AMERICAN CRYOSTEM CORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS (form 10-Q)

Forward-looking Statements

We and our representatives may from time to time make written or oral statements
that are "forward-looking," including statements contained in this quarterly
report and other filings with the Securities and Exchange Commission (the
"SEC"), reports to our stockholders and news releases. All statements that
express expectations, estimates, forecasts or projections are forward-looking
statements. In addition, other written or oral statements which constitute
forward-looking statements may be made by us or on our behalf. Words such as
"expect,""anticipate,""intend,""plan,""believe,""seek,""estimate,""project,""forecast,""may,""should,"
variations of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions which are difficult
to predict. Therefore, actual outcomes and results may differ materially from
what is expressed or forecasted in or suggested by such forward-looking
statements. We undertake no obligation to update or revise any of the
forward-looking statements after the date of this quarterly report to conform
forward-looking statements to actual results. Important factors on which such
statements are based on assumptions concerning uncertainties, including but not
limited to, uncertainties associated with the following:

· Inadequate capital and barriers to raising the additional capital or to

      obtaining the financing needed to implement our business plans;

   ·  Our failure to earn revenues or profits;

   ·  Inadequate capital to continue business;

   ·  Volatility or decline of our stock price;

   ·  Potential fluctuation in quarterly results;

   ·  Rapid and significant changes in markets;

· Litigation with or legal claims and allegations by outside parties; and

· Insufficient revenues to cover operating costs.

The following discussion should be read in conjunction with the financial
statements and the notes thereto which are included in this quarterly report.
This discussion contains forward-looking statements that involve risks,
uncertainties, and assumptions. Our actual results may differ substantially from
those anticipated in any forward-looking statements included in this discussion
as a result of various factors.

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Background



We were incorporated in the state of Nevada on March 13, 2009. On April 20,
2011, we acquired, through our wholly owned subsidiary American CryoStem
Acquisition Corporation, substantially all the assets from, and assumed
substantially all of the liabilities of, ACS Global, Inc. ("ACS") in exchange
for our issuance of 21,000,000 shares of our common stock, par value $0.001 per
share, to ACS (the "Asset Purchase"). We filed a Current Report on Form 8-K with
the Securities and Exchange Commission (SEC) on April 27, 2011, disclosing the
Asset Purchase and certain related matters including, but not limited to, the
appointment of our present officers and directors as well as the resignation by
the former chief executive officer and sole director. Our fiscal year ends
September 30 of each calendar year. Upon the closing of the Asset Purchase: (i)
ACS Global became our majority shareholder, (ii) John Arnone was appointed as
our chief executive officer and president Anthony Dudzinski was appointed as our
chief operating officer, treasurer and secretary, and (iii) John Arnone and
Anthony Dudzinski were appointed to our board of directors, with Mr. Arnone
being appointed as Chairman of the Board. Mr. Dudzinski is also a director,
president and treasurer of ACS Global and Mr. Arnone is a director and secretary
of ACS Global.



Overview



American CryoStem Corporation; (CRYO) founded in 2008, is a biotechnology
pioneer, having developed standardized adipose tissue derived technologies
(Adult Stem Cells) for the fields of regenerative and personalized medicine.
These standardized technologies which include granted patents, are the basis for
our chemistry, manufacturing, and controls (cGMP Manufacturing) of our ATCell™
autologous cellular therapy product for use in clinical investigations for
Biologic License Applications with the US Food and Drug Administration (FDA).
Our laboratory stem cell products are characterized adult human Mesenchymal Stem
Cell (MSC's) derived from adipose tissue that work in conjunction with our
patented (non-animal) medium lines and knowhow.



The Company filed its first Investigational New Drug Application (IND) with the
FDA for our ATCell™ cellular therapy product. The IND filing is titled "ATCell™
Expanded Autologous Adipose Derived Mesenchymal Stem Cells deployed via
Intravenous Infusion for the Treatment of Post-Concussion Syndrome (PCS) in
Retired Athletes and Military Personnel" File number 19089 was approved by the
FDA on September 17, 2020 to commence the Phase 1 Clinical Trial.
Post-concussion syndrome is a chronic, incurable central nervous system
condition affecting a significant number of the United States military and
athletes, especially those involved in contact sports such as football, boxing,
soccer, and other sports where participants have suffered one or more
concussions or mild traumatic brain injuries (mTBI). Published research has
indicated that up to 30% of all military personal, active and retired, may
suffer from this condition. According to the Department of Defense evaluation of
U.S. military casualty statistics, from 2000-2019 Q3, 413,858 United States
Military personnel worldwide experienced a concussion.



The Company built and validated a new cGMP clean room processing and
manufacturing area at our facility in Monmouth Junction NJ, implemented and
validated cGMP Standard Operating Procedures (SOPs) and installed a new Quality
Management System to support its IND filings and an increased focus on patent
and product development and support additional clinical activities.



The Company has built a domestic and international patent portfolio consisting
of 32 patents. Our 4 primary operating patents regarding the "collection -
processing - cryopreservation and return to point-of-care" of adipose derived
stem cells, have been granted.

The Company is expanding its efforts to attract and cultivate collaborative partners to accelerate its product development efforts, harnessing its manufacturing platform and tissue processing platforms. The R&D collaborations are to discover, develop, and commercialize cellular therapies, laboratory products and combinations thereof with synergistic technologies to create regenerative medicine applications and develop new intellectual property.

Adipose Tissue



The Company's manufacturing platform technologies, cell transportation products,
cell culture mediums and cell therapies are focused on the acquisition and
processing of adipose tissue as the primary raw material. Many of our developed
technologies have been successfully applied to other raw materials such as bone
marrow, umbilical, and placenta tissue. Adipose tissue, also known as fat tissue
or fatty tissue, is a connective tissue that is mainly composed of fat cells
called adipocytes. Adipocytes are energy storing cells that contain large
globules of fat known as lipid droplets surrounded by a structural network of
fibers. tissue and other stromal tissues. The Company is focused on adipose
tissue because it contains higher densities of mesenchymal stems cells (often
500 to 1000 times more) per gram of raw material when compared to other sources
(bone marrow, umbilical cord tissue, etc). The higher cellular density of
adipose tissue supports the ability to create regenerative cellular products
more efficiently and with less expansion (lower passages and population
doublings), which is preferred when producing cellular therapy products.

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Adipose tissue is one of the top human stem cell sources considering its
accessibility, abundance, and least painful collection procedure when compared
to other sources such as bone marrow. The adipose derived mesenchymal stem cells
(ADSCs) that adipose tissue contains can be maintained and expanded in culture
for long periods of time without losing their differentiation capacity, leading
to large cell quantities being increasingly used in cell therapy purposes. Many
published and peer reviewed reports show that ADSC-based cell therapy products
demonstrated optimal efficacy and efficiency in various clinical indications for
both autologous and allogeneic purposes, hence they are increasingly being
considered as potential tools for replacing, repairing, and regenerating dead or
damaged cells.



Adipose tissue is a specialized type of connective tissue that arises from the
differentiation of mesenchymal stem cells into adipocytes during fetal
development. Mesenchymal stem cells are multipotent cells that can transform
into various cell types, including fat cells, bone cells, cartilage cells, and
muscle cells among others. Adipose tissue can be found in many places throughout
the body. Adipose tissue is the most abundant type of fat in humans. It is
distributed within subcutaneous fat, visceral fat, and bone marrow fat.
Subcutaneous fat is found throughout the whole body, in the spaces between the
skin and underlying muscles. Visceral fat is predominantly found around the
organs in the abdominal cavity, such as the liver, intestines, and kidneys, as
well as in the peritoneum (a serous membrane that lines the outside of the
abdominal organs). Adipose tissue is also present in bone marrow (a sponge-like
tissue in the central cavity of bones). In addition, adipose tissue can be found
in the pericardium surrounding the heart, or cushioning other parts of the body,
like the soles of the feet, eyeballs, and certain blood vessels.



The main function of adipocytes is to store excess energy in the form of fatty
molecules, mainly triglycerides. Fat storage is regulated by several hormones,
including insulin, glucagon, catecholamines (adrenaline and noradrenaline), and
cortisol. Depending on the body's immediate energy requirements, these hormones
can either stimulate adipose tissue formation and storage (i.e. lipogenesis) or
initiate the release of fat from adipose tissue (i.e. lipolysis). Under the
influence of insulin, for instance, adipocytes can increase the uptake of blood
glucose and transform it into fatty molecules, thereby increasing fat storage.



In addition to being an energy storing reservoir, adipose tissue performs
important endocrine and metabolic roles by secreting several biologically active
factors known as adipokines. These molecules contribute to a variety of
different functions, including regulation of energy balance, food intake and
satiety, inflammatory response, and metabolism of steroid hormones. Finally,
adipose tissue also helps cushion and protect parts of the body, as well as
insulate the body from extreme temperatures.



In addition to adipocytes, adipose tissue contains the stromal vascular fraction
(SVF) comprised of cells including preadipocytes, fibroblasts, vascular
endothelial cells, and a variety of immune cells such as adipose tissue
macrophages. Far from being hormonally inert, adipose tissue has, in recent
years, been recognized as a major endocrine organ, as it produces hormones such
as leptin, estrogen, resisting, and cytokines (especially TNF?). Adipose tissue
contains some of the highest concentrations of adult stem cells, progenitor
cells and immune cells.



Processing Technology



The FDA considers processing and expanding cells as the manufacturing of a drug
product. The Company's completed proprietary, patented processing and
manufacturing platform is designed for the collection, preparation and
cryo-preservation of pure adipose tissue and adipose tissue derived cells. The
processing platform has been validated to enable the Company to deliver cellular
therapy samples with repeatable and identifiable characteristics of safety,
potency, viability, and purity which are the core FDA requirements for the cGMP
manufacturing of all biologic drug products. Our manufacturing platform is
approved by FDA for use in our current clinical study of Post-Concussion
Syndrome for the manufacturing of the cellular therapy samples. The Company
believes that the platform is suitable to support the Company's growing pipeline
of product development and planned clinical studies, and future biologic license
applications for an array of target diseases and conditions.



