10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2015.

or

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition from _____________ to _______________.

Commission File Number: 000-16375

Cesca Therapeutics Inc.

(Exact name of registrant as specified in its charter)

Delaware	94-3018487
(State of incorporation)	(I.R.S. Employer Identification No.)

2711 Citrus Road

Rancho Cordova, California 95742

(Address of principal executive offices) (Zip Code)

(916) 858-5100

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).

Yes ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐    No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at June 16, 2015
Common stock, $.001 par value	40,453,431

Cesca Therapeutics Inc.

INDEX

		Page Number
Part I	Financial Information
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	22
Item 4.	Controls and Procedures	22
Part II	Other Information
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults upon Senior Securities	24
Item 4.	Mine Safety Disclosure	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
Signatures		26

i

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Cesca Therapeutics Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

	March 31, 2015			June 30, 2014
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	4,792		$	14,811
Accounts receivable, net of allowance for doubtful accounts of $111 ($47 at June 30, 2014)		5,717			4,693
Inventories		5,007			5,606
Prepaid expenses and other current assets		200			217
Total current assets		15,716			25,327
Equipment, less accumulated depreciation of $4,716 ($4,099 at June 30, 2014)		2,957			2,298
Goodwill		13,195			13,254
Intangible assets, net		21,422			21,928
Other assets		79			81
Total assets	$	53,369		$	62,888
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,686		$	3,590
Accrued payroll and related expenses		982			599
Deferred revenue		610			638
Other current liabilities		2,122			1,553
Total current liabilities		8,400			6,380
Noncurrent deferred tax liability		7,641			7,641
Other noncurrent liabilities		287			169
Total liabilities		16,328			14,190
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 2,000,000 shares authorized; none outstanding		--			--
Common stock, $0.001 par value; 80,000,000 shares authorized; 40,417,518 issued and outstanding  (40,200,529 at June 30, 2014)		40			40
Paid in capital in excess of par		172,291			171,422
Accumulated deficit		(135,300	)		(122,822	)
Accumulated other comprehensive income		10			58
Total stockholders’ equity		37,041			48,698
Total liabilities and stockholders’ equity	$	53,369		$	62,888

See accompanying notes.

Page 3

Cesca Therapeutics Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(in thousands, except share and per share amounts)

	Three Months Ended March 31,						Nine Months Ended March 31,
	2015			2014			2015			2014
Net revenues	$	4,042		$	4,038		$	12,340		$	12,150
Cost of revenues		2,899			2,502			8,470			7,434
Gross profit		1,143			1,536			3,870			4,716
Expenses:
Sales and marketing		787			687			2,315			2,115
Research and development		1,712			768			4,731			2,398
General and administrative		3,480			1,940			9,300			5,964
Total operating expenses		5,979			3,395			16,346			10,477
Loss from operations		(4,836	)		(1,859	)		(12,476	)		(5,761	)
Other income (expense), net		25			--			(2	)		--
Net loss	$	(4,811	)	$	(1,859	)	$	(12,478	)	$	(5,761	)
Net loss	$	(4,811	)	$	(1,859	)	$	(12,478	)	$	(5,761	)
Other comprehensive income:
Foreign currency translation adjustments		21			50			(48	)		50
Comprehensive loss	$	(4,790	)	$	(1,809	)	$	(12,526	)	$	(5,711	)
Per share data:
Basic and diluted net loss per common share	$	(0.12	)	$	(0.07	)	$	(0.31	)	$	(0.28	)
Weighted average common shares outstanding – Basic and diluted		40,371,064			28,430,676			40,316,468			20,592,099

See accompanying notes.

Page 4

Cesca Therapeutics Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Nine Months Ended March 31,
	2015			2014
Cash flows from operating activities:
Net loss	$	(12,478	)	$	(5,761	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,013			587
Stock based compensation expense		966			462
Impairment of intangible asset		117			--
Net change in operating assets and liabilities:
Accounts receivable, net		(1,027	)		(724	)
Inventories		66			(430	)
Prepaid expenses and other current assets		17			84
Other assets		1			3
Accounts payable		1,110			(397	)
Accrued payroll and related expenses		383			174
Deferred revenue		6			129
Other liabilities		511			(223	)
Net cash used in operating activities		(9,315	)		(6,096	)
Cash flows from investing activities:
Capital expenditures		(544	)		(326	)
Cash acquired in acquisition		--			351
Net cash provided by (used in) investing activities		(544	)		25
Cash flows from financing activities:
Payments on capital lease obligations		(39	)		--
Repayment of related party notes payable		--			(150	)
Exercise of options		--			21
Issuance of common stock		--			5,944
Repurchase of common stock		(97	)		(68	)
Net cash provided by (used in) financing activities		(136	)		5,747
Effects of foreign currency rate changes on cash and cash equivalents		(24	)		15
Net decrease in cash and cash equivalents		(10,019	)		(309	)
Cash and cash equivalents at beginning of period		14,811			6,884
Cash and cash equivalents at end of period	$	4,792		$	6,575
Supplemental non-cash financing and investing information:
Transfer of inventories to equipment	$	482		$	65
Stock issued for repayment of related party note payable		--		$	187
Equipment acquired by capital lease	$	208			--

See accompanying notes.

Page 5

Cesca Therapeutics Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(in thousands, except share and per share amounts)

1. Basis of Presentation and Summary of Significant Accounting Policies

Organization and Basis of Presentation

Cesca Therapeutics Inc. (the Company, we or our) is focused on the research, development, and commercialization of autologous cell-based therapeutics for use in regenerative medicine.  We are a leader in developing and manufacturing automated blood and bone marrow processing systems that enable the separation, processing and preservation of cell and tissue therapy products.

Liquidity

At March 31, 2015, we had cash and cash equivalents of $4,792 and working capital of $7,316.  This compares to cash and cash equivalents of $14,811 and working capital of $18,947 at June 30, 2014.  The Company has primarily financed operations through private and public placement of equity securities.

Net cash used in operating activities for the nine months ended March 31, 2015 was $9,315 compared to $6,096 for the nine months ended March 31, 2014.  The increase is primarily due to costs associated with transforming the company from a device oriented company to a fully integrated regenerative medicine company.  Significant investments were made in research and development to develop and advance our clinical programs.

Based on our cash balance, historical trends, expected outflows for our clinical trial programs and projections for revenues, we expect to raise capital for investing in the strategic business plan through equity, strategic development partners or grants, debt, depending on market conditions.  Should we require additional funding, such as additional capital investments, we may need to raise the required additional funds through bank borrowings or public or private sales of debt or equity securities.  We cannot assure that such funding will be available in needed quantities or on terms favorable to us, if at all.  If we are unable to generate sufficient revenues or to obtain additional funds for our working capital needs, we may need to scale-back operations or slow down our clinical trial programs.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Cesca Therapeutics Inc., and our wholly-owned subsidiaries, TotipotentRX Cell Therapy, Pvt. Ltd. and TotipotentSC Scientific Product Pvt. Ltd.  All significant intercompany accounts and transactions have been eliminated upon consolidation.

Interim Reporting

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such Securities and Exchange Commission (SEC) rules and regulations and accounting principles applicable for interim periods.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Events subsequent to the balance sheet date have been evaluated for inclusion in the accompanying condensed financial statements through the date of issuance.  Operating results for the nine month period ended March 31, 2015, are not necessarily indicative of the results that may be expected for the year ending June 30, 2015.  These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2014.

Page 6

Revenue Recognition

Revenues from the sale of our products and services are recognized when persuasive evidence of an arrangement exists, delivery has occurred (or services have been rendered), the price is fixed or determinable, and collectability is reasonably assured.  We generally ship products F.O.B. shipping point.  There is no conditional evaluation on any product sold and recognized as revenue.  Amounts billed in excess of revenue recognized are recorded as deferred revenue on the balance sheet.

Our sales are generally through distributors.  There is no right of return provided for distributors.  For sales of products made to distributors, we consider a number of factors in determining whether revenue is recognized upon transfer of title to the distributor, or when payment is received.  These factors include, but are not limited to, whether the payment terms offered to the distributor are considered to be non-standard, the distributor history of adhering to the terms of its contractual arrangements with us, the level of inventories maintained by the distributor, whether we have a pattern of granting concessions for the benefit of the distributor, and whether there are other conditions that may indicate that the sale to the distributor is not substantive.  We currently recognize revenue primarily on the sell-in method with our distributors.

Revenue arrangements with multiple deliverables are divided into units of accounting if certain criteria are met, including whether the deliverable item(s) has (have) value to the customer on a stand-alone basis.  Revenue for each unit of accounting is recognized as the unit of accounting is delivered.  Arrangement consideration is allocated to each unit of accounting based upon the relative estimated selling prices of the separate units of accounting contained within an arrangement containing multiple deliverables.  Estimated selling prices are determined using vendor specific objective evidence of value (VSOE), when available, or an estimate of selling price when VSOE is not available for a given unit of accounting.  Significant inputs for the estimates of the selling price of separate units of accounting include market and pricing trends and a customer’s geographic location.  We account for training and installation, and service agreements and the collection, processing and testing of the umbilical cord blood and the storage as separate units of accounting.

Service revenue generated from contracts for providing maintenance of equipment is amortized over the life of the agreement.  Revenue generated from storage contracts is deferred and recorded ratably over the life of the agreement, up to 21 years.  All other service revenue is recognized at the time the service is completed.

Revenues are net of normal discounts.  Shipping and handling fees billed to customers are included in net revenues, while the related costs are included in cost of revenues.

Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short duration.  At March 31, 2015, we had approximately $260 in cash equivalents classified as Level 1 assets, which are based on quoted market prices in active markets for identical assets.  As of March 31, 2014 and 2015, we did not have any Level 2 or 3 financial instruments.

Page 7

Segment Reporting

We have one reportable business segment:  the research, development, and commercialization of autologous cell-based therapeutics for use in regenerative medicine.

Net Loss per Share

Net loss per share is computed by dividing the net loss to common stockholders by the weighted average number of common shares outstanding.  The calculation of the basic and diluted earnings per share is the same for all periods presented, as the effect of the potential common stock equivalents is anti-dilutive due to our net loss position for all periods presented.  Anti-dilutive securities, which consist of stock options, common stock restricted awards and warrants, that were not included in diluted net loss per common share, were 7,985,194 and 4,741,159 as of March 31, 2015 and 2014, respectively.

Stock-Based Compensation

We estimate the fair value of stock options granted using the Black-Scholes-Merton option-pricing formula.  This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.

Acquired In-Process Research and Development

Acquired in-process research and development (“clinical protocols”) that the Company acquires through business combinations represents the fair value assigned to incomplete research projects which, at the time of acquisition, have not reached technological feasibility.  The amounts are capitalized and are accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the projects.  Upon successful completion of each project, we will make a determination as to the then useful life of the intangible asset, generally determined by the period in which the substantial majority of the cash flows are expected to be generated, and begin amortization.  The Company tests clinical protocols for impairment at least annually, or more frequently if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that the fair value of the clinical protocols intangible asset is less than its carrying amount.  If the Company concludes it is more likely than not that the fair value is less than the carrying amount, a quantitative test that compares the fair value of the clinical protocol intangible asset with its carrying value is performed.  If the fair value is less than the carrying amount, an impairment loss is recognized in operating results.

