Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive and financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2020. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Based on the evaluation of our disclosure controls and procedures as of December 31, 2020, our principal executive and financial officer concluded that, as of such date, our disclosure controls and procedures were not effective at a reasonable assurance level as a result of the material weakness that existed in our internal control over financial reporting as described below.
Management's Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term as defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including our principal executive and financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
As the acquisition of Lineagen occurred in the third quarter of 2020, we excluded the internal control over financial reporting of Lineagen from the scope of our assessment of the effectiveness of the Company’s internal controls. This exclusion is in accordance with the general guidance issued by the Staff of the SEC that an assessment of a recently-acquired business may be omitted from our scope in the year of acquisition, if specified conditions are satisfied. Goodwill and net intangibles assets acquired were not excluded from our assessment. Lineagen's total net assets excluded from our assessment constituted approximately 1% of the Company’s total assets as of December 31, 2020, and Lineagen's revenues and net loss excluded from our assessment represented approximately 24% and 4%, respectively, of the Company’s total revenue and net loss for the year ended December 31, 2020.
Material Weaknesses in Internal Control over Financial Reporting
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility exists that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.
For the year ended December 31, 2020, our management assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013 Framework). Based on this assessment, our management determined that, as of December 31, 2020, there was a material weakness in our internal control environment over financial reporting because we did not have a sufficient number of resources to support the growth and complexity of our financial reporting requirements. This material weakness contributed to a material weakness in our control activities based on the criteria set forth in the 2013 Framework. Specifically, the design of certain controls did not adequately provide appropriate segregation of duties. The failure to maintain appropriate segregation of duties had a pervasive impact and as such, this deficiency resulted in a risk that could have impacted all financial statement account balances and disclosures. The material weaknesses did not result in any identified material misstatements to our financial statements, and there were no changes to previously released financial results.
Remediation of Material Weaknesses
Management has been actively engaged in developing and implementing a remediation plan to address the material weaknesses described above. The remediation efforts that are in process or expected to be implemented include the following:
• Management has engaged external consultants to assist with our internal accounting functions and further enhance our internal controls which has increased the number of personnel involved in financial reporting.
2
• We recently hired a new Chief Financial Officer and are in the process of hiring additional qualified individuals that will increase the number of personnel involved in financial reporting and the control environment.
The additional resources and procedures described above are designed to enable us to broaden the scope and quality of our internal review of underlying information related to financial reporting and to formalize and enhance our internal control procedures. While the implementation of improved controls and procedures is ongoing, we have determined that as of December 31, 2020 that the material weaknesses described above have not been fully remediated.
Changes in Internal Control over Financial Reporting
Other than the continuation of the implementation of measures described above, there were no material changes in our internal control over financial reporting during the quarter ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Attestation Report of the Registered Public Accounting Firm
This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm due to an exemption for “emerging growth companies.”
Item 9B. Other Information.
Forgiveness of Paycheck Protection Program Loan
As previously reported, on April 17, 2020, we received loan proceeds of approximately $1.77 million, or the PPP Loan, pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act administered by the U.S. Small Business Administration, or the SBA. The PPP Loan was evidenced by a promissory note, dated as of April 17, 2020, issued by East West Bank. We applied for forgiveness of the PPP Loan and on March 18, 2021, we received a notice from East West Bank confirming the SBA’s forgiveness of the PPP Loan together with all accrued interest in full, effective as of March 15, 2021.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The information required by this item and not set forth below will be set forth in our definitive proxy statement to be filed with the Securities and Exchange Commission in connection with our 2021 Annual Meeting of Stockholders, or the Proxy Statement, which is expected to be filed not later than 120 days after the end of our fiscal year ended December 31, 2020, and is incorporated in this Annual Report on Form 10-K by reference.
