10q10k10q10k.net

What changed in SERA PROGNOSTICS, INC.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of SERA PROGNOSTICS, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+347 added−259 removedSource: 10-K (2025-03-19) vs 10-K (2024-03-20)

Top changes in SERA PROGNOSTICS, INC.'s 2024 10-K

347 paragraphs added · 259 removed · 212 edited across 6 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

145 edited+108 added−33 removed433 unchanged
Biggest changeIf we are unable to compete successfully with respect to our current or future products or services, we may not be able to increase or sustain our revenues or achieve profitability. • If our CLIA-certified laboratory facility becomes inoperable, we will be unable to perform our tests and our business will be harmed. • Interim, top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as additional data become available and are subject to confirmation, audit, and verification procedures that could result in material changes in the final data. • Our business would be materially harmed if our proprietary biobank were to become contaminated, lost or destroyed. • We rely on third parties for specimen collection, including phlebotomy services, and commercial courier delivery services, and if these services are disrupted, our business will be harmed. • We rely on a limited number of suppliers or, in some cases, single suppliers, for some of our laboratory instruments and materials and may not be able to find replacements or immediately transition to alternative suppliers on a cost-effective basis, or at all. • Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited. 40 Table of Contents • Our estimates of total addressable market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at a similar rate. • The inflationary environment could materially adversely impact our business and results of operations. • If third-party payers do not adequately reimburse for the PreTRM test or any new tests we may develop, such tests may not be purchased or used, which may adversely affect our revenue and profits. • New reimbursement methodologies applicable to the PreTRM test, and other future tests, including new CPT codes, may decrease reimbursement rates from third-party payers. • Billing disputes with third-party payers, including disagreement regarding the selection and use of CPT codes when submitting claims, may decrease realized revenue and may lead to requests for recoupment of past amounts paid. • When third-party payers deny coverage, we are often unable to collect from the patient or any other source and risk disputes if we attempt to do so. • Our revenues may be adversely impacted if third-party payers withdraw coverage or provide lower levels of reimbursement due to changing policies, billing complexities or other factors. • Status as an out-of-network provider with a large commercial insurer may cause health care providers to avoid recommending our tests. • If the validity of an informed consent from a patient is challenged, we could be precluded from billing for such patient’s testing, be forced to stop performing certain tests, forced to exclude the patient’s data or specimens from clinical trial results or be subject to lawsuits or regulatory enforcement. • Changes in the way the FDA regulates the reagents, other consumables, and testing equipment we use when developing, validating, and performing our tests could result in delay or additional expense in bringing our tests to market or performing such tests for our customers. • If we fail to comply with federal and/or state laboratory licensing requirements, we could lose the ability to perform our tests or experience disruptions to our business. • Any failure to obtain, maintain, and enforce our intellectual property rights could impair our ability to protect our proprietary technology and our brand. • Issued patents covering our tests and technology could be found invalid or unenforceable, if challenged. • Our intellectual property may be infringed by a third party. • If we are not able to prevent disclosure of our trade secrets and other proprietary information, the value of our tests and technology could be significantly diminished. • The price of our Class A common stock may be volatile, and you could lose all or part of your investment. • Sales of a substantial number of shares of our Class A common stock by our existing stockholders in the public market could cause our stock price to fall. • Our inability to maintain effective disclosure controls and procedures could adversely affect our results of operations, liquidity and financial positions, as well as our stock price and investor confidence in us.
Biggest changeIf we are unable to compete successfully with respect to our current or future products or services, we may not be able to increase or sustain our revenues or achieve profitability. • If our CLIA-certified laboratory facility becomes inoperable, we will be unable to perform our tests and our business will be harmed. • Interim, top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as additional data become available and are subject to confirmation, audit, and verification procedures that could result in material changes in the final data. • Our business would be materially harmed if our proprietary biobank were to become contaminated, lost or destroyed. • Some of our products and services rely heavily on access to internal and external databases, and loss of access to such databases could materially harm our business. • We rely on third parties for specimen collection, including phlebotomy services, and commercial courier delivery services, and if these services are disrupted, our business will be harmed. • We rely on a limited number of suppliers or, in some cases, single suppliers, for some of our laboratory instruments and materials, as well as for our recently developed whole-blood collection kit, and may not be able to find replacements or immediately transition to alternative suppliers on a cost-effective basis, or at all. • Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited. 42 Table of Contents • Our estimates of total addressable market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at a similar rate. • An inflationary environment could materially adversely impact our business and results of operations. • If third-party payers do not adequately reimburse for the PreTRM test or any new products we may develop, such may not be purchased or used, which may adversely affect our revenue and profits. • New reimbursement methodologies applicable to the PreTRM test, and other future products, including new CPT codes, may decrease reimbursement rates from third-party payers. • Billing disputes with third-party payers, including disagreement regarding the selection and use of CPT codes when submitting claims, may decrease realized revenue and may lead to requests for recoupment of past amounts paid. • When third-party payers deny coverage, we are often unable to collect from the patient or any other source and risk disputes if we attempt to do so. • Our revenues may be adversely impacted if third-party payers withdraw coverage or provide lower levels of reimbursement due to changing policies, billing complexities or other factors. • Status as an out-of-network provider with a large commercial insurer may cause health care providers to avoid recommending our tests. • If the validity of an informed consent from a patient is challenged, we could be precluded from billing for such patient’s testing, be forced to stop performing certain tests, forced to exclude the patient’s data or specimens from clinical trial results or be subject to lawsuits or regulatory enforcement. • Changes in the way the FDA regulates the reagents, other consumables, and testing equipment we use when developing, validating, and performing our tests could result in delay or additional expense in bringing our tests to market or performing such tests for our customers. • If we fail to comply with federal and/or state laboratory licensing requirements, we could lose the ability to perform our tests or experience disruptions to our business. • Any failure to obtain, maintain, and enforce our intellectual property rights could impair our ability to protect our proprietary technology and our brand. • Issued patents covering our tests and technology could be found invalid or unenforceable, if challenged. • Our intellectual property may be infringed by a third party. • If we are not able to prevent disclosure of our trade secrets and other proprietary information, the value of our tests and technology could be significantly diminished. • The price of our Class A common stock may be volatile, and you could lose all or part of your investment. • Sales of a substantial number of shares of our Class A common stock by our existing stockholders in the public market could cause our stock price to fall. • Our inability to maintain effective disclosure controls and procedures could adversely affect our results of operations, liquidity and financial positions, as well as our stock price and investor confidence in us. 43 Table of Contents Risks Related to Our Financial Position and Need for Additional Capital We have incurred net losses since our inception and we anticipate that we will continue to incur losses for the foreseeable future, which could harm our future business prospects.
Our ability to increase sales of the PreTRM test and establish greater levels of adoption and reimbursement for the PreTRM test is uncertain for many reasons, including, among others: • we may be unable to demonstrate to clinics, clinicians, physicians, payers, and patients that the PreTRM test is superior to alternatives with respect to value, convenience, accuracy, scope of coverage, and other factors; • third-party payers may set the amounts of reimbursement at prices that reduce our profit margins or do not allow us to cover our expenses; • we may not be able to maintain and grow effective sales and marketing capabilities; • our sales and marketing efforts may fail to effectively reach customers or communicate the benefits of the PreTRM test; • superior alternatives to the PreTRM test may be developed and commercialized and we may not be able to compete against these alternatives; • we may face competitive pressures; • we may experience supply constraints, including due to the failure of our key suppliers to provide laboratory supplies, instruments, and reagents; • we may encounter difficulties with transportation logistics, regulations and quality associated with shipping blood specimens, including infrastructure conditions, transportation delays and temperature stress; • we may encounter laboratory process difficulties that impact the quality and timeliness of reporting of test results; • U.S. or foreign regulatory or legislative bodies may adopt new regulations or policies or take other actions that impose significant restrictions on, or other challenges to, our ability to sell or market our products; • news media organizations, medical societies, or industry groups may issue publications, guidance, or analyses that negatively impact patients’ and/or health care providers’ perception or utilization of the PreTRM test (or certain types of prenatal testing and related health care services, generally) and thereby negatively impact our ability to sell or market the PreTRM test; • we may be unable to compete successfully with respect to our current or future products or services, as a result of which we may not be able to increase or sustain our revenues or achieve profitability; and • we may not be able to protect our intellectual property position.
Our ability to increase sales of the PreTRM test and establish greater levels of adoption and reimbursement for the PreTRM test is uncertain for many reasons, including, among others: • we may be unable to demonstrate to clinics, clinicians, physicians, payers, and patients that the PreTRM test is superior to alternatives with respect to value, convenience, accuracy, scope of coverage, and other factors; • third-party payers may set the amounts of reimbursement at prices that reduce our profit margins or do not allow us to cover our expenses; • we may not be able to maintain and grow effective sales and marketing capabilities; • our sales and marketing efforts may fail to effectively reach customers or communicate the benefits of the PreTRM test; • superior alternatives to the PreTRM test may be developed and commercialized and we may not be able to compete against these alternatives; • we may face competitive pressures; • we may experience supply constraints, including due to the failure of our key suppliers to provide laboratory supplies, instruments, and reagents; • we may encounter difficulties with transportation logistics, regulations and quality associated with shipping blood specimens, including infrastructure conditions, transportation delays and temperature stress; • we may encounter laboratory process difficulties that impact the quality and timeliness of reporting of test results; • U.S. or foreign regulatory or legislative bodies may adopt new regulations or policies or take other actions that impose significant restrictions on, or other challenges to, our ability to sell or market our products and services; • news media organizations, medical societies, or industry groups may issue publications, guidance, or analyses that negatively impact patients’ and/or health care providers’ perception or utilization of the PreTRM test (or certain types of prenatal testing and related health care services, generally) and thereby negatively impact our ability to sell or market the PreTRM test; • we may be unable to compete successfully with respect to our current or future products or services, as a result of which we may not be able to increase or sustain our revenues or achieve profitability; and • we may not be able to protect our intellectual property position.
If we are unable to successfully develop new products, enhance the PreTRM test to meet customer requirements, compete with alternative products or otherwise gain and maintain market acceptance, our business, results of operations, and financial condition could be harmed. Competition in the life science industry, including companies engaged in molecular diagnostics and proteomics, is intense.
If we are unable to successfully develop new products or services, enhance the PreTRM test to meet customer requirements, compete with alternative products and services or otherwise gain and maintain market acceptance, our business, results of operations, and financial condition could be harmed. Competition in the life science industry, including companies engaged in molecular diagnostics and proteomics, is intense.
In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.
In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including fluctuations in interest rates or higher costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.
We have taken advantage of reduced reporting burdens in this report. In particular, we have not included all of the executive compensation information that would be required if we were not an EGC. We cannot predict whether investors will find our Class A common stock less attractive if we rely on certain or all of these exemptions.
We have taken advantage of reduced reporting burdens in this Annual Report. In particular, we have not included all of the executive compensation information that would be required if we were not an EGC. We cannot predict whether investors will find our Class A common stock less attractive if we rely on certain or all of these exemptions.
As part of this process, we may also be required to conduct additional clinical testing before applying for commercial marketing authorization. Clinical trials must be conducted in compliance with FDA regulations in order to support a marketing submission to the agency for a regulated product, or the FDA may take certain enforcement actions or reject the data.
As part of this process, we may be required to conduct additional clinical testing before applying for commercial marketing authorization. Clinical trials must be conducted in compliance with FDA regulations in order to support a marketing submission to the agency for a regulated product, or the FDA may take certain enforcement actions or reject the data.
