Company: BLLN
Filing Date: 2025-08-11
Form Type: DRS/A
Source: 0000950123-25-007483
Chunk: 162

Company: BillionToOne, Inc.
Filing Date: 2025-08-11
Form: DRS/A
Chunk 162
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.S. and global capital market conditions. |

114

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-Scholes-Merton option valuation model, which allows for the identification for a range of possible future outcomes, each with an associated probability. The OPM is appropriate to use when the range of
possible future outcomes is difficult to predict and thus creates highly speculative forecasts. PWERM involves a forward-looking analysis of the possible future outcomes of the enterprise including an IPO as well as
non-IPO market-based outcomes. After the equity value is determined and allocated to the various classes of shares, a discount for lack of marketability (DLOM) is applied to arrive at the fair value of
ordinary shares. A DLOM is applied based on the theory that as an owner of a private company stock, the stockholder has limited opportunities to sell this stock and any such sale would involve significant transaction costs, thereby reducing overall
fair market value.

In addition, we also considered any secondary transactions involving our capital stock. In our evaluation of those transactions, we considered
the facts and circumstances of each transaction to determine the extent to which they represented a fair value exchange. Factors considered include transaction volume, timing, whether the transactions occurred among unrelated parties, and whether
the transaction involved investors with access to our financial information.

Application of these approaches involves the use of estimates, judgment, and
assumptions that are highly complex and subjective, such as those regarding our expected future revenue, expenses, and future cash flows, discount rates, market multiples, the selection of comparable companies, and the probability of possible future
events.