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What changed in Bionano Genomics, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Bionano Genomics, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+611 added−573 removedSource: 10-K (2025-03-31) vs 10-K (2024-03-05)

Top changes in Bionano Genomics, Inc.'s 2024 10-K

611 paragraphs added · 573 removed · 430 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

114 edited+21 added−49 removed181 unchanged
Biggest changeThe Stratys system is expected to enable a four-fold increase in raw data generation rate compared to the Saphyr® system and is designed for maximum lab flexibility by enabling up to 12 single access chips, accessible as they complete runs, without the need to batch multiple samples on a consumable. ◦ We released VIA software, which replaces NxClinical™ software with a simple and integrated workflow for visualization, interpretation, and reporting for OGM, microarray and next-generation sequencing (NGS) data types for enhanced contextualization across multiple variant types and accelerated time to results at a reduced cost. ◦ We released a pre-commercial version of the Ionic Purification System for isolation of DNA for OGM analysis running in the field with the full commercial launch planned for the second half of 2024. ◦ We launched an OGM laboratory developed test (LDT) for constitutional genetic disease applications through Bionano Laboratories.
Biggest changeThe Stratys™ system is expected to enable a four-fold increase in raw data generation rate compared to the Saphyr® system and is designed for maximum lab flexibility to enable routine use in consolidating legacy cytogenetic workflows into streamlined OGM workflows. • Released advancements in data analysis with updates to VIA ™ software, which provides a simple and integrated workflow for visualization, interpretation, and reporting for OGM, microarray and NGS data types for enhanced contextualization across multiple variant types and accelerated time to results while reducing the cost of analysis by lowering the amount of high-cost labor required. • Released the first version of a computation solution for OGM developed in collaboration with NVIDIA, called Stratys™ Compute , which, along with a new analysis pipeline, can accelerate data analysis times compared to its predecessor, Saphyr® Compute.
In addition to the three areas of the genomics market that are driving demand for the OGM systems today, we believe the combination of NGS and OGM can provide the most comprehensive and cost-effective analysis of genome variants from SNVs to whole chromosomes.
In addition to the three areas of the genomics market that we believe are driving demand for the OGM systems today, we believe the combination of NGS and OGM can provide the most comprehensive and cost-effective analysis of genome variants from SNVs to whole chromosomes.
OGM has also been shown to identify structural changes in chromosomes that cannot be identified using current commercially available gene sequencing solutions. We market and sell the Ionic ® Purification system, which is able to deliver high quality DNA in a more natural, native form and with fewer contaminants when compared to other isolation and purifications solutions.
OGM has also been shown to identify structural changes in chromosomes that cannot be identified using current commercially available gene sequencing solutions. We market and sell the Ionic ® Purification system, which is able to deliver high quality DNA in a more natural, native form and with fewer contaminants when compared to other isolation and purification solutions.
In addition, various states have enacted similar laws modeled after the FCA that apply to items and services reimbursed under Medicaid and other state health care programs, and, in several states, such laws apply to claims submitted to any payor. 26 Table of Contents Civil Monetary Penalties Law The federal Civil Monetary Penalties Law (the “CMP Law”), prohibits, among other things, (1) the offering or transfer of remuneration to a Medicare or state health care program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies; (2) employing or contracting with an individual or entity that the provider knows or should know is excluded from participation in a federal health care program; (3) billing for services requested by an unlicensed physician or an excluded provider; and (4) billing for medically unnecessary services.
In addition, various states have enacted similar laws modeled after the FCA that apply to items and services reimbursed under Medicaid and other state health care programs, and, in several states, such laws apply to claims submitted to any payor. 25 Table of Contents Civil Monetary Penalties Law The federal Civil Monetary Penalties Law (the “CMP Law”), prohibits, among other things, (1) the offering or transfer of remuneration to a Medicare or state health care program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies; (2) employing or contracting with an individual or entity that the provider knows or should know is excluded from participation in a federal health care program; (3) billing for services requested by an unlicensed physician or an excluded provider; and (4) billing for medically unnecessary services.
We believe the three areas of the genomics market that are driving demand for the OGM systems today: • Consolidation of traditional cytogenetics techniques in two applications - constitutional genetic disease and cancer. To provide a robust clinical analysis, cytogenetic assays detect SVs that are linked to specific diseases or therapeutic responses.
We believe there are three areas of the genomics market that are driving demand for the OGM systems today: • Consolidation of traditional cytogenetics techniques in two applications - constitutional genetic disease and cancer. To provide a robust clinical analysis, cytogenetic assays detect SVs that are linked to specific diseases or therapeutic responses.
We believe that if our OGM-based solutions can successfully penetrate these addressable market opportunities, and should spur additional basic and translational research creating new areas where the OGM instruments and OGM data can be used to improve the standard of care and patient management.
We believe that our OGM-based solutions can successfully penetrate these addressable market opportunities, and should spur additional basic and translational research creating new areas where the OGM instruments and OGM data can be used to improve the standard of care and patient management.
We believe that DNA isolation and purification processes that allow long segments of DNA (ultra-high molecular weight (UHMW) DNA) to remain intact are important for the success of OGM. Our Ionic Purification system has the capability to isolate and purify UHMW DNA that is ideal for OGM applications.
We believe that DNA isolation and purification processes that allow long segments of DNA (ultra-high molecular weight (“UHMW”) DNA) to remain intact are important for the success of OGM. Our Ionic® Purification system has the capability to isolate and purify UHMW DNA that is ideal for OGM applications.
In addition to a robust and active patent portfolio, we believe that our software and algorithms for analysis, visualization and interpretation of genomic data represent a valuable asset that we continue to develop and exploit through current and planned software offerings. 20 Table of Contents Government Regulation Our business is subject to and impacted by extensive and frequently changing laws and regulations in the United States (at both the federal and state levels) and internationally.
In addition to a robust and active patent portfolio, we believe that our software and algorithms for analysis, visualization and interpretation of genomic data represent a valuable asset that we continue to develop and exploit through current and planned software offerings. 19 Table of Contents Government Regulation Our business is subject to and impacted by extensive and frequently changing laws and regulations in the United States (at both the federal and state levels) and internationally.
Most 510(k)s do not require supporting data from clinical trials, but the FDA may request such data. 21 Table of Contents Premarket Approval Pathway A PMA must be submitted if a new device cannot be cleared through the 510(k) process. The PMA process is generally more complex, costly and time consuming than the 510(k) process.
Most 510(k)s do not require supporting data from clinical trials, but the FDA may request such data. 20 Table of Contents Premarket Approval Pathway A PMA must be submitted if a new device cannot be cleared through the 510(k) process. The PMA process is generally more complex, costly and time consuming than the 510(k) process.
Although OGM is our primary focus, the Ionic Purification system has a current customer base of non-OGM users that use the system to isolate and purify nucleic acid molecules from sample types including formalin-fixed, paraffin-embedded (FFPE) sample, tissue, cells, and viral. We anticipate continuing to support and expanding this customer base.
Although OGM is our primary focus, the Ionic® Purification system has a current customer base of non-OGM users that use the system to isolate and purify nucleic acid molecules from sample types including formalin-fixed, paraffin-embedded (“FFPE”) sample, tissue, cells, and viral. We anticipate continuing to support and expanding this customer base.
Our field application specialists are technical experts with advanced degrees, including nine with PhDs., and generally have extensive experience in academic research and core sequencing lab experience. In addition, we maintain an applications lab team in San Diego, California composed of scientific experts who can transfer knowledge from the research and development team to the field application specialists.
Our field application specialists are technical experts with advanced degrees, including some with PhDs., and generally have extensive experience in academic research and core sequencing lab experience. In addition, we maintain an applications lab team in San Diego, California composed of scientific experts who can transfer knowledge from the research and development team to the field application specialists.
Because of these factors and the budget cycles of our customers, our sales cycle, the time from initial contact with a customer to our receipt of a purchase order, can often be nine to 12 months. Bionano Laboratories primarily sells a suite of LDTs to pediatric physicians through a physician-directed “in-person” sales model.
Because of these factors and the budget cycles of our customers, our sales cycle, the time from initial contact with a customer to our receipt of a purchase order, can often be nine to 12 months. Bionano Laboratories primarily offered a suite of LDTs to pediatric physicians through a physician-directed “in-person” sales model.
This industry leading, platform agnostic software solution is designed to provide analysis, visualization, interpretation and reporting of SVs, single-nucleotide variants and absence of heterozygosity across the genome in one consolidated view. Our software currently enables analysis of OGM, next-generation sequencing (NGS) and microarray data.
This industry leading, platform agnostic software solution is designed to provide analysis, visualization, interpretation and reporting of SVs, single-nucleotide variants and absence of heterozygosity across the genome in one consolidated view. Our software currently enables analysis of OGM, next-generation sequencing (“NGS”) and microarray data.
Using this technology, long (UHMC) nucleic acids can be suitably labeled and elongated in order to ascertain structural information such as scaffold organization, copy number, and genomic repeats that is not readily obtained with current sequencing-based approaches.
Using this technology, long (UHMW) nucleic acids can be suitably labeled and elongated in order to ascertain structural information such as scaffold organization, copy number, and genomic repeats that is not readily obtained with current sequencing-based approaches.
Bionano Laboratories plans to expand its testing menu with inclusion of OGM to demonstrate workflow implementation in a clinical setting in order to drive adoption as well as serve as a conduit for enabling access for those customers unable to make a capital equipment expenditure.
Bionano Laboratories may expand its testing menu with inclusion of OGM to demonstrate workflow implementation in a clinical setting in order to drive adoption as well as serve as a conduit for enabling access for those customers unable to make a capital equipment expenditure.
Other Regulatory Requirements Our laboratories, and the laboratories of Bionano Laboratories, are subject to federal, state and local regulations relating to the handling and disposal of regulated medical waste, hazardous waste and biohazardous waste, including chemical, biological agents and compounds, blood and bone marrow samples and other human tissue.
Our laboratories, and the laboratories of Bionano Laboratories, are subject to federal, state and local regulations relating to the handling and disposal of regulated medical waste, hazardous waste and biohazardous waste, including chemical, biological agents and compounds, blood and bone marrow samples and other human tissue.
These may include preconception, products of conception and prenatal 16 Table of Contents genetic applications, uses to advance gene editing techniques and precision medicine. In the long term, we anticipate potential opportunities in newborn screening, population genomics, and neurological and cardiological risk assessment. Our Strategy We are primarily focused on driving adoption of OGM through our OGM systems.
These may include preconception, products of conception and prenatal genetic applications, uses to advance gene editing techniques and precision medicine. In the long term, we anticipate potential opportunities in newborn screening, population genomics, and neurological and cardiological risk assessment. Our Strategy We are primarily focused on driving adoption of OGM through our OGM systems.
We believe the integration of OGM with data types common in the industry, such as Variant Call Format (VCF), and Binary Alignment Map (BAM), into the VIA software should accelerate and broaden our position in digital cytogenetics and comprehensive genome analysis by enabling us to simplify the assessment of clinically relevant variants in cytogenomics applications, potentially reducing interpretation time per sample and expanding our reach into the discovery and translational research markets through the combination of OGM and NGS.
We believe the integration of OGM with data types common in the industry, such as Variant Call Format (“VCF”), and Binary Alignment Map (“BAM”), into the VIA software should accelerate and broaden our position in digital cytogenetics and comprehensive genome analysis by enabling us to simplify the assessment of clinically relevant variants in cytogenomics applications, potentially reducing interpretation time per sample and expanding our reach into the discovery and translational research markets through the combination of OGM and NGS.
We invented, patented, developed and commercialized nanochannel arrays to capture long single molecules of DNA from a solution and unwind and linearize them for SV analysis. Each molecule is imaged separately, making it possible to deconvolute complex mixtures including haplotypes and heterogeneous tumors. 11 Table of Contents • DNA labeling chemistry specifically for physical mapping.
We invented, patented, developed and commercialized nanochannel arrays to capture long single molecules of DNA from a solution and unwind and linearize them for SV analysis. Each molecule is imaged separately, making it possible to deconvolute complex mixtures including haplotypes and heterogeneous tumors. • DNA labeling chemistry specifically for physical mapping.
Relative to traditional techniques, these systems have demonstrated up to a 75% reduction in turnaround time for analysis of acute lymphoblastic leukemia (ALL) subjects when used instead of karyotyping, FISH and MLPA.
Relative to traditional techniques, these systems have demonstrated up to a 75% reduction in turnaround time for analysis of acute lymphoblastic leukemia (“ALL”) subjects when used instead of karyotyping, FISH and MLPA.
In this manner we can expand our network of Bionano customers into our software ecosystem with among the most comprehensive platform-agnostic genome interpretation solution where our proprietary original content in OGM can be adopted when needed to obtain a more comprehensive view of the genome by revealing all classes of SVs.
In this manner we can expand our network of Bionano customers into our software ecosystem with among the most comprehensive platform- 18 Table of Contents agnostic genome interpretation solution where our proprietary original content in OGM can be adopted when needed to obtain a more comprehensive view of the genome by revealing all classes of SVs.
All statements made in any of our securities filings, including all forward-looking statements or information, 28 Table of Contents are made as of the date of the document in which the statement is included unless otherwise specified, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.
All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included unless otherwise specified, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.
The majority of software solutions on the market today have been developed with NGS as the primary application with the focus on the interpretation and reporting of single nucleotide variants (SNVs) instead of SVs.
The majority of software solutions on the market today have been developed with NGS as the primary application with the focus on the interpretation and reporting of single nucleotide variants (“SNVs”) instead of SVs.
Our kit for DNA labeling, the Direct Label and Stain (DLS) kit, is a proprietary, nondestructive chemistry for sequence motif labeling of genomic DNA that improves every aspect of our genome mapping.
Our kit for DNA labeling, the Direct Label and Stain (“DLS”) kit, is a proprietary, nondestructive chemistry for sequence motif labeling of genomic DNA that improves every aspect of our genome mapping.
This data will be utilized to determine 2025 to 2027 CLFS rates. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services.
This data will be utilized to determine 2025 to 2027 CLFS rates. 26 Table of Contents We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services.
We believe that the isolation and purification of DNA using the Ionic system in an OGM workflow will create a number of opportunities, including, enabling additional sample types not currently available to OGM, increasing sample throughput, decreasing sample preparation complexity.
We believe that the isolation and purification of DNA using the Ionic® system in an OGM 14 Table of Contents workflow will create a number of opportunities, including, enabling additional sample types not currently available to OGM, increasing sample throughput, decreasing sample preparation complexity.
Today, VIA software is among the most comprehensive solutions for analysis and interpretation OGM data and any microarray or NGS generated data integrating CNVs, absence of heterozygosity (AOH) and loss of heterozygosity (LOH), as well as SNVs from sequencing data into a single well integrated interface that is used across the globe by renowned academic and commercial clinical laboratories.
Today, VIA software is among the most comprehensive solutions for analysis and interpretation of OGM data and any microarray or NGS generated data integrating CNVs, absence of heterozygosity (“AOH”) and loss of heterozygosity (“LOH”), as well as SNVs from sequencing data into a single well integrated interface that is used across the globe by renowned academic and commercial clinical laboratories.
We furthered our transformation through the expansion into software solutions, made possible by our October 2021 acquisition of BioDiscovery and continued with our November 2022 acquisition of Purigen bringing their leading nucleic acid 8 Table of Contents isolation and purification technology to Bionano.
We furthered our transformation through the expansion into software solutions, made possible by our October 2021 acquisition of BioDiscovery and continued with our November 2022 acquisition of Purigen bringing their leading nucleic acid isolation and purification technology to Bionano.
Additionally, our portfolio includes patents and patent applications directed to related parts of our business, including certain diagnostic tests and methods of diagnosis and analysis of microarray and image data. We have developed a global patent portfolio that includes more than 151 issued patents across approximately 39 patent families that are either owned or exclusively licensed.
Additionally, our portfolio includes patents and patent applications directed to related parts of our business, including certain diagnostic tests and methods of diagnosis and analysis of microarray and image data. We have developed a global patent portfolio that includes more than 135 issued patents across approximately 30 patent families that are either owned or exclusively licensed.
We are constantly on the look-out for opportunities to better meet the needs of our customers whether that is through partnerships, organic development, or strategic acquisitions that accelerate and up-shift our capabilities.
We are constantly on the look-out for opportunities to better meet the needs of our customers 10 Table of Contents whether that is through partnerships, organic development, or strategic acquisitions that accelerate and up-shift our capabilities.
Although we believe that alternatives would be available for both our OGM reagents and ITP reagents, it would take time to identify and validate replacement reagents for our assay kits, which could negatively affect our ability to supply assay kits on a timely basis. Some reagents are supplied through a single source 18 Table of Contents supplier.
Although we believe that alternatives would be available for both our OGM reagents and ITP reagents, it would take time to identify and validate replacement reagents for our assay kits, which could negatively affect our ability to supply assay kits on a timely basis. Some reagents are supplied through a single source supplier.
OGM Chips The Saphyr Chip® is the consumable that packages the nanochannel arrays for DNA linearization for use in the Saphyr instrument. In its current form, each Saphyr chip has three flow cells containing approximately 120,000 nanochannels that are roughly 30 nanometers wide, and each flowcell can hold one unique sample.
In its current form, each Saphyr Chip® has three flow cells containing approximately 120,000 nanochannels that are roughly 30 nanometers wide, and each flowcell can hold one unique sample. The Stratys Chip™ is the consumable that packages the nanochannel arrays for DNA linearization for use on the Stratys™ instrument.
Countries with statutory health insurance (e.g., Germany, France, The Netherlands) tend to be more progressive in technology adoption with favorable reimbursement for molecular 23 Table of Contents diagnostic testing. In countries such as the United Kingdom (“UK”) with tax-based insurance, adoption and reimbursement for molecular diagnostic testing is not uniform and is influenced by local budgets.
Countries with statutory health insurance (e.g., Germany, France, The Netherlands) tend to be more progressive in technology adoption with favorable reimbursement for molecular diagnostic testing. In countries such as the United Kingdom (“UK”) with tax-based insurance, adoption and reimbursement for molecular diagnostic testing is not uniform and is influenced by local budgets.
