Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 10, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | BIOLIFE SOLUTIONS INC | |
Entity Central Index Key | 834,365 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 12,244,144 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 2,351,540 | $ 2,538,758 |
Short term investments | 2,902,105 | 7,399,636 |
Accounts receivable, trade, net of allowance for doubtful accounts of $0 at September 30, 2015 and December 31, 2014 | 792,274 | 901,623 |
Inventories | 1,783,383 | 965,224 |
Prepaid expenses and other current assets | 453,789 | 360,521 |
Total current assets | 8,283,091 | 12,165,762 |
Property and equipment | ||
Leasehold improvements | 1,284,491 | 1,284,491 |
Furniture and computer equipment | 535,768 | 476,788 |
Manufacturing and other equipment | 1,017,262 | 972,386 |
Subtotal | 2,837,521 | 2,733,665 |
Less: Accumulated depreciation | (1,333,608) | (1,078,060) |
Net property and equipment | 1,503,913 | 1,655,605 |
Internal use software | 1,187,022 | 0 |
Intangible asset | 2,215,385 | 2,215,385 |
Long term deposits | 36,166 | 36,166 |
Total assets | 13,225,577 | 16,072,918 |
Current liabilities | ||
Accounts payable | 978,279 | 474,662 |
Accrued expenses and other current liabilities | 150,980 | 121,869 |
Accrued compensation | 372,426 | 535,029 |
Deferred rent | 130,216 | 130,216 |
Total current liabilities | 1,631,901 | 1,261,776 |
Long term liabilities | ||
Deferred rent, long term | 809,275 | 874,825 |
Total liabilities | $ 2,441,176 | $ 2,136,601 |
Commitments and Contingencies (Note 10) | ||
Shareholders' equity | ||
Common stock, $0.001 par value; 150,000,000 shares authorized, 12,172,715 and 12,084,859 shares issued and outstanding at September 30, 2015 and December 31, 2014 | $ 12,172 | $ 12,084 |
Additional paid-in capital | 72,347,856 | 71,911,328 |
Accumulated other comprehensive loss | (601) | (6,448) |
Accumulated deficit | (63,207,536) | (60,112,987) |
Total BioLife Solutions, Inc. shareholders' equity | 9,151,891 | 11,803,977 |
Total non-controlling interest equity | 1,632,510 | 2,132,340 |
Total shareholders' equity | 10,784,401 | 13,936,317 |
Total liabilities and shareholders' equity | $ 13,225,577 | $ 16,072,918 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Accounts receivable allowances | $ 0 | $ 0 |
Stockholders Equity | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 150,000,000 | 150,000,000 |
Common stock, issued | 12,172,715 | 12,084,859 |
Common stock, outstanding | 12,172,715 | 12,084,859 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue | ||||
Product sales | $ 1,631,926 | $ 1,243,372 | $ 4,629,407 | $ 4,520,302 |
Cost of product sales | 658,542 | 654,978 | 1,954,752 | 2,483,199 |
Gross profit | 973,384 | 588,394 | 2,674,655 | 2,037,103 |
Operating expenses | ||||
Research and development | 329,527 | 153,328 | 953,026 | 513,393 |
Sales and marketing | 677,033 | 298,263 | 1,819,778 | 810,279 |
General and administrative | 1,263,272 | 1,011,316 | 3,514,678 | 2,844,858 |
Total operating expenses | 2,269,832 | 1,462,907 | 6,287,482 | 4,168,530 |
Operating loss | (1,296,448) | (874,513) | (3,612,827) | (2,131,427) |
Other income (expenses) | ||||
Gain on disposal of property and equipment | 0 | 4,400 | 0 | 4,400 |
Interest income | 4,729 | 7,658 | 18,448 | 12,175 |
Interest expense | 0 | 0 | 0 | (177,308) |
Amortization of deferred financing costs | 0 | 0 | 0 | (13,022) |
Total other income (expenses) | 4,729 | 12,058 | 18,448 | (173,755) |
Net Loss | (1,291,719) | (862,455) | (3,594,379) | (2,305,182) |
Net loss attributable to non-controlling interest | 223,031 | 0 | 499,830 | 0 |
Net Loss attributable to BioLife Solutions, Inc. | $ (1,068,688) | $ (862,455) | $ (3,094,549) | $ (2,305,182) |
Basic and diluted net loss per common share attributable to BioLife Solutions, Inc. | $ (0.09) | $ (0.07) | $ (0.26) | $ (0.23) |
Basic and diluted weighted average common shares used to calculate net loss per common share | 12,157,575 | 12,042,739 | 12,134,474 | 9,987,682 |
Statements of Comprehensive Inc
Statements of Comprehensive Income (Loss) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statements Of Comprehensive Income Loss | ||||
Net loss | $ (1,291,719) | $ (862,455) | $ (3,594,379) | $ (2,305,182) |
Other comprehensive income (loss) | ||||
Unrealized gain (loss) on available-for-sale investments | 789 | (3,099) | 5,847 | (6,606) |
Total other comprehensive income (loss) | 789 | (3,099) | 5,847 | (6,606) |
Comprehensive loss attributable to non-controlling interest | 223,031 | 0 | 499,830 | 0 |
