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Note 12 - Acquisitions | 12 Months Ended
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Dec. 31, 2021
Notes to Financial Statements |
Business Combination Disclosure [Text Block] |
12. | Acquisitions
Sexton acquisition General terms and effects On August 9, 2021, BioLife entered into an Agreement and Plan of Merger (the “Sexton Merger Agreement”) with BLFS Merger Sub, Inc., a Delaware corporation (“Sexton Merger Sub”), Fortis Advisors LLC, in its capacity as the representative of the stockholders of Sexton (the “Sexton Seller Representative”) and Sexton, a Delaware corporation. The acquisition strengthens BioLife’s offerings in the cell and gene therapy and broader biopharma markets. On September 1, 2021, the Company completed the merger of Sexton Merger Sub with and into Sexton and Sexton became a wholly-owned subsidiary of the Company (the “Sexton Merger”). As consideration for the Sexton Merger (the “Sexton Merger Consideration”), holders of common stock, preferred stock and options of Sexton, other than the Company (collectively, the “Sexton Participating Holders”), are entitled to receive an aggregate of 530,502 newly issued shares of the Company’s common stock, subject to certain post-closing adjustments, of which 477,452 shares of Common Stock were issued to the Sexton Participating Holders at the Closing, and 53,050 shares of Common Stock, or approximately 10% of the Merger consideration, were deposited into an escrow account for indemnification and post-closing purchase price adjustment purposes. Prior to the merger, the Company held preferred stock in Sexton, which was accounted for using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from observable process changes in orderly transactions for identical or similar investments of the same issuer. The Company accounted for the merger as a step acquisition, which required remeasurement of the Company’s existing ownership in Sexton to fair value prior to completing the acquisition method of accounting. Using step acquisition accounting, the Company increased the value of its existing equity interest to its fair value, resulting in the recognition of a non-cash gain of $6.5 million, which was included in the gain on acquisition of Sexton Biotechnologies, Inc. in the Consolidated Statements of Operations for the year ended December 31, 2021. The Company utilized a market-based valuation approach to determine the fair value of the existing equity interest based on the total merger consideration offered and the Company’s stock price at acquisition. Total consideration transferred (in thousands, except number of shares and stock price):
Merger consideration shares |  |  | 530,502 |
BioLife stock price (as of September 1, 2021) |  | $ | 60.50 |
Value of issued shares |  | $ | 32,095 |
plus: Fair value of BioLife’s existing investment in Sexton |  | $ | 7,951 |
less: Net working capital adjustment |  | $ | (118 | )
Merger Consideration |  | $ | 39,928 |
Transaction costs related to the acquisition are expensed as incurred and are not included in the calculation of consideration transferred. Fair value of net assets acquired Under the acquisition method of accounting, the assets acquired and liabilities assumed from Sexton were calculated as of the merger date, at their respective fair values, and consolidated with those of BioLife. The gross contractual accounts receivable acquired in the acquisition was $509,000. Of the acquired accounts receivable, $17,000 is estimated to be uncollectable. The fair value calculations required critical estimates, including, but not limited to, future expected cash flows, revenue and expense projections, discount rates, revenue volatility, and royalty rates. The table below represents the fair value of the net assets acquired and liabilities assumed, which were recorded as of the merger date (amounts in thousands).
