BIOLIFE SOLUTIONS, INC. Forward Looking Statements
This Quarterly Report on Form 10-Q contains "forward-looking statements" which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements involve a number of risks and uncertainties. We caution readers that any forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement. These statements are based on current expectations of future events. Such statements include, but are not limited to, statements about our products, including our newly acquired products, customers, regulatory approvals, the potential utility of and market for our products and services, our ability to implement our business strategy and anticipated business and operations, in particular following our 2019 acquisitions, future financial and operational performance, our anticipated future growth strategy, including the acquisition of synergistic cell and gene therapy manufacturing tools and services or technologies or other companies or technologies, capital requirements, intellectual property, suppliers, joint venture partners, future financial and operating results, the impact of the COVID-19 pandemic, plans, objectives, expectations and intentions, revenues, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, business strategies, regulatory filings and requirements, the estimated potential size of markets, capital requirements, the terms of any capital financing agreements, cost savings, objectives of management and other statements that are not historical facts. You can find many of these statements by looking for words like "believes," "expects," "anticipates," "estimates," "may," "should," "will," "could," "plan," "intend," or similar expressions in this Quarterly Report on Form 10-Q. We intend that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking statements are based on the current beliefs and expectations of our management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results may differ materially from current expectations and projections. These risks and uncertainties include those factors described in greater detail in the risk factors disclosed in our Form 10-K for the fiscal year endedDecember 31, 2019 filed with theSEC . Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those anticipated in these forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or, in the case of documents referred to or incorporated by reference, the date of those documents. All subsequent written or oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events, except as may be required under applicableU.S. securities law. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Further information on potential risk factors that could affect our financial results are included in the filings made by us from time to time with theSecurities and Exchange Commission including under the sections entitled "Risk Factors" in our Annual Report on Form 10-K for the year endedDecember 31, 2019 and our Quarterly Report on Form 10-Q for the quarter endedMarch 31, 2020 . Overview
Management's discussion and analysis provides additional insight into the
Company and is provided as a supplement to, and should be read in conjunction
with, our Annual Report on Form 10-K for the fiscal year ended
We were incorporated inDelaware in 1987 under the nameTrans Time Medical Products, Inc. In 2002, the Company, then known asCryomedical Sciences, Inc. , and engaged in manufacturing and marketing cryosurgical products, completed a merger with our wholly-owned subsidiary,BioLife Solutions, Inc. , which was engaged as a developer and marketer of biopreservation media products for cells and tissues. Following the merger, we changed our name toBioLife Solutions, Inc. We develop, manufacture and market bioproduction tools to the cell and gene therapy ("C>") industry, which are designed to improve quality and de-risk biologic manufacturing and delivery. Our products are used in basic and applied research, and commercial manufacturing of biologic-based therapies. Customers use our products to maintain the health and function of biologic material during sourcing, manufacturing, storage, and distribution of cells and tissues. 27
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We currently operate as one bioproduction tools business with product lines that support several steps in the biologic material manufacturing and delivery process. We have a diversified portfolio of tools that focus on biopreservation, frozen storage, and thawing of biologic materials. We have in-house expertise in cryobiology and continue to capitalize on opportunities to maximize the value of our product platform for our extensive customer base through both organic growth innovations and acquisitions. Our Products
Our bioproduction tools are comprised of four main product lines
? Biopreservation media ? Automated thawing devices ? Cloud connected "smart" shipping containers ? Freezer and storage technology and related components Biopreservation media Our proprietary biopreservation media products, HypoThermosol® FRS and CryoStor®, are formulated to mitigate preservation-induced, delayed-onset cell damage and death, which result when cells and tissues are subjected to reduced temperatures. Our technology can provide our C> customers with significant shelf life extension of biologic source material and final cell products, and can also greatly improve post-preservation cell and tissue viability and function. Our biopreservation media is serum-free, protein-free, fully defined, and manufactured under current Good Manufacturing Practices (cGMP). We strive to source wherever possible, the highest available grade, multi-compendium raw materials. We estimate our media products have been incorporated in over 400 customer clinical applications, including numerous chimeric antigen receptor (CAR) T cell and other cell types. Stability (i.e. shelf-life) and functional recovery are crucial aspects of academic research and clinical practice in the biopreservation of biologic-based source material, intermediate derivatives, and isolated/derived/expanded cellular products and therapies. Limited stability is especially critical in the C> field, where harvested cells and tissues will lose viability over time, if not maintained appropriately at normothermic