Bionano Genomics, Inc. 10-Q

ITEM 2. 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 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. only. “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, 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. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth under Part II, Item 1A. Risk Factors in this Quarterly Report and in our other filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements. Overview We are a provider of genome analysis solutions that can enable researchers and clinicians to reveal answers to challenging questions in biology and medicine. Our mission is to transform the way the world sees the genome through optical genome mapping (“OGM”) solutions, diagnostic services and software. We offer OGM solutions for applications across basic, translational and clinical research, and for other applications including bioprocessing. We offer a platform-agnostic software solution, which integrates next-generation sequencing, microarray and OGM data designed to provide analysis, visualization, interpretation and reporting of copy number variants, single-nucleotide variants and absence of heterozygosity across the genome in one consolidated view. The Company also offers nucleic acid extraction and purification solutions using proprietary isotachophoresis (“ITP”) technology. Through our Bionano Laboratories business, we also provide OGM-based diagnostic testing services. Recent Highlights Commercial Adoption of Offerings for OGM Systems In executing on our commercialization strategy, we expanded the utilization of our OGM systems (our Saphyr system and our Stratys system) and: • 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 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. In its current form, the OGM cartridge can comprise one, two or three flowcells per cartridge. Flowcells sold refers to the units of genome mapping consumables used for analyzing one genome, purchased by customers to process samples for optical genome mapping. 30 Table of Contents Macroeconomic and Geopolitical Developments We are subject to additional risks and uncertainties as a result of adverse geopolitical and macroeconomic developments, such as recent and potential future bank failures, the ongoing conflicts between Ukraine and Russia and in the Middle East, related sanctions, any effects of global pandemics and uncertain market conditions, including inflation and supply chain disruptions, and international trade policies (including trade protection measures, such as tariffs, sanctions and other trade barriers), changes in monetary and fiscal policy, United States political developments and other sources of instability which, have not had a material impact on our business and financial results to date, but could result in a material impact to our business or financial results in the future. Additionally, we have experienced a slowdown in our Asia Pacific business, including as a result of headwinds in the region, which negatively impacted our manufacturing partners who are reliant on government funding. While our manufacturing partners in the Asia Pacific region have obtained some approvals from the National Medical Products Administration (“NMPA”), and are waiting on more, we do not anticipate that the funding headwinds will change in the near term. Following the invasion of Ukraine by Russia, the U.S. and global financial markets experienced volatility, which has led to disruptions to trade, commerce, pricing stability, credit availability, supply chain continuity and reduced access to liquidity globally. In response to the invasion, the United States, UK and EU, along with others, imposed significant new sanctions and export controls against Russia, Russian banks and certain Russian individuals and may implement additional sanctions or take further punitive actions in the future. The full economic and social impact of the sanctions imposed on Russia and possible future punitive measures that may be implemented, as well as the counter measures imposed by Russia, in addition to the ongoing military conflict between Ukraine and Russia, which could conceivably expand into the surrounding region, remains uncertain; however, both the conflict and related sanctions have resulted, and could continue to result, in disruptions to trade, commerce, pricing stability, credit availability, supply chain continuity and reduced access to liquidity on acceptable terms, in both Europe and globally, and has introduced significant uncertainty into global markets. As a result, our business and results of operations may be adversely affected by the ongoing conflict between Ukraine and Russia and related sanctions, particularly to the extent it escalates to involve additional countries, further economic sanctions or wider military conflict. We closely monitor and comply with various applicable guidelines and legal requirements in the jurisdictions in which we operate. 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 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. As global economic conditions recover, business activity may not recover as quickly as anticipated, and it is not possible at this time to estimate the long-term impact that these and related events could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted. For instance, product demand may be reduced due to an economic recession, a decrease in corporate capital expenditures, prolonged unemployment, high inflation rates, labor shortages, reduction in consumer confidence, adverse geopolitical and macroeconomic developments, or any similar negative economic condition. These negative effects could have a material impact on our operations, business, earnings, and liquidity. Recent Developments The Company is currently negotiating an agreement with its instrument contract manufacturer under which it would make weekly deposits for future inventory purchases that began in April 2025 and will 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. See Note 7 (Commitments and Contingencies - Purchase Commitments) in the accompanying notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information. 