Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 11, 2016 | |
Document Information [Line Items] | ||
Entity Registrant Name | BIOLIFE SOLUTIONS INC | |
Entity Central Index Key | 834,365 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 12,693,017 | |
Trading Symbol | BLFS | |
Entity Filer Category | Smaller Reporting Company | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 1,662,431 | $ 2,173,258 |
Short term investments | 0 | 1,651,341 |
Accounts receivable, trade, net of allowance for doubtful accounts of $0 at March 31, 2016 and December 31, 2015 | 1,190,260 | 929,289 |
Inventories | 2,018,255 | 1,834,635 |
Prepaid expenses and other current assets | 435,592 | 384,414 |
Total current assets | 5,306,538 | 6,972,937 |
Property and equipment | ||
Leasehold improvements | 1,284,491 | 1,284,491 |
Furniture and computer equipment | 584,603 | 557,666 |
Manufacturing and other equipment | 1,025,521 | 1,025,521 |
Subtotal | 2,894,615 | 2,867,678 |
Less: Accumulated depreciation | (1,513,071) | (1,421,279) |
Net property and equipment | 1,381,544 | 1,446,399 |
Internal use software | 1,836,220 | 1,698,735 |
Intangible asset | 2,215,385 | 2,215,385 |
Long term deposits | 36,166 | 36,166 |
Total assets | 10,775,853 | 12,369,622 |
Current liabilities | ||
Accounts payable | 772,870 | 1,029,373 |
Accrued expenses and other current liabilities | 113,340 | 146,438 |
Accrued compensation | 463,558 | 419,766 |
Deferred rent | 130,216 | 130,216 |
Total current liabilities | 1,479,984 | 1,725,793 |
Long term liabilities | ||
Deferred rent, long term | 766,044 | 784,458 |
Total liabilities | $ 2,246,028 | $ 2,510,251 |
Commitments and contingencies (Note 9) | ||
Shareholders’ equity | ||
Common stock, $0.001 par value; 150,000,000 shares authorized, 12,508,376 and 12,448,391 shares issued and outstanding at March 31, 2016 and December 31, 2015 | $ 12,508 | $ 12,447 |
Additional paid-in capital | 72,983,853 | 72,823,398 |
Accumulated other comprehensive loss | 0 | (451) |
Accumulated deficit | (65,553,751) | (64,326,923) |
Total BioLife Solutions, Inc. shareholders' equity | 7,442,610 | 8,508,471 |
Total non-controlling interest equity | 1,087,215 | 1,350,900 |
Total shareholders' equity | 8,529,825 | 9,859,371 |
Total liabilities and shareholders’ equity | $ 10,775,853 | $ 12,369,622 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Accounts receivable allowances | $ 0 | $ 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 150,000,000 | 150,000,000 |
Common stock, issued | 12,508,376 | 12,448,391 |
Common stock, outstanding | 12,508,376 | 12,448,391 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Product revenue | $ 1,852,017 | $ 1,500,722 |
Cost of product sales | 771,005 | 618,099 |
Gross profit | 1,081,012 | 882,623 |
Operating expenses | ||
Research and development | 504,239 | 322,165 |
Sales and marketing | 733,913 | 500,255 |
General and administrative | 1,335,292 | 1,220,705 |
Total operating expenses | 2,573,444 | 2,043,125 |
Operating loss | (1,492,432) | (1,160,502) |
Other income | ||
Interest income | 1,919 | 8,237 |
Net Loss | (1,490,513) | (1,152,265) |
Net loss attributable to non-controlling interest | 263,685 | 120,783 |
Net Loss attributable to BioLife Solutions, Inc. | $ (1,226,828) | $ (1,031,482) |
Basic and diluted net loss per common share attributable to BioLife Solutions, Inc. (in dollars per share) | $ (0.10) | $ (0.09) |
Basic and diluted weighted average common shares used to calculate net loss per common share (in dollars per share) | 12,457,858 | 12,100,588 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Net loss | $ (1,490,513) | $ (1,152,265) |
Other comprehensive income | ||
Unrealized gain on available-for-sale investments | 451 | 5,499 |
Total other comprehensive income | 451 | 5,499 |
Comprehensive loss | (1,490,062) | (1,146,766) |
Comprehensive loss attributable to non-controlling interest | 263,685 | 120,783 |
Comprehensive loss attributable to BioLife Solutions, Inc. | $ (1,226,377) | $ (1,025,983) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (1,490,513) | $ (1,152,265) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 91,791 | 83,646 |
Stock-based compensation expense | 146,527 | 33,509 |
Amortization of deferred rent related to lease incentives | (31,749) | (31,750) |
Accretion and amortization on available for sale investments | 1,792 | 40,901 |
Change in operating assets and liabilities | ||
(Increase) Decrease in Accounts receivable, trade | (260,971) | 50,579 |
Inventories | (183,620) | (277,563) |
Prepaid expenses and other current assets | 17,324 | 72,156 |
Increase (Decrease) in | ||
Accounts payable | 91,907 | 221,046 |
Accrued compensation and other current liabilities | 10,694 | (353,077) |
Deferred rent | 13,335 | 4,966 |
Net cash used in operating activities | (1,593,483) | (1,307,852) |