body temperature (37ºC) or stored in a hypothermic state in an effective preservation medium. Chilling (hypothermia) is used to reduce metabolism and delay degradation of harvested cells and tissues. However, subjecting biologic material to hypothermic environments induces damaging molecular stress and structural changes. Although cooling successfully reduces metabolism (i.e., lowers demand for energy), various levels of cellular damage and death occur when using suboptimal methods. Traditional biopreservation media range from simple "balanced salt" (electrolyte) formulations to complex mixtures of electrolytes, energy substrates such as sugars, osmotic buffering agents and antibiotics. The limited stability which results from the use of these traditional biopreservation media formulations is a significant shortcoming that our optimized proprietary products address with great success. Our scientific research activities over the last 20+ years enabled a detailed understanding of the molecular basis for the hypothermic and cryogenic (low-temperature induced) damage/destruction of cells through apoptosis and necrosis. This research led directly to the development of our HypoThermosol® FRS and CryoStor® technologies. Our proprietary biopreservation media products are specifically formulated to:
? Minimize cell and tissue swelling
? Reduce free radical levels upon formation
? Maintain appropriate low temperature ionic balances
? Provide regenerative, high energy substrates to stimulate recovery upon
warming
? Avoid the creation of an acidic state (acidosis)
? Inhibit the onset of apoptosis and necrosis
A key feature of our biopreservation media products is their "fully-defined"
profile. All of our cGMP products are serum-free, protein-free and are
formulated and filled using aseptic processing. We strive to use
USP/Multicompendial grade or the highest quality available synthetic components.
We believe that all of these features benefit prospective customers by
facilitating the qualification process required to incorporate our products into
their regulatory filings.
The results of independent testing demonstrate that our biopreservation media
products significantly extend shelf-life and improve cell and tissue post-thaw
viability and function. Our products have demonstrated improved biopreservation
outcomes, including greatly extended shelf-life and post-thaw viability, across
a broad array of cell and tissue types.
Competing biopreservation media products are often formulated with simple
isotonic media cocktails, animal serum, potentially a single sugar or human
protein. A key differentiator of our proprietary HypoThermosol FRS formulation
is the engineered optimization of the key ionic component concentrations for low
temperature environments, as opposed to normothermic body temperature around
37°C, as found in culture media or saline-based isotonic formulas. Competing
cryopreservation freeze media is often comprised of a single permeating
cryoprotectant such as dimethyl sulfoxide ("DMSO"). Our CryoStor formulations
incorporate multiple permeating and non-permeating cryoprotectant agents which
allow for multiple mechanisms of protection and reduces the dependence on a
single cryoprotectant. We believe that our products offer significant advantages
over in-house formulations, or commercial "generic" preservation media,
including, time saving, improved quality of components, more rigorous quality
control release testing, more cost effective and improved preservation efficacy.
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We estimate that annual revenue from each customer commercial application in which our products are used could range from$0.5 million to$2.0 million , if such application is approved and our customer commences large scale commercial manufacturing of the biologic based therapy.
Automated, Water-Free Thawing Products
InApril 2019 , we acquiredAstero Bio Corporation ("Astero"), to expand our bioprocessing tools portfolio and diversify our revenue streams. The Astero ThawSTAR® line includes automated vial and cryobag thawing products that control the heat and timing of the thawing process of biologic material. Our customizable, automated, water-free thawing products uses algorithmic programmed, heating plates to consistently bring biologic material from a frozen state to a liquid state in a controlled and consistent manner. This helps reduce damage during the temperature transition. The ThawSTAR products can reduce risks of contamination versus using a traditional water bath.
evo® Cloud Connected Shipping Containers
InAugust 2019 , we acquired the remaining shares ofSAVSU Technologies, Inc. ("SAVSU") we did not previously own. SAVSU is a leading developer and supplier of next generation cold chain management tools for cell and gene therapies. The evo.is cloud app allows biologic products to be traced and tracked in real time. Our evo platform consists of rentable cloud-connected shippers and include technologies that enable tracking software provides real-time information on geolocation, payload temperature, ambient temperature, tilt of shipper, humidity, altitude, and real-time alerts when a shipper has been opened. Our internally developed evo.is software allows customers to customize alert notifications both in data measurements and user requirements. The evo Dry Vapor Shipper ("DVS") is specifically marketed to cell and gene therapies. The evo DVS has improved form factor and ergonomics over the traditional dewar, including extended thermal performance, reduced liquid nitrogen recharge time, improved payload extractors and ability to maintain temperature for longer periods on its side. We utilize couriers who already have established logistic channels and distribution centers. Our strategy greatly reduces the cash need to build out specialized facilities around the world. Our partnerships with several white glove couriers allow us to scale our sales and marketing effort by utilizing their salesforce. Our courier partnerships market our evo platform to their existing cell and gene therapy customers as a cost effective and innovative solution. We also market directly to our existing and prospective customers who can utilize the evo platform through our courier partnerships.
