¨2023
BioLife Solutions, Inc.
Delaware | 94-3076866 | ||||
(State or other jurisdiction of incorporation or organization) |
| ||||
| Title of each class | Trading symbol | Name of exchange on which registered | ||||||
| Common stock, par value $0.001 per share | BLFS | The NASDAQ Stock Market, LLC | ||||||
2023
| OTHER INFORMATION | |||||||||
(Unaudited)
| September 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 2,830,541 | $ | 1,405,826 | ||||
| Accounts receivable, trade, net of allowance for doubtful accounts of $6,575 and $0 at September 30, 2017 and December 31, 2016, respectively | 1,355,115 | 1,193,646 | ||||||
| Inventories | 1,861,058 | 1,757,784 | ||||||
| Prepaid expenses and other current assets | 320,318 | 270,814 | ||||||
| Total current assets | 6,367,032 | 4,628,070 | ||||||
| Property and equipment | ||||||||
| Leasehold improvements | 1,284,491 | 1,284,491 | ||||||
| Furniture and computer equipment | 681,096 | 650,912 | ||||||
| Manufacturing and other equipment | 1,075,049 | 922,220 | ||||||
| Subtotal | 3,040,636 | 2,857,623 | ||||||
| Less: Accumulated depreciation | (1,930,140 | ) | (1,670,245 | ) | ||||
| Net property and equipment | 1,110,496 | 1,187,378 | ||||||
| Investment in SAVSU | 1,367,792 | 2,075,000 | ||||||
| Long term deposits | 36,166 | 36,166 | ||||||
| Total assets | $ | 8,881,486 | $ | 7,926,614 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 420,387 | $ | 710,719 | ||||
| Accrued expenses and other current liabilities | 170,419 | 116,399 | ||||||
| Accrued compensation | 368,321 | 175,829 | ||||||
| Deferred rent | 130,216 | 130,216 | ||||||
| Total current liabilities | 1,089,343 | 1,133,163 | ||||||
| Promissory note payable to related party, net of discount of $155,996 at December 31, 2016 | –– | 2,844,004 | ||||||
| Accrued interest, related party | –– | 97,857 | ||||||
| Deferred rent, long-term | 526,365 | 685,450 | ||||||
| Other long-term liabilities | 51,235 | –– | ||||||
| Total liabilities | 1,666,943 | 4,760,474 | ||||||
| Commitments and contingencies (Note 8) | ||||||||
| Shareholders’ equity | ||||||||
| Preferred stock, $0.001 par value; 1,000,000 shares authorized, Series A, 4,250 shares designated, and 4,250 and 0 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 4 | –– | ||||||
| Common stock, $0.001 par value; 150,000,000 shares authorized, 13,333,297 and 12,863,824 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 13,333 | 12,864 | ||||||
| Additional paid-in capital | 80,494,953 | 74,355,645 | ||||||
| Accumulated deficit | (73,293,747 | ) | (71,202,369 | ) | ||||
| Total shareholders’ equity | 7,214,543 | 3,166,140 | ||||||
| Total liabilities and shareholders’ equity | $ | 8,881,486 | $ | 7,926,614 | ||||
| September 30, | December 31, | ||||||||||
| (In thousands, except per share and share data) | 2023 | 2022 | |||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 19,235 | $ | 19,442 | |||||||
| Restricted cash | 31 | 31 | |||||||||
| Available-for-sale securities, current portion | 21,794 | 43,260 | |||||||||
| Accounts receivable, trade, net of allowance for credit losses of $1,244 and $739 as of September 30, 2023 and December 31, 2022, respectively | 24,556 | 33,936 | |||||||||
| Inventories | 43,354 | 34,904 | |||||||||
| Prepaid expenses and other current assets | 7,854 | 6,879 | |||||||||
| Total current assets | 116,824 | 138,452 | |||||||||
| Assets held for rent, net | 7,209 | 9,064 | |||||||||
| Property and equipment, net | 20,998 | 23,638 | |||||||||
| Operating lease right-of-use assets, net | 12,651 | 15,292 | |||||||||
| Financing lease right-of-use assets, net | 124 | 272 | |||||||||
| Long-term deposits and other assets | 316 | 281 | |||||||||
| Available-for-sale securities, long-term | 1,156 | 1,332 | |||||||||
| Equity investments | 5,069 | 5,069 | |||||||||
| Intangible assets, net | 22,064 | 32,088 | |||||||||
| Goodwill | 224,741 | 224,741 | |||||||||
| Total assets | $ | 411,152 | $ | 450,229 | |||||||
Liabilities and Shareholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 11,980 | $ | 15,367 | |||||||
| Accrued expenses and other current liabilities | 8,568 | 9,782 | |||||||||
| Sales taxes payable | 5,469 | 4,151 | |||||||||
| Warranty liability | 8,215 | 8,312 | |||||||||
| Lease liabilities, operating, current portion | 2,906 | 2,860 | |||||||||
| Lease liabilities, financing, current portion | 398 | 158 | |||||||||
| Debt, current portion | 5,034 | 1,814 | |||||||||
| Contingent consideration, current portion | 52 | 2,138 | |||||||||
| Total current liabilities | 42,622 | 44,582 | |||||||||
| Contingent consideration, long-term | 363 | 2,318 | |||||||||
| Lease liabilities, operating, long-term | 13,677 | 14,962 | |||||||||
| Lease liabilities, financing, long-term | 1,250 | 126 | |||||||||
| Debt, long-term | 20,937 | 23,793 | |||||||||
| Deferred tax liabilities | 286 | 250 | |||||||||
| Other long-term liabilities | - | 10 | |||||||||
| Total liabilities | 79,135 | 86,041 | |||||||||
| Commitments and contingencies (Note 13) | |||||||||||
| Shareholders’ equity: | |||||||||||
| Preferred stock, $0.001 par value; 1,000,000 shares authorized, Series A, 4,250 shares designated, and 0 shares issued and outstanding as of September 30, 2023 and December 31, 2022 | - | - | |||||||||
| Common stock, $0.001 par value; 150,000,000 shares authorized, 43,831,351 and 42,832,231 shares issued and outstanding, respectively, as of September 30, 2023 and December 31, 2022 | 44 | 43 | |||||||||
| Additional paid-in capital | 632,593 | 611,739 | |||||||||
| Accumulated other comprehensive loss, net of taxes | (660) | (679) | |||||||||
| Accumulated deficit | (299,960) | (246,915) | |||||||||
| Total shareholders’ equity | 332,017 | 364,188 | |||||||||
| Total liabilities and shareholders’ equity | $ | 411,152 | $ | 450,229 | |||||||
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Product sales | $ | 2,963,411 | $ | 2,135,197 | $ | 7,887,377 | $ | 5,977,202 | ||||||||
| Cost of product sales | 1,095,724 | 920,935 | 2,980,965 | 2,564,775 | ||||||||||||
| Gross profit | 1,867,687 | 1,214,262 | 4,906,412 | 3,412,427 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | 293,093 | 496,874 | 898,451 | 1,600,144 | ||||||||||||
| Sales and marketing | 488,688 | 816,025 | 1,547,087 | 2,399,131 | ||||||||||||
| General and administrative | 1,118,251 | 1,039,223 | 3,298,461 | 3,637,333 | ||||||||||||
| Total operating expenses | 1,900,032 | 2,352,122 | 5,743,999 | 7,636,608 | ||||||||||||
| Operating loss | (32,345 | ) | (1,137,860 | ) | (837,587 | ) | (4,224,181 | ) | ||||||||
| Other income (expenses), net | ||||||||||||||||
| Interest income | 103 | 30 | 227 | 2,394 | ||||||||||||
| Loss on disposal of property and equipment | –– | (1,213 | ) | –– | (1,213 | ) | ||||||||||
| Interest expense | (1,077 | ) | (33,334 | ) | (188,992 | ) | (41,667 | ) | ||||||||
| Amortization of debt discount | –– | (93,598 | ) | (155,996 | ) | (124,797 | ) | |||||||||
| Write-off of deferred financing costs | (67,664 | ) | –– | (67,664 | ) | (86,736 | ) | |||||||||
| Loss from equity-method investment in SAVSU | (217,735 | ) | –– | (707,208 | ) | –– | ||||||||||
| Total other income (expenses), net | (286,373 | ) | (128,115 | ) | (1,119,633 | ) | (252,019 | ) | ||||||||
| Net loss | (318,718 | ) | (1,265,975 | ) | (1,957,220 | ) | (4,476,200 | ) | ||||||||
| Net loss attributable to non-controlling interest | –– | 296,974 | –– | 924,288 | ||||||||||||
| Net loss attributable to BioLife Solutions, Inc. | (318,718 | ) | (969,001 | ) | (1,957,220 | ) | (3,551,912 | ) | ||||||||
| Less: Preferred stock dividends | (106,250 | ) | — | (106,250 | ) | — | ||||||||||
| Net loss attributable to common stockholders | $ | (424,968 | ) | $ | (969,001 | ) | $ | (2,063,470 | ) | $ | (3,551,912 | ) | ||||
| Basic and diluted net loss per common share attributable to BioLife Solutions, Inc. | $ | (0.03 | ) | $ | (0.08 | ) | $ | (0.16 | ) | $ | (0.28 | ) | ||||
| Basic and diluted weighted average common shares used to calculate net loss per common share | 13,238,248 | 12,699,419 | 13,102,238 | 12,575,560 | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands, except per share and share data) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Product revenue | $ | 26,891 | $ | 33,668 | $ | 91,520 | $ | 98,227 | |||||||||||||||
| Service revenue | 4,378 | 4,330 | 13,043 | 11,117 | |||||||||||||||||||
| Rental revenue | 2,059 | 2,749 | 5,975 | 8,156 | |||||||||||||||||||
| Total product, rental, and service revenue | 33,328 | 40,747 | 110,538 | 117,500 | |||||||||||||||||||
| Costs and operating expenses: | |||||||||||||||||||||||
| Cost of product revenue (exclusive of intangible assets amortization) | 16,665 | 21,876 | 57,022 | 63,377 | |||||||||||||||||||
| Cost of service revenue (exclusive of intangible assets amortization) | 3,945 | 3,253 | 11,873 | 8,810 | |||||||||||||||||||
| Cost of rental revenue (exclusive of intangible assets amortization) | 1,069 | 1,880 | 4,141 | 5,462 | |||||||||||||||||||
| General and administrative | 12,513 | 11,916 | 42,757 | 35,098 | |||||||||||||||||||
| Sales and marketing | 7,256 | 5,278 | 20,045 | 15,601 | |||||||||||||||||||
| Research and development | 5,402 | 3,425 | 14,397 | 10,634 | |||||||||||||||||||
| Asset impairment charges | 15,485 | — | 15,485 | 69,900 | |||||||||||||||||||
| Intangible asset amortization | 1,356 | 2,513 | 4,266 | 8,236 | |||||||||||||||||||
| Change in fair value of contingent consideration | (1,580) | 2,346 | (1,778) | (3,348) | |||||||||||||||||||
| Total operating expenses | 62,111 | 52,487 | 168,208 | 213,770 | |||||||||||||||||||
| Operating loss | (28,783) | (11,740) | (57,670) | (96,270) | |||||||||||||||||||
| Other (expense) income: | |||||||||||||||||||||||
| Change in fair value of investments | — | 697 | — | 697 | |||||||||||||||||||
| Gain on settlement of Global Cooling escrow | — | — | 5,115 | — | |||||||||||||||||||
| Interest expense, net | (476) | (15) | (1,305) | (250) | |||||||||||||||||||
| Other income | 242 | 142 | 1,027 | 270 | |||||||||||||||||||
| Total other (expense) income, net | (234) | 824 | 4,837 | 717 | |||||||||||||||||||
| Loss before income tax (expense) benefit | (29,017) | (10,916) | (52,833) | (95,553) | |||||||||||||||||||
| Income tax (expense) benefit | (115) | 599 | (212) | 4,937 | |||||||||||||||||||
| Net loss | $ | (29,132) | $ | (10,317) | $ | (53,045) | $ | (90,616) | |||||||||||||||
| Net loss attributable to common shareholders: | |||||||||||||||||||||||
| Basic and Diluted | $ | (29,132) | $ | (10,317) | $ | (53,045) | $ | (90,616) | |||||||||||||||
| Net loss per share attributable to common shareholders: | |||||||||||||||||||||||
| Basic and Diluted | $ | (0.67) | $ | (0.24) | $ | (1.22) | $ | (2.14) | |||||||||||||||
| Weighted average shares used to compute loss per share attributable to common shareholders: | |||||||||||||||||||||||
| Basic and Diluted | 43,570,438 | 42,647,967 | 43,348,412 | 42,376,392 | |||||||||||||||||||
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net loss | $ | (318,718 | ) | $ | (1,265,975 | ) | $ | (1,957,220 | ) | $ | (4,476,200 | ) | ||||
| Other comprehensive income | ||||||||||||||||
| Unrealized gain on available-for-sale investments | –– | –– | –– | 451 | ||||||||||||
| Total other comprehensive income | –– | –– | –– | 451 | ||||||||||||
| Comprehensive loss | (318,718 | ) | (1,265,975 | ) | (1,957,220 | ) | (4,475,749 | ) | ||||||||
| Comprehensive loss attributable to non- Controlling interest | –– | 296,974 | –– | 924,288 | ||||||||||||
| Comprehensive loss attributable to BioLife Solutions, Inc. | $ | (318,718 | ) | $ | (969,001 | ) | $ | (1,957,220 | ) | $ | (3,551,461 | ) | ||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Net loss | $ | (29,132) | $ | (10,317) | $ | (53,045) | $ | (90,616) | |||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Foreign currency translation adjustment, net of tax | (165) | (321) | (25) | (900) | |||||||||||||||||||
| Unrealized gain (loss) on available-for-sale securities, net of tax | 4 | (36) | 44 | (75) | |||||||||||||||||||
| Comprehensive loss | $ | (29,293) | $ | (10,674) | $ | (53,026) | $ | (91,591) | |||||||||||||||
