What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-12 compared with 2025-03-05 · 565 added, 555 removed, 787 unchanged (59% of the section changed)

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Consolidated Statements of Comprehensive Loss

Consolidated Statements of Equity

Consolidated Statements of Stockholders’/ Member’s Equity

Consolidated Statements of Cash Flows

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We have audited the accompanying consolidated balance sheets of GRAIL, Inc.

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders’/member’s equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

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We have served as the Company’s auditor since 2023.

San Diego, California

San Mateo, California

March 12, 2026

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Intangible assets, net 1,850,556 2,016,890

Goodwill — 888,936

Other non-current assets 6,753 7,773

Total assets $ 2,922,015 $ 2,983,307

Liabilities and stockholders’/member’s equity

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable $ 2,083 $ 4,844

$ 4,844 $ 19,673

Accrued liabilities (5)

63,945 57,241

Incentive plan liabilities — 54,513

Operating lease liabilities, current portion 11,715 13,260

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Commitments and contingencies (Note 10)

Stockholders’/member’s equity:

Stockholders’ equity:

Preferred stock, par value of $ 0.001 per share;

50,000,000 shares authorized, no shares issued and outstanding as of December 31, 2025 and December 31, 2024

Common stock $ 0.001 par value per share, 1,500,000,000 shares authorized, 33,893,409 shares issued and outstanding as of December 31, 2024, no shares authorized, issued and outstanding as of December 31, 2023

Common stock $ 0.001 par value per share, 1,500,000,000 shares authorized, 40,331,360 and 33,893,409 shares issued and outstanding as of December 31, 2025 and December 31, 2024.

Additional paid-in capital 12,786,848 12,305,250

Member’s equity — 11,421,446

Accumulated other comprehensive income 2,655 1,451

Accumulated deficit ( 10,211,681 ) ( 9,803,330 )

Total stockholders’/member’s equity 2,503,405 3,646,187

Total liabilities and stockholders’/member's equity $ 2,983,307 $ 3,913,814

(1) Includes related party accounts receivable, net of $ 65 and $ 80 , respectively.

(2) Includes related party supplies of $ 3,130 and $ 5,855 , respectively.

(3) Includes related party prepaid expenses and other current assets of $ 77 and $ 41 , respectively.

(4) Includes related party property and equipment, net of $ 2,227 and $ 3,640 , respectively.

(5) Includes related party accounts payable of $ — and $ 168 , respectively.

(6) Includes related party accrued liabilities of $ 104 and $ 95 , respectively.

Total stockholders’ equity 2,577,862 2,503,405

Total liabilities and stockholders’ equity $ 2,922,015 $ 2,983,307

(1) Includes related party accounts receivable, net of nil and $ 65 , respectively.

(2) Includes related party supplies of nil and $ 3,130 , respectively.

(3) Includes related party prepaid expenses and other current assets of nil and $ 77 , respectively.

(4) Includes related party property and equipment, net of nil and $ 2,227 , respectively.

(5) Includes related party accrued liabilities of nil and $ 104 , respectively.

See accompanying notes to consolidated financial statements.

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(Amounts in thousands, except per share data)

2024 December 31,

2023 January 1,

Screening revenue (1)

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Cost of revenue — amortization of intangible assets

133,889 133,889 133,889

Research and development (4)

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Sales and marketing

116,693 153,958 162,292

General and administrative (5)

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Goodwill and intangible assets impairment

28,000 1,420,936 718,466

Total costs and operating expenses 709,335 2,314,753 1,608,487

Loss from operations

Other income:

( 562,163 ) ( 2,189,158 ) ( 1,515,382 )

Interest income

28,652 26,733 7,954

Other income (expense), net

( 993 ) 64 ( 208 )

Total other income, net 27,659 26,797 7,746

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Benefit from income taxes

126,153 135,356 41,951

Net loss $ ( 408,351 ) $ ( 2,027,005 ) $ ( 1,465,685 )

Net loss per share — Basic and Diluted

$ ( 11.11 ) $ ( 63.54 ) $ ( 47.21 )

Weighted-average shares of common stock used in computing net loss per share:

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(4) Includes related party research and development expenses of $ 3,306 , $ 18,843 and $ 19,508 , respectively.

(5) Includes related party general and administrative expenses of $ 104 , $ 206 and $ 614 , respectively.

(5) Includes related party general and administrative expenses of nil , $ 104 and $ 206 , respectively.

See accompanying notes to consolidated financial statements.

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(in thousands)

2024 December 31,

2023 January 1,

Net loss $ ( 408,351 ) $ ( 2,027,005 ) $ ( 1,465,685 )

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Foreign currency translation adjustment

1,094 119 172

Comprehensive loss $ ( 407,147 ) $ ( 2,026,620 ) $ ( 1,465,513 )

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’/ MEMBER’S EQUITY

(Amounts in thousands, except share data)

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Stock-based compensation expense — — 1,773 — — — 1,773

Other comprehensive loss — — — — 579 — 579

Contribution from member, net — — 604,273 — — — 604,273

Balance as of January 1, 2023 — $ — $ 10,955,907 $ — $ 894 $ ( 6,310,640 ) $ 4,646,161

Net loss — — — — — ( 1,465,685 ) ( 1,465,685 )

Stock-based compensation expense — — 1,773 — — — 1,773

Other comprehensive loss — — — — 172 — 172

Other comprehensive income — — — — 172 — 172

Contribution from member, net — — 463,766 — — — 463,766

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Disposal funding received in connection with the Spin-Off* — — 932,300 — — — 932,300

Issuance of common stock in connection

with the Spin-Off and reclassification of

contribution from member, net* 31,049,148 31 ( 12,218,882 ) 12,218,851 — — —

Issuance of common stock in connection with the Spin-Off and reclassification of contribution from member, net* 31,049,148 31 ( 12,218,882 ) 12,218,851 — — —

Vesting of restricted stock units 2,844,261 3 — ( 3 ) — — —

Balance as of December 31, 2024 33,893,409 34 — 12,305,250 1,451 ( 9,803,330 ) 2,503,405

Net loss — — — — — ( 408,351 ) ( 408,351 )

Stock-based compensation expense — — — 58,283 — — 58,283

Other comprehensive income — — — — 1,204 — 1,204

Vesting of restricted stock units 2,491,212 2 — ( 2 ) — — —

Issuance of common stock under ESPP 136,551 — — 4,525 — — 4,525

Issuance of common stock and pre-funded warrants in connection with the PIPE, net of issuance costs 2,640,970 3 — 311,316 — — 311,319

Issuance of common stock in connection with the ATM program, net of issuance costs 1,169,218 1 — 107,476 — — 107,477

Balance as of December 31, 2025 40,331,360 $ 40 $ — $ 12,786,848 $ 2,655 $ ( 10,211,681 ) $ 2,577,862

*See Note 1 — Organization And Description Of Business for more information on the Spin-Off.