Cash |  | $ | 1,516 |
Accounts receivable, net |  |  | 492 |
Inventory |  |  | 1,310 |
Prepaid expenses and other current assets |  |  | 670 |
Property, plant and equipment, net |  |  | 737 |
Operating lease right-of-use assets, net |  |  | 470 |
Developed technology |  |  | 4,132 |
Customer relationships |  |  | 2,276 |
Tradenames |  |  | 2,324 |
Non-compete agreements |  |  | 90 |
Goodwill |  |  | 28,470 |
Accounts payable |  |  | (291 | )
Lease liabilities, operating |  |  | (470 | )
Deferred tax liability |  |  | (1,482 | )
Other liabilities |  |  | (316 | )
Fair value of net assets acquired |  | $ | 39,928 |
We recorded a measurement period adjustment in the fourth quarter of the year ended December 31, 2021 of $198,000 to the fair value of goodwill and the deferred tax liability. This adjustment related to the tax attributes of the business combination. The fair value of Sexton’s identifiable intangible assets and useful lives are as follows (amounts in thousands, except years):
|  | Fair Value |  |  | Useful Life (Years) |
Developed technology |  | $ | 4,132 |  |  |  | 5 | - | 9 |
Customer relationships |  |  | 2,276 |  |  |  |  | 2 |  |
Tradenames |  |  | 2,324 |  |  |  |  | 11 |  |
Non-compete agreements |  |  | 90 |  |  |  |  | 1 |  |
Total identifiable intangible assets |  | $ | 8,822 |  |  |  |  |  |  |
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 estimated fair values of developed technology were estimated using a multi-period excess earnings approach. The estimated fair values of customer relationships and non-compete agreements were estimated using a “with and without” approach, comparing projected cash flows under scenarios assuming the customer relationships and non-compete agreements were and were not in place. The estimated fair value of the tradenames is based on the relief from royalty method, which estimates the value of the trade names based on the hypothetical royalty payments that are saved by owning the asset. 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. Acquired goodwill The goodwill of $28.5 million represents future economic benefits expected to arise from synergies from combining operations and commercial organizations to increase market presence and the extension of existing customer relationships. The goodwill recorded is not deductible for income tax purposes. Global Cooling acquisition General terms and effects On March 19, 2021, the Company entered into an Agreement and Plan of Merger (the “GCI Merger Agreement”) with BLFS Merger Subsidiary, Inc., a Delaware corporation (“GCI Merger Sub”), Global Cooling, a Delaware corporation and Albert Vierling and William Baumel, in their capacity as the representatives of the stockholders of GCI (collectively, the “GCI Seller Representative”). The acquisition strengthens BioLife’s offerings in the cell and gene therapy and broader biopharma markets. On May 3, 2021, pursuant to the GCI Merger Agreement, subject to the terms and conditions set forth therein, the transactions contemplated by the GCI Merger Agreement were consummated (the “GCI Closing”), GCI Merger Sub merged with and into GCI (the “GCI Merger” and, together with other transactions contemplated by the GCI Merger Agreement, the “GCI Transactions”), with GCI continuing as the surviving corporation in the GCI Merger and a wholly-owned subsidiary of the Company. In the GCI Merger, all of the issued and outstanding shares of capital stock of GCI immediately prior to the filing of the Certificate of Merger with the Secretary of State of the State of Delaware (other than those properly exercising any applicable dissenter’s rights under Delaware law) were converted into the right to receive the GCI Merger Consideration (as defined below). The Company paid the GCI Merger Consideration to the holders of common stock and preferred stock of GCI (collectively, the “GCI Stockholders”). Merger consideration The aggregate merger consideration paid pursuant to the GCI Merger Agreement to the GCI Stockholders was 6,646,870 newly issued shares of common stock, provided, however, that the GCI Merger Consideration otherwise payable to GCI Stockholders is subject to the withholding of the GCI Escrow Shares (as defined below) and is subject to reduction for indemnification obligations. The GCI Merger Consideration allocable to one GCI stockholder was reduced by 10,400 shares to satisfy an outstanding note receivable of $374,000. In accordance with ASC 805, the Company recognized the settlement of pre-existing relationships in the forms of cash deposits, trade receivables, and trade payables, which are included in the consideration transferred. The GCI Merger Consideration is not subject to any purchase price adjustments. Total consideration transferred (in thousands, except number of shares, stock price, and consideration percentage):
