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

6 Months Ended

Jun. 30, 2018

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

Cesca Therapeutics Inc. (“Cesca Therapeutics,” “Cesca,” the “Company”), a Delaware corporation, develops, commercializes and markets a range of automated technologies for CAR-T and other cell-based therapies. The Company was founded in

1986

and is headquartered in Rancho Cordova, CA. ThermoGenesis Corp. (ThermoGenesis), its 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 technology platforms to develop autologous cell-based therapies that address significant unmet needs in the vascular and orthopedic markets.

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

Liquidity and Going Concern

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

4

). As of

June 30, 2018,

the Company had drawn down

$7,200,000

of the

$10,000,000

available under the Credit Agreement. Future draw-downs

may

be limited for various reasons including default or government regulations in China. 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.

On

May 18, 2018,

the Company completed a public offering of

6,475,001

 units (the “Units”) and

2,691,666

pre-funded units (the “Pre -Funded Units”) for a purchase price of

$0.60

per unit, resulting in aggregate gross proceeds of approximately

$5,500,000,

net proceeds of

$4,819,000

after deducting offering expenses of

$681,000.

  Each Unit consisted of

one

share of the Company’s common stock, par value

$0.001

per share (Common Stock), and

one

common warrant to purchase

one

share of Common Stock, and each Pre-Funded Unit consisted of

one

pre-funded warrant to purchase

one

share of Common Stock and

one

common warrant to purchase

one

share of Common Stock.  The common warrants included in the Units and Pre-Funded Units were immediately exercisable at a price of

$0.60

per share of Common Stock, subject to adjustment in certain circumstances, and will expire

five

years from the date of issuance.

As of

June 30, 2018,

all

2,691,666

Pre-Funded Units issued in the

May 2018

public offering have been exercised.

At

June 30, 2018,

the Company had cash and cash equivalents of

$3,071,000

and working capital of

$5,006,000.

  The Company has incurred recurring operating losses and as of

June 30, 2018

had an accumulated deficit of

$217,337,000.

  These conditions 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 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 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 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.

Interim Reporting

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

10

-Q and Article

10

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

six

-month period ended

June 30, 2018,

are

not

necessarily indicative of the results that

may

be expected for the year ending

December 31, 2018.

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

10

-K for the transition period ended

December 31, 2017.

Reclassification

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

not

have an impact on net loss as previously reported.