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Note 14 - Leases | 9 Months Ended
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Sep. 30, 2021
Notes to Financial Statements |
Lessee, Leases [Text Block] | 14. Leases Lessee arrangements We lease approximately 32,106 square feet in our Bothell, Washington headquarters. In November of 2020, the Company entered into an amendment to the lease agreement associated with this facility to extend the term of the lease until July 31, 2031. The amendment included a $2.6 million tenant allowance that the Company expects to receive as improvements are made between 2021 and 2023. This lease includes two options to extend the term of the lease, each of which is for an additional period of five years, with the first extension term commencing, if at all, on August 1, 2031, and the second extension term commencing, if at all, immediately following the expiration of the first extension term. In accordance with the amended lease agreement, our monthly base rent is approximately $70,000 as of September 30, 2021, with scheduled annual increases each August. We are also required to pay an amount equal to the Company’s proportionate share of certain taxes and operating expenses. We lease approximately 3,460 square feet in our Menlo Park, California location. The term of our lease continues until December 31, 2021. In accordance with the lease agreement, the monthly base rent is approximately $11,000 as of September 30, 2021. We are also required to pay an amount equal to the Company’s proportionate electrical expenses and common area maintenance fees. We lease approximately 9,932 square feet in our Albuquerque, New Mexico location. The term of our lease continues until December 31, 2021 with two options to extend the terms of the lease, each of which is for an additional period of three years, with the first extension term commencing, if at all, on December 1, 2021, and the second extension term commencing, if at all, on December 1, 2024. In accordance with the lease agreement, the monthly base rent is approximately $9,000 as of September 30, 2021, with an increase at the beginning of each extension term if the lease term is extended. We lease approximately 106,998 square feet in our Detroit, Michigan location under a month-to-month arrangement. The monthly base rent is approximately $35,000 as of September 30, 2021. We lease approximately 16,800 square feet in the United States. The term of the lease continues until February 28, 2026 and has no option to extend the term. In accordance with the lease agreement, the Company’s monthly base rent is approximately $14,000 as of September 30, 2021, with scheduled increases each March. We are also required to pay an amount equal to the Company’s proportionate share of certain taxes and operating expenses. We lease approximately 20,000 square feet in the United States. The term of the lease continues until March 31, 2024 and has no option to extend the term. In accordance with the lease agreement, the Company’s monthly base rent is approximately $14,000 as of September 30, 2021, with scheduled increases each April. We are also required to pay an amount equal to the Company’s proportionate share of certain taxes and operating expenses. We lease approximately 12,500 square feet in the United States. The term of the lease continues until January 31, 2023 and has no option to extend the term. In accordance with the lease agreement, the Company’s monthly base rent is approximately $8,000 as of September 30, 2021. We are also required to pay an amount equal to the Company’s proportionate share of certain taxes and operating expenses. We lease approximately 16,153 square feet in the United States. The term of the lease continues until June 30, 2024 and has no option to extend the term. In accordance with the amended lease agreement, the Company’s monthly base rent is approximately $13,000 as of September 30, 2021, with scheduled increases each July. We are also required to pay an amount equal to the Company’s proportionate share of certain taxes and operating expenses. We lease approximately 26,800 square feet in the United States. The term of the lease continues until November 1, 2031 with two options to extend the terms of the lease, each of which is for an additional period of five years, with the first extension term commencing, if at all, on November 1, 2031, and the second extension term commencing, if at all, on November 1, 2036. In accordance with the lease agreement, the monthly base rent is approximately $27,000 as of September 30, 2021, with scheduled increases each June, and includes provisions for rent increases of approximately 2.5% on the first day of the first month that follows the first anniversary of the beginning of the lease of each year and on each anniversary date thereafter. We lease approximately 47,533 square feet in the Netherlands. The term of our lease began on April 1, 2021 and continues until March 31, 2026, with options to extend the lease for an additional five years at each expiration date. In accordance with the lease agreement, the monthly base rent is approximately €29,000 (approximately $33,000 as of September 30, 2021) and includes provisions for rent increases tied to the Netherlands consumer price index in January of each year. We lease approximately 50,000 square feet in our Athens, Ohio location. The term of our lease continues until March 31, 2028 with a negotiable renewal between parties. In accordance with the amended lease agreement, our monthly base rent is approximately $23,000 as of September 30, 2021, with