1、 Morningstar Document Research FORM 10-KBIOLIFE SOLUTIONS INC-BLFSFiled:March 15,2017(period:December 31,2016)Annual report with a comprehensive overview of the companyThe information contained herein may not be copied,adapted or distributed and is not warranted to be accurate,complete or timely.The
2、 userassumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot belimited or excluded by applicable law.Past financial performance is no guarantee of future results.UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,
3、DC 20549 FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the year ended December 31,2016 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGEACT OF 1934For the transition period from to Commission File Number 001-36362
4、BioLife Solutions,Inc.(Exact name of registrant as specified in its charter)DELAWARE94-3076866(State or other jurisdiction ofincorporation or organization)(IRS EmployerIdentification No.)3303 MONTE VILLA PARKWAY,SUITE 310,BOTHELL,WASHINGTON,98021(Address of registrants principal executive offices,Zi
5、p Code)(425)402-1400(Telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:COMMON STOCK,$0.001 PAR VALUE Indicate by check mark whether the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark w
6、hether the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No 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 1934during the preceding 12 months(or for
7、such shorter period that the registrant was required to file such reports),and(2)has been subject to such filingrequirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website,if any,every Interactive Data File r
8、equired tobe submitted and posted pursuant to Rule 405 of Regulation S-T(S232.405 of this chapter)during the preceding 12 months(or for such shorter period thatthe Registrant was required to submit and post said files).Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item
9、 405 of Regulation S-K is not contained herein,and will not be contained,to the bestof the registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to thisForm 10-K.Indicate by check mark whether the registrant is a
10、large accelerated filer,an accelerated filer,a non-accelerated filer,or a smaller reporting company.See thedefinitions of“large accelerated filer”,“accelerated filer”,and“smaller reporting company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Small
11、er reporting company Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No As of the registrants most recently completed second fiscal quarter,the aggregate market value of common equity held by non-affiliates was$10,043,170.As of March 7,2017,1
12、3,000,386 shares of the registrants common stock were outstanding.DOCUMENTS INCORPORATED BY REFERENCE The information required by Part III of this Report,to the extent not set forth herein,is incorporated herein by reference from the registrants definitive proxystatement relating to the Annual Meeti
13、ng of Shareholders to be held in 2017,which definitive proxy statement shall be filed with the Securities andSource:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Document ResearchThe information contained herein may not be copied,adapted or distributed and is not warranted to be acc
14、urate,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law.Past financial performance is no guarantee of future results.Exchange Commission within 1
15、20 days after the end of the fiscal year to which this Report relates.Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Document ResearchThe information contained herein may not be copied,adapted or distributed and is not warranted to be accurate,complete or timely.The user assum
16、es all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law.Past financial performance is no guarantee of future results.Table of Contents Page No.PART I ITEM 1.BUSINESS3ITEM 1A.RISK FACTO
17、RS7ITEM 1B.UNRESOLVED STAFF COMMENTS13ITEM 2.PROPERTIES13ITEM 3.LEGAL PROCEEDINGS14ITEM 4.MINE SAFETY DISCLOSURES14 PART II ITEM 5.MARKET FOR REGISTRANTS COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIES14ITEM 6.SELECTED FINANCIAL DATA15ITEM 7.MANAGEMENTS DISCUSSION
18、AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS15ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK22ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA22 INDEX TO FINANCIAL STATEMENTS22 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM23ITEM 9.CHANGES IN AND DISAGR
19、EEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE40ITEM 9A.CONTROLS AND PROCEDURES40ITEM 9B.OTHER INFORMATION40 PART III ITEM 10.DIRECTORS,EXECUTIVE OFFICERS,AND CORPORATE GOVERNANCE41ITEM 11.EXECUTIVE COMPENSATION41ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
20、 AND RELATED STOCKHOLDERMATTERS41ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE41ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES41 PART IV ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES41SIGNATURES 42 2 Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Mo
21、rningstar Document ResearchThe information contained herein may not be copied,adapted or distributed and is not warranted to be accurate,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot
22、 be limited or excluded by applicable law.Past financial performance is no guarantee of future results.PART I ITEM 1.BUSINESS References in this Form 10-K to“BioLife”,the“Company,”“we,”“us”or“our”refer to BioLife Solutions,Inc.The information in this Annual Report onForm 10-K contains certain forwar
23、d-looking statements,including statements related to our products,customers,regulatory approvals,markets for ourproducts,future financial and operational performance,capital requirements,intellectual property,suppliers,joint venture partners,controllingshareholders and trends in our business that in
24、volve risks and uncertainties.Our actual results may differ materially from the results discussed in theforward-looking statements.Factors that might cause such a difference include those discussed in“Business,”“Risk Factors”and“ManagementsDiscussion and Analysis of Financial Condition and Results o
25、f Operations,”as well as those discussed elsewhere in this Annual Report on Form 10-K.Except as required by applicable law,including the securities laws of the United States,we undertake no obligation to publicly update or revise anyforward-looking statements,whether as a result of new information,f
26、uture events or otherwise.You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this Report We were incorporated in Delaware in 1987 under the name Trans Time Medical Products,Inc.In 2002,the Company,then known as Cryomedical Sciences,In
27、c.,and engaged in manufacturing and marketing cryosurgical products,completed a merger with our wholly-owned subsidiary,BioLife Solutions,Inc.,which was engaged as a developer and marketer of biopreservation media products for cells and tissues.Following the merger,we changed our name toBioLife Solu
28、tions,Inc.For a summary of recent developments,see“Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.”Business Overview We develop,manufacture and market a portfolio of biopreservation tools for cells,tissues,and organs,including proprietary clinical grade c
29、ell and tissuehypothermic storage and cryopreservation freeze media.Our products are used in basic and applied research on,and commercialization of,new biologic based therapies by maintaining the health and function ofbiologic source material and finished products during manufacturing,distribution,a
30、nd patient delivery.Our product offerings include:Patented hypothermic storage and cryopreservation freeze media products for cells,tissues,and organsGeneric blood stem cell freezing and cell thawing media productsCustom product formulation and custom packaging servicesContract aseptic manufacturing
31、 formulation,fill,and finish services of liquid media productsCold chain logistics services incorporating precision thermal packaging products and cloud-hosted web applications Our proprietary,clinical grade HypoThermosol FRS and CryoStor biopreservation media products are marketed to the regenerati
32、ve medicine,biobanking,drug discovery markets including hospital-based stem cell transplant centers,pharmaceutical companies,cord blood and adult stem cell banks,hair transplant centers,and suppliers of cells to the drug discovery,toxicology testing and diagnostic markets,including private and publi
33、c cell therapycompanies.All of our biopreservation media products are serum-free and protein-free,fully defined,and are manufactured under current Good ManufacturingPractices(cGMP)using United States Pharmacopia(USP)/Multicompendial or the highest available grade components.Our patented biopreservat
34、ion media products are formulated to reduce preservation-induced,delayed-onset cell damage and death.Our platform enablingtechnology provides our customers significant shelf life extension of biologic source material and final cell products,and also greatly improves post-preservation cell and tissue
35、 viability and function.Our products have been incorporated in over 250 regenerative medicine applications,including chimericantigen receptor(CAR)and other T cell receptor(TCR)types.On December 31,2016,we restructured our biologistex CCM,LLC joint venture(“biologistex”prior to December 31,2016 or“SA
36、VSU”December 31,2016and thereafter)with Savsu Technologies,LLC(“STLLC”),whereby we contributed certain assets,including our outstanding loan owed by biologistex,andSTLLC contributed certain assets,including all cold chain management intellectual property,into SAVSU.Prior to the restructuring,we owne
37、d a 52%ownership interest in biologistex.As a result for consideration given by both parties,we own a 45%interest in SAVSU,which is subsequently reduced to25%on December 31,2018.Although we intend to continue to provide certain sales and marketing services to SAVSU,we do not consider these activitie
38、s,or the potential economic impact thereafter to be a material part of our business in 2017 and beyond.See“Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations”for additional details.3 Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Docume
39、nt ResearchThe information contained herein may not be copied,adapted or distributed and is not warranted to be accurate,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or e
40、xcluded by applicable law.Past financial performance is no guarantee of future results.Products and Services Overview Biopreservation Media Stability(shelf life)and functional recovery are crucial aspects of academic research and clinical practice in the biopreservation of biologic-based sourcemater
41、ial,intermediate derivatives,and isolated/derived/expanded cellular products.Limited stability is especially critical in the regenerative medicine field,where harvested cells and tissues,if not maintained appropriately at normothermic body temperature(98.6F/37C),or stored in a hypothermic state in a
