BioLife Solutions(BLFS) - 2023 Q2 - Quarterly Report

Revenue Performance - Product revenue from cell processing products increased by $3.3 million and $7.4 million, or 22% and 24%, for the three and six months ended June 30, 2023, respectively, compared to the same period in 2022[243]. - Product revenue for the three months ended June 30, 2023, was $33.0 million, a decrease of $1.1 million, or 3%, compared to the same period in 2022[268]. - Revenue from storage and storage services increased by $0.4 million, or 258%, for the three months ended June 30, 2023, compared to the same period in 2022[269]. - Service revenue was $4.2 million for the three months ended June 30, 2023, representing an increase of $0.5 million, or 13%, compared to the same period in 2022[270]. - Total revenue for the six months ended June 30, 2023, was $77.2 million, an increase of $0.5 million, or 1%, compared to the same period in 2022[268]. Expenses - General and administrative expenses increased by $3.8 million and $7.1 million, or 32% and 30%, for the three and six months ended June 30, 2023, respectively, compared to the same period in 2022[247]. - Total operating expenses for the three months ended June 30, 2023, were $54.8 million, a decrease of $62.3 million or 53% compared to the same period in 2022[246]. - Cost of product, rental, and service revenue increased by $1.5 million and $0.7 million for the three and six months ended June 30, 2023, or 6% and 1%, respectively, compared to the same periods in 2022[246]. - Research and development expenses increased by $1.4 million, or 41%, for the three months ended June 30, 2023, compared to the same period in 2022[276]. - General and administrative expenses are expected to increase due to infrastructure and costs related to supporting the larger expected enterprise from the growth strategy[274]. - Research and development expenses are expected to increase as the company continues to expand, develop, and refine its product line offerings[252]. Cash Flow and Financial Position - The net increase in cash and cash equivalents for the six months ended June 30, 2023, was $1.93 million, compared to a decrease of $45.65 million in the same period in 2022[259]. - Net cash used by operating activities was $10.4 million during the six months ended June 30, 2023, a decrease from $17.8 million used in the same period in 2022[282]. - Cash, cash equivalents, and available-for-sale securities totaled $48.1 million as of June 30, 2023, down from $64.1 million as of December 31, 2022[298]. Strategic Outlook - The company estimates that annual revenue from each customer application using its Sexton vials and media could range from $500,000 to $2.0 million if approved for large-scale commercial manufacturing[231]. - The company expects sales and marketing expenses to increase as it expands its direct selling efforts to support the expansion of its product line offerings[250]. - The company may pursue additional capital through debt or equity financing for acquisitions or strategic investments, depending on future needs[298]. Internal Controls and Risk Factors - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were not effective due to material weaknesses in internal controls over financial reporting[304]. - Material weaknesses identified include inadequately designed entity-level controls, ineffective risk assessment procedures, and insufficient oversight, impacting the accuracy of consolidated financial statements[304]. - The company does not expect its disclosure controls and procedures to prevent all errors and fraud, indicating a limitation in the effectiveness of its control systems[305]. - There are no material changes to the risk factors described in the Annual Report on Form 10-K for the period ended December 31, 2022, which could affect future performance[309]. Product and Service Development - The company has a diversified portfolio of bioproduction tools and services that focuses on biopreservation, cell processing, and cold-chain transportation[225]. - The company is a leading developer of next-generation cold chain management tools for cell and gene therapies, including cloud-connected shipping containers[238].