Sera Prognostics(SERA) - 2025 Q2 - Quarterly Report

Special Note Regarding Forward-Looking Statements This section highlights forward-looking statements, emphasizing their inherent risks and uncertainties, and disclaims any obligation to update them, except as required by law - Forward-looking statements are subject to risks, uncertainties, and assumptions, including those described in the 'Risk Factors' section[10] - The company operates in a competitive and rapidly changing environment, with new risks emerging frequently[10] - The company undertakes no obligation to publicly update forward-looking statements after the report date, except as required by law[11] PART I — FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents unaudited condensed financial statements, including balance sheets, statements of operations, equity, and cash flows, with detailed notes Condensed Balance Sheets Condensed Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--------------------------------- | :-------------- | :---------------- | :----- | | Total assets | $111,828 | $72,575 | +$39,253 | | Total liabilities | $23,602 | $24,772 | -$1,170 | | Total stockholders' equity | $88,226 | $47,803 | +$40,423 | | Cash and cash equivalents | $5,016 | $4,043 | +$973 | | Marketable securities (current) | $35,144 | $42,193 | -$7,049 | | Long-term marketable securities | $68,351 | $21,973 | +$46,378 | Condensed Statements of Operations and Comprehensive Loss Condensed Statements of Operations and Comprehensive Loss Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $17 | $24 | $55 | $24 | | Total operating expenses | $9,337 | $9,277 | $18,625 | $18,374 | | Loss from operations | $(9,320) | $(9,253) | $(18,570) | $(18,350) | | Net loss | $(8,046) | $(8,303) | $(16,233) | $(16,400) | | Net loss per share, basic and diluted | $(0.16) | $(0.25) | $(0.36) | $(0.50) | Condensed Statements of Stockholders' Equity Changes in Stockholders' Equity (in thousands) | Metric | Balance as of Dec 31, 2024 | Issuance of common stock and pre-funded warrants, net | Stock-based compensation expense | Net loss | Balance as of June 30, 2025 | | :--------------------------------- | :------------------------- | :------------------------------------------ | :------------------------------- | :--------- | :-------------------------- | | Total Stockholders' Equity | $47,803 | $53,611 | $2,837 | $(16,233) | $88,226 | - Net proceeds from the February 2025 Offering contributed $53.6 million to additional paid-in capital[21] Condensed Statements of Cash Flows Condensed Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(13,026) | $(934) | | Net cash used in investing activities | $(39,561) | $(540) | | Net cash provided by financing activities | $53,560 | $2,258 | | Net increase in cash and cash equivalents | $973 | $784 | | Cash and cash equivalents at end of period | $5,016 | $4,664 | - Net cash provided by financing activities in 2025 was primarily due to $53.6 million from the February 2025 Offering[135] Notes to Condensed Financial Statements 1. Description of the Business - Sera Prognostics, Inc is a women's health company utilizing its proprietary proteomics and bioinformatics platform to improve maternal and neonatal health[26] - The company's primary product is the PreTRM test, a blood-based biomarker test[27] 2. Significant Accounting Policies - Unaudited condensed financial statements are prepared in accordance with U.S GAAP and SEC interim reporting rules, with estimates made based on historical and anticipated results[28][30] - Pre-funded warrants issued in February 2025 are equity classified as they are freestanding, immediately exercisable, and indexed to Class A common stock[32] - The company is evaluating the impact of recently issued accounting pronouncements ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures)[33][34] 3. Cash, Cash Equivalents and Marketable Securities Cash, Cash Equivalents and Marketable Securities (in thousands) | Category | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :--------------------------------- | :------------------------- | :------------------------- | | Cash and cash equivalents | $5,016 | $4,043 | | Current marketable securities | $35,144 | $42,193 | | Long-term marketable securities | $68,351 | $21,973 | | Total | $108,511 | $68,209 | - All marketable securities are classified as available-for-sale, with unrealized losses attributed to normal market and interest rate fluctuations, not credit quality[36] Marketable Securities by Contractual Maturities (in thousands) as of June 30, 2025 | Maturity | Amortized Cost | Fair Value | | :-------------------------- | :------------- | :--------- | | Due within one year | $35,106 | $35,144 | | Due after one year through five years | $68,244 | $68,351 | | Total | $103,350 | $103,495 | 4. Property and Equipment Property and Equipment, Net (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Total property and equipment | $9,303 | $8,995 | | Less accumulated depreciation and amortization | $(8,099) | $(7,756) | | Property and equipment, net | $1,204 | $1,239 | - Depreciation and amortization expense was $0.2 million for each of the three months ended June 30, 2025 and 2024, and $0.4 million for each of the six months ended June 30, 2025 and 2024[39] 5. Intangible Assets, Net Intangible Assets, Net (in thousands) | Category | June 30, 2025 Net Carrying Amount | December 31, 2024 Net Carrying Amount | | :--------------------------------- | :-------------------------------- | :------------------------------------ | | Indefinite-lived intangible assets: Domain names | $697 | $697 | | Definite-lived intangible assets: Software developed for sale | $271 | $329 | | Total intangible assets, net | $968 | $1,026 | - Amortization expense for software developed for sale was $29 thousand for the three months and $58 thousand for the six months ended June 30, 2025, recorded in cost of revenue[40] 6. Accrued and Other Current Liabilities Accrued and Other Current Liabilities (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Accrued compensation | $865 | $1,041 | | Accrued vacation | $574 | $403 | | Operating lease liability, current portion | $328 | $644 | | Other current liabilities | $529 | $296 | | Total accrued and other current liabilities | $2,296 | $2,384 | 7. Other Income, Net Other Income, Net (in thousands) | Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Interest income | $1,194 | $671 | $2,115 | $1,341 | | Investment income, net | $82 | $287 | $228 | $626 | | Total other income, net | $1,276 | $958 | $2,343 | $1,967 | 8. Fair Value Measurements - Fair value hierarchy prioritizes inputs: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), Level 3 (unobservable inputs)[46][47] Assets Measured at Fair Value (in thousands) as of June 30, 2025 | Asset Category | Level 1 | Level 2 | Level 3 | | :--------------------------------- | :------ | :-------- | :------ | | Money market funds | $3,885 | $— | $— | | Commercial paper | $— | $2,954 | $— | | Corporate debt securities | $— | $78,424 | $— | | Municipal debt securities | $— | $8,715 | $— | | U.S. federal agency securities | $— | $13,402 | $— | | Total assets | $3,885 | $103,495 | $— | 9. Related Party Transactions - Commercial Collaboration Agreement with Elevance Health provides defined payment for PreTRM test use within their network, with minimum test purchases for the first three years[51] - Enrollment in the PRIME study, involving Carelon Research (Elevance Health subsidiary), ceased in December 2023 due to efficacy, leading to no revenue from this agreement in the current periods[50][52] - Affiliates of principal stockholders purchased 11,250,000 pre-funded warrants and 625,000 Class A common stock shares in the February 2025 public offering[53][54] 10. Capital Structure - The company has Class A (voting) and Class B (non-voting, convertible) common stock[55] February 2025 Public Offering Details | Item | Quantity | Price | Net Proceeds | | :--------------------------------- | :--------- | :---------- | :----------- | | Class A Common Stock | 3,125,000 shares | $4.00/share | $53.6 million | | Pre-Funded Warrants | 11,250,000 shares | $3.9999/warrant | | Shares Reserved for Future Issuance (Class A Common Stock) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Warrants to purchase Class A common stock | 13,896,247 | 2,646,247 | | Options to purchase Class A common stock | 6,778,649 | 6,113,155 | | Restricted stock units outstanding | 1,895,616 | 1,631,162 | | Available for future grants (2021 Equity Incentive Plan) | 1,799,984 | 2,071,498 | | Available for future grants (2021 Employee Stock Purchase Plan) | 1,335,718 | 1,060,293 | | Total | 25,706,214 | 13,522,355 | 11. Stock-Based Compensation - The company has three equity incentive plans: 2011 Plan (terminated for new grants), 2021 Plan, and 2021 ESPP[61][62][63] Stock Options and RSUs Outstanding | Metric | Stock Options (June 30, 2025) | RSUs (June 30, 2025) | | :--------------------------------- | :---------------------------- | :------------------- | | Number Outstanding | 6,778,649 | 1,895,616 | | Weighted-Average Exercise Price/Grant Date Fair Value | $3.85 | $3.01 | Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Research and development expense | $453 | $918 | $909 | $1,444 | | Sales and marketing expense | $67 | $92 | $166 | $177 | | General and administrative expense | $824 | $1,013 | $1,762 | $2,095 | | Total employee stock-based compensation | $1,344 | $2,023 | $2,837 | $3,716 | - Total unrecognized stock-based compensation expense for outstanding unvested stock options and RSUs was $6.276 million as of June 30, 2025, with weighted-average recognition periods of 2.3 and 2.7 years, respectively[66] 12. Warrants Common Stock Warrants Outstanding | Exercise Price | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | $0.0001 | 11,250,000 | — | | $9.03 | 969,275 | 969,275 | | $10.84 | 946,666 | 946,666 | | $12.38 | 8,083 | 8,083 | | $20.77 | 722,223 | 722,223 | | Total | 13,896,247 | 2,646,247 | - The increase in warrants is primarily due to the issuance of 11,250,000 Pre-Funded Warrants in the February 2025 Offering[67] 13. Commitments and Contingencies Lease-Related Assets and Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Total right-of-use assets | $855 | $1,312 | | Total lease liabilities | $351 | $840 | Future Minimum Lease Payments (in thousands) as of June 30, 2025 | Year | Operating Leases | Finance Leases | Total | | :-------------------------- | :--------------- | :------------- | :---- | | 2025 | $333 | $22 | $355 | | 2026 | $— | $2 | $2 | | Total minimum lease payments | $333 | $24 | $357 | - The company indemnifies its officers and directors for certain events, with unlimited potential future indemnification, but maintains director and officer insurance[72] - The company is not currently a party to any material litigation or other material legal proceedings[73] 14. Net Loss Per Share Net Loss Per Share (Basic and Diluted) | Period | Net Loss Per Share | | :--------------------------------- | :----------------- | | Three Months Ended June 30, 2025 | $(0.16) | | Three Months Ended June 30, 2024 | $(0.25) | | Six Months Ended June 30, 2025 | $(0.36) | | Six Months Ended June 30, 2024 | $(0.50) | - All potentially dilutive securities were excluded from diluted net loss per share calculation because their impact would have been anti-dilutive due to net losses[75][77] 15. Segment Information - The company operates as one operating segment: developing and commercializing medical diagnostic products and services[81] - All revenue and assets are located in the United States[82] Segment Information (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $17 | $24 | $55 | $24 | | Cost of revenue | $41 | $20 | $81 | $37 | | Payroll related expenses | $3,992 | $3,257 | $7,892 | $6,635 | | Consulting and professional fees | $2,042 | $1,479 | $3,875 | $3,332 | | Stock-based compensation expense | $1,344 | $2,023 | $2,837 | $3,716 | | Clinical studies and outside processing | $430 | $1,239 | $717 | $1,867 | | Net loss | $(8,046) | $(8,303) | $(16,233) | $(16,400) | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on financial condition and operations, covering business overview, revenue/expense analysis, performance, liquidity, and future funding Overview - Sera Prognostics is a women's health company using proteomics and bioinformatics to develop blood-based biomarker tests, primarily the PreTRM test, for maternal and neonatal health[87] - The PreTRM test is the only broadly validated, commercially available blood-based biomarker test to accurately predict the risk of preterm birth[89] - AVERT PRETERM TRIAL showed an 18% reduction in severe neonatal morbidity and mortality and a 7-day reduction in mean neonatal hospital length of stay[91] - PRIME study met primary endpoints, indicating a 25% reduction in neonatal morbidity and mortality and an 18% reduction in neonatal hospital length of stay in the mITT population[92] - The company is expanding its commercial team and developing additional biomarker tests, including one for estimating delivery dates, while aiming to operate through 2028 with existing cash[99][102][106] Key Components of Our Results of Operations Revenues - Substantially all near-term revenue is expected from PreTRM test sales, with future revenues from PreTRM and other pipeline tests[108] - Market adoption and additional payer contracts are crucial for revenue growth, supported by clinical evidence and simplified specimen collection methods[108] Operating Expenses Cost of Revenue - Cost of revenue includes third-party specimen collection/shipping, lab personnel, materials, equipment, infrastructure, and intangible asset amortization[109] - Costs are expected to move in line with sales, and the company is strengthening its supplier network and diversifying collection methods[109] Research and Development Expenses - R&D expenses include costs for clinical and real-world studies, laboratory processes, research, bioinformatic activities, and personnel[110] - R&D expenses are expected to increase in the second half of 2025 and potentially in the medium to long-term due to increased product development and planned studies[110] Selling and Marketing Expenses - Selling and marketing expenses primarily include salaries, payroll taxes, employee benefits, stock-based compensation, travel, consulting, public relations, facilities, and legal costs[111] - These expenses are expected to increase in the second half of 2025 due to strategic hiring, PRIME study publication preparation, and expanded commercial investments[112] General and Administrative Expenses - G&A expenses consist primarily of personnel costs for executive, finance, IT, HR, and administrative functions, plus facilities, legal, accounting, insurance, and professional fees[113] - G&A