thmo20220331

thmo20220331_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2022.

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition from _____________ to _______________.

Commission File Number: 333-82900 ThermoGenesis Holdings, Inc. (Exact name of registrant as specified in its charter)

Delaware (State of incorporation)		94-3018487 (I.R.S. Employer Identification No.)

2711 Citrus Road Rancho Cordova, California 95742 (Address of principal executive offices) (Zip Code) (916) 858-5100 (Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at May 18, 2022
Common stock, $.001 par value		12,829,877

		Page Number
PART I FINANCIAL INFORMATION

ITEM 1.	Financial Statements	1

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	15

ITEM 4.	Controls and Procedures	15

PART II OTHER INFORMATION

ITEM 1.	Legal Proceedings	16
ITEM 1A.	Risk Factors	16
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
ITEM 3.	Defaults upon Senior Securities	16
ITEM 4.	Mine Safety Disclosure	16
ITEM 5.	Other Information	16
ITEM 6.	Exhibits	17

Signatures		18

	March 31, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	3,652,000		$	7,280,000
Accounts receivable, net of allowance for doubtful accounts of $156,000 at March 31, 2022 and December 31, 2021		2,175,000			733,000
Inventories		5,893,000			5,373,000
Prepaid expenses and other current assets		1,474,000			1,578,000
Total current assets		13,194,000			14,964,000

Inventories non-current, net		1,197,000			1,709,000
Equipment and leasehold improvements, net		1,224,000			1,261,000
Right-of-use operating lease assets, net		525,000			571,000
Goodwill		781,000			781,000
Other intangible assets, net		1,310,000			1,318,000
Other assets		48,000			48,000
Total assets	$	18,279,000		$	20,652,000

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,866,000		$	1,280,000
Accrued payroll and related expenses		456,000			348,000
Deferred revenue – short-term		1,159,000			719,000
Convertible promissory note – related party		10,000,000			--
Interest payable – related party		153,000			2,231,000
Convertible promissory note, net		1,000,000			813,000
Other current liabilities		843,000			957,000
Total current liabilities		15,477,000			6,348,000

Convertible promissory note – related party, net		--			9,245,000
Operating lease obligations – long-term		338,000			398,000
Deferred revenue – long-term		1,163,000			1,244,000
Other noncurrent liabilities		19,000			20,000
Total liabilities		16,997,000			17,255,000

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.001 par value; 2,000,000 shares authorized, none outstanding		--			--

Common stock, $0.001 par value; 350,000,000 shares authorized; 12,829,877 issued and outstanding (11,911,784 at December 31, 2021)		13,000			12,000
Additional paid in capital		258,614,000			268,447,000
Accumulated deficit		(256,833,000	)		(264,662,000	)
Accumulated other comprehensive loss		45,000			31,000
Total ThermoGenesis Holdings, Inc. stockholders’ equity		1,839,000			3,828,000

Noncontrolling interests		(557,000	)		(431,000	)
Total equity		1,282,000			3,397,000
Total liabilities and equity	$	18,279,000		$	20,652,000

	Three Months Ended March 31,
	2022			2021

Net revenues	$	2,663,000		$	1,517,000
Cost of revenues		1,723,000			809,000

Gross profit		940,000			708,000

Expenses:

Selling, general and administrative		1,693,000			1,992,000
Research and development		456,000			379,000

Total operating expenses		2,149,000			2,371,000

Loss from operations		(1,209,000	)		(1,663,000	)

Other income (expenses):
Interest expense		(823,000	)		(1,519,000	)
Other income (expenses)		(4,000	)		(1,000	)
Gain / (loss) on extinguishment of debt		--			652,000
Total other expenses		(827,000	)		(868,000	)

Net loss		(2,036,000	)		(2,531,000	)

Loss attributable to noncontrolling interests		(126,000	)		(118,000	)
Net loss attributable to common stockholders	$	(1,910,000	)	$	(2,413,000	)

COMPREHENSIVE LOSS
Net loss	$	(2,036,000	)	$	(2,531,000	)
Other comprehensive loss:
Foreign currency translation adjustments gain (loss)		14,000			1,000
Comprehensive loss		(2,022,000	)		(2,530,000	)
Comprehensive loss attributable to noncontrolling interests		(126,000	)		(118,000	)
Comprehensive loss attributable to common stockholders	$	(1,896,000	)	$	(2,412,000	)

Per share data:

Basic and diluted net loss per common share	$	(0.16	)	$	(0.21	)
Weighted average common shares outstanding basic and diluted		12,288,517			11,446,366

	Shares		Common Stock		Paid in Capital in Excess of Par			Accumulated Deficit			AOCL*		Non- Controlling interests			Total Equity
Balance at January 1, 2022		11,911,784	$	12,000	$	268,447,000		$	(264,662,000	)	$	31,000	$	(431,000	)	$	3,397,000