We cannot assure that we will be successful in addressing each of these criteria or other criteria that might affect the market acceptance of any products we commercialize, particularly the PreTRM test. If we are unsuccessful in achieving and maintaining market acceptance of the PreTRM test, our business, financial condition, and results of operations would be adversely affected.
We cannot assure that we will be successful in addressing each of these criteria or other criteria that might affect the market acceptance of any products or services we commercialize, particularly the PreTRM test. If we are unsuccessful in achieving and maintaining market acceptance of the PreTRM test, our business, financial condition, and results of operations would be adversely affected.
Even if we are able to achieve broad scientific and market acceptance for the PreTRM test, our ability to grow our business will depend in large part on our ability both to enhance and improve the PreTRM test and to introduce compelling new products, including for major pregnancy related conditions beyond preterm birth.
Even if we are able to achieve broad scientific and market acceptance for the PreTRM test, our ability to grow our business will depend in large part on our ability both to enhance and improve the PreTRM test and to introduce compelling new products and services, including for major pregnancy related conditions beyond preterm birth.
In the ordinary course of our business, we collect and store sensitive data, including PHI (such as patient medical records, including test results), and personally identifiable information. We also store business and financial information, intellectual property, research and development information, trade secrets, and other proprietary and business critical information, including that of our customers, payers and collaboration partners.
In the ordinary course of our business, we collect and store sensitive data, including PHI (such as patient medical records, including test results), and other personally identifiable information. We also store business and financial information, intellectual property, research and development information, trade secrets, and other proprietary and business critical information, including that of our employees, customers, payers and collaboration partners.
Other factors in achieving commercial market acceptance include: • our ability to market and increase awareness of the capabilities of the PreTRM test; • the ability of the PreTRM test to demonstrate comparable performance in intended use applications broadly in the hands of customers; • our customers’ willingness to adopt new products and workflows; • the PreTRM test’s ease of use and whether it reliably provides advantages over other alternative technologies; • the rate of adoption of the PreTRM test by patients, physicians, payers and the medical community at large; • medical society guidelines supporting the use of the PreTRM test and clinical interventions based on it; • the prices we charge for the PreTRM test; • our ability to develop new products and solutions for customers; • whether competitors develop and commercialize products that perform similar functions as the PreTRM test; and • the impact of our investments in product innovation and commercial growth.
Other factors in achieving commercial market acceptance include: • our ability to market and increase awareness of the capabilities of the PreTRM test; • the ability of the PreTRM test to demonstrate comparable performance in intended use applications broadly in the hands of customers; • our customers’ willingness to adopt new products, services, and workflows; • the PreTRM test’s ease of use and whether it reliably provides advantages over other alternative technologies; • the rate of adoption of the PreTRM test by patients, physicians, payers and the medical community at large; • medical society guidelines supporting the use of the PreTRM test and clinical interventions based on it; • the prices we charge for the PreTRM test; • our ability to develop new products, services, and solutions for customers; • whether competitors develop and commercialize products that perform similar functions as the PreTRM test; and • the impact of our investments in product and service innovation and commercial growth.
Any failure or perceived failure by us or any third-party collaborators, service providers, contractors or consultants to comply with privacy, confidentiality, data security or similar obligations, or any data security incidents or other security breaches that result in the accidental, unlawful or unauthorized access to, use of, release of, or transfer of sensitive information, including personally identifiable information, or PHI, may result in negative publicity, harm to our reputation, governmental investigations, enforcement actions, regulatory fines, litigation or public statements against us, could cause third parties to lose trust in us or could result in claims by third parties, including class action lawsuits, any of which could have a material adverse effect on our reputation, business, financial condition or results of operations.
Any failure or perceived failure by us or any third-party collaborators, service providers, contractors or consultants to comply with privacy, confidentiality, cybersecurity or similar obligations, or any cybersecurity incidents or other security breaches that result in the accidental, unlawful, or unauthorized access to, use of, release of, or transfer of sensitive information, including personally identifiable information, or PHI, may result in negative publicity, harm to our reputation, governmental investigations, enforcement actions, regulatory fines, litigation or public statements against us, could cause third parties to lose trust in us or could result in claims by third parties, including class action lawsuits, any of which could have a material adverse effect on our reputation, business, financial condition or results of operations.
In the future, we expect to incur significant costs in connection with our operations, including, but not limited to, the development, marketing authorization, and commercialization of new tests, and other products. These development activities generally require a substantial investment before we can determine commercial viability.
In the future, we expect to incur significant costs in connection with our operations, including, but not limited to, the development, marketing authorization, and commercialization of new tests, new services, and other products. These development activities generally require a substantial investment before we can determine commercial viability.
Any new product or enhancement to the PreTRM test that we develop may not be introduced in a timely or cost-effective manner, may contain defects, errors or vulnerabilities or may not achieve the market acceptance necessary to generate significant revenue.
Any new product, new service, or enhancement to the PreTRM test that we develop may not be introduced in a timely or cost-effective manner, may contain defects, errors or vulnerabilities or may not achieve the market acceptance necessary to generate significant revenue.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this report, these factors include: • our ability to successfully execute under our commercial agreement with Elevance Health and obtain broader market adoption of our PreTRM test; • actual or anticipated variations in our and our competitors’ results of operations, as well as how those results compare to analyst and investor expectations; • our failure to successfully commercialize our product candidates; • announcements by us or our competitors of new products, significant acquisitions, other strategic transactions, including strategic and commercial partnerships and relationships, joint ventures, divestitures, collaborations or capital commitments; • changes in reimbursement practices by current or potential payers; • failure of analysts to initiate or maintain coverage of our Company, issuance of new securities analysts’ reports or changed recommendations for our Class A common stock; • forward-looking statements related to our financial guidance or projections, our failure to meet or exceed our financial guidance or projections or changes in our financial guidance or projections; • actual or anticipated changes in regulatory oversight of our products; • development of disputes concerning our intellectual property or other proprietary rights; • commencement of, or our involvement in, litigation; • announcement or expectation of additional debt or equity financing efforts; • any major change in our management; • our inability to establish collaborations, if needed; • additions or departures of key scientific or management personnel; • our ability to effectively manage our growth; • overall performance of the equity markets; • sales of our common stock by us, our directors and officers, or our other stockholders in the future; • trading volume of our Class A common stock; • changes in accounting practices; • ineffectiveness of our internal controls; • general political and economic conditions; and • other events or factors, many of which are beyond our control.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Annual Report, these factors include: • our ability to successfully execute under our commercial agreement with Elevance Health and obtain broader market adoption of our PreTRM test; • actual or anticipated variations in our and our competitors’ results of operations, as well as how those results compare to analyst and investor expectations; • our failure to successfully commercialize our product candidates; • announcements by us or our competitors of new products and services, significant acquisitions, other strategic transactions, including strategic and commercial partnerships and relationships, joint ventures, divestitures, collaborations or capital commitments; • changes in reimbursement practices by current or potential payers; • failure of analysts to initiate or maintain coverage of our Company, issuance of new securities analysts’ reports or changed recommendations for our Class A common stock; • forward-looking statements related to our financial guidance or projections, our failure to meet or exceed our financial guidance or projections or changes in our financial guidance or projections; • actual or anticipated changes in regulatory oversight of our products and services; • development of disputes concerning our intellectual property or other proprietary rights; • commencement of, or our involvement in, litigation; • announcement or expectation of additional debt or equity financing efforts; • any major change in our management; • our inability to establish collaborations, if needed; • additions or departures of key scientific or management personnel; • our ability to effectively manage our growth; • overall performance of the equity markets; • sales of our common stock by us, our directors and officers, or our other stockholders in the future; • trading volume of our Class A common stock; • changes in accounting practices; 79 Table of Contents • ineffectiveness of our internal controls; • general political and economic conditions; and • other events or factors, many of which are beyond our control.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any state law claims for (i) any derivative action or proceeding brought on our behalf, (ii) any action or proceeding asserting a claim of breach of fiduciary duty owed by any of our current or former directors, officers and employees, to us or our stockholders, (iii) any action or proceeding asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, our amended and restated certificate of incorporation or our bylaws (in each case, as they may be amended from time to time), (iv) any action or proceeding to interpret, apply, enforce or determine the validity of our amended and 77 Table of Contents restated certificate of incorporation or bylaws, (v) any action or proceeding as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware, or (vi) any action asserting a claim against us or any of our directors, officers or employees that is governed by the internal affairs doctrine; provided, however, that this exclusive forum provision will not apply to any causes of action arising under the Exchange Act.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any state law claims for (i) any derivative action or proceeding brought on our behalf, (ii) any action or proceeding asserting a claim of breach of fiduciary duty owed by any of our current or former directors, officers and employees, to us or our stockholders, (iii) any action or proceeding asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, our amended and restated certificate of incorporation or our bylaws (in each case, as they may be amended from time to time), (iv) any action or proceeding to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or bylaws, (v) any action or proceeding as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware, or (vi) any action asserting a claim against us or any of our directors, officers or employees that is governed by the internal affairs doctrine; provided, however, that this exclusive forum provision will not apply to any causes of action arising under the Exchange Act.
The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state and federal laws, requirements, and regulations governing the collection, use, disclosure, retention, and security of personal information.
The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state, federal, and international laws, requirements, and regulations governing the collection, use, disclosure, retention, and security of personal information.
Even if the PreTRM test achieves broad scientific and market acceptance, if we fail to improve it or introduce compelling new products, our future revenues and prospects could be harmed.
Even if the PreTRM test achieves broad scientific and market acceptance, if we fail to improve it or introduce compelling new products and services, our future revenues and prospects could be harmed.
If our operations are found to be in violation of any of these (or other) laws and regulations, we may be subject to administrative, civil and/or criminal penalties, damages, fines, individual imprisonment, refunding of payments received by us, exclusion 51 Table of Contents from government health care programs, and/or curtailment or cessation of our operations, among other potential penalties, any of which could harm our reputation and adversely affect our business, operating results, and financial condition.
If our operations are found to be in violation of any of these (or other) laws and regulations, we may be subject to administrative, civil and/or 53 Table of Contents criminal penalties, damages, fines, individual imprisonment, refunding of payments received by us, exclusion from government health care programs, and/or curtailment or cessation of our operations, among other potential penalties, any of which could harm our reputation and adversely affect our business, operating results, and financial condition.
The typical development cycle of new life sciences products can be lengthy and complicated and may require new scientific discoveries or advancements, considerable resources, and complex technology and engineering.
The typical development cycle of new life sciences products or services can be lengthy and complicated and may require new scientific discoveries or advancements, considerable resources, and complex technology and engineering.
For as long as we continue to be an EGC, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not EGCs, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in this report and our periodic reports and proxy statements and exemptions from the requirements of holding nonbinding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
For as long as we continue to be an EGC, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not EGCs, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, or SOX, reduced disclosure obligations regarding executive compensation in this Annual Report and our periodic reports and proxy statements and exemptions from the requirements of holding nonbinding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
The success of any enhancement to the PreTRM test or introduction of new products depends on several factors, including completion of certain clinical development requirements, timely completion and delivery of the product, competitive pricing, adequate quality testing, integration with existing technologies, appropriately timed and staged product introductions, and overall market acceptance.
The success of any enhancement to the PreTRM test or introduction of new products or services depends on several factors, including completion of certain clinical development requirements, timely completion and delivery of the product or service, competitive pricing, adequate quality testing, integration with existing technologies, appropriately timed and staged product or service introductions, and overall market acceptance.
