DEFA14A: Bionano Genomics Urges Stockholders to Approve Reverse Stock Split to Maintain Nasdaq Listing and Secure Future Funding

Bionano Genomics is urging its stockholders to vote in favor of Proposal 2, a reverse stock split, to maintain its Nasdaq listing and improve its ability to raise capital.

Summary

• Bionano Genomics has issued a letter to stockholders urging them to vote in favor of Proposal 2, a reverse stock split, at the upcoming special meeting on January 15, 2025.
• The company believes a reverse stock split is necessary to maintain compliance with Nasdaq listing requirements, as its stock price has been below $1.00 since the end of May 2024, risking delisting.
• Management believes that a reverse stock split would improve the marketability of its common stock, making it easier to raise capital, attract talent, and structure finances.
• Bionano has been focusing on increasing utilization of its OGM products with existing customers, which requires less capital and labor.
• The company highlights progress, including a Category 1 CPT code approval for OGM and an increase in installed OGM systems and flowcell sales.
• Continued investment is needed to drive progress, and the reverse stock split is seen as a way to secure funding for this.
• The company had 368 installed OGM systems at the end of Q3 2024, a 22% increase year-over-year.
• Flowcell sales were 7,835 in Q3 2024, a 27% increase year-over-year.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the company highlights positive progress in OGM adoption, the need for a reverse stock split and potential capital raise indicates financial challenges.

Positives

• Bionano received a Category 1 CPT code approval for OGM use in hematological malignancy analysis in May 2024.
• The company's installed base of OGM systems increased by 22% year-over-year to 368 at the end of Q3 2024.
• Flowcell sales increased by 27% year-over-year to 7,835 in Q3 2024.
• The company is shifting its sales approach to focus on increasing utilization of OGM products with existing customers, which requires less capital and labor.

Negatives

• Bionano's stock price has been below $1.00 since the end of May 2024, putting it at risk of being delisted from the Nasdaq Capital Market.
• The company believes a reverse stock split is necessary, which is generally viewed negatively by investors.

Risks

• Failure to obtain stockholder approval for the reverse stock split could result in delisting from the Nasdaq.
• Delisting from Nasdaq could have a material adverse effect on the value of the company and its stock.
• The company's ability to continue as a going concern depends on managing costs and obtaining additional financing.
• Adverse geopolitical and macroeconomic events, such as bank failures and the conflicts in Ukraine and the Middle East, could impact the business and the global economy.

Future Outlook

The company believes that the reverse stock split will increase its ability to raise capital to continue its work and potentially accelerate the momentum of OGM.

Management Comments

• Erik Holmlin, PhD, President and CEO, stated that while a reverse stock split is not desired, it is necessary to maintain Nasdaq listing compliance.
• Management believes that effecting a reverse stock split may provide a more attractive stock price at which investors would be willing to contribute new capital necessary for the Company to continue operations.

Industry Context

Bionano is focused on transforming traditional cytogenetic workflows into a modern, molecular workflow based on optical genome mapping (OGM). The company's progress in obtaining a CPT code and increasing its installed base reflects growing acceptance of OGM in the market.

Comparison to Industry Standards

• It is difficult to compare Bionano directly to industry standards as OGM is a relatively new technology.
• However, companies like Pacific Biosciences and Illumina are key players in the broader genomics market and serve as benchmarks for innovation and market adoption.
• Bionano's success will depend on its ability to demonstrate the clinical utility and cost-effectiveness of OGM compared to existing cytogenetic methods.

Stakeholder Impact

• Shareholders face potential dilution from a reverse stock split, but also the risk of delisting if it is not approved.
• Employees' job security is tied to the company's ability to secure funding and continue operations.
• Customers benefit from the continued development and adoption of OGM technology.

Next Steps

• Stockholders will vote on Proposal 2, the reverse stock split, at the special meeting on January 15, 2025.
• The company will continue to focus on increasing utilization of its OGM products and reducing cash needs.

Key Dates

Keywords

Bionano Genomics, reverse stock split, Nasdaq, OGM, optical genome mapping, stockholders, delisting, capital, funding, flowcells