31 Table of Contents Financial Overview Revenue We generate product revenue from sales of our OGM and Ionic ® Purification systems and consumables, which includes our instruments, and our VIA™ software. At the end of July 2023 we began installations of VIA software as a replacement to NxClinical software. Like NxClinical, VIA has a simple integrated workflow for visualization, interpretation and reporting of NGS and microarray data. VIA additionally incorporates OGM data to that workflow creating a standard software tool for use across molecular pathology and cytogenomics applications. We currently sell our systems for research use only applications and our customers are primarily laboratories associated with academic and governmental research institutions, academic and commercial clinical laboratories, as well as pharmaceutical, biotechnology and contract research companies. In addition, we provide instruments to certain customers at no cost under our reagent rental program, and the customers agree to purchase minimum quantities of consumables. Consumable revenue consists of sales of reagents and chips necessary to process a sample. Sales of our VIA software, which provides customers with solutions for analysis, interpretation and reporting of genomics data, are made on a subscription basis. We generate service revenue from the sale of diagnostic testing services through Bionano Laboratories, as well as services performed related to customer sample evaluations using an OGM system. Other revenue consists of warranty and other service-based revenue, including support, repair and maintenance services. The following table presents our revenue for the periods indicated: 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 Service and other revenue 423,000 1,261,000 876,000 3,202,000 Total $ 6,733,000 $ 7,771,000 $ 13,190,000 $ 16,540,000 The following table reflects total revenue by geography and as a percentage of total revenue, based on the billing address of our customers. Americas consists of North America and South America. EMEA consists of Europe, the Middle East, and Africa. Asia Pacific includes China, Japan, South Korea, Singapore, India and Australia. 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 % EMEA 3,228,000 47.9 % 3,624,000 46.6 % 6,294,000 47.7 % 6,757,000 40.9 % Asia Pacific 579,000 8.6 % 761,000 9.8 % 912,000 6.9 % 1,707,000 10.3 % Total $ 6,733,000 100 % $ 7,771,000 100 % $ 13,190,000 100 % $ 16,540,000 100 % Cost of Revenue Cost of product revenue for our systems and consumables includes raw material parts costs and associated freight, shipping and handling costs, contract manufacturing costs, salaries and other personnel costs, equipment depreciation, overhead and other direct costs related to those sales recognized as product revenue in the period. Cost of service and other revenue consists of third-party laboratory costs to process the diagnostic samples, salaries of our clinical technicians who interpret and deliver the results to patients, warranty services, and other costs of servicing equipment at customer sites. Research and Development Expenses Research and development expenses consist of salaries and other personnel costs, stock-based compensation, research supplies, third-party development costs for new products, materials for prototypes, equipment depreciation, and allocated overhead costs that include facility and other overhead costs. We have made substantial investments in research and development since our inception. Our research and development efforts have focused primarily on the tasks required to support development and commercialization of existing products. We believe that our continued investment in research and development is essential to our long-term competitive position. Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of salaries and other personnel costs, amortization expense related to acquired intangibles, and stock-based compensation for our sales and marketing, finance, legal, human resources and general management, as well as professional services, such as legal and accounting services. 32 Table of Contents Results of Operations We have incurred losses in each year since our inception. 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; • continue research and development efforts to improve our existing products; • enter into collaboration arrangements, if any; • maintain operational, financial and management information systems; and • incur increased costs as a result of operating as a public company. 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. From time to time, the board of directors maintains a strategy committee to work with the Company and outside advisors in evaluating our options and considering alternatives that we believe will maximize stakeholder value, including any of the following or a combination thereof: debt financing, equity investments, combinations with other companies, or the sale of all or part of the company. There can be no assurances that any transactions will be available to us or completed and if we are not able to raise sufficient additional capital in the very near term to fund our operation, we may seek relief available under applicable insolvency laws. We do not intend to make further announcements regarding this process unless and until the board of directors approves a specific transaction or otherwise determines that further disclosure is appropriate. 