We have adopted a code of business conduct and ethics, or the Ethics Code, that applies to all our employees, officers and directors. This includes our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. The full text of the Ethics Code is available on our website at www.bionanogenomics.com. If we make any substantive amendments to the Ethics Code or grant any waiver from a provision of the Ethics Code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website or in a Current Report on Form 8-K. Information contained in, or that can be accessed through, our website is not incorporated by reference herein, and you should not consider information on our website to be part of this Annual Report on Form 10-K.
Item 11. Executive Compensation.
The information required by this item will be set forth in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this item will be set forth in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this item will be set forth in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
Item 14. Principal Accounting Fees and Services.
The information required by this item will be set forth in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
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PART IV
Item 15. Exhibits, Financial Statement Schedules.
(a) List the following documents filed as a part of the report:
(1) Financial statements
The response to this portion of Item 15 is set forth under Item 8 above.
(2) Financial statement schedule.
All schedules have been omitted because they are not required or because the required information is given in the financial statements or notes thereto set forth under Item 8 above.
(3) Exhibits
A list of exhibits file with this Annual Report or incorporated herein by reference can be found in the Exhibit Index below.
Exhibit Index
Exhibit
Number Description
2.1^ (1)
Agreement and Plan of Merger, dated August 21, 2020, by and among the Company, Alta Merger Sub, Inc., Lineagen, Inc. and Michael S. Paul, Ph.D.
3.1 Amended and Restated Certificate of Incorporation.
3.2 (2)
Amended and Restated Bylaws.
4.1 (3)
Form of Common Stock Certificat e .
4.2 (3)
Form of Warrant to Purchase Series D-1 Preferred Stock issued to Midcap Financial Trust.
4.3 (3)
Form of Warrant to Purchase Common Stock Issued to Underwriters.
4.4 (3)
Form of Warrant Certificate (included in Exhibit 4.8).
4.5 (3)
Form of Warrant Agent Agreement by and between the Registrant and American Stock Transfer & Trust Company LLC, as warrant agent.
4.6 (4)
Form of Warrant to Purchase Common Stock for Service Providers.
4.7 (5)
Registration Rights Agreement, dated March 14, 2019, between the Company and Aspire Capital Fund, LLC.
4.8 (5)
Registration Rights Agreement, dated March 14, 2019, by and among the Company and the Innovatus Investors.
4.9 (6)
Form of Warrant to Purchase Common Stock issued to Investors in October 2019 Public Offering.
4.10 Description of the Company’s Securities.
10.1 (3)
Fifth Amended and Restated Investors’ Rights Agreement, dated August 5, 2016 as amended.
10.2+ (3)
Bionano Genomics, Inc. Amended and Restated 2006 Equity Compensation Plan (the “2006 Plan”).
10.3+ (3)
Forms of grant notice, stock option agreement and notice of exercise under the 2006 Plan.
10.4+ (7)
Bionano Genomics, Inc. 2018 Equity Incentive Plan (the “2018 Plan”).
10.5+ (3)
Forms of grant notice, stock option agreement and notice of exercise under the 2018 Plan.
10.6+ (8)
Bionano Genomics, Inc. 2018 Employee Stock Purchase Plan.
10.7+ (3)
Form of Indemnification Agreement by and between the Registrant and each director and executive officer.
10.8+ (3)
Bionano Genomics, Inc. Non-Employee Director Compensation Policy.
10.9+ (3)
Credit and Security Agreement by and between the Registrant, Midcap Financial Trust and the Lenders listed on the Schedule of Lenders attached thereto, dated June 29, 2018.
10.10+ (3)
Employment Agreement by and between the Registrant and R. Erik Holmlin, Ph.D., dated November 7, 2017, as amended.
10.11+ (1)
Employment Agreement, effective as of September 1, 2020, by and between Christopher Stewart and the Company.
10.12+ (1)
Employment Agreement, effective as of August 31, 2020, by and between Alka Chaubey and the Company.
10.13+ (3)
Employment Agreement by and between the Registrant and Mark Oldakowski, dated November 7, 2017.