Comprehensive loss attributable to BioLife Solutions, Inc. | $ (1,067,899) | $ (865,554) | $ (3,088,702) | $ (2,311,788) |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (3,594,379) | $ (2,305,182) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 255,548 | 186,105 |
Gain on sale of property and equipment | 0 | (4,400) |
Stock-based compensation expense | 336,630 | 183,501 |
Stock issued for services | 0 | 210,000 |
Amortization of deferred financing costs | 0 | 13,022 |
Amortization of deferred rent related to lease incentives | (95,250) | (121,103) |
Accretion and amortization on available for sale investments | 81,210 | 53,198 |
Change in operating assets and liabilities | ||
(Increase) Decrease in Accounts receivable, trade | 109,349 | 234,240 |
Inventories | (818,159) | (296,700) |
Prepaid expenses and other current assets | (86,405) | 16,638 |
Increase (Decrease) in | ||
Accounts payable | 253,647 | (698,232) |
Accrued compensation and other current liabilities | (175,482) | (185,928) |
Accrued interest, related parties | 0 | 177,308 |
Deferred rent | 29,700 | (18,007) |
Deferred revenue | 0 | 90,000 |
Net cash used in operating activities | (3,703,591) | (2,465,540) |
Cash flows from investing activities | ||
Sales of available-for-sale investments | 5,825,000 | 102,376 |
Purchase of available-for-sale investments | (1,409,695) | (7,952,119) |
Proceeds from the sale of property and equipment | 0 | 4,400 |
Costs associated with internal use software development | (895,062) | 0 |
Purchase of property and equipment | (103,856) | (247,155) |
Net cash provided by (used in) investing activities | 3,416,387 | (8,092,498) |
Cash flows from financing activity | ||
Proceeds from sale of common stock, net of expenses | 0 | 13,596,230 |
Proceeds from exercise of common stock options | 99,986 | 80,592 |
Net cash provided by financing activity | 99,986 | 13,676,822 |
Net increase (decrease) in cash and cash equivalents | (187,218) | 3,118,784 |
Cash and cash equivalents - beginning of period | 2,538,758 | 156,273 |
Cash and cash equivalents - end of period | 2,351,540 | 3,275,057 |
Non-cash investing activities | ||
Costs incurred for capitalized internal use software not paid as of quarter end (amounts are included in liabilities) | 291,960 | 0 |
Non-cash financing activities | ||
Conversion of notes payable and related party accrued interest to equity, net of unamortized deferred finance costs | $ 0 | $ 14,180,193 |
1. Organization and Significant
1. Organization and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
1. Organization and Significant Accounting Policies | Business BioLife Solutions, Inc. ("BioLife, us, we, our, or the Company) is the leading 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 managements 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, 2014 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, 2014. 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 In each of the three and nine months ended September 30, 2015, we derived approximately 10% of our product revenue from one customer. In the nine months ended September 30, 2014, we derived approximately 24% of our product revenue from our relationship with one contract manufacturing customer. Two other customers, in aggregate, accounted for 34% and 22% of revenue in the three and nine months ended September 30, 2014, respectively. No other customer accounted for more than 10% of revenue in the three or nine months ended September 30, 2015 or 2014. At September 30, 2015, two customers accounted for approximately 26% of total gross accounts receivable. At December 31, 2014, two customers accounted for approximately 25% of total gross accounts receivable. Revenue from customers located in foreign countries represented 21% of total revenue in each of the three and nine months ended September 30, 2015 and 19% and 15% of total revenue during the three and nine months ended September 30, 2014, respectively. Internal Use Software We capitalize costs associated with the development of the biologistex web and mobile applications, which we consider internal-use software. Capitalization of costs began in the first quarter of 2015, when we reached the application development stage. Such capitalized costs include external direct costs utilized in developing or obtaining the applications and payroll and payroll-related expenses for employees, who are directly associated with the development of the applications. Capitalization will cease once we have completed all substantial testing, at which time the applications are complete and ready for their intended use. In the nine months ended September 30, 2015, we capitalized $1.2 million in costs related to the development of the biologistex web and mobile applications. Of this amount, $0.2 million was unpaid as of September 30, 2015. Maintenance and enhancement costs, including those costs in the post-implementation stages, will be expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the software that result in added functionality, in which case the costs are capitalized. Capitalized costs will be amortized on a straight-line basis over estimated useful life of three years once the software has been commercially deployed. Recent Accounting Pronouncements On May 28, 2014, the Financial Accounting Standards Board (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. 