8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 17, 2019 (April 5, 2019)

BIOLIFE SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-36362	94-3076866
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3303 Monte Villa Parkway,

Bothell, WA 98021

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (425) 402-1400

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of exchange on which registered
BioLife Solutions, Inc. Common Shares	BLFS	NASDAQ Capital Market

EXPLANATORY NOTE

This Amendment No. 1 on Form 8-K/A (this “Form 8-K/A”) to our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 5, 2019 (the “Original Form 8-K”) is being filed to amend Item 9.01 to the Original Form 8-K to include certain financial statements related to BioLife Solutions, Inc.’s (the “Company”) acquisition of 100% of the capital shares of Astero Bio Corporation (“Astero”) as reported on the Original Form 8-K. Except as set forth herein, no modifications have been made to the information contained in the Original Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(a)           Financial Statements of Businesses Acquired.

The audited financial statements of Astero as of and for the fiscal year ended December 31, 2018 and the unaudited financial statements of Astero as of and for the fiscal quarter ended March 31, 2019 are filed as Exhibit 99.1 and 99.2, respectively, and are incorporated by reference herein.

(b)           Pro Forma Financial Information.

The unaudited pro forma combined statement of operations of the Company relating to the acquisition of the capital shares of Astero as of and for the fiscal year ended December 31, 2018 and the statement of operations and balance sheet for the fiscal quarter ended March 31, 2019 are filed as Exhibit 99.3 and incorporated by reference herein.

(d)           Exhibits.

Exhibit No.	Description
23.1	Consent of Peterson Sullivan LLP
99.1	The audited financial statements of Astero as of and for the fiscal year ended December 31, 2018.
99.2	The unaudited financial statements of Astero as of and for the fiscal quarter ended March 31, 2019.
99.3	The unaudited pro forma combined statement of operations of the Company relating to the acquisition of the capital shares of Astero as of and for the fiscal year ended December 31, 2018 and the statement of operations and balance sheet for the fiscal quarter ended March 31, 2019.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Biolife Solutions, Inc.
Date: June 17, 2019	By:	/s/ Roderick de Greef
		Name: Roderick de Greef Title: Chief Financial Officer

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITOR

We consent to the incorporation by reference into Registration Statement Nos. 333-222433 and 333-208912 on Form S-3, Registration Statement Nos. 333-222437, 333-205101, and 333-189551 on Form S-8, and Registration Statement No. 333-194697 on Post-Effective Amendment No. 1 to Form S-1 on Form S-3 of our report dated June 14, 2019, relating to our audit of the financial statements of Astero Bio Corporation for the year ended December 31, 2018, which is included in this Form 8-K/A of BioLife Solutions, Inc. dated June 17, 2019.

/S/ PETERSON SULLIVAN LLP

Seattle, Washington

June 17, 2019

EX-99.1

Exhibit 99.1

ASTERO BIO CORPORATION

FINANCIAL STATEMENTS

DECEMBER 31, 2018

CONTENTS

	Page
INDEPENDENT AUDITORS' REPORT	1
FINANCIAL STATEMENTS
BALANCE SHEET	2
STATEMENT OF OPERATIONS	3
STATEMENT OF STOCKHOLDERS' EQUITY	4
STATEMENT OF CASH FLOWS	5
NOTES TO FINANCIAL STATEMENTS	6 - 11

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Shareholders

Astero Bio Corporation

We have audited the accompanying financial statements of Astero Bio Corporation, which comprise the balance sheet as of December 31, 2018, and the related statements of operations, stockholders' equity, and cash flows for the year then ended, and the related notes to the financial statements.

Management's Responsibilities for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Astero Bio Corporation as of December 31, 2018, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States.

Other Matter – Subsequent Event

As discussed in Note 1 to the financial statements, on April 1, 2019, the Company was acquired by BioLife Solutions, Inc. (“BioLife”). Our opinion is not modified with respect to that matter.

/S/ PETERSON SULLIVAN LLP

Seattle, Washington

June 14, 2019

ASTERO BIO CORPORATION

BALANCE SHEET

December 31, 2018

ASSETS
Current Assets
Cash and cash equivalents	$	165,362
Accounts receivable, net of allowance for doubtful accounts of $10,000		160,178
Inventories		214,792
Other assets		19,878
Total current assets		560,210
Intangible Assets, net		4,492,644
Total assets	$	5,052,854
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	35,073
Accrued compensation		53,825
Deferred revenue		159,951
Total current liabilities		248,849
Stockholders' Equity
Preferred stock, $0.001 par value; 6,154,167 shares authorized
Founders convertible preferred stock; 900,000 shares designated, issued, and outstanding		900
Series A convertible preferred stock; 3,833,334 shares designated; 3,625,001 shares issued and outstanding; aggregate liquidation preference of $4,350,001		3,625
Junior Series A-1 convertible preferred stock; 1,420,833 shares designated, issued, and outstanding; aggregate liquidation preference of $1,705,000		1,421
Common stock, $0.001 par value; 12,000,000 shares authorized; 4,039,999 shares issued and outstanding		4,040
Additional paid-in capital		6,090,482
Accumulated deficit		(1,296,463	)
Total stockholders' equity		4,804,005
Total liabilities and stockholders' equity	$	5,052,854

See Notes to Financial Statements

2

ASTERO BIO CORPORATION

STATEMENT OF OPERATIONS

For the Year Ended December 31, 2018

Revenue	$	607,735
Cost of goods sold		350,937
Gross profit		256,798
Operating Expenses
Research and development		862,079
General and administrative		490,558
Sales and marketing		195,607
Total operating expenses		1,548,244
Loss from operations		(1,291,446	)
Interest Expense		(5,017	)
Net loss	$	(1,296,463	)

