SERA US Equity☆

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. 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. 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.

Investors and others should note that we routinely use the Investors section of our website to announce material information to investors and the marketplace. While not all of the information that we post on the Investors section of our website is of a material nature, some information could be deemed to be material. Accordingly, we encourage investors, the media, and others interested in us to review the information that we share on the Investors section of our website, investors.seraprognostics.com.

Overview

We are a women’s health company utilizing our proprietary proteomics and bioinformatics platform, and significant data resources, to improve maternal and neonatal health by discovering, developing, and commercializing blood-based biomarker tests and predictive analytic products and services. 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. 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.

There are approximately 140 million births globally each year, and approximately 3.7 million births annually in the United States. Of these, it is estimated that as many as 30% are affected by various complications (i.e., a high-risk pregnancy), including: preterm birth, preeclampsia, fetal growth restriction, stillbirth, hypertension of pregnancy, gestational diabetes and others. In many cases these complications have profound short- and long-term health consequences for the mother and baby. These health consequences of preterm birth alone are estimated to be approximately $25 billion annually in the United States. This underscores that existing methods to predict adverse pregnancy outcomes are insufficient for timely and effective proactive management for the vast majority of high-risk pregnancies. We believe that positive patient outcomes are the result of appropriate care, and the primary differentiator of patient care should be based on a determination of risk informed by a number of factors including our novel diagnostic tests.

Our first commercial product, the PreTRM test, is the only broadly validated, commercially available blood-based biomarker test to accurately predict the risk of a premature delivery, also known as preterm birth. The PreTRM test is a non-invasive blood test given to a pregnant woman, carrying a single fetus, during weeks 18 through 20 of gestation that provides an accurate prediction of the expectant mother’s risk of delivering spontaneously before 37 weeks’ gestation. 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. Clinical trials conducted to date include the Prediction and Prevention of Preterm Birth, or the PREVENT-PTB Study, Serum Assessment of Preterm Birth Outcomes Compared to Historical Controls study, or the AVERT PRETERM TRIAL, and the Prematurity Risk Assessment Combined With Clinical Interventions for Improving Neonatal outcoMEs study, or the PRIME study.

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. 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. 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. Significant reductions in neonatal morbidity and mortality were also

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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.

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. 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. 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. 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. 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. 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. 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. 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. 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.

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.

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. 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 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.

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 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. 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.

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. 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,

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and to support additional clinical studies, publications, and anticipated research and development of our other pipeline products and services.

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. We will continue to evaluate the allocation of our resources as we focus our efforts to accelerate the market adoption of our PreTRM test and the development and launch of additional pipeline products and services.

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. However, if we are unable to secure payer contracts and generate significant market adoption by providers resulting in significant revenues, or if we fail to develop and successfully market our additional tests that generate additional revenues, we may be required to delay, scale back or abandon some, or all, of our development programs and other operations. Until such time as we can generate significant revenue from the sales of our products, if ever, we may need to continue to finance our cash needs through equity offerings, debt financings or other capital sources, potentially including collaborations or other similar arrangements. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends and may require the issuance of warrants. If we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may have to significantly delay, reduce, or eliminate some or all of our product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. Our ability to access capital when needed is not assured and, if not achieved on a timely basis, will materially harm our business, financial condition, and results of operations.

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:

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our ability to further increase the use and adoption of the PreTRM test;

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our ability to develop and successfully commercialize new products and services in the future;

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the continued development of the market for proteomics and bioinformatics;

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our ability to secure payer and health system contracts that result in significant revenues or to access additional funds;

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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;

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obtaining and maintaining intellectual property protection for our technology and products; and

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other factors described in the “Risk Factors” section and elsewhere in this Annual Report.

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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. 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. 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. We believe accessibility of the test for patients could be improved by our recent developments in simplified specimen collection methods, and enhanced awareness and engagement with patients, including our PreTRM website which allows patients to access the test directly. 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.

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 these components can vary significantly in cost and reliability of supply, and we periodically seek ways to make our supplier network more robust. 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. 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. These expenses include:

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clinical and real-world studies;

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laboratory processes;

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research and bioinformatic activities;

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biobanking and publication efforts;

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personnel-related expenses, including salaries, payroll taxes, employee benefits, and stock-based compensation charges for employees engaged in these research and development activities;

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direct study expenses incurred under agreements with study sites or contract research organizations;

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consultants engaged in our research and development efforts;

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laboratory materials and supplies;

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facilities costs; and

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depreciation, amortization, and other direct and allocated expenses, including insurance and other operating costs, incurred as a result of our research and development activities.

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. 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.

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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. 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.

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. We expect general and administrative expenses to increase slightly in 2025 compared to 2024 to support the organization as it begins to scale in the pursuit of PreTRM commercial opportunities and other strategic initiatives.

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.

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.

Comparison 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,

(in thousands)

Operating expenses:

Interest expense (28 ) (55 ) 27

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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,

(in thousands)

Research and development expenses:

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. 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. 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. 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.

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.

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.

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.

Liquidity and Capital Resources

Sources of Liquidity

Since inception, we have not generated a significant amount of commercial revenue from product sales or any other sources and have incurred significant operating losses and negative cash flows from operations. We anticipate that we will continue to incur net losses for the foreseeable future. We have financed our operations primarily through proceeds from the sale and issuance of convertible preferred stock and convertible notes, bank loans, and the sale and issuance of Class A common stock in our IPO, which was completed in July 2021. As of December 31, 2024, we had aggregate cash, cash equivalents, and available-for-sale securities of $68.2 million, and an accumulated deficit of $279.8 million.

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On August 7, 2024, we filed a universal shelf registration on Form S-3 with the SEC, which was declared effective on August 13, 2024, or the 2024 Form S-3, pursuant to which we registered for sale up to $100.0 million of any combination of our Class A common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine. This registration statement will remain in effect for up to three years from the date it became effective.

