What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-20 compared with 2024-02-23 · 278 added, 402 removed, 712 unchanged (49% of the section changed)

60 unchanged sentences

Total liabilities 174,133 190,739

Commitments and contingencies (Note 11)

Purchase commitments and contingencies (Note 10)

Stockholders’ Equity:

Preferred Stock, $ 0.0001 par value:

1,000,000 shares authorized at December 31, 2023 and December 31, 2022;

0 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

1,000,000 shares authorized, 0 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively

Class A common stock, $ 0.0001 par value:

1,000,000,000 shares authorized, 25,978,863 shares issued and outstanding at December 31, 2023 and $ 0.0001 par value:

1,000,000,000 shares authorized, 11,773,065 shares issued and outstanding at December 31, 2022

1,000,000,000 shares authorized, 28,016,545 and 25,978,863 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,596,889 1,527,778

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Cost of services 111,053 112,560

Gross profit (loss) 90,006 ( 26,750 )

Gross profit 194,397 90,006

Research and development 45,722 58,266

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Loss from operations ( 23,213 ) ( 180,596 )

Non-operating income (expenses), net

Change in fair market value of warrant and earn-out contingent liabilities 1,170 70,229

Interest income (expense), net 1,114 ( 666 )

Other income, net 1,619 57

Total non-operating income, net 3,903 69,620

Non-operating (expenses) income, net

Change in fair value of warrants and contingent liabilities ( 13,370 ) 1,170

Interest (expense) income, net ( 3,032 ) 1,114

Other (expense) income, net ( 13,014 ) 1,619

Total non-operating (expense) income, net ( 29,416 ) 3,903

Loss before income taxes ( 52,629 ) ( 176,693 )

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Other comprehensive income, net of tax

Unrealized gain related to available for sale securities 425 —

Unrealized gain related to available for sale securities, net 405 425

Comprehensive loss $ ( 51,881 ) $ ( 175,342 )

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(in thousands, except share amounts)

Class A Common Stock

Shares Par Value Additional paid-in capital Accumulated deficit Accumulated other comprehensive income Total stockholders’ equity

Class A Common Stock Additional paid-in capital Accumulated deficit Accumulated other comprehensive income Total stockholders’ equity

Shares Par Value

Balance at December 31, 2022 11,773,065 $ 1 $ 1,378,125 $ ( 1,124,421 ) — $ 253,705

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Stock-based compensation expense — — ( 326 ) — — ( 326 )

Shares issued for PIPE, net of issuance costs 1,515,152 — 197,659 — — 197,659

Shares issued for acquisition (1)

2,424,243 — 172,000 — — 172,000

Vested restricted stock units converted to common stock 431,671 — — — — —

Other comprehensive income, net of tax — — — — 425 425

Issuance of common stock in registered direct offering, net of issuance costs 676,868 — 7,564 — — 7,564

Issuance of common stock for first Milestone Payment 701,460 — 6,692 — — 6,692

Fractional shares issued upon reverse stock split 29,603 — — — — —

Issuance of common stock in underwritten public offering, net of issuance costs 12,315,752 1 135,438 — — 135,439

Balance at December 31, 2023 25,978,863 $ 2 $ 1,527,778 $ ( 1,300,188 ) $ 425 $ 228,017

1 unchanged sentence

Common stock issued pursuant to stock option exercises 68,453 — 394 — — 394

Common stock issued pursuant to Perceptive warrant exercise 645,414 — 12,586 — — 12,586

Stock-based compensation expense — — 9,138 — — 9,138

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Vested restricted stock units converted to common stock 471,663 — — — — —

Issuance of Class A common shares in registered direct offering, net of issuance costs 676,868 — 7,564 — — 7,564

Issuance of Class A common shares for the first Milestone Payment 701,460 — 6,692 — — 6,692

Fractional shares adjustment

29,603 — — — — —

Issuance of Class A common shares in underwritten public offering, net of issuance costs 12,315,752 1 135,438 — — 135,439

Issuance of common stock in ATM offering, net of issuance costs 825,379 — 46,496 — — 46,496

Common stock issued pursuant to employee stock purchase plan 26,773 — 497 — — 497

Balance at December 31, 2024 28,016,545 $ 2 $ 1,596,889 $ ( 1,352,474 ) $ 830 $ 245,247

(1) Of the 2.4 million shares issued for acquisition, 251,965 shares were held by an escrow agent for a one year escrow period.

During this period, the seller retained all rights with respect to the escrow shares, including voting rights and rights to receive dividends and other distributions on such escrow shares .

The accompanying notes are an integral part of these consolidated financial statements.

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Provision for excess and obsolete inventory 180 3,913

Third-party payor reserve release ( 9,745 ) —

Change in third party payor reserves 607 ( 9,745 )

Gain on sale of assets — ( 1,677 )

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Other 3,630 2,406

Change in operating assets and liabilities, net of effects from purchase of business:

Change in operating assets and liabilities:

Accounts receivable ( 5,421 ) 10,263

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Investing activities

Consideration on escrow paid for GeneDx acquisition ( 12,144 ) ( 127,004 )

Purchases of property and equipment ( 5,250 ) ( 7,156 )

Proceeds from sale of assets 4,034 —

Purchases of marketable securities ( 47,670 ) —

Proceeds from maturities of marketable securities 41,060 17,765

Purchases of marketable securities ( 66,302 ) ( 47,670 )

Purchases of property and equipment ( 5,491 ) ( 5,250 )

Proceeds from sales of marketable securities 601 —

Consideration on escrow paid for Legacy GeneDx acquisition — ( 12,144 )

Proceeds from sales of assets — 4,034

Development of internal-use software assets — ( 461 )

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Financing activities

Proceeds from PIPE issuance, net of issuance costs — 197,659

Proceeds from offerings, net of issuance costs 46,496 143,002

Proceeds from long-term debt, net of issuance costs 48,549 —

Exercise of stock options 394 285

Issuance of stock pursuant to employee stock purchase plan 497 —

Long-term debt principal payments ( 497 ) ( 2,000 )

Finance lease payoff and principal payments ( 2,728 ) ( 3,598 )

Proceeds from long-term debt — 48,549

Net cash provided by financing activities 44,162 186,238

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Supplemental disclosures of cash flow information

Stock consideration paid pursuant to exercise of Perceptive warrant $ 12,586 $ —

Cash paid for interest $ 6,677 $ 3,041

$ 3,041 $ 1,932

Purchases of property and equipment in accounts payable and accrued expenses $ 2,597 $ 134

Cash paid for taxes $ 1,167 $ 1,465

$ 1,465 $ 1,241

Assets acquired under capital leases obligations $ 689 $ —

Issuance of common stock for first Milestone Payment $ — $ 6,692

Lease liability from obtaining right-of-use asset $ — $ 637

Stock consideration paid for first Milestone Payment $ 6,692 $ —

Stock consideration paid for purchase of business $ — $ 172,000

Purchases of property and equipment in accounts payable and accrued expenses $ 134 $ —

Software development costs in accounts payable and accrued expenses $ — $ 461

The accompanying notes are an integral part of these consolidated financial statements.

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Organization and Description of Business

GeneDx Holdings Corp., through its subsidiaries GeneDx, LLC and Sema4 OpCo, Inc., provides genomics-related diagnostic and information services and pursues genomics medical research.

GeneDx utilizes an integrated portfolio of laboratory processes, software tools and informatics capabilities to process DNA-containing samples, analyzes information about patient-specific genetic variation and generates test reports for clinicians and their patients.

GeneDx provides a variety of genetic diagnostic tests, screening solutions, and information with a focus on pediatrics, rare diseases for children and adults, and hereditary cancer screening.

GeneDx Holdings’ operating subsidiaries primarily serve healthcare professionals who work with their patients and bills third-party payors across the United States.

On January 9, 2023, Sema4 Holdings Corp.

changed its name to GeneDx Holdings Corp.

The Company’s Class A common stock and public warrants are listed on the Nasdaq under the symbols “WGS” and “WGSWW,” respectively.

On January 31, 2023, the Company raised approximately $ 150.0 million in gross proceeds and announced the closing of an underwritten public offering of 9,962,316 shares of our Class A common stock and a concurrent registered direct offering of 2,353,436 shares of our Class A common stock.

The net offering proceeds received after deducting underwriters' discounts and commissions payable by the Company were approximately $ 135.4 million.

On April 17, 2023, following the Company’s receipt of stockholder approval for the issuance, the Company issued the remaining 676,868 shares of the Company’s Class A common stock to Corvex Select Equity Master Fund LP, Corvex Master Fund LP and Corvex Dynamic Equity Select Master Fund LP in its previously announced registered direct offering for gross proceeds of approximately $ 7.6 million.

GeneDx Holdings Corp., through its subsidiary GeneDx, LLC, is a leading genomics company—one that sits at the intersection of diagnostics and data science, pairing decades of genomic expertise with an ability to interpret clinical data at scale.

The Company believes that everyone deserves personalized, targeted medical care—and that it all begins with a genetic diagnosis.

Fueled by one of the world’s largest rare disease data sets, the Company’s industry-leading exome and genome tests translate complex genomic data into clinical answers that unlock personalized health plans, accelerate drug discovery, and improve health system efficiencies.

The Company operates with conviction that what is best for patients must be embedded in every aspect of our work.

In support of these beliefs, we value equitability, simplicity and transparency.

Unless otherwise stated herein or unless the context otherwise requires, references in these notes to :

• “GeneDx Holdings” refer to GeneDx Holdings Corp., a Delaware corporation (f/k/a Sema4 Holdings Corp.

(“Sema4 Holdings”));

• “Legacy GeneDx” refer to GeneDx, LLC, a Delaware limited liability company (formerly, GeneDx, Inc., a New Jersey corporation), which we acquired on April 29, 2022 (the “Acquisition”);

• “Legacy Sema4” refer to Mount Sinai Genomics, Inc.

d/b/a as Sema4, a Delaware corporation, which consummated the business combination with CM Life Sciences, Inc.

• “GeneDx Holdings” refer to GeneDx Holdings Corp., a Delaware corporation;

• “Legacy GeneDx” refer to GeneDx, LLC, a Delaware limited liability company, which we acquired on April 29, 2022 (the “Acquisition”);

• “Legacy Sema4” refer to Sema4 OpCo Inc., a Delaware corporation, which consummated the business combination with CM Life Sciences, Inc.

(“CMLS”) on July 22, 2021 (the “Business Combination”);

• “we,” “us” and “our,” the “Company” and “GeneDx” refer, as the context requires, to:

◦ Legacy Sema4 prior to the Business Combination, and GeneDx Holdings and its consolidated subsidiaries following the consummation of the Business Combination;

◦ Legacy GeneDx prior to the Acquisition, and GeneDx Holdings and its consolidated subsidiaries following the consummation of the Acquisition.

• “Company,” or “GeneDx” refer to (i) Legacy Sema4 prior to the consummation of the Business Combination;

and (ii) GeneDx Holdings and its subsidiaries following the consummation of the Business Combination (including, following the consummation of the Acquisition, Legacy GeneDx).

• “we,” “us” and “our,” the “Company” and “GeneDx” refer, as the context requires, to GeneDx Holdings and its consolidated subsidiaries.

