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Item 2. Management’s Discussion and Analysis

2025-08-14 compared with 2025-05-14 · 159 added, 69 removed, 236 unchanged (49% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q for the three months ended March 31, 2025 (“Quarterly Report”) and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the year ended December 31, 2024, (“Annual Report”), filed with the Securities and Exchange Commission, (“SEC”), on March 31, 2025.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2025 (“Quarterly Report”) and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the year ended December 31, 2024, (“Annual Report”), filed with the Securities and Exchange Commission, (“SEC”), on March 31, 2025.

Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our” refer to Bionano Genomics, Inc.

and its subsidiaries or, as the context may require, Bionano Genomics, Inc.

“Lineagen” (doing business as “Bionano Laboratories:), “BioDiscovery” and “Purigen” refer to our wholly owned subsidiaries, Lineagen, Inc., BioDiscovery, LLC and Purigen Biosystems, Inc., respectively.

Forward-Looking Statements

The information in this Quarterly Report contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections.

These forward-looking statements include, but are not limited to any statements concerning our strategy, future operations, future financial position, future revenues, projected costs, expected savings including from restructuring initiatives, projected cash runway, prospects and plans, expected growth in sales of instruments and consumables, installed bases and provision of clinical services, and objectives of management.

The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These forward-looking statements include, but are not limited to, any statements concerning our strategy, future operations, future financial position, future revenues, projected costs, expected savings including from restructuring initiatives, projected cash runway, prospects and plans, expected growth in sales of instruments and consumables, installed bases and provision of clinical services, objectives of management and any other statements that are not historical facts.

The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “predict,” “should,” “could,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements.

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In executing on our commercialization strategy, we expanded the utilization of our OGM systems (our Saphyr system and our Stratys system) and:

• Grew our installed base to 379 as of March 31, 2025, an increase of approximately 9% from a total installed base of 347 as of March 31, 2024.

• Grew our installed base to 378 as of June 30, 2025, an increase of approximately 4% from a total installed base of 363 as of June 30, 2024.

Installed base represents the global number of OGM instruments installed at end-customer locations and therefore having the technology to process OGM.

• Sold 6,994 flowcells in the three-month period ended March 31, 2025, a decrease of approximately 15% from 8,249 flowcells sold in the same quarter of 2024.

• Sold 7,233 flowcells in the three-month period ended June 30, 2025, an increase of approximately 17% from 6,165 flowcells sold in the same period of 2024.

Sold 14,227 flowcells in the six-month period ended June 30, 2025, a decrease of approximately 1% from 14,414 flowcells sold in the same period of 2024.

The OGM cartridge is the consumable that packages nanochannel arrays for DNA linearization.

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Macroeconomic and Geopolitical Developments

in monetary and fiscal policy, United States political developments and other sources of instability which, have not had a material impact on our business and financial results to date, but could result in a material impact to our business or financial results in the future.

We are subject to additional risks and uncertainties as a result of adverse geopolitical and macroeconomic developments, such as recent and potential future bank failures, the ongoing conflicts between Ukraine and Russia and in the Middle East, related sanctions, any effects of global pandemics and uncertain market conditions, including inflation and supply chain disruptions, and international trade policies (including trade protection measures, such as tariffs, sanctions and other trade barriers), changes in monetary and fiscal policy, United States political developments and other sources of instability which, have not had a material impact on our business and financial results to date, but could result in a material impact to our business or financial results in the future.

Additionally, we have experienced a slowdown in our Asia Pacific business, including as a result of headwinds in the region, which negatively impacted our manufacturing partners who are reliant on government funding.

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In the past, we have experienced supply chain challenges, attributable to such adverse geopolitical and macroeconomic developments including increased costs to secure certain component parts in our products and to produce our products at our contract manufacturers.

During the three months ended March 31, 2025, we did not experience material increases in our supply chain costs, but we may experience such increases in future fiscal periods.

During the six months ended June 30, 2025, we did not experience material increases in our supply chain costs, but we may experience such increases in future fiscal periods.

We expect our costs to remain high for the foreseeable future.

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The following table presents our revenue for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Product revenue $ 6,310,000 $ 6,510,000 $ 12,314,000 $ 13,338,000

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Asia Pacific includes China, Japan, South Korea, Singapore, India and Australia.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

$ % $ % $ % $ %

Americas $ 2,926,000 43.5 % $ 3,386,000 43.6 % $ 5,984,000 45.4 % $ 8,076,000 48.8 %

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We have incurred losses in each year since our inception.

