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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
____________________________________________________
FORM 10-Q
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from          to
Commission File Number 001-36362
____________________________________________________
BioLife Solutions, Inc.
(Exact name of registrant as specified in its charter)
Img 0.jpg
____________________________________________________
Delaware94-3076866
(State or other jurisdiction of
incorporation or organization)
(IRS Employer
Identification No.)
3303 Monte Villa Parkway, Suite 310, Bothell, Washington, 98021
(Address of registrant’s principal executive offices, Zip Code)
(425) 402-1400
(Telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolName of exchange on which registered
Common stock, par value $0.001 per shareBLFS
The NASDAQ Stock Market, LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (S232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit said files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o Accelerated filer þ Non-accelerated filer o Smaller reporting company o Emerging Growth Company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ
As of November 1, 2023, 44,031,322 shares of the registrant’s common stock were outstanding.
1
BIOLIFE SOLUTIONS, INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2023
TABLE OF CONTENTS
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BioLife Solutions, Inc.
Unaudited Condensed Consolidated Balance Sheets
September 30,December 31,
(In thousands, except per share and share data)20232022
Assets
Current assets:
Cash and cash equivalents$19,235 $19,442 
Restricted cash31 31 
Available-for-sale securities, current portion21,794 43,260 
Accounts receivable, trade, net of allowance for credit losses of $1,244 and $739 as of September 30, 2023 and December 31, 2022, respectively
24,556 33,936 
Inventories43,354 34,904 
Prepaid expenses and other current assets7,854 6,879 
Total current assets116,824 138,452 
Assets held for rent, net7,209 9,064 
Property and equipment, net20,998 23,638 
Operating lease right-of-use assets, net12,651 15,292 
Financing lease right-of-use assets, net124 272 
Long-term deposits and other assets316 281 
Available-for-sale securities, long-term1,156 1,332 
Equity investments5,069 5,069 
Intangible assets, net22,064 32,088 
Goodwill224,741 224,741 
Total assets$411,152 $450,229 
Liabilities and Shareholders’ Equity
  
Current liabilities:  
Accounts payable$11,980 $15,367 
Accrued expenses and other current liabilities8,568 9,782 
Sales taxes payable5,469 4,151 
Warranty liability8,215 8,312 
Lease liabilities, operating, current portion2,906 2,860 
Lease liabilities, financing, current portion398 158 
Debt, current portion5,034 1,814 
Contingent consideration, current portion52 2,138 
Total current liabilities42,622 44,582 
Contingent consideration, long-term363 2,318 
Lease liabilities, operating, long-term13,677 14,962 
Lease liabilities, financing, long-term1,250 126 
Debt, long-term20,937 23,793 
Deferred tax liabilities286 250 
Other long-term liabilities- 10 
Total liabilities79,135 86,041 
Commitments and contingencies (Note 13)
Shareholders’ equity:  
Preferred stock, $0.001 par value; 1,000,000 shares authorized, Series A, 4,250 shares designated, and 0 shares issued and outstanding as of September 30, 2023 and December 31, 2022
- - 
Common stock, $0.001 par value; 150,000,000 shares authorized, 43,831,351 and 42,832,231 shares issued and outstanding, respectively, as of September 30, 2023 and December 31, 2022
44 43 
Additional paid-in capital632,593 611,739 
Accumulated other comprehensive loss, net of taxes(660)(679)
Accumulated deficit(299,960)(246,915)
Total shareholders’ equity332,017 364,188 
Total liabilities and shareholders’ equity$411,152 $450,229 
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
3
BioLife Solutions, Inc.
Unaudited Condensed Consolidated Statements of Operations
Three Months Ended
September 30,		Nine Months Ended
September 30,
(In thousands, except per share and share data)2023202220232022
  
Product revenue$26,891 $33,668 $91,520 $98,227 
Service revenue4,378 4,330 13,043 11,117 
Rental revenue2,059 2,749 5,975 8,156 
Total product, rental, and service revenue33,328 40,747 110,538 117,500 
Costs and operating expenses:  
Cost of product revenue (exclusive of intangible assets amortization)16,665 21,876 57,022 63,377 
Cost of service revenue (exclusive of intangible assets amortization)3,945 3,253 11,873 8,810 
Cost of rental revenue (exclusive of intangible assets amortization)1,069 1,880 4,141 5,462 
General and administrative12,513 11,916 42,757 35,098 
Sales and marketing7,256 5,278 20,045 15,601 
Research and development5,402 3,425 14,397 10,634 
Asset impairment charges15,485 — 15,485 69,900 
Intangible asset amortization1,356 2,513 4,266 8,236 
Change in fair value of contingent consideration(1,580)2,346 (1,778)(3,348)
Total operating expenses62,111 52,487 168,208 213,770 
Operating loss(28,783)(11,740)(57,670)(96,270)
Other (expense) income:  
Change in fair value of investments— 697 — 697 
Gain on settlement of Global Cooling escrow— — 5,115 — 
Interest expense, net(476)(15)(1,305)(250)
Other income242 142 1,027 270 
Total other (expense) income, net(234)824 4,837 717 
  
Loss before income tax (expense) benefit(29,017)(10,916)(52,833)(95,553)
Income tax (expense) benefit(115)599 (212)4,937 
Net loss$(29,132)$(10,317)$(53,045)$(90,616)
  
Net loss attributable to common shareholders:  
Basic and Diluted$(29,132)$(10,317)$(53,045)$(90,616)
Net loss per share attributable to common shareholders:  
Basic and Diluted$(0.67)$(0.24)$(1.22)$(2.14)
Weighted average shares used to compute loss per share attributable to common shareholders:  
Basic and Diluted43,570,43842,647,96743,348,41242,376,392
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
4
BioLife Solutions, Inc.