The 2024 Form S-3 included a prospectus, or the ATM Prospectus Supplement, covering up to $50.0 million in shares of Class A common stock that could be issued and sold under the sales agreement, dated August 7, 2024, between us and TD Securities (USA) LLC, or TD Cowen, or the 2024 Sales Agreement, with respect to an at-the-market offering program under which we may offer and sell, from time to time at our sole discretion, shares of our Class A common stock having an aggregate offering price of up to $50.0 million. In connection with the February 2025 Offering, we terminated the ATM Prospectus Supplement, but the 2024 Sales Agreement remains in full force and effect. We make no assurances as to the continued effectiveness of the 2024 Form S-3. As of December 31, 2024, we have not sold any shares of Class A common stock to date under the 2024 Sales Agreement.

On February 12, 2025, we closed the February 2025 Offering in which we issued and sold 1,250,000 shares of our Class A Common Stock and pre-funded warrants to purchase up to 11,250,000 shares of our Class A Common Stock. The gross proceeds to us from the February 2025 Offering were approximately $50.0 million before deducting underwriting discounts and commissions and other offering expenses. On February 13, 2025, the representatives of the underwriters exercised their option in full to purchase an additional 1,875,000 shares of Class A Common Stock, for additional gross proceeds to us of $7.5 million.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

Year Ended December 31,

(in thousands)

Net cash (used in) provided by:

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. 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.

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. 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.

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. 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.

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Future Funding Requirements

It is likely we will continue to incur significant additional operating losses and negative cash flows for the foreseeable future. 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. There can be no assurance that we will eventually achieve significant revenues or profitability, or if achieved, can sustain either on a continuing basis. If we are unable to achieve significant revenues or raise additional funding, when needed, we may not be able to continue the development or commercialization of our products and services and could be required to delay, scale back, or abandon some or all of our development programs and other operations. No assurance can be given that we will be successful in raising the required capital at reasonable cost and at the required times, or at all.

Any additional equity financing may not be available on favorable terms, most likely will be dilutive to our current stockholders, and debt financing, if available, may involve restrictive covenants and dilutive financing instruments. Further, our operating plan may change, and we may need additional funds to meet operational needs and capital requirements for product development and commercialization sooner than planned. We currently have no credit facility or committed sources of capital. Our future funding requirements will depend on many factors, including the following:

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the timing, receipt, and amount of sales from the PreTRM test and other pipeline products and services, if approved;

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the cost and timing of establishing sales, marketing, and other commercialization capabilities in the United States and abroad;

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our ability to develop and commercialize other products and services;

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the terms and timing of any collaborative, licensing, and other arrangements that we may establish;

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the cost, timing, and outcomes of regulatory approvals;

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the scope, rate of progress, results, and cost of our clinical, scientific, and real-world studies, and other related activities;

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the cost of preparing, filing, prosecuting, defending, and enforcing any patent claims and other intellectual property rights;

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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;

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partnerships and other strategic options for our PreTRM test and other product candidates; and

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other factors described in the “Risk Factors” section and elsewhere in this Annual Report.

We evaluated that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months.

Contractual Obligations and Commitments

Our material cash requirements include the following contractual and other obligations.

Leases

We have lease arrangements for certain equipment and facilities. 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. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue and expenses incurred during the reporting periods. 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

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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.

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 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. 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. Changes in the assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized. We will continue to use judgment in evaluating the expected volatility 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. We elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (1) are no longer an EGC or (2) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies, reduce disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and are exempt from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. 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. 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 will 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.

We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies until the fiscal year following the determination that the market value of our voting and non-voting common stock held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or our annual revenues are less than $100 million during the most recently completed fiscal year and the market value of our voting and non-voting common stock held by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter.

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.

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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.

Our cash and cash equivalents and marketable securities consist of cash held in banks, money market funds, commercial paper, U.S. government securities, U.S. federal agency securities and investment grade corporate securities. Our investment policy and strategy are focused on preservation of capital and supporting our liquidity requirements. 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. 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.

Foreign Currency

We do not regularly incur expenses with vendors outside the United States or that are denominated in currencies other than the U.S. dollar. We may incur such expenses in the future at which point exchange rate fluctuations might adversely affect our expenses, results of operations, financial position and cash flows. To date, exchange rate fluctuations have not had a material effect on our results of operations.

Effects of Inflation

We do not believe inflation has had a material effect on our results of operations during the periods presented. 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. In 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.

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Item 8. Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS

Page

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 99

Balance Sheets 100

Statements of Operations and Comprehensive Loss 101

Statements of Stockholders’ Equity 102

Statements of Cash Flows 103

Notes to Financial Statements 104

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Sera Prognostics, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Sera Prognostics, Inc. (the Company) as of December 31, 2024 and 2023, the related statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2012.

Salt Lake City, Utah

March 19, 2025

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SERA PROGNOSTICS, INC.

Balance Sheets

(in thousands, except share and per share data)

December 31,

Assets

Current assets:

Cash and cash equivalents $ 4,043 $ 3,880

Accounts receivable 34 160

Prepaid expenses and other current assets 1,311 795

Intangible assets, net 1,026 —

Liabilities and Stockholders' Equity

Current liabilities:

Accrued and other current liabilities 2,384 2,722

Finance lease obligation, current portion 194 440

Finance lease obligation, net of current portion 2 196

Operating lease obligation, net of current portion — 644

Commitments and contingencies (Note 13)

Stockholders’ equity:

Accumulated other comprehensive income (loss) 60 (15 )

Total liabilities and stockholders' equity $ 72,575 $ 95,441

The accompanying notes are an integral part of the financial statements

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SERA PROGNOSTICS, INC.

Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

Year Ended

December 31,

Operating expenses:

Interest expense (28 ) (55 )

Net loss per share, basic and diluted $ (0.99 ) $ (1.16 )

Other comprehensive income:

Unrealized gain on available-for-sale debt securities, net of tax $ 75 $ 966

Total other comprehensive income 75 966

The accompanying notes are an integral part of the financial statements

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SERA PROGNOSTICS, INC.