We are subject to laws and regulations related to the protection of the environment, the health and safety of employees and the handling, transportation and disposal of medical specimens, infectious and hazardous waste and radioactive materials. For example, the U.S.
Other Regulatory Requirements We are subject to laws and regulations related to the protection of the environment, the health and safety of employees and the handling, transportation and disposal of medical specimens, infectious and hazardous waste and radioactive materials. For example, the U.S.
Instruments Our first Stratys instruments are being manufactured in-house; however, we will eventually be moving manufacturing of the Stratys instrument to the same third-party medical device manufacturer that manufactures our Saphyr instrument. Complete or nearly complete instruments are shipped by the manufacturer to us for final assembly and quality control testing.
Instruments Our first Stratys™ instruments are being manufactured in-house; however, we will eventually be moving manufacturing of the Stratys™ instrument to the same third-party medical device manufacturer that manufactures our Saphyr® instrument. Complete instruments are shipped by the manufacturer to us for final quality control testing.
Our software monetization strategy for the NGS and array markets is based on a pay-per-sample model where customers running NGS and/or array today can adopt, which sets the stage for potential future OGM adoptions by these 12 Table of Contents customers.
Our software monetization strategy for the NGS and array markets is based on a pay-per-sample model where customers running NGS and/or array today can adopt, which sets the stage for potential future OGM adoptions by these customers.
Over the past year, we believe we have transformed our business from an instrument company to a provider of a full suite of genomic solutions. We expanded into molecular genetic clinical testing services through our August 2020 acquisition of Lineagen.
We believe we have transformed our business from an instrument company to a provider of a full suite of genomic solutions. We expanded into molecular genetic clinical testing services through our August 2020 acquisition of Lineagen.
CMS regulates the quality of clinical laboratories and the clinical testing process pursuant to the Clinical Laboratory Improvement Amendments of 1988 (CLIA) and the FDA regulates the safety and effectiveness of the diagnostic test pursuant to authorities in the Federal, Food, Drug, and Cosmetic Act (FDCA).
CMS regulates the quality of clinical laboratories and the clinical testing process pursuant to the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) and the FDA regulates the safety and effectiveness of the diagnostic test pursuant to authorities in the Federal, Food, Drug, and Cosmetic Act (“FDCA”).
Commercial Adoption of Offerings for OGM Bionano executed on its commercialization strategy, expanded the utilization of its OGM systems and increased the amount of Bionano data generated across the globe, driving commercial momentum. • Grew our installed base of OGM systems to 326 as of December 31, 2023, an increase of approximately 36% from a total installed base of 240 as of December 31, 2022.
Commercial Adoption of Offerings for OGM Bionano executed on its commercialization strategy, expanded the utilization of its OGM systems and increased the amount of Bionano data generated across the globe, driving commercial momentum. • Grew our installed base of OGM systems to 371 as of December 31, 2024, an increase of approximately 14% from a total installed base of 326 as of December 31, 2023.
The IVDR was published in May 2017, marking the start of a five-year period of transition from the IVDD. During the transitional period the IVDR will come into force gradually, starting with the provisions related to the designation of Notified Bodies and the ability of manufacturers to apply for new certificates under the IVDR.
The IVDR was published in May 2017, marking the start of an initial five-year period of transition from the IVDD. During the transitional period the IVDR came into force gradually, starting with the provisions related to the designation of Notified Bodies and the ability of manufacturers to apply for new certificates under the IVDR.
This commercial staff is located in North America, and the sales personnel primarily work remotely in U.S. states where Bionano Laboratories has obtained insurance reimbursement. The sales and marketing efforts are targeted primarily at specialty pediatricians, including pediatric neurologists, medical geneticists, and developmental and behavioral pediatricians. Bionano Laboratories also targets general pediatricians with large numbers of patients.
This commercial staff was located in North America, and the sales personnel primarily worked remotely in U.S. states where Bionano Laboratories has obtained insurance reimbursement. The sales and marketing efforts were targeted primarily at specialty pediatricians, including pediatric neurologists, medical geneticists, and developmental and behavioral pediatricians. Bionano Laboratories also targeted general pediatricians with large numbers of patients.
Installed base represents the global number of OGM instruments installed at end-customer locations to perform optical genome mapping. • For the year ended December 31, 2023, total flowcells sold reached 26,444, an increase of approximately 72% over the 15,375 flowcells sold during the year ended December 31, 2022.
Installed base represents the global number of OGM instruments installed at end-customer locations to perform optical genome mapping. • For the year ended December 31, 2024, total flowcells sold reached 30,307, an increase of approximately 15% over the 26,444 flowcells sold during the year ended December 31, 2023.
The 10 Table of Contents predecessor of our VIA software (NxClinical) was developed with copy number variants (CNV) as the core focus and became established as an industry leading solution for interpretation and reporting of CNVs for CMA and NGS.
The predecessor of our VIA™ software (NxClinical) was developed with copy number variants (“CNV”) as the core focus and became established as an industry leading solution for interpretation and reporting of CNVs for CMA and NGS.
We believe this manufacturing strategy is efficient and conserves capital. However, in the event it becomes necessary to utilize a different contract manufacturer, we would experience additional costs, delays and difficulties in doing so, and our business could be harmed. This manufacturer actively manages obsolescence of all components in our system.
However, in the event it becomes necessary to utilize a different contract manufacturer, we would experience additional costs, delays and difficulties in doing so, and our business could be harmed. This manufacturer actively manages obsolescence of all components in our system.
At the end of 2022 we announced the placement of a pre-commercial unit that we expect to significantly increase the throughput. The Stratys instrument is currently capable of analyzing up to 13,500 human genomes per year at 100x coverage.
The Saphyr® instrument is currently capable of analyzing up to 4,000 human genomes per year at 100x coverage. At the end of 2022 we announced the placement of a pre-commercial unit that we expect to significantly increase the throughput.
The OGM chip is the consumable that packages nanochannel arrays for DNA linearization. In its current form, each OGM chip has three flowcells. Flowcells sold refers to the units of genome mapping consumables used for analyzing one genome, purchased by customers to process optical genome mapping.
The OGM chip is the consumable that packages nanochannel arrays for DNA linearization. In its current form, the OGM chip can comprise - one, two or three flowcells per chip. Flowcells sold refers to the units of genome mapping consumables used for analyzing one genome, purchased by customers to process samples for optical genome mapping.
Bionano Laboratories also employs Whole Exome Sequencing, which aims to detect genome SNVs that are different from genome SVs and are not detectable by OGM. We believe that Bionano Laboratories is uniquely positioned to develop LDT’s that can improve upon the existing SOC for diagnostic testing for NDDs.
Bionano Laboratories also 12 Table of Contents employs Whole Exome Sequencing, which aims to detect genome SNVs that are different from genome SVs and are not detectable by OGM. We believe that Bionano Laboratories is uniquely positioned to develop LDT’s that can improve upon the existing standard of care (“SOC”) for OGM-based diagnostic testing.
Our VIA software is among the most comprehensive and up-to-date solutions for cytogenetics and molecular genetics, providing one solution for analysis and interpretation of all genomic variants from microarray and NGS data.
Our VIA software is among the most comprehensive and up-to-date solutions for cytogenetics and molecular genetics, providing one solution for analysis and interpretation of all genomic variants from microarray and NGS data. VIA evolved from our NxClinical software to incorporate OGM data and is now our primary software solution for interpretation and reporting of genomic features from OGM data.
In many countries outside of the United States, coverage, pricing and reimbursement approvals are also required. We are also required to maintain accurate information on and control over sales and distributors’ activities that may fall within the purview of the U.S. Foreign Corrupt Practices Act, as amended (“FCPA”) its books and records provisions and its anti-bribery provisions.
We are also required to maintain accurate information on and control over sales and distributors’ activities that may fall within the purview of the U.S. Foreign Corrupt Practices Act, as amended (“FCPA”) its books and records provisions and its anti-bribery provisions.
The Saphyr system images DNA at a rate of approximately 205 gigabase pairs (Gbp) per hour, and the Stratys system images nearly 820 Gbp per hour. • Partner with industry-leading companies and laboratories to expand adoption in clinical markets. Establish additional collaborations with customers to help drive validating studies.
The Saphyr® system images DNA at a rate of approximately 205 gigabase pairs (“Gbp”) per hour, and the Stratys™ system images nearly 820 Gbp per hour. • Partner with industry-leading companies and laboratories to expand adoption in clinical markets.
The ACA is a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms. 27 Table of Contents There have been executive, judicial and Congressional challenges to certain aspects of the ACA.
The ACA is a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.
CLIA certification is also a prerequisite to be eligible to bill state and federal healthcare programs, as well as many commercial third-party payers, for laboratory testing services. Both of Bionano Laboratories’ facilities, one located in Salt Lake City, Utah and the other in San Diego, California are CLIA certified. These laboratories must comply with all applicable CLIA requirements.
CLIA certification is also a prerequisite to be eligible to bill state and federal healthcare programs, as well as many commercial third-party payers, for laboratory testing services. The Bionano Laboratories’ facility, located in San Diego, California is CLIA certified. This laboratory must comply with all applicable CLIA requirements.
The system works by applying an electric field to specially formulated reagents in a consumable. The electric field electrophoretically focuses nucleic acid into a narrow band and purifies the molecules away from other potential inhibitors.
The technology was further developed and commercialized by Purigen. The system includes an instrument, consumable and reagents necessary to process samples. The system works by applying an electric field to specially formulated reagents in a consumable. The electric field electrophoretically focuses nucleic acid into a narrow band and purifies the molecules away from other potential inhibitors.
We believe OGM is capable of comprehensive, cost-effective and efficient detection of all classes of SVs and CNVs. Today, these SVs cannot be reliably detected by genome sequencing, from existing high throughput sequencers, which is focused on identifying genomic differences involving a few base pairs or SNVs, which our OGM systems do not identify.
Today, these SVs cannot be reliably detected by genome sequencing, from existing high throughput sequencers, which is focused on identifying genomic differences involving a few base pairs or SNVs, which our OGM systems do not identify.
Additionally, Bionano Laboratories has developed OGM-based laboratory developed tests (“LDTs”) for facioscapulohumeral muscular dystrophy type 1 (FSHD1), which is a progressive disorder that primarily affects the muscles of the face, shoulder blades (scapula), upper arms, and lower legs, and for detecting SVs in individuals with hematologic malignancies.
Our Bionano Laboratories business has developed and provides several OGM-based laboratory developed tests (“LDTs”) for facioscapulohumeral muscular dystrophy type 1 (“FSHD1”), which is a progressive disorder that primarily affects the muscles of the face, shoulder blades (scapula), upper arms, and lower legs, for detecting SVs in individuals with hematologic malignancies, and for detecting SVs in pre- and post-natal samples, through its OGM-Dx™ testing services.
The HIPAA standards apply to three types of organizations: health plans, healthcare clearing houses, and healthcare providers that conduct certain healthcare transactions electronically (“Covered Entities”).
HIPAA and other Privacy Laws HIPAA established comprehensive federal standards for the privacy and security of health information. The HIPAA standards apply to three types of organizations: health plans, healthcare clearing houses, and healthcare providers that conduct certain healthcare transactions electronically (“Covered Entities”).
Expand partnership efforts with clinical diagnostic companies to commercialize LDTs in the U.S. as well as LDTs and approved tests outside the U.S. • Complement NGS with OGM in translational, applied and discovery research markets.
We intend to e stablish additional collaborations with customers to help drive validating studies and expand partnership efforts with clinical diagnostic companies to commercialize LDTs in the U.S. as well as LDTs and approved tests outside the U.S. • Complement NGS with OGM in translational, applied and discovery research markets.
In addition, this manufacturer has no obligation to maintain inventory in excess of any open purchase orders or materials in excess of the amount it reasonably determines will be consumed within 90 days. We are obligated to purchase any material deemed in excess pursuant to the agreement. The price we pay is determined according to a mutually agreed-upon pricing formula.
In addition, the manufacturer has no obligation to maintain inventory in excess of any open purchase orders or materials in excess of the amount it reasonably determines will be consumed within 90 days. We are obligated to purchase any material deemed in excess pursuant to our agreement with the manufacturer.
It is unclear how such challenges and the healthcare reform measures of the Biden administration will impact the ACA and our business. Further, other legislative changes have been proposed and adopted since the ACA was enacted.
It is possible that the ACA will be subject to judicial or Congressional challenges in the future. It is unclear how such challenges and the healthcare reform measures of the Trump administration will impact the ACA and our business. Further, other legislative changes have been proposed and adopted since the ACA was enacted.
For example, on June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. It is possible that the ACA will be subject to judicial or Congressional challenges in the future.
There have been executive, judicial and Congressional challenges to certain aspects of the ACA. For example, on June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.
Within cytogenetics and molecular pathology, we estimate that there are approximately 10,000 cytogenetic labs on a worldwide basis (excluding India and developing countries). We estimate that these labs analyze approximately 10.0 million samples per year.
We expect to see OGM adoption in cytogenomics, in discovery research and in cell and gene therapy applications. Within cytogenetics and molecular pathology, we estimate that there are approximately 10,000 cytogenetic labs on a worldwide basis (excluding India and developing countries). We estimate that these labs analyze approximately 10.0 million samples per year.
We believe that these publications are impactful as they cover SVs in areas of high unmet medical need, such as rare and undiagnosed pediatric diseases, neurological and muscular diseases, developmental delays and disorders, multiple leukemia, lymphoma and myelomas as well as cell and gene therapy applications. • Continue to innovate our products and technologies.
We believe these publications are highly impactful as they address SVs in areas of significant unmet medical need, including rare and undiagnosed pediatric diseases, neurological and muscular disorders, developmental delays, acute and chronic leukemias, lymphomas, myelomas, and applications in cell and gene therapy. • Continue to innovate our products and technologies.
Depending on the reimbursement arrangement and applicable law, the party that reimburses us for our services may be: • a third-party who provides coverage to the patient, such as an insurance company or managed care organization; • a state or federal healthcare program; or • the patient.
Depending on the reimbursement arrangement and applicable law, the party that reimburses us for our services may be: • a third-party who provides coverage to the patient, such as an insurance company or managed care organization; • a state or federal healthcare program; or • the patient. 24 Table of Contents Presently, approximately 90% of the diagnostic service revenue for Bionano Laboratories is paid by private third-party payors.
Traditional methods of isolating nucleic acid, including column-based isolation and bead-based isolation, can be laborious, and result in molecules that are denatured, dehydrated and fragmented, and solutions that are contaminated and have low purity.
An electric field is applied to the chip and the nucleic acid is isolated in its natural, native form. Traditional methods of isolating nucleic acid, including column-based isolation and bead-based isolation, can be laborious, and result in molecules that are denatured, dehydrated and fragmented, and solutions that are contaminated and have low purity.
Agreement for the Manufacture of Our Instruments We have engaged a single third-party manufacturer to produce and test our instruments on an as-ordered basis. The manufacturer of our instruments has no obligation to manufacture our instruments without a purchase order.
During 2024, Bionano Laboratories phased out the offering of the non-OGM-based LDT tests. Key Agreements Agreement for the Manufacture of Our Instruments We have engaged a single third-party manufacturer to produce and test our instruments on an as-ordered basis. The manufacturer of our instruments has no obligation to manufacture our instruments without a purchase order.
We recently added a portfolio of patents and patent applications related to ITP through the Purigen acquisition, which we plan to continue to pursue and develop. We have secured and continue to pursue intellectual property rights globally, including rights related to isolation, purification and analysis of nucleic acid molecules, as well as innovations in the molecular biology and bioinformatics spaces.
We have secured and continue to pursue intellectual property rights globally, including rights related to isolation, purification and analysis of nucleic acid molecules, as well as innovations in the molecular biology and bioinformatics spaces.
The result is uniquely identifiable genome-specific label patterns that enable de novo map assembly, anchoring sequencing contigs and discovery of SVs as small as 500 base pairs to up to chromosome arm lengths.
Starting with UHMW DNA purified using the appropriate Bionano Prep kit, fluorescent labels are attached to specific sequence motifs. The result is uniquely identifiable genome-specific label patterns that enable de novo map assembly, anchoring sequencing contigs and discovery of SVs as small as 500 base pairs to up to chromosome arm lengths.
Additionally, Bionano Laboratories previously offered molecular genetic clinical testing services for individuals demonstrating clinical presentations consistent with NDDs, including ASDs and other disorders of childhood development, but as of March 1, 2024 has determined to phase out over time the offering of these products, including: • FirstStepDx PLUS is a CMA designed to identify an underlying genetic cause in individuals with autism spectrum disorder, developmental delay, and intellectual disability; • Fragile X syndrome (FXS) testing is designed to detect individuals (both males and females) with FXS, as well as carriers of the condition; and • NextStepDx PLUS is a whole exome sequencing test designed to identify genetic variants that are associated with disorders of childhood development.
Additionally, Bionano Laboratories previously offered molecular genetic clinical testing services for individuals demonstrating clinical presentations consistent with NDDs, including ASDs and other disorders of childhood development, but as of December ,31 2024, has phased out the offering of these products, including: • FirstStepDx PLUS is a CMA designed to identify an underlying genetic cause in individuals with autism spectrum disorder, developmental delay, and intellectual disability; • Fragile X syndrome (“FXS”) testing is designed to detect individuals (both males and females) with FXS, as well as carriers of the condition; and • NextStepDx PLUS is a whole exome sequencing test designed to identify genetic variants that are associated with disorders of childhood development. 15 Table of Contents Market Opportunity According to MarketsandMarkets, the worldwide market for genomics products and services is expected to reach approximately $66.8 billion by 2029, up from approximately $42.4 billion in 2023, representing a compound annual growth rate of 9.4%.
Our Bionano Laboratories business provides proprietary genetic clinical testing services for individuals demonstrating clinical presentations consistent with neurodevelopmental disorders (“NDDs”), including autism spectrum disorders (“ASDs”) and other disorders of childhood development.
During 2024, Bionano Laboratories phased out the offering of certain testing services for individuals demonstrating clinical presentations consistent with neurodevelopmental disorders (“NDDs”), including autism spectrum disorders (“ASDs”) and other disorders of childhood development.