Unaudited Condensed Consolidated Statements of Comprehensive Loss
Three Months Ended
September 30,		Nine Months Ended
September 30,
(In thousands)2023202220232022
Net loss$(29,132)$(10,317)$(53,045)$(90,616)
Other comprehensive income (loss):  
Foreign currency translation adjustment, net of tax(165)(321)(25)(900)
Unrealized gain (loss) on available-for-sale securities, net of tax4 (36)44 (75)
Comprehensive loss$(29,293)$(10,674)$(53,026)$(91,591)
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
5
BioLife Solutions, Inc.
Unaudited Condensed Consolidated Statements of Shareholders’ Equity

Nine Months Ended September 30, 2023
(In thousands, except share data)Series A
Preferred
Stock
Shares		Series A
Preferred
Stock
Amount		Common
Stock
Shares		Common
Stock
Amount		Additional
Paid-in
Capital		Accumulated
Other
Comprehensive
Income
Accumulated Deficit
Total Shareholders’ Equity
Balance, December 31, 2022-$- 42,832,231$43 $611,739 $(679)$(246,915)$364,188 
Stock-based compensation-- -- 23,337 - - 23,337 
Stock option exercises-- 175,043- 369 - - 369 
Stock issued – on vested RSAs-- 923,1281 - - - 1 
Contingent consideration shares issued- - 116,973- 2,263 - - 2,263 
Settlement of Global Cooling escrow- - (216,024)- (5,115)- - (5,115)
Foreign currency translation-- -- - (25)- (25)
Unrealized gain on available-for-sale securities-- -- - 44 - 44 
Net loss-- -- - - (53,045)(53,045)
Balance, September 30, 2023-$- 43,831,351$44 $632,593 $(660)$(299,960)$332,017 
Three Months Ended September 30, 2023
(In thousands, except share data)Series A
Preferred
Stock
Shares		Series A
Preferred
Stock
Amount		Common
Stock
Shares		Common
Stock
Amount		Additional
Paid-in
Capital		Accumulated
Other
Comprehensive
Income
Accumulated Deficit
Total Shareholders’ Equity
Balance, June 30, 2023-$- 43,442,250$43 $623,412 $(499)$(270,828)$352,128 
Stock-based compensation-- -- 9,117 - - 9,117 
Stock option exercises-- 31,000- 64 - - 64 
Stock issued – on vested RSAs-- 358,1011 - - - 1 
Foreign currency translation-- -- - (165)- (165)
Unrealized gain on available-for-sale securities-- -- - 4 - 4 
Net loss-- -- - - (29,132)(29,132)
Balance, September 30, 2023-$- 43,831,351$44 $632,593 $(660)$(299,960)$332,017 
6
Nine Months Ended September 30, 2022
(In thousands, except share data)Series A
Preferred
Stock
Shares		Series A
Preferred
Stock
Amount		Common
Stock
Shares		Common
Stock
Amount
Additional Paid-in Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total Shareholders’ Equity
Balance, December 31, 2021-$- 41,817,503$42 $585,397 $(282)$(107,110)$478,047 
Fees incurred for registration filings-- -- (130)- - (130)
Stock-based compensation-- -- 17,671 - - 17,671 
Stock option exercises-- 158,075- 307 - - 307 
Stock issued – on vested RSAs-- 666,3361 (1)- - - 
Contingent consideration shares issued-- 64,130- 816 - - 816 
Foreign currency translation-- -- - (900)- (900)
Unrealized loss on available-for-sale securities-- -- - (75)- (75)
Net loss-- -- - - (90,616)(90,616)
Balance, September 30, 2022-$- 42,706,044$43 $604,060 $(1,257)$(197,726)$405,120 
Three Months Ended September 30, 2022
(In thousands, except share data)Series A
Preferred
Stock
Shares		Series A
Preferred
Stock
Amount		Common
Stock
Shares		Common
Stock
Amount
Additional Paid-in Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total Shareholders’ Equity
Balance, June 30, 2022-$- 42,536,734$43 $597,810 $(900)$(187,409)$409,544 
Fees incurred for registration filings-- -- (55)- - (55)
Stock-based compensation-- -- 6,299 - - 6,299 
Stock option exercises-- 3,571- 6 - - 6 
Stock issued – on vested RSAs-- 165,739- - - - - 
Foreign currency translation-- -- - (321)- (321)
Unrealized loss on available-for-sale securities-- -- - (36)- (36)
Net loss-- -- - - (10,317)(10,317)
Balance, September 30, 2022-$- 42,706,044$43 $604,060 $(1,257)$(197,726)$405,120 
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
7
BioLife Solutions, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
Nine Months Ended
September 30,
(In thousands)20232022
Cash flows from operating activities
Net loss$(53,045)$(90,616)
Adjustments to reconcile net loss to net cash used in operating activities
Impairment of intangible assets5,758 69,900 
Impairment of long-lived assets9,727 - 
Settlement of Global Cooling escrow(5,115)- 
Depreciation5,646 5,056 
Amortization of intangible assets4,266 8,236 
Amortization of loan costs13 - 
Stock-based compensation23,337 17,671 
Non-cash lease expense494 1,025 
Deferred income tax expense (benefit)36 (4,937)
Change in fair value of contingent consideration(1,778)(3,348)
Change in fair value of equity investments- (697)
Accretion of investments(1,049)- 
Loss on disposal of property and equipment, net227 54 
Loss on disposal of assets held for rent, net443 369 
Other- 302 
Change in operating assets and liabilities, net of effects of acquisitions
Accounts receivable, trade, net9,437 (9,438)
Inventories(8,450)(5,403)
Prepaid expenses and other assets(1,045)(1,843)
Accounts payable(3,380)(3,615)