BioLife shares outstanding (as of March 19, 2021) |  |  | 33,401,359 |
Merger consideration percentage |  |  | 19.9 | %
Merger consideration shares |  |  | 6,646,870 |
less: Merger consideration shares withheld to satisfy outstanding GCI stockholder obligations to GCI |  |  | 10,400 |
Subtotal |  |  | 6,636,470 |
BioLife stock price (as of May 3, 2021) |  | $ | 35.07 |
Value of issued shares |  | $ | 232,741 |
plus: Settlement of BioLife prepaid deposits |  | $ | 2,152 |
plus: Net settlement of BioLife accounts receivable |  | $ | 16 |
Merger Consideration |  | $ | 234,909 |
Transaction costs related to the acquisition are expensed as incurred and are not included in the calculation of consideration transferred. Escrow shares At the GCI Closing, approximately nine percent (9%) of the GCI Merger Consideration (the “Escrow Shares”, along with any other dividends, distributions or other income on the GCI Escrow Shares, the “GCI Escrow Property”) otherwise issuable to the GCI Stockholders (allocated pro rata among the GCI Stockholders based on the GCI Merger Consideration otherwise issuable to them at the GCI Closing), was deposited into a segregated escrow account in accordance with an escrow agreement to be entered into in connection with the GCI Transactions (the “GCI Escrow Agreement”). The GCI Escrow Property will be held for a period of up to twenty-four (24) months after the GCI Closing as the sole and exclusive source of payment for any post-GCI Closing indemnification claims (other than fraud claims), unless earlier released in accordance with the terms of the GCI Escrow Agreement. Fair value of net assets acquired Under the acquisition method of accounting, the assets acquired and liabilities assumed from Global Cooling were calculated as of the merger date, at their respective fair values, and consolidated with those of BioLife. The gross contractual accounts receivable acquired in the acquisition was $7.1 million. Of the acquired accounts receivable, $53,000 was estimated to be uncollectable. The fair value calculations required critical estimates, including, but not limited to, future expected cash flows, revenue and expense projections, discount rates, revenue volatility, and royalty rates. The table below represents the fair value of the net assets acquired and liabilities assumed, which were recorded as of the merger date (amounts in thousands).
Cash |  | $ | 43 |
Accounts receivable, net |  |  | 7,076 |
Inventory |  |  | 15,547 |
Prepaid expenses and other current assets |  |  | 639 |
Property, plant and equipment, net |  |  | 3,512 |
Operating lease right-of-use assets, net |  |  | 1,741 |
Financing lease right-of-use assets, net |  |  | 114 |
Long-term deposits and other assets |  |  | 4 |
Developed technology |  |  | 18,140 |
Customer relationships |  |  | 7,020 |
Tradenames |  |  | 26,640 |
Non-compete agreements |  |  | 1,240 |
In-process research and development |  |  | 67,440 |
Goodwill |  |  | 137,822 |
Accounts payable |  |  | (9,837 | )
Line of credit |  |  | (4,231 | )
Lease liabilities, operating |  |  | (1,880 | )
Lease liabilities, financing |  |  | (114 | )
Long-term debt |  |  | (4,410 | )
Deferred tax liability |  |  | (24,133 | )
Other liabilities |  |  | (7,464 | )
Fair value of net assets acquired |  | $ | 234,909 |
We recorded a measurement period adjustment in the fourth quarter of the year ended December 31, 2021 of $607,000 to the fair value of goodwill and the deferred tax liability. This adjustment related to the tax attributes of the business combination. The fair value of Global Cooling’s identifiable intangible assets and useful lives are as follows (amounts in thousands, except years):
|  | Fair Value |  |  | Useful Life (Years) |
Developed technology |  | $ | 18,140 |  |  |  | 6 |
Customer relationships |  |  | 7,020 |  |  |  | 12 |
Tradenames |  |  | 26,640 |  |  |  | 15 |
Non-compete agreements |  |  | 1,240 |  |  |  | 4 |
In-process research and development |  |  | 67,440 |  |  |  | N/A |
Total identifiable intangible assets |  | $ | 120,480 |  |  |  |  |
