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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Use of Estimates, Policy [Policy Text Block]

Use of estimates

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

Significant estimates and assumptions by management affect the Company’s allowance for doubtful accounts, the net realizable value of inventory, fair value of warrant liability, valuation of market based awards, valuations and purchase price allocations related to investments and business combinations, expected future cash flows including growth rates, discount rates, terminal values and other assumptions and estimates used to evaluate the recoverability of long-lived assets, estimated fair values of intangible assets and goodwill, amortization methods and periods, certain accrued expenses, share-based compensation, contingent consideration from business combinations, tax reserves and recoverability of the Company’s net deferred tax assets, and related valuation allowance.

The Company regularly assesses these estimates, however, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances.

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Astero Bio Corporation (“Astero” or “ThawStar” acquired on

April 1, 2019),

SAVSU Technologies, Inc. (“SAVSU” acquired on

August 8, 2019),

and Arctic Solutions, Inc. dba Custom Biogenic Systems (“CBS” acquired on

November 12, 2019).

All significant intercompany accounts and transactions have been eliminated in consolidation.

The Company operates and manages its business as

one

reportable and operating segment, which is the business of bioproduction tools. The Company’s Chief Executive Officer and Chief Financial and Operating Officer, who are the chief operating decision makers, review financial information on an aggregate basis for purposes of allocating and evaluating financial performance. All long-lived assets are maintained in the United States of America.

Liquidity and Capital Resources, Policy [Policy Text Block]

Liquidity and capital resources

As of

December 31, 2019,

we had

$6.4

million in cash and cash equivalents, compared to

$30.7

million at

December 31, 2018.

The reduction in cash is primarily due to the cash payments associated with the

2019

acquisitions of Astero and CBS. We acquired Astero on

April 1, 2019

for

$12.5

million in cash and contingent consideration of up to

$8.5

million (which payment requirement has

not

been triggered or otherwise paid to date). We anticipate paying

$484,000

for the earnout related to

2019

revenues of Astero in early

2020.

August 8, 2019,

we acquired SAVSU for

1,100,000

shares of common stock. On

November 12, 2019,

we acquired CBS for

$11.0

million in cash,

$4.0

million in shares of our common stock, and up to

$15.0

million in contingent consideration payable in cash or stock (which payment requirement has

not

been triggered or otherwise paid to date).

Based on our current expectations with respect to our future revenue and expenses, we believe that our current level of cash and cash equivalents will be sufficient to meet our liquidity needs for at least the next

months. However, if our revenues do

not

grow as expected, including as a result of the COVID-

pandemic, and if we are

not

able to manage expenses sufficiently, we

may

be required to obtain additional equity or debt financing if our cash resources are depleted. Further, the Company

may

choose to raise additional capital through a debt or equity financing in an attempt to mitigate the heightened level of business uncertainty caused by the COVID-

pandemic, or in order to pursue additional acquisition or strategic investment opportunities. Additional capital, if required,

may

not

be available on reasonable terms, if at all.

Revenue [Policy Text Block]

Revenue recognition

To determine revenue recognition for contractual arrangements that we determine are within the scope of Financial Accounting Standards Board (“FASB”) Topic

606,

“Revenue from Contracts with Customers”, we perform 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 our performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy the relevant performance obligation. We only apply the

five

-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. Our revenues are primarily generated from the sale of our biopreservation media, ThawStar, and freezer products. We generally recognize product revenue, including shipping and handling charges billed to customers, when we transfer control of our products to our customers (transfer of control generally occurs upon shipment of our product). Shipping and handling costs are classified as part of cost of product revenue in the statement of operations. We are

not

required to disclose the value of unsatisfied performance obligations as our contracts have a duration of

one

year or less.

The Company also generates revenue from the leasing of our evo cold chain systems, which are typically cloud-connected shippers with enabling cold chain cloud applications, to customers pursuant to rental arrangements entered into with the customer. Revenue from the rental of cold chain systems is

not

within the scope of FASB ASC Topic

606

as it is within the scope of FASB ASC Topic

842,

“Leases”. All customers leasing shippers currently do so under month-to-month rental arrangements. We account for these rental transactions as operating leases and record rental revenue on a straight-line basis over the rental term. These rental arrangements

may

contain both lease and non-lease components. We have elected to utilize the practical expedient to account for lease and non-lease components together as a single combined lease component as the timing and pattern of transfer are the same for the non-lease components and associated lease component and, the lease component, if accounted for separately, would be classified as an operating lease.