Patent Costs

The costs incurred in connection with patent applications and in defending and maintaining intellectual property rights are expensed as incurred.

Recently Adopted Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update, ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. This amendment requires entities to present an unrecognized tax benefit or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward or a similar tax loss or a tax credit carryforward, unless certain conditions exist. We adopted ASU 2013-11 effective July 1, 2014.  The adoption of ASU 2013-11 did not have a material impact on our results of operations or financial condition.

In March 2013, the FASB issued ASU 2013-05, “Foreign Currency Matters” (Topic 830) which provides guidance on a parent’s accounting for the cumulative translation adjustment upon de-recognition of a subsidiary or group of assets within a foreign entity.  This new guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided.  The new guidance was effective for us beginning July 1, 2014.  The adoption of ASU 2013-05 did not have a material impact on our results of operations or financial condition.

Page 8

Recently Issued Accounting Pronouncements

In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”.  ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures.  For all entities, the ASU is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016.  Early adoption is permitted.  We are currently assessing the potential impact, if any, the adoption of ASU 2014-15 may have on our condensed consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12 “Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”.  A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718,  Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. Early adoption is permitted. We are currently assessing the potential impact, if any, the adoption of ASU 2014-15 may have on our condensed consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” which provides comprehensive guidance for revenue recognition.  ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets.  The core principle of the guidance provides that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, using either a full retrospective or modified retrospective method of adoption.  We are currently evaluating the transition method we will adopt and the impact of the adoption of ASU 2014-09 on our condensed consolidated financial statements.

2. Acquisition of Totipotent RX

On February 18, 2014, the Company consummated the acquisition of TotipotentRX by merger pursuant to the Agreement and Plan of Merger and Reorganization (Merger Agreement).  TotipotentRX was a privately held biomedical technology company specializing in human clinical trials in the field of regenerative medicine and the exclusive provider of cell-based therapies to the Fortis Healthcare System.  TotipotentRX had two wholly-owned subsidiaries, TotipotentRX Cell Therapy Pvt. Ltd. (TotiRX India) and TotipotentSC Product Pvt. Ltd. (TotiSC India).  The two subsidiaries are located in Gurgaon, a suburb of New Delhi, India.  The Company believes that TotipotentRX has the depth of clinical, scientific and biological engineering experience necessary to fully engineer and effectively navigate the evolving regulatory pathways necessary to commercialize approved blockbuster cell therapies

The acquisition was accounted for under the acquisition method of accounting for business combinations in accordance with FASB ASC 805, “Business Combinations” (ASC 805), which requires, among other things that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date.  Acquisition-related costs are not included as a component of the acquisition accounting, but are recognized as expenses in the periods in which the costs are incurred.  Acquisition related costs of $484 and $1,725 for the three and nine months ended March 31, 2014 were included in general and administrative expenses.

Page 9

Allocation of Consideration Transferred to Net Assets Acquired

The following represents the consideration transferred to acquire TotipotentRX and our determination of the fair value of identifiable assets acquired and liabilities assumed at the acquisition date. Certain adjustments related to TotipotentRX’s opening balance sheet were finalized during the second quarter of fiscal 2015.  As a result, the carrying amount of equipment acquired in the acquisition was increased by $59, with a corresponding decrease to goodwill.

Purchase Price:
ThermoGenesis common shares and warrants			$	27,287
Fair value of assets acquired:
Cash	$	351
Receivables		171
Inventories		191
Clinical protocols		19,870
Other intangible assets		2,187
Equipment		384
Other assets		132
Total assets		23,286
Fair value of liabilities assumed:
Accounts payable		514
Related party notes payable		337
Deferred tax liability		8,048
Other liabilities		295
Total liabilities		9,194
Net assets acquired				14,092
Goodwill			$	13,195

Supplemental Pro Forma Data

The Company used the acquisition method of accounting to account for the Totipotent RX acquisition and, accordingly, the results of TotipotentRX are included in the Company’s consolidated financial statements for the period subsequent to the date of acquisition.  The following unaudited supplemental pro forma data for the quarter and nine months ended March 31, 2014 present consolidated information as if the acquisition had been completed on July 1, 2013.  The pro forma results were calculated by combining the results of ThermoGenesis Corp with the stand-alone results of Totipotent RX for the pre-acquisition periods:

	Three Months Ended March 31, 2014			Nine Months Ended March 31, 2014
Net revenues	$	4,099		$	12,738
Net loss	$	(1,702	)	$	(5,139	)
Basic and Diluted Net Loss per common share	$	(0.04	)	$	(0.16	)

The unaudited pro forma financial information reflects certain adjustments related to the acquisition, such as the incremental amortization expense in connection with recording acquired identifiable intangible assets at fair value, the incremental payroll expense associated with the new executive salaries resulting from the merger, and the elimination of the impact of historical transactions between ThermoGenesis and TotipotentRX that would have been treated as intercompany transactions had the companies been consolidated.  The unaudited pro forma financial information also excludes certain non-recurring expenses directly attributable to the merger in the amount of $531 and $1,933 for the three and nine months ended March 31, 2014, respectively.

Page 10

3. Intangible Assets

Intangible assets consist of the following based on our preliminary determination of the fair value of identifiable assets acquired (see footnote 2):

	March 31, 2015
	Weighted Average Amortization Period (in Years)		Gross Carrying Amount		Accumulated Amortization		Net
Trade names		7	$	31	$	5	$	26
Licenses		7		498		80		418
Customer relationships		3		458		172		286
Device registration		7		93		10		83
Covenants not to compete		5		955		216		739
Clinical protocols				19,870		--		19,870
Total		5.1	$	21,905	$	483	$	21,422

The change in the gross carrying amount is due to foreign currency exchange fluctuations and a $117 impairment of the device registration and licenses intangible assets due to discontinuing a cord-blood product.  Amortization of intangible assets was $114 and $343 for the three months and nine months ended March 31, 2015. Clinical protocols have not yet been introduced to the market place and are therefore not yet subject to amortization.  Our estimated future amortization expense for years ended June 30, is as follows:

Year Ended June 30,
April 1 – June 30, 2015	$	115
2016		452
2017		370
2018		275
2019		203
Thereafter		137
Total	$	1,552

4. Commitments and Contingencies

Contingencies

On April 11, 2013, we filed an answer and counter-claims in response to the complaint Harvest Technologies Corp. (Harvest) filed on October 24, 2012 against the Company in the case captioned as Harvest Technologies Corp. v. ThermoGenesis Corp., 12-cv-01354, U.S. District Court, District of Delaware (Wilmington), with the complaint being amended on February 15, 2013 to name the Company’s customer Celling Technologies, LLC as a defendant.  In the complaint, Harvest contends that our Res-Q 60 System infringes certain Harvest patents. Our counter-claims are based on anti-trust and other alleged improper conduct by Harvest and further seek declarations that the Res-Q 60 System does not infringe the patents and that the patents are invalid.  Management considers it probable that the case will settle and an immaterial settlement payment will be made and has made an appropriate accrual as of March 31, 2015.

Page 11

Warranty

We offer a warranty on all of our products of one to two years, except disposable products which we warrant through their expiration date.  We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary.

The warranty liability is included in other current liabilities in the unaudited balance sheet.  The change in the warranty liability for the nine months ended March 31, 2015 is summarized in the following table:

Balance at July 1, 2014	$	498
Warranties issued during the period		137
Settlements made during the period		(99	)
Changes in liability for pre-existing warranties during the period		102
Balance at March 31, 2015	$	638

Page 12

5. Stockholders’ Equity

Stock Based Compensation

We recorded stock-based compensation of $290 and $966 for the three and nine months ended March 31, 2015, and $178 and $462 for the three and nine months ended March 31, 2014.

Upon the separation with our Chief Executive Officer in October 2014, in accordance with his employment agreement, all outstanding options and restricted stock awards which would have otherwise vested by July 31, 2015, immediately vested.  As a result, the Company recognized $158 of stock compensation expense in general and administrative during the quarter ended December 31, 2014 as the vesting accelerated on 166,667 options and 70,000 restricted stock awards.

The following is a summary of option activity for our stock option plans:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at June 30, 2014		1,253,035		$	2.08
Granted		1,369,250		$	1.26
Forfeited		(70,000	)	$	2.50
Expired		(169,500	)	$	3.43
Outstanding at March 31, 2015		2,382,785		$	1.50		4.7		--
Vested and Expected to Vest at March 31, 2015		2,050,445		$	1.50		4.5		--
Exercisable at March 31, 2015		961,179		$	1.65		2.9		--

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock.  During the nine months ended March 31, 2014, the aggregate intrinsic value of options exercised under the Company’s stock option plans was $4.  There were no options exercised during the nine months ended March 31, 2015.

The fair value of the Company’s stock options granted for the nine months ended March 31, 2015 was estimated using the following weighted-average assumptions:

Expected life (years)	4
Risk-free interest rate	1.37	%
Expected volatility	76	%
Dividend yield	0	%

Page 13

Common Stock Restricted Awards

The following is a summary of restricted stock activity during the nine months ended March 31, 2015:

	Number of Shares			Weighted Average Grant Date Fair Value
Balance at June 30, 2014		803,799		$	1.90
Granted		12,000		$	0.88
Vested		(269,999	)	$	2.01
Forfeited		(10,791	)	$	1.39
Outstanding at March 31, 2015		535,009		$	1.83

In connection with the vesting of the restricted stock awards, the election was made by some of the employees to satisfy the applicable federal income tax withholding obligation by a net share settlement, pursuant to which the Company withheld 85,484 shares and used the deemed proceeds from those shares to pay the income tax withholding.  The net share settlement is deemed to be a repurchase by the Company of its common stock.

Warrants

A summary of warrant activity for the nine months ended March 31, 2015 follows:

	Number of Shares			Weighted-Average Exercise Price Per Share		Weighted-Average Contractual Life
Beginning balance		5,113,420		$	2.21		4.1
Warrants granted		--			--
Warrants canceled		(61,020	)	$	2.15
Warrants exercised		--			--
Outstanding at March 31, 2015		5,052,400		$	2.21		3.4
Exercisable at March 31, 2015		5.052,400		$	2.21		3.4

At March 31, 2015, the total intrinsic value of wrrants outstanding and exercisable was $0.

