10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended: June 30, 2017

Commission File Number: 000-16375

Cesca Therapeutics Inc. (Exact name of registrant as specified in its charter)
Delaware (State of incorporation)	94-3018487 (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)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $0.001 par value	Nasdaq Stock Market, LLC

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.      [  ]     Yes          [X]     No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.      [  ]     Yes          [X]     No

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.           [X]     Yes          [  ]     No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)     [X]     Yes     [  ]     No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K, is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this Form 10-K. [ ]

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

Large accelerated filer [  ]         Accelerated filer [  ]	Smaller reporting company [X ]
Non-accelerated filer [  ]       (Do not check if a smaller reporting company)	Emerging growth company [  ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

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

     [  ]     Yes          [X]      No

The aggregate market value of the common stock held by non-affiliates as of December 30, 2016 (the last business day of the most recently completed second quarter) was $10,334,000 based on the closing sale price on such day.

As of September 15, 2017, 9,946,193 shares of the registrant’s Common Stock were outstanding.

Documents Incorporated By Reference: The registrant intends to file an amendment to this Annual Report on Form 10-K within 120 days after the end of the fiscal year ended June 30, 2017, which will include the information required by Part III of Form 10-K.

TABLE OF CONTENTS

Part I

		Page Number
ITEM 1.	Business	4
ITEM 1A.	Risk Factors	14
ITEM 1B.	Unresolved Staff Comments	26
ITEM 2.	Properties	26
ITEM 3.	Legal Proceedings	26
ITEM 4.	Mine Safety Disclosures	27
Part II
ITEM 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	27
ITEM 6.	Selected Financial Data	27
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
ITEM 7A.	Quantitative and Qualitative Disclosures about Market Risk	36
ITEM 8.	Financial Statements and Supplementary Data	36
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	70
ITEM 9A.	Controls and Procedures	70
ITEM 9B.	Other Information	70
Part III
ITEM 10.	Directors, Executive Officers and Corporate Governance	71
ITEM 11.	Executive Compensation	71
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	71
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	71
ITEM 14.	Principal Accounting Fees and Services	71
Part IV
ITEM 15.	Exhibits and Financial Statement Schedules	72
ITEM 16.	Form 10-K Summary	72

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PART I

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included in this report, are forward-looking statements. Reference is made in particular to the description of our plans and objectives for future operations, assumptions underlying such plans and objectives, and other forward-looking statements included in this report. Such statements may be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,” “plan,” “predict,” “seek,” “should,” “would,” “could,” “potential,” “ongoing,” or similar terms, variations of such terms, or the negative of such terms, and include, but are not limited to, statements regarding projected results of operations, capital expenditures, earnings, management’s future strategic plans, development of new technologies and services, litigation, regulatory matters, market acceptance and performance of our services, the success and effectiveness of our technologies and services, our ability to retain and hire key personnel, the competitive nature of and anticipated growth in our markets, market position of our services, marketing efforts and partnerships, liquidity and capital resources, our accounting estimates, and our assumptions and judgments. Such statements are based on management’s current expectations, estimates and projections about our industry, management’s beliefs, and certain assumptions made by us, all of which are subject to change.

These forward looking statements are not guarantees of future results and are subject to a number of risks, uncertainties and assumptions that are difficult to predict and that could cause actual results to differ materially and adversely from those described in the forward-looking statements, including:

● the sufficiency and source of capital required to fund our operations and in furtherance of our business plan;

● our ability to remain listed on NASDAQ and remain in compliance with its listing standards;

● the global perception of the clinical utility of banked cord blood and the amount of investment in research and development supporting clinical data for additional applications;

● delays in commencing or completing clinical testing of products;

● the success of any collaborative arrangements to commercialize our products;

● our reliance on significant distributors or end users;

● the availability and sufficiency of commercial scale manufacturing facilities and reliance on third party contract manufacturers; and

● our ability to protect our patents and trademarks in the U.S. and other countries.

These forward-looking statements speak only as of the date of this report and we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based, except as otherwise required by law. Additional factors that could cause such results to differ materially from those described in the forward-looking statements are set forth in connection with the forward-looking statements.

TRADEMARKS

This report contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this report, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

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ITEM 1.     BUSINESS

Cesca Therapeutics Inc. (“Cesca Therapeutics,” “Cesca,” the “Company,” “we,” “our,” “us”), a Delaware corporation, is a regenerative medicine company that was founded in 1986 and is headquartered in Rancho Cordova, CA. We develop, commercialize and market a range of automated technologies and products for cell-based therapeutics. ThermoGenesis Corp. (“ThermoGenesis”), our device division, provides the AutoXpress^® platform for automated clinical biobanking, PXP™ platform for point-of-care cell-based therapies and CAR-TXpress™ platform under development for bio-manufacturing for immuno-oncology applications. Cesca is also leveraging its proprietary PXP™ technology platform to develop autologous cell-based therapies that address significant unmet needs in the vascular and orthopedic markets. Our strategy is to continue to enhance the performance and competitiveness of our flagship product lines in the cord blood banking arena while expanding into significant new growth opportunity areas in point-of-care therapies in hospitals and cellular processing for immune-oncology product development and manufacturing.

Cesca is an affiliate of the Boyalife Group, a China-based industry research alliance encompassing top research institutions for stem cell and regenerative medicine.

Cesca’s Device Division- ThermoGenesis Corp.

ThermoGenesis owns and operates the Company’s device division, a pioneer and market leader in the development and commercialization of automated technologies for cell-based therapeutics and bio-processing. ThermoGenesis’ automated solution offerings include:

AutoXpress™ (AXP^™) for Clinical BioBanking – a proprietary, automated system for the isolation, collection and storage of hematopoietic stem cell concentrates derived from cord blood and peripheral blood.

Point-of-CareXpress (PXP^™) for Point-of-Care Applications – a proprietary, automated system for the rapid, automated processing of autologous peripheral or bone marrow derived stem cells for cell-based therapies at point-of-care situations, such as surgical centers or clinics.

CAR-TXpress™ (CXP^™), for Immuno-Oncology Applications – a proprietary automated system under development that allows for the automated manufacturing, expansion and storage of cellular therapies for immuno-oncology, including various T-cell and natural killer (NK) cell-based therapies. CAR-TXpress^™ works in bulk volumes of cells, dramatically reducing both processing time and the cost of the required capital equipment.

Cesca’s Clinical Development Division

Cesca is developing autologous (utilizing the patient’s own cells) stem cell-based therapies that address significant unmet medical needs for applications within the vascular, cardiology and orthopedic markets.

Vascular Diseases - Critical Limb Ischemia (“CLI”) – Cesca has a proprietary point-of-care, autologous stem cell-based therapy under development which is intended for the treatment of patients with CLI. The Company’s 362 patient, multi-center pivotal Phase III Critical Limb Ischemia Rapid Stem Cell Treatment (“CLIRST”) trial is designed to evaluate the safety and efficacy of autologous stem cell-based therapy to stimulate the regeneration of blood vessels, promote wound healing and prevent amputation. Previous clinical studies using Cesca’s proprietary, point-of-care-technologies have demonstrated the regeneration of blood vessels and improved blood circulation in the limbs, using a patient’s own bone marrow derived stem cells.

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Cardiology - Acute Myocardial Infarction – Cesca has a proprietary, point-of-care autologous stem cell-based therapy under development which is intended as an adjunct treatment for patients who have suffered an acute ST-elevated myocardial infarction (“STEMI”), the most serious type of heart attack.  Such treatments are aimed at minimizing the adverse remodeling of the heart post-STEMI.

Orthopedics – OsteoArthritis (OA) - Cesca is in early stage development of an autologous stem cell based therapy intended to treat patients with cartilage tissue degeneration that may lead to progressive cartilage loss and painful joint diseases. Localized articular cartilage defects can potentially be repaired by transplantation of autologous cell therapy. Therapies in development using Cesca’s proprietary PXP™ system are expected to delay further deterioration and repair the damaged joint cartilage. Treatment is typically via a single procedure in the hospital or clinic.

Our Strategy

Our business strategy involves:

● Sustaining our leadership position in automated devices for the separation and concentration of stem cell preparation from cord blood and bone marrow.

● Leveraging our expertise in clinical biobanking and cell-based therapeutics to introduce new automated manufacturing solutions to developers of CAR-T and other immuno-therapies.

● Becoming the partner-of-choice for immune-oncology developers looking to achieve increased output while adhering to Cellular Manufacture Control (CMC) best practices

● Delivering a fully integrated offering: We intend to deliver all the hardware, software and disposable components necessary for the aspiration and processing of autologous bone marrow to prepare a therapeutic dose of stem cells for re-injection into the patient at the point-of-care.

● Partnering our clinical development with market leaders in selected medical areas to maximize internal values of our existing pipelines. Our protocols are based on the use of autologous (donor and recipient are the same individual), bone marrow derived stem cells which are potentially safer than alternative allogeneic approaches.

● Following a simpler regulatory path: Cesca’s protocols are autologous and the stem cell preparations are minimally manipulated, allowing an investigational device exemption pre-market approval approach. This reduces costs and time to market when compared to investigational new drug or new drug application approaches.

● Expanding patent protection: In the US, we have 17 patents issued and a series of applications pending. In addition, we have a series of corresponding international patents issued and pending.

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Recent Key Events and Accomplishments

● Acquired the assets of SynGen Inc. (“SynGen”). On July 7, 2017, our subsidiary, ThermoGenesis, acquired the business and substantially all of the assets of SynGen, a privately held Sacramento, California-based technology company that develops, markets, and sells advanced cell separation tools and accessories. In the transaction (the “SynGen Transaction”), ThermoGenesis acquired substantially all of SynGen’s operating assets, including its proprietary cell processing platform. In exchange, ThermoGenesis issued to SynGen shares of ThermoGenesis common stock that, after giving effect to the issuance, constitute 20% of ThermoGenesis’ outstanding common shares, and ThermoGenesis also made a one-time cash payment of $1.0 million to SynGen. Immediately prior to the SynGen Transaction, the Company contributed the assets, business, and current liabilities of its blood and bone-marrow processing device business to ThermoGenesis and will operate such business (together with the acquired business) through the ThermoGenesis subsidiary.

● Established $5 Million Line of Credit. On March 6, 2017, we entered into a credit agreement with Boyalife Investment Fund II, Inc. (the “Lender”). The Lender is a wholly owned subsidiary of Boyalife Group Inc., which is owned and controlled by the Company’s Chief Executive Officer and Chairman of the Board of Directors. The Credit Agreement grants to the Company the right to borrow up to $5 million on an unsecured basis (the “Loan”) at any time prior to March 6, 2022.

● Increased Line of Credit by $5 Million. On September 13, 2017, we entered into an amendment to the Credit Agreement with the Lender, Boyalife Investment Fund II, Inc. increasing our maximum borrowing availability thereunder from $5.0 million to $10.0 million.

● Converted Debt to Equity. On August 22, 2016, all outstanding principal and interest payable under the debentures, which included the conversion of $12,500,000 of principal and $8,250,000 of interest up to and including the maturity date of the debentures was converted to equity. Upon conversion, 6,102,941 shares of common stock were issued and the debentures and all related security interest and liens were terminated.

● Raised $2 Million in Equity Financing. On August 3, 2016, we sold 600,000 shares of common stock at a price of $4.10 per share. The net proceeds from the sale and issuance of the shares, after deducting the offering expenses borne by the Company of $369,000, were $2,092,000. 

The Markets We Serve

Immuno-Oncology

Immuno-Oncology is an innovative area of research that seeks to help the body’s own immune system to fight cancer. With the significant unmet medical need in the long-term survival of patients with advanced cancer, pharmaceutical developers are competing to bring cost-efficient immune-therapies rapidly to market. Cesca is leveraging its expertise in clinical biobanking and cell-based therapeutics to introduce CAR-TXpress^™, an automated manufacturing solution that can address a material challenge to developers of CAR-T and other immuno-therapies.

CAR-TXpress^™ can also be customized to address each customer’s unique needs. In addition to CAR-T cell processing, Cesca is also developing manufacturing solutions for contract manufacturing and co-development that may help accelerate the manufacture and the clinical development of novel therapies.

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Regenerative Medicine

Regenerative cell therapy relies on the delivery of specific types of stem cells that have been shown to enable the repair, restoration or regeneration of diseased or damaged tissue.  A broad range of cell types has been investigated, including cells found in peripheral blood, umbilical cord blood and bone marrow.

The regenerative medicine field continues to contribute to meaningful advances in the practice of medicine, as evidenced by numerous FDA and European Union (“EU”) therapeutic product approvals and the commercialization of a growing number of cell-based therapies. Most of the progress has been achieved through the broader application of adult stem cells, reflecting a greater awareness and appreciation of their therapeutic potential.

The market for regenerative medicine is supported by companies that develop devices or methods for harvesting, processing, purifying, expanding, modifying, cryopreserving, storing or administering cells, or by companies that develop and commercialize the therapeutic agents themselves. Key success factors for such companies include:

● The ability to achieve high recovery and concentration of target cell types

● Device ease-of use, efficiency and speed

● Cell product purity, viability and potency

● Cost effectiveness

● Regulatory approval / FDA clearance

The delivery of a cell therapy typically involves a process whereby target cells are harvested from a donor or patient, processed or expanded (grown) either within a hospital laboratory or by an FDA regulated, therapeutic manufacturer, formulated into an effective, safe dose, and delivered to a patient through a specific delivery device. Cell preparations may also be formulated in a point of care setting such as an operating room. Requirements for the preparation and use of cell therapies at the point of care include system portability, sterile field packaging, minimal manipulation, swift cell processing and predictable target cell recovery rates.

Our growth strategy includes the development of autologous cell therapies for treatments intended to be carried out at the point of care. We believe that commercial opportunities for such therapies will emerge in cardiology, orthopedics, dermatology/wound healing and selective areas of oncology, followed by more complex pathologies such as those found in diabetes and central nervous system disorders.

We also believe that developments in the field of regenerative medicine will be critical in helping to address the global increase in health care costs. As emerging cell therapies are proven to be safe, effective, and a cost-effective alternative to current standards of care, we believe adoption will accelerate. A fundamental requirement, however, will be the continued development of baseline clinical and cost-effectiveness data through comprehensive clinical studies.

Bio-Banking

Cord blood, the blood that remains in the umbilical cord after a baby is born, is rich in stem cells. Since the first cord blood transplant was carried out in 1988, stem cells derived from umbilical cord blood have become widely accepted for medical use and have been used regularly in medical procedures worldwide for the treatment of a wide range of blood diseases, genetic and metabolic disorders, immune-deficiencies and cancers. Cord blood use in clinical applications is now widely accepted and cord blood banks exist in nearly every developed country as well as a growing number of developing nations.

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Cesca’s ThermoGenesis division is an established leader in the development and manufacture of automated systems that enable the separation, processing and cryopreservation of stem cell preparations from cord blood. In recent years, however, the overall number of cord blood samples being collected has decreased.

Our Products

We design, manufacture and sell advanced devices created specifically for the separation, concentration and cryopreservation of cell types used in the practice of regenerative medicine. Such automated devices are essential to the successful development of cell therapies because they ensure a high degree of quality control over both the preparation and storage of stem cell concentrate. Our current and future product offerings include:

● The AutoXpress^™ System (AXP^™) – a proprietary automated device and companion sterile disposable for concentrating hematopoietic stem cells from cord blood.

● The Point-of-CareXpress^™ System (PXP^™) – a proprietary automated device and companion sterile disposable for the isolation and concentration of hematopoietic stem cells from bone marrow.

● The CAR-TXpress^™ System (CXP^™) – a full suite of multi-component automated system that allows for the automated manufacturing, expansion and storage of cellular therapies for immuno-oncology, including various T-cell and natural killer (NK) cell-based therapies.

● The BioArchive^® System - an automated cryogenic device approved for single-cassette based cryo-storage of biological license applications (BLA) products, including the storage of cord blood units for stem cell applications and CAR-T cellular products for immune-oncology.

● Manual bag sets for use in the processing and cryogenic storage of cord blood.

Cell Manufacturing and Banking Services

Through our TotipotentRX subsidiary in Gurgaon, India, we operate an advanced clinical cell manufacturing, processing, testing, and storage facility, compliant with current Good Manufacturing Practices (“GMP”), Good Tissue Practices (“GTP”), and Good Laboratory Practices (“GLP”). We can support the production of a small, personalized medicine cell prescription. Patient samples and therapeutic aliquots are all labeled in accordance with ISBT 128 and stored in our own cryogenics facility. In addition, our clinical research organization (CRO), also located in Gurgaon, is, to our knowledge, the only specialized, in-hospital, cell therapy CRO in the world. We have unique expertise in the design and management of cell based clinical trials, including the ability to support the device prototyping and validation typically required for a combination product. These services ensure patient safety under Good Clinical Practices (“GCP”), quality laboratory documentation under GLP, and quality cell processing and handling under both GMP and GTP.  In partnership with Fortis Healthcare and through our advanced clinical infrastructure we also operate commercial service programs supporting bone marrow transplantation (hematopoietic stem cell transplantation) for hematological and oncological disorders as well as a licensed umbilical cord blood and tissue bank (“NovaCord”).

Our Clinical Programs

Our therapeutic development initiatives, focused in the fields of cardiovascular diseases and orthopedic cartilage regeneration, are based on our proprietary PXP™ platform for the point-of-care harvesting, processing, and delivery of cells from the patient’s own peripheral blood or bone marrow. A key advantage of our point-of-care system is that it is capable of delivering high cell viability and potency through a short intra-operative procedure, including bone marrow collection, target cell selection, characterization of the final cell concentrate, and re-injection into the patient. Based on our point-of-care platform, our critical limb ischemia clinical program has received FDA clearance to initiate a phase III clinical trial to demonstrate efficacy in “no-option” or “poor-option” CLI patients. In additional to vascular diseases, we are also conducting early phase studies in orthopedic and wound healing areas. We are actively looking for strategic partners to co-develop our clinical programs.

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Sales and Distribution Channels 

We market and sell our products through independent distributors, except in North America and India, where we sell direct to end-user customers.

Competition

The regenerative medicine market is characterized by rapidly evolving technology and intense competition from medical device companies, pharmaceutical companies and stem cell companies operating in the fields of cardiovascular, orthopedic and neural medicine. The primary competitors for our current device offerings include BioSafe and MacoPharma (for automated cell processing systems), and BioE, Terumo Harvest, Zimmer BioMet and Pall Corporation (for manual cell processing systems). Our competitors in the field of cell therapeutics development include MesoBlast, Osiris Therapeutics, Baxter International, Athersys, Caladrius, Capricor, Celyad, Juventas Therapeutics, Vericel, Cytori Therapeutics, Pluristem Therapeutics, Zimmer BioMet, and Bioheart.  

Research and Development

Our research and development activities in fiscal 2017 were geared towards expanding the automated platform for point-of-care applications and immune-oncology applications. Each of these development initiatives leveraged our existing AXP™ and PXP™ platforms, with a focus on both performance improvements and ease of use in intraoperative applications. Emphasis was also placed on enhancing the capabilities of our contract manufacturing partners and building on our product quality leadership position.

Collectively, research and development expenses were $2,497,000 and $3,230,000 for the years ended June 30, 2017 and June 30, 2016, respectively. Research and development activities include expenses associated with the engineering, regulatory, scientific and clinical affairs functions.

Manufacturing

We expect to continue to use contract manufacturers for high volume, disposable products and in-house manufacturing for low volume, high complexity devices. In addition, we are exploring the potential for the development of in-house capabilities relating specifically to pilot scale disposable manufacturing in support of our clinical programs.

Quality System

Our quality system is compliant with domestic and international standards and is appropriate for the specific devices we manufacture. Our corporate quality policies govern the methods used in, and the facilities and controls used for, the design, manufacture, packaging, labeling, storage, installation, and servicing of all finished devices intended for human use. Such policies are intended to ensure that the products we market are safe, effective, and otherwise in compliance with the FDA Quality System Regulation (“QSR”) (21 C.F.R. Part 820) and the applicable rules of other governmental agencies.

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We and our contract manufacturers are subject to inspections by the FDA and other regulatory agencies to ensure compliance with applicable regulations, codified in the FDA’s Quality System Regulations (“QSRs”). Compliance requirements relate to manufacturing processes, product testing, documentation control and other quality assurance procedures. Our facilities have undergone International Organization of Standards (“ISO”) 13485:2012 and EU Medical Device Directive (“MDD”) (93/42/EEC) inspections and we have obtained approval to CE-Mark our products.

Regulatory Scheme and Strategy

The development, manufacture and marketing of our cell therapy products, as well as the design and implementation of our clinical trials, are subject to regulation by the FDA as well as the equivalent agencies of other countries including the countries of the European Union and India.

The trials we conduct in India are compliant with the applicable rules of the Indian Council for Medical Research, Ministry of Health Order No. V.25011/375/2010-HR and requisite institutional ethics committee (IEC) and institutional committee for stem cell research and therapy (IC-SCRT) approvals. Both the U.S. and E.U. regulatory agencies are experienced in dealing with and accepting Indian clinical trial data. GCP necessitates review and approval by an Institutional Review Board (“IRB”) before initiation of a study, continuing review of an ongoing study by an IRB, and the documented receipt of a freely given informed consent prior to participation in the study from each subject participant.

We have a quality and regulatory compliance management system that meets the requirements of the ISO 13485: 2003 standard, the FDA’s QSRs, the EU MDD, Canadian Medical Device Regulations (“SOR 98-282”), and all other applicable local, state, national and international regulations.

●       Medical Devices. The FDA regulates medical devices to ensure their safety and efficacy under the Federal Food Drug and Cosmetic (“FD&C”) Act. Medical devices are defined by language within the FD&C Act which essentially states that a product is considered a medical device if it is intended to provide a diagnosis or basis for treatment. Once a company determines that its product is a medical device, it is required to comply with a number of federal regulations. These include the following:

● 510(k) clearance or PMA approval from the FDA, prior to commercialization (unless the device is classified as “exempt”)

● Registration of the company and listing of the medical device with the FDA (within 30 days prior to commercialization)

● Establishment and adherence to the FDA’s labeling requirements, and

● Establishment and adherence to the FDA’s Quality Systems and Medical Device Reporting regulations.

The FDA classifies medical devices into three groups: Class I, II or III. These are stratified from lowest to highest safety risk, and regulatory controls increase based on Class.

Class I Devices

Some of our products are considered to pose little or no risk when used as directed and have been deemed by the FDA to be “exempt” from FDA approval or clearance processes prior to commercialization. While pre-marketing FDA review is not mandatory for Exempt Class I medical devices, the manufacturer’s compliance with QSR is nevertheless a requirement.

Class II Devices

Several of our products, including the BioArchive and the AXP are categorized as US Class II medical devices and require premarket notification, also known as a section 510(k) clearance, prior to commercialization. Data submitted as part of a 510(k) process must demonstrate a device is “substantially equivalent” with a predicate device that is already on the market. Once 510(k) clearance has been secured, the new medical device may be marketed for its intended use and distributed in the U.S.

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Class III Devices

If a product is considered a Class III device, as is the case with the Point-of-care CLI System, the FDA approval process is more stringent and time-consuming, and includes the following:

● Extensive pre-clinical laboratory and animal testing

● Submission and approval of an IDE application prior to the conduct of a clinical study

● Human clinical studies (or trials) to establish the safety and efficacy of the medical device for the intended use, and

● Submission and approval of a PMA application to the FDA.

Pre-clinical testing typically involves in vitro laboratory analysis and in vivo animal studies to obtain information related to such things as product safety, feasibility, biological activity and reproducibility. The results of pre-clinical studies are submitted to the FDA as part of an IDE application and are reviewed by the Agency before human clinical trials can begin. We use external third parties, as well as our own facility in Gurgaon, India (GLP Compliant) to conduct pre-clinical studies.

Higher risk clinical trials conducted inside the U.S. are subject to FDA IDE regulation (21 C.F.R. Part 812), or an IND application (21 C.F.R. Part 312). Clinical trials conducted outside the U.S., and the data collected therefrom are allowed in accordance with applicable FDA requirements. The FDA or the Sponsor may suspend a clinical trial at any time if either believes that study participants may be exposed to an unacceptable health risk.

For certain Class III devices, data generated during product development, pre-clinical studies, and human clinical studies must be submitted to the FDA as a PMA application in order to secure approval for commercialization in the U.S. The FDA may deny the approval of a PMA application if applicable regulatory criteria are not satisfied and in some cases may mandate additional clinical testing. Product approvals, once obtained, can be withdrawn if compliance with regulatory standards is not maintained or if safety concerns arise after the product reaches the market. The FDA might also require post-marketing testing and surveillance programs to monitor the safety and efficacy of a medical device and has the power to forbid or limit future marketing of the product based on the results of such programs.

Other U.S. Regulatory Information

Medical device manufacturers must register with the FDA and submit their manufacturing facilities to biennial inspections to ensure compliance with applicable regulations. Failure to comply with FDA requirements can result in withdrawal of marketing clearances, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production or loss of distribution rights. In addition, device manufacturing facilities in the state of California must be registered with the California State Food and Drug Branch of the California Department of Public Health and submit to an annual inspection by the State of California to ensure compliance with applicable state regulations. We are also subject to a variety of environmental laws as well as workplace safety, hazardous material, and controlled substances regulations.

If we are successful in securing Medicare reimbursement, we will be subject to federal and state laws, such as the Federal False Claims Act, state false claims acts, the illegal remuneration provisions of the Social Security Act, the federal anti-kickback laws, state anti-kickback laws, and the federal “Stark” laws, that govern financial and other arrangements among healthcare providers, their owners, vendors and referral sources, and that are intended to prevent healthcare fraud and abuse. Among other things, these laws prohibit kickbacks, bribes and rebates, as well as other direct and indirect payments or fee splitting arrangements that are designed to induce the referral of patients to a particular provider for medical products or services payable by any federal healthcare program, and prohibit presenting a false or misleading claim for payment under a federal or state program. They also prohibit some physician self-referrals. These laws are liberally interpreted and aggressively enforced by multiple state and federal agencies and law enforcement (including individual “qui tam” plaintiffs) and such enforcement is increasing. For example, the Affordable Care Act increased funding for federal enforcement actions and many states have established their own Medicare/Medicaid Fraud Units and require providers to conspicuously post the applicable Unit’s hotline number. Possible sanctions for violation of any of these restrictions or prohibitions include loss of eligibility to participate in federal and state reimbursement programs and civil and criminal penalties.

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Also, federal transparency requirements, sometimes referred to as the “Sunshine Act” under the Patient Protection and Affordable Care Act, require manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report to the Department of Health and Human Services information related to physician payments and other transfers of value and physician ownership and investment interests.

Changes in these laws at all levels of government are frequent and could increase our cost of doing business. If we fail to comply, even inadvertently, with any of these requirements, we could be required to alter our operations, refund payments to the government, lose our licensure or accreditation, enter into corporate integrity, deferred prosecution or similar agreements with state or federal government agencies, and become subject to significant civil and criminal penalties.

International Regulatory Requirements

International regulatory requirements differ somewhat from those of the U.S. In the EU, a single regulatory approval process has been created and approval is represented by CE-Marking. To be able to affix the CE-Mark to our medical devices and distribute them in the EU, we must meet minimum standards for safety and quality (known as the essential requirements) and comply with one or more conformity rules. A notified body assesses our quality management system and compliance with the Medical Device Directive. Marketing authorization can be revoked by the applicable governmental agency or notified body in the event of an unsuccessful quality system annual audit.

In India, the regulatory body having oversight of medical devices, therapies, and cell banking is the Central Drugs Standard Control Organization (“CDSCO”), and specifically the Drugs Controller General India office. Our marketing and facilities licenses are subject to revocation by the applicable state Drug Controller in Haryana or DCGI.

Patents and Proprietary Rights

We believe that patent protection is important for our products and current and proposed business. We currently have over thirty issued patents globally. The patent positions can be uncertain because they involve interpretation of complex factual information and an evolving legal environment. The coverage sought in a patent application can be denied or significantly reduced either before or after the patent is issued. There can be no assurance that any of our pending patent applications will actually result in an issued patent. Furthermore, there can be no assurance that any existing or future patent will provide significant protection or commercial advantage, or that any existing or future patent will not be circumvented by a more basic patent. Generally, patent applications can be maintained in secrecy for at least 18 months after their earliest priority date. In addition, publication of discoveries in the scientific or patent literature often lags behind actual discoveries. Therefore, we cannot be certain that we were the first to invent or the first to file a patent application for the subject matter covered by each of our pending U.S. and foreign patent applications.

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If a third party files a patent application relating to an invention claimed in our patent application, we may be required to participate in an interference or derivation proceeding conducted by the U.S. Patent and Trademark Office to determine who owns the patent. Such proceeding could involve substantial uncertainties and cost, even if the eventual outcome is favorable to us. There can be no assurance that our patents, if issued, would be upheld as valid in court.

Licenses

The following are certain material agreements involving our business.

Fortis Healthcare Limited (“Fortis”)

On August 1, 2014 we entered into an agreement with Fortis which renews and expands our existing services agreement with them in areas including, but not limited to, cord blood banking, point of care technology sales and support, bone marrow transplant and clinical/patient management. The agreement expired on August 1, 2017 and we are in the process completing another contract with Fortis.

CBR Systems, Inc. (“CBR”)

Effective May 15, 2017 we entered into a Manufacturing and Supply Agreement with CBR which replaced the prior December 31, 2013 Sale and Purchase Agreement in which we agreed to supply CBR with the AXP cord blood processing system and disposables. The term of the current agreement is for 3 years and will automatically renew in one-year increments unless either party provides written notice of intention not to renew six months prior to the end of the term.

In June 2010, we entered into a License and Escrow Agreement in order to alleviate CBR’s concerns about potential long term supply risk. We are the sole supplier of critical devices and disposables used in the processing of cord blood samples in CBR’s operations. Under the License and Escrow Agreement, we granted CBR a perpetual, non-exclusive, royalty-free license to certain intellectual property necessary for the manufacture of AXP devices and disposables. The license is for the sole and limited purpose of ensuring continued supply of the AXP and related disposables for use by CBR. The licensed intellectual property is held in escrow and available to CBR only in the event of a default under the agreement. Effective May 15, 2017 we entered into a Sixth Amended and Restated Technology License and Escrow Agreement with CBR. This amendment, among other things, changes the circumstances that constitute a “Default” thereunder and conditions the circumstances under which CBR may, upon a default by Cesca, purchase licensed products from other manufacturers and suppliers. The events or conditions of default include: a cash balance coupled with short-term investments net of debt or borrowed funds that are payable within one year of less than two million dollars at any month end or we fail to provide products pursuant to the Manufacturing and Supply Agreement. We were in compliance with the License and Escrow Agreement at June 30, 2017 and through August 31, 2017.

Boyalife W.S.N.

On August 21, 2017, ThermoGenesis entered into an International Distributor Agreement with Boyalife W.S.N., a Chinese corporation and affiliate. Under the terms of the agreement, Boyalife W.S.N. was granted the exclusive right, subject to existing distributors and customers (if any), to develop, sell to, and service a customer base for ThermoGenesis’ AXP® (AutoXpress^®) System and BioArchive System in the People’s Republic of China (excluding Hong Kong and Taiwan), Singapore, Indonesia, and the Philippines (the “Territories”).  The agreement replaced our prior distribution agreement with Golden Meditech, which expired in August 2017 and had granted similar exclusive distribution rights in the Territories. Boyalife W.S.N. is an affiliate of Dr. Xiaochun Xu, our Chief Executive Officer and Chairman of our Board of Directors, and Boyalife (Hong Kong) Limited, our largest stockholder. Boyalife W.S.N,’s rights under the agreement include the exclusive right to distribute AXP^® Disposable Blood Processing Sets and use rights to the AXP^® (AutoXpress^®) System, BioArchive System and other accessories used for the processing of stem cells from cord blood in the Territories. Boyalife W.S.N. is also appointed as the exclusive service provider to provide repairs and preventative maintenance to ThermoGenesis products in the Territories. The term of the agreement is for three years with ThermoGenesis having the right to renew the agreement for successive two-year periods at its option. However, ThermoGenesis has the right to terminate the agreement early if Boyalife W.S.N. fails to meet specified minimum purchase requirements.

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Employees

As of June 30, 2017, we had 70 employees, 36 of whom were employed in the U.S. and 34 of whom were employed in India. On July 7, 2017 in conjunction with the SynGen transaction, we added approximately 14 employees in the U.S. We also utilize temporary employees throughout the year to address business needs and significant fluctuations in orders and product manufacturing. None of our employees are covered by a collective bargaining agreement, nor have we experienced any work stoppage.

Foreign Sales and Operations

See footnote 10 of our Notes to Consolidated Financial Statements for information on our sales and operations outside of the U.S.

Where you can Find More Information

We are required to file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other information, including our proxy statement, with the Securities and Exchange Commission (“SEC”). The public can obtain copies of these materials by visiting the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549, by calling the SEC at 1-800-732-0330, or by accessing the SEC’s website at http://www.sec.gov. In addition, as soon as reasonably practicable after these materials are filed with or furnished to the SEC, we will make copies available to the public free of charge through its website, www.cescatherapeutics.com. The information on its website is not incorporated into, and is not part of, this annual report.

ITEM 1A.     RISK FACTORS

An investment in our common stock is subject to risks inherent to our business. The material risks and uncertainties that management believes affect us are described below. Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all of the other information included or incorporated by reference in this report. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are not aware of or focused on or that we currently deem immaterial may also impair our business operations. This report is qualified in its entirety by these risk factors.

If any of the following risks actually occur, our financial condition and results of operations could be materially and adversely affected. If this were to happen, the value of our common stock could decline significantly, and you could lose all or part of your investment.

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Risks Related to Our Business

The Equity in our ThermoGenesis Subsidiary is 20% Owned by a Third Party that Holds Certain Minority Investor Rights in that Subsidiary, and Those Rights Could Limit or Delay Our Ability to Take Certain Major Actions Relating to ThermoGenesis.Immediately prior to our acquisition of the assets and business of SynGen Inc. in July 2017, we contributed the assets and business of our blood and bone-marrow processing device business to our ThermoGenesis Corp. subsidiary. Substantially all of our historical revenues are attributable to our device business, and as a result of such contribution, the device business is now owned and operated by ThermoGenesis. In connection with the SynGen asset acquisition, we issued shares of ThermoGenesis common stock to SynGen resulting in SynGen owning 20% of the outstanding stock of ThermoGenesis on a post-transaction basis, and such common stock was thereafter transferred to Bay City Capital Fund V, L.P. and an affiliated fund (“Bay City”). Under the agreements relating to the SynGen asset acquisition, although we continue to own 80% of the outstanding capital stock of ThermoGenesis, Bay City was granted certain minority investor rights in ThermoGenesis. These rights include board representation rights, a right of first refusal over sales of ThermoGenesis stock by us, co-sale rights with respect to any sale of ThermoGenesis stock by us, and supermajority protective voting rights over certain major decisions, such as a sale of ThermoGenesis, raising capital in ThermoGenesis with preferred stock, transfers of ThermoGenesis assets, or redemptions of ThermoGenesis stock. In addition, the board of directors of ThermoGenesis is comprised of 5 persons, two of whom are designated by us, one of whom is designed by Bay City, one of whom is designated by us but must be independent, and one of whom is designated by Bay City but must be independent. The foregoing minority investor rights in ThermoGenesis could limit or delay our ability or flexibility to take certain major actions or make major decisions relating to ThermoGenesis that might be beneficial to our stockholders, unless such actions or decisions have the consent or support of Bay City. Accordingly, the minority investor rights in ThermoGenesis could have a negative impact on the market price of our common stock.

We May Not be Able to Successfully Recognize the Anticipated Benefits from the SynGen Asset Acquisition or Retain Key Acquisition Employees. On July 7, 2017, our ThermoGenesis subsidiary acquired the business and substantially all of the assets of SynGen, a privately held Sacramento, California-based technology company that develops, markets, and sells advanced cell separation tools and accessories. The success of the SynGen asset acquisition depends on our ability to leverage the intellectual property, other assets, and acquired personnel of SynGen in order to increase our sales and profitability. In order to successfully achieve this, we will need to integrate the businesses and employees of SynGen and ThermoGenesis and motivate such employees. This will place significant demands on our management, our operational and financial systems, our infrastructure, and our other resources. If we do not effectively manage this process, our ability to grow the consolidated business in the manner anticipated by the acquisition will suffer, and we may lose key employees that we acquired from SynGen.

Lack of Demonstrated Clinical Utility of Cord Blood Derived Stem Cells Beyond Hematopoietic Transplantation May Result in a Decline in Demand for Cord Blood Banking Services, Adversely Affecting Sales of Our Products. Transplants using stem cells derived from cord blood and cord tissue have become a standard procedure for treating blood cell lineage disorders including leukemia, lymphoma and anemia. However, clinical research demonstrating the utility of cord blood stem cells for use in treating other diseases or injuries has been minimal, leaving claims of broad clinical utility of cord blood stem cells by cord blood banks largely unsubstantiated. The low utilization rate of banked cord blood samples coupled with the lack of demonstrated clinical results for multiple treatment indications has led to consumer skepticism regarding the benefits of cord blood banking and in turn, a significant reduction in collection rates in a number of geographies in Europe and the U.S. A continued lack of investment in the research and development of supporting clinical data for additional applications may lead to greater skepticism globally, further adversely affecting demand for cord blood banking services and our revenues.

We have Limited Operating History In the Emerging Regenerative Medicine Industry. We are in the business of research, development and commercialization of autologous cell-based therapeutics for use in the emerging regenerative medicine industry, and therefore, we have a limited operating history in such industry on which to base an evaluation of our business and prospects.  We will be subject to the risks inherent in the operation of a company in an emerging industry such as regulatory setbacks and delays, fluctuations in expenses, competition, and governmental regulation.

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Our Controlling Stockholder Has Significant Influence Over Us Which Could Limit Your Ability to Influence the Outcome of Key Transactions, Including a Change of Control, and Could Negatively Impact the Market Price of Our Common Stock By Discouraging Third Party Investors. As of June 30, 2017, approximately 70% of our outstanding common stock is owned by Boyalife (Hong Kong) Limited. In addition, pursuant to the terms of a Nomination and Voting Agreement we entered into with Boyalife (Hong Kong) Limited and Boyalife Investment Inc. in February 2016, Boyalife (Hong Kong) Limited and Boyalife Investment Inc. have the right to designate up to three of the seven members to our board of directors until such time as they collectively no longer hold at least 50% of our common stock.

Boyalife (Hong Kong) Limited is 100% owned by Yishu Li, the spouse of Dr. Xiachun Xu, our CEO and chairman of our board of directors. Boyalife Investment, Inc. is also controlled by Dr. Xu. As a result of their ownership and ability to designate up to three members of our board of directors, Boyalife (Hong Kong) Limited and Boyalife Investment Inc. (including Dr. Xu and his spouse Ms. Li) are able to exercise significant influence over all matters affecting us, including the election of directors, formation and execution of business strategy and approval of mergers, acquisitions and other significant corporate transactions, which may have an adverse effect on our stock price and ability to execute our strategic initiatives. They may have conflicts of interest and interests that are not aligned with those of other investors in all respects. As a result of the concentrated ownership of our common stock, Dr. Xu and Ms. Li, acting together, are able to control all matters requiring stockholder approval, including the election of directors, the adoption of amendments to our certificate of incorporation and bylaws, and approval of a sale of our company, and other significant corporate transactions. This concentration of ownership may delay or prevent a change in control and may have a negative impact on the market price of our common stock by discouraging third party investors from investing or making tender offers for our shares.

Our Potential Cell Therapy Products and Technologies Are In Early Stages Of Development. The development of new cell therapy products is a highly risky undertaking, and there can be no assurance that any future research and development efforts we may undertake will be successful. Our potential products in vascular, orthopedic, hematological/oncological and wound care indications will require extensive additional research and development and regulatory approval before any commercial introduction.  There can be no assurance that any future research, development and clinical trial efforts will result in viable products or meet efficacy standards.

We Intend To Rely On Third Parties For Certain Functions In Conducting Clinical Trials Of Our Product Candidates. We intend to rely on third parties for certain clinical trial activities of our products.  In this regard, we have an agreement with Fortis Healthcare Limited, a hospital chain networked throughout India and Asia, for contract clinical trial services programs among other services. The agreement expired in August 2017 and we are currently in discussions to renew the agreement. Termination, or non-renewal, of this agreement could jeopardize or delay development of our products.

We May Be Unable to Obtain Marketing Approval from the FDA For Our Point-of-Care System for Critical Limb Ischemia (CLI) Indication. At the end of 2016, the Company received approval from the U.S. Food and Drug Administration (FDA) for the Company’s amended pivotal study protocol for treatment of CLI. The amended CLI clinical trial is designed to demonstrate the safety and efficacy of the Company’s point-of-care system for the treatment of CLI patients with limited or no treatment options. The changes approved by the FDA are intended to increase patient enrollment by expanding the patient pool from Rutherford Category 5 patients only, to also include Rutherford Category 4 patients, or patients with a less severe form of the disease. The study population has been expanded to include patients who are poor candidates for either surgery or endovascular therapies. The sample size of the CLI trial was increased from 224 to 362 patients. With the FDA approval of our amended phase III clinical trial protocol of CLI, the company is actively looking for an external strategic partner to move forward with the CLI clinical trial program. The marketing approval of point-of-care device for the treatment of CLI indication is subject to a successful strategic partnership, successful completion of our phase III study with statistical significant results and acceptance of the results by the FDA for the disease indication. Our inability to successfully complete any of the above mentioned steps can affect our ability to obtain marketing approval in the United States.

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Delays In The Commencement Or Completion Of Clinical Testing Of Our Products Could Result In Increased Costs To Us And Delay Our Ability To Generate Revenues. Delays in the commencement or completion of clinical testing could significantly impact our product development costs.  We do not know whether current or planned clinical trials will begin on time or be completed on schedule, if at all.  The commencement of clinical trials can be delayed for a variety of reasons, including delays in:

● Obtaining regulatory approval to commence a clinical trial;

● Having the necessary funding in place to conduct the clinical trial;

● Reaching agreement on acceptable terms with prospective contract research organizations and clinical trial sites for Phase II and III trials;

● Obtaining proper devices for any or all of the product candidates;

● Obtaining institutional review board approval to conduct a clinical trial at a prospective site; and

● Recruiting participants for a clinical trial.

In addition, once a clinical trial has begun, it may be suspended or terminated by us or the FDA or other regulatory authorities due to a number of factors, including:

● Failure to conduct the clinical trial in accordance with regulatory requirements;

● Inspection of the clinical trial operations or clinical trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold;

● Failure to achieve certain efficacy and/or safety standards;

● Reports of serious adverse events including but not limited to death of trial subjects; or

● Lack of adequate funding to continue the clinical trial.

Our clinical therapy candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs that we expect to pursue.

We May Seek To Enter Into Collaborative Arrangements To Develop and Commercialize Products Which May Not Be Successful. We may seek to enter into collaborative arrangements to develop and commercialize some of our potential products both in North America and international markets.  There can be no assurance that we will be able to negotiate collaborative arrangements on favorable terms or at all or that current or future collaborative arrangements will be successful.

A Significant Portion of Revenue is Derived from Customers Outside the United States. We may Lose Revenues, Market Share, and Profits due to Exchange Rate Fluctuations and Political and Economic Changes Related to its Foreign Business. In the year ended June 30, 2017, sales to customers outside the U.S. comprised approximately 54% of revenues. This compares to 57% in fiscal 2016. Our foreign business is subject to economic, political and regulatory uncertainties and risks that are unique to each area of the world. Fluctuations in exchange rates may also affect the prices that foreign customers are willing to pay, and may put us at a price disadvantage compared to other competitors. Potentially volatile shifts in exchange rates may negatively affect our financial position and results.

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The Loss of a Significant Distributor or End User Customer may Adversely Affect Financial Condition and Results of Operations. Revenues from a significant distributor and a significant customer comprised 42% of revenues for the year ended June 30, 2017. In August 2017, we did not renew the contract with this significant distributor and signed a contract with a new distributor which is an affiliate of the Company. The loss of a large end user customer or distributor may decrease revenues.

We may be Exposed to Liabilities under the Foreign Corrupt Practices Act and any Determination that we Violated these Laws could have a Material Adverse Effect on our Business. We are subject to the Foreign Corrupt Practices Act (“FCPA”), and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining or retaining business. It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards and any future improvements may prove to be less than effective and our employees, consultants, sales agents or distributors may engage in conduct for which we might be held responsible. Violations of the FCPA may result in severe criminal or civil sanctions and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition.

Adverse Results of Legal Proceedings could have a Material Adverse Effect on Us. We are subject to, and may in the future be subject to, a variety of legal proceedings and claims that arise out of the ordinary conduct of our business. Results of legal proceedings cannot be predicted with certainty. Irrespective of their merits, legal proceedings may be both lengthy and disruptive to our operations and may cause significant expenditure and diversion of management attention. We may be faced with significant monetary damages or injunctive relief against us that could have a material adverse effect on a portion of our business operations or a material adverse effect on our financial condition and results of operations.

Risks Related to Our Operations

Our Ability to Conduct a CLIRST III Clinical Trial Is Substantially Dependent on Our Ability to Enter into a Strategic Partnership and There Are No Assurances That Such Funding Source will Materialize. We will need additional funding to commence the CLIRST III clinical trial and we are actively looking for a strategic partner to co-sponsor the trial with us. We cannot assure that such funding will be available on a timely basis, in needed quantities, or on terms favorable to us, if at all.

We Do Not Have Commercial-Scale Manufacturing Capability And Lack Commercial Manufacturing Experience. We operate GMP manufacturing facilities for both devices and cellular production; however, they are not of sufficient size for medium to large commercial production of product candidates.  We will not have large scale experience in cell-drug formulation or manufacturing, and will lack the resources and the capability to manufacture any of our product candidates on a clinical or commercial scale.  Accordingly, we expect to depend on third-party contract manufacturers for the foreseeable future.  Any performance failure on the part of our contract manufacturers could delay clinical development, regulatory approval or commercialization of our current or future products, depriving us of potential product revenues and resulting in additional losses.

We Have Limited Sales, Marketing and Distribution Experience in Pharmaceutical Products. We have limited experience in the sales, marketing, and distribution of pharmaceutical products.  There can be no assurance that we will be able to establish sales, marketing, and distribution capabilities or make arrangements with current collaborators or others to perform such activities or that such effort will be successful.  If we decide to market any of our new products directly, we must either partner, acquire or internally develop a marketing and sales force with technical expertise and with supporting distribution capabilities.  The acquisition or development of a sales, marketing and distribution infrastructure would require substantial resources, which may not be available to us or, even if available, divert the attention of our management and key personnel, and have a negative impact on further product development efforts.

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Our Inability to Protect our Patents, Trademarks, Trade Secrets and other Proprietary Rights could Adversely Impact our Competitive Position. We believe that our patents, trademarks, trade secrets and other proprietary rights are important to our success and our competitive position. Accordingly, we commit substantial resources to the establishment and protection of our patents, trademarks, trade secrets and proprietary rights. We use various methods, including confidentiality agreements with employees, vendors, and customers, to protect our trade secrets and proprietary know-how for our products. We currently hold patents for products, and have patents pending in certain countries for additional products that we market or intend to market. However, our actions to establish and protect our patents, trademarks, and other proprietary rights may be inadequate to prevent imitation of our products by others or to prevent others from claiming violations of their trademarks and proprietary rights by us. If our products are challenged as infringing upon patents of other parties, we may be required to modify the design of the product, obtain a license, or litigate the issues, all of which may have an adverse business effect on us.

We may be Subject to Claims that our Products or Processes Infringe the Intellectual Property Rights of Others, which may Cause us to Pay Unexpected Litigation Costs or Damages, Modify our Products or Processes or Prevent us from Selling our Products. Although it is our intention to avoid infringing or otherwise violating the intellectual property rights of others, third parties may nevertheless claim that our processes and products infringe their intellectual property and other rights. Our strategies of capitalizing on growing international demand as well as developing new innovative products across multiple business lines present similar infringement claim risks both internationally and in the U.S. as we expand the scope of our product offerings and markets. We compete with other companies for contracts in some small or specialized industries, which increase the risk that the other companies will develop overlapping technologies leading to an increased possibility that infringement claims will arise. Whether or not these claims have merit, we may be subject to costly and time-consuming legal proceedings, and this could divert management’s attention from operating our business. In order to resolve such proceedings, we may need to obtain licenses from these third parties or substantially re-engineer or rename our products in order to avoid infringement. In addition, we might not be able to obtain the necessary licenses on acceptable terms, or at all, or be able to re-engineer or rename our products successfully.

