Stockholders

’

Equity

Common Stock

August 28, 2018,

the Company completed a private placement transaction with an accredited investor, in which the Company sold

1,000,000

shares of Common Stock for a purchase price of

$0.18

per share and

2,965,000

pre-funded warrants for a purchase price of

$0.17

per pre-funded warrant. Each pre-funded warrant is immediately exercisable for

one

share of Common Stock at an exercise price of

$0.01

per share and will remain exercisable until exercised in full. The Company received

$684,000

in gross proceeds, net proceeds of

$623,000

after deducting offering expenses of

$61,000.

As of

December 31, 2018,

none

of the pre-funded warrants issued in the

August 2018

private placement have been exercised. In addition, subject to certain exceptions, in the event the Company sells or issues any shares of Common Stock or common stock equivalents through

February 26, 2019,

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. The Company evaluated the pre-funded warrants issued and determined that the warrants should be classified as equity instruments.

May 18, 2018,

the Company completed a public offering

6,475,001

Units and

2,691,666

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

$4,820,000

after deducting the offering expenses of

$680,000.

Each Unit consists of

one

share of Common Stock, and

one

common warrant to purchase

one

share of Common Stock, and each Pre-Funded Unit consists 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. The Company evaluated the warrants issued and determined that they should be classified as equity instruments. All

2,691,666

Pre-Funded units issued in the

May 2018

public offering were exercised in the

second

quarter of fiscal

2018.

March 28, 2018,

the Company sold

609,636

shares of Common Stock at a price of

$2.27

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 of approximately

$171,000,

were

$1,213,000.

Additionally, the investors received unregistered warrants in a simultaneous private placement to purchase up to

304,818

shares of common stock. The warrants have an exercise price of

$2.68

per share and were exercisable

six

months following the issuance date, or

September 28, 2018,

and have a term of

5.5

years and were accounted for as equity by the Company.

December 1, 2017,

the Company closed a public offering of common stock consisting of an aggregate of

898,402

shares of common stock at a price to the public of

$3.00

per share for aggregate offering proceeds of

$2.7

million. After deducting the offering expenses of

$327,000,

the net proceeds in the offering were

$2,368,000.

August 22, 2016,

the Company notified Boyalife Investment Inc., that it elected to convert all outstanding principal and interest accrued and otherwise payable under the Debentures, which included the conversion of

$12,500,000

of principal and

$8,250,000

of interest up to and including the maturity date of the Debentures. Upon conversion,

6,102,941

shares of common stock were issued and the Debentures and all related security interest 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 of

$369,000,

were

$2,092,000.

July 2016,

the Compensation Committee of the Board of Directors granted

118,288

shares of fully vested common stock to employees in partial payment of amounts earned under the Company’s

2016

short term incentive plan. The election was made by some of the employees to satisfy the applicable federal income tax withholding obligation by a net share settlement, pursuant to which the Company withheld

46,879

shares and used the deemed proceeds from those shares to pay the income tax withholding.

Warrants

A summary of warrant activity is as follows:

	Year Ended December 31,					Six Months Ended December 31,				Year Ended June 30,
	2018					2017				2017
	Number of Shares			Weighted- Average Exercise Price Per Share		Number of Shares		Weighted- Average Exercise Price Per Share		Number of Shares		Weighted- Average Exercise Price Per Share
Beginning balance		4,828,723		$	9.37		4,828,723	$	9.37		4,828,723	$	9.37
Warrants granted		15,128,151		$	0.42		--				--
Warrants exercised		(2,691,666	)	$	0.01
Warrants expired/canceled		--					--				--
Outstanding		17,265,208		$	2.99		4,828,723	$	9.37		4,828,723	$	9.37
Exercisable		16,566,679		$	2.78		4,130,194	$	9.60		4,130,194	$	9.60

Equity Plans and Agreements

The Company recorded stock-based compensation of

$652,000

for the year ended

December 31, 2018,

$291,000

for the

six

months ended

December 31, 2017

and

$1,461,000

for the year ended

June 30, 2017.