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2025 December 31,

2023 January 1,

2024 December 31,

Cash flows from operating activities

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Stock-based compensation expense 58,283 86,084 97,235

Cash payment for equity awards ( 53,807 ) ( 76,910 ) ( 41,009 )

Deferred income taxes ( 126,153 ) ( 134,251 ) ( 38,153 )

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Goodwill and intangible assets impairment 28,000 1,420,936 718,466

Credit loss expense 332 — —

Cash payment for equity awards — ( 53,807 ) ( 76,910 )

Other 1,347 276 2,829

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Purchases of marketable securities ( 1,308,340 ) ( 545,803 ) —

Net cash used by investing activities ( 551,011 ) ( 12,887 ) ( 22,859 )

Proceeds from maturities of marketable securities 1,224,200 — —

Net cash used in investing activities ( 85,049 ) ( 551,011 ) ( 12,887 )

Cash flows from financing activities

Proceeds from issuance of common stock and pre-funded warrants in connection with the PIPE, net of issuance costs 311,319 — —

Proceeds from issuance of common stock in connection with the ATM program, net of issuance costs 107,477 — —

Issuance of common stock under ESPP

Cash funding received from Illumina — 1,244,300 464,000

Taxes paid related to net share settlement of equity awards — ( 234 ) ( 4,183 )

Other — — ( 234 )

Net cash provided by financing activities 423,321 1,244,300 463,766

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(3) Includes changes in related party prepaid and other current assets of $( 77 ), $( 36 ) and $ 27 , respectively.

(4) Includes changes in related party accounts payable of $( 168 ), $( 2,965 ) and $ 2,331 , respectively.

(4) Includes changes in related party accounts payable of nil , $( 168 ) and $( 2,965 ), respectively.

(5) Includes changes in related party accrued liabilities of $ 104 , $ 9 and $ 91 , respectively.

(6) Includes related party purchases of property and equipment of $ — , $( 2,644 ) and $( 1,755 ), respectively.

(6) Includes related party purchases of property and equipment of $( 591 ), nil and $( 2,644 ), respectively.

See accompanying notes to Consolidated financial statements .

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ORGANIZATION AND DESCRIPTION OF BUSINESS

(“GRAIL” or the “Company”), headquartered in Menlo Park, Californi a , is an innovative commercial-stage healthcare company focused on saving lives and shifting the paradigm of early cancer detection.

(“GRAIL” or the “Company”), headquartered in Menlo Park, Californi a , is an innovative commercial-stage healthcare company focused on shifting the paradigm of early cancer detection.

The Company’s Galleri blood test is a commercially available screening test for early detection of multiple types of cancer.

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GRAIL was previously acquired by Illumina, Inc.

(”Illumina”) in August 2021, at which point it became a 100 % owned subsidiary of Illumina, and held separate as a part of binding hold separate commitments implemented pursuant to orders issued by the European Commission.

See Note 10 — Legal And Regulatory Proceedings for additional details.

(”Illumina”) in August 2021 (the “Acquisition”), at which point it became a 100 % owned subsidiary of Illumina, and held separate as a part of binding hold separate commitments implemented pursuant to orders issued by the European Commission.

GRAIL separated from Illumina on June 24, 2024, as described below.

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As a result of the Distribution, the Company became an independent public entity.

Illumina’s ownership of GRAIL reduced to 14.5 % after the Spin-Off.

Illumina’s ownership of GRAIL reduced to 4,502,126 shares of common stock representing 14.5 % ownership of the Company after the Spin-Off.

Unless the context otherwise requires, references to the Company or GRAIL, refer to (i) GRAIL, LLC prior to the Conversion and (ii) GRAIL, Inc.

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• Tax Matters Agreement — governs the respective rights, responsibilities and obligations of Illumina and the Company after the Spin-Off with respect to all tax matters and includes restrictions to preserve the tax-free status of the Distribution.

See Note 13 — Taxes for more information regarding income taxes and Note 10 — Legal And Regulatory Proceedings regarding the contingencies related to this agreement.

See Note 14 — Taxes and Note 11 — Legal And Regulatory Proceedings regarding income taxes and the contingencies related to this agreement.

• Employee Matters Agreement — addresses employment, compensation, and benefits matters, including the allocation and treatment of assets and liabilities relating to employees and compensation and benefits plans and programs in which GRAIL employees participate, as well as the treatment of cash-based incentive awards in connection with the Spin-Off.

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See Note 16 — Related Party Transactions for more information regarding the royalty arrangements with Illumina.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Illumina provided the Company with disposal funding (the “Disposal Funding”) in the amount of $ 932.3 million in accordance with the Separation and Distribution Agreement, subject to a clawback feature in the event that the Company (i) consummates a change in control transaction, sells or licenses substantially all of its assets or adopts a plan of liquidation (collectively, a “GRAIL Change of Control”), or (ii) (1) pays any dividend on, or makes any other distribution in respect of, any shares of its capital stock or other equity or voting interests (other than a stock dividend or a stock split), or otherwise consummates a return of capital from the Company to any of its equity holders or (2) redeems, purchases or otherwise acquires any of its outstanding shares of capital stock or other equity or voting interests (other than the acquisition of any shares in order to effectuate a “net settlement” transaction for the purposes of satisfying tax withholding obligations arising in connection with the grant, vesting, exercise and/or settlement of any outstanding incentive equity awards of GRAIL held by its current or former employees), in each case, prior to September 24, 2025 (the 15 -month anniversary of the Distribution Date).

