1.	Description of Business and Basis of Presentation

Organization and

Basis of Presentation

Cesca Therapeutics Inc. (“Cesca Therapeutics,” “Cesca,” the “Company

”), a Delaware corporation, is a regenerative medicine company that was founded in

1986

and is headquartered in Rancho Cordova, CA. Cesca develops, commercializes and markets a range of automated technologies for CAR-T and other cell-based therapies. ThermoGenesis Corp. (ThermoGenesis), our device subsidiary, provides the AutoXpress

and BioArchive platforms for automated clinical biobanking, PXP platform for point-of-care cell-based therapies and CAR-TXpress platform under development for bio-manufacturing for immuno-oncology applications. Cesca is also leveraging its proprietary PXP technology platform to develop autologous cell-based therapies that address significant unmet needs in the vascular and orthopedic markets.

Cesca is an affiliate of the Boya

life Group, a China-based industry research alliance encompassing top research institutions for stem cell and regenerative medicine.

August 2017,

the Company changed its fiscal year from

June 30

December 31.

As a result, the Company is reporting financial information for the transition period from

July 1, 2017

through

December 31, 2017.

Subsequent to the transition period, the Company will cover the period beginning

January 1

and ending

December 31,

which will be the Company’s fiscal year. The period beginning on

July 1, 2016

and ending on

June 30, 2017

is referred in these financial statements as “fiscal

2017”

and the period beginning on

July 1, 2015

and ending on

June 30, 2016

as “fiscal

2016.”

Liquidity

and Going Concern

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

). As of

December 31, 2017,

the Company had drawn down

$6,700,000

of the

$10,000,000

available under the Credit Agreement. The Company has drawn down an additional

$500,000

subsequent to

December 31, 2017

and through the date of this report. Future draw-downs

may

be limited for various reasons including default or government regulations in China. Boyalife Investment Fund II, Inc. is a wholly owned subsidiary of Boyalife Group Inc., which is owned and controlled by the Company’s Chief Executive Officer and Chairman of the Board.

December 1, 2017,

the Company sold

898,402

shares of common stock at a price of

$3.00

per share

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

$2,368,000.

July 7, 2017,

the Company,

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

20%

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

one

-time cash payment of

$1.0

million to SynGen. (Refer to Note

August 22, 2016,

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

February 2016

debentures aggregating

$23,903,000

dating back to Cesca’s

February 2016

financing. Upon conversion,

6,102,941

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

August 3, 2016,

the Company sold

600,000

shares of common stock at a price of

$4.10

per share.

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

$2,092,000.

December 31, 2017,

the Company had cash and cash equivalents of

$3,513,000

and working capital of

$5,990,000.

The Company has incurred recurring operating losses and as of

December 31, 2017

had an accumulated deficit of

$187,640,000.

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 device 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 plans to 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.

The accompanying 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 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 consolidated financial statements include the accounts of Cesca

, its majority-owned subsidiary, ThermoGenesis, and its wholly-owned subsidiaries, TotipotentRX Cell Therapy, Pvt. Ltd. and TotipotentSC Scientific Product Pvt. Ltd. All significant intercompany accounts and transactions have been eliminated upon consolidation.

Noncontrolling Interests

The

20%

ownership interest of ThermoGenesis

that is

not

owned by Cesca, is accounted for as a non-controlling interest as the Company has an

80%

ownership interest in the subsidiary. Earnings or losses attributable to other stockholders of a consolidated affiliated company are classified separately as "noncontrolling interest" in the Company's consolidated statements of operations. Net loss attributable to noncontrolling interest reflects only its share of the after-tax earnings or losses of an affiliated company. The Company's consolidated balance sheets reflect noncontrolling interests within the equity section.