Cash flows from investing activities | ||
Sales of available-for-sale investments | 1,650,000 | 2,100,000 |
Purchases of available-for-sale investments | 0 | (342,872) |
Costs associated with internal use software development | (552,535) | 0 |
Purchase of property and equipment | (26,936) | (41,128) |
Net cash provided by investing activities | 1,070,529 | 1,716,000 |
Cash flows from financing activities | ||
Proceeds from exercise of common stock options | 32,223 | 24,934 |
Deferred costs related to security issuance | (20,096) | 0 |
Net cash provided by financing activities | 12,127 | 24,934 |
Net increase (decrease) in cash and cash equivalents | (510,827) | 433,082 |
Cash and cash equivalents - beginning of period | 2,173,258 | 2,538,758 |
Cash and cash equivalents - end of period | 1,662,431 | 2,971,840 |
Non-cash investing activity | ||
Costs incurred for capitalized internal use software not paid as of quarter end (amounts are included in liabilities) | 0 | 334,640 |
Option exercises for which cash not yet received as of quarter end | 13,989 | 0 |
Deferred costs related to security issuance not yet paid as of quarter end | $ 66,640 | $ 0 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | 1. Organization and Significant Accounting Policies BioLife Solutions, Inc. (“BioLife,” “us,” “we,” “our,” or the “Company”) is a developer, manufacturer and marketer of proprietary clinical grade cell and tissue hypothermic storage and cryopreservation freeze media and a related cloud hosted biologistics cold chain management app for smart shippers. Our proprietary HypoThermosol® and CryoStor® platform of solutions are highly valued in the biobanking, drug discovery, and regenerative medicine markets. Our biopreservation media products are serum-free and protein-free, fully defined, and are formulated to reduce preservation-induced cell damage and death. Our enabling technology provides commercial companies and clinical researchers significant improvement in shelf life and post-preservation viability and function of cells, tissues, and organs. Additionally, for our direct, distributor, and contract customers, we perform custom formulation, fill, and finish services. We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, we have condensed or omitted certain information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments) necessary to fairly present our financial position, results of operations and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full year. These consolidated financial statements and accompanying notes should be read in conjunction with the financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2015 on file with the SEC. There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in the financial statements in our Annual Report on Form 10-K for the year ended December 31, 2015. The consolidated financial statements include the accounts of the Company and its majority-owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. In the three months ended March 31, 2016, we derived approximately 12% of our product revenue from one customer. In the three months ended March 31, 2015, we derived approximately 11% of our product revenue from one customer. No other customer accounted for more than 10% of revenue in the three months ended March 31, 2016 or 2015. At March 31, 2016, one customer accounted for approximately 19% of total gross accounts receivable. At December 31, 2015, three customers accounted for approximately 53% of total gross accounts receivable. Revenue from customers located in foreign countries represented 21% of total revenue during the three months ended March 31, 2016 and 2015. 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. Adoption of ASU 2016-09 is required for fiscal reporting periods beginning after December 15, 2016, including interim reporting periods within those fiscal years with early adoption being permitted. The Company is currently evaluating the potential impact of the pending adoption of ASU 2016-09 on its consolidated financial statements. 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 liabilities on the balance sheet. Under the new guidance, leases will continue to be classified as either finance or operating, with classification affecting the pattern of expense recognition in the Consolidated Statements of Operations. Lessor accounting is largely unchanged under ASU 2016-02. Adoption of ASU 2016-02 is required for fiscal reporting periods beginning after December 15, 2018, including interim reporting periods within those fiscal years with early adoption being permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The Company is currently evaluating the potential impact of the pending adoption of ASU 2016-02 on its consolidated financial statements. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities: Topic 825 (ASU 2016-01). The updated guidance enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. Adoption of ASU 2016-01 is required for fiscal reporting periods beginning after December 15, 2017, including interim reporting periods within those fiscal years. The Company is currently evaluating the potential impact of the pending adoption of ASU 2016-01 on its consolidated financial statements. 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 classification of the assets and liabilities to which the underlying temporary differences relate, or, in the case of loss or credit carryforwards, based on the period in which 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 on the balance sheet. 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. Adoption of ASU 2015-17 is required for fiscal reporting periods beginning after December 15, 2016, including interim reporting periods within those fiscal years, and either prospective or retrospective application is permitted. Early adoption of ASU 2015-17 is permitted. At the time of adoption, all of the Company’s deferred tax assets and liabilities, along with any related valuation allowance, will be classified as noncurrent on its Consolidated Balance Sheet. The Company does not plan to early adopt ASU 2015-17. 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 is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Adoption of ASU 2015-11 is required for fiscal reporting periods beginning after December 15, 2016, including interim reporting periods within those fiscal years. The Company does not expect adoption of ASU 2015-11 to have a material impact on its consolidated financial statements. On May 28, 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, Topic 606, requiring 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 guidance in U.S. GAAP when it becomes effective 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. We have not yet selected a transition method and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. 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 Consolidated Financial Statements. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | 2. Accumulated Other Comprehensive Loss Three Months Ended Unrealized Loss on Investments, Beginning Balance $ (451) Unrealized Gain on Investments, Current Period 451 Unrealized Loss on Investments, Ending Balance $ |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | 3. Fair Value Measurement In accordance with FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” (“ASC Topic 820”), the Company measures its cash and cash equivalents and short term investments at fair value on a recurring basis. ASC Topic 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC Topic 820 establishes a three-tier value fair hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Observable inputs that reflect quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 Observable inputs other than quoted prices included in Level 1 for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Level 3 Unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. As of March 31, 2016 and December 31, 2015, the Company does not have liabilities that are measured at fair value. As of March 31, 2016 Level 1 Level 2 Total Bank deposits $ 609,247 $ $ 609,247 Money market funds 1,053,184 1,053,184 Cash and cash equivalents 1,662,431 1,662,431 Total $ 1,662,431 $ $ 1,662,431 As of December 31, 2015 Level 1 Level 2 Total Bank deposits $ 440,809 $ $ 440,809 Money market funds 1,732,449 1,732,449 Cash and cash equivalents 2,173,258 2,173,258 Corporate debt securities 1,401,453 1,401,453 Commercial paper 249,888 249,888 Short term investments 1,651,341 1,651,341 Total $ 3,824,599 $ $ 3,824,599 The fair values of bank deposits, money market funds, corporate debt securities and commercial paper classified as Level 1 were derived from quoted market prices as active markets for these instruments exist. The Company has no level 2 or level 3 financial assets. The Company did not have any transfers between Level 1 and Level 2 of the fair value hierarchy during the three months ended March 31, 2016 and the twelve months ended December 31, 2015. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | 4. Inventory March 31, 2016 December 31, 2015 Raw materials $ 518,469 $ 299,952 Work in progress 383,297 666,124 Finished goods 1,116,489 868,559 Total $ 2,018,255 $ 1,834,635 |
Deferred Rent
Deferred Rent | 3 Months Ended |
Mar. 31, 2016 | |
Deferred Rent Disclosure [Abstract] | |
