Bionano Genomics, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Consolidated Financial Statements Pages Reports of Independent Registered Public Accounting Firm (BDO USA, P.C.; San Diego, California; PCAOB ID# 243 ) 89 Consolidated Balance Sheets 91 Consolidated Statements of Operations 92 Consolidated Statements of Comprehensive Loss 93 Consolidated Statements of Stockholders’ Equity 94 Consolidated Statements of Cash Flows 95 Notes to Consolidated Financial Statements 97 88 Table of Contents 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, 2024 and 2023, 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, 2024 and 2023, 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. 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, 2024, the Company’s excess and obsolete inventory reserve balance was $3.8 million. Total net inventory as of December 31, 2024 was $13.3 million. 89 Table of Contents 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, CA March 31, 2025 90 Table of Contents BIONANO GENOMICS, INC. Consolidated Balance Sheets December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 9,173,000 $ 17,948,000 Investments 302,000 48,823,000 Accounts receivable, net 4,752,000 9,319,000 Inventory 11,121,000 22,892,000 Prepaid expenses and other current assets 3,141,000 6,019,000 Restricted investments 11,000,000 35,117,000 Total current assets 39,489,000 140,118,000 Restricted cash 400,000 400,000 Property and equipment, net 19,219,000 23,345,000 Operating lease right-of-use assets 1,804,000 5,633,000 Finance lease right-of-use assets 3,299,000 3,503,000 Intangible assets, net 9,705,000 33,974,000 Other long-term assets 2,754,000 7,431,000 Total assets $ 76,670,000 $ 214,404,000 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 6,962,000 $ 10,384,000 Accrued expenses 5,641,000 8,089,000 Contract liabilities 1,128,000 783,000 Operating lease liability 2,991,000 2,163,000 Finance lease liability 260,000 272,000 Purchase option liability (at fair value) — 8,534,000 Convertible debentures and High Trail notes payable (at fair value) 20,362,000 69,803,000 Total current liabilities 37,344,000 100,028,000 Operating lease liability, net of current portion 145,000 3,590,000 Finance lease liability, net of current portion 3,539,000 3,585,000 Contingent consideration — 10,890,000 Long-term contract liabilities 267,000 154,000 Total liabilities $ 41,295,000 $ 118,247,000 Commitments and contingencies (Note 11) Stockholders’ equity: Preferred stock, $ 0.0001 par value; 10,000,000 shares authorized and no shares issued or outstanding as of December 31, 2024 and 2023 — — Common stock, $ 0.0001 par value, 400,000,000 shares authorized at December 31, 2024 and 2023; 1,865,400 and 762,533 shares issued and outstanding at December 31, 2024 and 2023, respectively — — Additional paid-in capital 728,573,000 677,342,000 Accumulated deficit ( 693,225,000 ) ( 581,208,000 ) Accumulated other comprehensive income 27,000 23,000 Total stockholders’ equity 35,375,000 96,157,000 Total liabilities and stockholders’ equity $ 76,670,000 $ 214,404,000 See accompanying notes to the consolidated financial statements. 91 Table of Contents BIONANO GENOMICS, INC. Consolidated Statements of Operations Years Ended December 31, 2024 2023 Revenue: Product revenue $ 27,008,000 $ 26,727,000 Service and other revenue 3,768,000 9,389,000 Total revenue 30,776,000 36,116,000 Cost of revenue: Cost of product revenue 28,449,000 20,415,000 Cost of service and other revenue 1,947,000 6,135,000 Total cost of revenue 30,396,000 26,550,000 Operating expenses: Research and development 24,803,000 54,032,000 Selling, general and administrative 51,855,000 92,758,000 Goodwill impairment — 77,280,000 Intangible assets and other long-lived assets impairment 19,683,000 — Restructuring costs 8,022,000 741,000 Total operating expenses 104,363,000 224,811,000 Loss from operations ( 103,983,000 ) ( 215,245,000 ) Other income (expense): Interest income 2,101,000 3,311,000 Other expense ( 10,102,000 ) ( 20,497,000 ) Total other expense ( 8,001,000 ) ( 17,186,000 ) Loss before income taxes ( 111,984,000 ) ( 232,431,000 ) Provision for income taxes ( 33,000 ) ( 62,000 ) Net loss $ ( 112,017,000 ) $ ( 232,493,000 ) Net loss per share, basic and diluted $ ( 88.13 ) $ ( 408.60 ) Weighted-average common shares outstanding, basic and diluted 1,271,000 569,000 See accompanying notes to the consolidated financial statements. 92 Table of Contents BIONANO GENOMICS, INC. Consolidated Statements of Comprehensive Loss Years Ended December 31, 2024 2023 Net Loss: $ ( 112,017,000 ) $ ( 232,493,000 ) Other comprehensive income (loss): Unrealized gain on investment securities 11,000 1,082,000 Foreign currency translation adjustments ( 7,000 ) 65,000 Other comprehensive income $ 4,000 $ 1,147,000 Total comprehensive loss $ ( 112,013,000 ) $ ( 231,346,000 ) See accompanying notes to the consolidated financial statements. 93 Table of Contents BIONANO GENOMICS, INC. Consolidated Statements of Stockholders’ Equity Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Common Stock Shares Amount Balance at January 1, 2023 495,300 $ — $ 599,239,000 $ ( 348,715,000 ) $ ( 1,124,000 ) $ 249,400,000 Stock option exercises 100 — 23,000 — — 23,000 Stock-based compensation expense — — 15,178,000 — — 15,178,000 Issue common stock, net of issuance costs 208,500 — 56,313,000 — — 56,313,000 Issue stock for employee stock purchase plan 500 — 108,000 — — 108,000 Issuance of common stock due to the vesting of restricted stock units, net of shares withheld to cover taxes — — ( 61,000 ) — — ( 61,000 ) Issuance of common stock for High Trail convertible notes payable 58,200 — 6,542,000 6,542,000 Net loss — — — ( 232,493,000 ) — ( 232,493,000 ) Other comprehensive loss — — — — 1,147,000 1,147,000 Balance at December 31, 2023 762,600 $ — $ 677,342,000 $ ( 581,208,000 ) $ 23,000 $ 96,157,000 Stock-based compensation expense — — 9,736,000 — — 9,736,000 Issue common stock and warrants, net of issuance costs 968,600 — 41,481,000 — — 41,481,000 Issue stock for warrant exercises 133,500 — 4,000 — — 4,000 Issue stock for employee stock purchase plan 500 — 13,000 — — 13,000 Issuance of common stock due to the vesting of restricted stock units, net of shares withheld to cover taxes 200 — ( 3,000 ) — — ( 3,000 ) Net loss — — — ( 112,017,000 ) — ( 112,017,000 ) Other comprehensive income — — — — 4,000 4,000 Balance at December 31, 2024 1,865,400 $ — $ 728,573,000 $ ( 693,225,000 ) $ 27,000 $ 35,375,000 See accompanying notes to the consolidated financial statements. 94 Table of Contents BIONANO GENOMICS, INC Consolidated Statements of Cash Flows Years Ended December 31, 2024 2023 Operating activities: Net loss $ ( 112,017,000 ) $ ( 232,493,000 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization expense 14,022,000 13,708,000 Goodwill impairment — 77,280,000 Inventory write-offs 7,231,000 — Amortization of financing lease right-of-use asset 204,000 204,000 Accretion of interest on securities ( 1,316,000 ) ( 539,000 ) Net realized loss on investments 14,000 23,000 Non-cash lease expense ( 122,000 ) 56,000 Gain on lease modification ( 73,000 ) — Stock-based compensation 9,736,000 15,178,000 Cost of leased equipment sold to customer 361,000 382,000 Change in fair value of contingent consideration ( 10,890,000 ) ( 1,462,000 ) Change in fair value of convertible debentures, convertible notes payable and option liability ( 8,118,000 ) ( 575,000 ) Loss on issuance of convertible debentures 1,890,000 18,827,000 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 — Disposal of property and equipment 1,404,000 — Contingent consideration cash payment in excess of acquisition-date fair value — ( 1,000,000 ) Changes in operating assets and liabilities Accounts receivable 4,139,000 ( 2,296,000 ) Inventory ( 587,000 ) ( 4,150,000 ) Prepaid expenses and other current assets 1,583,000 1,213,000 Other assets 4,678,000 ( 5,020,000 ) Accounts payable ( 3,420,000 ) ( 1,995,000 ) Accrued expenses and contract liabilities ( 1,992,000 ) ( 2,522,000 ) Net cash used in operating activities ( 68,922,000 ) ( 125,181,000 ) Investing activities: Purigen acquisition, return of purchase consideration from escrow — 96,000 Purchases of property and equipment ( 103,000 ) ( 1,691,000 ) Purchase of available for sale securities ( 233,021,000 ) ( 111,264,000 ) Sale and maturities of available for sale securities 306,963,000 137,017,000 Net cash provided by investing activities 73,839,000 24,158,000 Financing activities: Principal payments of financing lease liability ( 58,000 ) ( 47,000 ) Proceeds from sale of common stock and warrants 44,433,000 57,697,000 Offering expenses on sale of common stock and warrants ( 2,953,000 ) ( 1,444,000 ) 95 Table of Contents Years Ended December 31, 2024 2023 Proceeds from sale of common stock under employee stock purchase plan 11,000 107,000 Proceeds from warrant and option exercises 4,000 23,000 Proceeds from issuance of convertible debentures 18,000,000 80,000,000 Payments on High Trail notes ( 61,000,000 ) ( 9,000,000 ) Payments on convertible debentures ( 5,000,000 ) — Debt issuance costs on sale of convertible debentures ( 1,747,000 ) ( 4,521,000 ) Payments of retirement fees for redemption of High Trail notes ( 5,375,000 ) — Contingent consideration milestone payment — ( 9,000,000 ) Net cash provided by (used in) financing activities ( 13,685,000 ) 113,815,000 Effect of exchange rates on cash and cash equivalents and restricted cash ( 7,000 ) 65,000 Net increase (decrease) in cash and cash equivalents and restricted cash ( 8,775,000 ) 12,857,000 Cash and cash equivalents and restricted cash at beginning of period 18,348,000 5,491,000 Cash and cash equivalents and restricted cash at end of period $ 9,573,000 $ 18,348,000 Reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the total amounts reported on the consolidated statements of cash flows Cash and cash equivalents 9,173,000 17,948,000 Restricted cash 400,000 400,000 Total cash and cash equivalents and restricted cash at end of period $ 9,573,000 $ 18,348,000 Supplemental disclosure of cash flow information Cash paid for interest $ 10,653,000 $ 1,648,000 Cash paid for operating lease liabilities $ 2,754,000 $ 2,586,000 Supplemental disclosure of non-cash financing and investing activity Transfer of instruments and servers from inventory into property and equipment, net $ 5,291,000 $ 10,979,000 Property and equipment included in accounts payable $ — $ 6,000 Debt issuance costs included in accounts payable $ — $ 150,000 Conversion of High Trail convertible notes payable into common stock at fair value $ — $ 6,542,000 Accrued liability for fees to be paid in common stock $ 1,584,000 $ — Non-cash Fill-Up Amount 472,000 — See accompanying notes to the consolidated financial statements. 96 Table of Contents 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. 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, 2024, the Company had approximately $ 9.2 million in cash and cash equivalents, $ 0.3 million in short-term investments, $ 11.4 million in restricted cash and cash equivalents and restricted short-term investments, and working capital of $ 2.1 million. 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, 2024 the Company had $ 15.5 million of principal outstanding under the Debentures (see Note 9 (Debt) to our consolidated financial statements) and an accumulated deficit of $ 693.2 million. In 2024, the Company used $ 68.9 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 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, 2024, 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, fair value of contingent consideration, the recoverability of long-lived assets, fair value of reporting units, 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. 97 Table of Contents Reverse Stock Splits On August 4, 2023 and 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-10 and 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 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. 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. 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. 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, such plans are intended to decrease expenses and maintain a streamlined organization to support its 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 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 it expects to reduce 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 has 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) for additional information. Business Combinations The Company accounts for its acquisitions using the acquisition method of accounting pursuant to Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). There were no acquisitions during the years ended December 31, 2024 and 2023. Under ASC 805, the tangible and identifiable intangible assets acquired and liabilities assumed in a business combination are recorded based on their estimated fair values as of the acquisition date. Any excess purchase price over the estimated fair value assigned to the tangible and identifiable intangible assets acquired and liabilities assumed is recorded to goodwill. The Company estimates the fair value of identifiable intangible assets acquired with the assistance of independent valuations that use information and assumptions provided by the Company’s management. Under ASC 805, acquisition-related transaction costs (such as advisory, legal, valuation, other professional fees) are expensed in the statements of operations in the periods incurred. 