Caris Life Sciences, Inc. 10-Q

cai-20250930 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________ FORM 10-Q _________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission file number: 001-42706 _________________________________________ CARIS LIFE SCIENCES, INC. (Exact name of registrant as specified in its charter) _________________________________________ Texas 85-2077369 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) 750 W. John Carpenter Freeway Suite 800 Irving , TX 75039 (Address of principal executive offices, including ZIP code) Registrant’s telephone number, including area code: ( 866 ) 771-8946 Not applicable (Former name or former address, if changed since last report) _________________________________________ Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.001 par value CAI The Nasdaq Stock Market LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of November 3, 2025, the registrant had 282,146,923 shares of common stock, par value $0.001 par per share, outstanding. Table of Contents CARIS LIFE SCIENCES, INC. FORM 10-Q TABLE OF CONTENTS Page Special Note Regarding Forward-Looking Statements 1 Part I - Financial Information Item 1. Condensed Consolidated Financial Statements (Unaudited) 2 Condensed Consolidated Balance Sheets 2 Condensed Consolidated Statements of Operations and Comprehensive Income ( Loss ) 3 Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Shareholders’ Equity ( Deficit ) 4 Condensed Consolidated Statements of Cash Flows 6 Notes to Condensed Consolidated Financial Statements 7 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 36 Item 3. Quantitative and Qualitative Disclosures About Market Risk 54 Item 4. Controls and Procedures 55 Part II - Other Information Item 1. Legal Proceedings 56 Item 1A. Risk Factors 56 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 123 Item 3. Defaults Upon Senior Securities 123 Item 4. Mine Safety Disclosures 123 Item 5. Other Information 123 Item 6. Exhibits 124 Signatures 125 Table of Contents Special Note Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our expectations of future results of operations and financial condition, business strategy, solutions, technology, R&D costs, regulatory approvals, potential market opportunity, anticipated trends in our business, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that are in some cases beyond our control and may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would,” or the negative of these terms or other similar expressions, are intended to identify forward looking statements. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about: • developments in the precision oncology industry, including our biopharma partners’ use of molecular information and the market size for molecular information services; • our expectations as to our addressable U.S. market in oncology, future financial performance, results of operations, or other operational results or metrics; • the ability of the Caris platform to help our biopharma partners and physicians improve the efficiency and success of their therapeutic development, and clinical programs; • our ability to scale the Caris platform and develop new solutions or enhancements to existing solutions; • our ability to capture, aggregate, analyze, or otherwise utilize molecular information in novel ways; • our ability to compete with companies that are currently in, or may in the future enter, the industry in which we operate; • third-party payer reimbursement and coverage decisions; • our ability to establish, maintain, protect, and enforce our intellectual property rights of our solutions; • federal, state, and foreign regulatory requirements, including FDA regulation of our solutions; • the timing, likelihood, or conditions of regulatory filings and approvals; • our ability to hire and retain key personnel; • our anticipated cash needs and our estimates regarding our capital requirements; • our estimates regarding our expenses, future revenue, and capital requirements; and • remediating the material weakness in our internal control over financial reporting. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report and in other filings we make with the Securities and Exchange Commission from time to time. Moreover, we operate in a competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Although we believe that the expectations reflected in our forward-looking statements are reasonable based on the information available to us when they are made, we cannot guarantee that the future results, advancements, discoveries, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these forward-looking statements. We undertake no obligation to update any forward-looking statements, which speak only as the date they are made, for any reason after the date of this Quarterly Report. 1 Table of Contents Part I - Financial Information Item 1. Condensed Consolidated Financial Statements (Unaudited) CARIS LIFE SCIENCES, INC CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (amounts in thousands, except share data) As of September 30, As of December 31, 2025 2024 Assets Current assets: Cash, cash equivalents, and restricted cash $ 754,739 $ 65,442 Short-term marketable securities 2,272 2,201 Accounts receivable 26,697 88,244 Supplies 49,303 39,572 Prepaid expenses and other current assets 21,234 20,270 Total current assets 854,245 215,729 Property and equipment, net 63,997 67,817 Goodwill 19,344 19,344 Other assets 46,985 40,844 Total assets $ 984,571 $ 343,734 Liabilities, Redeemable Convertible Preferred Stock, and Shareholders' Equity (Deficit) Current liabilities: Accounts payable $ 28,999 $ 27,791 Accrued expenses and other current liabilities 56,867 77,542 Current portion of indebtedness 164 60,090 Total current liabilities 86,030 165,423 Long-term indebtedness, net of debt discounts 376,296 319,438 Warrant liabilities — 91,642 Other long-term liabilities 43,881 44,418 Total liabilities 506,207 620,921 Commitments and contingencies (see note 9 ) Redeemable convertible preferred stock: Series A preferred stock, par value $ 0.001 : no and 490,000,000 shares authorized as of September 30, 2025 and December 31, 2024; no and 485,795,293 shares issued and outstanding as of September 30, 2025 and December 31, 2024; and $ 296,335 aggregate liquidation preference as of December 31, 2024 — 709,261 Series B preferred stock, par value $ 0.001 : no and 30,000,000 shares authorized as of September 30, 2025 and December 31, 2024; no and 29,629,630 shares issued and outstanding as of September 30, 2025 and December 31, 2024; and $ 16,000 aggregate liquidation preference as of December 31, 2024 — 42,963 Series C preferred stock, par value $ 0.001 : no and 142,000,000 shares authorized as of September 30, 2025 and December 31, 2024; no and 116,200,835 shares issued and outstanding as of September 30, 2025 and December 31, 2024; and $ 408,715 aggregate liquidation preference as of December 31, 2024 — 408,715 Series D preferred stock, par value $ 0.001 : no and 102,600,000 shares authorized as of September 30, 2025 and December 31, 2024; no and 102,516,283 shares issued and outstanding as of September 30, 2025 and December 31, 2024; and $ 1,060,712 aggregate liquidation preference as of December 31, 2024 — 1,060,712 Redeemable convertible preferred stock — 2,221,651 Shareholders' equity (deficit): Preferred stock, $ 0.001 par value per share; 100,000,000 and no shares authorized as of September 30, 2025 and December 31, 2024, respectively; no shares issued and outstanding as of September 30, 2025 and December 31, 2024 — — Common stock $ 0.001 par value; 2,800,000,000 and 1,150,000,000 shares authorized as of September 30, 2025 and December 31, 2024, respectively; 283,723,897 and 36,686,819 shares issued as of September 30, 2025 and December 31, 2024, respectively; 282,103,259 and 36,504,319 shares outstanding as of September 30, 2025 and December 31, 2024, respectively; shares issued and outstanding include 23,446 and 662,000 unvested shares subject to repurchase as of September 30, 2025 and December 31, 2024, respectively 283 38 Treasury stock at cost, 1,620,638 and 182,500 shares of common stock as of September 30, 2025 and December 31, 2024, respectively ( 16,917 ) ( 330 ) Additional paid-in capital 3,124,943 — Related party promissory note receivable (see note 7 ) — ( 26,456 ) Accumulated deficit ( 2,630,693 ) ( 2,472,300 ) Accumulated other comprehensive income 748 210 Total shareholders' equity (deficit) 478,364 ( 2,498,838 ) Total liabilities, redeemable convertible preferred stock, and shareholders' equity (deficit) $ 984,571 $ 343,734 The accompanying notes are an integral part of these condensed consolidated financial statements 2 Table of Contents CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (amounts in thousands, except share and per share data) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenue: Molecular profiling services $ 207,587 $ 93,803 $ 484,593 $ 254,692 Pharma research and development services 9,246 7,817 34,554 27,653 Total revenue 216,833 101,620 519,147 282,345 Costs and operating expenses: Cost of Services - Molecular profiling services 66,980 54,810 193,195 167,134 Cost of Services - Pharma research and development services 2,347 2,398 7,698 7,130 Selling and marketing expense 41,267 36,758 123,355 115,077 General and administrative expense (see note 10 ) 51,973 40,852 168,458 126,273 Research and development expense 21,624 27,644 69,739 86,807 Total costs and operating expenses 184,191 162,462 562,445 502,421 Income (Loss) from operations 32,642 ( 60,842 ) ( 43,298 ) ( 220,076 ) Other expense, net: Interest income 7,360 1,744 9,482 6,152 Interest expense ( 13,507 ) ( 13,799 ) ( 45,497 ) ( 36,763 ) Changes in fair value of financial instruments ( 2,081 ) 5,131 ( 52,285 ) 6,067 Other income (expense), net ( 89 ) 37 ( 18,447 ) ( 323 ) Total other expense, net ( 8,317 ) ( 6,887 ) ( 106,747 ) ( 24,867 ) Income (Loss) before income taxes and provision for income taxes 24,325 ( 67,729 ) ( 150,045 ) ( 244,943 ) Provision for income taxes — — — — Net income (loss) 24,325 ( 67,729 ) ( 150,045 ) ( 244,943 ) Other comprehensive income, net of tax: Unrealized gain on available-for-sale securities — — — 7 Foreign currency translation adjustments 79 ( 120 ) 538 ( 20 ) Comprehensive income (loss) 24,404 ( 67,849 ) ( 149,507 ) ( 244,956 ) Net income (loss) attributable to common shareholders: Net income (loss) 24,325 ( 67,729 ) ( 150,045 ) ( 244,943 ) Deemed dividend from Series D redeemable convertible preferred stock (see note 6 ) — — ( 384,436 ) — Adjustments of redeemable convertible preferred stock to redemption value — ( 24,661 ) ( 85,433 ) ( 71,368 ) Net income (loss) attributable to common shareholders $ 24,325 $ ( 92,390 ) $ ( 619,914 ) $ ( 316,311 ) Net income (loss) per share attributable to common shareholders: Basic $ 0.09 $ ( 2.59 ) $ ( 4.83 ) $ ( 8.92 ) Diluted $ 0.08 $ ( 2.59 ) $ ( 4.83 ) $ ( 8.92 ) Weighted-average shares used in computing net income (loss) per share attributable to common shareholders: Basic 282,099,073 35,643,589 128,447,673 35,442,927 Diluted 297,211,838 35,643,589 128,447,673 35,442,927 The accompanying notes are an integral part of these condensed consolidated financial statements 3 Table of Contents CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY (DEFICIT) (UNAUDITED) Three Months Ended September 30, 2025 Redeemable Convertible Preferred Stock Common Stock Treasury Stock Additional Paid-In Capital Related Party Promissory Note Receivable Accumulated Deficit Accumulated Other Comprehensive Income Total Shareholders' Equity (amounts in thousands, except share data) Shares Amount Shares Amount Shares Amount Balances at June 30, 2025 — $ — 281,090,538 $ 282 1,620,638 $ ( 16,917 ) $ 3,123,888 $ — $ ( 2,655,018 ) $ 669 $ 452,904 Issuance of Series E Preferred Stock, net of issuance costs — ( 276 ) — — — — — — — — — Issuance of Series F Preferred Stock, net of issuance costs — ( 104 ) — — — — — — — — — Stock-based compensation — — — — — — 13,655 — — — 13,655 Issuance of common stock upon exercise of stock options — — 600,133 1 — — 1,152 — — — 1,153 Shares withheld for taxes related to net exercise of options — — ( 220,273 ) — — — ( 16,152 ) — — — ( 16,152 ) Vesting of shares from early exercised stock options — — — — — — 327 — — — 327 RSU's vested upon IPO, settled in August 2025 — — 1,048,250 — — — — — — — — Shares withheld for taxes related to settled RSUs — — ( 415,389 ) — — — — — — — — Conversion of preferred stock to common stock — 380 — — — — ( 380 ) — — — ( 380 ) Net exercise of the 2025 Warrants in connection with initial public offering — — — — — — ( 573 ) — — — ( 573 ) Conversion of the 2025 Convertible Note — — — — — — 3,034 — — — 3,034 Other comprehensive income — — — — — — ( 8 ) — — 79 71 Net loss — — — — — — — — 24,325 — 24,325 Balances at September 30, 2025 — $ — 282,103,259 $ 283 1,620,638 $ ( 16,917 ) $ 3,124,943 $ — $ ( 2,630,693 ) $ 748 $ 478,364 Three Months Ended September 30, 2024 Redeemable Convertible Preferred Stock Common Stock Treasury Stock Additional Paid-In Capital Related Party Promissory Note Receivable Accumulated Deficit Accumulated Other Comprehensive Income Total Shareholders' Deficit (amounts in thousands, except share data) Shares Amount Shares Amount Shares Amount Balances at June 30, 2024 734,142,041 $ 2,171,991 35,418,384 $ 38 182,500 $ ( 330 ) $ — $ ( 26,073 ) $ ( 2,333,550 ) $ 325 $ ( 2,359,590 ) Stock-based compensation — — — — — — 4,723 — — — 4,723 Issuance of common stock upon exercise of stock options — — 91,435 — — — 657 — — — 657 Interest income from related party promissory notes — — — — — — — ( 189 ) — — ( 189 ) Vesting of shares from early exercised stock options — — 306,000 — — — 4,956 — — — 4,956 Adjustment of preferred stock to redemption value — 24,661 — — — — ( 10,336 ) — ( 14,325 ) — ( 24,661 ) Other comprehensive income — — — — — — — — — ( 120 ) ( 120 ) Net loss — — — — — — — — ( 67,729 ) — ( 67,729 ) Balances at September 30, 2024 734,142,041 $ 2,196,652 35,815,819 $ 38 182,500 $ ( 330 ) $ — $ ( 26,262 ) $ ( 2,415,604 ) $ 205 $ ( 2,441,953 ) 4 Table of Contents Nine Months Ended September 30, 2025 Redeemable Convertible Preferred Stock Common Stock Treasury Stock Additional Paid-In Capital Related Party Promissory Note Receivable Accumulated Deficit Accumulated Other Comprehensive Income Total Shareholders' Equity (Deficit) (amounts in thousands, except share data) Shares Amount Shares Amount Shares Amount Balances at December 31, 2024 734,142,041 $ 2,221,651 35,842,319 $ 38 182,500 $ ( 330 ) $ — $ ( 26,456 ) $ ( 2,472,299 ) $ 210 $ ( 2,498,837 ) Issuance of Series E Preferred Stock, net of issuance costs 12,345,674 57,217 — — — — — — — — — Issuance of Series F Preferred Stock, net of issuance costs 4,657,401 21,617 — — — — — — — — — Stock-based compensation — — — — — — 56,639 — — — 56,639 Issuance of common stock upon exercise of stock options — — 1,948,254 1 — — 3,775 — — — 3,776 Shares withheld for taxes related to net exercise of options — — ( 355,232 ) — — — ( 18,218 ) — — — ( 18,218 ) Vesting of shares from early exercised stock options — — — — — — 327 — — — 327 RSU's vested upon IPO, settled in August 2025 — — 1,048,250 — — — — — — — — Shares withheld for taxes related to settled RSUs — — ( 415,389 ) — — — — — — — — Interest income from related party promissory notes — — — — — — — ( 128 ) — — ( 128 ) Payment of related party promissory notes — — — — — — — 26,584 — — 26,584 Repurchases of common stock — — ( 1,438,138 ) — 1,438,138 ( 16,587 ) — — — — ( 16,587 ) Adjustment of preferred stock to redemption value — 85,433 — — — — ( 77,084 ) — ( 8,349 ) — ( 85,433 ) Conversion of preferred stock to common stock, including the derecognition of associated embedded derivatives of $ 60,086 ( 751,145,116 ) ( 2,385,918 ) 211,378,638 211 — — 2,445,793 — — — 2,446,004 Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions — — 27,058,823 27 — — 519,425 — — — 519,452 Net exercise of the 2018 and 2020 Warrants in connection with initial public offering — — 4,174,907 4 — — 131,742 — — — 131,746 Net exercise of the 2025 Warrants in connection with initial public offering — — 784,231 — — — 15,926 — — — 15,926 Conversion of the 2025 Convertible Note, including the derecognition of associated embedded derivatives of $ 13,082 — — 2,076,596 2 — — 46,640 — — — 46,642 Other comprehensive income — — — — — — ( 22 ) — — 538 516 Net loss — — — — — — — — ( 150,045 ) — ( 150,045 ) Balances at September 30, 2025 — $ — 282,103,259 $ 283 1,620,638 $ ( 16,917 ) $ 3,124,943 $ — $ ( 2,630,693 ) $ 748 $ 478,364 Nine Months Ended September 30, 2024 Redeemable Convertible Preferred Stock Common Stock Treasury Stock Additional Paid-In Capital Related Party Promissory Note Receivable Accumulated Deficit Accumulated Other Comprehensive Income Total Shareholders' Deficit (amounts in thousands, except share data) Shares Amount Shares Amount Shares Amount Balances at December 31, 2023 734,142,041 $ 2,125,284 35,297,278 $ 38 182,500 $ ( 330 ) $ — $ ( 25,701 ) $ ( 2,119,175 ) $ 218 $ ( 2,144,950 ) Stock-based compensation — — — — — — 13,666 — — — 13,666 Issuance of common stock upon exercise of stock options — — 212,541 — — — 1,260 — — — 1,260 Interest income from related party promissory notes — — — — — — — ( 561 ) — — ( 561 ) Vesting of shares from early exercised stock options — — 306,000 — — — 4,956 — — — 4,956 Adjustment of preferred stock to redemption value — 71,368 — — — — ( 19,882 ) — ( 51,486 ) — ( 71,368 ) Other comprehensive income — — — — — — — — — ( 13 ) ( 13 ) Net loss — — — — — — — — ( 244,943 ) — ( 244,943 ) Balances at September 30, 2024 734,142,041 $ 2,196,652 35,815,819 $ 38 182,500 $ ( 330 ) $ — $ ( 26,262 ) $ ( 2,415,604 ) $ 205 $ ( 2,441,953 ) The accompanying notes are an integral part of these condensed consolidated financial statements 5 Table of Contents CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (amounts in thousands) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities Net loss $ ( 150,045 ) $ ( 244,943 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 18,324 39,847 Stock-based compensation expense 56,639 13,666 Non-cash operating lease expense 4,323 4,224 Amortization of debt discounts 12,163 5,148 Changes in fair value of financial instruments 52,284 ( 6,068 ) Loss on debt extinguishment 17,930 — Other 788 3,947 Changes in operating assets and liabilities: Accounts receivable 61,232 ( 15,009 ) Supplies ( 11,144 ) 4,211 Prepaid expenses and other current assets ( 4,805 ) ( 2,176 ) Other assets ( 326 ) ( 158 ) Accounts payable ( 1,196 ) 5,054 Accrued expenses and other liabilities ( 17,792 ) ( 14,021 ) Net cash provided by (used in) operating activities 38,375 ( 206,278 ) Cash flows from investing activities Maturities of marketable securities — 61,376 Purchases of property and equipment ( 11,170 ) ( 6,154 ) Net cash provided by (used in) investing activities ( 11,170 ) 55,222 Cash flows from financing activities Payments made on finance lease obligations ( 67 ) ( 136 ) Proceeds from exercise of stock options 3,775 1,258 Payment of taxes withheld from net settlement of exercised options and vested RSUs ( 18,218 ) — Payment of deferred offering costs ( 7,710 ) ( 1,034 ) Proceeds from the 2023 term loan, net of issuance costs — 199,978 Purchase of treasury stock ( 22 ) — Issuance of Series E Preferred Stock, net of issuance costs 87,637 — Issuance of Series F Preferred Stock, net of issuance costs 33,601 — Issuance of the 2025 Convertible Notes, net of issuance costs 27,865 — Issuance of the 2025 Warrants 10,270 — Payments of 2023 term loan amendment fee ( 4,000 ) — Proceeds from initial public offering, net of underwriting discounts and commissions 528,459 — Net cash provided by financing activities 661,590 200,066 Effect of exchange rate changes on cash, cash equivalents, and restricted cash 159 ( 3 ) Net increase in cash, cash equivalents, and restricted cash 688,954 49,007 Cash, cash equivalents, and restricted cash at beginning of period 68,028 60,007 Cash, cash equivalents, and restricted cash at end of period $ 756,982 $ 109,014 The accompanying notes are an integral part of these condensed consolidated financial statements 6 Table of Contents NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1. Nature of the Business Caris Life Sciences, Inc. (the “Company” or “Caris”) is a patient-centric, next-generation artificial intelligence (“AI”) TechBio company and precision medicine pioneer. The Company commercializes and develops innovative solutions to transform healthcare through the use of comprehensive molecular information, AI, and machine learning (“ML”) algorithms. The Company’s current molecular profiling services portfolio is focused on oncology and consists of MI Profile, a tissue-based molecular profiling solution, and Caris Assure, a novel, universal blood-based molecular profiling solution, with the aim to address the entire continuum of cancer treatment. The Company also collaborates with biopharmaceutical companies to provide commercial services and prospective and retrospective testing, along with data and bioinformatics collaborations and novel target identification and discovery solutions. The Company was incorporated under the laws of the Cayman Islands in November 2011 (Caris Life Sciences, Ltd.) and re-domiciled to be incorporated in Texas in July 2020 (Caris Life Sciences, Inc.) and is headquartered in Irving, Texas. The Company also has locations in Phoenix, Arizona; New York, New York; Cambridge, Massachusetts; Basel, Switzerland; and Tokyo, Japan. Note 2. Summary of Significant Accounting Policies and Estimates Basis of Financial Statement Presentation The condensed consolidated financial statements include the accounts of Caris and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company’s condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”). Unaudited Interim Consolidated Financial Information The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair statement of the Company’s financial position as of September 30, 2025, its results of operations for the three and nine months ended September 30, 2025 and 2024, and cash flows for the nine months ended September 30, 2025 and 2024. The results of operations for the nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025, or for any other future annual or interim period. The condensed consolidated balance sheet as of December 31, 2024 included herein was derived from the audited financial statements as of that date and should be read in conjunction with the audited annual consolidated financial statements. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted from these unaudited condensed consolidated financial statements. Pre-IPO Financing On April 1, 2025, the Company closed a private financing in which we issued a combination of senior convertible notes (the “2025 Convertible Notes”) with warrants (the “2025 Warrants”) to acquire shares of common stock, Series E redeemable convertible preferred stock (“Series E Preferred Stock”) and Series F redeemable convertible preferred stock (“Series F Preferred Stock”), for an aggregate of $ 167.7 million. Investors in the private financing generally participated in each of the instruments. The 2025 Convertible Notes had an aggregate principal amount of $ 30.0 million. The 2025 Convertible Notes accrued interest at a rate of 8 % per annum, payable quarterly in cash, and were scheduled to mature on January 1, 2026. The 2025 Warrants were not initially exercisable for any shares of common stock, but such warrants became exercisable for a specified dollar value of shares on a monthly basis commencing on June 1, 2025 if we had not completed an IPO by such date. The Series E Preferred Stock and Series F Preferred Stock both were issued at an original issue price of $ 8.10 per share for gross proceeds of approximately $ 137.7 million. Additionally, the gross proceeds of 7 Table of Contents $ 167.7 million, less issuance costs of $ 8.3 million, were allocated as follows: $ 27.9 million to the 2025 Convertible Notes, $ 10.3 million to the 2025 Warrants, $ 87.6 million to the Series E Preferred Stock, and $ 33.6 million to the Series F Preferred Stock. Upon the closing of the IPO, the 2025 Convertible Notes (plus accrued interest), Series E Preferred Stock and Series F Preferred Stock (plus an 8 % accrued dividend in connection with the preferred stock) converted into common stock at a price equal to 70 % of the initial public offering price per share. Although structured and referred to as a legal-form conversion, this feature effectively functions as a share-settled redemption provision for accounting purposes. Reverse Stock Split Effective June 1, 2025, the Company’s Board approved a one-for-four reverse stock split of the Company’s common stock. This also resulted in an adjustment to the conversion price for each series of the Company’s convertible preferred stock, to the underlying number of shares outstanding with respect to the restricted stock units, and to the exercise prices and number of shares of common stock underlying the outstanding stock options and warrants. Accordingly, all share and per share information relating to common stock for all periods presented in the accompanying consolidated financial statements and notes thereto have been retroactively adjusted. The shares of common stock retain a par value of $ 0.001 per share. Accordingly, an amount equal to the excess was reclassified from common stock to additional paid-in capital or, in the absence of additional paid-in-capital, accumulated deficit. Initial Public Offering On June 20, 2025, the Company completed its IPO of common stock, in which the Company issued and sold 23,529,412 shares of its common stock at an IPO price of $ 21.00 per share, which resulted in net proceeds of $ 459.5 million after deducting underwriting discounts and commissions of $ 39.8 million and before deducting offering costs of $ 9.0 million. Additionally, on June 25, 2025, the underwriters exercised in full their over-allotment option and purchased from the Company an additional 3,529,411 shares of common stock at the IPO price, which resulted in net proceeds to the Company of $ 68.9 million after deducting discounts and commissions. An amended and restated certificate of formation, which authorized 2,800,000,000 shares of common stock and 100,000,000 shares of preferred stock, became effective on June 20, 2025 in connection with the closing of the Company’s initial public offering (“IPO”). As of September 30, 2025, no shares of preferred stock are outstanding. In connection with the IPO, all outstanding shares of the Company’s then-outstanding redeemable convertible preferred stock, inclusive of accrued dividends, automatically converted into 211,378,638 shares of common stock. Refer to Note 6 for additional information. Additionally, all of the Company’s then-outstanding 2025 Convertible Notes converted into an aggregate of 2,076,596 shares of common stock upon the IPO. As the IPO was not completed by June 1, 2025, 784,231 shares of common stock were issued on June 20, 2025 at an exercise price of $ 0.04 per share in connection with the automatic net exercise of the warrants issued in connection with the 2025 Convertible Notes. Lastly, the 2018 and 2020 warrants were net exercised into 4,174,907 shares of common stock as outlined in the terms of the applicable warrant agreements. In connection with the IPO, the Company recognized $ 19.5 million of stock-based compensation expense due to vesting of previously-granted restricted stock units. The vesting of such restricted stock units was contingent upon the Company completing either an IPO of its common stock or through a change of control. The vested restricted stock units were settled in August 2025. Refer to Note 7 for additional information. Prior to the IPO, deferred offering costs, which consisted of accounting, legal and other fees directly related to the IPO, were capitalized as prepaid expenses and other current assets on the condensed consolidated balance sheets. In connection with the IPO, $ 9.0 million of deferred offering costs were reclassified to additional paid-in capital as a reduction of the net proceeds received from the IPO. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP in the United States requires the use of estimates and assumptions about future events that affect the amounts reported in the Company's condensed consolidated financial statements and related notes, including the amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the periods reported. 8 Table of Contents Significant estimates and assumptions are used for, but not limited to: • revenue recognition • fair value of stock-based awards and common stock • fair value of financial assets and liabilities Future events and their effects cannot be predicted with certainty. Accordingly, the accounting estimates require the exercise of judgment. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. The accounting estimates used in the preparation of the Company’s condensed consolidated financial statements may change as new events occur, additional information is obtained, and the operating environment changes. The Company will evaluate and update the assumptions and estimates on an ongoing basis and may employ outside experts to assist in its evaluation, as considered necessary. Actual results could materially differ from those estimates. Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid investments with original maturities of three months or less from date of acquisition to be cash equivalents. Refer to Note 4 for information on the Company's restricted cash. Revenue Recognition The Company recognizes revenue under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Revenue is recognized when control of goods and services are transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. ASC 606 provides for a five-step model that includes: Step 1: Identify the contract(s) with a customer. Step 2: Identify performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The Company derives revenue from two distinct channels: • Molecular profiling services involving the provision of precision oncology solutions utilizing MI Profile and Caris Assure • Pharma research and development services involving delivery of laboratory, strategic data, and research services to biopharmaceutical customers Molecular Profiling Services For the majority of its molecular profiling services, the Company recognizes revenue from the sale of its precision oncology solutions, provided to customers, including certain hospitals, institutions and patients, at the point in time when the results of the profiling services are delivered to ordering physicians. Most cases requested on behalf of customers are provided without a written agreement; however, the Company determines that an implied contract exists with its customers for whom a physician orders the case. Results from molecular profiling services are delivered via fax, electronically, or in hard copy. Shipping and handling activities are considered fulfillment activities and as such, amounts incurred are recorded within Cost of Services - Molecular profiling services on the condensed consolidated statements of operations and comprehensive loss. The Company identifies each sale of the Company's profiling service as a distinct performance obligation. Payment terms are a function of a patient’s existing insurance benefits and applicable reimbursement contracts established between the Company and payers. Collection of consideration the Company expects to receive typically occurs within 90 to 120 days of billing. Occasionally, payers may recoup or we may refund consideration, mainly as a result of claim processing. The total consideration to which the Company expects to be entitled in exchange for the Company’s services may be fixed or variable. Consideration includes reimbursement from patients, hospitals, and third-party commercial and governmental payers, such as insurance companies, adjusted for variable consideration related to implicit price concessions that the Company may grant. The Company estimates the variable consideration under a portfolio approach 9 Table of Contents for third-party payers, hospitals and patients with similar reimbursement characteristics. This includes analysis of an average reimbursement per case per portfolio and a percentage of cases reimbursed by considering the historical reimbursement data (including any refunds and recoupments) from such third-party payers, hospitals and patients. Specifically, the Company calculates the historical average reimbursement rates for each portfolio and applies an estimated reimbursement rate, based on historical trends, to the number of cases delivered each period. The period for which historical data is drawn upon is determined on a by- portfolio basis for each payer group, taking into consideration the average collection period. Additionally, the estimate also considers current contractual and statutory requirements, patient insurance eligibility and payer reimbursement contracts, and any known current or anticipated reimbursement trends not reflected in the historical data and only recognizes revenue for variable consideration that the Company determines is probable will not result in a significant reversal in the future. The Company monitors the estimated amount to be collected at each reporting period based on actual cash collections in order to assess whether a revision to the estimate is required. Subsequent changes to the estimate of the transaction price are recorded as adjustments to molecular profiling services revenue in the period where such changes occur. Both the estimate and any subsequent revision are uncertain and require the use of management’s judgment in the estimation of the variable consideration and application of the constraint for such variable consideration. Pharma Research and Development Services The Company collaborates with biopharmaceutical companies to provide commercial services and prospective and retrospective testing, along with data and bioinformatics collaborations and novel target identification and discovery solutions. Contracts with biopharmaceutical customers may include multiple distinct performance obligations, such as molecular profiling services, pharma research and development services, and strategic data services. The Company evaluates the terms and conditions included within its contracts with biopharmaceutical customers for proper revenue recognition, including whether services are capable of being distinct and considered distinct within the context of the contract. The performance obligations for biopharmaceutical customers vary by contract. Such contracts may include a performance obligation to provide molecular profiling services, to facilitate the development and regulatory approval of drugs, or to provide target discovery services. Under those contracts, the Company receives payments upon the achievement of milestones, as well as provision of on-going support. The transaction price of the development services contracts may include variable consideration, due to the uncertainty associated with the achievement of the milestones. In making the assessment of whether variable consideration should be included in the transaction price, the Company considers its historical experience with similar milestones, the degree of complexity and uncertainty associated with each milestone, and whether achievement of the milestone is dependent on parties other than the Company. The Company recognizes pharma research and development services revenue over the period in which biopharmaceutical research and development services are provided. Depending on the nature of the service, the Company recognizes revenue using either the output or input method to measure progress, whichever provides a more faithful depiction of the transfer of goods or services. Use of an output method or input method to depict the transfer of services generally does not result in a material difference with respect to the timing of revenue recognition because most services commence and end within the same reporting period. A constraint for variable consideration is applied such that it is probable a significant reversal of revenue will not occur when the uncertainty associated with the contingency is resolved. Application of the constraint for variable consideration is updated at each reporting period as a revision to the estimated transaction price. Standalone Selling Price The Company determines standalone selling prices by considering the historical selling prices of its performance obligations in similar transactions, where applicable, as well as other factors, including, but not limited to, the price that customers in the market would be willing to pay, competitive pricing from other vendors, industry publications, current pricing practices and management estimates. Contract Balances The timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. A receivable is recognized in the period the Company delivers goods or provides services, or when the right to consideration is unconditional. In situations where revenue recognition occurs before invoicing, an unbilled receivable is created, which represents a contract asset. As of September 30, 2025 and December 31, 2024, the unbilled receivable balance was $ 9.9 million and $ 4.6 million, respectively, which is included in accounts receivable on the condensed consolidated balance sheets. 10 Table of Contents The Company recognizes contract liabilities primarily related to payments received in advance of satisfaction of performance obligations from contracts with customers. Contract liabilities are relieved as the Company fulfills its obligations under the contract and revenue is recognized. As of September 30, 2025 and December 31, 2024, the contract liability balance was $ 2.8 million and $ 7.5 million, respectively, which is included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. The following table shows the changes in the contract liabilities during the period: (amounts in thousands) Balance at December 31, 2024 $ 7,470 Increase in contract liabilities 7,903 Revenue recognized during the period that was included in deferred revenues at the beginning of the period ( 7,093 ) Revenue recognized from performance obligations satisfied within the same period ( 5,489 ) Balance at September 30, 2025 $ 2,791 The amount of revenue recognized during the nine months ended September 30, 2024 pertaining to amounts deferred as of December 31, 2023 was $ 5.2 million. Transaction Price Allocated to Remaining Performance Obligations The transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes contract liabilities and non-cancelable amounts that will be invoiced and recognized as revenue in future periods and excludes performance obligations that are subject to cancellation terms. The Company has elected not to disclose information regarding the transaction price allocated to the remaining performance obligations for which the original expected duration of the contract is one year or less. The amount of transaction price allocated to the remaining performance obligations for contracts with original expected duration over one year as of September 30, 2025 was $ 9.1 million. The Company expects to recognize the amount within twelve months from the respective balance sheet dates. Additionally, f or the three months ended September 30, 2025 and 2024, the Company recorded $ 38.3 million and $ 6.8 million, respectively, of adjustments to revenue related to services delivered in prior periods, which is based on variability that was subsequently resolved. For the nine months ended September 30, 2025 and 2024, the Company recorded $ 23.4 million and $ 2.9 million, respectively, of adjustments to revenue related to services delivered in prior periods, which is based on variability that was subsequently resolved. Practical Expedients and Contract Costs Payment terms and conditions vary by contract and customer. In instances where the timing of the Company’s revenue recognition differs from the timing of its invoicing, the Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised services to the customer will be one year or less. As a practical expedient, the Company recognizes the incremental costs of obtaining contracts, such as sales commissions, as expenses when incurred, if the amortization period of the asset that the Company otherwise would have recognized for the capitalized costs is one year or less. Sales commissions are recorded within selling and marketing expense on the condensed consolidated statements of operations and comprehensive loss. The Company did not capitalize any sales commissions or contract fulfillment costs as of September 30, 2025 and December 31, 2024 . Collaboration Agreements The Company is party to various collaboration and licensing agreements under which the Company out-licenses certain know-how and molecular data. The collaboration arrangements are intended to solidify the Company’s third-party partnerships to align oncology capabilities and create industry-leading molecular oncology research platforms to accelerate drug development and novel research. Under these collaboration arrangements, the Company generally receives a split of fees from its collaborative partners that are earned pursuant to statements of work (“SOWs”) executed with end users of the Company’s licensed molecular data. 11 Table of Contents The Company’s collaboration and licensing agreements are within the scope of ASC Topic 808, Collaborative Arrangements (“ASC 808”) and ASC 606 because the counterparty to these agreements meets the definition of a customer. As such, the Company recognizes revenue earned from the licenses of molecular data granted to the Company’s collaborative partners in accordance with ASC 606. Each license of molecular data granted by the Company to a collaborative partner represents a distinct performance obligation in the contract. The transaction price for a given arrangement is entirely variable and depends on the SOWs executed by the counterparty with end users. The amount of revenue allocated to each license is equal to the amount of revenue to which the Company expects to be entitled. The Company recognizes revenue at the point in time that it delivers the molecular data to the third-party collaborative partner. For the three months ended September 30, 2025 and 2024, the Company recognized collaboration revenue of $ — million and $ 2.5 million , respectively, and $ 6.9 million and $ 9.1 million for the nine months ended September 30, 2025 and 2024, respectively, which is included in revenue from pharma research and development services on the condensed consolidated statements of operations and comprehensive loss. Cost of Services - Molecular profiling services Cost of services for molecular profiling services generally consists of cost of materials, direct labor including bonus and stock-based compensation, and equipment maintenance and depreciation expenses associated with processing cases (including accessioning, sequencing, quality control analyses and shipping charges to transport tissue samples), freight and profile results for ordering physicians. Costs associated with completing the molecular profiling services are recorded as the service is performed, regardless of when revenue is recognized with respect to the service. Cost of Services - Pharma research and development services Cost of services for pharma research and development services generally consists of cost incurred for the performance of the services requested by the Company's biopharmaceutical customers related to the delivery of laboratory, strategic data and research services, and will vary depending on the nature, timing, and scope of customer projects. Costs associated with delivering pharma research and development services are recorded as incurred. Concentration of Credit Risk Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash, cash equivalents, marketable securities, and accounts receivable. The Company maintains its cash primarily with domestic financial institutions of high credit quality, with balances that exceed amounts insured by the Federal Deposit Insurance Corporation as of September 30, 2025 and December 31, 2024, respectively. The Company invests in treasury bills issued by the U.S. Government. U.S. treasury bills with original maturities of three months or less are classified within cash equivalents. Short-term marketable securities are comprised of U.S. treasury bills with original maturities between three and twelve months. The Company believes it is not exposed to any significant credit risk on cash, cash equivalents, and marketable securities and performs periodic evaluations of the credit standing of such institutions. The goal of the Company’s investment policy is to ensure safety and preservation of the principal balance, and diversification of risk over cash balances held on deposit. The Company is subject to credit risk from its accounts receivable. The Company’s accounts receivable arise from the provision of molecular profiling services and pharma research and development services, primarily with biopharmaceutical companies, all of which have high credit ratings. The Company has not experienced any material losses related to receivables from individual customers, or groups of customers. The Company does not require collateral. Accounts receivable are recorded net of allowance for credit losses, if any. Concentrations of credit risk are limited due to the number of payers and their dispersion across multiple geographic regions. For the three and nine months ended September 30, 2025 and 2024, the Company's revenues were primarily derived from the sale of Caris molecular profiling services. As discussed above, payment terms of the services are a function of a patient’s existing insurance benefits and applicable reimbursement contracts established between the Company and payers. Revenue associated with each payer, including its affiliated entities, as a percentage of the Company’s total revenue for the respective period, and accounts receivable balance attributable to each payer, including its affiliated entities, as a percentage of the Company’s total accounts receivable balance at the respective condensed consolidated balance sheet date, are as follows: 12 Table of Contents % Revenue for the three months ended September 30, % Revenue for the nine months ended September 30, % Accounts receivable as of Major Payer 2025 2024 2025 2024 September 30, 2025 December 31, 2024 Payer 1 37.7 % 35.6 % 43.3 % 35.8 % 50.8 % 16.1 % Payer 2 21.2 % 17.3 % 17.2 % 14.9 % * 19.3 % Payer 3 12.9 % * 10.9 % * * * * Represents major payers below 10.0%. Accounts Receivable Accounts receivable includes billed and unbilled receivables, net of an allowance for expected credit losses. Accounts receivable primarily represent receivables from biopharmaceutical customers and third-party payers. Accounts receivable for pharmaceutical services are established based on the amounts outstanding per the contractual arrangements with biopharmaceutical customers. The Company applies the current expected credit loss standard in ASC Subtopic 326-20, Financial Instruments—Credit Losses (“ASC 326-20”) and reserves a portion of the accounts receivable based on assessment of the collectability of customer accounts at the time of revenue recognition. The Company regularly reviews the reserve by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. Receivables deemed to be uncollectible are written-off against the allowance for credit losses at the time such receivables are deemed to be uncollectible under a specific identification or estimated method. Recoveries of accounts receivable previously written off are recorded when received. As of September 30, 2025 and December 31, 2024, the Company had an immaterial allowance for credit losses related to its accounts receivable. Supplies Supplies consist primarily of laboratory items and reagents used by the Company in providing services. All supplies are raw materials and are stated at the lower of cost or net realizable value on a first-in, first-out basis. The Company periodically reviews its supplies for excess or obsolescence and writes down obsolete or otherwise unmarketable supplies to their estimated net realizable value. As of September 30, 2025 and December 31, 2024, the amount of write downs associated with the Company’s supplies was immaterial. Deferred Offering Costs Deferred offering costs consist primarily of accounting, legal, and other fees related to the Company’s proposed IPO. The Company had $ 4.5 million of deferred offering costs as of December 31, 2024. Prior to the IPO, deferred offering costs were capitalized on the consolidated balance sheet. Upon the consummation of the IPO, $ 9.0 million of deferred offering costs were reclassified into additional paid-in capital as an offset against IPO proceeds. Property and Equipment, Net The Company reports property and equipment at cost, net of accumulated depreciation, amortization, and any asset impairments. The cost of properties held under finance leases is equal to the present value of lease payments not yet paid, adjusted for initial direct costs, prepaid lease payments and lease incentives received. Major improvements which add to productive capacity or extend the life of an asset are capitalized. Normal repairs and maintenance are expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from the accounts, and any resulting gain or loss is reflected in the accompanying condensed consolidated statements of operations and comprehensive loss for the period. 