BIOLIFE SOLUTIONS INC

Previous wording

On April 17, 2024, the Company sold all of the issued and outstanding shares of common stock of Global Cooling, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Global Cooling”), to GCI Holdings Company, LLC, an Ohio limited liability company (“GCI Holdings”), pursuant to a Stock Purchase Agreement, by and between the Company and GCI Holdings (the “Global Cooling Divestiture”). The Global Cooling Divestiture was considered a subsequent event of the financial results presented as of March 31, 2024. Global Cooling is therefore presented as a part of our continuing operations as of the three months ended March 31, 2024. For additional information on the details of the Purchase Agreement, see Note 19: Subsequent events, to the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Current wording

On April 17, 2024, the Company sold all of the issued and outstanding shares of common stock of Global Cooling, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Global Cooling”), to GCI Holdings Company, LLC, an Ohio limited liability company (“GCI Holdings”), pursuant to a Stock Purchase Agreement, by and between the Company and GCI Holdings (the “Global Cooling Divestiture”). Upon the execution of the Purchase Agreement, the Global Cooling business is presented in the accompanying condensed financial statements as a discontinued operation for all periods presented. See Note 3: Discontinued operations, to the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.for further details regarding the divestiture.

Previous wording

Total revenue for three and three months ended March 31, 2024 and 2023 consisted of the following:

Current wording

Total revenue for three and six months ended June 30, 2024 and 2023 consisted of the following:

Previous wording

Product revenue was $24.8 million for the three months ended March 31, 2024, representing a decrease of $6.8 million, or 21%, compared with the same period in 2023. The decrease for the three months ended March 31, 2024 is primarily driven by decreases in sales within our ULT freezer and thaw and cell processing product lines compared to the same period in 2023. Decreases in cell processing product revenues are largely driven by an overall decrease in capital expenditure investment from the broader biopharma markets in addition to our customers destocking inventory levels compared to the prior year.

Current wording

Product revenue was $21.3 million for the three months ended June 30, 2024, representing a decrease of $1.5 million, or 6%, compared with the same period in 2023 and was $41.2 million for the six months ended June 30, 2024, representing a decrease of $5.1 million, or 11%, compared with the same period in 2023. The decrease in cell processing product revenues for the three and six months ended June 30, 2024 is largely driven by our customers destocking inventory levels and a decrease in broader biotech funding compared to the same period in 2023.

Previous wording

Product revenue from our cell processing products decreased by $2.8 million, or by 15%, during the three months ended March 31, 2024 compared with the same period in 2023. The decrease in revenue from cell processing products is driven by customers reducing safety stock levels and a decrease in biotech funding that began in the later part of 2023.

Current wording

Product revenue from our cell processing products decreased by $0.7 million and $3.5 million, or by 4% and 9%, during the three and six months ended June 30, 2024, respectively, compared with the same period in 2023. The decrease in revenue from cell processing products is driven by customers reducing safety stock levels and a decrease in biotech funding that began in the later part of 2023.

Previous wording

Product revenue from our biostorage services increased by $0.1 million, or 29%, in the three months ended March 31, 2024, compared with the same period in 2023. The increase relates to larger volumes of consumables sold from our evo product line.

Current wording

Product revenue from our biostorage services decreased by $0.4 million and $0.3 million, or 72% and 42%, in the three and six months ended June 30, 2024, respectively, compared with the same period in 2023. The decrease in the three and six month periods relates to lower volumes of consumables sold from our evo product line.

Previous wording

Service revenue was $5.1 million for the three months ended March 31, 2024, representing an increase of $0.6 million, or 14%, compared with the same period in 2023. The increase relates primarily to the expansion of service revenue generated by SciSafe storage services.

Current wording

Service revenue was $4.4 million and $9.5 million for the three and six months ended June 30, 2024, respectively, representing an increase of $0.3 million and $1.3 million, or 6% and 16%, compared with the same period in 2023. The increase in the three and six month periods relates primarily to the expansion of service revenue generated by SciSafe storage services.

Previous wording

Rental revenue was $1.8 million for the three months ended March 31, 2024, representing an increase of $0.2 million, or 12%, compared with the same period in 2023. The increase is associated with revenue from new customers.

Current wording

Rental revenue was $2.6 million and $4.4 million for the three and six months ended June 30, 2024, representing an increase of $0.3 million, or 14%, and $0.5 million, and 13%, compared with the same periods in 2023. The increase is associated with an expansion of new customers.

Previous wording

Total costs and operating expenses for three months ended March 31, 2024 and 2023 were composed of the following:

Current wording

Total costs and operating expenses for three and six months ended June 30, 2024 and 2023 were composed of the following:

Previous wording

Cost of revenue decreased $4.5 million for the three months ended March 31, 2024, or 19%, compared to the same period in 2023, due primarily to decreases in sales across multiple product lines compared to the prior year.