Adoption of ASU 2020-06		--		--		(10,681,000	)		9,739,000			--		--			(942,000	)
Stock-based compensation expense		--		--		42,000			--			--		--			42,000
Issuance of common stock via at-the-market offering, net		918,093		1,000		593,000			--			--		--			594,000
Related party convertible note price reset						213,000											213,000
Foreign currency translation gain		--		--		--			--			14,000		--			14,000
Net loss		--		--		--			(1,910,000	)		--		(126,000	)		(2,036,000	)
Balance at March 31, 2022		12,829,877	$	13,000	$	258,614,000		$	(256,833,000	)	$	45,000	$	(557,000	)	$	1,282,000

	Shares		Common Stock		Paid in Capital in Excess of Par		Accumulated Deficit			AOCL*		Non-Controlling interests			Total Equity
Balance at January 1, 2021		8,934,952	$	9,000	$	259,058,000	$	(253,283,000	)	$	16,000	$	70,000		$	5,870,000

Stock-based compensation expense		--		--		258,000		--			--		--			258,000
Issuance of common stock via at- the-market offering, net		2,976,832		3,000		6,829,000		--			--		--			6,832,000
Foreign currency translation gain		--		--		--		--			1,000		--			1,000
Net loss		--		--		--		(2,413,000	)		--		(118,000	)		(2,531,000	)
Balance at March 31, 2021		11,911,784	$	12,000	$	266,145,000	$	(255,696,000	)	$	17,000	$	(48,000	)	$	10,430,000

	Three Months Ended March 31,
	2022			2021
Cash flows from operating activities:
Net loss	$	(2,036,000	)	$	(2,531,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		150,000			166,000
Stock-based compensation expense		42,000			258,000
Amortization of debt discount/premium, net		213,000			908,000
Reserve for excess and slow-moving inventories		374,000			(4,000	)
Gain on extinguishment of debt		--			(652,000	)
Net change in operating assets and liabilities:
Accounts receivable		(1,442,000	)		556,000
Inventories		(383,000	)		(718,000	)
Prepaid expenses and other assets		103,000			148,000
Accounts payable		599,000			(38,000	)
Interest payable – related party		(2,078,000	)		(1,532,000	)
Accrued payroll and related expenses		107,000			124,000
Deferred revenue – short term		441,000			88,000
Other current liabilities		(112,000	)		(603,000	)
Long-term deferred revenue and other noncurrent liabilities		(137,000	)		(122,000	)

Net cash used in operating activities		(4,159,000	)		(3,952,000	)

Cash flows from investing activities:
Capital expenditures		(65,000	)		(27,000	)
Net cash used in investing activities		(65,000	)		(27,000	)

Cash flows from financing activities:
Proceeds from issuance of common stock, net of $87,000 in expenses		594,000			6,832,000
Net cash provided by financing activities		594,000			6,832,000

Effects of foreign currency rate changes on cash and cash equivalents		2,000			--
Net increase (decrease) in cash and cash equivalents		(3,628,000	)		2,853,000

Cash and cash equivalents at beginning of period		7,280,000			7,161,000
Cash and cash equivalents at end of period	$	3,652,000		$	10,014,000

Supplemental disclosures of cash flow information:
Cash paid for related party interest	$	2,628,000		$	2,082,000
Cash paid for interest	$	60,000		$	60,000
Related party convertible note price reset	$	213,000			--

	Before			After
Conversion Price	$	1.80		$	0.64
Term (in years)		0.02			0.02
Volatility		39.53	%		39.53	%
Dividend rate		0	%		0	%
Risk free rate		1.97	%		1.97	%

	2022		2021
Common stock equivalents of convertible promissory note and accrued interest		17,420,222		6,449,950
Warrants – other		653,248		653,248
Stock options		342,670		889,636
Total		18,416,140		7,992,834

	Three Months Ended March 31, 2022
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
AXP	$	1,711,000	$	55,000	$	--	$	1,766,000
BioArchive		155,000		298,000		--		453,000
CAR-TXpress		199,000		43,000		71,000		313,000
Manual Disposables		105,000		--		--		105,000
Other		17,000		--		9,000		26,000
Total	$	2,187,000	$	396,000	$	80,000	$	2,663,000

	Three Months Ended March 31, 2021
	Device Revenue		Service Revenue		Other Revenue		Total Revenue
AXP	$	225,000	$	39,000	$	--	$	264,000
BioArchive		208,000		542,000		--		750,000
CAR-TXpress		255,000		28,000		71,000		354,000
Manual Disposables		129,000		--		--		129,000
Other		7,000		--		13,000		20,000
Total	$	824,000	$	609,000	$	84,000	$	1,517,000

	Remainder of 2022		2023		2024		2025		2026 and beyond		Total
Service revenue	$	1,075,000	$	666,000	$	184,000	$	83,000	$	--	$	2,008,000
Device revenue ⁽¹⁾		712,000		733,000		41,000		--		--		1,486,000
Exclusivity fee		214,000		286,000		286,000		286,000		190,000		1,262,000
Other		10,000		13,000		13,000		13,000		140,000		189,000
Total	$	2,011,000	$	1,698,000	$	524,000	$	382,000	$	330,000	$	4,945,000

