ESCRIPTION

USINESS

ASIS

RESENTATION

AND GOING CONCERN

Organization and Basis of Presentation

ThermoGenesis Holdings, Inc. (“ThermoGenesis Holdings,” the “Company,” “we,” “our,” “us”) 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. The Company was founded in

1986

and is registered in the State of Delaware and headquartered in Rancho Cordova, CA.

The Company previously had

two

reportable segments, a Device Segment and a Clinical Development Segment. Due to the winding down of the Clinical Development Segment in

2019,

the Company

longer has any material revenues or expenses in that segment. As a result, the Company's chief operating decision maker

longer reviews unconsolidated operating results and the Company

longer reports in

two

segments. The Company provides the AutoXpress

and BioArchive

platforms for automated clinical bio-banking, PXP

platform for point-of-care cell-based therapies and CAR-TXpress™ platform under development for bio-manufacturing for immuno-oncology applications. The Company and its subsidiaries currently manufacture and market the following products:

Clinical Bio-Banking Applications:

●

AXP

Automated Cell Separation System – an automated, fully closed cell separation system for isolating and retrieving stem and progenitor cells from umbilical cord blood.

●

BioArchive

Automated Cryopreservation System – an automated, robotic, liquid nitrogen controlled-rate-freezing and cryogenic storage system for cord blood samples and cell therapeutic products used in clinical applications.

Point-of-Care Applications:

●

PXP

Point-of-Care System – an automated, fully closed, sterile system allows for the rapid, automated processing of autologous peripheral blood or bone marrow aspirate derived stem cells at the point-of-care, such as surgical centers or clinics.

Large Scale Cell Processing and Biomanufacturing:

●

-Series

Products:

-Lab

for cell isolation,

-Wash

System for cell washing and reformulation,

-Mini

for high efficiency small scale cell purification, and

-BACS™ System under development for large scale cell purification using our proprietary buoyance-activated cell sorting (“BACS”) technology.

●

CAR-TXpress™ Platform – a modular designed, functionally closed platform that addresses the critical unmet need for large scale cellular processing and chemistry, manufacturing and controls (“CMC”) needs for manufacturing chimeric antigen receptor (“CAR”) T cell therapies. CAR-TXpress Bio, Inc. (“CARTXpress Bio”) is owned and developed through a subsidiary in which we own

80%

of the equity interest.

COVID-

Testing Kit:

●

Antibody Test – The ThermoGenesis SARS-CoV-

IgM/IgG Antibody Test Kit is a single-use rapid immunochromatographic test for the qualitative detection and differentiation of Immunoglobulin M (IgM) and Immunoglobulin G (IgG) antibodies to SARS-CoV-

in human serum, plasma (heparin, dipotassium EDTA, and sodium citrate), and venous whole blood (heparin, dipotassium EDTA, and sodium citrate).

January 1, 2019,

the Company entered into a reorganization of the business and equity ownership of its majority-owned ThermoGenesis Corp. subsidiary. Pursuant to the reorganization, the assets acquired by ThermoGenesis Corp. from SynGen Inc. in

July 2017

were contributed to a newly formed Delaware subsidiary of ThermoGenesis Corp., CARTXpress Bio, and the

20%

interest in ThermoGenesis Corp. held by a

third

party was exchanged for

20%

interest in CARTXpress Bio. As a result, the Company holds an

80%

equity interest in CARTXpress Bio and the Company has become the owner of

100%

of ThermoGenesis Corp. The purpose of the reorganization was to allow CARTXpress Bio to focus on the development and commercialization of the newly launched CARTXpress Bio cellular manufacturing platform.

In the reorganization, the Company reacquired the non-controlling interest shares in ThermoGenesis Corp., which had an accumulated deficit of

$1,711,000,

in exchange for

20%

equity interest in the newly formed subsidiary, CARTXpress Bio, which amounted to approximately

$1,100,000.

