ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report. All dollar amounts and share counts presented below have been rounded to the nearest thousand and, thus are approximate. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and expected financial results, includes forward-looking statements that involve risks and uncertainties. You should review the section titled “Forward-Looking Statements” and the risks described in Part I, Item 1A Risk Factors and elsewhere in this Annual Report.
Overview
We are a provider of genome analysis solutions that can enable researchers and clinicians to reveal answers to challenging questions in biology and medicine. Our mission is to transform the way the world sees the genome through OGM solutions, diagnostic services and software. We offer OGM solutions for applications across basic, translational and clinical research, and for other applications including bioprocessing. 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. Through our Bionano Laboratories business, we also provide OGM-based diagnostic testing services.
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. Additionally, we estimate that approximately 1,400 pharmaceutical and biotech companies are engaged in research and development of various cell therapies that rely on methods, including cytogenetics. Based on these estimates, we believe the economic potential for OGM in these markets is approximately $10.0 billion annually, $3.0 billion of which we attribute to cell and gene therapy applications. We believe there are additional potential future market opportunities for OGM to streamline workflows, reduce the number of technologies required to deliver results, lower costs, and improve findings in the broader pathology market across multiple subdisciplines including newborn screening, population genomics, and neurological and cardiological risk assessment which are not included in our estimates above. 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 which The Business Research Company has estimated at approximately $4.1 billion in 2025 and predicted would grow to approximately $8.2 billion in 2029, representing a compound annual growth rate of 18.8%.
Recent Highlights
Commercial Adoption of Offerings for OGM Systems
In executing on our commercialization strategy, we expanded the utilization of our OGM systems (our Saphyr system and our Stratys system) and:
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Grew our installed base to 387 as of December 31, 2025, an increase of approximately 4.3% from a total installed base of 371 as of December 31, 2024. Installed base represents the global number of OGM instruments installed at end-customer locations and therefore having the technology to process OGM.
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•
Sold 30,171 flowcells in the year ended December 31, 2025, a decrease of approximately 0.4% from 30,307 flowcells sold in the same period of 2024. The OGM cartridge is the consumable that packages nanochannel arrays for DNA linearization. In its current form, the OGM cartridge can comprise one, two or three flowcells per cartridge. 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.
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 international conflicts, related sanctions, any effects of global pandemics and uncertain market conditions, including inflation and supply chain disruptions, and international trade policies (including trade protection measures, such as tariffs, sanctions and other trade barriers), changes in monetary and fiscal policy, United States political developments and other sources of instability, 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. Additionally, we have experienced a slowdown in our Asia Pacific business, including as a result of headwinds in the region, which negatively impacted our manufacturing partners who are reliant on government funding. While our manufacturing partners in the Asia Pacific region have obtained some approvals from the National Medical Products Administration, and are waiting on more, we do not anticipate that the funding headwinds will change in the near term.
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. During the year ended December 31, 2025, 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. As global economic conditions recover, business activity may not recover as quickly as anticipated, and it is not possible at this time to estimate the long-term impact that these and related events could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted. 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.
Recent Developments
During 2025, the Company operated under an agreement with its instrument contract manufacturer under which it made weekly deposits for future inventory purchases that began in April 2025 and continued through November 21, 2025. Total payments in 2025 were $1.9 million. The payments created a deposit for inventory Bionano purchased above the 2025 minimum order quantity and guaranteed the availability of certain raw materials previously purchased by the contract manufacturer to build instruments. See Note 11 (Commitments and Contingencies - Purchase Commitments) in the accompanying notes to our consolidated financial statements included elsewhere in this Annual Report for additional information.
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. VIA software is our replacement to our NxClinical software. Like NxClinical, VIA has a simple integrated workflow for visualization, interpretation and reporting of NGS and microarray data. VIA
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additionally incorporates OGM data to that workflow creating a standard software tool for use across molecular pathology and cytogenomics applications. We currently sell our systems for research use only applications and our customers are primarily laboratories associated with academic and governmental research institutions, academic and commercial clinical laboratories, as well as pharmaceutical, biotechnology and contract research companies. In addition, we provide instruments to certain customers at no cost under our reagent rental program, and the customers agree to purchase minimum quantities of consumables. Consumable revenue consists of sales of reagents and chips necessary to process a sample. 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. Other revenue consists of warranty and other service-based revenue, including support, repair and maintenance services.
The following table presents our revenue for the periods indicated:
Years Ended December 31,
The following table reflects total revenue by geography and as a percentage of total revenue, based on the billing address of our customers. Americas consists of North America and South America. EMEA consists of Europe, the Middle East and Africa. Asia Pacific includes China, Japan, South Korea, Singapore, India and Australia.
Years Ended December 31,
$ % $ %
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. Cost of service and other revenue consists of third-party laboratory costs to process the diagnostic samples, salaries of our clinical technicians who interpret and deliver the results to patients, warranty services, and other costs of servicing equipment at customer sites.
Research and Development Expenses
Research and development expenses consist of salaries and other personnel costs, stock-based compensation, research supplies, third-party development costs for new products, materials for prototypes, equipment depreciation, and allocated overhead costs that include facility and other overhead costs. We have made substantial investments in research and development since our inception. 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.
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Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of salaries and other personnel costs, amortization expense related to acquired intangibles, and stock-based compensation for our sales and marketing, finance, legal, human resources and general management, as well as professional services, such as legal and accounting services.
Results of Operations
We have incurred losses in each year since our inception. Our net loss was $26.4 million and $112.0 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $719.6 million.
We expect to continue to incur significant expenses and operating losses as we:
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continue our sales and marketing efforts to maintain sales of our existing products;
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continue research and development efforts to improve our existing products;
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enter into collaboration arrangements, if any;
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maintain operational, financial and management information systems; and
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incur increased costs as a result of operating as a public company.
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.
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. If we are unable to continue as a going concern, we may have to reorganize or liquidate our business and may receive less than the value at which those assets are carried on our consolidated financial statements, and investors may lose all or a part of their investment. From time to time, the board of directors maintains a strategy committee to work with the Company and outside advisors in evaluating our options and considering alternatives that we believe will maximize stakeholder value, including any of the following or a combination thereof: debt financing, equity investments, combinations with other companies, or the sale of all or part of the company. There can be no assurances that any transactions will be available to us or completed and if we are not able to raise sufficient additional capital in the very near term to fund our operation, we may seek relief available under applicable insolvency laws. 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.
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Comparison of the Years Ended December 31, 2025 and 2024
The following table sets forth our results of operations for the years ended December 31, 2025 and 2024:
Years Ended December 31, Period-to-Period Change
Revenues:
Cost of revenue:
Other income (expenses):
Revenue
Years Ended December 31, Period-to-Period Change
Total revenue decreased by $2.3 million, or 7%, to $28.5 million for the year ended December 31, 2025, as compared to $30.8 million for the same period in 2024, driven primarily by a decrease in service and other revenue.
Instrument revenue decreased by $1.7 million, or 21%, to $6.4 million for the year ended December 31, 2025, as compared to $8.0 million for the year ended December 31, 2024, due to a decrease in the number of OGM and Ionic® instruments sold. For the year ended December 31, 2025, our installed base grew to 387 OGM systems compared to the 371 OGM systems for the year ended December 31, 2024, which represented a 4% increase year-over-year as compared to a 14% year-over-year increase in the prior year. In September 2024, we announced a change in our business strategy to focus on driving utilization and adoption of OGM from our existing installed base, with less emphasis on new placements of our OGM systems. We expected that this change in strategy would slow the pace of
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our instrument revenue growth when compared to historical growth rates, and we anticipate that the reduced pace will continue into 2026.
Consumables revenue increased by $1.2 million, or 9%, to $14.0 million for the year ended December 31, 2025, as compared to $12.8 million for the year ended December 31, 2024. The increase is primarily driven by an increase in average selling price of flowcells sold, partially offset by certain supply constraints due to manufacturing delays in the fourth quarter of 2025.
Software revenue increased by $0.2 million, or 4%, to $6.4 million for the year ended December 31, 2025, as compared to $6.2 million for the year ended December 31, 2024. The increase is primarily attributed to an increase in the number of VIA software licenses sold.
Service and other revenue decreased by $2.0 million, or 53%, to $1.8 million for the year ended December 31, 2025, as compared to $3.8 million for the year ended December 31, 2024. The decrease was primarily due to the discontinuation of certain clinical service offerings from Bionano Laboratories effective March 2024. These clinical service offerings from Bionano Laboratories contributed $1.7 million in revenue for the year ended December 31, 2024 and were fully phased out. No comparable revenue was recorded in 2025.
Cost of Revenue, Gross Profit, and Gross Margin
Years Ended December 31, Period-to-Period Change
Cost of revenue:
Gross profit (loss):
Gross margin:
Product 46 % (5 )%
Service and other 49 % 48 %
Total gross margin 46 % 1 %
Cost of product revenue decreased by $14.0 million, or 49%, to $14.4 million for the year ended December 31, 2025, compared to $28.4 million for the year ended December 31, 2024. The decrease was primarily attributable to the absence in 2025 of $9.8 million of inventory-related charges recorded in 2024, consisting of $7.2 million for excess and obsolete Saphyr and other instrument spare parts and $2.6 million related to underutilized reagent rentals. The decrease also reflects lower instrument sales, partially offset by higher consumable sales. We expect cost of product revenue to vary with sales volume and product mix.
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Cost of service and other revenue decreased $1.1 million, or 54%, to $0.9 million for the year ended December 31, 2025, compared to $1.9 million for the year ended December 31, 2024. The decrease was primarily due to the discontinuation of certain clinical service offerings from Bionano Laboratories effective March 2024. These services were fully phased out by December 31, 2024 and no comparable costs were incurred in 2025.
Product gross profit increased by $13.8 million, or 955%, to $12.3 million for the year ended December 31, 2025, compared to a gross loss of $(1.4) million for the year ended December 31, 2024. The improvement was primarily driven by the non-recurrence of the 2024 inventory-related charges described above and a higher proportion of consumable and software sales.
Service and other gross profit decreased by $1.0 million, or 52%, to $0.9 million for the year ended December 31, 2025, compared to $1.8 million for the year ended December 31, 2024, primarily reflecting the discontinuation of certain clinical service offerings.
