10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

X  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2019.

or

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

Commission File Number: 000-16375 ThermoGenesis Holdings, Inc. (formerly known as 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	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $.001 par value	THMO	Nasdaq Capital Market

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

Yes [X]    No [   ]

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

Yes [X]    No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions 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 [   ]     Non-accelerated filer [X]     Smaller reporting company [X]     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 [   ]    No [X]

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

Class	Outstanding at November 12, 2019
Common stock, $.001 par value	2,843,601

ThermoGenesis Holdings, Inc.

INDEX

		Page Number
Part I Financial Information
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	27
Item 4.	Controls and Procedures	27
Part II Other Information
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults upon Senior Securities	28
Item 4.	Mine Safety Disclosure	28
Item 5.	Other Information	28
Item 6.	Exhibits	28
Signatures		30

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ThermoGenesis Holdings, Inc.

Condensed Consolidated Balance Sheets

	September 30, 2019			December 31, 2018
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,800,000		$	2,400,000
Accounts receivable, net of allowance for doubtful accounts of $278,000 ($419,000 at December 31, 2018)		4,470,000			1,509,000
Inventories, net of reserves of $399,000 ($258,000 at December 31, 2018)		3,405,000			4,493,000
Prepaid expenses and other current assets		451,000			224,000
Total current assets		11,126,000			8,626,000
Restricted cash – long term		1,000,000			1,000,000
Equipment and leasehold improvements, net		2,251,000			2,562,000
Right-of-use operating lease assets, net		887,000			--
Goodwill		781,000			781,000
Intangible assets, net		1,498,000			1,591,000
Other assets		48,000			51,000
Total assets	$	17,591,000		$	14,611,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,874,000		$	2,423,000
Accrued payroll and related expenses		404,000			703,000
Deferred revenue – short term		840,000			485,000
Interest payable – related party		1,398,000			1,513,000
Other current liabilities		1,175,000			1,241,000
Total current liabilities		5,691,000			6,365,000
Convertible promissory note – related party, less debt discount of $5,781,000 ($6,026,000 at December 31, 2018)		2,932,000			1,174,000
Convertible promissory note, plus debt premium of $80,000 ($0 at December 31, 2018)		665,000			--
Note payable		1,000,000			--
Operating lease obligations – long term		794,000			--
Deferred revenue – long term		1,855,000			303,000
Other noncurrent liabilities		23,000			38,000
Total liabilities		12,960,000			7,880,000
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 2,000,000 shares authorized; none issued and outstanding		--			--
Common stock, $0.001 par value; 350,000,000 shares authorized; 2,704,837 issued and outstanding (2,168,337 at December 31, 2018)		3,000			2,000
Additional paid in capital		236,830,000			235,888,000
Accumulated deficit		(232,885,000	)		(227,435,000	)
Accumulated other comprehensive loss		(4,000	)		(13,000	)
Total ThermoGenesis Holdings, Inc. stockholders’ equity		3,944,000			8,442,000
Noncontrolling interest		687,000			(1,711,000	)
Total stockholders’ equity		4,631,000			6,731,000
Total liabilities and stockholders’ equity	$	17,591,000		$	14,611,000

See accompanying notes.

1

ThermoGenesis Holdings, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net revenues	$	4,058,000		$	3,113,000		$	11,325,000		$	6,984,000
Cost of revenues		2,163,000			2,458,000			6,220,000			5,614,000
Gross profit		1,895,000			655,000			5,105,000			1,370,000
Expenses:
Sales and marketing		502,000			364,000			1,227,000			1,048,000
Research and development		584,000			611,000			1,758,000			2,560,000
General and administrative		1,139,000			1,615,000			3,617,000			6,256,000
Impairment charges		--			--			--			27,202,000
Total operating expenses		2,225,000			2,590,000			6,602,000			37,066,000
Loss from operations		(330,000	)		(1,935,000	)		(1,497,000	)		(35,696,000	)
Other income (expense):
Fair value change of derivative instruments		(2,000	)		24,000			(2,000	)		591,000
Interest expense		(1,188,000	)		(835,000	)		(3,531,000	)		(1,928,000	)
Loss on extinguishment of debt		(840,000	)		--			(840,000	)		--
Other expense		(13,000	)		(18,000	)		(25,000	)		(63,000	)
Total other expense		(2,043,000	)		(829,000	)		(4,398,000	)		(1,400,000	)
Loss before benefit for income taxes		(2,373,000	)		(2,764,000	)		(5,895,000	)		(37,096,000	)
Benefit for income taxes		--			--			--			3,451,000
Net loss		(2,373,000	)		(2,764,000	)		(5,895,000	)		(33,645,000	)
Loss attributable to noncontrolling interests		(91,000	)		(175,000	)		(445,000	)		(1,088,000	)
Net loss attributable to common stockholders	$	(2,282,000	)	$	(2,589,000	)	$	(5,450,000	)	$	(32,557,000	)
COMPREHENSIVE LOSS
Net loss		(2,373,000	)	$	(2,764,000	)		(5,895,000	)	$	(33,645,000	)
Other comprehensive loss:
Foreign currency translation adjustments		16,000			23,000			9,000			51,000
Comprehensive loss		(2,357,000	)		(2,741,000	)		(5,886,000	)		(33,594,000	)
Comprehensive loss attributable to noncontrolling interests		(91,000	)		(175,000	)		(445,000	)		(1,088,000	)
Comprehensive loss attributable to common stockholders	$	(2,266,000	)	$	(2,566,000	)	$	(5,441,000	)	$	(32,506,000	)
Per share data:
Basic and diluted net loss per common share	$	(0.78	)	$	(1.17	)	$	(2.00	)	$	(19.90	)
Weighted average common shares outstanding basic and diluted		2,913,198			2,214,600			2,720,502			1,636,299

See accompanying notes.

2

ThermoGenesis Holdings, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

For the Nine Months Ended September 30, 2019

	Shares		Common Stock		Paid in Capital in Excess of Par			Accumulated Deficit			AOCI*			Non-Controlling Interests			Total Equity
Balance at January 1, 2019		2,168,337	$	2,000	$	235,888,000		$	(227,435,000	)	$	(13,000	)	$	(1,711,000	)	$	6,731,000
Stock-based compensation		--		--		81,000			--			--			--			81,000
Exercise of pre-funded warrants		50,000		--		5,000			--			--			--			5,000
Discount due to beneficial conversion features		--		--		1,513,000			--			--			--			1,513,000
Reorganization of subsidiary and related change in non-controlling interest		--		--		(2,843,000	)		--			--			2,843,000			--
Foreign currency translation		--		--		--			--			(4,000	)		--			(4,000	)
Net loss		--		--		--			(1,871,000	)		--			(176,000	)		(2,047,000	)
Balance at March 31, 2019		2,218,337	$	2,000	$	234,644,000		$	(229,306,000	)	$	(17,000	)	$	956,000		$	6,279,000
Stock-based compensation		--		--		125,000			--			-			--			125,000
Exercise of pre-funded warrants		150,000		--		18,000			--			--			--			18,000
Discount due to beneficial conversion features		--		--		800,000			--			--			--			800,000
Issuance of pre-funded warrants in financing, net of offering costs		--		--		756,000			--			--			--			756,000
Foreign currency translation		--		--		--			--			(3,000	)		--			(3,000	)
Net loss		--		--		--			(1,297,000	)		--			(178,000	)		(1,475,000	)
Balance at June 30, 2019		2,368,337	$	2,000	$	236,343,000		$	(230,603,000	)	$	(20,000	)	$	778,000		$	6,500,000
Stock-based compensation		--		--		253,000			--			--			--			253,000
Exercise of pre-funded warrants		216,500		1,000		18,000			--			--			--			19,000
Conversion of note payable to stock		120,000		--		216,000			--			--			--			216,000
Foreign currency translation		--		--		--			--			16,000						16,000
Net loss		--		--		--			(2,282,000	)		--			(91,000	)		(2,373,000	)
Balance at September 30, 2019		2,704,837	$	3,000	$	236,830,000		$	(232,885,000	)	$	(4,000	)	$	687,000		$	4,631,000

* Accumulated other comprehensive loss.

See accompanying notes.

3

ThermoGenesis Holdings, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

For the Nine Months Ended September 30, 2018

	Shares		Common Stock		Paid in Capital in Excess of Par		Accumulated Deficit			AOCI*			Non-Controlling Interests			Total Equity
Balance at January 1, 2018		1,090,664	$	1,000	$	221,381,000	$	(187,640,000	)	$	(43,000	)	$	(487,000	)	$	33,212,000
Stock-based compensation		--		--		137,000		--			--			--			137,000
Issuance of common stock and pre-funded warrants, net of offering costs		60,697		--		1,213,000		--			--			--			1,213,000
Cumulative-effect adjustment from adoption of ASC 606		--		--		--		(79,000	)		--			--			(79,000	)
Foreign currency translation		--		--		--		--			7,000			--			7,000
Net loss		--		--		--		(2,960,000	)					(410,000	)		(3,370,000	)
Balance at March 31, 2018		1,151,361	$	1,000	$	222,731,000	$	(190,679,000	)	$	(36,000	)	$	(897,000	)	$	31,120,000
Stock-based compensation		42		--		163,000		--			--			--			163,000
Issuance of common stock and pre-funded warrants, net of offering costs		647,497		1,000		4,791,000		--			--			--			4,792,000
Exercise of pre-funded warrants		269,167		--		27,000		--			--			--			27,000
Discount due to beneficial conversion features		--		--		7,200,000		--			--			--			7,200,000
Foreign currency translation		--		--		--		--			21,000			--			21,000
Net loss		--		--		--		(27,008,000	)					(503,000	)		(27,511,000	)
Balance at June 30, 2018		2,068,067	$	2,000	$	234,912,000	$	(217,687,000	)	$	(15,000	)	$	(1,400,000	)	$	15,812,000
Stock-based compensation		--		--		175,000		--			--			--			175,000
Issuance of common stock and pre-funded warrants, net of offering costs		100,000		--		624,000		--			--			--			624,000
Cumulative-effect adjustment from adoption of ASC 606		--		--		--		--			--			--			--
Foreign currency translation		--		--		--		--			23,000			--			23,000
Net loss		--		--		--		(2,589,000	)		--			(175,000	)		(2,764,000	)
Balance at September 30, 2018		2,168,067	$	2,000	$	235,711,000	$	(220,276,000	)	$	8,000		$	(1,575,000	)	$	13,870,000

* Accumulated other comprehensive loss.

See accompanying notes.

4

ThermoGenesis Holdings, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Nine Months Ended September 30,
	2019			2018
Cash flows from operating activities:
Net loss	$	(5,895,000	)	$	(33,645,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		604,000			506,000
Stock based compensation expense		459,000			475,000
Amortization of debt discount		1,799,000			800,000
(Recovery of)/reserve for excess and slow-moving inventories		141,000			(126,000	)
(Recovery of)/reserve for bad debt expense		(53,000	)		75,000
Change in fair value of derivative		2,000			(591,000	)
Deferred income tax benefit		--			(3,451,000	)
Loss on disposal of equipment		20,000			451,000
Loss on extinguishment of debt		840,000			--
Impairment of intangible asset		--			27,202,000
Net change in operating assets and liabilities:
Accounts receivable		(2,908,000	)		543,000
Inventories		980,000			336,000
Prepaid expenses and other assets		(227,000	)		304,000
Accounts payable		(542,000	)		(407,000	)
Related party payable		(116,000	)		(135,000	)
Accrued payroll and related expenses		(298,000	)		(147,000	)
Deferred revenue		354,000			66,000
Other current liabilities		(145,000	)		314,000
Long term deferred revenue and other noncurrent liabilities		1,467,000			(1,000	)
Net cash used in operating activities		(3,518,000	)		(7,431,000	)
Cash flows from investing activities:
Capital expenditures		(178,000	)		(985,000	)
Net cash used in investing activities		(178,000	)		(985,000	)
Cash flows from financing activities:
Payments on finance lease obligations		(15,000	)		(28,000	)
Proceeds from long-term debt		1,800,000			--
Proceeds from convertible promissory note – related party		1,513,000			500,000
Proceeds from exercise of pre-funded warrants		42,000			--
Proceeds from issuance of common stock and pre-funded warrants		756,000			6,655,000
Net cash provided by financing activities		4,096,000			7,127,000
Effects of exchange rate changes on cash and cash equivalents		--			(4,000	)
Net increase (decrease) in cash, cash equivalents and restricted cash		400,000			(1,293,000	)
Cash, cash equivalents and restricted cash at beginning of period		3,400,000			3,513,000
Cash, cash equivalents and restricted cash at end of period	$	3,800,000		$	2,220,000
Supplemental disclosures of cash flow information:
Cash paid for interest	$	1,613,000		$	664,000
Supplemental non-cash financing and investing information:
Recording of beneficial conversion feature on debt	$	2,313,000		$	7,200,000
Right-to-use asset acquired under operating lease	$	966,000		$	--
Conversion of debt to common stock	$	216,000		$	--
Fair value of amended convertible note issued in connection with the extinguishment of original convertible note	$	1,473,000		$	--
Transfer of equipment to inventories	$	33,000		$	172,000
Transfer of inventories to equipment	$	--		$	420,000

See accompanying notes.

5

ThermoGenesis Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation and Summary of Significant Accounting Policies

Organization and Basis of Presentation

ThermoGenesis Holdings, Inc. (“ThermoGenesis Holdings,” or the “Company”), formerly known as Cesca Therapeutics Inc., develops, commercializes and markets a range of automated technologies for CAR-T and other cell-based therapies. The Company currently markets a full suite of solutions for automated clinical biobanking, point-of-care applications, and automation for immuno-oncology, including its semi-automated, functionally closed CAR-TXpress™ platform, which streamlines the manufacturing process for the emerging CAR-T immunotherapy market. The Company was founded in 1986 and is registered in the State of Delaware and headquartered in Rancho Cordova, CA. 

ThermoGenesis Corp. (ThermoGenesis Corp), the Company’s fully owned device subsidiary, provides the AutoXpress^® and BioArchive^® platforms for automated clinical bio-banking, PXP^® platform for point-of-care cell-based therapies and CAR-TXpress™ platform under development for bio-manufacturing for immuno-oncology applications.  The Company, along with its fully owned device subsidiary, currently manufactures and markets the following products:

For Clinical Bio-Banking Applications:

• AXP^® Automated Cell Separation System – an automated, fully closed cell separation system for isolating and retrieving stem and progenitor cells from umbilical cord blood.

• BioArchive^® Automated Cryopreservation System – an automated, robotic, liquid nitrogen controlled-rate-freezing and cryogenic storage system for cord blood samples and cell therapeutic products used in clinical applications.

For Point-of-Care Applications:

• PXP^® Point-of-Care System – an automated, fully closed, sterile system allows for the rapid, automated processing of autologous peripheral blood or bone marrow aspirate derived stem cells at the point-of-care, such as surgical centers or clinics.

For Large Scale Cell Processing and Biomanufacturing:

• X-Series Products: X-Lab^® for cell isolation, X-Wash^® System for cell washing and reformulation, X-Mini^® for high efficiency small scale cell purification, and X-BACS^™ System under development for large scale cell purification using our proprietary buoyance-activated cell sorting (BACS) technology.

• CAR-TXpress™ Platform – a modular designed, functionally closed platform that addresses the critical unmet need for large scale cellular processing and chemistry, manufacturing and controls (CMC) needs for manufacturing chimeric antigen receptor (CAR) T cell therapies.

On January 1, 2019, the Company entered into a reorganization of the business and equity ownership of its majority-owned ThermoGenesis Corp. subsidiary.  Pursuant to the reorganization, the assets acquired by ThermoGenesis Corp. from SynGen Inc. in July 2017 were contributed to a newly formed Delaware subsidiary of ThermoGenesis Corp. named CARTXpress Bio, Inc. (CARTXpress Bio) and the 20% interest in ThermoGenesis Corp. held by a third party was exchanged for a 20% interest in CARTXpress Bio.  As a result, the Company holds an 80% equity interest in CARTXpress Bio and the Company has become the owner of 100% of ThermoGenesis Corp.  The purpose of the reorganization is to allow CARTXpress Bio to focus on the development and commercialization of the newly launched CARTXpress Bio cellular manufacturing platform. 

The Company reacquired the non-controlling interest shares in ThermoGenesis Corp. with a deficit of $1,711,000 in exchange for 20% equity interest in the newly created subsidiary, CARTXpress Bio, which approximates $1,100,000.  The total amount of $2,843,000 related to reorganization of subsidiary and related change in non-controlling interest was recorded in the statement of stockholders’ equity. 

ThermoGenesis Holdings is an affiliate of the Boyalife Group, a global diversified life science holding company that focuses on stem cell technology and cell-based therapeutics.

6

Recent Corporate Name Change

On November 1, 2019, Cesca Therapeutics Inc. changed its corporate name to ThermoGenesis Holdings, Inc. in order to better reflect its new strategic focus on becoming a key solution provider for cell manufacturing tools and services in the cell and gene therapy markets.

Reverse Stock Split

On June 4, 2019, the Company effected a one (1) for ten (10) reverse stock split of its issued and outstanding common stock.  The total number of shares of common stock authorized for issuance by the Company of 350,000,000 shares did not change in connection with the reverse stock split. 

All historical share amounts disclosed herein have been retroactively restated to reflect the reverse split and subsequent share exchange.  No fractional shares were issued as a result of the reverse stock split, as fractional shares of common stock were rounded up to the nearest whole share.

Liquidity and Going Concern

The Company has a Revolving Credit Agreement (Credit Agreement) with Boyalife Asset Holding II, Inc. (Refer to Note 3). As of September 30, 2019, the Company had drawn down $8,713,000 of the $10,000,000 available under the Credit Agreement. Future draw-downs may be limited for various reasons including default or foreign government policies that restrict or prohibit transferring funds. At the time of this filing, we are currently unable to draw down on the line of credit. This may change in the near future but there is no assurance that the line of credit will become available at such time when it is needed. Boyalife Asset Holding 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.

At September 30, 2019, the Company had cash and cash equivalents of $2,800,000 and working capital of $5,435,000, as compared to $2,400,000 and $2,261,000 respectively at December 31, 2018.  These recurring losses raise substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance date of these financial statements. The Company anticipates requiring additional capital to grow the business, to fund other operating expenses and to make interest payments on the line of credit with Boyalife Asset Holding II, Inc.  The Company’s ability to fund its cash needs is subject to various risks, many of which are beyond its control. The Company may seek additional funding through bank borrowings or public or private sales of debt or equity securities or strategic partnerships. The Company cannot guarantee that such funding will be available on a timely basis, in needed quantities or on terms favorable to the Company, if at all.

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so.  The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of ThermoGenesis Holdings and its wholly-owned subsidiaries, ThermoGenesis Corp. and TotipotentRX Cell Therapy, Pvt. Ltd and ThermoGenesis Corp’s majority-owned subsidiary, CARTXpress Bio. All significant intercompany accounts and transactions have been eliminated upon consolidation.

Interim Reporting

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such Securities and Exchange Commission (SEC) rules and regulations and accounting principles applicable for interim periods. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Events subsequent to the balance sheet date have been evaluated for inclusion in the accompanying condensed consolidated financial statements through the date of issuance. Operating results for the three and nine month periods ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in ThermoGenesis Holdings Annual Report on Form 10-K for the year ended December 31, 2018.

7

2. Summary of Significant Accounting Policies

Recently Adopted Accounting Standards

In June 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-07, “Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”, which simplifies the accounting for nonemployee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The Company adopted the standard on January 1, 2019. The adoption of this standard did not have a material impact on the Company’s financial statements.

In February 2016, the FASB issued ASU 2016-02 “Leases,” which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The Company adopted the standard on January 1, 2019.

The new standard requires lessees to recognize both the right-of-use assets and lease liabilities in the balance sheet for most leases, whereas under previous GAAP only finance lease liabilities (previously referred to as capital leases) were recognized in the balance sheet. In addition, the definition of a lease has been revised which may result in changes to the classification of an arrangement as a lease. Under the new standard, an arrangement that conveys the right to control the use of an identified asset by obtaining substantially all of its economic benefits and directing how it is used as a lease, whereas the previous definition focuses on the ability to control the use of the asset or to obtain its output. Quantitative and qualitative disclosures related to the amount, timing and judgements of an entity’s accounting for leases and the related cash flows are expanded. Disclosure requirements apply to both lessees and lessors, whereas previous disclosures related only to lessees. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP. Lessor accounting is also largely unchanged.

The new standard provides a number of transition practical expedients, which the Company has elected, including:

● A “package of three” expedients that must be taken together and allow entities to (1) not reassess whether existing contracts contain leases, (2) carryforward the existing lease classification, and (3) not reassess initial direct costs associated with existing leases, and

● An implementation expedient which allows the requirements of the standard in the period of adoption with no restatement of prior periods.

The impact of adoption did not have a material impact to the Company as of January 1, 2019 as the Company’s finance leases are immaterial and its operating leases had terms shorter than one year.  In January 2019, the Company signed an amendment to its lease for office space at its corporate headquarters in Rancho Cordova, CA.  The amendment extended the lease term by five years and was accounted for as a modification.  At that time, the Company recorded lease assets and liabilities of $966,000 and no cumulative effect adjustment to retained earnings.

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Revenue Recognition

Revenue is recognized based on the five-step process outlined in Accounting Standards Codification (ASC) 606.

The following tables summarize the revenues of the Company’s reportable segments and product lines:

	Three Months Ended September 30, 2019
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	2,255,000	$	51,000	$	--	$	2,306,000
BioArchive		243,000		351,000		--		594,000
Manual Disposables		212,000		--		--		212,000
CAR-TXpress		875,000		6,000		33,000		914,000
Other		--		--		19,000		19,000
Total Device Segment		3,585,000		408,000		52,000		4,045,000
Clinical Development Segment:
Manual Disposables		9,000		--		--		9,000
Other		--		4,000		--		4,000
Total Clinical Development		9,000		4,000		--		13,000
Total		3,594,000		412,000		52,000	$	4,058,000

	Nine Months Ended September 30, 2019
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	6,550,000	$	160,000	$	--	$	6,710,000
BioArchive		1,274,000		1,117,000		--		2,391,000
Manual Disposables		711,000		--		--		711,000
CAR-TXpress		1,365,000		6,000		33,000		1,404,000
Other		--		--		40,000		40,000
Total Device Segment		9,900,000		1,283,000		73,000		11,256,000
Clinical Development Segment:
Manual Disposables		53,000		--		--		53,000
Other		5,000		11,000		--		16,000
Total Clinical Development		58,000		11,000		--		69,000
Total		9,958,000		1,294,000		73,000		11,325,000

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	Three Months Ended September 30, 2018
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	1,396,000	$	70,000	$	--	$	1,466,000
BioArchive		485,000		314,000		--		799,000
Manual Disposables		254,000		--		--		254,000
CAR-TXpress		517,000		--		--		517,000
Other		--		--		23,000		23,000
Total Device Segment		2,652,000		384,000		23,000		3,059,000
Clinical Development Segment:
Manual Disposables		8,000		--		--		8,000
Bone Marrow		--		40,000		--		40,000
Other		--		6,000		--		6,000
Total Clinical Development		8,000		46,000		--		54,000
Total	$	2,660,000	$	430,000	$	23,000	$	3,113,000

	Nine Months Ended September 30, 2018
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	2,930,000	$	201,000	$	--	$	3,131,000
BioArchive		1,357,000		969,000		--		2,326,000
Manual Disposables		716,000		--		--		716,000
CAR-TXpress		547,000		--		--		547,000
Other		46,000		--		56,000		102,000
Total Device Segment		5,596,000		1,170,000		56,000		6,822,000
Clinical Development Segment:
Manual Disposables		31,000		--		--		31,000
Bone Marrow		--		101,000		--		101,000
Other		--		30,000		--		30,000
Total Clinical Development		31,000		131,000		--		162,000
Total	$	5,627,000	$	1,301,000	$	56,000	$	6,984,000

Contract Balances

Generally, all sales are contract sales (with either an underlying contract or purchase order). The Company does not have any material contract assets. When invoicing occurs prior to revenue recognition a contract liability is recorded (as deferred revenue on the consolidated balance sheet). Revenues recognized during the three and nine months ended September 30, 2019 that were included in the beginning balance of deferred revenue were $50,000 and $480,000, respectively. Short term deferred revenues increased from $485,000 at December 31, 2018 to $840,000 at September 30, 2019.

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Supply Agreement

On August 30, 2019, the Company entered into a supply agreement with a global distributor for substantially all X-Series® products under the CAR-TXpress™ platform (the “Products”). The agreement has an initial term of five years with automatic two-year renewal terms, unless terminated by either party in accordance with the terms of the agreement. Pursuant to the agreement, the Company has granted exclusive worldwide distribution rights for X-Series products, for the duration of the term, subject to certain geographical and other exceptions. In addition, the Company has granted rights of first refusal for the exclusive worldwide distribution of certain future products developed or introduced by the Company relating to cell isolation or cell selection, including any such products substantially related or similar to the Products (the “ROFR Products”). As consideration for the exclusive worldwide distribution rights for the Products and ROFR Products, the Company will receive a $2,000,000 fee, in addition to any amounts payable throughout the term for the Products and any ROFR Products. The agreement also contains an option, exercisable by the global distributor at any time following January 1, 2021, to become the manufacturer for all or any portion of the Products.