Deferred Rent | 5. Deferred Rent March 31, 2016 December 31, 2015 Landlord-funded leasehold improvements $ 1,124,790 $ 1,124,790 Less accumulated amortization (407,279) (375,530) Total 717,511 749,260 Straight line rent adjustment 178,749 165,414 Total deferred rent $ 896,260 $ 914,674 During the three month periods ended March 31, 2016 and 2015, the Company recorded $ 31,749 31,750 Straight line rent adjustment represents the difference between cash rent payments and the recognition of rent expense on a straight-line basis over the terms of the lease. |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | 6. Share-based Compensation Stock Options Three Month Period Ended March 31, 2016 Wtd. Avg. Exercise Options Price Outstanding at beginning of year 2,555,263 $ 1.80 Granted 265,000 $ 1.84 Exercised (9,985) $ 1.40 Forfeited (358,708) $ 2.15 Outstanding at March 31, 2016 2,451,570 $ 1.75 Stock options exercisable at March 31, 2016 1,185,030 $ 1.43 As of March 31, 2016, there was $ 731,042 722,956 4,253 20,937 Three Month Period Ended March 31, 2016 2015 Risk free interest rate 1.65 % N/A Dividend yield 0.0 % N/A Expected term (in years) 7 N/A Volatility 75 % N/A The weighted average grant date fair value of options granted using these assumptions was $ 1.29 Management applies an estimated forfeiture rate that is derived from historical employee termination data. The estimated forfeiture rate applied for the three month periods ended March 31, 2016 and 2015 was approximately 8.1 7.0 As of March 31, 2016, we had approximately $ 1,717,280 3.05 Restricted Stock On March 15, 2016 the board granted 200,000 25 36 Three Month Period Ended March 31, 2016 Number of Restricted Shares Grant-Date Fair Value Outstanding at beginning of year $ N/A Granted 200,000 $ 1.90 Vested (50,000) $ 1.90 Outstanding at March 31, 2016 150,000 $ 1.90 The aggregate fair value of the awards granted during the three months ended March 31, 2016 was $ 380,000 95,000 We recognized stock compensation expense of $ 98,718 248,399 2.96 Three Month Period Ended March 31, 2016 2015 Research and development costs $ 37,469 $ 6,944 Sales and marketing costs 63,499 5,755 General and administrative costs 77,510 7,773 Cost of product sales (31,951) 13,037 Total $ 146,527 $ 33,509 During the three month period ended March 31, 2016, we recorded forfeited unvested stock compensation expense in the amount of $ 40,317 51,817 |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Warrants | 7. Warrants At March 31, 2016 and December 31, 2015, we had 7,195,997 4.60 The outstanding warrants have expiration dates between August 2016 and March 2021. |
Net Loss per Common Share
Net Loss per Common Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss per Common Share | 8. Net Loss per Common Share 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 for the three month periods ended March 31, 2016 and 2015, since the effect is anti-dilutive due to the Company’s net losses. Common stock equivalents include stock options, warrants and unvested restricted stock. Basic weighted average common shares outstanding, and the potentially dilutive securities excluded from loss per share computations because they are anti-dilutive, are as follows as of March 31, 2016 and 2015, respectively: Three Month Period Ended 2016 2015 Basic and diluted weighted average common stock shares outstanding 12,457,858 12,100,588 Potentially dilutive securities excluded from loss per share computations: Common stock options 2,451,570 1,368,528 Common stock purchase warrants 7,195,997 7,428,141 Restricted stock unvested 150,000 |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments & Contingencies | 9. Commitments & Contingencies Leases We lease approximately 30,000 square feet in our Bothell, Washington headquarters. The term of our lease continues until July 31, 2021 with two options to extend the term of the lease, each of which is for an additional period of five years, with the first extension term commencing, if at all, on August 1, 2021, and the second extension term commencing, if at all, immediately following the expiration of the first extension term. In accordance with the amended lease agreement, our monthly base rent is approximately $59,700, with scheduled annual increases each August and again in October for the most recent amendment. We are also required to pay an amount equal to the Company’s proportionate share of certain taxes and operating expenses. Employment agreements We have employment agreements with the Chief Executive Officer, Chief Financial Officer, Chief Technology Officer, Vice President of Operations, Vice President, Marketing and Vice President, Global Sales. None of these employment agreements is for a definitive period, but rather each will continue indefinitely until terminated in accordance with its terms. The agreements provide for a base annual salary, payable in monthly (or shorter) installments. In addition, the agreement with the Chief Executive Officer provides for incentive bonuses at the discretion of the Board of Directors. Under certain conditions and for certain of these officers, we may be required to pay additional amounts upon terminating the officer or upon the officer resigning for good reason. biologistex Our biologistex joint venture committed to purchase approximately $2.4 million in Smart Containers from SAVSU. As of March 31, 2016, the purchase commitment is $2.1 million. Litigation From time to time, the Company is subject to various legal proceedings that arise in the ordinary course of business, none of which are currently material to the Company’s business. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. Subsequent Events Credit Facility On May 12, 2016 we entered into a $ 4 June 1, 2017 10 5 550,000 1.75 MNX Relationship I n April, we f |