Liquid Nitrogen Freezer and Storage Devices
InNovember 2019 , we acquiredCustom Biogenic Systems, Inc. ("CBS") a global leader in the design and manufacture of state-of-the-art liquid nitrogen laboratory freezers, cryogenic equipment and accessories. The addition ofCBS allows for product line growth, diversification of revenue and reduction of supply chain costs for our evo dry vapor shippers. Included inCBS's product line of liquid nitrogen freezers are the Isothermal LN2 freezers, constructed with a patented system which stores liquid nitrogen in a jacketed space in the walls of the freezer. This dry storage method eliminates liquid nitrogen contact with stored specimens, reduces the risk of cross-contamination and provides increased user safety in a laboratory setting. To accommodate customer requirements, we offer customizable features including wide bodied and extended height. Our freezer offerings also include high capacity rate freezers which are fully customizable to customer needs with temperature range of -180°C to +50°C and freezing rates of 0.01 to 99.9 per minute. Password protected software aids in compliance with 21 CFR Part 11 and unlimited programming capability, these high capacity rate freezers provide a searchable database for freeze run history and allow freeze data to be saved. To accompany the offerings of cryogenic freezer equipment, we supply equipment for storing critically important biological materials. This storage equipment includes upright freezer racks, chest freezer racks, liquid nitrogen freezer racks, canisters/cassettes and frames as well as laboratory boxes and dividers. Due to our onsite design and manufacturing capability, racks and canisters can be customized to address customers' varying requirements, In order to provide customers with a proactive approach to safety and monitoring of equipment containing liquefied gas,CBS offers Versalert, a patented wireless remote asset monitoring system that can monitor and record temperatures from -200°C to +50°C, and monitor and record two additional variables using 0-5v or 4-20mA inputs. With an intelligent mesh network with three times the range of competing products, the system enables customers to view current equipment conditions and receive alarm notification on smartphones, tablets or personal computers and maintain permanent electronic records for regulatory compliance and legal verification. 29
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Critical Accounting Policies and Estimates
A "critical accounting policy" is one which is both important to the portrayal of our financial condition and results and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. For a description of our critical accounting policies that affect our more significant judgments and estimates used in the preparation of our consolidated financial statements, refer to Management's Discussion and Analysis of Financial Condition and Results of Operations and our significant accounting policies in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year endedDecember 31, 2019 filed with theSEC . Results of Operations The recent COVID-19 outbreak, and the resulting restrictions intended to slow the spread of COVID-19, including stay-at-home orders, business shutdowns and other restrictions, has affected the Company's business in several ways. In the last two weeks ofMarch 2020 , the Company received higher than average orders for its cryopreservation media products. The Company estimates that a total of between$1.5 to$2.0 million of orders for cryopreservation were shipped to customers wanting to have product on hand in the event of any potential supply disruptions. At this time, the Company is unable to determine whether the incremental cryopreservation "safety stock" orders represent a permanent inventory layer for our customers, or whether it was simply a "pull forward" of demand, which could result in lower cryopreservation orders in subsequent periods. Further, while the sales of our automated thaw and freezer product lines were not materially effected in the three months endedMarch 31, 2020 , we believe the sales of these capital equipment products were negatively impacted in the three months endedJune 30, 2020 , due to customer facility closures which resulted in delaying deliveries and recognizing revenue. We also believe that new capital equipment decisions may be further delayed due to the pandemic, which would impact our automated thaw and freezer product lines, although at this time, the Company cannot estimate the financial impact.
The following discussion of the financial condition and results of operations should be read in conjunction with the accompanying condensed consolidated financial statements and the related footnotes thereto.