The Company believes the reproducibility of scientific studies is a substantial
issue in cellular therapy research, from drug discovery and development through
clinical trials as researchers throughout the world continue to use different
protocols for processes associated with cell sample preparation,
cryopreservation, and cold chain management. We believe our validated
manufacturing processes for our ATCell™ product solves this issue. The samples
we produce with our patented platform and proprietary products have proven
purity, consistent viabilities above 80 percent, and cell identification panels
across six biomarkers and proven sterility. Our standardizing of handling,
storage, and transportation protocols substantially improve the quality and
reproducibility of adipose tissue derived stem cells. Our patented adipose
tissue collection, processing, storage and retrieval protocols are designed to
permit us to accelerate the time line of creating and processing cellular
therapy products - from lab research to regulatory submission and FDA approval.

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Each individual process has the potential to create multiple autologous products
and to generate multiple revenue streams including customer fees for storage of
biomaterials. Our processing platform and methodology allow the opportunity for
continuing revenue streams from each tissue sample received and processed
including, cellular therapy treatments, pure tissue storage for secondary
procedures, processing, and handling fees and CRYO storage and release fees.



We are leveraging our patented platform and developing our product portfolio to
create a global footprint of licensed laboratory affiliates, physician'
networks, patients, research organizations, and licensees who purchase tissue
collection, processing and storage services or consumables from our Company.



Products and Services



Therapy Product Development



During the Company's initial stage of developing its manufacturing protocol and
products chose adipose tissue as its source material following review and
experiments that included other biomaterials and cell sources such as bone
marrow and peripheral blood samples. The selection of adipose tissue is based
upon numerous factors including high cell density and its wide array of other
cell types including precursor and immune cells that may be derived and
developed as future products. Although the Company is currently focused on the
development of cellular therapy products utilizing adipose derived mesenchymal
cells, the platform is designed to be easily extendable to permit the
acquisition and expansion of additional cellular derivatives from other
biomaterials.



A significant amount of research, case studies and anecdotal evidence has been
published over the past several decades concerning the study of cellular
therapies for a wide range of diseases and maladies from ALS and Parkinson's to
wound healing and immunological support. The Company, recognizing that each new
application for therapy approval requires a standalone clinical study, has
refined its development strategy to initially encompass mild traumatic brain
injury and immunosuppression as core targets for its development strategy. We
focus our efforts on expanding our product pipelines based upon our intellectual
property portfolio, collaborative development relationships, target market size,
medical need, disease classification, and international licensing and partnering
opportunities.



The completion, submission and approval of our validated manufacturing platform
is the culmination of the Company's manufacturing development efforts.
Validation of the manufacturing platform for the current FDA approved study has
provided the Company with the opportunity to expand its efforts and resources on
the further development of its downstream intellectual property. The objective
is to provide deliverable commercial cell therapy products to address patient
populations with large unmet medical needs such as brain injuries and conditions
that include immunologic complications. The Company's continuing efforts in the
development of additional products includes an increased focus on the
recruitment of collaborative partners and the extension of our existing
manufacturing capabilities to development of other adipose tissue derivative and
cellular/biomaterial combination products. Leveraging our repeatable processing
platform provides the Company with contributable technology and capabilities to
rapidly develop clinical studies, accumulate complementary scientific data and
attract strong collaborative and developmental partners.



The Company has recently completed the development of an additional study
focused SARS-CoV-2, also know as Long Covid. The NIH defines Long Covid symptoms
as fatigue, shortness of breath, "brain fog", sleep disorders, fevers,
gastrointestinal symptoms, anxiety, and depression, can persist for months and
can range from mild to incapacitating. The US Congress recently received $1.15b
in funding for NIH to support research into the prolonged health consequences of
SARS-CoV-2 (Long Covid) infection over the next 4 years. Approximately 20% to
30% of all people that have recovered from acute SARS-CoV-2 infection are
currently estimated to have developed Long Covid in the week and months
following their recovery from a SARS-CoV-2 infection.



Our development efforts have led to the development of a new study to be
initially filed with the US FDA as a "first in human" study of ATCell in Long
Covid titled: "A Pilot Study on Research Treatment OF Long Covid Post-Acute
Sequelae of SARS CoV-2 Infection ("PASC") Using ATCell™" is scheduled to be
conducted at the Walter Reed National Military Medical Center (WRNMMC) in
Bethesda, Maryland upon final approval from the FDA.



Our activities include supporting collaborations by providing our products and
services (ACSelerate™ and ATCELL™) with the goal and expectation that our
products and services become the basis for new cell based Regenerative Medicine
and cellular therapy applications.



Part of this strategic approach to therapy product development is to design,
develop and launch new products and services that rely on our core processing
technology and leverage existing products and services. Examples of this
approach are the use of the CELLECT® collection kit/ box and materials to
collect fresh tissue for cellular therapy sample processing, use of our patented
non-animal growth medium for cell culture and use of our storage medium for
cryo-storage. Management is currently pursing collaborative product development
agreements with healthcare institutions, universities, and other biotech
companies.

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2022 Therapy Pipeline



The Company has developed and refined its pipeline around its flagship cellular
product, ATCell™, for clinical therapeutic use. The initiation of this pipeline
strategy occurred with the filing, approval and commencement of its
Post-Concussion Syndrome Phase 1 clinical study. During this review process, the
US FDA fully reviewed the Company's manufacturing platform contained in the
Chemistry, Manufacturing and Control section of the Investigational New Drug
(IND) submission. The Company's filing included unpublished research of ATCell™
use in an animal model as well as a report covering its safety results from a
pilot study that included the treatment of more than 80 patients that received
one or more treatments with the ATCell™ product that resulted in no reported
adverse events.

1. The Company filed its first Investigational New Drug Application (IND) with

the US Food and Drug Administration (FDA) for the ATCELL cellular therapy

product. The IND filing is titled "ATCell™ Expanded Autologous Adipose Derived

Mesenchymal Stem Cells deployed via Intravenous Infusion for the Treatment of

Post-Concussion Syndrome (PCS) in Retired Athletes and Military Personnel",

File number 19089, which was approved by the FDA on September 17, 2020. The

Company intends to invite additional developers of cellular therapies to

initiate additional arms of the clinical study focused on the use of ATCELL™

for use in systemic inflammatory response relief for patient suffering from

systemic diseases. A number of these additional study targets have been

identified and ongoing discussions support the Company's belief that clinical

investigations can be developed and rapidly added upon completion of the new

    treatment protocol and outcome assessment methodologies.

2. DMD - The Company has completed the protocol for the treatment of Duchene

Muscular Dystrophy and is in final discussions with its Collaborative partner,

to select the principal investigator (PI) and clinical trial site selection.

3. Long COVID - The Company has completed the protocol for treatment of Long

COVID and its FDA filings. We have completed, along with a government partner

the clinical protocol for a new Investigational New Drug (IND) application

that was filed on July 7, 2022, and we were approved to proceed with the study

on August 5, 2022 According to the Centers for Disease Control and Prevention,

"post-COVID conditions can be considered a lack of return to a usual state of

health following acute COVID-19 illness." In the US, following COVID recovery,

it is reported that up to 30% of those afflicted, diagnosed, or treated for

COVID-19 have continuing symptoms and medical complications following recovery

    from the acute illness.

4. Wound Healing - the creation of topical applications and ingredients used by

physicians in the wound care and cosmetic industries as well as therapeutic

cellular applications and bio-materials development. An initial pilot study

involving a minimum of 10 participants for the assessment of its autologous

tissue products for the wound healing market is underway. The Company is

combining its tissue products, which do not require FDA approval, with current

standard-of-care methods to accelerate and improve the healing of diabetic and

    non-diabetic wounds and ulcers.

5. ATGRAFT™ - products include adipose tissue and cell sample processing and

storage as a form of personal "bio-insurance", and adipose tissue (fat)

storage for cosmetic fat engraftment procedures. High demand for pure and

natural aesthetics in fast growing cosmetic industry with non-FDA required

    plastic, cosmetic, and reconstructive surgical "fat filler".

6. Osteoarthritis - The Company completed its study protocol for ATCell for

osteoarthritis and has completed the filing with the Cayman Island Ministry of

Health. This new study is currently pending approval. The study is designed

for 100 participants as a "patient pay model", an acceptable model in the

Cayman Islands. Upon approval the study will be marketed to patients in the

Caribbean and the US and will generate revenue to the Company for each

patient's processing and delivery of their treatment samples to the clinic n

Grand Cayman.




About ATCELL™



The Company has established and trademarked ATCELL™ as the brand name for its
line of adipose derived stem cell products. ATCELL™ is a purified sample of
adipose tissue derived from adipose tissue through our manufacturing processes
that can be incubated and grown (cultured) to large quantities in cGMP
conditions.



ATCELL™ Adipose Derived Mesenchymal Cells Processed and characterized adipose
derived cells created using the Company's proprietary, validated and patented
Standard Operating Procedures (SOPs) of its manufacturing platform and the
Company's ACSelerate™ patented cell culture media. Cell lines may also be custom
created for patients desiring to store their cells for their own future use in
Regenerative Medicine procedures, shipped "On Demand". Customer samples are
collected by the physician in a mini liposuction procedure and delivered to the
Company's facility utilizing the CELLECT®collection system and ACSelerate™
transport medium to conform to our validated quality control standards. The
Company charges its customers a fee to process newly collected client tissue
samples into cellular samples.