13 Table of Contents Depreciation and amortization expenses are calculated on a straight-line basis and applied to asset classes based upon the Company’s estimate of the asset class’s useful life, as summarized below: Estimated Useful Life Laboratory equipment 3 years Computer equipment and software 3 years Furniture and fixtures 5 years Aircraft 15 years Leasehold improvements/leased buildings Lesser of remaining lease term or useful life Leased equipment Lesser of initial lease term or 5 years Computer equipment and software includes the purchases of hardware, software and capitalized labor costs associated with internally developed software. The Company capitalizes purchased software which is ready-for-service and capitalizes qualifying internal software development costs incurred on significant projects. Capitalization of costs begins when two criteria are met: (1) the preliminary project stage is completed, management with relevant authority authorizes and commits to funding the software project, and (2) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred. Research and development costs and other computer software maintenance costs related to software development are expensed as incurred. Capitalized software costs are included in property and equipment, net. These costs are amortized using the straight-line method over the estimated useful life of the underlying software, which is three years . Fair Value Measurements Fair value is defined as the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions market participants would use in pricing an asset or liability. The basis for these assumptions establishes a three-level fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: • Level 1 - Observable inputs such as quoted prices in active markets for identical assets and liabilities; • Level 2 - Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3 - Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of three valuation techniques. The three valuation techniques are as follows: • Market approach – Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities; • Cost approach – Amount that would be required to replace the service capacity of an asset (i.e., replacement cost); and • Income approach – Techniques to convert future amounts to a single present amount based on market expectations (including present value techniques, option-pricing models, and lattice models). Financial instruments consist of cash, cash equivalents, restricted cash, short-term marketable securities, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities, debt, warrants, and derivative instruments. As of September 30, 2025 and December 31, 2024, the carrying amounts of the Company’s cash equivalents, restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and 14 Table of Contents other current liabilities approximate their fair value based on the short-term nature of these items. There were no transfers between Levels 1, 2 or 3 for the periods ended September 30, 2025 and December 31, 2024. The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements were as follows: As of September 30, 2025 Fair Value Level 1 Level 2 Level 3 Financial assets (amounts in thousands) Short-term marketable securities $ 2,272 $ 2,272 $ — $ — As of December 31, 2024 Fair Value Level 1 Level 2 Level 3 Financial assets (amounts in thousands) Short-term marketable securities $ 2,201 $ 2,201 $ — $ — Financial liabilities Warrant liability $ 91,642 $ — $ — $ 91,642 Derivative liability $ 6,058 $ — $ — $ 6,058 2018 and 2020 Warrant Liability The Company utilized a probability-weighted scenario approach factoring in various exit strategies and the related timing of such to estimate the fair value of its warrant liability. For each scenario, the Company utilized a Black-Scholes option pricing model with the following assumptions: • Fair value per share of the underlying stock —The fair value of the underlying stock represents the fair value of the Company's Series C preferred stock that the warrants are convertible into. • Volatility —The volatility is derived from historical volatilities of several unrelated publicly-listed peer companies, since the Company has no trading history. When making the selections of industry peer companies to be used in the volatility calculation, the Company considers the size, operational and economic similarities to the Company’s principal business operations. • Risk-free interest rate —The risk-free interest rate is based on U.S. treasury yield as of the measurement dates interpolated to match the maturity equal to the respective term to exit. • Dividend yield —The expected dividend assumption is based on the Company’s current expectations about the Company’s anticipated dividend policy. • Expected term (years) —Based on expected term under various exit strategies. The below table summarizes the significant unobservable inputs used in the fair value measurement of the 2018 and 2020 warrant liabilities as of December 31, 2024. The warrants were reclassified from liability to equity upon the IPO as they were exercised into Series C preferred stock, which was converted to common stock. The difference between the fair value of the warrants immediately prior to the reclassification and its prior fair value was recorded in the condensed consolidated statement of operations and comprehensive loss as changes in fair value of financial instruments. The fair 15 Table of Contents value immediately prior to the reclassification is based on the total number of common stock issued upon exercise and conversion, multiplied by the public offering price of $ 21.00 per share. As of December 31, 2024 2018 Warrants 2020 Warrants Fair value per share of the underlying stock $ 3.66 - $ 5.65 $ 3.66 - $ 5.65 Expected volatility 47.6 % - 63.0 % 61.2 % - 63.0 % Risk-free interest rate 4.2 % - 4.3 % 4.3 % Expected dividend yield — % — % Expected term (years) 0.29 - 0.75 0.29 - 2.25 2025 Warrant Liability - Pre-IPO Financing The Company utilized a probability-weighted scenario approach factoring in various exit scenarios and the related timing of such to estimate the fair value of its warrants that were issued in conjunction with the 2025 Convertible Notes. Upon issuance as of April 1, 2025, the fair value of these warrants was $ 10.3 million. Immediately prior to the IPO, the fair value of these warrants was $ 16.5 million. Derivative Liability - 2023 Term Loan On January 18, 2023, the Company entered into a credit agreement (the “New Term Loan Agreement”) under which the Company issued senior, secured promissory notes (the “2023 Term Loan”) by which the New Term Loan lenders agreed to lend the Company up to an aggregate principal amount of $ 400.0 million, $ 200.0 million of which was received by the Company upon issuance, and $ 200.0 million of which was drawn down in March 2024. The Company identified certain embedded features in the 2023 Term Loan, including various contingent prepayment, compensatory payment, and default interest rate features, that are required to be bifurcated from the 2023 Term Loan and separately accounted for in the condensed consolidated financial statements as a compound derivative liability. Fair value of the derivative liability as of December 31, 2024 was estimated using the discounted cash flow method under the income approach. This approach involves significant Level 3 inputs and assumptions including an estimated probability and timing of certain contingent events, such as events of default, change of control, sale of assets, etc. The analysis also required the selection of a discount rate representative of the Company's credit risk. The discount rate used for the initial fair value was calibrated to the transaction. The value of the derivative liability in connection with the 2023 Term Loan reduced to zero upon the IPO, as the contingent prepayment is no longer required. Refer to Note 8 for additional information about the compound embedded derivative liability. Derivative Liability - Pre-IPO Financing In estimating the fair value of the bifurcated derivatives related to the Series E Preferred Stock, Series F Preferred Stock and the 2025 Convertible Notes, the Company applied the with-and-without methodology as of April 1, 2025. This approach calculates the value of the bifurcated embedded derivative as the difference between the value of each instrument including the derivative and the value of each instrument excluding the derivative. Upon issuance on April 1, 2025, the fair values of the bifurcated embedded derivatives relating to the Series E Preferred Stock, Series F Preferred Stock, and 2025 Convertible Notes were $ 30.1 million, $ 11.9 million, and $ 21.2 million, respectively. Immediately prior to the IPO, the fair values of these bifurcated derivatives were $ 43.6 million, $ 16.5 million, and $ 13.1 million, respectively, determined as the excess of each instrument’s fair value immediately prior to the IPO over the sum of its original proceeds and any accrued interest or dividends. Upon the IPO, the derivative liabilities were derecognized in conjunction with the conversion of the 2025 Convertible Notes, Series E Preferred Stock, and Series F Preferred Stock, and the issuance of the associated shares was recorded in common stock and additional paid-in capital. Debt - 2023 Term Loan As of September 30, 2025, the estimated fair value of the 2023 Term Loan, was $ 380.7 million, compared to a carrying value of $ 375.9 million. As of December 31, 2024, the estimated fair value of the 2023 Term Loan, excluding the bifurcated embedded derivative, was $ 380.9 million, compared to a carrying value of $ 373.1 million. The Company 16 Table of Contents estimated the fair value of the 2023 Term Loan as of September 30, 2025 based on a discounted cash flow analysis, and an income approach, which represented the use of Level 3 inputs in the fair value hierarchy. 2025 Convertible Notes, Series E Preferred Stock, and Series F Preferred Stock - Pre-IPO Financing The Company calculated the fair value of the 2025 Convertible Notes, as well as the Series E Preferred Stock, Series F Preferred Stock, and warrants as of April 1, 2025 using a calibrated approach that aligned the total fair value of the instruments with the cash proceeds received. Upon issuance as of April 1, 2025, the fair value of the 2025 Convertible Notes, the Series E Preferred Stock and the Series F Preferred Stock were $ 29.4 million, $ 92.5 million, and $ 35.5 million respectively. Immediately prior to the IPO, the fair value of the 2025 Convertible Notes was $ 43.6 million, based on the total number of common stock issued upon conversion, multiplied by the initial public offering price of $ 21.00 per share. Goodwill Goodwill represents the excess of the purchase price over the fair value of net identifiable assets and liabilities acquired through a business combination. The Company evaluates goodwill for impairment in accordance with ASC Topic 350, Intangibles – Goodwill and Other on an annual basis on October 1, or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or the Company may determine to proceed directly to the quantitative impairment test. If the Company assesses qualitative factors and concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount or if the Company determines not to use the qualitative assessment, then a quantitative impairment test is performed. The factors utilized in the qualitative assessment include macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and Company-specific events. The quantitative impairment test requires comparing the fair value of the reporting unit to its carrying value, including goodwill. The fair value of the reporting unit is determined based on the present value of estimated cash flows using available information regarding expected cash flows of each reporting unit, discount rates, and the expected long-term cash flow growth rates. The Company has identified that its business operates as a single operating segment which is also a single reporting unit for purposes of testing goodwill for impairment. An impairment exists if the fair value of the reporting unit is lower than its carrying value. If the fair value of the reporting unit is lower than its carrying value, the Company would record an impairment loss equal to the excess of the reporting unit's carrying value over its fair value. There were no impairment losses for the three and nine months ended September 30, 2025 and 2024. Research and Development Costs Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred in performing research and development activities. The costs include direct costs for salaries and benefits, materials, contract services and other outside costs, and costs to acquire in-process research and development projects and technologies that have no alternative future use. Advertising The Company expenses advertising costs as incurred. The Company incurred advertising costs of $ 0.3 million and $ 0.4 million for the three months ended September 30, 2025 and 2024, respectively, and $ 0.5 million and $ 0.9 million for the nine months ended September 30, 2025 and 2024, respectively. Self-Insurance The Company offers medical insurance coverage to eligible employees under a self-insured program managed by a third-party administrator, leveraging stop-loss insurance policies to mitigate risk. The Company records an estimate of its liability for medical claims, which includes the incurred claims amount plus an estimate of incurred, but not reported claims. Self-insurance liability of $ 2.2 million and $ 1.9 million as of September 30, 2025 and December 31, 2024, respectively, is included within accrued expenses and other current liabilities on the condensed consolidated balance sheets. 17 Table of Contents Net Income (Loss) per Share Attributable to Common Shareholders The Company calculates its basic and diluted net income (loss) per share attributable to common shareholders in conformity with the two-class method required for companies with participating securities. Each series of the Company’s redeemable convertible preferred stock is considered to be a participating security because the preferred shareholders have a right to receive dividends on a pari passu basis with the Company’s common shareholders. The two-class method determines net income (loss) per share for each class of common stock and participating security according to dividends declared or accumulated and participating rights in undistributed earnings. The two-class method requires income (loss) available to common shareholders for the period to be allocated between common and participating securities based upon the respective rights of each to share in earnings as if all income (loss) for the period had been distributed. The participating securities are not required to participate in the losses of the Company, and therefore during periods of loss there is no allocation required under the two-class method between common and participating securities. Income Taxes The Company accounts for income taxes under the asset and liability method as set forth in ASC 740 “ Income Taxes ” (“ASC 740”). Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across its global operations. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related taxing authority. For tax positions not meeting the more-likely-than-not test, no tax benefit is recorded. At September 30, 2025 and December 31, 2024, the Company has accumulated net operating loss carryforwards in both the U.S. and foreign jurisdictions, and no provision for income taxes is required. The Company's deferred tax assets are subject to a full valuation allowance. Recently Issued Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures which requires presentation of specific categories of reconciling items, as well as reconciling items that meet a quantitative threshold, in the reconciliation between the income tax provision and the income tax provision using statutory tax rates. The standard also requires disclosure of income taxes paid disaggregated by jurisdiction with separate disclosure of income taxes paid to individual jurisdictions that meet a quantitative threshold. For public business entities, the ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. For entities other than public business entities, the ASU is effective for annual periods beginning after December 15, 2025. The amendments of the ASU should be applied on a prospective basis; however, entities have the option to apply retrospectively for each period presented. The Company does not expect the adoption of this new standard in 2025 to have an impact on its condensed consolidated financial position, results of operations, or cash flow. In November 2024, the FASB issued ASU No. 2024-03, Income Statement- Reporting Comprehensive Income-Expense disaggregation disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses . This ASU requires disclosure of specified information about certain costs and expenses in the notes to financial statements. This ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU should be applied on a prospective basis. Early adoption is permitted. We are currently evaluating the impact that this guidance will have on the disclosures within our financial statements, and expect to adopt this ASU for the fiscal year beginning January 1, 2027. In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software . This ASU removes all references to prescriptive and sequential software development stages throughout Subtopic 350-40. This will require an entity to change how it starts capitalizing software costs, along with updating how entities evaluate the probable-to-complete recognition threshold. For all entities, the ASU is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments of this ASU can be applied using any of the following three approaches: prospective transition approach; modified transition approach that is based 18 Table of Contents on the status of the project and whether software costs were capitalized before the date of adoption; and retrospective transition approach. We are currently evaluating the impact that this guidance will have, and expect to adopt this ASU for the year ending December 31, 2028. Note 3. Condensed Consolidated Balance Sheet and Statement of Operations and Comprehensive Loss Components Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: As of September 30, 2025 As of December 31, 2024 (amounts in thousands) Prepaid expenses $ 18,657 $ 13,562 Other current assets 2,577 6,708 Total prepaid expenses and other current assets $ 21,234 $ 20,270 Property and Equipment, Net Property and equipment, net consist of the following: As of September 30, 2025 As of December 31, 2024 (amounts in thousands) Computer equipment and software $ 75,814 $ 73,312 Capitalized software 27,097 25,921 Laboratory equipment 108,476 103,795 Furniture and fixtures 8,305 9,110 Leasehold improvements/Leased buildings 63,502 63,039 Aircraft and leased equipment 21,255 21,249 Total property and equipment 304,449 296,426 Less: accumulated depreciation and amortization ( 240,452 ) ( 228,609 ) Property and equipment, net $ 63,997 $ 67,817 Total depreciation and amortization expense was $ 4.9 million and $ 10.5 million for the three months ended September 30, 2025 and 2024, respectively, and $ 18.3 million and $ 39.8 million for the nine months ended September 30, 2025 and 2024, respectively. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: As of September 30, 2025 As of December 31, 2024 (amounts in thousands) Trade accruals $ 5,635 $ 7,131 Accrued payroll and employee medical 14,270 17,882 Accrued bonus 20,905 25,736 Current portion of early exercise stock option liability 327 4,957 Contract liability 2,791 7,470 Current portion of operating lease liabilities 6,450 6,080 Other accrued expenses 6,489 8,286 Total accrued expenses and other current liabilities $ 56,867 $ 77,542 19 Table of Contents Other Long-Term Liabilities Other long-term liabilities consist of the following: As of September 30, 2025 As of December 31, 2024 (amounts in thousands) Long-term operating lease liabilities, net of current portion $ 43,828 $ 38,651 Long-term portion of early exercise stock option liability 53 5,767 Total other long-term liabilities $ 43,881 $ 44,418 Other Income (Expense), Net Other income (expense), net, consists of the following: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (amounts in thousands) Loss on debt extinguishment $ — $ — $ ( 17,930 ) $ — Other ( 89 ) 37 ( 517 ) ( 323 ) Total other income (expense), net $ ( 89 ) $ 37 $ ( 18,447 ) $ ( 323 ) Note 4. Restricted Cash The Company entered into a lease agreement with KCP NNN II Leasehold 4, LLC on July 25, 2019 to lease 114,500 square feet of space in Irving, Texas. As part of the lease agreement, the Company delivered an unconditional, irrevocable letter of credit for $ 3.4 million from a nationally recognized bank. The Company obtained this letter of credit and placed $ 3.4 million in a security deposit account. As of September 30, 2025 and December 31, 2024 , amounts outstanding are $ 2.1 million and $ 2.7 million , respectively, and are included within c ash, cash equivalents, and restricted cash and other assets on the condensed consolidated balance sheets. The remaining restricted cash amounts are not material individually. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheet that sum to the total of the amounts shown in the condensed consolidated statements of cash flows. Restricted cash is presented within c ash, cash equivalents, and restricted cash and other assets on the condensed consolidated balance sheets. Condensed consolidated balance sheet line item As of September 30, 2025 As of December 31, 2024 (amounts in thousands) Cash and cash equivalents Cash, cash equivalents, and restricted cash $ 753,221 $ 63,950 Restricted cash - short-term Cash, cash equivalents, and restricted cash 1,518 1,492 Restricted cash - long-term Other assets 2,243 2,586 Total $ 756,982 $ 68,028 Note 5. Income Taxes The Company is subject to tax liabilities imposed by multiple jurisdictions. The Company determines our best estimate of the annual effective tax rate at each interim period using expected annual pre-tax earnings, statutory tax rates, and available tax planning opportunities. Certain significant or unusual items are separately recognized in the quarter in which they occur, which can cause variability in the effective tax rate from quarter to quarter. The Company recognizes interest and penalties related to uncertain tax positions, if any, as an income tax expense. The effective tax rate on income for the nine months ended September 30, 2025 and 2024 is shown in the table below. For the nine 20 Table of Contents months ended September 30, 2025 and 2024, the tax rates differed from the U.S. federal statutory rate of 21.0% primarily due to the impact of net operating losses and valuation allowances. Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (amounts in thousands) Income (loss) before provision for income taxes $ 24,325 $ ( 67,729 ) $ ( 150,045 ) $ ( 244,943 ) Provision for income taxes — — — — Effective tax rate — % — % — % — % The Company is subject to taxation in the United States and various states and foreign jurisdictions. As of September 30, 2025, all loss years remain open to examination by the taxing authorities. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting bases and tax bases of assets and liabilities based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based upon consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income, the length of the tax asset carryforward periods and tax planning strategies. The effects of remeasurement of deferred tax assets and liabilities resulting from changes in tax rates are recognized in income in the period of enactment. On July 4, 2025, H.R. 1, known as the One Big Beautiful Bill Act (the “OBBBA”), was signed into law. The OBBBA includes a broad range of tax reform provisions, including extending and modifying certain key provisions from the 2017 Tax Cuts & Jobs Act (both domestic and international). The Company is currently evaluating the potential impacts of the OBBBA on its consolidated financial statements. Note 6. Redeemable Convertible Preferred Stock As of September 30, 2025, there were no shares of redeemable convertible preferred stock outstanding. On April 1, 2025, the Company entered into a preferred stock purchase agreement with certain investors pursuant to which it issued a total of 12,345,674 and 4,657,401 shares of Series E Preferred Stock and Series F Preferred Stock, respectively, at $ 8.10 per share for gross proceeds of approximately $ 137.7 million. Allocated issuance costs paid in connection with the Series E Preferred Stock and Series F Preferred Stock were approximately $ 6.8 million. The Company has previously issued shares of Series A, Series B, Series C, and Series D convertible preferred stocks. Upon the closing of the IPO on June 20, 2025, all outstanding shares of the Company’s redeemable convertible preferred stock, including Series E and F, converted into an aggregate of 211,378,638 shares of common stock. The following table summarizes the redeemable convertible preferred stock outstanding immediately prior to their conversion into common stock (excluding the 2018 and 2020 warrants that, prior to our IPO, were exercisable for Series C convertible preferred stock), and the rights and preferences of the Company’s respective series preceding the Company’s IPO in June 2025: 21 Table of Contents As of June 20, 2025 (amounts in thousands, except share and per share amounts) Shares Authorized Shares Issued and Outstanding Original Issue Price Per Share Aggregate Liquidation Preference Net Carrying Value Series A Preferred Stock 490,000,000 485,795,293 $ 0.61 $ 296,335 $ 709,261 Series B Preferred Stock 30,000,000 29,629,630 $ 0.54 16,000 42,963 Series C Preferred Stock 142,000,000 116,200,835 $ 2.76 415,616 415,616 Series D Preferred Stock 102,600,000 102,516,283 $ 8.10 1,078,273 1,078,273 Series E Preferred Stock 12,345,678 12,345,674 $ 8.10 101,786 145,412 Series F Preferred Stock 10,493,827 4,657,401 $ 8.10 38,399 54,857 Total redeemable convertible preferred stock 787,439,505 751,145,116 $ 1,946,409 $ 2,446,382 As of December 31, 2024, redeemable convertible preferred stock consisted of the following: As of December 31, 2024 (amounts in thousands, except share and per share amounts) Shares Authorized Shares Issued and Outstanding Original Issue Price Per Share Aggregate Liquidation Preference Net Carrying Value Series A Preferred Stock 490,000,000 485,795,293 $ 0.61 $ 296,335 $ 709,261 Series B Preferred Stock 30,000,000 29,629,630 $ 0.54 16,000 42,963 Series C Preferred Stock 142,000,000 116,200,835 $ 2.76 408,715 408,715 Series D Preferred Stock 102,600,000 102,516,283 $ 8.10 1,060,712 1,060,712 Total redeemable convertible preferred stock 764,600,000 734,142,041 $ 1,781,762 $ 2,221,651 The redeemable convertible preferred stock is classified as mezzanine equity pursuant to the guidance in ASC 480. The rights, preferences, and privileges of the redeemable convertible preferred stock were as follows: Voting Rights On any matter presented to the shareholders of the Company for their action or consideration at any meeting of shareholders of the Company (or by written consent of shareholders in lieu of meeting), each holder of outstanding shares of preferred stock will be entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of preferred stock held by such holder are convertible as of the record date for determining shareholders entitled to vote on such matter. Dividends All classes of preferred stock are entitled to receive dividends out of any assets legally available only when, as, and if declared by the Company’s board of directors, prior to and in preference to any declaration or payment of any dividend on the common stock. Liquidation Preference In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of Series C, Series D and Series E preferred stock then outstanding will be entitled to be paid out of the assets of the Company available for distribution to its shareholders at an amount per share equal to the greater of (i) the Series C, Series D and Series E original issue price, plus (A) any dividends declared but unpaid thereon and (B) a 7.0 % cumulative accruing dividend, compounding annually from the date of issuance of such share of Series C, Series D and Series E preferred stock, (ii) the amount that the holder of a share of Series C, Series D and Series E preferred stock would have received upon conversion to common stock, or (iii) solely with respect to the Series D preferred stock, 1.2 times the Series D original issue price. 22 Table of Contents The Series F Preferred Stock then outstanding will then be entitled to be paid out of the assets of the Company available for distribution to its shareholders at an amount per share equal to the greater of (i) the Series F Preferred Stock original issue price, plus (A) any dividends declared but unpaid thereon and (B) a 8.0 % cumulative accruing dividend, compounding annually from the date of issuance of such share of Series F Preferred Stock, (ii) 1.5 times the Series F Preferred Stock original issue price, or (iii) the amount that the holder of a share of Series F Preferred Stock would have received upon conversion to common stock. The Series A and Series B preferred stock are then paid on a pro rata, pari passu basis an amount equal to the greater of (i) the respective original issue price plus any dividends declared but unpaid thereon, and (ii) the amount that the holder of a share of Series A or Series B preferred stock, respectively, would receive upon conversion to common stock. The remaining proceeds will be distributed to the holders of common stock. Conversion Rights The holders of the Company’s Series A, Series B, Series C, Series D, Series E and Series F preferred stock have the right to convert their shares into a number of fully paid and nonassessable shares of common stock as determined by dividing the respective Series A, Series B, Series C, Series D, Series E and Series F preferred stock original issue price by the conversion price in effect at the time. The initial conversion price of the Series A, Series B, Series C, Series D, Series E and Series F preferred stock was $ 0.61 , $ 0.54 , $ 2.76 , $ 8.10 , $ 8.10 , and $ 8.10 , respectively, and is subject to adjustment in accordance with anti-dilution provisions provided for in the Company’s Certificate of Formation. In connection with and shortly before the closing of the Pre-IPO Financing, the Company amended and restated its Certificate of Formation. Under this amended and restated Certificate of Formation, and solely for purposes of calculating the conversion of the Series C preferred stock in connection with an initial public offering, both the original issue price and the initial conversion price of the Series C preferred stock were revised from $ 2.76 to $ 4.58 . Upon the closing of the IPO, the Series E and Series F Preferred Stock will convert into common stock at a price equal to 70 % of the initial public offering price per share. This legal-form conversion upon an initial public offering effectively functions as a share-settled redemption provision for accounting purposes and is accounted for as a bifurcated derivative liability in accordance with ASC 815. As a result of the IPO, the aforementioned conversion price adjustment for Series D preferred stock was triggered due to the IPO price being less than 1.11111 times the then-current conversion price. Consequently, the Company recorded a deemed dividend, which increased net loss attributable to common shareholders by $ 384.4 million. The deemed dividend equals the fair value of incremental shares of common stock resulting the triggering of this feature. Redemption Rights At any time on or after March 2026 with respect to our Series C preferred stock, and May 2026 in respect of our Series D and Series E preferred stock, upon written notice from the applicable shareholders, the Series C, Series D and Series E shares shall be redeemed by the Company at a price per share equal to the greater of (i) the original issue price plus (a) all declared by unpaid dividends thereon and (b) a 7.0 % cumulative accruing dividend, compounding annually, or (ii) the fair market value as determined by an independent appraiser. Anti-dilution Subject to certain exceptions, the conversion price of the Series A, Series B, Series D, Series E and Series F preferred stock is subject to broad-based weighted average adjustment to prevent dilution in the event that the Company issues additional shares at a purchase price less than the then-applicable conversion price. Subject to certain exceptions, in the event the Company sells additional shares of stock at a price per share less than the Series C original issue price, the conversion price of the Series C preferred stock is adjusted to the lower price that the Company sells shares in such offering. In the event the Company sells shares in an initial public offering for less than 1.11111 times the applicable Series C conversion price, then the Series C conversion price will be reduced (but never increased), concurrently with such issuance to 90.0 % of the purchase price in such initial public offering. In the event the Company sells shares in an initial public offering for less than 110.0 % of the applicable Series D conversion price, then the Series D conversion price will be reduced (but never increased), concurrently with such issuance to 90.0 % of the purchase price in such initial public offering. 23 Table of Contents Note 7. Shareholders’ Equity and Equity Compensation Preferred Stock In connection with the IPO, the Company's amended and restated certificate of formation became effective, which authorized the issuance of 100,000,000 shares of preferred stock with a par value of $ 0.001 per share. As of September 30, 2025, there were no shares of preferred stock issued and outstanding. Common Stock As of September 30, 2025 and December 31, 2024, 2,800,000,000 and 1,150,000,000 shares of common stock with a $ 0.001 par value were authorized, respectively. There were 282,103,259 and 35,842,319 shares outstanding at September 30, 2025 and December 31, 2024, respectively. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company's shareholders. Common shareholders are entitled to receive dividends if and when declared by the Company's board of directors, subject to the preferential dividend rights of any preferred stock then outstanding and compliance with our contractual obligations. No dividends have been declared or paid by the Company since its inception. Treasury Stock During the nine months ended September 30, 2025, the Company repurchased 1,438,138 shares of common stock for an amount of $ 16.6 million, mainly associated with previously early-exercised options. Refer to below under “Option Activity — Modifications to Stock Options” for further details. No common shares were repurchased during the year ended December 31, 2024. Repurchased common stock is shown on the condensed consolidated balance sheets and condensed consolidated statements of redeemable convertible preferred stock and shareholders' deficit as treasury stock. The Company had 1,620,638 and 182,500 shares of treasury stock as of September 30, 2025 and December 31, 2024, respectively. These shares have not been retired. The Company has not issued any shares of treasury stock as of September 30, 2025 and December 31, 2024. 2020 Incentive Plan Pursuant to the 2020 Incentive Plan (the “2020 Plan”), the Company may grant awards of options, restricted awards, performance awards or share appreciation rights to employees, consultants, and directors of the Company. A total of 22,906,854 shares of common stock are reserved for issuance upon the exercise of all awards granted or available to be granted under the 2020 Plan as of September 30, 2025. In June 2025, in connection with the IPO and the adoption of the 2025 Plan (as defined below), the Company will not make any additional grants under the 2020 Plan. Any outstanding awards granted under the 2020 Plan remain subject to the terms of the 2020 Plan, and any shares underlying outstanding awards under the 2020 Plan that expire or are repurchased, forfeited, canceled, or withheld will become available for issuance under the 2025 Plan. To the extent permitted by applicable laws or any exchange rule, any shares of common stock issued under this Plan that are issued (a) in connection with the Company's acquisition of an unaffiliated business entity, (b) to the employees of such entity, and (c) in substitution of equity incentive awards previously issued to such employees by such entity shall not reduce the number of shares of common stock available for issuance under the Plan. 2025 Incentive Plan Effective May 23, 2025, the Company’s Board of Directors adopted, and the shareholders approved, the 2025 Incentive Plan (the “2025 Plan”). The 2025 Plan provides for the grant of incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), share appreciation rights, restricted awards, performance awards, and other awards. As of September 30, 2025, a total of 4,132,565 shares of common stock were reserved for issuance in settlement of awards granted under the 2025 Plan. The material terms of the 2025 Plan are substantially similar to the 2020 Plan, except with respect to the number of authorized shares, which initially equaled 15,125,002 shares, plus the number of shares that would return to the share reserve of the 2020 Plan following the pricing of the Company's initial public offering. The 2025 Plan’s share reserve will increase on January 1 of each calendar year during the term of the 2025 Plan, beginning in 2026, by a number of shares as determined by the administrator of the 2025 Plan and in consultation with the Company, provided, that such increase (if any) will be no greater than the amount by which (y) 4 % of the aggregate number of outstanding shares of our common stock as of the last day of the immediately preceding fiscal year exceeds (z) 24 Table of Contents the aggregate number of shares remaining available for grant under the 2025 Plan on the last day of the immediately preceding fiscal year. Employee Stock Purchase Plan The Company’s Board of Directors has adopted, and the shareholders approved, the 2025 Employee Stock Purchase Plan (the “ESPP”), which became effective in connection with the IPO. The ESPP enables eligible employees to purchase shares of the Company’s common stock with payroll deductions. A total of 2,571,250 shares of the Company’s common stock were initially reserved for issuance under the ESPP. The number of shares reserved for issuance and sale under the ESPP will increase automatically on January 1 of each calendar year during the term of this Plan beginning in 2026, by a number of Shares equal to 1 % of the Common Stock outstanding on the last day of the immediately preceding fiscal year, unless the ESPP administrator should decide to increase the number of shares available under the ESPP by a lesser amount. The purchase price designated by the ESPP administrator will be no less than the lower of 85 % of the closing trading price per share of our common stock on the first trading date of an offering period in which a participant is enrolled or 85 % of the closing trading price per share on the purchase date, which will occur on the last trading day of each purchase period within an offering period. The initial enrollment and offering periods have not begun as of September 30, 2025. Option Activity Under the Plan, the Company has granted incentive stock options and non-qualified stock options to its employees and other service providers (non-employees). Most of the Company’s stock options vest incrementally over five years , subject to the grantee's continuous employment with the Company (“time-vesting options”). The Company recognizes compensation cost on a straight-line basis over the requisite service period for its time-vesting options. In addition to its time-vesting options, the Company has also granted stock options to certain non-employees for which vesting is tied to the grantee’s performance (“performance-vesting options”). The Company evaluates whether it is probable that the performance metric will be achieved for its performance-vesting options and recognizes compensation cost on a straight-line basis over the implied service period if achievement of the performance metric is deemed probable. No option shall be exercisable after the expiration of 10 years from the date it was granted. The exercise price of each option shall be not less than 100.0 % of the fair market value of the common stock subject to the option on the date the option is granted. The following tables summarize the Company's stock option activity during the nine months ended September 30, 2025: Options Outstanding Weighted Weighted Average Average Exercise Remaining Aggregate Number of Price Contract Intrinsic Options Per Share Term Value (in years) (in thousands) Total outstanding as of December 31, 2024: 21,770,225 $ 9.06 5.40 $ 226,117 Granted 3,085,295 18.79 Exercised ( 1,287,294 ) 6.13 Forfeited or expired ( 897,662 ) 13.49 Total outstanding as of September 30, 2025 22,670,564 $ 10.38 5.21 $ 450,463 Total exercisable as of September 30, 2025 16,656,509 $ 7.74 4.21 $ 374,980 Total vested or expected to vest as of September 30, 2025 21,841,290 $ 10.09 5.10 $ 440,333 Aggregate intrinsic value represents the difference between the estimated fair value of the underlying common stock and the exercise price of outstanding, in-the-money options. 