SEC Filing | Bionano Genomics, Inc.

View:

Download DOC

Download PDF

Download XLS

Download XBRL

bngo-20220630

Table of Contents

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 JUNE 30, 2022


☐			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 class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

BNGO

The Nasdaq Stock Market, LLC

Warrants to purchase Common Stock

BNGOW

The 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

☐

Table of Contents

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 July 27, 2022, the registrant had 290,139,940 shares of Common Stock ($0.0001 par value) outstanding.

Table of Contents

BIONANO GENOMICS, INC.

TABLE OF CONTENTS



PART I. FINANCIAL INFORMATION		3
	Item 1. Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 (Unaudited)	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2022 and 2021 (Unaudited)	5
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2022 and 2021 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2022 and 2021 (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
	Item 3. Quantitative and Qualitative Disclosures about Market Risk	29
	Item 4. Controls and Procedures	30
PART II. OTHER INFORMATION		31
	Item 1. Legal Proceedings	31
	Item 1A. Risk Factors	31
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	70
	Item 3. Defaults Upon Senior Securities	70
	Item 4. Mine Safety Disclosures	70
	Item 5. Other Information	70
	Item 6. Exhibits	71
SIGNATURES		72

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BIONANO GENOMICS, INC.

Condensed Consolidated Balance Sheets


	(Unaudited)
	June 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	27,159,000	$	24,571,000
Investments	160,178,000		226,041,000
Accounts receivable, net of allowance for doubtful accounts of $463,000 and $690,000 as of June 30, 2022 and December 31, 2021, respectively	4,851,000		4,934,000
Inventory	20,591,000		12,387,000
Prepaid expenses and other current assets	3,509,000		4,481,000
Total current assets	216,288,000		272,414,000
Property and equipment, net	13,923,000		10,318,000
Operating lease right-of-use assets	6,431,000		6,691,000
Finance lease right-of-use assets, related party	3,810,000		3,926,000
Intangible assets, net	24,005,000		26,842,000
Goodwill	56,254,000		56,160,000
Other long-term assets	841,000		749,000
Total assets	$	321,552,000	$	377,100,000

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	7,695,000	$	9,696,000
Accrued expenses	7,760,000		9,694,000
Contract liabilities	1,180,000		684,000

Operating lease liability	1,757,000		1,467,000
Finance lease liability, related party	292,000		299,000
Contingent consideration	9,224,000		—
Total current liabilities	27,908,000		21,840,000
Operating lease liability, net of current portion	5,075,000		5,288,000
Finance lease liability, net of current portion, related party	3,632,000		3,642,000
Contingent consideration	—		9,066,000

Long-term contract liabilities	203,000		146,000

Total liabilities	36,818,000		39,982,000
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 June 30, 2022 and December 31, 2021	—		—
Common stock, $0.0001 par value, 400,000,000 shares authorized at June 30, 2022 and December 31, 2021; 290,061,000 and 289,602,000 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	29,000		29,000
Additional paid-in capital	564,852,000		553,747,000
Accumulated deficit	(278,229,000)		(216,119,000)
Accumulated other comprehensive loss	(1,918,000)		(539,000)
Total stockholders’ equity	284,734,000		337,118,000
Total liabilities and stockholders’ equity	$	321,552,000	$	377,100,000

See accompanying notes to the unaudited condensed consolidated financial statements

Table of Contents

BIONANO GENOMICS, INC.