See Notes to Financial Statements

3

ASTERO BIO CORPORATION

STATEMENT OF STOCKHOLDERS' EQUITY

For the Year Ended December 31, 2018

	Founders Preferred Stock				Series A Preferred Stock				Junior Series A-1 Preferred Stock				Common Stock				Additional						Total
	Number				Number				Number				Number				Paid-In			Accumulated			Stockholders'
	of Shares		Amount		of Shares		Amount		of Shares		Amount		of Shares		Amount		Capital			Deficit			Equity
Balances as of December 31, 2017		-	$	-		-	$	-		-	$	-		-	$	-	$	-		$	-		$	-
Issuance of stock to founders for nominal consideration		900,000		900				-				-		3,600,000		3,600		(4,500	)					-
Common stock issued for cash								-				-		25,000		25								25
Preferred stock issued for cash, net of stock issuance costs of $37,557						625,001		625				-				-		711,819						712,444
Preferred stock issued in exchange for assets (see Note 2)						2,745,833		2,746		1,420,833		1,421				-		4,995,832						4,999,999
Restricted stock issued for services								-						414,999		415		82,585						83,000
Preferred stock issued on conversion of note payable and accrued interest						254,167		254										304,746						305,000
Net loss																					(1,296,463	)		(1,296,463	)
Balances as of December 31, 2018		900,000	$	900		3,625,001	$	3,625		1,420,833	$	1,421		4,039,999	$	4,040	$	6,090,482		$	(1,296,463	)	$	4,804,005

See Notes to Financial Statements

4

ASTERO BIO CORPORATION

STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2018

Cash Flows From Operating Activities
Net loss	$	(1,296,463	)
Adjustments to reconcile net loss to net cash flows used in operating activities
Depreciation of equipment and furniture		8,650
Stock compensation expense from restricted stock issued for services		83,000
Amortization of intangible assets		216,335
Interest accrued and converted to preferred stock		5,000
Changes in operating assets and liabilities
Accounts receivable		(160,178	)
Inventories		134,013
Other assets		(19,878	)
Accounts payable		35,073
Accrued compensation		53,825
Deferred revenue		159,951
Net cash flows used in operating activities		(780,672	)
Cash Flows From Investing Activity
Purchases of intangible assets		(66,435	)
Cash Flows From Financing Activities
Proceeds from issuance of preferred stock		750,001
Proceeds from issuance of common stock		25
Proceeds from issuance of debt		300,000
Payment of stock issuance costs		(37,557	)
Net cash flows provided by financing activities		1,012,469
Net change in cash and cash equivalents		165,362
Cash and Cash Equivalents, beginning of year		-
Cash and Cash Equivalents, end of year	$	165,362
Noncash Investing and Financing Activities:
Preferred stock issued in exchange for assets (see Note 2)	$	4,999,999
Conversion of note payable and accrued interest to preferred stock	$	305,000

See Notes to Financial Statements

5

NOTES TO FINANCIAL STATEMENTS

Note 1. Nature of Operations and Significant Accounting Policies

Nature of Operations

Astero Bio Corporation ("the Company") was formed in late 2017, but did not have any operations until 2018. The Company is an innovator in the design, development and commercialization of novel automated thawing devices for cell and gene therapies. The Company’s ThawSTAR® Automated Cell Thawing Systems are designed to replace uncontrolled and highly variable manual methods, de-risking the therapeutic cell thawing process and optimizing cell efficacy. ThawSTAR® systems optimize cell thawing using a customizable algorithm for each unique cell therapy product and protocol. These systems, combined with the Company’s ultra-low temperature cold storage and transport solutions, advance the physical management of biologics by providing safe, controlled and scalable processing of temperature-sensitive samples and products.

Subsequent Acquisition

On April 1, 2019, the Company was acquired by BioLife Solutions, Inc. (“BioLife”). The shareholders of the Company sold all equity ownership of the Company to BioLife for cash consideration and the Company was merged into BioLife.

Basis of Presentation

These financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers highly liquid short-term investments with original maturities from the date of purchase of three months or less to be cash equivalents. From time to time, the Company has cash and cash equivalent balances in excess of federally insured limits.

Accounts Receivable

Accounts receivable are stated at their net realizable amount and consist of amounts due from customers. The Company uses the allowance method for recognizing bad debts. When an account is deemed uncollectible, it is written off against the allowance. The Company generally does not charge interest or require collateral for its receivables.

At December 31, 2018, amounts due from three customers comprised 62% of net accounts receivable.

6

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in first-out (FIFO) method. At December 31, 2018, all inventory is finished goods inventory.

Intangible Assets

Intangible assets consist of acquired patents and trademarks (see Note 2) and costs incurred in developing patents. The Company initially records intangible assets at their fair value on the date of acquisition for acquired intangibles or cost if related to patent development and then amortizes them using the straight-line method over the estimated useful lives of the assets, ranging from 10 to 15 years.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount to the future net cash flows that the assets are expected to generate. If said assets are considered to be impaired, the impairment that would be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. There have been no such impairments of long-lived assets to date.

Revenue Recognition

The Company generates revenue primarily from the sales of products. Revenue from the sales of products, including shipping and handling charges billed to customers, is recognized when title and risk of loss pass to customers which is generally upon either shipment of product or receipt by the customer, depending on the specific shipment terms. Shipping and handling costs are classified as part of cost of goods sold in the statement of operations.

Revenue from two customers accounted for 47% of total revenue during the year ended December 31, 2018.

Warranty Claims

The Company provides for a standard warranty on products sold. The Company records a liability for potential warranty claims for product malfunctions. The liability is management’s best estimate of potential costs related to future claims. Based on management’s determination of the likelihood of potential costs related to warranty claims on products sold through December 31, 2018, no warranty liability was determined to be necessary and none is recorded at December 31, 2018.

Research and Development

Costs incurred in research and development activities are generally expensed as incurred. 

Advertising

Advertising costs are expensed as incurred. Advertising expense for the year ended December 31, 2018, was $28,392, which is included in sales and marketing expenses in the statement of operations.

7

Stock-Based Compensation

The Company accounts for stock-based awards based on the fair value of the stock-based award on the date of grant. The fair value of the stock-based award is recognized to expense over the requisite service period (typically the vesting period) with forfeitures recognized when they occur.

Income Taxes

The Company accounts for income taxes under an asset and liability approach that requires recognition of deferred tax assets and liabilities for expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. The Company establishes a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be utilized against future taxable income. The Company evaluates its uncertain income tax positions and may record a liability for any unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in an income tax return. No liability has been recorded for uncertain tax positions or related interest or penalties at December 31, 2018.