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. With the exception of the new revenue standard discussed above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to our Consolidated Financial Statements. |
2. Accumulated Other Comprehens
2. Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
2. Accumulated Other Comprehensive Loss | The following tables show the changes in Accumulated Other Comprehensive Loss by component for the nine months ended September 30, 2015: Nine Months Ended September 30, 2015 Unrealized Loss on Investments, Beginning Balance $ (6,448 ) Unrealized Gain on Investments, Current Period 5,847 Unrealized Loss on Investments, Ending Balance $ (601 ) |
3. Fair Value Measurement
3. Fair Value Measurement | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
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 September 30, 2015 and December 31, 2014, the Company does not have liabilities that are measured at fair value. The following tables set forth the Company's financial assets measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014, based on the three-tier fair value hierarchy: As of September 30, 2015 Level 1 Level 2 Total Bank deposits $ 345,085 $ $ 345,085 Money market funds 2,006,455 2,006,455 Cash and cash equivalents 2,351,540 2,351,540 Corporate debt securities 2,902,105 2,902,105 Total $ 5,253,645 $ $ 5,253,645 As of December 31, 2014 Level 1 Level 2 Total Bank deposits $ 972,891 $ $ 972,891 Money market funds 1,565,867 1,565,867 Cash and cash equivalents 2,538,758 2,538,758 Corporate debt securities 6,799,702 6,799,702 Commercial paper 599,934 599,934 Short term investments 7,399,636 7,399,636 Total $ 9,938,394 $ $ 9,938,394 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 nine months ended September 30, 2015 and the twelve months ended December 31, 2014. Investments in debt securities at September 30, 2015, are investment grade and carried a long-term rating of BBB+ or higher. |
4. Short Term Investments
4. Short Term Investments | 9 Months Ended |
Sep. 30, 2015 | |
Investments, All Other Investments [Abstract] | |
4. Short Term Investments | The amortized cost and fair value of short term investments as of September 30, 2015 were as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 2,902,706 $ $ (601 ) $ 2,902,105 The amortized cost and fair value of short term investments as of December 31, 2014 were as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 6,806,150 $ $ (6,448 ) $ 6,799,702 Commercial paper 599,934 599,934 Total marketable securities $ 7,406,084 $ $ (6,448 ) $ 7,399,636 As of September 30, 2015, there are no short term investments, classified and accounted for as available-for-sale securities that have been in a continuous unrealized loss position in excess of twelve months. As of September 30, 2015, all of the Companys short term investments had maturity dates due within 1 year or less. |
5. Inventories
5. Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
5. Inventories | Inventory consists of the following at September 30, 2015 and December 31, 2014: September 30, 2015 December 31, 2014 Raw materials $ 351,783 $ 362,656 Work in progress 552,702 79,012 Finished goods 878,898 523,556 Total $ 1,783,383 $ 965,224 |
6. Deferred Rent
6. Deferred Rent | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
6. Deferred Rent | Deferred rent consists of the following at September 30, 2015 and December 31, 2014: September 30, 2015 December 31, 2014 Landlord-funded leasehold improvements $ 1,124,790 $ 1,124,790 Less accumulated amortization (343,781 ) (248,531 ) Total 781,009 876,259 Straight line rent adjustment 158,482 128,782 Total deferred rent $ 939,491 $ 1,005,041 During the three and nine month periods ended September 30, 2015, the Company recorded $31,750 and $95,250, respectively, in deferred rent amortization of these landlord funded leasehold improvements. During the three and nine month periods ended September 30, 2014, the Company recorded $27,063 and $88,406, respectively, in deferred rent amortization of these landlord funded leasehold improvements. 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. |