If the Company consummates a transaction described in the foregoing clause (i), the Company must return to Illumina a cash amount decreasing over time calculated by reference to the number of months which have elapsed since the Distribution Date at the time of the public announcement of the event giving rise to the change of control.

If the Company consummates a transaction described in the foregoing clause (ii), the Company must return to Illumina a cash amount equal to the payments made by the Company in connection with such transaction.

The amount of clawback payments made cannot exceed the amount of the initial disposal funding.

Illumina provided the Company with disposal funding (the “Disposal Funding”) in the amount of $ 932.3 million in accordance with the Separation and Distribution Agreement, which was subject to a clawback feature that lapsed on September 24, 2025.

See Note 11 — Legal And Regulatory Proceedings — Contingencies for details.

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The Company believes that its existing cash and cash equivalents and short-term marketable securities will be sufficient to meet its working capital and capital expenditure needs for at least the next 12 months, as of the date these consolidated financial statements were filed.

The Company has a fiscal year end of December 31.

Prior to the Spin-Off, the Company’s fiscal year was the 52 or 53 weeks ending the Sunday closest to December 31.

References to 2024 , 2023 and 2022 refer to the fiscal years ended December 31, 2024 , December 31, 2023, and January 1, 2023 , respectively, which were all 52 weeks.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements represent the historical operations of the standalone GRAIL legal entity and include purchase accounting adjustments and certain tax adjustments as if the Company filed a separate income tax return and was not included in Illumina’s consolidated return for the period of time the Company was owned by Illumina .

All revenues and costs as well as assets and liabilities directly associated with the business activity of the Company are included in the consolidated financial statements.

Illumina’s acquisition of GRAIL in August 2021 (“the Acquisition”) represented a change of control with respect to GRAIL.

Given GRAIL, Inc.

merged with SDG Ops, Inc., which then merged with SDG Ops LLC, authoritative guidance (ASC 805-50-30) required pushdown accounting to be applied for the Second Merger amongst entities under common control.

As a result of the application of pushdown accounting, the separately

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

issued financial statements of GRAIL reflect Illumina’s basis in the assets and liabilities of GRAIL which were remeasured to fair value as of the closing date of Illumina’s acquisition of GRAIL (“ Closing Date”).

Intangible assets included developed technology, in-process research and development, and trade names, as well as goodwill.

There were also various other purchase price adjustment entries made in connection with the Acquisition that impacted the GRAIL standalone financial statements.

After the Spin-Off, the Company became a standalone publicly-traded company, and the Company’s financial statements are presented on a consolidated basis.

Prior to the Spin-Off, the accompanying consolidated financial statements represented the historical operations of the standalone GRAIL legal entity and included purchase accounting adjustments and certain tax adjustments as if the Company filed a separate income tax return and was not included in Illumina’s consolidated return for the period of time the Company was owned by Illumina.

All revenues and costs as well as assets and liabilities directly associated with the business activity of the Company were included in the consolidated financial statements.

Certain assets and liabilities were reflected at fair value under the new basis of accounting established at the closing of the Acquisition.

Management considered the need to allocate any shared costs incurred by the parent, Illumina, to the accompanying consolidated financial statements.

As previously discussed, the European Commission had adopted an order requiring Illumina and GRAIL to be held and operated as distinct and separate entities.

As no integration ever occurred, management concluded that no material allocations are required.

However, amounts recognized by the Company are not necessarily representative of the amounts that would have been reflected in the financial statements had the Company operated independently of the parent.

Related party transactions with Illumina are discussed further in Note 15 — Related Party Transactions.

These consolidated financial statements are prepared in accordance with United States Generally Accepted Accounting Principles (“U.S.

However, since the European Commission had adopted an order requiring Illumina and GRAIL to be held and operated as distinct and separate entities, no material allocations were required.

The financial statements for all periods presented, including the historical results of the Company prior to the Spin-Off, are referred to as “Consolidated Financial Statements” and have been prepared in accordance with generally accepted accounting principles in the United States (“U.S.

GAAP”) and include the accounts of the Company and its wholly owned subsidiaries.

All intercompany balances have been eliminated in consolidation.

The Company’s significant accounting policies are summarized below.

Use of Estimates

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The Company bases its estimates on historical experience and other market- specific or other relevant assumptions that it believes to be reasonable under the circumstances.

On an ongoing basis, management evaluates its estimates, including, but not limited to, those related to estimation of variable consideration, estimation of credit losses, standalone selling price included in contracts with multiple performance obligations, measure of progress toward the completion and satisfaction of performance obligations, accrued clinical studies and research and development expenses, stock-based compensation expense, measurement of liability-classified awards, valuation of goodwill and intangible assets, useful lives of intangible assets and property and equipment, determination of incremental borrowing rate for operating leases, contingencies, and the provision for income taxes, among others.

On an ongoing basis, management evaluates its estimates, including, but not limited to, those related to estimation of variable consideration, standalone selling price included in contracts with multiple performance obligations, measure of progress toward the completion and satisfaction of performance obligations, accrued clinical studies and research and development expenses, stock-based compensation expense, measurement of liability-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

classified awards, valuation of intangible assets, useful lives of intangible assets and property and equipment, determination of incremental borrowing rate for operating leases, contingencies, and the provision for income taxes, among others.

These estimates generally involve complex issues and require judgments, involve the analysis of historical results and prediction of future trends, can require extended periods of time to resolve and are subject to change from period to period.

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The Company is subject to credit risk from its portfolio of cash, cash equivalents and short-term marketable sec urities held at three accredited financial institutions.

As of December 31, 2024, the Company had approximately $ 214.2 million of cash deposits and cash equivalents and short-term marketable securities of $ 549.2 million .

