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 Third Quarter of 2012

? Revenue of $1.7 million, our ninth sequential record revenue quarter.

? No funds were required from our investors in the quarter for the first time since the Company started operations.

? Executed a new private-label distribution agreement to supply HypoThermosol® and CryoStor® to a leading life sciences cell culture tools provider.

? Completed the build-out of our second Good Manufacturing Practice (cGMP) clean room suite.

Comparison of Results of Operations for the Three and Nine Month Periods Ended
September 30, 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
                                               September 30,
                                            2012             2011         % Change
Revenue:
Product revenue
Direct                                 $      446,350      $ 442,383             1%
Indirect                                      174,277        166,471             5%
Core product sales                            620,627        608,854             2%
Contract manufacturing product sales        1,055,853        101,664           939%
Total product sales                         1,676,480        710,518           136%
Licensing revenue                               5,000          5,000              -
Total revenue                               1,681,480        715,518           135%

Cost of sales                               1,086,031        345,556           214%
Gross profit                           $      595,449      $ 369,962            61%
Gross margin %                                  35.4%          51.7%

                                         Nine Month Period Ended
                                              September 30,
                                           2012            2011          % Change
Revenue:
Product revenue
Direct                                 $  1,681,772     $ 1,253,099            34%
Indirect                                    520,862         435,477            20%
Core product sales                        2,202,634       1,688,576            30%
Contract manufacturing product sales      1,397,136         245,589           469%
Total product sales                       3,599,770       1,934,165            86%
Licensing revenue                            15,000          15,000             --
Total revenue                             3,614,770       1,949,165            85%

Cost of sales                             2,073,909       1,003,071           107%
Gross profit                           $  1,540,861     $   946,094            63%
Gross margin %                                42.6%           48.5%

Product Sales. Our core products are sold through both direct and indirect channels. Sales to our direct customers in the three and nine months ended September 30, 2012 increased compared to the same periods in 2011 due primarily to higher sales to customers in the drug discovery, cell and tissue banking, including cord blood banks, hair transplantation and regenerative medicine market segments. Sales to distributors in the three and nine months ended September 30, 2012 increased compared to the same periods in 2011 due to increased sales to our existing distributor customers. Contract manufacturing revenue in 2012 primarily represents sales of product to one significant customer.

Cost of Sales. Cost of sales consists of raw materials, labor and overhead expenses. Cost of sales in the three and nine months ended September 30, 2012 increased compared to the same periods in 2011 due to the significant increase in sales of both core and contract manufacturing products. Gross margin as a percentage of revenue decreased in the third quarter of 2012 and the nine months ended September 30, 2012 compared to the same periods in 2011 due primarily to the increase in contract manufacturing product sales, which has a higher cost of sales, compared to core product sales. Additionally, gross margin declined due to additional personnel and other costs included in cost of goods sold related to the ramp up of our production operation.

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 and nine month periods ended September 30,
2012 and 2011 were:


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                               Three Month Period Ended          Nine Month Period Ended
                                     September 30,                    September 30,
                                 2012              2011            2012            2011

Research and development       $   110,689       $  98,903      $   353,837     $   391,086
% of revenue                            7%             14%              10%             20%
Sales and marketing            $   145,735       $  55,443      $   379,774     $   197,883
% of revenue                            9%              8%              11%             10%
General and administrative     $   487,733       $ 500,424      $ 1,441,852     $ 1,356,222
% of revenue                           29%             70%              40%             70%
Total operating expenses       $   744,157       $ 654,770      $ 2,175,463     $ 1,945,191
% of revenue                           44%             92%              60%            100%

Research and Development. Research and Development expenses consist primarily of salaries and other personnel-related expenses, consulting and other outside services, laboratory supplies, and other costs. We expense all research and development costs as incurred. Research and development expenses for the three months ended September 30, 2012 increased compared to the same period in 2011 due to increased personnel costs. Research and development expenses for the nine months ended September 30, 2012 decreased compared to the same periods in 2011 primarily due to reduced spending on legal fees associated with patents and lower spending on other consulting expenses, offset somewhat by increased personnel costs.

Sales and Marketing. Sales and marketing expenses consist primarily of salaries and other personnel-related expenses, consulting, trade shows and advertising. The increase in the three and nine month periods ending September 30, 2012 compared to same periods in 2011 was due to increased personnel costs which resulted from adding team members to this team, primarily in the second quarter of 2012.

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 decrease in general and administrative expenses in the third quarter of 2012 compared with the third quarter of 2011 related primarily to lower legal expenses, offset somewhat by an increase in personnel related expenses. General and administrative expenses were higher for the nine months ended September 30, 2012 compared to the same period in 2011 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)

Other Income. 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 for the three and nine months ended September 30, 2012, compared to the same periods in 2011 due to a higher debt balance related to additional borrowings on our Facilities of $475,000 in 2012 and draw downs on our Facilities in 2011 after September 30, 2011.

Amortization of Deferred Financing Costs. Amortization of deferred financing costs represents the cost of warrants issued to our investors providing the Facilities, which are being amortized over the life of the debt.

Outlook

We expect revenue of $5.0 million in 2012 based on the expectation of higher sales to our contract-manufacturing customers. The Company also expects steady increases in revenue from existing and new customers in the regenerative medicine market segment, as well as continued growth through the Company's distribution network.

We expect gross margin as a percentage of revenue to improve in the fourth quarter of 2012, however, to lower levels than the same period last year due to a higher mix of contract manufacturing revenue. Management expects operating expenses in the fourth quarter to remain at approximately the same level as the third quarter.

Finally, we believe the Company will achieve positive cash flow from operations in the fourth quarter of 2012.

Liquidity

At September 30, 2012, we had cash and cash equivalents of $7,529 compared to cash and cash equivalents of $16,864 at December 31, 2011. At September 30, 2012, we had working capital of $309,503, 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 $55 million at September 30, 2012. This raises substantial doubt about our ability to continue as a going concern.

Net Cash Provided by (Used in) Operating Activities

During the nine months ended September 30, 2012, net cash provided by operating activities was $686,128 compared to net cash used by operating activities of $797,122 for the nine months ended September 30, 2011. Cash provided by operating activities included an increase in deferred rent of $785,112 related to tenant improvements funded by our landlord.

Net Cash Used in Investing Activities

Net cash used in investing activities totaled $1,170,463 and $55,972 during the nine months ended September 30, 2012 and 2011, respectively. Cash used in investing activities was due primarily to the increase in tenant improvements related to our expanded manufacturing facility and the purchase of equipment.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was $475,000 and $870,000 during the nine months ended September 30, 2012 and 2011, respectively. Cash provided by financing activities resulted from funding from two existing shareholders under the existing Facilities.

Off-Balance Sheet Arrangements

As of September 30, 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 to approximately $35,000 effective January 1, 2013, with scheduled annual increases. The Company will continue to be required to pay an amount equal to the Company's proportionate share of certain taxes and operating expenses.

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 our investors were to become unwilling to provide access to additional funds under the existing 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