25 Table of Contents The total intrinsic value of options exercised was $ 8.7 million and $ 1.1 million during the three months ended September 30, 2025 and 2024, respectively, and was $ 13.5 million and $ 2.6 million during the nine months ended September 30, 2025 and 2024 , respectively. As of September 30, 2025 , there was approximately $ 58.6 million of total unrecognized stock-based compensation cost related to the unvested options under the Plan, which is expected to be recognized over a weighted-average period of 3.09 years. Modification to stock options On November 9, 2021 and February 23, 2022, the Company granted stock options to certain executives that are exercisable upon vesting for 331,250 shares and 2,000,000 shares of the Company’s common stock, respectively (the “Prior Stock Options”). The Prior Stock Options vested over five years . On August 11, 2022, the Company’s Compensation Committee approved a modification to the Prior Stock Options, which was communicated to holders of the Prior Stock Options on September 1, 2022. The modification reduced the exercise price to $ 16.20 and modified the vesting conditions such that 20.0 % vest upon grant, while the remainder vest over the following four years . The total number of grantees affected by this modification was twelve. The modification was not mandatory, but rather could be elected by holders of the Prior Stock Options on an individual holder basis. If the holder elected to participate, the holder’s Prior Stock Options were immediately canceled, and the Company issued the holder an equivalent number of new stock options in exchange (the “New Stock Options”) which could be early exercised prior to vesting. All of the holders elected to participate in the modification and exchanged their Prior Stock Options for New Stock Options. In addition, as an alternative to paying cash, holders of the New Stock Options that elected to exercise their options were able to pay for the exercise price by executing a full recourse promissory note with the Company that is secured by the holder’s restricted shares that are issued upon early exercise. Five grantees elected to early exercise 1,530,000 options utilizing the promissory note. The principal of each note was equal to the exercise price of the New Stock Options. Interest on the unpaid balance compounded annually and accrued at a fixed rate per annum equal to the mid-term applicable federal rate in effect on the issuance of the note. The maturity date of the notes was the earlier of (1) December 31, 2030 or (2) the occurrence of a change in control event, unless an acceleration event occurs sooner. An acceleration event would generally occur if required to ensure compliance with Section 402 of the Sarbanes-Oxley Act of 2022, the termination of the holder's employment, the insolvency of the holder or the breach of any warranty of the holder. The holder may elect to prepay the outstanding principal and accrued interest balance of the promissory note at any time without penalty. In addition to the outstanding balance of the note becoming due and payable immediately, upon the occurrence of an acceleration event, if the holder defaults on payment of the note, then interest would accrue at the maximum rate permitted by applicable law. The Company would have full recourse against the holder for failure to pay the note as and when due. Such promissory notes were secured by the restricted shares issued to the holder that were underlying the note. If the note is not repaid upon an event of default or acceleration event, the Company had the right to repurchase the restricted shares issued upon the exercise of the note for fair market value, which proceeds will apply to repayment of the note (with any remaining balance remaining due). The Company accounted for the modification as a Type I (Probable to Probable) modification under ASC 718 that does not change the classification of the award (i.e., the New Stock Options continue to be classified within equity). The Company calculated the fair value of the Prior Stock Options and New Stock Options immediately prior to and after the modification using the Black-Scholes option pricing model. The incremental fair value was added to the original unrecognized compensation cost to arrive at the new unrecognized compensation cost, to be recognized over the remaining requisite service period. Unvested stock received from early exercises of the New Stock Options are subject to a right of repurchase at the lesser of (i) original issuance price or (ii) then-current fair market value in the event of the employee's termination, either voluntary, or involuntary. The Company’s repurchase right with respect to these shares typically lapse over four years as the shares become vested. Early exercises of stock options are not deemed to be substantive exercises for accounting purposes and accordingly, consideration received for exercises of unvested stock options is initially recorded as a liability and subsequently reclassified into shareholders’ deficit as the related shares vest. As of September 30, 2025 and December 31, 2024, 23,446 and 662,000 shares from options exercised to date were subject to repurchase at a price of $ 16.20 per share. Of the amount subject to repurchase as of September 30, 2025 and December 31, 2024, $ 0.3 million and $ 5.0 million was recorded within other accrued expenses and current liabilities, respectively, and $ 0.1 million and $ 5.8 million was recorded within other long-term liabilities on the condensed consolidated balance sheets, respectively. In addition, as the early exercise was performed via issuance of a promissory note, a corresponding debt amount, plus related interest income was recorded as contra-equity. The total amount presented as contra-equity as of December 31, 26 Table of Contents 2024 was $ 26.5 million, which includes interest income and the impact from exercises of both the vested portion of the New Stock Options and early exercises. On March 3, 2025, the Company repurchased 1,429,213 common stock shares issued upon early exercise of stock options at $ 18.60 per share and proceeds were used to pay off the promissory notes and accrued interests. Repurchased common stock shares included 810,816 and 618,397 common stock shares, respectively, that were for options vested and unvested at the time of the repurchase, respectively. On the same day, the Company granted 1,530,000 new stock options to the same employees. New options were issued at an exercise price of $ 18.60 per share, have the same vesting status as cancelled options and are not early exercisable. The other terms of the new options are substantially the same as the original options. The Company accounted for the repurchase of the shares and grant of the new options as a Type I (Probable to Probable) modification under ASC 718. The Company calculated the fair value of the original options and new options immediately prior to and after the modification using the Black-Scholes option pricing model based on the following assumptions: risk-free interest rate of 3.93 % - 3.99 %; dividend yield of 0.00 %; stock price volatility of 68.96 % - 69.48 %; and an expected life of 5.0 - 5.3 years. The total incremental fair value was $ 15.1 million, of which $ 8.6 million corresponding to the vested options was immediately recognized as compensation expense, with the remaining $ 6.5 million and the original unrecognized compensation cost of $ 5.7 million being recognized over the remaining requisite service period. Restricted Awards Activity The Company grants restricted stock units that will be settled in shares of the Company's common stock upon vesting to its employees, consultants and non-employee directors. Vesting of the restricted stock units granted prior to the IPO was generally contingent upon the Company completing either an initial public offering of its common stock or a change of control. In connection with the IPO, the Company settled an aggregate of 1,048,250 fully vested RSUs (“IPO Settled RSUs”) in August 2025. The Company withheld 415,389 shares of common stock issuable upon settlement of the IPO Settled RSUs and recorded a tax withholding liability of $ 12.4 million, all of which were subsequently remitted as taxes paid. Vesting of restricted stock units granted after the IPO generally occurs incrementally over four years , subject to the grantee's continuous service with the Company. The following table summarizes the Company's restricted stock unit activity for the nine months ended September 30, 2025: Weighted Number of Average Grant Restricted Stock Units Date Fair Value Unvested as of December 31, 2024 762,500 $ 18.19 Granted 4,743,247 $ 20.94 Vested ( 1,048,250 ) $ 18.23 Cancelled/forfeited ( 88,642 ) $ 22.13 Unvested as of September 30, 2025 4,368,855 $ 21.09 As of September 30, 2025, there was approximately $ 85.3 million of total unrecognized stock-based compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of 3.52 years. 27 Table of Contents Stock-Based Compensation Expense The Company recorded stock-based compensation expense in the condensed consolidated statements of operations and comprehensive loss as follows: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (amounts in thousands) Cost of services - Molecular profiling services $ 1,104 $ 411 $ 2,452 $ 1,237 Cost of services - Pharma research and development services 17 3 20 6 Selling and marketing expense 3,322 1,092 6,554 3,177 General and administrative expense 6,410 2,148 39,438 6,147 Research and development expense 2,802 1,069 8,175 3,099 Total $ 13,655 $ 4,723 $ 56,639 $ 13,666 There was no tax benefit associated with the above stock-based compensation expense. Valuation of Stock-Based Awards The Company records stock-based compensation expense for stock-based awards based on the estimated fair value of the awards on the date of the grant. The Company estimates the fair value of stock options using a Black-Scholes option pricing model. Prior to the IPO, the absence of a public market for the Company’s common stock required the Company’s Board of Directors to estimate the fair value of its common stock for purposes of granting options and for determining stock-based compensation expense by considering several objective and subjective factors, including contemporaneous third-party valuations, actual and forecasted operating and financial results, market conditions and performance of comparable publicly traded companies, developments and milestones in the Company, the rights and preferences of common and convertible preferred stock, transactions involving the Company’s common stock, and assumptions for a discount for lack of marketability. The fair value of the Company’s common stock was determined in accordance with the applicable elements of the American Institute of Certified Public Accountants Accounting and Valuations Guide, Valuation of Privately Held Company Equity Securities Issued as Compensation . The key assumptions used in determining the fair value of options granted and a summary of the methodology applied to develop each assumption are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2024 2025 2024 Expected volatility 68.2 % - 68.4 % 68.3 % - 69.5 % 62.5 % - 68.4 % Risk-free interest rate 3.7 % 3.9 % - 4.2 % 3.7 % - 4.6 % Expected term (years) 6.34 - 6.57 5.00 - 6.55 5.97 - 6.57 Expected dividend rate — % — % — % Expected forfeiture rate 8.4 % 0.0 % - 8.5 % 8.4 % - 8.5 % For the three months ended September 30, 2025, there were no options granted. Expected volatility. This is a measure of the amount by which the share price has fluctuated or is expected to fluctuate. An increase in the expected price volatility will increase the fair value of the option granted and the related compensation expense. As the Company was not publicly traded prior to June 2025, the expected price volatility for the Company's options was determined by using an average of historical volatilities of selected industry peers deemed to be comparable to the business corresponding to the expected term of the awards. 28 Table of Contents Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for U.S. Treasury notes with maturities corresponding to the expected term of the awards. Expected term. This is the period of time over which the options granted are expected to remain outstanding and is based on the Company’s estimate, taking into consideration vesting term, contractual term and historical actual lives. Options granted have a maximum term of ten years . An increase in the expected life will increase the fair value of the option granted and the related compensation expense. Due to the lack of historical share option exercise data, the Company utilizes the simplified method for determining the expected term. Dividend rate. The Company has not made any dividend payments, nor does it have plans to pay dividends in the foreseeable future. Therefore, an expected dividend yield of zero is utilized. Forfeitures. Forfeitures are estimated at the time of grant and reduce compensation expense ratably over the vesting period. This estimate is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate . Note 8. Long-Term Debt The carrying value of debt presented within current portion of notes payable and long-term indebtedness, net of debt discounts on the condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 includes the following components: As of September 30, 2025 As of December 31, 2024 (amounts in thousands) Term loan Initial Draw - January 18, 2023 $ 200,000 $ 200,000 Exit fee on term loan - January 18, 2023 2,000 2,000 Term loan Subsequent Draw - March 5, 2024 200,000 200,000 Exit fee on term loan - March 5, 2024 2,000 2,000 Less: Amortized debt discounts and financing costs (1) ( 28,120 ) ( 30,863 ) Net debt $ 375,880 $ 373,137 Compound bifurcated derivative liability $ — $ 6,058 (1) Includes debt discounts of $ 28.3 million associated with the initial carrying value of compound bifurcated derivative liability. Maturities of the Company’s debt are expected to be as follows as of September 30, 2025: Amount Years Ending December 31, Remainder of 2025 $ — 2026 — 2027 — 2028 400,000 2029 — Term Loan On January 18, 2023, the Company entered into the New Term Loan Agreement with OrbiMed Royalty & Credit Opportunities III, LP, OrbiMed Royalty & Credit Opportunities IV, LP (collectively, “OrbiMed”), and Braidwell Transaction Holdings LLC (“Braidwell”, and collectively with OrbiMed, the “New Term Loan Lenders”). Pursuant to the New Term Loan Agreement, the Company issued senior, secured promissory notes by which the New Term Loan Lenders agree to lend the Company up to an aggregate principal amount of $ 400.0 million (the “2023 Term Loan”), $ 200.0 million of which was 29 Table of Contents received by the Company upon issuance (the “Initial Draw”), and the remaining $ 200.0 million was received by the Company in March 2024 (the “Delayed Draw”). Until the earlier of December 31, 2024 or the date on which the 2023 Term Loan amount was fully drawn, which occurred on March 5, 2024, the undrawn balance of the New Term Loan Commitment was subject to a fee of 0.5 % per annum. The outstanding principal amount of the 2023 Term Loan is due and payable on January 18, 2028. If an event of default occurs and is continuing, the New Term Loan Lenders may declare all amounts outstanding under the New Term Loan Agreement to be immediately due and payable. A final payment exit fee equal to 1.0 % of the amount funded under the New Term Loan Agreement is due upon prepayment or maturity. Amounts borrowed pursuant to the New Term Loan Agreement may be prepaid at any time. Upon prepayment, the Company is subject to a prepayment penalty based on the timing of repayment. The 2023 Term Loan bears interest at a rate per annum equal to a fixed margin of 6.5 % plus the greater of (a) forward-looking three-month secured overnight financing rate (“SOFR”) and (b) 2.5 %. In the event of default, the fixed margin shall increase by 3.0 % per annum. As of September 30, 2025, the interest rate was 10.8 %. Regular quarterly payments are interest-only for the 60-month term of the New Term Loan Agreement, with the principal due at maturity. The effective interest rate for the Initial Draw of the 2023 Term Loan is 17.0 %, and the effective interest rate for the Delayed Draw of the 2023 Term Loan is 12.0 %. The Company’s obligations under the New Term Loan Agreement are secured by a first lien security interest in substantially all of the assets of the Company and its subsidiaries. The New Term Loan Agreement contains certain customary representations and warranties, affirmative and negative covenants, financial covenants, and events of default applicable to the Company and its subsidiaries. Additional covenants include those restricting dispositions, fundamental changes to its business, mergers or acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and subordinated debt. At September 30, 2025, the Company is in compliance with all covenants. On April 1, 2025, the Company entered into an amendment of the 2023 Term Loan agreement. The amendment allowed for various consents from the lenders of the 2023 Term Loan as it relates to the 2025 Convertible Note, issued as part of the Pre-IPO financing. As part of the amendment, the Company paid an amendment fee of 1 %, or $ 4.0 million. The Company evaluated the transaction and accounted for the amendment as a debt modification. The Company identified multiple embedded derivatives that require bifurcation from the 2023 Term Loan. They are separately accounted for in the condensed consolidated financial statements as one compound derivative liability. Those embedded features include various contingent prepayment and compensatory payment features as well as interest rate increases upon an event of default. Interest Expense The components of interest expense associated with the Company’s long-term indebtedness and the 2025 Convertible Note, excluding finance leases, are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (amounts in thousands) Debt discount amortization $ 2,463 $ 1,827 $ 12,163 $ 5,148 Interest expense 11,036 11,963 33,311 31,587 Interest expense on long-term indebtedness, excluding finance leases $ 13,499 $ 13,790 $ 45,474 $ 36,735 2018 and 2020 Warrant Liability On September 21, 2018, the Company entered into a secured term loan agreement (the “Original Term Loan Agreement”) with Sixth Street Specialty Lending, Inc. and Barnett Debt Holdings, LLC. As part of the Original Term Loan Agreement, the Company issued a warrant to purchase 13,694,623 shares of Series C preferred stock (the “2018 Warrants”). In connection with the amendment to the Original Term Loan Agreement in 2020, the Company issued an additional warrant to purchase 11,399,814 shares of Series C preferred stock (the “2020 Warrants”) and amended the 2018 Warrants. Furthermore, these amendments also permitted the exercise of both the 2018 Warrants and 2020 30 Table of Contents Warrants into Series C preferred stock or common stock at the option of the holder. The 2018 Warrants are exercisable into Series C preferred stock at a price of $ 1.61 and into common stock at a price of $ 6.44 . The 2020 Warrants are exercisable into Series C preferred stock at a price of $ 1.93 and into common stock at a price of $ 7.73 . As a result of the amendment to permit exercise of the warrants into redeemable preferred stock, the warrants are classified as a liability pursuant to the guidance in ASC 480. Therefore, the warrants were reported at fair value within warrant liabilities on the condensed consolidated balance sheets, with changes in fair value reported within changes in fair value of financial instruments on the condensed consolidated statements of operations and comprehensive loss. As discussed in Note 2 , the warrants were reclassified from liability to equity upon the IPO. The difference between the fair value of the warrants immediately prior to the reclassification and its prior fair value was recorded in the consolidated statement of operations and comprehensive loss as changes in fair value of financial instruments. The fair value immediately prior to the reclassification was $ 131.7 million, and is based on the total number of common stock issued upon exercise and conversion, multiplied by the public offering price of $ 21.00 per share. For the nine months ended September 30, 2024, the Company recorded $ 5.1 million in changes in fair value of financial instruments, associated with the fair value changes of the 2018 and 2020 warrants. 2025 Convertible Notes On April 1, 2025, the Company issued 2025 Convertible Notes to certain investors in aggregate principal amount of $ 30.0 million. The 2025 Convertible Notes were scheduled to mature on January 1, 2026, accrued interest at a rate of 8 % per annum, and, upon the closing of the IPO, converted at a conversion price equal to 70 % of the initial public offering price per share, or into 2,076,596 shares of the Company’s common stock (inclusive of accrued interest), based on the initial public offering price of $ 21.00 per share. This legal-form conversion upon an initial public offering effectively functions as a share-settled redemption provision for accounting purposes and is accounted for as a bifurcated derivative liability in accordance with ASC 815. The 2025 Convertibles Notes were classified as a liability pursuant to the guidance in ASC 470 as they represented legal-form debt with a stated maturity and an obligation for the issuer to repay both principal and interest. Upon the closing of the initial public offering, the 2025 Convertible Notes converted into common stock at a price equal to 70 % of the initial public offering price per share. A loss on extinguishment of approximately $ 17.9 million was recognized, representing the excess of the fair value of the common stock issued over the combined carrying amount of the 2025 Convertible Notes and the related bifurcated derivative liability. 2025 Warrant Liability On April 1, 2025, the Company also issued warrants to acquire shares of common stock to the holders of the 2025 Convertible Notes. These warrants were not initially exercisable for any shares of common stock, but such warrants became exercisable for a specified dollar value of shares on a monthly basis commencing on June 1, 2025 if the Company did not complete an initial public offering by such date. Additional warrants would have been issued each subsequent month that an initial public offering fails to occur based on a certain percentage. These warrants were classified as a liability pursuant to the guidance in ASC 480 as they represented a conditional obligation to issue a variable number of shares based on a fixed monetary amount known at inception. Therefore, these warrants were reported at fair value within warrant liabilities on the condensed consolidated balance sheets, with changes in fair value reported within changes in fair value of financial instruments on the condensed consolidated statements of operations and comprehensive loss. As discussed in Note 2 , the 2025 warrants were net exercised into 784,231 shares of the Company’s common stock connection with the IPO. The difference between the fair value of the warrants immediately prior to the IPO and its initial fair value was recorded in the consolidated statement of operations and comprehensive loss as changes in fair value of financial instruments. The fair value immediately prior to the IPO was $ 16.5 million, and was based on the total number of common stock issued upon exercise and conversion, multiplied by the public offering price of $ 21.00 per share. The initial allocated proceeds of the warrant was $ 10.3 million, which represents the fair value of the warrants on April 1, 2025. Note 9. Commitments and Contingencies Purchase Obligations The Company enters into various supply agreements that contains purchase commitments. Most of the commitments are based on a binding forecast for an agreed-upon period, which is 12-month or less. 31 Table of Contents Corporate Liability and Insurance The Company maintains professional liability, general liability, and other customary insurance on a claims-made basis in amounts deemed appropriate by the Company’s management based upon historical claims and the nature and risks of the Company. The Company’s business may subject the Company to litigation and liability for damages. The Company believes that current insurance protection is adequate for present business operations, but there can be no assurance that the Company will be able to maintain professional and general liability insurance coverage in the future or that such insurance coverage will be available on acceptable terms or adequate to cover any or all potential product or professional liability claims. A successful liability claim in excess of insurance coverage could have a material adverse effect on the Company. Litigation During the ordinary course of business, the Company has become and may in the future become subject to pending and threatened legal and regulatory actions and proceedings. While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that none of its current legal proceedings are likely to have a material adverse effect on its financial position as of September 30, 2025 and December 31, 2024, nor its results of operations or cash flows for both the three months ended September 30, 2025 and 2024 and the nine months ended September 30, 2025 and 2024. Note 10. Related Parties The Company's officers and directors have ownership interests in certain vendors providing services to the Company. During the three months ended September 30, 2025 and 2024, the Company made payments to these entities for services and expenses for $ 0.6 million and $ 0.7 million, respectively. During the nine months ended September 30, 2025 and 2024, the Company made payments to these entities for services and expenses for $ 2.0 million and $ 1.5 million, respectively. Additionally, during the three months ended September 30, 2025 and 2024, the Company recorded general and administrative expenses due to related parties of $ 0.7 million and $ 0.6 million, respectively. During the nine months ended September 30, 2025 and 2024, the Company recorded general and administrative expenses due to related parties of $ 1.9 million and $ 1.4 million, respectively. Note 11. Net Income (Loss) Per Share Attributable to Common shareholders The Company reports both basic net income (loss) per share, which is based on the weighted-average number of shares of common stock outstanding during the period without consideration for potential common stock equivalents, and diluted net income (loss) per share, which is based on the weighted-average number of common stock outstanding 32 Table of Contents and potentially dilutive shares outstanding during the period. The following table sets forth the computation of the basic and diluted net income (loss) per share attributable to common shareholders: Three Months Ended September 30, Nine Months Ended September 30, (amounts in thousands, except share and per share data) 2025 2024 2025 2024 Net income (loss) $ 24,325 $ ( 67,729 ) $ ( 150,045 ) $ ( 244,943 ) Deemed dividend from Series D redeemable convertible preferred stock — — ( 384,436 ) — Adjustments of redeemable convertible preferred stock to redemption value — ( 24,661 ) ( 85,433 ) ( 71,368 ) Net income (loss) attributable to common shareholders $ 24,325 $ ( 92,390 ) $ ( 619,914 ) $ ( 316,311 ) Denominator: Weighted-average shares - basic 282,099,073 35,643,589 128,447,673 35,442,927 Effect of dilutive securities: Dilutive awards and units 1,659,504 — — — Dilutive options 13,453,261 — — — Weighted-average shares - diluted 297,211,838 35,643,589 128,447,673 35,442,927 Net income (loss) per share attributable to common shareholders: Basic $ 0.09 $ ( 2.59 ) $ ( 4.83 ) $ ( 8.92 ) Diluted $ 0.08 $ ( 2.59 ) $ ( 4.83 ) $ ( 8.92 ) Potential dilutive securities include dilutive common stock from stock-based awards attributable to the assumed exercise of stock options and RSUs using the treasury stock method. Under the treasury stock method, potential common stock outstanding are not included in the computation of diluted net income per share if their effect is anti-dilutive. The following common stock equivalents were excluded from the calculation of diluted net income (loss) per share attributable to common shareholders for the periods presented as they had an anti-dilutive effect: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Series A preferred stock — 121,448,823 — 121,448,823 Series B preferred stock — 7,407,408 — 7,407,408 Series C preferred stock — 29,050,209 — 29,050,209 Series D preferred stock — 25,629,071 — 25,629,071 Outstanding warrants — 6,273,609 — 6,273,609 Unvested RSUs 74,786 695,625 4,368,855 695,625 Outstanding stock options 1,519,047 21,263,852 22,670,564 21,263,852 Unvested shares subject to repurchase 23,446 662,000 23,446 662,000 Total 1,617,279 212,430,597 27,062,865 212,430,597 Anti-dilutive potential shares from stock-based awards are excluded from the calculation of diluted earnings per share for all periods reported above because either their exercise price exceeded the average market price during the period or the stock-based awards were determined to be anti-dilutive based on applying the treasury stock method. Anti-dilutive potential shares from stock-based awards are excluded from the calculation of diluted earnings per share for the three months ended September 30, 2024 and the nine months ended September 30, 2025 and 2024 due to the net losses reported in those periods. 33 Table of Contents Note 12. Segment and Geographic Information The Company operates as a single operating segment. An operating segment is defined as a component of an entity for which discrete financial information is available and regularly reviewed by the entity's chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM, its Chairman and Chief Executive Officer, manages the Company’s operations on a consolidated basis for the purposes of allocating resources, making operating decisions and evaluating financial performance. Net loss as reported on the condensed consolidated statements of operations and comprehensive loss is used by the CODM to assess segment performance against management budgets and prior period operating results for the purpose of making results-driven decisions about organizational resource allocation. Segment revenues are derived from molecular profiling, strategic data, and research services that are delivered to the Company’s biopharmaceutical and clinical customers, who are predominantly located in the United States. The Company provides these services primarily by leveraging the Company’s proprietary technologies and clinico-genomic database, which are core to the Company’s operations and are deployed similarly across the service offerings. The table below is a summary of the segment profit or loss, including significant segment expenses: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (amounts in thousands) Revenue: Molecular profiling services $ 207,587 $ 93,803 $ 484,593 $ 254,692 Pharma research and development services 9,246 7,817 34,554 27,653 Revenue 216,833 101,620 519,147 282,345 Less: Cost of services - Molecular profiling services 66,980 54,810 193,195 167,134 Cost of services - Pharma research and development services 2,347 2,398 7,698 7,130 Selling and marketing expense 41,267 36,758 123,355 115,077 General and administrative expense 51,973 40,852 168,458 126,273 Research and development expense 21,624 27,644 69,739 86,807 Total costs and operating expenses 184,191 162,462 562,445 502,421 Income (Loss) from operations 32,642 ( 60,842 ) ( 43,298 ) ( 220,076 ) Interest income 7,360 1,744 9,482 6,152 Interest expense ( 13,507 ) ( 13,799 ) ( 45,497 ) ( 36,763 ) Changes in fair value of financial instruments ( 2,081 ) 5,131 ( 52,285 ) 6,067 Other income (expense), net ( 89 ) 37 ( 18,447 ) ( 323 ) Segment and consolidated net income (loss) $ 24,325 $ ( 67,729 ) $ ( 150,045 ) $ ( 244,943 ) 34 Table of Contents The following table sets forth the Company’s revenue by geographic areas based on the customer’s location: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (amounts in thousands) United States $ 213,550 $ 99,403 $ 510,161 $ 275,213 International 3,283 2,217 8,986 7,132 Total revenue $ 216,833 $ 101,620 $ 519,147 $ 282,345 No single country outside of the United States accounted for more than 10.0% of total revenue during each of the three months ended September 30, 2025 and 2024, or the nine months ended September 30, 2025 and 2024. As of September 30, 2025 and December 31, 2024, approximately 99.0 % of the Company’s total assets are located in the United States. Note 13. Employee Benefit Plan The Company sponsors a 401(k) plan, and pursuant to its terms, eligible employees can elect to contribute to the 401(k) plan, subject to certain limitations, up to the lesser of the statutory maximum or 100.0 % of eligible compensation on a pre-tax basis. For the three months ended September 30, 2025 and 2024, the Company contributed $ 1.7 million and $ 2.0 million, respectively, to match employee contributions as permitted by the plan. For the nine months ended September 30, 2025 and 2024, the Company contributed $ 6.5 million and $ 6.2 million, respectively, to match employee contributions as permitted by the plan. The Company pays the administrative costs for the plan. Note 14. Subsequent Events On October 20, 2025, the Company entered into a lease agreement with LMC-Papago Investment Company, LLC for approximately 38,640 rentable square feet of office space located on the 6th floor at 350 West Washington Street, Tempe, Arizona (the “Papago Gateway Center”). The lease has an initial term of ten years , with an option to extend for an additional five years . The lease commencement date is expected to occur upon delivery of the premises and substantial completion of tenant improvements, currently estimated to be in mid-2026, with rent payments commencing approximately six months thereafter. The Company expects that the lease will result in the recognition of a right-of-use asset and corresponding lease liability upon lease commencement in fiscal 2026. There were no other significant subsequent events identified through the date that the condensed consolidated financial statements were issued, that could impact the financial statements. 35 Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included in Item 1 of in this Quarterly Report. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under the section titled “Risk Factors” and elsewhere in this Quarterly Report. See the section titled “Special Note Regarding Forward-Looking Statements” elsewhere in this Quarterly Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Unless context requires otherwise, references to “we,” “us,” “our,” “Caris,” or “the Company” here refer to Caris Life Sciences, Inc. together with its wholly owned subsidiaries. Overview We are a leading, patient-centric, next-generation AI TechBio company and precision medicine pioneer. We develop and commercialize innovative solutions to transform healthcare through the use of comprehensive molecular information and AI/ML algorithms at scale. Our entire portfolio of precision medicine solutions is designed to benefit patients, with an initial focus on oncology, and serves the clinical, academic, and biopharma markets. We founded Caris in 2008 with the belief and vision that combining a vast set of consistently generated molecular information with robust data-driven insights could realize the potential of precision medicine for patients. We have spent the last 17 years developing and building our portfolio of comprehensive, proprietary molecular profiling solutions and generating what we believe to be one of the largest and most comprehensive multi-modal clinico-genomic datasets in oncology based on the millions of tests we have run on over 959,000 cases. Our platform is purpose-built to leverage the convergence of next-generation sequencing (“NGS”), artificial intelligence (“AI”) and machine learning (“ML”) technologies, and high-performance computing. The power of our differentiated Caris platform has enabled us to develop the latest generation of advanced precision medicine diagnostic solutions designed to address the entire cancer care continuum, including early detection, minimal residual disease (“MRD”) tracking, therapy selection, and treatment monitoring, as well as to create molecular signatures and discover and develop novel precision medicine therapeutics. Our current commercial product portfolio consists of MI Profile, our tissue-based molecular profiling solution that has generated the majority of our revenue to date, and Caris Assure, our novel, universal blood-based molecular profiling solution that was broadly launched in the first quarter of 2024 for therapy selection. Our purpose-built, proprietary multi-omic profiling solutions capture and analyze molecular information from tissue and blood in a comprehensive manner. We believe this approach best positions us to provide actionable treatment pathways from targeted therapies to drive superior clinical outcomes for patients while also generating a rich dataset to power insights and innovation. Our molecular profiling solutions and the data generated by our multi-omic technology platform also provide value to our biopharma partners, such as Moderna, AbbVie, Xencor, and Merck KGaA, through partnerships that aim to increase the probability of technical and regulatory success of their therapeutic pipelines. We believe that our early foresight to generate comprehensive data at scale over the past many years and build a robust, foundational infrastructure have uniquely positioned Caris to leverage the benefits of biological and technological advances to deliver transformative and advanced innovations in precision medicine and patient care into the future. To our knowledge, we remain the only genomic profiling company to consistently utilize whole exome sequencing (“WES”) and whole transcriptome sequencing (“WTS”) as standard practice on every eligible patient sample. Our in-depth profiling of patient samples has led to the creation of what we believe to be one of the largest and most comprehensive multi-modal clinico-genomic datasets in oncology. Our global annual clinical case volume has been growing rapidly, with year-over-year growth of 29% in 2022, 32% in 2023, 26% in 2024, and 23% through the third quarter of 2025. With our broad commercial launch of Caris Assure for therapy selection in the first quarter of 2024 and the FDA approval of MI Cancer Seek as a companion diagnostic in the fourth quarter of 2024 followed by the broad commercial launch of MI Cancer Seek in the first quarter of 2025 as the NGS component of MI Profile, we believe that increased profiling volumes will meaningfully contribute to our growth in 2025 and beyond. Our Caris platform is designed to create a virtuous cycle that can enable continued innovation and improved impact for patients and physicians. We believe our comprehensive approach to profiling will continue to drive demand 36 Table of Contents for our genomic profiling capabilities, leading to further expansion of our clinico-genomic datasets, which provide additional valuable inputs to develop and enhance our solutions, with the ultimate goal of contributing to improved patient results. This continuous feedback loop enabled us to develop Caris Assure, which utilized genomic data generated by MI Profile to inform our blood-based bioinformatics algorithms, allowing us to detect previously unknown features and signals in the blood that provide advanced insights into disease development. We believe we will be able to further leverage this process to continue meaningful innovation in precision oncology as well as other chronic disease states, including cardiology, neurology, and metabolic conditions. For the three months ended September 30, 2025 and 2024, we generated total revenue of $216.8 million and $101.6 million, respectively, and incurred net income (loss) of $24.3 million and $(67.7) million, respectively. For the nine months ended September 30, 2025 and 2024, we generated total revenue of $519.1 million and $282.3 million, respectively, and incurred net losses of $150.0 million and $244.9 million, respectively. Our Adjusted EBITDA was $51.2 million and $(45.6) million for the three months ended September 30, 2025 and 2024, respectively, and $31.7 million and $(166.6) million for the nine months ended September 30, 2025 and 2024. While we have achieved net profit for the three months ended September 30, 2025, we may incur net losses in the near future, and our expenses will increase as we continue to invest in developing new solutions, expand our organization, and increase our marketing efforts to continue to drive market adoption of our solutions. These investments, together with general and administrative expenses, have resulted in positive (negative) cash flows from operations of $38.4 million and $(206.3) million for the nine months ended September 30, 2025 and 2024, respectively. Our free cash flow was $27.2 million and $(212.4) million for the nine months ended September 30, 2025 and 2024, respectively. For additional information regarding Adjusted EBITDA and free cash flow, non-GAAP financial measures, see “—Non-GAAP Financial Measures.” Additionally, as of September 30, 2025, we had cash, cash equivalents, restricted cash and marketable securities of $759.3 million, and the aggregate principal amount of debt outstanding under our existing term loan was $400.0 million. For additional information regarding our liquidity and capital resources, see “—Liquidity and Capital Resources.” On June 20, 2025, we completed our initial public offering (“IPO”) of our common stock, in which the Company issued and sold 23,529,412 shares of its common stock at a price of $21.00 per share, which resulted in net proceeds of $459.5 million after deducting underwriting discounts and commissions and before deducting offering costs of $9.0 million. Additionally, on June 25, 2025, the underwriters exercised their full over-allotment option and purchased from the Company an additional 3,529,411 shares of common stock at the IPO price, which resulted in net proceeds to the Company of $68.9 million after deducting discounts and commissions. Key Factors Affecting Our Performance We believe that our operating performance and future success depend on a number of factors that present significant opportunities for us and may pose risks and challenges, including those discussed below and in the “Risk Factors” section of this Quarterly Report. • Market acceptance and commercial success of our solutions. Our success and future growth will depend on maintaining and expanding market acceptance of our molecular profiling solutions along with commercial success of these solutions across existing and new customers. Our MI Profile and Caris Assure case volumes have continued to increase over time. Changes in our case volumes and the pricing of our solutions, however, are generally not impacted by the cancer type. For the three months ended September 30, 2025 and 2024, the number of clinical cases was 50,763 and 42,956, respectively. For the nine months ended September 30, 2025 and 2024, the number of clinical cases was 146,653 and 118,856, respectively. We commercially launched our MI Cancer Seek solution in January 2025 as the WES/WTS NGS component of MI Profile. We initiated the broad commercial launch of Caris Assure for therapy selection in the first quarter of 2024, and realizing the potential of Caris Assure across the cancer treatment continuum is a key component of our business strategy. The commercial success of Caris Assure will depend upon, among other things, additional clinical trials that demonstrate the effectiveness of Caris Assure, particularly for early detection, multi-cancer early detection (“MCED”), MRD tracking, and treatment monitoring, and the continued adoption of Caris Assure by patients, the medical community, and third-party payers. In addition, we expect that our ability to maintain and expand our sales, marketing, and distribution capabilities to support the increased adoption of our molecular profiling solutions will play a key factor in our success. • Biopharma partners. Our revenue also depends on our ability to maintain and expand relationships with our biopharma partners and attract new biopharma partners. As we continue to develop these relationships, we expect to support a growing number of projects and continue to have opportunities to offer our platform to such customers for development and research services. For the three months ended September 30, 2025 and the 37 Table of Contents nine months ended September 30, 2025, our year-over-year growth in pharma research and development services revenue has been 18% and 25%, respectively. • Development and introduction of new solutions. Our business success will also depend on our ability to develop and commercialize new solutions. We plan to continue to invest in the enhancement of our molecular profiling solutions, the development of new solutions to achieve meaningful innovation in precision oncology and other disease states, and the expansion of our clinico-genomic datasets to drive breakthrough science. We intend to expand the application of Caris Assure to early detection, MCED, MRD tracking, and treatment monitoring. Our ability to develop and commercialize new solutions and services could face many challenges that could impact our future performance and results of operations. Such challenges include, but are not limited to, obtaining regulatory approvals; completing certain clinical development activities, validation studies, and/or clinical trials; having guidelines or recommendations for healthcare providers, administrators, payers, and patient communities relating to such solutions; and receiving favorable exposure in peer-reviewed publications and from key opinion leaders (“KOLs”). • Payer coverage and reimbursements. Our revenue and future revenue growth will depend on our success in achieving broad coverage and adequate reimbursement for our solutions from third-party payers. Coverage and reimbursement by third-party payers, including managed care organizations, private health insurers, and government healthcare programs for the types of solutions we offer