8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 12, 2020

THERMOGENESIS HOLDINGS, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	333-82900		94-3018487
(State or Other Jurisdiction	(Commission		(IRS Employer
of Incorporation)	File Number)		Identification No.)
2711 Citrus Road, Rancho Cordova, California		95742
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (916) 858-5100

(Former Name or Former Address, if Changed Since Last Report)

N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $.001 par value	THMO	Nasdaq Capital Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

      ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

      ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

      ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

      ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company      ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02. Results of Operations and Financial Condition.

On November 12, 2020, ThermoGenesis Holdings, Inc. (the “Company”) issued a press release announcing its results of operations and financial condition for the third quarter of calendar year 2020. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Information contained in this Item 2.02 and in Exhibit 99.1 attached to this Current Report on Form 8-K is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, except as shall be expressly set forth in such a filing. 

Item 9.01. Financial Statements and Exhibits.

Exhibit No.	Description
99.1	Press release dated November 12, 2020, titled “ThermoGenesis Holdings Announces Financial Results for the Third Quarter Ended September 30, 2020 and Provides Corporate Update”.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THERMOGENESIS HOLDINGS, INC.
	(Registrant)
Dated: November 12, 2020	/s/ Jeff Cauble
	Jeff Cauble, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

EX-99.1

Exhibit 99.1

ThermoGenesis Holdings Announces Financial Results for the Third Quarter Ended September 30, 2020 and Provides Corporate Update

Conference Call to be Held Today at 1:30 p.m. PT/4:30 p.m. ET

RANCHO CORDOVA, Calif., Nov 12, 2020 -- ThermoGenesis Holdings, Inc. (Nasdaq: THMO), a market leader in automated cell processing tools and services in the cell and gene therapy field, today announced financial and operating results for the third quarter ended September 30, 2020 and provided a corporate update.

Financial Results for the Quarter Ended September 30, 2020

Net Revenues. Consolidated net revenues for the three months ended September 30, 2020 were $2.4 million compared to $4.1 million for the three months ended September 30, 2019, a decrease of $1.7 million or 42%. The decrease was driven by lower AXP® disposable and CAR-TXpress^™ sales. The COVID-19 pandemic appears to be the main driver of the decline as fewer cord blood units are being stored globally during the pandemic. The Company expects sales to increase after the pandemic is over.

Gross Profit. The Company’s gross profit was $1.5 million or 64% of net revenues for the three months ended September 30, 2020, compared to $1.9 million or 47% of net revenues for the quarter ended September 30, 2019, a decrease of $0.4 million. The decrease was driven by the decline in AXP disposable and CAR-TXpress sales, partially offset by a refund of approximately $0.8 million from ImmuneCyte for its mark-up on sales of the testing kits which were previously reserved by the Company.

Sales and Marketing Expenses. Consolidated sales and marketing expenses were $539,000 for the three months ended September 30, 2020, as compared to $502,000 for the three months ended September 30, 2019, an increase of 7%. The increase was driven by accrued expenses related to the Company’s employee short-term incentive program and for consulting expenses. These increases were partially offset by lower stock compensation expense in the quarter ended September 30, 2020.

Research and Development Expenses. Consolidated research and development expenses were $750,000 for the three months ended September 30, 2020, compared to $584,000 for the three months ended September 30, 2019, an increase of $166,000 or 28%. The increase was driven by development expenses for the Company’s COVID-19 cartridge reader.

General and Administrative Expenses. Consolidated general and administrative expenses for the three months ended September 30, 2020 were $1.3 million, compared to $1.1 million for the three months ended September 30, 2019, an increase of $0.2 million or 15%. The primary driver of the increase was accrued expenses related to the Company’s employee short-term incentive program and severance expense.

Interest Expense. Interest expense for the three months ended September 30, 2020 was $1.5 million, compared to $1.2 million for the three months ended September 30, 2019, an increase of $0.3 million. The increase was driven by additional interest expense and amortization of the debt discount related to the Revolving Credit Agreement with Boyalife Asset Holding II, Inc.

