-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BpgAHRSMYKCIYP9G1PFUuRwzYp4K1C9ZgQGjcrQkcbLIgwuCm45Tln8vNK+4FjwE 0s/B5rYhfTCfMrj9LrRm/Q== 0000811212-97-000013.txt : 19970509 0000811212-97-000013.hdr.sgml : 19970509 ACCESSION NUMBER: 0000811212-97-000013 CONFORMED SUBMISSION TYPE: 10KSB/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19970508 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: THERMOGENESIS CORP CENTRAL INDEX KEY: 0000811212 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY APPARATUS & FURNITURE [3821] IRS NUMBER: 943018487 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10KSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-16375 FILM NUMBER: 97598368 BUSINESS ADDRESS: STREET 1: 3146 GOLD CAMP DRIVE CITY: RANCHO CORDOVA STATE: CA ZIP: 95670 BUSINESS PHONE: 9168585100 FORMER COMPANY: FORMER CONFORMED NAME: INSTA COOL INC OF NORTH AMERICA DATE OF NAME CHANGE: 19920703 10KSB/A 1 SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-KSB/A-2 [X] Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended June 30, 1996 Commission File Number: 0-16375 THERMOGENESIS CORPORATION (Exact name of Registrant as specified in its charter) DELAWARE 94-3018487 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 3146 GOLD CAMP DRIVE, RANCHO CORDOVA, CA 95670 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code:(916) 858-5100 Securities registered pursuant to section 12(b) of the Act: NONE Securities registered pursuant to section 12(g) of the Act: Common Stock, $.001 Par Value Per Share 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__ [X] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation SB, and no disclosures will be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in part III of the Form 10KSB. Issuer's revenues for its most recent fiscal year were $4,124,634. The aggregate market value of the voting stock held by non-affiliates of the registrant was $47,805,593 as of June 30, 1996. The Registrant had 12,898,967 shares of common stock outstanding on September 23, 1996. DOCUMENTS INCORPORATED BY REFERENCE: None. 1 PART II ITEM 7. FINANCIAL STATEMENTS. Page Report of Independent Auditors 17 Balance Sheet at June 30, 1996 18 Statements of Operations for the years ended June 30, 1996 and 1995 20 Statements of Shareholders' Equity for the years ended June 30, 1996 and 1995 21 Statements of Cash Flows for the years ended June 30, 1996 and 1995 22 Notes to Financial Statements 23 16 REPORT OF INDEPENDENT AUDITORS Board of Directors and Shareholders THERMOGENESIS CORP. We have audited the accompanying balance sheet of THERMOGENESIS CORP. as of June 30, 1996, and the related statements of operations, shareholders' equity, and cash flows for the years ended June 30, 1996 and 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of THERMOGENESIS CORP. at June 30, 1996 and the results of its operations and its cash flows for the years ended June 30, 1996 and 1995, in conformity with generally accepted accounting principles. ERNST & YOUNG LLP Sacramento, California September 17, 1996 17 THERMOGENESIS CORP. Balance Sheet June 30, 1996 ASSETS Current assets: Cash and cash equivalents $1,243,079 Accounts receivable, net of allowance for doubtful of $97,913 1,441,148 Inventory 2,137,198 Net investment in sales-type leases 31,882 Prepaid expenses 44,177 Total current assets 4,897,484 Equipment, at cost less accumulated depreciation of $312,307 689,562 Long-term net investment in sales-type leases 50,716 Prepaid royalties, net of accumulated amortization of $332,733 221,767 Leased equipment, net of accumulated depreciation of $101,337 20,228 Other assets 57,383 $5,937,140 See accompanying notes. 18 THERMOGENESIS CORP. Balance Sheet (Cont'd) June 30, 1996 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $931,944 Current portion of long-term capital lease 124,050 obligations Accrued payroll and related expenses 184,660 Customer deposits 35,891 Total current liabilities 1,276,545 Deferred rent 3,365 Long-term capital lease obligations 282,919 Commitments Shareholders' equity: Common stock, $.001 par value; 50,000,000 shares authorized: 12,708,967 issued and outstanding 12,709 Paid in capital in excess of par 10,744,530 Accumulated deficit (6,382,928) Total shareholders' equity 4,374,311 $5,937,140 See accompanying notes. 