8-K/A - BLFS - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 7, 2021 (May 3, 2021)

BIOLIFE SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

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

3303 Monte Villa Parkway ,

Bothell , WA 98021

(Address of principal executive offices) (Zip Code)

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

N/A

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

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

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

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

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

Title of each class	Trading symbol	Name of exchange on which registered
Common Stock , $0.001 par value	BLFS	The Nasdaq Capital Market LLC

EXPLANATORY NOTE

This Form 8-K/A (this “Form 8-K/A”) to our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 7, 2021 (the “Original Form 8-K”) is being filed to amend Item 9.01 to the Original Form 8-K to include certain financial statements related to the acquisition by BioLife Solutions, Inc. (the “Company”) of one hundred percent (100%) of the issued and outstanding capital shares and other equity interests of Global Cooling, Inc. (“Global Cooling”) as reported on the Original Form 8-K. Except as set forth herein, no modifications have been made to the information contained in the Original Form 8-K.

Item 9.01	Financial Statements and Exhibits.
(a)	Financial Statements of Businesses Acquired.
---	---

The audited financial statements of Global Cooling as of and for the fiscal years ended December 31, 2020 and 2019 is filed as Exhibit 99.1 and is incorporated by reference herein.

The unaudited financial statements of Global Cooling as of and for the three months ended March 31, 2021 and 2020 is filed as Exhibit 99.2 and is incorporated by reference herein.

(b)	Pro Forma Financial Information.

The unaudited pro forma combined statement of operations of the Company relating to the acquisition of one hundred percent (100%) of the issued and outstanding capital shares and other equity interests of Global Cooling for the fiscal year ended December 31, 2020 and the statement of operations and balance sheet as of and for the three months ended March 31, 2021, are filed as Exhibit 99.3 and incorporated by reference herein.

(d)	Exhibits.
Exhibit No.	Description
---	---
23.1	Consent of Clark, Schaefer, Hackett & Co.
99.1	The audited financial statements of Global Cooling as of and for the fiscal years ended December 31, 2020 and 2019.
99.2	The unaudited financial statements of Global Cooling as of and for the three months ended March 31, 2021.
99.3	The unaudited pro forma combined statement of operations of the Company relating to the acquisition of one hundred percent (100%) of the issued and outstanding capital shares and other equity interests of Global Cooling for the fiscal year ended December 31, 2020 and the statement of operations and balance sheet as of and for the year ended December 31, 2020.
104	Cover Page Interactive Data File (formatted as Inline XBRL).

SIGNATURE

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

	BioLife Solutions, Inc.
Date: July 7, 2021	By:	/s/ Roderick de Greef
		Name: Roderick de Greef<br><br> <br>Title: Chief Financial and Chief Operating Officer

ex_261760.htm

Exhibit 23.1

Consent of Independent Auditor

BioLife Solutions, Inc.

Bothell, Washington

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-233912 and 333-222433) and on Form S-8 (Nos. 333-222437, 333-205101, and 333-189551) of BioLife Solutions, Inc. of our report dated April 13, 2021 relating to the consolidated financial statements of Global Cooling, Inc., which appear in this Current Report on Form 8-K/A of BioLife Solutions, Inc.

/s/ Clark, Schaefer, Hackett & Co.

Columbus, Ohio

July 7, 2021

ex_261761.htm

Exhibit 99.1

Global Cooling, Inc. and Subsidiary

Consolidated Financial Statements

December 31, 2020 and 2019

with Independent Auditors’ Report

TABLE OF CONTENTS

Independent Auditors’ Report	1
Consolidated Financial Statements:
Consolidated Balance Sheets	3 - 4
Consolidated Statements of Operations	5
Consolidated Statements of Stockholders’ Equity	6
Consolidated Statements of Cash Flows	7
Notes to the Consolidated Financial Statements	8 - 21

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Stockholders

of Global Cooling, Inc. and Subsidiary

Athens, Ohio

We have audited the accompanying consolidated financial statements of Global Cooling, Inc. (a Delaware Corporation) and Subsidiary (the Company), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

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

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

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Global Cooling, Inc. and Subsidiary as of December 31, 2020 and 2019, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

/s/ Clark, Schaefer, Hackett & Co.

Columbus, Ohio

April 13, 2021

Global Cooling, Inc. and Subsidiary

Consolidated Balance Sheets

December 31, 2020 and 2019

	2020
Assets
Current assets:
Cash and cash equivalents	$	237,705	3,197,164
Accounts receivable, trade, net		6,027,323	2,984,471
Receivables, other		65,424	-
Inventory, net		8,529,294	6,435,753
Prepaid expenses		212,667	198,329
Total current assets		15,072,413	12,815,717
Property and equipment:
Machinery		2,771,582	2,526,190
Furniture and equipment		555,276	631,360
Computers and equipment		683,591	776,164
Leasehold improvements		665,652	641,295
Construction in progress		394,290	149,389
		5,070,391	4,724,398
Less accumulated depreciation		1,504,688	2,081,259
Total property and equipment		3,565,703	2,643,139
Other assets:
Deposits		3,700	3,700
Other assets		3,496	4,260
Notes receivable - related party		374,000	374,000
Total other assets		381,196	381,960
Total assets	$	19,019,312	15,840,816

See notes to the consolidated financial statements.

Global Cooling, Inc. and Subsidiary

Consolidated Balance Sheets (continued)

December 31, 2020 and 2019

Liabilities and Stockholders' Equity
			2019
Current liabilities:
Line of credit	757,562			1,198,700
Accounts payable - trade	7,393,945			5,831,777
Customer advances	2,479,658			222,530
Accrued compensation	924,104			523,685
Other accrued expenses	3,560,091			688,446
Long-term debt, current portion	758,750			-
Deferred rent, current portion	-			11,745
Capital lease obligations, current portion	28,826			23,460
Total current liabilities	15,902,936			8,500,343
Long-term liabilities:
Deferred rent, less current portion	116,415			93,964
Capital lease obligations, less current portion	95,467			77,470
Convertible promissory notes payable	1,500,000			-
Long-term debt, less current portion	3,545,236			4,410,145
Total long-term liabilities	5,257,118			4,581,579
Stockholders' equity:
Preferred stock - Series A, 100,000 shares authorized and 83,030 and 82,406 outstanding, par value 40, with liquidation preferences of 4,947,008 and 4,689,564 at December 31, 2020 and 2019, respectively.	3,321,200			3,296,240
Preferred stock - Series B, 60,0000 shares authorized and 59,999 outstanding, par value .01, with liquidation preferences of 8,345,693 and 512,455 at December 31, 2020 and 2019, respectively.	600			600
Common stock - 600,000 shares authorized and 296,719 and 295,969 outstanding at December 31, 2020 and 2019, respectively, par .01	2,967			2,960
Additional paid-in-capital	22,165,623			21,408,435
Accumulated other comprehensive income, net of tax	(114,441	)		(122,833	)
Retained deficits	(27,789,316	)		(22,099,133	)
	(2,413,367	)		2,486,269
Non-controlling interest	272,625			272,625
Total stockholders' equity	(2,140,742	)		2,758,894
Total liabilities and stockholders' equity	19,019,312			15,840,816

All values are in US Dollars.

See notes to the consolidated financial statements.

Global Cooling, Inc. and Subsidiary

Consolidated Statements of Operations

Years Ended December 31, 2020 and 2019

	2020
Sales, net of discounts and allowances	$	39,282,868		35,209,161
Cost of sales		27,050,393		26,617,522
Gross profit		12,232,475		8,591,639
Litigation settlement		4,000,000		-
General and administrative expenses		14,705,958		13,263,623
		18,705,958		13,263,623
Loss from operations		(6,473,483	)	(4,671,984	)
Other income (expense):
Debt forgiveness		2,084,989		-
Ohio Bureau of Workers Compensation Dividends		40,360		-
Other income		15,120		-
Other expense		(13,976	)	-
Interest income		-		20,758
Interest expense		(598,254	)	(390,284	)
		1,528,239		(369,526	)
Loss before income taxes		(4,945,244	)	(5,041,510	)
Expense for income taxes		-		(1,238,592	)
Net loss		(4,945,244	)	(6,280,102	)
Other comprehensive loss -
Gain (loss) on foreign currency translation		8,392		(4,648	)
Total comprehensive loss	$	(4,936,852	)	(6,284,750	)

See notes to the consolidated financial statements.

Global Cooling, Inc. and Subsidiary

Consolidated Statements of Stockholders’ Equity

Years Ended December 31, 2020 and 2019

								Accumulated
					Additional			Other						Non-
	Preferred		Common		Paid-In			Comprehensive			Retained			Controlling
	Stock		Stock		Capital			Loss			Deficits			Interest		Total
Balance as of January 1, 2019	$	3,234,207		2,781		17,997,465			(118,185	)		(15,074,803	)		265,504		6,306,969
Stock-based compensation on options		-		-		88,175			-			-			-		88,175
Issuance of preferred stock		153		-		1,867,545			-			-			-		1,867,698
Stock options and warrant exercises		62,480		179		718,143			-			-			-		780,802
Accrued dividends on preferred stock		-		-		737,107			-			(744,228	)		7,121		-
Loss on foreign currency translation		-		-		-			(4,648	)		-			-		(4,648	)
Net loss		-		-		-			-			(6,280,102	)		-		(6,280,102	)
Balance as of December 31, 2019		3,296,840		2,960		21,408,435			(122,833	)		(22,099,133	)		272,625		2,758,894
Stock-based compensation on options		-		-		(26,819	)		-			-			-		(26,819	)
Stock options and warrant exercises		24,960		7		39,068			-			-			-		64,035
Accrued dividends on preferred stock		-		-		744,939			-			(744,939	)		-		-
Gain on foreign currency translation		-		-		-			8,392			-			-		8,392
Net loss		-		-		-			-			(4,945,244	)		-		(4,945,244	)
Balance as of December 31, 2020	$	3,321,800		2,967		22,165,623			(114,441	)		(27,789,316	)		272,625		(2,140,742	)

See notes to the consolidated financial statements.

Global Cooling, Inc. and Subsidiary

Consolidated Statements of Cash Flows

Years Ended December 31, 2020 and 2019

	2020
Cash flows from operating activities:
Net loss	$	(4,945,244	)	(6,280,102	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation		492,543		490,340
Debt forgiveness		(2,084,989	)
Change in deferred tax assets		-		1,238,592
Bad debt expense		10,639		7,862
Provision for obsolete inventory		-		22,639
Deferred rent		10,706		5,905
Stock-based compensation on options		(26,819	)	88,175
Amortization of debt cost		24,151		17,022
Effects of changes in operating assets and liabilities:
Accounts receivable		(3,053,491	)	1,745,499
Other receivable		(65,424	)	-
Inventory, net		(2,093,541	)	(2,576,418	)
Prepaid expenses		(14,338	)	(707	)
Accounts payable - trade		1,562,168		1,683,731
Other assets		764		(4,260	)
Customer advances		2,257,128		6,309
Other accrued expenses		2,871,645		(318,846	)
Accrued compensation		400,419		(114,905	)
Net cash flows from operating activities		(4,653,683	)	(3,989,164	)
Net cash flows from investing activities:
Purchase of property and equipment		(1,368,103	)	(1,211,462	)
Cash flows from financing activities:
Payments on capital lease obligations		(23,641	)	(14,587	)
Borrowings (payments) on line of credit		(571,448	)	(251,300	)
Proceeds from notes payable		-		1,750,000
Proceeds from payroll protection program loan and JobsOhio Loan		2,084,989		-
Proceeds from convertible notes payable		1,500,000		-
Payments of debt issuance cost		-		(32,794	)
Issuance of preferred stock		-		1,867,698
Stock options and warrant exercises		64,035		780,802
Net cash flows from financing activities		3,053,935		4,099,819
Foreign currency translation adjustment		8,392		(4,648	)
Decrease in cash		(2,959,459	)	(1,105,455	)
Cash and cash equivalents, beginning of year		3,197,164		4,302,619
Cash and cash equivalents, end of year	$	237,705		3,197,164

See notes to the consolidated financial statements.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The following accounting principles and practices of Global Cooling, Inc. and Subsidiary (collectively, the Company) are set forth to facilitate the understanding of data presented in the consolidated financial statements.

