SECURITIES AND EXCHANGE COMMISSION
                        Washington D.C.  20549

                               FORM 10-K

Annual  Report  Pursuant to Section 13 or 15(d) of  the Securities Exchange Act
of 1934

For the fiscal year ended June 30, 1997     Commission File Number:  0-16375

                       THERMOGENESIS CORP.
                 (Exact name of Registrant as specified in its charter)

  DELAWARE                                                 94-3018487
(State of Incorporation)                                (I.R.S. Employer
                                                       Identification No.)
                         3146 GOLD CAMP DRIVE
                       RANCHO CORDOVA, CA 95670
                            (916) 858-5100
          (Address, including zip code, and telephone number,
             including area code, of principal executive offices)

   Securities registered pursuant to section 12(b) of the Act:  NONE

      Securities registered pursuant to section 12(g) of the Act:

                                            NAME OF EACH EXCHANGE
           TITLE OF EACH CLASS                  ON WHICH REGISTERED

        Common Stock, $.001 Par Value       Nasdaq SmallCap Market

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

Indicate by check mark if disclosure of delinquent filers pursuant  to Item 405
of  Regulation S-K is not contained herein, and will not be contained,  to  the
best  of  the  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in  Part III of this Form 10-K or  any
amendment of this Form 10-K.  <checked-box>

The aggregate market value of the voting stock  held  by  non-affiliates of the
registrant  based  on  the  closing  sale  price  on  September 25,  1997,  was
$53,558,540.00.

The  number  of  shares  of  the registrant's common stock,  $.001  par  value,
outstanding on June 30, 1997 was 15,864,769.

                  DOCUMENTS INCORPORATED BY REFERENCE

                                 None.


<PAGE>


                           TABLE OF CONTENTS

                                                            PAGE NUMBER


ITEM 1. Business......................................          3
        (a) New Developments in Business.............           3
        (b) General Development of Business..........           6
        (c) Description of the Business..............           6


ITEM 2. Description of Properties....................          16


ITEM 3. Legal Proceedings...........................           17


ITEM 4. Submission of Matters to a Vote of Security Holders... 17


ITEM 5. Market  for  the  Registrant's Common Equity
        and Related Stockholder Matters                        18


ITEM 6. Selected Consolidated Financial Data.................. 19


ITEM 7. Management's Discussion and Analysis of Financial
        Condition and Results of Operations.................   20
        (a) Overview........................................   20
        (b) Results of Operations...........................   20
        (c) Liquidity and Capital Resources...........         24
        (d) Factors Affecting  Operating  Results  and 
            Market Price of Common Stock ..                    25


ITEM 8. Financial Statements and Supplementary Data........... 27


ITEM 9. Changes in and Disagreements with Accountants on Accounting
        And Financial Disclosure.........................      44


ITEM 10. Directors and Executive Officers of the Registrant... 44
         (a) Corporate Directors.............................. 44
         (b) Corporate Officers..............................  46


ITEM 11. Executive Compensation.............................   48


ITEM  12. Security  Ownership  of Certain Beneficial
          Owners  and  Management ...............              51


ITEM 13.  Certain Relationships and Related Transactions...... 52


ITEM 14.  Exhibits.........................................    53
          (a) Financial Statements........................     53
          (b) Reports on Form 8-K.........................     53
          (c) Exhibits.....................................    53

                                    2

<PAGE>


                                PART I


ITEM 1.  BUSINESS

The Company was incorporated in Delaware  on  September  26, 1986 as Insta Cool
Inc.  of  North  America.   In January 1995, the Company changed  its  name  to
THERMOGENESIS CORP. ("Company")  to  better  reflect  the  thermodynamic  blood
processing  segment  of  the  biotechnology  industry  that it hopes to service
through development of new products.  The Company designs  and  sells  products
and  devices  which  utilize  its  proprietary thermodynamic technology for the
processing of biological substances  including  the  cryopreservation, thawing,
and harvesting of blood components  ("Proprietary Technology").   Historically,
the Company's primary revenues have been from sales of its Class I blood plasma
freezers and thawers ("Core Line Products") to hospitals, blood banks and blood
transfusion centers in 32 countries. The Company has under development five new
FDA  Class  II  blood  and/or tissue processing systems ("Pipe Line Products"),
each consisting of a thermodynamic  device  designed  to  process  blood and/or
tissues through use of proprietary, sterile, disposable processing containers.

(A)  NEW DEVELOPMENTS IN BUSINESS

     FDA DEVELOPMENTS

     (I)   HEMOMATIC<trademark> BLOOD COLLECTION MONITOR

In April 1997, the Company received marketing clearance from the U.S.  Food and
Drug  Administration  ("FDA") to market the Hemo-Matic Blood Collection Monitor
("Hemo-Matic") in the United  States.  The Company is the exclusive distributor
in the United States and Canada  for  the  Hemo-Matic, which is manufactured by
HemoPharm  Services  S.A.  ("HemoPharm")  in  France.   The  Hemo-Matic  is  an
automated blood weigher/mixer used by phlebotomists to collect blood donations.
The device is capable of simultaneously weighing  and  mixing  blood,  and will
assist  in the collection of blood donations by automating the process to  some
degree.

The Company  placed  eight  monitors  in  a  single center field trial with the
American Red Cross in April 1997 with sufficiently favorable results to justify
an expanded regional field trial of the device  using  thirty  blood collection
monitors,  beginning  in  October  1997.   The Company has begun to market  the
product to the American Red Cross Blood Centers,  the  Canadian Red Cross Blood
Centers, and other independent blood collection centers, community blood banks,
and  hospitals  across  the  country, which represents a potential  market  for
approximately 11,000 Hemo-Matic units.

     (II)  CRYOSEAL<trademark> SYSTEM

In  September 1996,  the Company  submitted  a  510(k)  Premarket  Notification
("510(k)")  to  the  FDA  for  permission  to  market the CryoSeal System as an
automated  rapid  method  of  preparing  cyroprecipitated  AHF  ("Cryo")  --  a
biological product licensed by the FDA for intravenous treatment of hemophilia.
The FDA requested further clarification of  certain  items  in  a  request  for
additional  information  received  in  April 1997, and the Company responded in
writing in May of 1997.  Following review  of  the  additional information that
was submitted to the FDA, a telephone conference was held to answer preliminary
questions raised by one reviewer.  The Company is taking  all steps to expedite
and  conclude  the review process, and anticipates that the FDA  will  reach  a
decision in the second quarter of fiscal 1998.

                                     3

<PAGE>

     (III) BIOARCHIVE<trademark> SYSTEM

In  September  1997,   Pall  Medsep,  the  licensee  for  the  manufacture  and
distribution of the three  inter-related placental cord blood ("PCB") bag sets,
submitted a New Drug Application  ("NDA")  with the FDA  for the PCB collection
bag set, and a 510(k) application for the PCB  processing  and  transfusion bag
sets.   These  bag sets streamline the New York Blood Center ("NYBC")  protocol
for collecting,  cryopreserving  and  transfusing  PCB stem cells and feature a
novel freezing bag which is designed to be controlled-rate frozen and stored in
the BioArchive device at -196{o} C.

The  Company  is  targeting the submission of its 510(k)  application  for  the
BioArchive device to  be  completed  in  the second quarter of fiscal 1998, but
will begin supplying the device to cord blood  banks  with  Investigational New
Drug  ("IND")  exemptions  under  the Investigational Device Exemption  ("IDE")
regulation.

     NEW CORPORATE DEVELOPMENTS

     (I)  STRATEGIC PARTNERS

In March 1997, the Company  and the  NYBC,  as  co-licensors,  entered  into  a
license agreement with Pall Corporation and Medsep Corporation, a subsidiary of
Pall  (collectively  "Pall  Medsep"),  as  Licensees  through which Pall Medsep
became the exclusive world-wide manufacturer and distributor  (excluding Japan)
for the system of sterile, disposable containers developed by the  Company  and
NYBC  for  the  processing  of hematopoietic stem cells sourced from PCB.  Pall
Corporation  is  the  international  leader  in  the  design,  manufacture  and
marketing of fine disposable  filters,  membranes and other fluid clarification
and  separation devices for the health care,  aeropower  and  fluid  processing
markets.

The system  of  containers is designed to simplify and streamline harvesting of
stem-cell rich blood  from  the  placental/umbilical cords of healthy newborns,
and the concentration, cryopreservation  (freezing)  and transfusion of the PCB
stem  cells  while maintaining the highest stem cell population  and  viability
from each PCB  donation.  These  units  of  PCB  stem  cells are designed to be
"banked"  in frozen storage in a BioArchive robotic storage  device  at  liquid
nitrogen temperature  (-196*C)  for "on demand" hematopoietic reconstitution of
patients  afflicted  with  diseases   such   as   leukemia,   aplastic  anemia,
hypoproliferative stem and progenitor cell disorders, leukemia,  lymphomas  and
gaucher disease.

In  1996,  the  manufacture  and  distribution  rights  to  the  same  sterile,
disposable  PCB  processing containers were licensed to Nissho Corporation  for
exclusive  manufacture   and   marketing   in   Japan.   Nissho  is  a  leading
manufacturer  of medical equipment, blood-related  disposable  containers,  and
pharmaceuticals  in  Japan.   In  1995,  the distribution of the BioArchive was
licensed to Daido Hoxan for the territory of Japan.

The  advantages of PCB stem cell banks to patients  and  transplant  physicians
include the following:  (1) the PCB stem cell donations can be easily harvested
from the  postpartum  placenta  and  umbilical cord resulting from the birth of
the millions of babies born each year;  (2)  PCB stem cell treated patients, on
the  average, demonstrate lower incidence of graft-versus-host  disease  (GVHD)
and improved probability of event-free survival than patients treated with bone
marrow;  and  (3) PCB stem cell donations can be stored in frozen inventory for
use immediately on demand in contrast to the average 6-9 month delay in finding
a suitable HLA-  matched  bone  marrow  donor who must then undergo an invasive
surgical procedure to harvest the bone marrow.

                                      4

<PAGE>

Under the license agreement with Pall Medsep,  the  Company received an advance
license payment, and NYBC and the Company will receive  a running royalty equal
to ten percent (10%) of Pall Medsep's net sales resulting  from the sale of the
licensed product for use in stem cell blood collection, and  a  running royalty
equal to five percent (5%) of net sales for non-cord blood stem cell use. Under
the  terms of the license agreement with Nissho, NYBC received certain  advance
license payments, and NYBC and the Company will receive a running royalty equal
to ten percent (10%) of Nissho's sale of the licensed products in Japan.

     (II) NATIONAL HEART LUNG AND BLOOD INSTITUTE STUDY

The  National  Heart  Lung  Blood  Institute  clinical  research  program  will
establish  PCB  progenitor cell banks at three key medical research facilities,
Duke University Medical  Center  ("Duke  University"),  Children's  Hospital of
Orange  County  and  UCLA  Medical Center.   In addition to the three PCB  cell
banks, the study will consist  of  seven  transplant  centers  for the clinical
transplantation of the PCB units. The five-year, $30 million multi-center study
was  authorized by NHLBI Director, Dr. Claude Lenfant in October  1996  and  is
supervised  by  Dr.  Paul  McCurdy,  Director,  Blood  Resources Program of the
Division of Blood Diseases and Resources.

In  June 1997,  Pall Medsep was awarded an exclusive contract  to  provide  the
THERMOGENESIS/NYBC  sterile  collection, processing and storage systems for the
NHLBI study of PCB transplants.  The Company believes that the practical effect
of this award is that a standardization  in the procedures utilized to collect,
process, cryopreserve and transfuse cord blood stem cells may now take place.

In August  1997, the Company announced that its BioArchive was selected by Duke
University  and  Children's  Hospital  of  Orange  County,  two  of  the  NHLBI
collection centers, for use in the NHLBI clinical  study  to  freeze, store and
manage donated units of PCB progenitor cells.   In September 1997,  the Company
received additional orders for the BioArchive from the NYBC and Daido  Hoxan of
Japan.   The  FDA's  pre-market  human  clinical investigation rules govern the
research  program  and  the  BioArchive  Systems  will  be  delivered  to  Duke
University,  Children's  Hospital of Orange  County  and  the  NYBC  under  the
Investigational Device Exemption (IDE) regulation, and cost recovery provisions
will be utilized for the equipment.   The  second quarter of fiscal 1998 is the
projected target date for the submission to the FDA of a 510(k) application for
the BioArchive System.

     (III) EQUITY FINANCING

In November 1996, the Company completed a private  placement raising a total of
$8,268,006, before direct expenses.  The net funds of  approximately $7,300,000
are being used for general corporate purposes that include, but are not limited
to,  payment  of  existing  accounts payable and short-term  debt,  testing  of
products, continued research  and  development,  preclinical trials, production
costs  and  inventory,  advertising and promotional materials  related  to  new
products in development,  working  capital,  and  increased  payroll due to the
addition  of  personnel  necessary to bring the new products in development  to
market.

Assuming the exercise of all  Warrants  issued  as  part  of  the  Units in the
private placement at $3.885 per share, the Company would receive an  additional
$5,353,534,  which  would  be  used to support general operations and continued
research and development for additional products and markets.  The Company does
not, however, anticipate that the Warrants will be exercised immediately, based
on the current trading price of $3.50 on September 25, 1997.

                                      5

<PAGE>

(B)  GENERAL DEVELOPMENT OF BUSINESS

During the fiscal years 1988 through  1994,  the Company focused its efforts on
research and development and on refining Core  Line Products.  Since July 1994,
the  Company  has  aggressively  sought new applications  for  its  Proprietary
Technology, which culminated in five  FDA  Class  II products, two of which the
Company expects to market launch in fiscal 1998.  The new FDA Class II products
are indicative of the Company's efforts to develop  systems  and  processes for
therapeutic  use  in  larger  markets; products which by their inherent  nature
require consumable disposable components  for  the  processing  of blood and/or
tissue.

     HISTORICAL AND PROSPECTIVE

The  Company's  strategy  has  been  to  develop  superior  FDA  Class  I blood
processing  devices  for  facilities,  such  as  the  Red Cross and other blood
transfusion  societies  of various countries, which process  blood  components,
inventory  blood components,  or  fractionate  blood  plasma,  thereby  quickly
establishing  credibility  for  the  Company's  Proprietary  Technology.  Early
products which were designed for blood banks and hospitals have  received rapid
510(k)  permission  to market, and the Company sells them directly and  through
its distribution network in 32 countries.

From 1988 to 1992 the  Company's  products  were  designed  to transfer heat by
circulating  refrigerated  heat  transfer  liquids directly into  contact  with
plastic sealed containers of blood plasma.   These initial designs used liquids
containing chloro-flouro-carbons ("CFC") which  the  Company  phased out in the
fall of 1992.  Thereafter, the Company developed an alternative  heat  transfer
method which automatically interposed a thin flexible membrane between the heat
transfer liquid and biological substances which process allowed for use of non-
CFC  based  heat transfer liquids. The Company continues to refine these plasma
freezers and thawers in order to maintain its market leadership.

The five Pipe  Line  Products under development each consist of a thermodynamic
device designed to process  blood  and/or  tissues  through use of proprietary,
sterile, disposable processing containers.  The disposable  components  are  an
integral  part  of  most  blood processing systems, and related medical devices
that  come into contact with  blood  and  tissue.   The  proprietary,  sterile,
disposable  containers  and other disposable components of the new systems will
potentially generate continuing  revenue  streams  for the Company through each
use of the equipment, compared to current revenues generated  from  the sale of
Core  Line  Products  which  are purchased as capital equipment.  Based on  its
current market research of surgical  and  medical procedures, and reimbursement
costs  for  those procedures, the Company estimates  that  its  new  Pipe  Line
Products will  collectively  compete  in  markets  where annual revenues are in
excess of $2 billion annually.

The Company operates in one industry segment, and reports  the  results  of its
operations for only one industry segment.

(C)  DESCRIPTION OF THE BUSINESS

     BACKGROUND OF MARKETS AND PRODUCTS

The  Company's  Core  Line  Products  of  ultra  rapid plasma freezers use heat
transfer liquids, rather than gases such as air, carbon  dioxide or nitrogen to
transfer  heat  to  and  from a biological substance. From 1988  to  1992,  the
Company's devices were designed to transfer heat by causing these heat transfer
liquids to directly contact  the  plastic  container  within  which  the  blood
components were sealed.  However, since these liquids contained a CFC chemical,
an improved heat transfer method was developed and patented which automatically
interposed  a  thin  flexible plastic membrane between the heat transfer liquid
and the container housing  the blood component.  This flexible membrane allowed
the use of low viscosity silicone based heat transfer liquids, thereby allowing
the Company to produce CFC-free devices.

                                       6

<PAGE>

The Company's blood plasma thawers  utilize  algecide treated water to transfer
heat through the patented flexible membrane system.  In  tests performed by the
Company's research and development ("R&D") staff, the Company compared the rate
and homogenous quality of temperature rise in four bags of  frozen  plasma in a
THERMOGENESIS  plasma  thawer and a microwave oven. The Company found that  the
frozen plasma in the THERMOGENESIS  thawer  rose  to a transfusible temperature
(20{o}C), faster than the thaw rate for frozen plasma  in a microwave oven, and
the  plasma  in  the  THERMOGENESIS  thawer  had  less  temperature   variation
throughout  its  volume  after  thawing than the plasma thawed in the microwave
oven.  The Company currently manufactures  the  following Core Line Products of
blood plasma freezers and thawers:


<TABLE>
<CAPTION>
     MODEL             CAPACITY                APPLICATION               TARGET MARKET
<S>                <C>                       <C>                       <C>
      MP2000          168 Plasma Bags/Hr.       Freeze Blood Plasma           Blood Banks,
                                                                           Transfusion Boards,
                                                                               Red Crosses
      MP1000          64 Plasma Bags/Hr.
       MP750          32 Plasma Bags/Hr.
       MP500          24 Plasma Bags/Hr.
       MPIII          12 Plasma Bags/Day          Portable Blood              Blood Banks,
                                                  Plasma Freezing          Transfusion Boards,
                                                    and Storage                Red Crosses
       MPII            6 Plasma Bags/Day
      MPIIIt          24 Plasma Bags/load
       MT202         2 Plasma Bags/12 Min.       Thaw Blood Plasma          Blood Banks, Hospitals
       MT204         4 Plasma Bags/12 Min.
       MT210        10 Plasma Bags/12 Min.
</TABLE>


The freezers differ in size and capacity and have suggested retail prices which
range  from  $10,000 to $65,000 for the larger capacity  plasma  freezers.  The
price also varies  within each model depending upon configuration and accessory
equipment purchased. The Company sometimes offers discounts from its list price
to meet competitive conditions.

Materials used to produce  the  Company's  products  are readily available from
numerous sources.  Based upon current information available  from  its vendors,
the   Company  does  not  anticipate  any  shortage  of  supplies  required  to
manufacture  its  products.  In 1992, the Company introduced a replacement heat
transfer liquid and refrigerant  which  is  free of chloro-fluoro-carbons (CFC)
for use in the Proprietary Technology. The replacement  chemicals  are  readily
available  and the Company does not anticipate any shortages or constraints  on
supplies.

The Company  has targeted the commercial blood fractionators manufacturers, Red
Cross facilities,  hospitals and independent blood collection facilities as the
primary customer for  its freezers and thawers, which are marketed on the basis
of speed of operation, energy savings, precision of temperature control and the
increased yields of important blood proteins.

                                        7

<PAGE>

The Company expects limited  growth in the market for blood plasma freezers and
thawers and, as a result, the continued growth of the Company is dependent upon
the development of new applications  for  the  Proprietary  Technology  in  the
medical  blood  processing  field  and other markets. It is management's belief
that its freezers and thawers have an  approximate service life of between 6-10
years and the Company is beginning to experience  a  replacement  market within
the blood plasma industry.

The Company has five unique Class II medical systems under development, each of
which features not only a thermodynamic platform to process blood products in a
closed  system,  but use of various sterile, disposable plastic containers  and
applicators that come  into  direct  contact  with  the  blood  product.  These
disposables  must be replaced after each use, thereby potentially  transforming
the sale of each  system  into  a  long term revenue stream.  The Company is on
schedule to complete development of  the  first two of these Class II systems -
CryoSeal and N{2} BioArchive - by the second  quarter  of  fiscal 1998, and has
formed strategic business relationships with major medical companies  to assist
its manufacturing and marketing efforts.  See "Research and Development"  below
for a summary of the current Class II medical systems in development.

