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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________________________
FORM 10-Q
_________________________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM             TO
Commission file number: 001-38613
_________________________________________________________
Bionano Genomics, Inc.
(Exact name of registrant as specified in its charter)
Delaware 26-1756290
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
9540 Towne Centre Drive, Suite 100,
San Diego, CA
 
 
92121
(Address of Principal Executive Offices) (Zip Code)
(858) 888-7600
(Registrant’s Telephone Number, Including Area Code)
_________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par value per shareBNGOThe Nasdaq Stock Market, LLC
Warrants to purchase Common StockBNGOWThe Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  x No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x   No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and ‘‘emerging growth company’’ in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
   Emerging growth company


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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes   No x

As of October 31, 2021, the registrant had 289,184,109 shares of Common Stock ($0.0001 par value) outstanding.




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BIONANO GENOMICS, INC.
TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2

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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIONANO GENOMICS, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
 September 30,
2021
December 31,
2020
Assets  
Current assets:  
Cash and cash equivalents$140,736,000 $38,449,000 
Investments 185,333,000  
Accounts receivable, net of allowance for doubtful accounts of, 2,015,000 and 2,119,000 as of September 30, 2021 and December 31, 2020, respectively
2,996,000 2,775,000 
Inventory, net9,020,000 3,316,000 
Prepaid expenses and other current assets3,962,000 2,250,000 
Total current assets342,047,000 46,790,000 
Property and equipment, net8,554,000 4,910,000 
Intangible assets, net1,238,000 1,475,000 
Goodwill7,173,000 7,173,000 
Other long-term assets645,000 103,000 
Total assets$359,657,000 $60,451,000 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$7,875,000 $2,930,000 
Accrued expenses9,416,000 5,599,000 
Contract liabilities411,000 416,000 
Total current liabilities17,702,000 8,945,000 
Long-term debt 16,326,000 
Long-term contract liabilities158,000 98,000 
Other non-current liabilities232,000  
Total liabilities18,092,000 25,369,000 
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized and no shares issued or outstanding as of September 30, 2021 and December 31, 2020
  
Common stock, $0.0001 par value, 400,000,000 shares authorized at September 30, 2021 and December 31, 2020; 281,441,000 and 189,953,000 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively
28,000 19,000 
Additional paid-in capital534,823,000 178,747,000 
Accumulated deficit(193,170,000)(143,684,000)
Accumulated other comprehensive loss(116,000) 
Total stockholders’ equity341,565,000 35,082,000 
Total liabilities and stockholders’ equity$359,657,000 $60,451,000 
See accompanying notes to the unaudited condensed consolidated financial statements
3

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BIONANO GENOMICS, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
 2021202020212020
Revenue:  
Product revenue$3,300,000 $1,580,000 $7,845,000 $3,503,000 
Service and other revenue1,355,000 616,000 3,834,000 1,010,000 
Total revenue4,655,000 2,196,000 11,679,000 4,513,000 
Cost of revenue:
Cost of product revenue2,340,000 1,136,000 5,723,000 2,426,000 
Cost of service and other revenue1,161,000 324,000 2,321,000 493,000 
Total cost of revenue3,501,000 1,460,000 8,044,000 2,919,000 
Operating expenses:
Research and development6,505,000 2,304,000 13,270,000 7,379,000 
Selling, general and administrative15,327,000 8,659,000 38,683,000 21,640,000 
Total operating expenses21,832,000 10,963,000 51,953,000 29,019,000 
Loss from operations(20,678,000)(10,227,000)(48,318,000)(27,425,000)
Other income (expense):
Interest income (expense)27,000 (589,000)(721,000)(1,911,000)
Gain on forgiveness of Paycheck Protection Program loan  1,775,000  
Loss on debt extinguishment  (2,076,000) 
Other income (expense)(67,000)54,000 (96,000) 
Total other income (expense)(40,000)(535,000)(1,118,000)(1,911,000)
Loss before income taxes(20,718,000)(10,762,000)(49,436,000)(29,336,000)
Provision for income taxes(35,000)(30,000)(50,000)(40,000)
Net loss$(20,753,000)$(10,792,000)$(49,486,000)$(29,376,000)
Net loss per share, basic and diluted$(0.07)$(0.08)$(0.18)$(0.34)
Weighted-average common shares outstanding basic and diluted
280,173,000 132,942,000 274,392,000 86,632,000 
See accompanying notes to the unaudited condensed consolidated financial statements.
4

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BIONANO GENOMICS, INC.
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
 2021202020212020
Net Loss:$(20,753,000)$(10,792,000)$(49,486,000)$(29,376,000)
Unrealized (loss) on investment securities
(116,000) (116,000) 
Comprehensive Loss$(20,869,000)$(10,792,000)$(49,602,000)$(29,376,000)
See accompanying notes to the unaudited condensed consolidated financial statements.
5

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BIONANO GENOMICS, INC.
