5.	RELATED PARTY TRANSACTIONS

HealthBanks Biotech (USA) Inc.

November 26, 2019

the Company entered into an agreement with HealthBanks Biotech (USA) Inc. (“HealthBanks”) to form a new company called ImmuneCyte, Inc. (“ImmuneCyte”) to commercialize the Company's proprietary cell processing platform, CAR-TXpress™, for use in immune cell banking as well as for cell-based contract development and manufacturing services (CMO/CDMO). Under the terms of the agreement, ImmuneCyte was initially owned

80%

by HealthBanks and

20%

by the Company. Healthbanks is a subsidiary of the Boyalife Group (USA), Inc. which is owned by Dr. Xiaochun (Chris) Xu, the Company's Chief Executive Officer and Chairman of our Board of Directors. Due to the significant influence the Company has over ImmuneCyte's operations, the investment was accounted for by the Company using the equity method.

Between

November 26, 2019

and

September 30, 2020,

ImmuneCyte closed on a series of investments with a private institution and qualified investors. After the investments, ImmuneCyte was owned

75.16%

by HealthBanks,

18.79%

by the Company and

6.05%

by the private investors.

March 2021,

ImmuneCyte completed an acquisition to acquire Boyalife's Cellular Therapy Division, for

12,000,000

shares in ImmuneCyte and Shangai KDWinfo Technology Co. Ltd. For

500,000

shares in ImmuneCyte. Following the acquisitions, the Company's ownership percentage in ImmuneCyte decreased from

18.79%

8.64%.

The Company performed an analysis of the transaction and noted that

none

of the factors supporting significant influence changed as a result of the acquisition. Therefore, it was concluded that significant influence remains and the Company will continue to account for the transaction using the equity method. The Company recognized a dilution gain of

$262,000

representing its share of the net assets acquired by ImmuneCyte. However, as of the quarter ended

March 31, 2021,

the Company had accumulated losses of

$428,000

in its investment in ImmuneCyte. As the accumulated losses were greater than the dilution gain,

entry was recorded by the Company for its investment in ImmuneCyte for the quarter ended

March 31, 2021.

For the quarter ended

March 31, 2021

and

2020,

the Company recorded

and a loss of

$13,000,

respectively on its equity investment in ImmuneCyte. At

March 31, 2021,

the value of the Company's investment in ImmuneCyte on its Balance Sheet is

$0.

For the quarter ended

March 31, 2021,

ImmuneCyte had a net loss of

$253,000,

its current assets were

$3,514,000

and current liabilities were

$2,375,000.

Convertible Promissory Note and Revolving Credit Agreement

March 2017,

ThermoGenesis Holdings entered into a Credit Agreement with Boyalife Asset Holding II, Inc. (the “Lender”). The Lender is a wholly owned subsidiary of the Boyalife Group (USA), Inc., which is owned and controlled by the Company's Chief Executive Officer and Chairman of our Board of Directors. The Credit Agreement, as amended, 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”). As of

March 31, 2021

and

December 31, 2020,

the Company had an outstanding principal balance on the Loan of

$10,000,000.

The Credit Agreement and the Convertible Promissory Note issued thereunder (as amended, 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. In

January 2021,

the Company paid the Lender, the interest due as of

December 31, 2020

in the amount of

$2,082,000.

The Note can be prepaid in whole or in part by the Company at any time without penalty.

The Credit Agreement and Note were amended in

April 2018,

granting the Lender the right to convert, at any time, outstanding principal and accrued but unpaid interest into shares of the Company's common stock at a conversion price of

$16.10

per share. The amendment included a down-round provision that lowered the conversion price if the Company issues shares of common stock at a lower price per share, the conversion price of the Note is lowered to that amount. The Company completed a transaction in

2018,

which lowered the conversion price to

$1.80.

The following summarizes the Note:

	Maturity Date	Stated Interest Rate		Conversion Price		Face Value		Remaining Debt Discount			Carrying Value
At March 31, 2021	3/6/2022		22%	$	1.80	$	10,000,000	$	(3,238,000	)	$	6,762,000
At December 31, 2020	3/6/2022		22%	$	1.80	$	10,000,000	$	(4,065,000	)	$	5,935,000

The Company amortized

$827,000

and

$546,000

of debt discount to interest expense for the

three

months ended

March 31, 2021

and

2020,

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

$550,000

and

$443,000

for the

three

months ended

March 31, 2021

and

2020,

respectively. The interest payable balance as of

March 31, 2021

and

December 31, 2020

was

$550,000

and

$2,082,000,

respectively.