Item 2. Management’s Discussion and Analysis
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 months ended March 31, 2026 (this “Quarterly Report”) and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2025 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, 2025 (“Annual Report”), filed with the Securities and Exchange Commission (“SEC”) on March 23, 2026. Unless the context requires otherwise, references in this Quarterly Report 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 expressed or implied by the forward-looking statements, including, without limitation, the risks set forth under Part I, Item 1A. Risk Factors in our Annual 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 399 as of March 31, 2026, an increase of approximately 5% from a total installed base of 379 as of March 31, 2025. Installed base represents the global number of OGM instruments installed at end-customer locations and therefore having the technology to process OGM.
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• Sold 8,178 flowcells in the three-month period ended March 31, 2026, an increase of approximately 17% from 6,994 flowcells sold in the same period of 2025. The OGM cartridge is the consumable that packages nanochannel arrays for DNA linearization. In its current form, the OGM cartridge can comprise one, two or three flowcells per cartridge. Flowcells sold refers to the units of genome mapping consumables used for analyzing one genome, purchased by customers to process samples for optical genome mapping.
Macroeconomic and Geopolitical Developments
We are subject to additional risks and uncertainties as a result of adverse geopolitical and macroeconomic developments, such as recent and potential future bank failures, ongoing international conflicts, related sanctions, any effects of global pandemics and uncertain market conditions, including inflation and supply chain disruptions, and international trade policies (including trade protection measures, such as tariffs, sanctions and other trade barriers), changes in monetary and fiscal policy, United States political developments and other sources of instability, which have not had a material impact on our business and financial results to date, but could result in a material impact to our business or financial results in the future. Additionally, we have experienced a slowdown in our Asia Pacific business, including as a result of headwinds in the region, which negatively impacted our manufacturing partners who are reliant on government funding. While our manufacturing partners in the Asia Pacific region have obtained some approvals from the National Medical Products Administration, and are waiting on more, we do not anticipate that the funding headwinds will change in the near term.
We closely monitor and comply with various applicable guidelines and legal requirements in the jurisdictions in which we operate. In the past, we have experienced supply chain challenges, attributable to such adverse geopolitical and macroeconomic developments including increased costs to secure certain component parts in our products and to produce our products at our contract manufacturers. During the three months ended March 31, 2026, 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.
Financial Overview
Revenue
We generate product revenue from sales of our OGM and Ionic ® Purification systems and consumables, which includes our instruments, and our VIA software. VIA software is our replacement to our NxClinical software. Like NxClinical, VIA has a simple integrated workflow for visualization, interpretation and reporting of NGS and microarray data. VIA 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.
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The following table presents our revenue for the periods indicated (in thousands):
Three Months Ended March 31,
2026
2025
Product revenue
$
6,094
$
6,004
Service and other revenue
593
453
Total
$
6,687
$
6,457
The following table reflects total revenue (in thousands) 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 March 31,
2026
2025
$
%
$
%
Americas
$
2,494
37.3
%
$
3,058
47.3
%
EMEA
3,552
53.1
%
3,066
47.5
%
Asia Pacific
641
9.6
%
333
5.2
%
Total
$
6,687
100
%
$
6,457
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.
Results of Operations
We have incurred losses in each year since our inception. Our net loss was $8.3 million and $3.1 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $727.9 million.
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;
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• enter into collaboration arrangements, if any;
• maintain operational, financial and management information systems; and
• continue to incur 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 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.
Comparison of the Three Months Ended March 31, 2026 and 2025
The following table sets forth our results of operations for the three months ended March 31, 2026 and 2025 (in thousands):
Three Months Ended March 31,
Period-to-Period Change
2026
2025
$
%
Revenues:
Product revenue
$
6,094
$
6,004
$
90
1
%
Service and other revenue
593
453
140
31
%
Total revenue
6,687
6,457
230
4
%
Cost of revenue:
Cost of product revenue
3,205
3,053
152
5
%
Cost of service and other revenue
230
466
(236
)
(51
)%
Total cost of revenue
3,435
3,519
(84
)
(2
)%
Research and development
3,139
2,370
769
32
%
Selling, general and administrative
8,010
9,033
(1,023
)
(11
)%
Total operating expenses
11,149
11,403
(254
)
(2
)%
Loss from operations
(7,897
)
(8,465
)
568
(7
)%
Other income (expenses):
Interest income
223
290
(67
)
(23
)%
Other income (expenses)
(619
)
5,080
(5,699
)
(112
)%
Total other income (expenses)
(396
)
5,370
(5,766
)
(107
)%
Loss before income taxes
(8,293
)
(3,095
)
(5,198
)
168
%
Provision for income taxes
(10
)
(7
)
(3
)
43
%
Net loss
$
(8,303
)
$
(3,102
)
$
(5,201
)
168
%
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Revenue
Three Months Ended March 31,
Period-to-Period Change
2026
2025
$
%
Instruments
$
962
$
689
$
273
40
%
Consumables
3,900
3,247
653
20
%
Software
1,232
2,068
(836
)
(40
)%
Total product revenue
6,094
6,004
90
1
%
Services and other
593
453
140
31
%
Total revenue
$
6,687
$
6,457
$
230
4
%
Total revenue increased by $0.2 million, or 4% to $6.7 million for the three months ended March 31, 2026, as compared to $6.5 million for the same period in 2025, driven primarily by an increase in instrument, consumables, service and other revenue.