Page 14

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

Forward - Looking Statements

This report contains forward-looking statements.  The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained herein.  When used in this report, the words "anticipate," "believe," "estimate," "expect" and similar expressions as they relate to the Company or its management are intended to identify such forward-looking statements.  Our actual results, performance or achievements could differ materially from the results expressed in, or implied by these forward-looking statements.  We wish to caution readers of the important factors, among others, that in some cases have affected, and in the future could affect our actual results and could cause actual results for fiscal year 2015 and beyond, to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company.  These factors include without limitation, the ability to obtain capital and other financing in the amounts and at the times needed to complete clinical trials and product marketing for new products, market acceptance of new products, regulatory approval and time frames for such approval of new products and new claims for existing products, realization of forecasted income and expenses, initiatives by competitors, price pressures, failure to meet FDA regulations governing our products and operations and recalls associated with such regulations, the risks associated with initiating manufacturing for new products, failure to meet FCPA regulations, legal proceedings, and the risk factors listed from time to time in our SEC reports, including, in particular, the factors and discussion in the Cesca Therapeutics Inc. Form 10-K for fiscal year 2014.  Dollars and amounts set forth below are in thousands, except share and per share amounts.

Overview

Cesca Therapeutics is focused on the research, development, and commercialization of autologous cell-based therapeutics for use in regenerative medicine.  We are a leader in developing and manufacturing automated blood and bone marrow processing systems that enable the separation, processing and preservation of cell and tissue therapy products.  The Company was founded in 1986 and is headquartered in Rancho Cordova, California.  Our growth strategy is to expand our offerings in the development of regenerative medicine tools and partner with other pioneers in the stem cell arena to accelerate our clinical evaluations and our worldwide penetration in this market.

On February 18, 2014, TotipotentRX Corporation merged with and into ThermoGenesis Corp.  In connection with the merger, ThermoGenesis changed its name from ThermoGenesis Corp. to Cesca Therapeutics Inc.  The Company believes that TotipotentRX has the depth of clinical, scientific and biological engineering experience necessary to develop cell-based therapies in the vascular, orthopedic and oncological areas.  As a result of the merger, Cesca is a fully integrated regenerative medicine company with the ability and expertise to research, design, and develop cell therapies targeting unmet clinical needs in large patient populations using our cost effective, clinically proven, point-of-care delivery system, SurgWerks.  TotipotentRX was a privately held biomedical technology company specializing in human clinical trials in the field of regenerative medicine and the exclusive provider of cell-based therapies to the Fortis Healthcare System.  TotipotentRX had two wholly-owned subsidiaries, TotipotentRX Cell Therapy Pvt. Ltd. (TotiRX India) and TotipotentSC Product Pvt. Ltd. (TotiSC India).  The two subsidiaries are located in Gurgaon, a suburb of New Delhi, India.  The operations of TotipotentRX have been included in our consolidated results as of February 18, 2014.

Page 15

Stem Cell Therapies

We are currently focusing our clinical therapy efforts in three areas:

· Critical Limb Ischemia (CLI) - On December 19, 2014 the U.S. Food and Drug Administration (FDA) responded to the Company’s application for an Investigational Device Exemption (IDE) for a pivotal multicenter study called CLIRST III.  The FDA notified the company that certain deficiencies existed in the application, which would have to be corrected prior to further evaluation of the application.  The Company filed an amendment in May 2015 with the recommended changes and supporting data and received approval on June 12, 2015 to initiate the pivotal IDE in the U.S. The pivotal trial application was based on aCLI Phase 1b trial which enrolled 17 patients who were considered “no option” patients, and numerous other clinical and non-clinical studies.   CLI is the last phase of peripheral vascular disease, in which the leg is so deprived of blood flow and oxygen, that it can develop visible signs of gangrenous ulceration.  In each of these cases, the surgeon had determined that the patient required major amputation (below the knee) of the leg.  Alternatively, the patient was asked to participate in the study where their bone marrow stem cells were harvested and processed through a Cesca device, and injected into multiple sites along the afflicted limb.  After 12 months 82.4% of the patients had retained their leg and showed measurable improvement in blood flow and pain.

· Acute Myocardial Infarction (AMI) – This therapy is designed to treat patients who have suffered an acute ST-elevated myocardial infarction (STEMI), a particular and most threatening type of heart attack.  The SurgWerks-AMI treatment is designed to minimize remodeling of the heart from dysfunctional blood pumping action by minimizing the dysfunctional enlarging of the heart.  The entire 4-step bedside treatment takes less than 90 minutes to complete in a single procedure in the heart catheterization laboratory.

· Bone Marrow Transplant (BMT) – This multi-faceted program is characterized by two sub-programs, the CellWerks-BMT proprietary device system and the Fortis-TotipotentRX BMT service program.   The CellWerks-BMT device platform is designed to satisfy an unmet need in pediatric BMT therapy.  Our BMT service initiative, a scalable collaboration with Fortis Memorial Research Institute, is focused on the critical unmet need for populations lacking access to qualified donors.  Our program optimizes the process and makes this life saving technology accessible to hospitals and patients in large developing regions.

Our Products

· The SurgWerks Platform and VXP System, a proprietary stem cell therapy point-of-care kit and automated cell isolation system for treating vascular and orthopedic indications that integrate the following indication specific devices and biologic protocols:

- Cell harvesting

- Cell processing and selection

- Cell diagnostics

- Cell delivery

· The MarrowXpress^® or MXP System, a derivative product of the AXP and its accompanying disposable bag set,isolates and concentrates stem cells from bone marrow.  The product is an automated, closed, sterile system that volume-reduces blood from bone marrow to a user-defined volume in 30 minutes, while retaining over 90% of the MNCs, a clinically important cell fraction. Self-powered and microprocessor-controlled, the MXP System contains flow control optical sensors that achieve precise separation.  We have received the CE-Mark, enabling commercial sales in Europe, and we received authorization from the FDA to begin marketing the MXP as a Class I device in the U.S. for the preparation of cell concentrate from bone marrow.  However, the safety and effectiveness of this device for in vivo use has not been established.  MXP Platform is an integrated component of The SurgWerks Kit and performs the cell processing and selection.

Page 16

· The AXP System is a medical device with an accompanying disposable bag set that isolates and retrieves stem cells from umbilical cord blood.  The AXP System provides cord blood banks with an automated method to separate and capture adult stem cells which reduces the overall processing and labor costs with a reduced risk of contamination under cGMP conditions.  The AXP System retains over 97% of the mononuclear cells (MNCs).  High MNC recovery has significant clinical importance to patient transplant survival rates.  Self-powered and microprocessor-controlled, the AXP device contains flow control optical sensors that achieve precise separation of the cord blood fractions.

· The BioArchive System is a robotic cryogenic medical device used to cryopreserve and archive stem cells for future transplant and treatment.  Launched in fiscal 1998, our BioArchive Systems have been purchased by over 110 umbilical cord blood banks in over 35 countries to archive, cryopreserve and store stem cell preparations extracted from human placentas and umbilical cords for future use.

The following is management’s discussion and analysis of certain significant factors which have affected our financial condition and results of operations during the period included in the accompanying financial statements.

Critical Accounting Policies

Management’s discussion and analysis of its financial condition and results of operations is based upon the condensed financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.  The preparation of these condensed financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.  We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.  For a full discussion of our accounting estimates and assumptions that we have identified as critical in the preparation of our condensed financial statements, please refer to our 2014 Annual Report on Form 10-K.

Page 17

Results of Operations for the Three Months Ended March 31, 2015 as Compared to the Three Months Ended March 31, 2014

Net Revenues

Revenues for the three months ended March 31, 2015 were $4,042 consistent with our revenues for the three months ended March 31, 2014 of $4,038.  Revenues from AXP disposables increased over the prior year comparable period as shipments to one of our distributors in Asia has returned to normal levels.  This increase was offset by a decrease in revenues associated with our BioArchive devices as we shipped two in the current quarter versus five in the prior year comparable period.

The following represents the Company’s revenues by product platform for the three months ended:

	March 31,
	2015		2014
AXP	$	1,940	$	1,337
BioArchive		876		1,651
Bone Marrow		646		494
Manual Disposables		437		318
Other		143		238
	$	4,042	$	4,038

Gross Profit

The Company’s gross profit was $1,143 or 28% of net revenues for the three months ended March 31, 2015, compared to $1,536 or 38% for the corresponding fiscal 2014 period.  Gross profit declined primarily due to an increase in manufacturing overhead costs.

Sales and Marketing Expenses

Sales and Marketing expenses include costs primarily associated with generating revenues from the sale of cord blood and bone marrow disposables and BioArchive devices.

Sales and marketing expenses were $787 for the three months ended March 31, 2015, as compared to $687 for the fiscal 2014 period, an increase of $100 or 15%.  Sales and marketing expenses increased primarily due to additional marketing personnel added for the products and services associated with our stem cell therapies.

Research and Development Expenses

Research and development expenses include costs associated with our engineering, regulatory, scientific and clinical functions.

Research and development expenses were $1,712 for the three months ended March 31, 2015, compared to $768 for the comparable fiscal 2014 period, an increase of $944 or 123%.  The increase is primarily due to costs associated with developing our clinical therapies programs and in collection of incremental data to be submitted in an amended CLI pivotal IDE application (“CLIRST III”) to the US FDA.  Subsequent to the merger in fiscal 2014 and continuing through the first half of fiscal 2015 we increased the personnel in our clinical therapies function to support the continued development and improvement of our vascular cell therapies.

Page 18

General and Administrative Expenses

General and administrative expenses include costs associated with our accounting, finance, human resources, information system and executive functions.

General and administrative expenses were $3,480 for the three months ended March 31, 2015, compared to $1,940 for the comparable fiscal 2014 period, an increase of $1,540 or 79%.  The increase is primarily due to an increase in legal fees of $1,000 mainly associated with patent litigation and professional and legal fees of approximately $350 to analyze and begin remediation on our material weakness in governance practices.  These increases were offset by a decline in costs associated with the merger with Totipotent RX of $235.

Non-GAAP Measures

In addition to the results reported in accordance with US GAAP, we also use a non-GAAP measure, adjusted EBITDA, to evaluate operating performance and to facilitate the comparison of our historical results and trends.  This financial measure is not a measure of financial performance under US GAAP and should not be considered in isolation or as a substitute for loss as a measure of performance.  The calculation of this non-GAAP measure may not be comparable to similarly titled measures used by other companies.  Reconciliations to the most directly comparable GAAP measure are provided below.

	Three Months Ended March 31,
	2015			2014
Loss from operations	$	(4,836	)	$	(1,859	)
Add:
Depreciation and amortization		346			260
Stock-based compensation expense		290			177
Impairment of intangible asset		117			--
Adjusted EBITDA loss	$	(4,083	)	$	(1,422	)

Adjusted EBITDA

The adjusted EBITDA loss was $4,083 for the three months ended March 31, 2015 compared to $1,422 for the three months ended March 31, 2014.  The adjusted EBITDA loss increased compared to the third quarter in the prior year due to our investments to develop and advance our clinical program including the preparation of our CLIRST III IDE clinical trial application and amendment to the FDA and legal fees associated with patent litigation.