7. Share-based Compensation
7. Share-based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
7. Share-based Compensation | Stock Options We have a stock-based compensation plan, the Amended and Restated 2013 Performance Incentive Plan (the 2013 Plan), which allows us to grant options or restricted stock units to all employees, including executive officers, outside consultants, and non-employee directors. The Plan was amended by stockholder approval on May 4, 2015, to increase the number of shares of common stock available to be granted under the Plan to 3,100,000, plus any shares of common stock underlying any option granted pursuant to an equity compensation plan other than the 2013 Plan that was outstanding on June 20, 2013, the date the stockholders originally approved the 2013 Plan, and that subsequently terminated or expired. The following is a summary of stock option activity for the nine month period ended September 30, 2015, and the status of stock options outstanding at September 30, 2015: Nine Month Period Ended September 30, 2015 Wtd. Avg. Exercise Options Price Outstanding at beginning of year 1,390,770 $ 1.50 Granted 1,290,881 $ 2.06 Exercised (87,856 ) $ 1.14 Forfeited (3,438 ) $ 3.77 Outstanding at September 30, 2015 2,590,357 $ 1.79 Stock options exercisable at September 30, 2015 1,215,230 $ 1.41 As of September 30, 2015, there was $1,131,568 of aggregate intrinsic value of outstanding stock options, including $1,065,275 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 Companys 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, 2015. This amount will change based on the fair market value of the Companys stock. During the three and nine months ended September 30, 2015 intrinsic value of awards exercised was $18,196 and $90,118, respectively. During the three and nine months ended September 30, 2014 intrinsic value of awards exercised was $0 and $153,216, respectively. Weighted average grant date fair value for options granted during the three and nine months ended September 30, 2015 was $1.90 and $1.75 per share and $2.22 and $2.96 for the three and nine months, respectively, ended September 30, 2014. 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, 2015 2014 2015 2014 Risk free interest rate 1.77% 1.93% 1.77% 2.02% Dividend yield 0.0% 0.0% 0.0% 0.0% Expected term (in years) 7 7 7 7 Volatility 105% 105% 105% 105% We recorded stock compensation expense related to options for the three and nine month periods ended September 30, 2015 and 2014, as follows: Three Month Period Ended Nine Month Period Ended September 30, September 30, 2015 2014 2015 2014 Research and development costs $ 26,751 $ 1,064 $ 53,109 $ 18,550 Sales and marketing costs 26,746 7,624 51,771 12,910 General and administrative costs 93,955 46,671 159,405 111,947 Cost of product sales 30,807 18,966 72,345 40,094 Total $ 178,259 $ 74,325 $ 336,630 $ 183,501 Management applies an estimated forfeiture rate that is derived from historical employee termination data. The estimated forfeiture rate applied for the three and nine month periods ended September 30, 2015 and 2014 was approximately 7%. As of September 30, 2015, we had approximately $2,231,126 of unrecognized compensation expense related to unvested stock options. We expect to recognize this compensation expense over a weighted average period of approximately 3.4 years. During the nine months ended September 30, 2014, we issued or committed to issue common stock of the Company with a value of $210,000 for services rendered during the period. These costs were recorded in general and administrative expenses during the period. Restricted Stock At September 30, 2015, there were no unvested restricted stock units outstanding. |
8. Warrants
8. Warrants | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
8. Warrants | At September 30, 2015 and December 31, 2014, we had 7,428,141 warrants outstanding and exercisable with a weighted average exercise price of $4.49. The outstanding warrants have expiration dates between November 2015 and March 2021. |
9. Net Loss per Common Share
9. Net Loss per Common Share | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
9. 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 and nine month periods ended September 30, 2015 and 2014, since the effect is anti-dilutive due to the Companys net losses. Common stock equivalents include stock options and warrants. 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 September 30, 2015 and 2014, respectively: Three Month Period Ended Nine Month Period Ended September 30, September 30, 2015 2014 2015 2014 Basic and diluted weighted average common stock shares outstanding 12,157,575 12,042,739 12,134,474 9,987,682 Potentially dilutive securities excluded from loss per share computations: Common stock options 2,590,357 1,384,341 2,590,357 1,384,341 Common stock purchase warrants 7,428,141 7,428,141 7,428,141 7,428,141 |