can be limited and uncertain and may depend on a number of factors, including a payer’s determination that a product is appropriate, medically necessary, and cost-effective. Each payer will make its own decision as to whether to establish a policy or enter into a contract to cover our products and the amount it will reimburse for such products. While the average selling prices (“ASPs”) for Caris Assure, MI Tumor Seek Hybrid and MI Cancer Seek reimbursed by a particular payer are determined by our arrangements with that payer and do not materially differ by cancer type, any fluctuation or differences in coverage and reimbursement among our third-party payers may impact our overall ASPs and gross margins. Moreover, if we are unable to obtain and/or maintain broad coverage and adequate reimbursement for our solutions from third-party payers, we may not be able to effectively increase our clinical case volume and our revenue would be impacted. • Scaling infrastructure to meet increasing demand. Our financial results are also dependent upon our ability to support current and future levels of demand for our solutions, including MI Profile and Caris Assure. As the volumes of our current and new molecular profiling solutions continue to grow, we will need to simultaneously increase our capacity for sample intake and storage, enhance our customer service, improve our billing and general processes, expand our internal quality assurance programs, incorporate new equipment, implement new technology systems and processes, expand laboratory capacity, and otherwise extend our operational capabilities to support comprehensive genomic analyses at a larger scale while retaining expected turnaround times. This may result in us purchasing additional equipment, constructing additional facilities, hiring additional qualified labor, and implementing new systems, technology, controls, and procedures. As such, our capital expenditures and cost of services may increase as we continue our efforts to expand capacity. In addition, revenue may be impacted in the event that we are not able to meet the increase in demand. Components of Results of Operations Revenue Revenue consists primarily of the following: Molecular Profiling Services Molecular profiling services revenue is generated from the provision of precision oncology solutions to ordering physicians utilizing MI Profile, MI Cancer Seek (NGS component of MI Profile), and Caris Assure. Revenue is recorded when performance obligations are satisfied, which is deemed to be when the results of the profiling services are provided to the ordering physicians, including certain hospitals, cancer centers, and institutions. Revenue is recorded at the amount that reflects the consideration to which we expect to be entitled from customers and third-party payers in exchange for providing such services. Pharma Research and Development Services Pharma research and development services revenue is generated from the provision of research and development services for biopharma partners utilizing our Caris platform. Given the nature of these services, each contract may contain multiple performance obligations, such as molecular profiling solutions, target discovery services, 38 Table of Contents and strategic data services. Each performance obligation is analyzed, and revenue is recognized as or when such performance obligations are satisfied. The timing and extent of revenue recognized may vary from contract to contract. Costs and Operating Expenses We allocate certain overhead expenses, such as rent, utilities, and depreciation to cost of services and operating expense categories based on headcount and facility usage. As a result, an overhead expense allocation is reflected in cost of services and operating expenses. Cost of Services - Molecular profiling services Cost of molecular profiling services generally consists of cost of materials, direct labor (including bonus and stock-based compensation), equipment maintenance and depreciation expenses associated with processing cases (including accessioning, sequencing, quality control analyses, and shipping charges to transport samples), and freight. Costs associated with completing the molecular profiling services are recorded as the service is performed, regardless of whether revenue is recognized with respect to the service. Cost of Services - Pharma research and development services Cost of services for pharma research and development services generally consists of costs incurred for the performance of the services requested by our biopharma partners related to research and development services. For the development of new products, costs incurred before technological feasibility has been achieved are reported as research and development expenses, while costs incurred thereafter are reported as cost of services. Cost of services for pharma research and development services will vary depending on the nature, timing, and scope of customer projects. We expect cost of services to increase in absolute dollars as our revenue grows. In the short term, increases to cost of services may outpace revenue growth as we invest in expanding our laboratory capacity and implementing new processes. However, over time, the cost per clinical case is expected to decrease due to economies of scale. Selling and Marketing Expense Our selling and marketing expense includes costs associated with our sales organization, including our direct sales force and sales management, marketing, and business development personnel. These expenses consist principally of salaries, incentive compensation, bonuses, employee benefits, travel, and stock-based compensation, as well as marketing and educational activities. We expense all selling and marketing expenses as incurred. We believe that our marketing activities continue to drive awareness and differentiate our existing solutions and future solutions. We expect our selling and marketing expenses to continue to increase in absolute dollars as we expand our sales force and continue to grow our presence within and outside of the United States. General and Administrative Expense Our general and administrative expense includes costs for our executive, accounting and finance, legal, information technology, billing, and human resources functions. These expenses consist principally of salaries, bonuses, employee benefits, travel, and stock-based compensation, as well as professional services fees (such as audit and tax consulting), general corporate costs, and allocated overhead expenses. While we expect our general and administrative expenses will increase in absolute dollars as we continue to invest in our growth and operate as a public company, we expect them to decline as a percentage of revenue over time as we scale our business and leverage our investments already made. We expect to incur additional expenses, primarily due to the additional costs of operating as a public company, which include additional legal, accounting, corporate governance, and investor relations expenses, as well as higher directors’ and officers’ insurance premiums. In addition, as a public company, we also expect to incur increased stock-based compensation expense related to our long-term equity incentive plan. Research and Development Expense Our research and development expense consists of costs incurred in performing research and development activities. These expenses include direct costs for salaries and benefits, supplies used in research and development, contract services and other outside costs, costs to acquire in-process research and development projects and technologies that have no alternative future use, and allocated overhead expenses. 39 Table of Contents We expect that our overall research and development expenses will vary from period to period as a percentage of revenue, as projects are initiated and completed. Other Income (Expense), Net Interest Income Interest income consists primarily of interest earned on our cash and cash equivalents and marketable securities. Interest Expense Interest expense consists primarily of contractual interest expense on our term loan, amortization of the debt discount related to our term loan and convertible notes, and interest expense on our finance leases. Changes in Fair Value of Financial Instruments Changes in fair value of financial instruments consists of changes in the fair value of the warrant liability and changes in the fair value of derivative liabilities. Our warrants are classified as a liability on our condensed consolidated balance sheets and re-measured to fair value at each balance sheet date with the corresponding changes in fair value recorded within changes in fair value of financial instruments. All warrants were exercised upon the closing of the IPO. Other Income (Expense), Net Other income (expense), net consists of items related to foreign currency gains and losses, debt extinguishment expense and additional immaterial items. Results of Operations The following table sets forth a summary of our results of operations for the periods presented: 40 Table of Contents (amounts in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenue: Molecular profiling services $ 207,587 $ 93,803 $ 484,593 $ 254,692 Pharma research and development services 9,246 7,817 34,554 27,653 Total revenue 216,833 101,620 519,147 282,345 Costs and operating expenses (1) : Cost of Services - Molecular profiling services 66,980 54,810 193,195 167,134 Cost of Services - Pharma research and development services 2,347 2,398 7,698 7,130 Selling and marketing expense 41,267 36,758 123,355 115,077 General and administrative expense 51,973 40,852 168,458 126,273 Research and development expense 21,624 27,644 69,739 86,807 Total costs and operating expenses 184,191 162,462 562,445 502,421 Income (Loss) from operations 32,642 (60,842) (43,298) (220,076) Other expense, net: Interest income 7,360 1,744 9,482 6,152 Interest expense (13,507) (13,799) (45,497) (36,763) Changes in fair value of financial instruments (2,081) 5,131 (52,285) 6,067 Other income (expense), net (89) 37 (18,447) (323) Total other expense, net (8,317) (6,887) (106,747) (24,867) Income (Loss) before income taxes and provision for income taxes 24,325 (67,729) (150,045) (244,943) Provision for income taxes — — — — Net income (loss) $ 24,325 $ (67,729) $ (150,045) $ (244,943) ____________________________ (1) Costs and operating expenses contains the following stock-based compensation expense: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (amounts in thousands) Cost of services - Molecular profiling services $ 1,104 $ 411 $ 2,452 $ 1,237 Cost of services - Pharma research and development services 17 3 20 6 Selling and marketing expense 3,322 1,092 6,554 3,177 General and administrative expense 6,410 2,148 39,438 6,147 Research and development expense 2,802 1,069 8,175 3,099 Total $ 13,655 $ 4,723 $ 56,639 $ 13,666 41 Table of Contents The following table sets forth our results of operations as a percentage of revenue for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenue: Molecular profiling services 96 % 92 % 93 % 90 % Pharma research and development services 4 % 8 % 7 % 10 % Total revenue 100 % 100 % 100 % 100 % Costs and operating expenses: Cost of Services - Molecular profiling services 31 % 54 % 37 % 59 % Cost of Services - Pharma research and development services 1 % 2 % 1 % 3 % Selling and marketing expense 19 % 36 % 24 % 41 % General and administrative expense 24 % 40 % 32 % 45 % Research and development expense 10 % 27 % 13 % 31 % Total costs and operating expenses 85 % 160 % 108 % 178 % Income (Loss) from operations 15 % (60) % (8) % (78) % Other expense, net: Interest income 3 % 2 % 2 % 2 % Interest expense (6) % (14) % (9) % (13) % Changes in fair value of financial instruments (1) % 5 % (10) % 2 % Other income (expense), net — % — % (4) % — % Total other expense, net (4) % (7) % (21) % (9) % Income (Loss) before income taxes and provision for income taxes 11 % (67) % (29) % (87) % Provision for income taxes — % — % — % — % Net income (loss) 11 % (67) % (29) % (87) % Comparison of the Three Months Ended September 30, 2025 and 2024 Revenue Three Months Ended September 30, Change 2025 2024 $ % (amounts in thousands) Molecular profiling services $ 207,587 $ 93,803 $ 113,784 121.3 % Pharma research and development services 9,246 7,817 1,429 18.3 % Total revenue $ 216,833 $ 101,620 $ 115,213 113.4 % Total revenue was $216.8 million for the three months ended September 30, 2025, compared to $101.6 million for the three months ended September 30, 2024, an increase of $115.2 million, or 113.4%. Molecular Profiling Services Revenue Molecular profiling services revenue increased to $207.6 million for the three months ended September 30, 2025, from $93.8 million for the three months ended September 30, 2024, an increase of $113.8 million, or 121.3%. This increase in revenue was primarily due to the increase in ASP of our MI Profile solution, driven by the launch of MI Cancer Seek and associated higher reimbursement, as well as the increase in clinical cases associated with MI Profile and Caris Assure for therapy selection from 38,409 and 4,547 cases, respectively, for the three months ended 42 Table of Contents September 30, 2024, to 43,226 and 7,537 cases, respectively, for the three months ended September 30, 2025, a total increase of 7,807 cases, or 18.2%. We believe the growth in MI Profile clinical case volume is driven by increased market acceptance and adoption of MI Profile by ordering physicians year over year, and increased market acceptance and adoption of Caris Assure following its broad commercial launch in the first quarter of 2024. Revenue from clinical cases for patients covered by Medicare represented approximately 39.4% and 38.6% of our molecular profiling services revenue for the three months ended September 30, 2025 and 2024, respectively, due to mix. The following table sets forth the relative impacts of clinical volume and ASP on our increase in molecular profiling services revenue. (In thousands) Molecular profiling services revenue for the three months ended September 30, 2024 $ 93,803 MI Profile volume increase 10,796 MI Profile ASP increase due to solution and payer mix 87,836 Caris Assure for therapy selection volume and ASP increase 15,152 Molecular profiling services revenue for the three months ended September 30, 2025 $ 207,587 Pharma Research and Development Services Revenue Pharma research and development services revenue increased to $9.2 million for the three months ended September 30, 2025, from $7.8 million for the three months ended September 30, 2024, an increase of $1.4 million, or 18.3%. The increase is mainly driven by increased deal activities in the strategic data pillar. Cost of Services Three Months Ended September 30, Change 2025 2024 $ % (amounts in thousands) Cost of services - Molecular profiling services $ 66,980 $ 54,810 $ 12,170 22.2 % Cost of services - Pharma research and development services $ 2,347 $ 2,398 $ (51) (2.1) % Cost of Services - Molecular Profiling Services Cost of services - Molecular profiling serv ices was $67.0 million for the three months ended September 30, 2025, compared to $54.8 million for the three months ended September 30, 2024, an increase of $12.2 million, or 22.2%. The Caris Assure laboratory contributed to the majority of the increase. The Caris Assure increase was primarily driven by an increase in materials and related testing costs of $6.8 million, $1.3 million increase in utilities, rent, and allocated overhead, and an increase in labor costs of $1.0 million, due to the increased volume. Cost of Services - Pharma Research and Development Services Cost of services - Pharma research and development services was $2.3 million for the three months ended September 30, 2025, compared to $2.4 million for the three months ended September 30, 2024, a decrease of $0.1 million, or 2.1%. The decrease was driven primarily by a decrease within costs associated with the research services of $0.1 million. Gross Profit Gross profit, calculated as total revenue less cost of services, was $147.5 million for the three months ended September 30, 2025, compared to $44.4 million for the three months ended September 30, 2024, an increase of $103.1 million, or 232.1%, primarily due to the increase in molecular profiling services revenue. 43 Table of Contents Selling and Marketing Expense Three Months Ended September 30, Change 2025 2024 $ % (amounts in thousands) Selling and marketing expense $ 41,267 $ 36,758 $ 4,509 12.3 % Selling and marketing expenses were $41.3 million for the three months ended September 30, 2025, compared to $36.8 million for the three months ended September 30, 2024, an increase of $4.5 million, or 12.3%. This increase was primarily due to a $2.9 million increase in personnel costs to support existing solutions, and a $1.3 million increase in professional services and travel and marketing expenses. General and Administrative Expense Three Months Ended September 30, Change 2025 2024 $ % (amounts in thousands) General and administrative expense $ 51,973 $ 40,852 $ 11,121 27.2 % General and administrative expenses were $52.0 million for the three months ended September 30, 2025, compared to $40.9 million for the three months ended September 30, 2024, an increase of $11.1 million, or 27.2%. This increase was primarily due to an increase of $4.3 million in stock-based compensation expense, a $3.9 million increase in labor costs and benefits associated with an expansion of personnel, a $4.1 million increase in consulting, audit and legal professional fees, a $0.8 million increase in insurance expenses, and a $0.8 million increase in travel expenses, offset by a $2.6 million decrease in depreciation expense. Research and Development Expense Three Months Ended September 30, Change 2025 2024 $ % (amounts in thousands) Research and development expense $ 21,624 $ 27,644 $ (6,020) (21.8) % Research and development expenses were $21.6 million for the three months ended September 30, 2025, compared to $27.6 million for the three months ended September 30, 2024, a decrease of $6.0 million, or 21.8%. The decrease was primarily driven by a reduction of $6.2 million in material and reference testing costs associated with the development of Caris Assure and FDA submission of MI Cancer Seek, and a $0.6 million reduction in allocated overhead, offset by an increase of $1.4 million in labor costs, benefits and stock-based compensation. Other Income (Expense), Net Three Months Ended September 30, Change 2025 2024 $ % (amounts in thousands) Interest income $ 7,360 $ 1,744 $ 5,616 322.0 % Interest expense (13,507) (13,799) 292 (2.1) % Changes in fair value of financial instruments (2,081) 5,131 (7,212) (140.6) % Other income (expense), net (89) 37 (126) (340.5) % Total other income (expense), net $ (8,317) $ (6,887) $ (1,430) 20.8 % 44 Table of Contents Interest Income Interest income was $7.4 million for the three months ended September 30, 2025, compared to $1.7 million for the three months ended September 30, 2024, an increase of $5.6 million, or 322.0%. This increase was primarily due to a higher amount of cash earning interest in our bank accounts.. Interest Expense Interest expense was $13.5 million for the three months ended September 30, 2025, compared to $13.8 million for the three months ended September 30, 2024, a decrease of $0.3 million, or 2.1%. This decrease was primarily due to lower interest rate associated with the 2023 Term Loan. Changes in Fair Value of Financial Instruments Changes in fair value of financial instruments were $(2.1) million for the three months ended September 30, 2025, compared to $5.1 million for the three months ended September 30, 2024, a decrease of $7.2 million, or 140.6%. Other Income (Expense), Net Other income (expense), net was $(0.1) million for the three months ended September 30, 2025, compared to $0.0 million for the three months ended September 30, 2024, a decrease of $0.1 million, or 340.5%. This decrease was primarily due to changes in gains and losses from foreign exchange rate differences. Comparison of the Nine Months Ended September 30, 2025 and 2024 Revenue Nine Months Ended September 30, Change 2025 2024 $ % (amounts in thousands) Molecular profiling services $ 484,593 $ 254,692 $ 229,901 90.3 % Pharma research and development services 34,554 27,653 6,901 25.0 % Total revenue $ 519,147 $ 282,345 $ 236,802 83.9 % Total revenue was $519.1 million for the nine months ended September 30, 2025, compared to $282.3 million for the nine months ended September 30, 2024, an increase of $236.8 million, or 83.9%. Molecular Profiling Services Revenue Molecular profiling services revenue increased to $484.6 million for the nine months ended September 30, 2025, from $254.7 million for the nine months ended September 30, 2024, an increase of $229.9 million, or 90.3%. This increase in revenue was primarily due to the increase in ASP of our MI Profile solution, driven by the launch of MI Cancer Seek and associated higher reimbursement, as well as the increase in clinical cases associated with MI Profile and Caris Assure for therapy selection from 107,930 and 10,926 cases, respectively, for the nine months ended September 30, 2024, to 126,160 and 20,493 cases, respectively, for the nine months ended September 30, 2025, a total increase of 27,797 cases, or 23.4%. We believe the growth in MI Profile clinical case volume is driven by increased market acceptance and adoption of MI Profile by ordering physicians year over year, and increased market acceptance and adoption of Caris Assure following its broad commercial launch in the first quarter of 2024. Revenue from clinical cases for patients covered by Medicare represented approximately 46.4% and 39.7% of our molecular profiling services revenue for the nine months ended September 30, 2025 and 2024, respectively. 45 Table of Contents The following table sets forth the relative impacts of clinical volume and ASP on our increase in molecular profiling services revenue. (amounts in thousands) Molecular profiling services revenue for the nine months ended September 30, 2024 $ 254,692 MI Profile volume increase 39,946 MI Profile ASP increase due to solution and payer mix 153,811 Caris Assure for therapy selection volume and ASP increase 36,144 Molecular profiling services revenue for the nine months ended September 30, 2025 $ 484,593 Pharma Research and Development Services Revenue Pharma research and development services revenue increased to $34.6 million for the nine months ended September 30, 2025, from $27.7 million for the nine months ended September 30, 2024, an increase of $6.9 million, or 25.0%. The increase is mainly driven by increased deal activities in the strategic data pillar. Cost of Services Nine Months Ended September 30, Change 2025 2024 $ % (amounts in thousands) Cost of services - Molecular profiling services $ 193,195 $ 167,134 $ 26,061 15.6 % Cost of services - Pharma research and development services $ 7,698 $ 7,130 $ 568 8.0 % Cost of Services - Molecular Profiling Services Cost of services - Molecular profiling serv ices was $193.2 million for the nine months ended September 30, 2025, compared to $167.1 million for the nine months ended September 30, 2024, an increase of $26.1 million, or 15.6%. The Caris Assure laboratory contributed $20.9 million of the increase. The Caris Assure increase was primarily driven by an increase in materials and related testing costs of $14.8 million, $3.5 million increase in utilities, rent, and allocated overhead, and an increase in labor costs of $2.7 million, due to the increased volume from broad launch in the first quarter of 2024. Cost of Services - Pharma Research and Development Services Cost of services - Pharma research and development services was $7.7 million for the nine months ended September 30, 2025, compared to $7.1 million for the nine months ended September 30, 2024, an increase of $0.6 million, or 8.0%. The increase was driven primarily by an increase in utilities of $0.5 million. Gross Profit Gross profit, calculated as total revenue less cost of services, was $318.3 million for the nine months ended September 30, 2025, compared to $108.1 million for the nine months ended September 30, 2024, an increase of $210.2 million, or 194.5%, primarily due to the increase in molecular profiling services revenue. Selling and Marketing Expense Nine Months Ended September 30, Change 2025 2024 $ % (amounts in thousands) Selling and marketing expense $ 123,355 $ 115,077 $ 8,278 7.2 % 46 Table of Contents Selling and marketing expenses were $123.4 million for the nine months ended September 30, 2025, compared to $115.1 million for the nine months ended September 30, 2024, an increase of $8.3 million, or 7.2%. This increase was primarily due to a $8.0 million increase in personnel costs to support existing solutions and a $0.7 million increase in professional services, offset by a $0.8 million decrease in travel and marketing expenses. General and Administrative Expense Nine Months Ended September 30, Change 2025 2024 $ % (amounts in thousands) General and administrative expense $ 168,458 $ 126,273 $ 42,185 33.4 % General and administrative expenses were $168.5 million for the nine months ended September 30, 2025, compared to $126.3 million for the nine months ended September 30, 2024, an increase of $42.2 million, or 33.4%. This increase was primarily due to an increase of $33.3 million in stock-based compensation, primarily driven by expense from awards with an IPO-related vesting condition, an $8.9 million increase in labor costs and benefits associated with an expansion of personnel, a $6.2 million increase in consulting, audit and legal professional fees, a $2.3 million increase related to utilities and cloud computing usages, a $0.9 million increase in insurance expenses, and a $2.6 million increase in travel expenses, offset by an $11.9 million decrease in depreciation expense. Research and Development Expense Nine Months Ended September 30, Change 2025 2024 $ % (amounts in thousands) Research and development expense $ 69,739 $ 86,807 $ (17,068) (19.7) % Research and development expenses were $69.7 million for the nine months ended September 30, 2025, compared to $86.8 million for the nine months ended September 30, 2024, a decrease of $17.1 million, or 19.7%. The decrease was primarily driven by a reduction of $18.4 million in material and reference testing costs associated with the development of Caris Assure and FDA submission of MI Cancer Seek, a reduction of $0.6 million in labor costs and benefits, and a $1.4 million reduction in allocated overhead, offset by a $4.1 million increase in labor costs, benefits, and stock-based compensation primarily from awards with an IPO-related vesting condition. Other Income (Expense), Net Nine Months Ended September 30, Change 2025 2024 $ % (amounts in thousands) Interest income $ 9,482 $ 6,152 $ 3,330 54.1 % Interest expense (45,497) (36,763) (8,734) 23.8 % Changes in fair value of financial instruments (52,285) 6,067 (58,352) (961.8) % Other expense, net (18,447) (323) (18,124) 5,616.7 % Total other income (expense), net $ (106,747) $ (24,867) $ (81,880) 329.3 % Interest Income Interest income was $9.5 million for the nine months ended September 30, 2025, compared to $6.2 million for the nine months ended September 30, 2024, an increase of $3.3 million, or 54.1%. This increase was primarily due to higher amounts of cash earning interest in our bank accounts. 47 Table of Contents Interest Expense Interest expense was $45.5 million for the nine months ended September 30, 2025, compared to $36.8 million for the nine months ended September 30, 2024, an increase of $8.7 million, or 23.8%. This increase was primarily due to increased interest expense associated with $200.0 million of additional borrowing under the 2023 Term Loan, which was drawn on March 5, 2024, and increased amortization of debt discount associated with the 2025 Convertible Notes. Changes in Fair Value of Financial Instruments Changes in fair value of financial instruments were $(52.3) million for the nine months ended September 30, 2025, compared to $6.1 million for the nine months ended September 30, 2024, a decrease of $58.4 million, or 961.8%. Other Expense, Net Other expense, net was $18.4 million for the nine months ended September 30, 2025, compared to $0.3 million for the nine months ended September 30, 2024, an increase of $18.1 million, or 5,616.7%. This increase was primarily due to the debt extinguishment expense of the 2025 Convertible Notes recorded of $17.9 million upon the IPO, during the nine months ended September 30, 2025. Non-GAAP Financial Measures We use certain non-GAAP financial measures to supplement our condensed consolidated financial statements, which are presented in accordance with GAAP. We believe the non-GAAP financial measures we use, Adjusted EBITDA and free cash flow, are useful in evaluating our performance and liquidity. Our non-GAAP financial measures have limitations as analytical tools, however, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Adjusted EBITDA We define Adjusted EBITDA as net loss, adjusted to exclude interest income, interest expense, changes in fair value of financial instruments, other expense, net, the provision for (benefit from) income taxes, depreciation and amortization, and stock-based compensation expense. We use Adjusted EBITDA in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors. In addition, it provides a useful measure for period-to-period comparisons of our business, as it removes the effect of certain non-cash expenses and certain variable charges. Some of the limitations related to the use of Adjusted EBITDA as an analytical tool include: • it does not reflect interest income, interest expense or other non-operating gains and losses, which may represent an increase to or reduction in cash available to us; • it does not reflect recurring, non-cash expenses of depreciation of property and equipment and amortization of right-of-use assets and intangible assets, and although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future; • it does not reflect the impact of stock-based compensation expense, which has been, and will continue to be a part of our compensation strategy; and • it may be calculated differently than similarly titled measures used by other companies, which reduces its usefulness as a comparative measure. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net loss and our other GAAP results. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as, or similar to, some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed to imply that our future results will be unaffected by the types of items excluded from the calculation of Adjusted EBITDA. 48 Table of Contents The following table provides a reconciliation of net income (loss), the most directly comparable financial measure presented in accordance with GAAP, to Adjusted EBITDA for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (amounts in thousands) Net income (loss) $ 24,325 $ (67,729) $ (150,045) $ (244,943) Interest income (7,360) (1,744) (9,482) (6,152) Interest expense 13,507 13,799 45,497 36,763 Changes in fair value of financial instruments 2,081 (5,131) 52,285 (6,067) Other income (expense), net 89 (37) 18,447 323 Provision for income taxes — — — — Depreciation and amortization expense 4,870 10,532 18,324 39,847 Stock-based compensation expense 13,655 4,723 56,639 13,666 Adjusted EBITDA $ 51,167 $ (45,587) $ 31,665 $ (166,563) Free Cash Flow We define free cash flow as net cash used in operating activities less purchases of property and equipment. We believe free cash flow is a useful measure of liquidity that provides an additional basis for assessing our ability to generate cash. Some of the limitations related to the use of free cash flow as an analytical tool include: • it does not reflect our future contractual commitments; • it does not represent our total residual cash flow for a given period; and • it may be calculated differently than similarly titled measures used by other companies, which reduces its usefulness as a comparative measure. Because of these limitations, you should consider free cash flow alongside other financial performance measures, including net cash used in operating activities, capital expenditures, and our other GAAP results. The following table provides a reconciliation of net cash used in operating activities, the most directly comparable financial measure presented in accordance with GAAP, to free cash flow for the periods presented: Nine Months Ended September 30, 2025 2024 (amounts in thousands) Net cash provided by (used in) operating activities $ 38,375 $ (206,278) Less: purchases of property and equipment (11,170) (6,154) Free cash flow $ 27,205 $ (212,432) Liquidity and Capital Resources Sources of Liquidity In the aggregate, we have incurred net losses and negative cash flows from operations since inception. We may incur net losses in the near future, and our expenses will increase as we continue to invest in developing new solutions, expand our organization, and increase our marketing efforts to continue to drive market adoption of our solutions. As of September 30, 2025, we had an accumulated deficit of $2.6 billion. To date, we have funded our operations principally from the issuance of stock in private financings, issuance of common stock through our IPO, term loan borrowings and convertible debt, and through revenue from molecular profiling and pharma research and development services. As of September 30, 2025, we had cash and cash equivalents of $753.2 million and short-term marketable securities of $2.3 million. We believe our existing cash and cash equivalents, 49 Table of Contents which includes the net proceeds from our Pre-IPO Financing (as defined below) and the IPO, short-term marketable securities, and anticipated cash flows from operations will provide sufficient capital and liquidity to fund our operating expenses and capital expenditure requirements for at least the next 12 months. We may, however, continue to require additional capital to meet our operational needs. See “—Indebtedness” and “—Cash Requirements” below for additional information regarding our cash requirements and various factors that may impact our liquidity and capital resources. Cash Flows The following table summarizes our cash flows for the periods presented: Nine Months Ended September 30, 2025 2024 (amounts in thousands) Net cash provided by (used in) operating activities $ 38,375 $ (206,278) Net cash provided by (used in) investing activities $ (11,170) $ 55,222 Net cash provided by financing activities $ 661,590 $ 200,066 Operating Activities Net cash used in operating activities during the nine months ended September 30, 2025 was $38.4 million, which was due to a net change in our operating assets and liabilities of $26.0 million and net non-cash charges of $162.5 million, offset by a net loss of $150.0 million. The net change in our operating assets and liabilities was primarily the result of a $61.2 million decrease in accounts receivable, offset by a $11.1 million increase in supplies, a $1.2 million decrease in accounts payable, a $4.8 million increase in prepaid expenses and other current assets, and a $17.8 million decrease in accrued expenses and other liabilities. Net non-cash charges primarily consisted of $18.3 million of depreciation and amortization expense, $56.6 million of stock-based compensation expense (including $19.5 million of stock-based compensation expense associated with RSUs vested upon the IPO), $4.3 million of non-cash operating lease expense, $12.2 million in amortization of debt discount costs, a $52.3 million loss within changes in the fair value of financial instruments associated with our IPO, and a $17.9 million loss on debt extinguishment associated with our IPO. Net cash used in operating activities during the nine months ended September 30, 2024 was $206.3 million, which was primarily due to a net loss of $244.9 million and a net change in our operating assets and liabilities of $22.1 million, offset by net non-cash charges of $60.8 million. The net change in our operating assets and liabilities was primarily the result of a $15.0 million increase in accounts receivable, a $14.0 million decrease in accrued expenses and other liabilities, and a $2.2 million increase in prepaid expenses and other current assets, offset by a $5.1 million increase in accounts payable and a $4.2 million decrease in supplies. Net non-cash charges primarily consisted of $39.8 million of depreciation and amortization expense, $13.7 million of stock-based compensation expense, $4.2 million of non-cash operating lease expense, and $5.1 million in amortization of debt discount costs, offset by a $6.1 million gain within changes in the fair value of financial instruments. Investing Activities Net cash used in investing activities during the nine months ended September 30, 2025 was $11.2 million, which was due to purchases of property and equipment of $11.2 million. Net cash provided by investing activities during the nine months ended September 30, 2024 was $55.2 million, which was due to maturities of marketable securities of $61.4 million, offset by purchases of property and equipment of $6.2 million. Financing Activities Net cash provided by financing activities during the nine months ended September 30, 2025 was $661.6 million, which was primarily due to proceeds from the IPO, net of underwriting discounts and commissions, of $528.5 million, offset by the payment of taxes withheld from net settlement of exercised options of exercised options of $18.2 million, payment of deferred offering costs of $7.7 million, and payments from debt modification of $4.0 million, issuance of Series E Preferred Stock, net of issuance costs, of $87.6 million, issuance of Series F Preferred Stock, net of issuance costs, 50 Table of Contents of $33.6 million, issuance of convertible notes, net of issuance costs, of $27.9 million, issuance of warrants of $10.3 million, and exercises of stock options of $3.8 million. Net cash provided by financing activities during the nine months ended September 30, 2024 was $200.1 million, which was primarily due to proceeds from issuance of additional borrowings under the 2023 Term Loan Agreement on March 5, 2024, net of issuance costs, of $200.0 million, proceeds from exercises of stock options of $1.3 million, offset by the payment of deferred offering costs of $1.0 million. Indebtedness In January 2023, we entered into a term loan agreement, as amended with OrbiMed Royalty & Credit Opportunities III, LP, OrbiMed Royalty & Credit Opportunities IV, LP, and Braidwell Transaction Holdings LLC (the “Lenders”), pursuant to which we issued senior, secured promissory notes and the Lenders agreed to lend us up to an aggregate principal amount of $400.0 million, $200.0 million of which was drawn down upon issuance of the notes. Net cash proceeds to us were $189.0 million, after deducting customary debt discounts and debt issuance costs. The net proceeds were used to repay in full our then-outstanding term loans, including an aggregate principal amount of $175.0 million, a prepayment premium of $5.0 million, and accrued and unpaid interest of $1.0 million. In March 2024, we drew down the remaining $200.0 million under the 2023 Term Loan Agreement. As of September 30, 2025, we had $400.0 million of borrowings outstanding under the 2023 Term Loan Agreement. The aggregate principal amount outstanding under the 2023 Term Loan Agreement is due and payable on January 18, 2028. If an event of default occurs and is continuing, the lenders may declare all amounts outstanding under the 2023 Term Loan Agreement to be immediately due and payable. A final payment exit fee equal to 1.0% of the amount funded under the 2023 Term Loan Agreement is due upon prepayment or maturity. Amounts borrowed pursuant to the 2023 Term Loan Agreement may be prepaid at any time. Upon prepayment, we may be subject to a prepayment penalty based on the timing of repayment. The aggregate principal amount under the 2023 Term Loan Agreement bears interest at a rate per annum equal to a fixed margin of 6.5% plus the greater of (a) forward-looking three-month secured overnight financing rate (“SOFR”) and (b) 2.5%. In the event of default, the fixed margin shall increase by 3.0% per annum. As of September 30, 2025, the interest rate was 10.8%. Regular quarterly payments are interest-only for the 60-month term of the 2023 Term Loan Agreement, with the principal due at maturity. The effective interest rate for the term loan is 12.3%. Our obligations under the 2023 Term Loan Agreement are secured by a first lien security interest in substantially all of our assets and our subsidiaries’ assets. The 2023 Term Loan Agreement contains certain customary representations and warranties, affirmative and negative covenants, financial covenants, and events of default applicable to us and our subsidiaries. Additional covenants include those restricting dispositions, fundamental changes to our business, mergers or acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates, and subordinated debt. As of September 30, 2025, we were in compliance with all covenants under the 2023 Term Loan Agreement. On April 1, 2025, the Company closed a private financing in which it issued a combination of senior convertible notes (the “2025 Convertible Notes”), Series E Preferred Stock and Series F Preferred Stock, for an aggregate of $167.7 million. The 2025 Convertible Notes were issued in an aggregate principal amount of $30.0 million. The 2025 Convertible Notes accrued interest at a rate of 8% per annum, payable quarterly in cash, and were to mature on January 1, 2026 unless earlier converted. In connection with this financing, the Company also issued warrants to acquire shares of common stock to the holders of the 2025 Convertible Notes. These warrants were not initially exercisable for any shares of common stock, but such warrants became exercisable for a specified dollar value of shares on a monthly basis commencing on June 1, 2025 if we had not completed an initial public offering by such date. Any exercisable portion of the warrants were automatically exercised prior to the closing of the IPO and such warrants terminated upon the closing of the IPO. Cash Requirements Our primary use of cash is to fund operating expenses and capital expenditures (including leases of equipment and buildings), which consist of research and development expenditures, general and administrative expenditures, clinical and regulatory expenditures, purchases of testing equipment, and build out of our laboratories. Cash used to fund such activities is impacted by the timing of when we pay or prepay these expenses. We will continue to require additional capital to fund our operations and to continue to fund investments in the development and marketing of our solutions for the foreseeable future. We may need or determine to raise additional 51 Table of Contents capital through private or public equity or debt financings, through collaborative or other arrangements with corporate sources, or through other sources of financing. Requirements for additional capital will depend on many factors, including: • the scope, timing, rate of progress and costs of our research efforts, preclinical development activities, laboratory testing, and clinical trials for our solutions; • the number and scope of clinical programs we decide to pursue; • the cost, timing, and outcome of preparing for and undergoing regulatory review of our solutions; • the scope and costs of development and commercial manufacturing activities; • the cost and timing associated with commercializing our solutions if they receive marketing approval; • the extent to which we acquire or in-license other complementary solutions or technologies; • the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending intellectual property-related claims; • our ability to establish and maintain collaborations on favorable terms, if at all; • our efforts to enhance operational systems and our ability to attract, hire, and retain qualified personnel; • our success in achieving broad coverage and adequate reimbursement for our solutions from third-party payers; • our implementation of operational, financial, and management systems; and • the costs associated with being a public company. A change in the outcome of any of these or other variables with respect to the development and commercialization of any of our solutions could significantly change the costs and timing associated with such development and commercialization. Furthermore, our operating plans may change in the future, and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating plans. Critical Accounting Policies and Estimates Our condensed consolidated financial statements have been prepared in conformity with GAAP. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”). The preparation of the condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. While our significant accounting policies are described in Note 2 to our condensed consolidated financial statements, we believe that the following critical accounting policies are most important to understanding and evaluating our reported financial results. Revenue We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 provides a five-step framework through which revenue is recognized when control of promised goods or services is transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract(s); (iii) determine the transaction price, including whether there are any constraints on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. At contract inception, once a contract is determined to be within the scope of ASC 606, we assess whether individual goods or services promised within each contract are distinct and, therefore, represent separate performance obligations. Molecular Profiling Services We recognize revenue from our molecular profiling services at the time when the results of the profiling services are delivered to ordering physicians, including certain hospitals, cancer centers, and institutions. We identify each sale of our profiling case as a single performance obligation. We estimate the transaction price based on our historical collection experience using a portfolio approach for third-party payers and patients with similar reimbursement characteristics. This includes analysis of an average reimbursement per case per portfolio and a percentage of cases reimbursed by considering the historical reimbursement data (including any refunds and recoupments) from such third-party payers and 52 Table of Contents patients, current contractual and statutory requirements, patient insurance eligibility and payer reimbursement contracts, and any known or current or anticipated reimbursement trends not reflected in the historical data. We monitor the estimated amount to be collected in the portfolio at each reporting period. Subsequent changes to the estimate of the transaction price are generally recorded as adjustments to molecular profiling services in the period of change. Pharma Research and Development Services Contracts with biopharma partners may include multiple distinct performance obligations, such as provision of molecular profiling services, pharma research and development services, and strategic data services. For each of our contracts with biopharma partners, we evaluate the terms and conditions to identify distinct performance obligations. For each performance obligation determined, based on when and how it is delivered, we recognize revenue either when or as such obligation is delivered. Under contracts that include a performance obligation to provide molecular profiling services, to facilitate the development and regulatory approval of drugs, or to provide target discovery services, we receive payments upon the achievement of milestones, as well as provision of on-going support. We recognize pharma research and development services revenue over the period in which pharma research and development services are provided. Depending on the nature of the service, we recognize revenue using either the output or input method to measure progress, whichever provides a more faithful depiction of the transfer of goods or services. Use of an output method or input method to depict the transfer of services generally does not result in a material difference with respect to the timing of revenue recognition because most services commence and end within the same reporting period. We determine the transaction price of each performance obligation by considering the historical selling price of similar transactions, where applicable, as well as other factors, including, but not limited to, the price that customers in the market would be willing to pay, competitive pricing of our competitors, industry publications, and current pricing practices. Stock-Based Compensation We have granted stock-based awards consisting primarily of stock options and RSUs to employees, consultants, and members of our board of directors. We account for stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation . Stock-based compensation expense is measured based on the fair value of the awards as of the grant date and is recognized as expense over the requisite service period, which is generally the vesting period. The fair value of stock option awards as of the date of the grant was estimated by applying the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions, which determine the fair value of stock-based awards. These assumptions include the following: • Fair value per share of the underlying stock. Prior to our common stock being publicly traded, the fair value of the common stock underlying our stock options was determined by our compensation committee, with input from management and valuation reports prepared by third-party valuation specialists. • Expected price volatility. Prior to our common stock being publicly traded, the expected price volatility for our stock options was determined by using an average of historical volatilities of selected industry peers deemed to be comparable to our business and corresponding to the expected term of the awards. • Risk-free interest rate. The risk-free interest rate was based on the U.S. treasury yield curve in effect at the time of grant for U.S. treasury notes with maturities corresponding to the expected term of the awards. • Expected term. The expected term of stock options represented the period of time over which the options granted were expected to remain outstanding and was based on our estimate, taking into consideration vesting terms, contractual terms, and historical actual lives. Options granted have a maximum term of 10 years. Due to the lack of historical option exercise data, we utilized the simplified method for determining the expected term. • Expected dividend rate. We have never declared or paid any cash dividends, and we do not intend to pay any cash dividends in the foreseeable future. Therefore, we use an expected dividend yield of zero percent. • Expected forfeitures. Forfeitures are estimated at the time of grant and reduce compensation expense ratably over the vesting period. This estimate is based on historical forfeitures and is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate. We will continue to use judgment in evaluating the assumptions related to our stock-based compensation on a prospective basis. As we continue to accumulate additional data related to our common stock, we may refine our estimation process, which could materially impact our future stock-based compensation expense. 53 Table of Contents Emerging Growth Company Status The JOBS Act permits an “emerging growth company” such as us to delay the adoption of new or revised accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period for complying with new or revised accounting standards and, as a result, our results of operations and financial statements may not be comparable to those of companies that have adopted the new or revised accounting standards. We will remain an emerging growth company until the earliest to occur of: (1) the last day of the fiscal year in which we have at least $1.235 billion in total annual gross revenue; (2) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700 million as of the last business day of the second fiscal quarter of such year; (3) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period; and (4) the last day of the fiscal year ending after the fifth anniversary of the date of the completion of the IPO ( i.e. the fiscal year ending December 31, 2030). Recent Accounting Pronouncements See Note 2 of our condensed consolidated financial statements for more information regarding recently issued accounting pronouncements. Item 3. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk The market risk inherent in our financial instruments and in our financial position represents the potential loss arising from adverse changes in interest rates. As of September 30, 2025, we had cash, cash equivalents, and restricted cash of $757.0 million, and short-term marketable securities of $2.3 million, consisting of interest-bearing money market accounts, for which the fair market value would be affected by changes in the general level of United States interest rates. However, due to the short-term maturities and the low-risk profile of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our cash and investments. Our borrowings under the 2023 Term Loan Agreement also subject us to market risk associated with movements in interest rates associated with forward-looking three-month SOFR. We had $400.0 million in variable rate debt outstanding as of September 30, 2025. A hypothetical 100 basis point adverse movement in the interest rate would increase our annual interest expense by $4.0 million. We hedge interest rate risk on $200.0 million of this variable rate debt with a purchased interest rate cap derivative that has a strike rate of 6.0%, with a February 2026 maturity. We did not receive any settlement payments from the counterparty to the interest rate cap for the year ended December 31, 2024 or the nine months ended September 30, 2025. Foreign Currency Risk Substantially all of our revenue is generated in the United States, and we do not believe we are currently subject to significant foreign currency risk. To date, foreign currency transaction gains and losses have not had a material impact on our operations, and we have not engaged in any foreign currency hedging transactions. As we expand our presence in the international market, our results of operations and cash flows are expected to increasingly be subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. We will continue to reassess our approach to manage risk relating to fluctuations in currency rates as our international operations grow. Inflation Risk We do not believe that inflation has had a material effect on our business, financial condition or results of operations, other than its impact on the general economy, which includes labor costs. Nonetheless, if our costs, in particular personnel-related costs, continue to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations. 54 Table of Contents Item 4. Controls and Procedures Limitations on Effectiveness of Controls and Procedures In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our principal executive officer and principal financial officer have concluded that these disclosure controls and procedures were not effective at the reasonable assurance level as of September 30, 2025 due to the previously reported material weakness in our internal control over financial reporting pertaining to a lack of sufficient qualified accounting resources, including those with technical expertise necessary to account for and disclose accounting transactions which require complex calculations or thorough evaluation of the accounting literature. Notwithstanding the material weakness in our internal controls over financial reporting as of September 30, 2025, management has concluded that the condensed consolidated financial statements included in this Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States. Changes in Internal Control over Financial Reporting During the quarter ended September 30, 2025, we continued our remediation efforts in connection with the identification of the material weakness discussed above. These remediation steps are ongoing and include the following: • implementation of controls to enhance our review of significant accounting transactions and other new technical accounting and financial reporting issues and the preparation and review of accounting memoranda addressing these issues; • implementation of controls to enable an effective and timely review of account analyses and account reconciliations; and • continued hiring of additional accounting and finance resources with public company experience and expanding the capabilities of the existing accounting and financial personnel through continuous training and education in the accounting and reporting requirements under GAAP and SEC rules and regulations While we took certain actions to remediate the material weakness, such remediation has not been fully evidenced. Accordingly, we continue to test our controls to assess whether our controls are operating effectively. We will not be able to conclude whether the steps we are taking will fully remediate these material weakness in our internal control over financial reporting until we have completed our remediation efforts and subsequent evaluation of their effectiveness. We may also conclude that additional measures may be required to remediate the material weaknesses in our internal control over financial reporting, which may necessitate additional implementation and evaluation time. Other than the foregoing actions to remediate our material weakness, there was no change in our internal control over financial reporting identified during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 55 Table of Contents Part II - Other Information Item 1. Legal Proceedings In March 2025, the Company received a Civil Investigative Demand (“CID”) from the U.S. Department of Justice in connection with an investigation under the False Claims Act (“FCA”) regarding the Company’s compliance with Medicare’s date of service rule (also referred to as the 14-day rule), particularly focused on patients of certain health care providers, and our policies, procedures, and training related to compliance with the 14-day rule. The related investigation continues to evolve and is in too early a stage to assess potential outcomes. The Company is cooperating with the investigation. We have implemented compliance policies, procedures, and training designed to foster compliance with the 14-day rule, but there can be no certainties regarding the outcome of this CID. In June 2022, we entered into a settlement agreement with the United States in connection with a previous investigation into our compliance with the 14-day rule. Pursuant to this settlement agreement, under which we admitted no fault or liability, we paid approximately $2.9 million in restitution and penalties and we obtained a nationwide release from all 14-day rule claims prior to January 1, 2018. In addition to the matter described above, we are, from time to time, party to various claims and legal proceedings arising out of our ordinary course of business, including claims or proceedings relating to, among other things, regulatory matters, intellectual property, competition, tax, and employment matters, medical malpractice, product or professional liability or other tort claims. We cannot predict with certainty the results of any claims or proceedings. We may receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances that favorable final outcomes will be obtained. Moreover, the existence of any claim or legal proceeding, regardless of the outcome, may adversely impact us because of diversion of management time and attention as well as the financial costs related to resolving such disputes. For additional information, see Part II, Item 1A, “Risk Factors—Risks Related to Regulation and Legal Compliance—We have been, are currently, and in the future may be the subject of government investigations, claims, audits, whistleblower and payer audits, overpayment and recoupment efforts and other litigation in the course of our business that could adversely affect our business and financial statements.” Item 1A. Risk Factors A description of risks and uncertainties facing our business is set forth below. You should carefully consider the risks described below, as well as the other information in this Quarterly Report on Form 10-Q (“Quarterly Report”), including our financial statements and the related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report. Additional risks and uncertainties that we are not currently aware of, or that we currently believe are not material, may also adversely affect our business. This Quarterly Report also contains forward-looking statements that involve risks and uncertainties. See the section titled “Special Note Regarding Forward-Looking Statements.” The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations, and growth prospects. In such an event, the price of our securities could decline, and you may lose all or part of your investment. Risk Factors Summary The following is a summary of the most significant risks, challenges and uncertainties facing our business. This summary should be read in conjunction with the risk factors described below in this section and should not be considered an exhaustive list or summary of all of the significant or material risks, challenges and uncertainties that we face. • The precision medicine industry is highly competitive and subject to rapid change. • We have incurred significant losses since inception, may incur additional losses in the near future, and may not be able to generate sufficient revenue to maintain profitability. • Our current or future solutions may not achieve or maintain sufficient commercial market acceptance. • Our solutions may not perform as expected, and the results of our validation studies or our clinical trials may not support the launch or use of our solutions and may not comply with the requirements, or be replicated in later trials required, for any necessary or desirable marketing authorizations. This could adversely affect our business, financial condition, results of operations, and growth prospects. • Our current revenue is primarily generated from the continued adoption and use of our tissue-based profiling solution. • Our future success and growth will depend in part on market acceptance and commercial success of our MI Cancer Seek and Caris Assure solutions. We may be unsuccessful in continuing the commercialization and 56 Table of Contents growing the adoption of MI Cancer Seek or Caris Assure, which would adversely affect our business, financial condition, results of operations, and growth prospects. • If we are unable to support demand for MI Profile, Caris Assure, and any other solutions we develop, including ensuring that we have adequate capacity to meet increased demand, or if we are unable to successfully manage our anticipated growth, our business could suffer. • Our results of operations may fluctuate significantly, which makes our future results of operations difficult to predict and could cause our results of operations to fall below expectations or any guidance we may provide. • If our solutions, or solutions we develop in the future, do not receive adequate coverage and reimbursement from third-party payers, including government and commercial payers, our ability to expand access to our solutions beyond our existing sales channels, and thus our overall commercial success, will be limited. • If we or our partners fail to comply with healthcare or other applicable laws and regulations, we could face substantial penalties and sanctions, and our business, reputation, financial condition and results of operations could be adversely affected. • Our billing, collections, and claims processing activities are complex and time-consuming, and any delay in transmitting and collecting claims or failure to comply with applicable billing requirements could have an adverse effect on our future revenue. • We rely on a limited number of third-party suppliers or, in many cases, sole suppliers, for some of our next-generation sequencers, lab materials, reagents, and supplies, and we may not be able to find replacements or immediately transition to alternative suppliers if necessary. • We have current solutions marketed as laboratory-developed tests (LDT) and plan to launch future solutions as LDTs. The regulation of LDT products in the United States remains subject to significant uncertainty, and if we fail to comply with any new or existing legal requirements with respect to our LDT solutions, our business, financial condition, and results of operations could be adversely affected. • We have been, are currently, and in the future may be the subject of government investigations, claims, audits, whistleblower and payer audits, overpayment and recoupment efforts and other litigation in the course of our business that could adversely affect our business and financial results • If we are unable to obtain and maintain intellectual property protection for our technology, or if the scope of the intellectual property protection we obtain is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to our solutions, and our ability to successfully commercialize our solutions may be impaired. • We have incurred substantial indebtedness, and we may not generate sufficient cash flow from operations to meet our debt service requirements, continue our operations, and pursue our growth strategy, and we may be unable to raise capital when needed or on acceptable terms. • Our executive officers, directors, and principal shareholders, including, in particular, David D. Halbert, our Founder, Chairman, and Chief Executive Officer, to have the ability to control or significantly influence matters submitted to shareholders for approval, which could limit the ability of our other shareholders to affect the outcome of key corporate decisions and transactions, including a change of control. Risks Related to Our Business and Industry The precision medicine industry is highly competitive and subject to rapid change. Our industry is highly competitive and characterized by rapid changes, including technological and scientific breakthroughs, frequent new product introductions and enhancements, and evolving industry standards. Our future success will depend on our ability to compete successfully and keep pace with the evolving needs of physicians, patients, and our biopharma partners on a timely and cost-effective basis and to pursue new market opportunities that develop as a result of technological and scientific advances. In recent years, there have been numerous advances in technologies relating to the diagnosis and treatment of cancer and advances in methods used to analyze large amounts of genomic information. We must continuously enhance our proprietary profiling and signature offerings and develop new solutions in a cost-effective way to achieve meaningful innovation in precision oncology and other chronic disease states. If we do not update our suite of solutions to reflect new scientific knowledge or technological advancements, including as they relate to precision medicine, therapeutic developments, or relevant validation studies or clinical trials, adoption and use of our current solutions and any new solutions we may develop could decline, which would adversely affect our business, financial condition, and results of operations. Moreover, as an AI TechBio company that has experienced significant recent growth in the rapidly evolving field of precision medicine, our current business, our future success, and the risks and challenges we may encounter can be difficult to evaluate or accurately predict. If we fail to address the risks and difficulties that we face, including those described elsewhere in this “Risk Factors” section, our business, financial condition, and results of operations could be 57 Table of Contents adversely affected. We have encountered in the past, and expect to encounter in the future, risks and difficulties frequently experienced by companies operating in rapidly evolving fields. If our assumptions regarding these risks and difficulties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks and difficulties, our results of operations could differ materially from our or your expectations, and our business, financial condition, and results of operations could be adversely affected. We have incurred significant losses since inception, may incur losses in the future, and may not be able to generate sufficient revenue to achieve and maintain profitability. We have incurred significant losses since our inception. For the years ended December 31, 2024 and 2023, we incurred net losses of $281.9 million and $341.4 million, respectively. For the nine months ended September 30, 2025 and 2024, we incurred net losses of $150.0 million and $244.9 million, respectively. As of September 30, 2025, we had an accumulated deficit of $2.6 billion. To date, we have financed our operations principally from the sale of convertible preferred stock, the incurrence of indebtedness, the proceeds of our June 2025 initial public offering (“IPO”), and revenue from molecular profiling and pharma R&D services. Over the last 17 years, we have devoted significant resources towards developing our current portfolio that consists of tissue- and blood-based profiling solutions, building our multi-modal clinico-genomic datasets, expanding our operational capacity, and strengthening our AI/ML-driven data analysis capabilities. We also devote significant resources to clinical and regulatory initiatives to obtain marketing authorization, sales and marketing activities, and R&D activities. We anticipate incurring significant costs to continue developing and commercializing our solutions. In addition, because of the various risks and uncertainties associated with developing and commercializing our solutions, we are unable to predict the extent of future costs that may impact our prospects for profitability. Our future expenses will depend, in part, on the level of our expenditures and our ability to continue generating revenue at scale. We expect to continue to incur significant expenses for the foreseeable future, and may incur operating losses in the short term if and as we, among other things: • attract, hire, and retain qualified personnel; • continue our R&D activities and scale our R&D infrastructure; • expand our laboratory capacity and operating capabilities, including completing the build-out of our laboratory facility in Irving, Texas; • further build our sales, marketing, and distribution infrastructure; • continue to invest in the expansion and enrichment of our clinico-genomic datasets and related analysis capabilities; • seek marketing authorization or other regulatory approvals that may be necessary or desired for our solutions; • obtain, maintain, protect, and enforce our intellectual property portfolio, including intellectual property obtained through license agreements; • meet the requirements and demands of being a public company; and • defend against any claims or other lawsuits related to our solutions or otherwise. Our expenses could increase beyond expectations if we are required by the FDA or other regulatory agencies to delay the launch of any new solutions, narrow or change our intended use or product claims, modify or expand our clinical trials or to perform additional clinical trials, either pre- or post-approval, in addition to those that we currently anticipate. We will also need to generate significant additional revenue to sustain and then grow profitability, and we cannot be sure that we will remain profitable for any substantial period of time. While we have commercially launched MI Cancer Seek, a new WES/WTS NGS assay, in the United States and seek to drive its increased adoption, and also plan to capitalize on the potential of Caris Assure applications for early detection, MRD tracking, and treatment monitoring and in chronic disease states beyond oncology, we cannot assure you that we will successfully be able to do so as planned, if at all, and our failure to do so may prevent us from generating increased revenue. Our failure to maintain profitability could negatively impact the value of our common stock. Our current or future solutions may not achieve or maintain sufficient commercial market acceptance. The commercial success of any of our solutions, including our MI Profile and Caris Assure platforms, or solutions that are marketed in the future, will depend upon the degree of commercial market acceptance, including by government payers, insurance companies, integrated health systems, healthcare providers, patients, biopharma companies and other third-party payers. The degree of market acceptance of our solutions will depend on a number of factors, including: 58 Table of Contents • the performance and clinical utility of such solutions as demonstrated in clinical trials and published in peer-reviewed journals; • the rate of adoption and/or endorsement of our solutions by clinicians, KOLs, advocacy groups, and biopharma companies; • the ability of our newer solutions, such as Caris Assure, and solutions that may be marketed in the future, to demonstrate the same performance in real-world intended use populations as in clinical trials or analytical or clinical validation studies; • the willingness of medical providers to utilize our solutions as they are commercially released; • the willingness of commercial third-party payers and government payers to cover and reimburse for our solutions; • the development or introduction of competing products, including the expansion of the capabilities of existing products; • the market acceptance of existing competitive products, including tests that are currently reimbursed; • publicity concerning our solutions or competing products; and • the strength of our marketing and sales support. We cannot assure you that we will be successful in addressing each of these factors or other factors that might affect the market acceptance of our solutions. Failure to achieve broad market acceptance of our solutions, would harm our business, financial condition, and results of operations. For additional information, see “—Our current revenue is primarily generated from the continued adoption and use of our tissue-based profiling solution” and “—Our future success and growth will depend in part on market acceptance and commercial success of our MI Cancer Seek and Caris Assure solutions. We may be unsuccessful in continuing the commercialization and growing the adoption of MI Cancer Seek or Caris Assure, which would adversely affect our business, financial condition, results of operations, and growth prospects.” Our solutions may not perform as expected, and the results of our validation studies or our clinical trials may not support the launch or use of our solutions and may not comply with the requirements, or be replicated in later trials required, for any necessary or desirable marketing authorizations. This could adversely affect our business, financial condition, results of operations, and growth prospects. Our success depends on the market and the medical community’s confidence that we can provide reliable, high-quality solutions, as well as our ability to complete validation studies and clinical trials and comply with applicable regulatory requirements that would allow us to commercialize our solutions. Our solutions may not perform as expected, and the results obtained from our ongoing or future studies and trials may be inconsistent with certain results obtained from our previous studies or trials. In addition, the application of Caris Assure in early detection, MRD tracking, and treatment monitoring, for which we are still collecting data to support, may not be as effective as we anticipate. If Caris Assure or our other solutions are ineffective or do not consistently perform as expected, either before or after launch, our business, financial condition, results of operations, and growth prospects would suffer. Our solutions require a number of complex and sophisticated biochemical and bioinformatics processes, many of which are highly sensitive to external factors. An operational or technological failure in one of these complex processes or fluctuations in external variables may result in sensitivity and specificity rates that are lower than we anticipate or that vary between test runs or in a higher than anticipated number of tests that fail to produce consistent results. In addition, we regularly evaluate and refine our AI/ML algorithms and other processes under development. These refinements may inadvertently result in unanticipated issues that may reduce our sensitivity and specificity rates or otherwise adversely affect the performance of our solutions and their results, such that supplemental submissions to the FDA may be required. We have obtained a PMA approval from the FDA for MI Cancer Seek and may decide to seek FDA approval for Caris Assure and additional solutions, though whether we will do so and the timing thereof is uncertain. The FDA and other regulators may request additional information or require that we generate additional clinical data to support such future approval applications, which could result in delays, increased costs, or other limitations on our ability to receive such approval. Additionally, the FDA included certain conditions of approval and limitations in the PMA approval letter for MI Cancer Seek, namely that we submit data evaluating the effects of interfering substances such as necrotic tissue, melanin, and fatty acids and also conduct a study and submit data regarding formalin-fixed paraffin-embedded block and slide stability duration claims, which submissions were completed in early November 2025. Our failure to satisfactorily comply with these limitations and conditions could result in the withdrawal of the PMA approval for MI Cancer Seek. 59 Table of Contents Further, we plan to enhance, iterate, and improve our solutions, scalability, and/or reduce our cost of goods. However, we may not be successful in transitioning our solutions to new or enhanced versions or iterations, or reducing our cost of goods. The improvement of our solutions involves a lengthy and complex process, may require regulatory approval, and we may be unable to commercialize, validate, or improve performance of any of our solutions on a timely basis, or at all. Our failure to successfully develop new and/or improved solutions (including new versions of existing solutions) on a timely basis could adversely affect our business, financial conditions, and results of operation. Finally, generating the clinical data necessary to validate and support the launch of our solutions and new versions of solutions and subsequently obtain marketing authorization or third-party reimbursement, is time-consuming and carries with it the risk of not yielding the desired results. The performance achieved in our analytical validation studies, clinical trials, or published studies may not be replicated in later studies that may be required to obtain or maintain marketing authorization. For example, limited results from earlier-stage analytical validation studies, such as our analytical validation studies on the use of Caris Assure for early detection, MRD tracking, and treatment monitoring, may not predict results from studies in larger numbers of participants drawn from more diverse populations over a longer period of time. Unfavorable results from ongoing analytical validation studies or clinical trials, or delays in publication of such results, could lead to delays, modifications, or abandonment of ongoing or future studies and trials, or abandonment of a solution development program, or may delay, limit, or prevent marketing authorizations or commercialization of our solutions. In addition, results from such studies and trials may not be consistent with the results from real-world application of our solutions, if commercialized, for a particular care setting. Our current revenue is primarily generated from the continued adoption and use of our tissue-based profiling solution. Our ability to execute our growth strategy and become profitable is highly dependent on the continued adoption and use of MI Profile, our tissue-based profiling solution, which accounted for 78.20% and 91.00% of our revenue in the years ended December 31, 2024 and 2023, respectively, and 93.34% and 90.21% of our revenue for the nine months ended September 30, 2025 and 2024, respectively. Continued adoption and use of MI Profile will depend on several factors, including the prices we charge for our solution, the scope of coverage and amount of reimbursement available from government and third-party payers for our solution, the availability of clinical data that supports the value of MI Profile and the inclusion of MI Profile solutions in industry treatment guidelines. The commercial success of our tissue-based profiling solution depends significantly on its broad adoption and use by oncologists and other physicians. Many physicians and biopharma companies have existing relationships with companies that develop molecular diagnostic tests, including our competitors, and may continue to use their tests instead of MI Profile. Despite our business development efforts, it could be difficult, expensive, and/or time-consuming for physicians and/or biopharma companies to switch diagnostic tests for their products, and MI Profile may not be widely accepted, if at all, which could in turn hinder the rate of adoption and continued use of our solutions. We cannot assure you that MI Profile will continue to maintain or gain market acceptance, and any failure to do so would harm our business, financial condition, and results of operations. Moreover, as we have leveraged the data we have generated to date with MI Profile to develop Caris Assure and other solutions, if the adoption and use of MI Profile wanes or if reliability or other issues with the data we generate with MI Profile are discovered, the further development and future success and growth of Caris Assure and other solutions would be adversely impacted. Our future success and growth will depend in part on market acceptance and commercial success of our MI Cancer Seek and Caris Assure solutions. We may be unsuccessful in continuing the commercialization and growing the adoption of MI Cancer Seek or Caris Assure, which would adversely affect our business, financial condition, results of operations, and growth prospects. Driving increased adoption among physicians of, and obtaining reimbursement for, MI Cancer Seek are key expected drivers of our growth, particular in the near and medium term. The success of MI Cancer Seek will depend upon, among other things, the extent to which our FDA approval drives increased adoption and use of the solution by physicians as a companion diagnostic tool. Caris Assure, for which we initiated the broad commercial launch for therapy selection in the first quarter of 2024, ultimately aims to address the entire continuum of cancer treatment. Realizing the potential of Caris Assure across disease states is a key component of our long-term business strategy. The commercial success of Caris Assure for therapy selection and in other applications across the cancer treatment continuum will depend upon, among other things, analytical validation studies and clinical trials that demonstrate the effectiveness of Caris Assure, particularly for early detection, MRD tracking, and treatment monitoring, the continued adoption of Caris Assure by physicians, the medical community, patients, and third-party payers, and our ability to successfully run and market Caris Assure in substantial 60 Table of Contents quantities or to manage and expand the required infrastructure to do so, including large-scale laboratory and information technology systems. Maintaining and expanding market acceptance of our solutions, marketing, and laboratory capabilities are expensive and time-consuming. If MI Cancer Seek and Caris Assure are not successfully commercialized, we will not be able to recover the significant investment we have made in developing these solutions, and our business, prospects, financial condition, and results of operations would be harmed. If we are unable to support demand for our MI Profile, Caris Assure platforms, and any other solutions we develop, including ensuring that we have adequate capacity to meet increased demand, or if we are unable to successfully manage our anticipated growth, our business could suffer. As and to the extent the volumes of our current and new solutions continue to grow, we will need to simultaneously increase our capacity for sample intake, storage, and processing enhance our customer service, improve our billing and general processes, expand our internal quality assurance programs, incorporate new equipment, implement new technology systems and processes, expand laboratory capacity, and otherwise extend our operational capabilities to support comprehensive genomic analyses at a larger scale while retaining expected turnaround times. We will also need additional equipment and certified and licensed laboratory personnel to process higher volumes of solutions. We may face difficulties increasing the scale of our operations, including implementing changes in infrastructure or programs or acquiring additional equipment or personnel. As we refine our solutions and develop additional solutions, we may need to bring new equipment on-line, implement new systems, technology, controls and procedures, and hire personnel with different qualifications, licenses, or certifications. We are also in the process of constructing additional facilities in order to increase capacity, including our laboratory facility in Irving, Texas. We may not be able to complete construction of such facilities and obtain necessary certifications, permits, licenses, and accreditations in a timely or cost-effective manner, or at all. Therefore, we may be unable to support our development and commercial activities in a timely manner, if at all. There is no assurance that any of these increases in scale, expansion of personnel, equipment, software and computing capacities or process enhancements will be successfully implemented, or that we will have adequate resources and facilities to accommodate such required expansion. The value of our MI Profile and Caris Assure platforms, and related solutions will depend, in part, on our ability to perform tests and return test results to providers on a timely basis and at an appropriate quality standard, and on our reputation for such timeliness and quality. If our business grows too quickly, our ability to meet demand for our solutions in a timely and efficient manner could be challenged, and our quality standards or turnaround time may be compromised. Failure to implement necessary procedures, to transition to new equipment or processes, or to hire the appropriate, qualified personnel could result in higher costs of processing, longer turnaround times, declining product quality, deteriorating customer service, an inability to meet market demand, or slower responses to competitive challenges, all of which could make it difficult for us to meet market expectations for our solutions and could damage our reputation and the prospects for our business. There can be no assurance that we will be able to perform tests on a timely basis at a level consistent with demand, that we will be able to maintain the quality of our test results as we scale our commercial operations, or that we will be successful in responding to the growing complexity of our laboratory operations, including the related data analysis requirements. As we grow, we expect to add new associates in our Phoenix and Tempe, Arizona and Irving, Texas facilities. We will need additional laboratory scientists, technicians, and other scientific and technical personnel with different qualifications, licenses, or certifications. As our development plans and strategies develop, and as we operate as a public company, we must add a significant number of additional managerial, operational, financial, and other personnel. Future growth will impose significant added responsibilities on members of management, including: • identifying, recruiting, integrating, retaining, and motivating employees; • managing our internal development and commercialization efforts effectively, including creating and maintaining compliant programs and processes, such as a laboratory and manufacturing quality system, and managing the regulatory requirements for our solutions, while adhering with our contractual obligations to contractors and other third parties; • expanding our operational, human resources, financial and management controls, reporting systems, and procedures; and • managing the increasing complexity associated with a larger organization and expanded operations. Our growth may place a significant strain on our management, operating and financial systems, R&D, and our sales, marketing, and administrative resources. As a result of our growth, our operating costs may escalate even faster 61 Table of Contents than planned, and some of our internal systems may need to be enhanced or replaced. If we cannot effectively manage our expanding operations and our costs, we may not be able to successfully commercialize future solutions and grow successfully, and our business could be adversely affected. Our results of operations may fluctuate significantly, which makes our future results of operations difficult to predict and could cause our results of operations to fall below expectations or any guidance we may provide. Our quarterly and annual results of operations may fluctuate significantly, which makes it difficult for us to predict our future results of operations. These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: • the level of demand for our solutions, which may vary significantly; • the timing and cost of, and level of investment in, research, development, regulatory approval, or certification and commercialization activities relating to our solutions, which may change from time to time; • the volume and customer mix of our solutions; • the introduction of new solutions or solution enhancements by us or others in our industry; • coverage and reimbursement policies with respect to our solutions and products that compete with our solutions; • seasonal variations in patients’ ordering of diagnostic tests or scheduling of medical procedures; • expenditures that we may incur to acquire, develop, or commercialize additional solutions and technologies; • changes in governmental regulations or in the status of our regulatory approvals or certifications or applications; • future accounting pronouncements or changes in our accounting policies; • developments or disruptions in the business and operations of physicians and our biopharma partners; • the impact of natural disasters, political instability, including wars, terrorism, and political unrest, epidemics or pandemics, boycotts, and curtailment of trade and other business restrictions; and • the effects of inflation or other general market and economic conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors. Additionally, due to the inherent variability and unpredictability of the reimbursement landscape, including related to the amount that payers reimburse us for any of our solutions, when we recognize revenue we estimate the transaction price based on our historical collection experience and on the historical selling price of similar transactions, where applicable, and subsequent changes to the estimate of the transaction price are generally recorded as adjustments to revenue in the period where such changes occur. Both the estimate and any subsequent revision are uncertain and require the use of management’s judgment in the estimation of the variable consideration and application of the constraint for such variable consideration. Due to this variability and unpredictability, previously recorded revenue adjustments are not necessarily indicative of future revenue adjustments from actual cash collections, which may fluctuate significantly. Moreover, we receive a substantial portion of our revenue from a limited number of third-party commercial payers. If one or more of these payers were to significantly reduce or cease to pay the amount such payer reimburses us for our solutions, or if such payer does not reach or maintain favorable coverage and reimbursement decisions for our solutions, it could have an adverse effect on our business, financial condition, and results of operations. We have experienced situations where commercial payers proactively reduced the amounts they were willing to reimburse for our solutions, and in other situations, payers have determined that the amounts they previously paid were too high and have sought to recover those perceived excess payments by deducting such amounts from payments otherwise being made. For additional information regarding risks associated with the reimbursement landscape, see “—If our solutions, or solutions we develop in the future, do not receive adequate coverage and reimbursement from third-party payers, including government and commercial payers, our ability to expand access to our solutions beyond our existing sales channels, and thus our overall commercial success, will be limited.” The cumulative effects of factors discussed above could result in large fluctuations and unpredictability in our quarterly and annual results of operations. As a result, comparing our results of operations on a period-to-period basis may not provide investors with a complete picture of the health of our business. Investors should not rely on our past results as an indication of our future performance. This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period. If our results of operations fall below the expectations of analysts or investors or below any guidance we may provide, or if the guidance we provide is below the expectations of analysts or investors, the price of our common stock could decline substantially. Such a stock price decline could occur even when we have met any previously publicly stated guidance we may provide, and which could harm our business, financial condition, and results of operations. 