Page 19

Results of Operations for the Nine Months Ended March 31, 2015 as Compared to the Nine Months Ended March 31, 2014

Net Revenues

Revenues for the nine months ended March 31, 2015 were $12,340 compared to $12,150 for the nine months ended March 31, 2014, an increase of $190.  Revenues from AXP disposables increased over the prior year comparable period primarily due to an increase in direct shipments to one of our end-user customers who used to purchase from GE.  This increase was offset by a decrease in revenues on our BioArchive devices as we deferred revenue until the completion of the installation services.

The following represents the Company’s revenues by product platform for the nine months ended:

	March 31,
	2015		2014
AXP	$	4,974	$	4,667
BioArchive		3,470		3,845
Bone Marrow		1,982		1,814
Manual Disposables		1,299		1,338
Other		615		486
	$	12,340	$	12,150

Gross Profit

The Company’s gross profit was $3,870 or 31% of net revenues for the nine months ended March 31, 2015, compared to $4,716 or 39% for the corresponding fiscal 2014 period.  Gross profit declined as we had an increase in costs for manufacturing overhead and warranty costs associated with our BioArchive devices and AXP disposables.

Sales and Marketing Expenses

Sales and marketing expenses were $2,315 for the nine months ended March 31, 2015, compared to $2,115 for the comparable fiscal 2014 period, an increase of $200 or 9%.  Sales and marketing expenses increased primarily due to additional marketing personnel added for the products and services associated with our stem cell therapies.

Research and Development Expenses

Research and development expenses were $4,731 for the nine months ended March 31, 2015, compared to $2,398 for the comparable fiscal 2014 period, an increase of $2,333 or 97%.  The increase is primarily due to costs associated with developing our clinical therapies programs.  Subsequent to the merger in fiscal 2014 and continuing through the first half of fiscal 2015 we increased the personnel in our clinical therapies function to support the continued development and improvement of our vascular cell therapies and to prepare our IDE application and amendment to the FDA for our forthcoming pivotal trial for our Critical Limb Ischemia Stem Cell Therapy (“CLIRST III”).

General and Administrative Expenses

General and administrative expenses were $9,300 for the nine months ended March 31, 2015, compared to $5,964 for the comparable fiscal 2014 period, an increase of $3,336 or 56%.  The increase is primarily due to an increase in legal fees of $2,440 mainly associated with patent litigation and professional and legal fees of approximately $350 to analyze and begin remediation on our material weakness in governance practices.  These increases were offset by a decline in costs associated with the merger with Totipotent RX of $1,435.

Page 20

Non-GAAP Measures

In addition to the results reported in accordance with US GAAP, we also use a non-GAAP measure, adjusted EBITDA, to evaluate operating performance and to facilitate the comparison of our historical results and trends.  This financial measure is not a measure of financial performance under US GAAP and should not be considered in isolation or as a substitute for loss as a measure of performance.  The calculation of this non-GAAP measure may not be comparable to similarly titled measures used by other companies.  Reconciliations to the most directly comparable GAAP measure are provided below.

	Nine Months Ended March 31,
	2015			2014
Loss from operations	$	(12,476	)	$	(5,761	)
Add:
Depreciation and amortization		1,013			587
Stock-based compensation expense		966			462
Impairment of intangible asset		117			--
Adjusted EBITDA loss	$	(10,380	)	$	(4,712	)

Adjusted EBITDA

The adjusted EBITDA loss was $10,380 for the nine months ended March 31, 2015 compared to $4,712 for the nine months ended March 31, 2014.  The adjusted EBITDA loss increased compared to the third quarter in the prior year due to our investments to develop and advance our clinical program including the preparation of our IDE application and amendment to the FDA and legal fees associated with patent litigation.

Liquidity and Capital Resources

At March 31, 2015, we had cash and cash equivalents of $4,792 and working capital of $7,316.  This compares to cash and cash equivalents of $14,811 and working capital of $18,947 at June 30, 2014.  The Company has primarily financed operations through private and public placement of equity securities.

Net cash used in operating activities for the nine months ended March 31, 2015 was $9,315 compared to $6,096 for the nine months ended March 31, 2014.  The increase is primarily due to costs associated with transforming the company from a device oriented company to a fully integrated regenerative medicine company.  Significant investments were made in research and development to develop and advance our clinical programs.

Based on our cash balance, historical trends, expected outflows for our clinical trial programs and projections for revenues, we anticipate needing to raise capital to invest in the strategic business plan through equity, debt, strategic development partners, licenses or grants, depending on market conditions.  Should we require additional funding, such as additional capital investments, we may need to raise the required additional funds through bank borrowings or public or private sales of debt or equity securities.  We cannot assure that such funding will be available in needed quantities or on terms favorable to us, if at all.  If we are unable to generate sufficient revenues or to obtain additional funds for our working capital needs, we may need to scale-back operations or slow down our clinical trial programs.

Page 21

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities and Exchange Act of 1934 and are not required to provide information under this item.

Item 4. Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer along with our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined by Exchange Act Rule 13a-15(e) and 15d-15(e)) as of the end of our fiscal quarter pursuant to Exchange Act Rule 13a-15. The term disclosure controls and procedures means our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit 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 such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2015.

Subsequent to the completion of the audit of our financial statements for the year ended June 30, 2014, it was determined that a deficiency existed in our governance practices related to the timeliness and consistency of communications between the audit committee, management and the auditors.  This deficiency was concluded to represent a material weakness in our internal control over financial reporting.  We have developed and are implementing plans to remediate this material weakness, including the engagement of an independent outside counsel to further review our corporate governance procedures and to recommend appropriate changes.

During the quarter ended March 31, 2014, we completed the acquisition of TotipotentRX.  TotipotentRX was a private company and has not been subject to the Sarbanes-Oxley Act of 2002, the rules and regulations of the SEC, or other corporate governance requirements to which public reporting companies may be subject.  During the audit of TotipotentRX’s financial statements for the year ended December 31, 2012, TotipotentRX’s independent registered public accounting firm determined that a material weakness existed in its internal control over financial reporting as TotipotentRX did not have adequate personnel and information systems in place to prepare financial statements on a timely basis, including accrual accounting, non-routine data processes and estimation processes and procedures over financial accounting and reporting.   As part of our ongoing integration activities, we are continuing to incorporate the appropriate controls and procedures into the TotipotentRX subsidiaries and to augment our company-wide controls to reflect the risks inherent in an acquisition of this type.

There were no changes in our internal controls over financial reporting that occurred during the three months ended March 31, 2015  that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.  We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.

Page 22

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

In the normal course of operations, we may have disagreements or disputes with distributors, vendors or employees.  Such potential disputes are seen by management as a normal part of business.

Item 1A. Risk Factors

In addition to the risk factors discussed below and other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014, which could materially affect our business, financial condition or future results.  There have been no material changes from those risk factors, other than the risk factors listed below.  The risks described in our Annual Report on Form 10-K are not the only risks we face.  Additional risks and uncertainties not currently known or knowable to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

If the Price of our Common Stock Does Not Meet the Requirements of the NASDAQ Capital Market Stock Exchange, Our Shares may be Delisted.  Our Ability to Publicly or Privately Sell Equity Securities and the Liquidity of Our Common Stock Could be Adversely Affected if We Are Delisted.  The listing standards of NASDAQ provide, among other things, that a company may be delisted if the bid price of its stock drops below $1.00 for a period of 30 consecutive business days.  The bid price of our stock has been below $1.00 for a period of greater than 30 consecutive business days.  As such, on March 30, 2015, we received a notice from the NASDAQ Listing Qualifications Department informing us that we must regain compliance with listing requirements or face delisting. In order to regain compliance, at any time before September 28, 2015, the bid price of our common stock must close at a price of at least $1.00 per share for a minimum of 10 consecutive business days.  The notice states that NASDAQ will provide us with written notification when our common stock has regained compliance.

If compliance cannot be demonstrated by September 28, 2015, then NASDAQ will decide whether we meet all applicable standards for initial listing on the Capital Market (except the bid price requirement) based on our most recent public filings and market information.  The notice states that, if we meet these standards, then we are eligible to have an additional 180 calendar day compliance period.  NASDAQ can deny the extension if it does not appear to them that it is possible for us to cure the deficiency.  Delisting from NASDAQ could adversely affect our ability to raise additional financing through the public or private sale of equity securities, would significantly affect the ability of investors to trade our securities and would negatively affect the value and liquidity of our common stock.  Delisting could also have other negative results, including the potential loss of confidence by employees, the loss of institutional investor interest and fewer business development opportunities.

Page 23

A Material Weakness in our Internal Control Over Financial Reporting has been Identified and our Business and Stock Price may be Adversely Affected if We do not Adequately Address this Weakness or if We have other Material Weaknesses or Significant Deficiencies in our Internal Control Over Financial Reporting.  Subsequent to the completion of the audit of our financial statements for the year ended June 30, 2014, it was determined that a deficiency exists in our governance practices related to the timeliness and consistency of communications between the audit committee, management and the auditors.  This deficiency was concluded to represent a material weakness in our internal control over financial reporting.  This issue was discussed by the audit committee and we have developed and are implementing plans to remediate this material weakness, including the engagement of an independent outside counsel to further review its corporate governance procedures and to recommend appropriate changes.  Further, in May 2015, we changed auditors.  This material weakness in our internal control, or any other material weakness or significant deficiencies in our internal control over financial reporting, could adversely affect our stock price and value.

We Intend to Raise Additional Capital to Fund our Operations and in Furtherance of Our Business Plan.  We intend to raise additional capital in the near future to find our operations and in furtherance of our business plan.  The proposed financing may include shares of common stock, shares of preferred stock, warrants to purchase shares of common stock or preferred stock, debt securities, units consisting of the forgoing securities, equity investments from strategic development parnters or some combination of each.  Any additional equity financings may be financially dilutive to, and will be dilutive from an ownership perspective to our stockholders, such dilution may be significant based upon the size of such financing.

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

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosure

Not applicable.

Item 5. Other Information

None

Page 24

Item 6. Exhibits.

31.1 Certification by the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification by the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

101.INS XBRL Instance Document‡

101.SCH XBRL Taxonomy Extension Schema Document‡

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document‡

101.LAB XBRL Taxonomy Extension Label Linkbase Document‡

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document‡

Footnotes to Exhibit Index

‡ XBRL information is furnished and not filed for purpose of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and is not subject to liability under those sections, is not part of any registration statement or prospectus to which it relates and is not incorporated or deemed to be incorporated by reference into any registration statement, prospectus or other document.

Page 25

Cesca Therapeutics Inc.

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.