We believe that simplified data interpretation and a seamless integration with NGS and array data to provide the most compressive genome analysis will increase utilization. In addition, we can participate directly in the NGS and array markets for genetic disease and cancer applications independent of OGM using a monetization model with a pay-per-sample VIA software offering.
In addition, we can participate directly in the NGS and array markets for genetic disease and cancer applications independent of OGM using a monetization model with a pay-per-sample VIA™ software offering.
CLIA provides that a state may adopt laboratory licensure requirements and regulations that are more stringent than those under federal law and requires compliance with such laws and regulations. The State of Utah follows all CLIA regulations for laboratory facility and personnel requirements. Utah does not have any additional licensure and regulations.
CLIA provides that a state may adopt laboratory licensure requirements and regulations that are more stringent than those under federal law and requires compliance with such laws and regulations. The State of California follows CLIA regulations for in-state laboratory facilities, but requires additional licensing requirements for laboratory personnel established by the California Department of Public Health (“CDPH”).
The Ionic Purification system uses a proprietary ITP method to isolate and purify nucleic acid molecules. The technology was initially developed at Stanford University and intellectual property from that development was exclusively licensed to Purigen. The technology was further developed and commercialized by Purigen. The system includes an instrument, consumable and reagents necessary to process samples.
The Ionic ® Purification System We acquired the Ionic® Purification system through our November 2022 acquisition of Purigen. The Ionic® Purification system uses a proprietary ITP method to isolate and purify nucleic acid molecules. The technology was initially developed at Stanford University and intellectual property from that development was exclusively licensed to Purigen.
Sales and Marketing As of December 31, 2023, our commercial team consisted of 146 individuals in sales, sales support and marketing. Our sales support personnel include individuals in customer solutions, field service engineers and field application specialists. This commercial staff is primarily located in North America, Europe, and China.
Sales and Marketing Our sales support personnel include individuals in customer solutions, field service engineers and field application specialists. This commercial staff is primarily located in North America and Europe. Most of our sales support team is located at our headquarters in San Diego, California and some work remotely throughout North America and Europe.
Intellectual Property Genome Analysis Our core technology for nucleic acid research is related to methods and devices for non-sequencing based analysis of macromolecules such as nucleic acids.
Our agreements with these manufacturers allow for purchases through individual purchase orders or through entering into long term commitments. Intellectual Property Genome Analysis Our core technology for nucleic acid research is related to methods and devices for non-sequencing based analysis of macromolecules such as nucleic acids.
We believe that each of these acquisitions, together with our organic development, will significantly enhance the customer experience with OGM. OGM Systems Our systems use a proprietary approach to measure genome structure and SV through OGM. The OGM workflow is novel, comprehensive, scalable, cost effective and highly differentiated.
We believe that each of these acquisitions, together with our organic development, will substantially benefit our customers and their adoption of OGM as a solution of choice for SV and CNV analysis and significantly enhance the customer experience with OGM. OGM Systems Our systems use a proprietary approach to measure genome structure and SV through OGM.
The resulting purified DNA is up to millions of base pairs long and optimal for use with our systems. Our kits and protocols enable the extraction of UHMW DNA from a variety of sample types including human or animal tissue and tumors, plant tissue, cell lines, bone marrow aspirates and human blood.
Our kits and protocols enable the extraction of UHMW DNA from a variety of sample types including human or animal tissue and tumors, plant tissue, cell lines, bone marrow aspirates and human blood. Our labeling reagents are optimized for applications on our genome mapping systems.
Our customers include researchers and clinicians who seek to identify and understand the biological implications of genome variation. We believe that our OGM systems can replace more traditional cytogenetic tools which are expensive, slow and labor-intense, with an advanced solution designed to simplify workflow, reduce cost, and increase assay success rates.
We believe that our OGM systems can replace more traditional cytogenetic tools which are expensive, slow and labor-intense, with an advanced solution designed to simplify workflow, reduce cost, and increase assay success rates. We believe our OGM systems have the potential to significantly increase success rates and provide more answers across a wide range of applications in genomics.
Our systems are relatively new to the life science marketplace and require a capital investment by our customers. The sales process typically involves numerous interactions and demonstrations with multiple people within an organization. Some potential customers conduct in-depth evaluations of the system including having us run experiments on in-house OGM systems.
The sales process typically involves numerous interactions and demonstrations with multiple people within an organization. Some potential customers conduct in-depth evaluations of the system including having us run experiments on in-house OGM systems. In addition, in most countries, sales to academic or governmental institutions require participation in a tender process involving preparation of extensive documentation and a lengthy review process.
Testing and Laboratory Services Bionano Laboratories’ OGM testing is performed at our lab in San Diego, California, or at our partner labs in the United States and Europe. Bionano Laboratories intends to increase its testing capacity. Bionano Laboratories has CLIA certification for its San Diego lab.
Testing and Laboratory Services Bionano Laboratories’ OGM testing is performed at our lab in San Diego, California, or at our partner labs in the United States and Europe. Bionano Laboratories’ San Diego lab is CLIA accredited and CAP certified. For diagnostic testing, Bionano Laboratories offers OGM-based LDTs for postnatal, prenatal and hematological malignancy applications performed at its San Diego facility.
Additionally, certain states require clinical laboratories to obtain out-of-state licenses to test specimens from patients, or to receive orders from physicians, within those states. Our Salt Lake City and San Diego facilities currently hold such out-of-state laboratory licenses in Pennsylvania and Maryland. HIPAA and other Privacy Laws HIPAA established comprehensive federal standards for the privacy and security of health information.
We received CAP accreditation for the San Diego facility in 2023. Additionally, certain states require clinical laboratories to obtain out-of-state licenses to test specimens from patients, or to receive orders from physicians, within those states. Our San Diego facility currently holds such out-of-state laboratory licenses in California, Maryland, and Pennsylvania.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFood and Drug Administration, or FDA, to be medical devices or otherwise subject to additional regulation by the FDA; • pursue a regulatory path with the FDA, or a regulatory body outside the United States, to market our existing RUO products or new products utilized for diagnostic purposes; • lease additional facilities or build-out existing facilities as we continue to grow our inventory and research and development; • further expand our operations outside the United States; • enter into collaboration arrangements, if any, or in-license products and technologies; • acquire or invest in complementary businesses or assets; • add operational, financial and management information systems; and • cover increased costs incurred as a result of continued operation as a public company, including costs resulting from our no longer qualifying as an emerging growth company and, if applicable, in the future, loss of our status as a smaller reporting company or changes in our status from a non-accelerated filer to an accelerated filer or large accelerated filer.
Biggest changeFor example, we will need to raise substantial additional capital if we intend to: • maintain and expand our sales and marketing efforts to further commercialize our products, technologies and services and address competitive developments; • maintain and expand our research and development efforts to improve our existing products, technologies and services and develop and launch new products, technologies and services, particularly if any of our products, technologies and services are deemed by the FDA to be medical devices or otherwise subject to additional regulation by the FDA; • pursue a regulatory path with the FDA, or a regulatory body outside the United States, to market our existing RUO products or new products utilized for diagnostic purposes; • lease additional facilities or build-out existing facilities to grow our inventory and research and development; • further expand our operations within or outside the United States; • enter into collaboration arrangements, if any, or in-license products and technologies; • acquire or invest in complementary businesses or assets; and • add operational, financial and management information systems.
Like the AKS, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by HITECH, and their implementing regulations, which imposes privacy, security and breach reporting obligations with respect to individually identifiable health information upon entities subject to the law, such as health plans, healthcare clearinghouses and certain healthcare providers, known as covered entities, and their respective business associates, individuals or entities that perform services for them that involve individually identifiable health information as well as their covered subcontractors; • state laws that prohibit other specified practices, such as billing physicians for tests that they order or providing tests at no or discounted cost to induce physician or patient adoption; insurance fraud laws; waiving coinsurance, co-payments, deductibles, and other amounts owed by patients; billing a state Medicaid program at a price that is higher than what is charged to one or more other third-party payors employing, exercising control over or splitting 54 Table of Contents professional fees with licensed professionals in violation of state laws prohibiting fee splitting or the corporate practice of medicine and other professions; • federal and state consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • the prohibition on reassignment of Medicare claims, which, subject to certain exceptions, precludes the reassignment of Medicare claims to any other party; • state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, that may impose similar or more prohibitive restrictions, and may apply to items or services reimbursed by any non-governmental third-party payors, including private insurers; and • federal, state, local and foreign laws that govern the data privacy and security of health information in certain circumstances, including state health information privacy and data breach notification laws which govern the collection, use, disclosure, and protection of health-related personal data, many of which differ from each other in significant ways and often are not pre-empted by HIPAA, thus complicating compliance efforts.
Like the AKS, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by HITECH, and their implementing regulations, which imposes privacy, security and breach reporting obligations with respect to individually identifiable health information upon entities subject to the law, such as health plans, healthcare clearinghouses and certain healthcare providers, known as covered entities, and their respective business associates, individuals or entities that perform services for them that involve individually identifiable health information as well as their covered subcontractors; • state laws that prohibit other specified practices, such as billing physicians for tests that they order or providing tests at no or discounted cost to induce physician or patient adoption; insurance fraud laws; waiving coinsurance, co-payments, deductibles, and other amounts owed by patients; billing a state Medicaid program at a price that is higher than what is charged to one or more other third-party payors employing, exercising control over or splitting professional fees with licensed professionals in violation of state laws prohibiting fee splitting or the corporate practice of medicine and other professions; • federal and state consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • the prohibition on reassignment of Medicare claims, which, subject to certain exceptions, precludes the reassignment of Medicare claims to any other party; • state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, that may impose similar or more prohibitive restrictions, and may apply to items or services reimbursed by any non-governmental third-party payors, including private insurers; and • federal, state, local and foreign laws that govern the data privacy and security of health information in certain circumstances, including state health information privacy and data breach notification laws which govern the collection, use, disclosure, and protection of health-related personal data, many of which differ from each other in significant ways and often are not pre-empted by HIPAA, thus complicating compliance efforts.
For example: • others may be able to develop and/or use technologies that are similar to our technologies or aspects of our technologies but that does not cover the claims of any our patents or patents that may issue from our patent applications or those we license; • we or the licensor of our licensed-in patents might not have been the first to make the inventions disclosed and/or claimed in a pending patent application that we own or license; • we or the licensor of our licensed-in patents might not have been the first to file patent applications disclosing and/or claiming an invention; • others may independently develop similar or alternative technologies without infringing our or our licensors’ intellectual property rights; • pending patent applications that we own or license may not lead to issued patents or may not result in the claims that we want (for example, as to the scope of issued claims, if any); • patents, if issued, that we own or license may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors or other third parties; • third parties may compete with us in jurisdictions where we do not pursue and obtain patent protection; 63 Table of Contents • we may not be able to obtain and/or maintain necessary or useful licenses on reasonable terms or at all; • third parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights over that intellectual property; • we may not be able to maintain the confidentiality of our trade secrets or other proprietary information; • we may not develop or in-license additional proprietary technologies that are patentable; and • the patents or other intellectual property of others may have an adverse effect on our business.
For example: • others may be able to develop and/or use technologies that are similar to our technologies or aspects of our technologies but that does not cover the claims of any our patents or patents that may issue from our patent applications or those we license; • we or the licensor of our licensed-in patents might not have been the first to make the inventions disclosed and/or claimed in a pending patent application that we own or license; 62 Table of Contents • we or the licensor of our licensed-in patents might not have been the first to file patent applications disclosing and/or claiming an invention; • others may independently develop similar or alternative technologies without infringing our or our licensors’ intellectual property rights; • pending patent applications that we own or license may not lead to issued patents or may not result in the claims that we want (for example, as to the scope of issued claims, if any); • patents, if issued, that we own or license may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors or other third parties; • third parties may compete with us in jurisdictions where we do not pursue and obtain patent protection; • we may not be able to obtain and/or maintain necessary or useful licenses on reasonable terms or at all; • third parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights over that intellectual property; • we may not be able to maintain the confidentiality of our trade secrets or other proprietary information; • we may not develop or in-license additional proprietary technologies that are patentable; and • the patents or other intellectual property of others may have an adverse effect on our business.
These consequences may include, but are not limited to, government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans on processing personal data; orders to destroy or not use personal data; and imprisonment of company officials.
These consequences may include, but are not limited to, government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans or restrictions on processing personal data; orders to destroy or not use personal data; and imprisonment of company officials.
In addition, we may not be able to access a portion of our existing cash and cash equivalents and short-term investments or “restricted cash or restricted investments” in the account control agreement due to market conditions such as potential future disruptions in access to bank deposits or lending commitments due to bank failures.
In addition, we may not be able to access a portion of our existing cash and cash equivalents and short-term investments or “restricted cash and restricted investments” in the account control agreement due to market conditions such as recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures.
In addition, a significant portion of our operating expenses are relatively fixed in nature, including our existing and recently acquired leases, and planned expenditures are based in part on expectations regarding future revenue. Accordingly, unexpected revenue shortfalls could decrease our gross margins and cause significant changes in our operating results from quarter to quarter.
In addition, a significant portion of our operating expenses are relatively fixed in nature, including our existing and acquired leases, and planned expenditures are based in part on expectations regarding future revenue. Accordingly, unexpected revenue shortfalls could decrease our gross margins and cause significant changes in our operating results from quarter to quarter.
In addition, the ACA codified case law that a claim including items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the FCA; • the Stark Law, which prohibits a physician from making a referral for certain designated health services covered by the Medicare or Medicaid program, including laboratory and pathology services, if the physician or an immediate family member of the physician has a financial relationship with the entity providing the designated health services and prohibits that entity from billing, presenting or causing to be presented a claim for the designated health services furnished pursuant to the prohibited referral, unless an exception applies; • federal civil and criminal false claims laws and civil monetary penalty laws, such as the FCA, which can be enforced by private citizens through civil qui tam actions, prohibits individuals or entities from, among other things, knowingly presenting, or causing to be presented false, fictitious or fraudulent claims for payment or approval by the federal government, including federal health care programs, such as Medicare and Medicaid, and knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim, or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the federal government; • EKRA prohibits payments for referrals to recovery homes, clinical treatment facilities, and laboratories.
In addition, the ACA codified case law that a claim including items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the FCA; 53 Table of Contents • the Stark Law, which prohibits a physician from making a referral for certain designated health services covered by the Medicare or Medicaid program, including laboratory and pathology services, if the physician or an immediate family member of the physician has a financial relationship with the entity providing the designated health services and prohibits that entity from billing, presenting or causing to be presented a claim for the designated health services furnished pursuant to the prohibited referral, unless an exception applies; • federal civil and criminal false claims laws and civil monetary penalty laws, such as the FCA, which can be enforced by private citizens through civil qui tam actions, prohibits individuals or entities from, among other things, knowingly presenting, or causing to be presented false, fictitious or fraudulent claims for payment or approval by the federal government, including federal health care programs, such as Medicare and Medicaid, and knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim, or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the federal government; • EKRA prohibits payments for referrals to recovery homes, clinical treatment facilities, and laboratories.
No assurance can be given that our or our licensors’ patent applications or granted patents will have priority over any other patent or patent application involved in such a proceeding, or will be held valid as an outcome of the proceeding; • other parties may independently develop similar or alternative products and technologies or duplicate any of our products and technologies, which can potentially impact our market share, revenue, and goodwill, regardless of whether intellectual property rights are successfully enforced against these other parties; • it is possible that our owned or licensed pending patent applications will not result in granted patents, and even if such pending patent applications issue as patents, they may not provide intellectual property protection of commercially 56 Table of Contents viable products or product features, may not provide us with any competitive advantages, or may be challenged and invalidated by third parties, patent offices, and/or the courts; • we may be unaware of or unfamiliar with prior art and/or interpretations of prior art that could potentially impact the validity or scope of our patents or pending patent applications, or patent applications that we intend to file; • we take efforts to enter into agreements with employees, consultants, collaborators, and, as applicable, advisors to confirm ownership and chain of title in intellectual property rights.
No assurance can be given that our or our licensors’ patent applications or granted patents will have priority over any other patent or patent application involved in such a proceeding, or will be held valid as an outcome of the proceeding; • other parties may independently develop similar or alternative products and technologies or duplicate any of our products and technologies, which can potentially impact our market share, revenue, and goodwill, regardless of whether intellectual property rights are successfully enforced against these other parties; • it is possible that our owned or licensed pending patent applications will not result in granted patents, and even if such pending patent applications issue as patents, they may not provide intellectual property protection of commercially viable products or product features, may not provide us with any competitive advantages, or may be challenged and invalidated by third parties, patent offices, and/or the courts; • we may be unaware of or unfamiliar with prior art and/or interpretations of prior art that could potentially impact the validity or scope of our patents or pending patent applications, or patent applications that we intend to file; • we take efforts to enter into agreements with employees, consultants, collaborators, and, as applicable, advisors to confirm ownership and chain of title in intellectual property rights.
Some of these provisions include: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; • a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; 67 Table of Contents • a requirement that special meetings of stockholders be called only by the chairman of the board of directors, the chief executive officer, the president or by a majority of the total number of authorized directors; • advance notice requirements for stockholder proposals and nominations for election to our board of directors; • a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of all outstanding shares of our voting stock then entitled to vote in the election of directors; • a requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation; and • the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock.
Some of these provisions include: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; • a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; • a requirement that special meetings of stockholders be called only by the chairman of the board of directors, the chief executive officer, the president or by a majority of the total number of authorized directors; • advance notice requirements for stockholder proposals and nominations for election to our board of directors; • a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of all outstanding shares of our voting stock then entitled to vote in the election of directors; • a requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation; and • the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock.