Instrument revenue increased by $0.3 million, or 40%, to $1.0 million for the three months ended March 31, 2026, as compared to $0.7 million for the three months ended March 31, 2025, due to an increase in the number of OGM and Ionic instruments sold. For the three months ended March 31, 2026, our installed base grew to 399 OGM systems compared to the 379 OGM systems for the three months ended March 31, 2025, which represented a 5% increase year-over-year as compared to a 9% year-over-year increase in the prior year. In September 2024, we announced a change in our business strategy to focus on driving utilization and adoption of OGM from our existing installed base, with less emphasis on new placements of our OGM systems. We expected that this change in strategy would slow the pace of our instrument revenue growth when compared to historical growth rates.
Consumables revenue increased by $0.7 million, or 20%, to $3.9 million for the three months ended March 31, 2026, as compared to $3.2 million for the three months ended March 31, 2025. The increase is primarily driven by an increase in both the number and the average selling price of flowcells sold, partially offset by certain supply constraints due to manufacturing delays that were initiated in the fourth quarter of 2025. For the three months ended March 31, 2026, we sold 8,178 flowcells, an increase of approximately 17% from 6,994 flowcells sold in the same period of 2025.
Software revenue decreased by $0.8 million, or 40%, to $1.2 million for the three months ended March 31, 2026, as compared to $2.1 million for the three months ended March 31, 2025. The decrease is primarily attributed to a decrease in the number of VIA software licenses sold.
Service and other revenue increased by $0.1 million, or 31%, to $0.6 million for the three months ended March 31, 2026, as compared to $0.5 million for the three months ended March 31, 2025. The increase was primarily due to an increase in clinical service offerings from Bionano Laboratories, in addition to an increase in extended warranty and maintenance sales.
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Cost of Revenue, Gross Profit, and Gross Margin ($ in thousands)
Three Months Ended March 31,
Period-to-Period Change
2026
2025
$
%
Cost of revenue:
Cost of product revenue
3,205
3,053
152
5
%
Cost of service and other revenue
230
466
(236
)
(51
)%
Total cost of revenue
3,435
3,519
(84
)
(2
)%
Gross profit (loss):
Product
$
2,889
$
2,951
$
(62
)
(2
)%
Service and other
363
(13
)
376
2892
%
Total gross profit
$
3,252
$
2,938
$
314
11
%
Gross margin:
Product
47
%
49
%
Service and other
61
%
(3
)%
Total gross margin
49
%
46
%
Cost of product revenue increased by $0.2 million or 5%, to $3.2 million for the three months ended March 31, 2026, as compared to $3.1 million for the three months ended March 31, 2025. The increase was primarily attributable to higher instrument and consumable sales. We expect cost of product revenue to vary with sales volume and product mix.
Cost of service and other revenue decreased by $0.2 million, or 51%, to $0.2 million for the three months ended March 31, 2026, as compared to $0.5 million for the three months ended March 31, 2025. The prior year period included a non-recurring increase in warranty expense associated with a refinement of the Company’s warranty reserve calculation methodology, while the current-year period reflects more normalized warranty expense levels.
Product gross profit decreased by $0.1 million, or 2%, to $2.9 million for the three months ended March 31, 2026, compared to $3.0 million for the three months ended March 31, 2025. The decrease was primarily driven by a decrease in software sales and an increase in lower margin instrument sales, offset by an increase in consumable sales.
Service and other gross profit increased by $0.4 million to $0.4 million for the three months ended March 31, 2026, compared to a gross loss of $(0.01) million for the three months ended March 31, 2025. The increase in service and other gross profit was primarily driven by the non-recurring increase in warranty expense recognized in the prior period. In addition, revenues increased from clinical service offerings through Bionano Laboratories and instrument service contracts.