10.14 (3)
Loan and Security Agreement by and between the Registrant and Western Alliance Bank, dated March 8, 2016 .
5
Exhibit
Number Description
10.15 (3)
First Amendment to the Loan and Security Agreement by and between the Registrant and Western Alliance Bank, dated December 9, 2016.
10.16 (3)
Second Amendment to the Loan and Security Agreement by and between the Registrant and Western Alliance Bank, dated May 2, 2017.
10.17 (3)
Third Amendment to the Loan and Security Agreement by and between the Registrant and Western Alliance Bank, dated November 20, 2017.
10.18 (3)
Forbearance and Fourth Amendment to the Loan and Security Agreement by and between the Registrant and Western Alliance Bank, dated February 9, 2018.
10.19 (3)
Lease by and between the Registrant and The Irvine Company LLC, dated January 16, 2012.
10.20 (3)
First Amendment to the Lease by and between the Registrant and The Irvine Company LLC, dated September 10, 2013.
10.21 (3)
Second Amendment to the Lease by and between the Registrant and The Irvine Company LLC, dated July 1, 2015.
10.22 Third Amendment to the Lease by and between the Registrant and The Irvine Company LLC, dated December 19, 2019.
10.23 Fourth Amendment to the Lease by and between the Registrant and The Irvine Company LLC, dated February 15, 2021.
10.24# (3)
Master Services Agreement by and between the Registrant and Skorpios Technologies, Inc. (f/k/a Novati Technologies, Inc. and f/k/a SVTC Technologies, LLC), dated March 2, 2009, as amended.
10.25# (3)
Manufacturing Services Agreement by and between the Registrant and Paramit Corporation, dated February 18, 2015.
10.26# (3)
License Agreement by and between Princeton University and the Registrant, dated January 7, 2004.
10.27# (3)
First Amendment to the License Agreement by and between Princeton University and the Registrant, dated December 17, 2004.
10.28# (3)
Second Amendment to the License Agreement by and between Princeton University and the Registrant, dated February 25, 2010.
10.29# (3)
Third Amendment to the License Agreement by and between Princeton University and the Registrant, dated October 17, 2011.
10.30# (3)
Fourth Amendment License Agreement by and between Princeton University and the Registrant, dated February 9, 2012.
10.31# (3)
Agreement by and between the Registrant and Berry Genomics Co., Ltd. dated August 2, 2016.
10.32# (3)
Sublicense Agreement by and between the Registrant and Industry 3200 dated December 27, 2013.
10.33# (3)
License Agreement by and between the Registrant and Q Biotechnology CV dated May 1, 2014.
10.34# (3)
Amendment to Non-Exclusive Patent License Agreement by and between the Registrant and Q Biotechnology CV dated May 1, 2014.
10.35# (3)
License Agreement by and between the Registrant and New York University dated November 4, 2013.
10.36# (3)
Option and Sublicense Agreement by and between the Registrant and Pacific Biosciences of California, Inc. dated February 2, 2016.
10.37 (3)
Fifth Amendment to Loan and Security Agreement by and between the Registrant and Western Alliance Bank, dated June 13, 2018.
10.38# (3)
Amendment to Patent Sublicense Agreement by and between the Registrant and Industry 3200, dated June 28, 2018.
10.39 (5)
Common Stock Purchase Agreement, dated March 14, 2019, by and among the Company and the Innovatus Investors.
10.40 (5)
Loan and Security Agreement, dated March 14, 2019, by and among the Company, Innovatus Life Sciences Lending Fund I, LP and the Lenders listed on Schedule 1.1 thereto.
10.41 (9)
Waiver and First Amendment to Loan and Security Agreement, dated June 25, 2019, by and among the Company, Innovatus Life Sciences Lending Fund I, LP and East West Bank.
10.42 (10)
Second Amendment to Loan Agreement, dated March 6, 2020, by and among the Company, Innovatus Life Sciences Lending Fund I, LP and East West Bank.