62 Table of Contents If we do not have the support of KOLs or if clinical data using our solutions is not published in peer-reviewed journals or is otherwise not well received, it may be difficult to drive adoption and use of our solutions and establish them as a component of the standard of care for patients with cancer. If Caris POA members or other KOLs within the broader precision oncology industry determine that our platforms, our existing solutions, or other solutions that we develop are not clinically effective, that alternative technologies are more effective, or if they elect to use internally developed products or services, we may see lower demand for our solutions and face difficulty establishing our solutions as an integral component of the applicable standard of care, which would limit our revenue growth and our ability to achieve or sustain profitability. The publication of clinical data using our solutions in peer-reviewed journals is also crucial to our success. We are unable to control when, if ever, results are published, which may delay or limit broad adoption and use of our solutions. Our ability to publish clinical data relating to our solutions in peer-reviewed publications may be limited by many factors, including increased difficulty in obtaining acceptance for publication from journals, conflicts of interest, lack of qualified experts willing to participate in the peer review process, delays in the completion of, poor design of, or lack of compelling data from, validation studies or clinical trials, as well as delays in the review, acceptance, and publication process. If our solutions do not receive sufficient favorable exposure in peer-reviewed publications or are not well received by clinicians, the rate of clinician adoption and use of our solutions and positive reimbursement coverage determinations for our solutions, even if approved with guideline inclusion, could be adversely affected. If our solutions, or solutions we develop in the future, do not receive adequate coverage and reimbursement from third-party payers, including government and commercial payers, our ability to expand access to our solutions beyond our existing sales channels, and thus our overall commercial success, will be limited. Our revenue and commercial success depend on achieving coverage and reimbursement for assays that comprise our MI Profile and Caris Assure platforms, and any solutions we may offer in the future, from third-party payers, including both government and commercial payers. Obtaining approvals from third-party payers to cover our solutions and establishing adequate coding recognition and reimbursement levels is an unpredictable, challenging, time-consuming, and costly process, and we may not always be successful. Coverage determinations from third-party payers may depend on a number of factors, including a payer’s determination that a solution is appropriate, medically necessary, and cost-effective. Each payer will make its own decision as to whether to establish a policy or enter into a contract to cover our solutions and the amount it will reimburse for such solutions. In addition, determinations by a payer whether to cover and the amount it will reimburse for our solutions are often made on an indication-by-indication basis. If we are unable to provide payers with sufficient evidence of the clinical utility and validity of our solutions, they may not provide coverage, may provide limited coverage, or may terminate coverage for our solutions, which will adversely affect our revenues and our financial condition. In addition, the fact that one of our solutions has been approved for reimbursement in the past does not guarantee that such solution will remain approved for reimbursement, that the approved reimbursement amount will not be reduced in the future, or that similar or additional solutions will be approved in the future. Moreover, there can be no assurance that any new solutions we launch will be reimbursed at rates that are comparable to the rates that we historically obtained for our existing portfolio or rates that other industry participants receive. Third-party payers may not cover or provide adequate payment for our current or future molecular and other solutions to enable us to maintain past levels of revenue or profitability with respect to such solutions. Further, third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on investment in the development of our solutions. Healthcare providers may not order our solutions unless third-party payers cover and provide reimbursement rates for a substantial portion of the price of our solutions. If we are unable to obtain adequate coverage and an acceptable level of reimbursement for our solutions from third-party payers, patients could incur a greater co-insurance, co-payment, and/or deductible obligation. Uninsured patients or patients whose insurance does not cover our solutions may also be forced to pay for our solutions out-of-pocket. Such scenarios could dissuade physicians from ordering our solutions or, if ordered, could result in a delay in or decreased likelihood of our collection of payment. We thus believe our revenue and revenue growth will depend on our success in achieving and maintaining broad coverage and adequate reimbursement for our solutions from third-party payers. In addition, the coding process used by third-party payers to identify various medical procedures during the billing process is complex, may not adapt well to the types of solutions we offer, and may not enable coverage and adequate reimbursement rates. Moreover, changes to the codes used to report our solutions to payers may result in significant changes in reimbursement. 63 Table of Contents Third-party payers are increasingly attempting to contain healthcare costs by limiting coverage of certain diagnostic tests and the amounts that they will pay for such tests. Payers may also create conditions for coverage or may contract with third-party vendors to manage laboratory benefits, in both cases creating administrative hurdles for ordering physicians and patients that may make our services more difficult to sell. U.S. and foreign governments continue to propose and pass legislation designed to reduce the cost of healthcare. In some foreign markets, the government controls the pricing of many healthcare products. In the United States, we expect that there will continue to be federal and state proposals to implement governmental controls or impose healthcare requirements, which may increase the pressure to reduce spending on genetic testing and comprehensive molecular profiling. In addition, the Medicare program and increasing emphasis on managed care in the United States will continue to put pressure on product pricing. Cost control initiatives could decrease the price that we would receive for any solutions in the future, which would limit our revenue and profitability. Obtaining approvals from third-party payers to cover our existing and new solutions and establishing adequate coding recognition and reimbursement levels is an unpredictable, challenging, time-consuming, and costly process, and we may not always be successful. If third-party payers do not provide adequate coverage and reimbursement for our solutions, our ability to succeed commercially will be limited. Medicare Medicare is the single largest U.S. payer and a particularly important payer for many cancer-related laboratory services given the demographics of the Medicare population. Medicare coverage is limited to items and services that are within the scope of a Medicare benefit category that are reasonable and necessary for the diagnosis or treatment of an illness or injury. Medicare coverage criteria that define when items and services are reasonable and necessary are defined in National Coverage Determinations (“NCDs”) made by CMS through an evidence-based process, with opportunities for public participation, and Local Coverage Determinations (“LCDs”) made by Medicare Administrative Contractors (“MACs”) that apply within the specific jurisdictions. Medicare’s NCD for NGS (NCD 90.2), first established in 2018 and subsequently updated in 2020, provides national Medicare coverage for certain molecular diagnostic tests (1) performed in a laboratory certified by the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”), (2) ordered by a treating physician, (3) the patient meets certain clinical and treatment criteria, including having recurrent, relapsed, refractory, metastatic, or advanced stages III or IV cancer, (4) the test is approved or cleared by the FDA as a companion IVD for an FDA-approved or -cleared therapeutic for use in that patient’s cancer, and (5) results are provided to the treating physician for management of the patient using a report template to specify treatment options. The NGS NCD also provides discretion to the MACs to provide local coverage of other NGS tests for cancer patients only when the test is performed by a CLIA-certified laboratory, ordered by a treating physician and the patient meets the same clinical and treatment criteria required of nationally covered NGS tests under the NGS NCD. Palmetto GBA is the MAC responsible for administering MolDX, which issues coverage determinations applicable to molecular diagnostic tests within the scope of the program, including for molecular assays that are LDTs. Our MAC for the Phoenix laboratory locations is Noridian, and Noridian relies on MolDX to make local coverage and pricing determinations relating to molecular testing. To achieve coverage under MolDX, laboratories must apply for and obtain a DEX Z-Code that is unique to the laboratory’s specific test and must also submit a technical assessment to demonstrate analytical and clinical validity, and clinical utility at a level that meets the Medicare reasonable and necessary requirement. Analytical validity relates to technical performance, such as that an assay accurately and reliably measures a specific feature. Clinical validity means whether a test can accurately identify, measure, or predict a clinical condition or characteristic in patients. We received a PMA approval for MI Cancer Seek from the FDA in November 2024 and commercially launched the solution in January 2025. We have obtained Medicare coverage under the NGS NCD for MI Cancer Seek for CPT code 0211U at $8,455 under the CLFS. Our MI Tumor Seek Hybrid solution is covered for solid tumor testing as allowable under the NGS NCD and related LCD and are reported to Medicare with unlisted molecular pathology CPT code 81479 and the unique DEX Z-Code identifier issued by MolDX. MI Tumor Seek Hybrid is covered by Medicare as of August 3, 2022, with current MolDX pricing of $3,500. Our Caris Assure solution is currently reported to Medicare using a PLA code, CPT code 0485U, and a unique DEX Z-Code identifier issued by MolDX. Caris Assure is covered for therapy selection by Medicare as of December 8, 2023 for Comprehensive Genomic Profiling from ctDNA of patients with recurrent, relapsed, refractory, metastatic, or advanced solid tumors who are seeking treatment, and for whom tissue-based, comprehensive genomic profiling (“CGP”) is infeasible (for example, quantity not sufficient for tissue-based CGP or invasive biopsy is medically contraindicated), with current MolDX pricing of $3,649. In November 2024, CMS determined to price Caris Assure for therapy selection using the 64 Table of Contents “Gapfill” method, which resulted in Caris Assure for therapy selection being listed on the CLFS at pricing of $3,649, commencing in 2026. Immunohistochemical Tests As part of our MI Profile solution, we perform certain third-party IHC tests. Medicare coverage and payment for these tests is under the Molecular Pathology Procedures Billing and Coding Article, with payment amounts assigned to specific HCPCS and CPT codes. Protecting Access to Medicare Act Medicare payment for clinical diagnostic laboratory tests (“CDLTs”) is generally made under the CLFS based on payment rates that are assigned to specific HCPCS or CPT codes. Under the Protecting Access to Medicare Act of 2014 (“PAMA”), laboratories that meet certain requirements related to volume and type of Medicare revenues are required to report to CMS, beginning in 2017 and every three years thereafter, their private payer payment rates and volume for each test they perform that is reported with a specific HCPCS code (defined by PAMA to exclude miscellaneous or unlisted codes). We are subject to these reporting requirements under PAMA for any solution we perform that is not reported with a miscellaneous HCPCS or CPT code, including the third-party IHC tests we perform, and for any profiling solutions that commercial payers currently require us to report using a HCPCS code that has been identified by CMS as subject to PAMA reporting requirements. In addition, MI Cancer Seek, which is reported with PLA code 0211U, Caris Assure, which is reported using PLA Code 0485U, and any other solution for which we obtain a specific HCPCS or CPT code, will be subject to these reporting requirements in future PAMA reporting cycles, and that the Medicare CLFS payment rates for such solutions will be calculated in the future based on our private payer rates. Congress passed legislation that delayed data reporting requirements for CDLTs and further delayed the phase-in of payment reductions under the CLFS from private payer rate implementation. Any reductions to reimbursement rates resulting from the new methodology are limited to 0% in 2025 and 15% per test per year in each of 2026 through 2028. The subsequent data reporting periods for CDLTs will occur in three-year cycles, with the next cycle beginning in 2026. CLFS rates for CDLTs will be updated every three years. For many tests and/or laboratories, the result of the PAMA pricing methodology has been lower pricing and reimbursement. As a result, our Medicare CLFS pricing for any solutions that may be subject to PAMA reporting requirements in the future could be negatively impacted by PAMA. In addition, private payer payment levels have more significance in setting Medicare reimbursement and, therefore, future Medicare payments may fluctuate more often and become subject to the willingness of private payers to recognize the value of diagnostic tests generally and any given test individually. Given the many uncertainties built into PAMA’s price-setting process, we cannot predict how payments we receive under the CLFS, and thus our revenue, may change from year to year. In addition to the reporting requirements and pricing methodology described above, PAMA codified Medicare coverage rules for laboratory tests by requiring any local coverage determination to be made following the local coverage determination process. PAMA also authorizes CMS to consolidate coverage policies for clinical laboratory tests among one to four laboratory specific MACs. These same contractors may also be designated to process claims if CMS determines that such a model is appropriate. It is unclear whether CMS will proceed with contractor consolidation under this authorization. Molecular Signature Tests, and Screening and Early Detection Intended Uses for Our Solutions Our proprietary molecular signature tests, GPSai and FOLFIRSTai, as well as early detection indications for our blood and tissue-based profiling solutions, are not currently covered by Medicare. Obtaining Medicare coverage for these molecular signatures would require significant investments and may ultimately be unsuccessful or may take several years to achieve. In addition, we are developing screening capabilities for Caris Assure for MRD tracking and treatment monitoring in colorectal cancer (“CRC”), breast cancer, lung cancer, and other indications. On January 19, 2021, CMS released an NCD that covers future tests for CRC screening if and when such screening tests have FDA approval and meet pre-specified CMS criteria. In addition, MolDX LCDs provide coverage for MRD for CRC, breast cancer, lung cancer, and other indications when applicable coverage criteria are satisfied. While this NCD and applicable LCDs may provide a pathway to coverage of Caris Assure in CRC and other indications under Medicare if applicable coverage criteria are satisfied, and we successfully obtain MolDX approval, there is no assurance that we will be successful in completing the required studies, trials, or publications or obtaining FDA approval, or obtaining Medicare coverage, and if we are not successful, our business, financial condition, and results of operations would be harmed. 65 Table of Contents Commercial Payers and Other Payers Our commercial success also depends on achieving acceptable coverage and reimbursement for our solutions from commercial payers. When we contract with a payer as a participating provider, reimbursements by the payer are generally made pursuant to a negotiated fee schedule and are limited to only covered indications, and in many cases require prior authorization. Becoming a participating provider can result in higher reimbursement amounts for covered uses of our solutions and, potentially, no reimbursement for non-covered uses identified under the payer’s medical policies or the contract. Although we are a participating provider with many commercial payers, certain payers may not cover based on existing medical policy and may treat our solutions or solutions that we develop in the future as experimental and investigational or import restrictive coverage criteria. If we are not successful in obtaining coverage from such payers, or if other payers issue non-coverage policies or change their coverage policies, our business, financial condition, and results of operations could be adversely affected. Because current codes applicable to our solutions are not always test-specific, each insurance claim will have different submission criteria, including appending our DEX Z-Code, and typically must be examined to determine what test was provided, whether the test was appropriate and medically necessary, and whether payment should be rendered, which may require progress notes, medical records, or a letter of medical necessity from the ordering physician. This process can result in a delay in processing the claim, a lower reimbursement amount or denial of the claim. As a result, obtaining approvals from third-party payers to cover our solutions and establishing adequate reimbursement levels is an unpredictable, challenging, time-consuming, and costly process, and we may never be successful in obtaining such approvals. Some payers have implemented, or are in the process of implementing, laboratory benefit management programs, often using third-party benefit managers to manage these programs. The stated goals of these programs are to help improve the quality of outpatient laboratory services, support evidence-based guidelines for patient care and lower costs. The impact on laboratories, such as ours, of active laboratory benefit management by third parties is unclear, and we expect that it would have a negative impact on our revenue in the short term. Payers may resist reimbursement for our solutions in favor of less expensive tests, require pre-authorization for our solutions, or impose additional pricing pressure on, and substantial administrative burden on, reimbursement for our solutions. We expect to continue to focus substantial resources on increasing adoption of, and coverage and reimbursement for, our current solutions and any future solutions we may develop. We believe it may take several years to achieve broad coverage and adequate contracted reimbursement with a majority of payers for our new solutions. However, we cannot predict whether, under what circumstances, or at what price levels payers will cover and reimburse our existing and future solutions. If we fail to establish and maintain broad adoption of, and coverage and reimbursement for, our solutions, our ability to generate revenue could be harmed and our business, financial condition, and results of operations could be adversely affected. Even where we establish relationships with commercial payers to provide our future solutions at negotiated rates, such agreements do not obligate any healthcare providers to order our solutions or guarantee that we would receive reimbursement for our solutions from these or any other payers at adequate levels. Thus, these payer relationships, or any similar relationships, may not result in acceptable levels of coverage and reimbursement for our solutions, or meaningful increases in the number of billable tests we perform. In addition to the available Medicare coverage for therapy selection, we plan to market Caris Assure platform for early detection, MRD tracking, and treatment monitoring, as well as other solutions that we are developing or may develop in the future, to large self-insured employers, commercial insurance plans, certain physician directed channels, concierge medicine and executive health programs, and innovative health systems. Additionally, a third-party payer’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved. Further, coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future. Our billing, collections, and claims processing activities are complex and time-consuming, and any delay in transmitting and collecting claims or failure to comply with applicable billing requirements could have an adverse effect on our future revenue. Depending on the billing arrangement and applicable law, we bill and expect to bill various payers, such as governmental payers, insurance companies, hospitals, and patients, which may each have different billing requirements. We may face increased risk in our collection efforts, including long collection cycles and the risk that we never collect at all, either of which could adversely affect our business, financial condition, and results of operations. 66 Table of Contents Our failure to timely submit claims for our solutions to payers or failure to comply with applicable billing requirements could have an adverse effect on our revenue and our business, and could result in our inability to receive payment for our services or in attempts by private payers and state and federal healthcare programs, such as Medicare and Medicaid, to recover payments already made. Submission of claims in violation of billing requirements and applicable laws and regulations can result in recoupment of payments already received, substantial civil monetary penalties, and exclusion from state and federal health care programs, and can subject us to liability under the federal False Claims Act (the “FCA”) and similar laws. For example, in March 2025, we received a Civil Investigative Demand (“CID”) from the DOJ in connection with an investigation under the False Claims Act regarding our compliance with Medicare's date of service rule (also referred to as the 14-day rule). For additional information, see “ —We have been, are currently, and in the future may be the subject of government investigations, claims, audits, whistleblower and payer audits, overpayment and recoupment efforts and other litigation in the course of our business that could adversely affect our business and financial results” and Part II, Item 1. “Legal Proceedings.” The failure to report and return an overpayment to the Medicare or Medicaid program within 60 days of identifying its existence can also give rise to liability under the FCA. Further, a government agency could attempt to hold us liable for causing the improper submission of claims by another entity for services that we performed if we were found to have knowingly participated in the arrangement at issue. In addition, our claims for reimbursement may be denied and we may have to appeal such denials in order to get paid. Such appeals may not result in payment and can be time-consuming and costly. Moreover, payers often perform audits of historically paid claims and regularly attempt to recoup funds years after the funds were initially distributed if the payers believe the funds were paid in error or determine that our solutions were medically unnecessary. If a payer’s audit of our claims results in a negative finding, and we are unable to reverse the finding through appeal or subsequent litigation, any subsequent recoupment could have an adverse effect on our revenue. Additionally, in some cases commercial payers for whom we are not a participating provider may elect at any time to review claims previously paid and determine the amount they paid was excessive. In these situations, the payer typically notifies us of its decision and then offsets the amount it determines to be overpaid against amounts it owes us on current claims. We may not have a mechanism to dispute these retroactive adjustments, and we cannot predict when, or how often, a payer might engage in these reviews. We have been, are currently, and may in the future be, subject to overpayment demands, recoupment efforts, and related disputes from or with payers, managed care plans, and government healthcare programs relating to the billing and coding of our solutions. Furthermore, we maintain financial assistance programs under which we assess patient financial need and offer to provide solutions at a discount, or at no cost, to certain eligible patients. These practices may result in scrutiny of our financial assistance programs by governmental and commercial payers and could result in recoupment actions or termination of coverage of our solutions, as well as scrutiny under health care fraud and abuse laws. For additional information, see “—We have been, are currently, and in the future may be the subject of government investigations, claims, audits, whistleblower and payer audits, overpayment and recoupment efforts and other litigation in the course of our business that could adversely affect our business and financial results” and “Item 1. Legal Proceedings.” We currently handle our own billing and coding for our solutions but use a a vendor for revenue cycle management services, such as billing and coding software and other related operations. Our business, financial condition, and results of operations may be affected by the ability of us and our vendor to timely, accurately, and appropriately code and bill claims and collect payments in compliance with the stringent billing, coding and documentation requirements imposed by government healthcare programs and other payers. Terminating or transitioning arrangements with revenue cycle management vendors could result in additional costs and a risk of operational problems, delays in collections from payers, potential errors and possible control issues during the termination and transition processes, any of which could adversely affect our business, financial condition, and results of operations. We rely on a limited number of third-party suppliers or, in many cases, sole suppliers, for some of our next-generation sequencers, lab materials, reagents, and supplies, and we may not be able to find replacements or immediately transition to alternative suppliers if necessary. We rely on Illumina, Inc. (“Illumina”) as the sole supplier of NGS instruments and the associated sequencing reagent kits for our solutions. Illumina is also the sole provider of maintenance and repair services for these sequencing instruments. Without access to these sequencers, we may be unable to run our solutions and commercialize our solutions. Additionally, we rely on several sole suppliers, including, among others, Roche Diagnostics Corporation (“Roche”), Gene Link, Inc., Life Technologies (operated by Thermo Fisher Scientific), and Agilent Technologies, Inc. (“Agilent”), for certain lab materials, reagents, and supplies. If we do not have timely access or access to sufficient quantities of these lab materials, reagents, and supplies, we may be unable to run our solutions and commercialize our solutions. We also rely on several sole suppliers, or manufacturers, for blood collection tubes, including the cfDNA 67 Table of Contents PAXgene tubes for use with liquid biopsy profiling, for total nucleic acid extraction kits, and for the NGS panels and library preparation kits we use. Given the specialized function of certain instruments and reagents, suitable replacements may not be available if a product is discontinued or the product specification undergoes substantial changes due to their own external competition or otherwise. This may significantly delay our ability to continue to develop and commercialize any other future commercial products. All changes to instruments, associated software and reagents will undergo a risk evaluation to determine the level of validation required per the product regulatory status and may require supplementary submissions to, and approval of, regulatory agencies such as the FDA. Whether transitioning to a new supplier, instrument or reagent, the process is likely to be time-consuming, expensive and could affect test performance metrics. We have obtained a PMA approval from the FDA for MI Cancer Seek and may decide to seek FDA approval for Caris Assure for therapy selection and additional solutions. We do not manufacture the instruments or reagents used with our solutions, nor do we control such processes, and we rely on external suppliers to maintain development and commercialization activities. The molecular testing performed by us is highly complex and requires specialized instruments and reagents, some of which are considered critical and could not be substituted without significant impact to our operations. Any failures or delays in negotiating appropriate agreements with our suppliers on reasonable terms, or their inability to obtain any required marketing authorizations, may increase our costs or delay or prevent us from obtaining or maintaining FDA marketing authorization of the related solutions. Our current suppliers may also discontinue or substantially change the specification of products that we use or intend to use in our solutions. We believe there are few other manufacturers that are currently capable of supplying and servicing the equipment and materials necessary for our laboratory operations, including certain instruments, components, consumables, and reagents. Transitioning to a new supplier for this equipment or these materials would be time-consuming and expensive, could result in interruptions in or otherwise affect the performance specifications of our laboratory operations and sample processing or could require that we revalidate our solutions and could require a new submission to the FDA and other regulatory bodies to authorize such changes for any of our solutions that have received FDA approval. We also cannot guarantee that we will appropriately prioritize or select alternative suppliers, where necessary. In addition, we do not have written supply agreements with certain of our suppliers, including Agilent and PAXgene, and instead purchase certain products on a purchase order basis, which exposes us to potential price increases and termination of supply without notice or recourse. We cannot guarantee a consistent source of supply and cannot assure you that any efforts to enter into written agreements with our suppliers will be successful. The use of equipment or materials provided by a replacement supplier could require us to alter our laboratory operations and sample collection and processing and related procedures. Moreover, replacement instruments and associated reagents, tubes, and panels that meet our quality control and performance requirements may not be available at all, or may not be available on reasonable terms or in a timely manner. If we encounter delays or difficulties in securing, reconfiguring, or revalidating the equipment, reagents, and other materials that we require for our solutions, laboratory operations and same collection and processing, in particular for those products that are sole sourced, we would likely face significant disruptions or delays in commercializing our solutions and our business, financial condition, results of operations, and growth prospects would be adversely affected. If we seek and fail to obtain additional financing, we may be unable to execute on our business strategies and our growth prospects could be harmed. Our operations have required substantial amounts of cash since our inception. The development of our solutions is expensive, and we expect to continue to spend substantial amounts as we continue to enhance our solutions, broaden the applications of our existing solutions, and develop new solutions. In addition, obtaining any necessary or desirable marketing authorizations for our solutions will require substantial additional funding. We may consider raising additional capital in the future to expand our business, meet existing obligations, pursue acquisitions or strategic investments, take advantage of financing opportunities, or for other reasons, including to: • increase our sales and marketing efforts to drive market adoption of our current solutions and address competitive developments; • fund development and marketing efforts of new solutions or any other future solutions; • expand our technologies into other types of cancer management and detection solutions for other chronic disease states; • acquire, license, or invest in our existing and future technologies; • acquire or invest in complementary businesses or assets; and • finance capital expenditures and general and administrative expenses. 68 Table of Contents As of September 30, 2025, we had $753.2 million of cash and cash equivalents and $2.3 million of short-term marketable securities. We could use our available capital resources sooner than we expect, including due to changing circumstances or those beyond our control that may cause us to increase our spending significantly faster than we anticipate, requiring us to raise additional funds sooner than we anticipate. Our future capital requirements depend on many additional factors, including: • the cost of development and commercialization activities, including marketing and sales, for our solutions; • our ability to achieve revenue growth; • the cost related to scaling operating capabilities to support demand for our solutions, including the cost of completing the build-out of our laboratory in Irving, Texas; • the timing of, and the costs involved in, obtaining any required or desired marketing authorizations for our solutions; • the timing, scope, progress, results and costs of developing additional solutions, and of conducting validation studies, clinical trials, and other studies that may be required in order to market our solutions; • the costs involved in obtaining, maintaining, protecting, and enforcing patent and other intellectual property rights and claims, including litigation costs and the outcome of such litigation; • the timing and amount of sales of our solutions, if any, and collection of related receivables; • the extent to which our solutions are eligible for coverage and reimbursement from third-party payers and government payers; • the emergence of new technologies, scientific breakthroughs, or any competing tests, products, or services, and other adverse market developments; and • other potential adverse developments. Additional capital may not be available when we need it, on terms acceptable to us or at all. We have no committed source of additional capital. Furthermore, any additional capital raised through the sale of equity or equity-linked securities will dilute shareholders’ ownership interests in us, may require shareholder approval, may have an adverse effect on the price of our common stock, and holders of these securities may have rights, preferences, or privileges senior to those of our then-existing shareholders. Debt financing, if available, may include restrictive covenants that could limit how we conduct our business. Our ability to incur additional indebtedness also is currently restricted by the terms of our 2023 Term Loan Agreement (as defined below). If adequate capital is not available to us on a timely basis, we may be required to significantly delay, scale back, or discontinue the commercialization of our solutions or R&D programs, or be unable to continue or expand our operations or otherwise capitalize on our business opportunities, as desired, which could adversely impact our business, financial condition, and results of operations and cause the price of our common stock to decline. If our facilities or those of our third-party collaborators are insufficient or become inoperable, our ability to provide our solutions will be significantly impaired and our business will be harmed. We currently perform all R&D and commercial profiling in our multiple laboratories in Phoenix and Tempe, Arizona and are building out our newest facility in Irving, Texas. Any disruption to the operations of these facilities could compromise the integrity of our samples and impede our ability to accurately perform our profiling and ultimately adversely impact our reputation, business, financial condition, and results of operations. In addition, we may maintain samples for several years. It is possible that some, if not all, of these samples may degrade over time, which could negatively impact our ability to use such samples for research and development or to validate future solutions, and which could adversely impact our business, financial condition, and results of operations. One or more of our facilities may be harmed, rendered inoperable by physical damage or otherwise become partially or completely unusable due to fire, floods, earthquakes, power loss, telecommunications failures, break-ins, accidents, water shortages, floods, tornadoes, hurricanes, fires, extreme weather conditions, health epidemics, pandemics, and similar events, which may render it difficult or impossible for us to provide our solutions for some period of time. Our laboratories and the equipment we use to perform our R&D or commercialization work could be unavailable or costly and time-consuming to repair or replace. It would be difficult, time-consuming, and expensive to rebuild one of our facilities, particularly in light of the licensure, permits, and accreditation requirements for clinical laboratories like ours. Although we carry insurance for damage to our properties and the disruption of our business, this insurance may not be sufficient to cover all of our potential losses and may not continue to be available to us on acceptable terms, or at all. We have started the process of constructing a new laboratory facility in Irving, Texas to increase product development and operational capacity. Such construction requires significant resources, and we may encounter 69 Table of Contents difficulties and delays in construction, procuring laboratory equipment, obtaining necessary validation, permits, licenses, and certifications (including CLIA certification and College of American Pathologists (“CAP”) accreditation, or completing the technology implementation) for this new facility. If we are unable to complete construction and go-live in a timely and satisfactory manner, obtain the necessary permits, licenses, certificates, and accreditations within our currently anticipated timelines, or meet demand for our solutions at our Arizona facilities, on a timely basis or at all, our reputation and commercial activities would be negatively impacted. We may be unable to regain customers or repair our reputation in the future, which would negatively impact our business, financial condition, and results of operations. We also rely on our third-party collaborators, consultants, contractors, vendors, suppliers, and service providers. The facilities of these partners could be subject to fire, floods, earthquakes, power loss, telecommunications failures, break-ins, accidents, water shortages, floods, tornadoes, hurricanes, fires, extreme weather conditions, health epidemics, pandemics and other natural or man-made disasters or business interruptions. In addition, they may be affected by government shutdowns, changes to applicable laws, regulations, and policies, or withdrawn funding. The occurrence of any of these business disruptions could seriously harm their ability to complete their contracted services to us, which may adversely impact our business, financial condition, and results of operations. If our solutions result in direct or indirect patient harm or injury, we could be subject to significant reputational and liability risks, and our business, financial condition, and results of operations could suffer. Our success depends on the market’s confidence that our solutions, including MI Profile, MI Cancer Seek, Caris Assure, MI Tumor Seek Hybrid, GPSai and other solutions that we may develop in the future, can provide reliable and high-quality results. We believe that patients, physicians, and regulators are likely to be particularly sensitive to errors in the use of our solutions or failure of our solutions to perform as described, and there can be no guarantee that our solutions will meet their expectations. Performance failures could establish a negative perception of our solutions among physicians, patients, and regulators, jeopardize our ability to successfully commercialize our solutions, impair our ability to obtain marketing authorizations or secure favorable coverage and reimbursement, or otherwise result in reputational harm. The costs incurred in correcting any defects or errors may be substantial and could adversely affect our operating margins. Identifying the root cause of quality issues, particularly those affecting reagents and third-party components, may be difficult, which increases the time needed to address quality issues as they arise, and increases the risk that similar problems could recur. In addition, we may be subject to legal claims arising from any errors in the use, manufacture, design, labeling or performance of our solutions, including any false-positive or false-negative results. Our anticipated application of Caris Assure for early detection, MRD tracking, and treatment monitoring poses additional risks. Caris Assure for early detection can be used to detect cancers in patients. A detection of cancer by Caris Assure would need to be followed up with a cancer diagnosis by a physician. Because Caris Assure may not detect all forms of cancer, a negative test would not rule out the presence of cancer. Additionally, an individual undergoing further diagnostic procedures on the basis of a false-positive result or an erroneous cancer lineage could expose us to significant liability and reputational risks, notwithstanding the emotional and mental health effects to which the patient may be exposed. Similarly, an individual who receives a cancer diagnosis shortly following an inaccurate result, such as a negative test or false negative result, may create adverse publicity about our solutions, which could damage our reputation and have a negative impact on our business, financial condition, and results of operations. Failure to accurately detect cancer and other performance failures could establish a negative perception of our solutions among physicians, patients, customers, and regulators, jeopardize our ability to successfully commercialize our solutions, impair our ability to obtain marketing authorizations or secure favorable coverage and reimbursement, or otherwise result in reputational harm or enforcement action or inquiry by a regulatory body. These risks may be more pronounced and could expose us to claims of injury or other adverse events under medical liability, product liability, or other liability laws if a provider uses our tests inaccurately or inappropriately for diagnosis purposes, as our solutions would be directly involved with the choice to use certain treatments. In addition, we may be subject to legal claims arising from any errors in the use, manufacture, design, labeling, marketing, or performance of our products, including from inaccurate results. If our solutions result in direct or indirect participant or patient harm or injury, we could be subject to significant reputational and liability risks, may be required to initiate corrective actions, recalls or suspend sales of our products, which may adversely impact our reputation, business, financial condition, and results of operations. If we were to be sued for product liability or professional liability, we could face substantial liabilities that exceed our resources, including any insurance coverage. The marketing, adoption, and use of our solutions could lead to the filing of product liability claims if someone alleges that our solutions identified inaccurate or incomplete information regarding the genomic alterations of the tumor or malignancy analyzed, reported inaccurate or incomplete information concerning the available therapies for a certain 70 Table of Contents type of cancer, or otherwise failed to perform as designed. We may also be subject to professional liability for errors in, a misunderstanding of, or inappropriate reliance upon, the information we provide in the ordinary course of our business activities. A product liability or professional liability claim could result in substantial damages and be costly and time-consuming for us to defend. We maintain product and professional liability insurance, but this insurance may not fully protect us from the financial impact of defending against product liability or professional liability claims. Any product liability or professional liability claim brought against us, with or without merit, could increase our insurance rates or prevent us from securing insurance coverage in the future. Additionally, any product liability or professional liability lawsuit could damage our reputation or cause current clinical customers to terminate existing agreements with us and potential clinical customers to seek other partners, any of which could adversely impact our business, financial condition, and results of operations. Our business and results of operations will suffer if we fail to compete effectively. The precision oncology industry, which is the focus of our current commercial portfolio, is intensely competitive. Our competitors include numerous companies offering or seeking to offer tissue-based molecular profiling, blood-based early detection, blood-based molecular profiling for therapy selection, MRD tracking, and/or treatment monitoring, core biopharma services, and genomic data and AI services to biopharma companies. Our competitors have or may have substantially greater financial, technical, and other resources, such as larger R&D staff and more well-established marketing and sales forces. Our competitors may succeed in developing, acquiring, or licensing, on an exclusive basis or otherwise, tests or services that are more effective or less costly than our solutions. In addition, established medical technology, biotechnology, or biopharma companies, some of whom may be our customers, may invest heavily to accelerate discovery and development of tests that could make our solutions less competitive than we anticipate. Our ability to compete successfully will depend largely on our ability to: • successfully commercialize and expand the features of our solutions and develop new solutions to achieve meaningful innovation in precision oncology and other chronic disease states; • demonstrate and validate compelling advantages in the performance and convenience of our solutions, including on a cost competitive basis; • achieve market acceptance of our solutions by patients and healthcare providers; • the rate of adoption and/or endorsement of our solutions by clinicians, KOLs, advocacy groups, and biopharma companies; • achieve adequate coverage and reimbursement recognition from governmental payers, health insurance organizations, and other third-party payers for our solutions; • address any technological, scientific, and market developments to differentiate our solutions from products and services offered by current and potential competitors; • attract qualified scientific, data science, clinical development, solution development, and commercial personnel; • obtain, maintain, defend, and enforce patent and other proprietary protection as necessary for our solutions and platform; • obtain and maintain any necessary or desirable marketing authorizations from regulators in the United States and other jurisdictions for any versions of our current solutions and any future solutions that we may develop; • successfully collaborate with institutions in the discovery, development, and commercialization of our solutions; • establish and maintain supply and manufacturing relationships with third parties that can timely and consistently provide adequate, in both amount and quality, products and services to support clinical development and the market demand for our solutions; and • successfully expand our operations infrastructure and implement a successful sales and marketing strategy to support increased commercialization. We may not be able to compete effectively or keep pace with the rapid rate of change in our industry if we are unable to accomplish one or more of these or similar objectives. This could render our solutions obsolete or less attractive, result in significant price reductions, or substantially limit the volume of products that we offer. Failure of, or defects in, our AI/ML models and on-premise, co-located, and cloud-based computing infrastructure, including interruption of services through Amazon Web Services, or increased regulation in the AI/ML space, could impair our ability to process our data, develop solutions, or provide test results, and harm our business and results of operations. The design, development, maintenance, and operation of our technology over time is expensive and complex, and may involve unforeseen difficulties including material performance problems, undetected defects, or errors. 