Net Loss. For the quarter ended September 30, 2020, the Company reported a comprehensive loss attributable to common stockholders of $2.5 million, or $(0.37) per share, based on 6,711,664 weighted average basic and diluted common shares outstanding. This compares to a comprehensive net loss of $2.3 million, or $(0.78) per share, based on 2,913,198 weighted average basic and diluted common shares outstanding for the quarter ended September 30, 2019.

Adjusted EBITDA. In addition to the results reported under U.S. GAAP, the Company also uses a non-GAAP measure, adjusted EBITDA, to evaluate operating performance and to facilitate the comparison of its historical results and trends. The Company uses the metric to determine operational cash flow. Adjusted EBITDA for the three months ended September 30, 2020 was a loss of $672,000, compared to income of $125,000 for the three months ended September 30, 2019, a decrease of $797,000. The adjusted EBITDA decrease was driven by a reduction in gross profit as the result of lower sales, inventory reserves, accrued expenses related to the Company’s employee short-term incentive program, increased research and development expenses and severance expense. These decreases were partially offset by an $0.8 million refund received from ImmuneCyte for its mark-up portion of the testing kits previously reserved by the Company. A reconciliation of adjusted EBITDA to net loss is set forth below.

Liquidity and Capital Resources. At September 30, 2020, the Company had cash and cash equivalents totaling $4.4 million, compared with $3.2 million at December 31, 2019. Working capital improved to $7.1 million at September 30, 2020 as compared to $3.2 million at December 31, 2019.

Conference Call and Webcast Information

ThermoGenesis will host a conference call today at 1:30 p.m. PT/4:30 p.m. ET. To participate in the conference call, please dial 1-844-889-4331 (domestic), 1-412-380-7406 (international) or 1-866-605-3852 (Canada). To access a live webcast of the call, please visit: https://thermogenesis.com/investors/news-and-events/events-webcasts.

A webcast replay will also be available on ThermoGenesis’ website for three months, please visit: https://thermogenesis.com/investors/news-and-events/events-webcasts.

About ThermoGenesis Holdings, Inc.

ThermoGenesis Holdings, Inc. develops, commercializes, and markets a range of automated technologies for CAR-T and other cell-based therapies. The Company currently markets a full suite of solutions for automated clinical biobanking, point-of-care applications, and automation for immuno-oncology, including its semi-automated, functionally-closed CAR-TXpress™ platform, which streamlines the manufacturing process for the emerging CAR-T immunotherapy market. For more information about ThermoGenesis, please visit: www.thermogenesis.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained herein. When used in this press release, the words "anticipate," "believe," "estimate," "expect" and similar expressions as they relate to the Company or its management are intended to identify such forward-looking statements. Actual results, performance or achievements could differ materially from the results expressed in or implied by these forward-looking statements. Readers should be aware of important factors that, in some cases, have affected, and in the future could affect, actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. These factors include without limitation, the ability to obtain capital and other financing in the amounts and at the times needed to launch new products, market acceptance of new products, the nature and timing of regulatory approvals for both new products and existing products for which the Company proposes new claims, realization of forecasted revenues, expenses and income, initiatives by competitors, price pressures, failure to meet FDA regulated requirements governing the Company’s products and operations (including the potential for product recalls associated with such regulations), risks associated with initiating manufacturing for new products, failure to meet Foreign Corrupt Practice Act regulations, legal proceedings, uncertainty associated with the COVID-19 pandemic, and other risk factors listed from time to time in our reports with the Securities and Exchange Commission (“SEC”), including, in particular, those set forth in ThermoGenesis Holdings’ Form 10-K for the year ended December 31, 2019.

Company Contact:
Wendy Samford
916-858-5191
ir@thermogenesis.com

Investor Contact:
Paula Schwartz, Rx Communications
917-322-2216
pschwartz@rxir.com

Financials

ThermoGenesis Holdings, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

	September 30, 2020		December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	4,436,000	$	3,157,000
Restricted cash		--		1,000,000
Accounts receivable, net		1,698,000		1,278,000
Inventories, net		5,876,000		3,824,000
Prepaid expenses and other current assets		766,000		602,000
Total current assets		12,776,000		9,861,000
Equipment and leasehold improvements, net		1,537,000		2,028,000
Right-of-use operating lease assets, net		765,000		859,000
Goodwill		781,000		781,000
Intangible assets, net		1,382,000		1,467,000
Other assets		48,000		218,000
Total assets	$	17,289,000	$	15,214,000
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,661,000	$	1,447,000
Other current liabilities		4,059,000		5,238,000
Total current liabilities		5,720,000		6,685,000
Long-term liabilities		8,267,000		7,613,000
ThermoGenesis Holdings, Inc. stockholders' equity		3,132,000		386,000
Noncontrolling interests		170,000		530,000
Total liabilities and equity	$	17,289,000	$	15,214,000