(unaudited)
| Nine Month Period Ended September 30, | ||||||||
| 2017 | 2016 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (1,957,220 | ) | $ | (4,476,200 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation | 259,895 | 276,346 | ||||||
| Loss on disposal of property and equipment | –– | 1,213 | ||||||
| Stock-based compensation expense | 957,711 | 583,847 | ||||||
| Stock issued for services | 71,250 | –– | ||||||
| Write-off of deferred financing costs | 67,664 | 86,736 | ||||||
| Amortization of deferred rent related to lease incentives | (95,249 | ) | (95,248 | ) | ||||
| Amortization of debt discount | 155,996 | 124,797 | ||||||
| Accretion and amortization on available for sale investments | –– | 1,792 | ||||||
| Loss from equity-method investment in SAVSU | 707,208 | –– | ||||||
| Change in operating assets and liabilities | ||||||||
| (Increase) Decrease in | ||||||||
| Accounts receivable, trade | (159,851 | ) | (381,717 | ) | ||||
| Inventories | (103,274 | ) | (69,124 | ) | ||||
| Prepaid expenses and other current assets | (101,479 | ) | (29,692 | ) | ||||
| Increase (Decrease) in | ||||||||
| Accounts payable | (227,732 | ) | 361,900 | |||||
| Accrued compensation and other current liabilities | 138,885 | (107,586 | ) | |||||
| Accrued interest | 152,143 | 39,524 | ||||||
| Deferred rent | (63,836 | ) | 24,541 | |||||
| Net cash used in operating activities | (197,889 | ) | (3,658,871 | ) | ||||
| Cash flows from investing activities | ||||||||
| Sales of available-for-sale investments | –– | 1,650,000 | ||||||
| Costs associated with internal use software development | –– | (857,453 | ) | |||||
| Purchase of property and equipment | (91,443 | ) | (130,118 | ) | ||||
| Net cash provided by (used in) investing activities | (91,443 | ) | 662,429 | |||||
| Cash flows from financing activities | ||||||||
| Proceeds from related party debt | 1,000,000 | 2,000,000 | ||||||
| Payments on equipment loan | (10,628 | ) | –– | |||||
| Payments on capital lease obligations | (7,631 | ) | –– | |||||
| Payments related to preferred stock issuance | (9,303 | ) | –– | |||||
| Proceeds from exercise of common stock options and warrants | 784,273 | 278,503 | ||||||
| Deferred costs related to potential stock issuance | (42,664 | ) | (86,736 | ) | ||||
| Net cash provided by financing activities | 1,714,047 | 2,191,767 | ||||||
| Net increase (decrease) in cash and cash equivalents | 1,424,715 | (804,675 | ) | |||||
| Cash and cash equivalents - beginning of period | 1,405,826 | 2,173,258 | ||||||
| Cash and cash equivalents - end of period | $ | 2,830,541 | $ | 1,368,583 | ||||
| Non-cash investing and financing activities | ||||||||
| Costs incurred for capitalized internal use software not paid as of quarter end (amounts are included in liabilities) | $ | –– | $ | 109,500 | ||||
| Stock issued for services provided in prior period included in liabilities at year-end | 35,624 | –– | ||||||
| Preferred stock issued on conversion of related party note payable and accrued interest | 4,250,000 | –– | ||||||
| Preferred stock dividends accrued | 106,250 | –– | ||||||
| Capital lease obligations incurred for purchases of equipment | 52,327 | –– | ||||||
| Purchase of equipment with debt | 39,243 | –– | ||||||
| Debt discount related to warrants | –– | 374,390 | ||||||
Shareholders
’ Equity| Nine Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands, except share data) | Series A Preferred Stock Shares | Series A Preferred Stock Amount | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2022 | - | $ | - | 42,832,231 | $ | 43 | $ | 611,739 | $ | (679) | $ | (246,915) | $ | 364,188 | |||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | 23,337 | - | - | 23,337 | |||||||||||||||||||||||||||||||||||||||
| Stock option exercises | - | - | 175,043 | - | 369 | - | - | 369 | |||||||||||||||||||||||||||||||||||||||
| Stock issued – on vested RSAs | - | - | 923,128 | 1 | - | - | - | 1 | |||||||||||||||||||||||||||||||||||||||
| Contingent consideration shares issued | - | - | 116,973 | - | 2,263 | - | - | 2,263 | |||||||||||||||||||||||||||||||||||||||
| Settlement of Global Cooling escrow | - | - | (216,024) | - | (5,115) | - | - | (5,115) | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | - | - | - | (25) | - | (25) | |||||||||||||||||||||||||||||||||||||||
| Unrealized gain on available-for-sale securities | - | - | - | - | - | 44 | - | 44 | |||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | (53,045) | (53,045) | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2023 | - | $ | - | 43,831,351 | $ | 44 | $ | 632,593 | $ | (660) | $ | (299,960) | $ | 332,017 | |||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands, except share data) | Series A Preferred Stock Shares | Series A Preferred Stock Amount | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2023 | - | $ | - | 43,442,250 | $ | 43 | $ | 623,412 | $ | (499) | $ | (270,828) | $ | 352,128 | |||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | 9,117 | - | - | 9,117 | |||||||||||||||||||||||||||||||||||||||
| Stock option exercises | - | - | 31,000 | - | 64 | - | - | 64 | |||||||||||||||||||||||||||||||||||||||
| Stock issued – on vested RSAs | - | - | 358,101 | 1 | - | - | - | 1 | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | - | - | - | (165) | - | (165) | |||||||||||||||||||||||||||||||||||||||
| Unrealized gain on available-for-sale securities | - | - | - | - | - | 4 | - | 4 | |||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | (29,132) | (29,132) | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2023 | - | $ | - | 43,831,351 | $ | 44 | $ | 632,593 | $ | (660) | $ | (299,960) | $ | 332,017 | |||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands, except share data) | Series A Preferred Stock Shares | Series A Preferred Stock Amount | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2021 | - | $ | - | 41,817,503 | $ | 42 | $ | 585,397 | $ | (282) | $ | (107,110) | $ | 478,047 | |||||||||||||||||||||||||||||||||
| Fees incurred for registration filings | - | - | - | - | (130) | - | - | (130) | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | 17,671 | - | - | 17,671 | |||||||||||||||||||||||||||||||||||||||
| Stock option exercises | - | - | 158,075 | - | 307 | - | - | 307 | |||||||||||||||||||||||||||||||||||||||
| Stock issued – on vested RSAs | - | - | 666,336 | 1 | (1) | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Contingent consideration shares issued | - | - | 64,130 | - | 816 | - | - | 816 | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | - | - | - | (900) | - | (900) | |||||||||||||||||||||||||||||||||||||||
| Unrealized loss on available-for-sale securities | - | - | - | - | - | (75) | - | (75) | |||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | (90,616) | (90,616) | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2022 | - | $ | - | 42,706,044 | $ | 43 | $ | 604,060 | $ | (1,257) | $ | (197,726) | $ | 405,120 | |||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands, except share data) | Series A Preferred Stock Shares | Series A Preferred Stock Amount | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2022 | - | $ | - | 42,536,734 | $ | 43 | $ | 597,810 | $ | (900) | $ | (187,409) | $ | 409,544 | |||||||||||||||||||||||||||||||||
| Fees incurred for registration filings | - | - | - | - | (55) | - | - | (55) | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | 6,299 | - | - | 6,299 | |||||||||||||||||||||||||||||||||||||||
| Stock option exercises | - | - | 3,571 | - | 6 | - | - | 6 | |||||||||||||||||||||||||||||||||||||||
| Stock issued – on vested RSAs | - | - | 165,739 | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | - | - | - | (321) | - | (321) | |||||||||||||||||||||||||||||||||||||||
| Unrealized loss on available-for-sale securities | - | - | - | - | - | (36) | - | (36) | |||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | (10,317) | (10,317) | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2022 | - | $ | - | 42,706,044 | $ | 43 | $ | 604,060 | $ | (1,257) | $ | (197,726) | $ | 405,120 | |||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||
| (In thousands) | 2023 | 2022 | |||||||||
| Cash flows from operating activities | |||||||||||
| Net loss | $ | (53,045) | $ | (90,616) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities | |||||||||||
| Impairment of intangible assets | 5,758 | 69,900 | |||||||||
| Impairment of long-lived assets | 9,727 | - | |||||||||
| Settlement of Global Cooling escrow | (5,115) | - | |||||||||
| Depreciation | 5,646 | 5,056 | |||||||||
| Amortization of intangible assets | 4,266 | 8,236 | |||||||||
| Amortization of loan costs | 13 | - | |||||||||
| Stock-based compensation | 23,337 | 17,671 | |||||||||
| Non-cash lease expense | 494 | 1,025 | |||||||||
| Deferred income tax expense (benefit) | 36 | (4,937) | |||||||||
| Change in fair value of contingent consideration | (1,778) | (3,348) | |||||||||
| Change in fair value of equity investments | - | (697) | |||||||||
| Accretion of investments | (1,049) | - | |||||||||
| Loss on disposal of property and equipment, net | 227 | 54 | |||||||||
| Loss on disposal of assets held for rent, net | 443 | 369 | |||||||||
| Other | - | 302 | |||||||||
| Change in operating assets and liabilities, net of effects of acquisitions | |||||||||||
| Accounts receivable, trade, net | 9,437 | (9,438) | |||||||||
| Inventories | (8,450) | (5,403) | |||||||||
| Prepaid expenses and other assets | (1,045) | (1,843) | |||||||||
| Accounts payable | (3,380) | (3,615) | |||||||||
| Accrued expenses and other current liabilities | (1,692) | 444 | |||||||||
| Warranty liability | (97) | (1,031) | |||||||||
| Sales taxes payable | 1,330 | 1,526 | |||||||||
| Other | 128 | - | |||||||||
| Net cash used in operating activities | (14,809) | (16,345) | |||||||||
| Cash flows from investing activities | |||||||||||
| Purchases of available-for-sale securities | (22,688) | (35,767) | |||||||||
| Proceeds from sale of available-for-sale securities | 2,971 | - | |||||||||
| Maturities of available-for-sale securities | 42,450 | 750 | |||||||||
| Purchases of assets held for rent | (3,453) | (2,269) | |||||||||
| Purchases of property and equipment | (5,400) | (5,937) | |||||||||
| Net cash provided by (used in) investing activities | 13,880 | (43,223) | |||||||||
| Cash flows from financing activities | |||||||||||
| Payments on equipment loans | (383) | (370) | |||||||||
| Proceeds from exercise of common stock options | 370 | 307 | |||||||||
| Proceeds from term loans | - | 20,000 | |||||||||
| Payments on term loans | (300) | (1,750) | |||||||||
| Fees paid related to issuance of common stock | - | (130) | |||||||||
| Proceeds from financed insurance premium | 2,639 | ||||||||||
| Payments on financed insurance premium | (1,653) | (814) | |||||||||
| Other | 77 | (302) | |||||||||
| Net cash provided by financing activities | 750 | 16,941 | |||||||||
| Net decrease in cash, cash equivalents, and restricted cash | (179) | (42,627) | |||||||||
| Cash, cash equivalents, and restricted cash – beginning of period | 19,473 | 69,870 | |||||||||
| Effects of currency translation on cash, cash equivalents, and restricted cash | (28) | (176) | |||||||||
| Cash, cash equivalents, and restricted cash – end of period | $ | 19,266 | $ | 27,067 | |||||||
| Non-cash investing and financing activities | |||||||||||
| Purchase of property and equipment not yet paid | $ | 4,064 | $ | 1,661 | |||||||
| Assets acquired under operating leases | $ | (880) | $ | 243 | |||||||
| Assets acquired under financing leases | $ | 1,682 | $ | - | |||||||
| Unrealized gains and losses on currency translation | $ | (11) | $ | - | |||||||
| Unrealized gains and losses on available-for-sale securities | $ | (44) | $ | 75 | |||||||
| Cashless issuance of SciSafe earnout shares | $ | 2,263 | $ | 817 | |||||||
| Cash interest paid | $ | 1,394 | $ | 230 | |||||||
| Returned shares from settlement of Global Cooling escrow | $ | (5,115) | $ | - | |||||||
(unaudited)
various other assumptions that it believes to be reasonable under the circumstances.