In the United States, HIPAA requires organizations like ours to develop and implement policies and procedures with respect to information that is protected under HIPAA, called protected health information, or PHI, that is used or disclosed in connection with our testing services, including the adoption of administrative, physical, and technical safeguards to protect such information.
In the United States, HIPAA requires organizations like ours to develop and implement policies and procedures with respect to information that is protected under HIPAA, called protected health information, or PHI, that is created, used or disclosed in connection with our services, including the adoption of administrative, physical, and technical safeguards to protect such information.
Accordingly, our business and financial results in the future could be adversely affected due to a variety of factors, including: • multiple, conflicting and changing laws and regulations such as data privacy, information security, and data use regulations, tax laws, export and import restrictions, economic sanctions and embargoes, employment laws, anti-corruption laws, regulatory requirements, reimbursement or payer regimes and other governmental approvals, permits, and licenses; • failure by us or our distributors to obtain any necessary regulatory clearance, authorization or approval for the use of our products and services in various countries; • additional potentially relevant third-party patent rights; • complexities and difficulties in obtaining intellectual property protection and maintaining, defending, and enforcing our intellectual property outside the United States; • difficulties in staffing and managing foreign operations; • employment risks related to hiring employees outside the United States; • complexities associated with managing multiple payer reimbursement regimes, government payers or patient self-pay systems; • difficulties in negotiating favorable reimbursement negotiations with governmental authorities; 50 Table of Contents • logistics and regulations associated with shipping specimens, including infrastructure conditions and transportation delays; • limits in our ability to penetrate international markets if we are not able to sell our products or conduct services locally; • financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and services and exposure to foreign currency exchange rate fluctuations; • natural disasters, political and economic instability, including wars, terrorism, and political unrest, outbreak of disease, boycotts, curtailment of trade, and other business restrictions; • regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ activities that may fall within the purview of the U.S.
Accordingly, our business and financial results in the future could be adversely affected due to a variety of factors, including: • multiple, conflicting and changing laws and regulations such as data privacy, information security, and data use regulations, tax laws, export and import restrictions, economic sanctions and embargoes, employment laws, anti-corruption laws, regulatory requirements applicable to clinical laboratories and to IVD products, reimbursement or payer regimes and other governmental approvals, permits and licenses; • failure by us or our distributors to obtain any necessary regulatory clearance, authorization or approval for the use of our products and services in various countries; • additional potentially relevant third-party patent rights; • complexities and difficulties in obtaining intellectual property protection and maintaining, defending, and enforcing our intellectual property outside the United States; • difficulties in staffing and managing foreign operations; • employment risks related to hiring employees outside the United States; • complexities associated with managing multiple payer reimbursement regimes, government payers or patient self-pay systems; 52 Table of Contents • difficulties in negotiating favorable reimbursement negotiations with governmental authorities; • logistics and regulations associated with the international shipment of patient specimens, including infrastructure conditions, licensure requirements and transportation delays; • limits in our ability to penetrate international markets if we are not able to sell our products or conduct services locally; • financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and services and exposure to foreign currency exchange rate fluctuations; • natural disasters, political and economic instability, including wars, terrorism, and political unrest, outbreak of disease, boycotts, curtailment of trade, and other business restrictions; • regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ activities that may fall within the purview of the U.S.
Unauthorized access, loss, or dissemination of information could disrupt our operations, including our ability to perform tests, provide test results, bill payers or patients, process claims and appeals, provide customer assistance services, conduct research and development activities, develop and commercialize tests, collect, process and prepare company financial information, provide information about our tests, educate patients and health care providers about our service, and manage the administrative aspects of our business, any of which could damage our reputation and adversely affect our business.
Unauthorized access, loss, or dissemination of information could disrupt our operations, including our ability to perform tests, provide test results, bill payers or patients, process claims and appeals, provide customer assistance services, conduct 69 Table of Contents research and development activities, develop and commercialize tests, collect, process and prepare company financial information, provide information about our tests, educate patients and health care providers about our service, and manage the administrative aspects of our business, any of which could damage our reputation and adversely affect our business.
Our laboratory is also accredited by the College of American Pathologists, or CAP. CMS has deemed CAP standards to be equally or more stringent than CLIA regulations and has approved CAP as a recognized accrediting organization. Inspection by CAP is performed in lieu of inspection by CMS for CAP-accredited laboratories.
Our laboratory is also accredited by the College of American Pathologists, or CAP. CMS has deemed CAP standards to be equal to or more stringent than CLIA regulations and has approved CAP as a recognized accrediting organization. Inspection by CAP is performed in lieu of inspection by CMS for CAP-accredited laboratories.
Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, global conflicts, and steps taken by governments and central banks, particularly in response to public health threats as well as other stimulus and spending programs, have led to higher inflation, which is likely, in turn, to lead to an increase in costs and may cause changes in fiscal and monetary policy, including increased interest rates.
Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, global conflicts, and steps taken by governments and central banks, particularly in response to public health threats as well as other stimulus and spending programs, could lead to higher inflation, which is likely, in turn, to lead to an increase in costs and may cause changes in fiscal and monetary policy, including increased interest rates.
Many of the sequencing instruments, reagents, kits, and other consumable products used to perform our testing, as well as the instruments and other capital equipment that enable the testing, are offered for sale as analyte specific reagents, or ASRs, or for research use only, or RUO.
Many of the sequencing instruments, reagents, kits, and other consumable products used to collect samples or perform our testing, as well as the instruments and other capital equipment that enable the testing, are offered for sale as analyte specific reagents, or ASRs, or for research use only, or RUO.
See related risks described above at “ The results of our clinical trials and studies may not support the use of our tests and other product candidates, or may not be replicated in later studies. ” The Federal Trade Commission and/or state enforcement or regulatory agencies may object to the methods and materials we use to promote our tests and initiate enforcement against us, which could adversely affect our business and financial condition.
See related risks described above at “ The results of our clinical trials and studies may not support the use of our tests and other product candidates, or may not be replicated in later studies. ” The Federal Trade Commission and/or state enforcement or regulatory agencies may object to the methods and materials we use to promote our tests, our services and our nonmedical products and initiate enforcement against us, which could adversely affect our business and financial condition.
Violations of this statute are punishable by imprisonment, fines, or both. • The federal statute prohibiting false statements relating to health care matters, which criminalizes knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially 67 Table of Contents false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, health care benefits, items or services relating to health care matters.
Violations of this statute are punishable by imprisonment, fines, or both. • The federal statute prohibiting false statements relating to health care matters, which criminalizes knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, health care benefits, items or services relating to health care matters.
If too few researchers describe the use of our products, too many researchers shift to a competing product and publish research outlining their use of that product, or too many researchers negatively describe the use of our products in publications, it may drive customers away from our products.
If too few researchers describe the use of our products or services, too many researchers shift to a competing product or service and publish research outlining their use of that product or service, or too many researchers negatively describe the use of our products or services in publications, it may drive customers away from our products or services.
Violations of the CMP Law may result in the imposition of civil monetary penalties, as well as damages and possible exclusion from participation in state and federal health care programs. • The federal health care fraud statute, which imposes criminal liability for knowingly and willfully executing or attempting to execute a scheme to defraud any health care benefit program (which includes commercial insurers).
Violations of the CMP Law may result in the imposition of civil 72 Table of Contents monetary penalties, as well as damages and possible exclusion from participation in state and federal health care programs. • The federal health care fraud statute, which imposes criminal liability for knowingly and willfully executing or attempting to execute a scheme to defraud any health care benefit program (which includes commercial insurers).
In addition, in a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly and/or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question, 71 Table of Contents any of which may adversely affect our business.
In addition, in a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly and/or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question, any of which may adversely affect our business.
To perform sales, marketing, distribution, and customer service and support successfully, we will face a number of risks, including: • our ability to attract, retain, and manage the sales, marketing, and customer service and operations workforce necessary to commercialize and gain market acceptance for our technology; • the time and cost of establishing a specialized sales, marketing, and customer service and operations workforce; and • our sales, marketing, and customer service and support team may be unable to initiate and execute successful commercialization activities.
To perform sales, marketing, distribution, and customer service and support successfully, we will face a number of risks, including: • our ability to attract, retain, and manage the sales, marketing, and customer service and operations workforce necessary to commercialize and gain market acceptance for our technology; • the time and cost of establishing a specialized sales, marketing, and customer service and operations workforce; and 48 Table of Contents • our sales, marketing, and customer service and support team may be unable to initiate and execute successful commercialization activities.
We have limited experience as a company in sales and marketing and our ability to achieve profitability depends on our being able to attract customers for the PreTRM test and our future products, once approved.
We have limited experience as a company in sales and marketing and our ability to achieve profitability depends on our being able to attract customers for the PreTRM test and our future products or services, once approved.
In the years following the initial outbreak, numerous state 53 Table of Contents and local jurisdictions, including the jurisdictions where our headquarters and laboratory are located, imposed quarantines, shelter-in-place orders, executive orders, and similar government orders for their residents to control the spread of COVID-19. A new serious public health threat could result in similar restrictions being imposed.
In the years following the initial outbreak, numerous state and local jurisdictions, including the jurisdictions where our headquarters and laboratory are located, imposed quarantines, shelter-in-place orders, executive orders, and similar government orders for their residents to control the spread of COVID-19. A new serious public health threat could result in similar restrictions being imposed.
If any of our partners, suppliers, or other parties with whom we conduct business are unable to access funds pursuant to such instruments or lending arrangements with such a financial institution, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.
If any of our partners, suppliers, or other parties with whom we conduct business are unable to access funds pursuant to such instruments or lending 45 Table of Contents arrangements with such a financial institution, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.
There also may be prior art of which we are aware, but which we do not believe affects the validity or enforceability of a claim, which may, nonetheless, ultimately be found to do so; • third parties may develop tests or technology that have the same or similar effect as our tests and technology without infringing our patents.
There also may be prior art of which we are aware, but which we do not believe affects the validity or enforceability of a claim, which may, nonetheless, ultimately be found to do so; 75 Table of Contents • third parties may develop tests or technology that have the same or similar effect as our tests and technology without infringing our patents.
In addition, any manufacturing or design 48 Table of Contents defects in our products could lead to product recalls, either voluntary or as required by government authorities, which could result in the removal of a product from the market. A product liability or professional liability claim could result in substantial damages and be costly and time-consuming for us to defend.
In addition, any manufacturing or design defects in our products could lead to product recalls, either voluntary or as required by government authorities, which could result in the removal of a product from the market. A product liability or professional liability claim could result in substantial damages and be costly and time-consuming for us to defend.
Our ability to use these carryforwards could be limited if we experience an “ownership change.” Our estimates of total addressable market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at a similar rate.
Our ability to use these carryforwards could be limited if we experience an “ownership change.” 56 Table of Contents Our estimates of total addressable market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at a similar rate.
Any adverse outcome in one or more of these investigations could include the commencement of civil and/or criminal proceedings, substantial fines, penalties, administrative remedies and/or entry into corporate integrity agreements with governmental agencies, among other penalties. In addition, resolution of any of these matters could involve the imposition of additional costly compliance obligations.
Any adverse outcome in one or more of these investigations could include the commencement of civil and/or criminal proceedings, substantial fines, penalties, administrative remedies and/or entry into corporate integrity agreements 74 Table of Contents with governmental agencies, among other penalties. In addition, resolution of any of these matters could involve the imposition of additional costly compliance obligations.