Accrued expenses and other current liabilities(1,692)444 
Warranty liability(97)(1,031)
Sales taxes payable1,330 1,526 
Other128 - 
Net cash used in operating activities(14,809)(16,345)
Cash flows from investing activities
Purchases of available-for-sale securities(22,688)(35,767)
Proceeds from sale of available-for-sale securities2,971 - 
Maturities of available-for-sale securities42,450 750 
Purchases of assets held for rent(3,453)(2,269)
Purchases of property and equipment(5,400)(5,937)
Net cash provided by (used in) investing activities13,880 (43,223)
Cash flows from financing activities
Payments on equipment loans(383)(370)
Proceeds from exercise of common stock options370 307 
Proceeds from term loans- 20,000 
8
Payments on term loans(300)(1,750)
Fees paid related to issuance of common stock- (130)
Proceeds from financed insurance premium2,639 
Payments on financed insurance premium(1,653)(814)
Other77 (302)
Net cash provided by financing activities750 16,941 
Net decrease in cash, cash equivalents, and restricted cash(179)(42,627)
Cash, cash equivalents, and restricted cash – beginning of period19,473 69,870 
Effects of currency translation on cash, cash equivalents, and restricted cash(28)(176)
Cash, cash equivalents, and restricted cash – end of period$19,266 $27,067 
Non-cash investing and financing activities
Purchase of property and equipment not yet paid$4,064 $1,661 
Assets acquired under operating leases$(880)$243 
Assets acquired under financing leases$1,682 $- 
Unrealized gains and losses on currency translation$(11)$- 
Unrealized gains and losses on available-for-sale securities$(44)$75 
Cashless issuance of SciSafe earnout shares$2,263 $817 
Cash interest paid$1,394 $230 
Returned shares from settlement of Global Cooling escrow$(5,115)$- 
The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.
9
BioLife Solutions, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
1.    Organization and significant accounting policies
Business
BioLife Solutions, Inc. (“BioLife”, “us”, “we”, “our”, or the “Company”) is a developer, manufacturer, and supplier of a portfolio of bioproduction tools and services including proprietary biopreservation media, automated thawing devices, cloud-connected shipping containers, ultra-low temperature mechanical freezers, cryogenic and controlled rate freezers, and biological and pharmaceutical materials storage. Our CryoStor® freeze media and HypoThermosol® hypothermic storage media are optimized to preserve cells in the regenerative medicine market. These novel biopreservation media products are serum-free and protein-free, fully defined, and are formulated to reduce preservation-induced cell damage and death. Our Sexton cell processing product line includes human platelet lysates (“hPL”) for cell expansion, reducing risk and improving downstream performance over fetal bovine serum, human serum, and other chemically defined media, CellSeal® cryogenic vials that are purpose-built rigid containers used in cell and gene therapy (“CGT”) that can be filled manually or with high throughput systems, and automated cell processing machines that bring multiple processes traditionally performed by manual techniques under a higher level of control to protect therapies from loss or contamination. Our ThawSTAR® product line is composed of a family of automated thawing devices for frozen cell and gene therapies packaged in cryovials and cryobags. These products help administer temperature-sensitive biologic therapies to patients by standardizing the thawing process and reducing the risks of contamination and overheating, which are inherent with the use of traditional water baths. Our cryogenic freezer technology provides for controlled rate freezing and cryogenic storage of biologic materials. Our ultra-low temperature mechanical freezers allow biological materials and vaccines to be stored at temperatures which range from negative 20℃ to negative 86℃. Our evo® shipping containers provide cloud-connected passive storage and transport containers for temperature-sensitive biologics and pharmaceuticals. Our biological and pharmaceutical materials storage services provide facilities that allow for real-time tracking of biologic materials and vaccines that can be stored at a wide range of temperatures.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Significant estimates and assumptions by management affect the Company’s net realizable value of inventory, sales tax liabilities, valuation of market-based stock awards, valuations, fair value of marketable debt securities, expected future cash flows including growth rates, discount rates, terminal values and other assumptions and estimates used to evaluate the recoverability of long-lived assets, estimated fair values of intangible assets and goodwill, amortization methods and periods, warranty reserves, certain accrued expenses, stock-based compensation, contingent consideration from business combinations, and provision for income taxes.