71 Table of Contents Overcoming technical obstacles and correcting defects or errors could prove to be impossible or impracticable, and the costs incurred may be substantial and adversely affect our business, financial condition, and results of operations. Additionally, regulation in the AI/ML space is constantly evolving. See “—Regulatory, social and ethical issues relating to our use of new and evolving technologies, such as AI and ML, may result in reputational harm, additional costs, and liability.” If our technology does not function reliably, fails to meet expectations in terms of performance, or cannot be fully utilized due to increasing regulation, including regulation by the FDA of AI or medical device software, we may be unable to provide, or our customers may stop using, our solutions. We currently host our data on, and conduct certain data analysis through, Amazon Web Services (“AWS”) cloud-based hosting facilities as well as on our own co-located or on-premise computing infrastructure. Any technical problems or outages that may arise in connection with AWS’s or our data center hosting facilities, such as the recent AWS outage, could result in operational disruption, loss of our data or delayed or ineffective data processing. A variety of factors, including infrastructure changes, human or software errors, viruses, malware, security attacks, fraud, denial of service or technical support issues could cause interruptions in our service. Such service interruptions may reduce or inhibit our ability to provide our solutions, delay our clinical trials, and damage our relationships with our customers. We could also be exposed to potential lawsuits, customer reputational impact, liability claims or regulatory actions, for example, if AWS or we experienced a privacy or data security breach. If we were required to transfer our data to an alternative hosting provider, the transfer and acclimation to the new provider could result in significant business delays and subject us to technological risks and require additional resources. Regulatory, social and ethical issues relating to our use of new and evolving technologies, such as AI and ML, may result in reputational harm, additional costs, and liability. We utilize AI/ML algorithms for data analysis of patient information and other data. As with many cutting-edge innovations, AI and ML present new risks and challenges, including social and ethical issues and a quickly evolving legal and regulatory environment, which may cause us to incur increased compliance or R&D costs, or to divert resources from other development efforts. Regulation of AI/ML usage continues to evolve, and limitations placed on the use of data, including personal information, health data, or genetic/genomic data in such systems may make it difficult or more costly for us to continue using our ML algorithms. Existing laws and regulations may be interpreted to apply to us in new ways due to our use of AI and ML, the nature and extent of which are difficult to predict. The risks and challenges presented by AI and ML could undermine public confidence in AI and ML, which could slow its adoption, impact patients’ and physicians’ confidence in our solutions, and otherwise affect our business. Failure to adequately address ethical and social issues related to our use of AI/ML could adversely affect the adoption of our solutions and subject us to reputational harm, regulatory action, or legal liability, which may harm our financial condition and results of operations. Potential government regulation related to AI ethics or usage may also increase the burden and cost of R&D in this area. Certain U.S. states have passed or are considering the passage of laws intended to regulate and/or require disclosures in connection with the usage of AI, including in interactions with customers or other market participants. For example, Colorado passed the Colorado Artificial Intelligence Act, which will require disclosures and compliance efforts associated with different uses of AI, and Utah passed the Utah Artificial Intelligence Policy Act, which requires certain disclosures to customers and confirms companies’ responsibility for legal violations caused by their AI applications. Other states have passed laws regulating the use of AI in patient-facing communications, generation of medical reports,claims processing, and other areas that may in the future apply to or impact our business . It is possible that these or other states or the federal government could pass additional legislation or implement regulations further impacting businesses’ use of AI/ML, which could impact our operations and impose additional costs or liability on us. Additionally, employees or customers who are dissatisfied with our public statements, policies, practices, or solutions related to the development and use of AI and ML may express opinions that could introduce reputational or business harm, or legal liability. We use AI/ML to assist us in making certain diagnostic and benefit prediction decisions, which AI/ML is regulated by certain privacy laws. Due to inaccuracies or flaws in the training, development, inputs, outputs, and logic of an AI/ML model, the model could be biased. Any bias in a model could result in limits on the applicability or accuracy of the model across patient populations or could lead us to make decisions that could disadvantage certain individuals (or classes of individuals) and adversely impact their rights, employment, and ability to obtain certain pricing, products, services, or benefits. 72 Table of Contents We are highly dependent on our key personnel, and if we lose key members of our senior management, scientific or technical teams or are not successful in attracting, motivating, and retaining highly qualified personnel, we may not be successful. Our ability to compete in the competitive precision medicine industry depends upon our ability to attract, motivate, and retain highly qualified personnel. We are particularly dependent on key members of our senior management team, including David D. Halbert, our Founder, Chairman, and Chief Executive Officer. The loss or incapacity of existing members of our senior management team could adversely affect our operations if we experience difficulties in hiring qualified successors and could hamper or delay the development and commercialization of our solutions and harm our business, financial condition, and results of operations. We do not maintain “key person” insurance policies on the lives of these individuals or the lives of any of our other employees. Our R&D programs and laboratory operations depend on our ability to attract and retain highly skilled scientists, technicians, and data scientists. We may not be able to attract or retain qualified scientists and technicians in the future due to the competition for qualified personnel among life science businesses. We also face competition from universities and public and private research institutions in recruiting and retaining highly qualified scientific personnel. In addition, we may have difficulties locating, recruiting, or retaining qualified sales representatives and business development managers. Recruiting and retention difficulties can limit our ability to support our R&D and sales programs. To induce valuable employees to remain at our company, in addition to salary and cash incentives, we provide equity incentive grants with vesting conditions. The value of these equity grants may be significantly affected by movements in our stock price that are beyond our control, and may at any time be insufficient to counteract more lucrative offers made to our employees from other companies. Although we have employment agreements with certain key employees, consistent with all of our employment arrangements, these employment agreements provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice. If we are unable to attract and incentivize highly qualified personnel on acceptable terms, or at all, our business, financial condition, and results of operations may suffer. If our information technology systems or those of third parties with whom we work, or our data are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits, and other adverse consequences. In the ordinary course of our business, we and the third-parties with whom we work collect, store, receive, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, “Process”) personal information, including health-related information, individually identifiable health information and protected health information (“PHI”) as defined by the Health Insurance Portability and Accountability Act, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations (collectively, “HIPAA”), personally identifiable information, credit card and other financial information, and intellectual property and proprietary business information (collectively “Sensitive Information”). As a result, we and the third parties with whom we work face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity, and availability of our information technology and telecommunications systems and Sensitive Information. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including telecommunications or network failures, malicious human acts, and natural disasters. We and the third parties with whom we work are subject to threats from various threat actors, such as state-sponsored organizations, criminal threat actors, organized crime outfits, opportunistic hackers and “hacktivists,” as well as a variety of evolving threats, such as social engineering/phishing (including through deep fakes, which may be increasingly more difficult to identify as fake), malware (including ransomware and as a result of advanced persistent threat intrusions), network reconnaissance and intellectual property theft, use of illegitimate virtual private networks or anonymization tools, malfeasance by insiders (such as personnel misconduct or error), human or technological error, malicious code (such as viruses and worms), denial-of-service attacks, database compromises, business email compromises, credential stuffing, credential harvesting, credential theft, software “bugs,” misconfigurations, or other vulnerabilities in software that is integrated into our (or the third parties with whom we work) IT systems, misuse of company resources and software, lack of adherence to company policy, products or services, adware, attacks enhanced or facilitated by AI, physical or electronic break-ins, earthquakes, fires, floods, and similar disruptive threats. Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times 73 Table of Contents of war and other major conflicts, we and the third parties with whom we work are vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our services. Remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit and in public locations. Additionally, future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program. We depend on information technology and telecommunications systems, including those provided by third parties and their vendors (some of which are legacy systems developed internally and may carry additional information security vulnerabilities), for significant elements of our operations, such as our laboratory information management systems, including test validation, specimen tracking, and quality control; personal information collection, storage, maintenance, and transmission; our profiling report production systems; and our billing and reimbursement, R&D, scientific and medical data analysis, and general administrative activities that collect, store and transmit large amounts of Sensitive Information, including intellectual property, proprietary business information, PHI, and other personal information of our customers, patients, business partners, employees, and contractors on such systems. In turn, the third parties and vendors with whom we work depend upon technology and telecommunications systems provided by outside vendors. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. If the third parties with whom we work experience a security incident or other interruption, we could experience adverse consequences. While we may be entitled to damages if the third parties with whom we work fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award. In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or that of the third parties with whom we work have not been compromised. Cyber-attacks, malicious internet-based activity, online and offline fraud, insider threats and other similar activities are increasing in their frequency, levels of persistence, sophistication, and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we and the third parties with whom we work may be unable to anticipate these techniques or implement adequate preventative measures. We and the third parties with whom we work may also experience security incidents that may remain undetected for an extended period. There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls, or procedures, will be fully implemented, complied with or effective in protecting our information technology and telecommunications systems and Sensitive Information. In addition, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of Sensitive Information and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments. Some of these attacks have also been coupled with attackers directly threatening executives with physical harm. Applicable privacy and data security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents, or to implement other requirements such as providing credit monitoring. Such disclosures and compliance with such requirements are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences. For example, a growing number of legislative and regulatory bodies around the world have adopted breach notification and other requirements in the event that information subject to such laws is accessed by unauthorized persons and additional regulations regarding the use, access, accuracy, and security of such data are possible. In particular, we are a “Covered Entity” as defined under HIPAA, and, in the event of a breach as defined by HIPAA, we have specific reporting requirements under HIPAA regulations. 74 Table of Contents Under HIPAA, in the event of a significant breach, the reporting requirements could include notification to the general public, in addition to affected individuals and certain governmental agencies. In addition, in the United States, we are subject to state and other laws that require notification. Complying with such numerous and complex regulations in the event of unauthorized access would be expensive and difficult, and failure to comply with these regulations could subject us to regulatory scrutiny and additional liability, could harm our reputation and our ability to compete, and could adversely affect our business, financial condition, and results of operations. We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties with whom we work). We may not, however, detect or remediate all such vulnerabilities including on a timely basis. By way of example, in the spring of 2024, a security researcher informed us of a previously unknown vulnerability in one of our systems, which we have remediated. Further, we may experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities. Vulnerabilities could be exploited and result in a security incident. If attackers are able to exploit vulnerabilities before patches are installed or mitigating measures are implemented, compromises could impact our information technology systems and Sensitive Information. Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our Sensitive Information or our information technology systems, or those of the third parties with whom we work. A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our services. If an attacker were to gain sufficient access to our systems, our data contained in those systems could be discovered by the attacker. We, and the third parties with whom we work have been the target of cybersecurity attacks in the past and expect that such cybersecurity incidents will continue to occur in the future. For example, the February 2024 cybersecurity attack on Change Healthcare, who we used to process certain insurance claims, resulted in a delay in our ability to submit claims for payment and could require us to issue notifications to impacted individuals and various regulators if Change Healthcare determines that any PHI of our patients was impacted. While we may be entitled to damages as a result of this incident, any award may be insufficient to cover all such damages, or we may be unable to recover such award. We may expend significant resources or modify our business activities to try to protect against security incidents. Additionally, certain privacy and data security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and Sensitive Information. Despite the precautionary measures we and the third parties with whom we work have taken to detect and prevent or solve problems that could affect our information technology and telecommunications systems and Sensitive Information, there is a risk that our security measures will not be fully effective in the future. Failures or significant downtime of these systems or those used by the third parties with whom we work could prevent us from conducting tests, preparing and providing reports to future customers, billing payers, conducting R&D activities, maintaining our financial controls and other reporting functions, and managing the administrative aspects of our business. Any failure by us or the third parties with whom we work to prevent or mitigate security incidents, or other adverse impact to the availability, integrity, or confidentiality of our information technology systems or Sensitive Information, or improper access to, or use, acquisition, disclosure, alteration or destruction of, any such Sensitive Information, including loss of PHI or other data subject to privacy laws or proprietary business information, could result in operational or business delays, significant liability, regulatory action, a material loss of revenue resulting from the adverse impact on our reputation and brand, a diminished ability to retain or attract new customers, disruption to our business, and adversely affect our business, financial condition, and results of operations. Our existing cyber liability insurance policies may not cover, or may cover only a portion of, any potential claims related to security breaches to which we are exposed or may not be adequate to indemnify us for all or any portion of liabilities that may be imposed. We also cannot be certain that our existing insurance coverage will continue to be available on acceptable terms or in amounts sufficient to cover the potentially significant losses that may result from a security incident or breach or that the insurer will not deny coverage of any future claim. In addition to experiencing a security incident, third parties may gather, collect, or infer Sensitive Information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position. Additionally, Sensitive 75 Table of Contents Information of the Company or our customers could be leaked, disclosed, or revealed as a result of or in connection with our employees’, personnel’s, or vendors’ use of AI/ML technologies. We may not be successful in developing and commercializing new solutions or new applications for our current solutions. We continue to expand our R&D efforts to use our solutions and our multi-modal clinico-genomic datasets to develop enhanced versions of our solutions and create new solutions. These initiatives include expanding the application of Caris Assure to early detection, MRD tracking, and treatment monitoring, developing Caris ChromoSeq for hematological (blood) cancers, developing additional AI signatures using NGS or image data, and additional solutions, including for chronic disease states beyond cancer. The commercialization of any new solutions or new applications for our current solutions will require the completion of certain clinical development activities, validation studies and/or clinical trials, having guidelines or recommendations for healthcare providers, administrators, payers, and patient communities relating to such solutions, and receiving favorable exposure in peer-reviewed publications and from KOLs. We cannot assure you that we can successfully complete the clinical development or applicable subsequent requirements of any such solutions in order to commercialize such solutions. We may fail to build a sustainable data licensing business, and our data licensing efforts may result in reputational harm that has an adverse effect on our business, financial condition, and results of operations. We and our biopharma and academic partners leverage high-powered computing and AI/ML algorithms to analyze our data to find the key molecular characteristics of a particular disease or dysfunction that drives disease. As part of these efforts, we license data to our partners, and certain of our partners license data to us. We are in the early stages of these data licensing efforts and may not be able to grow these efforts into a sustainable business. The outbound licensing of data for research purposes is a novel business model without an established track record, which makes it difficult to evaluate our future prospects and the risks and challenges we may encounter in seeking to execute on this opportunity. Although we have negotiated data licensing agreements with several partners, these partners may have rights to terminate these agreements before the initial term has been completed, and these arrangements may not be renewed, or they may be renewed on less favorable terms. In addition, many of our data licensing agreements involve the use of third-party clinical data that is combined with our molecular data and then licensed to biopharma companies or other end users, and these third-party clinical data partners may not be willing to work with us in the future. We also depend on these third-party partners to provide access to data from their own data partners. We cannot guarantee that our third-party partners will enter into new data sharing arrangements with us, continue to provide their data, or that of their partners, to us, or include their data as part of combined data sets, and in the event that any of these arrangements terminate, we may not be able to find a replacement, or a replacement may not be available on reasonable terms or in a timely manner. Any of the foregoing could result in us losing access to real-world evidence, longitudinal patient data, and clinical outcomes that are key to maintaining, expanding, and enriching our datasets, which could have an adverse effect on our business, financial condition, and results of operations. The commercial market for licensing this type of data may not develop or may be limited by regulation or other factors, which could diminish the value of licensing this data over time and make it challenging to secure arrangements with these partners on similar terms, or at all, with any additional licensees. While our data licensing arrangements include protections against abuse and misuse of patient data, we may be unable to adequately control how our partners, or the commercial customers that they license our data to as part of a combined data set, use the data, and any abuse or misuse could adversely impact our reputation, which could have an adverse effect on our business, financial condition, and results of operations. If we cannot maintain our current relationships, or enter into new relationships, with biopharma companies, our development of solutions could be delayed or our business, financial condition, and results of operations could be adversely affected. We deploy our proprietary profiling and signature offerings to analyze tissue and blood samples provided by biopharma partners. Our success in the future depends in part on our ability to maintain and expand relationships with our biopharma partners. This can be difficult due to several factors, including internal and external constraints placed on these organizations that can limit the number and type of relationships with companies like us they can consider and consummate; that certain of our agreements governing our relationships are terminable at will by our biopharma partners; and that our biopharma partners may be dissatisfied with our services. Continued usage of our services by 76 Table of Contents particular biopharma partners may also depend on whether the partner obtains positive data in its clinical trials, is able to successfully obtain regulatory approval and subsequently commercializes a therapy for which we have partnered with them to develop a companion diagnostic, or other administrative factors that are outside our control. Additionally, some of our biopharma partners have contracted with us to provide profiling for large numbers of samples, which could strain our testing capacity and restrict our ability to perform tests for other customers. If we fail to maintain these relationships or enter into new ones, our business could suffer. From time to time, we expect to engage in discussions with biopharma companies regarding commercial opportunities. There is no assurance that any of these discussions will result in a commercial agreement, or if an agreement is reached, that the resulting engagement will be successful or that any clinical trials conducted as part of the engagement will produce successful outcomes. Speculation in the industry about our existing or potential engagements with biopharma companies can be a catalyst for adverse speculation about us, our services, and our technology, which can result in harm to our reputation and our business. We rely on third-party services to collect, process, transport, and store our samples in a secure and cost-efficient manner. If these services were disrupted, our business would be harmed. We rely on third-party providers to collect tissue and blood samples for our solutions. If third-party providers fail to adequately and properly obtain and collect viable blood and tissue samples from patients and to properly and timely package and ship the samples to us, our patients and their physicians may experience problems and delays in receiving test results, which could lead to dissatisfaction with our solutions, therefore harming our reputation and adversely affecting our business, financial condition, and results of operations. If our current third-party providers become unable to continue to collect samples for us or if our clients are unable to readily access a provider to collect a blood or tissue sample that we can analyze, we may be unable to compete effectively with other laboratories that have greater access to phlebotomy providers and our business, may be harmed. In addition, we may maintain samples and extracted material for several years. It is possible that the long-term stability of these samples may not be maintained with the passage of time, which could negatively impact our ability to use such samples to validate our solutions. Further, interruptions in collection, processing, freezing, storing, or transportation of samples performed by third parties, whether due to labor disruptions, weather conditions, natural disaster, terrorist acts, threats, or for other reasons could adversely affect the samples and our ability to process the samples in a timely manner, which could negatively affect our ongoing research studies and harm our business. The validation and clinical trial process is lengthy and expensive with uncertain outcomes. We have encountered delays, and may encounter future substantial delays, in our validation studies or clinical trials, and may therefore be unable to complete our validation studies or clinical trials on the timelines we expect, if at all, which could adversely impact our ability to market our solutions or receive adequate reimbursement. Clinical testing is expensive, time-consuming, and subject to uncertainty. Initiating and completing validation studies and clinical trials necessary to validate and market our solutions, and to support any submissions to CMS, MolDX, or other payers for reimbursement, or the FDA for marketing authorization for our solutions, will be time-consuming and expensive and the outcomes are inherently uncertain. Validation studies and clinical trials must be conducted in accordance with the laws and regulations of the FDA and other applicable regulatory authorities’ legal requirements and regulations, and are subject to oversight by these governmental agencies and institutional review boards (“IRBs”). The results of preclinical studies and clinical trials of our solutions conducted to date and ongoing or future studies and trials of our current, planned, or future solutions may not be predictive of the results of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. Our interpretation of data and results from our validation studies and clinical trials does not ensure that we will achieve similar results in future validation studies or clinical trials. In addition, preclinical and clinical data are often susceptible to various interpretations and analyses, and many companies that have believed their products performed satisfactorily in validation studies, preclinical studies and earlier clinical trials have nonetheless failed to replicate results in later validation studies or clinical trials. Products in later stages of validation studies or clinical trials may fail to show the desired analytical validity and clinical validity despite having progressed through validation studies, nonclinical studies, and earlier clinical trials. In addition, we cannot guarantee that any validation studies or clinical trials will be conducted as planned or completed on schedule, if at all. The timely completion of validation studies in accordance with their protocols depends, among other things, on our ability to locate and test a sufficient number of samples to demonstrate satisfaction of the validation study criteria. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of participants who remain in the trial until its conclusion. Many of our 77 Table of Contents validation studies and clinical trials require enrolling a large number of participants without cancer who may not see value in enrollment. Additionally, we may encounter delays as a result of the administrative complexities in managing and recruiting for validation studies and trials of this scope and size. If we are unable to recruit and enroll sufficient participants for our validation studies or clinical trials, or maintain sufficient participation of enrolled participants, our product development, commercialization activities and our ability to seek marketing authorization for our solutions could be delayed, modified, or prevented. The initiation and completion of validation studies and clinical trials may be prevented, delayed, or halted for numerous reasons, including related to the following: • the inability to generate sufficient in vitro or in vivo data to support the initiation or continuation of validation studies or clinical trials; • the requirement to submit an IDE application to the FDA, which must become effective prior to commencing certain human clinical trials of significant risk medical devices, and which the FDA may disapprove; • delays caused by participants withdrawing from clinical trials or failing to return for follow-up or by institutions failing to timely submit data, including follow-up data, if at all; • delays or failure in reaching a consensus or agreement, if required, with regulatory agencies on trial design or feedback from regulatory agencies necessitating changes to ongoing or planned clinical trial design; • delays or failure in reaching agreement on acceptable terms with prospective contract research organizations (“CROs”), service providers, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • delays or failure in obtaining any required IRB approvals or ethics committee (“EC”) approvals for our clinical trial sites; • delays in amending, or the inability to amend, our IRB-approved protocols at clinical trial sites when necessary or desired; • difficulty or delays in collaborating with sites, institutions, and investigators; • failure by us, investigators, sites, or participants to comply with the applicable trial protocol or applicable regulatory requirements and standards for data collection, reporting, records maintenance, or data integrity; • failure by us, investigators, sites or any CROs or other third parties to adhere to clinical trial requirements, including the applicable protocol; • failure to perform in accordance with good clinical practice (“GCP”) and good laboratory practice requirements, and/or other applicable regulations and requirements of the FDA or other applicable governmental authorities; • failure to comply with applicable privacy and data security laws related to clinical trials; • failure of our solutions to achieve acceptable performance and safety endpoints; • unacceptable safety findings, including findings related to the risk of the false positive tests (which could lead to unnecessary biopsy or anxiety) or false negative tests (which could lead to a delay in diagnosis or disease progression); • termination or suspension of a trial or site by us or the data safety monitoring board, suspension or termination of a trial or site by an IRB, EC, or institution, or clinical hold or termination of a trial or site by a regulatory authority, including the FDA; • disqualification, termination, or suspension of a clinical investigator; • adverse inspections of our clinical trial sites or results by any applicable regulatory authority, including the FDA; • changes in statutory or regulatory requirements or guidance, or clinical guidelines, that require amending existing or designing new clinical protocols, obtaining new IRB or EC approvals, modifying our clinical trials, modifying our consent process or obtaining additional consent from trial participants, or altering the pathway to marketing authorization of our solutions; • changes in the standard of care on which a clinical development plan was based, which may require new or additional clinical trials; • the cost of clinical trials of our solutions being greater than we anticipate; • destruction or compromise of, or other inability to access or receive, clinical trial samples processed, stored, or managed at a third-party site or otherwise in the control of a third party; • clinical trials of our solutions producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon development programs; and • lack of adequate funding. Any such delays could adversely affect the costs, timing, or successful completion of any future clinical trials. Moreover, we may depend on our collaborators and on medical institutions and CROs to conduct any future clinical trials in compliance with applicable GCP requirements, and while we may have agreements governing their committed activities, we may have limited influence over their actual performance. To the extent any future collaborators, the CROs, 78 Table of Contents or clinical sites fail to enroll participants for our clinical trials, fail to conduct the trial to GCP requirements or are delayed for a significant time in the execution of trials, including achieving full enrollment, we may be affected by increased costs, program delays, and/or enforcement actions. In addition, any future clinical trials that are conducted in countries outside the United States may subject us to further delays and expenses. Any inability to initiate or complete clinical trials successfully could result in additional costs to us, slow down or prevent our product development and receipt of positive reimbursement and coverage decisions, or impair our ability to generate revenue. Delays in initiating or completing our planned clinical trials could also allow our competitors to bring competing products to market before we do or sooner than expected, which could impair our ability to successfully commercialize our solutions, if launched, and may harm our business, financial condition, and results of operations. In addition, many of the factors that may cause, or lead to, a delay in initiation or completion of clinical trials may also ultimately lead to the delay or the narrowing or denial of any marketing authorization we may seek with respect to our solutions. Delays in the initiation or completion of any clinical trial of our solutions, such as Caris Assure for early detection, MRD tracking, or treatment monitoring, or seeking coverage and reimbursement, will increase our costs, slow down, or jeopardize our product development and marketing authorization process, and delay or potentially jeopardize broad adoption of our solutions and their ability to generate revenue. Risks Related to Regulation and Legal Compliance If we or our partners fail to comply with healthcare and other applicable laws and regulations, we could face substantial penalties and sanctions, and our business, reputation, financial condition, and results of operations could be adversely affected. Our operations in the United States are subject to various U.S. federal and state laws and regulations that govern, among other things, the manner in which we provide and bill for tests and collect reimbursement from governmental programs, third-party payers and patients, our relationships with referral sources, and our marketing and advertising activities. In addition, the commercialization of our solutions outside the United States would also subject us to foreign equivalents of the healthcare laws described below, among other foreign laws. The laws that may impact our operations include: • the federal Anti-Kickback Statute (the “AKS”), which prohibits, among other things, knowingly and willfully soliciting, receiving, offering, or paying any remuneration (including any kickback, bribe, rebate, a provision of free or discounted goods, services or items), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order, recommendation, or arrangement of any good, facility, item, or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation, and many courts have interpreted the AKS as being violated if merely one purpose of any arrangement is to induce referrals or purchases. The AKS includes statutory exceptions and regulatory safe harbors that protect certain arrangements. Failure to meet the requirements of an exception or safe harbor, however, does not render an arrangement illegal. Rather, the government may evaluate arrangements that do not fit into an exception or safe harbor on a case-by-case basis, taking into account all facts and circumstances, including the parties’ intent and the arrangement’s potential for abuse, and such arrangements may be subject to greater scrutiny by enforcement agencies; • the Eliminating Kickbacks in Recovery Act of 2018 (“EKRA”), which establishes an all-payer anti-kickback prohibition for, among other things, knowingly and willfully