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. 98 Table of Contents Restricted Cash and Investments As of December 31, 2024 and 2023, 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, 2024, restricted 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. 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. 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. 99 Table of Contents Accounts Receivable and Allowance for Credit Losses December 31, 2024 December 31, 2023 December 31, 2022 Accounts receivable, net: Accounts receivable, trade $ 4,909,000 $ 9,802,000 $ 7,315,000 Less allowance for credit losses ( 157,000 ) ( 483,000 ) ( 293,000 ) $ 4,752,000 $ 9,319,000 $ 7,022,000 Changes to the allowance for credit losses from January 1, 2023 to December 31, 2024 were as follows: Allowance for Credit Losses Balance as of January 1, 2023 $ ( 293,000 ) Provision for expected credit loss ( 227,000 ) Write-offs 37,000 Balance as of January 1, 2024 ( 483,000 ) Provision for expected credit loss ( 9,000 ) Write-offs 335,000 Balance as of December 31, 2024 $ ( 157,000 ) 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. 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, 2024, there was one customer with a 10 % concentration in the Company’s total accounts receivable balance. As of December 31, 2023, no customers met or exceeded 10% 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, 2024 2023 Inventory: Raw materials $ 6,715,000 $ 7,567,000 Work in process 2,349,000 9,790,000 Finished goods 4,212,000 10,245,000 $ 13,276,000 $ 27,602,000 Inventories current $ 11,121,000 $ 22,892,000 Inventories non-current (included in other long-term assets) $ 2,155,000 $ 4,710,000 100 Table of Contents 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, 2024, the Company’s excess and obsolete inventory reserve balance was $ 3.8 million. 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 $ 1.4 million as of December 31, 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 depreciation expense by $ 1.8 million for the fiscal year 2024. 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 material disposals of internal-use software were recorded in the year ended December 31, 2023. 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 is 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 (other than goodwill), that indicates the carrying value of any such asset may not be recoverable, the Company will perform an impairment analysis. A long-lived asset (other than goodwill) 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. 101 Table of Contents 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. 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. 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 an impairment loss of $ 0.4 million and $ 0.2 million, respectively. 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 . 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. 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. 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. During the year ended December 31, 2023, the Company experienced a triggering event that required an evaluation of our asset groups for impairment. The Company performed a recoverability test and concluded there was sufficient cushion related to the cash flows of each of our asset groups. No impairment losses on long-lived assets were recorded during the year ended December 31, 2023. Substantially all of the Company’s long-lived assets are located in the U.S. 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 102 Table of Contents 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. Goodwill Goodwill was fully impaired as of December 31, 2023. Changes to goodwill from January 1, 2023 to December 31, 2023 were as follows: Goodwill Balance as of January 1, 2023 77,289,000 Measurement period adjustments ( 9,000 ) Goodwill impairment ( 77,280,000 ) Balance as of December 31, 2023 $ — Goodwill arises when the purchase price of an acquired business exceeds the fair value of the identifiable net assets acquired, with such excess recorded as goodwill on the balance sheet. Goodwill is not subsequently amortized. Goodwill is reviewed for impairment annually (during the fourth quarter) or more frequently if indications of impairment exist. Goodwill is assigned to specific reporting units for purposes of impairment assessment. The Company has determined that it has a single operating segment and a single reporting unit. In testing goodwill for impairment, the Company will first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying value, then the Company will perform a quantitative impairment analysis by comparing the fair value of the reporting unit to the carrying value of the reporting unit, including goodwill. An impairment charge for goodwill is recognized for the amount by which the carrying value of the reporting unit exceeds its fair value, not to exceed the total goodwill allocated to the reporting unit. During the quarter ended September 30, 2023, the Company performed a qualitative assessment of goodwill impairment which included an evaluation of changes in industry, market and macroeconomic conditions as well as consideration of our financial performance and any significant trends, including a sustained decline in our stock price. Our qualitative assessment indicated that it is more likely than not that the fair value of the reporting unit was less than its carrying value as of September 30, 2023; therefore, we performed a quantitative impairment analysis. The Company determined the fair value of its reporting unit using a combination of the income and market approaches. The Company placed a 50 % weighting on the market and income approach methods. The determination of fair value using a market approach requires management to make significant assumptions related to the determination of an appropriate group of peer companies, and market revenue multiples from within the selected group of peer companies. Under the income approach, the Company uses a discounted cash flow method, or DCF, to estimate the fair value of a reporting unit. Estimates and assumptions used in the income approach included projected cash flows and a discount rate. Discount rates were determined using a weighted average cost of capital for risk factors specific to the Company and other market and industry data. Annual estimated cash flows and a terminal value are then discounted to their present value at an appropriate discount rate to obtain an indication of fair value. The discount rate utilized reflects estimates of required rates of return for investments that are seen as similar to an investment in the reporting unit. Because DCF analyses are based on management’s long-term financial projections and require significant estimates and judgments, the market approach is conducted in addition to the income approach in estimating the fair value of a reporting unit. Under the market approach, the Company uses both a Guideline Public Company Method and Guideline Transactions Method to estimate the fair value of equity and the business enterprise value of a reporting unit. The Guideline Public Company approach uses financial metrics from similar public traded companies to estimate fair value. The Guideline Transaction Method calculates fair value by analyzing the actual prices paid for recent mergers and acquisitions in the industry. The Company believes that the current methodology used in determining the fair value at its reporting unit represent its best estimates. In addition, the Company compares the aggregate fair value of the reporting unit to its overall market capitalization, including an estimated control premium based upon control premiums observed in comparable market transactions and other factors. During the quarter ended September 30, 2023, the carrying value of equity of the Company’s reporting unit exceeded its enterprise wide fair value of equity and the Company recognized a goodwill impairment charge, impairing goodwill of $ 77.3 million in full on the consolidated statements of operations. As of December 31, 2024 and 2023, the Company did not have a balance of goodwill on the consolidated balance sheets. 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 103 Table of Contents 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 Notes & Debentures Payable The Company elected to account for its convertible notes (High Trail Agreement) issued in October 2023 and 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 convertible notes and 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 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, 2024 and 2023. 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. 104 Table of Contents 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. 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 $ 2.0 million and $ 1.1 million during the years ended December 31, 2024 and 2023, 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, 2024 and 2023, 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 $ 0.7 million and $ 0.7 million during the years ended December 31, 2024 and 2023, 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 $ 0.9 million during the years ended December 31, 2024 and 2023, respectively. Remaining Performance Obligations As of December 31, 2024, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied was $ 1.4 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 80.3 % in 2025, 11.4 % in 2026 and 5.6 % in 2027 and 2.6 % in 2028 and thereafter. 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 $ 0.3 million and $ 0.4 million as 105 Table of Contents of December 31, 2024 and 2023, respectively. Warranty expense recorded in cost of goods sold totaled $ 0.2 million and $ 0.6 million during the years ended December 31, 2024 and 2023, 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 at the beginning and end of the period, as well as 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 $ 1.6 million and $ 1.4 million during the years ended December 31, 2024 and 2023, respectively, which was included in the contract liability balance at the end of the previous year. 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. 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. 106 Table of Contents 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. 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. 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 which include outstanding convertible debentures and High Trail notes 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 have been excluded from the computation of diluted net loss per share as they would be anti-dilutive to the net loss per share. For all periods presented, there is 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, 2024 2023 Common stock options 56,000 54,000 Common warrants 1,419,700 362,000 Convertible debentures and High Trail notes payable into common stock 955,000 355,000 RSUs 6,000 4,000 PSUs 480 480 Total 2,437,180 775,480 Recently Adopted Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Update, or ASU, 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses for all public entities, including public entities with a single reportable segment. On an annual and interim basis, entities are required to disclose significant segment expenses that are regularly provided to the CODM. The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted the new standard in the fourth quarter of 2024 which did not have a material impact on its consolidated financial statements. See Note 14 (Segment Reporting) for disclosures related to the Company’s segment reporting. Recently Issued Accounting Pronouncements 107 Table of Contents 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 rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on the Company’s consolidated financial statements and related disclosures. 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. 