Wepresentation
performance.
Principlesglobal pandemic of Consolidation
the coronavirus (“COVID-19”) and the resulting volatility and uncertainty it caused in the U.S. and international markets. The consolidated financial statements foronset of the threeCOVID-19 pandemic caused supply chains globally to become constrained, and these constraints historically impacted our business through both increased difficulty in obtaining semiconductor chips and increased pricing on available parts. However, as of the nine months ended September 30, 2016 include the accounts2023, both availability and pricing of the Companysemiconductor chips have improved and its majority-owned subsidiary. All intercompany balancesno longer pose constraints on our supply chain. We currently have sufficient supply for electrical component parts within our operations and transactions have been eliminated in consolidation. The subsidiary was deconsolidated asdo not foresee constraints to return over our supply chain.
| Accounts Receivable | Revenue | ||||||||||||||||||||||||||||||||||
| September 30, | December 31, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||
| Customer A | * | 15 | % | * | * | * | * | ||||||||||||||||||||||||||||
| Customer B | 11 | % | * | 19 | % | 17 | % | 16 | % | 19 | % | ||||||||||||||||||||||||
| Customer C | * | 11 | % | * | * | * | * | ||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| Product revenue concentration | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| CryoStor | 33 | % | 38 | % | 39 | % | 35 | % | |||||||||||||||
| 780XLE Freezer | 23 | % | 21 | % | 19 | % | 22 | % | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
Revenue by customers’ geographic locations(1) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
North America(2) | 81 | % | 81 | % | 81 | % | 81 | % | |||||||||||||||
| Europe, Middle East, Africa (EMEA) | 15 | % | 16 | % | 16 | % | 16 | % | |||||||||||||||
| Other | 4 | % | 3 | % | 3 | % | 3 | % | |||||||||||||||
| Total revenue | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
Revenue from customers located in foreign countries represented 16% and 17%
Recent Accounting Pronouncements
ASC 2016-13, Measurement of Credit Losses on Financial Instruments, which later was codified as ASC 326 (CECL). In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). The updated guidance clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. Adoption of ASU 2016-15 is required for fiscal reporting periods beginning after December 15, 2017, including interim reporting periods within those fiscal years with early adoption being permitted. We do not expect the adoption of ASU 2016-15 to have a material impact on our financial statements.
In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU-2016-09). The updated guidance simplifies and changes how companies account for certain aspects of share-based payment awards to employees, including accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification of certain items in the statement of cash flows. The Company adopted ASU-2016-09 at the beginning of the first quarter of 2017. Dueaddition to the adoption of ASC 326, the Company adopted the accompanying ASU 2016-09No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. Both standards mark a significant change requiring the immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets. ASU 2022-02 specifically eliminates the accounting guidance for troubled debt restructurings and requires disclosure of current-period gross write-offs by year of loan origination. Additionally, ASU 2022-02 updates the accounting for credit losses under ASC 326 and adds enhanced disclosures with respect to loan refinancings and restructurings in the form of principal forgiveness, interest rate concessions, other-than-insignificant payment delays, or term extensions when the borrower is experiencing financial difficulties. ASC 326 is intended to improve financial reporting by corporations by requiring earlier recognition of credit losses on loans from corporations, held-to-maturity (HTM) securities, and certain other financial assets. ASC 326 also amended the impairment guidance for available-for-sale (AFS) debt securities in that it eliminated the Other Than Temporary Impairment (OTTI) impairment model. Under Subtopic ASC 326-30, Financial Instruments—Credit Losses—Available-for-Sale Debt Securities, changes in expected cash flows due to credit on AFS debt securities will be recorded through an accounting policy change was madeallowance, rather than permanent write-downs for negative changes and prospective yield adjustments for positive changes, as required by the current OTTI model. ASC 326 replaces the current incurred loss impairment model that recognizes losses when a probable threshold is met with a requirement to account for forfeitures as they occur and not estimated. No other material changes resulted from adopting ASU 2016-09. We usedrecognize lifetime expected credit losses immediately when a financial asset is originated or purchased. For the modified retrospective method for this adoption.
The table below shows the accumulated deficit activity for the nine monthsperiod ended September 30, 2017:
| Accumulative deficit | ||||
| BALANCE, December 31, 2016 | $ | (71,202,369 | ) | |
| Cumulative-effect adjustment resulting from adoption of ASU 2016-09 | (27,908 | ) | ||
| Preferred dividends declared | (106,250 | ) | ||
| Net loss | (1,957,220 | ) | ||
| BALANCE, September 30, 2017 | $ | (73,293,747 | ) | |
In February 2016, FASB issued Accounting Standards Update No. 2016-02, Leases: Topic 842 (ASU 2016-02) that replaces existing lease guidance. The new standard is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities2023, the adoption of ASC 326 did not result in a material effect on the balance sheet. UnderCompany’s Unaudited Condensed Consolidated financial statements.
| September 30, 2022 | |||||||||||||||||
| (In thousands) | As reported | Adjustment | As corrected | ||||||||||||||
| Prepaid expenses and other current assets | $ | 8,041 | $ | 341 | $ | 8,382 | |||||||||||
| Total current assets | 135,874 | 341 | 136,215 | ||||||||||||||
| Total assets | 487,679 | 341 | 488,020 | ||||||||||||||
| Accrued expenses and other current liabilities | 7,778 | (340) | 7,438 | ||||||||||||||
| Sales taxes payable | - | 3,810 | 3,810 | ||||||||||||||
| Total current liabilities | 36,948 | 3,470 | 40,418 | ||||||||||||||
| Total liabilities | 79,430 | 3,470 | 82,900 | ||||||||||||||
| Accumulated deficit | (194,597) | (3,129) | (197,726) | ||||||||||||||
| Total shareholders’ equity | 408,249 | (3,129) | 405,120 | ||||||||||||||
| Total liabilities and shareholders’ equity | 487,679 | 341 | 488,020 | ||||||||||||||
| Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||
| (In thousands, except per share and share data) | As reported | Adjustment | As corrected | As reported | Adjustment | As corrected | |||||||||||||||||||||||||||||
| General and administrative | $ | 11,581 | $ | 335 | $ | 11,916 | $ | 34,128 | $ | 970 | $ | 35,098 | |||||||||||||||||||||||
| Total operating expenses | 52,152 | 335 | 52,487 | 212,800 | 970 | 213,770 | |||||||||||||||||||||||||||||
| Operating loss | (11,405) | (335) | (11,740) | (95,300) | (970) | (96,270) | |||||||||||||||||||||||||||||
| Interest income (expense) | 10 | (25) | (15) | (181) | (69) | (250) | |||||||||||||||||||||||||||||
| Total other income, net | 849 | (25) | 824 | 786 | (69) | 717 | |||||||||||||||||||||||||||||
| Loss before income tax benefit | (10,556) | (360) | (10,916) | (94,514) | (1,039) | (95,553) | |||||||||||||||||||||||||||||
| Net loss | (9,957) | (360) | (10,317) | (89,577) | (1,039) | (90,616) | |||||||||||||||||||||||||||||
| Net loss per basic and diluted share | (0.23) | (0.01) | (0.24) | (2.11) | (0.03) | (2.14) | |||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2022 | |||||||||||||||||
| (In thousands) | As reported | Adjustment | As corrected | ||||||||||||||
| Net loss | $ | (89,577) | $ | (1,039) | $ | (90,616) | |||||||||||
| Prepaid expenses and other current assets | (1,356) | (487) | (1,843) | ||||||||||||||
| Sales taxes payable | - | 1,526 | 1,526 | ||||||||||||||
In January 2016,market approach and discounted cash flow analyses to
In November 2015, FASB issued Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes: Topic 740 (ASU 2015-17). Current GAAP requires the deferred taxes for each jurisdiction to be presented as a net current asset or liability and net noncurrent asset or liability. This requires a jurisdiction-by-jurisdiction analysis based on the classificationrecoverability of the assetsFreezer Business asset groups were above its carrying value. The key assumptions associated with determining the estimated fair value include (i) the amount and liabilitiestiming of projected future cash flows (including revenue and expenses), (ii) the discount rate selected to whichmeasure the underlying temporary differences relate, or,risks inherent in the casefuture cash flows, (iii) the assessment of loss or credit carryforwards, based on the period in whichasset’s life cycle, and (iv) the attribute is expected to be realized. Any valuation allowance is then required to be allocated on a pro rata basis, by jurisdiction, between current and noncurrent deferred tax assets. The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent oncompetitive trends impacting the balance sheet.asset. As a result each jurisdiction will now only have one net noncurrent deferred tax asset or liability. The guidance does not change the existing requirement that only permits offsetting within a jurisdiction. The Company adopted ASU-2015-17 at the beginning of the first quarteranalysis, we recognized non-cash impairment charges of 2017$9.7 million, $3.1 million, $0.2 million, and $2.5 million during the period ended September 30, 2023 for the property and equipment, acquired technology, customer relationships, and tradename definite-lived intangible assets, respectively, in the line item titled, "
In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory: Topic 330 (ASU 2015-11). Topic 330 currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. ASU 2015-11 requires that inventory measured using either the first-in, first-out (FIFO) or average cost method be measured at the lower of cost and net realizable value. Net realizable value isdifference between the estimated selling pricesfair value of the Company’s definite-lived intangible assets and their carrying values.