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S.

These financial statements consolidate the operations and accounts of the Company and its wholly-owned subsidiaries.

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Unless otherwise noted, all tabular dollars are in thousands, except per share amounts.

Certain reclassifications have been made to the prior year consolidated financial statements in order to conform to the current year’s presentation.

On May 4, 2023, at the commencement of trading, the Company effected a 1-for-33 reverse stock split (the “Reverse Stock Split”).

Accordingly, all share and per share amounts for the periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the reverse stock split.

No fractional shares were issued in connection with the reverse stock split.

Emerging Growth Company

The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012.

In addition, the Company is a “smaller reporting company”, as defined in Item 10(f)(1) of the U.S.

Securities and Exchange Commission’s Regulation S-K.

As such, the Company is eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including reduced reporting, including the reporting of two fiscal years of audited financial statements, and extended transition periods to comply with new or revised accounting standards for public business entities.

In addition, the Company was previously a “smaller reporting company”, as defined in Item 10(f)(1) of the SEC’s Regulation S-K and currently takes advantage of certain of the scaled disclosures available to smaller reporting companies.

As such, the Company is eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including reduced reporting, including the reporting of two fiscal years of financial statements, not being required to provide an auditor attestation of internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, and extended transition periods to comply with new or revised accounting standards for public business entities.

The Company has elected to avail itself of this exemption and, therefore, will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S.

The preparation of the Company’s consolidated financial statements in conformity with U.S.

GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the consolidated financial statements as well as the reported amounts of revenues and expenses during the periods presented.

The Company bases these estimates on current facts, historical and anticipated results, trends and various other assumptions that it believes are reasonable in the circumstances, including assumptions as to future events.

These estimates include, but are not limited to, the transaction price for certain contracts with customers, potential or actual claims for recoupment from third-party payors, the valuation of stock-based awards, the valuation of warrant liabilities, income taxes and intangible assets.

Actual results could differ materially from those estimates, judgments and assumptions.

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The majority of the Company’s cash, cash equivalents and restricted cash are uninsured with account balances in excess of the Federal Deposit Insurance Company limits.

The Company’s cash and cash equivalents are deposited with high-quality financial institutions.

The Company’s cash, cash equivalents and marketable securities are deposited with high-quality financial institutions.

Management believes these financial institutions are financially sound and, accordingly, that minimal credit risk exists.

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The Company has not experienced any losses on its deposits of cash and cash equivalents.

The Company assesses both the self-pay patient and, if applicable, the third party payor that reimburses the Company on the patient’s behalf when evaluating concentration of credit risk.

The Company assesses both the self-pay patient and the third-party payor that reimburses the Company on the patient’s behalf and, institutional billed clients when evaluating concentration of credit risk from customers.

Significant patients and payors are those that represent more than 10% of the Company’s total annual revenues or accounts receivable balance at each respective balance sheet date.

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One supplier accounted for approximately 13 % and 11 % of purchases for the years ended December 31, 2024 and 2023, respectively.

Another supplier accounted for approximately 11 % and 12 % of purchases for the years ended

December 31, 2023 and 2022, respectively.

Another supplier accounted for approximately 10 % and 11 % of purchases for the years ended December 31, 2024 and 2023, respectively.

This risk is managed by maintaining a target quantity of surplus stock.

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Milestone payments are included in the transaction price only when it is probable that doing so will not result in a significant reversal of cumulative revenue recognized when the uncertainty associated with the milestone is subsequently resolved.

For longer-term contracts,

the Company does not account for a significant financing component since a substantial amount of the consideration promised by the customer is variable and the amount or timing of that consideration varies on the basis of a future event that is not substantially within the control of either party.

For longer-term contracts, the Company does not account for a significant financing component since a substantial amount of the consideration promised by the customer is variable and the amount or timing of that consideration varies on the basis of a future event that is not substantially within the control of either party.

The Company satisfies its performance obligation generally over time if the customer simultaneously receives and consumes the benefits provided by the Company’s services as the Company performs those services.

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Marketable securities are classified as current assets as these investments are intended to be available to the Company for use in funding current operations.

Unrealized gains and losses on available for sale securities are deemed temporary and are classified in accumulated other comprehensive income (loss) within stockholders’ equity.

Unrealized gains and losses on available for sale securities are deemed temporary and are classified in accumulated other comprehensive income within stockholders’ equity.

Changes in the fair value of available for sale securities impact earnings only when such securities are sold, or an allowance for expected credit losses or impairment is recognized.

The cost of marketable securities sold is based on the specific identification method.

We regularly evaluate our portfolio of marketable securities for expected credit losses and impairment for any decline in fair value determined to be other-than-temporary.

In making this judgement, we evaluate, among other things, the extent to which the fair value of a security is less than its amortized cost;

making this judgement, we evaluate, among other things, the extent to which the fair value of a security is less than its amortized cost;

the financial condition of the issuer, including the credit quality, and any changes thereto;

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During the years ended December 31, 2024 and 2023, the Company did not record provisions for credit losses.

The Company did no t write off any accounts receivable balances for the years ended December 31, 2023 and 2022.

The Company wrote off $ 0.4 million of accounts receivable balances for the year ended December 31, 2024 and none for the year ended December 31, 2023.

Inventory, net

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Any write-down of inventory to net realizable value creates a new cost basis.

During the fourth quarter of 2022, the Company identified indicators of impairment for certain inventory testing supplies and reagents in connection with the planned exit of the Legacy Sema4 business and recorded a $ 22.5 million impairment charge in the Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2022.

Property and Equipment, net

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Impairment, if any, is assessed using discounted cash flows or other appropriate measures of fair value.

See Note 6, “ Property and Equipment, net ”.

Capitalized Software

The Company capitalizes certain costs incurred related to the development of our software applications for internal use during the application development state.

If a project constitutes an enhancement to existing software, the Company assesses whether the enhancement creates additional functionality to the software, thus qualifying the work incurred for capitalization.

Costs incurred prior to meeting these criteria together with costs incurred for training and maintenance are expensed as incurred.

Once the project is available for general release, capitalization ceases and we estimate the useful life of the asset and begin amortization.

Capitalized software costs are amortized using the straight-line method over an estimated useful life of three years .

Capitalized software is reviewed for impairment whenever events or changes in circumstances may indicate that the carrying amount of an asset may not be recoverable.

See Note 6, “ Property and Equipment, net ” for more information.

Business Combinations

The Company accounts for acquisitions of entities that include inputs and processes and have the ability to create outputs as business combinations.

The tangible and identifiable intangible assets acquired and liabilities assumed in a business combination are recorded based on their estimated fair values as of the business combination date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill.

The Company bases the estimated fair value of identifiable intangible assets acquired in a business combination on third-party valuations that use information and assumptions provided by the Company’s management, which consider estimates of inputs and assumptions that a market participant would use.

Any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed is recorded as goodwill.

The use of alternative valuation assumptions, including estimated revenue projections, growth rates, estimated cost savings, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of contingent milestones could result in different purchase price allocations and amortization expense in current and future periods.

See Note 3, “ Business Combinations ” for more information.

See Note 5, “ Property and Equipment ”.

Intangible Assets, Net

Amortizable intangible assets include trade names and trademarks, developed technology and customer relationships acquired as part of business combinations.

Intangible assets acquired through our business combinations in 2022 are amortized on a straight-line basis.

All intangible assets subject to amortization are reviewed for impairment in accordance with ASC 360, Property, Plant and Equipment.

Intangible assets are amortized on a straight-line basis.

All intangible assets subject to amortization are reviewed for impairment in accordance with ASC Topic 360, Property, Plant and Equipment .

There were no impairment losses recorded on intangible assets for any periods presented.

See Note 7, “ Goodwill and Intangible Assets ” for more information.

Cloud Computing

The Company capitalizes certain costs incurred during the application development stage and all costs incurred during the preliminary project and post-implementation stages are expensed as incurred.

Amortization begins when the cloud computing arrangement is ready for its intended use and is calculated on a straight-line basis over the fixed noncancellable periods plus renewal periods the Company deems it reasonably certain to exercise.

During the year ended December 31, 2022, $ 0.3 million of implementation costs were capitalized and recorded in prepaid expenses and other current assets.

There were no capitalized amounts for the year ended December 31, 2023.

See Note 6, “ Intangible Assets ” for more information.

Fair Value Measurements

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The Company’s financial assets and liabilities consist of cash and cash equivalents, marketable securities, accounts receivable, other current assets, accounts payable and accrued expenses, other current liabilities, and long-term debt.

The Company’s carry value of cash and cash equivalents, accounts receivable, other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair value due to the relatively short-term nature of these accounts.

The Company’s carrying value of cash and cash equivalents, accounts receivable, other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair value due to the relatively short-term nature of these accounts.

See Note 4, “ Fair Value Measurements ” for more information.

Warrant Liability

The Company’s outstanding warrants include the Public Warrants, the Private Warrants and the Perceptive Warrants.

The Company accounts for warrants as liability-classified instruments based on an assessment of the warrant terms and applicable authoritative guidance in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815-Derivatives and Hedging (“ASC 815”).

The Company accounts for warrants as liability-classified instruments based on an assessment of the warrant terms and applicable authoritative guidance in accordance with ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic 815, Derivatives and Hedging (“ASC 815”).

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815.

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The warrant liabilities are recorded on the consolidated balance sheets at fair value on their respective issuance dates, with subsequent changes in respective fair values recognized on the consolidated statements of operations and comprehensive loss at each reporting date.

The Public Warrants are classified within Level 1 of the fair value hierarchy as they are traded in active markets and the fair value is determined on the basis of quoted market prices.

Management has determined the fair value of each Private Warrant is the same as that of a Public Warrant because the terms are substantially the same.

The Private Warrants are classified within Level 2 of the fair value hierarchy as management determined the fair value of each Private Warrant is the same as that of a Public Warrant because the terms are substantially the same.

The Perceptive Warrants are classified within Level 3 of the fair value hierarchy.

The estimated fair value of the Perceptive Warrants is determined based on a Modified Black-Scholes valuation model.

Key assumptions include expected volatility, expected term, and risk-free interest rate.

See Note 4, “ Fair Value Measurements ” for more information.

Contingent Consideration (Legacy GeneDx)

The Acquisition involved potential payment of future consideration payable to OPKO Health, Inc.

(“OPKO”) in cash and/or shares of Company’s Class A common stock with such mix to be determined in the Company’s sole discretion, based upon achievement of 2022 and 2023 revenue milestones, pursuant to the Acquisition Merger Agreement (the “Milestone Payments”).

The Company records contingent consideration at fair value at the date of acquisition based on the consideration

expected to be transferred, estimated using a Monte Carlo simulation valuation model.

Changes in assumptions may result in adjustments to the fair value measurements.

Contingent consideration is remeasured each reporting period using Level 3 inputs, and the change in fair value, including accretion for the passage of time, is recognized as income or expense on the Company’s consolidated statements of operations.

Cash contingent consideration payments up to the acquisition date fair value of the contingent consideration liability are classified as financing activities in the consolidated statements of cash flows, and amounts paid in excess of the original acquisition date fair value are classified as operating activities in the consolidated statements of cash flows.