The Company limits its exposure to credit losses by investing in money market funds and U.S government treasury securities through U.S.

As of December 31, 2025, the Company had $ 249.7 million of cash and cash equivalents, and short-term marketable securities of $ 654.7 million .

The Company limits its exposure to credit losses by investing in money market funds and United States (“U.S.”) government treasury securities through U.S.

banks with high credit ratings.

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The goals of the Company’s investment policy, in order of priority, are as follows:

minimize risk of the invested capital (including credit risk, interest rate risk and concentration risk), provide liquidity in a timely manner to accommodate operational and capital needs, and subject to the foregoing, seek to generate a reasonable return based on market conditions and given these risk and liquidity guidelines.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of December 31, 2024, the Company had no off-balance sheet concentrations of credit risk.

As of December 31, 2025, the Company had no off-balance sheet concentrations of credit risk.

Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, investment type and issuer, as a result, the Company is not exposed to any significant concentrations of credit risk from these financial instruments.

The Company is subject to credit risk related to its accounts receivable.

Accounts receivable primarily arise from testing services performed in the United States and are primarily with biopharmaceutical companies, employers, healthcare organizations, concierge medicine practices, life insurance companies, and individuals.

Accounts receivable primarily arise from testing services performed in the U.S.

and are primarily with biopharmaceutical companies, healthcare organizations, employers, digital health platforms, concierge medicine practices, life insurance companies, Centers for Medicare & Medicaid Services, and individuals.

The Company does not require collateral.

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Significant customers are those that represent more than ten percent of total revenue or accounts receivable, net balances for the periods and as of each consolidated balance sheet date presented, respectively.

Revenue from a major customer that accounted for 10% or more of total revenue is as follows:

2024 December 31,

2023 January 1,

11 % 14 % 21 %

Customers that accounted for 10% of more of total accounts receivable balance are as follows:

As of December 31,

For the year ended December 31, 2025, no single customer accounted for 10% or more of the Company’s revenue.

For the years ended December 31, 2024, and December 31, 2023, one customer accounted for 11 % and 14 % of the Company’s revenue.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2025, no single customer accounted for 10% or more of the Company’s account receivable, net.

As of December 31, 2024 one customer accounted for 32 % of the Company’s account receivable, net.

The Company is subject to a concentration risk for equipment, supplies and reagents that are available from a limited number of sources.

We source certain laboratory equipment, supplies and reagents used to perform testing services and research and development from single vendors.

Historically, we have not experienced significant issues sourcing equipment and supplies needed to perform testing services.

Significant Accounting Policies

The Company sources certain laboratory equipment, supplies and reagents used to perform testing services and research and development from single vendors.

Historically, the Company has not experienced significant issues sourcing equipment and supplies needed to perform testing services.

Cash and Cash Equivalents

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Short-term marketable securities

The Company classifies its investments as available-for-sale, which consist of high-grade United States (“U.S.”) government treasury bills and are reported at fair value.

The Company classifies its investments as available-for-sale, which consist of high-grade U.S.

government treasury bills and are reported at fair value.

Management determines the appropriate classification of investments at the time of purchase and re-evaluates such designation as of each balance sheet date.

Marketable securities that mature within twelve months from the balance sheet date are classified as short-term marketable securities and those with maturities over twelve months from the balance sheet date are

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classified as long-term marketable securities.

Unrealized holding gains and losses are reflected as a separate component of shareholders’ equity in accumulated other comprehensive gain (loss) until realized.

Realized gains and losses on the sale of these securities are recognized in net income or loss.

The amended guidance from ASU 2016-13 requires the measurement of expected credit losses for available-for-sale debt securities held at the reporting date over the remaining life based on historical experience, current conditions, and reasonable and supportable forecasts.

The Company regularly evaluates its investment portfolio under the available-for-sale debt securities impairment model guidance for indications of possible impairment from credit losses or other factors.

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Fair Value of Financial Instruments

The fair value of financial assets and liabilities is determined using the fair value hierarchy established in Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”).

The fair value of financial assets and liabilities is determined using the fair value hierarchy established in Accounting Standards Codification Topic 820, Fair Value Measurement (“ASC 820”).

ASC 820 identifies fair value as the exchange price, or 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.

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Level 2 —Observable inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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Once a receivable is deemed to be uncollectible, the receivable balance is charged against the reserve.

As of December 31, 2024, and December 31, 2023, the Company had $ 3.8 million and $ 3.1 million of allowance for credit losses, respectively.

As of December 31, 2025, and December 31, 2024, the Company had $ 3.6 million and $ 3.8 million of allowance for credit losses.

Supplies consists of materials and reagents consumed in the performance of testing services.

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The Company records an allowance for excess or obsolete supplies using an estimate based on historical trends, usage forecasts and evaluation of near-term expirations.

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Property and Equipment, Net

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The estimated useful lives of the major classes of property and equipment are generally as follows:

Useful Life (in Years)

Laboratory equipment 3 to 5

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Leased assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.

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Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets.

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Intangible assets identified in the Acquisition include GRAIL trade names, developed technology, and GRAIL in-process research and development (“IPR&D”) and were measured at fair value as of the closing date of Illumina’s acquisition of GRAIL (“ Closing Date”).

Goodwill represents the excess of purchase price paid cost over fair value of the net identifiable assets acquired.

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The Company’s trade names, GRAIL and Galler i , have brand recognition in the market related to the services GRAIL provides customers and the research and development activities GRAIL performs.

GRAIL’s developed technology includes intangible assets related to Galler i , its multi-cancer early detection test that was launched as a laborator y -developed test (“LDT”) in 2021, as well as a diagnostic aid for cancer (“DAC”) test.

The developed technology underpins both Galler i , designed as a cancer screening test for asymptomatic individuals over 50 years of age, and DAC that is being designed to accelerate diagnostic resolution for patients for whom there is a clinical suspicion of cancer.

Goodwill represented the excess of purchase price paid over fair value of the net identifiable assets acquired.