42、neffective preservation medium,will lose viability over time.Chilling(hypothermia)is used to reduce metabolism and delay degradation of harvested cells,tissues,and organs.However,subjecting biologic material to hypothermic environments induces damaging molecular stress and structural changes.Althoug
43、hcooling successfully reduces metabolism(i.e.,lowers demand for energy),various levels of cellular damage and death occur when using suboptimal methods.Traditional preservation media range from simple balanced salt(electrolyte)formulations to complex mixtures of electrolytes,energy substrates such a
44、ssugars,osmotic buffering agents and antibiotics.The limited stability which results from the use of these traditional biopreservation media formulations is asignificant shortcoming that our optimized products address with great success.Our scientific research activities over the last 20+years enabl
45、ed a detailed understanding of the molecular basis for the hypothermic and cryogenic(low-temperature induced)damage/destruction of cells through apoptosis and necrosis.This research led directly to the development of our HypoThermosol FRSand CryoStor technologies.Our patented preservation media prod
46、ucts are specifically formulated to:Minimize cell and tissue swellingReduce free radical levels upon formationMaintain appropriate low temperature ionic balancesProvide regenerative,high energy substrates to stimulate recovery upon warmingAvoid the creation of an acidic state(acidosis)Inhibit the on
47、set of apoptosis and necrosis A key feature of our preservation media products is their“fully-defined”profile.All of our cGMP products are serum-free,protein-free and are formulated andfilled using aseptic processing,utilizing USP/Multicompendial grade or highest quality available synthetic componen
48、ts.All of these features benefitprospective customers by facilitating the qualification process required to incorporate our products into their regulatory filings and hence patient deliveryprocesses.The results of independent testing demonstrate that our biopreservation media products significantly
49、extend shelf-life and improve cell and tissue post-thawviability and function,which may,in turn,improve clinical and commercial outcomes for existing and new cell and tissue therapy applications.Our productshave demonstrated improved biopreservation outcomes for a broad array of cell and tissue type
50、s including stem cells isolated from umbilical and peripheralblood,bone marrow,adipose tissue,liver,tendon,and umbilical cord tissue,and also for induced pluripotent stem cells including hepatocytes,endothelialcells,and neuronal cells,hepatocytes isolated from non-transplantable livers,chondrocytes
51、isolated from cartilage,and dermal fibroblasts and muscle cellsisolated from tissue biopsies.Competing biopreservation media products are often formulated with simple isotonic media cocktails,animal serum,potentially a single sugar or humanprotein.A key differentiator of our proprietary HypoThermoso
52、l FRS formulation is the engineered optimization of the key ionic component concentrationsfor low temperature environments,as opposed to normothermic body temperature around 37C,as found in culture media or saline-based isotonic formulas.Competing cryopreservation freeze media is often comprised of
53、a single permeating cryoprotectant such as dimethyl sulfoxide(“DMSO”).Our CryoStorformulations incorporate multiple permeating and non-permeating cryoprotectant agents,which allow for multiple mechanisms of protection and reduces thedependence on a single cryoprotectant.Across a broad spectrum of ce
54、ll and tissue types,our products have proven more effective in reducing post-preservation and post-thaw necrosis and apoptosisas compared to commercial and home-brew isotonic and extracellular formulations.This results in greatly extended shelf life and improved post-preservationviability.Biopreserv
55、ation Media Opportunity According to Global Market Insights,“Biopreservation Market Size”published in September 2016,the total biopreservation market is expected to be$9.7billion by 2024,with our current addressable media market expected to be$1.3 billion by 2024.Our current addressable portion of t
56、he market is the demandfor reagents used to store,ship and freeze source material and manufactured doses of cell-based products and therapies.Regenerative Medicine The emerging field of regenerative medicine is unique in its aim to augment,repair,replace or regenerate organs and tissue that have bee
57、n damaged bydisease,injury or even the natural aging process.This rapidly evolving,interdisciplinary field is transforming healthcare by translating fundamental scienceinto a variety of regenerative technologies including biologics,chemical compounds,materials and devices.It differs from other field
58、s of medicine in thearray of disciplines it brings together and in its ability to create or harness the bodys innate healing capacity.We continue to educate the regenerative medicine market about the impact of effective biopreservation on the ability to create commercially viablemanufactured product
59、s with participation in scientific conferences and industry trade events by exhibiting,presenting scientific and business lectures,andsponsoring industry association events.We are a corporate or affiliate member of the Alliance for Regenerative Medicine,the BEST Collaborative,and theInternational So
60、ciety for Cellular Therapy.4 Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Document ResearchThe information contained herein may not be copied,adapted or distributed and is not warranted to be accurate,complete or timely.The user assumes all risks for any damages or losses ar
61、ising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law.Past financial performance is no guarantee of future results.We have secured a valuable position as a supplier of critical reagents to several commercial companies and e
62、stimate that our biopreservation media productsare incorporated in over 250 applications for new cell and tissue-based regenerative medicine products and therapies.A significant number of applicationsinvolve CAR-T cells and other types of T cells and mesenchymal stem cells targeting blood cancers,so
63、lid tumors and other leading causes of death anddisability.We estimate that annual revenue from each application in which our products are used could range from$0.5 million to$2.0 million,if approvedand our customer commences large scale commercial manufacturing of the biologic based therapy.Drug Di
64、scovery Our customers in the drug screening market are pharmaceutical companies that grow and preserve various cell types to measure pharmacologic effects andtoxicity of new drug compounds,and also cell suppliers that provide preserved live cells for end-user testing in pharmaceutical companies.Our
65、productsspecifically address this need by enhancing yield,viability and functionality of previously preserved cells.Biobanking The biobanking industry includes public and private cord blood banks,adult stem cell banks,tissue banks,hair transplant centers,cryopreservation ofplatelets and biorepositor
66、ies.To continue to generate awareness of the need for effective preservation,we are a sponsor and member of the AABB and theCord Blood Association.We also provide expertise when needed to the top biobanking enterprises.Principal Products HypoThermosol FRS biopreservation media is a novel,engineered,
67、optimized hypothermic storage and shipping media product.This proprietary,optimized formulation mitigates temperature-induced molecular cell stress responses that occur during chilling and re-warming of biologics,intermediateproducts,and final cell products intended for research and clinical applica
68、tions.Serum-free,protein-free HypoThermosol FRS is designed to providemaximum storage and shipping stability for biologics at 2-8C.HypoThermosol FRS is manufactured under cGMP and is tested to USP Sterility andUSP Endotoxin standards.CryoStor cryopreservation freeze media products have been designed
69、 to mitigate temperature-induced molecular cell stress responses during freezing andthawing.CryoStor proprietary freeze media products are intended for cryopreservation of biologics at subzero temperatures(most often utilized within therange of-80 to-196C).All CryoStor products are pre-formulated wi
70、th USP/EP grade DMSO,a permeating cryoprotective agent which helps mitigate damagefrom the formation of intracellular and extracellular ice.CryoStor is offered in several packages and pre-formulated with DMSO in final concentrations of 2%,5%,and 10%.CryoStor is manufactured under cGMP and is tested
71、to USP Sterility and USP Endotoxin standards.BloodStor freeze media is a series of generic cGMP freeze media products used to cryopreserve stem and other cells isolated from umbilical cord blood,peripheral blood,and bone marrow where the processing methods require addition of high concentration DMSO
72、.BloodStor 55-5 is pre-formulated with 55%(w/v)DMSO USP/EP,5%(w/v)Dextran-40 USP/EP,and Water for Injection(WFI)quality water.BloodStor 100 contains 100%(w/v)DMSO USP/EP.BloodStor 27 NaCl is pre-formulated with 27%(w/v)DMSO in saline USP-grade components and Water for Injection(WFI)quality water.Blo
73、odStor ismanufactured under cGMP and tested to USP Sterility and USP Endotoxin standards.Cell Thawing Media provides Dextran and saline for washing cryopreserved cells and tissues to dilute or remove cryoprotectants.Cell thawing media is pre-formulated with 10%Dextran 40 in 0.9%NaCl and 10%Dextran 4
74、0 in 5%Dextrose.biologistexTM cold-chain management service includes unlimited use of the evo Smart Shipper and the integrated track and trace cloud-based webapplication, and is sold by BioLife to the regenerative medicine space.The line of evo Smart Shippers are reusable and designed for theshipmen
75、t of materials which must be maintained at precision temperature ranges including frozen at-80C,chilled at 2-8C,and at controlled roomtemperature(CRT)temperatures.The evo Smart Shippers include a NIST traceable thermocouple embedded within the payload cavity to monitor theenvironmental conditions wi
76、thin the payload and a fiber optic sensor enabling monitoring whether the container is opened at any time during shipment,andupon arrival at the destination.The monitoring data and GPS location is transmitted in real time to our cloud based web application,giving our customers theability to pack,shi
77、p,and independently track their precious starting material and manufactured cell products and other biologic material throughout transitto its destination.BioLife receives a revenue share on biologistex subscriptions sold into the regenerative medicine market.For further information regardingour bus