Integration challenges may include the following: • disruption in our relationships with our pre-acquisition customers, distributors or suppliers, or in the relationships of our acquired businesses with their pre-acquisition customers, distributors or suppliers, as a result of such a transaction; • unanticipated expenses and liabilities related to acquired companies or assets; • disputes with the seller(s) of any acquired companies or assets or litigation with the seller(s) or third parties resulting from acquired companies or assets; • difficulties integrating acquired personnel, technologies, operations and legal compliance obligations into our existing business; • diversion of management time and focus from operating our business to acquisition integration challenges; • increases in our expenses and reductions in our cash available for operations and other uses; • possible write-offs or impairment charges relating to acquired businesses or assets; • difficulties developing and marketing new products, technologies and services or integrating new products, technologies and services into our commercial plan; • entering markets in which we have limited or no prior experience; and • coordinating our efforts throughout various localities and time zones.
Integration challenges may include the following: • disruption in our relationships with our pre-acquisition customers, distributors or suppliers, or in the relationships of our acquired businesses with their pre-acquisition customers, distributors or suppliers, as a result of such a transaction; • unanticipated expenses and liabilities related to acquired companies or assets; • disputes with the seller(s) of any acquired companies or assets or litigation with the seller(s) or third parties resulting from acquired companies or assets; • difficulties integrating acquired personnel, technologies, operations and legal compliance obligations into our existing business; • diversion of management time and focus from operating our business to acquisition integration challenges; • increases in our expenses and reductions in our cash available for operations and other uses; • possible write-offs or impairment charges relating to acquired businesses or assets; • difficulties developing and marketing new products, technologies and services or integrating new products, technologies and services into our commercial plan; • entering markets in which we have limited or no prior experience; and 35 Table of Contents • coordinating our efforts throughout various localities and time zones.
Our ability to publicly or privately sell equity securities and the liquidity of our common stock could be adversely affected if we are delisted from The Nasdaq Capital Market or if we are unable to transfer our listing to another stock market.
Our ability to publicly or privately sell equity securities and the liquidity of our common stock could be adversely affected if we are delisted from The Nasdaq Capital Market (“Nasdaq”) or if we are unable to transfer our listing to another stock market.
The demand for our products and technologies will depend in part upon the research and development budgets of these customers, which are impacted by factors beyond our control, such as: • changes in government programs that provide funding to research institutions and companies; • changes in the regulatory environment; • scientists’ and customers’ opinions of the utility of new products, technologies or services; • reductions in or other difficulties relating to, among other things, staffing, capacity, shutdowns or slowdowns of laboratories and other institutions as well as other impacts stemming from various geopolitical and macroeconomic developments, such as the conflict between Ukraine and Russia and, related sanctions, the conflicts in the middle east, potential future disruptions in access to bank deposits or lending commitments due to bank failures and global pandemics. • differences in budgetary cycles; and • market acceptance of relatively new technologies, such as ours.
The demand for our products and technologies will depend in part upon the research and development budgets of these customers, which are impacted by factors beyond our control, such as: • changes in government programs that provide funding to research institutions and companies; • changes in the regulatory environment; 38 Table of Contents • scientists’ and customers’ opinions of the utility of new products, technologies or services; • reductions in or other difficulties relating to, among other things, staffing, capacity, shutdowns or slowdowns of laboratories and other institutions as well as other impacts stemming from various geopolitical and macroeconomic developments, such as the conflict between Ukraine and Russia and related sanctions, the conflicts in the Middle East, potential future disruptions in access to bank deposits or lending commitments due to bank failures and global pandemics. • differences in budgetary cycles; and • market acceptance of relatively new technologies, such as ours.
Several factors make the billing process complex, including: • differences between the billing rates and reimbursement rates for our products; • compliance with complex federal and state regulations related to billing government healthcare programs, including Medicare, Medicaid and TRICARE; • risk of government audits related to billing; • disputes among payors as to which party is responsible for payment; • differences in coverage and information and billing requirements among payors, including the need for prior authorization and/or advanced notification; • the effect of patient co-payments or co-insurance and our ability to collect such payments from patients; • changes to billing codes used for our products; • changes to requirements related to our current or future clinical studies, including our registry studies, which can affect eligibility for payment; • ongoing monitoring provisions of LCDs for our products, which can affect the circumstances under which a claim would be considered medically necessary; • incorrect or missing billing information; and • the resources required to manage the billing and claims appeals process.
Several factors make the billing process complex, including: • differences between the billing rates and reimbursement rates for our products; • compliance with complex federal and state regulations related to billing government healthcare programs, including Medicare, Medicaid and TRICARE; • risk of government audits related to billing; • disputes among payors as to which party is responsible for payment; • differences in coverage and information and billing requirements among payors, including the need for prior authorization and/or advanced notification; • the effect of patient co-payments or co-insurance and our ability to collect such payments from patients; • changes to billing codes used for our products; 50 Table of Contents • changes to requirements related to our current or future clinical studies, including our registry studies, which can affect eligibility for payment; • ongoing monitoring provisions of LCDs for our products, which can affect the circumstances under which a claim would be considered medically necessary; • incorrect or missing billing information; and • the resources required to manage the billing and claims appeals process.
Our existing cash and cash equivalents and short-term investments, will not be sufficient for us to achieve cash-flow break even and we expect to need to seek additional capital in the near future.
Nevertheless, our existing cash and cash equivalents and short-term investments, will not be sufficient for us to achieve cash-flow break even and we expect to need to seek additional capital in the near future.
If a third party claims that we or any of our licensors, customers or collaboration partners infringe upon a third-party’s intellectual property rights, we may have to: • seek to obtain licenses that may not be available on commercially reasonable terms, if at all; 59 Table of Contents • abandon any product or service alleged or held to infringe, or redesign our products or technologies or processes to avoid potential assertion of infringement; • pay substantial damages including, in exceptional cases, treble damages and attorneys’ fees, which we may have to pay if a court decides that the product or proprietary technology at issue infringes upon or violates the third-party’s rights; • pay substantial royalties or fees for, or grant cross-licenses to, our technology; or • defend litigation or administrative proceedings that may be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources.
If a third party claims that we or any of our licensors, customers or collaboration partners infringe upon a third-party’s intellectual property rights, we may have to: • seek to obtain licenses that may not be available on commercially reasonable terms, if at all; • abandon any product or service alleged or held to infringe, or redesign our products or technologies or processes to avoid potential assertion of infringement; • pay substantial damages including, in exceptional cases, treble damages and attorneys’ fees, which we may have to pay if a court decides that the product or proprietary technology at issue infringes upon or violates the third-party’s rights; • pay substantial royalties or fees for, or grant cross-licenses to, our technology; or • defend litigation or administrative proceedings that may be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources.
In the event it becomes necessary to utilize different contract manufacturers for our OGM-based instruments or chip consumables, we would experience additional costs, delays and difficulties in doing so as a result of identifying and entering into an agreement with a new supplier as well as preparing such new supplier to meet the logistical requirements associated with manufacturing our units, and our business would suffer.
In the event it becomes necessary to utilize different contract manufacturers for our OGM-based instruments, Ionic® Purification instruments or chip consumables, we would experience additional costs, delays and difficulties in doing so as a result of identifying and entering into an agreement with a new supplier as well as preparing such new supplier to meet the logistical requirements associated with manufacturing our units, and our business would suffer.
If we or our collaborators are required to obtain a PMA or 510(k) clearance for products based on our technology, we or they would be subject to a substantial number of additional requirements for medical devices, including establishment registration, device listing, Quality Systems Regulations which cover the design, testing, production, control, quality assurance, labeling, packaging, servicing, sterilization (if required), and storage and shipping of medical devices (among other activities), 49 Table of Contents product labeling, advertising, recordkeeping, post-market surveillance, post-approval studies, adverse event reporting, and correction and removal (recall) regulations.
If we or our collaborators are required to obtain a PMA or 510(k) clearance for products based on our technology, we or they would be subject to a substantial number of additional requirements for medical devices, including establishment registration, device listing, Quality Systems Regulations which cover the design, testing, production, control, quality assurance, labeling, packaging, servicing, sterilization (if required), and storage and shipping of medical devices (among other activities), product labeling, advertising, recordkeeping, post-market surveillance, post-approval studies, adverse event reporting, and correction and removal (recall) regulations.
We cannot assure you that we will achieve any of the intended results of the reverse stock split, including improved marketability and liquidity of our common stock, maintaining compliance with Nasdaq listing standards and encouraging trading in our common stock by long-term investors. Accordingly, the market price and the value of your investment could be materially and negatively impacted.
We cannot assure you that we will achieve any of the intended results of the reverse stock splits, including improved marketability and liquidity of our common stock, maintaining compliance with Nasdaq listing standards and encouraging trading in our common stock by long-term investors. Accordingly, the market price and the value of your investment could be materially and negatively impacted.
Our continued growth is likely to require significant capital expenditures and might divert financial resources from other projects such as the development or integration of new products, technologies and services. As additional products and technologies are commercialized, we may need to incorporate new equipment, implement new technology systems, or hire new personnel with different qualifications.
Any continued growth is likely to require significant capital expenditures and might divert financial resources from other projects such as the development or integration of new products, technologies and services. As additional products and technologies are commercialized, we may need to incorporate new equipment, implement new technology systems, or hire new personnel with different qualifications.
Our facilities and equipment could be harmed or rendered inoperable by natural or man-made disasters, including war, fire, earthquake, power loss, communications failure, terrorism, burglary, public health crises (including restrictions that may result from various geopolitical and macroeconomic developments, such as the ongoing conflict between Ukraine and Russia) or 42 Table of Contents other events, which may make it difficult or impossible for us to perform our testing services for some period of time or to receive and store samples.
Our facilities and equipment could be harmed or rendered inoperable by natural or man-made disasters, including war, fire, earthquake, power loss, communications failure, terrorism, burglary, public health crises (including restrictions that may result from various geopolitical and macroeconomic developments, such as the ongoing conflict between Ukraine and Russia) or other events, which may make it difficult or impossible for us to perform our testing services for some period of time or to receive and store samples.
Investors should not rely on our operating results for any prior periods as an indication of our future operating performance. To effectively manage our anticipated future growth, we must continue to maintain and enhance our financial, accounting, manufacturing, customer support and sales administration systems, processes and controls, and to integrate such systems, processes and controls into our newly acquired businesses.
Investors should not rely on our operating results for any prior periods as an indication of our future operating performance. To effectively manage any future growth, we must continue to maintain and enhance our financial, accounting, manufacturing, customer support and sales administration systems, processes and controls, and to integrate such systems, processes and controls into our acquired businesses.
Our ability to successfully market the products and diagnostic assays that we have developed, and may develop in the future, will depend on numerous factors, including: • conducting clinical utility studies of such assays in collaboration with key thought leaders to demonstrate their use and value in important medical decisions such as treatment selection; • whether our current or future partners, vigorously support our offerings; • the success of our sales force; • whether healthcare providers believe such diagnostic assays provide clinical utility; 38 Table of Contents • whether the medical community accepts that such diagnostic assays are sufficiently sensitive and specific to be meaningful in patient care and treatment decisions; • our ability to continually source raw materials, shipping kits and other products that we sell or consume in our manufacturing process that are of sufficient quality and supply; • our ability to continue to fund planned sales and marketing activities; and • whether private health insurers, government health programs and other third-party payors will adopt our current and future assays in their guidelines, or cover such diagnostic assays and, if so, whether they will adequately reimburse us.
Our ability to successfully market the products and diagnostic assays that we have developed, and may develop in the future, will depend on numerous factors, including: • conducting clinical utility studies of such assays in collaboration with key thought leaders to demonstrate their use and value in important medical decisions such as treatment selection; • whether our current or future partners, vigorously support our offerings; • the success of our sales efforts; • whether healthcare providers believe such diagnostic assays provide clinical utility; • whether the medical community accepts that such diagnostic assays are sufficiently sensitive and specific to be meaningful in patient care and treatment decisions; • our ability to continually source raw materials, shipping kits and other products that we sell or consume in our manufacturing process that are of sufficient quality and supply; • our ability to continue to fund planned sales and marketing activities; and • whether private health insurers, government health programs and other third-party payors will adopt our current and future assays in their guidelines, or cover such diagnostic assays and, if so, whether they will adequately reimburse us.
Our Bionano Laboratories diagnostic services are provided as LDTs. The FDA maintains that LDTs are medical devices and has for the most part exercised enforcement discretion for most LDTs. A significant change in the way that the FDA regulates any LDTs that we, our collaborators or our customers market or develop using our technology could affect our business.
Our Bionano Laboratories diagnostic services are provided as LDTs. The FDA maintains that LDTs are medical devices and has for the most part exercised enforcement discretion for most LDTs. A significant change in the way that the FDA regulates any LDTs that we, our collaborators or our customers market or develop using our technology could materially adversely affect our business.
Global economic conditions have been worsening, with disruptions to, and volatility in, the credit and financial markets in the U.S. and worldwide resulting from the effects of ongoing geopolitical or macroeconomic developments. If these conditions persist or worsen, we could experience an inability to access additional capital.
Global economic conditions have been challenging, with disruptions to, and volatility in, the credit and financial markets in the U.S. and worldwide resulting from the effects of ongoing geopolitical or macroeconomic developments. If these conditions persist or worsen, we could experience an inability to access additional capital.
Furthermore, if we were unable to repay the Notes or other permitted indebtedness then due and payable, secured lenders could proceed against the assets, if any, securing such indebtedness. In the event such lenders or holders accelerate the repayment of the Notes, or our other permitted borrowings, we may not have sufficient assets to repay that indebtedness.
Furthermore, if we were unable to repay the Debentures or other permitted indebtedness then due and payable, secured lenders could proceed against the assets, if any, securing such indebtedness. In the event such lenders or holders accelerate the repayment of the Debentures, or our other permitted borrowings, we may not have sufficient assets to repay that indebtedness.
Moreover, employee litigation related to the headcount reductions could be costly and prevent management from fully concentrating on the business.
Moreover, any employee litigation related to the headcount reductions could be costly and prevent management from fully concentrating on the business.
Risks related to our financial condition and need for additional capital We have incurred recurring net losses since we were formed and expect to incur losses in the future. We cannot be certain that we will achieve or sustain profitability. Since our inception, we have incurred recurring net losses.
Risks related to our financial condition and need for additional capital We have incurred recurring net losses since we were formed and expect to incur losses in the future. We cannot be certain that we will ever achieve or sustain profitability.
Our future capital needs are uncertain and we may require additional funding in the future to advance the commercialization of our OGM systems, Ionic Purification system, VIA software, and our other products, technologies and services, as well as continue our research and development efforts.
Our future capital needs are uncertain and we will require additional funding in the future to advance the commercialization of our OGM systems, Ionic ® Purification system, VIA ™ software, and our other products, technologies and services, as well as continue our research and development efforts.
Our ability to make scheduled payments of principal or default interest, if any, or to refinance the Notes or our other permitted indebtedness, depends on our future performance, which is subject to economic, financial, competitive and other factors, some of which are beyond our control.
Our ability to make scheduled payments of principal or default interest, if any, or to refinance the Debentures or our other permitted indebtedness, depends on our future performance, which is subject to economic, financial, competitive and other factors, some of which are beyond our control.
Such a default may allow holders of the Notes, if any, or the holders or lenders of our other permitted indebtedness, as applicable, to accelerate the related indebtedness, which may result in the acceleration of other indebtedness to which a cross-acceleration or cross-default provision applies. In addition, such lenders or holders could terminate commitments to lend money, if any.
Such a default may allow holders of the Debentures, if any, or the holders or lenders of our other permitted indebtedness, as applicable, to accelerate the related indebtedness, which may result in the acceleration of other indebtedness to which a cross-acceleration or cross-default provision applies. In addition, such lenders or holders could terminate commitments to lend money, if any.
For example, our headcount reductions could yield unanticipated consequences and costs, such as increased difficulties in implementing our business strategy due to the loss of institutional knowledge and expertise, reduced strength of our sales force and marketing efforts, attrition beyond the intended number of employees, decreased morale among our remaining employees, and the risk that we may not achieve the anticipated benefits of the reduction in force.
For example, our headcount reductions could yield unanticipated consequences and costs, such as increased difficulties in implementing our business strategy due to the loss of institutional knowledge and expertise, reduced strength of our sales force and marketing efforts, attrition beyond the intended number of employees, decreased morale among our remaining employees, and the risk that we may not achieve the anticipated benefits of 28 Table of Contents the reduction in force.
The future sales of our products and technologies will depend in large part on our ability to effectively market and sell our products and technologies, successfully manage and expand our sales force, and increase the scope of our marketing efforts. We may also enter into additional distribution arrangements in the future.
The future sales of our products and technologies will depend in large part on our ability to effectively market and sell our products and technologies, successfully maintain and manage our sales force, and increase the scope of our marketing efforts. We may also enter into additional distribution arrangements in the future.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: • any derivative action or proceeding brought on our behalf; • any action asserting a breach of fiduciary duty; • any action asserting a claim against us arising under the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws; and • any action asserting a claim against us that is governed by the internal-affairs doctrine.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: 67 Table of Contents • any derivative action or proceeding brought on our behalf; • any action asserting a breach of fiduciary duty; • any action asserting a claim against us arising under the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws; and • any action asserting a claim against us that is governed by the internal-affairs doctrine.
If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing data (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; divergent of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms.
If we (or a third party with whom we work) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing data (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; divergent of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms.
In addition to other risk factors listed in this section, some of the important factors that, alone or together, may cause fluctuations in our quarterly and annual operating results include: • adoption of our OGM solutions on our OGM systems, Ionic Purification system or successor systems; • our successful creation of an end-to-end solution for OGM; • execution on our commercial and reimbursement strategy involving Bionano Laboratories; • customer demand for current BioDiscovery software solutions, including VIA software, and future software solutions developed through BioDiscovery’s platform; • the position of our Purigen business in the DNA isolation space of genome analysis and customer demand for our Ionic Purification system; • the timing of customer orders and payments and our ability to recognize revenue; • the rate of utilization of consumables by our customers; • reductions in or other difficulties relating to staffing, capacity, shutdowns or slowdowns of laboratories and other institutions in our customer base, such as reduced or delayed investment in new technologies or spending on products, technologies or consumables; • differences in purchasing patterns across our customer base, including potential differences in consumables spending between earlier adopters of our technologies and more recent customers and variances in rates of increase of consumables spending following new technology purchases; • geopolitical and macroeconomic developments, such as the conflict between Ukraine and Russia and related sanctions, conflicts in the middle east, potential future disruptions in access to bank deposits or lending commitments due to bank failures, global pandemics, inflation, increased cost of goods, supply chain issues, and global financial market conditions; 30 Table of Contents • our ability to successfully integrate new personnel, technology and other assets that we may acquire into our company; • any cost saving and restructuring initiatives; • the timing of the introduction of new systems, products, technologies, system and product enhancements and services; • changes in governmental funding of life sciences research and development or other changes that impact budgets, budget cycles or seasonal or other spending patterns of our customers; • future accounting pronouncements or changes in our accounting policies; and • the outcome of any current or future litigation or governmental investigations involving us or other third parties with whom we do business.