The following table presents revenues by product line:

	Year Ended December 31,
(In thousands)	2019		2018
Biopreservation media	$	23,358	$	19,742
Automated thaw		1,184		—
evo shippers		692		—
Freezers and accessories		2,137		—
Total revenue	$	27,371	$	19,742

Risk and Uncertainties, Policy [Policy Text Block]

Risks and Uncertainties

The Company evaluates its operations periodically to determine if any risks and uncertainties exist that could impact its operations in the near term. The Company does

not

believe that there are any significant risks which have

not

already been disclosed in the consolidated financial statements. A loss of certain suppliers could temporarily disrupt operations, although alternate sources of supply exist for these items. The Company has mitigated these risks by building finished good and raw material inventory from certain key suppliers. See Note

17:

“Subsequent Events” for more information regarding the impact of COVID-

19.

Earnings Per Share, Policy [Policy Text Block]

Earnings per share

The Company considers its unexercised warrants and unvested restricted shares, which contain non-forfeitable rights to dividends, participating securities, and includes such participating securities in its computation of earnings per share pursuant to the

two

-class method. Basic earnings per share for the

two

classes of stock (common stock and warrants) is calculated by dividing net income by the weighted average number of shares of common stock and warrants outstanding during the reporting period. Diluted earnings per share is calculated using the weighted average number of shares of common stock plus the potentially dilutive effect of common equivalent shares outstanding determined under both the

two

class method and the treasury stock method, whichever is more dilutive.

The following table presents computations of basic and diluted earnings per share under the

two

class method:

	Year Ended
	December 31,
(In thousands, except share and earnings per share data)	2019			2018 (restated)
Numerator:
Net loss attributable to BioLife Solutions	$	(1,657	)	$	(25,005	)
Less: Preferred stock dividends and accumulated deficit impact of preferred stock redemption		—			(339	)
Basic net loss attributable to common stockholders		(1,657	)		(25,344	)

Denominator:
Basic and diluted weighted average shares outstanding		19,460,299			16,256,465

Basic and diluted earnings per share attributable to common stockholders	$	(0.09	)	$	(1.56	)

The following table sets forth the number of shares excluded from the computation of diluted loss per share, as their inclusion would have been anti-dilutive:

	Year Ended
	December 31,
	2019		2018 (restated)
Stock options and restricted stock awards		2,564,456		2,819,306
Warrants		2,903,813		2,551,507
Total		5,520,495		5,370,813

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and cash equivalents

Cash equivalents consist primarily of interest-bearing money market accounts. We consider all highly liquid debt instruments purchased with an initial maturity of

three

months or less to be cash equivalents. We maintain cash balances that

may

exceed federally insured limits. We do

not

believe that this results in any significant credit risk.

Inventory, Policy [Policy Text Block]

Inventories

Inventories relate to the Company’s cell and gene therapy products. The Company values inventory at cost or, if lower, net realizable value, using the

first

-in,

first

-out method. The Company reviews its inventories at least quarterly and records a provision for excess and obsolete inventory based on its estimates of expected product revenue volume, production capacity and expiration dates of raw materials, work-in-process and finished products. The Company writes down inventory that has become obsolete, inventory that has a cost basis in excess of its expected net realizable value, and inventory in excess of expected requirements to cost of product revenue. A change in the estimated timing or amount of demand for the Company’s products could result in additional provisions for excess inventory quantities on hand. Any significant unanticipated changes in demand or unexpected quality failures could have a significant impact on the value of inventory and reported operating results. During all periods presented in the accompanying consolidated financial statements, there have been

material adjustments related to a revised estimate of inventory valuations. Work-in-process and finished products inventories consist of material, labor, outside testing costs and manufacturing overhead.

Accounts Receivable [Policy Text Block]

Accounts receivable

Accounts receivable consist of short-term amounts due from our customers (generally

days) and are stated at the amount we expect to collect. We establish an allowance for doubtful accounts based on our assessment of the collectability of specific customer accounts. Changes in accounts receivable are primarily due to the timing and magnitude of orders of our products, the timing of when control of our products is transferred to our customers and the timing of cash collections.