Research and Development (“R&D”) Expenses
R&D expenses decreased by $13.4 million, or 54%, to $11.4 million for the year ended December 31, 2025, as compared to $24.8 million for the same period in 2024. The decrease was primarily due to decreases of $8.7 million in salaries, wages and benefits driven by headcount reductions announced in 2024 and a decrease of $2.2 million in professional and consulting fees, including decreases in costs incurred to support clinical research studies, development of the Stratys system, foundry expenses, and cloud computing. Lastly, in 2025 we reduced internal consumption of inventory, materials and supplies by $1.6 million and we reduced information technology and rent and facility costs by $0.3 million.
Selling, General and Administrative (“SG&A”) Expenses
SG&A expenses decreased by $16.7 million, or 32%, to $35.2 million for the year ended December 31, 2025, as compared to $51.9 million for the same period in 2024. The decrease was primarily due to a $12.6 million decrease in salaries, wages and benefits driven by headcount reductions in 2024; a $8.7 million decrease in professional and consulting fees which is primarily marketing, software, and legal expenses; a $1.3 million decrease in information technology and rent and facility costs; a $1.4 million decrease in depreciation and amortization; a $2.5 million decrease in the losses on disposal of property and equipment recorded; a $0.9 million decrease in travel and entertainment; and a $0.4 million change in the gain on lease modification. These decreases were offset by a $10.9 million gain recorded on the fair value of the contingent consideration due for the Purigen milestones during the same period in 2024 as compared to no gain recorded for the year ended December 31, 2025.
Intangible Assets and Other Long-lived Assets Impairment
The Company recognized no impairment losses on intangible assets and other long-lived assets during the year ended December 31, 2025, as compared to $19.7 million for the same period in 2024. These 2024 losses were due to our restructuring initiatives and change in business strategy announced in 2024. See Note 2 (Summary of Significant Accounting Policies) to our consolidated financial statements included elsewhere in this Annual Report for further discussion on the impairment charges that were recorded during the period.
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Restructuring Costs
The Company had no expenses that were classified as restructuringcosts during the year ended December 31, 2025, as compared to $8.0 million during the same period in 2024. These 2024 restructuring costs were the result of our cost saving initiatives.
Interest Income
Interest income decreased by $1.0 million, or 47%, to $1.1 million for the year ended December 31, 2025, as compared to $2.1 million for the same period in 2024 resulting from a reduction in investments offset by higher returns.
Other Income (Expense)
Other income was $5.9 million for the year ended December 31, 2025, compared to other expense of $10.1 million for the year ended December 31, 2024. The year-over-year change was primarily attributable to the following:
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Financing-related items: In 2024, we recorded $10.9 million of losses related to debt transactions, including a $1.9 million loss on issuance of the JGB Debentures, $1.7 million of related debt issuance costs, and a $7.3 million loss on extinguishment of the JGB Debentures. These losses did not recur in 2025. In addition, 2024 included a $4.0 million net gain on extinguishment of the High Trail Note and Purchase Option.
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Fair value remeasurement: We recognized a $5.9 million increase in net gains from changes in the fair value of the convertible High Trail Notes, Purchase Option, and convertible debentures during 2025 compared to 2024.
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Government credit and other income: Other income increased by $3.1 million in 2025, primarily due to receipt of an Employee Retention Credit refundable tax credit.
See Note 9 (Debt) and Note 4 (Investments and Fair Value Measurements) to the consolidated financial statements included elsewhere in this Annual Report for additional information.
Liquidity and Capital Resources
Since our inception, we have incurred net losses and negative cash flows from operations. We incurred net losses of $26.4 million and $112.0 million, and used $16.3 million and $68.9 million of cash from our operating activities for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $719.6 million, cash and cash equivalents of $3.0 million, $16.3 million in short-term investments and $10.3 million in restricted cash and short-term investments.
Sources of Liquidity and Capital Resources
In the year ended December 31, 2025, we generated cash flows from sales of common stock and other equity instruments. 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) in the accompanying notes to our consolidated financial statements included elsewhere in this Annual Report for a discussion of our recent debt and equity activity.
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On May 24, 2024, we entered into a securities purchase agreement with certain accredited investors (the “Holders”) and JGB Collateral LLC, as collateral agent for the Holders, for the sale by the Company in a private placement (the “JGB Debentures Offering”) of:
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38,000 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), and
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Senior Secured Convertible Debentures in the aggregate principal amount of $20.0 million (the “Debentures”), for an aggregate purchase price of $18.0 million.
The closing of the JGB Debentures Offering occurred on May 24, 2024. In connection with the closing of the JGB Debentures Offering, the Company received net proceeds of approximately $16.3 million, after payment of placement agent fees, and other offering expenses. The Company used the proceeds received to fully redeem the outstanding balance due under the High Trail Note of approximately $17.6 million, as amended (see further discussion below).
On May 23, 2024, in connection with the JGB Debentures Offering, the Company entered into a redemption agreement with High Trail (“High Trail Agreement”). Pursuant to the High Trail Agreement, the Company agreed to redeem the entire outstanding principal amount of $15.3 million under the High Trail Note at a redemption price of 115% for a total redemption payment of $17.6 million (the “Redemption Payment”). Upon High Trail’s receipt of the Redemption Payment on May 24, 2024, the High Trail Note and related Purchase Option to purchase additional High Trail Notes at fair value were cancelled. In addition, the Company agreed to pay High Trail a retirement fee of $2.2 million and to reimburse High Trail for all of its reasonable and documented out-of-pocket expenses incurred with the release and termination of security interests relating to the High Trail Note.
On December 31, 2024, the Company entered into an amendment of the Debentures (the “Amendment”) with the Selling Securityholders. Pursuant to the Amendment, the parties agreed that (i) no amortization payment would be paid in December 2024; (ii) the maximum monthly amortization payments due between January 2025 and July 2025 would be reduced from $1.0 million per month to $0.5 million per month; (iii) the maximum monthly amortization payments due from August 2025 through repayment in full of the principal aggregate amount would be $1.4 million per month; (iv) the conversion price of the Debentures would be reduced from $120.00 to $16.20; and (v) the Debentures will become non-callable by the Company until August 2025. As consideration for the Amendment, the Company issued to the Selling Securityholders approximately 83,000 shares of its common stock (the “Private Placement Shares”).
As of December 31, 2025, the Company reported $10.0 million of Debentures at fair value, which is classified as current on the consolidated balance sheet. Through December 31, 2025, the Company paid $1.4 million in interest and $4.9 million in principal redemption amounts on the Debentures. As of December 31, 2025, the Company may be required to redeem up to $10.3 million of principal and expects to pay an additional $0.5 million in interest on the Debentures in 2026. See Note 9 (Debt) in the accompanying notes to our consolidated financial statements included elsewhere in this Annual Report for further information.
On January 3, 2025, the Company entered into a securities purchase agreement (the “January 2025 Purchase Agreement”) with certain institutional investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering priced at-the-market consistent with the rules of the Nasdaq Stock Market (the “January 2025 Offering”) (i) an aggregate of approximately 382,000 shares of the Company’s common stock, (ii) pre-funded warrants to purchase up to an aggregate of approximately 280,000 shares of common stock (as adjusted for the reverse stock split) (the “January Pre-Funded Warrants”) and (iii) warrants to purchase up to an aggregate of approximately 661,000 shares of common stock (as adjusted for the reverse stock split) (the “January Purchase Warrants”). Each share of common stock and each January Pre-Funded Warrant sold pursuant to the January 2025 Purchase Agreement were accompanied by a January Purchase Warrant. Both the shares of common stock and the accompanying January
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Purchase Warrants, and the January Pre-Funded Warrants and the accompanying January Purchase Warrants were immediately separable and were issued separately.
The combined purchase price of each share of common stock and accompanying January Purchase Warrant was $15.120 per share (as adjusted for the reverse stock split). The combined purchase price of each January Pre-Funded Warrant and accompanying January Purchase Warrant was $15.119 (equal to the combined purchase price per share of common stock and accompanying January Purchase Warrant, minus $0.001) (as adjusted for the reverse stock split). The gross proceeds to the Company from the January 2025 Offering were approximately $10.0 million (excluding up to approximately $10.0 million of aggregate gross proceeds that may be received in the future upon the cash exercise of the January Purchase Warrants which was contingent upon stockholder approval, which was obtained in June 2025), before deducting placement agent fees and other offering expenses payable by the Company. Each January Purchase Warrant is exercisable for one share of common stock at an exercise price of $15.120 per share beginning on the effective date of stockholder approval, or June 11, 2025, of the issuance of the shares of common stock upon exercise of the January Purchase Warrants (the “Stockholder Approval”). The January Purchase Warrants will expire on the five-year anniversary of the Stockholder Approval. The January Pre-Funded Warrants were immediately exercisable and were exercised in full in January 2025.
On September 16, 2025, the Company commenced a best efforts public offering (the “September 2025 Offering”) of an aggregate of (i) 4.925 million shares of its common stock, (ii) pre-funded warrants (the “September Pre-Funded Warrants”) to purchase up to an aggregate of 75,000 shares of common stock, (iii) Series E warrants (the “Series E Warrants”) to purchase up to an aggregate of 5.0 million shares of common stock, and (iv) Series F warrants (the “Series F Warrants,” to purchase up to an aggregate of 5.0 million shares of common stock. Each share of common stock or September Pre-Funded Warrant was sold together with one Series E Warrant to purchase one share of common stock and one Series F Warrant to purchase one share of common stock.
The combined public offering price for each share of common stock and accompanying Series E and Series F Warrant was $2.00, and the combined public offering price for each September Pre-Funded Warrant and accompanying Series E and Series F Warrant was $1.9999. The September Pre-Funded Warrants have an exercise price of $0.0001 per share, are exercisable immediately upon issuance and will expire when exercised in full. 50,000 of the 75,000 September Pre-Funded Warrants were exercised in full at time of closing on September 16, 2025. The remaining 25,000 September Pre-Funded Warrants were exercised in full in November 2025. Each Series E and Series F Warrant have an exercise price of $2.00 per share and is exercisable immediately upon issuance. The Series E warrants will expire on the five-year anniversary of the date of issuance and the Series F warrants will expire on the eighteen-month anniversary of the date of issuance. The gross proceeds to the Company from the September 2025 Offering were approximately $10.0 million (excluding up to approximately $20.0 million of aggregate gross proceeds that may be
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received in the future upon the cash exercise of the Series E and Series F Warrants), before deducting placement agent fees and other offering expenses payable by the Company.