The Company’s trade names, GRAIL and Gal ler i , have brand recognition in the market related to the services GRAIL provides customers and the research and development activities GRAIL performs.

The developed technology underpins both Galler i , designed as a cancer screening test for asymptomatic individuals over 50 years of age, and a diagnostic aid for cancer test for patients for whom there is a clinical suspicion of cancer.

The cost of identifiable intangible assets with finite lives, such as trade names and developed technology assets, are amortized on a straight-line basis over the assets’ respective estimated useful lives of 9 years and 18 years, respectively.

The Company’s IPR&D includes assets related to GRAIL’s development of a minimal residual disease (“MRD”) test, a post-diagnostic test, that is currently under development.

IPR&D is considered indefinit e -lived and therefore is not amortized until completed and placed into service, at which point it will begin to be amortized over its estimated useful life or expensed upon abandonment of the associated research and development efforts.

While goodwill and IPR&D are not amortize d , they are reviewed for impairment at least annually or more frequently if events or circumstances indicate a potential for impairment.

Goodwill and IPR&D are considered impaired if the carrying value of the reporting unit or IPR&D asset exceeds its respective fair value.

The Company performs its goodwill impairment analysis at the reporting unit level.

The Company’s IPR&D includ es assets related to GRAIL’s development of a minimal residual disease (“MRD”) test, a post-diagnostic test, that is under development.

IPR&D is considered indefinit e -lived and therefore i s not amortized until completed and placed into service or expensed upon abandonment of the associated research and development efforts.

Goodwill and IPR&D, which were not amortize d , were reviewed for impairment at least annually or more frequently if events or circumstances indicated a potential for impairment.

Goodwill and IPR&D were considered impaired if the carrying value of the reporting unit or IPR&D asset exceeded its respective fair value.

The Company performed its goodwill impairment analysis at the reporting unit level.

The Company has one reporting unit, which aligns with its reporting structure and availability of discrete financial information.

During the goodwill impairment review, the Company assesses qualitative factors to determine whether it is more likely than not that the fair value of the Company’s reporting unit is less than the carrying amount, including goodwill.

During the indefinite-lived intangible asset impairment review, the Company assesses the qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset fair value is less than the carrying amount.

The qualitative factors considered include, but are not limited to, macroeconomic conditions, industry and market considerations, and our overall financial performance.

If the Company determines that it is not more likely than not that the fair value of our reporting unit or the intangible asset is less than the carrying amount, no additional assessment is necessary.

If the carrying amount of the reporting unit or intangible asset exceeds its fair value, the Company records an impairment loss based on the excess.

The Company may elect to bypass the qualitative assessment in a period and proceed to perform the quantitative goodwill and indefinite-lived intangible asset impairment test.

During the goodwill impairment review, the Company assessed qualitative factors to determine whether it was more likely than not that the fair value of the Company’s reporting unit wa s less than the carrying amount, including goodwill.

During the indefinite-lived intangible asset impairment review, the Company assessed the qualitative factors to determine whether it was more likely than not that the fair value of the indefinite-lived intangible asset was less

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

than the carrying amount.

The qualitative factors considered included, but were not limited to, macroeconomic conditions, industry and market considerations, and the Company’s overall financial performance.

If the carrying amount of the reporting unit or intangible asset exceeded its fair value, the Company recorded an impairment loss based on the excess.

The Company fully impaired goodwill as of December 31, 2024, resulting in no remaining carrying value.

In addition, the Company fully impaired its IPR&D assets as of December 31, 2025, resulting in no remaining carrying value as of that date.

Impairment of Long-Lived Assets

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The Company operates and manages its business as one reportable operating segment which provides multi-cancer early detection testing and services.

The chief operating decision maker reviews financial information on an aggregate basis for the purposes of evaluating financial performance and allocating the company resources.

Substantially all of the Company’s long-lived assets are located in the United States.

The chief operating decision maker (“CODM”) reviews financial information on an aggregate basis for the purposes of evaluating financial performance and allocating the company resources.

Substantially all of the Company’s long-lived assets are located in the U.S.

Revenue Recognition

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Revenues are derived from screening and development services.

The Company’s revenues were primarily generated in the United States.

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The Company’s revenues were primarily generated in the U.S.

Screening Revenue

Th e Compan y recognize s screenin g revenu e fro m th e sal e o f cance r screenin g testin g service s fo r patients.

Patient s obtai n test s vi a thei r employers , healthcar e systems , payors , concierg e medicin e practices , lif e insurance provider s o r directl y vi a telemedicine .

Patient s obtai n test s vi a healthcar e systems , employers , digital health platforms, payors , concierg e medicin e practices , lif e insurance provider s o r directl y vi a telemedicine .

Patient s receiv e th e multi-cance r earl y detectio n ki t afte r th e orde r i s placed an d complet e th e bloo d draw .

Th e specime n i s the n sen t t o th e Company’ s lab , th e tes t i s processed , an d th e resul t is electronicall y delivere d t o th e patients ’ physician .

Th e tes t pric e i s base d o n th e negotiate d contractua l rat e wit h the Company’ s direc t customers , otherwis e th e Company’ s standar d lis t pric e applies .

Th e tes t pric e is generally based on our list price, with discounts in certain channels, or, for certain customers, such as larger, higher-volume customers or international distributors, negotiated contractual rates.

F or certain customers, we also offer rebates.

Th e Compan y identifie s each sal e o f it s tes t t o a custome r a s a singl e performanc e obligation ;

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Both the estimate and any subsequent revision contain uncertainty and require the use of significant judgment in the estimation of the variable consideration and application of the constraint for such variable consideration.

The Company analyzes its actual cash collections over the expected collection period and compares it with the estimated variable consideration for each portfolio and any difference is recognized as an adjustment to estimated revenue after the expected collection period, subject to assessment of the risk of future revenue reversal.

The Company analyzes its actual cash collections over the expected collection period and compares it with the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

estimated variable consideration for each portfolio and any difference is recognized as an adjustment to estimated revenue after the expected collection period, subject to assessment of the risk of future revenue reversal.