The Company regularly assesses these estimates; however, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances.
Basis of presentation

The Unaudited Condensed Consolidated Financial Statements and related footnote disclosures as of and for the three and nine months ended September 30, 2023 are unaudited, and are not necessarily indicative of the Company’s operating results for a full year. The Unaudited Condensed Consolidated Financial Statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial results for the three and nine months ended September 30, 2023 in accordance with U.S. GAAP, however, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the U.S. Securities and Exchange Commission (the “SEC”) rules and regulations relating to interim financial statements. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Audited Consolidated Financial Statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K as of and for the fiscal year ended December 31, 2022, filed with the SEC on March 31, 2023 (the “Annual Report”).
10
The Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, SAVSU Technologies, Inc. (“SAVSU”), Arctic Solutions, Inc. doing business as Custom Biogenic Systems (“CBS”), SciSafe Holdings, Inc. (“SciSafe”), BioLife Solutions B.V, Global Cooling, Inc. doing business as Stirling Ultracold (“Global Cooling” or “GCI”), and Sexton Biotechnologies, Inc. (“Sexton”). All intercompany accounts and transactions have been eliminated in consolidation.
In the opinion of management, the accompanying Unaudited Condensed Consolidated Financial Statements include all adjustments, consisting of only normal, recurring adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows. The results of operations for the interim periods presented are not necessarily indicative of results to be expected for the entire year.
Foreign currency translation
The Company translates items presented on its Unaudited Condensed Consolidated Balance Sheet, Unaudited Condensed Consolidated Statements of Operations, Unaudited Condensed Consolidated Statements of Comprehensive Loss, Unaudited Condensed Consolidated Statements of Shareholders’ Equity, and Unaudited Condensed Consolidated Statements of Cash Flows into U.S. dollars. For the Company’s subsidiaries that operate in a local currency functional environment, all assets and liabilities are translated into U.S. dollars using current exchange rates at the balance sheet date; revenue and expenses are translated using average exchange rates in effect during each period. Resulting translation adjustments are reported as a separate component of Accumulated Other Comprehensive Loss in the Unaudited Condensed Consolidated Statements of Shareholders' Equity.
Segment reporting
The Company views its operations and makes decisions regarding how to allocate resources and manages its business as one reportable segment and one reporting unit. The Company’s Chief Executive Officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.
Significant accounting policies
There have been no significant changes to the accounting policies during the three and nine months ended September 30, 2023, as compared to the significant accounting policies described in our Annual Report.
Liquidity and capital resources

On September 30, 2023 and December 31, 2022, we had $42.2 million and $64.1 million in cash, cash equivalents, and available-for-sale securities, respectively. We have the ability to borrow up to $10 million under our Loan Agreement (as defined in Note 14 below). For additional information, see Note 14. Additionally, on October 19, 2023, we entered into a Securities Purchase Agreement with Casdin Partners Master Fund, L.P. ("Casdin") whereby the Company sold, and Casdin purchased, 927,165 shares of common stock of the Company at a share price of $11.19 per share for an aggregate purchase price of $10,374,976, infusing additional capital into the Company. Based on our current expectations with respect to our future revenue and expenses, we believe that our current level of cash, cash equivalents, and other liquid assets will be sufficient to meet our liquidity needs for at least the next twelve months from the date of the filing of this Quarterly Report on Form 10-Q.
Risks and uncertainties
Supply chain considerations
Our domestic and international supply chain operations were affected by the global pandemic of the coronavirus (“COVID-19”) and the resulting volatility and uncertainty it caused in the U.S. and international markets. The onset of the COVID-19 pandemic caused supply chains globally to become constrained, and these constraints historically impacted our business through both increased difficulty in obtaining semiconductor chips and increased pricing on available parts. However, as of the nine months ended September 30, 2023, both availability and pricing of semiconductor chips have improved and no longer pose constraints on our supply chain. We currently have sufficient supply for electrical component parts within our operations and do not foresee constraints to return over our supply chain.