See Note 10 (Stockholder’s Equity and Stock-Based Compensation) in the accompanying notes to our consolidated financial statements included elsewhere in this Annual Report for further information.
Based on our current business plans, we will continue to require additional capital in the very near term to fund our operating expenses and capital expenditure requirements, or 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.If this were to occur, the value available to our various stakeholders, including our creditors and stockholders, is uncertain and trading prices for our securities may bear little or no relationship to the actual recovery, if any, by holders of our securities in bankruptcy proceedings, if any. 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. 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 2027.
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. We expect such expenditures to continue throughout 2026.
As of December 31, 2025, we had $3.0 million in cash and cash equivalents, $16.3 million in short-term investments and $10.3 million in restricted cash and short-term investments. 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. As of December 31, 2025, the Company had $10.3 million of principal outstanding under the Debentures. 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. Accordingly, 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 order to continue to operate our business beyond that time, we will need to raise substantial additional capital. We are actively evaluating debt and equity financing sources available to us as well as cost reduction strategies, but there can be no assurance that financing will be available on terms acceptable to us, on a timely basis, or at all, or that we are able to effectively reduce our operating expenses. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. Any disruptions to, or volatility in, the credit and financial markets or any deterioration in overall economic conditions may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive. If we are unable to raise additional funds through debt or equity financing or other arrangements when needed, we may be required to delay, limit, reduce or terminate our
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research and development activities or future commercialization efforts. Even if we raise additional capital, we may also be required to modify, delay or abandon some of our plans which could have a material adverse effect on our business, operating results and financial condition and our ability to achieve our intended business objectives.
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. See Note 1 (Organization and Operations) in the accompanying notes to our consolidated financial statements included elsewhere in this Annual Report for more information. If we are unable to continue as a going concern, we may have to reorganize or liquidate our business and may receive less than the value at which those assets are carried on our consolidated financial statements, and investors may lose all or a part of their investment. From time to time, the board of directors maintains a strategy committee to work with the Company and outside advisors in evaluating our options and considering alternatives that we believe will maximize stakeholder value, including any of the following or a combination thereof: debt financing, equity investments, combinations with other companies, or the sale of all or part of the company. There can be no assurances that any transactions will be available to us or completed and if we are not able to raise sufficient additional capital in the very near term to fund our operation, we may seek relief available under applicable insolvency laws. 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.
Cash Flows
The following table sets forth the cash flow from operating, investing and financing activities for the periods presented:
Years Ended December 31,
Net cash provided by (used in):
Operating Activities
We derive cash flows from operations primarily from the sale of our products and services. Our cash flows from operating activities are also significantly influenced by our use of cash for operating expenses to support the growth of our business. We have historically experienced negative cash flows from operating activities as we have developed our technology, expanded our business and built our infrastructure, and this may continue in the future. As discussed above, we anticipate our available cash balance will not be sufficient for the next twelve months from the issuance of this report. 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. 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.
Net cash used in operating activities was $16.3 million during the year ended December 31, 2025, as compared to $68.9 million during the same period in 2024. The decrease in cash used in operating activities of $52.6 million was
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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 2024.
Investing Activities
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. During the year ended December 31, 2025, net cash used in investing activities was $12.7 million, as compared to $73.8 million provided by investing activities during the same period in 2024. The decrease in cash provided by investing activities of $86.6 million was primarily attributed to the maturity of $229.1 million in available for sale securities, which was offset by a higher purchase of available for sale securities of $241.9 million during the year ended December 31, 2025, as compared to the maturity of $307.0 million in available for sale securities, which was partially offset by a purchase of $233.0 million of available for sale securities during the same period in 2024.
Financing Activities
Net cash provided by financing activities was $24.0 million during the year ended December 31, 2025, as compared to net cash used in financing activities of $13.7 million during the same period in 2024, an increase of $37.7 million. During the year ended December 31, 2025, the Company made principal payments of $4.9 million towards the JGB convertible debentures, as compared to JGB principal payments, debt extinguishment costs, and retirement fees of $73.1 million towards the High Trail convertible notes payable and purchase option liability during the same period of 2024. These were partially offset by approximately $18.0 million in gross proceeds received from the issuance of the JGB convertible debentures during the year ended December 31, 2024. Lastly we received gross proceeds of $31.1 million from executing sales under our at-the-market facilities with Cowen and Company, LLC (“Cowen”) and H.C. Wainwright & Co., LLC (“Wainwright”) during the year ended December 31, 2025, as compared to $44.4 million in gross proceeds from executing sales under our at-the-market facilities with Cowen during the same period in 2024.
Capital Resources
As of December 31, 2025, we had approximately $3.0 million in cash and cash equivalents, $16.3 million in short-term investments, $10.3 million in restricted cash and short-term investments and working capital of $22.4 million. 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 (as defined in Note 9 (Debt) to our consolidated financial statements). As of December 31, 2025, the Company had $10.3 million of principal outstanding under the Debentures.
In order to fund our future operations, on March 10, 2023, we filed a universal shelf registration statement (the “Shelf Registration Statement”) with the SEC, which provides for aggregate offerings of up to $400.0 million of common stock, preferred stock, debt securities and warrants or any combination thereof. We also previously had in place a Sales Agreement with Cowen (the “Cowen ATM”), as amended, pursuant to which we were permitted to offer and sell from time to time shares of our common stock having an aggregate offering price of up to $200.0 million through or to Cowen, acting as sales agent or principal, pursuant to the Shelf Registration Statement. In January 2025, the Company sold approximately 0.1 million shares of common stock under the Cowen ATM and received gross proceeds
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of approximately $1.9 million before deducting offering costs of $0.05 million. On February 4, 2025, the Company provided notice of its termination, effective February 14, 2025, of the Cowen ATM.
On February 21, 2025, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with Wainwright, pursuant to which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $75.0 million, through or to Wainwright, acting as sales agent or principal, pursuant to the Shelf Registration Statement. From February 24, 2025 to December 31, 2025, the Company sold approximately 3.0 million shares of common stock under the ATM Agreement at an average share price of $3.06 per share and received gross proceeds of approximately $9.2 million before deducting offering costs of $0.3 million.
On March 31, 2025, the date we filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, our public float was less than $75 million. As a result, we became subject to the offering limits in General Instruction I.B.6 of Form S-3. Pursuant to General Instruction I.B.6 of Form S-3, for so long as our public float is less than $75 million, the amount we can raise through primary public offerings of securities in any twelve-month period using shelf registration statements is limited to one-third of our public float. If our public float increases or decreases, the number of securities we may sell under our shelf registration statements in accordance with General Instruction I.B.6 of Form S-3 will also increase or decrease, respectively. If our public float increases above $75.0 million such that we may sell additional amounts under the ATM Agreement and the ATM Prospectus, we will file another amendment to the ATM Prospectus prior to making additional sales in excess of the limitations of General Instruction I.B.6 of Form S-3.
Contractual Obligations
The following table summarizes our future cash outflows for contractual obligations as of December 31, 2025.
Payments Due by Period
Total Less than1 Year 1-3 Years 3-5 Years More than5 years
Operating lease obligations relate to our office, laboratory and manufacturing space for our corporate headquarters in San Diego, California. 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.
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Critical Accounting Policies and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the periods presented. We have discussed the development, selection and disclosure of the accounting estimates with our audit committee. We believe that the estimates, judgments and assumptions are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. To the extent there are material differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected. Historically, revisions to our estimates have not resulted in a material change to our financial statements. 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. If the Company identifies a change in the circumstances related to its long-lived assets, such as property and equipment and intangible assets, that indicates the carrying value of any such asset may not be recoverable, the Company will perform an impairment analysis. A long-lived asset is not recoverable when the undiscounted cash flows expected to be generated by the asset (or asset group) are less than the asset’s carrying amount. Any required impairment loss would be measured as the amount by which the asset’s carrying value exceeds its fair value, and would be recorded as a reduction in the carrying value of the related asset and a charge to operating expense. If a fair value assessment is performed, the evaluation includes a discounted cash flow method to estimate the fair value of the asset group. The cash flows were determined using market comps obtained from similar asset groups and includes estimates and assumptions for future sublease rental rates that reflect current sublease market conditions as well as discount rates. 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, 2025 and December 31, 2024.
Convertible 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 debentures payable issued using the fair value option under ASC 825-10. Such instruments are recognized at estimated fair value on the date of issuance, with changes in fair value after issuance recorded in other (income) expense, net on the consolidated statements of operations as a gain or loss, unless the change is a result of a change in credit risk, in which case such change in estimated fair value is recorded within other comprehensive income.
Increases or decreases in the fair value of the convertible 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. Updates to assumptions could have a significant impact on the Company’s results of operations in any given period.
Allowance for Excess and Obsolete Inventory
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Provisions for slow-moving, excess, and obsolete inventories are estimated based on product life cycles, historical experience, and sales forecasts. The establishment of a reserve for excess and obsolete inventory establishes a new cost basis in the inventory with a corresponding adjustment to cost of sales. If we are able to sell such inventory, any related reserves are reduced in the period of sale. The Company’s allowance for excess and obsolete inventory was $3.0 million and $3.8 million at December 31, 2025 and 2024, respectively. A 10% change in our reserve estimate in total at December 31, 2025 would result in a change in reserve of approximately $0.3 million. Our reserves are estimates which could vary significantly, either favorably or unfavorably, from actual results if future economic conditions, consumer demand and competitive environments differ from our expectations.
Recent Accounting Pronouncements
See Note 2 (Summary of Significant Accounting Policies), in the accompanying notes to our consolidated financial statements included elsewhere in this Annual Report for information concerning recent accounting pronouncements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to provide the information required by this Item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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Index to Consolidated Financial Statements
Pages
Consolidated Balance Sheets 122
Consolidated Statements of Operations 123
Consolidated Statements of Comprehensive Loss 124
Consolidated Statements of Stockholders’ Equity 125
Consolidated Statements of Cash Flows 126
Notes to Consolidated Financial Statements 128
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Report of Independent Registered Public Accounting Firm
Stockholders and Board of Directors
Bionano Genomics, Inc.