19 THERMOGENESIS CORP. Statements of Operations Years ended June 30, 1996 and 1995 1996 1995 Net sales $4,124,634 $3,311,880 Cost of sales 1,759,659 2,096,116 Gross profit 2,364,975 1,215,764 Development and distribution fees 60,000 280,000 Expenses: General and administrative 426,318 334,028 Selling and marketing 1,173,254 827,269 Research and development 1,317,330 446,780 Issuance of stock options for services 60,000 - Interest 41,454 - Total expenses 3,018,356 1,608,077 Interest income 24,847 11,498 Other income - 12,519 Net loss ($568,534) ($88,296) Net loss per share ($0.05) ($0.01) Shares used in computing net loss per share 11,491,000 10,170,000 See accompanying notes. 20 THERMOGENESIS CORP. Statements of Shareholders' Equity Years Ended June 30, 1996 and 1995 Paid in capital Accumu- Total Common in excess lated shareholders stock of par deficit equity Balance at June 30, 1994 $10,166 $ 7,786,569 $(5,726,098) $ 2,070,637 Issuance of10,000 common shares for exercise of 10 10,590 - 10,600 options Issuance of 2,352 common shares for patent services 2 7,640 - 7,642 Net loss - - (88,296) (88,296) Balance at June 30, 1995 10,178 7,804,799 (5,814,394) 2,000,583 Issuance of 5,000 common shares for exercise of 5 5,295 - 5,300 options Issuance of 2,200,000 common shares in private placement 2,200 1,896,012 - 1,898,212 Issuance of 326,250 common shares for exercise of 326 978,424 - 978,750 warrants Issuance of options for - 60,000 - 60,000 Net loss - - (568,534) (568,534) Balance at June 30, 1996 $ 12,709 $10,744,530 $(6,382,928) $4,374,311 See accompanying notes. 21 THERMOGENESIS CORP.Statements of Cash Flows Years Ended June 30, 1996 and 1995 Increase (Decrease) in Cash and Cash Equivalents 1996 1995 Cash flows from operating activities: Net loss ($568,534) ($88,296) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation and amortization 190,356 162,811 Issuance of stock options for 60,000 - services Net changes in operating assets and liabilities: Accounts receivable (790,908) 198,912 Allowance for doubtful 25,000 14,458 accounts Investment in sales type 39,593 (37,496) leases Inventory (1,122,889) (460,222) Prepaid expenses (34,466) 34,235 Other assets (39,096) - Accounts payable and accrued liabilities 419,013 199,514 Accrued payroll and related expenses 129,314 (7,320) Customer deposits 16,368 (34,156) Deferred revenue (60,000) 60,000 Deferred rent (11,091) 14,456 Total adjustments (1,178,806) 145,192 Net cash provided (used) by (1,747,340) 56,896 operating activities Cash flows from investing activities: Capital expenditures (152,547) (139,742) Sale of investment - 45,000 Investment in leased equipment - (2,200) Net cash used in investing (152,547) (96,942) activities Cash flows from financing activities: Principal payments on long-term lease (65,261) - obligations Issuance of common stock 2,882,262 18,242 Net cash provided by financing 2,817,001 18,242 activities Net increase (decrease) in cash 917,114 (21,804) and cash equivalents Cash and cash equivalents at beginning 325,965 347,769 of period Cash and cash equivalents at end of $1,243,079 $325,965 period See accompanying notes. 22 THERMOGENESIS CORP. NOTES TO FINANCIAL STATEMENTS June 30, 1996 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION AND BUSINESS THERMOGENESIS CORP. (the Company) was incorporated in Delaware on September 26, 1986. The Company designs and sells devices which utilize its proprietary thermodynamic technology for the processing of biological substances including the cryopreservation, thawing and harvesting of blood components (THERMOGENESIS Proprietary Technology). Currently, the Company is manufacturing six core line, FDA Class I thermodynamic devices which are being sold to the blood collection industry with FDA permission. Other potential applications for the technology include medical and pharmaceutical uses, and industrial applications. During fiscal 1988 through 1996, the Company has focused on refining product design of the core line products and developing a pipeline of five FDA Class II devices which utilize sterile disposable containers for processing of the blood components. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. CASH EQUIVALENTS The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. INVENTORY Inventory is stated at the lower of cost (first-in first-out basis) or market and consists of the following at June 30, 1996: Raw materials $1,273,889 Work in process 1,490 Finished goods 861,819 Total $2,137,198 23 THERMOGENESIS CORP. NOTES TO FINANCIAL STATEMENTS (Cont'd) June 30, 1996 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) EQUIPMENT Depreciation is computed under the straight-line method over the useful lives of 3 to 10 years. In 1995, the Financial Accounting Standards Board released the Statement of Financial Accounting Standards No. 121 (SFAS 121), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of." SFAS 121 requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. SFAS 121 is effective for fiscal years beginning after December 15, 1995. Adoption of SFAS is not expected to have a material impact on the Company's financial position or results of operations. PREPAID ROYALTIES Prepaid royalties are amortized on a straight line basis over an estimated useful life of 10 years. NET INVESTMENT IN SALES-TYPE LEASE The net investment in sales-type leases consists of the following at June 30, 1996: Total minimum lease payments receivable $91,888 Less unearned interest (9,290) Net investment in sales type leases $82,598 24 THERMOGENESIS CORP. NOTES TO FINANCIAL STATEMENTS (Cont'd) June 30, 1996 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) INCOME TAXES The liability method is used for accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company uses the flow-through method to account for income tax credits. NET LOSS PER SHARE Net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding. SUPPLEMENTAL CASH FLOW INFORMATION Year ended Year ended June 30, 1996 June 30, 1995 Cash paid for state income taxes $ - 1,600 Cash paid for interest 41,454 - THE COMPANY INCURRED APPROXIMATELY $472,000 IN CAPITAL LEASE OBLIGATIONS FOR THE PURCHASE OF EQUIPMENT DURING THE YEAR ENDED JUNE 30, 1996. 25 THERMOGENESIS CORP. NOTES TO FINANCIAL STATEMENTS (Cont'd) June 30, 1996 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) REVENUE RECOGNITION Revenues from the sale of the Company's products are recognized at the time of shipment. CREDIT RISK The Company manufactures and sells thermodynamic devices principally to the blood component processing industry and performs ongoing evaluations of the credit worthiness of its customers. The Company believes that adequate provisions for uncollectible accounts have been made in the accompanying financial statements. STOCK-BASED COMPENSATION The Company accounts for stock-based compensation in accordance with the intrinsic value method prescribed by APB 25, "Accounting for Stock Issued to Employees" ("APB 25"). Under the intrinsic value-based method, compensation cost is the excess, if any, of the quoted market price or fair value of the stock at the grant date or other measurement date over the amount an employee must pay to acquire the stock. In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards 123, Accounting for Stock-Based Compensation" ("SFAS 123"), which is effective for the Company in fiscal 1997. SFAS 123 allows companies the option of estimating and recognizing compensation cost under the provisions of APB 25, or alternatively, by estimating and recognizing stock-based compensation using a "fair value" based methodology. Under the fair value based method, compensation cost is estimated at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company anticipates that it will continue the use of the intrinsic value method for accounting for stock-based compensation, and accordingly, the adoption of SFAS 123 is not expected to have a significant effect on the Company's financial condition or results of operations. 2. SHAREHOLDERS' EQUITY On May 29, 1996, the Company's Board of Directors approved to amend the Certificate of Incorporation to effect a one-for -two reverse stock split which was effective on June 14, 1996 to holders of record on June 14, 1996. The authorized shares of common stock was unchanged and remained at 50,000,000. All share and per share data have been restated for all periods presented to reflect the reverse stock split. 