Our net loss was $3.1 million for the three months ended March 31, 2025.

As of March 31, 2025, we had an accumulated deficit of $696.3 million.

While we have implemented restructuring plans in March and September 2024, we expect to continue to incur significant expenses and operating losses as we:

Our net loss was $6.9 million and $10.0 million for the three and six months ended June 30, 2025, respectively.

As of June 30, 2025, we had an accumulated deficit of $703.2 million.

While we implemented restructuring plans in March and September 2024, we expect to continue to incur significant expenses and operating losses as we:

• continue our sales and marketing efforts to maintain sales of our existing products;

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• incur increased costs as a result of operating as a public company.

ability to continue as a going concern within 12 months after the date that the financial statements included in this Quarterly Report are issued.

Accordingly, based on recurring losses from operations incurred since inception, the expectation of continued operating losses, and the need to raise additional capital to finance our future operations, we determined that there is substantial doubt about our ability to continue as a going concern within 12 months after the date that the financial statements included in this Quarterly Report are issued.

We will continue to seek to raise additional capital, but without sufficient additional financing in the very near term we will not be able to continue as a going concern.

If we are unable to continue as a going concern, we may have to reorganize or liquidate our business and may receive less than the value at which those assets are carried on our consolidated financial statements, and investors may lose all or a part of their investment.

The board of directors has established a strategy committee to work with the Company and outside advisors in evaluating our options and considering alternatives that we believe will maximize stakeholder value, including any of the following or a combination thereof:

From time to time, the board of directors maintains a strategy committee to work with the Company and outside advisors in evaluating our options and considering alternatives that we believe will maximize stakeholder value, including any of the following or a combination thereof:

debt financing, equity investments, combinations with other companies, or the sale of all or part of the company.

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We do not intend to make further announcements regarding this process unless and until the board of directors approves a specific transaction or otherwise determines that further disclosure is appropriate.

Comparison of the Three Months Ended March 31, 2025 and 2024

The following table sets forth our results of operations for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31, Period-to-Period Change

Comparison of the Three Months Ended June 30, 2025 and 2024

The following table sets forth our results of operations for the three months ended June 30, 2025 and 2024:

Three Months Ended June 30, Period-to-Period Change

Product revenue $ 6,310,000 $ 6,510,000 $ (200,000) (3) %

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Selling, general and administrative 8,346,000 11,557,000 (3,211,000) (28) %

Restructuring costs

— 1,215,000 (1,215,000) (100) %

Total operating expenses 11,277,000 19,603,000 (8,326,000) (42) %

Loss from operations (7,800,000) (17,018,000) 9,218,000 (54) %

Other income:

Interest income 277,000 457,000 (180,000) (39) %

676,000 363,000 313,000 86 %

Total other income

953,000 820,000 133,000 16 %

Loss before income taxes (6,847,000) (16,198,000) 9,351,000 (58) %

Provision for income taxes (10,000) (26,000) 16,000 (62) %

Net loss $ (6,857,000) $ (16,224,000) $ 9,367,000 (58) %

Product revenue decreased by $0.2 million, or 3%, to $6.3 million for the three months ended June 30, 2025 as compared to $6.5 million for the same period in 2024.

The decrease in product revenue was driven by a decrease of $0.9 million or 38% in instrument sales and a $0.05 million or 3% decrease in software sales, partially offset by an increase of $0.7 million or 28% in consumables sales.

In September 2024, we announced a change in our business strategy to focus on driving utilization and adoption of OGM from our existing installed base, with less emphasis on new placements of our OGM systems.

We expected that this change in strategy would slow the pace of our revenue growth when compared to historical growth rates, and we anticipate that the reduced pace of our revenue growth will continue in the remainder of 2025.

Service and other revenue decreased by $0.8 million, or 66%, to $0.4 million for the three months ended June 30, 2025, as compared to the same period in 2024 which is the result of discontinuing sales of certain clinical service offerings from Bionano Laboratories effective March 2024.

Such clinical service offerings from Bionano Laboratories contributed no revenues for the three months ended June 30, 2025, as compared to $0.7 million for the same period in 2024.

We expect service and other revenue to decline in 2025 relative to 2024 as these service offerings were fully phased out as of December 31, 2024.

Cost of Revenue

Cost of product revenue decreased by $1.6 million or 33% , to $3.2 million for the three months ended June 30, 2025, as compared to $4.7 million for the three months ended June 30, 2024.

The decrease in cost of product revenue was primarily due to lower sales of instruments and software, partially offset by higher sales of consumables.