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ATCELL's repeatable sample manufacturing process is designed to comply with the
requirements of FDA to produce highly consistent and validated cellular products
necessary to achieve regulatory approval. The validation of our manufacturing
process and quality control results are of great value in biomanufacturing and
serve as the basis for approval and commercial product development.



The Company's ATCELL™cell lines are cultured in our patented ACSelerate™ cell
culture media. All processed samples: tissue, cells, and research materials are
made available for clinical study therapies, tissue transfer or sale to research
institutions. All samples are tested for sterility, disease, lifespan, and
population doubling rate (PDL). Cell morphology is confirmed by (i) flow
cytometry (6 markers) and (ii) tri-lineage differentiation analysis has been
confirmed using ACSelerate™differentiation medias. Each ATCELL™ line can be
further processed and differentiated allowing the Company to provide genetically
matched cell types. We believe this research methodology may provide
opportunities for the Company's ATCELL™ and ACSelerate™ products to become the
building blocks of additional commercial application development.



The Company believes it can earn additional fees based upon storage and
retrieval fees and for future product creation. Cell culturing and
differentiation may be performed upon receipt of the raw tissue sample or at any
time on a previously processed and cryopreserved tissue or master cell sample.
ATCELL™ has shown that it is ideally suited for differentiation into additional
cell types (bone, cartilage, etc.) utilizing our patented ACSelerate™ line of
differentiation mediums.



The ATCELL™ processing, products and services are incorporated into multiple
granted patents including the granted claim of: "Systems and Methods for the
Digestion of Adipose Tissue Samples Obtained from a Client for Cryopreservation"
US 10,154,664 issued December 18, 2018, and "Business Method for Collection,
Processing, Cryogenic Storage and Distribution of a Biologic Sample Material" US
Patent Number 10,014,079, issued July 3, 2018. The ACSelerate™ Medium products
are incorporated into our granted patents "Cell Culture Media, Kits and Methods
of Use"; US Patent No. 7,989,205 issued August 2, 2011, with additional claims
granted in US Patent No. 9,487,755 granted November 8, 2016.

Tissue Processing and Storage Services:

ATGRAFT is an adipose tissue (fat) collection, processing and storage solution
used by cosmetic and plastic surgeons to provide their patients with multiple
tissue transfer and storage options. The ATGRAFT™ service, through one
liposuction procedure, allows individuals to prepare for multiple future
cosmetic or regenerative procedures by using their own stored adipose tissue as
natural biocompatible filler, or for multiple cellular therapy applications over
time without the trauma of further liposuctions. Many physicians currently
offering tissue transfer or "stem cell (SVF)" therapies are required to perform
a concurrent tissue harvest for each transfer or procedure which increases the
opportunities for infection at the harvest site and the development of long-term
complications related to the formation of scar tissue (stroma) at the harvest
site(s).



ATGRAFT™ supported procedures include breast reconstruction, layered
augmentations, buttocks enhancement, volume corrections of the hands, feet,
face, and neck areas that experience significant adipose tissue (fat) volume
reduction as we age. ATGRAFT™ is processed and stored utilizing our cGMP
standards so that any stored fat tissue sample may in the future be further
processed to create, "ATCELL™", for use in Regenerative Medicine applications.
The ATGRAFT™ service is included in our granted patent "Business Method for
Collection, Processing, Cryogenic Storage and Distribution of a Biologic Sample
Material" US Patent Number 10,014,079, issued July 3, 2018.



The Company's charges processing fees for ATGRAFT™ tissue processing and minimum
annual storage fees based on the volume of tissue processed. These processing
and storage fees may be paid by the collecting/treating physician or the
consumer. The Company earns additional fees upon sample retrieval, for the
thawing, packaging, and shipment of the stored samples to the physician or
clinical "point-of-care" for immediate use upon receipt. Additionally,
physicians may request that any stored ATGRAFT™ tissue sample of 25ml or greater
be reprocessed utilizing the Company's ATCELL™ and Autokine-CM™ processing to
create topical therapy or cosmetic products, on-demand.

Laboratory Products; Culture Medium, and Manufacturing Services

CELLECT® Collection, Transportation, and Storage System - An unbreakable "chain
of custody" solution to collect and deliver tissue samples utilizing proprietary
and patent pending methods and materials. The CELLECT® service is the required
platform for the collection and transportation of live adipose tissue samples to
American CryoStem Corporation's processing facility. Tissue collected and
transported in our CELLECT kits is monitored through the transportation process
to assures the highest viability upon laboratory receipt. The CELLECT® system
incorporates our ACSelerate-TR™ transport medium to support the health of the
tissue during transport. The ability to support the health of the collected
tissue using our proprietary material and services greatly enhances our highly
consistent and repeatable manufacturing and processing protocol. The
CELLECT®service is included in our granted patent "Business Method for
Collection, Processing, Cryogenic Storage and Distribution of a Biologic Sample
Material" US Patent Number 10,014,079, issued July 3, 2018.

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American CryoStem is the first tissue bank to globally incorporate through its
CELLECT® service the International Blood Banking identification, labeling and
product identification coding system. This labeling system is an acceptable
machine-readable labeling standard, product description, and bar-coding system
for FDA Center for Biologics Evaluation and Research under 21 CFR 606.12(c)13.
American CryoStem conforms to this standard in its laboratory facility and all
cellular and tissue products produced at the facility carry our W3750 ICCBBA
facility identifier allowing any hospital, clinic, laboratory, and regulator
worldwide to identify the origin and obtain additional information on any sample
produced at an American CryoStem laboratory facility. The Company requires use
of this standard in all laboratories that license or utilize our technology.



ACSelerate™Cell Culture Media Products - Manufactured patented cell culture
media products for growing human stromal cells (including all cells found in
human skin, fat and other connective tissue). Certain of the Company's
ACSelerate™ cell culture media lines are available in animal serum free, which
may be suitable for human and therapeutic uses, or in a low serum version for
application development and research purposes. The patented ACSelerate™ cell
culture media line(s) were specifically developed to address increasing industry
demand for fetal bovine serum-free cell culture products. The use of fetal
bovine serum (FBS) and other animal products in cellular therapy application
development and manufacture raises concerns and generates debates within the
scientific and regulatory community relating to potential human/animal
cross-contamination. These same concerns may lead to additional expensive and
expansive testing and documentation requirements with the FDA during the
application and approval process for new cellular therapies manufactured with or
containing animal or animal derived products. FDA concerns are evidenced in
their Guidance's and Guidelines regarding cellular therapy involving human
cells, tissues and products (HCT/Ps) published and maintained by the FDA.
Management believes that eliminating or greatly reducing FBS in cellular
manufacturing, applications and products can eliminate or ease these scientific
and regulatory concerns and may prove to be a winning strategy for cellular
therapy application developers seeking FDA approval.



The Company entered into a licensing and manufacturing agreement with PeproTech
(April 4, 2016) a life sciences company formed in 1988. PeproTech is the trusted
source for the development and manufacturing of high quality cytokine products
for the life-science and cell therapy markets. PeproTech has grown into a global
enterprise with state-of-the-art manufacturing facilities in the US, and offices
around the world. With over 2,000 products PeproTech has developed and refined
innovative protocols to ensure quality, reliability and consistency. The
licensed medium is marketed under both PeproTech's PeproGrow and the Company's
ACSelerate MAX brands.



On August 2, 2011, the Company was issued US patent number 7,989,205 for "Cell
Culture Media, Kits and Methods of Use." The granted claims include media
variations for cellular differentiation of ADSCs into osteoblasts (bone),
chondrocytes (cartilage), adipocytes (fat), neural cells, and smooth muscles
cells in both HSA medium grade and FBS (research) grade. This patent covers both
non-GMP research grades and cGMP grades suitable for cell culture of
adipose-derived stem cells. Additionally, on November 8, 2016, the Company was
granted additional claims from the continuation U.S. Serial No. 13/194,900
issued as a new Patent Serial No. 9,487,755. Prior to the issuance the Company
filed a continuation in part (CIP) containing additional claims related to our
ongoing media development.



The Company supports its marketing efforts by making ATCELL™ samples available
for research purposes and for internal product development through our
collaborative and partnering programs. We believe these cell lines may be
suitable for use by private researchers and universities for use in pre-clinical
trial studies and in-vitro research. We also believe that the Company's ability
to provide these materials for these research and development collaborators,
partners and other third parties extend the Company's ability to become a
primary source of clinical grade materials and services necessary to support
approved applications and treatments.

The Company has created several versions of its ACSelerate™ cell culture media including:

· ACSelerate-MAX™ -xeno serum free cell culture media,

· ACSelerate-SFM™ - animal serum free cell culture media,

· ACSelerate-LSM™ - low FBS (0.05%) cell culture media,

· ACSelerate-CY™- for differentiation of ATCELL™into chondrocytes (ATCELL-CY™),

· ACSelerate-OB™- for differentiation of ATCELL™into osteoblasts (ATCELL-OB™)

· ACSelerate-AD™ - for differentiation of ATCELL™into adipocytes (ATCELL-AD™)

· ACSelerate-MY™- for differentiation of ATCELL™ into myocytes (ATCELL-MY™)

· ACSelerate-CP™- non-DMSO (Dimethyl Sulfoxide) cellular cryopreservation media

· ACSelerate-TR™- sterile transportation medium designed to maintain the

viability of the tissue during the shipment of adipose tissue to our processing

   facility.


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The Company continues to optimize additional versions of ACSelerate™ media that
may be necessary for use in future applications. On December 31, 2014, the
Company filed a patent application for an advanced medium formulation titled
Human Albumin Serum for Cell Culture Medium for Growth of Human Adipose Stromal
Cells. (US Serial No. 62/098799) representing the initial results of this
ongoing optimization program. On December 31, 2015, the Company converted the
provisional patent application to an international PCT filing (PCT/US/68350)
under the title Human Serum for Cell Culture for Growth of Human Adipose Stromal
Cells. To date the patent has also been filed in the following additional
countries: China and Hong Kong, India, Mexico, Brazil, the European Union, US,
Japan, Thailand, Brazil, Russia, Australia, New Zealand, Canada, and Saudi
Arabia.