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue:
Product revenue	$	3,913,000	$	2,496,000	$	7,029,000	$	4,545,000
Service and other revenue	2,757,000		1,360,000		5,337,000		2,479,000
Total revenue	6,670,000		3,856,000		12,366,000		7,024,000
Cost of revenue:
Cost of product revenue	3,973,000		1,869,000		7,549,000		3,383,000
Cost of service and other revenue	1,226,000		548,000		2,485,000		1,159,000
Total cost of revenue	5,199,000		2,417,000		10,034,000		4,542,000
Operating expenses:
Research and development	11,767,000		4,086,000		22,296,000		6,765,000
Selling, general and administrative	21,783,000		13,829,000		42,060,000		23,357,000
Total operating expenses	33,550,000		17,915,000		64,356,000		30,122,000
Loss from operations	(32,079,000)		(16,476,000)		(62,024,000)		(27,640,000)
Other income (expense):
Interest income	192,000		58,000		301,000		123,000
Interest expense	(74,000)		(268,000)		(151,000)		(871,000)
Gain on forgiveness of Paycheck Protection Program loan	—		—		—		1,775,000
Loss on debt extinguishment	—		(2,076,000)		—		(2,076,000)
Other income (expense)	(156,000)		(15,000)		(188,000)		(29,000)
Total other income (expense)	(38,000)		(2,301,000)		(38,000)		(1,078,000)
Loss before income taxes	(32,117,000)		(18,777,000)		(62,062,000)		(28,718,000)
Benefit (provision) for income taxes	(41,000)		(9,000)		(50,000)		(15,000)
Net loss	$	(32,158,000)	$	(18,786,000)	$	(62,112,000)	$	(28,733,000)
Net loss per share, basic and diluted	$	(0.11)	$	(0.07)	$	(0.22)	$	(0.11)
Weighted-average common shares outstanding basic and diluted	285,554,000		278,898,000		285,086,000		271,460,000

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

BIONANO GENOMICS, INC.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30, 2022
	2022		2021		2022		2021
Net Loss:	$	(32,158,000)	$	(18,786,000)	$	(62,112,000)	$	(28,733,000)
Unrealized (loss) on investment securities	(281,000)		—		(1,379,000)		—
Comprehensive Loss	$	(32,439,000)	$	(18,786,000)	$	(63,491,000)	$	(28,733,000)

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

BIONANO GENOMICS, INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity (Deficit)
	Shares	Amount
Balance at January 1, 2021	189,953,000	$	19,000	$	178,747,000	$	(143,684,000)	$	—	$	35,082,000
Stock option exercises	102,000	—		333,000		—		—		333,000
Stock-based compensation expense	—	—		371,000		—		—		371,000
Issue common stock, net of issuance costs	78,000,000	8,000		327,478,000		—		—		327,486,000
Issue stock for warrant exercises	10,739,000	1,000		9,392,000		—		—		9,393,000
Net loss	—	—		—		(9,947,000)		—		(9,947,000)
Balance at March 31, 2021	278,794,000	$	28,000	$	516,321,000	$	(153,631,000)	$	—	$	362,718,000
Stock option exercises	60,000	—		89,000		—		—		89,000
Stock-based compensation expense	—	—		1,758,000		—		—		1,758,000
Issue stock for employee stock purchase plan	150,000	—		65,000		—		—		65,000
Issue stock for warrant exercises	50,000	—		22,000		—		—		22,000
Net loss	—	—		—		(18,786,000)		—		(18,786,000)
Balance at June 30, 2021	279,054,000	28,000		518,255,000		(172,417,000)		—		345,866,000














Balance at January 1, 2022	289,602,000	$	29,000	$	553,747,000	$	(216,119,000)	$	(539,000)	$	337,118,000
Stock option exercises	21,000	—		15,000		—		—		15,000
Stock-based compensation expense	—	—		5,102,000		—		—		5,102,000
Issuance of common stock due to the vesting of restricted stock units, net of shares withheld to cover taxes	65,000	—		—		—		—		—
Net loss	—	—		—		(29,952,000)		—		(29,952,000)
Other comprehensive loss	—	—		—		—		(1,098,000)		(1,098,000)
Balance at March 31, 2022	289,688,000	$	29,000	$	558,864,000	$	(246,071,000)	$	(1,637,000)	$	311,185,000
Stock option exercises	249,000	—		136,000		—		—		136,000
Stock-based compensation expense	—	—		5,777,000		—		—		5,777,000
Issuance of common stock due to the vesting of restricted stock units, net of shares withheld to cover taxes	(26,000)	—		—		—		—		—


