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目錄

美國
證券交易委員會
華盛頓特區20549
表格 10-Q
____________________________________________
（標記一）
x根據1934年證券交易法第13或15(d)條款的季度報告
截至季度結束日期的財務報告2024年9月30日
或者
o根據1934年證券交易法第13或15(d)條款的過渡報告
過渡期從___________ 到___________
委員會文件號 001-39587
____________________________________________
23ANDME控股公司.
（註冊人的確切姓名如其章程所示）
____________________________________________
特拉華州87-1240344
（設立或組織的其他管轄區域）（納稅人識別號碼）
223 N. Mathilda Avenue
Sunnyvale 加利福尼亞州
94086
，（主要行政辦公地址）(郵政編碼)
(650) 938-6300
(註冊人電話號碼，包括區號)
不適用
（前名稱、地址及財政年度，如果自上次報告以來有更改）
____________________________________________
在法案第12(b)條的規定下注冊的證券：
每一類的名稱交易標誌在其上註冊的交易所的名稱
A類普通股，每股面值0.0001美元我本人
The 納斯達克資本市場
請勾選以下內容：（1）在過去12個月內是否根據1934年證券交易法第13或15（d）條的規定提交了所有要求提交的報告（或者在註冊人要求提交這些報告的較短期間內），以及（2）註冊人是否過去90天一直要遵守這些申報要求。 Yes x沒有 o
勾選表示註冊人已在過去12個月內（或更短的時間內，註冊人需要提交文件）按照《S-t條例第405條規則》要求提交了所有互動數據文件。Yes x沒有 o
請勾選本公司是否是大型加速文件提交人、加速文件提交人、非加速文件提交人、小型報告公司或新興增長公司。有關「大型加速文件提交人」、「加速文件提交人」、「小型報告公司」和「新興增長公司」的定義，請查看《交易所法》規定120億.2。
大型加速報告人o加速文件提交人x
非加速文件提交人o較小的報告公司o
新興成長公司 o
如果新興成長型企業，檢查標記是否該註冊機構已選擇不使用交易所法第13(a)條規定的任何新的或修訂的財務會計準則的過渡期。 o
請勾選是否Registrant是外殼公司（根據證券交易法規則12b-2定義）。 是 o沒有 x
截至2024年10月31日， 19,011,874每股行權價11.5美元。7,106,123 普通B類股票，每股面值爲0.0001美元，已發行及流通

目錄

23ANDME HOLDING CO.
目錄
頁碼

目錄

關於前瞻性聲明的注意事項
本季度報告表格10-Q（以下簡稱「表格10-Q」），包括但不限於「管理層對財務狀況和經營成果的討論與分析」部分，涉及《證券法》修正案第27A條和1933年證券法（以下簡稱「證券法」）第21E條和1934年證券交易所法（以下簡稱「交易所法」）的前瞻性陳述。一般而言，非歷史事實的陳述，包括23andMe控股公司（以下簡稱「公司」，「23andMe」，「我們」或「我們的」）可能或假定的未來行動、業務戰略、事件或經營結果，屬於前瞻性陳述。在某些情況下，這些前瞻性陳述可通過使用前瞻性術語來識別，包括但不限於「相信」、「估計」、「預期」、「期待」、「打算」、「計劃」、「可能」、「將」、「潛在」、「項目」、「預測」、「繼續」或「應當」，或者，每種情況下，它們的否定或其他形式或可比較的術語。無法保證實際結果不會與預期大相徑庭。
本表格10-Q中包含的前瞻性聲明基於我們目前的期望和信念，我們認爲這是合理的，涉及對未來發展及其對我們的潛在影響。影響我們的未來發展可能不會如我們所預期。這些前瞻性聲明涉及多種風險、不確定性（其中一些超出我們的控制範圍）和其他假設，這些可能導致實際結果或業績與這些前瞻性聲明所表達或暗示的結果存在重大不同。這些風險和不確定性包括但不限於，我們在2024年3月31日結束的財年度提交給證券交易委員會（「SEC」）的10-k表格中描述的因素，以及後續提交給SEC的報告。如果其中一個或多個風險或不確定性實現，或者我們的任何假設被證實不正確，實際結果可能會與這些前瞻性聲明中預測的結果在重大方面有所不同。我們無義務更新或修訂任何前瞻性聲明，除非根據適用證券法律的要求。
根據其性質，前瞻性陳述涉及風險和不確定性，因爲它們涉及可能發生或可能不會發生的事件並取決於未來的情況。我們提醒您，前瞻性陳述並不代表未來業績的保證，我們的實際經營業績、財務狀況和流動性，以及我們所在行業的發展，可能會與本表格10-Q中包含的前瞻性陳述所述或暗示的情況大不相同。此外，即使我們的經營業績、財務狀況和流動性，以及我們所在行業的發展符合本表格10-Q中包含的前瞻性陳述，這些結果或發展也可能不能預示隨後期間的結果或發展。

目錄

第一部分. 財務資訊
項目1. 基本報表
23ANDME控股公司。
縮表合併資產負債表
(以千為單位，每股數據除外)
（未經審計）
9月30日,
2024		3月31日
2024
資產
流動資產：
現金及現金等價物$126,601 $216,488 
受限現金1,499 1,399 
應收賬款淨額446 3,324 
存貨14,846 12,465 
營業收入待攤費用5,742 4,792 
預付款項及其他流動資產39,650 16,841 
總流動資產188,784 255,309 
資產和設備，淨值24,814 28,351 
經營租賃權使用資產45,104 48,894 
非流動限制性現金8,974 6,974 
內部使用軟件，淨值20,479 20,516 
無形資產, 淨額29,295 33,255 
其他1,486 1,868 
總資產$318,936 $395,167 
負債和股東權益
流動負債:
Accounts payable (includes related party amounts of 零 及 美元3,809）
$6,486 $11,571 
應計費用和其他流動負債（包括相關方金額$1,930 和$6,752，分別)
67,328 42,263 
遞延營業收入（包括相關方金額$21,659 和$10,999，分別)
69,751 64,827 
經營租賃負債9,266 8,670 
流動負債合計152,831 127,331 
遞延營業收入，非流動（包括相關方金額爲 無 和$10,000，分別
— 10,000 
非流動營業租賃負債62,422 67,845 
其他負債1,754 1,471 
負債合計217,007 206,647 
承諾和業務準備金（注11）
股東權益
優先股 - 面值 $0.0001, 10,000,000 於2024年9月30日和2024年3月31日授權的股票數量; 零 截至2024年9月30日和2024年3月31日已發行和流通的股票數量
— — 
普通股，每股面值 $，授權股數：百萬股；發行股數：分別爲2024年6月30日和2023年12月31日：百萬股；流通股數：分別爲2024年6月30日和2023年12月31日：百萬股0.0001 Class A股份， 1,140,000,000 已授權股份， 17,514,204 和 16,169,741 截至2024年9月30日和2024年3月31日，已分別發行和流通的股份；B類股份， 350,000,000 已授權的股份數量， 8,322,160 和 8,336,229 截至2024年9月30日和2024年3月31日，已分別發行和流通的股份 (1)
3 2 
資本公積 (1)
2,403,517 2,361,606 
累積赤字(2,301,591)(2,173,088)
股東權益總額101,929 188,520 
負債和股東權益總額$318,936 $395,167 

(1) 金額已經調整，以反映生效於2024年10月16日的股票拆股。請參閱附註2， “重要會計政策之摘要” 以及附註19，“後續事件”以獲取有關股票拆股的更多信息。
附註是這些未經審計的簡明綜合財務報表的組成部分。

目錄

23ANDME HOLDING CO.
綜合損失及綜合損益簡明綜合表
(以千計，除分享和每分享數據外)
(未經審計)
 截至9月30日的三個月截至9月30日的六個月
 2024202320242023
收入：
服務（包括相關方營業收入$308 and $1,082 截至2024年9月30日和2023年的九個月的未實現收益分別爲$489 and $11,753 截至2024年和2023年9月30日的六個月的時間段）
$38,514 $42,766 $73,193 $96,026 
產品5,557 7,233 11,292 14,837 
總營收 44,071 49,999 84,485 110,863 
營業成本：
Service (includes related party cost of 空 and $20 分別爲截至2024年9月30日和2023年的三個月， 空 and $295 截至2024年和2023年9月30日的六個月，分別）
18,801 25,227 36,050 52,172 
產品2,863 3,043 5,514 6,281 
總成本費用21,664 28,270 41,564 58,453 
毛利潤22,407 21,729 42,921 52,410 
運營費用：
研發費用（包括相關方費用$(386)和$4,907 截至2024年9月30日和2023年的九個月的未實現收益分別爲$185 and $8,208 截至2024年和2023年9月30日止六個月
41,041 54,588 85,678 116,917 
銷售和營銷16,874 18,328 32,346 40,986 
一般和行政23,418 25,290 55,778 76,030 
重組和其他費用2,242 2,654 2,242 6,871 
總營業費用83,575 100,860 176,044 240,804 
營業損失(61,168)(79,131)(133,123)(188,394)
其他收入（費用）：
利息收入，淨額2,009 3,752 4,583 8,059 
其他收入（費用），淨額15 145 (4)477 
稅前損失(59,144)(75,234)(128,544)(179,858)
所得稅的準備金（福利）(41)36 (41)36 
淨損失(59,103)(75,270)(128,503)(179,894)
其他綜合損失，稅後淨額— 954 — 620 
綜合損失總額$(59,103)$(74,316)$(128,503)$(179,274)
歸屬於普通股股東的A和B類普通股的每股淨虧損 (1):
基本和稀釋(1)
$(2.32)$(3.17)$(5.11)$(7.68)
用於計算每股淨虧損的加權平均股數 (1):
基本和稀釋(1)
25,519,65823,742,91425,151,988 23,429,600

(1) 金額已經調整，以反映生效於2024年10月16日的股票拆股。請參閱附註2， “重要會計政策摘要” 以及附註19，“後續事件”以獲取有關股票拆股的更多信息。
附註爲這些未經審計的簡明合併財務報表的組成部分。

目錄

23ANDME HOLDING CO.
股東權益（赤字）基本彙總報表
(以千計，除分享和每分享數據外)
(未經審計)
普通股
附加
實收資本 (1)
累計赤字股東權益合計
(赤字)
股份 (1)
金額 (1)
截至2024年3月31日的餘額24,505,970$2 $2,361,606 $(2,173,088)$188,520 
股票期權行使時發行普通股6,889— 58 — 58 
限制性股票單位解除後發行普通股184,838— — — — 
根據23andMe修訂後的年度激勵計劃，解除限制股票單位後發行普通股607,2221 6,450 — 6,451 
淨股份結算用於基於股票的最低稅額代扣(4,415)— (48)— (48)
基於股票的薪酬費用—— 17,923 — 17,923 
淨虧損—— — (69,400)(69,400)
截至2024年6月30日的餘額25,300,504$3 $2,385,989 $(2,242,488)$143,504 
限制性股票單位解除後發行普通股484,051— — — — 
股票期權最低稅收預扣款的淨股份結算(9,998)— (70)— (70)
根據僱員股票購買計劃發行普通股61,807— 331 — 331 
基於股票的薪酬費用—— 17,267 — 17,267 
淨虧損—— — (59,103)(59,103)
截至2024年9月30日的餘額25,836,364$3 $2,403,517 $(2,301,591)$101,929 

普通股
額外
實收資本 (1)
累積其他綜合版
收入（虧損）		累計赤字股東權益總額
（赤字）
股票 (1)
金額 (1)
截至 2023 年 3 月 31 日的餘額23,059,998$2 $2,220,941 $(620)$(1,506,384)$713,939 
行使股票期權時發行普通股9,036— 85 — — 85 
發行限制性股票單位後發行普通股90,640— — — — — 
根據23andMe第二次修訂和重述的年度激勵計劃，在發行限制性股票單位時發行普通股448,053— 18,630 — — 18,630 
股票最低預扣稅淨額結算(2,949)— (121)— — (121)
股票薪酬支出—— 47,915 — — 47,915 
其他綜合損失—— — (334)— (334)
淨虧損—— — — (104,624)(104,624)
截至2023年6月30日的餘額23,604,778$2 $2,287,450 $(954)$(1,611,008)$675,490 
行使股票期權時發行普通股41,428— 388 — — 388 
發行限制性股票單位後發行普通股217,919— — — — — 
根據23andMe第二次修訂和重述的年度激勵計劃，在發行限制性股票單位時發行普通股2,900— 102 — — 102 
股票最低預扣稅淨額結算(951)— (22)— — (22)
根據員工股票購買計劃發行普通股75,477— 1,411 — — 1,411 
股票薪酬支出—— 22,198 — — 22,198 
其他綜合收益—— — 954 — 954 
淨虧損—— — — (75,270)(75,270)
截至 2023 年 9 月 30 日的餘額23,941,551$2 $2,311,527 $— $(1,686,278)$625,251 

(1) 金額已經調整，以反映生效於2024年10月16日的股票拆股。請參閱附註2， “重要會計政策摘要” 以及附註19，“後續事件”以獲取有關股票拆股的更多信息。

附註爲這些未經審計的簡明合併財務報表的組成部分。

目錄

23ANDME HOLDING CO.
簡明合併現金流量表
(以千爲單位)
(未經審計)
截至9月30日的六個月
20242023
經營活動現金流量：
淨虧損$(128,503)$(179,894)
調整爲淨損失到經營活動現金流量淨使用：
折舊和攤銷7,948 13,714 
內部使用軟件的攤銷和減值4,586 2,514 
基於股票的薪酬費用41,063 74,840 
處置固定資產收益(55)(5)
處置Lemonaid Health Limited的損失— 2,026 
變動 certain 資產和負債，扣除收購和處置的影響：— (504)
運營資產和負債的變化：
應收賬款，淨額（包括相關方金額$1 and $19 截至2024年和2023年9月30日的六個月的時間段）
2,878 396 
存貨(2,381)(4,733)
營業收入待攤費用(950)(406)
預付費用及其他流動資產(174)(2,433)
經營租賃使用權資產3,790 3,529 
其他資產381 664 
Accounts payable (includes related party amounts of $(3,809)和$(3,186) for the six months ended September 30, 2024 and 2023, respectively)
(5,063)(3,951)
Accrued expenses and other current liabilities (includes related party amounts of $(4,822)和$4,993 截至2024年和2023年9月30日的六個月的時間段）
1,899 (5,674)
遞延營業收入（包括相關方金額$661和$11,753) 截至2024年和2023年9月30日的六個月期間)
(5,076)(22,237)
營運租賃負債(4,826)(4,255)
其他負債283 (65)
用於經營活動的淨現金(84,200)(126,474)
投資活動現金流量：
購買物業和設備(566)(715)
出售房產和設備的收益159 5 
資本化內部使用軟件成本(3,449)(4,758)
投資活動中使用的淨現金(3,856)(5,468)
融資活動的現金流：
行使股票期權所得58 473 
在員工股票購買計劃下發行普通股的收益331 1,411 
支付遞延發行成本(2)(263)
支付股權獎勵淨結算相關稅款(118)(142)
融資活動提供的淨現金269 1,479 
現金、現金等價物和受限制現金淨減少額(87,787)(130,463)
現金、現金等價物及受限現金——期初餘額224,861 395,222 
資金現金及受限現金期末餘額$137,074 $264,759 
非現金投資和籌資活動的補充披露:
購買固定資產和設備，包括應付賬款和應計費用$85 $26 
內部使用軟件成本的股票補償資本化$1,099 $2,089 
現金、現金等價物和受限制的現金與綜合資金流量表中顯示的金額的調節：
現金及現金等價物$126,601 $256,386 
受限現金，流動資產1,499 1,399 
非流動限制性現金8,974 6,974 
現金、現金等價物和受限制的現金總額$137,074 $264,759 
附註爲這些未經審計的簡明合併財務報表的組成部分。

目錄

23ANDME HOLDING CO.
壓縮合並財務報表註釋
(未經審計)
1.    業務的組織和描述
23andMe控股有限公司（以下簡稱「公司」或「23andMe」）致力於幫助人們獲取、理解和從人類基因組中受益。該公司正在打造領先的直接面向消費者的精準醫學平台，爲其基因驅動的治療和研究業務提供支持。公司致力於通過向消費者直接提供基因信息、個性化報告、可操作見解以及通過公司的遠程醫療平台Lemonaid Health, Inc.（以下簡稱「Lemonaid Health」）向負擔得起的醫療專業人士提供數字化接入，幫助客戶優化健康。
該公司開創了面向消費者的直接基因測試，爲消費者提供關於其遺傳健康風險、祖源和特徵的獨特個性化信息。該公司是第一家獲得食品藥物管理局（FDA）授權進行面向消費者基因測試的公司，也是唯一一家針對公司向客戶提供的所有載體狀態、遺傳健康風險、癌症易感性和藥代遺傳學報告獲得FDA授權、許可或免於預市場通知的公司。
通過Lemonaid Health的遠程醫療平台，公司將患者與持證的醫療保健專業人士連接起來，提供負擔得起的直接在線醫療保健服務，覆蓋從諮詢到治療的多種常見病症，並使用基於證據的指南和最新的臨床方案。當Lemonaid Health的關聯醫療保健專業人士開處方時，患者可以利用Lemonaid Health的在線藥房進行配藥。患者還可以通過Lemonaid Health訪問某些23andMe基因報告的遠程醫療諮詢。
正如先前披露的那樣，公司於2024年3月28日成立了一個由董事會獨立成員組成的特別委員會（「特別委員會」）。特別委員會的職責是審查公司可能採用的戰略替代方案，以最大限度地提高股東價值。2024 年 4 月 17 日，公司首席執行官（「CEO」）、聯合創始人兼董事會主席安妮·沃西基透露，她正在考慮提出收購她目前不擁有的公司所有已發行股份的提議。沃西基女士還表示，她希望保持對公司的控制權，因此不願意支持任何替代交易。正如先前披露的那樣，2024年7月29日，特別委員會收到了沃西基女士的初步非約束性表示，她有興趣收購她或她的關聯公司或她邀請的任何其他股東展期未擁有的公司所有已發行股份，現金對價爲美元0.40 根據Abeec 2.0 LLC（沃西基女士的關聯實體）（「AbeeC」）於2024年7月31日向美國證券交易委員會（「SEC」）提交的附表13D第2號修正案中規定的每股（按反向股票拆分前計算）（「初步提案」）。2024年8月2日，該公司發佈了一份新聞稿，宣佈了特別委員會對初步提案的回應，包括對沃西基女士的任何修訂提案的某些要求。正如ABeEC應特別委員會的要求於2024年9月11日向美國證券交易委員會提交的附表13D第3號修正案中所披露的那樣，沃西基女士於2024年9月9日通知特別委員會成員，沃西基女士願意考慮該公司的第三方收購提案。2024年9月17日，公司發佈了關於辭職的新聞稿 七 公司董事會的非僱員董事（統稱爲 「辭職董事」）（「辭職」）。正如2024年9月17日辭職董事辭職信中所述，辭職董事表示，這些辭職董事在公司的戰略方向上與沃西基女士不同，由於這種分歧以及沃西基女士的集中投票權，辭職董事認爲辭去董事會職務符合公司股東的最大利益。在AbeEC於2024年9月18日向美國證券交易委員會提交的附表13D第4號修正案中，沃西基女士宣佈，公司將立即開始物色獨立董事加入公司董事會。在AbeEC於2024年9月30日向美國證券交易委員會提交的附表13D第5號修正案中，沃西基女士透露，她不再願意考慮任何第三方收購該公司的提議，她仍然致力於完成對公司的私有化收購。關於本公司宣佈任命 三 作爲公司董事會的獨立董事，ABeEC於2024年10月29日向美國證券交易委員會提交了附表13D的第6號修正案。每位新任命的獨立董事隨後於2024年11月2日被任命爲特別委員會成員，見附註19，”後續活動，” 以獲取更多詳細信息。
公司評估了其組織和管理方式，並確定了二 報告部門：(1) 消費和研究服務，(2) 治療學。公司總部位於加利福尼亞州的陽光谷，並在特拉華州註冊。

目錄

2.    重要會計政策摘要
編制基礎與合併原則
公司的未經審計的簡明綜合財務報表已按照美國通用會計準則（「GAAP」）編制，幷包括公司及其全資子公司、以及公司持有控制財務利益的可變利益實體的帳戶。所有公司間帳戶和交易均在合併時被消除。
截至2024年和2023年9月30日的三個月和六個月，公司的業務主要在美國。在2023年8月1日之前，公司在英國進行的業務微不足道，隨後出售了其英國子公司。
截至2024年9月30日的六個月結束時，相較於公司年度報告中於2024年3月31日結束的財政年度提交給證券交易委員會（SEC）的《10-K表格》，公司的重要會計政策沒有發生實質性變化。
資本結構的變化