We Commercially, in Co-Branding with Fortis Healthcare, Bank and Store Private Cord Blood Stem Cells in our TotipotentRX GMP Facility. We could be Subject to Unexpected Litigation Costs or Damages for Loss of One or More Family Owned Units of Cord Blood or if one of the Cord Blood Units We Store Causes Bodily Injury. We face an inherent business risk of exposure to product liability claims if our products or product candidates are alleged or found to have caused injury, or cannot be used for some reason within our control and are found to result in injury or death. While we believe that our current liability insurance coverage is adequate for our present clinical and commercial activities we may not be able to maintain insurance on acceptable terms or at all. If we are unable to obtain insurance or any claims against us substantially exceed our coverage, then our business could be adversely impacted.

If our Cord Blood Processing and Storage Facility in Gurgaon, India is Damaged or Destroyed, our Business, Programs and Prospects could be Negatively Affected. We process and store our customers’ umbilical cord blood at our facility within Fortis Memorial Research Institute (a hospital) in Gurgaon, India. If this facility or the equipment in the facility were to be significantly damaged or destroyed, we could suffer a loss of some or all of the stored cord blood units. Depending on the extent of loss, such an event could reduce our ability to provide cord blood stem cells when requested, could expose us to significant liability from our cord blood banking customers and could affect our ability to continue to provide umbilical cord blood preservation services.

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We may not be able to Protect our Intellectual Property in Countries Outside the United States. Intellectual property law outside the United States is uncertain and in many countries is currently undergoing review and revisions. The laws of some countries do not protect our patent and other intellectual property rights to the same extent as United States laws. This is particularly relevant to us as a significant amount of our current and projected future sales are outside of the United States. Third parties may attempt to oppose the issuance of patents to us in foreign countries by initiating opposition proceedings. Opposition proceedings against any of our patent filings in a foreign country could have an adverse effect on our corresponding patents that are issued or pending in the United States. It may be necessary or useful for us to participate in proceedings to determine the validity of our patents or our competitors’ patents that have been issued in countries other than the U.S. This could result in substantial costs, divert our efforts and attention from other aspects of our business, and could have a material adverse effect on our results of operations and financial condition.

Any Failure to Achieve and Maintain the High Design and Manufacturing Standards that our Products Require may Seriously Harm our Business. Our products require precise, high-quality manufacturing. Achieving precision and quality control requires skill and diligence by our personnel as well as our vendors. Our failure to achieve and maintain these high manufacturing standards, including the incidence of manufacturing errors, design defects or component failures could result in patient injury or death, product recalls or withdrawals, delays or failures in product testing or delivery, cost overruns or other problems that could seriously hurt our business. Additionally, the large amount of AXP disposable inventory certain distributors and end-users maintain may delay the identification of a manufacturing error and expand the financial impact. A manufacturing error or defect, or previously undetected design defect, or uncorrected impurity or variation in a raw material component, either unknown or undetected, could affect the product. Despite our very high manufacturing standards, we cannot completely eliminate the risk of errors, defects or failures. If we or our vendors are unable to manufacture our products in accordance with necessary quality standards, our business and results of operations may be negatively affected.

Our Revenues and Operating Results may be Adversely Affected as a Result of our Required Compliance with the Adopted EU Directive on the Restriction of the Use of Hazardous Substances in Electrical and Electronic Equipment, as well as other Standards Around the World. A number of domestic and foreign jurisdictions seek to restrict the use of various substances, a number of which have been or are currently used in our products or processes. For example, the EU Restriction of Hazardous Substances in Electrical and Electronic Equipment (“RoHS”) Directive now requires that certain substances, which may be found in certain products we have manufactured in the past, be removed from all electronics components. Other countries, such as China, have enacted or may enact laws or regulations similar to RoHS. Eliminating such substances from our manufacturing processes requires the expenditure of additional research and development funds to seek alternative substances for our products, as well as increased testing by third parties to ensure the quality of our products and compliance with the RoHS Directive. While we have implemented a compliance program to ensure our product offerings meet these regulations, there may be instances where alternative substances will not be available or commercially feasible, or may only be available from a single source, or may be significantly more expensive than their restricted counterparts. Therefore, we have focused our compliance efforts on those products and geographical areas in which we have the highest revenue potential. Our failure to comply with past, present and future similar laws could result in reduced sales of our products, substantial product inventory write-offs, reputation damage, penalties and other sanctions, any of which could harm our business and operating results.

Compliance with Government Regulations Regarding the Use of “Conflict Minerals” may Result in Additional Expense and Affect our Operations. The SEC has adopted a final rule to implement Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which imposes new disclosure requirements regarding the use of “conflict minerals” mined from the Democratic Republic of Congo and adjoining countries. These minerals include tantalum, tin, gold and tungsten. We may incur significant costs associated with complying with the new disclosure requirements, including but not limited to costs related to determining which of our products may be subject to the rules and identifying the source of any “conflict minerals” used in those products. Additionally, implementing the new requirements could adversely affect the sourcing, supply and pricing of materials used in the manufacture of our products. We may also face reputational challenges if we are unable to verify through our compliance procedures the origins for all metals used in our products.

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Our Products may be Subject to Product Recalls which may Harm our Reputation and Divert our Managerial and Financial Resources. The FDA and similar governmental authorities in other countries have the authority to order the mandatory recall of our products or order their removal from the market if the governmental entity finds our products might cause adverse health consequences or death. The FDA may also seize product or prevent further distribution. A government-mandated or voluntary recall by us could occur as a result of component failures, manufacturing errors or design defects (including labeling defects). In the past we have initiated voluntary recalls of some of our products and we could do so in the future. Any recall of our products may harm our reputation with customers, divert managerial and financial resources and negatively impact our profitability.

We are Dependent on our Suppliers and Manufacturers to Meet Existing Regulations. Certain of our suppliers and manufacturers are subject to heavy government regulations, including FDA QSR compliance, in the operation of their facilities, products and manufacturing processes. Any adverse action by the FDA against our suppliers or manufacturers could delay supply or manufacture of component products required to be integrated or sold with our products. Although we attempt to mitigate this risk through inventory held directly or through distributors, and audit our suppliers, there are no assurances we will be successful in identifying issues early enough to allow for corrective action or transition to an alternative supplier, or in locating an alternative supplier or manufacturer to meet product shipment or launch deadlines. As a result, our sales, contractual commitments and financial forecasts may be significantly affected by any such delays.

Dependence on Suppliers for Disposable Products and Custom Components May Impact the Production Schedule. We obtain certain disposable products and custom components from a limited number of suppliers. If the supplier raises the price or discontinues production, we may have to find another qualified supplier to provide the item or re-engineer the item. In the event that it becomes necessary for us to find another supplier, we would first be required to qualify the quality assurance systems and product quality of that alternative supplier. Any operational issues with re-engineering or the alternative qualified supplier may impact the production schedule, therefore delaying revenues, and this may cause the cost of disposables or key components to increase.

Failure to Meet the Financial Covenant in our Technology License and Escrow Agreement could Decrease our AXP Revenues. Under our license and escrow agreement with Cbr Systems, Inc. if we fail to meet the financial covenant of cash balance and short-term investments net of debt or borrowed funds that are payable within one year of not less than $2,000,000, they may take possession of the escrowed intellectual property and initiate manufacturing of the applicable device and disposables. If this were to occur, our revenues would be negatively impacted. In order to remain compliant we may have to complete additional financings or provide consideration to the counter party to modify the obligations.

Failure to Retain or Hire Key Personnel may Adversely Affect our Ability to Sustain or Grow our Business. Our ability to operate successfully and manage our potential future growth depends significantly upon retaining key research, technical, clinical, regulatory, sales, marketing and managerial personnel. Our future success partially depends upon the continued services of key technical and senior management personnel. Our future success also depends on our continuing ability to attract, retain and motivate highly qualified managerial and technical personnel. The inability to retain or attract qualified personnel could have a significant negative effect upon our efforts and thereby materially harm our business and future financial condition.

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Most of Our Operations Are Conducted At A Single Location. Any Disruption At Our Facilities Could Delay Revenues Or Increase Our Expenses. Our U.S. device operations are conducted at a single location although we contract the manufacturing of certain devices, disposables and components. We take precautions to safeguard our facilities, through insurance, health and safety protocols, and off-site storage of computer data. However, a natural disaster, such as a fire, flood or earthquake, could cause substantial delays in our operations, damage or destroy our manufacturing equipment or inventory, and cause us to incur additional expenses. The insurance we maintain against fires, floods, and other natural disasters may not be adequate to cover our losses in any particular case.

Failure to Maintain and/or Upgrade Our Information Technology Systems May Have an Adverse Effect on Our Operations. We rely on various information technology systems to manage our operations, and we evaluate these systems against our current and expected requirements. We are currently evaluating alternatives to our legacy ERP system. Until a new system is purchased and implemented, any information technology system disruptions, if not anticipated and appropriately mitigated, could have an adverse effect on our business and operations.

If we Fail to Maintain Proper and Effective Internal Controls, our Ability to Produce Accurate and Timely Financial Statements Could be Impaired, which Could Harm our Operating Results, our Ability to Operate our Business and Investors’ Views of Us. We are required to establish and maintain adequate internal control over financial reporting, which are processes designed 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. We are also required to comply with Section 404 of the Sarbanes-Oxley Act of 2002, which (among other things) requires public companies to conduct an annual review and evaluation of their internal control over financial reporting. However, as a “smaller reporting company,” we are not required to obtain an auditor attestation regarding our internal control over financial reporting. If, in the future, we require an attestation report from our independent registered public accounting firm and that firm is unable to provide an unqualified attestation report on the effectiveness of our internal controls over financial reporting, investor confidence and, in turn, our stock price could be materially adversely affected.

Risks Related to Our Industry

Our Business is Heavily Regulated, Resulting in Increased Costs of Operations and Delays in Product Sales. Many of our products require FDA approval or clearance to sell in the U.S. and will require approvals from comparable agencies to sell in foreign countries. These authorizations may limit the U.S. or foreign markets in which our products may be sold. Further, our products must be manufactured under requirements of our quality system for continued CE-Marking so they can continue to be marketed and sold in Europe. These requirements are similar to the QSR of both the FDA and California Department of Public Health. Failure to comply with or incorrectly interpret these quality system requirements and regulations may subject us to delays in production while we correct deficiencies found by the FDA, the State of California, or our notifying body as a result of any audit of our quality system. If we are found to be out of compliance, we could receive a Warning Letter or an untitled letter from the FDA or even be temporarily shut down in manufacturing and product sales while the non-conformances are rectified. Also, we may have to recall products and temporarily cease their manufacture and distribution, which would increase our costs and reduce our revenues. The FDA may also invalidate our PMA or 510(k) if appropriate regulations relative to the PMA or 510(k) product are not met. The notified bodies may elect to not renew CE-Mark certification. Any of these events would negatively impact our revenues and costs of operations.

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Changes in Governmental Regulations may Reduce Demand for our Products or Increase our Expenses. We compete in many markets in which we and our customers must comply with federal, state, local and international regulations, such as environmental, health and safety and food and drug regulations. We develop, configure and market our products to meet customer needs created by those regulations. Any significant change in regulations could reduce demand for our products or increase our expenses. For example, many of our instruments are marketed to the industry for enabling new regenerative therapies. Changes in the FDA’s regulation of the devices and products directed at regenerative medicine, and development process for new therapeutic applications could have an adverse effect on the demand for these products.

To Sell in International Markets, We will be Subject to Regulation in Foreign Countries. In cooperation with our distribution partners, we intend to market our current and future products both domestically and in many foreign markets. A number of risks are inherent in international transactions. In order for us to market our products in certain non-U.S. jurisdictions, we need to obtain and maintain required regulatory approvals or clearances and must comply with extensive regulations regarding safety, manufacturing processes and quality. These regulations, including the requirements for approvals or clearances to market, may differ from the FDA regulatory scheme. International sales also may be limited or disrupted by political instability, price controls, trade restrictions and changes in tariffs. Additionally, fluctuations in currency exchange rates may adversely affect demand for our products by increasing the price of our products in the currency of the countries in which the products are sold.

There can be no assurance that we will obtain regulatory approvals or clearances in all of the countries where we intend to market our products, or that we will not incur significant costs in obtaining or maintaining foreign regulatory approvals or clearances, or that we will be able to successfully commercialize current or future products in various foreign markets. Delays in receipt of approvals or clearances to market our products in foreign countries, failure to receive such approvals or clearances or the future loss of previously received approvals or clearances could have a substantial negative effect on our results of operations and financial condition.

To Operate In Foreign Jurisdictions, We Are Subject to Regulation by Non-U.S. Authorities. We have operations in India, and as such are subject to Indian regulatory agencies. A number of risks are inherent in conducting business and clinical operations overseas. In order for us to operate as a majority owned foreign corporation in India, we are subject to financial regulations imposed by the Reserve Bank of India. This includes the rules specific to the capital funding, pledging of assets, repatriation of funds and payment of dividends from and to the foreign subsidiaries and from and to us in the U.S.

In order for us to manufacture and/or market our services and products in India, we need to obtain and maintain required regulatory approvals or clearances and must comply with extensive regulations regarding safety, manufacturing processes and quality. These regulations, including the requirements for approvals or clearances to market, and/or export may differ from the FDA regulatory scheme. Additionally, in order for us to complete clinical trials, clinical trial services and cell banking in India, and other foreign jurisdictions, we need to obtain and maintain approvals and licenses which comply with extensive regulations of the appropriate regulatory body.

International operations also may be limited or disrupted by political, economic or social instability, price controls, trade restrictions and changes in tariffs as ordered by various governmental agencies. Additionally, fluctuations in currency exchange rates may adversely affect the cost of production for our products by increasing the price of materials and other inputs for our products in the currency of the countries in which the products are sold.

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If Our Competitors Develop and Market Products That Are More Effective Than Our Product Candidates Or Obtain Regulatory and Market Approval For Similar Products Before We Do, Our Commercial Opportunity May Be Reduced Or Eliminated. The development and commercialization of new pharmaceutical products which target cardiovascular, orthopedic, chronic dermal wounds and other conditions addressed by our current and future products is competitive, and we will face competition from numerous sources, including major biotechnology and pharmaceutical companies worldwide. Many of our competitors have substantially greater financial and technical resources, and development, production and marketing capabilities than we do. In addition, many of these companies have more experience than we do in pre-clinical testing, clinical trials and manufacturing of compounds, as well as in obtaining FDA and foreign regulatory approvals. As a result, there is a risk that one of the competitors will develop a more effective product for the same indications for which we are developing a product or, alternatively, bring a similar product to market before we can. With regards to the BioArchive and AXP Systems, numerous larger and better-financed medical device manufacturers may choose to enter this market.

Influence by the Government and Insurance Companies may Adversely Impact Sales of our Products. Our business may be materially affected by continuing efforts by government, third party payers such as Medicare, Medicaid, and private health insurance plans, to reduce the costs of healthcare. For example, in certain foreign markets the pricing and profit margins of certain healthcare products are subject to government controls. In addition, increasing emphasis on managed care in the U.S. will continue to place pressure on the pricing of healthcare products. As a result, continuing efforts to contain healthcare costs may result in reduced sales or price reductions for our products. To date, we are not aware of any direct impact on our pricing or product sales due to such efforts by governments to contain healthcare costs, and we do not anticipate any impact in the near future.

Product Liability and Uninsured Risks May Adversely Affect the Continuing Operations. We operate in an industry susceptible to significant product liability claims. We may be liable if any of our products cause injury, illness, or death. These claims may be brought by individuals seeking relief or by groups seeking to represent a class. We also may be required to recall certain of our products should they become damaged or if they are defective. We are not aware of any material product liability claims against us. However, product liability claims may be asserted against us in the future based on events we are not aware of at the present time. We maintain a product liability policy and a general liability policy that includes product liability coverage. However, a product liability claim against us could have a material adverse effect on our business or future financial condition.

We Commercially Process Stem Cells under a Physician’s Order for use in Clinical Applications in India. Our GMP laboratory within Fortis Memorial Research Institute in Gurgaon, India, processes stem cells for certain uses under a physician’s order, and we charge for these services. This service is primarily focused on our growing initiative in bone marrow transplant. We could face product or service liability claim(s) for a bodily injury asserted by a claimant as a result from our GMP services. We mitigate our risks by adhering to international standards, maintain international certification by BSI to GMP, are U.S FDA registered for such activities and are inspected by the Drugs Controller General of India. We believe our global liability insurance is sufficient to cover claims, but in the event it is not it could materially impact our financial health.

Risks Related to Operating Results and Financial Markets

We Have Incurred Net Losses and We Anticipate that our Losses will Continue. We have not been profitable for a significant period. For the fiscal years ended June 30, 2017 and 2016, we had a net loss of $29,095,000 and $18,588,000 respectively and an accumulated deficit at June 30, 2017, of $185,357,000. We will continue to incur significant costs as we develop and market our current products and related applications. Although we are executing our business plan to develop, market and launch new products, continuing losses may impair our ability to fully meet our objectives for new product sales or threaten our ability to continue as a going concern in future years.

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We Will Need to Raise Additional Capital to Fund our Operations and in Furtherance of Our Business Plan. We will need to raise additional capital in the near future to fund our future operations and in furtherance of our business plan, including progression of the clinical trials and development of other new products. 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 partners 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, and such dilution may be significant based upon the size of such financing. Additionally, we cannot assure that such funding will be available on a timely basis, in needed quantities, or on terms favorable to us, if at all.

Our Future Financial Results Could be Adversely Impacted by Asset Impairment Charges. We are required to test both goodwill and intangible assets for impairment on an annual basis. We have chosen to perform our annual impairment reviews of goodwill and other intangible assets during the fourth quarter of each fiscal year. We also are required to test for impairment between annual tests if events occur or circumstances change that would more likely than not reduces our fair value below book value. These events or circumstances could include results of our on-going clinical trials, activities and results of our competitor’s clinical trials, a significant change in the regulatory climate, legal factors, operating performance indicators, or other factors. If the fair market value is less than the book value, we could be required to record an impairment charge. The valuation requires judgment in estimating future cash flows, discount rates and estimated product life cycles. In making these judgments, we evaluate the financial health of the business, including such factors as industry performance, changes in technology and operating cash flows.

As of June 30, 2017 we have a goodwill balance of $13,195,000 and a net intangible assets balance of $20,165,000, out of total assets of $46,932,000. As a result, the amount of any annual or interim impairment could be significant and could have a material adverse effect on our reported financial results for the period in which the charge is taken.

We may Incur Significant Non-operating, Non-cash Charges Resulting from Changes in the Fair Value of Warrants. Our Series A warrants are a derivative instrument; as such they have been recorded at their respective relative fair values at the issuance date and will be recorded at their respective fair values at each subsequent balance sheet date. Any change in value between reporting periods will be recorded as a non-operating, non-cash charge at each reporting date. The impact of these non-operating, non-cash charges could have an adverse effect on the Company’s financial results. The fair value of the warrants is tied in large part to our stock price. If the stock price increases between reporting periods, the warrants become more valuable. As such, there is no way to forecast what the non-operating, non-cash charges will be in the future or what the future impact will be on our financial statements.

Risks Related to Our Common Stock

If the Price of our Common Stock does not Meet the Requirements of the NASDAQ Capital Market (“NASDAQ”), 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. 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.

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Liquidity of our Common Stock. Although there is a public market for our common stock, trading volume has been historically low, which could impact the stock price and the ability to sell shares of our common stock. We can give no assurance that an active and liquid public market for the shares of the common stock will continue in the future. In addition, future sales of large amounts of common stock could adversely affect the market price of our common stock and our ability to raise capital. The price of our common stock could also drop as a result of the exercise of options for common stock or the perception that such sales or exercise of options could occur. These factors could also have a negative impact on the liquidity of our common stock and our ability to raise funds through future stock offerings.

We do not Pay Cash Dividends. We have never paid any cash dividends on our common stock and do not intend to pay cash dividends in the foreseeable future. Instead, we intend to apply earnings, if any, to the expansion and development of our business. Thus, the liquidity of your investment is dependent upon your ability to sell stock at an acceptable price. The price can go down as well as up and may limit your ability to realize any value from your investment, including the initial purchase price.

ITEM 1B.     UNRESOLVED STAFF COMMENTS

None.

ITEM 2.     PROPERTIES

We lease a facility with approximately 28,000 square feet of space located in Rancho Cordova, California. The facility is used by both our clinical development and device segments and is devoted to warehouse space, manufacturing of products, office space, a biologics lab, and a research and development lab. The lease expires May 31, 2019.

In Gurgaon India we lease approximately 5,800 square feet for an office facility for our clinical development segment. The lease expires March 1, 2018. In August 2017, we gave a 30 days notice of our intention to terminate this lease and entered into a lease for a different facility for approximately 1,500 square feet. The new lease expires September 14, 2023, however, either party can terminate the lease after September 2019 with three months notice.

Additionally in Gurgaon India, as part of our agreement with Fortis Healthcare, we occupy and manage a 2,800 square foot cord blood banking and cellular therapy processing facility in the Fortis Memorial Research Institute.

We believe our facilities are adequate for our present needs and expect them to remain adequate for the foreseeable future.

ITEM 3.     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 and while the outcome of such disagreements and disputes cannot be predicted with certainty, except as described below, we do not believe that any pending legal proceedings are material. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

On May 4, 2017, Mavericks Capital LLC and Mavericks Capital Securities LLC filed suit against the Company in the Superior Court of the State of California for the County of Santa Clara (Case No. 17 CV 309652). The complaint relates to a July 20, 2015 agreement between the parties in which plaintiffs agreed to assist the Company in finding strategic partners. The complaint alleges that the Company breached the agreement by failing to pay plaintiffs a $1 million "Transaction Fee" in connection with what plaintiffs allege was a "Sale of the Company." The complaint seeks compensatory and special damages, interest, costs, and attorneys' fees. On June 22, 2017, the Company answered the complaint, denying all material allegations. The parties are currently engaged in discovery, and no trial date has been set.

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On September 9, 2014, we filed a complaint against SynGen Inc., PHC Medical Inc., Philip Coelho and others (the Defendants) in the case captioned as Cesca Therapeutics, Inc. v. SynGen, Inc., et al, United States District Court, Eastern District of California, Case No. 2:14-cv-02085-GEB-KJN alleging misappropriation of trade secrets and breach of contract among other claims. On July 7, 2017, as part of the SynGen acquisition transaction and in consideration of the parties’ agreement pursuant thereto, we settled this dispute and the parties granted each other customary mutual releases.

ITEM 4.     MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock, $0.001 par value, is listed on the NASDAQ Capital Market under the symbol KOOL. The following table sets forth the range of high and low closing bid prices for our common stock for the past two fiscal years as reported on the NASDAQ Capital Market.

Fiscal 2017	High	Low	Fiscal 2016	High	Low
First Quarter (Sep. 30)	$5.42	$2.75	First Quarter (Sep. 30)	$16.44	$10.60
Second Quarter (Dec. 31)	$3.90	$2.52	Second Quarter (Dec. 31)	$12.40	$3.64
Third Quarter (Mar. 31)	$3.67	$2.75	Third Quarter (Mar. 31)	$6.20	$2.12
Fourth Quarter (June 30)	$3.28	$2.94	Fourth Quarter (June 30)	$4.01	$1.91

We have not paid cash dividends on our common stock and do not intend to pay a cash dividend in the foreseeable future. There were approximately 206 stockholders of record on June 30, 2017 (not including street name holders).

During the fiscal year ended June 30, 2017, we engaged in deemed repurchases of 47,024 shares of our common stock as a result of permitting holders of restricted stock unit awards under our equity plans to surrender shares issuable pursuant to such awards in order to satisfy tax withholding obligations.

ITEM 6.     SELECTED FINANCIAL DATA

Not applicable for Smaller Reporting Companies.

ITEM 7.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained in this section and other parts of this annual report on Form 10-K which are not historical facts are forward looking statements and are subject to certain risks and uncertainties. Our actual results may differ significantly from the projected results discussed in the forward looking statements. Factors that might affect actual results include, but are not limited to, those discussed in ITEM 1A “RISK FACTORS” and other factors identified from time to time in our reports filed with the SEC. The following discussion should be read in conjunction with our consolidated financial statements contained in this report.

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Overview

Cesca is a regenerative medicine company that develops, commercializes and markets a range of automated technologies for cell-based therapeutics. Cesca’s device division provides a full suite of solutions for automated clinical biobanking, point-of-care applications, and automation for immuno-oncology. Cesca is also leveraging its proprietary AutoXpress^® technology platform to develop autologous stem cell-based therapies that address significant unmet needs in the vascular, cardiology and orthopedic markets.

On July 7, 2017, our wholly-owned subsidiary, ThermoGenesis Corp. (“ThermoGenesis”), acquired the business and substantially all of the assets of SynGen, a privately held Sacramento, California-based technology company that develops, markets, and sells advanced cell separation tools and accessories. In the transaction (the “SynGen Transaction”), ThermoGenesis acquired substantially all of SynGen’s operating assets, including its proprietary cell processing platform. In exchange, ThermoGenesis issued to SynGen shares of ThermoGenesis common stock that, after giving effect to the issuance, constitute 20% of ThermoGenesis’ outstanding common shares, and ThermoGenesis also made a one-time cash payment of $1.0 million to SynGen. Immediately prior to the SynGen Transaction, the Company contributed the assets, business, and current liabilities of its blood and bone-marrow processing device business to ThermoGenesis and will operate such business (together with the acquired business) through the ThermoGenesis subsidiary.

Prior to the SynGen Transaction, Cesca’s device business was owned and operated directly by Cesca, and from and after the SynGen Transaction, Cesca’s device business (together with the business acquired from SynGen) is and will be owned and operated by ThermoGenesis.

In August 2017, our Board of Directors approved changing our fiscal year from June 30 to a calendar year ending December 31. As a result, we will file a transition report on Form 10-K for the six month period ending December 31, 2017. Prior to filing the transition report, we will file a quarterly report on Form 10-Q for the quarter ending September 30, 2017.

Cesca’s Device Division- ThermoGenesis Corp.

ThermoGenesis Corp. (“ThermoGenesis”), a wholly owned subsidiary of the Company that owns and operates the Company’s device division, is a pioneer and market leader in the development and commercialization of automated technologies for cell-based therapeutics and bio-processing. The Device segment’s automated solution offerings include:

Clinical BioBanking

AXP^® + BioArchive^® provide automated isolation, collection and storage of cord blood stem cell concentrates.

Point-of-Care Solutions for Cell-Based Therapeutics

PXP^™ allows for the rapid, automated processing of autologous peripheral or bone marrow derived stem cells at the point-of-care, such as surgical centers or clinics.

Cellular Processing for Immuno-Oncology Applications

CXP^™ + BioArchive^® allow for the automated manufacturing, expansion and storage of cellular therapies for immuno-oncology, including various T-cell and nature killer (NK) cell based therapies.

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The Device Segment’s product pipeline includes:

● AutoXpress^® System (AXP^®) - a proprietary, automated system for the isolation and collection of hematopoietic stem cells from cord blood and peripheral blood.

● PXP™ for Point-of-Care Applications – a proprietary, automated system for the rapid, automated processing of autologous peripheral or bone marrow derived stem cells for cell-based therapies at point-of-care situations, such as surgical centers or clinics.

● CAR-TXpress (CXP^™) - a proprietary, automated system for the isolation and collection of cells derived from biological sources, for various laboratory based downstream applications.

● BioArchive^® - an automated, cryogenic system used by cord blood banks for the cryopreservation and storage of cord blood stem cell concentrate for future use.

Cesca’s Clinical Development Division

Using its proprietary AutoXpress^® technology platform, Cesca is developing autologous (utilizing the patient’s own cells) stem cell-based therapeutics that Cesca believes will address significant unmet medical needs for applications within the vascular, cardiology and orthopedic markets.   

Vascular Diseases - Critical Limb Ischemia (“CLI”) – Cesca is currently in late stage development of its proprietary, point-of-care, autologous stem cell-based therapeutic for the treatment of patients with CLI. The Company’s 362 patient, multi-center pivotal Phase III Critical Limb Ischemia Rapid Stem Cell Treatment (“CLIRST”) trial is designed to evaluate the safety and efficacy of autologous stem cell-based therapy to stimulate the regeneration of blood vessels, promote wound healing and prevent amputation. Previous clinical studies using Cesca’s proprietary, point-of-care-technologies have successfully demonstrated the regeneration of blood vessels and improved blood circulation in the limbs, using a patient’s own bone marrow derived stem cells. The Company is actively seeking strategic partners to co-develop CLIRST.

Cardiology - Acute Myocardial Infarction – Cesca is developing a proprietary, point-of-care autologous stem cell-based therapy intended as an adjunct treatment for patients who have suffered an acute ST-elevated myocardial infarction (“STEMI”), the most serious type of heart attack. Such treatments are aimed at minimizing the adverse remodeling of the heart post-STEMI.

Orthopedics – OsteoArthritis (OA) - Cesca is in early stage development of an autologous stem cell based therapy intended to treat patients with cartilage tissue degeneration that may lead to progressive cartilage loss and painful joint diseases. Localized articular cartilage defects can potentially be repaired by transplantation of autologous cell therapy. Therapies in development using Cesca’s proprietary PXP™ system are expected to delay further deterioration and repair the damaged joint cartilage. Treatment is typically via a single procedure in the hospital or clinic.

Results of Operations

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

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Results of Operations for the Fiscal Year Ended June 30, 2017 versus the Fiscal Year Ended June 30, 2016

Net Revenues

Consolidated net revenues for 2017 were $14,525,000 compared to $11,929,000 for 2016, an increase of $2,596,000. Device segment revenues increased primarily as a result of increased shipments of AXP disposables to a single end-user customer and distributors in China and Europe. Also, contributing to the increase, we shipped three BioArchive devices during the year ended June 30, 2017 versus one during the year ended June 30, 2016. Clinical development revenues consist of sales generated by our Totipotent subsidiaries. The decrease is due to the loss of their largest manual bag set customer.

Revenues were comprised of the following for the years ended:

	June 30, 2017		June 30, 2016
Device Segment:
AXP	$	8,715,000	$	6,924,000
BioArchive		3,318,000		2,465,000
Manual Disposables		1,034,000		1,203,000
Bone Marrow		582,000		341,000
Other		384,000		350,000
		14,033,000		11,283,000
Clinical Development Segment:
Manual disposables		161,000		305,000
Bone Marrow		163,000		117,000
Other		168,000		224,000
		492,000		646,000
	$	14,525,000	$	11,929,000

Gross Profit

Consolidated gross profit was $5,839,000 or 40% of revenues for 2017 compared to $2,744,000 or 23% of revenues for 2016. Our device segment gross profit margin increased from $2,672,000 or 24% to $5,813,000 or 41% for fiscal 2016 to fiscal 2017 primarily due to higher average sales prices on our mix of products sold and a reduction in our overhead costs during the year ended June 30, 2017. Additionally, in the prior year, there was an increase to our inventory reserves and a provision for expected losses on non-cancelable purchase commitments. Gross profit for our clinical segment decreased from $72,000 or 11 % to $26,000 or 5% due to product mix and lower sales volumes.

Sales and Marketing Expenses

Consolidated sales and marketing expenses were $1,531,000 for 2017, compared to $2,148,000 for 2016, a decrease of $617,000 or 29%. The decrease is driven primarily by our device segment and is due to lower personnel costs during the year ended June 30, 2017 due to reorganizing the sales and marketing function in September 2016. Our clinical segment had an increase of $49,000 for 2017, due to higher costs related to our cord blood bank marketing in India.

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Research and Development Expenses

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

Consolidated research and development expenses for 2017, were $2,497,000 compared to $3,230,000 for 2016, a decrease of $733,000 or 23%. The decrease was primarily due to lower salaries and benefits in the clinical development segment of approximately $500,000 due to a decrease in headcount and a reduction in rent expense in the clinical development segment of approximately $350,000 associated with the consolidation of our US operations into our Rancho Cordova facility. Research and development expenses are expected to increase when the Company initiates additional clinical trials which the Company intends to fund through strategic partnerships.

General and Administrative Expenses

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

Consolidated general and administrative expenses were $11,051,000 for 2017, compared to $8,231,000 for 2016, an increase of $2,510,000 or 30%. The increase is primarily due to the termination of our former Chief Executive Officer in November 2016 and our former Chief Financial Officer in March 2017 which resulted in $2,200,000 of expense for severance and acceleration of stock options and restricted stock units. Additionally, legal expenses increased $1.1 million largely as a result of attorney fees associated with the SynGen litigation, which was settled on July 7, 2017. These expenses were allocated among both of our segments.

Interest Expense

The increase in interest expense from $1,864,000 for the year ended June 30, 2016 to $10,668,000 for the year ended June 30, 2017 was primarily due to the conversion in the first quarter of fiscal 2017 of all outstanding principal and non-cash interest accrued and otherwise payable under the debentures of $7,379,000 and additional non-cash interest expense of $3,153,000 recorded based on the fair market value of the common stock issued upon conversion.

Benefit for Income Taxes

The deferred income tax benefit of $673,000 is due to changes in the state tax rate over the last several years. Approximately $559,000 of the benefit relates to state rate changes prior to fiscal 2017, which was all recognized in the current year, of which $157,000 relates to fiscal 2016 and $402,000 relates to years prior to fiscal 2016.

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 Company defines adjusted EBITDA as loss from operations and before other income (expenses) adjusted for non-cash items that impact operations, including depreciation and amortization, stock-based compensation expenses and impairment of intangible assets. 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 US GAAP measure are provided below.

	For the Year Ended June 30, 2017
	Clinical Development			Device			Total
Loss from operations	$	(8,940,000	)	$	(300,000	)	$	(9,240,000	)
Add:
Depreciation andamortization		501,000			329,000			830,000
Stock-based compensation expense		970,000			491,000			1,461,000
Impairment of intangible asset		310,000			--			310,000
Adjusted EBITDA	$	(7,159,000	)	$	520,000		$	(6,639,000	)

	For the Year Ended June 30, 2016
	Clinical Development			Device			Total
Loss from operations	$	(8,240,000	)	$	(2,625,000	)	$	(10,865,000	)
Add:
Depreciation andamortization		644,000			524,000			1,168,000
Stock-based compensation expense		548,000			194,000			742,000
Adjusted EBITDA	$	(7,048,000	)	$	(1,907,000	)	$	(8,955,000	)

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Adjusted EBITDA

Our consolidated adjusted EBITDA loss was $6,639,000 for 2017, compared to $8,955,000 for 2016. The reduction in the adjusted EBITDA loss was due primarily to our higher revenues and resulting higher gross profit margin.

Liquidity and Capital Resources

At June 30, 2017, we had cash and cash equivalents of $3,623,000 and working capital of $6,658,000. This compared to cash and cash equivalents of $5,835,000 and working capital of $7,301,000 at June 30, 2016. We have primarily financed operations through private and public placement of equity securities and our line of credit facility.

On March 6, 2017, Cesca entered into a Credit Agreement with Boyalife Investment Fund II, Inc. (the “Lender”) which grants to the Company the right to borrow up to $5,000,000 in amounts of $500,000 per advance on an unsecured basis at any time prior to March 6, 2022. On September 13, 2017, we entered into an amendment to the Credit Agreement with the Lender increasing our maximum borrowing availability thereunder from $5.0 million to $10.0 million. As of September 20, 2017 the Company had drawn down $5,000,000 of the $10,000,000 available under the Credit Agreement.

On August 22, 2016, the Company elected to convert all outstanding principal and interest accrued and otherwise payable under the Company’s Secured Convertible Debentures aggregating $23,905,000 dating back to Cesca’s February 2016 financing. Upon conversion, 6,102,941 shares of common stock were issued and the debentures plus all related security interests and liens were terminated.

On August 3, 2016, the Company sold 600,000 shares of common stock at a price of $4.10 per share. 

The net proceeds to the Company from the sale and issuance of the shares, after deducting the offering expenses borne by the Company, were $2,092,000.

In February 2016 in exchange for aggregate proceeds of $15 million, the Company sold and issued to Boyalife Investment Inc. and Boyalife (Hong Kong) Limited (i) 735,294 shares of common stock at a purchase price of $3.40 per share (the “Stock Price”) for gross proceeds of $2.5 million, (ii) Secured Convertible Debentures for $12.5 million (the “Debentures”) convertible into 3,676,471 shares of common stock and (iii) warrants to purchase 3,529,412 additional shares of common stock at an exercise price of $8.00 per share for a period of five years.

On August 31, 2015, the Company sold senior secured convertible debentures in a financing to raise up to $15,000,000 (“Thirty-Year Debentures”), Series A warrants to purchase up to 1,102,942 shares of the Company’s common stock at an exercise price equal to $13.60 per share for a period of five and one-half years (“Series A warrants”) and Series B warrants to purchase up to 606,618 shares of the Company’s common stock at an exercise price equal to $13.60 per share for a period of eighteen months (“Series B warrants”). At the initial closing on August 31, 2015, the Company received gross proceeds of $5,500,000 and 404,412 Series A warrants vested and 222,427 Series B warrants vested. The second closing for up to an additional $9,500,000 was dependent on a number of items including receipt by the Company of approval from the California Institute for Regenerative Medicine (“CIRM”) for a grant in the amount of $10,000,000 to support the Company’s pivotal trial for CLIRST III. The Company applied for the CIRM grant in August 2015. However, the Company withdrew its application for the CIRM grant.

In connection with the February 2016 financing transaction described above, the Company concurrently entered into a Consent, Repayment and Release Agreement, pursuant to which the Company repaid the Thirty-Year Debentures and all related interest and liquidated damages. Upon the Company’s payment of $7.5 million, the Thirty-Year Debentures were deemed repaid in full and cancelled, all liquidated damages due and payable were deemed paid and satisfied in full, the registration rights agreement was terminated and the exercise price of the Series A warrants was changed from $13.60 to $8.00. 

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Our net cash used in operating activities for the year ended June 30, 2017 was $7,215,000 compared to $9,625,000 for the year ended June 30, 2016. The improvement in net cash used in operating activities was primarily due to the higher revenue volume and a higher gross profit margin on our mix of products sold.

Based upon the additional funds available to draw down under the amended Credit Agreement, the Company’s cash balance, historical trends, expected outflows and projections for revenues, management believes it will have sufficient cash to provide for its projected needs to maintain operations and working capital requirements for at least the next 12 months from the date of filing this annual report.

The Company will need additional funding to support its operations and its clinical development programs, in particular the Phase III Critical Limb Ischemia Rapid Stem Cell Treatment (“CLIRST III”) trial. Accordingly, management has been exploring additional funding sources, with a primary focus on strategic partner relationships. The Company cannot assure that such funding will be available on a timely basis, in needed quantities, or on favorable terms, if at all.

On July 7, 2017, the Company entered into a transaction in which its wholly owned subsidiary, ThermoGenesis, acquired the business and substantially all of the assets of SynGen Inc. (“SynGen”), a privately held Sacramento, California-based technology company that develops, markets, and sells advanced cell separation tools and accessories. In the transaction (the “SynGen Transaction”), ThermoGenesis acquired substantially all of SynGen’s operating assets, including its proprietary cell processing platform. In exchange, ThermoGenesis issued to SynGen shares of ThermoGenesis common stock that, after giving effect to the issuance, constitute 20% of ThermoGenesis’ outstanding common shares, and ThermoGenesis also made a one-time cash payment of $1.0 million to SynGen (together with the issuance of common stock, the “Transaction Consideration”).

Our ability to fund our longer-term cash needs is subject to various risks, many of which are beyond our control. Should we require additional funding, we may need to raise the required additional funds through bank borrowings or public or private sales of debt or equity securities. We cannot guarantee that such funding will be available on a timely basis, in needed quantities or on terms favorable to us, if at all (see Part I Item 1A – Risk Factors).

We generally do not require extensive capital equipment to produce or sell our current cord blood banking products. In fiscal 2017 we spent $375,000 primarily for equipment to be used in our proposed clinical trials and improvements to our clinical laboratory in Rancho Cordova as a result of closing the Emeryville location. In fiscal 2016 we spent $710,000 primarily for tooling at a contract manufacturer and equipment to be used in our Point-of-Care development program.

At June 30, 2017, we had a distributor that accounted for 36% of accounts receivable. At June 30, 2016, we had three distributors/customers that accounted for 57% of accounts receivable.

Revenues from a customer totaled $3,263,000 or 22% and $2,475,000 or 21% for the years ended June 30, 2017 and 2016, respectively. Revenues from one distributor totaled $2,842,000 or 20% and $2,797,000 or 23% of net revenues for the years ended June 30, 2017 and 2016, respectively.

We manage the concentration of credit risk with these customers through a variety of methods including, letters of credit with financial institutions, pre-shipment deposits, credit reference checks and credit limits. Although management believes that these customers are sound and creditworthy, a severe adverse impact on their business operations could have a corresponding material effect on their ability to pay timely and therefore on our net revenues, cash flows and financial condition.

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Critical Accounting Policies

The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to stock-based compensation, depreciation, fair values of intangibles and goodwill, bad debts, inventories, warranties, contingencies and litigation. 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.

We believe the following critical accounting policies affect the more significant judgments and estimates used by the Company in the preparation of its consolidated financial statements.

Goodwill, Intangible Assets and Impairment Assessments

Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Intangible assets that are not considered to have an indefinite useful life are amortized over their useful lives, which generally range from three to ten years. Clinical protocols are not expected to provide economic benefit until they are introduced to the marketplace or licensed to an independent entity. Each period we evaluate the estimated remaining useful lives of purchased intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization.

The carrying amounts of these assets are periodically reviewed for impairment (at least annually) and whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. According to ASC 350, Intangibles-Goodwill and Other, for goodwill and indefinite-lived intangible assets, we can opt to perform a qualitative assessment or a quantitative assessment; however, if the qualitative assessment determines that it is more likely than not (i.e., a likelihood of more than 50 percent) the fair value is less than the carrying amount, a quantitative assessment must be performed. If the quantitative assessment determines that the fair value is less than the carrying amount, an impairment loss equal to the difference would be recorded.

Revenue Recognition

Revenues from the sale of our products 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 consolidated balance sheet.

There is no right of return provided for distributors or customers. 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 (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.

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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.

Stock-Based Compensation

We use the Black-Scholes-Merton option-pricing formula in determining the fair value of our options at the grant date and apply judgment in estimating the key assumptions that are critical to the model such as the expected term, volatility and forfeiture rate of an option. Our estimate of these key assumptions is based on historical information and judgment regarding market factors and trends. If any of the key assumptions change significantly, stock-based compensation expense for new awards may differ materially in the future from that recorded in the current period. The compensation expense is then amortized over the vesting period.

Income Taxes 

Our estimates of income taxes and the significant items resulting in the recognition of deferred tax assets and liabilities reflect our assessment of future tax consequences of transactions that have been reflected in the financial statements or tax returns for each taxing jurisdiction in which we operate.  We base our provision for income taxes on our current period results of operations, changes in deferred income tax assets and liabilities, income tax rates, and changes in estimates of uncertain tax positions in the jurisdictions in which we operate.  We recognize deferred tax assets and liabilities when there are temporary differences between the financial reporting basis and tax basis of assets and liabilities and for the expected benefits of using net operating loss and tax credit loss carryforwards.  We establish valuation allowances when necessary to reduce the carrying amount of deferred income tax assets to the amounts that we believe are more likely than not to be realized. We evaluate the need to retain all or a portion of the valuation allowance on recorded deferred tax assets.  When a change in the tax rate or tax law has an impact on deferred taxes, we apply the change based on the years in which the temporary differences are expected to reverse.  As we operate in more than one state, changes in the state apportionment factors, based on operational results, may affect future effective tax rates and the value of recorded deferred tax assets and liabilities.  We record a change in tax rates in the consolidated financial statements in the period of enactment.

Income tax consequences that arise in connection with a business combination include identifying the tax basis of assets and liabilities acquired and any contingencies associated with uncertain tax positions assumed or resulting from the business combination.  Deferred tax assets and liabilities related to temporary differences of an acquired entity are recorded as of the date of the business combination and are based on our estimate of the appropriate tax basis that will be accepted by the various taxing authorities and its determination as to whether any of the acquired deferred tax liabilities could be a source of taxable income to realize our pre-existing deferred tax assets.

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Inventory Valuation

We state inventories at lower of cost or market value determined on a first-in, first-out basis. We provide write-downs of inventory when conditions indicate that the selling price could be less than cost due to physical deterioration, obsolescence, changes in price levels, or other causes, which it includes as a component of cost of revenues. Additionally, we provide valuation allowances for excess and slow-moving inventory on hand that are not expected to be sold to reduce the carrying amount of slow-moving inventory to its estimated net realizable value. The valuation allowances are based upon estimates about future demand from our customers and distributors and market conditions. Because some of our products are highly dependent on government and third-party funding, current customer use and validation, and completion of regulatory and field trials, there is a risk that we will forecast incorrectly and purchase or produce excess inventories. As a result, actual demand may differ from forecasts and we may be required to record additional inventory valuation allowances that could adversely impact our gross margins. Conversely, favorable changes in demand could result in higher gross margins when those products are sold.

Warranty

We provide for the estimated cost of product warranties at the time revenue is recognized. While we engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers, our warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from our estimates, revisions to the estimated warranty liability could have a material impact on our financial position, cash flows or results of operations.

Recent Accounting Standards

See footnote 2 “Summary of Significant Accounting Policies”.

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements.

ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 8.        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

	Page Number
Report of Independent Registered Public Accounting Firm	37
Consolidated Balance Sheets at June 30, 2017 and 2016	38
Consolidated Statements of Operations and Comprehensive Loss for the years ended June 30, 2017 and 2016	39
Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2017 and 2016	40
Consolidated Statements of Cash Flows for the years ended June 30, 2017 and 2016	41
Notes to Consolidated Financial Statements	42

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Audit Committee of the

Board of Directors and Shareholders

of Cesca Therapeutics, Inc.

We have audited the accompanying consolidated balance sheets of Cesca Therapeutics, Inc. (the “Company”) as of June 30, 2017 and 2016, and the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cesca Therapeutics, Inc., as of June 30, 2017 and 2016, and the consolidated results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Marcum llp

Marcum llp

New York, NY

September 21, 2017

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Cesca Therapeutics Inc.

Consolidated Balance Sheets

	June 30, 2017			June 30, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	3,623,000		$	5,835,000
Accounts receivable, net of allowance for doubtful accounts of $102,000 ($49,000 at June 30, 2016)		3,701,000			3,169,000
Inventories, net of reserves of $1,230,000 ($1,437,000 at June 30, 2016)		3,617,000			3,593,000
Prepaid expenses and other current assets		237,000			246,000
Total current assets		11,178,000			12,843,000
Equipment, net		2,330,000			2,962,000
Goodwill		13,195,000			13,195,000
Intangible assets, net		20,165,000			20,821,000
Other assets		64,000			78,000
Total assets	$	46,932,000		$	49,899,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,601,000		$	2,648,000
Accrued payroll and related expenses		385,000			449,000
Deferred revenue		597,000			783,000
Related party payable		606,000			--
Other current liabilities		1,331,000			1,662,000
Total current liabilities		4,520,000			5,542,000
Long term debt-related party		3,500,000			--
Derivative obligations		730,000			670,000
Convertible debentures, net		--			2,489,000
Noncurrent deferred tax liability		6,968,000			7,641,000
Other noncurrent liabilities		377,000			1,284,000
Total liabilities		16,095,000			17,626,000
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 2,000,000 shares authorized, none issued and outstanding at June 30, 2017 and 2016		--			--
Common stock, $0.001 par value; 350,000,000 shares authorized; 9,915,868 issued and outstanding (3,010,687 at June 30, 2016)		10,000			3,000
Paid in capital in excess of par		216,222,000			188,569,000
Accumulated deficit		(185,357,000	)		(156,262,000	)
Accumulated other comprehensive loss		(38,000	)		(37,000	)
Total stockholders’ equity		30,837,000			32,273,000
Total liabilities and stockholders’ equity	$	46,932,000		$	49,899,000

See accompanying notes to consolidated financial statements.