Development Services Revenue

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These agreements typically have multiple commitments of services and therefore have longer performance periods.

The Company uses an input method based on costs incurred to measure its progress toward the completion and satisfaction of the performance

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The Company uses an input method based on costs incurred to measure its progress toward the completion and satisfaction of the performance obligations.

The Company assesses the changes to the total expected cost estimates as well as any incremental fees negotiated resulting from changes to the scope of the original contract in determining the revenue recognized at each reporting period.

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Contract liabilities are relieved as the Company performs its obligations under the contract and revenue is recognized.

Deferred revenue was $ 1.6 million and $ 0.8 million as of December 31, 2024 and December 31, 2023, respectively, all of which is considered short-term and was recorded within other current liabilities on the accompanying consolidated balance sheets.

Deferred revenue was $ 1.9 million and $ 1.6 million as of December 31, 2025 and December 31, 2024, all of which is considered short-term and was recorded within other current liabilities on the accompanying consolidated balance sheets.

Cost of Screening Revenue

Cost of screening revenue generally consists of cost of materials, labor including salaries and wages, bonus, benefits and stock-based compensation , amortization of GRAIL intangible assets, blood collection kits and shipping, phlebotomy, royalties, electronic medical records, equipment depreciation, and allocations of overhead expenses such as facilities and information technology costs .

Per the terms of the Separation and Distribution Agreement with Illumina, the royalty arrangement with Illumina is suspended until the earlier of December 24, 2026 or any change of control of the Company, at which time a high-single digit royalty payments will be payable .

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expenses such as facilities and information technology costs .

Per the terms of the Separation and Distribution Agreement with Illumina, the royalty arrangement with Illumina is suspended until the earlier of December 24, 2026, or any change of control of the Company, at which time a high-single digit royalty will be payable on screening revenue .

Cost of Development Services Revenue

Cost of development services revenue generally consists of materials and patient sample acquisition, labor including salaries and wages, bonus, benefits and stock-based compensation, royalties, equipment depreciation, and allocations of overhead expenses such as facilities and information technology costs .

Accrued Clinical Studies and Research and Development Expenses

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Both internal and external research and development costs are expensed in the periods in which they are incurred.

Nonrefundable advance payments for goods and services that will be used or rendered in future research and

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development activities are deferred and recognized as expense in the period in which the related goods are delivered, or services are performed.

Nonrefundable advance payments for goods and services that will be used or rendered in future research and development activities are deferred and recognized as expense in the period in which the related goods are delivered, or services are performed.

Advertising Costs

Advertising costs are expensed as incurred.

Advertising costs were $ 17.7 million, $ 21.9 million and $ 24.5 million for the years ended December 31, 2024, December 31, 2023 , and January 1, 2023 , respectively.

Advertising costs were $ 15.1 million, $ 17.7 million and $ 21.9 million for the years ended December 31, 2025, December 31, 2024 , and December 31, 2023 .

Stock-Based Compensation Expense

The Company’s stock-based compensation expense includes expenses related to Cash-Based Equity Awards, restricted stock units (“RSUs”), deferred stock units (“DSUs”), and performance stock options.

Forfeitures are accounted for as incurred, as a reversal of stock-based compensation expense related to awards that will not vest.

The Company’s stock-based compensation expense includes expenses related to restricted stock units (“RSUs”), performance stock units (“PSUs”), deferred stock units (“DSUs”), performance stock options (“PSOs”), Employee Stock Purchase Plan (“ESPP”) and Cash-Based Equity Awards.

Forfeitures are accounted for as incurred.

The grant date fair values of RSUs and PSUs are generally determined based on the closing market price of GRAIL’s common stock on the date of the grant and in the case of DSUs resulting from deferrals of director cash fees, based on the closing market price of GRAIL’s common stock on the date that such cash fees would have been otherwise paid.

Generally, awards of RSUs are granted subject to service conditions and PSUs are granted subject to service and performance based-conditions, with vesting periods ranging between 18 and 48 months.

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Stock-based compensation expense is recognized based on the fair value of the award on a straight-line basis over the requisite service periods of the RSUs.

The fair value of the PSUs begins to be recognized when it is probable that the performance-based condition will be met.

The fair value of shares to be issued under the ESPP, is derived using the Black-Scholes-Merton option-pricing model at the commencement of 6-month purchase periods in May and November of each year.

Stock-based compensation for the ESPP is expensed using a straight-line attribution method over the offering period.

Additionally, forfeitures are accounted for as incurred.

The fair value of PSOs that continue to be subject to service conditions was determined using the Black-Scholes-Merton option-pricing model.

The model assumptions include expected volatility, term, dividends, and the risk-free interest rate.

The expected volatility was determined by weighting the historical and implied volatility of peer companies’ common stock.

The expected term was the Company’s best estimates based on the vesting period and contractual term.

Given that cash dividends were never declared or paid on the Illumina nor GRAIL common stock, the expected dividend yield is determined to be 0 %.

The risk-free interest rate was based upon U.S.

Treasury securities with remaining terms similar to the expected term of the stock-based awards.

The fair value of the PSOs begins to be recognized when it is probable that the performance-based condition will be met.

A cash-based equity incentive award (the “Cash-Based Equity Award”) program was adopted following Illumina’s acquisition of GRAIL in 2021 to provide GRAIL employees with dollar-denominated long-term incentive awards that were indexed to the value of GRAIL.

In connection with the Spin-Off, in accordance with the Employee Matters Agreement, the Cash-Based Equity Awards, which were cash-settled, liability-classified awards, were modified to become RSUs that will be settled in shares of the Company’s common stock upon vesting (the “Award Modification”).

Unvested performance stock options that were previously held by certain GRAIL employees to purchase Illumina common stock were converted to options to purchase GRAIL common stock in connection with the Spin-Off.

See Note 7 — Stock-Based Compensation for further details of the Award Modification.

Unvested PSOs that were previously held by certain GRAIL employees to purchase Illumina common stock were converted to options to purchase GRAIL common stock in connection with the Spin-Off.