Issue stock for employee stock purchase plan	150,000	—		75,000		—		—		75,000
Net loss	—	—		—		(32,158,000)		—		(32,158,000)
Other comprehensive loss	—	—		—		—		(281,000)		(281,000)
Balance at June 30, 2022	290,061,000	$	29,000	$	564,852,000	$	(278,229,000)	$	(1,918,000)	$	284,734,000

See accompanying notes to the unaudited condensed consolidated financial statements

Table of Contents

BIONANO GENOMICS, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended June 30,
	2022		2021
Operating activities:
Net loss	$	(62,112,000)	$	(28,733,000)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization expense	4,475,000		964,000
Amortization of financing lease right-of-use asset	117,000		—
Amortization of interest on securities	551,000		—
Non-cash lease expense	337,000		—
Non-cash interest expense	—		383,000
Stock-based compensation	10,878,000		2,129,000
Change in fair value of contingent consideration	158,000		—
Gain on forgiveness of PPP Loan	—		(1,775,000)
Loss on debt extinguishment	—		2,076,000
Cost of leased equipment sold to customer	204,000		—
Changes in operating assets and liabilities:
Accounts receivable	24,000		(63,000)
Inventory	(12,095,000)		(3,605,000)
Prepaid expenses and other current assets	186,000		400,000
Accounts payable	(2,072,000)		816,000
Accrued expenses and contract liabilities	(1,477,000)		1,085,000
Net cash used in operating activities	(60,826,000)		(26,323,000)
Investing Activities:

BioDiscovery acquisition, return of purchase consideration from escrow	694,000		—
Purchases of property and equipment	(371,000)		(76,000)
Purchase of available for sale securities	(29,541,000)		—
Sale and maturity of available for sale securities	93,475,000		—
Construction in progress	(1,080,000)		—
Sale of property and equipment	27,000		126,000
Net cash provided by / (used in) investing activities	63,204,000		50,000
Financing activities:

Repayment of term-loan debt	—		(17,010,000)



Principal payments of financing lease liability	(17,000)		—
Proceeds from sale of common stock	—		328,635,000
Offering expenses on sale of common stock	—		(1,149,000)
Proceeds from sale of common stock under employee stock purchase plan	75,000		65,000
Proceeds from warrant and option exercises	152,000		9,837,000
Net cash provided by financing activities	210,000		320,378,000
Net increase in cash and cash equivalents	2,588,000		294,105,000
Cash and cash equivalents at beginning of period	24,571,000		38,449,000
Cash and cash equivalents at end of period	$	27,159,000	$	332,554,000

Supplemental cash flow disclosures:
Cash paid for interest	$	139,000	$	487,000
Cash paid for operating lease liabilities	$	695,000	$	422,000
Supplemental disclosure of non-cash investing and financing activities:




Transfer of instruments and servers from inventory to property and equipment, net	$	3,890,000	$	2,035,000
Operating lease liabilities resulting from obtaining right-of-use assets	$	517,000	$	2,013,000
Forgiveness of PPP Loan	$	—	$	1,775,000




Warrant exercise pursuant to cashless exercise	$	—	$	129,000

See accompanying notes to the unaudited condensed consolidated financial statements

Table of Contents

BIONANO GENOMICS, INC.

NOTES TO CONDENSED CONSOLIDATED 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, LLC (“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, 2021.

Liquidity

As of June 30, 2022, the Company had approximately $27.2 million in cash and cash equivalents, $160.2 million in available for sale investment securities, and working capital of $188.4 million as a result of common stock offerings executed in the quarters ended December 31, 2020, March 31, 2021, and September 30, 2021.