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Cesca Therapeutics Inc.

Consolidated Statements of Operations and Comprehensive loss

	For the years ended June 30
	2017			2016
Net revenues	$	14,525,000		$	11,929,000
Cost of revenues		8,686,000			9,185,000
Gross profit		5,839,000			2,744,000
Expenses:
Sales and marketing		1,531,000			2,148,000
Research and development		2,497,000			3,230,000
General and administrative		11,051,000			8,231,000
Total operating expenses		15,079,000			13,609,000
Loss from operations		(9,240,000	)		(10,865,000	)
Other income (expense):
Interest expense		(10,668,000	)		(1,864,000	)
Amortization of debt discount		(9,851,000	)		(6,127,000	)
Fair value change of derivative instruments		(60,000	)		3,395,000
Registration rights liquidated damages		--			(1,100,000	)
Loss on cashless exercise of warrants		--			(1,039,000	)
Loss on extinguishment of debt		--			(795,000	)
Loss on modification of Series A warrants		--			(149,000	)
Other income and (expenses)		51,000			(44,000	)
Total other income (expense)		(20,528,000	)		(7,723,000	)
Loss before benefit for income taxes		(29,768,000	)		(18,588,000	)
Benefit for income taxes		673,000			--
Net loss	$	(29,095,000	)	$	(18,588,000	)
COMPREHENSIVE LOSS
Net loss	$	(29,095,000	)	$	(18,588,000	)
Other comprehensive loss:
Foreign currency translation adjustments		(1,000	)		(32,000	)
Comprehensive loss	$	(29,096,000	)	$	(18,620,000	)
Per share data:
Basic and diluted net loss per common share	$	(3.27	)	$	(7.57	)
Weighted average common shares outstanding – Basic and diluted		8,904,508			2,455,548

See accompanying notes to consolidated financial statements.

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Cesca Therapeutics Inc.

Consolidated Statements of Stockholders' Equity

	Common Stock				Paid in capital in excess of		Accumulated			Accumulated other comprehensive			Total stockholders’
	Shares		Amount		par		deficit			loss			equity
Balance at June 30, 2015		2,027,386	$	2,000	$	172,579,000	$	(137,674,000	)	$	(5,000	)	$	34,902,000
Stock-based compensation expense, net of stock surrenders		11,577		--		710,000		--			--			710,000
Discount due to beneficial conversion features		--		--		7,262,000		--			--			7,262,000
Discount due to warrants		--		--		4,434,000		--			--			4,434,000
Issuance of common shares and warrants in financing		735,294		1,000		2,463,000		--			--			2,464,000
Issuance of common shares for exercise of Series B warrants		231,710		--		1,097,000		--			--			1,097,000
Common stock issued to directors in lieu of cash compensation		4,720		--		24,000		--			--			24,000
Foreign currency translation		--		--		--		--			(32,000	)		(32,000	)
Net loss		--		--		--		(18,588,000	)		--			(18,588,000	)
Balance at June 30, 2016		3,010,687		3,000		188,569,000		(156,262,000	)		(37,000	)		32,273,000
Stock-based compensation expense, net of stock surrenders		125,368		--		1,445,000		--			--			1,445,000
Shares issued upon debt conversion		6,102,941		6,000		23,897,000		--			--			23,903,000
Issuance of common shares in financing, net of offering costs		600,000		1,000		2,091,000		--			--			2,092,000
Common stock issued to directors in lieu of cash compensation		5,463		--		16,000		--			--			16,000
Common stock issued to employees for prior year bonus		71,409		--		204,000		--			--			204,000
Foreign currency translation		--		--		--		--			(1,000	)		(1,000	)
Net Loss		--		--		--		(29,095,000	)		--			(29,095,000	)
Balance at June 30, 2017		9,915,868	$	10,000	$	216,222,000	$	(185,357,000	)	$	(38,000	)	$	30,837,000

See accompanying notes to consolidated financial statements.

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Cesca Therapeutics Inc.

Consolidated Statements of Cash Flows

	Years ended June 30,
	2017			2016
Cash flows from operating activities:
Net loss	$	(29,095,000	)	$	(18,588,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		830,000			1,168,000
Stock-based compensation expense		1,461,000			742,000
(Recovery of) reserve for excess and slow-moving inventories		(203,000	)		566,000
Amortization of debt discount		9,851,000			6,127,000
Amortization of debt issue costs		160,000			800,000
Change in fair value of derivative		60,000			(3,395,000	)
Deferred income tax benefit		(673,000	)		--
Non-cash accrued interest		10,373,000			1,031,000
Loss on disposal of equipment		176,000			--
Impairment of intangible asset		310,000			--
Loss on cashless exercise of warrants		--			1,039,000
Loss on extinguishment of debt		--			795,000
Loss on modification of Series A warrants		--			149,000
Net changes in operating assets and liabilities:
Accounts receivable		(522,000	)		1,956,000
Inventories		615,000			375,000
Prepaid expenses and other assets		24,000			(86,000	)
Accounts payable		(1,062,000	)		(2,420,000	)
Related party payable		606,000			--
Accrued payroll and related expenses		(63,000	)		(256,000	)
Deferred revenue		(187,000	)		148,000
Other current liabilities		26,000			160,000
Other noncurrent liabilities		98,000			64,000
Net cash (used in) operating activities		(7,215,000	)		(9,625,000	)
Cash flows from investing activities:
Capital expenditures		(375,000	)		(710,000	)
Net cash (used in) investing activities		(375,000	)		(710,000	)
Cash flows from financing activities:
Gross proceeds from convertible debentures		--			18,000,000
Proceeds from long term debt-related party		3,500,000			--
Payment of financing cost – convertible debentures		--			(961,000	)
Repayment of convertible debentures		--			(6,444,000	)
Payment to extinguish derivative obligations		--			(159,000	)
Payments on capital lease obligations		(84,000	)		(67,000	)
Proceeds from issuance of common stock, net		2,092,000			2,463,000
Repurchase of common stock		(134,000	)		(8,000	)
Net cash provided by financing activities		5,374,000			12,824,000
Effects of foreign currency rate changes on cash and cash equivalents		4,000			(11,000	)
Net (decrease)increase in cash and cash equivalents		(2,212,000	)		2,478,000
Cash and cash equivalents at beginning of year		5,835,000			3,357,000
Cash and cash equivalents at end of year	$	3,623,000		$	5,835,000
Supplemental non-cash financing and investing information:
Common stock issued for payment of convertible debenture and interest	$	23,903,000			--
Transfer of equipment to inventories	$	625,000			--
Derivative obligation related to issuance of warrants		--		$	4,282,000
Retirement of equipment		--		$	1,109,000

See accompanying notes to consolidated financial statements.

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Cesca Therapeutics Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Description of Business and Basis of Presentation

Organization and Basis of Presentation

Cesca Therapeutics Inc. (the “Company” or “Cesca”) develops and markets integrated cellular therapies and delivery systems that advance the safe and effective practice of regenerative medicine. Cesca’s product pipeline includes automated blood and bone marrow processing systems that enable the separation, processing and preservation of cell and tissue therapy products.

On March 4, 2016, the Company effected a one (1) for twenty (20) reverse split of its issued and outstanding common stock. There were no changes to its authorized number of shares of common stock of 350,000,000.

Liquidity

On July 7, 2017, the Company, thru its wholly-owned subsidiary, ThermoGenesis, acquired the business and substantially all of the assets of SynGen Inc. (“SynGen”). In exchange, ThermoGenesis issued to SynGen shares of ThermoGenesis common stock that, after giving effect to the issuance, constitute 20% of ThermoGenesis’ outstanding common shares, and ThermoGenesis also made a one-time cash payment of $1.0 million to SynGen. (Refer to Note 14).

On March 6, 2017, the Company entered into a Revolving Credit Agreement (“Credit Agreement”) with Boyalife Investment Fund II, Inc. (the “Lender”) (Refer to Note 5). As of June 30, 2017, the Company had drawn down $3,500,000 of the $5,000,000 available under the Credit Agreement. The Company has drawn down an additional $1,500,000 subsequent to June 30, 2017 and through the date of this report.Boyalife Investment Fund II, Inc. is a wholly owned subsidiary of Boyalife Group Inc., which is owned and controlled by the Company’s Chief Executive Officer and Chairman of the Board. On September 13, 2017, the Company entered into an amendment to the Revolving Credit Agreement with the Lender to increase the Company’s maximum borrowing availability thereunder from $5.0 million to $10.0 million.

On August 22, 2016, the Company elected to convert all outstanding principal and interest accrued and otherwise payable under February 2016 debentures aggregating $23,903,000 dating back to Cesca’s February 2016 financing. Upon conversion, 6,102,941 shares of common stock were issued and the Debentures plus all related security interests and liens were terminated.

On August 3, 2016, the Company sold 600,000 shares of common stock at a price of $4.10 per share. 

The net proceeds to the Company from the sale and issuance of the shares, after deducting the offering expenses borne by the Company, were $2,092,000.

At June 30, 2017, the Company had cash and cash equivalents of $3,623,000 and working capital of $6,658,000. The Company has incurred recurring operating losses and as of June 30, 2017 had an accumulated deficit of $185,357,000. The Company anticipates requiring additional capital in order to grow the Device business, initiate the Phase III Critical Limb Ischemia trial, to fund other operating expenses and to make interest payments on the line of credit with Boyalife. These conditions raised substantial doubt about the Company’s ability to meet its obligations. To alleviate the substantial doubt, management plans to use existing cash and cash equivalents balances, revenue generating activities and draw down on the available balance from the line of credit. Other sources of liquidity could include additional potential issuances of debt or equity securities in public or private financings and strategic partnerships.

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1.     Description of Business and Basis of Presentation (Continued)

Liquidity (Continued)

Based upon the additional funds available to draw down under the amended Credit Agreement, the Company’s cash balance, historical trends, expected outflows and projections for revenues, management believes it will have sufficient cash to provide for its projected needs to maintain operations and working capital requirements for at least the next 12 months from the date of filing this annual report.

Principles of Consolidation

The consolidated financial statements include the accounts of Cesca Therapeutics Inc. and its wholly owned subsidiaries, ThermoGenesis Corp. (“ThermoGenesis”), TotipotentRX Cell Therapy, Pvt. Ltd. and TotipotentSC Scientific Product Pvt. Ltd. All significant intercompany accounts and transactions have been eliminated upon consolidation. After completion of the acquisition of SynGen by ThermoGenesis on July 7, 2017, ThermoGenesis was no longer a wholly owned subsidiary of the Company.

2.     Summary of Significant Accounting Policies

Use of Estimates

Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but not limited to, the allowance for doubtful accounts, slow-moving inventory reserves, depreciation, warranty costs, assumptions made in valuing equity instruments issued for services or acquisitions, deferred income taxes and related valuation allowance and the fair values of intangibles and goodwill. Actual results could materially differ from the estimates and assumptions used in the preparation of the Company’s consolidated financial statements. Events subsequent to the balance sheet date have been evaluated for inclusion in the accompanying consolidated financial statements through the date of issuance.

Revenue Recognition

Revenues from the sale of the Company’s 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. The Company generally ships 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.     Summary of Significant Accounting Policies (Continued)

Revenue Recognition (Continued)

The Company’s sales are generally through distributors. There is no right of return provided for distributors. For sales of products made to distributors, the Company considers 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’s history of adhering to the terms of its contractual arrangements with the Company, the level of inventories maintained by the distributor, whether the Company has 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. The Company currently recognizes revenue primarily on the sell-in method with its 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. The Company accounts 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.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company’s cash is maintained in checking accounts, money market funds and certificates of deposits with reputable financial institutions that may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation. The Company has cash and cash equivalents of $46,000 and $104,000 at June 30, 2017 and 2016, respectively in India. The Company has not experienced any realized losses on the Company’s deposits of cash and cash equivalents.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.     Summary of Significant Accounting Policies (Continued)

Foreign Currency Translation

The Company’s reporting currency is the US dollar. The functional currency of the Company’s subsidiaries in India is the Indian rupee (INR). Assets and liabilities are translated into US dollars at period end exchange rates. Revenue and expenses are translated at average rates of exchange prevailing during the periods presented. Cash flows are also translated at average exchange rates for the period, therefore, amounts reported on the consolidated statement of cash flows do not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. Equity accounts other than retained earnings are translated at the historic exchange rate on the date of investment. A translation loss of $1,000 and $32,000 was recorded for the years ended June 30, 2017 and 2016, respectively, as a component of other comprehensive income.

Goodwill, Intangible Assets and Impairment Assessments

Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Intangible assets that are not considered to have an indefinite useful life are amortized over their useful lives, which generally range from three to ten years. Clinical protocols are not expected to provide economic benefit until they are introduced to the marketplace or licensed to an independent entity. Each period the Company evaluates the estimated remaining useful lives of purchased intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization.

For goodwill and indefinite-lived intangible assets (clinical protocols), the carrying amounts are periodically reviewed for impairment (at least annually) and whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. According to Accounting Standard Codification (“ASC”) 350, Intangibles-Goodwill and Other, the Company can opt to perform a qualitative assessment or a quantitative assessment; however, if the qualitative assessment determines that it is more likely than not (i.e., a likelihood of more than 50 percent) the fair value is less than the carrying amount, a quantitative assessment must be performed. If the quantitative assessment determines that the fair value is less than the carrying amount, an impairment loss equal to the difference would be recorded.

The Company performed a quantitative assessment as of April 1, 2017 and performed a qualitative assessment through June 30, 2017 and computed a fair value based on a combination of the income approach and market approach, which determined that the fair value exceeded the carrying amount. Accordingly, there was no impairment of goodwill or the indefinite-lived intangible assets.

For the definite-lived intangible assets other than the covenants not to compete, there were no facts or changes in circumstances that indicated the carrying value may not be recoverable. As such, no assessment was required and there was no impairment of these assets. There was a $310,000 impairment of the covenants not to compete intangible assets during the year ended June 30, 2017 as the assumed revenues that were in the fair value estimate have been delayed due to the delay in the clinical trial.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.     Summary of Significant Accounting Policies (Continued)

Fair Value of Financial Instruments

In accordance with ASC 820, Fair Value Measurements and Disclosures, fair value is defined as the exit price, or the amount that would be received for the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date.

The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:

Level 1:	Quoted market prices in active markets for identical assets or liabilities.
Level 2:	Other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3:	Unobservable inputs reflecting the reporting entity’s own assumptions.

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short duration. The fair value of the Company’s derivative obligation liability is classified as Level 3 within the fair value hierarchy since the valuation model of the derivative obligation is based on unobservable inputs.

Accounts Receivable and Allowance for Doubtful Accounts

The Company’s receivables are recorded when billed and represent claims against third parties that will be settled in cash. The carrying value of the Company’s receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. The Company estimates the allowance for doubtful accounts based on historical collection trends, age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that a specific receivable balance may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. A customer’s receivable balance is considered past-due based on its contractual terms. Past-due receivable balances are written-off when the Company’s internal collection efforts have been unsuccessful in collecting the amount due.

Inventories

Inventories are stated at the lower of cost or market and include the cost of material, labor and manufacturing overhead. Cost is determined on the first-in, first-out basis. The Company writes-down inventory to its estimated net realizable value when conditions indicate that the selling price could be less than cost due to physical deterioration, obsolescence, changes in price levels, or other causes, which it includes as a component of cost of revenues. Additionally, the Company provides valuation allowances for excess and slow-moving inventory on hand that are not expected to be sold to reduce the carrying amount of slow-moving inventory to its estimated net realizable value. The valuation allowances are based upon estimates about future demand from its customers and distributors and market conditions. Because some of the Company’s products are highly dependent on government and third-party funding, current customer use and validation, and completion of regulatory and field trials, there is a risk that the Company will forecast incorrectly and purchase or produce excess inventories.

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2.     Summary of Significant Accounting Policies (Continued)

Inventories (Continued)

As a result, actual demand may differ from forecasts and the Company may be required to record additional inventory valuation allowances that could adversely impact its gross margins. Conversely, favorable changes in demand could result in higher gross margins when those products are sold.

Equipment, Net

Equipment consisting of office furniture, computer, machinery and equipment is recorded at cost less accumulated depreciation and amortization. Repairs and maintenance costs are expensed as incurred. Depreciation for office furniture, computer, machinery and equipment is computed under the straight-line method over the estimated useful lives. Leasehold improvements are amortized under the straight line method over their estimated useful lives or the remaining lease period, whichever is shorter. When equipment is sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and the impact of any resulting gain or loss is recognized within Other income and (expenses) in the consolidated statement of operations for the period.

Warranty

The Company provides for the estimated cost of product warranties at the time revenue is recognized. The Company’s warranty obligation is calculated based on estimated product failure rates, material usage and estimated service delivery costs incurred in correcting a product failure.

Debt Issue Costs

The Company amortizes debt issue costs to interest expense over the life of the associated debt instrument, using the straight-line method which approximates the interest rate method.

Debt Discount

The Company amortizes debt discount over the life of the associated debt instrument, using the straight-line method which approximates the interest rate method. Such amortized cost is included with the other income (expense) in the accompanying consolidated statements of operations.

Derivative Financial Instruments

In connection with the sale of convertible debt and equity instruments, the Company may also issue freestanding warrants. If freestanding warrants are issued and accounted for as derivative instrument liabilities (rather than as equity), the proceeds are first allocated to the fair value of those instruments. The remaining proceeds, if any, are then allocated to the convertible instrument, usually resulting in that instrument being recorded at a discount from its face amount. Derivative financial instruments are initially measured at their fair value using a Binomial Lattice Valuation Model and then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income.

Stock-Based Compensation

The Company has three stock-based compensation plans, which are described more fully in Note 9.

Valuation and Amortization Method – The Company estimates 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. The formula does not include a discount for post-vesting restrictions, as we have not issued awards with such restrictions.   

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.     Summary of Significant Accounting Policies (Continued)

Stock-Based Compensation (Continued)

Expected Term – For options which the Company has limited available data, the expected term of the option is based on the simplified method. This simplified method averages an award’s vesting term and its contractual term. For all other options, the Company's expected term represents the period that the Company's stock-based awards are expected to be outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior.

Expected Volatility – Expected volatility is based on historical volatility. Historical volatility is computed using daily pricing observations for recent periods that corresponded to the expected term of the options.

Expected Dividend – The Company has not declared dividends and does not anticipate declaring any dividends in the foreseeable future. Therefore, the Company uses a zero value for the expected dividend value factor to determine the fair value of options granted.

Risk-Free Interest Rate – The Company bases the risk-free interest rate used in the valuation method on the implied yield currently available on U.S. Treasury zero-coupon issues with the same expected term.

Estimated Forfeitures – When estimating forfeitures, the Company considers voluntary and involuntary termination behavior as well as analysis of actual option forfeitures.

Research and Development

Research and development costs, consisting of salaries and benefits, costs of clinical trials, costs of disposables, facility costs, contracted services and stock-based compensation from the engineering, regulatory, scientific and clinical affairs departments, that are useful in developing and clinically testing new products, services, processes or techniques, as well as expenses for activities that may significantly improve existing products or processes are expensed as incurred. Costs to acquire technologies that are utilized in research and development and that have no future benefit are expensed when incurred.

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, the Company 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. The Company conducted the fiscal 2017 annual impairment assessment as of April 1, 2017. As the fair value exceeded book value, the Company concluded there was no impairment of the subject clinical protocol.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.     Summary of Significant Accounting Policies (Continued)

Patent Costs

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

Credit Risk

Currently, the Company primarily manufactures and sells cellular processing systems and thermodynamic devices principally to the blood and cellular component processing industry and performs ongoing evaluations of the credit worthiness of the Company’s customers. The Company believes that adequate

provisions for uncollectible accounts have been made in the accompanying consolidated financial statements. To date, the Company has not experienced significant credit related losses.

Segment Reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision making group, whose function is to allocate resources to and assess the performance of the operating segments. The Company has identified its chief executive officer and chief operating officer as the CODM. In determining its reportable segments, the Company considered the markets and the products or services provided to those markets.

The Company has two reportable business segments:

The Clinical Development Division is developing autologous (utilizing the patient’s own cells) stem cell-based therapeutics that address significant unmet medical needs for applications within the vascular, cardiology and orthopedic markets.   

The Device Division is a pioneer and market leader in the development and commercialization of automated technologies for cell-based therapeutics and bio-processing.

Income Taxes

The tax years 1999-2015 remain open to examination by the major taxing jurisdictions to which the Company is subject; however, there is no current examination. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense. To date, there have been no interest or penalties charged to the Company in relation to the underpayment of income taxes. There were no unrecognized tax benefits during the periods presented.

The Company’s estimates of income taxes and the significant items resulting in the recognition of deferred tax assets and liabilities reflect the Company’s assessment of future tax consequences of transactions that have been reflected in the financial statements or tax returns for each taxing jurisdiction in which the Company operates.  The Company bases the provision for income taxes on the Company’s current period results of operations, changes in deferred income tax assets and liabilities, income tax rates, and changes in estimates of uncertain tax positions in the jurisdictions in which the Company operates.  The Company recognizes deferred tax assets and liabilities when there are temporary differences between the financial reporting basis and tax basis of assets and liabilities and for the expected benefits of using net operating loss and tax credit loss carryforwards.  The Company establishes valuation allowances when necessary to reduce the carrying amount of deferred income tax assets to the amounts that the Company believes are more likely than not to be realized. The Company evaluates the need to retain all or a portion of the valuation allowance on recorded deferred tax assets.  When a change in the tax rate or tax law has an impact on deferred taxes, the Company applies the change based on the years in which the temporary differences are expected to reverse.  As the Company operates in more than one state, changes in the state apportionment factors, based on operational results, may affect future effective tax rates and the value of recorded deferred tax assets and liabilities.  The Company records a change in tax rates in the consolidated financial statements in the period of enactment.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.     Summary of Significant Accounting Policies (Continued)

Income Taxes (Continued)

Income tax consequences that arise in connection with a business combination include identifying the tax basis of assets and liabilities acquired and any contingencies associated with uncertain tax positions assumed or resulting from the business combination.  Deferred tax assets and liabilities related to temporary differences of an acquired entity are recorded as of the date of the business combination and are based on the Company’s estimate of the appropriate tax basis that will be accepted by the various taxing authorities and its determination as to whether any of the acquired deferred tax liabilities could be a source of taxable income to realize the Company’s pre-existing deferred tax assets.

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 the Company’s net loss position for all periods presented. Anti-dilutive securities consisted of the following at June 30:

	2017			2016
Common stock equivalents of convertible debentures		--			3,676,471
Vested Series A warrants		404,412			404,412
Unvested Series A warrants		698,529	(1)		698,529	(1)
Warrants – other		3,725,782			3,725,782
Stock options		397,388			104,378
Restricted stock units		59,694			63,566
Total		5,285,805			8,673,138

(1) The unvested Series A warrants were subject to vesting based upon the amount of funds actually received by the Company in the second close of the August 2015 financing which never occurred. The warrants will remain outstanding but unvested until they expire in February 2021.

Recently Adopted Accounting Standards

In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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”. The amendments in ASU 2014-12 apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition that affects the vesting of the award. The Company adopted ASU 2014-12 effective July 1, 2016. The Company applies the amendments in ASU 2014-12 prospectively to all awards granted or modified after the effective date. Adoption of the new update to ASU 2014-12 did not have any impact on the financial statements of the Company.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.     Summary of Significant Accounting Policies (Continued)

Recently Issued Accounting Standards

In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815):  (Part I) Accounting for Certain Financial Instruments with Down Round Features; (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception”.  ASU 2017-11 allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity's own stock.  As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be accounted for as derivative liabilities.  A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward.  For equity-classified freestanding financial instruments, an entity will treat the value of the effect of the down round as a dividend and a reduction of income available to common shareholders in computing basic earnings per share.  For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings.  ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.  Early adoption is permitted.  The guidance in ASU 2017-11 can be applied using a full or modified retrospective approach.  The Company has not yet determined the effect that ASU 2017-11 will have on its results of operations, statement of financial position or financial statement disclosures.

In May 2017, the FASB issued ASU No. 2017-09 “Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting (ASU 2017-09).” ASU 2017-09 clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The standard is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact of its adoption of this standard on its financial statements.

In January 2017, the FASB issued ASU 2017-04 which removes Step 2 from the goodwill impairment test. It is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for an interim or annual goodwill impairment test performed with a measurement date after January 1, 2017. The Company has not yet determined the effect that ASU 2017-04 will have on its results of operations, statement of financial position or financial statement disclosures.  

In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. ASU 2016-09 simplifies several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted. The Company has not yet determined the effect that ASU 2016-09 will have on its results of operations, statement of financial position or financial statement disclosures.

In March 2016, the FASB issued ASU No. 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments” (“ASU 2016-06”). This new standard simplifies the embedded derivative analysis for debt instruments containing contingent call or put options by removing the requirement to assess whether a contingent event is related to interest rates or credit risks. ASU 2016-06 is effective for annual periods beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. The adoption of this standard is not expected to have an impact on the Company’s financial position or results of operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.     Summary of Significant Accounting Policies (Continued)

Recently Issued Accounting Standards (Continued)

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods therein. The Company has not yet determined the effect that ASU 2016-02 will have on its results of operations, statement of financial position or financial statement disclosures.

In July 2015, the FASB issued ASU No. 2015-11, “Inventory: Simplifying the Measurement of Inventory”, that requires inventory not measured using either the last in, first out (LIFO) or the retail inventory method to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. The new standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and will be applied prospectively. Early adoption is permitted. The Company is evaluating the impact that this standard will have on its consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.     Summary of Significant Accounting Policies (Continued)

Recently Issued Accounting Standards (Continued)

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition” and some cost guidance included in ASC Subtopic 605-35, "Revenue Recognition - Construction-Type and Production-Type Contracts.” The core principle of ASU 2014-09 is that revenue is recognized when the transfer of goods or services to customers occurs in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. ASU 2014-09 requires the disclosure of sufficient information to enable readers of the Company’s financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 also requires disclosure of information regarding significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 provides two methods of retrospective application. The first method would require the Company to apply ASU 2014-09 to each prior reporting period presented. The second method would require the Company to retrospectively apply ASU 2014-09 with the cumulative effect recognized at the date of initial application. ASU 2014-09 will be effective for the Company beginning in fiscal 2019 as a result of ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which was issued by the FASB in August 2015 and extended the original effective date by one year. The Company is currently evaluating the impact of adopting the available methodologies of ASU 2014-09 and 2015-14 upon its financial statements in future reporting periods. The Company has not yet selected a transition method. The Company is also in the process of evaluating the new standard against its existing accounting policies, including the timing of revenue recognition, and its contracts with customers to determine the effect the guidance will have on its financial statements and what changes to systems and controls may be warranted.

There have been four new ASUs issued amending certain aspects of ASU 2014-09, ASU 2016-08, "Principal versus Agent Considerations (Reporting Revenue Gross Versus Net)" was issued in March 2016 to clarify certain aspects of the principal versus agent guidance in ASU 2014-09. In addition, ASU 2016-10, "Identifying Performance Obligations and Licensing," issued in April 2016, amends other sections of ASU 2014-09 including clarifying guidance related to identifying performance obligations and licensing implementation. ASU 2016-12, "Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients" provides amendments and practical expedients to the guidance in ASU 2014-09 in the areas of assessing collectability, presentation of sales taxes received from customers, noncash consideration, contract modification and clarification of using the full retrospective approach to adopt ASU 2014-09. Finally, ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” was issued in December 2016, and provides elections regarding the disclosures required for remaining performance obligations in certain cases and also makes other technical corrections and improvements to the standard. With its evaluation of the impact of ASU 2014-09, the Company will also consider the impact on its financial statements related to the updated guidance provided by these four new ASUs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3.     Intangible Assets

Intangible assets consist of the following based on the Company’s determination of the fair value of identifiable assets acquired:

As of June 30, 2017
	Weighted Average Amortization Period (in Years)		Gross Carrying Amount		Accumulated Amortization		Impairment		Net
Trade names		7	$	30,000	$	14,000			$	16,000
Licenses		7		482,000		233,000				249,000
Customer relationships		3		443,000		443,000				--
Device registration		7		90,000		60,000				30,000
Covenants not to compete		5		955,000		645,000	$	310,000		--
Amortizable intangible assets				2,000,000		1,395,000		310,000		295,000
Clinical protocols				19,870,000		--				19,870,000
Total			$	21,870,000	$	1,395,000	$	310,000	$	20,165,000

As of June 30, 2016
	Weighted Average Amortization Period (in Years)		Gross Carrying Amount		Accumulated Amortization		Net
Trade names		7	$	29,000	$	10,000	$	19,000
Licenses		7		462,000		157,000		305,000
Customer relationships		3		424,000		335,000		89,000
Device registration		7		86,000		49,000		37,000
Covenants not to compete		5		955,000		454,000		501,000
Amortizable intangible assets				1,956,000		1,005,000		951,000
Clinical protocols				19,870,000		--		19,870,000
Total			$	21,826,000	$	1,005,000	$	20,821,000

The change in the gross carrying amount is due to foreign currency exchange fluctuations. There was a $310,000 impairment of the covenants not to compete intangible assets during the year ended June 30, 2017 as the assumed revenues that were in the fair value estimate have been delayed due to the delay in the clinical trial. Amortization of intangible assets was $359,000 and $438,000 for the years ended June 30, 2017 and 2016. Clinical protocols have not yet been introduced to the market place and are therefore not yet subject to amortization. The Company’s estimated future amortization expense for subsequent years are as follows:

Year Ended June 30,
2018	$	81,000
2019		81,000
2020		81,000
2021		52,000
Total	$	295,000

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4.     Equipment, Net

Equipment consisted of the following at June 30:

	2017			2016			Estimated Useful Life (years)
Machinery and equipment	$	5,772,000		$	6,604,000			2.5	-	10
Computer and software		733,000			397,000			2	-	5
Office equipment		427,000			260,000			5	-	10
Leasehold improvements		227,000			149,000			Shorter of 5 years or remaining lease term
Total equipment		7,159,000			7,410,000
Less accumulated depreciation and amortization		(4,829,000	)		(4,448,000	)
Total equipment, net	$	2,330,000		$	2,962,000

Depreciation and amortization expense for the years ended June 30, 2017 and 2016 was $408,000 and $630,000, respectively.

5.     Related Party Transactions     

Bill Payment Arrangement

The Company entered into a bill payment arrangement whereby Boyalife Group Ltd. (“Payor”), the Company’s largest shareholder, agreed to pay the Company’s legal expenses payable to the Company’s attorney related to certain litigation involving SynGen Inc. (the “Bill Payment Arrangement”), although the Company remains jointly and severally liable for the payment of such legal fees. The terms of the Bill Payment Arrangement provided that the Company will reimburse Payor for any and all amounts paid by Payor in connection with the Bill Payment Arrangement under certain specified events. There is no interest payable on outstanding balance of related party payable. As the Company is using a different attorney than specified in the bill payment arrangement for this litigation, the arrangement is no longer active. As of June 30, 2017, invoices totaling $606,000 had been paid by Payor and are included in related party payable as the Company anticipates repaying this within a year.

Revolving Credit Agreement

On March 6, 2017, Cesca entered into the Credit Agreement with Boyalife Investment Fund II, Inc. (the “Lender”). The Lender is a wholly owned subsidiary of Boyalife Group Inc., which is owned and controlled by the Company’s Chief Executive Officer and Chairman of the Board of Directors. The Credit Agreement grants to the Company the right to borrow up to $5,000,000 in amounts of $500,000 per advance on an unsecured basis (the “Loan”) at any time prior to March 6, 2022 (the “Maturity Date”). On the date of the Credit Agreement, the Company made an initial draw of $1,500,000 and drew down an additional $2,000,000 during the quarter ended June 30, 2017, and $1,500,000 during the quarter ended September 30, 2017.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. Related Party Transactions (Continued)

Revolving Credit Agreement (Continued)

The Credit Agreement and the Convertible Promissory Note issued thereunder (the “Note”) provide that the principal and all accrued and unpaid interest under the Loan will be due and payable on the Maturity Date, with payments of interest-only due on the last day of each calendar year. The Loan bears interest at 22% per annum, simple interest, except that certain borrowed amounts used to pay legal expenses under the bill payment arrangement will not bear interest. The Note can be prepaid in whole or in part by the Company at any time without penalty. If the Note is not repaid in full on or before the Maturity Date, the Lender has the right after the Maturity Date to convert any unpaid principal and accrued interest into shares of the Company’s common stock at a conversion price equal to 90% of the average daily volume-weighted average trading price of the Company’s common stock during the 10 trading days immediately prior to the Maturity Date, provided that the number of shares issuable upon such conversion may not exceed 19.99% of the number of outstanding shares of common stock of the Company on the date of the Credit Agreement (unless the Company obtains stockholder approval for such issuance in the manner required by the Marketplace Rules of the Nasdaq Stock Market, Inc.). 

The Maturity Date of the Note is subject to acceleration at the option of the Lender upon customary events of default, which include a breach of the Loan documents, termination of operations, or bankruptcy. The Lender’s obligation to make advances under the Loan is subject to the Company’s representations and warranties in the Credit Agreement continuing to be true at all times and there being no continuing event of default under the Note. The Credit Agreement provides that if the Lender at any time in the future purchases the Company’s blood and bone marrow processing device business, the Lender would refund to the Company legal fees expended by the Company in connection with certain litigation expenses funded by the Company with proceeds of the Loan. No default has occurred through the date of filing.

The Company recorded interest expense of $122,000 for the year ended June 30, 2017.

On September 13, 2017, the Company entered into Amendment No. 1 to the Credit Agreement (the “Amended Credit Agreement”). The Amended Credit Agreement amends the Credit Agreement originally entered into by the Company and Lender on March 6, 2017, by increasing the Company’s maximum borrowing availability thereunder from $5.0 million to $10.0 million. In connection with such amendment, the Company and Lender entered into an amended and restated convertible promissory note to reflect the new aggregate maximum principal amount of $10.0 million.

Distributor Agreement and Subsequent Event

On August 21, 2017, ThermoGenesis entered into an International Distributor Agreement with Boyalife W.S.N. Under the terms of the agreement, Boyalife W.S.N. was granted the exclusive right, subject to existing distributors and customers (if any), to develop, sell to, and service a customer base for ThermoGenesis’ AXP® (AutoXpress^®) System and BioArchive System in the People’s Republic of China (excluding Hong Kong and Taiwan), Singapore, Indonesia, and the Philippines (the “Territories”). Boyalife W.S.N. is an affiliate of our Chief Executive Officer and Chairman of our Board of Directors, and Boyalife (Hong Kong) Limited, our largest stockholder. Boyalife W.S.N,’s rights under the agreement include the exclusive right to distribute AXP^® Disposable Blood Processing Sets and use rights to the AXP^® (AutoXpress^®) System, BioArchive System and other accessories used for the processing of stem cells from cord blood in the Territories. Boyalife W.S.N. is also appointed as the exclusive service provider to provide repairs and preventative maintenance to ThermoGenesis products in the Territories.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. Related Party Transactions (Continued)

Distributor Agreement and Subsequent Event(Continued)

The term of the agreement is for three years with ThermoGenesis having the right to renew the agreement for successive two-year periods at its option. However, ThermoGenesis has the right to terminate the agreement early if Boyalife W.S.N. fails to meet specified minimum purchase requirements.

Revenues

During the year ended June 30, 2017, the Company recorded $308,000 of revenues from Boyalife and had an accounts receivable balance of $308,000 at June 30, 2017. As of September 5, 2017 the Company has collected all of this accounts receivable.

6.     Convertible Debentures

February 2016 Financing Transaction

In February 2016 in exchange for aggregate proceeds of $15,000,000 the Company sold and issued to Boyalife Investment Inc. and Boyalife (Hong Kong) Limited (i) 735,294 shares of common stock at a purchase price of $3.40 per share (the “Stock Price”) for gross proceeds of $2,500,000 (ii) Secured Convertible Debentures for $12,500,000 (the “Debentures”) which are convertible into 3,676,471 shares of common stock, and (iii) warrants to purchase 3,529,412 additional shares of common stock at an exercise price of $8.00 per share for a period of five years. The amount of warrants was based on 80% coverage of the shares issued or to be issued for the equity transaction in (i) and the debt transaction in (ii) above. The warrants were exercisable on August 13, 2016 and are outstanding at June 30, 2017.

On August 22, 2016, the Company notified Boyalife Investment Inc., that the Company elected to convert all outstanding principal and interest accrued and otherwise payable under the Debentures, which included the conversion of $12,500,000 of principal and $8,250,000 of interest up to and including the maturity date of the Debentures. Upon conversion, 6,102,941 shares of common stock were issued and the Debentures and all related security interest and liens were terminated. The 2,426,470 common shares that were issued for payment of the interest, had a fair market value of $11,403,000 on August 22, 2016. Accordingly, an additional $3,153,000 of interest expense was recorded on the date of conversion.

At the time of the conversion, the remaining debt discount of $9,538,000 and debt issue costs of $155,000 were fully amortized.

Thirty-Year Debenture Restructuring Transaction 

On August 31, 2015, the Company sold senior secured convertible debentures in a financing to raise up to $15,000,000 (“Thirty-Year Debentures”), Series A warrants to purchase up to 1,102,942 shares of the Company’s common stock at an exercise price equal to $13.60 per share for a period of five and one-half years (“Series A warrants”) and Series B warrants to purchase up to 606,618 shares of the Company’s common stock at an exercise price equal to $13.60 per share for a period of eighteen months (“Series B warrants”). At the initial closing on August 31, 2015, the Company received gross proceeds of $5,500,000 and 404,412 Series A warrants vested and 222,427 Series B warrants vested. The second closing for up to an additional $9,500,000 was dependent on a number of items including receipt by the Company of approval from the California Institute for Regenerative Medicine (“CIRM”) for a grant in the amount of $10,000,000 to support the Company’s pivotal trial for CLIRST III. The Company applied for the CIRM grant in August 2015. The Company withdrew its application for the CIRM grant.

For financial reporting purposes, the net proceeds of $4,720,000 was allocated first to the residual fair value of the Series A warrants, amounting to $3,385,000 then to the residual fair value of the obligation to issue the Series B warrants of $897,000 the remaining value to the intrinsic value of the beneficial conversion feature on the Thirty-Year Debentures of $438,000 resulting in an initial carrying value of the Thirty-Year Debentures of $0. The initial debt discount on the Thirty-Year Debentures totaled $4,720,000 and was amortized over the 30 year life of the convertible debentures.  

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6.     Convertible Debentures (Continued)

Thirty-Year Debenture Restructuring Transaction(Continued)

The Company entered into a registration rights agreement pursuant to which the Company agreed to register all of the shares of common stock then issued and issuable upon conversion in full of the Thirty-Year Debentures and all warrant shares issuable upon exercise of the Series A warrants and Series B warrants. The holders were entitled to receive liquidated damages upon the occurrence of a number of events relating to filing, getting an effective and maintaining an effective registration statement, including the failure of the Company to have such registration statement declared effective by October 26, 2015. As the Company did not file an effective registration statement until November 24, 2015 and the Company was precluded by the SEC from registering all of the registrable securities on a single registration statement, management considered it probable that five months of liquidated damages would be due and accrued $1,100,000 during the year ended June 30, 2016. Management made one liquidated damages payment of $220,000 during the three months ended December 31, 2015.

In connection with the February 2016 financing transaction described above, the Company concurrently entered into a Consent, Repayment and Release Agreement, pursuant to which the Company repaid the Thirty-Year Debentures and all related interest and liquidated damages. Upon the Company’s payment of $7.5 million, the Thirty-Year Debentures were deemed repaid in full and cancelled, all liquidated damages due and payable were deemed paid and satisfied in full, the registration rights agreement was terminated and the exercise price of the Series A warrants was changed from $13.60 to $8.00. The Company recomputed the fair value of the Series A warrants before and after the modification using the Binomial option pricing model with the following assumptions: expected volatility of 91%, discount rate of 1.2%, contractual term of 5 years and dividend rate of 0%. The loss on modification of $149,000 was recorded in the accompanying consolidated statements of operations and comprehensive loss for the year ended June 30, 2016.

Pursuant to the terms of the Consent Repayment and Release Agreement, the holders of the Series B warrants made a single, one-time cashless exercise of Series B warrants for 125,000 shares of common stock. The Company recomputed the fair value of the Series B warrants using the Binomial option pricing model. All remaining Series B warrants valued at $159,000 were cancelled.

This restructuring transaction occurred on February 16, 2016 and the Company recorded a loss on extinguishment of debt of $795,000 during the year ended June 30, 2016. The loss on extinguishment was calculated as follows:

Payment	$	7,500,000
Repayment of Thirty-Year debentures		(5,500,000	)
Payment of accrued liquidated damages and interest		(897,000	)
Loss on modification of Series A warrants		(149,000	)
Cancellation of Series B derivative obligation		(159,000	)
Loss on extinguishment of debt	$	795,000

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6.     Convertible Debentures (Continued)

Thirty-Year Debenture Restructuring Transaction(Continued)

At the time of the repayment, the remaining debt discount of $4,648,000 and debt issue costs of $765,000 were fully amortized. For the year ended June 30, 2016, the Company amortized $4,720,000 of debt discount and $777,000 of debt issue costs.

7.     Derivative Obligations

Series A Warrants

Series A warrants to purchase 404,412 common shares were issued and vested during the year ended June 30, 2016. At the time of issuance, the Company determined that because such warrants can be settled for cash at the holders’ option in a future fundamental transaction they constituted a derivative liability. The Company has estimated the fair value of the derivative liability, using a Binomial Lattice Valuation Model and the following assumptions:

	Series A
	June 30, 2017			June 30, 2016
Market price of common stock	$	3.17		$	2.93
Expected volatility		110	%		99	%
Contractual term (years)		3.7			4.7
Discount rate		1.66	%		1.01	%
Dividend rate		0	%		0	%
Exercise price	$	8.00		$	8.00

Expected volatilities are based on the historical volatility of the Company’s common stock. Contractual term is based on remaining term of the respective warrants. The discount rate represents the yield on U.S. Treasury bonds with a maturity equal to the contractual term.

The Company recorded a (loss)gain of ($60,000) and $3,395,000 during the years ended June 30, 2017 and 2016, respectively representing the net change in the fair value of the derivative liability, which is presented as fair value change of derivative instruments, in the accompanying consolidated statements of operations and comprehensive loss.

The following table represents the Company’s fair value hierarchy for its financial liabilities measured at fair value on a recurring basis as of June 30, 2017 and 2016:

	Balance at June 30, 2017		Level 1		Level 2		Level 3
Derivative obligation	$	730,000	$	-	$	-	$	730,000

	Balance at June 30, 2016		Level 1		Level 2		Level 3
Derivative obligation	$	670,000	$	-	$	-	$	670,000

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7.     Derivative Obligations (Continued)

Series A Warrants (Continued)

The following table reflects the change in fair value of the Company’s derivative liabilities for the year ended June 30, 2017:

	Amount
Balance – July 1, 2016	$	670,000
Change in fair value of derivative obligation		60,000
Balance – June 30, 2017	$	730,000

8.     Commitments and Contingencies

Operating Leases

The Company leases the Rancho Cordova and Gurgaon, India facilities pursuant to operating leases, which contain scheduled rent increases. The leases expire in May 2019 and March 2018, respectively. The Company has terminated the existing Gurgaon lease and signed a new one which terminates September 14, 2023. However, either party can terminate the lease after September 2019 with three months notice. The Company recognizes rent expense on a straight-line basis over the term of the facility lease. The annual future minimum lease payments for the Company’s non-cancelable operating leases are as follows:

2018		297,000
2019		279,000
2020		3,000
Total	$	579,000

Rent expense was $291,000 and $657,000 for the years ended June 30, 2017 and 2016, respectively.

Financial Covenants

Effective May 15, 2017, the Company entered into a Sixth Amended and Restated Technology License and Escrow Agreement with Cbr Systems, Inc. which modified the financial covenant that the Company must meet in order to avoid an event of default. The Company must maintain a cash balance and short-term investments net of debt or borrowed funds that are payable within one year of not less than $2,000,000. The Company was in compliance with this financial covenant as of June 30, 2017 and August 31, 2017.

Potential Severance Payments

The Company’s Chief Operating Officer (“COO”) has rights upon termination under her employment agreement. The agreement provides, among other things, for the payment of twelve months of severance compensation upon termination under certain circumstances. With respect to this agreement at June 30, 2017, potential severance amounted to $320,000.

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8.     Commitments and Contingencies (Continued)

Contingencies

In fiscal 2016, the Company signed an engagement letter with a strategic consulting firm. Included in the engagement letter was a success fee due upon the successful conclusion of certain strategic transactions. On May 4, 2017, a lawsuit was filed against the Company by the consulting firm as the consulting firm believes that it is owed a transaction fee of $1,000,000 under the terms of the engagement letter due to the conversion of the Boyalife Debentures in August 2016. The Company intends to defend the lawsuit vigorously and no accrual has been recorded for this contingent liability as of June 30, 2017.

In the normal course of operations, the Company may have disagreements or disputes with customers, employees or vendors. Such potential disputes are seen by management as a normal part of business. As of June 30, 2017, management believes any liability that may ultimately result from the resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, operating results or cash flows.

Warranty

The Company offers a warranty on all of the Company’s non-disposable products of one to two years. The Company warrants disposable products through their expiration date. The Company periodically assesses the adequacy of the Company’s recorded warranty liabilities and adjusts the amounts as necessary.

Changes in the Company’s product liability which is included in other current liabilities during the period are as follows:

	For years ended June 30,
	2017			2016
Beginning balance	$	566,000		$	627,000
Warranties issued during the period		120,000			97,000
Settlements made during the period		(93,000	)		(287,000	)
Changes in liability for pre-existing warranties during the period		(5,000	)		129,000
Ending balance	$	588,000		$	566,000

9.     Stockholders’ Equity

Common Stock

On August 22, 2016, the Company notified Boyalife Investment Inc., that it elected to convert all outstanding principal and interest accrued and otherwise payable under the Debentures, which included the conversion of $12,500,000 of principal and $8,250,000 of interest up to and including the maturity date of the Debentures. Upon conversion, 6,102,941 shares of common stock were issued and the Debentures and all related security interest and liens were terminated. (See note 6)

On August 3, 2016, the Company sold 600,000 shares of common stock at a price of $4.10 per share. The net proceeds to the Company from the sale and issuance of the shares, after deducting the offering expenses borne by the Company of $369,000, were $2,092,000. 

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9.     Stockholders’ Equity (Continued)

In July 2016, the Compensation Committee of the Board of Directors granted 118,288 shares of fully vested common stock to employees in partial payment of amounts earned under the Company’s 2016 short term incentive plan. 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 46,879 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 is as follows:

	2017				2016
	Number of Shares		Weighted- Average Exercise Price Per Share		Number of Shares			Weighted- Average Exercise Price Per Share
Beginning balance		4,828,723	$	9.37		252,620		$	44.18
Warrants granted		--				5,238,971		$	9.83
Warrants exercised (cashless)		--				(51,712	)	$	13.60
Warrants expired/canceled		--				(611,156	)	$	17.21
Outstanding at June 30		4,828,723	$	9.37		4,828,723		$	9.37
Exercisable at June 30		4,130,192	$	9.60		600,782		$	19.02

Equity Plans and Agreements

The Company recorded stock-based compensation of $1,461,000 and $742,000 for the years ended June 30, 2017 and 2016.

On May 5, 2017, the stockholders approved the Amended 2016 Equity Incentive Plan (“Amended 2016 Plan”) under which up to 600,000 shares may be issued pursuant to grants of shares, options, or other forms of incentive compensation. As of June 30, 2017, 254,224 awards were available for issuance under the Amended 2016 Plan.

The 2012 Independent Director Plan (“2012 Plan”) permits the grant of stock or options to independent directors. A total of 25,000 shares were approved by the stockholders for issuance under the 2012 Plan. Options are granted at prices that are equal to 100% of the fair market value on the date of grant, and expire over a term not to exceed ten years. Options generally vest in monthly increments over one year, unless otherwise determined by the Board of Directors. As of June 30, 2017, there were 194 shares available for issuance.

The 2006 Equity Incentive Plan (“2006 Plan”) permitted the grant of options, restricted stock units, stock bonuses and stock appreciation rights to employees, directors and consultants. The 2006 Plan, but not the awards granted thereunder, expired in 2016. As of June 30, 2017, 134,164 option and restricted stock unit awards remained outstanding.