正如 Note 19 中更全面地描述的那樣，”後續活動，” 自2024年10月16日起，公司對其所有已發行和流通的A類普通股和b類普通股進行了二十股的反向股票拆分（「反向股票拆分」）。未經審計的簡明合併財務報表及附註中列報的所有股票和每股金額，包括但不限於已發行和流通的股份、普通股的美元金額、額外的實收資本、每股收益/（虧損）和期權，均已對所有列報期限進行了追溯調整，以反映資本結構的這種變化。由於這一變化，A類普通股和b類普通股的授權股份總數或其各自的每股面值沒有變化。
未經審計的中期彙總財務信息
附帶的中期未經審計的簡明合併財務報表。這些未經審計的中期簡明合併財務報表（以下簡稱「簡明合併財務報表」）是按照適用於中期財務報表的美國通用會計準則編制的。這些財務報表是根據SEC規定的規則和法規呈現的，並不包括按照美國通用會計準則編制的年度合併財務報表通常要求的所有披露。因此，這裏包含的信息應與截至2024年3月31日的財年的合併財務報表和附註一起閱讀，這些財務報表是《2024財年10-K表》中包括的。“管理層認爲，未經審計的中期簡明合併財務報表是根據與經審計的合併財務報表相同的基礎編制的，這些財務報表僅包括正常重複的調整，這對於公平陳述公司截至2024年9月30日的財務狀況以及截至2024年9月30日和2018年的六個月內的簡明合併經營業績和現金流量是必要的。截至2024年9月30日的三個月和六個月的經營業績不一定反映預期的截至2025年3月31日或任何其他未來中期或年度期間的運營業績，這是由於業務性質的季節性等其他因素。
財政年度
公司的財政年度截止日期爲3月31日。提及財政2025年指的是截止於2025年3月31日的財政年度，而提及2024年及2023年財政指的是分別截止於2024年3月31日和2023年3月31日的財政年度。
使用估計
依照GAAP要求，編制符合要求的簡明綜合基本報表需要管理層進行會計估計、判斷和假設，這些會計估計、判斷和假設會影響基本報表日期資產和負債的披露金額，以及附註中的附帶資產和負債的披露金額，還有報告期間營業收入和費用的披露金額。受這些會計估計和假設影響較大的項目包括但不限於確定各種履約義務的單獨銷售價格；對於損耗收入的費率和確認模式的估計預計受益期。

目錄

未歸還用於處理的唾液收集工具箱（「工具箱」）的購買；內部使用軟件的資本化和估計使用壽命；長期資產的使用壽命；在業務組合中獲得的無形資產的公允價值；經營租賃的增量借款利率；基於股票的補償，包括股票期權的公允價值的確定和以限制性股票單位（「RSU」）形式支付的年度激勵獎金的確定；在持續經營評估中使用的假設；以及遞延稅資產和不確定稅務狀態的評估。公司基於歷史和預期的結果、趨勢以及它認爲在這種情況下合理的各種其他假設，包括對未來事件的假設，來建立這些估計。實際結果可能與這些估計有所不同，這些差異可能對簡明合併基本報表具有重要影響。
公司沒有意識到需要修訂估計、更新判斷或調整資產或負債帶來的具體事件或情況。這些估計可能會隨着新事件的發生和/或獲得額外信息而發生變化，並將在基本報表中儘快反映出來。
供應商風險集中
公司在提供服務過程中使用的脫氧核糖核酸（「DNA」）微陣列和試劑盒相關的原材料、元件和設備，僅能從第三方供應商處獲取。公司還依賴第三方實驗室服務來處理其客戶樣本。由於供應中斷或行業板塊需求增加，這些關鍵原材料、元件、設備和實驗室服務可能會出現短缺和減速。如果公司無法以可接受的價格獲得特定的原材料、元件、設備或實驗室服務，將被迫減少其實驗室運營，可能對其運營業績產生重大不利影響。
一家供應商佔公司微陣列總採購的百分比， 100此百分比是公司在2024年和2023年截至9月30日的總採購的單個供應商。 100一家單獨的供應商佔公司在2024年和2023年截至9月30日的試劑盒總採購的百分比。 100一個實驗室服務提供商佔公司在2024年和2023年截至9月30日的客戶樣本處理的百分比。
信貸風險集中
潛在使公司面臨信用風險集中的金融工具包括現金、現金及現金等價物和應收賬款。公司將大部分現金及現金等價物存放在一家高質量金融機構，公司定期監控該機構的組成和到期情況。公司的營業收入和應收賬款主要來自美國。有關營業收入的地理分解信息，請參見附註3“營業收入,”。有關營業收入的地理分解信息，請參見附註3。公司在業務常態中向客戶賒賬，根據需要對重要客戶進行信用評估，不要求抵押物。由於公司的應收賬款主要與第三方有關，這些第三方代收公司的信用卡賬款，以及大型跨國公司，信用風險集中受到限制。公司定期監控應收賬款餘額的賬齡。
重要的客戶信息如下：
9月30日,
2024		3月31日
2024
應收賬款的百分比：
客戶C(1)
10 %59 %
客戶F55 %— %
客戶 I— %30 %
客戶J14 %*
Customer K17 %*
•少於10%
(1)客戶C是一家轉售商。


目錄

截至9月30日的三個月截至9月30日的六個月
2024202320242023
營業收入百分比:
客戶C(1)
26 %26 %23 %21 %
客戶B***11 %
•少於10%
(1)客戶C是一個轉售商。
現金、現金等價物和受限制的現金

現金由存放在金融機構的銀行存款組成。美國銀行的現金在聯邦存款保險公司規定的範圍內是受保險的。現金等價物主要由短期貨幣市場所有基金類型組成。公司維持某些受限制的現金金額，限制其提取或使用，這些與公司在陽光谷的運營租賃協議和公司的信用卡處理商相關，此外還有作爲公司的企業信用卡的抵押品。公司持有的總受限制現金爲$10.5 百萬美元和美元8.4 截至2024年9月30日和2024年3月31日，分別爲$百萬。受限制現金的增加與公司在2024年4月簽訂的新信用證有關，該信用證作爲與公司的信用卡處理商相關的抵押品。3.5在2024年11月1日，由於公司簽訂的修訂版信用證，受限制現金餘額增加了$百萬，該信用證作爲與公司的信用卡處理商相關的抵押品。
與收購相關的託管
2021年11月1日，公司完成了對Lemonaid Health的收購，並在收購完成日將資金存入托管帳戶，以涵蓋潛在的購買價格調整，並保障Lemonaid Health前股東的賠償義務。6.0在2023年5月，託管金額的$百萬被釋放。6.2 在2025財年的第一季度，剩餘的託管金額$百萬被釋放。因此，整個託管金額已被釋放。
流動性和持續經營
持續經營

未經審計的中期簡明合併基本報表是以公司將繼續作爲持續經營單位爲假設編制的，這意味着業務操作的持續性、資產的實現以及在正常業務過程中債務的履行。

根據205-40子課題的規定，公司已評估是否存在條件和事件，綜合考慮，對其在此報告中包含的未經審計的中期簡明綜合財務報表發行之後的一年內繼續作爲持續經營實體存在重大疑慮。

公司因其累計虧損和負運營現金流承受了重大經營損失。截至2024年9月30日，公司累計虧損爲$2.3 十億，現金及現金等價物爲$126.6 百萬。公司將在本報告所包含的未經審計的臨時簡明合併基本報表發佈後，需要額外的流動資金來資助其必要支出和財務承諾，期限爲12個月。公司已確定，截至本報告的提交日期，關於公司持續經營能力存在重大疑慮。

爲了改善公司的財務控件和流動性狀況，公司正在努力執行其業務計劃，管理持續的運營費用，實施成本削減措施，以及籌集額外資本。請見第19條，後續事件，”以獲取更多細節。然而，公司能否持續經營取決於公司成功實施其運營和財務計劃的能力，如果公司未能做到這一點和/或無法籌集足夠的資本或完成戰略交易，則可能被迫調整或停止運營。雖然公司相信其策略的可行性，但仍然存在諸多風險和不確定性，這可能會阻礙成功實施公司的運營和財務計劃和/或完成任何交易的能力。因此，不能保證公司將成功實施其運營和財務計劃和/或完成任何交易。請見第1條，業務的組織和描述獲得額外細節信息，請參閱18號附註中的「其他」部分。


目錄

未經審計的中期簡明合併基本報表未反映與資產的可回收性和分類、負債的金額和分類或其他在公司無法持續經營的情況下所需的任何調整。
納斯達克缺陷最低買盤價格
2023年11月10日，公司收到了來自納斯達克上市資格部門的一封違規函件（「首次納斯達克函件」），通知公司未符合納斯達克上市規則5450(a)(1)的要求，要求公司維持每股至少1.00美元的最低買盤價格，繼續在納斯達克全球精選市場上市（「最低買盤要求」）。 公司未能符合最低買盤要求，原因是其A類普通股價格在連續30個交易日低於1.00美元的門檻。 根據首次納斯達克函件，公司有從首次納斯達克函件日期起的最初180個日曆日來恢復符合情況。 公司在最初的符合期內未能恢復符合情況。
2024年5月9日，公司收到了員工發送的通知函，通知公司獲得額外的180天時間，截至2024年11月4日之前，以恢復符合最低買盤要求。該要求基於公司符合公開持股市值和其他適用於納斯達克資本市場首次上市的持續上市要求，除買盤價格要求外，公司已書面通知其在第二符合期內將矯正違規情況。爲了符合資格獲得第二符合期，公司申請將其A類普通股從納斯達克全球精選市場轉移至納斯達克資本市場。
關於上述事項，公司於2024年7月16日向美國證券交易委員會提交了一份關於公司2024年股東年會的確定性代理聲明，該股東年會於2024年8月26日舉行（「年會」）。在年會上，公司的股東以至少三分之二投票權的股東持有人股份的肯定投票通過了一項議案，授權公司董事會自行決定實施對公司現有A類普通股和B類普通股的股票合併，合併比例不低於1比5，不高於1比30，精確比例由公司董事會全權決定並設定在此區間內。於2024年10月7日，公司董事會批准了1:20的股票合併。股票合併自2024年10月16日東部時間凌晨12:01起生效，截至2024年10月30日，公司重新符合最低買盤要求。請參閱附註19，「後續事件」67%)的投票權，批准公司董事會自行決定實施對公司現有A類普通股和B類普通股合併的提案，兩者共同投票作爲單一類進行投票，合併比例不低於1比5，不高於1比30，精確比例由公司董事會全權決定並設定在此區間內。於2024年10月7日，公司董事會批准了1:20的股票合併。股票合併自2024年10月16日東部時間凌晨12:01起生效，截至2024年10月30日，公司重新符合最低買盤要求。請參閱附註19，“後續事件獲得額外細節信息，請參閱18號附註中的「其他」部分。
納斯達克缺陷獨立董事
2024年9月18日，公司收到了員工寄來的違規通知函，通知公司公司未遵守納斯達克上市規則第5605條（「第二封納斯達克信函」）。具體來說，由於辭職的結果，公司不再符合以下要求（集體稱爲「公司治理要求」）：
•納斯達克上市規則5605(b)要求，公司董事會的大多數成員需要是獨立董事（如納斯達克上市規則5605(a)(2)所定義）；
•納斯達克上市規則5605(c)要求公司設立審計委員會，審計委員會至少要有三名成員，每位成員必須(i)是獨立董事， (ii)符合1934年證券交易法修訂規章10A-3(b)(1)中規定的獨立標準， (iii)在過去三年內未參與公司或任何現有子公司的財務報表的編制，(iv)具備閱讀和理解基本財務報表的能力。
•納斯達克上市規則5605(d)要求公司必須成立薪酬委員會，該委員會至少有兩名成員，每位成員必須是獨立董事；和
•納斯達克上市規則5605（e）要求公司除其他事項外，還需獨立董事監督董事提名。
根據第二封納斯達克信函，公司有直到2024年10月3日提交一份計劃以恢復與公司治理要求（「計劃」）的合規性，供員工審查。公司提交了

目錄

計劃於2024年9月26日及2024年10月30日向員工提供，並且公司已恢復符合公司治理要求。請參閱第19備註，“後續事件獲得額外細節信息，請參閱18號附註中的「其他」部分。
最近發佈的會計公告尚未生效
2023年11月，財務會計準則委員會（"FASB"）發佈了《會計準則更新》（"ASU"）第2023-07號，分部報告（主題280）：報告性分部披露的改進，要求按年度和中期披露額外分部信息。該ASU適用於2023年12月15日後開始的財政年度，以及2024年12月15日後開始的財政年度內的中期期間，並要求對財務報表中呈現的所有以前期間進行追溯應用。允許提前採用。公司目前正在評估新標準的影響。
在2023年12月，財務會計準則委員會發布了ASU第2023-09號，所得稅（主題740）：所得稅披露的改進，擴展了實體所得稅率調整表和已支付所得稅信息的披露。該ASU適用於2024年12月15日後開始的財政年度，並可選擇前瞻性或追溯性採用。允許提前採用。公司目前正在評估影響和採用方法。
2024年11月，FASB發佈了ASU No.2024-03《損益表-彙報綜合收益-支出細分披露》，要求在損益表上呈報的特定支出類別（存貨購買、員工薪酬、折舊、攤銷和遞耗）提供更詳細的信息。該ASU適用於2026年12月15日後開始的財政年度，以及2027年12月15日後開始的財政年度內的中期時段。允許提前採納。修訂可以採用以下方式之一進行應用：（1）前瞻性地應用於在本ASU生效日後發佈的財務報表披露時段或（2）回顧性地應用於財務報表中呈現的所有以往時段。公司目前正在評估這項新標準的影響。

目錄

3.    收入
訂閱和支持收入包括以下內容（以百萬美元爲單位）：
以下表格顯示按類別劃分的營業收入:
截至9月30日的三個月截至9月30日的六個月
2024202320242023
金額
收入百分比
金額
收入百分比
金額
收入百分比
金額
收入百分比
(以千爲單位，除了百分比)
時間節點 (1)
個人基因組服務（「PGS」）$27,652 63 %$34,202 68 %$52,049 62 %$65,961 59 %
遠程醫療4,890 11 %6,872 14 %9,929 12 %15,157 14 %
消費服務32,542 74 %41,074 82 %61,978 74 %81,118 73 %
研究服務— — %— — %344 — %2,353 2 %
總計$32,542 74 %$41,074 82 %$62,322 74 %$83,471 75 %
隨着時間的推移 (1)
PGS$9,515 22 %$5,400 11 %$17,624 20 %$10,670 10 %
遠程醫療1,533 3 %2,184 4 %3,141 4 %4,423 4 %
消費服務11,048 25 %7,584 15 %20,765 24 %15,093 14 %
研究服務481 1 %1,341 3 %1,398 2 %12,299 11 %
總計$11,529 26 %$8,925 18 %$22,163 26 %$27,392 25 %
 
按類別的營業收入 (1)
PGS$37,167 84 %$39,602 79 %$69,673 82 %$76,631 69 %
遠程醫療6,423 15 %9,056 18 %13,070 16 %19,580 18 %
消費服務43,590 99 %48,658 97 %82,743 98 %96,211 87 %
研究服務481 1 %1,341 3 %1,742 2 %14,652 13 %
總計$44,071 100 %$49,999 100 %$84,485 100 %$110,863 100 %
(1)有 沒有 截至2024年和2023年9月30日的三個月和六個月的治療營業收入。
下表概括了根據客戶的郵寄地址按地域板塊劃分的營業收入：
截至9月30日的三個月截至9月30日的六個月
2024202320242023
金額
收入的百分比
金額
收入的百分比
金額
收入的百分比
金額
收入的百分比
（以千計，百分比除外）
美國$38,671 88 %$42,185 84 %$73,956 88 %$85,511 77 %
英國1,968 4 %4,163 8 %4,092 5 %18,518 17 %
加拿大2,402 5 %2,558 5 %4,417 5 %4,728 4 %
其他地區1,030 3 %1,093 3 %2,020 2 %2,106 2 %
總計$44,071 100 %$49,999 100 %$84,485 100 %$110,863 100 %

目錄

損壞營業收入
公司通過多種渠道銷售，包括通過公司網站直接面向消費和通過在線零售商。如果客戶未將套件退回進行處理，公司無法完成服務，這可能導致未行使的權利（「損耗」）營業收入。公司確認未退還套件的損耗營業收入爲$5.4 百萬美元和美元4.3 分別爲截至2024年9月30日和2023年9月30日的三個月，分別爲美元9.4 百萬美元和美元8.9 百萬，爲截至2024年和2023年9月30日的六個月。
合同餘額
應收賬款是在相關權利變爲無條件權時記錄的。合同資產包括與公司研究服務合同中履約義務的對應權利相關的金額，並納入預付款和其他流動資產中。截至2024年9月30日，合同資產金額爲 微不足道的 和2024年3月31日。
合同負債包括遞延收入。截止到2024年9月30日和2024年3月31日，消費服務的遞延收入爲$47.2 百萬美元和美元52.3 百萬，分別。在2024年第一季度確認的 1百萬美元收入中，我們確認了來自以前期間滿足或部分滿足的義務的1百萬美元收入，其中2百萬美元是由於變量計費安排下我們的可變補償估計發生變化，1百萬美元是由於客戶和未開票服務應收款準備的釋放。2023年第一季度確認的 百萬美元中，我們確認了 百萬美元的收入。52.3 截至2024年3月31日，消費服務的遞延收入爲百萬美元，公司在2024年9月30日結束的三個月和六個月中分別確認了$10.8 百萬美元和美元32.4 百萬美元作爲營業收入。
截至2024年9月30日和2024年3月31日，研究服務的遞延營業收入爲$22.6 百萬美元和美元22.5 百萬美元。截至2024年9月30日和2024年3月31日，研究服務的遞延營業收入包括$21.7百萬美元和$21.0 百萬美元的關聯方遞延營業收入。截至2024年3月31日，研究服務的遞延營業收入爲$22.5 百萬美元，其中公司在截至2024年9月30日的三個月和六個月內確認了$0.4 百萬美元和美元1.4 百萬美元的營業收入，其中包括$0.3 百萬美元和美元0.5 百萬 分別截至2024年9月30日的三個月和六個月。
剩餘績效承諾
分配給剩餘履約義務的交易價格代表尚未確認的合同收入，包括遞延收入和預計將在未來期間計入並確認的收入。公司已根據ASC主題606使用可用的實用豁免， Revenue from Contracts with Customers （「ASC 606」）未披露PGS和遠程健康服務的未滿足履約義務的價值，因爲這些合同的預計期限爲一年或更短。截至2024年9月30日，分配給研究服務的剩餘履約義務的交易價格總額爲$26.7 百萬。公司預計將在接下來的 86%的金額在接下來的 12 個月內確認，其餘部分則在之後確認。在截至2024年和2023年9月30日的三個月和六個月內，確認的履約義務的營業收入在先前期間內是不重要的。
4.    合作

葛蘭素史克協議及其後修訂

2018年7月，公司與葛蘭素史克（「GSK」）的關聯公司簽署了一項獨家藥物發現和開發合作協議。 四年 該協議分別在2019年和2021年經修訂（經修訂後稱爲「原始GSK協議」），旨在共同鑑定和開發治療劑，附帶葛蘭素史克單方面延長合作期的選擇權。2022年1月，葛蘭素史克選擇行使該選擇權，將獨家目標發現期延長一年至2023年7月23日，此後根據原始GSK協議到期。

公司已經得出結論，GSK被視爲客戶。因此，公司應用ASC 606指南來處理和呈現與公司提供的研究服務相關的GSk收到的費用。公司在原來的GSK協議下的活動，包括報告、藥物靶點發現和聯合指導委員會參與，代表了一個合併履約義務，即交付研究服務。公司根據輸入法識別研究服務收入，與原來的GSK協議相關的各履約義務都是通過衡量進展的方法滿足的。此外，原始的GSK協議爲GSK提供了在合作中根據GSK的選擇包括某些已經確定的現有公司項目的權利，其中每個項目被認爲與研究服務不同。
在原GSk協議到期之前，在進行研究服務的過程中確定了藥物靶點以納入合作。與研究服務的執行相關的成本分攤在發生時記錄在營業收入的消費和研究服務部門。

目錄

對於原始合作中已識別的藥物靶點，公司和GSk繼續平等分擔在原GSk協議下對已識別靶點進行進一步研究、開發和商業化的費用，具體取決於任一方在某些預定的開發里程碑時選擇退出融資的權利。由於在識別藥物靶點後產生的項目費用已包含在當期的合併損益表和綜合損失中的研發支出中。公司還可能分享根據合作商業化產品的淨利潤或損失，或獲得成功商業化產品的特許權使用費。