To determine the priority of these inventions, we may have to participate in interference proceedings, derivation proceedings or other post-grant proceedings declared by the USPTO, or other similar proceedings in non-U.S. jurisdictions, that could result in substantial cost to us and the loss of valuable patent protection. The outcome of such proceedings is uncertain.
To determine the priority of these inventions, we may have to participate in interference proceedings, derivation proceedings or other post-grant proceedings declared by the USPTO, or other similar proceedings in non-U.S. jurisdictions, that could result 76 Table of Contents in substantial cost to us and the loss of valuable patent protection. The outcome of such proceedings is uncertain.
In addition, the terms of any such agreement may require a physician or qualified practitioner’s signature on test requisitions or require other controls and procedures prior to conducting a test. In particular, third-party payers have been increasingly requiring prior authorization to be obtained prior to conducting a test as a condition to reimbursing for the test.
In addition, the terms of any such agreement may require a physician or qualified practitioner’s signature on test requisitions or require other controls and procedures prior to conducting a test. In particular, third-party payers have been 60 Table of Contents increasingly requiring prior authorization to be obtained prior to conducting a test as a condition to reimbursing for the test.
If we are required to conduct clinical trials to support a premarket submission to the FDA, whether using prospectively acquired samples or archival samples, delays in the commencement or completion of clinical testing could significantly increase the development costs for the PreTRM test or any future tests and delay commercialization.
If we are 66 Table of Contents required to conduct clinical trials to support a premarket submission to the FDA, whether using prospectively acquired samples or archival samples, delays in the commencement or completion of clinical testing could significantly increase the development costs for the PreTRM test or any future tests and delay commercialization.
We cannot predict the number, timing or size of future strategic transactions or the effect that any such transactions might have on our operating results. We may need to raise additional funds through equity or debt financings, corporate collaborations or licensing arrangements to continue to fund or expand our operations.
We cannot predict the number, timing or size of future strategic transactions or the effect that any such transactions might have on our operating results. 55 Table of Contents We may need to raise additional funds through equity or debt financings, corporate collaborations or licensing arrangements to continue to fund or expand our operations.
These types of decisions could reduce our revenue and harm our financial condition. 58 Table of Contents Changes in government health care policy could increase our costs and negatively impact coverage and reimbursement for our tests by governmental and other third-party payers. The U.S. government is pursuing health care reform and aiming to reduce health care costs.
These types of decisions could reduce our revenue and harm our financial condition. Changes in government health care policy could increase our costs and negatively impact coverage and reimbursement for our tests by governmental and other third-party payers. The U.S. government is pursuing health care reform and aiming to reduce health care costs.
A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion 59 Table of Contents for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several state and federal health care programs.
A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several state and federal health care programs.
If a breach affects 500 individuals or more in a particular state or jurisdiction, covered entities must report it to the HHS and local media contemporaneously with notice to affected individuals, and HHS will post information regarding the breach, including the name of the entity reporting the breach, on its public website.
If a breach affects 500 individuals or more in a particular state or jurisdiction, covered entities must report 67 Table of Contents it to the HHS and local media contemporaneously with notice to affected individuals, and HHS will post information regarding the breach, including the name of the entity reporting the breach, on its public website.
We cannot predict what 69 Table of Contents impact these decisions may have on our ability to obtain or enforce patents relating to diagnostic methods in the future. We believe that no consistent policy regarding the scope of valid patent claims in these fields has emerged to date in the United States.
We cannot predict what impact these decisions may have on our ability to obtain or enforce patents relating to diagnostic methods in the future. We believe that no consistent policy regarding the scope of valid patent claims in these fields has emerged to date in the United States.
Furthermore, the number of shares of our Class A common stock reserved for issuance under our 2021 ESPP automatically increases on January 1 of each year, beginning on January 1, 2022, by 1% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors or compensation committee.
Furthermore, the number of shares of our Class A common stock reserved for issuance under our 2021 ESPP automatically increases on January 1 of each year, beginning on January 1, 2022, by 1% of the total number of 81 Table of Contents shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors or compensation committee.
Many of the companies against which we are competing or may compete against in the future have significantly greater financial resources and expertise in research and 47 Table of Contents development, manufacturing, and commercialization. Mergers and acquisitions in our industry may result in even more resources being concentrated among a smaller number of our competitors.
Many of the companies against which we are competing or may compete against in the future have significantly greater financial resources and expertise in research and development, manufacturing, and commercialization. Mergers and acquisitions in our industry may result in even more resources being concentrated among a smaller number of our competitors.
A security breach or privacy violation that leads to unauthorized access, disclosure or modification of, or prevents access to, patient information, including PHI, could implicate state and federal breach notification laws, subject us to fines and mandatory corrective action and require us to verify the correctness of, or to reconstruct, database contents.
A security breach or privacy violation that leads to unauthorized access, disclosure or modification of, or prevents access to, patient information, including PHI, or other personally identifiable information, could implicate state and federal breach notification laws, subject us to fines and mandatory corrective action and require us to verify the correctness of, or to reconstruct, database contents.
What constitutes a “sufficient” additional feature is uncertain. Furthermore, in view of these decisions, since December 2014, the USPTO has published and continues to publish revised guidelines for patent examiners to apply when examining process claims for patent eligibility. In addition, U.S.
What constitutes a “sufficient” additional feature is uncertain. Furthermore, in view of these decisions, since December 2014, the USPTO has published and continues to publish revised guidelines for patent examiners to apply when examining process claims for patent eligibility. 77 Table of Contents In addition, U.S.
If we do not achieve the required technical specifications or successfully manage new product development processes, or if development work is not performed according to schedule, then such new technologies or products may be adversely impacted. To date, we have only completed the development process for one product.
If we do not achieve the required technical specifications or successfully manage development processes of the new product or service, or if development work is not performed according to schedule, then such new technologies, products, or services may be adversely impacted. To date, we have only completed the development process for one product.
This type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources. 74 Table of Contents We do not intend to pay dividends on our Class A common stock, so any returns will be limited to the value of our Class A common stock.
This type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources. We do not intend to pay dividends on our Class A common stock, so any returns will be limited to the value of our Class A common stock.
In addition, any such action, particularly to the extent we were found to be 65 Table of Contents guilty of violations or otherwise liable for damages, would damage our reputation and adversely affect our business, financial condition, and results of operations.
In addition, any such action, particularly to the extent we were found to be guilty of violations or otherwise liable for damages, would damage our reputation and adversely affect our business, financial condition, and results of operations.
Substantially all of our shares of Class A common stock and Class B common stock are eligible for public sale, if they are registered under the Securities Act of 1933, as amended, or the Securities Act, or if they qualify for an exemption from registration under the Securities Act, including under Rules 144 or 701.
Substantially all of our shares of Class A common stock and Class B common stock are eligible for public sale, if they are registered under the Securities Act or if they qualify for an exemption from registration under the Securities Act, including under Rules 144 or 701.
We have a significant amount of net operating loss, or NOL, carryforwards that can be used to offset potential future taxable income and related income taxes. As of December 31, 2023, we had federal NOL carryforwards of approximately $211.6 million, of which, $70.3 million, if not utilized, begin to expire in 2028.
We have a significant amount of net operating loss, or NOL, carryforwards that can be used to offset potential future taxable income and related income taxes. As of December 31, 2024, we had federal NOL carryforwards of approximately $239.6 million, of which, $70.3 million, if not utilized, begin to expire in 2028.
Although members of our management team have considerable industry experience, successfully commercializing the PreTRM test will require adapting our sales, marketing, distribution, and customer service and support capabilities to current and ever-changing 46 Table of Contents market conditions.
Although members of our management team have considerable industry experience, successfully commercializing the PreTRM test will require adapting our sales, marketing, distribution, and customer service and support capabilities to current and ever-changing market conditions.
A number of states also have laws similar to the Sunshine Act. 68 Table of Contents While we believe that the Sunshine Act does not apply to our business, we cannot guarantee that the federal government or other regulators will agree with our determination.
A number of states also have laws similar to the Sunshine Act. While we believe that the Sunshine Act does not apply to our business, we cannot guarantee that the federal government or other regulators will agree with our determination.
There is also no assurance that such agreements will provide for a meaningful protection of our trade secrets, know-how or other proprietary information in the event of any unauthorized use or disclosure of information.
There is also no assurance that 78 Table of Contents such agreements will provide for a meaningful protection of our trade secrets, know-how or other proprietary information in the event of any unauthorized use or disclosure of information.
If we encounter such difficulties or we are otherwise precluded from effectively protecting our intellectual property rights in foreign jurisdictions, our business prospects could be substantially harmed, and we may not pursue or obtain patent protection in all major markets; and 70 Table of Contents • we may not develop additional tests or technology that are patentable.
If we encounter such difficulties or we are otherwise precluded from effectively protecting our intellectual property rights in foreign jurisdictions, our business prospects could be substantially harmed, and we may not pursue or obtain patent protection in all major markets; and • we may not develop additional tests or technology that are patentable.
You should carefully consider the risks and uncertainties described below, the section of this Annual Report on Form 10-K entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes, before investing in our Class A common stock. The risks and uncertainties described below are not the only ones we face.
You should carefully consider the risks and uncertainties described below, the section of this Annual Report entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes, before investing in our Class A common stock. The risks and uncertainties described below are not the only ones we face.
As a recent example, in March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic, and the U.S. government imposed restrictions on travel between the United States, Europe, and certain other countries.
For example, in March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic, and the U.S. government imposed restrictions on travel between the United States, Europe, and certain other countries.
Failure to maintain CAP accreditation could likewise have a material adverse effect on the sales of our tests and the results of our operations. 61 Table of Contents Our laboratory is located in Salt Lake City, Utah.
Failure to maintain CAP accreditation could likewise have a material adverse effect on the sales of our tests and the results of our operations. Our laboratory is located in Salt Lake City, Utah.
Our business activities are, or may in the future be, subject to comprehensive compliance obligations under state and federal laws and regulations, including: • Federal and state laws governing laboratory testing, including but not limited to the Clinical Laboratory Improvement Amendments of 1988 and state laboratory licensure and related laws. • FDA laws and regulations, including but not limited to requirements for offering LDTs. • The federal Anti-Kickback Statute, or AKS, which generally prohibits, among other things knowingly and willfully offering, paying, soliciting, or receiving any remuneration, directly or indirectly, covertly or overtly, in cash or in kind in return for (i) referring an individual to a person for the furnishing or arranging of any item or service, or (ii) purchasing, leasing, ordering, or arranging for or recommending the purchasing, leasing, or ordering of any good, facility, service, or item, for which payment may be made by federal health care programs.
Our business activities are, or may in the future be, subject to comprehensive compliance obligations under state and federal laws and regulations, including: • Federal and state laws governing laboratory testing, including but not limited to the Clinical Laboratory Improvement Amendments of 1988 and state laboratory licensure and related laws. • FDA laws and regulations, including but not limited to requirements for offering LDTs following the July 2024 effective date of the agency's LDT final rule. • The federal Anti-Kickback Statute, or AKS, which generally prohibits, among other things knowingly and willfully offering, paying, soliciting, or receiving any remuneration, directly or indirectly, covertly or overtly, in cash or in kind in return for (i) referring an individual to a person for the furnishing or arranging of any item or service, or (ii) purchasing, leasing, ordering, or arranging for or recommending the purchasing, leasing, or ordering of any good, facility, service, or item, for which payment may be made by federal health care programs.