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited)
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTotal Stockholders’ Equity (Deficit)
SharesAmount
Balance at January 1, 202034,274,000 $3,000 $106,188,000 $(102,577,000)$— $3,614,000 
Stock-based compensation expense— — 328,000 — — 328,000 
Issue stock for warrant exercises3,478,000 — 2,355,000 — — 2,355,000 
Net loss— — — (10,510,000)— (10,510,000)
Balance at March 31, 202037,752,000 $3,000 $108,871,000 $(113,087,000)$— $(4,213,000)
Stock-based compensation expense— — 328,000 — — 328,000 
Issue common stock, net of issuance costs16,896,000 2,000 16,364,000 — — 16,366,000 
Issue stock for employee stock purchase plan44,000 — 21,000 — — 21,000 
Issue stock for covenant waiver873,000 — 300,000 — — 300,000 
Issue stock for warrant exercises36,410,000 4,000 1,105,000 — — 1,109,000 
Net loss— — — (8,074,000)— (8,074,000)
Balance at June 30, 202091,975,000 $9,000 $126,989,000 $(121,161,000)$— $5,837,000 
Stock-based compensation expense— — 447,000 — — 447,000 
Issue stock for warrant exercises50,205,000 5,000 15,078,000 — — 15,083,000 
Issue stock for acquisition6,168,000 1,000 4,100,000 — — 4,101,000 
Net loss— — — (10,792,000)— (10,792,000)
Balance at September 30, 2020148,348,000 $15,000 $146,614,000 $(131,953,000)$— $14,676,000 
Balance at January 1, 2021189,953,000 19,000 178,747,000 (143,684,000)$— $35,082,000 
Stock option exercises102,000 — 333,000 — — 333,000 
Stock-based compensation expense— — 371,000 — — 371,000 
Issue common stock, net of issuance costs78,000,000 8,000 327,478,000 — — 327,486,000 
Issue stock for warrant exercises10,739,000 1,000 9,392,000 — — 9,393,000 
Net loss— — — (9,947,000)— (9,947,000)
Balance at March 31, 2021278,794,000 $28,000 $516,321,000 $(153,631,000)$— $362,718,000 
Stock option exercises60,000 — 89,000 — — 89,000 
Stock-based compensation expense— — 1,758,000 — — 1,758,000 
Issue stock for warrant exercises50,000 — 22,000 — — 22,000 
Issue stock for employee stock purchase plan150,000 — 65,000 — — 65,000 
Net loss— — — (18,786,000)— (18,786,000)
Balance at June 30, 2021279,054,000 $28,000 $518,255,000 $(172,417,000)$— $345,866,000 
Stock option exercises209,000 — 242,000 — — 242,000 
Stock-based compensation expense— — 2,788,000 — — 2,788,000 
Issue common stock, net of issuance costs2,178,000 — 13,537,000 — — 13,537,000 
Issue stock for warrant exercises— — 1,000 — — 1,000 
Net loss— — — (20,753,000)— (20,753,000)
Comprehensive Loss— (116,000)(116,000)
Balance at September 30, 2021281,441,000 $28,000 $534,823,000 $(193,170,000)$(116,000)$341,565,000 
See accompanying notes to the unaudited condensed consolidated financial statements
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BIONANO GENOMICS, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
  Nine Months Ended
September 30,
 20212020
Operating activities:  
Net loss
$(49,486,000)$(29,376,000)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization expense
1,490,000 909,000 
Non-cash interest
178,000 952,000 
Stock-based compensation
4,917,000 1,103,000 
Provision for bad debt expense 1,334,000 
Gain on forgiveness of PPP Loan(1,775,000) 
Loss on debt extinguishment2,076,000  
Changes in operating assets and liabilities:
Accounts receivable
(336,000)1,709,000 
Inventory
(10,346,000)(3,612,000)
Prepaid expenses and other current assets
(2,072,000)(566,000)
Accounts payable
4,945,000 925,000 
Accrued expenses and contract liabilities
4,104,000 412,000 
Net cash used in operating activities
(46,305,000)(26,210,000)
Investing Activities:
Lineagen acquisition, net of cash acquired (2,450,000)
Purchases of property and equipment
(344,000) 
Purchase of available for sale securities(205,334,000) 
Sale of available for sale securities20,000,000  
Sale of property and equipment126,000  
Net cash used in investing activities(185,552,000)(2,450,000)
Financing activities:
Repayment of term-loan debt
(17,010,000)(5,000,000)
 Proceeds from PPP Loan 1,775,000 
Proceeds from borrowing from line of credit
 761,000 
Repayments of borrowing from line of credit
 (2,258,000)
Proceeds from sale of common stock342,712,000 17,963,000 
Offering expenses on sale of common stock(1,704,000)(1,597,000)
 Proceeds from sale of common stock under employee stock purchase plan65,000 21,000 
Proceeds from warrant and option exercises
10,081,000 18,551,000 
Net cash provided by financing activities334,144,000 30,216,000 
Net increase in cash and cash equivalents102,287,000 1,556,000 
Cash and cash equivalents at beginning of period
38,449,000 17,311,000 
Cash and cash equivalents at end of period
$140,736,000 $18,867,000 
Supplemental cash flow disclosures:
Cash paid for interest
$490,000 $991,000 
Supplemental disclosure of non-cash investing and financing activities:
Fair value of common stock issued related to Lineagen acquisition$ $4,100,000 
Transfer of instruments and servers from property and equipment into inventory$544,000 $134,000 
Transfer of instruments and servers from inventory to property and equipment$5,074,000 $2,618,000 
Forgiveness of PPP Loan$1,775,000 $ 
Stock issued for services$15,000 $ 
Issue stock for covenant waiver$116,000 $300,000 
Warrant exercise pursuant to cashless exercise$129,000 $ 
See accompanying notes to the unaudited condensed consolidated financial statements
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BIONANO GENOMICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. Organization and Basis of Presentation
Description of Business