78、iness relationship with SAVSU,see Item 7 of Part II“Managements Discussion and Analysis of Financial Condition and Results of Operations”.Competition Biopreservation Media We believe that in-house formulated biopreservation media,whereby the user purchases raw ingredients and manually mixes the ingr
79、edients,satisfies thelarge majority of the annual worldwide demand.Commercial competitors,in most cases,are supplying isotonic,non-optimized preservation media andinclude VWR,Sigma-Aldrich,Lonza,Life Technologies,STEMCELL Technologies,and several smaller companies.Several of our competitors alsodist
80、ribute our premium products.These and other companies may have developed or could in the future develop new technologies that compete with ourproducts or even render our products obsolete.5 Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Document ResearchThe information contain
81、ed herein may not be copied,adapted or distributed and is not warranted to be accurate,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law.Past fin
82、ancial performance is no guarantee of future results.We believe that our products offer significant advantages over in-house formulations including,time saving,improved quality of components,more rigorousquality control release testing,and improved preservation efficacy.We believe that a companys co
83、mpetitive position in the markets we compete in isdetermined by product function,product quality,speed of delivery,technical support,price,and distribution capabilities.Our customers are diverse and mayplace varying degrees of importance on the competitive attributes listed above.While it is difficu
84、lt to rank these attributes for all our customers in theaggregate,we believe we are well positioned to compete in each category.We expect competition to intensify with respect to the areas in which we areinvolved as the market expands and technical advances are made and become more widely known.BUSI
85、NESS OPERATIONS Sales and Marketing We market and sell our products directly using our sales force and through our website at .Our products are also marketed anddistributed by STEMCELL Technologies,Sigma-Aldrich,and several other regional distributors under non-exclusive agreements.We are committed
86、tobecoming and remaining a trusted,critical supplier to our customers.This requires us to employ scientific team members in sales and support roles.Ourtechnical application support team consists of individuals with extensive experience in cell processing,biopreservation,and cryobiology.We also marke
87、t and sell the evo Smart Shippers and related cloud based data tracking application through a subscription model where customers purchaseaccess to the Smart Shipper and related cloud based data tracking software for a specified period of time.We have a revenue share agreement in place basedon gross
88、revenue generated directly by our sales efforts to the regenerative medicine market.In 2016 and 2015,we derived approximately 12%and 10%,respectively,of our revenue from our relationship with one distributor of our products.At December 31,2016,three customers accounted for 45%of gross accounts recei
89、vable.Manufacturing and Distribution We maintain and operate two independent cGMP clean room production suites for our biopreservation media products.Since December 2009,our qualitymanagement system(QMS)has remained certified to ISO 13485:2003.Our QMS is compliant with applicable sections of 21 CFR
90、Part 820-Quality SystemRegulation for Good Manufacturing Practice of medical devices,21 CFR Parts 210 and 211 covering GMP for Aseptic Production,Volume 4,EU Guidelines,Annex 1 for the Manufacture of Sterile Medicinal Products,ISO 13408 for aseptic processing of healthcare products,and ISO 14644,cle
91、an rooms andassociated controlled environments.We rely on outside suppliers for all of our manufacturing supplies,parts and components.To date,we have notexperienced significant difficulties in obtaining raw materials for the manufacture of our biopreservation media products.The evo Smart Shippers a
92、re manufactured and supplied by biologistex CCM,LLC dba SAVSU(“SAVSU”),based in Albuquerque,NM.The evo webapplication is a subscription-based model which does not require physical manufacturing or distribution of the software component of the service.For furtherinformation regarding our business rel
93、ationship with SAVSU,see“Item 7-Managements Discussion and Analysis of Financial Condition and Results ofOperations”.Support We provide product support through a combination of channels including phone,chat,web,social media,and email.These support services are delivered byour customer care and scien
94、tific teams.These teams are responsible for providing timely,high-quality technical expertise on all our products.Product Approval Regulation None of our products are subject to any specific United States Food and Drug Administration(“FDA”)or other non-US pre-market approval for drugs,devices,or bio
95、logics.We are not required to sponsor formal prospective,controlled clinical-trials in order to establish safety and efficacy.However,tosupport our current and prospective clinical customers,we manufacture and release our products in compliance with cGMP and other relevant qualitystandards.To assist
96、 customers with their regulatory applications,we maintain Type II Master Files at the FDA for CryoStor,HypoThermosol FRS,and our CellThawing Media products,which provide the FDA with information regarding our manufacturing facility and process,our quality system,and stability andsafety testing that
97、has been performed.Customers engaged in clinical applications may notify the FDA of their intention to use our products in their productdevelopment and manufacturing process by requesting a cross-reference to our master files.6 Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Do
98、cument ResearchThe information contained herein may not be copied,adapted or distributed and is not warranted to be accurate,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited
99、or excluded by applicable law.Past financial performance is no guarantee of future results.There can be no assurance that we will not be required to obtain approval from the FDA or foreign regulatory authorities prior to marketing any of ourproducts in the future.Principal Offices Our principal exec
100、utive offices are located at 3303 Monte Villa Parkway,Suite 310,Bothell,Washington 98021 and the telephone number is(425)402-1400.Information about us is available on our website http:/.The information contained on our website or that can be accessedthrough our website does not constitute part of th
101、is annual report and is not incorporated in any manner into this annual report.Intellectual Property Currently,we have five issued and unexpired U.S.patents,two issued Australian patents,one issued European patent,one issued Japanese patent,and severalpending patent applications.We have also obtaine
102、d certain trademarks and tradenames for our products to distinguish our genuine products from ourcompetitors products and we maintain certain details about our processes,products,and strategies as trade secrets.While we believe that the protection ofpatents and trademarks is important to our busines
103、s,we also rely on a combination of trade secrets,nondisclosure and confidentiality agreements,scientificexpertise and continuing technological innovation to maintain our competitive position.Despite these precautions,it may be possible for unauthorized thirdparties to copy certain aspects of our pro
104、ducts and/or to obtain and use information that we regard as proprietary.The laws of some foreign countries in whichwe may sell our products do not protect our proprietary rights to the same extent as do the laws of the United States.Product Development Currently,we employ a team of three researcher
105、s,all of whom hold Ph.D.degrees in molecular biology or related fields who are responsible for bringing newbiopreservation products to market.We also conduct collaborative research with several leading academic and commercial entities in our strategic markets.During 2016,we incurred costs of approxi
106、mately$2.7 million on research and development activities,including$0.7 million in cost related to thedevelopment of internal use software which were capitalized by our joint venture,biologistex CCM,LLC.The capitalized costs related to biologistexinternal use software are no longer included in our c
107、onsolidated financial statements after December 31,2016 due to the deconsolidation of biologistex.SeeNote 1 to the Companys Consolidated Financial Statements in Item 8 of this form 10-K for additional information about the biologistex joint venturerestructuring on December 31,2016.During 2015,we inc
108、urred costs of approximately$3.1 million on research and development activities,including$1.7million in cost related to the development of internal use software which were capitalized.Employees As of February 1,2017,we had 35 full time employees and one part-time employee.Our employees are not cover
109、ed by any collective bargaining agreement.We consider relations with our employees to be good.Available Information We maintain a website at http:/.The information contained on or accessible through our website is not part of this Annual Reporton Form 10-K.Our Annual Report on Form 10-K,Quarterly Re
110、ports on Form 10-Q,Current Reports on Form 8-K and amendments to reports filed or furnishedpursuant to Sections 13(a)and 15(d)of the Securities Exchange Act of 1934(the“Exchange Act”),are available free of charge on our website as soon asreasonably practicable after we electronically file such repor
111、ts with,or furnish those reports to,the Securities and Exchange Commission(the“SEC”).Anyinformation we filed with the SEC may be accessed and copied at the SECs Public Reference Room at 100 F Street NE,Washington,DC 20549.Informationmay be obtained by calling the SEC at 1-800-SEC-0330.The SEC also m
112、aintains an Internet site that contains reports,proxy and information statements,andother information regarding issuers that file electronically with the SEC at http:/www.sec.gov.ITEM 1A.RISK FACTORS Investing in our common stock involves a high degree of risk.You should consider carefully the risks
113、 and uncertainties described below,together with all ofthe other information contained in this annual report,before deciding to invest in our common stock.If any of the following risks materialize,our business,financial condition,results of operation and future prospects will likely be materially an
114、d adversely affected.In that event,the market price of our commonstock could decline and you could lose all or part of your investment.7 Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Document ResearchThe information contained herein may not be copied,adapted or distributed an
115、d is not warranted to be accurate,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law.Past financial performance is no guarantee of future results.