See Note 5, “ Fair Value Measurements ” for more information.

Earn-out Contingent Liability

In connection with the Business Combination, all Legacy Sema4 stockholders and option holders at that time became entitled to a pro rata share of earn-out shares and earn-out RSUs.

The Company accounted for the earn-out shares as a liability in accordance with ASC 480.

The Company subsequently measured the fair value of the liability at each reporting period and changes in fair value were recorded as a component of non-operating income (expenses), net, on the consolidated statements of operations and comprehensive loss.

In July 2023, the Company’s obligations to issue earn-out shares pursuant to that certain Agreement and Plan of Merger, dated February 9, 2021, and shares pursuant to the earn-out RSUs expired as a result of the vesting conditions not being achieved.

The Company accounted for the earn-out RSUs in accordance with ASC 718- Compensation — Stock Compensation (“ASC 718”) and stock-based compensation expense was recognized over the longer of the expected achievement period for the market-based requirement or the service requirement.

In the event that any earn-out RSUs were forfeited as a result of a failure to achieve the service requirement, the underlying shares were reallocated on an annual basis to the Legacy Sema4 stockholders and to the Legacy Sema4 option holders who remained employed as of the date of such reallocation.

Any re-allocations to Legacy Sema4 option holders were accounted for as new grants.

See Note 5, “ Fair Value Measurements ” for more information.

Stock-Based Compensation

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See Note 12, “ Income Taxes ” for more information.

The Company’s leases primarily consisted of office and lab space, and equipment for use in its operations.

Its leases generally have lease terms of 2024 to 2036 years, some with the option to extend.

The Company includes extension options that are reasonably certain to be exercised as part of the lease terms.

As of December 31, 2023, none of the Company’s lease terms included the extension option as the Company has determined that it is unlikely to exercise to extension option.

Under ASU 2016-02, Leases (ASC 842), the Company determines if an arrangement is or contains a lease at inception.

Under the accounting standards update (“ASU”) 2016-02, Leases to ASC Topic 842, the Company determines if an arrangement is or contains a lease at inception.

A lease qualifies as a finance lease if any of the following criteria are met at the inception of the lease:

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Changes to U.S.

GAAP are established by the Financial Accounting Standards Board (the “FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification.

GAAP are established by the Financial Accounting Standards Board (the “FASB”) in the form of ASUs to the FASB’s ASC.

The Company considers the applicability and impact of all ASUs.

ASUs not included in the disclosures in this report were assessed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

The standard requires enhanced segment reporting disclosures, including significant segment expenses and other segment items.

Additionally, the standard requires public entities to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

ASU 2023-07 will be effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024, with early adoption permitted.

The guidance will be applied retrospectively to all periods presented in financial statements unless it is impractical

The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes – Improvements to Income Tax Disclosures (“ASU 2023-09”).

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The guidance will be applied on a prospective basis with the option to apply the standard retrospectively.

The Company does not expect the adoption of ASU 2023-09 to have a material impact on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”).

The standard requires public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.

ASU 2024-03 will be effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted.

The guidance will be applied on a prospective basis with the option to apply the standard retrospectively.

The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).

The new credit losses standard changes the impairment model for most financial assets and certain other instruments.

For trade and other receivables, contract assets recognized as a result of applying ASC 606, loans and certain other instruments, entities will be required to use a new forward looking “expected loss” model that generally will result in earlier recognition of credit losses than under today’s incurred loss model.

The Company adopted ASU 2016-13 effective January 1, 2023 and the adoption did not have material impact in the consolidated statements of operations and comprehensive loss.

Business Combination

Legacy GeneDx Acquisition

On April 29, 2022, the Company completed the Acquisition.

At the closing of the Acquisition, the Company paid OPKO gross cash consideration of $ 150 million (before deduction of transaction expenses and other customary purchase price adjustments) and issued to OPKO 2.4 million shares of the Company’s Class A common stock ($ 172 million based on the closing date share price of $ 70.95 per share).

A portion of this cash and stock consideration was held in escrow for a one year escrow period ending in May 2023.

On May 15, 2023, the Company completed the net working capital settlement with OPKO and released the remaining escrowed amount recorded in restricted cash.

In addition, a portion of the $ 150 million was payable following the closing of the Acquisition due to the achievement of the first revenue-based milestone for the fiscal year ended December 31, 2022 and the remaining Milestone Payment of up to $ 37.5 million would be payable if certain revenue-based milestones are achieved for the fiscal year ending December 31, 2023.

During the year ended December 31, 2023, the first Milestone Payment became due and payable in full and resulted in the issuance of 701,460 shares of the Company’s Class A common stock on April 14, 2023.

The remaining Milestone Payment, if and to the extent earned under the terms of the Acquisition Merger Agreement, will be satisfied through the payment and/or issuance of a combination of cash and shares of the Company’s Class A common stock (valued at $ 160.38 per share, subject to adjustment for stock splits and similar changes), with such mix to be determined in the Company’s sole discretion.

The second milestone payment was determined to be zero .

Concurrently with the closing of the Acquisition, the Company also issued and sold in a private placement 1,515,152 shares of the Company’s Class A common stock to certain institutional investors for aggregate gross proceeds of $ 200 million (the “Acquisition PIPE Investment”).

The following table presents the net purchase price and the fair values of the assets and liabilities of Legacy GeneDx on a preliminary basis:

Cash and cash equivalents $ —

Accounts receivables 21,651

Inventory 6,210

Prepaid expenses 4,671

Other current assets 320

Property and equipment 29,509

Other non-current assets 6,464

Trade names and trademarks 50,000

Developed technology 48,000

Customer relationships 98,000

Accounts payable and accrued expenses ( 12,862 )

Other current liabilities ( 15,781 )

Deferred tax liabilities ( 51,779 )

Long-term lease liabilities ( 5,798 )

Fair value of net assets acquired 178,605

Aggregate purchase price $ 364,476

(1) Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired.

The amounts above represent the fair value estimates at the time of the Acquisition.

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

The standard requires enhanced segment reporting disclosures, including significant segment expenses and other segment items.

Additionally, the standard requires public entities to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

The guidance will be applied retrospectively to all periods presented in financial statements unless it is impractical to do so.

The Company adopted ASU 2023-07 effective December 31, 2024 and it did not have a material impact on its consolidated financial statements and related disclosures.

Revenue Recognition

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Year ended December 31,

GeneDx Legacy Sema4 Consolidated GeneDx Legacy Sema4 Consolidated

GeneDx Other 1

Diagnostic test revenue:

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Total $ 302,293 $ 3,157 $ 305,450 $ 194,376 $ 8,190 $ 202,566

__________________

(1) Other represents revenues associated with the Legacy Sema4 diagnostic testing business.

Reassessment of Variable Consideration

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The Company updates estimated variable consideration quarterly.

For the year ended December 31, 2023, the total change in estimate resulted in a net $ 8.8 million which included the partial release of a third party payor reserve established in prior periods for Legacy Sema4.

During the year ended December 31, 2022, the Company recorded $ 54.0 million to decrease revenue resulting from changes in the estimated transaction price due to contractual adjustments, obtaining updated information from payors and patients that was unknown at the time the performance obligation was met and potential and actual settlements with third party payors.

For the years ended December 31, 2024 and December 31, 2023, the total change in estimate resulted in a net increase to revenue of $ 15.1 million and $ 8.8 million respectively, resulting from changes in the estimated transaction price due to contractual adjustments, obtaining updated information from payors and patients that was unknown at the time the performance obligation was met and potential and actual settlements with third party payors.

The change in estimate also included an increase in revenue related to the release of a previously established payor reserve, as further disclosed in the “Certain Payor Matters” section below.

During the year ended December 31, 2024, the Company recorded a discrete benefit of $ 6.8 million in connection with a multi-year appeal recovery from a single third-party payor.

Certain Payor Matters

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If a third-party payor denies payment for testing or recoups money from the Company in a later period, reimbursement and the associated recognition of revenue for the Company’s testing services could decline.

As an integral part of the Company’s billing compliance program the Company instituted a third-party review of billing claims and compliance practices, and initiated improvements including implementing a package of new billing compliance policies and procedures and strengthening the Company’s billing compliance team.

From time to time, the Company may have an obligation to reimburse Medicare, Medicaid, and third-party payors for overpayments regardless of fault.

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Estimated settlements are adjusted in future periods as such adjustments become known (that is, if new information becomes available), or as years are settled or are no longer subject to such audits, reviews, and investigations.

Throughout 2022, the Company was engaged in discussions with one of its third-party payors (the “Payor”) regarding certain overpayments to Legacy Sema4.

On December 30, 2022, the Company entered into a settlement agreement with the Payor in order to settle the claims related to coverage and billing matters allegedly resulting in the overpayments by the Payor to the Company (the “Disputed Claims”).

Under the settlement agreement, $ 42 million is to be paid by the Company to the Payor in a series of installments over four years with the final installment payment scheduled to be on or before June 30, 2026.

The first installment payment of $ 15 million was made on December 31, 2022 and the second installment of $ 5 million was made on December 27, 2023.

In consideration for these payments, the Payor agreed to provide releases of the Disputed Claims, which releases became effective on March 31, 2023.

On December 30, 2022, the Company entered into a settlement agreement with one of its third-party payors (the “Payor”) in order to settle the claims related to coverage and billing matters allegedly resulting in the overpayments by the Payor to Legacy Sema4 (the “Disputed Claims”).

Under the settlement agreement, $ 42.0 million is to be paid by the Company to the Payor in a series of payments each year through June 30, 2026.

The first installment payment of $ 15.0 million was made on December 31, 2022, the second installment of $ 5.0 million was made on December 27, 2023, and the third installment of $ 10.0 million was made on December 31, 2024.

As of December 31, 2024, $ 12.0 million in scheduled payments under the agreement remain, with $ 10.0 million due in December 2025 and $ 2.0 million in 2026.

In consideration for these payments, the Payor provided releases of the Disputed Claims, effective March 31, 2023.

As a result of this matter, and in connection with a review of certain billing policies and procedures undertaken by management, the Company considered the need to establish reserves for potential recoupments of payments previously made by third-party payors.

As of December 31, 2023 and December 31, 2022, $ 27.0 million and $ 39.0 million were recorded in accounts payable and accrued expenses and other liabilities, respectively.

See Note 16, “ Supplemental Financial Information ”.

As of December 31, 2024 and December 31, 2023, $ 12.6 million and $ 27.0 million of liabilities were recorded in accounts payable and accrued expenses and other liabilities, respectively.

The Company uses estimates, judgments, and assumptions to assess whether it is probable that a significant reversal in the amount of cumulative revenue may occur in future periods, based upon information presently available.

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In addition, as discussed above, the Company has made certain adjustments to its estimated variable consideration as result of this matter and other potential settlements with payors.

Remaining performance obligations

Due to the long-term nature of collaboration service agreements, the Company’s obligations pursuant to such agreements represent partially unsatisfied performance obligations as of December 31, 2023.

The revenues under existing service agreements with original expected durations of more than one year are estimated to be approximately $ 3.3 million.

The Company expects to recognize the majority of this revenue over the next 2 years.

