Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, we have condensed or omitted certain information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments) necessary to fairly present our financial position, results of operations and cash flows. Our interim period operating results do

not

necessarily indicate the results that

may

be expected for any other interim period or for the full year. These consolidated financial statements and accompanying notes should be read in conjunction with the financial statements and notes thereto in our Annual Report on Form

-K for the year ended

December 31, 2018

on file with the SEC.

Changes in Significant Accounting Policies

The following significant accounting policies have been added or updated since our Annual Report on Form

-K for the year ended

December 31, 2018.

Business Combinations

The Company’s identifiable assets acquired and liabilities assumed in a business combination are recorded at their acquisition date fair values. The valuation requires management to make significant estimates and assumptions, especially with respect to long-lived and intangible assets. Critical estimates in valuing intangible assets include, but are

not

limited to:

●

future expected cash flows, including revenue and expense projections;

●

discount rates to determine the present value of recognized assets and liabilities and;

●

revenue volatility to determine contingent consideration using option pricing models

The Company’s estimates of fair value are based upon assumptions it believes to be reasonable, but that are inherently uncertain and unpredictable. Assumptions

may

be incomplete or inaccurate, and unanticipated events and circumstances

may

occur.

Goodwill is calculated as the excess of the purchase price over the fair value of net assets acquired, including the amount assigned to identifiable intangible assets. Acquisition-related costs, including advisory, legal, accounting, valuation, and other costs, are expensed in the periods in which these costs are incurred. The results of operations of an acquired business are included in the consolidated financial statements beginning at the acquisition date.

The Company estimates the acquisition date fair value of the acquisition-related contingent consideration using various valuation approaches, including option pricing models, as well as significant unobservable inputs, reflecting the Company’s assessment of the assumptions market participants would use to value these liabilities. The fair value of the contingent consideration is remeasured each reporting period, with any change in the value recorded as other income or expense.

During the measurement period, which

may

be up to

one

year from the acquisition date, any refinements made to the fair value of the assets acquired, liabilities assumed, or contingent consideration are recorded in the period in which the adjustments are recognized. Upon the conclusion of the measurement period or final determination of the fair value of the assets acquired, liabilities assumed, or contingent consideration, whichever comes first, any subsequent adjustments are recognized in the consolidated statements of operations.

Goodwill

Goodwill represents the excess of the purchase price over the net amount of identifiable assets acquired and liabilities assumed in a business combination measured at fair value. Goodwill is

not

amortized but is tested for impairment at least annually. The Company reviews goodwill for impairment annually at the end of its

fourth

fiscal quarter and whenever events or changes in circumstances indicate that the fair value of a reporting unit

may

be less than its carrying amount (a triggering event). The Company

first

assesses qualitative factors to determine whether it is more likely than

not

that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test described in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic

350.

The more likely than

not

threshold is defined as having a likelihood of more than

percent. If, after assessing the totality of events or circumstances, the Company determines that it is

not

more likely than

not

that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative goodwill impairment test is unnecessary and goodwill is considered to be unimpaired. However, if based on the qualitative assessment the Company concludes that it is more likely than

not

that the fair value of a reporting unit is less than its carrying amount, the Company will proceed with performing the quantitative goodwill impairment test. In performing the quantitative goodwill impairment test, the Company determines the fair value of each reporting unit and compares it to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is

not

impaired. If the carrying value of a reporting unit exceeds its fair value, the Company records an impairment loss equal to the difference. As of

June 30, 2019,

management believes there are

indications of impairment.

Intangible Assets

Intangible assets consist of developed technology, customer relationships, and tradenames and trademarks, resulting from the Company’s acquisitions. Intangible assets are recorded at fair value on the date of acquisition and amortized over their estimated useful lives on a straight-line basis.

Significant Accounting Policies Update

February 2016,

the FASB issued Accounting Standards Update (“ASU”)

No.

2016

02,

Leases: Topic

842

(“ASU

2016

02”

) that replaces existing lease guidance. The new standard is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. Under the new guidance, leases will continue to be classified as either finance or operating, with classification affecting the pattern of expense recognition in the Statements of Operations. Lessor accounting is largely unchanged under ASU

2016

02.