On May 28, 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, Topic 606, requiringSeptember 30, 2023 and written down to fair value, those amounts are more susceptible to an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidanceimpairment risk if there are unfavorable changes in U.S. GAAP when it becomes effectiveassumptions and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The updated standard becomes effective for us in the first quarter of fiscal 2018. Based on our analysis thus far, we believe the impact of adopting the new guidance will be immaterial to our annual and interim financial statements. The Company will also be required to make additional disclosures under the new guidance. We continue to assess the impact on all areas of our revenue recognition, disclosure requirements, and changes that may be necessary to our internal controls over financial reporting. We will adopt this standard in the first quarter of 2018.
With the exception of the new standards discussed above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to our financial statements.
As
value on a recurring basis.
| As of September 30, 2017 | Level 1 | Level 2 | Total | |||||||||
| Bank deposits | $ | 2,777,404 | $ | — | $ | 2,777,404 | ||||||
| Money market funds | 53,137 | — | 53,137 | |||||||||
| Cash and cash equivalents | 2,830,541 | — | 2,830,541 | |||||||||
| Total | $ | 2,830,541 | $ | — | $ | 2,830,541 | ||||||
| As of December 31, 2016 | Level 1 | Level 2 | Total | |||||||||
| Bank deposits | $ | 1,352,541 | $ | — | $ | 1,352,541 | ||||||
| Money market funds | 53,285 | — | 53,285 | |||||||||
| Cash and cash equivalents | 1,405,826 | — | 1,405,826 | |||||||||
| Total | $ | 1,405,826 | $ | — | $ | 1,405,826 | ||||||
| As of September 30, 2023 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||
| Money market accounts | $ | 12,392 | $ | - | $ | - | $ | 12,392 | |||||||||||||||
| Available-for-sale securities: | |||||||||||||||||||||||
| U.S. government securities | 5,028 | - | - | 5,028 | |||||||||||||||||||
| Corporate debt securities | - | 15,898 | - | 15,898 | |||||||||||||||||||
| Other debt securities | - | 2,024 | - | 2,024 | |||||||||||||||||||
| Total | $ | 17,420 | $ | 17,922 | $ | - | $ | 35,342 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Contingent consideration - business combinations | - | - | 415 | 415 | |||||||||||||||||||
| Debt | - | 25,971 | - | 25,971 | |||||||||||||||||||
| Total | $ | - | $ | 25,971 | $ | 415 | $ | 26,386 | |||||||||||||||
| As of December 31, 2022 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||
| Money market accounts | $ | 11,416 | $ | - | $ | - | $ | 11,416 | |||||||||||||||
| Available-for-sale securities: | |||||||||||||||||||||||
| U.S. government securities | 15,051 | - | - | 15,051 | |||||||||||||||||||
| Corporate debt securities | - | 26,047 | - | 26,047 | |||||||||||||||||||
| Other debt securities | - | 3,494 | - | 3,494 | |||||||||||||||||||
| Total | $ | 26,467 | $ | 29,541 | $ | - | $ | 56,008 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Contingent consideration - business combinations | - | - | 4,456 | 4,456 | |||||||||||||||||||
| Debt | - | 25,607 | - | 25,607 | |||||||||||||||||||
| Total | $ | - | $ | 25,607 | $ | 4,456 | $ | 30,063 | |||||||||||||||
| Nine Months Ended September 30, | |||||||||||
| (In thousands) | 2023 | 2022 | |||||||||
| Beginning balance as of December 31, 2022 and 2021 | $ | 4,456 | $ | 10,027 | |||||||
| Change in fair value recognized in net loss | (1,778) | (3,348) | |||||||||
| Payment of contingent consideration earned | (2,263) | (817) | |||||||||
| Ending balance | $ | 415 | $ | 5,862 | |||||||
| September 30, 2023 | |||||||||||||||||||||||
| Amortized Cost | Gross unrealized | Estimated Fair Value | |||||||||||||||||||||
| (In thousands) | Gains | Losses | |||||||||||||||||||||
| Available-for-sale securities, current portion | |||||||||||||||||||||||
| U.S. government securities | $ | 5,030 | $ | - | $ | 2 | $ | 5,028 | |||||||||||||||
| Corporate debt securities | 15,901 | 1 | 4 | 15,898 | |||||||||||||||||||
| Other debt securities | 868 | - | - | 868 | |||||||||||||||||||
| Total short-term | 21,799 | 1 | 6 | 21,794 | |||||||||||||||||||
| Available-for-sale securities, long-term | |||||||||||||||||||||||
| Other debt securities | 1,158 | 2 | 4 | 1,156 | |||||||||||||||||||
| Total marketable securities | $ | 22,957 | $ | 3 | $ | 10 | $ | 22,950 | |||||||||||||||
| December 31, 2022 | |||||||||||||||||||||||
| Amortized Cost | Gross unrealized | Estimated Fair Value | |||||||||||||||||||||
| (In thousands) | Gains | Losses | |||||||||||||||||||||
| Available-for-sale securities, current portion | |||||||||||||||||||||||
| U.S. government securities | $ | 15,087 | $ | 1 | $ | 37 | $ | 15,051 | |||||||||||||||
| Corporate debt securities | 26,057 | 6 | 16 | 26,047 | |||||||||||||||||||
| Other debt securities | 2,169 | - | 7 | 2,162 | |||||||||||||||||||
| Total short-term | 43,313 | 7 | 60 | 43,260 | |||||||||||||||||||
| Available-for-sale securities, long-term | |||||||||||||||||||||||
| Other debt securities | 1,329 | 3 | - | 1,332 | |||||||||||||||||||
| Total marketable securities | $ | 44,642 | $ | 10 | $ | 60 | $ | 44,592 | |||||||||||||||
| September 30, 2023 | |||||||||||
| (In thousands) | Amortized Cost | Estimated Fair Value | |||||||||
| Due in one year or less | $ | 21,799 | $ | 21,794 | |||||||
| Due after one year through five years | 1,158 | 1,156 | |||||||||
| Total | $ | 22,957 | $ | 22,950 | |||||||
| September 30, | December 31, | ||||||||||
| (In thousands) | 2023 | 2022 | |||||||||
| Raw materials | $ | 24,452 | $ | 20,950 | |||||||
| Work in progress | 5,973 | 5,680 | |||||||||
| Finished goods | 12,929 | 8,274 | |||||||||
| Total inventories | $ | 43,354 | $ | 34,904 | |||||||
Inventory consists of the following at September 30, 20172023 and December 31, 2016:
| September 30, 2017 | December 31, 2016 | |||||||
| Raw materials | $ | 484,132 | $ | 531,053 | ||||
| Work in progress | 411,205 | 370,740 | ||||||
| Finished goods | 965,721 | 855,991 | ||||||
| Total | $ | 1,861,058 | $ | 1,757,784 | ||||
Deferred rent consists2022:
| September 30, | December 31, | ||||||||||
| (In thousands) | 2023 | 2022 | |||||||||
| Weighted average discount rate - operating leases | 4.3 | % | 4.2 | % | |||||||
| Weighted average discount rate - finance leases | 8.3 | % | 6.1 | % | |||||||
| Weighted average remaining lease term in years - operating leases | 6.5 | 7.2 | |||||||||
| Weighted average remaining lease term in years - finance leases | 4.3 | 2.0 | |||||||||
Straight line rent adjustment represents the difference between cash rent payments and the recognition of rentlease expense on a straight-line basis over the terms of the lease.
Service Vesting Based Stock Options
The following is a summary of service vesting based related stock option activity for the nine month period ended September 30, 2017, and the status of stock options outstanding at September 30, 2017:
| Nine Month Period Ended | ||||||||
| September 30, 2017 | ||||||||
| Wtd. Avg. | ||||||||
| Exercise | ||||||||
| Options | Price | |||||||
| Outstanding at beginning of year | 2,513,861 | $ | 1.78 | |||||
| Granted | 110,000 | $ | 1.79 | |||||
| Exercised | (131,427 | ) | $ | 1.17 | ||||
| Forfeited | (47,932 | ) | $ | 3.61 | ||||
| Expired | (91,068 | ) | $ | 1.45 | ||||
| Outstanding at September 30, 2017 | 2,353,434 | $ | 1.79 | |||||
| Stock options exercisable at September 30, 2017 | 1,496,041 | $ | 1.73 | |||||
Performance-based Stock Options
The Company’s Board of Directors has implemented a Management Performance Bonus Plan for 2017. Based on achieving varying levels of specified revenue for the year ending December 31, 2017, up to 1,000,000 options to purchase shares of the Company’s common stock may be vested. The options have an exercise price of $1.64, and if revenue levels are met, vest 50% on the release of the Company’s audited financial statements for 2017, and 50% one year thereafter. If the minimum performance targets are not achieved, no options will vest. The Company currently deems it probable that the 1,000,000 options will vest and is recognizing stock compensation for these options over the requisite service period.
As of September 30, 2017, there was $13,333,864 of aggregate intrinsic value of outstanding stock options, including $5,995,214 of aggregate intrinsic value of exercisable stock options. Intrinsic value is the total pretax intrinsic value for all “in-the-money” options (i.e., the difference between the Company’s closing stock price on the last trading day of the quarter and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options on September 30, 2017. This amount will change based on the fair market value of the Company’s stock. During the three and nine months ended September 30, 2017 intrinsic value2023 and 2022 were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Operating lease costs | $ | 883 | $ | 909 | $ | 2,679 | $ | 2,745 | |||||||||||||||
| Short-term lease costs | 560 | 534 | 1,410 | 1,627 | |||||||||||||||||||
| Total operating lease costs | 1,443 | 1,443 | 4,089 | 4,372 | |||||||||||||||||||
| Variable lease costs | 299 | 250 | 903 | 809 | |||||||||||||||||||
| Total lease costs | $ | 1,742 | $ | 1,693 | $ | 4,992 | $ | 5,181 | |||||||||||||||
| (In thousands) | Operating Leases | Financing Leases | |||||||||
| 2023 (3 months remaining) | $ | 909 | $ | 134 | |||||||
| 2024 | 3,383 | 487 | |||||||||
| 2025 | 2,942 | 424 | |||||||||
| 2026 | 2,532 | 389 | |||||||||
| 2027 | 2,280 | 387 | |||||||||
| Thereafter | 6,938 | 134 | |||||||||
| Total lease payments | 18,984 | 1,955 | |||||||||
| Less: interest | (2,401) | (307) | |||||||||
| Total present value of lease liabilities | $ | 16,583 | $ | 1,648 | |||||||
| September 30, | December 31, | ||||||||||
| (In thousands) | 2023 | 2022 | |||||||||
| Shippers placed in service | $ | 9,848 | $ | 7,671 | |||||||
| Fixed assets held for rent | 1,562 | 4,686 | |||||||||
| Accumulated depreciation | (5,778) | (4,952) | |||||||||
| Subtotal | 5,632 | 7,405 | |||||||||
| Shippers and related components in production | 1,577 | 1,659 | |||||||||
| Total | $ | 7,209 | $ | 9,064 | |||||||
| September 30, | December 31, | ||||||||||
| (In thousands) | 2023 | 2022 | |||||||||
Property and equipment(1) | |||||||||||
| Leasehold improvements | $ | 5,948 | $ | 5,249 | |||||||
| Furniture and computer equipment | 1,046 | 1,908 | |||||||||
| Manufacturing and other equipment | 19,862 | 20,557 | |||||||||
| Construction in-progress | 3,500 | 5,095 | |||||||||
| Subtotal | 30,356 | 32,809 | |||||||||
| Less: Accumulated depreciation | (9,358) | (9,171) | |||||||||
| Property and equipment, net | $ | 20,998 | $ | 23,638 | |||||||
The fair value of share-based payments made with stock options to employees and non-employee directors was estimated on the measurement date using the Black-Scholes model using the following weighted average assumptions.
| Three Month Period Ended | Nine Month Period Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Risk free interest rate | N/A | 1.33 | % | 2.07 | % | 1.51 | % | |||||||||
| Dividend yield | N/A | 0.0 | % | 0.0 | % | 0.0 | % | |||||||||
| Expected term (in years) | N/A | 7.00 | 5.18 | 7.00 | ||||||||||||
| Volatility | N/A | 75 | % | 75 | % | 75 | % | |||||||||
We recognized stock compensation expense of $274,653 and $159,764, related to stock options for the three months ended September 30, 2017 and September 30, 2016,2023, respectively, and $843,925$0.9 million and $569,176, related to stock options for the nine months ended September 30, 2017 and September 30, 2016, respectively. As of September 30, 2017, we had approximately $1,794,275 of unrecognized compensation expense related to unvested stock options. We expect to recognize this compensation expense over a weighted average period of approximately 1.8 years.