	Cesca Therapeutics Inc. (Registrant)
Dated: June 23, 2015	/s/ Robin C. Stracey
	Robin C. Stracey Chief Executive Officer (Principal Executive Officer)
Dated: June 23, 2015	/s/ Michael R. Bruch
	Michael R. Bruch Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Page 26

EX-31.1

Exhibit 31.1

PRINCIPAL EXECUTIVE OFFICER’S CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robin C. Stracey, certify that:

1. I have reviewed this report on Form 10-Q of Cesca Therapeutics Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: June 23, 2015	/s/ Robin C. Stracey
	Robin C. Stracey Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

PRINCIPAL FINANCIAL OFFICER’S CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael R. Bruch, certify that:

1. I have reviewed this report on Form 10-Q of Cesca Therapeutics Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: June 23, 2015	/s/ Michael R. Bruch
	Michael R. Bruch Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Cesca Therapeutics Inc. (the "Company") on Form 10-Q for the period ended March 31, 2015, as filed with the Securities and Exchange Commission (the "Report"), we, Robin C. Stracey, Chief Executive Officer and Michael R. Bruch, Chief Financial Officer, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge:

(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: June 23, 2015	/s/ Robin C. Stracey
	Robin C. Stracey Chief Executive Officer (Principal Executive Officer)
Dated: June 23, 2015	/s/ Michael R. Bruch
	Michael R. Bruch Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

XML

Commitments and Contingencies

9 Months Ended

Mar. 31, 2015

Commitments and Contingencies [Abstract]

Commitments and Contingencies

4. Commitments and Contingencies

Contingencies

On April 11, 2013, we filed an answer and counter-claims in response to the complaint Harvest Technologies Corp. (Harvest) filed on October 24, 2012 against the Company in the case captioned as Harvest Technologies Corp. v. ThermoGenesis Corp., 12-cv-01354, U.S. District Court, District of Delaware (Wilmington), with the complaint being amended on February 15, 2013 to name the Company’s customer Celling Technologies, LLC as a defendant.  In the complaint, Harvest contends that our Res-Q 60 System infringes certain Harvest patents. Our counter-claims are based on anti-trust and other alleged improper conduct by Harvest and further seek declarations that the Res-Q 60 System does not infringe the patents and that the patents are invalid.  Management considers it probable that the case will settle and an immaterial settlement payment will be made and has made an appropriate accrual as of March 31, 2015.

Warranty

We offer a warranty on all of our products of one to two years, except disposable products which we warrant through their expiration date.  We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary.

The warranty liability is included in other current liabilities in the unaudited balance sheet.  The change in the warranty liability for the nine months ended March 31, 2015 is summarized in the following table:

XML

Intangible Assets

9 Months Ended

Mar. 31, 2015

Intangible Assets [Abstract]

Intangible Assets

3. Intangible Assets

Intangible assets consist of the following based on our preliminary determination of the fair value of identifiable assets acquired (see footnote 2):

	March 31, 2015
	Weighted Average Amortization Period (in Years)		Gross Carrying Amount		Accumulated Amortization		Net
Trade names		7	$	31	$	5	$	26
Licenses		7		498		80		418
Customer relationships		3		458		172		286
Device registration		7		93		10		83
Covenants not to compete		5		955		216		739
Clinical protocols				19,870		--		19,870
Total		5.1	$	21,905	$	483	$	21,422

The change in the gross carrying amount is due to foreign currency exchange fluctuations and a $117 impairment of the device registration and licenses intangible assets due to discontinuing a cord-blood product.  Amortization of intangible assets was $114 and $343 for the three months and nine months ended March 31, 2015. Clinical protocols have not yet been introduced to the market place and are therefore not yet subject to amortization.  Our estimated future amortization expense for years ended June 30, is as follows:

Year Ended June 30,
April 1 – June 30, 2015	$	115
2016		452
2017		370
2018		275
2019		203
Thereafter		137
Total	$	1,552

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2015	Jun. 30, 2014
Current assets:
Cash and cash equivalents	$ 4,792	$ 14,811
Accounts receivable, net of allowance for doubtful accounts of $111 ($47 at June 30, 2014)	5,717	4,693
Inventories	5,007	5,606
Prepaid expenses and other current assets	200	217
Total current assets	15,716	25,327
Equipment, less accumulated depreciation of $4,716 ($4,099 at June 30, 2014)	2,957	2,298
Goodwill	13,195	13,254
Intangible assets, net	21,422	21,928
Other assets	79	81
Total assets	53,369	62,888
Current liabilities:
Accounts payable	4,686	3,590
Accrued payroll and related expenses	982	599
Deferred revenue	610	638
Other current liabilities	2,122	1,553
Total current liabilities	8,400	6,380
Noncurrent deferred tax liability	7,641	7,641
Other noncurrent liabilities	287	169
Total liabilities	$ 16,328	$ 14,190
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; 2,000,000 shares authorized; none outstanding	$ 0	$ 0
Common stock, $0.001 par value; 80,000,000 shares authorized; 40,417,518 issued and outstanding (40,200,529 at June 30, 2014)	40	40
Paid in capital in excess of par	172,291	171,422
Accumulated deficit	(135,300)	(122,822)
Accumulated other comprehensive income	10	58
Total stockholders' equity	37,041	48,698
Total liabilities and stockholders equity	$ 53,369	$ 62,888

XML

Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Mar. 31, 2015

Basis of Presentation and Summary of Significant Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

1. Basis of Presentation and Summary of Significant Accounting Policies

Organization and Basis of Presentation

Cesca Therapeutics Inc. (the Company, we or our) is focused on the research, development, and commercialization of autologous cell-based therapeutics for use in regenerative medicine.  We are a leader in developing and manufacturing automated blood and bone marrow processing systems that enable the separation, processing and preservation of cell and tissue therapy products.

Liquidity

At March 31, 2015, we had cash and cash equivalents of $4,792 and working capital of $7,316.  This compares to cash and cash equivalents of $14,811 and working capital of $18,947 at June 30, 2014.  The Company has primarily financed operations through private and public placement of equity securities.

Net cash used in operating activities for the nine months ended March 31, 2015 was $9,315 compared to $6,096 for the nine months ended March 31, 2014.  The increase is primarily due to costs associated with transforming the company from a device oriented company to a fully integrated regenerative medicine company.  Significant investments were made in research and development to develop and advance our clinical programs.

Based on our cash balance, historical trends, expected outflows for our clinical trial programs and projections for revenues, we expect to raise capital for investing in the strategic business plan through equity, strategic development partners or grants, debt, depending on market conditions.  Should we require additional funding, such as additional capital investments, we may need to raise the required additional funds through bank borrowings or public or private sales of debt or equity securities.  We cannot assure that such funding will be available in needed quantities or on terms favorable to us, if at all.  If we are unable to generate sufficient revenues or to obtain additional funds for our working capital needs, we may need to scale-back operations or slow down our clinical trial programs.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Cesca Therapeutics Inc., and our wholly-owned subsidiaries, TotipotentRX Cell Therapy, Pvt. Ltd. and TotipotentSC Scientific Product Pvt. Ltd.  All significant intercompany accounts and transactions have been eliminated upon consolidation.

Interim Reporting

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such Securities and Exchange Commission (SEC) rules and regulations and accounting principles applicable for interim periods.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Events subsequent to the balance sheet date have been evaluated for inclusion in the accompanying condensed financial statements through the date of issuance.  Operating results for the nine month period ended March 31, 2015, are not necessarily indicative of the results that may be expected for the year ending June 30, 2015.  These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2014.

Revenue Recognition

Revenues from the sale of our products and services are recognized when persuasive evidence of an arrangement exists, delivery has occurred (or services have been rendered), the price is fixed or determinable, and collectability is reasonably assured.  We generally ship products F.O.B. shipping point.  There is no conditional evaluation on any product sold and recognized as revenue.  Amounts billed in excess of revenue recognized are recorded as deferred revenue on the balance sheet.

Our sales are generally through distributors.  There is no right of return provided for distributors.  For sales of products made to distributors, we consider a number of factors in determining whether revenue is recognized upon transfer of title to the distributor, or when payment is received.  These factors include, but are not limited to, whether the payment terms offered to the distributor are considered to be non-standard, the distributor history of adhering to the terms of its contractual arrangements with us, the level of inventories maintained by the distributor, whether we have a pattern of granting concessions for the benefit of the distributor, and whether there are other conditions that may indicate that the sale to the distributor is not substantive.  We currently recognize revenue primarily on the sell-in method with our distributors.

Revenue arrangements with multiple deliverables are divided into units of accounting if certain criteria are met, including whether the deliverable item(s) has (have) value to the customer on a stand-alone basis.  Revenue for each unit of accounting is recognized as the unit of accounting is delivered.  Arrangement consideration is allocated to each unit of accounting based upon the relative estimated selling prices of the separate units of accounting contained within an arrangement containing multiple deliverables.  Estimated selling prices are determined using vendor specific objective evidence of value (VSOE), when available, or an estimate of selling price when VSOE is not available for a given unit of accounting.  Significant inputs for the estimates of the selling price of separate units of accounting include market and pricing trends and a customer’s geographic location.  We account for training and installation, and service agreements and the collection, processing and testing of the umbilical cord blood and the storage as separate units of accounting.

Service revenue generated from contracts for providing maintenance of equipment is amortized over the life of the agreement.  Revenue generated from storage contracts is deferred and recorded ratably over the life of the agreement, up to 21 years.  All other service revenue is recognized at the time the service is completed.

Revenues are net of normal discounts.  Shipping and handling fees billed to customers are included in net revenues, while the related costs are included in cost of revenues.

Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short duration.  At March 31, 2015, we had approximately $260 in cash equivalents classified as Level 1 assets, which are based on quoted market prices in active markets for identical assets.  As of March 31, 2014 and 2015, we did not have any Level 2 or 3 financial instruments.

Segment Reporting

We have one reportable business segment:  the research, development, and commercialization of autologous cell-based therapeutics for use in regenerative medicine.

Net Loss per Share

Net loss per share is computed by dividing the net loss to common stockholders by the weighted average number of common shares outstanding.  The calculation of the basic and diluted earnings per share is the same for all periods presented, as the effect of the potential common stock equivalents is anti-dilutive due to our net loss position for all periods presented.  Anti-dilutive securities, which consist of stock options, common stock restricted awards and warrants, that were not included in diluted net loss per common share, were 7,985,194 and 4,741,159 as of March 31, 2015 and 2014, respectively.

Stock-Based Compensation

We estimate the fair value of stock options granted using the Black-Scholes-Merton option-pricing formula.  This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.

Acquired In-Process Research and Development

Acquired in-process research and development (“clinical protocols”) that the Company acquires through business combinations represents the fair value assigned to incomplete research projects which, at the time of acquisition, have not reached technological feasibility.  The amounts are capitalized and are accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the projects.  Upon successful completion of each project, we will make a determination as to the then useful life of the intangible asset, generally determined by the period in which the substantial majority of the cash flows are expected to be generated, and begin amortization.  The Company tests clinical protocols for impairment at least annually, or more frequently if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that the fair value of the clinical protocols intangible asset is less than its carrying amount.  If the Company concludes it is more likely than not that the fair value is less than the carrying amount, a quantitative test that compares the fair value of the clinical protocol intangible asset with its carrying value is performed.  If the fair value is less than the carrying amount, an impairment loss is recognized in operating results.