Nature of operations

Global Cooling, Inc. is engaged primarily in the manufacturing and retail sales of environmentally friendly, ultra-low temperature freezers, which are currently used worldwide by life science, pharmaceutical, biomedical/clinical, and biotechnology customers. The Company also provides parts, maintenance, and repair services for the products they sell.

Global Cooling B.V. (GCBV), a Dutch Company, is a licensing company. GCBV licenses various intellectual properties to manufacturers worldwide. In 2008, Global Cooling, Inc. became a majority owner in GCBV.

Principles of consolidation

The consolidated financial statements include the accounts of Global Cooling, Inc. and GCBV. All inter-company balances and transactions have been eliminated in consolidation.

Basis of accounting

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

Revenue recognition

The Company derives its revenues primarily from the sale of manufactured freezers. Revenues are recognized when control of these products are transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products and services. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Shipping and freight cost charged to customers are reported within revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. The Company does not have any significant financing components as payment is received at or shortly after the point of sale. Costs incurred to obtain a contract will be expensed as incurred when the amortization period is less than a year.

Revenue from performance obligations satisfied at a point in time consists of the sale of manufactured freezers. For performance obligations related to the sale of manufactured freezers, control transfers to the customer at a point in time. The Company’s principal terms of sale are FOB Shipping Point and FOB Destination and the Company transfers control and records revenue for product sales either upon shipment or delivery to the customer, respectively.

The nature of the Company’s business gives rise to variable consideration, including allowances and returns that generally decrease the transaction price which reduces revenue. These variable amounts are generally credited to the customer, based on product returns or price concessions, and based upon the most likely amount that is expected to be earned. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration are made based upon historical experience and known trends.

Use of estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Shipping and freight cost

Shipping and freight costs incurred by the Company are included in cost of goods sold.

Cash and cash equivalents

The Company considers all highly liquid investments purchased with maturities of three months or less to be cash equivalents.

Accounts receivable

The Company records accounts receivable when the control of the product is transferred to the customer and amounts are stated at the amount billed to the customer net of any allowance for doubtful accounts, as needed. Management provides for probable uncollectible amounts through a charge to bad debt expense in the consolidated statements of operations and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances that remain outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to receivables. Management has recorded an allowance for doubtful accounts of $853 and $12,345 as of December 31, 2020 and 2019, respectively.

Inventory

Inventory is valued at the lower of cost or net realizable value using the standard cost method, which approximates the first-in, first-out (“FIFO”) method. Appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in determining net realizable value and a reserve for obsolescence is recognized if necessary. Cost includes material, labor and applicable manufacturing overhead.

Property and equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated remaining useful lives of the corresponding assets, which ranges from three to thirty-nine years. Expenditures for repairs or renewal and betterments that extend the useful lives of property and equipment are capitalized. When assets are retired or otherwise disposed of, their costs and related accumulated depreciation are removed from the accounts and resulting gains or losses are included in income. Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Warranty reserve

The Company accrued an estimate of its exposure to warranty claims based on current and historical product sales data and warranty cost incurred, which in management’s judgment, is adequate to absorb potential claims. Because of the inherent uncertainties in estimating warranty costs, it is at least reasonably possible that the estimate used will change within the near-term.

Advertising costs

The Company expenses advertising costs as incurred. Advertising expenses of $680,556 and $392,886 were recognized for the years ended December 31, 2020 and 2019, respectively.

Translation of foreign currencies

The current assets and liabilities of GCBV are translated at year end exchange rates, capital transactions are translated based on the historical exchange rate, and revenues and expenses are translated at average rates. Translation adjustments are reported as a separate component of stockholders’ equity.

Other comprehensive income

Comprehensive income is the total of net income plus gains and losses on foreign currency translation adjustments. Accumulated other comprehensive income consisting of accumulated foreign currency gains and losses, is reported in stockholder equity, net of tax.

Income taxes

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Reclassifications

Certain amounts in the 2019 financial statements have been reclassified to conform to the 2020 presentation.

2.	INVENTORY:

Inventory consists of the following at December 31:

	2020
Raw material	$	6,318,162	3,899,417
Work in process		1,475,730	1,371,539
Finished goods		735,402	1,164,797
	$	8,529,294	6,435,753
3.	INCOME TAXES
---	---

The income tax provision consisted of the following at December 31, 2020 and 2019:

	2020
Deferred federal tax expense	$	1,051,666		1,003,368
Change in valuation allowance		(1,051,666	)	(2,241,960	)
Total income tax expense	$	-		(1,238,592	)

The components of the deferred tax assets at December 31, 2020 and 2019, are as follows:

	2020
Deferred tax assets:
Deferred tax assets	$	5,176,521		4,124,855
Deferred tax liabilities		(3,464	)	(3,464	)
Valuation allowance		(5,173,057	)	(4,121,391	)
Net deferred tax assets	$	-		-

Deferred tax assets are attributable to changes in certain valuation allowances, accrued expenses, and net operating loss carryforward. Deferred tax liabilities result from excess accumulated tax depreciation over book depreciation and differences in losses on assets disposed. Permanent differences result from deductions for life insurance, options compensation, and 50% of meals. The deferred tax assets include a federal net operating loss carryforward of $22,831,954 as of December 31, 2020. If not utilized, federal net operating loss carryforwards of $10,700,638 will expire between 2030 and 2037. Net operating loss carryforwards of $12,131,316 are available indefinitely. Certain changes in the Company’s ownership may occur in the future, which may result in limitations on the amount of loss carry forwards that can be utilized to offset taxable income in the future.

4.	LINE OF CREDIT:

Effective December 16, 2020, the Company obtained a line of credit with a bank which expires in June 2023. The outstanding balance bears interest at a floating rate equal the 3 month LIBOR rate plus 5.50%. The maximum allowed on the line of credit is $5,000,000. The line is secured by all the assets of the Company. The Company’s credit agreement with the bank contains certain restrictions and covenants. The Company must maintain a minimum level of availability on the line of credit. The covenants have been met by the Company as of December 31, 2020.

The Company maintained a line of credit with another bank through December 16, 2020. The outstanding balance bore interest at a floating rate equal the PRIME rate plus 1%. The maximum allowed on the line of credit was $2,000,000. The line was collateralized by 80% of accounts receivable and 40% of eligible inventory. The Company’s credit agreement with the bank contained certain restrictions and covenants. Under those restrictions, the Company had to obtain the consent of the bank to pay dividends or borrow from others. In addition, the Company had to maintain certain levels of excess availability on the line of credit. As of December 31, 2020, the covenants have been met.

5.	PAYROLL PROTECTION PROGRAM LOAN:

The Company received a Paycheck Protection Program (PPP) loan as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act of $1,484,989 in April 2020. Under the terms of the loan, all or a portion of the loan may be forgiven in accordance with the program requirements. Repayments of unforgiven principal and interest at 1% were to begin in the tenth month following the end of the covered period, as defined, in equal installments over seventeen months. The Company received approval for the forgiveness of the entire amount of the PPP loan from the Small Business Administration in November 2020.

6.	WORKFORCE RETENTION LOAN PROGRAM:

In 2020, the Company received a Workforce Retention Loan of $600,000 through the JobsOhio program. Under the terms of the loan, all or a portion of the loan may be forgiven in accordance with the program requirements. The note is non-interest bearing. Repayments of unforgiven principal are to begin in the thirteenth month from disbursement of the loan, in equal installments over eighty-three months. The Company received approval of the forgiveness in the entire amount of the loan in December 2020.

7.	CONVERTIBLE PROMISSORY NOTES:

During 2020, the Company issued $1,500,000 of convertible promissory notes. The notes are subordinated to all other debts. The promissory notes and accrued interest automatically convert to shares in connection with the qualified financing or non-qualified financing event as defined in the debt agreements. The principal balance and accrued interest will convert at a discounted stock price. However, the discount was contingent upon an event that was not reasonably predictable at the time of debt issuance so no beneficial interest related to the discount conversion price was recorded. The notes accrue interest at a rate of 8% per year. If qualified financing or non-qualified financing is not completed by the end of the term of the notes, the Company will repay the investor’s total debt outstanding and accrued interest. As of December 31, 2020 the outstanding principal totaled $1,500,000 and accrued interest totaled $55,000.

8.	LONG-TERM DEBT:

Long-term debt consists of the following at December 31:


Note payable to Enhanced Capital Ohio Rural Fund, LLC, interest only payable monthly, beginning November 2019 through February 2021, at an interest rate of 11.5%. Beginning March 1, 2021 payable in quarterly principal payments of 43,750 plus accrued interest through November 2021. Beginning December 1, 2021 payable in quarterly payments of 87,500 plus accrued interest, with a final balloon payment due September 7, 2023. The note was secured by substantially all assets of the Company.	1,750,000		1,750,000
Note payable to Advantage, interest only payable monthly, beginning December 2018 through December 30, 2020, at an interest rate of LIBOR (1.76% as of December 31, 2019) + 6.50%. Beginning March 1, 2021 payable in quarterly principal payments of 135,000 plus accrued interest, with a final balloon payment due September 7, 2023. The note was secured by substantially all assets of the Company.*	2,750,000		2,750,000
	4,500,000		4,500,000
Unamortized debt discount and debt issuance costs	(196,014	)	(89,855	)
	4,303,986		4,410,145
Less current portion	758,750		-
	3,545,236		4,410,145

All values are in US Dollars.

*Subsequent to year-end, the terms of this note were renegotiated resulting in the delay of principal payments until 2023. Since the terms of the notes were changed prior to issuance of the financial statements, the estimated future maturities of long-term debt has been updated to reflect the revised terms.

Aggregate maturities of long-term debt for the next five years and thereafter are as follows:

Year Ending December 31:
2021	$	218,750
2022		350,000
2023		1,481,250
2024		1,400,000
2025		-
Thereafter		1,112,697
	$	4,562,697

The Company must maintain a certain fixed coverage ratio and certain levels of EBITDA. These requirements were not met and they had been waived by the Banks.

9.	WARRANTY RESERVE :

The warranty liability is included in other accrued expenses in the accompanying consolidated balance sheets. Changes in the Company’s warranty liability were as follows:

	2020
Warranty accrual, beginning of year	$	437,410		484,805
Additions to warranty accrual		2,465,334		1,219,422
Actual warranty expenditures		(2,327,265	)	(1,266,817	)
Warranty accrual, end of year	$	575,479		437,410
10.	STOCK OPTION PLAN:
---	---

The Company maintains the Global Cooling, Inc. Stock Option Plan (the Plan) to further the long-term growth of the Company by offering competitive incentive compensation to key employees, non-employee directors and consultants of the Company. Options are granted at an exercise price that is at least equal to the fair value of the shares at the date of the grant. Under the terms of the Plan, the Company is authorized to grant incentive and nonqualified stock options as defined under the Internal Revenue Code. The Plan is administered by the Board of Directors (the Board). The Board selects the individuals to whom options will be granted and determines the option exercise price and other terms of each award, subject to the provisions of the Plan. Options vest ratably over the required service period. Options granted under the Plan will expire no later than the tenth anniversary of the grant date.

The total number of awards available for grant under the Plan represents 140,000 and 100,000 shares of the Company’s common stock as of December 31, 2020 and 2019, respectively. At December 31, 2020, there were 79,450 options outstanding for this Plan, 35,074 options that have been exercised and 25,476 remaining shares available for grant under the Plan. At December 31, 2019, there were 57,521 options outstanding for this Plan, 34,324 options that have been exercised and 8,155 remaining shares available for grant under the Plan.

The fair values of the options granted to each employee were estimated on the date of the grant using the Black-Scholes-Merton option pricing model that uses the assumptions concerning expected volatility, expected term, and the expected risk-free rate of return. Expected volatility was estimated by management using similar public company data. The expected term of options granted is stated in the contract. Risk-free rates of return are yields for constant maturity U.S. Treasury Notes maturing approximately at the end of the option life.

The weighted-average grant date fair value of the options granted during 2020 and 2019 was $38.65 and $89.76. The weighted average remaining contractual life of options outstanding at December 31, 2020 and 2019 was approximately two and three years, respectively.