scheduled annual increases each April. We are also required to pay an amount equal to the Company’s proportionate share of certain taxes and operating expenses. We lease approximately 1,807 square feet in Columbus, Ohio under a month-to-month arrangement. The monthly base rent is approximately $4,000 as of September 30, 2021. We lease approximately 22,764 square feet in Nelsonville, Ohio. The term of the lease continues until May 31, 2022, with options to extend the lease for an additional year as of each expiration date. In accordance with the lease agreement, the Company’s monthly base rent is approximately $10,000 as of September 30, 2021. We lease approximately 11,415 square feet in Indianapolis, Indiana. The term of our lease continues until September 30, 2024 with an option to extend the term of the lease for an additional period of one year. In accordance with the lease agreement, our monthly base rent is approximately $13,000 as of September 30, 2021. We are also required to pay an amount equal to the Company’s proportionate share of certain operating expenses. Operating leases recorded on our Unaudited Condensed Consolidated Balance Sheets are primarily related to our Bothell, Washington headquarters space lease and our SciSafe space leases in the United States. We have not included extension options in our ROU assets or lease liabilities as we are not reasonably certain we will enter into the renewal options in their current terms. Our Detroit, Michigan; Menlo Park, California; Columbus, Ohio; and Nelsonville, Ohio leases are not recorded on our Unaudited Condensed Consolidated Balance Sheets as the term expires in one year or less. Our financing leases relate to research equipment, machinery, and other equipment. The table below presents certain information related to the weighted average discount rate and weighted average remaining lease term for the Company’s leases:
|  | September 30, |  |  | December 31, |
(In thousands) |  | 2021 |  |  | 2020 |
Weighted average discount rate - operating leases |  |  | 3.6 | % |  |  | 3.3 | %
Weighted average discount rate - finance leases |  |  | 6.1 | % |  |  | 5.7 | %
Weighted average remaining lease term in years - operating leases |  |  | 7.9 |  |  |  | 1.5 |
Weighted average remaining lease term in years - finance leases |  |  | 3.2 |  |  |  | 0.9 |
Operating cash paid for amounts included in the measurement of operating lease liabilities in the three and nine months ended September 30, 2021 was $702,000 and $2.0 million, respectively, and in the three and nine months ended September 30, 2020 was $219,000 and $653,000, respectively. The components of operating lease expense for the three and nine months ended September 30, 2021 are as follows:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
(In thousands) |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Operating lease costs |  | $ | 805 |  |  | $ | 170 |  |  | $ | 1,998 |  |  | $ | 509 |
Short-term lease costs |  |  | 498 |  |  |  | 59 |  |  |  | 1,158 |  |  |  | 176 |
Total operating lease costs |  |  | 1,303 |  |  |  | 229 |  |  |  | 3,156 |  |  |  | 685 |
Variable lease costs |  |  | 193 |  |  |  | - |  |  |  | 477 |  |  |  | - |
Total lease expense |  | $ | 1,496 |  |  | $ | 229 |  |  | $ | 3,633 |  |  | $ | 685 |
Maturities of our operating lease liabilities as of September 30, 2021 are as follows:
(In thousands) |  | Operating Leases |  |  | Financing Leases |
2021 (3 months remaining) |  | $ | 890 |  |  | $ | 43 |
2022 |  |  | 3,108 |  |  |  | 171 |
2023 |  |  | 2,760 |  |  |  | 171 |
2024 |  |  | 2,523 |  |  |  | 101 |
2025 |  |  | 2,245 |  |  |  | 37 |
Thereafter |  |  | 8,780 |  |  |  | 1 |
Total lease payments |  |  | 20,306 |  |  |  | 524 |
Less: interest |  |  | (2,611 | ) |  |  | (49 | )
Total present value of lease liabilities |  | $ | 17,695 |  |  | $ | 475 |
Lessor arrangements Rental arrangements The Company 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 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. Embedded leases BioLife enters into various customer service agreements (collectively, “Service Contracts”) with customers to provide biological and pharmaceutical storage services. In certain of these Service Contracts, the property, plant, and equipment or operating right-of-use assets used to store the customer product are used only for the benefit of one customer. This is primarily driven by the customer’s desire to ensure that sufficient storage capacity is available in a specific geographic location for a set period of time. BioLife has assessed its Service Contracts and concluded that certain of the contracts for the storage of customer products met the criteria to be considered a leasing arrangement (“Embedded Leases”), with BioLife as the lessor. The specific Service Contracts that met the criteria were those that provided a single customer with the ability to substantially direct the use of BioLife property, plant, and equipment or operating right-of-use assets. Under ASC 842, consistent with the previous guidance, BioLife will continue to recognize operating right-of-use asset embedded lessor arrangements on its Unaudited Condensed Consolidated Balance Sheets in operating right-of-use assets. None of the Embedded Leases identified by BioLife qualify as a sales-type or direct finance lease. None of the operating leases for which BioLife is the lessor include options for the lessee to purchase the underlying asset at the end of the lease term or residual value guarantees, nor are any such operating leases with related parties.

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