,371 and a provision for income taxes of $168,675.~~

~~Liquidity and Capital Resources~~

~~On May 23, 2019, we consummated~~ the ~~Initial Public Offering of 27,500,000 Units, which includes~~JOBS Act. Under the ~~full exercise by~~JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the ~~underwriter~~enactment of the ~~over-allotment option~~JOBS Act until such time as those standards apply to purchase an additional 3,750,000 Units, at $10.00 per Unit, generating gross proceeds of $287,500,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 7,000,000 Private Placement Warrants, at $1.00 per Private Placement Warrant, to our Sponsor, generating gross proceeds of $7,000,000.private companies.

~~Transaction costs amounted to $16,473,117, consisting of $5,000,000 of underwriting fees, $10,812,500 of deferred underwriting fees and $660,617 of other offering costs.~~

For the six months ended June 30, 2019, cash used in operating activities was $194,810. Net income of $634,539 was affected by interest earned on marketable securities held in the Trust Account of $671,993, an unrealized gain on marketable securities held in our Trust Account of $246,592 and a deferred tax provision of $51,784. Changes in operating assets and liabilities provided $37,452 of cash.

As of June 30, 2019, we had marketable securities held in the Trust Account of $288,418,585 (including approximately $919,000 of interest income and unrealized gains) consisting of U.S. Treasury Bills with a maturity of 180 days or less. We ~~intend~~have elected to use ~~substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting commissions)~~this extended transition period to ~~complete a Business Combination. We may withdraw interest~~enable us to ~~pay taxes. Through June 30, 2019, we did not withdraw any interest earned on the Trust Account. To the extent~~comply with new or revised accounting standards that our capital stock or debt is used, in whole or in part, as consideration to complete a Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business.

~~As of June 30, 2019, we had cash of $1,169,030 held outside the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify~~have different effective dates for public and evaluate prospective acquisition candidates, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses, review corporate documents and material agreements of prospective target businesses, select the target business to acquire and structure, negotiate and complete a Business Combination.

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our initial stockholders, officers and directors or their affiliates may, but are not obligated to, loan us funds from time to time or at any time, as may be required. If we complete a Business Combination, we would repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into private ~~warrants at a price of $1.00 per private warrant at the option of the lender. The private warrants would be identical to the Private Placement Warrants.~~

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amounts necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our Public Shares upon completion of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

~~Off-Balance Sheet Arrangements~~

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2019. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

~~Contractual obligations~~

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of the Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative services. We began incurring these fees on May 20, 2019 and will continue to incur these fees monthlycompanies until the earlier of the ~~completion~~date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a ~~Business Combination and the Company’s liquidation.~~result, our

~~Critical Accounting Policies~~

~~The preparation of condensed~~ financial statements ~~and related disclosures in conformity~~may not be comparable to companies that comply with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

~~Common stock subject to possible redemption~~

We account for our common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holdernew or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our Class A common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of our condensed balance sheets.

~~Net loss per common share~~

We apply the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net loss per common share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. Our net income is adjusted for the portion of income that is attributable to common stock subject to possible redemption, as these shares only participate in the earnings of the Trust Account and not our income or losses.

~~Recent accounting standards~~

~~Management does not believe that any recently issued, but not yet effective,~~revised accounting pronouncements ~~if currently adopted, would have a material effect on our condensed financial statements.~~ as of public company effective dates.

Item 3. Quantitative and Qualitative Disclosures About Market ~~Risk~~Risk.

Not applicable.

Following the consummation of our Initial Public Offering, the net proceeds of our Initial Public Offering, including amounts in the Trust Account, have been invested in U.S. government treasury bills, notes or bonds with a maturity of 180 days or less or in certain money market funds that invest solely in US treasuries. Due to the short-term nature of these investments, we do not believe that there will be an associated material exposure to interest rate risk.