Prior to the Award Modification, the Cash-Based Equity Awards were liability-classified awards because the Cash-Based Equity Awards could be (and were) settled in cash.

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Subsequent to this adjustment to the Cash-Based Equity Awards and continuing until the Award Modification, the Cash-Based Equity Awards were expensed in accordance with their applicable vesting schedules.

In connection with the Acquisition, Illumina issued equity awards to GRAIL employees in exchange for their remaining outstanding and unvested GRAIL equity awards (the “Replacement Awards”).

The awards consisted of restricted stock units and performance stock options that settled in shares of Illumina common stock at vesting or exercise, as applicable.

The compensation expense for the Replacement Awards was recognized based on the fair value on a straight-line basis over the requisite service periods of the awards.

The grant date fair values of RSUs and DSUs are generally determined based on the closing market price of GRAIL’s common stock on the date of the grant, but (i) in the case of RSUs resulting from the Award Modification, the date of the Award Modification, and (ii) in the case of DSUs resulting from deferrals of director cash fees, based on the closing market price of GRAIL’s common stock on the date that such cash fees would have been otherwise paid.

Stock-based compensation expense is recognized based on the fair value of the award on a straight-line basis over the requisite service periods of the RSUs.

The fair value of performance stock options with service conditions is determined using the Black-Scholes-Merton option-pricing model.

The model assumptions include expected volatility, term, dividends, and the risk-free interest rate.

The expected volatility is generally determined by weighting the historical and implied volatility of peer companies’ common stock.

The expected term is the Company’s best estimates based on the vesting period and contractual term.

Given that cash dividends were never declared or paid on the Illumina nor GRAIL common

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There were no Cash-Based Equity Awards outstanding as of December 31, 2024 .

See Note 8 — Stock-Based Compensation for further details.

Deferred Offering Costs

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated.

After the consummation of an equity financing, these costs are recorded as a reduction of additional paid-in capital.

Should the in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the consolidated statements of operations.

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stock, the expected dividend yield is determined to be 0 %.

The Company does not anticipate paying cash dividends in the foreseeable future.

The risk-free interest rate is based upon U.S.

Treasury securities with remaining terms similar to the expected term of the stock-based awards.

The fair value of the performance stock options begins to be recognized when it is probable that the performance-based condition will be met.

Pre-funded Warrants

Pre-funded warrants are classified as a component of stockholders’ equity within additional paid-in capital and are recorded at the issuance date.

The pre-funded warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria.

In addition, such pre-funded warrants do not provide any guarantee of value or return.

The value of the pre-funded warrants is known at issuance, as their sales price approximates their fair value, and net proceeds from the sale are recorded as a component of additional paid-in capital.

Defined Contribution Plan

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On January 1, 2023, the 401K Plan was modified to provide for a 100 % employer match of employee contributions up to a maximum of three thousand dollars per employee.

For the years ended December 31, 2024 and December 31, 2023, the Company contributed $ 3.9 million and $ 3.9 million to match employee contributions, respectively.

For the years ended December 31, 2025 and December 31, 2024, the Company contributed $ 2.6 million and $ 3.9 million to match employee contributions.

The Company pays the administrative costs for the 401(k) plan.

Provision for (Benefit from) Income Taxes

Benefit from Income Taxes

Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the future tax consequences of events that have been included in the consolidated financial statements.

Deferred tax assets are recognized for deductible temporary differences and tax credit carryforwards, and deferred tax liabilities are recognized for taxable temporary differences.

Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portions or all of the deferred tax assets will not be realized.

Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

We recognize the impact of a tax position in our consolidated financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position.

Due to the complexity of some of the uncertainties, the ultimate resolution may result in payments that are materially different from our current estimate of the tax liability.

These differences, as well as any interest and penalties, will be reflected in the provision for income taxes in the period in which they are determined.

As a standalone entity, the Company files tax returns on its own behalf, and tax balances and the effective income tax rate may differ from the amounts reported in historical periods.

As of June 24, 2024 and in connection with the Spin-Off, the Company adjusted its deferred tax balances and computed its related tax provision to reflect operations as a standalone entity.

During the period that Illumina held the Company, the Company’s activity generated various tax attributes recognized as deferred tax assets (“DTAs”), due primarily to the generation of net operating losses (“NOLs”), IRC 174 capitalized research and experimental expenditures, and research and development (“R&D”) tax credits that could not be specifically utilized by the Company as it did not generate positive taxable income and it was not a separately regarded tax paying entity from Illumina.

During the period that Illumina held the Company, the Company’s activity generated various tax attributes recognized as deferred tax assets, due primarily to the generation of net operating losses, IRC 174 capitalized research and experimental expenditures, and research and development (“R&D”) tax credits that could not be specifically utilized by the Company as it did not generate positive taxable income and it was not a separately regarded tax paying entity from Illumina.

Since the Company was not a separately regarded taxable entity from Illumina, these tax attributes were either utilized by or will be utilized by Illumina when filing its consolidated tax return.

Historically, the tax attributes were only presented in the Company’s standalone financial statements to allow the users to understand the financial position of the Company as a standalone taxable entity under the Separate-Return Method.

Historically, the tax attributes were o nly presented in the Company’s standalone financial statements to allow the users to understand the financial position of the Company as a standalone taxable entity under the Separate-Return Method.

The total tax-effected value of the tax attributes, net of Financial Accounting Standards Board Interpretation No.

48 (“FIN48”) liabilities and valuation allowance that were deemed to be the property of Illumina, was $ 447.2 million.

In connection with the Spin-off, the underlying $ 447.2 million of tax attributes were adjusted through an entry of $ 447.2 million to additional paid in capital.

Net Loss Per Share Attributable to Common Stockholders

The Company calculates basic net loss per share attributable to common stockholders by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period.

48 liabilities and valuation allowance that were deemed to be the property of Illumina, was $ 447.2 million.

In connection with the Spin-off, the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

underlying $ 447.2 million of tax attributes were adjusted through an entry of $ 447.2 million to additional paid in capital.

Net Loss Per Share

The Company calculates basic net loss per share by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period.