3. Revenue from Contracts with Customers Revenue by Source Years Ended December 31, 2024 2023 Instruments $ 8,043,000 $ 9,999,000 Consumables 12,773,000 11,157,000 Software 6,192,000 5,571,000 Total product revenue 27,008,000 26,727,000 Services and other 3,768,000 9,389,000 Total revenue $ 30,776,000 $ 36,116,000 Revenue by Geographic Location Years Ended December 31, 2024 2023 $ % $ % Americas $ 13,649,000 44.3 % $ 18,020,000 49.9 % EMEA 14,234,000 46.3 % 12,963,000 35.9 % Asia Pacific 2,893,000 9.4 % 5,133,000 14.2 % Total $ 30,776,000 100 % $ 36,116,000 100 % 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, Australia and India. For the years ended December 31, 2024 and 2023, sales in the United States represented 36 % and 44 % of revenues, respectively. During the year ended December 31, 2023, sales in China accounted for 10 % of revenues. No other countries represented greater than 10% of revenue during the years ended December 31, 2024 and 2023. 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 in the consolidated balance sheets: 108 Table of Contents December 31, 2024 Total Fair Value and Carrying Value on Balance Sheet Fair Value Measurement Category Level 1 Level 2 Level 3 Assets: U.S. treasuries classified as short-term investments 302,000 — 302,000 — Money market funds classified as cash equivalents $ 5,844,000 $ 5,844,000 $ — $ — U.S. treasuries classified as restricted investments 11,000,000 — 11,000,000 Liabilities: Convertible debentures payable $ 20,362,000 — — $ 20,362,000 December 31, 2023 Total Fair Value and Carrying Value on Balance Sheet Fair Value Measurement Category Level 1 Level 2 Level 3 Assets: Corporate notes/bonds 14,360,000 — 14,360,000 — U.S. treasuries 34,463,000 — 34,463,000 — Total investments: $ 48,823,000 $ — $ 48,823,000 $ — Money market funds classified as restricted investments $ 9,752,000 $ 9,752,000 $ — $ — Commercial paper classified as restricted investments 5,432,000 — 5,432,000 — U.S. treasuries classified as restricted investments 29,685,000 — 29,685,000 — Total restricted investments: $ 35,117,000 $ — $ 35,117,000 $ — Liabilities: Contingent consideration 10,890,000 — — 10,890,000 Convertible High Trail notes payable 69,803,000 — — 69,803,000 Purchase option liability 8,534,000 — — 8,534,000 Contingent Consideration Contingent consideration relates to the acquisitions of BioDiscovery and 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. On October 2, 2023, the $ 10.0 million BioDiscovery milestone consideration was paid in full. 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. At 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 . The fair value of the Purigen contingent consideration as of December 31, 2023 was $ 10.9 million. The fair value of the Purigen milestones were reassessed on a quarterly basis using a probability weighted model and a Monte Carlo Simulation. Assumptions used to estimate the fair value of the milestones using a probability weighted model include the probability of achieving independent milestones, anticipated payment date and a discount rate of 13.2 % as of December 31, 2023. The Company determined the likelihood of each milestone payment which is then applied to the individual payments over the five-year milestone terms. The probability factors as of December 31, 2023 ranged from 9 % to 49 %. 109 Table of Contents For the second milestone, a Monte Carlo Simulation was performed to determine the likelihood that the milestone will be achieved to determine the milestone consideration payment. Assumptions include the projected units, revenue discount rates of 7 % and discount rates of 13.2 % as of December 31, 2023. 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 as of December 31, 2024 and December 31, 2023, respectively. The fair value was estimated using a lattice model. The key input assumptions utilized are summarized in the table below: Convertible Debentures Payable High Trail Convertible Notes Payable December 31, 2024 May 24, 2024 December 31, 2023 October 13, 2023 Expected volatility 100.00 % 86.5 % 80.20 % 74.30 % Risk-free interest rate 4.15 % 4.94 % 4.92 % 5.17 % Term to maturity (years) 1.33 1.76 0.80 1.47 Debt discount rate 19.70 % 17.60 % 17.11 % 18.00 % Equity discount rate 4.15 % 4.94 % 4.92 % 5.17 % 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 which was estimated to be $ 8.5 million at December 31, 2023. The outstanding amount of the High Trail Notes was redeemed on May 24, 2024, and the Purchase Option rights no longer exist. The terms used to estimate the fair value of the Subsequently Purchased Notes and warrants underlying the Purchase Option Liability (the “Subsequently Purchased Warrants”) as of December 31, 2023 are as follows: Subsequently Purchased Notes Subsequently Purchased Warrants December 31, 2023 October 13, 2023 December 31, 2023 October 13, 2023 Expected volatility 80.20 % 80.20 % 66.20 % 59.60 % Risk-free interest rate 4.46 % 5.17 % 3.80 % 4.60 % Term to maturity (years) 1.50 1.47 5.00 5.00 Dividend yield — % — % — % — % Exercise price — — $ 3.19 $ 3.19 Debt discount rate 16.60 % 17.11 % — % — % Equity discount rate 4.46 % 5.17 % — % — % Changes in estimated fair value of contingent consideration liability, convertible debentures payable, convertible High Trail notes payable and option liability in the year ended December 31, 2024 are as follows: 110 Table of Contents Contingent Consideration Liability (Level 3 Measurement) Convertible Debentures Payable (Level 3 Measurement) Convertible High Trail Notes Payable (Level 3 Measurement) Option Liability (Level 3 Measurement) Balance as of January 1, 2024 $ 10,890,000 $ — $ 69,803,000 $ 8,534,000 Issuance of convertible debentures payable — 19,890,000 — — Change in estimated fair value, recorded in selling, general and administrative expenses ( 10,890,000 ) — — — Change in estimated fair value, recorded in other income (expense), net — ( 2,341,000 ) ( 4,524,000 ) ( 3,474,000 ) Cash payments — — ( 61,000,000 ) — Cash payments on redemptions — ( 5,000,000 ) ( 5,374,000 ) (Gain)/loss on extinguishment of High Trail — — 1,095,000 ( 5,060,000 ) (Gain)/loss on extinguishment of convertible debentures payable — 7,341,000 — — Fill-up amount — 472,000 — — Balance as of December 31, 2024 $ — $ 20,362,000 $ — $ — Changes in estimated fair value of contingent consideration liability, convertible High Trail notes payable and option liability in the year ended December 31, 2023 is as follows: Contingent Consideration Liability (Level 3 Measurement) Convertible High Trail Notes Payable (Level 3 Measurement) Option Liability (Level 3 Measurement) Balance as of January 1, 2023 $ 22,352,000 $ — $ — Issuance of convertible High Trail notes payable and option liability — 89,063,000 9,763,000 Change in estimated fair value, recorded in selling, general and administrative expenses ( 1,462,000 ) — — Changes in estimated fair value, recorded in other income (expense), net — ( 3,718,000 ) ( 1,229,000 ) Conversions to common stock — ( 6,542,000 ) — Cash payments or redemptions ( 10,000,000 ) ( 9,000,000 ) — Balance as of December 31, 2023 $ 10,890,000 $ 69,803,000 $ 8,534,000 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, 2024 and December 31, 2023, 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. 111 Table of Contents As of December 31, 2024 and December 31, 2023, the Company held 1 and 15 securities, respectively, which have been in an unrealized loss position for a period of less than 12 months. As of December 31, 2024 and December 31, 2023, the Company held 0 and 2 securities, respectively, 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, 2024, the Company sold 18 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. Amounts are reclassified out of accumulated other comprehensive income into earnings using the specific identification method. During the year ended December 31, 2023, the Company had no sales of its available for sale securities Interest receivable as of December 31, 2024 was immaterial and as of December 31, 2023 was $ 0.3 million. 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, 2024 and December 31, 2023 was interest income related to the Company’s available for sale securities of $ 1.5 million and $ 3.3 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, 2024, the following table summarizes the amortized cost and the unrealized gains (losses) of the available for sale securities presented within investments: Remaining Contractual Maturity (in years) Amortized Cost Unrealized Gains Unrealized Losses Aggregate Estimated Fair Value U.S. treasuries Less than 1 301,000 1,100 ( 100 ) 302,000 Total maturity less than 1 year $ 301,000 $ 1,100 $ ( 100 ) $ 302,000 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 investments: Remaining Contractual Maturity (in years) Amortized Cost Unrealized Gains Unrealized Losses Aggregate Estimated Fair Value U.S. treasuries Less than 1 11,000,000 — — 11,000,000 Total maturity less than 1 year $ 11,000,000 $ — $ — $ 11,000,000 112 Table of Contents As of December 31, 2023, the following table summarizes the amortized cost and the unrealized gains (losses) of the available for sale securities presented within investments: Remaining Contractual Maturity (in years) Amortized Cost Unrealized Gains Unrealized Losses Aggregate Estimated Fair Value Corporate notes/bonds Less than 1 14,369,000 — ( 9,000 ) 14,360,000 U.S. treasuries Less than 1 34,459,000 4,000 — 34,463,000 Total maturity less than 1 year $ 48,828,000 $ 4,000 $ ( 9,000 ) $ 48,823,000 As of December 31, 2023, the following table summarizes the amortized cost and the unrealized gains (losses) of the available for sale securities presented within restricted investments: Remaining Contractual Maturity (in years) Amortized Cost Unrealized Gains Unrealized Losses Aggregate Estimated Fair Value Commercial paper Less than 1 $ 5,435,000 $ — $ ( 3,000 ) $ 5,432,000 U.S. treasuries Less than 1 29,682,000 5,000 ( 2,000 ) 29,685,000 Total maturity less than 1 year $ 35,117,000 $ 5,000 $ ( 5,000 ) $ 35,117,000 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 Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss U.S. treasuries 80,000 ( 100 ) — — 80,000 ( 100 ) Total $ 80,000 $ ( 100 ) $ — $ — $ 80,000 $ ( 100 ) As of December 31, 2024, there were no available-for-sale securities listed as restricted investments in an unrealized loss position. As of December 31, 2023, the following table summarizes available-for-sale securities in an unrealized loss position: Less Than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Corporate Notes/Bonds $ 2,362,000 $ ( 5,000 ) $ 10,001,000 $ ( 4,000 ) $ 12,363,000 $ ( 9,000 ) Total $ 2,362,000 $ ( 5,000 ) $ 10,001,000 $ ( 4,000 ) $ 12,363,000 $ ( 9,000 ) As of December 31, 2023, the following table summarizes available-for-sale securities listed as restricted investments in an unrealized loss position: Less Than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Commercial paper $ 5,432,000 $ ( 3,000 ) $ — $ — $ 5,432,000 $ ( 3,000 ) U.S. treasuries 11,789,000 ( 2,000 ) — — 11,789,000 ( 2,000 ) Total $ 17,221,000 $ ( 5,000 ) $ — $ — $ 17,221,000 $ ( 5,000 ) 113 Table of Contents 5. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: December 31, 2024 December 31, 2023 Prepayment to supplier $ 60,000 $ 1,000 Prepaid insurance 703,000 907,000 Interest receivable 22,000 342,000 Prepaid employee related expenses 60,000 94,000 Internal use cloud computing arrangement software development costs 154,000 1,430,000 Prepaid software subscriptions 824,000 2,075,000 Prepaid marketing expenses — 194,000 Other current assets 1,318,000 976,000 Total $ 3,141,000 $ 6,019,000 6. Property and Equipment, Net Property and equipment, net consist of the following: December 31, 2024 December 31, 2023 Computer and office equipment $ 2,723,000 $ 2,984,000 Lab equipment 17,674,000 18,438,000 Service equipment placed at customer sites 22,359,000 17,254,000 Leasehold improvements 3,325,000 3,746,000 Total property and equipment, gross 46,081,000 42,422,000 Less accumulated depreciation and amortization ( 26,862,000 ) ( 19,077,000 ) Total property and equipment, net $ 19,219,000 $ 23,345,000 For the years ended December 31, 2024 and 2023, the Company recorded depreciation expense of $ 4.9 million and $ 6.5 million, respectively, which includes an allocation to cost of revenue of $ 2.8 million and $ 3.5 million respectively. 