We expect cost of product revenue to fluctuate with the volume of product sales.

Cost of service and other revenue decreased by $0.4 million , or 78%, to $0.1 million for the three months ended June 30, 2025, as compared to $0.5 million for the three months ended June 30, 2024.

The decrease in cost of service and other revenue was primarily due to discontinuing sales of certain clinical service offerings from Bionano Laboratories effective March 2024.

We expect cost of service and other revenue to remain relatively flat in 2025 as these service offerings were fully phased out as of December 31, 2024.

Gross Profit, and Gross Margin

Three Months Ended June 30, Period-to-Period Change

Gross profit:

Product $ 3,160,000 $ 1,807,000 $ 1,353,000 75%

Service and other 317,000 778,000 (461,000) (59)%

Total gross profit $ 3,477,000 $ 2,585,000 $ 892,000 35%

Gross margin:

Product 50 % 28 %

Service and other 75 % 62 %

Total gross margin 52 % 33 %

Product gross profit increased by $1.4 million, or 75% , to $3.2 million for the three months ended June 30, 2025, compared to $1.8 million for the three months ended June 30, 2024.

The increase in product gross profit was primarily due to an increase in consumable sales.

We expect cost of product revenue to fluctuate with the volume of product sales.

Service and other gross profit decreased by $0.5 million, or 59%, to $0.3 million for the three months ended June 30, 2025, compared to $0.8 million for the three months ended June 30, 2024.

The decrease in service and other gross profit was primarily due to discontinuing sales of certain clinical service offerings from Bionano Laboratories effective March 2024.

We expect service and other gross profit to remain relatively flat in 2025 as these service offerings were fully phased out as of December 31, 2024.

Research and Development Expenses

Research and development (“R&D”) expenses decreased by $3.9 million, or 57%, to $2.9 million for the three months ended June 30, 2025 compared to $6.8 million for the same period in 2024.

The decrease was primarily due to a decrease of $2.4 million in salaries, wages and benefits driven by headcount reductions announced throughout 2023 and 2024, and a decrease of $1.1 million in professional and consulting fees including decreases in costs incurred to support clinical research studies, development of the Stratys system, foundry expenses, and cloud computing.

We also reduced our internal consumption of inventory, materials and supplies by $0.4 million.

We anticipate that R&D expenses will continue to decrease throughout 2025 as a result of our cost saving initiatives announced in March and September 2024.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses decreased by $3.2 million, or 28%, to $8.3 million for the three months ended June 30, 2025, as compared to $11.6 million for the same period in 2024.

The decrease was primarily due to a $4.3 million decrease in salaries, wages and benefits driven by headcount reductions announced throughout 2023 and 2024;

a $2.1 million decrease in professional and consulting fees, which is primarily marketing, software and legal expenses;

a $0.3 million decrease in travel and entertainment;

and a $0.3 million decrease in information technology and rent and facility costs.

These decreases were offset by a $4.5 million gain recorded on the fair value of the contingent consideration due for the Purigen milestones during the same period in 2024 as compared to no gain recorded for the three months ended June 30, 2025 .

We anticipate that SG&A expenses will continue to decrease throughout 2025 as a result of our restructuring initiatives announced in March and September 2024.

Restructuring Costs

The Company had no expenses that were classified as restructuring costs during the three months ended June 30, 2025, as compared to $1.2 million during the same period in 2024.

These restructuring costs were the result of our cost saving initiatives announced in 2024.

Interest Income

Interest income was $0.3 million for the three months ended June 30, 2025, as compared to $0.5 million for the same period in 2024.

The decrease was primarily the result of a reduction in investments, partially offset by higher returns.

Other income was $0.7 million for the three months ended June 30, 2025, as compared to $0.4 million for the same period in 2024.

The increase was primarily driven by a loss recorded on the issuance of the JGB Debentures of $1.9 million during the three months ended June 30, 2024, debt issuance costs recorded in connection with the debt instruments of $1.4 million during the three months ended June 30, 2024 , and an increase in other income of $1.8 million primarily related to an Employee

Retention Credit (“ERC”) refundable tax credit received during the three months ended June 30, 2025 from the Internal Revenue Services (“IRS”) for eligible businesses affected by the COVID-19 pandemic.

These increases were offset by a net gain on the extinguishment of the High Trail Note and Purchase Option of $4.0 million during the three months ended June 30, 2024 , and a change in fair value (net loss) of $0.9 million for the convertible High Trail Notes, Purchase Option, and convertible debentures during the three months ended June 30, 2025 .

