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, 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 397 as of June 30, 2026, an increase of approximately 5% from a total installed base of 378 as of June 30, 2025. Installed base represents the global number of OGM instruments installed at end-customer locations and therefore having the technology to process OGM. 24 Table of Contents • Sold 9,219 flowcells in the three-month period ended June 30, 2026, an increase of approximately 27 % from 7,233 flowcells sold in the same period of 2025. Sold 17,397 flowcells in the six-month period ended June 30, 2026, an increase of approximately 22% from 14,227 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 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. Also, we have seen, and expect to continue to see, an impact on our costs due to higher computing component costs, specifically memory, which may result in material cost pressures and supply constraints in future periods. Additionally, for the three months ended June 30, 2026, we experienced slower growth in our Asia Pacific business, including as a result of headwinds in the region. We do not anticipate that these 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 six months ended June 30, 2026, we did not experience overall material increases in our supply chain costs, but we have and may continue to experience increases in our computing component costs, specifically memory, and may experience increases in future fiscal periods for other parts of our business as well. We expect our costs to remain high for the foreseeable future. As global economic conditions continue to be volatile, business activity may not grow 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 has a simple integrated workflow for visualization, interpretation and reporting of NGS, microarray and OGM data to create 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 under our reagent rental program, where the cost of the instrument is factored into the price of a consumable and, the customer agrees to purchase minimum quantities of consumables. Consumable revenue consists of sales of reagents and chips necessary to process a sample. We believe that the growth in our consumable sales has been primarily driven by increased clinical adoption, and we expect future growth will continue to be driven by clinical adoption and increased utilization at existing and new clinical sites. 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. 25 Table of Contents The following table presents our revenue for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Product revenue $ 7,693 $ 6,310 $ 13,787 $ 12,314 Service and other revenue 478 423 1,071 876 Total $ 8,171 $ 6,733 $ 14,858 $ 13,190 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 $ % $ % $ % $ % Americas $ 3,023 37.0 % $ 2,926 43.5 % $ 5,517 37.1 % $ 5,984 45.4 % EMEA 4,841 59.2 % 3,228 47.9 % 8,393 56.5 % 6,294 47.7 % Asia Pacific 307 3.8 % 579 8.6 % 948 6.4 % 912 6.9 % Total $ 8,171 100 % $ 6,733 100 % $ 14,858 100 % $ 13,190 100 % 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 $7.4 million and $15.7 million for the three and six months ended June 30, 2026, respectively. As of June 30, 2026, we had an accumulated deficit of $735.3 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; 26 Table of Contents • 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 June 30, 2026 and 2025 The following table sets forth our results of operations for the three months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, Period-to-Period Change 2026 2025 $ % Revenues: Product revenue $ 7,693 $ 6,310 $ 1,383 22 % Service and other revenue 478 423 55 13 % Total revenue 8,171 6,733 1,438 21 % Cost of revenue: Cost of product revenue 3,724 3,150 574 18 % Cost of service and other revenue 133 106 27 25 % Total cost of revenue 3,857 3,256 601 18 % Research and development 2,988 2,931 57 2 % Selling, general and administrative 8,544 8,346 198 2 % Total operating expenses 11,532 11,277 255 2 % Loss from operations (7,218 ) (7,800 ) 582 (7 )% Other income (expenses): Interest income 146 277 (131 ) (47 )% Other income (expenses) (344 ) 676 (1,020 ) (151 )% Total other income (expenses) (198 ) 953 (1,151 ) (121 )% Loss before income taxes (7,416 ) (6,847 ) (569 ) 8 % Benefit (provision) for income taxes (7 ) (10 ) 3 (30 )% Net loss $ (7,423 ) $ (6,857 ) $ (566 ) 8 % 27 Table of Contents Revenue Three Months Ended June 30, Period-to-Period Change 2026 2025 $ % Instruments $ 2,037 $ 1,399 $ 638 46 % Consumables 4,285 3,276 1,009 31 % Software 1,371 1,635 (264 ) (16 )% Total product revenue 7,693 6,310 1,383 22 % Services and other 478 423 55 13 % Total revenue $ 8,171 $ 6,733 $ 1,438 21 % Total revenue increased by $1.4 million, or 21% to $8.2 million for the three months ended June 30, 2026, as compared to $6.7 million for the same period in 2025, driven primarily by an increase in instrument, consumables, service and other revenue, partially offset by a decrease in software revenue. Instrument revenue increased by $0.6 million, or 46%, to $2.0 million for the three months ended June 30, 2026, as compared to $1.4 million for the three months ended June 30, 2025, due