The agreement contains covenants by the Company to negotiate in good faith regarding price reductions for the Products and, commencing in 2020, cost reduction efforts with respect to development and manufacture of the Products. Moreover, the agreement contains a most-favored customer provision with respect to the pricing made available for the Products during the term. The agreement contains mutual indemnification provisions, as well as standard warranties with respect to the Products, including that the Products supplied and the services provided (including customer support services for Products sold) be manufactured or performed, as applicable, in a first class, workmanlike manner by personnel properly trained.

Fair Value Measurements

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 to sell 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: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions.

The carrying values of cash and cash equivalents, accounts receivable and accounts payable 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. The impairment of goodwill and intangible assets is a non-recurring Level 3 fair value measurement.

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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 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 Device Segment, engages in the development and commercialization of automated technologies for cell-based therapeutics and bio-processing. The device division is operated through the Company’s ThermoGenesis Corp. subsidiary.

● The Clinical Development Segment, utilizes autologous stem cell-based therapeutics in the vascular and orthopedic markets through the Company’s TotipotentRX subsidiary in Gurgaon, India.

Net Loss per Share

Net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding plus the pre-funded warrants (as described in Footnote 8). For the purpose of calculating basic net loss per share, the additional shares of common stock that are issuable upon exercise of the pre-funded warrants have been included since the shares are issuable for a negligible consideration and have no vesting or other contingencies associated with them. There were 324,444 pre-funded warrants included in the quarter ended September 30, 2019 calculation. 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 noted below is anti-dilutive due to the Company’s net loss position for all periods presented. Anti-dilutive securities consisted of the following at September 30:

	2019		2018
Common stock equivalents of convertible promissory notes and accrued interest		6,013,667		4,626,667
Vested Series A warrants		40,442		40,442
Unvested Series A warrants(1)		69,853		69,853
Warrants – other		1,300,091		1,319,728
Stock options		296,029		118,830
Total		7,720,082		6,175,520

______________

(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.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassifications did not have an impact on net loss as previously reported.

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3. Related Party Transactions

Convertible Promissory Note and Revolving Credit Agreement

In March 2017, ThermoGenesis Holdings entered into a Credit Agreement with Boyalife Investment Fund II, Inc., which later merged into Boyalife Asset Holding 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 and its subsequent amendments, grants to the Company the right to borrow up to $10,000,000 (the “Loan”) at any time prior to March 6, 2022 (the “Maturity Date”). The Company has drawn down a total of $8,713,000 and $7,200,000 as of September 30, 2019 and December 31, 2018, respectively. The Company’s ability to draw-down the remaining $1,287,000 may be impacted by reasons such as default or foreign government policies that restrict or prohibit transferring funds. At the time of this filing, we are currently unable to draw down on the line of credit. This may change in the near future but there is no assurance that the line of credit will become available at such time when it is needed.

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. The Company has five business days after the Lender demands payment to pay the interest due before the Loan is considered in default. The Note can be prepaid in whole or in part by the Company at any time without penalty.

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.

The Credit Agreement and Note were amended in April 2018. The amendment granted the Lender the right to convert, at any time, outstanding principal and accrued but unpaid interest into shares of Common Stock at a conversion price of $16.10 per share and if the Company issues shares of Common Stock at a lower price per share, the conversion price of the Note is lowered to the reduced amount. The Company completed two transactions in 2018, lowering the conversion price to $1.80.

It was concluded that the conversion option contained a beneficial conversion feature and as a result of the modifications to the conversion price, the Company recorded a debt discount in the amount of $7,200,000 and added $1,513,000 to the debt discount as a result of the draw-down during the quarter ended March 31, 2019.  Such discount represented the fair value of the incremental shares up to the proceeds received from the convertible notes.  The Company amortized $586,000 and $1,758,000 of such debt discount to interest expense for the three and nine months ended September 30, 2019, and $450,000 and $800,000 for the three and nine months ended September 30, 2018.  In addition to the amortization, the Company also recorded interest expense of $471,000 and $1,398,000 during the three and nine months ended September 30, 2019, and $385,000 and $1,128,000 for the three and nine months ended September 30, 2018.  As of September 30, 2019, the Company had an interest payable balance of $1,398,000 as compared to $1,513,000 at December 31, 2018 related to the Note.

Distributor Agreement

On August 21, 2017, the Company 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 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 our products in the Territories.

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

During the three and nine months ended September 30, 2019, the Company recorded revenues from Boyalife of $214,000 and $794,000, and $267,000 and $536,000 for the three and nine months ended September 30, 2018 respectively, related to the aforementioned distributor agreement.

License Agreement

On March 12, 2018, ThermoGenesis entered into a License Agreement (the “Agreement”) with IncoCell Tianjin Ltd., a wholly-owned subsidiary of Boyalife Group (IncoCell). Boyalife Group is an affiliate of the Company’s Chief Executive Officer and Chairman of the Board of Directors, and Boyalife (Hong Kong) Limited, the Company’s largest stockholder.  Under the terms of the Agreement, ThermoGenesis granted IncoCell an exclusive license to use the ThermoGenesis X-Series^® products in the conduct of IncoCell’s contract manufacturing and development operations in the People’s Republic of China, Japan, South Korea, Taiwan, Hong Kong, Macau, Singapore, Malaysia, Indonesia and India (the “Territories”).

Pursuant to the terms of the Agreement, ThermoGenesis granted IncoCell an exclusive license to purchase and use, at a discounted purchase price, X-Series cellular processing research devices, consumables, and kits for use in the conduct of contract manufacturing and development services in the Territories. In exchange, ThermoGenesis is entitled to a percentage of IncoCell’s gross contract development revenues, including any potential upfront payments, future milestones or royalty payments, during the term of the Agreement. The term of the Agreement is ten years, provided that either party may terminate the Agreement earlier upon ninety (90) days’ prior notice to the other party. The Company recorded revenue of $82,000 related to product sales under this agreement during the three and nine months ended September 30, 2019, and $7,000 for the three and nine months ended September 30, 2018. The Company recorded no revenue under the contract development portion of the Agreement for the three and nine months ended September 30, 2019 and 2018.

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4. Convertible Promissory Note

On January 29, 2019, the Company agreed to issue and sell an unsecured note payable to an accredited investor (the “Accredited Investor”) for an aggregate of $800,000 face value (the “January 2019 Note”) that, after six months, is convertible into shares of the Company's common stock at a conversion price equal to the lower of (a) $1.80 per share or (2) 90% of the closing sale price of the Company’s common stock on the date of conversion (subject to a floor conversion price of $0.50).

The January 2019 Note bears interest at the rate of twenty-four percent (24%) per annum and is payable quarterly in arrears. Unless sooner converted in the manner described below, all principal under the January 2019 Note, together with all accrued and unpaid interest thereupon, will be due and payable eighteen (18) months from the date of the issuance of the January 2019 Note. The January 2019 Note may be prepaid without penalty at any time after it becomes convertible (at which time the holder will have the right to convert it before prepayment thereof).

On the date that is six months after the issuance of the January 2019 Note, and for so long thereafter as any principal and accrued but unpaid interest under the January 2019 Note remains outstanding, the holder of the January 2019 Note may convert such holder’s January 2019 Note, in whole or in part, into a number of shares of the Company’s common stock equal to (i) the principal amount being converted, together with any accrued or unpaid interest thereon, divided by (ii) the conversion price in effect at the time of conversion.  The January 2019 Note has customary conversion blockers at 4.99% and 9.99% unless otherwise agreed to by the Company and the holder. It was concluded that the conversion option was beneficial. Accordingly, the Company recorded a debt discount in the amount of $800,000, upon stockholder approval of the conversion feature, which occurred on May 30, 2019.  The discount represented the fair value of the incremental shares up to the proceeds received from the convertible note.  The Company amortized $60,000 and $117,000 of the debt discount to interest expense for the three and nine months ended September 30, 2019, respectively.

The January 2019 Note contains customary events of default, including the suspension or failure of the Company’s common stock to be traded on a trading platform, the Company’s failure to pay interest or principal when due, or if the Company files for bankruptcy or takes some other similar action for the benefit of creditors. In the event of any default under the January 2019 Note, the holder may accelerate all outstanding interest and principal due on the January 2019 Note.

On July 23, 2019, the Company entered into Amendment No. 1 to the January 2019 Note (“Amended Note”). Under the terms of the amendment, the maturity date of the January 2019 Note was extended from July 29, 2020 to July 31, 2022.  All other terms of the January 2019 Note remain the same.  The Amended Note was accounted for as an extinguishment of the January 2019 Note as the change in the fair value of the embedded conversion option featured in the January 2019 Note immediately before and after the amendment exceeded 10% of the carrying amount of the January 2019 Note. According, the Company recorded a loss on the constructive extinguishment of this debt in the amount of $840,000.  The fair value of the Amended Note, which amounted to $1,473,000 was recorded as liability.  The Company also evaluated the conversion option embedded in the Amended Note and determined it was beneficial. Accordingly, the Company recorded a debt discount in the amount of $556,000 on the Amended Note.  The Company amortized $20,000 and $57,000 of the debt discount for the January 2019 Note to interest expense for the three and nine months ended September 30, 2019, respectively. The Company utilized a Monte Carlo simulation model to determine the fair value of the Amended Note. The key assumptions used in the simulation model were:

Stock price at date of issuance	$	3.05
Exercise price(1)	$	1.80
Risk-free interest rate		1.8	%
Expected dividend yield		--
Expected term (in years)		3.02
Expected volatility		93	%

(1) For the exercise price, the model inputs also accounted for the fair value protection under the Amended Note, which allows for the holder to convert at the lower of $1.80 share or 90% of the listed price of the stock on the day of conversion, whichever is lower (subject to a floor of $0.50).

During the quarter ended September 30, 2019, the holder converted a portion of the face value of the note into shares of common stock.  In total, $216,000 was converted into 120,000 shares of common stock.  Additionally, the unamortized premium for the portion of the note that was converted of $30,000 was recorded to interest expense during the quarter ended September 30, 2019. 

On July 23, 2019, the Company entered into a private placement with the Accredited Investor, pursuant to which the Company issued and sold to such investor an unsecured convertible promissory note in the original principal amount of $1,000,000 (the “July 2019 Note”).   After six months and subject to the receipt of stockholder approval of the conversion feature of the July 2019 Note, such note is convertible into shares of the Company's common stock at a conversion price equal to the lower of (a) $1.80 per share or (b) 90% of the closing sale price of the Company’s common stock on the date of conversion (subject to a floor conversion price of $0.50).  The July 2019 Note bears interest at the rate of twenty-four percent (24%) per annum and is payable quarterly in arrears.  Unless sooner converted in the manner described below, all principal under the July 2019 Note, together with all accrued and unpaid interest thereupon, will be due and payable three years from the date of the issuance on July 31, 2022.  However, if stockholder approval of the conversion feature of the July 2019 Note is not obtained at the Company’s next annual meeting of stockholders (expected to be in the second quarter of 2020), the maturity date will accelerate to the date that is fourteen days after the next annual meeting. 

The July 2019 Note may be prepaid without penalty at any time after it becomes convertible (at which time the holder will have the right to convert it before prepayment thereof). On the date that is six months after the issuance of the July 2019 Note and after receiving stockholder approval of the conversion feature described above, the holder may convert the July 2019 Note, in whole or in part, into a number of shares of the Company’s common stock equal to (i) the principal amount being converted, together with any accrued or unpaid interest thereon, divided by (ii) the conversion price in effect at the time of conversion.  The Company has accounted for the July 2019 Note as a debt instrument until such time the conversion feature is approved by the Company’s stockholders. The Company will account for the conversion feature at the time of its effectiveness if approved.

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5. Leases

The Company determines whether a contract contains a lease at inception.  Our material operating lease consists of office space which has a remaining term of 4.7 years.  Generally, the lease term is the minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods.

Operating Leases

Operating lease assets and liabilities are recognized at the lease commencement date.  Operating lease liabilities represent the present value of remaining minimum lease payments.  Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets.  To determine the present value of lease payments not yet paid, we use the Company’s cost of capital based on existing debt instruments.  Our material leases typically contain rent escalations over the lease term.  We recognize expense for these leases on a straight-line basis over the lease term.

The following summarizes the Company’s operating leases:

	September 30, 2019
Right-of-use operating lease assets, net	$	887,000
Current lease liability		110,000
Non-current lease liability		794,000

	September 30, 2019
Weighted average remaining lease term	4.7
Discount rate	22%

Maturities of lease liabilities by calendar year for our operating leases are as follows:

Period of October 1, 2019 through December 31, 2019	$	74,000
2020		301,000
2021		310,000
2022		319,000
2023		329,000
2024		138,000
Total lease payments	$	1,471,000
Less: imputed interest		(567,000	)
Present value of operating lease liabilities	$	904,000

Statement of Cash Flows

In January 2019, the Company signed an amendment to its lease for office space at its corporate headquarters in Rancho Cordova, CA.  The amendment was accounted for as a modification and resulted in a right-of-use asset of $966,000 being recognized as a non-cash addition on the date of the amendment.  Cash paid for amounts included in the measurement of operating lease liabilities were $74,000 and $217,000 during the three and nine months ended September 30, 2019 and is included in cash flows from operating activities.

Operating Lease Costs

Operating lease costs were $103,000 and $309,000 during the three and nine months ended September 30, 2019. These costs are primarily related to long-term operating leases, but also include immaterial amounts for variable lease costs and short term leases with terms greater than 30 days.

Finance Leases

Finance leases are included in equipment and other current and non-current liabilities in the accompanying condensed consolidated balance sheet.  The amortization and interest expense are included in general and administrative expense and interest expense, respectively in the accompanying statements of operations.  These leases are not material as of September 30, 2019.

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6. Commitments and Contingencies

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 September 30, 2019.

Warranty

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

The warranty liability is included in other current liabilities in the unaudited condensed consolidated balance sheets. The change in the warranty liability for the nine months ended September 30, 2019 is summarized in the following table:

Balance at December 31, 2018	$	186,000
Warranties issued during the period		242,000
Settlements made during the period		(141,000	)
Changes in liability for pre-existing warranties during the period		(39,000	)
Balance at September 30, 2019	$	248,000

Contingencies and Restricted Cash

In fiscal 2016, the Company signed an engagement letter with a strategic consulting firm (Mavericks).  Included in the engagement letter was a success fee due upon the successful conclusion of certain transactions.  On May 4, 2017, a lawsuit was filed against the Company and its CEO by the consulting firm as the consulting firm argues that it is owed a transaction fee of $1,000,000 (plus interest of approximately $300,000 as of June 30, 2019) under the terms of the engagement letter due to the conversion of the Boyalife debentures in August 2016.  In October 2017, to streamline the case by providing for the dismissal of claims against the Company’s CEO based on alter ego theories and without acknowledging any liability, the Company deposited $1,000,000 with the Court and has recorded this deposit as restricted cash in the accompanying condensed consolidated Balance Sheet.  The Company filed a Motion for Summary Judgment, which was denied by the Court on June 26, 2018. On September 24, 2018, Mavericks filed an amended complaint, reinstating the Company’s CEO as a named defendant, as well as Boyalife Investment, Inc. (a dissolved company) and Boyalife (Hong Kong) Limited under new theories of liability, namely intentional interference with contract and inducement of breach of contract.  On July 22, 2019, Mavericks filed a Request for Dismissal requesting the Court to dismiss the served Boyalife entities and the Company CEO as well as the intentional interference with performance of contract and inducing breach of contract causes of action from the lawsuit.  As such, the only remaining claim at present is the original breach of contract claim against the Company.  On August 6, 2019, a trial starting date was set for November 18, 2019. A mandatory settlement conference was held November 13, 2019 with the Court. No settlement was reached. The Company denies liability and intends to defend the lawsuit vigorously.  No accrual has been recorded for this contingent liability as of September 30, 2019.

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 September 30, 2019, 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.

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7. Derivative Obligations

Series A Warrants

Series A warrants to purchase 40,442 common shares were issued and vested during the year ended June 30, 2016. At the time of issuance, the Company determined that as 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 with the following assumptions:

	Series A
	September 30, 2019	December 31, 2018
Market price of common stock	$6.63	$2.70
Expected volatility	93%	94%
Contractual term (years)	1.4	2.2
Discount rate	1.70%	2.48%
Dividend rate	0%	0%
Exercise price	$80.00	$80.00

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 of $2,000 during the three and nine months ended September 30, 2019, and a gain of $24,000 and $591,000 for the three and nine months ended September 30, 2018, respectively, representing the change in the fair value of the derivative liability, in the accompanying condensed 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 September 30, 2019 and December 31, 2018, included in other non-current liabilities:

	Derivative Obligation
	September 30, 2019		December 31, 2018
Balance	$	3,000	$	1,000
Level 1	$	--	$	--
Level 2	$	--	$	--
Level 3	$	3,000	$	1,000

The following table reflects the change in fair value of the Company’s derivative liabilities for the nine months ended September 30, 2019:

	Amount
Balance – December 31, 2018	$	1,000
Change in fair value of derivative obligation		2,000
Balance – September 30, 2019	$	3,000

8. Stockholders’ Equity

On April 18, 2019, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company agreed to issue and sell to such investor (the “April Offering”) 444,445 pre-funded warrants to purchase shares of the Company’s common stock for a purchase price of $1.70 per pre-funded warrant. The gross proceeds to the Company, excluding the proceeds, if any, from the exercise of the pre-funded warrants, was approximately $756,000. The April Offering closed on April 26, 2019 and the pre-funded warrants were accounted for as equity by the Company.

Each pre-funded warrant is immediately exercisable for one share of common stock at an exercise price of $0.10 per share and will remain exercisable until exercised in full. A holder of a pre-funded warrant will not have the right to exercise any portion of its warrant if the holder, together with its affiliates, would beneficially own in excess of 4.99% or 9.99%, as applicable, of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that the holder may increase or decrease the Beneficial Ownership Limitation, although any increase will not be effective until the 61st day after a notice of increase is delivered to the Company and the holder may not increase the Beneficial Ownership Limitation in excess of 9.99%.

Subject to certain exceptions, in the event the Company sells or issues any shares of common stock or common stock equivalents at a lower price during the period beginning on the closing date of the April Offering and ending on the date that is three-hundred and sixty-five (365) days following such date, the Company is required to issue the investor a number of shares of common stock (or additional pre-funded warrants to purchase shares of common stock) equal to the number of shares the investor would have received had the purchase price for such shares been at such lower purchase price.

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Stock Based Compensation

The Company recorded stock-based compensation of $253,000 and $459,000 for the three and nine months ended September 30, 2019, and $175,000 and $475,000 for the three and nine months ended September 30, 2018, respectively, as comprised of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Cost of revenues	$	1,000	$	3,000	$	2,000	$	9,000
Sales and marketing		110,000		11,000		166,000		29,000
Research and development		38,000		30,000		75,000		86,000
General and administrative		104,000		131,000		216,000		351,000
	$	253,000	$	175,000	$	459,000	$	475,000

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 December 31, 2018		302,368		$	13.99
Granted		10,200		$	4.38
Forfeited		(16,539	)	$	11.50
Outstanding at September 30, 2019		296,029		$	13.80		8.6	$	763,499
Vested and expected to vest at September 30, 2019		215,932		$	15.95		8.4	$	525,700
Exercisable at September 30, 2019		94,978		$	25.70		7.6	$	171,726

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 exercised during the nine months ended September 30, 2019.

Warrants

A summary of warrant activity for the nine months ended September 30, 2019 follows:

	Number of Shares			Weighted-Average Exercise Price Per Share
Balance at December 31, 2018		1,726,523		$	29.88
Warrants granted(1)		444,445		$	0.10
Warrants expired		(19,637	)	$	417.00
Warrants exercised		(416,500	)	$	0.10
Outstanding at September 30, 2019		1,734,831		$	25.02
Exercisable at September 30, 2019		1,664,978		$	22.72

_______________________

(1) See Footnote 1 of the Notes to the Condensed Consolidated Financial Statements.

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9. Segment Reporting

The Company has two reportable segments, which are the same as its operating segments:

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

The Clinical Development Segment utilizes autologous stem cell-based therapeutics in the vascular and orthopedic markets.

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

	Three Months Ended September 30, 2019
	Device		Clinical Development			Total
Net revenues	$	4,045,000	$	13,000		$	4,058,000
Cost of revenues		2,126,000		37,000			2,163,000
Gross profit		1,919,000		(24,000	)		1,895,000
Operating expenses		1,871,000		354,000			2,225,000
Operating income / (loss)	$	48,000	$	(378,000	)	$	(330,000	)
Depreciation and amortization	$	149,000	$	53,000		$	202,000
Stock-based compensation expense	$	201,000	$	52,000		$	253,000

	Three Months Ended September 30, 2018
	Device			Clinical Development			Total
Net revenues	$	3,059,000		$	54,000		$	3,113,000
Cost of revenues		2,383,000			75,000			2,458,000
Gross profit		676,000			(21,000	)		655,000
Operating expenses		1,969,000			621,000			2,590,000
Operating loss	$	(1,293,000	)	$	(642,000	)	$	(1,935,000	)
Depreciation and amortization	$	100,000		$	74,000		$	174,000
Stock-based compensation expense	$	8,000		$	167,000		$	175,000

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	Nine Months Ended September 30, 2019
	Device			Clinical Development			Total
Net revenues	$	11,256,000		$	69,000		$	11,325,000
Cost of revenues		6,082,000			138,000			6,220,000
Gross profit		5,174,000			(69,000	)		5,105,000
Operating expenses		5,295,000			1,307,000			6,602,000
Operating loss	$	(121,000	)	$	(1,376,000	)	$	(1,497,000	)
Depreciation and amortization	$	381,000		$	223,000		$	604,000
Stock-based compensation expense	$	294,000		$	165,000		$	459,000
Goodwill	$	781,000		$	--		$	781,000
Total assets	$	15,620,000		$	1,971,000		$	17,591,000

	Nine Months Ended September 30, 2018
	Device			Clinical Development			Total
Net revenues	$	6,822,000		$	162,000		$	6,984,000
Cost of revenues		5,419,000			195,000			5,614,000
Gross profit		1,403,000			(33,000	)		1,370,000
Operating expenses		6,858,000			30,208,000			37,066,000
Operating loss	$	(5,455,000	)	$	(30,241,000	)	$	(35,696,000	)
Depreciation and amortization	$	296,000		$	210,000		$	506,000
Impairment Charges	$	--		$	27,202,000		$	27,202,000
Stock-based compensation expense	$	88,000		$	387,000		$	475,000
Total assets	$	10,213,000		$	11,386,000		$	21,599,000

10. Major Customers and Accounts Receivable

The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable as follows:

For the three months ended September 30, 2019 and 2018, one customer accounted for 27% and 15% of revenue, while a second customer accounted for 13% and 15% of revenue, respectively. For the nine months ended September 30, 2019 and 2018, one customer accounted for 29% and 19% of revenue, while another customer accounted for 13% and 7% of revenue, respectively.

At September 30, 2019, three customers accounted for 72% of accounts receivable. At December 31, 2018 four customers accounted for 77% of accounts receivable.

11. Subsequent Events

On October 30, 2019, the Board of Directors of ThermoGenesis Holdings approved an amendment to the Company’s Sixth Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), to change the Company’s name from Cesca Therapeutics Inc. to ThermoGenesis Holdings, Inc. effective as of November 1, 2019. Accordingly, on October 30, 2019, the Company filed a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware, which was effective and which made the name change effective as of 12:01 a.m. on November 1, 2019.

On October 21, 2019, the Company entered into a Joint Venture Agreement with Healthbanks Biotech (USA) Inc., a stem cell bank network (Healthbanks), under which the Company and Healthbanks agreed to form a new company named ImmuneCyte Life Sciences Inc. (ImmuneCyte), which will develop, own and operate an immune cell banking business. Under the Joint Venture Agreement (the “JV Agreement”), the Company and Healthbanks have organized ImmuneCyte and have agreed to work to make capital contributions and enter into ancillary agreements, all as specified in the JV Agreement, on or before December 31, 2019.  The Company will initially own a 20% equity interest in ImmuneCyte. The Company’s principal contribution to ImmuneCyte will be a supply agreement under which ImmuneCyte will have the exclusive right to purchase the Company’s proprietary cell processing equipment in the immune cell banking business and a non-exclusive right to purchase it for other cell-based contract development and manufacturing (CMO/CDMO) services at a price equal to 115% of the Company’s cost. The Company will also contribute to ImmuneCyte intellectual property and trademarks relating to the Company’s clinical development assets as a result of the Company’s decision to discontinue its clinical development program. Healthbanks will contribute to ImmuneCyte a paid-up, royalty free license to use its proprietary business management system, customer relationship management software, and laboratory information statement, and it will also make available a $1.0 million unsecured, non-convertible line of credit to ImmuneCyte to provide initial operating capital. Healthbanks is a subsidiary of Boyalife Group, Inc. (USA), an affiliate of Boyalife (Hong Kong) Limited, the largest stockholder of Cesca, and Dr. Xiaochun (Chris) Xu, the Company’s CEO and Chairman.  The accounting impact of the transaction will be analyzed in the fourth quarter. 