See Note 5 (Debt) and Note 8 (Investments and Fair Value Measurements) in the accompanying notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for further discussion.

Comparison of the Six Months Ended June 30, 2025 and 2024

The following table sets forth our results of operations for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30, Period-to-Period Change

Product revenue $ 12,314,000 $ 13,338,000 $ (1,024,000) (8) %

Service and other revenue 876,000 3,202,000 (2,326,000) (73) %

Total revenue 13,190,000 16,540,000 (3,350,000) (20) %

Cost of revenue:

Cost of product revenue 6,202,000 9,607,000 (3,405,000) (35) %

Cost of service and other revenue 572,000 1,525,000 (953,000) (62) %

Total cost of revenue 6,774,000 11,132,000 (4,358,000) (39) %

Operating expenses:

Research and development 5,299,000 16,608,000 (11,309,000) (68) %

Selling, general and administrative 17,379,000 30,644,000 (13,265,000) (43) %

Intangible assets and other long-lived assets impairment

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5,756,000 (998,000) 6,754,000 -677 %

Total other income (expenses) 5,370,000 (317,000) 5,687,000 -1,794 %

Total other income

6,322,000 502,000 5,820,000 1,159 %

Loss before income taxes (9,940,000) (47,637,000) 37,697,000 (79) %

Benefit (provision) for income taxes

Provision for income taxes

(18,000) (9,000) (9,000) 100 %

Net loss $ (9,958,000) $ (47,646,000) $ 37,688,000 (79) %

Product revenue decreased by $0.8 million, or 12%, to $6.0 million for the three months ended March 31, 2025, as compared to $6.8 million for the same period in 2024.

The decrease in product revenue was driven by a decrease of $0.9 million or 57% in instrument sales and a $0.2 million or 6% decrease in consumable sales, partially offset by an increase of $0.3 million or 18% in software sales.

Product revenue decreased by $1.0 million, or 8%, to $12.3 million for the six months ended June 30, 2025, as compared to $13.3 million for the same period in 2024.

The decrease in product revenue was driven by a decrease of $1.8 million or 46% in instrument sales, partially offset by increases of $0.5 million, or 8%, in consumable sales and $0.3 million, or 8%, in software sales.

We anticipated that this change in strategy would slow the pace of our revenue growth when compared to historical growth rates and that the reduced pace of our revenue growth will continue in 2025.

Service and other revenue decreased by $1.5 million or 77% for the three months ended March 31, 2025, compared to the same period in 2024 which is the result of discontinuing sales of certain clinical service offerings from Bionano Laboratories

effective March 2024.

Such clinical service offerings from Bionano Laboratories contributed to no revenues for the three months ended March 31, 2025, as compared to $1.4 million for the same period in 2024.

Service and other revenue decreased by $2.3 million, or 73%, for the six months ended June 30, 2025, as compared to the same period in 2024, which is the result of discontinuing sales of certain clinical service offerings from Bionano Laboratories effective March 2024.

Such clinical service offerings from Bionano Laboratories contributed no revenues for the six months ended June 30, 2025, as compared to $2.2 million for the same period in 2024.

We expect service and other revenue to decline in 2025 relative to 2024 as these service offerings were fully phased out as of December 31, 2024.

Cost of Revenue

Cost of product revenue decreased by $1.9 million, or 38%, to $3.1 million for the three months ended March 31, 2025, as compared to $4.9 million for the same period in 2024.

The decrease in cost of product revenue was due to lower sales of consumables and instruments offset by higher sales of software.

Cost of product revenue decreased by $3.4 million, or 35%, to $6.2 million for the six months ended June 30, 2025, as compared to $9.6 million for the same period in 2024.

The decrease in cost of product revenue was primarily due to lower sales of instruments, partially offset by higher sales of software and consumables.

We expect cost of product revenue to fluctuate with the volume of product sales.

Cost of service and other revenue decreased by $0.6 million, or 55%, to $0.5 million for the three months ended March 31, 2025, compared to $1.0 million for the same period in 2024.

Cost of service and other revenue decreased by $1.0 million, or 62%, to $0.6 million for the six months ended June 30, 2025, compared to $1.5 million for the same period in 2024.

The decrease in cost of service and other revenue was primarily due to discontinuing sales of certain clinical service offerings from Bionano Laboratories effective March 2024.

