Item 1.  Business

Overview

Cryoport is a life sciences services company focused on providing critical solutions, such as temperature controlled logistics, bioservices and end-product fulfillment to the biopharma, reproductive medicine and animal health markets. Our differentiated products and services enable our clients to ship, store and deliver biologics and other life sciences commodities in a continual temperature controlled state, including ultra-low cryogenic and other temperature ranges.

Cryoport’s advanced, comprehensive and technology-centric systems and solutions were designed to support the global high-volume distribution of commercial biologic and cell based products regulated by the United States Food and Drug Administration (FDA) and other international regulatory bodies for distribution in the Americas, EMEA (Europe, the Middle East, and Africa) and APAC (Asia-Pacific) regions. Cryoport’s solutions are also designed to support pre-clinical, clinical trials, Biologics License Applications (BLA), Investigational New Drug Applications (IND) and New Drug Applications (NDA) with the FDA as well global clinical trials initiated in other countries, where strict regulatory compliance and quality assurance is mandated. Our industry standard setting Chain of Compliance ^TM solution, which includes vital analytics, such as ‘chain-of-condition’ and ‘chain-of-custody’ information in a single data stream, empowers our clients’ continuous vigilance over their commodities. In addition, our Chain of Compliance ^TM standard ensures full traceability of the equipment used and the processes employed, further supporting each client’s goal to minimize risk and maximize success of their new biologics or other commodities as they are introduced into the global markets.

As part of our services, our technologies provide the ability for Cryoport personnel and our clients to monitor conditions of the internal shipping environment, location and other specified critical variables for each shipment in near real time. In accordance with client requirements, information is recorded and archived for each shipment for scientific, quality assurance and regulatory purposes in a secure cloud-based system that can be accessed globally. This information provides an audit trail that can verify the in-shipment condition in which the life sciences commodity, material, product, vaccine or therapy was shipped and/or stored.

 One of the most important features of our Cryoport Express ^® Solutions is the sophisticated, cloud-based, logistics management platform, which is branded as the Cryoportal ^® Logistics Management Platform. The Cryoportal ^® supports the management of shipments through a single interface, which includes order entry, document preparation, customs documentation, courier management, near real-time shipment tracking, issue resolution, and regulatory compliance requirements. In addition, it provides unique and incisive information dashboards and validation documentation for every shipment through data collected by the SmartPak II™ Condition Monitoring System). The Cryoportal ^® can record and retain a fully documented history of all Cryoport Express ^® Shippers, including ‘chain-of-custody’, ‘chain-of-condition’, ‘chain-of-identity’, and Chain of Compliance ^TM information for each shipment, which is used to ensure that the stability of shipped biologic commodities are maintained throughout the shipping cycle. At the client’s option, recorded information is archived, allowing the client to meet exacting requirements necessary for scientific work and/or for proof of regulatory compliance during the logistics process.

Our Cryoport Express ^® Solutions include a family of Cryoport Express ^® Shippers ranging from liquid nitrogen dry vapor shippers (-150℃) to our C3 ^TM Shippers (2-8℃), which are powered by phase-change materials. Cryoport Express ^® Shippers are precision engineered assemblies that are reliable, cost-effective and reusable or recyclable. Our liquid nitrogen dry vapor Cryoport Express ^® Shippers utilize an innovative application of ‘dry vapor’ liquid nitrogen technology and, most often, include a SmartPak II ^TM Condition Monitoring System. Cryoport Express ^® Shippers meet International Air Transport Association (“IATA”) requirements for transport, including Class 6.2 infectious substances. Cryoport Express ^® Shippers are also International Safe Transit Association (“ISTA”) “Transit Tested” certified.

As part of our services, we assist and/or provide clients with secondary packaging that is placed inside the main chamber of our Cryoport Express® Shippers. In addition to vials, canes, straws, goblets, plates, etc., we also offer engineering and consulting services to assist clients in creating and developing customized secondary packaging that meet their specific requirements.

Our advanced technologies and dedicated personnel allow us to continue to expand our services footprint with a growing suite of services, products and competencies serving the life sciences industry, which currently include: information technology, primary and secondary packaging, near real-time monitoring, analytics, logistics distribution, consulting, laboratory relocation, fleet management, embedded logistics support, validation services (especially for shipping lanes and packaging). A sample of our client facing, value-added competencies addressing specific client requirements are as follows:

In addition to the offerings above, Cryoport is continuously evaluating, expanding and improving its range of services and solutions in response to market needs and client demand.

Competitive Advantages

With our first-to-market and technology-driven logistics services for the life sciences industry and over a decade of experience, we have established a unique lead over potential competitors. Furthermore, we are not aware of any company that offers Cryoport’s full suite of solutions. Working with our tools in information technology, packaging and temperature controlled logistics, we approach our growing markets with innovation, creative thinking and advanced technologies.

The most common alternatives to Cryoport’s solutions are “older technologies” and/or systems. In fact, a portion of the biopharma market and much of the animal health market still uses hazardous liquid nitrogen or dry ice with no ongoing validation processes for their equipment or procedures. In the case of dry ice, the technology delivers temperatures of approximately -80℃ with standard deviations up to 14℃. Consequently, it provides an environment that allows cellular activity to continue and cells to degrade, impacting cell line performance and cell viability. Liquid nitrogen, on the other hand, while effective in holding cryogenic temperatures, is bulky, heavy, expensive and requires special handling to avoid spillage and accommodate weight. Both dry ice and liquid nitrogen are classified “hazardous” by IATA (International Air Transportation Association) and, therefore, are also classified as “dangerous goods,” requiring additional permits and fees. Cryoport solutions on the other hand are classified as non-hazardous.

Through our experience, we know that logistics distribution can have a large impact on product/commodity conditions. This is especially important for high value and at times irreplaceable commodities that we transport, whether in support of a clinical trial or the commercial distribution of a product. We therefore go beyond traditional ISTA (International Safe Transit Association) packaging validation and have implemented Quality-by-Design processes that allow us to assess in-field events, the impact of logistics on the commodity being shipped, and the equipment being used for each individual shipments.

We have been qualified as a trusted temperature controlled logistics solutions provider for hundreds of life sciences companies and institutions and, currently, support over 300 clinical trials in the regenerative medicine space. Cryoport has logged over 260,000 shipments to over 100 countries with hundreds of different types of life sciences materials. This experience and reputation, combined with over a decade of know-how and technology, provides us with significant competitive advantages. In fact, since our inception, we have experienced minimal client attrition.

In addition, Novartis and Kite Pharmaceuticals Inc. (a Gilead company) have both entrusted Cryoport to manage the global clinical shipments of its cell therapies trials and the commercial shipments of its CAR T-cell therapies, Kymriah ^® and Yescarta ^® , respectively, which were the first two CAR T-cell therapies approved by the FDA.