26 THERMOGENESIS CORP. NOTES TO FINANCIAL STATEMENTS (Cont'd) June 30, 1996 2. SHAREHOLDERS' EQUITY (CONT'D) COMMON STOCK The Company completed a private placement of 2,200,000 common shares on December 9, 1995 and received $1,890,212 net of expenses. The placement consisted of 88 units. Each unit consisted of 25,000 common shares and 6,250 warrants to purchase common shares at $3.00 per share for six months. The Company filed a registration statement covering the shares issued within 90 days of completion of the offering as required by the terms of the financing. WARRANTS In conjunction with the above placement, warrants to purchase 550,000 common shares of the company at $3.00 per share were issued. At June 30, 1996, 326,250 warrants were exercised, 180,000 were exercised before the expiration date of July 31, 1996 and the remaining 43,750 warrants expired. In conjunction with the placement of Series C Preferred stock in 1993, the placement agent, Paradise Valley Securities, received warrants to purchase 42,500 shares of the Company's common stock at $1.20 per share. The warrants expire in February 1998. STOCK OPTIONS The Company has issued options to purchase shares of common stock pursuant to its Amended 1994 Stock Option Plan. These options are granted at prices which are equal to 100% of the fair market value on the date of grant, and expire over a term not to exceed ten years. Options generally vest rateable over a five year period. A summary of activity of the Plan follows: Number of Price Available Shares Per For grant Outstanding Share Balance at June 30, 1994 255,000 945,000 $1.06-$2.70 Options canceled 67,500 (67,500) $2.70 Options exercised - (10,000) $1.06 Balance at June 30, 1995 322,500 867,500 $1.06-$2.70 Options granted (606,000) 606,000 $1.64-$3.88 Options canceled 304,167 (304,167) $1.06-$2.32 Options exercised - (5,000) $1.06 Balance at June 30, 1996 20,667 1,164,333 $1.64-$3.88 Options for 1,048,667 shares are exercisable at June 30, 1996. 27 THERMOGENESIS CORP. NOTES TO FINANCIAL STATEMENTS (Cont'd) June 30, 1996 2. SHAREHOLDERS' EQUITY (CONT'D) STOCK OPTIONS (CONT'D) On May 29, 1996, the Company issued options to purchase 100,000 common shares of the Company for consulting services. The exercise price is equal to the market value of $4.25 per share on the date of grant. Accordingly, the Company has recorded consulting expense recognizing the estimated fair value of the options of $60,000. 3. COMMITMENTS PURCHASE AND ROYALTY COMMITMENTS In July 1990 the Company acquired the THERMOGENESIS Proprietary Technology including but not limited to all patents, drawings, know-how, trademarks and trade names and prepaid all future royalties for a total consideration which was recorded at $554,500. This amount represents the present value of the future royalty payment obligation. The consideration was comprised of $50,000 cash, a 10% four year convertible note for $200,000 and 900,000 shares of the Company's common stock. The transaction has been accounted for as a prepayment of future royalties and is being amortized on a straight line basis over an estimated useful life of 10 years. OPERATING LEASES The Company leases its manufacturing and research and development facilities, and its corporate, and sales and marketing facilities, pursuant to operating leases. The annual obligations under these leases are as follows: 1997 $101,976 1998 80,106 1999 52,860 2000 22,025 $256,967 Rent expense was $78,587 in 1996 and $53,560 in 1995. 28 THERMOGENESIS CORP. NOTES TO FINANCIAL STATEMENTS (Cont'd) June 30, 1996 3. PURCHASE AND ROYALTY COMMITMENTS (CONT'D) CAPITAL LEASES The Company leases certain equipment under capital leases. As of June 30, 1996, the following amounts are included in equipment as assets under these capital leases: Cost $ 472,230 Less: accumulated amortization 48,555 Net assets under capital leases $ 423,675 The future minimum lease payments under these capital leases along with the present value of the minimum lease payments as of June 30, 1996 are as follows: 1997 $183,912 1998 183,912 1999 110,236 2000 27,559 2001 24,314 Total minimum lease payments 529,933 Less amount representing interest 122,964 Present value of minimum lease payments 406,969 Less: current portion of long-term capital lease obligations 124,050 Long-term capital lease obligations $282,919 29 THERMOGENESIS CORP. NOTES TO FINANCIAL STATEMENTS (Cont'd) June 30, 1996 4. RELATED PARTY TRANSACTIONS Transactions and balances with related party shareholders or companies owned in whole or in part by related party shareholders are as follows at June 30 and for the years then ended: 1996 1995 Marketing expense, salaries $99,536 $123,277 5. MAJOR CUSTOMERS AND FOREIGN SALES During the fiscal year ended June 30, 1996, sales to the American Red Cross regional centers, Asahi Medical Co. Ltd. Japan, Centeon, Melville Biological and Hemotech Sa. represented 10%, 10%, 9%, 7%, and 7%, respectively of the Company's total revenues and export sales were 41% of total revenues. During fiscal 1995, sales to four major customers accounted for 10%, 5%, 4% and 3%, respectively and foreign sales were 55% of total revenues. 