Research and Development (“R&D”) Expenses
R&D expenses increased by $0.8 million, or 32%, to $3.1 million for the three months ended March 31, 2026, as compared to $2.4 million for the same period in 2025. The increase was primarily due to increases of $0.2 million in salaries, wages and benefits driven by a slight increase in headcount and an increase in salaries and bonuses which were not offered during the same period in 2025 due to the cost savings initiatives announced in 2024; an increase of $0.4 million in professional and consulting fees, including increases in costs incurred to support development of the Stratys system and foundry expenses. Lastly, we increased internal consumption of inventory, materials and supplies by $0.2 million.
Selling, General and Administrative Expenses
Selling, general and administrative (“SG&A”) expenses decreased by $1.0 million, or 11%, to $8.0 million for the three months ended March 31, 2026, as compared to $9.0 million for the same period in 2025. The decrease was primarily due to a net decrease of headcount-related expenses of $0.3 million including a reduction in stock-based compensation due to a reduction in the number of grants awarded, offset by an increase in salaries and accrued bonuses, and a $1.3 million decrease in professional and consulting fees which is primarily
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marketing, software, and legal expenses. These decreases were partially offset by the absence of a $0.4 million gain on lease modification recorded in the prior period and a $0.2 million increase in information technology, travel, rent and facility costs.
Interest Income
Interest income decreased by $0.1 million, or 23%, to $0.2 million for the three months ended March 31, 2026, as compared to $0.3 million for the same period in 2025 resulting from a reduction in investments offset by higher returns.
Other Income (Expense)
Other expense was $(0.6) million for the three months ended March 31, 2026, as compared to other income of $5.1 million for the same period in 2025. The decrease in other income (expense) was primarily driven by a change in the fair value remeasurements. We recognized a net loss of $0.5 million from the changes in the fair value of the convertible debentures during the three months ended March 31, 2026, as compared to a (net gain) of $5.1 million for the same period in 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 $8.3 million and $3.1 million, and used $5.7 million and $2.8 million of cash from our operating activities for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $727.9 million, cash and cash equivalents of $3.4 million, $11.0 million in short-term investments and $10.3 million in restricted cash and short-term investments.
Sources of Liquidity and Capital Resources
In the three months ended March 31, 2026, we generated cash flows from sales of common stock and other equity instruments. We anticipate that future sources of liquidity will principally come from sales of common stock and other equity instruments, borrowings from credit facilities and revenue from our commercial operations. See Note 5 (Debt) and 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 a discussion of our recent debt and equity activity.
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.
On December 31, 2024, the Company entered into an amendment of the Debentures (the “Amendment”) with the Holders. Pursuant to the Amendment, the parties agreed that (i) no amortization payment would be paid in December 2024; (ii) the maximum monthly amortization payments due between January 2025 and July 2025 would be reduced from $1.0 million per month to $0.5 million per month; (iii) the maximum monthly amortization payments due from August 2025 through repayment in full of the principal aggregate amount would be $1.4 million per month; (iv) the conversion price of the Debentures would be reduced from $120.00 to $16.20; and (v) the Debentures will become non-callable by the Company until August 2025. As consideration for the Amendment, the Company issued to the Holders approximately 83,000 shares of its common stock (the “Private Placement Shares”).
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As of March 31, 2026, the Company reported $10.2 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, 2026, the Company paid $0.3 million in interest and zero in principal redemption amounts on the Debentures. As of March 31, 2026, the Company may be required to redeem up to $10.3 million of principal and expects to pay an additional $0.2 million in interest on the Debentures for the remainder of 2026. See Note 5 (Debt) 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 at least the first quarter of 2027.
Future Capital Requirements
We expect that our near and longer-term liquidity requirements will consist of working capital and general corporate expenses associated with the growth of our business, including, without limitation, expenses associated with scaling up our operations and continuing to increase our manufacturing capacity, sales and marketing expense, increasing market awareness of our products and services to target customers, instrument placements with customers via the reagent rental sales strategy, additional research and development expenses associated with expanding and proving the utility of our offerings, expenses associated with continuing to build out our corporate infrastructure, enhancements to information technology, restructuring and advisory fees, and expenses associated with being a public company. We expect such expenditures to continue throughout the balance of 2026.