  MARKETING, SALES AND DISTRIBUTION

The  Company  sells its medical products to blood banks and hospitals including
the Red Cross or  Blood  Transfusion  agencies of the United States, Australia,
Belgium,  Canada,  China,  Denmark,  France,   Germany,   Japan,   Korea,   the
Netherlands,  Singapore,  Sweden,  Switzerland, and Taiwan.  The plasma thawers
have suggested retail prices between  $2,850 to $10,000 and are marketed in the
U.S. and Canada predominately through inside  direct  telemarketing sales staff
and distributors in most foreign markets.

The Company has primarily targeted the blood processing industry which consists
of  approximately 7,000 hospitals and blood collection centers  in  the  United
States  and  approximately 20,000 hospitals and blood collection centers in the
industrial nations  outside  the  United States. The Company has formulated its
marketing strategy based, in part,  on the fact that United States accounts are
serviced either by employees of the Company  or a manufacturing representative,
and internationally by regional manufacturing  representatives or distributors.
The  primary  thrust of the Company's marketing efforts  has  been  focused  on
hospitals and blood  banks  run  or managed by either the Red Cross, private or
public blood collection/transfusion  agencies  of the United States, Australia,
Belgium,   Canada,  China,  Denmark,  France,  Germany,   Japan,   Korea,   the
Netherlands,  Singapore,  Sweden, Switzerland, and Taiwan. In 1993, the Company
instituted a comprehensive telemarketing program to increase market coverage in
the United States and Canada,  and  in  September,  1994,  the Company began to
upgrade its customer service department with telemarketing support.

The Company has already formed strategic business relationships  to  assist its
manufacturing and marketing efforts for the FDA Class II Pipeline Products, and
will  seek  other  similar  relationships  in  the  future.   See  "License and
Distribution Rights" below.

   RESEARCH AND DEVELOPMENT

The  Company  incurred  approximately  $447,000, $1,317,000  and $3,562,000  in
research and development ("R&D") expenses  for  the  years ended June 30, 1995,
1996  and  1997,  respectively.    The R&D expenditures in  1997  increased  by
approximately 170% over the 1996 year.   The  R&D expenditures were principally
related to final development of two Class II medical  devices  nearing  product
launch.   The  Company  anticipates  expenses  to  continue  as  a  significant
percentage  of  revenues until new product launches are complete.  See  Item  7
below, entitled "Management's  Discussion  and  Analysis of Financial Condition
and Results of Operations."

                                     8

<PAGE>

CRYOSEAL SYSTEM.  The CryoSeal System is a small,  floor-standing thermodynamic
device  and  special  blood processing container which  harvests  Cryo  from  a
donor's blood plasma.   Cryo  is  licensed  by  the  FDA  for  the  intravenous
treatment of clotting protein deficient patients (hemophilia).  As the CryoSeal
System  prepares Cryo in less than one hour compared to two to three days  when
utilizing  current  conventional  blood  bank  procedures  and  equipment,  the
CryoSeal  System  may  also  be  suitable  for  the  harvesting of adhesive and
clotting proteins, and growth factors from a surgical  patient's  own blood for
use  by  the  surgeon  to  stop  surface bleeding, bond tissues and augment  or
replace sutures.  Should the FDA permit  this  practice,  the Cryo harvested by
the  CryoSeal  System  --  called  CryoSealant<trademark>,  would   become   an
autologous biological adhesive containing the adhesive and/or clotting proteins
fibrinogen,  fibronectin,  von  Willebrand's  Factor, factor VIII, and the clot
stabilizing protein, factor XIII, as well as platelet  derived  growth  factors
(PDGF).  The Company believes that the CryoSeal System may become an effective,
safe  and  less  expensive alternative to the current commercial tissue sealant
known as "Fibrin Glue"  which,  the  Company estimates has annual sales of $400
million in Europe and Japan, but which has been licensed by the FDA for sale in
the United States. The license for Fibrin Glue has since been rescinded.

Medical literature documents important  practical  applications for Fibrin Glue
in   thirteen   distinct   surgical   areas,   including   plastic,   thoracic,
cardiovascular, orthopaedic, and opthamalogic surgery.  Commercially  available
Fibrin   Glue  predominantly  includes  fibrinogen  proteins  which  have  been
harvested  from  plasma  pooled  from thousands of donors.  Fibrin Glue is sold
outside the United States in kits  which  include  a simple applicator and cost
the hospital $100 to $220 per milliliter, depending  on  the country.  Although
Fibrin Glue sourced from pooled plasma has not yet been licensed by the FDA for
sale in the USA, perhaps, due to concerns over contamination by viruses such as
HIV and hepatitis, The Marketing Research Bureau's Report,  "Market  Assessment
of the Commercial Fibrin Sealant Market in the United States:  1996," estimates
the potential annual U.S. market for such a biological adhesive to be in excess
of $400 million.  No assurances can be given that the Company will receive  FDA
permission  to  market  its  CryoSeal  System as a device to produce autologous
fibrin glue, or that it will obtain significant  market  share or revenues from
the distribution of its system.

The Company believes that there is a significant need for a tissue sealant that
fulfills  the  surgeon's requirement for effectiveness and ease  of  use  while
accomryoSeal System,  which  can  produce  8 to 10 ml of harvested clotting and
adhesive proteins, requires the use of two or more of the following disposables
which are integral components to the System:

   CP-1:   A sterile, plastic bag set for harvesting  the  proteins  and growth
           factors from the patient's blood plasma.

   SA-1:   A   small,   sterile,   hand-held  spray  applicator  for  precisely
           depositing CryoSealant on large bleeding wound sites.

   DA-1:   A small, sterile, hand-held  plastic  line  or  dot  applicator  for
           precisely  depositing  CryoSealant on small or narrow bleeding wound
           sites.
                                         9

<PAGE>

Clinical studies with the CryoSeal  System,  which are exploring CryoSealant as
an  autologous fibrin glue,  are now taking place  in  the  United  States  and
Canada  under  the  direction  of  Dr.  Dean  Toriumi,  a leading specialist in
reconstructive surgery at the Medical School of the University  of  Illinois at
Chicago,  and Dr. Gail Rock, a leading specialist in hematology and coagulation
at the Ottawa Civic Hospital.  Additional clinical trials are also scheduled to
begin in Italy and Japan in the second quarter of fiscal 1998.

In September  1996,  the  Company  applied  to  the FDA for 510(k) clearance to
market  its  CryoSeal  System  for  the  rapid automated  preparation  of  Cryo
harvested  from a single donor's unit of blood  plasma,  a  biological  product
licensed by the FDA for intravenous treatment of hemophilia.

The second and  more critical stage of the regulatory process will be to submit
additional clinical  findings  to  support the use of the CryoSeal System as an
autologous topical hemostatic and tissue  bonding  agent  during  surgery.  The
Company is currently in the process of identifying specific surgical  protocols
which would provide the data to submit to the FDA for permission to expand  the
applications of the CryoSeal System.

N{2}  BIOARCHIVE SYSTEM.  This System is a highly evolved means for collecting,
processing,   controlled-rate   freezing,  storing  and  retrieving  biological
thermolabile  substances such as stem  and  progenitor  cells,  corneas,  heart
valves, sperm cells,  virus  samples,  biopsy  specimens, cell lines and blood,
tissue  and saliva samples for DNA matching.  It  features  a  liquid  nitrogen
dewar equipped  with  a robotic insertion and retrieval arm with remote optical
bar  code  reading, controlled  rate  freezing  and  a  computerized  inventory
management system  with  proprietary  disposable  containers  tailored  to  the
specific  biological item.    The need to accurately validate that the freezing
rate  and storage  and  retrieval  of  these  precious  biological  tissues  is
paramount.  For example:

   <circle>  Both  sperm banks and prospective mothers need to be sure that the
     implanted sperm  has  been  correctly frozen and stored and then correctly
     identified and retrieved from the thousands of similar inventory items.

   <circle> Both police departments  and  suspects need to be assured that DNA-
     typed  blood, tissue or saliva samples  have  been  correctly  frozen  and
     stored and then correctly identified for forensic purposes.

   <circle> Both  pathologists  and  patients  need  to  be assured that biopsy
     samples  have  been  correctly  frozen  and  stored  and  then   correctly
     identified and retrieved from the thousands of similar inventory items.

   <circle>  Both transplant surgeons and patients need to be assured that  the
     genetically-typed  stem  cells  for  transplantation  have  been correctly
     frozen  and  stored and then correctly identified and retrieved  from  the
     thousands of similar inventory items.

The first biological  substance for which N{2} BioArchive disposables have been
designed is stem and progenitor  cells  from  placental  blood drawn from blood
within the placenta and umbilical cord that is normally discarded  after  every
birth.  Placental stem and progenitor cells have been identified by researchers
as a superior replacement alternative to bone marrow for the reconstitution  of
the  immune  system.   Recent  articles  in THE NEW ENGLAND JOURNAL OF MEDICINE
verify the improvements in patient mortality  that  result  from  the intrinsic
advantages of cord blood stem cells over bone marrow stem cells.  For  example,
cord blood stem cells can be easily collected, frozen and stored in "banks" for
immediate  use  and  cord  blood  stem  cells  are  more tolerant of a mismatch
resulting in lower levels of graft vs. host disease for the patient.

                                      10

<PAGE>

For optimum therapeutic benefit, it will be necessary  to harvest and inventory
many thousands of cryopreserved placental stem cell donations,  all genetically
typed.   In  cooperation with a pioneer and leading expert in this  field,  Dr.
Pablo Rubinstein  of  the  NYBC,  the  Company  has  developed three disposable
components  that optimize the marriage of stem cell collection  with  the  N{2}
BioArchive System:

   SCP-1:  A sterile plastic bag set for harvesting and cryopreserving the stem
           cells  in  a  closed  system and transferring them to the detachable
           freezing bag.

   TR-1:   A sterile, plastic disposable  bag  set  for optimally preparing the
           frozen stem cells for transfusion.

   PC-1:   A small disposable metal container to hold and protect the stem cell
           freezing  bag  during  storage  in  the N{2} BioArchive  System  and
           subsequent transport to the transplant site.

No assurances can be given that the Company's  N{2}  BioArchive  System will be
accepted by the market as new uses for the product are implemented.

JRC BLOOD SAMPLE STORAGE AND RETRIEVAL SYSTEM.  The JRC System is designed as a
long-term storage freezer, computer inventory system and blood sample container
for  use  by the Japanese Red Cross for storing samples of all blood  donations
that occur  in  Japan  each  year.   The  blood sample storage program has been
mandated by the Japanese government in an effort  to  comply  with  new product
liability  laws  in Japan, where approximately 6,600,000 blood donations  occur
annually.  The Company  shipped  the  prototype  JRC System to Daido-Hoxan, the
Company's  Japanese  distributor, in November 1996 for  tests  and  performance
review.  In February 1997,  Daido Hoxan placed an order for five (5) additional
systems for installation at the  five (5) JRC collection centers in Hokkaido as
an expanded pilot program.  No assurance  can be given that the Company's Blood
Sample Storage and Retrieval System will ultimately be purchased in quantity by
the Japanese Government.

A brief description of the other three Class  II  products under varying levels
of development, all of which utilize the same thermodynamic  technology already
refined for the CryoSeal System, are listed as follows:

   MICROSEAL<trademark> SYSTEM.   MicroSeal is a bench top system that requires
   less  than  50  ml of blood, drawn in a syringe to harvest up  to  1  ml  of
   CryoSealant for the  hundreds of thousands of microsurgeries that occur each
   year that could benefit  from a safe, effective biological tissue sealant or
   hemostatic agent, such as:  closing  macular  holes  in  the eye, minimizing
   scarring in fallopian tube surgery, sealing excised cataract wounds, bonding
   skin flaps in minor cosmetic surgery, and repairing ruptured eardrums.

   CRYOFACTOR<trademark> SYSTEM.   The CryoFactor System is intended to harvest
   a full array of autologous PDGF immersed in a solution of  adhesive proteins
   from a patient's own blood donation for the treatment of chronic wounds such
   as diabetic and venous insufficiency ulcers and for the healing  and joining
   of severed nerves.

   CRYOPLATELET<trademark>  SYSTEM.   The  CryoPlatelet  System is intended  to
   cryopreserve  blood  platelets  which  retain  their viability  when  thawed
   utilizing  novel  freezing  rates,  proprietary  disposable  containers  and
   transfusable,  biodegradable cryoprotectants.  Currently,  platelets  cannot
   successfully be  frozen  and remain viable, and, unfrozen, have a shelf life
   of only five (5) days.  As  a  result,  400,000  bags  (10%  of  total  bags
   produced in the United States) are discarded annually due to outdating.

                                      11

<PAGE>

   MANUFACTURING

The   Company   has   in-house  manufacturing  capabilities  and  is  currently
manufacturing approximately  70-80%  of  its  products  for  sale.  The Company
believes  that  vendors used by the Company are capable of producing sufficient
quantities of all  required  components.   The Company moved to a larger 11,000
square foot facility in July 1994 where it has  consolidated its activities and
is  in  the  process  of  upgrading its manufacturing  practices  to  ISO  9000
standards.  In February 1997,  the  Company  moved  its  sales,  marketing  and
administrative  functions, and its research and development engineering offices
into a 17,400 square  foot  facility, thereby dedicating the 11,000 square foot
and  5,000  square  foot  facilities   to   manufacturing   and   manufacturing
engineering.    Current   manufacturing   facilities  are  adequate  to  handle
anticipated sales volumes for both Core Line Products and Pipeline Products.

Products manufactured or sold by the Company  are  warranted against defects in
manufacture  for  a  period  of  12  months from delivery  when  used  for  the
equipment's  intended  purpose,  which  warranties  exclude  consequential  and
incidental damages to the extent allowed by law.

   LICENSES AND DISTRIBUTION RIGHTS

In June 1995, the Company licensed the Japanese distribution rights to its N{2}
BioArchive System and the Vial BioArchive System to Daido-Hoxan, Japan.

In  June,  1996,  the Company awarded an exclusive  manufacturing  license  and
distribution agreement  for  the  CryoSeal  System  for the country of Japan to
Asahi Medical Co., Ltd., of Japan, a division of Asahi  Chemical. Asahi Medical
is  a  leading supplier of artificial kidneys, blood purification  systems  and
leukocyte  removal  systems,  with  annual revenues of $270 million. Asahi will
manufacture  the  CP-1  disposable  bag  set,   purchase  the  CryoSeal  System
thermodynamic processing device (CS-1) and SA-1 and  DA-1  surgical applicators
from the Company, and market the CryoSeal System in Japan.

In  March  1997,  the Company  and NYBC licensed Pall Medsep as  the  exclusive
world-wide manufacturer  and  distributor  (excluding Japan) for the PCB system
of sterile, disposable containers developed by the Company and NYBC.   In 1996,
the manufacture and distribution  rights  to  the  same sterile, disposable PCB
processing containers were licensed to Nissho Corporation  for  manufacture and
distribution by Nissho in the  territory of Japan.

   COMPETITION

The   Company   hopes  to  develop  a  competitive  advantage  in  the  medical
applications of its Proprietary Technology, but it realizes that there are many
companies engaged  in  related areas which are substantially larger and possess
greater financial resources and personnel which could compete with the Company.
There are approximately  13 companies with sales in excess of $50,000,000 which
manufacture blast air chillers  and  freezers  or  liquid  nitrogen  and carbon
dioxide systems.

The  Company's  principal  market  is  the  users  of  ultra-rapid blood plasma
freezing  and  thawing  equipment.  Based upon attendance at  trade  shows  and
discussions with customers and potential  customers,  management has identified
four companies which sell freezers in the industry: Revco,  a division of Rheem
Manufacturing,  Forma  Scientific,  a  division of Mallinckrodt,  Inc.,  Harris
Corporation, and the Company. The Company  is  unable to ascertain its specific
competitive position within the blood plasma freezer  industry  and  management
has  no  knowledge  of  whether  Harris  Corporation is a subsidiary of another
Company. The Company competes primarily based  on  performance of its products.
Based upon conversations with customers and potential  customers and attendance
at trade shows, management believes that the Company's products  are  generally
more  expensive  than its competitors, ranging in price from $10,000 to $65,000
for the Company's  plasma  freezing  products compared to $2,000 to $25,000 for
competing products.

                                         12

<PAGE>

The Company may face substantial competition for all of its Pipe Line Products.
The CryoSeal System, should the Company  receive FDA permission to claim tissue
adhesion and hemostasis for the CryoSealant,  may  face  competition from major
plasma  fractionaters  which  currently  sell fibrin glue sourced  from  pooled
plasma outside the United States.  Fibrin  glue  currently  sourced from pooled
plasma may also eventually receive permission from the FDA for marketing in the
United  States.   The  fractionaters  currently  producing  fibrin   glue   are
significantly larger and better financed than the Company.

Although the Company believes that the BioArchive System is currently unique in
its ability to utilize computers, optics and proprietary disposable bag sets to
store  sterile,  processed  biologicals in liquid nitrogen, numerous larger and
better financed medical device manufacturers may choose to enter this market as
it develops.  If such companies  enter  this  market,  the  Company  would most
likely face formidable competition and be required to rely significantly on its
Proprietary Technology and patents covering the processes.


   PATENTS

The  Company  believes  that  patent  protection is important for products  and
potential segments of its current and proposed business.  The Company currently
holds six (6) patents, and has four (4)  patents pending to protect the designs
of additional products which the Company intends  to  market.   There can be no
assurance, however, as to the breadth or degree of protection afforded  to  the
Company  or  the  competitive  advantage  derived  by  the Company from current
patents  and future patents, if any.  Although the Company  believes  that  its
patents and  the  Company's existing and proposed products do not infringe upon
patents of other parties,  it  is  possible  that the Company's existing patent
rights  may be challenged and found invalid or  found  to  violate  proprietary
rights of others.  In the event any of the Company's products are challenged as
infringing,  the  Company  whe  issue.   There is no assurance that the Company
would be able to finance costly patent litigation,  or that it would be able to
obtain licenses or modify its products in a timely manner.  Failure to defend a
patent  infringement  action  or  to  obtain  a  license or  implementation  of
modifications would have a material adverse effect  on  the Company's continued
operations.

                                     13

<PAGE>

The following table sets forth the status of the Company's patents covering its
products:


<TABLE>
<CAPTION>
     #.         PATENT DESCRIPTION     USA FILING    USA ISSUED       JAPAN          EEC
                                          DATE          DATE
<S>        <C>                        <C>           <C>             <C>           <C>
      1      Flexible membrane heat       1992          1993         Pending       Pending
             transfer
      2      Portable heat transfer       1991          1993         Pending       Pending
             and storage device
      3      Blood component thawing      1992          1993         Pending       Pending
             device
      4      Cryoprecipitating device     1993          1994         Not Filed     Not Filed
      5      Device and method for        1993          1996         Pending       Pending
             harvesting and producing
             fibrinogen-rich
             cryoprecipitate
      6      Sterile bag set for          1995           Pending      Filed, 1996   Filed, 1996
             harvesting, processing
             and cryoprotecting
             placental stem and
             progenitor cells*
      7      Computer controlled          1995            1997         Filed, 1996   Filed, 1996
             device and disposable
             container for the
             storage and retrieval of
             thermolabile
             substances**
      8      Apparatus, method and        1996             Pending      Will be      Filed, 1997
             container for                                              Filed, 1998
             fibrinogen-rich
             cryosealant
      9      Freezing and thawing         1996              Pending     Will be      Filed, 1997
             bag, mold, apparatus and                                   Filed, 1998
             method**
     10      Transfussion bag set,        1997              Pending       Will be    Will be Filed,
             and method**                                                Filed, 1998   1998
</TABLE>


     *     Jointly developed with The New York Blood Center.
     **    Jointly developed with The New York Blood Center,  and  assigned  to
           the Company.