The total amount of

$2,843,000

related to the reorganization of subsidiary and the related increase in non-controlling interest was partially offset by a charge to additional paid in capital in stockholders' equity.

November 26, 2019

the Company entered into a joint venture agreement with HealthBanks Biotech Inc. (“HealthBanks”), an affiliate of the Boyalife Group, to form a new company called ImmuneCyte, Inc. (“ImmuneCyte”) to commercialize the Company's proprietary cell processing platform, CAR-TXpress™, for use in immune cell banking as well as for cell-based contract development and manufacturing services (CMO/CDMO). Under the terms of the JV Agreement, ImmuneCyte was initially owned

80%

by HealthBanks and

20%

by the Company. The Company currently owns

18.79%

of the equity of ImmuneCyte.

ThermoGenesis Holdings is an affiliate of the Boyalife Group, a global diversified life science holding company that focuses on stem cell technology and cell-based therapeutics.

Reverse Stock Split

June 4, 2019,

the Company effected a

one

(

) for

ten

(

) reverse split of its issued and outstanding common stock. The total number of shares of common stock authorized for issuance by the Company of

350,000,000

shares did

not

change in connection with the reverse stock split. All historical share amounts disclosed herein have been retroactively restated to reflect the reverse split and subsequent resulting share exchange.

Going Concern

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

), allowing the Company to borrow up to

$10,000,000

in principal amount outstanding at any time. As of

September 30, 2020,

the Company had drawn down the full amount available under the Credit Agreement and had an outstanding balance of

$10,000,000.

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 our Board of Directors.

April 21, 2020,

the Company entered into a promissory note and received a loan (collectively, the “PPP Loan”) from Comerica Bank (“Comerica”) under the Paycheck Protection Program (“PPP”), which was established under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration. The Company received net proceeds of

$646,000

from the PPP Loan. The current portion of the PPP loan is

$235,000

and the noncurrent portion is

$411,000.

The term of the PPP Loan is

two

years with an interest rate of

1.00%

per annum, which shall be deferred for the

first

six

months of the term of the loan or after an application is filed for loan forgiveness, whichever is later. Each monthly payment shall be in the amount which would fully amortize the principal balance outstanding under the PPP Loan. Pursuant to the terms of the CARES Act, the proceeds of the PPP Loan

may

be used for payroll costs, mortgage interest, rent or utility costs. The promissory note of the PPP Loan contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, or provisions of the promissory note. The occurrence of an event of default

may

result in a claim for the immediate repayment of the amount outstanding under the PPP Loan.

September 30, 2020,

the Company had cash and cash equivalents of

$4,436,000

and working capital of

$7,056,000.

The Company has incurred recurring operating losses and as of

September 30, 2020

had an accumulated deficit of

$250,434,000.

These recurring losses raise substantial doubt about the Company's ability to continue as a going concern within

one

year from the filing of this report. The Company

may

need to raise additional capital to grow its business, fund operating expenses and make interest payments. The Company's ability to fund its cash needs is subject to various risks, many of which are beyond its control. The Company

may

seek additional funding through debt borrowings, 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 consolidated financial statements include the accounts of ThermoGenesis Holdings and its wholly-owned subsidiaries, ThermoGenesis Corp. and TotipotentRX Cell Therapy, Pvt. Ltd and ThermoGenesis Corp's majority-owned subsidiary, CARTXpress Bio. All significant intercompany accounts and transactions have been eliminated upon consolidation.

Non-controlling Interests

The

20%

ownership interest of CARTXpress Bio that is

not

owned by ThermoGenesis Holdings is accounted for as a non-controlling interest as the Company has an

80%

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

Interim Reporting

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

-Q and Article

of Regulation S-

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

three

and

nine

month periods ended

September 30, 2020

are

not

necessarily indicative of the results that

may

be expected for the year ending

December 31, 2020.

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

-K for the year ended

December 31, 2019.