在2023年10月，公司與GSk達成了對原GSk協議的修訂（稱爲「2023年GSk修訂」），爲GSk提供某些新的、去標識化的、彙總的數據（稱爲「新數據」）的非獨佔許可，並提供與這些新數據相關的某些公司研究服務以換取$20.0百萬的數據訪問費，公司在2024財政年度收到了這筆費用。新數據的許可將於 一年 GSk向公司發出GSk準備使用新數據的通知（稱爲「數據使用通知」）之日到期； 2024年9月，公司與GSk同意將數據使用通知的截止日期從2024年9月30日延長至2024年10月28日。與新數據許可相關的營業收入在績效義務滿足時入賬，並在公司收到來自GSk的數據使用通知時確認，該通知發生在2024年10月28日。與研究服務相關的營業收入將在績效義務滿足時確認，採用輸入法來衡量進展。公司認爲，實際發生的小時數相對於合同約定的小時數是輸入法最準確的進展衡量標準。截止到2024年9月30日，與新數據訪問相關的遞延收入爲$20.0百萬。新數據的許可將於2025年10月28日到期。
根據2023年GSk修正案，公司選擇放棄與GSk和公司在原GSk協議下發起的項目相關的成本分擔和其他研發義務。 三 公司將保留權利，按照這些產品的淨銷售額獲得低至中單數的特許權使用費。 三 「我們即將迎來下一次FDA互動，重點關注潛在將CNm-Au8帶給ALS患者的監管途徑，」Clene總裁兼首席執行官Rob Etherington說。「隨着這一即將到來的時間點，我們對於有可能在今年晚些時候提交新的藥物申請保持樂觀。我們最緊急的優先事項是幫助那些時間緊迫的患者及其家人。」
公司在2024年9月30日和2023年分別確認了與原GSk協議相關的研究服務收入 空 and $1.1和2024年9月30日和2023年分別確認了百萬美元的收入 空 and $11.8和2024年9月30日和2023年分別確認了百萬美元的收入。公司確認了與2023年GSk修正案相關的研究服務收入爲$17 在2024年9月30日結束的三個和六個月內，公司確認了與2023年GSk修正案相關的研究服務收入爲$千。公司也做了 在測試商譽減值時，公司可以選擇 識別與2023年GSK修正案有關的研究服務營業收入，截至2023年9月30日止三個和六個月。
截至2024年9月30日和2024年3月31日，公司有$的遞延營業收入20.0 與2023年GSk修正案相關的金額爲百萬。目標識別前發生的成本分攤金額被包括在營業收入的成本中，爲 空 在截至2024年9月30日的三個月和六個月期間，爲 微不足道的 在截至2023年9月30日的三個月和六個月期間。目標識別後發生的成本分攤金額，包含在研發費用中，爲$(0.4和$0.2 在截至2024年9月30日的三個月和六個月期間，分別爲$4.9 百萬美元和美元8.2 截至2023年9月30日的三個月和六個月分別爲百萬美元。截至2024年9月30日和2024年3月31日，公司的資金爲$1.9 百萬美元和美元10.6 百萬美元，分別與應付給GSk的共享成本的餘額有關，這些成本包含在壓縮合並資產負債表的應付賬款、應計費用和其他當前負債中。
GSK的子公司格拉索集團有限公司被視爲公司的關聯方。見附註18“關聯方交易.”
5.    分段信息
ordinary shares.二 報告分部：（1）消費和研究服務，以及（2）治療學。消費和研究服務分部包括PGS和遠程醫療的營業收入和支出，以及某些合作協議（包括原始GSk協議）下的研究服務營業收入和支出。治療學分部包括與已識別藥物靶點相關的知識產權許可的營業收入和與臨床開發中的治療產品候選的支出。公司的所有營業收入主要來自消費和研究服務分部。請參見第3條，“營業收入 — 營業收入確認，”以獲取更多信息。沒有部門間銷售。
某些部門費用，例如財務、法務、監管和供應商質量、企業通訊、企業發展和首席執行官辦公室，並未作爲報告分部的一部分報告，由CODm（如下定義）審查。這些金額包括在下面的未分配企業中。首席經營決策者（"CODM"）爲首席執行官。 CODm基於評估每個部門的績效

目錄

調整後的EBITDA。調整後的EBITDA是一項非GAAP財務指標，定義爲淨利潤（虧損）減去淨利息收入（支出）、淨其他收入（支出）、所得稅費用（收益）、折舊和攤銷、減值費用、股票酬勞費用以及其他被視爲飛凡或不代表公司業務基本趨勢的項目，包括但不限於：訴訟和解、子公司處置的盈利或虧損、與交易相關的費用以及網絡安全事件費用，如適用於所述期間，扣除概率保險賠償後的金額。
調整後的 EBITDA 是公司管理層和董事會用來理解和評估公司經營業績及趨勢、編制和批准年度預算，以及制定短期和長期經營計劃的關鍵指標。
公司各部門的營業收入和調整後的EBITDA如下:
截至9月30日的三個月截至9月30日的六個月
2024202320242023
(以千爲單位)
細分營業收入： (1)
消費和研究服務$44,071 $49,999 $84,485 $110,863 
總營業收入$44,071 $49,999 $84,485 $110,863 
分段調整後的EBITDA（息稅折舊攤銷前利潤）：
消費和研究服務調整後EBITDA$(8,633)$(6,673)$(17,474)$(12,275)
治療性調整EBITDA(11,975)(26,224)(24,392)(57,363)
未分配的公司(12,804)(12,156)(26,708)(25,215)
總調整後 EBITDA$(33,412)$(45,053)$(68,574)$(94,853)
淨損失與調整後的息稅折舊及攤銷的調節：
淨虧損$(59,103)$(75,270)$(128,503)$(179,894)
調整項:
利息收入，淨額(2,009)(3,752)(4,583)(8,059)
其他（收益）費用，淨額(15)(145)4 (477)
所得稅的準備金（福利）(41)36 (41)36 
折舊和攤銷4,972 4,474 8,983 8,951 
取得的無形資產攤銷1,775 3,638 3,551 7,277 
基於股票的薪酬費用19,486 23,741 41,063 74,840 
處置Lemonaid Health Limited的損失及與交易相關的費用(2)
— 2,127 — 2,375 
訴訟和解費用— 98 — 98 
網絡安全事件費用，扣除可能的保險賠償 (3)
1,523 — 10,952 — 
總調整後 EBITDA$(33,412)$(45,053)$(68,574)$(94,853)
(1)有 沒有 2024年和2023年截至9月30日的治療收入。
(2)請參閱第17條，"子公司的處置附加信息請參閱。
(3)請參考注11，“網絡安全事件附加信息請參閱。

目錄

佔部門營收10%或以上的客戶如下：
截至9月30日的三個月截至9月30日的六個月
2024202320242023
(以千爲單位)
消費和研究服務部門營業收入：
客戶C (1)(2)
$11,586 26 %$13,040 26 %$19,163 23 %$22,751 21 %
客戶B (3)
******$11,753 11 %
•小於 10%

(1)客戶C是一個轉售商。
(2)客戶C的收入主要在美國。
(3)客戶b的收入在英國。
客戶的服務和地域板塊的營業收入可以在附註3「營業收入確認披露」中找到。營業收入。在所呈現的期間，公司幾乎所有的資產淨值（扣除折舊和攤銷）均位於美國。報告部門不會呈現總資產，因爲在評估其業績時不會被CODm審查。
6.    可變利益實體
在提供包括專業醫療諮詢的遠程醫療服務時，公司與多家關聯的專業醫療公司（「PMC」）保持合作關係。此外，關於涉及處方產品銷售的遠程醫療服務，公司與關聯藥房（統稱「關聯藥房」）保持關係，以滿足公司患者的處方需求。在2024年2月15日，公司全資收購了 active 關聯藥房，由此公司不再將關聯藥房視爲可變利益實體（「VIE」）。公司確定，PMC 是可變利益實體，而在被公司收購之前，關聯藥房也是可變利益實體，原因在於各自的股東承擔的資本風險很小，公司在每個PMC中擁有可變利益，而在收購它們之前，關聯藥房也是如此。直到2024年2月15日，公司按照可變利益實體模型合併了PMC和關聯藥房，因爲公司有權指揮對可變利益實體經濟表現影響最大的活動，並享有獲得利益或承擔可能對可變利益實體重要的損失的義務。根據可變利益實體模型，公司將可變利益實體的運營結果和財務狀況作爲公司的簡明合併基本報表的一部分進行報告。由於關聯藥房被公司收購，公司的簡明合併基本報表沒有受到影響。
此外，由於公司向可變利益實體(VIE)提供的財務壓力位（例如，貸款）的直接結果，持有者所持的權益缺乏經濟實質，未能使他們參與可變利益實體所產生的剩餘利潤或損失。因此，所有由可變利益實體確認的收入和支出均分配給公司的股東。

截至2024年9月30日和2024年3月31日，合併資產負債表中列示的VIE的總資產和總負債的綜合賬面價值在消除公司間交易後並不重要。合併利潤表和全面損失表中列示的VIE的營業收入在消除公司間交易後爲$0.9 百萬美元和美元8.5 分別爲截至2024年9月30日和2023年9月30日的三個月，分別爲美元1.8 百萬美元和美元17.5 在截至2024年9月30日和2023年的六個月中分別爲百萬美元。公司保持對VIE的控制能力，有權獲得VIE的所有經濟利益，並有義務承擔VIE的所有預期損失。.

目錄

7.    公允價值衡量
定期公允價值衡量
現金、受限現金、應收賬款、應付賬款和應計負債的公允價值均按其賬面價值表示，因爲其預期收款或付款日期距2024年9月30日和2024年3月31日的時間較短，所以接近公允價值。
Cash equivalents consist primarily of money market funds and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. As of September 30, 2024 and March 31, 2024, the Company had $121.0 million and $211.0 million, respectively, held in money market funds.
The Company had no transfers between levels of the fair value hierarchy of its assets and liabilities measured at fair value during the six months ended September 30, 2024 and the fiscal year ended March 31, 2024.
Nonrecurring Fair Value Measurements
Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date. Certain of the Company’s assets, including intangible assets, are measured at fair value on a nonrecurring basis and are classified in Level 3 of the fair value hierarchy. No nonrecurring fair value measurements were required during the three and six months ended September 30, 2024 and 2023.
8.    Balance Sheet Components
Prepaid Expense and Other Current Assets
Prepaid expense and other current assets consisted of the following:
September 30, 2024March 31, 2024
(in thousands)
Prepaid expenses$12,894 $9,296 
Insurance recovery receivable22,633 2,188 
Other receivables1,751 3,563 
Other current assets2,372 1,794 
Prepaid expenses and other current assets$39,650 $16,841 
Property and Equipment, Net
Property and equipment, net consisted of the following:
September 30, 2024March 31, 2024
(in thousands)
Computer equipment and software$7,392 $7,485 
Laboratory equipment and software51,363 51,635 
Furniture and office equipment8,937 8,929 
Leasehold improvements41,467 41,180 
Capitalized asset retirement obligations853 853 
Property and equipment, gross110,012 110,082 
Less: accumulated depreciation and amortization(85,198)(81,731)
Property and equipment, net$24,814 $28,351 
Depreciation and amortization expense was $2.0 million and $3.0 million for the three months ended September 30, 2024 and 2023, respectively, and $4.0 million and $6.0 million for the six months ended September 30,

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2024 and 2023, respectively. There were no impairments to property and equipment for the three and six months ended September 30, 2024 and 2023.
Operating Lease Right-Of-Use Assets, Net
Operating lease right-of-use assets, net consisted of the following:
September 30, 2024March 31, 2024
(in thousands)
Operating lease right-of-use assets$85,166 $85,166 
Less: accumulated amortization(40,062)(36,272)
Operating lease right-of-use assets, net$45,104 $48,894 
Internal-Use Software, Net
Internal-use software, net consisted of the following:
September 30, 2024March 31, 2024
(in thousands)
Capitalized internal-use software$39,296 $35,918 
Less: accumulated amortization(18,817)(15,402)
Internal-use software, net$20,479 $20,516 
The Company capitalized $3.2 million and $3.4 million in internal-use software during the three months ended September 30, 2024 and 2023, respectively, and $4.5 million and $6.8 million in internal-use software during the six months ended September 30, 2024 and 2023, respectively. In addition, the Company wrote off $1.1 million of internal-use software during the three months ended September 30, 2023 related to the disposition of Lemonaid Health Limited, refer to Note 17 “Disposition of Subsidiary,” for additional information.
Amortization of internal-use software was $1.6 million and $1.3 million for the three months ended September 30, 2024 and 2023, respectively, and $3.4 million and $2.5 million for the six months ended September 30, 2024 and 2023, respectively. Impairment to internal-use software was $1.2 million and nil for the three and six months ended September 30, 2024 and 2023, respectively.
Intangible Assets, Net
Intangible assets, net consisted of the following:
September 30, 2024
Weighted Average Remaining Useful Life
(Years)
Gross Carrying Amount
Accumulated Amortization
Net Carrying Amount
(in thousands, except years)
Customer relationships0.0$14,900 $(14,900)$— 
Partnerships7.19,000 (2,625)6,375 
Trademark2.111,000 (6,417)4,583 
Developed technology4.124,100 (10,042)14,058 
Non-compete agreements2.12,800 (1,633)1,167 
Patents4.05,500 (2,388)3,112 
Total intangible assets$67,300 $(38,005)$29,295 

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 March 31, 2024
Weighted Average Remaining Useful Life
(Years)
Gross Carrying Amount
Accumulated Amortization
Net Carrying Amount
(in thousands, except years)
Customer relationships0.0$14,900 $(14,900)$— 
Partnerships7.69,000 (2,175)6,825 
Trademark2.611,000 (5,317)5,683 
Developed technology4.624,100 (8,320)15,780 
Non-compete agreements2.62,800 (1,353)1,447 
Patents4.55,500 (1,980)3,520 
Total intangible assets$67,300 $(34,045)$33,255 
Amortization expense for intangible assets was $2.0 million and $3.8 million for the three months ended September 30, 2024 and 2023, respectively, and $4.0 million and $7.7 million for six months ended September 30, 2024 and 2023, respectively. There was no impairment to intangible assets during the three and six months ended September 30, 2024 and 2023.
Estimated future amortization expense of the identified intangible assets as of September 30, 2024 was as follows:
 Estimated Amortization
 (in thousands)
Fiscal years ending March 31, 
Remainder of 2025 (Remaining six months)$3,960 
20267,919 
20276,769 
20285,006 
20293,175 
Thereafter2,466 
Total estimated future amortization expense$29,295 
Accrued Expense and Other Current Liabilities
Accrued expense and other current liabilities consisted of the following:
September 30, 2024March 31, 2024
(in thousands)
Accrued payables$8,660 $9,697 
Accrued settlement and legal expenses34,525 3,260 
Accrued compensation and benefits3,235 4,266 
Accrued vacation6,643 7,221 
Accrued bonus7,696 7,420 
Accrued clinical expenses5,467 9,291 
Accrued taxes and other1,102 1,108 
Total accrued expenses and other current liabilities$67,328 $42,263 

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9.    Restructuring
In June 2023, the Company approved a reduction in force intended to restructure and align strategically its workforce with the Company’s strategy and to reduce the Company’s operating costs, primarily in the Consumer and Research Services segment. Subsequently in August 2023, the Company approved another reduction in force primarily intended to restructure and strategically align the Therapeutics segment’s workforce. On August 1, 2024, the Board of Directors of the Company determined that it was in the best interests of the Company and its stockholders to cease operations of the Therapeutics Discovery portion of the Company’s Therapeutics segment, effective August 9, 2024. During the three and six months ended September 30, 2024, the Company recorded restructuring charges of $2.2 million within restructuring and other charges in the condensed consolidated statements of operations, of which $1.9 million was related to cash severance payments and benefits continuation in connection with this reduction in force. During the three and six months ended September 30, 2023, the Company recorded restructuring charges of $2.7 million and $6.9 million, respectively, within restructuring and other charges in the condensed consolidated statements of operations, of which $2.7 million and $6.3 million, respectively, was related to cash severance payments and benefits continuation.
The following table shows the total amount incurred and accrued related to one-time employee termination benefits:
One-Time Employee Termination Benefits
(in thousands)
Accrued restructuring costs included in accrued expenses and other current liabilities as of March 31, 2024$22 
Restructuring charges incurred during the period2,242 
Amounts paid during the period(2,017)
Accrued restructuring costs included in accrued expenses and other current liabilities as of September 30, 2024$247 
The Company does not expect to incur any further material expenses in connection with the Therapeutics Discovery RIF.
10.    Leases
The Company has entered into operating leases for its corporate offices, lab facilities, and storage spaces, with remaining contractual periods ranging from 1.3 years to 6.8 years. For the Company’s facility in Sunnyvale, California (the “Sunnyvale facility”), there is an option to extend the lease for a period of seven years. The Company is not reasonably certain that it will exercise this option and therefore it is not included in its right-of-use (“ROU”) assets and lease liabilities as of September 30, 2024. The Company did not have any finance leases for the periods presented.
On September 16, 2024, the Company entered into an agreement with a third party to sublease 17,312 square feet of the Sunnyvale facility. The total rental commitment over the four-year term of the sublease is $3.2 million. The Company’s sublease agreement: (i) includes renewal and termination options; (ii) provides for customary escalations of lease payments in the normal course of business; (iii) grants the subtenant free rent for specific months during term; (iv) requires variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance and tax payments; and (v) grants the subtenant title of furniture if it extends the lease. The sublease is classified as operating leases whereby sublease income is recognized on a straight-line basis over the sublease term that expires in 2028. Sublease income was $30 thousand for the three and six months ended September 30, 2024. There was no sublease income recognized during the three and six months ended September 30, 2023.
For the three months ended September 30, 2024 and 2023, the Company recorded operating lease costs of $3.3 million and $3.4 million, respectively, and variable operating lease costs of $1.4 million and $1.2 million, respectively. For the six months ended September 30, 2024 and 2023, the Company recorded operating lease costs of $6.7 million and $6.8 million, respectively, and variable operating lease costs of $2.9 million and $2.5 million, respectively.

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As of September 30, 2024, the future minimum lease payments included in the measurement of the Company’s operating lease liabilities were as follows:
September 30,
2024
(in thousands)
Fiscal years ending March 31,
Remainder of 2025 (Remaining six months)$6,527 
202615,946 
202715,472 
202811,666 
202912,016 
Thereafter29,414 
Total future operating lease payments91,041 
Less: imputed interest(19,353)
Total operating lease liabilities$71,688 
11.    Commitments and Contingencies
Non-cancelable Purchase Obligations
In the normal course of business, the Company enters into agreements containing non-cancelable purchase commitments for goods or services with various parties, which include agreements to purchase goods or services that are enforceable and legally binding to the Company. Recognition of purchase obligations occurs when products or services are delivered to the Company, generally within accounts payable, or accrued and other current liabilities. As of September 30, 2024, the Company had a total of $59.6 million in outstanding non-cancelable purchase obligations with a term of 12 months or longer that have not been recognized on its balance sheet.
Legal Matters
Cyber Security Incident
On October 10, 2023, the Company reported that certain information was accessed from individual 23andMe.com accounts without the account users’ authorization (the “Incident”).
As a result of the Incident, multiple class action claims have been filed against the Company in federal and state courts in California, as well as in other U.S. and international jurisdictions, and the Company has received demand letters from attorneys purporting to represent customers seeking arbitration claims. The Company is also responding to inquiries from various governmental officials and agencies. The federal class action claims were coordinated for pretrial proceedings by the Multidistrict Litigation Panel, and on June 5, 2024, co-lead plaintiffs’ counsel were appointed. On July 15, 2024, the Company reached an agreement in principle to settle the putative class action lawsuits currently pending in the U.S. District Court for the Northern District of California (the “Court”).
The parties executed a confidential settlement term sheet on July 29, 2024, which contemplated an aggregate cash payment by the Company of $30.0 million to settle all claims brought on behalf of all persons in the United States whose personal information was impacted by the Incident. In addition, the Company agreed to document various business practice initiatives relating to cybersecurity and provide customers with the option to enroll in a privacy and monitoring service for three years. The Company subsequently reached an agreement with the plaintiffs on all material terms, including payment of $30.0 million (the “Settlement Agreement”). On September 12, 2024, plaintiffs filed a motion asking the Court for preliminary approval of the Settlement Agreement, and the motion was considered at a court hearing on October 29, 2024. On October 29, 2024, the Court deferred the motion for preliminary approval of the Settlement Agreement and asked the parties to provide additional information by November 12, 2024.
The Settlement Agreement, if approved by the Court, will provide for a full release of all claims arising out of the Incident by the class action members (who do not opt out) against the Company. The proposed settlement is not an admission of fault or wrongdoing by the Company; the Company believes that a resolution of these claims at this time is in the best interest of the Company and its stockholders given the costs and risks inherent in litigation.