In addition to other risk factors listed in this section, some of the important factors that, alone or together, may cause fluctuations in our quarterly and annual operating results include: • adoption of our OGM solutions on our OGM systems, Ionic® Purification system or successor systems; • our successful creation of an end-to-end solution for OGM; • execution on our commercial and reimbursement strategy involving Bionano Laboratories; • customer demand for our software solutions, including VIA™ software, and future software solutions developed through this platform; 29 Table of Contents • the position of our DNA isolation business in genome analysis space and customer demand for our Ionic® Purification system; • the timing of customer orders and payments and our ability to recognize revenue; • the rate of utilization of consumables by our customers; • reductions in or other difficulties relating to staffing, capacity, shutdowns or slowdowns of laboratories and other institutions in our customer base, such as reduced or delayed investment in new technologies or spending on products, technologies or consumables; • differences in purchasing patterns across our customer base, including potential differences in consumables spending between earlier adopters of our technologies and more recent customers and variances in rates of increase of consumables spending following new technology purchases; • geopolitical and macroeconomic developments, such as the conflict between Ukraine and Russia and related sanctions, conflicts in the Middle East, potential future disruptions in access to bank deposits or lending commitments due to bank failures, global pandemics, inflation, increased cost of goods, supply chain issues, and global financial market conditions; • our ability to successfully integrate new personnel, technology and other assets that we may acquire into our company; • any cost saving and restructuring initiatives and our ability to successfully maintain our business operations and customer support at historic levels; • the timing of the introduction of new systems, products, technologies, system and product enhancements and services; • changes in governmental funding of life sciences research and development or other changes that impact budgets, budget cycles or seasonal or other spending patterns of our customers; • future accounting pronouncements or changes in our accounting policies; and • the outcome of any current or future litigation or governmental investigations involving us or other third parties with whom we do business.
As we have done previously, we may need or may choose to obtain licenses and/or acquire intellectual property rights from third parties to advance our research or begin commercialization of our current or future products or services, and we cannot 58 Table of Contents provide any assurances that third-party patents do not exist that might be enforced against our current or future products or services in the absence of such a license.
As we have done previously, we may need or may choose to obtain licenses and/or acquire intellectual property rights from third parties to advance our research or begin commercialization of our current or future products or services, and we cannot provide any assurances that third-party patents do not exist that might be enforced against our current or future products or services in the absence of such a license.
In addition, the existence of the Notes and Registered Warrants may encourage short selling by market participants because the conversion of the Notes and exercise of the Registered Warrants could be used to satisfy short positions, or anticipated conversion of the Notes or exercise of the Registered Warrants into shares of our common stock could depress the price of our common stock.
In addition, the existence of the Debentures and Registered Warrants may encourage short selling by market participants because the conversion of the Debentures and exercise of the Registered Warrants could be used to satisfy short positions, or anticipated conversion of the Debentures or exercise of the Registered Warrants into shares of our common stock could depress the price of our common stock.
Our results of operations could be adversely affected by general conditions in the global economy, the global financial markets and adverse geopolitical and macroeconomic developments, including without limitation inflation, potential future disruptions in access to bank deposits or lending commitments due to bank failures, slowing growth, rising interest rates and recession and the conflicts in the middle east.
Our results of operations could be adversely affected by general conditions in the global economy, the global financial markets and adverse geopolitical and macroeconomic developments, including without limitation inflation, potential future disruptions in access to bank deposits or lending commitments due to bank failures, slowing growth, rising interest rates and recession and the conflicts between Ukraine and Russia and in the Middle East.
Some European regulators have ordered certain 47 Table of Contents companies to suspend or permanently cease certain transfers of personal data out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations. In addition, privacy advocates and industry groups have proposed, and may propose in the future, standards with which we may be legally or contractually bound to comply.
Some European regulators have ordered certain companies to suspend or permanently cease certain transfers of personal data out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations. In addition, privacy advocates and industry groups have proposed, and may propose in the future, standards with which we may be legally or contractually bound to comply.
We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (such as through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (credential stuffing), credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, attacks enhanced or facilitated by AI, earthquakes, fires, floods, and other similar threats.
We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (such as through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (credential stuffing), credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, attacks enhanced or facilitated by AI, earthquakes, fires, floods, and other similar threats.
Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets. 66 Table of Contents Further, as a “non-accelerated filer” we are not required to obtain an independent assessment of the effectiveness of our internal controls.
Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets. Further, as a “non-accelerated filer” we are not required to obtain an independent assessment of the effectiveness of our internal controls.
We also intend to file future registration statements on Form S-8 under the Securities Act registering the issuance of additional shares of common stock, including because the number of shares that may be issued under certain employee equity benefit plans automatically increase as a result of the operation of certain “evergreen” provisions in our equity plans.
We also intend to file future registration statements on Form S-8 under the Securities Act registering the issuance of additional shares of 66 Table of Contents common stock, including because the number of shares that may be issued under certain employee equity benefit plans automatically increase as a result of the operation of certain “evergreen” provisions in our equity plans.
We believe that the principal competitive factors in all of our target markets include: • cost of instruments and consumables; • accuracy, including sensitivity and specificity, and reproducibility of results; 48 Table of Contents • reputation among customers and key opinion leaders; • innovation in product offerings; • flexibility, scalability and ease of use; and • compatibility with existing laboratory processes, tools and methods.
We believe that the principal competitive factors in all of our target markets include: • cost of instruments and consumables; • accuracy, including sensitivity and specificity, and reproducibility of results; • reputation among customers and key opinion leaders; • innovation in product offerings; • flexibility, scalability and ease of use; and • compatibility with existing laboratory processes, tools and methods.
If third-party payors do not provide coverage of, or do not provide adequate reimbursement for, 51 Table of Contents a substantial portion of the list price of our Bionano Laboratories products and diagnostic assays, we may need to seek additional payment from the patient beyond any co-payments and deductibles, which may adversely affect demand for our Bionano Laboratories products and diagnostic assays.
If third-party payors do not provide coverage of, or do not provide adequate reimbursement for, a substantial portion of the list price of our Bionano Laboratories products and diagnostic assays, we may need to seek additional payment from the patient beyond any co-payments and deductibles, which may adversely affect demand for our Bionano Laboratories products and diagnostic assays.
If the FDA determines that our RUO products are being marketed for clinical diagnostic use without the required PMA or 510(k) clearance, we may be required to cease marketing our products as planned, recall the products from customers, revise our marketing plans, and/or suspend or delay the commercialization of our products until we obtain the 41 Table of Contents required authorization.
If the FDA determines that our RUO products are being marketed for clinical diagnostic use without the required PMA or 510(k) clearance, we may be required to cease marketing our products as planned, recall the products from customers, revise our marketing plans, and/or suspend or delay the commercialization of our products until we obtain the required authorization.
For example, we completed the Purigen acquisition in November 2022 and will need to devote time and resources in order to further develop and integrate Purigen’s Ionic Purification system for our current and anticipated product offerings. We may be unsuccessful in achieving our desired results or in marketing such solutions to our future customers.
For example, we completed the Purigen acquisition in November 2022 and have devoted and will need to continue to devote time and resources in order to further develop and integrate Purigen’s Ionic® Purification system for our current and anticipated product offerings. We may be unsuccessful in achieving our desired results or in marketing such solutions to our future customers.
To the extent any of our current or future intellectual property is generated through the use of U.S. government funding, the provisions of the Bayh-Dole Act may similarly apply. Any exercise by the government of certain of its rights could harm our competitive position, business, financial condition, results of operations and prospects.
To the extent any of our current or future intellectual property is generated through the use of U.S. government funding, the 57 Table of Contents provisions of the Bayh-Dole Act may similarly apply. Any exercise by the government of certain of its rights could harm our competitive position, business, financial condition, results of operations and prospects.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against 60 Table of Contents us.
If our management is unable to effectively manage our anticipated growth, our expenses may increase more than expected, our revenue could decline or grow more slowly than expected and we may be unable to implement our business strategy.
If our management is unable to effectively manage any growth, our expenses may increase more than expected, our revenue could decline or grow more slowly than expected and we may be unable to implement our business strategy.
Management’s Discussion and Analysis of Operations – Liquidity and Capital Resources”, or if we experience significant adverse consequences of such initiative, our business, financial condition, and results of operations may be materially adversely affected.
Management’s Discussion and Analysis of Operations – Liquidity and Capital Resources”, or if we experience significant adverse consequences of such initiatives, our business, financial condition, and results of operations may be materially adversely affected.
In addition, effective January 1, 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenses for tax purposes in the year incurred and requires taxpayers to capitalize and subsequently amortize such expenses over five years for research activities conducted in the United States and over 15 years for research activities 34 Table of Contents conducted outside the United States.
In addition, effective January 1, 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenses for tax purposes in the year incurred and requires taxpayers to capitalize and subsequently amortize such expenses over five years for research activities conducted in the United States and over 15 years for research activities conducted outside the United States.
Recent developments in U.S. patent law have made it more difficult to stop these and related practices based on theories of patent infringement. 61 Table of Contents Changes in patent laws or patent jurisprudence could diminish the value of patents in general, thereby impairing our ability to protect our products or technologies.
Recent developments in U.S. patent law have made it more difficult to stop these and related practices based on theories of patent infringement. Changes in patent laws or patent jurisprudence could diminish the value of patents in general, thereby impairing our ability to protect our products or technologies.
We have encountered in the past, and will continue to encounter in the future, risks and difficulties frequently experienced by early commercial-stage companies, including those associated with scaling up our infrastructure, increasing the size of our organization, integrating acquired businesses and implementing cost savings initiatives.
We have encountered in the past, and will continue to encounter in the future, risks and difficulties frequently experienced by early commercial-stage companies, including those associated with scaling up our infrastructure, increasing and decreasing the size of our organization, integrating acquired businesses and implementing cost saving initiatives.
As our international operations grow, our results of operations and cash flows will be subject to increasing fluctuations due to changes in foreign currency exchange rates, which could harm our business.
If our international operations grow, our results of operations and cash flows will be subject to increasing fluctuations due to changes in foreign currency exchange rates, which could harm our business.
We may become subject to claims that one or more current or 60 Table of Contents former employees, consultants, advisors, or independent contractors of ours owns rights in our intellectual property and/or has assigned or is under an obligation to assign rights in our intellectual property to another party. This may include a competitor of ours.
We may become subject to claims that one or more current or former employees, consultants, advisors, or independent contractors of ours owns rights in our intellectual property and/or has assigned or is under an obligation to assign rights in our intellectual property to another party. This may include a competitor of ours.
A default would also likely significantly diminish the market price of our common stock. Furthermore, as a result of these restrictions, we may be limited in 33 Table of Contents how we conduct and grow our business, be unable to compete effectively or be unable to take advantage of new business opportunities.
A default would also likely significantly diminish the market price of our common stock. Furthermore, as a result of these restrictions, we may be limited in how we conduct and grow our business, be unable to compete effectively or be unable to take advantage of new business opportunities.
In addition, since we sometimes indemnify customers, collaborators or licensees, we may have additional liability in connection with any infringement or alleged infringement of third-party intellectual property. Intellectual property litigation can be very expensive, and we may not have the financial means to defend ourselves or our customers, collaborators and licensees.
In addition, since we 58 Table of Contents sometimes indemnify customers, collaborators or licensees, we may have additional liability in connection with any infringement or alleged infringement of third-party intellectual property. Intellectual property litigation can be very expensive, and we may not have the financial means to defend ourselves or our customers, collaborators and licensees.
We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on the Notes or our other indebtedness.
We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on the Debentures or our other indebtedness.
In addition, we are a party to a number of other agreements that include licenses to intellectual property, including non-exclusive licenses. We may need to enter into additional license agreements in the future.
We are a party to a number of agreements that include licenses to intellectual property, including non-exclusive licenses. We may need to enter into additional license agreements in the future.
Countries with statutory health insurance (e.g., Germany, France, The Netherlands) tend to be more progressive in technology adoption with favorable reimbursement for molecular diagnostic testing. In countries such as the United Kingdom with tax-based insurance, adoption and reimbursement for molecular diagnostic testing is not uniform and is influenced by local budgets.
Countries with statutory health insurance (e.g., Germany, France, The Netherlands) tend to be more progressive in technology adoption with favorable reimbursement for molecular diagnostic testing. In countries such as the UK with tax-based insurance, adoption and reimbursement for molecular diagnostic testing is not uniform and is influenced by local budgets.
Any violations of anti-corruption and anti-money laundering laws, or allegations of such violations, could disrupt our operations, involve significant management distraction, involve significant costs and expenses, including legal fees, and could 55 Table of Contents result in a material adverse effect on our business, prospects, financial condition, or results of operations.
Any violations of anti-corruption and anti-money laundering laws, or allegations of such violations, could disrupt our operations, involve significant management distraction, involve significant costs and expenses, including legal fees, and could result in a material adverse effect on our business, prospects, financial condition, or results of operations.
Failure to effectively manage our anticipated growth could lead us to over-invest or under-invest in development, operational and administrative infrastructure; result in weaknesses in our infrastructure, systems, or controls; give rise to operational mistakes, losses, loss of customers, productivity or business opportunities; and result in loss of employees and reduced productivity of remaining employees.
Failure to effectively manage any future growth could lead us to over-invest or under-invest in development, operational and administrative infrastructure; result in weaknesses in our infrastructure, systems, or controls; give rise to operational mistakes, losses, loss of customers, productivity or business opportunities; and result in loss of employees and reduced productivity of remaining employees.
Accordingly, in addition to transaction costs, these acquisitions have increased our operating expenses, further increasing our net losses. We cannot 36 Table of Contents predict the number, timing or size of any future strategic transactions, or the effect that any such transactions might have on our operating results.
Accordingly, in addition to transaction costs, these acquisitions have increased our operating expenses, further increasing our net losses. We cannot predict the number, timing or size of any future strategic transactions, or the effect that any such transactions might have on our operating results.
As a result, the reverse stock split increased the number of shares of our common stock (or securities convertible or exchangeable for our common stock) available for issuance by decreasing the number of shares of our common stock issued and outstanding.
As a result, the reverse stock splits increased the number of shares of our common stock (or securities convertible or exchangeable for our common stock) available for issuance by decreasing the number of shares of our common stock issued and outstanding.
In addition, we may not achieve the revenues, growth prospects and synergies expected from these recent acquisitions, and any such benefits we do achieve may not offset our increased costs, resulting in a potential impairment of goodwill or other assets that were acquired.
In addition, we may not achieve the revenues, growth prospects and synergies expected from these recent acquisitions, and any such benefits we do achieve may not offset our increased costs, resulting in an impairment of goodwill or other assets that were acquired.
Remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit, and in public locations.
Remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at 45 Table of Contents home, while in transit, and in public locations.
In addition, any such issuance of additional shares of our common stock could have the effect of diluting the earnings per share and book value per share of outstanding shares of our common stock. 65 Table of Contents Additionally, such effective increase in the number of shares of our common stock available for issuance could, under certain circumstances, have anti-takeover implications.
In addition, any such issuance of additional shares of our common stock could have the effect of diluting the earnings per share and book value per share of outstanding shares of our common stock. Additionally, such effective increase in the number of shares of our common stock available for issuance could, under certain circumstances, have anti-takeover implications.
Historically, a significant part of our sales and marketing efforts has been directed at demonstrating the advantages of our technology to industry leaders, including those key opinion leaders, and encouraging such leaders to publish or present the results of their evaluation of our system.
Historically, a significant part of our sales and marketing efforts has been directed at demonstrating the advantages of our technology to industry leaders, including those key opinion leaders, and encouraging such leaders to 36 Table of Contents publish or present the results of their evaluation of our system.
Our future financial performance and our ability to develop our product candidates or additional assets will depend, in part, on our ability to effectively manage future growth or restructuring, as the case may be. In addition, if we are unable to realize the anticipated benefits from our cash savings initiatives including those we discussed under “Part II. Item 7.
Our future financial performance and our ability to develop our product candidates or additional assets will depend, in part, on our ability to effectively manage future growth or restructuring, as the case may be. In addition, if we are unable to realize the anticipated benefits from our cost saving initiatives including those we discussed under “Part II. Item 7.
Upon an event of default under the Notes, we may not be able to make any accelerated payments under the Notes or our other permitted indebtedness.
Upon an event of default under the Debentures, we may not be able to make any accelerated payments under the Debentures or our other permitted indebtedness.
Although the reverse stock split was prompted by business and financial considerations, you should be aware the reverse stock split could facilitate future efforts by us to deter or prevent changes in control, including transactions in which you might otherwise receive a premium for your shares over then current market prices.
Although the reverse stock splits were prompted by business and financial considerations, you should be aware the reverse stock splits could facilitate future efforts by us to deter or prevent changes in control, including transactions in which you might otherwise receive a premium for your shares over then current market prices.
The Notes and the Purchase Agreement contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest.
The Debentures and the Debenture Purchase Agreement contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest.
In addition, the marketing, sale and use of our current or future products and assays could lead to the 43 Table of Contents filing of product liability claims against us if someone alleges that our products failed to perform as designed.
In addition, the marketing, sale and use of our current or future products and assays could lead to the filing of product liability claims against us if someone alleges that our products failed to perform as designed.
Because we have limited experience in marketing and selling our products and technologies, our ability to forecast demand, the infrastructure required to support such demand and the sales cycle to customers is unproven. If we do not build an efficient and effective sales force, our business and operating results will be adversely affected.