The Company believes its available cash, cash equivalents, and available for sale securities will be sufficient to fund operations, obligations as they become due and capital investments for at least the next 12 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 and Other Geopolitical Events

The Company is subject to additional risks and uncertainties as a result of the continued spread of COVID-19, adverse macroeconomic events, such as the ongoing conflict between Ukraine and Russia and related sanctions, and uncertain market conditions, including higher inflation and supply chain disruptions, 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. If restrictions related to COVID-19 persist, the Company could see additional supply chain disruptions that impact its ability to produce its products and may cause the Company to make strategic determinations regarding, among other things, the cost and quality of the components and supplies it acquires. The Company may also see negative effects on study enrollment in its ongoing or future studies. At various times throughout the pandemic, the Company has been unable to visit certain customer sites to support installation or service of its OGM systems. The Company’s manufacturing partners, suppliers, and customers, have implemented similar operational reductions. Despite reporting an increase in revenue for the three and six months ended June 30, 2022 when compared to the same period in 2021, the Company experienced supply chain constraints that negatively impacted the Company’s first and second quarter 2021 and 2022 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. The COVID-19 pandemic may also have long-term effects on the nature of the office environment and remote working, which may

Table of Contents

present strategy, operational, talent recruiting and retention and workplace culture challenges that may adversely affect its business.

Following the recent invasion of Ukraine by Russia, the U.S. and global financial markets experienced volatility, which has led to disruptions to trade, commerce, pricing stability, credit availability, supply chain continuity and reduced access to liquidity globally. In response to the invasion, the United States, United Kingdom and European Union, along with others, imposed significant new sanctions and export controls against Russia, Russian banks and certain Russian individuals and may implement additional sanctions or take further punitive actions in the future. The full economic and social impact of the sanctions imposed on Russia and possible future punitive measures that may be implemented, as well as the counter measures imposed by Russia, in addition to the ongoing military conflict between Ukraine and Russia and related sanctions, which could conceivably expand into the surrounding region, remains uncertain; however, both the conflict and related sanctions have resulted and could continue to result in disruptions to trade, commerce, pricing stability, credit availability, supply chain continuity and reduced access to liquidity on acceptable terms, in both Europe and globally, and has introduced significant uncertainty into global markets. As a result, our business and results of operations may be adversely affected by the ongoing military conflict between Ukraine and Russia and related sanctions, particularly to the extent it escalates to involve additional countries, further economic sanctions or wider military conflict.

During the three and six months ended June 30, 2022, the Company experienced supply chain challenges, which it largely attributes to the COVID-19 pandemic and the general disruptions from the ongoing conflict between Ukraine and Russia and related sanctions. While neither the COVID-19 pandemic nor the Ukraine-Russia conflict prevented the Company from operating its business during the three and six months ended June 30, 2022, it experienced increased cost to secure certain component parts in its products and to produce its products at its contract manufacturers. The Company expects these increased costs to remain high as the COVID-19 pandemic, the Ukraine-Russia conflict and their respective effects persist.

As global economic conditions recover from the COVID-19 pandemic, the Ukraine-Russia conflict and the related sanctions, business activity may not recover as quickly as anticipated, and it is not possible at this time to estimate the long-term impact that these and related events could have on the Company’s 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, rising inflation rates, labor shortages, a decrease in corporate capital expenditures, prolonged unemployment, reduction in consumer confidence, adverse macroeconomic events, or any similar negative economic condition. Further, the travel restrictions on the Company’s business have limited its ability to support its global and domestic operations, including providing installation and training and customer service, which has and may continue to slow the pace of its commercial strategy, sales and marketing efforts. These negative effects could have a material impact on the Company’s operations, business, earnings, and liquidity.

Significant Accounting Policies

During the three and six months ended June 30, 2022, 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, 2021.

Recently Issued But Not Yet Adopted Accounting Pronouncements

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.