Item 4.Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

~~Disclosure~~The term “disclosure controls and ~~procedures are~~procedures”, as defined under Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in ~~our~~the reports ~~filed~~that it files or ~~submitted~~submits under the Exchange 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 a company in ~~our~~the reports ~~filed~~that it files or ~~submitted~~submits under the Exchange Act is accumulated and communicated to ~~our~~the company’s management, including ~~our Chief Executive Officer~~its principal executive and ~~Chief Financial Officer,~~principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Because there are inherent limitations in all control systems, a control system, no matter how well conceived and operated, can provide only reasonable, as opposed to absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

~~Evaluation~~Our management, with the participation of ~~Disclosure Controls and Procedures~~

~~As required by Rules 13a-15 and 15d-15 under the Exchange Act,~~ our ~~Chief~~Principal Executive Officer and ~~Chief~~Principal Financial Officer, ~~carried out an evaluation of~~evaluated the effectiveness ~~of the design and operation~~ of our disclosure controls and procedures as of ~~June 30, 2019.~~the end of the period covered in this quarterly report Form 10-Q. Based ~~upon their~~on that evaluation, ~~our Chief Executive Officer and Chief Financial Officer~~management concluded that ~~our~~the disclosure controls and procedures ~~(as defined~~were not effective, at the reasonable assurance level, as of the end of the period covered by this quarterly report on Form 10-Q, as a result of the material weaknesses in ~~Rules 13a-15 (e) and 15d-15 (e) under~~internal control over financial reporting discussed below.

We previously identified the ~~Exchange Act) were effective.~~

~~Changes in Internal Control Over Financial Reporting~~

~~During the most recently completed fiscal quarter, there has been no change~~following material weaknesses in our internal control over financial reporting:

Control Environment: We had insufficient internal resources with appropriate accounting and finance knowledge and expertise to design, implement, document and operate effective internal controls around our financial reporting process.

ii.

Accounting for Contingent Consideration: Our calculation of the contingent consideration liability contained inconsistent and / or incorrect assumptions resulting in identified audit adjustments.

iii.

Accounting for Deferred Taxes: Our calculation of deferred tax assets and deferred tax liabilities contained errors resulting in identified audit adjustments.

iv.

Accounting for Warrants: Our calculation of warrant liabilities contained inconsistent and / or incorrect assumptions resulting in identified audit adjustments.

We are currently implementing our remediation plan to address the material weaknesses identified above. Such measures include:

•

Hiring additional accounting personnel to ensure timely reporting of significant matters.

•

Designing and implementing controls to formalize roles and review responsibilities to align with our team’s skills and experience and designing and implementing formalized controls.

•

Designing and implementing procedures to identify and evaluate changes in our business and the impact on our internal controls.

•

Designing and implementing formal processes, policies and procedures supporting our financial close process.

•

Engaging an outside firm to assist with the documentation, design and implementation of our internal control environment.

Changes in Internal Control over Financial Reporting

Other than in connection with executing upon the continued implementation of the remediation measures referenced above, there were no changes in our internal controls over financial reporting that ~~has~~occurred during our first fiscal quarter ended March 31, 2023 that materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

PART ~~II -~~ II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in litigation or other legal proceedings. Except as set forth below, we are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact because of defense and settlement costs, diversion of management resources and other factors.

~~None.~~Arbitration Demand from Palantir Technologies Inc.

On April 20, 2023, Palantir Technologies Inc., or Palantir, commenced an arbitration with JAMS Arbitration asserting claims for declaratory relief and breach of contract relating to the May 5, 2021 Master Service Agreement, or the Palantir MSA, seeking damages in an amount equal to the full value of the contract. The Company has responded to the arbitration demand and asserted counterclaims for breach of contract, breach of warranty, fraudulent inducement, violation of California’s Unfair Competition Law, amongst others, in relation to the Palantir MSA. While the Company believes that Palantir’s claims are without merit and intends to vigorously defend against those claims, there can be no assurance as to the outcome of the arbitration.

Celularity Inc. v. Evolution Biologyx, LLC, et al.

On April 17, 2023, we 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 our biomaterial products in the amount of approximately $2.35 million, plus interest. In September 2021, we executed a distribution agreement with Evolution, whereupon Evolution purchased biomaterial products from us for sale through Evolution’s distribution channels. We fulfilled Evolution’s orders and otherwise performed each of our obligations under the distribution agreement. Despite attempts to recover the outstanding invoices and Evolution’s promise to pay, Evolution has refused to pay any of the invoices and has materially breached its obligations under the distribution agreement. Our complaint asserts claims of breach of contract and fraudulent inducement, amongst others. We intend to vigorously pursue the matter to recover the outstanding payments owed by Evolution, as well as interest and reasonable attorney's fees, but there can be no assurance as to the outcome of the litigation.

Item 1A. Risk Factors.