The Amended

2016

Equity Incentive Plan (Amended

2016

Plan) was approved by the stockholders in

May 2017,

under which up to

600,000

may

be issued pursuant to grants of shares, options, or other forms of incentive compensation. On

June 22, 2018,

the stockholders approved an amendment to the Amended

2016

Plan to increase the number of shares that

may

be issued to

1,325,000

shares. On

December 14, 2018,

the Board approved and adopted an amendment to the Amended

2016

Plan to increase the number of shares that

may

be issued from

1,325,000

shares to

3,950,000

shares. The Plan Amendment will be null and void if

not

approved by the Company’s stockholders prior to

December 14, 2019.

As of

December 31, 2018,

901,100

awards were available for issuance under the Amended

2016

Plan.

The

2012

Independent Director Plan (

2012

Plan) permits the grant of stock or options to independent directors. A total of

25,000

shares were approved by the stockholders for issuance under the

2012

Plan. Options are granted at prices that 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 in monthly increments over

one

year, unless otherwise determined by the Board of Directors. As of

December 31, 2018,

there were

2,444

shares available for issuance.

The

2006

Equity Incentive Plan (

2006

Plan) permitted the grant of options, restricted stock units, stock bonuses and stock appreciation rights to employees, directors and consultants. The

2006

Plan, but

not

the awards granted thereunder, expired in

2016.

As of

December 31, 2018,

62,676

option awards remained outstanding.

December 29, 2017,

the Board of Directors of ThermoGenesis Corp adopted the ThermoGenesis Corp.

2017

Equity Incentive Plan (the “ThermoGenesis Plan”) and on the same day granted options to purchase an aggregate of

280,000

shares of ThermoGenesis common stock to employees, directors, consultants, and advisors of ThermoGenesis. The ThermoGenesis Plan was unanimously approved by the ThermoGenesis stockholders (including the Company) on

December 29, 2017.

The ThermoGenesis Plan authorizes the issuance of up to

1,000,000

shares of ThermoGenesis common stock. There are

775,000

shares available for issuance as of

December 31, 2018.

December 14, 2018,

the CEO, the Principal Financial and Accounting Officer (“PFAO”) and other employees were granted

2,140,000

options to purchase shares of the Company’s common stock at an exercise price of

$0.2979

per share. The options vest in

five

equal installments on the date of grant and the

first

four

anniversaries of the grant date. A portion of the grant,

1,699,333

shares are subject to approval of the

2016

Plan Amendment by the Company’s stockholders on or before

December 14, 2019.

The officers and employees will

not

have the right to exercise such portion (and such portion will terminate) unless such approval is obtained by such date.

December 29, 2017,

the CEO was granted

300,000

options to purchase shares of the Company’s common stock at an exercise price of

$3.00

per share. The option vests in

five

equal installments on

December 31, 2018,

2019,

2020,

2021

and

2022.

July 7, 2016,

the Compensation Committee also adopted a short term incentive program under which cash awards and shares of common stock

may

be granted to employees of the Company (the “Short Term Program”). The aggregate amount of the cash awards issuable pursuant to the Short Term Plan is approximately

$276,000.

Up to

104,000

shares of common stock from the Company’s

2006

Plan, subject to vesting, are issuable pursuant to the Short Term Program. On

July 26, 2016,

98,417

shares and

$266,000

of cash awards were granted under the Short Term Program. The cash awards granted pursuant to the Short Term Program were payable and the shares of common stock issued pursuant to the Short Term Program fully vested on

July 1, 2017,

provided, that such award recipients were employed by the Company as of

July 1, 2017

or immediately if terminated without cause. Three of the

eight

employees were terminated without cause during the year ended

June 30, 2017,

as such,

51,636

shares vested. The remaining

46,781

shares vested on

July 1, 2017.

Upon the termination of the employment of the Company’s CEO in

November 2016

and Chief Financial Officer (CFO) in

March 2017,

in accordance with their employment agreements, all outstanding options and restricted stock unit awards immediately vested. As a result, the Company recognized (i)

$539,000

of stock compensation expense in general and administrative for the quarter ended

December 31, 2016,

as the vesting accelerated on the CEO’s options to purchase

72,496

shares of common stock and

79,720

restricted stock unit awards, and (ii)

$94,000

of stock compensation expense in general and administrative for the quarter ended

March 31, 2017

as the vesting accelerated on the CFO’s options to purchase

16,248

shares of common stock and

15,914

restricted stock unit awards. Additionally, the terms of the options were modified upon the executives’ termination such that the options were deemed to be exercisable for longer than

days from the date of termination. There was

incremental compensation cost recorded for this modification as the fair-value-based measure of the modified award on the date of modification was less than the fair-value-based measure of the original award immediately before the modification.