San Diego, California
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Bionano Genomics, Inc. (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Uncertainty
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 1 to the consolidated financial statements, the Company has suffered recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
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Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Inventory Valuation - Excess and Obsolete Inventory
As described in Note 2 to the Company’s consolidated financial statements, provisions for slow-moving, excess, and obsolete inventories are estimated based on product life cycles, historical experience, and sales forecasts. As of December 31, 2025, the Company’s excess and obsolete inventory reserve balance was $3.0 million. Total net inventory as of December 31, 2025 was $7.8 million.
We identified auditing the Company’s estimate for excess and obsolete inventory as a critical audit matter. Auditing forecasted sales data involves especially challenging auditor judgment due to the nature and extent of audit effort required to address the matter.
The primary procedures we performed to address this critical audit matter included:
•
Evaluating the reasonableness of forecasted sale quantities by reviewing historical sale quantities and agreeing certain sales data to relevant source documents.
•
Testing the accuracy of the excess and obsolete inventory reserve calculation.
/s/ BDO USA, P.C.
We have served as the Company’s auditor since 2020.
San Diego, California
March 23, 2026
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BIONANO GENOMICS, INC.
Consolidated Balance Sheets
December 31,
Assets
Current assets:
Liabilities and stockholders’ equity
Current liabilities:
Operating lease liability, net of current portion 2,489,000 145,000
Commitments and contingencies (Note 11)
Stockholders’ equity:
Accumulated other comprehensive income 17,000 27,000
See accompanying notes to the consolidated financial statements.
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BIONANO GENOMICS, INC.
Consolidated Statements of Operations
Years Ended December 31,
Revenue:
Cost of revenue:
Operating expenses:
Intangible assets and other long-lived assets impairment — 19,683,000
Other income (expense):
Net loss per share, basic and diluted $ (4.85 ) $ (88.13 )
See accompanying notes to the consolidated financial statements.
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BIONANO GENOMICS, INC.
Consolidated Statements of Comprehensive Loss
Years Ended December 31,
Other comprehensive income (loss):
Unrealized gain on investment securities 1,000 11,000
Foreign currency translation adjustments (11,000 ) (7,000 )
Other comprehensive income (loss) $ (10,000 ) $ 4,000
See accompanying notes to the consolidated financial statements.
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BIONANO GENOMICS, INC.
Consolidated Statements of Stockholders’ Equity
Common Stock
Issue stock for employee stock purchase plan 500 — 13,000 — — 13,000
Other comprehensive income — — — — 4,000 4,000
Other comprehensive income — — — — (10,000 ) (10,000 )
See accompanying notes to the consolidated financial statements.
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BIONANO GENOMICS, INC
Consolidated Statements of Cash Flows
Years Ended December 31,
Operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of financing lease right-of-use asset 204,000 204,000
Net realized loss on investments — 14,000
Change in fair value of contingent consideration — (10,890,000 )
Loss on issuance of convertible debentures — 1,890,000
Gain on High Trail extinguishment — (3,965,000 )
Loss on extinguishment of convertible debentures payable — 7,341,000
Disposal of internal-use software — 1,293,000
Intangible assets and other long-lived assets impairment — 17,850,000
Long-lived assets held for sale impairment — 425,000
Right-of-use-asset impairment — 1,407,000
Changes in operating assets and liabilities
Investing activities:
Purchases of property and equipment — (103,000 )
Financing activities:
Principal payments of financing lease liability (71,000 ) (58,000 )
Offering expenses on sale of common stock and warrants (2,122,000 ) (2,953,000 )
Proceeds from sale of common stock under employee stock purchase plan — 11,000
Proceeds from warrant and option exercises 9,000 4,000
Proceeds from issuance of convertible debentures — 18,000,000
Payments on High Trail notes — (61,000,000 )
Debt issuance costs on sale of convertible debentures — (1,747,000 )
Payments of retirement fees for redemption of High Trail notes — (5,375,000 )
Money market funds classified as restricted cash and investments 1,519,000 —
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Years Ended December 31,
Supplemental disclosure of cash flow information
Supplemental disclosure of non-cash financing and investing activity
Issuance of common stock for convertible debentures payable $ 350,000 $ —
Accrued liability for fees to be paid in common stock $ — $ 1,584,000
Fees paid in common stock $ 1,584,000 $ —
Non-cash Fill-Up Amount $ — $ 491,000
See accompanying notes to the consolidated financial statements.
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BIONANO GENOMICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Operations
Description of Business
Bionano Genomics, Inc. (collectively, with its consolidated subsidiaries, the “Company”) is a provider of genome analysis solutions that can enable researchers and clinicians to reveal answers to challenging questions in biology and medicine. The Company offers optical genome mapping (“OGM”) solutions, diagnostic services and software for applications across basic, translational and clinical research, and for other applications including bioprocessing. The Company offers 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. Through its wholly-owned subsidiary, Lineagen Inc. (doing business as Bionano Laboratories), the Company also provides OGM-based diagnostic testing services.
Reverse Stock Split
On January 24, 2025, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of all issued and outstanding shares of the Company’s common stock at a ratio of 1-for-60, respectively. The reverse stock split did not change the par value or the authorized number of shares of the Company’s common stock. The Company's consolidated financial statements and notes to the consolidated financial statements present the retroactive effect of the reverse stock split on the Company’s common stock and per share amounts for all periods presented.
Reclassifications
Certain amounts reported in prior years have been reclassified to conform with the presentation in the current year. These reclassifications had no effect on the reported results of operations.
Liquidity and Going Concern
The Company has experienced recurring net losses from operations, negative cash flows from operating activities, and a significant accumulated deficit since its inception and expects to continue to incur net losses into the foreseeable future. As of December 31, 2025, the Company had approximately $3.0 million in cash and cash equivalents, $16.3 million in short-term investments, $10.3 million in restricted cash and short-term investments, and working capital of $22.4 million. The amount the Company is required to hold as restricted cash or investments is equal to the lesser of (a) $11.0 million and (b) the then outstanding principal balance of the Debentures (as defined in Note 9 (Debt) to our consolidated financial statements).
As of December 31, 2025 the Company had $10.3 million of principal outstanding under the Debentures (see Note 9 (Debt) to our consolidated financial statements) and an accumulated deficit of $719.6 million. In 2025, the Company used $16.3 million of cash in operations.
Management expects operating losses and negative cash flows to continue for at least the next year as the Company continues to incur costs related to product development and commercialization efforts. Management has prepared cash flows forecasts which indicate that based on the Company’s expected operating losses and negative cash flows, there
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is substantial doubt about the Company’s ability to continue as a going concern within twelve months after the date that the financial statements for the year ended December 31, 2025, are issued. Management’s ability to continue as a going concern is dependent upon its ability to raise additional funding. Management’s plans to raise additional capital to fulfill its operating and capital requirements for at least twelve months include public or private equity or debt financings. However, the Company may not be able to secure such financing in a timely manner or on favorable terms, if at all, and if the Company is unable to raise sufficient additional capital in the very near term, it may need to further curtail or cease operations and seek protection by filing a voluntary petition for relief under the United States Bankruptcy Code.
Furthermore, if the Company issues equity securities to raise additional funds, its existing stockholders may experience dilution, and the new equity securities may have rights, preferences and privileges senior to those of the Company’s existing stockholders.
The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the outcome of this uncertainty.
2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions used by management include but are not limited to revenue recognition, the fair value of financial instruments measured at fair value, the recoverability of long-lived assets, equity based compensation expense, and net deferred tax assets (and related valuation allowance). Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances.
Basis of Presentation
The consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of the Company’s 100%-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. All dollar amounts and share counts presented below have been rounded to the nearest thousand and, thus are approximate.
Restructuring Expenses
The Company’s restructuring expense consists primarily of actions taken in May and October 2023 (the “2023 Workforce Reductions”) and March and September 2024 (the “2024 Workforce Reductions”) in order to reduce costs and improve operations and manufacturing efficiency. Severance-related costs were accounted for as a one-time termination benefit communicated by period end without an additional service component, so the charge represents the total amount expected to be incurred. As a result of reducing facility costs and discretionary spending unrelated to headcount and combined with the cost savings from the 2023 Workforce Reductions and 2024 Workforce Reductions,
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such plans were intended to decrease expenses and maintain a streamlined organization to support the Company's business.
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 that resulted in a one-time termination fee of approximately $0.2 million paid in the third quarter of 2024. The Company continued to lease the property through June 2024. The Company accounted for the lease amendment as a lease modification and recorded a gain of $0.1 million during the three months ended March 31, 2024.
On March 1, 2024, and September 4, 2024, the Company’s board of directors approved restructuring plans, including reductions in force, that reduced the Company’s annualized operating expenses. The 2024 Workforce Reductions were incremental to the 2023 Workforce Reductions. As part of the 2024 Workforce Reductions, the Company reduced its overall headcount by approximately 120 and 83 employees in March and September 2024, respectively. The Company had completed the reduction in force from the 2024 Workforce Reductions as of December 31, 2024. In addition, as part of the 2024 Workforce Reductions, Bionano Laboratories phased out the offering of certain testing services related to neurodevelopmental disorders, including autism spectrum disorders, and other disorders of childhood development. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the reductions in force. See Note 11 (Commitments and Contingencies) in these notes accompanying the consolidated financial statements for additional information.
Cash and Cash Equivalents
Cash equivalents primarily represent funds invested in readily available money market accounts. The Company has not experienced any losses in such accounts. The Company believes that it is not exposed to any significant credit risk on cash and cash equivalents.
Restricted Cash and Investments
As of December 31, 2024, restricted cash consisted of cash restricted from withdrawal and usage and represents funds that were restricted related to the lease assumed in the acquisition of Purigen in 2022. As of December 31, 2025 and 2024, restricted cash and investments consisted of the proceeds received from the Debentures as described further in Note 9 (Debt) that was deposited into a restricted account that requires the Company to maintain at all times, a cash or restricted investments balance equal to the lesser of (a) $11.0 million and (b) the then outstanding principal balance of the Debentures.
Fair Value Measurements
The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date.
ASC 820, “Fair Value Measurements and Disclosures”, defines and establishes a framework for measuring fair value and expands disclosures about fair value measurements. In accordance with ASC 820, the Company has categorized its financial assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below.