Suppliers of ASRs and RUO products that we employ in our tests may cease selling their respective products, and we may be unable to obtain an acceptable substitute on commercially reasonable terms or at all, which could significantly and adversely affect our ability to provide timely testing results to our customers or could significantly increase our costs of conducting business.
Suppliers of ASRs and RUO products that we employ in our tests may cease selling their respective products, or we may need to cease distributing them for use in our testing, and we may be unable to obtain an acceptable substitute on commercially reasonable terms or at all, which could significantly and adversely affect our ability to provide timely testing results to our customers or could significantly increase our costs of conducting business.
We also make assumptions, estimations, 49 Table of Contents calculations, and conclusions as part of our analyses of data, and we may not have received or have had the opportunity to fully and carefully evaluate all data.
We also make assumptions, estimations, calculations, and conclusions as part of our analyses of data, and we may not have received or have had the opportunity to fully and carefully evaluate all data.
Public health threats, such as COVID-19, could materially affect our operations, as well as the business or operations of third parties with whom we conduct business. Our business could be adversely affected by the effects of other future public health threats in regions where we, or third parties on which we rely, have significant business operations.
Public health threats, such as pandemics or epidemics, could materially affect our operations, as well as the business or operations of third parties with whom we conduct business. Our business could be adversely affected by the effects of other future public health threats in regions where we, or third parties on which we rely, have significant business operations.
Among other things, in our consent forms, we seek to ensure that the subjects from whom the data and specimens are collected do not retain or have conferred on them any proprietary or commercial rights to the data or any discoveries derived from them.
Among other things, in our consent forms, we seek to ensure that the subjects from whom the data and specimens are 62 Table of Contents collected do not retain or have conferred on them any proprietary or commercial rights to the data or any discoveries derived from them.
If the FDA decides to require that we obtain any form or type of premarket authorization in order for us to commercialize our current PreTRM test or any future tests developed as LDTs, whether as a result of new legislative authority or following finalization and implementation of the October 2023 proposed rule or based on its determination that 63 Table of Contents the PreTRM test does not meet the definition of an LDT, we may be required to conduct additional clinical testing before submitting a regulatory submission for commercial marketing authorization.
If the FDA decides to require that we obtain any form or type of premarket authorization in order for us to commercialize our current PreTRM test or any future tests developed as LDTs, whether as a result of new legislative authority or following finalization and implementation of the May 2024 final rule or based on its determination that the PreTRM test does not meet the definition of an LDT, we may be required to conduct additional clinical testing before submitting a regulatory submission for commercial marketing authorization.
Any breach could also result in the compromise of our trade secrets and other proprietary information, which could adversely affect our competitive position.
Any cybersecurity incident could also result in the compromise of our trade secrets and other proprietary information, which could adversely affect our competitive position.
As we attempt to bring new products to market, we may need to increase our product liability coverage, which would be a significant additional expense that we may not be able to afford.
As we attempt to 50 Table of Contents bring new products to market, we may need to increase our product liability coverage, which would be a significant additional expense that we may not be able to afford.
It creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal data. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches.
It creates individual privacy rights for California consumers (as that term is broadly defined) and increases the privacy and security obligations of entities handling certain personal data. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches.
Approximately $141.3 million of these federal NOLs can be carried forward indefinitely.
Approximately $169.3 million of these federal NOLs can be carried forward indefinitely.
The FDA could disagree with a supplier’s assessment that the supplier’s products are RUOs, or could conclude that products labeled as RUO are actually intended for clinical diagnostic use, and could take enforcement action against the supplier, including requiring the supplier to cease offering the product while it seeks appropriate marketing authorization from FDA.
The FDA could disagree with a supplier’s or lab's assessment that the supplier’s products are RUOs, or could conclude that products labeled as RUO are actually intended for clinical diagnostic use, and could take enforcement action against the supplier or the lab, including requiring the supplier to cease offering the product to the lab, or requiring the lab to cease distributing the supplier's product, while it seeks appropriate marketing 63 Table of Contents authorization from FDA.
To the extent that we decide to market our products and services outside the United States, our business will be subject to the risks associated with doing business outside the United States, including an increase in our expenses and diversion of our management’s attention from the development of future products and services.
To the extent that we decide to market our products and services outside the United States, including but not limited to jurisdictions in the European Union, our business will be subject to the risks associated with doing business outside the United States, including an increase in our expenses and diversion of our management’s attention from the development of future products and services.
If widespread adoption of the PreTRM test or any other products that we commercialize in the future takes longer than anticipated, we will continue to experience operating losses.
If widespread adoption of the PreTRM test or any other products and services that we commercialize in the 47 Table of Contents future takes longer than anticipated, we will continue to experience operating losses.
Even if the market in which we compete meets our size estimates and forecasted growth, our business could fail to grow at similar rates. The inflationary environment could materially adversely impact our business and results of operations.
Even if the market in which we compete meets our size estimates and forecasted growth, our business could fail to grow at similar rates. An inflationary environment and unstable global economic and geopolitical conditions could materially adversely impact our business and results of operations.
Moreover, we could become subject to Sunshine Act reporting requirements if the FDA requires us to obtain premarket authorization for our tests as medical devices (whether because the agency determines that the PreTRM test does not fall within the scope of the agency’s existing LDT definition or because it finalizes the ongoing notice-and-comment rulemaking to exercise authority over LDTs as medical devices) or Congress enacts legislative reforms to the federal oversight of LDTs to subject them to FDA regulation and/or the reporting requirements of the Sunshine Act.
Moreover, we could become subject to Sunshine Act reporting requirements if the FDA requires us to obtain premarket authorization for our tests as medical devices (whether because the agency determines that the PreTRM test does not fall within the scope of the agency’s existing LDT definition or because of its recently issued final rule to exercise authority over LDTs as medical devices) or Congress enacts legislative reforms to the federal oversight of LDTs to subject them to FDA regulation and/or the reporting requirements of the Sunshine Act.
We may remain an EGC until the earliest to occur of: (1) the last day of the fiscal year in which we have at least $1.235 billion in annual revenue; (2) the last day of the fiscal year in which we are deemed to be a “large accelerated filer,” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year; (3) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period; and (4) December 31, 2026. 75 Table of Contents We are also a smaller reporting company, meaning that the market value of our Class A common stock held by non-affiliates is less than $700.0 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year.
We may remain an EGC until the earliest to occur of: (1) the last day of the fiscal year in which we have at least $1.235 billion in annual revenue; (2) the last day of the fiscal year in which we are deemed to be a “large accelerated filer,” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year; (3) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period; and (4) December 31, 2026.

… 206 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed0 unchanged
Biggest changeItem 2. Properties Our corporate headquarters and facilities are located in Salt Lake City, Utah. We currently lease a total of approximately 24,300 square feet of building space in Salt Lake City dedicated to research and development, administration and our CLIA-certified laboratory.
Biggest changeItem 2. Prop erties Our corporate headquarters and facilities are located in Salt Lake City, Utah. We currently lease a total of approximately 24,300 square feet of building space in Salt Lake City dedicated to research and development, administration and our CLIA-certified laboratory.
The lease on our existing Salt Lake City facility expires on December 31, 2025 and we have an option to terminate the lease under certain circumstances after July 1, 2024.
The lease on our existing Salt Lake City facility expires on December 31, 2025 and we have had an option to terminate the lease under certain circumstances after July 1, 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−0 removed0 unchanged
Biggest changeWe may, from time to time, be involved in various legal proceedings arising from the normal course of business activities, and an unfavorable resolution of any of these matters could materially affect our future results of operations, cash flows, or financial position. Item 4. Mine Safety Disclosures None. 81 Table of Contents PART II
Biggest changeWe may, from time to time, be involved in various legal proceedings arising from the normal course of business activities, and an unfavorable resolution of any of these matters could materially affect our future results of operations, cash flows, or financial position. Item 4. Mine Safety D isclosures None. 86 Table of Contents PA RT II
Item 3. Legal Proceedings We are not currently a party to any material litigation or other material legal proceedings.
Item 3. Legal Pr oceedings We are not currently a party to any material litigation or other material legal proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+4 added−1 removed0 unchanged
Biggest changeDividend Policy We have never declared or paid any cash dividend on our common stock. We intend to retain any future earnings to finance the operation and growth of our business, and we do not anticipate declaring or paying any cash dividends in the foreseeable future. Unregistered Sales of Securities and Use of Proceeds None.
Biggest changeDividend Policy We have never declared or paid any cash dividend on our common stock. We intend to retain any future earnings to finance the operation and growth of our business, and we do not anticipate declaring or paying any cash dividends in the foreseeable future.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A common stock began trading on the Nasdaq Global Market under the symbol “SERA” on July 15, 2021. Prior to that time, there was no public market for our stock.
Item 5. Market for Regis trant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A common stock began trading on the Nasdaq Global Market under the symbol “SERA” on July 15, 2021. Prior to that time, there was no public market for our stock.
Stockholders of record are defined as those stockholders whose shares are registered in their names in our stock records and do not include beneficial owners of common stock whose shares are held in the names of brokers, dealers or clearing agencies. As of March 15, 2024, we had two stockholders of record of our Class B common stock.
Stockholders of record are defined as those stockholders whose shares are registered in their names in our stock records and do not include beneficial owners of common stock whose shares are held in the names of brokers, dealers or clearing agencies. As of March 14, 2025, we had two stockholders of record of our Class B common stock.
Our Class B common stock is not listed on any stock exchange nor traded on any public market. Holders of Record As of March 15, 2024, we had 120 stockholders of record of our Class A common stock.
Our Class B common stock is not listed on any stock exchange nor traded on any public market. Holders of Record As of March 14, 2025, we had 90 stockholders of record of our Class A common stock.
Removed
Issuer Purchases of Equity Securities None. Item 6. [ Reserved ]
Added
Unregistered Sales of Securities and Use of Proceeds On September 10 2024, we issued 53,827 shares of our Class A common stock to Blue Ox Healthcare Partners, LLC to fulfill our contractual obligations related to the development of strategies for insurance coverage of the PreTRM test. The shares were valued at $7.55 per share.
Added
All shares were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act as we did not engage in any general solicitation or advertising.
Added
The recipient of the shares was an accredited investor (as defined in Rule 501(a) of Regulation D) and represented its intention to acquire the shares for investment purposes only, and not with a view to, or for sale in connection with, any distribution thereof. The recipient received, or had, through its relationship with us, adequate access to information about us.
Added
Appropriate legends were affixed to the certificates evidencing the shares issued in this transaction. No underwriter participated in the offer and sale of these shares, and no commission or other remuneration was paid or given directly or indirectly in connection therewith. Issuer Purchases of Equity Securities None. Item 6. [ Reserved ] 87 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

54 edited+23 added−13 removed32 unchanged
Biggest changeComparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 $ Change (in thousands) Revenue $ 306 $ 268 $ 38 Operating expenses: Cost of revenue 210 193 17 Research and development 15,225 14,244 981 Selling and marketing 8,349 14,699 (6,350) General and administrative 16,343 16,784 (441) Total operating expenses 40,127 45,920 (5,793) Loss from operations (39,821) (45,652) 5,831 Interest expense (55) (61) 6 Other income, net 3,634 1,527 2,107 Net loss $ (36,242) $ (44,186) $ 7,944 86 Table of Contents Research and Development Expenses The following table summarizes our research and development expenses for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 $ Change (in thousands) Research and development expenses: Clinical studies $ 6,784 $ 5,818 $ 966 Research and bioinformatics 4,412 4,312 100 Laboratory operations 4,029 4,114 (85) Total research and development expenses $ 15,225 $ 14,244 $ 981 The $1.0 million increase was due to a $1.0 million increase in clinical study costs, and a $0.1 million increase in research and bioinformatics expenses, partially offset by a $0.1 million decrease in laboratory operations costs.