Note 2. Asset Acquisition

In July 2018, the Company completed the acquisition of tangible and intangible assets from a company in exchange for 2,745,833 shares of Series A preferred stock and 1,420,833 shares of Junior Series A-1 preferred stock. The assets acquired relate to the ThawSTAR® product line. The transaction was recorded based on the fair value of the preferred stock issued of $4,999,999 as its’ fair value was more clearly evident than the fair value of the assets acquired (the fair value of the preferred stock was based on the price paid in cash for preferred stock). The assets acquired and their initial recorded value at the acquisition date are as follows:

Acquired technology	$	4,106,427
Trademarks		536,117
Inventory		348,805
Equipment and furniture		8,650
	$	4,999,999

8

Note 3. Intangible Assets

Intangible assets consist of the following at December 31, 2018:

				Remaining
				Useful Life
Acquired and other developed technology	$	4,172,862		14.3 years
Trademarks		536,117		9.3 years
		4,708,979
Accumulated amortization		(216,335	)
	$	4,492,644

Estimated future amortization expense for intangible assets is as follows for years ending December 31:

2019	$	327,000
2020		327,000
2021		327,000
2022		327,000
2023		327,000
Thereafter		2,857,644
	$	4,492,644

Note 4. Stockholders' Equity

Founders’ Stock

In January 2018, the Company issued 900,000 shares of Founders Preferred Stock and 3,600,000 shares of common stock to the three founders of the Company in exchange for the assets contributed to the Company. The fair value of assets contributed and related shares of common and preferred stock were deemed to be immaterial and thus, no amounts are recorded in these financial statements for the issuance of stock.

Convertible Preferred Stock

Conversion. Shares of Founders, Series A, and Junior Series A-1 preferred stock are convertible into shares of common stock at the option of the holder at a ratio equal to the original issue price divided by the conversion price. The original issue price and the conversion price were initially the same for Founders, Series A, and Junior Series A-1 preferred stock at $1.20 per share. The conversion price is subject to adjustment as described in the Company’s Certificate of Incorporation. In addition, each share of preferred stock will automatically be converted into shares of common stock upon the earlier of (1) the closing of a public offering for common stock, as defined in the Company’s Certificate of Incorporation, or (2) upon the occurrence of a vote of the holders of a majority of the outstanding shares of preferred stock.

9

Redemption. Shares of Series A and Junior Series A-1 preferred stock are redeemable on or after July 1, 2023, at the option of the holders of the shares of Series A and Junior Series A-1 preferred stock. The redemption price will be equal to the greater of (1) the original issue price, plus any dividends accrued or declared but unpaid, of the preferred stock, or (2) the fair market value (determined in the manner set forth in the Company’s Certificate of Incorporation) of the preferred stock as of the date of the Company’s receipt of the written notice requesting redemption of the preferred stock. Such redemption shall be made in one lump sum payment within six months after receipt by the Company of the redemption request

Liquidation. In the event of liquidation, dissolution, or winding up of the Company, (i) Series A preferred stockholders are entitled to preferential payment equal to the amount of the original issue price, plus any dividends declared but unpaid, before any payment shall be made to the holders of Junior Series A-1 preferred stock, Founders preferred stock or common stock, and (ii) Junior Series A-1 preferred stockholders are entitled to preferential payment equal to the amount of the original issue price, plus any dividends declared but unpaid, before any payment shall be made to the holders of Founders preferred stock or common stock Upon liquidation and payment of the full amount to the Series A and Junior Series A-1 preferred stockholders, distribution of the remaining assets of the Company would be pro rata to the preferred and common shareholders based on an as-converted to common stock basis. If there are insufficient funds to pay the preferential amount to the holders of the Series A and Junior Series A-1 preferred stock in full, then amounts available will be distributed ratably to the holders of the Series A and Junior Series A-1 preferred stock in proportion to the preferential amount to which each holder is entitled.

Dividend Provisions. The holders of Series A preferred stock are entitled to receive annual dividends at the rate of 8% of the original issue price per share prior and in preference to any declaration or payment of any dividend on other preferred or common stock. The holders of Junior Series A-1 preferred stock are entitled to receive annual dividends at the rate of 8% of the original issue price per share prior and in preference to any declaration or payment of any dividend on Founders preferred stock or common stock. The right to receive dividends is cumulative and dividends shall accrue from day to day, whether or not declared, but are payable only when and if declared by the Board of Directors of the Company. As of December 31, 2018, no dividends had been declared or paid.

Voting Rights. The holder of each share of preferred stock is entitled to the number of votes equal to the number of shares of common stock into which each share of preferred stock can be converted. The holders of Series A and Junior Series A-1 preferred stock are entitled, voting together as a separate series, to elect three directors of the Board of Directors. The holders of common stock are entitled to elect two directors of the Board of Directors. The Series A and Junior Series A-1 preferred stockholders are entitled to certain protective provisions preventing the Company from performing certain actions without the preferred stockholders’ approval.

2018 Stock Plan

The Company has a 2018 Stock Plan ("the Plan") and reserved 475,000 shares of common stock for issuances thereunder. Under the terms of the Plan, the Board of Directors may grant incentive and nonqualified stock options, stock appreciation rights, restricted stock, and restricted stock units to employees, directors, and consultants of the Company. At December 31, 2018, the number of shares of common stock available for future grant under the Plan amounted to 60,001.

During the year ended December 31, 2018, the Company granted 414,999 shares of restricted stock to employees as compensation for services rendered. The restricted stock vested in full on grant. The aggregate fair value of these restricted stock awards was $83,000, which represented the estimated fair value of the Company’s common stock on the date that the restricted stock awards were granted. The Company recognized stock compensation expense of $83,000 for these restricted stock awards during the year ended December 31, 2018, and there is no unrecognized stock compensation expense at December 31, 2018.

10

Note 5. Income Taxes

For the year ended December 31, 2018, the Company did not have any taxable income; therefore, no income tax liability or expense has been recorded in these financial statements. The difference between the taxes at the statutory federal tax rate and no tax provision recorded is primarily due to the full valuation allowance against the Company's net deferred tax asset. The net deferred tax asset at December 31, 2018, amounts to approximately $200,000 and is primarily composed of a tax net operating loss carryforward. The Company has provided a full valuation allowance against the net deferred tax asset, which increased by approximately $200,000 during the year ended December 31, 2018.

At December 31, 2018, the Company has a net operating loss carryforward of approximately $1.0 million which can be carried forward indefinitely. If not used, the net operating losses may be subject to limitation under Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under the regulations.