Bionano Genomics, Inc. (collectively, with its consolidated subsidiaries, the “Company”) is a provider of genome analysis solutions that can enable researchers and clinicians to reveal answers to challenging questions in biology and medicine. The Company’s mission is to transform the way the world sees the genome through optical genome mapping (“OGM”) solutions, diagnostic services and software. The Company offers OGM solutions for applications across basic, translational and clinical research. Through its Lineagen, Inc. (“Lineagen”) business, the Company also provides diagnostic testing for patients with clinical presentations consistent with autism spectrum disorder and other neurodevelopmental disabilities. Through its BioDiscovery, Inc. (“BioDiscovery”) business, the Company also offers an industry-leading, platform-agnostic software solution, which integrates next-generation sequencing and microarray 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.
Basis of Presentation
The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim reporting purposes. The condensed consolidated financial statements are unaudited. The unaudited condensed consolidated financial statements reflect, in the opinion of the Company’s management, all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of financial position, results of operations, changes in equity, and comprehensive loss and cash flows for each period presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). All intercompany transactions and balances have been eliminated. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
Liquidity
As of September 30, 2021, the Company had approximately $140.7 million in cash and cash equivalents, $185.3 million in available-for-sale investment securities, and working capital of $324.3 million as a result of common stock offerings executed in the quarters ended December 31, 2020, March 31, 2021, and September 30, 2021. In February 2021, we applied for forgiveness of our Paycheck Protection Program Loan of approximately $1.8 million (“the PPP Loan”) , and in March 2021, the PPP Loan, including all accrued interest, was forgiven in full. During the previous quarter ended June 30, 2021, the outstanding term loan with Innovatus (as defined below) was paid in full, including all accrued interest, an end of term fee, and a prepayment fee for a total of $17.0 million.
The Company believes its available cash balance will be sufficient to fund operations, obligations as they become due and capital investments for at least the next twelve months. However, the Company expects to continue to incur net losses for the foreseeable future. The Company plans to continue to fund its losses from operations and capital funding needs through a combination of equity offerings, debt financings or other sources, including potential collaborations, licenses and other similar arrangements. If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, potentially harming the Company’s business.
COVID-19
The Company is subject to additional risks and uncertainties as a result of the continued spread of COVID-19 and uncertain market conditions, which could continue to have a material impact on the Company’s business and financial results. The Company closely monitors and complies with various applicable guidelines and legal requirements in the jurisdictions in which it operates, which may continue to result in reduced business operations in response to new or existing stay-at-home orders, travel restrictions and other social distancing measures. The Company’s manufacturing partners, suppliers, and customers, have implemented similar operational restrictions. Despite reporting an increase in revenue for the three and nine months ended September 30, 2021 when compared to the same period in 2020, the Company believes travel restrictions and overall reduced activity had a continued negative impact on the Company’s third quarter 2021 financial results. Given the continued evolution of the COVID-19 pandemic and the related complexities and uncertainties associated with the additional variants, the future effects of COVID-19 are unknown and the Company’s financial results may continue to be negatively affected in the future.
There may be long-term negative effects of the COVID-19 pandemic, even after it has subsided. Specifically, product demand may be reduced due to an economic recession, a decrease in corporate capital expenditures, prolonged unemployment, reduction in consumer confidence, or any similar negative economic condition. These negative effects could have a material impact on the Company’s operations, business, earnings, and liquidity.
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Significant Accounting Policies
During the three and nine months ended September 30, 2021, there were no changes to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, other than the accounting policy indicated below.
Fair Value Measurements
The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date.
ASC 820, “Fair Value Measurements and Disclosures”, defines and establishes a framework for measuring fair value and expands disclosures about fair value measurements. In accordance with ASC 820, the Company has categorized its financial assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below.
Level 1 – Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the company has the ability to access at the measurement date.
Level 2 – Assets and liabilities whose values are based on quoted prices for similar attributes in active markets; quoted prices in markets where trading occurs infrequently; and inputs other than quoted prices that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.