11
Concentrations of credit risk and business risk
Significant customers are those that represent more than 10% of the Company’s total revenues or gross accounts receivable balances for the periods and as of each balance sheet date presented. For each significant customer, revenue as a percentage of total revenues and gross accounts receivable as a percentage of total gross accounts receivable as of the periods presented were as follows:
Accounts ReceivableRevenue
September 30,December 31,Three Months Ended
September 30,		Nine Months Ended
September 30,
202320222023202220232022
Customer A*15 %****
Customer B11 %*19 %17 %16 %19 %
Customer C*11 %****
*less than 10%
Revenue from foreign customers is denominated in United States dollars or euros.
The following table represents the Company’s products representing more than 10% of the Company’s total revenues:
Three Months Ended
September 30,		Nine Months Ended
September 30,
Product revenue concentration2023202220232022
CryoStor33 %38 %39 %35 %
780XLE Freezer23 %21 %19 %22 %
The following table represents the Company’s total revenue by geographic area (based on the location of the customer):
Three Months Ended
September 30,		Nine Months Ended
September 30,
Revenue by customers’ geographic locations(1)
2023202220232022
North America(2)
81 %81 %81 %81 %
Europe, Middle East, Africa (EMEA)15 %16 %16 %16 %
Other4 %3 %3 %3 %
Total revenue100 %100 %100 %100 %
(1) During the nine months ended September 30, 2023, the Company updated its methodology for determining the country of origin for its sales. Sales are now recorded by shipping country rather than billing country. The Company updated the methodology retrospectively, adjusting the prior year presentation for all regions presented.
(2) The line item presented above previously bifurcated sales between the United States and Canada. Due to the updated methodology for determining the country of origin for sales, it was noted that Canada no longer was a material location to separately disclose. Both have been combined in the line item presented above to more accurately reflect origin of sales for material regions.
In the three and nine months ended September 30, 2023, one supplier accounted for 14% and 12% of purchases, respectively. In the three and nine months ended September 30, 2022, no suppliers accounted for more than 10% of purchases.
As of September 30, 2023, one supplier accounted for 19% of our accounts payable. As of December 31, 2022, one supplier accounted for 23% of our accounts payable.
12
Recent accounting pronouncements
As of January 1, 2023, we adopted the ASC 2016-13, Measurement of Credit Losses on Financial Instruments, which later was codified as ASC 326 (CECL). In addition to the adoption of ASC 326, the Company adopted the accompanying ASU No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. Both standards mark a significant change requiring the immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets. ASU 2022-02 specifically eliminates the accounting guidance for troubled debt restructurings and requires disclosure of current-period gross write-offs by year of loan origination. Additionally, ASU 2022-02 updates the accounting for credit losses under ASC 326 and adds enhanced disclosures with respect to loan refinancings and restructurings in the form of principal forgiveness, interest rate concessions, other-than-insignificant payment delays, or term extensions when the borrower is experiencing financial difficulties. ASC 326 is intended to improve financial reporting by corporations by requiring earlier recognition of credit losses on loans from corporations, held-to-maturity (HTM) securities, and certain other financial assets. ASC 326 also amended the impairment guidance for available-for-sale (AFS) debt securities in that it eliminated the Other Than Temporary Impairment (OTTI) impairment model. Under Subtopic ASC 326-30, Financial Instruments—Credit Losses—Available-for-Sale Debt Securities, changes in expected cash flows due to credit on AFS debt securities will be recorded through an allowance, rather than permanent write-downs for negative changes and prospective yield adjustments for positive changes, as required by the current OTTI model. ASC 326 replaces the current incurred loss impairment model that recognizes losses when a probable threshold is met with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased. For the period ended September 30, 2023, the adoption of ASC 326 did not result in a material effect on the Company’s Unaudited Condensed Consolidated financial statements.
2.    Correction of immaterial errors
As reported in our Annual Report, we determined that an error existed in our previously issued consolidated financial statements. Specifically, we identified we had established nexus in several jurisdictions beginning in the year ended December 31, 2019 in which we were not collecting and remitting sales taxes appropriately. The error was evaluated and recorded as of each period impacted by the error under the SEC guidance on evaluating the materiality of prior period misstatements to the Company’s financial statements. We evaluated the error and concluded that it was not material to any previously issued consolidated financial statements and accompanying Unaudited Condensed Consolidated financial statements. Although the error was not material to any period, we corrected the accompanying historical Unaudited Condensed Consolidated financial statements for each period impacted. The corrections to the quarter ended September 30, 2022 are presented below to reflect the sales tax liability and associated expenses owed within the period for comparative purposes.