Note 6. Operating Lease

The Company leases its office facility under a lease agreement expiring June 30, 2019. The lease requires monthly payments of $7,378 resulting in future minimum rental payments for the year ending December 31, 2019, of $44,265. Rent expense under this lease for the year ended December 31, 2018, was $60,255, which is included in general and administrative expenses in the statement of operations.

Note 7. Subsequent Events

Subsequent events have been evaluated through the date these financial statements were available to be issued, which was June 14, 2019. Subsequent to year-end, the Company was acquired by BioLife as discussed in Note 1, and also received proceeds of $300,000 from a significant shareholder under promissory notes.

11

EX-99.2

Exhibit 99.2

ASTERO BIO CORPORATION

FINANCIAL STATEMENTS

MARCH 31, 2019

CONTENTS

	Page
FINANCIAL STATEMENTS
BALANCE SHEET (UNAUDITED)	3
STATEMENTS OF OPERATIONS (UNAUDITED)	4
STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)	5
STATEMENTS OF CASH FLOWS (UNAUDITED)	6
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)	7 - 12

ASTERO BIO CORPORATION

BALANCE SHEET

March 31, 2019

(Unaudited)

ASSETS
Current Assets
Cash and cash equivalents	$	11,951
Accounts receivable, net of allowance for doubtful accounts of $44,834		154,476
Inventories		176,099
Other assets		99,898
Total current assets		442,424
Intangible Assets, net		4,457,880
Total assets	$	4,900,304
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	233,852
Deferred revenue		164,416
Note payable to shareholder		300,000
Total current liabilities		698,268
Stockholders' Equity
Preferred stock, $0.001 par value; 6,154,167 shares authorized
Founders convertible preferred stock; 900,000 shares designated, issued, and outstanding		900
Series A convertible preferred stock; 3,833,334 shares designated; 3,625,001 shares issued and outstanding; aggregate liquidation preference of $4,350,001		3,625
Junior Series A-1 convertible preferred stock; 1,420,833 shares designated, issued, and outstanding; aggregate liquidation preference of $1,705,000		1,421
Common stock, $0.001 par value; 12,000,000 shares authorized; 4,039,999 shares issued and outstanding		4,040
Additional paid-in capital		6,090,482
Accumulated deficit		(1,898,432	)
Total stockholders' equity		4,202,036
Total liabilities and stockholders' equity	$	4,900,304

See Notes to Financial Statements

3

ASTERO BIO CORPORATION

STATEMENTS OF OPERATIONS

For the Three Months Ended March 31, 2019 and 2018

(Unaudited)

	2019			2018
Revenue	$	209,834		$	-
Cost of goods sold		102,677
Gross profit		107,157			-
Operating Expenses
Research and development		488,167			29,128
General and administrative		155,562			39,332
Sales and marketing		65,397			17,769
Total operating expenses		709,126			86,229
Net loss	$	(601,969	)	$	(86,229	)

See Notes to Financial Statements

4

ASTERO BIO CORPORATION

STATEMENTS OF STOCKHOLDERS' EQUITY

For the Three Months Ended March 31, 2019 and 2018

(Unaudited)

	Founders Preferred Stock				Series A Preferred Stock				Junior Series A-1 Preferred Stock				Common Stock				Additional					Total
	Number				Number				Number				Number				Paid-In		Accumulated			Stockholders'
	of Shares		Amount		of Shares		Amount		of Shares		Amount		of Shares		Amount		Capital		Deficit			Equity
Balances as of December 31, 2018		900,000	$	900		3,625,001	$	3,625		1,420,833	$	1,421		4,039,999	$	4,040	$	6,090,482	$	(1,296,463	)	$	4,804,005
Net loss																				(601,969	)		(601,969	)
Balances as of March 31, 2019		900,000	$	900		3,625,001	$	3,625		1,420,833	$	1,421		4,039,999	$	4,040	$	6,090,482	$	(1,898,432	)	$	4,202,036

	Founders Preferred Stock				Series A Preferred Stock				Junior Series A-1 Preferred Stock				Common Stock				Additional						Total Stockholders'
	Number				Number				Number				Number				Paid-In			Accumulated			Equity
	of Shares		Amount		of Shares		Amount		of Shares		Amount		of Shares		Amount		Capital			Deficit			(Deficit)
Balances as of December 31, 2017		-	$	-		-	$	-		-	$	-		-	$	-	$	-		$	-		$	-
Issuance of stock to founders for nominal consideration		900,000		900										3,600,000		3,600		(4,500	)
Net loss																					(86,229	)		(86,229	)
Balances as of March 31, 2018		900,000	$	900		-	$	-		-	$	-		3,600,000	$	3,600	$	(4,500	)	$	(86,229	)	$	(86,229	)

See Notes to Financial Statements

5

ASTERO BIO CORPORATION

STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31, 2019

(Unaudited)

	2019			2018
Cash Flows From Operating Activities
Net loss	$	(601,969	)	$	(86,229	)
Adjustments to reconcile net loss to net cash flows used in operating activities
Amortization of intangible assets		81,843			-
Changes in operating assets and liabilities
Accounts receivable		5,702			-
Inventories		38,693			-
Other assets		(80,020	)		-
Accounts payable		198,779			12,610
Accrued compensation		(53,825	)		-
Deferred revenue		4,465			-
Net cash flows used in operating activities		(406,332	)		(73,619	)
Cash Flows From Investing Activity
Purchases of intangible assets		(47,079	)		(5,000	)
Cash Flows From Financing Activity
Proceeds from issuance of debt		300,000			150,000
Net change in cash and cash equivalents		(153,411	)		71,381
Cash and Cash Equivalents, beginning of year		165,362			-
Cash and Cash Equivalents, end of year	$	11,951		$	71,381

See Notes to Financial Statements

6

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Note 1.    Nature of Operations and Significant Accounting Policies

Nature of Operations

Astero Bio Corporation ("the Company") was formed in late 2017, but did not have any operations until 2018. The Company is an innovator in the design, development and commercialization of novel automated thawing devices for cell and gene therapies. The Company’s ThawSTAR® Automated Cell Thawing Systems are designed to replace uncontrolled and highly variable manual methods, de-risking the therapeutic cell thawing process and optimizing cell efficacy. ThawSTAR® systems optimize cell thawing using a customizable algorithm for each unique cell therapy product and protocol. These systems, combined with the Company’s ultra-low temperature cold storage and transport solutions, advance the physical management of biologics by providing safe, controlled and scalable processing of temperature-sensitive samples and products.