Our competitive position is further enhanced by our respective “ powered by cryoport ^SM ” partnership agreements with FedEx, DHL, UPS, who collectively, have more than 87% of the express logistics aircraft in service and who, respectively, have been expanding other parts of their temperature controlled offerings for the life sciences industry.

We continuously enhance and broaden our solutions offering in order to maintain and extend what we believe to be a significant lead in the marketplace. We believe that it would take a serious potential competitor an extended period of time and investment to build out the tools, solutions, and competencies we possess along with our know-how. In addition to our lead as the first-to-market mover and leader in market share in the regenerative medicine space, we think our biggest competitive advantage falls into our trade secrets and our speed to market with new solutions. Our market leading position enables us to be uniquely tuned to the markets we serve, which enables us to anticipate and quickly react to client needs and market demand. We try to employ the best people in the industry, and we foster the development and implementation of new technologies to maintain that lead. In every aspect possible, we strive to be a ‘green,’ environmentally responsible company, which we consider to be a competitive advantage.

Strategic Logistics Alliances and Collaborations

We have been successful in establishing strategic distribution alliances around the world, under our “ powered by Cryoport ^SM ” strategy, as a long-term method of marketing our solutions to the life sciences industry. We have focused our efforts on leading companies in the logistics services industry as well as participants in the life sciences industry. The “ powered by Cryoport ^SM ” strategy with our alliance partners reflects our solutions being integrated into our alliance partner’s services.

Cryoport now supports the three largest integrators in the world, FedEx, DHL and UPS, with its advanced cryogenic logistics solutions for the life sciences industry and for logistics support. To support each integrator’s marketing efforts, we operate with each independently and confidentially in support of each company’s respective strategy.

FedEx . Since January 2013, we have had a master agreement with Federal Express Corporation (“FedEx”) the FedEx Agreement provides FedEx with a non-exclusive license and right to use a customized version of our Cryoportal ^® Logistics Management Platform for the management of shipments made by FedEx customers. The FedEx Agreement was last amended in December 2018 to extend its term through December 31, 2019, with the intent to develop a new and updated multiyear agreement. Under our FedEx Agreement, we provide frozen shipping logistics services through the combination of our purpose-built proprietary technologies and turnkey management processes. FedEx markets and sells Cryoport’s services for frozen temperature controlled cold chain transportation as its FedEx ^® Deep Frozen Shipping Solution on a non-exclusive basis and at its sole expense. As part of the solution, Cryoport has developed a FedEx branded version of our Cryoportal ^® Logistics Management Platform, which is “ powered by cryoport ^SM ” for use by FedEx and its customers, giving them access to the full capabilities of our cloud-based logistics management software platform.

DHL. Since June 2014, through a master agreement with LifeConEx, a part of DHL Global Forwarding (“DHL”), which automatically renews for successive one-year periods, we have provided DHL with cold chain logistics offerings to its life sciences and healthcare customers with Cryoport’s validated cryogenic solutions. DHL offers Cryoport’s cryogenic solutions through its worldwide Thermonet network of Certified Life Sciences Stations under the DHL brands as “ powered by cryoport ^SM ”. In addition, DHL’s customers have direct access to our cloud-based order entry and tracking portal to order Cryoport Express ^® Solutions and receive preferred DHL shipping rates and discounts. Our proprietary logistics management platform, the Cryoportal ^® , is integrated with DHL’s tracking and billing systems to provide DHL life sciences and healthcare customers with a seamless way of accessing critical information regarding shipments of biological material worldwide.

UPS . Since October 2014, United Parcel Services, Inc. (“UPS”) has been a distributor, under our “ powered by cryoport ^SM ” strategy, by entering into an agreement with UPS Oasis Supply Corporation, a part of UPS, whereby UPS offers our validated and comprehensive cryogenic solutions to its life sciences and healthcare customers on a global basis. Under this agreement, UPS customers have direct access to our proprietary Cryoportal ^® Logistics Management Platform, which is integrated with UPS’s tracking and billing systems, to provide UPS life sciences and healthcare customers with a seamless way to enter orders and access critical information regarding shipments of biological material worldwide.

We also have relationships using our “ powered by cryoport ^SM ” strategy with the following alliance partners:

McKesson Specialty Health, a division of McKesson Corporation. In February 2018, we announced a strategic collaboration with McKesson Specialty Health. Adding Cryoport’s integrated cold-chain capabilities and near real-time monitoring, the McKesson and Cryoport collaboration provides an end-to-end solution for complex products which require high-touch patient access and adherence support as well as temperature controlled product transportation. McKesson Specialty Health works together with stakeholders across the healthcare delivery system to preserve and strengthen specialty care. Cryoport’s solutions coupled with McKesson’s end-to-end patient access and support services are focused on helping patients avoid delays in treatment through accelerated patient on-boarding, prior authorizations, end-user training and comprehensive adherence and educational support programs.

World Courier, a part of AmerisourceBergen. In July 2018 we announced World Courier’s integration of Cryoport’s full suite of temperature controlled solutions into its global network. World Courier is a global specialty logistics company that designs world-class supply chain programs. The integration allows Cryoport’s Chain of Compliance ^TM solutions availability to World Courier clients. The integrated platform combines the strengths of both the Cryoport and World Courier systems to their respective biopharmaceutical clients, allowing each client to proactively minimize risks to their cell and gene therapies through the entire biopharma supply chain in order to maintain the efficacy of their valuable commodities. Our integrated solutions will be offered through World Courier’s global network of more than 140 company-owned offices operating across 50 countries, as well as directly through Cryoport’s business development team.

Be The Match BioTherapies ^® . I n October 2018, we announced a strategic partnership with Be The Match BioTherapies to deliver end-to-end supply chain services to the cell and gene therapy industry. Be The Match BioTherapies is the only cell and gene therapy solutions provider with customizable services to support the end-to-end cell therapy supply chain. Backed by the industry-leading experience of the National Marrow Donor Program/Be The Match, and a research partnership with the CIBMTR ^®  (Center for International Blood and Marrow Transplant Research ^® ), the organization designs solutions that advance cell and gene therapies in any stage of development. By pairing Cryoport’s expertise in temperature controlled logistics with Be The Match BioTherapies’ expertise in apheresis center onboarding and management, case management and logistics, clinical research, and outcomes data collection and analysis, the two organizations will offer full end-to-end supply chain and outcomes support for companies developing and delivering autologous and allogeneic cell and gene therapies. An important part of the agreement is to integrate Be The Match BioTherapies’ MatchSource ^® cell therapy supply chain software and Cryoport’s Cryoportal ^® Logistics Management Platform. The outcome is a platform that manages more cell therapy products than any other solution in the marketplace, enabling cell and gene therapy companies to more rapidly discover, develop and deliver next-generation therapies. Our collaboration will support both organizations’ efforts to standardize critical elements of the cell therapy supply chain, as well as processes in apheresis and transplant center networks.