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 values of developed technology and in-process research and development were estimated using a multi-period excess earnings approach. The fair values of customer relationships were estimated using the “distributor method”. The fair value of the tradenames is based on the relief from royalty method, which estimates the value of the trade names based on the hypothetical royalty payments that are saved by owning the asset. The fair values of non-compete agreements were estimated using a “with and without” approach, comparing projected cash flows under scenarios assuming the non-compete agreements were and were not in place. The fair value of inventory and property, plant and equipment were determined using 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. Acquired goodwill The goodwill of $137.8 million represents future economic benefits expected to arise from synergies from combining operations and commercial organizations to increase market presence and the extension of existing customer relationships. The goodwill recorded is not deductible for income tax purposes. SciSafe acquisition On September 18, 2020, BioLife entered into a Stock Purchase Agreement, by and among the Company, SciSafe Holdings, Inc., a Delaware corporation, and the stockholders of SciSafe (collectively, the “SciSafe Sellers”) in accordance with the Stock Purchase Agreement, pursuant to which the Company agreed to purchase from the SciSafe Sellers one hundred percent (100%) of the issued and outstanding capital shares or other equity interests of SciSafe (the “SciSafe Acquisition”). The SciSafe Acquisition closed October 1, 2020. The acquisition strengthens BioLife’s offerings in the cell and gene therapy and broader biopharma markets. Consideration transferred The SciSafe Acquisition was accounted for as a purchase of a business under FASB ASC Topic 805, Business Combinations. At the closing of the SciSafe Acquisition, the Company agreed to issue to the SciSafe Sellers 611,683 shares of common stock valued at $29.29 per share and a cash payment of $15 million, with $1.5 million held in escrow to account for adjustments for net working capital and as a security for, and a source of payment of, the Company’s indemnity rights. Pending the occurrence of certain events, the Company will issue to the SciSafe Sellers an additional 626,000 shares of common stock, which shall be issuable to SciSafe Sellers upon SciSafe achieving certain specified revenue targets in each year from 2021 to 2024. Under the acquisition method of accounting, the assets acquired and liabilities assumed from SciSafe were recorded as of the acquisition date, at their respective fair values, and consolidated with those of BioLife. The fair value calculations required critical estimates, including, but not limited to, future expected cash flows, revenue and expense projections, discount rates, revenue volatility, and royalty rates. Total consideration transferred (in thousands):
Cash consideration |  | $ | 15,000 |
Stock consideration |  |  | 17,916 |
Contingent consideration |  |  | 3,663 |
Working capital adjustment |  |  | (53 | )
Total consideration transferred |  | $ | 36,526 |
Fair value of net assets acquired The table below represents the purchase price allocation to the net assets acquired based on their fair values (amounts in thousands).
Cash |  | $ | 500 |
Accounts receivable, net |  |  | 945 |
Prepaid expenses and other current assets |  |  | 31 |
Property, plant and equipment, net |  |  | 3,400 |
Customer relationships |  |  | 7,420 |
Tradenames |  |  | 4,020 |
Non-compete agreements |  |  | 660 |
Goodwill |  |  | 24,943 |
Other assets |  |  | 1,547 |
Accounts payable |  |  | (885 | )
Deferred tax liability |  |  | (3,297 | )
Other liabilities |  |  | (2,758 | )
Fair value of net assets acquired |  | $ | 36,526 |
On September 30, 2020, the Company advanced SciSafe $500,000 in cash for working capital purposes. This cash and a payable due to the Company were both assumed in the transaction and are both reflected in the fair value of net assets acquired. The fair value of SciSafe’s identifiable intangible assets and useful lives are as follows (amounts in thousands except years):
|  | Fair Value |  |  | Useful Life (Years) |
Customer relationships |  | $ | 7,420 |  |  |  | 14 |
Tradenames |  |  | 4,020 |  |  |  | 19 |
Non-compete agreements |  |  | 660 |  |  |  | 4 |
Total identifiable intangible assets |  | $ | 12,100 |  |  |  |  |