Level 1 – Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the company has the ability to access at the measurement date.
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Level 2 – Assets and liabilities whose values are based on quoted prices for similar attributes in active markets; quoted prices in markets where trading occurs infrequently; and inputs other than quoted prices that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.
If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
Investment Securities
All investments have been classified as “available-for-sale” and are carried at fair value as determined based upon quoted market prices or pricing models for similar securities at period end. Investments with contractual maturities less than 12 months at the balance sheet date are considered short-term investments. Investments with contractual maturities beyond one year are also classified as short-term due to the Company’s ability to liquidate the investment for use in operations within the next 12 months. Realized gains and losses on investment securities are included in earnings and are derived using the specific identification method for determining the cost of securities sold. The Company has not realized any significant gains or losses on sales of available-for-sale investment securities during any of the periods presented. As all the Company’s investment holdings are in the form of debt securities, unrealized gains and losses that are determined to be temporary in nature are reported as a component of accumulated other comprehensive income (loss). The Company records an allowance for credit losses when unrealized losses are due to credit-related factors. At each reporting date, the Company evaluates securities with unrealized losses to determine whether such losses, if any, are due to credit-related factors. Interest income is recognized when earned, as are the amortization of purchase premiums and accretion of purchase discounts on investment securities.
Concentrations
Credit Risks
Financial instruments, which potentially subject the Company to significant concentration of credit risk, consist primarily of cash and cash equivalents and accounts receivable. The Company maintains deposits in federally insured major financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institution in which those deposits are held.
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The Company’s customers are located throughout the world. The Company generally does not require collateral from its customers. More information on accounts receivable is contained in the paragraph titled “Accounts Receivable” below.
Sources of Materials and Products
The materials and components for the Company’s product offerings are currently obtained from single or limited sources. The Company competes with other companies for production capacity, therefore, the Company is exposed to a risk of inventory being unavailable at acceptable prices, or at all, if suppliers are unable (or decide) to provide sufficient levels of materials and components and the Company is unable to identify alternative suppliers.
Accounts Receivable and Allowance for Credit Losses
Accounts receivable, net:
Changes to the allowance for credit losses from January 1, 2024 to December 31, 2025 were as follows:
Allowance forCredit Losses
Provision for expected credit loss (9,000 )
Provision for expected credit loss (18,000 )
The Company extends credit to its customers in the normal course of business. For diagnostic testing services, receivables are based on either contractual rates with third-party payors, plus the amounts expected to be collected for any patient-responsibility portion, or for non-contracted arrangements, using the amounts expected to be collected from third-party payors and/or the patient-customer based on historical collection experience. The Company does not perform credit evaluations and therefore subsequent adjustments to the amount expected to be collected are recorded to revenue.
For OGM products and services, credit is extended based upon an evaluation of each customer’s credit history, financial condition, and other factors. Estimates of allowances for credit losses are determined by evaluating individual customer circumstances, historical payment patterns, length of time past due, forecasts about the future, and economic and other factors. Provision for expected credit losses is recorded as necessary to maintain an appropriate level of allowance for credit losses in selling, general and administrative expense. Amounts are charged to the allowance for credit losses when collection efforts have been exhausted and are deemed uncollectible.
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Accounts receivable is subject to concentration risk whenever a customer has a balance that meets or exceeds 10% of the Company’s total accounts receivable balance. As of December 31, 2025, there were no customers that met or exceeded a 10% concentration in the Company’s total accounts receivable balance. As of December 31, 2024, there was one customer with a 10% concentration of the Company’s total accounts receivable balance.
Inventory
Inventory is stated at the lower of cost or net realizable value, on a first-in, first-out basis. Inventory is valued at standard cost. Inventory includes raw materials, work in process, and finished goods that may be used in the research and development process and such items are expensed as consumed or expired. Provisions for slow-moving, excess, and obsolete inventories are estimated based on product life cycles, historical experience, and sales forecasts.
The components of inventories, net of reserve, are as follows:
December 31,
Inventory:
The Company reviews its inventories for classification purposes. The value of inventories not expected to be realized in cash, sold or consumed during the next 12 months are classified as non-current within other long-term assets.
During the year ended December 31, 2024, the Company recorded a $7.2 million write-off of its Saphyr instrument spare parts and other excess or obsolete inventory as a result of the Company’s restructuring initiatives and change in business strategy announced in September 2024. As of December 31, 2025 and 2024, the Company’s excess and obsolete inventory reserve balance was $3.0 million and $3.8 million, respectively.
Loss on disposal of property and equipment
Loss on disposal of property and equipment includes the net book value of assets that have been abandoned or retired and consists primarily of our leasehold improvements, furniture, equipment and fixtures that were abandoned and disposed of in the normal course of business. The Company recorded a loss on disposal of property and equipment of $0.3 million and $1.4 million during the years ended December 31, 2025 and 2024.
Change in depreciable lives of property and equipment
The Company reviews the estimated useful life of its fixed assets on an ongoing basis. This review indicated that the actual lives of the Company’s Saphyr and Stratys instruments were longer than the estimated useful lives used for depreciation purposes in the Company’s consolidated financial statements. As a result, effective January 1, 2024, the Company changed its estimates of the useful lives of the Company’s Saphyr and Stratys instruments to better reflect the estimated period during which these assets will remain in service. The estimated useful lives of the Company’s Saphyr and Stratys instruments were increased from 5 to 7 years. The effect of this change in estimate reduced
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depreciation expense by $1.8 million for the fiscal year 2024. There were no changes to the depreciable lives of property and equipment during the year ended December 31, 2025.
Disposal of In-Process Internal-Use Software
In September 2024, Bionano announced a change in its business strategy to focus on driving utilization and adoption of OGM from the Company’s existing installed base, with less emphasis on new placements of the Company’s OGM systems, which resulted in a change in the manner in which the Company’s in-process internally developed software would be used; therefore, it became probable that the software would not be placed into service. The Company disposed of the project, and recorded a loss of $1.3 million included in selling, general and administrative expense on the consolidated statement of operations during the year ended December 31, 2024. No disposals of internal-use software were recorded in the year ended December 31, 2025. The Company’s in-process internal-use software was recorded in prepaid expenses and other current assets on the consolidated balance sheets.
Impairment of Long-Lived Assets (including Finite-Lived Intangible Assets)
Long-lived assets consist of property and equipment and acquired finite-lived intangible assets. Property and equipment generally consist of laboratory equipment, computer and office equipment, furniture and fixtures, and leasehold improvements. Property and equipment are recorded at cost and depreciated or amortized using the straight-line method over the estimated useful lives of the assets (generally three to seven years, or the remaining term of the lease for leasehold improvements, whichever is shorter). Repairs and maintenance costs are charged to expense as incurred.
Intangible assets acquired in a business combination are recognized separately from goodwill and are initially recognized at their fair value at the acquisition date. Finite-lived intangible assets are amortized over the estimated useful life of the asset on a basis that approximates the pattern of economic benefit.
As a result of the Lineagen, BioDiscovery, and Purigen acquisitions, the Company recorded intangible assets, which consist of trade name intangibles, customer relationship intangibles, and a developed technology intangible, which are amortized on a straight-line basis over their estimated useful lives of five years, with the exception of the developed technology intangible acquired through the acquisition of Purigen, which was amortized over fifteen years. Straight-line amortization was determined to be materially consistent with the pattern of expected use of the intangible assets.
Long-lived assets are reviewed for impairment if indicators of potential impairment exist. If the Company identifies a change in the circumstances related to its long-lived assets, such as property and equipment and intangible assets, that indicates the carrying value of any such asset may not be recoverable, the Company will perform an impairment analysis. A long-lived asset is not recoverable when the undiscounted cash flows expected to be generated by the asset (or asset group) are less than the asset’s carrying amount. Any required impairment loss would be measured as the amount by which the asset’s carrying value exceeds its fair value, and would be recorded as a reduction in the carrying value of the related asset and a charge to operating expense.
During the three months ended March 31, 2024, the Company experienced a triggering event as a result of the restructuring initiatives announced in March 2024 that required an evaluation of its non-OGM Bionano Laboratories asset group for impairment. The Company performed a recoverability test and concluded that the non-OGM Bionano Laboratories long-lived assets were not recoverable; therefore, the Company measured the impairment loss and fully impaired the intangible assets acquired through the acquisition of Lineagen, consisting of its trade name and customer relationship intangible assets. The Company recognized an impairment loss of $0.4 million during the three months ended March 31, 2024.
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During the three months ended September 30, 2024, the Company experienced a triggering event and identified indicators of impairment in all of its asset groups as a result of the restructuring initiatives and change in business strategy announced in September 2024. The Company assessed the recoverability of each asset group and concluded the legacy OGM Bionano and Purigen asset groups were not recoverable. Therefore, the Company was required to perform an impairment analysis to determine the fair value of the legacy OGM Bionano and Purigen asset groups as further described below.
The Company evaluated the fair value of the finite-lived assets of the legacy OGM Bionano asset group. The Company evaluated the fair value of the reagent rental instruments based on the expected sales volume or usage and recorded an impairment loss of $2.6 million during the year ended December 31, 2024. The estimates and assumptions used in the assessment of the reagent rental instrument impairments represent Level 2 measurements because they are supported by executed sales transactions. The impairment loss associated with these reagent rental instruments was recorded to cost of product revenue in the Company’s consolidated statement of operations.
The Company estimated the fair value of the right-of-use assets and related office equipment and leasehold improvements for the San Diego facilities (Nancy Ridge and 9640 Towne Center Drive) and recorded impairment losses of $0.4 million and $0.2 million, respectively during the year ended December 31, 2024. The fair value of the right-of-use asset and related office equipment and leasehold improvements was estimated using the discounted future cash flow methods, which includes estimates and assumptions for future sublease rental rates that reflect current sublease market conditions as well as discount rates. The estimates and assumptions used in the assessment of right-of-use assets impairments represent Level 3 measurements because they are supported by little or no market activity and reflect the Company’s assumptions in measuring fair value. The impairment losses were recognized in intangible assets and other long-lived assets impairment in the consolidated statement of operations.