Cryoport’s Positioning in the Life Sciences Industry

Life sciences technology advancements are expected to have a significant impact on global society over the next 25 years. The industry is growing in a way where research and manufacturing pipelines span across the globe. This also increases the need to mitigate supply chain risks, especially for cellular-based therapies/products and other life sciences commodities today and tomorrow.

Over the past several years, Cryoport has assumed the leadership position in supporting the rapidly growing regenerative medicine market with its temperature controlled logistics solutions. According to the Alliance for Regenerative Medicine’s State of the Industry Briefing in January of 2019, there were 906 regenerative medicine companies worldwide, conducting a total of 1,028 clinical trials of which 92 were in Phase III as of the end of 2018. The total targeted enrollment of patients in regenerative medicine clinical trials word-wide were 59,757 patients. Total global financings in this space were $13.3 billion, up 73% compared to 2017. The FDA stated that by 2025 it predicts that it will be approving 10 to 20 cell and gene therapy products per year. This data further amplifies the significant position regenerative medicine is taking in the development of new therapies and products in the life sciences industry.

The total cold chain logistics market for the life sciences industry has historically grown faster per annum than the total life sciences logistics market. For 2018, global cold chain logistics spending, overall, was forecasted to be $15.0 billion; with approximately $3.4 billion in spending supporting global clinical trials. By 2022, the global life sciences cold chain logistics market is forecast to grow to $18.6 billion for a 24% increase. The majority of the growth is a result of the recent advancements in the development of biologics and cell-based therapies. As a result, scientists, intermediaries, and manufacturers require means for cryogenically transporting and storing their work and products, such as CAR T-cell therapies, where temperatures must be maintained below the “glass point” (generally, below minus 136℃). In addition, our Cryoport Express ^® C3™ solution was specifically developed to address the front-end logistics of some autologous therapies that transport whole blood to the point of manufacturing, requiring a stable 2-8℃ temperature range. It is more robust than any competing shipper today with its exacting and reliable design. These solutions incorporate our Cryoportal ^® Logistics Management Platform and the SmartPak II ^TM Condition Monitoring System, giving our clients a seamless logistics record of all vital information for each therapy shipped on a worldwide basis.

We think Cryoport is appropriately positioned as a life sciences services company focused on providing solutions such as temperature controlled logistics, bioservices and end-product fulfillment, to the regenerative medicine, reproductive medicine and animal health markets.  Our differentiated products and services enable our clients to ship, store and deliver biologics and other commodities required to remain in a continual cryogenic or temperature controlled state, such as CAR-T therapies and other cell therapies, gene therapies, embryos for reproductive medicine, vaccines, and stem cells. Our standard setting Chain of Compliance ^TM , which includes vital analytics, including ‘chain-of-condition’ and ‘chain-of-custody’ information, in a single data stream, allows our clients continuous vigilance over their commodities to minimize risk and maximize success through traceability of the equipment used and the processes employed in supporting each client’s therapy or other commodity.

Life Sciences Customer Agreements

Our clients include life sciences companies and institutions that have engaged us to support their clinical studies and trials as well as the global distribution of their commercial biologics, vaccines and other products with our temperature controlled logistics and bioservices solutions. Our most significant agreements are as follows:

Zoetis. In December 2012, we signed an agreement with Pfizer Inc. relating to Zoetis Inc. (formerly the animal health business unit of Pfizer Inc.) pursuant to which we are now managing all cryogenic shipments of Zoetis’ key poultry vaccines. Under this arrangement, we provide on-site logistics personnel and our Cryoportal ^® Logistics Management Platform to manage shipments from the Zoetis manufacturing site in the United States to domestic customers as well as various international distribution centers. The Company manages Zoetis’ total fleet of shippers used for this purpose, including liquid nitrogen shippers. In July 2013, the Agreement was amended to expand Cryoport’s scope to manage all logistics of Zoetis’ key frozen poultry vaccine to all Zoetis’ international distribution centers as well as all domestic shipments. In October 2013, the Agreement was further amended to further expand Cryoport’s role to include the logistics management for a second poultry vaccine. In September 2015 and May 2018, the Agreement was further amended and extended through March 2019, subject to certain termination and extension provisions. We are currently in discussions with Zoetis to further extend and amend the agreement.

Novartis . In May 2017, we signed an agreement with Novartis Inc. to manage the global clinical and commercial shipments of its CAR T-cell therapies, including the recently commercial launch of CAR T-cell therapy, Kymriah ^® (CTL019), for children and young adults with B-cell ALL that is refractory or has relapsed at least twice. On August 30, 2017 Novartis received from the FDA the first ever CAR T-cell approval for the first indication of Kymriah ^® . Subsequently on May 1, 2018 the FDA approved Kymriah ^® for the treatment for adult patients with relapsed/refractory DLBCL. Following U.S. approvals, on August 27, 2018 the EU approved Kymriah ^® for both ALL and DLBCL. Most recently Kymriah ^® received Canadian approval on September 6, 2018 and Australian approval on December 20, 2018. Novartis has treated patients in 11 countries and has over 500 employees dedicated to the support of Kymriah ^® . Under our agreement with Novartis, Cryoport provides cryogenic packaging and shipping using its Cryoport Express ^® Shippers, monitoring using its SmartPak II ^TM Condition Monitoring System technology and communications and information recording using its Cryoportal ^® Logistics Management Platform to manage shipments from the Novartis manufacturing sites to their clinical and commercial sites for patient administration globally. 

Kite/Gilead . In July 2017, we signed an agreement with Kite Pharmaceuticals Inc. (a Gilead company) to manage the clinical and commercial shipments of its CAR T-cell therapy, Yescarta ^® (Axicabtagene Ciloleucel). On October 18, 2017, Yescarta ^® became the first CAR-T therapy approved by the FDA for the treatment of adult patients with relapsed or refractory large B-cell lymphoma. Additionally, Yescarta ^® received EU approval on August 27, 2018 for relapsed/refractory DLBCL and PMBCL. As of January 31, 2019, Kite had 68 cancer centers authorized to treat patients in the United States and 12 certified in the EU. Through these centers nearly 700 patients have been treated with Yescarta ^® . Under our agreement with Kite, Cryoport provides cryogenic packaging and shipping using its Cryoport Express ^® Shippers, monitoring using its SmartPak II ^TM Condition Monitoring System technology and communications and information recording using its Cryoportal ^® Logistics Management Platform to manage shipments from the Kite manufacturing sites to their clinical and commercial sites of patient administration globally.