Statements of Stockholders’ Equity

(in thousands, except share data)

Accumulated

Common Stock Additional Other Total

(Class A and B) Paid-In Comprehensive Accumulated Stockholders'

Shares Amount Capital (Loss) Income Deficit Equity

Issuance of common stock under employee stock purchase plan 93,235 — 123 — — 123

Stock-based compensation expense — — 5,273 — — 5,273

Other comprehensive income — — — 966 — 966

Issuance of restricted stock units 1,257,345 — — — — —

Issuance of common stock under employee stock purchase plan 48,740 — 147 — — 147

Common stock warrant exercises 7,971 — — — — —

Stock-based compensation expense — — 7,013 — — 7,013

Other comprehensive income — — — 75 — 75

The accompanying notes are an integral part of the financial statements

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SERA PROGNOSTICS, INC.

Statements of Cash Flows

(in thousands)

Year Ended

December 31,

Cash flows from operating activities

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 833 900

Non-cash investment income, net (910 ) (1,182 )

Changes in operating assets and liabilities:

Accounts receivable 126 (47 )

Prepaid expenses and other assets (10 ) 465

Accrued and other current liabilities (575 ) (2,301 )

Net cash used in operating activities (14,189 ) (27,188 )

Cash flows from investing activities

Purchases of marketable securities (35,831 ) (54,143 )

Proceeds from maturities and sales of marketable securities 48,675 54,398

Purchases of property and equipment (56 ) (128 )

Proceeds from disposal of property and equipment — 311

Purchases of intangible assets (1,045 ) —

Net cash provided by investing activities 11,743 438

Cash flows from financing activities

Proceeds from exercise of stock options 2,902 1,095

Proceeds from employee stock purchase plan 147 123

Finance lease principal payments (440 ) (466 )

Net cash provided by financing activities 2,609 752

Net increase (decrease) in cash and cash equivalents 163 (25,998 )

Cash and cash equivalents at beginning of period 3,880 29,878

Cash and cash equivalents at end of period $ 4,043 $ 3,880

Supplemental disclosure of cash flow information

Cash paid for interest $ 28 $ 55

Supplemental disclosure of non-cash investing and financing information

Issuance of stock to settle accrued and other current liabilities $ 406 $ —

The accompanying notes are an integral part of the financial statements

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SERA PROGNOSTICS, INC.

Notes to Financial Statements

1. Description of Business and Financial Condition

Sera Prognostics, Inc. (the “Company”) is a women’s health company utilizing its proprietary proteomics and bioinformatics platform, and significant data resources, to improve maternal and neonatal health by discovering, developing and commercializing blood-based biomarker tests and predictive analytic products and services. 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. 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.

The Company was incorporated in the State of Delaware on January 17, 2008 and its operations are located in Salt Lake City, Utah, including a Clinical Laboratory Improvement Amendments, or CLIA, certified laboratory. Since its inception, the Company’s activities have consisted of performing research and development, conducting clinical studies for its pipeline products and services, acquiring product rights, raising capital, establishing facilities, and organizing commercial operations to market the PreTRM test.

Liquidity and Capital Resources

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

The Company has incurred net losses and negative cash flows from operations since inception and had an accumulated deficit of $279.8 million as of December 31, 2024. The Company’s management expects the Company to incur significant additional operating losses and negative cash flows for the foreseeable future, principally as a result of the Company’s activities relating to the PreTRM test and the Company’s other pipeline products and services, including clinical and preclinical trials and anticipated research and development activities as well as commercialization activities. There can be no assurance that the Company will eventually achieve significant revenues or profitability to sustain operations, or if achieved, can sustain either on a continuing basis. If the Company is unable to achieve significant revenues or raise additional funds, when needed, it may not be able to continue the development or commercialization of its products and services and could be required to delay, scale back, or abandon some or all of its operations. No assurance can be given that the Company will be successful in raising the required capital on reasonable terms and at the required times, or at all.

In August 2024, the Company filed a universal shelf registration on Form S-3 with the U.S. Securities and Exchange Commission (the “SEC”), which was declared effective on August 13, 2024 (the “2024 Form S-3”), pursuant to which the Company registered for sale up to $100.0 million of any combination of Class A common stock, par value $0.0001 per share ("Class A common stock"), preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that the Company may determine.

In August 2024, the Company entered into a sales agreement with TD Securities (USA) LLC (“TD Cowen”) with respect to an at-the-market offering program under which the Company may offer and sell, from time to time at the Company’s sole discretion, shares of Class A common stock having an aggregate offering price of up to $50.0 million (the “2024 Sales Agreement”). As of December 31, 2024, the Company has not sold any shares of Class A common stock under the 2024 Sales Agreement.

Any additional equity financing, if available to the Company, may not be available on favorable terms and may be dilutive to current stockholders, and any debt financing, if available, may involve restrictive covenants and dilutive financing instruments. The Company’s future operations are highly dependent on a combination of factors, including (i) the commercialization and market acceptance of the PreTRM test and the successful development, commercial launch, marketing, and distribution of other pipeline products and services; (ii) the success of scientific and clinical studies and other research and development programs that support current and future products and services; (iii) the development of competitive products by other biotechnology and laboratory companies; (iv) the Company’s ability to manage growth of the organization; (v) the Company’s ability to protect its intellectual property, technology, and products; and, ultimately (vi) the timely and successful completion of any additional financing.

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The principal sources of the Company’s working capital to date have been the proceeds from the sale and issuance of convertible preferred stock and convertible notes, bank loans, and the sale and issuance of Class A common stock in an initial public offering (“IPO”), which was completed in July 2021. As of December 31, 2024, the Company had aggregate cash, cash equivalents, and available-for-sale securities of approximately $68.2 million. See Note 3—Cash, Cash Equivalents and Marketable Securities.

The Company evaluated that its existing financial resources are sufficient to continue operating activities at least 12 months from the issuance date of these financial statements.

2. Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative U.S. GAAP included in the Accounting Standards Codification (“ASC”), and Accounting Standards Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”).

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company evaluates these estimates on an ongoing basis. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ materially from those estimates.