On July 7, 2016, the Compensation Committee also adopted a short term incentive program under which cash awards and shares of common stock may be granted to employees of the Company (the “Short Term Program”). The aggregate amount of the cash awards issuable pursuant to the Short Term Plan is approximately $276,000. Up to 104,000 shares of common stock from the Company’s 2006 Plan, subject to vesting, are issuable pursuant to the Short Term Program. On July 26, 2016, 98,417 shares and $266,000 of cash awards were granted under the Short Term Program. The cash awards granted pursuant to the Short Term Program were payable and the shares of common stock issued pursuant to the Short Term Program fully vested on July 1, 2017, provided, that such award recipients were employed by the Company as of July 1, 2017 or immediately if terminated without cause. Three of the eight employees were terminated without cause during the year ended June 30, 2017, as such, 51,636 shares vested. The remaining 46,781 shares vested on July 1, 2017.

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9.     Stockholders’ Equity (Continued)

Equity Plans and Agreements (Continued)

Upon the termination of the employment of the Company’s Chief Executive Officer (“CEO”) in November 2016 and Chief Financial Officer (“CFO”) in March 2017, in accordance with their employment agreements, all outstanding options and restricted stock unit awards immediately vested. As a result, the Company recognized (i) $539,000 of stock compensation expense in general and administrative for the quarter ended December 31, 2016, as the vesting accelerated on the CEO’s options to purchase 72,496 shares of common stock and 79,720 restricted stock unit awards, and (ii) $94,000 of stock compensation expense in general and administrative for the quarter ended March 31, 2017 as the vesting accelerated on the CFO’s options to purchase 16,248 shares of common stock and 15,914 restricted stock unit awards. Additionally, the terms of the options were modified upon the executives’ termination such that the options were deemed to be exercisable for longer than 90 days from the date of termination. There was no incremental compensation cost recorded for this modification as the fair-value-based measure of the modified award on the date of modification was less than the fair-value-based measure of the original award immediately before the modification.  

On February 24, 2017, the Company appointed a Chief Operating Officer. As part of the terms of her employment agreement, she received an annual grant of 25,000 restricted stock units (“RSUs”) and options to purchase 25,000 common shares under the 2016 Equity Incentive Plan (“2016 Plan”). The annual grant of RSUs and stock options will vest in four equal installments: 25% on March 31, 25% on June 30, 25% on September 30 and 25% on December 31 of each year. The stock options granted in February 2017 have an exercise price of $2.89, which was the closing price on the date of grant.

In December 2016, the Compensation Committee of the Board of Directors granted 50,000 options to the Company’s CEO under the 2016 Plan. The options have an exercise price of $2.91, the closing price on the date of grant, they vest in five equal installments on each of December 16, 2016, February 4, 2017, May 4, 2017, August 4, 2017 and November 4, 2017 and have a seven year life.

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9.     Stockholders’ Equity (Continued)

Stock Options

The Company issues new shares of common stock upon exercise of stock options. The following is a summary of option activity for the Company’s stock option plans:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at June 30, 2016		104,378		$	14.85
Granted		318,324		$	2.98
Forfeited/cancelled		(22,814	)	$	6.39
Expired		(2,500	)	$	18.46
Exercised		--			--
Outstanding at June 30, 2017		397,388		$	5.80		6.2	$	69,000
Vested and Expected to Vest at June 30, 2017		376,595		$	5.94		6.2	$	64,000
Exercisable at June 30, 2017		242,073		$	7.38		5.5	$	43,000

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. There were no options that were exercised during the years ended June 30, 2017 and 2016.

On July 7, 2016, the Compensation Committee of the Board of Directors granted options to purchase a total of 156,100 common shares to various employees under the 2016 Plan. The options have an exercise price of $2.86, the closing price on the date of grant, vest ratably every six months over a three year period, and have a seven year life.

Non-vested stock option activity for the year ended June 30, 2017, is as follows:

	Non-vested Stock Options			Weighted-Average Grant Date Fair Value
Outstanding at June 30, 2016		43,107		$	7.46
Granted		318,325		$	2.16
Vested		(185,019	)	$	3.07
Forfeited		(21,097	)	$	3.31
Outstanding at June 30, 2017		155,316		$	2.39

The fair value of the Company’s stock options granted for the years ended June 30, 2017 and 2016 was estimated using the following weighted-average assumptions:

	2017			2016
Expected life (years)		4			5
Risk-free interest rate		1.3	%		1.5	%
Expected volatility		102	%		80	%
Dividend yield		0	%		0	%

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.     Stockholders’ Equity (Continued)

The weighted average grant date fair value of options granted during the years ended June 30, 2017 and 2016 was $2.16 and $5.75, respectively.

At June 30, 2017, the total compensation cost related to options granted under the Company’s stock option plans but not yet recognized was $275,000. This cost will be amortized on a straight-line basis over a weighted-average period of approximately one and a half years and will be adjusted for subsequent changes in estimated forfeitures. The total fair value of options vested during the years ended June 30, 2017 and 2016 was $572,000 and $354,000.

Common Stock Restricted Awards

The following is a summary of restricted stock unit activity:

	2017					2016
	Number of Shares			Weighted- Average Grant Date Fair Value		Number of Shares			Weighted- Average Grant Date Fair Value
Balance at June 30		63,566		$	14.96		72,589		$	22.40
Granted		123,417		$	4.55		10,000		$	2.98
Vested		(125,513	)	$	9.47		(6,120	)	$	28.94
Forfeited		(1,776	)	$	27.05		(12,903	)	$	41.15
Outstanding at June 30		59,694		$	4.62		63,566		$	14.96

In connection with the vesting of the restricted stock unit 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 145 and 1,300 shares for the years ended June 30, 2017 and 2016, respectively 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.

As of June 30, 2017, the Company had $43,000 in total unrecognized compensation expense related to the Company’s restricted stock unit awards, which will be recognized over a weighted average period of approximately seven months.

10.     Concentrations

One distributor had an accounts receivable balance of $1,388,000 or 36% and $901,000 or 28% at June 30, 2017 and 2016, respectively. The Company did not renew the contract with this distributor in August 2017 and signed a contract with a new distributor. A customer had an accounts receivable balance of $259,000 or 7% and $620,000 or 19% at June 30, 2017 and 2016, respectively. A second distributor had an accounts receivable balance of $304,000 or 8% and $320,000 or 10% at June 30, 2017 and 2016, respectively.

Revenues from a customer totaled $3,263,000 or 22% and $2,475,000 or 21% for the years ended June 30, 2017 and 2016, respectively. Revenues from one distributor totaled $2,842,000 or 20% and $2,797,000 or 23% of net revenues for the years ended June 30, 2017 and 2016, respectively. The Company did not renew the contract with this distributor in August 2017 and replaced it with a different distributor.

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Cesca Therapeutics Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10.     Concentrations (Continued)

The following represents the Company’s revenues by product platform for the years ended June 30:

	2017		2016
AXP	$	8,715,000	$	6,932,000
BioArchive		3,318,000		2,465,000
Manual Disposables		1,195,000		1,507,000
Bone Marrow		745,000		459,000
Other		552,000		566,000
	$	14,525,000	$	11,929,000

The Company had sales to customers as follows for the years ended June 30:

	2017		2016
United States	$	6,675,000	$	5,122,000
China		3,296,000		2,797,000
Asia – other		1,951,000		1,955,000
Europe		1,739,000		1,343,000
Other		864,000		712,000
	$	14,525,000	$	11,929,000

The Company attributes revenue to different geographic areas based on where items are shipped or services are performed.

Two suppliers accounted for 64% and 20% of total inventory purchases during the year ended June 30, 2017. Two suppliers accounted for 65% and 21% of total inventory purchases during the year ended June 30, 2016.

The Company has a contract manufacturer in Costa Rica that produces certain disposables. The Company’s equipment, net of accumulated depreciation, is summarized below by geographic area:

	June 30, 2017		June 30, 2016
United States	$	1,559,000	$	2,030,000
Costa Rica		322,000		367,000
India		261,000		279,000
All other countries		188,000		286,000
Total equipment, net	$	2,330,000	$	2,962,000

11.     Segment Reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision making group, whose function is to allocate resources to and assess the performance of the operating segments. The Company has identified its Chief Executive Officer and Chief Operating Officer as the CODM. In determining its reportable segments, the Company considered the markets and the products or services provided to those markets.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11.     Segment Reporting (Continued)

During the quarter ended June 30, 2017, the Company developed a plan to begin separately operating its device and therapeutics businesses. The Company identified the following two reportable segments, which are the same as its operating segments:

The Clinical Development Division is developing autologous (utilizing the patient’s own cells) stem cell-based therapeutics that address significant unmet medical needs for applications within the vascular, cardiology and orthopedic markets.   

The Device Division is a pioneer and market leader in the development and commercialization of automated technologies for cell-based therapeutics and bio-processing.

The following table summarizes the operating results of the Company’s reportable segments:

	Year Ended June 30, 2017
	Clinical Development			Device			Total
Net revenues	$	492,000		$	14,033,000		$	14,525,000
Cost of revenues		466,000			8,220,000			8,686,000
Gross profit		26,000			5,813,000			5,839,000
Operating expenses		8,966,000			6,113,000			15,079,000
Operating profit (loss)	$	(8,940,000	)	$	(300,000	)	$	(9,240,000	)
Depreciation and amortization	$	501,000		$	329,000		$	830,000
Stock-based compensation expense	$	970,000		$	491,000		$	1,461,000

	Year Ended June 30, 2016
	Clinical Development			Device			Total
Net revenues	$	646,000		$	11,283,000		$	11,929,000
Cost of revenues		574,000			8,611,000			9,185,000
Gross profit		72,000			2,672,000			2,744,000
Operating expenses		8,312,000			5,297,000			13,609,000
Operating profit (loss)	$	(8,240,000	)	$	(2,625,000	)	$	(10,865,000	)
Depreciation and amortization	$	644,000		$	524,000		$	1,168,000
Stock-based compensation expense	$	548,000		$	194,000		$	742,000

The Company has not yet allocated assets on a segment basis.

12.     Income Taxes

Loss before income tax benefits was comprised of $29,005,000 from US and $763,000 from foreign jurisdictions in 2017 and $17,789,000 from US and $799,000 from foreign jurisdictions in 2016.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12.     Income Taxes (Continued)

The reconciliation of federal income tax attributable to operations computed at the federal statutory tax rate of 34% to income tax benefit is as follows for the years ended June 30:

	2017			2016
Statutory federal income tax benefit	$	(10,121,000	)	$	(6,300,000	)
Unbenefited net operating losses and credits		2,281,000			3,391,000
Disallowed financing costs		6,959,000			2,607,000
State and local taxes		88,000			69,000
Other		120,000			233,000
Total income tax benefit	$	(673,000	)	$	--

The deferred income tax benefit of $673,000 is due to changes in the state tax rate over the last several years. Approximately $559,000 of the benefit relates to state rate changes prior to fiscal 2017, which was all recognized in the current year, of which $157,000 relates to fiscal 2016 and $402,000 relates to years prior to fiscal 2016. The Company believes these amounts are quantitatively and qualitatively immaterial to the balance sheets as of June 30, 2015 and June 30, 2016, as well as the statements of operations and comprehensive loss for the years then ended, and to fiscal 2017. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized.

At June 30, 2017, the Company had net operating loss carryforwards for federal and state income tax purposes of $118,956,000 and $42,922,000 respectively that are available to offset future income. The federal and state loss carryforwards expire in various years between 2018 and 2037.

At June 30, 2017, the Company has research and experimentation credit carryforwards of $1,458,000 for federal tax purposes that expire in various years between 2019 and 2037, and $1,456,000 for state income tax purposes that do not have an expiration date.

Significant components of the Company’s deferred tax assets and liabilities for federal and state income taxes are as follows:

	June 30, 2017			June 30, 2016
Deferred tax assets:
Net operating loss carryforwards	$	43,687,000		$	41,023,000
Income tax credit carryforwards		2,419,000			2,367,000
Stock compensation		1,047,000			874,000
Other		1,124,000			1,858,000
Total deferred tax assets		48,277,000			46,122,000
Deferred tax liabilities
Indefinite lived intangible assets		(6,968,000	)		(7,641,000	)
Depreciation and amortization		(176,000	)		(230,000	)
Total deferred tax liabilities		(7,144,000	)		(7,871,000	)
Valuation allowance		(48,101,000	)		(45,892,000	)
Net deferred taxes	$	(6,968,000	)	$	(7,641,000	)

The valuation allowance increased by $2,209,000 in 2017. As of June 30, 2017, the Company has a benefit of $215,000 related to stock option deductions, which will be credited to paid-in capital when realized.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12.     Income Taxes (Continued)

In August 2016, the conversion of the Boyalife Debentures effected an “ownership change” as defined under the provisions of the Tax Reform Act of 1986. As a result, any net operating loss and credit carryovers existing at that date will be subject to an annual limitation regarding their utilization against taxable income in future periods. Additionally, before the conversion of the debentures, it is possible that “ownership changes” occurred, which could create additional imitations on the use of our net operating losses and credit carryovers.

13.     Employee Retirement Plan

The Company sponsors an Employee Retirement Plan, generally available to all employees, in accordance with Section 401(k) of the Internal Revenue Code. Employees may elect to contribute up to the Internal Revenue Service annual contribution limit. Under this Plan, at the discretion of the Board of Directors, the Company may match a portion of the employees’ contributions. The Company made no discretionary or matching contributions to the Plan for the years ended June 30, 2017 and 2016.

14.     Subsequent Event

On July 7, 2017, the Company entered into a transaction in which its wholly owned subsidiary, ThermoGenesis, acquired the business and substantially all of the assets of SynGen Inc. (“SynGen”), a privately held Sacramento, California-based technology company that develops, markets, and sells advanced cell separation tools and accessories. In the transaction (the “SynGen Transaction”), ThermoGenesis acquired substantially all of SynGen’s operating assets, including its proprietary cell processing platform. In exchange, ThermoGenesis issued to SynGen shares of ThermoGenesis common stock that, after giving effect to the issuance, constitute 20% of ThermoGenesis’ outstanding common shares, and ThermoGenesis also made a one-time cash payment of $1.0 million to SynGen (together with the issuance of common stock, the “Transaction Consideration”). The preliminary purchase price is not available as the Company is in process of completing the valuation of the ThermoGenesis stock. The final determination of the fair value of certain assets acquired and the ThermoGenesis stock issued will be completed within the 12-month measurement period from the date of acquisition as required. Immediately prior to the SynGen Transaction, the Company contributed the assets, business, and current liabilities of its blood and bone-marrow processing device business to ThermoGenesis and will operate such business (together with the acquired business) through the ThermoGenesis subsidiary.

On September 13, 2017, the Company entered into Amendment No. 1 to the Credit Agreement (the “Amended Credit Agreement”). The Amended Credit Agreement amends the Credit Agreement originally entered into by the Company and Lender on March 6, 2017, by increasing the Company’s maximum borrowing availability thereunder from $5.0 million to $10.0 million. In connection with such amendment, the Company and Lender entered into an amended and restated convertible promissory note to reflect the new aggregate maximum principal amount of $10.0 million.

In August 2017, the Board of Directors approved changing the Company’s fiscal year from June 30 to a calendar year ending December 31. As a result, the Company will file a transition report on Form 10-K for the six month period ending December 31, 2017. Prior to filing the transition report, the Company will file a quarterly report on Form 10-Q for the quarter ending September 30, 2017.

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ITEM 9.        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A.     CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and our Principal Financial and Accounting 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 last fiscal quarter pursuant to Exchange Act Rule 13a-15. The term “disclosure controls and procedures” means controls and other procedures designed to ensure that information required to be disclosed in reports filed or submitted 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 the Chief Executive Officer and the Principal Financial and Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon that evaluation, our Chief Executive Officer and Principal Financial and Accounting Officer concluded that our disclosure controls and procedures were effective as of June 30, 2017.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive and Principal Financial and Accounting Officer, we conducted an evaluation of the effectiveness of its internal control over financial reporting as of June 30, 2017 based on criteria established in the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of June 30, 2017.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Attestation Report of Independent Registered Public Accounting Firm

Not applicable.

Changes in Internal Control over Financial Reporting 

There have been no changes in our internal controls over financial reporting that occurred during the fiscal quarter ended June 30, 2017, 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.

ITEM 9B.     OTHER INFORMATION.

None.

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PART III

ITEM 10.     DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The information required by this Item will be included in and is hereby incorporated by reference from an amendment to this Annual Report on Form 10-K which we intend to file within 120 days afer the end of our fiscal year ended June 30, 2017. We have adopted a Code of Ethics applicable to all employees including our CEO and Principal Financial and Accounting Officer. A copy of the Code of Ethics is available at www.cescatherapeutics.com.

ITEM 11.     EXECUTIVE COMPENSATION.

The information required by this Item will be included in and is hereby incorporated by reference from an amendment to this Annual Report on Form 10-K which we intend to file within 120 days after the end of our fiscal year ended June 30, 2017.

ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The information required by this Item will be included in and is hereby incorporated by reference from an amendment to this Annual Report on Form 10-K which we intend to file within 120 days after the end of our fiscal year ended June 30, 2017.

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

The information required by this Item will be included in and is hereby incorporated by reference from an amendment to this Annual Report on Form 10-K which we intend to file within 120 days after the end of our fiscal year ended June 30, 2017.

ITEM 14.     PRINCIPAL ACCOUNTING FEES AND SERVICES.

The information required by this Item will be included in and is hereby incorporated by reference from an amendment to this Annual Report on Form 10-K which we intend to file within 120 days after the end of our fiscal year ended June 30, 2017.

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PART IV

ITEM 15.     EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as a part of this report on Form 10-K.

		Page Number
(a)  (1)	Financial Statements
	Report of Independent Registered Public Accounting Firm	37
	Consolidated Balance Sheets at June 30, 2017 and 2016	38
	Consolidated Statements of Operations and Comprehensive Loss for the years ended June 30, 2017 and 2016	39
	Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2017 and 2016	40
	Consolidated Statements of Cash Flows for the years ended June 30, 2017 and 2016	41
	Notes to Consolidated Financial Statements	42

Management’s Report on Internal Control over Financial Reporting is contained as part of this report under Item 9A “Controls and Procedures.”

(a)   (2)	Financial Statement Schedules
	Financial statement schedules have been omitted because they are not required.
(b)	Exhibits
	Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index on the next page, which are incorporated herein by this reference.

ITEM 16.     FORM 10-K SUMMARY

None.

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EXHIBIT INDEX

Exhibit No.	Document Description	Incorporation by Reference
2.1	Plan of Merger Agreement and Reorganization Agreement between ThermoGenesis Corp. and TotipotentRX, dated July 15, 2013	Incorporated by reference to Exhibit 2.1 to Form 8-K filed with the SEC July 16, 2013.
3.1	Sixth Amended and Restated Certificate of Incorporation, as amended	Incorporated by reference to Exhibit 3.1 of Registration Statement on Form S-8 filed with the SEC on May 18, 2017.
3.2	Restated Bylaws of Cesca Therapeutics Inc.	Incorporated by reference to Exhibit 99.1 to Form 8-K filed with the SEC on October 30, 2014.
3.4	Certificate of Merger	Incorporated by reference to Exhibit 3.4 to Form 8-K filed with the SEC on February 21, 2014.
10.1	Amended and Restated 2006 Equity Incentive Plan	Incorporated by reference to Exhibit 10.6.1 to Form 8-K filed with the SEC on May 1, 2014.
10.2+	Product Purchase and International Distribution Agreement between ThermoGenesis Corp. and Golden Meditech Holdings Limited	Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on August 24, 2012 and amended October 24, 2012.
10.3	2012 Independent Director Plan	Incorporated by reference to Exhibit A of the Company’s Definitive Proxy Statement filed with the SEC on October 23, 2012.
10.4+	Sales and Purchase Agreement between ThermoGenesis Corp. and CBR Systems, Inc. dated December 31, 2013	Incorporated by reference to Exhibit 10.18 to Form 8-K filed with the SEC on January 7, 2014.
10.5	Employment Agreement with Robin C. Stracey	Incorporated by reference to Exhibit 10.19 to Form 8-K filed with the SEC on June 15, 2015.
10.6	Form of Series A Warrant	Incorporated by reference to Exhibit 10.3 to Form 8-K filed with the SEC on September 1, 2015.
10.6.1	Form of Series A Warrant Amendment	Incorporated by reference to Exhibit 10.7 to Form 8-K filed with the SEC on February 3, 2016.
10.7	General Release and Waiver between the Company and Kenneth L. Harris	Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on September 30, 2015.
10.8	Sixth Amended and Restated Technology License and Escrow Agreement between the Company, ThermoGenesis Corp. and CBR Systems, effective May 15, 2017	Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on May 31, 2017.
10.9	Employment Agreement with Michael Bruch	Incorporated by reference to Exhibit 10.2 to Form 8-K filed with the SEC on October 28, 2015.
10.10	Purchase Agreement between the Company and Boyalife Investment Inc. and Boyalife (Hong Kong) Limited	Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on February 3, 2016.
10.11	Form of Debenture between the Company and Boyalife Investment Inc. and Boyalife (Hong Kong) Limited	Incorporated by reference to Exhibit 10.2 to Form 8-K filed with the SEC on February 3, 2016.
10.12	Form of Warrant	Incorporated by reference to Exhibit 10.3 to Form 8-K filed with the SEC on February 3, 2016.
10.13	Form of Nomination and Voting Agreement	Incorporated by reference to Exhibit 10.4 to Form 8-K filed with the SEC on February 3, 2016.
10.14	Form of Security Agreement	Incorporated by reference to Exhibit 10.5 to Form 8-K filed on February 3, 2016.

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Exhibit No.	Document Description	Incorporation by Reference
10.15	Form of Securities Purchase Agreement between Cesca Therapeutics Inc. and certain institutional accredited investors, dated August 3, 2016	Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on August 4, 2016.
10.16	Form of Placement Agency Agreement between Cesca Therapeutics Inc. and Maxim Group LLC, dated August 3, 2016	Incorporated by reference to Exhibit 10.2 to Form 8-K filed with the SEC on August 4, 2016.
10.17	General Release and Waiver dated November 7, 2016 by and between Cesca Therapeutics, Inc. and Robin Stracey	Incorporated by reference to Exhibit 10.2 to Form 8-K/A filed with the SEC on November 17, 2016.
10.18	Employment Agreement dated December 14, 2016 by and between Cesca Therapeutics Inc. and Dr. Xiaochun (Chris) Xu	Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on December 20, 2016.
10.19	Form of Indemnification Agreement	Incorporated by reference to Exhibit 10.1 to Form 8-K/A filed with the SEC on November 17, 2016.
10.20	Cesca Therapeutics Inc. 2016 Equity Incentive Plan, as amended	Incorporated by reference to Exhibit 10.1 to Registration Statement on Form S-8 filed with the SEC on May 18, 2017.
10.21	General Release and Waiver between Mr. Michael Bruch and Cesca Therapeutics Inc., effective February 28, 2017	Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on March 2, 2017.
10.22	Employment Agreement between Ms. Vivian Liu and Cesca Therapeutics Inc., effective February 24, 2017	Incorporated by reference to Exhibit 10.2 to Form 8-K filed with the SEC on March 2, 2017.
10.23	Revolving Credit Agreement, dated March 6, 2017, between Cesca Therapeutics Inc. and Boyalife Investment Fund II, Inc.	Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on March 10, 2017.
10.24	Convertible Promissory Note, dated March 6, 2017, issued by Cesca Therapeutics Inc. to Boyalife Investment Fund II, Inc.	Incorporated by reference to Exhibit 10.2 to Form 8-K filed with the SEC on March 10, 2017.
10.25	Asset Acquisition Agreement, dated July 7, 2017, between ThermoGenesis Corp. and SynGen Inc.	Incorporated by reference to Exhibit 2.1 to Form 8-K filed with the SEC on July 11, 2017.
10.26	Voting Agreement, dated July 7, 2017, among the Company, ThermoGenesis Corp., Bay City Capital Fund V. L.P. and Bay City Capital Fund Co-Investment Fund, L.P.	Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on July 11, 2017.
10.27	Right of First Refusal and Co-Sale Agreement, dated July 7, 2017, among the Company, ThermoGenesis Corp., Bay City Capital Fund V. L.P. and Bay City Capital Fund Co-Investment Fund, L.P.	Incorporated by reference to Exhibit 10.3 to Form 8-K filed with the SEC on July 11, 2017.
10.28	Amended and Restated Certificate of Incorporation of ThermoGenesis Corp.	Incorporated by reference to Exhibit 10.4 to Form 8-K filed with the SEC on July 11, 2017.
10.29#	International Distributor Agreement, dated August 21, 2017, between ThermoGenesis Corp. and Boyalife W.S.N.	Filed herewith
23.1	Consent of Marcum LLP, Independent Registered Public Accounting Firm	Filed herewith.
31.1	Certification by the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.

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Exhibit No.	Document Description	Incorporation by Reference
31.2	Certification by the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.
32	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002	Filed herewith.
101.INS	XBRL Instance Document‡
101.SCH	XBRL Taxonomy Extension Schema Document‡
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document‡
101.DEF	XBRL Taxonomy Extension Definition 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.

+ The SEC has granted confidential treatment with respect to certain portions of this exhibit. Omitted portions have been filed separately with the SEC.

# Confidential treatment has been requested for certain confidential portions of this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. In accordance with Rule 24b-2, these confidential portions have been omitted from this exhibit and filed separately with the SEC.

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GLOSSARY OF CERTAIN TECHNICAL TERMS

510(k): Formal notification to FDA to obtain clearance to market the medical device. The device must be substantially equivalent to devices manufactured prior to 1976, or which have been found substantially equivalent after that date.

ADULT STEM CELLS: All non-embryonic stem cells.

AUTOLOGOUS: Autogenous; related to self; originating within an organism itself, as obtaining blood from the patient for use in the same patient.

CRITICAL LIMB ISCHEMIA (“CLI”): A severe obstruction of the arteries that seriously decreases blood flow to the extremities (arms, hands, legs, feet) and has progressed to the point of severe pain and even skin ulcers of sores.

CRYOPRESERVATION: Maintaining the life of excised tissue or organs by freezing and storing at very low temperatures.

HEMATOPOIETIC: The formation of blood.

IN VITRO: Occurring in an artificial environment outside a living organism.

IN VIVO: Occurring or made to occur within a living organism or natural setting.

ISCHEMIA: Deficient supply of blood and oxygen to a body part.

PERIPHERAL BLOOD: A term used to describe the blood that is contained in the body’s circulatory system. It can be collected by a health care professional by inserting a needle into a vein.

PMA Classification: The most stringent type of medical device marketing application required by the FDA (one category above 510(k) pre-market notification). Unlike the 510(k) pathway, the manufacturer must submit an exhaustive application to the FDA and must receive approval prior to beginning commercial marketing of a device. The PMA application includes information on how the device was designed and manufactured, as well as preclinical and clinical studies, demonstrating that it is safe and effective for its intended use.

REGENERATIVE MEDICINE: The process of creating living, functional tissues to repair or replace tissue or organ function lost due to age, disease, damage, or congenital defects.

STEM CELLS: Undifferentiated, primitive cells in the bone marrow or cord blood with the ability both to multiply and to differentiate into specific blood or tissue cells.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: September 21, 2017	By:/s/	Xiaochun “Chris” Xu
		Xiaochun “Chris” Xu, Chief Executive Officer (Principal Executive Officer)

KNOW ALL THESE PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Xiaochun “Chris” Xu and Jeff Cauble and each of them, jointly and severally, his attorneys-in-fact, each with full power of substitution, for him in any and all capacities, to sign any and all amendments to this Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each said attorneys-in-fact or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:/s/	Chris Xu	Dated: September 21, 2017
	Chris Xu, Chief Executive Officer and Chairman of the Board (Principal Executive Officer)
By:/s/	Jeff Cauble	Dated: September 21, 2017
	Jeff Cauble, Principal Financial and Accounting Officer (Principal Financial Officer and Principal Accounting Officer)
By:/s/	Vivian Liu	Dated: September 21, 2017
	Vivian Liu, Chief Operating Officer and Director
By: /s/	Russell Medford	Dated: September 21, 2017
	Russell Medford, Director
By: /s/	Mahendra S. Rao	Dated: September 21, 2017
	Mahendra S. Rao, Director
By: /s/	Joseph Thomis	Dated: September 21, 2017
	Joseph Thomis, Director
By: /s/	Mark Westgate	Dated: September 21, 2017
	Mark Westgate, Director
By: /s/	James Xu	Dated: September 21, 2017
	James Xu, Director

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EX-10.29

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Exhibit 10.29

TGS-004-90105

THIS INTERNATIONAL DISTRIBUTOR AGREEMENT (this “Agreement”) is effective as of the 21st of August 2017, (“Effective Date”), between ThermoGenesis Corp., a Delaware corporation with principal office 2711 Citrus Road, Rancho Cordova, CA 95742, USA and Boyalife W.S.N. a China corporation with its office at 88 Meiliang Road, Wuxi City, People’s Republic of China 214092 (“Distributor”).

R E C I T A L S

A.     ThermoGenesis’ business is to design, manufacture (directly or indirectly through manufacturing subcontractors) and sell medical devices and other products which utilize its proprietary thermodynamic and/or archiving technology for the processing of biological substances, including the concentration and cryopreservation of tissue and blood components.

B.     Distributor has facilities and experience in the distribution, sale and service of medical devices in the Territory (defined below), and desires to become the distributor and an authorized service provider for the Products (defined below), pursuant to the terms of this Agreement.

A G R E E M E N T

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1.        DEFINITIONS.

When used herein, capitalized terms shall have the following meanings:

“Affiliate” means, in respect of any specified Person, any other Person which, but only for so long as such other Person, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, through the ownership of voting securities or other equity interests, and the terms “controlled” and “common control” have correlative meanings.

“Applicable ThermoGenesis Technology” has that meaning accorded to it in Section 9.1.3 of this Agreement.

“AXP Device” means the Auto Xpress™ System which automates the volume reduction process for cord blood and consists of a battery-operated device.

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“AXP Disposable” means the ThermoGenesis proprietary processing bag set that has integrated sampling segments.

“AXP System” means the combination of the AXP Device, the AXP Disposable and the XpressTRAK software.

“BioArchive Device” means ThermoGenesis’ computer-controlled, robotic liquid nitrogen cryopreservation and storage system that enables the freezing and managing of approximately 3,600 blood component samples.

“BioArchive Disposables” means Freezing Bag used for storage of 25 mL of fluid, Canisters which hold samples for storage in the BioArchive System, and Overwrap Bags that serve as a secondary barrier of protection to the stored cord blood sample.

“BioArchive System” means the combination of the BioArchive Device and the BioArchive Disposables and the Manual Bag Set.

“Change of Control” means (i) the direct or indirect sale or other disposition (in one or more related transactions to one or more parties) of all or substantially all of the assets of ThermoGenesis, or (ii) the direct or indirect transfer of 50% or more of the outstanding voting interest of ThermoGenesis, whether in a single transaction or series of related transactions.

“Customers” shall have the meaning accorded in Section 2.1 of this Agreement.

“Effective Date” means the date first written above.

“Field of Use” the Field of Use identified for each Product(s) on Exhibit A-1 attached hereto shall apply to the Territory for such Product(s), also listed on Exhibit A-1.

“Know-how” means any and all current and future know-how, technical information, technical knowledge, unpatentable inventions, manufacturing procedures, methods, trade secrets, processes, formulas, documentation and other tangible or intangible property or rights relating to ThermoGenesis’ products, whether or not capable of precise separate description but which alone, or when accumulated, gives to the Person acquiring it an ability to study, test, formulate, manufacture, produce or market something which it otherwise would not have known to study, test, formulate, manufacture, produce or market in the same or similar way.

“Manual Bag Set” means ThermoGenesis’ proprietary Transfer/Freezing Bag Set for use in manual volume reduction and storage of 25 mL cord blood samples.

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“Person” means any natural person or any corporation, partnership, limited liability company, business association, joint venture or other entity.

“Product(s)” means the devices, accessories and parts listed in Exhibit A attached hereto.

“Quota” means the annual minimum unit volumes of Products to be purchased by Distributor as identified for each Product(s) in Exhibit F.

“Term” means the time duration as stated in Section 2.1.1 of this Agreement.

“Territory” means the territory identified for each Product(s) on Exhibit A-1, as limited therein by the Field of Use for each designated Product(s).

“ThermoGenesis Marks” means any and all trademarks, trade names, service marks, service names, logos and similar proprietary rights whether now or in the future owned, controlled or licensed by ThermoGenesis and currently used or to be used in connection with the Product(s).

“ThermoGenesis’ Point of Shipment” as defined in the Uniform Commercial Code refers to ThermoGenesis’ manufacturing facilities and may be Rancho Cordova, Costa Rica, or a ThermoGenesis designated warehouse or supplier.

“XpressTRAK™” means ThermoGenesis’ proprietary GMP-compliant AXP operating software.

2.        DISTRIBUTION RIGHTS AND OBLIGATIONS.

2.1     Appointment as Distributor. Subject to existing distributors pending termination, if any, and the limitations as noted in Exhibit A-1, ThermoGenesis hereby appoints Distributor as ThermoGenesis’ distributor of the Product(s), and parts that are components thereof, to all existing and potential customers (“Customers”) within the Territory identified in Exhibit A-1. The rights and obligations as to the Product(s), and parts that are components thereof, shall be effective as of the Effective Date of Agreement. Additionally, Distributor shall service the Product(s) in the Territory under the terms set forth in this Agreement.

2.1.1     Term of Initial Appointment. Subject to earlier termination or renewal as provided in Section 10 below, Distributor’s initial appointment shall be for a term of three (3) years from the Effective Date of this Agreement (the “Term”).

2.2      No Appointment of Sub-Distributors. Distributor may not appoint any Persons to act as sub-distributors within any portion of the Territory, and any attempt to assign to any Person any or all of Distributor’s rights hereunder, and any attempt to delegate to any such Person any or all of Distributor’s obligations hereunder shall be null and void, and will not bind ThermoGenesis.

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2.3     Promotion of Product(s); Advertising.

2.3.1     Promotion. During the Term of this Agreement, Distributor shall use its good faith commercially reasonable efforts to develop a customer base and promote the sale of the Product(s) within the Territory. Distributor shall advertise and otherwise promote the Product(s) in a commercially reasonable manner and furnish appropriate Product(s) information (Instruction For Use and Operator Manuals) and promotional materials to its Customers.

2.3.2     Use of ThermoGenesis Marks. Distributor may refer to and advertise itself as an “Authorized Distributor” and “Authorized Service Provider” of the Product(s) within all or any portion of the Territory, and may indicate on its stationery, business cards or other printed materials that it is an “Authorized Distributor” and “Authorized Service Provider” of Product(s) and, subject to ThermoGenesis’ prior written approval, may have ThermoGenesis Marks imprinted thereon.

2.4     Forecasting of Product(s). Distributor shall provide to ThermoGenesis a rolling quarterly forecast of Distributor's requirements for the Product(s) for the twelve (12) month period commencing that quarter. The requirements for the first quarter period of each rolling quarterly forecast shall constitute a firm and binding Purchase Order for Product(s). The remaining rolling quarterly forecast shall constitute non-binding estimates of Product(s) and requirements for the period described, however the 2nd quarter in any forecast shall be varied by no more than +/- 20% in the subsequent binding forecast, unless mutually agreed by the parties. The 3rd and 4th quarter of each forecast are non-binding and may be modified by Distributor at any time in its sole discretion. Any aggregate increase in firm order quantities over forecasted quantities for a given quarter in excess of 20% shall be subject to mutual agreement and the capacity constraints of ThermoGenesis. Within three (3) months after the Effective Date of this Agreement, ThermoGenesis and Distributor will mutually determine the annual Quotas for each Product and list such Quotas in Exhibit F, hereto. Thereafter, ThermoGenesis retains the right to reevaluate the Quotas and, with Distributor, mutually determine and update the Quotas at least once per year or at such greater frequency as the parties may mutually agree in writing.

In the event annual Quota commitments have not been mutually established by the parties at the commencement of any calendar year during the term of this Agreement, ThermoGenesis shall have the right to unilaterally set yearly Quotas for such calendar year at any time during said calendar year. Such unilaterally established Quotas shall not exceed 10% growth over the previous year. Further, Distributor acknowledges and agrees that said revised Quotas shall be deemed “reasonable” absent a showing of lack of good faith by ThermoGenesis in establishing such Quotas.

2.5     Translation of Materials. Distributor shall bear the cost and responsibility of translating and/or preparing sales literature and other promotional materials for the Product(s) in the languages of the Territory, as needed, to effectively market the Products in the Territory. Distributor will be responsible for translations which may be required for any labeling or package insert associated with ThermoGenesis’ products.

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2.6      Trademark License. ThermoGenesis hereby grants to Distributor the non-exclusive, royalty-free right and license to use designated ThermoGenesis Marks associated with the Product(s) in connection with the marketing, distribution, sale and post-sale field service, technical assistance and support of the Product(s). Distributor agrees not to alter, obliterate, deface or remove any ThermoGenesis Marks displayed on any Product(s) or its packaging, or add any name, brand or trademark thereto without the prior written consent of ThermoGenesis. Notwithstanding the foregoing, Distributor’s trademarks may be displayed on Product(s) packaging, and the parties shall reasonably cooperate with one another to ensure that all Product(s) packaging and labeling prepared by ThermoGenesis complies with applicable law. Except as provided in this Agreement, nothing herein shall grant to Distributor any right, title or interest in the ThermoGenesis Marks, which right, title and interest shall remain fully and solely vested in ThermoGenesis. Distributor shall immediately notify ThermoGenesis if, during the term of this Agreement, Distributor becomes aware of any other Person who is using any trademark, trade name, service mark, service name or logo that is substantially or confusingly similar to those owned or used by Distributor pursuant to the authority granted by ThermoGenesis hereunder.

2.7      Reservation of Title. ThermoGenesis reserves to itself and retains all right, title and interest in and to the Applicable ThermoGenesis Technology and to any modifications, enhancements, improvements and upgrades thereto. Distributor may not duplicate, translate, decompile, reverse engineer or adapt the Product(s) without ThermoGenesis’ prior written consent.

2.8    No Other Rights. Except as expressly provided in this Agreement, no right, title, or interest is granted by ThermoGenesis to Distributor hereunder. ThermoGenesis may distribute products other than the Product(s) within the Territory, either directly or indirectly through distributors, and no right, title or interest is granted by ThermoGenesis to Distributor relating to such product and parts.

3.        APPOINTMENT AS SERVICE PROVIDER AND OBLIGATIONS.

3.1      Appointment as Authorized Service provider. ThermoGenesis hereby appoints Distributor as an exclusive service provider to repair and service the Product(s), and parts that are components thereof, including warranty service as applicable, to all Customers within the Territory.

3.1.1     Localized Depot Service Center Quality Requirement. In addition to the obligations as stated in Agreement, Distributor is authorized to provide repairs and preventative maintenance for ThermoGenesis products in localized Depot Service Centers and shall adhere to the quality requirements (as defined in Exhibit I).

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3.2      Clinical Application Support Specialist and Technical Service Personnel Qualifications, Training, and Availability. Subject to Section 3.1.1, Distributor shall have qualified application support specialist and technical service personnel that have appropriate experience in the troubleshooting, problem solving, customer training and repair and maintenance of medical products that are substantially similar to the Products. The number of application support specialist and technical service personnel shall be sufficient to provide application support and service to the ThermoGenesis customer base in their Territory and should be adjusted as needed to adequately support the installed base. Primary support and service personnel must be able to communicate in English in order to complete training as defined in Section 3.3 and for future communications with ThermoGenesis support engineers. Application support specialist and technical service personnel must be certified by ThermoGenesis before they are authorized to perform service on the Product(s). Technical service personnel must pass written examinations provided by ThermoGenesis before they receive their certification. There will be a ninety (90)-day probation period after certification to review the service program at each new distributor location. Special training qualification is required in order to perform installation and operator training of AXP and BioArchive Systems. Service personnel assigned to the support of ThermoGenesis Product(s) must be available to provide initial service contact to customers within twenty four (24) hours for customers with non-operational equipment. Once an initial assessment has been made, should a product require return to a manufacture site for repair, Distributor shall provide an AXP System device loaner, new or refurbished unit, to Customer within a reasonable time.

3.3     Clinical Application Support Specialist and Technical Service Personnel Training. ThermoGenesis shall provide application support and technical service training for Distributor’s field service personnel to enable Distributor to perform post-sale troubleshooting problem solving customer training and field service, technical assistance and support for its Customers, the frequency of such training shall be in the sole discretion of ThermoGenesis, provided, however, that at least one such training session shall be provided by ThermoGenesis within three (3) months of the date of this Agreement. Such training shall be conducted, at ThermoGenesis’ election, at ThermoGenesis’ Rancho Cordova, California facilities or at Distributor’s facilities in Territory. ThermoGenesis will provide such training without charge; provided, however, that Distributor shall bear all out-of-pocket costs incurred in connection with such training, including travel, airfare and lodging expenses, as well as the reimbursement of such out-of-pocket expenses reasonably incurred by ThermoGenesis to send a training representative to Distributor’s facilities in Territory. In addition, ThermoGenesis will provide Product(s) updates and service bulletins as they become available in English.

3.4     Facilities and Inventory; Repair and Replacement Parts Stock. Subject to Section 3.1.1, Distributor shall maintain sufficient spare parts, warehousing and distribution facilities and warranty service centers within the Territory to fulfill adequately the reasonable needs of its Customers for Product(s) and parts and to service the Product(s) during the life of the Product(s), including maintaining an adequate supply of loaner or refurbished units to be used in connection with service repairs in cases where a unit requires return to a manufacture site for repair.

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3.5     Other Information Reporting. Subject to Section 3.1.1, Distributor shall provide to ThermoGenesis, at Distributor’s expense and in English, each and every quality and/or service complaint within three (3) business days after receipt of such complaint by Customer. The complaint reporting form defined in Exhibit H should be used for reporting the information to ThermoGenesis. In addition, Distributor shall notify ThermoGenesis of any “incident” (as defined in Exhibit D) within twenty (24) hours as outlined in the vigilance procedure attached hereto as Exhibit D. Detailed information of service performed or actions taken to resolve the reported complaint shall be communicated to ThermoGenesis within three (3) business days after completion of the actions.

3.6     Post-Sale Clinical Application Support and Field Service, Technical Assistance, Support and Warranty Service. Distributor shall provide to its Customers post-sale clinical application support and field technical service, technical assistance and support for Product(s) sold by Distributor in the Territory. At the request of Customers, Distributor shall (a) install and service the Product(s), (b) perform all required inspections of installation and required service and preventative maintenance of the Product(s), as applicable, (c) timely respond to Customer calls and claims with respect to the Product(s), and (d) provide any applicable training for Customers. If, during the Term or any additional period agreed upon by both parties, Distributor performs any warranty service for its Customers during the warranty period for any Product(s), ThermoGenesis shall reimburse Distributor for the costs and expenses reasonably incurred, excluding labor and costs by Distributor in performing such service, which amount shall not exceed ThermoGenesis’ standard reimbursement schedule for such repair or have been pre-approved by ThermoGenesis. The cost of any field service or other support for any Product(s) performed by Distributor after the expiration of the applicable warranty period for such Product(s) shall be agreed upon between Distributor and the customers, unless such customer had previously agreed to the cost prior to the date hereof, and in such case the cost shall be the previously agreed price until Distributor and ThermoGenesis agree on subsequent new price. Distributor shall document all service visits and work performed (as defined in Exhibit G) and Distributor shall furnish to ThermoGenesis copies of any written reports prepared by Distributor with respect to repairs made by Distributor to the Product(s). Distributor shall contact ThermoGenesis regarding return of parts and shall return all required parts under warranty for analysis within thirty (30) days of repair to ThermoGenesis.

4.       TERMS OF PURCHASE OF PRODUCT.

4.1     Terms and Conditions. All purchases of Product(s) hereunder shall be subject to the provisions of this Agreement. Unless otherwise agreed in writing, nothing contained in any purchase order submitted pursuant to this Agreement shall in any way modify or add any provision to this Agreement. In the event of a conflict between the terms of any purchase order and the provisions of this Agreement, the provisions of this Agreement shall govern.

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4.2     Prices. All prices for Product(s) purchased by Distributor hereunder shall be Ex Works (EXW), ThermoGenesis’ Point of Shipment. The initial price to Distributor for each Product(s) is set forth opposite such Product(s) in Exhibit A, and such initial price will remain fixed through the end of ThermoGenesis’ fiscal year (ending June 30th). Thereafter, the purchase price to Distributor for such Product(s) may be increased or decreased by ThermoGenesis upon sixty (60) days’ prior written notice to Distributor.

4.3     Certain Taxes. The parties acknowledge that the purchase prices of Product(s) set forth in Exhibit A do not include any sales, excise, use, value added or other government taxes or duties that may be applicable to the export, import or purchase of the Product(s), including all income and income-based taxes imposed on ThermoGenesis under applicable laws in Territory, which taxes shall be the sole responsibility of and Distributor agrees that it will bear all such taxes and duties. When ThermoGenesis has the legal obligation to collect and/or pay such taxes or duties, the appropriate amount shall be added to Distributor’s invoice and paid by Distributor to ThermoGenesis, unless Distributor provides ThermoGenesis with a valid tax exemption certificate authorized by the appropriate governmental taxing authority, or provides proof of payment to such authority.

4.4    Order and Acceptance. All orders for Product(s) shall be by means of a signed written purchase order which shall be submitted to ThermoGenesis at ThermoGenesis’ address for notice purposes set forth in Section 12.4, and shall request a delivery date. Orders may be placed by telephone, facsimile transmission or, upon the parties’ agreement, on ThermoGenesis’ Web-Site or by e-mail. ThermoGenesis shall notify Distributor in writing within a reasonable period of time from submission of the purchase order of any rejected order. ThermoGenesis shall have no liability to Distributor with respect to purchase orders that are not accepted.

4.5     Invoicing; Payment. ThermoGenesis shall submit an invoice to Distributor with each shipment of Product(s) ordered by Distributor. Each invoice shall be due and payable in the manner agreed to by the parties set forth in Exhibit E. All invoices shall be sent to Distributor’s address for notice purposes set forth in Section 12.4, without regard to the actual shipping address for the Product(s). Each such invoice shall state Distributor’s aggregate and unit purchase price for Product(s) in the relevant shipment, plus any freight, taxes or other costs incident to the purchase or shipment initially paid by ThermoGenesis and to be borne by Distributor hereunder. Distributor shall make all payments to ThermoGenesis under this Agreement in United States dollars in immediately available funds to a bank account designated by ThermoGenesis in such invoice, or otherwise designated by ThermoGenesis in writing. Distributor shall not take any credits or offsets against amounts billed Distributor by ThermoGenesis without ThermoGenesis’ prior written consent.

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4.6     Shipping; Risk of Loss.

4.6.1     All Product(s) delivered by ThermoGenesis pursuant to this Agreement shall be suitably packed for surface or air shipment, in Distributor’s sole discretion, in ThermoGenesis’ standard shipping cartons, marked for shipment to such location or locations as Distributor may designate, and delivered to Distributor or its carrier, EXW, ThermoGenesis’ Point of Shipment. Risk of loss of Product(s) shall pass to Distributor upon delivery to the carrier at the EXW Point of Shipment.

4.6.2     ThermoGenesis shall ship all Product(s) in accordance with Distributor’s delivery instructions specified in Distributor’s purchase orders; provided, however, that if Distributor does not provide delivery instructions with respect to the carrier to be used, ThermoGenesis may use its customary carrier. Partial shipments are allowed. All freight, insurance and other shipping expenses, as well as any special packing expenses, shall be paid by Distributor. Distributor shall also bear all applicable taxes and duties that may be assessed against the Product(s) and parts after delivery to the carrier EXW, ThermoGenesis’ Point of Shipment.

4.6.3     ThermoGenesis shall use its good faith efforts to ship the Product(s) within a reasonable amount of time after receipt and acceptance of Distributor’s purchase order for the Product(s), consistent with ThermoGenesis’ shipping procedures in place from time to time. All shipments of Product(s) shall be deemed to conform to the relevant purchase order unless ThermoGenesis receives from Distributor, no later than fifteen (15) days after the receiving date of a given shipment, written notice specifying the shipment, the purchase order number and the exact nature of the discrepancy between the shipment and the order.