A summary of the status of the Plan as of December 31, 2020 and 2019 and changes during the years then ended were as follows:

				Weighted
				Average
	Options			Exercise Price
Outstanding at January 1, 2019		51,940		$	89.76
Granted		20,500		$	40.00
Exercised		(1,750	)	$	57.00
Forfeited		(13,169	)	$	79.36
Outstanding at December 31, 2019		57,521
Granted		37,100		$	38.65
Exercised		(750	)	$	52.10
Forfeited		(14,421	)	$	71.27
Outstanding at December 31, 2020		79,450		$	62.08
Options exercisable at December 31, 2020		31,780		$	74.69

As of December 31, 2020 and 2019, there were total unrecognized compensation costs related to non-vested options granted under this plan of approximately $355,117 and $241,564. The costs are expected to be recognized as the options vest. The stock-based compensation on options that has been recognized for this plan was $(26,819) and $88,175 for the years ended December 31, 2020 and 2019, respectively.

11. ****	PREFERRED STOCK

At December 31, 2020 and 2019, the Company was authorized to issue up to 100,000 shares of Series A convertible preferred stock (Series A) with a par value of $40. During 2020 and 2019, the Company was authorized to issue up to 60,000 shares of Series B convertible preferred stock (Series B) with a par value of $.01.

The holders of Series A and Series B have various rights and preferences as follows:

Relative ranking

Series B shall rank senior to the Series A and the common stock with respect to the payment of dividends, if any, and redemption and upon liquidation, dissolution or winding up the Corporation. Series A shall rank senior to the Common Stock with respect to the payment of dividends, if any, and redemption and upon liquidation, dissolution or winding up the Corporation.

Voting

Each share of Series A and B has voting rights equal to an equivalent number of shares of common stock into which it is convertible and votes together as one class with the common stock.

Dividends

Dividends accrue at the per annum rate of 7% of the original issue price compounded annually for both Series A and Series B. Dividends shall accrue from day to day, whether or not earned or declared, and shall be cumulative. All accrued and unpaid cumulative dividends shall be paid before any dividends or other distribution is made to common stockholders. In addition, Series A and Series B are entitled to receive dividends in an amount equal to any cash dividend or distribution paid to common stockholders, when and if declared by the board of directors, based on the number of shares of common stock held on an as-if converted basis, or at a stated rate per share for dividends paid on any class or Series that is not convertible to common stock.

At December 31, 2020 and 2019, the cumulative and unpaid dividends related to the Series A were $1,625,808 or $19.58 per share and $1,393,324 or $16.91 per share, respectively. At December 31, 2020 and 2019, the cumulative and unpaid dividends related to the Series B were $1,024,910 or $17.08 per share and $512,455 or $8.54 per share, respectively. There is a class of preferred shares issued by the consolidated foreign subsidiary that are owned by non-controlling investors. Upon liquidation those investors would be entitled to their original investment and accumulated and unpaid dividends. At December 31, 2020 and 2019, the original investments and accumulated and unpaid dividends related to the preferred shares issued to the non-controlling investors were $272,625.

The cumulative and unpaid dividends are included in additional paid-in capital on the consolidated balance sheets until the dividends are declared for payment.

Conversion

Each share of preferred stock Series A and Series B is convertible, at the option of the holder, at any time, into shares of common stock based on the then effective conversion rate. The effective conversion rate is determined by dividing the original issue price by the conversion price. The conversion price is adjustable for certain diluting issuances or equity instruments. Applying the effective conversion rate at December 31, 2020, preferred stock is convertible into common shares on a share-for-share basis.

All outstanding shares of preferred stock shall automatically be converted into shares of common stock using the effective conversion rate upon the earlier of the closing of an initial public offering of the Company’s common stock in which the per share price is $200 (subject to appropriate adjustment in the event of a stock dividend, stock split, combination or other similar recapitalization with respect to common stock) and the gross proceeds to the Company are at least $25,000,000 or the vote or written consent of the holders of the outstanding Series A and Series B.

Liquidation

In the event of any dissolution, deemed liquidation or winding up of the Company, the Series A and Series B shall be entitled to receive liquidating distributions, before any distribution is made to common stockholders. The holders of shares of Series A and Series B then outstanding shall be entitled to receive an amount per share equal to the original issue price, plus any accrued but unpaid Series A and Series B dividends. If the distributable assets are insufficient to pay the holders of Series A and Series B in full, a pro rata distribution of the assets shall be made to the Series A, only after Series B has been paid in full.

After payment of the full Series A and Series B liquidation preference the preferred stockholders shall be entitled to participate on an as-if converted basis with the holders of the common shares as a single class in the distribution of the remaining assets of the Company. ****

Put Right

At any time following the five year anniversary of the first sale of Series B, a majority of the holders of preferred stock may elect to have some or all of their outstanding preferred shares redeemed by the Company at the greater of the Series A original issue price per share plus all declared but unpaid dividends or the fair market value of the shares. Management has determined the put right is not a mandatory redemption, and therefore, the preferred shares are classified as equity.

At December 31, 2020 and 2019, the following shares of Series A are reserved for issuance:

	2020
Exercise of warrants issued		-	16,950
Total shares reserved and authorized, but not issued		-	16,950
Total shares issued		83,030	82,406
Total shares committed		83,030	99,356
12.	STOCK WARRANTS
---	---

Common Stock

Detachable common stock warrants were issued in conjunction with a note payable issued in 2018. The warrants are fully vested and have a term of ten years. Each common stock warrant can be redeemed for one share of common stock at an exercise price of $76.30 per share. The fair value of the warrants was insignificant, so no additional paid in capital and debt discount were recorded. The total warrants of 459 were exercisable during the year ended December 31, 2018.

Preferred Stock

A total of 18,512 detachable stock warrants were issued in accordance with the Series A Preferred Stock purchase agreement dated October 21, 2013 and the 2011 private placement memorandum and were fully vested. Each preferred stock warrant can be redeemed for one share of preferred stock at an exercise price of $40 per share.

In 2019, there were 1,562 warrants exercised at a price of $40 per share. The total warrants exercisable at December 31, 2019 were 16,590. The weighted average remaining contractual lives of warrants outstanding at December 31, 2019 was one year. In 2020, there were 624 warrants exercised at a price of $40 per share. The remaining warrants expired in March 2020.

13.	COMMON STOCK:

At December 31, 2020 and 2019, the Company was authorized to issue up to 600,000 shares of common stock, with a par value of $0.01, and the following shares of common stock are reserved for issuance:

	2020
Exercise of stock options and other awards under equity plan		79,450	57,521
Exercise of warrants issued		459	459
Total shares reserved and authorized, but not issued		79,909	57,980
Total shares issued		296,719	295,969
Total shares committed		376,628	353,949
14.	RETIREMENT PLAN:
---	---

The Company elected a Safe Harbor Profit Sharing Plan available to eligible employees, as defined by the plan document. Participating employees may elect to contribute a portion of their compensation, up to the maximum amount allowed by the Internal Revenue Service. Through April 2020, the Company made safe harbor contributions of 100% of the first 3% and 50% of the next 2% of participating employees’ eligible deferrals. The Company may make additional discretionary contributions to the Plan on behalf of the eligible employees. Employer safe harbor contributions of $80,525 and $206,960 were made for the years ended December 31, 2020 and 2019, respectively. No discretionary contributions were made by the Company for the years ended December 31, 2020 and 2019, respectively.

15.	OPERATING LEASES:

The Company leases equipment and various warehouse, office, and operating facility space under operating leases with terms expiring in various years through March 2028. The following is a schedule by years of future minimum rentals under the leases at December 31, 2020:

Year Ending December 31:
2022	$	318,174
2023		311,859
2024		323,859
2025		326,633
Thereafter		1,092,303
	$	2,372,828

The operating facility lease provides for escalating lease payments. The Company accrued the rent associated with this escalating payments and is amortizing the accrual ratably over the remainder of the lease. Rental expense for the years ended December 31, 2020 and 2019 approximated $455,000 and $400,000, respectively.

16.	CAPITAL LEASES:

The Company has acquired certain office equipment and equipment under capital leases. The leases expire at various dates through November 2025. As of December 31, 2020 and 2019, the equipment and related accumulated amortization recorded under the capital lease that was included in the accompanying balance sheet is as follows:

	2020
Machinery and equipment	$	150,458		118,045
Less accumulated depreciation		(39,846	)	(20,730	)
	$	110,612		97,315

Minimum future lease payments under the capital leases remaining at December 31, 2020 are as follows:

Year Ending December 31:
2021	$	36,122
2022		36,122
2023		36,122
2024		22,995
2025		10,087
Total minimum payments	$	141,448
Less amounts representing imputed interest (5.25% - 6.7%)		17,155
Present value of minimum lease payments		124,293
Less current portion		28,826
	$	95,467

Amortization of assets held under the capital lease is included in depreciation expense.

17.	CONCENTRATIONS:

Global Cooling, Inc. maintains its cash balances in two financial institutions. Deposits in interest-bearing and non-interest-bearing accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per institution. From time to time, the Company may have balances that exceed the insured limit but has not experienced any losses. Global Cooling B.V. maintains its cash balances at an international financial institution. Cash balances are insured by the Deposit Guarantee and Investor Compensation Act up to $100,000 per institution. The Company has not experienced any such losses and believes it is not exposed to any significant credit risk.

For the years ended December 31, 2020 and 2019, the Company had sales to one customer that made up 59% and 61% of the total sales, respectively and 34% and 46% of total receivables, respectively. Customer balances are continually monitored to minimize the risk of loss.

18.	SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid during the years ended December 31, 2020 and 2019 for interest amounted to $521,743 and $361,610, respectively.

The Company assumed debt on the line of credit to pay for $130,310 in closing cost related to the line of credit assumed in December 2020.

During 2020 and 2019, the company purchased property and equipment through capital leases in the amount of $47,004 and $103,454, respectively.

19.	RISK AND UNCERTAINTIES:

An outbreak of a novel strain of coronavirus (COVID-19) has disrupted supply chains and affected production and sales across a range of industries. The extent of the impact of COVID-19 on the Company’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak. Impact of the customers, employees, and vendors cannot be predicted, and the extent to which COVID-19 may impact the Company’s financial condition or results of the operations is uncertain at this time.

20.	SETTLEMENT OF LITIGATION:

In 2019, the Company filed a complaint against a former supplier for violations of an established contract. The supplier also made counterclaims against the Company. The parties to this litigation agreed to negotiate a settlement through mediation based on the terms of the agreement which was concluded on September 15, 2020. As a result of the mediation, all claims and counterclaims have been terminated. The consolidated statements of operations includes a separately stated expense of $4,000,000 related to the settlement of this litigation. The terms of payment required the Company to pay $900,000 on or before September 15, 2020 and $400,000 on or before October 15, 2020. The remaining balance was to be paid by the Company monthly at a rate of $600 per qualifying freezer, as defined in the settlement agreement, shipped to a customer. Upon payment of $1,000,000 the rate per qualifying freezer will be reduced to $300. Any settlement sum not paid within 42 months of the agreement is due in full to the supplier.

21.	SUBSEQUENT EVENTS:

The accompanying consolidated financial statements consider events through April 13, 2021, the date on which the consolidated financial statements were available to be issued.