Contract Manufacturing, Autokine-CM® Anti-Aging, Autologous Skin Care Product
Line- Under agreement with Personal Cell Sciences Corp. (PCS), we manufacture
the key ingredient Autokine-CM® (autologous adipose derived stem cell
conditioned medium) for PCS' U-Autologous™ anti-aging topical formulation. Every
product is genetically unique to the patient and custom blended, deriving its
key ingredients from the individual client's own adipose derived stem cells. The
Company provides its CELLECT® Tissue Collection service to collect the required
tissue to manufacture the U-Autologous™ product and processes it under the same
Standard Operating Procedures (SOP's) that it developed for the ATGRAFT™and
ATCELL™ processing services utilizing ACSelerate™ cell culture media. The
Company receives collection, processing and storage fees and earns a royalty on
all U-Autologous product sales. The utilization of the Company's core services
in its contract manufacturing relationships provides opportunities for the
Company to promote ATGRAFT™ and ATCELL™ products.



CRYO's contract manufacturing services can be extended to develop custom and/or
white label products and services for both local and global cosmetic and
regenerative medicine companies, physicians, wellness clinics and medical spas.
The Company intends to expand its relationships and contract manufacturing
regionally through its physician networks and globally through its International
Licensing Program.

International Licensing Program -COVID RISK FACTOR

The development of our products could be disrupted and materially adversely
affected in the future by a pandemic, epidemic or outbreak of an infectious
disease like the recent outbreak of COVID-19. For example, as a result of
measures imposed by the governments in regions affected by COVID-19 businesses
have been suspended due to quarantines or "stay at home" orders intended to
contain this outbreak. Furthermore, many patients had concerns about making
hospital and physician office visits for fear of contracting the virus. These
factors may have direct adverse impact on our ability to enroll participants in
our clinical trial programs. In addition, travel restrictions, stay-in-place
orders and other measures including information control. specifically in Asian
countries, such as China, imposed by governmental agencies and health
organizations to prevent the spread of COVID-19 and protect the citizenry, have
had an adverse impact on the flow of information, goods and services between
nations. The supply disruptions have resulted in shortages of goods and
materials. This could also impact our ability to produce the products we need to
conduct our clinical trials. In addition, these measures have resulted in delays
to the regulatory process, which may also have an adverse impact on our
business. We are still assessing our business plans and the impact COVID-19 may
have on our ability to advance the development of our drug candidates or to
raise financing to support the development of our drug candidates, we cannot
assure you that we will be able to avoid part or all of any impact from the
spread of COVID-19 or its consequences, including downturns in business
sentiment generally or in our sector in particular.



The Company is aware many jurisdictions outside the US currently permit cellular
therapies and regenerative medicine applications. The Company has targeted these
jurisdictions for licensing its technologies to local operators and facilities
and receives numerous unsolicited international inquiries concerning the sale or
licensing of our SOPs, culture medium products and tissue banking services for
use in the Regenerative Medicine and Medical Tourism Markets. The Company
believes that the inquiries to date are a result of the global boom in Medical
Tourism, Regenerative and Personalized Medicine and the slow pace of approval of
cellular therapies and regenerative medicine applications in the US. To address
the Company's sales, marketing and branding opportunities globally, the Company
has included in its international licensing program metrics to vet potential
partners and collaborators and their facilities. To date we have licensed our
technologies in Hong Kong, China, and Thailand.



The Company believes it can take advantage of the significant growth of the
global cellular therapy market through its international licensing and marketing
efforts. A recently published study by Transparency Market Research predicts the
global market for stem cells is expected to register a healthy CAGR of 13.8%
during the period from 2017 to 2025 to become worth US$270.5 bn by 2025.

(https://www.transparencymarketresearch.com/pressrelease/stem-cells-market.htm)

25





China

On July 12, 2018 the Company announced the national launch of its
ATGRAFTTM tissue collection, processing and storage technology by Baoxin Asia
Pacific Biotechnology (Shenzhen) Co. Ltd. ("Baoxin") in China. The Company's
management team traveled throughout southeast China with the management and
marketing team of Baoxin to present the ATGRAFTTM platform to leading plastic
and cosmetic surgery hospitals in Shenzhen, Nanning, Guangzhou, Guangxi and
Changsha. Additionally, Mr. Arnone and Mr. Dudzinski attended the signing of
investment documents between Baoxin and Chinese government and Banking officials
in Shenzhen, China as well as the official launch presentation and evening gala
hosted by Baoxin in Shenzhen.

The China launch activities were in support of the Company's licensing and
supply agreement with Baoxin, under which Baoxin agreed to pay the Company a
minimum annual guarantee against a fixed fee per process and purchase certain
necessary consumables from CRYO required for the collection, processing and
storage of the collected adipose tissue. Under the terms of the Agreements
signed in Fiscal 2018, the Company invested in and currently holds five percent
(5%) of Baoxin shares. Additionally, Mr. Arnone and Mr. Dudzinski were elected
to serve as Directors of Baoxin during their visit to Shenzhen, China. Mr.
Arnone resigned as a board Member of Baoxin in 2019. Mr. Dudzinski continues to
serve the Company's interests as a board member of Baoxin.

During Fiscal 2020 and 2021, due to the continuing effects of the COVID pandemic
and associated government policies and regulations Baoxin suspended its
processing activities. Baoxin is an emerging biotechnology company in China that
has relied to date on investment to fund operations and build their facilities,
as is typical for these types of companies. During 2020 and 2021, Baoxin
developed a new state of the art facility with sizable clean rooms and
biomaterial storage space. The facility was completed in February 2021 and
officially opened in May of 2021. Unfortunately, due to the continued effects of
COVID and the appearance of new variants Baoxin has been unable to restart
operations and its marketing programs in 2022.

Hong Kong

On June 30, 2014 the Company granted Health Information Technology Company, LTD
("HIT") exclusive rights to utilize the Company's Standard Operating Procedures
(SOP's) to market the Company's ATGRAFT™ tissue storage service for Hong Kong.
The Agreement calls for upfront fees, royalties and the purchase by HIT of
certain consumables manufactured by the Company. The Company and HIT reached
further agreement to extend their relationship on a nonexclusive basis to
include HIT's cord blood laboratory located in Shenzhen, Guangdong Province, one
of China's most successful Special Economic Zones. The HIT agreement includes
initial upfront fees and royalty payments for predetermined gross revenue
volumes. HIT will also purchase CRYO ACSelerate™ storage media, CELLECT™
collection and transportation kits as well as other American CryoStem products
necessary for clinical adipose tissue processing and storage at the Shenzhen
facility. The final master licensing agreement is for a period of 5 years with
renewal options and was executed between the parties on September 24, 2014. The
HIT license has been extended per the terms of Schedule B of the Term Sheet,
dated June 30, 2014, for an additional 3-year period to June 30, 2023.

In 2017 as part of the Company's transaction with Baoxin, HIT and the Company
agreed to transfer certain product and distribution rights granted to HIT under
its 2014 agreement to Baoxin. The Company was paid of fee of US$100,000 in the
transaction and was provided with an initial ownership position in a planned
Regenerative Treatment Center to be established by HIT in Hong Kong.

The current pandemic, changes in Chinese regulations and policies regarding Hong
Kong, recent political unrest and the inability of Chinese citizens to cross the
border between Hong Kong and China have significantly curtailed the ability of
HIT to implement its business plans to utilize the Company's technology and
purchase the associated consumables.

Thailand

On April 5, 2018 the Company announced further expansion of its global
laboratory and cellular technology footprint by entering into an agreement to
license its ATGRAFT™ and ATCELL™ adipose tissue (fat) processing and storage
technologies with CRYOVIVA (Thailand) Ltd., a Bangkok, Thailand based Cord Blood
processing and storage facility. CRYOVIVA, Thailand, currently offers
collection, processing, and storage of Cord Blood derived biologics to patients
throughout Thailand and Southeast Asia.

American CryoStem licensed to CRYOVIVA (Thailand) Ltd., established in 2007, the
rights to utilize the Company's Standard Operating Procedures (SOP's) to create
and market the Company's ATGRAFT™ tissue storage service and ATCELL™ adipose
derived stem cell processing and storage services in Thailand. The financial
terms generally, call for the payment of certain training fees and, a percentage
of the gross revenue subject to annual minimum payments generated from our
products. Additionally, the Agreement calls for the purchase of CRYO consumable
products required for ATGRAFT™ and ATCELL™ sample processing including CRYO's
ACSelerate™ non-DMSO cryogenic tissue storage media, transportation media,
Cellect™ tissue collection kit, and ACSelerate - Max™ cell culture medium.

The current COVID pandemic has delayed CRYOVIVA's scheduled launch of its
marketing campaign several times and unfortunately, CRYOVIVA suspended their
tissue banking operations in 2020 and 2021. We are currently in discussions with
them concerning the restart of their operations and initiation of their
marketing program for calendar 2022 although there is no certainty that the
effects of the pandemic will ease sufficiently to do so in the near term.

26





Japan



In June 2015, The Company entered into a licensing agreement with CellSource,
LTD. ("CellSource") located in Shibuya, Tokyo Japan for the licensing of our
AGRAFT™ tissue processing and storage technology and the purchase of our
CELLECT® collection products which include our ACSelerate-TR™ transport medium.
The non-exclusive agreement expired in June of 2020.

Collaborations / Partnering Opportunities / Acquisitions

The Company recognizes the benefits of collaborations with industry and
university partners and has increased its efforts to attract and develop these
relationships. Strategically, the Company believes that with a current approved
IND application with the US FDA and the strength of its granted and pending
patent portfolio, that it can attract new partners and collaborative
arrangements These relationships are generally covered by Confidential
Non-Disclosure Agreements and include Material Transfer Agreements (MTA) under
which the Company may supply ATCELL™ and/or ACSelerate™ medium products for
evaluation, testing, and the development of new cellular therapy applications.
The Company has entered into Non-Disclosure and Material Transfer Agreements
with a number of potential collaborators. No assurance can be given that these
efforts or relationships will ultimately result in new technology for future
commercialization.



The Company has developed a strategy to expand the opportunities to
commercialize its products by increasing its ability to identify and pursue
collaborative and partnering opportunities by cultivating and engaging new
relationships with biotechnology companies engaged in similar or complimentary
development activities. Included in this strategy is the increased recruitment
of consultants and other biotechnology experts to identify potential
collaborators, partners and acquisition candidates. The Company's goal is to
develop additional standardized cellular processing models to support FDA IND
treatment protocol approvals. This may be accomplished by further identifying,
and validating certain mechanisms and characteristics of mesenchymal stem cells
related to regulating modulation of immune response(s) and promoting tissue
regeneration and stability (homeostasis) for the treatment of traumatic
injuries, inflammation, auto-immune diseases, and brain and organ damage
associated with viruses such as SARS-CoV-2 (COVID-19), including, the expanding
group of patients dealing with the chronic and debilitating symptoms of what is
commonly termed "Long Haul COVID" or "Long COVID." To date the Company has
completed agreements with the following entities for development of new products
and cellular therapy targets although the successful commercialization of new
products and therapies resulting from these activities cannot be assured or
predicted at this time.

WRNMMC

On December 3, 2020, the Company entered into a Cooperative Research and
Development Agreement (CRADA) with Walter Reed National Military Medical Center
(WRNMMC), the nation's largest and most renowned joint military medical center
serving the Army, Navy, Air Force and Marines located in Bethesda, Maryland.

A Cooperative Research and Development Agreement (CRADA) is a written agreement
between a government agency and a non-federal entity that allows the federal
government and its non-federal partners to optimize and maximize use of their
resources, exchange technical expertise in a protected fashion, share
intellectual property resulting from collaborative effort, and speed
commercialization of federally developed technology. The Company has committed
to provide materials including ATCell samples and Umbilical Cord stem cells,
ACSelerate Max Growth and differentiation mediums testing and other processing
supplies, processing and testing methods. The Company maintains the rights to
commercialize all technology developed under this CRADA Agreement. The
technology is centered on creating in vitro (test tube) assays to standardize
and commercialize new treatment protocols; optimizing quality control measures;
and developing standardized protocol potency assays for precise therapy dosing.
Management believes that these new assays can be commercialized to generate
substantial sales and licensing revenues and create value for the Company's
stakeholders.



Through the Collaboration entitled "Stem Cells for Regeneration and Medical
Innovation, a multi-faceted and multi-staged research project with WRNMMC
Biomedical Laboratories, the Company plans to develop, validate and standardize
baseline and assay metrics to identify mesenchymal stem cell (MSC)
characteristics and quantities across various cell biomarkers and exosome
expressions data sets for its ATCell™ product for biologics developers' use
worldwide. The focus of the Collaboration is to enable the creation of
predictive and prescriptive cellular models which will further enhance American
CryoStem's mission as a premier biologics' manufacturer and developer and be
highly valuable to the medical community, biotech developers, and the public at
large.

WRNMMC is part of The Military Health System (MHS) which is the enterprise within the United States Department of Defense that provides health care to active duty, Reserve component and retired U.S. Military personnel and their dependents.

27





The missions of the MHS are complex and interrelated: To ensure America's 1.4
million active duty and 331,000 reserve-component personnel are healthy so they
can complete their national security missions.

· To ensure that all active and reserve medical personnel in uniform are trained

and ready to provide medical care in support of operational forces around the

world.

· To provide a medical benefit commensurate with the service and sacrifice of

more than 9.5 million active-duty personnel, military retirees, and their

   families.

The MHS also provides health care, through the TRICARE health plan, to:

· Active-duty service members and their families,

· Retired service members and their families,

· Reserve component members and their families,

· Surviving family members,

· Medal of Honor recipients and their families

· Some former spouses, and

· Others identified as eligible in the Defense Enrollment Eligibility Reporting

   System




The MHS has a $50+ billion budget and serves approximately 9.5 million
beneficiaries. The MHS employs more than 144,217 in 51 hospitals, 424 clinics,
248 dental clinics and 251 veterinary facilities across the nation and around
the world, as well as in contingency and combat-theater operations worldwide.

Muscular Dystrophy

In March 2020, the Company entered into a collaborative agreement with RACEMD, a
501c(3) charitable organization focused on the improvement of treatments and
therapies for patient with Duchenne Muscular Dystrophy. Duchenne muscular
dystrophy (DMD) is a severe type of muscular dystrophy that primarily affects
boys. Muscle weakness usually begins around the age of four and worsens quickly.
Muscle loss typically occurs first in the thighs and pelvis followed by the
arms. Most affected individuals are unable to walk by the age of 12. Some may
have intellectual disability. DMD affects about one in 3,500 to 6,000 males at
birth. It is the most common type of muscular dystrophy. The life expectancy is
26; however, with excellent care, some may live into their 30s or 40s. The
disease is much rarer in girls, occurring approximately once in 50,000,000 live
female births.

The terms of the Agreement call for the Company to work with RACEMD to develop
clinical therapies and studies focused on mitigating the effect of the disease,
improve muscle strength and quality of life in the short term and to build upon
successes to seek a more curative cellular therapy solution to extend life
expectancy over the long term. The Company is in the final stages of completing
its plans with RACEMD to submit an initial safety study for use of ATCell as the
treatment protocol and expects to make its initial filing to FDA in early 2022.
RACEMD has committed to funding the initial studies and to assist the Company in
creating non-dilutive funding opportunities for larger advanced studies in the
future.

PeproTech, Inc.

On April 4, 2016 the Company entered into an Agreement with PeproTech, Inc of
Rocky Hill, NJ. Under the Agreement PeproTech manufactures, markets and
distributes the Company's ACSelerate - Max cell growth medium. The Company and
PeproTech completed the optimization and scale up manufacturing studies and the
licensed medium is marketed under both PeproTech's, PeproGrow and the Company's
ACSelerate MAX brands. PeproTech plans to leverage its current global sales
relationships which reach a majority of all research laboratories worldwide to
maximize distribution of the optimized media while the Company will concentrate
its sales efforts on its collaborative and international licensing partners.
Additionally, the Company and PeproTech are discussing the licensing of
additional American CryoStem patented media and products for production and
distribution by PeproTech, any additional media licensed to PeproTech will
undergo similar optimization and scale up production testing prior to being
released for sale. The Company is in ongoing discussion with PeproTech related
to increasing the visibility and sales of the medium and the optimization of
additional medium products focused on the differentiation of adult stem cells
that are synergistic to the cell culture medium. On January 5th, 2022, Thermo
Fisher Scientific completed its acquisition of PeproTech for $1.85 billion.

Intellectual Property

From the Company's formation, our strategy has been to invest time and capital
in intellectual property protection. This strategy is intended to strengthen our
Company's foundation in any defensive or offensive legal challenge. In addition,
we are developing our IP portfolio to ensure and enhance our business
flexibility and allow us to gain favorable terms in potential future
collaborative partnerships with third parties. Our intellectual property
portfolio currently includes four issued U.S. patents (No. 7,989,205, and Serial
No. 9,487,755, Cell Culture Media Kits and Methods of Use, "Systems and Methods
for the Digestion of Adipose Tissue Samples Obtained from a Client for
Cryopreservation" US 10,154,664 issued December 18, 2018, and "Business Method
for Collection, Processing, Cryogenic Storage and Distribution of a Biologic
Sample Material" US Patent Number 10,014,079, issued July 3, 2018); and has
additional pending patent applications which are detailed in the following
chart:

28





             Title                     Technology          Patent / Application
                                                                  Number
Cell culture media, Kits, and   ACS cell culture media   US Patent No. 7,989,205
Methods of Use                  line                     Issued August 2, 2011
                                Covers 12 types of
                                Medium
Cell culture media, Kits, and   ACS cell culture media   US Patent No. 9,487,755
Methods of Use                  line                     Issued November 8, 2016
                                Additional claim Granted Continuation of US
                                for all 12 medium types  Patent No. 7,989,205
Cell culture media, Kits, and   ACS cell culture media   US Patent Application
Methods of Use                  line                     No. 15/344,805
                                Continuation of Granted  Continuation of US
                                Patent covering          Patent No. 7,989,205
                                additional improvements
Human serum for cell culture    A cell culture medium    PCT/US15/68350
medium for growth of human      for growth of human      30 month National Phase
adipose stromal cells           adipose stromal cells    entry date of June 31,
                                for human and            2017, additional
                                therapeutic applications International Filings
                                                         for China, India, the
                                                         European Union, Saudi
                                                         Arabia, Israel, Brazil,
                                                         Mexico, Australia and
                                                         New Zealand.
A Business Method for           Company Core Tissue      US Serial No 13/194,900
Collection, Cryogenic Storage   Collection Processing    Filed June 6, 2010
and Distribution of a           and Storage Methodology  Patent Application
Biological Sample Material      Covers CELLECT Kit,      Published
                                Transport and            December 5, 2013 Claims
                                Cryopreservation Medium  Granted US Patent No.
                                for ATGRAFT and ATCELL   10,014,079. Continuation
                                Products                 filed upon issuance.
A Business Method for           Company Core Tissue      Developed Improvement
Collection, Cryogenic Storage   Collection Processing    established; Divisional,
and Distribution of a           and Storage Methodology  Continuation-In-Part
Biological Sample Material      Continuation covering    claiming priority to US
                                Improvements             Serial No. 13/194,900
                                                         imminent (PCT
                                                         Application filing
                                                         planned)

Systems and Methods for the Adipose Tissue Digestion U.S. Serial No. Digestion of Adipose Tissue Laboratory Processing 13/646,647 filed October Samples Obtained From a Client Methods

                  6, 2011, Claims Granted
For Cryopreservation                                     US Patent No.10,154,664.
                                                         Continuation filed upon
                                                         issuance.
Systems and Methods for the     Adipose Tissue Digestion Developed Improvement
Digestion of Adipose Tissue     Laboratory Processing    established; Divisional,
Samples Obtained From a Client  Methods                  Continuation-In-Part
For Cryopreservation                                     claiming priority to US
                                                         Serial No. 13/646,900
                                                         imminent (PCT
                                                         Application filing
                                                         planned)
Compositions and Methods for    Company Adipose Tissue   U.S. Serial No.
collecting, Washing,            Storage Platform for     14/406,203 National
Cryoprocessing, Recovering and  Cosmetic Procedures      Phase entry date of
Return of Lipoaspirate to       Covers the core          December 5, 2014 based
Physicians for Autologous       processing adipose       on PCT/US2013/044621
Adipose Transfer Procedures"    tissue for ATGRAFT
                                adipose tissue dermal    European Union
                                filler product           Application No.
                                                         EPI3800847.9
                                                         China Application No.
                                                         2013800391988
Compositions and Methods for    Company Adipose Tissue   Developed Improvement
"Collecting, Washing,           Storage Platform for     established; Divisional,
Cryoprocessing, Recovering and  Cosmetic Procedures      Continuation-In-Part
Return of Lipoaspirate to       Covers additional claims claiming priority to US
Physicians for Autologous       related to ATGRAFT       Serial No. 14/406,203
Adipose Transfer Procedures"    process not included in  imminent (PCT
                                original application     Application filing
                                                         planned)
Systems and methods to isolate  Isolation of stem cells  US Serial Nos.
and expand stem cells from      from urine of patients   62/335,426 and
urine                           for use in research and  62/439,106
                                therapeutics



29

Additionally, the Company has in-licensed the following IP:

         Patent Title                Use of Patent               Application #
Cosmetic compositions including Protein Genomics and     USPTO #5,726,040
tropoelastin isomorphs          American CryoStem
(wound healing)                 (Autogenesis)
                                collaboration
Cosmetic compositions           Protein Genomics and     USPTO #6,451,326
(wound healing)                 American CryoStem
                                (Autogenesis)
                                collaboration
Recombinant hair treatment      Protein Genomics and     USPTO #6,572,845
compositions                    American CryoStem
(wound healing)                 (Autogenesis)
                                collaboration

Wound healing compositions and Protein Genomics and USPTO: #6,808,707 methods using tropoelastin and American CryoStem lysyl oxidase

                   (Autogenesis)
(wound healing)                 collaboration
Business methods, processes and Personal Cell Sciences   USPTO application #61/588,841
systems for collection,         and American CryoStem
cryogenic storage and           collaboration
distribution of cosmetic
formulations from an obtained
stem cell based a biological




Trademarks

In addition to patents, the Company has registered the following trademarks with
the U.S. Patent and Trademark Office: American CryoStem®, CELLECT® and ATGRAFT™.
We plan to obtain additional registered trademarks for our future products,
slogans and themes to be used in our marketing initiatives, including, for
example, ACSelerate-SFM™, ACSelerate- LSM™ and ATCELL™. The Company has also
secured a number of online domain names relevant to its business, including
www.americancryostem.com and www.acslaboratories.com.

Market Size and Opportunities

By leveraging our proprietary Adipose Tissue Processing Platform, the Company is
working to address multiple high growth, multi-billion dollar market
opportunities prevailing within the Regenerative Medicine, Cosmeceuticals,
Medical Tourism and Cell Therapy markets. The Company regularly reviews
independent market research to gauge the market size of its intended domestic
and international markets and to identify additional areas within these markets
where the Company's laboratory products, cell culture medium, and tissue and
cellular processing services can be marketed, sold and/or licensed.

30





Global Stem Cells Market



A report from Transparency Market Research (TMR) forecasts that the global stem
cells market is expected to register a healthy CAGR of 13.8% during the period
from 2017 to 2025 to become worth US$270.5 bn by 2025. Depending upon geography,
the key segments of the global stem cells market are North America, Latin
America, Europe, Asia Pacific, and the Middle East and Africa. At present, North
America dominates the market because of the substantial investments in the
field, impressive economic growth, rising instances of target chronic diseases,
and technological progress. As per the TMR report, the market in North America
will likely retain its dominant share in the near future to become worth
US$167.33 bn by 2025.



A report published by Markets and Markets Research in 2017 titled "Cell
Expansion Market by Product (Reagent, Media, Flow Cytometer, Centrifuge,
Bioreactor), Cell Type (Human, Animal), Application (Regenerative Medicine &
Stem Cell Research, Cancer), End user (Research Institute, Cell Bank) - Global
Forecasts to 2021". The report states: "The global cell expansion market is
expected to reach USD $18.76 Billion by 2021 from USD $8.34 Billion in 2016 at a
CAGR of 17.6%. Geographically, the cell expansion market is dominated by North
America, followed by Europe, Asia, and the Rest of the World (RoW). Growth in
the North American segment is primarily driven by increasing incidence of
chronic diseases in the North American countries. According to the American
Medical Association and the American Medical Group Association, more than 50% of
Americans suffered from one or more chronic diseases in 2012; the number of
Americans suffering from chronic diseases was around 133 million in 2005 and
this figure is expected to reach around 157 million by 2020. With this
significant growth in the number of patients suffering from chronic diseases,
the market for cell expansion is expected to grow in this region in the coming
years.

Regenerative Medicine Market

The Global Translational Regenerative Medicine market is expected to grow
significantly over the forecast period. The Global Translational Regenerative
Medicine market was valued at $5.8bn in 2016. Vision gain forecasts this market
to increase to $14.5bn in 2021. The market is estimated to grow at a CAGR of
19.9% in the first half of the forecast period and 17.7% from 2016 to 2027.



Cell Culture Market



Cell Culture Market Global Forecast to 2023, according to "marketsandmarkets"
the cell culture market is expected to reach USD $26.28 Billion by 2023 from USD
$15.32 Billion in 2018, at a CAGR of 11.4%. Growth in this market is driven by
the growing number of regulatory approvals for cell culture-based vaccines,
increasing demand for monoclonal antibodies (mAbs), funding for cell-based
research, growing preference for single-use technologies, and the launch of
advanced cell culture products.



Marketing and Distribution



The key objective of our marketing strategy is to position American CryoStem in
the market as the "Gold Standard" for adipose tissue collection, cell processing
and cryogenic storage, research/commercial uses, and therapeutic applications of
adipose tissue within the current regulatory framework. The combination of a
traditional sales approach supported by continuous internal and external
marketing program(s) is closely coordinated with the expansion of our laboratory
processing capabilities. Our initial marketing efforts intend to disseminate
current and future uses of adipose tissue and adult stem cells which support our
business model, products and services. We intend to employ both print
advertising and social media sales campaigns. In addition, we plan to utilize
key leaders, and early adopters in the medical community as a marketing resource
to enhance awareness of our proprietary, patented products and services and to
increase the number of surgeons who join our network, university and private
collaboration and consumers who use our products and services.



We plan to continue direct marketing programs focused on reaching regenerative
medicine physicians and plastic and cosmetic surgeons to join our network of
providers that offer our services to their patients. This marketing initiative
has been implemented using a traditional sales approach common to the
pharmaceutical and biotechnology industries. This fundamental sales approach at
the core of our marketing activities is being strategically and tactically
expanded using a combination of in-house sales personnel and outside independent
channels.



Our plan, capital permitting, provides for a comprehensive integrated marketing
approach using various traditional and new media, such as the Internet, social
media/blogging, video, print, TV, radio and trade shows to reach targeted
potential consumers and promote awareness of our Company and our branded
products and services. The essence of this targeted strategy is to reach the
end-users as quickly as possible and to accelerate the adoption curve of our
products and services. We also plan to utilize outside marketing resources and
trade groups to increase the number of surgeons willing to offer our products
and services to their patients.

31

Development of Regional U.S. Markets

Physician Network

Physician Network - The Company continues to develop regional relationships to
leverage its new products and services through existing cosmetic surgery and
regenerative medicine practices. The Company continues to develop and expand its
network of physicians seeking to adopt its products and services, initially
focusing on surgeons performing liposuction, tissue transfer and regenerative
procedures involving the use of adipose tissue. The Company intends to continue
expanding its efforts to medical professionals interested in tissue storage and
Regenerative Medicine applications utilizing ASDCs and establish itself as a
primary source of collection, processing, and preparation of cellular therapies
as they are developed and approved for patient use by the FDA.

Development of International Markets

International Licensing Program - Globally, many jurisdictions outside the US
permit the use of adipose tissue based cellular therapies and regenerative
medicine applications. The Company has received numerous inquiries concerning
the sale or licensing of our products and services in these jurisdictions. The
Company believes that the inquiries to date are a result of the global boom in
Medical Tourism and the slow pace of approval of cellular therapies and
regenerative medicine applications in the US. To address these inquiries and to
expand the Company's sales, marketing and branding opportunities the Company has
designed and is offering an International Licensing Program.