Because we have limited experience in marketing and selling our products and technologies, our ability to forecast demand, the infrastructure required to support such demand and the 41 Table of Contents sales cycle to customers is unproven. If we do not build an efficient and effective sales force, our business and operating results will be adversely affected.
Any of the previously identified or similar threats could cause a security incident or other interruption. that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our Sensitive Data or our information technology systems, or those of the third parties upon whom we rely.
Any of the previously identified or similar threats could cause a security incident or other interruption. that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our Sensitive Data or our information technology systems, or those of the third parties with whom we work.
Our ability to meet the financial tests under the Notes can be affected by events beyond our control, and we may be unable to meet them.
Our ability to meet the financial tests under the Debentures can be affected by events beyond our control, and we may be unable to meet them.
The reverse stock split we implemented may not achieve the intended results and the market price of our common stock may be materially and negatively impacted.
The reverse stock splits we implemented may not achieve the intended results and the market price of our common stock may be materially and negatively impacted.
If we seek additional 29 Table of Contents financing to fund our business activities in the future and there remains doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially reasonable terms or at all.
If we seek additional financing to fund our business activities in the future and there remains doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially reasonable terms or at all.
The ACA is a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.
In March 2010, the ACA became law. The ACA is a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.
A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our products, software and services. We may expend significant resources or modify our business activities (including our clinical trial activities) in an effort to protect against security incidents.
A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our products, software and services. We may expend significant resources or modify our business activities (including our clinical trial activities) in an effort to protect against security incidents.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company’s CFO is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel. The Company’s CFO is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Biggest changeOur CISO relies on both internal and external cybersecurity resources to manage overall cybersecurity risks. The Company’s PFO is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel.
The Audit Committee receives periodic reports concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them. The Audit Committee also receives various reports, summaries or presentations related to cybersecurity threats, risk and mitigation. 71 Table of Contents
The Audit Committee receives periodic reports concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them. The Audit Committee also receives various reports, summaries or presentations related to cybersecurity threats, risk and mitigation. 72 Table of Contents
IT security leadership, the CFO, CEO and GC work with the Company’s incident response team to help the Company mitigate and 70 Table of Contents remediate cybersecurity incidents of which they are notified. In addition, the Company’s incident response plan includes reporting to the Audit Committee for certain cybersecurity incidents.
IT security leadership, the PFO, CEO and GC work with the Company’s incident response team to help the Company mitigate and 71 Table of Contents remediate cybersecurity incidents of which they are notified. In addition, the Company’s incident response plan includes reporting to the Audit Committee for certain cybersecurity incidents.
The Audit Committee is responsible for overseeing the Company’s cybersecurity risk management processes, including oversight of mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our CFO who serves as our CISO. Our CISO relies on both internal and external cybersecurity resources to manage overall cybersecurity risks.
The Audit Committee is responsible for overseeing the Company’s cybersecurity risk management processes, including oversight of mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Principal Financial Officer (“PFO”) who serves as our CISO.
Our cybersecurity incident response plan is designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including IT security leadership, the CFO, CEO, General Counsel (“GC”) and third-party consultants as needed.
The Company’s PFO is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports. Our cybersecurity incident response plan is designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including IT security leadership, the PFO, CEO, General Counsel (“GC”) and third-party consultants as needed.

Item 2. Properties

Properties — owned and leased real estate

4 edited+1 added−0 removed3 unchanged
Biggest changeIn November 2022, through the acquisition of Purigen, we obtained an operating lease for approximately 16,165 square feet of office and laboratory space in Pleasanton, California that expires in July 2027. We conduct part of our Purigen business at this property. We believe our properties are sufficient to satisfy our current needs.
Biggest changeIn November 2022, through the acquisition of Purigen, we obtained an operating lease for approximately 16,165 square feet of office and laboratory space in Pleasanton, California that was to expire in July 2027. In January 2025, the Company entered into a lease termination agreement with the landlord for the facility in Pleasanton, California.
In August 2020, through the acquisition of Lineagen we obtained a lease for approximately 9,710 square feet of office space in Salt Lake City, Utah under a non-cancelable operating lease that expires in December 2026. We conduct part of our Bionano Laboratories business at this property.
In August 2020, through the acquisition of Lineagen we obtained a lease for approximately 9,710 square feet of office space in Salt Lake City, Utah under a non-cancelable operating lease that was to expire December 2026. We conducted part of our Bionano Laboratories business at this property.
In connection with the Company’s restructuring initiatives, the Company entered into a lease termination agreement on February 28, 2024 with the landlord for the facility in Salt Lake City. The Company will continue to lease the property through June 2024.
In connection with the Company’s restructuring initiatives, the Company entered into a lease termination agreement on February 28, 2024 with the landlord for the facility in Salt Lake City. The Company continued to lease the property through the end of June 2024.
In October 2021, through the acquisition of BioDiscovery, we obtained a finance lease for approximately 4,786 square feet of office space in El Segundo, California that expires in February 2041. We conduct part of our BioDiscovery business at this property.
In October 2021, through the acquisition of BioDiscovery, we obtained a finance lease for approximately 4,786 square feet of office space in El Segundo, California that expires in February 2041.
Added
The Company continued to lease the property through the end of January 2025. We believe our properties are sufficient to satisfy our current needs.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

1 edited+1 added−1 removed3 unchanged
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on The Nasdaq Capital Market under the symbol “BNGO.” Common Stock Holders As of February 29, 2024, there were approximately 62 holders of record of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on The Nasdaq Capital Market under the symbol “BNGO.” Common Stock Holders As of March 24, 2025, there were approximately 24 holders of record of our common stock.
Removed
Recent Sales of Unregistered Securities Not applicable. ITEM 6. [RESERVED]
Added
Recent Sales of Unregistered Securities All unregistered sales of equity securities during the year ended December 31, 2024 have been previously reported. ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

74 edited+72 added−56 removed30 unchanged
Biggest changeResults of Operations The following table sets forth our results of operations for the years ended December 31, 2023 and 2022: 75 Table of Contents Years Ended December 31, Period-to-Period Change 2023 2022 $ % Revenues: Product revenue $ 26,727,000 $ 20,425,000 $ 6,302,000 31% Service and other revenue 9,389,000 7,377,000 2,012,000 27% Total revenue 36,116,000 27,802,000 8,314,000 30% Cost of revenue: Cost of product revenue 20,415,000 15,966,000 4,449,000 28% Cost of service and other revenue 6,135,000 5,891,000 244,000 4% Total cost of revenue 26,550,000 21,857,000 4,693,000 21% Research and development 54,032,000 49,047,000 4,985,000 10% Selling, general and administrative 93,499,000 88,596,000 4,903,000 6% Goodwill Impairment 77,280,000 — 77,280,000 100 % Total operating expenses 224,811,000 137,643,000 87,168,000 63% Loss from operations (215,245,000) (131,698,000) (83,547,000) 63% Other income (expenses): Interest income 3,311,000 1,507,000 1,804,000 120% Interest expense (5,119,000) (298,000) (4,821,000) 1,618% Other income (expenses) 3,449,000 (223,000) 3,672,000 (1,647)% Loss on High Trail Agreement (18,827,000) — (18,827,000) 100% Total other income (expenses) (17,186,000) 986,000 (18,172,000) (1,843)% Loss before income taxes (232,431,000) (130,712,000) (101,719,000) 78% Benefit (provision) for income taxes (62,000) (1,884,000) 1,822,000 (97)% Net loss $ (232,493,000) $ (132,596,000) $ (99,897,000) 75% Revenue Years Ended December 31, Period-to-Period Change 2023 2022 $ % Instruments $ 9,999,000 $ 8,567,000 $ 1,432,000 17% Consumables 11,157,000 6,731,000 4,426,000 66% Software 5,571,000 5,127,000 444,000 9% Total product revenue 26,727,000 20,425,000 6,302,000 31% Services and other 9,389,000 7,377,000 2,012,000 27% Total revenue $ 36,116,000 $ 27,802,000 $ 8,314,000 30% Revenue increased by $8.3 million, or 30% to $36.1 million for the year ended December 31, 2023, as compared to $27.8 million for the same period in 2022, driven primarily from an increase in instrument, consumable, and service and other revenue as discussed below.
Biggest changeResults of Operations 76 Table of Contents The following table sets forth our results of operations for the years ended December 31, 2024 and 2023: Years Ended December 31, Period-to-Period Change 2024 2023 $ % Revenues: Product revenue $ 27,008,000 $ 26,727,000 $ 281,000 1% Service and other revenue 3,768,000 9,389,000 (5,621,000) (60)% Total revenue 30,776,000 36,116,000 (5,340,000) (15)% Cost of revenue: Cost of product revenue 28,449,000 20,415,000 8,034,000 39% Cost of service and other revenue 1,947,000 6,135,000 (4,188,000) (68)% Total cost of revenue 30,396,000 26,550,000 3,846,000 14% Research and development 24,803,000 54,032,000 (29,229,000) (54)% Selling, general and administrative 51,855,000 92,758,000 (40,903,000) (44)% Goodwill Impairment — 77,280,000 (77,280,000) (100) % Intangible assets and other long-lived assets impairment 19,683,000 — 19,683,000 100% Restructuring costs 8,022,000 741,000 7,281,000 983% Total operating expenses 104,363,000 224,811,000 (120,448,000) (54)% Loss from operations (103,983,000) (215,245,000) 111,262,000 (52)% Other income (expenses): Interest income 2,101,000 3,311,000 (1,210,000) (37)% Other expenses (10,102,000) (20,497,000) 10,395,000 (51)% Total other income (expenses) (8,001,000) (17,186,000) 9,185,000 (53)% Loss before income taxes (111,984,000) (232,431,000) 120,447,000 (52)% Benefit (provision) for income taxes (33,000) (62,000) 29,000 (47)% Net loss $ (112,017,000) $ (232,493,000) $ 120,476,000 (52)% Revenue Years Ended December 31, Period-to-Period Change 2024 2023 $ % Instruments $ 8,043,000 $ 9,999,000 $ (1,956,000) (20)% Consumables 12,773,000 11,157,000 1,616,000 14% Software 6,192,000 5,571,000 621,000 11% Total product revenue 27,008,000 26,727,000 281,000 1% Services and other 3,768,000 9,389,000 (5,621,000) (60)% Total revenue $ 30,776,000 $ 36,116,000 $ (5,340,000) (15)% Total revenue decreased $5.3 million, or 15% to $30.8 million for the year ended December 31, 2024, as compared to $36.1 million for the same period in 2023, driven primarily by a decrease in service and other revenue.
Updates to assumptions could have a significant impact on the Company’s results of operations in any given period. Recent Accounting Pronouncements Refer to Note 2 - Summary of Significant Accounting Policies, in the accompanying notes to our consolidated financial statements included in this Annual Report for a discussion of recent accounting pronouncements.
Updates to assumptions could have a significant impact on the Company’s results of operations in any given period. Recent Accounting Pronouncements Refer to Note 2 (Summary of Significant Accounting Policies), in the accompanying notes to our consolidated financial statements included elsewhere in this Annual Report for a discussion of recent accounting pronouncements.
Based on recurring losses from operations incurred since inception and the expectation of continued operating losses, we anticipate our available cash balance will not be sufficient to operate our business for the next twelve months from the issuance of this report.
Based on recurring losses from operations incurred since inception and the expectation of continued operating losses, we anticipate our available cash balance will not be sufficient to operate our business for the next twelve months from the issuance of this Annual Report.
For instance, product demand may be reduced due to an economic recession, a decrease in corporate capital expenditures, high inflation rates, labor shortages, reduction in consumer confidence, adverse geopolitical and macroeconomic developments, or any similar negative economic condition. These negative effects could have a material impact on our operations, business, earnings, and liquidity.
For instance, product demand may be reduced due to an economic recession, a decrease in corporate capital expenditures, prolonged unemployment, high inflation rates, labor shortages, reduction in consumer confidence, adverse geopolitical and macroeconomic developments, or any similar negative economic condition. These negative effects could have a material impact on our operations, business, earnings, and liquidity.
Investing Activities 2023 Compared to 2022 Historically, our primary investing activities have consisted of capital expenditures for the purchase of capital equipment to support our expanding infrastructure, as well as the acquisitions of Lineagen, BioDiscovery and Purigen to grow our business. We expect to continue to incur additional costs for capital expenditures related to these efforts in future periods.
Investing Activities 2024 Compared to 2023 Historically, our primary investing activities have consisted of capital expenditures for the purchase of capital equipment to support our expanding infrastructure, as well as the acquisitions of Lineagen, BioDiscovery and Purigen to grow our business. We expect to continue to incur additional costs for capital expenditures related to these efforts in future periods.
We determined the likelihood of each independent milestone and used probability factors which were applied to the individual payments over the five year milestone term. A Monte Carlo Simulation was performed to determine the likelihood that the milestone will be achieved and was applied to the milestone consideration payment.
We determined the likelihood of each independent milestone and used probability factors which were applied to the individual payments over the five year milestone term. For the second milestone, we performed a Monte Carlo Simulation to determine the likelihood that the milestone will be achieved and was applied to the milestone consideration payment.
The fair value of the Purigen milestones are reassessed on a quarterly basis using a probability weighted model and a Monte Carlo Simulation. We determined the fair value of this milestone consideration using a scenario-based technique, as the trigger for payment is event driven.
The fair value of the Purigen milestones were reassessed on a quarterly basis using a probability weighted model and a Monte Carlo Simulation. We determined the fair value of this milestone consideration using a scenario-based technique, as the trigger for payment is event driven.
In response to the invasion, the United States, United Kingdom and EU, along with others, imposed significant new sanctions and export controls against Russia, Russian banks and certain Russian individuals and may implement additional sanctions or take further punitive actions in the future.
In response to the invasion, the United States, UK and EU, along with others, imposed significant new sanctions and export controls against Russia, Russian banks and certain Russian individuals and may implement additional sanctions or take further punitive actions in the future.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 72 Table of Contents You should read the following discussion and analysis of our financial condition and results of operations together in conjunction with our financial statements and the related notes included elsewhere in this Annual Report.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 73 Table of Contents You should read the following discussion and analysis of our financial condition and results of operations together in conjunction with our financial statements and the related notes included elsewhere in this Annual Report.
Increases or decreases in the fair value of the convertible notes payable can result from updates to assumptions such as the expected timing or probability of a qualified financing event, expected volatility or changes in discount rates. Judgment is used in determining these assumptions as of the initial valuation date and at each subsequent reporting period.
Increases or decreases in the fair value of the convertible High Trail Notes and Debentures payable can result from updates to assumptions such as the expected timing or probability of a qualified financing event, expected volatility or changes in discount rates. Judgment is used in determining these assumptions as of the initial valuation date and at each subsequent reporting period.
We anticipate that future sources of liquidity will principally come from sales of common stock and other equity instruments, borrowings from credit facilities and revenue from our commercial operations. See Notes 9 (High Trail Agreement) and 10 (Stockholder’s Equity and Stock-Based Compensation) to our consolidated financial statements for a discussion of our recent debt and equity activity.
We anticipate that future sources of liquidity will principally come from sales of common stock and other equity instruments, borrowings from credit facilities and revenue from our commercial operations. See Notes 9 (Debt) and 10 (Stockholder’s Equity and Stock-Based Compensation) to our consolidated financial statements for a discussion of our recent debt and equity activity.
Because the combined assets, liabilities and results of operations of the Company and the affiliates whose securities are pledged as collateral for the Notes are not materially different than the corresponding amounts presented in our consolidated financial statements, summarized financial information of affiliates whose securities are pledged as collateral for the Notes is not required to be presented under Rule 13-02.
Because the combined assets, liabilities and results of operations of the Company and the affiliates whose securities were pledged as collateral for the High Trail Notes are not materially different than the corresponding amounts presented in our consolidated financial statements, summarized financial information of affiliates whose securities were pledged as collateral for the High Trail Notes is not required to be presented under Rule 13-02.
For a list of subsidiaries whose securities collateralize the Notes, see Exhibit 22 to this Annual Report.
For a list of subsidiaries whose securities collateralize the High Trail Notes, see Exhibit 22 to this Annual Report.
Financial Information about Affiliates Whose Securities Collateralize a Registrant’s Securities and Consolidated Subsidiaries 80 Table of Contents The Notes are secured by a first-priority lien, subject only to certain permitted liens, on substantially all of our and our subsidiaries’ (other than certain foreign subsidiaries) tangible and intangible assets, whether now owned or hereafter acquired (other than certain excluded property).
Financial Information about Affiliates Whose Securities Collateralize a Registrant’s Securities and Consolidated Subsidiaries 84 Table of Contents The High Trail Notes were secured by a first-priority lien, subject only to certain permitted liens, on substantially all of our and our subsidiaries’ (other than certain foreign subsidiaries) tangible and intangible assets, whether now owned or hereafter acquired (other than certain excluded property).
We expect to continue to incur significant expenses and operating losses as we: • expand our sales and marketing efforts to further commercialize our products; • continue research and development efforts to improve our existing products; • enter into collaboration arrangements, if any; • add operational, financial and management information systems; and • incur increased costs as a result of operating as a public company.
We expect to continue to incur significant expenses and operating losses as we: • continue our sales and marketing efforts to maintain sales of our existing products; • continue research and development efforts to improve our existing products; • enter into collaboration arrangements, if any; • maintain operational, financial and management information systems; and • incur increased costs as a result of operating as a public company.
Rule 13-02 of Regulation S-X requires the presentation of summarized financial information of the combined affiliates whose securities are pledged as collateral for the Notes unless such information is not material.
Rule 13-02 of Regulation S-X requires the presentation of summarized financial information of the combined affiliates whose securities were pledged as collateral for the High Trail Notes unless such information is not material.
Convertible Notes Payable As described further in Note 2, (Summary of Significant Accounting Policies) to our consolidated financial statements in this Annual Report, the Company elected to account for the convertible notes payable issued using the fair value option under ASC 825-10.