Patent Costs

The costs incurred in connection with patent applications and in defending and maintaining intellectual property rights are expensed as incurred.

Recently Adopted Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update, ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. This amendment requires entities to present an unrecognized tax benefit or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward or a similar tax loss or a tax credit carryforward, unless certain conditions exist. We adopted ASU 2013-11 effective July 1, 2014.  The adoption of ASU 2013-11 did not have a material impact on our results of operations or financial condition.

In March 2013, the FASB issued ASU 2013-05, “Foreign Currency Matters” (Topic 830) which provides guidance on a parent’s accounting for the cumulative translation adjustment upon de-recognition of a subsidiary or group of assets within a foreign entity.  This new guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided.  The new guidance was effective for us beginning July 1, 2014.  The adoption of ASU 2013-05 did not have a material impact on our results of operations or financial condition.

Recently Issued Accounting Pronouncements

In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”.  ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures.  For all entities, the ASU is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016.  Early adoption is permitted.  We are currently assessing the potential impact, if any, the adoption of ASU 2014-15 may have on our condensed consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12 “Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”.  A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718,  Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. Early adoption is permitted. We are currently assessing the potential impact, if any, the adoption of ASU 2014-15 may have on our condensed consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” which provides comprehensive guidance for revenue recognition.  ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets.  The core principle of the guidance provides that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, using either a full retrospective or modified retrospective method of adoption.  We are currently evaluating the transition method we will adopt and the impact of the adoption of ASU 2014-09 on our condensed consolidated financial statements.

XML

Acquisition of Totipotent RX

9 Months Ended

Mar. 31, 2015

Acquisition of Totipotent RX [Abstract]

Acquisition of Totipotent RX

2. Acquisition of Totipotent RX

On February 18, 2014, the Company consummated the acquisition of TotipotentRX by merger pursuant to the Agreement and Plan of Merger and Reorganization (Merger Agreement).  TotipotentRX was a privately held biomedical technology company specializing in human clinical trials in the field of regenerative medicine and the exclusive provider of cell-based therapies to the Fortis Healthcare System.  TotipotentRX had two wholly-owned subsidiaries, TotipotentRX Cell Therapy Pvt. Ltd. (TotiRX India) and TotipotentSC Product Pvt. Ltd. (TotiSC India).  The two subsidiaries are located in Gurgaon, a suburb of New Delhi, India.  The Company believes that TotipotentRX has the depth of clinical, scientific and biological engineering experience necessary to fully engineer and effectively navigate the evolving regulatory pathways necessary to commercialize approved blockbuster cell therapies

The acquisition was accounted for under the acquisition method of accounting for business combinations in accordance with FASB ASC 805, “Business Combinations”(ASC 805), which requires, among other things that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date.  Acquisition-related costs are not included as a component of the acquisition accounting, but are recognized as expenses in the periods in which the costs are incurred.  Acquisition related costs of $484 and $1,725 for the three and nine months ended March 31, 2014 were included in general and administrative expenses.

Allocation of Consideration Transferred to Net Assets Acquired

The following represents the consideration transferred to acquire TotipotentRX and our determination of the fair value of identifiable assets acquired and liabilities assumed at the acquisition date. Certain adjustments related to TotipotentRX’s opening balance sheet were finalized during the second quarter of fiscal 2015.  As a result, the carrying amount of equipment acquired in the acquisition was increased by $59, with a corresponding decrease to goodwill.

Purchase Price:
ThermoGenesis common shares and warrants			$	27,287
Fair value of assets acquired:
Cash	$	351
Receivables		171
Inventories		191
Clinical protocols		19,870
Other intangible assets		2,187
Equipment		384
Other assets		132
Total assets		23,286
Fair value of liabilities assumed:
Accounts payable		514
Related party notes payable		337
Deferred tax liability		8,048
Other liabilities		295
Total liabilities		9,194
Net assets acquired				14,092
Goodwill			$	13,195

Supplemental Pro Forma Data

The Company used the acquisition method of accounting to account for the Totipotent RX acquisition and, accordingly, the results of TotipotentRX are included in the Company’s consolidated financial statements for the period subsequent to the date of acquisition.  The following unaudited supplemental pro forma data for the quarter and nine months ended March 31, 2014 present consolidated information as if the acquisition had been completed on July 1, 2013.  The pro forma results were calculated by combining the results of ThermoGenesis Corp with the stand-alone results of Totipotent RX for the pre-acquisition periods:

	Three Months Ended March 31, 2014			Nine Months Ended March 31, 2014
Net revenues	$	4,099		$	12,738
Net loss	$	(1,702	)	$	(5,139	)
Basic and Diluted Net Loss per common share	$	(0.04	)	$	(0.16	)

The unaudited pro forma financial information reflects certain adjustments related to the acquisition, such as the incremental amortization expense in connection with recording acquired identifiable intangible assets at fair value, the incremental payroll expense associated with the new executive salaries resulting from the merger, and the elimination of the impact of historical transactions between ThermoGenesis and TotipotentRX that would have been treated as intercompany transactions had the companies been consolidated.  The unaudited pro forma financial information also excludes certain non-recurring expenses directly attributable to the merger in the amount of $531 and $1,933 for the three and nine months ended March 31, 2014, respectively.

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2015	Jun. 30, 2014
Current assets:
Accounts receivable, allowance for doubtful accounts	$ 111	$ 47
Equipment, accumulated depreciation	$ 4,716	$ 4,099
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	2,000,000	2,000,000
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	80,000,000	80,000,000
Common stock, shares issued (in shares)	40,417,518	40,200,529
Common stock, shares outstanding (in shares)	40,417,518	40,200,529

XML

Acquisition of Totipotent RX (Details) $ / shares in Units, $ in Thousands		3 Months Ended	9 Months Ended
	Feb. 18, 2014 USD ($) Subsidiary	Mar. 31, 2014 USD ($) $ / shares	Mar. 31, 2014 USD ($) $ / shares	Mar. 31, 2015 USD ($)	Jun. 30, 2014 USD ($)
Fair value of liabilities assumed [Abstract]
Goodwill				$ 13,195	$ 13,254
TotipotentRX Corporation [Member]
Business Acquisition [Line Items]
Number of wholly owned subsidiaries | Subsidiary	2
Acquisition related costs		$ 484	$ 1,725
Business acquisition carrying amount of equipment acquired	$ 59
Purchase Price [Abstract]
ThermoGenesis common shares and warrants	27,287
Fair value of assets acquired [Abstract]
Cash	351
Receivables	171
Inventories	191
Clinical protocols	19,870
Other intangible assets	2,187
Equipment	384
Other assets	132
Total assets	23,286
Fair value of liabilities assumed [Abstract]
Accounts payable	514
Related party notes payable	337
Deferred tax liability	8,048
Other liabilities	295
Total liabilities	9,194
Net assets acquired	14,092
Goodwill	$ 13,195
Supplemental Pro Forma Data [Abstract]
Net revenues		4,099	12,738
Net loss		$ (1,702)	$ (5,139)
Basic and diluted net loss per common share (in dollars per share) | $ / shares		$ (0.04)	$ (0.16)
TotipotentRX Corporation [Member] | Nonrecurring Merger-related Costs [Member]
Supplemental Pro Forma Data [Abstract]
Nonrecurring expenses directly attributable to merger		$ 531	$ 1,933

XML

Document and Entity Information - shares	9 Months Ended
	Mar. 31, 2015	Jun. 16, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	CESCA THERAPEUTICS INC.
Entity Central Index Key	0000811212
Current Fiscal Year End Date	--06-30
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		40,453,431
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015

XML

Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2015	Mar. 31, 2015	Mar. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)		5 years 1 month 6 days
Gross Carrying Amount	$ 21,905	$ 21,905
Accumulated Amortization	483	483
Net	21,422	21,422
Impairment of intangible asset		117	$ 0
Amortization expense	114	343
Estimated future amortization expense [Abstract]
April 1 - June 30, 2015	115	115
2016	452	452
2017	370	370
2018	275	275
2019	203	203
Thereafter	137	137
Total	1,552	$ 1,552
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)		7 years
Gross Carrying Amount	31	$ 31
Accumulated Amortization	5	5
Net	26	$ 26
Licenses [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)		7 years
Gross Carrying Amount	498	$ 498
Accumulated Amortization	80	80
Net	418	$ 418
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)		3 years
Gross Carrying Amount	458	$ 458
Accumulated Amortization	172	172
Net	286	$ 286
Device Registration [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)		7 years
Gross Carrying Amount	93	$ 93
Accumulated Amortization	10	10
Net	83	$ 83
Covenants not to Compete [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)		5 years
Gross Carrying Amount	955	$ 955
Accumulated Amortization	216	216
Net	739	739
Clinical Protocols [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	19,870	19,870
Accumulated Amortization	0	0
Net	$ 19,870	$ 19,870

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) [Abstract]
Net revenues	$ 4,042	$ 4,038	$ 12,340	$ 12,150
Cost of revenues	2,899	2,502	8,470	7,434
Gross profit	1,143	1,536	3,870	4,716
Expenses:
Sales and marketing	787	687	2,315	2,115
Research and development	1,712	768	4,731	2,398
General and administrative	3,480	1,940	9,300	5,964
Total operating expenses	5,979	3,395	16,346	10,477
Loss from operations	(4,836)	(1,859)	(12,476)	(5,761)
Other income (expense), net	25	0	(2)	0
Net loss	(4,811)	(1,859)	(12,478)	(5,761)
Other comprehensive income:
Foreign currency translation adjustments	21	50	(48)	50
Comprehensive loss	$ (4,790)	$ (1,809)	$ (12,526)	$ (5,711)
Per share data:
Basic and diluted net loss per common share (in dollars per share)	$ (0.12)	$ (0.07)	$ (0.31)	$ (0.28)
Weighted average common shares outstanding - Basic and diluted (in shares)	40,371,064	28,430,676	40,316,468	20,592,099

XML

Acquisition of Totipotent RX (Tables)

9 Months Ended

Mar. 31, 2015

Acquisition of Totipotent RX [Abstract]

Schedule of purchase price allocation

The following represents the consideration transferred to acquire TotipotentRX and our determination of the fair value of identifiable assets acquired and liabilities assumed at the acquisition date. Certain adjustments related to TotipotentRX’s opening balance sheet were finalized during the second quarter of fiscal 2015.  As a result, the carrying amount of equipment acquired in the acquisition was increased by $59, with a corresponding decrease to goodwill.