Costs to fulfill contracts

Costs associated with fulfilling the Company’s performance obligations pursuant to its collaboration service agreements include costs for services that are subcontracted to ISMMS.

Amounts are generally prepaid and then expensed in line with the pattern of revenue recognition.

Prepayment of amounts prior to the costs being incurred are recognized on the balance sheets as current or non-current asset based upon forecasted performance.

As of December 31, 2023 and December 31, 2022, the Company had outstanding deferred costs to fulfill contracts of zero and $ 0.3 million, respectively.

At each period, all outstanding deferred costs were recorded as other current assets.

The cost recognized was $ 2.1 million and $ 1.5 million for the years ended December 31, 2023 and 2022, respectively and are recorded in cost of services on the consolidated statements of operations and comprehensive loss.

Fair Value Measurements

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Private warrant liability 1,104 — 1,104 —

Perceptive warrant liability 2,515 — — 2,515

Total financial liabilities $ 3,519 $ 2,415 $ 1,104 $ —

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Money market funds $ 92,702 $ 92,702 $ — $ —

treasury bonds 6,128 — 6,128 —

Corporate and municipal bonds 24,098 — 24,098 —

Total financial assets $ 122,928 $ 92,702 $ 30,226 $ —

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Private warrant liability 71 — 71 —

Contingent consideration 7,619 — — 7,619

Perceptive warrant liability 2,515 — — 2,515

Total financial liabilities $ 2,735 $ 149 $ 71 $ 2,515

There were no transfers between Level 1, Level 2 and Level 3 during the years ended December 31, 2024 or December 31, 2023.

The Company’s financial assets include investments in money market funds, U.S.

treasury bonds, and corporate and municipal bonds.

Investments in money market funds are classified within Level 1 of the fair value hierarchy as they are based on quoted prices in active markets.

Investments in U.S.

treasury bonds and corporate and municipal bonds are classified within Level 2 of the fair value hierarchy as they are based on quoted bid prices for comparable securities in the marketplace and broker/dealer quotes in active markets.

The Company’s marketable securities presented in the consolidated balance sheet at December 31, 2024 have maturity dates ranging from 2025 through 2027 and are classified as current assets as these investments are intended to be readily available to fund current operations.

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Public and Private Warrants

As of the consummation of the Merger in July 2021, there were 666,516 warrants to purchase shares of Class A common stock outstanding, including 447,223 public warrants and 219,293 private placement warrants.

As of the consummation of the CMLS and Legacy Sema4 Business Combination in July 2021, there were 666,516 warrants to purchase shares of Class A common stock outstanding, including 447,223 public warrants and 219,293 private placement warrants.

As of December 31, 2024, there were 666,515 warrants to purchase shares of Class A common stock outstanding, including 457,323 public warrants and 209,192 private placement warrants outstanding.

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• if, and only if, the closing price of the Class A common stock equals or exceeds $ 594.00 per share (as adjusted) for any 20 trading days within a 30 -trading day period ending three trading days before sending the notice of redemption to warrant holders.

The Company may redeem the outstanding public warrants if the price per share of the common stock equals or exceeds $ 330.00 as described below:

The Company may redeem the outstanding public warrants if the price per share of the Class A common stock equals or exceeds $ 330.00 as described below:

• in whole and not in part;

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If the private placement warrants are held by someone other than the initial purchasers or their permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants.

For the years ended December 31, 2023 and December 31, 2022 , a gain of $ 0.2 million and $ 21.1 million was recorded within the change in the change in fair market value of warrant and earn-out contingent liabilities in the consolidated statements of operations and comprehensive loss, respectively.

The public warrants are classified within Level 1 of the fair value hierarchy as they are traded in active markets and the fair value is determined on the basis of quoted market prices.

The private placement warrants are classified within Level 2 of the fair value

hierarchy as management determined the fair value of each private placement warrant is the same as that of a public warrant because the terms are substantially the same.

For the years ended December 31, 2024 and 2023, a loss of $ 3.3 million and gain of $ 0.2 million was recorded within the change in the change in fair market value of warrants and contingent liabilities in the consolidated statements of operations and comprehensive loss, respectively.

Perceptive Warrant

O n October 27, 2023, the Company entered into a Credit Agreement and Guaranty (the “Credit Agreement”) with Perceptive Credit Holdings IV, LP, as lender and administrative agent (“Perceptive”), which provides for a senior secured delayed draw term loan facility in an aggregate principal amount of up to $ 75 million (the “Perceptive Term Loan Facility”).

O n October 27, 2023 (the “Closing Date”), the Company entered into a Credit Agreement and Guaranty (the “Credit Agreement”) with Perceptive Credit Holdings IV, LP, as lender and administrative agent (“Perceptive”), which provides for a senior secured delayed draw term loan facility in an aggregate principal amount of up to $ 75.0 million (the “Perceptive Term Loan Facility”).

As consideration for the Credit Agreement, the Company issued to Perceptive a warrant to purchase up to 1,200,000 shares (the “Perceptive Warrants”) of its Class A common stock.

For further information regarding the Credit Agreement and Perceptive Warrants, see Note 9, “ Long Term Debt ” included within this Annual Report.

The Perceptive Warrants are classified within Level 3 of the fair value hierarchy.

The key assumptions utilized in determining the Perceptive Warrants valuation as of December 31, 2023 were as follows:

December 31, 2023

Stock price $ 2.75

Exercise price $ 3.18

Expected volatility 110.0 %

Expected term (in years) 9.8

Risk-free interest rate 3.88 %

Dividend yield —

The fair value determined and recorded as of December 31, 2023 was $ 2.5 million.

For the year ended December 31, 2023, a nominal gain was recorded within the change in fair market value of warrant and earn-out contingent liabilities in the consolidated statements of operations and comprehensive loss based on re-measurement performed as of the period end date.

Earn-out Contingent Liability

In connection with the Business Combination, all Legacy Sema4 stockholders and option holders at that time became entitled to a pro rata share of 576,412 earn-out shares and earn-out RSUs.

As for the earn-out RSUs for the Legacy Sema4 option holders, a total of 81,819 RSUs were granted on December 9, 2021.

The vesting of such arrangement was conditioned on the satisfaction of both a service requirement and on the satisfaction of a market-based requirement.

The market-based requirement would have been achieved if the Company’s stock price was greater than or equal to $ 429 (Triggering Event I), $ 495 (Triggering Event II) and $ 594 (Triggering Event III) during the applicable performance period, based on the volume-weighted average price for a period of at least 20 days out of 30 consecutive trading days.

In July 2023, the Company’s obligations to issue earn-out shares pursuant to that certain Agreement and Plan of Merger (as amended, the “Business Combination Merger Agreement”), dated February 9, 2021, and shares pursuant to the earn-out RSUs expired as a result of the vesting conditions not being achieved.

The fair value determined and recorded as of December 31, 2023 and December 31, 2022 was zero .

During the year ended December 31, 2022, a gain of $ 10.2 million was recorded within the change in fair market value of warrant and earn-out contingent liabilities in the consolidated statements of operations and comprehensive loss based on re-measurement performed as of the period end date.

The Company also recorded $ 0.8 million reduction in stock-based compensation expense in relation to the forfeiture of the earn-out RSUs by the Legacy Sema4 option holders for the year December 31, 2023.

Contingent Consideration (Legacy GeneDx)

In connection with the Acquisition, up to $ 150 million of contingent payments was to be payable to OPKO in cash and/or shares of Company’s Class A common stock with such mix to be determined in the Company’s sole discretion, based upon achievement of 2022 and 2023 revenue milestones, pursuant to the Acquisition Merger Agreement (the “Milestone Payments”).

Subject to the terms and conditions of the Acquisition Merger Agreement, the first Milestone Payment was paid out in full in April 2023 through the issuance of 701,460 shares of the Company’s Class A common stock (valued at $ 160.38 per share) for $ 112.5 million as the revenue of the Legacy GeneDx group for the fiscal year 2022 exceeded $ 163 million.

The second Milestone Payment of $ 37.5 million was valued at zero as the revenue target for the Legacy GeneDx group was not met during fiscal year 2023.

The second Milestone Payment would have become due and payable if the revenue of the Legacy GeneDx group for the fiscal year 2023 equaled or exceeded $ 219 million (each of clauses (a) and (b), a “Milestone Event”);

provided that 80 % of the second Milestone Payment would have become payable in respect of the second milestone period if the Legacy GeneDx group achieved 90 % of the Milestone Event revenue target for such period, which amount would have scaled on a linear basis up to 100 % of the second Milestone Payment at 100 % of the revenue target.

During the year ended December 31, 2023, a gain of $ 0.9 million was recorded in the change in fair market value of warrant and earn-out contingent liabilities in the consolidated statements of operations and comprehensive loss.

800,000 warrant shares (the “Initial Warrant Shares”) vested and became exercisable on the Closing Date and 400,000 warrant shares (the “Additional Warrant Shares” and, together with the Initial Warrant Shares, the “Warrant Shares”) would have potentially vested and become exercisable on the Tranche B Borrowing Date, as defined in Note 8, “ Long-Term Debt ” included within this Annual Report.

As the Company did not seek the additional funding from the Tranche B Loan, the Additional Warrant Shares did not vest and are not exercisable.

On April 30, 2024 (the “Exercise Date”) Perceptive provided the Company with a notice to exercise the Initial Warrant Shares at an aggregate exercise price of $ 2.5 million and, as payment of the aggregate exercise price, instructed the Company to withhold a number of Initial Warrant Shares based on their aggregate fair market value as of the Exercise Date.

The fair market value price of each Initial Warrant Share was equal to the 1-day volume weighted average price (the “ 1-day VWAP”) of the Company’s Class A common stock on the Exercise Date, or $ 16.4321 .

As a result, the Company issued 645,414 shares of its Class A common stock to Perceptive in satisfaction of the cashless exercise in respect of the Initial Warrant Shares.

See Note 8, “ Long-Term Debt ” included within this Annual Report for further information.

For the year ended December 31, 2024, a loss of $ 10.1 million was recorded within the change in fair market value of warrants and contingent liabilities in the consolidated statements of operations and comprehensive loss based on re-measurement performed as of the Exercise Date.

Contingent Consideration

In connection with the Acquisition, up to $ 150.0 million of contingent payments was to be payable to OPKO Health, Inc.

(“OPKO”), based upon achievement of 2022 and 2023 revenue milestones (the “Milestone Payments”) pursuant to the merger agreement (the “Acquisition Merger Agreement”).

The first Milestone Payment was paid out in full in April 2023 and the second Milestone Payment was valued at zero as the milestone was not met during fiscal year 2023.

During the year ended December 31, 2023, a gain of $ 0.9 million was recorded in the change in fair market value of warrants and contingent liabilities in the consolidated statements of operations and comprehensive loss.

Connecticut Department of Economic and Community Development Funding Commitment

The Company’s loan from the Connecticut Department of Economic and Community Development (“DECD”) is classified within Level 2 of the fair value hierarchy.

The loan was recorded at its carrying value of $ 6.3 million at December 31, 2022

and December 31, 2023, with $ 0.5 million of recorded in other current liabilities on the consolidated balance sheets at December 31, 2023.