                                       14

<PAGE>

While  patents  have  been issued or are pending, the Company realizes (a) that
the Company will benefit  from  patents  issued,  if any, only if it is able to
market its products in sufficient quantities of which  there  is  no assurance;
(b) that substitutes for these patented items, if not already in existence, may
be  developed;  (c) that the granting of a patent is not determinative  of  the
validity of a patent;  such  validity  can  be  attacked  in  litigation or the
Company or owner of the patent may be forced to institute legal  proceedings to
enforce validity; and (d) that the costs of patent litigation, if any, could be
substantial and could adversely affect the Company.

   REGULATION OF BUSINESS

FDA regulations govern the Company's operations at its facilities in connection
with  the manufacture of its products, and govern the sale and distribution  of
those products.   Essentially, all medical devices marketed after May 28, 1976,
the date of the Medical  Device  Amendments  to the Food, Drug and Cosmetic Act
("FDCA"), must receive clearance or approval from  the  FDA,  unless  exempt by
regulation, prior to the marketing or sale of such products or distribution  in
interstate  commerce.   Most  of  the Company's products  require FDA clearance
through a 510(k) submission.  This regulatory process requires that the Company
demonstrate substantial equivalence  to a product which was on the market prior
to May 28, 1976, or which has been found  substantially  equivalent  after that
date.  Today, the process of obtaining FDA clearance can be lengthy, expensive,
and generally requires submission of extensive preclinical data and, in certain
cases,   in-use   or  clinical  data,  to  support  a  finding  of  substantial
equivalence.

Under  FDA  regulations,  medical  devices  are  classified  in  one  of  three
categories: Class  I,  Class  II or Class III devices, based on the health risk
posed by such device.  Each class of device must comply with certain regulatory
requirements established by the  FDA  in order to ensure the safe and effective
use of the devices.  Class I devices are  subject  to  General  Controls, which
includes a good manufacturing practices ("cGMP") quality system,  labeling, and
in some instance 510(k) submissions.  Class II devices are also subject  to the
General Controls, and in addition must comply with Special Controls established
at  the  discretion  of  the  FDA.  Special Controls may include application of
performance and safety standards,  product  type  standards, clinical or in-use
studies,  post-market  surveillance  and reporting, and  other  FDA  guidelines
established at the time of product submission  review.   Class  III devices are
higher risk devices that are generally associated with invasive procedures  and
must receive FDA pre-market application ("PMA") approval prior to distribution.

The  product  development,  preclinical  and  clinical  testing, manufacturing,
labeling,  distribution,  sales, marketing, advertising and  promotion  of  the
Company's  research,  investigational,  and  medical  devices  are  subject  to
extensive government regulation  in  the  United  States,  and  also  in  other
countries.   Products  manufactured  in  the  United States which have not been
cleared by the FDA through a 510(k) submission, or which have not been approved
through the PMA process, must comply with the requirements  of  Section  801 of
the  FDCA  prior to export.  Class I and Class II devices which are capable  of
being cleared  by the FDA under a 510(k) submission do not require FDA approval
for export; however,  the  Company's  products  must  still comply with certain
safety and quality system requirements in foreign countries  where the products
are proposed to be sold.

Non-compliance   with   applicable  FDA  requirements  can  result  in   fines,
injunctions, civil penalties,  recall  or seizure of products, total or partial
suspension of production, distribution,  sales and marketing, or refusal of the
FDA to grant approval of a PMA or clearance  of  a  510(k).  Actions by the FDA
might also include withdrawal of marketing approvals  and criminal prosecution.
Such  actions could have a material adverse effect on the  Company's  business,
financial condition, and results of operation.

                                      15

<PAGE>

   ENVIRONMENTAL MATTERS

The Company  has  a  California  Environmental Protection Agency Identification
number for the disposal of biohazardous waste from its research and development
biolab.  The Company does not anticipate  that  compliance  with federal, state
and  local  environmental protection laws will have a material  impact  on  the
Company or require any material capital expenditures under present regulation.

   EMPLOYEES

As of June 30,  1997,  the  Company  had 85 full time employees.  The full time
employees  were assigned to the following  areas  in  general:   administrative
support, 13;  sales  and  marketing support, 17; manufacturing 30; research and
development, 21; regulatory  and  quality  control 4. The Company also utilizes
temporary employees throughout the year to address  significant fluctuations in
orders and product manufacturing.  The Company has a  full time human resources
manager and considers its employee relations to be good.

   FINANCIAL INFORMATION ON FOREIGN SALES AND DOMESTIC  OPERATIONS  AND  EXPORT
   SALES

The Company has no foreign manufacturing operations.  For the fiscal year 1997,
foreign  sales  were  approximately $1,024,000, or fifteen percent (15%) of net
sales.  For the fiscal  year 1996, foreign sales were approximately $1,692,000,
or forty-one percent (41%)  of  net  sales  for  the  year.   See Note 5 to the
Financial  Statements  contained  in  this  report  on  Form  10-K for  further
discussion of foreign operations.

   BACKLOG

The Company's cancelable backlog at June 30, 1997 was $360,000.


I
TEM 2.  DESCRIPTION OF PROPERTIES

In July 1994, the Company leased an approximately 11,000 square  foot  facility
located  in  Rancho  Cordova,  California.   This  facility  is  used  for  the
manufacturing  assembly  of  the  Company's  medical  devices, and was upgraded
during  fiscal  1997  as  part of  the Company's efforts to  obtain   ISO  9000
certification.  In August 1997,  the Company extended that lease for 26 months,
and it will expire in January 2002.   Annual  lease expense is $52,860 for this
facility.

In  December  1996,  the  Company leased an approximately  17,400  square  foot
facility, also located in Rancho Cordova, California, which is used as the main
administrative  and sales office,  and  used  as  the  Company's  research  and
development engineering  office.   This lease expires in December 2001, and the
average annual lease expense is $147,934 for this facility.

In  May  1997,  the Company also leased  an  approximately  5,000  square  foot
facility located  adjacent  to  its  manufacturing  facility in Rancho Cordova,
California.   This  facility  is used for the manufacture  and  preparation  of
certain  components  and  parts of  the  Company's  medical  devices  that  are
assembled at the main manufacturing  facility.  The lease expires in June 2000,
and the average annual lease expense is $21,756 for this facility.

                                        16

<PAGE>

At fiscal year end, the Company did not  own or lease any other facilities and,
with the exception of short term warehouse  space leased and utilized from time
to time, management believes that current facilities  are  adequate  to  handle
current  and  expected  operations,  including  future  growth in the number of
products manufactured.


ITEM 3.  LEGAL PROCEEDINGS

The Company is not a party to any pending or threatened legal  proceedings, nor
is its property subject to any legal proceedings.

The Company's products are relied upon by medical personnel and lab technicians
as part of blood collection process from a donor, and in some instances 
treatment of a patient.  If injury were to result from the operation  of  the
equipment, the Company, along with others, may be sued and, whether or not the
Company is found liable, it may incur legal expenses associated with defending
such actions.  The  Company carries  product  liability  insurance  in  the
amount of $2,000,000 to help insulate  against  such  risk.   While management
of the Company believes that current insurance coverage is sufficient,  there 
can be no assurance that such coverage  will  ultimately be adequate to cover
liabilities  which  may  occur.  Moreover, the Company  may  be  unable to 
obtain product liability insurance in amounts and on terms that it finds
favorable.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company held its Annual Meeting  of  Stockholders  on  May  29,  1997.  The
following is a summary of the results of managements proposals submitted to the
stockholders for approval:

PROPOSAL  1                          AFFIRMATIVE   WITHHELD
Election of Directors
    Philip H. Coelho                 11,598,181    233,647
   Charles de B. Griffiths           11,643,993    187,835
   Walter J. Ludt, III               11,642,393    189,435
   Hubert Huckel                     11,643,993    187,835
   Patrick McEnany                   11,578,233    253,595

PROPOSAL  2                  AFFIRMATIVE AGAINST     ABSTAIN      NOT VOTED
Amendment to 1994
Stock Option Plan to
Increase Number of Shares     10,812,766   825,489      54,146       139,427

Based  on  the  foregoing  tabulation  of  votes,  the directors nominated were
elected and Proposal 2 was approved.  No other matters were submitted.

   EXECUTIVE OFFICERS OF THE CORPORATION

The  information concerning the Company's Officers required  by  this  Item  is
incorporated  by  reference  to the section in Part III of this report entitled
"Directors and Executive Officers of the Registrant".

                                      17

<PAGE>


                                PART II




ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
                STOCKHOLDER  MATTERS

The Company's common stock, $.001  par  value, is traded on the Nasdaq SmallCap
Market under the symbol KOOL.  The following table sets forth the range of high
and low bid prices for the Company's common stock for  the  past  two fiscal
years as reported by Nasdaq.  The ranges listed represent actual transactions,
without adjustment for retail markups, markdowns or commissions, as reported by
Nasdaq.

<TABLE>
<CAPTION>
                              HIGH{    }       LOW   {    }                                   HIGH  {(1)}      LOW[(1)]
 FISCAL 1997:                                                      FISCAL 1996:
<S>                          <C>             <C>                   <C>                      <C>               <C>
  First Quarter (Sept.30)     $4.25           $4.0625               First Quarter (Sept. 29) $2.1325           $2.125
  Second Quarter (Dec. 31)    $3.875          $3.6875               Second Quarter (Dec. 29) $1.8125           $1.625
  Third Quarter (Mar. 31)     $3.0625         $2.875                Third Quarter (Mar. 29)  $3.4375           $3.25
  Fourth Quarter (June 30)    $2.78125        $2.78125              Fourth Quarter (June 28) $4.3125           $4.0625
</TABLE>

__________

   {   (1)   }Restated  to  reflect a 1 for 2 stock consolidation effective June
            14, 1996.

The Company has not paid cash dividends on its common stock and does not intend
to pay a cash dividend in the foreseeable future.  There were approximately 525
stockholders of record on June 30, 1997.

                                     18

<PAGE>


ITEM 6.   SELECTED CONSOLIDATED FINANCIAL DATA

                                   THERMOGENESIS CORP.
                  FIVE-YEAR REVIEW OF SELECTED CONSOLIDATED FINANCIAL DATA


<TABLE>
<CAPTION>
        SUMMARY
<S>                          <C>                 <C>                <C>               <C>               <C>
     OF OPERATIONS             1997                1996              1995              1994              1993
Net sales                        $6,614,044         $4,124,634        $3,311,880        $2,678,192        $2,018,466
Cost of sales                   (4,326,964)        (1,759,659)       (2,096,116)       (1,454,727)       (1,166,523)
Gross profit                      2,287,080          2,364,975         1,215,764         1,223,465           851,943
General and
administrative                  (1,370,401)          (426,318)         (334,028)         (300,379)         (457,682)
Selling and
  marketing                     (2,143,523)        (1,173,254)         (827,269)         (781,603)         (551,645)
Research and
  development                   (3,562,280)        (1,317,330)         (446,780)         (391,794)         (153,980)
Other income                        114,372             84,847           304,017           265,028            64,555
Other expense                     (131,070)          (101,454)                 -           (3,471)          (14,213)
Net loss                       ($4,805,822)         ($568,534)         ($88,296)           $11,246        ($261,022)
Net loss per share                  ($0.32)            ($0.05)           ($0.01)             $0.00           ($0.02)
</TABLE>




<TABLE>
<CAPTION>
   BALANCE SHEET DATA          1997             1996             1995             1994             1993
<S>                          <C>              <C>              <C>              <C>              <C>
Cash                           $3,510,861       $1,243,079      $   325,965       $  347,769       $  236,539
Working capital                 6,407,237        3,589,057        1,413,156        1,438,579        1,222,908
Total assets                   10,187,726        5,937,140        2,662,839        2,500,399        2,290,398
Total liabilities               2,163,084        1,562,829          662,256          429,762          328,332
Long-term debt                    164,283          282,919               --               --               --
Total shareholders'
  equity                        8,024,642        4,374,311        2,000,583        2,070,637        1,962,066
</TABLE>


                                              19

<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                RESULTS OF OPERATIONS

CERTAIN STATEMENTS CONTAINED IN THIS SECTION AND OTHER PARTS OF THIS  REPORT ON
FORM 10-K WHICH ARE NOT HISTORICAL  FACTS  ARE  FORWARD-LOOKING STATEMENTS THAT
ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES.   THE  COMPANY'S ACTUAL RESULTS
MAY DIFFER SIGNIFICANTLY FROM THE PROJECTED RESULTS DISCUSSED  IN  THE FORWARD-
LOOKING STATEMENTS.  FACTORS THAT MIGHT AFFECT ACTUAL RESULTS INCLUDE,  BUT ARE
NOT  LIMITED  TO, THOSE DISCUSSED IN THE SUBSECTION ENTITLED "FACTORS AFFECTING
OPERATING RESULTS  AND  MARKET PRICE OF COMMON STOCK" BEGINNING ON PAGE 25, AND
OTHER FACTORS IDENTIFIED  FROM TIME TO TIME IN THE COMPANY'S REPORTS FILED WITH
THE U.S. SECURITIES AND EXCHANGE COMMISSION.

The following discussion should  be  read  in  conjunction  with  the Company's
financial statements contained in this report.

(A) OVERVIEW

The  Company's  core business is the sale of ultra-rapid blood plasma  freezing
and thawing systems.   Including  the  April  1997 FDA permission to market the
Hemo-Matic blood collection monitor, the Company has FDA permission to market a
total of five Core Line medical devices.  The Company's  primary  revenues have
been  from  sales  of  its  Core Line Products to blood banks and blood  plasma
thawers to hospitals and transfusion  centers.   In  addition  to  blood plasma
thawers  and  freezers,  the  Company received minor revenues from the sale  of
related blood processing products in the same market.  These Core Line Products
have been purchased during past  years  by  major  blood  banks in more than 32
countries.  All core line products are FDA Class I medical devices purchased as
capital equipment.

At the start of fiscal 1996 (July 1995), management initiated a three-year plan
to develop the new category of Pipeline Products, each of which  would  require
consumable  disposable  components,  and  each of which will compete in markets
where annual revenues exceed $100 million.   These  new Pipeline Products would
all be based on the Proprietary Technology developed  and  refined  during  the
previous seven years.

In  contrast to the Company's Core Line Products, the new Pipeline products are
all FDA  Class II products which feature a sophisticated thermodynamic platform
device and  one or more sterile, disposable plastic blood processing containers
and/or applicators  which  will be utilized and replaced every time the systems
are operated - thereby potentially  providing  a continuing revenue stream from
each  use  or  therapeutic application of each system  sold.   Upon  regulatory
approval, the Company  intends  that  these  Pipeline  Products will be sold to
hospitals,  surgicenters,  wound  care  centers,  tissue banks  and  transplant
centers.

(B) RESULTS OF OPERATIONS

   THE YEARS ENDED JUNE 30, 1996 AND 1997:

The following is Management's discussion and analysis  of  certain  significant
factors  which  have affected the Company's financial condition and results  of
operations  during   the   periods   included  in  the  accompanying  financial
statements.

                                      20

<PAGE>

To design, manufacture and market the  Company's  new  pipeline products to GMP
and  ISO  9000  series standards, the Company needed to undergo  a  significant
upgrading throughout its facilities and organization.  In order to provide some
indication of how  the  costs  of  upgrading  for the new FDA Class II Pipeline
Products have impacted its financial statements,  the  Company has prepared the
following information related to its fiscal 1996 and fiscal  1997 Statements of
Operations by Core Line and Pipe Line Products:




<TABLE>
<CAPTION>
                                      FISCAL 1996{ (1)} (unaudited)
                   Core                      Pipeline              Total
                   Products                    Products
<S>                <C>           <C>            <C>               <C>
       Total        Expenses:
                    G & A           (426,318)                        (426,318)
                    S & M         (1,173,254)                       (1,173,254)
                    R & D           (123,739)     (1,193,591)       (1,317,330)
</TABLE>







<TABLE>
<CAPTION>
                                     FISCAL 1997{(1)} (unaudited)
                                      Core                      Pipeline
                                      Products                  Products              Total
<S>                 <C>              <C>                         <C>                  <C>
                    Expenses:
                    G & A             (447,634)                   (922,767)            (1,370,401)        S & M
                    S & M             (1,208,452)                 (935,071)            (2,143,523)        R & D
                    R & D              (198,395)                  (3,363,885)          (3,562,280)
</TABLE>


    {(1)    }Where   actual   data  was  not  recorded,  management  has   made
            appropriate  estimates   based   on  a  consistent  treatment  with
            historical information from the available data.

   SALES AND REVENUES:

Net sales increased from fiscal 1995 to fiscal 1996 by 25%. This sales increase
was  primarily  due  to  increased sales of human  blood  plasma  freezers  and
$400,000 for a license fee.

Net sales increased from fiscal  1996  to  fiscal  1997  by  60% primarily from
similar increases in human blood plasma freezer sales.

   COST OF SALES:

The decrease in cost of sales as a percent of sales from 63% in  fiscal 1995 to
47%  before license fees in fiscal 1996 is primarily attributable to  increased
production   efficiencies  as  the  Company  increased  inventory  levels  from
approximately  $1,014,000  in  1995 to $2,137,000 in 1996 and a 36% increase in
freezer sales which have a higher gross margin than other Company products.

                                      21

<PAGE>

The increase in cost of sales as  a percent of sales from 47% in fiscal 1996 to
65% in fiscal 1997 was primarily attributable  to  increases  in  manufacturing
overhead and lower than anticipated margins on the Company's $4 million sale to
a single customer, due principally to additional installation costs,  partially
caused   by   unexpected  failures  of  vendor-supplied  condensing  units  and
compressors for these installations of  the  Company's   largest   blood
plasma  freezer  systems.   In  addition, manufacturing added new expanded 
facilities and added expanded quality control and document control functions
in anticipation  of producing the BioArchive and CryoSeal Class II FDA products.

The  Company  has  sometimes  used discount programs  to  induce  customers  to
purchase the Company's freezers  over  competing freezers. The Company plans to
continue these programs only as long as market conditions dictate such programs
are  necessary.   The  Company  is  not aware  of  any  specific  industry-wide
practices utilizing discount programs.  Sales  discounts  for  fiscal 1997 were
approximately  $288,000,  for  fiscal 1996 were approximately $6,000,  and  for
fiscal 1995 were approximately $278,000.

   GENERAL AND ADMINISTRATIVE EXPENSES:

This expense category includes Business  Development,  Finance,  Administration
and General Support departments.

General and administrative expenses increased in fiscal 1996 by 28%  over those
of  fiscal 1995.  While general and administrative expenses increased in  total
dollars,  they  remained  fairly  constant  at approximately 10% of sales. This
increase was due to increased salaries for temporary  personnel. Administrative
expenses in fiscal 1995 and 1996 include approximately $55,000 for amortization
of prepaid royalties and professional fees of approximately  $67,000 for fiscal
1995 and $107,000 for fiscal 1996.

Fiscal 1997 general and administrative expenses increased by 221% over those of
fiscal 1996.  This increase was due to expansion of facilities  and  management
required  of  a  company  preparing  to manufacture and market Class II medical
systems, such as the BioArchive and CryoSeal  Systems.  With  the addition of a
human resources department and business development department,  as well as the
full  allocation  of  the  salaries  for  President/CEO  and Vice President/COO
instead  of  partially allocating them to the R&D department  and  the  Sale  &
Marketing department,  the  fiscal  1997  general  and  administrative salaries
increased more than 400% over those of fiscal 1996.  In addition,  professional
fees for management information systems and other management services increased
by approximately $230,000 in fiscal 1997 over fiscal 1996.

   SELLING AND MARKETING EXPENSES:

This   expense  category  includes  Sales  &  Marketing  and  Customer  service
departments.

Fiscal 1996  selling  and  marketing  expenses  increased  by 42% over those of
fiscal 1995.  This increase was due to increased salaries from  added personnel
as sales volume increased.  Selling and marketing  and $95,000 for professional
fees,  $147,000  and  $49,000 for sales promotions, and provision for  doubtful
accounts of $25,000 and $23,000.

