Company: BLLN
Filing Date: 2025-06-20
Form Type: DRS
Source: 0000950123-25-006095
Chunk: 205

Company: BillionToOne, Inc.
Filing Date: 2025-06-20
Form: DRS
Chunk 205
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 the legislative purpose to help reduce opioid-related fraud and abuse. However, EKRA defines the term
“laboratory” broadly and without reference to any connection to substance use disorder treatment. Moreover, EKRA applies to claims submitted to both government and commercial payors. Violation of EKRA carries potential penalties of up to
$200,000 in fines and imprisonment of up to ten years for each occurrence, and potential exclusion from participation in any federal health care program. The law includes a limited number of exceptions, some of which closely align with corresponding
AKS safe harbors, and others that materially differ. Currently, there is no regulation interpreting or implementing EKRA, nor any guidance released by any federal agency regarding the scope of EKRA. The only case law issued to date involves
decisions interpreting the EKRA as it applies to compensation of laboratory sales personnel hired as independent contractors, and the courts differ on interpretation and application of the law. These decisions are currently on appeal in the
federal court of appeals. We cannot assure you that our relationships with physicians, hospitals, customers, or sales personnel will not be subject to scrutiny or will survive a challenge under EKRA. If imposed for any reason, sanctions under EKRA
could have a negative effect on our business.

Because we operate a laboratory facility located in California and licensed by California’s DHS, California law
is applicable to our business arrangements. California’s state anti-kickback statutes, Business and Professions Code Section 650 (which applies to all categories of payors) and Insurance Code Section 754, and its Medi-Cal
anti-kickback statute, Welfare and Institutions Code Section 14107.2, are analogous to, and have been interpreted by the California Attorney General and California courts in substantially the same way as the federal government and the courts
have interpreted, the federal Anti-Kickback Statute. A violation of Section 650 is punishable by up to one year of imprisonment, a fine up to $50,000, or both imprisonment and a fine. A violation of Section 14107.2 is punishable by
imprisonment and fines of up to $10,000. The California Insurance Code includes similar prohibitions against any consideration for the referral or procurement of patients if a claim is submitted to a commercial insurer, CA Ins. Code § 750,
which is punishable by criminal penalties mirroring those that apply to violations of Business and Professions Code Section 650.

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Because each