Cryoportal ^® Logistics Management Platform

The Cryoportal ^® Logistics Management Platform records and retains a fully traceable and documented history of all serialized equipment and components as part of our Chain of Compliance ^TM solution, as well as “chain-of-condition” and “chain-of-custody” for every shipment, helping ensure that quality, safety, efficacy, and stability of shipped commodities are maintained throughout the process. Additionally, the Cryoportal ^® is used by Cryoport, our clients and business partners to automate the entry of orders, documentation preparation, to assist in managing logistics operations and to reduce administrative costs typically provisioned through manual labor relating to order-entry, order processing, preparation of shipping documents and back-office accounting. It is also used to support the high level of customer service expected by the life sciences industry. Certain features of the Cryoportal ^® are designed to reduce operating costs and facilitate the scaling of Cryoport’s business. Examples of these features include automation of order entry, development of key performance indicators (“KPI’s”) to support efforts for continuous process improvements in our business, and programmatic exception monitoring to detect and sometimes anticipate delays in the shipping process, often before the customer or the shipping company is aware of them. These features offer significant value to our customers in terms of cost avoidance and risk mitigation.

The Cryoportal ^® Logistics Management Platform also serves as the communications center for the management, collection and analysis of SmartPak II ^TM Condition Monitoring System data collected in near real time from the field. Collected data is converted into information reports containing valuable and actionable information that becomes the quality control or “pedigree” of the shipment. This information can be utilized by Cryoport to provide valuable feedback in near real time to our clients relating to their shipments. Additionally, our SmartPak II ^TM Condition Monitoring System provides the ability to apply Quality by Design fundamentals to our logistics solutions enabling intervention and risk mitigation capabilities to be employed.

The Cryoportal ^® Logistics Management Platform has been developed as a “carrier-agnostic” system, allowing clients and the Cryoport Logistics Management team to work with any combination of integrators, freight forwarders, couriers and/or brokers depending on the specific requirements and/or client preferences. To increase operational efficiencies, the Cryoportal ^® Logistics Management Platform is integrated with the tracking systems of FedEx, DHL and UPS and other key logistics providers.

The Cryoportal ^® was developed for time-and temperature-sensitive shipments that are required to be maintained at specific temperatures, beginning with the most demanding cryogenic temperatures (-150℃) and moving upward to ambient (20-25℃) to ensure that the shipped samples/commodities/products are not subject to degradation or out of designated “safe” range temperatures. While our current focus is on cryogenic (-150℃) as well as 2-8℃ logistics within the life sciences industry, the use of the Cryoportal ^® Logistics Management Platform can and may be extended into other temperature controlled ranges for the life sciences. To our knowledge, the Cryoportal ^® Logistics Management Platform is unique to temperature controlled logistics in the life sciences industry. It is robust and has considerable capabilities. We frequently receive favorable feedback about the Cryoportal ^® from our clients and partners.

Cryoport Express ^® Shippers

Our Cryoport Express ^® Shippers are a family of shippers engineered specifically to serve the life sciences industry. Engineering of these devices, which are made up of proprietary packaging, dewar vacuum flasks, near real time electronic monitoring systems and engineered shock absorbing overpackaging requires multiple and varied engineering disciplines. Each Cryoport Express ^® Shipper is ISTA (International Safe Transit Association) validated and IATA, UN, International Civil Aviation Organization (“ICAO”) compliant. Cryoport Express ^® Shippers are the highest level, most comprehensive logistics shippers serving the life sciences industry.

Cryogenic Cryoport Express ^® Shippers employ liquid nitrogen v apor shipper vacuum flask tanks capable of maintaining cryogenic temperatures of minus 150℃ or below for a dynamic shipping period of 10 days or more. A dry vapor cryogenic shipper is a device that uses liquid nitrogen contained inside a vacuum insulated vessel ( vacuum flask tank), which serves as a refrigerant to provide stable storage temperatures below minus 150℃. Our Cryoport Express ^® Shippers are designed to ensure that there is no pressure build up as the liquid nitrogen evaporates. We have developed a proprietary retention system to ensure that liquid nitrogen stays inside the vacuum container, which allows the shipper to be designated as a dry vapor shipper meeting IATA requirements. Biological or pharmaceutical specimens are stored in a specimen chamber, referred to as a “well” inside the container and refrigeration is provided by gas evolving from the liquid nitrogen entrapped within the proprietary retention system. Specimens that may be transported using our cryogenic shipper include: live cells, scientific or pharmaceutical commodities such as cancer therapies, vaccines, diagnostic materials, semen, eggs, embryos, infectious substances, and other commodities that require continuous exposure to cryogenic temperatures, i.e., temperatures below minus 150℃.

An important feature of our Cryoport Express ^® Shippers is their compliance with the stringent packaging requirements of IATA Packing Instructions 602 and 650, respectively. These specifications include meeting internal pressure (hydraulic) and drop performance requirements. Under IATA guidelines, Cryoport Express® Shippers are classified as “Non-hazardous.” Dry ice and liquid nitrogen are classified as “Dangerous Goods.” Our shippers are also in compliance with International Civil Aviation Organization (“ICAO”) regulations that prohibit egress of liquid nitrogen residue from the shipping packages. The ICAO is a United Nations organization that develops regulations for the safe transport of dangerous goods by air.

We currently offer dry vapor shippers with varying storage capacities, including our Cryoport Express ^® Standard Shipper, Cryoport Express ^® High Volume Shipper, Cryoport Express ^® Sliderite ^® Shipper, Cryoport Express ^® CXVC1 Shipper and Cryoport Express ^® CryoMax™, which has a capacity of 36,400 2.0 ml vials. Our Cryoport Express ^® Shippers are composed of aluminum (aircraft-grade) material, with an engineered well for holding high value biologics or other materials in its inner chamber.

Cryoport Express ^® Dry Vapor Shippers

Cryoport Express ^® Dry Vapor Shippers are lighter than liquid nitrogen flasks. They are engineered units that consist of dewar flasks, electronics, and engineered outer packaging. Cryoport Express™ Shippers include re-usable dry vapor liquid nitrogen storage containers (vacuum flask tanks) that, we believe, combine the best features of life sciences packaging, cryogenics science and vacuum insulation technology. Cryoport Express ^® Dry Vapor Shippers are composed of aluminum metallic dewar flasks, with wells for holding the biological material in the inner chambers. The dewar vessel is a device in which the conduction, convection and radiation of heat are reduced as much as possible giving it the capability of maintaining its contents at a near-constant temperature over relatively long periods of time. The inner chamber of the shippers is surrounded by a high surface, low-density material which retains the liquid nitrogen in-situ by absorption, adsorption, and surface tension. Absorption is defined as the taking up of matter in bulk by other matter, as in the dissolving of a gas by a liquid, whereas adsorption is the surface retention of solid, liquid or gas molecules, atoms or ions by a solid or liquid. This material absorbs liquid nitrogen relatively rapidly, while providing our shippers with hold times and capacities to transport biological materials safely and conveniently. The specimen-holding chamber has a primary cap to enclose the specimens/commodities, and a removable and replaceable secondary cap to further enclose the specimen/commodity-holding container and to contain the liquid nitrogen dry vapor. The entire dewar vessel is then wrapped in a plurality of insulating and cushioning materials and placed in an outer packaging that been engineered specifically for absorbing shock and the challenges encountered in transportation. This outer packaging also houses the Smart Pak II™ Condition Monitoring System which communicates with the Cryoportal™ Logistics Management Platform.