Subsequent Acquisition

On April 1, 2019, the Company was acquired by BioLife Solutions, Inc. (“BioLife”). The shareholders of the Company sold all equity ownership of the Company to BioLife for cash consideration and the Company was merged into BioLife.

Basis of Presentation

These financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers highly liquid short-term investments with original maturities from the date of purchase of three months or less to be cash equivalents. From time to time, the Company has cash and cash equivalent balances in excess of federally insured limits.

Accounts Receivable

Accounts receivable are stated at their net realizable amount and consist of amounts due from customers. The Company uses the allowance method for recognizing bad debts. When an account is deemed uncollectible, it is written off against the allowance. The Company generally does not charge interest or require collateral for its receivables.

At March 31, 2019, amounts due from three customers comprised 47% of net accounts receivable.

7

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in first-out (FIFO) method. At March 31, 2019, all inventory is finished goods inventory.

Intangible Assets

Intangible assets consist of acquired patents and trademarks (see Note 2) and costs incurred in developing patents. The Company initially records intangible assets at their fair value on the date of acquisition for acquired intangibles or cost if related to patent development and then amortizes them using the straight-line method over the useful economic lives of the assets, ranging from 10 to 15 years.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount to the future net cash flows that the assets are expected to generate. If said assets are considered to be impaired, the impairment that would be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. There have been no such impairments of long-lived assets to date.

Revenue Recognition

On January 1, 2019, the Company adopted Financial Accounting Standards Board Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers and other related ASUs (FASB ASC Topic 606) using the modified retrospective approach applied to those contracts in effect as of January 1, 2019. Under this transition method, results for reporting periods beginning after January 1, 2019, are presented under the new standard, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historical accounting policies under FASB ASC Topic 605, Revenue Recognition. Adoption of the new standard did not have an impact on the amounts reported in the Company’s financial statements and there were no other significant changes impacting the timing or measurement of our revenue.

To determine revenue recognition for contractual arrangements that the Company determines are within the scope of FASB ASC Topic 606, the Company performs the following five steps: (i) identify each contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the relevant performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. The Company’s revenues are primarily generated from the sale of products. We generally recognize product revenue, including shipping and handling charges billed to customers, when we transfer control of our products to our customers as our contracts typically have a single performance obligation (transfer of control generally occurs upon either shipment of product or receipt by the customer, depending on the specific shipment terms). Shipping and handling costs are classified as part of cost of goods sold in the statements of operations.

The Company invoices and receive payments from our customers typically after the recognition of revenue, resulting in receivables from customers that are presented as accounts receivable on the balance sheet. Accounts receivable consist of short-term amounts due from our customers (generally 30 to 90 days) and are stated at the amount the Company expects to collect. Changes in accounts receivable are primarily due to the timing and magnitude of orders of products, the timing of when control of products is transferred to customers, and the timing of cash collections. Amounts received in advance of revenue being recognized from the Company’s contracts are considered contract liabilities and classified as deferred revenue in the balance sheet.

Revenue from four customers accounted for 65% of total revenue during the three months ended March 31, 2019.

8

Warranty Claims

The Company provides for a standard warranty on products sold. The Company records a liability for potential warranty claims for product malfunctions. The liability is management’s best estimate of potential costs related to future claims. Based on management’s determination of the likelihood of potential costs related to warranty claims on products sold through March 31, 2019, no warranty liability was determined to be necessary and none is recorded at March 31, 2019.

Research and Development

Costs incurred in research and development activities are generally expensed as incurred. 

Advertising

Advertising costs are expensed as incurred. Advertising expense for the three months ended March 31, 2019 and 2018, was $6,978 and $3,204, respectively, which is included in sales and marketing expenses in the statements of operations.

Stock-Based Compensation

The Company accounts for stock-based awards based on the fair value of the stock-based award on the date of grant. The fair value of the stock-based award is recognized to expense over the requisite service period (typically the vesting period) with forfeitures recognized when they occur.

Income Taxes

The Company accounts for income taxes under an asset and liability approach that requires recognition of deferred tax assets and liabilities for expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. The Company establishes a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be utilized against future taxable income. The Company evaluates its uncertain income tax positions and may record a liability for any unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in an income tax return. No liability has been recorded for uncertain tax positions or related interest or penalties at March 31, 2019.

9

Note 2. Intangible Assets

Intangible assets consist of the following at March 31, 2019:

				Remaining
				Useful Life
Acquired and other developed technology	$	4,219,941		14.0 years
Trademarks		536,117		9.0 years
		4,756,058
Accumulated amortization		(298,178	)
	$	4,457,880

Estimated future amortization expense for intangible assets is as follows for years ending December 31:

2019 (less than one year)	$	245,157
2020		327,000
2021		327,000
2022		327,000
2023		327,000
Thereafter		2,904,723
	$	4,457,880

Note 3. Note Payable to Shareholder

The Company has a promissory note for up to $500,000 with a shareholder bearing interest at 6%. Principal and accrued interest is payable at maturity which is April 30, 2019. The Company received $300,000 on the note all of which is outstanding at March 31, 2019. The note was repaid in full subsequent to March 31, 2019, in conjunction with the acquisition by BioLife discussed in Note 1.

Note 4. Stockholders' Equity

Founders’ Stock

In January 2018, the Company issued 900,000 shares of Founders Preferred Stock and 3,600,000 shares of common stock to the three founders of the Company in exchange for the assets contributed to the Company. The fair value of assets contributed and related shares of common and preferred stock were deemed to be immaterial and thus, no amounts are recorded in these financial statements for the issuance of stock.

10

Convertible Preferred Stock

Conversion. Shares of Founders, Series A, and Junior Series A-1 preferred stock are convertible into shares of common stock at the option of the holder at a ratio equal to the original issue price divided by the conversion price. The original issue price and the conversion price were initially the same for Founders, Series A, and Junior Series A-1 preferred stock at $1.20 per share. The conversion price is subject to adjustment as described in the Company’s Certificate of Incorporation. In addition, each share of preferred stock will automatically be converted into shares of common stock upon the earlier of (1) the closing of a public offering for common stock, as defined in the Company’s Certificate of Incorporation, or (2) upon the occurrence of a vote of the holders of a majority of the outstanding shares of preferred stock.

