Bionano's Debt Restructuring Boosts Cash Runway, Enhances Financial Flexibility

Bionano Genomics, Inc. (BNGO) recently announced an amendment to its senior secured convertible debentures, marking a significant step in its debt restructuring efforts. This move aims to improve the company's cash runway and enhance its financial flexibility, enabling it to advance its business and continue on its path to profitability. The amendment, effective as of May 28, 2024, involves a private placement of senior secured convertible debentures due May 24, 2026, which raised $18.0 million in gross proceeds for Bionano.

The amendment allows Bionano to completely retire the convertible debt financing previously entered into in October 2023, strengthening its capital structure and improving its liquidity position. This new financing reinforces the strategic plan set out by the company in February 2024, enabling it to drive adoption and utilization of optical genome mapping while continuing to review strategic alternatives to maximize shareholder value.

The amendment includes several key components that contribute to Bionano's near-term financial flexibility:

1. Reduction in minimum available liquidity covenant and restricted cash covenant: The reduction of the minimum available liquidity covenant from $50.0 million to $25.0 million and the restricted cash covenant from $35.0 million to $25.0 million, which will be further reduced as the remaining principal on the Initial Registered Note is retired, allows Bionano to access more capital and reduce the amount of debt on its balance sheet. This provides immediate access to $30.0 million of near-term liquidity and up to an additional $25.0 million of liquidity from the restricted cash account as the principal on the Notes is retired.
2. Cancellation and delay of partial redemption payments, and redemption of outstanding notes: The cancellation and delay of partial redemption payments, as well as the redemption of the outstanding $17.0 million balance of the Initial Private Placement Note and approximately $10.7 million of the Initial Registered Note, reduce the amount of debt on Bionano's balance sheet. This arrangement provides immediate access to $30.0 million of near-term liquidity and allows the company to have access to up to an additional $25.0 million of liquidity from the restricted cash account as the principal on the Notes is retired.
3. Increase in the Retirement Fee for the Initial Private Placement Note: The increase in the Retirement Fee for the Initial Private Placement Note to $1.0 million payable concurrently with redemptions of the Initial Private Placement Note is part of Bionano's overall debt restructuring strategy. This increase allows the company to redeem a larger portion of the Initial Private Placement Note, reducing the amount of debt on its balance sheet and providing the company with immediate access to $30.0 million of near-term liquidity and up to an additional $25.0 million of liquidity from the restricted cash account as the principal on the Notes is retired.

Bionano's president and chief executive officer, Erik Holmlin, PhD, commented on the amendment, stating, "We believe that this modification of our debt obligations, combined with the cost savings initiatives we executed in both May and October of last year, will offer us additional flexibility to advance our business. We will continue to carefully monitor our expenditures and look forward to providing additional detail on our financial progress at our Q4 & Full Year 2023 conference call. We believe that these efforts will allow us to continue to realize the full potential of optical genome mapping and continue on our path to profitability."

In conclusion, Bionano's amendment to its senior secured convertible debentures is a crucial step in its debt restructuring efforts, providing the company with improved cash runway and enhanced financial flexibility. This amendment enables Bionano to advance its business, drive adoption and utilization of optical genome mapping, and continue on its path to profitability.