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-02, “Leases (Topic 842)” (“ASC 842”) which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. ASC 842 establishes a right-of-use model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. ASC 842 also requires disclosures to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The standard was adopted on January 1, 2021, as the Company lost its status as an Emerging Growth Company effective December 31, 2021, and therefore was required to adopt the standard for the year ending December 31, 2021, using the modified retrospective method. Under this transition method, the Company recognized and measured leases that existed at the adoption date in the consolidated balance sheet as of January 1, 2021. In connection with the adoption of ASC 842, the Company elected the package of practical expedients requiring no reassessment of whether any expired or existing contracts contain leases, the lease classification of any expired or existing leases, or initial direct costs for any existing leases. The Company also made accounting policy elections not to apply the recognition requirements under ASC 842 to any short-term leases and to account for each separate lease and associated non-lease components as a single lease component for all the Company’s leases. The adoption of this new accounting standard resulted in increased qualitative and quantitative disclosures regarding the amount,

Table of Contents

timing, and uncertainty of cash flows arising from leases. For further details, see Note 7, Commitments and Contingencies. The adoption of the new standard did not materially impact the Company’s consolidated results of operations.

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-classified warrants. The standard is effective for fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company’s adoption of this accounting standard on January 1, 2022, did not have a material impact on the Company’s consolidated financial statements and related disclosures.

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 share equivalents are only included when their effect is dilutive. Pre-funded warrants from the Company’s follow-on offering have been treated as if they were common shares outstanding on the date of issuance. The Company’s potentially dilutive securities which include outstanding warrants to purchase stock and outstanding stock options under the Company’s equity incentive plans have been excluded from the computation of diluted net loss per share as they would be anti-dilutive to the net loss per share. Restricted stock is treated as outstanding for accounting purposes. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

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):


	June 30, 2022	June 30, 2021
Stock options	23,585,000	9,550,000
Unvested restricted stock	3,841,000	—
Warrants	4,356,000	4,361,000
RSUs	230,000	530,000
PSUs	290,000	290,000
Total	32,302,000	14,731,000

3. Revenue Recognition

Revenue by Source


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Instruments	$	2,446,000	$	1,158,000	$	4,042,000	$	2,040,000
Consumables	1,467,000		1,338,000		2,987,000		2,505,000
Total product revenue	3,913,000		2,496,000		7,029,000		4,545,000
Service and other	2,757,000		1,360,000		5,337,000		2,479,000
Total revenue	$	6,670,000	$	3,856,000	$	12,366,000	$	7,024,000

Revenue by Geographic Location


	Three Months Ended June 30,								Six Months Ended June 30,
	2022				2021				2022				2021
	$		%		$		%		$		%		$		%
Americas	$	2,611,000	39	%	$	2,365,000	61	%	$	5,940,000	48	%	$	3,872,000	55	%
EMEIA	2,609,000		39	%	940,000		25	%	4,348,000		35	%	2,518,000		36	%
Asia Pacific	1,450,000		22	%	551,000		14	%	2,078,000		17	%	634,000		9	%
Total	$	6,670,000	100	%	$	3,856,000	100	%	$	12,366,000	100	%	$	7,024,000	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. Americas consists of North America and South America. 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 June 30, 2022 and 2021, the United States represented 37.4% and 59.5% of total revenue, respectively. For the

Table of Contents

six months ended June 30, 2022 and 2021, the United States represented 40.9% and 53.1% of total revenue, respectively. For the three and six months ended June 30, 2022, China represented 19.3% and 12.9% of total revenue, respectively. No other countries represented greater than 10% of revenue during the three and six months ended June 30, 2022 and 2021.

Remaining Performance Obligations

As of June 30, 2022, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied was approximately $1.4 million. These remaining performance obligations primarily relate to extended warranty and support and maintenance obligations. The Company expects to recognize approximately 59.3% of this amount as revenue during the remainder of 2022, 32.6% in 2023, and 8.1% in 2024 and thereafter. Warranty revenue is included in service and other revenue.

The Company recognized revenue of approximately $0.2 million and $0.1 million during the three months ended June 30, 2022 and 2021, respectively, and revenue of approximately $0.5 million and $0.2 million during the six months ended June 30, 2022 and 2021, respectively, which was included in the contract liability balance at the end of the previous year.