to an increase in the number of OGM and Ionic instruments sold. As of June 30, 2026, our installed base grew to 397 OGM systems compared to the 378 OGM systems as of June 30, 2025, which represented a 5% increase year-over-year. Consumables revenue increased by $1.0 million, or 31%, to $4.3 million for the three months ended June 30, 2026, as compared to $3.3 million for the three months ended June 30, 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 and continued through the current period. For the three months ended June 30, 2026, we sold 9,219 flowcells, an increase of approximately 27% from 7,233 flowcells sold in the same period of 2025. Software revenue decreased by $0.3 million, or 16%, to $1.4 million for the three months ended June 30, 2026, as compared to $1.6 million for the three months ended June 30, 2025. The decrease is primarily attributed to a decrease in the number of VIA software licenses sold. The change in service and other revenue was immaterial. Cost of Revenue, Gross Profit, and Gross Margin ($ in thousands) Three Months Ended June 30, Period-to-Period Change 2026 2025 $ % Cost of revenue: Cost of product revenue 3,724 3,150 574 18 % Cost of service and other revenue 133 106 27 25 % Total cost of revenue 3,857 3,256 601 18 % Gross profit (loss): Product $ 3,969 $ 3,160 $ 809 26 % Service and other 345 317 28 9 % Total gross profit $ 4,314 $ 3,477 $ 837 24 % Gross margin: Product 52 % 50 % Service and other 72 % 75 % Total gross margin 53 % 52 % Cost of product revenue increased by $0.6 million or 18%, to $3.7 million for the three months ended June 30, 2026, as compared to $3.2 million for the three months ended June 30, 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. 28 Table of Contents Product gross profit increased by $0.8 million, or 26%, to $4.0 million for the three months ended June 30, 2026, compared to $3.2 million for the three months ended June 30, 2025. The increase was primarily driven by an increase in instrument and consumable sales, offset by a decrease in software sales. Research and Development (“R&D”) Expenses R&D expenses increased by $0.1 million, or 2%, to $3.0 million for the three months ended June 30, 2026, as compared to $2.9 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 $0.3 million in professional and consulting fees, including increases in costs incurred to support development of the Stratys system and foundry expenses. These increases were offset by decreases in our internal consumption of inventory, materials and supplies, depreciation, and rent and facilities costs by a combined total of $0.3 million. Lastly, in the prior period we recognized a loss on disposal of assets of $0.2 million which did not reoccur in the current period. Selling, General and Administrative Expenses Selling, general and administrative (“SG&A”) expenses increased by $0.2 million, or 2%, to $8.5 million for the three months ended June 30, 2026, as compared to $8.3 million for the same period in 2025. The increase was primarily due to $0.5 million in combined one-time executive transition costs and an increase in salaries and accrued bonuses, and a $0.2 million increase in information technology, travel, rent and facility costs. These increases were partially offset by a $0.5 million decrease in professional and consulting fees which is primarily marketing, software, and legal expenses. Interest Income Interest income decreased by $0.1 million, or 47%, to $0.1 million for the three months ended June 30, 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 $0.3 million for the three months ended June 30, 2026, as compared to other income of $0.7 million for the same period in 2025. The year-over-year change was primarily attributable to the following: • Fair value remeasurement: We recognized a net loss of $0.3 million from the changes in the fair value of the convertible debentures during the three months ended June 30, 2026, as compared to a net loss of $0.6 million for the same period in 2025. • Government credit and other income: Other income decreased by $1.3 million in 2026, primarily due to receipt of an Employee Retention Credit (“ERC”) refundable tax credit received during the three months ended June 30, 2025 from the Internal Revenue Services (“IRS”) for eligible businesses affected by the COVID-19 pandemic. 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. 29 Table of Contents Comparison of the Six Months Ended June 30, 2026 and 2025 The following table sets forth our results of operations for the six months ended June 30, 2026 and 2025 (in thousands): Six Months Ended June 30, Period-to-Period Change 2026 2025 $ % Revenues: Product revenue $ 13,787 $ 12,314 $ 1,473 12 % Service and other revenue 1,071 876 195 22 % Total revenue 14,858 13,190 1,668 13 % Cost of revenue: Cost of product revenue 6,929 6,202 727 12 % Cost of service and other revenue 363 572 (209 ) (37 )% Total cost of revenue 7,292 6,774 518 8 % Research and development 6,127 5,299 828 16 % Selling, general and administrative 16,554 17,379 (825 ) (5 )% Total operating expenses 22,681 22,678 3 0 % Loss from operations (15,115 ) (16,262 ) 1,147 (7 )% Other income (expenses): Interest income 369 566 (197 ) (35 )% Other income (expenses) (963 ) 5,756 (6,719 ) (117 )% Total other income (expenses) (594 ) 6,322 (6,916 ) (109 )% Loss before income taxes (15,709 ) (9,940 ) (5,769 ) 58 % Provision for income taxes (17 ) (18 ) 1 (6 )% Net loss $ (15,726 ) $ (9,958 ) $ (5,768 ) 58 % Revenue Six Months Ended June 30, Period-to-Period Change 2026 2025 $ % Instruments $ 2,999 $ 2,088 $ 911 44 % Consumables 8,185 6,523 1,662 25 % Software 2,603 3,703 (1,100 ) (30 )% Total product revenue 13,787 12,314 1,473 12 % Services and other 1,071 876 195 22 % Total revenue $ 14,858 $ 13,190 $ 1,668 13 % Total revenue increased by $1.7 million, or 13% to $14.9 million for the six months ended June 30, 2026, as compared to $13.2 million for the same period in 2025, driven primarily by an increase in instrument, consumables, service and other revenue partially offset by a decrease in software revenue. Instrument revenue increased by $0.9 million, or 44%, to $3.0 million for the six months ended June 30, 2026, as compared to $2.1 million for the six months ended June 30, 2025, due to an increase in the number of OGM and Ionic instruments sold. As of June 30, 2026, our installed base grew to 397 OGM systems compared to the 378 OGM systems as of June 30, 2025, which represented a 5% increase year-over-year. Consumables revenue increased by $1.7 million, or 25%, to $8.2 million for the six months ended June 30, 2026, as compared to $6.5 million for the six months ended June 30, 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 and continued through the current period. For the six months ended June 30, 2026, we sold 17,397 flowcells, an increase of approximately 22% from 14,227 flowcells sold in the same period of 2025. Software revenue decreased by $1.1 million, or 30%, to $2.6 million for the six months ended June 30, 2026, as compared to $3.7 million for the six months ended June 30, 2025. The decrease is primarily attributed to a decrease in the number of VIA samples sold. 30 Table of Contents Service and other revenue increased by $0.2 million, or 22%, to $1.1 million for the six months ended June 30, 2026, as compared to $0.9 million for the six months ended June 30, 2025. The increase was primarily due to an increase in clinical service offerings from Bionano Laboratories, in addition to an increase in extended warranty and maintenance sales. Cost of Revenue, Gross Profit, and Gross Margin ($ in thousands) Six Months Ended June 30, Period-to-Period Change 2026 2025 $ % Cost of revenue: Cost of product revenue 6,929 6,202 727 12 % Cost of service and other revenue 363 572 (209 ) (37 )% Total cost of revenue 7,292 6,774 518 8 % Gross profit (loss): Product $ 6,858 $ 6,112 $ 746 12 % Service and other 708 304 404 133 % Total gross profit $ 7,566 $ 6,416 $ 1,150 18 % Gross margin: Product 50 % 50 % Service and other 66 % 35 % Total gross margin 51 % 49 % Cost of product revenue increased by $0.7 million, or 12%, to $6.9 million for the six months ended June 30, 2026, as compared to $6.2 million for the six months ended June 30, 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 37%, to $0.4 million for the six months ended June 30, 2026, as compared to $0.6 million for the six months ended June 30, 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 increased by $0.7 million, or 12%, to $6.9 million for the six months ended June 30, 2026, compared to $6.1 million for the six months ended June 30, 2025. The increase was primarily driven by an increase in instrument and consumable sales, offset by a decrease in software sales. Service and other gross profit increased by $0.4 million, or 133% to $0.7 million for the six months ended June 30, 2026, compared $0.3 million for the six months ended June 30, 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 16%, to $6.1 million for the six months ended June 30, 2026, as compared to $5.3 million for the same period in 2025. The increase was primarily due to increases of $0.4 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 $0.7 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 $0.1 million. These increases were partially offset by a decrease in depreciation, rent and facility costs of $0.4 million 31 Table of Contents Selling, General and Administrative Expenses SG&A expenses decreased by $0.8 million, or 5%, to $16.6 million for the six months ended June 30, 2026, as compared to $17.4 million for the same period in 2025. The decrease was primarily due to a $1.8 million decrease in professional and consulting fees which is primarily marketing, software, and legal expenses, a $0.7 million decrease in stock-based compensation driven by a decrease in our stock price, and a $0.2 million reduction in the amount of property, plant, and equipment disposed of in the current period as compared to the prior period. These decreases were offset by an increase of $1.0 million in combined one-time executive transition costs and an increase in salaries and accrued bonuses, the absence of a $0.5 million gain on lease modification recorded in the prior period, and a $0.4 million increase in information technology, travel, rent and facility costs. Interest Income Interest income decreased by $0.2 million, or 35%, to $0.4 million