The effect of the adjustments to our Unaudited Condensed Consolidated Balance Sheet as of September 30, 2022 was as follows:
September 30, 2022
(In thousands)As reportedAdjustmentAs corrected
Prepaid expenses and other current assets$8,041 $341 $8,382 
Total current assets135,874 341 136,215 
Total assets487,679 341 488,020 
Accrued expenses and other current liabilities7,778 (340)7,438 
Sales taxes payable- 3,810 3,810 
Total current liabilities36,948 3,470 40,418 
Total liabilities79,430 3,470 82,900 
Accumulated deficit(194,597)(3,129)(197,726)
Total shareholders’ equity408,249 (3,129)405,120 
Total liabilities and shareholders’ equity487,679 341 488,020 
13
The effect of the adjustments to our Unaudited Condensed Consolidated Statements of Operations for the quarter ended September 30, 2022 was as follows:
Three Months Ended
September 30, 2022		Nine Months Ended
September 30, 2022
(In thousands, except per share and share data)As reportedAdjustmentAs correctedAs reportedAdjustmentAs corrected
General and administrative$11,581 $335 $11,916 $34,128 $970 $35,098 
Total operating expenses52,152 335 52,487 212,800 970 213,770 
Operating loss(11,405)(335)(11,740)(95,300)(970)(96,270)
Interest income (expense)10 (25)(15)(181)(69)(250)
Total other income, net849 (25)824 786 (69)717 
Loss before income tax benefit(10,556)(360)(10,916)(94,514)(1,039)(95,553)
Net loss(9,957)(360)(10,317)(89,577)(1,039)(90,616)
Net loss per basic and diluted share(0.23)(0.01)(0.24)(2.11)(0.03)(2.14)
The effect of the adjustments to our Unaudited Condensed Consolidated Statements of Cash Flows for the quarter ended September 30, 2022 was as follows:
Nine Months Ended
September 30, 2022
(In thousands)As reportedAdjustmentAs corrected
Net loss$(89,577)$(1,039)$(90,616)
Prepaid expenses and other current assets(1,356)(487)(1,843)
Sales taxes payable- 1,526 1,526 
3.    Impairment of property and equipment and definite-lived intangible assets

Subsequent to the second quarter of 2023, the Company began to actively seek divestment of its GCI and CBS freezer product lines (the "Freezer Business"). The announcement, coupled with broader economic uncertainty leading to reductions in spending across the biopharma industry and the Company's customer base constituted interim triggering events that required further analysis with respect to potential impairment to goodwill, indefinite-lived intangibles, and its long-lived asset groups. The Company performed an interim quantitative impairment test as of the September 30, 2023 balance sheet date.
To assess any potential impairment of goodwill, the Company compared the carrying value of its single reporting unit against its market capitalization, noting that the market capitalization exceeded the carrying value. As such, goodwill was not impaired as of September 30, 2023.

As a part of the interim quantitative impairment analysis performed, the Company determined that decreases in the market price of the GCI long-lived asset group and historical operating cash flow losses for both GCI and CBS were indicative of potential impairment. The recoverability tests performed over the asset groups of the Freezer Business resulted in a $9.7 million non-cash impairment charge over property and equipment and a $5.8 million non-cash impairment charge over definite-lived intangible assets reflected in the Company's Unaudited Condensed Consolidated Statements of Operations, which represents the entirety of the asset groups' carrying value.

In order to determine the fair value of the property and equipment, acquired technology, customer relationships, and tradename definite-lived intangible assets, the Company utilized the market approach and discounted cash flow analyses to
14
determine if the recoverability of the Freezer Business asset groups were above its carrying value. The key assumptions associated with determining the estimated fair value include (i) the amount and timing of projected future cash flows (including revenue and expenses), (ii) the discount rate selected to measure the risks inherent in the future cash flows, (iii) the assessment of the asset’s life cycle, and (iv) the competitive trends impacting the asset. As a result of the analysis, we recognized non-cash impairment charges of $9.7 million, $3.1 million, $0.2 million, and $2.5 million during the period ended September 30, 2023 for the property and equipment, acquired technology, customer relationships, and tradename definite-lived intangible assets, respectively, in the line item titled, "Asset impairment charges" in the Company's Unaudited Condensed Consolidated Statements of Operations, which represents the difference between the estimated fair value of the Company’s definite-lived intangible assets and their carrying values.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors. Estimating the fair value of the Company’s reporting unit and definite-lived intangible assets requires us to make assumptions and estimates regarding our future plans, as well as industry, economic, and regulatory conditions. These assumptions and estimates include projected future revenue growth rates, EBITDA margins, terminal growth rates, discount rates, royalty rates and other market factors. If current expectations of future growth rates, margins and cash flows are not met, or if market factors outside of our control change significantly, then our reporting unit, indefinite-lived intangible assets, and definite-lived intangible assets might become impaired in the future, negatively impacting our operating results and financial position. As the carrying amounts of the Company’s definite-lived intangible assets were impaired as of September 30, 2023 and written down to fair value, those amounts are more susceptible to an impairment risk if there are unfavorable changes in assumptions and estimates.