During 2020, the Company entered into negotiations with a third-party that would result in the sale of Global Cooling, Inc. On March 19, 2021 the Board voted to approve the sale of the Company pending final approval of the stockholders. As of the date of these financial statements, the final vote by the stockholders has not occurred. Management has made no changes, other than the vesting of stock options as of December 31, 2020, on the reporting value of the assets or liabilities that may occur as a result of the change in control in the preparation of the financial statements.

ex_261762.htm

Exhibit 99.2

Global Cooling, Inc. and Subsidiary

Consolidated Financial Statements

March 31, 2021 and 2020

(Unaudited)

TABLE OF CONTENTS

Consolidated Financial Statements (Unaudited):
Balance Sheets as of March 31, 2021 and December 31, 2020 (Unaudited)	1-2
Statements of Operations for the three months ended March 31, 2021 and 2020 (Unaudited)	3
Statements of Stockholders’ Equity (Deficit) for the three months ended March 31, 2021 and 2020 (Unaudited)	4
Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (Unaudited)	5
Notes to the Consolidated Financial Statements (Unaudited)	6-17

Global Cooling, Inc. and Subsidiary

Consolidated Balance Sheet (Unaudited)

March 31, 2021 and December 31, 2020

	March 31,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	45,719		237,705
Accounts receivable, trade, net		7,540,313		6,027,323
Receivables, other		55,424		65,424
Notes receivable - related party		374,000		-
Inventory, net		13,147,430		8,529,294
Prepaid expenses		172,306		212,667
Total current assets		21,335,192		15,072,413
Property and equipment:
Machinery		2,813,437		2,771,582
Furniture and equipment		555,276		555,276
Computers and equipment		687,049		683,591
Leasehold improvements		665,652		665,652
Construction in progress		518,714		394,290
		5,240,128		5,070,391
Less accumulated depreciation		1,648,733		1,504,688
Total property and equipment		3,591,395		3,565,703
Other assets:
Deposits		3,700		3,700
Other assets		3,084		3,496
Notes receiavble - related party		-		374,000
Total other assets		6,784		381,196
Total assets	$	24,933,371		19,019,312

See accompanying notes to the unaudited consolidated financial statements

Global Cooling, Inc. and Subsidiary

Consolidated Balance Sheet (Unaudited) (continued)

March 31, 2021 and December 31, 2020

			December 31,
			2020
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Line of credit	3,428,491			757,562
Accounts payable - trade	10,004,533			7,393,945
Customer advances	2,647,471			2,479,658
Accrued compensation	1,231,717			924,104
Other accrued expenses	3,302,365			3,560,091
Long-term debt, current portion	262,500			758,750
Capital lease obligations, current portion	29,324			28,826
Total current liabilities	20,906,401			15,902,936
Long-term liabilities:
Deferred rent	121,102			116,415
Capital lease obligations, less current portion	87,947			95,467
Convertible promissory notes payable	1,500,000			1,500,000
Long-term debt, less current portion	4,129,087			3,545,236
Total long-term liabilities	5,838,136			5,257,118
Stockholders' equity:
Preferred stock - Series A, 100,000 shares authorized and 83,030 outstanding, par value 40, with liquidation preferences of 5,005,129 and 4,947,008, respectively	3,321,200			3,321,200
Preferred stock - Series B, 60,0000 shares authorized and 59,999 outstanding, par value .01, with liquidation preferences of 8,473,806 and 8,345,693, respectively	600			600
Common stock - 600,000 shares authorized and 297,094 and 296,719 oustanding, respectively, par .01	2,971			2,967
Additional paid-in-capital	22,433,902			22,165,623
Accumulated other comprehensive income, net of tax	(116,856	)		(114,441	)
Retained deficit	(27,686,433	)		(27,789,316	)
	(2,044,616	)		(2,413,367	)
Non-controlling interest	233,450			272,625
Total stockholders' equity (deficit)	(1,811,166	)		(2,140,742	)
Total liabilities and stockholders' equity (deficit)	24,933,371			19,019,312

All values are in US Dollars.

See accompanying notes to the unaudited consolidated financial statements

Global Cooling, Inc. and Subsidiary

Consolidated Statement of Operations (Unaudited)

Three months ended March 31, 2021 and 2020

	2021
Sales, net of discounts and allowances	$	18,463,487		6,842,071
Cost of sales		13,624,018		5,813,532
Gross profit		4,839,469		1,028,539
General and administrative expenses		4,318,230		3,226,219
Income from operations		521,239		(2,197,680	)
Other income (expense):
Other expense		(826	)	-
Interest income		4,757		5,127
Interest expense		(275,228	)	(131,522	)
		(271,297	)	(126,395	)
Net income (loss)		249,942		(2,324,075	)
Other comprehensive income (loss) -
Income (loss) on foreign currency translation		(2,415	)	21
Total comprehensive income (loss)	$	247,527		(2,324,054	)

See accompanying notes to the unaudited consolidated financial statements

Global Cooling, Inc. and Subsidiary

Consolidated Statement of Stockholders’ Equity (Unaudited)

Three months ended March 31, 2021 and 2020

							Accumulated
					Additional		Other						Non-
	Preferred		Common		Paid-In		Comprehensive			Retained			Controlling
	Stock		Stock		Capital		Loss			Deficit			Interest			Total
Balance as of January 1, 2020	$	3,296,840		2,960		21,408,435		(122,833	)		(22,099,133	)		272,625			2,758,894
Stock-based compensation on options		-		-		30,015		-			-			-			30,015
Warrant exercises		24,960		-		-		-			-			-			24,960
Accrued dividends on preferred stock		-		-		128,114		-			(128,114	)		-			-
Gain on foreign currency translation		-		-		-		21			-			-			21
Net Loss		-		-		-		-			(2,324,075	)		-			(2,324,075	)
Balance as of March 31, 2020		3,321,800		2,960		21,566,564		(122,812	)		(24,551,322	)		272,625			489,815
Balance as of January 1, 2021		3,321,800		2,967		22,165,623		(114,441	)		(27,789,316	)		272,625			(2,140,742	)
Stock-based compensation on options		-		-		58,160		-			-			-			58,160
Stock options and warrant exercises		-		4		23,885		-			-			-			23,889
Accrued dividends on preferred stock		-		-		186,234		-			(147,059	)		(39,175	)		-
Loss on foreign currency translation		-		-		-		(2,415	)		-			-			(2,415	)
Net Income		-		-		-		-			249,942			-			249,942
Balance as of March 31, 2021	$	3,321,800		2,971		22,433,902		(116,856	)		(27,686,433	)		233,450			(1,811,166	)

See accompanying notes to the unaudited consolidated financial statements

Global Cooling, Inc. and Subsidiary

Consolidated Statement of Cash Flows (Unaudited)

Three months ended March 31, 2021 and 2020

	2021			2020
Cash flows from operating activities:
Net Income (loss)	$	249,942		$	(2,324,075	)
Adjustments to reconcile net income to net cash flows used in operating activities:
Depreciation		144,044			151,187
Bad debt expense		(853	)		5,098
Provision for obsolete inventory		119,426			49,856
Deferred rent		4,687			10,328
Stock-based compensation on options		58,160			30,015
Amortization of debt cost		38,904			6,037
Effects of changes in operating assets and liabilities:
Accounts receivable		(1,512,137	)		86,154
Other receivable		10,000			7,626
Inventory, net		(4,737,562	)		1,338,208
Prepaid expenses		40,361			37,916
Accounts payable - trade		2,610,588			(785,144	)
Other assets		412			-
Customer advances		167,813			-
Other accrued expenses		(257,726	)		(105,934	)
Accrued compensation		307,613			(224,120	)
Net cash flows used in operating activities		(2,756,328	)		(1,716,848	)
Net cash flows from investing activities:
Purchase of property and equipment		(169,736	)		(62,986	)
Cash flows from financing activities:
Payments on capital lease obligations		(7,022	)		(4,336	)
Borrowings on line of credit		2,670,929			725,000
Proceeds from notes payable		62,697			-
Payments of debt issuance cost		(14,000	)		-
Stock options and warrant exercises		23,889			24,960
Net cash flows from financing activities		2,736,493			745,624
Foreign currency translation adjustment		(2,415	)		21
Decrease in cash		(191,986	)		(1,034,189	)
Cash and cash equivalents, beginning of year		237,705			3,197,164
Cash and cash equivalents, end of year	$	45,719		$	2,162,975

See accompanying notes to the unaudited consolidated financial statements

1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Nature of operations

Principles of consolidation

The consolidated financial statements include the accounts of Global Cooling, Inc. and GCBV. All inter-company balances and transactions have been eliminated in consolidation.

Basis of accounting

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

Revenue recognition

Use of estimates

Shipping and freight cost

Shipping and freight costs incurred by the Company are included in cost of sales.

Cash and cash equivalents

The Company considers all highly liquid investments purchased with maturities of three months or less to be cash equivalents.

Accounts receivable

The Company records accounts receivable when the control of the product is transferred to the customer and amounts are stated at the amount billed to the customer net of any allowance for doubtful accounts, as needed. Management provides for probable uncollectible amounts through a charge to bad debt expense in the consolidated statements of operations and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances that remain outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to receivables. Management has recorded an allowance for doubtful accounts of $77,831 and $853 as of March 31, 2021 and December 31, 2020, respectively.

Inventory

Property and equipment

Warranty reserve

The Company accrues an estimate of its exposure to warranty claims based on current and historical product sales data and warranty cost incurred, which in management’s judgment, is adequate to absorb potential claims. Because of the inherent uncertainties in estimating warranty costs, it is at least reasonably possible that the estimate used will change within the near-term.

Advertising costs

The Company expenses advertising costs as incurred. Advertising expenses of $107,105 and $188,845 were recognized for the three months ended March 31, 2021 and March 31, 2020, respectively.

Translation of foreign currencies

Other comprehensive income

Income taxes

2.	INVENTORY:

Inventory consists of the following:

	March 31,		December 31,
	2021		2020
Raw material	$	8,384,838		6,318,162
Work in process		2,836,792		1,475,730
Finished goods		1,925,800		735,402
	$	13,147,430		8,529,294

3.	INCOME TAXES

The income tax provision (benefit) consisted of the following for the three months ended March 31, 2021 and 2020:

	2021
Deferred federal tax expense	$	78,096		467,024
Change in valuation allowance		(78,096	)	(467,024	)
Total income tax provision (benefit)	$	-		-

The components of the deferred tax asset is as follows:

	March 31,			December 31,
	2021			2020
Deferred tax assets:
Deferred tax assets	$	5,098,425			5,176,521
Deferred tax liabilities		(3,464	)		(3,464	)
Valuation allowance		(5,094,961	)		(5,173,057	)
Net deferred tax assets	$	-			-

Deferred tax assets are attributable to changes in certain valuation allowances, accrued expenses, and net operating loss carryforward. Deferred tax liabilities result from excess accumulated tax depreciation over book depreciation and differences in losses on assets disposed. Permanent differences result from deductions for life insurance, options compensation, and 50% of meals. The deferred tax assets include a federal net operating loss carryforward of $21,464,789 as of March 31, 2021. If not utilized, federal net operating loss carryforwards of $10,700,638 will expire between 2030 and 2037. Net operating loss carryforwards of $10,764,151 are available indefinitely. Certain changes in the Company’s ownership, which may result in limitations on the amount of loss carry forwards that can be utilized to offset future taxable income.

4.	LINE OF CREDIT:

Effective December 16, 2020, the Company maintains a line of credit with a bank which expires in June 2023. The outstanding balance bears interest at a floating rate equal the 3 month LIBOR rate plus 5.50%. The maximum allowed on the line of credit is $5,000,000. The line is secured by all the assets of the Company. The Company’s credit agreement with the bank contains certain restrictions and covenants. The Company must maintain a minimum level of availability on the line of credit. The covenants have been met by the Company as of March 31, 2021.

5.	CONVERTIBLE PROMISSORY NOTES:

In 2020, the Company issued $1,500,000 of convertible promissory notes. The notes are subordinated to all other debts. The promissory notes and accrued interest automatically convert to shares in connection with a qualified financing or non-qualified financing event as defined in the debt agreements. The principal balance and accrued interest will convert at a discounted stock price. However, the discount is contingent upon an event that was not reasonably predictable at the time of debt issuance so no beneficial interest related to the discounted conversion price was recorded. The notes accrue interest at a rate of 8% per year. If a qualified financing or non-qualified financing is not completed by July 15, 2022, the maturity date of the notes, the Company will repay the investor’s total debt outstanding and accrued interest. As of March 31, 2021 the outstanding principal totaled $1,500,000 and accrued interest totaled $85,000. As of December 31, 2021 the outstanding principal totaled $1,500,000 and accrued interest totaled $55,000.