7. Intangible Assets, Net Intangible assets that are subject to amortization consisted of the following at December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade name $ 1,000,000 $ ( 642,000 ) $ 358,000 $ 2,630,000 $ ( 1,078,000 ) $ 1,552,000 Customer relationships 3,000,000 ( 1,925,000 ) 1,075,000 4,150,000 ( 2,002,000 ) 2,148,000 Developed technology 22,800,000 ( 14,630,000 ) 8,170,000 41,600,000 ( 11,428,000 ) 30,172,000 Intangibles, net $ 26,800,000 $ ( 17,197,000 ) $ 9,603,000 $ 48,380,000 $ ( 14,508,000 ) $ 33,872,000 114 Table of Contents The Company recorded amortization expense for intangible assets of $ 6.6 million and $ 7.2 million for the years ended December 31, 2024 and 2023 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. S ee 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, 2024, trade name intangibles, customer relationships, and developed technology have weighted average remaining amortization periods of 1.67 years each. Intangible assets not subject to amortization totaled $ 0.1 million at December 31, 2024 and December 31, 2023 and related to the Company’s domain name. Future amortization expense of intangible assets is as follows: 2025 $ 5,360,000 2026 4,243,000 Total $ 9,603,000 8. Accrued Expenses Accrued expenses consist of the following: December 31, 2024 December 31, 2023 Compensation expenses* $ 1,983,000 $ 5,030,000 Taxes payable 729,000 1,099,000 Insurance 16,000 512,000 Accrued liability for fees to be paid in common stock 1,584,000 — Professional fees and royalties 402,000 387,000 Warranty liabilities 276,000 391,000 Accrued clinical study fees — 138,000 Customer deposits 17,000 17,000 Other 634,000 515,000 Total $ 5,641,000 $ 8,089,000 *Compensation expenses include restructuring costs of $ 0.6 million as of December 31, 2024. Refer to Note 11 (Commitments and Contingencies). 9. Debt JGB Debentures On May 24, 2024, the Company entered into a securities purchase agreement with certain 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: • 0.04 million 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 & High Trail 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 % per annum payable monthly on the last business day of each calendar month. As of December 31, 2024, the Company has paid the Holders $ 1.2 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 115 Table of Contents 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. 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 is recorded in other income (expense) on the consolidated statement of operations. The Company incurred debt issuance costs of $ 1.4 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 as amended on December 31, 2024 (see “JGB Amendment” below), may request 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, 2024. 2025 10,375,000 2026 5,097,000 Total $ 15,472,000 The Company may redeem the Debentures, subject to certain Equity Conditions (as defined in the Debentures), at any time after August 2025, as amended on December 31, 2024 (see “JGB Amendment” below) 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, 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 $ 120.00 per share of common stock, and as amended on December 31, 2024 (see “JGB Amendment” below), at a conversion price of $ 16.20 . 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, 2024, the Company had $ 15.5 million of principal outstanding, including $ 0.5 million of the “Fill-Up Amount” (as defined in the Debenture Amendment that 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) under the Debentures reported at fair value of $ 20.4 million (refer to Note 4 (Investments and Fair Value Measurements), for fair value measurements and additional discussion) and activity broken out as follows: Debentures Principal balance, January 1, 2024 $ — Issuance of convertible debentures 20,000,000 Less: Conversions — Redemption payments of principal ( 5,000,000 ) Fill-up amount 472,000 Debentures principal balance, December 31, 2024 $ 15,472,000 116 Table of Contents JGB Amendment On December 31, 2024, the Company entered into an amendment of the Debentures (the “JGB Amendment”) with the Holders. 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 JGB Amendment, the Company issued to the Holders approximately 83,000 shares of its common stock (the “Private Placement Shares”). 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 is recorded in other income (expense) on the consolidated statement of operations. 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 The Company entered into a securities purchase agreement (the “Purchase Agreement”) with High Trail Special Situations LLC (the “Purchaser”) on October 11, 2023, pursuant to which the Company agreed to issue and sell, for an aggregate $ 80.0 million in gross proceeds: (i) in a registered offering by the Company directly to the Purchaser (the “Offering”) (a) $ 45.0 million aggregate principal amount of senior secured convertible notes payable due 2025 (the “Registered Notes”) initially convertible by the Purchaser at a price of $ 171.60 into 0.3 million shares of the Company’s common stock and (b) warrants to purchase up to 0.4 million shares of the Company’s common stock at a price of $ 191.40 per share (the “Registered Warrants”), and (ii) in a concurrent private placement to the Purchaser (the “Private Placement”), $ 35.0 million aggregate principal amount of senior secured convertible notes payable due 2025 initially convertible at a price of $ 171.60 into 0.2 million shares of the Company’s common stock (the “Private Placement Notes” and together with the Registered Notes, the “Notes”). The Company also granted the Purchaser an Option to purchase up to an additional $ 25.0 million aggregate principal amount of Private Placement Notes, in their sole discretion, initially convertible into shares of the Company’s common stock (the “Subsequently Purchased Notes”) at a conversion price equal to $1,000 divided by a fraction (1) whose numerator is $1,000; and (2) whose denominator is the sum of (a) $ 0.09375 and (b) the greater of (x) the Nasdaq Minimum Price (as defined in Nasdaq Rule 5635(d)) on the date of the Purchase Agreement and (y) the Nasdaq Minimum Price (as defined in Nasdaq Rule 5635(d)) on the date of the issuance of the Subsequently Purchased Notes) Notice per the terms of the Notes and warrants (the “Private Placement Warrants” and together with the Registered Warrants, the “Warrants”) to purchase up to 0.1 million shares of the Company’s common stock at an exercise price calculated as the greater of (x) 115 % of the Nasdaq Minimum Price on the date of the applicable Subsequently Purchased Securities Notice is delivered and (y) the Nasdaq Minimum Price on the date of signing the Purchase Agreement, per the terms, in a subsequent private placement on the same terms as the Notes and the Registered Warrants (any such subsequent private placement, a “Subsequent Private Placement”). The $ 35.0 million proceeds of the Private Placement Notes was deposited into a restricted account subject to an account control agreement that only permitted funds to be released once per calendar month upon the satisfaction of certain funding conditions specified in the Notes. The Offering and Private Placement closed on October 13, 2023. The Company’s net proceeds from the sale of the Notes and the Registered Warrants were approximately $ 75.2 million, after deducting the Offering and Private Placement expenses and placement agent fees. As of December 31, 2023, the Company had aggregate principal outstanding under the Notes of $ 61.0 million, reported at fair value of $ 20.4 million (refer to Note 4 (Investments and Fair Value Measurements), for fair value measurements and additional discussion) and broken out as follows: 117 Table of Contents Notes Principal balance, October 13, 2023 $ 80,000,000 Less: Conversions 10,000,000 Partial redemption payments of principal 9,000,000 Notes principal balance, December 31, 2023 $ 61,000,000 The High Trail Notes were secured by a first-priority lien, subject only to certain permitted liens, on substantially all of the Company’s and subsidiaries’ (other than certain foreign subsidiaries) tangible and intangible assets, whether now owned or hereafter acquired (other than certain excluded property) and included a pledge of the stock of the Company’s subsidiaries and a portion of the stock of foreign subsidiaries. All payments due under the High Trail Notes ranked (i) pari passu with all Other Notes, (ii) effectively senior to all unsecured obligations of the Company to the extent of the value of the collateral securing the High Trail Notes for so long as the collateral secured the High Trail Notes in accordance with the terms and (iii) senior to any subordinated indebtedness. The Company recorded the High Trail Notes at their fair value at issuance of $ 89.1 million, per the fair value option under ASC 825 (refer to Note 4 (Investments and Fair Value Measurements)) and will be measured on a recurring basis and adjusted through other income and expense. The Option was recorded as a liability at fair value at issuance of $ 9.8 million (refer to Note 4 (Investments and Fair Value Measurements)). The Warrants qualified for classification as equity instruments and were recorded at $ 0 in additional paid in capital, which represents the residual amount after allocation of proceeds to the High Trail Notes and option to purchase additional High Trail Notes (“Option”) at fair value. The Company recognized an initial loss on the issuance of the High Trail Notes and Option of $ 18.8 million for the difference between the combined fair value of the High Trail Notes and Option and proceeds from the transaction, which was recorded in Loss on High Trail Agreement within other income (expense) on the consolidated statement of operations. The Company incurred debt issuance costs of $ 4.8 million related to the Offering, which was charged to interest expense and recorded in other income (expense) in the consolidated statements of operations. Terms of Repayment The High Trail Notes were sold at 100 % of their principal amount and were repaid at 115 % of the principal amount (the “Repayment Price”). The High Trail Notes do not bear regular interest and mature on September 1, 2025 (the “Maturity Date”), unless earlier repurchased, redeemed or converted as previously described above. On the earlier to occur of (i) the date that no principal amount remains outstanding or (ii) the Maturity Date, the Company will be required to pay a retirement fee (the “Retirement Fee”) to the holders of the High Trail Notes equal to (x) with respect to the Registered Notes, the product of (a) $ 2.8 million multiplied by (b) a fraction, whose numerator is an amount equal to $ 45.0 million less the aggregate principal amount of such Registered Notes converted into shares of the Company’s common stock, and whose denominator is $ 45.0 million; and (y) with respect to any Subsequently Purchased Notes, an amount equal to the product of (a) 6.25 % of the initial principal amount of such Subsequently Purchased Notes multiplied by (b) a fraction, whose numerator is an amount equal to the initial principal amount of such Subsequently Purchased Notes less the aggregate principal amount of such Subsequently Purchased Notes converted into shares of the Company’s common stock, and whose denominator is an amount equal to the initial principal amount of such Subsequently Purchased Notes. In connection with the redemption of the Private Placement Notes in February 2024, the Company paid a Retirement Fee of $ 3.2 million. Conversion The holder was able to convert the principal amount of the High Trail Notes in whole at any time prior to maturity, or in part in denominations of $1,000, per the terms. The holder’s ability to convert the High Trail Notes is limited if after such conversion the holder and its affiliates and attribution parties beneficially own an aggregate of 4.99 % of the Company’s common stock, which percentage may be changed at the holders’ election to a higher or lower percentage not in excess of 9.99 % upon 61 days’ notice subject to the terms of the High Trail Notes. The Company could have required conversion of all, but not less than all, of the High Trail Notes upon occurrence of a forced conversion trigger and if certain equity conditions are satisfied on date of notice, pursuant to the terms of the High Trail Notes. A forced conversion trigger occurs if the last reported sale price of the Company’s common stock exceeds 175 % of the conversion price on at least 20 volume-weighted average price (“VWAP”) trading days in any 30 consecutive trading day period. The High Trail Notes contain standard antidilution provisions which adjust the conversion rate upon stock dividends, splits and combinations, certain events which include the distribution of rights, options and warrants, spin-offs and other distributed property, cash dividends or distributions, and tender or exchange offers. The Company could have increased the conversion rate 118 Table of Contents on any portion of the High Trail Notes for any period of time (which decreases the conversion price) if the Board of Directors determined in good faith that such an increase is in the best interest of the Company. As of December 31, 2023, the holder had converted $ 10.0 million principal into 0.1 million shares of the Company’s common stock, at the conversion price of $ 171.60 per share. Redemption The holders had the option to partially redeem a portion of the High Trail Notes on the first day of each month beginning