~~Factors that could cause our actual~~Our operations and financial results are subject to ~~differ materially from~~various risks and uncertainties, including those ~~in this Quarterly Report are any of the risks~~ described in Part I, Item 1A, "Risk Factors" in our ~~final prospectus~~Annual Report on Form 10-K for ~~our Initial Public Offering~~the year ended December 31, 2022 filed with the SEC on May 21, 2019. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our final prospectus dated May 21, 2019 filed with the SEC.March 31, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

On May 23, 2019, we consummated the Initial Public Offering of 28,750,000 Units, which includes the full exercise by the underwriter of the over-allotment option to purchase an additional 3,750,000 Units. The Units sold in the Initial Public Offering were sold at an offering price of $10.00 per Unit, generating total gross proceeds of $287,500,000. Cantor Fitzgerald & Co., acted as sole book-running manager of the Initial Public Offering. The securities in the offering were registered under the Securities Act on a registration statement on~~Form S-1~~ ~~(No. 333-231074). The SEC declared the registration statement effective on May 20, 2019.~~

Simultaneous with the consummation of the Initial Public Offering, we consummated the private placement of an aggregate of 7,000,000 warrants, each exercisable to purchase one share of the Company’s Class A common stock for $11.50 per share (“Private Placement Warrants”), to the Sponsor at a price of $1.00 per Private Placement Warrant, generating total proceeds of $7,000,000. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

The Private Placement Warrants are identical to the warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants are not transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees.

Of the gross proceeds received from the Initial Public Offering and the Private Placement Warrants, $287,500,000 was placed in a Trust Account. We paid a total of $5,000,000 in underwriting discounts and commissions and $660,617 for other costs and expenses related to the Initial Public Offering. In addition, the underwriters agreed to defer $10,812,500 in underwriting discounts and commissions.

~~For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q.~~

Item 3. Defaults Upon Senior Securities.

None.

~~None~~

Item 4. Mine Safety Disclosures.

Not applicable.

~~Not Applicable.~~

Item 5. Other Information.

None.

~~None.~~

Item 6. ~~Exhibits~~

~~The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.~~

Exhibits.

~~Exhibit No.~~		~~Description~~
~~1.1~~		~~Underwriting Agreement, dated May 20, 2019, by and among the Company and Cantor Fitzgerald & Co., as representatives of the several underwriters. (1)~~
~~3.1~~ Exhibit Number		Description

3.1		Amended and Restated Certificate of ~~Incorporation. (1)~~Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the current report on Form 8-K, filed with the Commission on July 22, 2021).
~~4.1~~ 3.2		Amended and Restated Bylaws of the Company (~~Warrant~~incorporated by reference to Exhibit 3.2 to the current report on Form 8-K, filed with the Commission on July 22, 2021).
10.1		Securities Purchase Agreement dated ~~May~~as of March 20, ~~2019,~~2023 (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K, filed with the Commission on March 23, 2023).


10.2		Form of PIPE Warrant (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K, filed with the Commission on March 23, 2023).
10.3		Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K, filed with the Commission on March 23, 2023).
10.4#		Amendment to the Employment Agreement, as of January 25, 2023, by and between Celularity Inc. and Robert J. Hariri (incorporated by reference to Exhibit 10.14 to the ~~Company and Continental Stock Transfer & Trust Company, as warrant agent. (1)~~annual report on Form 10-K, filed with the Commission on March 31, 2023).
~~10.1~~ 10.5		~~Letter~~Secured Loan Agreement, dated ~~May 20, 2019, by and~~as of March 17, 2023, among ~~the Company, its officers, its directors~~Celularity Inc. and the ~~Sponsor. (1)~~lender party thereto (incorporated by reference to Exhibit 10.4 to the current report on Form 8-K, filed with the Commission on March 23, 2023).
~~10.2~~ 10.6		~~Investment Management Trust Agreement, dated May 20, 2019,~~Form of Starr Warrant issued on March 17, 2023 (incorporated by ~~and between~~reference to Exhibit 10.5 to the ~~Company and Continental Stock Transfer & Trust Company, as trustee. (1)~~current report on Form 8-K, filed with the Commission on March 23, 2023).
~~10.3~~ 31.1		~~Registration Rights Agreement, dated May 20, 2019, by and among the Company and the Sponsor. (1)~~
~~10.4~~		~~Administrative Support Agreement, dated May 20, 2019, by and between the Company and Trimaran Fund Management, LLC. (1)~~
~~10.5~~		~~Private Placement Warrants Purchase Agreement, dated May 20, 2019, by and between the Company and the Sponsor. (1)~~
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act ~~Rules 13a-14(a) and 15(d)-14(a),~~of 1934, as ~~adopted~~Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002~~2002.
31.2* 31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act ~~Rules 13a-14(a) and 15(d)-14(a),~~of 1934, as ~~adopted~~Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002~~2002.
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as ~~adopted~~Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as ~~adopted~~Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.
101.INS*
101.INS		Inline XBRL Instance ~~Document~~Document- the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document
101.CAL* 101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH* 101.DEF		~~XBRL Taxonomy Extension Schema Document~~
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* 101.LAB		Inline XBRL Taxonomy Extension ~~Labels~~Label Linkbase Document
101.PRE* 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