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During the three months ended September 30, 2024, the Company recognized an additional $1.5 million in expenses related to the Incident. During the six months ended September 30, 2024, the Company recognized $11.0 million in net expenses related to the incident primarily consisting of $33.1 million legal fees incurred and the proposed settlement amount, partially offset by probable insurance recoveries of $22.1 million as of September 30, 2024, within general and administrative expense in the condensed consolidated statements of operations and comprehensive loss. As of September 30, 2024, the Company had accrued a payable related to the settlement of $30.0 million, and insurance recoveries of $22.6 million were included in prepaid and other current assets in the condensed consolidated balance sheets.
Indemnification
The Company enters into indemnification provisions under agreements with other companies in the ordinary course of business, including, but not limited to, collaborators, landlords, vendors, and contractors. Pursuant to these arrangements, the Company agrees to indemnify, defend, and hold harmless the indemnified party for certain losses suffered or incurred by the indemnified party as a result of the Company’s activities. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable. As of the date of this filing, the Company has never incurred costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the Company believes that the fair value of these provisions is not material. The Company maintains insurance, including commercial general liability insurance and product liability insurance, to offset certain potential liabilities under these indemnification provisions. In addition, the Company indemnifies its officers, directors, and certain key employees against claims made with respect to matters that arise while they are serving in their respective capacities as such, subject to certain limitations set forth under applicable law, the Company’s Bylaws, and applicable indemnification agreements. As of September 30, 2024, the Company was not aware of any known events or circumstances that have resulted in a material claim related to these indemnification obligations.
12.    Stockholders’ Equity
Common Stock
The Company has authorized Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. Holders of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to ten votes per share. Each share of Class B common stock is convertible into one share of Class A common stock any time at the option of the holder and is automatically converted into one share of Class A common stock upon transfer (except for certain permitted transfers). Once converted into Class A common stock, the Class B common stock will not be reissued.
Earn-Out Shares
As of September 30, 2024 and March 31, 2024, the Class A common stock included 190,707 shares held by VGAC founders (“Earn-Out Shares”) that are subject to a lock-up of seven years from June 16, 2021, the closing date of the Merger. The lock-up has an early release effective (i) with respect to 50% of the Earn-Out Shares, upon the closing price of the Company’s Class A common stock equaling or exceeding $250.00 per share for any 20 trading days within any 30-trading-day period, and (ii) with respect to the other 50% of the Earn-Out Shares, upon the closing price of the Company’s Class A common stock equaling or exceeding $300.00 per share for any 20 trading days within any 30-trading-day period; provided that the transfer restrictions applicable to the Earn-Out Shares will terminate on the date following the closing date on which the Company completes a liquidation, merger, amalgamation, capital stock exchange, reorganization, or other similar transaction that results in all of the Company’s public stockholders having the right to exchange their shares of Class A common stock for cash, securities, or other property (a “Liquidation Event”), if such Liquidation Event occurs prior to the date that the stock price thresholds referenced in (i) and (ii) are met. As of September 30, 2024, the Company did not meet any earn-out thresholds. The Earn-Out Shares are issued and outstanding Class A common shares that cannot be forfeited, and as such, meet the criteria for equity classification in accordance with ASC 505, Equity.

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Reserve for Issuance
The Company has the following shares of Class A common stock reserved for future issuance, on an as-if-converted basis:
 September 30,
2024		March 31,
2024
Outstanding stock options3,134,8503,536,989
Outstanding restricted stock units3,401,9972,202,834
Remaining shares available for future issuance under Amended and Restated 2021 Incentive Equity Plan3,498,2195,563,844
Remaining shares available for future issuance under Employee Stock Purchase Plan580,456642,263
Total shares of common stock reserved10,615,52211,945,930
At-the-Market (“ATM”) Offering
On February 6, 2023, the Company entered into a sales agreement with Cowen and Company, LLC (“Cowen”), as sales agent, pursuant to which the Company may sell shares of its Class A common stock for an aggregate up to $150.0 million under at-the-market offering program (the “ATM program”). The Company will pay Cowen a commission of 3.0% of the gross proceeds for the Class A common stock sold through the ATM program. As of September 30, 2024, the Company had not made any sales under the ATM program. The sales agreement will terminate upon the earliest of (a) the sale of the maximum number or amount of the shares permitted to be sold under the sales agreement and (b) the termination of the sales agreement by the parties thereto.
13.    Equity Incentive Plans and Stock-Based Compensation
Incentive Equity Plans
On September 6, 2023 (the “Effective Date”), the Company’s stockholders approved an amendment and restatement of the 23andMe Holding Co. 2021 Incentive Equity Plan (the “2021 Plan” and, as amended and restated, the “A&R Plan”). The terms of the A&R Plan replaced the existing terms of the 2021 Plan.

As a result of the Reverse Stock Split, on October 16, 2024, the Company amended and restated the A&R Plan, to reflect, pursuant to the provisions of Sections 4(e) and 17(a) thereof, the proportionate adjustment of the number of shares of Company’s Class A common stock authorized and available for issuance under the A&R Plan to 10,034,656 shares using the same one-for-twenty ratio used to consummate the Reverse Stock Split (the “Second A&R Plan”). Additionally, the maximum number of shares of Class A common stock that remained available for issuance pursuant to Incentive Stock Options (“ISO”) under the A&R Plan as of the effective time of the Reverse Stock Split was proportionally adjusted .
In connection with such amendment, pursuant to Section 4(e) of the A&R Plan, the Company’s Board of Directors proportionally adjusted the number of shares of Class A common stock subject to outstanding awards granted pursuant to the A&R Plan and the exercise price per share of Class A common stock of each such award to reflect the impact of the Reverse Stock Split. The impact of the Reverse Stock Split has been applied retroactively to all disclosures.
Pursuant to the Second A&R Plan, the aggregate number of shares of Class A common stock that may be issued or transferred under the Second A&R Plan shall be increased on an annual basis by a number equal to (x) 5.0% of the aggregate number of shares of Class A common stock and Class B common stock, taken together, outstanding as of the last day of the immediately preceding calendar year or (y) such lesser number of shares of Class A common stock as may be determined by the Compensation Committee of the Company’s Board of Directors. Under the Second A&R Plan, options (including non-statutory options and ISO), stock appreciation rights, restricted stock, RSUs, and other stock-based awards may be granted to employees, non-employee directors and certain consultants and advisors of the Company and its subsidiaries. Options have a contractual life of up to ten years. The exercise price of a stock option shall not be less than 100% of the estimated fair value of the shares on the date of grant, as determined by the Board of Directors. For ISO as defined in the Internal Revenue Code of 1986, as amended (the “Code”), the exercise price of an ISO granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the underlying stock on the date of grant as

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determined by the Board of Directors. The Company’s options generally vest over three to four years. Under the Second A&R Plan, stock option awards entitle the holder to receive one share of Class A common stock for every option exercised.
Time-based RSUs granted pursuant to the Second A&R Plan generally vest ratably over a period ranging from one to four years and are subject to the participant’s continuing service to the Company over that period. RSUs issued pursuant to the 23andMe Second Amended and Restated Annual Incentive Plan (the “AIP”) upon the achievement of certain pre-determined annual performance metrics, as discussed below, vest immediately upon issuance. Until vested, RSUs do not have the voting and dividend participation rights of Class A common stock and the shares of Class A common stock underlying the awards are not considered issued and outstanding.
The Company issues new shares of Class A common stock upon the exercise of stock options, the vesting and settlement of RSUs, and the issuance of shares purchased under the ESPP (as defined below).
In February 2022, the Compensation Committee of the Company’s Board of Directors adopted a RSU conversion and deferral program for non-employee directors. The purpose of the program is to provide non-employee directors with the option to convert all or a portion of their cash compensation into a RSU award under the Second A&R Plan and the opportunity to defer settlement of all or a portion of their RSU awards. In connection with the Resignations, the Company released all prior deferred RSU awards for the two non-employee directors who elected to defer settlement of their RSU awards. As of September 30, 2024, there were no non-employee directors eligible to participate in the program.
On June 9, 2022, the Compensation Committee of the Company’s Board of Directors adopted the AIP, pursuant to which, beginning in fiscal 2023, employees and certain service providers of 23andMe, Inc. and its affiliates were eligible to receive annual incentive bonuses in the form of cash or RSUs issued by the Company under the Second A&R Plan, based upon the Company’s achievement of certain pre-established financial, operational, and/or strategic performance metrics. On June 3, 2024, the Company paid annual incentive bonuses in the form of RSUs based upon the Company’s achievement of certain pre-established performance metrics during the one-year performance period ended March 31, 2024 and as determined by the Compensation Committee of the Company’s Board of Directors. The number of RSUs granted was determined by dividing the dollar amount of the AIP annual incentive bonuses by the trailing average closing price of the Company’s Class A common stock for the 20 trading days preceding the date of payment resulting in the grant of 607,222 shares underlying fully-vested RSUs on June 5, 2024.
The Company accounts for the RSUs issued under the AIP (the “AIP RSUs”) as liability awards, and adjusts the liability and corresponding expenses at the end of each quarter until the date of settlement, considering the probability that the performance conditions will be satisfied. The Company recorded stock-based compensation expense of $2.9 million and $2.4 million related to the AIP RSUs for the three months ended September 30, 2024 and 2023, respectively, and $7.0 million and $6.8 million for the six months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and March 31, 2024, the liability of the AIP RSUs was $7.0 million and $6.5 million, respectively, which was included in other current liabilities on the condensed consolidated balance sheet.
Stock Option Activity
Stock option activity and activity regarding shares available for grant under the Second A&R Plan are as follows:
Options Outstanding
Outstanding
Stock
Options 		Weighted-Average
Exercise Price		Weighted-Average
Remaining
Contractual
Life (Years)		Aggregate
Intrinsic
Value
(in thousands, except share, years, and per share data)
Balance as of March 31, 20243,537,668$73.62 5.1$306 
Granted88,615$6.82 
Exercised(6,889)$8.46 
Canceled/forfeited/expired(484,544)$86.04 
Balance as of September 30, 20243,134,850$69.95 5.0$43 
Vested and exercisable as of September 30, 20242,457,428$78.52 4.1$31 
The weighted average grant date fair value per share of options granted was $4.61 and $17.40 for the six months ended September 30, 2024 and 2023, respectively. The total intrinsic value of vested options exercised for the six months

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ended September 30, 2024 and 2023 was immaterial and $1.0 million, respectively. As of September 30, 2024, unrecognized stock-based compensation expense related to unvested stock options was $17.4 million, which is expected to be recognized over a weighted-average period of 2.1 years. Due to a valuation allowance on deferred tax assets, the Company did not recognize any tax expense or benefit from stock option exercises for the three and six months ended September 30, 2024 and 2023.
The Company estimated the fair value of options granted using the Black-Scholes option-pricing model. The fair value of stock options is being amortized on a straight-line basis over the requisite service period of the awards.
The weighted average Black-Scholes assumptions used to value stock options at the grant dates are as follows:
Three Months Ended September 30,Six Months Ended September 30,
2024202320242023
Min
Max
Min
Max
Min
Max
Min
Max
Expected term (years)6.06.05.86.06.06.05.86.0
Expected volatility range75 %75 %78 %79 %75 %75 %78 %79 %
Expected weighted-average volatility75%79%75%79%
Risk-free interest rate3.5 %3.5 %4.4 %4.4 %3.5 %3.5 %3.6 %4.4 %
Expected dividend yield— — — — — — — — 
Restricted Stock Units
The following table summarizes the RSU activity under the equity incentive plans and related information:
 Unvested RSUs Weighted-Average
Grant Date Fair
Value Per Share
Balance as of March 31, 20242,203,078$45.86 
Granted3,070,895$9.36 
Vested(1,276,111)$26.41 
Canceled/forfeited(595,865)$22.24 
Balance as of September 30, 20243,401,997$24.34 
As of September 30, 2024, unrecognized stock-based compensation expense related to outstanding unvested RSUs was $73.6 million, which is expected to be recognized over a weighted-average period of 2.4 years.
Stock Subject to Vesting
In November 2021, in connection with the acquisition of Lemonaid Health ( the “Lemonaid Acquisition”), the Company granted 187,352 shares of Class A common stock with an aggregate grant date fair value of $43.9 million to two recipients, each of whom was a former stockholder and officer of Lemonaid Health (each, a “Former Lemonaid Officer”) and each of whom, following the closing of the Lemonaid Acquisition, joined the Company’s management team. The shares were scheduled to vest over a four-year period in quarterly installments beginning on February 1, 2022, subject to the respective recipient’s continued employment with the Company. In connection with the Lemonaid Acquisition, each of these recipients entered into a relinquishment agreement that provides that during the four-year period that commenced on November 1, 2021 (the “Protection Period”), the Company will not (i) terminate the recipient’s employment without cause, (ii) materially reduce the recipient’s base salary or the benefits to which similarly-situated executive employees of the Company or the Company’s subsidiaries are entitled, other than a broad-based reduction to the same extent that applies to such similarly-situated executive employees, or (iii) relocate the recipient’s principal place of employment to a location outside of a 50-mile radius of their current principal place of employment. If any such event occurs during the Protection Period or in the event of the recipient’s death or disability, then the unvested portion(s) of these awards will immediately vest.
On June 30, 2023, the employment of one of the Former Lemonaid Officers terminated, which resulted in $22.0 million of stock-based compensation expense related to these awards recognized within general and administrative expenses within the condensed consolidated statement of operations.

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The Company recognized total stock-based compensation expense related to these awards of $0.4 million and $25.1 million for the three and six months ended September 30, 2023, respectively, within general and administrative expenses. There was no stock-based compensation expense related to these awards recognized during the three and six months ended September 30, 2024. As of September 30, 2024, there was no remaining unamortized stock-based compensation expense associated with these awards.
Employee Stock Purchase Plan
On June 10, 2021, the shareholders of VGAC approved the 23andMe Holding Co. Employee Stock Purchase Plan (“ESPP”). As a result of the Reverse Stock Split, on October 16, 2024, the Company amended and restated the ESPP, to reflect, pursuant to the provisions of Sections III.C and X thereof, the proportionate adjustment of the number of shares of Company’s Class A common stock authorized and available for issuance under the ESPP to 580,456 shares using the same one-for-twenty ratio used to consummate the Reverse Stock Split (the “A&R ESPP”). Additionally, Section III.B of the ESPP, which provides for the automatic annual increase in the number of shares available for issuance under the ESPP, was revised to make proportionate adjustments to reflect the Reverse Stock Split. Accordingly, the number of shares of the Company’s Class A common stock reserved for issuance will automatically increase on January 1 of each calendar year, beginning on January 1, 2025, by the lesser of (i) an amount equal to one percent (1.0%) of the total number of shares of Class A and Class B common stock outstanding as of the last day of the immediately preceding December 31st, (ii) 250,000 shares, or (iii) a lesser number of shares as determined by the Board of Directors in its discretion. No other material modifications or amendments were made to the ESPP.
In connection with such amendment, pursuant to Section III.C of the ESPP, the Company’s Board of Directors also proportionally adjusted the maximum number of shares of Class A common stock purchasable per ESPP participant during any offering period and on any one purchase date during that offering period, the number of shares in effect under each outstanding purchase right, the number of shares issued and to be issued under the ESPP, and the price per share in effect under each outstanding purchase right to reflect the impact of the Reverse Stock Split.
The A&R ESPP provides for concurrent 12-month offerings with successive six-month purchase intervals commencing on March 1 and September 1 of each year and purchase dates occurring on the last day of each such purchase interval (i.e., August 31 and February 28). The A&R ESPP contains a rollover provision whereby if the price of the Company’s Class A common stock on the first day of a new offering period is less than the price on the first day of any preceding offering period, all participants in a preceding offering period with a higher first day price will be automatically withdrawn from such preceding offering period and re-enrolled in the new offering period. The rollover feature, when triggered, will be accounted for as a modification to the preceding offering period, resulting in incremental expense to be recognized over the new offering period.

The Company estimated the fair value of the shares issued pursuant to the A&R ESPP using the Black-Scholes option-pricing model. The fair value is amortized on a straight-line basis over the requisite service period, which is the withholding period. During the six months ended September 30, 2024 and 2023, 61,807 and 75,472 shares of the

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Company’s Class A common stock, respectively, were purchased under the A&R ESPP, at an average exercise price of $5.35 and $18.70, respectively.

The per share weighted average grant date fair value of shares issued pursuant to the A&R ESPP for the six months ended September 30, 2024 and 2023 was $2.52 and $8.78, respectively, using the following assumptions:
Three Months Ended September 30,Six Months Ended September 30,
2024202320242023
Min
Max
Min
Max
Min
Max
Min
Max
Expected term (years)0.51.00.51.00.51.00.51.0
Expected volatility76 %77 %67 %73 %76 %77 %67 %73 %
Expected weighted-average volatility76%70%76%70%
Risk-free interest rate4.4 %4.8 %5.4 %5.5 %4.4 %4.8 %5.4 %5.5 %
Expected dividend yield— — — — — — — — 
Stock-Based Compensation
Total stock-based compensation expense, including stock-based compensation expense related to awards classified as liabilities, was included in costs and expenses as follows:
 Three Months Ended September 30,Six Months Ended September 30,
 2024202320242023
 (in thousands)
Cost of service revenue$871 $1,041 $1,847 $3,099 
Cost of product revenue442 456 835 870 
Research and development8,565 10,938 19,636 22,630 
Sales and marketing2,155 2,016 4,614 3,734 
General and administrative (1)
7,150 9,290 13,828 43,866 
Restructuring and other charges303 — 303 641 
Total stock-based compensation expense$19,486 $23,741 $41,063 $74,840 
(1)Includes $22.0 million of stock-based compensation charges related to the termination of a Former Lemonaid Officer during the six months ended September 30, 2023.
14.    Net Loss Per Share Attributable to Common Stockholders
The net loss attributable to common stockholders is allocated on a proportionate basis, and the resulting net loss per share is identical for Class A common stock and Class B common stock under the two-class method.
The Company’s stock options, RSUs, restricted stock awards subject to vesting, estimated RSUs to be issued under the AIP, and estimated shares to be issued under the ESPP are considered to be potential common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive.
Net loss attributable to common stockholders was equivalent to net loss for all periods presented.

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The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the periods presented:
 Three Months Ended September 30,Six Months Ended September 30,
 2024202320242023
 
Class A
Class B
Class A
Class B
Class A
 
Class B
Class A
Class B
 
(in thousands, except share and per share data)
Numerator:
Net loss attributable to common stockholders$(39,822)$(19,281)$(48,699)$(26,571)$(85,949)$(42,554)$(115,546)$(64,348)
Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted17,194,5688,325,09015,361,2808,381,63416,822,7708,329,21815,048,6898,380,911
Net loss per share attributable to common stockholders:
Net loss per share attributable to common stockholders, basic and diluted$(2.32)$(2.32)$(3.17)$(3.17)$(5.11)$(5.11)$(7.68)$(7.68)
The potential shares of Class A common stock outstanding that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive were as follows:
 
Three and Six Months Ended September 30,
 20242023
Outstanding stock options3,134,8503,781,897
Unvested restricted stock units3,401,9972,036,251
Shares subject to vesting— 15,066
ESPP325,939283,111
Total6,862,7866,116,325
There were no potential shares of Class B common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented.
15.    Retirement Benefit Plans
The Company has established a 401(k) retirement plan that allows participating employees in the U.S. to contribute as defined by the terms of the plan and subject to the limitations under Section 401(k) of the Code. The Company matches the greater of 100% of the first 2% or 100% of the first $2,300 (subject to annual compensation and contribution limits) of employee contributions. The Company recognized matching contributions cost of $0.6 million and $0.5 million for the three months ended September 30, 2024 and 2023, respectively, and $1.1 million and $1.4 million for the six months ended September 30, 2024 and 2023, respectively.
16.    Income Taxes
The Company computes the provision for income taxes by applying the estimated annual effective tax rate to year-to-date income from recurring operations and adjusts the provision for discrete tax items recorded in the period. The Company’s annual estimated effective tax rate differs from the U.S. federal statutory rate primarily as a result of a valuation allowance against its deferred tax assets.
An immaterial tax benefit was recognized for the three and six months ended September 30, 2024, and an immaterial tax provision was recognized for the three and six months ended September 30, 2023. The provision tax

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expense or benefit from income taxes is reflected on the condensed consolidated statements of operations and comprehensive loss for the periods. The Company continues to maintain a full valuation allowance on the remaining net deferred tax assets of the U.S. entities as it is more likely than not that the Company will not realize the deferred tax assets. Utilization of net operating loss carryforwards may be subject to future annual limitations provided by Section 382 of the Code and similar state provisions.
The Company files income tax returns in the U.S. federal jurisdiction and various states. As of the date of this filing, the Company is not currently under examination by income tax authorities in federal, state, or other jurisdictions. All tax returns will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or credits.
17.    Disposition of Subsidiary
Disposition of Lemonaid Health Limited
On August 1, 2023, the Company completed the sale of Lemonaid Health Limited, its wholly-owned, indirect U.K. subsidiary. Lemonaid Health Limited was not a significant subsidiary, and the disposition of Lemonaid Health Limited did not constitute a strategic shift that would have a major effect on the Company’s operations or financial results. As a result, the results of operations for Lemonaid Health Limited were not reported as discontinued operations under the guidance of ASC 205 “Presentation of Financial Statements.” During the three and six months ended September 30, 2023, the Company recorded $2.1 million and $2.4 million, respectively, of loss on the disposition of Lemonaid Health Limited and transaction-related costs within general and administrative expenses. There were no charges incurred during the three and six months ended September 30, 2024.
18.    Related Party Transactions
As described in Note 4, “Collaborations,” in July 2018, the Company and GSK entered into the original GSK Agreement, and there were transactions with GSK during the three months ended September 30, 2024 and 2023. At the time the original GSK Agreement was entered into, GSK also purchased shares of Series F-1 redeemable convertible preferred stock of 23andMe, Inc. These shares were converted into a like number of shares of 23andMe, Inc. Class B common stock immediately prior to the Merger and were exchanged pursuant to the share conversion ratio provided for in the Merger Agreement into shares of the Company’s Class B common stock. GSK had a 19.7% and 19.9% voting interest in the Company as of September 30, 2024 and March 31, 2024, respectively.
The Anne Wojcicki Foundation, which subscribed for 125,000 shares of the Company’s Class A common stock in the PIPE investment in connection with the Merger, is affiliated with the Company’s CEO and therefore a related party.
In January 2024, the Company entered into a research services agreement (the “TWF Agreement”) and related statement of work (the “initial SOW”) with the Troper Wojcicki Foundation (“TWF”) with the goal of expanding scientific knowledge in the field of lung cancer using the Company’s phenotype and genotype data to build large scale research cohorts. At the time, Susan Wojcicki was a director and officer of TWF, and a sibling of the Company’s CEO, Anne Wojcicki, and therefore the Company determined that TWF is a related party. The TWF Agreement has a term of five years through December 21, 2028. The fees under the initial SOW are $5.4 million, payable in installments over the term of the TWF Agreement, with certain payments being subject to the achievement of specified milestones. The Company recognized revenue from the TWF Agreement of $0.3 million and nil during the three months ended September 30, 2024 and 2023, respectively, and $0.5 million and nil during the six months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and March 31, 2024, the Company had deferred revenue of $1.7 million and $1.0 million, respectively, associated with the TWF Agreement.
19.    Subsequent Events
Capital Structure - Reverse Stock Split
As previously disclosed, at the Annual Meeting, the Company’s stockholders, by an affirmative vote of the holders of at least two-thirds (67%) of the voting power of the outstanding shares of the Company’s Class A common stock and Class B common stock, voting together as a single class, approved a proposal authorizing the Company’s Board of Directors, in its discretion, to effect a reverse stock split of the Company’s outstanding shares of Class A common stock and Class B common stock, respectively, by a ratio of not less than one-for-five and not more than one-for-thirty, with the exact ratio to be set within this range by the Company’s Board of Directors in its sole discretion.