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

Forward-Looking Statements

This report contains forward-looking statements.  The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained herein.  When used in this report, the words "anticipate," "believe," "estimate," "expect" and similar expressions as they relate to the Company or its management are intended to identify such forward-looking statements.  Actual results, performance or achievements could differ materially from the results expressed in, or implied by these forward-looking statements. Readers should be aware of important factors that, in some cases, have affected, and, in the future, could affect actual results, and may cause actual results for the three and nine months ended September 30, 2019 and beyond to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company.  These factors include without limitation, the ability to obtain capital and other financing in the amounts and at the times needed to launch new products, market acceptance of new products, the nature and timing of regulatory approvals for both new products and existing products for which the Company proposes new claims, realization of forecasted revenues, expenses and income, initiatives by competitors, price pressures, failure to meet FDA regulated requirements governing the Company’s products and operations (including the potential for product recalls associated with such regulations), risks associated with initiating manufacturing for new products, failure to meet Foreign Corrupt Practice Act regulations, legal proceedings, and other risk factors listed from time to time in our reports with the Securities and Exchange Commission (SEC), including, in particular, those set forth in the Company’s Form 10-K for the year ended December 31, 2018. 

Business Overview

ThermoGenesis Holdings, Inc. (“ThermoGenesis Holdings”, the “Company”, “our”, or “we”) develops and commercializes a range of automated technologies for cell-banking, cell-processing, and cell-based therapeutics.  Since the 1990’s ThermoGenesis Holdings has been a pioneer in, and a leading provider of automated systems that isolate, purify and cryogenically store units of hematopoietic stem and progenitor cells for the cord blood banking industry.  In July 2017, ThermoGenesis Holdings’ subsidiary, ThermoGenesis Corp., completed a strategic acquisition of the business and substantially all of the assets of SynGen Inc. (SynGen), a research and development company for automated cellular processing. 

Following the acquisition of SynGen, we utilized the SynGen assets, together with our own proprietary technology, to develop a novel proprietary CAR-TXpress™ platform that addresses the critical unmet need for better efficiency and cost-effectiveness for the emerging immune-oncology field, in particular, the chimeric antigen receptor (CAR) T cell market. Since the first quarter of 2018, the Company developed and launched various X-Series^® products, including: X-Lab^®, X-Wash^®, X-Mini^® and X-BACS™.

ThermoGenesis Holdings now has two separately reported business segments: A “Device Segment” and a “Clinical Development Segment.” The Device Segment develops and commercializes automated systems that used for, clinical grade cell-banking, point-of-care applications, and large scale cell processing. The Clinical Development Segment is developing autologous (utilizing the patient’s own cells) cell-based therapeutics that address significant unmet medical needs for the vascular, cardiology and orthopedic markets.

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ThermoGenesis Holdings’ Device Segment

ThermoGenesis Holdings’ Device Segment offers automated devices and technologies for cell-banking, point-of-care applications, and large scale cell processing. The automated devices include:

Clinical Bio-Banking Applications:

● AXP^® System – The innovative AXP System defines a new processing standard for isolating and retrieving over 97% of the stem and progenitor cells from collections of umbilical cord blood in an automated, fully closed, sterile system in 30 minutes. AXP is self-powered, microprocessor-controlled, and contains flow control optical sensors to achieve precise separation.

● BioArchive^® Cryopreservation System – The BioArchive Cryopreservation System is the industry’s leading, fully automated, robotic, liquid nitrogen controlled-rate-freezing (CRF) and cryogenic storage system for stem cell samples and clinical products. Using proven, computer-controlled technology, it provides the ultimate performance and protection for today’s invaluable cord blood samples and future cell therapeutic products. BioArchive is the preferred system for the highest quality cord blood banks worldwide. A complete technical Master-File has been provided to the FDA to support those highest quality cord blood banks which have been able to qualify for, and obtain, a Biological License from the FDA to allow their cord blood units to be used to treat patients with blood cancers.

Point-of-Care Applications:

● PXP^® System – The PXP System is our newly launched point-of-care device. PXP is an automated, closed system that harvests a precise volume of cell concentrate from bone marrow aspirates. PXP can generate a concentration of bone marrow in less than 20 minutes, with consistently high MNC and CD34⁺ stem cell progenitor recovery rates and greater than 98% depletion of contaminating red blood cells (RBCs). Processing data is captured using our proprietary DataTrak™ software to assist with Good Manufacturing Practice (GMP) process monitoring and reporting information.

Large Scale Cell Processing Applications:

● X-Lab^® System for Cell Isolation – a semi-automated, functionally-closed, ficoll-free, system for the rapid isolation of mononuclear cells (MNCs) from collected units of peripheral blood, cord blood, bone marrow aspirate or leukapheresis. The Company had filed a Device Master File (MAF) with the FDA for the X-Lab. The MAF contains all the relevant information that the FDA will need to allow principal investigators to include ThermoGenesis Holdings’ systems in their investigational new drug applications.

● X-Wash^® System for Washing and Reformulation – a semi-automated, functionally-closed system that separates, washes, and volume-reduces units of fresh or thawed units of blood, bone marrow, leukapheresis or cell cultures and presents these washed cells in a predetermined small volume.

● X-BACS™ System for Cell Purification – a semi-automated, functionally-closed system employs a microbubble/antibody reagent to isolate target cells by buoyancy-activated cell sorting (BACS). These microbubble/antibody reagents bind to user-selected target cells to increase their buoyancy and provide a complete separation from non-target cells during centrifugation and allowing the harvest of a highly purified population of target cells, with high recovery efficiency and cell viability.

ThermoGenesis Holdings’ Clinical Development Segment

Using our proprietary automated point-of-care cellular processing technologies, ThermoGenesis Holdings’ Clinical Development Segment utilizes autologous (utilizing the patient’s own cells) stem cell-based therapeutics for the vascular and orthopedic markets that include:

● Cell Manufacturing 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 or a large scale batch process. Patient samples, batch samples, and therapeutic aliquots are all labeled in accordance with ISBT 128 and stored in our own cryogenics’ facility. In partnership with Fortis Healthcare we also operate commercial service programs supporting bone marrow transplantation (hematopoietic stem cell transplantation) for hematological and oncological disorders.

● Cell Banking Services – Our NovaCord Cord Blood Bank and Repository is a licensed umbilical cord blood and tissue bank.  It is a collaborative enterprise between TotipotentRX and Fortis Healthcare. The GMP facility of Novacord is located inside multi-super specialty Fortis Memorial Research Institute, in Gurgaon, India where expertise is available for both stem cell banking and treating patients using advanced cellular therapies.

Critical Accounting Policies

Management’s discussion and analysis of its financial condition and results of operations is based upon the condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. For a full discussion of our accounting estimates and assumptions that have been identified as critical in the preparation of the Company’s condensed consolidated financial statements, please refer to ThermoGenesis Holdings’ 2018 Form 10-K for the year ended December 31, 2018.

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Results of Operations for the Three Months Ended September 30, 2019 as Compared to the Three Months Ended September 30, 2018

Net Revenues

Consolidated net revenues for the three months ended September 30, 2019 were $4,058,000, compared to $3,113,000 for the three months ended September 30, 2018, an increase of $945,000.  The increase was driven by AXP and CAR-TXpress sales in the Device Segment.  The AXP increase was driven by approximately 270 more cases sold to domestic end users in the current quarter (resulting in approximately $700,000 more in AXP disposables revenue).  CAR-TXpress sales increased primarily due to a new customer that adopted the system and purchased approximately $300,000 of devices and disposables in the current quarter.  Sales in the Clinical Development Segment declined as compared to prior year due to the loss of a customer for its manual disposables. 

	September 30, 2019		September 30, 2018
Device Segment:
AXP	$	2,306,000	$	1,466,000
BioArchive		594,000		799,000
Manual Disposables		212,000		254,000
CAR-TXpress		914,000		517,000
Other		19,000		23,000
		4,045,000		3,059,000
Clinical Development Segment:
Disposables		9,000		48,000
Other		4,000		6,000
		13,000		54,000
	$	4,058,000	$	3,113,000

Gross Profit

The Company’s gross profit was $1,895,000 or 47% of net revenues for the three months ended September 30, 2019, compared to $655,000 or 21%, an increase of $1,240,000 for three months ended September 30, 2018.  The increase was due to an $800,000 increase in AXP disposable sales, generating approximately $325,000 more gross profit and lower AXP disposable costs through price efficiencies from contract manufacturers decreased cost of goods expense related to AXP disposables by approximately $350,000.  Prior year also had a slow moving inventory reserve of approximately $125,000 for an obsolete product line, while the current year had no significant inventory reserves.  The remainder of the increase is due primarily to additional sales of CAR-TXpress which resulted in approximately $150,000 more gross profit. 

Sales and Marketing Expenses

Consolidated sales and marketing expenses were $502,000 for the three months ended September 30, 2019, as compared to $364,000 for the three months ended September 30, 2018, an increase of $138,000 or 38%. The variance was driven by stock compensation expense of approximately $110,000 for performance goals achieved by employees during the current quarter.

Research and Development Expenses

Consolidated research and development expenses were $584,000 for the three months ended September 30, 2019, compared to $611,000 for the three months ended September 30, 2018, a decrease of $27,000 or 4%. The slight decrease is due to lower payroll related expenses as the result of having an open position for part of the current quarter.

General and Administrative Expenses

Consolidated general and administrative expenses for the three months ended September 30, 2019 were $1,139,000, compared to $1,615,000 for the three months ended September 30, 2018, a decrease of $476,000 or 30%. The decrease is driven by the decline in personnel costs and payroll related expenses of approximately $260,000 as a result of eliminating certain senior management positions in 2019, reducing payroll expenses in India of approximately $75,000 due to a reorganization in the first quarter of 2019 and recording a bad debt expense of approximately $60,000 in the prior year due from one international customer.

Interest Expense

Interest expense increased to $1,188,000 for the three months ended September 30, 2019 as compared to $835,000 for the three months ended September 30, 2018, an increase of $353,000.  The increase is due to interest recorded and the amortization of the debt discount on the beneficial conversion feature related to the January 2019 Note and Amended Note of approximately $500,000, additional interest expense and amortization of debt discount on the beneficial conversion feature related to the Revolving Credit Agreement with Boyalife of $200,000 and July 2019 Note interest of $46,000.

Loss on Extinguishment of Debt

The Company recorded a loss on extinguishment of debt of $840,000for the three months ended September 30, 2019 as compared to $0 for the three months ended September 30, 2018.  The increase is due to the loss on the extinguishment of the January 2019 Note. See Note 4 for additional information.

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Results of Operations for the Nine Months Ended September 30, 2019 as Compared to the Nine Months Ended September 30, 2018

Net Revenues

Consolidated net revenues for the nine months ended September 30, 2019 were $11,325,000 compared to $6,984,000 for the nine months ended September 30, 2018, an increase of $4,341,000 or 62%. AXP revenues were the largest driver of the increase, due to 688 more cases sold to a distributor in China, 670 more cases sold to domestic end users and 106 cases sold to an end user in India in the current year (resulting in approximately $3,000,000 more in AXP disposables revenue). Additionally, AXP device sales increased over $400,000 in the first nine months of 2019 as compared to the same period last year. This increase was driven by customers upgrading to AXP II devices in the current year. CAR-TXpress sales increased by $824,000 due to relaunching the product line in the second half of 2018. Sales in the Clinical Development Segment were $100,000 less than prior year due to reduced clinical services in India.

	September 30, 2019		September 30, 2018
Device Segment:
AXP	$	6,710,000	$	3,131,000
BioArchive		2,391,000		2,326,000
Manual Disposables		711,000		716,000
CAR-TXpress		1,404,000		547,000
Other		40,000		102,000
		11,256,000		6,822,000
Clinical Development Segment:
Disposables		53,000		132,000
Other		16,000		30,000
		69,000		162,000
	$	11,325,000	$	6,984,000

Gross Profit

The Company’s gross profit was $5,105,000 or 45% of net revenues for the nine months ended September 30, 2019, compared to $1,370,000 or 20%, an increase of $3,735,000 for nine months ended September 30, 2018.  The increase was primarily due to AXP sales, generating approximately $1,500,000 more in gross profit from disposables and approximately $150,000 from sales of AXP II devices.  Additionally, lower AXP disposable costs through price efficiencies from contract manufacturers decreased cost of goods expense for AXP disposables by approximately $1,100,000 and reduced overhead expenses of approximately $450,000 driven by the June 2018 reorganization.  The remainder of the increase is due primarily to additional sales of CAR-TXpress which resulted in approximately $400,000 more gross profit.

Sales and Marketing Expenses

Consolidated sales and marketing expenses were $1,227,000 for the nine months ended September 30, 2019, as compared to $1,048,000 for the nine months ended September 30, 2018, an increase of $179,000 or 17%. The increase was driven by stock compensation expense of approximately $140,000 for performance awards granted and achieved by employees during the current year.

Research and Development Expenses

Consolidated research and development expenses were $1,758,000 for the nine months ended September 30, 2019, compared to $2,560,000 for the nine months ended September 30, 2018, a decrease of $802,000 or 31%. Research and development in the Device Segment decreased by $547,000 and the Clinical Development Segment decreased by $255,000. The decrease in both segments is primarily due to a decline in personnel costs related to the June 2018 reorganization.

General and Administrative Expenses

Consolidated general and administrative expenses for the nine months ended September 30, 2019 were $3,617,000, compared to $6,256,000 for the nine months ended September 30, 2018, a decrease of $2,639,000 or 42%. The decrease was driven by the decline in personnel costs associated with the June 2018 reorganization and other headcount reductions of approximately $750,000, severance expenses of $250,000, a one-time legal settlement of $150,000 and a loss on the disposal of fixed assets of $420,000 in the nine months ended September 30, 2018. The remainder of the decrease was due to a reduction of approximately $270,000 as the result of the Company eliminating the management bonus plan in 2019, reduced legal expense of approximately $100,000 in the current year, reduced travel expenses of approximately $100,000 in the current year and bad debt expense of approximately $60,000 in the prior year due to one international customer. Additionally, India general and administrative expenses were approximately $110,000 less in the current year, due to payroll expenses in from a reorganization there in the first quarter of 2019 and settlement of an outstanding debt.

Impairment Charges

The Company incurred impairment charges of $0 during the nine months ended September 30, 2019 as compared to impairment charges of $27,202,000 during the nine months ended September 30, 2018. During the nine months ended September 30, 2018, the Company experienced a significant and sustained decline in its stock price resulting in its market capitalization falling significantly below the recorded value of its consolidated assets. The Company performed a quantitative assessment which determined that the carrying amount for the Company’s goodwill and indefinite lived intangible assets relating to the clinical protocols exceeded its estimated fair value. As a result, impairment charges of $12,695,000 to goodwill and $14,507,000 to the intangible assets were recorded during the nine months ended September 30, 2018 to the Clinical Development Segment.

Interest Expense

Interest expense increased to $3,531,000 for the nine months ended September 30, 2019 as compared to $1,928,000 for the nine months ended September 30, 2018, a difference of $1,603,000.  The increase is driven by interest recorded and the amortization of the debt discount and interest expense related to the January 2019 Note and Amended Note of approximately $1,650,000, as well as approximately $1,200,000 more in interest and amortization of the debt discount on the beneficial conversion feature related to the Revolving Credit Agreement with Boyalife, for which amortization started in May 2018 and July 2019 Note interest of $46,000.

24

Loss on Extinguishment of Debt

The Company recorded a loss of extinguishment of debt of $840,000 for the nine months ended September 30, 2019 as compared to $0 for the nine months ended September 30, 2018.  The increase is due to the loss on the extinguishment of the January 2019 Note.  See Note 4 for additional information.

Benefit for Income Taxes

For the nine months ended September 30, 2019, the Company has no income tax benefit compared to $3,451,000 for the nine months ended September 30, 2018. The benefit for income tax for the nine months ended September 30, 2018 was due to the impairment of the indefinite lived intangible assets for the clinical protocols and goodwill. The Company’s deferred tax liability is tied to the intangible assets and goodwill.

Liquidity and Capital Resources

At September 30, 2019, the Company had cash and cash equivalents of $2,800,000 and working capital of $5,435,000.  This compares to cash and cash equivalents of $2,400,000 and working capital of $2,261,000 at December 31, 2018.  We have primarily financed operations through private and public placement of equity securities and our line of credit facility. 

The Company has a Revolving Credit Agreement with Boyalife Asset Holding II, Inc. As of September 30, 2019, the Company had drawn down $8,713,000 of the $10,000,000 available under the Credit Agreement. Future draw-downs may be limited for various reasons including default or foreign government policies that restrict or prohibit transferring funds. At the time of this filing, we are currently unable to draw down on the line of credit. This may change in the near future but there is no assurance that the line of credit will become available at such time when it is needed. Boyalife Asset Holding 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.

The Company has incurred recurring operating losses and as of September 30, 2019 had an accumulated deficit of $232,885,000. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance date. The Company anticipates requiring additional capital to grow the business, to fund other operating expenses and to make interest payments on the line of credit with Boyalife.  The Company’s ability to fund its cash needs is subject to various risks, many of which are beyond its control. The Company may seek additional funding through bank borrowings or public or private sales of debt or equity securities or strategic partnerships. The Company cannot guarantee that such funding will be available on a timely basis, in needed quantities or on terms favorable to us, if at all.

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. The Company calculates adjusted EBITDA as income from operations less depreciation, amortization, stock compensation and impairment of intangible assets. This financial measure is not a measure of financial performance under US GAAP and should not be considered in isolation or as a substitute for loss as a measure of performance. The calculation of this non-GAAP measure may not be comparable to similarly titled measures used by other companies. Reconciliations to the most directly comparable GAAP measure are provided below.

25

Three months ended September 30, 2019 and 2018, respectively:

	Three Months Ended September 30,
	2019			2018
Net loss	$	(2,373,000	)	$	(2,764,000	)
Deduct:
Interest expense		(1,188,000	)		(835,000	)
Loss on extinguishment of debt		(840,000	)		--
Fair value change of derivative instruments and other		(15,000	)		6,000
Benefit for income taxes		--			--
Loss from operations	$	(330,000	)	$	(1,935,000	)
Add:
Depreciation and amortization		202,000			174,000
Stock-based compensation expense		253,000			175,000
Impairment of intangible asset		--			--
Adjusted EBITDA	$	125,000		$	(1,586,000	)

The adjusted EBITDA was $125,000 for the three months ended September 30, 2019 compared to a loss of $1,586,000 for the three months ended September 30, 2018.  The adjusted EBITDA increase as compared to the third quarter in the prior year was due to $1,240,000 in additional gross profit as the result of higher sales, while decreasing overhead expenses and lower disposable costs through price efficiencies from contract manufacturers.  Additionally, the Company decreased salary related expenses by approximately $300,000 in the current quarter as a result of the elimination of some positions in October 2018.  Additionally, we reduced payroll expenses in India by approximately $75,000 due to a reorganization in the first quarter of 2019 and bad debt expense of approximately $60,000 in the prior year due from one international customer.

Nine months ended September 30, 2019 and 2018, respectively:

	Nine Months Ended September 30,
	2019			2018
Net Loss	$	(5,895,000	)	$	(33,646,000	)
Deduct:
Interest expense		(3,531,000	)		(1,928,000	)
Loss on extinguishment of debt		(840,000	)		--
Fair value change of derivative instruments and other		(27,000	)		529,000
Benefit for income taxes		--			3,451,000
Loss from operations	$	(1,497,000	)	$	(35,698,000	)
Add:
Depreciation and amortization		604,000			506,000
Stock-based compensation expense		459,000			475,000
Impairment of intangible asset		--			27,202,000
Adjusted EBITDA	$	(434,000	)	$	(7,515,000	)

The adjusted EBITDA loss was $434,000 for the nine months ended September 30, 2019 compared to a loss of $7,515,000 for the nine months ended September 30, 2018.  The adjusted EBITDA increase for the nine months ended September 30, 2019 as compared to the prior year was due to $3,735,000 in additional gross profit as the result of higher sales, while decreasing overhead expenses and lowering disposable costs through price efficiencies from contract manufacturers.  Additionally, the Company decreased salaried related expenses by approximately $1,500,000 as a result of the June 2018 reorganization and the elimination of other positions during 2018.  Prior year nine months ended September 30, 2018 also included severance expenses of $250,000, a one-time legal settlement of $150,000 and a loss on the disposal of fixed assets of $420,000.  Finally, the Company eliminated the management bonus program for 2019, resulting in savings of approximately $350,000 in the current year.

26

Off-Balance Sheet Arrangements

As of September 30, 2019, the Company had no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

ThermoGenesis Holdings is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and is not required to provide information under this item.

Item 4. Controls and Procedures

ThermoGenesis Holdings carried out an evaluation, under the supervision, and with the participation of management, including both the Company’s Chief Executive Officer (principal executive officer) and Principal Accounting Officer (principal financial officer), of the effectiveness of the design and operation of ThermoGenesis Holdings’ disclosure controls and procedures (as defined by Exchange Act Rule 13a-15(e) and 15d-15(e)) as of the end of our fiscal quarter pursuant to Exchange Act Rule 13a-15. Disclosure controls and procedures cover controls and other procedures that are designed to ensure that information required to be disclosed by the Company 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 Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon that evaluation, ThermoGenesis Holdings’ Chief Executive Officer and Principal Accounting Officer have both concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2019.

There were no changes in ThermoGenesis Holdings’ internal controls over financial reporting that occurred during the three months ended September 30, 2019 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting. Management believes 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.

27

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

In the normal course of operations, the Company may have disagreements or disputes with distributors, vendors or employees.  Such potential disputes are seen by management as a normal part of business.  Except as described below, there have been no material changes since the disclosures set forth in the Company’s Form 10-K for the year ended December 31, 2018.  The Company is not currently a party to any material legal proceedings except as set forth below.

In July 2015, the Company signed an engagement letter with Mavericks Capital LLC and Mavericks Capital Securities LLC, a strategic consulting firm (collectively, “Mavericks”). The engagement letter included a success fee payable upon the successful conclusion of certain strategic transactions. On May 4, 2017, Mavericks filed a lawsuit against the Company and its CEO, Dr. Xiaochun Xu, in the California Superior Court, alleging that it was owed a transaction fee of $1,000,000 under the terms of the engagement letter resulting from the conversion of certain Boyalife debentures in August 2016. In October 2017, to streamline the case by providing for the dismissal of Dr. Xu as an individual defendant and without acknowledging any liability, the Company deposited $1,000,000 with the California Superior Court. Mavericks agreed to dismiss Mr. Xu from the case, without liability. Subsequently, the Company filed a Motion for Summary Judgment, which was denied by the California Superior Court on June 26, 2018. On September 24, 2018, Mavericks filed an amended complaint, reinstating Dr. Xu as a named defendant, as well as Boyalife Investment, Inc. (a dissolved company) and Boyalife (Hong Kong) Limited, under new theories of liability, namely intentional interference with contractual relations and inducement of breach of contract. On July 22, 2019, Mavericks filed a Request for Dismissal requesting the Court to dismiss the served Boyalife entities and the Company CEO as well as the intentional interference with performance of contract and inducing breach of contract causes of action from the lawsuit. As such, the only remaining claim at present is the original breach of contract claim against the Company. On August 6, 2019, a trial starting date was set for November 18, 2019. A mandatory settlement conference was also set for November 13, 2019 with the Court. The Company denies liability and intends to defend the lawsuit vigorously.

Item 1A. Risk Factors.

There have been no material changes to the risk factors relating to the Company set forth in Part I, “Item IA. Risk Factors” of its Annual Report on Form 10-K for the year ended December 31, 2018.

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

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosure.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

An index of exhibits is found on page 29 of this report.

28

Item 6. Exhibits.

