Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

The Company has entered into various operating lease agreements and a finance lease agreement, primarily relating to our office, laboratory, and manufacturing space. See Note 11 – Commitments and Contingencies, subsection titled “Leases”, in Part II, Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2023 for information regarding the Company’s lease agreements.

The future minimum payments under non-cancellable operating and finance leases as of March 31, 2024, are as follows:


	Operating Leases		Finance Lease
Remainder of 2024	$	2,085,000	$	248,000
2025	2,608,000		338,000
2026	544,000		346,000
2027	254,000		356,000
2028	—		365,000
Thereafter	—		5,230,000
Total future lease payments	5,491,000		6,883,000
Less: imputed interest	(546,000)		(3,039,000)
Total lease liabilities	$	4,945,000	$	3,844,000

Restructuring

In October, 2023, the Company committed to a series of cost saving initiatives including a reduction in force (the “Workforce Reduction”) and, as a result of reducing facility costs and discretionary spending unrelated to headcount and combined with the cost savings from the reduction in force the Company initiated in May 2023, such plan is intended to decrease expenses and maintain a streamlined organization to support its business. In connection with the Company’s restructuring initiatives, the Company entered into a lease termination agreement on February 28, 2024 with the landlord for the facility in Salt Lake City that will result in a one-time termination fee of approximately $0.2 million in the third quarter of 2024. The Company will continue to lease the property through June 2024. The Company accounted for the lease amendment as a lease modification as of March 31, 2024 and recorded a gain of $0.1 million

On March 1, 2024, the Board of Directors approved a cost savings plan, including a reduction in force, that it expects to reduce its annualized operating expenses. This cost savings plan is incremental to the 2023 Workforce Reduction. As part of the plan, the Company plans to reduce its overall headcount by approximately 120 employees. The Company expects to substantially complete the reduction in force by June 30, 2024. In addition, Bionano Laboratories will phase out over time the offering of certain testing services related to neurodevelopmental disorders, including autism spectrum disorders, and other disorders of childhood development. As of the issuance date of these unaudited condensed consolidated financial statements we have not yet ceased offering the above-referenced services. The estimates of costs and expenses that the Company expects to incur in connection with the reduction in force are subject to a number of assumptions and actual results may differ materially. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the reduction in force.

The workforce reduction resulted in total restructuring charges of approximately $3.9 million, comprised primarily of severance payments and wages for the 60-day notice period in accordance with the California Worked Adjustment and Retraining Notification (WARN) Act.

The following is a summary of restructuring charges associated with the reduction in force for the quarter ended March 31, 2024 including severance, impairment, and other exit related costs:


Severance	$	3,874,000
Lease related expenses	211,000
Other	547,000
Total restructuring charges including in operating expenses	$	4,632,000
COGS restructuring	$	11,000
Total restructuring charges	$	4,643,000

The following restructuring liability activity was recorded in connection with the reduction in force for the quarter ended March 31, 2024 including within accrued expenses on the unaudited condensed consolidated financial statements:


Accrued restructuring as of December 31, 2023	$	83,000
Restructuring charges incurred during the period	4,643,000
Cash payments	—
Accrued restructuring as of March 31, 2024	$	4,726,000

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 unaudited condensed consolidated financial statements. An estimated loss contingency is accrued in the unaudited condensed consolidated 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.

Contingent Consideration

See Note 8 (Investments and Fair Value Measurements) for a discussion of the contingent consideration liability.