33 Table of Contents 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 2025 2024 $ % Revenues: Product revenue $ 6,310,000 $ 6,510,000 $ (200,000) (3) % Service and other revenue 423,000 1,261,000 (838,000) (66) % Total revenue 6,733,000 7,771,000 (1,038,000) (13) % Cost of revenue: Cost of product revenue 3,150,000 4,703,000 (1,553,000) (33) % Cost of service and other revenue 106,000 483,000 (377,000) (78) % Total cost of revenue 3,256,000 5,186,000 (1,930,000) (37) % Operating expenses: Research and development 2,931,000 6,831,000 (3,900,000) (57) % 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) % Other income 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) % Revenue 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. 34 Table of Contents Gross Profit, and Gross Margin Three Months Ended June 30, Period-to-Period Change 2025 2024 $ % 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 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 35 Table of Contents 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 2025 2024 $ % Revenues: 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 — 448,000 (448,000) (100) % Restructuring costs — 5,847,000 (5,847,000) (100) % Total operating expenses 22,678,000 53,547,000 (30,869,000) (58) % Loss from operations (16,262,000) (48,139,000) 31,877,000 (66) % Other income (expenses): Interest income 566,000 1,500,000 (934,000) (62) % Other income (expenses) 5,756,000 (998,000) 6,754,000 -677 % 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) % Provision for income taxes (18,000) (9,000) (9,000) 100 % Net loss $ (9,958,000) $ (47,646,000) $ 37,688,000 (79) % Revenue 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. 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 $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 36 Table of Contents 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 $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. 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 Six Months Ended June 30, Period-to-Period Change 2025 2024 $ % Gross profit: Product $ 6,112,000 $ 3,731,000 $ 2,381,000 64% Service and other 304,000 1,677,000 (1,373,000) (82)% Total gross profit $ 6,416,000 $ 5,408,000 $ 1,008,000 19% Gross margin: Product 50 % 28 % Service and other 35 % 52 % Total gross margin 49 % 33 % 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. 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 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. 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 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. 37 Table of Contents Intangible Assets and Other Long-lived Assets Impairment 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. See Note 1 (Organization and Basis of Presentation) in the accompanying notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for further discussion on the impairment charges that were recorded during the quarter. Restructuring Costs 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 $0.6 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 $5.8 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. 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. Liquidity and Capital Resources Since our inception, we have incurred net losses and negative cash flows from operations. 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 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. See Note 5 (Debt) and 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 a discussion of our recent debt and equity activity. 38 Table of Contents On May 24, 2024, we entered into a securities purchase agreement with certain accredited investors (the “Holders”) and JGB Collateral LLC, as collateral agent for the Holders, for the sale by the Company in a private placement (the “JGB Debentures Offering”) of: • 38,000 shares of the Company’s common stock, par value $0.0001 per share (“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 further discussion below). On May 23, 2024, in connection with the JGB Debentures Offering, the Company entered into a redemption agreement with High Trail (“High Trail Agreement”). Pursuant to the High Trail Agreement, the Company agreed to redeem the entire outstanding principal amount of $15.3 million under the High Trail Note at a redemption price of 115% for a total redemption payment of $17.6 million (the “Redemption Payment”). Upon High Trail’s receipt of the Redemption Payment on May 24, 2024, the High Trail Note and related Purchase Option to purchase additional High Trail Notes at fair value were cancelled. In addition, the Company agreed to pay High Trail a retirement fee of $2.2 million and to reimburse High Trail for all of its reasonable and documented out-of-pocket expenses incurred with the release and termination of security interests relating to the High Trail Note. On December 31, 2024, the Company entered into an amendment of the Debentures (the “Amendment”) with the Selling Securityholders. Pursuant to the Amendment, the parties agreed that (i) no amortization payment would be paid in December 2024; (ii) the maximum monthly amortization payments due between January 2025 and July 2025 would be reduced from $1.0 million per month to $0.5 million per month; (iii) the maximum monthly amortization payments due from August 2025 through repayment in full of the principal aggregate amount would be $1.4 million per month; (iv) the conversion price of the Debentures would be reduced from $120.00 to $16.20; and (v) the Debentures will become non-callable by the Company until August 2025. As consideration for the Amendment, the Company issued to the Selling Securityholders approximately 83,000 shares of its common stock (the “Private Placement Shares”). As of 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. 