4.	CONSOLIDATED VARIABLE INTEREST ENTITY

In February 2016, the Company contributed the assets acquired in the Sentilus acquisition to a newly formed company, Sentilus Holdco LLC (“Sentilus LLC”). The Company then distributed its interest in Sentilus LLC via a dividend, indirectly, to IVD Intermediate Holdings A Inc., which is the owner of Immucor’s Parent company, IVD Intermediate Holdings B Inc.

Sentilus LLC will continue developing Femtoarrays

and the underlying technology for use in a variety of in vitro diagnostics areas. This business was spun-off from Immucor to be able to separately market the anticipated new product offerings that are expected to have application outside of the Company’s current Transfusion and Transplant markets. The estimated

book value of the assets and liabilities transferred was $6.0 million. The book value includes assets of $1.0 million of cash, $0.5 million of equipment, $18.8 million of identifiable intangible assets, and $0.1 million of goodwill, and liabilities of $7.2 million of deferred income tax liabilities, and a $7.2 million obligation to Immucor for

contingent consideration liabilities.

Sentilus LLC is considered to be a VIE. Sentilus LLC will be operated as a separate business with Immucor as its only current customer. Sentilus LLC and the Company have entered into management services agreements (the “Management Contracts”) pursuant to which Immucor will provide management, financial, legal and human resource services as well as personnel, materials and business locations to Sentilus LLC in exchange for management fees at Immucor’s cost plus a specified “arms-length” margin (which is subject to periodic adjustment). Immucor’s executive management will control and operate the Sentilus LLC business. Immucor is considered the primary beneficiary of Sentilus LLC because it is managing the Sentilus LLC business and providing the necessary personnel and support to operate the business under the terms of the Management Contracts. Accordingly, the financial results of Sentilus LLC are included in the consolidated financial results of the Company.

The operations of Sentilus LLC will be primarily funded through either additional future dividends from Immucor or from additional capital contributions from IVD Holdings Inc. (“Holdings”), the Parent company of IVD Intermediate Holdings A Inc. The Company could be exposed to a loss related to the Sentilus LLC business if there are expenses which are incurred by the Company on behalf of Sentilus LLC under the terms of the Management Contracts and are not reimbursed. This risk is deemed unlikely since all of the entities involved in this arrangement are under the common control of Holdings.

The following table includes the

carrying amounts and classification of the

assets and liabilities of Sentilus LLC that are included in the Company’s consolidated balance sheet as of February 29, 2016 that cannot be used to settle the obligations of Immucor, and are not Immucor’s obligation to pay

(amounts in thousands)

ASSETS			LIABILITIES
Current assets:			Current liabilities:
Cash and cash equivalents	$	1,000		$	-
Total current assets		1,000	Total current liabilities		-

Noncurrent assets:			Noncurrent liabilities:
Property and equipment, net		547	Deferred Income Tax		7,148
Goodwill		105	Obligation to Immucor for contingent consideration liabilities		7,310
Other intangible assets, net		18,822
Total noncurrent assets		19,474	Total noncurrent liabilities		14,458

Total Assets	$	20,474	Total Liabilities	$	14,458