Redemption. Shares of Series A and Junior Series A-1 preferred stock are redeemable on or after July 1, 2023, at the option of the holders of the shares of Series A and Junior Series A-1 preferred stock. The redemption price will be equal to the greater of (1) the original issue price, plus any dividends accrued or declared but unpaid, of the preferred stock, or (2) the fair market value (determined in the manner set forth in the Company’s Certificate of Incorporation) of the preferred stock as of the date of the Company’s receipt of the written notice requesting redemption of the preferred stock. Such redemption shall be made in one lump sum payment within six months after receipt by the Company of the redemption request

Liquidation. In the event of liquidation, dissolution, or winding up of the Company, (i) Series A preferred stockholders are entitled to preferential payment equal to the amount of the original issue price, plus any dividends declared but unpaid, before any payment shall be made to the holders of Junior Series A-1 preferred stock, Founders preferred stock or common stock, and (ii) Junior Series A-1 preferred stockholders are entitled to preferential payment equal to the amount of the original issue price, plus any dividends declared but unpaid, before any payment shall be made to the holders of Founders preferred stock or common stock Upon liquidation and payment of the full amount to the Series A and Junior Series A-1 preferred stockholders, distribution of the remaining assets of the Company would be pro rata to the preferred and common shareholders based on an as-converted to common stock basis. If there are insufficient funds to pay the preferential amount to the holders of the Series A and Junior Series A-1 preferred stock in full, then amounts available will be distributed ratably to the holders of the Series A and Junior Series A-1 preferred stock in proportion to the preferential amount to which each holder is entitled.

Dividend Provisions. The holders of Series A preferred stock are entitled to receive annual dividends at the rate of 8% of the original issue price per share prior and in preference to any declaration or payment of any dividend on other preferred or common stock. The holders of Junior Series A-1 preferred stock are entitled to receive annual dividends at the rate of 8% of the original issue price per share prior and in preference to any declaration or payment of any dividend on Founders preferred stock or common stock. The right to receive dividends is cumulative and dividends shall accrue from day to day, whether or not declared, but are payable only when and if declared by the Board of Directors of the Company. As of December 31, 2018, no dividends had been declared or paid.

Voting Rights. The holder of each share of preferred stock is entitled to the number of votes equal to the number of shares of common stock into which each share of preferred stock can be converted. The holders of Series A and Junior Series A-1 preferred stock are entitled, voting together as a separate series, to elect three directors of the Board of Directors. The holders of common stock are entitled to elect two directors of the Board of Directors. The Series A and Junior Series A-1 preferred stockholders are entitled to certain protective provisions preventing the Company from performing certain actions without the preferred stockholders’ approval.

2018 Stock Plan

The Company has a 2018 Stock Plan ("the Plan") and reserved 475,000 shares of common stock for issuances thereunder. Under the terms of the Plan, the Board of Directors may grant incentive and nonqualified stock options, stock appreciation rights, restricted stock, and restricted stock units to employees, directors, and consultants of the Company. At March 31, 2019, the number of shares of common stock available for future grant under the Plan amounted to 60,001. No stock-based awards were granted during the three months ended March 31, 2019 and 2018.

11

Note 5. Income Taxes

For the three months ended March 31, 2019 and 2018, the Company did not have any taxable income; therefore, no income tax liability or expense has been recorded in these financial statements. The difference between the taxes at the statutory federal tax rate and no tax provision recorded is primarily due to the full valuation allowance against the Company's net deferred tax asset. The net deferred tax asset at March 31, 2019, amounts to approximately $315,000 and is primarily composed of a tax net operating loss carryforward. The Company has provided a full valuation allowance against the net deferred tax asset, which increased by approximately $115,000 during the three months ended March 31, 2019.

At March 31, 2019, the Company has a net operating loss carryforward of approximately $1.5 million which can be carried forward indefinitely. If not used, the net operating losses may be subject to limitation under Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under the regulations.

Note 6. Operating Lease

The Company leases its office facility under a lease agreement expiring June 30, 2019. The lease requires monthly payments of $7,378 resulting in future minimum rental payments for the remainder of the year ending December 31, 2019, of $22,134. Rent expense under this lease for the three months ended March 31, 2019, was $22,609, which is included in general and administrative expenses in the statement of operations (none during the three months ended March 31, 2019).

Note 7. Subsequent Events

Subsequent events have been evaluated through the date these financial statements were available to be issued, which was June 14, 2019. Subsequent to March 31, 2019, the Company was acquired by BioLife as discussed in Note 1.

12

EX-99.3

Exhibit 99.3

BioLife Solutions, Inc.

Unaudited Pro Forma Condensed Combined Balance Sheets

March 31, 2019

(In thousands)

	Historical BioLife			Historical Astero			Pro Forma Adjustments			Notes (1)	Pro Forma Combined
Assets
Current Assets
Cash and cash equivalents	$	31,824		$	12		$	(12,450	)	(a)	$	19,386
Accounts receivable, net		2,927			154			—				3,081
Inventories		4,060			176			280		(b)		4,516
Prepaid expenses and other current assets		346			100			—				446
Total current assets		39,157			442			(12,170	)			27,429
Property and equipment, net		1,367			—			—				1,367
Operating lease right-of-use assets		1,196			—			—				1,196
Intangible assets, net		—			4,458			92		(c)		4,550
Goodwill		—			—			9,507		(d)		9,507
Investment in SAVSU		6,317			—			—				6,317
Other assets		36			—			—				36
Total assets	$	48,073		$	4,900		$	(2,571	)		$	50,402
Liabilities and Stockholders Equity
Current liabilities
Accounts payable	$	1,264		$	234		$	—			$	1,498
Accrued expenses and other current liabilities		142			—			80		(e)		222
Accrued compensation		630			—			—				630
Deferred revenue		—			164			—				164
Contingent consideration		—			—			371		(g)		371
Notes payable		—			300			(300	)	(f)		—
Lease liability - operating, current portion		651			—			—				651
Lease liability – financing, current portion		14			—			—				14
Total current liabilities		2,701			698			151				3,550
Long-term lease liability - operating		980			—			—				980
Long-term lease liability - financing		13			—			—				13
Contingent consideration		—			—			1,560		(g)		1,560
Other long-term liabilities		13			—			—				13
Total liabilities		3,707			698			1,711				6,116
Shareholder’s equity
Preferred stock		—			6			(6	)	(f)		—
Common stock		19			4			(4	)	(f)		19
Additional paid-in capital		114,951			6,090			(6,090	)	(e),(f)		114,951
Accumulated deficit		(70,604	)		(1,898	)		1,818		(f)		(70,684	)
Total shareholder’s equity		44,366			4,202			(4,282	)			44,286
Total liabilities and shareholder’s equity	$	48,073		$	4,900		$	(2,571	)		$	50,402

(1)  See Note 4 to the accompanying notes to unaudited pro forma condensed combined financial statements

BioLife Solutions, Inc.