~~Filed herewith.~~

~~Furnished.~~

~~(1)~~

~~Previously filed as an exhibit to our Current Report on Form 8-K filed on May 24, 2019 and incorporated by reference herein.~~

~~SIGNATURES~~

# 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.

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.

	~~GX ACQUISITION CORP.~~
		CELULARITY INC.
~~Date: August 7, 2019~~	~~By:~~	~~/s/ Jay R. Bloom~~
Date: May 22, 2023	~~Name:~~	~~Jay R. Bloom~~ By:	/s/ Robert J. Hariri
	~~Title:~~		Robert J. Hariri, M.D., Ph.D.
			Chief Executive Officer
			(~~Co-Principal~~Principal Executive Officer)

Date: ~~August 7, 2019~~May 22, 2023	~~By:~~	By:	/s/ ~~Andrea J. Kellett~~David C. Beers
	~~Name:~~	~~Andrea J. Kellett~~	David C. Beers
	~~Title:~~		Chief Financial Officer
			(Principal Financial and Accounting Officer)

~~Delaware~~		~~83-1702591~~
Delaware	83-1702591
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
170 Park Ave,Florham Park,NJ (Address of principal executive offices)	07932 (Zip Code)


Title of each class	~~Trading Symbol(s)~~		Trading Symbol(s)	Name of each exchange on which registered
~~Units, each consisting of one share of Class A Common Stock and one-half of one Redeemable Warrant~~	~~GXGXU~~	~~The NASDAQ Stock Market LLC~~
Class A Common Stock, par value $0.0001 per share	~~GXGX~~ CELU	The ~~NASDAQ~~Nasdaq Stock Market LLC
Warrants, each exercisable for one share of Class A Common Stock ~~for~~at an exercise price of $11.50 per share ~~Market LLC~~	~~GXGXW~~ CELUW	The ~~NASDAQ~~Nasdaq Stock Market LLC

	~~Page~~
~~Part I. Financial Information~~		Page
~~Item 1. Financial Statements~~ PART I.	FINANCIAL INFORMATION
~~Condensed Balance Sheet~~s Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	2
	Condensed ~~Statement~~Consolidated Statements of ~~Changes in~~ Stockholders’ Equity	3
	Condensed ~~Statement~~Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13 31
Item 3.	Quantitative and Qualitative Disclosures ~~Regarding~~About Market Risk	15 41
Item 4.	Controls and Procedures	16 41
PART II.	OTHER INFORMATION
~~Part II. Other Information~~ Item 1.	Legal Proceedings	42
Item ~~1. Legal Proceedings~~1A.	16 Risk Factors	42
~~Item 1A. Risk Factors~~	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16 42
Item 3.	Defaults Upon Senior Securities	17 42
Item 4.	Mine Safety Disclosures	17 42
Item 5.	Other Information	17 42
Item 6. ~~Exhibits~~	17 Exhibits	42
~~Part III.~~ Signatures		18 44

	June 30, 2019		December 31, 2018
	(unaudited)
ASSETS
Current Assets
Cash	$	1,169,030	$	24,707
Prepaid expenses		134,942		—
Total Current Assets		1,303,972		24,707

Deferred offering costs		—		149,750
Marketable securities held in Trust Account		288,418,585		—
Total Assets	$	289,722,557	$	174,457

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	56,058	$	555
Income taxes payable		116,891		—
Promissory note - related party		—		150,000
Total Current Liabilities		172,949		150,555