Biggest changeComparison of the Years Ended December 31, 2024 and 2023 The following table summarizes our results of operations for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 $ Change (in thousands) Revenue $ 77 $ 306 $ (229 ) Operating expenses: Cost of revenue 82 210 (128 ) Research and development 14,730 15,225 (495 ) Selling and marketing 5,771 8,349 (2,578 ) General and administrative 16,129 16,343 (214 ) Total operating expenses 36,712 40,127 (3,415 ) Loss from operations (36,635 ) (39,821 ) 3,186 Interest expense (28 ) (55 ) 27 Other income, net 3,765 3,634 131 Net loss $ (32,898 ) $ (36,242 ) $ 3,344 92 Table of Contents Research and Development Expenses The following table summarizes our research and development expenses for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 $ Change (in thousands) Research and development expenses: Clinical studies $ 4,430 $ 6,784 $ (2,354 ) Research and bioinformatics 7,209 4,412 2,797 Laboratory operations 3,091 4,029 (938 ) Total research and development expenses $ 14,730 $ 15,225 $ (495 ) The $0.5 million decrease was due to a $2.4 million decrease in clinical study costs, and a $0.9 million decrease in laboratory operations costs, partially offset by a $2.8 million increase in research and bioinformatics expense.
Factors Affecting Our Performance We believe there are several important factors that have impacted, and that we expect will continue to impact, our operating performance and results of operations, including: • our ability to furt her increase the use and adoption of the PreTRM test; • our ability to develop and successfully commercialize new products and services in the future; • the continued development of the market for proteomics and bioinformatics; • our ability to secure payer and health system contracts that result in significant revenues or to access additional funds; • raising substantial additional capital to continue operations and execute on our business plan, until such time as we can generate significant revenue from the sales of our products, if ever; • obtaining and maintaining intellectual property protection for our technology and products; and • other factors described in the “Risk Factors” section and elsewhere in this report. 84 Table of Contents Key Components of Our Results of Operations Revenues Substantially all of our revenue in the near term is expected to come from sales of the PreTRM test.
Factors Affecting Our Performance We believe there are several important factors that have impacted, and that we expect will continue to impact, our operating performance and results of operations, including: • our ability to furt her increase the use and adoption of the PreTRM test; • our ability to develop and successfully commercialize new products and services in the future; • the continued development of the market for proteomics and bioinformatics; • our ability to secure payer and health system contracts that result in significant revenues or to access additional funds; • raising substantial additional capital to continue operations and execute on our business plan, until such time as we can generate significant revenue from the sales of our products, if ever; • obtaining and maintaining intellectual property protection for our technology and products; and • other factors described in the “Risk Factors” section and elsewhere in this Annual Report. 90 Table of Contents Key Components of Our Results of Operations Revenues Substantially all of our revenue in the near term is expected to come from sales of the PreTRM test.
Our vision is to deliver pivotal and actionable information to pregnant women, their physicians, and health care payers to significantly enhance a mother’s pregnancy journey, improve maternal and neonatal health, and dramatically reduce health care costs.
Our vision is to deliver pivotal and actionable information to pregnant women, their physicians, and health care payers to significantly enhance a mother’s pregnancy journey, improve maternal and neonatal health, and reduce health care costs.
Our future funding requirements will depend on many factors, including the following: • the timing, receipt, and amount of sales from the PreTRM test and other pipeline products and services, if approved; 88 Table of Contents • the cost and timing of establishing sales, marketing, and other commercialization capabilities in the United States and abroad; • our ability to develop and commercialize other products and services; • the terms and timing of any collaborative, licensing, and other arrangements that we may establish; • the cost, timing, and outcomes of regulatory approvals; • the scope, rate of progress, results, and cost of our clinical, scientific, and real-world studies, and other related activities; • the cost of preparing, filing, prosecuting, defending, and enforcing any patent claims and other intellectual property rights; • the extent to which we acquire or invest in businesses, products or technologies, although we currently have no commitments or agreements relating to any of these types of transactions; • partnerships and other strategic options for our PreTRM test and other product candidates; and • other factors described in the “Risk Factors” section and elsewhere in this report.
Our future funding requirements will depend on many factors, including the following: • the timing, receipt, and amount of sales from the PreTRM test and other pipeline products and services, if approved; • the cost and timing of establishing sales, marketing, and other commercialization capabilities in the United States and abroad; • our ability to develop and commercialize other products and services; • the terms and timing of any collaborative, licensing, and other arrangements that we may establish; • the cost, timing, and outcomes of regulatory approvals; • the scope, rate of progress, results, and cost of our clinical, scientific, and real-world studies, and other related activities; • the cost of preparing, filing, prosecuting, defending, and enforcing any patent claims and other intellectual property rights; • the extent to which we acquire or invest in businesses, products or technologies, although we currently have no commitments or agreements relating to any of these types of transactions; • partnerships and other strategic options for our PreTRM test and other product candidates; and • other factors described in the “Risk Factors” section and elsewhere in this Annual Report.
Investing Activities Net cash provided by investing activities for the year ended December 31, 2023 was primarily due to $54.4 million in proceeds from maturities and sales of marketable securities, partially offset by $54.1 million in purchases of marketable securities.
Net cash used in investing activities for the year ended December 31, 2023 was primarily due to $54.4 million in proceeds from maturities and sales of marketable securities, partially offset by $54.1 million in purchases of marketable securities.
As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates and we are not required to provide auditor attestation regarding requirements of Section 404(b) of Sarbanes-Oxley.
As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates and we are not required to provide auditor attestation regarding requirements of Section 404(b) of SOX.
We expect to incur significant additional operating losses and negative cash flows for the foreseeable future, principally as a result of our commercialization activities for the PreTRM test, and to support additional clinical studies, publications, and anticipated research and development of our other pipeline products and services.
We expect to incur significant additional operating losses and negative cash flows for the foreseeable future, principally as a result of our commercialization activities for the PreTRM test, 89 Table of Contents and to support additional clinical studies, publications, and anticipated research and development of our other pipeline products and services.
We expect to derive future revenues from PreTRM and other pipeline tests. As we continue to engage with payers and health systems using our latest evidence, we aim to close additional contracts which would eventually result in additional revenues when health care providers order the PreTRM test.
We expect to derive future revenues from PreTRM and other pipeline tests. As we continue to engage with payers and health systems using our latest evidence, we aim to close additional contracts which are expected to eventually result in additional revenues when health care providers order the PreTRM test.
Recent Accounting Pronouncements A description of recent accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2—Significant Accounting Policies, appearing in Part II, Item 8 of this Annual Report on Form 10-K.
Recent Accounting Pronouncements A description of recent accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2—Significant Accounting Policies, appearing in Part II, Item 8 of this Annual Report on Form 10-K. 96 Table of Contents
We expect our losses in the future to arise principally as a result of our commercialization activities for the PreTRM test and the development, commercialization, marketing, and distribution of our other pipeline products and services, especially the costs of our PRIME study and additional evidence-generating initiatives.
We expect our losses in the future to arise principally as a result of our commercialization activities for the PreTRM test and the development, commercialization, marketing, and distribution of our other pipeline products and services, especially the costs of evidence-generating initiatives.
We will continue to opportunistically negotiate contracts with private and governmental payers and health systems with new positive data from the PREVENT-PTB study, the AVERT PRETERM TRIAL, and the PRIME study, along with real-world evidence studies and other data we plan to generate, and we believe these efforts may eventually result in material revenues.
We will continue to pursue contracts with private and governmental payers and health systems with positive data from the PREVENT-PTB study, the AVERT PRETERM TRIAL, and now the PRIME study, along with real-world evidence studies and other data we plan to generate, and we believe these efforts may eventually result in material revenues.
Research and development costs may increase in the medium to long-term as we support current and additional clinical studies, publications, and other product development activities. 85 Table of Contents Selling and Marketing Expenses Selling and marketing expenses consist primarily of salaries, payroll taxes, employee benefits, and stock-based compensation charges for sales, marketing, and payer access personnel.
Research and development costs may increase in the medium to long-term as we support current and additional clinical studies, publications, and other product development activities. 91 Table of Contents Selling and Marketing Expenses Selling and marketing expenses consist primarily of salaries, payroll taxes, employee benefits, and stock-based compensation charges for sales, marketing, and related commercial support personnel.
As a result of many factors, including those factors set forth in the “Risk Factors” section of this Form 10-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
As a result of many factors, including those factors set forth in the “Risk Factors” section of this Annual Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Operating Expenses Cost of Revenue Cost of revenue reflects the aggregate costs incurred in delivering the proteomic testing results to clinicians and includes expenses for third-party specimen collection and shipping costs, as well as our lab personnel, materials and supplies, equipment, and infrastructure expenses associated with clinical testing, and allocated overhead including rent and equipment depreciation.
Operating Expenses Cost of Revenue Cost of revenue reflects the aggregate costs incurred in delivering products to customers (e.g., proteomic testing results to clinicians) and includes expenses related to third-party specimen collection and shipping costs, as well as our lab personnel, materials and supplies, equipment, and infrastructure expenses associated with clinical testing, and allocated overhead including rent and equipment depreciation.
Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties.
Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties.
We believe that our method of combining the disciplines of proteomics and bioinformatics with rigorous clinical testing, data, and economic analysis enables us to 82 Table of Contents provide physicians, patients, and consumers with personally insightful, clinically meaningful, and economically impactful information designed to improve the pregnancy experience and outcomes for mothers and babies.
We believe that our method of combining the disciplines of proteomics and bioinformatics with rigorous clinical testing, data, and economic analysis enables us to provide physicians and expectant mothers with personally insightful, clinically meaningful, and economically impactful information designed to improve the pregnancy experience and outcomes for mothers and babies.
We have largely funded our operations with proceeds from the sale and issuance of convertible preferred stock, debt financings, bank loans, and the sale and issuance of Class A common stock in our initial public offering, or IPO, which was completed in July 2021. We have incurred significant operating losses since inception.
We have largely funded our operations with proceeds from the sale and issuance of convertible preferred stock, debt financings, bank loans, and the sale and issuance of Class A common stock in our initial public offering, or IPO, which was completed in July 2021.
As of December 31, 2023, we had future minimum payments under this agreement of $0.7 million, which is payable within 12 months. Critical Accounting Policies and Estimates Our management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
As of December 31, 2024, we had future minimum lease payments of $0.9 million, which is payable within 12 months. Critical Accounting Policies and Estimates Our management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
As an EGC, we are also not required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act.
As an EGC, we are also not required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404 of SOX.
The net cash used in operating activities during the year ended December 31, 2022 was primarily due to a net loss of $44.2 million, partially offset by non-cash charges of $6.0 million and an increase in operating assets and liabilities of $3.6 million.
The net cash used in operating activities during the year ended December 31, 2023 was primarily due to a net loss of $36.2 million, partially offset by non-cash charges of $5.5 million and an increase in operating assets and liabilities of $3.5 million.
Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2023 was due to $1.2 million in proceeds from employee equity transactions, partially offset by $0.5 million of finance lease principal payments.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was due to $3.0 million in proceeds from employee equity transactions, partially offset by $0.4 million of finance lease principal payments.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K.