ThermoGenesis Holdings, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Net revenues	$	2,355,000		$	4,058,000		$	7,797,000		$	11,325,000
Cost of revenues		844,000			2,163,000			7,426,000			6,220,000
Gross profit		1,511,000			1,895,000			371,000			5,105,000
Expenses:
Sales and marketing		539,000			502,000			1,424,000			1,227,000
Research and development		750,000			584,000			1,937,000			1,758,000
General and administrative		1,305,000			1,139,000			4,489,000			3,617,000
Total operating expenses		2,594,000			2,225,000			7,850,000			6,602,000
Loss from operations		(1,083,000	)		(330,000	)		(7,479,000	)		(1,497,000	)
Interest expense		(1,531,000	)		(1,188,000	)		(6,377,000	)		(3,531,000	)
Loss on equity method investments		--			--			(13,000	)		--
Loss on extinguishment of debt		--			(840,000	)		--			(840,000	)
Other income (expenses)		5,000			(15,000	)		7,000			(27,000	)
Total other expenses		(1,526,000	)		(2,043,000	)		(6,383,000	)		(4,398,000	)
Net loss		(2,609,000	)		(2,373,000	)		(13,862,000	)		(5,895,000	)
Loss attributable to noncontrolling interests		(146,000	)		(91,000	)		(360,000	)		(445,000	)
Net loss attributable to common stockholders	$	(2,463,000	)	$	(2,282,000	)	$	(13,502,000	)	$	(5,450,000	)

ThermoGenesis Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited) 

	Nine Months Ended September 30,
	2020			2019
Cash flows from operating activities:
Net cash used in operating activities	$	(11,859,000	)	$	(3,518,000	)
Cash flows from investing activities:
Capital expenditures		(23,000	)		(178,000	)
Net cash used in investing activities		(23,000	)		(178,000	)
Cash flows from financing activities:
Proceeds from convertible promissory note-related party		4,287,000			1,513,000
Payments on financing lease obligations		(32,000	)		(15,000	)
Proceeds from issuance of common stock, net of expenses		5,580,000			756,000
Proceeds from exercise of options, warrants and pre-funded warrants		1,683,000			42,000
Proceeds from long-term debt		--			1,800,000
Proceeds from note payable		646,000			--
Net cash provided by financing activities		12,164,000			4,096,000
Effects of exchange rate changes on cash and cash equivalents		(3,000	)		--
Net increase (decrease) in cash, cash equivalents and restricted cash		279,000			400,000
Cash, cash equivalents and restricted cash at beginning of period		4,157,000			3,400,000
Cash, cash equivalents and restricted cash at end of period	$	4,436,000		$	3,800,000

ThermoGenesis Holdings, Inc.

Reconciliation of Adjusted EBITDA to Net Income (Loss)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Net loss	$	(2,609,000	)	$	(2,373,000	)	$	(13,862,000	)	$	(5,895,000	)
Deduct:
Interest expense		(1,531,000	)		(1,188,000	)		(6,377,000	)		(3,531,000	)
Fair value change of derivative instruments and other		5,000			(15,000	)		7,000			(27,000	)
Loss on extinguishment of debt		--			(840,000	)		--			(840,000	)
Loss on equity method investments		--			--			(13,000	)		--
Loss from operations	$	(1,083,000	)	$	(330,000	)	$	(7,479,000	)	$	(1,497,000	)
Add:
Depreciation and amortization		177,000			202,000			569,000			604,000
Stock-based compensation expense		234,000			253,000			615,000			459,000
Adjusted EBITDA	$	(672,000	)	$	125,000		$	(6,295,000	)	$	(434,000	)

The Company defines adjusted EBITDA as income (or loss) from operations less, depreciation, amortization, stock compensation and impairment of intangible assets.