Revenues In 2019, we acquired three companies which resulted in increased revenue diversification compared to prior years, in which nearly all revenue was derived from our biopreservation media product line. In the three and six months endedJune 30, 2020 , we saw a more diversified revenue, both in terms of product and customer concentration, a trend we expect to see continue through 2020.
The following table represents revenues by product line for the three and six
months ended
Three Months Ended June 30, Six Months Ended June 30,
(In thousands, except percentages) 2020 2019 2020 2019
Biopreservation media $ 6,667 $ 6,327 $ 15,339 $ 12,097
Automated thawing 376 374 770 374
evo shippers 439 - 877 -
Freezers and accessories 2,438 - 5,096 -
Total revenue $ 9,920 $ 6,701 $ 22,082 $ 12,471
Revenue increased by $3.2 million , or 48%, in the three months ended June 30,
2020 compared with 2019, and by $9.6 million , or 77% in the six months ended
June 30, 2020 , compared to 2019. The increase is due to the acquisitions
throughout 2019 and an increase in product revenue of our biopreservation media
products. Product revenue of our biopreservation media products increased by
$340,000 , or 5% in the three months ended June 30, 2020 compared with the same
period in 2019, and increased by $3.2 million , or 27% in the six months ended
June 30, 2020 compared to the same period in 2019. We estimate that we received
approximately $1.5 to $2.0 million in incremental media revenue resulting from
what we believe were safety stock purchases of media as a result of COVID-19.
Our biopreservation media products continued to be adopted by customers in the
C> market and we realized a higher selling price per liter and more volume in
2020 compared to 2019. Revenue is impacted by the relatively high degree of
customer concentration, the timing of orders, the development efforts of our
customers or end-users and regulatory approvals for biologics that incorporate
our products, which may result in significant quarterly fluctuations. Such
quarterly fluctuations are expected, but they may not be predictive of future
revenue or otherwise indicative of a trend. We also expect to see quarterly
fluctuations based on large customer ordering patterns throughout 2020. Due to
the COVID-19 pandemic, while the sales of our automated thaw and freezer product
lines were not materially effected in the three months ended March 31, 2020 , we
believe the sales of these capital equipment products were negatively impacted
in the second quarter ended June 30, 2020 , due to customer facility closures
resulting in delayed deliveries. We also believe that new capital equipment
decisions may be delayed due to the pandemic, which would impact our automated
thaw and freezer product lines, although at this time, the Company cannot
estimate the financial impact.
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Table of Contents Costs and Operating Expenses
Total costs and operating expenses for three and six months ended
Three Months Ended June 30,
(In thousands) 2020 2019 % Change
Operating expenses:
Cost of product and rental revenue $ 4,499 $ 1,968 129 %
Research and development 1,477 691 114 %
Sales and marketing 1,366 945 45 %
General and administrative 3,278 2,207 49 %
Intangible assets amortization 706 104 579 %
Acquisition costs 13 39 (67 %)
Change in fair value of contingent consideration (1,463 ) - - %
Total costs and operating expenses $ 9,876 $ 5,954 66 %
% of revenue 99 % 89 %
Six Months Ended June 30,
(In thousands) 2020 2019 % Change
Operating expenses:
Cost of product and rental revenue $ 9,067 $ 3,616 151 %
Research and development 3,140 1,050 199 %
Sales and marketing 2,942 1,782 65 %
General and administrative 6,413 4,359 47 %
Intangible assets amortization 1,394 104 1,240 %
Acquisition costs 238 247 (4 %)
Change in fair value of contingent consideration (1,526 )
- - %
Total costs and operating expenses $ 21,668 $ 11,158 94 %
% of revenue 98 % 89 %
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Cost of product and rental revenue
In the three and six months endedJune 30, 2020 cost of revenue increased$2.5 million and$5.5 million , or 129% and 151%, respectively, when compared to the same period in 2019, due primarily to the increase in revenue mentioned above. We expect that cost of product revenue may fluctuate in future quarters based on production volumes and product mix. The product lines acquired in 2019 have a higher cost of product revenue than our biopreservation media products. Cost of product revenue as a percentage of revenue was 45%, and 29% for the three months endedJune 30, 2020 and 2019, respectively. Cost of product revenue as a percentage of revenue was 41%, and 29% for the six months endedJune 30, 2020 and 2019, respectively. Cost of product revenue in the three and six months endedJune 30, 2020 includes$190,000 and$386,000 in inventory step-up related amortization recorded in the purchase accounting of our Astero andCBS acquisitions. The increase in cost of product revenue as a percentage of revenue is a result of the inventory step-up, and higher costs of product revenue as a percentage of revenue for the product lines acquired in 2019 through the Astero, Savsu andCBS acquisitions.