paying or offering any remuneration directly or indirectly to induce a referral of an individual to or in exchange for an individual using the services of a clinical laboratory. EKRA applies to all payers including commercial payers and government payers. EKRA adopted safe harbors that are not directly analogous to the safe harbors under the AKS, and certain conduct that is permissible under the AKS may violate EKRA; • the federal physician self-referral prohibition, commonly known as the Stark Law, which, in the absence of an applicable exception, prohibits a physician from making a referral for certain designated health services covered by the Medicare or Medicaid program if the physician or an immediate family member of the physician has a financial relationship (including an ownership interest or a compensation arrangement) with the entity providing the designated health services. The Stark Law also prohibits the entity furnishing the designated health services from billing, presenting, or causing to be presented a claim for the designated health services furnished pursuant to the prohibited referral. The term “designated health services” includes, among other things, clinical laboratory services. Unlike the AKS, the Stark Law is violated if the financial arrangement does not meet an 79 Table of Contents applicable exception, regardless of any intent by the parties to induce or reward referrals or the reasons for the financial relationship and the referral; • the FCA, which imposes civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment to the government or knowingly make, or cause to be made, a false statement in order to have a false claim paid. Actions under the FCA may be brought by the government or by a private person under a qui tam, or “whistleblower,” suit. There are many potential bases for liability under the FCA. For example, the government has used the FCA to prosecute Medicare and other government healthcare program fraud such as coding errors, coding and billing for tests not compliant with coverage and reimbursement requirements, including MolDX reimbursement and coverage standards and requirements, waiver of patient copayments and deductibles, and performing tests that are not medically necessary or that are substandard in quality. In addition, a claim including items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the FCA, and courts have held that claims for services furnished pursuant to a referral prohibited by the Stark Law also are considered false for purposes of the FCA; • the criminal healthcare fraud provisions of HIPAA and related rules that prohibit knowingly and willfully executing a scheme or artifice to defraud any healthcare benefit program or falsifying, concealing, or covering up a material fact or making any materially false, fictitious, or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items, or services. These criminal healthcare fraud provisions are not limited to benefits, items, or services that may be paid for by federal or state healthcare programs, and similar to the AKS, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation; • the federal Civil Monetary Penalties Law, which provides civil penalties for a wide variety of conduct relating to federal and state healthcare programs, including, subject to certain exceptions, prohibiting, among other things, the offer or transfer of remuneration, including free services, discounts, or waivers of copayments and deductible amounts (or any part thereof), to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier of services reimbursable by Medicare or a state healthcare program; • the federal Physician Payment Sunshine Act, created under the Affordable Care Act (the “ACA”), and its implementing regulations, which require manufacturers of drugs, devices, biologicals, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the U.S. Department of Health and Human Services (“HHS”) under the Open Payments Program, information related to payments or other transfers of value made to physicians (as defined by statute), teaching hospitals and other healthcare practitioners such as physician assistants and nurse practitioners, as well as ownership and investment interests held by such physicians and their immediate family members and similar state laws with various reporting requirements; • state self-referral, kickback, false claim, fraud, and abuse laws, some of which may apply to items or services reimbursed by any payer, including patients and commercial insurers, and include “whistleblower” provisions; • federal and state “Anti-Markup” rules, which, among other things, typically prohibit a physician or supplier billing for clinical or diagnostic tests (with certain exceptions) from marking up the price of a purchased test performed by another physician or supplier that does not “share a practice” with the billing physician or supplier; • federal and state laws applicable to test ordering, documentation of tests ordered, consent requirements, billing practices and claims payment and laws that prohibit other specified practices, such as providing tests at no or discounted cost to induce adoption, which may apply to laboratories; waiving co-insurance, deductibles or other amounts owed by patients; and billing a state healthcare program at a price that is higher than what is charged to other payers; • the “No Surprises Act,” which prohibits balance billing for certain non-emergency care, including for out-of-network clinical laboratory tests, and analogous state laws; • state corporate practice prohibitions and professional fee-splitting laws that prohibit employing, exercising control over, or splitting fees with licensed medical professionals; • federal and state consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and • analogous state and foreign laws and regulations, such as state and foreign anti-kickback, self-referral, false claims, consumer protection, and unfair competition laws that may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements as well as submitting claims involving healthcare items or services reimbursed by any third-party payer, including commercial insurers; state laws that require healthcare companies to comply with the medical device industry’s voluntary compliance guidelines, the relevant compliance guidance promulgated by the federal government that otherwise restricts payments that may be made to healthcare providers, and other potential referral sources or state-specific standards on 80 Table of Contents financial interactions with healthcare providers; state laws that require healthcare companies to file reports with states regarding pricing and marketing information, such as the tracking and reporting of gifts, compensation, and other remuneration and items of value provided to healthcare professionals and entities; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. These laws and regulations, among other things, constrain our business and limit the types of financial arrangements we have with providers, customers, patients, vendors and third-party payers, and our billing, coding, and collection practices, including our patient financial assistance programs and our practices relating to collection of co-payments and deductibles. Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available and lack of clear guidance, our business activities could be subject to challenge under one or more of such laws. To enforce compliance, the Office of the Inspector General (“OIG”) and the DOJ recently have increased their scrutiny of interactions between healthcare companies, on the one hand, and healthcare providers and patients on the other, which has led to a number of investigations, prosecutions, convictions, and settlements in the healthcare industry. These investigations often are focused on billing and coding practices as well as financial arrangements with referral sources and patients. For example, the DOJ and HHS have created a DOJ-HHS False Claims Act working group to identify FCA violations involving priority enforcement areas. We expect that the federal government will continue to devote substantial resources to investigating healthcare providers’ compliance with the FCA and other applicable fraud and abuse laws. We also have been, are currently, and may be in the future, subject to actions or investigations relating to our arrangements and interactions with healthcare professionals and patients. For additional information, see “—We have been, are currently, and in the future may be the subject of government investigations, claims, audits, whistleblower and payer audits, overpayment and recoupment efforts and other litigation in the course of our business that could adversely affect our business and financial results.” Efforts to ensure that our business arrangements will comply with applicable laws, including healthcare laws and regulations, may involve substantial costs. In addition, the healthcare and other laws applicable to our business may change or be amended, and, it is possible that governmental and enforcement authorities will conclude that our business practices do not comply with current or then-existing statutes, regulations, or case law interpreting applicable fraud and abuse or other healthcare or applicable laws and regulations. We may not properly interpret certain requirements or fail to timely report activities, when required. If any such actions are instituted against us, and we are not successful in defending ourselves, those actions could have a material impact on our business, including the imposition of significant civil, criminal, and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, imposition of forward-looking compliance obligations, and curtailment of our operations, any of which could adversely affect our business, financial condition, and our results of operations. We and the third parties with whom we work are subject to stringent and evolving U.S. and foreign privacy and data security laws, regulations, and rules, contractual obligations, industry standards, policies and other obligations related to privacy and data security. Our actual or perceived failure to comply with privacy and data security obligations (or such failure by the third parties with whom we work) could result in significant liability, administrative or governmental penalties, reputational harm and/or, other adverse business consequences. In the ordinary course of business, we process Sensitive Information, including personal information, genetic information, and data about trial participants in connection with clinical trials. These data processing activities subject us to numerous federal, state, and foreign privacy and data security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations, including AI/ML usage, relating to privacy and data security. In the United States, numerous state and federal laws and regulations govern the privacy and security of personal information, including health-related information, such as data breach notification laws, personal information privacy laws, consumer protection laws (for example, Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws). HIPAA establishes a set of national privacy and security standards for the protection of individually identifiable health information, by health plans, healthcare clearinghouses and certain healthcare providers (“Covered Entities”), as well as for entities that perform certain services for or on behalf of such Covered Entities that involve creating, receiving, maintaining, or transmitting PHI (“Business Associates”), and their covered subcontractors. 81 Table of Contents We are a Covered Entity when performing our healthcare services for customers, and also act as a Business Associate when performing certain services for or on behalf of Covered Entities. When we act as a Covered Entity, for example, through services provided by our subsidiary Caris MPI, Inc., we are subject to certain obligations such as notice of privacy practices and secure handling of protected health information. In addition, when we act as a Business Associate of Covered Entities, for example, through services provided by our other entities, we are subject to certain provisions of HIPAA and the terms of any business associate agreements we enter into with such other Covered Entities. In addition, we may obtain health information from third parties that are subject to privacy and security requirements under HIPAA. Under HIPAA, Covered Entities must report breaches of unsecured PHI to affected individuals without unreasonable delay, not to exceed 60 days following discovery of the breach by a Covered Entity or its agents. Notification also must be made to the HHS Office for Civil Rights and, in certain circumstances involving large breaches, to the media. Business associates must report breaches of unsecured PHI to Covered Entities during the timeframe outlined in the operative Business Associate Agreement, but in no event longer than 60 days of discovery of the breach by the Business Associate or its agents. A non-permitted use or disclosure of PHI is presumed to be a breach under HIPAA unless the Covered Entity or Business Associate establishes that there is a low probability the information has been compromised consistent with requirements enumerated in HIPAA. Entities that are found to be in violation of HIPAA as the result of a breach of unsecured PHI, a complaint about privacy practices or an audit by HHS may be subject to significant civil, criminal, and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. HIPAA also authorizes state Attorneys General to file suit on behalf of their residents. Courts may award damages, costs and attorneys’ fees related to violations of HIPAA in such cases. While HIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI. Certain states have also implemented genetic testing and privacy laws imposing specific patient consent requirements and protecting test results by strictly limiting the disclosure of those results. In addition, in the past few years, many U.S. states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data; however, many of these laws have exceptions for entities subject to HIPAA or include exemptions for data subject to HIPAA, including clinical data protected under HIPAA and clinical trial data. For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (“CPRA”) (collectively, “CCPA”), applies to personal information of consumers, business representatives, and employees who are California residents, and gives California residents expanded rights regarding their personal information, including the right to opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for fines of up to $7,500 per intentional violation, as well as a private right of action for certain data breaches. Although the CCPA exempts some data processed in the context of clinical trials and information subject to HIPAA, the CCPA increases compliance costs and potential liability with respect to other personal information we maintain about California residents. We may also be subject to new laws governing the privacy of consumer health data, including genetic information. For example, Washington’s My Health My Data Act broadly defines consumer health data, imposes obligations and restrictions on processing consumer health data (including imposing stringent requirements for consents), provides consumers certain rights with respect to their health data, and creates a private right of action to allow individuals to sue for violations of the law. More than a dozen states have also adopted laws regarding the processing, privacy, and security of genetic information or expanded their comprehensive privacy laws to include additional restriction on companies with respect to processing of sensitive personal information, including genetic information; however, many of these laws have exceptions for entities subject to HIPAA or include exemptions for data subject to HIPAA, including clinical data protected under HIPAA and clinical trial data. Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future. While several of these laws exempt some data processed in the context of clinical trials or deidentified information under HIPAA, such laws could have potentially conflicting requirements and may increase our compliance costs and potential liability. We could be adversely affected if such laws and other state or federal legislation or regulations applicable to us require changes in our business practices (including our ability to license 82 Table of Contents deidentified information to biopharma companies) or privacy policies, or if governing jurisdictions interpret or implement their legislation or regulations in ways that adversely affect our business, financial condition, and results of operations. Furthermore, violation of consumers’ privacy rights or failure to take appropriate steps to keep consumers’ personal information secure may constitute unfair and/or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, including entities subject to HIPAA. The Federal Trade Commission (“FTC”) expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Individually identifiable health information is considered sensitive data that merits particularly strong safeguards. We publish privacy policies, marketing materials, and other statements, such as compliance with certain certifications or self-regulatory principles, regarding privacy and data security. If these policies, materials, or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences. In addition, we seek to utilize biological samples and data from participants in our clinical trials and validation studies in accordance with applicable law, IRB requirements, and participant permissions (through consent forms and HIPAA authorizations). If we are unable or significantly restricted in using participant samples and data for secondary research purposes, our ability to develop additional solutions and/or improve or refine existing solutions will be limited, which may impact our business and prospects. Moreover, we are subject to laws, regulations, and standards governing certain marketing, advertising, and other communications conducted by telephone, fax, or text. In particular, sending short message service text messages to participants and prospective participants in our clinical trials is governed by the Telephone Consumer Protection Act (“TCPA”) which imposes various consumer consent requirements and other restrictions on communications with consumers. Although we may be able to rely on certain exemptions for healthcare-related purposes, any actual or perceived violations of the TCPA can result in significant financial penalties, including penalties or criminal fines imposed by the Federal Communications Commission or fines of up to $1,500 per violation imposed through private litigation or by state authorities. In addition, because we accept debit and credit cards payments, we are subject to the Payment Card Industry Security Standard (“PCI-DSS”), issued by the Payment Card Industry Security Standards Council; however, we rely on third-party payment processors to process such payments who are also separately subject to PCI-DSS. Noncompliance with PCI-DSS can result in penalties ranging from $5,000 to $100,000 per month by credit card companies, litigation, damage to our reputation, and revenue losses. If we or our third-party payment processors are unable to comply with the PCI-DSS, we may be subject to fines, restrictions, expulsion from card acceptance programs, or other consequences which could affect our business. Moreover, it is not guaranteed that PCI-DSS compliance will prevent illegal or improper use of our third-party payment processors’ payment systems or the theft, loss or misuse of payment card data or transaction information. Our business also increasingly relies on AI to improve our services. However, the development and use of AI presents various privacy and data security risks that may impact our business and is subject to various laws. For example, several countries, states, and localities have proposed or enacted measures related to the use of AI in products and services, including the EU’s AI Act, which may limit our ability to utilize AI or make utilization of such technology more expensive. The effects of these regulations are difficult to predict, and we expect other jurisdictions will adopt similar laws. Additionally, certain privacy laws extend rights to consumers (such as the right to delete certain personal information) and regulate automated decision making, which may be incompatible with our use of artificial intelligence. These obligations may make it harder for us to conduct our business using artificial intelligence, lead to regulatory fines or penalties, require us to change our business practices, retrain our artificial intelligence, or prevent or limit our use of artificial intelligence. For example, the FTC has required other companies to turn over (or disgorge) valuable insights or trainings generated through the use of AI where they allege the company has violated privacy and consumer protection laws. If we cannot use AI or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage. Outside the United States, an increasing number of laws, regulations, and industry standards may govern privacy and data security. For example, the European Union General Data Protection Regulation (the “EU GDPR”) and to the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (collectively, the “UK GDPR”) (the EU GDPR and UK GDPR together referred to as the “GDPR”) impose strict requirements for processing personal data. The GDPR imposes stringent and comprehensive data protection requirements, and provides for greater penalties for 83 Table of Contents noncompliance. The GDPR expands the rights that individuals have to request access, correction, and deletion of their personal data, although certain exceptions exist for scientific research, and makes notification of data breaches to supervisory authorities and data subjects mandatory in certain circumstances. In addition, the GDPR imposes additional compliance obligations and local law derogations in relation to the processing of special category or sensitive personal data under the GDPR (e.g., health data); we may be subject to diverging requirements under EU member state laws and the United Kingdom (“UK”) laws, such as whether consent can be used as a legal basis for processing. Where we rely on consent as a legal basis for processing, the validity of informed consent from patients may be challenged, which could force us to stop offering our services, which could hinder our business and operations. In addition, as laws develop, we may need to make operational changes to adapt to diverging rules, which could increase our costs and adversely affect our business. The GDPR also regulates cross-border transfers of personal data outside of the EEA (in the case of the EU GDPR) and UK (in the case of the UK GDPR) and recent case law and regulatory guidance have increased legal complexity and uncertainty regarding international personal data transfers, which we expect to continue. In particular, we expect international transfers to the United States and to other jurisdictions more generally to continue to be subject to enhanced scrutiny by regulators. As the regulatory guidance and enforcement landscape in relation to data transfers continue to develop, we could suffer additional costs, complaints and/or regulatory investigations or fines; we may have to stop using certain tools and vendors and make other operational changes. Penalties and fines for failure to comply with the GDPR include fines of up to 20 million euros under the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater, and since we are subject to the supervision of relevant data protection authorities under both the EU GDPR and UK GDPR, we could be fined under each of those regimes independently in respect of the same breach. In addition to fines, a breach of the EU GDPR and/or UK GDPR may result in regulatory investigations, reputational damage, orders to cease/ change our data processing activities, enforcement notices, assessment notices (for a compulsory audit) and/ or civil claims (including class actions). In addition, we may be unable to transfer personal data from Europe and other jurisdictions to the United States or other countries due to data localization requirements or limitations on cross-border data flows. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries. In particular, we expect the existing legal complexity and uncertainty regarding international data transfers from the European Economic Area (“EEA”) and the UK to continue. Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws. Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA’s standard contractual clauses, the UK’s International Data Transfer Agreement/Addendum, and the EU-U.S. Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges. As the regulatory guidance and enforcement landscape in relation to data transfers continues to develop, there is no assurance that we can continue to satisfy or rely on these measures to lawfully transfer personal data to the United States. If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business. Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups. Some European regulators have ordered certain companies to suspend or permanently cease certain transfers of personal data out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations. We furnish biopharma partners and academic researchers information that has been de-identified in accordance with applicable laws, regulations, and the requirements governing the clinical trial. Any data transferred pursuant to international health information privacy regulations is transferred under relevant data protection agreements at the direction of the Data Controller. We may also furnish our biopharma partners and academic researchers with identifiable genomic information for research purposes, so long as such disclosure has been consented to by the patient and/or approved by an IRB or other ethical or privacy review board. The laws of certain states and countries may require specific consent from the individual either to retain or utilize certain genetic information for research or other purposes even if such information has been de-identified, or may require that we obtain a waiver of such consent from an ethical or privacy review board. Even where we furnish to biopharma partners and academic researchers genomic information that has been de-identified in accordance with applicable laws and regulations, biopharma partners or academic researchers may use technology or other methods to link that de-identified genomic information to the patient from whom it was 84 Table of Contents obtained in contravention of one or more applicable laws and regulations. A finding that we have failed to comply with any such laws and any remedial activities required to ensure compliance with such laws could cause us to incur substantial costs, to be subject to unfavorable publicity or public opinion, to change our business practices, or to limit the retention or use of genetic information in a manner that, individually or collectively, could be adverse to our business. Obligations related to privacy and data security (and consumers’ data privacy expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty. For example, HHS issued a notice of proposed rulemaking on January 6, 2025, clarifying existing requirements and imposing new security requirements for entities subject to HIPAA. The agency received thousands of proposed comments, and may adjust or clarify the rule as part of the rule making process. It is uncertain whether the proposed rule will move forward in its current state and what the timing of a final rule will be. If adopted in a form similar to the proposed rule, we anticipate our compliance costs could increase substantially. We would need to invest in additional cybersecurity technologies, hire specialized personnel, and potentially redesign certain aspects of our systems and processes. These investments were not contemplated in our current business plan and could impact our profitability. If we are unable to comply with new requirements by any prescribed deadlines, we could face penalties, enforcement actions, reputational damage, and potential loss of business from customers. While we have begun assessing our current security posture against the proposed requirements, the uncertainty regarding the final rule makes comprehensive preparation difficult. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions. We also expect that there will continue to be new laws, regulations, and industry standards concerning privacy and data security proposed and enacted in various jurisdictions in which we do business. In addition to privacy and data security laws, we are also bound by other contractual obligations related to privacy and data security. Preparing for and complying with these obligations requires us to devote significant resources and may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal data on our behalf. Compliance with privacy and data security obligations could cause us to incur substantial costs or require us to change our business practices and compliance procedures in a manner adverse to our business. We strive, and contractually obligate our vendors, to comply with applicable laws, regulations, policies, and other legal obligations relating to privacy and data security. However, the various regulatory frameworks for privacy and data protection are, and are likely to remain, uncertain, and it is possible that these or other actual or alleged obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules and subject our business practices to uncertainty. In addition, it is not guaranteed that regulators or consumers will agree with our interpretation of our obligations or our steps to comply with them. Any actual or perceived failure by us to comply with privacy and data security laws, rules, regulations, industry standards and other obligations could result in proceedings or actions against us by individuals, consumer rights groups, government agencies, or others, or orders to cease/ change our data processing activities. We could incur significant costs in investigating and defending such claims and, if found liable, pay significant damages or fines or be required to make changes to our business practices. Further, these proceedings and requires to any subsequent adverse outcomes may subject us to significant negative publicity and an erosion of trust. If any of these events were to occur, our business, financial condition, and results of operations could be adversely affected. We have current solutions marketed as LDTs and plan to launch future solutions as LDTs. The regulation of LDT products in the United States remains subject to significant uncertainty, and if we fail to comply with any new or existing legal requirements with respect to our LDT solutions, our business, financial condition, and results of operations could be adversely affected. We have obtained PMA approval from the FDA for MI Cancer Seek as a companion diagnostic device. We have also contemplated seeking FDA approval for Caris Assure and additional solutions. Except for MI Cancer Seek, we currently offer our NGS solutions, MI Tumor Seek Hybrid and Caris Assure, and our AI solutions, such as GPSai and FOLFIRSTai, as LDTs. The FDA has historically considered LDTs to be IVD tests that are intended for clinical use and are designed, manufactured, and used within a single laboratory, and the FDA has historically viewed LDTs as medical devices subject to FDA’s medical device authority. Notwithstanding this position, the FDA historically exercised enforcement discretion and did not enforce certain medical device requirements, including requirements for premarket review, with respect to LDTs, with certain exceptions. Even under that enforcement discretion policy, the FDA has issued warning letters to, and published Medical Device Safety Communications about, manufacturers for commercializing laboratory tests that were purported to be LDTs but the FDA alleged failed to meet the definition of an LDT or that otherwise were not subject to the FDA’s prior 85 Table of Contents enforcement discretion policy. If our current solutions fail to meet the definition of an LDT, our business, financial condition, and results of operations could be adversely affected. However, the FDA had for a number of years stated its intention to modify its enforcement discretion policy with respect to LDTs and enforce applicable medical device requirements to LDTs more broadly, and on May 6, 2024, the FDA issued a final rule in effort to clarify the FDA’s historical view that LDTs are medical devices subject to the requirements applicable to IVDs (the “LDT Final Rule”), and to phase out the FDA’s enforcement discretion policy over a period of four years from issuance of the LDT Final Rule. However, on March 31, 2025, the United States District Court for the Eastern District of Texas vacated the LDT Final Rule, reasoning that LDTs are not medical devices, and remanded the matter to the FDA for further consideration. The FDA did not appeal the ruling within the required timeline and in August 2025 sent a final rule to the White House for review that would officially rescind the LDT Final Rule. Accordingly, it is uncertain whether or when the FDA may be able to otherwise exercise its medical device authority with respect to LDTs. This uncertainty could adversely affect the FDA’s ability to apply and enforce its medical device requirements with respect to diagnostic tests more broadly, including any LDTs for which we have obtained or plan to obtain PMAs. Such uncertainty and the FDA’s actions in response could have a material adverse effect on our business and operations. In light of this uncertainty, we do not know if or when our offerings could become or will remain subject to FDA medical device requirements, including the need to seek and obtain marketing authorization. If we were unable to comply with any medical device requirements applicable to LDTs if and when such requirements become applicable, we could be required to cease marketing any solutions that we market as LDTs. In addition, further efforts by the FDA or Congress to impose more regulation on LDTs could create a negative public perception about the validity, safety, effectiveness, or performance of LDTs, including our solutions, which could adversely affect patient, provider, and customer perception about, and confidence in, our solutions. Moreover, the FDA may assert that we are improperly marketing our solutions as LDTs, or otherwise assert we do not comply with applicable requirements, and in such cases may take enforcement action against us and/or require premarket review and marketing authorization, which may require us to cease marketing any commercially marketed solutions that are marketed as LDTs until such marketing authorization is obtained or the applications are submitted. There can be no assurance that we will be able to obtain such marketing authorization or that any labeling claims would be consistent with the claims we have made or intend to make for such solutions when launched as LDTs, or that such claims will be adequate to support continued adoption of and reimbursement for our solutions. In the event we are required to seek FDA marketing authorization for any current or planned LDT solutions, the FDA may request that we provide additional analyses and information beyond that which we intend to produce based on the designs of our current and planned validation studies or clinical trials, or that we modify or narrow our intended use or product claims. It is possible that the FDA, among other things, could disagree with our interpretation of data we have relied on to support our LDT launches for our intended uses. If we are required to provide additional analyses or additional data or perform additional clinical trials beyond those we currently contemplate to support the intended uses of our solutions, our planned commercial launches may be delayed and we may be required to cease commercialization of any solutions we currently market as LDTs. Even if our solutions are allowed to remain on the market prior to any required marketing authorization, demand or reimbursement for our solutions may decline if there is uncertainty about our solutions, if we are required by the FDA to label our solutions as RUO or IUO, or if the FDA limits the labeling claims we are permitted to make for our solutions. As a result, we could experience significantly increased development costs and a delay in generating additional revenue from our current or future solutions, which could reduce our revenues or increase our costs and adversely affect our business, financial condition, and results of operations. Additionally, an FDA enforcement action against us, a delay in the launch of our solutions, or significantly narrowing their intended uses, could negatively impact our business, financial condition, and results of operations. In addition, Congress has, for over the past decade, considered a number of proposals, which if enacted, would subject LDTs to additional regulatory requirements. Any such legislation could substantially alter our marketing of LDTs and negatively impact our business, financial condition, and results of operations. Our early detection and MRD tracking assays are intended to introduce new approaches to cancer detection, which present a number of novel and complex issues for FDA review. Because the FDA has never provided marketing authorization for an early detection test and has only granted marketing authorization in limited instances for MRD tests, it is difficult to predict what information we will need to submit to obtain approval of a PMA from the FDA for a 86 Table of Contents proposed intended use of early detection or MRD tracking, or if we will be able to obtain such approval on a timely basis or at all. To our knowledge, the FDA has never granted marketing authorization for an early detection test and has only granted marketing authorization in limited instances for MRD tests. Therefore, obtaining FDA approval for Caris Assure for early detection and/or MRD tracking presents a number of novel issues. For example, in November 2023, the Molecular and Clinical Genetics Panel (the “Panel”) of the FDA’s Medical Devices Advisory Committee held a public meeting in which the Panel discussed and made recommendations on the design of MCED IVD devices as well as potential study designs and study outcomes of interest that could inform the assessment of the probable benefits and risks of MCED screening tests. The FDA may continue to modify its thinking on how to evaluate the performance of these types of tests, as well as its views around MRD tests. As such, we believe the FDA requirements that will govern any early detection or MRD tracking test we develop, as well as the breadth and nature of data we must provide the FDA, to support the proposed intended use, will remain subject to change. Given the novel nature and complexity of our early detection and MRD tracking assays, we cannot be certain whether we will receive FDA marketing authorization for our screening tests and whether the trials we eventually conduct will be sufficient to provide the data that the FDA requires to support a proposed intended use. The FDA may require us to perform new analyses of future clinical data or perform additional clinical trials beyond any trials that we may conduct in the future. We may be required to undertake significant efforts to address the FDA requests, which could delay or prevent approval, lead to a more limited intended use statement than the broader intended use statement we plan to pursue, and/or lead to significant post-approval limitations or restrictions, if approval is obtained at all. Our business could be adversely affected by legal challenges to our business model or by actions restricting our ability to provide the full range of our solutions. Many states prohibit, by statute, regulation, guidance from professional licensing boards or state attorneys general or under common law, the unlicensed practice of medicine. Corporate practice restrictions are generally designed to prohibit a non-professional entity, such as us, from practicing medicine, employing physicians, or controlling or unduly influencing the professional practice and clinical decision making of physicians. The laws relating to corporate practice vary from state to state and are subject to change and to evolving interpretations by courts, state licensing boards and state attorneys general, among others. Further, changes to the membership or staff of state agencies, licensing boards or attorney general offices could lead to increased enforcement of these laws and regulations. In addition, many states also have laws that prohibit a non-professional entity or individual from sharing in or splitting profits or professional fees for patient care, often referred to as “fee-splitting.” Some states also prohibit entities from engaging in certain financial arrangements, such as fee-splitting, with physicians. The laws relating to fee-splitting also vary from state to state and are not fully developed or uniformly enforced. Generally, these laws restrict business arrangements that involve a physician sharing professional fees with a non-professional source, but in some states, these laws have been interpreted to extend to other agreements between physicians and business entities under some circumstances. Our test reports delivered to physicians provide information regarding solutions that oncologists and other physicians may use in making treatment decisions for their patients. We also employ pathologists and other medical professionals that interpret results of our solutions and sign our profiling results. These pathologists, physicians and other medical professionals are employed through our subsidiary non-profit corporation, Caris Molecular Pathology, which we believe complies with state corporate practice prohibitions and professional fee-splitting prohibitions. A governmental authority or other parties could allege that the business practices and services we provide constitute the practice of medicine or violate professional fee-splitting prohibitions and that our structure and arrangements are not compliant. A state may seek to have us discontinue the related services we provide, or subject us to fines, penalties, or other sanctions. Any determination that we are practicing medicine without a license may result in significant liability to us, and our business and reputation would be harmed. Obtaining and maintaining regulatory authorization of our solutions in one jurisdiction does not mean that we will be successful in obtaining regulatory authorization of our solutions in other jurisdictions. Obtaining and maintaining regulatory authorization of solutions in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory authorization in any other jurisdiction, but a failure or delay in obtaining regulatory authorization in one jurisdiction may have a negative effect on the regulatory authorization process in others. For example, even if the FDA or a comparable foreign regulatory authority grants marketing authorization for our solutions, comparable regulatory authorities in foreign jurisdictions may also need to authorize the solutions in those countries. Premarket authorization processes vary among jurisdictions and can involve requirements and administrative 87 Table of Contents review periods different from those in the United States, including additional clinical trials, because clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions or the data may not be considered applicable to the jurisdiction’s intended patient population. For example, while we have obtained a PMA approval from the FDA for MI Cancer Seek, we do not have any non-U.S. approvals for this solution, and there can be no assurance that we receive any such approvals in the future. In some cases, the price that we intend to charge for our solutions may also be subject to approval. In addition, NY CLEP approval is required in order to market LDTs in New York State. We have not received NY CLEP approval for Caris Assure. Obtaining foreign regulatory authorization and maintaining compliance with foreign regulatory requirements could result in significant delays, difficulties, and costs for us and could delay or prevent the introduction of our solutions in certain countries. If we fail to comply with the regulatory requirements in other jurisdictions, or we fail to receive necessary or desirable marketing authorizations in other jurisdictions, our target market will be reduced and our ability to realize the full market potential of our solutions will be harmed. Our employees, independent contractors, consultants, commercial partners, customers, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. We are exposed to the risk of fraud, misconduct, or other illegal activity by our employees, independent contractors, consultants, commercial partners, customers, and vendors. Misconduct by these parties could include intentional, reckless and negligent conduct that fails to: comply with the rules and regulations of the CMS, the FDA, and other comparable foreign regulatory authorities; provide true, complete and accurate information to such regulatory authorities; comply with manufacturing and clinical laboratory standards; comply with healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws; or report financial information or data accurately or to disclose unauthorized activities to us. Since we began commercializing MI Profile, Caris Assure and our earlier solutions in the United States, our potential exposure under such laws has increa