The Company evaluated the fair value of the finite-lived intangible assets of the Purigen asset group, consisting of the Purigen trade name, customer relationships and developed technology, as well as the operating lease right-of-use asset and related office equipment and leasehold improvements. To estimate the fair value of the intangible assets, the Company utilized the discounted cash flow method to estimate the fair value of the asset group. The Company identified that no projected after-tax cash flows would be generated from the Purigen intangible assets and that the cost to maintain and sell the Purigen products exceeded the expected revenue to be generated from the asset group. The carrying value of the Purigen intangible assets therefore exceeded its fair value and the Company recorded an impairment loss of $17.3 million for the intangible assets during the year ended December 31, 2024. The Company estimated the fair value of the right-of-use asset and related office equipment and leasehold improvements for the Pleasanton, California facility and recorded an impairment loss of $0.8 million during the year ended December 31, 2024. The fair value of the right-of-use asset and related office equipment and leasehold improvements was estimated using the discounted future cash flow methods, which includes estimates and assumptions for future sublease rental rates that reflect current sublease market conditions as well as discount rates. The Company also recorded $0.1 million of leasehold improvements and office equipment impairments related to the Pleasanton, California facility during the year ended December 31, 2024. The estimates and assumptions used in the assessment of intangible assets, right-of-use assets and related office equipment and leasehold improvement impairments represent Level 3 measurements because they are supported by little or no market activity and reflect the Company’s assumptions in measuring fair value. The impairment losses were recognized in intangible assets and other long-lived assets impairment in the consolidated statement of operations.
Noimpairment losses were recorded during the year ended December 31, 2025.
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Contingent Consideration
The Company recorded contingent consideration resulting from its business combinations at its fair value on the acquisition date. On a quarterly basis, the Company revalues this obligation and records any increase or decrease in fair value as an adjustment to the consolidated statement of operations. Changes to the fair value of the contingent consideration obligation may result from changes to the discount rate, the passage of time, or changes in the estimate of the likelihood or timing of achieving the criteria for payment of the contingent consideration.
Leases
Right-of-use (“ROU”) assets represent our right to use an underlying asset during the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating leases are included in operating lease right-of-use assets and operating lease liabilities in the consolidated balance sheets, while finance leases are included in finance lease right-of-use assets and finance lease liabilities.
Lease assets and liabilities are recognized at commencement based on the present value of lease payments over the lease term. The Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments. The ROU assets also include any prepaid or accrued lease payments and is adjusted for lease incentives and initial direct costs.
Lease terms may include options to extend or terminate the lease which are recognized when it is reasonably certain that the Company will exercise that option. The Company has not included any options to extend in their lease term. Leases with terms of 12 months or less are not recorded on the balance sheet. Lease expense is recognized on a straight-line basis over the lease terms, or in some cases, the useful life of the underlying asset. Variable lease payments are excluded from the measurement of ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. The Company accounts for the lease and non-lease components as a single lease component for all classes of underlying assets.
Convertible Debentures Payable
The Company elected to account for its convertible debentures issued in May 2024, using the fair value option under ASC 825-10, Recognition and Measurement of Financial Assets and Financial Liabilities (or “ASC 825-10”). Such instruments are recognized at estimated fair value on the date of issuance, with changes in fair value after issuance recorded in other (income) expense, net on the consolidated statements of operations as a gain or loss, unless the change is a result of a change in credit risk, in which case such change in estimated fair value is recorded within other comprehensive income. Direct issuance costs are expensed as incurred and are charged to interest expense and recorded in other income (expense) in the consolidated statements of operations.
Increases or decreases in the fair value of the debentures payable can result from updates to assumptions such as the 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.
Financial Instruments with Characteristics of Both Liabilities and Equity
The Company accounts for issued warrants either as a liability or equity in accordance with ASC 480-10, Distinguishing Liabilities From Equity (or “ASC 480-10”), and ASC 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity (or “ASC 815-40”). Under ASC 480-10, warrants are considered a liability if mandatorily redeemable and require settlement in cash, other assets, or a variable number of shares. If warrants do not meet liability classification under ASC 480-10, the Company considers the requirements of ASC 815-40 to determine whether the
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warrants should be classified as a liability or as equity. Under ASC 815-40, contracts that may require settlement for cash that are not under the control of the Company are liabilities, regardless of the probability of the occurrence of the triggering event. Liability-classified warrants are measured at fair value on the date of issuance and on a recurring basis at the end of each reporting period with any change in fair value after issuance recorded in other (income) expense, net on the consolidated statements of operations as a gain or loss. If warrants do not require liability classification under ASC 815-40, in order to conclude warrants should be classified as equity, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or under another applicable GAAP standard. Equity-classified warrants are accounted for at fair value on the issuance date, or in a bundled transaction on a residual basis based on an allocation of proceeds first to the instruments measured at fair value on a recurring basis, and are not subsequently remeasured. The Company’s outstanding warrants do not meet the requirements for liability classification under ASC-480-10 or ASC-815-40. Therefore, the Company’s outstanding warrants are classified as equity as of December 31, 2025 and 2024.
Revenue Recognition
The Company generates revenue primarily from the sale of products and services. The Company considers revenue to be earned when all of the following criteria are met: the Company has a contract with a customer that creates enforceable rights and obligations; promised products or services are identified; the transaction price, or the amount the Company expects to receive, including an estimate of uncertain amounts subject to a constraint to ensure revenue is not recognized in an amount that would result in a significant reversal upon resolution of the uncertainty, is determinable; and the Company has transferred control of the promised items to the customer. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the contract. The transaction price for the contract is measured as the amount of consideration the Company expects to receive in exchange for the goods and services expected to be transferred. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, control of the distinct good or service is transferred.
The Company provides assurance type warranties on many of its products. As customers cannot purchase such warranties independently of the products under the contract and they are not priced separately, assurance type warranties are not separate performance obligations.
The Company recognizes a receivable when we have an unconditional right to payment, which is generally at the time of delivery of software, consumables and instruments, including any extended warranties, or at the time services are rendered. Payment terms are typically 30 days for sales to customers in the United States but may be longer in international markets. The Company treats shipping and handling costs performed after a customer obtains control of the good as a fulfillment cost and records these costs within selling, general and administrative expenses, less any amounts reimbursed by the customer, when the corresponding revenue is recognized.
Revenue is recorded net of discounts and sales tax. The Company’s contracts typically do not provide for product returns or refunds. In general, estimates of variable consideration and constraints are not material to the Company’s financial statements. Employee sales commissions are recorded as selling, general and administrative expenses when incurred as the amortization period for such costs, if capitalized, would have been one year or less.
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Product revenue recognition
Product revenue consists of sales of our OGM systems and related consumables, as well as sales of software. These products are sold primarily through a direct sales force, and within international markets, there is more reliance on distributors. In addition, the Company provides the OGM systems to certain customers under its reagent rental program, under which the Company provides OGM systems to customers at no cost and the customers agree to purchase minimum quantities of consumables.
Transfer of control for the Company’s products is generally at shipment or delivery, depending on contractual terms, but occurs when title and risk of loss transfers to the customer which represents the point in time when the customer obtains control of the product. Transfer of control of software is recognized at the point-in-time when the software license is transferred to the customer. As such, the Company’s performance obligation related to product sales is satisfied at a point in time.
For transfers of instruments and consumables to customers under the Company’s reagent rental program, the Company allocates the total contract consideration between the instrument and the consumables based on estimates of stand-alone selling prices, and recognizes the instrument revenue evenly over the rental period, and the consumables revenue when the consumables are delivered. Rental revenue related to the reagent rental program recognized over-time totaled $1.9 million and $2.0 million during the years ended December 31, 2025 and 2024, respectively.
Revenue related to software license maintenance agreements is recognized over-time based on the contract term. Revenue recognized over-time related to software sales totaled $0.4 million and $0.4 million during the years ended December 31, 2025 and 2024, respectively.
Service and other revenue recognition
Service and other revenue primarily consist of revenue from diagnostic testing services, license maintenance agreements, software hosting arrangements, and support, repair and maintenance services and extended warranties on OGM systems.
Revenue from the completion of diagnostic testing services is initially recorded at the estimated consideration the Company expects to receive from contractual and non-contractual payors, and is subject to adjustment based on the amount actually collected. The Company performs its obligation under a contract with a customer by processing diagnostic tests and communicating the test results, which the Company has determined is the point at which control is transferred to the customer for revenue recognition purposes.
Revenue for hosting arrangements is recognized over-time on a usage basis as the customer processes the number of genetic samples purchased with the software. Hosting arrangements revenue recognized over-time totaled $0.5 million and $0.7 million during the years ended December 31, 2025 and 2024, respectively.
Revenue from support and maintenance contracts and extended warranties is recognized over time based on the contract term, which represents a faithful depiction of the transfer of goods and services given the stand-ready nature of the performance obligations. Service revenue related to repairs and customer sample evaluations is recognized as the services are performed based on the specific nature of the service. Warranty and maintenance revenue recognized over-time totaled $1.1 million and $1.1 million during the years ended December 31, 2025 and 2024, respectively.
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Remaining Performance Obligations
As of December 31, 2025, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied was $1.2 million. These remaining performance obligations primarily relate to extended warranty and support and maintenance obligations, as well as obligations related to software under hosting arrangements. The Company expects to recognize approximately 84.4 % in 2026, 10.8 % in 2027, and 4.8 % in 2028.
We periodically review the warranty reserve for adequacy and adjust the warranty accrual, if necessary, based on actual experience and estimated costs to be incurred. Warranty expense is recorded as a component of cost of product revenue. The Company’s liability for product warranties provided under its agreements with customers was $0.6 million and $0.3 million as of December 31, 2025 and 2024, respectively. Warranty expense recorded in cost of goods sold totaled $0.3 million and $0.2 million during the years ended December 31, 2025 and 2024, respectively.
Contract Assets and Liabilities
Contract assets primarily relate to the Company’s conditional right to consideration for work completed but not billed at the reporting date. Contract assets were $0.2 million and $0.3 million as of December 31, 2025 and 2024, respectively, which was included in the accounts receivable, net balance on the consolidated balance sheet. The changes in the balance were immaterial.
Contract liabilities primarily relate to payments received from customers in advance of performance under the contract. The Company records a contract liability, or deferred revenue, when it has an obligation to provide service, and to a much lesser extent product, to the customer and payment is received or due in advance of performance. Contract liabilities primarily relate to support and maintenance contracts and extended warranty obligations. Contract liabilities are classified as other current liabilities and other long-term liabilities on the consolidated balance sheets. The Company recognized revenue of $1.4 million and $1.6 million during the years ended December 31, 2025 and 2024, respectively, which was included in the contract liability balance at the end of the previous year. The changes in the balance were immaterial and primarily relate to timing.