Cryoport Express ^® C3™ Shippers

Non-cryogenic, temperature controlled Cryoport Express™ Shippers employ sourced components that are modified and assembled to meet the requirements of the task for which they were designed. An example is the Cryoport Express™ C3™ Shipper.

Cryoport Express ^® C3™ Shippers are designed to maintain a controlled temperature range of 2°-8°C for up to 96 hours under dynamic shipping conditions. These reusable shippers are offered as part of our Cryoport. Certified. Cool. or C3 ^TM Solution. It includes our Cryoport’s SmartPak II™ Condition Monitoring System and the Cryoportal ^® Logistics Management Platform. This solution was introduced to support the growing need in the regenerative therapy market and to enable our clients to utilize our solutions for both, the transportation of leukapheresis and apheresis blood products as well as the manufactured autologous cellular-based immunotherapies.

Cryoport Express ^® Shipper Summary

We believe Cryoport Express® Shippers used in Cryoport Express® Solutions do the best job in the life sciences industry to mitigate risks. We believe that our Cryoport Express® Solutions are the most advanced and most cost-effective temperature controlled logistics solutions available to the life sciences industry. We believe Cryoport Express® Solutions satisfy client needs and scientific and regulatory requirements relating to each shipment of time- and temperature-critical, frozen and/or refrigerated transport of biological materials, such as stem cells, cell lines, pharmaceutical clinical trial samples, gene biotechnology, infectious materials handling, animal and human reproduction markets. We believe that due to our proprietary technology, innovative design and systems, our Cryoport Express® Shippers are less prone to losing critical functional hold time than competing products.

Cryoport Express ^® SmartPak II ^TM Condition Monitoring System

For our clients, condition monitoring is a high-value feature as it is an effective and reliable method to determine that their commodity/product was not damaged and did not experience degradation during shipment due to temperature fluctuations or other undesirable conditions. Our SmartPak II™ Condition Monitoring System is designed to track the key aspects of each shipment that could affect the quality and/or timing of delivery of the commodity/product to its intended destination. This includes near real-time tracking using GPS, cellular and Wi-Fi technologies, technology monitoring of internal and external temperatures, humidity, barometric pressure, shock, orientation of the shipper, as well as exposure to light as a measure of security breaches, compromised packaging or shipper openings during transit. Our exacting temperature sensors are positioned within our Cryoport Express ^® Shippers to record the most accurate readings. The resultant temperature mapping includes both the temperature inside the chamber (which is closest to the actual biomaterial) and the external temperature. Our advanced SmartPak II™ Condition Monitoring System is engineered to work in tandem with our Cryoportal ^® Logistics Management Platform, enabling predictive and proactive monitoring of materials shipped. The data collected and resulting analytics, combined with the mapping of shipment check-in points, provide a holistic view of the complete shipping process. At the client’s election, shipments can have a full ‘chain-of-custody’, chain-of-condition, and chain-of-identity along with other data monitoring analytics. Archival storage is available for every shipment.

Chain-of-Condition, Chain-of-Custody, and Chain-of-Identity

Chain-of-Condition information is essential for many life sciences customers. Our monitoring services are provided by our SmartPak II ^TM Condition Monitoring System, which provides data on the condition of our Cryoport Express ^® Shipper and the conditions in which commodities/products are being shipped, which is critical for temperature-sensitive biologics.

Chain-of-Custody relates to the traceability of which party has the physical custody of the Cryoport Express ^® Shipper during each segment of transport. With the assistance of an overlay on carrier check-ins and our algorithms, our SmartPak II ^TM Condition Monitoring System supplies a data monitor that reports chain-of-custody information, which is another essential information element required for temperature-sensitive biologics.

Chain-of-Identity refers to the traceability of the identity of each client’s or patient’s therapy that is inside of the Cryoport Express ^® Shipper, which can be tracked through the Cryoportal ^® Logistics Management Platform

The Cryoportal ^® Logistics Management Platform acts as the data repository for all shipment and condition information. Our customers can access their information via the cloud-based Cryoportal ^® Logistics Management Platform through an internet connection anywhere in the world and all data is securely retained for quality assurance and regulatory purposes.

Chain of Compliance™

During 2018 we introduced Cryoport’s Chain of Compliance™ solution, as a new industry standard. Cryoport’s Chain of Compliance™ goes beyond Chain of Condition and Chain of Custody by providing traceability of the equipment and processes supporting each client or patient therapy. The Chain of Compliance ^TM enables Cryoport to recall every transport that an individual Cryoport Express ^® Shipper has taken, the client it supported, the commodity transported, it’s performance during transit, and each step that Cryoport performs before the shipper is put back into service. This includes container performance and requalification history, commodity history, courier handling and performance history, calibration history, and correlation competencies that can link in field events to equipment performance. A review of these requirements are as follows:

The main reason that the FDA and other regulatory bodies are interested in Cryoport’s Chain of Compliance ^TM is that it provides the ability to collect, interpret, and leverage comprehensive data enabling a significantly more intelligent supply chain. Rather than reactively trying to determine what has gone wrong after multiple failures, it becomes possible to take a proactive approach. Moreover, we believe that effective implementation provides historical traceability of logistics processes, equipment, and third party support entities, which enables the critical assessment of the complete supply chain to minimize failures and risk.

Cryoport Express ^® Analytics

Cryoport Express ^® Analytics information is captured by the Cryoportal ^® Logistics Management Platform to provide us and our clients access to important information from the shipments, which and assist in the management of our clients’ logistics needs. We use anonymized information to support planning for future features of our solutions offering. Analytics is a term used by IT professionals to refer to performance benchmarks or KPI’s that management utilizes to measure performance against desired standards. Examples for analytics tracked through the Cryoportal ^® include time-based metrics for order processing time and on-time deliveries by our shipping partners, as well as profiling shipping lanes to determine average transit times and predicting potential shipping exceptions based on historical metrics. Our analytics are utilized internally to proactively improve our client services and develop new offerings. Cryoport Express ^® Analytics information is also used by Cryoport Consulting to support some of its work.

Logistics Expertise, Consulting and Support

Cryoport’s client services professionals provide 24/7/365 live logistics and monitoring services with specialized knowledge in the domestic and global logistics of life sciences material requiring controlled temperatures. Cryoport logistics professionals have validated shipping lanes in and out of well over 100 countries to ensure shipments maintain temperatures and arrive securely and on time.