Accounts receivable are stated at principal amount, do

not

bear interest, and are generally unsecured. We provide an allowance for doubtful accounts based on an evaluation of customer account balances past due

ninety

days from the date of invoicing. Accounts considered uncollectible are charged against the established allowance.

Investment, Policy [Policy Text Block]

Investments

We periodically invest in securities of private companies to promote business and strategic objectives. These investments are measured and recorded as follows:

Non-marketable equity securities are equity securities without a readily determinable fair value. At

December 31, 2019

this investment is comprised of

$1.5

million in Series A Preferred Stock in Sexton BioTechnologies, Inc. (“Sexton”) This investment is measured and recorded using a measurement alternative that measures the securities at cost minus impairment, if any. The preferred stock is also convertible at our option into common stock at a price of

$0.33

per share.

As of

December 31, 2019,

management believes there are

indications of impairment for Sexton.

September

2019

the company invested

$1.0

million in a convertible note receivable of iVexSol, Inc. (“iVexSol”). The Company has made an irrevocable election to record this convertible note in its entirety at fair value utilizing the fair value option available under U.S. GAAP. The company believes that carrying this investment at fair value better portrays the economic substance of the investment. Under the fair value option, gains and losses on the convertible note are included in unrealized gains/(losses) on investments within net earnings each reporting period. Gains/(losses) related to this convertible note were

not

material for the year ended

December 31, 2019.

The fair value of the Note on the date of investment was determined to be equal to its principal amount. Interest income related to this Note is recorded separately from other changes in its fair value within interest income each period.

The following table represents the difference between the fair value and the unpaid principal balance of the convertible note as of

December 31, 2019:

Fair value as of December 31, 2019				Unpaid principal balance as of December 31, 2019				Fair value carry amount (over)/under
	$1,000,000				$1,000,000				$—

Equity Method Investments [Policy Text Block]

Equity Method Investments

Equity method investments at

December 31, 2018,

consist entirely of our investment in SAVSU. We accounted for our ownership in SAVSU using the equity method of accounting prior to our acquisition of the remaining ownership interest in SAVSU on

August 8, 2019.

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 period prior to acquisition,

January 1, 2019

through

August 7, 2019,

SAVSU’s net loss totaled

$1.7

million. For the year ended

December 31, 2018,

SAVSU’s net loss totaled

$1.9

million.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and equipment

Property and equipment are stated at cost and are depreciated using the straight-line method over estimated useful lives of

three

ten

years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives of the assets or the remaining lease term of the respective assets. Gains or losses on disposals of property and equipment are recorded within income from operations. Costs of repairs and maintenance are included as part of operating expenses unless they are incurred in relation to major improvements to existing property and equipment, at which time they are capitalized.

Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that their net book value

may

not

be recoverable. If the sum of the expected future cash flows (undiscounted and before interest) from the use of the assets is less than the net book value of the asset an impairment could exist and the amount of the impairment loss, if any, will generally be measured as the difference between the net book value of the assets and their estimated fair values. There were

impairment losses recognized during the years ended

December 31, 2019

and

2018.

Assets Held for Rent, Policy [Policy Text Block]

Assets held for rent

Assets held for rent are carried at cost less accumulated depreciation. These assets consist of evo shippers and related components in production shippers complete and ready to be deployed and placed in service upon a customer order, shippers in the process of being assembled, and components available to build shippers. When the shipper is sent to our customers, we depreciate the cost of the shippers over its estimated useful life of

three

years.

Our customers rent the shippers per a rental agreement. Each agreement provides for fixed monthly rent. Rental revenue and fees are recognized over the rental term on a straight-line basis. We retain the ownership of the shippers and the evo tracking software platform. At the end of the rental agreement, the customer returns the shipper to the company.

Assets held for rent are reviewed for impairment whenever events or changes in circumstances indicate that their net book value

may

not

impairment losses recognized during the years ended

December 31, 2019

and

2018.

Lessee, Leases [Policy Text Block]

Lease Accounting

February 2016,

the FASB issued Accounting Standards Update (“ASU”)

No.

2016

02,

Leases: ASC Topic

842,

“Leases” (“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 consolidated Statements of Operations. Lessor accounting is largely unchanged under ASU

2016

02.