6.	LONG-TERM DEBT:

Long-term debt consists of the following:

			December 31,
			2020
Note payable to Enhanced Capital Ohio Rural Fund, LLC, interest only payable monthly, beginning November 2019 through May 2021, at an interest rate of LIBOR (.019% as of March 31, 2021) plus 6.5%. Beginning June 1, 2021 payments of quarterly principal payments of 43,750 plus accrued interest are due through November 2021. Beginning December 1, 2021 payments of quarterly principal payments of 87,500 plus accrued interest are due, with a final balloon payment due September 7, 2023. The note is secured by substantially all assets of the Company.	1,750,000			1,750,000
Note payable to Advantage, interest only payable monthly, beginning March 31, 2021 through December 18, 2027, at an interest rate of LIBOR (0.19% as of March 31, 2021) + 6.50%. On July 17, 2023, a principal payment of 300,000 is due. On July 17, 2024, a principal payment of 1,400,000 is due. On December 18, 2027 a balloon payment of the remaining principal is due. The note is secured by substantially all the assets of the Company.	2,812,697			2,750,000
	4,562,697			4,500,000
Unamortized debt discount and debt issuance costs	(171,110	)		(196,014	)
	4,391,587			4,303,986
Less current portion	262,500			758,750
	4,129,087			3,545,236

All values are in US Dollars.

Aggregate maturities of long-term debt (including convertible promissory notes described in Note 5) for the next five years and thereafter are as follows:

Twelve Months Ending March 31:
2022	$	262,500
2023		1,850,000
2024		1,437,500
2025		1,400,000
2026		-
Thereafter		1,112,697
	$	6,062,697

The Company must maintain a certain fixed coverage ratio and certain levels of EBITDA. These requirements were met as of March 31, 2021.

7.	WARRANTY RESERVE :

The warranty liability is included in other accrued expenses in the accompanying consolidated balance sheet. Changes in the Company’s warranty liability were as follows:

	March 31,			December 31,
	2021			2020
Warranty accrual, beginning of year	$	575,479			437,410
Additions to warranty accrual		1,122,955			2,465,334
Actual warranty expenditures		(1,002,966	)		(2,327,265	)
Warranty accrual, end of year	$	695,468			575,479
8.	STOCK OPTION PLAN:
---	---

The total number of awards available for grant under the Plan represents 140,000 shares of the Company’s common stock as of March 31, 2021 and December 31, 2020. At March 31, 2021, there were 79,075 options outstanding for this Plan, 35,449 options that have been exercised and 25,476 remaining shares available for grant under the Plan. At December 31, 2020, there were 79,450 options outstanding for this Plan, 35,074 options that have been exercised and 25,476 remaining shares available for grant under the Plan

The weighted average remaining contractual life of options outstanding at March 31, 2021 and December 31, 2020 was approximately two years.

A summary of the status of the Plan as of December 31, 2020 and changes during the year then ended were as follows:

				Weighted
				Average
	Options			Exercise Price
Outstanding at January 31, 2020		57,521		$	79.36
Granted		37,100		$	38.65
Exercised		(750	)	$	52.10
Forfeited		(14,421	)	$	17.27
Outstanding at December 31, 2020		79,450		$	62.08
Options exercisable at December 31, 2020		31,780		$	74.69

A summary of the status of the Plan as of March 31, 2021 and changes during the three months then ended were as follows:

				Weighted
				Average
	Options			Exercise Price
Outstanding at December 31, 2020		79,450		$	57.46
Exercised		(375	)	$	39.50
Outstanding at March 31, 2021		79,075		$	62.19
Options exercisable at March 31, 2021		38,387		$	70.41

As of March 31, 2021 and December 31, 2020, there were total unrecognized compensation costs related to non-vested options granted under this plan of approximately $296,587 and $355,117, respectively. The costs are expected to be recognized as the options vest. The stock-based compensation on options that has been recognized for this plan was $58,160 and $30,015 for the three months ended March 31, 2021 and March 30, 2020, respectively.

9. ****	PREFERRED STOCK

At March 31, 2021, the Company was authorized to issue up to 100,000 shares of Series A convertible preferred stock (Series A) with a par value of $40. The Company was authorized to issue up to 60,000 shares of Series B convertible preferred stock (Series B) with a par value of $.01.

The holders of Series A and Series B have various rights and preferences as follows:

Relative ranking

Voting

Each share of Series A and B has voting rights equal to an equivalent number of shares of common stock into which it is convertible and votes together as one class with the common stock.

Dividends

At March 31, 2021 and December 31, 2020, the cumulative and unpaid dividends related to the Series A were $1,683,929 or $20.28 per share and $1,625,808 or $19.58, respectively. At March 31, 2021 and December 31, 2020, the cumulative and unpaid dividends related to the Series B were $1,153,023 or $19.22 per share and $1,024,910 or $17.08 per share. There is a class of preferred shares issued by the consolidated foreign subsidiary that are owned by non-controlling investors. Upon liquidation those investors would be entitled to their original investment and accumulated and unpaid dividends. At March 31, 2021 and December 31, 2020, the original investments and accumulated and unpaid dividends related to the preferred shares issued to the non-controlling investors were $233,450 and $272,625.

The cumulative and unpaid dividends are included in additional paid-in capital on the consolidated balance sheets until the dividends are declared for payment.

Conversion

Each share of preferred stock Series A and Series B is convertible, at the option of the holder, at any time, into shares of common stock based on the then effective conversion rate. The effective conversion rate is determined by dividing the original issue price by the conversion price. The conversion price is adjustable for certain diluting issuances or equity instruments. Applying the effective conversion rate at March 31, 2021, preferred stock is convertible into common shares on a share-for-share basis.

All outstanding shares of preferred stock shall automatically be converted into shares of common stock using the effective conversion rate upon the earlier of the closing of an initial public offering of the Company’s common stock in which the per share price is $200 (subject to appropriate adjustment in the event of a stock dividend, stock split, combination or other similar recapitalization with respect to common stock) and the gross proceeds to the Company are at least $25,000,000, or the vote or written consent of the holders of the outstanding Series A and Series B.

Liquidation

Put Right

10.	COMMON STOCK WARRANTS

11.	COMMON STOCK:

At March 31, 2021, the Company was authorized to issue up to 600,000 shares of common stock, with a par value of $0.01, and the following shares of common stock are reserved for issuance:

Exercise of stock options and other awards under equity plan	79,075
Exercise of warrants issued	459
Total shares reserved and authorized, but not issued	79,534
Total shares issued	297,094
Total shares committed	376,628

12.	RETIREMENT PLAN:

The Company elected a Safe Harbor Profit Sharing Plan available to eligible employees, as defined by the plan document. Participating employees may elect to contribute a portion of their compensation, up to the maximum amount allowed by the Internal Revenue Service. The Company made safe harbor contributions of 100% of the first 3% and 50% of the next 2% of participating employees’ eligible deferrals. The Company may make additional discretionary contributions to the Plan on behalf of the eligible employees. Employer safe harbor contributions of $87,400 and $59,535 were made for the three months ended March 31, 2021 and 2020, respectively. No discretionary contributions were made by the Company for the three months ended March 31, 2021 and March 31, 2020, respectively.

13.	OPERATING LEASES:

Twelve Months Ending March 31:
2022	$	312,854
2023		320,859
2024		332,859
2025		331,469
2026		340,202
Thereafter		427,050
	$	2,065,293

The operating facility lease provides for escalating lease payments. The Company accrued the rent associated with the escalating payments and is amortizing the accrual ratably over the remainder of the lease. Rental expense for the three months ended March 31, 2021 and 2020 approximated $124,000 and 111,800, respectively.

14.	CAPITAL LEASES:

The Company has acquired certain office equipment and equipment under capital leases. The leases expire at various dates through November 2025. As of March 31, 2021, the equipment and related accumulated amortization recorded under the capital lease that was included in the accompanying balance sheet is as follows:

	March 31,			December 31,
	2021			2020
Machinery and equipment	$	150,458			150,458
Less accumulated depreciation		(47,369	)		(39,846	)
	$	103,089			110,612

Minimum future lease payments under the capital leases remaining at March 31, 2021 are as follows:

Twelve Months Ending March 31:
2022	$	36,122
2023		36,122
2024		36,122
2025		16,716
2026		7,337
Total minimum payments	$	132,419
Less amounts representing imputed interest (5.25% - 6.7%)		15,148
Present value of minimum lease payments		117,271
Less current portion		29,324
	$	87,947

Amortization of assets held under the capital lease is included in depreciation expense.

15.	CONCENTRATIONS:

For the three months ended March 31, 2021, the Company had sales to two customers that made up 54% of the total sales and 41% of total receivables, respectively. For the three months ended March 30, 2020, the Company had sales to two customers that made up 62% of the total sales and 41% of total receivables, respectively. Customer balances are continually monitored to minimize the risk of loss.

16.	SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid during the three months ended March 31, 2021 and 2020 for interest amounted to $175,122 and $131,522, respectively.

On February 12, 2021, the Company refinanced the note payable with Advantage Capital in the amount of $2,750,000 with the issuance of a new note payable in the amount of $2,750,000.

17.	RISK AND UNCERTAINTIES:

An outbreak of a novel strain of coronavirus (the coronavirus pandemic) has disrupted supply chains and affected production and sales across a range of industries. The extent of the impact of the coronavirus pandemic on the Company’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak. Impact of the customers, employees, and vendors cannot be predicted, and the extent to which the coronavirus pandemic may impact the Company’s financial condition or results of the operations remains uncertain at this time.

18.	SETTLEMENT OF LITIGATION:

In 2019, the Company filed a complaint against a former supplier for violations of an established contract. The supplier also made counterclaims against the Company. The parties to this litigation agreed to negotiate a settlement through mediation based on the terms of the agreement which was concluded on September 15, 2020. As a result of the mediation, all claims and counterclaims have been terminated. In 2020, the Company recorded a liability and litigation expense related to the settlement of this litigation. The terms of the agreement required the Company to pay $900,000 on or before September 15, 2020 and $400,000 on or before October 15, 2020. The remaining balance is to be paid by the Company monthly at a rate of $600 per qualifying freezer, as defined in the settlement agreement, shipped to a customer. Upon payment of $1,000,000 the rate per qualifying freezer will be reduced to $300. Any settlement sum not paid within 42 months of the agreement is due in full to the supplier. As of March 31, 2021 the remaining liability to be paid was $2,091,600.

19.	SUBSEQUENT EVENTS:

The accompanying consolidated financial statements consider events through July 7, 2021, the date on which the consolidated financial statements were available to be issued.

During 2020, the Company entered into negotiations with a third-party that would result in the sale of Global Cooling, Inc. On March 19, 2021 the Board voted to approve the sale of the Company pending final approval of the stockholders. The final vote by the stockholders occurred on May 3, 2021 at which time the sale was approved. Management has made no changes on the reporting value of the assets or liabilities that may occur as a result of the change in control in the preparation of the financial statements.

Upon the closing of the sale on May 3, 2021, the non-vested options described in Note 8 became vested and were exercised and the convertible notes described in Note 5 and all cumulative and unpaid dividends described in Note 9 were converted to shares of Company stock. All Company outstanding shares were exchanged for shares of the acquiring Company.

On June 30, 2021, the Company entered into an agreement to settle the remaining litigation settlement liability detailed in Note 18 of $1,705,200 for a discounted amount of $1,530,000, resulting in a gain on litigation settlement of $175,200.

ex_261763.htm

Exhibit 99.3

Unaudited Pro Forma Condensed Combined Financial Information

GCI Merger

General Terms and Effects

On March 19, 2021, BioLife Solutions, Inc. (the “Company”), a Delaware corporation, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with BLFS Merger Subsidiarity, Inc., a Delaware corporation (“Merger Sub”), Global Cooling, Inc., a Delaware corporation (“GCI” or “Global Cooling”) and Albert Vierling and William Baumel, in their capacity as the representatives of the stockholders of GCI (collectively, the “Seller Representative”).

On May 3, 2021, pursuant to the Merger Agreement, subject to the terms and conditions set forth therein, the transactions contemplated by the Merger Agreement were consummated (the “Closing”), Merger Sub merged with and into GCI (the “Merger” and, together with other transactions contemplated by the Merger Agreement, the “Transactions”), with GCI continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of the Company. In the 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 Merger Consideration (as defined below). The Company paid the 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 Merger Agreement to the GCI Stockholders was 6,646,870 newly issued shares of common stock, $0.001 par value per share (“Company Common Stock”), of the Company, which represents 19.9% of the Company Common Stock issued and outstanding immediately prior to March 19, 2021 (excluding for the avoidance of doubt any of the Company’s non-vested restricted stock awards) (the “Merger Consideration” and such shares the “Merger Consideration Shares”); provided, however, that the Merger Consideration otherwise payable to GCI Stockholders is subject to the withholding of the Escrow Shares (as defined below) and is subject to reduction for indemnification obligations. The Merger Consideration allocable to one GCI stockholder was reduced by 10,400 shares to satisfy an outstanding note receivable of $374,000. The Merger Consideration is not subject to any purchase price adjustments.