Item 7. Managem ent’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this Annual Report.
We believe market adoption by both health care providers and payers could be aided by the PREVENT-PTB study sub-analysis, the publication of the AVERT PRETERM TRIAL results, the publication of positive PRIME study interim data, and other evidence generated within the next three years.
We believe market adoption by both health care providers and payers could be aided by the recent publication of the AVERT PRETERM TRIAL results, the future publication of positive PRIME study data, and other evidence generated within the next few years.
Other Income, net The $2.1 million increase in other income was due to a $1.2 million increase related primarily to investment income on our marketable securities and a $0.9 million increase in interest income related primarily to our marketable securities.
Other Income, net The $0.1 million increase in other income was due to a $1.1 million increase related primarily to interest income on our marketable securities, partially offset by a $1.0 million decrease in investment income related primarily to our marketable securities.
Net cash provided by financing activities for the year ended December 31, 2022 was due to $0.3 million in proceeds from options exercised, partially offset by $0.3 million of finance lease principal payments. Future Funding Requirements We expect to incur significant additional operating losses and negative cash flows for the foreseeable future.
Net cash provided by financing activities for the year ended December 31, 2023 was due to $1.2 million in proceeds from options exercised, partially offset by $0.5 million of finance lease principal payments. 94 Table of Contents Future Funding Requirements It is likely we will continue to incur significant additional operating losses and negative cash flows for the foreseeable future.
Net cash used in investing activities for the year ended December 31, 2022 was primarily due to $54.4 million in proceeds from maturities and sales of marketable securities, partially offset by $48.1 million in purchases of marketable securities and $0.8 million in purchases of property and equipment.
Investing Activities Net cash provided by investing activities for the year ended December 31, 2024 was primarily due to $48.7 million in proceeds from maturities and sales of marketable securities, partially offset by $35.8 million in purchases of marketable securities and $1.0 million in purchases of intangible assets.
General and Administrative Expenses The $0.4 million decrease was due primarily to decreases of $0.8 million of director and officer insurance costs and $0.8 million of personnel expenses driven by decreased average headcount, partially offset by increases of $0.8 million related to one-time personnel costs and $0.3 million of legal expenses.
General and Administrative Expenses The $0.2 million decrease was due primarily to decreases of $0.8 million related to one-time personnel costs, $0.5 million in personnel-related costs driven by decreased average headcount, and $0.2 million of director and officer insurance costs, partially offset by increases of $1.1 million in stock-based compensation expense and $0.3 million in professional service fees.
We believe market adoption by both health care providers and payers should be aided by the recent publication of our PREVENT-PTB study sub-analysis, positive data from our AVERT PRETERM TRIAL, our PRIME study, and other real-world evidence studies.
We believe market adoption by both health care providers and payers should be aided by the publications of our AVERT PRETERM TRIAL, PRIME study, and forthcoming real-world evidence studies.
Our real-world evidence implementation programs, targeting to expand PreTRM clinical utility data and replicate randomized controlled trial evidence in the real world, have been developed for study launches anticipated in 2024 and 2025.
Beyond demonstration of clinical efficacy, we look forward to studying the effectiveness and implementation of the PreTRM test in a real-world setting. Our real-world evidence implementation programs, targeting to expand PreTRM clinical utility data and replicate randomized controlled trial evidence in the real world, have been developed for study launches anticipated in early 2025.
The $0.1 million decrease in laboratory operations costs was primarily due to a $0.4 million decrease in personnel costs driven by decreased average headcount and a $0.3 million decrease in lab supplies, partially offset by a $0.5 million increase related to lab equipment and associated depreciation.
The $0.9 million decrease in laboratory operations costs was primarily due to a $0.8 million in personnel costs due to decreased average headcount in this department and a $0.2 million decrease in lab supplies and equipment, partially offset by a $0.1 million increase in consulting costs.
For example, to address the risk posed by potential disruptions in specimen collection services described in the “Risk Factors” section of this report, we are working to engage alternative specimen collection providers beyond those that have traditionally supplied the majority of our needs. We expect costs of revenue will generally move in line with the sales of the PreTRM test.
For example, to address the risk posed by potential disruptions in specimen collection services described in the “Risk Factors” section of this Annual Report, we have contracted with alternative specimen collection providers beyond those that have traditionally supplied the majority of our needs, and have developed additional collection methods.
As of December 31, 2023, we had aggregate cash, cash equivalents, and available-for-sale securities of $79.9 million, and an accumulated deficit of $246.9 million. 87 Table of Contents Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2023 2022 (in thousands) Net cash (used in) provided by: Operating activities $ (27,188) $ (34,610) Investing activities 438 5,551 Financing activities 752 5 Net decrease in cash and cash equivalents $ (25,998) $ (29,054) Operating Activities The net cash used in operating activities during the year ended December 31, 2023 was primarily due to a net loss of $36.2 million, partially offset by non-cash charges of $5.5 million and an increase in operating assets and liabilities of $3.5 million.
Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2024 2023 (in thousands) Net cash (used in) provided by: Operating activities $ (14,189 ) $ (27,188 ) Investing activities 11,743 438 Financing activities 2,609 752 Net increase (decrease) in cash and cash equivalents $ 163 $ (25,998 ) Operating Activities The net cash used in operating activities during the year ended December 31, 2024 was primarily due to a net loss of $32.9 million, partially offset by non-cash charges of $7.4 million and an increase in operating assets and liabilities of $11.3 million.
We believe market accessibility of the test could be improved by our progress toward diversifying our specimen collection methods and enhanced awareness and engagement with patients. Revenue from our other pipeline products and services is expected to be dependent on our ability to successfully market them to patients, providers, payers, and, in most cases, a combination of the three.
Revenue from our other pipeline products and services is expected to be dependent on our ability to successfully market them to patients, providers, payers, and, in most cases, a combination of the three.
Selling and Marketing Expenses The $6.4 million decrease was due primarily to decreases of $4.3 million in personnel-related costs driven by decreased average headcount, $0.8 million of travel costs driven by decreased average headcount, $0.7 million of marketing programs and materials development, $0.5 million of consulting and outside services, and $0.4 million of IT systems supporting sales efforts.
Selling and Marketing Expenses The $2.6 million decrease was due primarily to decreases of $2.4 million in personnel-related costs driven by decreased average headcount, $0.4 million in travel expenses, $0.3 million in stock-based compensation expense, and $0.2 million in marketing programs and materials, partially offset by a $0.8 million increase in consulting and other professional service costs.
Since our inception, we have devoted the majority of our efforts and resources to performing research and development, acquiring product rights, raising capital, establishing facilities, conducting clinical trials, and establishing commercial operations to develop and commercialize the PreTRM test. During this period, we have incurred annual net losses.
Our operations are headquartered in Salt Lake City, Utah, including a CLIA-certified laboratory. Since our inception, we have devoted the majority of our efforts and resources to performing research and development, acquiring product rights, raising capital, establishing facilities, conducting clinical trials, and establishing commercial operations to develop and commercialize our testing and analytics products, primarily the PreTRM test.
We expense all research and development costs, both internal and external, in the period in which they are incurred. We expect that our research and development expenses will decrease slightly in 2024 compared to 2023 due to the PRIME study stopping enrollment due to efficacy at the end of 2023.
We expense all research and development costs, both internal and external, in the period in which they are incurred. We expect that our research and development expenses will increase in 2025 compared to 2024 due to increased product development activities and additional planned studies.
Our net losses were $36.2 million and $44.2 million for the years ended December 31, 2023 and 2022, respectively.
We have incurred significant operating losses since inception. Our net losses were $32.9 million and $36.2 million for the years ended December 31, 2024 and 2023, respectively.
Results of Operations The results of operations presented below should be reviewed in conjunction with the financial statements and related notes included elsewhere in this report.
Other Income, Net Other income, net consists of interest income and other investment income earned on our cash, cash equivalents, and marketable securities, and other gains and losses. Results of Operations The results of operations presented below should be reviewed in conjunction with the financial statements and related notes included elsewhere in this Annual Report.
We have taken steps to significantly reduce our annual operating expenses across all aspects of our business and we believe our cash runway is sufficient to enable us to operate into 2027 based on our existing operating plans.
We significantly reduced our annual operating expenses across all aspects of our business over the past 18 months and will continue to prudently monitor our operating expense levels. We believe our cash runway is sufficient to enable us to operate through 2028 based on our existing operating plans.
Our commercialization strategy includes streamlining patient access to the test by improving specimen acquisition and transport and conducting clinical trials to demonstrate the health and economic benefits of early and accurate detection of preterm birth risk coupled with well-recognized interventions in higher risk patients.
Our commercialization strategy includes utilizing results derived from past and future clinical trials to demonstrate the health and economic benefits of early and accurate detection of preterm birth risk coupled with well-recognized interventions in higher risk patients, illustrating these benefits to health care providers and insurance payers, and providing convenient access to the test through streamlined specimen collection options.
The $1.0 million increase in clinical study costs was primarily due to a $1.3 million increase resulting from the increased activity in the PRIME study and a $0.1 million increase in consulting costs, partially offset by a $0.5 million decrease in personnel costs driven by decreased average headcount.
The $2.4 million decrease in clinical study costs was primarily due to a $1.9 million decrease in PRIME study costs resulting from stopping enrollment in December 2023 due to efficacy and a $0.5 million decrease in personnel costs due to decreased average headcount in this department.
These input assumptions include the expected term of the awards, the expected common stock price volatility over the term of the awards, risk-free interest rates, and the expected dividend yield. Changes in the assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized.
Input assumptions used in calculating the fair value of stock-based awards represent management’s estimates and involve inherent uncertainties and the application of management’s judgment. These input assumptions include the expected term of the awards, the expected common stock price volatility over the term of the awards, risk-free interest rates, and the expected dividend yield.
Among other products, we are developing a test designed to provide a more accurate estimate of the delivery date for expectant mothers for the purposes of planning maternity leave, required support, travel arrangements, and related considerations. 83 Table of Contents Our operations are headquartered in Salt Lake City, Utah, including a CLIA-certified laboratory.
We believe these tests have the potential to offer significant health benefits to women and their babies. Among other products, we are developing a test designed to provide a more accurate estimate of the delivery date for expectant mothers for the purposes of planning maternity leave, required support, travel arrangements, and related considerations.
We will continue to use judgment in evaluating the expected volatility, expected terms, and interest rates utilized for our stock-based compensation expense calculations on a prospective basis. Emerging Growth Company and Smaller Reporting Company Status We are an emerging growth company, or EGC, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.
Emerging Growth Company and Smaller Reporting Company Status We are an emerging growth company, or EGC, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.
Research and Development Expenses Research and development expenses consist of costs incurred for our research activities and development of our product candidates.
We expect costs of revenue will generally move in line with the sales of our products. Research and Development Expenses Research and development expenses consist of costs incurred for our research activities and development of our product candidates.
The $0.1 million increase in research and bioinformatics expenses was primarily due to an increase of $0.3 million in personnel costs driven by increased average headcount, partially offset by a $0.2 million decrease in specimen acquisition costs related to product development.
The $2.8 million increase in research and bioinformatics expense was primarily due to a $1.6 million increase in consulting and outside processing expenses related to product development activities, a $0.9 million increase in stock-based compensation expense, and a $0.4 million increase in personnel costs due to increased average headcount in this department.
The plan allows for the issuance of incentive stock options and non-qualified stock options, as well as other stock rights. We recognize stock-based compensation expense for stock options on a straight-line basis over the requisite service period and estimate forfeitures based on historical evidence.