Unaudited Pro Forma Condensed Combined Statements of Operations

For the Three Months Ended March 31, 2019

(In thousands, except share and per share data)

	Historical BioLife			Historical Astero			Pro Forma Adjustments			Notes (1)	Pro Forma Combined
Product sales	$	5,770		$	210		$	—			$	5,980
Cost of product sales		1,647			103			(34	)	(h)		1,716
Gross profit		4,123			107			34				4,264
Operating expenses
Research and development		372			488			44		(h)		904
Sales and marketing		848			65			64		(h)		977
General and administrative		2,204			156			104		(c),(h)		2,464
Acquisition Costs		208			—			(208	)	(i)		—
Total operating expenses		3,632			709			4				4,345
Operating income (loss)		491			(602	)		30				(81	)
Other (expenses) income, net		(64	)		—			—				(64	)
Net income (loss)	$	427		$	(602	)		30			$	(145	)
Net income (loss) per share:
Basic	$	0.02									$	(0.01	)
Diluted	$	0.02									$	(0.01	)
Weighted average common shares outstanding:
Basic		18,648,397										18,648,397
Diluted		24,358,475										24,358,475

 (1)  See Note 4 to the accompanying notes to unaudited pro forma condensed combined financial statements

BioLife Solutions, Inc.

Unaudited Pro Forma Condensed Combined Statements of Operations

For the Twelve Months Ended December 31, 2018

(In thousands, except share and per share data)

	Historical BioLife			Historical Astero			Pro Forma Adjustments			Notes (1)	Pro Forma Combined
Product sales	$	19,742		$	608		$	—			$	20,350
Cost of product sales		6,217			351			(93	)	(g)		6,475
Gross profit		13,525			257			93				13,875
Operating expenses
Research and development		1,298			862			193		(g)		2,353
Sales and marketing		2,615			196			264		(g)		3,075
General and administrative		5,950			490			374		(c),(g)		6,814
Total operating expenses		9,863			1,548			831				12,242
Operating income (loss)		3,662			(1,291	)		(738	)			1,633
Other (expenses) income, net		(396	)		(5	)		—				(401	)
Net income (loss)		3,266			(1,296	)		(738	)			1,232
Less: Preferred stock dividends and impact of redemption		(339	)		—			—				(339	)
Net income (loss) attributable to common stockholders	$	2,927		$	(1,296	)	$	(738	)		$	893
Net income per share:
Basic	$	0.18									$	0.05
Diluted	$	0.14									$	0.04
Weighted average common shares outstanding:
Basic		16,256,465										16,256,465
Diluted		21,627,278										21,627,278

 (1)  See Note 4 to the accompanying notes to unaudited pro forma condensed combined financial statements 

BioLife Solutions, Inc.

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

1. Description of the Transaction

As previously disclosed, on March 13, 2019, BioLife Solutions, Inc. (the “Company”), entered into a Stock Purchase Agreement (the “ Purchase Agreement ”), by and among the Company, Astero Bio Corporation, a Delaware corporation (“ Astero ”), the stockholders of Astero set forth in Annex I of the Purchase Agreement (collectively, the “ Sellers” ), and Timothy C. Bush, in the capacity of the representative of the Sellers (the “ Seller Representative ”) in accordance with the Purchase Agreement, pursuant to which the Company agreed to purchase from the Sellers one hundred percent (100%) of the issued and outstanding capital shares or other equity interests of Astero (the “ Acquisition ”).

On April 1, 2019, the Company completed the Acquisition, and Astero became a wholly owned subsidiary of the Company. At the closing of the Acquisition, the Company paid to the Sellers an initial cash payment of $8,000,000 with such amount subject to adjustments for net working capital, net debt and net cash and transaction expenses. Pending the occurrence of certain events, the Company will pay to the Sellers (i) a deferred cash payment of $4,500,000 (subject to an escrow holdback) payable upon the earlier of Astero meeting certain product development milestones or one year after the Closing Date (the “ Product Milestone Payment ”), and potentially pay (ii) earnout payments in calendar years 2019, 2020 and 2021 of up to an aggregate of $3,500,000, which shall be payable to Sellers upon Astero achieving certain specified revenue targets in each year and a separate earnout payment of up to $5,000,000, which shall be payable to Sellers upon Astero achieving a cumulative revenue target over the three-year period from 2019 to 2021.

2. Basis of Presentation

The accompanying unaudited pro forma condensed combined financial statements combine the historical consolidated financial statements of Biolife and those of Astero after giving effect to the Acquisition, using the acquisition method of accounting in accordance with Accounting Standards Codification (ASC) 805, “Business Combinations”, and applying the assumptions and adjustments described in the accompanying notes. The accompanying unaudited pro forma condensed combined financial information was prepared in accordance with Article 11 of SEC Regulation S-X. The unaudited pro forma condensed combined statements of operations combine BioLife’s operating results for the three months ended March 31, 2019 and twelve months ended December 31, 2018, with the operating results of Astero for the three months ended March 31, 2019 and twelve months ended December 31, 2018, respectively. The unaudited pro forma condensed balance sheets combine BioLife’s balance sheet as of March 31, 2019 with the balance sheet of Astero as of March 31, 2019. The unaudited pro forma condensed combined statements of operations and balance sheets give effect to the Acquisition as if such acquisition had occurred at the beginning of the year. The historical consolidated financial statements have been adjusted in the pro forma condensed combined financial statements to give effect to pro forma events that are (1) directly attributable to the business combination, (2) factually supportable and (3) with respect to the pro forma condensed combined statements of operations, expected to have a continuing impact on the combined results following the business combination. The unaudited pro forma condensed combined financial information herein should be read in conjunction with the historical financial statements and the related notes thereto of BioLife which are presented in the Annual Report on Form 10-K for the year ended December 31, 2018. The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results that would have been achieved if the Acquisition had been consummated as of the beginning of the period presented, nor are they necessarily indicative of the future operating results of the combined company. No effect has been given in these pro forma financial statements for synergistic benefits that may be realized through the combination or costs that may be incurred in integrating operations.