Restricted Stock
The following is a summary of restricted stock activity for the nine month period ended September 30, 2017, and the status of unvested restricted stock outstanding at September 30, 2017:
| Nine Month Period Ended | ||||||||
| September 30, 2017 | ||||||||
| Number of Restricted Shares | Grant-Date Fair Value | |||||||
| Outstanding at beginning of year | 98,439 | $ | 1.90 | |||||
| Granted | 207,350 | $ | 1.76 | |||||
| Vested | (42,189 | ) | $ | 1.90 | ||||
| Forfeited | (5,000 | ) | $ | 1.76 | ||||
| Outstanding at September 30, 2017 | 258,600 | $ | 1.79 | |||||
The aggregate fair value of the awards granted$2.4 million during the three and nine months ended September 30, 2017 was none2022, respectively.
| (In thousands, except weighted average useful life) | September 30, 2023 | ||||||||||||||||||||||
| Intangible assets: | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | Weighted Average Useful Life (in years) | |||||||||||||||||||
Customer relationships(1) | $ | 9,936 | $ | (4,081) | $ | 5,855 | 10.9 | ||||||||||||||||
Tradenames(1) | 8,134 | (1,921) | 6,213 | 11.5 | |||||||||||||||||||
Technology - acquired(1) | 18,372 | (8,541) | 9,831 | 4.3 | |||||||||||||||||||
| Non-compete agreements | 750 | (585) | 165 | 1.0 | |||||||||||||||||||
| Total intangible assets | $ | 37,192 | $ | (15,128) | $ | 22,064 | 7.6 | ||||||||||||||||
| (In thousands, except weighted average useful life) | December 31, 2022 | ||||||||||||||||||||||
| Intangible assets: | Gross Carrying Value(1) | Accumulated Amortization(1) | Net Carrying Value | Weighted Average Useful Life (in years)(1) | |||||||||||||||||||
| Customer relationships | $ | 10,496 | $ | (3,328) | $ | 7,168 | 8.8 | ||||||||||||||||
| Tradenames | 11,328 | (1,794) | 9,534 | 11.8 | |||||||||||||||||||
| Technology - acquired | 23,802 | (8,705) | 15,097 | 5.3 | |||||||||||||||||||
| Non-compete agreements | 750 | (461) | 289 | 1.8 | |||||||||||||||||||
| Total intangible assets | $ | 46,376 | $ | (14,288) | $ | 32,088 | 8.0 | ||||||||||||||||
We recognized stock compensation expense of $39,290 and $21,320 relatedupdated balances subsequent to restricted stock awards for the three months ended September 30, 2017 and 2016, respectively and $113,786 and $144,671 related to restricted stock awards for the nine months ended September 30, 2017 and 2016, respectively. As of September 30, 2017, there was $399,874 in unrecognized compensation costs related to restricted stock awards. We expect to recognize those costs over 2.8 years.
We recorded stock compensationimpairment charges.
| Three Month Period Ended | Nine Month Period Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Research and development costs | $ | 59,434 | $ | 33,574 | $ | 177,514 | $ | 118,409 | ||||||||
| Sales and marketing costs | 55,402 | 31,903 | 173,072 | 150,150 | ||||||||||||
| General and administrative costs | 156,621 | 103,587 | 479,803 | 323,465 | ||||||||||||
| Cost of product sales | 42,486 | 12,020 | 127,322 | (8,177 | ) | |||||||||||
| Total | $ | 313,943 | $ | 181,084 | $ | 957,711 | $ | 583,847 | ||||||||
Management adopted ASU 2016-09 on January 1, 2017 and no longer applies an estimated forfeiture rate. As a result, we had a cumulative-effect adjustment to retained earnings and additional paid in capital of $27,908 resulting from adoption. The estimated forfeiture rate derived from historical employee termination data applied$4.3 million for the three and nine months ended September 30, 2016 was approximately 8.1%.
At September 30, 2017 and December 31, 2016, we had 7,361,283 and 7,603,141 warrants outstanding,2023, respectively and exercisable with a weighted average exercise price of $4.53$2.5 million and $4.46, respectively. The outstanding warrants have expiration dates between March 2021 and May 2021. During the three month period ended September 30, 2017, 99,000 warrants were exercised with a weighted average exercise price of $4.75, yielding $470,250 in proceeds to the Company. Subsequent to quarter end through October 31, 2017, an additional 294,070 warrants were exercised with a weighted average exercise price of $4.75, yielding $1,396,833 in proceeds to the Company.
Basic net loss per common share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated using the weighted average number of common shares outstanding plus dilutive common stock equivalents outstanding during the period. Common stock equivalents are excluded$8.2 million for the three and nine month periodsmonths ended September 30, 20172022, respectively. As of September 30, 2023, the Company expects to record the following amortization expense for definite-lived intangible assets:
| (In thousands) | Amortization Expense | ||||
| For the Years Ending December 31, | |||||
| 2023 (3 months remaining) | $ | 915 | |||
| 2024 | 3,602 | ||||
| 2025 | 3,468 | ||||
| 2026 | 3,358 | ||||
| 2027 | 2,605 | ||||
| Thereafter | 8,116 | ||||
| Total | $ | 22,064 | |||
Basic weighted average common shares outstanding, and the potentially dilutive securities excluded from loss per share computations because they are anti-dilutive, are as followsfollowing as of September 30, 20172023 and 2016, respectively:
| Three Month Period Ended | Nine Month Period Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Basic and diluted weighted average common stock shares outstanding | 13,238,248 | 12,699,419 | 13,102,238 | 12,575,560 | ||||||||||||
| Potentially dilutive securities excluded from loss per share computations: | ||||||||||||||||
| Common stock options | 3,353,434 | 2,567,328 | 3,353,434 | 2,567,328 | ||||||||||||
| Common stock purchase warrants | 7,361,283 | 7,603,141 | 7,361,283 | 7,603,141 | ||||||||||||
| Restricted stock unvested | 258,600 | 109,375 | 258,600 | 109,375 | ||||||||||||
Leases
We lease approximately 30,000 square feetDecember 31, 2022:
| September 30, | December 31, | ||||||||||
| (In thousands) | 2023 | 2022 | |||||||||
| Accrued compensation | $ | 3,309 | $ | 5,080 | |||||||
| Accrued expenses | 3,704 | 3,128 | |||||||||
| Deferred revenue, current | 660 | 548 | |||||||||
| Accrued taxes | 895 | 975 | |||||||||
| Other | - | 51 | |||||||||
| Total accrued expenses and other current liabilities | $ | 8,568 | $ | 9,782 | |||||||
| Nine Months Ended September 30, | |||||||||||
| (In thousands) | 2023 | 2022 | |||||||||
| Beginning balance as of December 31, 2022 and 2021 | $ | 8,312 | $ | 9,398 | |||||||
Provision for warranties(1) | 2,861 | 2,353 | |||||||||
Settlements of warranty claims(1) | (2,958) | (3,384) | |||||||||
| Ending balance | $ | 8,215 | $ | 8,367 | |||||||
contingencies
Litigation
On June 30, 2017, we modified our existing credit facility The Company’s industry is characterized by frequent claims and litigation, including claims regarding intellectual property. As a result, the Company may be subject to various legal proceedings from time to time. The results of any future litigation cannot be predicted with WAVI Holding AG, ("WAVI"), a principal stockholdercertainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. Management is not aware of any significant pending or threatened litigation that is anticipated to result in unfavorable judgments against the Company.