expenses are expected to slightly increase in the second half of 2025 to support scaling commercial opportunities and strategic initiatives[113] Interest Expense - Interest expense represents interest incurred on finance leases[114] Other Income, Net - Other income, net, consists of interest income and other investment income from cash, cash equivalents, and marketable securities[115] Results of Operations Comparison of the Three Months Ended June 30, 2025 and 2024 Three Months Ended June 30, 2025 vs. 2024 (in thousands) | Metric | 2025 | 2024 | $ Change | | :--------------------------------- | :--- | :--- | :------- | | Revenue | $17 | $24 | $(7) | | Research and development | $3,337 | $4,406 | $(1,069) | | Selling and marketing | $1,821 | $1,099 | $722 | | General and administrative | $4,138 | $3,752 | $386 | | Net loss | $(8,046) | $(8,303) | $257 | | Other income, net | $1,276 | $958 | $318 | - Decrease in R&D was primarily due to a $0.7 million decrease in research and bioinformatics costs and a $0.4 million decrease in clinical study costs (PRIME study winding down)[118] - Increase in S&M was due to $0.2 million in personnel/consulting and $0.1 million in marketing programs[119] Comparison of the Six Months Ended June 30, 2025 and 2024 Six Months Ended June 30, 2025 vs. 2024 (in thousands) | Metric | 2025 | 2024 | $ Change | | :--------------------------------- | :--- | :--- | :------- | | Revenue | $55 | $24 | $31 | | Research and development | $6,671 | $8,089 | $(1,418) | | Selling and marketing | $3,291 | $2,326 | $965 | | General and administrative | $8,582 | $7,922 | $660 | | Net loss | $(16,233) | $(16,400) | $167 | | Other income, net | $2,343 | $1,967 | $376 | - Decrease in R&D was primarily due to $0.7 million in research and bioinformatics costs and $0.7 million in clinical study costs (PRIME study winding down)[123] - Increase in S&M was due to $0.4 million in marketing programs and $0.2 million in personnel costs[124] Liquidity and Capital Resources Sources of Liquidity - The company has financed operations primarily through equity and debt financings, including a $53.6 million net proceeds public offering in February 2025[127][130] Liquidity Position (in millions) | Metric | As of June 30, 2025 | | :--------------------------------- | :------------------ | | Cash, cash equivalents, and available-for-sale securities | $108.5 | | Accumulated deficit | $(296.0) | - A universal shelf registration on Form S-3 for up to $100.0 million is effective, but the ATM Prospectus Supplement was terminated in February 2025[128][131] Cash Flows Summary of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(13,026) | $(934) | | Net cash used in investing activities | $(39,561) | $(540) | | Net cash provided by financing activities | $53,560 | $2,258 | | Net increase in cash and cash equivalents | $973 | $784 | - Net cash provided by financing activities in 2025 was primarily due to $53.6 million from the February 2025 Offering[135] Future Funding Requirements - The company expects to incur significant additional operating losses and negative cash flows, primarily due to commercialization of the PreTRM test and development of other pipeline products[136] - Existing cash and cash equivalents are believed to fund operating expenses and capital expenditure requirements for at least the next 12 months[138] - Future funding requirements depend on factors like sales, development costs, regulatory approvals, and market acceptance, with no assurance of obtaining capital on acceptable terms[137] Contractual Obligations and Commitments - No material changes have occurred in contractual obligations and commitments during the six months ended June 30, 2025[139] Critical Accounting Policies and Estimates - No significant changes in the application of critical accounting policies, significant judgments, and use of estimates during the six months ended June 30, 2025[140] Emerging Growth Company and Smaller Reporting Company Status - The company is an Emerging Growth Company (EGC) and a Smaller Reporting Company (SRC), benefiting from reduced reporting requirements[141][145] - EGC status allows delayed adoption of new accounting standards and reduced executive compensation disclosures[143][158] - EGC status will end based on annual revenue ($1.235 billion), market value ($700.0 million), non-convertible debt ($1.0 billion), or December 31, 2026[144] Recent Accounting Pronouncements - Refer to Note 2—Significant Accounting Policies for details on recent accounting pronouncements[146] Item 3. Quantitative and Qualitative Disclosure About Market Risk This section discusses the company's market risk exposure, focusing on interest rate risk for cash and marketable securities, with minimal foreign currency and inflation impact Interest Rate Risk - A hypothetical 100 basis point increase in interest rates would decrease the market value of available-for-sale debt securities by $0.9 million as of June 