Research and Development Expenses
Research and development ("R&D") expense consist primarily of salaries and other personnel-related costs, consulting and external product development services.
R&D expense for the three and six months endedJune 30, 2020 increased$786,000 and$2.1 million , or 114% and 199%, respectively, compared with the same periods in 2019. The increase is primarily due to our three acquisitions in 2019 and stock compensation expense.
We expect our R&D expense to increase as we continue to expand, develop and refine the product lines we acquired in 2019.
Sales and Marketing Expenses
Sales and marketing expense ("S&M") consists primarily of salaries and other
personnel-related costs, stock compensation expense, trade shows, travel, sales
commissions and advertising.
S&M expense for the three and six months ended June 30, 2020 increased $421,000
and $1.2 million , or 45% and 65%, respectively, compared with the same periods
in 2019. The increase reflects the S&M costs we absorbed related to our
acquisitions, stock compensation expense and an increase in our direct selling
costs.
We expect S&M expense to increase, as we expand our direct selling efforts to support the broader product line offerings resulting from our 2019 acquisitions.
General and Administrative Expenses
General and administrative ("G&A") expense consists primarily of personnel-related expenses, non-cash stock-based compensation for administrative personnel and members of the board of directors, professional fees, such as accounting and legal, and corporate insurance.
G&A expenses for the three and six months endedJune 30, 2020 increased by$1.1 million and$2.1 million , or 49% and 47%, respectively, compared with the same periods in 2019. The increase reflects the assumption of G&A expenses related to our 2019 acquisitions, and the continued buildout of our administrative infrastructure, primarily through increased headcount and information technology expenditures, to support expected future growth and stock compensation expense.
We expect G&A expense to increase reflecting the infrastructure and costs related to supporting the larger expected enterprise created as a result of our 2019 acquisitions.
Intangible asset amortization expense
Amortization expense consists of charges related to the amortization of
intangible assets associated with acquisitions, Astero, SAVSU and
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Table of Contents Acquisition costs
Acquisition costs consist of legal, accounting, third-party valuations, and
other due diligence costs incurred related to our Astero, SAVSU and
Change in fair value of contingent consideration
Change in fair value of contingent consideration consists of changes in estimated fair value of our potential earnouts related to our Astero andCBS acquisitions. Due to COVID-19 and the near-term reduction in capital expenditures by our customers, we reduced our expected revenue in the earnout period related to Astero andCBS in the second quarter of 2020. We recorded a gain in the change of fair value of contingent consideration of$1.5 million . Other Income and Expense
Total other income and expenses for the three and six months ended
Three Months Ended June 30,
(In thousands, except percentages) 2020 2019 $ Change % Change
Change in fair value of warrant liability $ (16,442 ) $ 3,586 $ (20,028 ) (559 %)
Interest income (expense), net 18 137 (119 ) (87 %)
Other - (1 ) 1 100 %
Loss on equity method investment - SAVSU - (217 ) 217 100 %
Total other income (expenses) $ (16,424 ) $ 3,505 $ (19,929 ) (569 %)
Six Months Ended June 30,
(In thousands, except percentages) 2020 2019
$ Change % Change
Change in fair value of warrant liability
134 %
Interest income (expense), net 47 307 (260 ) (85 %)
Other (5 ) (4 ) (1 ) (25 %)
Loss on equity method investment - SAVSU - (448 ) 448 100 %
Total other income (expenses) $ 5,514 $ (16,222 ) $ 21,736 134 %
Change in fair value of warrant liability. Reflects the changes in fair value
associated with the periodic "mark to market" valuation of certain warrants that
were issued in 2014. On May 14, 2020 , we issued an aggregate of 2,747,970 shares
of Company common stock upon cashless exercise of an aggregate of 3,871,405
warrants, reducing our warrant liability by $33.1 million , which represents the
fair value of the warrants at the time or exercise. Due to the increase in our
stock price during the three months ended June 30, 2020 from March 31, 2020 , the
fair value of the warrant liability had increased at the time of the cashless
warrant exercise compared to our fair value warrant liability at March 31, 2020 .