Exhibit No.	Document Description	Incorporated by Reference
3.1	Sixth Amended and Restated Certificate of Incorporation of ThermoGenesis Corp., as amended.	Filed herewith.
3.2	Amended and Restated Bylaws	Incorporated by reference to Exhibit 3.2 to Form 8-K filed with the SEC on October 30, 2019.
4.1	Form of Convertible Promissory Note, dated as of July 23, 2019, between Cesca Therapeutics Inc. and Orbrex USA Co.	Incorporated by reference to Exhibit 4.1 to Form 8-K filed with the SEC on July 29, 2019.
4.2	Form of Pre-Funded Warrant, dated as of April 26, 2019, between Cesca Therapeutics Inc. and Yuan Lan Fang.	Incorporated by reference to Exhibit 4.1 to Form 8-K/A filed with the SEC on September 24, 2019.
10.1	Amendment No. 1, dated July 23, 2019, to the Convertible Note, dated January 29, 2019, between Cesca Therapeutics Inc. and Orbrex USA Co.	Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on July 29, 2019.
10.2	Securities Purchase Agreement dated as of July 23, 2019, between Cesca Therapeutics Inc, and the Purchaser identified on the signature pages thereto.	Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on July 29, 2019.
10.3	Supply Agreement, dated as of August 30, 2019, between Corning Incorporated and Cesca Therapeutics Inc.	Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on September 6, 2019.
10.4	Amendment No. 1, dated July 23, 2019, to the Convertible Promissory Note, dated January 29, 2019 between Cesca therapeutics Inc. and Orbrex USA Co.	Filed herewith
31.1	Certification by the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith
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.

29

ThermoGenesis Holdings, Inc.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ThermoGenesis Holdings, Inc. (Registrant)
Dated: November 18, 2019	/s/ Xiaochun (Chris) Xu, Ph.D.
	Xiaochun (Chris) Xu, Ph.D. Chief Executive Officer (Principal Executive Officer)
Dated: November 18, 2019	/s/ Jeff Cauble
	Jeff Cauble Principal Financial and Accounting Officer (Principal Financial Officer and Principal Accounting Officer)

30

EX-3.1

Exhibit 3.1

CERTIFICATE OF AMENDMENT TO THE

SIXTH AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

CESCA THERAPEUTICS INC.

Cesca Therapeutics Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), by its duly authorized officer, hereby certifies as follows:

FIRST: Pursuant to Section 242 of the Delaware General Corporation Law (the “DGCL”), this Certificate of Amendment (the “Amendment”) to the Corporation’s Sixth Amended and Restated Certificate of Incorporation, as amended (the “Sixth Amended and Restated Certificate”), amends and restates Article FIRST of the Sixth Amended and Restated Certificate in its entirety to read as follows:

“FIRST: The name of the corporation is THERMOGENESIS HOLDINGS, INC.”

SECOND: The Amendment was duly adopted by the Corporation’s Board of Directors in accordance with the applicable provisions of Section 242 of the DGCL.

THIRD: Other than the changes effected by the Amendment, the terms of the Corporation’s Sixth Amended and Restated Certificate shall remain in full force and effect.

FOURTH: The effective time and date of the Amendment herein certified shall be 12:01 a.m. on November 1, 2019.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to the Sixth Amended and Restated Certificate of Incorporation to be executed by its Chief Executive Officer this 30th day of October 2019.

By:	/s/ Xiaochun Xu
	Xiaochun Xu, Ph.D., Chief Executive Officer

CERTIFICATE OF AMENDMENT TO THE
SIXTH AMENDED AND RESTATED 
CERTIFICATE OF INCORPORATION
OF
CESCA THERAPEUTICS INC.

Adopted in accordance with the provisions
of Section 242 of the General Corporation
Law of the State of Delaware

Cesca Therapeutics Inc., (the “Corporation”), a corporation organized and existing under the laws of the State of Delaware, by its duly authorized officer, does hereby certify:

FIRST: That the Board of Directors of the Corporation has duly adopted resolutions (i) authorizing the Corporation to execute and file with the Secretary of State of the State of Delaware an amendment of the Corporation’s Sixth Amended and Restated Certificate of Incorporation to reclassify, change, and convert each ten (10) outstanding shares of the Corporation’s Common Stock, par value $0.001 per share, into one (1) share of Common Stock, par value $0.001 per share; (ii) declaring such amendment to be advisable and (iii) directing that such amendment be considered at the Annual Meeting of Stockholders held on May 30, 2019.

SECOND: That upon the effectiveness of this Certificate of Amendment to the Sixth Amended and Restated Certificate of Incorporation, the Sixth Amended and Restated Certificate of Incorporation is hereby amended by replacing the second paragraph of Article FOURTH in its entirety to read as follows:

“Each ten (10) shares of the Common Stock, par value $0.001 per share, of the Corporation issued and outstanding or held in treasury as of 5:00 p.m. Pacific Time on the date this Certificate of Amendment to the Sixth Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware (the “Effective Time”) shall be reclassified as and changed into one (1) share of Common Stock, par value $0.001 per share, of the Corporation, without any action by the holders thereof. The fractional interest held by each Stockholder who, immediately prior to the Effective Time, owns a number of shares of Common Stock which is not evenly divisible by ten (10), shall be reclassified as and changed into one (1) share of Common Stock, par value $0.001 per share.”

THIRD: That, in accordance with the provisions of the Delaware General Corporation Law, the holders of a majority of the outstanding Common Stock of the Corporation entitled to vote thereon affirmatively voted in favor of the amendment at the Annual Meeting of Stockholders held on May 30, 2019.

FOURTH: That the amendment was duly adopted in accordance with the provisions of Section 242 of the Delaware General Corporation Law by the Board of Directors and stockholders of the Corporation.

* * *

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to the Sixth Amended and Restated Certificate of Incorporation to be executed by Xiaochun (Chris) Xu, Ph.D., its Chief Executive Officer, this 4th day of June, 2019.

CESCA THERAPEUTICS INC.
By:	/s/ Xiaochun Xu
	Xiaochun (Chris) Xu, Ph.D.
	Chief Executive Officer

CERTIFICATE OF AMENDMENT TO THE
SIXTH AMENDED AND RESTATED 
CERTIFICATE OF INCORPORATION
OF
CESCA THERAPEUTICS INC.

Adopted in accordance with the provisions
of Section 242 of the General Corporation
Law of the State of Delaware

Cesca Therapeutics Inc., (the “Corporation”), a corporation organized and existing under the laws of the State of Delaware, by its duly authorized officer, does hereby certify:

FIRST: That the Board of Directors of the Corporation has duly adopted resolutions (i) authorizing the Corporation to execute and file with the Secretary of State of the State of Delaware an amendment of the Corporation’s Sixth Amended and Restated Certificate of Incorporation to reclassify, change, and convert each twenty (20) outstanding shares of the Corporation’s Common Stock, par value $0.001 per share, into one (1) share of Common Stock, par value $0.001 per share; (ii) declaring such amendment to be advisable and (iii) directing that such amendment be considered at the Annual Meeting of Stockholders held on March 2, 2016.

SECOND: That upon the effectiveness of this Certificate of Amendment to the Sixth Amended and Restated Certificate of Incorporation, the Sixth Amended and Restated Certificate of Incorporation is hereby amended by adding a new paragraph after the first paragraph of Article FOURTH to read as follows:

“Each twenty (20) shares of the Common Stock, par value $0.001 per share, of the Corporation issued and outstanding or held in treasury as of 5:00 p.m. Pacific Time on the date this Certificate of Amendment to the Sixth Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware (the “Effective Time”) shall be reclassified as and changed into one (1) share of Common Stock, par value $0.001 per share, of the Corporation, without any action by the holders thereof. The fractional interest held by each Stockholder who, immediately prior to the Effective Time, owns a number of shares of Common Stock which is not evenly divisible by 20, shall be reclassified as and changed into one (1) share of Common Stock, par value $0.001 per share.”

THIRD: That, in accordance with the provisions of the Delaware General Corporation Law, the holders of a majority of the outstanding Common Stock of the Corporation entitled to vote thereon affirmatively voted in favor of the amendment at the Annual Meeting of Stockholders held on March 2, 2016.

FOURTH: That the amendment was duly adopted in accordance with the provisions of Section 242 of the Delaware General Corporation Law by the Board of Directors and stockholders of the Corporation.

*     *     *

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to the Sixth Amended and Restated Certificate of Incorporation to be executed by Robin Stracey, its Chief Executive Officer, this 4th day of March, 2016.

CESCA THERAPEUTICS INC.
By:	/s/ Robin Stracey
	Robin Stracey
	Chief Executive Officer

CERTIFICATE OF AMENDMENT
TO THE SIXTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
CESCA THERAPEUTICS INC. 

 Cesca Therapeutics Inc., a corporation organized under and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies that:

 FIRST: The name of the Corporation is CESCA THERAPEUTICS INC. 

SECOND: The Board of Directors of the Corporation, acting in accordance with the provisions of Sections 141 and 242 of the Delaware General Corporation Law, adopted resolutions to amend the first paragraph of Article FOURTH of the Sixth Amended and Restated Certificate of Incorporation of the Corporation to read in its entirety:

“The Corporation is authorized to issue two classes of stock, designated Common Stock, $0.001 par value (“Common Stock”) and Preferred Stock, $0.001 par value (“Preferred Stock”). The total number of shares which the Corporation is authorized to issue is Three Hundred Fifty Two million (352,000,000). The total number of shares of Common Stock is Three Hundred Fifty Million (350,000,000) and the total number of Shares of Preferred Stock is Two Million (2,000,000).”

 THIRD: This Certificate of Amendment to the Restated Certificate of Incorporation was submitted to the stockholders of the Corporation and was duly approved by the required vote of stockholders of the Corporation in accordance with Sections 222 and 242 of the Delaware General Corporation Law.

IN WITNESS WHEREOF, said Certificate of Amendment to the Restated Certificate of Incorporation has been duly executed by its authorized officer this 30^th day of October 2015.

CESCA THERAPEUTICS INC.

/s/ Robin C. Stracey

Robin C. Stracey, Chief Executive Officer

CERTIFICATE OF AMENDMENT

TO THE AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION OF

CESCA THERAPEUTICS INC.

Cesca Therapeutics Inc., a corporation organized under and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies that:

FIRST: The name of the Corporation is CESCA THERAPEUTICS INC.

SECOND: The Board of Directors of the Corporation, acting in accordance with the provisions of Sections 141 and 242 of the Delaware General Corporation Law, adopted resolutions to amend the first paragraph of Article FOURTH of the Amended and Restated Certificate of Incorporation of the Corporation to read in its entirety:

“The Corporation is authorized to issue two classes of stock designated Common Stock, $0.001 par value (“Common Stock”) and Preferred Stock, $0.001 par value. The total number of shares of Common Stock that the Corporation shall have authority to issue is One Hundred Fifty Million (150,000,000) and the total number of Shares of Preferred Stock that the Corporation shall have authority to issue is Two Million (2,000,000).

THIRD: This Certificate of Amendment to the Amended and Restated Certificate of Incorporation was submitted to the stockholders of the Corporation and was duly approved by the required vote of stockholders of the Corporation in accordance with Sections 222 and 242 of the Delaware General Corporation Law.

IN WITNESS WHEREOF, said Certificate of Amendment to the Restated Certificate of Incorporation has been duly executed by its authorized officer this 19th day of June 2015.

CESCA THERAPEUTICS INC.

/s/ Robin C. Stracey

Robin C. Stracey, Chief Executive Officer

CERTIFICATE OF MERGER

TOTIPOTENTRX CORPORATION,

A CALIFORNIA CORPORATION,

INTO

THERMOGENESIS CORP.,

A DELAWARE CORPORATION

Pursuant to Title 8, Section 252 of the General Corporation Law of the State of Delaware, the undersigned hereby executed the following Certificate of Merger:

First:  The name of surviving corporation is ThermoGenesis Corp., a Delaware corporation (“Surviving Company”).

Second:  The name of the corporation being merged into this surviving corporation is TotipotentRX Corporation, a California corporation (“Disappearing Company”).

Third:  The agreement of merger or consolidation has been approved and executed by each of the business entities which are to merge or consolidate (the “Merger Agreement”).

Fourth:  The Certificate of Incorporation of the Surviving Corporation in effect immediately prior to the filing of this Certificate shall be its Certificate of Incorporation; provided, however, that at the Effective Time, Article I of the certificate of incorporation of the Surviving Corporation shall be amended and restated in its entirety to read as follows:

“The name of the corporation (hereinafter called the “corporation”) is Cesca Therapeutics Inc.”

Fifth:  The merger is to become effective upon filing.

Sixth:  The agreement of merger is on file at the place of business of the Surviving Corporation and the principal address thereof is 2711 Citrus Road, Rancho Cordova, CA  95742.

Seventh:  A copy of the Merger Agreement will be furnished by the Surviving Corporation, on request and without cost, to any member of any stockholder or any person holding an interest in Disappearing Corporation.

Eighth:  The Surviving Corporation agrees that it may be served with process in the State of Delaware in any proceeding for enforcement of any obligation of the Surviving Corporation arising from this merger, including any suit or other proceeding to enforce the rights of any stockholders as determined in appraisal proceedings pursuant to the provisions of Section 262 of the Delaware General Corporation laws, and irrevocably appoints the Secretary of State of Delaware as its agent to accept services of process in any such suit or proceeding.  The Secretary of State shall mail any such process to the Surviving Corporation at 2711 Citrus Road, Rancho Cordova, CA  95742.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the undersigned, as the Surviving Corporation of the merger, has caused this certificate to be signed by an authorized officer this 13 day of February, 2014.

THERMOGENESIS CORP.
By:	/s/ Matthew T. Plavan
Name: Matthew T. Plavan
Title:    CEO

[Signature Page to the Certificate of Merger]

CERTIFICATE OF AMENDMENT
TO THE AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
THERMOGENESIS CORP.

ThermoGenesis Corp., a corporation organized under and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies that:

FIRST: The name of the Corporation is THERMOGENESIS CORP.

SECOND: The Board of Directors of the Corporation, acting in accordance with the provisions of Sections 141 and 242 of the Delaware General Corporation Law, adopted resolutions to amend the first paragraph of Article FOURTH of the Amended and Restated Certificate of Incorporation of the Corporation to read in its entirety:

“The Corporation is authorized to issue two classes of stock, designated Common Stock, $0.001 par value (“Common Stock”) and Preferred Stock, $0.001 par value. The total number of shares of Common Stock that the Corporation shall have authority to issue is Eighty Million (80,000,000) and the total number of Shares of Preferred Stock that the Corporation shall have authority to issue is Two Million (2,000,000). Effective as of 5:00 pm, Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware, each four (4) shares of the Corporation’s Common Stock, par value $0.001 per share, issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of Common Stock, par value $0.001 per share, of the Corporation. No fractional shares shall be issued and, in lieu thereof, any holder of less than one (1) share of Common Stock shall be entitled to receive one (1) whole share of Common Stock, as of the date this Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware.”

THIRD: This Certificate of Amendment to the Restated Certificate of Incorporation was submitted to the stockholders of the Corporation and was duly approved by the required vote of stockholders of the Corporation in accordance with Sections 222 and 242 of the Delaware General Corporation Law.

  IN WITNESS WHEREOF, said Certificate of Amendment to the Restated Certificate of Incorporation has been duly executed by its authorized officer this 9th day of August, 2010.

THERMOGENESIS CORP.

/s/ J. Melville Engle

J. Melville Engle

Chief Executive Officer

Sixth Amended and Restated
Certificate of Incorporation
of Thermogenesis Corp.

ThermoGenesis Corp., a corporation organized and existing under the laws of the State of Delaware, (the “Corporation”) hereby certifies as follows:

1.     The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on July 3, 1986, under the corporate name Refrigeration Systems International, Inc

2.     A Certificate of Merger was filed with the Secretary of State of the State of Delaware on September 26, 1986, whereupon the Corporation’s name changed to Insta Cool Inc. of North America.

3.     A Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on March 24, 1994.

4.     An Amended and Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on January 12, 1995, changing the Corporation’s name to THERMOGENESIS CORP.

5.     An Amended and Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on June 5, 1996.

6.     An Amended and Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on August 2, 1999.

7.     A Fifth Amended and Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on October 28, 2005.

8.     This Sixth Amended and Restated Certificate of Incorporation was duly adopted by the Board of Directors and stockholders of the Corporation in accordance with Sections 242 and 245 of the Delaware General Corporation Law and restates and integrates and further amends the provisions of the previous filed Amended and Restated Certificate of Incorporation of this Corporation.

9.     The current Amended and Restated Certificate of Incorporation is hereby amended and restated in its entirely to read as follows:

FIRST:     The name of the corporation is: THERMOGENESIS CORP.

SECOND:     The address, including street, number, city and county, of the registered office of the Corporation in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, County of Newcastle, Delaware 19808; and the name of the registered agent of the Corporation in the State of Delaware at such address is The Company Corporation.

THIRD:     The nature of the business or purposes to be conducted or promoted of this Corporation shall be to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware

FOURTH:     The Corporation is authorized to issue two classes of stock, designated Common Stock, $0.001 par value (“Common Stock”) and Preferred Stock, $0.001 par value. The total number of shares of Common Stock that the Corporation shall have authority to issue is Eighty Million (80,000,000) and the total number of Shares of Preferred Stock that the Corporation shall have authority to issue is Two Million (2,000,000).

The Corporation has no issued or outstanding shares of its previously authorized Series A Convertible Preferred Stock. Accordingly, all rights, preferences, privileges and restrictions granted to or imposed upon such series of shares have been omitted from this Sixth Amended and Restated Certificate of Incorporation.

Shares of Preferred Stock may be issued from time to time in one or more series. The Board of Directors shall determine the designation of each series and the authorized number of shares of each series. The Board of Directors is authorized to determine and alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of shares of Preferred Stock and to increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any such series subsequent to the issue of shares of that series. If the number of shares of any series of Preferred Stock shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series.

FIFTH:     Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court or equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to: any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.

SIXTH:     The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors. The number of directors which shall constitute the entire Board of Directors shall be fixed by, or in the manner provided in, the bylaws of this Corporation. The election of directors of the Corporation need not be by written ballot, unless the bylaws so provide.

SEVENTH:     The Board of Directors is authorized to adopt, amend or repeal the bylaws of the Corporation. The stockholders shall also have the power to adopt, amend or repeal the bylaws of the Corporation. Notwithstanding, any provision for the classification of directors for staggered terms pursuant to Section 141(d) of the Delaware General Corporation Law shall be set forth in the bylaws adopted by the stockholders unless provisions for such classification shall be set forth in the Corporation’s certificate of incorporation.

EIGHTH:     A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except to the extent such exemption from liability or limitation thereof is not permitted under the Delaware General Corporation Law as the same exists or may hereafter be amended.

Any repeal or modification of the foregoing paragraph shall not adversely affect any right or protection of a director of the Corporation existing hereunder with respect to any act or omission occurring prior to such repeal or modification.

NINTH:     To the fullest extent permitted by Section 145 of the General Corporation Law of Delaware as the same exists or may hereafter be amended, the Corporation shall indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for hereby shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to any action such person may have performed in current official capacity or in another capacity while holding such office, and shall continue as to any person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of heirs, executors and administrators of such person. No repeal or modification of this Section by the stockholders of the Corporation shall adversely affect any right of protection existing by virtue of this Section at the time of such repeal modification.

IN WITNESS WHEREOF, the Corporation has caused this Sixth Amended and Restated Certificate of Incorporation to be signed by its duly authorized officer this 6th day of December 2005.

THERMOGENESIS CORP.

/s/ Philip H. Coelho

Philip H. Coelho, Chairman & CEO

EX-10.4

Exhibit 10.4

AMENDMENT NO. 1 TO CONVERTIBLE PROMISSORY NOTE

This Amendment No. 1 to Convertible Promissory Note (this “Amendment No. 1”) by and between CESCA THERAPEUTICS INC., a Delaware corporation (the “Company”), and Orbrex (USA) Co. Limited (“Orbrex”), is entered into as of August 12, 2019 but shall be effective as of July 23, 2019 (the “Effective Date”). Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Convertible Promissory Note (as defined below).

WHEREAS, on July 23, 2019, the Company issued to Orbrex a Convertible Promissory Note in the original principal amount of $1,000,000 (the “Convertible Promissory Note”);

WHEREAS, the terms of the Convertible Promissory Note provide for a floor Conversion Price of $0.10; and

WHEREAS, the Company and Orbrex have agreed that the floor Conversion Price should be $0.50, rather than $0.10, and therefore desire to enter into this Amendment No. 1.

NOW, THEREFORE, intending to be legally bound, and in consideration of the mutual agreements contained herein, the parties hereto agree as follows:

1.     Amendment of Section (3)(b)(ii). Section (3)(b)(ii) of the Convertible Promissory Note is hereby amended by deleting said section in its entirety and replacing it with the following (thereby replacing the definition of “Conversion Price” with the following definition):

“(ii)  “Conversion Price” means, as of any Conversion Date (as defined below) or other date of determination, the lower of (a) $1.80 per share or (2) 90% of the Closing Sale Price of the Common Stock on the Conversion Date (subject to a floor Conversion Price of $0.50), in each case subject to adjustment as provided herein.”

2.     Amendment of First Sentence of Section (8)(a). Section (8)(a) of the Convertible Promissory Note is hereby amended by deleting the first sentence of said section in its entirety and replacing it with the following:

“The Company shall initially reserve out of its authorized and unissued Common Stock a number of shares of Common Stock for each of the Notes equal to 100% of the Conversion Rate (assuming a conversion rate of $0.50) with respect to the Conversion Amount of each such Note as of the Issuance Date.”

3.     Ratification and Confirmation. Except as expressly provided in this Amendment No. 1, all of the terms, conditions and provisions of the Convertible Promissory Note remain unaltered, are in full force and effect, and are hereby expressly ratified and confirmed.

4.     Miscellaneous. This Amendment No. 1 may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. The parties hereto further agree that facsimile signatures or signatures scanned into .pdf (or similar) format and sent by e-mail shall be deemed original signatures.

[signatures follow]

IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 as of the day and year first written above.

CESCA THERAPEUTICS INC.

/s/ Xiaochun Xu

Xiaochun (Chris) Xu, Chief Executive Officer

Orbrex (USA) Co. Limited

/s/ Lan Fang Yuan

Lan Fang Yuan, President

2

EX-31.1

Exhibit 31.1

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

I, Xiaochun (Chris) Xu, certify that:

1. I have reviewed this report on Form 10-Q of ThermoGenesis Holdings, 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 conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

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

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

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

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

Dated: November 18, 2019	/s/ Xiaochun (Chris) Xu, Ph.D.
	Xiaochun (Chris) Xu, Ph.D. Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

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

I, Jeff Cauble, certify that:

1. I have reviewed this report on Form 10-Q of ThermoGenesis Holdings, 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: November 18, 2019	/s/ Jeff Cauble
	Jeff Cauble Principal Financial and Accounting Officer (Principal Financial Officer and Principal Accounting Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

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

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of ThermoGenesis Holdings, Inc. (the "Company") on Form 10-Q for the period ended September 30, 2019, as filed with the Securities and Exchange Commission (the "Report"), we, Xiaochun (Chris) Xu, Chief Executive Officer and Jeff Cauble, Principal Financial and Accounting Officer, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge:

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

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

Dated: November 18, 2019	/s/ Xiaochun (Chris) Xu, Ph.D.
	Xiaochun (Chris) Xu, Ph.D. Chief Executive Officer (Principal Executive Officer)
Dated: November 18, 2019	/s/ Jeff Cauble
	Jeff Cauble Principal Financial and Accounting Officer (Principal Financial Officer and Principal Accounting Officer)

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Note 9 - Segment Reporting

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

9. Segment Reporting

The Company has

two

reportable segments, which are the same as its operating segments:

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

The Clinical Development Segment utilizes autologous stem cell-based therapeutics in the vascular and orthopedic markets.

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

	Three Months Ended September 30, 2019
	Device		Clinical Development			Total
Net revenues	$	4,045,000	$	13,000		$	4,058,000
Cost of revenues		2,126,000		37,000			2,163,000
Gross profit		1,919,000		(24,000	)		1,895,000
Operating expenses		1,871,000		354,000			2,225,000
Operating income / (loss)	$	48,000	$	(378,000	)	$	(330,000	)
Depreciation and amortization	$	149,000	$	53,000		$	202,000
Stock-based compensation expense	$	201,000	$	52,000		$	253,000

	Three Months Ended September 30, 2018
	Device			Clinical Development			Total
Net revenues	$	3,059,000		$	54,000		$	3,113,000
Cost of revenues		2,383,000			75,000			2,458,000
Gross profit		676,000			(21,000	)		655,000
Operating expenses		1,969,000			621,000			2,590,000
Operating loss	$	(1,293,000	)	$	(642,000	)	$	(1,935,000	)
Depreciation and amortization	$	100,000		$	74,000		$	174,000
Stock-based compensation expense	$	8,000		$	167,000		$	175,000

	Nine Months Ended September 30, 2019
	Device			Clinical Development			Total
Net revenues	$	11,256,000		$	69,000		$	11,325,000
Cost of revenues		6,082,000			138,000			6,220,000
Gross profit		5,174,000			(69,000	)		5,105,000
Operating expenses		5,295,000			1,307,000			6,602,000
Operating loss	$	(121,000	)	$	(1,376,000	)	$	(1,497,000	)
Depreciation and amortization	$	381,000		$	223,000		$	604,000
Stock-based compensation expense	$	294,000		$	165,000		$	459,000
Goodwill	$	781,000		$	--		$	781,000
Total assets	$	15,620,000		$	1,971,000		$	17,591,000

	Nine Months Ended September 30, 2018
	Device			Clinical Development			Total
Net revenues	$	6,822,000		$	162,000		$	6,984,000
Cost of revenues		5,419,000			195,000			5,614,000
Gross profit		1,403,000			(33,000	)		1,370,000
Operating expenses		6,858,000			30,208,000			37,066,000
Operating loss	$	(5,455,000	)	$	(30,241,000	)	$	(35,696,000	)
Depreciation and amortization	$	296,000		$	210,000		$	506,000
Impairment Charges	$	--		$	27,202,000		$	27,202,000
Stock-based compensation expense	$	88,000		$	387,000		$	475,000
Total assets	$	10,213,000		$	11,386,000		$	21,599,000

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Note 5 - Leases

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

5. Leases

The Company determines whether a contract contains a lease at inception.  Our material operating lease consists of office space which has a remaining term of

4.7

years.  Generally, the lease term is the minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods.