If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
Investment Securities
All investments have been classified as “available-for-sale” and are carried at fair value as determined based upon quoted market prices or pricing models for similar securities at period end. Investments with contractual maturities less than 12 months at the balance sheet date are considered short-term investments. Investments with contractual maturities beyond one year are also classified as short-term due to the Company’s ability to liquidate the investment for use in operations within the next 12 months. Realized gains and losses on investment securities are included in earnings and are derived using the specific identification method for determining the cost of securities sold. The Company has not realized any significant gains or losses on sales of available-for-sale investment securities during any of the periods presented. As all the Company’s investment holdings are in the form of debt securities, unrealized gains and losses that are determined to be temporary in nature are reported as a component of accumulated other comprehensive income (loss). A decline in the fair value of any security below cost that is deemed other than temporary results in a charge to earnings and the establishment of a new cost basis for the security. Interest income is recognized when earned, as are the amortization of purchase premiums and accretion of purchase discounts on investment securities.
Recently Issued But Not Yet Adopted Accounting Pronouncements
In February 2015, the FASB issued Accounting Standards Update (“ASU”) 2016-2, Leases (Topic 842), which amends the accounting guidance for leases and increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requires disclosures of key information about leasing arrangements. ASU 2016-2 initially mandated a modified retrospective transition method, however, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which amends ASU 2016-2, permitting entities the option to adopt this standard prospectively with a cumulative-effect adjustment to opening equity in the year of adoption and include required disclosures for prior periods but will not restate prior periods. The Company anticipates implementing the accounting guidance for leases using the alternative method beginning with the annual reporting period ending December 31, 2021 and interim reporting periods in 2022. The Company is in the process of evaluating the impact of adoption of the lease accounting guidance on the consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses: Measurement of credit Losses on Financial Instruments (ASU 2016-13), which amends the impairment model by requiring entities to use a forward looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables and available-for-sale debt securities. The standard is effective for the company beginning in the first quarter of 2023, with early adoption permitted. The Company is currently evaluating the expected impact of ASU 2016-13 on its financial statements.
In May 2021, the FASB issued ASU No. 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges for Freestanding Equity-Classified Written Call Options to clarify the accounting for modifications or exchanges of equity-
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classified warrants.The standard is effective for fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is in the process of evaluating the expected impact of ASU 2021-04 on its financial statements.
2. Net Loss Per Share
Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and common share equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. The Company’s potentially dilutive securities which include warrants, outstanding stock options, and Restricted Stock Units (“RSUs”) under the Company’s equity incentive plan have been excluded from the computation of diluted net loss per share as they would be anti-dilutive to the net loss per share. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding.
Potentially dilutive securities not included in the calculation of diluted net loss per share attributable to common stockholders because to do so would be anti-dilutive are as follows (in common stock equivalent shares):
September 30,
2021
September 30,
2020
Stock options10,661,000 5,331,000 
Warrants4,361,000 29,709,000 
RSUs820,000  
Total15,842,000 35,040,000 
3. Revenue Recognition
Revenue by Source
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Instruments$1,468,000 $724,000 $3,507,000 $1,487,000 
Consumables1,832,000 856,000 4,338,000 2,016,000 
Total product revenue3,300,000 1,580,000 7,845,000 3,503,000 
Service and other1,355,000 616,000 3,834,000 1,010,000 
Total revenue$4,655,000 $2,196,000 $11,679,000 $4,513,000 

Revenue by Geographic Location
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
$%$%$%$%
North America$2,557,000 55 %$874,000 40 %$6,419,000 55 %$2,388,000 53 %
EMEIA1,234,000 27 %1,204,000 55 %3,762,000 32 %1,908,000 42 %
Asia Pacific864,000 18 %118,000 5 %1,498,000 13 %217,000 5 %
Total$4,655,000 100 %$2,196,000 100 %$11,679,000 100 %$4,513,000 100 %
The table above provides revenue from contracts with customers by source and geographic region (based on the customer’s billing address) on a disaggregated basis. North America consists of the United States and Canada. EMEIA consists of Europe, the Middle East, India and Africa. Asia Pacific includes China, Japan, South Korea, Singapore and Australia. For the three months ended September 30, 2021 and 2020, the United States represented 44.2% and 40.0% of total revenue, respectively. Additionally, for the three months ended September 30, 2021, China and Canada represented 17.9% and 10.8% of total revenue, respectively. For the three months ended September 30, 2020, no countries other than the United States represented greater than 10% of revenue. For the nine months ended September 30, 2021 and 2020, the United States represented 50.0% and 51.0% of total revenue, respectively. No other countries represented greater than 10% of revenue during the nine months ended September 30, 2021 and 2020.
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Remaining Performance Obligations
As of September 30, 2021, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied was $569,000. These remaining performance obligations primarily relate to extended warranty and support and maintenance obligations. The Company expects to recognize approximately 30.7% of this amount as revenue during the remainder of 2021, 49.9% in 2022, and 19.5% in 2023 and thereafter. Warranty revenue is included in Service and other revenue.
The Company recognized revenue of $79,000 and $66,000 during the three months ended September 30, 2021 and 2020, respectively, and revenue of $326,000 and $299,000 during the nine months ended September 30, 2021 and 2020, respectively, which was included in the contract liability balance at the end of the previous year.