We adopted ASU

2016

and related ASUs (collectively Accounting Standards Codification (“ASC”)

842

) effective

January 1, 2019

using 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 Topic

842,

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

842,

“Leases”

did

not

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

impact on cash flows.

Income Tax, Policy [Policy Text Block]

Income taxes

We account for income taxes using an asset and liability method which generally requires recognition of deferred tax assets and liabilities for the expected future tax effects of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are recognized for the future tax effects of differences between tax bases of assets and liabilities, and financial reporting amounts, based upon enacted tax laws and statutory rates applicable to the periods in which the differences are expected to affect taxable income. We evaluate the likelihood of realization of deferred tax assets and provide an allowance where, in management’s opinion, it is more likely than

not

that the asset will

not

be realized.

We determine any uncertain tax positions based on a determination of whether and how much of a tax benefit taken in the Company’s tax filings or positions is more likely than

not

to be sustained upon examination by the relevant income tax authorities.

Judgment is applied in the determination of the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. We have

not

recorded any liabilities for uncertain tax positions or any related interest and penalties. Our tax returns are open to audit for years ending

December

31,

2016

2019.

Advertising Cost [Policy Text Block]

Advertising

Advertising costs are expensed as incurred and totaled

$43,000

and

$30,000

for the years ended

December

31,

2019

and

2018,

respectively.

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

Concentrations of credit risk and business risk

In the years

2019

and

2018,

we derived approximately

15%

of our revenue from

one

customer and

29%

of our revenue from

two

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

The following table represents the Company’s total revenue by geographic area (based on the location of the customer):

	Year Ended December 31,
Revenue by customers’ geographic locations	2019			2018
United States		69	%		77	%
Canada		16	%		13	%
Europe, Middle East, Africa (EMEA)		14	%		8	%
Other		1	%		2	%
Total revenue		100	%		100	%

December

31,

2019,

two

customers accounted for

25%

of gross accounts receivable. At

December

31,

2018,

three

customers accounted for

71%

of gross accounts receivable.

other customers accounted for more than

10%

of our gross accounts receivable. In the years

2019

and

2018,

we derived approximately

74%

and

88%,

respectively, of our revenue from CryoStor products.

Research and Development Expense, Policy [Policy Text Block]

Research and development

Research and development costs are expensed as incurred.

Share-based Payment Arrangement [Policy Text Block]

Stock-based Compensation

We measure and record compensation expense using the applicable accounting guidance for share-based payments related to stock options, time-based restricted stock, and performance-based awards granted to our directors and employees. The fair value of stock options, including performance awards, without a market condition is determined by using the Black-Scholes option-pricing model. The fair value of restricted stock awards with a market condition is estimated, at the date of grant, using the Monte Carlo Simulation model. The Black-Scholes and Monte Carlo Simulation valuation models incorporate assumptions as to stock price volatility, the expected life of options or awards, a risk-free interest rate and dividend yield. In valuing our stock options, significant judgment is required in determining the expected volatility of our common stock and the expected life that individuals will hold their stock options prior to exercising. Expected volatility for stock options is based on the historical and implied volatility of our own common stock while the volatility for our restricted stock awards with a market condition is based on the historical volatility of our own stock and the stock of companies within our defined peer group. Further, our expected volatility

may

change in the future, which could substantially change the grant-date fair value of future awards and, ultimately, the expense we record. The fair value of restricted stock, including performance awards, without a market condition is estimated using the current market price of our common stock on the date of grant.

We expense stock-based compensation for stock options, restricted stock awards, and performance awards over the requisite service period. For awards with only a service condition, we expense stock-based compensation using the straight-line method over the requisite service period for the entire award. For awards with a market condition, we expense over the vesting period regardless of the value that the award recipients ultimately receive.

Business Combinations Policy [Policy Text Block]

Business Combinations

The Company accounts for business acquisitions using the acquisition method as required by FASB ASC Topic

805,

“Business Combinations”.

The Company’s identifiable assets acquired and liabilities, including identified intangible assets, 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. While the Company uses its best estimates and assumptions to value assets acquired and liabilities assumed as of the acquisition date, the estimates are inherently uncertain and subject to refinement.