Operating Leases

Operating lease assets and liabilities are recognized at the lease commencement date.  Operating lease liabilities represent the present value of remaining minimum lease payments.  Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets.  To determine the present value of lease payments

not

yet paid, we use the Company’s cost of capital based on existing debt instruments.  Our material leases typically contain rent escalations over the lease term.  We recognize expense for these leases on a straight-line basis over the lease term.

The following summarizes the Company’s operating leases:

	September 30, 2019
Right-of-use operating lease assets, net	$	887,000
Current lease liability		110,000
Non-current lease liability		794,000

	September 30, 2019
Weighted average remaining lease term	4.7
Discount rate	22%

Maturities of lease liabilities by calendar year for our operating leases are as follows:

Period of October 1, 2019 through December 31, 2019	$	74,000
2020		301,000
2021		310,000
2022		319,000
2023		329,000
2024		138,000
Total lease payments	$	1,471,000
Less: imputed interest		(567,000	)
Present value of operating lease liabilities	$	904,000

Statement of Cash Flows

In

January 2019,

the Company signed an amendment to its lease for office space at its corporate headquarters in Rancho Cordova, CA.  The amendment was accounted for as a modification and resulted in a right-of-use asset of

$966,000

being recognized as a non-cash addition on the date of the amendment.  Cash paid for amounts included in the measurement of operating lease liabilities were

$74,000

and

$217,000

during the

three

and

nine

months ended

September 30, 2019

and is included in cash flows from operating activities.

Operating Lease Costs

Operating lease costs were

$103,000

and

$309,000

during the

three

and

nine

months ended

September 30, 2019.

These costs are primarily related to long-term operating leases, but also include immaterial amounts for variable lease costs and short term leases with terms greater than

30

days.

Finance Leases

Finance leases are included in equipment and other current and non-current liabilities in the accompanying condensed consolidated balance sheet.  The amortization and interest expense are included in general and administrative expense and interest expense, respectively in the accompanying statements of operations.  These leases are

not

material as of

September 30, 2019.

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Note 2 - Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Disaggregation of Revenue [Table Text Block]

	Three Months Ended September 30, 2019
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	2,255,000	$	51,000	$	--	$	2,306,000
BioArchive		243,000		351,000		--		594,000
Manual Disposables		212,000		--		--		212,000
CAR-TXpress		875,000		6,000		33,000		914,000
Other		--		--		19,000		19,000
Total Device Segment		3,585,000		408,000		52,000		4,045,000
Clinical Development Segment:
Manual Disposables		9,000		--		--		9,000
Other		--		4,000		--		4,000
Total Clinical Development		9,000		4,000		--		13,000
Total		3,594,000		412,000		52,000	$	4,058,000

	Nine Months Ended September 30, 2019
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	6,550,000	$	160,000	$	--	$	6,710,000
BioArchive		1,274,000		1,117,000		--		2,391,000
Manual Disposables		711,000		--		--		711,000
CAR-TXpress		1,365,000		6,000		33,000		1,404,000
Other		--		--		40,000		40,000
Total Device Segment		9,900,000		1,283,000		73,000		11,256,000
Clinical Development Segment:
Manual Disposables		53,000		--		--		53,000
Other		5,000		11,000		--		16,000
Total Clinical Development		58,000		11,000		--		69,000
Total		9,958,000		1,294,000		73,000		11,325,000

	Three Months Ended September 30, 2018
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	1,396,000	$	70,000	$	--	$	1,466,000
BioArchive		485,000		314,000		--		799,000
Manual Disposables		254,000		--		--		254,000
CAR-TXpress		517,000		--		--		517,000
Other		--		--		23,000		23,000
Total Device Segment		2,652,000		384,000		23,000		3,059,000
Clinical Development Segment:
Manual Disposables		8,000		--		--		8,000
Bone Marrow		--		40,000		--		40,000
Other		--		6,000		--		6,000
Total Clinical Development		8,000		46,000		--		54,000
Total	$	2,660,000	$	430,000	$	23,000	$	3,113,000

	Nine Months Ended September 30, 2018
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	2,930,000	$	201,000	$	--	$	3,131,000
BioArchive		1,357,000		969,000		--		2,326,000
Manual Disposables		716,000		--		--		716,000
CAR-TXpress		547,000		--		--		547,000
Other		46,000		--		56,000		102,000
Total Device Segment		5,596,000		1,170,000		56,000		6,822,000
Clinical Development Segment:
Manual Disposables		31,000		--		--		31,000
Bone Marrow		--		101,000		--		101,000
Other		--		30,000		--		30,000
Total Clinical Development		31,000		131,000		--		162,000
Total	$	5,627,000	$	1,301,000	$	56,000	$	6,984,000

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	2019		2018
Common stock equivalents of convertible promissory notes and accrued interest		6,013,667		4,626,667
Vested Series A warrants		40,442		40,442
Unvested Series A warrants (1)		69,853		69,853
Warrants – other		1,300,091		1,319,728
Stock options		296,029		118,830
Total		7,720,082		6,175,520

XML

Note 4 - Convertible Promissory Note - Assumptions (Details) - Convertible Debt [Member]	Jul. 23, 2019
Measurement Input, Share Price [Member]
Long-term Debt, Measurement Input	3.05
Measurement Input, Exercise Price [Member]
Long-term Debt, Measurement Input	1.8	[1]
Measurement Input, Risk Free Interest Rate [Member]
Long-term Debt, Measurement Input	1.8
Measurement Input, Expected Dividend Rate [Member]
Long-term Debt, Measurement Input
Measurement Input, Expected Term [Member]
Long-term Debt, Measurement Input	3.02
Measurement Input, Price Volatility [Member]
Long-term Debt, Measurement Input	93

[1] For the exercise price, the model inputs also accounted for the fair value protection under the Amended Note, which allows for the holder to convert at the lower of $1.80 share or 90% of the listed price of the stock on the day of conversion, whichever is lower (subject to a floor of $0.50).

XML

Note 6 - Commitments and Contingencies (Details Textual) - USD ($)		1 Months Ended	6 Months Ended	9 Months Ended
	May 04, 2017	Oct. 31, 2017	Jun. 30, 2019	Sep. 30, 2019	Jun. 30, 2018
Payment Terms, Severance Compensation				1 year
Short Term Investment Minimum				$ 2,000,000
Litigation Related to Strategic Advisory Services [Member]
Loss Contingency, Damages Sought, Value	$ 1,000,000
Loss Contingency, Damages Sought, Value, Interest			$ 300,000
Loss Contingency, Negotiation Condition Bond		$ 1,000,000
Loss Contingency Accrual, Ending Balance				$ 0	$ 0

XML

Note 8 - Stockholders' Equity (Details Textual) - USD ($)			3 Months Ended		9 Months Ended
		Apr. 18, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Class of Warrant or Right, Issued During Period	[1]				444,445
Share-based Payment Arrangement, Expense			$ 253,000	$ 175,000	$ 459,000	$ 475,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period					0
April 2019 Pre-funded Warrants [Member]
Class of Warrant or Right, Issued During Period		444,445
Warrants Issued, Price Per Warrant		$ 1.70
Proceeds from Issuance of Warrants		$ 756,000
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right		1
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.10

[1] See Footnote 1 of the Notes to the Condensed Consolidated Financial Statements.

XML

Note 9 - Segment Reporting (Details Textual)	9 Months Ended
	Sep. 30, 2019
Number of Reportable Segments	2

XML

Note 2 - Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

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

2. Summary of Significant Accounting Policies

Recently Adopted Accounting Standards

In

June 2018,

the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)

2018

-

07,

“Compensation-Stock Compensation (Topic

718

): Improvements to Nonemployee Share-Based Payment Accounting”

, which simplifies the accounting for nonemployee share-based payment transactions. The amendments specify that Topic

718

applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The Company adopted the standard on

January 1, 2019.

The adoption of this standard did

not

have a material impact on the Company’s financial statements.

In

February 2016,

the FASB issued ASU

2016

-

02

“

Leases

,” which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The Company adopted the standard on

January 1, 2019.

The new standard requires lessees to recognize both the right-of-use assets and lease liabilities in the balance sheet for most leases, whereas under previous GAAP only finance lease liabilities (previously referred to as capital leases) were recognized in the balance sheet. In addition, the definition of a lease has been revised which

may

result in changes to the classification of an arrangement as a lease. Under the new standard, an arrangement that conveys the right to control the use of an identified asset by obtaining substantially all of its economic benefits and directing how it is used as a lease, whereas the previous definition focuses on the ability to control the use of the asset or to obtain its output. Quantitative and qualitative disclosures related to the amount, timing and judgements of an entity’s accounting for leases and the related cash flows are expanded. Disclosure requirements apply to both lessees and lessors, whereas previous disclosures related only to lessees. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have

not

significantly changed from previous GAAP. Lessor accounting is also largely unchanged.

The new standard provides a number of transition practical expedients, which the Company has elected, including:

● A “package of three” expedients that must be taken together and allow entities to ( 1 ) not reassess whether existing contracts contain leases, ( 2 ) carryforward the existing lease classification, and ( 3 ) not reassess initial direct costs associated with existing leases, and

● An implementation expedient which allows the requirements of the standard in the period of adoption with no restatement of prior periods.

The impact of adoption did

not

have a material impact to the Company as of

January 1, 2019

as the Company’s finance leases are immaterial and its operating leases had terms shorter than

one

year.  In

January 2019,

the Company signed an amendment to its lease for office space at its corporate headquarters in Rancho Cordova, CA.  The amendment extended the lease term by

five

years and was accounted for as a modification.  At that time, the Company recorded lease assets and liabilities of

$966,000

and

no

cumulative effect adjustment to retained earnings.

Revenue Recognition

Revenue is recognized based on the

five

-step process outlined in Accounting Standards Codification (ASC)

606.

The following tables summarize the revenues of the Company’s reportable segments and product lines:

	Three Months Ended September 30, 2019
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	2,255,000	$	51,000	$	--	$	2,306,000
BioArchive		243,000		351,000		--		594,000
Manual Disposables		212,000		--		--		212,000
CAR-TXpress		875,000		6,000		33,000		914,000
Other		--		--		19,000		19,000
Total Device Segment		3,585,000		408,000		52,000		4,045,000
Clinical Development Segment:
Manual Disposables		9,000		--		--		9,000
Other		--		4,000		--		4,000
Total Clinical Development		9,000		4,000		--		13,000
Total		3,594,000		412,000		52,000	$	4,058,000

	Nine Months Ended September 30, 2019
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	6,550,000	$	160,000	$	--	$	6,710,000
BioArchive		1,274,000		1,117,000		--		2,391,000
Manual Disposables		711,000		--		--		711,000
CAR-TXpress		1,365,000		6,000		33,000		1,404,000
Other		--		--		40,000		40,000
Total Device Segment		9,900,000		1,283,000		73,000		11,256,000
Clinical Development Segment:
Manual Disposables		53,000		--		--		53,000
Other		5,000		11,000		--		16,000
Total Clinical Development		58,000		11,000		--		69,000
Total		9,958,000		1,294,000		73,000		11,325,000

	Three Months Ended September 30, 2018
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	1,396,000	$	70,000	$	--	$	1,466,000
BioArchive		485,000		314,000		--		799,000
Manual Disposables		254,000		--		--		254,000
CAR-TXpress		517,000		--		--		517,000
Other		--		--		23,000		23,000
Total Device Segment		2,652,000		384,000		23,000		3,059,000
Clinical Development Segment:
Manual Disposables		8,000		--		--		8,000
Bone Marrow		--		40,000		--		40,000
Other		--		6,000		--		6,000
Total Clinical Development		8,000		46,000		--		54,000
Total	$	2,660,000	$	430,000	$	23,000	$	3,113,000

	Nine Months Ended September 30, 2018
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	2,930,000	$	201,000	$	--	$	3,131,000
BioArchive		1,357,000		969,000		--		2,326,000
Manual Disposables		716,000		--		--		716,000
CAR-TXpress		547,000		--		--		547,000
Other		46,000		--		56,000		102,000
Total Device Segment		5,596,000		1,170,000		56,000		6,822,000
Clinical Development Segment:
Manual Disposables		31,000		--		--		31,000
Bone Marrow		--		101,000		--		101,000
Other		--		30,000		--		30,000
Total Clinical Development		31,000		131,000		--		162,000
Total	$	5,627,000	$	1,301,000	$	56,000	$	6,984,000

Contract Balances

Generally, all sales are contract sales (with either an underlying contract or purchase order). The Company does

not

have any material contract assets. When invoicing occurs prior to revenue recognition a contract liability is recorded (as deferred revenue on the consolidated balance sheet). Revenues recognized during the

three

and

nine

months ended

September 30, 2019

that were included in the beginning balance of deferred revenue were

$50,000

and

$480,000,

respectively. Short term deferred revenues increased from

$485,000

at

December 31, 2018

to

$840,000

at

September 30, 2019.

Supply

Agreement

On

August 30, 2019,

the Company entered into a supply agreement with a global distributor for substantially all

X

-Series® products under the CAR-TXpress™ platform (the “Products”). The agreement has an initial term of

five

years with automatic

two

-year renewal terms, unless terminated by either party in accordance with the terms of the agreement. Pursuant to the agreement, the Company has granted exclusive worldwide distribution rights for

X

-Series products, for the duration of the term, subject to certain geographical and other exceptions. In addition, the Company has granted rights of

first

refusal for the exclusive worldwide distribution of certain future products developed or introduced by the Company relating to cell isolation or cell selection, including any such products substantially related or similar to the Products (the “ROFR Products”). As consideration for the exclusive worldwide distribution rights for the Products and ROFR Products, the Company will receive a

$2,000,000

fee, in addition to any amounts payable throughout the term for the Products and any ROFR Products. The agreement also contains an option, exercisable by the global distributor at any time following

January 1, 2021,

to become the manufacturer for all or any portion of the Products.

The agreement contains covenants by the Company to negotiate in good faith regarding price reductions for the Products and, commencing in

2020,

cost reduction efforts with respect to development and manufacture of the Products. Moreover, the agreement contains a most-favored customer provision with respect to the pricing made available for the Products during the term. The agreement contains mutual indemnification provisions, as well as standard warranties with respect to the Products, including that the Products supplied and the services provided (including customer support services for Products sold) be manufactured or performed, as applicable, in a

first

class, workmanlike manner by personnel properly trained.

Fair Value Measurements

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 to sell 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:

Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level

3:

Unobservable inputs reflecting the reporting entity’s own assumptions.

The carrying values of cash and cash equivalents, accounts receivable and accounts payable 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. The impairment of goodwill and intangible assets is a non-recurring Level

3

fair value measurement.

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 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 Device Segment, engages in the development and commercialization of automated technologies for cell-based therapeutics and bio-processing. The device division is operated through the Company’s ThermoGenesis Corp. subsidiary.

● The Clinical Development Segment, utilizes autologous stem cell-based therapeutics in the vascular and orthopedic markets through the Company’s TotipotentRX subsidiary in Gurgaon, India.

Net Loss per Share

Net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding plus the pre-funded warrants (as described in Footnote

8

). For the purpose of calculating basic net loss per share, the additional shares of common stock that are issuable upon exercise of the pre-funded warrants have been included since the shares are issuable for a negligible consideration and have

no

vesting or other contingencies associated with them. There were

324,444

pre-funded warrants included in the quarter ended

September 30, 2019

calculation. 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 noted below is anti-dilutive due to the Company’s net loss position for all periods presented. Anti-dilutive securities consisted of the following at

September 30:

	2019		2018
Common stock equivalents of convertible promissory notes and accrued interest		6,013,667		4,626,667
Vested Series A warrants		40,442		40,442
Unvested Series A warrants (1)		69,853		69,853
Warrants – other		1,300,091		1,319,728
Stock options		296,029		118,830
Total		7,720,082		6,175,520

______________

( 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.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassifications did

not

have an impact on net loss as previously reported.

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net revenues	$ 4,058,000	$ 3,113,000	$ 11,325,000	$ 6,984,000
Cost of revenues	2,163,000	2,458,000	6,220,000	5,614,000
Gross profit	1,895,000	655,000	5,105,000	1,370,000
Expenses:
Sales and marketing	502,000	364,000	1,227,000	1,048,000
Research and development	584,000	611,000	1,758,000	2,560,000
General and administrative	1,139,000	1,615,000	3,617,000	6,256,000
Impairment charges				27,202,000
Total operating expenses	2,225,000	2,590,000	6,602,000	37,066,000
Loss from operations	(330,000)	(1,935,000)	(1,497,000)	(35,696,000)
Fair value change of derivative instruments	(2,000)	24,000	(2,000)	591,000
Interest expense	(1,188,000)	(835,000)	(3,531,000)	(1,928,000)
Loss on extinguishment of debt	(840,000)		(840,000)
Other expense	(13,000)	(18,000)	(25,000)	(63,000)
Total other expense	(2,043,000)	(829,000)	(4,398,000)	(1,400,000)
Loss before benefit for income taxes	(2,373,000)	(2,764,000)	(5,895,000)	(37,096,000)
Benefit for income taxes				3,451,000
Net loss	(2,373,000)	(2,764,000)	(5,895,000)	(33,645,000)
Loss attributable to noncontrolling interests	(91,000)	(175,000)	(445,000)	(1,088,000)
Net loss attributable to common stockholders	(2,282,000)	(2,589,000)	(5,450,000)	(32,557,000)
Net loss	(2,373,000)	(2,764,000)	(5,895,000)	(33,645,000)
Other comprehensive loss:
Foreign currency translation adjustments	16,000	23,000	9,000	51,000
Comprehensive loss	(2,357,000)	(2,741,000)	(5,886,000)	(33,594,000)
Comprehensive loss attributable to noncontrolling interests	(91,000)	(175,000)	(445,000)	(1,088,000)
Comprehensive loss attributable to common stockholders	$ (2,266,000)	$ (2,566,000)	$ (5,441,000)	$ (32,506,000)
Per share data:
Basic and diluted net loss per common share (in dollars per share)	$ (0.78)	$ (1.17)	$ (2)	$ (19.90)
Weighted average common shares outstanding basic and diluted (in shares)	2,913,198	2,214,600	2,720,502	1,636,299

XML

Note 2 - Summary of Significant Accounting Policies (Details Textual)		3 Months Ended	9 Months Ended
	Aug. 30, 2019 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($) shares	Sep. 30, 2018 shares	Jan. 01, 2019 USD ($)	Dec. 31, 2018 USD ($)
Operating Lease, Right-of-Use Asset		$ 887,000	$ 887,000
Contract with Customer, Liability, Revenue Recognized		50,000	480,000
Contract with Customer, Liability, Current		840,000	$ 840,000			$ 485,000
Number of Reportable Segments			2
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares			7,720,082	6,175,520
Operating Lease, Liability, Total		$ 904,000	$ 904,000
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares			324,444
Supply Agreement [Member]
Supply Agreement, Term	5 years
Supply Agreement, Renewal Term	2 years
Contract with Customer, Liability, Total	$ 2,000,000
Accounting Standards Update 2016-02 [Member]
Operating Lease, Right-of-Use Asset					$ 966,000
Operating Lease, Liability, Total					$ 966,000

XML

Note 7 - Derivative Obligations (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

	Series A
	September 30, 2019	December 31, 2018
Market price of common stock	$6.63	$2.70
Expected volatility	93%	94%
Contractual term (years)	1.4	2.2
Discount rate	1.70%	2.48%
Dividend rate	0%	0%
Exercise price	$80.00	$80.00

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

	Derivative Obligation
	September 30, 2019		December 31, 2018
Balance	$	3,000	$	1,000
Level 1	$	--	$	--
Level 2	$	--	$	--
Level 3	$	3,000	$	1,000

Derivative Instruments, Gain (Loss) [Table Text Block]

	Amount
Balance – December 31, 2018	$	1,000
Change in fair value of derivative obligation		2,000
Balance – September 30, 2019	$	3,000

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 12, 2019
Document Information [Line Items]
Entity Registrant Name	ThermoGenesis Holdings, Inc.
Entity Central Index Key	0000811212
Trading Symbol	thmo
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		2,843,601
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Title of 12(b) Security	Common Stock, $.001 par value

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	[1]	Noncontrolling Interest [Member]	Total
Balance (in shares) at Dec. 31, 2017	1,090,664
Balance at Dec. 31, 2017	$ 1,000	$ 221,381,000	$ (187,640,000)	$ (43,000)		$ (487,000)	$ 33,212,000
Stock-based compensation		137,000					137,000
Foreign currency translation				7,000			7,000
Net loss			(2,960,000)			(410,000)	(3,370,000)
Issuance of pre-funded warrants in financing, net of offering costs		1,213,000					1,213,000
Issuance of common stock and pre-funded warrants, net of offering costs (in shares)	60,697
Cumulative-effect adjustment from adoption of ASC 606			(79,000)				(79,000)
Balance (in shares) at Mar. 31, 2018	1,151,361
Balance at Mar. 31, 2018	$ 1,000	222,731,000	(190,679,000)	(36,000)		(897,000)	31,120,000
Balance (in shares) at Dec. 31, 2017	1,090,664
Balance at Dec. 31, 2017	$ 1,000	221,381,000	(187,640,000)	(43,000)		(487,000)	33,212,000
Foreign currency translation							51,000
Balance (in shares) at Sep. 30, 2018	2,168,067
Balance at Sep. 30, 2018	$ 2,000	235,711,000	(220,276,000)	8,000		(1,575,000)	13,870,000
Balance (in shares) at Mar. 31, 2018	1,151,361
Balance at Mar. 31, 2018	$ 1,000	222,731,000	(190,679,000)	(36,000)		(897,000)	31,120,000
Stock-based compensation		163,000					163,000
Exercise of pre-funded warrants (in shares)	269,167
Exercise of pre-funded warrants		27,000					27,000
Discount due to beneficial conversion features		7,200,000					7,200,000
Foreign currency translation				21,000			21,000
Net loss			(27,008,000)			(503,000)	(27,511,000)
Issuance of pre-funded warrants in financing, net of offering costs	$ 1,000	4,791,000					4,792,000
Issuance of common stock and pre-funded warrants, net of offering costs (in shares)	647,497
Stock-based compensation (in shares)	42
Balance (in shares) at Jun. 30, 2018	2,068,067
Balance at Jun. 30, 2018	$ 2,000	234,912,000	(217,687,000)	(15,000)		(1,400,000)	15,812,000
Stock-based compensation		175,000					175,000
Foreign currency translation				23,000			23,000
Net loss			(2,589,000)			(175,000)	(2,764,000)
Issuance of pre-funded warrants in financing, net of offering costs		624,000					624,000
Issuance of common stock and pre-funded warrants, net of offering costs (in shares)	100,000
Cumulative-effect adjustment from adoption of ASC 606
Balance (in shares) at Sep. 30, 2018	2,168,067
Balance at Sep. 30, 2018	$ 2,000	235,711,000	(220,276,000)	8,000		(1,575,000)	13,870,000
Balance (in shares) at Dec. 31, 2018	2,168,337
Balance at Dec. 31, 2018	$ 2,000	235,888,000	(227,435,000)	(13,000)		(1,711,000)	6,731,000
Stock-based compensation		81,000					81,000
Exercise of pre-funded warrants (in shares)	50,000
Exercise of pre-funded warrants		5,000					5,000
Discount due to beneficial conversion features		1,513,000					1,513,000
Reorganization of subsidiary and related change in non-controlling interest		(2,843,000)				2,843,000
Foreign currency translation				(4,000)			(4,000)
Net loss			(1,871,000)			(176,000)	(2,047,000)
Balance (in shares) at Mar. 31, 2019	2,218,337
Balance at Mar. 31, 2019	$ 2,000	234,644,000	(229,306,000)	(17,000)		956,000	6,279,000
Balance (in shares) at Dec. 31, 2018	2,168,337
Balance at Dec. 31, 2018	$ 2,000	235,888,000	(227,435,000)	(13,000)		(1,711,000)	6,731,000
Reorganization of subsidiary and related change in non-controlling interest						2,843,000
Foreign currency translation							9,000
Balance (in shares) at Sep. 30, 2019	2,704,837
Balance at Sep. 30, 2019	$ 3,000	236,830,000	(232,885,000)	(4,000)		687,000	4,631,000
Balance (in shares) at Mar. 31, 2019	2,218,337
Balance at Mar. 31, 2019	$ 2,000	234,644,000	(229,306,000)	(17,000)		956,000	6,279,000
Stock-based compensation		125,000					125,000
Exercise of pre-funded warrants (in shares)	150,000
Exercise of pre-funded warrants		18,000					18,000
Discount due to beneficial conversion features		800,000					800,000
Foreign currency translation				(3,000)			(3,000)
Net loss			(1,297,000)			(178,000)	(1,475,000)
Issuance of pre-funded warrants in financing, net of offering costs		756,000					756,000
Balance (in shares) at Jun. 30, 2019	2,368,337
Balance at Jun. 30, 2019	$ 2,000	236,343,000	(230,603,000)	(20,000)		778,000	6,500,000
Stock-based compensation		253,000					253,000
Exercise of pre-funded warrants (in shares)	216,500
Exercise of pre-funded warrants	$ 1,000	18,000					19,000
Foreign currency translation				16,000			16,000
Net loss			(2,282,000)			(91,000)	(2,373,000)
Conversion of note payable to stock (in shares)	120,000
Conversion of note payable to stock		216,000					216,000
Balance (in shares) at Sep. 30, 2019	2,704,837
Balance at Sep. 30, 2019	$ 3,000	$ 236,830,000	$ (232,885,000)	$ (4,000)		$ 687,000	$ 4,631,000

[1] Accumulated other comprehensive loss.