10. Commitments & Contingencies
10. Commitments & Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
10. 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 Companys 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, Chief Operating Officer, 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 September 30, 2015, the remaining purchase commitment is $2.2 million. We agreed to pay SAVSU $1.0 million in consideration of SAVSUs participation in the biologistex joint venture. If certain performance requirements are met, we will record these costs in twelve equal increments. As of September 30, 2015, we have recorded $0.8 million related to this commitment. 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 Companys business. |
1. Organization and Significa17
1. Organization and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Business | BioLife Solutions, Inc. ("BioLife, us, we, our, or the Company) is the leading 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 managements 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, 2014 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, 2014. |
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. |
Concentration of Credit Risk and Business Risk | In each of the three and nine months ended September 30, 2015, we derived approximately 10% of our product revenue from one customer. In the nine months ended September 30, 2014, we derived approximately 24% of our product revenue from our relationship with one contract manufacturing customer. Two other customers, in aggregate, accounted for 34% and 22% of revenue in the three and nine months ended September 30, 2014, respectively. No other customer accounted for more than 10% of revenue in the three or nine months ended September 30, 2015 or 2014. At September 30, 2015, two customers accounted for approximately 26% of total gross accounts receivable. At December 31, 2014, two customers accounted for approximately 25% of total gross accounts receivable. Revenue from customers located in foreign countries represented 21% of total revenue in each of the three and nine months ended September 30, 2015 and 19% and 15% of total revenue during the three and nine months ended September 30, 2014, respectively. |
Internal Use Software | We capitalize costs associated with the development of the biologistex web and mobile applications, which we consider internal-use software. Capitalization of costs began in the first quarter of 2015, when we reached the application development stage. Such capitalized costs include external direct costs utilized in developing or obtaining the applications and payroll and payroll-related expenses for employees, who are directly associated with the development of the applications. Capitalization will cease once we have completed all substantial testing, at which time the applications are complete and ready for their intended use. In the nine months ended September 30, 2015, we capitalized $1.2 million in costs related to the development of the biologistex web and mobile applications. Of this amount, $0.2 million was unpaid as of September 30, 2015. Maintenance and enhancement costs, including those costs in the post-implementation stages, will be expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the software that result in added functionality, in which case the costs are capitalized. Capitalized costs will be amortized on a straight-line basis over estimated useful life of three years once the software has been commercially deployed. |
Recent Accounting Pronouncements | On May 28, 2014, the Financial Accounting Standards Board (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. 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. With the exception of the new revenue standard discussed above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to our Consolidated Financial Statements. |
2. Accumulated Other Comprehe18
2. Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Loss Tables | |
Schedule of accumulated other comprehensive Loss | Nine Months Ended September 30, 2015 Unrealized Loss on Investments, Beginning Balance $ (6,448 ) Unrealized Gain on Investments, Current Period 5,847 Unrealized Loss on Investments, Ending Balance $ (601 ) |
3. Fair Value Measurement (Tabl
3. Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Measurement Tables | |