Selling and marketing expenses  increased  in  fiscal  1997  by 83% over fiscal
1996. Increases were due to an 88% increase in salaries to add new personnel to
plan  and implement the market introduction of the N{2} BioArchive  System  and
the CryoSeal System, and addition of personnel for customer service to meet the
needs of  the  new  products. The Company also added new expanded facilities to
meet  the growth needs  of  the  added  personnel.  Additionally,  the  Company
incurred  $250,000  for market research associated with the introduction of the
CryoSeal System.

                                      22

<PAGE>

   RESEARCH AND DEVELOPMENT EXPENSES:

This expense category includes R&D, Regulatory Affairs and Manufacturing 
Engineering departments.

Research and development expenses increased in  fiscal  1996 by 195% over
fiscal 1995.  The increase was
due to increases in development efforts for the CryoSeal System, which harvests
fibrinogen-rich cryoprecipitate  from a donor's blood plasma, a blood component
that is currently licensed by the FDA for the intravenous treatment of clotting
protein-deficient  patients.  Fiscal   1996  R&D  expenses  also  included  the
development  and  FDA  510(k)  filing  for the  CryoSeal,  DA-1  surgical  drop
applicator and SA-1 spray applicator, for  which  FDA  permission to market was
received. Additionally, significant resources were dedicated  to accelerate the
development  of  two  BioArchive  Systems: (1) N{2} BioArchive System  for  the
storage and preservation of biological  samples,  such  as  placental  stem and
progenitor  cells,  sperm  cells  and  cell  lines which require -196*C storage
temperatures, and (2) Vial BioArchive System for  the  storage and preservation
of 6 ml vials of blood samples for the Japanese Red Cross.   Field  trials  for
the Vial BioArchive System began in Japan in October 1996 with the installation
of a beta site system at Hokkaido Center, Japanese Red Cross.  Additionally,  a
beta  site N{2} BioArchive System was installed in October 1996 at The New York
Blood Center  to investigate the freezing and storage in nitrogen of 25 ml stem
cell  donations   sourced  from  placental  blood.   In  conjunction  with  the
development of the  N{2}  BioArchive  System  as  an optimum storage system for
placental  stem  and  progenitor cells, the Company has  also  developed  three
sterile  disposable bag  sets  for  use  in  the  collection,  processing,  and
transfusing of PCB stem cells which will be stored in the BioArchive System.

This  increased  development  activity  necessitated  expenses,  increases  for
compensation,   consulting,    depreciation  for  state  of  the  art  computer
equipment, and purchases of supplies.

Research and development expenses  increased in fiscal 1997 by 170% from fiscal
1996.  This  reflects  substantially  accelerated   development  of  the  above
projects. At fiscal 1997 year end, the Company: (i) had delivered five Japanese
Vial BioArchive Systems in January 1997 for expanded  field  trials  in Hokaido
which are currently under way, (ii) began the first pre-production run  of  the
CryoSeal  System  and is currently awaiting FDA permission to market the device
in the United States,  (iii)  began  clinical  trials of the CryoSeal System in
Canada and the United States, (iv) arranged for trial of the CryoSeal System in
Sweden  and Italy to initiate European distribution,  (v)  completed  prototype
development  of  the  N{2}  BioArchive  System and began a production run, (vi)
received orders for four N{2} BioArchive  Systems,  (vii)  began  preparing the
510(k) for the N{2} BioArchive System.

This  increased  development  and  product launch activity in 1997 led  to  the
addition of new facilities and engineering  staff,  as  well as the hiring of a
Vice President of Regulatory Affairs and Quality Systems.

Currently  the  Company's  primary R&D efforts are focused on  ongoing  product
development, refinement,  of  existing  Core  Line Products, preparation of FDA
applications for the pipeline products, and clinical  tests of the CryoSeal and
BioArchive Systems.

Management  believes that product development and refinement  is  essential  to
maintaining the  Company's  market  position.  Therefore, the Company considers
these costs as continuing costs of doing business.  No  assurances can be given
that the products or markets under development will be successful.

                                     23

<PAGE>

   ISSUANCE OF STOCK OPTIONS FOR SERVICES:

In  fiscal  year  1996,  the  Company  recorded $60,000 for consulting  expense
relating to the issuance of stock options  with  exercise  prices  equal to the
market value on the date of grant for financial consulting services  to BioVest
Research,  Inc.  While  the  $60,000 is a non-monetary transaction, the Company
recorded  the  estimated  "fair  value"  under  generally  accepted  accounting
principles.  BioVest assists the Company  in  financial  public  relations  and
potential equity investments.

In fiscal year  1997,  the  Company  recorded  $56,000  of  consulting  expense
relating  to  the  issuance  of stock options with exercise prices equal to the
market value on the date of grant for technical assistance from two researchers
in Canada and the United States  for  the  development  of the CryoSeal System.
While  the  $56,000  is  a non-monetary transaction, the Company  recorded  the
estimated "fair value" under generally accepted accounting principles.

(C) LIQUIDITY AND CAPITAL RESOURCES

The Company consumed significant  cash resources for operating activities since
its formation in 1987 primarily in developing new products and markets.

During fiscal 1994, the Company realized the benefits of its product and market
developments. Freezer sales increased by 36% and plasma thawing equipment sales
increased by 62% as the Company achieved  profitable  operations. During fiscal
1995 and 1996, the Company's sales continued to expand, growing by 24% and 25%,
respectively.  The  Company began development of new generation  products  (see
Research and Development  expenses) and consumed more resources, which resulted
in losses for fiscal 1995 and 1996.

In  fiscal  1997,  the  Company   raised  net  proceeds  in  the  aggregate  of
approximately $7,882,000 from a warrant  exercise  and a private placement. The
Company  used the proceeds to expand the Company's facilities,  regulatory  and
manufacturing  control  functions,  and  to  fund  continued R&D.  Although the
Company believes that Core Line product operations might  have  resulted  in  a
nominal  profit  if R&D expenses and marketing expenses associated with the new
FDA Class II Pipeline  Products  were eliminated, the Company believes that the
significantly increased expenses for  the  new  Pipeline  Products,  which  are
directed at new and larger markets, is essential to future growth and long term
profitability of the Company.  Accordingly, management believes that the losses
sustained in the current fiscal year ended are consistent with the prospect for
future growth and the Company's movement towards new, larger markets.

The Company does not require extensive capital equipment to produce or sell its
current  product.  However, when significant capital equipment is required, the
Company purchases from  a  vendor  base  or  is  pursuing  strategic  partners.
Production  of the Company's blood plasma freezer and thawer products are  more
labor intensive  due to the small production runs and, therefore, manufacturing
expenditures for can  expanding the Company's R&D efforts for fiscal year 1996,
the Company expended approximately  $450,000  on  state  of the art engineering
design computer systems for its expanded engineering staff. In fiscal 1997, the
Company expended $873,000 for the purchase of capital equipment  and  expansion
of facilities for operations.

                                       24

<PAGE>

The  Company continues to search for further funding and new products that  may
provide  future  growth  opportunities  and  is  currently evaluating financing
options to provide working capital to fund expected  growth in fiscal 1998. The
Company has no significant outstanding capital commitments at June 30, 1997.

Currently, the Company is contemplating additional equity financing to fund the
product launch of two  Pipeline Products, (1) CryoSeal  System,  (2)  N{2}  and
Vial  BioArchive  Systems,  and  the  further research and development of three
Pipeline  Products:  (1)  CryoFactor System,  (2)  MicroSeal  System,  and  (3)
CryoPlatelet System.  There  can  be no assurances that adequate financing will
be available on satisfactory terms, if at all.

Working capital increased from $1,413,156  at  June  30,  1995 to $3,589,057 at
June 30, 1996 primarily due to equity investments and financing  of fixed asset
purchases.

Working  capital  increased  from $3,589,057 at June 30, 1996 to $6,407,237  at
June 30, 1997 primarily due to  equity investments from warrant conversions and
a private placement which raised a combined total of $7,882,000.

Management does not believe that  inflation has had a significant impact on the
Company's results of operations.

(D) FACTORS AFFECTING OPERATING RESULTS AND MARKET PRICE OF COMMON STOCK

DEPENDENCE UPON NEW PRODUCTS FOR FUTURE  GROWTH.   Historically,  substantially
all of the Company's revenue has been from the sales of a Core Line of products
which  freeze,  thaw  or store blood plasma.  Because the Company expects  this
portion of the blood plasma  market  to have limited growth, the future success
of the Company will be dependent upon  new applications of its technology.  The
Company intends to concentrate on developing  and  marketing novel FDA Class II
thermodynamic blood processing systems such as:  (1)  CryoSeal System; (2) Vial
BioArchive  System;  (3)  N{2}  BioArchive System; (4) Cryofactor  System;  (5)
Cryoplatelet System.   Although these  five  potential  products use technology
evolved from the freezing, thawing and storage of blood plasma,  development of
these  new  FDA  Class  II  products  represents a departure from the Company's
current core business.  No assurance can  be  given that all of these potential
products can be successfully developed, and if  developed,  that  a market will
develop for them.

POSSIBLE  NEED FOR ADDITIONAL FINANCING.  Based on current sales and  projected
development  costs  for products currently in development, the Company believes
that it will have sufficient  working  capital  for its operations for the 1998
fiscal year.  In the event actual sales of the Company's  products  do not meet
the  Company's  expectations in any given period, or development and production
costs  increase significantly,  the  Company  may  need  to  secure  additional
financing to complete and fully implement its business objectives.  The Company
has been  establishing  a  working  relationship  with its bank, and is working
towards  securing a line of credit secured by its accounts  receivable.   There
can be no  assurance  that the Company will be able to obtain a working line of
credit or that it will  be able to obtain one on terms that would be beneficial
to the Company.  In the event that the Company's working capital forecast falls
short of its needs, additional equity financing would be reuired. Although the
Company is developing relationships
with investment banking firms,  no  assurance  can be given that such financing
would be available if needed, and if available,  that  it  will  be obtained on
terms favorable to the Company.

                                      25

<PAGE>

LACK  OF  TESTING DATA.  The Company has completed certain in vitro  laboratory
testing of its CryoSeal System and is currently performing in vivo clinicals in
otolaryngology  under  Investigational  Review  Board  ("IRB")  approval at the
University of Illinois, Chicago, and initial clinical studies are  to  begin in
the  near future in Italy, Japan, Canada, and the United States.  There can  be
no assurance that the clinical studies can be successfully completed within the
Company's  expected  time frame and budget, or that the Company's products will
prove effective in the  required  clinical trials.  If the Company is unable to
conclude successfully the clinical  trials  of its products in development, the
Company's  business,  financial condition and results  of  operation  could  be
adversely affected.

GOVERNMENT REGULATION ASSOCIATED  WITH PRODUCTS.  The majority of the Company's
products require clearance to market from the FDA for sale in the United States
and  from  comparable  agencies  in  foreign  countries,  which  may  limit  or
circumscribe applications for U.S. or  foreign  markets  in which the Company's
products  may  be  sold.   Further,  if the Company cannot establish  that  its
product is substantially equivalent, or  superior,  in safety and efficacy to a
previously approved product in the United States, delays  may  result  in final
clearance  from the FDA for marketing its products.  No assurance can be  given
that FDA clearance  to  market  in  the United States will be obtained, or that
regulatory approval will be received  in  all foreign countries.   Although the
standards established by the FDA are generally more encompassing, the Company's
products  may also be required to meet certain  additional  criteria  or  recen
governments for marketing and sales.

Dependence on Key Personnel and Obtaining Additional Engineering Personnel.
The Company is dependent on the experience and services of Philip H. Coelho,
President and  Chief  Executive  Officer,  and  Charles  de  B. Griffiths, Vice
President, Marketing and Sales and Walter Ludt, Chief Operating  Officer.   The
loss  of  any of these persons would adversely affect the Company's operations.
The Company  has  obtained  key  man  life insurance covering Mr. Coelho in the
amount of $1,000,000 as some protection  against  this  risk.   Furthermore, to
implement  its  new  product development, the Company will have to recruit  and
retain additional experienced  engineers.   There  is  no  assurance  that  the
Company  will  be  able to find and retain engineers required to meet its self-
imposed deadlines for product development.

                                    26

<PAGE>


I
TEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                                                PAGE NUMBER


    Report of Ernst & Young LLP, Independent Auditors..                 28

    Balance Sheets at June 30, 1997 and 1996...........                 29

    Statements of Operations for the years
     ended June 30, 1997, 1996, and 1995 ..............                 31

    Statements of Shareholders' Equity for
     the years ended June 30, 1997, 1996 and 1995.....                  32

    Statements of Cash Flows for the
     years ended June 30, 1997, 1996 and 1995.........                  33

    Notes to Financial Statements....................                   34







                                  27

<PAGE>



        REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS



The Board of Directors and Shareholders
THERMOGENESIS CORP.

We  have  audited  the accompanying balance sheets of THERMOGENESIS CORP. as of
June 30, 1997 and 1996, and the related statements of operations, shareholders'
equity, and cash flows for each of the three years in the period ended June 30,
1997. Our audits also  included  the financial statement schedule listed in the
Index  at  Item  14(a)2.   These financial  statements  and  schedule  are  the
responsibility of the Company's  management.   Our responsibility is to express
an opinion on these financial statements and schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally  accepted  auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable  assurance  about  whether  the  financial statements  are  free  of
material misstatement. An audit includes examining,  on  a test basis, evidence
supporting the amounts and disclosures in the financial statements.   An  audit
also   includes  assessing  the  accounting  principles  used  and  significant
estimates  made  by  management,  as  well  as evaluating the overall financial
statement presentation.  We believe that our  audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred  to  above present fairly, in
all material respects, the financial position of THERMOGENESIS  CORP.  at  June
30,  1997  and  1996,  and the results of its operations and its cash flows for
each of the three years  in  the period ended June 30, 1997, in conformity with
generally accepted accounting  principles.   Also,  in our opinion, the related
financial  statement  schedule,  when  considered  in  relation  to  the  basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.


                                                      ERNST & YOUNG LLP

Sacramento, California
August 27, 1997








                                         28

<PAGE>

                              THERMOGENESIS CORP.
                                Balance Sheets


<TABLE>
<CAPTION>
ASSETS                                            JUNE 30, 1997                      JUNE 30, 1996
Current Assets:
<S>                                               <C>                                 <C>
   Cash and cash equivalents                      $3,510,861                          $1,243,079
   Accounts receivable, net of allowance for
   doubtful accounts of $97,913                    2,067,990                             1,441,148
    Inventory                                      2,579,368                             2,137,198
    Other current assets                              247,819                                 44,177
         Total current assets                       8,406,038                            4,865,602
   Equipment, at cost less accumulated depreciation
   of $670,269 ($413,644 at June 30, 1996)           1,358,747                              709,790
   Prepaid royalties, net of accumulated
   amortization of $388,185 ($332,733 at June        166,315                             221,767
   30, 1996)
   Other assets                                       256,626                             139,981
                                                  $10,187,726                           $5,937,140
</TABLE>






                            See accompanying notes.

                                     29

<PAGE>

                              THERMOGENESIS CORP.
                          Balance Sheets (Continued)



LIABILITIES AND

<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY                           JUNE 30, 1997                       JUNE 30, 1996
Current liabilities:
<S>                                             <C>                                 <C>
  Accounts payable and accrued liabilities       $1,523,647                          $931,944
  Accrued payroll and related expenses               274,008                          184,660
  Customer deposits                                    49,310                           35,891
  Current portion of capital lease obligations        151,836                          124,050
         Total current liabilities                   1,998,801                         1,276,545
Deferred rent                                             -                                3,365
Long term capital lease obligations                    164,283                         282,919
Commitments
Shareholders' equity:
Preferred stock, $.001 par value;
    2,000,000 shares authorized; no shares
    issued and outstanding                                   -                                  -
Common stock, $.001 par value;
     50,000,000 shares authorized:
      15,865,305 issued and outstanding
      (12,708,967 at June 30, 1996)                       15,866                           12,709
Paid in capital in excess of par                      19,197,526                          10,744,530
Accumulated deficit                                  (11,188,750)                         (6,382,928)
  Total shareholders' equity                           8,024,642                           4,374,311
                                                      $10,187,726                         $5,937,140
</TABLE>





                            See accompanying notes.
                                      30

<PAGE>

                              THERMOGENESIS CORP.
                           Statements of Operations


                               Years ended June 30,

<TABLE>
<CAPTION>
                                          1997                       1996                   1995
Net sales                                 $6,614,044                 $4,124,634              $3,311,880
<S>                                       <C>                        <C>                     <C>
Cost of sales                              4,326,964                   1,759,659              2,096,116
        Gross profit                       2,287,080                   2,364,975              1,215,764
Development and distribution fees                 -                       60,000               280,000
Expenses:
      General and administrative           1,370,401                        426,318              334,028
      Selling and marketing                2,143,523                     1,173,254                827,269
      Research and development             3,562,280                     1,317,330                446,780
      Issuance of stock options for           56,000                        60,000                   -
        services
      Interest                                75,070                         41,454                   -
         Total expenses                    7,207,274                      3,018,356               1,608,077
Interest income                               114,372                        24,847                 11,498
Other income                                      -                               -                 12,519
Net loss                                   ($4,805,822)                      ($568,534)              ($88,296)
Net loss per share                             ($0.32)                        ($0.05)               ($0.01)
Shares used in computing net loss per       14,805,000                      11,491,000             10,170,000
share
</TABLE>




                            See accompanying notes.
                                      31

<PAGE>
                              THERMOGENESIS CORP.
                      Statements of Shareholders' Equity



<TABLE>
<CAPTION>
                                                     Paid in capital in    Accumulated       Total shareholders'
                             COMMON STOCK            EXCESS OF PAR         DEFICIT                EQUITY
Balance at June 30, 1994          $10,166              $7,786,569           $ (5,726,098        $2,070,637
<S>                               <C>                  <C>                  <C>                 <C>
Issuance of 10,000 common shares
for exercise of options               10                10,590                 -                 10,600
Issuance of 2,352 common shares
for patent services                    2                 7,640                -                   7,642
Net loss                               -                      -               (88,296)            (88,296)
Balance at June 30, 1995             10,178             7,804,799             (5,814,394)          2,000,583
Issuance of 5,000 common shares
for exercise of options                5                  5,295                   -                  5,300
Issuance of 2,200,000 common
shares in private placement           2,200              1,896,012                -                 1,898,212
Issuance of 326,250 common
shares for exercise of warrants         326               978,424                  -                 978,750
Issuance of options for services          -                60,000                    -                 60,000
Net loss                                  -                  -                  (568,534)             (568,534)
Balance at June 30, 1996                12,709            10,744,530            (6,382,928)            4,374,311
Issuance of 217,500 common
shares for exercise of warrants            218             607,318                    -                607,536
Issuance of 37,250 common shares
for exercise of options                     37              73,783                   -                 73,820
Issuance of 145,586 common
shares for inventory                        146            444,151                     -                444,297
Issuance of 2,756,002 common
shares in private placement                2,756           7,271,744                       -             7,274,500
Issuance of options for services               -             56,000                     -               56,000
Net loss                                        -               -             (4,805,822)                (4,805,822)
Balance at June 30, 1997           $      15,866       $19,197,526          $(11,188,750)             $8,024,642
</TABLE>



                            See accompanying notes.
                                      32

<PAGE>

                              THERMOGENESIS CORP.
                           Statements of Cash Flows


<TABLE>
<CAPTION>
                                                                  Years ended June 30
<S>                                             <C>                    <C>                     <C>
                                                 1997                   1996                    1995
Cash flows from operating activities:
   Net loss                                      ($4,805,822)            ($568,534)              ($88,296)
    Adjustments to reconcile net loss to net
    cash (used in) provided by operating
    activities:
       Depreciation and amortization                    312,077             190,356               162,811
       Issuance of common stock for inventory           444,297                    -                     -
       Issuance of stock options for services             56,000               60,000                    -
       Net changes in operating assets and
       liabilities:
           Accounts receivable                         (626,842)            (790,908)             198,912
           Allowance for doubtful accounts                   -                  25,000              14,458
           Inventory                                   (442,170)          (1,122,889)              (460,222)
           Other current assets                        (203,642)               (34,466)              34,235
            Other assets                               (116,645)                     497            (37,496)
            Accounts payable and accrued                591,703                419,013              199,514
            liabilities
           Accrued payroll and related expenses           89,348               129,314                 (7,320)
           Customer deposits                              13,419                 16,368              (34,156)
           Deferred revenue                                   -                 (60,000)               60,000
           Deferred rent                                  (3,365)                (11,091)              14,456
      Net cash (used in) provided by operating        (4,691,642)              (1,747,340)                56,896
       activities
Cash flows from investing activities:
     Capital expenditures                              (873,582)                (152,547)            (141,942)
     Sale of investment                                        -                           -                   45,000
         Net cash used in investing activities         (873,582)                (152,547)               (96,942)
Cash flows from financing activities:
    Principle payments on long-term lease              (122,850)                  (65,261)                 -
obligations
    Exercise of stock options and warrants              681,356                       -                    -
    Issuance of common stock                          7,274,500            2,882,262                  18,242
       Net cash provided by financing activities      7,833,006            2,817,001                  18,242
Net increase (decrease) in cash and cash              2,267,782               917,114                (21,804)
equivalents
Cash and cash equivalents at beginning of period      1,243,079               325,965                347,769
Cash and cash equivalents at end of period           $3,510,861             $1,243,079              $325,965
Supplemental cash flow information:
 Cash paid during year for interest
       Cash paid during the year for interest           $75,070               $41,454                    -
Supplemental non-cash flow information:
 Equipment acquired by capital lease obligations
        Equipment acquired by capital lease               $32,000            $472,000                    -
        obligations
</TABLE>

                            See accompanying notes.
                                     33

<PAGE>
                          THERMOGENESIS CORP.