4. Balance Sheet Account Details
Accounts Receivable
September 30,
2021
December 31,
2020
Accounts receivable, net:
Accounts receivable, trade$5,011,000 $4,894,000 
Less allowance for doubtful accounts(2,015,000)(2,119,000)
$2,996,000 $2,775,000 
The Company extends credit to its customers in the normal course of business. For diagnostic testing services, receivables are based on either contractual rates with third-party payors, plus the amounts expected to be collected for any patient-responsibility portion, or for non-contracted arrangements, using the amounts expected to be collected from third-party payors and/or the patient-customer based on historical collection experience. The Company does not perform credit evaluations and therefore subsequent adjustments to the amount expected to be collected are recorded to revenue. The balance of our Lineagen accounts receivable balance as of September 30, 2021 was $680,000.
For optical genome mapping (“OGM”) products and services, credit is extended based upon an evaluation of each customer’s credit history, financial condition, and other factors. Estimates of allowances for doubtful accounts are determined by evaluating individual customer circumstances, historical payment patterns, length of time past due, and economic and other factors. Bad debt expense is recorded as necessary to maintain an appropriate level of allowance for doubtful accounts in selling, general and administrative expense. During the three and nine months ended September 30, 2021, the Company recorded a recovery of bad debt expense of $(10,000) and $(50,000), respectively, which is included in selling, general and administrative expenses. Amounts are charged to the allowance for doubtful accounts when collection efforts have been exhausted and are deemed uncollectible.
Concentrations
Accounts receivable is subject to concentration risk whenever a customer has a balance that meets or exceeds 10.0% of the Company’s total accounts receivable balance. As of September 30, 2021, no customers met or exceeded 10% of the Company’s total accounts receivable balance. As of December 31, 2020, two customer balances represented 27.4% of the Company’s total accounts receivable balance.
Inventory
Inventory is stated at the lower of cost or net realizable value, on a first-in, first-out basis. Inventory includes raw materials and finished goods that may be used in the research and development process and such items are expensed as consumed or expired.
Provisions for slow-moving, excess, and obsolete inventories are estimated based on product life cycles, historical experience, and usage forecasts.
The components of inventories are as follows:
 September 30,
2021
December 31,
2020
Inventory:
Raw materials$1,024,000 $2,283,000 
Finished goods7,996,000 1,033,000 
$9,020,000 $3,316,000 
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5. Debt
Paycheck Protection Program
On April 17, 2020, the Company received the PPP Loan proceeds of approximately $1.8 million pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) administered by the U.S. Small Business Administration (the “SBA”).
The PPP Loan accrued interest at a rate of 1.00% per annum, and is subject to the standard terms and conditions applicable to loans administered by the SBA under the CARES Act. In February 2021, the Company applied for forgiveness of the PPP Loan, and in March 2021, the PPP Loan, including all accrued interest, was forgiven in full. A gain on forgiveness of Paycheck Protection Program loan of $1.8 million was recognized during the nine months ended September 30, 2021.
Innovatus LSA
In March 2019, the Company entered into a Loan and Security Agreement (the “LSA”) by and among Innovatus Life Sciences Lending Fund I, LP, a Delaware limited partnership (“Innovatus”), as collateral agent and the lenders listed on Schedule 1.1 thereto, including East West Bank. The LSA provided a first term loan of $17.5 million, a second term loan of $2.5 million and a third term loan of $5.0 million (collectively, the “Term Loans”) if the Company satisfied certain funding conditions. Interest on the Term Loans is due on the first of each month at a rate of 10.25% per annum in cash or a discounted rate of 7.25% in cash with 3.0% of the 10.25% per annum rate added to the principal of the loan and subject to accruing interest through the end of the interest only payment period, which ends March 1, 2022. At inception, the Company elected to pay interest in cash at a rate of 7.25% per annum and have 3.0% per annum of the interest added back to the outstanding principal. As of May 14, 2021 (the effective date of the loan payoff), the effective interest rate, including debt issuance costs, for the Term Loans was 16.7%.
The LSA provided for prepayment fees of 3.0% of the outstanding balance of the loan if the loan is repaid on or prior to March 14, 2020, 2.0% of the amount prepaid if the prepayment occurs after March 14, 2020 but prior to March 14, 2021, 1.0% of the amount prepaid after March 14, 2021 but prior to March 14, 2022 and 0% of the amount prepaid if the prepayment occurs thereafter. In addition, upon the final repayment of the total amounts borrowed, the Company is required to pay an end of term fee of $0.8 million. This end of term fee was being recognized as interest expense over the term of the LSA. As of September 30, 2021, the outstanding term loan with Innovatus was paid in full, including all accrued interest, the end of term fee, and a prepayment fee for a total of $17.0 million.
The LSA also provides for a revolving line of credit in an amount not to exceed $5.0 million (the “Revolver”), which was terminated effectively upon payment in full of the above term loan.