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Gross Profit, and Gross Margin

Three Months Ended March 31,

Six Months Ended June 30,

Period-to-Period Change

Gross profit (loss):

Gross profit:

Product $ 6,112,000 $ 3,731,000 $ 2,381,000 64%

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Total gross margin 49 % 33 %

Product gross profit increased by $1.0 million, or 53%, to $3.0 million for the three months ended March 31, 2025, compared to $1.9 million for the same period in 2024.

The increase in product gross profit was primarily due to an increase in software sales.

Service and other gross profit (loss) decreased by $0.9 million, or 101%, to $(0.01) million for the three months ended March 31, 2025, as compared to $0.9 million for the same period in 2024.

Product gross profit increased by $2.4 million, or 64%, to $6.1 million for the six months ended June 30, 2025, as compared to $3.7 million for the same period in 2024.

The increase in product gross profit was primarily due to an increase in consumable and software sales.

Service and other gross profit decreased by $1.4 million, or 82%, to $0.3 million for the six months ended June 30, 2025, as compared to $1.7 million for the same period in 2024.

The decrease in service and other gross profit was primarily due to discontinuing sales of certain clinical service offerings from Bionano Laboratories effective March 2024.

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Research and Development Expenses

Research and development (“R&D”) expenses decreased by $7.4 million, or 76%, to $2.4 million for the three months ended March 31, 2025 compared to $9.8 million for the same period in 2024.

The decrease was primarily due to a decrease of $4.4 million in salaries, wages and benefits driven by headcount reductions announced throughout 2023 and 2024 and $1.4 million in professional and consulting fees, including decreases in costs incurred to support clinical research studies, development of the Stratys system, foundry expenses, and cloud computing.

R&D expenses decreased by $11.3 million, or 68%, to $5.3 million for the six months ended June 30, 2025, as compared to $16.6 million for the same period in 2024.

The decrease was primarily due to a decrease of $6.8 million in salaries, wages and benefits driven by headcount reductions announced throughout 2023 and 2024 and a decrease of $2.5 million in professional and consulting fees, including decreases in costs incurred to support clinical research studies, development of the Stratys system, foundry expenses, and cloud computing.

Lastly, we reduced information technology and rent and facility costs by $0.2 million, and we reduced our internal consumption of inventory, materials and supplies by $1.8 million.

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Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses decreased by $10.1 million, or 53%, to $9.0 million for the three months ended March 31, 2025 compared to $19.1 million for the same period in 2024.

The decrease was primarily due to a $5.8 million decrease in salaries, wages and benefits driven by headcount reductions announced in 2023 and 2024, a $0.6 million decrease in the gain/loss recorded on fair value of the contingent consideration due for Purigen milestones, a $2.6 million decrease in professional and consulting fees which is primarily marketing, software, and legal expenses, and a $0.7 million decrease in travel and entertainment.

SG&A expenses decreased by $13.3 million, or 43%, to $17.4 million for the six months ended June 30, 2025, as compared to $30.6 million for the same period in 2024.

The decrease was primarily due to a $10.1 million decrease in salaries, wages and benefits driven by headcount reductions announced in 2023 and 2024;

a $4.8 million decrease in professional and consulting fees which is primarily marketing, software, and legal expenses;

a $1.0 million decrease in travel and entertainment;

a $0.9 million decrease in information technology and rent and facility costs;

a $0.9 million decrease in depreciation and amortization and a $0.4 million gain on lease modification.

These decreases were offset by a $5.1 million gain recorded on the fair value of the contingent consideration due for the Purigen milestones during the same period in 2024 as compared to no gain recorded for the six months ended June 30, 2025.

We anticipate that SG&A expenses will continue to decrease throughout 2025 as a result of our cost saving initiatives announced in March and September 2024.

Intangible Assets and Other Long-lived Assets Impairment

The Company recognized no impairment losses on intangible assets and other long-lived assets during the three months ended March 31, 2025, as compared to $0.4 million for the same period in 2024.

The Company recognized no impairment losses on intangible assets and other long-lived assets during the six months ended June 30, 2025, as compared to $0.4 million for the same period in 2024.

These losses were due to our restructuring initiatives and change in business strategy announced in 2024.

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Restructuring Costs

The Company had no expenses that were classified as restructuring costs during the three months ended March 31, 2025, as compared to $4.6 million during the same period in 2024.

The Company had no expenses that were classified as restructuring costs during the six months ended June 30, 2025, as compared to $5.8 million during the same period in 2024.

These restructuring costs were the result of our cost saving initiatives announced in 2024.

Interest Income

Interest income was $0.3 million for the three months ended March 31, 2025, as compared to $1.0 million for the same period in 2024.

The decrease is the result of a reduction in investments offset by higher returns.