The loan was recorded at its carrying value of $ 5.8 million and $ 6.3 million, respectively, at December 31, 2024 and December 31, 2023, with $ 1.2 million of recorded in other current liabilities on the consolidated balance sheets at December 31, 2024.

The fair value was $ 4.9 million, which is estimated based on discounted cash flows using the yields of similar debt instruments of other companies with similar credit profiles.

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As of December 31,

Capitalized software $ 32,171 $ 32,171

Laboratory equipment 18,267 15,538

Equipment under finance leases 2,604 21,384

Leasehold improvements 14,655 14,614

Capitalized software 32,171 32,171

Building under finance lease 4,529 6,276

Computer equipment 6,912 5,819

Building under finance lease 4,529 4,529

Equipment under finance leases 3,293 2,604

Furniture, fixtures and other equipment 584 550

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Property and equipment, net $ 32,893 $ 32,479

For the years ended December 31, 2023 and 2022, depreciation and amortization expense was $ 19.7 million and $ 50.0 million, respectively, which included software amortization expense of $ 6.6 million and $ 15.4 million for the years ended December 31, 2023 and 2022, respectively.

For intangible amortization, see Note 7, “ Goodwill and Intangible Assets ”.

For the years ended December 31, 2024 and 2023, depreciation and amortization expense was $ 7.9 million and $ 19.7 million, respectively, which included software amortization expense of zero and $ 6.6 million for the years ended December 31, 2024 and 2023.

For intangible amortization, see Note 6, “ Intangible Assets ”.

For the year ended December 31, 2024, the Company recorded the following:

• $ 0.6 million charge to accelerate the depreciation, net of trade-in credits, for certain lab equipment that was sold during the period as a trade-in associated with the purchase of new lab equipment;

• $ 0.3 million charge to accelerate the depreciation for certain lab equipment that was retired during the period.

For the year ended December 31, 2023, the Company recorded the following:

• $ 4.0 million charge to accelerate the amortization for certain capitalized software projects associated with Legacy Sema4 that were not expected to be utilized;

• $ 9.9 million non-cash impairment charges (of which $ 5.6 million was allocated to the right-of-use asset associated with the sublease), driven by indicators of impairment related to the ISMMS sublease agreements during the first and third quarters of 2023;

• $ 9.9 million non-cash impairment charges (of which $ 5.6 million was allocated to the right-of-use asset associated with the sublease), driven by indicators of impairment related to the Icahn School of Medicine at Mount Sinai (“ISMMS“) sublease agreements during the first and third quarters of 2023;

• $ 1.7 million net gain on sale of assets primarily associated with the closure of Legacy Sema4 facilities.

For the year ended December 31, 2022, the Company recorded the following:

• $ 24.0 million charge to accelerate depreciation and amortization due to the change in the Company’s useful lives on certain fixed assets that are related to the business exit activity;

• $ 8.7 million charge associated with the identification of indicators of impairment that the carrying value of the certain capitalized software may not be recoverable.

As a result, certain costs previously capitalized were written down within cost of services, research and development and general and administrative expenses.

Depreciation and amortization expense is included within the statements of operations and comprehensive loss as follows:

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Total depreciation and amortization expense $ 7,928 $ 19,709

Goodwill and Intangible Assets

As discussed in Note 3, “ Business Combinations ”, upon the acquisition of GeneDx in April 2022, the Company recorded initial goodwill of $ 185.9 million through its preliminary purchase allocation.

The purchase price allocation for acquired businesses may be modified for up to one year from the date of acquisition if additional facts or circumstances lead to changes in our preliminary purchase accounting estimates.

During 2022, the Company recorded measurement period adjustments to reduce goodwill by $ 11.4 million.

The measurement period closed on April 29, 2023.

During the fourth quarter of 2022, the Company identified indicators that it was more likely than not that the fair value of the GeneDx reporting unit was less than its carrying value.

The factors contributing to the indicators included, but were not limited to, significant decline in the Company’s stock price coupled with lower than anticipated business financial performance of the Legacy Sema4 business.

Based on the quantitative analysis performed as of December 31, 2022, the Company concluded that the reporting unit’s carrying value was greater than the fair value.

Accordingly, an impairment charge totaling $ 174.5 million was recognized.

The following table reflects the carrying values and remaining useful lives of the acquired intangible assets identified based on the Company’s preliminary purchase accounting assessments for the GeneDx acquisition:

Intangible Assets

The following table reflects, as of December 31, 2024 and December 31, 2023, the carrying values and remaining useful lives of acquired intangible assets:

December 31, 2024 December 31, 2023 Weighted-Average

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Total estimated future amortization expense $ 158,600

Amortization expense for tradenames and trademarks and developed technology of $ 9.1 million was recorded in general and administrative expenses for the year ended December 31, 2023 within the consolidated statements of operations and comprehensive loss.

Amortization expense for customer relationships of $ 4.9 million was recorded in selling and marketing expenses for the year ended December 31, 2023 within the consolidated statements of operations and comprehensive loss.

Amortization expense for tradenames and trademarks and developed technology of $ 9.1 million was recorded in general and administrative expenses for each of the years ended December 31, 2024 and 2023, within the consolidated statements of operations and comprehensive loss.

Amortization expense for customer relationships of $ 4.9 million was recorded in selling and marketing expenses for each of the years ended December 31, 2024 and 2023, within the consolidated statements of operations and comprehensive loss.

Related Party Transactions

Related Party Revenues

Total related party revenues are included within diagnostic test revenue and other revenue in the consolidated statements of operations and comprehensive loss as follows:

Year Ended December 31,

Diagnostic test revenue $ 3,199 $ 2,209

Other revenue

Total related party revenues

$ 3,199 $ 2,562

Related party revenues primarily include diagnostic testing revenues generated by GeneDx from BioReference Laboratories, Inc.

(“BRLI”), which is a subsidiary of OPKO.

The prices charged represent market rates.

Revenue recorded from this contract was $ 2.7 million and $ 1.7 million for the years ended December 31, 2023 and December 31, 2022, respectively.

Total related party diagnostic testing revenues were $ 1.7 million and $ 3.2 million for the years ended December 31, 2024 and 2023, respectively.

Related party revenues primarily include diagnostic testing revenues from a subsidiary of OPKO and the prices charged represent market rates.

Related Party Expenses

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Total related party costs $ 12,635 $ 10,039

On June 1, 2017, the Company signed a contribution and funding agreement and other agreements with ISMMS, whereby ISMMS contributed certain assets and liabilities related to the Company’s operations, provided certain services to the Company, and also committed to funding the Company up to $ 55.0 million in future capital contributions in exchange for equity in the Company, of which $ 55.0 million was drawn as of December 31, 2019.

Following the transaction, the Company commenced operations and began providing the services and performing research.

Expenses recognized pursuant to other service arrangements with ISMMS totaled $ 4.6 million and $ 6.8 million for the years ended December 31, 2024 and 2023, respectively.

These amounts are included in either cost of services or related party expenses on the consolidated statements of operations and comprehensive loss depending on the particular activity to which the costs relate.

Payables due to ISMMS for the other service arrangements were $ 1.0 million and $ 2.4 million as of December 31, 2023 and December 31, 2022, respectively.

These amounts are included in either cost of services or other operating expenses, net on the consolidated statements of operations and comprehensive loss depending on the particular activity to which the costs relate.

Payables due to ISMMS for the other service arrangements were $ 0.9 million and $ 1.0 million as of

December 31, 2024 and December 31, 2023, respectively.

These amounts are included within due to related parties on the Company’s consolidated balance sheets.

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The prices paid represent market rates.

Payables due were $ 0.4 million as of December 31, 2023 and 2022.

Legacy GeneDx and OPKO entered into a Transition Services Agreement dated as of April 29, 2022 (the “OPKO TSA”) pursuant to which OPKO has agreed to provide, at cost, subject to certain limited exceptions, in order to facilitate the transactions contemplated by the Acquisition Merger Agreement, including human resources, information technology support, and finance and accounting.

Payables due were $ 0.7 million and $ 0.4 million as of December 31, 2024 and 2023.

Legacy GeneDx and OPKO entered into a Transition Services Agreement dated as of April 29, 2022 (the “OPKO TSA”) pursuant to which OPKO had agreed to provide services, at cost, subject to certain limited exceptions, in order to facilitate the transactions contemplated by the Acquisition Merger Agreement, including human resources, information technology support, and finance and accounting.

Services in connection with the OPKO TSA were fully completed in October 2023.

The Company recognized $ 1.6 million and $ 1.3 million in costs for the year ended December 31, 2023 and 2022, respectively.

As of December 31, 2023 and 2022, a nominal amount and $ 0.4 million was unpaid and included in due to related parties in consolidated balance sheets, respectively.

During the year ended December 31, 2023, the Company recorded a reduction of $ 1.3 million of receivables from OPKO related to the Acquisition closing working capital adjustment that was previously recorded as prepaid expenses and other current assets in consolidated balance sheets at December 31, 2022.

The Company recognized $ 1.6 million in costs for the year ended December 31, 2023 related to the agreement.

Long-Term Debt

As of December 31, 2024, long-term debt matures as follows:

Thereafter 762

Total debt 55,753

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Total long-term debt, net of current portion and debt issuance costs $ 51,913

Entry into Perceptive Term Loan Facility

O n October 27, 2023 (the “Closing Date”), the Company entered into a Credit Agreement and Guaranty (the “Credit Agreement”) with Perceptive Credit Holdings IV, LP, as lender and administrative agent (“Perceptive”), which provides for a senior secured delayed draw term loan facility in an aggregate principal amount of up to $ 75 million (the “Perceptive Term Loan Facility”).

Perceptive Term Loan Facility

O n October 27, 2023 (the “Closing Date”), the Company entered into the Perceptive Term Loan Facility.

An initial tranche of $ 50.0 million (the “Tranche A Loan”) was funded under the Perceptive Term Loan Facility on the Closing Date.

In addition to the Tranche A Loan, the Perceptive Term Loan Facility includes an additional tranche of $ 25 million (the “Tranche B Loan,” and together with the Tranche A Loan, the “Term Loans”), which will be accessible by the Company so long as the Company satisfies certain customary conditions precedent, including a specified revenue milestone (the funding date of the Tranche B Loan, the “Tranche B Borrowing Date”).

In addition to the Tranche A Loan, the Perceptive Term Loan Facility included an additional tranche of $ 25.0 million (the “Tranche B Loan,” and together with the Tranche A Loan, the “Term Loans”), which was accessible by the Company through December 31, 2024 so long as the Company satisfied certain customary conditions precedent, including a specified revenue milestone (the funding date of the Tranche B Loan, the “Tranche B Borrowing Date”).

Although the requirements for the Tranche B funding were met, the Company did not seek the additional funding.

The Perceptive Term Loan Facility has a maturity date of October 27, 2028 (the “Maturity Date”) and provides for an interest-only period during the term of the loan with principal due at the maturity date.

Our net proceeds from the Tranche A Loan were approximately $ 49 million, after deducting estimated debt issuance costs and expenses.

The Company’s net proceeds from the Tranche A Loan were approximately $ 48.8 million, after deducting debt issuance costs and expenses.