Summary of Debt Obligations
The Company had no debt as of September 30, 2021.The carrying value of the Company’s debt as of December 31, 2020 was as follows:
December 31,
2020
Term Loans$15,981,000 
PPP Loan1,775,000 
Total principal17,756,000 
Less unamortized debt issuance costs(1,430,000)
Total carrying value of debt$16,326,000 


6. Stockholders’ Equity and Stock-Based Compensation
Follow-on Public Offerings
On January 12, 2021, the Company completed an underwritten public offering of 33,368,851 shares of common stock, including 4,352,458 shares of common stock sold pursuant to the underwriters’ exercise in full of their option to purchase additional shares. The price to the public in the offering was $3.05 per share and the underwriters purchased the shares from the Company pursuant to the underwriting agreement at a price of $2.867 per share. The gross proceeds were approximately $101.8 million before deducting underwriting discounts and commissions and other offering expenses of $293,000.
On January 25, 2021, the Company completed an underwritten public offering of 38,333,352 shares of common stock, including 5,000,002 shares of common stock sold pursuant to the underwriters’ exercise in full of their option to purchase additional shares. The price to the public in the offering was $6.00 per share and the underwriters purchased the shares from the
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Company pursuant to the underwriting agreement at a price of $5.64 per share. The gross proceeds were approximately $230.0 million before deducting underwriting discounts and commissions and other offering expenses of $435,000.
Shelf Registration Statements; Ladenburg and Cowen At-the-Market Facilities
In August 2020, the Company filed a shelf registration statement on Form S-3 with the SEC covering the offering, issuance and sale of up to $125.0 million of the Company’s securities, including up to $40.0 million of common stock pursuant to an At Market Issuance Sales Agreement, with Ladenburg Thalmann & Co. Inc. acting as sales agent (the “Ladenburg ATM”). During October through December 2020, the Company sold 27,025,384 shares of common stock under the Ladenburg ATM at an average share price of $0.82, and received gross proceeds of approximately $22.1 million before deducting offering costs of $573,000. In January 2021, the Company sold an additional 6,298,152 shares of common stock under the ATM at an average share price of $2.68, and received gross proceeds of approximately $16.9 million before deducting offering costs of $422,000. The Company terminated the Ladenburg ATM in March 2021.
On January 19, 2021, the Company filed an automatically effective shelf registration statement on Form S-3 with the SEC as a “well-known seasoned issuer,” allowing for the Company to issue an indeterminate number or amount of its securities from time to time in one or more offerings. On March 23, 2021, the Company entered into a Sales Agreement with Cowen and Company, LLC (“Cowen”) which provides for the sale, in the Company’s sole discretion, of shares of common stock having an aggregate offering price of up to $350.0 million through or to Cowen, acting as sales agent or principal (the “Cowen ATM”). The Company agreed to pay Cowen a commission of up to 3.0% of the aggregate gross proceeds from each sale of shares, reimburse legal fees and disbursements and provide Cowen with customary indemnification and contribution rights. In August and September 2021, the Company sold 2,256,000 shares of common stock under the Cowen ATM at an average share price of $6.15 per share, and received gross proceeds of approximately $13.9 million before deducting offering costs of $0.6 million.
Stock Warrants
A summary of the Company’s warrant activity during the nine months ended September 30, 2021 was as follows:
Shares of Stock under WarrantsWeighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
Outstanding at January 1, 202115,174,000 $2.34 3.76$26,841,000 
Granted 
Exercised(10,789,000)0.89 58,175,000 
Canceled(24,000)3.29 
Outstanding at September 30, 2021
4,361,000 $5.95 2.02$1,651,000 
Stock Options
A summary of the Company’s stock option activity during the nine months ended September 30, 2021 was as follows:   
Shares of Stock under Stock OptionsWeighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
Outstanding at January 1, 20215,290,000 $1.91 8.7$10,178,000 
Granted6,544,000 7.11 
Exercised(371,000)1.49 $2,187,000 
Canceled(802,000)4.35 
Outstanding at September 30, 2021
10,661,000 $4.94 9.01$17,822,000 
Vested and exercisable at September 30, 2021
3,035,000 $3.31 8.11$9,326,000 
For the three months ended September 30, 2021 and 2020, the weighted-average grant date fair value of stock options granted was $3.64 and $0.35 per share, respectively. For the nine months ended September 30, 2021 and 2020, the weighted-average grant date fair value of stock options granted was $4.78 and $0.43 per share, respectively.
Stock-Based Compensation
The Company recognized stock-based compensation expense for the periods presented as follows: 
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 Three Months Ended
September 30,
Nine Months Ended
September 30,
2021202020212020
Research and development$745,000 $122,000 $1,209,000 $255,000 
General and administrative2,043,000 325,000 3,708,000 848,000 
Total stock-based compensation expense$2,788,000 $447,000 $4,917,000 $1,103,000 
The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants during the periods presented were as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021202020212020
Risk-free interest rate0.9 %0.4 %1.1 %0.8 %
Expected volatility71.4 %77.9 %78.3 %74.8 %
Expected term (in years)6.05.56.05.9
Expected dividend yield0.0 %0.0 %0.0 %0.0 %
Restricted Stock Units
On May 12, 2021, the compensation committee of the Company’s board of directors granted 580,000 RSUs to R. Erik Holmlin, Ph.D., the Company’s President and Chief Executive Officer (the “Holmlin Grant”), and 240,000 RSUs to Mark Oldakowski, the Company’s Chief Operating Officer (the “Oldakowski Grant”), in each case with an effective grant date and vesting commencement date of May 12, 2021.