116、Risks Related to Our Business The majority of our net sales come from a relatively small number of customers and a limited number of market sectors;if we lose any of these customers orif there are problems in those market sectors,our net sales and operating results could decline significantly.In 201
117、6 and 2015,we derived approximately 12%and 10%,respectively,of our revenue from our relationship with one distributor of our products.No othercustomer accounted for more than 10%of revenue in 2016 or 2015.Our principal customers may vary from period to period,and our principal customers maynot conti
118、nue to purchase products from us at current levels,or at all.Significant reductions in net sales to any of these customers or our failure to makeappropriate choices to the customers we serve,could seriously harm our business.In addition,we focus our sales to customers in only a few market sectors.Ea
119、ch of these sectors is subject to macroeconomic conditions as well as trends and conditions that are sector specific.Shifts in the performance of a sectorserved by us,as well as the economic,business and/or regulatory conditions that affect the sector,or our failure to choose appropriate sectors can
120、 particularlyimpact us.Any weakness in the market sectors in which our customers are concentrated could affect our business and results of operations.We have a history of losses and may never achieve or maintain profitability.We have incurred annual consolidated operating losses since inception,and
121、may continue to incur operating losses.For the fiscal years ended December 31,2016 and December 31,2015,we had consolidated net losses attributable to BioLife of$6.9 million and$4.2 million,respectively.As of December 31,2016,our consolidated accumulated deficit was approximately$71.2 million.We may
122、 not be able to successfully achieve or sustain profitability.Successfultransition to profitable operations is dependent upon achieving a level of revenues adequate to support our cost structure.We may need additional capital to reach and maintain a sustainable level of positive cash flow and if we
123、raise such additional capital through theissuance of equity or convertible debt securities,your ownership will be diluted,and equity securities issued may have rights,preferences and privilegessuperior to the shares of common stock.If we are unable to achieve profitability sufficient to permit us to
124、 fund our operations and other planned actions,we may be required to raise additionalcapital.There can be no assurance that such capital would be available on favorable terms,or at all.If we raise additional capital through the issuance ofequity or convertible debt securities,the percentage ownershi
125、p held by existing stockholders may be reduced,and the market price of our common stockcould fall due to an increased number of shares available for sale in the market.Further,our board has the authority to establish the designation of additionalshares of preferred stock that may be convertible into
126、 common stock without any action by our stockholders,and to fix the rights,preferences,privileges andrestrictions,including voting rights,of such shares.Any such additional shares of preferred stock may have rights,preferences and privileges senior to thoseof outstanding common stock,and the issuanc
127、e and conversion of any such preferred stock would further dilute the percentage ownership of ourstockholders.Debt financing,if available,may involve restrictive covenants,which may limit our operating flexibility with respect to certain businessmatters.If we are unable to secure additional capital
128、as circumstances require,we may not be able to fund our planned activities or continue our operations.There is uncertainty surrounding our ability to successfully commercialize our HypoThermosol FRS and CryoStor biopreservation media products.Our growth depends on our continued ability to successful
129、ly develop,commercialize and market our HypoThermosol FRS,CryoStor,and BloodStorbiopreservation media products.Even in markets that do not require us to obtain regulatory approvals,our products will not be used unless they present anattractive alternative to competitive products and the benefits and
130、 cost savings achieved through their use outweigh the cost of our products.If we are unableto develop and sustain a market for our products,this will have a material adverse effect on our results of operations and our ability to continue and grow ourbusiness.The success of our HypoThermosol FRS and
131、CryoStor biopreservation media products is dependent,in part,on successful customer regulatoryapprovals and commercial success of new regenerative medicine products and therapies.Our HypoThermosol FRS and CryoStor biopreservation media products are marketed to biotechnology companies and research in
132、stitutions engaged inresearch and development of cell,gene and tissue engineering therapies.The end-products or therapies developed by these biotechnology companies andresearch institutions are subject to substantial regulatory oversight by the FDA and other regulatory bodies,and many of these thera
133、pies are years away fromcommercialization.Thus demand,if any,for HypoThermosol FRS and CryoStor is expected to be limited for several years.Failure of the end-productsthat use our biopreservation media products to receive regulatory approvals and be successfully commercialized will have an adverse e
134、ffect in the demand forour products.We face significant competition.The life sciences industry is highly competitive.We anticipate that we will continue to face increased competition as existing companies develop new orimproved products and as new companies enter the market with new technologies.Man
135、y of our competitors are significantly larger than us and have greaterfinancial,technical,research,marketing,sales,distribution and other resources than us.There can be no assurance that our competitors will not succeed indeveloping or marketing technologies and products that are more effective or c
136、ommercially attractive than any that are being developed or marketed by us,or that such competitors will not succeed in obtaining regulatory approval,or introducing or commercializing any such products,prior to us.Suchdevelopments could have a material adverse effect on our business,financial condit
137、ion and results of operations.Also,even if we are able to competesuccessfully,there can be no assurance that we could do so in a profitable manner.8 Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Document ResearchThe information contained herein may not be copied,adapted or di
138、stributed and is not warranted to be accurate,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law.Past financial performance is no guarantee of fut
139、ure results.We are dependent on outside suppliers for all of our manufacturing supplies.We rely on outside suppliers for all of our manufacturing supplies,parts and components.Although we believe we could develop alternative sources ofsupply for most of these components within a reasonable period of
140、 time,there can be no assurance that,in the future,our current or alternative sources will beable to meet all of our demands on a timely basis.Unavailability of necessary components could require us to re-engineer our products to accommodateavailable substitutions,which could increase costs to us an
141、d/or have a material adverse effect on manufacturing schedules,products performance and marketacceptance.In addition,an uncorrected defect or suppliers variation in a component or raw material,either unknown to us or incompatible with ourmanufacturing process,could harm our ability to manufacture pr
142、oducts.We might not be able to find a sufficient alternative supplier in a reasonable timeperiod,or on commercially reasonable terms,if at all.If we fail to obtain a supplier for the components of our products,our operations could be disrupted.Our investment in SAVSU may be adversely impacted by the
143、 failure of SAVSU.We own an equity interest in SAVSU,formerly referred to as the biologistex joint venture,and are a party to a revenue share agreement with SAVSU based ongross sales from customers directly obtained by BioLife from the sale of evo product in the regenerative medicine market.We only
144、have limited control overmanagement decisions,accordingly,our ability to generate revenue from SAVSU or profit from SAVSU will be largely dependent on the current managementof SAVSU.SAVSU faces all of the inherent risks associated with the development,marketing and operation of a new product line.In
145、 addition,we face the riskthat SAVSU will not be able to fulfill product orders based on our sales effort.If SAVSU fails to fulfill its obligations due to strategic business interests,financial condition or otherwise,SAVSU may be required to raise additional capital,which will dilute our ownership,o
146、r SAVSU may not be able to continueits operations,in which case we may suffer losses.Our success will depend on our ability to attract and retain key personnel.In order to execute our business plan,we must attract,retain and motivate highly qualified managerial,scientific,manufacturing,and sales per
147、sonnel.If wefail to attract and retain skilled scientific and sales personnel,our sales efforts will be hindered.Our future success depends to a significant degree upon thecontinued services of key scientific and technical personnel.If we do not attract and retain qualified personnel we will not be
148、able to achieve our growthobjectives.If we were to be successfully sued related to our products,operations or other activities,we could face substantial liabilities that may exceed our resources.We may be held liable if any of our products or operations cause injury or death.We are subject to certai
149、n litigation described under“Item 3.LegalProceedings”,and may also face other types of litigation,including those related to alleged breaches of contract or applicable laws or of our duties to thirdparties.We currently maintain commercial general and umbrella liability policies and a product liabili
150、ty insurance policy.When necessary for our products,we intend to obtain additional product liability insurance.Insurance coverage may be prohibitively expensive,may not fully cover potential liabilities ormay not be available in the future.Inability to obtain sufficient insurance coverage at an acce
151、ptable cost or otherwise to protect against potential productliability claims could prevent or inhibit the commercialization of our products.If we were to be sued for any injury caused by or associated with our productsor operations or in connection with other matters,or if our existing litigation p
152、roceeds,the litigation could consume substantial time and attention of ourmanagement,and the resulting liability could have a material adverse effect on us.Regulatory or other difficulties in manufacturing could have an adverse effect upon our expenses and our product revenues.We currently manufactu
153、re all of our biopreservation media products.The manufacture of these products is difficult,complex and highly regulated.Tosupport our current and prospective clinical customers,we intend to comply with cGMP in the manufacture of our products.Our ability to adequately and ina timely manner manufactu
154、re and supply our biopreservation media products is dependent on the uninterrupted and efficient operation of our facilities andthose of third-parties producing supplies upon which we rely in our manufacturing.The manufacture of our products may be impacted by:availability or contamination of raw ma
155、terials and components used in the manufacturing process,particularly those for which wehave no other source or supplier;the ongoing capacity of our facilities;our ability to comply with regulatory requirements,including our ability to comply with cGMP;inclement weather and natural disasters;changes
156、 in forecasts of future demand for product components;potential facility contamination by microorganisms or viruses;updating of manufacturing specifications;andproduct quality success rates and yields.If efficient manufacture and supply of our products is interrupted,we may experience delayed shipme
157、nts or supply constraints.If we are at any time unable toprovide an uninterrupted supply of our products to customers,our customers may be unable to supply their end-products incorporating our products to theirpatients and other customers,which could materially and adversely affect our product sales
158、 and results of operations.We are registered with FDA as a contract manufacturer.Our contract-manufacturing customers may require us to comply with cGMP requirements and mayaudit our compliance with cGMP standards.If a customer finds us to be out of compliance with cGMP standards,this could have a m
159、aterial adverse effect onour ability to retain and attract contract manufacturing customers.9 Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Document ResearchThe information contained herein may not be copied,adapted or distributed and is not warranted to be accurate,complete
160、or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law.Past financial performance is no guarantee of future results.If we become subject to additional regulato
161、ry requirements,the manufacture and sale of our products may be delayed or prevented,or we may becomesubject to increased expenses.None of our products are subject to FDA or other regulatory approvals.In particular,we are not required to sponsor formal prospective,controlled clinical-trials in order
162、 to establish safety and efficacy.However,there can be no assurance that we will not be required to obtain approval from the FDA,or foreignregulatory authorities,as applicable,prior to marketing any of our products in the future.Any such requirements could delay or prevent the sale of ourproducts,or
163、 may subject us to additional expenses.We may be adversely affected if we violate privacy and security regulations or suffer a data breach.Federal and state laws protect the confidentiality of certain patient health information,including patient records,and restrict the unauthorized use anddisclosur
