Note 10 – Subsequent Events

On May 29, 2018, the Company entered into a definitive Asset Purchase Agreement (the “Purchase Agreement”) with Cord:Use Cord Blood Bank, Inc., a Florida corporation (“Cord:Use”), pursuant to which it was agreed, subject to the closing conditions contained therein, to purchase substantially all of Cord:Use’s assets, including without limitation Cord:Use’s inventory of public cord blood units existing as of the closing date (the “Public Cord Blood Inventory”) and Cord:Use’s shares of common stock of Tianhe Stem Cell Biotechnologies, Inc., an Illinois corporation (the “Tianhe Capital Stock”). Cord:Use is in the business of public and private cord blood and tissue, collection, processing, storage and banking. The aggregate consideration payable on June 11, 2018 (“Closing Date”) under the Purchase Agreement was $14,000,000, with $10,500,000 paid in cash and the balanced paid through the delivery to Cord:Use of 465,426 shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), at $7.52 per share. In addition, the Company assumed certain limited liabilities incurred by Cord:Use in connection with its business that remain unpaid as of the closing date and that directly relate to the services to be provided after closing by the Company. The Company also assumed certain of Cord:Use’s contracts and the obligations arising therefrom after the closing. Additionally, Cord:Use is entitled to an earnout from the Company’s sale of the Public Cord Blood Inventory from and after closing in excess of certain thresholds, payable in cash and/or additional shares of Common Stock, on the terms set forth in the Purchase Agreement, and, in certain circumstances further described in the Purchase Agreement, Cord:Use also is entitled to a portion of the gross profits generated, or deemed to have been generated, by the Company from its ownership of the Tianhe Capital Stock.

As a result of the acquisition of Cord:Use, beginning in the third quarter of 2018, our consolidated results of operations will include the results of the Cord:Use. We have not completed a detailed valuation analysis necessary to determine the final fair market values of the acquired net assets of Cord:Use, and any related income tax effects and the initial accounting for the business combination is incomplete at this time. We expect to finalize the acquisition accounting related to the transaction during the third quarter of 2018. We will furnish pro forma financial information pursuant to FASB and SEC guidelines when it becomes available.

As of June 11, 2018, subsequent to the balance sheet date, the Company entered into an Second Amendment to Credit Agreement (the “Second Amendment”) with Texas Capital Bank, National Association, which amended Cryo-Cell’s Credit Agreement dated as of May 20, 2016 (see Note 4) to provide for, among other things, an increase in the current outstanding principal amount of the loan from Texas Capital Bank by $9,000,000 to finance a portion of the purchase price of the Cord:Use Purchase. In connection therewith, Cryo-Cell executed and delivered to Texas Capital Bank a Second Amended and Restated Promissory Note, in the principal amount of $15,499,999.81, dated as of June 11, 2018 (the “Restated Note”) at a rate of 3.35% per annum plus LIBOR, payable monthly with a maturity date of June 2023.