Cryoport Consulting provides consulting services to assist life sciences companies in developing strategies for global cold chain logistics management and contingency options to protect their valuable, and often irreplaceable, biological commodities. Cryoport Consulting addresses the demand created by the worldwide advances in cellular based therapies, including immunotherapies, stem cells and CAR T-cells. Cell-based immunotherapies are driving broad shifts and challenges for the life sciences industry, including how to obtain, properly store and carefully transport the growing number of new, individualized, temperature sensitive therapies. Improper temperature maintenance or temperature excursions during any portion of a logistics cycle can adversely affect the viability of these biologically based commodities. Consequently, strategic, global logistics planning for cryogenic cold chain solutions has taken on a strategic importance to the life sciences industry and a rapidly growing demand for consulting expertise.

Other Development Activities

We continue to build out our ecosystem through partnerships and alliances. We are, also, continuing our research, engineering and development efforts to continue to advance our technology applications for temperature controlled logistics and bioservices. We are further expanding the functionality of our Cryoportal ^® Logistics Management Platform and will advance our Smart Pak II™ Condition Monitoring technology to ensure our continued leadership and the highest level of effectiveness and efficiency in the temperature controlled logistics for the life sciences industry.

Government Regulation

We are subject to numerous domestic federal, state and local laws and regulations and the laws and regulations of global jurisdictions relating to matters regarding shipments, customs, import, safe working conditions, manufacturing practices, environmental protection and disposal of hazardous or potentially hazardous substances. We may incur significant costs to comply with such laws and regulations now or in the future.

The shipping of biologic products, biologic commodities, diagnostic specimens, infectious substances and dangerous goods, whether via air or ground, falls under the jurisdiction of many state, federal and international agencies. The quality of the packaging that protects a product or biologic commodity determines whether or not it will arrive at its destination in a satisfactory condition. Currently the most stringent regulations we are subject to are the dangerous goods regulations. Many of the regulations for transporting dangerous goods in the United States are determined by international rules formulated under the auspices of the United Nations. Dangerous goods are usually one-time shipments and are not a part of our regular recyclable Cryoport Express ^® service. When we ship dangerous goods, we follow strict and stringent guidelines.

The International Civil Aviation Organization (“ICAO”) is the United Nations organization that develops regulations (Technical Instructions) for the safe transport of dangerous goods by air. If shipment is by air, compliance with the rules established by the International Air Transport Association (“IATA”) is required. IATA is a trade association made up of airlines and air cargo couriers that publishes annual editions of the IATA Dangerous Goods Regulations. These regulations interpret and add to the ICAO Technical Instructions to reflect industry practices. Additionally, the Centers for Disease Control (“CDC”) has regulations (published in the Code of Federal Regulations) for interstate shipping of specimens.

Our Cryoport Express ^® Shippers meet Packing Instructions 602 and/or 650 and are certified for the shipment of Class 6.2 Dangerous Goods per the requirements of the ICAO Technical Instructions for the Safe Transport of Dangerous Goods by Air and IATA. Our present and planned future versions of the Cryoport SmartPak II™ Condition Monitoring Systems will likely be subject to regulation by the Federal Aviation Administration (“FAA”), Federal Communications Commission (“FCC”), Food and Drug Administration (“FDA”), IATA and possibly other agencies which may be difficult to determine on a global basis.

Manufacturing and Raw Materials

Manufacturing . We source components for our Cryoport Express ^® Shippers from multiple suppliers that manufacture to our engineering specifications using in part proprietary technology and know-how to mitigate supply chain risks. We also use “of-the-shelf” products, which we may modify to meet our requirements. For some components, however, there are relatively few alternate sources of supply and the establishment of additional or replacement suppliers may or may not be accomplished immediately. Should this occur, we endeavor to mitigate risk by an increase in our inventory level to cover our total forecasted demand giving us time to secure additional qualified suppliers. Some of our Cryoport Express ^® Shippers also use components that were formerly manufactured in-house and that are now outsourced. The central electronic device used in our Smart Pak II ^TM Condition Monitoring System have been acquired from a single source with calibration and alterations done by an independent third party.

Our vendor/partner relationships allow us to concentrate on further advancing and expanding our solutions for the life sciences to meet the growing and varied demands for validated temperature controlled logistics in the life sciences industry. We think our current supply structure provides us the opportunity to rapidly scale to support our client’s commercialization activities; however, we continue to work to improve our current sourcing and to continue to mitigate risks therein.   

Raw Materials . Various common raw materials are used in the manufacture of our shippers and in the development of our technologies. These raw materials are generally available from several alternate distributors and manufacturers. We have not experienced any significant difficulty in obtaining these raw materials.

Patents, Copyrights, Trademarks and Proprietary Rights

In order to remain competitive, we must develop and maintain protection on the proprietary aspects of our technologies. We rely on a combination of patents, copyrights, trademarks, trade secret laws and confidentiality agreements to protect our intellectual property rights.

We currently own eight registered U.S. trademarks and have twenty-two additional trademark applications pending in the U.S. and foreign countries. Five of the pending trademarks are filed under the Madrid Protocol and designate Japan, Australia, Singapore, and the European Union. Our trademarks generally protect the names of our company, products, and key service brands.

Our success depends in part upon our ability to develop proprietary products and technologies and to obtain patent coverage for these products and technologies. We intend to file trademark and patent applications covering any newly developed products, methods and technologies. However, there can be no guarantee that any of our pending or future filed applications will be issued as patents or register as trademarks. There can be no guarantee that the U.S. Patent and Trademark Office or some third party will not initiate an interference proceeding involving any of our pending applications or issued patents. Finally, there can be no guarantee that our issued patents or future issued patents, if any, will provide adequate protection from competition.

Patents provide some degree of protection for our proprietary technology. However, the pursuit and assertion of patent rights involve complex legal and factual determinations and, therefore, are characterized by significant uncertainty. In addition, the laws governing patent issuance and the scope of patent coverage continue to evolve. Moreover, the patent rights we possess or are pursuing generally cover our technologies to varying degrees. As a result, we cannot ensure that patents will issue from any of our patent applications, or that any of its issued patents will offer meaningful protection. In addition, our issued patents may be successfully challenged, invalidated, circumvented or rendered unenforceable so that our patent rights may not create an effective barrier to competition. We must also pay maintenance fees at set intervals for our patents to not expire prematurely. The laws of some foreign countries may not protect our proprietary rights to the same extent as the laws of the United States. There can be no assurance that any patents issued to us will provide a legal basis for establishing an exclusive market for our products or provide us with any competitive advantages, or that patents of others will not have an adverse effect on our ability to do business or to continue to use our technologies freely. As with all patents, we may be subject to third parties filing claims that our technologies or products infringe on their intellectual property. We cannot predict whether third parties will assert such claims against us or whether those claims will hurt our business. If we are forced to defend against such claims, regardless of their merit, we may face costly litigation and diversion of management’s attention and resources. As a result of any such disputes, we may have to develop, at a substantial cost, non-infringing technology or enter into licensing agreements. These agreements may be unavailable on terms acceptable to such third parties, or at all, which could seriously harm our business or financial condition.