XML

Note 8 - Stockholder's Equity - Stock-based Compensation (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Share-based Payment Arrangement, Expense	$ 253,000	$ 175,000	$ 459,000	$ 475,000
Cost of Sales [Member]
Share-based Payment Arrangement, Expense	1,000	3,000	2,000	9,000
Selling and Marketing Expense [Member]
Share-based Payment Arrangement, Expense	110,000	11,000	166,000	29,000
Research and Development Expense [Member]
Share-based Payment Arrangement, Expense	38,000	30,000	75,000	86,000
General and Administrative Expense [Member]
Share-based Payment Arrangement, Expense	$ 104,000	$ 131,000	$ 216,000	$ 351,000

XML

Note 9 - Segment Reporting - Summary of Operating Results by Reportable Segments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Net revenues	$ 4,058,000	$ 3,113,000	$ 11,325,000	$ 6,984,000
Cost of revenues	2,163,000	2,458,000	6,220,000	5,614,000
Gross profit	1,895,000	655,000	5,105,000	1,370,000
Operating expenses	2,225,000	2,590,000	6,602,000	37,066,000
Operating income (loss)	(330,000)	(1,935,000)	(1,497,000)	(35,696,000)
Depreciation and amortization	202,000	174,000	604,000	506,000
Stock-based compensation expense	253,000	175,000	459,000	475,000
Goodwill	781,000		781,000		$ 781,000
Total assets	17,591,000	21,599,000	17,591,000	21,599,000	$ 14,611,000
Impairment Charges				27,202,000
Clinical Development [Member]
Net revenues	13,000	54,000	69,000	162,000
Clinical Development [Member] | Operating Segments [Member]
Net revenues	4,045,000	3,059,000	11,256,000	6,822,000
Cost of revenues	2,126,000	2,383,000	6,082,000	5,419,000
Gross profit	1,919,000	676,000	5,174,000	1,403,000
Operating expenses	1,871,000	1,969,000	5,295,000	6,858,000
Operating income (loss)	48,000	(1,293,000)	(121,000)	(5,455,000)
Depreciation and amortization	149,000	100,000	381,000	296,000
Stock-based compensation expense	201,000	8,000	294,000	88,000
Goodwill	781,000		781,000
Total assets	15,620,000	10,213,000	15,620,000	10,213,000
Impairment Charges
Device [Member]
Net revenues	4,045,000	3,059,000	11,256,000	6,822,000
Device [Member] | Operating Segments [Member]
Net revenues	13,000	54,000	69,000	162,000
Cost of revenues	37,000	75,000	138,000	195,000
Gross profit	(24,000)	(21,000)	(69,000)	(33,000)
Operating expenses	354,000	621,000	1,307,000	30,208,000
Operating income (loss)	(378,000)	(642,000)	(1,376,000)	(30,241,000)
Depreciation and amortization	53,000	74,000	223,000	210,000
Stock-based compensation expense	52,000	167,000	165,000	387,000
Goodwill
Total assets	$ 1,971,000	$ 11,386,000	$ 1,971,000	11,386,000
Impairment Charges				$ 27,202,000

XML

Note 3 - Related Party Transactions

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

3. Related Party Transactions

Convertible Promissory Note and Revolving Credit Agreement

In

March 2017,

ThermoGenesis Holdings entered into a Credit Agreement with Boyalife Investment Fund II, Inc., which later merged into Boyalife Asset Holding 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 and its subsequent amendments, grants to the Company the right to borrow up to

$10,000,000

(the “Loan”) at any time prior to

March 6, 2022 (

the “Maturity Date”). The Company has drawn down a total of

$8,713,000

and

$7,200,000

as of

September 30, 2019

and

December 31, 2018,

respectively. The Company’s ability to draw-down the remaining

$1,287,000

may

be impacted by reasons such as default or foreign government policies that restrict or prohibit transferring funds. At the time of this filing, we are currently unable to draw down on the line of credit. This

may

change in the near future but there is

no

assurance that the line of credit will become available at such time when it is needed.

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. The Company has

five

business days after the Lender demands payment to pay the interest due before the Loan is considered in default. The Note can be prepaid in whole or in part by the Company at any time without penalty.

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.

The Credit Agreement and Note were amended in

April 2018.

The amendment granted the Lender the right to convert, at any time, outstanding principal and accrued but unpaid interest into shares of Common Stock at a conversion price of

$16.10

per share and if the Company issues shares of Common Stock at a lower price per share, the conversion price of the Note is lowered to the reduced amount. The Company completed

two

transactions in

2018,

lowering the conversion price to

$1.80.

It was concluded that the conversion option contained a beneficial conversion feature and as a result of the modifications to the conversion price, the Company recorded a debt discount in the amount of

$7,200,000

and added

$1,513,000

to the debt discount as a result of the draw-down during the quarter ended

March 31, 2019. 

Such discount represented the fair value of the incremental shares up to the proceeds received from the convertible notes.  The Company amortized

$586,000

and

$1,758,000

of such debt discount to interest expense for the

three

and

nine

months ended

September 30, 2019,

and

$450,000

and

$800,000

for the

three

and

nine

months ended

September 30, 2018.  

In addition to the amortization, the Company also recorded interest expense of

$471,000

and

$1,398,000

during the

three

and

nine

months ended

September 30, 2019,

and

$385,000

and

$1,128,000

for the

three

and

nine

months ended

September 30, 2018. 

As of

September 30, 2019,

the Company had an interest payable balance of

$1,398,000

as compared to

$1,513,000

at

December 31, 2018

related to the Note.

Distributor Agreement

On

August 21, 2017,

the Company 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 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 our products in the Territories.

The term of the agreement is for

three

years with the Company having the right to renew the agreement for successive

two

-year periods at its option. However, the Company has the right to terminate the agreement early if Boyalife W.S.N. fails to meet specified minimum purchase requirements.

During the

three

and

nine

months ended

September 30, 2019,

the Company recorded revenues from Boyalife of

$214,000

and

$794,000,

and

$267,000

and

$536,000

for the

three

and

nine

months ended

September 30, 2018

respectively, related to the aforementioned distributor agreement.

License Agreement

On

March 12, 2018,

ThermoGenesis entered into a License Agreement (the “Agreement”) with IncoCell Tianjin Ltd., a wholly-owned subsidiary of Boyalife Group (IncoCell). Boyalife Group is an affiliate of the Company’s Chief Executive Officer and Chairman of the Board of Directors, and Boyalife (Hong Kong) Limited, the Company’s largest stockholder.  Under the terms of the Agreement, ThermoGenesis granted IncoCell an exclusive license to use the ThermoGenesis

X

-Series

®

products in the conduct of IncoCell’s contract manufacturing and development operations in the People’s Republic of China, Japan, South Korea, Taiwan, Hong Kong, Macau, Singapore, Malaysia, Indonesia and India (the “Territories”).

Pursuant to the terms of the Agreement, ThermoGenesis granted IncoCell an exclusive license to purchase and use, at a discounted purchase price,

X

-Series cellular processing research devices, consumables, and kits for use in the conduct of contract manufacturing and development services in the Territories. In exchange, ThermoGenesis is entitled to a percentage of IncoCell’s gross contract development revenues, including any potential upfront payments, future milestones or royalty payments, during the term of the Agreement. The term of the Agreement is

ten

years, provided that either party

may

terminate the Agreement earlier upon

ninety

(

90

) days’ prior notice to the other party. The Company recorded revenue of

$82,000

related to product sales under this agreement during the

three

and

nine

months ended

September 30, 2019,

and

$7,000

for the

three

and

nine

months ended

September 30, 2018.

The Company recorded

no

revenue under the contract development portion of the Agreement for the

three

and

nine

months ended

September 30, 2019

and

2018.

XML

Note 1 - Basis of Presentation and Summary of Significant Accounting Policies (Details Textual)		3 Months Ended	9 Months Ended
	Jun. 04, 2019	Mar. 31, 2019 USD ($)	Sep. 30, 2019 USD ($) shares	Jan. 01, 2019	Dec. 31, 2018 USD ($) shares	Mar. 31, 2017 USD ($)
Stockholders' Equity Attributable to Noncontrolling Interest, Ending Balance			$ 687,000		$ (1,711,000)
Reorganization of Subsidiary and Related Change in Non-controlling Interest
Common Stock, Shares Authorized | shares			350,000,000		350,000,000
Cash and Cash Equivalents, at Carrying Value, Ending Balance			$ 2,800,000		$ 2,400,000
Working Capital			5,435,000		$ 2,261,000
Boyalife Investment Fund II, Inc. [Member] | Revolving Credit Facility [Member]
Long-term Line of Credit, Total			8,713,000
Line of Credit Facility, Maximum Borrowing Capacity			10,000,000			$ 10,000,000
Reverse Stock Split [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio	10
Noncontrolling Interest [Member]
Reorganization of Subsidiary and Related Change in Non-controlling Interest		$ 2,843,000	2,843,000
ThermoGenesis [Member]
Ownership in Subsidiary Exchanged				20.00%
Noncontrolling Interest, Ownership Percentage by Parent				100.00%
Stockholders' Equity Attributable to Noncontrolling Interest, Ending Balance			(1,711,000)
CAR-TXpress [Member]
Minority Interest Acquired Through Exchange				20.00%
Noncontrolling Interest, Ownership Percentage by Parent				80.00%
Stockholders' Equity Attributable to Noncontrolling Interest, Ending Balance			$ 1,100,000

XML

Note 6 - Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Product Warranty Liability [Table Text Block]

Balance at December 31, 2018	$	186,000
Warranties issued during the period		242,000
Settlements made during the period		(141,000	)
Changes in liability for pre-existing warranties during the period		(39,000	)
Balance at September 30, 2019	$	248,000

XML

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Organization and Basis of Presentation

ThermoGenesis Holdings, Inc. (“ThermoGenesis Holdings,” or the “Company”), formerly known as Cesca Therapeutics Inc., develops, commercializes and markets a range of automated technologies for CAR-T and other cell-based therapies. The Company currently markets a full suite of solutions for automated clinical biobanking, point-of-care applications, and automation for immuno-oncology, including its semi-automated, functionally closed CAR-TXpress™ platform, which streamlines the manufacturing process for the emerging CAR-T immunotherapy market. The Company was founded in

1986

and is registered in the State of Delaware and headquartered in Rancho Cordova, CA. 

ThermoGenesis Corp. (ThermoGenesis Corp), the Company’s fully owned device subsidiary, provides the AutoXpress

®

and BioArchive

®

platforms for automated clinical bio-banking, PXP

®

platform for point-of-care cell-based therapies and CAR-TXpress™ platform under development for bio-manufacturing for immuno-oncology applications.  The Company, along with its fully owned device subsidiary, currently manufactures and markets the following products:

For Clinical Bio-Banking Applications:

• AXP ® Automated Cell Separation System – an automated, fully closed cell separation system for isolating and retrieving stem and progenitor cells from umbilical cord blood.

• BioArchive ® Automated Cryopreservation System – an automated, robotic, liquid nitrogen controlled-rate-freezing and cryogenic storage system for cord blood samples and cell therapeutic products used in clinical applications.

For

Point-of-Care

Applications:

• PXP ® Point-of-Care System – an automated, fully closed, sterile system allows for the rapid, automated processing of autologous peripheral blood or bone marrow aspirate derived stem cells at the point-of-care, such as surgical centers or clinics.

For

Large Scale Cell Processing and Biomanufacturing

:

• X -Series Products: X -Lab ® for cell isolation, X -Wash ® System for cell washing and reformulation, X -Mini ® for high efficiency small scale cell purification, and X -BACS ™ System under development for large scale cell purification using our proprietary buoyance-activated cell sorting (BACS) technology.

• CAR-TXpress™ Platform – a modular designed, functionally closed platform that addresses the critical unmet need for large scale cellular processing and chemistry, manufacturing and controls (CMC) needs for manufacturing chimeric antigen receptor (CAR) T cell therapies.

On

January 1, 2019,

the Company entered into a reorganization of the business and equity ownership of its majority-owned ThermoGenesis Corp. subsidiary.  Pursuant to the reorganization, the assets acquired by ThermoGenesis Corp. from SynGen Inc. in

July 2017

were contributed to a newly formed Delaware subsidiary of ThermoGenesis Corp. named CARTXpress Bio, Inc. (CARTXpress Bio) and the

20%

interest in ThermoGenesis Corp. held by a

third

party was exchanged for a

20%

interest in CARTXpress Bio.  As a result, the Company holds an

80%

equity interest in CARTXpress Bio and the Company has become the owner of

100%

of ThermoGenesis Corp.  The purpose of the reorganization is to allow CARTXpress Bio to focus on the development and commercialization of the newly launched CARTXpress Bio cellular manufacturing platform. 

The Company reacquired the non-controlling interest shares in ThermoGenesis Corp. with a deficit of

$1,711,000

in exchange for

20%

equity interest in the newly created subsidiary, CARTXpress Bio, which approximates

$1,100,000.

  The total amount of

$2,843,000

related to reorganization of subsidiary and related change in non-controlling interest was recorded in the statement of stockholders’ equity. 

ThermoGenesis Holdings is an affiliate of the Boyalife Group, a global diversified life science holding company that focuses on stem cell technology and cell-based therapeutics.

Reverse Stock Split [Policy Text Block]

Reverse Stock Split

On

June 4, 2019,

the Company effected a

one

(

1

) for

ten

(

10

) reverse stock split of its issued and outstanding common stock.  The total number of shares of common stock authorized for issuance by the Company of

350,000,000

shares did

not

change in connection with the reverse stock split. 

All historical share amounts disclosed herein have been retroactively restated to reflect the reverse split and subsequent share exchange. 

No

fractional shares were issued as a result of the reverse stock split, as fractional shares of common stock were rounded up to the nearest whole share.

Substantial Doubt about Going Concern [Policy Text Block]

Liquidity and Going Concern

The Company has a Revolving Credit Agreement (Credit Agreement) with Boyalife Asset Holding II, Inc. (Refer to Note

3

). As of

September 30, 2019,

the Company had drawn down

$8,713,000

of the

$10,000,000

available under the Credit Agreement. Future draw-downs

may

be limited for various reasons including default or foreign government policies that restrict or prohibit transferring funds. At the time of this filing, we are currently unable to draw down on the line of credit. This

may

change in the near future but there is

no

assurance that the line of credit will become available at such time when it is needed. Boyalife Asset Holding 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.

At

September 30, 2019,

the Company had cash and cash equivalents of

$2,800,000

and working capital of

$5,435,000,

as compared to

$2,400,000

and

$2,261,000

respectively at

December 31, 2018. 

These recurring losses raise substantial doubt about the Company’s ability to continue as a going concern within

one

year after the issuance date of these financial statements. The Company anticipates requiring additional capital to grow the business, to fund other operating expenses and to make interest payments on the line of credit with Boyalife Asset Holding II, Inc.  The Company’s ability to fund its cash needs is subject to various risks, many of which are beyond its control. The Company

may

seek additional funding through bank borrowings or public or private sales of debt or equity securities or strategic partnerships. The Company cannot guarantee that such funding will be available on a timely basis, in needed quantities or on terms favorable to the Company, if at all.

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so.  The condensed consolidated financial statements do

not

include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that

may

result should the Company be unable to continue as a going concern.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The condensed consolidated financial statements include the accounts of ThermoGenesis Holdings and its wholly-owned subsidiaries, ThermoGenesis Corp. and TotipotentRX Cell Therapy, Pvt. Ltd and ThermoGenesis Corp’s majority-owned subsidiary, CARTXpress Bio. All significant intercompany accounts and transactions have been eliminated upon consolidation.

Interim Reporting [Policy Text Block]

Interim Reporting

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and with the instructions to Form

10

-Q and Article

8

of Regulation S-

X.

Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such Securities and Exchange Commission (SEC) rules and regulations and accounting principles applicable for interim periods. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Events subsequent to the balance sheet date have been evaluated for inclusion in the accompanying condensed consolidated financial statements through the date of issuance. Operating results for the

three

and

nine

month periods ended

September 30, 2019

are

not

necessarily indicative of the results that

may

be expected for the year ending

December 31, 2019.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in ThermoGenesis Holdings Annual Report on Form

10

-K for the year ended

December 31, 2018.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Standards

In

June 2018,

the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)

2018

-

07,

“Compensation-Stock Compensation (Topic

718

): Improvements to Nonemployee Share-Based Payment Accounting”

, which simplifies the accounting for nonemployee share-based payment transactions. The amendments specify that Topic

718

applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The Company adopted the standard on

January 1, 2019.

The adoption of this standard did

not

have a material impact on the Company’s financial statements.

In

February 2016,

the FASB issued ASU

2016

-

02

“

Leases

,” which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The Company adopted the standard on

January 1, 2019.

The new standard requires lessees to recognize both the right-of-use assets and lease liabilities in the balance sheet for most leases, whereas under previous GAAP only finance lease liabilities (previously referred to as capital leases) were recognized in the balance sheet. In addition, the definition of a lease has been revised which

may

result in changes to the classification of an arrangement as a lease. Under the new standard, an arrangement that conveys the right to control the use of an identified asset by obtaining substantially all of its economic benefits and directing how it is used as a lease, whereas the previous definition focuses on the ability to control the use of the asset or to obtain its output. Quantitative and qualitative disclosures related to the amount, timing and judgements of an entity’s accounting for leases and the related cash flows are expanded. Disclosure requirements apply to both lessees and lessors, whereas previous disclosures related only to lessees. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have

not

significantly changed from previous GAAP. Lessor accounting is also largely unchanged.

The new standard provides a number of transition practical expedients, which the Company has elected, including:

● A “package of three” expedients that must be taken together and allow entities to ( 1 ) not reassess whether existing contracts contain leases, ( 2 ) carryforward the existing lease classification, and ( 3 ) not reassess initial direct costs associated with existing leases, and

● An implementation expedient which allows the requirements of the standard in the period of adoption with no restatement of prior periods.

The impact of adoption did

not

have a material impact to the Company as of

January 1, 2019

as the Company’s finance leases are immaterial and its operating leases had terms shorter than

one

year.  In

January 2019,

the Company signed an amendment to its lease for office space at its corporate headquarters in Rancho Cordova, CA.  The amendment extended the lease term by

five

years and was accounted for as a modification.  At that time, the Company recorded lease assets and liabilities of

$966,000

and

no

cumulative effect adjustment to retained earnings.

Revenue from Contract with Customer [Policy Text Block]

Revenue Recognition

Revenue is recognized based on the

five

-step process outlined in Accounting Standards Codification (ASC)

606.

The following tables summarize the revenues of the Company’s reportable segments and product lines:

	Three Months Ended September 30, 2019
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	2,255,000	$	51,000	$	--	$	2,306,000
BioArchive		243,000		351,000		--		594,000
Manual Disposables		212,000		--		--		212,000
CAR-TXpress		875,000		6,000		33,000		914,000
Other		--		--		19,000		19,000
Total Device Segment		3,585,000		408,000		52,000		4,045,000
Clinical Development Segment:
Manual Disposables		9,000		--		--		9,000
Other		--		4,000		--		4,000
Total Clinical Development		9,000		4,000		--		13,000
Total		3,594,000		412,000		52,000	$	4,058,000

	Nine Months Ended September 30, 2019
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	6,550,000	$	160,000	$	--	$	6,710,000
BioArchive		1,274,000		1,117,000		--		2,391,000
Manual Disposables		711,000		--		--		711,000
CAR-TXpress		1,365,000		6,000		33,000		1,404,000
Other		--		--		40,000		40,000
Total Device Segment		9,900,000		1,283,000		73,000		11,256,000
Clinical Development Segment:
Manual Disposables		53,000		--		--		53,000
Other		5,000		11,000		--		16,000
Total Clinical Development		58,000		11,000		--		69,000
Total		9,958,000		1,294,000		73,000		11,325,000

	Three Months Ended September 30, 2018
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	1,396,000	$	70,000	$	--	$	1,466,000
BioArchive		485,000		314,000		--		799,000
Manual Disposables		254,000		--		--		254,000
CAR-TXpress		517,000		--		--		517,000
Other		--		--		23,000		23,000
Total Device Segment		2,652,000		384,000		23,000		3,059,000
Clinical Development Segment:
Manual Disposables		8,000		--		--		8,000
Bone Marrow		--		40,000		--		40,000
Other		--		6,000		--		6,000
Total Clinical Development		8,000		46,000		--		54,000
Total	$	2,660,000	$	430,000	$	23,000	$	3,113,000

	Nine Months Ended September 30, 2018
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
Device Segment:
AXP	$	2,930,000	$	201,000	$	--	$	3,131,000
BioArchive		1,357,000		969,000		--		2,326,000
Manual Disposables		716,000		--		--		716,000
CAR-TXpress		547,000		--		--		547,000
Other		46,000		--		56,000		102,000
Total Device Segment		5,596,000		1,170,000		56,000		6,822,000
Clinical Development Segment:
Manual Disposables		31,000		--		--		31,000
Bone Marrow		--		101,000		--		101,000
Other		--		30,000		--		30,000
Total Clinical Development		31,000		131,000		--		162,000
Total	$	5,627,000	$	1,301,000	$	56,000	$	6,984,000

Contract Balances

Generally, all sales are contract sales (with either an underlying contract or purchase order). The Company does

not

have any material contract assets. When invoicing occurs prior to revenue recognition a contract liability is recorded (as deferred revenue on the consolidated balance sheet). Revenues recognized during the

three

and

nine

months ended

September 30, 2019

that were included in the beginning balance of deferred revenue were

$50,000

and

$480,000,

respectively. Short term deferred revenues increased from

$485,000

at

December 31, 2018

to

$840,000

at

September 30, 2019.

Supply

Agreement

On

August 30, 2019,

the Company entered into a supply agreement with a global distributor for substantially all

X

-Series® products under the CAR-TXpress™ platform (the “Products”). The agreement has an initial term of

five

years with automatic

two

-year renewal terms, unless terminated by either party in accordance with the terms of the agreement. Pursuant to the agreement, the Company has granted exclusive worldwide distribution rights for

X

-Series products, for the duration of the term, subject to certain geographical and other exceptions. In addition, the Company has granted rights of

first

refusal for the exclusive worldwide distribution of certain future products developed or introduced by the Company relating to cell isolation or cell selection, including any such products substantially related or similar to the Products (the “ROFR Products”). As consideration for the exclusive worldwide distribution rights for the Products and ROFR Products, the Company will receive a

$2,000,000

fee, in addition to any amounts payable throughout the term for the Products and any ROFR Products. The agreement also contains an option, exercisable by the global distributor at any time following

January 1, 2021,

to become the manufacturer for all or any portion of the Products.

The agreement contains covenants by the Company to negotiate in good faith regarding price reductions for the Products and, commencing in

2020,

cost reduction efforts with respect to development and manufacture of the Products. Moreover, the agreement contains a most-favored customer provision with respect to the pricing made available for the Products during the term. The agreement contains mutual indemnification provisions, as well as standard warranties with respect to the Products, including that the Products supplied and the services provided (including customer support services for Products sold) be manufactured or performed, as applicable, in a

first

class, workmanlike manner by personnel properly trained.