The Company’s financial statements as of and for the year ended December 31, 2024 reflect the Company’s estimates of the impact of the current macroeconomic environment, including the impact of inflation and higher interest rates. The extent to which these conditions will directly or indirectly impact the Company’s business, results of operations, and financial condition is uncertain. The Company is not aware of any specific event or circumstance that would require an update to its estimates, judgments, and assumptions or a revision of the carrying value of the Company’s assets or liabilities as of the date of this filing.

Cash and cash equivalents

The Company considers all highly liquid financial instruments with maturities of 90 days or less at the date of purchase to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents are valued at cost, which approximates their fair value. As of December 31, 2024 and 2023, cash and cash equivalents consisted of cash and money market funds. Cash and cash equivalents are stated at fair value.

Marketable Securities

The Company has classified its marketable securities, all of which are debt securities, as available-for-sale securities. These securities are carried at estimated fair value. Available-for-sale debt securities with an estimated fair value below the amortized cost basis are assessed to determine what amount of that difference, if any, is attributable to expected credit losses. An allowance for credit losses on available-for-sale debt securities is recognized as a charge in other income, net on the Company’s statements of operations and comprehensive loss, and any remaining unrealized losses, net of the related tax effect, are included in accumulated other comprehensive loss in stockholders’ equity until realized. Gains and losses on marketable security transactions are reported on the specific-identification method.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and marketable securities. The Company maintains bank deposits in accounts at federally insured financial institutions and these deposits may exceed federally insured limits. The Company is exposed to credit risk in the event of default by the financial institution holding its cash to the extent recorded in the balance sheet. The Company has not experienced any losses on its deposits of cash. The Company’s cash equivalents consist of money market funds and investment grade commercial paper. Marketable securities consist of investments in U.S. government securities, U.S. federal

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agency securities, investment grade commercial paper, and investment grade corporate securities. The Company’s investment portfolio in corporate debt securities is highly liquid and diversified among individual issuers. The Company did not experience any credit losses related to its investment portfolio for the years ended December 31, 2024 and 2023.

Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the shorter of estimated useful lives of the assets or the respective lease term. The estimated useful life of each asset category is as follows:

Computer equipment 3 years

Software 3 years

Machinery and equipment 5 years

Furniture and fixtures 5 years

Leasehold improvements Shorter of useful life or remaining lease term

Amortization expense of assets acquired through finance leases is included in depreciation and amortization expense in the accompanying statements of operations and comprehensive loss. Costs of repairs and maintenance that do not extend the useful life or improve the related assets are expensed as incurred. Costs of major replacements or improvements are capitalized. When assets are sold, or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operating expense.

Leases

The Company’s operating lease relates to office and laboratory space at its headquarters. The Company’s finance leases are for certain equipment related to the Company’s information technology infrastructure and laboratory operations. The Company determines if an arrangement is a lease at inception. The Company has elected not to separate lease components from non-lease components for all classes of leased assets except for building leases.

The Company elected to treat leases with lease terms of 12 months or less as short-term leases. No right-of-use assets or lease liabilities are recognized for short-term leases. For leases with a lease term greater than 12 months, right-of-use assets and lease liabilities are recognized on the balance sheets at the commencement date based on the present value of the remaining lease payments and includes only payments that are fixed and determinable at commencement. The Company’s lease terms may include options to extend or terminate when it is reasonably certain that the Company will exercise such options.

To date, the rates implicit in the Company’s finance leases have been determinable, and the Company uses those rates to calculate the present value of its finance lease liabilities. The implicit rate in the Company’s operating lease is not readily determinable. As such, the Company uses its incremental borrowing rate to calculate the present value of its operating lease liabilities.

Operating lease costs are recognized on a straight-line basis over the lease terms. Finance lease assets are amortized on a straight-line basis over the shorter of the estimated useful lives of the assets or the lease terms.

Deferred Revenue

The Company recognizes deferred revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Deferred revenue is recognized when a customer pays consideration, or the Company has a right to an amount of consideration that is unconditional before the Company transfers the good or service to the customer. The Company’s deferred revenue balance as of December 31, 2024 and 2023 relates to certain contractual minimum payments received by the Company as part of its commercial collaboration agreements. Deferred revenue is recognized as revenue when the Company delivers PreTRM test results to customers pursuant to its commercial collaboration agreements. The Company assesses its deferred revenue balance for current versus long-term classification based on expectations and the ability to meet performance obligations. As of December 31, 2024, the Company believes it has the ability and capacity to meet all performance obligations under its commercial collaboration agreements and has concluded to classify its deferred revenue as a current asset.

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Revenue Recognition

Revenue is generated from the sale of PreTRM tests. The Company recognizes revenue based on accounting standards applied to determine the measurement of revenue and timing of when it is recognized. The Company applies the following five-step approach as set forth under ASC 606: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company applies the five-step model when it is probable that the Company will collect the consideration it is entitled to in exchange for fulfilling its performance obligation. The Company recognizes revenue upon delivery of test results, which it considers to be the only performance obligation, and allocates all of the transaction price to this performance obligation.

In determining the transaction price, which is an estimate of the amount of variable consideration expected to be received, the Company uses the expected value method under ASC 606. The Company considers all reasonably available information to identify various possible consideration amounts and considers the probability of the variable consideration for each scenario. The Company’s estimate of transaction price does not include any estimated amount of variable consideration that is constrained.

Significant judgments are required in determining the estimates for each transaction. These estimates include many assumptions, any of which, if incorrect, could result in significant differences between the estimated price and the amount ultimately collected for any given transaction. The Company applies this method consistently to portfolios of similar contracts when estimating the effect of any uncertainty on the amount of variable consideration to which it will be entitled. In the aggregate, across the numerous transactions within each portfolio, these differences can lead to material variances between estimated and actual revenue in any given period.