Organization and Significant 17
Organization and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Business | Business BioLife Solutions, Inc. (“BioLife,” “us,” “we,” “our,” or the “Company”) is a developer, manufacturer and marketer of proprietary clinical grade cell and tissue hypothermic storage and cryopreservation freeze media and a related cloud hosted biologistics cold chain management app for smart shippers. Our proprietary HypoThermosol® and CryoStor® platform of solutions are highly valued in the biobanking, drug discovery, and regenerative medicine markets. Our biopreservation media products are serum-free and protein-free, fully defined, and are formulated to reduce preservation-induced cell damage and death. Our enabling technology provides commercial companies and clinical researchers significant improvement in shelf life and post-preservation viability and function of cells, tissues, and organs. Additionally, for our direct, distributor, and contract customers, we perform custom formulation, fill, and finish services. |
Basis of Presentation | We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, we have condensed or omitted certain information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments) necessary to fairly present our financial position, results of operations and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full year. These consolidated financial statements and accompanying notes should be read in conjunction with the financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2015 on file with the SEC. There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in the financial statements in our Annual Report on Form 10-K for the year ended December 31, 2015. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its majority-owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. |
Concentrations of credit risk and business risk | Concentrations of credit risk and business risk In the three months ended March 31, 2016, we derived approximately 12% of our product revenue from one customer. In the three months ended March 31, 2015, we derived approximately 11% of our product revenue from one customer. No other customer accounted for more than 10% of revenue in the three months ended March 31, 2016 or 2015. At March 31, 2016, one customer accounted for approximately 19% of total gross accounts receivable. At December 31, 2015, three customers accounted for approximately 53% of total gross accounts receivable. Revenue from customers located in foreign countries represented 21% of total revenue during the three months ended March 31, 2016 and 2015. |
Recent accounting pronouncements | Recent Accounting Pronouncements 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. Adoption of ASU 2016-09 is required for fiscal reporting periods beginning after December 15, 2016, including interim reporting periods within those fiscal years with early adoption being permitted. The Company is currently evaluating the potential impact of the pending adoption of ASU 2016-09 on its consolidated financial statements. 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 liabilities on the balance sheet. Under the new guidance, leases will continue to be classified as either finance or operating, with classification affecting the pattern of expense recognition in the Consolidated Statements of Operations. Lessor accounting is largely unchanged under ASU 2016-02. Adoption of ASU 2016-02 is required for fiscal reporting periods beginning after December 15, 2018, including interim reporting periods within those fiscal years with early adoption being permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The Company is currently evaluating the potential impact of the pending adoption of ASU 2016-02 on its consolidated financial statements. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities: Topic 825 (ASU 2016-01). The updated guidance enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. Adoption of ASU 2016-01 is required for fiscal reporting periods beginning after December 15, 2017, including interim reporting periods within those fiscal years. The Company is currently evaluating the potential impact of the pending adoption of ASU 2016-01 on its consolidated financial statements. 