Bionano Genomics (BNGO) risk factors, FY2024 10-K

Risks related to our financial condition and need for additional capital

1. 01We have incurred recurring net losses since we were formed and expect to incur losses in the future. We cannot be certain that we will ever achieve or sustain profitability
2. 02Our corporate cost saving initiatives and the associated headcount reductions we announced in May 2023, October 2023, March 2024, and September 2024 could disrupt our business, and may not achieve our intended objectives
3. 03We are an early commercial-stage company and have a limited commercial history, which may make it difficult to evaluate our current business and predict our future performance
4. 04Our quarterly and annual operating results and cash flows have fluctuated in the past and might continue to fluctuate, which makes our future operating results difficult to predict and could cause the market price of our securities to decline substantially
5. 05If we are unable to maintain adequate revenue growth or do not successfully manage such growth, our business and growth prospects will be harmed
6. 06A failure in any one of these areas could make it difficult for us to meet market expectations for our products and technologies, and could damage our reputation and the prospects for our business
7. 07As of December 31, 2024, we had $9.2 million in cash and cash equivalents, $0.3 million in short-term investments, and $11.4 million in restricted cash and cash equivalents and restricted short-term investments
8. 08You may experience future dilution as a result of future equity offerings
9. 09Servicing the Debentures requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our obligations under the Debentures or our other permitted indebtedness
10. 10The terms of the Debentures and the Debenture Purchase Agreement restrict our current and future operations. Upon an event of default under the Debentures, we may not be able to make any accelerated payments under the Debentures or our other permitted indebtedness
11. 11Unfavorable geopolitical and macroeconomic developments could adversely affect our business, financial condition or results of operations
12. 12customer buying decisions, prompting customers to delay or cancel their orders, which would negatively impact our sales revenue and could harm our reputation
13. 13Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations
14. 14Our ability to use net operating losses and certain other tax attributes to offset future taxable income and taxes may be subject to limitations

Risks related to our business operations

1. 15Acquisitions, joint ventures and other strategic transactions could disrupt or otherwise harm our business and may cause dilution to our stockholders
2. 16Foreign acquisitions involve unique risks in addition to those mentioned above, including those related to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries
3. 17If our products or technologies fail to achieve and sustain sufficient market acceptance, our revenue will be adversely affected
4. 18Equity issuances in connection with strategic transactions or raising additional capital may cause dilution to our stockholders or restrict our operations
5. 19The issuance of shares under awards granted under existing or future employee equity benefit plans may cause immediate and substantial dilution to our existing stockholders
6. 20If we are unable to execute our sales and marketing strategy for our Bionano Laboratories products and services, including diagnostic assays, and are unable to gain acceptance in the market, we may be unable to generate sufficient revenue to sustain our Bionano Laboratories business
7. 21The sales cycle for our systems can be lengthy and variable, which makes it difficult for us to forecast revenue and other operating results
8. 22Our long-term results depend upon our ability to improve existing products and technologies and introduce and market new products and technologies successfully
9. 23If we do not successfully manage the development and launch of new products and technologies, our financial results could be adversely affected
10. 24Our future success is dependent upon our ability to further penetrate our existing customer base, attract new customers and retain the customers of our acquired businesses
11. 25The size of the markets for our products and technologies may be smaller than we estimate, and new markets may not develop as quickly as we expect, or at all, limiting our ability to successfully sell our products and technologies
12. 26We are currently limited to RUO with respect to many of the materials and components used in our consumable products including our assays
13. 27We have limited experience in marketing and selling our products and technologies, and if we are unable to successfully commercialize our products and technologies, our business and operating results will be adversely affected
14. 28We rely on a single contract manufacturer for our OGM systems and a limited number of contract manufacturers for our chip consumables. If any of these manufacturers should fail or not perform satisfactorily, our ability to supply these products would be negatively and adversely affected
15. 29We have experienced manufacturing problems or delays that could limit the growth of our revenue or increase our losses
16. 30We currently perform all research and development activities and OGM services at a single laboratory facility in San Diego, California. All of our molecular diagnostics services are reported through a single facility in San Diego, California
17. 31In addition, the loss of our samples due to such events could limit or prevent our ability to conduct research and development analysis on existing tests as well as tests in development
18. 32Undetected errors or defects in our products or technologies could harm our reputation, decrease market acceptance of our products or technologies or expose us to product liability claims or recalls
19. 33Our reliance on distributors for sales of our products outside of the United States could limit or prevent us from selling our products and could impact our revenue
20. 34We expect to generate a substantial portion of our revenue internationally in the future and can become further subject to various risks relating to our international activities, which could adversely affect our business, operating results and financial condition
21. 35If we are unable to recruit, train, retain, motivate and integrate key personnel, we may not achieve our goals
22. 36If we cannot provide quality technical and applications support, we could lose customers and our business and prospects will suffer
23. 37In addition to experiencing a security incident, third parties may gather, collect, or infer Sensitive Data about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position
24. 38The life sciences research and diagnostic markets are highly competitive. If we fail to effectively compete, our business, financial condition and operating results will suffer
25. 39If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business