Schedule of fair value measurements | As of September 30, 2015 Level 1 Level 2 Total Bank deposits $ 345,085 $ $ 345,085 Money market funds 2,006,455 2,006,455 Cash and cash equivalents 2,351,540 2,351,540 Corporate debt securities 2,902,105 2,902,105 Total $ 5,253,645 $ $ 5,253,645 As of December 31, 2014 Level 1 Level 2 Total Bank deposits $ 972,891 $ $ 972,891 Money market funds 1,565,867 1,565,867 Cash and cash equivalents 2,538,758 2,538,758 Corporate debt securities 6,799,702 6,799,702 Commercial paper 599,934 599,934 Short term investments 7,399,636 7,399,636 Total $ 9,938,394 $ $ 9,938,394 |
4. Short Term Investments (Tabl
4. Short Term Investments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Short Term Investments Tables | |
Schedule of available for sale securities | The amortized cost and fair value of short term investments as of September 30, 2015 were as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 2,902,706 $ $ (601 ) $ 2,902,105 The amortized cost and fair value of short term investments as of December 31, 2014 were as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 6,806,150 $ $ (6,448 ) $ 6,799,702 Commercial paper 599,934 599,934 Total marketable securities $ 7,406,084 $ $ (6,448 ) $ 7,399,636 |
5. Inventories (Tables)
5. Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Inventories | September 30, 2015 December 31, 2014 Raw materials $ 351,783 $ 362,656 Work in progress 552,702 79,012 Finished goods 878,898 523,556 Total $ 1,783,383 $ 965,224 |
6. Deferred Rent (Tables)
6. Deferred Rent (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Deferred rent | September 30, 2015 December 31, 2014 Landlord-funded leasehold improvements $ 1,124,790 $ 1,124,790 Less accumulated amortization (343,781 ) (248,531 ) Total 781,009 876,259 Straight line rent adjustment 158,482 128,782 Total deferred rent $ 939,491 $ 1,005,041 |
7. Share-based Compensation (Ta
7. Share-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Summary of stock option activity | Nine Month Period Ended September 30, 2015 Wtd. Avg. Exercise Options Price Outstanding at beginning of year 1,390,770 $ 1.50 Granted 1,290,881 $ 2.06 Exercised (87,856 ) $ 1.14 Forfeited (3,438 ) $ 3.77 Outstanding at September 30, 2015 2,590,357 $ 1.79 Stock options exercisable at September 30, 2015 1,215,230 $ 1.41 |
Weighted average assumptions of share based payment | Three Month Period Ended Nine Month Period Ended September 30, September 30, 2015 2014 2015 2014 Risk free interest rate 1.77% 1.93% 1.77% 2.02% Dividend yield 0.0% 0.0% 0.0% 0.0% Expected term (in years) 7 7 7 7 Volatility 105% 105% 105% 105% |
Stock compensation expense | Three Month Period Ended Nine Month Period Ended September 30, September 30, 2015 2014 2015 2014 Research and development costs $ 26,751 $ 1,064 $ 53,109 $ 18,550 Sales and marketing costs 26,746 7,624 51,771 12,910 General and administrative costs 93,955 46,671 159,405 111,947 Cost of product sales 30,807 18,966 72,345 40,094 Total $ 178,259 $ 74,325 $ 336,630 $ 183,501 |
9. Net Loss per Common Share (T
9. Net Loss per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Loss Per share computation | Three Month Period Ended Nine Month Period Ended September 30, September 30, 2015 2014 2015 2014 Basic and diluted weighted average common stock shares outstanding 12,157,575 12,042,739 12,134,474 9,987,682 Potentially dilutive securities excluded from loss per share computations: Common stock options 2,590,357 1,384,341 2,590,357 1,384,341 Common stock purchase warrants 7,428,141 7,428,141 7,428,141 7,428,141 |
2. Accumulated Other Comprehe25
2. Accumulated Other Comprehensive Income (Loss) (Details) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Accumulated Other Comprehensive Income Loss Details | |
Unrealized Loss on Investments, Beginning Balance | $ (6,448) |
Unrealized Gain on Investments, Current Period | 5,847 |
Unrealized Loss on Investments, Ending Balance | $ (601) |
3. Fair Value Measurement (Deta
3. Fair Value Measurement (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Bank deposits | $ 345,085 | $ 972,891 |
Money market funds | 2,006,455 | 1,565,867 |
Cash and cash equivalents | 2,351,540 | 2,538,758 |
Corporate debt securities | 2,902,105 | 6,799,702 |
Commercial paper | 0 | 599,934 |
Short term investments | 0 | 7,399,636 |
Assets measured at fair value | 5,253,645 | 9,938,394 |
Level 1 | ||
Bank deposits | 345,085 | 972,891 |
Money market funds | 2,006,455 | 1,565,867 |
Cash and cash equivalents | 2,351,540 | 2,538,758 |
Corporate debt securities | 2,902,105 | 6,799,702 |
Commercial paper | 0 | 599,934 |
Short term investments | 0 | 7,399,636 |