Fair Value Measurement, Policy [Policy Text Block]

Fair Value Measurements

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 to sell 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:

Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level

3:

Unobservable inputs reflecting the reporting entity’s own assumptions.

The carrying values of cash and cash equivalents, accounts receivable and accounts payable 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. The impairment of goodwill and intangible assets is a non-recurring Level

3

fair value measurement.

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 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 Device Segment, engages in the development and commercialization of automated technologies for cell-based therapeutics and bio-processing. The device division is operated through the Company’s ThermoGenesis Corp. subsidiary.

● The Clinical Development Segment, utilizes autologous stem cell-based therapeutics in the vascular and orthopedic markets through the Company’s TotipotentRX subsidiary in Gurgaon, India.

Earnings Per Share, Policy [Policy Text Block]

Net Loss per Share

Net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding plus the pre-funded warrants (as described in Footnote

8

). For the purpose of calculating basic net loss per share, the additional shares of common stock that are issuable upon exercise of the pre-funded warrants have been included since the shares are issuable for a negligible consideration and have

no

vesting or other contingencies associated with them. There were

324,444

pre-funded warrants included in the quarter ended

September 30, 2019

calculation. 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 noted below is anti-dilutive due to the Company’s net loss position for all periods presented. Anti-dilutive securities consisted of the following at

September 30:

	2019		2018
Common stock equivalents of convertible promissory notes and accrued interest		6,013,667		4,626,667
Vested Series A warrants		40,442		40,442
Unvested Series A warrants (1)		69,853		69,853
Warrants – other		1,300,091		1,319,728
Stock options		296,029		118,830
Total		7,720,082		6,175,520

______________

( 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.

Reclassification, Policy [Policy Text Block]

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassifications did

not

have an impact on net loss as previously reported.

XML

Note 8 - Stockholders' Equity

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

8. Stockholders’ Equity

On

April 18, 2019,

the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company agreed to issue and sell to such investor (the

“April

Offering”)

444,445

pre-funded warrants to purchase shares of the Company’s common stock for a purchase price of

$1.70

per pre-funded warrant. The gross proceeds to the Company, excluding the proceeds, if any, from the exercise of the pre-funded warrants, was approximately

$756,000.

The

April

Offering closed on

April 26, 2019

and the pre-funded warrants were accounted for as equity by the Company.

Each pre-funded warrant is immediately exercisable for

one

share of common stock at an exercise price of

$0.10

per share and will remain exercisable until exercised in full. A holder of a pre-funded warrant will

not

have the right to exercise any portion of its warrant if the holder, together with its affiliates, would beneficially own in excess of

4.99%

or

9.99%,

as applicable, of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that the holder

may

increase or decrease the Beneficial Ownership Limitation, although any increase will

not

be effective until the

61st

day after a notice of increase is delivered to the Company and the holder

may

not

increase the Beneficial Ownership Limitation in excess of

9.99%.

Subject to certain exceptions, in the event the Company sells or issues any shares of common stock or common stock equivalents at a lower price during the period beginning on the closing date of the

April

Offering and ending on the date that is

three

-hundred and

sixty-five

(

365

) days following such date, the Company is required to issue the investor a number of shares of common stock (or additional pre-funded warrants to purchase shares of common stock) equal to the number of shares the investor would have received had the purchase price for such shares been at such lower purchase price.

Stock Based Compensation

The Company recorded stock-based compensation of

$253,000

and

$459,000

for the

three

and

nine

months ended

September 30, 2019,

and

$175,000

and

$475,000

for the

three

and

nine

months ended

September 30, 2018,

respectively, as comprised of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Cost of revenues	$	1,000	$	3,000	$	2,000	$	9,000
Sales and marketing		110,000		11,000		166,000		29,000
Research and development		38,000		30,000		75,000		86,000
General and administrative		104,000		131,000		216,000		351,000
	$	253,000	$	175,000	$	459,000	$	475,000

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 December 31, 2018		302,368		$	13.99
Granted		10,200		$	4.38
Forfeited		(16,539	)	$	11.50
Outstanding at September 30, 2019		296,029		$	13.80		8.6	$	763,499
Vested and expected to vest at September 30, 2019		215,932		$	15.95		8.4	$	525,700
Exercisable at September 30, 2019		94,978		$	25.70		7.6	$	171,726

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 exercised during the

nine

months ended

September 30, 2019.

Warrants

A summary of warrant activity for the

nine

months ended

September 30, 2019

follows:

	Number of Shares			Weighted-Average Exercise Price Per Share
Balance at December 31, 2018		1,726,523		$	29.88
Warrants granted (1)		444,445		$	0.10
Warrants expired		(19,637	)	$	417.00
Warrants exercised		(416,500	)	$	0.10
Outstanding at September 30, 2019		1,734,831		$	25.02
Exercisable at September 30, 2019		1,664,978		$	22.72

_______________________

( 1 ) See Footnote 1 of the Notes to the Condensed Consolidated Financial Statements.

XML

Note 4 - Convertible Promissory Note

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

4. Convertible Promissory Note

On

January 29, 2019,

the Company agreed to issue and sell an unsecured note payable to an accredited investor (the “Accredited Investor”) for an aggregate of

$800,000

face value (the

“January 2019

Note”) that, after

six

months, is convertible into shares of the Company's common stock at a conversion price equal to the lower of (a)

$1.80

per share or (

2

)

90%

of the closing sale price of the Company’s common stock on the date of conversion (subject to a floor conversion price of

$0.50

).

The

January 2019

Note bears interest at the rate of

twenty-four

percent (

24%

) per annum and is payable quarterly in arrears. Unless sooner converted in the manner described below, all principal under the

January 2019

Note, together with all accrued and unpaid interest thereupon, will be due and payable

eighteen

(

18

) months from the date of the issuance of the

January 2019

Note. The

January 2019

Note

may

be prepaid without penalty at any time after it becomes convertible (at which time the holder will have the right to convert it before prepayment thereof).

On the date that is

six

months after the issuance of the

January 2019

Note, and for so long thereafter as any principal and accrued but unpaid interest under the

January 2019

Note remains outstanding, the holder of the

January 2019

Note

may

convert such holder’s

January 2019

Note, in whole or in part, into a number of shares of the Company’s common stock equal to (i) the principal amount being converted, together with any accrued or unpaid interest thereon, divided by (ii) the conversion price in effect at the time of conversion.  The

January 2019

Note has customary conversion blockers at

4.99%

and

9.99%

unless otherwise agreed to by the Company and the holder. It was concluded that the conversion option was beneficial. Accordingly, the Company recorded a debt discount in the amount of

$800,000,

upon stockholder approval of the conversion feature, which occurred on

May 30, 2019. 

The discount represented the fair value of the incremental shares up to the proceeds received from the convertible note.  The Company amortized

$60,000

and

$117,000

of the debt discount to interest expense for the

three

and

nine

months ended

September 30, 2019,

respectively.

The

January 2019

Note contains customary events of default, including the suspension or failure of the Company’s common stock to be traded on a trading platform, the Company’s failure to pay interest or principal when due, or if the Company files for bankruptcy or takes some other similar action for the benefit of creditors. In the event of any default under the

January 2019

Note, the holder

may

accelerate all outstanding interest and principal due on the

January 2019

Note.

On

July 23, 2019,

the Company entered into Amendment

No.

1

to the

January 2019

Note (“Amended Note”). Under the terms of the amendment, the maturity date of the

January 2019

Note was extended from

July 29, 2020

to

July 31, 2022. 

All other terms of the

January 2019

Note remain the same.  The Amended Note was accounted for as an extinguishment of the

January 2019

Note as the change in the fair value of the embedded conversion option featured in the

January 2019

Note immediately before and after the amendment exceeded

10%

of the carrying amount of the

January 2019

Note. According, the Company recorded a loss on the constructive extinguishment of this debt in the amount of

$840,000.

  The fair value of the Amended Note, which amounted to

$1,473,000

was recorded as liability.  The Company also evaluated the conversion option embedded in the Amended Note and determined it was beneficial. Accordingly, the Company recorded a debt discount in the amount of

$556,000

on the Amended Note.  The Company amortized

$

20,000

and

$57,000

of the debt discount for the

January 2019

Note to interest expense for the

three

and

nine

months ended

September 30, 2019,

respectively. The Company utilized a Monte Carlo simulation model to determine the fair value of the Amended Note. The key assumptions used in the simulation model were:

Stock price at date of issuance	$	3.05
Exercise price (1)	$	1.80
Risk-free interest rate		1.8	%
Expected dividend yield		--
Expected term (in years)		3.02
Expected volatility		93	%

( 1 ) For the exercise price, the model inputs also accounted for the fair value protection under the Amended Note, which allows for the holder to convert at the lower of $1.80 share or 90% of the listed price of the stock on the day of conversion, whichever is lower (subject to a floor of $0.50 ).

During the quarter ended

September 30, 2019,

the holder converted a portion of the face value of the note into shares of common stock.  In total,

$216,000

was converted into

120,000

shares of common stock.  Additionally, the unamortized premium for the portion of the note that was converted of

$30,000

was recorded to interest expense during the quarter ended

September 30, 2019. 

On

July 23, 2019,

the Company entered into a private placement with the Accredited Investor, pursuant to which the Company issued and sold to such investor an unsecured convertible promissory note in the original principal amount of

$1,000,000

(the

“July 2019

Note”).   After

six

months and subject to the receipt of stockholder approval of the conversion feature of the

July 2019

Note, such note is convertible into shares of the Company's common stock at a conversion price equal to the lower of (a)

$1.80

per share or (b)

90%

of the closing sale price of the Company’s common stock on the date of conversion (subject to a floor conversion price of

$0.50

).  The

July 2019

Note bears interest at the rate of

twenty-four

percent (

24%

) per annum and is payable quarterly in arrears.  Unless sooner converted in the manner described below, all principal under the

July 2019

Note, together with all accrued and unpaid interest thereupon, will be due and payable

three

years from the date of the issuance on

July 31, 2022. 

However, if stockholder approval of the conversion feature of the

July 2019

Note is

not

obtained at the Company’s next annual meeting of stockholders (expected to be in the

second

quarter of

2020

), the maturity date will accelerate to the date that is

fourteen

days after the next annual meeting. 

The

July 2019

Note

may

be prepaid without penalty at any time after it becomes convertible (at which time the holder will have the right to convert it before prepayment thereof). On the date that is

six

months after the issuance of the

July 2019

Note and after receiving stockholder approval of the conversion feature described above, the holder

may

convert the

July 2019

Note, in whole or in part, into a number of shares of the Company’s common stock equal to (i) the principal amount being converted, together with any accrued or unpaid interest thereon, divided by (ii) the conversion price in effect at the time of conversion.  The Company has accounted for the

July 2019

Note as a debt instrument until such time the conversion feature is approved by the Company’s stockholders. The Company will account for the conversion feature at the time of its effectiveness if approved.

XML

Note 5 - Leases (Details Textual) - USD ($)	1 Months Ended	3 Months Ended	9 Months Ended
	Jan. 31, 2019	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018
Operating Lease, Weighted Average Remaining Lease Term		4 years 255 days	4 years 255 days
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 966,000		$ 966,000
Operating Lease, Payments		$ 74,000	217,000
Operating Lease, Cost		$ 103,000	$ 309,000

XML

Note 6 - Commitments and Contingencies - Changes in Product Liability Included in Accrued Liabilities (Details)	9 Months Ended
	Sep. 30, 2019 USD ($)
Balance	$ 186,000
Warranties issued during the period	242,000
Settlements made during the period	(141,000)
Changes in liability for pre-existing warranties during the period	(39,000)
Balance	$ 248,000

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Accounts receivable, allowance for doubtful accounts	$ 278,000	$ 419,000
Inventories, reserves	399,000	258,000
Debt discount
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)	2,704,837	2,168,337
Common stock, shares outstanding (in shares)	2,704,837	2,168,337
Convertible Promissory Note [Member]
Debt discount	$ 5,781,000	$ 6,026,000

XML

Note 11 - Subsequent Events (Details Textual) - Subsequent Event [Member] - ImmuneCyte [Member] $ in Millions	Nov. 01, 2019 USD ($)
Equity Method Investment, Ownership Percentage	20.00%
Joint Venture Purchase, Percent of Company's Cost	115.00%
Line of Credit Facility, Maximum Borrowing Capacity	$ 1

XML

Note 1 - Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Business Description and Basis of Presentation [Text Block]

1. Basis of Presentation and Summary of Significant Accounting Policies

Organization and Basis of Presentation

ThermoGenesis Holdings, Inc. (“ThermoGenesis Holdings,” or the “Company”), formerly known as Cesca Therapeutics Inc., develops, commercializes and markets a range of automated technologies for CAR-T and other cell-based therapies. The Company currently markets a full suite of solutions for automated clinical biobanking, point-of-care applications, and automation for immuno-oncology, including its semi-automated, functionally closed CAR-TXpress™ platform, which streamlines the manufacturing process for the emerging CAR-T immunotherapy market. The Company was founded in

1986

and is registered in the State of Delaware and headquartered in Rancho Cordova, CA. 

ThermoGenesis Corp. (ThermoGenesis Corp), the Company’s fully owned device subsidiary, provides the AutoXpress

®

and BioArchive

®

platforms for automated clinical bio-banking, PXP

®

platform for point-of-care cell-based therapies and CAR-TXpress™ platform under development for bio-manufacturing for immuno-oncology applications.  The Company, along with its fully owned device subsidiary, currently manufactures and markets the following products:

For Clinical Bio-Banking Applications:

• AXP ® Automated Cell Separation System – an automated, fully closed cell separation system for isolating and retrieving stem and progenitor cells from umbilical cord blood.

• BioArchive ® Automated Cryopreservation System – an automated, robotic, liquid nitrogen controlled-rate-freezing and cryogenic storage system for cord blood samples and cell therapeutic products used in clinical applications.

For

Point-of-Care

Applications:

• PXP ® Point-of-Care System – an automated, fully closed, sterile system allows for the rapid, automated processing of autologous peripheral blood or bone marrow aspirate derived stem cells at the point-of-care, such as surgical centers or clinics.

For

Large Scale Cell Processing and Biomanufacturing

:

• X -Series Products: X -Lab ® for cell isolation, X -Wash ® System for cell washing and reformulation, X -Mini ® for high efficiency small scale cell purification, and X -BACS ™ System under development for large scale cell purification using our proprietary buoyance-activated cell sorting (BACS) technology.

• CAR-TXpress™ Platform – a modular designed, functionally closed platform that addresses the critical unmet need for large scale cellular processing and chemistry, manufacturing and controls (CMC) needs for manufacturing chimeric antigen receptor (CAR) T cell therapies.

On

January 1, 2019,

the Company entered into a reorganization of the business and equity ownership of its majority-owned ThermoGenesis Corp. subsidiary.  Pursuant to the reorganization, the assets acquired by ThermoGenesis Corp. from SynGen Inc. in

July 2017

were contributed to a newly formed Delaware subsidiary of ThermoGenesis Corp. named CARTXpress Bio, Inc. (CARTXpress Bio) and the

20%

interest in ThermoGenesis Corp. held by a

third

party was exchanged for a

20%

interest in CARTXpress Bio.  As a result, the Company holds an

80%

equity interest in CARTXpress Bio and the Company has become the owner of

100%

of ThermoGenesis Corp.  The purpose of the reorganization is to allow CARTXpress Bio to focus on the development and commercialization of the newly launched CARTXpress Bio cellular manufacturing platform. 

The Company reacquired the non-controlling interest shares in ThermoGenesis Corp. with a deficit of

$1,711,000

in exchange for

20%

equity interest in the newly created subsidiary, CARTXpress Bio, which approximates

$1,100,000.

  The total amount of

$2,843,000

related to reorganization of subsidiary and related change in non-controlling interest was recorded in the statement of stockholders’ equity. 

ThermoGenesis Holdings is an affiliate of the Boyalife Group, a global diversified life science holding company that focuses on stem cell technology and cell-based therapeutics.

Recent Corporate Name Change

On

November 1, 2019,

Cesca Therapeutics Inc. changed its corporate name to ThermoGenesis Holdings, Inc. in order to better reflect its new strategic focus on becoming a key solution provider for cell manufacturing tools and services in the cell and gene therapy markets.

Reverse Stock Split

On

June 4, 2019,

the Company effected a

one

(

1

) for

ten

(

10

) reverse stock split of its issued and outstanding common stock.  The total number of shares of common stock authorized for issuance by the Company of

350,000,000

shares did

not

change in connection with the reverse stock split. 

All historical share amounts disclosed herein have been retroactively restated to reflect the reverse split and subsequent share exchange. 

No

fractional shares were issued as a result of the reverse stock split, as fractional shares of common stock were rounded up to the nearest whole share.

Liquidity and Going Concern

The Company has a Revolving Credit Agreement (Credit Agreement) with Boyalife Asset Holding II, Inc. (Refer to Note

3

). As of

September 30, 2019,

the Company had drawn down

$8,713,000

of the

$10,000,000

available under the Credit Agreement. Future draw-downs

may

be limited for various reasons including default or foreign government policies that restrict or prohibit transferring funds. At the time of this filing, we are currently unable to draw down on the line of credit. This

may

change in the near future but there is

no

assurance that the line of credit will become available at such time when it is needed. Boyalife Asset Holding 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.

At

September 30, 2019,

the Company had cash and cash equivalents of

$2,800,000

and working capital of

$5,435,000,

as compared to

$2,400,000

and

$2,261,000

respectively at

December 31, 2018. 

These recurring losses raise substantial doubt about the Company’s ability to continue as a going concern within

one

year after the issuance date of these financial statements. The Company anticipates requiring additional capital to grow the business, to fund other operating expenses and to make interest payments on the line of credit with Boyalife Asset Holding II, Inc.  The Company’s ability to fund its cash needs is subject to various risks, many of which are beyond its control. The Company

may

seek additional funding through bank borrowings or public or private sales of debt or equity securities or strategic partnerships. The Company cannot guarantee that such funding will be available on a timely basis, in needed quantities or on terms favorable to the Company, if at all.

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so.  The condensed consolidated financial statements do

not

include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that

may

result should the Company be unable to continue as a going concern.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of ThermoGenesis Holdings and its wholly-owned subsidiaries, ThermoGenesis Corp. and TotipotentRX Cell Therapy, Pvt. Ltd and ThermoGenesis Corp’s majority-owned subsidiary, CARTXpress Bio. All significant intercompany accounts and transactions have been eliminated upon consolidation.

Interim Reporting

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and with the instructions to Form

10

-Q and Article

8

of Regulation S-

X.

Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such Securities and Exchange Commission (SEC) rules and regulations and accounting principles applicable for interim periods. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Events subsequent to the balance sheet date have been evaluated for inclusion in the accompanying condensed consolidated financial statements through the date of issuance. Operating results for the

three

and

nine

month periods ended

September 30, 2019

are

not

necessarily indicative of the results that

may

be expected for the year ending

December 31, 2019.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in ThermoGenesis Holdings Annual Report on Form

10

-K for the year ended

December 31, 2018.

XML

Note 7 - Derivative Obligations - Change in Fair Value of Derivative Liabilities (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Balance			$ 1,000
Change in fair value of derivative obligation	$ 2,000	$ (24,000)	2,000	$ (591,000)
Balance	$ 3,000		$ 3,000

XML

Note 8 - Stockholders' Equity - Warrant Activity (Details)	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Outstanding (in shares) | shares	1,726,523
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 29.88
Warrants granted(1) (in shares) | shares	444,445	[1]
Warrants granted(1) (in dollars per share) | $ / shares	$ 0.10	[1]
Warrants expired (in shares) | shares	(19,637)
Warrants expired, weighted average exercise price (in dollars per share) | $ / shares	$ 417
Warrants exercised (in shares) | shares	(416,500)
Warrants exercised, weighted average exercise price (in dollars per share) | $ / shares	$ 0.10
Outstanding (in shares) | shares	1,734,831
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 25.02
Exercisable (in shares) | shares	1,664,978
Exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 22.72

[1] See Footnote 1 of the Notes to the Condensed Consolidated Financial Statements.

XML

Note 8 - Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Share-based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Cost of revenues	$	1,000	$	3,000	$	2,000	$	9,000
Sales and marketing		110,000		11,000		166,000		29,000
Research and development		38,000		30,000		75,000		86,000
General and administrative		104,000		131,000		216,000		351,000
	$	253,000	$	175,000	$	459,000	$	475,000

Share-based Payment Arrangement, Option, Activity [Table Text Block]

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at December 31, 2018		302,368		$	13.99
Granted		10,200		$	4.38
Forfeited		(16,539	)	$	11.50
Outstanding at September 30, 2019		296,029		$	13.80		8.6	$	763,499
Vested and expected to vest at September 30, 2019		215,932		$	15.95		8.4	$	525,700
Exercisable at September 30, 2019		94,978		$	25.70		7.6	$	171,726

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

	Number of Shares			Weighted-Average Exercise Price Per Share
Balance at December 31, 2018		1,726,523		$	29.88
Warrants granted (1)		444,445		$	0.10
Warrants expired		(19,637	)	$	417.00
Warrants exercised		(416,500	)	$	0.10
Outstanding at September 30, 2019		1,734,831		$	25.02
Exercisable at September 30, 2019		1,664,978		$	22.72

XML

Note 4 - Convertible Promissory Note (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

	Series A
	September 30, 2019	December 31, 2018
Market price of common stock	$6.63	$2.70
Expected volatility	93%	94%
Contractual term (years)	1.4	2.2
Discount rate	1.70%	2.48%
Dividend rate	0%	0%
Exercise price	$80.00	$80.00

Convertible Debt [Member]

Notes Tables

Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

Stock price at date of issuance	$	3.05
Exercise price (1)	$	1.80
Risk-free interest rate		1.8	%
Expected dividend yield		--
Expected term (in years)		3.02
Expected volatility		93	%

XML

Note 2 - Summary of Significant Accounting Policies - Revenues (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net revenues	$ 4,058,000	$ 3,113,000	$ 11,325,000	$ 6,984,000
Device [Member]
Net revenues	4,045,000	3,059,000	11,256,000	6,822,000
Device [Member] | AXP [Member]
Net revenues	2,306,000	1,466,000	6,710,000	3,131,000
Device [Member] | BioArchive [Member]
Net revenues	594,000	799,000	2,391,000	2,326,000
Device [Member] | Manual Disposables [Member]
Net revenues	212,000	254,000	711,000	716,000
Device [Member] | CAR-TXpress [Member]
Net revenues	914,000	517,000	1,404,000	547,000
Device [Member] | Other Subsegments [Member]
Net revenues	19,000	23,000	40,000	102,000
Clinical Development [Member]
Net revenues	13,000	54,000	69,000	162,000
Clinical Development [Member] | Manual Disposables [Member]
Net revenues	9,000	8,000	53,000	31,000
Clinical Development [Member] | Other Subsegments [Member]
Net revenues	4,000	6,000	16,000	30,000
Clinical Development [Member] | Bone Marrow [Member]
Net revenues		40,000		101,000
Device Revenue [Member]
Net revenues	3,594,000	2,660,000	9,958,000	5,627,000
Device Revenue [Member] | Device [Member]
Net revenues	3,585,000	2,652,000	9,900,000	5,596,000
Device Revenue [Member] | Device [Member] | AXP [Member]
Net revenues	2,255,000	1,396,000	6,550,000	2,930,000
Device Revenue [Member] | Device [Member] | BioArchive [Member]
Net revenues	243,000	485,000	1,274,000	1,357,000
Device Revenue [Member] | Device [Member] | Manual Disposables [Member]
Net revenues	212,000	254,000	711,000	716,000
Device Revenue [Member] | Device [Member] | CAR-TXpress [Member]
Net revenues	875,000	517,000	1,365,000	547,000
Device Revenue [Member] | Device [Member] | Other Subsegments [Member]
Net revenues				46,000
Device Revenue [Member] | Clinical Development [Member]
Net revenues	9,000	8,000	58,000	31,000
Device Revenue [Member] | Clinical Development [Member] | Manual Disposables [Member]
Net revenues	9,000	8,000	53,000	31,000
Device Revenue [Member] | Clinical Development [Member] | Other Subsegments [Member]
Net revenues			5,000
Device Revenue [Member] | Clinical Development [Member] | Bone Marrow [Member]
Net revenues
Service [Member]
Net revenues	412,000	430,000	1,294,000	1,301,000
Service [Member] | Device [Member]
Net revenues	408,000	384,000	1,283,000	1,170,000
Service [Member] | Device [Member] | AXP [Member]
Net revenues	51,000	70,000	160,000	201,000
Service [Member] | Device [Member] | BioArchive [Member]
Net revenues	351,000	314,000	1,117,000	969,000
Service [Member] | Device [Member] | Manual Disposables [Member]
Net revenues
Service [Member] | Device [Member] | CAR-TXpress [Member]
Net revenues	6,000		6,000
Service [Member] | Device [Member] | Other Subsegments [Member]
Net revenues
Service [Member] | Clinical Development [Member]
Net revenues	4,000	46,000	11,000	131,000
Service [Member] | Clinical Development [Member] | Manual Disposables [Member]
Net revenues
Service [Member] | Clinical Development [Member] | Other Subsegments [Member]
Net revenues	4,000	6,000	11,000	30,000
Service [Member] | Clinical Development [Member] | Bone Marrow [Member]
Net revenues		40,000		101,000
Other [Member]
Net revenues	52,000	23,000	73,000	56,000
Other [Member] | Device [Member]
Net revenues	52,000	23,000	73,000	56,000
Other [Member] | Device [Member] | AXP [Member]
Net revenues
Other [Member] | Device [Member] | BioArchive [Member]
Net revenues
Other [Member] | Device [Member] | Manual Disposables [Member]
Net revenues
Other [Member] | Device [Member] | CAR-TXpress [Member]
Net revenues	33,000		33,000
Other [Member] | Device [Member] | Other Subsegments [Member]
Net revenues	19,000	23,000	40,000	56,000
Other [Member] | Clinical Development [Member]
Net revenues
Other [Member] | Clinical Development [Member] | Manual Disposables [Member]
Net revenues
Other [Member] | Clinical Development [Member] | Other Subsegments [Member]
Net revenues
Other [Member] | Clinical Development [Member] | Bone Marrow [Member]
Net revenues

