Acquisition

of SynGen

July 7, 2017,

Cesca, through its then wholly-owned subsidiary ThermoGenesis, entered into an Asset Acquisition Agreement (the “Asset Acquisition Agreement”) with SynGen, and acquired substantially all of SynGen’s operating assets, including its proprietary cell processing platform technology (the “Transaction”).

The business acquired in the Transaction excludes certain assets and liabilities of SynGen that ThermoGenesis did

not

acquire under the Asset Acquisition Agreement including cash and cash equivalents, accounts receivable, certain prepaid expenses and other current assets, other assets, accounts payable and other accrued liabilities. The acquisition was consummated for the purpose of enhancing the Company’s cord blood product portfolio and settling litigation between the Company and SynGen.

The acquisition was accounted for under the acquisition method of accounting for business combinations which requires, among other things, that the assets acquired, and liabilities assumed be recognized at their fair values as of the acquisition date. Acquisition-related costs are

not

included as a component of the acquisition accounting but are recognized as expenses in the periods in which the costs are incurred. Acquisition related costs of

$208,000

for the

six

months ended

December 31, 2017

were included in general and administrative expenses.

The consideration for the Transaction consisted of

$1,000,000

in cash and ThermoGenesis’ issuance at closing to SynGen of an aggregate of

2,000,000

shares of its common stock, constituting a

20%

interest, which had a fair market value utilizing the income approach of

$2,528,000.

It is anticipated that the goodwill will be deductible for tax purposes. The

2,000,000

shares of common stock were transferred to Bay City Capital Fund V, L.P. and an affiliated fund (“Bay City”).

Allocation of Consideration Transferred to Net Assets Acquired

The following is the summary of the fair value of the assets acquired and the liabilities assumed by Cesca in the Transaction, reconciled to the consideration transferred.

Purchase Price:
Cash			$	1,000,000
2,000,000 common shares of ThermoGenesis				2,528,000
Fair value of assets acquired:
Inventories		649,000
Developed technology	318,000
Trade name	26,000
In process technology	1,143,000
Customer relationships	41,000
Total intangible assets		1,528,000
Equipment		585,000
Total assets		2,762,000
Fair value of liabilities assumed:
Other liabilities		15,000
Net assets acquired				(2,747,000	)
Goodwill			$	781,000

Supplemental Pro Forma Data

The Company used the acquisition method of accounting to account for the SynGen acquisition and, accordingly, the results of SynGen are included in the Company’s consolidated financial statements for the period subsequent to the date of acquisition. For the year ended

December 31, 2018

and

six

months ended

December 31, 2017

Cesca has recorded revenues of approximately

$907,000

and

$107,000,

respectively, associated with the operations of SynGen. The amount of net loss specifically related to SynGen operations for the period beginning

July 7, 2017,

included in the consolidated statements of operations and comprehensive loss is impracticable to calculate due to the fact that SynGen and its operations are

longer accounted for on a stand-alone basis. The following unaudited supplemental pro forma data for the

six

months ended

December 31, 2017

and the year ended

June 30, 2017

present consolidated information as if the acquisition had been completed on

July 1, 2016.

The pro forma results were calculated by combining the results of Cesca Inc. with the stand-alone results of SynGen Inc. for the pre-acquisition periods:

	Six Months Ended December 31			Year Ended June 30
	2017			2017
Net revenues	$	6,013,000		$	15,592,000
Net loss	$	(2,600,000	)	$	(30,701,000	)
Basic and diluted net loss per common share	$	(0.21	)	$	(3.39	)

The unaudited pro forma financial information reflects certain adjustments related to the acquisition, such as the incremental amortization expense in connection with recording acquired identifiable intangible assets at fair value, the revised payroll expense associated with the new salaries of SynGen employees resulting from the merger, the elimination of SynGen expenses related to debt issuance costs, interest and other warrant related expenses, the elimination of the legal fees paid by both parties related to the litigation between Cesca and SynGen as ceasing the litigation was part of the Asset Acquisition Agreement and costs directly related to the acquisition.