| September 30, | December 31, | ||||||||||||||||||||||
| (In thousands) | Maturity Date | Interest Rate | 2023 | 2022 | |||||||||||||||||||
| 2022 term loan 2 | Various | 4.0 | % | 2,596 | 2,896 | ||||||||||||||||||
| 2022 term loan 3 | Jun-26 | 7.0 | % | 20,000 | 20,000 | ||||||||||||||||||
| Insurance premium financing | Apr-24 | 8.0 | % | 2,061 | 1,074 | ||||||||||||||||||
| Freezer equipment loan | Dec-25 | 5.7 | % | 355 | 466 | ||||||||||||||||||
| Manufacturing equipment loans | Oct-25 | 5.7 | % | 195 | 266 | ||||||||||||||||||
| Freezer installation loan | Various | 6.3 | % | 876 | 1,078 | ||||||||||||||||||
| Other loans | Various | Various | 3 | 6 | |||||||||||||||||||
| Total debt, excluding unamortized debt issuance costs | 26,086 | 25,786 | |||||||||||||||||||||
| Less: unamortized debt issuance costs | (115) | (179) | |||||||||||||||||||||
| Total debt | 25,971 | 25,607 | |||||||||||||||||||||
| Less: current portion | (5,034) | (1,814) | |||||||||||||||||||||
| Total long-term debt | $ | 20,937 | $ | 23,793 | |||||||||||||||||||
| (In thousands) | Amount | ||||
| 2023 (3 months remaining) | $ | 816 | |||
| 2024 | 6,830 | ||||
| 2025 | 10,511 | ||||
| 2026 | 5,218 | ||||
| 2027 | 2,596 | ||||
| Thereafter | - | ||||
| Total debt | $ | 25,971 | |||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands, except percentages) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Product revenue | |||||||||||||||||||||||
| Freezer and thaw | $ | 13,188 | $ | 15,326 | $ | 39,417 | $ | 49,331 | |||||||||||||||
| Cell processing | 13,338 | 18,082 | 51,004 | 48,336 | |||||||||||||||||||
| Biostorage services | 365 | 260 | 1,099 | 560 | |||||||||||||||||||
| Service revenue | |||||||||||||||||||||||
| Biostorage services | 4,186 | 4,312 | 12,166 | 11,099 | |||||||||||||||||||
| Freezer and thaw | 192 | 18 | 877 | 18 | |||||||||||||||||||
| Rental revenue | |||||||||||||||||||||||
| Biostorage services | 2,059 | 2,749 | 5,975 | 8,156 | |||||||||||||||||||
| Total revenue | $ | 33,328 | $ | 40,747 | $ | 110,538 | $ | 117,500 | |||||||||||||||
| (In thousands) | 2023 (3 months remaining) | 2024 | Total | ||||||||||||||
| Rental revenue | $ | 900 | $ | 900 | $ | 1,800 | |||||||||||
| Service revenue | $ | 313 | $ | 10 | $ | 323 | |||||||||||
| Nine Months Ended September 30, 2023 | |||||||||||
| Options | Wtd. Avg. Exercise Price | ||||||||||
| Outstanding as of beginning of year | 456,293 | $ | 2.17 | ||||||||
| Exercised | (175,043) | 2.11 | |||||||||
| Outstanding as of September 30, 2023 | 281,250 | $ | 2.19 | ||||||||
| Stock options exercisable as of September 30, 2023 | 281,250 | $ | 2.19 | ||||||||
| Nine Months Ended September 30, 2023 | |||||||||||
| Shares | Wtd. Avg. Grant Date Fair Value | ||||||||||
| Outstanding as of beginning of year | 1,879,215 | $ | 28.94 | ||||||||
| Granted | 584,976 | 17.57 | |||||||||
| Vested | (892,512) | 25.95 | |||||||||
| Forfeited | (151,984) | 28.25 | |||||||||
| Non-vested as of September 30, 2023 | 1,419,695 | $ | 26.21 | ||||||||
| Nine Months Ended September 30, 2023 | |||||||||||
| Shares | Wtd. Avg. Grant | ||||||||||
| Outstanding as of beginning of year | 271,044 | $ | 30.64 | ||||||||
| Granted | 268,738 | 19.67 | |||||||||
| Vested | (30,616) | 51.65 | |||||||||
| Non-vested as of September 30, 2023 | 509,166 | $ | 26.00 | ||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Cost of revenue | $ | 1,409 | $ | 809 | $ | 4,252 | $ | 2,619 | |||||||||||||||
| General and administrative costs | 3,696 | 3,959 | 10,544 | 10,687 | |||||||||||||||||||
| Sales and marketing costs | 2,225 | 829 | 4,563 | 2,272 | |||||||||||||||||||
| Research and development costs | 1,787 | 702 | 3,978 | 2,093 | |||||||||||||||||||
| Total | $ | 9,117 | $ | 6,299 | $ | 23,337 | $ | 17,671 | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands, except share and earnings per share data) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Basic earnings (loss) per common share | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net loss | $ | (29,132) | $ | (10,317) | $ | (53,045) | $ | (90,616) | |||||||||||||||
| Net loss allocated to common shareholders | (29,132) | (10,317) | (53,045) | (90,616) | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted-average common shares issued and outstanding | 43,570,438 | 42,647,967 | 43,348,412 | 42,376,392 | |||||||||||||||||||
| Basic and diluted loss per common share | $ | (0.67) | $ | (0.24) | $ | (1.22) | $ | (2.14) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Stock options and restricted stock awards | 2,636,283 | 2,022,405 | 3,007,126 | 2,678,601 | |||||||||||||||||||
| Total | 2,636,283 | 2,022,405 | 3,007,126 | 2,678,601 | |||||||||||||||||||
events. Our biopreservation media are serum-free, protein-free, fully defined, and manufactured under current Good Manufacturing Practices ("cGMP"). We strive to source wherever possible, the highest available grade, multi-compendium raw materials. We estimate our cell processing products have been incorporated in over 700 customer clinical applications, including numerous chimeric antigen receptor (“CAR”) T cell and other cell types. the prior year. capital resources operating activities nine months ended September 30, 2023. procedures not effective, due to the material weaknesses in our internal controls over financial reporting. As previously reported, we identified material weaknesses in our internal controls over financial reporting as of December 31, 2022 with regard to (i) inappropriately designed entity-level controls impacting the control environment, risk assessment procedures, and monitoring activities to prevent or detect material misstatements to the consolidated financial statements attributed to an insufficient number of qualified resources and inadequate oversight and accountability over the performance of controls, ineffective identification and assessment or risks impacting internal control over financial reporting, and ineffective monitoring controls; (ii) information system logical access within certain key financial systems; (iii) accounting policies and procedures and related controls over complex financial statement areas; (iv) accounting policies, procedures, and related controls over revenue recognition and procure to pay processes; and (v) inadequate risk assessment procedures, or maintenance of effectively designed and implemented accounting policies, procedures, and related controls, over the recognition and measurement of indirect tax liabilities in the consolidated financial statements in accordance with the applicable financial reporting requirements. informationLooking StatementsThislooking statementscontains “forward-looking statements”. Theseare not historical facts and may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “plans,” “expects,” “believes,” “anticipates,” “designed,” and similar words are intended to identify forward-looking statements. Forward-looking statements are based on our current expectations and beliefs, and involve a number of risks and uncertainties. We caution readersuncertainties that any forward-looking statement is not a guarantee of future performanceare difficult to predict and that could cause actual results couldto differ materially from those contained instated or implied by the forward-looking statement. These statements are based on current expectationsstatements. A description of future events. Such statements include, but are not limited to, statements about future financial and operating results, plans, objectives, expectations and intentions, costs and expenses, interest rates, outcomecertain of contingencies, financial condition, results of operations, liquidity, business strategies, cost savings, objectives of managementthese risks, uncertainties and other statements thatmatters can be found in filings we make with the U.S. Securities and Exchange Commission (the “SEC”), all of which are not historical facts. You can find many of these statements by looking for words like “believes,” “expects,” “anticipates,” “estimates,” “may,” “should,” “will,” “could,” “plan,” “intend,” or similar expressions in this Quarterlyavailable at www.sec.gov, including our Annual Report on Form 10-Q. We intend that such forward-looking statements be subject to the safe harbors created thereby. Examples10-K as of these forward-looking statements include, but are not limited to:·anticipated product developments, regulatory filings and related requirements;·timing and amount of future contractual payments, product revenue, gross margin and operating expenses;·market acceptance of our products and the estimated potential size of these markets; and·projections regarding liquidity, capital requirements and the terms of any financing agreements.These forward-looking statements are based on the current beliefs and expectations of our management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results may differ materially from current expectations and projections. These risks and uncertainties include those factors described in greater detail in the risk factors disclosed in our Form 10-K for the fiscal year ended December 31, 20162022, filed with the SEC. Should one or more of theseSEC on March 31, 2023. Because forward-looking statements involve risks orand uncertainties, materialize, or should any of our assumptions prove incorrect, actual results and events may vary in material respectsdiffer materially from those anticipated in these forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, futureresults and events or otherwise, except as may be required under applicable securities laws.Youcurrently expected by us. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or, in the case of documents referred to or incorporated by reference, the date of those documents.All subsequent written or oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.hereof. We do not undertake anyno obligation to release publicly any revisions toupdate these forward-looking statements to reflect events or circumstances that occur after the date of this Quarterly Report on Form 10-Qhereof or to reflect any change in its expectations with regard to these forward-looking statements or the occurrence of unanticipated events, except as may be required under applicable U.S. securities law. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.Report on Form 10-KReport.fiscal year ended December 31, 2016 filed withpreservation of cells and tissues, human platelet lysate media for the SEC.We were incorporatedsupplementation of cell expansion, cryogenic vials and automated fill machines that provide high-quality, efficient, and precise mixes of solutions), (ii) freezers and thaw systems (including a full line of mechanical ultra-low temperature (“ULT”), isothermal, and liquid nitrogen freezers and accessories, automated thaw devices which provide controlled, consistent thawing of frozen biologics in Delaware in 1987 under the name Trans Time Medical Products, Inc. In 2002, the Company, then known as Cryomedical Sciences, Inc.vials and cryobags), and engaged(iii) biostorage services (including biological and pharmaceutical storage services, and “smart”, cloud connected devices for transporting biologic payloads).marketing cryosurgicaldelivery process. We have a diversified portfolio of tools and services that focuses on biopreservation, cell processing, frozen biologic storage products completed a merger withand services, cold-chain transportation, and thawing of biologic materials. We have in-house expertise in cryobiology and continue to capitalize on opportunities to maximize the value of our wholly-owned subsidiary, BioLife Solutions, Inc.product platform for our extensive customer base through both organic growth innovations and acquisitions.which was engaged as a developercryogenic vials, and marketerautomated cell-processing fill machinesfor cells and tissues. Following the merger, we changed our name to BioLife Solutions, Inc.Our proprietary, clinical grade HypoThermosol®HypoThermosol FRS and CryoStor® biopreservation media products are marketed to the regenerative medicine, biobanking and drug discovery markets, including hospital-based stem cell transplant centers, pharmaceutical companies, cord blood and adult stem cell banks, hair transplant centers, and suppliers of cells to the drug discovery, toxicology testing and diagnostic markets. All of our biopreservation media products are serum-free and protein-free, fully defined, and are manufactured under current Good Manufacturing Practices (cGMP) using United States Pharmacopia (USP)/Multicompendial or the highest available grade components.15Our patented biopreservation media productsCryoStor, are formulated to reducemitigate preservation-induced, delayed-onset cell damage and death.death, which result when cells and tissues are subjected to reduced temperatures. Our platform enabling technology providescan provide our CGT customers with significant shelf lifeshelf-life extension of biologic source material and final cell products and can also greatly improvedimprove post-preservation cell tissue, and organtissue viability and function.discoveries made bylimited stability, which results from the use of these traditional biopreservation media formulations, is a significant shortcoming that our scientistsoptimized proprietary products address with great success.consultants relate to howcryogenic (low-temperature induced) damage/destruction of cells tissues,through apoptosis and organs respondnecrosis. This research led directly to the stressdevelopment of hypothermic storage, cryopreservation,our HypoThermosol FRS and the thawing process. These discoveries enabled the formulation of innovativeCryoStor technologies. Our proprietary biopreservation media products are specifically formulated to:preservation-related cellular injury, mucha frozen state to a liquid state in a controlled and consistent manner. This helps reduce cell structure damage during the temperature transition. The ThawSTAR products can reduce risks of which is not apparent immediately after returncontamination versus using a traditional water bath.normothermic body temperature.their ultimate return. Our product formulations have demonstrated notable reduction in apoptotic (programmed) and necrotic (pathologic) cell death mechanisms and are enablingstate-of-the-art monitoring systems allow for customers to monitor the clinical and commercial developmentstorage temperatures of dozens of innovative regenerative medicine products.Additionally, we own a 45% interest in biologistex CCM, LLC dba SAVSU Technologies (“SAVSU”), a Delaware limited liability company. SAVSU istheir materials throughout the entire logistics chain.business of acquiring, developing, maintaining, owning, operating, marketingUSA and selling an integrated platform of a cloud-based information service and precision thermal shipping products. The evo™ line is a line of “smart shippers” designed for the shipment of materials, which must be maintained frozen, at 2-8˚C and/or controlled room temperature temperatures and where near real time monitoring of temperature, location, and payload status information is necessary. A sophisticated electronics package embeddedone facility in the Netherlands.provides streaming data to the biologistex web-based application; where real time shipment status, history,cloud connected shipping containersreports can be generated. Designed for small volume shipments; it fills a critical need in chain-of-custody scenarios for temperature sensitive shipmentssupplier of cells, tissues, and other cell based products. On December 31, 2016, we restructured our biologistex CCM, LLC joint venture (“biologistex” prior to December 31, 2016 or “SAVSU” December 31, 2016 and thereafter) with Savsu Technologies, LLC (“STLLC”), whereby we contributed certain assets, including our outstanding loan owed by biologistex, and STLLC contributed certain assets, including allnext generation cold chain management intellectual property, into SAVSU. Priortools for cell and gene therapies. Our cloud-connected shipping containers and evo.is cloud app allows biologic products to be traced and tracked in real time. Our evo platform consists of rentable cloud-connected shippers that include technologies enabling tracking software to provide real-time information on geolocation, payload temperature, ambient temperature, tilt of shipper, humidity, altitude, and real-time alerts when a shipper has been opened. Our internally developed evo.is software allows customers to customize alert notifications both in data measurements and user requirements. The evo Dry Vapor Shipper (“DVS”) is specifically marketed for use with cell and gene therapies. The evo DVS has an improved form factor and ergonomics over the traditional dewar, including extended thermal performance, reduced liquid nitrogen recharge time, improved payload extractors, and ability to maintain temperature for longer periods if tilted on its side.restructuring, we owned a 52% ownership interest in biologistex. Asportrayal of our financial condition and results and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. For a description of our critical accounting policies that affect our more significant judgments and estimates used in the preparation of our Unaudited Condensed Consolidated Financial Statements, refer to the recently updated policy below in addition to Management’s Discussion and Analysis of Financial Condition and Results of Operations and our significant accounting policies in Note 1 to the Consolidated Financial Statements included in our Annual Report and Note 1 to the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.consideration given by both parties,share-based payments related to stock options, time-based restricted stock, market-based restricted stock awards and performance-based awards granted to our directors and employees. The fair value of market-based restricted stock awards is estimated at the date of grant using the Monte Carlo Simulation model. The Monte Carlo Simulation valuation model incorporates assumptions as to stock price volatility, the expected life of options or awards, a risk-free interest rate and dividend yield. In valuing our market-based stock awards, significant judgment is required in determining the expected volatility of our common stock. Expected volatility for our market-based restricted stock awards is based on the historical volatility of our own stock and the stock of companies within our defined peer group. Further, our expected volatility may change in the future, which could substantially change the grant-date fair value of future awards and, ultimately, the expense we ownrecord. The fair value of restricted stock, including performance awards, without a 45% interest in SAVSU, whichmarket condition is subsequently reduced to 40%estimated using the current market price of our common stock on December 31, 2017the date of grant.then to 25% on December 31, 2018.Highlightsperformance awards over the requisite service period. For awards with only a service condition, we expense stock-based compensation using the straight-line method over the requisite service period for the Third Quarterentire award. For awards with a market condition, we expense over the vesting period regardless of 2017·Revenue was $3.0 million in the third quarter of 2017, an increase of 39% over the same period in 2016. For the first nine months of 2017, revenue increased 32% as compared to the same period last year. Third quarter revenue growth was primarily driven by a 100% year over year increase from customers in the regenerative medicine segment due to increased demand from late stage cell therapy customers, partially offset by a 36% decrease in revenue to our drug discovery customers compared to the same period in 2016 due to normal cyclical buying patterns.