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On October 7, 2024, the Board approved the Reverse Stock Split at a ratio of one-for-twenty, to be effective at 12:01 a.m. Eastern Time on October 16, 2024. On October 11, 2024, the Company filed the Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split, which became effective as of 12:01 a.m., Eastern Time on October 16, 2024. As a result of the Reverse Stock Split, every 20 shares of the Company’s Class A common stock and Class B common stock were automatically combined into one issued and outstanding share of the Company’s respective Class A common stock and Class B common stock, without any change in their respective par values per share.

The Company did not issue fractional shares in connection with the Reverse Stock Split. Instead, stockholders who otherwise would have been entitled to receive fractional shares because they held a number of shares not evenly divisible by the Reverse Stock Split ratio were automatically entitled to receive an additional fraction of a share of Class A common stock or Class B common stock, as applicable, to round up to the next whole share.

Commencing on October 16, 2024, trading of the Company’s Class A common stock continued on The Nasdaq Capital Market on a Reverse Stock Split-adjusted basis. The Company’s trading symbol remains “ME.”
The impact of the Reverse Stock Split was applied retroactively for all periods presented in accordance with applicable guidance. There was no change to the total number of authorized shares of Class A common stock of 1,140,000,000 and the total number of authorized shares of Class B common stock of 350,000,000.
Nasdaq Minimum Bid Requirement
On October 30, 2024, the Company received written notice (the “Compliance Notice”) from the Staff informing the Company that it has regained compliance with the Minimum Bid Requirement. The Staff notified the Company in the Compliance Notice that, from October 16, 2024 to October 29, 2024, the closing bid price of the Company’s Class A common stock had been $1.00 per share or greater and, accordingly, the Company had regained compliance with the Minimum Bid Requirement and that the matter was now closed.
Appointment of Independent Directors and Nasdaq Listing Rule 5605
On October 29, 2024, the Company announced the appointment of three independent directors to the Company’s Board of Directors, each of whom were appointed to the Audit Committee and Compensation Committee (the “Appointments”). On October 30, 2024, the Company received a letter from the Staff informing the Company that, as a result of the Appointments, the Company has regained compliance with the Corporate Governance Requirements.
Costs Associated with Exit or Disposal Activities
On November 8, 2024, the Company’s Board of Directors approved a reduction in force related to both its Consumer and Therapeutics segments (the “November Reduction in Force.”) The November Reduction in Force also includes the closure of substantially all operations in the Company’s Therapeutics operating segment (together with the November Reduction in Force, the “Reduction Plan”). The Reduction Plan is intended to restructure and strategically align the Company’s workforce and organization with the Company’s current strategy and to reduce the Company’s operating costs.
The Company expects to complete the Reduction Plan substantially during the third quarter of its fiscal 2025, with certain affected employees retained through a transition period expected to end no later than the end of fiscal 2025.
The Company expects to recognize restructuring charges in connection with the November Reduction in Force with respect to severance payments, benefits continuation, and stock compensation charges associated with the modification of certain stock options and restricted stock units (“equity compensation charges”). All such charges are expected to total approximately $11.7 million, of this amount, severance payments and benefit continuation charges are estimated to be approximately $9.3 million and are expected to be recognized primarily during the third quarter of fiscal 2025, with the majority of such charges anticipated to be paid in cash during the same fiscal quarter. Equity compensation charges are expected to be approximately $2.4 million and are expected to be recognized primarily in the third quarter of fiscal 2025, and will not result in any cash expenditures.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis provide information that management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (“Fiscal 2024 Form 10-K”), including the audited consolidated financial statements of 23andMe Holding Co. as of March 31, 2024 and 2023 and Management’s Discussion and Analysis of Financial Condition and Results of Operations included therein, as well as the accompanying unaudited condensed consolidated financial statements and notes thereto included in this Form 10-Q.
In addition to historical information, this discussion and analysis contains forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including, without limitation, those discussed in the Fiscal 2024 Form 10-K and our subsequent reports filed with the SEC, that could cause actual results to differ materially from historical results or anticipated results. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to the “Company,” “23andMe,” “we,” “us,” and “our” refer to 23andMe Holding Co., a Delaware corporation formerly known as VG Acquisition Corp. and its consolidated subsidiaries.
Overview
Our mission is to help people access, understand, and benefit from the human genome. To achieve this, we pioneered direct-to-consumer genetic testing and built the world’s largest crowdsourced platform for genetic research. Our data engine powers our leading direct-to-consumer precision health platform and our genetics driven Research business.

We are dedicated to empowering customers to optimize their health by providing direct access to their genetic information, personalized reports, actionable insights and digital access to affordable healthcare professionals through our telehealth platform, Lemonaid Health, Inc. (“Lemonaid Health”).
Through direct-to-consumer genetic testing, we give consumers unique, personalized information about their genetic health risks, ancestry, and traits. We were the first company to obtain Food and Drug Administration (“FDA”) authorization for a direct-to-consumer genetic test, and we are the only company to have FDA authorization, clearance, or an exemption from premarket notification for all of the carrier status, genetic health risk, cancer predisposition, and pharmacogenetics reports that we offer to customers. As of September 30, 2024, we had over 65 health and carrier status reports that were available to customers in the U.S.

Through our Lemonaid Health telehealth platform, our ultimate goal is to provide customers access to personalized care based on their unique genetic profile and lifestyle. We currently connect patients to licensed healthcare professionals to provide affordable and direct online access to medical care, from consultation through treatment, for a number of common conditions, using evidence-based guidelines and up-to-date clinical protocols. When medications are prescribed by Lemonaid Health’s affiliated healthcare professionals, patients can use Lemonaid Health’s online pharmacy for fulfillment. Patients also can access telehealth consultations for certain 23andMe genetic reports through Lemonaid Health.

In November 2023, we launched 23andMe+ Total Health (“Total Health”), our most comprehensive membership providing access to third-party independent clinicians practicing genetics informed care with a focus on early risk detection preventative actions. Our Total Health service combines membership and telehealth offerings with the addition of next generation sequencing covering 200x more hereditary disease-causing variants than our personal genome service (“PGS”) reports (50,000+ hereditary disease-causing variants in Total Health exome sequencing compared to 250 health-related variants in our genotyping Carrier Status and Genetic Health Risk reports). Total Health also includes blood testing and access to genetics-based clinical care.

We have built the world’s largest crowdsourced platform for genetic research. The aim of our Research business is to revolutionize research and become the market’s preferred genetic-based research partner by monetizing access to our growing data engine of genetic and phenotypic information provided by our millions of engaged customers. We believe that this platform allows us to accelerate research at an unprecedented scale, enabling us to discover insights into the origins of diseases and to speed the discovery and development of novel therapies.
We have developed a diversified and differentiated portfolio of genetically-validated therapeutic candidates for a variety of diseases across different therapeutic areas with high unmet medical need. We have two programs that have reached clinical development, as well as multiple preclinical stage programs, in our portfolio. Each of our programs was identified through our human genetics drug discovery platform. We believe that our discovery platform, which increases the probability of technical success through genetic evidence in humans, can contribute to the advance of next-generation,

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targeted medicines for people living with serious and life-threatening diseases, including oncology, immunological, and inflammatory diseases, as well as other disease areas.
We have certain preclinical programs in immunological and inflammatory diseases, which are not yet being tested in human patients.
As of September 30, 2024, we had two internal programs in the clinic for testing in human patients.
•23ME-00610 is a high-affinity humanized monoclonal antibody that is designed to interfere with the ability of CD200R1 to interact with CD200 found on cancer cells, thus releasing tumor-induced immune suppression for the treatment of cancer. In April 2024, we completed enrollment of the Phase 2a portion of the Phase 1/2a clinical trial (clinical trials.gov number NCT05199272) in adult patients with locally advanced or metastatic clear cell renal cell carcinoma, ovarian cancer, neuroendocrine tumors, small cell lung cancer, and tumors with high tumor mutation burden and/or microsatellite instability. While all clinical trial data so far has been from monotherapy treatment, we have also generated nonclinical evidence of combination potential with other anti-tumor therapies, such as anti-PD-1 and anti-VEGF.
•23ME-01473 is an immuno-oncology antibody program that was initiated as a collaboration program with GlaxoSmithKline (“GSK”) under the terms of the four-year exclusive drug discovery and development collaboration agreement, amended in 2019 and 2021, respectively (as amended, the “original GSK Agreement”). 23ME-01473 targets the ULBP6 proteins in the NKG2D pathway, serving as a NK cell activator against tumor cells. On March 20, 2024, we announced that the first participant has been dosed in a Phase 1 clinical trial evaluating the safety and tolerability in people with locally advanced or metastatic solid malignancies that have progressed after standard therapy.
We are solely responsible for the continued development of these two programs. However, given the significant investment of resources over a prolonged period of time required for the development of these programs, in November 2024, we ceased additional investment in these two internal programs beyond their current stage of development.
We had previously collaborated with GSK on an immuno-oncology program targeting CD96, GSK6097608, led by GSK. In January 2022, we announced that we opted to receive a royalty on this program if a successful therapy were to be developed and commercialized by GSK under the original GSK Agreement. GSK is solely responsible for the continued development of this program.
As of September 30, 2024, we operated in two reporting segments: (1) Consumer and Research Services and (2) Therapeutics. See the “Basis of Presentation” section below for further details on segments. In November 2024, we elected to close substantially all operations in our Therapeutics business segment, which will cease over the next several months. See Note 19, “Subsequent Events,” to our condensed consolidated financial statements included elsewhere in this Form 10-Q for additional details.
Key Factors Affecting Results of Operations
We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose known and unknown risks and challenges, including, without limitation, those set forth in Part I, Item 1A., “Risk Factors,” of the Fiscal 2024 Form 10-K, as amended and supplemented in our subsequent reports and filings with the SEC.
New Customer Acquisition
PGS. Our ability to attract new customers is a key factor for the future growth of our PGS business and our database. Our historical financial performance has largely been driven by the rate of sales of our PGS kits. Revenue from our PGS business, primarily composed of kit sales, represented approximately 84% and 79% of our total revenues for the three months ended September 30, 2024 and 2023, respectively, and approximately 82% and 69% of our total revenues for the six months ended September 30, 2024 and 2023, respectively. In addition, kit sales are a source of members to our PGS membership service, which represented approximately 21% and 9% of our total revenue during the three months ended September 30, 2024 and 2023, respectively, and approximately 20% and 8% of our total revenue during the six months ended September 30, 2024 and 2023, respectively. We expect PGS revenues to fluctuate in the near-term and to grow in the long-term, as we continue to evolve our product offerings across kit sales and our membership service, and introduce new products or features that enhance or add value for customers and members. This will be achieved by increasing awareness of our current and new offerings in existing markets and expanding into new markets.

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Purchasing patterns of our kits are largely influenced by product innovation, marketing spend, and varying levels of price discounting on our products. Sales and marketing expenses are typically higher during promotional windows that align with gift-giving portions of the year, with an emphasis on the holiday period, as well as other gift-giving and family-oriented holidays such as Mother’s Day and Father’s Day, and major Amazon sales events such as Prime Day, which may change from year to year. We expect the seasonality of our business to continue, with pronounced increases in revenue recognized in the fourth fiscal quarter, relating to our holiday promotions.
Telehealth. Our ability to attract new patients and members is a key factor for the future growth of our telehealth business. Revenue from our telehealth business represented approximately 15% and 18% of our total revenue during the three months ended September 30, 2024 and 2023, respectively, approximately 16% and 18% of our total revenue during the six months ended September 30, 2024 and 2023, respectively. As there are many participants in the telehealth market, including new entrants and traditional health care systems offering virtual care, competition with respect to our telehealth business continues to intensify.
Engagement of Research Participants

Our ability to conduct research and grow our database of genotypic and phenotypic information depends on our customers’ willingness to consent to participate in our research. As of September 30, 2024, over 80% of our customers have consented to participate in research. These customers permit us to use their de-identified data in our research and many of them regularly respond to our research surveys, providing us with phenotypic data in addition to the genetic data in their DNA samples. We analyze this genotypic and phenotypic data and conduct genome-wide association studies and phenome-wide association studies, which enable us to determine whether particular genetic variants affect the likelihood of individuals developing certain diseases. Our customers can withdraw their consent to participate in research at any time. If a significant number of our customers were to withdraw their consent, or if the percentage of consenting customers were to decline significantly, our ability to conduct research successfully could be diminished, which could adversely affect our business.
Drug Target Productivity of Our Genetics Database
Our genetics database underpins our research programs and enables us to identify drug targets with novel genetic evidence. Over the course of the five-year exclusive target discovery collaboration under the original GSK Agreement which ended in July 2023, we had identified over 50 drug targets.
Therapeutic Product Candidates
Developing therapeutic product candidates requires a significant investment of resources over a prolonged period of time. As of September 30, 2024, we had two internal product candidates in clinic for testing in human patients. However, given the significant investment of resources over a prolonged period of time required for the development of these programs, in November 2024, we ceased additional investment in these two internal programs. If we are unable to enter into additional collaboration or partnering agreements, these programs will not be able to progress towards additional milestones or approval.
Collaborations
Substantially all of our research services revenues were generated from the original GSK Agreement.
The exclusive target discovery term under the original GSK Agreement expired in July 2023. In October 2023, we entered into an amendment to the original GSK Agreement (the “2023 GSK Amendment”) to provide GSK with a non-exclusive license to certain new, de-identified, aggregated data included in our database (the “New Data”), as well as access to certain research services with respect to such New Data in return for a $20.0 million data access fee, which we received during fiscal 2024. In September 2024, the Company and GSK agreed to extend the deadline for the Data Use Notice from September 30, 2024 to October 28, 2024. The license to the New Data will expire on October 27, 2025. See Note 4, “Collaborations” to our condensed consolidated financial statements for more information regarding the 2023 GSK Amendment. Our ability to enter into new collaboration agreements will affect our research services revenues. If we are unable to enter into additional collaboration agreements, our future research services revenue will decline.

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Ability to Monetize Our Therapeutics Products
Our ability to generate revenue from our two remaining therapeutic product candidates depends on our ability to enter into collaboration agreements to successfully initiate and complete clinical trials for therapeutic product candidates and receive regulatory approval, particularly in the United States, Europe, and other major markets.
We believe that therapeutic product candidates with novel genetic evidence and validated targets enhances the likelihood that research and development efforts will yield successful therapeutic product candidates. Nonetheless, there is no certainty that therapeutic product candidates will receive regulatory approvals.
The competitive environment is also an important factor with the commercial success of therapeutic product candidates, and the ability to successfully commercialize a therapeutic product candidate will depend on whether there are competing therapeutic product candidates in development or already marketed by other companies.
Expansion into New Categories and Customer Retention

We launched our 23andMe+ Premium membership service in October 2020, and through our acquisition of Lemonaid Health, we began providing access to telehealth services in November 2021. In November 2023, we launched Total Health, our comprehensive ongoing early detection health membership.
We expect to expand into new categories and innovative healthcare models with the goal of driving future growth. Such opportunities include product enhancements, such as our proprietary polygenic risk scores, new product offerings aimed at extending our personalized and customer-centric philosophy to primary healthcare, and potential additional acquisitions of other consumer-oriented healthcare businesses. Such expansion would allow us to increase the number of engaged customers who purchase additional products and services.
The success of our membership services will depend upon our ability to acquire and retain members over an extended period. Retention of customers will be based on the perceived value of the premium content and features they receive. If we are unable to provide sufficiently compelling new content and features, members may not renew.
Similarly, the success of our telehealth business is dependent on our ability to attract and retain patients and members, as well as continuing to expand our offering in related products and services categories. Category expansion allows us to increase the number of patients to whom we can provide products and services. It also allows us to offer access to treatment of additional conditions that may already affect our current patients. Expanding into new categories will require financial investments in additional headcount, marketing and customer acquisition expenses, additional operational capabilities, and may require the purchase of new inventory. If we are unable to generate sufficient demand in new categories, we may not recover the financial investments we make in new categories and revenue may not increase in the future.
Our Total Health product combines select features and services of our membership and telehealth offerings. As such, the success of the Total Health product will depend on factors similar to those described above.
Investments in Growth and Innovation
Our research platform is based on a continually growing database of genotypic and phenotypic information. Our database allows us to conduct analyses in a broad-based fashion, by searching for genetic signatures of particular diseases or the likelihood of a particular genetic variant causing disease in a particular individual or group of individuals who share the same trait. We believe that our platform enables us to rapidly and serially conduct studies across an almost unlimited number of conditions at unprecedented statistical power, yielding insights into the causes and potential treatments of a wide variety of diseases.
We believe that our research platform enables the rapid identification of genetically validated drug targets with improved odds of clinical success. With our state-of-the-art bioinformatics capabilities, we analyze the trillions of data points in our database, optimizing the use of our resources, to genetically validate drug targets, inform patient selection for clinical trials, and increase the probability of success.
We expect to continue investing in our business to capitalize on market opportunities and long-term growth. We plan to continue to invest in our research and development efforts and in marketing to acquire new customers and drive brand awareness, and also expect to incur software development costs as we work to enhance our existing products, expand the depth of our membership services, and design new offerings, including additional primary care offerings. In addition,

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we expect to continue to incur expenses associated with operating as a public company. The expenses we incur may vary significantly by quarter depending and as we focus on building out different aspects of our business. We regularly evaluate our capital allocation approach to make sure that our capital is being used for the highest value-creating activities and in the most efficient manner. This may require changes to investment levels, how we operate, or are structured to ensure alignment to business priorities.
Recent Developments

Special Committee of the Company’s Board of Directors

As previously disclosed, the Company formed a special committee composed of independent members of the Board of Directors (the “Special Committee”) on March 28, 2024. The role of the Special Committee was to review strategic alternatives that may be available to the Company to maximize stockholder value. On April 17, 2024, Anne Wojcicki, Chief Executive Officer, Co-Founder, and Chair of the Board of Directors of the Company disclosed that she is considering making a proposal to acquire all of the outstanding shares of the Company that she does not currently own. Ms. Wojcicki also indicated that she wishes to maintain control of the Company and, therefore, will not be willing to support any alternative transaction. As previously disclosed, on July 29, 2024, the Special Committee received a preliminary non-binding indication of interest from Ms. Wojcicki to acquire all of the outstanding shares of the Company not owned by her or her affiliates or any other stockholder that she invites to roll over their shares, for cash consideration of $0.40 per share (the “Preliminary Proposal”), as set forth in Amendment No. 2 to Schedule 13D filed by ABeeC 2.0 LLC (Ms. Wojcicki’s affiliated entity) (“ABeeC”) with the SEC on July 31, 2024. On August 2, 2024, we issued a press release announcing the Special Committee’s response to the Preliminary Proposal, including certain requirements for any revised proposal from Ms. Wojcicki. As disclosed in Amendment No. 3 to Schedule 13D filed by ABeeC with the SEC on September 11, 2024, in response to requests from the Special Committee, on September 9, 2024, Ms. Wojcicki notified the members of the Special Committee that Ms. Wojcicki would be open to considering third-party takeover proposals for the Company. On September 17, 2024, the Company issued a press release regarding the resignations of seven non-employee directors (collectively, the “Resigning Directors”) from the Company's Board of Directors (the “Resignations”). As set forth in the Resigning Directors’ resignation letter dated September 17, 2024, the Resigning Directors stated that such Resigning Directors differed from Ms. Wojcicki on the strategic direction for the Company, and that, as a result of such difference and Ms. Wojcicki’s concentrated voting power, the Resigning Directors believed that it was in the best interest of the Company’s stockholders to resign from the Board of Directors. In Amendment No. 4 to Schedule 13D filed by ABeeC with the SEC on September 18, 2024, Ms. Wojcicki announced that the Company will immediately begin identifying independent directors to join the Company’s Board of Directors. In Amendment No. 5 to Schedule 13D filed by ABeeC with the SEC on September 30, 2024, Ms. Wojcicki disclosed that she was no longer open to considering any third-party proposals to buy the Company and that she remains committed to completing a take-private acquisition of the Company. In connection with the Company’s announcement of the appointment of three independent directors to the Company’s Board of Directors, ABeeC filed Amendment No. 6 to Schedule 13D with the SEC on October 29, 2024. Each of the newly-appointed independent directors was subsequently appointed to the Special Committee on November 2, 2024.