                     NOTES TO FINANCIAL STATEMENTS


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS

THERMOGENESIS  CORP.  ("the Company") was incorporated in Delaware on September
26, 1986. The Company designs  and  sells devices which utilize its proprietary
technology  for  the  processing  of  biological   substances   including   the
cryopreservation,  thawing  and  harvesting  of  blood  components (Proprietary
Technology). Currently, the Company is manufacturing six core line, FDA Class I
thermodynamic  devices  which  are being sold to the blood collection  industry
with FDA approval. Other potential  applications  for  the  technology  include
medical  and  pharmaceutical  uses,  and industrial applications. During fiscal
1988 through 1997, the Company has focused  on  refining  product design of the
core line Products and developing a pipeline of five FDA Class II devices which
utilize sterile disposable containers for processing of blood components.

USE OF ESTIMATES

The preparation of financial statements in conformity with  generally  accepted
accounting  principles  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 period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The  Company  considers all highly liquid investments with an original maturity
of three months or less to be cash equivalents.

INVENTORY

Inventory is stated  at  the  lower  of cost or market and includes the cost of
material, labor and manufacturing overhead.   Cost  is determined on the first-
in, first-out basis.

EQUIPMENT

Depreciation is computed under the straight-line method  over  the useful lives
of 3 to 5 years.

PREPAID ROYALTIES

Prepaid  royalties  are  amortized  on a straight line basis over an  estimated
useful life of 10 years.

REVENUE RECOGNITION

Revenues from the sale of the Company's  products are recognized at the time of
shipment.  All foreign sales are denominated in U.S. dollars.


                                         34


<PAGE>

                          THERMOGENESIS CORP.
               NOTES TO FINANCIAL STATEMENTS (Continued)


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

CREDIT RISK

The Company manufactures and sells thermodynamic  devices  principally  to  the
blood  component  processing  industry  and performs ongoing evaluations of the
credit  worthiness  of  its  customers.  The  Company  believes  that  adequate
provisions  for  uncollectible  accounts have been  made  in  the  accompanying
financial statements.

INCOME TAXES

The  liability method is used for  accounting  for  income  taxes.  Under  this
method, deferred tax assets and liabilities are determined based on differences
between the financial reporting and tax bases of assets and liabilities and are
measured  using  the enacted tax rates and laws that will be in effect when the
differences are expected  to reverse.  The Company uses the flow-through method
to account for income tax credits.

NET LOSS PER SHARE

Net loss per share is computed by dividing the net loss by the weighted average
number of common shares outstanding.   Common  stock  equivalents have not been
included because the effect would be anti-dilutive.

In February 1997, the Financial Accounting Standards Board issued Statement No.
128,  "Earnings  per Share" (SFAS 128), which is effective  for  the  Company's
fiscal year ending  June  30, 1998.  At that time, the Company will be required
to change the method currently  used  to  compute  net  income per share and to
restate  all  prior  periods.   Under SFAS 128, the dilutive  effect  of  stock
options and warrants will be excluded  in  the  calculation of primary or basic
earnings per share.  The adoption of SFAS 128 is  expected to have no impact on
the net loss per share for the years ended June 30, 1997, 1996, and 1995.

STOCK-BASED COMPENSATION

Statement  of Financial Accounting Standards No. 123,  "Accounting  for  Stock-
Based Compensation"  (SFAS  123),  was  issued in October 1995.  SFAS 123 gives
companies the option to adopt the fair value  method for expense recognition of
employee stock options and stock-based awards or,  as  the Company has elected,
to  continue  to  account for such items using the intrinsic  value  method  as
outlined under Accounting  Principles  Board  Opinion  No.  25, "Accounting for
Stock Issued to Employees" (APB 25).  Consequently, the adoption  of  SFAS  123
did  not  have any impact on the financial position or results of operations of
the Company  but  pro forma disclosures of net loss and net loss per share have
been provided in Note 4 as if the fair value method had been applied.

RECLASSIFICATIONS

Certain amounts in  the prior years financial statements have been reclassified
to conform with the
1997 presentation.


                                   35

<PAGE>

                          THERMOGENESIS CORP.
               NOTES TO FINANCIAL STATEMENTS (Continued)

2.  INVENTORY

Inventory consisted of the following at June 30:


<TABLE>
<CAPTION>
                                         1997                  1996
<S>                                      <C>                    <C>
Raw materials                               $1,574,388            $1,158,108
Work in process                                525,067               117,271
Finished goods                                 479,913               861,819
Total                                       $2,579,368            $2,137,198
</TABLE>


3. COMMITMENTS

ROYALTY COMMITMENT

In July 1990 the Company  acquired the Proprietary Technology including but not
limited to all patents, drawings,  know-how,  trademarks  and  trade  names and
prepaid  all  future royalties for a total consideration which was recorded  at
$554,500. This  amount  represents  the  present  value  of  the future royalty
payment obligation. The consideration was comprised of $50,000 cash, a 10% four
year  convertible note for $200,000 and 900,000 shares of the Company's  common
stock.  The  transaction  has  been  accounted  for  as  a prepayment of future
royalties  and is being amortized on a straight line basis  over  an  estimated
useful life of 10 years.

OPERATING LEASES

The Company  leases  its  manufacturing  and  corporate  facilities and certain
equipment  pursuant  to  operating leases. The annual future  cash  obligations
under these leases are as follows:


1998                                $244,542
1999                                 224,634
2000                                 201,191
2001                                 182,580
2002                                  97,890
Total                               $950,837


Rent expense was $221,986,  $78,587  and  $53,560  for the years ended June 30,
1997, 1996 and 1995.

                                        36

<PAGE>

                          THERMOGENESIS CORP.
               NOTES TO FINANCIAL STATEMENTS (Continued)


3. COMMITMENTS (CONTINUED)

CAPITAL LEASES

The  Company  leases  certain  equipment under capital leases.   The  following
amounts are included in equipment  as  assets  under these capital leases as of
June 30:


                                              1997               1996

Cost                                         $526,713            $494,713
Less: accumulated amortization                119,587              71,038
Net assets under capital leases              $407,126            $423,675


The future minimum lease payments under these capital  leases  along  with  the
present value of the minimum lease payments as of June 30, 1997 are as follows:


1998                                                             $195,346
1999                                                              142,928
2000                                                               38,993
2001                                                               37,336
2002                                                                2,349
Total minimum lease payments                                      416,952
Less amount representing interest                                 100,833
Present value of minimum lease payments                           316,119
Less current portion of capital lease                             151,836
obligations
Long-term capital lease obligations                              $164,283






                                        37


<PAGE>

                          THERMOGENESIS CORP.
               NOTES TO FINANCIAL STATEMENTS (Continued)


4. SHAREHOLDERS' EQUITY

Common Stock

The Company completed a minimum equity offering of units in a private placement
on  November  27,  1996,  in  which  it received proceeds of $7,274,500, net of
expenses.  The proceeds from the offering  were   received  from  the  sale  of
1,378,001 units at $6.00 per unit.  Each unit consisted of two shares of common
stock and a seven year warrant representing the right to acquire one additional
share  of  common  stock at an exercise price of $3.885 per share.  No warrants
have been exercised as of June 30, 1997.

On July 30, 1996, the  Company  entered  into  an  agreement  with  a vendor to
produce  up  to $2,500,000 of product for the Company. Under the terms  of  the
agreement, the  vendor  can elect to receive payment in restricted common stock
of the Company at a 25% discount from the market price on the date the election
to receive stock is made. During fiscal 1997, the Company issued 145,586 shares
of common stock for this  product.   The Company recorded these transactions at
the  estimated  fair value of $444,297 on  the  date  of  the  transaction  and
recorded the 25% discount from market price as operating expense.   The Company
is not obligated to purchase product that is not required or at a price that is
not competitive and built to all required standards.

On May 29, 1996,  the  Company's  Board  of  Directors  approved  to  amend the
Certificate of Incorporation to effect a one-for-two reverse stock split  which
was  effective  on  June  14,  1996 to holders of record on June 14, 1996.  The
authorized shares of common stock  was  unchanged  and  remained at 50,000,000.
All  share and per share data have been restated for all periods  presented  to
reflect the reverse stock split.

The Company  completed  a  private  placement  of  2,200,000  common  shares on
December  9,  1995  and  received  $1,890,212  net  of  expenses. The placement
consisted of 88 units. Each unit consisted of 25,000 common  shares  and  6,250
warrants  to  purchase  common  shares  at  $3.00 per share for six months. The
Company filed a registration statement covering  the  shares  issued  within 90
days  of  completion of the offering as required by the terms of the financing.
During years  ended June 30, 1996 and 1997, warrants to purchase 506,250 shares
of common stock were exercised, and the remaining warrants expired.

As of June 30,  1997, the Company had 3,582,083 shares of common stock reserved
for issuance under options and warrants.

WARRANTS

As part of the placement  agent's compensation in the 1995 private placement of
units, additional warrants  to  purchase  8.8  units  at  an  exercise price of
$60,000 per unit were also issued, each unit consisting of twenty-five thousand
(25,000) shares of common stock.  The warrants expire in December 2000.

In  conjunction  with  the placement of Series C Preferred stock in  1993,  the
placement agent, Paradise  Valley  Securities,  received  warrants  to purchase
42,500  shares  of  the  Company's common stock at $1.20 per share. There  were
37,500 warrants converted  in  fiscal  1997.  The  remaining warrants expire in
February 1998.

                                       38

<PAGE>

                          THERMOGENESIS CORP.
               NOTES TO FINANCIAL STATEMENTS (Continued)


4. SHAREHOLDERS' EQUITY (CONTINUED)

STOCK OPTIONS

On  July  31,  1996 and May 29, 1996, the Company issued  options  to  purchase
200,000 and 100,000
shares, respectively,  of  the  Company's common stock for consulting services.
The exercise price is equal to the  fair  market  value  as  determined  by the
closing  bid  price  for  the  Company's  common  stock as quoted by the Nasdaq
SmallCap  market  on  the  date  of  grant.   The Company  has  recorded  stock
compensation expense recognizing the estimated  fair  value  of  the options of
$56,000 and $60,000 for the years ended June 30, 1997 and 1996.

The Company has issued options to purchase shares of common stock  pursuant  to
its Amended 1994 Stock Option Plan (1994 Plan).  A maximum of 1,450,000 options
may  be granted under the 1994 Plan.  These options are granted at prices which
are equal  to  100%  of  the fair market value on the date of grant, and expire
over a term not to exceed ten years. Options generally vest ratable over a five
year period.

In addition to the 1994 Plan,  the  Company  has  issued  options to directors,
employees and consultants as compensation for services.  These options vest and
are exercisable over a variety of periods as determined by  the Company's Board
of Directors.

A  summary of stock option activity for the Company for the three  years  ended
June 30, 1997 follows:


                                    Number of            Weighted-Average
                                    Options                 Exercise
                                   Outstanding            Price Per Share
Balance at June 30, 1994                   945,000          $1.81
Options canceled                           (67,500)          1.06
Options exercised                          (10,000)          1.06
Balance at June 30, 1995                    867,500          1.88
Options granted                             606,000          2.14
Options canceled                          (304,167)          1.06
Options exercised                           (5,000)          1.06
Balance at June 30, 1996                  1,164,333          2.23
Options granted                           1,184,000          3.16
Options canceled                          (344,501)          3.31
Options exercised                          (37,250)          1.98
Balance at June 30, 1997                  1,966,582          2.61


                                         39

<PAGE>


                          THERMOGENESIS CORP.
               NOTES TO FINANCIAL STATEMENTS (Continued)


4. SHAREHOLDERS' EQUITY (CONTINUED)

STOCK OPTIONS (CONTINUED)

The  following  table summarizes information about stock options outstanding at
June 30, 1997:


<TABLE>
<CAPTION>
                                            OPTIONS OUTSTANDING                                         OPTIONS EXERCISABLE
                                      Weighted
                                       Average           Weighted                        Weithted
    Range of                          Remaining           Average                        Average
    Exercise          Number         Contractual          Exercise         Number        Exercise
    Prices         Outstanding         Life               Price            Exercisable   Price

<S>                    <C>              <C>                  <C>          <C>             <C>
$1.64-$2.40             1,310,583        3.01 years           $2.24        1,107,932       $2.24
$2.65-$3.60               506,000        4.01 years           $2.96          248,668       $3.05
$4.00-$5.63               149,999        3.52 years           $4.60          101,999       $4.65
Total                   1,966,582        3.31 years           $2.61        1,458,599       $2.55
</TABLE>


SFAS 123 requires  the  use  of option valuation models to provide supplemental
information  regarding  options   granted  after  June  30,  1995.   Pro  forma
information  regarding  net  loss and  net  loss  per  share  shown  below  was
determined as if the Company had accounted for its employee stock options under
the fair value method of that statement.

The Black-Scholes option valuation  model  was  developed for use in estimating
the fair value of traded options.  The Company's  employee  stock  options have
characteristics  significantly different from those of traded options  such  as
vesting restrictions  and  extremely limited transferability.  In addition, the
assumptions used in option valuation  models (see below) are highly subjective,
particularly  the  expected stock price volatility  of  the  underlying  stock.
Because changes in these subjective input assumptions can materially affect the
fair value estimate,  in  management's  opinion,  the  existing  models  do not
provide  a  reliable  single  measure  of  the fair value of its employee stock
options.



                                        40


<PAGE>




                          THERMOGENESIS CORP.
               NOTES TO FINANCIAL STATEMENTS (Continued)

4. SHAREHOLDERS' EQUITY (CONTINUED)

STOCK OPTIONS (CONTINUED)

For purposes of pro forma disclosures, the estimated  fair value of the options
is amortized over the options' vesting periods.  The pro  forma  effect  on net
loss for fiscal 1997 and 1996 is not representative of the pro forma effect  on
operations  in  future  years  because  it does not take into consideration pro
forma compensation expense related to grants  made  prior to July 1, 1995.  The
Company's pro forma information is as follows:

                            Year ended June 30,
                           1997               1996

Net loss
  As reported           ($4,805,822)       ($  568,534)
  Pro forma             (  5,325,270)      ( 1,764,651)
Net loss per share
  As reported                 ($0.32)            ($0.05)
  Pro forma                   ( 0.36)            ( 0.15)


The fair value of each option grant is estimated on the date of grant using the
Black-Scholes  option-pricing  model  with  the  following   weighted   average
assumptions:  expected  volatility  of  85%; an expected life of 4.73 years;  a
risk-free  interest  rate  of 6.15% and no expected  dividends.   The  weighted
average grant date fair value  of  options  granted during the years ended June
30, 1997 and 1996 was $1.80 and $1.79, respectively.

5. MAJOR CUSTOMERS AND FOREIGN SALES

During the fiscal year ended June 30, 1997, sales  from  a significant customer
totaled $4,044,489 or 61% of net sales and foreign sales were 15% of net sales.
During the fiscal year ended June 30, 1996, sales to two significant  customers
each represented 10% of the Company's net sales and foreign sales were  41%  of
net  sales. During fiscal 1995, sales from a significant customer accounted for
10% of net sales and foreign sales were 55% of net sales.

6.  SALE OF DISTRIBUTION RIGHTS FOR BIOARCHIVE FREEZER SYSTEM

In June  1995,  the  Company  sold  the  Japanese  distribution  rights to N{2}
BioArchive  System  and  the  Vial BioArchive System to Daido-Hoxan, Japan  for
$350,000. Of the $350,000, $280,000  was  received  at  the time of signing the
agreement and is non-refundable, and $70,000 was due when the Company delivered
a prototype of the Vial BioArchive System. The Company has  recognized $280,000
of revenue and offset $10,000 in expenses in fiscal 1995 and recognized $60,000
of revenue in fiscal 1996.

                                      41

<PAGE>

                          THERMOGENESIS CORP.
               NOTES TO FINANCIAL STATEMENTS (Continued)


7. SALE OF LICENSE RIGHTS FOR CRYOSEAL SYSTEM

In  June  1996,  the  Company  entered  into  an  exclusive  manufacturing  and
distribution agreement for the territory of Japan for the CryoSeal  System with
Asahi Medical Co., Ltd., of Japan, a division of Asahi Chemical.  Asahi Medical
is  a  leading  supplier of artificial kidneys, blood purification systems  and
leukocyte removal  systems.   Under  the  terms  of  the  agreement, Asahi will
manufacture the CP-1 disposable processing container, purchase  the CS-1 device
and  SA-1  and  DA-1  surgical  applicators  from  the Company, and market  the
CryoSeal  System  in  Japan.  The Company received a $400,000  license  fee,  a
commitment  from Asahi to purchase  the  CryoSeal  System  and  related  fibrin
applicators from  the  Company  and  a  10%  royalty  on  the  sale of the CP-1
container.  The Company recognized $400,000 of revenue for the license  fee  in
fiscal 1996.

8. INCOME TAXES

The reconciliation of federal income tax attributable to operations computed at
the federal statutory  tax rates of 34% to income tax expense is as follows for
the years ended June 30:


<TABLE>
<CAPTION>
                                               1997            1996             1995
<S>                                       <C>             <C>              <C>
     Statutory federal income tax benefit  $(1,630,000)    $ (197,000)      $(30,000)
     Net operating loss with no tax benefit    1,630,000      197,000            30,000
         Total federal income tax          $       -       $      -         $      -

</TABLE>


At June 30, 1997, the Company  had net operating loss carryforwards for federal
and  state  income tax purposes of  approximately  $10,567,000  and  $5,125,000
respectively, that are available to offset future income. The federal and state
loss carryforwards  expire  between the years 2002 and 2012, and 1998 and 2002,
respectively.

At  June  30,  1997,  the  Company  has  research  and  experimentation  credit
carryforwards of approximately  $63,000  for  federal  tax purposes that expire
between the years of 2002 and 2008 and $39,000 for state  income  tax  purposes
that do not have an expiration date.



                                       42

<PAGE>

                          THERMOGENESIS CORP.
               NOTES TO FINANCIAL STATEMENTS (Continued)

8. INCOME TAXES (CONTINUED)

Significant components of the Company's deferred tax assets and liabilities for
federal and state income taxes are as follows:



                                         JUNE 30, 1997          JUNE 30, 1996
Deferred tax assets:
 Net operating loss carryforwards          $3,897,000            $2,154,000  
 Research credits                             102,000               102,000 
  Other                                       164,000               137,000
Total deferred taxes                        4,163,000             2,393,000
Valuation Allowance                        (4,163,000)           (2,393,000) 
Net deferred taxes                         $   -                  $   -


Because of the "change of ownership" provisions of the Tax Reform Act of  1986,
a portion of the Company's federal net operating loss and credit carryovers may
be  subject to an annual limitation regarding their utilization against taxable
income  in  future periods. The Company expects that this limitation should not
have a material  adverse  effect  on  the  Company's ability to utilize the net
operating loss and credit carryovers prior to  the  expiration of the carryover
periods.