Convertible High Trail Notes and Debentures Payable As described further in Note 2 (Summary of Significant Accounting Policies) to our consolidated financial statements included elsewhere in this Annual Report, the Company elected to account for the convertible High Trail Notes and Debentures payable issued using the fair value option under ASC 825-10.
During the twelve months ended December 31, 2023, we did not experience material increases in our supply chain costs, but we may experience such increases in future fiscal periods. We expect our costs to remain high for the foreseeable future.
During the year ended December 31, 2024, we did not experience material increases in our supply chain costs, but we may experience such increases in future fiscal periods. We expect our costs to remain high for the foreseeable future.
Accordingly, based on recurring losses from operations incurred since inception, the expectation of continued operating losses, and the need to raise additional capital to finance our future operations, we determined that there is substantial doubt about our ability to continue as a going concern within 12 months of this Annual Report.
Accordingly, based on recurring losses from operations incurred since inception, the expectation of continued operating losses, and the need to raise additional capital to finance our future operations, we determined that there is substantial doubt about our ability to continue as a going concern within 12 months after the date that the financial statements included in this Annual Report are issued.
In addition, our estimate as to the sufficiency of our current cash and cash equivalents and available for sale securities, and our current operating plan as discussed above are based on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we currently anticipate.
In addition, our estimate as to the sufficiency of our current cash, cash equivalents and short-term investments and our current operating plan as discussed above are based on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we currently anticipate.
The Notes are our senior secured obligations, rank pari passu with the up to $25.0 million of additional notes that may be issued pursuant to the securities purchase agreement, senior in right of payment to all of our indebtedness that is expressly subordinated to the Notes in right of payment, effectively senior to all of our unsecured indebtedness to the extent of the collateral securing the Notes, effectively junior to all of our indebtedness secured by permitted liens, to the extent of the value of the assets subject to such permitted liens and to the extent such permitted liens have lien priority by contract or law and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries that are not party to the security documents.
The High Trail Notes were our senior secured obligations, ranked pari passu with the up to $25.0 million of additional notes that have been issued pursuant to the securities purchase agreement, were senior in right of payment to all of our indebtedness that was expressly subordinated to the High Trail Notes in right of payment, effectively senior to all of our unsecured indebtedness to the extent of the collateral securing the High Trail Notes, effectively junior to all of our indebtedness secured by permitted liens, to the extent of the value of the assets subject to such permitted liens and to the extent such permitted liens had lien priority by contract or law and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries that were not party to the security documents.
We do not believe there is any trading market for any of our subsidiaries whose securities are pledged as collateral for the Notes. See Note 9 (High Trail Agreement) to our consolidated financial statements for further details about the terms, conditions and other factors that may affect payments to holders and the collateral arrangements of the Notes.
We do not believe there is any trading market for any of our subsidiaries whose securities were pledged as collateral for the High Trail Notes. See Note 9 (Debt) to our consolidated financial statements for further details about the terms, conditions and other factors and the collateral arrangements of the High Trail Notes.
Net cash provided by investing activities was $24.2 million during the year ended December 31, 2023, compared to $82.8 million provided by investing activities during the year ended December 31, 2022.
Net cash provided by investing activities was $73.8 million during the year ended December 31, 2024, as compared to $24.2 million provided by investing activities during the year ended December 31, 2023.
Additionally, we estimate the number of pharmaceutical and biotech companies that are engaged in research and development of various cell therapies that rely on methods, including cytogenetics, for QC of the cell modification and manufacturing process to be approximately 1,400.
We estimate that these labs analyze approximately 10.0 million samples per year. Additionally, we estimate the number of pharmaceutical and biotech companies that are engaged in research and development of various cell therapies that rely on methods, including cytogenetics, for QC of the cell modification and manufacturing process to be approximately 1,400.
Net cash used in operating activities was $125.2 million during the year ended December 31, 2023 as compared to $124.8 million during the year ended December 31, 2022.
Net cash used in operating activities was $68.9 million during the year ended December 31, 2024, as compared to $125.2 million during the year ended December 31, 2023.
Future Capital Requirements We expect that our near and longer-term liquidity requirements will consist of working capital and general corporate expenses associated with the growth of our business, including, without limitation, expenses associated with increasing our manufacturing capacity, sales and marketing expense, increasing market awareness of our products and services to target customers, instrument placements with customers via the reagent rental sales strategy, research and development expenses associated with expanding our offerings, and expenses associated with being a public company.
Future Capital Requirements We expect that our near and longer-term liquidity requirements will consist of working capital and general corporate expenses associated with the growth of our business, including, without limitation, expenses associated with scaling up our operations and continuing to increase our manufacturing capacity, sales and marketing expense, increasing market awareness of our products and services to target customers, instrument placements with customers via the reagent rental sales strategy, additional research and development expenses associated with expanding and proving the utility of our offerings, expenses associated with continuing to build out our corporate infrastructure, enhancements to information technology, restructuring and advisory fees, and expenses associated with being a public company.
Through our BioDiscovery business, we offer an industry-leading, platform-agnostic software solution, which integrates next-generation sequencing and microarray data designed to provide analysis, visualization, interpretation and reporting of copy number variants, single-nucleotide variants and absence of heterozygosity across the genome in one consolidated view. Through our Purigen business, we offer nucleic acid extraction and purification solutions using proprietary ITP technology.
We offer a platform-agnostic software solution, which integrates next-generation sequencing, microarray and OGM data designed to provide analysis, visualization, interpretation and reporting of copy number variants, single-nucleotide variants and absence of heterozygosity across the genome in one consolidated view. The Company also offers nucleic acid extraction and purification solutions using proprietary isotachophoresis (“ITP”) technology.
Years Ended December 31, 2023 2022 $ % $ % Americas $ 18,020,000 50 % $ 13,862,000 50 % EMEA 12,963,000 36 % 8,960,000 32 % Asia Pacific 5,133,000 14 % 4,980,000 18 % Total $ 36,116,000 100 % $ 27,802,000 100 % Cost of Revenue Cost of product revenue for our systems and consumables includes raw material parts costs and associated freight, shipping and handling costs, contract manufacturing costs, salaries and other personnel costs, equipment depreciation, overhead and other direct costs related to those sales recognized as product revenue in the period.
Years Ended December 31, 2024 2023 $ % $ % Americas $ 13,649,000 44.3 % $ 18,020,000 49.9 % EMEA 14,234,000 46.3 % 12,963,000 35.9 % Asia Pacific 2,893,000 9.4 % 5,133,000 14.2 % Total $ 30,776,000 100 % $ 36,116,000 100 % Cost of Revenue Cost of product revenue for our systems and consumables includes raw material parts costs and associated freight, shipping and handling costs, contract manufacturing costs, salaries and other personnel costs, equipment depreciation, overhead and other direct costs related to those sales recognized as product revenue in the period.
We have made substantial investments in research and development since our inception, and plan to continue to make investments in the future. Our research and development efforts have focused primarily on the tasks required to support development and commercialization of new and existing products.
We have made substantial investments in research and development since our inception, and plan to continue to make investments in the future. Our research and development efforts have focused primarily on the tasks required to support development and commercialization of existing products. We believe that our continued investment in research and development is essential to our long-term competitive position.
We closely monitor and comply with various applicable guidelines and legal requirements in the jurisdictions in which we operate. In the past, we have experienced supply chain challenges, attributable to such adverse geopolitical and macroeconomic developments including increased costs to secure certain component parts in our products and to produce our products at our contract manufacturers.
In the past, we have experienced supply chain challenges, attributable to such adverse geopolitical and macroeconomic developments including increased costs to secure certain component parts in our products and to produce our products at our contract manufacturers.
We incurred net losses of $232.5 million and $132.6 million, and used $125.2 million and $124.8 million of cash from our operating activities for the years ended December 31, 2023 and 2022, respectively.
We incurred net losses of $112.0 million and $232.5 million, and used $68.9 million and $125.2 million of cash from our operating activities for the years ended December 31, 2024 and 2023, respectively.
Contingent Consideration As part of the merger agreement related to the acquisition of BioDiscovery, we agreed to pay a milestone payment of $10.0 million in cash contingent on the achievement of a commercial milestone within eighteen months of the acquisition date.
On February 4, 2025, the Company provided notice of its termination, effective February 14, 2025, of the Cowen ATM. Contingent Consideration As part of the merger agreement related to the acquisition of BioDiscovery, we agreed to pay a milestone payment of $10.0 million in cash contingent on the achievement of a commercial milestone within eighteen months of the acquisition date.
The increase is attributed to an increase in sales of our VIA software. Service and other revenue increased $2.0 million, or 27%, to $9.4 million for the year ended December 31, 2023 as compared to $7.4 million for the year ended December 31, 2022.
Software revenue increased $0.6 million, or 11%, to $6.2 million for the year ended December 31, 2024, as compared to $5.6 million for the year ended December 31, 2023. The increase is attributed to an increase in sales of our VIA™ software.
As a result, our business and 73 Table of Contents results of operations may be adversely affected by the ongoing conflict between Ukraine and Russia and related sanctions, particularly to the extent it escalates to involve additional countries, further economic sanctions or wider military conflict.
As a result, our business and results of operations may be adversely affected by the ongoing conflict between Ukraine and Russia and related sanctions, particularly to the extent it escalates to involve additional countries, further economic sanctions or wider military conflict. We closely monitor and comply with various applicable guidelines and legal requirements in the jurisdictions in which we operate.
Other revenue consists of warranty and other service-based revenue, including support, repair and maintenance services. 74 Table of Contents The following table presents our revenue for the periods indicated: Years Ended December 31, 2023 2022 Product revenue $ 26,727,000 $ 20,425,000 Service and other revenue 9,389,000 7,377,000 Total $ 36,116,000 $ 27,802,000 The following table reflects total revenue by geography and as a percentage of total revenue, based on the billing address of our customers.
The following table presents our revenue for the periods indicated: Years Ended December 31, 2024 2023 Product revenue $ 27,008,000 $ 26,727,000 Service and other revenue 3,768,000 9,389,000 Total $ 30,776,000 $ 36,116,000 The following table reflects total revenue by geography and as a percentage of total revenue, based on the billing address of our customers.
We expect to see OGM adoption in cytogenomics, discovery research and cell bioprocessing quality control (QC). Within cytogenetics and molecular pathology, we estimate the number of cytogenetic labs on a worldwide basis (excluding India and developing countries) to be approximately 10,000. We estimate that these labs analyze approximately 10.0 million samples per year.
Through our Bionano Laboratories business, we also provide OGM-based diagnostic testing services. We expect to see OGM adoption in cytogenomics, discovery research and cell bioprocessing quality control (“QC”). Within cytogenetics and molecular pathology, we estimate the number of cytogenetic labs on a worldwide basis (excluding India and developing countries) to be approximately 10,000.
We have incurred losses in each year since our inception. Our net losses were $232.5 million and $132.6 million for the years ended December 31, 2023, and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $581.2 million.
Our net losses were $112.0 million and $232.5 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $693.2 million.
Service and other gross profit increased by $1.8 million, or 119%, to $3.3 million for the year ended December 31, 2023, compared to $1.5 million for the year ended December 31, 2022. The increase in gross profit was primarily due to increased sales of our Bionano Laboratories service offerings.
Service and other gross profit decreased by $1.4 million, or 44%, to $1.8 million for the year ended December 31, 2024, compared to $3.3 million for the year ended December 31, 2023. T he decrease in service and other gross profit was primarily due to discontinuing sales of certain clinical service offerings from Bionano Laboratories effective March 2024.
Instrument revenue increased $1.4 million, or 17%, to $10.0 million for the year ended December 31, 2023, as compared to $8.6 million for the year ended December 31, 2022, due to an increase in OGM and Ionic instruments sold.
Instrument revenue decreased $2.0 million, or 20%, to $8.0 million for the year ended December 31, 2024, as compared to $10.0 million for the year ended December 31, 2023, due to a decrease in the number of OGM and Ionic® instruments sold.
We plan to raise additional capital to fulfill our operating and capital requirements for at least 12 months through equity or debt financings, however, we may not be able to secure such financing in a timely manner or on favorable terms, if it all.
We expect to seek to raise additional capital to fulfill our operating and capital requirements for at least 12 months through equity or debt financings, however, we may not be able to secure such financing in a timely manner or on favorable terms, if it all, and if we are unable to raise sufficient additional capital in the very near term, we may need to further curtail or cease operations and seek protection by filing a voluntary petition for relief under the United States Bankruptcy Code.
See Note 1 (Organization and Operations) to our consolidated financial statements included elsewhere in this Annual Report for more information. 79 Table of Contents Cash Flows We derive cash flows from operations primarily from the sale of our products and services.
See Note 1 (Organization and Operations) to our consolidated financial statements included elsewhere in this Annual Report for more information.
Financing Activities 2023 Compared to 2022 Net cash provided by financing activities was $113.8 million during the year ended December 31, 2023 as compared to $23.0 million during the year ended December 31, 2022, an increase of $90.8 million.
Financing Activities 2024 Compared to 2023 Net cash used in financing activities was $13.7 million during the year ended December 31, 2024, as compared to net cash provided by financing activities of $113.8 million during the year ended December 31, 2023, a decrease of $127.5 million.
The decrease in cash is offset by the sales and maturity of available-for-sale securities of $137.0 million as of December 31, 2023, compared to the sales and maturity of available-for-sale securities of $200.9 million as of December 31, 2022.
This increase in cash provided by investment activities of $49.7 million is attributed to an increase in the sales and maturity of available-for-sale securities of $307.0 million as of December 31, 2024, as compared to the sales and maturity of available-for-sale securities of $137.0 million as of December 31, 2023.
Sources of Liquidity and Capital Resources In the years ended December 31, 2023 and 2022, we have generated cash flows from sales of common stock, other equity instruments and the issuance of convertible notes payable.
As of December 31, 2024, we had an accumulated deficit of $693.2 million, cash and cash equivalents of $9.2 million, $0.3 million in short-term investments and $11.4 million in restricted cash and cash equivalents and restricted short-term investments. 79 Table of Contents Sources of Liquidity and Capital Resources In the years ended December 31, 2024 and 2023, we have generated cash flows from sales of common stock, other equity instruments and the issuance of convertible notes and debentures payable.
Cost of Revenue, Gross Profit, and Gross Margin Years Ended December 31, Period-to-Period Change 2023 2022 $ % Gross profit (loss): Product $ 6,312,000 $ 4,459,000 $ 1,853,000 42% Service and other 3,254,000 1,486,000 1,768,000 119% Total gross profit $ 9,566,000 $ 5,945,000 $ 3,621,000 61% Gross margin: Product 24 % 22 % Service and other 35 % 20 % Total gross margin 26 % 21 % Cost of product revenue increased by $4.4 million, or 28%, to $20.4 million for the year ended December 31, 2023, compared to $16.0 million for the year ended December 31, 2022.
Cost of Revenue, Gross Profit, and Gross Margin Years Ended December 31, Period-to-Period Change 2024 2023 $ % Cost of revenue: Cost of product revenue 28,449,000 20,415,000 8,034,000 39% Cost of service and other revenue 1,947,000 6,135,000 (4,188,000) (68)% Total cost of revenue 30,396,000 26,550,000 3,846,000 14% Gross profit (loss): Product $ (1,441,000) $ 6,312,000 $ (7,753,000) (123)% Service and other 1,821,000 3,254,000 (1,433,000) (44)% Total gross profit $ 380,000 $ 9,566,000 $ (9,186,000) (96)% Gross margin: Product (5) % 24 % Service and other 48 % 35 % Total gross margin 1 % 26 % Cost of product revenue increased by $8.0 million, or 39%, to $28.4 million for the year ended December 31, 2024, compared to $20.4 million for the year ended December 31, 2023.
The following table sets forth the cash flow from operating, investing and financing activities for the periods presented: Years Ended December 31, 2023 2022 Net cash provided by (used in): Operating activities $ (125,181,000) $ (124,816,000) Investing activities 24,158,000 82,767,000 Financing activities 113,815,000 23,007,000 Operating Activities 2023 Compared to 2022 We derive cash flows from operations primarily from the sale of our products and services.
We do not intend to make further announcements regarding this process unless and until the board of directors approves a specific transaction or otherwise determines that further disclosure is appropriate. 83 Table of Contents Cash Flows The following table sets forth the cash flow from operating, investing and financing activities for the periods presented: Years Ended December 31, 2024 2023 Net cash provided by (used in): Operating activities $ (68,922,000) $ (125,181,000) Investing activities 73,839,000 24,158,000 Financing activities (13,685,000) 113,815,000 Operating Activities 2024 Compared to 2023 We derive cash flows from operations primarily from the sale of our products and services.
We generate service revenue from the sale of diagnostic testing services for those with autism spectrum disorder and other neurodevelopmental disabilities through Bionano Laboratories, as well as services performed related to customer sample evaluations using an OGM system.
Sales of our VIA™ software, which provides customers with solutions for analysis, interpretation and reporting of genomics data, are made on a subscription basis. We generate service revenue from the sale of diagnostic testing services through Bionano Laboratories, as well as services performed related to customer sample evaluations using an OGM system.
Macroeconomic and Geopolitical Developments We are subject to additional risks and uncertainties as a result of adverse geopolitical and macroeconomic developments, such as the ongoing conflict between Ukraine and Russia and related sanctions, the Israel-Hamas war, any effects of global pandemics and uncertain market conditions, including inflation and supply chain disruptions, which could continue to have a material impact on our business and financial results.
We do not intend to make further announcements regarding this process unless and until the board of directors approves a specific transaction or otherwise determines that further disclosure is appropriate. 74 Table of Contents Macroeconomic and Geopolitical Developments We are subject to additional risks and uncertainties as a result of adverse geopolitical and macroeconomic developments, such as recent and potential future bank failures, the ongoing conflicts between Ukraine and Russia and in the Middle East, related sanctions, and any effects of global pandemics and uncertain market conditions, including inflation and supply chain disruptions, which, have not had a material impact on our business and financial results to date, but could result in a material impact to our business or financial results in the future.
For the year ended December 31, 2023, our installed base grew to 326 OGM systems compared to the 240 OGM systems for the year ended December 31, 2022.