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 values of customer relationships were estimated using a multi-period excess earnings approach. The fair value of the tradenames is based on the relief from royalty method which estimates the value of the trade names based on the hypothetical royalty payments that are saved by owning the asset. The fair values of non-compete agreements were estimated using a “with and without” approach, comparing projected cash flows under scenarios assuming the non-compete agreements were and were not in place. The fair value of property, plant and equipment was determined using the “market approach”. The fair value of the milestone contingent consideration was determined using a scenario analysis valuation method which incorporates BioLife’s assumptions with respect to the likelihood of achievement of certain revenue milestones, revenue volatility, credit risk, timing of earnout share issuances and a risk-adjusted discount rate to estimate the present value of the expected earnout share issuances. 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. Indemnification asset In 2020, the Company recognized a $130,000 liability for a non-income tax contingency related to the acquisition of SciSafe. At the date of acquisition, we recognized an indemnification asset at the same time and on the same basis as the recognized liability, to the extent that collection is reasonably assured, in accordance with ASC 805. When indemnified, subsequent changes in the indemnified item are offset by changes in the indemnification asset. We assess the realizability of the indemnification asset each reporting period. Changes in the principal portion of non-income tax contingencies, as well as changes in any related indemnification asset, are included in operating income. The indemnification asset is included within prepaid expenses and other current assets on the balance sheet. Acquired goodwill The goodwill of $24.9 million represents future economic benefits expected to arise from synergies from combining operations and commercial organizations to increase market presence and the extension of existing customer relationships. The goodwill recorded is not deductible for income tax purposes. Custom Biogenic Systems Acquisition On November 10, 2019, we entered into an Asset Purchase Agreement, by and among the Company, Arctic Solutions, Inc., a Delaware corporation and wholly-owned subsidiary of the Company, and CBS, a Michigan corporation, pursuant to which we agreed to purchase from CBS substantially all of CBS’s assets, properties and rights (the “CBS Acquisition”). CBS, a privately held company with operations located near Detroit, Michigan, designs and manufactures liquid nitrogen laboratory freezers and cryogenic equipment and also offers a related cloud-based monitoring system that continuously assesses biologic sample storage conditions and alerts equipment owners if a fault condition occurs. The CBS Acquisition closed on November 12, 2019. In connection with the CBS Acquisition, we paid to CBS (i) a base payment in the amount of $15.0 million, consisting of a cash payment of $11.0 million paid at the closing of the CBS Acquisition, less a cash holdback escrow of $550,000 to satisfy certain indemnification claims, and an aggregate number of shares of our common stock, with an aggregate fair value equal to $4.0 million, less a holdback escrow of shares of Common Stock with an aggregate value equal to $3.0 million to satisfy potential payments related to any product liability claims outstanding as of March 13, 2019, and (ii) potential earnout payments in calendar years 2020, 2021, 2022, 2023 and 2024 of up to an aggregate of, but not exceeding, $15.0 million payable to the sole shareholder of CBS upon achieving certain specified revenue targets in each year for certain product lines. The revenue targets set for 2020 and 2021 were not met and no amounts were paid or are considered payable for the earnouts related to those years. The CBS Acquisition was accounted for as a purchase of a business under FASB ASC Topic 805, Business Combinations. Under the acquisition method of accounting, the acquired assets and liabilities assumed from CBS were recorded as of the acquisition date, at their fair values, and consolidated with BioLife. The fair value estimates required critical estimates, including, but not limited to, future expected cash flows, revenue and expense projections, discount rates, revenue volatility, and royalty rates. Total consideration transferred (in thousands):
Cash consideration |  | $ | 11,000 |
Stock consideration |  |  | 4,000 |
Contingent consideration |  |  | 856 |
Total consideration transferred |  | $ | 15,856 |
Fair Value of Net Assets Acquired The table below represents the purchase price allocation to the net assets acquired based on their fair values (amounts in thousands).