on November 1, 2023, (except for March 1, 2024, and subject to a delay of the April 2024 partial redemption date to April 20, 2024), at the Repayment Price, for an amount not to exceed $ 5.2 million, which amount may be increased upon agreement of both parties. The Company had the right to redeem all of the then outstanding principal amount of the High Trail Notes under certain circumstances beginning on the 30th day following the date that the Resale Registration Statement became effective, and the holders of the High Trail Notes could have required the Company to redeem the High Trail Notes upon a fundamental change, which includes a change in control, liquidation provisions or if the Company’s common stock ceases to be listed on any eligible exchange (as defined in the High Trail Notes), in each case for a redemption price set forth in the High Trail Notes. If an event of default occurs (other than certain bankruptcy provisions which require automatic acceleration) and has not been waived by the holder, the holder could have declared the High Trail Notes due and payable for cash in an amount equal to the event of default acceleration amount as set forth in the High Trail Notes. Events of default include, among other things, non-timely Form 10-Q and 10-K Exchange filings, “Big R” restatement for any previously filed 10-Q or 10-K and ceasing to satisfy the eligibility requirement under Section I.A. of General Instruction to Form S-3. If an event of default occurred, default interest of 15 % would have automatically accrued on the principal amount outstanding until cured and interest is paid, as specified in the High Trail Notes. On January 1, 2024, and February 1, 2024, the holders redeemed an aggregate of $ 9.0 million of principal, at the Repayment Price of $ 10.4 million. In February 2024, in connection with the Letter Agreement and Amendment, the Company redeemed an aggregate of $ 27.7 million of High Trail Notes for a total redemption payment of approximately $ 31.9 million, together with a retirement fee of approximately $ 3.2 million. Following the redemptions the Company has $ 24.3 million of High Trail Notes outstanding, see “Debt Financing Amendment” below. Covenants and Restrictions The High Trail Notes subjected the Company to various affirmative and negative covenants, and events of default that, among other things, restrict, subject to certain exceptions, the ability of the Company and its subsidiaries to incur or amend indebtedness, grant liens on their assets, make investments, make distributions or pay certain dividends, transfer assets, and place limitations or requirements on business combination events. The Company must comply with certain financial maintenance covenants and shall have at all times a minimum liquidity amount which is tested monthly and must maintain a minimum cash spend availability tested quarterly. As long as the High Trail Notes remain outstanding, the Company was required to maintain a share reserve and a required funding program, the Company and each subsidiary is prohibited from directly or indirectly entering into any variable rate transactions subject to certain exclusions, the Company was subject to certain restricted periods during which it could not issue equity or equity linked securities subject to certain exclusions, and as long as any High Trail Notes or Warrants remained outstanding the Company could not issue any Notes or Warrants or other securities which would cause a breach or default, without the consent of the required holders. The High Trail Notes contained provisions for liquidated damages, and required the Company to reimburse the holder for out-of-pocket costs incurred in connection their reliance on receipt of shares as applicable, if the Company fails to timely deliver shares upon conversion of the High Trail Notes or exercise of the Warrants or fails to deliver certificates with removal of restrictive legend when required, and in the event the Company failed to reserve the required number of authorized but unissued shares. Warrants In connection with the High Trail Notes, the Company issued Warrants to purchase up to 0.4 million shares of the Company’s common stock at an exercise price of $ 191.40 per share and a term of 5 years from the date of issuance. The Warrants qualified for classification as equity instruments, and as discussed above, were recorded in additional paid in capital at $ 0 , which represents the residual amount after allocation of proceeds to the High Trail Notes and Option at fair value (refer to Note 10 (Stockholders’ Equity and Stock-Based Compensation)). High Trail Amendment On February 27, 2024, the Company entered into a letter agreement (the “Letter Agreement”) and an Amendment to the Registered Note (the “Amendment”), with the Purchaser of the High Trail Notes which provided for, among other things, the following: 119 Table of Contents • Reduction of the minimum available liquidity covenant from $ 50.0 million to $ 25.0 million; • Reduction of the restricted cash covenant from $ 35.0 million to the amount equal to the sum of (i) the outstanding principal amount of the Registered Notes plus (ii) approximately $ 0.7 million, which will be further reduced as the remaining principal on the Registered Notes are retired; • Cancellation of the March 2024 partial redemption payment and delay of the April 2024 partial redemption payment; • Redemption of the outstanding $ 17.0 million balance of the Private Placement Notes at a redemption price of 115 % for a total redemption payment of approximately $ 19.6 million; • Redemption of approximately $ 10.7 million of the Registered Notes at a redemption price of 115 % for a total redemption payment of approximately $ 12.3 million; and • Increase of $ 1.0 million to the Retirement Fee (as defined in the Notes) of the Private Placement Notes to $ 3.2 million payable concurrently with redemptions of the Initial Private Placement Note. Immediately following the redemptions above, there was approximately $ 24.3 million in aggregate principal amount of the Registered Notes outstanding. High Trail Redemption Agreement On May 23, 2024, in connection with the JGB Debentures Offering, the Company entered into a redemption agreement with High Trail (the “HT Agreement”). Pursuant to the HT 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 Option 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 Notes. The Company recognized a loss on the extinguishment of the High Trail Note of $ 1.1 million, and a gain on the extinguishment of the Purchase Option (as defined in Note 11 (Commitments and Contingencies) to our consolidated financial statements) of $ 5.1 million, for a net gain of $ 4.0 million, which is recorded in other income (expense) on the consolidated statement of operations. As of December 31, 2024, the Company had no principal outstanding under the High Trail Notes (refer to Note 8 (Investments and Fair Value Measurements) to our consolidated financial statements), for fair value measurements and additional discussion) and activity broken out as follows: Principal balance, January 1, 2024 $ 61,000,000 Less: Conversions — Partial redemption of principal 18,000,000 Redemption payment of principal 43,000,000 Total $ — In addition to redeeming $ 15.3 million and $ 27.7 million of the principal outstanding under the High Trail Notes on May 24, 2024, and March 1, 2024, respectively, for an aggregate principal redemption of $ 43.0 million at the aggregate Redemption Price of $ 49.5 million, the Holders redeemed $ 4.5 million each of principal on January 1, 2024, February 1, 2024, April 20, 2024, and May 1, 2024, for an aggregate principal redemption of $ 18.0 million at an aggregate Repayment Price of $ 20.7 million. Under the terms of the High Trail Notes, the Holders had the option to redeem a portion of the High Trail Notes not to exceed $ 4.5 million principal on the first day of each month beginning November 1, 2023, at the Repayment Price. The April 2024 payment was delayed to April 20, 2024, under the High Trail Amendment as discussed above. 120 Table of Contents Other Income (Expense), Net The following is a summary of the charges included within other income (expense), net on the consolidated statement of operations: December 31, 2024 2023 Debt issuance costs on sale of convertible debenture $ ( 1,747,000 ) $ ( 4,521,000 ) Other interest expense ( 289,000 ) ( 598,000 ) Changes in estimated fair value, interest and redemption payments on High Trail notes and convertible debentures ( 2,084,000 ) 3,597,000 Other expense ( 716,000 ) ( 148,000 ) Gain on High Trail extinguishment 3,965,000 — Loss on issuance of convertible debentures and High Trail notes payable ( 1,890,000 ) ( 18,827,000 ) Loss on extinguishment of convertible debentures payable ( 7,341,000 ) — Total other income (expense) $ ( 10,102,000 ) $ ( 20,497,000 ) 10. Stockholders’ Equity and Stock-Based Compensation Common Stock The Company is currently authorized to issue up to 400 million shares of $ 0.0001 par value common stock. All issued shares of common stock are entitled to vote on a 1 share/1 vote basis. Preferred Stock The Company is currently authorized to issue up to 10 million shares of $ 0.0001 par value preferred stock. No preferred stock was issued or outstanding as of December 31, 2024 and December 31, 2023. Series A Preferred Stock On April 13, 2023, the Company entered into an agreement with David Barker, the Chair of the Company’s board of directors, pursuant to which the Company agreed to issue and sell one share of the Company’s Series A Preferred Stock, par value $ 0.0001 per share for a purchase price of $ 100.00 . The closing of the sale and purchase of the share of Series A Preferred was completed on April 13, 2023. The share of Series A Preferred was entitled 3.0 billion votes, but had the right to vote only on a proposal submitted to the stockholders of the Company to adopt an amendment, or a series of alternate amendments, to the Company’s Amended and Restated Certificate of Incorporation, as amended, to combine the outstanding shares of common stock into a smaller number of shares of common stock at a ratio specified in or determined in accordance with the terms of such amendment or series of alternate amendments (“Reverse Stock Split Proposal”), and had no voting rights (i) except with respect to a Reverse Stock Split Proposal and the votes of the share of Series A Preferred were required to be cast for and against such Reverse Stock Split Proposal in the same proportion as shares of common stock were voted for and against such Reverse Stock Split Proposal (with any shares of common stock that were not voted, whether due to abstentions, broker non-votes or otherwise not counted as votes for or against a Reverse Stock Split Proposal) and (ii) unless the holders of one-third (1/3rd) of the outstanding shares of common stock were present and voted, in person or by proxy, at the meeting of stockholders at which the Reverse Stock Split Proposal was submitted for stockholder approval (or any adjournment thereof). The share of Series A Preferred voted together with the common stock as a single class on the Reverse Stock Split Proposal at the Company’s 2023 Annual Meeting of Stockholders held on June 14, 2023. The Series A Preferred had no other voting rights, except as may have been required by the General Corporation Law of the State of Delaware. The outstanding share of Series A Preferred was redeemed in whole, for a redemption price of $ 100.00 , paid out of funds lawfully available therefor automatically immediately following the approval by the stockholders of the Reverse Stock Split Proposal on June 14, 2023. Reverse Stock Splits On August 4, 2023 and January 24, 2025, the Company completed a reverse stock split of its outstanding shares of common stock pursuant to which every 10 shares and 60 shares, respectively, of issued and outstanding common stock were exchanged for one share of common stock. No fractional shares were issued in the reverse stock split. Instead, the Company paid cash (without interest) equal to such fraction multiplied by $ 354.00 and $ 9.75 , respectively per share (a price equal to the average of the closing sales prices of the common stock on The Nasdaq Capital Market during regular trading hours for the five consecutive trading days immediately preceding August 4 and January 27, respectively, with such average closing sales prices being adjusted to give effect to a Reverse Stock Split). All share and per share amounts included within these consolidated financial statements have been retrospectively adjusted to reflect the reverse stock split. Sale of Common Stock 121 Table of Contents Cowen At-the-Market Facility On March 23, 2021, the Company entered into a Sales Agreement with Cowen and Company, LLC (“Cowen”) which provides for the sale, in the Company’s sole