3. Estimated consideration and preliminary purchase price allocation

BioLife accounted for the Acquisition as the purchase of a business under U.S. GAAP. Under the acquisition method of accounting, the assets of Astero will be recorded as of the acquisition date, at their fair values, and consolidated with BioLife. The preliminary fair value of the net tangible assets acquired is $0.3 million, the preliminary fair value of the identifiable intangibles is $4.6 million, and the preliminary residual goodwill is $9.5 million. The fair value estimates required critical estimates, including, but not limited to, future expected cash flows, included revenue and expense projections, discount rates, revenue volatility, and royalty rates. BioLife believes these estimates to be reasonable. Actual results may differ from these estimates.

Total consideration transferred (in thousands):

Cash consideration	$	12,521
Contingent consideration		1,931
Working capital adjustment		(71	)
Total consideration transferred	$	14,381

Transaction costs related to the acquisition are expensed as incurred and are not included in the calculation of consideration transferred.

The table below represents the estimated preliminary purchase price allocation to the net assets acquired based on their estimated fair values, as well as the associated estimated useful lives of the acquired intangible assets (amounts in thousands). Such amounts were estimated using the most recent financial statements from Astero as of March 31, 2019 (amounts in thousands).

Cash and cash equivalents	$	12
Accounts receivable, net		154
Inventory		456
Customer relationships		160
Tradenames		470
Developed technology		3,920
Goodwill		9,507
Other assets		100
Accounts Payable		(234	)
Other liabilities		(164	)
Fair value of net assets acquired	$	14,381

The fair value of Astero’s identifiable intangible assets and weighted average useful lives have been preliminary estimated as follows:

	Estimated Fair Value		Estimated Useful Life (Years)
Customer relationships	$	160			4
Tradenames		470			9
Acquired technologies		3,920		5	–	9
Total identifiable intangible assets	$	4,550

Fair value measurement methodologies used to calculate the value of any asset can be broadly classified into one of three approaches, referred to as the cost, market and income approaches. In any fair value measurement analysis, all three approaches must be considered, and the approach or approaches deemed most relevant will then be selected for use in the fair value measurement of that asset. The fair value of identifiable intangible assets was determined primarily using variations of the “income approach,” which is based on the present value of the future after-tax cash flows attributable to each identifiable intangible asset. The fair value of inventories was determined using both the “cost approach” and the “market approach”. 

Some of the more significant assumptions inherent in the development of intangible asset fair values, from the perspective of a market participant, include, but are not limited to (i) the amount and timing of projected future cash flows (including revenue and expenses), (ii) the discount rate selected to measure the risks inherent in the future cash flows, (iii) the assessment of the asset’s life cycle, and (iv) the competitive trends impacting the asset.

These preliminary estimates of fair value and estimated useful lives may be different from the amounts included in the final acquisition accounting, and the difference could have a material impact on the accompanying unaudited pro forma condensed combined financial statements.

4. Pro Forma Adjustments

This note should be read in conjunction with Notes 1 and 2. Adjustments included in the pro forma adjustments column of the pro forma condensed combined statement of operations and the pro forma condensed combined balance sheet include the following, as indicated in the “Notes” column thereto:

(a) An adjustment to cash of $12.5 million for the estimated non-contingent cash portion of the transaction price, including $4.5 million in escrow which will be released upon the earlier of a product milestone or one year.

(b) The adjustment represents the estimated step-up of Astero’s inventory by $280,000 from the carrying value. The fair value calculation is preliminary and subject to change. The step-up in inventory will increase cost of sales as inventory is sold. The increase is not reflected in the pro forma condensed combined statements of operations because it does not have a continuing impact.

(c) Reflects the preliminary fair value estimate of identifiable intangible assets to be acquired by Biolife of $4.6 million, with a continuing annual amortization impact of $417,000. The fair value calculation is preliminary and subject to change. The identifiable intangible assets include developed technology, customer relationships, and trade names. The fair value of the identifiable intangible assets is determined primarily using the “income approach,” which requires a forecast of all the expected future cash flows.

(d) Reflects adjustments to record goodwill related to the transaction.

(e)	Represents estimated accrued acquisition costs not yet incurred as of March 31, 2019.
(f)	Represents the elimination of the historical equity and debt of Astero as it was paid off as part of the purchase price.

(g) Represents fair value of contingent consideration. We assessed the payoff structure of our contingent consideration and determined the payoff was nonlinear and since it is related to revenue, carried non-diversifiable risk. As a result, the fair value of the contingent consideration was calculated using Black-Scholes option models. The Black-Scholes model requires assumptions including, volatility, credit risk, and time value discount rates. The fair value calculation is preliminary and subject to change.

(h)

Represents stock based compensation increase of $432,000 and salary increases of $188,000 for the twelve months ended December 31, 2018 and stock based compensation increase of $108,000 and salary increases of $47,000 for the three months ended March 31, 2019. The stock based compensation is related to time-based and performance-based restricted stock units granted and salary increases are related to two key executives retained from Astero. The fair value of the awards assumes a stock price of $17.61 and will be recognized over four years and two years, respectively. These amounts are reduced by $216,000 for the twelve months ended December 31, 2018 and $81,000 for the three months ended March 31, 2019 related to amortization expense of intangibles recorded in Astero’s standalone financial statements which are eliminated in the business combination financials. These expenses are further reduced in the twelve months ended December 31, 2018 by $83,000 of stock compensation expenses recorded in Astero’s standalone financial statements related to restricted stock grants that are no longer expensed due to the acquisition.

(i)

Represents the elimination of acquisition costs as these expenses will not have a continuing impact.