Assets measured at fair value | 5,253,645 | 9,938,394 |
Level 2 | ||
Bank deposits | 0 | 0 |
Money market funds | 0 | 0 |
Cash and cash equivalents | 0 | 0 |
Corporate debt securities | 0 | 0 |
Commercial paper | 0 | 0 |
Short term investments | 0 | 0 |
Assets measured at fair value | $ 0 | $ 0 |
4. Short Term Investments (Deta
4. Short Term Investments (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Amortized Cost | $ 2,902,706 | $ 7,406,084 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (601) | (6,448) |
Fair Value | 2,902,105 | 7,399,636 |
Corporate debt securities | ||
Amortized Cost | 2,902,706 | 6,806,150 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (601) | (6,448) |
Fair Value | 2,902,105 | 6,799,702 |
Commercial paper | ||
Amortized Cost | 0 | 599,934 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 0 | $ 599,934 |
5. Inventories (Details)
5. Inventories (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Inventories Details | ||
Raw materials | $ 351,783 | $ 362,656 |
Work in progress | 552,702 | 79,012 |
Finished goods | 878,898 | 523,556 |
Total | $ 1,783,383 | $ 965,224 |
6. Deferred Rent (Details)
6. Deferred Rent (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Deferred Rent Details | ||
Landlord-funded leasehold improvements | $ 1,124,790 | $ 1,124,790 |
Less accumulated amortization | (343,781) | (248,531) |
Total | 781,009 | 876,259 |
Straight line rent adjustment | 158,482 | 128,782 |
Total deferred rent | $ 939,491 | $ 1,005,041 |
6. Deferred Rent (Details Narra
6. Deferred Rent (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Deferred Rent Details | ||||
Deferred rent | $ 31,750 | $ 27,063 | $ 95,250 | $ 88,406 |
7. Share-based Compensation (De
7. Share-based Compensation (Details) - Common stock options | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Number of Shares | |
Outstanding at beginning of year, Shares | shares | 1,390,770 |
Granted, Shares | shares | 1,290,881 |
Exercised, Shares | shares | (87,856) |
Forfeited, Shares | shares | (3,438) |
Outstanding at September 30, 2015 | shares | 2,590,357 |
Stock options exercisable at September 30, 2015 | shares | 1,215,230 |
Wtd. Avg Exercise Price | |
Outstanding at beginning of year, Wtd. Avg. Shares Exercise Price | $ 1.50 |
Granted, Wtd. Avg. Shares Exercise Price | 2.06 |
Exercised, Wtd. Avg. Shares Exercise Price | 1.14 |
Forfeited, Wtd. Avg. Shares Exercise Price | 3.77 |
Outstanding at September 30, 2015, Wtd. Avg. Shares Exercise Price | 1.79 |
Stock options exercisable at September 30, 2015, Wtd. Avg. Shares Exercise Price | $ 1.41 |
7. Share-based Compensation (32
7. Share-based Compensation (Details 1) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Details 1 | ||||
Risk free interest rate | 1.77% | 1.93% | 1.77% | 2.02% |
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected term (in years) | 7 years | 7 years | 7 years | 7 years |
Volatility | 105.00% | 105.00% | 105.00% | 105.00% |
7. Share-based Compensation (33
7. Share-based Compensation (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share based compensation | $ 178,259 | $ 74,325 | $ 336,630 | $ 183,501 |
Research and development costs | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share based compensation | 26,751 | 1,064 | 53,109 | 18,550 |
Sales and marketing costs | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share based compensation | 26,746 | 7,624 | 51,771 | 12,910 |
General and administrative costs | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share based compensation | 93,955 | 46,671 | 159,405 | 111,947 |
Cost of product sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share based compensation | $ 30,807 | $ 18,966 | $ 72,345 | $ 40,094 |
8. Warrants (Details Narrative)
8. Warrants (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Warrants Details Narrative | ||
Warrants outstanding and exercisable | $ 7,428,141 | $ 7,428,141 |
Warrant exercise price | $ 4.49 | $ 4.49 |
Outstanding warrants expiration dates | The outstanding warrants have expiration dates between November 2015 and March 2021 |
9. Net Loss per Common Share (D
9. Net Loss per Common Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Basic and diluted weighted average common stock shares outstanding | 12,157,575 | 12,042,739 | 12,134,474 | 9,987,682 |
Common stock options | ||||
Potentially dilutive securities excluded from loss per share computations: | ||||
Shares | 2,590,357 | 1,384,341 | 2,590,357 | 1,384,341 |
Common stock purchase warrants | ||||
Potentially dilutive securities excluded from loss per share computations: | ||||
Shares | 7,428,141 | 7,428,141 | 7,428,141 | 7,428,141 |