Distributor Transactions
In certain markets, the Company sells products and provides services to customers through distributors that specialize in life sciences products. In cases where the product is delivered to a distributor, revenue recognition generally occurs when the distributors obtains control of the product. The terms of sales transactions through distributors are generally consistent with the terms of direct sales to customers and do not contain return rights. Distributor sales transactions typically differ from direct customer sales as they do not require the Company’s services to install the instrument at the end customer or perform the services for the customer that are beyond the standard warranty in the first year following the sale. These transactions are accounted for in accordance with the Company’s revenue recognition policy described herein.
Cost of Revenue
Cost of revenue for products consists of the Company’s raw material parts costs and associated freight, shipping and handling costs, contract manufacturing costs, royalties due to third parties, salaries and other personnel costs, equipment depreciation, overhead and other direct costs related to those sales recognized as product revenue in the period.
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Cost of service and other revenue consists of third-party laboratory costs to process the diagnostic samples, salaries and other personnel costs of our clinical technicians who interpret and deliver the results to patients, facility costs associated with costs related to warranty services, and other costs of servicing equipment at customer sites.
Research and Development Costs
Costs incurred for research and product development, including acquired technology and costs incurred for technology in the development stage, are expensed as incurred.
Patent Costs
Costs related to filing and pursuing patent applications are recorded as selling, general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain.
Stock-based Compensation
The Company issues stock-based awards as compensation to employees and directors. Stock-based awards may include stock options, restricted stock units, and performance stock units. These awards are accounted for as equity awards. To-date, the Company recognizes stock-based compensation expense net of actual forfeitures on a straight-line basis over the underlying award’s requisite service period, which is generally the vesting period, as measured using the award’s grant date fair value. The Company determines grant date fair value of stock option awards using the Black-Scholes option-pricing model. The fair value of restricted stock units and performance stock units are determined using the closing price of the Company’s common stock on the grant date. For service based vesting grants, expense is recognized over the requisite service period based on the number of options or shares expected to ultimately vest. For performance stock units, expense is recognized over the implicit service period, assuming vesting is probable. No expense is recognized for the performance stock units if it is not probable the vesting criteria will be satisfied.
Income Taxes
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. Changes in the valuation allowance when they are recognized in the provision for income taxes may result in a change in the estimated annual effective tax rate.
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The Company recognizes the impact of uncertain tax positions at the largest amount that is “more likely than not” to be sustained upon audit by the relevant taxing authority. An uncertain tax position will not be recognized if it does not have a greater than 50% likelihood of being sustained. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability.
Segment Reporting
Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined it has one operating and reportable segment. Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance. The Company’s measure of segment performance on a consolidated basis is consolidated net loss, which the CODM uses to allocate resources, after considering the Company’s strategic priorities, its cash balance, and its expected use of cash. In making resource allocation decisions, the CODM also evaluates budgeted results compared to actual performance. The measure of segment assets is reported on the consolidated balance sheets as total assets. Refer to the consolidated statements of operations and comprehensive loss for the Company’s measure of profit (loss). See also Note 14 (Segment Reporting) in the accompanying notes to the consolidated financial statements.
Net Loss Per Share
Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and common share equivalents outstanding for the period. Common share equivalents are only included when their effect is dilutive. The Company’s potentially dilutive securities include outstanding convertible debentures payable into common stock, outstanding common warrants to purchase common stock, restricted stock units (“RSUs”), performance stock units (“PSUs”), and outstanding stock options under the Company’s equity incentive plans. For all periods presented, there was no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.
Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive were as follows (in common stock equivalent shares):
Years Ended December 31,
Recently Adopted Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures. Two primary enhancements related to this ASU include disaggregating existing income tax disclosures relating to the effective tax
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rate reconciliation and income taxes paid. The Company retrospectively adopted ASU 2023-09 during the year ended December 31, 2025. As the requirements of the ASU impact only income tax disclosures in the footnotes to the Company’s consolidated financial statements, the adoption did not affect the Company's consolidated statements of operations or consolidated balance sheets.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosure about specific expense categories in the notes to financial statements. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements. This ASU addresses suggestions received from stakeholders regarding the ASC and makes other incremental improvements to GAAP. The update represents changes to the ASC that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply, including amendments to clarify the calculation of earnings per share when a loss from continuing operations exists. This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years, with early adoption permitted. Entities are required to apply the amendments to ASC 260 retrospectively. All other amendments may be applied prospectively or retrospectively. The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and related disclosures.
Recently Issued Tax Legislation
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The provisions of OBBBA did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2025.
3. Revenue from Contracts with Customers
Revenue by Source
Years Ended December 31,
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Revenue by Geographic Location
Years Ended December 31,
$ % $ %
The tables above provide revenue from contracts with customers by source and geographic location (based on the customer’s billing address) on a disaggregated basis. Americas consists of North America and South America. EMEA consists of Europe, the Middle East and Africa. Asia Pacific includes China, Japan, South Korea, Singapore, India and Australia.
For the years ended December 31, 2025 and 2024, the United States represented 37% and 36% of total revenue, respectively. No other countries represented greater than 10% of total revenue during the years ended December 31, 2025 and 2024.
4. Investments and Fair Value Measurements
The Company holds investment securities that consist of highly liquid, investment grade debt securities. The Company determines the fair value of its investment securities based upon one or more valuations reported by its investment accounting and reporting service provider. The investment service provider values the securities using a hierarchical security pricing model that relies primarily on valuations provided by an industry-recognized valuation service. Such valuations may be based on trade prices in active markets for identical assets or liabilities (Level 1 inputs) or valuation models using inputs that are observable either directly or indirectly (Level 2 inputs), such as quoted prices for similar assets or liabilities, yield curves, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, and broker and dealer quotes, as well as other relevant economic measures.
The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024:
Fair Value Measurement Category
Total Fair Value and Carrying Value on Balance Sheet Level 1 Level 2 Level 3
Assets:
Liabilities:
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The Company’s restricted cash and investments balance of $10.3 million as of December 31, 2025 includes $1.4 million of money market funds that were recorded as restricted cash and $8.8 million of U.S. treasuries that were recorded as restricted investments.
Fair Value Measurement Category
Total Fair Value and Carrying Value on Balance Sheet Level 1 Level 2 Level 3
Assets:
U.S. treasuries classified as short-term investments $ 302,000 $ — $ 302,000 $ —
Liabilities:
Contingent Consideration
Contingent consideration relates to the acquisition of Purigen. The outcome of the milestone consideration for all contingent consideration liabilities is binary, meaning the milestones are either achieved or not achieved, and the only other variable factor is the timing of when the milestones are achieved. The fair value measurement of the contingent consideration liabilities is based on significant inputs not observed in the market (Level 3 inputs). These unobservable inputs represent a Level 3 measurement because they are supported by little or no market activity and reflect the Company’s assumptions in measuring fair value.
Contingent consideration liabilities related to the Purigen milestones are related to the achievement of two independent milestones with aggregate possible milestone payments totaling $32.0 million.
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. 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.
During the year ended December 31, 2024, the Company concluded that the probability of achievement of the two independent milestones was 0% which resulted in a reduction in the contingent consideration liability to zero.
JGB Convertible debentures payable, High Trail convertible notes payable and purchase option liability
The fair value of the JGB convertible debentures maturing in 2026, which were issued on May 24, 2024, and the High Trail convertible notes payable that were issued in October 2023, were estimated using a scenario-based analysis on a quarterly basis. The fair value was estimated using a lattice model. The key input assumptions utilized are summarized in the table below:
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Convertible DebenturesPayable
Risk-free interest rate 3.59 % 4.15 %
Term to maturity (years) 0.40 1.33
Equity discount rate 3.59 % 4.15 %
The volatility is based on an analysis of the Company’s historical stock price, the risk-free rate is based on US treasury yields, the equity discount rate is based on term-specific US treasury yields, and the debt discount rate is based on the Company’s credit rating.
In connection with the High Trail Notes, the purchaser was granted an option (the “Purchase Option”) which expired on the maturity date of the High Trail Notes to purchase up to an additional $25.0 million aggregate principal amount of private placement notes (the “Subsequently Purchased Notes”) and warrants (refer to Note 9 (Debt)). The estimated fair value of the Purchase Option as of the valuation date was assessed as the difference in the aggregate indicated value of the Subsequently Purchased Notes and the consideration to be paid upon exercising the option. The outstanding amount of the High Trail Notes was redeemed on May 24, 2024, and the Purchase Option rights no longer exist.
Changes in estimated fair value of contingent consideration liability, convertible debentures payable, convertible High Trail notes payable and option liability in the years ended December 31, 2025 and 2024 are as follows:
Issuance of convertible debentures payable — 19,890,000 — —
(Gain)/loss on extinguishment of convertible debentures payable — 7,341,000 — —
Conversions to common stock — (350,000 ) — —
Cash payments on redemptions — (4,875,000 ) — —
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Available for Sale Investments
The Company invests its excess cash in U.S. Treasury and agency securities, corporate debt securities, and commercial paper, which are classified as available-for-sale investments. These investments are carried at fair value and are included in the tables below. The Company records an allowance for credit losses when unrealized losses are due to credit-related factors. At each reporting date, the Company evaluates securities with unrealized losses to determine whether such losses, if any, are due to credit-related factors. The Company evaluates, among others, whether the Company has the intention to sell any of these investments and whether it is not more likely than not that the Company will be required to sell any of them before recovery of the amortized cost basis. Neither of these criteria were met in any period presented. The credit ratings of the securities held remain of the highest quality. Moreover, the Company continues to receive payments of interest and principal as they become due, and our expectation is that those payments will continue to be received timely. Based on this evaluation, as of December 31, 2025 and December 31, 2024, the Company determined that unrealized losses of the below securities were primarily attributable to changes in interest rates and non-credit related factors. As such, no allowances for credit losses were recorded during these periods.
As of December 31, 2025 and December 31, 2024, the Company held two and one securities, respectively, which have been in an unrealized loss position for a period of less than 12 months. As of December 31, 2025 and December 31, 2024, the Company held no securities which have been in an unrealized loss position for a period of greater than 12 months.