Escrow Shares

At the Closing, approximately nine percent (9%) of the Merger Consideration (the “Escrow Shares”, along with any other dividends, distributions or other income on the Escrow Shares, the “Escrow Property”) otherwise issuable to the GCI Stockholders (allocated pro rata among the GCI Stockholders based on the Merger Consideration otherwise issuable to them at the Closing), was deposited into a segregated escrow account in accordance with an escrow agreement to be entered into in connection with the Transactions (the “Escrow Agreement”).

The Escrow Property will be held for a period of up to twenty-four (24) months after the Closing as the sole and exclusive source of payment for any post-Closing indemnification claims (other than fraud claims), unless earlier released in accordance with the terms of the Escrow Agreement.

SCI Acquisition

On September 18, 2020, BioLife entered into a Stock Purchase Agreement, by and among the Company, SciSafe Holdings, Inc. (“SciSafe” or “SCI”), 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 “Acquisition”). The SciSafe Acquisition closed October 1, 2020. At the closing of the Acquisition, the Company issued to the 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 Sellers an additional 626,000 shares of common stock, which shall be issuable to Sellers upon SciSafe achieving certain specified revenue targets in each year from 2021 to 2024. The purchase price was subject to a post-closing working capital adjustment of approximately $53,000.

Unaudited Pro Forma Combined Financial Statements

The Merger is being accounted for as a business combination using the acquisition method with BioLife as the accounting acquirer in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Under this method of accounting, the merger consideration will be allocated to GCI’s assets acquired and liabilities assumed based upon their estimated fair values at the date of completion of the Merger. The process of valuing the net assets of GCI immediately prior to the Merger, as well as evaluating accounting policies for conformity, is preliminary. Any differences between the estimated fair value of the consideration transferred and the estimated fair value of the assets acquired and liabilities assumed will be recorded as goodwill. Accordingly, the merger consideration allocation and related adjustments reflected in this unaudited pro forma condensed combined financial information are preliminary and subject to revision based on a final determination of fair value. Further, the unaudited pro forma combined financial information is based on the assumptions and adjustments that are described in the accompanying notes. Accordingly, the unaudited pro forma adjustments are preliminary, subject to further revision as additional information becomes available and additional analyses are performed. The unaudited pro forma adjustments have been made solely for the purpose of providing unaudited pro forma combined financial information. Differences between these preliminary estimates and the final accounting, expected to be completed after the closing of the Merger, will occur and these differences could have a material impact on the accompanying unaudited pro forma combined financial information and the combined company’s future results of operations and financial position. In addition, differences between the preliminary and final amounts as of the closing date of the Merger will likely occur as a result of the amount of cash used for the Company’s operations, changes in the fair value of the Company’s common stock, and other changes in the Company’s assets and liabilities.

The unaudited pro forma combined balance sheet data assumes that the Merger took place on March 31, 2021 and combines the historical balance sheets of Global Cooling and BioLife as of such date. The unaudited pro forma combined statements of operations and comprehensive loss for the year-ended December 31, 2020 and the three months ended March 31, 2021 assume that the Acquisition and Merger took place as of January 1, 2020 and combine the historical results of BioLife, SciSafe, and Global Cooling for the periods then ended. The unaudited pro forma combined financial information was prepared in accordance with GAAP and pursuant to the rules and regulations of Article 11 of SEC Regulation S-X, which were amended in May 2020.

The unaudited pro forma combined financial information is provided for illustrative purposes only, does not necessarily reflect what the actual consolidated results of operations would have been had the acquisition occurred on the dates assumed and may not be useful in predicting the future consolidated results of operations or financial position. The Company’s results of operations and actual financial position may differ significantly from the unaudited pro forma amounts reflected herein due to a variety of factors.

The unaudited pro forma combined financial information does not give effect to the potential impact of current financial conditions, regulatory matters, operating efficiencies or other savings or expenses that may be associated with the integration of the three companies. The unaudited pro forma combined financial information is preliminary and has been prepared for illustrative purposes only and is not necessarily indicative of the financial position or results of operations in future periods or the results that actually would have been realized had BioLife, SciSafe, and Global Cooling been a combined company during the specified periods. The actual results reported in periods following the Merger may differ significantly from those reflected in the unaudited pro forma combined financial information presented herein for a number of reasons, including, but not limited to, differences in the assumptions used to prepare this unaudited pro forma financial information.

The unaudited pro forma combined financial information, including the notes thereto, should be read in conjunction with the separate historical financial statements of BioLife and Global Cooling. BioLife’s consolidated statements of operations for the year ended December 31, 2020 and three months ended March 31, 2021 and consolidated balance sheet as of March 31, 2021 are derived from BioLife Form 10-K for the year ended December 31, 2020 and Form 10-Q for the three months ended March 31, 2021, respectively.

Accounting rules require evaluation of certain assumptions, estimates, or determination of financial statement classifications. The accounting policies of Global Cooling may materially vary from those of BioLife. During preparation of the unaudited pro forma combined financial information, management has performed a preliminary analysis and is not aware of any material differences other than those presented in the unaudited pro forma combined financial statements, and accordingly, this unaudited pro forma combined financial information assumes no material differences in accounting policies other than those presented. Following the Merger, management will conduct a final review of Global Cooling accounting policies in order to determine if differences in accounting policies require adjustment or reclassification of Global Cooling results of operations or reclassification of assets or liabilities to conform to BioLife’s accounting policies and classifications. As a result of this review, management may identify differences that, when conformed, could have a material impact on these unaudited pro forma combined financial statements.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of March 31, 2021

(In thousands)	Historical<br><br> <br>BioLife			Historical Global Cooling			Global Cooling<br><br> <br>Pro Forma<br><br> <br>Transaction Accounting Adjustments				Pro Forma<br><br> <br>Combined
Assets	****	****	****	****	****	****	****	****	****		****	****	****
Current assets
Cash and cash equivalents	$	89,012		$	46		$	-			$	89,058
Restricted cash		53			-			-				53
Accounts receivable, trade, net		10,669			7,595			(615	)	5(a)		17,649
Inventories		11,666			13,148			1,000		5(b)		25,814
Prepaid expenses and other current assets		5,143			546			(2,598	)	5(c), 5(d)		3,091
Total current assets		116,543			21,335			(2,213	)			135,665
Assets held for rent, net		6,503			-			-				6,503
Property and equipment, net		11,231			3,591			(571	)	5(e)		14,251
Operating lease right-of-use assets, net		10,524			-			1,789		5(f)		12,313
Financing lease right-of-use assets, net		430			-			117		5(f)		547
Long-term deposits and other assets		356			7			-				363
Investments		5,872			-			-				5,872
Intangible assets, net		30,116			-			120,590		5(g)		150,706
Goodwill		58,449			-			135,785		5(h)		194,234
Total assets	$	240,024		$	24,933		$	255,497			$	520,454
Liabilities and Shareholders’ Equity	****	****	****	****	****	****	****	****	****		****	****	****
Current liabilities
Accounts payable	$	4,276		$	10,005		$	(615	)	5(a)	$	13,666
Accrued expenses and other current liabilities		8,146			7,210			(2,052	)	5(c), 5(f), 5(i)		13,304
Line of credit		-			3,428			-				3,428
Lease liabilities, operating, current portion		1,455			-			208		5(f)		1,663
Lease liabilities, financing, current portion		114			-			29		5(f)		143
Term loan, current portion		-			263			-				263
Contingent consideration, current portion		2,390			-			-				2,390
Total current liabilities		16,381			20,906			(2,430	)			34,857
Contingent consideration, long-term		4,271			-			-				4,271
Lease liabilities, operating, long-term		9,299			-			1,686		5(f)		10,985
Lease liabilities, financing, long-term		316			-			88		5(f)		404
Term loan, long-term		-			4,129			-				4,129
Convertible promissory notes payable		-			1,500			(1,500	)	5(j)		-
Deferred tax liability		-			-			15,028		5(k)		15,028
Other long-term liabilities		980			209			(224	)	5(f)		965
Total liabilities		31,247			26,744			12,648				70,639
Preferred stock		-			3,322			(3,322	)	5(l)		-
Common stock		34			3			3		5(l), 5(m)		40
Additional paid-in capital		307,246			22,434			210,301		5(l), 5(n)		539,981
Accumulated other comprehensive income		-			(117	)		117		5(l)		-
Accumulated deficit		(98,503	)		(27,687	)		35,984		5(i), 5(k), 5(l)		(90,206	)
Non-controlling interest		-			234			(234	)	5(l)		-
Total shareholders’ equity		208,777			(1,811	)		242,849				449,815
Total liabilities and shareholders’ equity	$	240,024		$	24,933		$	255,497			$	520,454

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Three Months Ended March 31, 2021

	Historical BioLife		Historical Global Cooling		Global Cooling Pro Forma Transaction Accounting Adjustments			Pro Forma Combined
(In thousands, except per share and share data)
Product revenue	$	13,776	$	18,463	$	(361)	5(a)	$	31,878
Rental revenue		2,204		-		-			2,204
Service revenue		867		-		-			867
Total product and rental revenue		16,847		18,463		(361)			34,949
Costs and operating expenses:
Cost of product revenue (exclusive of intangible assets amortization)		5,622		13,624		(367)	5(a), 5(e)		18,879
Cost of rental revenue (exclusive of intangible assets amortization)		1,353		-		-			1,353
Cost of service revenue (exclusive of intangible assets amortization)		575		-		-			575
Research and development		1,987		568		-			2,555
Sales and marketing		2,021		1,346		4	5(f)		3,371
General and administrative		4,830		2,404		166	5(f), 5(o)		7,400
Intangible asset amortization		933		-		1,426	5(g)		2,359
Acquisition costs		998		-		-			998
Change in fair value of contingent consideration		(491)		-		-			(491)
Total operating expenses		17,828		17,942		1,229			36,999
Operating income (loss)		(981)		521		(1,590)			(2,050)
Other income (expense)
Change in fair value of warrant liability		(121)		-		-			(121)
Interest expense, net		(16)		(270)		30	5(j)		(256)
Other income (expense)		-		(1)		-			(1)
Total other income (expense)		(137)		(271)		30			(378)
Net loss before provision for income taxes		(1,118)		250		(1,560)			(2,428)
Income tax benefit (expense)		-		-		364	5(p)		364
Net income (loss)	$	(1,118)	$	250	$	(1,196)		$	(2,064)
Net income (loss) attributable to stockholders
Basic		(1,118)		250		(1,196)			(2,064)
Diluted		(1,118)							(2,064)
Earnings (loss) per share attributable to common stockholders:
Basic	$	(0.03)						$	(0.05)
Diluted	$	(0.03)						$	(0.05)
Weighted average shares used to compute earnings (loss) per share attributable to common stockholders:
Basic and Diluted		33,236,818				6,647,697	5(q)		39,884,515

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Fiscal Year Ended December 31, 2020