XML

Note 7 - Derivative Obligations - Fair Value Assumptions (Details) - Series A Warrant [Member]	Sep. 30, 2019	Dec. 31, 2018
Measurement Input, Share Price [Member]
Valuation assumption	6.63	2.7
Measurement Input, Price Volatility [Member]
Valuation assumption	0.93	0.94
Measurement Input, Expected Term [Member]
Valuation assumption	1.4	2.2
Measurement Input, Discount Rate [Member]
Valuation assumption	0.017	0.0248
Measurement Input, Expected Dividend Rate [Member]
Valuation assumption	0	0
Measurement Input, Exercise Price [Member]
Valuation assumption	80	80

XML

Note 4 - Convertible Promissory Note (Details Textual) - USD ($)			3 Months Ended		9 Months Ended
	Jul. 23, 2019	Jan. 29, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	May 30, 2019
Amortization of Debt Discount (Premium)					$ 1,799,000	$ 800,000
Gain (Loss) on Extinguishment of Debt, Total			$ (840,000)		(840,000)
Interest Expense, Total			1,188,000	$ 835,000	3,531,000	$ 1,928,000
Convertible Debt [Member] | Notes [Member]
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger		90.00%
Debt Instrument, Interest Rate, Stated Percentage		24.00%
Debt Instrument, Term		1 year 180 days
Debt Instrument, Convertible, First Customary Conversion Blockers		4.99%
Debt Instrument, Convertible, Second customary conversion blockers		9.99%
Debt Instrument, Unamortized Discount, Total							$ 800,000
Amortization of Debt Discount (Premium)			60,000		117,000
Convertible Debt [Member] | Notes [Member] | Maximum [Member]
Debt Instrument, Face Amount		$ 800,000
Debt Instrument, Convertible, Conversion Price		$ 1.80
Convertible Debt [Member] | Notes [Member] | Minimum [Member]
Debt Instrument, Convertible, Conversion Price		$ 0.50
Convertible Debt [Member] | January 2019 Notes, Amendment No. 1 [Member]
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger	90.00%
Debt Instrument, Unamortized Discount, Total			556,000		556,000
Amortization of Debt Discount (Premium)			20,000		57,000
Gain (Loss) on Extinguishment of Debt, Total			840,000
Long-term Debt, Fair Value			1,473,000		$ 1,473,000
Debt Conversion, Original Debt, Amount			$ 216,000
Debt Conversion, Converted Instrument, Shares Issued			120,000
Interest Expense, Total			$ 30,000
Convertible Debt [Member] | January 2019 Notes, Amendment No. 1 [Member] | Maximum [Member]
Debt Instrument, Convertible, Conversion Price	$ 1.80
Convertible Debt [Member] | January 2019 Notes, Amendment No. 1 [Member] | Minimum [Member]
Debt Instrument, Convertible, Conversion Price	$ 0.50
Convertible Debt [Member] | The July 2019 Note [Member]
Debt Instrument, Face Amount	$ 1,000,000
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger	90.00%
Debt Instrument, Interest Rate, Stated Percentage	24.00%
Convertible Debt [Member] | The July 2019 Note [Member] | Maximum [Member]
Debt Instrument, Convertible, Conversion Price	$ 1.80
Convertible Debt [Member] | The July 2019 Note [Member] | Minimum [Member]
Debt Instrument, Convertible, Conversion Price	$ 0.50

XML

Note 5 - Leases - Maturities of Lease Liabilities (Details)	Sep. 30, 2019 USD ($)
Period of October 1, 2019 through December 31, 2019	$ 74,000
2020	301,000
2021	310,000
2022	319,000
2023	329,000
2024	138,000
Total lease payments	1,471,000
Less: imputed interest	(567,000)
Present value of operating lease liabilities	$ 904,000

XML

Note 10 - Major Customers and Accounts Receivable

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

10. Major Customers and Accounts Receivable

The Company had certain customers whose revenue individually represented

10%

or more of the Company’s total revenue, or whose accounts receivable balances individually represented

10%

or more of the Company’s total accounts receivable as follows:

For the

three

months ended

September 30, 2019

and

2018,

one

customer accounted for

27%

and

15%

of revenue, while a

second

customer accounted for

13%

and

15%

of revenue, respectively. For the

nine

months ended

September 30, 2019

and

2018,

one

customer accounted for

29%

and

19%

of revenue, while another customer accounted for

13%

and

7%

of revenue, respectively.

At

September 30, 2019,

three

customers accounted for

72%

of accounts receivable. At

December 31, 2018

four

customers accounted for

77%

of accounts receivable.

XML

Note 6 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

6. Commitments and Contingencies

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

September 30, 2019.

Warranty

The Company offers a warranty on all of its non-disposable products of

one

to

two

years. The Company warrants disposable products through their expiration date. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

The warranty liability is included in other current liabilities in the unaudited condensed consolidated balance sheets. The change in the warranty liability for the

nine

months ended

September 30, 2019

is summarized in the following table:

Balance at December 31, 2018	$	186,000
Warranties issued during the period		242,000
Settlements made during the period		(141,000	)
Changes in liability for pre-existing warranties during the period		(39,000	)
Balance at September 30, 2019	$	248,000

Contingencies and Restricted Cash

In fiscal

2016,

the Company signed an engagement letter with a strategic consulting firm (Mavericks).  Included in the engagement letter was a success fee due upon the successful conclusion of certain transactions.  On

May 4, 2017,

a lawsuit was filed against the Company and its CEO by the consulting firm as the consulting firm argues that it is owed a transaction fee of

$1,000,000

(plus interest of approximately

$300,000

as of

June 30, 2019)

under the terms of the engagement letter due to the conversion of the Boyalife debentures in

August 2016. 

In

October 2017,

to streamline the case by providing for the dismissal of claims against the Company’s CEO based on alter ego theories and without acknowledging any liability, the Company deposited

$1,000,000

with the Court and has recorded this deposit as restricted cash in the accompanying condensed consolidated Balance Sheet.  The Company filed a Motion for Summary Judgment, which was denied by the Court on

June 26, 2018.

On

September 24, 2018,

Mavericks filed an amended complaint, reinstating the Company’s CEO as a named defendant, as well as Boyalife Investment, Inc. (a dissolved company) and Boyalife (Hong Kong) Limited under new theories of liability, namely intentional interference with contract and inducement of breach of contract.  On

July 22, 2019,

Mavericks filed a Request for Dismissal requesting the Court to dismiss the served Boyalife entities and the Company CEO as well as the intentional interference with performance of contract and inducing breach of contract causes of action from the lawsuit.  As such, the only remaining claim at present is the original breach of contract claim against the Company.  On

August 6, 2019,

a trial starting date was set for

November 18, 2019.

A mandatory settlement conference was held

November 13, 2019

with the Court.

No

settlement was reached. The Company denies liability and intends to defend the lawsuit vigorously. 

No

accrual has been recorded for this contingent liability as of

September 30, 2019.

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

September 30, 2019,

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.

XML

Note 3 - Related Party Transactions (Details Textual) - USD ($)			3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 12, 2018	Aug. 21, 2017	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Mar. 31, 2019	Apr. 16, 2018	Apr. 01, 2018	Mar. 31, 2017
Amortization of Debt Discount (Premium)					$ 1,799,000	$ 800,000
Interest Expense, Total			$ 1,188,000	$ 835,000	3,531,000	1,928,000
Adjustments for New Accounting Principle, Early Adoption [Member] | Accounting Standards Update 2017-11 [Member]
Debt Instrument, Unamortized Discount, Total								$ 1,513,000		$ 7,200,000
Amortization of Debt Discount (Premium)			586,000	450,000	1,758,000	800,000
Boyalife Investment Fund II, Inc. [Member] | Convertible Debt [Member]
Debt Instrument, Convertible, Conversion Price							$ 1.80		$ 16.10
Boyalife Investment Fund II, Inc. [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity			10,000,000		10,000,000						$ 10,000,000
Proceeds from Long-term Lines of Credit					8,713,000		$ 7,200,000
Line of Credit Facility, Remaining Borrowing Capacity			$ 1,287,000		$ 1,287,000
Debt Instrument, Interest Rate, Stated Percentage			22.00%		22.00%
Interest Expense, Total			$ 471,000	385,000	$ 1,398,000	1,128,000
Interest Payable			1,398,000		1,398,000		$ 1,513,000
Boyalife W.S.N. [Member]
Distributor Agreement Term		3 years
Distributor Agreement, Renewal Term		2 years
Revenue from Related Parties			214,000	267,000	794,000	536,000
IncoCell [Member]
Contract Development Revenue, Term	10 years
IncoCell [Member] | Product [Member]
Revenue from Related Parties			82,000	7,000	82,000	7,000
IncoCell [Member] | Contract Development [Member]
Revenue from Related Parties			$ 0	$ 0	$ 0	$ 0

XML

Note 5 - Leases - Lease Information (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Right-of-use operating lease assets, net	$ 887,000
Current lease liability	110,000
Non-current lease liability	$ 794,000
Weighted average remaining lease term (Year)	4 years 255 days
Discount rate	22.00%

XML

Note 7 - Derivative Obligations (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Jun. 30, 2016
Class of Warrant or Right, Outstanding	1,734,831		1,734,831		1,726,523
Derivative, Gain (Loss) on Derivative, Net, Total	$ (2,000)	$ 24,000	$ (2,000)	$ 591,000
Series A Warrant [Member]
Class of Warrant or Right, Outstanding						40,442

XML

Note 11 - Subsequent Events

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Subsequent Events [Text Block]

11. Subsequent Events

On

October 30, 2019,

the Board of Directors of ThermoGenesis Holdings approved an amendment to the Company’s Sixth Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), to change the Company’s name from Cesca Therapeutics Inc. to ThermoGenesis Holdings, Inc. effective as of

November 1, 2019.

Accordingly, on

October 30, 2019,

the Company filed a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware, which was effective and which made the name change effective as of

12:01

a.m. on

November 1, 2019.

On

October 21, 2019,

the Company entered into a Joint Venture Agreement with Healthbanks Biotech (USA) Inc., a stem cell bank network (Healthbanks), under which the Company and Healthbanks agreed to form a new company named ImmuneCyte Life Sciences Inc. (ImmuneCyte), which will develop, own and operate an immune cell banking business. Under the Joint Venture Agreement (the “JV Agreement”), the Company and Healthbanks have organized ImmuneCyte and have agreed to work to make capital contributions and enter into ancillary agreements, all as specified in the JV Agreement, on or before

December 31, 2019. 

The Company will initially own a

20%

equity interest in ImmuneCyte. The Company’s principal contribution to ImmuneCyte will be a supply agreement under which ImmuneCyte will have the exclusive right to purchase the Company’s proprietary cell processing equipment in the immune cell banking business and a non-exclusive right to purchase it for other cell-based contract development and manufacturing (CMO/CDMO) services at a price equal to

115%

of the Company’s cost. The Company will also contribute to ImmuneCyte intellectual property and trademarks relating to the Company’s clinical development assets as a result of the Company’s decision to discontinue its clinical development program. Healthbanks will contribute to ImmuneCyte a paid-up, royalty free license to use its proprietary business management system, customer relationship management software, and laboratory information statement, and it will also make available a

$1.0

million unsecured, non-convertible line of credit to ImmuneCyte to provide initial operating capital. Healthbanks is a subsidiary of Boyalife Group, Inc. (USA), an affiliate of Boyalife (Hong Kong) Limited, the largest stockholder of Cesca, and Dr. Xiaochun (Chris) Xu, the Company’s CEO and Chairman.  The accounting impact of the transaction will be analyzed in the

fourth

quarter. 

XML

Note 7 - Derivative Obligations

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Derivatives and Fair Value [Text Block]

7. Derivative Obligations

Series A Warrants

Series A warrants to purchase

40,442

common shares were issued and vested during the year ended

June 30, 2016.

At the time of issuance, the Company determined that as 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 with the following assumptions:

	Series A
	September 30, 2019	December 31, 2018
Market price of common stock	$6.63	$2.70
Expected volatility	93%	94%
Contractual term (years)	1.4	2.2
Discount rate	1.70%	2.48%
Dividend rate	0%	0%
Exercise price	$80.00	$80.00

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 of

$2,000

during the

three

and

nine

months ended

September 30, 2019,

and a gain of

$24,000

and

$591,000

for the

three

and

nine

months ended

September 30, 2018,

respectively, representing the change in the fair value of the derivative liability, in the accompanying condensed 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

September 30, 2019

and

December 31, 2018,

included in other non-current liabilities:

	Derivative Obligation
	September 30, 2019		December 31, 2018
Balance	$	3,000	$	1,000
Level 1	$	--	$	--
Level 2	$	--	$	--
Level 3	$	3,000	$	1,000

The following table reflects the change in fair value of the Company’s derivative liabilities for the

nine

months ended

September 30, 2019:

	Amount
Balance – December 31, 2018	$	1,000
Change in fair value of derivative obligation		2,000
Balance – September 30, 2019	$	3,000

XML

Note 7 - Derivative Obligations - Fair Value Hierarchy (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Derivative obligations	$ 3,000	$ 1,000
Fair Value, Inputs, Level 1 [Member]
Derivative obligations
Fair Value, Inputs, Level 2 [Member]
Derivative obligations
Fair Value, Inputs, Level 3 [Member]
Derivative obligations	$ 3,000	$ 1,000

XML

Note 8 - Stockholders' Equity - Option Activity for Stock Option Plans (Details)	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares
Outstanding, options (in shares) | shares	302,368
Outstanding, weighted average exercise price, options (in dollars per share) | $ / shares	$ 13.99
Granted, options (in shares) | shares	10,200
Granted, weighted average exercise price, options (in dollars per share) | $ / shares	$ 4.38
Forfeited, options (in shares) | shares	(16,539)
Forfeited, weighted average exercise price, options (in dollars per share) | $ / shares	$ 11.50
Outstanding, options (in shares) | shares	296,029
Outstanding, weighted average exercise price, options (in dollars per share) | $ / shares	$ 13.80
Outstanding, weighted average remaining contractual life, options (Year)	8 years 219 days
Outstanding, aggregate intrinsic value, options | $	$ 763,499
Vested and Expected to Vest, options (in shares) | shares	215,932
Vested and Expected to Vest, weighted average exercise price, options (in dollars per share) | $ / shares	$ 15.95
Vested and Expected to Vest, weighted average remaining contractual life, options (Year)	8 years 146 days
Vested and Expected to Vest, aggregate intrinsic value, options | $	$ 525,700
Exercisable, options (in shares) | shares	94,978
Exercisable, weighted average exercise price, options (in dollars per share) | $ / shares	$ 25.70
Exercisable, weighted average remaining contractual life, options (Year)	7 years 219 days
Exercisable, aggregate intrinsic value, options | $	$ 171,726

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 2,800,000	$ 2,400,000
Accounts receivable, net of allowance for doubtful accounts of $278,000 ($419,000 at December 31, 2018)	4,470,000	1,509,000
Inventories, net of reserves of $399,000 ($258,000 at December 31, 2018)	3,405,000	4,493,000
Prepaid expenses and other current assets	451,000	224,000
Total current assets	11,126,000	8,626,000
Restricted cash – long term	1,000,000	1,000,000
Equipment and leasehold improvements, net	2,251,000	2,562,000
Right-of-use operating lease assets, net	887,000
Goodwill	781,000	781,000
Intangible assets, net	1,498,000	1,591,000
Other assets	48,000	51,000
Total assets	17,591,000	14,611,000
Current liabilities:
Accounts payable	1,874,000	2,423,000
Accrued payroll and related expenses	404,000	703,000
Deferred revenue – short term	840,000	485,000
Interest payable – related party	1,398,000	1,513,000
Other current liabilities	1,175,000	1,241,000
Total current liabilities	5,691,000	6,365,000
Convertible promissory note – related party, less debt discount of $5,781,000 ($6,026,000 at December 31, 2018)	2,932,000	1,174,000
Convertible promissory note, plus debt premium of $80,000 ($0 at December 31, 2018)	665,000
Note payable	1,000,000
Operating lease obligations – long term	794,000
Deferred revenue – long term	1,855,000	303,000
Other noncurrent liabilities	23,000	38,000
Total liabilities	12,960,000	7,880,000
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 2,000,000 shares authorized; none issued and outstanding
Common stock, $0.001 par value; 350,000,000 shares authorized; 2,704,837 issued and outstanding (2,168,337 at December 31, 2018)	3,000	2,000
Additional paid in capital	236,830,000	235,888,000
Accumulated deficit	(232,885,000)	(227,435,000)
Accumulated other comprehensive loss	(4,000)	(13,000)
Total ThermoGenesis Holdings, Inc. stockholders’ equity	3,944,000	8,442,000
Noncontrolling interest	687,000	(1,711,000)
Total stockholders’ equity	4,631,000	6,731,000
Total liabilities and stockholders’ equity	$ 17,591,000	$ 14,611,000

XML

Note 10 - Major Customers and Accounts Receivable (Details Textual) - Customer Concentration Risk [Member]	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Revenue Benchmark [Member] | Customer 1 [Member]
Concentration Risk, Percentage	27.00%	15.00%	29.00%	19.00%
Revenue Benchmark [Member] | Customer 2 [Member]
Concentration Risk, Percentage	13.00%	15.00%	13.00%	7.00%
Accounts Receivable [Member]
Number of Major Customers			3		4
Accounts Receivable [Member] | Three Customers [Member]
Concentration Risk, Percentage			72.00%
Accounts Receivable [Member] | Four Customers [Member]
Concentration Risk, Percentage					77.00%

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net loss	$ (5,895,000)	$ (33,645,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	604,000	506,000
Stock based compensation expense	459,000	475,000
Amortization of debt discount	1,799,000	800,000
(Recovery of)/reserve for excess and slow-moving inventories	141,000	(126,000)
(Recovery of)/reserve for bad debt expense	(53,000)	75,000
Change in fair value of derivative obligation	2,000	(591,000)
Deferred income tax benefit		(3,451,000)
Loss on disposal of equipment	20,000	451,000
Loss on extinguishment of debt	840,000
Impairment of intangible asset		27,202,000
Net change in operating assets and liabilities:
Accounts receivable	(2,908,000)	543,000
Inventories	980,000	336,000
Prepaid expenses and other assets	(227,000)	304,000
Accounts payable	(542,000)	(407,000)
Related party payable	(116,000)	(135,000)
Accrued payroll and related expenses	(298,000)	(147,000)
Deferred revenue	354,000	66,000
Other current liabilities	(145,000)	314,000
Long term deferred revenue and other noncurrent liabilities	1,467,000	(1,000)
Net cash used in operating activities	(3,518,000)	(7,431,000)
Cash flows from investing activities:
Capital expenditures	(178,000)	(985,000)
Net cash used in investing activities	(178,000)	(985,000)
Cash flows from financing activities:
Payments on finance lease obligations	(15,000)	(28,000)
Proceeds from long-term debt	1,800,000
Proceeds from convertible promissory note – related party	1,513,000	500,000
Proceeds from exercise of pre-funded warrants	42,000
Proceeds from issuance of common stock and pre-funded warrants	756,000	6,655,000
Net cash provided by financing activities	4,096,000	7,127,000
Effects of exchange rate changes on cash and cash equivalents		(4,000)
Net increase (decrease) in cash, cash equivalents and restricted cash	400,000	(1,293,000)
Cash, cash equivalents and restricted cash at beginning of period	3,400,000	3,513,000
Cash, cash equivalents and restricted cash at end of period	3,800,000	2,220,000
Supplemental disclosures of cash flow information:
Cash paid for interest	1,613,000	664,000
Supplemental non-cash financing and investing information:
Recording of beneficial conversion feature on debt	2,313,000	7,200,000
Right-to-use asset acquired under operating lease	966,000
Conversion of debt to common stock	216,000
Fair value of amended convertible note issued in connection with the extinguishment of original convertible note	1,473,000
Transfer of equipment to inventories	33,000	172,000
Transfer of inventories to equipment		$ 420,000

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Note 2 - Summary of Significant Accounting Policies - Anti-dilutive Securities (Details) - shares		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018
Anti-dilutive securities (in shares)		7,720,082	6,175,520
Convertible Debt Securities [Member]
Anti-dilutive securities (in shares)		6,013,667	4,626,667
Vested Series A Warrants [Member]
Anti-dilutive securities (in shares)		40,442	40,442
Unvested Series A Warrants [Member]
Anti-dilutive securities (in shares)	[1]	69,853	69,853
Warrant, Other [Member]
Anti-dilutive securities (in shares)		1,300,091	1,319,728
Share-based Payment Arrangement, Option [Member]
Anti-dilutive securities (in shares)		296,029	118,830

[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.

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Note 9 - Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

	Three Months Ended September 30, 2019
	Device		Clinical Development			Total
Net revenues	$	4,045,000	$	13,000		$	4,058,000
Cost of revenues		2,126,000		37,000			2,163,000
Gross profit		1,919,000		(24,000	)		1,895,000
Operating expenses		1,871,000		354,000			2,225,000
Operating income / (loss)	$	48,000	$	(378,000	)	$	(330,000	)
Depreciation and amortization	$	149,000	$	53,000		$	202,000
Stock-based compensation expense	$	201,000	$	52,000		$	253,000

	Three Months Ended September 30, 2018
	Device			Clinical Development			Total
Net revenues	$	3,059,000		$	54,000		$	3,113,000
Cost of revenues		2,383,000			75,000			2,458,000
Gross profit		676,000			(21,000	)		655,000
Operating expenses		1,969,000			621,000			2,590,000
Operating loss	$	(1,293,000	)	$	(642,000	)	$	(1,935,000	)
Depreciation and amortization	$	100,000		$	74,000		$	174,000
Stock-based compensation expense	$	8,000		$	167,000		$	175,000

	Nine Months Ended September 30, 2019
	Device			Clinical Development			Total
Net revenues	$	11,256,000		$	69,000		$	11,325,000
Cost of revenues		6,082,000			138,000			6,220,000
Gross profit		5,174,000			(69,000	)		5,105,000
Operating expenses		5,295,000			1,307,000			6,602,000
Operating loss	$	(121,000	)	$	(1,376,000	)	$	(1,497,000	)
Depreciation and amortization	$	381,000		$	223,000		$	604,000
Stock-based compensation expense	$	294,000		$	165,000		$	459,000
Goodwill	$	781,000		$	--		$	781,000
Total assets	$	15,620,000		$	1,971,000		$	17,591,000

	Nine Months Ended September 30, 2018
	Device			Clinical Development			Total
Net revenues	$	6,822,000		$	162,000		$	6,984,000
Cost of revenues		5,419,000			195,000			5,614,000
Gross profit		1,403,000			(33,000	)		1,370,000
Operating expenses		6,858,000			30,208,000			37,066,000
Operating loss	$	(5,455,000	)	$	(30,241,000	)	$	(35,696,000	)
Depreciation and amortization	$	296,000		$	210,000		$	506,000
Impairment Charges	$	--		$	27,202,000		$	27,202,000
Stock-based compensation expense	$	88,000		$	387,000		$	475,000
Total assets	$	10,213,000		$	11,386,000		$	21,599,000

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Note 5 - Leases (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Lease, Cost [Table Text Block]

	September 30, 2019
Right-of-use operating lease assets, net	$	887,000
Current lease liability		110,000
Non-current lease liability		794,000

	September 30, 2019
Weighted average remaining lease term	4.7
Discount rate	22%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Period of October 1, 2019 through December 31, 2019	$	74,000
2020		301,000
2021		310,000
2022		319,000
2023		329,000
2024		138,000
Total lease payments	$	1,471,000
Less: imputed interest		(567,000	)
Present value of operating lease liabilities	$	904,000