		ThermoGenesis Holdings, Inc. (Registrant)

Dated: May 19, 2022		/s/ Xiaochun (Chris) Xu, Ph.D.
		Xiaochun (Chris) Xu, Ph.D. Chief Executive Officer (Principal Executive Officer)


Dated: May 19, 2022		/s/ Jeffery Cauble
		Jeffery Cauble Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Accounts Receivable	March 31, 2022			December 31, 2021
Customer 1		35	%		--
Customer 2		16	%		--
Customer 3		1	%		23	%
Customer 4		9	%		23	%

	Three Months Ended March 31,
Revenues	2022				2021
Customer 1	$	1,271,000	48	%	$	151,000	10	%
Customer 2	$	2,000	--		$	316,000	21	%

	March 31, 2022		March 31, 2021
AXP	$	1,766,000	$	264,000
BioArchive		453,000		750,000
CAR-TXpress		313,000		354,000
Manual Disposables		105,000		129,000
Other		26,000		20,000
	$	2,663,000	$	1,517,000

Exhibit No.	Description
1.1	At the Market Offering Agreement, dated December 13, 2019 by and between ThermoGenesis Holding, Inc. and H.C. Wainwright & Co., LLC incorporated herein by reference to Exhibit 1.2 to the Registration Statement on Form S-3 (Registration No. 333-235509) filed on December 13, 2019.
1.2	Amendment No. 1 to At the Market Offering Agreement, dated May 19, 2020, between ThermoGenesis Holdings, Inc. and H.C. Wainwright & Co., LLC, incorporated herein by reference to Exhibit 1.1 to the Form 8-K filed on May 20, 2020.
1.3	Amendment No. 2 to At the Market Offering Agreement, dated February 3, 2022, by and between ThermoGenesis Holdings, Inc. and H.C. Wainwright & Co., LLC, incorporated herein by reference to Exhibit 1.3 to the Form 8-K filed on February 3, 2022.
3.1	Amended and Restated Certificate of Incorporation of ThermoGenesis Holdings, Inc. dated as of June 5, 2020, incorporated by reference to Exhibit 3.1 to Form 8-K filed June 6, 2020.
3.2	Amended and Restated Bylaws of ThermoGenesis Holdings, Inc., incorporated by reference to Exhibit 3.2 to Form 8-K filed with the SEC on October 30, 2019.
3.3	First Amendment to the Amended and Restated Bylaws of ThermoGenesis Holdings, Inc., incorporated by reference to Exhibit 3.1 to Form 8-K filed December 17, 2021.
4.1	Form of Common Stock Purchase Warrant, incorporated by reference to Exhibit 4.1 to Form 8-K filed with the SEC on March 28, 2018.
4.2	Form of Common Warrant, incorporated by reference to Exhibit 10.37 of amended Registration Statement on Form S-1 filed with the SEC on May 14, 2018.
4.3	Investors’ Rights Agreement, dated January 1, 2019, among CARTXpress Bio, Inc., Bay City Capital Fund V, L.P., and Bay City Capital Fund V Co-Investment Fund, L.P., incorporated by referenced to Exhibit 10.3 to Form 8-K filed with the SEC on January 4, 2019.
4.4	Form of Convertible Promissory Note, dated as of July 23, 2019, between ThermoGenesis Holdings, Inc. and Orbrex USA Co., incorporated by reference to Exhibit 4.1 to Form 8-K filed with the SEC on July 29, 2019.
4.5	Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934, as amended, incorporated by reference to Exhibit 4.8 to Form 10-K filed with the SEC on March 24, 2020.
10.1	Fourth Amendment to the Company’s Amended 2016 Equity Incentive Plan, Effective June 4, 2020, incorporated by reference to exhibit 10.1 to Form 8-K filed January 14, 2022.
10.2	Amended 2016 Equity Incentive Plan, incorporated by reference to exhibit 10.2 to Form 8-K filed January 14, 2022.
10.3	Amendment No.1 to Second Amended and Restated Convertible Promissory Note, Dated March 4, 2022, between ThermoGenesis Holdings, Inc. and Boyalife Asset Holding II, Inc.
10.4	Amendment No. 2 to First Amended and Restated Revolving Credit Agreement, dated March 4, 2022, between ThermoGenesis Holdings, Inc. and Boyalife Asset Holding II, Inc.
10.5	License and Technology Access Agreement, dated March 24, 2022, between ThermoGenesis Holdings, Inc. and Boyalife Genomics Tianjin Ltd.
10.6	Lease Agreement, dated March 24, 2022, between ThermoGenesis Holdings, Inc. and Z3 Investment LLC.
31.1	Certification by the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification by the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

SEC Form 10-Q filed by ThermoGenesis Holdings Inc.