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 classification of the assets and liabilities to which the underlying temporary differences relate, or, in the case of loss or credit carryforwards, based on the period in which 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 on the balance sheet. 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. Adoption of ASU 2015-17 is required for fiscal reporting periods beginning after December 15, 2016, including interim reporting periods within those fiscal years, and either prospective or retrospective application is permitted. Early adoption of ASU 2015-17 is permitted. At the time of adoption, all of the Company’s deferred tax assets and liabilities, along with any related valuation allowance, will be classified as noncurrent on its Consolidated Balance Sheet. The Company does not plan to early adopt ASU 2015-17. 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 is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Adoption of ASU 2015-11 is required for fiscal reporting periods beginning after December 15, 2016, including interim reporting periods within those fiscal years. The Company does not expect adoption of ASU 2015-11 to have a material impact on its consolidated financial statements. On May 28, 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, Topic 606, requiring 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 guidance in U.S. GAAP when it becomes effective 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. We have not yet selected a transition method and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. 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 Consolidated Financial Statements. |
Accumulated Other Comprehensi18
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | The following tables show the changes in Accumulated Other Comprehensive Loss by component for the three months ended March 31, 2016: Three Months Ended Unrealized Loss on Investments, Beginning Balance $ (451) Unrealized Gain on Investments, Current Period 451 Unrealized Loss on Investments, Ending Balance $ |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Assets Measured on Recurring Basis | The following tables set forth the Company’s financial assets measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015, based on the three-tier fair value hierarchy: As of March 31, 2016 Level 1 Level 2 Total Bank deposits $ 609,247 $ $ 609,247 Money market funds 1,053,184 1,053,184 Cash and cash equivalents 1,662,431 1,662,431 Total $ 1,662,431 $ $ 1,662,431 As of December 31, 2015 Level 1 Level 2 Total Bank deposits $ 440,809 $ $ 440,809 Money market funds 1,732,449 1,732,449 Cash and cash equivalents 2,173,258 2,173,258 Corporate debt securities 1,401,453 1,401,453 Commercial paper 249,888 249,888 Short term investments 1,651,341 1,651,341 Total $ 3,824,599 $ $ 3,824,599 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventory consists of the following at March 31, 2016 and December 31, 2015: March 31, 2016 December 31, 2015 Raw materials $ 518,469 $ 299,952 Work in progress 383,297 666,124 Finished goods 1,116,489 868,559 Total $ 2,018,255 $ 1,834,635 |
Deferred Rent (Tables)
Deferred Rent (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Deferred Rent Disclosure [Abstract] | |
Deferred rent | March 31, 2016 December 31, 2015 Landlord-funded leasehold improvements $ 1,124,790 $ 1,124,790 Less accumulated amortization (407,279) (375,530) Total 717,511 749,260 Straight line rent adjustment 178,749 165,414 Total deferred rent $ 896,260 $ 914,674 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of stock option activity | The following is a summary of stock option activity for the three month period ended March 31, 2016, and the status of stock options outstanding at March 31, 2016: Three Month Period Ended March 31, 2016 Wtd. Avg. Exercise Options Price Outstanding at beginning of year 2,555,263 $ 1.80 Granted 265,000 $ 1.84 Exercised (9,985) $ 1.40 Forfeited (358,708) $ 2.15 Outstanding at March 31, 2016 2,451,570 $ 1.75 Stock options exercisable at March 31, 2016 1,185,030 $ 1.43 |
Weighted average assumptions of share based payment | 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 (N/A for 2015 as no options were granted in that period). Three Month Period Ended March 31, 2016 2015 Risk free interest rate 1.65 % N/A Dividend yield 0.0 % N/A Expected term (in years) 7 N/A Volatility 75 % N/A |
Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | Three Month Period Ended March 31, 2016 Number of Restricted Shares Grant-Date Fair Value Outstanding at beginning of year $ N/A Granted 200,000 $ 1.90 Vested (50,000) $ 1.90 Outstanding at March 31, 2016 150,000 $ 1.90 |