Realized gains and losses are calculated using the specific identification method and recorded in other income (expense) in the Company’s consolidated statements of operations and comprehensive loss. The Company has the ability, if necessary, to liquidate any of its cash equivalents and marketable securities to meet its liquidity needs in the next 12 months.
During the year ended December 31, 2025, the Company sold one of its available for sale securities and received proceeds of $1.4 million. During the year ended December 31, 2025, the Company recognized an immaterial loss in other income relating to the sale of its security. Amounts are reclassified out of accumulated other comprehensive income into earnings using the specific identification method when sales are realized. During the year ended December 31, 2024, the Company sold eighteen of its available for sale securities and received proceeds of $33.3 million, and recognized an immaterial loss in other income relating to the sale of its securities.
Interest receivable was immaterial as of December 31, 2025 and 2024. Interest receivable is recorded as a component of prepaid expenses and other current assets on the consolidated balance sheets.
Included in interest income for the year ended December 31, 2025 and December 31, 2024 was interest income related to the Company’s available for sale securities of $1.0 million and $1.5 million, respectively. All available-for-sale securities are classified as current assets, even if the maturity when acquired by the Company is greater than one year due to the ability to liquidate within the next 12 months.
As of December 31, 2025, the following table summarizes the amortized cost and the unrealized gains (losses) of the available for sale securities presented within investments:
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As of December 31, 2025, the following table summarizes the amortized cost and the unrealized gains (losses) of the available for sale securities presented within restricted cash and investments:
As of December 31, 2024, the following table summarizes the amortized cost and the unrealized gains (losses) of the available for sale securities presented within investments:
As of December 31, 2024, the following table summarizes the amortized cost and the unrealized gains (losses) of the available for sale securities presented within restricted cash and investments:
As of December 31, 2025, there were no available-for-sale securities listed as investments in an unrealized loss position.
As of December 31, 2025, the following table summarizes available-for-sale securities in an unrealized loss position for the available for sale securities presented within restricted cash and investments:
Less Than 12 Months 12 Months or Greater Total
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As of December 31, 2024, the following table summarizes available-for-sale securities in an unrealized loss position:
Less Than 12 Months 12 Months or Greater Total
As of December 31, 2024, there were no available-for-sale securities listed as restricted cash and investments in an unrealized loss position.
5. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following:
Internal use cloud computing arrangement software development costs — 154,000
Prepaid marketing expenses 18,000 —
6. Property and Equipment, Net
Property and equipment, net consist of the following:
For the years ended December 31, 2025 and 2024, the Company recorded depreciation expense of $4.2 million and $4.9 million, respectively, which includes an allocation to cost of revenue of $2.6 million and $2.8 million respectively.
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7. Intangible Assets, Net
Intangible assets that are subject to amortization consisted of the following at December 31, 2025 and 2024:
The Company recorded amortization expense for intangible assets of $5.4 million and $6.6 million for the years ended December 31, 2025 and 2024 respectively, in selling, general and administrative expenses. Intangible assets are amortized on a straight-line basis over their estimated useful lives of five years, with the exception of the developed technology intangible acquired through the acquisition of Purigen, which was amortized over fifteen years. The Purigen and Lineagen intangible assets were fully impaired during 2024. See Note 1 (Organization and Operations) for further discussion on the impairment charges impacting the Company’s intangible assets in the period. As of December 31, 2025, trade name intangibles, customer relationships, and developed technology have weighted average remaining amortization periods of 0.67 years each.
Intangible assets not subject to amortization totaled $0.1 million at December 31, 2025 and December 31, 2024 and related to the Company’s domain name.
Future amortization expense of intangible assets is as follows:
8. Accrued Expenses
Accrued expenses consist of the following:
Accrued liability for fees to be paid in common stock — 1,584,000
Customer deposits — 17,000
*Compensation expenses include restructuring costs of $0.3 million and $0.6 million as of December 31, 2025 and 2024, respectively. Refer to Note 11 (Commitments and Contingencies).
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9. Debt
JGB Debentures
On May 24, 2024, the Company entered into a securities purchase agreement with certain accredited investors (the “Holders”) and JGB Collateral LLC, as collateral agent for the Holders, for the sale by the Company in a private placement (the “JGB Debentures Offering”) of:
•
38,000 shares (the “Shares”) of the Company’s common stock, and
•
Senior Secured Convertible Debentures in the aggregate principal amount of $20.0 million (the “Debentures”), for an aggregate purchase price of $18.0 million.
The closing of the JGB Debentures Offering occurred on May 24, 2024. In connection with the closing of the JGB Debentures Offering, the Company received net proceeds of approximately $16.3 million, after payment of placement agent fees, and other offering expenses. The Company used the proceeds received to fully redeem the outstanding balance due under the High Trail Note of approximately $17.6 million, as amended (see “High Trail Agreement & Amendment” below).
Debentures
The Debentures have an aggregate face value of $20.0 million and were issued with an original issue discount of $2.0 million. The Debentures mature on May 24, 2026, and have an interest rate of 11.0% per annum payable monthly on the last business day of each calendar month. During the year ended December 31, 2025, the Company paid the Holders $1.4 million in interest, which is included in the change in fair value within other income (expense), net.
The Company recorded the Debentures at their fair value at issuance of $19.9 million, per the fair value option under ASC 825 (refer to Note 4 (Investments and Fair Value Measurements)) and they will be measured on a recurring basis and adjusted through other income and expense, net. The Shares were recorded at $0 in common stock and additional paid in capital, which represents the residual amount after allocation of proceeds to the Debentures at fair value. During the year ended December 31, 2024, the Company recognized an initial loss on the issuance of the Debentures of $1.9 million for the difference between the fair value of the Debentures and proceeds from the transaction, which was recorded in other income (expense) on the consolidated statement of operations. The Company incurred debt issuance costs of $1.7 million related to the JGB Debentures Offering, which was charged to interest expense and recorded in other income (expense) on the consolidated statement of operations.
The Holders of the Debentures requested that the Company redeem up to $1.0 million per calendar month of its Debentures and may request redemption up to $0.5 million per calendar month beginning in January 2025 to July 2025, and up to $1.4 million from August 2025 onward. The table below shows the amount of potential redemptions each year until the maturity of the Debentures as of December 31, 2025.
The Company may redeem the Debentures, subject to certain Equity Conditions (as defined in the Debentures), at any time after August 2025 by paying an amount equal to the entire outstanding principal amount of the Debenture, plus all accrued and unpaid interest, plus the applicable Company Redemption Premium (as defined in the Debentures, the “Premium”) plus any other amounts due and payable under the Debentures. The Premium is an amount equal to 112% of the principal amount of the Debenture if the redemption is prior to the first anniversary of the original issue date,
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or 106% of the principal amount of the Debenture if the redemption is on or after the first anniversary of the original issue date. No partial redemptions by the Company are permitted.
At the election of the holder, each Debenture is convertible, in whole or in part, at any time and from time to time at a conversion price of $16.20 per share of common stock. The conversion price is subject to adjustment for stock dividends, stock splits, and certain other corporate events. Notwithstanding the foregoing, the Company will not effect any conversion under the Debentures to the extent that such conversion would cause the holder’s beneficial ownership of the Company’s common stock to exceed 4.99% (or 9.99% at the election of the holder) of the Company’s issued and outstanding common stock.
Under the Debentures, the Company must at all times maintain a cash or restricted investments balance equal to the lesser of (a) $11.0 million and (b) the then outstanding principal balance of the Debentures, in a blocked account. In addition, for as long as any portion of the Debentures remain outstanding, the Company is generally restricted from: incurring indebtedness; granting or suffering liens on any of its property or assets; amending its organizational documents; repurchasing any of its securities; paying dividends; selling, disposing, licensing or leasing its assets other than in the ordinary course; and other customary restrictive covenants. The Debentures also set forth certain customary events of default after which the Debentures may be declared immediately due and payable, including certain types of bankruptcy or insolvency events of default involving the Company and its subsidiaries, and in the event of a change of control or fundamental transaction as defined in the Debentures.
As of December 31, 2025, the Company had $10.3 million of principal outstanding, including $0.5 million of the “Fill-Up Amount” (as defined in the JGB Amendment (as defined below)) that was adjusted to the principal outstanding balance as of December 31, 2024. The Fill-Up Amount represents the shares issuable to adjust for stock price volatility between the date of the settlement agreement and the effective date of the resale registration statement registering such shares for issuance. The Fill-Up Amount shall be payable by adding each Holder’s pro rata share of the Fill-Up Amount to its Debenture. Refer to Note 4 (Investments and Fair Value Measurements), for fair value measurements and additional discussion. The activity for the year ended December 31, 2025 was as follows:
Debentures
Less:
Redemption payments of principal (4,875,000 )
JGB Amendment
On December 31, 2024, the Company entered into an amendment of the Debentures (the “JGB Amendment”) with the Holders thereof. Pursuant to the JGB Amendment, the parties agreed that (i) no amortization payment would be paid in December 2024; (ii) the maximum monthly amortization payments due between January 2025 and July 2025 would be reduced from $1.0 million per month to $0.5 million per month; (iii) the maximum monthly amortization payments due from August 2025 through repayment in full of the principal aggregate amount would be $1.4 million per month; (iv) the conversion price of the Debentures would be reduced from $120.00 to $16.20; and (v) the Debentures would become non-callable by the Company until August 2025. As consideration for the JGB Amendment, the Company issued to the Holders approximately 83,333 shares of its common stock (the “Private Placement Shares”).
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The Company accounted for the JGB Amendment as a debt extinguishment and recognized a loss on the extinguishment of the convertible debentures payable of $7.3 million, which was recorded in other income (expense) on the consolidated statement of operations as of December 31, 2024.
On January 3, 2025, the Holders had converted $0.4 million principal into approximately 22,000 shares of the Company’s common stock, at the conversion price of $16.20 per share (as adjusted for the reverse stock split).
High Trail Agreement & Amendment
The Company entered into a securities purchase agreement (the “Purchase Agreement”) with High Trail Special Situations LLC (the “Purchaser” or “High Trail”) on October 11, 2023, pursuant to which the Company agreed to issue and sell, for an aggregate $80.0 million in gross proceeds: