The statements contained in this Quarterly Report on Form 10-Q, including under the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations," include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, statements regarding the Company management's expectations, hopes, beliefs, intentions or strategies regarding the future. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "plan" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those that it has anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include those factors described in greater detail in the risk factors disclosed in our Form 10-K for the fiscal year ended December 31, 2011 filed with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those anticipated in these forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Overview

Management's discussion and analysis provides additional insight into the Company and is provided as a supplement to, and should be read in conjunction with, our annual report on Form 10-K for the fiscal year ended December 31, 2011 filed with the Securities and Exchange Commission.

Our proprietary HypoThermosol®, CryoStor®, and generic BloodStor® biopreservation media products are marketed to cell therapy companies, pharmaceutical companies, cord blood banks, hair transplant surgeons, and suppliers of cells to the toxicology testing and diagnostic markets. All of our products are serum-free and protein-free, fully defined, and are manufactured under current Good Manufacturing Practices using United States Pharmacopeia ("USP") or the highest available grade components.

Our products are formulated to reduce preservation-induced, delayed-onset cell damage and death. This platform enabling technology provides academic and clinical researchers significant extension in biologic source material shelf life and also improved post-preservation cell, tissue, and organ viability and function.

The discoveries made by our scientists and consultants relate to how cells, tissues, and organs respond to the stress of hypothermic storage, cryopreservation, and the thawing process, and enabled the formulation of truly innovative biopreservation media products that protect biologic material from preservation related cellular injury, much of which is not apparent immediately post-thaw. Our enabling technology provides significant improvement in post-preservation viability and function of biologic material. This yield improvement can reduce research, development, and commercialization costs of new cell and tissue based clinical therapies.

Critical Accounting Policies and Significant Judgments and Estimates

Management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles for interim financial reporting. The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and reported revenues and expenses during the reporting periods presented. On an ongoing basis, we evaluate estimates, including those related to share-based compensation and expense accruals. We base our estimates on historical experience and on other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions. Our critical accounting policies and estimates have not changed significantly from those policies and estimates disclosed under the heading "Critical Accounting Policies and Significant Judgments and Estimates" under Item 7 in our Form 10-K for the fiscal year ended December 31, 2011, filed with the Securities and Exchange Commission.

Results of Operations

Summary of Achievements for the First Quarter of 2012

· The Company recorded its seventh sequential record revenue quarter.

· Revenue from direct customers was up 15% over the fourth quarter of 2011 and 84% over the first quarter of 2011, with significant increases in revenue from drug discovery and regenerative medicine market segments.

· The Company recorded a record gross margin of 58.6% of revenue.

· The Company signed a lease amendment to increase the size of the corporate headquarters and manufacturing facility by approximately 100%.

Comparison of Results of Operations for the Three Month Periods Ended March 31, 2012 and 2011

Percentage comparisons have been omitted within the following table where they are not considered meaningful.

Revenue and Gross Margin

                           Three Month Period Ended
                                   March 31,
                             2012              2011         Change        % Change
Revenue:
Product revenue
Direct                   $     738,167       $ 401,929     $ 336,238            84%
Indirect                        92,713         127,184       (34,471 )         (27% )
Contract manufacturing              --          76,686       (76,686 )        (100% )
Total product sales            830,880         605,799       225,081            37%
Licensing revenue                5,000           5,000            --             --
Total revenue                  835,880         610,799       225,081            37%
Cost of sales                  346,129         368,600       (22,471 )          (6% )
Gross profit             $     489,751       $ 242,199     $ 247,552           102%
Gross margin %                   58.6%           39.7%

Product Sales and Cost of Sales. Our products are sold through both direct and indirect channels. Product sales in the first quarter of 2012 increased compared to the first quarter of 2011 primarily due to higher sales to our customers in the drug discovery and regenerative medicine market segments, which were both up significantly over 2011. Sales to our direct customers in the first quarter of 2012 increased 84% compared to the first quarter of 2011due primarily to higher selling prices to existing customers. Sales to distributors in the first quarter of 2012 decreased 27% compared to the first quarter of 2011.

Cost of product sales consists of raw materials, labor and overhead expenses. Cost of sales in the first quarter of 2012 decreased compared to 2011 and gross margin as a percentage of revenue increased in the first quarter of 2012 compared to 2011 which was due primarily to improved utilization of our manufacturing facility. This increased utilization resulted in lower overhead costs per unit manufactured being included in cost of sales.

Licensing Revenue. We have entered into license agreements with one customer that provides this customer with limited access to our intellectual property under certain conditions. This customer paid upfront fees for the specific rights and we recognize license revenue ratably over the term of the agreements.

Operating Expenses

Our operating expenses for the three month periods ended March 31, 2012 and 2011
were:

                               Three Month Period Ended
                                       March 31,
                                 2012              2011
Research and development       $   116,521       $ 158,793
% of revenue                           14%             26%
Sales and marketing            $    73,381       $  83,308
   % of revenue                         9%             14%
General and administrative     $   479,113       $ 454,375
% of revenue                           57%             74%

Research and Development. Research and Development expenses consist primarily of salaries and other personnel expenses, consulting and other outside services, laboratory supplies, and other costs. We expense all R&D costs as incurred. R&D expenses for the quarter ended March 31, 2012 decreased compared to the first quarter of 2011 primarily as a result of reduced spending on legal fees associated with patents and lower spending on other consulting expenses.

Sales and Marketing. Sales and marketing expenses consist primarily of salaries and other personnel-related expenses, consulting, trade shows and advertising. The decrease in the first quarter of 2012 compared to the first quarter of 2011 was due primarily to reduced spending on advertising and trade shows.

General and Administrative Expenses. General and administrative expenses consist primarily of salaries and other personnel-related expenses, non-cash stock-based compensation for administrative personnel and non-employee members of the board of directors, professional fees, such as accounting and legal, corporate insurance and facilities costs. The 5% increase in general and administrative expenses in the first quarter of 2012 compared to the first quarter of 2011 was due to higher personnel costs in 2012, offset somewhat by a reduction in consulting expenses due to the termination of one consulting agreement in the third quarter of 2011.

Other Income (Expenses)

Interest and Other Income. Interest and other income includes other revenue of $87,215 related to inventory received in a non-monetary transaction during the first quarter of 2012.

Interest Expense. Interest expense increased to $178,777 for the three months ended March 31, 2012 compared to $160,542 for the same period in 2011. The increase is due to a higher debt balance related to additional borrowings of $175,000 in the first quarter of 2012 and other draws in 2011 after March 31, 2011.

Amortization of Deferred Financing Costs. Amortization of deferred financing costs represents the cost of warrants issued in the fourth quarter of 2010 and the third quarter of 2011 which are being amortized over the life of the debt.

Outlook

We expect revenue to continue to increase to approximately $4.1 million in 2012. We expect sales to our contract manufacturing customers to increase significantly with the commencement of deliveries to the previously announced new customer.. We also expect steady increases in revenue shipments to existing and new direct customers, specifically in the regenerative medicine market segment, as our customers continue to move their cell and tissue based therapies and products through the clinical trial and regulatory approval processes.

We expect slightly lower gross margin as a percentage of revenue in 2012 as a result of increased contract manufacturing, in addition to increased operating expenses associated with selling and product development activity.

Finally, we believe the Company will achieve positive cash flow from operations in 2012 and that cash generated from customer collections will provide sufficient funds to operate our business.

Liquidity

At March 31, 2012, we had cash and cash equivalents of $70,524 compared to cash and cash equivalents of $16,864 at December 31, 2011. At March 31, 2012, we had working capital of $686,793, compared to working capital of $581,159 at December 31, 2011. We have been unable to generate sufficient income from operations in order to meet our operating needs and have an accumulated deficit of approximately $54 million at March 31, 2012. This raises substantial doubt about our ability to continue as a going concern.

Net Cash Used in Operating Activities

During the quarter ended March 31, 2012, net cash used in operating activities was $74,823 compared to net cash used by operating activities of $304,639 for the quarter ended March 31, 2011. Cash used in operating activities relates primarily to funding net losses and changes in operating assets and liabilities, offset by non-cash compensation related to stock options and depreciation.

Net Cash Used in Investing Activities

Net cash used in investing activities totaled $46,517 and $13,475 during the quarters ended March 31, 2012 and 2011, respectively. Cash used in investing activities was due to purchase of property and equipment, offset slightly by cash received from the sale of certain assets.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was $175,000 and $350,000 during the quarters ended March 31, 2012 and 2011, respectively. Cash provided by financing activities resulted from funding from two shareholders, Thomas Girschweiler, a director and stockholder of the Company, and Walter Villiger, an affiliate of the Company (the "Investors").

Off-Balance Sheet Arrangements

As of March 31, 2012, we did not have any off-balance sheet financing arrangements.

Contractual Obligations

In March of 2012, we signed an amended lease agreement which expanded the premises leased by the Company from the Landlord to approximately 21,000 rentable square feet. The term of the lease was extended for nine (9) years commencing on July 1, 2012 and expiring on June 30, 2021. The amendment includes two (2) options to extend the term of the lease, each option is for an additional period of five (5) years, with the first extension term commencing, if at all, on July 1, 2021, and the second extension term commencing, if at all, immediately following the expiration of the first extension term. In accordance with the amended lease agreement, the Company's monthly base rent will increase, as of July 1, 2012, to approximately $35,000. The Company will be required to pay an amount equal to the Company's proportionate share of certain taxes and operating expenses.

We did not have any off-balance sheet arrangements as defined in S-K
303(a)(4)(ii).

Going Concern

If we are unable to continue as a going concern, we may be unable to realize our assets and discharge our liabilities in the normal course of business. Factors that would negatively impact our ability to finance our operations include (a) significant reductions in revenue from our internal projections, (b) increased capital expenditures, (c) significant increases in cost of goods and operating expenses, or; (d) an adverse outcome resulting from current litigation. If we are unable to collect adequate cash from customer collections and the Investors were to become unwilling to provide access to additional funds through the amended Facilities, we would need to find immediate additional sources of capital. There can be no assurance that such capital would be available, or, if available, that the terms of such financing would not be dilutive to stockholders. If we are unable to secure additional capital as circumstances require, we may not be able to continue our operations.