	Historical BioLife		Historical September 30, 2020 SciSafe		SciSafe Pro Forma Transaction Accounting Adjustments			Pro Forma Adjusted for SciSafe		Historical Global Cooling		Global Cooling Pro Forma Transaction Accounting Adjustments			Pro Forma Combined
(In thousands, except per share and share data)
Product revenue	$	44,540	$	-	$	-		$	44,540	$	39,282	$	(874)	5(a)	$	82,948
Rental revenue		1,795		-		-			1,795		-		-			1,795
Service revenue		1,752		4,526		-			6,278		-		-			6,278
Total product and rental revenue		48,087		4,526		-			52,613		39,282		(874)			91,021
Costs and operating expenses:
Cost of product revenue (exclusive of intangible assets amortization)		18,058		-		-			18,058		27,050		72	5(a), 5(b), 5(e)		45,180
Cost of rental revenue (exclusive of intangible assets amortization)		1,367		-		-			1,367		-		-			1,367
Cost of service revenue (exclusive of intangible assets amortization)		1,221		3,127		170	6(a), 6(b)		4,518		-		-			4,518
Research and development		6,720		-		-			6,720		2,612		(2)	5(e)		9,330
Sales and marketing		6,413		153		11	6(b)		6,577		4,105		18	5(e), 5(f)		10,700
General and administrative		14,607		867		1,214	6(b), 6(c)		16,688		7,988		648	5(e), 5(f), 5(o)		25,324
Intangible asset amortization		3,033		-		789	6(d)		3,822		-		5,703	5(g)		9,525
Acquisition costs		668		-		-			668		-		201	5(i)		869
Change in fair value of contingent consideration		1,575		-		-			1,575		-		-			1,575
Litigation settlement		-		-		-			-		4,000		-			4,000
Total operating expenses		53,662		4,147		2,184			59,993		45,755		6,639			112,387
Operating loss		(5,575)		379		(2,184)			(7,380)		(6,473)		(7,513)			(21,366)
Other income (expense)
Change in fair value of warrant liability		3,601		-		-			3,601		-		-			3,601
Change in fair value of investments		1,319		-		-			1,319		-		-			1,319
Interest income (expense), net		58		(49)		49	6(e)		58		(598)		55	5(j)		(485)
Other income (expense)		-		-		-			-		2,126		-			2,126
Total other income (expense)		4,978		(49)		49			4,978		1,528		55			6,561
Net loss before provision for income taxes		(597)		330		(2,135)			(2,402)		(4,945)		(7,458)			(14,805)
Income tax benefit (expense)		3,264		(95)		498	6(f)		3,667		-		10,238	5(k), 5(p)		13,905
Net income (loss)	$	2,667	$	235	$	(1,637)		$	1,265	$	(4,945)	$	2,780		$	(900)
Net income (loss) attributable to stockholders
Basic		2,450		235		(1,637)			1,265		(4,945)		2,780			(900)
Diluted		(954)														(900)
Earnings (loss) per share attributable to common stockholders:
Basic	$	0.09													$	(0.03)
Diluted	$	(0.03)													$	(0.13)
Weighted average shares used to compute earnings (loss) per share attributable to common stockholders:
Basic and Diluted		27,306,258				459,598	6(g)						6,647,697	5(q)		34,413,553

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

1.	Description of the Transactions

GCI Merger

General Terms and Effects

On March 19, 2021, BioLife Solutions, Inc., a Delaware corporation, entered into an Agreement and Plan of Merger with BLFS Merger Subsidiarity, Inc., a Delaware corporation, Albert Vierling and William Baumel, in their capacity as the representatives of the stockholders of GCI (collectively, the “Seller Representative”) and GCI, Inc., a Delaware corporation.

Merger Consideration

Escrow Shares

SCI 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 “Acquisition”). The Acquisition closed October 1, 2020. At the closing of the Acquisition, the Company issued to the 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 Sellers an additional 626,000 shares of common stock, which shall be issuable to Sellers upon SciSafe achieving certain specified revenue targets in each year from 2021 to 2024. The purchase price was subject to a post-closing working capital adjustment of approximately $53,000.

2.	Basis of Presentation

The unaudited pro forma condensed combined financial statements and these notes present the unaudited pro forma condensed combined financial position and results of operations of BioLife (after giving effect to the Merger with GCI, the Acquisition of SCI, and adjustments described in these notes, subject to the assumptions and limitations described herein), and are intended to illustrate the impact of the Merger on BioLife.

The Merger will be and the Acquisition was accounted for as a business combination using the acquisition method of accounting under the provisions of Accounting Standards Codification ("ASC") 805, "Business Combinations" ("ASC 805"). Under ASC 805, generally all assets acquired and liabilities assumed are recorded at their acquisition date fair value. For pro forma purposes, the fair value of GCI's identifiable tangible and intangible assets acquired and liabilities assumed are based on a preliminary estimate of fair value as of March 31, 2021.

Transaction costs and restructuring costs associated with the business combination are expensed as incurred. The excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill. The accompanying unaudited pro forma condensed combined financial information was prepared in accordance with Article 11 of SEC Regulation S-X.

The unaudited pro forma condensed combined financial statements do not reflect any cost savings, operating synergies or the impact of restructuring actions that the combined company may achieve as a result of the Merger or Acquisition, or the costs necessary to achieve such cost savings, operating synergies or restructuring actions.

The unaudited pro forma condensed combined financial statements and these notes have been prepared using the acquisition method of accounting under ASC 805, based on the historical financial statements, including the related notes, of BioLife, GCI, and SCI. The unaudited pro forma condensed combined balance sheet as of March 31, 2021 reflects the Merger as if it had been completed on March 31, 2021 and combines the consolidated balance sheets of BioLife and GCI as of March 31, 2021. The unaudited pro forma statements of operations reflect the Merger and Acquisition as if they occurred on January 1, 2020. The unaudited pro forma statement of operations for the year ended December 31, 2020 combines the statement of operations of BioLife for the year ended December 31, 2020, the statement of operations of GCI for the year ended December 31, 2020, and the unaudited statement of operations of SCI for the nine months ended September 30, 2020. The unaudited pro forma statement of operations for the three months ended March 31, 2021 combines the statement of operations of BioLife for the three months ended March 31, 2021 and the statement of operations of GCI for the three months ended March 31, 2021.

The historical financial statements of BioLife, GCI, and SCI have been adjusted in the accompanying unaudited pro forma condensed combined financial information to give effect to pro forma events that are transaction accounting adjustments which are necessary to account for the Merger and the Acquisition, in accordance with U.S. GAAP. The unaudited pro forma adjustments are based upon available information and certain assumptions that our management believe are reasonable.

The unaudited pro forma condensed combined financial statements and these notes include unaudited pro forma adjustments based on preliminary valuations of assets and liabilities of GCI. These adjustments are preliminary and will be revised as additional information becomes available and additional valuation work is performed. The final purchase price allocations will be based on the fair value of the assets acquired and the liabilities assumed as of the closing of the Merger. For the purpose of measuring the estimated fair value of the assets acquired and liabilities assumed in determining the final purchase price allocations, BioLife will apply U.S. GAAP for fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market at the measurement date. The fair value measurements will utilize estimates based on key assumptions in connection with the Merger, including historical and current market data. The final purchase price allocation will be determined after the completion of the Merger, and the final allocations may differ materially from those presented in the unaudited pro forma financial statements and these notes.

Included in the historical statement of operations of Global Cooling for the year ended December 31, 2020 are the following nonrecurring items for which no adjustment has been made:

·	Litigation settlement expense was recognized related to a mediation agreement between Global Cooling and a former supplier in the amount of $4.0 million.
·	Gain on debt extinguishments were recognized related to the Paycheck Protection Program and JobsOhio Workforce Retention Loan programs in the amount of approximately $2.1 million.
3.	Estimated consideration and preliminary purchase price allocation
---	---

GCI Merger

BioLife will account for the Merger as the purchase of a business under U.S. GAAP. Under the acquisition method of accounting, the assets of GCI will be recorded as of the acquisition date, at their fair values, and consolidated with BioLife. The preliminary fair value of the net tangible liabilities acquired is $21.4 million, the preliminary fair value of the identifiable intangibles is $120.6 million, and the preliminary residual goodwill is $135.8 million. The fair value estimates required critical estimates, including, but not limited to, future expected cash flows, revenue and expense projections, discount rates and revenue volatility. BioLife believes these estimates to be reasonable. Actual results may differ from these estimates.

The following table summarizes the components of the estimated consideration (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	$	2,224
plus: Net settlement of BioLife accounts receivable	$	16
Merger Consideration	$	234,981

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

The table below represents the estimated preliminary purchase price allocation to the net assets acquired based on their estimated fair values, as well as the associated estimated useful lives of the acquired intangible assets (amounts in thousands). Such amounts were estimated using the financial statements from GCI as of March 31, 2021.

Cash	$	46
Accounts receivable, net		7,280
Inventory		14,148
Prepaid expenses and other current assets		172
Property, plant and equipment, net		3,020
Operating lease right-of-use assets, net		1,789
Financing lease right-of-use assets, net		117
Long-term deposits and other assets		7
Developed technology		18,190
Customer relationships		7,020
Tradenames		26,640
Non-compete agreements		1,240
In-process research and development		67,500
Goodwill		135,785
Accounts payable		(9,674	)
Line of credit		(3,428	)
Lease liabilities, operating		(1,894	)
Lease liabilities, financing		(117	)
Long-term debt		(4,392	)
Deferred tax liability		(23,526	)
Other liabilities		(4,942	)
Fair value of net assets acquired	$	234,981

The fair value of GCI’s identifiable intangible assets, weighted average useful lives, and annual amortization expense have been preliminarily estimated as follows (amounts in thousands):

	Estimated Fair<br><br> <br>Value		Estimated<br><br> <br>Useful Life<br><br> <br>(Years)			Amortization<br><br> <br>Method	Global Cooling<br><br> <br>Pro Forma<br><br> <br>Amortization<br><br> <br>Adjustment
Developed technology	$	18,190		6		Straight-line	$	3,032
Customer relationships		7,020	11	-	12	Straight-line		585
Tradenames		26,640		15		Straight-line		1,776
Non-compete agreements		1,240		4		Straight-line		310
In-process research and development		67,500		N/A		Not applicable		N/A
Total	$	120,590					$	5,703

These preliminary estimates of fair value and estimated useful lives will likely differ from final amounts the Company will calculate after completing a detailed valuation analysis, and the difference could have a material effect on the accompanying unaudited pro forma condensed combined financial statements. A 10% change in the valuation of intangible assets would cause a corresponding increase or decrease in the balance of goodwill of approximately $12.1 million and annual amortization expense of approximately $570,000, assuming an overall weighted average useful life of 11.3 years.

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 and in-process research and development were estimated using a multi-period excess earnings approach. The estimated fair values of customer relationships were estimated using the “distributor method”. 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. The estimated 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.

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

4.	Reclassifications

Certain reclassifications were directly applied to the pre-acquisition historical financial statements of Global Cooling to conform to the financial statement presentation of BioLife. No reclassifications were made to the pre-acquisition historical financial statements of SciSafe.

Reclassifications in the Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2021 are as follows:

(In thousands)	Global Cooling<br><br> <br>Before<br><br> <br>Reclassification			Reclassifications				Global Cooling<br><br> <br>After<br><br> <br>Reclassification
Assets	****	****	****	****	****	****		****	****	****
Current assets
Cash and cash equivalents	$	46		$	-			$	46
Accounts receivable, trade, net		7,540			55		(a)		7,595
Receivables, other		55			(55	)	(a)		-
Inventories		13,148			-				13,148
Prepaid expenses and other current assets		-			546		(b)		546
Prepaid expenses		172			(172	)	(b)		-
Notes receivable, related party		374			(374	)	(b)		-
Total current assets		21,335			-				21,335
Assets held for rent, net
Property and equipment, net		3,591			-				3,591
Long-term deposits and other assets		-			7		(c)		7
Deposits		4			(4	)	(c)		-
Other assets		3			(3	)	(c)		-
Total assets		24,933			-				24,933
Liabilities and Shareholders’ Equity	****	****	****	****	****	****		****	****	****
Current liabilities
Accounts payable		10,005			-				10,005
Accrued expenses and other current liabilities		-			7,210		(d)		7,210
Customer advances		2,647			(2,647	)	(d)		-
Accrued compensation		1,232			(1,232	)	(d)		-
Other accrued expenses		3,302			(3,302	)	(d)		-
Capital lease obligations, current portion		29			(29	)	(d)		-
Line of credit		3,428			-				3,428
Term loan, current portion		263			-				263
Total current liabilities		20,906			-				20,906
Deferred rent, long-term		121			(121	)	(e)		-
Capital lease obligations, long-term		88			(88	)	(e)		-
Term loan, long-term		4,129			-				4,129
Convertible promissory notes payable		1,500			-				1,500
Other long-term liabilities		-			209		(e)		209
Total liabilities		26,744			-				26,744
Preferred stock		3,322			-				3,322
Common stock		3			-				3
Additional paid-in capital		22,434			-				22,434
Accumulated other comprehensive income		(117	)		-				(117	)
Accumulated deficit		(27,687	)		-				(27,687	)
Non-controlling interest		234			-				234
Total shareholders’ equity		(1,811	)		-				(1,811	)
Total liabilities and shareholders’ equity	$	24,933		$	-			$	24,933
(a)	Reflects the reclassification of balances in “Receivables, other” to “Accounts receivable, trade, net”.
---	---

(b)	Reflects the reclassification of balances in “Prepaid expenses” and “Notes receivable, related party” to “Prepaid expenses and other current assets”.
(c)	Reflects the reclassification of balances in “Deposits” and “Other assets” to “Long-term deposits and other assets”.
(d)	Reflects the reclassification of balances in “Customer advances”, “Accrued compensation”, “Other accrued expenses”, and “Capital lease obligations, current portion” to “Accrued expenses and other current liabilities”.
(e)	Reflects the reclassification of balances in “Deferred rent, long-term” and “Capital lease obligations, long-term” to “Other long-term liabilities”.