A non-cash loss of $16.4 million was recorded in Other income (expenses) due to
the change in fair value of our warrant liability. During the six months ended
June 30, 2020 from December 31, 2019 , we had a lower warrant liability and a
corresponding, non-cash gain of $5.5 million due to the cashless exercises and
change in fair value of our warrant liability.
Interest income (expense), net. We earn interest on cash held in our money
market account. We had a lower weighted average cash balance in our money market
account for the three and six months ended
Loss on equity method investment. The non-cash loss associated with our proportionate share of the net loss in our investment in SAVSU prior to our acquisition of the remaining shares of SAVSU and subsequent consolidation of SAVSU in our financial statements.
Liquidity and Capital Resources
OnJune 30, 2020 andDecember 31, 2019 , we had$29.9 million and$6.4 million in cash and cash equivalents, respectfully. We acquired Astero onApril 1, 2019 for$12.5 million in cash and contingent consideration of up to$8.5 million . We paid$483,000 for the earnout related to 2019 revenues of Astero in the second quarter of 2020. OnAugust 8, 2019 , we acquired the remaining shares of SAVSU which we did not own for 1,100,000 shares of common stock. OnNovember 12, 2019 , we acquiredCBS for$11.0 million in cash,$4.0 million in shares of our common stock, and up to$15.0 million in contingent consideration payable in cash or stock (which payment requirement has not been triggered or otherwise paid to date). 33
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OnMay 22, 2020 , the Company closed on a share purchase agreement withCasdin Capital LLC , a current stockholder of the Company, pursuant to which Casdin invested$20 million in the Company. OnJuly 7 , we closed our public offering of 5,951,250 shares of common stock at the public offering price of$14.50 per share, which includes the shares purchased pursuant to the exercise in full of the underwriters' option to purchase up to an additional 776,250 shares of its common stock. The net proceeds from the offering to BioLife, after deducting underwriting discounts and commissions and estimated offering expenses, were approximately$81 million . Based on our current expectations with respect to our future revenue and expenses, we believe that our current level of cash and cash equivalents including proceeds from the Casdin investment, will be sufficient to meet our liquidity needs for at least the next 12 months. However, if our revenues do not grow as expected, including as a result of the COVID-19 pandemic, and if we are not able to manage expenses sufficiently, we may be required to obtain additional equity or debt financing. Further, the Company may choose to raise additional capital through a debt or equity financing in an attempt to mitigate the heightened level of business uncertainty caused by the COVID-19 pandemic, or in order to pursue additional acquisition or strategic investment opportunities. Additional capital, if required, may not be available on reasonable terms, if at all. Cash Flows Six Months Ended June 30, (In thousands) 2020 2019 $ Change Operating activities$ 4,890 $ 1,079 $ 3,328 Investing activities (1,683 ) (12,705 ) 11,022 Financing activities 20,224 586 20,121 Net increase (decrease) in cash and cash equivalents$ 23,431 $ (11,040 ) $ 34,471 34
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Net Cash Provided by Operating Activities
During the six months endedJune 30, 2020 , net cash provided by operating activities was$4.9 million compared to$1.1 million for the six months endedJune 30, 2019 . The increase in cash provided by operating activities was the result of timing of collections from our increased revenue, partially offset by increased expenses from our 2019 acquisitions.
Net cash used by investing activities totaled$1.7 million during the six months endedJune 30, 2020 compared to$12.7 million for the six months endedJune 30, 2019 . Cash used in investing activities in the six months endedJune 30, 2020 was primarily from the purchasing of assets held for rent for SAVSU. In the six months endedJune 30, 2019 , we used$12.4 million to purchase Astero. Both period investing activities included similar amounts of purchases of property and equipment.
Net Cash Provided by Financing Activities
Net cash provided by financing activities totaled$20.2 million during the six months endedJune 30, 2020 , compared to$586,000 during the six months endedJune 30, 2019 . Net cash provided by financing activities in the six months endedJune 30, 2020 was primarily the result of our$20 million sale of common stock toCasdin Capital , partially offset by$483,000 of contingent consideration paid for the Astero acquisition. Both the 2020 and 2019 periods included proceeds received from stock option exercises and warrant exercises.
Off-Balance Sheet Arrangements
As of
Contractual Obligations We previously disclosed certain contractual obligations and contingencies and commitments relevant to us within the financial statements and Management Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year endedDecember 31, 2019 , as filed with theSEC . There have been no significant changes to these obligations in the three and six months endedJune 30, 2020 .
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