Purchase Price:
ThermoGenesis common shares and warrants			$	27,287
Fair value of assets acquired:
Cash	$	351
Receivables		171
Inventories		191
Clinical protocols		19,870
Other intangible assets		2,187
Equipment		384
Other assets		132
Total assets		23,286
Fair value of liabilities assumed:
Accounts payable		514
Related party notes payable		337
Deferred tax liability		8,048
Other liabilities		295
Total liabilities		9,194
Net assets acquired				14,092
Goodwill			$	13,195

Supplemental pro forma data

The following unaudited supplemental pro forma data for the quarter and nine months ended March 31, 2014 present consolidated information as if the acquisition had been completed on July 1, 2013.  The pro forma results were calculated by combining the results of ThermoGenesis Corp with the stand-alone results of Totipotent RX for the pre-acquisition periods:

	Three Months Ended March 31, 2014			Nine Months Ended March 31, 2014
Net revenues	$	4,099		$	12,738
Net loss	$	(1,702	)	$	(5,139	)
Basic and Diluted Net Loss per common share	$	(0.04	)	$	(0.16	)

XML

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Mar. 31, 2015

Basis of Presentation and Summary of Significant Accounting Policies [Abstract]

Organization and Basis of Presentation

Organization and Basis of Presentation

Cesca Therapeutics Inc. (the Company, we or our) is focused on the research, development, and commercialization of autologous cell-based therapeutics for use in regenerative medicine.  We are a leader in developing and manufacturing automated blood and bone marrow processing systems that enable the separation, processing and preservation of cell and tissue therapy products.

Liquidity

Liquidity

At March 31, 2015, we had cash and cash equivalents of $4,792 and working capital of $7,316.  This compares to cash and cash equivalents of $14,811 and working capital of $18,947 at June 30, 2014.  The Company has primarily financed operations through private and public placement of equity securities.

Net cash used in operating activities for the nine months ended March 31, 2015 was $9,315 compared to $6,096 for the nine months ended March 31, 2014.  The increase is primarily due to costs associated with transforming the company from a device oriented company to a fully integrated regenerative medicine company.  Significant investments were made in research and development to develop and advance our clinical programs.

Based on our cash balance, historical trends, expected outflows for our clinical trial programs and projections for revenues, we expect to raise capital for investing in the strategic business plan through equity, strategic development partners or grants, debt, depending on market conditions.  Should we require additional funding, such as additional capital investments, we may need to raise the required additional funds through bank borrowings or public or private sales of debt or equity securities.  We cannot assure that such funding will be available in needed quantities or on terms favorable to us, if at all.  If we are unable to generate sufficient revenues or to obtain additional funds for our working capital needs, we may need to scale-back operations or slow down our clinical trial programs.

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Cesca Therapeutics Inc., and our wholly-owned subsidiaries, TotipotentRX Cell Therapy, Pvt. Ltd. and TotipotentSC Scientific Product Pvt. Ltd.  All significant intercompany accounts and transactions have been eliminated upon consolidation.

Interim Reporting

Interim Reporting

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such Securities and Exchange Commission (SEC) rules and regulations and accounting principles applicable for interim periods.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Events subsequent to the balance sheet date have been evaluated for inclusion in the accompanying condensed financial statements through the date of issuance.  Operating results for the nine month period ended March 31, 2015, are not necessarily indicative of the results that may be expected for the year ending June 30, 2015.  These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2014.

Revenue Recognition

Revenue Recognition

Revenues from the sale of our products and services are recognized when persuasive evidence of an arrangement exists, delivery has occurred (or services have been rendered), the price is fixed or determinable, and collectability is reasonably assured.  We generally ship products F.O.B. shipping point.  There is no conditional evaluation on any product sold and recognized as revenue.  Amounts billed in excess of revenue recognized are recorded as deferred revenue on the balance sheet.

Our sales are generally through distributors.  There is no right of return provided for distributors.  For sales of products made to distributors, we consider a number of factors in determining whether revenue is recognized upon transfer of title to the distributor, or when payment is received.  These factors include, but are not limited to, whether the payment terms offered to the distributor are considered to be non-standard, the distributor history of adhering to the terms of its contractual arrangements with us, the level of inventories maintained by the distributor, whether we have a pattern of granting concessions for the benefit of the distributor, and whether there are other conditions that may indicate that the sale to the distributor is not substantive.  We currently recognize revenue primarily on the sell-in method with our distributors.

Revenue arrangements with multiple deliverables are divided into units of accounting if certain criteria are met, including whether the deliverable item(s) has (have) value to the customer on a stand-alone basis.  Revenue for each unit of accounting is recognized as the unit of accounting is delivered.  Arrangement consideration is allocated to each unit of accounting based upon the relative estimated selling prices of the separate units of accounting contained within an arrangement containing multiple deliverables.  Estimated selling prices are determined using vendor specific objective evidence of value (VSOE), when available, or an estimate of selling price when VSOE is not available for a given unit of accounting.  Significant inputs for the estimates of the selling price of separate units of accounting include market and pricing trends and a customer’s geographic location.  We account for training and installation, and service agreements and the collection, processing and testing of the umbilical cord blood and the storage as separate units of accounting.

Service revenue generated from contracts for providing maintenance of equipment is amortized over the life of the agreement.  Revenue generated from storage contracts is deferred and recorded ratably over the life of the agreement, up to 21 years.  All other service revenue is recognized at the time the service is completed.

Revenues are net of normal discounts.  Shipping and handling fees billed to customers are included in net revenues, while the related costs are included in cost of revenues.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short duration.  At March 31, 2015, we had approximately $260 in cash equivalents classified as Level 1 assets, which are based on quoted market prices in active markets for identical assets.  As of March 31, 2014 and 2015, we did not have any Level 2 or 3 financial instruments.

Segment Reporting

Segment Reporting

We have one reportable business segment:  the research, development, and commercialization of autologous cell-based therapeutics for use in regenerative medicine.

Net Loss per Share

Net Loss per Share

Net loss per share is computed by dividing the net loss to common stockholders by the weighted average number of common shares outstanding.  The calculation of the basic and diluted earnings per share is the same for all periods presented, as the effect of the potential common stock equivalents is anti-dilutive due to our net loss position for all periods presented.  Anti-dilutive securities, which consist of stock options, common stock restricted awards and warrants, that were not included in diluted net loss per common share, were 7,985,194 and 4,741,159 as of March 31, 2015 and 2014, respectively.

Stock-Based Compensation

Stock-Based Compensation

We estimate the fair value of stock options granted using the Black-Scholes-Merton option-pricing formula.  This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.

Acquired In-Process Research and Development

Acquired In-Process Research and Development

Acquired in-process research and development (“clinical protocols”) that the Company acquires through business combinations represents the fair value assigned to incomplete research projects which, at the time of acquisition, have not reached technological feasibility.  The amounts are capitalized and are accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the projects.  Upon successful completion of each project, we will make a determination as to the then useful life of the intangible asset, generally determined by the period in which the substantial majority of the cash flows are expected to be generated, and begin amortization.  The Company tests clinical protocols for impairment at least annually, or more frequently if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that the fair value of the clinical protocols intangible asset is less than its carrying amount.  If the Company concludes it is more likely than not that the fair value is less than the carrying amount, a quantitative test that compares the fair value of the clinical protocol intangible asset with its carrying value is performed.  If the fair value is less than the carrying amount, an impairment loss is recognized in operating results.

Patent Costs

Patent Costs

The costs incurred in connection with patent applications and in defending and maintaining intellectual property rights are expensed as incurred.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update, ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. This amendment requires entities to present an unrecognized tax benefit or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward or a similar tax loss or a tax credit carryforward, unless certain conditions exist. We adopted ASU 2013-11 effective July 1, 2014.  The adoption of ASU 2013-11 did not have a material impact on our results of operations or financial condition.

In March 2013, the FASB issued ASU 2013-05, “Foreign Currency Matters” (Topic 830) which provides guidance on a parent’s accounting for the cumulative translation adjustment upon de-recognition of a subsidiary or group of assets within a foreign entity.  This new guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided.  The new guidance was effective for us beginning July 1, 2014.  The adoption of ASU 2013-05 did not have a material impact on our results of operations or financial condition.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”.  ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures.  For all entities, the ASU is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016.  Early adoption is permitted.  We are currently assessing the potential impact, if any, the adoption of ASU 2014-15 may have on our condensed consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12 “Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”.  A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718,  Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. Early adoption is permitted. We are currently assessing the potential impact, if any, the adoption of ASU 2014-15 may have on our condensed consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” which provides comprehensive guidance for revenue recognition.  ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets.  The core principle of the guidance provides that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, using either a full retrospective or modified retrospective method of adoption.  We are currently evaluating the transition method we will adopt and the impact of the adoption of ASU 2014-09 on our condensed consolidated financial statements.

XML

Commitments and Contingencies (Details) - 9 months ended Mar. 31, 2015 - USD ($) $ in Thousands	Total
Warranty [Abstract]
Period of warranty on products, minimum	1 year
Period of warranty on products, maximum	2 years
Schedule of changes in product liability included in accrued liabilities [Roll Forward]
Balance at July 1, 2014	$ 498
Warranties issued during the period	137
Settlements made during the period	(99)
Changes in liability for pre-existing warranties during the period	102
Balance at March 31, 2015	$ 638

XML

Stockholders' Equity (Tables)

9 Months Ended

Mar. 31, 2015

Stockholders' Equity [Abstract]

Option activity for stock option plans

The following is a summary of option activity for our stock option plans:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at June 30, 2014		1,253,035		$	2.08
Granted		1,369,250		$	1.26
Forfeited		(70,000	)	$	2.50
Expired		(169,500	)	$	3.43
Outstanding at March 31, 2015		2,382,785		$	1.50		4.7		--
Vested and Expected to Vest at March 31, 2015		2,050,445		$	1.50		4.5		--
Exercisable at March 31, 2015		961,179		$	1.65		2.9		--

Fair value weighted average assumptions

The fair value of the Company’s stock options granted for the nine months ended March 31, 2015 was estimated using the following weighted-average assumptions:

Expected life (years)	4
Risk-free interest rate	1.37	%
Expected volatility	76	%
Dividend yield	0	%

Restricted stock activity granted to employees

The following is a summary of restricted stock activity during the nine months ended March 31, 2015:

	Number of Shares			Weighted Average Grant Date Fair Value
Balance at June 30, 2014		803,799		$	1.90
Granted		12,000		$	0.88
Vested		(269,999	)	$	2.01
Forfeited		(10,791	)	$	1.39
Outstanding at March 31, 2015		535,009		$	1.83

Warrant activity

A summary of warrant activity for the nine months ended March 31, 2015 follows:

	Number of Shares			Weighted-Average Exercise Price Per Share		Weighted-Average Contractual Life
Beginning balance		5,113,420		$	2.21		4.1
Warrants granted		--			--
Warrants canceled		(61,020	)	$	2.15
Warrants exercised		--			--
Outstanding at March 31, 2015		5,052,400		$	2.21		3.4
Exercisable at March 31, 2015		5.052,400		$	2.21		3.4

XML

Intangible Assets (Tables)

9 Months Ended

Mar. 31, 2015

Intangible Assets [Abstract]

Schedule of intangible assets

Intangible assets consist of the following based on our preliminary determination of the fair value of identifiable assets acquired (see footnote 2):