Current wording

Cost of revenue decreased $4.8 million and $7.4 million for the three and six months ended June 30, 2024, or 26% and 22%, respectively, compared to the same periods in 2023, due primarily to decreases in sales across multiple product lines compared to the prior year.

Previous wording

Cost of revenue inclusive of intangible amortization related to acquired technology was 62% as a percentage of revenue for the three months ended March 31, 2024, compared to 65% as a percentage of revenue for the three months ended March 31, 2023. The decrease in cost of revenue inclusive of intangible amortization related to acquired technology for the three months ended March 31, 2024 is a result of a favorable product mix in our media product line and a greater concentration of higher margin revenue as a percentage of total revenue, in addition to decreases in personnel expenses, including stock-based compensation expenses.

Current wording

Cost of revenue inclusive of intangible amortization related to acquired technology was 49% as a percentage of revenue for both the three and six months ended June 30, 2024, compared to 65% and 69% as a percentage of revenue for the three and six months ended June 30, 2023, respectively. The decrease in cost of revenue inclusive of intangible amortization related to acquired technology for the three and six months ended June 30, 2024 is a result of increased utilization at our biorepository facilities, operational efficiencies, and a more favorable product mix in our media product line, in addition to decreases in personnel expenses, including stock-based compensation expenses.

Previous wording

S&M expense for the three months ended March 31, 2024 decreased $1.4 million, or 22%, compared with the same period in 2023. The decrease is primarily due to a decrease in headcount compared to the prior year, driving decreases in personnel expenses from stock-based compensation.

Current wording

S&M expense for the three and six months ended June 30, 2024 decreased $0.3 million and $1.0 million, or 9% and 13%, compared with the same periods in 2023. The decrease is primarily due to a decrease in headcount compared to the prior year, driving decreases in personnel expenses from stock-based compensation.

Previous wording

R&D expense for the three months ended March 31, 2024 decreased $0.6 million, or 15%, compared with the same period in 2023. The decrease is primarily due to a decrease in headcount compared to the prior year, driving decreases in personnel expenses from stock-based compensation, offset by research milestone payments in relation to our equity investment in PanTHERA.

Current wording

R&D expense for the three and six months ended June 30, 2024 decreased $1.4 million and $2.3 million, or 37% and 32%, respectively compared with the same periods in 2023. The decrease is primarily due to a decrease in headcount compared to the prior year, driving decreases in personnel expenses from stock-based compensation, and lower research milestone payments in relation to our equity investment in PanTHERA.

Previous wording

Intangible asset amortization expense consists of charges related to the amortization of intangible assets associated with the acquisitions of Astero, SAVSU, CBS, SciSafe, Global Cooling, and Sexton in which we acquired definite-lived intangible assets.

Current wording

Intangible asset amortization expense consists of charges related to the amortization of intangible assets associated with the acquisitions of Astero, SAVSU, CBS, SciSafe, and Sexton in which we acquired definite-lived intangible assets. Decreases in our intangible asset amortization expenses for the three and six months ended June 30, 2024 can be attributed to the write-off of intangible assets related to CBS during the third quarter of 2023.

Previous wording

Change in fair value of contingent consideration consists of changes in estimated fair value of our potential earnouts related to our SciSafe acquisition. The benefit recognized in the three months ended March 31, 2023 relates primarily to changes in our estimated probability of achieving earnout targets set forth within the purchase agreements.

Current wording

Change in fair value of contingent consideration consists of changes in estimated fair value of our potential earnouts related to our SciSafe acquisition. The benefit recognized in the three and six months ended June 30, 2023 relates primarily to changes in our estimated probability of achieving earnout targets set forth within the purchase agreements.

Previous wording

Total other income and expenses for the three months ended March 31, 2024 and 2023 were composed of the following:

Current wording

Total other income and expenses for the three and six months ended June 30, 2024 and 2023 were composed of the following:

Previous wording

Interest expense, net incurred during the three months ended March 31, 2024 related primarily to the Term Loan (as defined in Note 13: Long-term debt, to the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q) obtained in September 2022, financed insurance premiums, and the Global Cooling Amended Term Notes (as defined in Note 13: Long-term debt, to the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q). We also earn interest on cash held in our money market account. Decreases in interest expense, net during the three months ended March 31, 2024 can be attributed to the increases in interest income generated by our cash management strategy while interest expenses remained consistent compared to the same period in 2023.