164、e of such information.In particular,the Health Insurance Portability and Accountability Act of 1996(HIPAA)and its implementing privacy,security,and breach notification regulations(collectively,HIPAA Standards),govern the use and disclosure of protected health information by“coveredentities,”which ar
165、e healthcare providers that submit electronic claims,health plans and healthcare clearinghouses,as well as their business associates andtheir subcontractors.Our employee health benefit plans are considered“covered entities”and,therefore,are subject to the HIPAA Standards.We may be adversely affected
166、 if our internal control over financial reporting fails or is circumvented.We regularly review and update our internal controls,disclosure controls and procedures,and corporate governance policies.We are required under theSarbanes-Oxley Act of 2002 to report annually on our internal control over fin
167、ancial reporting,but as a smaller reporting company we are exempt from therequirement to have our independent accountants attest to our internal control over financial reporting.If it were to be determined that our internal controlover financial reporting is not effective,such shortcoming could have
168、 an adverse effect on our business and financial results and the price of our commonstock could be negatively affected.This reporting requirement could also make it more difficult or more costly for us to obtain certain types of insurance,including director and officer liability insurance,and we may
169、 be forced to accept reduced policy limits and coverage or incur substantially higher costs toobtain the same or similar coverage.Any system of internal controls,however well designed and operated,is based in part on certain assumptions and canprovide only reasonable,not absolute,assurances that the
170、 objectives of the system are met.Any failure or circumvention of the controls and procedures orfailure to comply with regulation concerning control and procedures could have a material effect on our business,results of operation and financialcondition.Any of these events could result in an adverse
171、reaction in the financial marketplace due to a loss of investor confidence in the reliability of ourfinancial statements,which ultimately could negatively affect the market price of our shares,increase the volatility of our stock price and adversely affect ourability to raise additional funding.The
172、effect of these events could also make it more difficult for us to attract and retain qualified persons to serve on ourboard and our board committees and as executive officers.Risks Related to Our Intellectual Property Expiration of our patents may subject us to increased competition and reduce or e
173、liminate our opportunity to generate product revenue.The patents for our products have varying expiration dates and,when these patents expire,we may be subject to increased competition and we may not beable to recover our development costs.In some of the larger economic territories,such as the Unite
174、d States and Europe,patent term extension/restoration maybe available.We cannot,however,be certain that an extension will be granted or,if granted,what the applicable time period or the scope of patent protectionafforded during any extended period will be.If we are unable to obtain patent term exten
175、sion/restoration or some other exclusivity,we could be subject toincreased competition and our opportunity to establish or maintain product revenue could be substantially reduced or eliminated.Furthermore,we may nothave sufficient time to recover our development costs prior to the expiration of our
176、U.S.and non-U.S.patents.US Patent 6,045,990,which provides patent coverage relating to HypoThermosol FRS,will expire in April 2019,and its foreign patent counterparts willexpire in July 2019,reducing the barrier to entry for competition for this product,which may materially affect the pricing of Hyp
177、oThermosol FRS and ourability to retain market share.We may file extensions for this patent.We hold various trade secrets and other confidential know-how related to themanufacturing and testing of our products which limit our exposure upon the expiration of US patent 6,045,990.Our proprietary rights
178、 may not adequately protect our technologies and products.Our commercial success will depend on our ability to obtain patents and/or regulatory exclusivity and maintain adequate protection for our technologies andproducts in the United States and other countries.We will be able to protect our propri
179、etary rights from unauthorized use by third parties only to the extentthat our proprietary technologies and products are covered by valid and enforceable patents or are effectively maintained as trade secrets.10 Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Document ResearchT
180、he information contained herein may not be copied,adapted or distributed and is not warranted to be accurate,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by a
181、pplicable law.Past financial performance is no guarantee of future results.We intend to apply for additional patents covering both our technologies and products,as we deem appropriate.We may,however,fail to apply for patentson important technologies or products in a timely fashion,if at all.Our exis
182、ting patents and any future patents we obtain may not be sufficiently broad toprevent others from practicing our technologies or from developing competing products and technologies.In addition,the patent positions of life scienceindustry companies are highly uncertain and involve complex legal and f
183、actual questions for which important legal principles remain unresolved.As a result,the validity and enforceability of our patents cannot be predicted with certainty.In addition,we cannot guarantee that:we were the first to make the inventions covered by each of our issued patents and pending patent
184、 applications;we were the first to file patent applications for these inventions;others will not independently develop similar or alternative technologies or duplicate any of our technologies;any of our pending patent applications will result in issued patents;any of our patents will be valid or enf
185、orceable;any patents issued to us will provide us with any competitive advantages,or will not be challenged by third parties;andwe will develop additional proprietary technologies that are patentable,or the patents of others will not have an adverse effect onour business.The actual protection afford
186、ed by a patent varies on a product-by-product basis,from country to country and depends on many factors,including the type ofpatent,the scope of its coverage,the availability of regulatory related extensions,the availability of legal remedies in a particular country and the validityand enforceabilit
187、y of the patents.Our ability to maintain and solidify our proprietary position for our products will depend on our success in obtainingeffective claims and enforcing those claims once granted.Our issued patents and those that may be issued in the future,or those licensed to us,may bechallenged,inval
188、idated,unenforceable or circumvented,and the rights granted under any issued patents may not provide us with proprietary protection orcompetitive advantages against competitors with similar products.We also rely on trade secrets to protect some of our technology,especially where it isbelieved that p
189、atent protection is inappropriate or unobtainable.However,trade secrets are difficult to maintain.While we use reasonable efforts to protectour trade secrets,our employees,consultants,contractors or scientific and other advisors may unintentionally or willfully disclose our proprietaryinformation to
190、 competitors.Enforcement of claims that a third party has illegally obtained and is using trade secrets is expensive,time consuming anduncertain.In addition,non-U.S.courts are sometimes less willing than U.S.courts to protect trade secrets.If our competitors independently developequivalent knowledge
191、,methods and know-how,we would not be able to assert our trade secrets against them and our business could be harmed.We may not be able to protect our intellectual property rights throughout the world.Filing,prosecuting and defending patents on all of our products in every jurisdiction would be proh
192、ibitively expensive.Competitors may use ourtechnologies in jurisdictions where we have not obtained patent protection to develop their own products.These products may compete with our products,and may not be covered by any patent claims or other intellectual property rights.The laws of some non-U.S.
193、countries do not protect intellectual property rights to the same extent as the laws of the United States,and many companies haveencountered significant problems in protecting and defending such rights in foreign jurisdictions.The legal systems of certain countries,particularly certaindeveloping cou
194、ntries,do not favor the enforcement of patents and other intellectual property protection,particularly those relating to biotechnology,whichcould make it difficult for us to stop the infringement of our patents.Proceedings to enforce our patent rights in foreign jurisdictions could result insubstant
195、ial cost and divert our efforts and attention from other aspects of our business.If we fail to protect our intellectual property rights,our competitors may take advantage of our ideas and compete directly against us.Our success will depend to a significant degree on our ability to secure and protect
196、 intellectual property rights and enforce patent and trademark protectionsrelating to our technology.While we believe that the protection of patents and trademarks is important to our business,we also rely on a combination ofcopyright,trade secret,nondisclosure and confidentiality agreements,know-ho
197、w and continuing technological innovation to maintain our competitiveposition.From time to time,litigation may be advisable to protect our intellectual property position.However,these legal means afford only limitedprotection and may not adequately protect our rights or permit us to gain or keep any
198、 competitive advantage.Any litigation in this regard could be costly,and it is possible that we will not have sufficient resources to fully pursue litigation or to protect our intellectual property rights.This could result in therejection or invalidation of our existing and future patents.Any advers
199、e outcome in litigation relating to the validity of our patents,or any failure to pursuelitigation or otherwise to protect our patent position,could materially harm our business and financial condition.In addition,confidentiality agreements withour employees,consultants,customers,and key vendors may
200、 not prevent the unauthorized disclosure or use of our technology.It is possible that theseagreements will be breached or that they will not be enforceable in every instance,and that we will not have adequate remedies for any such breach.Enforcement of these agreements may be costly and time consumi
201、ng.Furthermore,the laws of foreign countries may not protect our intellectual propertyrights to the same extent as the laws of the United States.We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights and we may be unabl
202、eto protect our rights to,or use of,our technology.If we choose to go to court to stop someone else from using the inventions claimed in our patents or our licensed patents,that individual or company has theright to ask the court to rule that these patents are invalid and/or should not be enforced a
203、gainst that third party.These lawsuits are expensive and wouldconsume time and other resources even if we were successful in stopping the infringement of these patents.In addition,there is a risk that the court willdecide that these patents are invalid or unenforceable and that we do not have the ri
204、ght to stop the other party from using the inventions.There is also the riskthat,even if the validity or enforceability of these patents is upheld,the court will refuse to stop the other party on the grounds that such other partysactivities do not infringe our rights.11 Source:BIOLIFE SOLUTIONS INC,
205、10-K,March 15,2017Powered by Morningstar Document ResearchThe information contained herein may not be copied,adapted or distributed and is not warranted to be accurate,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the exten
206、t such damages or losses cannot be limited or excluded by applicable law.Past financial performance is no guarantee of future results.If we wish to use the technology claimed in issued and unexpired patents owned by others,we will need to obtain a license from the owner,enter intolitigation to chall
207、enge the validity or enforceability of the patents or incur the risk of litigation in the event that the owner asserts that we infringed itspatents.The failure to obtain a license to technology or the failure to challenge an issued patent that we may require to discover,develop or commercializeour p
208、roducts may have a material adverse effect on us.If a third party asserts that we infringed its patents or other proprietary rights,we could face a number of risks that could seriously harm our results ofoperations,financial condition and competitive position,including:patent infringement and other
209、intellectual property claims,which would be costly and time consuming to defend,whether or notthe claims have merit,and which could delay a product and divert managements attention from our business;substantial damages for past infringement,which we may have to pay if a court determines that our pro
210、duct or technologiesinfringe a competitors patent or other proprietary rights;a court prohibiting us from selling or licensing our technologies unless the third party licenses its patents or other proprietary rightsto us on commercially reasonable terms,which it is not required to do;andif a license
211、 is available from a third party,we may have to pay substantial royalties or lump-sum payments or grant cross licenses toour patents or other proprietary rights to obtain that license.The biotechnology industry has produced a proliferation of patents,and it is not always clear to industry participan
212、ts,including us,which patents covervarious types of products or methods of use.The coverage of patents is subject to interpretation by the courts,and the interpretation is not always uniform.Ifwe are sued for patent infringement,we would need to demonstrate that our products or methods of use either