Stock Options

The Company issues new shares of common stock upon exercise of stock options. 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 January 1, 2018		1,156,027		$	3.92

Granted		2,233,500		$	0.40
Forfeited/cancelled		(338,518	)	$	3.10
Expired		(27,370	)	$	4.83
Exercised		--
Outstanding at December 31, 2018		3,023,639		$	1.40		9.3		--
Vested and Expected to Vest at December 31, 2018		1,893,518		$	1.77		8.9		--
Exercisable at December 31, 2018		901,742		$	2.79		8.1		--

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

options that were exercised during the years ended

December 31, 2018

and

June 30, 2017.

During the

six

months ended

December 31, 2017,

the aggregate intrinsic value of options exercised was

$8,000

determined as of the date of option exercise.

July 7, 2016,

the Compensation Committee of the Board of Directors granted options to purchase a total of

156,100

common shares to various employees under the

2016

Plan. The options have an exercise price of

$2.86,

the closing price on the date of grant, vest ratably every

six

months over a

three

year period and have a

seven

year life.

Non-vested stock option activity for the year ended

December 31, 2018,

is as follows:

	Non-vested Stock Options			Weighted-Average Grant Date Fair Value
Outstanding at January 1, 2018		835,708			$2.37
Granted		2,233,500			$0.32
Vested		(651,180	)		$0.97
Forfeited		(296,131	)		$2.35
Outstanding at December 31, 2018		2,121,897			$0.64

The fair value of the Company’s stock options granted for the year ended

December 31, 2018,

six

months ended

December 31, 2017

and the year ended

June 30, 2017

was estimated using the following weighted-average assumptions:

	Year Ended December 31,		Six Months Ended December 31,		Year Ended June 30,
	2018		2017		2017
Expected life (years)		6		6		4
Risk-free interest rate		2.7%		2.3%		1.3%
Expected volatility		103%		95%		102%
Dividend yield		0%		0%		0%

The weighted average grant date fair value of options granted during the year ended

December 31, 2018,

six

months ended

December 31, 2017

and the year ended

June 30, 2017

was

$0.32,

$2.36

and

$2.16,

respectively.

December 31, 2018,

the total compensation cost related to options granted under the Company’s stock option plans but

not

yet recognized was

$1,202,000.

This cost will be amortized on a straight-line basis over a weighted-average period of approximately

four

years and will be adjusted for subsequent changes in estimated forfeitures. The total fair value of options vested during the year ended

December 31, 2018,

six

months ended

December 31, 2017

and the year ended

June 30, 2017

was

$633,000,

$209,000

and

$572,000,

respectively.

Common Stock Restricted Awards

The following is a summary of restricted stock unit activity:

	Year Ended December 31,					Six Month Ended December 31,					Year Ended June 30,
	2018					2017					2017
	Number of Shares			Weighted -Average Grant Date Fair Value		Number of Shares			Weighted -Average Grant Date Fair Value		Number of Shares			Weighted -Average Grant Date Fair Value
Balance at beginning of period		416			$17.60		59,694			$4.62		63,566			$14.96
Granted		--					10,000			$3.26		123,417			$4.55
Vested		(416	)		$17.60		(69,278	)		$4.35		(125,513	)		$9.47
Forfeited		--					--					(1,776	)		$27.05
Outstanding at end of period		--					416			$17.60		59,694			$4.62

In connection with the vesting of the restricted stock unit awards, the election was made by some of the employees to satisfy the applicable federal income tax withholding obligation by a net share settlement, pursuant to which the Company withheld

16,456

shares for the

six

months ended

December 31, 2017

and

145

shares for the year ended

June 30, 2017,

and used the deemed proceeds from those shares to pay the income tax withholding.