Reclassifications in the Unaudited Pro Forma Condensed Combined Statement of Operations for the three months ended March 31, 2021 are as follows:

	Historical<br><br> <br>Global Cooling			Reclassifications				Global Cooling<br><br> <br>After<br><br> <br>Reclassification
(In thousands, except per share and share data)	****	****	****	****	****	****		****	****	****
Product revenue	$	-		$	18,463		(a)	$	18,463
Sales, net of discounts and allowances		18,463			(18,463	)	(a)		-
Total product and rental revenue		18,463			-				18,463
Costs and operating expenses:
Cost of product revenue (exclusive of intangible assets amortization)		-			13,624		(b)		13,624
Cost of sales		13,624			(13,624	)	(b)		-
Research and development		-			568		(c)		568
Sales and marketing		-			1,346		(c)		1,346
General and administrative		4,318			(1,914	)	(c)		2,404
Total operating expenses		17,942			-				17,942
Operating income		521			-				521
Other income (expense)
Other expense		(1	)		1		(d)		-
Interest expense		(275	)		275		(e)		-
Interest income		5			(5	)	(e)		-
Interest income (expense), net		-			(270	)	(e)		(270	)
Other income (expense)		-			(1	)	(d)		(1	)
Total other income (expense)		(271	)		-				(271	)
Net income before provision for income taxes		250			-				250
Income tax benefit (expense)		-			-				-
Net income	$	250		$	-			$	250
(a)	Reflects the reclassification of amounts in “Sales, net of discounts and allowances” to “Product revenue”.
---	---
(b)	Reflects the reclassification of amounts in “Cost of sales” to “Cost of product revenue”.
(c)	Reflects the reclassification of amounts in “General and administrative” to “Research and development” and “Sales and marketing”.
(d)	Reflects the reclassification of amounts in “Other expense” to “Other income (expense)”.
(e)	Reflects the reclassification of amounts in “Interest expense” and “Interest income” to “Interest income (expense), net”.

Reclassifications in the Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2020 are as follows:

	Historical<br><br> <br>Global Cooling			Reclassifications				Global Cooling<br><br> <br>After<br><br> <br>Reclassification
(In thousands, except per share and share data)	****	****	****	****	****	****		****	****	****
Product revenue	$	-		$	39,282		(a)	$	39,282
Sales, net of discounts and allowances		39,282			(39,282	)	(a)		-
Total product and rental revenue		39,282			-				39,282
Costs and operating expenses:
Cost of product revenue (exclusive of intangible assets amortization)		-			27,050		(b)		27,050
Cost of sales		27,050			(27,050	)	(b)		-
Research and development		-			2,612		(c)		2,612
Sales and marketing		-			4,105		(c)		4,105
General and administrative		14,705			(6,717	)	(c)		7,988
Litigation settlement		4,000			-				4,000
Total operating expenses		45,755			-				45,755
Operating loss		(6,473	)		-				(6,473	)
Other income (expense)
Debt forgiveness		2,085			(2,085	)	(d)		-
Ohio bureau of workers compensation dividends		40			(40	)	(d)		-
Other income		15			(15	)	(d)		-
Other expense		(14	)		14		(d)		-
Interest expense		(598	)		598		(e)		-
Interest income (expense), net		-			(598	)	(e)		(598	)
Other income (expense)		-			2,126		(d)		2,126
Total other income (expense)		1,528			-				1,528
Net loss before provision for income taxes		(4,945	)		-				(4,945	)
Income tax benefit (expense)		-			-				-
Net loss	$	(4,945	)	$	-			$	(4,945	)
(a)	Reflects the reclassification of amounts in “Sales, net of discounts and allowances” to “Product revenue”.
---	---
(b)	Reflects the reclassification of amounts in “Cost of sales” to “Cost of product revenue”.
(c)	Reflects the reclassification of amounts in “General and administrative” to “Research and development” and “Sales and marketing”.
(d)	Reflects the reclassification of amounts in “Debt forgiveness”, “Ohio bureau of workers compensation dividends”, “Other income”, and “Other expense” to “Other income (expense)”.
(e)	Reflects the reclassification of amounts in “Interest expense” to “Interest income (expense), net”.
5.	Pro Forma Adjustments (GCI Merger)
---	---

This note should be read in conjunction with Notes 1 and 2. Adjustments included in the Global Cooling pro forma transaction accounting adjustments column of the unaudited pro forma condensed combined statements of operations and the unaudited pro forma condensed combined balance sheet include the following:

(a)	Reflects approximately $874,000 and $361,000 of sale and purchase transactions that occurred between BioLife and its subsidiaries and GCI during the year ended December 31, 2020 and the three months ended March 31, 2021, respectively, and related Accounts Receivable and Accounts Payable balances of $615,000 as of March 31, 2021.

(b)	Reflects the estimated step-up of GCI inventory by $1.0 million from carrying value. The fair value calculation is preliminary and subject to change. The step-up in inventory will increase cost of sales as inventory is sold. The increase is reflected in the unaudited pro forma condensed combined statements of operation, as all inventory is anticipated to be sold within one year of the acquisition date.
(c)	Reflects cash deposits of approximately $2.2 million paid by BioLife in 2020 to GCI for freezer purchases. These deposits were recorded in deferred revenue on GCI’s balance sheet as of March 31, 2021. Under ASC 805, these deposits will be treated as effectively settled as a result of the transaction and are included in the Merger Consideration.
(d)	Reflects related party notes receivable of $374,000 that was settled in the close of the transaction.
(e)	Reflects the amount by which the estimated fair market value of GCI’s fixed assets fell below their net historical cost basis by $571,000 and related adjustments to depreciation of approximately $53,000 and $6,000 for the year ended December 31, 2020 and the three months ended March 31, 2021, respectively. The fair value calculation is preliminary and subject to change and will be depreciated over the remaining useful life of the assets.
(f)	Reflects estimated operating lease assets and liabilities of approximately $1.8 million and $1.9 million, respectively, and finance lease assets and liabilities of approximately $117,000 to be recorded under ASC 842 and related differences in lease expense of $22,000 for the year ended December 31, 2020 and $11,000 for the three months ended March 31, 2021 between ASC 840 and ASC 842.
(g)	Reflects the preliminary fair value estimate of identifiable intangible assets to be acquired by BioLife of approximately $120.6 million and estimated amortization expense of $1.4 million for the three months ended March 31, 2021. The fair value calculation is preliminary and subject to change. The identifiable intangible assets include developed technology, customer relationships, trade names, non-compete agreements, and in-process research and development (“IPR&D”). The fair values of the developed technology, customer relationships, trade names, and non-compete agreements were determined primarily using the “income approach,” which requires a forecast of all the expected future cash flows. IPR&D is accounted for as an indefinite-lived intangible asset until completion or abandonment of the related project. Therefore, no pro forma adjustment has been made to the historical amortization expense for IPR&D in the unaudited pro forma combined statements of operations. The IPR&D intangible assets are subject to testing for impairment annually and upon other triggering events.
(h)	Reflects the adjustments to record goodwill related to the transaction.
(i)	Reflects $201,000 of transaction costs that are anticipated to be incurred related to the Merger that were neither accrued nor paid through March 31, 2021.
(j)	Reflects convertible promissory notes payable by GCI in the amount of $1.5 million that were converted to GCI common stock prior to the closing of the transaction and related interest expense of $55,000 and $30,000 incurred during the year ended December 31, 2020 and the three months ended March 31, 2021, respectively.
(k)	Reflects the estimated tax impacts of the Merger to net deferred tax liabilities and the related income tax expense from acquired intangibles. At March 31, 2021, BioLife had $8.5 million in deferred tax assets that were fully reduced by a valuation allowance. The Company estimates that approximately $23.5 million of deferred tax liabilities will be recognized on acquired intangible assets. The valuation allowance is anticipated to be released in full, which will result in $8.5 million of income tax benefit. These estimates are preliminary and are subject to change. Actual results may differ materially from these estimates.
(l)	Reflects the elimination of historical equity of GCI.
(In thousands)	March 31, 2021
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Elimination of Global Cooling preferred stock	$	(3,322	)
Elimination of Global Cooling common stock		(3	)
Elimination of Global Cooling additional paid-in capital		(22,434	)
Elimination of Global Cooling accumulated other comprehensive income		117
Elimination of Global Cooling historical accumulated deficit		27,687
Elimination of Global Cooling non-controlling interest		(234	)
Total adjustment to Global Cooling historical equity	$	1,811
(m)	Reflects the par value of the common stock to be issued to GCI shareholders as consideration for the transaction (in thousands except share, exchange ratio, and par value).
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Global outstanding common stock, including estimated shares to be issued in connection with Global stock options to be exercisable under the assumption of a cashless conversion into Global common stock		364,991
Number of shares to be issued in connection with Global preferred Series A stock conversion into Global common stock		96,013
Number of shares to be issued in connection with Global preferred Series B stock conversion into Global common stock		82,365
Number of shares to be issued in connection with convertible notes stock conversion into Global common stock		16,479
Total Global common stock prior to exchange		559,848
x: exchange ratio		11.85
Total number of shares held by Global stockholders post Merger		6,636,470
Total number of shares held by BioLife stockholders post Merger		33,729,573
Total number of outstanding common stock of combined company	****	40,366,043
BioLife common stock par value	$	0.001
Par value of combined company outstanding common stock	$	40
Less: par value of BioLife stock	$	34
Pro forma adjustment	$	6
(n)	Reflects the fair value of the stock to be issued as Merger Consideration less it’s par value.
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(o)	Reflects compensation adjustments of approximately $641,000 and $160,000 for the year ended December 31, 2020 and three months ended March 31, 2021, respectively, related to one key executive retained from GCI.
(p)	Reflects the income tax effect of unaudited pro forma adjustments at a statutory rate of 23.3% of approximately $1.7 million and $364,000 in the year ended December 31, 2020 and three months ended March 31, 2021, respectively.
(q)	Reflects the number of shares anticipated to be issued as Merger Consideration as adjusted for 10,400 shares to be withheld from issuance in order to satisfy outstanding notes receivable from one GCI stockholder and 11,227 shares that are expected to vest within the first year subsequent to the Merger related to stock compensation to one key executive retained from GCI.
6.	Pro Forma Adjustments (SCI Acquisition)
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This note should be read in conjunction with Notes 1 and 2. Adjustments included in the SciSafe pro forma transaction accounting adjustments column of the unaudited pro forma condensed combined statement of operations include the following:

(a)	Represents the estimated annual depreciation impact of adjusting SciSafe’s fixed assets to fair market value by $405,000 from historical cost basis.
(b)	Represents stock award expense for the stock compensation paid in the transaction and stock awards to SciSafe management and employees.
(c)	Represents salary increase of $150,000 for the twelve months ended December 31, 2020 related to one key executive retained from SciSafe.
(d)	Reflects the annual amortization impact of identifiable intangible assets acquired by BioLife of approximately $12.1 million. The identifiable intangible assets include non-compete agreements, customer relationships, and trade names.
(e)	Reflects interest expense incurred prior to the acquisition between January 1, 2020 and September 30, 2020 on amounts owed to related parties that were settled in the transaction.
(f)	Reflects the income tax impact of the unaudited pro forma adjustments at a statutory rate of 23.3%.
(g)	Reflects the number of additional weighted-average shares that would have been outstanding in the year ended December 31, 2020 had the SciSafe transaction occurred on January 1, 2020.