5.        WARRANTIES; REMEDIES FOR NON-CONFORMING PRODUCT.

5.1  Standard Warranty. ThermoGenesis’ standard warranty is attached hereto as Exhibit C.

5.2     Customer Warranty. Distributor shall have the right to pass on to their Customers the Product(s) warranties set forth in Section 5.1, except for the BioArchive System. For the BioArchive System, the Distributor shall have the right to pass on to their Customers the Product(s) warranties as set for in Section 5.1 for a period of three years from the date of purchase of the BioArchive System. After three years, prior to passing ThermoGenesis’ standard warranty to their Customer, the Distributor shall pay ThermoGenesis a fee of $6,000 USD and allow ThermoGenesis the right to inspect the BioArchive System prior to sale or installation to ensure it has been stored and handled correctly. The inspection will be at the sole discretion of ThermoGenesis and it will be the Distributors responsibility to repair or replace any damage discovered during the inspection. This cost will be in addition to the $6,000 USD inspection fee. A copy of the Product(s) warranty will be included in ThermoGenesis’ packaging of the Product(s) and parts.

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5.3     Return Materials Procedure. There are no rights of return for cash. Product(s) returns are allowed under ThermoGenesis’ warranty program. All Product(s) returns must be approved by ThermoGenesis and assigned a Return Material Authorization (“RMA”) number. To obtain an RMA number prior to return, the Distributor shall notify ThermoGenesis of the description of the Product(s), quantity, reason for return, serial number of device and date of purchase of Product(s) to be returned. All Product(s) returns from Distributor shall be sent directly to ThermoGenesis and be insured by Distributor. The RMA number shall be prominently displayed on the outside of the shipping box and the Product(s) shall be packaged to protect them from shipping damage. Repair for costs of damage due to improper packaging will be the responsibility of the Distributor.

6.         ADDITIONAL OBLIGATIONS OF DISTRIBUTOR.

6.1    Compliance with Laws. Distributor shall comply in all material respects with the laws and regulations (including, without limitation, health and safety regulations) applicable to the marketing, distribution, sale and service of Product(s) within the Territory. Distributor shall monitor the appropriate information sources in the Territory for material changes in such laws and regulations relating to the distribution of Product(s) within the Territory and notify ThermoGenesis in writing of all such material changes. The Distributor shall have a defined process for tracking customer shipments by lot and/or serial number to assist ThermoGenesis in event of a field corrective action.

6.2      Registrations, Licenses and Permits (other than CE Marks). If and as required from time to time under the laws of any province or state within the Territory, Distributor shall, at its expense, apply for and use its commercially reasonable efforts to obtain all registrations, licenses and permits that Distributor deems necessary to market, distribute, sell and service the Product(s) within such Territory, at no charge if ThermoGenesis makes a distribution partner change. Distributor shall furnish to ThermoGenesis copies of all applications, and all registrations, licenses and permits obtained therefrom, for the Product(s). Upon the expiration or earlier termination of this Agreement, such registrations, licenses and permits shall be transferred to ThermoGenesis or to a Person reasonably designated by ThermoGenesis, to the extent permitted by the terms of such registrations, licenses or permits and by applicable law, and ThermoGenesis shall reimburse Distributor for the expenses reasonably incurred to transfer the same.

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6.3     U.S. Export Controls. Distributor understands and acknowledges that ThermoGenesis is subject to regulation by agencies of the United States Government, including, without limitation, the United States Department of Commerce and the U.S. Food and Drug Administration, which prohibit export or diversion of certain products and technology to certain countries. Any and all obligations of ThermoGenesis to provide the Product(s), documentation, or any media in which any of the foregoing is contained, as well as any other technical assistance shall be subject in all respects to such United States laws and regulations as shall from time to time govern the license and delivery of technology and products abroad by Persons subject to the jurisdiction of the United States, including the Export Administration Act of 1979, as amended, any successor legislation, and the Export Administration Regulations issued by the Department of Commerce, Bureau of Export Administration. Distributor agrees to cooperate with ThermoGenesis, including, without limitation, providing required documentation, in order to obtain export licenses or exemptions therefrom.

6.4     Customer Notification. ThermoGenesis will be responsible for initiating product recalls. Distributor shall be responsible for notifying Customers of Product(s) and part recalls. Distributor shall submit a written report to ThermoGenesis of the recall status of the Product(s) or parts.

6.5    Customer Database Distributor shall provide to ThermoGenesis a customer database within three (3) months of execution of this contract and update the database at least once per year to include end user customer name, contact name, address, e-mail, phone number.

6.5.1     Quarterly Sales Analysis Report. Distributor shall provide a quarterly sales analysis containing relevant device and disposable product data, including part number, unit quantity, and selling price for all customers in the Territory. The sales analysis report will be sent to ThermoGenesis on or before thirty (30) days following the last day of ThermoGenesis’ fiscal year quarter. ThermoGenesis fiscal quarters are defined as January to March - 3^rd quarter, April to June - 4^th quarter, July to September - 1^st quarter and October to December - 2^nd quarter.

6.6     Development of the Cord Blood Processing, Cryopreservation and Storage Market Distributor will exert commercially reasonable best efforts to market, sell, distribute, and service the Product(s) in the Territory, consistent with the commercial efforts that Distributor would use to market and service its other products, and shall maintain a competent and adequate sales and technical service force trained in the marketing, sales, maintenance, and repair of the Product(s).

6.6.1     Distributor will utilize sufficient resources to develop and expand the installed base of Products in the assigned Territory and will hire, train and manage any necessary additional dedicated sales and technical service personnel to achieve the annual minimum sales unit Quota as defined in Exhibit F.

6.6.2     Distributor shall maintain a training program for sales and application support personnel in connection with demonstrations, use and sale of the Product(s), troubleshooting and problem resolution, and attend such scientific and clinical training programs, trade shows, exhibits and sales meetings in the Territory annually as may be agreed upon by Distributor and ThermoGenesis. In conjunction with ThermoGenesis, Distributor will establish, manage, and make a reasonable financial contribution to facilitate an annual BioArchive Users Group meeting in a different country each year of the Distribution Agreement. The purpose of the BioArchive Users Group will be to provide "real life" opportunities for sharing scientific and technical best practices learning from the shared experience of the members and shall provide other functions such as speakers at group meetings.

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6.7      No Conflicting Commitments. Distributor may not enter into any third party commitments or contracts with end-user customers for ThermoGenesis product sales or service and repair that supersedes or conflicts with the terms and conditions of Agreement.

7.         OBLIGATIONS OF THERMOGENESIS.

7.1       Compliance with Laws. ThermoGenesis shall comply in all material respects with all laws and regulations within the United States applicable to the manufacture, labeling, packaging and sale of the Product(s).

7.2     Support. ThermoGenesis shall provide consultation to Distributor concerning technical aspects and use of the Product(s) from time to time as reasonably requested by Distributor. Post warranty technical support and service assistance shall be provided to Distributor as described in Exhibit B, attached and incorporated herein.

7.3      Scientific and Technical Information. ThermoGenesis shall provide to Distributor scientific and technical information available to ThermoGenesis and required for Distributor to obtain any registrations, licenses and permits required for the sale and distribution of the Product(s) within the Territory, or to respond to inquiries from Customers, or governmental or regulatory authorities.

7.4      Product(s) Training. ThermoGenesis shall provide Product(s) training for Distributor’s product managers and clinical application support specialists on an as-needed basis to enable Distributor to promote the sale of Product(s) and parts and to perform post-sale field service, customer training, technical assistance and support for its Customers. Such Product(s) training shall be conducted, at ThermoGenesis’ election, at ThermoGenesis’ facilities or at Distributor’s facilities in Territory, and will be free of charge, provided, however, that Distributor shall be responsible for all out-of-pocket expenses incurred in connection with such Product(s) training, including travel, airfare and lodging expenses incurred by Distributor’s personnel while attending such training in California. In the case that ThermoGenesis provides training at Distributor’s facilities in Territory at Distributor’s request, Distributor will be responsible for all costs incurred in connection with such training (to be charged on a day-by-day basis), and including the reimbursement of out-of-pocket expenses reasonably incurred by ThermoGenesis in sending a training representative to the Distributor’s facilities in Territory. In addition, ThermoGenesis will provide Product(s) updates and service bulletins as they become available.

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7.5    Information Reporting. ThermoGenesis shall provide to Distributor, at ThermoGenesis’ expense, (i) information regarding any discovered defects in the Product(s), or any malfunction or deterioration in the performance of the Product(s), and (ii) any inadequacy in the labeling or the instructions for use. Distributor is responsible for disseminating the information to customers and service representatives as appropriate.

7.6      Responsible Person. Distributor shall notify the competent authorities in Territory that it has been designated as the person responsible for the marketing and distribution of the Product(s) within the Territory, and Distributor's address for notice purposes in Section 12.4 shall be the registered place of business for such purposes.

8.        JOINT OPERATING COMMITTEE

8.1     Upon the Effective Date, ThermoGenesis and Distributor shall establish a joint operating committee (“JOC”). The JOC shall be comprised of two (2) members appointed by ThermoGenesis and two (2) members appointed by Distributor. The JOC shall have the duties and responsibilities set forth in this Section.

8.2    The JOC shall discuss and work to reach consensus on the management and administration of the responsibilities and obligations of the Parties under the Agreement. If the JOC is unable to reach consensus on a matter, the issue shall be resolved by the senior most executives of the Parties responsible for the division administering the Agreement. If such senior executives cannot reach consensus and resolution, the Parties shall continue to comply with the express terms of the Agreement, and each Party shall have the right to decide how to proceed within each Party’s respective area of responsibility.

8.3    The JOC will meet no less than four (4) times a year, either in person or via video conferencing to review, among other things, sales performance, progress on sales metrics, the operating plan and budget, on hand inventory levels, customer usage information, and make such adjustments and changes as are agreed to by the Parties.

9.        REPRESENTATIONS AND WARRANTIES OF THE PARTIES.

9.1      ThermoGenesis. ThermoGenesis hereby represents and warrants to Distributor that:

9.1.1     ThermoGenesis is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, and has all corporate power and authority to own, lease and operate its properties and to carry on its businesses as it is currently being conducted. ThermoGenesis has all necessary corporate power and authority to enter into this Agreement and to perform its obligations hereunder. This Agreement has been duly authorized, executed and delivered by ThermoGenesis.

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9.1.2     The execution, delivery and performance by ThermoGenesis of this Agreement and the consummation of the transactions contemplated hereby do not violate or conflict with the Certificate of Incorporation or Bylaws of ThermoGenesis, any material contract, agreement or instrument to which ThermoGenesis is a party or by which it or its properties are bound, or any judgment, decree, order or award of any court, governmental body or arbitrator by which ThermoGenesis is bound, or any law, rule or regulation applicable to ThermoGenesis.

9.1.3     ThermoGenesis is the sole, exclusive and lawful owner of all right, title and interest in and to the applicable ThermoGenesis technology incorporated in the Product(s) (“Applicable ThermoGenesis Technology”) and to the ThermoGenesis Marks, free and clear of all liens, claims, security interests or other restrictions or encumbrances. If this is an exclusive agreement, ThermoGenesis has not granted to any other Person any license, franchise or other rights to acquire, use or exploit the Applicable ThermoGenesis Technology within the Territory (or any portion thereof). ThermoGenesis has the right to grant the distribution and other rights to Distributor hereunder, without the consent of any other Person.

9.2      Distributor. Distributor hereby represents and warrants to ThermoGenesis that:

9.2.1     Distributor is a company duly organized and existing under the laws of Territory, and has all power and authority to own, lease and operate its properties and to carry on its businesses as currently conducted. Distributor has all necessary power and authority to enter into this Agreement and to perform its obligations hereunder. This Agreement has been duly authorized, executed and delivered by Distributor.

9.2.2    The execution, delivery and performance by Distributor of this Agreement and the consummation of the transactions contemplated hereby do not violate or conflict with the Certificate of Incorporation or Bylaws of Distributor, any material contract, agreement or instrument to which Distributor is a party or by which it or its properties are bound, or any judgment, decree, order or award of any court, governmental body or arbitrator by which Distributor is bound, or any law, rule or regulation applicable to Distributor.

9.2.3     Distributor and its Affiliates have the distribution facilities and personnel reasonably necessary to perform its functions and otherwise carry out its obligations under the terms of this Agreement.

9.2.4     Except as disclosed on Schedule 9.2.4, no owner of Distributor or its Affiliates are employed with, have any employment relationship or is independent contractor with ThermoGenesis.

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10.      TERM AND TERMINATION.

10.1   Term. The term of this Agreement shall commence on the Effective Date hereof and shall continue for three (3) years, unless earlier terminated pursuant to Section 10.2. This Agreement may be renewed for successive two (2) year periods by written notice from ThermoGenesis at least ninety (90) days prior to expiration of the then current term of this Agreement.

10.2    Termination of Agreement. This Agreement may be terminated as follows:

10.2.1     The parties may terminate this Agreement upon their mutual written agreement.

10.2.2     ThermoGenesis may immediately terminate this Agreement if Distributor breaches any of its material representations, warranties, covenants, annual growth minimums, payment terms or obligations under this Agreement.

10.2.3     Distributor may terminate this Agreement if ThermoGenesis breaches any of its material representations, warranties, covenants or obligations under this Agreement and such breach continues for a period of sixty (60) days following ThermoGenesis’ receipt of written notice from Distributor setting forth the nature of such breach; provided, however, that in the event such breach is not cured within such sixty (60) day period, Distributor may not terminate this Agreement if ThermoGenesis promptly commences to cure such breach within such sixty (60) day period and thereafter diligently pursues such cure to completion; provided further, however, that the cure period for any such breach shall not exceed ninety (90) days from the date of ThermoGenesis’ receipt of written notice from Distributor.

10.2.4     Either party may terminate immediately this Agreement by written notice upon the occurrence of any of the following events: (i) the other party is or becomes insolvent or unable to pay its debts as they become due within the meaning of the United States Bankruptcy Code (or any successor statute) or any analogous foreign statute; or (ii) the other party appoints or has appointed a receiver for all or substantially all of its assets, or makes an assignment for the benefit of its creditors; or (iii) the other party files a voluntary petition under the United States Bankruptcy Code (or any successor statute) or any analogous foreign statute; or (iv) the other party has filed against it an involuntary petition under the United States Bankruptcy Code (or any successor statute) or any analogous foreign statute, and such petition is not dismissed within ninety (90) days.

10.2.5     ThermoGenesis may terminate this agreement if Distributor fails to purchase Quota commitments on Exhibit F, and if this issue fails to be resolved in good faith discussions between ThermoGenesis and Distributor within a ninety (90)-day period following notice by ThermoGenesis to Distributor of such failure.

10.2.6     ThermoGenesis may terminate this agreement if Distributor fails to complete clinical application specialist support and technical service training within three (3) months from Effective date of Agreement.

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10.3    Effect of Termination.

10.3.1     The expiration or earlier termination of this Agreement shall not relieve any party of any of its rights or liabilities arising prior to or upon such expiration or earlier termination.

10.3.2     Within ten (10) business days following the effective date of the expiration or earlier termination of this Agreement, Distributor shall provide to ThermoGenesis a complete inventory of Product(s) and parts in Distributor’s possession, in transit between Distributor’s authorized locations or in transit to Distributor from ThermoGenesis or otherwise in Distributor’s control. ThermoGenesis may inspect Distributor’s Product(s) inventory and audit Distributor's records in the manner provided herein above.

10.3.3     Notwithstanding the expiration or earlier termination of this Agreement, Distributor may continue to market, distribute and sell Product(s) and parts within the Territory after the expiration or earlier termination of this Agreement until the earlier of (i) the date that Distributor has sold all of its Product(s) inventory existing as of the effective date of expiration or earlier termination and (ii) the six (6)-month anniversary of the effective date of expiration or earlier termination.

10.3.4      Notwithstanding Section 10.3.3, upon the expiration or earlier termination of this Agreement, Distributor may not enter into any new service contracts as an authorized service provider; provided, however, that Distributor may continue to provide service and repairs under existing service contracts through the then current terms of such contracts. Distributor may not renew such existing contracts, and upon the expiration of the then current term shall transfer each such contract to ThermoGenesis. Additionally, Distributor shall not be reimbursed for warranty work performed after the expiration or termination of this Agreement unless pre-approved by ThermoGenesis. ThermoGenesis and Distributor shall work together and perform further actions as needed to transition all aspects of Product(s) service to ThermoGenesis so that Customers’ service and warranty needs are met after the expiration or termination of this Agreement.

10.4     Return of Marketing Materials. Distributor shall return to ThermoGenesis all promotional materials for Product(s) previously furnished by ThermoGenesis and in Distributor’s possession at the time that Distributor is no longer entitled to distribute and sell any Product(s) hereunder and at this time Distributor shall no longer use the designations “Authorized Distributor” and “Authorized Service Provider” in connection with ThermoGenesis’ Product(s) on its business cards, stationery and other printed materials.

10.5    Force Majeure. Neither party shall be liable to the other party for non-performance of or delay in performing its obligations hereunder to the extent that performance is rendered impossible by strike, riot, war, acts of God, earthquake, fire, flood, governmental acts or orders or restrictions, failure of suppliers, or any other reason to the extent that the failure to perform is beyond the reasonable control of the non-performing party.

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11.      CONFIDENTIALITY.

11.1   Confidentiality. Each party acknowledges that, in the course of performing its duties and obligations under this Agreement, certain information that is confidential or proprietary to such party (“Confidential Information”) will be furnished by the other party or such other party’s representatives. Each party agrees that any Confidential Information furnished by the other party or such other party’s representatives will not be used by it or its representatives except in connection with, and for the purposes of, the promotion, marketing, distribution and sale of Product(s) and parts under this Agreement and, except as provided herein, will not be disclosed by it or its representatives without the prior written consent of the other party. Notwithstanding the foregoing, the parties agree that all Confidential Information shall be clearly marked “CONFIDENTIAL” or, if furnished in oral form, shall be stated to be confidential by the party disclosing such information at the time of such disclosure and reduced to a writing by the party disclosing such information which is furnished to the other party or such other party's representatives within forty-five (45) days after such disclosure.

11.2    Exceptions. The confidentiality obligations of each party under Section 11.1 do not extend to any Confidential Information furnished by the other party or such other party’s representatives that (i) is or becomes generally available to the public other than as a result of a disclosure by such party or its representatives, (ii) was available to such party or its representatives on a non-confidential basis prior to its disclosure thereto by the other party or such other party’s representatives, (iii) was independently developed without the use of the other party’s Confidential Information by representatives of such party who did not have access to the other party’s Confidential Information, as established by contemporaneous written records, or (iv) becomes available to such party or its representatives on an non-confidential basis from a source other than the other party or such other party’s representatives; provided, however, that such source is not bound by a confidentiality agreement with the other party or such other party's representatives.

11.3   Compelled Disclosure. In the event that either party or its representatives are requested or become legally compelled (by oral questions, interrogatories, requests for information or document subpoena, civil investigative demand or similar process) to disclose any Confidential Information furnished by the other party or such other party’s representatives or the fact that such Confidential Information has been made available to it, such party agrees that it or its representatives, as the case may be, will provide the other party with prompt written notice of such request(s) so that the other party may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement. In the event that such protective order or other remedy is not obtained, or that the other party waives compliance with the provisions of this Agreement, such party agrees that it will furnish only that portion of such Confidential Information that is legally required and will exercise its best efforts to obtain reliable assurance that confidential treatment will be accorded to that portion of such Confidential Information and other information being disclosed.

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11.4   Ownership of Confidential Information. The party disclosing or otherwise furnishing Confidential Information to the other party will retain the exclusive ownership of all right, title and interest in and to such Confidential Information.

11.5     Survival. The obligations of the parties under this Section 11 shall survive the expiration or earlier termination of this Agreement for a period of three (3) years.

12.       GENERAL PROVISIONS.

12.1    Independent Contractors. The relationship of ThermoGenesis and Distributor established by this Agreement is that of independent contractors, and nothing shall be deemed to create or imply any employer/employee, principal/agent, partner/partner or co-venturer relationship, or that the parties are participants in a common undertaking. Neither party may direct or control the activities of the other party or incur or assume any obligation on behalf of the other party or bind such other party to any obligation for any purpose whatsoever.

12.2     Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without reference to rules of conflicts or choice of laws. Any dispute or issue arising hereunder, including any alleged breach by Distributor, not resolved pursuant to Section 12.13 shall be heard, determined and resolved by an action commenced in the federal or state courts in Sacramento, California, which the parties hereby agree shall have the exclusive jurisdiction over the issues and the parties. Distributor hereby agrees to submit itself to the jurisdiction of the federal and state courts in Sacramento, California and waives the right to make any objections based on the exclusive jurisdiction or venue in such courts. The California courts shall have the right to grant all relief to which each party is or shall be entitled hereunder, including all equitable relief as the Court may deem appropriate. Distributor hereby consents to service of process by registered mail.

12.3     Entire Agreement. This Agreement, including the Exhibits, sets forth the entire agreement and understanding of the parties relating to the subject matter hereof and supersedes all prior oral and written, and all contemporary oral, negotiations, agreements and understandings with respect to the same.

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12.4     Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by email, by facsimile, or by registered or certified mail (postage prepaid, return receipt requested), to the other party at the following address (or at such other address for which such party gives notice hereunder):

If to Distributor:	____________________________
	____________________________
	____________________________
	Attn: _______________________ Title: ________________________
	Telephone:
	Facsimile:
If to ThermoGenesis	ThermoGenesis
	2711 Citrus Rd.
	Rancho Cordova, CA 95742
	Attn: Vivian Liu, COO
	Telephone: 1 (916) 858-5100
	Facsimile: (916) 858-5199

12.5     Assignment and Binding Effect. Except as otherwise provided in this Agreement, neither party may, directly or indirectly, assign its rights or delegate its duties under this Agreement without the prior written consent of the other party. No permitted assignment of rights or delegation of duties under this Agreement shall relieve the assigning or delegating party of its liabilities hereunder. For purposes of this Agreement, either party shall be deemed to have assigned this Agreement if any Person other than an Affiliate of such party purchases or otherwise acquires more than 50% of the outstanding voting securities of such party or more than 50% of the total assets of such party. This Agreement is binding upon, and inures to the benefit of, the parties and their respective successors and permitted assigns.

12.5.1     Change of Control. Notwithstanding the provisions of Section 12.5, an assignment by ThermoGenesis as a result of a Change of Control shall not require Distributor’s prior written consent. Distributor shall receive a written statement within ten (10) business days of the effective date of the Change of Control confirming if the new owner will take ownership of Agreement or if Agreement will be terminated.

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12.6     Partial Invalidity. If any provision of this Agreement is held to be invalid by a court of competent jurisdiction, then the remaining provisions shall remain, nevertheless, in full force and effect. The parties agree to renegotiate in good faith any term held invalid and to be bound by the mutually agreed substitute provision in order to give the most approximate effect intended by the parties.

12.7      No Waiver; Amendment. No waiver of any term or condition of this Agreement shall be valid or binding on any party unless agreed to in writing by the party to be charged. The failure of either party to enforce at any time any of the provisions of the Agreement, or the failure to require at any time performance by the other party of any of the provisions of this Agreement, shall in no way be construed to be a present or future waiver of such provisions, nor in any way affect the validity of either party to enforce each and every such provision thereafter. This Agreement may not be amended or modified except by the written agreement of the parties other than the amendment of Exhibit(s) A and F, which may be modified by ThermoGenesis on the intervals provided in this Agreement.

12.8     Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one instrument.

12.9     Consent Not Unreasonably Withheld. No party given the right to approve or consent to any matter shall unreasonably withhold condition or delay its approval or consent. The failure to respond in writing within any specified time period shall be deemed unconditioned approval of or consent to the relevant matter, provided that the party requesting such approval or consent gives written notice requesting a response at least two (2) business days prior to the expiration of the specified time period, if any.

12.10   Construction; Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Any section, recital, exhibit, schedule and party references are to this Agreement unless otherwise stated. No party, nor its counsel, shall be deemed the drafter of this Agreement for purposes of construing the provisions of this Agreement, and all provisions of this Agreement shall be construed in accordance with their fair meaning, and not strictly for or against any party.

12.11   Further Assurances. Each party agrees to cooperate fully with the other and execute such instruments, documents and agreements and take such further actions to carry out the intents and purposes of this Agreement.

12.12   Press Releases and Announcements. Except as may be contemplated hereunder, neither party may issue any press release or make any public announcement concerning the transactions contemplated by this Agreement without the prior consent of the other party, except for any releases or announcements which may be required by or, in such party’s discretion, reasonably necessary under applicable law, in which case the party proposing to make such release or announcement will allow the other party a reasonable opportunity to review and comment on such release or announcement in advance of such issuance or making.

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12.13   Alternative Dispute Resolution.

12.13.1     In the event of any controversy, dispute or claim arising out of or in connection with this Agreement, the parties will endeavor to negotiate a mutually satisfactory solution. If a mutually satisfactory solution cannot be reached, the dispute shall, at either party’s written demand, be finally settled by arbitration in accordance with the Rules of Arbitration of the International Chamber of Commerce (“Rules”) by one arbitrator appointed in accordance with such Rules. The arbitration shall take place in Sacramento, California. The arbitration shall be held in the English language. The decision of the arbitrator shall be final and binding upon the parties and their respective personal representatives, heirs, devisees, successors and assigns.  Judgment may be entered on the arbitrator’s award in any court having proper jurisdiction.  The costs of arbitration, including attorneys’ fees, shall be awarded by the arbitrator to the prevailing party. 

12.13.2  Each party agrees that service of any process, summons, notice or document by U.S. registered mail to such party’s respective address set forth above shall be effective service of process for any action, suit or proceeding with respect to any matters for which it has submitted to jurisdiction pursuant to Section 12.2 [Governing Law]. Both Parties waive application of the procedures for service of process pursuant to the Hague Convention for Service Abroad of Judicial and Extrajudicial Documents.

12.13.3     The arbitrator shall be authorized to apportion its fees and expenses and the reasonable attorney’s fees and expenses of the parties as the arbitrator deems appropriate. In the absence of any such apportionment, the prevailing party in any arbitration or other proceeding shall be entitled, in addition to any other rights and remedies it may have, to reimbursement for its expenses, including court costs and reasonable fees of attorneys and other professionals.

12.13.4     The parties agree that this Section 12.13 has been included to resolve rapidly and inexpensively any claims or disputes between them with respect to this Agreement, and that this Section 12.13 shall be grounds for dismissal of any action commenced by any party in any court with respect to any controversy, dispute or claim arising out of or relating to this Agreement (or the breach hereof).

12.14   Governing Language. The English language version of this Agreement shall control in any dispute between the parties.

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12.15   Distribution of Competitive Products. Distributor agrees not to, directly or indirectly distribute competitive products of ThermoGenesis’ Products as defined in Exhibit A during the term of Agreement and two (2) years thereafter.

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed.

ThermoGenesis:	ThermoGenesis
	/s/ Vivian Liu
	Vivian Liu COO
	Date:
DISTRIBUTOR:	Boyalife W.S.N.
	/s/ Lisa Li
	Name: Lisa Li
	Title:
	Date:

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SCHEDULE 9.2.4

DISCLOSURE OF EMPLOYMENT OR INDEPENDENT

CONTRACTOR RELATIONSHIPS

Name:

Relationship:

Phone Number:

Description:

If there is more than one employment disclosure, please provide the relative information below.

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EXHIBIT A

PRODUCT LINES & PRICING

BioArchive^® System

DESCRIPTION	PART NUMBER	LIST PRICE	DISTRIBUTOR DISCOUNT	DISTRIBUTOR PRICE US$
BioArchive System
BioArchive System-110V	8-4000-0	[*]	[*]	[*]
BioArchive System-220V	8-4000-1	[*]	[*]	[*]
Each BioArchive include:
1 BioArchive Unit
1 User Interface Computer w/Software, stand & Printer
2 Controlled Rate Freezer Units
1 Retrieval Cartridge Unit
1 Bar Code Label Printer w/ Morpher & Roll of Labels
1 Hand held Bar Code Scanner
1 Magnetic Retrieval Device
Accessories
Monitor, BioArchive Gui 17in. Flat Screen	1-00-164	[*]	[*]	[*]
Barcode scanner, hand held, USB	1-00-352	[*]	[*]	[*]
Printer, Inkjet, USB	1-00-353	[*]	[*]	[*]
Ribbon, Thermal Transfer, Eltron Printer Universal	2-00-001	[*]	[*]	[*]
Needle Positioning Jig	6-57-018	[*]	[*]	[*]
Canister Opening Tool, 100 per box	7-01-140	[*]	[*]	[*]
Fill/Seal Jig	7-63-051	[*]	[*]	[*]
Controlled Rate Freezing Module	7-65-009	[*]	[*]	[*]
Retrieval Cartridge	7-65-074	[*]	[*]	[*]
Manual Retrieval Device	7-80-001	[*]	[*]	[*]
Advanced Overwrap Sealing System (110V)	8-6200-0	[*]	[*]	[*]
Advanced Overwrap Sealing System (220V)	8-6200-1	[*]	[*]	[*]
Disposables
Bar Code Label Set (1000/roll)	6-01-036	[*]	[*]	[*]
Canister Sleeves (100 per box)	6-16-202	[*]	[*]	[*]
Overwrap Bags (100/box)	7-01-150	[*]	[*]	[*]
25ml Canisters (100 per box)	8-4360	[*]	[*]	[*]

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 BioArchive^® System (Continued) 

DESCRIPTION	PART NUMBER	LIST PRICE USD	DISTRIBUTOR DISCOUNT	DISTRIBUTOR PRICE USD
Spare Parts
Power Cord, IEC 60320 C13 to Type L, 2.5m (8ft)	50077	[*]	[*]	[*]
Power Cord, IEC 60320 C13 to Type D, 2.5m (8ft)	50078	[*]	[*]	[*]
Power Cord, IEC 60320 C13 to Type J, 2.5m (8ft)	50080	[*]	[*]	[*]
Power Cord, IEC 60320 C13 to Type H, 2.5m (8ft)	50081	[*]	[*]	[*]
Power Cord, IEC 60320 C13 to Type K, 2.5m (8ft), Hospital Grade	50149	[*]	[*]	[*]
Assembly, Thermistor Bundle/Guide Tube, Multivolt BioArchive	70052	[*]	[*]	[*]
Clamp Unit Assembly, Centron, Metal Gears	70101	[*]	[*]	[*]
Clamp Unit Assembly, Centron, Metal Gears, RFB	70101-RFB	[*]	[*]	[*]
Assy, UPS, OPTI, RoHS, Multivolt BA	70154	[*]	[*]	[*]
Spare, Periscope, BioArchive	710003	[*]	[*]	[*]
Non-RoHS Spare, Assy, Mounted E-stop CSD Board, BioArchive	710012	[*]	[*]	[*]
Assy, Pcb Bracket, Minor Lid	710013	[*]	[*]	[*]
Fuse 6.30A 5x20mm SB	1-00-120	[*]	[*]	[*]
USB to 2-Port PS/2, Splitter Cable Converter	1-00-360	[*]	[*]	[*]
Computer Accessory Galil 4-axis Control	1-03-015	[*]	[*]	[*]
Print Station, Barcode Labe, 100-240V, 60/60HZ	1-03-049	[*]	[*]	[*]
Fan, Whisper, 80 Cfm	1-15-022	[*]	[*]	[*]
Fan, Whisper, 80cfm, 230v 50/60 Hz	1-15-029	[*]	[*]	[*]
Opto, T Mount	1-19-004	[*]	[*]	[*]
Fuse 400mA 5x20mm SB	1-27-063	[*]	[*]	[*]
Fuse 3.15A 5x20mm SB	1-27-064	[*]	[*]	[*]
Fuse 200mA 5x20mm SB	1-27-065	[*]	[*]	[*]
Holder Fuse 5 X 20 Panel Mount	1-27-066	[*]	[*]	[*]
Power Transformer 115/230v, 50/60hz	1-33-020	[*]	[*]	[*]
Pwr Cord, Na, 10A, 3.05M, Hspt	1-54-052	[*]	[*]	[*]
Cord, Argentina, 250V	1-55-004	[*]	[*]	[*]
Core, Continental Europe, 230V	1-55-005	[*]	[*]	[*]
Cord Great Britain, 250V	1-55-007	[*]	[*]	[*]
Pins, Pin Tool, gage 0.023 OD	3-12-015	[*]	[*]	[*]
Pins, Pin Tool, gage 0.024 OD	3-12-016	[*]	[*]	[*]
Valve, Solenoid, Cryogenic	4-36-097	[*]	[*]	[*]
Valve, Relief, Cryogenic	4-36-098	[*]	[*]	[*]
Hose, Transfer Ln2, 1/2in Flare To 3/8in Npt, 6'	4-43-013	[*]	[*]	[*]
Thermistor Bundle, 48in, Teflon	6-00-031	[*]	[*]	[*]
Vent Tube Reservoir Heat Sink	6-00-140	[*]	[*]	[*]
Clamp Unit Assy, Centron, Altered, Refurbished	6-40-001-RFB	[*]	[*]	[*]
Gear Minor Lid Drive	6-55-113	[*]	[*]	[*]

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Cover, Gear, Major Lid	6-57-017	[*]	[*]	[*]
Kit, BioArchive Update SMS 4.0 & DOLN2 V2.0	7-00-001	[*]	[*]	[*]

  BioArchive^® System (Continued)

DESCRIPTION	PART NUMBER	LIST PRICE USD	DISTRIBUTOR DISCOUNT	DISTRIBUTOR PRICE USD
Periscope Evaporative Sponge Kit	7-00-195	[*]	[*]	[*]
Assy, Computer, BioArchive	7-00-202	[*]	[*]	[*]
Spare Embedded Controller Assy., BioArchive	710004	[*]	[*]	[*]
Embedded Controller Upgrade Kit	70096	[*]	[*]	[*]
Overwrap System, Kapton Kit	7-00-254	[*]	[*]	[*]
ASM, CSD Microcontroller	7-00-255	[*]	[*]	[*]
ASM, FC Microcontroller	7-00-256	[*]	[*]	[*]
ASM, LID Microcontroller	7-00-259	[*]	[*]	[*]
Assy, LN2 In-line Filter, 3/8 FPT (In) x 3/8 MPT (Out)	7-00-269	[*]	[*]	[*]
ASSY, UPS, 220-240VAC, 50/60HZ, OPTI	7-00-300	[*]	[*]	[*]
ASSY, UPS, 100-120V, 50/60HZ, OPTI	7-00-301	[*]	[*]	[*]
Harness, Crf Right	7-34-096	[*]	[*]	[*]
Harness, Crf Left	7-34-097	[*]	[*]	[*]
Harness, Periscope Signal	7-34-099	[*]	[*]	[*]
Harness, Lid Motor	7-34-100	[*]	[*]	[*]
Harness, Minor Signal	7-34-103	[*]	[*]	[*]
Cable, Heater Split	7-34-133	[*]	[*]	[*]
Motor Driver Harness	7-34-149	[*]	[*]	[*]
Motor Step Harness	7-34-150	[*]	[*]	[*]
Cable, Ln2 Fill Solenoid	7-34-151	[*]	[*]	[*]
Harness, Dewar Signal III	7-34-152	[*]	[*]	[*]
Assy, Crf Fan	7-35-065	[*]	[*]	[*]
Assy, Prot Motor	7-35-066	[*]	[*]	[*]
Assy, Plin Motor	7-35-067	[*]	[*]	[*]
Power Supply, Complete, Ln2	7-35-074	[*]	[*]	[*]
Assy, Motor Bracket, Minor Lid	7-35-077	[*]	[*]	[*]
Assy, Motor Bracket, Major Lid	7-35-078	[*]	[*]	[*]
Assy, Switch, Mushroom	7-35-084	[*]	[*]	[*]
Assy, Power Supply, 24v	7-35-085	[*]	[*]	[*]
Assy, CSD Board W/Fill control	7-35-126	[*]	[*]	[*]
Motor Drive (prot/major/mino)	7-35-146	[*]	[*]	[*]
Motor Drive (plin)	7-35-147	[*]	[*]	[*]
Control Board Assy, Centron, Modified	7-36-075	[*]	[*]	[*]
Plug Crf Slot	7-47-075	[*]	[*]	[*]
Assy, Vent Tube, Insulated	7-63-046	[*]	[*]	[*]

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Assy, Thermistor Bundle/Guide Tube	7-63-123	[*]	[*]	[*]
Refurbished Periscope Assy Ln2	7-65-001-RFB	[*]	[*]	[*]

BioArchive^® System(Continued)

DESCRIPTION	PART NUMBER	LIST PRICE USD	DISTRIBUTOR DISCOUNT	DISTRIBUTOR PRICE USD
Hook Mech Assy Ln2	7-65-006	[*]	[*]	[*]
Refurbished, Assy, Controlled Rate Freezer	7-65-009-RFB	[*]	[*]	[*]
Assy, Linear Actuator, Plin	7-65-082	[*]	[*]	[*]
Thermistor Bundle, Micro-Pod	7-68-003	[*]	[*]	[*]
Tool, Plug, Crf	9-72-062	[*]	[*]	[*]
Assembly, Calibration Tool, Rack Height	9-72-147	[*]	[*]	[*]
Tool, Rotational Alignment, Assembly	9-72-342	[*]	[*]	[*]
Tool, Calibration, Height Switch Assembly	9-72-346	[*]	[*]	[*]
Tool, Canister Offset, Assy	9-72-347	[*]	[*]	[*]

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EXHIBIT A

PRODUCT LINES & PRICING

AXP^® AutoXpress™ System

DESCRIPTION	PART NUMBER	LIST PRICE USD	DISTRIBUTOR DISCOUNT	DISTRIBUTOR PRICE USD
AXP Cell Preparation Device	8-5102	[*]	[*]	[*]
Docking Station Main	8-5103	[*]	[*]	[*]
Counter Weight	8-5104	[*]	[*]	[*]
Weight Kit	8-5109	[*]	[*]	[*]
Device Stand	8-5108	[*]	[*]	[*]
Weight Compensation Cap	7-00-186	[*]	[*]	[*]
ABC Switch Box	8-5120	[*]	[*]	[*]
Adapter, 101-102 mm Round Bucket (Pack of 2)	8-5113	[*]	[*]	[*]
Adapter, Sorvall 11754/11297 Buckets (Pack of 2)	8-5114	[*]	[*]	[*]
Sorvall 11754 Bucket Pads (Pack of 2)	8-5155	[*]	[*]	[*]
Wireless Barcode Scanner	8-5106	[*]	[*]	[*]
AXP Operator Manual, English	37-00-101	[*]	[*]	[*]
Print Station Barcode Label	1-03-049	[*]	[*]	[*]
Battery Replacement Kit	710015	[*]	[*]	[*]
Battery Pack, 3 Cell, 3.6v	70149	[*]	[*]	[*]
Label Barcode LN2 Canister	8-5121	[*]	[*]	[*]
Freezing/Processing Bag Labels	8-5124	[*]	[*]	[*]
Startup Accessory Kit	8-5100	[*]	[*]	[*]
Component Retaining Clip Set	8-5148	[*]	[*]	[*]
Assy, Power Cable DB15	7-00-176	[*]	[*]	[*]
Assy, Serial Cable, Shielded	7-00-262	[*]	[*]	[*]
Pad, Bracket, Bottom	6-00-193	[*]	[*]	[*]
AXP Software License for 3 Years (up to 6 devices)	N/A	[*]	[*]	[*]
AXP Software License per year	N/A	[*]	[*]	[*]

Consumable Supplies
AXP Disposable Blood Processing Set.  Sold per case (24 bag sets)	8-5101	AXP Bagset Pricing Annual Volume <100,000 100,000 200,000 300,000 400,000	Pricing/Unit [*] [*] [*] [*] [*]

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		500,000	[*]
AXP QC Bag. Sold per case (10 units)	8-5110	[*] per unit

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EXHIBIT A-1

PRODUCTS

Product	Field of Use	Territory
AXP Platform	The practice of stem cell isolation and collection from umbilical cord blood.	Effective Immediately: Singapore Indonesia Philippines
BioArchive System	The practice of cryopreservation and archiving of stem cells for future transplant and treatment.
		Conditional Appointment: People’s Republic of China (excluding Hong Kong and Taiwan) India

Note: Notwithstanding Section 2, and without limiting ThermoGenesis’ rights under Section 10.2, in the event that Distributor fails to meet the Quotas as outlined in Exhibit F, then Distributor’s rights under this agreement shall thereafter be non-exclusive.

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EXHIBIT B

Post Warranty Technical Support and Service Assistance

1. Technical Support via telephone, fax, or e-mail as per the following:

a) Service Support Fee: US$ 10,000

1. 20 hours of support per year

2. 25% Discount on spare parts

3. One Training for two (2) Engineers per year

b) Non Contracted Service Support:

1. 4 hours of free support/yr. After that it will be chargeable at US$125.00 per hour

2. 10% discount on spare parts (usual)

3. Engineer Training Fee: US$1,000.00

2. Service Assistance is available as follows:

Distributor’s service representative should attempt to resolve issue first and may request technical support via telephone, fax, or e-mail if necessary, subject to the rates listed above. If unsuccessful at resolving issue, Distributor may request an on-site visit by a ThermoGenesis Service Specialist. All expenses for this visit, including ThermoGenesis Field Service Engineer labor rates, will be the responsibility of the Distributor.

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EXHIBIT C

Limited Warranty

Warranty

ThermoGenesis warrants to the original purchaser that the unit will be free from defects in materials or workmanship for one year from the date of shipment, except for the BioArchive System. For the BioArchive System ThermoGenesis warrants to the original purchaser that the unit will be free from defects in material or workmanship for two years from the date of shipment or one year from the date of installation, whichever occurs first. ThermoGenesis also warrants that spare parts will be free from defects in material workmanship for a period of ninety (90) days, with the exception of the BioArchive periscope which has a one year warranty, or the maximum time required by applicable local law, from the date of shipment of the spare part. Equipment failure due to reasons other than manufacturing defects such as accident, misuse or failure to timely perform scheduled maintenance in accordance with the maintenance schedule included with the operating instructions for the unit is excluded from Warranty coverage. This Warranty covers the cost of parts needed to make Warranty repairs. ThermoGenesis reserves the right to replace any malfunctioning unit or part with a new or refurbished unit in lieu of repairing such unit. This Warranty and ThermoGenesis’ obligation to repair or replace defective parts is the sole and exclusive remedy of purchaser. Under no circumstances shall ThermoGenesis be liable for consequential or economic damages that might arise from a defective part.

ThermoGenesis warranties, as set forth herein, are exclusive and are in lieu of, and purchaser hereby waives, all other warranties, express or implied, including, without limitation, any implied warranties of merchantability of fitness for a particular purpose or warranty of non-infringement.

Procedure

If Warranty repairs are needed, contact the vendor or distributor from which you purchased your ThermoGenesis product(s), or if you purchased directly from ThermoGenesis or are unable to locate the appropriate vendor/distributor, contact ThermoGenesis directly at ThermoGenesis, 2711 Citrus Road, Rancho Cordova, CA 95742, Telephone: (916) 858-5100 or (800) 783-8357 in the U.S.; Fax: (916) 858-5199. For emergency repairs at night or on weekends or holidays, contact your ThermoGenesis Authorized Service Provider (“Service Provider”) directly and notify ThermoGenesis on the next business day. Failure to notify ThermoGenesis on the next business day after a request for emergency repairs may result in denial of coverage for that service call. When calling for service have available: (1) detailed information about the problem; (2) the serial number of the unit; (3) the service record for the unit; (4) the date and place of purchase of the unit.

Limitations. Equipment or spare part malfunctions other than those caused by defects in materials or workmanship, including malfunctions caused by misuse, accident or failure to perform scheduled maintenance, are excluded from coverage. Any alterations or modifications made to the unit (other than modifications or alterations made by ThermoGenesis) render the warranty null and void. ThermoGenesis will not be responsible for any consequential or incidental damages resulting from equipment malfunction or loss of use of the equipment. ThermoGenesis may authorize independent contractors to perform service. Service providers are independent contractors, not ThermoGenesis employees; consequently, ThermoGenesis is not responsible for the acts or omissions of the service providers, including without limitation, failure by a service provider to respond to calls for emergency service in a timely fashion.

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EXHIBIT D

Medical Devices Vigilance System

It is the Distributor’s responsibility to:

Establish procedures associated with product identification, traceability, handling, storage, packaging, preservation, and delivery. The distributor shall ensure that its employees are adequately trained on said procedures.

The distributor shall maintain shipment records for Company products that include consignee name and address, part numbers, lot numbers and serial numbers.

The distributor shall promptly report product complaints to the Company in accordance with timeliness requirements specified in the contract.

The distributor shall ensure that all local, regional, and national regulatory requirements are met in the countries to which the contract applies.

The above four responsibilities ensure that ThermoGenesis Therapeutics and the Distributor are in compliance with the MDD 93/42/ECC and with European Medical Device Reporting Regulations (MEDDEV 2.12/1, Rev 7).

ThermoGenesis Therapeutics will notify the Competent Authorities and the Notified Body of any adverse incidents that meet the criteria described in MDD Article 10. Systematic procedures for receiving and investigating customer complaints and for filing medical event (or near event) reports with appropriate Competent Authorities are in place. As necessary, based on review of such events and experience gained from device usage, appropriate corrective action is implemented.

If a Distributor becomes aware of a product complaint, notify ThermoGenesis and ThermoGenesis’ European Union Representative for Medical Device Reporting (EU Rep.) within twenty-four (24) hours.

Please complete and return a copy of the attached product complaint form within twenty-four (24) hours of learning of a product complaint, product malfunction, or patient injury to:

ThermoGenesis:

ThermoGenesis, 2711 Citrus Road, Rancho Cordova, CA 95742, USA, Telephone No. 916-858-5100 and Fax No, 916-858-5199; and

EU Rep.:

Medical Device Safety Service, Schiffgraben 41, 30175, Hanover, Germany Tel: +49-511-6262 8630, Fax: +49-511-6262 8633, e-mail: mdssgmbh@tonline.de, Internet: www.mdss.com; Contact: Ludgar Moller

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EXHIBIT E

PAYMENT TERM

Net seventy-five (75) days from date of invoice. Delinquent accounts shall incur a charge of the greater of one and one half percent (1 ½ %) of the outstanding balance per month or the maximum legal rate.

Furthermore, in the event of delinquency, ThermoGenesis reserves the right, at its sole discretion, to change the payment terms and may require full or partial prepayment for subsequent orders.

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EXHIBIT F

QUOTAS

Thermo 8-5101  AXP Disposable Processing Sets  50,000 bags

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EXHIBIT G

SERVICE REPORTING REQUIREMENTS

Date of Service:	Product Name:
Customer:	Model:
Contact Name:	Serial #:
Tel #:	Service Representative:

Description of Complaint/ Problems Found:

Service Performed/Actions Taken:

Resolution/Testing:

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Parts Used:

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EXHIBIT H

COMPLAINT REPORTING FORM

FIELD 1: CUSTOMER / PRODUCT INFORMATION

Date of Initial Contact:                         

Complainant Facility:                              

Name of Complainant:                         

Complainant Telephone Number:                          

Product Name:                                 Model:                            Serial Number:                                 

Lot Number (if applicable):                             

Assigned Investigator:                             

Severity Classification: ☐ Catastrophic    ☐Minor   ☐ Major    ☐ Critical

Complaint Communicated Via: ☐ E-Mail    ☐ Fax    ☐ Form

FIELD 2: COMPLAINT INFORMATION                                        

Call Type:                                                                  Event Date:                                

Description of Complaint:                                                                                   

Location of failure:                                                                                                                

Step in process where failure occurred:                                            

Will the product be returned for evaluation?

☐ YES, RMA #                

☐ NO, provide reason:                

FIELD 3: SAFETY EVENT INFORMATION

3a. Was a Death or Injury sustained?

☐ YES - SAFETY COMPLAINT, complete section 3b*.