With respect to our trademarks, we file and pursue trademark registrations on words, symbols, logos, and other source identifiers that consumers use to associate our products and services with us. Although our registered trademarks carry a presumption of validity, they can be challenged and invalidated and as such, we cannot guarantee that any trademark registration is infallible.

We also rely on trade secret protection of our intellectual property. We attempt to protect trade secrets by entering into confidentiality agreements with employees, consultants and third parties, although, in the past, we have not always obtained such agreements. It is possible that these agreements may be breached, invalidated or rendered unenforceable, and if so, our trade secrets could be disclosed to our competitors. Despite the measures we have taken to protect our intellectual property, parties to such agreements may breach confidentiality provisions in our contracts or infringe or misappropriate our patents, copyrights, trademarks, trade secrets and other proprietary rights. In addition, third parties may independently discover or invent competitive technologies, or reverse engineer our trade secrets or other technology. Therefore, the measures we are taking to protect our proprietary technology may not be adequate.

Customers and Distribution

As a result of growing globalization, including such areas as biologics, biopharma, biotechnology, clinical trials, distribution of biopharmaceutical products and reproductive medicine, the requirement for effective and reliable solutions for keeping clinical samples, pharmaceutical products and other specimen at controlled temperatures takes on added significance due to more complex shipping routes, extended shipping times, custom delays and general logistics challenges. We believe our Cryoport Express ^® Shippers, our SmartPak II™ Condition Monitoring Systems, the Cryoportal ^® Logistics Management Platform and our logistics expertise enable us to be well positioned to take advantage of the growing demand for effective and efficient international transport of temperature sensitive life sciences commodities/products resulting from the sensitivity of the commodities/products being shipped and continued globalization, which is a notable trend within the life sciences and biotechnology industries. This is especially the case for the new therapies being developed in the regenerative medicine market, such as CAR-T cell therapies, that require cryogenic temperatures to maintain efficacy.

There was one customer that accounted for 18.2% of revenues during the year ended December 31, 2018. No other single customer generated over 10% of revenues during the years ended December 31, 2018 and 2017.

Our geographical revenues, by origin, for the years ended December 31, 2018 and 2017 were as follows:

Pharmaceutical Clinical Trials . Every United States based pharmaceutical company developing a new drug must seek drug development protocol approval by the Food and Drug Administration (“FDA”). These clinical trials are designed to test the safety and efficacy of the potential new drug/therapy among other things. A significant amount of clinical trial activity is managed by several large Clinical Research Organizations (“CROs”).

In connection with the clinical trials, due to globalization, companies can enroll patients from all over the world and may need to regularly submit a blood or other specimen at the local hospital, doctor’s office or laboratory. These samples are then sent to specified testing laboratories, which may be local or in another country. The testing laboratories will typically set the requirements for the storage and shipment of blood specimens. In addition, therapies used by the patients may require frozen shipping to the sites of the clinical trials. While both domestic and international shipping of these specimens may be accomplished using dry ice today, international shipments especially present several problems, as dry ice, under the best of circumstances, can only provide freezing for one to two days in the absence of re-icing (which is quite costly). Because shipments of packages internationally can take longer than one to two days or be delayed due to flight cancellations, incorrect destinations, labor problems, ground logistics, customs delays and safety reasons, dry ice is not always a reliable and/or cost-effective option. Clinical trial specimens are often irreplaceable because each one represents clinical data at a prescribed point in time, in a series of specimens on a given patient, who may be participating in a trial for years. Sample integrity during the shipping process is vital to retaining the maximum number of patients in each trial. Our shippers are ideally suited for this market, as our longer hold time ensures that specimens can be sent over long distances with minimal concern that they will arrive in a condition that will cause their exclusion from the trial. There are also many instances in domestic shipments where Cryoport Express ^® Shippers will provide higher reliability and be cost effective.

Furthermore, the IATA requires that all airborne shipments of laboratory specimens be transmitted in either IATA Instruction 650 or 602 certified packaging. We have developed and obtained IATA certification of our Cryoport Express ^® System, which is ideally suited for this market, due to the elimination of the cost to return the reusable shipper.

Biotechnology and Diagnostic Companies . The biotechnology market includes basic and applied research and development in diverse areas such as stem cells, gene therapy, DNA tumor vaccines, tissue engineering, genomics, and blood products. Companies participating in the foregoing fields rely on the frozen transport of specimens in connection with their research and development efforts, for which our Cryoport Express ^® Shippers are ideally suited.

Cell Therapy Companies. Rapid advancements are underway in the research and development of cell based therapies, which involve cellular material being infused into a patient. In allogeneic cell therapies, the donor is a different person than the recipient of the cells. Autologous cell therapy is a personalized therapeutic intervention that uses an individual’s cells, which are cultured and expanded outside the body, and reintroduced into the donor. Once cells are manufactured into a cellular therapy, in either case, they must be shipped cryogenically for which our Cryoport Express ^® Shippers are ideally suited.

Central Laboratories. With the increase and globalization of clinical studies and trials, logistics has become more complex and ensuring sample integrity has become more challenging. International courier costs are now consuming a significant portion of global protocol budgets. We believe laboratories performing the testing of samples collected during the conduct of these global multi-site studies are looking for reliable state-of-the-art logistics solutions.

Pharmaceutical Distribution . The current focus for the Cryoport Express ^® System also includes the area of pharmaceutical distribution. There are a significant number of therapeutic therapies currently or anticipated soon to be undergoing clinical trials. After the FDA approves them for commercial marketing, it will be necessary for the manufacturers to have a reliable and economical method of distribution to the physician who will administer the product to the patient. It is likely that the most efficient and reliable method of distribution will be to ship a single dosage to the administering physician. These therapies are typically identified to individual patients and therefore will require a complete tracking history from the manufacturer to the patient. The most reliable method of doing this is to ship a unit dosage specifically for each patient. If such therapies require maintenance at frozen or cryogenic temperatures, each such shipment will require a cryogenic shipping solution. Cryoport can provide the technology to meet this need.

Distribution of Vaccines and other Products. There are a variety of vaccines and other drugs that require distribution at frozen or cryogenic temperatures that we can serve with our temperature controlled logistics solutions. This includes both the human and animal health markets.

Fertility Clinics and In Vitro Fertilization (“IVF”) . Maintaining cryogenic temperatures during shipping and transfer of in vitro fertilization specimens like eggs, sperm, or embryos is critical for cell integrity in order to retain viability, stabilize the cells, and ensure reproducible results and successful IVF treatment. There are approximately 480 fertility clinics in the U.S. and 3,300 fertility clinics worldwide. Based on third-party market research, the global fertility services market is projected to experience growth at a CAGR of approximately 8.5% through 2023. Around 1.5 million ART (assisted reproductive technology) cycles are performed globally each year. We believe that our solutions for this market, branded as CryoStork℠ services, are very compelling and will allow us to further build out our leadership position.