39 Table of Contents 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. 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 (as adjusted for the reverse stock split) . The combined purchase price of each January Pre-Funded Warrant and accompanying January Purchase Warrant was $15.119 (equal to the combined purchase price per share of common stock and accompanying January Purchase Warrant, minus $0.001) (as adjusted for the reverse stock split) . The gross proceeds to the Company from the January 2025 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”). The January Purchase Warrants will expire on the five-year anniversary of the Stockholder Approval. The January Pre-Funded Warrants were immediately exercisable and were exercised in full in January 2025. On 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. Based on our current business plans, we will continue to require additional capital in the very near term to fund our operating expenses and capital expenditure requirements, or we may need to further curtail or cease operations and seek protection by filing a voluntary petition for relief under the United States Bankruptcy Code. If this were to occur, the value available to our various stakeholders, including our creditors and stockholders, is uncertain and trading prices for our securities may bear little or no relationship to the actual recovery, if any, by holders of our securities in bankruptcy proceedings, if any. This estimate assumes the inclusion of the amount equal to the outstanding principal amount of the Debentures. Our existing cash and cash equivalents and short-term investments will not be sufficient for us to achieve cash-flow break even, and we expect to need to seek additional capital. Based on the Company’s current business plans we believe we will be able to fund our operating expenses and capital expenditure requirements into the first quarter of 2026. Future Capital Requirements We expect that our near and longer-term liquidity requirements will consist of working capital and general corporate expenses associated with the growth of our business, including, without limitation, expenses associated with scaling up our operations and continuing to increase our manufacturing capacity, sales and marketing expense, increasing market awareness of our products and services to target customers, instrument placements with customers via the reagent rental sales strategy, additional research and development expenses associated with expanding and proving the utility of our offerings, expenses associated with continuing to build out our corporate infrastructure, enhancements to information technology, restructuring and advisory fees, and expenses associated with being a public company. We expect such expenditures to continue throughout the balance of 2025. 40 Table of Contents 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. Based on recurring losses from operations incurred since inception and the expectation of continued operating losses, we anticipate our available cash balance will not be sufficient to operate our business for the next twelve months from the issuance of this Quarterly Report. Accordingly, we determined that there is substantial doubt about our ability to continue as a going concern within 12 months after the date that the financial statements included in this Quarterly Report are issued. In order to continue to operate our business beyond that time, we will need to raise substantial additional capital. We are actively evaluating debt and equity financing sources available to us as well as cost reduction strategies, but there can be no assurance that financing will be available on terms acceptable to us, on a timely basis, or at all, or that we are able to effectively reduce our operating expenses. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. Any disruptions to, or volatility in, the credit and financial markets or any deterioration in overall economic conditions may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive. If we are unable to raise additional funds through debt or equity financing or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research and development activities or future commercialization efforts. Even if we raise additional capital, we may also be required to modify, delay or abandon some of our plans which could have a material adverse effect on our business, operating results and financial condition and our ability to achieve our intended business objectives. In addition, our estimate as to the sufficiency of our current cash, cash equivalents and short-term investments and our current operating plan as discussed above are based on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we currently anticipate. See Note 1 (Organization and Basis of Presentation) in the accompanying notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for more information. If we are unable to continue as a going concern, we may have to reorganize or liquidate our business and may receive less than the value at which those assets are carried on our consolidated financial statements, and investors may lose all or a part of their investment. From time to time, the board of directors maintains a strategy committee to work with the Company and outside advisors in evaluating our options and considering alternatives that we believe will maximize stakeholder value, including any of the following or a combination thereof: debt financing, equity investments, combinations with other companies, or the sale of all or part of the company. There can be no assurances that any transactions will be available to us or completed and if we are not able to raise sufficient additional capital in the very near term to fund our