1. Organization of the Company and Significant Accounting Policies

9 Months Ended

Jun. 30, 2014

Organization of the Company and Significant Accounting Policies

Organization of the Company and Significant Accounting Policies

American CryoStem Corporation (the “Company”) is a publicly held corporation formed on March 13, 2009 in the state of Nevada as R&A Productions Inc. (R&A).

In April 2011, R&A purchased substantially all the assets and liabilities of American CryoStem Corporation (ACS) for 21 million shares of common stock. ACS was deemed to be the accounting acquirer. At that time, the former operations of R&A were discontinued and the name of the Company was changed to American CryoStem Corporation.

The Company operates within the Regenerative Medicine sector of the Life Sciences industry which aims to repair, replace or regenerate organs and tissue that have been damaged or diseased, to provide its consumers and institutions with a standardized, patented cellular platform and clinical grade solutions using adipose derived adult stem cells (ADSCs).

The Company maintains a state-of-the-art, FDA-registered, clinical laboratory dedicated to processing, bio-banking and manufacturing of cellular applications using autologous adipose (fat) tissue and ADSCs. Through its scientific efforts, the Company has built a strong, strategic portfolio of intellectual property, patent applications, and proprietary operating procedural processes that form its core cellular platform.

The Company has received Institutional Review Board (IRB) approval of its protocols for isolating Stromal Vascular Fraction (SVF) and culturing of ADSCs from a patient’s adipose tissue. These protocols provide validated testing methods necessary to move the clinical investigative process towards uniform disease treatments, and the collection of cGMP data necessary for approval of regenerative cellular therapies.

The Company’s lead product, ATCELL ^™, is currently being combined with university research and product development partners and collaborators such as Rutgers University and Autogenesis Corporation to create new cellular therapy applications.

Use of Estimates - The preparation of the financial statements in conformity with United States Generally Accepted Accounting Principles (“GAAP”) uniformly applied requires management to make reasonable estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses at the date of the financial statements and for the period they include. Actual results may differ from these estimates.

Cash and interest bearing deposits - For the purpose of calculating changes in cash flows, cash includes all cash balances and highly liquid short-term investments with an original maturity of three months or less.

Revenue Recognition – The Company recognizes revenue from the processing of adipose tissue into usable stem cells once all the procedures have been performed and the client sample has been stored in the Company’s cryogenic storage tank. Storage revenues for stored client samples are recognized on an annual basis on the anniversary date of the storage.

Long Lived Assets - The Company reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount.

Equipment - Equipment is stated at cost. Depreciation expense is computed using the straight-line method over the estimated useful life of the assets, which is estimated as follows:  

Office equipment	5 years
Lab equipment & Furniture	7 years
Lab software	5 years
Leasehold improvements	15 years

Income taxes - The Company accounts for income taxes in accordance with generally accepted accounting principles which require an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between financial statement and income tax bases of assets and liabilities that will result in taxable income or deductible expenses in the future 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 and liabilities to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period adjusted for the change during the period in deferred tax assets and liabilities.  

The Company follows the accounting requirements associated with uncertainty in income taxes using the provisions of Financial Accounting Standards Board (FASB) ASC 740, Income Taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the positions will be sustained upon examination by the tax authorities. It also provides guidance for derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of June 30, 2014, the Company has no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. All tax returns from fiscal years 2009 to 2012 are subject to IRS audit.  

Recent Accounting Pronouncements:

There are no recently issued accounting pronouncements that have a material impact on the Company’s financial statements.