discretion, of shares of common stock having an aggregate offering price of up to $ 350.0 million through or to Cowen, acting as sales agent or principal, which was amended on March 9, 2023 to decrease the maximum aggregate offering price to $ 200.0 million for sales made on and after the date of the amendment (the “Cowen ATM”). The Company agreed to pay Cowen a commission of up to 3.0 % of the aggregate gross proceeds from each sale of shares, reimburse legal fees and disbursements and provide Cowen with customary indemnification and contribution rights. During the year ended December 31, 2023, the Company sold approximately 0.2 million shares of common stock under the Cowen ATM at an average share price of $ 277.09 per share, and received gross proceeds of approximately $ 57.8 million before deducting offering costs of $ 1.4 million. During the year ended December 31, 2024, the Company sold approximately 0.5 million shares of common stock under the Cowen ATM at an average share price of $ 46.40 per share, and received gross proceeds of approximately $ 21.4 million before deducting offering costs of $ 0.6 million. In January 2025, the Company sold approximately 0.1 million shares of common stock under the Cowen ATM at an average share price of $ 18.94 per share, and received gross proceeds 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. Wainwright At-the-Market Facility On February 21, 2025, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“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. The Company agreed to pay Wainwright a commission of up to 3.0 % of the aggregate gross proceeds from each sale of shares, reimburse legal fees and disbursements and provide Wainwright with customary indemnification and contribution rights. In February and March 2025, the Company sold approximately 0.4 million shares of common stock under the ATM Agreement at an average share price of $ 3.84 per share, and received gross proceeds of approximately $ 1.4 million before deducting offering costs of $ 0.05 million. Stock Warrants A summary of the Company’s warrant activity for the year ended December 31, 2024 was as follows: Shares of Stock under Warrants Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2023 8,000 $ 3,576.00 0.76 $ 273,000 Granted 361,000 191.13 — — Exercised — — — — Canceled ( 7,000 ) — — — Outstanding at December 31, 2023 362,000 $ 262.61 4.78 $ — Granted 1,192,000 29.29 — — Exercised ( 134,000 ) 0.06 — — Canceled ( 300 ) 516.00 — — Outstanding at December 31, 2024 1,419,700 $ 91.34 1.40 $ — In connection with the series of Registered Direct Offerings (as described further below) the Company issued warrants to purchase shares of the Company’s common stock. 2018 Equity Incentive Plan In August 2018, the Company’s board of directors (the “Board”) and its stockholders adopted the 2018 Equity Incentive Plan (the “2018 Plan”), as a successor to and continuation of the Company’s 2006 Equity Incentive Plan (the “2006 Plan”). Under the 2018 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then its employees, directors and consultants, including employees and consultants of its affiliates. The Company had initially reserved approximately 2,500 shares of common stock for issuance under the 2018 Plan, which is the sum of (1) approximately 1,700 new shares, plus (2) the number of shares that remained available for issuance under the 2006 Plan at the time the 2018 Plan became effective, and (3) any shares subject to outstanding stock options or other stock awards that were granted under the 2006 Plan that would have otherwise returned to the 2006 Plan. In addition, the number of shares of common stock reserved for issuance under the 2018 Plan will automatically increase on January 1 of each 122 Table of Contents calendar year, starting on January 1, 2019 through January 1, 2028, in an amount equal to 5 % of the total number of shares of the Company’s capital stock outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by the Board. As of December 31, 2024, approximately 53,000 shares of common stock were authorized for future grants under the 2018 Plan. 2020 Inducement Plan In August 2020, the Company’s Board adopted the 2020 Inducement Plan, which was further amended by the Board on October 6, 2021, and November 21, 2022. Under the 2020 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then its employees, directors and consultants, including employees and consultants of its affiliates. The Company initially reserved approximately 3,500 shares of common stock for issuance under the 2020 Plan. An approximate additional 1,700 of shares of common stock were reserved for issuance under the Inducement Plan on each of October 6, 2021 and November 21, 2022 for a total of approximately 6,900 shares pursuant to amendments approved by the Board. As of December 31, 2024, approximately 5,000 shares of common stock were authorized for future grants under the 2020 Plan. Employee Stock Purchase Plan In August 2018, the Board and the Company’s stockholders adopted the 2018 Employee Stock Purchase Plan (the “ESPP”). A total of approximately 300 shares of common stock were initially reserved for issuance under the ESPP. In addition, the number shares of common stock reserved for issuance under the ESPP will automatically increase on January 1 of each calendar year, beginning on January 1, 2019, through January 1, 2028, by the lesser of (1) 1 % of the total number of shares of the Company’s common stock outstanding on the last day of the calendar month before the date of the automatic increase, (2) 400 shares, or (3) a lesser number of shares as determined by the Board. As of December 31, 2024, approximately 1,000 shares of common stock were authorized for future grants under the ESPP plan and the Company had temporarily suspended the ESPP plan. Stock Options A summary of the Company’s stock option activity is as follows: Shares of Stock under Stock Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2024 54,000 $ 1,487.40 7.8 $ 3,000 Granted 33,000 53.88 Exercised — — — Canceled ( 31,000 ) 972.54 Outstanding and expected to vest at December 31, 2024 56,000 937.32 7.9 — Vested and exercisable at December 31, 2024 29,000 $ 1,474.80 6.9 $ — The weighted-average grant date fair value of stock option grants during the years ended December 31, 2024 and 2023 was $ 39.48 and $ 489.00 , respectively. The total intrinsic value of the stock options exercised during the years ended December 31, 2024 and 2023 were zero and $ 25,000 , respectively. The contractual term of stock options granted to employees was 10 years, which is also the maximum contractual term permitted for stock options (and stock appreciation rights) issued under the 2018 Plan. Stock options generally vest or become exercisable monthly over a four-year period. Executive Option Grants and RSUs On February 15, 2023, the compensation committee of the Company’s board of directors granted various executive officers stock options to purchase an aggregate of approximately 6,000 shares of common stock at an exercise price of $ 978.00 per share, and RSUs amounting to approximately 1,000 shares of common stock at a grant date fair value of $ 978.00 per share, in each case with an effective grant date and vesting commencement date of February 15, 2023. On June 3, 2024, the compensation committee of the Company’s board of directors granted various executive officers stock options to purchase an aggregate of approximately 8,000 shares of common stock at an exercise price of $ 55.80 per share, and RSUs amounting to approximately 2,000 shares of common stock at a grant date fair value of $ 55.80 per share, in each case with an effective grant date and vesting commencement date of June 3, 2024. On March 14, 2025, the compensation committee of the Company’s board of directors granted various executive officers stock options to purchase an aggregate of approximately 41,000 shares of common stock at an exercise price of $ 3.47 per share, with an effective grant date and vesting commencement date of March 14, 2025. These stock option grants and RSUs were issued from the 2018 Plan. The shares subject to the stock options shall vest monthly over 48 months beginning on the one-month anniversary of their respective grant dates, such that the stock options shall be 123 Table of Contents fully vested and exercisable on the four-year anniversary of their respective grant dates. The RSUs shall vest monthly over 48 months beginning one year after their respective grant dates, and the balance of the shares vest in a series of three successive equal annual installments measured from the first anniversary of the applicable grant date, such that the RSU shall be fully vested and exercisable on the four-year anniversary of the applicable grant date. Restricted Stock Units and Performance Stock Units The Company issues restricted stock units (“RSU”) and performance stock units (“PSU”). The Company grants restricted stock pursuant to the 2018 Plan and satisfy such grants through the issuance of new shares. RSUs are share awards that, upon vesting, will deliver to the holder shares of our common stock. RSUs generally vest over a two-year period with equal vesting annually prior to 2023, and over a four-year period with equal vesting monthly beginning one year after the grant date beginning in 2023. The Company issues PSUs for which the number of shares issuable at the end of a four-year performance period is based on our performance relative to specified revenue targets and continued employment through the vesting period. Restricted stock activity was as follows: Stock Units Weighted- Average Grant Date Fair Value per Share Outstanding at January 1, 2024 4,000 $ 978.00 Granted 7,000 55.74 Released ( 1,000 ) 736.50 Forfeited ( 4,000 ) — Outstanding at December 31, 2024 6,000 $ 272.04 The total fair value of the RSUs that vested during the years ended December 31, 2024 and 2023 were $ 0.7 million and $ 0.5 million, respectively, determined as of the date of vesting. The weighted average remaining contractual term for the RSUs is 3.0 years as of December 31, 2024. Performance stock activity was as follows: Stock Units Weighted- Average Grant Date Fair Value per Share Outstanding at January 1, 2024 480 $ 2,844.00 Granted — — Released — — Forfeited — — Outstanding at December 31, 2024 480 $ 2,844.00 During the year ended December 31, 2023, the Company reassessed the implicit service period on its performance-based stock units relative to specified revenue targets and determined that the performance conditions were met from an accounting perspective, but subject to certain certifications and approval from the Compensation Committee; therefore, the remaining expense was accelerated as of December 31, 2023. As a result of the accelerated vesting terms, the weighted average remaining contractual term for the PSUs was 0 as of December 31, 2023. On March 14, 2025, the Compensation Committee certified that the Company had achieved the performance goals for the above PSUs. Stock-Based Compensation Expense The Company recognized stock-based compensation expense for the years ended December 31, 2024 and 2023 was as follows: Years Ended December 31, 2024 2023 Cost of product revenue $ 271,000 $ 520,000 Cost of service and other revenue 94,000 183,000 Research and development 2,149,000 5,092,000 General and administrative 7,222,000 9,383,000 Total stock-based compensation expense $ 9,736,000 $ 15,178,000 124 Table of Contents The weighted-average assumptions used in the Black-Scholes-Merton option pricing model to determine the fair value of the employee stock option grants were as follows: Years Ended December 31, 2024 2023 Risk-free interest rate 4.3 % 4.0 % Expected volatility 86.2 % 75.3 % Expected term (in years) 5.7 5.9 Expected dividend yield 0.0 % 0.0 % Risk-free interest rate. The risk-free rate assumption is based on the U.S. Treasury instruments, the terms of which were consistent with the expected term of the Company’s stock options. Expected volatility. The Company incorporates the Company’s own volatility assumption into the expected volatility calculation for Black-Scholes by using an equal weighting of the Company’s historical stock volatility and the historical volatilities of a group of industry peers whose share prices are publicly available. Expected term. The expected term of stock options represents the weighted-average period the stock options are expected to be outstanding. The Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded. As a result, the Company uses the simplified method for estimating the expected term as provided by the SEC. The simplified method calculates the expected term as the average of the time-to-vesting and the contractual life of the options. Expected dividend yield. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not intend to pay dividends. Forfeitures . The Company reduces stock-based compensation expense for actual forfeitures during the period. 125 Table of Contents Unrecognized Stock-Based Compensation Expense As of December 31, 2024, the unrecognized compensation expense for all non-vested share-based awards was $ 7.4 million, and is expected to be recognized as expense over a weighted-average period of 1.6 years. Registered Direct Offerings On April 4, 2024, the Company entered into a securities purchase agreement (the “April 2024 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 “April 2024 Registered Direct Offering”): (i) an aggregate of approximately 109,000 shares of the Company’s common stock, (ii) pre-funded warrants to purchase up to an aggregate of approximately 37,000 shares of common stock (the “April Pre-Funded Warrants”), and (iii) warrants to purchase up to approximately 146,000 shares of common stock (the “April Purchase Warrants”). The combined purchase price of each share of common stock and accompanying April Purchase Warrant was $ 68.70 per share. The combined purchase price of each April Pre-Funded Warrant and accompanying April Purchase Warrant was $ 68.64 (equal to the combined purchase price per share of common stock and accompanying April Purchase Warrant, minus $ 0.001 ). The gross proceeds to the Company from the April 2024 Registered Direct Offering were $ 10.0 million. The Company received net proceeds of $ 9.3 million after deducting placement agent fees and other offering expenses of $ 0.7 million payable by the Company. Each April Purchase Warrant is exercisable for one share of common stock at an exercise price of $ 61.20 per share. The Purchase Warrants are immediately exercisable as of the date of issuance of April 8, 2024, and will expire on the five-year anniversary of the date of issuance. The April Pre-Funded Warrants are offered in lieu of shares of common stock and provide that the holder may not exercise any portion of an April Pre-Funded Warrant to the extent that immediately prior to or after giving effect to such exercise the holder would own more than 4.99 % (or, at the election of the holder, 9.99 %) of the Company’s outstanding common stock immediately following the consummation of the April 2024 Registered Direct Offering. Each April Pre-Funded Warrant is exercisable for one share of common stock at an exercise price of $ 0.001 per share. The April Pre-Funded Warrants were immediately exercisable and were exercised in full at the time of closing. On July 4, 2024, the Company entered into a securities purchase agreement (the “July 2024 Purchase Agreement”) with certain institutional investors, pursuant to which the Company agreed to issue and sell, (i) in a registered direct offering priced at-the-market consistent with the rules of the Nasdaq Stock Market (the “July 2024 Registered Direct Offering”): (a) an aggregate of approximately 195,000 shares of the Company’s common stock, and (b) pre-funded warrants to purchase up to an aggregate of approximately 97,000 shares of common stock (the “July Pre-Funded Warrants”), and (ii) in a concurrent private placement (the “Private Placement” and together with the July 2024 Registered Direct Offering, the “July 2024 Offering”), Series A warrants to purchase up to an aggregate of approximately 292,000 shares of common stock (the “Series A Warrants”) and Series B warrants to purchase up to an aggregate of approximately 292,000 shares of common stock (the “Series B Warrants”, and together with the Series A Warrants, the “July Purchase Warrants”). Each share of common stock and each July Pre-Funded Warrant sold pursuant to the July 2024 Purchase Agreement were accompanied by one Series A Warrant and one Series B Warrant. The combined purchase price of each share of common stock and accompanying July Purchase Warrants was $ 34.260 per share. The combined purchase price of each July Pre-Funded Warrant and accompanying July Purchase Warrants was $ 34.259 (equal to the combined purchase price per share of common stock and accompanying July Purchase Warrants, minus $ 0.001 ). The gross proceeds to the Company from the July 2024 Offering were approximately $ 10.0 million (excluding up to $ 20.0 million of aggregate gross proceeds that may be received in the future upon the cash exercise of the July Purchase Warrants issued in the Private Placement which was contingent upon the July Stockholder Approval described below), before deducting placement agent fees and other offering expenses payable by the Company. The Company received net proceeds of $ 9.3 million after deducting placement agent fees and other offering expenses of $ 0.7 million payable by the Company. Each July Purchase Warrant became exercisable for one share of common stock at an exercise price of $ 34.260 per share beginning on November 27, 2024, the effective date of stockholder approval for the issuance of the shares of common stock upon exercise of the July Purchase Warrants (the “July Stockholder Approval”). The Series A Warrants will expire on the earlier of (i) the 24-month anniversary of the July Stockholder Approval and (ii) 60 days following the later of (a) the date of the public announcement of the occurrence of a medical administrative contractor (including, without limitation, Molecular Diagnostic Services), issuing a final local coverage determination for optical genome mapping for hematological malignancies and (b) the date of the July Stockholder Approval. The Series B Warrants will expire on the earlier of (i) the five-year anniversary of the July Stockholder Approval and (ii) six months following the later of (a) the date of the public announcement of the occurrence of the Company receiving clearance from the U.S. Food and Drug Administration for an optical genome mapping system for any indication and (b) the date of the July Stockholder Approval. The July Pre-Funded Warrants were immediately exercisable for one share of common stock at an exercise price of $ 0.001 per share and were exercised in full as of December 31, 2024. The Company adjourned its Special Meeting of Stockholders originally held on October 2, 2024 (the “Special Meeting”) to October 30, 2024 because a quorum was not present at the time of the meeting. The reconvened meeting held on October 30, 2024 was further adjourned to November 27, 2024 because a quorum was not present at the time of the reconvened meeting. 126 Table of Contents The Special Meeting reconvened on November 27, 2024 and obtained stockholder approval for the issuance of the shares of common stock upon exercise of the July Purchase Warrants. On October 30, 2024, the Company entered into a securities purchase agreement (the “October 2024 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 “October 2024 Offering”): (i) an aggregate of approximately 165,000 shares of the Company’s common stock, (ii) Series C warrants to purchase up to an aggregate of approximately 165,000 shares of the Company’s common stock (the “Series C Warrants”) and (iii) Series D warrants to purchase up to an aggregate of approximately 165,000 shares of the Company’s common stock (the “Series D Warrants”, and together with the Series C Warrants, the (“October Purchase Warrants”). Each share of common stock sold pursuant to the October 2024 Purchase Agreement was accompanied by one Series C Warrant to purchase one share of common stock and one Series D Warrant to purchase one share of common stock . The shares of common stock and the October Purchase Warrants were immediately separable and were issued separately. The combined purchase price of each share of common stock and accompanying October Purchase Warrants was $ 18.234 per share. The gross proceeds to the Company from the October 2024 Offering were approximately $ 3.0 million (excluding up to approximately $ 6.0 million of aggregate gross proceeds that may be received in the future upon the cash exercise of the October Purchase Warrants, which was contingent upon the October Stockholder Approval described below), before deducting placement agent fees and other offering expenses payable by the Company. Each October Purchase Warrant is exercisable for one share of common stock at an exercise price of $ 18.234 per share beginning on January 15, 2025, the effective date of stockholder approval of the issuance of the shares of common stock upon exercise of the October Purchase Warrants (the “October Stockholder Approval”) . The Series C Warrants will expire on the five-year anniversary of the October Stockholder Approval. The Series D Warrants will expire on the 18-month anniversary of the October Stockholder Approval. 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 (the “January Pre-Funded Warrants”) and (iii) warrants to purchase up to an aggregate of approximately 661,000 shares of common stock (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 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. 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 ). The gross proceeds to the Company from the January 2025 Offering were approximately $ 10.0 million (excluding up to approximately $ 20.0 million of aggregate gross proceeds that may be received in the future upon the cash exercise of the January Purchase Warrants which is contingent upon stockholder approval), 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 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. On January 15, 2025, the Company held a Special Meeting of Stockholders (the “2025 Special Meeting”), and obtained stockholder approval for the issuance of the shares of common stock issuable upon exercise of the October Purchase Warrants and approval, at the discretion of the Company’s board of directors, of a reverse stock split of the Company’s common stock at a ratio of between 1-for-25 and 1-for-75. On January 15, 2025, the Company’s board of directors approved a reverse stock split at a ratio of 1-for-60, and on January 24, 2025, the Company filed a certificate of amendment to effect the reverse split ratio chosen by the Company’s board of directors as further described above under the section “Reverse Stock Splits.” 11. Commitments and Contingencies Leases Operating leases 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, as further described under the heading “Restructuring Expenses” in Note 2 (Summary of Significant Accounting Policies). The Company continued to lease the property through June 2024. 127 Table of Contents In January 2025, the Company entered into a lease termination agreement with the landlord for the facility in Pleasanton, California, that resulted in a one-time termination fee of approximately $ 0.3 million in the first quarter of 2025. The Company continued to lease the property through the end of January 2025. Further, the restricted cash of $ 0.4 million held under the letter of credit related to the lease assumed in the acquisition of Purigen in 2022 expired concurrently with the payment of the above termination fee. Supplemental information For all leases, the Company has the ability to enter into renewal negotiations, prior to the lease end date, with no specific terms. At this time, it is not reasonably certain that we will extend the term of the lease and therefore the renewal period has been excluded from the aforementioned ROU asset and lease liability measurements. The leases are subject to variable charges for common area maintenance and other costs that are determined based on actual costs and includes certain lease incentives such as tenant improvement allowances. The base rent for the leases is subject to an annual increase each year. Rent expense is being recognized on a straight-line basis over the term of the lease. The Company’s estimated incremental borrowing rate summarized in the table below was used in its present value calculations as the operating and finance leases do not have a stated rate and the implicit rate was not readily determinable. In determining the incremental borrowing rate, the Company considered the interest rate of its prior year term loans as well as publicly available data for discount rates used by peer companies. Supplemental information pertaining to the Company’s leases in which the Company is the lessee is as follows: Year Ended December 31, 2024 2023 Cash payments included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,754,000 $ 2,586,000 Operating cash flows from finance leases $ 271,000 $ 275,000 Financing cash flows from finance leases $ 58,000 $ 47,000 Weighted-average remaining lease term: Operating leases 1.54 years 2.47 years Finance leases 16.17 years 17.17 years Weighted-average discount rate: Operating leases 9.1 % 8.3 % Finance leases 7.1 % 7.1 % Noncash lease liabilities resulting from obtaining right-of-use assets Operating leases $ — $ — The following table provides the components of the Company’s lease cost: Year Ended December 31, 2024 2023 Operating