9.  EMPLOYEE RETIREMENT PLAN

The Company sponsors an Employee Retirement Plan, generally  available  to  all
employees,   in  accordance  with  Section 401(k) of the Internal Revenue Code.
Employees may elect to contribute up  to  the  Internal  Revenue Service annual
contribution  limit.   Under  this  Plan,  at the discretion of  the  Board  of
Directors, the Company may match a portion of the employees' contributions.  No
Company contributions have been made to the Plan as of June 30, 1997.

                                     43

<PAGE>


I
TEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                 AND FINANCIAL DISCLOSURE

None.



                               PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(A) CORPORATE DIRECTORS

The following is the business background for the directors of the Company:

PHILIP H. COELHO was named President of the  Company  on  September 1989.  From
October 1986 to September 1989, Mr. Coelho was Vice President  and  Director of
Research,   Development   and  Manufacturing.   Mr.  Coelho  was  President  of
Castleton, Inc. from October  1983 until October 1986.  Castleton developed and
previously licensed the Insta Cool Technology to the Company.  Mr. Coelho has a
Bachelor of Science degree in Mechanical  Engineering  from  the  University of
California,  Davis, and is the inventor or co-inventor on all of the  Company's
patents.

CHARLES DE B.  GRIFFITHS was elected to the Board of Directors in December 1989
and became Director  of International Sales in January 1990.  He is a Chartered
Accountant and holds a  degree  in Economics from the University of Manchester,
U.K.  From January 1980 until December  1987  he was the Managing Director of a
number of successful overseas manufacturing subsidiaries  of the Cloride Group,
including  a $25,000,000 joint venture with the government of  Egypt  which  he
steered  to profitability  in  its  first  year  of  operation.   In  his  last
appointment  with  Cloride  he  was in charge of the Scandinavian manufacturing
operations based in Denmark and was  concurrently  responsible for all European
automotive marketing activities.  Mr. Griffiths is an  internationally oriented
businessman   with   appropriate   experience   in  industrial  marketing   and
manufacturing enhanced by studies at Harvard and  Cranfield  Business  Schools.
He  conducted  a  consulting  practice  in the United Kingdom from January 1988
until December 1989.

WALTER J. LUDT, III rejoined the Company  as  its  Chief  Operating Officer and
Vice President in February 1995.  From March 1994 until February 1995, Mr. Ludt
was a consultant (acting Chief Financial Officer) to the Omohundro  Company,  a
manufacturer  of  state  of the art carbon fiber spars for sail boats, where he
was instrumental in raising  $5,000,000 in capital and restructuring $2,500,000
in bank debt.  From June 1992 to February 1994, Mr. Ludt was Vice President and
Chief Financial Officer of Protel  Technology,  a  developer  and  marketer  of
sophisticated  EDA software. Prior to June 1992, Mr. Ludt was a Director, Chief
Financial Officer,  and Secretary of the Company.  Mr. Ludt holds a Bachelor of
Science Degree in Business/Accounting  from California State University at Long
Beach.

PATRICK MCENANY has been the President of  Royce  Laboratories  since June 1991
and its Chairman since February 1994.  In April 1997, Royce Laboratories merged
with  and  became  a  subsidiary of Watson Pharmaceuticals, Inc.   Mr.  McEnany
continues to serve as President  of  Royce  Laboratories as well as the V.P. of
Corporate Development for Watson Pharmaceuticals,  Inc.    From  1973  to 1985,
Mr.  McEnany  was  the  President,  Chief Executive Officer and Chief Financial
Officer of Zenex Synthetic Lubricants, Inc. ("Zenex"), a company engaged in the
distribution of synthetic lubricants.  In February 1985, Zenex merged with Home
Intensive Care, Inc. ("HIC"), a provider  of home infusion therapy services and
Mr.  McEnany  continued  to  serve as a director  and  chairman  of  the  audit
committee until HIC was acquired by WR Grace & Co. In 1993.  From December 1984
through 1991, Mr. McEnany also  served  as the President of Equisource Capital,
Inc., a consulting company in the areas of  corporate  finance  and  investment
banking.  He  currently  serves  as  Vice Chairman and director of the National
Association of Pharmaceutical Manufacturers.  Mr. McEnany was a director of the
Company in 1991.

                                     44

<PAGE>

HUBERT E. HUCKEL, M.D. currently serves as a member  of  the Board of Directors
of  Sano  Corp.,  a  Florida based company active in the field  of  transdermal
delivery systems for prescription drugs, and for Titan Pharmaceuticals, a South
San Francisco based company  providing biotechnology products for the treatment
of neurological diseases and malignacies.   In  1964, Dr. Huckel joined Hoechst
A.G., a Frankfurt, Germany based chemical-pharmaceutical company ranking in the
top  5  of such companies world wide.  Dr. Huckel later  moved  to  Hoechst  US
subsidiaries  in 1966 where he held various operations and executive management
positions, advancing  to  Chairman  of  Hoechst  Roussel  Pharmaceutical, Inc.,
president of the Life Sciences Group, and member of the Executive  Committee at
Hoechst  Celanese Corp., a Fortune 100 company.  Dr. Huckel earned his  medical
degree from the University of Vienna, Austria, in 1956.

   BOARD MEETINGS

During the fiscal year ended June 30, 1997, the Board took action 24 times,  by
meeting or  consent.  All  directors  were  either  present  at  the meeting or
consented  in  writing  to  the  action.  The Compensation Committee also  took
action on 4 occasions, by meeting  or  consesnt,  during  the fiscal year ended
June  30,  1997.   All  members of the Compensation Committee were  present  or
consented to the actions  in  writing.   The  Audit Committee met once, and all
members of that committee were present at the meeting.

   BOARD COMMITTEES

The Company currently has a Compensation Committee, an Executive Committee, and
an Audit Committee.

The Audit Committee coordinates and oversees the  Company  audit  performed  by
outside  auditors.   The Audit Committee currently consists of two non-employee
directors, Patrick McEnany and Dr. Hubert Huckel.

The Compensation Committee  reviews  and  approves  the  executive compensation
policies and determines employee option grants.  Following the fiscal year end,
the Compensation Committee members were Patrick McEnany and  Hubert Huckel, the
Company's two outside directors.

The Executive Committee was re-created and established just prior to the fiscal
year ended June 30, 1997.  The Executive Committee members are Philip H. Coelho
and  Patrick  McEnany.   The  Executive  Committee assists the Chief  Executive
Officer and management with efforts to increase  sales, implement manufacturing
and budgeting controls, and other operational and  investment  banking matters.
The Executive Committee  reports directly to the full Board for actions.



   DIRECTORS COMPENSATION

All directors who are not employees of the Company are paid a fee of  $1000 per
Board   meeting   attended   in  person  ($500  for  attendance  by  telephonic
conference).   In addition, members  of  the  Board's   Compensation  Committee
receive  $500  per  meeting  in  person  ($250  for  attendance  by  telephonic
conference)  and  options  to  purchase  4,000  shares  of  common  stock  upon
completion of each full year of service on the Compensation  Committee pursuant
to the Amended  1994  Stock  Option  Plan.  Members  of the Audit and Executive
Committees  receive  $500  per  meeting  in  person  ($250  for  attendance  by
telephonic conference).

                                      45

<PAGE>

(B) CORPORATE OFFICERS

The  following table sets forth certain information with respect  to  executive
officers and certain key employees of the Company.


NAME               POSITIONS WITH THE COMPANY                 AGE      SINCE


Philip H. Coelho     President, and Chief Executive Officer    53     1989{(1)}

Charles de B. Griffiths  V.P. Marketing, Secretary and Director 47     1990

Walter J. Ludt, III           C.O.O., V.P., and C.F.O.          53    1995{(2)}

David C. Adams                V.P. Business Development         39     1996
                              and General Counsel

Michael Zmuda, PhD, RAC          V.P. Regulatory Affairs        59     1997
                                 and Quality Systems



KEY EMPLOYEES

Roger Kane                 Director of Research and Development 49     1996

Renee Ruecker              Director of Finance                  33     1997


NOTES TO TABLE

{(1)  }Prior  to  becoming  President,  Mr. Coelho served as Vice President and
      Director of Research, Development and  Manufacturing from October 1986 to
      September 1989.

{(2)  }Mr.  Ludt previously served as Chief Financial  Officer,  Secretary  and
      Treasurer of the Company prior to June 1992.




Executive officers  are elected annually by the Board of Directors and serve at
the pleasure of the Board.   Messrs.  Coelho,  Ludt,  Griffiths  and Adams have
entered  into  employment  agreements  with  the Company which expire in  1999.
There is no family relationship between any of the officers and directors. None
of the officers or directors have been involved  in  a  legal proceeding within
the  past  five  years  which is material to an evaluation of  his  ability  or
integrity. Mr. Coelho is  a  member  of  the  Board  of  Directors  of  Patient
Education  Media,  Inc.   Mr.  McEnany  is  currently  a   member  of the Royce
Laboratories Board of Directors. Dr. Huckel is a member of the Sano Corporation
and Titan Pharmaceuticals, Inc. Board of Directors.


The biographies of Messrs. Coelho, Griffiths and Ludt can be found above  under
the description and background for the directors of the Company.

                                   46

<PAGE>

DAVID  C.  ADAMS   joined  the  Company  at the end of November 1996 as General
Counsel, and filled the newly created position  of  Vice  President of Business
Development.  Prior to joining the Company, Mr. Adams was in  private  practice
representing  public  and  private  corporations  in  the areas of intellectual
property, corporate finance, mergers and acquisitions,  and regulatory matters.
Mr.  Adams  received  his  Bachelor  of  Arts Degree in Psychology,  with  High
Distinction, from the University of Colorado, Colorado Springs in 1984, and his
Juris Doctorate, with Distinction, from the University of the Pacific, McGeorge
School of Law in 1988.


MICHAEL ZMUDA joined the Company in February 1997 as V.P. of Regulatory Affairs
and Quality Systems.  After serving as Assistant  Professor  of Pharmacology at
Southern  Illinois  University  School  of Medicine for five years,  Dr.  Zmuda
worked  at  Baxter-Travenol  Laboratories,  CD   Medical,  Inc.,  and  American
Sterilizer Company ("AMSCO"). Prior to joining the  Company, Dr. Zmuda held the
position of Director of Regulatory Affairs at AMSCO from 1989 through 1996 when
AMSCO merged with Steris Corporation. Dr. Zmuda received  his  Bachelor of Arts
Degree  in  Psychology  in 1969, and his Physical Doctorate in Pharmacology  in
1975, both from the University of Minnesota.


ROGER KANE, prior  to  joining the Company in December 1996, Mr. Kane worked as
the Director of Product  Development  and Manufacturing for Integrated Surgical
Systems, a position he had held since 1994.  From  1993  through 1994, Mr. Kane
was a private Consultant to a start-up business that had designed a proprietary
anesthesia delivery system, and from 1986 through 1993, Mr. Kane served as V.P.
of  Engineering  for  Bear  Medical Systems in Southern California.   Mr.  Kane
received his Bachelor of Science  Degree  in  Electrical  Engineering from Ohio
State University in 1970 and his Masters Degree in Business Administration from
the University of Wisconsin in 1984.


RENEE  M.  RUECKER  joined the Company in August 1997 as Director  of  Finance.
Prior to joining the  Company,  Ms.  Ruecker  was  a  manger  in  the Audit and
Business Advisory Department at Price Waterhouse LLP.  Her clients  included  a
number  in  the  science and health industries.  A Certified Public Accountant,
Ms. Ruecker received  her Bachelor of Science Degree in Business Administration
from the California Polytechnic State University in San Luis Obispo.


                                    47

<PAGE>


ITEM 11.  EXECUTIVE COMPENSATION

The following table sets forth the aggregate cash compensation paid in the past
three years for all services of Executive Officers of the Company.

                          SUMMARY COMPENSATION TABLE


<TABLE>
<CAPTION>
                                          ANNUAL COMPENSATION                     LONG-TERM COMPENSATION
                                                                   OTHER ANNUAL
NAME AND PRINCIPAL                                                 COMP.          RESTRICTED STOCK  OPTIONS GRANTED
POSITION                  YEAR     SALARY                BONUS                    AWARD(S)
<S>                      <C>      <C>                  <C>        <C>            <C>               <C>
Philip H. Coelho,        1995      $ 110,000            $ 0        $ 27,296{(1)}  $ 0                    -0-
President and Chief
Executive Officer
                         1996      $ 110,000            $ 0        $ 27,296{(2)}  $ 0                250,000{(4)}
                         1997      $ 160,000            $ 0        $ 52,764{(3)}  $ 0                    -0-

Charles de B.            1995      $  80,000            $ 0        $ 12,000{(5)}  $ 0                    -0-
Griffiths,
V.P. Marketing and
Corporate Secretary
                         1996      $ 110,000            $ 0        $ 21,512{(6)}  $ 0                100,000{(8)}
                         1997      $ 120,000            $ 0        $ 31,781{(7)}  $ 0                    -0-

Walter J. Ludt, III,     1995      $  80,000            $ 0        $   7,200{(9)} $ 0                    -0-
Chief Operating
Officer, and Chief
Financial Officer
                         1996      $ 100,000            $ 0        $ 14,253{(10)} $ 0                150,000{(12)}
                         1997      $ 120,000            $ 0        $  9,600{(11)} $ 0                    -0-
</TABLE>

{(1)} Represents payments of $7,200 annual automobile allowance and $20,096 in
accrued vacation pay.

{(2)} Represents payments of $7,200 annual automobile allowance and $20,096 in
accrued vacation pay.

{(3) }Represents payments of $12,000 annual automobile allowance and $40,764 in
     accrued vacation pay.

{(4) }Includes 200,000 stock options granted on October 23, 1995, and 50,000
   stock options granted on May 29, 1996 which were repriced on April 2, 1997
   to $2.3125 per share.

{(5) }Represents payments of $12,000 annual automobile allowance.

{(6) }Represents payments of $9,000 annual automobile allowance and $12,512 in
     accrued vacation pay.

{(7)}Represents payments of $9,000 annual automobile allowance and $22,781 in
accrued vacation pay.

{(8)}Includes replacement option of 100,000.

{(9)}Represents payments of $7,200 annual automobile allowance.

{(10)}Represents payments of $8,100 annual automobile allowance and $6,153 in
accrued vacation pay.

{(11)}Represents payment of $9,000 annual automobile allowance.

{(12)}Includes 100,000 stock options granted on October 23, 1995, and 50,000
stock options granted on May 29, 1996 which were repriced on April 2, 1997 to
$2.3125 per share.


                                   48

<PAGE>

     EMPLOYMENT AGREEMENTS

In  June 1996, the Company  and  Mr.  Coelho  entered  into  a  new  employment
agreement  whereby  Mr. Coelho agreed to serve as President and Chief Executive
Officer of the Company  and receive compensation equal to $160,000 per year and
a $800 per month automobile  allowance,  subject  to annual increases as may be
determined  by  the  Board  of  Directors.   The employment  agreement  may  be
terminated by Mr. Coelho or by the Company with or without cause.  In the event
Mr.  Coelho is terminated by the Company without  cause,  Mr.  Coelho  will  be
entitled  to  receive  severance  pay equal to the greater of six months of his
annual  salary  or the remaining term  of  the  agreement.   In  addition,  the
employment agreement  provides that in the event Mr. Coelho is terminated other
than "for cause" upon a  change  of control, Mr. Coelho shall be paid an amount
equal to three times his annual salary.  The  phrase  "change  of  control"  is
defined  to  include  (i)  the  issuance  of  33%  or  more  of the outstanding
securities to any individual, firm, partnership, or entity, (ii)  the  issuance
of  33%  or more of the outstanding securities in connection with a merger,  or
(iii) the acquisition of the Company in a merger or other business combination.
The employment agreement expires by its terms in June 1999.

In June 1996,  the  Company  and  Charles  de  B.  Griffiths entered into a new
employment agreement whereby Mr. Griffiths agreed to serve as Vice-President of
Marketing and Sales of the Company and receive compensation  equal  to $120,000
per year and a $750 per month car allowance, subject to annual increases as may
be  determined  by  the  Board  of Directors.  The employment agreement may  be
terminated by Mr. Griffiths or by  the  Company  with or without cause.  In the
event Mr. Griffiths is terminated by the Company without  cause,  Mr. Griffiths
will be entitled to receive severance pay equal to the greater of six months of
his  annual  salary, or the remaining term of the agreement.  In addition,  the
employment agreement  provides  that  in  the event Mr. Griffiths is terminated
following a change of control, Mr. Griffiths  shall  be paid an amount equal to
three  times his annual salary. The phrase "change of control"  is  defined  to
include  (i)  the  issuance of 33% or more of the outstanding securities to any
individual, firm, partnership,  or  entity, (ii) the issuance of 33% or more of
the  outstanding  securities  in  connection   with  a  merger,  or  (iii)  the
acquisition  of  the Company in a merger or other  business  combination.   The
employment agreement expires by its terms in June 1999.

In June 1996, the  Company  and  Walter J. Ludt, III entered into an employment
agreement whereby Mr. Ludt agreed to serve as Chief Operating Officer and Chief
Financial Officer of the Company and receive compensation equal to $120,000 per
year and a $750 per month car allowance,  subject to annual increases as may be
determined  by  the  Board  of  Directors.  The  employment  agreement  may  be
terminated by Mr. Ludt or by the  Company  with or without cause.  In the event
Mr. Ludt is terminated by the Company without  cause,  he  will  be entitled to
receive severance pay equal to the greater of six months of his annual  salary,
or  the remaining term of the agreement.  In addition, the employment agreement
provides  that  in  the  event  Mr.  Ludt  is  terminated following a change of
control, he shall be paid an amount equal to three times his annual salary. The
phrase  "change  of  control"  is  defined  e  outstanding  securities  to  any
individual, firm, partnership, or entity, (ii) the  issuance  of 33% or more of
the  outstanding  securities  in  connection  with  a  merger,  or  (iii)   the
acquisition  of  the  Company  in  a merger or other business combination.  The
employment agreement expires by its terms in June 1999.

In  December  1996, the Company and David  Adams  entered  into  an  employment
agreement whereby  Mr.  Adams  agreed  to  serve  as Vice President of Business
Development and General Counsel of the Company and  receive  compensation equal
to  $110,000  per  year and a $650 per month automobile allowance,  subject  to
annual  increases as  may  be  determined  by  the  Board  of  Directors.   The
employment agreement may be terminated by mutual consent of the Company and Mr.
Adams or  by  the  Company  with  or  without  cause. In the event Mr. Adams is
terminated by the Company without cause, Mr. Adams  will be entitled to receive
severance  pay  equal  to  the  greater  of  six months of his  annual  salary,
excluding any amounts for benefits or automobile  allowance  or an amount equal
to the then current per month Base Salary multiplied by the number  of calendar
months  remaining  in  the  Agreement.   In  addition, the employment agreement
provides that in the event Mr. Adams is terminated  other than "for cause" upon
a change of control, Mr. Adams will be paid an amount  equal to three times his
annual salary.  The phrase "change of control" is defined  to  include  (i) the
issuance of 33% or more of the outstanding securities to any individual,  firm,
partnership,  or  entity,  (ii)  the issuance of 33% or more of the outstanding
securities in connection with a merger, or (iii) the acquisition of the Company
in a merger or other business combination.  The employment agreement expires by
its terms in November 1999.

                                   49

<PAGE>

In  February  1997,  the  Company and Michael Zmuda  entered  into  an  at-will
employment agreement whereby  Dr.  Zmuda  agreed  to serve as Vice President of
Regulatory Affairs and Quality Systems of the Company  and receive compensation
equal to $90,000 per year and a $850 per month automobile allowance, subject to
annual  increases  as  may  be  determined  by  the  Board  of Directors.   The
employment  agreement may be terminated by the Company with or  without  cause.
In addition,  the  employment agreement provides that in the event Dr. Zmuda is
terminated other than  "for cause" upon a change of control, he will be paid an
amount equal to three times  his annual salary.  The phrase "change of control"
is defined to include (i) the  issuance  of  33%  or  more  of  the outstanding
securities to any individual, firm, partnership, or entity, (ii)  the  issuance
of  33%  or more of the outstanding securities in connection with a merger,  or
(iii) the acquisition of the Company in a merger or other business combination.