Interest income was $0.6 million for the six months ended June 30, 2025, as compared to $1.5 million for the same period in 2024.

The decrease is primarily the result of a reduction in investments, partially offset by higher returns.

Other Income (Expense)

Other income was $5.1 million for the three months ended March 31, 2025 compared to other expense of $1.4 million for the same period in 2024.

The increase to other income was primarily driven by a $6.2 million increase (net gain) in the total change in fair value adjustments, principal redemptions and interest payments of the convertible High Trail Notes and purchase option outstanding as of March 31, 2024, as compared to the total change in fair value adjustments, principal redemptions and interest payments of the convertible debentures payable outstanding as of March 31, 2025.

Other income was $5.8 million for the six months ended June 30, 2025, as compared to other expense of $1.0 million for the same period in 2024.

The change was primarily driven by a loss recorded on the issuance of the JGB Debentures of $1.9 million during the six months ended June 30, 2024 , debt issuance costs recorded in connection with the debt instruments of $1.4 million during the six months ended June 30, 2024, an increase in the change in fair value (net gain) of $5.3 million for the convertible High Trail Notes, Purchase Option, and convertible debentures during the six months ended June 30, 2025, and an increase in other income of $2.0 million primarily related to an ERC refundable tax credit received during the six months ended June 30, 2025 from the IRS for eligible businesses affected by the COVID-19 pandemic.

These changes were offset by a net gain on the extinguishment of the High Trail Note and Purchase Option of $4.0 million during the six months ended June 30, 2025.

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Since our inception, we have incurred net losses and negative cash flows from operations.

We incurred net losses of $3.1 million and $31.4 million, and used $2.8 million and $28.1 million of cash from our operating activities for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, we had an accumulated deficit of $696.3 million, cash and cash equivalents of $3.6 million, $14.6 million in short-term investments and $11.0 million in restricted short-term investments.

We incurred net losses of $10.0 million and $47.6 million, and used $6.3 million and $49.1 million of cash from our operating activities for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, we had an accumulated deficit of $703.2 million, cash and cash equivalents of $3.6 million, $12.9 million in short-term investments and $11.0 million in restricted short-term investments.

Sources of Liquidity and Capital Resources

In the three months ended March 31, 2025, we have generated cash flows from sales of common stock and other equity instruments.

In the six months ended June 30, 2025, we have generated cash flows from sales of common stock and other equity instruments.

We anticipate that future sources of liquidity will principally come from sales of common stock and other equity instruments, borrowings from credit facilities and revenue from our commercial operations.

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As consideration for the Amendment, the Company issued to the Selling Securityholders approximately 83,000 shares of its common stock (the “Private Placement Shares”).

As of March 31, 2025, the Company reported $13.0 million of Debentures at fair value, which is classified as current on the unaudited condensed consolidated balance sheet.

For the three months ended March 31, 2025, the Company paid $0.4 million in interest and $1.5 million in principal redemption amounts on the Debentures.

As of March 31, 2025, the Company may be required to redeem up to $8.9 million of principal and expects to pay an additional $0.9 million in interest on the Debentures for the remainder of 2025.

As of June 30, 2025, the Company reported $11.8 million of Debentures at fair value, which is classified as current on the unaudited condensed consolidated balance sheet.

For the six months ended June 30, 2025, the Company paid $0.8 million in interest and $3.0 million in principal redemption amounts on the Debentures.

As of June 30, 2025, the Company may be required to redeem up to $7.4 million of principal and expects to pay an additional $0.6 million in interest on the Debentures for the remainder of 2025.

See Note 5 (Debt) in the accompanying notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for further information.

On January 3, 2025, the Company entered into a securities purchase agreement (the “January 2025 Purchase Agreement”) with certain institutional investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering priced at-the-market consistent with the rules of the Nasdaq Stock Market (the “January 2025 Offering”) (i) an aggregate of approximately 382,000 shares of the Company’s common stock (as adjusted for the reverse stock split) , (ii) pre-funded warrants to purchase up to an aggregate of approximately 280,000 shares of common stock (as adjusted for the reverse stock split) (the “January Pre-Funded Warrants”) and (iii) warrants to purchase up to an aggregate of approximately 661,000 shares of common stock (as adjusted for the reverse stock split) (the “January Purchase Warrants”).