4. Balance Sheet Account Details

Accounts Receivable


	June 30, 2022		December 31, 2021
Accounts receivable, net:
Accounts receivable, trade	$	5,314,000	$	5,624,000
Less allowance for doubtful accounts	(463,000)		(690,000)
	$	4,851,000	$	4,934,000

Inventory

The components of inventories are as follows:


	June 30, 2022		December 31, 2021
Inventory:
Raw materials	$	837,000	$	745,000
Finished goods	19,754,000		11,642,000
	$	20,591,000	$	12,387,000

Intangible Assets

Intangible assets that are subject to amortization consisted of the following for the periods presented:


	June 30, 2022						December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trade name	$	1,630,000	$	(372,000)	$	1,258,000	$	1,630,000	$	(210,000)	$	1,420,000
Customer relationships	3,950,000		(773,000)		3,177,000		3,950,000		(378,000)		3,572,000
Developed technology	22,800,000		(3,230,000)		19,570,000		22,800,000		(950,000)		21,850,000
Intangibles, net	$	28,380,000	$	(4,375,000)	$	24,005,000	$	28,380,000	$	(1,538,000)	$	26,842,000

Table of Contents

Accrued Expenses

Accrued expenses consist of the following:


	June 30, 2022		December 31, 2021
Compensation expenses	$	4,861,000	$	4,529,000
Goods received not invoiced	1,238,000		1,073,000
Customer deposits	73,000		826,000
Taxes payable	722,000		677,000
Insurance	—		1,011,000
Professional fees and royalties	368,000		288,000
Warranty liabilities	175,000		175,000
Accrued clinical study fees	169,000		1,000
Other	154,000		1,114,000
Total	$	7,760,000	$	9,694,000

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”). 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 six months ended June 30, 2021.

Innovatus Loan and Security Agreement

In May 2021, the outstanding term loan with Innovatus (“Innovatus LSA”) was paid in full, including all accrued interest, the end of term fee, and a prepayment fee for a total of approximately $17.0 million. Interest expense recognized during the three and six months ended June 30, 2021 totaled approximately $0.3 million and $0.9 million, respectively.

6. Stockholders’ Equity and Stock-Based Compensation

Follow-on Public Offerings

On January 12, 2021 and January 25, 2021, the Company completed an underwritten public offering of 33.4 million and 38.3 million shares of common stock, respectively. The price to the public in the offerings on January 12, 2021 and January 15, 2021 was $3.05 and $6.00 per share, respectively. The net proceeds to the Company from the offerings, after deducting the underwriting discounts and commissions and other offering expenses, were $101.5 million and $229.6 million, respectively.

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 million of the Company’s securities, including up to $40 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 2020 through January 2021, the Company sold approximately 27.0 million shares of common stock under the Ladenburg ATM and received net proceeds of $38.0 million after deducting aggregate offering costs. 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. As of June 30, 2022, as a consequence of the Company’s re-qualification as a “smaller reporting company,” the Company may lose “well-known seasoned issuer” status at the time it files its Annual Report on Form 10-K for the fiscal year ending December 31, 2022 if the worldwide market value of its voting and non-voting common equity held by its non-affiliates does not equal $700.0 million or more, calculated as of a date within 60 days prior to filing such report. If that were to occur and the Company were no longer considered a well-known seasoned issuer, the Company anticipates needing to amend its automatically effective shelf registration statement on Form S-3 prior to its filing of such annual report (or earlier if required by the Securities Act or the rules and regulations of the SEC) in order to sell securities under that Form S-3 on an ongoing basis.

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

Table of Contents

$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 approximately 2.3 million 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. There were no sales of common stock under the Cowen ATM from January 1, 2022 to June 30, 2022.