Sales and Marketing

We currently have a sales and marketing team led by our Chief Commercial Officer that drives our business development, program management, consulting, marketing and other related activities. Given the global nature of our business, we plan to continue to broaden our sales and marketing reach in all corners of the world with emphasis on the Americas, EMEA and the Asia-Pacific regions. We plan to hire additional sales and marketing personnel globally and implement marketing initiatives intended to increase awareness of Cryoport and its advanced temperature controlled solutions serving the life sciences industry.

Industry and Competition

Our products and services are sold into a rapidly growing segment of the temperature controlled logistics industry focused on the temperature sensitive packaging and shipping of biologics and other life sciences commodities. This growth is fueled in part by the advancements in biology and continued globalization, and is expected to continue to increase even more in the future as more domestic and international biotechnology firms expand clinical trials and introduce pharmaceutical products into the market that require continuous transportation and storage at cryogenic temperatures. This principle also applies to the animal health and reproductive medicine markets. We believe these advances will require a greater dependence on passively controlled temperature transport systems (i.e., systems having no external power source). In addition, we expect that industry standards and regulations will be introduced globally, requiring more comprehensive tracking and validation of shipping temperatures.

We believe that advancements and growth in the following markets have resulted in the need for increased reliability, efficiencies and greater flexibility in the temperature sensitive segment of the life sciences logistics and supply chain market:

Cryoport’s solutions are comprehensive and integrated for maximum reliability, economy and total effectiveness. Cryoport’s total logistics solution enables life sciences companies to utilize the superior liquid nitrogen dry vapor technology without having to make capital investments or developing in-house logistics expertise and systems by offering a complete solution, which includes the cloud-based Cryoportal ^® logistics management platform, the SmartPak II™ Condition Monitoring systems and our 24/7/365 logistics support. Cryoport allows the clients to outsource logistics and focus on its core competencies while maintaining visibility of all logistics related information.

Within our targeted biotechnology and life sciences markets there is limited known direct competition to our Cryoport Express ^® Solutions. We compete with liquid nitrogen and dry ice solutions effectively by use of the improved and integrated hardware and software technology in our products including our comprehensive logistics management software platform, the Cryoportal ^® and through the use of our service-enabled business model. Our Cryoport Express ^® Solutions provide simple and cost-effective solutions for temperature controlled transport of biologics and other life sciences materials. The Cryoportal ^® assists with the management, scheduling and shipping of the Cryoport Express ^® Shippers, removing the burdens associated with other methods.

Factors that we believe give us a competitive advantage is our comprehensive and tested business model that fully integrates our Cryoport Express ^® shippers with our Cryoportal ^® Logistics Management Platform and SmartPak II™ Condition Monitoring System into a seamless shipping, tracking and monitoring solution. In addition, we have a first-mover advantage, supporting over 300 clinical trials in the regenerative medicine space. Our reputation, combined with over a decade of know-how and technology, provides us with significant competitive advantages. Since our inception, we have experienced minimal client attrition.

Companies that offer services that could be considered competitive to certain components of our Cryoport Express ^® solutions include Thermo Fisher Scientific Inc., specialty couriers, such as World Courier Group, Inc., Quick Life Science Group and Marken Limited and SAVSU Technologies, Inc. In addition, life science companies can develop their own inhouse temperature controlled logistics solutions by sourcing containers and data loggers and developing software, systems and procedures to cover their logistics needs. However, we have not identified competition that offers a solution that is as comprehensive as our solutions are and has been proven in the global market to the same extent as our solutions have.

Engineering and Development

Our research, development and engineering efforts are focused on continually investigating new technologies that can improve our services and improving the features of our Cryoport Express ^® Solutions, which includes our cloud-based Cryoportal ^® Logistics Management Platform, Cryoport Express ^® Shippers, secondary packaging solutions, our SmartPak II™ and other condition monitoring systems. These efforts are expected to lead to the introduction of additional features, including shippers of varying sizes and for various temperature ranges, based on market requirements, further advanced informatics and improved monitoring systems. We are continuously researching alternative and new technologies, lower cost materials, utilization of higher volume assembly methods, enabling technologies, etc. that will make it practical to provide a wider range of Cryoport Express ^® Solutions.

Alternative technologies to liquid nitrogen in dry vapor form, alternative materials and/or new information and communication technologies may be used in the future to expand our potential market for our Cryoport Express ^® Solutions.

Cryoport’s Quality Assurance Program

Cryoport’s Quality System uses ISO 9001:2008 (Quality management systems – Requirements) as a foundation, along with a structure of procedures and instructions based upon strong operational practices of checks and balances. This system ensures proper controls from the initial contract, through processing, shipping and storage, to proper monitoring and data collection, to successful completion of each transaction or shipment.

The overall Quality Management System is transitioning to ISO 9001:2015, which is expected to be completed in 2019. In addition, the Quality Management System is being enhanced and integrated with GxP elements (i.e. Good Distribution Practices) that are applicable to temperature controlled logistics and bioservices for the life sciences industry. It is Cryoport’s mandate provide the highest level of quality and to meet and/or exceed customer requirements.

This system will further integrate additional elements of Cryoport’s business processes, risk management, design controls, and leadership commitment to the Quality Management System.

Employees

The efforts of our employees are critical to our success. We believe that we have assembled a strong management team with the experience and expertise needed to execute our business strategy. We anticipate hiring additional personnel as needs dictate to implement our growth strategy. As of December 31, 2018, we had ninety-two employees and consultants: seventy-three full-time, one part-time, fifteen temporary and three consultants.

Corporate History and Structure

We are a Nevada corporation originally incorporated under the name G.T.5-Limited (“GT5”) on May 25, 1990. In connection with a Share Exchange Agreement, on March 15, 2005 we changed our name to Cryoport, Inc. and acquired all of the issued and outstanding shares of common stock of Cryoport Systems, Inc., a California corporation, in exchange for 200,901 shares of our common stock (which represented approximately 81% of the total issued and outstanding shares of common stock following the close of the transaction). Cryoport Systems, Inc., which was originally formed in 1999 as a California limited liability company, and subsequently reorganized into a California corporation on December 11, 2000, remains the operating company under Cryoport, Inc. Our principal executive offices are located at 17305 Daimler Street, Irvine, CA 92614. The telephone number of our principal executive offices is (949) 470-2300, and our main corporate website is www.cryoport.com. The information on or that can be accessed through our website is not part of this Form 10-K.

The Company became public by a reverse merger with a shell company in May 2005. Over time the Company has transitioned from being a development company to a fully operational public company, providing temperature controlled logistics solutions to the life sciences industry globally.

Available Information

Our main corporate website address is www.cryoport.com . The information on or that can be accessed through our website is not part of this Form 10-K. We electronically file with the Securities and Exchange Commission (SEC) our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to the reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. We make available free of charge on or through our website copies of these reports as soon as reasonably practicable after we electronically file these reports with, or furnish them to, the SEC. Further, copies of these reports are available at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.