Accounts receivable, net |  | $ | 1,044 |
Inventory |  |  | 3,232 |
Prepaid expenses and other current assets |  |  | 29 |
Property, plant and equipment, net |  |  | 3,615 |
Customer relationships |  |  | 560 |
Tradenames |  |  | 800 |
Developed technology |  |  | 5,430 |
Goodwill |  |  | 2,954 |
Accounts Payable |  |  | (1,197 | )
Other liabilities |  |  | (611 | )
Fair value of net assets acquired |  | $ | 15,856 |
The fair value of CBS’s identifiable intangible assets and weighted average useful lives are as follows (amounts in thousands except years):
|  | Fair Value |  |  | Useful Life (Years) |
Customer relationships |  | $ | 560 |  |  |  | 6 |
Tradenames |  |  | 800 |  |  |  | 6 |
Developed technology |  |  | 5,430 |  |  |  | 9 |
Total identifiable intangible assets |  | $ | 6,790 |  |  |  |  |
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 and the fair value of property, plant and equipment was determined using the cost and 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. Some of the more significant assumptions inherent in valuing the contingent consideration, include, but are not limited to (i) the amount and timing of projected future revenue, (ii) the volatility rate selected to measure the risks inherent in the revenue, and (iii) risk free interest rate. Acquired Goodwill The goodwill of $3.0 million represents future economic benefits expected to arise from synergies from combining operations and commercial organizations to increase market presence and the extension of existing customer relationships. All of the goodwill recorded is deductible for income tax purposes. SAVSU Acquisition On August 8, 2019, we closed the acquisition of SAVSU pursuant to a Share Exchange Agreement. Pursuant to the Share Exchange Agreement, SAVSU Origin, LLC agreed to transfer to us and we agreed to acquire from the seller 8,616 shares of common stock of SAVSU, representing the remaining 56% of the outstanding shares of SAVSU that we did not previously own, in exchange for 1,100,000 shares of BioLife common stock. As a result of the acquisition, SAVSU became a wholly-owned subsidiary on August 8, 2019, the acquisition date. Consideration transferred The SAVSU acquisition was accounted for as a purchase of a business under FASB ASC Topic 805, Business Combinations. The acquisition of 56% of SAVSU was funded through a transfer of 1,100,000 shares of BioLife common stock, which had a fair value of $18.12 per share or $19.9 million at time of closing. The total value of 100% of SAVSU consisting of the fair value of the stock issued and the fair value of our existing investment in SAVSU was $35.8 million at time of closing. Prior to the acquisition, we accounted for our investment of SAVSU using the equity method of accounting which resulted in a recorded book value of $5.8 million at the acquisition date. We remeasured to fair value the equity interest in SAVSU held immediately before the business combination. The fair value of our equity interest was determined to be $15.9 million on our existing 44% ownership based on the fair value of shares transferred at the time of acquisition for the 56% we did not previously own. As a result, we recorded a non-operating gain of $10.1 million. Under the acquisition method of accounting, the assets acquired and liabilities assumed from SAVSU were recorded as of the acquisition date, at their respective fair values, and consolidated with those of BioLife. The fair value estimates required critical estimates, including, but not limited to, future expected cash flows, revenue and expense projections, discount rates, revenue volatility, and royalty rates. Total consideration paid for the acquisition of SAVSU is as follows (amounts in thousands):
Stock consideration for 55.6% equity interest purchased |  | $ | 19,932 |
This stock consideration plus the fair value of our existing equity investment in SAVSU of $15.9 million results in the total purchase price for accounting purposes of $35.8 million. Fair Value of Net Assets Acquired The table below represents the purchase price allocation to the net assets acquired based on their fair values (amounts in thousands).