10.43 ^(1)
Consent and Third Amendment to Loan and Security Agreement, dated August 21, 2020, by and among the Company, Lineagen, Inc., Innovatus Life Sciences Lending Fund I, LP and East West Bank.
10.44
Fourth Amendment to Loan and Security Agreement, dated December 30, 2020, by and among the Company, Lineagen, Inc., Innovatus Life Sciences Lending Fund I, LP and East West Bank.
10.45 (5)
Common Stock Purchase Agreement, dated March 14, 2019, by and among the Company and the Innovatus Investors.
10.46 (11)
At Market Issuance Sales Agreement, dated August 13, 2020, by and between the Company and Ladenburg Thalmann & Co. Inc.
10.47 (12)
Bionano Genomics, Inc. 2020 Inducement Plan.
10.48 (12)
Form of Stock Option Grant Notice and Stock Option Agreement under the Bionano Genomics, Inc. 2020 Inducement Plan.
22.1 (2)
Subsidiaries of the Registrant.
6
Exhibit
Number Description
23.1 Consent of BDO USA LLP, independent registered public accounting firm .
23.2 Consent of Deloitte & Touche LLP , independent registered public accounting firm.
24.1 Power of Attorney (included on signature page).
31.1* Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.2* Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
32.1* Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2* Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS XBRL Instance Document.
101.SCH XBRL Taxonomy Extension Schema Document.
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB XBRL Taxonomy Extension Label Linkbase Document.
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.
(1)
Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on November 13, 2020.
(2)
Incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on August 24, 2018.
(3)
Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-225970), as amended.
3)
Incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on November 21, 2018.
(5)
Incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on March 14, 2019.
(6)
Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-233828), as amended.
(7)
Incorporated by reference to the Registrant’s Registration Statement on Form S-8 (File No. 333-245764).
(8)
Incorporated by reference to the Registrant’s Registration Statement on Form S-8 (File No. 333-227073).
(9)
Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on August 8, 2019.
(10)
Incorporated by reference to the Registrant’s Annual Report on Form 10-K, filed with the SEC on March 10, 2020.
(11)
Incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on August 14, 2020.
(12)
Incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on August 24, 2020.
^
^
Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant hereby undertakes to furnish supplementally a copy of any omitted exhibit or schedule upon request by the SEC.
+
Indicates management contract or compensatory plan.
#
Confidential treatment has been granted with respect to certain portions of this exhibit. Omitted portions have been filed separately with the SEC.
*
This certification is deemed not filed for purpose of section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
Item 16. Form 10-K Summary
None
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized .
Company Name
Date: March 23, 2021 By: /s/ R. Erik Holmlin, Ph.D.
R. Erik Holmlin, Ph.D.
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints R. Erik Holmlin, Ph.D. , as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign this Annual Report on Form 10-K of Bionano Genomics, Inc., and any or all amendments thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
Signature Title Date
/s/ R. Erik Holmlin, Ph.D. Chief Executive Officer and Director
(Principal Executive Officer)
March 23, 2021
R. Erik Holmlin, Ph.D.
/s/ Christopher Stewart Chief Financial Officer
(Principal Financial and Accounting Officer)
March 23, 2021
Christopher Stewart
/s/ David L. Barker, Ph.D. Director March 23, 2021
David L. Barker, Ph.D.
/s/ Albert A. Luderer, Ph.D. Director March 23, 2021
Albert A. Luderer, Ph.D.
/s/ Yvonne Linney, Ph.D. Director March 23, 2021
Yvonne Linney, Ph.D.
/s/ Hannah Mamuszka Director March 23, 2021
Hannah Mamuszka
/s/ Christopher Twomey Director March 23, 2021
Christopher Twomey
/s/ Kristiina Vuori, M.D., Ph.D. Director March 23, 2021
Kristiina Vuori, M.D., Ph.D.
8