The program is designed to permit the licensing of the Company's products and
services to organizations that meet the Company's financial and technical
criteria. The licensing program allows for a variety of business relationship
including franchising, partnering and joint venturing. Marketing efforts to date
have been to clinics, physicians, and hospitals in foreign jurisdictions capable
of rapidly building or committing the appropriate facilities and personnel to
create the required laboratory facilities to operate the CELLECT®, ATGRAFT™ and
ATCELL™ services in their local market. Strategically, the Company's
international licensees will maintain the branding of the Company's services
along the lines of the "Intel Inside" branding program.

Qualified Licensees can quickly take advantage of the rapidly expanding
opportunity to collect, process, store, and culture individual regenerative cell
samples for their clients with the comfort and confidence that they are
providing services that have been developed to conform to US FDA standards. Core
to the relationship is the developed proprietary and patent pending processing
and laboratory operational methodologies contained in our Standard Operating
Procedures, Training, and Continuous Quality Management, Testing Program, and
Laboratory Operations manuals.

Licensing programs may be initiated through a letter of intent (LOI) agreement
between the Company and the prospective licensee. This LOI agreement is designed
for due diligence and facility qualifications purposes. The Company receives an
initial fee under the agreement which may or may not be credited toward future
royalty payments. Following evaluation of the prospective licensee the Company
will enter into a final Agreement which outlines all upfront fees, minimum
royalties, and consumable purchase obligations of the Licensee.

Significant to our international development activities is the global expansion
of the American CryoStem branded services and patented products, as well as the
expansion of the Company's services, technology, and products as the core
platform to implement cellular therapies and regenerative medicine.

Baoxin Asia Pacific Biotechnology (Shenzhen) Co. Ltd. On July 12, 2018, the
Company announced the national launch of CRYO's ATGRAFTTM tissue collection,
processing and storage technology by Baoxin Asia Pacific Biotechnology
(Shenzhen) Co. Ltd. ("Baoxin") in China. The management team traveled throughout
southeast China with the management and marketing team of Baoxin to present the
ATGRAFTTM platform to leading plastic and cosmetic surgery hospitals in
Shenzhen, Nanning, Guangzhou, Guangxi and Changsha. The China launch activities
are in support of the Company's previously announced licensing and supply
agreement with Baoxin, under which Baoxin will pay the Company a minimum annual
guarantee against a fixed fee per process and purchase certain necessary
consumables from CRYO required for the collection, processing and storage of the
collected adipose tissue. Under the terms of the Agreements signed in Fiscal
2018, the Company invested in and currently holds five percent (5%) of Baoxin
shares. Additionally, Mr. Arnone and Mr. Dudzinski were elected to serve as
Directors of Baoxin during their visit to Shenzhen, China. During 2019 Mr.
Arnone resigned from the board of Baoxin.

32





During Fiscal 2020 and 2021, due to the continuing effects of the COVID pandemic
and associated government policies and regulations Baoxin suspended its
processing activities. Baoxin is an emerging biotechnology company in China that
has relied to date on investment to fund operation and build their facilities,
as is typical for these types of companies. During 2020 and 2021, Baoxin
developed a new state of the art facility with sizable clean rooms and
biomaterial storage space. The facility was completed in February 2021 and
officially opened in May of 2021. Unfortunately, due to the continued effects of
COVID and the appearance of new variants Baoxin has been unable to restart
operations and its marketing programs.

See Note 3 , Note 13 and Note 14 for additional information.

Health Information Technology Company, LTD (Hong Kong) - On June 30, 2014, the
Company granted Health Information Technology Company, LTD ("HIT") exclusive
rights to utilize the Company's Standard Operating Procedures (SOP's) to market
the Company's ATGRAFT™ tissue storage service for Hong Kong. The Agreement calls
for upfront fees, royalties and the purchase by HIT of certain consumables
manufactured by the Company. The Company and HIT have reached further agreement
to extend their relationship on a non-exclusive basis to include HIT's cord
blood laboratory located in Shenzhen, Guangdong Province, one of China's most
successful Special Economic Zones. The HIT agreement includes initial upfront
fees and royalty payments for predetermined gross revenue volumes. HIT will also
purchase CRYO ACSelerate™ storage media, CELLECT™ collection and transportation
kits as well as other American CryoStem products necessary for clinical adipose
tissue processing and storage at the Shenzhen facility. The final master
licensing agreement is for a period of 5 years with renewal options and was
executed between the parties on September 24, 2014. The HIT license has been
extended per the terms of Schedule B of the Term Sheet, dated June 30, 2014, for
an additional 3 year period to June 30, 2023.

In 2017 as part of the Company's transaction with Baoxin, HIT and the Company
agreed to transfer certain product and distribution rights granted to HIT under
its 2014 agreement to Baoxin. The Company was paid a fee in the transaction and
was provided with an initial ownership position in a planned Regenerative
Treatment Center to be established by HIT in Hong Kong.

The current pandemic, changes in Chinese regulations and policies regarding Hong
Kong, recent political unrest, and the inability of Chinese citizens to cross
the border between Hong Kong and China have significantly curtailed the ability
of HIT to implement its business plans to utilize the Company's technology and
purchase the associated consumables.



CRYOVIVA (Thailand), Ltd. - On April 5, 2018 the Company announced further
expansion of its global laboratory and cellular technology footprint by entering
into an agreement to license its ATGRAFT™ and ATCELL adipose tissue (fat)
processing and storage technologies with Cryoviva (Thailand) Ltd., a Bangkok,
Thailand based Cord Blood processing and storage facility. Cryoviva, Thailand,
currently offers collection, processing and storage of Cord Blood derived
biologics to patients throughout Thailand and Southeast Asia.

American CryoStem has licensed to Cryoviva (Thailand) Ltd., established in 2007,
the rights to utilize the Company's Standard Operating Procedures (SOP's) to
create and market the Company's ATGRAFT™ tissue storage service and ATCELL™
adipose derived stem cell processing and storage services in Thailand. The
financial terms generally, call for the payment of certain training fees and, a
percentage of the gross revenue subject to annual minimum payments generated
from our products. Additionally, the Agreement calls for the purchase of CRYO
consumable products required for ATGRAFT and ATCELL sample processing including
CRYO's ACSelerate™ non-DMSO cryogenic tissue storage media, transportation
media, Cellect™ tissue collection kit, and ACSelerate - Max™ cell culture
medium.



CellSource Tokyo, Japan - In the second quarter of 2015 the Company entered into
negotiations with CellSource, LLC in Tokyo, Japan for the licensing of its
ATGRAFT™ products and services and on June 2, 2015 the Company and Cell Source
entered into an initial term sheet licensing the ATGRAFT™ technology to
CellSource for Japan. The non- exclusive agreement expired in June of 2020.

Corporate Information

Our principal executive offices are located at 1 Meridian Road, Eatontown, New
Jersey 07724 and our telephone number is [phone]. Our website is
www.americancryostem.com. We also lease and operate a tissue processing
laboratory at Princeton Corporate Plaza in Monmouth Junction NJ. Our laboratory
website address is www.acslaboratories.com.

Available Information

We file electronically with the U.S. Securities and Exchange Commission (SEC)
our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K, and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934. The public can
obtain materials that we file with the SEC through the SEC's website at
http://www.sec.gov or at the SEC's Public Reference Room at 100 F Street, NE,
Washington, DC 20549. Information on the operation of the Public Reference Room
is available by calling the SEC at 800-SEC-0330.

33





Going Concern



As of the date of this quarterly report, there is substantial doubt regarding
our ability to continue as a going concern as we have not generated sufficient
cash flow to fund our proposed business.



We have suffered recurring losses from operations since our inception. In
addition, we have yet to generate an internal cash flow from our business
operations or successfully raised the financing required to expand our business.
As a result of these and other factors, our independent auditor has expressed
substantial doubt about our ability to continue as a going concern. Our future
success and viability, therefore, are dependent upon our ability to generate
capital financing. The failure to generate sufficient revenues or raise
additional capital may have a material and adverse effect upon us and our
shareholders.



Our plans with regard to these matters encompass the following actions: (i)
obtaining funding from new investors to alleviate our working capital
deficiency, and (ii) implementing a plan to generate sales of our proposed
products. Our continued existence is dependent upon our ability to resolve our
liquidity problems and achieve profitability in our current business operations.
However, the outcome of management's plans cannot be ascertained with any degree
of certainty. Our financial statements do not include any adjustments that might
result from the outcome of these risks and uncertainties.

Results of Operations - Three Months

The Company's revenue for the quarter ended June 30, 2022, decreased to $42,599 versus $132,119 for the same period of Fiscal 2021.

Operating expenses decreased to $414,643 for the quarter ended June 30, 2022,
from $570,992 for the same period in Fiscal 2021. The Company incurred a
decrease in its Research and Development and Consulting Expense paid with stock
options. The Company incurred an increase in Bad Debt Expense since Management
increased its Allowance for Doubtful Accounts.



Net loss for the quarter ended June 30, 2022, was $401,689 compared to a net
loss of $466,470 for the same period of Fiscal 2021. The decrease in the net
loss for quarter versus the same period in 2021, was primarily due to the
reduction in revenue show above.

Liquidity and Capital Resources

As of June 30, 2022, the Company had a cash balance of $2,757, compared to
$8,244 at September 30, 2021. We used $699,080 of our cash for operations and
$73,202 for investing activities. The main sources of cash provided by financing
activities included new equity issuances totaling $813,500.

Accounts Receivable decreased to $14,859 at June 30, 2022 from $78,782 at September 30, 2021.

Convertible debt increased to $716,370 as of June 30, 2022, versus $706,131 as
of September 30, 2021. This increase was due to the effects of amortizing the
beneficial conversion feature of the notes. See   Note 7  . Debt reported in the
financial statements.