Cash and cash equivalents |  | $ | 1,251 |
Accounts receivable, net |  |  | 753 |
Prepaid expenses and other current assets |  |  | 19 |
Property, plant and equipment, net |  |  | 546 |
Operating right-of-use asset |  |  | 233 |
Assets held for lease |  |  | 2,441 |
Customer relationships |  |  | 80 |
Tradenames |  |  | 1,320 |
Developed technology |  |  | 10,750 |
Goodwill |  |  | 21,037 |
Accounts Payable and accrued expenses |  |  | (807 | )
Deferred tax liabilities |  |  | (1,541 | )
Other liabilities |  |  | (232 | )
Fair value of net assets acquired |  | $ | 35,850 |
The fair value of SAVSU’s identifiable intangible assets and useful lives are as follows (amounts in thousands except years):
|  | Fair Value |  | Useful Life (Years) |
Customer relationships |  | $ | 80 |  |  | 6 |  |
Tradenames |  |  | 1,320 |  |  | 9 |  |
Developed technology |  |  | 10,750 |  | 7 | - | 8 |
Total identifiable intangible assets |  | $ | 12,150 |  |  |  |  |
Astero Acquisition On April 1, 2019, BioLife completed the acquisition of all the outstanding shares of Astero. Astero’s ThawSTAR product line is comprised of a family of automated thawing devices for frozen cell and gene therapies packaged in cryovials and cryobags. The products improve the quality of administration of high-value, temperature-sensitive biologic therapies to patients by standardizing the thawing process and reducing the risks of contamination and overheating, which are inherent with the use of traditional water baths. In connection with the acquisition, the Company paid (i) a base payment in the amount of $12.5 million consisting of an initial cash payment of $8.0 million at the closing of the transactions, subject to adjustment for working capital, net debt and transaction expenses, and a deferred cash payment that was paid into escrow and subsequently paid to Astero of $4.5 million which was payable upon the earlier of Astero meeting certain product development milestones or one year after the date of the Closing and (ii) earnout payments in calendar years 2019, 2020 and 2021 of up to an aggregate of $3.5 million, was payable upon Astero achieving certain specified revenue targets in each year and a separate earnout payment of $5.0 million for calendar year 2021, which was payable upon Astero achieving a cumulative revenue target over the three-year period from 2019 to 2021. In the second quarter of 2020 we paid $483,000 for the earnout related to 2019 revenues. Revenue targets for 2020, 2021, and the cumulative period from 2019 to 2021 were not met and no amounts were paid or are considered payable for the earnouts related to those years. Consideration transferred The Astero acquisition was accounted for as a purchase of a business under FASB ASC Topic 805, Business Combinations. Under the acquisition method of accounting, the assets acquired and liabilities assumed from Astero were recorded as of the acquisition date, at their respective fair values, and consolidated with those of BioLife. The fair value estimates required critical estimates, including, but not limited to, future expected cash flows, revenue and expense projections, discount rates, revenue volatility, and royalty rates. Total consideration recorded for the acquisition of Astero is as follows (amounts in thousands):
Cash consideration |  | $ | 12,521 |
Contingent consideration |  |  | 1,491 |
Working capital adjustment |  |  | (71 | )
Total consideration transferred |  | $ | 13,941 |
Fair Value of Net Assets Acquired The table below represents the purchase price allocation to the net assets acquired based on their fair values (amounts in thousands).
Cash and cash equivalents |  | $ | 11 |
Accounts receivable, net |  |  | 154 |
Inventory |  |  | 456 |
Customer relationships |  |  | 160 |
Tradenames |  |  | 470 |
Developed technology |  |  | 2,840 |
In-process research and development |  |  | 650 |
Goodwill |  |  | 9,515 |
Other assets |  |  | 99 |
Accounts Payable |  |  | (250 | )
Other liabilities |  |  | (164 | )
Fair value of net assets acquired |  | $ | 13,941 |
The fair value of Astero’s identifiable intangible assets and useful lives are as follows (amounts in thousands except years):
|  | Fair Value |  | Useful Life (Years) |
Customer relationships |  | $ | 160 |  |  | 4 |  |
Tradenames |  |  | 470 |  |  | 9 |  |
Developed technology |  |  | 2,840 |  | 5 | - | 9 |
In-process research and development |  |  | 650 |  |  | N/A |  |
Total identifiable intangible assets |  | $ | 4,120 |  |  |  |  |