Stock-based Compensation We maintain a stock-based compensation plan as a long-term incentive for employees and non-employee consultants. The plan allows for the issuance of incentive stock options and non-qualified stock options, as well as other stock rights.
We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. Stock-based Compensation We maintain a stock-based compensation plan as a long-term incentive for employees and non-employee consultants.
Actual results 95 Table of Contents may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
We believe the data that will be published over the coming years, together with our current body of evidence, will further demonstrate the clinical and economic utility of our test.
We believe that all data expected to be published in coming months and years, together with our current body of evidence, will continue to demonstrate the clinical and economic utility of using our test. We are actively discovering and developing additional biomarker and predictive analytics tests to predict other specific major conditions of pregnancy.
We expect selling and marketing expenses to increase in the medium to long-term as we expand our commercial efforts as opportunity dictates and increase our product portfolio. General and Administrative Expenses General and administrative expenses consist primarily of salaries, payroll taxes, employee benefits, and stock-based compensation charges for personnel in executive, finance, information technology, human resources, and other administrative functions.
General and Administrative Expenses General and administrative expenses consist primarily of salaries, payroll taxes, employee benefits, and stock-based compensation charges for personnel in executive, finance, information technology, human resources, and other administrative functions. Other significant costs include facilities, corporate and intellectual property legal fees, accounting, insurance, consulting, and other professional fees.
Other significant costs include travel, consulting, public relations, facilities, and legal costs related to commercial efforts. We expect selling and marketing expenses will decrease in 2024 compared to 2023 as we recently took steps to further streamline our near-term commercial strategy to refocus on institutional sales as we generate additional clinical data.
Other significant costs include travel, consulting, public relations, facilities, and legal costs related to commercial efforts. We expect selling and marketing expenses will increase in 2025 compared to 2024 as we continue to add strategic headcount and consultants, prepare for publication of PRIME study data, expand our investment in pursuit of PreTRM commercial opportunities, and invest in our product portfolio.
A model that is emerging is that by identifying and intervening on at-risk pregnancies, not identifiable by other approaches, babies destined for premature delivery remain in utero longer. This prolongation of gestation in the preterm period leads to more mature babies that require shorter hospital/NICU stays due to improved neonatal health.
When babies who were destined for premature delivery remain in utero longer, the result is that the more mature babies with improved health require shorter hospital/NICU stays. We believe the substantial health benefits of this model translate very favorably to health economic savings, creating a powerful value proposition to insurance payers.
Our stock-based compensation expenses are based upon the grant date fair value of options estimated using the Black-Scholes option pricing model. Input assumptions used in calculating the fair value of stock-based awards represent management’s estimates and involve inherent uncertainties and 89 Table of Contents the application of management’s judgment.
We recognize stock-based compensation expense for stock options on a straight-line basis over the requisite service period and estimate forfeitures based on historical evidence. Our stock-based compensation expenses are based upon the grant date fair value of options estimated using the Black-Scholes option pricing model.
Removed
Manuscript results of these studies demonstrate consistency in the reported beneficial impact of the PreTRM test and treat strategy. Specifically, this includes evidence of a prolongation of gestation, shortened hospital or NICU length of stay, and improvements in measures of neonatal morbidity/mortality.
Added
Recent Developments In July 2024, we announced the publication of the positive results from the AVERT PRETERM TRIAL in Diagnostics, an international, peer-reviewed, open access journal on medical diagnosis. Diagnostics highlighted this study on the cover of the July issue. Notable results indicated an 18% reduction in severe neonatal morbidity and mortality.
Removed
The PRIME study, for which enrollment was stopped due to efficacy at the interim analysis and is being prepared for publication, includes the same Primary and Secondary outcomes as the AVERT PRETERM TRIAL and affords the continued assessment of this model.
Added
Additionally, there was a 7-day reduction in the mean neonatal hospital length of stay among neonates with the longest stays. The trial also showed an increase in the average gestational age at birth before 32 weeks by 2.48 weeks.
Removed
In December 2023, we announced that the Data Safety Monitoring Board, or DSMB, overseeing our PRIME study recommended stopping enrollment due to efficacy, reporting that either co-primary endpoints, neonatal hospital length of stay and composite neonatal morbidity and mortality, met the stopping criteria for statistical significance at the pre-planned interim analysis.
Added
Furthermore, there was a 28-day reduction in the neonatal length of hospital stay for babies born before 32 weeks’ gestation, significantly reducing the time spent in the hospital for those at risk of the earliest delivery.
Removed
We adopted the DSMB’s recommendation and stopped PRIME study enrollment to focus on analyzing and reporting the available data. A manuscript reporting study results, including top-line and exploratory analyses, is being prepared for submission and peer review.
Added
Significant reductions in neonatal morbidity and mortality were also 88 Table of Contents reported, as well as hospital and NICU lengths of stay, in the entire intent-to-treat population. The test-and-treat strategy was linked to decreased odds of preterm birth and spontaneous preterm birth at various gestational ages.
Removed
We have built an advanced, proprietary, and scalable proteomics and bioinformatics platform to characterize the biology of pregnancy and to discover and validate key protein biomarkers found in blood that are highly accurate predictors of dynamic changes that occur during pregnancy.
Added
In January 2025, key results of the PRIME study were presented at the Society for Maternal Fetal Medicine’s 2025 SMFM Pregnancy Meeting, and an abstract of primary endpoint data was made public in the Pregnancy Journal.
Removed
By incorporating our proprietary technology platform into our rigorous data-driven development process, we have created a differentiated approach for effectively addressing major milestones, conditions, and features of pregnancy. We believe our large and growing pregnancy dataset (clinical, demographic, proteomic) is a substantial asset for understanding pregnancy complications, health inequities, and the personal pregnancy journey.
Added
Notable results from the PRIME study showed the primary endpoints being met in the prespecified modified intent-to-treat population (mITT), indicating a 25% reduction in neonatal morbidity and mortality, and an 18% reduction in neonatal hospital length of stay for the approximately 10% of babies who stay beyond the standard number days for routine deliveries.
Removed
We envision that our comprehensive approach will enable us to fully characterize one of the most important periods in the lives of women and their babies, and will help to improve their well-being. We are actively discovering and developing several additional biomarker tests to predict other specific major conditions of pregnancy, such as a pregnancy risk prediction panel test.
Added
The mITT population excluded any participants at high-risk by the test that didn't receive the treatment bundle. It therefore focuses on treatment efficacy. In contrast, a more conservative intent-to-treat analysis (ITT) is often used to assess more real-world benefit of a technology.
Removed
We believe these tests have the potential to offer significant health benefits to women and their babies.
Added
The ITT analysis, inclusive of subjects who declined treatment, indicated a 20% reduction in neonatal morbidity and mortality, and a 20% reduction in NICU admissions.
Removed
Our evidence portfolio continues to grow with the publication of a PREVENT-PTB study sub-analysis of the potential benefit of care coordination and low-dose aspirin paired with PreTRM test results. We have finalized the AVERT PRETERM TRIAL primary analysis for peer review, the details of which can be found on the medrxiv pre-print server.
Added
We are currently seeking publication of full PRIME data, which includes these and other study results, in a highly respected, peer-reviewed journal, and we expect to generate additional publications on exploratory analyses and economic benefits in the coming months. The PRIME study includes the same Primary and Secondary outcomes as the AVERT PRETERM TRIAL.
Removed
Other significant costs include facilities, corporate and intellectual property legal fees, accounting, insurance, consulting, and other professional fees. We expect general and administrative expenses in 2024 could remain consistent or decrease slightly compared to 2023, but such expenses could increase in the medium to long-term as needed to support future operations and anticipated revenue growth.
Added
When performing a meta-analysis of data from the two studies, we can demonstrate pooled effect sizes showing a 22% decreased risk of prolonged hospital stay and 22% reduction in neonatal morbidity and mortality.
Removed
Interest Expense Interest expense represents interest incurred on our finance leases. Other Income, Net Other income, net consists of interest income and other investment income earned on our cash, cash equivalents, and marketable securities, and other gains and losses.
Added
This powerful evidence from our studies makes a compelling case for a strategy where using the PreTRM test to identify higher-risk pregnancies, not currently identifiable by standard care, and applying widely accepted interventions, can result in prolonged gestation.
Removed
These decreases are largely a result of steps we took to further streamline our near-term commercial strategy to refocus on institutional sales as we generate additional clinical data.
Added
Data from these studies suggests that the number of patients needed to screen (NNS) to save a NICU admission is 41, and to save a NICU day is only about 3-4. To put this in context, standard of care for short cervix, which utilizes transvaginal ultrasound plus progesterone treatments, has an NNS to save a NICU admission of 150.
Removed
As of December 31, 2023, we had future minimum lease payments of $2.0 million, with $1.1 million payable within 12 months. Consulting Agreement We have a consulting agreement with Blue Ox Healthcare Partners, LLC, or Blue Ox, to advise us on development of strategies with the goal to obtain widespread insurance coverage for the PreTRM test.
Added
In February 2025, we completed an underwritten public offering, or the February 2025 Offering, in which we issued and sold shares of Class A common stock and pre-funded warrants to purchase shares of Class A common stock, including shares of Class A common stock issued upon exercise of the underwriters' option to purchase additional shares in full, receiving aggregate gross proceeds of approximately $57.5 million before deducting underwriting discounts and commissions and other offering expenses.

… 10 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed3 unchanged
Biggest changeIn addition, increased inflation has had, and may continue to have, an effect on interest rates and may adversely affect our borrowing rate and our ability to obtain any potential additional funding. 91 Table of Contents
Biggest changeIn addition, increased inflation has had, and if it continues to increase, may have, an effect on interest rates and may adversely affect our borrowing rate and our ability to obtain any potential additional funding. 97 Table of Contents
Any realized gains or losses resulting from such interest rate changes would only occur if we sold the investments prior to maturity. We do not 90 Table of Contents intend to sell investments while they are in an unrealized loss position and do not believe we will be required to sell the investments before recovery, which may be maturity.
Any realized gains or losses resulting from such interest rate changes would only occur if we sold the investments prior to maturity. We do not intend to sell investments while they are in an unrealized loss position and do not believe we will be required to sell the investments before recovery, which may be maturity.
Changes in U.S. interest rates affect the interest earned on our cash and cash equivalents and marketable securities, and the market value of those securities. A hypothetical 100 basis point increase in interest rates would have resulted in a decrease of $0.6 million in the market value of our available-for-sale debt securities as of December 31, 2023.
Changes in U.S. interest rates affect the interest earned on our cash and cash equivalents and marketable securities, and the market value of those securities. A hypothetical 100 basis point increase in interest rates would have resulted in a decrease of $0.4 million in the market value of our available-for-sale debt securities as of December 31, 2024.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk Our exposure to changes in interest rates relates primarily to interest earned and market value on our cash and cash equivalents and marketable securities.
Item 7A. Quantitative and Q ualitative Disclosures about Market Risk Interest Rate Risk Our exposure to changes in interest rates relates primarily to interest earned and market value on our cash and cash equivalents and marketable securities.
However, the current inflationary environment could affect us by increasing our costs of labor, laboratory supplies, and clinical trials and could adversely affect our business, results of operations, financial position and cash flows.
However, an inflationary environment could affect us by increasing our costs of labor, laboratory supplies, and clinical trials and could adversely affect our business, results of operations, financial position and cash flows.

Other SERA 10-K year-over-year comparisons