4.    Fair value measurement
In accordance with FASB ASC Topic 820, the Company measures its financial instruments at fair value on a recurring basis. The carrying values of certain of our financial instruments including cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of their short maturities. The carrying value of our marketable debt securities, which are accounted for as available-for-sale, are classified within either Level 1 or Level 2 in the fair value hierarchy because we use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. The carrying values of our long-term debt, which is classified within Level 2 in the fair value hierarchy, approximates fair value as our borrowings with lenders are at interest rates that approximate market rates for comparable loans. The fair values of investments and contingent consideration classified as Level 3 were derived from management assumptions. The Company also measures certain assets and liabilities at fair value on a non-recurring basis when applying acquisition accounting. 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.
The fair value of the SciSafe Contingent Consideration Liability was valued based on unobservable inputs using a Monte Carlo simulation. These inputs included the estimated amount and timing of projected future revenue, a discount rate of 4.5%, a risk-free rate of approximately 0.20%, asset volatility of 60%, and revenue volatility of 15%. Significant changes in any of those inputs in isolation would result in a significant change in the fair value measurement of the liability. Generally, changes used in the assumptions for projected future revenue and revenue volatility would be accompanied by a directionally similar change in the fair value measurement. Conversely, changes in the discount rate would be accompanied by a directionally opposite change in the related fair value measurement. However, due to the contingent consideration having a maximum payout amount, changes in these assumptions would not affect the fair value of the contingent consideration if they increase (decrease) beyond certain amounts. At the acquisition date, the contingent consideration was determined to have a fair value of $3.7 million. Subsequent to the acquisition date, the SciSafe Contingent Consideration Liability was re-measured to fair value with changes recorded in the Change in Fair Value of Contingent Consideration in the Unaudited Condensed Consolidated Statements of Operations. During the most recent re-measurement of the SciSafe
15
Contingent Consideration Liability as of September 30, 2023, the Company used a discount rate of 14.5%, a risk-free rate of approximately 4.9%, asset volatility of 71%, and revenue volatility of 36%. The SciSafe Contingent Consideration Liability is included in the Unaudited Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 in the amounts of $0.3 million and $4.3 million, respectively. The changes in fair value of contingent consideration associated with this liability are included within the Change in Fair Value of Contingent Consideration in the Unaudited Condensed Consolidated Statements of Operations. These changes in fair value of contingent consideration associated with this liability are included within the Change in Fair Value of Contingent Consideration in the Unaudited Condensed Consolidated Statements of Operations. These changes were $1.6 million and $1.8 million of benefit for the three and nine months ended September 30, 2023, respectively, and $2.3 million of expense and $3.3 million of benefit for the three and nine months ended September 30, 2022, respectively. As of the year ended December 31, 2022, the second hurdle associated with this liability was satisfied and 116,973 shares were issued as payment during the second quarter of 2023.
There were no remeasurements to fair value during the three and nine months ended September 30, 2023 of financial assets and liabilities that are not measured at fair value on a recurring basis.
The following tables set forth the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022, based on the three-tier fair value hierarchy:
(In thousands)
As of September 30, 2023Level 1Level 2Level 3Total
Assets:
Cash equivalents:
Money market accounts$12,392 $- $- $12,392 
Available-for-sale securities:    
U.S. government securities5,028 - - 5,028 
Corporate debt securities- 15,898 - 15,898 
Other debt securities- 2,024 - 2,024 
Total$17,420 $17,922 $- $35,342 
Liabilities:    
Contingent consideration - business combinations- - 415 415 
Debt- 25,971 - 25,971 
Total$- $25,971 $415 $26,386 
As of December 31, 2022
Assets:
Cash equivalents:
Money market accounts$11,416 $- $- $11,416 
Available-for-sale securities:
U.S. government securities15,051 - - 15,051 
Corporate debt securities- 26,047 - 26,047 
Other debt securities- 3,494 - 3,494 
Total$26,467 $29,541 $- $56,008 
Liabilities:
Contingent consideration - business combinations- - 4,456 4,456 
Debt- 25,607 - 25,607 
Total$- $25,607 $4,456 $30,063 
There have been no transfers of assets or liabilities between the fair value measurement levels.