Deferred tax liability		51,784		—
Deferred underwriting fee payable		10,812,500		—
Total Liabilities		11,037,233		150,555

Commitments and Contingencies (Note 6)

Common stock subject to possible redemption, 27,297,161 and no shares at redemption value as of June 30, 2019 and December 31, 2018, respectively		273,685,323		—

Stockholders’ Equity
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—		—
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 1,452,839 and no shares issued and outstanding (excluding 27,297,161 and no shares subject to possible redemption) as of June 30, 2019 and December 31, 2018, respectively		145		—
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 7,187,500 and 8,625,000 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively⁽¹⁾		719		863
Additional paid-in capital		4,365,696		24,137
Retained earnings/(Accumulated deficit)		633,441		(1,098	)
Total Stockholders’ Equity		5,000,001		23,902
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	289,722,557	$	174,457


	March 31, 2023			December 31, 2022

Assets
Current assets:
Cash and cash equivalents	$	8,532		$	13,966
Accounts receivable, net of allowance of $2,350 and $1,789 as of March 31, 2023 and December 31, 2022, respectively		3,050			4,452
Notes receivable		2,115			2,514
Inventory		5,484			5,308
Prepaid expenses and other current assets		5,823			7,262
Total current assets		25,004			33,502
Property and equipment, net		74,056			75,655
Goodwill		90,061			119,694
Intangible assets, net		120,453			120,994
Right-of-use assets - operating leases		13,079			13,060
Restricted cash		14,825			14,836
Inventory, net of current portion		24,586			22,949
Other long-term assets		352			376
Total assets	$	362,416		$	401,066
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	8,755		$	5,810
Accrued expenses and other current liabilities		9,559			9,069
Accrued R&D software		15,000			7,333
Short-term debt ($30,945 at fair value and $32,382 unpaid principal balance at March 31, 2023)		30,945			37,603
Deferred revenue		2,199			2,273
Total current liabilities		66,458			62,088
Deferred revenue, net of current portion		2,325			2,219
Acquisition-related contingent consideration		87,013			105,945
Noncurrent lease liabilities - operating		28,049			27,985
Noncurrent accrued R&D software		16,008			-
Long-term debt		4,745			-
Warrant liabilities		1,863			3,598
Deferred income tax liabilities		9			9
Other liabilities		318			321
Total liabilities		206,788			202,165
Commitments and Contingencies (Note 9)
Stockholders’ equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding at March 31, 2023 and December 31, 2022		-			-
Common Stock, $0.0001 par value, 730,000,000 shares authorized, 165,030,414 issued and outstanding as of March 31, 2023; 730,000,000 shares authorized, 148,921,187 issued and outstanding as of December 31, 2022		17			15
Additional paid-in capital		862,457			844,373
Accumulated other comprehensive income		2,667			9
Accumulated deficit		(709,513	)		(645,496	)
Total stockholders’ equity		155,628			198,901
Total liabilities and stockholders’ equity	$	362,416		$	401,066


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


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

	Three Months Ended June 30,			Six Months Ended June 30,
	2019			2019

Operating and formation costs	$	115,250		$	115,371
Loss from operations		(115,250	)		(115,371	)

Other income:
Interest income on marketable securities held in Trust Account		671,993			671,993
Unrealized gain on marketable securities held in Trust Account		246,592			246,592
Other income		918,585			918,585

Income before provision for income taxes		803,335			803,214
Provision for income taxes		(168,675	)		(168,675	)
Net income	$	634,660		$	634,539

Weighted average shares outstanding, basic and diluted⁽¹⁾		7,258,681			7,378,674

Basic and diluted net loss per common share⁽²⁾	$	(0.00	)	$	(0.00	)

~~(1)~~	~~Excludes an aggregate of up to 27,297,161 shares subject to possible redemption at June 30, 2019.~~
~~(2)~~	~~Net loss per common share – basic and diluted excludes income of $664,565 attributable to common stock subject to possible redemption for the three and six months ended June 30, 2019.~~

	Class A Common Stock						Class B Common Stock						Additional Paid-in			(Accumulated Deficit)/ Retained			Total Stockholders’
	Shares			Amount			Shares			Amount			Capital			Earnings			Equity
Balance – January 1, 2019		—		$	—			8,625,000		$	863		$	24,137		$	(1,098	)	$	23,902