30, 2025[148] - The company's investment policy focuses on capital preservation and liquidity, and it does not intend to sell investments in an unrealized loss position[148] Foreign Currency - The company does not regularly incur foreign currency expenses, and exchange rate fluctuations have not had a material effect on results of operations to date[149] Effects of Inflation - Inflation has not had a material effect on results of operations during the periods presented[150] - A sustained inflationary environment could increase costs (labor, supplies, clinical trials) and adversely affect borrowing rates and funding ability[150] Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated disclosure controls and procedures as effective, with no material changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures - Disclosure controls and procedures were evaluated by management, including the CEO and CFO, and deemed effective at the reasonable assurance level as of June 30, 2025[152] Changes in Internal Control Over Financial Reporting - No material changes in internal control over financial reporting occurred during the period covered by this Quarterly Report on Form 10-Q[153] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company is not currently involved in material litigation, but future legal proceedings could adversely impact financial results - The company is not currently a party to any material litigation or other material legal proceedings[156] - Unfavorable resolution of future legal proceedings could materially affect the company's future results of operations, cash flows, or financial position[156] Item 1A. Risk Factors Investing in Class A common stock carries high risk due to financial, operational, regulatory, and market uncertainties, potentially harming business and stock price Summary of Risk Factors - The company has incurred net losses since inception and anticipates continued losses, requiring significant cash for operations[159] - Substantially all revenues are from the PreTRM test, and failure to increase its adoption or develop new products would harm the business[159] - Key risks include intense competition, potential inoperability of the CLIA laboratory, reliance on third parties for supplies and services, and challenges in intellectual property protection[159][160] - Reimbursement adequacy, new methodologies, billing disputes, and changes in government healthcare policy pose significant risks to revenue and profits[160] Risks Related to Our Financial Position and Need for Additional Capital - The company has incurred net losses since inception, with a $296.0 million accumulated deficit as of June 30, 2025, and expects continued losses[161] - Significant cash is required for operations, and the ability to raise additional funds through equity or debt financing is uncertain, potentially leading to dilution or restrictive covenants[164][169] - Adverse developments in the financial services industry could significantly impair access to funding sources and negatively impact financial condition[172][175] - Quarterly and annual results may fluctuate due to various factors, including competitive pricing, reimbursement pressures, and evolving trade policies[171] Risks Related to Our Business and Industry - Substantially all revenues are from the PreTRM test; failure to increase adoption or develop new products would harm the business[179] - Market acceptance of PreTRM depends on demonstrating value, convenience, accuracy, and competing against alternatives, with success influenced by scientific and medical community acceptance and peer-reviewed publications[181][182][183] - Intense competition in the life science industry, rapid technological changes, and the need for continuous product improvement pose significant challenges[191][193] - Risks include potential inoperability of the CLIA-certified laboratory, substantial product liability claims, and clinical trial results not supporting or replicating test use[196][197][199] - Reliance on third parties for specimen collection and supplies, challenges in scaling operations, attracting and retaining skilled employees, and risks associated with international expansion could adversely affect the business[209][215][217][221][222] Risks Related to Reimbursement - Adequate coverage and reimbursement from third-party payers (federal, state, commercial) are critical for PreTRM test acceptance and revenue generation[237] - New reimbursement methodologies, including CPT codes, may decrease rates, and the company cannot guarantee favorable rates or coverage for its unique PLA code[245][247] - Billing disputes, recoupment requests, and challenges to medical necessity or coding practices could decrease realized revenue and impact financial condition[249][250] - Changes in government healthcare policy (ACA, PAMA, OBBBA) and cost-containment measures could increase costs, reduce reimbursement rates, and negatively impact test