290,000 RSUs under the Holmlin Grant are subject to time-based vesting, with 50% of the shares vesting on each of the first and second anniversaries of the vesting commencement date, subject to continued service through the vesting date, and 18 months vesting acceleration upon a termination without cause or resignation with good reason.
290,000 RSUs under the Holmlin Grant are subject to vesting upon the satisfaction of certain specified revenue targets within four years following the vesting commencement date. If Dr. Holmlin’s employment with the Company is terminated without cause or he resigns with good reason, then the shares will continue to be eligible for vesting upon satisfaction of the revenue targets within a period that is the shorter of 18 months following termination or four years following the vesting commencement date.
The RSUs comprising the Oldakowski Grant are subject to time-based vesting, with 50% of the shares vesting on each of the first and second anniversaries of the vesting commencement date, subject to continued service through the vesting date.

7. Commitments and Contingencies
Litigation
From time to time, the Company may be subject to potential liabilities under various claims and legal actions that are pending or may be asserted. These matters arise in the ordinary course and conduct of the business. The Company regularly assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in the financial statements. An estimated loss contingency is accrued in the financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on the Company’s assessment, it currently does not have any material loss exposure as it is not a defendant in any claims or legal actions.
8. Income Taxes
The Company is subject to taxation in the United States, United Kingdom and various state jurisdictions. The Company computes its quarterly income tax provision by using a forecasted annual effective tax rate and adjusts for any discrete items arising during the quarter. The primary difference between the effective tax rate and the federal statutory tax rate relates to the full valuation allowance on the Company’s U.S. net operating losses.
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9. Acquisitions
Acquisition of Lineagen
On August 21, 2020, the Company, Alta Merger Sub, Inc., a wholly owned subsidiary of the Company (“Merger Sub”), Lineagen, a Delaware corporation, and Michael S. Paul, Ph.D., solely in his capacity as exclusive agent and attorney-in-fact of the security-holders of Lineagen, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms and conditions of the Merger Agreement, Merger Sub merged with and into Lineagen whereupon the separate corporate existence of Merger Sub ceased, with Lineagen continuing as the surviving corporation of the Merger as a wholly owned subsidiary of the Company. Lineagen’s expertise in development, commercialization and reimbursement of laboratory-developed tests provides a platform for accelerating sales growth for the Company’s Saphyr system.
The unaudited pro forma financial information in the table below summarizes the combined results of operations for the Company and Lineagen as if the companies had been combined as of January 1, 2019. The unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved as if the acquisition had taken place as of January 1, 2019.
 Three Months Ended September 30,
(Unaudited)
Nine Months Ended September 30,
(Unaudited)
20202020
Revenue$3,018,000 $7,948,000 
Net loss(10,087,000)(30,375,000)
Basic and diluted net loss per share
$(0.07)$(0.33)
Acquisition of BioDiscovery
On October 8, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which the Company agreed to acquire BioDiscovery, Inc (“Biodiscovery”). Under the terms of the Merger Agreement,, Bionano purchased 100% of the outstanding shares of BioDiscovery on October 18, 2021.
Pursuant to the Merger Agreement, the Company paid upfront consideration consisting of a combination of approximately $50 million in cash and $40 million in shares of Company common stock. The upfront consideration is subject to adjustment for, among other things, cash, unpaid indebtedness, unpaid transaction expenses and working capital relative to a target. Approximately $27 million worth of shares of Company common stock issued as upfront consideration pursuant to the Merger Agreement are subject to vesting based on continued service, subject to the terms and conditions of a stock restriction agreement. Under the Merger Agreement, the Company has also agreed to pay a milestone payment of $10 million in cash based on the achievement of certain commercial milestones. The Merger Agreement has a customary post-closing purchase price adjustment mechanism.
10. Fair Value Measurements
The Company holds investment securities that consist of highly liquid, investment grade debt securities. The Company determines the fair value of its investment securities based upon one or more valuations reported by its investment accounting and reporting service provider. The investment service provider values the securities using a hierarchical security pricing model that relies primarily on valuations provided by an industry-recognized valuation service. Such valuations may be based on trade prices in active markets for identical assets or liabilities (Level 1 inputs) or valuation models using inputs that are observable either directly or indirectly (Level 2 inputs), such as quoted prices for similar assets or liabilities, yield curves, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, and broker and dealer quotes, as well as other relevant economic measures.