Noncompliance with Nasdaq Listing Rule 5605

On September 18, 2024, the Company received a deficiency letter from the Nasdaq Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”), notifying the Company that the Company was not in compliance with Nasdaq Listing Rule 5605 (the “Second Nasdaq Letter”). Specifically, as a result of the Resignations, the Company was no longer in compliance with Nasdaq Listing Rule 5605(b), Nasdaq Listing Rule 5605(c), Nasdaq Listing Rule 5605(d), and Nasdaq Listing Rule 5605(e) (collectively, the “Corporate Governance Requirements”). Pursuant to the Second Nasdaq Letter, the Company had until October 3, 2024 to submit a plan to regain compliance with the aforementioned listing rules (the “Plan”) for the Staff’s review. The Company timely submitted the Plan to the Staff on September 26, 2024, and on October 29, 2024, the Company announced the appointment of three independent directors to the Company’s Board of Directors, each of whom were appointed to the Audit Committee and Compensation Committee. On October 30, 2024, the Company received written notice from the Staff informing the Company that it has regained compliance with the Corporate Governance Requirements. See Note 2, “Summary of Significant Accounting Policies,” and Note 19, “Subsequent Events,” to our condensed consolidated financial statements included elsewhere in this Form 10-Q for additional details.

Reverse Stock Split

On October 11, 2024, the Company filed the Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split at the ratio of one-for-twenty, which became effective as of 12:01 a.m., Eastern Time on October 16, 2024 (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every twenty shares of the Company’s Class A common stock and Class B common stock were automatically combined into one issued and outstanding share of the Company’s respective Class A common stock and Class B common

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stock, without any change in their respective par values per share. The Company did not issue fractional shares in connection with the Reverse Stock Split.

Commencing on October 16, 2024, trading of the Company’s Class A common stock continued on The Nasdaq Capital Market on a Reverse Stock Split-adjusted basis. The Company’s trading symbol remains “ME.” See Note 2, “Summary of Significant Accounting Policies,” and Note 19, “Subsequent Events,” to our condensed consolidated financial statements included elsewhere in this Form 10-Q for additional details.

Nasdaq Minimum Bid Requirement

On November 10, 2023, the Company received a deficiency letter (the “First Nasdaq Letter”) from the Staff, notifying the Company that it was not in compliance with Nasdaq Listing Rule 5450(a)(1), which requires the Company to maintain a minimum bid price of at least $1.00 per share for continued listing on The Nasdaq Global Select Market (the “Minimum Bid Requirement”). Pursuant to the First Nasdaq Letter, the Company had an initial 180 calendar days from the date of the First Nasdaq Letter to regain compliance. The Company did not regain compliance during the initial compliance period. On May 9, 2024, the Company received a notification letter from the Staff notifying the Company that it had been granted an additional 180 days, or until November 4, 2024, to regain compliance with the Minimum Bid Requirement.

Following the effectiveness of the Reverse Stock Split, on October 30, 2024, the Company received written notice (the “Compliance Notice”) from the Staff informing the Company that it has regained compliance with the Minimum Bid Requirement. The Staff notified the Company in the Compliance Notice that, from October 16, 2024 to October 29, 2024, the closing bid price of the Company’s Class A common stock had been $1.00 per share or greater and, accordingly, the Company had regained compliance with the Minimum Bid Requirement and that the matter was now closed. See Note 2, “Summary of Significant Accounting Policies,” and Note 19, “Subsequent Events,” to our condensed consolidated financial statements included elsewhere in this Form 10-Q for additional details.

Settlement Related to the Cybersecurity Incident

On July 15, 2024, we reached an agreement in principle to settle the putative class action lawsuits currently pending in the U.S. District Court for the Northern District of California (the “Court”). The parties executed a confidential settlement term sheet on July 29, 2024. We subsequently reached agreement with the plaintiffs on all material terms, including payment of $30.0 million (the “proposed settlement”). On September 12, 2024, plaintiffs filed a motion asking the Court for preliminary approval of the settlement, and the motion was considered at a court hearing on October 29, 2024. On October 29, 2024, the Court deferred the motion for preliminary approval and asked the parties to provide additional information by November 12, 2024. See Note 11, “Commitments and Contingencies — Cybersecurity Incident,” to our condensed consolidated financial statements included elsewhere in this Form 10-Q for additional details.

Cease of Operations of Therapeutics Discovery

In August 2024, the Board of Directors of the Company determined that it was in the best interests of the Company and its stockholders to cease operations of the Therapeutics Discovery portion of the Company’s Therapeutics business, effective August 9, 2024. As a result, the Company terminated 30 employees. Therapeutics Discovery operated within the Company’s Therapeutics segment. See Note 9 “Restructuring,” to our condensed consolidated financial statements included elsewhere in this Form 10-Q for additional details.

GSK New Data Notification

In September 2024, the Company and GSK agreed to extend the deadline for the Data Use Notice from September 30, 2024 to October 28, 2024. The license to the New Data will expire on October 27, 2025. See Note 4 “Collaboration,” to our condensed consolidated financial statements included elsewhere in this Form 10-Q for additional details.

Costs Associated with Exit or Disposal Activities and Cease of Operations of Therapeutics Development

On November 8, 2024, our Board of Directors approved a reduction in force involving 223 employees, representing approximately 40% of our workforce (the “November Reduction in Force”). The November Reduction in Force also includes ceasing additional development in the Company’s two clinical trials and the closure of substantially all operations in our Therapeutics business segment (together with the November Reduction in Force, the “Reduction Plan”). The Reduction Plan is intended to restructure and strategically align our workforce and organization with our current strategy and to reduce our operating costs.


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We expect to complete the Reduction Plan substantially during the third quarter of fiscal year ending March 31, 2025 (“fiscal 2025”), with certain affected employees retained through a transition period expected to end no later than the end of fiscal 2025.

We expect to recognize restructuring charges in connection with the November Reduction in Force with respect to severance payments, benefits continuation, and stock compensation charges associated with the modification of certain stock options and restricted stock units (“equity compensation charges”). All such charges are expected to total approximately $11.7 million, of this amount, severance payments and benefit continuation charges are estimated to be approximately $9.3 million and are expected to be recognized primarily during the third quarter of fiscal 2025, with the majority of such charges anticipated to be paid in cash during the same fiscal quarter. Equity compensation charges are expected to be approximately $2.4 million and are expected to be recognized primarily in the third quarter of fiscal 2025, and will not result in any cash expenditures. We expect that the Reduction Plan, when fully implemented, will reduce annualized payroll and benefit expenses by more than $35.0 million.
Basis of Presentation

The unaudited condensed consolidated financial statements and accompanying notes of the Company included elsewhere in this Form 10-Q include the accounts of 23andMe Holding Co. and its consolidated subsidiaries and variable interest entities and were prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). As 23andMe, Inc. is considered the Company’s accounting predecessor, certain historical financial information presented in the condensed consolidated financial statements represents the accounts of 23andMe, Inc. and its wholly owned subsidiary.
As of September 30, 2024, we operated in two reporting segments: (1) Consumer and Research Services and (2) Therapeutics. The Consumer and Research Services segment consists of our PGS and telehealth business, as well as research services that we perform under agreements with third parties, including the original GSK Agreement and the 2023 GSK Amendment, relating to the use of our genotypic and phenotypic data to identify promising drug targets. The Therapeutics segment (prior to our election in early November 2024 to close substantially all operations in our Therapeutics business segment, which will cease over the next several months) consists of revenues from the out-licensing of intellectual property associated with identified drug targets and expenses related to therapeutic product candidates under clinical development. During the three and six months ended September 30, 2024 and 2023, all our revenues were derived from our Consumer and Research Services segment. See “Adjusted EBITDA” section below for further details.
Key Business Metrics
We monitor the following key metrics to help us evaluate our business, identify trends, formulate business plans, and make strategic decisions. We believe that the following metrics are useful in evaluating our business:
•PGS Customers. “Customers” means individuals who have registered a PGS kit and provided their DNA sample. We view Customers as an important metric to assess our financial performance because each Customer has registered a kit and has engaged with us by providing us with their DNA sample. These Customers may be interested in purchasing additional PGS products and services or in becoming members of our 23andMe+ Premium membership service, especially if they consent to participate in our research. We had approximately 15.4 million and 15.1 million Customers as of September 30, 2024 and March 31, 2024, respectively.
•Consenting Customers. “Consenting Customers” are Customers who have affirmatively opted in to participate in our research program. Consenting Customers are critical to our research programs and to the continuing growth of our database, which we use to identify drug targets and to generate new and interesting additional ancestry and health reports. Moreover, Consenting Customers respond to our research surveys, providing useful phenotypic data about their traits, habits, and lifestyles, which we analyze using de-identified data to determine whether a genetic variant makes an individual more or less likely to develop certain diseases. A Consenting Customer is likely to be more engaged with our brand, which may lead to the purchase of our 23andMe+ Premium membership service and to participation in further research studies, helping us to advance our research. As of September 30, 2024, over 80% of our Customers were Consenting Customers.
•Members. This metric represents the number of customers who have signed up for our 23andMe+ Premium membership service, which was launched in October 2020. We believe that 23andMe+ Premium, and any other future membership offerings, will position us for future growth, as the membership model, which is annual for 23andMe+ Premium, represents a previously untapped source of recurring revenue. We are

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continually investing in new reports and features to provide to members as part of the 23andMe+ Premium membership, which we believe will enhance customer lifetime value as customers can make new discoveries about themselves. We believe that this, in turn, will help to scale our customer acquisition costs and create expanding network effects. As of March 31, 2024 and 2023, our 23andMe+ Premium membership base had approximately 562,000 and 640,000 members, respectively.
•Adjusted EBITDA. Adjusted EBITDA, a non-GAAP financial measure, is the measure of segment profitability reported to our CEO, the CODM. See “—Adjusted EBITDA” below for further details and a reconciliation of Adjusted EBITDA to net loss.
Components of Results of Operations
Revenue
We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), when we transfer promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
In our Consumer and Research Services segment, our service revenue is composed primarily of sales of PGS kits to customers, 23andMe+ Premium membership and telehealth services, which include online medical visits and memberships, as well as revenues from our research collaborations. Our product revenue is composed primarily of telehealth pharmaceutical sales, as well as a portion of our telehealth membership revenue in our Consumer and Research Services segment.
See Note 2, “Summary of Significant Accounting Policies,” to our consolidated financial statements included in our Fiscal 2024 Form 10-K for a more detailed discussion of our revenue recognition policies.
Cost of Revenue, Gross Profit, and Gross Margin

Cost of service revenue for PGS primarily consists of cost of raw materials, lab processing fees, personnel-related expenses, including salaries, benefits, and stock-based compensation, shipping and handling, and allocated overhead. Cost of service revenue for telehealth primarily consists of personnel-related expenses as described above that we incur for medical services, and amortization of intangible assets. Cost of product revenue consists of personnel-related expenses, telehealth prescription drug costs, packaging and shipping, and allocated overhead. Cost of revenue for research services primarily consists of personnel-related expenses as described above, and allocated overhead. We expect cost of revenue to fluctuate from period to period in the foreseeable future in absolute dollars but gradually decrease as a percentage of revenue over the long term.

Our gross profit represents total revenue less our total cost of revenue, and our gross margin is our gross profit expressed as a percentage of our total revenue. Our gross profit and gross margin have been and will continue to be affected by a number of factors, including the volume of PGS kit sales recognized, the prices we charge for our PGS products and research services, the prices we charge and renewal rates of members within our membership services, the prices we charge for telehealth services (medical visits, pharmacy services, and memberships), the fees we incur for lab processing PGS kits, the costs we incur for medical services and prescription drug costs, the revenues from our collaboration agreements, and the personnel costs to fulfill them. We expect our Consumer and Research Services gross margin to increase over the long term as membership revenues become a higher percentage of revenue mix, although our gross margin may fluctuate from period to period. Substantially all our research services revenue in the periods prior to July 2023 was derived from the original GSK Agreement. In October 2023, we entered into the 2023 GSK Amendment to provide GSK with a non-exclusive license to certain new, de-identified, aggregated New Data, as well as access to certain of our research services with respect to such New Data. See Note 4, “Collaborations” to our condensed consolidated financial statements for additional information regarding the 2023 GSK Amendment. If we are unable to add new research services agreements, our research services revenue may decline substantially.
Operating Expenses
Our operating expenses primarily consist of research and development, sales and marketing, and general and administrative expenses. Personnel-related expenses, which include salaries, benefits, and stock-based compensation, are the most significant component of research and development and general and administrative expenses. Advertising and brand-related spend and personnel-related expenses represent the primary components of sales and marketing expenses. Operating expenses also include allocated overhead costs. Overhead costs that are not substantially dedicated for use by a specific functional group are allocated based on headcount. Allocated overhead costs include shared costs associated with facilities (including rent and utilities) and related personnel, information technology and related personnel, and depreciation

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of property and equipment. We regularly evaluate our capital allocation approach to make sure our capital is being used for the highest value-creating activities and in the most efficient manner. This may require changes to investment levels, how we operate, or are structured to ensure alignment to business priorities.
Research and Development Expenses
Our research and development expenses support our efforts to add new services and features to our existing services, and to ensure the reliability and scalability of our services across our Consumer and Research Services segment. Prior to closure of the remaining portion of our Therapeutics business in November 2024 (following the previous closure of the Therapeutics Discovery portion of the business in August 2024), research and development expenses included efforts to develop our portfolio of existing therapeutic product candidates in our Therapeutics segment. Prior to ceasing operations of the Therapeutics Discovery portion of our Therapeutics business in August 2024, research and development expenses included our efforts to discover and genetically-validate new therapeutic product candidates. Research and development expenses primarily consist of personnel-related expenses, including salaries, benefits, and stock-based compensation associated with our research and development personnel, collaboration expenses, preclinical and clinical trial costs, laboratory services and supplies costs, third-party data services, and allocated overhead.
We plan to continue to invest in our research and development efforts in our Consumer and Research Services segment. Our research and development expenses may fluctuate as a percentage of revenue from period to period due to the timing and amount of these expenses.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of advertising costs, personnel-related expenses, including salaries, benefits, and stock-based compensation associated with our sales and marketing personnel, amortization and impairment of intangible assets, outside services, and allocated overhead.
Advertising and brand costs consist primarily of direct expenses related to television, online and radio advertising, including production and branding, paid search, online display advertising, direct mail, affiliate programs, marketing collateral, market research and public relations. Advertising production costs are expensed the first time that the advertising takes place, and all other advertising costs are expensed as incurred. Deferred advertising costs primarily consist of vendor payments made in advance to secure media spots across varying media channels, as well as production costs incurred before the first time the advertising takes place. Deferred advertising costs are expensed on the first date that the advertisements occur. In addition, advertising costs include platform fees due to brokers related to our third-party retailers.
We expect our sales and marketing expenses to gradually decrease as a percentage of revenue over the long term, although our sales and marketing expenses may fluctuate as a percentage of revenue from period to period due to promotional strategies that drive the timing and amount of these expenses.
General and Administrative Expenses
General and administrative expenses primarily consist of personnel-related expenses, including salaries, benefits, and stock-based compensation associated with corporate management, including our CEO office, finance, legal, compliance, regulatory, corporate communications, corporate development, and other administrative personnel. In addition, general and administrative expenses include professional fees for external legal, accounting, and other consulting services, as well as credit card processing fees related to PGS kit sales and telehealth services, and allocated overhead.
We currently experience substantial general and administrative expenses in connection with operating as a public company, including expenses associated with compliance with SEC rules and regulations, and related legal, audit, insurance, investor relations, professional services, and other administrative expenses. We anticipate general and administrative expenses will stabilize over the long term and gradually decrease as a percentage of revenue, although it may fluctuate as a percentage of total revenue from period to period due to the timing and amount of these expenses.
Restructuring and Other Charges
Restructuring and other charges consists of costs directly associated with employee-related exit or disposal activities. Such costs include employee severance and termination benefits associated with a reduction in force, if applicable for the period.

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Other Income (Expense)
Other income (expense) includes interest income, net, and other income (expense), net. Interest income, net primarily consists of interest income earned on our cash deposits and cash equivalents. Other income (expense), net primarily consists of effects of changes in foreign currency exchange rates, and other non-operating income and expenditures.
Provision for (Benefit from) Income Taxes
Provision for income tax primarily consists of separate state tax expense generated by one of the variable interest entities. Deferred tax assets are reduced by a valuation allowance to the extent management believes it is not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. Management makes estimates and judgments about future taxable income based on assumptions that are consistent with our plans and estimates. An immaterial tax benefit was recognized for the three and six months ended September 30, 2024, and an immaterial tax provision was recognized for the three and six months ended September 30, 2023.
Results of Operations
Comparisons for the Three and Six Months Ended September 30, 2024 and 2023
The following table sets forth our unaudited condensed consolidated statements of operations for the three and six months ended September 30, 2024 and 2023, respectively, and the dollar and percentage change between the two periods:
Three Months Ended September 30,Six Months Ended September 30,
20242023
$ Change
% Change
20242023
$ Change
% Change
(in thousands, except percentages)
Revenue:
Service$38,514 $42,766 $(4,252)(10 %)$73,193 $96,026 $(22,833)(24 %)
Product5,557 7,233 (1,676)(23 %)11,292 14,837 (3,545)(24 %)
Total revenue44,071 49,999 (5,928)(12 %)84,485 110,863 (26,378)(24 %)
Cost of revenue:
Service (1)
18,801 25,227 (6,426)(25 %)36,050 52,172 (16,122)(31 %)
Product (1)
2,863 3,043 (180)(6 %)5,514 6,281 (767)(12 %)
Total cost of revenue21,664 28,270 (6,606)(23 %)41,564 58,453 (16,889)(29 %)
Gross profit22,407 21,729 678 3 %42,921 52,410 (9,489)(18 %)
Operating expenses:
Research and development (1)
41,041 54,588 (13,547)(25 %)85,678 116,917 (31,239)(27 %)
Sales and marketing (1)
16,874 18,328 (1,454)(8 %)32,346 40,986 (8,640)(21 %)
General and administrative (1)
23,418 25,290 (1,872)(7 %)55,778 76,030 (20,252)(27 %)
Restructuring and other charges (1)
2,242 2,654 (412)(16 %)2,242 6,871 (4,629)(67 %)
Total operating expenses83,575 100,860 (17,285)(17 %)176,044 240,804 (64,760)(27 %)
Loss from operations(61,168)(79,131)17,963 (23 %)(133,123)(188,394)55,271 (29 %)
Other income (expense):
Interest income, net2,009 3,752 (1,743)(46 %)4,583 8,059 (3,476)(43 %)
Other income (expense), net15 145 (130)(90 %)(4)477 (481)(101 %)
Loss before income taxes(59,144)(75,234)16,090 (21 %)(128,544)(179,858)51,314 (29 %)
Provision for (benefit from) income taxes(41)36 (77)(214 %)(41)36 (77)(214 %)
Net loss$(59,103)$(75,270)$16,167 (21 %)$(128,503)$(179,894)$51,391 (29 %)
(1)Includes stock-based compensation expense as follows:

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Three Months Ended September 30,Six Months Ended September 30,
20242023
$ Change
% Change
20242023
$ Change
% Change
(in thousands, except percentages)
Cost of service revenue$871 $1,041 $(170)(16 %)$1,847 $3,099 $(1,252)(40 %)
Cost of product revenue442 456 (14)(3 %)835 870 (35)(4 %)
Research and development8,565 10,938 (2,373)(22 %)19,636 22,630 (2,994)(13 %)
Sales and marketing2,155 2,016 139 7 %4,614 3,734 880 24 %
General and administrative (a)
7,150 9,290 (2,140)(23 %)13,828 43,866 (30,038)(68 %)
Restructuring and other charges303 — 303 100 %303 641 (338)(53 %)
Total stock-based compensation expense$19,486 $23,741 $(4,255)(18 %)$41,063 $74,840 $(33,777)(45 %)
(a)Includes $22.0 million of stock-based compensation charges related to the termination of a Former Lemonaid Officer during the six months ended September 30, 2023.
The following table sets forth our condensed consolidated statements of operations data expressed as a percentage of revenue for the three and six months ended September 30, 2024 and 2023:
Three Months Ended September 30,Six Months Ended September 30,
2024202320242023
Revenue:
Service87 %86 %87 %87 %
Product13 %14 %13 %13 %
Total revenue100 %100 %100 %100 %
Cost of revenue:
Service43 %50 %43 %47 %
Product6 %7 %6 %6 %
Total cost of revenue49 %57 %49 %53 %
Gross profit51 %43 %51 %47 %
Operating expenses:
Research and development93 %109 %101 %105 %
Sales and marketing39 %37 %38 %37 %
General and administrative53 %51 %66 %69 %
Restructuring and other charges5 %5 %3 %6 %
Goodwill impairment
— %— %— %— %
Total operating expenses190 %202 %208 %217 %
Loss from operations(139 %)(159 %)(157 %)(170 %)
Other income (expense):
Interest income, net5 %8 %5 %7 %
Other income (expense), net— %— %— %1 %
Loss before income taxes(134 %)(151 %)(152 %)(162 %)
Provision for (benefit from) income taxes— %— %— %— %
Net loss(134 %)(151 %)(152 %)(162 %)
Revenue
Total revenue decreased by $5.9 million, or 12%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The decrease in total revenue was driven by a $5.1 million decrease in consumer services revenue, which included a $6.9 million decrease in PGS kit revenue driven mainly by lower PGS kit sales volume, as well as a lower average selling price due to greater promotions and discounts versus the prior year quarter.