30 THERMOGENESIS CORP. NOTES TO FINANCIAL STATEMENTS (Cont'd) June 30, 1996 6. DEVELOPMENT AND DISTRIBUTION FEES In July 1993, the Company exclusively licensed to the newly formed blood division of the Stryker Corporation the rights to market and distribute the Company's proprietary system for the intraoperative harvesting of autologous fibrinogen-rich cryoprecipitate (now called the CryoSeal System) for use as a hemostatic agent and tissue sealant for which the Company had applied for a patent. In fiscal 1994, the Company received a development fee of $250,000 payable over twelve months and a royalty agreement payable on all sales of equipment and associated disposable products. As the system was still in the prototype stage there were no sales of the product by Stryker. In January 1994, the Company and Stryker filed for FDA 510K permission to utilize the fibrinogen rich cryoprecipitate harvested by the system for surgical hemostasis and as a tissue adhesive. Subsequently, the FDA declined to approve the autologous fibrinogen-rich cryoprecipitate sourced from the system for the claims requested in the 510K application. By September, 1995, Stryker decided to dissolve their Blood Division and agreed to terminate their license agreement with the Company and to provide the Company all of their prototypes and documentation for the CryoSeal device and disposables for a 7% royalty which declines over time. No royalties have been paid to date under the new agreement. On September 12, 1996, after an intensive year long engineering development to improve the manufacturability and performance of the CryoSeal system, the Company filed an amended 510K with the FDA as a system for the rapid automated preparation of cryoprecipated AHF. SALE OF DISTRIBUTION RIGHTS FOR BIOARCHIVE FREEZER SYSTEM In June 1995, the Company sold the Japanese distribution rights to LN2 BioArchive System and the Vial BioArchive System to Daido-Hoxan, Japan for $350,000. Of the $350,000, $280,000 was received at the time of signing the agreement and is non-refundable, and $70,000 was due when the Company delivered a prototype of the Vial BioArchive System. The Company has recognized $280,000 of revenue and offset $10,000 in expenses in fiscal 1995 and recognized $60,000 of revenue in fiscal 1996. 31 THERMOGENESIS CORP. NOTES TO FINANCIAL STATEMENTS (Cont'd) June 30, 1996 7. SALE OF LICENSE RIGHTS FOR CRYOSEALANT SYSTEM In June 1996, the Company entered into an exclusive manufacturing and distribution agreement for the territory of Japan for the CryoSealant System with Asahi Medical Co., Ltd., of Japan, a division of Asahi Chemical. Asahi Medical is a leading supplier of artificial kidneys, blood purification systems and leukocyte removal systems. Under the terms of the agreement, Asahi will manufacture the CP-1 disposable processing container, purchase the CS-1 device and SA-1 and DA-1 surgical applicators from the Company, and market the CryoSealant system in Japan. The Company received a $400,000 license fee, a commitment from Asahi to purchase the CryoSealant system and related fibrin applicators from the Company and a 10% royalty on the sale of the CP-1 container. The Company has recognized $400,000 of revenue for the license fee in fiscal 1996. 8. INCOME TAXES The reconciliation of federal income tax attributable to operations computed at the federal statutory tax rates (34%) to income tax expense is as follows: JUNE 30, 1996 JUNE 30, 1995 Statutory federal income benefit $ (197,000) $(30,000) Net operating loss with no tax benefit 197,000 30,000 Total federal income tax $ - $ - At June 30, 1996, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $5,882,000 and $2,519,000 respectively, that are available to offset future income. The loss carryforwards expire between the years 1998 and 2011 for federal and state income tax purposes. At June 30, 1996, the Company has research and experimentation credit carryforwards of approximately $63,000 for federal tax purposes that expire between the years of 2002 and 2008 and $39,000 for state income tax purposes that do not have an expiration date. 32 THERMOGENESIS CORP. NOTES TO FINANCIAL STATEMENTS (Cont'd) June 30, 1996 8. INCOME TAXES (CONT'D) Significant