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The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis in the Unaudited Consolidated Balance Sheets:
September 30, 2021
Total Fair Value and Carrying Value on Balance SheetFair Value Measurement Category
Level 1Level 2Level 3
Assets:
Commercial Paper$97,939,000 $ $97,939,000 $ 
Corporate Notes/Bonds$87,394,000 $ $87,394,000 $ 
Total Investments:$185,333,000 $ $185,333,000 $ 
Money Market Funds$114,331,000 $114,331,000 $ $ 
Money Market Funds are classified as cash equivalents on the balance sheet. The Company did not hold any investments as of December 31, 2020. As of September 30, 2021, the Company held 44 securities in an unrealized loss position. None of the Company’s available-for-sale investment securities were in a material unrealized loss position at September 30, 2021. As such, the Company has not recognized any impairment in its financial statements related to its available-for-sale investment securities.
As of September 30, 2021, the following table summarizes the amortized cost and the unrealized gains (losses) of the available for sale securities:
Commercial PaperCorporate Notes/Bonds
Amortized Cost
Unrealized gains (losses)
Amortized Cost
Unrealized gains (losses)
Less than 1 year$97,957,000 $(18,000)$12,234,000 $(7,000)
Due after one year through five years  75,258,000 (91,000)
Total$97,957,000 $(18,000)$87,492,000 $(98,000)
Included in interest income for the three-month period ended September 30, 2021 was interest income related to the Company’s available for sale securities of $13,000. All interest income related to the available for sale securities in 2021 related to three-month period ended September 30, 2021. All available-for-sale securities are classified as current assets, even if the maturity when acquired by the Company is greater than one year due to the ability to liquidate within the next 12 months.
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 consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2020 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, or our Annual Report, filed with the Securities and Exchange Commission, or the SEC, on March 23, 2021. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our” refer to Bionano Genomics, Inc. and its subsidiaries or, as the context may require, Bionano Genomics, Inc. only.
Forward-Looking Statements
The information in this Quarterly Report on Form 10-Q 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 the potential effects of the COVID-19 pandemic on our business, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place
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undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in our 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, or OGM, solutions, diagnostic services and software. We offer OGM solutions for applications across basic, translational and clinical research. Through our Lineagen, Inc., or Lineagen, business, we also provides diagnostic testing for patients with clinical presentations consistent with autism spectrum disorder and other neurodevelopmental disabilities. Through our BioDiscovery, Inc., or BioDiscovery, business, we also offer an industry-leading, platform-agnostic software solution, which integrates next-generation sequencing and microarray 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.
We have incurred losses in each year since our inception. Our net loss was $20.8 million and $49.5 million for the three and nine months ended September 30, 2021, respectively. As of September 30, 2021, we had an accumulated deficit of $193.2 million.
We expect to continue to incur significant expenses and operating losses as we:
expand our sales and marketing efforts to further commercialize our products;
continue research and development efforts to improve our existing products;
hire additional personnel;
enter into collaboration arrangements, if any;
add operational, financial and management information systems; and
incur increased costs as a result of operating as a public company.
Recent Highlights
We shipped 24 Saphyr systems during the quarter ended September 30, 2021, compared to 11 systems shipped in the same quarter in 2020. The installed base of Saphyr systems was 141 as of September 30, 2021, compared to 93 as of September 30, 2020.
We sold 3,969 nanochannel array flow cells during the quarter ended September 30, 2021, compared to 1,785 in the same quarter in 2020, an increase of 122%.
We analyzed 309 samples in our Saphyr service lab during the quarter ended September 30, 2021, compared to 84 samples analyzed in the same quarter in 2020.
COVID-19 Overview
The COVID-19 pandemic, and the measures imposed to contain this pandemic in areas where we operate our business and elsewhere have disrupted and are expected to continue to impact our business. For example, to comply with applicable regulations and to safeguard the health and safety of our employees and customers, we temporarily reduced our on-site business operations, implemented work-from-home practices, and modified other business practices, including those related to employee travel and physical participation in meetings, events, and conferences. Limited access to our facilities or customer sites has adversely affected, and is expected to continue to adversely affect, our operations.
Disruptions resulting from the COVID-19 pandemic may continue to impact our operations and overall business. The impact of COVID-19 is evolving rapidly and its future effects remain uncertain. As a result of such uncertainties, the duration of the disruption and the related impact on our business, operating results and financial condition cannot be reasonably estimated at this time. We are continuing to closely monitor the impact of the COVID-19 pandemic on our business and are taking proactive efforts designed to protect the health and safety of our workforce, continue our business operations and advance our corporate objectives.
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Financial Overview
Revenue
We generate product revenue from sales of our instruments and consumables. We currently sell our products for research use only applications and our customers are primarily clinical research laboratories, laboratories associated with academic and governmental research institutions, as well as pharmaceutical, biotechnology and contract research companies. Consumable revenue consists of sales of complete assays which are developed internally by us, plus sales of kits which contain all the elements necessary to run tests. We also generate service revenue from the sale of diagnostic testing services for those with autism spectrum disorder and other neurodevelopmental disabilities through our wholly owned subsidiary Lineagen. Other revenue consists of warranty and other service-based revenue.
The following table presents our revenue for the periods indicated:
Three Months Ended September 30,