for the six months ended June 30, 2026, as compared to $0.6 million for the same period in 2025 resulting from a reduction in investments offset by higher returns. Other Income (Expense) Other expense was $1.0 million for the six months ended June 30, 2026, as compared to other income of $5.8 million for the same period in 2025. The year-over-year change was primarily attributable to the following: • Fair value remeasurement: We recognized a net loss of $0.7 million from the changes in the fair value of the convertible debentures during the six months ended June 30, 2026, as compared to a net gain of $4.5 million for the same period in 2025. • Government credit and other income: Other income decreased by $1.5 million in 2026, primarily due to receipt of 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. 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 $15.7 million and $10.0 million, and used $10.4 million and $6.3 million of cash from our operating activities for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $735.3 million, cash and cash equivalents of $3.7 million, $6.2 million in short-term investments and $0.5 million in restricted cash. 32 Table of Contents Sources of Liquidity and Capital Resources In the six months ended June 30, 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”). The $10.3 million outstanding principal balance was redeemed in full shortly after the May 24, 2026 maturity date, and no principal remained outstanding under the Debentures as of June 30, 2026. For the six months ended June 30, 2026, the Company paid $0.5 million in interest and $10.3 million in principal redemption amounts on the Debentures. 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. 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. 33 Table of Contents As of June 30, 2026, we had $3.7 million in cash and cash equivalents, $6.2 million in short-term investments and $0.5 million in restricted cash. As of June 30, 2026, the Company had fully redeemed the outstanding principal balance 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 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): Six Months Ended June 30, 2026 2025 Net cash provided by (used in): Operating activities $ (10,386 ) $ (6,251 ) Investing activities 19,138 (12,087 ) Financing activities (9,036 ) 12,360 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 34 Table of Contents 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 $10.4 million during the six months ended June 30, 2026, as compared to $6.3 million during the same period in 2025. The increase in cash used in operating activities of $4.1 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 six months ended June 30, 2026, net cash provided by investing activities was $19.1 million, as compared to net cash used in investing activities was $12.1 million during the same period in 2025. The increase in cash provided by investing activities of $31.2 million was primarily attributed to the maturity of $99.3 million in available for sale securities, which was offset by the purchase of available for sale securities of $80.1 million during the six months ended June 30, 2026, as compared 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 same period in 2025. Financing Activities Net cash used in financing activities was $9.0 million during the six months ended June 30, 2026 as compared to net cash provided by financing activities of $12.4 million during the same period in 2025, a decrease of $21.4 million. During the six months ended June 30, 2026, the Company fully redeemed the outstanding principal balance of $10.3 million of the convertible debentures payable, as compared to principal payments of $3.0 million during the same period in 2025, and $1.3 million in gross proceeds from executing sales under our at-the-market facilities with H.C. Wainwright & Co., LLC (“Wainwright”) during the six months ended June 30, 2026, as compared to $16.4 million in gross proceeds from executing sales under our at-the-market facilities with Cowen and Company, LLC (“Cowen”) and Wainwright during the same period in 2025. Capital Resources As of June 30, 2026, we had approximately $3.7 million in cash and cash equivalents, $6.2 million in short-term investments, $0.5 million in restricted cash and working capital of $14.8 million. As of June 30, 2026, the Company had fully redeemed the outstanding principal balance 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. 35 Table of Contents 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 six months ended June 30, 2026, the Company sold approximately 1.0 million shares of common stock under the ATM Agreement at an average share price of $1.28 per share and received gross proceeds of approximately $1.3 million before deducting offering costs of $0.05 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 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, 2026, there have been no changes to our critical accounting policies and estimates as described in our Annual Report. Recent Accounting Pronouncements 36 Table of Contents 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. 37 Table of Contents 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.