Interest Rate

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Security Instruments and Warrant

In connection with the Credit Agreement, the Company also entered into a Security Agreement (the “Security Agreement”), dated as of the Closing Date, with Perceptive, pursuant to which all of its obligations under the Credit Agreement are secured by a first lien perfected security interest on substantially all of its existing and after-acquired assets, subject to customary exceptions.

In addition, on the Closing Date, as consideration for the Credit Agreement, the Company issued to Perceptive a warrant to purchase up to 1,200,000 shares of its Class A common stock.

800,000 Warrant Shares (the “Initial Warrant Shares”) vested and became exercisable on the Closing Date and 400,000 Warrant Shares (the “Additional Warrant Shares”) will vest and become exercisable on the Tranche B Borrowing Date.

The per share exercise price for the Initial Warrant Shares is $ 3.1752 (the “Initial Warrant Exercise Price”), which is equal to the 10-day volume weighted average price (the “ 10-day VWAP”) of the Company’s Class A common stock at the end of the business day immediately prior to the Closing Date, and the per share exercise price for the Additional Warrant Shares will be equal to the lower of (a) the Initial Warrant Exercise Price or (b) the 10-day VWAP ending on the end of the business day immediately preceding the Tranche B Borrowing Date.

In connection with the Credit Agreement, the Company also entered into a Security Agreement, dated as of the Closing Date, with Perceptive, pursuant to which all of its obligations under the Credit Agreement are secured by a first lien perfected security interest on substantially all of its existing and after-acquired assets, subject to customary exceptions.

On the Closing Date, as consideration for the Credit Agreement, the Company issued the Perceptive Warrant to Perceptive, which allowed them to purchase up to 1,200,000 Warrant Shares.

The 800,000 Initial Warrant Shares vested and became exercisable on the Closing Date and 400,000 Additional Warrant Shares would have potentially vested and become exercisable on the Tranche B Borrowing Date.

As the Company did not seek the additional funding from the Tranche B Loan, the Additional Warrant Shares did not vest and are not exercisable.

The per share exercise price for the Initial Warrant Shares is $ 3.1752 (the “Initial Warrant Exercise Price”), which is equal to the 10-day volume weighted average price (the “ 10-day VWAP”) of the Company’s Class A common stock at the end of the business day immediately prior to the Closing Date, and the per share exercise price for the Additional Warrant Shares would have been equal to the lower of (a) the Initial Warrant Exercise Price or (b) the 10-day VWAP ending on the end of the business day immediately preceding the Tranche B Borrowing Date.

The Perceptive Warrant will be exercisable, in whole or in part, until the 10 th anniversary of the applicable vesting date.

information regarding the accounting treatment and subsequent fair value re-measurement of the Perceptive Warrant, see Note 5, “ Fair Value Measurement ” included within this Annual Report.

Termination of Loan and Security Agreement (the “SVB Agreement”)

On November 15, 2021, the Company and Sema4 OpCo, Inc.

(together, the “Borrower”) entered into a Loan and Security Agreement (the “SVB Agreement”) with Silicon Valley Bank (“SVB”) which provided for a revolving credit facility (the “Revolver”) up to an aggregate principal amount of $ 125 million, including a sublimit of $ 20 million for Letters of Credit (as such terms are defined in the SVB Agreement).

In connection with the entry into the Credit Agreement, the SVB Agreement was terminated, effective as of the Closing Date, and SVB’s security interest in the Company’s assets and property was released.

No amounts had been drawn under the SVB Agreement at the Closing Date.

The Company recorded $ 0.6 million of expenses related to the termination of the SVB Agreement during the fourth quarter of 2023.

On April 30, 2024, Perceptive provided the Company with a notice to exercise the Initial Warrant Shares at an aggregate exercise price of $ 2.5 million and instructed the Company to withhold a number of Initial Warrant Shares as payment for the aggregate exercise price.

As a result, the Company issued 645,414 shares of its Class A common stock in satisfaction of the cashless exercise in respect of the Initial Warrant Shares.

See Note 4, “ Fair Value Measurement ” for further information.

Connecticut Department of Economic and Community Development Funding Commitment

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In January 2023, the Company amended the DECD Loan Agreement, which resulted in the Company agreeing to pay $ 2.0 million in principal, obtaining $ 2.8 million in debt forgiveness for achieving its Phase 2 job milestone, and agreeing to two new forgiveness milestone targets for its Phase 3 job milestone (eligible for $ 2.0 million in forgiveness) and a final phase job milestone (eligible for $ 1.0 million in forgiveness) (the “2022 Amended DECD Loan Agreement”).

Upon execution of this amendment, the Company paid the $ 2.0 million in principal and received $ 2.8 million in debt forgiveness, both of which were classified as current liabilities at December 31, 2022 and the Company recognized the debt forgiveness as other (expense) income, net in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023.

The terms of the 2022 Amended DECD Loan Agreement require the Company to make interest-only payments through July 2024 and principal and interest payments commencing in August 2024 through July 2029 at the same fixed annual interest rate of 2.0 %.

Upon execution of this amendment, the Company paid the $ 2.0 million in principal and received $ 2.8 million in debt forgiveness, and the Company recognized the debt forgiveness as other (expense) income, net in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023.

The terms of the 2022 Amended DECD Loan Agreement require the Company to make interest-only payments through July 2024 and requires the Company to make principal and interest payments commencing in August 2024 through July 2029 at the same fixed annual interest rate of 2.0 %.

The other terms of the 2022 Amended DECD Loan Agreement remained the same.

The outstanding loan balance from the 2022 Amended DECD Loan Agreement was $ 6.3 million at December 31, 2023.

The tables below present financial information associated with the Company’s leases as of, and for the year ended, December 31, 2023 and 2022:

During the year ended December 31, 2024, the Company made principal payments totaling $ 0.5 million.

The outstanding loan balance of the DECD loan was $ 5.8 million at December 31, 2024.

The Company’s leases primarily consist of office and lab space, and equipment for use in its operations.

Its leases generally have lease agreements which expire in 2026 to 2036, some with the option to extend.

The Company includes extension options that are reasonably certain to be exercised as part of the lease terms.

As of December 31, 2024, none of the Company’s lease terms included the extension option as the Company has determined that it is unlikely to exercise the extension option.

Operating Leases

The Company’s primary operating lease arrangements include leased properties for its corporate office and headquarters located in Stamford, Connecticut, its primary operating laboratory located in Gaithersburg, Maryland, and a satellite meeting space located in New York City.

The lease agreements for these properties expire in 2034, 2031, and 2026, respectively.

The Company’s operating leases also include laboratories in Branford, Connecticut and Stamford, Connecticut, which as previously disclosed, have ceased operations as part of the Company’s announced exits in 2022 from reproductive health and somatic tumor testing.

The lease agreements for these properties expire in 2030 and 2036, respectively.

These facilities as well as a portion of its headquarters located in Stamford, Connecticut are actively being marketed for sublet;

however, the outstanding lease obligations remain obligations.

At inception of the lease for the laboratory in Stamford, Connecticut, the value of the land was determined to be more than 25% of the total value and therefore the building is accounted for as a finance lease and the land as an operating lease.

Finance Leases

In addition to its leased laboratory building in Stamford, Connecticut noted above, the Company routinely enters into various finance lease agreements to obtain laboratory equipment that contain bargain purchase commitments at the end of the lease term.

The leases are secured by the underlying equipment.

The tables below present financial information associated with the Company’s operating and finance leases as of, and for the year ended, December 31, 2024 and 2023:

Classification 2024 2023

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Purchase Commitments

The following sets forth purchase commitments as of December 31, 2023 with a remaining term of at least one year:

2024 2025 Total Commitments

Software provider $ 2,445 $ 1,199 $ 3,644

Equipment provider 193 — 193

The following sets forth purchase commitments with software and equipment providers as of December 31, 2024 with a remaining term of at least one year:

2025 $ 15,699

Thereafter 978

Total purchase commitments $ 37,598

The Company enters into contracts with suppliers to purchase materials needed for diagnostic testing.

These contracts generally do not require multi-year purchase commitments.

For further information regarding the Company’s lease obligations, see Note 9, “ Leases ” included within this Annual Report.

Contingencies

The Company is a party to various actions and claims arising in the normal course of business.

The Company does not believe that the outcome of these matters will have a material effect on the Company’s consolidated financial position, results of operations or cash flows.

However, no assurance can be given that the final outcome of such proceedings will not materially impact the Company’s consolidated financial condition or results of operations.

The Company is or may become subject to various claims and legal actions arising in the ordinary course of business.

The Company does not believe that the outcome of any existing matters will have a material effect on the Company’s consolidated

financial statements.

However, no assurance can be given that the ultimate resolution of such proceedings will not materially impact the Company’s consolidated financial statements.

Except as described below, the Company was not a party to any material legal proceedings as of December 31, 2024, nor is it a party to any material legal proceedings as of the date of issuance of these consolidated financial statements.

On September 7, 2022, a shareholder class action lawsuit was filed in the United States District Court for the District of Connecticut against the Company and certain of the Company’s current and former officers.

The complaint purports to bring suit on behalf of stockholders who purchased the Company’s publicly traded securities between March 14, 2022 and August 15, 2022.

On September 7, 2022, a shareholder class action lawsuit was filed in the United States District Court for the District of Connecticut, styled Helo v.

Sema4 Holdings Corp., et al, 22-cv-1131 (D.

Conn.) against the Company and certain of the Company’s current and former officers.

Following the appointment of a lead plaintiff, an amended complaint was filed on January 30, 2023.

As amended, the complaint purports to allege that defendants made false and misleading statements about the Company’s business, operations and prospects in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and seeks unspecified compensatory damages, fees and costs.

The Company believes the allegations and claims made in the complaint are without merit.

On February 7, 2023, a stockholder commenced a lawsuit in the Delaware Court of Chancery.

The suit is brought as a class action on behalf of stockholders of CMLS who did not redeem their shares in connection with the Business Combination.

The suit names as defendants all directors of CMLS at the time of the transaction, including directors who continue to serve on the Company’s Board of Directors, as well as CMLS Holdings LLC.

The Company is not named as a defendant.

The complaint alleges that the July 2, 2021 proxy statement mailed to CMLS stockholders in connection with the transaction contained false and misleading statements, and purports to assert a claim of breach of fiduciary duty against all individual defendants, and a

similar claim against CMLS Holdings LLC and certain individuals for breach of fiduciary duty as control persons.

The suit seeks to recover unspecified damages on behalf of the alleged class, among other relief.

The Company believes the allegations and claims made in the complaint are without merit.

The Company is subject to certain claims for advancement and indemnification by the individual defendants in this proceeding.

The defendants moved to dismiss the amended complaint on August 21, 2023, and that motion was granted on July 31, 2024.

A second amended complaint was filed on September 13, 2024.

As amended, the complaint purports to bring suit on behalf of the stockholders who purchased the Company’s publicly traded securities between January 18, 2022 and August 15, 2022.

The second amended complaint purports to allege that the defendants made false and misleading statements about the Company’s business, operations, and prospects in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and seeks unspecified compensatory damages, fees, and costs.

The Company believes the allegations and claims are without merit.