213、 do not infringe the patent claims of the relevantpatent,and/or that the patent claims are invalid,and/or that the patent is unenforceable and we may not be able to do this.Proving invalidity,in particular,isdifficult since it requires a showing of clear and convincing evidence to overcome the presu
214、mption of validity enjoyed by issued patents.U.S.patent laws as well as the laws of some foreign jurisdictions provide for provisional rights in published patent applications beginning on the date ofpublication,including the right to obtain reasonable royalties,if a patent subsequently issues and ce
215、rtain other conditions are met.Because some patent applications in the United States may be maintained in secrecy until the patents are issued,because patent applications in the UnitedStates and many foreign jurisdictions are typically not published until 18 months after filing,and because publicati
216、ons in the scientific literature often lagbehind actual discoveries,we cannot be certain that others have not filed patent applications for technology covered by our issued patents or our pendingapplications,or that we were the first to invent the technology.Patent applications filed by third partie
217、s that cover technology similar to ours may have priority over our patent applications and could further require us toobtain rights to issued patents covering such technologies.If another party files a U.S.patent application on an invention similar to ours,we may elect toparticipate in or be drawn i
218、nto an interference proceeding declared by the U.S.Patent and Trademark Office to determine priority of invention in the UnitedStates.The costs of these proceedings could be substantial,and it is possible that such efforts would be unsuccessful,resulting in a loss of our U.S.patentposition with resp
219、ect to such inventions.Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we canbecause they have substantially greater resources.In addition,any uncertainties resulting from the initiation and continuation of any litigation could have amateri
220、al adverse effect on our ability to raise the funds necessary to continue our operations.We cannot predict whether third parties will assert these claimsagainst us,or whether those claims will harm our business.If we are forced to defend against these claims,whether they are with or without any meri
221、t andwhether they are resolved in favor of or against us,we may face costly litigation and diversion of managements attention and resources.As a result of thesedisputes,we may have to develop costly non-infringing technology,or enter into licensing agreements.These agreements,if necessary,may be una
222、vailableon terms acceptable to us,if at all,which could seriously harm our business or financial condition.Risks Related to our Common Stock and Other Securities The market for our common stock is limited and our stock price is volatile.Our common stock,traded on the NASDAQ Capital Market,has histor
223、ically traded at low average daily volumes,resulting in a limited market for thepurchase and sale of our common stock.The market prices of many publicly traded companies,including emerging companies in the life sciences industry,have been,and can be expected to be,highly volatile.The future market p
224、rice of our common stock could be significantly impacted by numerous factors,including,but not limited to:Future sales of our common stock or other fundraising events;Sales of our common stock by existing shareholders;Changes in our capital structure,including stock splits or reverse stock splits;An
225、nouncements of technological innovations for new commercial products by our present or potential competitors;Developments concerning proprietary rights;Adverse results in our field or with clinical tests of our products in customer applications;Adverse litigation;Unfavorable legislation or regulator
226、y decisions;Public concerns regarding our products;Variations in quarterly operating results;General trends in the health care industry;andOther factors outside of our control.12 Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Document ResearchThe information contained herein m
227、ay not be copied,adapted or distributed and is not warranted to be accurate,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law.Past financial perf
228、ormance is no guarantee of future results.A significant percentage of our outstanding common stock is held by two stockholders,and these stockholders therefore have significant influence on usand our corporate actions.As of December 31,2016,two of our existing stockholders,Taurus4757 GmbH(“Taurus”)a
229、nd WAVI Holdings AG(“WAVI”),beneficially owned,collectively,approximately 61.9%of our outstanding shares.Taurus and WAVI were previously secured lenders to our Company,and the chairman ofTaurus,Mr.Girschweiler,is a member of our board.Accordingly,these stockholders have had,and will continue to have
230、,significant influence in determiningthe outcome of any corporate transaction or other matter submitted to the stockholders for approval,including mergers,consolidations and the sale of all orsubstantially all of our assets,election of directors and other significant corporate actions.In addition,wi
231、thout the consent of these stockholders,we could beprevented from entering into transactions that could be beneficial to us.We also have an outstanding note payable to WAVI for$3.0 million as of December31,2016.Subsequent to year end,on March 1,2017,we drew down the remaining$1.0 million Advance rel
232、ated to the credit facility.We may be at risk of securities class action litigation.In the past,securities class action litigation has often been brought against a company following an extraordinary corporate action or a decline in the marketprice of its securities.This risk is especially relevant f
233、or us because our stock price and those of other biotechnology and life sciences companies haveexperienced significant stock price volatility in recent years.If we face such litigation,it could result in substantial costs and a diversion of managementsattention and resources,which could harm our bus
234、iness.We do maintain insurance,but the coverage may not be sufficient and may not be available in allinstances.Anti-takeover provisions in our charter documents and under Delaware law could make a third-party acquisition of us difficult.Our amended and restated certificate of incorporation and amend
235、ed and restated bylaws contain provisions that may discourage unsolicited takeoverproposals that stockholders may consider to be in their best interests.These provisions include the ability of our board to designate the terms of and issuenew series of preferred stock without stockholder approval and
236、 to amend our bylaws without stockholder approval.Further,as a Delaware corporation,we aresubject to Section 203 of the Delaware General Corporation Law,which generally prohibits a Delaware corporation from engaging in any businesscombination with any interested stockholder for a period of three yea
237、rs following the date that the stockholder became an interested stockholder,unlesscertain specific requirements are met as set forth in Section 203.Collectively,these provisions could make a third-party acquisition of us difficult or coulddiscourage transactions that otherwise could involve payment
238、of a premium over prevailing market prices for our common stock.Future sales or the potential for future sales of our securities in the public markets may cause the trading price of our common stock to decline and couldimpair our ability to raise capital through future equity offerings.Sales of a su
239、bstantial number of shares of our common stock or other securities in the public markets,or the perception that these sales may occur,couldcause the market price of our common stock or other securities to decline and could materially impair our ability to raise capital through the sale ofadditional
240、securities.We have a substantial number of warrants exercisable to purchase shares of common stock outstanding.Many of the shares of commonstock issuable upon exercise of those warrants will be freely tradable.We have agreed to use our best efforts to keep a registration statement registering theiss
241、uance and resale of many such shares effective during the term of the warrants.In addition,we have a significant number of shares of our common stockreserved for issuance pursuant to other outstanding options and rights.If such shares are issued upon exercise of options,warrants or other rights,or i
242、f weissue additional securities in a public offering or a private placement,such sales or any resales of such securities could further adversely affect the marketprice of our common stock.The sale of a large number of shares of our common stock or other securities also might make it more difficult f
243、or us to sell equityor equity-related securities in the future at a time and at the prices that we deem appropriate.We do not anticipate declaring any cash dividends on our common stock.We have never declared or paid cash dividends on our common stock and do not plan to pay any cash dividends in the
244、 near future.Our current policy is toretain all funds and earnings for use in the operation and expansion of our business.ITEM 1B.UNRESOLVED STAFF COMMENTS Not applicable.ITEM 2.PROPERTIES We lease approximately 30,000 square feet of property being used in current operations in our Bothell,Washingto
245、n principal location which contains office,manufacturing,storage and laboratory facilities.13 Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Document ResearchThe information contained herein may not be copied,adapted or distributed and is not warranted to be accurate,complete
246、or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law.Past financial performance is no guarantee of future results.We consider the facilities to be in a condi
247、tion suitable for their current uses.Because of anticipated growth in the business and due to the increasingrequirements of customers or regulatory agencies,we may need to acquire additional space or upgrade and enhance existing space prior to the expiry of thelease in 2021.We believe that adequate
248、facilities will be available upon the conclusion of our leases.All of our products and services are manufactured or provided from our Bothell,Washington facility.Additional information regarding our properties is contained in Note 10 to the Financial Statements included in this Annual Report on Form
249、 10-K.ITEM 3.LEGAL PROCEEDINGS In 2007,a number of lawsuits were brought against the Company by former employees as follows:On February 7,2007,Kristi Snyder,a former employee of the Company filed a complaint in the New York State Supreme Court,County of Broome,against us alleging a breach of an empl
250、oyment agreement and seeking damages of up to$300,000 plus attorneys fees.On April 6,2007,we were served with a complaint filed by John G.Baust,our former Chief Executive Officer and President,and thereafter,untilJanuary 8,2007,the Chairman,Sr.Vice President and Chief Scientific Officer,in the New Y
251、ork State Supreme Court,County of Tioga,against usseeking,among other things,damages under his employment agreement to be determined upon trial of the action plus attorneys fees,a declaratoryjudgment that he did not breach his fiduciary duties to the Company,and that his covenant not to compete is v
252、oid as against public policy orunenforceable as a matter of law,and to enjoin us from commencing an action against him in Delaware courts seeking damages for breaches of hisfiduciary obligations to us.The parties have engaged in extensive motion practice.By decision of December 18,2009,Justice Tait
253、rejected PlaintiffBausts efforts to obtain partial summary judgment.On June 15,2007,BioLife filed a lawsuit in the State of New York Supreme Court,County of Tioga,against Cell Preservation Services,Inc.(“CPSI”)and Coraegis Bioinnovations,Inc.(“Coraegis”),both of which are owned and controlled by Joh
254、n M.Baust,a former employee of theCompany.John M.Baust is the son of John G.Baust;both John G.Bausts and John M.Bausts employment with BioLife was terminated onJanuary 8,2007.On approximately August 21,2007,CPSI filed six counterclaims and Coraegis filed one counterclaim against BioLife.Four of thes
255、ix counterclaims brought by CPSI were based on breach of contract,one was based on BioLifes alleged negligence,and one was based onBioLifes alleged malicious institution and maintenance of the lawsuit against CPSI and Coraegis.Coraegis joined in the last counterclaim againstBioLife,which sought both
256、 compensatory and punitive damages.On December 4,2007,John M.Baust,the son of John G.Baust,filed a complaint in the New York State Supreme Court,County of Tioga,againstthe Company and Michael Rice,our Chief Executive Officer and former chairman of the board,alleging,among other things,a breach of an
257、employment agreement and defamation of character and seeking damages against us in excess of$300,000 plus attorneys fees.These legal proceedings,which were filed almost 10 years ago,are currently in discovery.We will vigorously defend our position related to these legalproceedings.ITEM 4.MINE SAFETY
258、 DISCLOSURES Not applicable.PART II ITEM 5.MARKET FOR REGISTRANTS COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIES Price Range of Common Stock Our common stock is traded on the NASDAQ Capital Market exchange under the ticker symbol“BLFS.”As of February 14,2017,there
259、 were approximately 405 holders of record of our common stock.We have never paid cash dividends on our common stock anddo not anticipate that any cash dividends will be paid in the foreseeable future.14 Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Document ResearchThe inform
260、ation contained herein may not be copied,adapted or distributed and is not warranted to be accurate,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable
261、 law.Past financial performance is no guarantee of future results.The following table sets forth the range of high and low quarterly closing sales prices of our common stock for the periods indicated:High Low Year ended December 31,2016 4th Quarter$1.83$1.45 3rd Quarter 2.37 1.57 2nd Quarter 1.96 1.
