BillionToOne, Inc.

(1)Description of Business

BillionToOne, Inc. (the “Company”, “we”, or “our”) was formed in 2016, and is headquartered in Menlo Park, California. The Company is a precision diagnostics company that quantifies biology to create molecular diagnostics. The Company’s proprietary molecular counting platform is designed to detect and measure DNA molecules at the single-count level to help improve disease detection. The Company currently applies the proprietary technology to non-invasive prenatal screening (“Prenatal”) and liquid biopsy (“Oncology”).

(2)Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Prior to April 2024, the financial statements also included the Company’s wholly owned subsidiary SeqIndia Labs Private Limited which had immaterial activities and was not material to these financial statements and was divested in April 2024. All intercompany transactions and balances have been eliminated upon consolidation.

The unaudited interim financial statements should be read in conjunction with the audited financial statements and the related notes thereto as of and for the year ended December 31, 2024, included in the Company's prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on November 6, 2025 (the “Final Prospectus”).

For a summary of the Company’s significant accounting policies refer to “Note 2. Summary of Significant Accounting Policies” in the notes to the financial statements as of and for the year ended December 31, 2024 included in the Final Prospectus. There have been no significant changes to these policies during the nine months ended September 30, 2025.

Unaudited interim financial information

The unaudited financial statements do not include all disclosures, including certain notes required by GAAP on an annual reporting basis. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements. In management’s opinion, the unaudited financial statements reflect all normal recurring adjustments necessary to state fairly the balance sheets, statements of operations and comprehensive income (loss), of redeemable convertible preferred stock and stockholders’ deficit, and of cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On a regular basis, management evaluates estimates, including, but not limited to: the fair value of common stock, stock-based compensation, deferred tax assets and liabilities, useful lives of long-lived assets, the incremental borrowing rate applied to operating and finance leases, determination of revenue recognition and accounts receivable, the valuation of warrants for common stock and warrants for redeemable convertible preferred stock, and valuation of debt and convertible notes. These estimates are inherently subject to judgment and actual results could differ from those estimates.

Risks and Uncertainties

Certain of the Company’s product candidates are in development. If the Company is unable to advance its product candidates through development, clinical validation and ultimately commercialize its product candidates, or experiences significant delays in doing so, the Company’s business will be materially harmed. Even if the Company completes the necessary validation studies and product development, the process to meet any applicable regulatory requirements can be expensive. As a result, the Company cannot predict when, or if, it will be able to commercialize a product candidate.

The Company is subject to certain risks and uncertainties that the Company believes could have a material adverse effect on its future financial position or results of operations. As of the date of issuance of the financial statements, the Company is not aware of any specific event or circumstance that would require it to update its estimates, judgments, or the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained and are recognized in the financial statements as soon as they become known. Actual results could differ from those estimates, and any such differences may be material to the Company’s financial statements.

The Company is subject to regulation and enforcement by the federal government and by authorities in state and foreign jurisdictions in which the Company conducts business. Such laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, privacy and security laws and regulations. If the Company’s operations are found to be in violation of any such laws or government regulations that apply to use, the Company may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of operations and exclusion from participation in federal and state healthcare programs.

Revenue

The Company recognizes revenue upon transfer of control of promised goods and services in an amount that reflects the consideration it expects to be entitled to receive in exchange for those goods and services. Under ASC 606—Revenue from Contracts with Customers (ASC 606), the Company applies the following five-step approach:

•Identify the contract with a customer

•Identify the performance obligations in the contract

•Determine the transaction price

•Allocate the transaction price to the performance obligations in the contract

•Recognize revenue when, or as, a performance obligation is satisfied

The Company generates revenue primarily from prenatal and oncology testing services, which are referred to as testing services or test results. The Company considers the patient as its customer, that requests a test service through their physician. Test results are the single performance obligation being provided to customers. Testing service revenue is recognized at a point in time when test results are delivered to the ordering physician. The Company generally bills an insurance carrier, Medicaid, Medicare, or a patient or a combination of both upon delivery of test results.

The Company enters into contracts with third-party payors, including insurance carriers and Medicaid, to set the pricing for tests provided to patients. Due to the nature of these third-party payor contract arrangements, the total consideration the Company expects to collect for test results is variable as they are dependent on the terms negotiated with the third-party payor. The predominance of the Company’s revenue is derived from payments by third-party insurance carriers.