	March 31, 2015
	Weighted Average Amortization Period (in Years)		Gross Carrying Amount		Accumulated Amortization		Net
Trade names		7	$	31	$	5	$	26
Licenses		7		498		80		418
Customer relationships		3		458		172		286
Device registration		7		93		10		83
Covenants not to compete		5		955		216		739
Clinical protocols				19,870		--		19,870
Total		5.1	$	21,905	$	483	$	21,422

Schedule of future amortization expense

Our estimated future amortization expense for years ended June 30, is as follows:

Year Ended June 30,
April 1 – June 30, 2015	$	115
2016		452
2017		370
2018		275
2019		203
Thereafter		137
Total	$	1,552

XML

Commitments and Contingencies (Tables)

9 Months Ended

Mar. 31, 2015

Commitments and Contingencies [Abstract]

Schedule of changes in warrant liability included in accrued liabilities

The following is a summary of option activity for our stock option plans:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at June 30, 2014		1,253,035		$	2.08
Granted		1,369,250		$	1.26
Forfeited		(70,000	)	$	2.50
Expired		(169,500	)	$	3.43
Outstanding at March 31, 2015		2,382,785		$	1.50		4.7		--
Vested and Expected to Vest at March 31, 2015		2,050,445		$	1.50		4.5		--
Exercisable at March 31, 2015		961,179		$	1.65		2.9		--

XML

Basis of Presentation and Summary of Significant Accounting Policies (Details) $ in Thousands	9 Months Ended		12 Months Ended
	Mar. 31, 2015 USD ($) Segment shares	Mar. 31, 2014 USD ($) shares	Jun. 30, 2014 USD ($)	Jun. 30, 2013 USD ($)
Liquidity [Abstract]
Cash and cash equivalents	$ 4,792	$ 6,575	$ 14,811	$ 6,884
Working Capital	7,316		$ 18,947
Net cash used in operating activities	$ (9,315)	$ (6,096)
Revenue Recognition [Abstract]
Maximum period of agreement	21 years
Segment Reporting [Abstract]
Number of reportable segments | Segment	1
Net Loss per Share [Abstract]
Anti-dilutive securities not included in diluted net loss per common share (in shares) | shares	7,985,194	4,741,159
Level 1 [Member]
Level 1 Assets Measured at Fair Value [Abstract]
Cash equivalents, fair value	$ 260

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities:
Net loss	$ (12,478)	$ (5,761)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,013	587
Stock based compensation expense	966	462
Impairment of intangible asset	117	0
Net change in operating assets and liabilities:
Accounts receivable, net	(1,027)	(724)
Inventories	66	(430)
Prepaid expenses and other current assets	17	84
Other assets	1	3
Accounts payable	1,110	(397)
Accrued payroll and related expenses	383	174
Deferred revenue	6	129
Other liabilities	511	(223)
Net cash used in operating activities	(9,315)	(6,096)
Cash flows from investing activities:
Capital expenditures	(544)	(326)
Cash acquired in acquisition	0	351
Net cash provided by (used in) investing activities	(544)	25
Cash flows from financing activities:
Payments on capital lease obligations	(39)	0
Repayment of related party notes payable	0	(150)
Exercise of options	0	21
Issuance of common stock	0	5,944
Repurchase of common stock	(97)	(68)
Net cash provided by (used in) financing activities	(136)	5,747
Effects of foreign currency rate changes on cash and cash equivalents	(24)	15
Net decrease in cash and cash equivalents	(10,019)	(309)
Cash and cash equivalents at beginning of period	14,811	6,884
Cash and cash equivalents at end of period	4,792	6,575
Supplemental non-cash financing and investing information:
Transfer of inventories to equipment	482	65
Stock issued for repayment of related party note payable	0	187
Equipment acquired by capital lease	$ 208	$ 0

XML

Stockholders' Equity

9 Months Ended

Mar. 31, 2015

Stockholders' Equity [Abstract]

Stockholders' Equity

5. Stockholders’ Equity

Stock Based Compensation

We recorded stock-based compensation of $290 and $966 for the three and nine months ended March 31, 2015, and $178 and $462 for the three and nine months ended March 31, 2014.

Upon the separation with our Chief Executive Officer in October 2014, in accordance with his employment agreement, all outstanding options and restricted stock awards which would have otherwise vested by July 31, 2015, immediately vested.  As a result, the Company recognized $158 of stock compensation expense in general and administrative during the quarter ended December 31, 2014 as the vesting accelerated on 166,667 options and 70,000 restricted stock awards.

The following is a summary of option activity for our stock option plans:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at June 30, 2014		1,253,035		$	2.08
Granted		1,369,250		$	1.26
Forfeited		(70,000	)	$	2.50
Expired		(169,500	)	$	3.43
Outstanding at March 31, 2015		2,382,785		$	1.50		4.7		--
Vested and Expected to Vest at March 31, 2015		2,050,445		$	1.50		4.5		--
Exercisable at March 31, 2015		961,179		$	1.65		2.9		--

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock.  During the nine months ended March 31, 2014, the aggregate intrinsic value of options exercised under the Company’s stock option plans was $4.  There were no options exercised during the nine months ended March 31, 2015.

The fair value of the Company’s stock options granted for the nine months ended March 31, 2015 was estimated using the following weighted-average assumptions:

Expected life (years)	4
Risk-free interest rate	1.37	%
Expected volatility	76	%
Dividend yield	0	%

Common Stock Restricted Awards

The following is a summary of restricted stock activity during the nine months ended March 31, 2015:

	Number of Shares			Weighted Average Grant Date Fair Value
Balance at June 30, 2014		803,799		$	1.90
Granted		12,000		$	0.88
Vested		(269,999	)	$	2.01
Forfeited		(10,791	)	$	1.39
Outstanding at March 31, 2015		535,009		$	1.83

In connection with the vesting of the restricted stock awards, the election was made by some of the employees to satisfy the applicable federal income tax withholding obligation by a net share settlement, pursuant to which the Company withheld 85,484 shares and used the deemed proceeds from those shares to pay the income tax withholding.  The net share settlement is deemed to be a repurchase by the Company of its common stock.

Warrants

A summary of warrant activity for the nine months ended March 31, 2015 follows:

	Number of Shares			Weighted-Average Exercise Price Per Share		Weighted-Average Contractual Life
Beginning balance		5,113,420		$	2.21		4.1
Warrants granted		--			--
Warrants canceled		(61,020	)	$	2.15
Warrants exercised		--			--
Outstanding at March 31, 2015		5,052,400		$	2.21		3.4
Exercisable at March 31, 2015		5.052,400		$	2.21		3.4

At March 31, 2015, the total intrinsic value of wrrants outstanding and exercisable was $0.

XML

Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			9 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Stock Compensation Expense [Abstract]
Stock based compensation expense	$ 290		$ 178	$ 966	$ 462
Weighted-Average Grant Date Fair Value [Roll Forward]
Number of shares withheld to pay income tax withholding (in shares)				85,484
Weighted-Average Remaining Contractual Life [Abstract]
Total intrinsic value of warrants outstanding and exercisable	$ 0			$ 0
General and Administrative [Member]
Stock Compensation Expense [Abstract]
Stock based compensation expense		$ 158
Stock Options [Member]
Stock Compensation Expense [Abstract]
Stock compensation expense, vesting accelerated (in shares)		166,667
Number of Shares [Roll Forward]
Outstanding at June 30, 2014 (in shares)				1,253,035
Granted (in shares)				1,369,250
Forfeited (in shares)				(70,000)
Expired (in shares)				(169,500)
Outstanding at March 31, 2015 (in shares)	2,382,785			2,382,785
Vested and Expected to Vest at March 31, 2015 (in shares)	2,050,445			2,050,445
Exercisable at March 31, 2015 (in shares)	961,179			961,179
Weighted-Average Exercise Price Per Share [Roll Forward]
Outstanding at June 30, 2014 (in dollars per share)				$ 2.08
Granted (in dollars per share)				1.26
Forfeited (in dollars per share)				2.50
Expired (in dollars per share)				3.43
Outstanding at March 31, 2015 (in dollars per share)	$ 1.50			1.50
Vested and Expected to Vest at March 31, 2015 (in dollars per share)	1.50			1.50
Exercisable at March 31, 2015 (in dollars per share)	$ 1.65			$ 1.65
Weighted-Average Remaining Contractual Life [Abstract]
Outstanding at March 31, 2015				4 years 8 months 12 days
Vested and Expected to Vest at March 31, 2015				4 years 6 months
Exercisable at March 31, 2015				2 years 10 months 24 days
Aggregate Intrinsic Value [Abstract]
Outstanding at March 31, 2015	$ 0			$ 0
Vested and Expected to Vest at March 31, 2015	0			0
Exercisable at March 31, 2015	$ 0			$ 0
Aggregate intrinsic value of options exercised (in dollars per share)					$ 4
Number of option exercised ( in shares)				0
Fair Value Assumptions [Abstract]
Expected life (years)				4 years
Risk-free interest rate (in hundredths)				1.37%
Expected volatility (in hundredths)				76.00%
Dividend yield (in hundredths)				0.00%
Restricted Stock [Member]
Stock Compensation Expense [Abstract]
Stock compensation expense, vesting accelerated (in shares)		70,000
Number of Shares [Roll Forward]
Balance at June 30, 2014 (in shares)				803,799
Granted (in shares)				12,000
Vested (in shares)				(269,999)
Forfeited (in shares)				(10,791)
Outstanding at March 31, 2015 (in shares)	535,009			535,009
Weighted-Average Grant Date Fair Value [Roll Forward]
Balance at June 30, 2014 (in dollars per share)				$ 1.90
Granted (in dollars per share)				0.88
Vested (in dollars per share)				2.01
Forfeited (in dollars per share)				1.39
Outstanding at March 31, 2015 (in dollars per share)	$ 1.83			$ 1.83
Warrants [Member]
Number of Shares [Roll Forward]
Beginning balance (in shares)				5,113,420
Warrants granted (in shares)				0
Warrants canceled (in shares)				(61,020)
Warrants exercised (in shares)				0
Outstanding at March 31, 2015 (in shares)	5,052,400			5,052,400
Exercisable at March 31, 2015 (in shares)	5,052,400			5,052,400
Weighted-Average Exercise Price Per Share [Roll Forward]
Beginning balance (in dollars per share)				$ 2.21
Warrants granted (in dollars per share)				0
Warrants canceled (in dollars per share)				2.15
Warrants exercised (in dollars per share)				0
Outstanding at March 31, 2015 (in dollars per share)	$ 2.21			2.21
Exercisable at March 31, 2015 (in dollars per share)	$ 2.21			$ 2.21
Weighted-Average Remaining Contractual Life [Abstract]
Weighted average remaining contractual life, warrants outstanding				3 years 4 months 24 days	4 years 1 month 6 days
Warrants exercisable at December 31				3 years 4 months 24 days