Risks related to government regulation and diagnostic product reimbursement

1. 40We expect to rely on third parties in conducting any required future studies of diagnostic products that may be required by the FDA or other regulatory authorities, and those third parties may not perform satisfactorily
2. 41Billing for our Bionano Laboratories diagnostic testing procedures is complex and requires substantial time and resources to collect payment
3. 42As we introduce new products, we may need to add new codes to our billing process as well as our financial reporting systems. Failure or delays in effecting these changes in external billing and internal systems and processes could negatively affect our collection rates, revenue and cost of collecting
4. 43If our Bionano Laboratories diagnostic testing procedures are subject to unfavorable pricing regulations or third-party payor coverage and reimbursement policies, our business could be harmed
5. 44If diagnostic procedures that are enabled by our OGM technology are subject to unfavorable pricing regulations or third-party payor coverage and reimbursement policies, our business could be harmed
6. 45Healthcare legislative or regulatory reform measures may have a negative impact on our business and results of operations
7. 46Complying with numerous regulations pertaining to our business is an expensive and time-consuming process, and any failure to comply could result in substantial penalties
8. 47We are subject to federal and state healthcare fraud and abuse laws and other federal and state laws applicable to our business activities, including our marketing practices. If we are unable to comply, or have not complied, with such laws, we could face substantial penalties
9. 48We are subject to U.S. and foreign anti-corruption and anti-money laundering laws with respect to our operations and non-compliance with such laws can subject us to criminal and/or civil liability and harm our business
10. 49We are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws

Risks related to intellectual property

1. 50If we are unable to protect our intellectual property, it may reduce our ability to maintain any technological or competitive advantage over our competitors and potential competitors, and our business may be harmed
2. 51The measures that we use to protect the security of our intellectual property and other proprietary rights may not be adequate, which could result in the loss of legal protection for, and thereby diminish the value of, such intellectual property and other rights
3. 52We depend on intellectual property that is licensed to us by third parties. Loss of our rights to such licensed intellectual property or our inability to enter into necessary licenses on acceptable terms may have an adverse impact on our results of operation
4. 53If we or any of our partners is sued for infringing intellectual property rights of third parties, it would be costly and time consuming, and an unfavorable outcome in that litigation could have a material adverse effect on our business
5. 54We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming and unsuccessful
6. 55Our issued patents could be found invalid or unenforceable if challenged in court or at the Patent Office or other administrative agency, which could have a material adverse impact on our business
7. 56We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property
8. 57We may not be able to protect our intellectual property rights throughout the world, which could materially and negatively affect our business
9. 58Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license and may adversely impact our business
10. 59Changes in patent laws or patent jurisprudence could diminish the value of patents in general, thereby impairing our ability to protect our products or technologies
11. 60Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
12. 61If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected
13. 62Use of third-party open source software components in our products or our future products or technologies, and failure to comply with the terms of the underlying open source software licenses could restrict our ability to sell such products or technologies
14. 63We use third-party software that may be difficult to replace or cause errors or failures of our products that could lead to lost customers or harm to our reputation
15. 64Numerous factors may limit any potential competitive advantage provided by our intellectual property rights

Risks related to ownership of our securities

1. 65The price of our securities has been and may in the future be volatile or may decline regardless of our operating performance, and you could lose all or part of your investment
2. 66The reverse stock splits we implemented may not achieve the intended results and the market price of our common stock may be materially and negatively impacted
3. 67board of directors in its sole discretion. On January 15, 2025, our board of directors approved a reverse stock split at a ratio of 1-for-60, and on January 24, 2025, we filed a certificate of amendment to effect the reverse split ratio chosen by our board of directors
4. 68The effective increase in the number of shares of our common stock available for issuance as a result of the reverse stock splits could result in further dilution to our existing stockholders and have anti-takeover implications
5. 69If we are not able to comply with the applicable continued listing requirements or standards of The Nasdaq Capital Market, Nasdaq could delist our common stock
6. 70agreements that we have in place with third parties. Delisting could also cause a loss of confidence of our customers, collaborators, vendors, suppliers and employees, which could harm our business and future prospects
7. 71We are a smaller reporting company, and the reduced reporting requirements applicable to smaller reporting companies could make our securities less attractive to investors
8. 72A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well
9. 73Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control which could limit the market price of our securities and may prevent or frustrate attempts by our security holders to replace or remove our current management
10. 74An active trading market for our common stock may not be sustained

Risks Related to Our Review of Strategic Alternatives

1. 75We may not be successful in identifying and implementing any potential strategic alternatives in a timely manner, or at all, and any strategic transactions that we may consummate in the future could have negative consequences
2. 76The value to stockholders in the event of a strategic transaction or dissolution may depend on the extent to which we will be able to successfully satisfy our existing contractual obligations to third parties on favorable terms, which may include the outcome of our negotiations to reduce or terminate such commitments
3. 77If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the price of our securities and trading volume could decline
4. 78Our business could be negatively affected as a result of actions of activist stockholders, and such activism could impact the trading value of our securities
5. 79Securities class action litigation could divert our management’s attention and harm our business and could subject us to significant liabilities