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 by third-party appraisal 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. Some of the more significant assumptions inherent in valuing the contingent consideration, include, but are not limited to (i) the amount and timing of projected future revenue, (ii) the volatility rate selected to measure the risks inherent in the revenue, and (iii) risk free interest rate. Acquired Goodwill The goodwill of $9.5 million represents future economic benefits expected to arise from synergies from combining operations and commercial organizations to increase market presence and the extension of existing customer relationships. All but $1.1 million of the goodwill recorded is not deductible for income tax purposes. Revenue, net income and pro forma presentation The Company recorded revenue from Sexton of $1.8 million and a net loss of $1.0 million from September 1, 2021, the date of acquisition, to December 31, 2021. The Company recorded revenue from Global Cooling of $39.1 million and a net loss of $19.6 million from May 3, 2021, the date of acquisition, to December 31, 2021. The Company recorded revenue from SciSafe of $1.8 million and a net loss of $416,000 from October 1, 2020, the date of acquisition, to December 31, 2020. The Company recorded revenue from CBS of $2.1 million and net income of $187,000 from November 12, 2019, the date of acquisition, to December 31, 2019. The Company recorded revenue from SAVSU of $692,000 and a net loss of $1.7 million from August 8, 2019, the date of acquisition, to December 31, 2019. The Company recorded revenue from Astero of $1.2 million and a net loss of $1.5 million from April 1, 2019, the date of acquisition, to December 31, 2019. The Company has included the operating results of the acquisitions in its Unaudited Condensed Consolidated Statements of Operations since their respective acquisition date. The following unaudited pro forma financial information presents the combined results of operations of Sexton as if the acquisition had occurred on January 1, 2020 after giving effect to certain pro forma adjustments. These pro forma adjustments include intangible amortization, stock-based compensation expense and salary expense related to a key employee, and the income tax effect of the adjustments made:
|  | 2021 |  |  | 2020 |
(In thousands) |  | (unaudited) |  |  | (unaudited) |
Total revenue |  | $ | 122,494 |  |  | $ | 50,856 |
Net (loss) income |  | $ | (9,860 | ) |  | $ | (1,028 | )
The following unaudited pro forma financial information presents the combined results of operations of Global Cooling as if the acquisition had occurred on January 1, 2020 after giving effect to certain pro forma adjustments. These pro forma adjustments include intangible amortization, amortization of increased inventory basis, depreciation expense, lease expense, transaction costs, interest expense, stock-based compensation expense and salary expense related to a key employee, and the income tax effect of the adjustments made:
|  | 2021 |  |  | 2020 |
(In thousands) |  | (unaudited) |  |  | (unaudited) |
Total revenue |  | $ | 143,732 |  |  | $ | 87,370 |
Net income (loss) |  | $ | (16,375 | ) |  | $ | 501 |
The following unaudited pro forma financial information presents the combined results of operations of SciSafe as if the acquisition had occurred on January 1, 2019 after giving effect to certain pro forma adjustments. These pro forma adjustments include intangible amortization, depreciation expense, stock-based compensation expense, and the income tax effect of the adjustments made:
|  | 2020 |  |  | 2019 |
(In thousands) |  | (unaudited) |  |  | (unaudited) |
Total revenue |  | $ | 52,613 |  |  | $ | 43,221 |
Net income (loss) |  | $ | 1,798 |  |  | $ | (4,528 | )
The following unaudited pro forma financial information presents the combined results of operations of CBS as if the acquisition had occurred on January 1, 2018 after giving effect to certain pro forma adjustments. These pro forma adjustments include amortization expense on the acquired identifiable intangible assets, adjustments to stock-based compensation expense for equity compensation issued to employees and the income tax effect of the adjustments made:
|  | 2019 |
(In thousands) |  | (unaudited) |
Total revenue |  | $ | 37,001 |
Net income (loss) |  | $ | (493 | )
The following unaudited pro forma financial information presents the combined results of operations of SAVSU as if the acquisition had occurred on January 1, 2018 after giving effect to certain pro forma adjustments. These pro forma adjustments include amortization expense on the acquired identifiable intangible assets, adjustments to stock-based compensation expense for equity compensation issued to employees and the income tax effect of the adjustments made:
|  | 2019 |
(In thousands) |  | (unaudited) |
Total revenue |  | $ | 28,824 |
Net income (loss) |  | $ | (1,518 | )
The following unaudited pro forma financial information presents the combined results of operations of Astero as if the acquisition had occurred on January 1, 2018 after giving effect to certain pro forma adjustments. These pro forma adjustments include amortization expense on the acquired identifiable intangible assets, adjustments to stock-based compensation expense for equity compensation issued to employees and the income tax effect of the adjustments made:
|  | 2019 |
(In thousands) |  | (unaudited) |
Total revenue |  | $ | 28,745 |
Net income (loss) |  | $ | (183 | )

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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