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The decrease in consumer services revenue also included a $1.0 million decrease in telehealth services revenue and a $1.7 million decrease in telehealth tangible product revenue, primarily driven by lower medical visits and pharmacy sales compared to the prior year quarter. In addition, there was a $0.8 million decrease in research services revenue, primarily attributable to a decrease in revenue from the GSK collaboration. These decreases were partially offset by a $4.5 million increase in consumer PGS membership services revenue.
Total revenue decreased by $26.4 million, or 24%, for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023. The decrease in total revenue was driven by a $13.4 million decrease in consumer services revenue, which included a $14.8 million decrease in PGS kit revenue driven mainly by lower PGS kit sales volume, as well as a lower average selling price due to greater promotions and discounts versus the prior year period. The decrease in consumer services revenue also included a $2.9 million decrease in telehealth services revenue and a $3.5 million decrease in telehealth tangible product revenue, primarily driven by lower medical visits and pharmacy sales, partially related to the disposition of Lemonaid Health Limited compared to the prior year period. In addition, there was a $12.9 million decrease in research services revenue, of which $11.7 million was attributable to the conclusion of the exclusive target discovery term of the original GSK Agreement in July 2023. These decreases were partially offset by a $7.8 million increase in consumer PGS membership services revenue.
There was no therapeutics revenue for the six months ended September 30, 2024 and 2023.
Cost of Revenue, Gross Profit and Gross Margin
Total cost of revenue decreased by $6.6 million, or 23%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. Cost of revenue for consumer services decreased by $6.5 million, driven by a $4.0 million decrease in the cost of revenue for PGS primarily due to lower shipping and fulfillment, lab supplies and processing, and kit costs due to lower PGS kit sales volume. In addition, there was a $2.3 million decrease in telehealth services cost of revenue primarily from lower personnel-related expenses and related overhead allocations following the June 2023 reduction in force and the disposition of Lemonaid Health Limited during the second quarter of the fiscal 2024. There was also a $0.2 million decrease in telehealth tangible product cost of revenue primarily from reduced shipping costs due to lower pharmacy sales volume. The cost of revenue for research services also decreased by $0.1 million primarily due to the conclusion of the exclusive target discovery term of the original GSK Agreement in July 2023.
Total cost of revenue decreased by $16.9 million, or 29%, for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023. Cost of revenue for consumer services decreased by $15.4 million, driven by a $7.3 million decrease in the cost of revenue for PGS primarily due to lower shipping and fulfillment, lab supplies and processing, and kit costs due to lower PGS kit sales volume. In addition, there was a $7.3 million decrease in telehealth services cost of revenue primarily from lower personnel-related expenses and related overhead allocations following the June 2023 reduction in force and the disposition of Lemonaid Health Limited during the second quarter of the fiscal 2024. There was also a $0.8 million decrease in telehealth tangible product cost of revenue primarily from reduced shipping costs due to lower pharmacy sales volume. The cost of revenue for research services also decreased by $1.5 million primarily due to the conclusion of the exclusive target discovery term of the original GSK Agreement in July 2023.
Our overall gross profit increased by $0.7 million, or 3%, to $22.4 million for the three months ended September 30, 2024 from $21.7 million for the three months ended September 30, 2023. The increase in gross profit was primarily due to an increase in consumer gross profit of $1.4 million, which was primarily driven by an increase in consumer PGS and telehealth service gross profit, partially offset by a decrease in telehealth product gross profit. This increase was partially offset by a $0.7 million decrease in research services gross profit mainly driven by the conclusion of the exclusive target discovery term of the original GSK Agreement in July 2023. Our gross margin improved from 43% for the three months ended September 30, 2023 to 51% for the three months ended September 30, 2024. The increase in gross margin was primarily due to an increase in consumer services gross margin due to continued growth of our membership services.
Our overall gross profit decreased by $9.5 million, or 18%, from $52.4 million for the six months ended September 30, 2023 to $42.9 million for the six months ended September 30, 2024. The decrease in gross profit was primarily due to a decrease of $11.4 million in research services gross profit mainly driven by the conclusion of the exclusive target discovery term of the original GSK Agreement in July 2023. This decrease was partially offset by a $1.9 million increase in consumer gross profit, which was primarily driven by an increase in telehealth service gross profit, partially offset by a decrease in telehealth product gross profit. Our gross margin improved from 47 % for the six months ended September 30, 2023 to 51 % for the six months ended September 30, 2024. The increase in gross margin was

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primarily due to an increase in consumer services gross margin due to continued growth of our membership services, as well as a decrease in telehealth services cost of revenue following the June 2023 reduction in force and the disposition of Lemonaid Health Limited during the second quarter of the fiscal 2024.
Gross margin has historically been higher for activities associated with research services than for consumer services, which includes PGS kits, membership and telehealth services.
Research and Development Expenses
The following table sets forth our research and development expenses for the three and six months ended September 30, 2024 and 2023, and the dollar and percentage change between the two periods:
Three Months Ended September 30,Six Months Ended September 30,
20242023
$ Change
% Change
20242023
$ Change
% Change
(in thousands, except percentages)
Personnel-related expenses$23,986 $28,737 $(4,751)(17 %)$51,678 $61,618 $(9,940)(16 %)
Lab-related research services4,290 11,886 (7,596)(64 %)9,134 28,808 (19,674)(68 %)
Depreciation, amortization, equipment, and supplies, net of capitalized internal-use software 1,336 1,627 (291)(18 %)3,218 2,403 815 34 %
Facilities, overhead allocations and other11,429 12,338 (909)(7 %)21,648 24,088 (2,440)(10 %)
Total research and development expenses$41,041 $54,588 $(13,547)(25 %)$85,678 $116,917 $(31,239)(27 %)
Research and development expenses for the three months ended September 30, 2024 decreased to $41.0 million as compared to $54.6 million for the three months ended September 30, 2023. The $13.5 million, or 25%, decrease was primarily attributable to a $7.6 million decrease in lab-related research services from our proprietary and collaboration therapeutics programs as we opted for a royalty on several GSK partnered programs, resulting in a significant reduction of GSK collaboration expenses during the three months ended September 30, 2024. In addition, there was a $4.8 million decrease in personnel-related expenses, including a decrease in non-cash stock-based compensation expense, primarily due to reductions in force. In addition, there was a $0.9 million decrease in facilities, overhead allocations and other expenses, primarily due to a reduction in overhead allocations resulting from the aforementioned reductions in force.
Research and development expenses for the six months ended September 30, 2024 decreased to $85.7 million as compared to $116.9 million for the six months ended September 30, 2023. The $31.2 million, or 27%, decrease was primarily attributable to a $19.7 million decrease in lab-related research services from our proprietary and collaboration therapeutics programs as we opted for a royalty on several GSK partnered programs, resulting in a significant reduction of GSK collaboration expenses during the six months ended September 30, 2024. In addition, there was a $9.9 million decrease in personnel-related expenses, including a decrease in non-cash stock-based compensation expense, primarily due to reductions in force. In addition, there was a $2.4 million decrease in facilities, overhead allocations and other expenses, primarily due to a reduction in overhead allocations resulting from the aforementioned reductions in force. These decreases were offset by a $0.8 million increase in depreciation, amortization, equipment and supplies, net of capitalized internal use software, primarily related to fewer internal use software project hours in development during the six months ended September 30, 2024.

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Sales and Marketing Expenses
The following table sets forth our sales and marketing expenses for the three and six months ended September 30, 2024 and 2023, and the dollar and percentage change between the two periods:
Three Months Ended September 30,Six Months Ended September 30,
20242023$ Change % Change20242023
$ Change
% Change
(in thousands, except percentages)
Advertising and brand$6,881 $7,748 $(867)(11 %)$12,541 $19,689 $(7,148)(36 %)
Personnel-related expenses5,478 4,656 822 18 %11,049 9,358 1,691 18 %
Intangibles amortization and impairment, depreciation, equipment, and supplies1,283 3,159 (1,876)(59 %)2,574 6,325 (3,751)(59 %)
Facilities, overhead allocations and other3,232 2,765 467 17 %6,182 5,614 568 10 %
Total sales and marketing expenses$16,874 $18,328 $(1,454)(8 %)$32,346 $40,986 $(8,640)(21 %)
Sales and marketing expenses for the three months ended September 30, 2024 decreased to $16.9 million as compared to $18.3 million for the three months ended September 30, 2023. The decrease of $1.5 million, or 8%, was primarily driven by a $1.9 million decrease in intangible asset amortization and impairment, depreciation, equipment, and supplies primarily due to customer relationships being fully amortized within intangible assets in the second quarter of fiscal 2024. In addition, there was a decrease of $0.9 million in advertising and brand-related expenses due to a reduction in marketing campaigns and spending. These decreases were partially offset by a $0.8 million increase in personnel-related expenses, including an increase in non-cash stock-based compensation expense, and a $0.4 million increase in overhead allocations, primarily due to increased headcount.
Sales and marketing expenses for the six months ended September 30, 2024 decreased to $32.3 million as compared to $41.0 million for the six months ended September 30, 2023. The decrease of $8.6 million, or 21%, was primarily driven by a $7.1 million decrease in advertising and brand-related expenses due to a reduction in marketing campaigns and spending. There was also a decrease of $3.8 million in intangible asset amortization and impairment, depreciation, equipment, and supplies primarily due to customer relationships being fully amortized within intangible assets in the second quarter of fiscal 2024. These decreases were partially offset by a $1.7 million increase in personnel-related expenses, including an increase in non-cash stock-based compensation expense, and a $0.6 million increase in overhead allocations, primarily due to increased headcount.
General and Administrative Expenses
Total general and administrative expenses for the three months ended September 30, 2024 decreased by $1.9 million, or 7%, to $23.4 million as compared to $25.3 million for the three months ended September 30, 2023. The decrease was primarily due to a $2.7 million reduction in personnel related-expenses, primarily driven by a decrease in non-cash stock-based compensation due to several executive terminations. In addition, there was a decrease of $1.4 million in other expenses, including business insurance. These decreases were partially offset by a $2.2 million increase in outside services expenses primarily due to legal and finance costs incurred by the Special Committee.
Total general and administrative expenses for the six months ended September 30, 2024 decreased by $20.3 million, or 27%, to $55.8 million as compared to $76.0 million for the six months ended September 30, 2023. The decrease was primarily due to a $29.8 million reduction in non-cash stock-based compensation, of which $22.0 million was related to a charge taken during the three months ended June 30, 2023 due to the departure of a Former Lemonaid Officer. See Note 13, “Equity Incentive Plans and Stock-Based Compensation” to our condensed consolidated financial statements for details. In addition, there was a $1.6 million decrease in other payroll-related expenses and a $2.8 million decrease in other expenses, including business insurance. These decreases were partially offset by a $13.9 million increase in outside services expenses primarily due to a non-recurring litigation settlement, net of probable insurance recoveries, legal and finance costs incurred by the Special Committee, and an increase in consulting fees.
Restructuring and Other Charges
Restructuring and other charges for the three months ended September 30, 2024 decreased by $0.4 million, or 16%, to $2.2 million as compared to $2.7 million for the three months ended September 30, 2023. The charges for the three months ended September 30, 2024 consisted primarily of employee severance and termination benefits related to the

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August 2024 reduction in force of $2.2 million, of which $0.3 million was non-cash stock-based compensation expense as compared to the three months ended September 30, 2023, which consisted primarily of employee severance and termination benefits related to the August 2023 reduction in force of $2.7 million.
Restructuring and other charges for the six months ended September 30, 2024 decreased by $4.6 million, or 67%, to $2.2 million as compared to $6.9 million for the six months ended September 30, 2023. The charges for the six months ended September 30, 2024 consisted primarily of employee severance and termination benefits related to the August 2024 reduction in force of $2.2 million, of which $0.3 million was non-cash stock-based compensation expense as compared to the three months ended September 30, 2023, which consisted primarily of employee severance and termination benefits related to the June 2023 and August 2023 reductions in force of $6.9 million, of which $0.6 million was non-cash stock-based compensation expense. See Note 9 — “Restructuring” to our condensed consolidated financial statements for details.
Interest Income, net
Interest income, net decreased by $1.7 million from $3.8 million for the three months ended September 30, 2023 to $2.0 million for the three months ended September 30, 2024 primarily due to a decrease in the cash equivalents balance held in money market funds, partially offset by an increase in interest yields compared to the prior year period.
Interest income, net decreased by $3.5 million from $8.1 million for the six months ended September 30, 2023 to $4.6 million for the three months ended September 30, 2024 primarily due to a decrease in the cash equivalents balance held in money market funds, partially offset by an increase in interest yields compared to the prior year period
Adjusted EBITDA
We evaluate the performance of each segment based on Adjusted EBITDA, which is a non-GAAP financial measure that we define as net income (loss) before net interest income (expense), net other income (expense), income tax expenses (benefit), depreciation and amortization, impairment charges, stock-based compensation expense, and other items that are considered unusual or not representative of underlying trends of our business, including but not limited to: litigation settlements, gains or losses on dispositions of subsidiaries and transaction-related costs, and cyber security incident expenses, net of probable insurance recoveries, if applicable for the periods presented. Adjusted EBITDA is a key measure used by our management and our Board of Directors to understand and evaluate our operating performance and trends, to prepare and approve our annual budget, and to develop short- and long-term operating plans. In particular, we believe that the exclusion of the items eliminated in calculating Adjusted EBITDA provides useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information in understanding and evaluating our operating results in the same manner as our management and our Board of Directors. Adjusted EBITDA should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of Adjusted EBITDA as a tool for comparison. There are a number of limitations related to the use of these non-GAAP financial measures rather than net loss, which is the most directly comparable financial measure calculated in accordance with GAAP.
Some of the limitations of Adjusted EBITDA include (i) Adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures. In evaluating Adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. When evaluating our performance, you should consider Adjusted EBITDA alongside other financial performance measures, including our net loss and other GAAP results.

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The following tables reconcile net loss to Adjusted EBITDA for the three and six months ended September 30, 2024 and 2023 on a Company-wide basis and for each of our segments:
 Three Months Ended September 30,
Six Months Ended September 30,
 20242023$ Change% Change20242023$ Change% Change
 
(in thousands, except percentages)
Segment Revenue: (1)
Consumer and Research Services$44,071 $49,999 $(5,928)(12 %)$84,485 $110,863 $(26,378)(24 %)
Total revenue$44,071 $49,999 $(5,928)(12 %)$84,485 $110,863 $(26,378)(24 %)
Segment Adjusted EBITDA:
Consumer and Research Services Adjusted EBITDA$(8,633)$(6,673)$(1,960)29 %$(17,474)$(12,275)$(5,199)42 %
Therapeutics Adjusted EBITDA(11,975)(26,224)14,249 (54 %)(24,392)(57,363)$32,971 (57 %)
Unallocated Corporate (2)
(12,804)(12,156)(648)5 %(26,708)(25,215)$(1,493)6 %
Total Adjusted EBITDA$(33,412)$(45,053)$11,641 (26 %)$(68,574)$(94,853)$26,279 (28 %)
Reconciliation of net loss to Adjusted EBITDA:
Net loss$(59,103)$(75,270)$16,167 (21 %)$(128,503)$(179,894)$51,391 (29 %)
Adjustments:
Interest income, net(2,009)(3,752)1,743 (46 %)(4,583)(8,059)3,476 (43 %)
Other (income) expense, net(15)(145)130 (90 %)4 (477)481 (101 %)
Provision for (benefit from) income taxes(41)36 (77)(214 %)(41)36 (77)(214 %)
Depreciation and amortization4,972 4,474 498 11 %8,983 8,951 32 — %
Amortization of acquired intangible assets1,775 3,638 (1,863)(51 %)3,551 7,277 (3,726)(51 %)
Stock-based compensation expense19,486 23,741 (4,255)(18 %)41,063 74,840 (33,777)(45 %)
Loss on disposition of Lemonaid Health and transaction-related costs(3)
— 2,127 (2,127)(100 %)— 2,375 (2,375)(100 %)
Litigation settlement cost— 98 (98)(100 %)— 98 (98)(100 %)
Cyber security incident expenses, net of probable insurance recoveries (4)
1,523 — 1,523 100 %10,952 — 10,952 100 %
Total Adjusted EBITDA$(33,412)$(45,053)$11,641 (26 %)$(68,574)$(94,853)$26,279 (28 %)
(1)There was no Therapeutics revenue for the three and six months ended September 30, 2024 and 2023.
(2)Certain department expenses such as Finance, Legal, Regulatory and Supplier Quality, Corporate Communications, Corporate Development, and CEO Office are not reported as part of the reporting segments as reviewed by the CODM. These amounts are included in Unallocated Corporate.
(3)Refer to Note 17, “Disposition of Subsidiary” for additional information.
(4)Refer to Note 11, “Commitments and Contingencies — Cyber Security Incident” for additional information.
Consumer and Research Services
Three Months Ended September 30, 2024
Consumer and Research Services Adjusted EBITDA decreased by $2.0 million, or 29%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, due to a decrease in revenue of $5.9 million, or 12%, partially offset by a decrease in expenses of $3.9 million, or 7%.
Consumer and Research Services revenue decreased driven by a $5.1 million decrease in consumer services revenue, which included a $6.9 million decrease in PGS kit revenue mainly related to lower PGS kit sales volume, as well as a lower average selling price due to greater promotions and discounts versus the prior year quarter. The decrease in consumer services revenue also included a $1.0 million decrease in telehealth services revenue and a $1.7 million decrease in telehealth tangible product revenue, primarily driven by lower medical visits and pharmacy sales compared to the prior year quarter. In addition, there was a $0.8 million decrease in research services revenue, primarily attributable to a decrease in revenue from the GSK collaboration. These decreases were partially offset by a $4.5 million increase in consumer PGS membership services revenue.