The estimate of revenue is necessarily founded on assumptions of payer behavior such as changes in payer mix, payer collections, current customer contractual requirements, and experience with ultimate collection from third-party payers and patients. Each of these aspects of payer behavior (and various others) can change significantly from period to period, and the Company currently has limited experience with historical payment patterns. Each of these contributes to the potential variability between estimated transaction price and actual consideration received as discussed above, which is expected to be more pronounced early in the process of commercializing a diagnostic test.

The Company makes its best efforts to continually refine its estimates of expected consideration as the Company gains additional experience with collections and historical payment patterns. Accordingly, the Company may update its estimate of the amount of revenue to be recognized for previously delivered tests.

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 the Company’s lab personnel, materials and supplies, equipment and infrastructure expenses associated with clinical testing, and allocated overhead including rent and equipment depreciation. Costs associated with performing the Company’s tests are recorded as the tests are processed regardless of whether and when revenue is recognized with respect to such tests.

Research and Development Expenses

The Company expenses all research and development costs as they are incurred. Research and development expenses consist primarily of personnel costs, stock-based compensation charges, clinical trial costs, and third-party contracted services associated with research and development. The Company recognizes expense associated with third-party contracted services based on the completion of activities as specified in the applicable contracts. Costs incurred under contracts with clinical sites are generally accrued as patient encounters occur, consistent with the terms outlined in the associated contract. Upon termination of contracts with third parties, the Company’s obligations are limited to costs incurred or committed to date. As a result, accrued research and development expenses represent the estimated contractual liability to third parties at the reported period.

Stock-based Compensation

The Company recognizes stock-based compensation for all stock-based awards in accordance with ASC 718, Compensation-Stock Compensation, which requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.

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The fair value of restricted stock units granted under the Company’s equity incentive plans is measured based on the grant-date fair value of the Company’s Class A common stock.

The fair value of stock options granted under the Company’s equity incentive plans is estimated using the Black-Scholes option pricing model. Input assumptions used in calculating the fair value of stock options 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.

The fair value of the Company’s Class A common stock is determined by using the closing price per share of the Company’s Class A common stock as reported on Nasdaq. The Company uses the simplified calculation of expected life since the Company does not have sufficient historical exercise data to estimate the expected term. Volatility is based on an average of the historical volatility of the Company’s common stock and the volatilities of the common stock of select comparable publicly-traded entities with characteristics similar to those of the Company. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. Forfeitures are estimated at the time of grant based on the Company’s historical experience and are adjusted as necessary.

The fair value of equity awards is recognized as compensation cost on a straight-line basis by the Company over the participant’s requisite service period, which is the award’s vesting period. All stock-based compensation costs are classified in the statements of operations and comprehensive loss based upon the underlying participant’s role within the Company.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying statements of operations and comprehensive loss. Any accrued interest and penalties related to uncertain tax positions will be reflected as a liability in the balance sheets.

Retirement Savings Plan

The Company sponsors a safe harbor 401(k) plan that covers all of the Company’s eligible employees. The plan allows employees to make contributions up to a specified percentage of their compensation, subject to statutory limitations. The Company makes safe harbor matching contributions equal to 100% of the first 3% of a plan participant’s eligible compensation, plus 50% of the next 2% of a plan participant’s eligible compensation. The Company may also make an additional discretionary match or profit sharing contribution to the plan. The Company recorded expense related to its 401(k) plan of $0.4 million and $0.6 million for the years ended December 31, 2024 and 2023, respectively.

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Segments

The Company operates as one operating segment, which is developing and commercializing its medical diagnostic products and services. The Company’s Chief Operating Decision Maker ("CODM"), its chief executive officer, assesses performance for the Company’s one operating segment and allocates resources based on net loss, consistent with what is reported on the statements of operations and comprehensive loss. The CODM also assesses the performance of the Company’s one operating segment by using operating expenses to monitor budget versus actual results.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segments Disclosures, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. While ASU 2023-07 requires incremental disclosures, it does not change how an entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine reportable segments. This ASU is effective for all public business entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Entities must adopt the changes to the segment reporting guidance on a retrospective basis. The Company adopted this standard effective January 1, 2024 and retrospectively to all prior periods. The adoption impacted the Company's disclosures and did not impact the financial statements. See Note 16 — Segment Information, for disclosures related to the Company’s single operating segment.

Comprehensive Loss

Comprehensive loss consists of net loss and other gains and losses affecting stockholders’ equity that, under U.S. GAAP, are excluded from net loss. For the years ended December 31, 2024 and 2023, comprehensive loss includes unrealized gains (losses) on the Company’s available-for-sale debt securities.

Net Loss per Share

Basic net loss per share is calculated by dividing net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, stock options and warrants to purchase common stock are considered to be potentially dilutive securities. For periods in which the Company reports a net loss, all potentially dilutive shares are anti-dilutive and are therefore excluded from the calculation of diluted net loss per share.

The Company has two classes of common stock and calculates net loss per share using the two-class method. The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A and Class B common stock are identical, except with respect to voting and conversion. The undistributed earnings for each period are allocated based on the contractual participation rights of the Class A and Class B common shares as if the earnings for the period had been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis and the resulting amount per share for Class A and Class B common stock was the same for the years ended December 31, 2024 and 2023.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid by jurisdiction. The ASU is effective for public business entities’ annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance on its financial statements.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (ASC Subtopic 220-40) - Disaggregation of Income Statement Expenses, which enhances the transparency and comparability of financial statements by requiring companies to disclose more granular information about expense components. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its financials statements and related disclosures.