☐ NO - Is a death or injury possible? ☐ YES* ☐ NO

* Notify QS Management Representative or Designee

3b. Injury Information (if applicable):

Event Date:                                Time:                       ☐ a.m. ☐ p.m. ☐ Unknown

Type of Injury:      ☐ Death      ☐ Serious Injury      ☐ Other:                                  

Persons(s) Affected: Number:                                          

☐ User/Operator   ☐ Patient   ☐ Serviceperson   ☐ Bystander

Additional Information:                                                                                            

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FIELD 4: COMPLAINT ENTRY 

Complaint Report Completed by:                                                               Date:                                             

Complaint Received and Entered into CHS by:                                       Date:                                             

Complaint File Number:                                                                              (Reference ThermoGenesis Control Number 340023 [A])

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EXHIBIT I

LOCALIZED DEPOT SERVICE CENTER QUALITY REQUIREMENTS

1.0           QUALITY SYSTEM REQUIREMENTS FOR DISTRIBUTORS

1.1 This Distributor agreement adds a quality set of requirements for the consistent supply of product(s) and/or service(s) through ThermoGenesis’ Distributor(s).

1.1.1 The Distributor must maintain active quality systems and conduct activities in compliance with applicable laws and regulations including, but not limited to instructions agreed to between the parties, applicable procedures, national, state and local laws/regulations/ ordinances/standards, and applicable regulatory requirements. These specifically include, but are not limited to:

● Good Distribution and Storage Practice

● Good Manufacturing Practice

● ISO 9001 or ISO 13485.

● Quality Management System to include:

- Quality Manual

- Critical Process Standard Operating Procedures

- Document controls

- Record controls

- Training procedures

- Process controls

- Identification and Traceability

- Facility controls

- Equipment – calibration and maintenance

- Compliant handling and reporting

- Labeling controls

1.1.2 The Distributor shall manage procedures relevant to ThermoGenesis’ projects/services to a documented Quality Management System (“QMS”) and ensure traceability of equipment, materials, personnel, products, processes, etc. Distributor shall keep records, the longer of, agreed to or required by regulations, and number of years.

1.1.3 Documentation and records pertaining to ThermoGenesis products, processes, or supporting activities must be made available to ThermoGenesis in a reasonable period of time when requested for review.

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1.1.4 These Quality requirements will be effective immediately and be effective for the remaining term of the distribution agreement.

2. COMMUNICATION

2.1 Each Party will notify the other Party’s Primary Contact of any issues that impact the ability to conduct ThermoGenesis contracted activities. ThermoGenesis’ primary quality contact is the most senior manager in the Quality Assurance function.

3. ADMINISTRATIVE INFORMATION

3.1 Organizational Structure: Distributor must maintain an adequate number of qualified personnel to perform and supervise ThermoGenesis activities and to meet quality and regulatory requirements.

3.1.1 Personnel must have the appropriate education, experience and be adequately trained on procedures applicable to their responsibilities. This training must be in a formal training program.

3.1.2 There must be mandatory regulatory compliance training for new employees and refresher training with sufficient frequency to ensure employees remain familiar with requirements.

3.1.3 This training must be documented and available for review.

4. MANUFACTURING AND LOGISTICS

4.1 General:

4.1.1 ThermoGenesis will provide documents that pertain to the work that the Distributor will be performing. Distributor agrees to comply with mutually agreed requirements.

4.1.2 Equipment and facility qualification will be the responsibility of Distributor and may be reviewed by ThermoGenesis during audits.

4.1.3 Servicing, packaging and shipping will be performed according to procedures provided by ThermoGenesis or as mutually agreed.

4.2 Audits:

4.2.1 Distributor must allow ThermoGenesis employees or representative’s access to the facility to observe various operations and assist in problem solving to ThermoGenesis “issues.” Any such “in plant visits” will be coordinated in advance by both Parties

4.2.2 Distributor agrees to host audits by ThermoGenesis as required by ThermoGenesis policy. ThermoGenesis will provide Distributor sufficient notice of an audit.

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4.2.3 At the conclusion of the audit, an closing meeting will be held with representatives from ThermoGenesis and Distributor to discuss significant audit findings. A written audit report will be provided to Distributor. Distributor shall respond to audit findings within thirty days and detail the corrective action plans and timeframes for correction.

4.3 Facilities, Utilities, and Equipment:

4.3.1 Facilities, utilities and equipment must be qualified and validated for the work being performed.

4.3.2 Distributor must have a preventive maintenance (“PM”) program for all critical systems, utilities, manufacturing equipment and test instrumentation and equipment. Documentation must include a record of the type and frequency of testing.

4.3.3 Any utilities that could impact product/service quality are qualified and appropriately monitored.

4.3.4 Distributor must have a procedure for cleaning equipment.

4.3.5 Distributor must have a procedure for the operation and maintenance of computerized systems. The procedure must include periodic re-verification of system access privileges.

4.3.6 Distributor must have a written procedure for the issuance of parts and lot numbers that are used in regulatory documentation so that materials are uniquely identified and traceable.

4.3.7 Distributor must have a suitable storage facility that protects the product from possible deterioration, interference, theft, cross contamination, intermixing with other materials, or accidental use of unreleased material.

5. QUALITY CONTROL (“QC”)

5.1 No additional testing or modification/deviation from procedures may occur without written approval by the ThermoGenesis Quality Management.

5.2 Distributor will test ThermoGenesis products using only calibrated and qualified equipment with approved analytical methods.

6. QUALITY ASSURANCE

6.1 General Procedures: Distributor’s Quality Management is responsible for generating and maintaining all procedures and other documentation supporting regulatory operations within its facility.

6.2 Record Retention: At least thirty calendar days prior to record destruction, Distributor will alert the ThermoGenesis Quality Management contact. ThermoGenesis may request that the documentation or portions of the documentation be forwarded to ThermoGenesis for archiving.

Rev. S.

42

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

Boyalife W.S.N. Intl Distribution Contract

Agreement # TGS-004-90105

Page 43 of 44

 

6.3 Change Management:

6.3.1 Distributor must have a written, approved and effective procedure(s) for managing and tracking changes to quality system and regulatory records.

6.3.2 Proposed changes to project/service documentation may only be accepted with the written approval of ThermoGenesis and may require validation before the change may be implemented.

6.4 Complaint Handling:

6.4.1 Distributor will comply with all reasonable requests in connection with the investigation of any product/service complaint.

6.4.2 Distributor will forward each complaint to ThermoGenesis in a timely manner (with 3 days).

6.4.3 Distributor will do the initial MDR reportable assessment. If a reportable event is probable, the distributor is required to notify ThermoGenesis immediately (within 4 hours of the decision).

7. REGULATORY COMPLIANCE.

7.1 Regulatory Inspections and Correspondence:

7.1.1 Distributor must notify the ThermoGenesis Quality Contact immediately (within four hours) when any regulatory agency inspection is commencing involving ThermoGenesis.

7.1.2 Distributor will allow a ThermoGenesis representative to be present

7.1.3 A notice of any kind from any regulatory agency, the Distributor is required to make contract with ThermoGenesis immediately (within 1 business day).

7.1.4 ThermoGenesis will be solely responsible for all contacts and communications with any regulatory agencies with respect to all ThermoGenesis activities.

8. RESOLUTION OF QUALITY-RELATED ISSUES

8.1 Quality-related issues will be discussed and resolved at the JOC.

Rev. S.

43

[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND

EXCHANGE COMMISSION.

Boyalife W.S.N. Intl Distribution Contract

Agreement # TGS-004-90105

Page 44 of 44

9. REMOVALS AND CORRECTIONS (RECALLS)

9.1 If either Party believes a removal, correction or other field action is warranted, that party will notify the other party in writing of the reasons an “action” is warranted.

9.2 Each Party shall within a reasonable time provide the other with a copy of any reports filed with the FDA or other regulatory agencies. Each party shall maintain records of all corrections or removals as required by law, and shall promptly provide the other party with a copy.

44

EX-23.1

Exhibit 23.1

Independent Registered Public Accounting Firm’s Consent

We consent to the incorporation by reference in the Registration Statement of Cesca Therapeutics, Inc. on Form S-8 (File No. 333-218082) pertaining to 2016 Equity Incentive Plan, Form S-8 (File No. 333-206996) pertaining to 2006 Equity Incentive Plan, Form S-8 (File No. 333-187197) pertaining to 2006 Equity Incentive Plan and 2012 Independent Director Equity Plan, Form S-8 (File No. 333-171564) pertaining to the Cesca Therapeutics, Inc. 2006 Equity Incentive Plan, Form S-8 (File No. 333-140668) pertaining to the Cesca Therapeutics, Inc. 2006 Equity Incentive Plan, Form S-8 (File No. 333-122761) pertaining to the Cesca Therapeutics, Inc. Amended 2002 Independent Directors Equity Incentive Plan, Form S-8 (File No. 333-105191) pertaining to the Cesca Therapeutics, Inc. Amended 1998 Employee Equity Incentive Plan, Form S-8 (File No. 333-82900) pertaining to the Cesca Therapeutics, Inc. Amended 1998 Employee Equity Incentive Plan, 2002 Independent Directors Equity Incentive Plan, and Non-Qualified Independent Director Stock Option Agreement, Form S-8 (File No. 333-37228) pertaining to the Cesca Therapeutics, Inc. 1998 Employee Equity Incentive Plan, Form S-8 (File No. 333-46911) pertaining to the Cesca Therapeutics, Inc. 1998 Employee Equity Incentive Plan, Form S-3 (File No. 333-215638) of Cesca Therapeutics, Inc., and Form S-3 (File No. 333-212314) of Cesca Therapeutics, Inc. of our report dated September 21, 2017 with respect to our audits of the financial statements Cesca Therapeutics, Inc. as of June 30, 2017 and 2016 and for the years ended June 30, 2017 and 2016, which report is included in this Annual Report on Form 10-K of Cesca Therapeutics, Inc. for the year ended June 30, 2017.

/s/ Marcum llp

Marcum llp

New York, NY

September 21, 2017

EX-31.1

Exhibit 31.1

PRINCIPAL EXECUTIVE OFFICER’S CERTIFICATIONS
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Chris Xu, certify that:

1.            I have reviewed this annual report on Form 10-K 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: September 21, 2017

/s/ Chris Xu

Chris Xu

Chief Executive Officer

EX-31.2

Exhibit 31.2

PRINCIPAL FINANCIAL OFFICER’S CERTIFICATIONS
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeff Cauble, certify that:

1.            I have reviewed this annual report on Form 10-K 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: September 21, 2017

/s/ Jeff Cauble

Jeff Cauble,

Principal Financial and 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 annual report of Cesca Therapeutics Inc. (the “Company”) on Form 10-K for the period ended June 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s 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 as of the dates and for the periods expressed in the Report.

Dated: September 21, 2017	/s/Chris Xu
	Chris Xu  Chief Executive Officer
Dated: September 21, 2017	/s/ Jeff Cauble
	Jeff Cauble Principal Financial and Accounting Officer

XML

Document And Entity Information - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2017	Sep. 15, 2017	Dec. 30, 2016
Document Information [Line Items]
Entity Registrant Name	CESCA THERAPEUTICS INC.
Entity Central Index Key	0000811212
Trading Symbol	kool
Current Fiscal Year End Date	--06-30
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		9,946,193
Entity Public Float			$ 10,334
Document Type	10-K
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($)	Jun. 30, 2017	Jun. 30, 2016
Current assets:
Cash and cash equivalents	$ 3,623,000	$ 5,835,000
Accounts receivable, net of allowance for doubtful accounts of $102,000 ($49,000 at June 30, 2016)	3,701,000	3,169,000
Inventories, net of reserves of $1,230,000 ($1,437,000 at June 30, 2016)	3,617,000	3,593,000
Prepaid expenses and other current assets	237,000	246,000
Total current assets	11,178,000	12,843,000
Equipment, net	2,330,000	2,962,000
Goodwill	13,195,000	13,195,000
Intangible assets, net	20,165,000	20,821,000
Other assets	64,000	78,000
Total assets	46,932,000	49,899,000
Current liabilities:
Accounts payable	1,601,000	2,648,000
Accrued payroll and related expenses	385,000	449,000
Deferred revenue	597,000	783,000
Related party payable	606,000
Other current liabilities	1,331,000	1,662,000
Total current liabilities	4,520,000	5,542,000
Long term debt-related party	3,500,000
Derivative obligations	730,000	670,000
Convertible debentures, net		2,489,000
Noncurrent deferred tax liability	6,968,000	7,641,000
Other noncurrent liabilities	377,000	1,284,000
Total liabilities	16,095,000	17,626,000
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 2,000,000 shares authorized, none issued and outstanding at June 30, 2017 and 2016
Common stock, $0.001 par value; 350,000,000 shares authorized; 9,915,868 issued and outstanding (3,010,687 at June 30, 2016)	10,000	3,000
Paid in capital in excess of par	216,222,000	188,569,000
Accumulated deficit	(185,357,000)	(156,262,000)
Accumulated other comprehensive loss	(38,000)	(37,000)
Total stockholders’ equity	30,837,000	32,273,000
Total liabilities and stockholders’ equity	$ 46,932,000	$ 49,899,000

XML

Consolidated Balance Sheets (Parentheticals) - USD ($)	Jun. 30, 2017	Jun. 30, 2016
Accounts Receivable, Allowance for Doubtful Accounts	$ 102,000	$ 49,000
Inventories, Reserves	$ 1,230,000	$ 1,437,000
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 issued (in shares)	0	0
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)	350,000,000	350,000,000
Common stock, shares issued (in shares)	9,915,868	3,010,687
Common stock, shares outstanding (in shares)	9,915,868	3,010,687

XML

Consolidated Statements of Operations and Comprehensive Loss - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Net revenues	$ 14,525,000	$ 11,929,000
Cost of revenues	8,686,000	9,185,000
Gross profit	5,839,000	2,744,000
Expenses:
Sales and marketing	1,531,000	2,148,000
Research and development	2,497,000	3,230,000
General and administrative	11,051,000	8,231,000
Total operating expenses	15,079,000	13,609,000
Loss from operations	(9,240,000)	(10,865,000)
Other income (expense):
Interest expense	(10,668,000)	(1,864,000)
Amortization of debt discount	(9,851,000)	(6,127,000)
Fair value change of derivative instruments	(60,000)	3,395,000
Registration rights liquidated damages		(1,100,000)
Loss on cashless exercise of warrants		(1,039,000)
Loss on extinguishment of debt		(795,000)
Loss on modification of Series A warrants		(149,000)
Other income and (expenses)	51,000	(44,000)
Total other income (expense)	(20,528,000)	(7,723,000)
Loss before benefit for income taxes	(29,768,000)	(18,588,000)
Benefit for income taxes	673,000
Net loss	(29,095,000)	(18,588,000)
COMPREHENSIVE LOSS
Net loss	(29,095,000)	(18,588,000)
Other comprehensive loss:
Foreign currency translation adjustments	(1,000)	(32,000)
Comprehensive loss	$ (29,096,000)	$ (18,620,000)
Per share data:
Basic and diluted net loss per common share (in dollars per share)	$ (3.27)	$ (7.57)
Weighted average common shares outstanding – Basic and diluted (in shares)	8,904,508	2,455,548

XML

Consolidated Statements of Stockholders' Equity - USD ($)	Series B Warrant [Member] Common Stock [Member]	Series B Warrant [Member] Additional Paid-in Capital [Member]	Series B Warrant [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Jun. 30, 2015				2,027,386
Balance at Jun. 30, 2015				$ 2,000	$ 172,579,000	$ (137,674,000)	$ (5,000)	$ 34,902,000
Stock-based compensation expense, net of stock surrenders (in shares)				11,577
Stock-based compensation expense, net of stock surrenders					710,000			710,000
Discount due to beneficial conversion features					7,262,000			7,262,000
Discount due to warrants					4,434,000			4,434,000
Issuance of common shares in financing (in shares)				735,294
Issuance of common shares in financing				$ 1,000	2,463,000			2,464,000
Issuance of common shares for exercise of Series B warrants (in shares)	231,710
Issuance of common shares for exercise of Series B warrants		$ 1,097,000	$ 1,097,000
Common stock issued to directors in lieu of cash compensation (in shares)				4,720
Common stock issued to directors in lieu of cash compensation					24,000			24,000
Foreign currency translation adjustments							(32,000)	(32,000)
Net loss						(18,588,000)		(18,588,000)
Balance at Jun. 30, 2016				$ 3,000	188,569,000	(156,262,000)	(37,000)	32,273,000
Balance (in shares) at Jun. 30, 2016				3,010,687
Stock-based compensation expense, net of stock surrenders (in shares)				125,368
Stock-based compensation expense, net of stock surrenders					1,445,000			1,445,000
Shares issued upon debt conversion (in shares)				6,102,941
Shares issued upon debt conversion				$ 6,000	23,897,000			23,903,000
Issuance of common shares in financing (in shares)				600,000
Issuance of common shares in financing				$ 1,000	2,091,000			2,092,000
Common stock issued to directors in lieu of cash compensation (in shares)				5,463
Common stock issued to directors in lieu of cash compensation					16,000			16,000
Common stock issued to employees for prior year bonus (in shares)				71,409
Common stock issued to employees for prior year bonus					204,000			204,000
Foreign currency translation adjustments							(1,000)	(1,000)
Net loss						(29,095,000)		(29,095,000)
Balance at Jun. 30, 2017				$ 10,000	$ 216,222,000	$ (185,357,000)	$ (38,000)	$ 30,837,000
Balance (in shares) at Jun. 30, 2017				9,915,868

XML

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net loss	$ (29,095,000)	$ (18,588,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	830,000	1,168,000
Stock-based compensation expense	1,461,000	742,000
(Recovery of) reserve for excess and slow-moving inventories	(203,000)	566,000
Amortization of debt discount	9,851,000	6,127,000
Amortization of debt issue costs	160,000	800,000
Change in fair value of derivative	60,000	(3,395,000)
Deferred income tax benefit	(673,000)
Non-cash accrued interest	10,373,000	1,031,000
Loss on disposal of equipment	176,000
Impairment of intangible asset	310,000
Loss on cashless exercise of warrants		1,039,000
Loss on extinguishment of debt		795,000
Loss on modification of Series A warrants		149,000
Net changes in operating assets and liabilities:
Accounts receivable	(522,000)	1,956,000
Inventories	615,000	375,000
Prepaid expenses and other assets	24,000	(86,000)
Accounts payable	(1,062,000)	(2,420,000)
Related party payable	606,000
Accrued payroll and related expenses	(63,000)	(256,000)
Deferred revenue	(187,000)	148,000
Other current liabilities	26,000	160,000
Other noncurrent liabilities	98,000	64,000
Net cash (used in) operating activities	(7,215,000)	(9,625,000)
Cash flows from investing activities:
Capital expenditures	(375,000)	(710,000)
Net cash (used in) investing activities	(375,000)	(710,000)
Cash flows from financing activities:
Gross proceeds from convertible debentures		18,000,000
Proceeds from long term debt-related party	3,500,000
Payment of financing cost – convertible debentures		(961,000)
Repayment of convertible debentures		(6,444,000)
Payment to extinguish derivative obligations		(159,000)
Payments on capital lease obligations	(84,000)	(67,000)
Proceeds from issuance of common stock, net	2,092,000	2,463,000
Repurchase of common stock	(134,000)	(8,000)
Net cash provided by financing activities	5,374,000	12,824,000
Effects of foreign currency rate changes on cash and cash equivalents	4,000	(11,000)
Net (decrease)increase in cash and cash equivalents	(2,212,000)	2,478,000
Cash and cash equivalents at beginning of year	5,835,000	3,357,000
Cash and cash equivalents at end of year	3,623,000	5,835,000
Supplemental non-cash financing and investing information:
Common stock issued for payment of convertible debenture and interest	23,903,000
Transfer of equipment to inventories	625,000
Derivative obligation related to issuance of warrants		4,282,000
Retirement of equipment		$ 1,109,000

XML

Note 1 - Description of Business and Basis of Presentation

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Business Description and Basis of Presentation [Text Block]

1.

    

Description of Business and Basis of Presentation

Organization and Basis of Presentation

Cesca Therapeutics Inc. (the “Company” or “Cesca”) develops and markets integrated cellular therapies and delivery systems that advance the safe and effective practice of regenerative medicine. Cesca’s product pipeline includes automated blood and bone marrow processing systems that enable the separation, processing and preservation of cell and tissue therapy products.

On

March 4, 2016,

the Company effected a

one

(

1

) for

twenty

(

20

) reverse split of its issued and outstanding common stock. There were

no

changes to its authorized number of shares of common stock of

350,000,000.

Liquidity

On

July 7, 2017,

the Company, thru its wholly-owned subsidiary, ThermoGenesis, acquired the business and substantially all of the assets of SynGen Inc. (“SynGen”). In exchange, ThermoGenesis issued to SynGen shares of ThermoGenesis common stock that, after giving effect to the issuance, constitute

20%

of ThermoGenesis’ outstanding common shares, and ThermoGenesis also made a

one

-time cash payment of

$1.0

million to SynGen. (Refer to Note

14

).

On

March 6, 2017,

the Company entered into a Revolving Credit Agreement (“Credit Agreement”) with Boyalife Investment Fund II, Inc. (the “Lender”) (Refer to Note

5

). As of

June 30, 2017,

the Company had drawn down

$3,500,000

of the

$5,000,000

available under the Credit Agreement.

The Company has drawn down an additional

$1,500,000

subsequent to

June 30, 2017

and through the date of this report.

Boyalife Investment Fund II, Inc. is a wholly owned subsidiary of Boyalife Group Inc., which is owned and controlled by the Company’s Chief Executive Officer and Chairman of the Board. On

September 13, 2017,

the Company entered into an amendment to the Revolving Credit Agreement with the Lender to increase the Company’s maximum borrowing availability thereunder from

$5.0

million to

$10.0

million.

On

August 22, 2016,

the Company elected to convert all outstanding principal and interest accrued and otherwise payable under

February 2016

debentures aggregating

$23,903,000

dating back to Cesca’s

February 2016

financing. Upon conversion,

6,102,941

shares of common stock were issued and the Debentures plus all related security interests and liens were terminated.

On

August 3, 2016,

the Company sold

600,000

shares of common stock at a price of

$4.10

per share. 

The net proceeds to the Company from the sale and issuance of the shares, after deducting the offering expenses borne by the Company, were

$2,092,000.

At

June 30, 2017,

the Company had cash and cash equivalents of

$3,623,000

and working capital of

$6,658,000.

The Company has incurred recurring operating losses and as of

June 30, 2017

had an accumulated deficit of

$185,357,000.

The Company anticipates requiring additional capital in order to grow the Device business, initiate the Phase III Critical Limb Ischemia trial, to fund other operating expenses and to make interest payments on the line of credit with Boyalife. These conditions raised substantial doubt about the Company’s ability to meet its obligations. To alleviate the substantial doubt, management plans to use existing cash and cash equivalents balances, revenue generating activities and draw down on the available balance from the line of credit. Other sources of liquidity could include additional potential issuances of debt or equity securities in public or private financings and strategic partnerships.

Based upon the additional funds available to draw down under the amended Credit Agreement, the Company’s cash balance, historical trends, expected outflows and projections for revenues, management believes it will have sufficient cash to provide for its projected needs to maintain operations and working capital requirements for at least the next

12

months from the date of filing this annual report.

Principles of Consolidation

The consolidated financial statements include the accounts of Cesca Therapeutics Inc. and its wholly owned subsidiaries, ThermoGenesis Corp. (“ThermoGenesis”), TotipotentRX Cell Therapy, Pvt. Ltd. and TotipotentSC Scientific Product Pvt. Ltd. All significant intercompany accounts and transactions have been eliminated upon consolidation.

After completion of the acquisition of SynGen by ThermoGenesis on

July 7, 2017,

ThermoGenesis was

no

longer a wholly owned subsidiary of the Company.

XML

Note 2 - Summary of Significant Accounting Policies

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

2.

    

Summary of Significant Accounting Policies

Use of Estimates

Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but

not

limited to, the allowance for doubtful accounts, slow-moving inventory reserves, depreciation, warranty costs, assumptions made in valuing equity instruments issued for services or acquisitions, deferred income taxes and related valuation allowance and the fair values of intangibles and goodwill. Actual results could materially differ from the estimates and assumptions used in the preparation of the Company’s consolidated financial statements. Events subsequent to the balance sheet date have been evaluated for inclusion in the accompanying consolidated financial statements through the date of issuance.

Revenue Recognition

Revenues from the sale of the Company’s 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. The Company generally ships 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.

The Company’s sales are generally through distributors. There is

no

right of return provided for distributors. For sales of products made to distributors, the Company considers 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’s history of adhering to the terms of its contractual arrangements with the Company, the level of inventories maintained by the distributor, whether the Company has 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. The Company currently recognizes revenue primarily on the sell-in method with its 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. The Company accounts 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.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of

three

months or less at the time of purchase to be cash equivalents. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company’s cash is maintained in checking accounts, money market funds and certificates of deposits with reputable financial institutions that

may

at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation. The Company has cash and cash equivalents of

$46,000

and

$104,000

at

June 30, 2017

and

2016,

respectively in India. The Company has

not

experienced any realized losses on the Company’s deposits of cash and cash equivalents.

Foreign Currency Translation

The Company’s reporting currency is the US dollar. The functional currency of the Company’s subsidiaries in India is the Indian rupee (INR). Assets and liabilities are translated into US dollars at period end exchange rates. Revenue and expenses are translated at average rates of exchange prevailing during the periods presented. Cash flows are also translated at average exchange rates for the period, therefore, amounts reported on the consolidated statement of cash flows do

not

necessarily agree with changes in the corresponding balances on the consolidated balance sheet. Equity accounts other than retained earnings are translated at the historic exchange rate on the date of investment. A translation loss of

$1,000

and

$32,000

was recorded for the years ended

June 30, 2017

and

2016,

respectively, as a component of other comprehensive income.

Goodwill, Intangible Assets and Impairment Assessments

Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Intangible assets that are

not

considered to have an indefinite useful life are amortized over their useful lives, which generally range from

three

to

ten

years. Clinical protocols are

not

expected to provide economic benefit until they are introduced to the marketplace or licensed to an independent entity. Each period the Company evaluates the estimated remaining useful lives of purchased intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization.

For goodwill and indefinite-lived intangible assets (clinical protocols), the carrying amounts are periodically reviewed for impairment (at least annually) and whenever events or changes in circumstances indicate that the carrying value of these assets

may

not

be recoverable. According to Accounting Standard Codification (“

ASC

”)

350,

Intangibles-Goodwill and Other

, the Company can opt to perform a qualitative assessment or a quantitative assessment; however, if the qualitative assessment determines that it is more likely than

not

(i.e., a likelihood of more than

50

percent) the fair value is less than the carrying amount, a quantitative assessment must be performed. If the quantitative assessment determines that the fair value is less than the carrying amount, an impairment loss equal to the difference would be recorded.

The Company performed a quantitative assessment as of

April 1, 2017

and performed a qualitative assessment through

June 30, 2017

and computed a fair value based on a combination of the income approach and market approach, which determined that the fair value exceeded the carrying amount. Accordingly, there was

no

impairment of goodwill or the indefinite-lived intangible assets.

For the definite-lived intangible assets other than the covenants

not

to compete, there were

no

facts or changes in circumstances that indicated the carrying value

may

not

be recoverable. As such,

no

assessment was required and there was

no

impairment of these assets. There was a

$310,000

impairment of the covenants

not

to compete intangible assets during the year ended

June 30, 2017

as the assumed revenues that were in the fair value estimate have been delayed due to the delay in the clinical trial.

Fair Value of Financial Instruments

In accordance with ASC

820,

Fair Value Measurements and Disclosures

, fair value is defined as the exit price, or the amount that would be received for the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date.

The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. The guidance establishes

three

levels of inputs that

may

be used to measure fair value:

Level 1:	Quoted market prices in active markets for identical assets or liabilities.
Level 2:	Other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3:	Unobservable inputs reflecting the reporting entity’s own assumptions.

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short duration. The fair value of the Company’s derivative obligation liability is classified as Level

3

within the fair value hierarchy since the valuation model of the derivative obligation is based on unobservable inputs.

Accounts Receivable and Allowance for Doubtful Accounts

The Company’s receivables are recorded when billed and represent claims against

third

parties that will be settled in cash. The carrying value of the Company’s receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. The Company estimates the allowance for doubtful accounts based on historical collection trends, age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that a specific receivable balance

may

be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. A customer’s receivable balance is considered past-due based on its contractual terms. Past-due receivable balances are written-off when the Company’s internal collection efforts have been unsuccessful in collecting the amount due.

Inventories

Inventories are stated at the lower of cost or market and include the cost of material, labor and manufacturing overhead. Cost is determined on the

first

-in,

first

-out basis. The Company writes-down inventory to its estimated net realizable value when conditions indicate that the selling price could be less than cost due to physical deterioration, obsolescence, changes in price levels, or other causes, which it includes as a component of cost of revenues. Additionally, the Company provides valuation allowances for excess and slow-moving inventory on hand that are

not

expected to be sold to reduce the carrying amount of slow-moving inventory to its estimated net realizable value. The valuation allowances are based upon estimates about future demand from its customers and distributors and market conditions. Because some of the Company’s products are highly dependent on government and

third

-party funding, current customer use and validation, and completion of regulatory and field trials, there is a risk that the Company will forecast incorrectly and purchase or produce excess inventories.

As a result, actual demand

may

differ from forecasts and the Company

may

be required to record additional inventory valuation allowances that could adversely impact its gross margins. Conversely, favorable changes in demand could result in higher gross margins when those products are sold.

Equipment, Net

Equipment consisting of office furniture, computer, machinery and equipment is recorded at cost less accumulated depreciation and amortization. Repairs and maintenance costs are expensed as incurred. Depreciation for office furniture, computer, machinery and equipment is computed under the straight-line method over the estimated useful lives. Leasehold improvements are amortized under the straight line method over their estimated useful lives or the remaining lease period, whichever is shorter. When equipment is sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and the impact of any resulting gain or loss is recognized within Other income and (expenses) in the consolidated statement of operations for the period.

Warranty

The Company provides for the estimated cost of product warranties at the time revenue is recognized. The Company’s warranty obligation is calculated based on estimated product failure rates, material usage and estimated service delivery costs incurred in correcting a product failure.

Debt Issue Costs

The Company amortizes debt issue costs to interest expense over the life of the associated debt instrument, using the straight-line method which approximates the interest rate method.

Debt

Discount

The Company amortizes debt discount over the life of the associated debt instrument, using the straight-line method which approximates the interest rate method. Such amortized cost is included with the other income (expense) in the accompanying consolidated statements of operations.

Derivative Financial Instruments

In connection with the sale of convertible debt and equity instruments, the Company

may

also issue freestanding warrants. If freestanding warrants are issued and accounted for as derivative instrument liabilities (rather than as equity), the proceeds are

first

allocated to the fair value of those instruments. The remaining proceeds, if any, are then allocated to the convertible instrument, usually resulting in that instrument being recorded at a discount from its face amount. Derivative financial instruments are initially measured at their fair value using a Binomial Lattice Valuation Model and then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income.

Stock-Based Compensation

The Company has

three

stock-based compensation plans, which are described more fully in Note

9.

Valuation and Amortization Method – The Company estimates 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. The formula does

not

include a discount for post-vesting restrictions, as we have

not

issued awards with such restrictions.   

Expected Term – For options which the Company has limited available data, the expected term of the option is based on the simplified method. This simplified method averages an award’s vesting term and its contractual term. For all other options, the Company's expected term represents the period that the Company's stock-based awards are expected to be outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior.

Expected Volatility – Expected volatility is based on historical volatility. Historical volatility is computed using daily pricing observations for recent periods that corresponded to the expected term of the options.

Expected Dividend – The Company has

not

declared dividends and does

not

anticipate declaring any dividends in the foreseeable future. Therefore, the Company uses a

zero

value for the expected dividend value factor to determine the fair value of options granted.

Risk-Free Interest Rate – The Company bases the risk-free interest rate used in the valuation method on the implied yield currently available on U.S. Treasury

zero

-coupon issues with the same expected term.

Estimated Forfeitures – When estimating forfeitures, the Company considers voluntary and involuntary termination behavior as well as analysis of actual option forfeitures.

Research and Development

Research and development costs, consisting of salaries and benefits, costs of clinical trials, costs of disposables, facility costs, contracted services and stock-based compensation from the engineering, regulatory, scientific and clinical affairs departments, that are useful in developing and clinically testing new products, services, processes or techniques, as well as expenses for activities that

may

significantly improve existing products or processes are expensed as incurred. Costs to acquire technologies that are utilized in research and development and that have

no

future benefit are expensed when incurred.

A

cquired 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, the Company 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. The Company conducted the fiscal

2017

annual impairment assessment as of

April 1, 2017.

As the fair value exceeded book value, the Company concluded there was

no

impairment of the subject clinical protocol.

Patent Costs

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

Credit Risk

Currently, the Company primarily manufactures and sells cellular processing systems and thermodynamic devices principally to the blood and cellular component processing industry and performs ongoing evaluations of the credit worthiness of the Company’s customers. The Company believes that adequate

provisions for uncollectible accounts have been made in the accompanying consolidated financial statements. To date, the Company has

not

experienced significant credit related losses.

Segment Reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision making group, whose function is to allocate resources to and assess the performance of the operating segments. The Company has identified its chief executive officer and chief operating officer as the CODM. In determining its reportable segments, the Company considered the markets and the products or services provided to those markets.

The Company has

two

reportable business segments:

The Clinical Development Division is devel

op

ing autologous (utilizing the patient’s own cells) stem cell-based

therapeutics

that address significant unmet medical needs for applications within the

vascular, cardiology and orthopedic

markets.   

The Device Division

is a pioneer and market leader in the development and commercialization of

automated technologies for c

ell-based t

herapeutics

and bio-processing.

Income Taxes

The tax years

1999

-

2015

remain open to examination by the major taxing jurisdictions to which the Company is subject; however, there is

no

current examination. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense. To date, there have been

no

interest or penalties charged to the Company in relation to the underpayment of income taxes. There were

no

unrecognized tax benefits during the periods presented.

The Company’s estimates of income taxes and the significant items resulting in the recognition of deferred tax assets and liabilities reflect the Company’s assessment of future tax consequences of transactions that have been reflected in the financial statements or tax returns for each taxing jurisdiction in which the Company operates.  The Company bases the provision for income taxes on the Company’s current period results of operations, changes in deferred income tax assets and liabilities, income tax rates, and changes in estimates of uncertain tax positions in the jurisdictions in which the Company operates.  The Company recognizes deferred tax assets and liabilities when there are temporary differences between the financial reporting basis and tax basis of assets and liabilities and for the expected benefits of using net operating loss and tax credit loss carryforwards.  The Company establishes valuation allowances when necessary to reduce the carrying amount of deferred income tax assets to the amounts that the Company believes are more likely than

not

to be realized. The Company evaluates the need to retain all or a portion of the valuation allowance on recorded deferred tax assets.  When a change in the tax rate or tax law has an impact on deferred taxes, the Company applies the change based on the years in which the temporary

differences are expected to reverse.  As the Company operates in more than

one

state, changes in the state apportionment factors, based on operational results,

may

affect future effective tax rates and the value of recorded deferred tax assets and liabilities.  The Company records a change in tax rates in the consolidated financial statements in the period of enactment.

Income tax consequences that arise in connection with a business combination include identifying the tax basis of assets and liabilities acquired and any contingencies associated with uncertain tax positions assumed or resulting from the business combination.  Deferred tax assets and liabilities related to temporary differences of an acquired entity are recorded as of the date of the business combination and are based on the Company’s estimate of the appropriate tax basis that will be accepted by the various taxing authorities and its determination as to whether any of the acquired deferred tax liabilities could be a source of taxable income to realize the Company’s pre-existing deferred tax assets.

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 the Company’s net loss position for all periods presented. Anti-dilutive securities consisted of the following at

June 30:

	2017			2016
Common stock equivalents of convertible debentures		--			3,676,471
Vested Series A warrants		404,412			404,412
Unvested Series A warrants		698,529	(1)		698,529	(1)
Warrants – other		3,725,782			3,725,782
Stock options		397,388			104,378
Restricted stock units		59,694			63,566
Total		5,285,805			8,673,138

( 1 ) The unvested Series A warrants were subject to vesting based upon the amount of funds actually received by the Company in the second close of the August 2015 financing which never occurred. The warrants will remain outstanding but unvested until they expire in February 2021.

Recently Adopted Accounting

Standards

In

June 2014,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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

”. The amendments in ASU

2014

-

12

apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition that affects the vesting of the award. The Company adopted ASU

2014

-

12

effective

July 1, 2016.

The Company applies the amendments in ASU

2014

-

12

prospectively to all awards granted or modified after the effective date. Adoption of the new update to ASU

2014

-

12

did

not

have any impact on the financial statements of the Company.

Recently Issued Accounting

Standards

In

July 2017,

the FASB issued ASU

No.

2017

-

11,

“

Earnings Per Share (Topic

260

); Distinguishing Liabilities from Equity (Topic

480

); Derivatives and Hedging (Topic

815

):  (Part I) Accounting for Certain Financial Instruments with Down Round Features; (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception

”.  ASU

2017

-

11

allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity's own stock.  As a result, financial instruments (or embedded conversion features) with down round features

may

no

longer be required to be accounted for as derivative liabilities.  A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward.  For equity-classified freestanding financial instruments, an entity will treat the value of the effect of the down round as a dividend and a reduction of income available to common shareholders in computing basic earnings per share.  For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings.  ASU

2017

-

11

is effective for fiscal years beginning after

December 15, 2018,

and interim periods within those fiscal years.  Early adoption is permitted.  The guidance in ASU

2017

-

11

can be applied using a full or modified retrospective approach.  The Company has

not

yet determined the effect that ASU

2017

-

11

will have on its results of operations, statement of financial position or financial statement disclosures.

In

May 2017,

the FASB issued ASU

No.

2017

-

09

“Compensation-Stock Compensation (Topic

718

) Scope of Modification Accounting (ASU

2017

-

09

).” ASU

2017

-

09

clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic

718.

The standard is effective for interim and annual reporting periods beginning after

December 15, 2017,

with early adoption permitted. The Company is currently evaluating the impact of its adoption of this standard on its financial statements.

In

January 2017,

the FASB issued ASU

2017

-

04

which removes Step

2

from the goodwill impairment test. It is effective for annual and interim periods beginning after

December 15, 2019.

Early adoption is permitted for an interim or annual goodwill impairment test performed with a measurement date after

January 1, 2017.

The Company has

not

yet determined the effect that ASU

2017

-

04

will have on its results of operations, statement of financial position or financial statement disclosures.  

In

March 2016,

the FASB issued ASU

2016

-

09,

“

Compensation - Stock Compensation (Topic

718

): Improvements to Employee Share-Based Payment Accounting”.

ASU

2016

-

09

simplifies several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. ASU

2016

-

09

is effective for annual periods beginning after

December 15, 2016

and interim periods within those annual periods. Early adoption is permitted. The Company has

not

yet determined the effect that ASU

2016

-

09

will have on its results of operations, statement of financial position or financial statement disclosures.

In

March 2016,

the FASB issued ASU

No.

2016

-

06,

“

Derivatives and Hedging (Topic

815

): Contingent Put and Call Options in Debt Instruments

” (“ASU

2016

-

06”

). This new standard simplifies the embedded derivative analysis for debt instruments containing contingent call or put options by removing the requirement to assess whether a contingent event is related to interest rates or credit risks. ASU

2016

-

06

is effective for annual periods beginning after

December 15, 2017,

and interim periods within fiscal years beginning after

December 15, 2018.

The adoption of this standard is

not

expected to have an impact on the Company’s financial position or results of operations.

In

February 2016,

the FASB issued ASU

2016

-

02,

“Leases (Topic

842

)”

. ASU

2016

-

02

requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. ASU

2016

-

02

is effective for fiscal years beginning after

December 15, 2018

and interim periods therein. The Company has

not

yet determined the effect that ASU

2016

-

02

will have on its results of operations, statement of financial position or financial statement disclosures.

In

July 2015,

the FASB issued ASU

No.

2015

-

11,

“

Inventory: Simplifying the Measurement of Inventory

”, that requires inventory

not

measured using either the last in,

first

out (LIFO) or the retail inventory method to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. The new standard will be effective for fiscal years beginning after

December 15, 2016,

including interim periods within those fiscal years, and will be applied prospectively. Early adoption is permitted. The Company is evaluating the impact that this standard will have on its consolidated financial statements.

In

May 2014,

the FASB issued ASU

2014

-

09,

“

Revenue from Contracts with Customers (Topic

606

)

” (“ASU

2014

-

09”

). ASU

2014

-

09

supersedes the revenue recognition requirements in ASC Topic

605,

“Revenue Recognition” and some cost guidance included in ASC Subtopic

605

-

35,

"

Revenue Recognition

- Construction-Type and Production-Type Contracts

.” The core principle of ASU

2014

-

09

is that revenue is recognized when the transfer of goods or services to customers occurs in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. ASU

2014

-

09

requires the disclosure of sufficient information to enable readers of the Company’s financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU

2014

-

09

also requires disclosure of information regarding significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU

2014

-

09

provides

two

methods of retrospective application. The

first

method would require the Company to apply ASU

2014

-

09

to each prior reporting period presented. The

second

method would require the Company to retrospectively apply ASU

2014

-

09

with the cumulative effect recognized at the date of initial application. ASU

2014

-

09

will be effective for the Company beginning in fiscal

2019

as a result of ASU

2015

-

14,

"

Revenue from Contracts with Customers (Topic

606

): Deferral of the Effective Date

," which was issued by the FASB in

August 2015

and extended the original effective date by

one

year. The Company is currently evaluating the impact of adopting the available methodologies of ASU

2014

-

09

and

2015

-

14

upon its financial statements in future reporting periods. The Company has

not

yet selected a transition method. The Company is also in the process of evaluating the new standard against its existing accounting policies, including the timing of revenue recognition, and its contracts with customers to determine the effect the guidance will have on its financial statements and what changes to systems and controls

may

be warranted.

There have been

four

new ASUs issued amending certain aspects of ASU

2014

-

09,

ASU

2016

-

08,

"

Principal versus Agent Considerations (Reporting Revenue Gross Versus Net)

" was issued in

March 2016

to clarify certain aspects of the principal versus agent guidance in ASU

2014

-

09.

In addition, ASU

2016

-

10,

"

Identifying Performance Obligations and Licensing

," issued in

April 2016,

amends other sections of ASU

2014

-

09

including clarifying guidance related to identifying performance obligations and licensing implementation. ASU

2016

-

12,

"

Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients

" provides amendments and practical expedients to the guidance in ASU

2014

-

09

in the areas of assessing collectability, presentation of sales taxes received from customers, noncash consideration, contract modification and clarification of using the full retrospective

approach to adopt ASU

2014

-

09.

Finally, ASU

2016

-

20,

“

Technical Corrections and Improvements to Topic

606,

Revenue from Contracts with Customers

” was issued in

December 2016,

and provides elections regarding the disclosures required for remaining performance obligations in certain cases and also makes other technical corrections and improvements to the standard. With its evaluation of the impact of ASU

2014

-

09,

the Company will also consider the impact on its financial statements related to the updated guidance provided by these

four

new ASUs.

XML

Note 3 - Intangible Assets

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

3.

     

Intangible Assets

Intangible assets consist of the following based on the Company’s determination of the fair value of identifiable assets acquired:

As of June 30, 2017
	Weighted Average Amortization Period (in Years)		Gross Carrying Amount		Accumulate d Amortization		Impairment		Net
Trade names		7	$	30,000	$	14,000			$	16,000
Licenses		7		482,000		233,000				249,000
Customer relationships		3		443,000		443,000				--
Device registration		7		90,000		60,000				30,000
Covenants not to compete		5		955,000		645,000	$	310,000		--
Amortizable intangible assets				2,000,000		1,395,000		310,000		295,000
Clinical protocols				19,870,000		--				19,870,000
Total			$	21,870,000	$	1,395,000	$	310,000	$	20,165,000

As of June 30, 2016
	Weighted Average Amortization Period (in Years)		Gross Carrying Amount		Accumulated Amortization		Net
Trade names		7	$	29,000	$	10,000	$	19,000
Licenses		7		462,000		157,000		305,000
Customer relationships		3		424,000		335,000		89,000
Device registration		7		86,000		49,000		37,000
Covenants not to compete		5		955,000		454,000		501,000
Amortizable intangible assets				1,956,000		1,005,000		951,000
Clinical protocols				19,870,000		--		19,870,000
Total			$	21,826,000	$	1,005,000	$	20,821,000

The change in the gross carrying amount is due to foreign currency exchange fluctuations. There was a

$310,000

impairment of the covenants

not

to compete intangible assets during the year ended

June 30, 2017

as the assumed revenues that were in the fair value estimate have been delayed due to the delay in the clinical trial. Amortization of intangible assets was

$359,000

and

$438,000

for the years ended

June 30, 2017

and

2016.

Clinical protocols have

not

yet been introduced to the market place and are therefore

not

yet subject to amortization. The Company’s estimated future amortization expense for subsequent years are as follows:

Year Ended June 30,
2018	$	81,000
2019		81,000
2020		81,000
2021		52,000
Total	$	295,000

XML

Note 4 - Equipment

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

4.

     

Equipment, Net

Equipment consisted of the following at

June 30:

	2017			2016			Estimated Useful Life (years)
Machinery and equipment	$	5,772,000		$	6,604,000			2.5	-	10
Computer and software		733,000			397,000			2	-	5
Office equipment		427,000			260,000			5	-	10
Leasehold improvements		227,000			149,000			Shorter of 5 years or remaining lease term
Total equipment		7,159,000			7,410,000
Less accumulated depreciation and amortization		(4,829,000	)		(4,448,000	)
Total equipment, net	$	2,330,000		$	2,962,000

Depreciation and amortization expense for the years ended

June 30, 2017

and

2016

was

$408,000

and

$630,000,

respectively.

XML

Note 5 - Related Party Transactions

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

5

.

Related Party

Transactions

Bill Payment Arrangement

The Company entered into a bill payment arrangement whereby Boyalife Group Ltd. (“Payor”), the Company’s largest shareholder, agreed to pay the Company’s legal expenses payable to the Company’s attorney related to certain litigation involving SynGen Inc. (the “Bill Payment Arrangement”), although the Company remains jointly and severally liable for the payment of such legal fees. The terms of the Bill Payment Arrangement provided that the Company will reimburse Payor for any and all amounts paid by Payor in connection with the Bill Payment Arrangement under certain specified events. There is

no

interest payable on outstanding balance of related party payable. As the Company is using a different attorney than specified in the bill payment arrangement for this litigation, the arrangement is

no

longer active. As of

June 30, 2017,

invoices totaling

$606,000

had been paid by Payor and are included in related party payable as the Company anticipates repaying this within a year.

Revolving Credit Agreement

On

March 6, 2017,

Cesca entered into the Credit Agreement with Boyalife Investment Fund II, Inc. (the “Lender”). The Lender is a wholly owned subsidiary of Boyalife Group Inc., which is owned and controlled by the Company’s Chief Executive Officer and Chairman of the Board of Directors. The Credit Agreement grants to the Company the right to borrow up to

$5,000,000

in amounts of

$500,000

per advance on an unsecured basis (the “Loan”) at any time prior to

March 6, 2022 (

the “Maturity Date”). On the date of the Credit Agreement, the Company made an initial draw of

$1,500,000

and drew down an additional

$2,000,000

during the quarter ended

June 30, 2017,

and

$1,500,000

during the quarter ended

September 30, 2017.

The Credit Agreement and the Convertible Promissory Note issued thereunder (the “Note”) provide that the principal and all accrued and unpaid interest under the Loan will be due and payable on the Maturity Date, with payments of interest-only due on the last day of each calendar year. The Loan bears interest at

22%

per annum, simple interest, except that certain borrowed amounts used to pay legal expenses under the bill payment arrangement will

not

bear interest. The Note can be prepaid in whole or in part by the Company at any time without penalty. If the Note is

not

repaid in full on or before the Maturity Date, the Lender has the right after the Maturity Date to convert any unpaid principal and accrued interest into shares of the Company’s common stock at a conversion price equal to

90%

of the average daily volume-weighted average trading price of the Company’s common stock during the

10

trading days immediately prior to the Maturity Date, provided that the number of shares issuable upon such conversion

may

not

exceed

19.99%

of the number of outstanding shares of common stock of the Company on the date of the Credit Agreement (unless the Company obtains stockholder approval for such issuance in the manner required by the Marketplace Rules of the Nasdaq Stock Market, Inc.). 