The Company uses the expected value method of estimating variable consideration. The total consideration the Company expects to collect in exchange for the Company’s products is an estimate and is largely variable in nature. Consideration includes reimbursement from both patients and third-party payors. The Company establishes variable consideration by considering historical payment trends for tests delivered, test reimbursement disallowances, and contractual arrangements in place, among other factors, which is adjusted for current expectations. Current expectations of cash collections factor in changes in reimbursement rate trends, historical events not expected to recur, and future known changes such as anticipated contractual pricing changes or changes to insurance coverage. The Company also considers hindsight, where applicable, in estimates established for variable consideration and updates those estimates when actual experience supports doing so. In establishing variable consideration, the Company considers payors with similar reimbursement characteristics together. The Company monitors the cash collections against the estimated variable consideration over the expected cash collection period and any difference is recognized as an adjustment to estimated revenues after such estimated cash collection period has closed.

In January 2023, the Company entered a partnership with Johnson & Johnson under which the Company is licensing the Company’s proprietary knowledge, performing clinical trial support services including developing a clinical study assay, and other testing services to support a clinical trial for the counterparty. The Company concluded that the agreement with Johnson & Johnson was within the scope of ASC 606 because the counterparty in the agreement meets the definition of a customer. The Company evaluated the terms of the agreement for revenue recognition, including whether the services are capable of being distinct and considered distinct within the context of the contract. The Company concluded that the licensing of the know how is not distinct from the other promises within the agreement and, as a result, was treated as a single performance obligation. Under this contract the Company receives payments upon the achievement of milestones, including (i) receipt of approval of the trial, which was achieved in 2023, (ii) various patient enrollment milestones, and (iii) subsequent full trial completion, as well as reimbursement for testing services. In making assessment of whether variable consideration should be included in the transaction price, the Company considers the degree of complexity and uncertainty associated with each milestone and related testing services, and whether achievement of the milestones and testing services are dependent on parties other than the Company.

In July 2025, the Company entered into a partnership with Johnson & Johnson for the development and commercialization of a companion diagnostic (CDx), intended for use with a new drug candidate of Johnson & Johnson. The Company is providing services related to regulatory filings to support companion diagnostic submissions for the Company’s assay. The development and regulatory support services represent a single performance obligation as the Company performs a significant integration service, such as analytical validation and regulatory submissions. The individual promises are not separately identifiable from other promises in the contract, and therefore, not distinct. The Company generates revenue from achievement of milestones, including (i) various CDx development milestones, (ii) FDA regulatory submission and pre-approval, and (iii) CDx approval by FDA. For the companion diagnostic development and regulatory approval performed, the Company is compensated through a combination of an upfront fee and performance-based, non-refundable regulatory and development milestones. The transaction price represents variable consideration and the Company uses the most likely amount to estimate variable consideration. Application of the constraint for variable consideration to milestone payments is an area that requires significant judgment. The Company evaluates factors such as the scientific, clinical, regulatory, and other risks that must be managed to achieve the respective milestone and the level of effort and investment required to achieve the respective milestone. In making this assessment, the Company considers its historical experience with similar milestones, the degree of complexity and uncertainty associated with each milestone, and whether the achievement of the milestone is dependent on parties other than the Company. The constraint for variable consideration is applied to the contract price such that it is probable a significant cumulative reversal of revenue will not occur when the uncertainty associated with the contingency is resolved. Application of the constraint for variable consideration is assessed and updated at each reporting period as a revision to the estimated transaction price.

The Company recognizes revenue for the single performance obligation for the J&J partnership agreements over the period the services are provided. Specifically, the Company recognizes revenue using an input method to measure progress, utilizing costs incurred to-date relative to the total expected costs as a measure of progress. The Company assesses the changes to the total expected cost estimates in determining the revenue recognition for each reporting period.

The Company applies the practical expedient not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. As of September 30, 2025, the Company’s remaining performance obligations beyond one year were approximately $4.7 million.

Disaggregation of revenue

The following table presents disaggregation of revenue by Prenatal, Oncology and Clinical trial support and other services for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Substantially all revenues recognized for the three and nine months ended September 30, 2025 and 2024 were generated in the United States.

Deferred revenue

Deferred revenue, which is a contract liability, consists of billings or cash received for services in advance of revenue recognition and is recognized as revenue when all the Company’s revenue recognition criteria are met. As of September 30, 2025 and December 31, 2024, the deferred revenue balance was $2.7 million and $2.8 million, respectively, all of which is considered short-term. For the three months ended September 30, 2025 and 2024 and nine months ended September 30, 2025 and 2024, revenue recognized from deferred revenue at the beginning of the period was $0.6 million, $0.7 million, $2.1 million, and $3.0 million, respectively.