·Gross margin in the third quarter of 2017 was 63%, compared to 57% in the third quarter of 2016. For the first nine months of 2017 gross margin was 62% compared to 57% in the first nine months of 2016. The margin increased due to higher average selling price per liter and increased sales volume.·Operating loss for the three and nine months ended September 30, 2017 was $32,000 and $838,000, respectively. This compared to a consolidated operating loss of $1.1 million and $4.2 million for the three and nine months ended September 30, 2016. The decrease in the operating loss is primarily the result of the restructuring and subsequent deconsolidation of biologistex as well as an increase in sales.·For the three and nine months ended September 30, 2017, net loss was $0.3 million and $2.0 million. This compared to a consolidated net loss of $1.3 million and $4.5 million for the three and nine months ended September 30, 2016. The decrease in the net loss is primarily the result of the restructuring and subsequent deconsolidation of biologistex as well as an increase in sales.·Gained 23 new customers in the third quarter of 2017, including first time orders from 14 regenerativemedicine companies.·Announced CryoStor® Cell Freeze Media is Embedded in Cellular Biomedicine Group Clinical Trial of AlloJoin™·Executed Supply Agreement with Celyad for CryoStor® Use in Natural Killer Receptor based T-Cell (NKR-T) Platform Targeting Solid Tumors and Blood Cancers·Announced CryoStor® Cell Freeze Media Embedded in Invossa™: First Approved Cell and Gene Therapy for Osteoarthritis
the value that the award recipients will ultimately receive. Share-based compensation expense from both service vesting-based and market-based awards are adjusted for forfeitures as incurred.16OperationsOur revenue,operationscash balancesthe related footnotes thereto.Three Months Ended
September 30,Nine Months Ended
September 30,(In thousands, except percentages) 2023 2022 $ Change % Change 2023 2022 $ Change % Change Product revenue Freezer and thaw $ 13,188 $ 15,326 $ (2,138) (14) % $ 39,417 $ 49,331 $ (9,914) (20) % Cell processing 13,338 18,082 $ (4,744) (26) % 51,004 48,336 $ 2,668 6 % Biostorage services 365 260 $ 105 40 % 1,099 560 $ 539 96 % Service revenue Biostorage services 4,186 4,312 $ (126) (3) % 12,166 11,099 $ 1,067 10 % Freezer and thaw 192 18 $ 174 NM 877 18 $ 859 NM Rental revenue Biostorage services 2,059 2,749 $ (690) (25) % 5,975 8,156 $ (2,181) (27) % Total revenue $ 33,328 $ 40,747 $ (7,419) (18) % $ 110,538 $ 117,500 $ (6,962) (6) % likelylargely driven by an overall decrease in capital expenditure investment from the broader biopharma markets in addition to fluctuate significantly from quarter-to-quarter. These fluctuations are due to a number of factors, specifically the progress of our customers’ clinical trials, where the pace of enrollment affects customer orders for our products. The majority of our net sales come from a relatively small number of customers and a limited number of market sectors. Each of these sectors is subject to macroeconomic conditions as well as trends and conditions that are sector specific. Any weakness in the market sectors in which our customers are concentrated could affectdestocking inventory levels compared to the prior year.businessfreezer and results of operations.Comparison of Results of Operations for the Threethaw products decreased by $2.1 million and Nine Month Periods Ended September 30, 2017$9.9 million, or 14% and 2016Percentage comparisons have been omitted within the following table where they are not considered meaningful.Revenue and Gross Margin Three Month Period Ended September 30, 2017 2016 % Change Total revenue $ 2,963,411 $ 2,135,197 39 % Cost of sales 1,095,724 920,935 19 % Gross profit $ 1,867,687 $ 1,214,262 54 % Gross margin % 63 % 57 % Nine Month Period Ended September 30, 2017 2016 % Change Total revenue $ 7,887,377 $ 5,977,202 32 % Cost of sales 2,980,965 2,564,775 16 % Gross profit $ 4,906,412 $ 3,412,427 44 % Gross margin % 62 % 57 % Biopreservation Media Product Sales. Our core products are sold through both direct and indirect channels to customers in the regenerative medicine, biobanking and drug discovery markets. Sales of our core products20%, in the three and nine months ended September 30, 2017 increased 39% and 32%,2023, respectively, compared with the same period in 2022. The decrease can be attributed to a decrease in sales of our ULT freezer line compared to the prior year.2016, due primarily to an increase in volume and selling price per liter sold resulting from increased orders from the regenerative medicine segment. Revenue growth for the third quarter was driven by a 100% year over year increase from customers in the regenerative medicine segment due to increased demand from late stage cell therapy customers, partially offset by a 36%2022. The decrease in revenue tofrom cell processing products is driven by customers reducing safety stock levels and an overall decrease in capital expenditure investment from the broader biopharma markets.drug discovery customers due to normal cyclical buying patterns. We expect to see continued growth in adoptionbiostorage services increased by $0.1 million and use of our proprietary biopreservation media products.Cost of Sales. Cost of sales consists of raw materials, labor$0.5 million, or 40% and overhead expenses. Cost of sales96%, in the three and nine months ended September 30, 2017 increased2023, respectively, compared towith the same periods in 2016 due2022. The increases relate to increased saleslarger volumes of consumables sold from our proprietary products partially offset by lower overhead costs per liter sold in the three and nine months ended September 30, 2017.Gross Margin. Gross margin as a percentage ofevo product line.63%$4.4 million and 62% in the three and nine months ended September 30, 2017, compared to 57% in each of the three and nine months ended September 30, 2016.17Revenue Concentration.In the three and nine months ended September 30, 2017, we derived approximately 22% of our product revenue from two customers and 10% of our product revenue from one customer, respectively. In each of the three and nine months ended September 30, 2016, we derived approximately 25% of our product revenue from two customers and 12% of our product revenue from one customer, respectively. No other customer accounted for more than 10% of revenue in the three and nine months ended September 30, 2017 or 2016.Operating ExpensesOur operating expenses for the three and nine month periods ended September 30, 2017 and 2016 were: Three Month Period Ended September 30, 2017 2016 % Change Operating Expenses: Research and development $ 293,093 $ 496,874 (41 )% Sales and marketing 488,688 816,025 (40 )% General and administrative 1,118,251 1,039,223 8 % Operating Expenses $ 1,900,032 $ 2,352,122 (19 )% % of revenue 64 % 110 % Nine Month Period Ended September 30, 2017 2016 % Change Operating Expenses: Research and development $ 898,451 $ 1,600,144 (44 )% Sales and marketing 1,547,087 2,399,131 (36 )% General and administrative 3,298,461 3,637,333 (9 )% Operating Expenses $ 5,743,999 $ 7,636,608 (25 )% % of revenue 73 % 128 % Research and Development.Research and development expenses consist primarily of salaries and other personnel-related expenses, consulting and other outside services, laboratory supplies, and other costs. We expense all research and development costs as incurred, with the exception of the costs associated with the development of customized internal-use software systems that were capitalized in 2016. Research and development expenses$13.0 million for the three and nine months ended September 30, 2017 decreased2023, respectively, representing an increase of $48 thousand and $1.9 million, or 1% and 17%, compared towith the three and nine months ended September 30, 2016, duesame periods in 2022. The increase relates primarily to the restructuringexpansion of our biologistex joint venture ($199,453service revenues generated by SciSafe storage services.$697,657, respectively) which was partially offset by an increase in stock-based compensation related to new grants of performance based stock options and restricted stock.Sales and Marketing.Sales and marketing expenses consist primarily of salaries and other personnel-related expenses, consulting, trade shows and advertising. Sales and marketing expenses$6.0 million for the three and nine months ended September 30, 20172023, respectively, representing a decrease of $0.7 million and $2.2 million, or 25% and 27%, compared with the same periods in 2022. The decrease can be attributed to the expiration of an agreement with a major customer for the storage of material inputs in the COVID-19 vaccine during the prior year.Three Months Ended
September 30,Nine Months Ended
September 30,(In thousands, except percentages) 2023 2022 $ Change % Change 2023 2022 $ Change % Change Cost of product, rental, and service revenue $ 21,679 $ 27,009 $ (5,330) (20) % $ 73,036 $ 77,649 $ (4,613) (6) % General and administrative 12,513 11,916 $ 597 5 % 42,757 35,098 $ 7,659 22 % Sales and marketing 7,256 5,278 $ 1,978 37 % 20,045 15,601 $ 4,444 28 % Research and development 5,402 3,425 $ 1,977 58 % 14,397 10,634 $ 3,763 35 % Asset impairment charges 15,485 — $ 15,485 — % 15,485 69,900 $ (54,415) (78) % Intangible asset amortization 1,356 2,513 $ (1,157) (46) % 4,266 8,236 $ (3,970) (48) % Change in fair value of contingent consideration (1,580) 2,346 $ (3,926) NM (1,778) (3,348) $ 1,570 NM Total operating expenses $ 62,111 $ 52,487 $ 9,624 18 % $ 168,208 $ 213,770 $ (45,562) (21) % compared to$5.3 million and $4.6 million for the three and nine months ended September 30, 2016,2023, or 20% and 6%, respectively, compared to the same periods in 2022, due primarily to decreases in sales across multiple product lines compared to the restructuringprior year.biologistex joint venture ($371,723media product line and $1,062,744, respectively) which was partiallya greater concentration of higher margin revenue as a percentage of total revenue, offset by increases in personnel expenses, including stock-based compensation expenses, and an increase in tradeshow and travel expenses and stock-based compensation relatedinventory reserve compared to new grants of performance based stock options and restricted stock.Administrative Expenses.administrativeexpenses consist(“G&A”) expense consists primarily of personnel-related expenses,costs, including non-cash stock-based compensationexpense for administrative personnel and members of the board of directors, professional fees, such as accounting and legal, and corporate insurance. General and administrativemonths ended September 30, 2017 increased compared to the three months ended September 30, 2016 due to stock-based compensation related to new grants of performance based stock options and restricted stock. General and administrative expenses for the nine months ended September 30, 2017 decreased2023 increased $0.6 million and $7.7 million, or 5% and 22%, respectively, compared with the same periods in 2022. The increase reflects increased headcount compared to the prior year, driving increases in personnel expenses from stock-based compensation and increases in professional services fees. We additionally experienced one-time increases in severance costs compared to the prior year.20162023 increased $2.0 million and $4.4 million, or 37% and 28%, respectively, compared with the same periods in 2022. The increase is primarily due primarily to one-time increases in severance costs in addition to increased marketing and advertising fees paid outassociated with sales expansion efforts. terminated executives in the first quarter of 2016, a decrease in investor relations consultingfuture periods due to the ongoing initiative to divest the freezer product lines from our current product portfolio.conferences, deconsolidationdevelopmentbiologistex ($47,518salaries and $165,199, respectively) and lower corporate legal fees which was partially offset by an increase in information technology expenses andother personnel-related costs, including non-cash stock-based compensation expense, for research and development personnel, consulting fees, and external product development service costs.new grantsthe amortization of performance based stock optionsintangible assets associated with the acquisitions of Astero, SAVSU, CBS, SciSafe, Global Cooling, and restricted stock.Other Income (Expenses)Interest Expense.Sexton in which we acquired definite-lived intangible assets.interest expensebenefit recognized in the three and nine months ended September 30, 2017 is due2023 relates primarily to the note payable related to the credit facility financing arrangement entered into in May 2016 and interest on equipment financing.Amortization of debt discount.The amortization of short-term debt discount in the nine months ended September 30, 2017 is due to the amortization of the allocated value of the detachable warrants associated with the credit facility financing on arrangement entered into in May 2016 which was fully amortized May 31, 2017.Loss on equity method investment. The non-cash loss associated with our proportionate share of the net loss incurred by SAVSU for the period based on our 45% ownershipchanges in our investmentestimated probability of achieving budgeted operational results set forth within our contingent consideration arrangement, as certain contingent consideration arrangements are payable in SAVSU. AsBioLife’s shares.20162023 and September 30, 2017 is due2022 were composed of the following:Three Months Ended
September 30,Nine Months Ended
September 30,(In thousands, except percentages) 2023 2022 $ Change % Change 2023 2022 $ Change % Change Change in fair value of investments $ — $ 697 $ (697) NM $ — $ 697 $ (697) NM Gain on settlement of Global Cooling escrow $ — $ — $ - NM $ 5,115 $ — $ 5,115 NM Interest expense, net $ (476) $ (15) $ (461) 3073 % $ (1,305) $ (250) $ (1,055) 422 % Other income 242 142 $ 100 NM 1,027 270 $ 757 280 % Total other (expense) income, net $ (234) $ 824 $ (1,058) (128) % $ 4,837 $ 717 $ 4,120 575 % write off of deferred capital coststhird-party escrow account established in connection with that transaction. For additional information, see Note 13.throughout 2016 and 2017 related to proposed Registration Statement offerings.Interest income. The reduction in interest income induring the three and nine months ended September 30, 2017 compared2023 related primarily to the same periodsterm loan obtained in 2016 is dueSeptember 2022, financed insurance premiums, and a loan assumed in the acquisition of Global Cooling. We also earn interest on cash held in our money market account. Increases in interest expenses during the three and nine months ended September 30, 2023 can also be attributed to the lower average short-term investments balanceincreases in 2017 comparedinterest rates set by the United States Federal Reserve, causing the variable interest component on our 2022 term loan to 2016.