Net loss								—			—			—			(121	)		(121	)

Balance – March 31, 2019 (unaudited)		—			—			8,625,000			863			24,137			(1,219	)		23,781

Sale of 28,750,000 Units, net of underwriting discounts and offering expenses		28,750,000			2,785			—			—			271,024,008			—			271,026,883

Sale of 7,000,000 Private Placement Warrants		—			—			—			—			7,000,000			—			7,000,000

Forfeiture of Founder Shares		—			—			(1,437,500	)		(144	)		144			—			—

Common stock subject to possible redemption		(27,297,161	)		(2,730	)		—			—			(273,682,593	)		—			(273,685,323	)

Net income		—			—			—			—			—			634,660			634,660

Balance – June 30, 2019 (unaudited)		1,452,839		$	145			7,187,500		$	719		$	4,365,696		$	633,441		$	5,000,001


	Common Stock					Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares			Amount		Capital			Deficit			Income (Loss)			Equity
Balances at December 31, 2022		148,921,287		$	15	$	844,373		$	(645,496	)	$	9		$	198,901
Exercise of stock options		1,071,000			-		300			-			-			300
Common stock issued pursuant to short-term debt conversion		3,656,118			1		3,509			-			(152	)		3,358
Issuance of common stock in PIPE Offering, net of offering expenses		9,381,841			1		8,930									8,931
Issuance of common stock for stem-cells to be used in research and development		1,694,915			-		1,000									1,000
Vesting of restricted stock units		253,390			-		-			-			-			-
Tax withholding on vesting of restricted stock units		(81,095	)		-		(53	)		-			-			(53	)
Issuance of common stock under ATM Agreement		132,958			-		136			-			-			136
Issuance of warrants on senior secured bridge loan		-			-		274			-			-			274
Stock-based compensation expense		-			-		3,988			-			-			3,988
Change in fair value of debt due to change in credit risk, net of tax		-			-		-			-			2,810			2,810
Net loss		-			-		-			(64,017	)		-			(64,017	)
Balances at March 31, 2023		165,030,414		$	17	$	862,457		$	(709,513	)	$	2,667		$	155,628

Balances at December 31, 2021		124,307,884		$	12	$	763,087		$	(663,681	)	$	-		$	99,418
Cumulative effect adjustment ASU 2016-02 (1)		-			-		-			3,996			-			3,996
Reclassification of previously exercised stock options		131,253			-		441			-			-			441
Exercise of warrants		13,281,386			2		46,483			-			-			46,485
Exercise of stock options		10,255			-		21			-			-			21
Purchase and retirement of common shares		(3,058	)		-		(11	)		-			-			(11	)
Stock-based compensation expense		-			-		2,422			-			-			2,422
Net loss		-			-		-			(62,867	)		-			(62,867	)
Balances at March 31, 2022		137,727,720		$	14	$	812,443		$	(722,552	)	$	-		$	89,905

Cash Flows from Operating Activities:
Net income	$	634,539
Adjustments to reconcile net income to net cash used in operating activities:
Interest earned on marketable securities held in Trust Account		(671,993	)
Unrealized gain on marketable securities held in Trust Account		(246,592	)
Deferred income tax provision		51,784
Changes in operating assets and liabilities:
Prepaid expenses		(134,942	)
Accounts payable and accrued expenses		55,503
Income taxes payable		116,891
Net cash used in operating activities		(194,810	)

Cash Flows from Investing Activities:
Investment of cash in Trust Account		(287,500,000	)
Net cash used in investing activities		(287,500,000	)

Cash Flows from Financing Activities:
Proceeds from sale of Units, net of underwriting discounts paid		282,500,000
Proceeds from sale of Private Placement Warrants		7,000,000
Proceeds from promissory notes – related party		130,000
Repayment of promissory notes – related party		(280,000	)
Payment of offering costs		(510,867	)
Net cash provided by financing activities		288,839,133

Net Change in Cash		1,144,323
Cash – Beginning		24,707
Cash – Ending	$	1,169,030

Non-cash investing and financing activities:
Initial classification of common stock subject to redemption	$	273,048,700
Change in value of common stock subject to possible redemption	$	636,623
Deferred underwriting fee payable	$	10,812,500

Description	Level	June 30, 2019
Assets:
Marketable securities held in Trust Account	1	$	288,418,585

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company