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 (i) an aggregate of approximately 382,000 shares of the Company’s common stock (as adjusted for the reverse stock split) , (ii) pre-funded warrants to purchase up to an aggregate of approximately 280,000 shares of common stock (as adjusted for the reverse stock split) (the “January Pre-Funded Warrants”) and (iii) warrants to purchase up to an aggregate of approximately 661,000 shares of common stock (as adjusted for the reverse stock split) (the “January Purchase Warrants”).

Each share of common stock and each January Pre-Funded Warrant sold pursuant to the January 2025 Purchase Agreement were accompanied by a January Purchase Warrant.

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The combined purchase price of each January Pre-Funded Warrant and accompanying January Purchase Warrant was $15.119 (equal to the combined purchase price per share of common stock and accompanying January Purchase Warrant, minus $0.001) (as adjusted for the reverse stock split) .

The gross proceeds to the Company from the January 2025 Offering were approximately $10.0 million (excluding up to approximately $10.0 million of aggregate gross proceeds that may be received in the future upon the cash exercise of the January Purchase Warrants which is contingent upon stockholder approval), before deducting placement agent fees and other offering expenses payable by the Company.

The gross proceeds to the Company from the January 2025 registered direct offering were approximately $10.0 million (excluding up to approximately $10.0 million of aggregate gross proceeds that may be received in the future upon the cash exercise of the January Purchase Warrants which was contingent upon stockholder approval), 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”).

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The January Pre-Funded Warrants were immediately exercisable and were exercised in full in January 2025.

On June 11, 2025, the Company held its 2025 Annual Meeting of Stockholders (the “Annual Meeting”) and obtained stockholder approval, in compliance with Nasdaq Listing Rule 5635(d), for the issuance of the shares of common stock issuable upon exercise of the January Purchase Warrants issued in a registered direct offering on January 3, 2025.

See Note 6 (Stockholder’s Equity and Stock-Based Compensation) in the accompanying notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for further information.

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We expect such expenditures to continue throughout the balance of 2025.

As of March 31, 2025, we had $3.6 million in cash and cash equivalents, $14.6 million in short-term investments and $11.0 million in restricted short-term investments.

As of June 30, 2025, we had $3.6 million in cash and cash equivalents, $12.9 million in short-term investments and $11.0 million in restricted short-term investments.

The amount we are required to hold as restricted cash or restricted investments is equal to the lesser of (a) $11.0 million and (b) the then outstanding principal balance of the Debentures.

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debt financing, equity investments, combinations with other companies, or the sale of all or part of the company.

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Net cash provided by (used in):

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities $ (6,251,000) $ (49,109,000)

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however, our financial condition may result in certain additional restructuring or advisory expenses which may result in our corporate expenditures increasing, potentially materially, and we may observe fluctuations in the cash used in operating activities on a quarterly basis to sustain our current commercial offerings.

Net cash used in operating activities was $2.8 million during the three months ended March 31, 2025 as compared to $28.1 million during the same period in 2024.

Net cash used in operating activities was $6.3 million during the six months ended June 30, 2025, as compared to $49.1 million during the same period in 2024.

The decrease in cash used in operating activities of $42.9 million was primarily attributed to a decrease in our net loss and a decrease in our working capital usage as a result of our cost saving initiatives that were initiated in 2024.

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We expect to continue to incur additional costs for capital expenditures related to these efforts in future periods.

During the three months ended March 31, 2025, net cash used in investing activities was $14.1 million, as compared to $47.6 million provided by investing activities during the same period in 2024.

The decrease in cash provided by investing activities of $61.7 million was primarily attributed to the maturity of $50.7 million in available for sale securities which was offset by a higher purchase of available for sale securities of $64.8 million during the three months ended March 31, 2025, as compared to the maturity of $158.2 million in available for sale securities offset by a purchase of $110.6 million of available for sale securities during the same period in 2024.

During the six months ended June 30, 2025, net cash used in investing activities was $12.1 million, as compared to $76.2 million provided by investing activities during the same period in 2024.

The decrease in cash provided by investing activities of $88.3 million was primarily attributed to the maturity of $104.6 million in available for sale securities, which was offset by a higher purchase of available for sale securities of $116.6 million during the six months ended June 30, 2025, as compared to the maturity of $227.9 million in available for sale securities, which was partially offset by a purchase of $151.6 million of available for sale securities during the same period in 2024.

Financing Activities

Net cash provided by financing activities was $10.9 million during the three months ended March 31, 2025 as compared to net cash used in financing activities of $21.6 million during the same period in 2024, an increase of $32.5 million.