Goodwill is calculated as the excess of the acquisition 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 and Intangible Assets, Goodwill, Policy [Policy Text Block]

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 FASB ASC Topic

350,

“Intangibles – Goodwill and Other”. 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

December 31, 2019,

management believes there are

indications of impairment.

Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]

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. Intangible assets and their related useful lives are reviewed at least annually to determine if any adverse conditions exist that would indicate the carrying value of these assets

may

not

be recoverable. More frequent impairment assessments are conducted if certain conditions exist, including a change in the competitive landscape, any internal decisions to pursue new or different technology strategies, a loss of a significant customer, or a significant change in the marketplace, including changes in the prices paid for the Company’s products or changes in the size of the market for the Company’s products. If impairment indicators are present, the Company determines whether the underlying intangible asset is recoverable through estimated future undiscounted cash flows. If the asset is

not

found to be recoverable, it is written down to the estimated fair value of the asset based on the sum of the future discounted cash flows expected to result from the use and disposition of the asset. If the estimate of an intangible asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. The Company continues to believe that its definitive-lived intangible assets are recoverable at

December 31, 2019.

Warrants, Policy [Policy Text Block]

ertain

arrants which have

eatures tha

may

Result in Cash Settlement

Warrants that include cash settlement features are recorded as liabilities at their estimated fair value at the date of issuance and are remeasured at fair value each reporting period with the increase or decrease in fair value recorded in the Consolidated Statements of Operations. The warrants are measured at estimated fair value using the Black Scholes valuation model, which is based, in part, upon inputs for which there is little or

observable market data, requiring the Company to develop its own assumptions. Inherent in this model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. We estimate the volatility of our common stock at the date of issuance, and at each subsequent reporting period, based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury

zero

-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on our historical rate, which we anticipate to remain at zero. The assumptions used in calculating the estimated fair value of the warrants represent our best estimates. However, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the warrant liability and the change in estimated fair value could be materially different. The following is our weighted average assumptions used in the Black Scholes calculations of the warrants:

	Year Ended December 31,
	2019			2018
Risk free interest rate		1.9	%		2.6	%
Expected dividend yield		0.0	%		0.0	%
Expected lives		1.7			2.8
Expected volatility		70.3	%		63.4	%

New Accounting Pronouncements, Policy [Policy Text Block]

Recent accounting pronouncements

August 2018,

the FASB issued ASU

2018

13,

“Fair Value Measurement (Topic

820

): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” ASU

2018

includes amendments that aim to improve the effectiveness of fair value measurement disclosures. The amendments in this guidance modify the disclosure requirements on fair value measurements based on the concepts in FASB Concepts Statement, “Conceptual Framework for Financial Reporting—Chapter

Notes to Financial Statements,” including the consideration of costs and benefits. The amendments become effective for the Company in the year ending

December 31, 2020

and early adoption is permitted. The Company will adopt this guidance in the

first

quarter of

2020

and expects there to be

material impact on its consolidated financial statements.

December 2019,

the FASB issued ASU

2019

12,

“Income Taxes (Topic

740

) – Simplifying the Accounting for Income Taxes.” ASU

2019

simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic

740,

including, but

not

limited to, the exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, the exceptions related to the recognition of a deferred tax liability related to an equity method investment and the exception to methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. ASU

2019

becomes effective for the Company in the year ended

December 31, 2021,

including interim periods. The Company is considering early adoption in

2020.

Due to the full valuation allowance on the Company’s net deferred tax assets, the Company is currently expecting

material impact from the adoption of ASU

2019

on its consolidated financial statements.

June 2016,

the FASB issued ASU

No.

2016

13,

“Financial Instruments – Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments.” ASU

2016

requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For Smaller Reporting Companies as defined by the SEC, ASU

2016

is effective for fiscal years beginning after

December 15, 2022,

including interim periods within those fiscal years. The Company is evaluating the impact of the guidance on its financial statements.

August 2018,

the FASB issued ASU

No.

2018

15,

“Intangibles—Goodwill and Other—Internal-Use Software (Subtopic

350

): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract”, which clarifies the accounting for implementation costs in cloud computing arrangements. ASU

2018

is effective for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years. The Company will adopt the standard prospectively on

January 1, 2020.

The Company does

not

expect the adoption of ASU

2018

to result in a material change to its financial statements.