We adopted ASU

2016

and related ASUs (collectively ASC

842

) effective

January 1, 2019

using the additional transition option for the modified retrospective method and did

not

restate comparative periods. Consequently, periods before

January 1, 2019

will continue to be reported in accordance with the prior accounting guidance, ASC

840,

Leases. We elected the package of practical expedients, which permits us to retain prior conclusions about lease identification, lease classification and initial direct costs for leases that commenced before

January 1, 2019.

The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. We also elected the practical expedient to combine lease and non-lease components for all of our leases other than net lease real estate leases.

The adoption of this standard resulted in the recording of operating lease right-of-use assets of

$1.3

million and short-term and long-term lease liabilities of

$1.8

million as of

January 1, 2019.

The difference between right-of-use assets and lease liabilities relates to liabilities of

$0.5

million for deferred rent and lease incentives liabilities that were included on our Balance Sheet prior to adoption of ASC

842.

These amounts were eliminated at the time of adoption and are included in the lease liabilities. Adoption of ASC

842

did

not

have a material impact on the Company’s net earnings and had

impact on cash flows.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The consolidated financial statements for the

three

and

six

months ended

June 30, 2019

include the accounts of the Company and as of

April 1, 2019,

its wholly-owned subsidiary, Astero Bio Corporation. All intercompany balances and transactions have been eliminated in consolidation. The acquisition of Astero closed on

April 1, 2019

and thus the financial statements for the

three

and

six

months ended

June 30, 2018

and the balance sheet as of

December 31, 2018,

only include accounts of the Company.

Equity Method Investments [Policy Text Block]

Equity Method Investments

We account for our ownership in SAVSU Technologies, Inc. (“SAVSU”) using the equity method of accounting. This method states that if the investment provides us the ability to exercise significant influence, but

not

control, over the investee, we account for the investment under the equity method. Significant influence is generally deemed to exist if the Company’s ownership interest in the voting stock of the investee ranges between

20%

and

50%,

although other factors, such as representation on the investee’s board of directors, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investment is recorded at its initial carrying value in the consolidated balance sheet and is periodically adjusted for capital contributions, dividends received and our share of the investee’s earnings or losses together with other-than-temporary impairments which are recorded as a component of other income (expense), net in the consolidated statements of operations. For the

three

and

six

months ended

June 30, 2019,

SAVSU’s net loss totaled

$0.5

million and

$1.0

million, respectively which our ownership resulted in a

$0.2

million and

$0.4

million loss, respectively. For the

three

and

six

months ended

June 30, 2018,

SAVSU’s net loss totaled

$0.6

million and

$1.1

million, respectively, of which our ownership resulted in a

$0.2

million and

$0.3

million loss, respectively.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentrations of credit risk and business risk

In the

three

months ended

June 30, 2019,

we derived approximately

17%

of our product revenue from

one

customer and in the

six

months ended

June 30, 2019,

we derived approximately

20%

of our revenue from

one

customer. In the

three

months ended

June 30, 2018,

we derived approximately

38%

of our product revenue from

three

customers and in the

six

months ended

June 30, 2018,

we derived approximately

27%

of our revenue from

two

customers.

other customer accounted for more than

10%

of revenue in the

three

and

six

months ended

June 30, 2019

2018.

In the

three

months ended

June 30, 2019

and

2018,

we derived approximately

82%

and

87%,

of our revenue from CryoStor products, respectively. In each of the

six

months ended

June 30, 2019

and

2018,

we derived approximately

86%,

of our revenue from CryoStor products. At

June 30, 2019,

two

customers accounted for approximately

28%

of total gross accounts receivable. At

December 31, 2018,

three

customers accounted for approximately

71%

of total gross accounts receivable.

Revenue from customers located in Canada represented

17%

and

20%

and in all other foreign countries represented

12%

and

14%

of total revenue during the

three

and

six

months ended

June 30, 2019,

respectively. Revenue from customers located in Canada represented

11%

and

12%

and in all other foreign countries represented

11%

and

11%

of total revenue during the

three

and

six

months ended

June 30, 2018,

respectively. All revenue from foreign customers is denominated in United States dollars.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

There have been

new accounting pronouncements

not

yet effective that have significance, or potential significance, to our Financial Statements.