262、47 1st Quarter 2.10 1.57 Year ended December 31,2015 4th Quarter$2.48$2.04 3rd Quarter 2.75 1.96 2nd Quarter 2.79 1.50 1st Quarter 2.34 1.61 Equity Compensation Plan Information The following table sets forth information as of December 31,2016 relating to all of our equity compensation plans:Plan ca
263、tegory Number ofsecurities to beissued uponexercise ofoutstandingoptions(in thousands)WeightedAverageexercise priceof outstandingoptions Number ofsecuritiesremainingavailable forfutureissuance(inthousands)Equity compensation plans approved by security holders 1,842$1.96 1,634 Equity compensation pla
264、ns not approved by security holders(1)672$1.28 Total 2,514$1.78 1,634 (1)Represents shares of common stock issuable pursuant to non-plan stock option agreements entered into prior to the adoption of our 2013 PerformanceIncentive Plan.Prior to the adoption of our 2013 Performance Incentive Plan,we gr
265、anted certain individuals stock options pursuant to stock optionagreements that were not issued under a stockholder-approved plan.Each agreement entitles the holder to purchase from us a fixed number of shares ofcommon stock at a fixed purchase price per share for a fixed period of time,which may no
266、t exceed ten(10)years.The specific terms and conditions of eachoption,including when the right to exercise the option vests,the number of shares subject to the option,the exercise price per share,the method of exercise,exercisability following termination,disability and death,and adjustments upon st
267、ock splits,combinations,mergers,consolidation and like events arespecified in each agreement.In the event of a liquidation of the Company,or a merger,reorganization,or consolidation of the Company with any othercorporation in which we are not the surviving corporation or we become a wholly-owned sub
268、sidiary of another corporation,any unexercised options shall bedeemed canceled unless the surviving corporation elects to assume the options or to issue substitute options in place thereof.In the event of the forgoing,theholder will have the right to exercise the option during a ten-day period immed
269、iately prior to such liquidation,merger,or consolidation.Recent Sales of Unregistered Securities On August 8,2016,the Company issued 142,856 shares of common stock of the Company pursuant to the exercise of outstanding warrants at an exerciseprice of$0.84 per share.On October 17,2016,the Company iss
270、ued Life Sci Advisors 84,375 shares of our common stock as compensation for services.The foregoing transactions were exempt from registration pursuant to Section 4(a)(2)of the Securities Act.Issuer Repurchases of Equity Securities Not applicable.ITEM 6.SELECTED FINANCIAL DATA Not applicable.ITEM 7.M
271、ANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statements This Annual Report on Form 10-K contains“forward-looking statements”.These forward-looking statements involve a number of risks and uncertainties.Wecaution readers that any forward-looking
272、statement is not a guarantee of future performance and that actual results could differ materially from thosecontained in the forward-looking statement.These statements are based on current expectations of future events.Such statements include,but are not limitedto,statements about future financial
273、and operating results,plans,objectives,expectations and intentions,revenues,costs and expenses,interest rates,outcome of contingencies,business strategies,regulatory filings and requirements,performance and market acceptance of our products,the estimatedpotential size of markets,capital requirements
274、,the terms of any capital financing agreements and other statements that are not historical facts.You can findmany of these statements by looking for words like“believes,”“expects,”“anticipates,”“estimates,”“may,”“should,”“will,”“could,”“plan,”“intend,”orsimilar expressions in this Annual Report on
275、Form 10-K.We intend that such forward-looking statements be subject to the safe harbors created thereby.Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Document ResearchThe information contained herein may not be copied,adapted or distributed and is not warranted to be accurate
276、,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law.Past financial performance is no guarantee of future results.15 Source:BIOLIFE SOLUTIONS INC,1
277、0-K,March 15,2017Powered by Morningstar Document ResearchThe information contained herein may not be copied,adapted or distributed and is not warranted to be accurate,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent
278、 such damages or losses cannot be limited or excluded by applicable law.Past financial performance is no guarantee of future results.These forward-looking statements are based on the current beliefs and expectations of our management and are subject to significant risks and uncertainties.If underlyi
279、ng assumptions prove inaccurate or unknown risks or uncertainties materialize,actual results may differ materially from current expectations andprojections.Factors that might cause such a difference include those discussed under“Risk Factors,”as well as those discussed elsewhere in the AnnualReport
280、on Form 10-K.You are cautioned not to place undue reliance on these forward-looking statements,which speak only as of the date of this Annual Report on Form 10-K or,in the case of documents referred to or incorporated by reference,the date of those documents.All subsequent written or oral forward-lo
281、oking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by thecautionary statements contained or referred to in this section.We do not undertake any obligation to release publicly any revisions to these forward-lookingstatements to reflect eve
282、nts or circumstances after the date of this Annual Report on Form 10-K or to reflect the occurrence of unanticipated events,except asmay be required under applicable U.S.securities law.If we do update one or more forward-looking statements,no inference should be drawn that we willmake additional upd
283、ates with respect to those or other forward-looking statements.Recent Developments Restructuring of biologistex Joint Venture Contribution Agreement:On December 31,2016,we entered into a Contribution Agreement(the“Contribution Agreement”)with Savsu Technologies,LLC,a Delaware limitedliability compan
284、y(“STLLC”)and biologistex CCM,LLC,a Delaware limited liability company(“biologistex”or“SAVSU”).The closing of the transactionscontemplated by the Contribution Agreement occurred on December 31,2016(the“Closing Date”),simultaneously with the entrance into the ContributionAgreement.Biologistex is a jo
285、int venture entered into by the Company and STLLC on or about September 29,2014 for the purpose of acquiring,developing,maintaining,owning,operating,leasing and selling an integrated platform of a cloud-based information service and precision thermal shipping productsbased on STLLCs next generation
286、EVO smart container shipment platform.Prior to the Closing Date,biologistex was owned 52%by the Company and 48%by STLLC.Pursuant to the Contribution Agreement,STLLC contributed certain of its patent and trademark rights,personal property and related contracts to biologistexin exchange for the issuan
287、ce from biologistex to STLLC of an additional 7%membership interest in biologistex,so that upon the closing thereunder,STLLCowned 55%of biologistex and the Company owned 45%of biologistex.Other than liabilities for obligations to be performed pursuant to the contracts whichwere contributed to biolog
288、istex by STLLC,biologistex did not assume any liabilities of STLLC in connection with the Contribution Agreement.In connection with the Contribution Agreement,we(i)contributed to biologistex as a capital contribution outstanding loans owed by biologistex to theCompany in the aggregate amount of$6,55
289、7,776 and(ii)terminated any requirement which the Company may have had to purchase any additionalinventory from STLLC or contribute any inventory to biologistex.In addition,pursuant to the Contribution Agreement,the Company agreed that it will transfer to STLLC(i)on the first anniversary of the Clos
290、ing Date,11.11%of its membership interest in biologistex owned as of the Closing Date,such that on the first anniversary of the Closing Date the Company will own40%of biologistex(assuming that there are no other issuances or transfers of biologistex equity interests after the Closing Date),and(ii)on
291、 the secondanniversary of the Closing Date,33.33%of its membership interest in biologistex owned as of the Closing Date,such that on the second anniversary of theClosing Date the Company will own 25%of biologistex(assuming that there are no other issuances or transfers of biologistex equity interest
292、s after theClosing Date).However,if certain liquidity events,such as change in control or initial public offering,occur with respect to biologistex between the secondanniversary and third anniversary of the Closing Date,STLLC will pay to the Company an amount of the net proceeds therefrom as if the
293、Company had onlytransferred to STLLC on the second anniversary of the Closing Date an amount of membership interests in biologistex equal to 11.11%of the Companysmembership interest in biologistex owned as of the Closing Date,such that the Company would be treated for such purposes as if it owned 35
294、%ofbiologistex(assuming that there are no other issuances or transfers of biologistex equity interests after the Closing Date).Restructuring Amended and Restated Biologistex Operating Agreement:In connection with the Contribution Agreement,on the Closing Date,the Company,STLLC and biologistex entere
295、d into an Amended and RestatedOperating Agreement of biologistex(the“Amended JV Operating Agreement”),amending and restating the limited liability company operating agreement ofbiologistex initially entered into by such parties on September 29,2014.The Amended JV Operating Agreement provides that as
296、 of the Closing Date,biologistexs membership interests are owned 45%by the Company and 55%by STLLC.Pursuant to the Amended JV Operating Agreement,biologistex will be managed by a three member management committee,initially consisting of DanaBarnard and Bruce McCormick,both designated by STLLC,and Mi
297、chael Rice,designated by the Company(the“Management Committee”).Certainfundamental actions by the Management Committee require approval of members holding at least 60%of the membership interests of biologistex(includingboth STLLC and the Company).Biologistexs membership interests are also subject to