On November 28, 2023, a stockholder filed a derivative suit, allegedly on behalf of the Company, based largely on the same allegations in the securities class action referenced above.

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The complaint seeks damages on the Company’s behalf, and seeks corporate governance and other relief.

The response to the complaint is not yet due.

On March 11, 2024, the Court issued an order staying this suit pending resolution of the Helo class action referenced above.

On June 25, 2024, a substantially similar stockholder derivative suit was filed in federal court in the District of Connecticut, styled Scinto v.

Schadt, et al, 2:24-cv-01100 (D.

The suit, also purportedly brought on the Company’s behalf against certain of its former or current officers and directors, asserts claims for breach of fiduciary duty, unjust enrichment, corporate waste, and violations of Sections 10(b) and 14(a) of the Exchange Act.

The Company is named only as a nominal defendant.

The complaint seeks damages on the Company’s behalf, as well as corporate governance reforms and other relief.

On August 8, 2024, the Court issued an order staying this suit until the earlier of a commencement of discovery, announcement of settlement, or dismissal with prejudice in the Helo class action referenced above.

On February 7, 2023, a stockholder commenced a lawsuit in the Delaware Court of Chancery.

The suit is brought as a class action on behalf of stockholders of CMLS who did not redeem their shares in connection with the Business Combination between CMLS and Legacy Sema4.

The defendants named in the amended complaint include and directors of CMLS at the time of the transaction, including certain directors who continue to serve on the Company’s Board of Directors, as well as CMLS Holdings LLC, Corvex Management LP, and Casdin Capital, LLC.

The Company is not named as a defendant.

The suit seeks to recover unspecified damages on behalf of the alleged class, among other relief.

After defendants moved to dismiss the case, the plaintiff filed an amended complaint on July 6, 2023, revising certain allegations and adding third parties as defendants.

The defendants answered the amended complaint on September 15, 2023.

The Company is subject to certain claims for advancement and indemnification by the individual defendants in this proceeding.

During the second quarter of 2024, the parties reached an agreement in principle through mediation to resolve all claims for approximately $ 21 million, and during the third quarter of 2024, the parties executed a formal stipulation of settlement reflecting such agreement in principle.

The settlement was paid into escrow on November 12, 2024 and was funded by the Company (based on its indemnification obligations), available insurance of approximately $ 10 million and proceeds of approximately $ 1.4 million from the insurance of a third-party defendant.

The Delaware Court of Chancery approved the settlement on December 2, 2024.

As of December 31, 2024, remaining unpaid litigation and indemnification costs were nominal.

Defined Contribution Plan

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Stock-Based Compensation

Stock-Based Compensation Expense

Stock-based compensation expense is included within the consolidated statements of operations and comprehensive loss as follows:

Year Ended December 31,

Cost of services $ 431 $ ( 1,217 )

Research and development 1,192 ( 2,585 )

Selling and marketing 1,089 ( 1,266 )

General and administrative 6,426 4,742

Total stock-based compensation expense 1,2

$ 9,138 $ ( 326 )

1 The Company recorded an aggregate reversal of stock-based compensation of $ 3.9 million and $ 24.7 million during the years ended December 31, 2024 and 2023, respectively, due to forfeiture activities upon employee terminations.

2 Includes $ 0.6 million of expense related to the 2021 Employee Stock Purchase Plan during year ended December 31, 2024.

Stock Incentive Plans

On July 22, 2021, in connection with the Business Combination, the Company’s 2021 Equity Incentive Plan (the “2021 Plan”) became effective and 991,970 authorized shares of Class A common stock were reserved for issuance thereunder.

This Plan will be administered by the Compensation Committee of the Company’s Board of Directors, including determination of the vesting, exercisability and payment of the awards to be granted under this Plan.

The Company maintains the Amended and Restated 2021 Equity Incentive Plan (as amended and restated, the “2021 Plan”), which allows for grants of stock-based awards.

No awards granted under the 2021 Plan are exercisable after 10 years from the date of grant, and the awards granted under the 2021 Plan generally vest over a four-year period on a graded vesting basis;

On April 13, 2023, the stockholders of the Company approved an amendment and restatement to the 2021 Plan to increase the aggregate number of shares of the Company’s Class A common stock authorized for issuance under the 2021 Plan by 787,879 shares and implement certain other clarifying changes.

On each January 1 of each of 2022 through 2031, the aggregate number of shares of Class A common stock reserved for issuance under the 2021 Plan may be increased automatically by the number of shares equal to 5 % of the total number of shares of all classes of common stock issued and outstanding immediately preceding December 31.

On July 21, 2023, the Company adopted the 2023 Equity Inducement Plan (the “Equity Inducement Plan”) and, subject to the adjustment provisions of the Equity Inducement Plan, reserved 500,000 shares of the Company’s Class A common stock for issuance pursuant to equity awards to be granted under the Equity Inducement Plan.

In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, the only persons eligible to receive grants of equity awards under the Equity Inducement Plan are individuals who were not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company.

however, the Company has also granted certain restricted stock units (“RSUs”) with vesting terms beginning 12 months from the grant date and vesting immediately on the grant date.

On January 1 of each year through 2031, the aggregate number of shares of Class A common stock reserved for issuance under the 2021 Plan may be increased automatically by the number of shares equal to 5 % of the total number of shares of all classes of common stock issued and outstanding immediately preceding December 31.

In January 2024, the number of Class A common stock reserved for future issuance under the 2021 Plan automatically increased by 1,298,943 shares.

The Company also maintains the 2023 Equity Inducement Plan (the “Equity Inducement Plan”), which allows for grants of equity awards of the Company’s Class A common stock to individuals who were not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company.

As of December 31, 2024, there was an aggregate of 1,857,260 shares available for grants of stock options or other awards under the 2021 Plan and Equity Inducement Plan.

In January 2025, the number of Class A common stock reserved for future issuance under the 2021 Plan automatically increased by 1,400,827 shares.

Employee Stock Purchase Plan

The 2021 Employee Stock Purchase Plan (the “2021 ESPP”) became effective in connection with the Business Combination.

The 2021 ESPP authorizes the issuance of shares of Class A common stock pursuant to purchase rights granted to employees.

On each January 1 of each of 2022 through 2031, the aggregate number of shares of Class A common stock reserved for issuance under the ESPP 2021 may be increased automatically by the number of shares equal to one percent ( 1 %) of the total number of shares of all classes of common stock issued and outstanding immediately preceding December 31.

The Company did not make any grants of purchase rights under the 2021 ESPP during the years ended December 31, 2023 and December 31, 2022.

A total of 336,816 shares of Class A common stock have been reserved for future issuance under the 2021 ESPP.

In January 2024, the number of Class A common stock reserved for future issuance under the 2021 ESPP automatically increased by 259,788 shares.

Stock Option Activity

All stock options granted under the 2021 Plan are accounted for as time-based equity awards.

The following summarizes the stock option activity:

The following summarizes the stock option activity during the year ended December 31, 2024:

Stock Options Outstanding

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Non-vested options outstanding at the end of the year were 50,317 with weighted average grant-date fair value of $ 14.52 .

The weighted-average grant-date fair value of options granted and total fair value of the options with tranches vested was $ 25.07 and $ 1.5 million for the year ended December 31, 2023, respectively.

The weighted-average grant-date fair value of options forfeited and canceled was $ 22.71 for the year ended December 31, 2023.

As of December 31, 2024, unrecognized stock-based compensation cost related to the unvested portion of the Company’s stock options was $ 0.5 million, which is expected to be recognized on a graded-vesting basis over a weighted-average period of 1.0 years.

The weighted-average grant-date fair value and total fair value of options with tranches vested was $ 34.42 and $ 0.7 million for the year ended December 31, 2024, respectively, and $ 25.07 and $ 1.5 million for the year ended December 31, 2023, respectively.

The aggregate intrinsic value of exercised options was $ 2.3 million and $ 0.3 million in the years ended December 31, 2024 and 2023, respectively, and is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of the exercise date.

The fair value of the stock option awards for the periods ended December 31, 2023 and 2022 were estimated using the Black-Scholes option pricing model with the following assumptions:

The weighted-average grant-date fair value of options forfeited and canceled was $ 7.46 for the year ended December 31, 2024.

There were no options granted during the year ended December 31, 2024.

The fair value of the stock option awards granted during the year ended December 31, 2023 were estimated using the Black-Scholes option pricing model with the following assumptions:

Expected volatility 105.0 %

65.20 % - 90.00 %

Weighted-average expected volatility 105.0 %

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Risk-free interest rate 4.03 %

1.65 % - 3.38 %

Dividend yield —

Fair value of Class A common stock $ 6.35

$ 32.67 - $ 113.85

Restricted Stock Units (RSU)

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Balance at December 31, 2024 1,869,561 $ 12.03

The total fair value of RSUs vested for the year ended December 31, 2023 was $ 6.6 million.

In 2022 the Company issued 18,794 RSUs subject to both service and performance based vesting conditions to the Executive Chairman of the Company, and in 2023 the Company issued an additional 20,666 RSUs.

Vesting of the RSUs was based on the achievement of performance goals established for calendar year 2023.

As of December 31, 2023, the established performance measures were not achieved for these RSUs and no expense was recorded for the year.

Stock-Based Compensation Expense

Stock-based compensation expense is included within the consolidated statements of operations and comprehensive loss as follows:

Year Ended December 31,

Cost of services $ ( 1,217 ) $ 5,080

Research and development ( 2,585 ) 1,755

Selling and marketing ( 1,266 ) 5,390

General and administrative 4,742 29,750

Total stock-based compensation expense $ ( 326 ) $ 41,975

The Company recorded a reversal of stock-based compensation of $ 24.7 million and $ 38.2 million during the years ended December 31, 2023 and 2022, respectively, due to forfeiture activities upon employee terminations.

As of December 31, 2023, unrecognized stock-based compensation cost related to the unvested portion of the Company’s stock options was $ 2.7 million, which is expected to be recognized on a graded-vesting basis over a weighted-average period of 1.4 years.

The total fair value of RSUs vested for the years ended December 31, 2024 and 2023 was $ 2.1 million and $ 6.6 million, respectively.

As of December 31, 2024, unrecognized stock-based compensation cost related to the Company’s RSUs was $ 10.7 million, which is expected to be recognized on a graded-vesting basis over a weighted-average period of 1.8 years.

Employee Stock Purchase Plan

The 2021 Employee Stock Purchase Plan (the “2021 ESPP”) authorizes the issuance of shares of Class A common stock pursuant to purchase rights granted to employees.

On January 1 of each year through 2031, the aggregate number of shares of Class A common stock reserved for issuance under the 2021 ESPP may be increased automatically by the number of shares equal to 1 % of the total number of shares of all classes of common stock issued and outstanding immediately preceding December 31.

The 2021 ESPP became open for enrollment in April 2024.

Under the 2021 ESPP, eligible employees may purchase shares of the Company’s Class A common stock at a discount through payroll deductions during each discrete six-month offering period.

The purchase price under each discrete offering period is equal to 85 % of the lesser of the fair market value of the Class A common stock on the first and last day of the offering period.

The first offering period was completed on October 31, 2024 and the Company issued 26,773 shares under the 2021 ESPP during the year ended December 31, 2024.