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Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (a) no longer an emerging growth company or (b) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

3.Cash, Cash Equivalents and Marketable Securities

The Company has classified its marketable securities as available-for-sale. The Company’s cash, cash equivalents and marketable securities by major security type as of December 31, 2024 and 2023 were as follows (in thousands):

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

Cash and cash equivalents:

Total cash and cash equivalents 4,043 — — 4,043

Current marketable securities:

Long-term marketable securities:

Municipal debt securities 3,072 — — 3,072

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

Cash and cash equivalents:

Total cash and cash equivalents 3,880 — — 3,880

Current marketable securities:

Long-term marketable securities:

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The following tables summarize the Company’s available-for-sale debt securities and cash equivalents with unrealized losses as of December 31, 2024 and 2023, aggregated by major security type and the length of time that individual securities have been in a continuous loss position (in thousands):

Less than 12 months 12 months or greater Total

Commercial paper $ 1,446 $ (3 ) $ — $ — $ 1,446 $ (3 )

Corporate debt securities 4,059 (5 ) — — 4,059 (5 )

Less than 12 months 12 months or greater Total

Commercial paper $ 5,453 $ (2 ) $ — $ — $ 5,453 $ (2 )

Corporate debt securities 1,153 (2 ) — — 1,153 (2 )

As of December 31, 2024 and 2023, the Company had not recorded any allowance for credit losses related to its available-for-sale securities. The Company attributes the declines in the fair value of its available-for-sale securities to normal market and interest rate fluctuations. The declines in fair value are not attributed to declines in credit quality. The Company does not intend to sell investments while they are in an unrealized loss position and does not believe that it is more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. All of the Company’s investments mature in less than three years.

During the year ended December 31, 2024, the Company received approximately $5.0 million in proceeds from the sale of available-for-sale securities prior to maturity. There was an immaterial amount of gross realized losses on the sales. The Company sold the securities in order to reinvest the funds at improved rates. The Company did not sell any available-for-sale securities prior to maturity during the year ended December 31, 2023.

The Company’s marketable securities classified by contractual maturities as of December 31, 2024 were as follows (in thousands):

Amortized Cost Fair Value

Due after one year through five years 22,001 21,973

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4. Property and Equipment

The following table presents the components of property and equipment, net, as of December 31, 2024 and 2023 (in thousands):

December 31,

Less accumulated depreciation and amortization (7,756 ) (7,022 )

Property and equipment, net $ 1,239 $ 1,999

Depreciation and amortization expense was $0.8 million and $0.9 million for the years ended December 31, 2024 and 2023, respectively.

5. Intangible Assets, net

The following table summarizes intangible assets (in thousands):

Gross Carrying Amount Accumulated Amortization Net Carrying Amount

Indefinite-lived intangible assets:

Definite-lived intangible assets:

Software developed for sale 348 (19 ) 329

During the year ended December 31, 2024, the Company acquired domain names resulting in capitalized intangible assets of approximately $0.7 million. The Company determined that the domain names have an indefinite useful life and are therefore not subject to amortization. The Company assesses its intangible assets for impairment annually, or more frequently if circumstances dictate. No indefinite-lived intangible asset impairment charges were recorded during the year ended December 31, 2024.

During the year ended December 31, 2024, the Company capitalized approximately $0.3 million of costs associated with software developed for sale. The software was placed in service in November 2024 and is being amortized on a straight-line basis over a three-year useful life. Amortization expense was $19 thousand for the year ended December 31, 2024, and is recorded in cost of revenue.

6. Accrued and Other Current Liabilities

The following table presents the components of accrued and other current liabilities as of December 31, 2024 and 2023 (in thousands):

December 31,

Accrued 401(k) matching contributions — 74

Operating lease liability, current portion 644 578

Other current liabilities 296 926

Total accrued and other current liabilities $ 2,384 $ 2,722

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7. Other Income, Net

The following table presents the components of other income, net, for the years ended December 31, 2024 and 2023 (in thousands):

Year Ended

December 31,

8. Fair Value Measurements

As of December 31, 2024 and 2023, the carrying amounts of the Company’s receivables, prepaid and other current assets, accounts payable, and accrued and other current liabilities approximate their fair values, principally due to the short-term nature of the assets and liabilities. The recorded values of the finance leases approximate fair value as the interest rates approximate market interest rates.

Money market funds are highly liquid investments and are actively traded. The pricing information on money market funds is readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.

U.S. government agency bonds, U.S. government bonds, commercial paper, and corporate debt securities are measured at fair value using Level 2 inputs. The Company reviews trading activity and pricing for these investments as of each measurement date.

The Company follows a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy are as follows:

Level 1 inputs are observable, quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date.

Level 2 inputs are observable inputs other than quoted prices included in Level 1 that are observable either directly or indirectly or quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 inputs are unobservable inputs in which there is little or no market data, which require the Company to develop its own assumptions.

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The following table shows the Company’s assets measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands) as of December 31, 2024:

Level 1 Level 2 Level 3

Assets:

Cash equivalents:

Money market funds $ 2,060 $ — $ —

Marketable securities:

Commercial paper — 1,446 —

Corporate debt securities — 42,882 —

Municipal debt securities — 3,072 —

U.S. federal agency securities — 12,263 —

U.S. government securities — 4,503 —

The following table shows the Company’s assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands) as of December 31, 2023:

Level 1 Level 2 Level 3

Assets:

Cash equivalents:

Money market funds $ 1,272 $ — $ —

Marketable securities:

Commercial paper — 11,773 —

Corporate debt securities — 18,192 —

U.S. federal agency securities — 28,958 —

U.S. government securities — 17,117 —

9. Related Party Transactions

In June 2019, the Company entered into a master services agreement with Carelon Research, a subsidiary of Elevance Health, Inc. (“Elevance Health”). This agreement covers a range of research projects, including Carelon Research’s role as a contract research organization for the Prematurity Risk Assessment Combined With Clinical Interventions for Improving Neonatal outcoMEs (“PRIME”) study. The Company paid fees related to this agreement of $2.9 million and $4.0 million for the years ended December 31, 2024 and 2023, respectively, which were recorded in research and development expenses in the Company’s statements of operations and comprehensive loss. In November 2020, the Company entered into a Laboratory Services Agreement with Elevance Health related to the PRIME study. This agreement provides a contracted rate for certain tests performed pursuant to the study. In December 2023, enrollment in the PRIME study was stopped due to efficacy, and as such, there was an immaterial amount of revenue recognized related to this agreement for the year ended December 31, 2024. The Company recognized revenue related to this agreement of $61 thousand for the year ended December 31, 2023.