Comprehensive Income (Loss)

During the three months ended September 30, 2025 and 2024 and nine months ended September 30, 2025 and 2024, the Company did not have any other comprehensive income (loss) and, therefore, the net income (loss) and comprehensive income (loss) was the same.

Deferred Offering Costs

Deferred offering costs, consisting of legal, accounting, and other fees and costs relating to the Company’s initial public offering (IPO) are capitalized within other non-current assets on the balance sheets. The deferred offering costs will be offset against the proceeds received by the Company upon the closing of the IPO. As of September 30, 2025, the Company had $3.7 million of deferred offering costs. As of December 31, 2024, the Company hadno deferred offering costs.

Segment information

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and assess performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on a company-wide basis to make operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it is managed asone operating segment andone reportable segment.

Key areas of focus for the CODM when making decisions on the allocations of resources is cash used in operations as well as revenue, gross margin and net income (loss); this information is used by the CODM and compared to budgeted amounts in order for the CODM to make decisions on how resources should be allocated across the organization. The Company’s segment measure of profitability is net income (loss).

Segment revenues are derived from prenatal and oncology testing results, leveraging the Company’s diagnostic technology platform, which are delivered to patients, who are the Company’s customer. The Company’s customers are predominantly located in the United States. Substantially all of the Company’s long-lived assets are located in the United States. The Company’s technology platform is applied similarly in both the prenatal and oncology settings.

The financial statements provide the CODM with a view of the Company’s financial condition as it pertains to the Company’s assets, liabilities and expenses. Significant expense categories align with the expense categories and amounts presented on the statements of operations.

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 (“ASU 2023-09”), which expands income tax disclosure requirements to include additional information related to the rate reconciliation of effective tax rates to statutory rates, as well as additional disaggregation of taxes paid. This ASU also removed disclosure related to certain unrecognized tax benefits and deferred taxes. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. This ASU may be applied prospectively or retrospectively, and early adoption is permitted. The Company is currently evaluating this ASU to determine the impact it may have on its financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-04, Debt – Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. This ASU clarifies guidance on the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishment. This guidance is effective for the Company beginning on January 1, 2026, and early adoption is permitted, although the Company does not plan to early adopt. The Company is currently evaluating the impact of the adoption of this standard on the Company’s financial statement disclosures.

In November 2024 and January 2025, the FASB issued ASU 2024-03 and ASU 2025-01, respectively, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure in the notes to the financial statements of specified information about an entity’s certain costs and expenses. The amendments to the standards are effective for the Company’s fiscal year beginning January 1, 2027 and interim periods beginning January 1, 2028. Early adoption is permitted. The amendments should be applied either prospectively to the financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating this ASU to determine the impact it may have on its financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides for a practical expedient to estimate credit losses related to accounts receivable and contract assets from revenue contracts accounted for in accordance with ASC 606 using information as of the balance sheet date. This ASU is effective for the Company’s fiscal year beginning January 1, 2026 and early adoption is permitted. The Company is currently evaluating this ASU to determine the impact it may have on its financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which clarifies and expands the existing guidance on capitalizing implementation costs for cloud computing arrangements that are service contracts. The new guidance is effective for public business entities for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating this ASU to determine the impact it may have on its financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-07, Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract, which amends the guidance under ASC Topic 815 (Derivatives and Hedging) and ASC Topic 606 (Revenue from Contracts with Customers). The ASU (i) refines the scope for derivative accounting to exclude certain non-exchange-traded contracts whose underlyings are based on the operations or activities specific to one of the parties to the contract, and (ii) provides clarification on how to account for share-based noncash consideration from customers (such as equity instruments, warrants, or shares) received in exchange for the transfer of goods or services under a revenue contract. The new guidance is effective for public business entities for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating this ASU to determine the impact it may have on its financial statements and related disclosures.

(3)Fair Value Measurements

The fair value measurements of assets and liabilities that are measured at fair value on a recurring basis consisted of the following as of September 30, 2025 (in thousands):

The fair value measurements of assets and liabilities that are measured at fair value on a recurring basis consisted of the following as of December 31, 2024 (in thousands):

Level 3 instruments consist of the Company’s Series A-6 redeemable convertible preferred stock warrant liabilities, common stock warrant liabilities, a term loan and convertible notes.

The fair values of the Series A-6 redeemable convertible preferred stock warrant and common stock warrant are measured using a probability weighted option pricing model.

