Company: BLLN
Filing Date: 2025-12-10
Form Type: 10-Q
Source: 0001628280-25-056321
Chunk: 399

Company: BillionToOne, Inc.
Filing Date: 2025-12-10
Form: 10-Q
Item: Part I, Item 8
Chunk 399
---
 service (service conditions). Stock-based compensation expense is recognized on a straight-line basis over the service period.

Common stock valuations

The fair value of the common stock underlying our stock-based awards has historically been determined by our Board of Directors, with input from management and contemporaneous third-party valuations. We believe that our Board of Directors has the relevant experience and expertise to determine the fair value of our common stock. Given the absence of a public trading market of our common stock until our IPO in November 2025, and in accordance with the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, our Board of Directors exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of our common stock at each grant date. These factors include:

•the results of contemporaneous valuations performed at periodic intervals by a third-party valuation firm;

•the prices, rights, preferences, and privileges of our redeemable convertible preferred stock relative to those of our common stock;

•the prices of our redeemable convertible preferred stock and common stock sold to investors in arms-length transactions;

•our actual operating and financial performance and estimated trends and prospects for our future performance;

•our stage of development;

•the likelihood of achieving a liquidity event, such as an initial public offering, direct listing, or sale of our company, given prevailing market conditions;

•the lack of marketability involving securities in a private company;

•the market performance of comparable publicly traded companies; and

•U.S. and global capital market conditions.

In valuing our common stock, the fair value of our business was determined using various valuation methods, including combinations of the income approach and the market approach with input from management. The income approach involves applying an appropriate risk-adjusted discount rate to projected cash flows based on forecasted revenue and costs. The market approach estimates value based on a comparison of the subject company to comparable public companies in a similar line of business. From the comparable companies, a representative market value multiple was determined, which was applied to our operating results to estimate the enterprise value of our company.

Once the enterprise value was determined under the market approach, we derived the equity value of our company and used a hybrid method that considered both an option pricing model (OPM) and the probability weighted expected return method (PWERM) to allocate that value among the various classes of securities to arrive at the fair value of the common stock. The OPM is based on the Black-Scho