leases Operating lease costs $ 2,632,000 $ 2,663,000 Variable lease costs 791,000 702,000 Total rent expense 3,423,000 3,365,000 Finance lease Amortization of right of use assets 204,000 204,000 Interest on lease liabilities 271,000 275,000 Variable lease costs 32,000 40,000 Total finance lease costs 507,000 519,000 Gross sublease income ( 176,000 ) ( 106,000 ) Total lease costs $ 3,754,000 $ 3,778,000 The future minimum payments under non-cancellable operating and finance leases as of December 31, 2024, are as follows: 128 Table of Contents Operating Leases Finance Lease 2025 2,608,000 338,000 2026 544,000 347,000 2027 254,000 355,000 2028 — 364,000 2029 — 373,000 Thereafter — 4,857,000 Total future lease payments 3,406,000 6,634,000 Less: imputed interest ( 270,000 ) ( 2,835,000 ) Total lease liabilities 3,136,000 3,799,000 Less: lease liability, current portion 2,991,000 260,000 Lease liability, net of current portion $ 145,000 $ 3,539,000 Purchase Commitments The Company had a contractual commitment with a supplier to purchase $ 0.3 million of products every month for an initial term of two years which began in May 2021 and ended in May 2023. $ 1.4 million of materials were purchased under this minimum purchase commitment during the year ended December 31, 2023. The Company is currently negotiating an agreement with its instrument contract manufacturer under which it would make weekly deposits for future inventory purchases that are expected to begin in April 2025 and continue through November 21, 2025. Total payments in 2025 are expected to range from approximately $ 1.7 million to $ 2.0 million. The payments are intended to create a deposit for inventory Bionano may purchase above the 2025 minimum order quantity and guarantee the availability of certain raw materials previously purchased by the contract manufacturer to build instruments. As of December 31, 2024, no liability has been recorded in connection with this commitment, as the obligation is contingent upon ongoing production and future deliveries of finished goods. The Company will continue to evaluate the financial impact of this commitment and assess the need for future disclosures or accruals in accordance with ASC 450. Restructuring The 2024 Workforce Reductions described in Note 2 (Summary of Significant Accounting Policies) resulted in total restructuring charges of approximately $ 8.2 million , comprised primarily of severance payments and wages for the 60-day notice period in accordance with the California Worked Adjustment and Retraining Notification (“WARN”) Act. The following is a summary of restructuring charges associated with the reduction in force for the years ended December 31, 2024 and 2023 including severance and other exit related costs: Year Ended December 31, 2024 2023 Severance $ 5,475,000 $ 741,000 Lease related expenses 374,000 — Contracted services and consulting 2,173,000 — Total restructuring charges included in operating expenses $ 8,022,000 $ 741,000 Total restructuring charges included in cost of revenue $ 157,000 $ — Total restructuring charges $ 8,179,000 $ 741,000 The following restructuring liability activity was recorded in connection with the reductions in force for the year ended December 31, 2024 included within accrued expenses on the consolidated financial statements: Accrued restructuring as of January 1, 2024 $ 83,000 Restructuring charges incurred during the period 8,179,000 Cash payments ( 7,701,000 ) Accrued restructuring as of December 31, 2024 $ 561,000 Litigation 129 Table of Contents From time to time, the Company may be subject to potential liabilities under various claims and legal actions that are pending or may be asserted. These matters arise in the ordinary course and conduct of the business. The Company regularly assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in the financial statements. An estimated loss contingency is accrued in the financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on the Company’s assessment, it currently does not have any material loss exposure. Contingent Consideration Refer to Note 4 (Investments and Fair Value Measurements) for discussion regarding contingent consideration. 12. Income Taxes The domestic and foreign components of income (loss) before income taxes are as follows: Year Ended December 31, 2024 2023 Domestic $ ( 112,422,000 ) $ ( 235,852,000 ) Foreign 438,000 3,421,000 Loss before provision for income taxes $ ( 111,984,000 ) $ ( 232,431,000 ) The provision for domestic and foreign income taxes is as follows: Year Ended December 31, 2024 2023 Current: Federal $ — $ — Foreign 34,000 63,000 State and local ( 1,000 ) ( 1,000 ) Total current income tax provision (benefit) $ 33,000 $ 62,000 Deferred: Federal $ — $ — Foreign — — State and local — — Total deferred income tax provision (benefit) — — Income tax provision (benefit) $ 33,000 $ 62,000 130 Table of Contents Reconciliations of the income tax computed at the federal statutory tax rate to the expense for income taxes are as follows: Year Ended December 31, 2024 2023 Income taxes at statutory rates $ ( 23,517,000 ) $ ( 48,811,000 ) State income tax, net of federal benefit ( 1,079,000 ) ( 1,050,000 ) Reduction of tax attributes under section 382 ( 4,920,000 ) 43,680,000 Goodwill impairment — 16,229,000 Research credits ( 647,000 ) ( 5,416,000 ) Convertible High Trail notes and debentures payable and warrants 1,544,000 4,211,000 Stock-based compensation 1,716,000 1,836,000 Other permanent differences ( 2,252,000 ) 9,000 Limitation of compensation under section 162(m) 196,000 ( 1,145,000 ) Other, net ( 767,000 ) 1,822,000 Change in valuation allowance 29,759,000 ( 11,303,000 ) Income tax expense (benefit) $ 33,000 $ 62,000 Significant components of the Company’s deferred tax assets at December 31, 2024 and 2023 are as follows: December 31, 2024 2023 Deferred tax assets: Net operating loss carryforwards $ 113,907,000 $ 91,977,000 Research and development credits 9,130,000 8,283,000 Stock-based compensation 2,136,000 1,991,000 ASC 842 - lease liability 1,529,000 2,113,000 UNICAP 527,000 826,000 Sec 174 Capitalization 14,759,000 13,483,000 Other 1,708,000 1,413,000 Total gross 143,696,000 120,086,000 Deferred tax liabilities: Amortization ( 2,100,000 ) ( 7,360,000 ) ASC 842 - ROU asset ( 1,124,000 ) ( 2,013,000 ) Less: valuation allowance ( 140,472,000 ) ( 110,713,000 ) Deferred tax assets, net of valuation allowance $ — $ — As of December 31, 2024, the Company had federal and state tax net operating loss carryforwards of $ 488.3 million and $ 195.0 million, respectively. The federal tax loss carryforwards include $ 446.7 million that do not expire but utilization is limited to 80% of the Company’s taxable income in any given tax year based on current federal tax laws. The remaining federal tax loss carryforwards of $ 41.6 million and state tax loss carryforwards begin to expire in 2027 and 2024, respectively, unless previously utilized. As of December 31, 2024, the Company also had federal and California research credit carryforwards of $ 7.1 million and $ 10.2 million, respectively. The federal research credit carryforwards begin to expire in 2027 unless previously utilized. The California research credits carry forward indefinitely. Management assesses all available evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. The Company has experienced net losses since inception, and the revenue and income potential of the Company’s business and market are unproven. Due to the Company’s continuing research and development (“R&D”) activities, the Company expects to continue to incur net losses into the foreseeable future. As such, the Company cannot conclude that it is more likely than not that its deferred tax assets will be realized. A valuation allowance of $ 140.5 million, and $ 110.7 million as of December 31, 2024, and 2023, respectively, had been established to offset the deferred tax assets. Utilization of the net operating losses and R&D credit carryforwards may be subject to annual limitations due to ownership changes that have occurred or that could occur in the future, as required by Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), as well as similar state and foreign provisions. These ownership changes may limit the amount of net operating losses and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series 131 Table of Contents of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of outstanding stock of a company by certain stockholders. The Company had performed an ownership change analysis pursuant to Section 382 of the Code through tax year 2023 and identified that ownership changes occurred on various dates that will limit the Company’s ability to utilize its net operating loss and R&D credit carryforwards. Based on the analysis, the Company’s deferred tax assets related to the tax attributes that will expire unused as a result of the ownership change limitations (and their corresponding valuation allowance) have been adjusted as of December 31, 2023 and were further adjusted at December 31, 2024. As a result of limitations arising from the prior ownership changes, $ 29.3 million of federal and $ 4.6 million of California net operating loss carry-forwards were removed from the inventory of deferred tax assets as of December 31, 2024. In addition, $ 5.9 million of federal R&D tax credits were removed from the deferred tax assets as of December 31, 2023. Further, the Company’s deferred tax assets associated with such tax attributes could be significantly reduced upon a future ownership change within the meaning of Section 382 of the Code. Reconciliations of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, are as follows: December 31, 2024 2023 Balance at beginning of the year $ 4,987,000 $ 7,281,000 Additions/(reductions) for tax positions - prior year 1,190,000 ( 3,643,000 ) Increases related to current year positions 766,000 1,349,000 Balance at the end of the year $ 6,943,000 $ 4,987,000 The Company recognizes the benefit 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 has less than a 50% likelihood of being sustained. Due to the valuation allowance position, none of the unrecognized tax benefits, if recognized, will impact the Company’s effective tax rate. The Company does not anticipate a significant change in the unrecognized tax benefits during the next twelve months. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual of interest and penalties on the Company’s balance sheets and had not recognized any interest and penalties in the statements of operations for the years ended December 31, 2024 and 2023. The Company is subject to taxation in the United States, the United Kingdom and China. The Company’s tax years from 2007 (inception) are subject to examination by the United States and state authorities due to the carry forward of unutilized net operating losses and R&D credits. 13. Employee Benefits The Company has a defined contribution 401(k) plan available to eligible employees. Under the terms of the plan, employees may make voluntary contributions as a percent of compensation, limited to the maximum amount allowable under federal tax regulations. The Company, at its discretion, may make certain contributions to the 401(k) plan. The Company expensed matching contributions of $ 1.4 million and $ 1.9 million for the years ended December 31, 2024 and 2023, respectively. 132 Table of Contents 14. Segment Reporting The following table presents financial information with respect to the Company’s single operating segment, including significant segment expenses, which are regularly provided to the CODM and included within consolidated operating loss: Year Ended December 31, 2024 2023 Revenues $ 30,776,000 $ 36,116,000 Cost of revenue 30,396,000 26,550,000 Operating expenses Salaries, wages, and benefits 51,136,000 83,434,000 Contracted services 18,892,000 29,834,000 Non-inventory materials 2,716,000 7,066,000 Consulting 4,659,000 8,211,000 Rent and facilities 4,095,000 4,624,000 Depreciation and amortization 8,826,000 10,400,000 Travel and entertainment 1,654,000 4,324,000 Administrative and other* 12,385,000 76,918,000 Total operating expenses 104,363,000 224,811,000 Loss from operations $ ( 103,983,000 ) $ ( 215,245,000 ) *Administrative and other primarily includes operating expenses for intangible assets and other long-lived assets impairment of $ 19.7 million, changes in fair value of contingent consideration of $ 10.9 million, disposals of property, plant, and equipment of $ 2.7 million, gain on lease modification of $ 0.1 million, and taxes, interest, and fees of $ 1.0 million, as of December 31, 2024, as compared to operating expenses for $ 77.3 million of goodwill impairment and $ 0.4 million in taxes, interest, and fees as of December 31, 2023. 133 Table of Contents ITEM 9. CHANGES IN DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.