volumes[263][265][267] Risks Related to Government Regulation - The healthcare industry is highly regulated, with complex and often unclear laws, increasing the risk of non-compliance and potential sanctions[273][274] - Changes in FDA regulation of LDTs, despite a recent court decision vacating a final rule, remain a risk, potentially requiring premarket authorization and additional clinical trials[285][287][291] - Failure to comply with CLIA and state laboratory licensing requirements could lead to loss of ability to perform tests or business disruptions[278][284] - The company is subject to various healthcare fraud and abuse laws (AKS, Stark Law, FCA, EKRA) and data privacy/security laws (HIPAA, CCPA, CPRA, GDPR), with potential for substantial penalties and reputational harm for violations[275][295][303][323] - Cybersecurity incidents, data breaches, and the use of artificial intelligence present significant risks to sensitive information, operations, and compliance, potentially leading to liability and reputational damage[307][312][321][322] Risks Related to Intellectual Property - Ability to compete depends on obtaining, maintaining, and enforcing patents, trade secrets, trademarks, and other intellectual property rights[331] - Patent positions in the diagnostics industry are highly uncertain, with complex legal and factual questions, and changes in patent laws or interpretations could negatively impact patent rights[331][332][338][341] - Issued patents could be found invalid or unenforceable if challenged in litigation or administrative proceedings, leading to increased competition[334] - Third-party infringement of patents, trademarks, or other IP rights could lead to costly lawsuits, loss of market share, and financial harm[337] - Reliance on trade secret protection for proprietary know-how and algorithms, with risks of unauthorized disclosure or independent discovery by third parties[345][346] Risks Related to Our Class A Common Stock - The trading price of Class A common stock is likely to be highly volatile due to various factors, including operating results, competition, regulatory changes, and overall market conditions[347][348] - The company does not intend to pay dividends, so returns are limited to stock appreciation[349] - Executive officers, directors, and 5%+ stockholders own a significant percentage of Class A common stock, allowing them to exert significant control over corporate matters[350] - The dual-class common stock structure (Class A voting, Class B non-voting but convertible) may limit stockholders' ability to influence corporate matters[351][354] - EGC and SRC status provides reduced reporting requirements but may make Class A common stock less attractive to some investors, potentially increasing price volatility[355][357] - Anti-takeover provisions in charter documents and Delaware law could delay or prevent a change in control, limiting the market price of Class A common stock[363][364] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported for the quarter ended June 30, 2025 - No unregistered sales of equity securities or use of proceeds to report for the quarter ended June 30, 2025[376] Item 5. Other Information This section details Rule 10b5-1 trading arrangements adopted by executive officers and a director, with RSU-related sales indeterminable due to market price variability Insider Trading Arrangements and Policies - Several executive officers and a director adopted Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[377][380] Rule 10b5-1 Trading Arrangements Adopted (Q2 2025) | Name and Position | Adoption Date | Duration/Expiration Date | Aggregate Number of Shares to be Sold | | :--------------------------------- | :------------ | :----------------------- | :------------------------------------ | | Zhenya Lindgardt, President and CEO | 6/13/2025 | 9/1/2026 | Up to 104,979 | | John J. Boniface, Chief Scientific Officer | 5/21/2025 | 6/1/2026 | Indeterminable (RSU-related) | | Robert G. Harrison, Chief Information Officer | 5/21/2025 | 6/1/2026 | Indeterminable (RSU-related) | | Benjamin G. Jackson, General Counsel | 5/28/2025 | 5/13/2026 | Indeterminable (RSU-related) | | Paul Kearney, Ph.D., Chief Data Officer | 5/21/2025 | 6/1/2026 | Indeterminable (RSU-related) | | Sandra A.J. Lawrence, Director | 6/10/2025 | 6/30/2026 | Up to 132,310 | Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including organizational documents, warrant forms, agreements, and certifications - The section lists all exhibits filed with the Form 10-Q, including organizational documents, warrant forms, agreements, and certifications[382] Signatures This section contains the official signatures of Sera Prognostics, Inc.'s CEO and CFO, certifying the accuracy and completeness of the Form 10-Q as of August 6, 2025 - The report is signed by Zhenya Lindgardt, President and Chief Executive Officer, and Austin Aerts, Chief Financial Officer, on August 6, 2025[388]