As of March 31, 2026, we had $3.4 million in cash and cash equivalents, $11.0 million in short-term investments and $10.3 million in restricted cash and short-term investments. The amount we are required to hold as restricted cash or restricted investments is equal to the lesser of (a) $11.0 million and (b) the then outstanding principal balance of the Debentures. As of March 31, 2026, the Company had $10.3 million of principal outstanding under the Debentures. Based on recurring losses from operations incurred since inception and the expectation of continued operating losses, we anticipate our available cash balance will not be sufficient to operate our business for the next twelve months from the issuance of this 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
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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 (in thousands):
Three Months Ended March 31,
2026
2025
Net cash provided by (used in):
Operating activities
$
(5,716
)
$
(2,764
)
Investing activities
5,457
(14,066
)
Financing activities
657
10,891
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 through equity or debt financings to fulfill our operating and capital requirements for at least 12 months; however, we may not be able to secure such financing in a timely manner or on favorable terms, if at 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 $5.7 million during the three months ended March 31, 2026, as compared to $2.8 million during the same period in 2025. The increase in cash used in operating activities of $3.0 million was primarily attributed to an increase in inventory purchases and an increase in salaries, wages, and benefits driven by a slight increase in headcount and an increase in accrued salaries, wages, and bonuses.
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 three months ended March 31, 2026, net cash provided by investing activities was $5.5 million, as compared to net cash used in investing activities was $14.1 million during the same period in 2025. The increase in cash provided by investing activities of $19.5 million was primarily attributed to the maturity of $54.1 million in available for sale securities, which was offset by the purchase of available for sale securities of $48.7 million
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during the three months ended March 31, 2026, as compared 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 same period in 2025.
Financing Activities
Net cash provided by financing activities was $0.7 million during the three months ended March 31, 2026 as compared to $10.9 million during the same period in 2025, a decrease of $10.2 million. During the three months ended March 31, 2026, the Company made no principal payments towards the convertible debentures payable, as compared to principal payments of $1.5 million during the same period in 2025, and $0.7 million in gross proceeds from executing sales under our at-the-market facilities with H.C. Wainwright & Co., LLC (“Wainwright”) during the three months ended March 31, 2026, as compared to $13.3 million in gross proceeds from executing sales under our at-the-market facilities with Cowen and Company, LLC (“Cowen”) during the same period in 2025.
Capital Resources
As of March 31, 2026, we had approximately $3.4 million in cash and cash equivalents, $11.0 million in short-term investments, $10.3 million in restricted cash and short-term investments and working capital of $17.7 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). As of March 31, 2026, the Company had $10.3 million of principal outstanding under the Debentures.
In order to fund our future operations, on March 10, 2023, we filed a universal shelf registration statement (the “Shelf Registration Statement”) with the SEC, which provides for aggregate offerings of up to $400.0 million of common stock, preferred stock, debt securities and warrants or any combination thereof. We also previously had in place a Sales Agreement with Cowen (the “Cowen ATM”), as amended, pursuant to which we were permitted to offer and sell from time to time shares of our common stock having an aggregate offering price of up to $200.0 million through or to Cowen, acting as sales agent or principal, pursuant to the Shelf Registration Statement. 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. During the three months ended March 31, 2026, the Company sold approximately 0.5 million shares of common stock under the ATM Agreement at an average share price of $1.32 per share and received gross proceeds of approximately $0.7 million before deducting offering costs of $0.03 million.
Under the rules of the SEC, the Shelf Registration Statement was set to become unavailable to register the offer or sale of new securities beginning on May 10, 2026. Therefore, on May 8, 2026, we filed a new universal shelf registration statement on Form S-3 (the “New Shelf Registration Statement”) with the SEC to replace the Shelf Registration Statement. The New Shelf Registration Statement provides for aggregate offerings of up to $400.0 million of common stock, preferred stock, debt securities, warrants and units or any combination thereof. During the additional 180-day period following the three-year anniversary date of the effective date of the Shelf Registration Statement afforded by Rule 415(a)(5) under the Securities Act, we may offer and sell any unsold securities under the Shelf Registration Statement until the SEC declares the New Shelf Registration Statement effective. Pursuant to Rule 415(a)(6) under the Securities Act, the offering of any unsold securities under the Shelf Registration Statement will be deemed terminated as of the date of effectiveness of the New Shelf Registration Statement. Upon the filing of an appropriate prospectus supplement or supplements under either the Shelf Registration Statement or, upon its effectiveness, the New Shelf Registration Statement, we may offer and sell our securities from time to time in one or more offerings, at our discretion.
On March 31, 2025, the date we filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, our public float was less than $75 million. As a result, we became subject to the offering limits in General Instruction I.B.6 of Form S-3. Pursuant to General Instruction I.B.6 of Form S-3, for so long as our public float is less than $75 million, the amount we can raise through primary public offerings of securities in any twelve-month period using shelf registration statements is limited to one-third of our public float. If
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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 three months ended March 31, 2026, 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.
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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.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.