Stock compensation expense | We recorded stock compensation expense for the three month periods ended March 31, 2016 and 2015, as follows: Three Month Period Ended March 31, 2016 2015 Research and development costs $ 37,469 $ 6,944 Sales and marketing costs 63,499 5,755 General and administrative costs 77,510 7,773 Cost of product sales (31,951) 13,037 Total $ 146,527 $ 33,509 |
Net Loss per Common Share (Tabl
Net Loss per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Loss Per share computation | Basic weighted average common shares outstanding, and the potentially dilutive securities excluded from loss per share computations because they are anti-dilutive, are as follows as of March 31, 2016 and 2015, respectively: Three Month Period Ended 2016 2015 Basic and diluted weighted average common stock shares outstanding 12,457,858 12,100,588 Potentially dilutive securities excluded from loss per share computations: Common stock options 2,451,570 1,368,528 Common stock purchase warrants 7,195,997 7,428,141 Restricted stock unvested 150,000 |
Organization and Significant 24
Organization and Significant Accounting Policies (Details Narrative) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Sales Revenue, Net [Member] | |||
Revenue from customers located in foreign countries | 21.00% | 21.00% | |
Sales Revenue, Net [Member] | One Customer [Member] | |||
Concentration Risk, Percentage | 12.00% | 11.00% | |
Sales Revenue, Net [Member] | Zero Customer [Member] | |||
Concentration Risk, Percentage | 10.00% | 10.00% | |
Accounts Receivable [Member] | One Customer [Member] | |||
Concentration Risk, Percentage | 19.00% | ||
Accounts Receivable [Member] | Three Customer [Member] | |||
Concentration Risk, Percentage | 53.00% |
Accumulated Other Comprehensi25
Accumulated Other Comprehensive Loss (Details) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Unrealized Loss on Investments, Beginning Balance | $ (451) |
Unrealized Loss on Investments, Current Period | 451 |
Unrealized Loss on Investments, Ending Balance | $ 0 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank deposits | $ 609,247 | $ 440,809 |
Money market funds | 1,053,184 | 1,732,449 |
Cash and cash equivalents | 1,662,431 | 2,173,258 |
Corporate debt securities | 1,401,453 | |
Commercial paper | 249,888 | |
Short term investments | 1,651,341 | |
Total | 1,662,431 | 3,824,599 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank deposits | 609,247 | 440,809 |
Money market funds | 1,053,184 | 1,732,449 |
Cash and cash equivalents | 1,662,431 | 2,173,258 |
Corporate debt securities | 1,401,453 | |
Commercial paper | 249,888 | |
Short term investments | 1,651,341 | |
Total | 1,662,431 | 3,824,599 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank deposits | 0 | 0 |
Money market funds | 0 | 0 |
Cash and cash equivalents | 0 | 0 |
Corporate debt securities | 0 | |
Commercial paper | 0 | |
Short term investments | 0 | |
Total | $ 0 | $ 0 |
Inventory (Details)
Inventory (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory [Line Items] | ||
Raw materials | $ 518,469 | $ 299,952 |
Work in progress | 383,297 | 666,124 |
Finished goods | 1,116,489 | 868,559 |
Total | $ 2,018,255 | $ 1,834,635 |
Deferred Rent (Details)
Deferred Rent (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Deferred Rent [Line Items] | ||
Landlord-funded leasehold improvements | $ 1,124,790 | $ 1,124,790 |
Less accumulated amortization | (407,279) | (375,530) |
Total | 717,511 | 749,260 |
Straight line rent adjustment | 178,749 | 165,414 |
Total deferred rent | $ 896,260 | $ 914,674 |
Deferred Rent (Details Narrativ
Deferred Rent (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Landlord Funded Leasehold Improvements [Member] | ||
Deferred Rent [Line Items] | ||
Deferred Rent Amortization | $ 31,749 | $ 31,750 |
Share-based Compensation (Detai
Share-based Compensation (Details) - Common stock options | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Number of Shares | |
Outstanding at beginning of year, Shares | shares | 2,555,263 |
Granted, Shares | shares | 265,000 |
Exercised, Shares | shares | (9,985) |
Forfeited, Shares | shares | (358,708) |
Outstanding at March 31, 2016 | shares | 2,451,570 |
Stock options exercisable at March 31, 2016 | shares | 1,185,030 |
Wtd. Avg. Exercise Price | |
Outstanding at beginning of year | $ / shares | $ 1.80 |
Granted, Wtd. Avg. Shares Exercise Price | $ / shares | 1.84 |
Exercised, Wtd. Avg. Shares Exercise Price | $ / shares | 1.40 |
Forfeited, Wtd. Avg. Shares Exercise Price | $ / shares | 2.15 |
Outstanding at March 31, 2016 | $ / shares | 1.75 |
Stock options exercisable at March 31, 2016 | $ / shares | $ 1.43 |
Share-based Compensation (Det31
Share-based Compensation (Details 1) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest rate | 1.65% | |
Dividend yield | 0.00% | |
Expected term (in years) | 7 years | |
Volatility | 75.00% |
Share-based Compensation (Det32