In February 2021, the Company entered into a commercial collaboration agreement with Elevance Health and its affiliates (the “Commercial Collaboration Agreement”). The Commercial Collaboration Agreement provides defined payment within a defined period for use of the PreTRM test within Elevance Health’s network of covered members. Pursuant to the Commercial Collaboration Agreement, Elevance Health agreed to purchase a certain minimum number of tests for each of the first three years of the term of the agreement. Additionally, Elevance Health agreed to pay a certain minimum amount per year for the first three years of the term of the Commercial Collaboration Agreement. The Company received $11.2 million during the year ended December 31, 2024, which amount related to the minimum payments for the year ended December 31, 2023. Such minimum payments were initially recorded as deferred revenue. Deferred revenue is recognized as revenue when the Company delivers PreTRM test results to Elevance Health patients pursuant to the Commercial Collaboration Agreement. The Company also agreed to develop a sales, marketing, and customer service program, and to provide training and marketing to duly licensed physicians specializing in obstetrics and gynecology or family medicine, or licensed nurse midwives, at the reasonable request of Elevance Health.

Elevance Health has been participating in the Company’s PRIME study and at the conclusion of the PRIME study, under the Commercial Collaboration Agreement, the parties agreed to use commercially reasonable efforts to enter into Elevance Health’s standard lab provider agreement. Unless earlier terminated due to breach, the Commercial Collaboration Agreement

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will remain in effect until the later of (a) the third anniversary of the effective date or (b) the date on which Elevance Health has purchased a fixed number of PreTRM tests as agreed by the parties.

The Commercial Collaboration Agreement with Elevance Health is considered to be within the scope of ASC Topic 808, Collaborative Arrangements (“ASC 808”), as the parties are active participants and exposed to the risks and rewards of the collaborative activity. The Company determined the PreTRM tests to be a performance obligation for which Elevance Health is a customer and a unit of account within the scope of ASC 606. The associated transaction price is based on the contractual minimum number of tests and the agreed upon defined payment amount per test. The transaction price was allocated to this single performance obligation, which will be recognized upon delivery of test results expected to occur over the term of the agreement. All other items promised to Elevance Health are immaterial in the context of the Commercial Collaboration Agreement. There were no material revenues related to the Commercial Collaboration Agreement for the years ended December 31, 2024 and 2023.

10. Capital Structure

Common Stock

The Company has two authorized classes of common stock, Class A and Class B. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote and shares of Class B common stock are non-voting. Each share of Class B common stock may be converted at any time to one share of Class A common stock at the option of its holder, subject to the ownership limitations provided for in the Company’s amended and restated certificate of incorporation.

In August 2024, the Company entered into the 2024 Sales Agreement with respect to an at-the-market offering program with TD Cowen, which allows the Company to issue and sell shares of Class A common stock pursuant to the 2024 Form S-3 for total gross sales proceeds of up to $50.0 million from time to time through TD Cowen, acting as its agent. As of December 31, 2024, the Company has not sold any shares of Class A common stock under the 2024 Sales Agreement.

The following shares of Class A common stock were reserved for future issuance:

December 31,

Preferred Stock

The Company is authorized to issue up to 5,000,000 shares of preferred stock, par value $0.0001 per share. There were no preferred shares outstanding at December 31, 2024 and 2023.

11. Stock-Based Compensation

Equity Incentive Plans

In November 2011, the Company established the 2011 Employee, Director and Consultant Equity Incentive Plan (the “2011 Plan”) and reserved shares of the Company’s common stock for sale and issuance under the 2011 Plan. Options granted under the 2011 Plan generally vest over a four-year period and generally expire ten years from the date of grant. Options are exercisable only to the extent vested. The 2011 Plan terminated in November 2021, and accordingly, no additional shares are available for grant under the 2011 Plan. The 2011 Plan continues to govern outstanding awards granted under the 2011 Plan.

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The 2021 Equity Incentive Plan (the “2021 Plan”) was established in July 2021. The 2021 Plan provides for the grant of incentive and non-statutory stock options as well as other stock rights to employees, directors and consultants of the Company. Options generally vest over a four-year period, are exercisable only to the extent vested, and generally expire ten years from the date of grant. Restricted stock units (“RSUs”) generally vest over either a two-year or a four-year period. The 2021 Plan includes provisions for annual automatic increases to the number of shares of Class A common stock reserved for issuance under the 2021 Plan. In addition, any shares that otherwise would be returned to the 2011 Plan as a result of the expiration or cancellation of stock options may be added to the 2021 Plan. As of December 31, 2024, there were 2,071,498 shares of the Company’s Class A common stock that were available for future grants under the 2021 Plan.

The 2021 Employee Stock Purchase Plan (the “2021 ESPP”) was established in July 2021. The 2021 ESPP includes provisions for annual automatic increases to the number of shares of Class A common stock reserved for issuance under the 2021 ESPP. As of December 31, 2024, there were 1,060,293 shares of the Company’s Class A common stock that were available for future grants under the 2021 ESPP.

Stock Options

Unless otherwise noted, references to “options” in the subsequent disclosures, refers to the combined incentive and non-statutory stock options issued as employee and non-employee stock-based compensation, and authorized under the 2011 Plan and the 2021 Plan. The following table summarizes information about these options granted and outstanding:

Expired — —

The weighted-average grant date fair value of options granted during the years ended December 31, 2024 and 2023 was $5.54 and $2.28 per share, respectively. The total aggregate intrinsic value of options exercised during the years ended December 31, 2024 and 2023 was $5.5 million and $1.4 million, respectively. The total fair value of options vested for the years ended December 31, 2024 and 2023 was $3.7 million and $4.8 million, respectively.