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The following table presents the changes in fair value of contingent consideration liabilities which are measured using Level 3 inputs:
 Nine Months Ended September 30,
(In thousands)20232022
Beginning balance as of December 31, 2022 and 2021$4,456 $10,027 
Change in fair value recognized in net loss(1,778)(3,348)
Payment of contingent consideration earned(2,263)(817)
Ending balance$415 $5,862 
5.    Investments
Available-for-sale securities
The Company’s portfolio of available-for-sale marketable securities consists of the following:
September 30, 2023
Amortized
Cost		Gross unrealizedEstimated
Fair Value
(In thousands)GainsLosses
Available-for-sale securities, current portion    
U.S. government securities$5,030 $- $2 $5,028 
Corporate debt securities15,901 1 4 15,898 
Other debt securities868 - - 868 
Total short-term21,799 1 6 21,794 
     
Available-for-sale securities, long-term    
Other debt securities1,158 2 4 1,156 
Total marketable securities$22,957 $3 $10 $22,950 
December 31, 2022
Amortized
Cost		Gross unrealizedEstimated
Fair Value
(In thousands)GainsLosses
Available-for-sale securities, current portion
U.S. government securities$15,087 $1 $37 $15,051 
Corporate debt securities26,057 6 16 26,047 
Other debt securities2,169 - 7 2,162 
Total short-term43,313 7 60 43,260 
Available-for-sale securities, long-term
Other debt securities1,329 3 - 1,332 
Total marketable securities$44,642 $10 $60 $44,592 
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September 30, 2023
(In thousands)Amortized
Cost		Estimated
Fair Value
Due in one year or less$21,799 $21,794 
Due after one year through five years1,158 1,156 
Total$22,957 $22,950 
Equity investments
The Company periodically invests in non-marketable equity securities of private companies without a readily determinable fair value to promote business and strategic objectives. The securities are carried at cost minus impairment, if any, plus or minus changes resulting from observable process changes in orderly transactions for identical or similar transactions of the same issuer. These securities included Series A-1 and A-2 Preferred Stock in iVexSol, Inc. carried at $4.1 million for the periods ending September 30, 2023 and December 31, 2022, and Series E Preferred Stock in PanTHERA CryoSolutions, Inc. carried at $995,000 as of September 30, 2023 and December 31, 2022.
6.    Inventories
Inventories consist of the following as of September 30, 2023 and December 31, 2022:
September 30,December 31,
(In thousands)20232022
Raw materials$24,452 $20,950 
Work in progress5,973 5,680 
Finished goods12,929 8,274 
Total inventories$43,354 $34,904 
7.    Leases
The Company has various operating lease agreements for office space, warehouses, manufacturing, and production locations as well as vehicles and other equipment. Our real estate leases have remaining lease terms of one to ten years. We exclude options that are not reasonably certain to be exercised from our lease terms, ranging from one to five years. Our lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms. For certain leases, we receive incentives from our landlords, such as rent abatements, which effectively reduce the total lease payments owed for these leases. Vehicle and other equipment operating leases have terms between one and five years.
Our financing leases relate to research equipment, machinery, and other equipment.
The table below presents certain information related to the weighted average discount rate and weighted average remaining lease term for the Company’s leases as of September 30, 2023 and December 31, 2022:
September 30,December 31,
(In thousands)20232022
Weighted average discount rate - operating leases4.3 %4.2 %
Weighted average discount rate - finance leases8.3 %6.1 %
Weighted average remaining lease term in years - operating leases6.57.2
Weighted average remaining lease term in years - finance leases4.32.0
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The components of lease expense for the three and nine months ended September 30, 2023 and 2022 were as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(In thousands)2023202220232022
Operating lease costs$883 $909 $2,679 $2,745 
Short-term lease costs560 534 1,410 1,627 
Total operating lease costs1,443 1,443 4,089 4,372 
   
Variable lease costs299 250 903 809 
Total lease costs$1,742 $1,693 $4,992 $5,181 
Maturities of our lease liabilities as of September 30, 2023 are as follows:
(In thousands)Operating
Leases		Financing
Leases
2023 (3 months remaining)$909 $134 
20243,383 487 
20252,942 424 
20262,532 389 
20272,280 387 
Thereafter6,938 134 
Total lease payments18,984 1,955 
Less: interest(2,401)(307)
Total present value of lease liabilities$16,583 $1,648 
8.     Assets held for rent
Assets held for rent consist of the following as of September 30, 2023 and December 31, 2022:
September 30,December 31,
(In thousands)20232022
Shippers placed in service$9,848 $7,671 
Fixed assets held for rent1,562 4,686 
Accumulated depreciation(5,778)(4,952)
Subtotal5,632 7,405 
Shippers and related components in production1,577 1,659 
Total$7,209 $9,064 
Shippers and related components in production include shippers complete and ready to be deployed and placed in service upon a customer order, shippers in the process of being assembled, and components available to build shippers. We recognized $0.9 million and $2.8 million in depreciation expense related to assets held for rent during the three and nine months ended September 30, 2023, respectively, and $0.9 million and $2.7 million during the three and nine months ended September 30, 2022, respectively.
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9.    Property and equipment
Property and equipment consist of the following as of September 30, 2023 and December 31, 2022:
September 30,December 31,
(In thousands)20232022
Property and equipment(1)
  
Leasehold improvements$5,948 $5,249 
Furniture and computer equipment1,046 1,908 
Manufacturing and other equipment19,862 20,557 
Construction in-progress3,500 5,095 
Subtotal30,356