Stock Warrants

A summary of the Company’s warrant activity during the six months ended June 30, 2022 was as follows:


	Shares of Stock under Warrants	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	4,356,000	$	5.96	1.76	$	785,000
Granted	—	—		—	—
Exercised	—	—		—	—
Canceled	—	—		—	—
Outstanding at June 30, 2022	4,356,000	$	5.96	1.27	$	246,000

Stock Options

A summary of the Company’s stock option activity during the six months ended June 30, 2022 was as follows:


	Shares of Stock under Stock Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2022	12,765,000	$	4.97	8.9	$	7,891,000
Granted	12,797,000	2.11		—	—
Exercised	(270,000)	0.59		—	302,000
Canceled	(1,708,000)	5.00		—	—
Outstanding at June 30, 2022	23,584,000	$	3.47	9.08	$	2,053,000
Vested and exercisable at June 30, 2022	4,976,000	$	3.90	7.96	$	1,327,000

For the three months ended June 30, 2022, the weighted-average grant date fair value of stock options granted was $1.17 per share. For the six months ended June 30, 2022, the weighted-average grant date fair value of stock options granted was $1.33 per share.

Stock-Based Compensation

The Company recognized stock-based compensation expense for the periods presented as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	3,468,000	$	384,000	$	6,795,000	$	465,000
General and administrative	2,309,000		1,374,000		4,084,000		1,664,000
Total stock-based compensation expense	$	5,777,000	$	1,758,000	$	10,879,000	$	2,129,000

Table of Contents

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 June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Risk-free interest rate	2.8	%	1.1	%	2.1	%	1.1	%
Expected volatility	70.6	%	80.4	%	70.2	%	80.4	%
Expected term (in years)	5.7		6.0		6.0		6.0
Expected dividend yield	0.0	%	0.0	%	0.0	%	0.0	%

Restricted Stock

A restricted stock award in the amount of 5.0 million shares with a grant date fair value of $5.20 a share was granted as part of the acquisition of BioDiscovery. One-third of the Restricted Shares will vest on October 18, 2022 and one-twelfth of the Restricted Shares shall vest every three months following October 18, 2022, subject to continuous service of a key employee. The weighted average remaining contractual term for the restricted stock is 2.3 years as of June 30, 2022. The fair value of the restricted stock award is based on the market value of common stock as of the date of grant and is amortized to expense over the respective vesting period or the service period.

Restricted Stock Units and Performance Stock Units

The following table summarizes restricted share unit (“RSU”) activity during the six months ended June 30, 2022:


	Stock Units	Weighted- Average Grant Date Fair Value per Share
Outstanding at January 1, 2022	361,000	$	4.74
Granted	—	—
Released	(131,000)	4.74
Forfeited	—	—
Outstanding at June 30, 2022	230,000	$	4.74

The total intrinsic value of the RSUs that vested during the six months ended June 30, 2022 was $0.6 million, determined as of the date of vesting. The weighted average remaining contractual term for the RSUs is 0.9 years as of June 30, 2022.

The following table summarizes performance share unit (“PSU”) activity during the six months ended June 30, 2022:


	Stock Units	Weighted- Average Grant Date Fair Value per Share
Outstanding at January 1, 2021	290,000	$	4.74
Granted	—	—
Released	—	—
Forfeited	—	—
Outstanding at June 30, 2022	290,000	$	4.74

The weighted average remaining contractual term for the PSUs is 2.9 years as of June 30, 2022.

Executive Option Grants

On February 15, 2022, the compensation committee of the Company’s board of directors granted various executive officers stock options to purchase an aggregate of 4.3 million shares of common stock at an exercise price of $2.18 a share, in each case with an effective grant date and vesting commencement date of February 15, 2022 (the “Grant Date”). These stock option grants were issued from the 2018 Stock Plan. The shares subject to the option shall vest monthly over 48 months beginning on

Table of Contents

the one-month anniversary of the Grant Date, such that the option shall be fully vested and exercisable on the four-year anniversary of the Grant Date.

7. Commitments and Contingencies

The Company discounts its lease payments using its incremental borrowing rate as of the commencement of the lease. The Company has determined a weighted-average discount rate of 7% as of June 30, 2022 and December 31, 2021.

The operating lease right-of-use asset and operating lease liability as of June 30, 2022 and December 31, 2021 are as follows:


	June 30, 2022	December 31, 2021
Operating lease right-of-use assets	$