     OPTIONS GRANTED IN LAST FISCAL YEAR

No options  were  granted  to  named  executive officers during the last fiscal
year.  However, the following options were  repriced  during  the  fiscal  year
ended  June  30,  1997.  The  repricing  was  to  compensate those officers for
entering  into lock-up agreements during financing in  the  1996  fiscal  year,
which resulted  in  the  expiration of significant options exercisable at $0.53
per share.  All option grants and values have been adjusted to reflect the one-
for-two stock consolidation  effected  by  the  Company  on  June 14, 1996.  No
officers or directors exercised any options during the year.

                           INDIVIDUAL GRANTS

<TABLE>
<CAPTION>
                                     Percent of Total
                                     Options Granted
                    Number of        to Employees in                                   Potential Realized Value at
                    Securities       Fiscal Year                                       Assumed Annual Rates of Stock
                    Underlying                        Exercise Base      Expiration    Price Appreciation for Option
                    Options Granted                   Price ($/sh){ (1)} Date          Option te Term
Director                                                                              5%($){(2)}      10%($){(2)}
<S>                 <C>              <C>              <C>              <C>             <C>             <C>
Philip Coelho         50,000             4.2%         $ 2.3125{(3)}    5/29/01          $  31,947       $  70,589
Walter Ludt           50,000             4.2%         $ 2.3125{(4)}    5/29/01          $  31,947       $  70,589
</TABLE>


FOOTNOTES TO TABLE

{(1)}The  exercise price of the options repriced during fiscal  year  1996  was
equal to the closing market price of the Company's common stock on the date the
option was repriced.  All other terms remained the same.
{(2)}The 5%  and 10% assumed rates of appreciation are mandated by the rules of
the Securities  and  Exchange  Commission  and  do  not represent the Company's
estimate or projection of future common stock prices, or actual performance.
{(3)   }  Options were repriced on April 2,1997 at $2.3125.
{(4)      }Options were repriced on April 2, 1997 at $2.3125.
                                     50

<PAGE>

     AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table sets forth executive officer options  exercised  and option
values  for  fiscal year 1996, as adjusted for the Company's one-for-two  stock
consolidation effected June 14, 1996 for all fiscal year executive officers.

                                        Number of options  Value of Unexercised
                                        at FY end Options  at FY End
                Shares Acquired Value   (Exercisable/      (Exercisable/
NAME            OR EXERCISED    REALIZED UNEXERCISABLE)    UNEXERCISABLE){(1)}

Philip H. Coelho   -               -          425,000{(2)}/    $1,181,925/
                                                   -0-               $ -0-

Charles de B. Griffiths-           -          225,000{(3)}/    $  625,725/
                                                   -0-               $ -0-
 
Walter Ludt, III   -               -          250,000{(4)}/    $  556,200/
                                                   -0-               $ -0-
FOOTNOTES TO TABLE

{(1)}    Based on June 30, 1997 year end closing bid price of $2.781 per share.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The Company is  not  aware  of  any stockholder of record who owns five percent
(5%) or more of the outstanding common  stock, and the Company has not received
any  Form  13d  filings  which  would  indicate   that   any  stockholder  owns
beneficially more than five percent (5%) or more of the Company's common stock.
The following table sets forth, as of June 30, 1997, certain  information  with
respect to the beneficial ownership of shares of the Company's common stock  by
all directors and named executive officers of the Company individually, and all
directors  and  all  executive  officers of the Company as a group.  There were
15,864,769 shares of common stock outstanding as of June 30, 1997.

        5% STOCKHOLDERS, DIRECTORS       SHARES BENEFICIALLY     PERCENTAGE OF
        AND NAMED EXECUTIVE OFFICERS          OWNED {(1)}          OWNERSHIP

Philip H. Coelho, President, CEO
 and Chairman of the Board{(2)}...............584,500                 3.48%

Charles de B. Griffiths, Vice President
 Marketing & Sales, Director{(3)}.............507,500                 3.02%

Walter J. Ludt, COO, CFO and Director {(4)}...200,000                 1.19%

Hubert  Huckel,  Director  {(5)}.............  47,000                   *

Patrick McEnany, Director{(6)}................105,829                   *

All directors and executive officers as
 a group (7)..................................1,442,329               8.59%

                                    51

<PAGE>

________________________

<circle>Represents beneficial ownership of less than 1%.

{(1)}Beneficial  ownership  is  determined  in accordance with the rules of the
Securities and Exchange Commission and generally  includes voting or investment
power  with  respect  to securities.  Except as noted  in  the  footnotes,  and
subject to community property  laws,  the  persons  named  have sole voting and
investment power with respect to all shares of the Company's common stock shown
as beneficially owned by them.

{(2)}Includes rights to purchase 175,000 common shares at $2.32  per  share and
200,000  common  shares  at  $2.125 per share pursuant to stock options granted
December 31, 1993, and October 23, 1995, respectively, and 50,000 common shares
granted on May 29, 1996 and repriced on April 2, 1997 at $2.3125 per share.


{(3)}Includes rights to purchase  125,000  common shares at $2.32 per share and
100,000 common shares at $2.125 per share pursuant  to  stock  options  granted
December  31,  1993  and  October 23, 1995, respectively. Also includes 257,500
common shares held by the Beaufort  Trust  for  the  benefit  of Mr. Griffiths.
Although  he is the beneficiary of the trust, Mr. Griffiths has  no  voting  or
dispositive power over the 257,500 shares held in the trust.


{(4)}Includes  rights  to  purchase  100,000  common shares at $2.125 per share
pursuant to stock options granted on October 23,  1995,  and rights to purchase
50,000 shares granted on May 29, 1996 and repriced on April  2, 1997 at $2.3125
per  share,  and  rights  to purchase 50,000 common shares at $3.00  per  share
pursuant to stock options granted pursuant to employment in 1995.


{(5)}Includes rights to purchase  40,000  common  shares  at  $3.3125 per share
pursuant to stock options granted on May 29, 1997.


{(6)}Includes  rights  to  purchase 40,000 common shares at $3.3125  per  share
pursuant to stock options granted  on  May  29,  1997.  Includes  25,829 common
shares  owned  by  Equisource Capital, Inc. Also, includes 2,500 common  shares
owned by Mr. McEnany's wife to which he disclaims beneficial ownership.




ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In May 1997, the Company  loaned  the principal sum of $88,281.25 to Charles de
B.  Griffiths,  the Company's Vice President  of  Marketing  and  Sales  and  a
director of the Company,  to  assist  with  the  purchase  and  renovation of a
residence  in connection with Mr. Griffiths relocation to the Company's  Rancho
Cordova office from France, where he previously resided.  The loan bears simple
interest at the annual rate of eight percent  (8%), and is due and payable upon
demand, and  in  no event later than February 1998.  The loan was fully secured
by shares of common  stock  held  by Mr. Griffiths at the time of the loan, and
was  entered into to assist Mr. Griffiths  relocate  without  needing  to  sell
shares of the Company's common stock beneficially owned by him.

                                   52

<PAGE>


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

The following documents are filed as a part of this report on Form 10-K.

     (A)  1)    FINANCIAL STATEMENTS                           PAGE NUMBER
     Report of Ernst & Young LLP, Independent Auditors .........28

     Balance Sheets at June 30, 1997 and 1996 .  ...............29

     Statements of Operations for the years
       ended June 30, 1997, 1996, and 1995......................31

     Statements of Shareholders' Equity for
       the years ended June 30, 1997 and 1996 ..................32

     Statements of Cash Flows for the
       years ended June 30, 1997, 1996 and 1995 ................33

     Notes to Financial Statements..............................34

    2) FINANCIAL STATEMENT SCHEDULES

     Schedule II, Valuation and Qualifying Accounts ............56
All  other  schedules  have  been  omitted  because they are not applicable  or
because the required information is disclosed  in  the financial statements and
notes thereto.


     (B)REPORTS ON FORM 8-K

    1) Current  Report  on Form 8-K for the  event date  November  27,  1996
(announcing closing of equity financing)

    2) Current Report on Form 8-K for the event date March 27, 1997(announcing
license agreement with Pall/Medsep Corporation)

     (C)EXHIBITS

    1)Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit
Index on the next page, which is incorporated herein by this reference.

     2)Glossary



                                     53

<PAGE>

                              THERMOGENESIS CORP.


                              SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of  the Securities Exchange
Act of 1934, the Registrant has duly caused this report to  be  signed  on  its
behalf by the undersigned thereunto duly authorized.

                                          THERMOGENESIS CORP.


     
                                         Philip H. Coelho, President
September 25, 1997                       and Chief Executive Officer

Pursuant  to  the  requirements  of  the  Securities Exchange Act of 1934, this
report  has  been  signed  below by the following  persons  on  behalf  of  the
Registrant and in the capacities and on the dates indicated.



By:                                              Dated:     SEPTEMBER 25, 1997
      Philip H. Coelho, Chief Executive
      Officer and Chairman of the Board
      (Principal Executive Officer)


By:                                              Dated:     SEPTEMBER 25, 1997
      Walter J. Ludt, III, CFO & Director
       (Principal Financial and Accounting
       Officer)




By:                                              Dated:      SEPTEMBER 25, 1997
      Charles de B. Griffiths, Director



By:                                              Dated:      SEPTEMBER 25, 1997
      Hubert Huckel, Director



By:                                              Dated:       SEPTEMBER 25, 1997
      Patrick McEnany, Director
                                     54

<PAGE>


                             EXHIBIT INDEX

EXHIBIT        DESCRIPTION
- ------- -----------------------------------------------------------------------
3.1  (a)Amended and Restated Certificate of Incorporation  {(5)}
     (b)Amended Bylaws  {(5)}

10.1 (a)Letter of Agreement between Liquid Carbonic, Inc.
     Canada and THERMOGENESIS CORP.  {(2)}
     (b)Letter of Agreement between Fujitetsumo USA and
     THERMOGENESIS CORP.  {(2)}
     (c)Letter of Agreement between Fujitetsumo
     Japan and THERMOGENESIS CORP.  {(2)}
     (d)Letter of Agreement between THERMOGENESIS
     CORP. and Liquid Carbonic, Inc. Sale of Convertible Debenture  {(3)}
     (e)License Agreement between Stryker Corp. and
     THERMOGENESIS CORP.{  (7)}
     (f)Lease of Office and Mfg. Space  {(5)}
     (g)Executive Development and Distribution  Agreement
     between THERMOGENESIS and Daido Hoxan Inc.  {(4)}
     (h)Administrative Office Lease  {(8)}
     (i)Employment Agreement for Philip H. Coelho  {(9)}
     (j)Employment Agreement for Charles de B. Griffiths  {(9)}
     (k)Employment Agreement for Walter Ludt  {(9)}
     (l)Employment Agreement for David C. Adams
     (m)Manufacturing and License Agreement between
     On-Time Manufacturing and THERMOGENESIS  {(9)}
     (n)License and Distribution Agreement between Asahi
     Medical and THERMOGENESIS CORP.  {(10)}
23.1Consent of Ernst & Young LLP, Independent Auditors
27  Financial Disclosure Statement

FOOTNOTES TO INDEX

{(1)} Incorporated by reference to Registration Stmt No. 33-12210-A of
     THERMOGENESIS, CORP. filed on June 4, 1987.
{(2)} Incorporated by reference to Registration Statement No. 33-37242 of
     THERMOGENESIS, CORP. filed on Feb. 7, 1991.
{(3)} Incorporated by reference to Form 8-K for July 19, 1993
{(4)} Incorporated by reference to Form 8-K for June 9, 1995.
{(5)} Incorporated by reference to Form 10-KSB for the year ended June 30,
     1994
{(6)} Incorporated by reference to Form 10-KSB for the year ended June 30, 1995
{(7)} Incorporated by reference to Form 8-K for September 27, 1995
{(8)} Incorporated by reference to Form 10-QSB for the quarter ended
     December 31, 1995
{(9)}Incorporated by reference to Form 10-KSB for the year ended June 30, 1996.
{(10)}Incorporated by reference to Form 8-K for May 29, 1996


                                      55

<PAGE>

     SCHEDULE II

                        THERMOGENESIS CORP.
                 VALUATION AND QUALIFYING ACCOUNTS



<TABLE>
<CAPTION>
                                  Balance   at          Charged   to                 Write-offs   Balance at
                                  Beginning  of         Costs  and                     (Net  of     End
                                  PERIOD                EXPENSES                      RECOVERIES)   OF PERIOD
ALLOWANCE OF DOUBTFUL ACCOUNTS
<S>                                <C>                   <C>                  <C>                  <C>
For the year ended June 30, 1997   $ 97,913              $      --            $       --           $ 97,913
For the year ended June 30, 1996      72,913              25,000                       --             97,913
For the year ended June 30, 1995       58,454             23,328                  8,869               72,913
</TABLE>


 





                                       56

<PAGE>
                                   GLOSSARY


510(K): formal notification to the Food and Drug Administration ("FDA")  by
manufacturers  of Class I or Class II devices to obtain clearance to market
the medical device.

AUTOLOGOUS: autogenous;  related  to  self;  originating within an organism
itself, as an autograft or autotransfusion.

CLASS II MEDICAL SYSTEM: those devices for which general controls alone are
insufficient to assure safety and effectiveness  and  for  which  mandatory
performance standards must be developed by the FDA.

COAGULATION:  1)  the  process  of  clot  formation.   2)  in  surgery, the
disruption of tissue by physical means to form an amorphous residuum, as in
electrocoagulation and photocoagulation.

CORE  LINE  PRODUCTS:  (1)  device for the ultra-rapid cryopreservation  of
human   blood   plasma,   (2)   portable   device   for   the   ultra-rapid
cryopreservation of human blood plasma, (3) device for the rapid thawing of
frozen plasma for hospital patient  care,  (4)  device  for  the   hermetic
sealing  of  blood tissue containers, (5) "smart" blood collection monitor,
(6) Vial BioArchive{TM} System for the Japanese Red Cross.

CRYOPRECIPITATE: any precipitate that results from cooling, as cryoglobulin
or antihemophilic factor.

CRYOPRECIPITATED  AHF (CRYO): a biological product used for the intravenous
treatment of hemophilia.

CRYOPRESERVATION: the  maintaining  of  the  viability of excised tissue or
organs by storing at very low temperatures.

CRYOSEAL{TM}: system for harvesting fibrinogen-rich  cryoprecipitate from a
donor's blood plasma, a blood component that is currently  licensed  by the
FDA for the treatment of clotting protein deficient patients.

DEWAR:  container which keeps its contents at a constant and generally  low
temperature  by  means  of  two  external  walls  between which a vacuum is
maintained.

FACTOR  VIII:  antihemophilic  factor  (AHF):  a relatively  storage-labile
factor participating only in the intrinsic pathway  of  blood  coagulation.
Deficiency  of  this  factor,  when  transmitted  as a sex-linked recessive
trait, causes classical hemophilia (hemophilia A).  More than one molecular
form  of  this  factor  has  been  discovered.  Called also  antihemophilic
globulin (AHG) and antihemophilic factor A.



                                    57

<PAGE>

FACTOR XIII: fibrin stabilizing factor  (FSF):  a  factor  that polymerizes
fibrin  monomers  so  that they become stable and insoluble in  urea,  thus
enabling fibrin to form  a  firm  blood  clot.   Deficiency  of this factor
produces a clinical hemorrhagic diathesis.  Called also fibrinase and Laki-
Lorand factor (LLF). The inactive form is also known as protransglutaminase
and the active form as transglutaminase.

FIBRONECTIN:  an  adhesive  glycoprotein:  one  form circulates in  plasma,
acting  as  an  opsonin; another is a cell-surface protein  which  mediates
cellular adhesive  interactions.   Fibronectins are important in connective
tissue, where they cross-link to collagen,  and  they  are also involved in
aggregation of platelets.

FIBRINOGEN: a sterile compound derived from normal human  plasma  and dried
from the frozen state; used to promote blood clotting.

GOOD  MANUFACTURING  PRACTICES:  regulations  for  methods  used in and the
facilities  and  controls  used  for the manufacture, packing, storage  and
installation  of  all  finished  devices   intended   for  human  use;  the
regulations  assure  that  such  devices  will  be  safe and effective  and
otherwise in compliance with the Federal Food, Drug and  Cosmetic  Act,  as
amended.

HEMATOLOGY:  that  branch of medical science which treats of the morphology
of the blood and blood forming tissues.

HEMATOPOIETIC: pertaining to or affecting the formation of blood cells.  As
agent that promotes the formation of blood cells.

HEMOSTATIC: 1) checking  the  flow  of  blood; 2) an agent that arrests the
flow of blood.

HEMOSTASIS: the arrest of bleeding, either  by the physiological properties
of vasoconstriction  and coagulation or by surgical means.  Interruption of
blood flow through any vessel or to any anatomical area.

INVESTIGATION REVIEW BOARD: any board, committee  or  other  group formally
designated  by  an  institution  to  review  biomedical  research involving
subjects and established, operated and functioning in conformance with part
56 of 21 CFR.

IN  VITRO:  within  a  glass;  observable in a test tube; in an  artificial
environment.

IN VIVO: within the living body.

LEUKOCYTE: white cells; a colorless  blood  corpuscle  capable  of  ameboid
movement whose chief function is to protect the body against microorganisms
causing  disease  and  which may be classified in two main groups, granular
and nongranular.

MACULAR:  pertaining  to or  characterized  by  the  presence  of  macules;
pertaining to the macula retinae.


                                        58

<PAGE>

N{2} BIOARCHIVE: system for controlled rate freezing, storage and retrieval
and inventory management  of biological samples which require LN{2} storage
temperatures, such as placental, stem and progenitor cells.

OTOLARYNOLOGY: that branch  of  medicine  dealing  with disease of the ear,
nose and throat.

PIPELINE  PRODUCTS: (1) CryoSeal{TM} System, thermodynamic  processor,  (2)
LN{2} BioArchive{TM} System, computerized LN{2} dewar with robotic arm, (3)
CryoFactor{TM}   System,   thermodynamic  processor,  (4)  MicroSealant{TM}
System, bench top thermodynamic  processor,  (5)  CryoPlatelet{TM}  System,
thermodynamic processor.

PLATELET  DERIVED  GROWTH FACTOR (PDGF): a substance contained in the alpha
granules of platelets  and  capable  of  inducing proliferation of vascular
endothelial  cells,  vascular smooth muscle  cells,  fibroblasts  and  glia
cells; its action contributes to the repair of damaged vascular walls.

PRE-MARKET APPROVAL: any  premarket  approval  application  for a Class III
medical device, including all information submitted with or incorporated by
reference therein; PMA includes a new drug application for a  device  under
section 520(1) of the Federal, Food, Drug & Cosmetic Act, as amended.

PROGENITOR: a parent or ancestor.

THERMODYNAMIC:  the  branch  of  science  dealing  with heat, energy, their
interconversion, and problems related thereto.

THERMOLABILE:  easily altered or decomposed by heat.

VON  WILLEBRAND'S FACTOR: the attribute of Factor VIII  necessary  for  the
adhesion  of  platelets  to  vascular  elements.  Deficiency of this factor
results in the prolonged bleeding time seen in von Willebrand's disease.

                                     59





                        THERMOGENESIS CORP.

                       EMPLOYMENT AGREEMENT
                                FOR
                          DAVID C. ADAMS

THERMOGENESIS CORP. ("Employer"), and David C. Adams ("Employee"), agree as
follows:

1.   EMPLOYMENT.  Employer employs Employee and Employee accepts employment
with  Employer  on  the  terms  and conditions set forth in this Employment
Agreement ("Agreement").

2.   POSITION; SCOPE OF EMPLOYMENT.   Employee  shall  have the position of
Vice-President of Business Development and General Counsel,  and shall have
the  duties and authority set forth below, and as detailed on the  position
description  attached  as  EXHIBIT  "A",  which duties and authority may be
modified from time to time by Employer.  As General Counsel, Employee shall
report to the Board of Directors of Employer.   As  Vice-President Business
Development,  Employee  shall  report  to  the Employer's  Chief  Executive
Officer.