The significant assumptions used in preparing the option pricing model for valuing the common stock warrant liability as of September 30, 2025 and December 31, 2024, are as follows:

The significant assumptions used in preparing the option pricing model for valuing the redeemable convertible preferred stock warrant liability as of September 30, 2025 and December 31, 2024, are as follows:

The fair value of the convertible notes is measured based on the present value of the notes based on the fair market yield to maturity and an estimate of the probability of the notes’ conversion features. The fair market yield was estimated based on publicly traded debt securities with similar maturities and risk. During the nine months ended September 30, 2024, the Company settled the convertible notes through the issuance of Series C-1 redeemable convertible preferred stock to the noteholders (See Note 7).

The significant assumptions used in preparing discounted cash flow for valuing the convertible notes as of right before the conversion date of May 15, 2024, are as follows:

In August 2024, the Company entered into a new term loan agreement for which the Company elected to account for using the fair value option. As such, the fair value of the debt is calculated by using the probability weighting of the present value of settlement scenarios (See Note 8).

The significant assumptions used in preparing the income approach model for valuing the new term loan as of September 30, 2025 and December 31, 2024, are as follows:

The common stock warrants, redeemable convertible preferred stock warrants, convertible notes and term loan are all classified as Level 3 fair value measurements due to the lack of relevant observable market data for the respective fair value inputs for each instrument.

The following tables present a summary of the changes in the fair value of the Company’s Level 3 financial instruments (in thousands):

For the three months ended and nine months ended September 30, 2025 and 2024, the Company recognized losses related to the change in the fair value of the common stock warrant liability and redeemable convertible preferred stock warrant liability in other expense, net in the statements of operations and comprehensive income (loss). The Company will continue to recognize changes in the fair value of the common stock warrant liability and redeemable convertible preferred stock warrant liability until the warrants are exercised, expire, or qualify for equity classification.

For the nine months ended September 30, 2024, the Company recognized losses related to the change in the fair value of convertible notes in change in fair value of convertible notes in the statements of operations and comprehensive income (loss). During the nine months ended September 30, 2024, the convertible notes were settled in Series C-1 Redeemable Convertible Preferred Stock which was accounted for as a debt extinguishment as the settlement was not pursuant to the original conversion terms. The Company recorded a gain on extinguishment in net gain on extinguishment of debt in the statements of operations and comprehensive income (loss) upon the conversion date (See Note 7).

For the three months ended September 30, 2025 and 2024 and the nine months ended September 30, 2025 and 2024, the Company recognized a loss related to the change in fair value of the term loan in change in fair value of term loan in the statements of operations and comprehensive income (loss).

The common stock warrant liability and redeemable convertible preferred stock warrant liabilities are recorded within other non-current liabilities on the balance sheets as of September 30, 2025 and December 31, 2024. The term loan is recorded within long-term debt on the balance sheet as of September 30, 2025 and December 31, 2024.

The Company recognizes transfers among Level 1, Level 2 and Level 3 classifications as of the actual date of the events or change in circumstances that caused the transfers. During the three and nine months ended September 30, 2025 and 2024, the Company had no transfers of financial assets or liabilities between different levels of the fair value hierarchy.

(4)Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

(5)Redeemable Convertible Preferred Stock

As of September 30, 2025 and December 31, 2024, redeemable convertible preferred stock consisted of the following (in thousands, except for share data):

(6)Commitments and Contingencies

Legal Proceedings

From time to time, the Company is party to certain claims in the ordinary course of business. The Company, in conjunction with its legal counsel, assesses the need to record a liability for litigation or contingencies. A liability is recorded when and if it is determined that such a liability for litigation or contingencies is both probable and the amount can be reasonably estimated. The Company believes that it is not presently a party to any litigation of which the outcome, if determined adversely, would individually or in the aggregate be expected to have a material and adverse effect on the business, operating results, cash flows, or financial position. Legal fees are expensed in the period in which they are incurred.

Indemnification Agreements

The Company has entered into indemnification agreements with its directors and officers against any liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual.

Additionally, in the ordinary course of business, the Company enters into agreements of varying scope and terms pursuant to which it agrees to indemnify customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. As of September 30, 2025 and December 31, 2024, no demands have been made upon the Company to provide indemnification under such agreements, and there are no claims that the Company is aware of that could have a material adverse effect on its financial position, results of operations, or cash flows. Accordingly, the Company has no liabilities recorded for these agreements as of September 30, 2025 and December 31, 2024.

(7)Convertible Notes

In September 2022, the Company entered into a Note Purchase Agreement for unsecured Convertible Promissory Notes (the “Notes”) to several note holders (the “Note Holders”) with a principal sum of $30.0 million together with interest thereon from the date of the Notes. The Notes accrue interest at a rate of 8.0% per annum, simple interest. The Notes were scheduled to mature on September 20, 2024, and the Company may not make prepayments without written consent of the majority Note holders.

During May 2024, concurrent with the issuance of Series D redeemable convertible preferred stock, and pursuant to negotiation with the Note Holders, the Company and Note Holders agreed to settle the Notes through the issuance of Series C-1 redeemable convertible preferred stock to the Note Holders instead of Series D redeemable convertible preferred stock. The Notes converted into an aggregate of 1,726,823 shares of Series C-1 redeemable convertible preferred stock at a conversion price of approximately $19.6143 per share. The change in terms of the Notes was accounted for as a debt extinguishment as the settlement was not pursuant to the original conversion terms. Immediately prior to the extinguishment, the Company recorded a mark-to-market adjustment for the Notes resulting in a loss of $0.8 million for the nine months ended September 30, 2024 which was recorded to change in fair value of convertible notes in the Company’s statements of operations and comprehensive income (loss). Upon extinguishment, the Company derecognized the Notes on the balance sheets at their fair value immediately prior to the extinguishment of $48.5 million. The difference of $8.6 million between the fair market value of the Series C-1 redeemable convertible preferred shares received by the Note Holders of $39.9 million and the fair value of the Notes immediately prior to the extinguishment was recorded as a gain on debt extinguishment in the Company’s statements of operations and comprehensive income (loss) for the nine months ended September 30, 2024.

(8)Long-term Debt

Oberland Note Purchase Agreement

In August 2024, the Company entered into a note purchase agreement (the “2024 Notes”) with BWCB SA LLC, an entity affiliated with Oberland Capital Management, LLC (“Oberland Capital”), which provided the Company with up tofour tranches of capital advances totaling up to $140.0 million. The advanced principal accrues interest at a rate of 8.0% per annum. The first tranche of $50.0 million was advanced on August 5, 2024, with a Maturity Date on the seventh anniversary of the first purchase date (August 5, 2031). The first tranche requires interest-only payments through August 5, 2031 and a lump sum payment due on August 5, 2031.

The second tranche of up to $35.0 million in principal was available at the Company’s option at any time prior to September 30, 2025 provided that the trailing six-month worldwide net revenue of the Company is at least $80.0 million. The Company did not elect the option to draw on the second tranche.

The Company is required to sell the third tranche of notes in the amount of $30.0 million prior to March 31, 2026 as the Company achieved the revenue and gross margin thresholds triggering this obligation during the first half of fiscal 2025. The thresholds triggering this tranche are trailing six-month revenue of at least $112.5 million and a trailing six-month gross margin of at least 45%. Gross Margin is defined as (I) net revenue minus cost of goods sold divided by (II) net revenue, expressed as a percentage. The terms of the third tranche are identical to those of the first $50 million tranche. Lastly, the fourth tranche of up to $25.0 million in principal will be made available to the Company at the mutual agreement of the parties at any time prior to March 31, 2026.

The Company has the option at any time to prepay all of the then-outstanding notes, and Oberland Capital has the option to redeem the notes upon (i) a change in control of the Company, (ii) an event of default, or (iii) the maturity date. The redemption price of the note shall equal to the following: (1)130% of principal amounts of notes if the payment is made within 24 months of issuance; (2)145% of principal amounts of notes if the payment is made within 36 months of issuance; (3) If the payment is made within 48 months, an amount that would generate an internal rate of return (“IRR”) of 12.25%; (4) if the payment is made within 60 months of the issuance, an amount that would generate an IRR of 11.75%; (5) if the payment is made thereafter but before maturity, an amount that would generate an IRR of 11.25%; and (6) if the payment is made at maturity, an amount that would generate an IRR of 10.0%.

The Company is required to maintain trailing six-month net revenue based on a schedule that gradually increases up to $120.0 million after the year ending December 31, 2026.

In addition, the Company is required to maintain a trailing six-month Gross Margin of not less than 30%. The agreement also contains a revenue participation agreement, under which, for any fiscal quarter,0.01% of net revenue for such fiscal quarter (up to $100.0 million of net revenue for each fiscal year) per each $1.0 million principal amount of the notes will be payable to Oberland Capital. Amounts paid under the revenue participation agreement during the three and nine months ended September 30, 2025 and 2024 were interest payments on the debt. The revenue participation payments are additional financing costs of the loan and are included in the computation of the internal rate of return measures described above and do not reduce principal on the debt. As of September 30, 2025, we have made revenue participation payments of $0.5 million.

The Company elected to account for the 2024 Notes using the fair value option and changes in fair value related to the 2024 Notes are recorded in change in fair value of term loan on the Company’s statements of operations and comprehensive income (loss). The Company also elected to present interest incurred on the 2024 Notes in the change in fair value of the term loan; interest expense under the Oberland Capital arrangement was $1.0 million, $0.6 million, $3.0 million and $0.6 million for the three months ended September 30, 2025 and 2024 and nine months ended September 30, 2025 and 2024, respectively. Total debt outstanding as of September 30, 2025 and December 31, 2024 was $55.0 million and $51.5 million, respectively, and included within long-term debt on the Company’s balance sheets. Future principal payments of the Company’s long-term debt as of September 30, 2025 and December 31, 2024 are $50.0 million, and are due during the year ending December 31, 2031. The term loan advances are secured by a lien on the Company’s assets.

Redeemable Convertible Preferred Stock Warrants

The Company has issued Comerica Bank a warrant to purchase 9,660 Series A-6 redeemable convertible preferred shares at an exercise price of $2.59 per share in connection with a former loan and security agreement entered into in March 2020. The warrants are exercisable until March 15, 2030. The warrants are classified as liabilities on the Company’s balance sheet.

Western Alliance Bank Debt

In October 2021, the Company entered into a loan and security agreement (the “2021 LSA”) with Western Alliance Bank (“WAB”), which provided the Company with three tranches of capital advances totaling $15.0 million. In July 2022, the Company amended the 2021 LSA, such that WAB made four tranches of capital advances available to the Company for an aggregate amount up to $35.0 million. During August 2024, the Company elected to prepay the outstanding amount of the term loans of $35.0 million in principal and the $1.5 million exit fee that became payable upon early loan payoff. The Company recognized a loss on the extinguishment of debt of $1.3 million in the statements of operations and comprehensive income (loss). The loss on extinguishment consisted of incremental expense of $0.8 million unaccreted exit fee liability, $0.3 million unamortized debt issuance costs and a $0.2 million prepayment fee assessed by the bank.

Common Stock Warrants

In connection with the 2021 LSA, the Company issued to Western Alliance Bank (“WAB”) warrants to purchase shares of the Company’s common stock at an exercise price of $2.80 per share. The number of underlying shares of the warrants was initially 53,571 and was increased to 80,357 upon the funding of the loans in January 2022. The warrants will expire if unexercised on October 12, 2031. Upon the occurrence of an acquisition of the Company, if the acquiror shall not have assumed the warrants, WAB shall have the right to put the warrants back to the Company for cash equal to the greater of (x) $450,000 or (y) the value of the aggregate consideration payable to WAB had WAB exercised the warrants immediately prior to exercise such put right.

In connection with the 2022 LSA Amendment, the Company issued up to 41,209 warrants for common stock at an exercise price of $10.92 per share to WAB.30,907 warrants were exercisable upon execution of the agreement; the remaining warrants become exercisable as the Company makes additional draws on the 2022 LSA Amendment. As of December 31, 2023 all of the warrants were exercisable. The warrants will expire if unexercised on July 22, 2032. Upon the occurrence of an acquisition of the Company, if the acquiror shall not have assumed the warrants, WAB shall have the right to put the warrants back to the Company for cash equal to the greater of (x) $450,000 or (y) the value of the aggregate consideration payable to WAB had WAB exercised the warrants immediately prior to exercise such put right.

All the warrants issued to WAB are puttable warrants and thus are liability classified. The warrants were initially recognized at fair value with any subsequent changes in fair value to be recorded in other income (expense) in the statements of operations and comprehensive income (loss) (See Note 3).

The fair value of the warrants as of their respective issuance dates were recorded as a debt discount that is being amortized to interest expense over the term of the loan.

(9)Common Stock

As of September 30, 2025 and December 31, 2024, the Company’s Certificate of Incorporation, as amended, authorized the Company to issue 51,100,000 shares of common stock with a par value of $0.00001. Total common stock outstanding as of September 30, 2025 and December 31, 2024 was 11,178,467 and 10,925,950, respectively. Each share of common stock is entitled toone vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the Board of Directors, subject to the prior rights of holders of all series of stock outstanding. No dividends have been declared or paid by the Company since inception.

The Company is required to reserve and keep available out of its authorized but unissued shares of common stock such a number of shares sufficient to affect the conversion of all outstanding shares of redeemable convertible preferred stocks, preferred stock and common stock warrants, and options granted and available for grant under the Company’s stock option plan.