Share-based Compensation (Details 2) - Restricted Stock [Member] | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at beginning of year | shares | 0 |
Number of Restricted Shares,Granted | shares | 200,000 |
Number of Restricted Shares,Vested | shares | (50,000) |
Outstanding at March 31, 2016 | shares | 150,000 |
Outstanding at beginning of year | $ / shares | |
Grant-Date Fair Value,Granted | $ / shares | $ 1.90 |
Grant-Date Fair Value,Vested | $ / shares | 1.90 |
Outstanding at March 31, 2016 | $ / shares | $ 1.90 |
Share-based Compensation (Det33
Share-based Compensation (Details 3) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total Share Based Compensation | $ 146,527 | $ 33,509 |
Research and development costs | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total Share Based Compensation | 37,469 | 6,944 |
Sales and marketing costs | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total Share Based Compensation | 63,499 | 5,755 |
General and administrative costs | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total Share Based Compensation | 77,510 | 7,773 |
Cost of product sales | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total Share Based Compensation | $ (31,951) | $ 13,037 |
Share-based Compensation (Det34
Share-based Compensation (Details Narrative) - USD ($) | Mar. 15, 2016 | Mar. 31, 2016 | Mar. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total | $ 1,717,280 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years 18 days | ||
Estimated Forfeiture Rate | 8.10% | 7.00% | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 731,042 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | 722,956 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 4,253 | $ 20,937 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.29 | ||
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $ 98,718 | ||
Cost of Sales [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Restricted Stock Award, Forfeitures, Total | 40,317 | ||
General and Administrative Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Restricted Stock Award, Forfeitures, Total | 51,817 | ||
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total | $ 248,399 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 11 months 16 days | ||
Amended Restated 2013 Performance Incentive Plan [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 200,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 36 months | ||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ 380,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 95,000 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Class of Warrant or Right [Line Items] | ||
Warrants and Rights Outstanding | $ 7,195,997 | $ 7,195,997 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 4.60 | $ 4.60 |
Outstanding Warrants Expiration Dates | The outstanding warrants have expiration dates between August 2016 and March 2021. |
Net Loss per Common Share (Deta
Net Loss per Common Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Net Loss per Common Share [Line Items] | ||
Basic and diluted weighted average common stock shares outstanding | 12,457,858 | 12,100,588 |
Common stock options | ||
Net Loss per Common Share [Line Items] | ||
Potentially dilutive securities excluded from loss per share computations | 2,451,570 | 1,368,528 |
Common stock purchase warrants | ||
Net Loss per Common Share [Line Items] | ||
Potentially dilutive securities excluded from loss per share computations | 7,195,997 | 7,428,141 |
Restricted stock unvested | ||
Net Loss per Common Share [Line Items] | ||
Potentially dilutive securities excluded from loss per share computations | 150,000 | 0 |
Commitments And Contingencies (
Commitments And Contingencies (Details Narrative) | 3 Months Ended |
Mar. 31, 2016USD ($)a | |
Loss Contingencies [Line Items] | |
Operating Leases, Rent Expense, Minimum Rentals | $ 59,700 |
Long-term Purchase Commitment, Amount | 2,400,000 |
Purchase Commitment, Remaining Minimum Amount Committed | $ 2,100,000 |
Area of Land | a | 30,000 |
Lease Expiration Date | Jul. 31, 2021 |
Lessee Leasing Arrangements, Operating Leases, Renewal Term | 5 years |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | May. 12, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Subsequent Event [Line Items] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 4.60 | $ 4.60 | |
Wavi Holdings AG [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 4 | ||
Line of Credit Facility, Expiration Date | Jun. 1, 2017 | ||
Line of Credit Facility, Interest Rate During Period | 10.00% | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 550,000 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.75 | ||
Warrants Expiration term | 5 years | ||
Line of Credit Facility, Description | The agreement calls for WAVI to provide four $1 million tranches at specified times throughout the next 12 months. |