7 .	Stock-Based Compensation

Stock Compensation Plans

Our stock-based compensation programs are long-term retention programs that are intended to attract, retain and provide incentives for talented employees, officers and directors, and to align stockholder and employee interests. We have the following stock-based compensation plans and programs:

During

2013,

we adopted the

2013

Performance Incentive Plan (the

“2013

Plan”), which allows us to grant options or restricted stock units to all employees, including executive officers, outside consultants and non-employee directors. An aggregate of

3.1

million shares of common stock were initially reserved for issuance under the

2013

Plan. In

May 2017,

the shareholders approved an increase in the number of shares available for issuance to

4.1

million shares. As of

December 31, 2018,

there were outstanding options to purchase

2.6

million shares of Company common stock and

280,000

unvested restricted stock awards outstanding under the

2013

Plan.

The Company also issued, outside any approved compensation plans, non-incentive stock options. As of

December 31, 2018,

there were

425,000

such options outstanding.

Issuance of Shares

When options and warrants are exercised, it is the Company’s policy to issue new shares.

Stock Option Activity

Service Vesting-Based Stock Options

The following is a summary of service vesting-based stock option activity for

2018

and

2017,

and the status of service vesting-based stock options outstanding at

December

31,

2018

and

2017:

	Year Ended					Year Ended
	December 31, 201 8					December 31, 201 7
				Wtd. Avg.					Wtd. Avg.
				Exercise					Exercise
	Shares			Price		Shares			Price
Outstanding at beginning of year		2,390,012		$	1.85		2,513,861		$	1.78
Granted		––			––		155,000			2.93
Exercised		(330,983	)		1.36		(131,427	)		1.17
Forfeited		(15,627	)		4.34		(52,932	)		3.45
Expired - vested		––			––		(94,490	)		1.78
Outstanding at end of year		2,043,402		$	1.91		2,390,012		$	1.85

Stock options exercisable at year end		1,661,999		$	1.87		1,583,585		$	1.72

We recognized stock compensation expense of

$597,000

and

$612,000

related to service vesting-based options during the years ended

December 31, 2018

and

2017,

respectively. Weighted average fair value of service vesting-based options granted was

none

and

$1.91

per share for the years ended

December 31, 2018

and

2017,

respectively.

During the year ended

December 31, 2018,

service vesting-based options covering

330,983

shares of common stock with a total intrinsic value of

$3.8

million were exercised. During the year ended

December 31, 2017,

service vesting-based options covering

131,427

shares of common stock with a total intrinsic value of

$91,817

were exercised.

As of

December 31, 2018,

there was

$20.7

million of aggregate intrinsic value of outstanding service vesting-based stock options, including

$16.9

million of aggregate intrinsic value of exercisable service vesting-based stock options. Intrinsic value is the total pretax intrinsic value for all “in-the-money” options (i.e., the difference between the Company’s closing stock price on the last trading day of

2018

and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options as of

December 31, 2018.

This amount will change based on the fair market value of the Company’s stock.

The following table summarizes information about service vesting-based stock options outstanding at

December

31,

2018:

Range of Exercise Prices				Number Outstanding at December 31, 201 8		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price
$	0.49	-	1.00		3,571		2.91	$	.49
$	1.01	-	1.50		412,073		1.91	$	1.24
$	1.51	-	2.50		1,549,367		6.52	$	1.94
$	2.51	-	8.60		78,391		6.69	$	4.99
					2,043,402		5.59	$	1.91

The weighted average remaining contractual life of exercisable service vesting-based options at

December 31, 2018,

5.4

years. Total unrecognized compensation cost of service vesting-based stock options at

December

31,

2018

$531,000

is expected to be recognized over a weighted average period of

1.5

years.

Performance-based Stock Options

The Company’s Board of Directors implemented a Management Performance Bonus Plan for

2017.

Based on achieving varying levels of specified revenue for the year ending

December 31, 2017,

up to

1,000,000

options to purchase shares of the Company’s common stock

may

be vested. The options have an exercise price of

$1.64,

and if revenue levels for

2017

were met, vest

50%

on the release of the Company’s audited financial statements for

2017,

and

50%

one

year thereafter. If the minimum performance targets are

not

achieved,

options will vest. On

February 27, 2018,

the Company’s Board of Directors determined that, subject to the completion of the

2017

audit, the specified revenue target had been achieved. Accordingly,

999,997

options to purchase shares of the Company’s common stock will vest as follows:

50%

of the options vested on

March 8, 2018

and the remaining

50%

vested on

March 8, 2019.

The following is a summary of performance-based stock option activity under our stock option plans for

2018

and

2017,

and the status of performance-based stock options outstanding at

December 31, 2018

and

2017:

	Year Ended					Year Ended
	December 31, 2018					December 31, 2017
				Wtd. Avg.				Wtd. Avg.
				Exercise				Exercise
	Shares			Price		Shares		Price
Outstanding at beginning of year		999,997		$	1.64		999,997	$	1.64
Granted		––			––		––		––
Exercised		(35,000	)		1.64		––		––
Outstanding at end of year		964,997		$	1.64		999,997	$	1.64

Stock options exercisable at year end		465,001		$	1.64		––	$	––

We recognized stock compensation expense of

$509,000

related to performance-based options during each of the years ended

December 31, 2018

and

2017.

During the year ended

December 31, 2018,

performance-based options covering

35,000

shares of common stock with a total intrinsic value of

$285,000

were exercised. As of

December 31, 2018,

there was

$10.0

million of aggregate intrinsic value of outstanding performance-based stock options including

$4.8

million of aggregate intrinsic value of exercisable performance-based stock options. The weighted average remaining contractual life of outstanding and exercisable performance-based options at

December 31, 2018,

3.0

years. All compensation cost related to the

2017

performance-based stock options was recognized at

December 31, 2018.

Restricted Stock

The following is a summary of unvested restricted stock activity for

2018

and

2017,

and the status of unvested restricted stock outstanding at

December

31,

2018

and

2017:

	Year Ended					Year Ended
	December 31, 201 8					December 31, 201 7
				Wtd. Avg.					Wtd. Avg.
				Grant Date					Grant Date
	Shares			Fair Value		Shares			Fair Value
Outstanding at beginning of year		237,926		$	1.79		98,439		$	1.90
Granted		181,268			7.02		207,350			1.76
Vested		(116,647	)		1.81		(51,563	)		1.90
Forfeited		(22,628	)		3.95		(16,300	)		1.76
Non-vested at end of year		279,919		$	5.00		237,926		$	1.79

The aggregate fair value of the awards granted during the years ended

December 31, 2018

and

2017

was

$1.3

million and

$365,000,

respectively, which represents the market value of BioLife common stock on the date that the restricted stock awards were granted. The aggregate fair value of the restricted stock awards that vested during the years ended

December 31, 2018

and

2017

was

$1.1

million and

$154,000,

respectively.

We recognized stock compensation expense of

$413,000

and

$149,000

related to restricted stock awards during the years ended

December 31, 2018

and

2017,

respectively. As of

December 31, 2018,

there was

$1.1

million in unrecognized compensation costs related to restricted stock awards. We expect to recognize those costs over

3.0

years.

We recorded total stock compensation expense for the years ended

December 31, 2018

and

2017,

as follows:

	Year Ended December 31,
(In thousands)	2018		201 7
Research and development costs	$	260	$	237
Sales and marketing costs		269		231
General and administrative costs		809		638
Cost of product sales		181		164
Total	$	1,519	$	1,270