For the year ended December 31, 2024, our installed base grew to 371 OGM systems compared to the 326 OGM systems for the year ended December 31, 2023, which only represented a 14% increase year-over-year as compared to a 36% year-over-year increase in the prior year.
While our significant accounting policies are more fully described in Note 2, (Summary of Significant Accounting Policies) to our consolidated financial statements in this Annual Report, the significant accounting estimates that we believe are important to aid in fully understanding and evaluating our reported financial results include the following: Stock-Based Compensation Expense We recognize compensation expense for employees based on an estimated grant date fair value using the Black-Scholes option-pricing method.
While our significant accounting policies are more fully described in Note 2 (Summary of Significant Accounting Policies) to our consolidated financial statements included elsewhere in this Annual Report, the significant accounting estimates that we believe are important to aid in fully understanding and evaluating our reported financial results include the following: Valuation of Long-Lived Assets (including Finite-Lived Intangible Assets) Long-lived assets are reviewed for impairment if indicators of potential impairment exist.
Recent Developments On March 5, 2024, we announced a cost savings plan that aims to reduce annual savings of operating expenses of approximately $35.0 to $40.0 million starting in the second half of 2024.
Recent Developments In March 2024 and September 2024, we announced restructuring plans that aimed to reduce annualized operating expenses by approximately $35.0 to $40.0 million starting in the second half of 2024, and by an additional $25.0 million to $30.0 million beginning in the fourth quarter of 2024.
Based on 78 Table of Contents our current business plans, we believe such net proceeds together with our existing cash and cash equivalents and short-term investments, will be sufficient to fund our operating expenses and capital expenditure requirements into at least the third quarter of 2024.
Based on the Company’s current business plans we believe we will be able to fund our operating expenses and capital expenditure requirements into the first quarter of 2026.
We had $17.9 million in cash and cash equivalents, $48.8 million short-term investments, and $35.5 million in restricted cash and cash equivalents and restricted short-term investments as of December 31, 2023.
Capital Resources As of December 31, 2024, we had approximately $9.2 million in cash and cash equivalents, $0.3 million in short-term investments, $11.4 million in restricted cash and cash equivalents and restricted short-term investments, and working capital of $2.1 million.
Selling, General and Administrative Expenses Selling, general and administrative expenses increased $4.9 million, or 6%, to $93.5 million for the year ended December 31, 2023 as compared to $88.6 million for the same period in 2022. The increase was primarily due to a $4.6 million increase in headcount-related expenses.
Selling, General and Administrative Expenses Selling, general and administrative (“SG&A”) expenses decreased $40.9 million, or 44%, to $51.9 million for the year ended December 31, 2024, as compared to $92.8 million for the same period in 2023.
The increase in cost of product revenue was primarily due to higher sales of instruments and consumables. Cost of service and other revenue increased $0.2 million, or 4%, to $6.1 million for the year ended December 31, 2023, compared to $5.9 million for the year ended December 31, 2022.
Underperforming assets that were subject to impairment are included in the install base. Cost of service and other revenue decreased $4.2 million, or 68%, to $1.9 million for the year ended December 31, 2024, compared to $6.1 million for the year ended December 31, 2023.
For the year ended December 31, 2023, total flowcells sold reached 26,444, an increase of approximately 72% from the 15,375 flowcells sold during the year ended December 31, 2022. Software revenue increased $0.4 million, or 9%, to $5.6 million for the year ended December 31, 2023, as compared to $5.1 million for the year ended December 31, 2022.
The increase in consumable revenue is in-line with the increase in flowcells sold. For the year ended December 31, 2024, total flowcells sold reached 30,307, an increase of approximately 15% from the 26,444 flowcells sold during the year ended December 31, 2023.
Product gross profit increased $1.9 million, or 42%, to $6.3 million for the year ended December 31, 2023, compared to $4.5 million for the year ended December 31, 2022. The increase in gross profit was primarily due to higher sales of instruments and consumables.
Product gross profit decreased $7.8 million, or 123%, to $(1.4) million for the year ended December 31, 2024, compared to $6.3 million for the year ended December 31, 2023.
See Note 11, Commitments and Contingencies to our consolidated financial statements included in this Annual Report. Purchase obligations primarily represent commitments for purchases of inventory from our supplier as disclosed in Note 11, Commitments and Contingencies to our consolidated financial statements included in this Annual Report.
Finance lease obligations relate to our BioDiscovery office in El Segundo, California. See Note 11 (Commitments and Contingencies) to our consolidated financial statements included elsewhere in this Annual Report.
This decrease in cash provided by investment activities of $58.6 million is attributed to an increase in purchases of available-for-sale securities of $111.3 million as of December 31, 2023, compared to purchases of available-for-sale securities of $84.2 million as of December 31, 2022, in addition to the acquisition of Purigen, net of cash acquired of $31.3 million that occurred during the year ended December 31, 2022 only.
The increase in cash is offset by an increase in the purchases of available-for-sale securities of $233.0 million as of December 31, 2024, as compared to purchases of available-for-sale securities of $111.3 million as of December 31, 2023.
Our existing cash and cash equivalents and short-term investments, will not be sufficient for us to achieve cash-flow break even and we expect to need to seek additional capital based on strategic consideration alternatives in the future. As of December 31, 2023, we had $69.8 million of Notes at fair value, which is classified as current.
This estimate assumes the inclusion of the amount equal to the outstanding principal amount of the Debentures. Our existing cash and cash equivalents and short-term investments, will not be sufficient for us to achieve cash-flow break even and we expect to need to seek additional capital.
Income tax benefit (expense) Income tax expense decreased by $1.8 million, or 97%, to a $0.1 million expense for the year ended December 31, 2023, as compared to a $1.9 million expense for the same period in 2022, driven by the acquisition of BioDiscovery.
Interest Income Interest income decreased by $1.2 million, or 37%, to $2.1 million for the year ended December 31, 2024, as compared to $3.3 million for the same period in 2023 resulting from a reduction in investments offset by higher return s.
Our total short-term investments balance was $48.8 million as of December 31, 2023.
Our total short-term investments balance was $0.3 million as of December 31, 2024, as compared to $48.8 million for the same period in 2023. Other expenses Other expense was $10.1 million for the year ended December 31, 2024 compared to $20.5 million for the same period in 2023.
As of December 31, 2023, we had an accumulated deficit of $581.2 million, cash and cash equivalents of $17.9 million, $48.8 million in short-term investments and $35.5 million in restricted cash and cash equivalents and restricted short-term investments.
We expect such expenditures to continue throughout 2025. We had $9.2 million in cash and cash equivalents, $0.3 million short-term investments, and $11.4 million in restricted cash and cash equivalents and restricted short-term investments as of December 31, 2024.
We anticipate that our cash used in operating activities will decrease over the next 12 to 24 months; however, we may observe fluctuations in the cash used in operating activities on an annual basis to sustain the expansion of our commercial offerings.
Our recent restructuring activities are anticipated to reduce the cash used in operating activities over the next 12 months; however, our financial condition may result in certain additional restructuring or advisory expenses which may result in our corporate expenditures increasing, potentially materially, and we may observe fluctuations in the cash used in operating activities on a quarterly basis to sustain our current commercial offerings.
We anticipate that our research and development expenses will decrease in 2024 as a result of our cost savings initiatives announced in May 2023 and October 2023.
We anticipate that SG&A expenses will continue to decrease throughout 2025 as a result of our cost saving initiatives announced in March and September 2024. Goodwill impairment Goodwill of $77.3 million was fully impaired during the year ended December 31, 2023.
The increase in cash used in operating activities of $0.4 million is primarily attributed to an increase in our net loss in the current year offset by a decrease in our working capital usage due to higher inventory purchases in the prior year.
The decrease in cash used in operating activities of $56.3 million was primarily attributed to a decrease in our net loss and a decrease in our working capital usage as a result of our cost saving initiatives that were initiated in March and September of 2024.
See Note 9 (High Trail Agreement) to our consolidated financial statements.
See Note 9 (Debt) to our consolidated financial statements included elsewhere in this Annual Report for further information.
In addition, Bionano Laboratories will phase out over time the offering of certain testing services related to neurodevelopmental disorders, including autism spectrum disorders and other disorders of childhood development. These cost-saving measures are incremental to the cost saving initiatives previously announced in May 2023 and October 2023.
As part of the plans, we reduced our overall headcount by approximately 120 and 83 employees, respectively. In addition, we have phased out the offerings of Bionano Laboratories for certain testing services related to neurodevelopmental disorders, including autism spectrum disorders and other disorders of childhood development.
Consumables revenue increased $4.4 million, or 66%, to $11.2 million for the year ended December 31, 2023, as compared to $6.7 million for the year ended December 31, 2022.
(Stockholders’ Equity and Stock-Based Compensation) as compared to $57.7 million during the year ended December 31, 2023.
As described further in Note 2, (Summary of Significant Accounting Policies) to our consolidated financial statements in this Annual Report, we performed qualitative goodwill impairment tests as of September 30, 2023 and concluded that it is more likely than not that the fair value of the reporting unit is less than its carrying value.
Refer to Note 2 (Summary of Significant Accounting Policies) to our consolidated financial statements included elsewhere in this Annual Report, for further information on the impairment losses we recorded to our long-lived assets and intangible assets as of December 31, 2024.
Research and Development Expenses Research and development expenses increased by $5.0 million, or 10%, to $54.0 million for the year ended December 31, 2023 as compared to $49.0 million for the same period in 2022. The increase was primarily due to a $6.8 million increase in headcount-related expenses.
We expect service and other gross profit to decline in 2025 relative to 2024 as these service offerings have been fully phased out as of December 31, 2024. 78 Table of Contents Research and Development Expenses Research and development (“R&D”) expenses decreased by $29.2 million, or 54%, to $24.8 million for the year ended December 31, 2024, as compared to $54.0 million for the same period in 2023.
At this time, we are unable to make a good faith determination of the cost estimates, or ranges of cost estimates, associated with implementation of the plan, including the reduction in force. Financial Overview Revenue We generate product revenue from sales of our OGM and Ionic ® Purification systems and consumables, which includes our instruments, and our VIA software.
As part of the plans we have also made a change in our business strategy and refocused our efforts on the current installed base of OGM systems with less emphasis on new placements of OGM systems and more emphasis on ensuring customers are able to maximize their utilization of the OGM systems. 75 Table of Contents Financial Overview Revenue We generate product revenue from sales of our OGM and Ionic ® Purification systems and consumables, which includes our instruments, and our VIA™ software.
As of December 31, 2023, we received net proceeds of approximately $75.2 million, after deducting placement agent fees and offering expenses from the issuance and sale of our securities pursuant to the Purchase Agreement in October 2023.
On October 13, 2023, we completed a registered offering (the “October 2023 Registered Offering”) of senior secured convertible notes payable due 2025 (the “High Trail Registered Notes”) and warrants (the “Registered Warrants”) and a concurrent private placement (the “October 2023 Private Placement” and together with the October 2023 Registered Offering, the “October 2023 Offering”) of senior secured convertible notes payable due 2025 (the “High Trail Private Placement Notes” and, together with the High Trail Registered Notes, the “High Trail Notes”) and warrants (the “Private Placement Warrants” and, together with the Registered Warrants, the “Warrants”) and received net proceeds from the sale of the High Trail Notes and the Registered Warrants of approximately $75.2 million, after deducting the offering expenses and placement agent fees.
The increases are being offset by decreases of $1.9 million in materials and supplies, $1.5 million in facilities costs, and $0.9 million in legal expenses. We anticipate that our SG&A expenses will decrease in 2024 in part due to the cost savings initiatives announced in May 2023 and October 2023.
Lastly, we reduced information technology and rent and facility costs by $0.8 million, and we reduced our internal consumption of inventory, materials and supplies by $4.2 million. We anticipate that R&D expenses will continue to decrease throughout 2025 as a result of our cost saving initiatives announced in March and September 2024.
Removed
Through our Bionano Laboratories business, we also provide diagnostic testing for patients with clinical presentations consistent with autism spectrum disorder and other neurodevelopmental disabilities.
Added
All dollar amounts and share counts presented below have been rounded to the nearest thousand and, thus are approximate.
Removed
As part of the plan, we expect to reduce our overall headcount by approximately 110 to 125 employees, which represents approximately 34% to 39% of our full-time employees as of the date of this Annual Report.
Added
Additionally, we believe the market for our platform-agnostic software solution, which can be used in next-generation sequencing and microarray data analysis, includes the clinical NGS market estimated to be $3.4 billion in 2024 and growing at a 20% compound annual growth rate. We have incurred losses in each year since our inception.
Removed
Sales of our VIA software, which provides customers with solutions for analysis, interpretation and reporting of genomics data, are made on a subscription basis.
Added
We will continue to seek to raise additional capital, but without sufficient additional financing in the near term we will not be able to continue as a going concern.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe risk-free interest rate used to estimate our weighted average cost of capital is a component of the discount rate used to calculate the present value of future cash flows due upon the achievement of certain milestones for the contingent consideration or upon maturity of the convertible notes payable and purchase option liability As a result, any changes in the underlying risk-free interest rate could result in material changes to the fair value of such liabilities and could materially impact the amount of non-cash expense (or income) recorded each reporting period.
Biggest changeThe risk-free interest rate used to estimate our weighted average cost of capital is a component of the discount rate used to calculate the present value of future cash flows due upon the achievement of certain milestones for the contingent consideration or upon maturity of the convertible High Trail Notes and Debentures payable and Purchase Option liability.
Federal Reserve raising interest rates, the underlying risk-free interest rate we use for purposes of calculating fair value of our liabilities for acquisition-related contingent consideration, convertible notes payable and purchase option liability has increased from our prior reporting periods, but such increase did not have a material impact on our financial statements, and we currently do not expect anticipated future changes to have a material effect in future reporting periods.
Federal Reserve raising interest rates, the underlying risk-free interest rate we use for purposes of calculating fair value of our liabilities for acquisition-related contingent consideration, convertible High Trail Notes and Debentures payable and Purchase Option liability has increased from our prior reporting periods, but such increase did not have a material impact on our financial statements, and we currently do not expect anticipated future changes to have a material effect in future reporting periods.
The primary objective of our investment activities is to preserve principal while at the same time maximizing 83 Table of Contents yields without significantly increasing risk. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.
The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.
We believe a hypothetical 10% change in foreign exchange rates as of December 31, 2023 would not have a material impact on our business, financial condition, or results of operations.
We believe a hypothetical 10% change in foreign exchange rates as of December 31, 2024 would not have a material impact on our business, financial condition, or results of operations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of business. These risks primarily relate to interest rates, foreign currency exchange rates and inflation.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 86 Table of Contents We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of business. These risks primarily relate to interest rates, foreign currency exchange rates and inflation.
As of December 31, 2023 and December 31, 2022, we had minimal assets and liabilities denominated in foreign currencies and expect similar levels of foreign currency denomination in the next 12 months.
As of December 31, 2024 and December 31, 2023, we had minimal assets and liabilities denominated in foreign currencies and expect similar levels of foreign currency denomination in the next 12 months.
Our liabilities for acquisition-related contingent consideration, convertible notes payable and purchase option liability are adjusted to fair value each reporting period, are also impacted by changes in interest rates.
Our liabilities for acquisition-related contingent consideration, convertible High Trail Notes and Debentures payable and Purchase Option liability are adjusted to fair value each reporting period, are also impacted by changes in interest rates.
Although we are seeing, and expect to continue to see, increased interest rates, due to our investment in highly liquid and high quality government and other debt securities as well as short-term securities, as of the date of this Annual Report, we do not expect anticipated changes in interest rates to have a material effect on our interest rate risk in future reporting periods.
Although we have seen increased interest rates, due to our investment in highly liquid and high-quality government and other debt securities as well as short-term securities, as of the date of this Annual Report, we do not expect anticipated changes in interest rates to have a material effect on our interest rate risk in future reporting periods.
However the Company does not believe that inflation has had a material effect on our business, financial condition or results of operations, other than its impact on the general economy, as our cost of revenue as of December 31, 2023 was not significantly impacted by the cost increases we experienced.
However the Company does not believe that inflation has had a material effect on our business, financial condition or results of operations, other than its impact on the general economy, as our cost of revenue as of December 31, 2024 was not significantly impacted by the cost increases 87 Table of Contents we experienced.
Due to the short holding period of our investments and the nature of our investments, a hypothetical change of 100 basis points would have approximately a $0.1 million impact on our investments income or expense.
Due to the short holding period of our investments and the nature of our investments, a hypothetical change of 100 basis points would not have a material impact on our investments income or expense.
Inflation Geopolitical and macroeconomic events, including the ongoing conflict between Ukraine and Russia and related sanctions, the Israel-Hamas war, and the recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures have contributed to supply chain challenges, which the Company believes have resulted in inflation headwinds, particularly increased logistical costs and raw material prices.
Inflation Geopolitical and macroeconomic events, including the conflicts between Ukraine and Russia and related sanctions, conflicts in the Middle East, the recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures have contributed to supply chain challenges, which we believe have resulted in inflation headwinds, particularly increased logistical costs and raw material prices.
Interest Rate Risk We had approximately $17.9 million in cash and cash equivalents,$48.8 million in short-term investments, and $35.5 million in restricted cash and cash equivalents and restricted short-term investments as of December 31, 2023. Our short-term investments include highly liquid, investment grade debt securities. Such interest-bearing instruments are exposed to a certain degree of interest rate risk.
Interest Rate Risk We had approximately $9.2 million in cash and cash equivalents, $0.3 million in short-term investments, and $11.4 million in restricted cash and cash equivalents and restricted short-term investments as of December 31, 2024. Our short-term investments include highly liquid, investment grade debt securities. Such interest-bearing instruments are exposed to a certain degree of interest rate risk.
Added
The amount we are required to hold as restricted cash or restricted investments is equal to the lesser of (a) $11.0 million and (b) the then outstanding principal balance of the Debentures.
Added
As a result, any changes in the underlying risk-free interest rate could result in material changes to the fair value of such liabilities and could materially impact the amount of non-cash expense (or income) recorded each reporting period. As a consequence of the U.S.

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