operation, we may seek relief available under applicable insolvency laws. We do not intend to make further announcements regarding this process unless and until the board of directors approves a specific transaction or otherwise determines that further disclosure is appropriate. Cash Flows The following table sets forth the cash flow from operating, investing and financing activities for the periods presented: Net cash provided by (used in): Six Months Ended June 30, 2025 2024 Operating activities $ (6,251,000) $ (49,109,000) Investing activities (12,087,000) 76,217,000 Financing activities 12,360,000 (23,596,000) 41 Table of Contents Operating Activities We derive cash flows from operations primarily from the sale of our products and services. Our cash flows from operating activities are also significantly influenced by our use of cash for operating expenses to support the growth of our business. We have historically experienced negative cash flows from operating activities as we have developed our technology, expanded our business and built our infrastructure, and this may continue in the future. As discussed above, we anticipate our available cash balance will not be sufficient for the next twelve months from the issuance of this report. We expect to seek to raise additional capital to fulfill our operating and capital requirements for at least 12 months through equity or debt financings, however, we may not be able to secure such financing in a timely manner or on favorable terms, if it all, and if we are unable to raise sufficient additional capital in the very near term, we may need to further curtail or cease operations and seek protection by filing a voluntary petition for relief under the United States Bankruptcy Code. Our recent restructuring activities are anticipated to reduce the cash used in operating activities over the next 12 months; however, our financial condition may result in certain additional restructuring or advisory expenses which may result in our corporate expenditures increasing, potentially materially, and we may observe fluctuations in the cash used in operating activities on a quarterly basis to sustain our current commercial offerings. Net cash used in operating activities was $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. Investing Activities Historically, our primary investing activities have consisted of capital expenditures for the purchase of capital equipment to support our expanding infrastructure, as well as the acquisitions of Lineagen, BioDiscovery and Purigen to grow our business. We expect to continue to incur additional costs for capital expenditures related to these efforts in future periods. During the 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 $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 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). In order to fund our future operations, on March 10, 2023, we filed a universal shelf registration statement (the “Shelf Registration Statement”) with the SEC, which provides for aggregate offerings of up to $400.0 million of common stock, preferred stock, debt securities and warrants or any combination thereof. We also previously had in place a Sales Agreement with Cowen (the “Cowen ATM”), as amended, pursuant to which we were permitted to offer and sell from time to time shares of our common stock having an aggregate offering price of up to $200.0 million through or to Cowen, acting as sales agent or principal, pursuant to the Shelf Registration Statement. In January 2025, the Company sold approximately 0.1 million shares of common stock under the Cowen ATM and received gross proceeds of approximately $1.9 million before deducting offering costs of $0.05 million. On February 4, 2025, the Company provided notice of its termination, effective February 14, 2025, of the Cowen ATM. On February 21, 2025, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with Wainwright, pursuant to which the Company may offer and sell, from time to time at its sole discretion, shares of its common 42 Table of Contents 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. 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. If our public float increases or decreases, the number of securities we may sell under our shelf registration statements in accordance with General Instruction I.B.6 of Form S-3 will also increase or decrease, respectively. If our public float increases above $75.0 million such that we may sell additional amounts under the ATM Agreement and the ATM Prospectus, we will file another amendment to the ATM Prospectus prior to making additional sales in excess of the limitations of General Instruction I.B.6 of Form S-3. Contractual Obligations There were no material changes to our contractual obligations from those disclosed in the Company’s Annual Report. Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the date of the unaudited condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the periods presented. We have discussed the development, selection and disclosure of the accounting estimates with our audit committee. We believe that the estimates, judgments and assumptions are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. To the extent there are material differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected. Historically, revisions to our estimates have not resulted in a material change to our financial statements. 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 See Note 1 (Organization and Basis of Presentation) in the accompanying notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for information concerning recent accounting pronouncements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company, we are not required to provide the information required by this Item.