The Maturity Date of the Note is subject to acceleration at the option of the Lender upon customary events of default, which include a breach of the Loan documents, termination of operations, or bankruptcy. The Lender’s obligation to make advances under the Loan is subject to the Company’s representations and warranties in the Credit Agreement continuing to be true at all times and there being

no

continuing event of default under the Note. The Credit Agreement provides that if the Lender at any time in the future purchases the Company’s blood and bone marrow processing device business, the Lender would refund to the Company legal fees expended by the Company in connection with certain litigation expenses funded by the Company with proceeds of the Loan.

No

default has occurred through the date of filing.

The Company recorded interest expense of

$122,000

for the year ended

June 30, 2017.

On

September 13, 2017,

the Company entered into Amendment

No.

1

to the Credit Agreement (the “Amended Credit Agreement”). The Amended Credit Agreement amends the Credit Agreement originally entered into by the Company and Lender on

March 6, 2017,

by increasing the Company’s maximum borrowing availability thereunder from

$5.0

million to

$10.0

million. In connection with such amendment, the Company and Lender entered into an amended and restated convertible promissory note to reflect the new aggregate maximum principal amount of

$10.0

million.

Distributor Agreement

and Subsequent Event

On

August 21, 2017,

ThermoGenesis entered into an International Distributor Agreement with Boyalife W.S.N. Under the terms of the agreement, Boyalife W.S.N. was granted the exclusive right, subject to existing distributors and customers (if any), to develop, sell to, and service a customer base for ThermoGenesis’ AXP® (AutoXpress

®

) System and BioArchive System in the People’s Republic of China (excluding Hong Kong and Taiwan), Singapore, Indonesia, and the Philippines (the “Territories”). Boyalife W.S.N. is an affiliate of our Chief Executive Officer and Chairman of our Board of Directors, and Boyalife (Hong Kong) Limited, our largest stockholder. Boyalife W.S.N,’s rights under the agreement include the exclusive right to distribute AXP

®

Disposable Blood Processing Sets and use rights to the AXP

®

(AutoXpress

®

) System, BioArchive System and other accessories used for the processing of stem cells from cord blood in the Territories. Boyalife W.S.N. is also appointed as the exclusive service provider to provide repairs and preventative maintenance to ThermoGenesis products in the Territories.

The term of the agreement is for

three

years with ThermoGenesis having the right to renew the agreement for successive

two

-year periods at its option. However, ThermoGenesis has the right to terminate the agreement early if Boyalife W.S.N. fails to meet specified minimum purchase requirements.

Revenues

During the year ended

June 30, 2017,

the Company recorded

$308,000

of revenues from Boyalife and had an accounts receivable balance of

$308,000

at

June 30, 2017.

As of

September 5, 2017

the Company has collected all of this accounts receivable.

XML

Note 6 - Convertible Debentures

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

6

.     

Convertible Debentures

February 2016

Financing Transaction

In

February 2016

in exchange for aggregate proceeds of

$15,

000,000

the Company sold and issued to Boyalife Investment Inc. and Boyalife (Hong Kong) Limited (i)

735,294

shares of common stock at a purchase price of

$3.40

per share (the “Stock Price”) for gross proceeds of

$2,500

,000

(ii) Secured Convertible Debentures for

$12,500,000

(the “Debentures”) which are convertible into

3,676,471

shares of common stock

, and (iii) warrants to purchase

3,529,412

additional shares of common stock at an exercise price of

$8.00

per share for a period of

five

years. The amount of warrants was based on

80%

coverage of the shares issued or to be issued for the equity transaction in (i) and the debt transaction in (ii) above. The warrants were exercisable on

August 13, 2016

and are outstanding at

June 30, 2017.

On

August 22, 2016,

the Company notified Boyalife Investment Inc., that the Company elected to convert all outstanding principal and interest accrued and otherwise payable under the Debentures, which included the conversion of

$12,500,000

of principal and

$8,250,000

of interest up to and including the maturity date of the Debentures. Upon conversion,

6,102,941

shares of common stock were issued and the Debentures and all related security interest and liens were terminated. The

2,426,470

common shares that were issued for payment of the interest, had a fair market value of

$11,403,000

on

August 22, 2016.

Accordingly, an additional

$3,153,000

of interest expense was recorded on the date of conversion.

At the time of the conversion, the remaining debt discount of

$9,538,000

and debt issue costs of

$155,000

were fully amortized.

Thirty-Year Debenture Restructuring Transaction 

On

August 31, 2015,

the Company sold senior secured convertible debentures in a financing to raise up to

$15,000,000

(“Thirty-Year Debentures”), Series A warrants to purchase up to

1,102,942

shares of the Company’s common stock at an exercise price equal to

$13.60

per share for a period of

five

and

one

-half years (“Series A warrants”) and Series B warrants to purchase up to

606,618

shares of the Company’s common stock at an exercise price equal to

$13.60

per share for a period of

eighteen

months (“Series B warrants”). At the initial closing on

August 31, 2015,

the Company received gross proceeds of

$5,500,000

and

404,412

Series A warrants vested and

222,427

Series B warrants vested. The

second

closing for up to an additional

$9,500,000

was dependent on a number of items including receipt by the Company of approval from the California Institute for Regenerative Medicine (“CIRM”) for a grant in the amount of

$10,000,000

to support the Company’s pivotal trial for CLIRST III. The Company applied for the CIRM grant in

August 2015.

The Company withdrew its application for the CIRM grant.

For financial reporting purposes, the net proceeds of

$4,720,000

was allocated

first

to the residual fair value of the Series A warrants, amounting to

$3,385,000

then to the residual fair value of the obligation to issue the Series B warrants of

$897,000

the remaining value to the intrinsic value of the beneficial conversion feature on the Thirty-Year Debentures of

$438,000

resulting in an initial carrying value of the Thirty-Year Debentures of

$0.

The initial debt discount on the Thirty-Year Debentures totaled

$4,720,000

and was amortized over the

30

year life of the convertible debentures.  

The Company entered into a registration rights agreement pursuant to which the Company agreed to register all of the shares of common stock then issued and issuable upon conversion in full of the Thirty-Year Debentures and all warrant shares issuable upon exercise of the Series A warrants and Series B warrants. The holders were entitled to receive liquidated damages upon the occurrence of a number of events relating to filing, getting an effective and maintaining an effective registration statement, including the failure of the Company to have such registration statement declared effective by

October 26, 2015.

As the Company did

not

file an effective registration statement until

November 24, 2015

and the Company was precluded by the SEC from registering all of the registrable securities on a single registration statement, management considered it probable that

five

months of liquidated damages would be due and accrued

$1,100,000

during the year ended

June 30, 2016.

Management made

one

liquidated damages payment of

$220,000

during the

three

months ended

December 31, 2015.

In connection with the

February 2016

financing transaction described above, the Company concurrently entered into a Consent, Repayment and Release Agreement, pursuant to which the Company repaid the Thirty-Year Debentures and all related interest and liquidated damages. Upon the Company’s payment of

$7.5

million, the Thirty-Year Debentures were deemed repaid in full and cancelled, all liquidated damages due and payable were deemed paid and satisfied in full, the registration rights agreement was terminated and the exercise price of the Series A warrants was changed from

$13.60

to

$8.00.

The Company recomputed the fair value of the Series A warrants before and after the modification using the Binomial option pricing model with the following assumptions: expected volatility of

91%,

discount rate of

1.2%,

contractual term of

5

years and dividend rate of

0%.

The loss on modification of

$149,000

was recorded in the accompanying consolidated statements of operations and comprehensive loss for the year ended

June 30, 2016.

Pursuant to the terms of the Consent Repayment and Release Agreement, the holders of the Series B warrants made a single,

one

-time cashless exercise of Series B warrants for

125,000

shares of common stock. The Company recomputed the fair value of the Series B warrants using the Binomial option pricing model. All remaining Series B warrants valued at

$159,000

were cancelled.

This restructuring transaction occurred on

February 16, 2016

and the Company recorded a loss on extinguishment of debt of

$795,000

during the year ended

June 30, 2016.

The loss on extinguishment was calculated as follows:

Payment	$	7,500,000
Repayment of Thirty-Year debentures		(5,500,000	)
Payment of accrued liquidated damages and interest		(897,000	)
Loss on modification of Series A warrants		(149,000	)
Cancellation of Series B derivative obligation		(159,000	)
Loss on extinguishment of debt	$	795,000

At the time of the repayment, the remaining debt discount of

$4,648,000

and debt issue costs of

$765,000

were fully amortized. For the year ended

June 30, 2016,

the Company amortized

$4,720,000

of debt discount and

$777,000

of debt issue costs.

XML

Note 7 - Derivative Obligations

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Derivatives and Fair Value [Text Block]

7

.     

Derivative Obligations

Series A Warrants

Series A warrants to purchase

404,412

common shares were issued and vested during the year ended

June 30, 2016.

At the time of issuance, the Company determined that because such warrants can be settled for cash at the holders’ option in a future fundamental transaction they constituted a derivative liability. The Company has estimated the fair value of the derivative liability, using a Binomial Lattice Valuation Model and the following assumptions:

	Series A
	June 30, 2017			June 30, 2016
Market price of common stock	$	3.17		$	2.93
Expected volatility		110	%		99	%
Contractual term (years)		3.7			4.7
Discount rate		1.66	%		1.01	%
Dividend rate		0	%		0	%
Exercise price	$	8.00		$	8.00

Expected volatilities are based on the historical volatility of the Company’s common stock. Contractual term is based on remaining term of the respective warrants. The discount rate represents the yield on U.S. Treasury bonds with a maturity equal to the contractual term.

The Company recorded a (loss)gain of (

$60,000

) and

$3,395,000

during the years ended

June 30, 2017

and

2016,

respectively representing the net change in the fair value of the derivative liability, which is presented as fair value change of derivative instruments, in the accompanying consolidated statements of operations and comprehensive loss.

The following table represents the Company’s fair value hierarchy for its financial liabilities measured at fair value on a recurring basis as of

June 30, 2017

and

2016:

	Balance at June 30, 2017		Level 1		Level 2		Level 3
Derivative obligation	$	730,000	$	-	$	-	$	730,000

	Balance at June 30, 2016		Level 1		Level 2		Level 3
Derivative obligation	$	670,000	$	-	$	-	$	670,000

The following table reflects the change in fair value of the Company’s derivative liabilities for the year ended

June 30, 2017:

	Amount
Balance – July 1, 2016	$	670,000
Change in fair value of derivative obligation		60,000
Balance – June 30, 2017	$	730,000

XML

Note 8 - Commitments and Contingencies

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

8

.     

Commitments and Contingencies

Operating Leases

The Company leases the Rancho Cordova and Gurgaon, India facilities pursuant to operating leases, which contain scheduled rent increases. The leases expire in

May 2019

and

March 2018,

respectively. The Company has terminated the existing Gurgaon lease and signed a new

one

which terminates

September 14, 2023.

However, either party can terminate the lease after

September 2019

with

three

months notice. The Company recognizes rent expense on a straight-line basis over the term of the facility lease. The annual future minimum lease payments for the Company’s non-cancelable operating leases are as follows:

2018		297,000
2019		279,000
2020		3,000
Total	$	579,000

Rent expense was

$291,000

and

$657,000

for the years ended

June 30, 2017

and

2016,

respectively.

Financial Covenants

Effective

May 15, 2017,

the Company entered into a Sixth Amended and Restated Technology License and Escrow Agreement with Cbr Systems, Inc. which modified the financial covenant that the Company must meet in order to avoid an event of default. The Company must maintain a cash balance and short-term investments net of debt or borrowed funds that are payable within

one

year of

not

less than

$2,000,000.

The Company was in compliance with this financial covenant as of

June 30, 2017

and

August 31, 2017.

Potential Severance Payments

The Company’s Chief Operating Officer (“COO”) has rights upon termination under her employment agreement. The agreement provides, among other things, for the payment of

twelve

months of severance compensation upon termination under certain circumstances. With respect to this agreement at

June 30, 2017,

potential severance amounted to

$320,000.

Contingencies

In fiscal

2016,

the Company signed an engagement letter with a strategic consulting firm. Included in the engagement letter was a success fee due upon the successful conclusion of certain strategic transactions. On

May 4, 2017,

a lawsuit was filed against the Company by the consulting firm as the consulting firm believes that it is owed a transaction fee of

$1,000,000

under the terms of the engagement letter due to the conversion of the Boyalife Debentures in

August 2016.

The Company intends to defend the lawsuit vigorously and 

no

accrual has been recorded for this contingent liability as of

June 30, 2017.

In the normal course of operations, the Company

may

have disagreements or disputes with customers, employees or vendors. Such potential disputes are seen by management as a normal part of business. As of

June 30, 2017,

management believes any liability that

may

ultimately result from the resolution of these matters will

not

have a material adverse effect on the Company’s consolidated financial position, operating results or cash flows.

Warranty

The Company offers a warranty on all of the Company’s non-disposable products of

one

to

two

years. The Company warrants disposable products through their expiration date. The Company periodically assesses the adequacy of the Company’s recorded warranty liabilities and adjusts the amounts as necessary.

Changes in the Company’s product liability which is included in other current liabilities during the period are as follows:

	For years ended June 30,
	2017			2016
Beginning balance	$	566,000		$	627,000
Warranties issued during the period		120,000			97,000
Settlements made during the period		(93,000	)		(287,000	)
Changes in liability for pre-existing warranties during the period		(5,000	)		129,000
Ending balance	$	588,000		$	566,000

XML

Note 9 - Stockholders' Equity

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

9

.     

Stockholders’ Equity

Common Stock

On

August 22, 2016,

the Company notified Boyalife Investment Inc., that it elected to convert all outstanding principal and interest accrued and otherwise payable under the Debentures, which included the conversion of

$12,500

,000

of principal and

$8,250

,000

of interest up to and including the maturity date of the Debentures. Upon conversion,

6,102,941

shares of common stock were issued and the Debentures and all related security interest and liens were terminated. (See note

6

)

On

August 3, 2016,

the Company sold

600,000

shares of common stock at a price of

$4.10

per share. The net proceeds to the Company from the sale and issuance of the shares, after deducting the offering expenses borne by the Company of

$369

,000,

were

$2,092,000

. 

In

July 2016,

the Compensation Committee of the Board of Directors granted

118,288

shares of fully vested common stock to employees in partial payment of amounts earned under the Company’s

2016

short term incentive plan. 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

46,879

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 is as follows:

	2017				2016
	Number of Shares		Weighted- Average Exercise Price Per Share		Number of Shares			Weighted - Average Exercise Price Per Share
Beginning balance		4,828,723	$	9.37		252,620		$	44.18
Warrants granted		--				5,238,971		$	9.83
Warrants exercised (cashless)		--				(51,712	)	$	13.60
Warrants expired/canceled		--				(611,156	)	$	17.21
Outstanding at June 30		4,828,723	$	9.37		4,828,723		$	9.37
Exercisable at June 30		4,130,192	$	9.60		600,782		$	19.02

Equity Plans and Agreements

The Company recorded stock-based compensation of

$1,461,000

and

$742,000

for the years ended

June 30, 2017

and

2016.

On

May 5, 2017,

the stockholders approved the Amended

2016

Equity Incentive Plan (“Amended

2016

Plan”) under which up to

600,000

shares

may

be issued pursuant to grants of shares, options, or other forms of incentive compensation. As of

June 30, 2017,

254,224

awards were available for issuance under the Amended

2016

Plan.

The

2012

Independent Director Plan (

“2012

Plan”) permits the grant of stock or options to independent directors. A total of

25,000

shares were approved by the stockholders for issuance under the

2012

Plan. Options are granted at prices that are equal to

100%

of the fair market value on the date of grant, and expire over a term

not

to exceed

ten

years. Options generally vest in monthly increments over

one

year, unless otherwise determined by the Board of Directors. As of

June 30, 2017,

there were

194

shares available for issuance.

The

2006

Equity Incentive Plan (

“2006

Plan”) permitted the grant of options, restricted stock units, stock bonuses and stock appreciation rights to employees, directors and consultants. The

2006

Plan, but

not

the awards granted thereunder, expired in

2016.

As of

June 30, 2017,

134,164

option and restricted stock unit awards remained outstanding.

On

July 7, 2016,

the Compensation Committee also adopted a short term incentive program under which cash awards and shares of common stock

may

be granted to employees of the Company (the “Short Term Program”). The aggregate amount of the cash awards issuable pursuant to the Short Term Plan is approximately

$276,000.

Up to

104,000

shares of common stock from the Company’s

2006

Plan, subject to vesting, are issuable pursuant to the Short Term Program. On

July 26, 2016,

98,417

shares and

$266,000

of cash awards were granted under the Short Term Program. The cash awards granted pursuant to the Short Term Program were payable and the shares of common stock issued pursuant to the Short Term Program fully vested on

July 1, 2017,

provided, that such award recipients were employed by the Company as of

July 1, 2017

or immediately if terminated without cause. Three of the

eight

employees were terminated without cause during the year ended

June 30, 2017,

as such,

51,636

shares vested. The remaining

46,781

shares vested on

July 1, 2017.

Upon the termination of the employment of the Company’s Chief Executive Officer (“CEO”) in

November 2016

and Chief Financial Officer (“CFO”) in

March 2017,

in accordance with their employment agreements, all outstanding options and restricted stock unit awards immediately vested. As a result, the Company recognized (i)

$539,000

of stock compensation expense in general and administrative for the quarter ended

December 31, 2016,

as the vesting accelerated on the CEO’s options to purchase

72,496

shares of common stock and

79,720

restricted stock unit awards, and (ii)

$94,000

of stock compensation expense in general and administrative for the quarter ended

March 31, 2017

as the vesting accelerated on the CFO’s options to purchase

16,248

shares of common stock and

15,914

restricted stock unit awards. Additionally, the terms of the options were modified upon the executives’ termination such that the options were deemed to be exercisable for longer than

90

days from the date of termination. There was

no

incremental compensation cost recorded for this modification as the fair-value-based measure of the modified award on the date of modification was less than the fair-value-based measure of the original award immediately before the modification.

 

On

February 24, 2017,

the Company appointed a Chief Operating Officer. As part of the terms of her employment agreement, she received an annual grant of

25,000

restricted stock units (“RSUs”) and options to purchase

25,000

common shares under the

2016

Equity Incentive Plan (

“2016

Plan”). The annual grant of RSUs and stock options will vest in

four

equal installments:

25%

on

March 31,

25%

on

June 30,

25%

on

September 30

and

25%

on

December 31

of each year. The stock options granted in

February 2017

have an exercise price of

$2.89,

which was the closing price on the date of grant.

In

December 2016,

the Compensation Committee of the Board of Directors granted

50,000

options to the Company’s CEO under the

2016

Plan. The options have an exercise price of

$2.91,

the closing price on the date of grant, they vest in

five

equal installments on each of

December 16, 2016,

February 4, 2017,

May 4, 2017,

August 4, 2017

and

November 4, 2017

and have a

seven

year life.

Stock Options

The Company issues new shares of common stock upon exercise of stock options. The following is a summary of option activity for the Company’s stock option plans:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at June 30, 2016		104,378		$	14.85
Granted		318,324		$	2.98
Forfeited/cancelled		(22,814	)	$	6.39
Expired		(2,500	)	$	18.46
Exercised		--			--
Outstanding at June 30, 2017		397,388		$	5.80		6.2	$	69,000
Vested and Expected to Vest at June 30, 2017		376,595		$	5.94		6.2	$	64,000
Exercisable at June 30, 2017		242,073		$	7.38		5.5	$	43,000

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. There were

no

options that were exercised during the years ended

June 30, 2017

and

2016.

On

July 7, 2016,

the Compensation Committee of the Board of Directors granted options to purchase a total of

156,100

common shares to various employees under the

2016

Plan. The options have an exercise price of

$2.86,

the closing price on the date of grant, vest ratably every

six

months over a

three

year period, and have a

seven

year life.

Non-vested stock option activity for the year ended

June 30, 2017,

is as follows:

	Non-vested Stock Options			Weighted-Average Grant Date Fair Value
Outstanding at June 30, 2016		43,107		$	7.46
Granted		318,325		$	2.16
Vested		(185,019	)	$	3.07
Forfeited		(21,097	)	$	3.31
Outstanding at June 30, 2017		155,316		$	2.39

The fair value of the Company’s stock options granted for the years ended

June 30, 2017

and

2016

was estimated using the following weighted-average assumptions:

	2017			2016
Expected life (years)		4			5
Risk-free interest rate		1.3	%		1.5	%
Expected volatility		102	%		80	%
Dividend yield		0	%		0	%

The weighted average grant date fair value of options granted during the years ended

June 30, 2017

and

2016

was

$2.16

and

$5.75,

respectively.

At

June 30, 2017,

the total compensation cost related to options granted under the Company’s stock option plans but

not

yet recognized was

$275,000.

This cost will be amortized on a straight-line basis over a weighted-average period of approximately

one

and a half years and will be adjusted for subsequent changes in estimated forfeitures. The total fair value of options vested during the years ended

June 30, 2017

and

2016

was

$572,000

and

$354,000.

Common Stock Restricted Awards

The following is a summary of restricted stock unit activity:

	2017					2016
	Number of Shares			Weighted- Average Grant Date Fair Value		Number o f Shares			Weighted- Average Grant Date Fair Value
Balance at June 30		63,566		$	14.96		72,589		$	22.40
Granted		123,417		$	4.55		10,000		$	2.98
Vested		(125,513	)	$	9.47		(6,120	)	$	28.94
Forfeited		(1,776	)	$	27.05		(12,903	)	$	41.15
Outstanding at June 30		59,694		$	4.62		63,566		$	14.96

In connection with the vesting of the restricted stock unit 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

145

and

1,300

shares for the years ended

June 30, 2017

and

2016,

respectively 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.

As of

June 30, 2017,

the Company had

$43,000

in total unrecognized compensation expense related to the Company’s restricted stock unit awards, which will be recognized over a weighted average period of approximately

seven

months.

XML

Note 10 - Concentrations

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

10

.     

Concentrations

One distributor had an accounts receivable balance of

$1,388,000

or

36%

and

$901,000

or

28%

at

June 30, 2017

and

2016,

respectively. The Company did

not

renew the contract with this distributor in

August 2017

and signed a contract with a new distributor. A customer had an accounts receivable balance of

$259,000

or

7%

and

$620,000

or

19%

at

June 30, 2017

and

2016,

respectively. A

second

distributor had an accounts receivable balance of

$304,000

or

8%

and

$320,000

or

10%

at

June 30, 2017

and

2016,

respectively.

Revenues from a customer totaled

$3,263,000

or

22%

and

$2,475,000

or

21%

for the years ended

June 30, 2017

and

2016,

respectively. Revenues from

one

distributor totaled

$2,842,000

or

20%

and

$2,797,000

or

23%

of net revenues for the years ended

June 30, 2017

and

2016,

respectively. The Company did

not

renew the contract with this distributor in

August 2017

and replaced it with a different distributor.

The following represents the Company’s revenues by product platform for the years ended

June 30:

	2017		2016
AXP	$	8,715,000	$	6,932,000
BioArchive		3,318,000		2,465,000
Manual Disposables		1,195,000		1,507,000
Bone Marrow		745,000		459,000
Other		552,000		566,000
	$	14,525,000	$	11,929,000

The Company had sales to customers as follows for the years ended

June 30:

	2017		2016
United States	$	6,675,000	$	5,122,000
China		3,296,000		2,797,000
Asia – other		1,951,000		1,955,000
Europe		1,739,000		1,343,000
Other		864,000		712,000
	$	14,525,000	$	11,929,000

The Company attributes revenue to different geographic areas based on where items are shipped or services are performed.

Two suppliers accounted for

64%

and

20%

of total inventory purchases during the year ended

June 30, 2017.

Two

suppliers accounted for

65%

and

21%

of total inventory purchases during the year ended

June 30, 2016.

The Company has a contract manufacturer in Costa Rica that produces certain disposables. The Company’s equipment, net of accumulated depreciation, is summarized below by geographic area:

	June 30, 2017		June 30, 2016
United States	$	1,559,000	$	2,030,000
Costa Rica		322,000		367,000
India		261,000		279,000
All other countries		188,000		286,000
Total equipment, net	$	2,330,000	$	2,962,000

XML

Note 11 - Segment Reporting

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

11.

     

Segment Reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision making group, whose function is to allocate resources to and assess the performance of the operating segments. The Company has identified its Chief Executive Officer and Chief Operating Officer as the CODM. In determining its reportable segments, the Company considered the markets and the products or services provided to those markets.

During the quarter ended

June 30, 2017,

the Company developed a plan to begin separately operating its device and therapeutics businesses. The Company identified the following

two

reportable segments, which are the same as its operating segments:

The Clinical Development Division is devel

op

ing autologous (utilizing the patient’s own cells) stem cell-based

therapeutics

that address significant unmet medical needs for applications within the

vascular, cardiology and orthopedic

markets.   

The Device Division

is a pioneer and market leader in the development and commercialization of

automated technologies for c

ell-based t

herapeutics

and bio-processing.

The following table summarizes the operating results of the Company’s reportable segments:

	Year Ended June 30, 2017
	Clinical Development			Device			Total
Net revenues	$	492,000		$	14,033,000		$	14,525,000
Cost of revenues		466,000			8,220,000			8,686,000
Gross profit		26,000			5,813,000			5,839,000
Operating expenses		8,966,000			6,113,000			15,079,000
Operating profit (loss)	$	(8,940,000	)	$	(300,000	)	$	(9,240,000	)
Depreciation and amortization	$	501,000		$	329,000		$	830,000
Stock-based compensation expense	$	970,000		$	491,000		$	1,461,000

	Year Ended June 30, 2016
	Clinical Development			Device			Total
Net revenues	$	646,000		$	11,283,000		$	11,929,000
Cost of revenues		574,000			8,611,000			9,185,000
Gross profit		72,000			2,672,000			2,744,000
Operating expenses		8,312,000			5,297,000			13,609,000
Operating profit (loss)	$	(8,240,000	)	$	(2,625,000	)	$	(10,865,000	)
Depreciation and amortization	$	644,000		$	524,000		$	1,168,000
Stock-based compensation expense	$	548,000		$	194,000		$	742,000

The Company has

not

yet allocated assets on a segment basis.

XML

Note 12 - Income Taxes

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

12

.     

Income Taxes

Loss before income tax benefits was comprised of

$29,005,000

from US and

$763,000

from foreign jurisdictions in

2017

and

$17,789,000

from US and

$799,000

from foreign jurisdictions in

2016.

The reconciliation of federal income tax attributable to operations computed at the federal statutory tax rate of

34%

to income tax benefit is as follows for the years ended

June 30:

	2017			2016
Statutory federal income tax benefit	$	(10,121,000	)	$	(6,300,000	)
Unbenefited net operating losses and credits		2,281,000			3,391,000
Disallowed financing costs		6,959,000			2,607,000
State and local taxes		88,000			69,000
Other		120,000			233,000
Total income tax benefit	$	(673,000	)	$	--

The deferred income tax benefit of

$673,000

is due to changes in the state tax rate over the last several years. Approximately

$559,000

of the benefit relates to state rate changes prior to fiscal

2017,

which was all recognized in the current year, of which

$157,000

relates to fiscal

2016

and

$402,000

relates to years prior to fiscal

2016.

The Company believes these amounts are quantitatively and qualitatively immaterial to the balance sheets as of

June 30, 2015

and

June 30, 2016,

as well as the statements of operations and comprehensive loss for the years then ended, and to fiscal

2017.

A valuation allowance is provided when it is more likely than

not

that some portion of the deferred tax assets will

not

be realized.

At

June 30, 2017,

the Company had net operating loss carryforwards for federal and state income tax purposes of

$118,956,000

and

$42,922,000

respectively that are available to offset future income. The federal and state loss carryforwards expire in various years between

2018

and

2037.

At

June 30, 2017,

the Company has research and experimentation credit carryforwards of

$1,458,000

for federal tax purposes that expire in various years between

2019

and

2037,

and

$1,456,000

for state income tax purposes that do

not

have an expiration date.

Significant components of the Company’s deferred tax assets and liabilities for federal and state income taxes are as follows:

	June 30, 2017			June 30, 2016
Deferred tax assets:
Net operating loss carryforwards	$	43,687,000		$	41,023,000
Income tax credit carryforwards		2,419,000			2,367,000
Stock compensation		1,047,000			874,000
Other		1,124,000			1,858,000
Total deferred tax assets		48,277,000			46,122,000
Deferred tax liabilities
Indefinite lived intangible assets		(6,968,000	)		(7,641,000	)
Depreciation and amortization		(176,000	)		(230,000	)
Total deferred tax liabilities		(7,144,000	)		(7,871,000	)
Valuation allowance		(48,101,000	)		(45,892,000	)
Net deferred taxes	$	(6,968,000	)	$	(7,641,000	)

The valuation allowance increased by

$2,209,000

in

2017.

As of

June 30, 2017,

the Company has a benefit of

$215,000

related to stock option deductions, which will be credited to paid-in capital when realized.

In

August 2016,

the conversion of the Boyalife Debentures effected an “ownership change” as defined under the provisions of the Tax Reform Act of

1986.

As a result, any net operating loss and credit carryovers existing at that date will be subject to an annual limitation regarding their utilization against taxable income in future periods. Additionally, before the conversion of the debentures, it is possible that “ownership changes” occurred, which could create additional imitations on the use of our net operating losses and credit carryovers.

XML

Note 13 - Employee Retirement Plan

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

13

.     

Employee Retirement Plan

The Company sponsors an Employee Retirement Plan, generally available to all employees, in accordance with Section

401

(k) of the Internal Revenue Code. Employees

may

elect to contribute up to the Internal Revenue Service annual contribution limit. Under this Plan, at the discretion of the Board of Directors, the Company

may

match a portion of the employees’ contributions. The Company made

no

discretionary or matching contributions to the Plan for the years ended

June 30, 2017

and

2016.

XML

Note 14 - Subsequent Event

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Subsequent Events [Text Block]

14

.     

Subsequent Event

On

July 7, 2017,

the Company entered into a transaction in which its wholly owned subsidiary, ThermoGenesis, acquired the business and substantially all of the assets of SynGen Inc. (“SynGen”), a privately held Sacramento, California-based technology company that develops, markets, and sells advanced cell separation tools and accessories. In the transaction (the “SynGen Transaction”), ThermoGenesis acquired substantially all of SynGen’s operating assets, including its proprietary cell processing platform. In exchange, ThermoGenesis issued to SynGen shares of ThermoGenesis common stock that, after giving effect to the issuance, constitute

20%

of ThermoGenesis’ outstanding common shares, and ThermoGenesis also made a

one

-time cash payment of

$1.0

million to SynGen (together with the issuance of common stock, the “Transaction Consideration”). The preliminary purchase price is

not

available as the Company is in process of completing the valuation of the ThermoGenesis stock. The final determination of the fair value of certain assets acquired and the ThermoGenesis stock issued will be completed within the

12

-month measurement period from the date of acquisition as required. Immediately prior to the SynGen Transaction, the Company contributed the assets, business, and current liabilities of its blood and bone-marrow processing device business to ThermoGenesis and will operate such business (together with the acquired business) through the ThermoGenesis subsidiary.

On

September 13, 2017,

the Company entered into Amendment

No.

1

to the Credit Agreement (the “Amended Credit Agreement”). The Amended Credit Agreement amends the Credit Agreement originally entered into by the Company and Lender on

March 6, 2017,

by increasing the Company’s maximum borrowing availability thereunder from

$5.0

million to

$10.0

million. In connection with such amendment, the Company and Lender entered into an amended and restated convertible promissory note to reflect the new aggregate maximum principal amount of

$10.0

million.

In

August 2017,

the Board of Directors approved changing the Company’s fiscal year from

June 30

to a calendar year ending

December 31.

As a result, the Company will file a transition report on Form

10

-K for the

six

month period ending

December 31, 2017.

Prior to filing the transition report, the Company will file a quarterly report on Form

10

-Q for the quarter ending

September 30, 2017.

XML

Significant Accounting Policies (Policies)

12 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, but

not

limited to, the allowance for doubtful accounts, slow-moving inventory reserves, depreciation, warranty costs, assumptions made in valuing equity instruments issued for services or acquisitions, deferred income taxes and related valuation allowance and the fair values of intangibles and goodwill. Actual results could materially differ from the estimates and assumptions used in the preparation of the Company’s consolidated financial statements. Events subsequent to the balance sheet date have been evaluated for inclusion in the accompanying consolidated financial statements through the date of issuance.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

Revenues from the sale of the Company’s 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. The Company generally ships 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.

The Company’s sales are generally through distributors. There is

no

right of return provided for distributors. For sales of products made to distributors, the Company considers 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’s history of adhering to the terms of its contractual arrangements with the Company, the level of inventories maintained by the distributor, whether the Company has 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. The Company currently recognizes revenue primarily on the sell-in method with its 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. The Company accounts 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.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of

three

months or less at the time of purchase to be cash equivalents. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company’s cash is maintained in checking accounts, money market funds and certificates of deposits with reputable financial institutions that

may

at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation. The Company has cash and cash equivalents of

$46,000

and

$104,000

at

June 30, 2017

and

2016,

respectively in India. The Company has

not

experienced any realized losses on the Company’s deposits of cash and cash equivalents.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation

The Company’s reporting currency is the US dollar. The functional currency of the Company’s subsidiaries in India is the Indian rupee (INR). Assets and liabilities are translated into US dollars at period end exchange rates. Revenue and expenses are translated at average rates of exchange prevailing during the periods presented. Cash flows are also translated at average exchange rates for the period, therefore, amounts reported on the consolidated statement of cash flows do

not

necessarily agree with changes in the corresponding balances on the consolidated balance sheet. Equity accounts other than retained earnings are translated at the historic exchange rate on the date of investment. A translation loss of

$1,000

and

$32,000

was recorded for the years ended

June 30, 2017

and

2016,

respectively, as a component of other comprehensive income.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill, Intangible Assets and Impairment Assessments

Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Intangible assets that are

not

considered to have an indefinite useful life are amortized over their useful lives, which generally range from

three

to

ten

years. Clinical protocols are

not

expected to provide economic benefit until they are introduced to the marketplace or licensed to an independent entity. Each period the Company evaluates the estimated remaining useful lives of purchased intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization.

For goodwill and indefinite-lived intangible assets (clinical protocols), the carrying amounts are periodically reviewed for impairment (at least annually) and whenever events or changes in circumstances indicate that the carrying value of these assets

may

not

be recoverable. According to Accounting Standard Codification (“

ASC

”)

350,

Intangibles-Goodwill and Other

, the Company can opt to perform a qualitative assessment or a quantitative assessment; however, if the qualitative assessment determines that it is more likely than

not

(i.e., a likelihood of more than

50

percent) the fair value is less than the carrying amount, a quantitative assessment must be performed. If the quantitative assessment determines that the fair value is less than the carrying amount, an impairment loss equal to the difference would be recorded.

The Company performed a quantitative assessment as of

April 1, 2017

and performed a qualitative assessment through

June 30, 2017

and computed a fair value based on a combination of the income approach and market approach, which determined that the fair value exceeded the carrying amount. Accordingly, there was

no

impairment of goodwill or the indefinite-lived intangible assets.

For the definite-lived intangible assets other than the covenants

not

to compete, there were

no

facts or changes in circumstances that indicated the carrying value

may

not

be recoverable. As such,

no

assessment was required and there was

no

impairment of these assets. There was a

$310,000

impairment of the covenants

not

to compete intangible assets during the year ended

June 30, 2017

as the assumed revenues that were in the fair value estimate have been delayed due to the delay in the clinical trial.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

In accordance with ASC

820,

Fair Value Measurements and Disclosures

, fair value is defined as the exit price, or the amount that would be received for the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date.

The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. The guidance establishes

three

levels of inputs that

may

be used to measure fair value:

Level 1:	Quoted market prices in active markets for identical assets or liabilities.
Level 2:	Other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3:	Unobservable inputs reflecting the reporting entity’s own assumptions.

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short duration. The fair value of the Company’s derivative obligation liability is classified as Level

3

within the fair value hierarchy since the valuation model of the derivative obligation is based on unobservable inputs.

Receivables, Policy [Policy Text Block]

Accounts Receivable and Allowance for Doubtful Accounts

The Company’s receivables are recorded when billed and represent claims against

third

parties that will be settled in cash. The carrying value of the Company’s receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. The Company estimates the allowance for doubtful accounts based on historical collection trends, age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that a specific receivable balance

may

be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. A customer’s receivable balance is considered past-due based on its contractual terms. Past-due receivable balances are written-off when the Company’s internal collection efforts have been unsuccessful in collecting the amount due.

Inventory, Policy [Policy Text Block]

Inventories

Inventories are stated at the lower of cost or market and include the cost of material, labor and manufacturing overhead. Cost is determined on the

first

-in,

first

-out basis. The Company writes-down inventory to its estimated net realizable value when conditions indicate that the selling price could be less than cost due to physical deterioration, obsolescence, changes in price levels, or other causes, which it includes as a component of cost of revenues. Additionally, the Company provides valuation allowances for excess and slow-moving inventory on hand that are

not

expected to be sold to reduce the carrying amount of slow-moving inventory to its estimated net realizable value. The valuation allowances are based upon estimates about future demand from its customers and distributors and market conditions. Because some of the Company’s products are highly dependent on government and

third

-party funding, current customer use and validation, and completion of regulatory and field trials, there is a risk that the Company will forecast incorrectly and purchase or produce excess inventories.

As a result, actual demand

may

differ from forecasts and the Company

may

be required to record additional inventory valuation allowances that could adversely impact its gross margins. Conversely, favorable changes in demand could result in higher gross margins when those products are sold.

Property, Plant and Equipment, Policy [Policy Text Block]

Equipment, Net

Equipment consisting of office furniture, computer, machinery and equipment is recorded at cost less accumulated depreciation and amortization. Repairs and maintenance costs are expensed as incurred. Depreciation for office furniture, computer, machinery and equipment is computed under the straight-line method over the estimated useful lives. Leasehold improvements are amortized under the straight line method over their estimated useful lives or the remaining lease period, whichever is shorter. When equipment is sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and the impact of any resulting gain or loss is recognized within Other income and (expenses) in the consolidated statement of operations for the period.

Standard Product Warranty, Policy [Policy Text Block]

Warranty

The Company provides for the estimated cost of product warranties at the time revenue is recognized. The Company’s warranty obligation is calculated based on estimated product failure rates, material usage and estimated service delivery costs incurred in correcting a product failure.

Debt, Policy [Policy Text Block]

Debt Issue Costs

The Company amortizes debt issue costs to interest expense over the life of the associated debt instrument, using the straight-line method which approximates the interest rate method.

Debt

Discount

The Company amortizes debt discount over the life of the associated debt instrument, using the straight-line method which approximates the interest rate method. Such amortized cost is included with the other income (expense) in the accompanying consolidated statements of operations.

Derivatives, Policy [Policy Text Block]

Derivative Financial Instruments

In connection with the sale of convertible debt and equity instruments, the Company

may

also issue freestanding warrants. If freestanding warrants are issued and accounted for as derivative instrument liabilities (rather than as equity), the proceeds are

first

allocated to the fair value of those instruments. The remaining proceeds, if any, are then allocated to the convertible instrument, usually resulting in that instrument being recorded at a discount from its face amount. Derivative financial instruments are initially measured at their fair value using a Binomial Lattice Valuation Model and then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation

The Company has

three

stock-based compensation plans, which are described more fully in Note

9.

Valuation and Amortization Method – The Company estimates 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. The formula does

not

include a discount for post-vesting restrictions, as we have

not

issued awards with such restrictions.   

Expected Term – For options which the Company has limited available data, the expected term of the option is based on the simplified method. This simplified method averages an award’s vesting term and its contractual term. For all other options, the Company's expected term represents the period that the Company's stock-based awards are expected to be outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior.

Expected Volatility – Expected volatility is based on historical volatility. Historical volatility is computed using daily pricing observations for recent periods that corresponded to the expected term of the options.

Expected Dividend – The Company has

not

declared dividends and does

not

anticipate declaring any dividends in the foreseeable future. Therefore, the Company uses a

zero

value for the expected dividend value factor to determine the fair value of options granted.

Risk-Free Interest Rate – The Company bases the risk-free interest rate used in the valuation method on the implied yield currently available on U.S. Treasury

zero

-coupon issues with the same expected term.

Estimated Forfeitures – When estimating forfeitures, the Company considers voluntary and involuntary termination behavior as well as analysis of actual option forfeitures.

Research and Development Expense, Policy [Policy Text Block]

Research and Development

Research and development costs, consisting of salaries and benefits, costs of clinical trials, costs of disposables, facility costs, contracted services and stock-based compensation from the engineering, regulatory, scientific and clinical affairs departments, that are useful in developing and clinically testing new products, services, processes or techniques, as well as expenses for activities that

may

significantly improve existing products or processes are expensed as incurred. Costs to acquire technologies that are utilized in research and development and that have

no

future benefit are expensed when incurred.

Business Combinations Policy [Policy Text Block]

A

cquired 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, the Company 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. The Company conducted the fiscal

2017

annual impairment assessment as of

April 1, 2017.

As the fair value exceeded book value, the Company concluded there was

no

impairment of the subject clinical protocol.

Legal Costs, Policy [Policy Text Block]

Patent Costs

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

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Credit Risk

Currently, the Company primarily manufactures and sells cellular processing systems and thermodynamic devices principally to the blood and cellular component processing industry and performs ongoing evaluations of the credit worthiness of the Company’s customers. The Company believes that adequate

provisions for uncollectible accounts have been made in the accompanying consolidated financial statements. To date, the Company has

not

experienced significant credit related losses.

Segment Reporting, Policy [Policy Text Block]

Segment Reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision making group, whose function is to allocate resources to and assess the performance of the operating segments. The Company has identified its chief executive officer and chief operating officer as the CODM. In determining its reportable segments, the Company considered the markets and the products or services provided to those markets.

The Company has

two

reportable business segments:

The Clinical Development Division is devel

op

ing autologous (utilizing the patient’s own cells) stem cell-based

therapeutics

that address significant unmet medical needs for applications within the

vascular, cardiology and orthopedic

markets.   

The Device Division

is a pioneer and market leader in the development and commercialization of

automated technologies for c

ell-based t

herapeutics

and bio-processing.

Income Tax, Policy [Policy Text Block]

Income Taxes

The tax years

1999

-

2015

remain open to examination by the major taxing jurisdictions to which the Company is subject; however, there is

no

current examination. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense. To date, there have been

no

interest or penalties charged to the Company in relation to the underpayment of income taxes. There were

no

unrecognized tax benefits during the periods presented.

The Company’s estimates of income taxes and the significant items resulting in the recognition of deferred tax assets and liabilities reflect the Company’s assessment of future tax consequences of transactions that have been reflected in the financial statements or tax returns for each taxing jurisdiction in which the Company operates.  The Company bases the provision for income taxes on the Company’s current period results of operations, changes in deferred income tax assets and liabilities, income tax rates, and changes in estimates of uncertain tax positions in the jurisdictions in which the Company operates.  The Company recognizes deferred tax assets and liabilities when there are temporary differences between the financial reporting basis and tax basis of assets and liabilities and for the expected benefits of using net operating loss and tax credit loss carryforwards.  The Company establishes valuation allowances when necessary to reduce the carrying amount of deferred income tax assets to the amounts that the Company believes are more likely than

not

to be realized. The Company evaluates the need to retain all or a portion of the valuation allowance on recorded deferred tax assets.  When a change in the tax rate or tax law has an impact on deferred taxes, the Company applies the change based on the years in which the temporary

differences are expected to reverse.  As the Company operates in more than

one

state, changes in the state apportionment factors, based on operational results,

may

affect future effective tax rates and the value of recorded deferred tax assets and liabilities.  The Company records a change in tax rates in the consolidated financial statements in the period of enactment.

Income tax consequences that arise in connection with a business combination include identifying the tax basis of assets and liabilities acquired and any contingencies associated with uncertain tax positions assumed or resulting from the business combination.  Deferred tax assets and liabilities related to temporary differences of an acquired entity are recorded as of the date of the business combination and are based on the Company’s estimate of the appropriate tax basis that will be accepted by the various taxing authorities and its determination as to whether any of the acquired deferred tax liabilities could be a source of taxable income to realize the Company’s pre-existing deferred tax assets.

Earnings Per Share, Policy [Policy Text Block]

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 the Company’s net loss position for all periods presented. Anti-dilutive securities consisted of the following at

June 30:

	2017			2016
Common stock equivalents of convertible debentures		--			3,676,471
Vested Series A warrants		404,412			404,412
Unvested Series A warrants		698,529	(1)		698,529	(1)
Warrants – other		3,725,782			3,725,782
Stock options		397,388			104,378
Restricted stock units		59,694			63,566
Total		5,285,805			8,673,138

( 1 ) The unvested Series A warrants were subject to vesting based upon the amount of funds actually received by the Company in the second close of the August 2015 financing which never occurred. The warrants will remain outstanding but unvested until they expire in February 2021.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting

Standards

In

June 2014,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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

”. The amendments in ASU

2014

-

12

apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition that affects the vesting of the award. The Company adopted ASU

2014

-

12

effective

July 1, 2016.

The Company applies the amendments in ASU

2014

-

12

prospectively to all awards granted or modified after the effective date. Adoption of the new update to ASU

2014

-

12

did

not

have any impact on the financial statements of the Company.

Recently Issued Accounting

Standards

In

July 2017,

the FASB issued ASU

No.

2017

-

11,

“

Earnings Per Share (Topic

260

); Distinguishing Liabilities from Equity (Topic

480

); Derivatives and Hedging (Topic

815

):  (Part I) Accounting for Certain Financial Instruments with Down Round Features; (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception

”.  ASU

2017

-

11

allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity's own stock.  As a result, financial instruments (or embedded conversion features) with down round features

may

no

longer be required to be accounted for as derivative liabilities.  A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward.  For equity-classified freestanding financial instruments, an entity will treat the value of the effect of the down round as a dividend and a reduction of income available to common shareholders in computing basic earnings per share.  For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings.  ASU

2017

-

11

is effective for fiscal years beginning after

December 15, 2018,

and interim periods within those fiscal years.  Early adoption is permitted.  The guidance in ASU

2017

-

11

can be applied using a full or modified retrospective approach.  The Company has

not

yet determined the effect that ASU

2017

-

11

will have on its results of operations, statement of financial position or financial statement disclosures.

In

May 2017,

the FASB issued ASU

No.

2017

-

09

“Compensation-Stock Compensation (Topic

718

) Scope of Modification Accounting (ASU

2017

-

09

).” ASU

2017

-

09

clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic

718.

The standard is effective for interim and annual reporting periods beginning after

December 15, 2017,

with early adoption permitted. The Company is currently evaluating the impact of its adoption of this standard on its financial statements.

In

January 2017,

the FASB issued ASU

2017

-

04

which removes Step

2

from the goodwill impairment test. It is effective for annual and interim periods beginning after

December 15, 2019.

Early adoption is permitted for an interim or annual goodwill impairment test performed with a measurement date after

January 1, 2017.

The Company has

not

yet determined the effect that ASU

2017

-

04

will have on its results of operations, statement of financial position or financial statement disclosures.  

In

March 2016,

the FASB issued ASU

2016

-

09,

“

Compensation - Stock Compensation (Topic

718

): Improvements to Employee Share-Based Payment Accounting”.

ASU

2016

-

09

simplifies several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. ASU

2016

-

09

is effective for annual periods beginning after

December 15, 2016

and interim periods within those annual periods. Early adoption is permitted. The Company has

not

yet determined the effect that ASU

2016

-

09

will have on its results of operations, statement of financial position or financial statement disclosures.

In

March 2016,

the FASB issued ASU

No.

2016

-

06,

“

Derivatives and Hedging (Topic

815

): Contingent Put and Call Options in Debt Instruments

” (“ASU

2016

-

06”

). This new standard simplifies the embedded derivative analysis for debt instruments containing contingent call or put options by removing the requirement to assess whether a contingent event is related to interest rates or credit risks. ASU

2016

-

06

is effective for annual periods beginning after

December 15, 2017,

and interim periods within fiscal years beginning after

December 15, 2018.

The adoption of this standard is

not

expected to have an impact on the Company’s financial position or results of operations.

In

February 2016,

the FASB issued ASU

2016

-

02,

“Leases (Topic

842

)”

. ASU

2016

-

02

requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. ASU

2016

-

02

is effective for fiscal years beginning after

December 15, 2018

and interim periods therein. The Company has

not

yet determined the effect that ASU

2016

-

02

will have on its results of operations, statement of financial position or financial statement disclosures.

In

July 2015,

the FASB issued ASU

No.

2015

-

11,

“

Inventory: Simplifying the Measurement of Inventory

”, that requires inventory

not

measured using either the last in,

first

out (LIFO) or the retail inventory method to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. The new standard will be effective for fiscal years beginning after

December 15, 2016,

including interim periods within those fiscal years, and will be applied prospectively. Early adoption is permitted. The Company is evaluating the impact that this standard will have on its consolidated financial statements.

In

May 2014,

the FASB issued ASU

2014

-

09,

“

Revenue from Contracts with Customers (Topic

606

)

” (“ASU

2014

-

09”

). ASU

2014

-

09

supersedes the revenue recognition requirements in ASC Topic

605,

“Revenue Recognition” and some cost guidance included in ASC Subtopic

605

-

35,

"

Revenue Recognition

- Construction-Type and Production-Type Contracts

.” The core principle of ASU

2014

-

09

is that revenue is recognized when the transfer of goods or services to customers occurs in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. ASU

2014

-

09

requires the disclosure of sufficient information to enable readers of the Company’s financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU

2014

-

09

also requires disclosure of information regarding significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU

2014

-

09

provides

two

methods of retrospective application. The

first

method would require the Company to apply ASU

2014

-

09

to each prior reporting period presented. The

second

method would require the Company to retrospectively apply ASU

2014

-

09

with the cumulative effect recognized at the date of initial application. ASU

2014

-

09

will be effective for the Company beginning in fiscal

2019

as a result of ASU

2015

-

14,

"

Revenue from Contracts with Customers (Topic

606

): Deferral of the Effective Date

," which was issued by the FASB in

August 2015

and extended the original effective date by

one

year. The Company is currently evaluating the impact of adopting the available methodologies of ASU

2014

-

09

and

2015

-

14

upon its financial statements in future reporting periods. The Company has

not

yet selected a transition method. The Company is also in the process of evaluating the new standard against its existing accounting policies, including the timing of revenue recognition, and its contracts with customers to determine the effect the guidance will have on its financial statements and what changes to systems and controls

may

be warranted.

There have been

four

new ASUs issued amending certain aspects of ASU

2014

-

09,

ASU

2016

-

08,

"

Principal versus Agent Considerations (Reporting Revenue Gross Versus Net)

" was issued in

March 2016

to clarify certain aspects of the principal versus agent guidance in ASU

2014

-

09.

In addition, ASU

2016

-

10,

"

Identifying Performance Obligations and Licensing

," issued in

April 2016,

amends other sections of ASU

2014

-

09

including clarifying guidance related to identifying performance obligations and licensing implementation. ASU

2016

-

12,

"

Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients

" provides amendments and practical expedients to the guidance in ASU

2014

-

09

in the areas of assessing collectability, presentation of sales taxes received from customers, noncash consideration, contract modification and clarification of using the full retrospective

approach to adopt ASU

2014

-

09.

Finally, ASU

2016

-

20,

“

Technical Corrections and Improvements to Topic

606,

Revenue from Contracts with Customers

” was issued in

December 2016,

and provides elections regarding the disclosures required for remaining performance obligations in certain cases and also makes other technical corrections and improvements to the standard. With its evaluation of the impact of ASU

2014

-

09,

the Company will also consider the impact on its financial statements related to the updated guidance provided by these

four

new ASUs.

XML

Note 2 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	2017			2016
Common stock equivalents of convertible debentures		--			3,676,471
Vested Series A warrants		404,412			404,412
Unvested Series A warrants		698,529	(1)		698,529	(1)
Warrants – other		3,725,782			3,725,782
Stock options		397,388			104,378
Restricted stock units		59,694			63,566
Total		5,285,805			8,673,138

XML

Note 3 - Intangible Assets (Tables)

12 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Finite-Lived Intangible Assets [Table Text Block]

As of June 30, 2017
	Weighted Average Amortization Period (in Years)		Gross Carrying Amount		Accumulate d Amortization		Impairment		Net
Trade names		7	$	30,000	$	14,000			$	16,000
Licenses		7		482,000		233,000				249,000
Customer relationships		3		443,000		443,000				--
Device registration		7		90,000		60,000				30,000
Covenants not to compete		5		955,000		645,000	$	310,000		--
Amortizable intangible assets				2,000,000		1,395,000		310,000		295,000
Clinical protocols				19,870,000		--				19,870,000
Total			$	21,870,000	$	1,395,000	$	310,000	$	20,165,000

As of June 30, 2016
	Weighted Average Amortization Period (in Years)		Gross Carrying Amount		Accumulated Amortization		Net
Trade names		7	$	29,000	$	10,000	$	19,000
Licenses		7		462,000		157,000		305,000
Customer relationships		3		424,000		335,000		89,000
Device registration		7		86,000		49,000		37,000
Covenants not to compete		5		955,000		454,000		501,000
Amortizable intangible assets				1,956,000		1,005,000		951,000
Clinical protocols				19,870,000		--		19,870,000
Total			$	21,826,000	$	1,005,000	$	20,821,000

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Year Ended June 30,
2018	$	81,000
2019		81,000
2020		81,000
2021		52,000
Total	$	295,000

XML

Note 4 - Equipment (Tables)

12 Months Ended

Jun. 30, 2017

Notes Tables

Property, Plant and Equipment [Table Text Block]

	2017			2016			Estimated Useful Life (years)
Machinery and equipment	$	5,772,000		$	6,604,000			2.5	-	10
Computer and software		733,000			397,000			2	-	5
Office equipment		427,000			260,000			5	-	10
Leasehold improvements		227,000			149,000			Shorter of 5 years or remaining lease term
Total equipment		7,159,000			7,410,000
Less accumulated depreciation and amortization		(4,829,000	)		(4,448,000	)
Total equipment, net	$	2,330,000		$	2,962,000

XML

Note 6 - Convertible Debentures (Tables)

12 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Extinguishment of Debt [Table Text Block]

Payment	$	7,500,000
Repayment of Thirty-Year debentures		(5,500,000	)
Payment of accrued liquidated damages and interest		(897,000	)
Loss on modification of Series A warrants		(149,000	)
Cancellation of Series B derivative obligation		(159,000	)
Loss on extinguishment of debt	$	795,000

XML

Note 7 - Derivative Obligations (Tables)

12 Months Ended

Jun. 30, 2017

Notes Tables

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]

	Series A
	June 30, 2017			June 30, 2016
Market price of common stock	$	3.17		$	2.93
Expected volatility		110	%		99	%
Contractual term (years)		3.7			4.7
Discount rate		1.66	%		1.01	%
Dividend rate		0	%		0	%
Exercise price	$	8.00		$	8.00

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

	Balance at June 30, 2017		Level 1		Level 2		Level 3
Derivative obligation	$	730,000	$	-	$	-	$	730,000

	Balance at June 30, 2016		Level 1		Level 2		Level 3
Derivative obligation	$	670,000	$	-	$	-	$	670,000

Derivative Instruments, Gain (Loss) [Table Text Block]

	Amount
Balance – July 1, 2016	$	670,000
Change in fair value of derivative obligation		60,000
Balance – June 30, 2017	$	730,000

XML

Note 8 - Commitments and Contingencies (Tables)

12 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

2018		297,000
2019		279,000
2020		3,000
Total	$	579,000

Schedule of Product Warranty Liability [Table Text Block]

	For years ended June 30,
	2017			2016
Beginning balance	$	566,000		$	627,000
Warranties issued during the period		120,000			97,000
Settlements made during the period		(93,000	)		(287,000	)
Changes in liability for pre-existing warranties during the period		(5,000	)		129,000
Ending balance	$	588,000		$	566,000

XML

Note 9 - Stockholders' Equity (Tables)

12 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

	2017				2016
	Number of Shares		Weighted- Average Exercise Price Per Share		Number of Shares			Weighted - Average Exercise Price Per Share
Beginning balance		4,828,723	$	9.37		252,620		$	44.18
Warrants granted		--				5,238,971		$	9.83
Warrants exercised (cashless)		--				(51,712	)	$	13.60
Warrants expired/canceled		--				(611,156	)	$	17.21
Outstanding at June 30		4,828,723	$	9.37		4,828,723		$	9.37
Exercisable at June 30		4,130,192	$	9.60		600,782		$	19.02

Share-based Compensation, Stock Options, Activity [Table Text Block]

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at June 30, 2016		104,378		$	14.85
Granted		318,324		$	2.98
Forfeited/cancelled		(22,814	)	$	6.39
Expired		(2,500	)	$	18.46
Exercised		--			--
Outstanding at June 30, 2017		397,388		$	5.80		6.2	$	69,000
Vested and Expected to Vest at June 30, 2017		376,595		$	5.94		6.2	$	64,000
Exercisable at June 30, 2017		242,073		$	7.38		5.5	$	43,000

Non Vested Stock Options Activity [Table Text Block]

	Non-vested Stock Options			Weighted-Average Grant Date Fair Value
Outstanding at June 30, 2016		43,107		$	7.46
Granted		318,325		$	2.16
Vested		(185,019	)	$	3.07
Forfeited		(21,097	)	$	3.31
Outstanding at June 30, 2017		155,316		$	2.39

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	2017			2016
Expected life (years)		4			5
Risk-free interest rate		1.3	%		1.5	%
Expected volatility		102	%		80	%
Dividend yield		0	%		0	%

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

	2017					2016
	Number of Shares			Weighted- Average Grant Date Fair Value		Number o f Shares			Weighted- Average Grant Date Fair Value
Balance at June 30		63,566		$	14.96		72,589		$	22.40
Granted		123,417		$	4.55		10,000		$	2.98
Vested		(125,513	)	$	9.47		(6,120	)	$	28.94
Forfeited		(1,776	)	$	27.05		(12,903	)	$	41.15
Outstanding at June 30		59,694		$	4.62		63,566		$	14.96

XML

Note 10 - Concentrations (Tables)

12 Months Ended

Jun. 30, 2017

Notes Tables

Schedules of Concentration of Risk, by Risk Factor [Table Text Block]

	2017		2016
AXP	$	8,715,000	$	6,932,000
BioArchive		3,318,000		2,465,000
Manual Disposables		1,195,000		1,507,000
Bone Marrow		745,000		459,000
Other		552,000		566,000
	$	14,525,000	$	11,929,000

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

	2017		2016
United States	$	6,675,000	$	5,122,000
China		3,296,000		2,797,000
Asia – other		1,951,000		1,955,000
Europe		1,739,000		1,343,000
Other		864,000		712,000
	$	14,525,000	$	11,929,000

Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block]

	June 30, 2017		June 30, 2016
United States	$	1,559,000	$	2,030,000
Costa Rica		322,000		367,000
India		261,000		279,000
All other countries		188,000		286,000
Total equipment, net	$	2,330,000	$	2,962,000

XML

Note 11 - Segment Reporting (Tables)

12 Months Ended

Jun. 30, 2017

Notes Tables

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

	Year Ended June 30, 2017
	Clinical Development			Device			Total
Net revenues	$	492,000		$	14,033,000		$	14,525,000
Cost of revenues		466,000			8,220,000			8,686,000
Gross profit		26,000			5,813,000			5,839,000
Operating expenses		8,966,000			6,113,000			15,079,000
Operating profit (loss)	$	(8,940,000	)	$	(300,000	)	$	(9,240,000	)
Depreciation and amortization	$	501,000		$	329,000		$	830,000
Stock-based compensation expense	$	970,000		$	491,000		$	1,461,000

	Year Ended June 30, 2016
	Clinical Development			Device			Total
Net revenues	$	646,000		$	11,283,000		$	11,929,000
Cost of revenues		574,000			8,611,000			9,185,000
Gross profit		72,000			2,672,000			2,744,000
Operating expenses		8,312,000			5,297,000			13,609,000
Operating profit (loss)	$	(8,240,000	)	$	(2,625,000	)	$	(10,865,000	)
Depreciation and amortization	$	644,000		$	524,000		$	1,168,000
Stock-based compensation expense	$	548,000		$	194,000		$	742,000

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Note 12 - Income Taxes (Tables)

12 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	2017			2016
Statutory federal income tax benefit	$	(10,121,000	)	$	(6,300,000	)
Unbenefited net operating losses and credits		2,281,000			3,391,000
Disallowed financing costs		6,959,000			2,607,000
State and local taxes		88,000			69,000
Other		120,000			233,000
Total income tax benefit	$	(673,000	)	$	--

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	June 30, 2017			June 30, 2016
Deferred tax assets:
Net operating loss carryforwards	$	43,687,000		$	41,023,000
Income tax credit carryforwards		2,419,000			2,367,000
Stock compensation		1,047,000			874,000
Other		1,124,000			1,858,000
Total deferred tax assets		48,277,000			46,122,000
Deferred tax liabilities
Indefinite lived intangible assets		(6,968,000	)		(7,641,000	)
Depreciation and amortization		(176,000	)		(230,000	)
Total deferred tax liabilities		(7,144,000	)		(7,871,000	)
Valuation allowance		(48,101,000	)		(45,892,000	)
Net deferred taxes	$	(6,968,000	)	$	(7,641,000	)

XML

Note 1 - Description of Business and Basis of Presentation (Details Textual)					3 Months Ended	12 Months Ended
	Jul. 07, 2017 USD ($)	Aug. 22, 2016 USD ($) shares	Aug. 03, 2016 USD ($) $ / shares shares	Mar. 04, 2016 shares	Sep. 20, 2017 USD ($)	Jun. 30, 2017 USD ($) shares	Jun. 30, 2016 USD ($) shares	Sep. 13, 2017 USD ($)	Mar. 06, 2017 USD ($)	Jun. 30, 2015 USD ($)
Common Stock, Shares Authorized | shares				350,000,000		350,000,000	350,000,000
Debt Conversion, Original Debt, Amount		$ 23,903,000
Debt Conversion, Converted Instrument, Shares Issued | shares		6,102,941
Stock Issued During Period, Shares, New Issues | shares			600,000
Shares Issued, Price Per Share | $ / shares			$ 4.10
Proceeds from Issuance of Common Stock			$ 2,092,000			$ 2,092,000	$ 2,463,000
Cash and Cash Equivalents, at Carrying Value						3,623,000	5,835,000			$ 3,357,000
Working Capital						6,658,000
Retained Earnings (Accumulated Deficit)						(185,357,000)	$ (156,262,000)
Boyalife Investment Fund II, Inc. [Member] | Revolving Credit Facility [Member]
Long-term Line of Credit						$ 3,500,000
Line of Credit Facility, Maximum Borrowing Capacity									$ 5,000,000
Subsequent Event [Member] | Boyalife Investment Fund II, Inc. [Member] | Revolving Credit Facility [Member]
Proceeds from Lines of Credit					$ 1,500,000
Line of Credit Facility, Maximum Borrowing Capacity								$ 10,000,000
ThermoGenesis [Member] | SynGen [Member] | Subsequent Event [Member]
Percentage Of Common Stock Issued To Acquiree Shareholders	20.00%
Payments to Acquire Businesses, Gross	$ 1,000,000
Reverse Stock Split [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio				20

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Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2015
Maximum Period Of Agreement	21 years
Cash and Cash Equivalents, at Carrying Value	$ 3,623,000	$ 5,835,000	$ 3,357,000
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	1,000	$ 32,000
Finite-Lived Intangible Asset, Useful Life
Goodwill, Impairment Loss	0
Income Tax Examination, Penalties and Interest Accrued	0
Unrecognized Tax Benefits	$ 0	$ 0
Latest Tax Year [Member]
Open Tax Year	2015
Noncompete Agreements [Member]
Finite-Lived Intangible Asset, Useful Life	5 years	5 years
Impairment of Intangible Assets, Finite-lived	$ 310,000
Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	3 years
Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	10 years
INDIA
Cash and Cash Equivalents, at Carrying Value	$ 46,000	$ 104,000

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Note 2 - Summary of Significant Accounting Policies - Calculation for Basic and Diluted Earnings Per Share (Details) - shares		12 Months Ended
		Jun. 30, 2017	Jun. 30, 2016
Anti-dilutive securities (in shares)		5,285,805	8,673,138
Convertible Debt Securities [Member]
Anti-dilutive securities (in shares)			3,676,471
Vested Series A Warrants [Member]
Anti-dilutive securities (in shares)		404,412	404,412
Unvested Series A Warrants [Member]
Anti-dilutive securities (in shares)	[1]	698,529	698,529
Warrant, Other [Member]
Anti-dilutive securities (in shares)		3,725,782	3,725,782
Employee Stock Option [Member]
Anti-dilutive securities (in shares)		397,388	104,378
Restricted Stock Units (RSUs) [Member]
Anti-dilutive securities (in shares)		59,694	63,566

[1] The unvested Series A warrants were subject to vesting based upon the amount of funds actually received by the Company in the second close of the August 2015 financing which never occurred. The warrants will remain outstanding but unvested until they expire in February 2021.

XML

Note 3 - Intangible Assets (Details Textual) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Impairment of Intangible Assets (Excluding Goodwill)	$ 310,000
Amortization of Intangible Assets	359,000	$ 438,000
Noncompete Agreements [Member]
Impairment of Intangible Assets (Excluding Goodwill)	$ 310,000

XML

Note 3 - Intangible Assets - Summary of Intangible Assets (Details) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Net	$ 20,165,000	$ 20,821,000
Finite-Lived Intangible Asset, Useful Life
Gross Carrying Amount	21,870,000	$ 21,826,000
Accumulated Amortization	1,395,000	1,005,000
Impairment of intangible asset	310,000
Net	295,000	951,000
Gross Carrying Amount	$ 2,000,000	$ 1,956,000
Trade Names [Member]
Finite-Lived Intangible Asset, Useful Life	7 years	7 years
Accumulated Amortization	$ 14,000	$ 10,000
Impairment of intangible asset
Net	16,000	19,000
Gross Carrying Amount	$ 30,000	$ 29,000
Licensing Agreements [Member]
Finite-Lived Intangible Asset, Useful Life	7 years	7 years
Accumulated Amortization	$ 233,000	$ 157,000
Impairment of intangible asset
Net	249,000	305,000
Gross Carrying Amount	$ 482,000	$ 462,000
Customer Relationships [Member]
Finite-Lived Intangible Asset, Useful Life	3 years	3 years
Accumulated Amortization	$ 443,000	$ 335,000
Impairment of intangible asset
Net		89,000
Gross Carrying Amount	$ 443,000	$ 424,000
Device Registration [Member]
Finite-Lived Intangible Asset, Useful Life	7 years	7 years
Accumulated Amortization	$ 60,000	$ 49,000
Impairment of intangible asset
Net	30,000	37,000
Gross Carrying Amount	$ 90,000	$ 86,000
Noncompete Agreements [Member]
Finite-Lived Intangible Asset, Useful Life	5 years	5 years
Accumulated Amortization	$ 645,000	$ 454,000
Impairment of intangible asset	310,000
Net		501,000
Gross Carrying Amount	955,000	$ 955,000
Clinical Protocols [Member]
Finite-Lived Intangible Asset, Useful Life
Accumulated Amortization
Impairment of intangible asset
Net	19,870,000	19,870,000
Gross Carrying Amount	$ 19,870,000	$ 19,870,000

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Note 3 - Intangible Assets - Future Amortization Expense (Details) - USD ($)	Jun. 30, 2017	Jun. 30, 2016
2018	$ 81,000
2019	81,000
2020	81,000
2021	52,000
Total	$ 295,000	$ 951,000

XML

Note 4 - Equipment (Details Textual) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Depreciation	$ 408,000	$ 630,000

XML

Note 4 - Equipment - Summary of Property, Plant, and Equipment (Details) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Property, Plant, and Equipment, Gross	$ 7,159,000	$ 7,410,000
Less accumulated depreciation and amortization	(4,829,000)	(4,448,000)
Property, Plant, and Equipment, Net	2,330,000	2,962,000
Machinery and Equipment [Member]
Property, Plant, and Equipment, Gross	$ 5,772,000	6,604,000
Machinery and Equipment [Member] | Minimum [Member]
Estimated Useful Life (Year)	2 years 182 days
Machinery and Equipment [Member] | Maximum [Member]
Estimated Useful Life (Year)	10 years
Computer and Software [Member]
Property, Plant, and Equipment, Gross	$ 733,000	397,000
Computer and Software [Member] | Minimum [Member]
Estimated Useful Life (Year)	2 years
Computer and Software [Member] | Maximum [Member]
Estimated Useful Life (Year)	5 years
Office Equipment [Member]
Property, Plant, and Equipment, Gross	$ 427,000	260,000
Office Equipment [Member] | Minimum [Member]
Estimated Useful Life (Year)	5 years
Office Equipment [Member] | Maximum [Member]
Estimated Useful Life (Year)	10 years
Leasehold Improvements [Member]
Leasehold Improvements, Estimated Useful Life	Shorter of 5 years or remaining lease term
Property, Plant, and Equipment, Gross	$ 227,000	$ 149,000

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Note 5 - Related Party Transactions (Details Textual) - USD ($)			3 Months Ended		12 Months Ended
	Aug. 21, 2017	Mar. 06, 2017	Sep. 30, 2017	Jun. 30, 2017	Jun. 30, 2017	Jun. 30, 2016	Sep. 13, 2017
Interest Expense					$ 10,668,000	$ 1,864,000
Boyalife Group Ltd. [Member]
Due to Related Parties				$ 606,000	606,000
Revenue from Related Parties					308,000
Accounts Receivable, Related Parties				308,000	308,000
Boyalife Investment Fund II, Inc. [Member] | Subsequent Event [Member] | Convertible Promissory Note [Member]
Debt Instrument, Face Amount							$ 10,000,000
Boyalife Investment Fund II, Inc. [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Amount of Unsecured Debt Per Advance		$ 500,000
Proceeds from Long-term Lines of Credit		$ 1,500,000		$ 2,000,000
Debt Instrument, Interest Rate, Stated Percentage		22.00%
Debt Instrument, Convertible, Percentage of Conversion Price		90.00%
Debt Instrument, Number of Trading Days Prior to the Maturity Date		10 days
Debt Instrument, Maximum Number of Shares Issued Upon Conversion, Percent		19.99%
Interest Expense					$ 122,000
Line of Credit Facility, Maximum Borrowing Capacity		$ 5,000,000
Boyalife Investment Fund II, Inc. [Member] | Revolving Credit Facility [Member] | Subsequent Event [Member]
Line of Credit Facility, Maximum Borrowing Capacity							$ 10,000,000
Boyalife Investment Fund II, Inc. [Member] | Revolving Credit Facility [Member] | Scenario, Forecast [Member]
Proceeds from Long-term Lines of Credit			$ 1,500,000
Boyalife W.S.N. [Member] | Subsequent Event [Member]
Distributor Agreement Term	3 years
Distributor Agreement, Renewal Term	2 years

XML

Note 6 - Convertible Debentures (Details Textual) - USD ($)						1 Months Ended	3 Months Ended	12 Months Ended
	Aug. 22, 2016	Aug. 03, 2016	Feb. 29, 2016	Feb. 16, 2016	Aug. 31, 2015	Feb. 29, 2016	Dec. 31, 2015	Jun. 30, 2017	Jun. 30, 2016
Gain (Loss) on Extinguishment of Debt									$ (795,000)
Debt Conversion, Converted Instrument, Shares Issued	6,102,941
Amortization of Debt Discount (Premium)								9,851,000	6,127,000
Amortization of Debt Issuance Costs								160,000	800,000
Stock Issued During Period, Shares, New Issues		600,000
Stock Issued During Period, Value, New Issues								2,092,000	2,464,000
Approval for Grant in Amount for Clinical Trial					$ 10,000,000
Proceeds from Convertible Debt									18,000,000
Registration Payment Arrangement, Gains and Losses									(1,100,000)
Derivative, Gain (Loss) on Derivative, Net								$ (60,000)	$ 3,395,000
Warrants Issued in Connection with Convertible Debentures [Member]
Warrant Expiration Period						5 years
Number of Warrants, Percentage of Shares Issued or to Be Issued						80.00%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			3,529,412			3,529,412
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 8			$ 8
Series B Warrant [Member]
Warrant Expiration Period					18 years
Class of Warrant or Right, Cancelled During Period,Value				$ 159,000
Class of Warrant or Right, Outstanding					222,427
Class of Warrant or Right, Number of Securities Called by Warrants or Rights					606,618
Class of Warrant or Right, Exercise Price of Warrants or Rights					$ 13.60
Shares Issued for Cashless Exercise of Warrants				125,000
Series A Warrant [Member]
Class of Warrant or Right, Outstanding					404,412				404,412
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 8			$ 8
Fair Value Assumptions, Expected Volatility Rate			91.00%
Fair Value Inputs, Discount Rate			1.20%
Fair Value Assumptions, Expected Term			5 years
Fair Value Assumptions, Expected Dividend Rate			0.00%
Series A Warrant [Member] | Other Expense [Member]
Derivative, Gain (Loss) on Derivative, Net									$ (149,000)
Common Stock [Member]
Stock Issued During Period, Shares, New Issues								600,000	735,294
Stock Issued During Period, Value, New Issues								$ 1,000	$ 1,000
Boyalife Investment Inc. [Member]
Stock Issued During Period, Shares, New Issues						735,294
Sale of Stock, Price Per Share			$ 3.40			$ 3.40
Stock Issued During Period, Value, New Issues						$ 2,500,000
Debt Instrument, Face Amount			$ 12,500,000			$ 12,500,000
Convertible Debt [Member] | Boyalife Investment Inc. [Member]
Debt Conversion, Original Debt Principal, Amount	$ 12,500,000
Debt Conversion, Original Debt Interest, Amount	8,250,000
Additional Interest Expense, Debt	3,153,000
Amortization of Debt Discount (Premium)	9,538,000
Amortization of Debt Issuance Costs	155,000
Convertible Debt [Member] | Boyalife Investment Inc. [Member] | Common Stock [Member]
Debt Conversion, Original Debt Interest, Amount	$ 8,250,000
Debt Conversion, Converted Instrument, Shares Issued	6,102,941
Debt Conversion, Convertible Shares			3,676,471			3,676,471
Convertible Debt [Member] | Boyalife Investment Inc. [Member] | Common Stock [Member] | Conversion of Interest [Member]
Debt Conversion, Converted Instrument, Shares Issued	2,426,470
Debt Conversion, Converted Instrument, Amount	$ 11,403,000
Convertible Debt [Member] | Boyalife Investment Inc. [Member]
Gross Proceeds from Financing Transaction						$ 15,000,000
Thirty-Year Debentures [Member]
Warrant Expiration Period					5 years 182 days
Class of Warrant or Right, Cancelled During Period,Value									159,000
Gain (Loss) on Extinguishment of Debt									(795,000)
Amortization of Debt Discount (Premium)				$ 4,648,000					4,720,000
Amortization of Debt Issuance Costs				$ 765,000					777,000
Gross Proceeds from Convertible Debt					$ 5,500,000				5,500,000
Potential Proceed from Issuance of Convertible Debt					$ 15,000,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights					1,102,942
Proceeds from Convertible Debt					$ 4,720,000
Convertible Debt					0
Debt Instrument, Unamortized Discount					$ 4,720,000
Debt Instrument, Term					30 years
Registration Payment Arrangement, Gains and Losses									1,100,000
Registration Payment							$ 220,000
Repayments of Debt			$ 7,500,000						$ 7,500,000
Class of Warrant or Right, Exercise Price of Warrants or Rights					$ 13.60
Thirty-Year Debentures [Member] | Series B Warrant [Member]
Residual Fair Value of Warrants					$ 897,000
Thirty-Year Debentures [Member] | Series A Warrant [Member]
Residual Fair Value of Warrants					3,385,000
Payment After Approval of Authorities [Member]
Potential Proceed from Issuance of Convertible Debt					9,500,000
Thirty-Year Debentures, Beneficial Conversion Feature [Member]
Debt Instrument, Convertible, Beneficial Conversion Feature					$ 438,000

XML

Note 6 - Convertible Debentures - Schedule of Extinguishment of Debt (Details) - USD ($)			12 Months Ended
	Feb. 29, 2016	Aug. 31, 2015	Jun. 30, 2017	Jun. 30, 2016
Loss on modification of Series A warrants				$ 149,000
Loss on extinguishment of debt				795,000
Thirty-Year Debentures [Member]
Repayments of Debt	$ 7,500,000			7,500,000
Repayment of Thirty-Year debentures		$ (5,500,000)		(5,500,000)
Payment of accrued liquidated damages and interest				(897,000)
Loss on modification of Series A warrants				(149,000)
Cancellation of Series B derivative obligation				(159,000)
Loss on extinguishment of debt				$ 795,000

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Note 7 - Derivative Obligations (Details Textual) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Aug. 31, 2015
Derivative, Gain (Loss) on Derivative, Net	$ (60,000)	$ 3,395,000
Series A Warrant [Member]
Class of Warrant or Right, Outstanding		404,412	404,412

XML

Note 7 - Derivative Obligations - Fair Value Assumptions (Details) - Series A Warrant [Member] - $ / shares	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Market price of common stock (in dollars per share)	$ 3.17	$ 2.93
Expected volatility	110.00%	99.00%
Contractual term (years) (Year)	3 years 255 days	4 years 255 days
Discount rate	1.66%	1.01%
Dividend rate	0.00%	0.00%
Exercise price (in dollars per share)	$ 8	$ 8

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Note 7 - Derivative Obligations - Fair Value Hierarchy (Details) - USD ($)	Jun. 30, 2017	Jun. 30, 2016
Derivative obligations	$ 730,000	$ 670,000
Fair Value, Inputs, Level 1 [Member]
Derivative obligations
Fair Value, Inputs, Level 2 [Member]
Derivative obligations
Fair Value, Inputs, Level 3 [Member]
Derivative obligations	$ 730,000	$ 670,000

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Note 7 - Derivative Obligations - Change In Fair Value of Derivative Liabilities (Details) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Balance	$ 670,000
Change in fair value of derivative obligation	60,000	$ (3,395,000)
Balance	$ 730,000	$ 670,000

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Note 8 - Commitments and Contingencies (Details Textual) - USD ($)		12 Months Ended
	May 04, 2017	Jun. 30, 2017	Jun. 30, 2016
Operating Leases, Rent Expense, Net		$ 291,000	$ 657,000
Short Term Investment Minimum		$ 2,000,000
Payment Terms, Severance Compensation		1 year
Minimum [Member]
Period Of Warranty On Products		1 year
Maximum [Member]
Period Of Warranty On Products		2 years
Potential Severance Cost for Chief Operating Officer [Member]
Loss Contingency, Estimate of Possible Loss		$ 320,000
Litigation Related to Strategic Advisory Services [Member]
Loss Contingency, Damages Sought, Value	$ 1,000,000
Loss Contingency Accrual		$ 0

XML

Note 8 - Commitments and Contingencies - Future Minimum Lease Payments for Non-cancelable Operating Lease (Details)	Jun. 30, 2017 USD ($)
2018	$ 297,000
2019	279,000
2020	3,000
Total	$ 579,000

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Note 8 - Commitments and Contingencies - Changes In Product Liability Included In Accrued Liabilities (Details) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Beginning balance	$ 566,000	$ 627,000
Warranties issued during the period	120,000	97,000
Settlements made during the period	(93,000)	(287,000)
Changes in liability for pre-existing warranties during the period	(5,000)	129,000
Ending balance	$ 588,000	$ 566,000

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Note 9 - Stockholders' Equity (Details Textual)								1 Months Ended	3 Months Ended		12 Months Ended
	Jul. 01, 2017 shares	Feb. 24, 2017 $ / shares shares	Dec. 16, 2016 $ / shares shares	Aug. 22, 2016 USD ($) shares	Aug. 03, 2016 USD ($) $ / shares shares	Jul. 26, 2016 USD ($) shares	Jul. 07, 2016 USD ($) $ / shares shares	Jul. 31, 2016 shares	Mar. 31, 2017 USD ($) shares	Dec. 31, 2016 USD ($) shares	Jun. 30, 2017 USD ($) $ / shares shares	Jun. 30, 2016 USD ($) $ / shares shares	May 05, 2017 shares
Debt Conversion, Converted Instrument, Shares Issued				6,102,941
Stock Issued During Period, Shares, New Issues					600,000
Shares Issued, Price Per Share | $ / shares					$ 4.10
Payments of Stock Issuance Costs | $					$ 369,000
Proceeds from Issuance of Common Stock | $					$ 2,092,000						$ 2,092,000	$ 2,463,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period											0	0
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares											$ 2.16	$ 5.75
Allocated Share-based Compensation Expense | $											$ 1,461,000	$ 742,000
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period											0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross											318,324
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares											$ 2.98
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $											$ 275,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition											1 year 182 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $											$ 572,000	$ 354,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number											397,388	104,378
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period											123,417	10,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $											$ 43,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition											210 days
Shares Paid for Tax Withholding for Share Based Compensation											145	1,300
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period											125,513	6,120
Former Chief Executive Officer [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Accelerated Vesting, Number										72,496
Former Chief Executive Officer [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Accelerated Vesting, Number										79,720
Former Chief Financial Officer [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Accelerated Vesting, Number									16,248
Former Chief Financial Officer [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Accelerated Vesting, Number									15,914
Former Chief Executive Officer and Former Chief Financial Officer [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Pre-Modification of Agreement											90 days
Chief Operating Officer [Member] | Employee Stock Option [Member]
Number Of Installments		4
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross		25,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares		$ 2.89
Chief Operating Officer [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		25,000
Chief Operating Officer [Member] | Restricted Stock Units (RSUs) [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		25.00%
Chief Operating Officer [Member] | Restricted Stock Units (RSUs) [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		25.00%
Chief Operating Officer [Member] | Restricted Stock Units (RSUs) [Member] | Share-based Compensation Award, Tranche Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		25.00%
Chief Operating Officer [Member] | Restricted Stock Units (RSUs) [Member] | Share-based Compensation Award, Tranche Four [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		25.00%
Interim Chief Executive Officer [Member] | Employee Stock Option [Member]
Number Of Installments			5
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			7 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures			50,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares			$ 2.91
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award Accelerated Compensation Cost | $									$ 94,000	$ 539,000
Short Term Plan [Member]
Shares Paid for Tax Withholding for Share Based Compensation								46,879
Share-based Compensation Arrangement by Share-based Payment Award, Aggregate Amount of Issuable Cash Award | $							$ 276,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized							104,000
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period						98,417		118,288
Share-based Compensation Arrangement by Share-based Payment Award, Amount of Cash Award Issued in Period | $						$ 266,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period											51,636
Short Term Plan [Member] | Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	46,781
Amended 2016 Plan [Member
Share-based Compensation Arrangement by Share-based Payment Award, Accumulated Shares Issued											254,224
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized													600,000
Plan 2012 [Member]
Options Prices In Terms Of Fair Market Value											100.00%
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period											10 years
Common Stock, Capital Shares Reserved for Future Issuance											194
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number											134,164
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized											25,000
The 2016 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross							156,100
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares							$ 2.86
The 2016 Plan [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Ratable Vesting Period							180 days
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period							3 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period							7 years
Common Stock [Member]
Stock Issued During Period, Shares, New Issues											600,000	735,294
Convertible Debt [Member] | Boyalife Investment Inc. [Member]
Debt Conversion, Original Debt Principal, Amount | $				$ 12,500,000
Debt Conversion, Original Debt Interest, Amount | $				8,250,000
Convertible Debt [Member] | Boyalife Investment Inc. [Member] | Common Stock [Member]
Debt Conversion, Original Debt Interest, Amount | $				$ 8,250,000
Debt Conversion, Converted Instrument, Shares Issued				6,102,941

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Note 9 - Stockholders' Equity - Warrant Activity (Details) - Restricted Stock [Member] - $ / shares	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Beginning balance (in shares)	4,828,723	252,620
Beginning balance (in dollars per share)	$ 9.37	$ 44.18
Warrants granted (in shares)		5,238,971
Warrants granted (in dollars per share)		$ 9.83
Warrants exercised (cashless) (in shares)		(51,712)
Warrants exercised (cashless) (in dollars per share)		$ 13.60
Warrants expired/canceled (in shares)		(611,156)
Warrants expired/canceled (in dollars per share)		$ 17.21
Ending balance (in shares)	4,828,723	4,828,723
Ending balance (in dollars per share)	$ 9.37	$ 9.37
Exercisable at June 30 (in shares)	4,130,192	600,782
Exercisable at June 30 (in dollars per share)	$ 9.60	$ 19.02

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Note 9 - Stockholders' Equity - Option Activity for Stock Option Plans (Details) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Granted, weighted average exercise price, options (in dollars per share)	$ 2.16	$ 5.75
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	0	0
Employee Stock Option [Member]
Outstanding, options (in shares)	104,378
Outstanding, weighted average exercise price, options (in dollars per share)	$ 14.85
Granted, options (in shares)	318,324
Granted, weighted average exercise price, options (in dollars per share)	$ 2.98
Forfeited/cancelled (in shares)	(22,814)
Forfeited/cancelled (in dollars per share)	$ 6.39
Expired, options (in shares)	(2,500)
Expired, weighted average exercise price, options (in dollars per share)	$ 18.46
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	0
Exercised, weighted average exercise price, options (in dollars per share)	$ 0
Outstanding, options (in shares)	397,388	104,378
Outstanding, weighted average exercise price, options (in dollars per share)	$ 5.80	$ 14.85
Outstanding, weighted average remaining contractual life, options (Year)	6 years 73 days
Outstanding, aggregate intrinsic value, options	$ 69,000
Vested and Expected to Vest, options (in shares)	376,595
Vested and Expected to Vest, weighted average exercise price, options (in dollars per share)	$ 5.94
Vested and Expected to Vest, weighted average remaining contractual life, options (Year)	6 years 73 days
Vested and Expected to Vest, aggregate intrinsic value, options	$ 64,000
Exercisable, options (in shares)	242,073
Exercisable, weighted average exercise price, options (in dollars per share)	$ 7.38
Exercisable, weighted average remaining contractual life, options (Year)	5 years 182 days
Exercisable, aggregate intrinsic value, options	$ 43,000

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Note 9 - Stockholders' Equity - Non-vested Stock Options Activity (Details) - Non-vested Stock Options [Member]	12 Months Ended
	Jun. 30, 2017 $ / shares shares
Outstanding, options (in shares) | shares	43,107
Outstanding at June 30, 2016 (in dollars per share) | $ / shares	$ 7.46
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares	318,325
Granted (in dollars per share) | $ / shares	$ 2.16
Vested (in shares) | shares	(185,019)
Vested (in dollars per share) | $ / shares	$ 3.07
Forfeited/cancelled (in shares) | shares	(21,097)
Forfeited (in dollars per share) | $ / shares	$ 3.31
Outstanding, options (in shares) | shares	155,316
Outstanding at June 30, 2017 (in dollars per share) | $ / shares	$ 2.39

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Note 9 - Stockholders' Equity - Schedule of Assumptions (Details)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Expected life (years) (Year)	4 years	5 years
Risk-free interest rate	1.30%	1.50%
Expected volatility	102.00%	80.00%
Dividend yield	0.00%	0.00%

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Note 9 - Stockholders' Equity - Restricted Stock Activity Granted to Employees (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Balance, Number of Shares (in shares)	63,566	72,589
Balance, Weighted Average Grant Date Fair Value, (in dollars per share)	$ 14.96	$ 22.40
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	123,417	10,000
Granted, Weighted Average Grant Date Fair Value (in dollars per share)	$ 4.55	$ 2.98
Vested, Weighted Average Grant Date Fair Value (in dollars per share)	$ 9.47	$ 28.94
Vested, Number of Shares (in shares)	(125,513)	(6,120)
Forfeited, Number of Shares (in shares)	(1,776)	(12,903)
Forfeited, Weighted Average Grant Date Fair Value (in dollars per share)	$ 27.05	$ 41.15
Outstanding, Number of Shares (in shares)	59,694	63,566
Outstanding, Weighted Average Grant Date Fair Value, (in dollars per share)	$ 4.62	$ 14.96

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Note 10 - Concentrations (Details Textual)	12 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)
Accounts Receivable, Net, Current	$ 3,701,000	$ 3,169,000
Revenue, Net	$ 14,525,000	$ 11,929,000
Number of Suppliers	2	2
Supplier Concentration Risk [Member] | Cost of Goods, Total [Member] | Supplier 1 [Member]
Concentration Risk, Percentage	64.00%	65.00%
Supplier Concentration Risk [Member] | Cost of Goods, Total [Member] | Supplier 2 [Member]
Concentration Risk, Percentage	20.00%	21.00%
Distributor 1 [Member]
Accounts Receivable, Net, Current	$ 1,388,000	$ 901,000
Revenue, Net	$ 2,842,000	$ 2,797,000
Distributor 1 [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member]
Concentration Risk, Percentage	36.00%	28.00%
Distributor 1 [Member] | Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Concentration Risk, Percentage	20.00%	23.00%
Customer 1 [Member]
Accounts Receivable, Net, Current	$ 259,000	$ 620,000
Revenue, Net	$ 3,263,000	$ 2,475,000
Customer 1 [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member]
Concentration Risk, Percentage	7.00%	19.00%
Customer 1 [Member] | Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Concentration Risk, Percentage	22.00%	21.00%
Distributor 2 [Member]
Accounts Receivable, Net, Current	$ 304,000	$ 320,000
Distributor 2 [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member]
Concentration Risk, Percentage	8.00%	10.00%

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Note 10 - Concentrations - Revenues by Product Platform (Details) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Revenue, Net	$ 14,525,000	$ 11,929,000
Product Concentration Risk [Member] | AXP [Member]
Revenue, Net	8,715,000	6,932,000
Product Concentration Risk [Member] | BioArchive [Member]
Revenue, Net	3,318,000	2,465,000
Product Concentration Risk [Member] | Manual Disposables [Member]
Revenue, Net	1,195,000	1,507,000
Product Concentration Risk [Member] | Bone Marrow [Member]
Revenue, Net	745,000	459,000
Product Concentration Risk [Member] | Other Segments [Member]
Revenue, Net	$ 552,000	$ 566,000

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Note 10 - Concentrations - Sales to Customers (Details) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Revenue, Net	$ 14,525,000	$ 11,929,000
Geographic Concentration Risk [Member] | UNITED STATES
Revenue, Net	6,675,000	5,122,000
Geographic Concentration Risk [Member] | CHINA
Revenue, Net	3,296,000	2,797,000
Geographic Concentration Risk [Member] | Asia - Other [Member]
Revenue, Net	1,951,000	1,955,000
Geographic Concentration Risk [Member] | Europe [Member]
Revenue, Net	1,739,000	1,343,000
Geographic Concentration Risk [Member] | All Other Countries [Member]
Revenue, Net	$ 864,000	$ 712,000

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Note 10 - Concentrations - Summary of Net Equipment by Geographic Area (Details) - USD ($)	Jun. 30, 2017	Jun. 30, 2016
Property, Plant, and Equipment, Net	$ 2,330,000	$ 2,962,000
Geographic Concentration Risk [Member] | UNITED STATES
Property, Plant, and Equipment, Net	1,559,000	2,030,000
Geographic Concentration Risk [Member] | COSTA RICA
Property, Plant, and Equipment, Net	322,000	367,000
Geographic Concentration Risk [Member] | INDIA
Property, Plant, and Equipment, Net	261,000	279,000
Geographic Concentration Risk [Member] | All Other Countries [Member]
Property, Plant, and Equipment, Net	$ 188,000	$ 286,000

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Note 11 - Segment Reporting (Details Textual)	12 Months Ended
	Jun. 30, 2017
Number of Reportable Segments	2

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Note 11 - Segment Reporting - Summary of Operating Results by Reportable Segments (Details) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Operating expenses	$ 15,079,000	$ 13,609,000
Operating profit (loss)	(9,240,000)	(10,865,000)
Depreciation and amortization	830,000	1,168,000
Stock-based compensation expense	1,461,000	742,000
Net revenues	14,525,000	11,929,000
Cost of revenues	8,686,000	9,185,000
Gross profit	5,839,000	2,744,000
Clinical Development [Member]
Operating expenses	8,966,000
Operating profit (loss)	(8,940,000)
Depreciation and amortization	501,000
Stock-based compensation expense	970,000
Net revenues	492,000
Cost of revenues	466,000
Gross profit	26,000
Clinical Protocols [Member]
Operating expenses		8,312,000
Operating profit (loss)		(8,240,000)
Depreciation and amortization		644,000
Stock-based compensation expense		548,000
Net revenues		646,000
Cost of revenues		574,000
Gross profit		72,000
Device [Member]
Operating expenses	6,113,000
Operating profit (loss)	(300,000)
Depreciation and amortization	329,000
Stock-based compensation expense	491,000
Net revenues	14,033,000
Cost of revenues	8,220,000
Gross profit	$ 5,813,000
Device Registration [Member]
Operating expenses		5,297,000
Operating profit (loss)		(2,625,000)
Depreciation and amortization		524,000
Stock-based compensation expense		194,000
Net revenues		11,283,000
Cost of revenues		8,611,000
Gross profit		$ 2,672,000

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Note 12 - Income Taxes (Details Textual) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2015
Income (Loss) from Continuing Operations before Income Taxes, Domestic	$ 29,005,000	$ (17,789,000)
Income (Loss) from Continuing Operations before Income Taxes, Foreign	$ (763,000)	(799,000)
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	34.00%
Deferred Income Tax Expense (Benefit)	$ (673,000)
Deferred Income Tax (Benefit) Due to Prior Years State Rate Changes	(559,000)	$ (157,000)	$ (402,000)
Tax Credit Carryforward, Amount	1,456,000
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	2,209,000
Tax Benefits Related To Stock Options Included In Valuation Allowance	215,000
Domestic Tax Authority [Member]
Operating Loss Carryforwards	118,956,000
Tax Credit Carryforward, Amount	1,458,000
State and Local Jurisdiction [Member]
Operating Loss Carryforwards	$ 42,922,000

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Note 12 - Income Taxes - Reconciliation of Federal Income Tax Attributable to Operations to Income Tax Expense (Benefit) (Details) - USD ($)	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Statutory federal income tax benefit	$ (10,121,000)	$ (6,300,000)
Unbenefited net operating losses and credits	2,281,000	3,391,000
Disallowed financing costs	6,959,000	2,607,000
State and local taxes	88,000	69,000
Other	120,000	233,000
Total income tax benefit	$ (673,000)

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Note 12 - Income Taxes - Components of Company's Deferred Tax Assets and Liabilities for Federal and State Income Taxes (Details) - USD ($)	Jun. 30, 2017	Jun. 30, 2016
Deferred tax assets:
Net operating loss carryforwards	$ 43,687,000	$ 41,023,000
Income tax credit carryforwards	2,419,000	2,367,000
Stock compensation	1,047,000	874,000
Other	1,124,000	1,858,000
Total deferred tax assets	48,277,000	46,122,000
Deferred tax liabilities
Indefinite lived intangible assets	(6,968,000)	(7,641,000)
Depreciation and amortization	(176,000)	(230,000)
Total deferred tax liabilities	(7,144,000)	(7,871,000)
Valuation allowance	(48,101,000)	(45,892,000)
Net deferred taxes	$ (6,968,000)	$ (7,641,000)

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Note 13 - Employee Retirement Plan (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Defined Benefit Plan, Plan Assets, Contributions by Employer	$ 0	$ 0

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Note 14 - Subsequent Event (Details Textual) - USD ($)	Jul. 07, 2017	Sep. 13, 2017	Mar. 06, 2017
Boyalife Investment Fund II, Inc. [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity			$ 5,000,000
Subsequent Event [Member] | Boyalife Investment Fund II, Inc. [Member] | Convertible Promissory Note [Member]
Debt Instrument, Face Amount		$ 10,000,000
Subsequent Event [Member] | Boyalife Investment Fund II, Inc. [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 10,000,000
ThermoGenesis [Member] | SynGen [Member] | Subsequent Event [Member]
Percentage Of Common Stock Issued To Acquiree Shareholders	20.00%
Payments to Acquire Businesses, Gross	$ 1,000,000