During the three months ended March 31, 2025, the Company made principal payments of $1.5 million towards the convertible debentures payable, as compared to principal payments of $36.7 million towards the convertible High Trail Notes payable during the same period in 2024, and $13.3 million in gross proceeds from executing sales under our at-the-market facilities with Cowen and Company, LLC (“Cowen”) and H.C.

Wainwright & Co., LLC (“Wainwright”) during the three months ended March 31, 2025, as compared to $15.4 million during the same period in 2024.

Net cash provided by financing activities was $12.4 million during the six months ended June 30, 2025 as compared to net cash used in financing activities of $23.6 million during the same period in 2024, an increase of $36.0 million.

During the six months ended June 30, 2025, the Company made principal payments of $3.0 million towards the convertible debentures payable, as compared to principal payments of $62.4 million towards the convertible High Trail Notes payable and the convertible debentures payable, $5.4 million incurred for the debt issuance costs recorded from the issuance of the convertible debentures, which was partially offset by approximately $18.0 million in gross proceeds received from the issuance of the convertible debentures during the same period in 2024, and $16.4 million in gross proceeds from executing sales under our at-the-market facilities with Cowen and Company, LLC (“Cowen”) and H.C.

Wainwright & Co., LLC (“Wainwright”) during the six months ended June 30, 2025, as compared to $27.6 million during the same period in 2024.

Capital Resources

As of March 31, 2025, we had approximately $3.6 million in cash and cash equivalents, $14.6 million in short-term investments , $11.0 million in restricted short-term investments and working capital of $18.5 million.

As of June 30, 2025, we had approximately $3.6 million in cash and cash equivalents, $12.9 million in short-term investments, $11.0 million in restricted short-term investments and working capital of $18.5 million.

The amount we are required to hold as restricted cash or restricted investments is equal to the lesser of (a) $11.0 million and (b) the then outstanding principal balance of the Debentures (as defined in Note 5 (Debt) to our unaudited condensed consolidated financial statements).

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On February 4, 2025, the Company provided notice of its termination, effective February 14, 2025, of the Cowen ATM.

On February 21, 2025, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with Wainwright, pursuant to which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $75.0 million, through or to Wainwright, acting as sales agent or principal,

pursuant to the Shelf Registration Statement.

stock having an aggregate offering price of up to $75.0 million, through or to Wainwright, acting as sales agent or principal, pursuant to the Shelf Registration Statement.

In February and March 2025, the Company sold approximately 0.4 million shares of common stock under the ATM Agreement and received gross proceeds of approximately $1.4 million before deducting offering costs of $0.05 million.

On March 31, 2025, upon filing our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, we became subject to the offering limits in General Instruction I.B.6 of Form S-3.

Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell shares of our common stock under our Shelf Registration Statement with a value of more than one-third of our public float in any 12-month period, so long as our public float is less than $75.0 million.

In the three months ended June 30, 2025, the Company sold approximately 0.8 million shares of common stock under the ATM Agreement for gross proceeds of approximately $3.1 million before deducting offering costs of $0.09 million.

On March 31, 2025, the date we filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, our public float was less than $75 million, As a result, we became subject to the offering limits in General Instruction I.B.6 of Form S-3.

Pursuant to General Instruction I.B.6 of Form S-3, for-so long as our public float is less than $75 million, the amount we can raise through primary public offerings of securities in any twelve-month period using shelf registration statements is limited to one-third of our public float.

On April 2, 2025, we filed an amendment to the prospectus dated May 10, 2023 and the prospectus supplement, dated February 21, 2025, relating to the ATM Agreement with Wainwright (the “ATM Prospectus”), to update the amount of shares of our common stock we are eligible to sell under General Instruction I.B.6 of Form S-3, as described above, and pursuant to the ATM Agreement.

Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell shares of our common stock pursuant to the ATM Prospectus, as amended, with a value of more than one-third of our public float in any 12-month period, so long as our public float is less than $75.0 million.

If our public float increases or decreases, the number of securities we may sell under our shelf registration statements in accordance with General Instruction I.B.6 of Form S-3 will also increase or decrease, respectively.

If our public float increases above $75.0 million such that we may sell additional amounts under the ATM Agreement and the ATM Prospectus, we will file another amendment to the ATM Prospectus prior to making additional sales in excess of the limitations of General Instruction I.B.6 of Form S-3.

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Historically, revisions to our estimates have not resulted in a material change to our financial statements.

During the three months ended March 31, 2025, there have been no changes to our critical accounting policies and estimates as described in our Annual Report.

During the six months ended June 30, 2025, there have been no changes to our critical accounting policies and estimates as described in our Annual Report.

Recent Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis