BillionToOne (BLLN) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01Our limited operating history and rapid growth make it difficult to evaluate our future prospects and the risks and challenges we may encounter
2. 02We primarily generate revenue from sales of our molecular diagnostic tests and we are highly dependent on them for our success
3. 03If the government and other third-party payors fail to provide coverage and adequate payment for our existing and future tests, our revenue and prospects for profitability will be harmed
4. 04In that case, our tests may no longer be covered, which could negatively affect our ability to obtain reimbursement, or the tests offered by our competitors may be more highly preferred by the ordering providers as a result of a change in a medical guideline
5. 05Our revenue may be adversely affected if we are unable to successfully obtain reimbursement from the Medicare program and state Medicaid programs
6. 06Our billing and claim processing are complex and time-consuming, and any delay in submitting claims or failure to comply with applicable billing requirements could hinder collection and have an adverse effect on our revenue
7. 07The loss of key members of our senior management team or our inability to attract and retain highly skilled scientists, technicians, clinicians, and sales representatives could adversely affect our business
8. 08If our existing laboratory facilities become damaged or inoperable or we are required to vacate our existing facilities, our ability to perform our tests and pursue our research and development efforts may be jeopardized
9. 09Our tests in development may not be clinically effective or may never achieve significant commercial market acceptance and our test offerings that we have recently launched may not be commercially successful
10. 10We may have to spend substantial time and money to overcome obstacles to commercial acceptance of our tests, and our anticipated timeline to launch new test offerings may not occur at the time we expect
11. 11We rely on a limited number of suppliers or, in some cases, sole or single-source suppliers, for some of our laboratory instruments and materials and may not be able to find replacements or promptly transition to alternative suppliers
12. 12We rely on commercial courier delivery services to transport samples to our facilities in a timely and cost-efficient manner and if these delivery services are disrupted, our business may be harmed
13. 13If our products do not meet the expectations of patients and our customers, our operating results, reputation and business could suffer
14. 14If we experience a significant disruption in our information technology systems, or those of third parties upon which we rely, our business operations and financial condition could be adversely affected
15. 15Recent or future macroeconomic pressures resulting from geopolitical uncertainty, public health developments or other matters may have an adverse impact on our business, financial results and prospects
16. 16International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects
17. 17If we were to be sued for product liability or professional liability, we could face substantial liabilities that exceed our resources
18. 18Our estimates of total addressable market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates
19. 19New product development and commercialization involve a lengthy and complex process and we may be unable to develop or commercialize new products on a timely basis or at all
20. 20The molecular diagnostics industry is subject to rapid change, which could make our current products, and any future products we may develop, obsolete
21. 21If we are unable to support demand for our current and future products, including ensuring that we have adequate capacity to meet increased demand, or we are unable to successfully manage our anticipated growth, our business could suffer
22. 22Our employees, contractors, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements
23. 23We have been, and in the future may be, involved in legal proceedings, regulatory investigations and inquiries and other legal matters, which may have an adverse effect on our business, financial condition, results of operations and prospects
24. 24Ethical, legal and social concerns related to the use of genetic information could reduce demand for our tests
25. 25The increasing use of social media platforms presents new risks and challenges
26. 26If we cannot compete successfully with our competitors, we may be unable to increase or sustain our revenue or to achieve and then sustain profitability
27. 27We have generally incurred losses since inception, and we may not be able to generate sufficient revenue to maintain profitability
28. 28Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide
29. 29We may need to raise additional capital, and if we cannot do so when needed or on commercially acceptable terms, we will be required to slow or cease our investment in our product development and commercialization plans, which would have an adverse effect on our business

Risks related to our intellectual property

1. 30Any inability to effectively protect our proprietary technologies could harm our competitive position
2. 31If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business could be harmed
3. 32If we are subject to litigation or other proceedings arising from a claim of infringement of the intellectual property of a third party, we might incur significant costs and delays in test introduction or we could be prevented from using technologies incorporated in our tests
4. 33Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products
5. 34Issued patents covering our products, services or technology could be found invalid or unenforceable if challenged
6. 35We may be subject to claims challenging the inventorship or ownership of our intellectual property
7. 36We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed trade secrets of their former employers
8. 37We may not be able to protect and enforce our trademarks and we could infringe others’ trademarks
9. 38We may not be able to protect or enforce our intellectual property rights adequately throughout the world
10. 39Failure to comply with the terms of underlying open source software licenses could require us to publicly disclose our proprietary software
11. 40Obtaining and maintaining our patent protection depends on compliance with various required procedures, document submissions, fee payments and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
12. 41Patent terms may be inadequate to protect our competitive position for an adequate amount of time

Risks related to legal and regulatory matters

1. 42Our tests are currently marketed as LDTs, and future changes in FDA enforcement of LDTs could subject our operations to much more significant regulatory requirements
2. 43Changes in the way the FDA regulates the reagents, other consumables, and testing equipment we use when developing, validating, and performing our tests could result in delay or additional expense in bringing our tests to market or performing such tests for our customers
3. 44We conduct business in a heavily regulated industry, and changes in regulations or violations of regulations may, directly or indirectly, reduce our revenue, adversely affect our results of operations and financial condition, and harm our business
4. 45Companion and complementary diagnostic tests require FDA approval, and we may not be able to secure such approval in a timely manner or at all
5. 46Changes in healthcare laws, regulations and policies could increase our costs, decrease our sales and revenue and negatively impact reimbursement for our tests
6. 47We are subject to numerous federal and state healthcare statutes and regulations; complying with such laws pertaining to our business is an expensive and time-consuming process, and any failure to comply could result in substantial penalties and a material adverse effect to our business and results of operations
7. 48We are subject to the U.S. Foreign Corrupt Practices Act and other anti-corruption laws, as well as export control laws, import and customs laws, trade and economic sanctions laws and other laws governing our operations
8. 49If the validity of an informed consent from a patient intake for any of our tests is challenged, we could be precluded from billing for such testing, forced to stop performing such tests or required to repay amounts previously received, which would adversely affect our business and financial results
9. 50A correction or removal of our products, either voluntarily or at the direction of the FDA or another governmental authority, or the discovery of serious safety issues with our products, could have a significant adverse impact on us
10. 51Our use of hazardous materials in the development of our tests exposes us to risks related to accidental contamination or injury and requires us to comply with regulations governing hazardous waste materials
11. 52Even if we receive regulatory approval or certification of our products, we will continue to be subject to extensive regulatory oversight

Risks related to financial and accounting matters

1. 53These material weaknesses, other than that related to user and privileged access controls, resulted in immaterial adjustments to the December 31, 2024 and 2023 financial statements, which were recorded prior to the issuance of those financial statements
2. 54Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited
3. 55Future indebtedness could adversely affect our business and growth prospects
4. 56The terms of our debt facility restrict our current and future operations, particularly our ability to respond to changes or to take certain actions
5. 57Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use, value added or similar taxes and we could be subject to tax liabilities with respect to past or future sales, which could adversely affect our results of operations

Risks related to our Class A common stock

1. 58The market price for our Class A common stock may be volatile or may decline regardless of our operating performance, and you may lose all or part of your investment
2. 59Our dual-class capital structure has the effect of concentrating voting power with holders of our Class B common stock, who have significant influence over us and, if acting together, will be able to control matters requiring stockholder approval
3. 60We cannot predict the impact our dual class structure may have on the market price of our Class A common stock
4. 61If securities or industry analysts do not publish research, if they publish inaccurate or unfavorable research about our business, or if our financial results differ from any guidance we provide to the public, the price of our Class A common stock and trading volume could decline
5. 62Future sales of substantial amounts of our Class A common stock in the public markets, or the perception that such sales might occur, could reduce the price that our Class A common stock might otherwise attain
6. 63Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management, and depress the market price of our Class A common stock
7. 64We do not anticipate paying dividends on our Class A common stock in the foreseeable future. As a result, your ability to achieve a return on your investment will depend on appreciation in the price of our Class A common stock
8. 65Our failure to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business
9. 66We are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors
10. 67The requirements of being a public company may strain our resources, divert management’s attention, and affect our ability to attract and retain qualified Board of Directors members
11. 68Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
12. 69We may be subject to securities litigation, which is expensive and could divert management attention