Current wording

Interest expense, net incurred during the three and six months ended June 30, 2024 related primarily to the Term Loan (as defined in Note 13: Long-term debt, to the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q) obtained in September 2022, financed insurance premiums, and indirect tax liabilities. We also earn interest on cash held in our money market account. Increases in interest expense, net during the three and six months ended June 30, 2024 can be attributed to the increases in interest expenses related to the Term Loan compared to the same period in 2023.

Previous wording

On March 31, 2024 and December 31, 2023, we had $46.1 million and $52.3 million in cash, cash equivalents, and available-for-sale securities, respectively.

Current wording

On June 30, 2024 and December 31, 2023, we had $36.9 million and $50.2 million in cash, cash equivalents, and available-for-sale securities, respectively in our continuing operations.

Previous wording

On April 17, 2024, the Company consummated the Global Cooling Divestiture. The Company provided $4.9 million in cash funding to effectuate the transaction and estimates it will pay $2.4 million to the brokers, attorneys, and other external parties. In addition, the Company expects to recognize $10.7 million in expenses in connection with the Global Cooling Divestiture, of which $5.2 million will be paid from cash from operations in the second quarter, for meeting certain post-closing requirements, costs to sell Global Cooling, the assumption of certain liabilities and debt, and severance expenses related to the RIF implemented on the business of Global Cooling, which reduced the Company’s workforce by 47 employees. These expenses are expected to be recognized during the second quarter of 2024. For additional information on the details of the Transaction and its related costs, see Item I, Note 19: Subsequent eventsto the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Current wording

On April 17, 2024, the Company consummated the Global Cooling Divestiture. The Company provided $6.7 million in cash funding to effectuate the transaction and paid $0.6 million to the brokers, attorneys, and other external parties. In addition, the Company recognized $6.1 million in cash expenditures from operations during the three months ended June 30, 2024 to meet certain post-closing requirements, costs to sell Global Cooling, the assumption of certain liabilities and debt, and severance expenses related to the RIF implemented on the business of Global Cooling, which reduced the Company’s workforce by 47 employees. For additional information on the details of the Transaction and its related costs, see Item I, Note 3: Discontinued operationsto the Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Previous wording

Net cash used in operating activities

Current wording

Net cash provided by (used in) operating activities

Previous wording

Net cash used by operating activities was $4.5 million during the three months ended March 31, 2024 compared to $2.7 million during the three months ended March 31, 2023. The increase in cash used by operating activities was primarily due to a decline in revenue in addition to the timing of collection and disbursement of working capital related items in accounts receivable, inventories, accounts payable, and accrued expenses.

Current wording

Net cash provided by operating activities was $2.0 million during the six months ended June 30, 2024 compared to $10.4 million used in operating activities during the six months ended June 30, 2023. The increase in cash provided by operating activities was primarily due to a decrease in operating losses compared to the prior year in addition to the timing of collection and disbursement of working capital related items in inventories, prepaid expenses, accounts payable, and accrued expenses.

Previous wording

Net cash used by investing activities totaled $0.2 million during the three months ended March 31, 2024 compared to $2.9 million provided by investing activities for the three months ended March 31, 2023. The increase in cash used by investing activities was primarily driven by a decrease of $8.9 million in maturities of our investments in available-for-sale marketable securities compared to the prior year. This was offset by a decrease of $3.5 million in property and equipment and assets held for rent purchases and a decrease of $1.8 million in investments made in available-for-sale marketable securities.

Current wording

Net cash used by investing activities totaled $13.7 million during the six months ended June 30, 2024 compared to $12.2 million provided by investing activities for the six months ended June 30, 2023. The increase in cash used by investing activities was primarily driven by the $13.0 million in payments made on the divestiture of Global Cooling in addition to a decrease of $16.3 million in purchases, proceeds, and maturities of our investments in available-for-sale marketable securities compared to the prior year. This was offset by a decrease of $3.5 million in capital expenditures compared to the prior year.

Previous wording

Net cash used by financing activities totaled $1.0 million during the three months ended March 31, 2024, compared to $0.6 million used in financing activities during the three months ended March 31, 2023. The increase in cash used by financing activities was primarily the result of increases in payments on the Company's equipment loans and financed insurance premiums compared to the prior year.

Current wording

Net cash used by financing activities totaled $1.7 million during the six months ended June 30, 2024, compared to $0.1 million provided by financing activities during the six months ended June 30, 2023. The increase in cash used by financing activities was primarily the result of increases in payments on the Company's equipment loans and financed insurance premiums compared to the prior year.

Previous wording

Purchase obligations are defined as agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum, or variable pricing provisions and the approximate timing of the transactions. As of March 31, 2024, our total short-term obligations were $10.0 million.

Current wording

Purchase obligations are defined as agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum, or variable pricing provisions and the approximate timing of the transactions. As of June 30, 2024, our total short-term obligations were $5.8 million.