components of the Company's deferred tax assets and liabilities for federal and state income taxes as of June 30, 1996 and June 30, 1995 are as follows: JUNE 30, 1996 JUNE 30, 1995 Deferred tax assets: Net operating loss carryforwards $2,154,000 $1,963,000 Research credits 102,000 75,000 Other 137,000 87,000 Total deferred taxes 2,393,000 2,125,000 Valuation allowance for deferred (2,393,000) (2,125,000) tax assets Net deferred taxes $ - $ - Because of the "change of ownership" provisions of the Tax Reform Act of 1988, a portion of the Company's federal net operating loss and credit carryovers may be subject to an annual limitation regarding their utilization against taxable income in future periods. The Company expects that this limitation should not have a material adverse effect on the Company's ability to utilize the net operating loss and credit carryovers prior to the expiration of the carryover periods. 9. SUBSEQUENT EVENTS On July 30, 1996, the Company entered into an agreement with On-Time Manufacturing, Inc., a current vendor, to produce up to $2,500,000 of product for the Company. Under the terms of the agreement, On-Time can elect to receive payment in restricted common stock of the Company at a 25% discount from the market price on the date the election to receive stock is made. If under the terms of the agreement On-Time elects to receive stock, the Company will, in accordance with generally accepted accounting principles, expense the 25% discount from market price through operations. On July 30, 1996, On-Time elected to convert $225,000 of existing payables from the Company to common stock. The Company is not obligated to purchase product that is not required or at a price that is not competitive and built to all required standards. 33 PART III THERMOGENESIS CORP. Index to Exhibits Exhibit Description - ------- -------------------------------- 3.1 (a) Amended and Restated Certificate of Incorporation (5) (b) Amended Bylaws (5) 10.1 (a) Letter of Agreement between Liquid Carbonic, Inc. Canada and THERMOGENESIS CORP. (2) (b) Letter of Agreement between Fujitetsumo USA and THERMOGENESIS CORP. (2) (c) Letter of Agreement between Fujitetsumo Japan and THERMOGENESIS CORP. (2) (d) Letter of Agreement between THERMOGENESIS CORP.and Liquid Carbonic, Inc. Sale of Convertible Debenture(3) (e) License Agreement between Stryker Corp. and THERMOGENESIS CORP. (7) (f) Lease of Office and Mfg. Space (5) (g) Executive Development and Distribution Agreement between THERMOGENESIS and Daido Hoxan Inc. (4) (h) Administrative Office Lease (8) (i) Employment Agreement for Philip H. Coelho (9) (j) Employment Agreement for Charles de B. Griffiths (9) (k) Employment Agreement for Walter Ludt (9) (l) Manufacturing and License Agreement between On-Time Manufacturing and THERMOGENESIS (9) (m) License and Distribution Agreement between Asahi Medical and THERMOGENESIS CORP. (10) 23.1 Consent of Ernst & Young, LLP (9) 35 FOOTNOTES TO INDEX (1) Incorporated by reference to Registration Stmt No. 33-12210-A of THERMOGENESIS, CORP. filed on June 4, 1987. (2) Incorporated by reference to Registration Statement No. 33-37242 of THERMOGENESIS, CORP. filed on Feb. 7, 1991. (3) Incorporated by reference to Form 8-K for July 19, 1993 (4) Incorporated by reference to Form 8-K for June 9, 1995. (5) Incorporated by reference to Form 10-KSB for the year ended June 30, 1994 (6) Incorporated by reference to Form 10-KSB for the year ended June 30, 1995 (7) Incorporated by reference to Form 8-K for September 27, 1995 (8) Incorporated by reference to Form 10-QSB for the quarter ended December 31, 1995 (9) Incorporated by reference to Form 10-KSB for the year ended June 30, 1996. (10) Incorporated by reference to Form 8-K for May 29, 1996 36 THERMOGENESIS CORP. Signatures In accordance with section 13 or section 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THERMOGENESIS CORP. ___________________________________ Dated: ____________ By: Philip H. Coelho, President and Chief Executive Officer In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. ________________________________________ Dated: ___________ By: Philip H. Coelho, President, Chief Executive Officer and Chairman of the Board (Principal Executive Officer) _________________________________________ Dated: ___________ By: Walter J. Ludt, III Chief Operating Officer (Principal Operating Officer) 38 -----END PRIVACY-ENHANCED MESSAGE-----