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Consumer and Research Services expenses decreased primarily due to a $2.9 million decrease in shipping and fulfillment, lab supplies and processing, and kit costs due to lower PGS kit sales volume. There was also a $0.8 million decrease in payroll-related expenses, and a $0.8 million decrease in advertising and brand-related expenses. These decreases were partially offset by a $0.5 million net increase in other expenses.
Six Months Ended September 30, 2024
Consumer and Research Services Adjusted EBITDA decreased by $5.2 million, or 42%, for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023, due to a decrease in revenue of $26.4 million, or 24%, partially offset by a decrease in expenses of $21.2 million, or 17%.
Consumer and Research Services revenue decreased driven by a $13.4 million decrease in consumer services revenue, which included a $14.8 million decrease in PGS kit revenue mainly related to lower PGS kit sales volume, as well as a lower average selling price due to greater promotions and discounts versus the prior year period. The decrease in consumer services revenue also included a $2.9 million decrease in telehealth services revenue and a $3.5 million decrease in telehealth tangible product revenue, primarily driven by lower medical visits and pharmacy sales, partially related to the disposition of Lemonaid Health Limited compared to the prior year period. In addition, there was a $12.9 million decrease in research services revenue, of which $11.7 million was attributable to the conclusion of the exclusive target discovery term of the original GSK Agreement in July 2023. These decreases were partially offset by a $7.8 million increase in consumer PGS membership services revenue.
Consumer and Research Services expenses decreased due to a $7.6 million decrease in payroll-related expenses primarily related to a reduction in force and the disposition of Lemonaid Health Limited. There was also a $7.1 million decrease in advertising and brand-related expenses due to a reduction in marketing campaigns and spend. In addition, there was a $6.6 million decrease in shipping and fulfillment, lab supplies and processing, and kit costs due to lower PGS kit sales volume. Non-capitalized equipment and supplies decreased by $1.3 million, consulting costs decreased by $0.8 million and other operating expenses decreased by $1.1 million. These decreases were partially offset by a $2.3 million increase in expenses due to fewer internal use software project hours in development and a $1.0 million increase in overhead allocations.
Therapeutics
Therapeutics’ Adjusted EBITDA improved by $14.2 million, or 54%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, resulting from a decrease in expenses. There was a $7.8 million decrease in lab-related research services as we opted for a royalty on several GSK partnered programs, resulting in a significant reduction of GSK collaboration expenses during the three months ended September 30, 2024. In addition, there was a $5.0 million decrease in payroll-related expenses as a result of reductions in force and a $1.4 million net decrease in other expenses.
Therapeutics’ Adjusted EBITDA improved by $33.0 million, or 57%, for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023, resulting from a decrease in expenses. There was a $20.1 million decrease in lab-related research services as we opted for a royalty on several GSK partnered programs, resulting in a significant reduction of GSK collaboration expenses during the six months ended September 30, 2024. In addition, there was a $10.3 million decrease in payroll-related expenses as a result of reductions in force, a $1.3 million decrease in non-capitalized equipment and supplies, a $0.8 million decrease in overhead allocations and a $0.5 million net decrease in other expenses.
There was no revenue for the Therapeutics segment for the six months ended September 30, 2024 and 2023.
Liquidity and Capital Resources
We have financed our operations primarily through sales of equity securities and sales of PGS, telehealth, and research services. During fiscal 2022, we received gross proceeds of $309.7 million from the Merger and $250.0 million from the PIPE investment consummated in connection with the Merger. Our primary requirements for liquidity and capital are to fund operating needs and finance working capital, capital expenditures, and general corporate purposes.
As of September 30, 2024, our principal source of liquidity was our cash and cash equivalents balance of $126.6 million, which is held for working capital purposes. We have incurred significant operating losses as reflected in our accumulated deficit and negative cash flows from operations. We had an accumulated deficit of $2.3 billion as of September 30, 2024.

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We will need additional liquidity to fund our necessary expenditures and financial commitments for 12 months after the date that the unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q are issued. We have determined that, as of the filing date of this report, there is substantial doubt about our ability to continue as a going concern.
To improve our financial condition and liquidity position, we are working to execute our business plan, manage ongoing operational expenses, and implement cost-cutting measures, as well as considering raising additional capital. See Note 19, “Subsequent Events” for additional details. Our ability to continue as a going concern, however, is contingent upon our ability to successfully implement our operational and financial plans, and if we fail to do so and/or are unable to raise sufficient capital or consummate a strategic transaction, we could be forced to modify or cease operations. While we believe in the viability of our strategy, there are numerous risks and uncertainties that may prevent, and there can be no assurances regarding, the successful implementation of our operational and financial plans and/or the consummation of any transactions. See Note 1, “Organization and Description of Business” for additional details.

The unaudited interim condensed consolidated financial statements have been prepared assuming that we will continue as a going concern.
Our future capital requirements will depend on many factors including our revenue growth rate, the timing and extent of spending to support further sales and marketing activities, and research and development efforts. We may continue to enter into arrangements to acquire or invest in complementary businesses, products, and technologies. We may not be able to obtain additional financing on terms acceptable to us or at all. Our ability to obtain additional financing depends on a number of factors, including, but not limited to, the market price of our Class A common stock, the availability and cost of additional equity capital, our ability to retain the listing of our Class A common stock on The Nasdaq Stock Market, and the general economic and industry conditions affecting the availability and cost of capital. If we raise additional funds by issuing equity or equity-linked securities, our stockholders may experience dilution. Future debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition would be materially and adversely affected. See Note 2, "Summary of Significant Accounting Policies - Liquidity and Going Concern."
Cash from operations could also be affected by our customers and other risks, including, without limitation, those risks set forth in Part I, Item 1A, “Risk Factors,” of our Fiscal 2024 Form 10-K, as amended and supplemented in our subsequent reports and filings with the SEC. We will require additional financing to execute our ongoing and future operations and expect to continue to maintain financing flexibility in the current market conditions.
On February 6, 2023, we entered into a Sales Agreement (the “Sales Agreement”) with Cowen and Company, LLC (the “Agent”), pursuant to which we may sell, from time to time, at our option, up to $150.0 million in aggregate principal amount of an indeterminate amount of shares of our Class A common stock, $0.0001 par value per share (the “ATM Shares”), through the Agent, as our sales agent (the “ATM program”). Subject to the terms of the Sales Agreement, the Agent will use reasonable efforts to sell the ATM Shares from time to time, based upon our instructions (including any price, time, or size limits or other customary parameters or conditions that we may impose), by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, and pursuant to the Shelf Registration Statement on Form S-3 that we filed with the SEC on February 6, 2023. We will pay the Agent a commission of 3.0% of the gross proceeds from the sales of the ATM Shares, if any. We have also agreed to provide the Agent with customary indemnification and contribution rights. The offering of the ATM Shares will terminate upon the earliest of (a) the sale of the maximum number or amount of the ATM Shares permitted to be sold under the Sales Agreement and (b) the termination of the Sales Agreement by the parties thereto. While we cannot provide any assurances that we will sell any ATM Shares pursuant to the Sales Agreement, we expect to use the net proceeds from the sale of securities under the Sales Agreement, if any, for general corporate purposes, including working capital requirements and operating expenses; we, however, have not allocated the net proceeds for specific purposes. As of the date of this Form 10-Q, we have not made any sales under the Sales Agreement.
For the six months ended September 30, 2024, there were no material changes outside of the ordinary course of business in our commitments and contractual obligations disclosed in the Fiscal 2024 Form 10-K, except for the settlement related to the cyber security incident. During the six months ended September 30, 2024, the Company recorded a payable related to the settlement of $30.0 million. See Note 11, “Commitments and Contingencies,” to our condensed consolidated financial statements included elsewhere in this Form 10-Q for additional details.

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Cash Flows
The following table summarizes our cash flows for the periods presented:
Six Months Ended September 30,
20242023
(in thousands)
Net cash used in operating activities$(84,200)$(126,474)
Net cash used in investing activities$(3,856)$(5,468)
Net cash provided by financing activities$269 $1,479 
Cash Flows from Operating Activities
Net cash used in operating activities of $84.2 million for the six months ended September 30, 2024 was primarily related to a net loss of $128.5 million, partially offset by non-cash charges for stock-based compensation of $41.1 million, depreciation and amortization of $7.9 million, and amortization and impairment of internal-use software of $4.6 million. The net changes in operating assets and liabilities of $9.2 million were primarily related to a decrease in accounts payable of $5.1 million primarily due to the timing of vendor payments, a decrease in deferred revenue of $5.1 million as a result of a decrease in research services deferred revenue related to GSK collaboration, and lower PGS kit sales, a decrease in operating lease liabilities of $4.8 million primarily due to lease payments, an increase in inventories of $2.4 million primarily driven by an increase in kit inventory in preparation for July’s and October’s Amazon Prime Day, and an increase in deferred cost of revenue of $1.0 million primarily due to PGS kits sales during the holiday season. These were partially offset by an increase in accrued and other current liabilities of $1.9 million due to timing of vendor invoice receipts, a decrease in accounts receivable of $2.9 million primarily due to timing of customer billing, and a decrease in operating right-of-use assets of $3.8 million primarily due to right-of-use assets amortization.
Net cash used in operating activities of $126.5 million for the six months ended September 30, 2023 was primarily related to a net loss of $179.9 million, partially offset by non-cash charges for stock-based compensation of $74.8 million, depreciation and amortization of $13.7 million, amortization and impairment of internal-use software of $2.5 million, and loss on the disposition of Lemonaid Health Limited of $2.0 million. The net changes in operating assets and liabilities of $39.2 million were primarily related to a decrease in deferred revenue of $22.2 million as a result of a decrease in research services deferred revenue related to the GSK collaboration, a decrease in operating lease liabilities of $4.2 million primarily due to lease payments, a decrease in accounts payable of $4.0 million primarily due to the timing of payments, a decrease in accrued and other current liabilities of $5.7 million primarily due to timing of vendor invoice receipts, an increase in inventories of $4.7 million primarily driven by a buildup of kit inventory in preparation for the holiday season and an increase in prepaid expenses and other current assets of $2.4 million primarily due to an increase in prepaid insurance. These decreases were partially offset by a decrease in operating right-of-use assets of $3.5 million primarily due to right-of-use assets amortization.
Cash Flows from Investing Activities
Net cash used in investing activities was $3.9 million for the six months ended September 30, 2024, which consisted of capitalization of internal-use software costs of $3.4 million and purchases of property and equipment of $0.6 million, offset by proceeds from sale of property and equipment of $0.2 million.
Net cash used in investing activities was $5.5 million for the six months ended September 30, 2023, which consisted of capitalization of internal-use software costs of $4.8 million and purchases of property and equipment of $0.7 million.
Cash Flows from Financing Activities
Net cash provided by financing activities was $269.0 thousand for the six months ended September 30, 2024.
Net cash provided by financing activities was $1.5 million for the six months ended September 30, 2023, which consisted of $0.5 million in proceeds from the exercise of stock options and $1.4 million in proceeds from the issuance of Class A common stock under the ESPP, partially offset by $0.1 million in payments for taxes related to net share settlement of equity award and $0.3 million in payments of deferred offering costs.

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Contractual Obligations and Commitments
Our lease portfolio includes leased offices, dedicated lab facility and storage space, and dedicated data center facility space, with remaining contractual periods ranging from 1.3 years to 6.8 years. Refer to Note 10, “Leases,” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for a summary of our future minimum lease obligations.
In the normal course of business, we enter into non-cancelable purchase commitments with various parties for purchases. Refer to Note 11, “Commitments and Contingencies,” to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for a summary of our commitments as of September 30, 2024.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements and the related notes thereto included elsewhere in this Form 10-Q are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected. We believe that the following are the critical accounting policies used in the preparation of our condensed consolidated financial statements, as well as the significant estimates and judgments affecting the application of these policies. This discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes included in this Form 10-Q.
Our significant accounting policies are described in Note 2 to our consolidated financial statements included in our Fiscal 2024 Form 10-K. These are the policies that we believe are the most critical to aid in fully understanding and evaluating our condensed consolidated financial condition and results of operations.
Revenue Recognition
We generate revenue from our Consumer and Research Services segment, which includes revenue from PGS, telehealth, and research services. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration that we expect to receive in exchange for these goods or services.
We sell through multiple channels, including direct-to-consumer via our website and through online retailers. If the customer does not return the kit, services cannot be completed by us, potentially resulting in unexercised rights (“breakage”) revenue. To estimate breakage, we apply the practical expedient available under ASC 606 to assess our customer contracts on a portfolio basis as opposed to individual customer contracts, due to the similarity of customer characteristics, at the sales channel level. We recognize the breakage amounts as revenue, proportionate to the pattern of revenue recognition of the returning kits in these respective sales channel portfolios. We estimate breakage for the portion of kits not expected to be returned using an analysis of historical data and consider other factors that could influence customer kit return behavior. We update our breakage rate estimate periodically and, if necessary, adjust the deferred revenue balance accordingly. If actual return patterns vary from the estimate, actual breakage revenue may differ from the amounts recorded.
We recognized breakage revenue from unreturned kits of $5.4 million and $4.3 million for the three months ended September 30, 2024 and 2023, respectively, and $9.4 million and $8.9 million for the six months ended September 30, 2024 and 2023, respectively. A hypothetical ten percent change in our breakage rate estimate would not have had a material impact on total revenue recognized during the three and six months ended September 30, 2024.
There have been no material changes to our critical accounting policies and estimates as compared to those described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in the Fiscal 2024 Form 10-K.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We have operations primarily within the United States and we are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. We do not believe that inflation has had a material effect on our business, results of

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operations or financial condition. Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability or failure to do so could harm our business, results of operations or financial conditions.
Interest Rate Risk
As of September 30, 2024, we had $126.6 million in cash and cash equivalents. Our cash equivalents are comprised primarily of money market accounts. Due to the short-term nature of these instruments, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates. Declines in interest rates, however, would reduce future interest income and cash flows. A hypothetical 10% change in interest rates during the three and six months ended September 30, 2024 and 2023 would not have had a material impact on our historical condensed consolidated financial statements.
Foreign Currency Risk
Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Currently, substantially all our revenue and expenses are denominated in U.S. dollars. Revenue and expenses are remeasured each day at the exchange rate in effect on the day the transaction occurred. Our results of operations and cash flows in the future may be adversely affected due to an expansion of non-U.S. dollar denominated contracts and changes in foreign exchange rates. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our historical condensed consolidated financial statements for the three and six months ended September 30, 2024 and 2023. To date, we have not engaged in any hedging strategies. If our international activities grow, we will continue to reassess our approach to manage the risk relating to fluctuations in currency rates.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance of achieving the desired control objectives. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

As of September 30, 2024, as required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as a result of the material weakness in internal control over financial reporting as described below, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective as of September 30, 2024.

As a result of the resignations of seven non-employee directors from the Company’s Board of Directors on September 17, 2024, the Company did not have a majority independent Board of Directors with an independent Audit Committee as of September 30, 2024. Accordingly, material weaknesses in the control environment and monitoring of the internal control over financial reporting were identified as a result of the lack of oversight by an independent Audit Committee to assess the development and performance of internal control, maintain reporting lines and responsibilities, and demonstrate a commitment to integrity and ethical values that support a functioning system of internal control, all of which impacted the Company’s ability to monitor and evaluate whether the components of internal control were present and functioning and properly evaluate deficiencies.
Remediation Efforts to Address Deficiencies in Internal Control Over Financial Reporting


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On October 29, 2024, the Company announced the appointment of three independent board members (the “New Directors”), each of whom were appointed to the Audit Committee of the Board of Directors. Each of the New Directors (i) qualifies as an Independent Director (as defined in Nasdaq Listing Rule 5605(a)(2)), (ii) meets the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended, (iii) has not participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the past three years, and (iv) is able to read and understand fundamental financial statements. Additionally, at least one of the New Directors qualifies and was designated as the “audit committee financial expert.” The Company is working to remediate the material weakness upon demonstration of effective oversight of external financial reporting and internal controls over financial reporting within fiscal 2025.
Changes in Internal Control over Financial Reporting
Except with respect to the material weakness described above, there was no change in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the fiscal quarter ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The information set forth in Note 11, “Commitments and Contingencies,” of the Condensed Consolidated Financial Statements of this Form 10-Q is incorporated herein by reference.
Item 1A. Risk Factors
Except as set forth below, there have been no material changes to the risk factors set forth in Part I, Item 1A., “Risk Factors,” of the Fiscal 2024 Form 10-K.
There is substantial doubt regarding our ability to continue as a going concern.

We incurred significant operating losses as reflected in our accumulated deficit and negative cash flows from operations. As of September 30, 2024, we had an accumulated deficit of $2.3 billion, and cash and cash equivalents of $126.6 million. We will need additional liquidity to fund our necessary expenditures and financial commitments for 12 months after the date that the unaudited condensed consolidated financial statements included in this Form 10-Q are issued. We have determined that, as of the filing date of this report, there is substantial doubt about our ability to continue as a going concern.

To improve our financial condition and liquidity position, we are working to execute our business plan, manage ongoing operational expenses, and implement cost-cutting measures, as well as considering raising additional capital. Our ability to continue as a going concern, however, is contingent upon our ability to successfully implement our operational and financial plans, and if we fail to do so and/or are unable to raise sufficient capital or consummate a strategic transaction, we could be forced to modify or cease operations. While we believe in the viability of our strategy there are numerous risks and uncertainties may prevent, and there can be no assurances regarding, the successful implementation of our operational and financial plans and/or the consummation of any transactions.

Furthermore, the reaction of investors to our potential inability to continue as a going concern could also have a material and adverse impact on the price of our Class A common stock, which could negatively impact our ability to obtain stock-based financing or enter into strategic transactions. Additionally, the perception that we may not be able to continue as a going concern may cause prospective partners or collaborators to choose not to conduct business with us due to concerns about our ability to meet our contractual obligations and continue operating our business without interruption.

The ultimate effect of the Reverse Stock Split on the market price of our Class A common stock cannot be predicted with any certainty and may decrease the liquidity of our Class A common stock and magnify any decrease in our overall market capitalization.

Effective October 16, 2024, we effected a one-for-twenty reverse stock split of all of our issued and outstanding shares of Class A common stock and Class B common stock, pursuant to which every twenty shares of our Class A common stock and Class B common stock were automatically combined into one issued and outstanding share of our respective Class A common stock and Class B common stock.

The ultimate effect of the Reverse Stock Split on the market price of our Class A common stock cannot be predicted with any certainty, and we cannot assure you that the Reverse Stock Split will result in any or all of the expected benefits, including enabling us to maintain compliance with the Nasdaq listing standards for any meaningful period of time. While the reduction in the number of outstanding shares of our Class A common stock increased the market price of our Class A common stock such that we were able to regain compliance with Nasdaq’s Minimum Bid Requirement, we cannot assure you that the Reverse Stock Split will result in any permanent or sustained increase in the market price of our Class A common stock. The market price of our Class A common stock depends on multiple factors, many of which are unrelated to the number of shares outstanding, including our business and financial performance, general market conditions, and prospects for future success, any of which could have a counteracting effect to the Reverse Stock Split on the per share price.

In addition, the Reverse Stock Split also reduced the total number of outstanding shares of our Class A common stock, which may lead to reduced trading for our Class A common stock. As a result of a lower number of shares outstanding, the market for our Class A common stock may also become more volatile. The Reverse Stock Split also increased the number of stockholders who own “odd lots” of less than 100 shares of Class A common stock. A purchase or sale of less than 100 shares of Class A common stock (an “odd lot” transaction) may result in incrementally higher trading costs through certain brokers, particularly “full service” brokers. Therefore, those stockholders who own fewer than 100

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shares of Class A common stock following the Reverse Stock Split may be required to pay higher transaction costs if they sell their Class A common stock.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
Costs Associated with Exit or Disposal Activities

On November 8, 2024, the Company’s Board of Directors approved a reduction in force involving 223 employees, representing approximately 40% of the Company’s workforce (the “November Reduction in Force”). The November Reduction in Force also includes ceasing additional development in the Company’s two clinical trials and the closure of substantially all operations in the Company’s Therapeutics business segment (together with the November Reduction in Force, the “Reduction Plan”). The Reduction Plan is intended to restructure and strategically align the Company’s workforce and organization with the Company’s current strategy and to reduce the Company’s operating costs.

The Company expects to complete the Reduction Plan substantially during the third quarter of its fiscal year ending March 31, 2025 (“fiscal 2025”), with certain affected employees retained through a transition period expected to end no later than the end of fiscal 2025.

The Company expects to recognize restructuring charges in connection with the November Reduction in Force with respect to severance payments, benefits continuation, and stock compensation charges associated with the modification of certain stock options and restricted stock units (“equity compensation charges”). All such charges are expected to total approximately $11.7 million, of this amount, severance payments and benefit continuation charges are estimated to be approximately $9.3 million and are expected to be recognized primarily during the third quarter of fiscal 2025, with the majority of such charges anticipated to be paid in cash during the same fiscal quarter. Equity compensation charges are expected to be approximately $2.4 million and are expected to be recognized primarily in the third quarter of fiscal 2025, and will not result in any cash expenditures. The Company expects that the Reduction Plan, when fully implemented, will reduce annualized payroll and benefit expenses by more than $35.0 million.

Rule 10b5-1 Trading Arrangements and Non-Rule 10b5-1 Trading Arrangements
None of the Company’s directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended September 30, 2024.



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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q (unless otherwise indicated, the file number with respect to each filed document is 001-39587):
Exhibit Index
31.1*
31.2*
32.1**
32.2**
101.INSInline XBRL Instance Document
101.SCHInline XBRL Taxonomy Extension Schema
101.CALInline XBRL Taxonomy Extension Calculation Linkbase
101.DEFInline XBRL Taxonomy Extension Definition Linkbase
101.LABInline XBRL Taxonomy Extension Label Linkbase
101.PREInline XBRL Taxonomy Extension Presentation Linkbase
104Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit)
*Filed herewith
**Furnished herewith

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
23ANDME HOLDING CO.
Date:November 12, 2024By: /s/ Anne Wojcicki
Name: Anne Wojcicki
Chief Executive Officer and President
(Principal Executive Officer)
Date:November 12, 2024By: /s/ Joseph Selsavage
Name: Joseph Selsavage
Chief Financial and Accounting Officer
(Principal Financial and Accounting Officer)