The Company will continue to focus on its financing and investment activities,
but should we be unable to raise sufficient funds, we will be required to
curtail our operating plans or cease them entirely. We cannot assure you that we
will generate the necessary funding to operate or develop our business. Please
see "Cash Requirements" above for our existing plans with respect to raising the
capital we believe will be required. In the event that we are able to obtain the
necessary financing to move forward with our business plan, we expect that our
expenses will increase significantly as we attempt to grow our business.
Accordingly, the above estimates for the financing required may not be accurate
and must be considered in light these circumstances.

There was no significant impact on the Company's operations as a result of inflation for the nine months ended June 30, 2022.

Cash Requirements



We will require additional capital to fund marketing, operational expansion,
processing staff training, as well as for working capital. We are attempting to
raise sufficient funds would enable us to satisfy our cash requirements for a
period of the next 12 to 24 months. In order to finance further market
development with the associated expansion of operational capabilities for the
time period discussed above, we will need to raise additional working capital.
However, we cannot assure you we can attract sufficient capital to enable us to
fully fund our anticipated cash requirements during this period. In addition, we
cannot assure you that the requisite financing, whether over the short or long
term, will be raised within the necessary time frame or on terms acceptable to
us, if at all. Should we be unable to raise sufficient funds we may be required
to curtail our operating plans if not cease them entirely. As a result, we
cannot assure you that we will be able to operate profitably on a consistent
basis, or at all, in the future.

34





In order to move our Company through its next critical growth phase of
development and commercialization and to ensure we are in position to support
our research collaborations and market penetration strategies, Management
continues to seek new investment into the Company from existing and new
investors with particular emphasis on identifying the best deal structure to
attract and retain meaningful capital sponsorship from both the retail and
institutional investing communities, while limiting dilution to our current
shareholders. Management also focuses its efforts on increasing sales and
licensing revenue and reducing expenses.



Effects of COVID-19



The development of our drug candidates could be disrupted and materially
adversely affected in the future by a pandemic, epidemic or outbreak of an
infectious disease like the recent outbreak of COVID-19. For example, as a
result of measures imposed by the governments in regions affected by COVID-19
businesses and schools have been suspended due to quarantines or "stay at home"
orders intended to contain this outbreak. Furthermore, many patients had
concerns about making hospital and physician office visits for fear of
contracting the virus. These factors had an direct adverse impact on our ability
to enroll participants in our clinical trial programs. In addition, travel
restrictions, stay-in-place orders and other measures imposed by governmental
agencies and health organizations to prevent the spread of COVID-19 and protect
the citizenry, have had an adverse impact on the flow of goods and services
between nations. The supply disruptions have resulted in shortages of goods and
materials. This could also impact our ability to produce the products we need to
conduct our clinical trials. In addition, these measures have resulted in delays
to the regulatory process, which may also have an adverse impact on our
business. Finally, initially, the outbreak of COVID-19 led to steep declines in
the Dow Industrial Average and other domestic and international stock indices at
the end of February and during March and April 2020. While the markets have
rebounded nicely since then, recent concerns over the "Delta variant" and the
impact it may have on the U.S. and global economies, have led to "risk-off"
sessions in the global markets. We are still assessing our business plans and
the impact COVID-19 may have on our ability to advance the development of our
drug candidates or to raise financing to support the development of our drug
candidates, we cannot assure you that we will be able to avoid part or all of
any impact from the spread of COVID-19 or its consequences, including downturns
in business sentiment generally or in our sector in particular.



Commitments



Effective October 1, 2019, the Company adopted the provision of ASC 842 Leases.
The Company determines whether a contract is or contains a lease at inception of
the contract and whether that lease meets the classification criteria of finance
or operating lease. When available, the Company uses the rate implicit in the
lease to discount lease payments to present value; however, one of the Company's
leases does not provide a readily determinable implicit rate. Therefore, the
Company must discount lease payments based on an estimate of its incremental
borrowing rate which is based on the interest rate of similar debt outstanding.



Finance Lease

The Company leases Equipment at its laboratory from NFS Leasing, Inc. Lease payments are $2,993.62 per month for eighteen (18) months. The final lease payment is scheduled for January 1, 2023. When the final payment is made, the Company will own the equipment. See Note 11 . Leases in the Financial Statements.

Operating Lease



The Company leases its office facility, in Eatontown, New Jersey, from Eaton
Holdings LLC. The Company extended the lease on March 23, 2022 for an additional
three years from May 1, 2021 to April 30, 2024. at $2,650 per month. See   Note
11  . Leases in the Financial Statements.



The Company leases its laboratory facility, in Monmouth Junction, New Jersey,
from Princeton Corporate Plaza LLC. The Company renewed its lease on April 1,
2022, for an additional 12 months and pays $2,465 per month. See   Note 11  .
Leases in the Financial Statements.

The Company was not party to any litigation against it and is not aware of any litigation contemplated against it as of June 30, 2022. See also Legal Proceedings below.

35





We anticipate that any further capital commitments that may be incurred will be
financed principally through the issuance of our securities. However, we cannot
assure you that additional financing will be available to us on a timely basis,
on acceptable terms, or at all.

Related Party Transactions

On October 1, 2020, the Company executed a note with ACS Global, Inc. for a
principal amount of $99,125 representing the outstanding balance due to ACS
Global. Inc. The Note matures on October 1, 2023 and carries an interest rate of
10% per annum which may be paid in cash or stock. The note is due and payable in
full upon maturity. On March 1, 2021, the note was increased by $49,000. The
note may be prepaid at any time by the Company.

From time to time the Company takes advances and makes principal payments on the note. During the nine months ended June 30, 2022, the Company was advanced $2,120 and made payments of $24,805 on the note.

The principal balance of the Note is $125,090 at June 30, 2022 and $147,775 at September 30, 2021.

The Company exchanged 1,000,000 newly created Series A Voting Convertible Preferred Shares for 20,000,000 common shares held by ACS Global, Inc.

Terms of the Series A Voting Convertible Preferred Shares are as follows:

1. Each Series A Share is convertible into 20 shares of American CryoStem common

stock $0.001 par value, subject to any recapitalization event.

2. Stated annual dividend of $0.20 per share payable quarterly in cash or stock

at the discretion of the Company's Board of Directors.

3. Each preferred share shall have 20 votes on all matters subject to a Company

shareholder vote.

4. Convertible after one year at the discretion of the ACS Global board of

    directors.

During the nine months ended June 30, 2022, the company was advanced $14,900 by a company 100% owned by the Chief Executive Officer of American CryoStem Corporation. At June 30, 2022, American CryoStem has a balance due of $14,900.

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to investors.



Critical Accounting Policies



We prepare financial statements in conformity with U.S. generally accepted
accounting principles ("GAAP"), which requires us to make estimates and
assumptions that affect the amounts reported in our combined and consolidated
financial statements and related notes. See   Note 1   and   Note 3   to the
Financial Statements for more information.

Basis of Presentation

Our financial statements are presented on the accrual basis of accounting in
accordance with generally accepted accounting principles in the United State of
America, whereby revenues are recognized in the period earned and expenses when
incurred.

Management's Use of Estimates

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting periods. Actual results
could differ from those estimates.



Long-Lived Assets



We review and evaluate our long-lived assets for impairment whenever events or
changes in circumstances indicate that their net book value may not be
recoverable. When such factors and circumstances exist, we compare the assets'
carrying amounts against the estimated undiscounted cash flows to be generated
by those assets over their estimated useful lives. If the carrying amounts are
greater than the undiscounted cash flows, the fair values of those assets are
estimated by discounting the projected cash flows. Any excess of the carrying
amounts over the fair values are recorded as impairments in that fiscal period.

36





Statement of Cash Flows

For purposes of the statement of cash flows, we consider all highly liquid investments (i.e., investments which, when purchased, have original maturities of three months or less) to be cash equivalents.

Recent Accounting Pronouncements

The FASB recently issued ASU 2020-06, Debt - Debt with Conversion and Other
Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's
Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and
Contracts in an Entity's Own Equity, to reduce complexity in applying GAAP to
certain financial instruments with characteristics of liabilities and equity.



The guidance in ASU 2020-06 simplifies the accounting for convertible debt
instruments and convertible preferred stock by removing the existing guidance in
ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities
to account for beneficial conversion features and cash conversion features in
equity, separately from the host convertible debt or preferred stock. The
guidance in ASC 470-20 applies to convertible instruments for which the embedded
conversion features are not required to be bifurcated from the host contract and
accounted for as derivatives.



In addition, the amendments revise the scope exception from derivative
accounting in ASC 815-40 for freestanding financial instruments and embedded
features that are both indexed to the issuer's own stock and classified in
stockholders' equity, by removing certain criteria required for equity
classification. These amendments are expected to result in more freestanding
financial instruments qualifying for equity classification (and, therefore, not
accounted for as derivatives), as well as fewer embedded features requiring
separate accounting from the host contract.



The amendments in ASU 2020-06 further revise the guidance in ASC 260, Earnings
Per Share, to require entities to calculate diluted earnings per share (EPS) for
convertible instruments by using the if-converted method. In addition, entities
must presume share settlement for purposes of calculating diluted EPS when an
instrument may be settled in cash or shares.



The amendments in ASU 2020-06 are effective for our company for fiscal years
beginning after December 15, 2023, with early adoption permitted. The Company is
currently assessing the impact of these amendments on its future financial
reporting.



In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments-Credit
Losses. The new guidance provides better representation about expected credit
losses on financial instruments. This Update requires the use of a methodology
that reflects expected losses and requires consideration of a broader range of
reasonable and supportive information to inform credit loss estimates. This ASU
is effective for reporting periods beginning after December 15, 2022, with early
adoption permitted. The company is studying the impact of adopting the ASU in
fiscal year 2024, and what effect it could have. The Company believes the
accounting change would not have a material effect on the financial statements.

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