298、 transfer restrictions in the Amended JV Operating Agreement,including drag-along and tag-along rights.16 Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Document ResearchThe information contained herein may not be copied,adapted or distributed and is not warranted to be accura
299、te,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law.Past financial performance is no guarantee of future results.Services Agreement:In connectio
300、n with the Contribution Agreement,on the Closing Date,the Company and biologistex entered into a Services Agreement(the“ServicesAgreement”)whereby the Company will provide certain sales and marketing services to biologistex in exchange for payment by biologistex to the Companyof(i)a cash fee for the
301、 first year of the contract only in the amount of$100,000,(ii)a commission(the“Commissions”),paid quarterly,equal to 20%of thegross revenues of biologistex from any customer account resulting from sales activity or a marketing lead generated by the Company(“BioLife CustomerRevenue”),and(iii)reimburs
302、ement of pre-approved reasonable direct costs and expenses incurred by the Company by or on behalf of biologistex inconnection with the services.After the third anniversary of the Closing Date,the Commissions will decrease to 10%of the BioLife Customer Revenue.The Services Agreement continues until
303、terminated by either party.The Services Agreement can be terminated(a)by mutual agreement,(b)beginning 90days prior to the third anniversary of the Closing Date,by either party with 90 days notice,(c)by biologistex with 90 days notice if(i)there are certainchanges to the management of the Company or
304、 its subsidiaries,(ii)the Company transfers all of its equity interests in biologistex or(iii)there is a change ofcontrol of the Company,(d)by the Company with 90 days notice if(i)STLLC transfers all of its equity interest in biologistex or(ii)there is a change ofcontrol of STLLC or(e)by either part
305、y(i)for a material breach of the Services Agreement by the other party that is not cured within 30 days or(ii)if the otherparty is subject to certain bankruptcy/insolvency events.If the Services Agreement is terminated by biologistex under items(b)or(c)of the precedingsentence,or by the Company unde
306、r items(d)or(e)of the preceding sentence,the Company will be entitled to receive Commissions equal to 10%of theBioLife Customer Revenue during the 12 month period following such termination.Credit Facility On May 12,2016,we entered into a$4 million unsecured credit facility(the“Original Note”)with o
307、ur largest shareholder,WAVI.Under the relatedcommitment letter,WAVI has agreed to make a series of four$1 million advances on June 1,2016,September 1,2016,December 1,2016 and March 1,2017.The Original Note is unsecured,carries an annual interest rate of 10%,and matures on June 1,2017.In addition,we
308、have agreed not to permit any liens onour assets,subject to certain exceptions.As partial compensation for WAVI entering into the commitment letter,we issued WAVI a detachable common stockpurchase warrant exercisable to purchase up to 550,000 shares of common stock at an exercise price of$1.75 per s
309、hare.The warrant expires on May 12,2021.Amendment of Credit Facility On January 9,2017,the Company issued an amended and restated promissory note(the“Note”)to WAVI.The Note,which amends and restates the OriginalNote,extends the maturity date of the Note from June 1,2017 to June 1,2022 and includes a
310、 long-term repayment schedule as follows:beginning September1,2017 to June 1,2018,the Company will make four quarterly cash interest only payments of$106,250 and from September 1,2018 through June 1,2022,the Company will make quarterly cash principal payments of$265,625,in addition to ongoing intere
311、st payments.All other terms of the Original Note,including the$4 million principal amount of the Note and the 10%per annum interest rate on the Original Note,remain the same.Overview Managements discussion and analysis provides additional insight into the Company and is provided as a supplement to,a
312、nd should be read in conjunctionwith,our audited financial statements and accompanying footnotes thereto.We strive to be the leading provider of biopreservation tools for cells,tissues,and organs;to facilitate basic and applied research and commercialization ofnew therapies by maintaining the health
313、 and function of biologic source material and finished products during manufacturing,distribution and clinicaladministration.Results of Operations Overview for 2016 In 2016,we reported financial results that were consistent with the continued execution of our long-term plans.We believe we are the ma
314、rket leader for pre-formulated,clinical grade biopreservation media products.Our patented biopreservation media products are formulated to reduce preservation-induced,delayed-onset cell damage and death.Our platform enabling technology provides our customers significant shelf life extension of biolo
315、gic source materialand final cell products,and also greatly improved post-preservation cell,tissue,and organ viability and function.Our products continue to be widelyadopted by this segment.We believe that our products have been incorporated in over 250 applications for new cell and tissue-based reg
316、enerative medicineproducts and therapies.We continue to implement strategies that will increase awareness of the need for improved biopreservation and,through SAVSU,cold chain logisticsmonitoring and tracking.17 Source:BIOLIFE SOLUTIONS INC,10-K,March 15,2017Powered by Morningstar Document ResearchT
317、he information contained herein may not be copied,adapted or distributed and is not warranted to be accurate,complete or timely.The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by a
318、pplicable law.Past financial performance is no guarantee of future results.Our strategies to achieve this objective include:Utilize Existing Biopreservation Media Sales,Distribution and Manufacturing Infrastructure.We have developed a direct sales and distribution networkfor our products which we ut
319、ilize to expand sales to existing customers and to gain additional customers.We believe that our products have beenincorporated into over 250 applications for new cell and tissue-based regenerative medicine products and therapies.A significant number involve CAR-Tcells and other types of T cells and
320、 mesenchymal stem cells targeting blood cancers,solid tumors and other leading causes of death and disability.In 2016,key product adoption announcements included:TissueGene,Inc.,specializing in regenerative therapies for the treatment of various orthopedic diseases,signed a 10-year supply agreement
321、with forCryoStor use in Invossa Osteoarthritis Cell-Mediated Gene Therapy.TissueGene will be entering a Phase 3 clinical trial for Invossa,an allogeneiccell therapy for osteoarthritis of the knee.Promethera Biosciences,a clinical stage biopharmaceutical company and the global leader in cell therapy
322、and regenerative medicine for the treatmentof inborn and acquired liver diseases with no effective therapeutic cure,has embedded the Companys clinical grade CryoStor cryopreservationfreeze media into its manufacturing process for HepaStem,a cell-based treatment targeting several metabolic liver diso
323、rders such as hemophilia andlarge clinical indications including acute or chronic liver failure(ACLF),fibrosis and nonalcoholic steatohepatitis(NASH).Kolon Life Science,a developer or innovative cell and gene therapies including Invossa,incorporated CryoStor cryopreservation freeze media intoits man
324、ufacturing process for Invossa,a cell-mediated gene therapy for knee osteoarthritis to be marketed by Kolon Life Science.Bellicum Pharmaceuticals,a clinical stage biopharmaceutical company focused on discovering and developing first-and best-in-class cellularimmunotherapies for hematological cancers
325、 and solid tumors,as well as orphan inherited blood diseases,signed a 10-year supply agreement forCryoStor for several cellular immunotherapies targeting blood cancers and solid tumors.Cook MyoSite,a subsidiary of the Cook Group,developer and subsequent commercialization of technology related to the
326、 collection,selection,andexpansion of human skeletal muscle cells for the treatment of a variety of disorders,embedded BioLife media products into a Phase III trial for anautologous cell therapy for treatment of female stress urinary incontinence.Kite Pharma,a leading developer of chimeric antigen r
327、eceptor(CAR)and T cell receptor(TCR)products for various cancers,signed a 10-year supplyagreement for CryoStor for use in CAR T cell therapies.Continuously show the scientific results of using our media products in cell and tissue storage.We are continuously testing our products internally andshowin
328、g the benefits of using our media products to the scientific community.Additionally,we communicate the results of independent third party testing ofour media products.External studies:selected articles published in 2016 showing results from using our media products include:The article,“Successful ex
329、pansion of functional and stable regulatory T Cells for immunotherapy in liver transplantation”,was published in the journalOncotarget and completed at MRC Centre for Transplantation,Division of Transplantation Immunology and Mucosal Biology,Kings College London,Guys Hospital,Great Maze Pond,London,
330、and the Institute of Liver Studies,Kings College Hospital,Denmark Hill,London.In this study,Treg cellswere frozen in CryoStor,then thawed and assessed for viability and suppressive function.The authors concluded:We report the enrichment of a pure,stable population of Tregs(95%CD4+CD25+FOXP3+),reachi
331、ng adequate numbers for their clinicalapplication.Our protocol proved successful in influencing the expansion of superior functional Tregs,as compared to freshly isolated cells,whilst alsopreventing their conversion to Th17 cells under pro-inflammatory conditions.We conclude with the manufacture of
332、the final Treg product in the clinical research facility(CRF),a prerequisite for the clinical application ofthese cells.The article,“Widespread Myocardial Delivery of Heart-Derived Stem Cells by Nonocclusive Triple-Vessel Intracoronary Infusion in Porcine IschemicCardiomyopathy:Superior Attenuation
333、of Adverse Remodeling Documented by Magnetic Resonance Imaging and Histology,a study using CryoStor”was completed at Cedars-Sinai Heart Institute in Los Angeles,and Keio University School of Medicine in Tokyo,Japan.The authors concluded:We have addressed a number of issues that are central to the delivery of cell therapy(safety and efficacy of stop-flow versus continuous-flow,and of single-versus
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