     2.1. ENTIRE TIME AND EFFORT.  Employee  shall  devote  Employee's full
working  time,  attention,  abilities,  skill,  labor  and efforts  to  the
performance of his employment.  Employee shall not, directly or indirectly,
alone or as a member of a partnership or other organizational entity, or as
an officer or director of any corporation (other than any  which  are owned
by  or  affiliated  with  Employer)  (i)  be  substantially
  engaged  in or
concerned  with  any  other  commercial  duties  or  pursuits,  (ii) render
services  to  any  third  party  for  compensation,  or  other  benefit, or
(iii) engage in any other business activity that will in any way  interfere
with the performance of Employee's duties under this Agreement, except with
the prior written consent of Employer.

     2.2. RULES  AND  REGULATIONS.   Employee  agrees to observe and comply
with Employer's rules and regulations as provided by Employer and as may be
amended  from  time  to  time by Employer and will carry  out  and  perform
faithfully such orders, directions and policies of Employer.  To the extent
any  provision  of this Agreement  is  contrary  to  an  Employer  rule  or
regulation, as such  may  be  amended  from time to time, the terms of this
Agreement shall control.

     2.3. LIMITATIONS UPON AUTHORITY TO  BIND EMPLOYER.  Employee shall not
engage in any of the following actions on  behalf  of  Employer without the
prior approval of Employer:  (i) borrow or obtain credit  in  any amount or
execute  any  guaranty,  except  for  items  purchased from vendors in  the
ordinary course of Employer's operations; (ii)  expend  funds  for  capital
equipment  in  excess  of  expenditures  expressly budgeted by Employer, if
applicable, or in the event not budgeted,  not  to  exceed  the amounts set
forth  in  subparagraph  (iii);  (iii)  sell  or  transfer  capital  assets
exceeding  Five  Thousand  Dollars  ($5,000)  in market value in any single
transaction or exceeding Ten Thousand Dollars ($10,000)  in  the  aggregate
during  any  one  fiscal  year; (iv) execute any lease for real or personal
property; or (v) exercise any  authority  or control over the management of
any employee welfare or pension benefit plan maintained by Employer or over
the disposition of the assets of any such plan.

3.   TERM.  The term of this Agreement shall  be  for a period of three (3)
years  which shall commence on December 1, 1996 and  end  on  November  30,
1999; unless terminated earlier as provided below in section 5.

4.   COMPENSATION.   Employer  shall  pay  to Employee an initial amount of
$5,000, and shall pay to or provide compensation  to  Employee as set forth
in this section 4.  All compensation of every description  shall be subject
to  the  customary withholding tax and other employment taxes  as  required
with respect to compensation paid to an employee.

     4.1. BASE  SALARY.   Employer  shall pay Employee a base salary of one
hundred and ten thousand Dollars ($110,000) per year commencing on December
1,  1996 ("Base Salary").  Employee's  Base  Salary  shall  be  payable  in
accordance  with  Employer's  regular pay schedule, but not less frequently
than twice per month.  In addition  to the Base Salary provided herein, the
Employee shall also be paid a car allowance of $650 per month commencing on
December 1, 1996, and continuing during the term of this agreement.

     4.2. ANNUAL REVIEW.  On the date  of  the Employer's annual meeting of
shareholders, or within thirty (30) days thereafter, and on each subsequent
annual meeting of shareholders during the term  of this Agreement, Employer
shall review the previous year's performance of Employee for the purpose of
making  reasonable  increases  to  Employee's  Base Salary;  PROVIDED  that
Employer shall not be required to increase Employee's  Base Salary, but may
do so at its discretion.

     4.3.  CASH BONUSES.  In addition to the Base Salary  provided  for  in
sections 4.1  and  4.2,  Employee  is  eligible to receive bonuses based on
Employer performance and Employee's attainment  of  objectives periodically
established by Employer.

     4.4. STOCK OPTION GRANTS.  In addition to Base Salary  provided for in
sections  4.1 and 4.2, Employee is eligible to receive in addition  to  any
cash bonus provided for in section 4.3. an award of stock options as may be
determined  from  time  to  time by Employer's Compensation Committee which
consists of disinterested directors  who administer Employer's Amended 1994
Stock Option Plan.  Pursuant to Employee's engagement under this Agreement,
Employee shall be granted an initial stock option to acquire 120,000 shares
of the Company's common stock, which grant  and  effective  exercise  price
will  be  established by the Company's compensation committee no later than
January 1997.

     4.5. PROFESSIONAL  DUES;  PROFESSIONAL ASSOCIATION. Employer shall pay
annually Employee's California State  Bar  dues  and  annual  dues  for the
American  Corporate  Counsel  Association.   In  addition to the foregoing,
Employer  shall pay all costs and expenses for Employee  to  attend  annual
continuing education seminars at a cost not to exceed $7,500 annually.

     4.6. VACATION AND SICK LEAVE.  Employee shall be entitled to accrue up
to four (4)  weeks vacation annually; provided, however, that vacation time
may not accrue  beyond  two weeks of accrued and unused time.  Vacation pay
shall not accrue beyond two (2) weeks at any given time.  Employee shall be
entitled to sick leave in  accordance with Employer's sick leave policy, as
amended  from time to time.   At  the  end  of  each  anniversary  of  this
Agreement,  subject  to the limit on two weeks accrued and unused vacation,
all such unused and accrued vacation time shall be paid in cash.

     4.7. OTHER FRINGE  BENEFITS.   Employee  shall  participate  in all of
Employer's fringe benefit programs in substantially the same manner  and to
substantially  the  same  extent  as  other  similar employees of Employer,
excluding only those benefits expressly modified by the terms hereof.

     4.8. EXPENSES.   Employee  shall  be  reimbursed  for  his  reasonable
business expenses; subject to the presentation of evidence of such expenses
in accordance with established policies adopted  by  Employer  from time to
time.

     4.9. COMPENSATION  FROM  OTHER  SOURCES.   Any  proceeds that Employee
shall receive by virtue of qualifying for disability insurance,  disability
benefits,  or  health  or  accident  insurance  shall  belong  to Employee.
Employee  shall not be paid Base Salary in any period in which he  receives
benefits as  determined  and  paid  under  Employer's  long-term disability
policy.   Benefits paid to Employee under Employer's short-term  disability
policy shall  reduce,  by  the same amount, Base Salary payable to Employee
for such period.

5.   EARLY  TERMINATION.   Employee's   employment  with  Employer  may  be
terminated prior to the expiration of the  term of this Agreement, upon any
of the following events:  (i) the mutual agreement of Employer and Employee
in writing; (ii) the disability of Employee,  which shall, for the purposes
of this Agreement, mean Employee's inability, for  a period exceeding three
(3)  months  as  determined by a qualified physician, and  which  qualifies
Employee for benefits  under  Employer's  long-term  disability  policy, to
perform  in  the  usual  manner the material duties usually and customarily
pertaining  to Employee's long-term  employment;  (iii)  Employee's  death;
(iv) notice of  termination by Employer for cause; (v) Employer's cessation
of business; (vi)  written  notice of termination by Employer without cause
upon fourteen (14) days' notice, subject to the provisions for compensation
upon early termination in section  5.3(b);  or  (vii)  upon  a   Change  in
Control  (as  defined  below)  of  Employer  (as  defined  in and under the
circumstances described in section 5.4).

     5.1. DEFINITION OF CAUSE.  For purposes of this Agreement,  any of the
following  shall  constitute  cause:   (i)  willful  or habitual breach  of
Employee's duties; (ii) fraud or intentional material  misrepresentation by
Employee to Employer or any others; (iii) theft or conversion  by Employee;
(iv)  unauthorized  disclosure  or  other  use of Employer's trade secrets,
customer lists or confidential information;  (v) habitual misuse of alcohol
or any nonprescribed drug or intoxicant; or (vi)  willful  violation of any
other standards of conduct as set forth in Employer's employee manual.

     5.2. DAMAGES.   If  Employer  terminates Employee for cause,  Employer
shall be entitled to damages and all  other  remedies to which Employer may
otherwise be entitled.

     5.3. COMPENSATION UPON EARLY TERMINATION.

(a)If  Employee  resigns  during the term of this  Agreement,  or  if  this
Agreement is terminated by  Employer  for cause, Employee shall be entitled
to all accrued but unpaid Base Salary and  vacation pay accrued through the
date of delivery of notice of termination.

     (b)If  Employee is terminated without cause,  Employer  shall  pay  to
Employee the  greater  of (i) six (6) months of Employee's salary excluding
any amounts for benefits  or  automobile allowance; or (ii) an amount equal
to the then current per month Base  Salary  multiplied  by  the  number  of
calendar  months  remaining  under  the term of this Agreement.  Employer's
payment pursuant to this subparagraph  shall fully and completely discharge
any and all obligations of Employer to Employee  arising  out of or related
to this Agreement and shall constitute liquidated damages in  lieu  of  any
and  all  claims which Employee may have against Employer not including any
obligation  under  the  workers'  compensation  laws  including  Employer's
liability provisions.

     Initials: Employee  _________ Employer   _________

     (c)If  Employee's  employment  is  terminated as a result of death  or
total disability, Employee shall be entitled  to  accrued  but  unpaid Base
Salary to date of termination.  The date of termination shall be deemed the
date  of  death or, in the event of disability, the date Employee qualified
for total disability payments under Employer's long-term disability plan.

     (d)If  Employee's  employment is terminated as a result of a Change in
Control of Employer, Employee  shall  be  entitled  to   a lump-sum payment
equal to three times the Employee's Base Salary at the time.   A "Change in
Control" shall mean an event involving one transaction or a related  series
of  transactions  in which one of the following occurs: (i) Employer issues
securities equal to 33% or more of Employer's issued and outstanding voting
securities,  determined  as  a  single  class,  to  any  individual,  firm,
partnership or  other  entity,  including  a  "group" within the meaning of
section  13(d)(3) of the Securities Exchange Act  of  1934;  (ii)  Employer
issues securities equal to 33% or more of the issued and outstanding common
stock of Employer  in  connection  with  a  merger,  consolidation or other
business  combination;  (iii)  Employer is acquired in a  merger  or  other
business combination transaction  in  which  Employer  is not the surviving
company; or (iv) all or substantially all of Employer's  assets are sold or
transferred.

     (e)Except   as   expressly  provided  in  paragraph  (d)  above,   all
compensation described  in  this  section  5.3  shall be due and payable in
installments at least bi-weekly or at the time of the delivery of notice of
termination, at Employer's discretion.

6.   CONFIDENTIAL  INFORMATION OF CUSTOMERS OF EMPLOYER.   Employee  during
the  course  of  his  duties   will   be  handling  financial,  accounting,
statistical, marketing and personnel information  of customers of Employer.
All such information is confidential and shall not  be  disclosed, directly
or indirectly, or used by Employee in any way, either during  the  term  of
this  Agreement  or at any time thereafter except as required in the course
of Employee's employment with Employer.

7.   UNFAIR COMPETITION.  During the term of this Agreement, Employee shall
not, directly or indirectly,  whether  as  a  partner,  employee, creditor,
shareholder, or otherwise, promote, participate, or engage  in any activity
or other business which is competitive in any way with Employer's business.
The obligation of the Employee not to compete with the Employer  shall  not
prohibit  the  Employee  from owning or purchasing any corporate securities
that are regularly traded  on  a  recognized stock exchange or on over-the-
counter market.  In order to protect  the  trade secrets of Employer, after
the term, or upon earlier termination of this Agreement, the Employee shall
not, directly or indirectly, either as an employee,  employer, consultants,
agent, principal, partner, stockholder, corporate officer, director, or any
other individual or representative capacity, engage or  participate  in any
business  that  is  in direct competition with the business of the Employer
for a period of one (1)  year  from  the  date  of  the  expiration of this
Agreement in the areas related to blood processing equipment or procedures.

8.   TRADE SECRETS.  Employee shall not disclose to any others,  or take or
use for Employee's own purposes or purposes of any others, during  the term
of  this  Agreement  or  at  any  time  thereafter, any of Employer's trade
secrets, including without limitation, confidential  information,  customer
lists, computer programs or computer software of Employer.  Employee agrees
that these restrictions shall also apply to (i) trade secrets belonging  to
third  parties  in  Employer's possession and (ii) trade secrets conceived,
originated, discovered  or  developed  by  Employee during the term of this
Agreement.   Information of Employer shall not be considered a trade secret
if it is lawfully known outside of Employer  by  anyone who does not have a
duty to keep such information confidential.

     8.1  INVENTIONS; OWNERSHIP RIGHTS.  Employee  agrees  that  all ideas,
techniques,   inventions,   systems,   formulas,   discoveries,   technical
information, programs, prototypes and similar developments ("Developments")
developed,  created,  discovered, made, written or obtained by Employee  in
the course of or as a result, directly or indirectly, of performance of his
duties hereunder, and all  related  industrial property, copyrights, patent
rights, trade secrets and other forms  of  protection thereof, shall be and
remain the property of Employer.  Employee agrees to execute or cause to be
executed  such  assignments  and  applications,   registrations  and  other
documents and to take such other action as may be requested  by Employer to
enable  Employer  to  protect  its  rights  to  any such Developments.   If
Employer  requires  Employee's  assistance  under this  section  8.1  after
termination of this Agreement, Employee shall  be  compensated for his time
actually spent in providing such assistance at an hourly rate equivalent to
the prevailing rate for such services and as agreed upon by the parties.

9.   ARBITRATION.  Any disputes regarding the rights  or obligations of the
parties  under this Agreement shall be conclusively determined  by  binding
arbitration.   Any  controversy or claim arising out of or relating to this
contract,  or the breach  thereof,  shall  be  settled  by  arbitration  in
accordance  with   the   Commercial   Arbitration  Rules  of  the  American
Arbitration  Association,  and judgment upon  the  award  rendered  by  the
arbitrator(s) may be entered in any court having jurisdiction thereof.

10.  ACTIONS CONTRARY TO LAW.  Nothing contained in this Agreement shall be
construed  to require the commission  of  any  act  contrary  to  law,  and
whenever there  is any conflict between any provision of this Agreement and
any statute, law,  ordinance,  or regulation, contrary to which the parties
have no legal right to contract, then the latter shall prevail; but in such
event, the provisions of this Agreement  so affected shall be curtailed and
limited only to the extent necessary to bring it within legal requirements.

11.  MISCELLANEOUS.

     11.1.  NOTICES.   All  notices and demands  of  every  kind  shall  be
personally delivered or sent  by  first  class  mail  to the parties at the
addresses appearing below or at such other addresses as  either  party  may
designate  in  writing, delivered or mailed in accordance with the terms of
this Agreement.   Any  such notice or demand shall be effective immediately
upon personal delivery or three (3) days after deposit in the United States
mail, as the case may be.

         EMPLOYER: THERMOGENESIS CORP.
     11431 Sunrise Gold Cir., Suite A
     Rancho Cordova, California 95742

         EMPLOYEE: David C. Adams
     2 Jeresa Court
     Elk Grove, CA 95758

    11.2. ATTORNEYS' FEES;  PREJUDGMENT  INTEREST.   If  the services of an
attorney  are  required  by any party to secure the performance  hereof  or
otherwise upon the breach or default of another party to this Agreement, or
if any judicial remedy or  arbitration is necessary to enforce or interpret
any provision of this Agreement  or  the rights and duties of any person in
relation thereto, the prevailing party  shall  be  entitled  to  reasonable
attorneys' fees, costs and other expenses, in addition to any other  relief
to  which  such  party  may  be  entitled.   Any award of damages following
judicial remedy or arbitration as a result of  the breach of this Agreement
or  any of its provisions shall include an award  of  prejudgment  interest
from  the  date  of the breach at the maximum amount of interest allowed by
law.

    11.3. CHOICE OF LAW, JURISDICTION, VENUE.  This Agreement is drafted to
be  effective in the  State  of  California,  and  shall  be  construed  in
accordance  with  California  law.  The exclusive jurisdiction and venue of
any legal action by either party  under  this Agreement shall be the County
of Sacramento, California.

    11.4. AMENDMENT, WAIVER.  No amendment  or  variation  of  the terms of
this Agreement shall be valid unless made in writing and signed by Employee
and  Employer.   A waiver of any term or condition of this Agreement  shall
not be construed as  a  general  waiver  by  Employer.   Failure  of either
Employer  or  Employee  to  enforce  any  provision  or  provisions of this
Agreement shall not waive any enforcement of any continuing  breach  of the
same  provision  or provisions or any breach of any provision or provisions
of this Agreement.

    11.5. ASSIGNMENT;  SUCCESSION.   It  is  hereby  agreed that Employee's
rights  and  obligations  under  this  Agreement  are  personal   and   not
assignable.  This Agreement contains the entire agreement and understanding
between  the parties to it and shall be binding on and inure to the benefit
of the heirs,  personal  representatives,  successors  and  assigns  of the
parties hereto.
    11.6.  INDEPENDENT  COVENANTS.  All provisions herein concerning unfair
competition and confidentiality  shall  be deemed independent covenants and
shall be enforceable without regard to any  breach  by Employer unless such
breach by Employer is willful and egregious.

    11.7. ENTIRE AGREEMENT.  This document constitutes the entire agreement
between  the  parties,  all  oral  agreements  being  merged   herein,  and
supersedes  all  prior  representations.   There  are  no  representations,
agreements,  arrangements, or understandings, oral or written,  between  or
among the parties relating to the subject matter of this Agreement that are
not fully expressed herein.

    11.8. SEVERABILITY.   If  any  provision of this Agreement is held by a
court  of  competent  jurisdiction  to be  invalid  or  unenforceable,  the
remainder of the Agreement which can  be  given  effect without the invalid
provision shall continue in full force and effect  and  shall  in no way be
impaired or invalidated.

     11.9.  CAPTIONS.   All  captions  of  sections and paragraphs in  this
Agreement are for reference only and shall not  be considered in construing
this Agreement.


     EMPLOYER: THERMOGENESIS CORP.



                             By:_______________________________________
     (Philip H. Coelho, President and C.E.O.)



     EMPLOYEE: DAVID C. ADAMS


     By:




<PAGE>
                            EXHIBIT "A"

                   EMPLOYEE POSITION DESCRIPTION


               7156\5596\DCA\132716.1





                                                     EXHIBIT 23.1




            CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS



We consent to the incorporation by reference in the Registration Statements
(Form  S-8  Nos.  333-28653,  333-08661,  and  33-45532)  pertaining to the
THERMOGENESIS CORP. Amended 1994 Stock Option Plan and in the  Registration
Statements   (Form   S-3   Nos.   333-23097,  333-1479,  and  33-63676)  of
THERMOGENESIS CORP. and in the related  Prospectuses  of  our  report dated
August  27, 1997, with respect to the financial statements and schedule  of
THERMOGENESIS  CORP. included in the Annual Report (Form 10-K) for the year
ended June 30, 1997.


                                                          ERNST & YOUNG LLP

Sacramento, California
September 24, 1997







<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          JUN-30-1997
<PERIOD-END>                               JUN-30-1997
<CASH>                                       3,510,861
<SECURITIES>                                         0
<RECEIVABLES>                                2,165,903
<ALLOWANCES>                                    97,913
<INVENTORY>                                  2,579,368
<CURRENT-ASSETS>                             8,406,038
<PP&E>                                       2,029,016
<DEPRECIATION>                                 670,269
<TOTAL-ASSETS>                              10,187,726
<CURRENT-LIABILITIES>                        1,998,801
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                        15,866
<OTHER-SE>                                   8,008,776
<TOTAL-LIABILITY-AND-EQUITY>                10,187,726
<SALES>                                      6,614,044
<TOTAL-REVENUES>                             6,728,416
<CGS>                                        4,326,964
<TOTAL-COSTS>                                4,326,964
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                              75,070
<INCOME-PRETAX>                            (4,805,822)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                        (4,805,822)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                               (4,805,822)
<EPS-PRIMARY>                                    (.32)
<EPS-DILUTED>                                    (.32)
        

</TABLE>