The amount of such shares of the Company’s common stock reserved for these purposes at September 30, 2025 is as follows:

Stock Plan

In December 2018, the Company adopted the 2018 Stock Plan (the “2018 Plan”). The 2018 Plan authorizes the granting of stock options upon the approval of the Company’s Board of Directors, to employees and consultants providing services to the Company. Stock options granted under the 2018 Plan generally expire within 10 years from the date of grant and are generally issued at the fair value of the underlying shares of common stock on the date of grant as determined by the Company’s Board of Directors. The shares subject to each option typically allow for 25% of the shares to vest and become exercisable on the first anniversary of the vesting commencement date and thereafter, the remaining 75% will vest and become exercisable in 36 equal monthly installments. The Company may include other vesting terms from time to time.

Incentive and non-statutory stock options may be granted with exercise prices not less than 100% of the estimated fair value of the common stock on the date of grant, as determined by the Board of Directors.

Subject to Board approval at the grant date, if an option includes an “early exercise” feature, then such option shall be exercisable at any time but any unvested option shares shall be subject to the Company’s right to repurchase them at the original exercise price in the event that the optionee’s service is terminated for any reason. If an option does not permit early exercise, then such option shall not be exercisable with respect to unvested shares. As of September 30, 2025 and December 31, 2024, the Company had authorized 12,409,025 and 10,904,372 shares of common stock reserved for issuance under the 2018 Plan, respectively.

Stock-based Compensation

The weighted average assumptions used to calculate the fair value of option grants issued under the 2018 Plan during the three and nine months ended September 30, 2025 and 2024 were as follows:

A summary of the Company’s stock option activity and related information is as follows:

As of September 30, 2025, there was approximately $60.7 million of total unrecognized compensation cost related to unvested options, which is expected to be recognized over the weighted average period of 3.8 years. Also, in June 2025, the Board of Directors granted stock options of 1,003,102 shares to the Company’s Chief Executive Officer and Co-Founder and 501,551 shares to the Chief Technology Officer and Co-Founder at an exercise price of $20.04 per share. The vesting commencement date of the stock option is June 11, 2025 and the stock options vests monthly oversix years.

Stock-Based Compensation Expense

The table below shows stock-based compensation expense included in the statements of operations and comprehensive income (loss) for the three months ended and nine months ended September 30, 2025 and 2024 (in thousands):

Secondary Sales of Common Stock

During June 2024, investors of the Company acquired 52,750 shares of common stock at a price per share equal to $22.42 per share from employee stockholders. During July 2024, investors of the Company acquired an additional 22,302 shares of common stock at a price per share equal to $22.42 per share from a stockholder who was a former employee of the Company. As a result, the Company recorded a total of $0.1 million and $0.4 million for the three months ended and nine months ended September 30, 2024, respectively, in stock-based compensation expense for the difference between the price paid by these investors and the estimated fair value of the acquired common stock from stockholders on the date of the transactions. No secondary sales occurred during the three and nine months ended September 30, 2025.

Repurchase of Common Stock

In February 2024, the Company’s Board of Directors agreed to repurchase a total of 26,750 shares of common stock that were held by a former employee of the Company. The repurchase price paid by the Company was $20.3950 per share, resulting in a total repurchase cost of $0.5 million. As the repurchase price paid by the Company to the former employee represented an excess over the common stock’s estimated fair market value at the time, the Company accounted for this premium as stock-based compensation expense of $0.2 million during the nine months ended September 30, 2024.

(10)Income Taxes

The Company has an effective tax rate of (2.31)%,0.15%, (1.03)% and (0.05)% for the three and nine months ended September 30, 2025 and 2024, respectively. The Company has historically incurred U.S. operating losses prior to the nine months ended September 30, 2025 and has minimal profits in its foreign jurisdictions.

The Company updates its estimate of the annual effective tax rate each quarter and makes a cumulative adjustment in such period. The Company recorded immaterial amounts for the three and nine months ended September 30, 2025 and 2024, respectively. Income tax expense (benefit) consists primarily of income taxes for U.S. federal and the states in which the Company conducts business. Due to the Company’s history of losses in the United States, a full valuation allowance on substantially all of the Company’s deferred tax assets, including net operating loss carryforwards, research and development tax credits, and other book versus tax differences, was maintained.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The enactment of the OBBBA did not result in a material impact to our provision for income taxes for the three months ended September 30, 2025 given we maintain a full valuation allowance on our federal deferred tax assets. We are currently assessing the long term impact the OBBBA may have on our financial condition, results of operations, cash flows, and effective tax rate.

(11)Employee Benefit Plan

The Company sponsors a qualified 401(k) defined contribution plan covering eligible employees. Participants may contribute a portion of their annual compensation limited to a maximum annual amount set by the Internal Revenue Service. Employer contributions to the plan are discretionary. During the three and nine months ended September 30, 2025 and 2024, the Company contributed $0.9 million, $0.6 million, $2.6 million and $1.7 million to this plan, respectively.

(12)Related Party Transactions

In February 2024, the Company repurchased 26,750 shares of common stock that were held by the former CFO. Please refer to Note 9 for additional information on this transaction. There were no other material related party transactions during the three months ended and nine months ended September 30, 2025 and 2024.

(13)Net Income (Loss) Per Share Attributable to Shareholders

For the three months ended and nine months ended September 30, 2024, basic net income (loss) per share is the same as diluted net income (loss) per share as the inclusion of any potential common shares outstanding would have been anti-dilutive. For the three months ended and nine months ended September 30, 2025, diluted net income (loss) per share is computed by applying the two-class method and then by dividing net income attributable to common stockholders by the weighted-average number of diluted common shares outstanding. The dilutive effect of potentially dilutive common shares is reflected in diluted earnings per share by application of the if-converted method for the Company’s outstanding preferred stock, the treasury stock method for the Company’s other potentially dilutive securities, and is ultimately applied by sequencing instruments beginning with those that are more dilutive.

The following table sets forth the computation of basic and dilutive net income (loss) per share attributable to common stockholders for the three and nine months ended September 30, 2025 and 2024 (in thousands, except per share amounts):

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows for the three and nine months ended September 30, 2025 and 2024:

(14)Subsequent Events

On November 7, 2025, the Company closed its initial public offering (the “IPO”) of 5,233,765 shares of its Class A common stock, which includes the exercise in full by the underwriters of their option to purchase from the Company 682,665 shares of the Company’s Class A common stock, at a price to the public of $60.00 per share. The gross proceeds to the Company from the IPO were $314.0 million and the net proceeds amounted to $286.4 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company. Immediately prior to the closing of the IPO, each outstanding share of the Company’s Series A-1, Series A-2, Series A-3, Series A-4, Series A-5, Series A-6, Series B-1, Series B-2, Series C, Series C-1 and Series D redeemable convertible preferred stock converted, on a one-for-one basis, into 29,084,235 shares of the Company’s Class A common stock (the conversion, the “Reclassification”). Following the Reclassification, and immediately prior to the closing of the IPO,2,325,108 shares of Class A common stock held by Oguzhan Atay, our Chief Executive Officer and Co-Founder, and 2,227,542 shares of Class A common stock held by David Tsao, our Chief Technology Officer and Co-Founder, were exchanged at a 1:1 ratio for shares of Class B common stock.

In connection with the IPO, the Company’s Board of Directors adopted, and its stockholders approved, the 2025 Equity Incentive Plan (the “2025 Plan”), which became effective on November 5, 2025. The 2018 Plan was terminated upon the completion of the IPO, however awards outstanding under the 2018 Plan will remain outstanding and will continue to be governed by their existing terms. The number of shares of Class A common stock available for issuance under the 2025 Plan is 3,297,972 shares of Class A common stock, plus up to 10,034,626 shares remaining available for issuance under the 2018 Plan, subject to annual adjustment on the first day of each fiscal year through January 1, 2035. The 2025 Plan allows for the issuance of a variety of stock-based compensation awards at the discretion of the Board of Directors, including stock options, stock appreciation rights, restricted stock awards, restricted stock unit (“RSU”) awards, and other stock-based awards.

In further connection with the IPO, the Company’s Board of Directors adopted, and its stockholders approved, the 2025 Employee Stock Purchase Plan (the “2025 ESPP”), which became effective on November 5, 2025. The number of shares of Class A common stock available for issuance under the 2025 ESPP is 548,880 shares of Class A common stock, subject to annual adjustment on the first day of each fiscal year through January 1, 2035. No more than 8,400,000 shares of Class A common stock may be issued under the 2025 ESPP. Each participant may purchase up to the number of shares determined by the Board of Directors on any purchase date, not to exceed 7,500 shares. The price of each share of Class A common stock purchased under the 2025 ESPP will not be less than 85% of the lower of the fair market value per share of Class A common stock on the first day of the applicable offering period or the fair market value per share of Class A common stock on the purchase date.