A total of 569,831 shares of Class A common stock were reserved for future issuance under the 2021 ESPP as of December 31, 2024.

In January 2025, the number of Class A common stock reserved for future issuance under the 2021 ESPP automatically increased by 280,165 shares.

The components of income before incomes taxes consisted of the following:

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Accordingly, the effective tax rate for the Company for the years ended December 31, 2024 and 2023 was 0.6 % and 0.5 %, respectively.

A reconciliation of the anticipated income tax expense/(benefit) computed by applying the

statutory federal income tax rate of 21% to loss before income taxes to the amount reported in the statement of operations and comprehensive loss is as follows:

A reconciliation of the anticipated income tax expense/(benefit) computed by applying the statutory federal income tax rate of 21% to loss before income taxes to the amount reported in the statement of operations and comprehensive loss is as follows:

Year Ended December 31,

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Change in valuation allowance ( 10.7 ) ( 18.4 )

Other 2.1 0.2

Effective tax rate 0.6 % 0.5 %

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Leases 14,801 14,054

Property and equipment — 4,039

Obsolete inventory reserve 12 136

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ROU asset ( 6,252 ) ( 7,353 )

Capitalized software — ( 141 )

Intangible amortization ( 39,024 ) ( 47,846 )

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Federal research and development $ 5,460 2038-2041

Connecticut research and experimental $ 777 2035-2036

Connecticut research and development $ 777 2036

Connecticut research and development $ 511 No expiration

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Future realization of the tax benefits of existing temporary differences and carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period.

As of December 31, 2023 and 2022 the Company performed an evaluation to determine whether a valuation allowance was needed.

As of December 31, 2024 and 2023 the Company performed an

evaluation to determine whether a valuation allowance was needed.

Based on the Company’s analysis, which considered all available evidence, both positive and negative, the Company determined that it is more likely than not that a significant portion of its deferred tax assets will not be realized.

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There are currently no pending federal, state or foreign income tax examinations.

As a result of the Company’s

net operating loss carryforwards, the Company’s federal and state statutes of limitations remain open from 2016 and forward until the net operating loss carryforwards are utilized or expire prior to utilization.

As a result of the Company’s net operating loss carryforwards, the Company’s federal and state statutes of limitations remain open from 2016 and forward until the net operating loss carryforwards are utilized or expire prior to utilization.

Net Loss per Share

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Basic and diluted loss per share $ ( 1.94 ) $ ( 7.23 )

On May 4, 2023, the Company effected a reverse stock split of its Class A common stock at a ratio of 1-for-33.

As a result of the Reverse Stock Split, the Company has retroactively adjusted the weighted-average number of shares of common stock outstanding prior to the Reverse Stock Split by a ratio of 1-for-33 to determine the number of shares of common stock into which they converted.

The following tables summarize the outstanding shares of potentially dilutive securities that were excluded from the computation of diluted net loss per share attributable to common stockholders for the period presented because including them would have been anti-dilutive:

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Outstanding warrants 666,515 1,466,515

1,466,515 666,515

Outstanding earn-out shares

Outstanding earn-out RSUs — 24,019

3,472,368 2,896,860

Outstanding 2021 ESPP shares 20,566 —

Total 2,897,922 3,472,368

Restructuring Costs

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Severance $ 1,853 $ 1,752 $ ( 2,859 ) $ 746

Others 253 18 ( 271 ) —

Total $ 5,023 $ 6,532 $ ( 9,702 ) $ 1,853

Reserve Balance at December 31, 2022

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Severance $ 4,770 $ 6,514 $ ( 9,431 ) $ 1,853

Others — 6,571 ( 6,318 ) 253

253 18 ( 271 ) —

Total $ 5,023 $ 6,532 $ ( 9,702 ) $ 1,853

Expenses related to restructuring activities are included within the consolidated statements of operations and comprehensive loss as follows:

Year Ended December 31,

Cost of services $ 54 $ 139

Research and development 151 3,176

Selling and marketing 548 1,371

General and administrative 999 1,846

Total restructuring expense $ 1,752 $ 6,532

On October 30, 2023, the Company announced a continued strategic realignment of its organization to key priorities which includes the elimination of approximately 50 positions impacted on August 23, 2023, and approximately 35 positions impacted on October 30, 2023.

Together these actions reduced the size of the Company’s workforce by 10 % from the total number that existed at the time of the August reduction in force.

In total, the Company announced cost saving initiatives,

including but not limited to these reductions in force, that are expected to result in an excess of $ 40 million in annual cost reduction.

The Company expects that all remaining cash severance payments will be complete in less than one year.

During the year ended December 31, 2022, the Company’s Compensation Committee of the Board of Directors approved by written consents, dated February 17, 2022, May 2, 2022 and August 11, 2022, a restructuring plan which was fully executed by management and restructuring charges were incurred and recorded in connection therewith, including an exit of the Company’s somatic tumor testing business.

These costs include severance packages offered to the employees impacted by the plan, third party consulting costs, and costs related to closing the Company’s laboratory in Branford, CT.

The plan resulted in the Company eliminating approximately 250 positions.

During the fourth quarter of 2022, the Company announced its strategic realignment resulting in the exit of its reproductive and women’s health testing business, which included carrier screening, noninvasive prenatal, and other ancillary reproductive testing offerings.

The Company ceased accepting samples for these tests on December 14, 2022 and notified its customers impacted by the decision immediately.

As a result, the Company eliminated approximately 500 positions, and ceased operations at its Stamford, CT laboratory.

When combined with the Company’s prior reductions in workforce during 2022, the exit resulted in the elimination of approximately 32.5 % of the Company’s workforce which existed at the time of the announcement.

The Company may incur additional expenses not currently contemplated due to events associated with the reduction in force.

The charges that the Company expects to incur in connection with the reduction in force are estimates and subject to a number of assumptions, and actual results may differ materially.

Supplemental Financial Information

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Cash and cash equivalents $ 85,212 $ 99,681

Restricted cash (included in prepaid expenses and other current assets) — 13,470

Restricted cash (included in other assets) 990 987

Total $ 86,202 $ 100,668

Restricted cash included within prepaid expenses and other current assets as of December 31, 2022 includes $ 12.1 million held in escrow as restricted cash related to the closing of the Acquisition which was released upon expiration of the one year escrow period in May 2023.

Restricted cash included in other assets as of December 31, 2024 and 2023 primarily consists of money market deposit accounts that secure an irrevocable standby letter of credit that serves as collateral for security deposit operating leases.

See Note 10, “ Leases ” for further information.

Prepaid expenses and other current assets consisted of the following:

As of December 31,

Prepaid expenses $ 7,425 $ 8,640

Other current assets 1,079 1,958

Total $ 8,504 $ 10,598

Accounts payable and accrued expenses consisted of the following:

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Accounts payable $ 7,954 $ 10,238

Accrued purchases 12,154 20,314

Accrued expenses 11,504 12,179

Reserves for refunds to insurance carriers 10,586 15,039

Other 25 1,546

Total $ 30,044 $ 37,456

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As of December 31,

Accrued bonus $ 3,784 $ 8,429

Accrued payroll 1,745 3,905

Accrued benefits 6,409 1,529

Accrued commissions 527 1,656

Accrued compensation $ 16,241 $ 12,465

Accrued severance 746 1,853

Current portion of long-term debt 497 4,750

Indemnification liabilities — 13,470

Current portion of the contingent consideration liabilities — 6,019

Current portion of debt issuance costs ( 802 ) —

Other 2,843 2,018

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Warrant liability $ 3,519 $ 2,735

Earn-out contingent liability — 1,600

Third party payor reserve 2,000 12,000

Total $ 5,519 $ 14,735

2023 Capital Raise

On January 31, 2023, the Company raised approximately $ 150.0 million in gross proceeds and announced the closing of an underwritten public offering of 9,962,316 shares of its Class A common stock and a concurrent registered direct offering of 2,353,436 shares of its Class A common stock.

The net offering proceeds received after deducting underwriters’ discounts and commissions payable by the Company were approximately $ 135.4 million.

On April 17, 2023, following the Company’s receipt of stockholder approval for the issuance, the Company issued the remaining 676,868 shares of its Class A common stock to Corvex Select Equity Master Fund LP, Corvex Master Fund LP and Corvex Dynamic Equity Select Master Fund LP in its previously announced registered direct offering for gross proceeds of approximately $ 7.6 million.

2024 Sales Agreement

The Company entered into a sales agreement (the “Sales Agreement”) with TD Securities (USA) LLC (“TD Cowen”) in April 2024, pursuant to which the Company may, but is not obligated to, offer and sell, from time to time, shares of its Class A common stock with an aggregate offering price up to $ 75.0 million through TD Cowen, as sales agent, subject to the terms and conditions described in the Sales Agreement and SEC rules and regulations (the “ATM offering”).

During the year ended December 31, 2024, the Company issued 825,379 shares of its Class A common stock in connection with the ATM offering at an average price

of $ 58.41 per share.

Proceeds received, net of agent fees and other offering expenses, were $ 46.5 million.

As of December 31, 2024, approximately $ 26.8 million of capacity remained available under this ATM offering.

Segment Reporting

The Company’s business is aligned with how the chief operating decision maker (“CODM”) reviews performance and makes decisions in managing the Company.

At December 31, 2023, the Company has identified two reportable segments:

(i) GeneDx inclusive of Legacy GeneDx and Legacy Sema4 data revenues and associated costs and (ii) Legacy Sema4 diagnostics.

The Company’s structure is aligned with how the chief operating decision maker (“CODM”) reviews the business, makes investing and resource allocation decisions and assesses operating performance.

The Company’s CODM is its Chief Executive Officer.

At December 31, 2024, the Company has identified one reportable segment:

GeneDx inclusive of Legacy GeneDx and Legacy Sema4 data revenues and associated costs.

The GeneDx segment primarily provides pediatric and rare disease diagnostics with a focus on whole exome and genome sequencing and, to a lesser extent, data and information services.

The Legacy Sema4 diagnostics segment provided reproductive and women’s health and somatic oncology diagnostic testing and screening products and has been completely shut down.

Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance.

The CODM evaluates segment performance based on revenue and adjusted gross margin.

Other represents the revenues and costs associated with the Legacy Sema4 diagnostics business which was completely shut down in 2023.

The CODM evaluates segment performance based on revenue and adjusted gross profit.

Year ended December 31,

GeneDx Legacy Sema4 Total GeneDx Legacy Sema4 Total

Total GeneDx Other

Revenue $ 302,293 $ 3,157 $ 305,450 $ 194,376 $ 8,190 $ 202,566

Adjusted cost of services 106,376 145 106,521 106,983 2,305 109,288

Adjusted gross profit (loss) (1)

Adjusted gross profit (1)

195,917 3,012 198,929 87,393 5,885 93,278

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Restructuring charges 54 139

Gross profit (loss) $ 82,293 $ 7,713 $ 90,006 $ 44,772 $ ( 71,522 ) $ ( 26,750 )

Gross profit $ 194,397 $ 90,006

(1) Adjusted cost of services and adjusted gross profit exclude depreciation and amortization expense, stock-based compensation expense and restructuring costs.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data