The fair values calculated using the Black-Scholes option pricing model were estimated on each grant date using the following assumptions:

Year Ended

December 31,

Risk-free interest rate 4.1% - 4.2% 3.7% - 4.2%

Expected term (in years) 5.2 - 5.3 5.3 - 7.0

Expected dividend yield 0 % 0 %

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RSUs

The following table summarizes information about RSUs granted and outstanding under the 2021 Plan:

Number of Awards Weighted-AverageGrant Date FairValue

Stock-Based Compensation Expense

The following table presents the impact of stock-based compensation expense in the statements of operations for the periods indicated (in thousands):

Year Ended

December 31,

Research and development expense $ 2,502 $ 1,574

Sales and marketing expense 390 657

General and administrative expense 4,121 3,042

Total employee stock-based compensation $ 7,013 $ 5,273

The information about unrecognized stock-based compensation expense for outstanding unvested stock options and RSUs as of December 31, 2024 was as follows (in thousands, except years):

Total unrecognized stock-based compensation expense $ 5,074

12. Warrants

All outstanding common stock warrants were exercisable immediately when granted. All outstanding common stock warrants are exercisable for shares of Class A common stock. The Company’s common stock warrants outstanding were as follows:

Number of Warrants Outstanding as of:

During the year ended December 31, 2024, 126,258 common stock warrants were net exercised, resulting in the issuance of 7,971 shares of Class A common stock. Additionally, 3,473 common stock warrants expired unexercised during the year ended December 31, 2024.

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13. Commitments and Contingencies

Leases

The Company is the lessee in all of its lease arrangements. The Company did not enter into any leases with related parties during the presented periods. The Company makes assumptions and judgments when assessing contracts for lease components, determining lease classifications, and calculating right-of-use asset and lease liability values. These assumptions and judgments may include the useful lives and fair values of the leased assets, the implicit rate underlying the Company’s leases, the Company’s incremental borrowing rate or the Company’s intent to exercise or not exercise options available in lease contracts.

The following table shows right-of-use assets and lease liabilities, and the associated financial statement line items as of December 31, 2024 and 2023 (in thousands):

December 31,

Lease-Related Assets and Liabilities Financial Statement Line Items 2024 2023

Right-of-use assets:

Operating leases Other assets $ 613 $ 1,180

Finance leases Property and equipment, net 699 1,008

Total right-of-use assets $ 1,312 $ 2,188

Lease liabilities:

Operating leases Accrued and other current liabilities $ 644 $ 578

Operating lease obligation, net of current portion — 644

Finance leases Finance lease obligation, current portion 194 440

Finance lease obligation, net of current portion 2 196

Total lease liabilities $ 840 $ 1,858

Lease costs and other information consisted of the following (in thousands, except terms and rates):

Year Ended

December 31,

Lease cost

Finance lease cost:

Amortization of right-of-use assets $ 314 $ 312

Interest on lease liabilities 26 55

Other information

Finance leases:

Operating cash outflows $ 26 $ 55

Financing cash outflows $ 440 $ 466

Right-of-use assets obtained in exchange for lease liabilities $ — $ 18

Weighted-average remaining lease term (in years) 0.4 1.4

Weighted-average discount rate 6.7 % 6.5 %

Operating leases:

Operating cash outflows $ 646 $ 628

Right-of-use assets obtained in exchange for lease liabilities $ — $ —

Weighted-average remaining lease term (in years) 1.0 2.0

Weighted-average discount rate 7.5 % 7.5 %

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Future minimum lease payments for the Company’s leases as of December 31, 2024 were as follows (in thousands):

Operating Leases Finance Leases Total

2027 and thereafter — — —

Less: imputed interest (22 ) (3 ) (25 )

Present value of future lease payments 644 196 840

Long-term portion $ — $ 2 $ 2

Operating Leases

The Company leases a total of approximately 24,300 square feet of office and laboratory space under a single non-cancelable operating lease with a termination date of December 31, 2025 (as amended, the “Office Lease”). The Office Lease includes an early termination right which termination would occur under certain circumstances, as provided in the amended Office Lease, after July 1, 2024 if exercised. The Company is reasonably certain it will not exercise the termination right. The implicit rate provided in the Company’s operating lease is not readily determinable. As such, the Company uses its incremental borrowing rate to calculate the present value of its operating lease liabilities.

Finance Leases

The Company leases certain equipment related to its information technology infrastructure and laboratory operations. All of the Company’s current finance leases include bargain purchase options that the Company is reasonably certain to exercise. The Company has elected not to separate lease and non-lease components for its equipment leases. The rates implicit in the Company’s finance leases are determinable, and the Company uses those rates to calculate the present value of its finance lease liabilities.

Indemnification

The Company has agreed to indemnify its officers and directors for certain events or occurrences, while the officer or director is or was serving at the Company’s request in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company purchases director and officer insurance coverage that provides for corporate reimbursements of covered obligations that limits the Company’s exposure and enables it to recover a portion of potential future amounts paid. The Company is unable to reasonably estimate the maximum amount that could be payable under these arrangements since these obligations are not capped but are conditional to the unique facts and circumstances involved. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2024 and 2023. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements.

Employee Agreements

The Company has signed various employment agreements with key executives pursuant to which if their employment is terminated by the Company without cause or by the employees for good reason, or following a change of control of the Company, the employees are entitled to receive certain benefits, including severance payments, accelerated vesting of stock and stock options, and certain insurance benefits.

Legal Matters

The Company is not currently a party to any material litigation or other material legal proceedings. The Company 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 the Company’s future results of operations, cash flows, or financial position.

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14. Income Taxes

The Company has not recorded any income tax expense for the years ended December 31, 2024 and 2023 due to its history of operating losses.

The provision for income taxes includes the following components for the years ended December 31, 2024 and 2023 (in thousands):

Year EndedDecember 31,

Current:

Federal $ — $ —

State — —

Total current benefit (provision) $ — $ —

Deferred:

Total deferred benefit (provision) $ — $ —

Total income tax benefit (provision) $ — $ —

The benefit (provision) for income taxes differs from the amount computed at federal statutory rates as follows (in thousands):

Year Ended December 31,

State net operating loss carryforward true up — — % 154 0.42 %

Income tax benefit (provision) $ — — % $ — — %

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Significant components of the Company’s net deferred income tax assets (liabilities) are as follows (in thousands):

December 31,