be exposed to increasing interest rates.18Capital Resources2017,2023 and December 31, 2022, we had $2.8$42.2 million and $64.1 million in cash, and cash equivalents, comparedand available-for-sale securities, respectively. We also have the ability to cashborrow up to an additional $10.0 million under our 2022 term loan 3. See Note 14: Long-term debt for additional details on borrowing requirements under 2022 term loan 3. Additionally, on October 19, 2023, we entered into a Securities Purchase Agreement with Casdin whereby the Company sold, and cash equivalentsCasdin purchased, 927,165 shares of $1.4 millioncommon stock of the Company at December 31, 2016. During the three month period ended September 30, 2017, 99,000 warrants were exercised with a weighted average exerciseshare price of $4.75, yielding $470,250 in proceeds to the Company. Subsequent to quarter end through October 31, 2017,$11.19 per share for an additional 294,070 warrants were exercised with a weighted average exerciseaggregate purchase price of $4.75, yielding $1,396,833 in proceeds to$10,374,976, infusing additional capital into the Company. Based on our current expectations with respect to our future revenue and operating expenses, we expectbelieve that our current level of cash, and cash equivalents, and other liquid assets will be sufficient to meet our liquidity needs for at least the next twelve months. If our revenues do not grow as expected and/or we are not able to manage our expenses sufficiently, including making dividend payments pursuant tomonths from the termsdate of the preferred stock issuedfiling of this Quarterly Report on Form 10-Q. However, the Company may choose to WAVI, we may need to obtainraise additional equity or debt financing. We may also seek equity or debt financing opportunistically if we believe that market conditions are conducive to obtaining such financing. We currently have an S-3 registration statement filed with the SEC which may be utilized to obtain additional financing.We continue to monitor and evaluate opportunities to strengthen our balance sheet and competitive position over the long term. These actions may include acquisitions or other strategic transactions that we believe would generate significant advantages and substantially strengthen our business. The consideration we pay in such transactions may include, among other things, shares of our common stock, other equity or debt securities of our Company or cash. We may elect to seekcapital through a debt or equity financing for strategic purposes. Additional capital, if required, may not be available on reasonable terms, if at all.Nine Months Ended
September 30,(In thousands, except percentages) 2023 2022 $ Change Operating activities $ (14,809) $ (16,345) $ 1,536 Investing activities 13,880 (43,223) $ 57,103 Financing activities 750 $ 16,941 $ (16,191) Net decrease in cash and cash equivalents $ (179) $ (42,627) $ 42,448 anticipation of, or in connection with, such transactions or to fund or invest in any operations acquired thereby.Cash Used In Operating ActivitiesDuringcash used by operating activities was $14.8 million during the nine months ended September 30, 2017, net2023 compared to $16.3 million during the nine months ended September 30, 2022. The decrease in cash used inby operating activities was $0.2primarily due to the result of the timing of collection and disbursement of working capital related items in accounts receivable, prepaid expenses, and accounts payable.$3.7$43.2 million used by investing activities for the nine months ended September 30, 2016. Cash used2022. The increase in operating activities decreased primarily due to the restructuring of the biologistex joint venture and increased revenue compared to 2016 which reduced the net loss in the current period compared to 2016.Net Cash Used In/Provided by Investing ActivitiesNet cash usedprovided by investing activities was primarily driven by $42.5 million in maturities of our investments in available-for-sale marketable securities made throughout the year ended December 31, 2022. This was offset by $22.7 million in investments made in additional available-for-sale marketable securities in addition to $8.5 million of property and equipment and assets held for rent purchases.$91,000$0.8 million during the nine months ended September 30, 2017,2023, compared to net cash provided by investing activities of $0.7$16.9 million for the nine months ended September 30, 2016. The cash provided by investing activities in 2016 was from the sales of short term investments, net of purchases of internal use software and equipment during the nine months. The cash used in the nine months ended September 30, 2017 was the result of purchases of property and equipment.Net Cash Provided by Financing ActivitiesNet cash provided by financing activities was $1.7 million and $2.2 million in the nine months ended September 30, 2017 and 2016, respectively. Net cash provided by financing activities during the nine months ended September 30, 20172022. The decrease in cash provided by financing activities was primarily the result of the proceeds received from our credit facility, warrant exercises and employee stock option exercises. Net cash provided by financing activities inof the $20.0 million term loan executed during the nine months ended September 30, 2016 was2022 with no similar financing transaction taking place during the result of proceeds received from our credit facility and employee stock option exercises net of cash payments related to the filing of the Registration Statement on Form S-3.Off-Balance Sheet Arrangements2017,2023, we did not have any off-balance sheet arrangements.Critical Accounting PoliciesSignificant Judgments and EstimatesManagement’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements,other obligations which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate estimates, including, but not limited to those related to accounts receivable allowances, determination of fair value of share-based compensation, contingencies, income taxes, useful lives and impairment of intangible assets and internal use software, and expense accruals. We base our estimates on historical experience and on other factors that we believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.Our critical accounting policies and estimates have not changed significantly from those policies and estimates disclosed under the heading “Critical Accounting Policies and Significant Judgments and Estimates” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC.19Contractual ObligationsWe previously disclosed certain contractual obligations and contingencies and commitments relevant to us within the financial statements and Management Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K forReport. Other than the year ended December 31, 2016, as filed with the SEC on March 15, 2017. Therecontractual obligation listed below, there have been no significant changes to these obligations in the three months ended September 30, 2023.2017. For more information regarding2023, there were no material changes or developments that would materially alter the market risk assessment of our current contingenciesexposures to foreign currency exchange rates performed as of December 31, 2022.commitments, see note 8 to the consolidated financial statements included above.Item 3.Quantitative and Qualitative Disclosures about Market RiskNot applicable.Item 4.Controls and ProceduresProcedures. We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to ourProcedures including our chief executive officer and chief financial officer as appropriate, to allow timely decisions regarding required disclosure. During the quarter ended September 30, 2017, we carried out an evaluation, under the supervision and with the participation of our management, includingChief Executive Officer and Chief Financial Officer, evaluated the chief executive officer and chief financial officer, as required by the rules and regulations under the Exchange Act, of the effectiveness of the design and operation of our disclosure controls and procedures as(as defined in RuleRules 13a-15(e) and 15d-15(e) under the Exchange Act.Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on thisthat evaluation, our chief executive officerChief Executive Officer and chief financial officerChief Financial Officer concluded that as of September 30, 2017, our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q were effective.overOver Financial Reporting.Reportinghave beenwere no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 20172023 that havehas materially affected, or areis reasonably likely to materially affect, our internal control over financial reporting.Control.Controlchief executive officerChief Executive Officer and chief financial officer,Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errorserror and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our CompanyBioLife Solutions have been detected.InformationName and Position Plan Adoption / Termination Plan Adoption / Termination Date Expiration Date Number of Shares Purchased (Sold) / Terminated under Plan Termination August 17, 2023 December 31, 2023 123,404 Item 6.ExhibitsSee accompanying Index to Exhibits included after the signature page of this report for a list of exhibits filed or furnished with this report.Exhibit No. 20Description 10.1 31.1 31.2 101.INS** XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document 101.SCH** Inline XBRL Taxonomy Extension Schema Document 101.CAL** Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF** Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB** Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE** Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101) # The information in Exhibits 32.1 and 32.2 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act (including this Quarterly Report on Form 10-Q), unless the Company specifically incorporates the foregoing information into those documents by reference. ** In accordance with Rule 402 of Regulation S-T, this interactive data file is deemed not filed or part of this Quarterly Report on Form 10-Q for purposes of Sections 11 or 12 of the Securities Act or Section 18 of the Exchange Act and otherwise is not subject to liability under these sections. BIOLIFE SOLUTIONS, INC. Dated:Date: November 9, 20172023/s/ Roderick de GreefTroy WichtermanRoderick de GreefTroy WichtermanChief Financial Officer (Duly authorized officer and principal
financial and accounting officer)21INDEX TO EXHIBITSExhibit No.Description31.1Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002101.INSXBRL Instance Document101.SCHXBRL Taxonomy Extension Schema101.CALXBRL Taxonomy Extension Calculation Linkbase101.DEFXBRL Taxonomy Extension Definition Linkbase101.LABXBRL Taxonomy Extension Label Linkbase101.PREXBRL Taxonomy Extension Presentation Linkbase22