The weighted-average shares number of shares of common stock outstanding as of December 31, 2025 included pre-funded warrants, as the shares underlying the warrants are issuable for little cash consideration and are immediately exercisable .

Diluted net loss per share is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period.

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Restructuring charges consist primarily of severance, benefits, payroll taxes, and other related costs.

The Company evaluates the nature of these costs to determine if they relate to ongoing benefit arrangements which are accounted for under ASC 712, Compensation - Nonretirement Postemployment Benefits, or one-time benefit arrangements which are accounted for under ASC 420, Exit or Disposal Cost Obligations.

The Company records a liability for ongoing employee termination benefits when it is probable that an employee is entitled to them and the amount of the benefits can be reasonably estimated.

One-time employee termination costs are recognized

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when management has communicated the termination plan to employees, unless future service is required, in which case the costs are recognized ratably over the future service period.

One-time employee termination costs are recognized when management has communicated the termination plan to employees, unless future service is required, in which case the costs are recognized ratably over the future service period.

All other related costs are recognized when incurred.

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Gains and losses resulting from foreign currency transactions that are deemed to be of a long-term investment nature are reported as a separate component of other comprehensive loss.

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Reclassification

Certain amounts on the consolidated balance sheets, consolidated statements of operations and statements of cash flows have been conformed to the December 31, 2024 presentation of related party balances and transactions.

Certain amounts within the segment disclosure in the footnote to the consolidated financial statements for the respective periods ended December 31, 2024 and December 31, 2023 have been conformed to the current period presentation.

Recent Accounting Pronouncements

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Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This update improves reportable segment disclosure requirements, primarily through enhanced disclosures of significant segment expenses.

This standard was effective for the Company beginning in fiscal year 2024 and interim periods within fiscal year 2025.

We adopted the standard on its effective date in fiscal year 2024 and applied the amendments retrospectively to all prior periods presented in the consolidated financial statements.

The Company has included the required disclosures in “ Note 14 — Segment Information .”

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvement to Income Tax Disclosures.

Improvements to Income Tax Disclosures.

This update improves income tax disclosure requirements, primarily through enhanced transparency and decision usefulness of disclosures.

This guidance will be effective for annual reporting periods beginning the year ended December 31, 2025, with early adoption permitted and can be applied on either a prospective or retroactive basis.

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

The Company adopted the standard on its effective date in 2025, on a retroactive basis, and has included the required disclosures in Note 14 — Taxes .

Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No.

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This guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted and the guidance is to be applied prospectively and may be applied

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Early adoption is permitted and the guidance is to be applied prospectively and may be applied retrospectively.

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

In May 2025, the FASB issued No.

ASU 2025-04, Compensation-Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606).

This update address diversity in practice and improves the operability of accounting for share-based consideration granted to customers.

The amendments clarify how to distinguish between service and performance conditions for vesting, require entities to estimate forfeitures for all share-based consideration payable to customers, and specifies that variable consideration guidance in ASC 606 does not apply when measuring such awards.

This guidance is effective for fiscal years beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The transition method may be modified retrospective or on a retrospective basis.

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

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets.

This update provides entities with a practical expedient related to developing reasonable and supportable forecasts as part of estimating expected credit losses, in which entities may elect to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset.

This guidance is effective for fiscal years beginning after December 15, 2025 and interim reporting periods within those annual reporting periods.

Early adoption is permitted.

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

In September 2025, the FASB issued ASU No.

2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

This update removes all references to software development project stages and requires entities to start capitalizing software costs when both of the following occur:

(i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended.

This guidance is effective for fiscal years beginning after December 15, 2027 and interim

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

retrospectively.

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

reporting periods within those annual reporting periods.

Early adoption is permitted.

The transition method may be prospective, modified, or retrospective.

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

In December 2025, the FASB issued ASU No.

2025-10 (ASC Topic 832), Accounting for Government Grants Received by Business Entities.

This ASU establishes the accounting and presentation for government grants received by a business entity.

This guidance is effective for fiscal years beginning after December 15, 2028 and interim reporting periods within those annual reporting periods.

Early adoption is permitted.

This ASU provides for adoption either on a modified prospective, modified retrospective, or retrospective basis.

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

In December 2025, the FASB issued ASU No.

2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements.

This update enhances consistency in interim reporting for all entities by clarifying interim disclosure requirements and the form and content of interim financial statements in accordance with GAAP.

This guidance is effective for interim reporting periods with annual reporting periods beginning after December 15, 2027.

Early adoption is permitted and must be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements.

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

In December 2025, the FASB issued ASU No.

2025-12, Codification Improvements.

This update includes a series of technical amendments intended to clarify guidance, correct unintended application issues, and improve consistency and operability across various Topics within the FASB Accounting Standards Codification.

This guidance is effective for fiscal years beginning after December 15, 2026 and interim reporting periods within those annual reporting periods.

Early adoption is permitted.

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

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The following table presents the Company’s revenue disaggregated by geographic areas based on the customers’ locations:

(in thousands) December 31,

2024 December 31,

2023 January 1,

United States

$ 108,536 $ 75,000 $ 39,817

Screening $ 136,760 $ 108,536 $ 75,000

Development Services 333 2,280 3,679

2,280 3,679 3,545

International (1)

Screening 1,841 91 —

Development Services 8,238 14,688 14,426

$ 147,172 $ 125,595 $ 93,105

$ 125,595 $ 93,105 $ 55,550

(1) International region includes revenue earned from customers located outside of the United States.

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(in thousands) December 31,

2024 December 31,

2023 January 1,

$ 108,467 $ 75,000 $ 39,817

Commercial $ 133,933 $ 108,467 $ 75,000

Government (1)

Development Services

16,968 18,105 15,733

Commercial 8,571 16,968 18,105

$ 147,172 $ 125,595 $ 93,105

(1) Government screening revenue primarily consists of revenue earned as part of our Galleri-Medicare clinical study.

(1) Government screening revenue primarily consists of revenue earned as part of our REACH/Galleri-Medicare clinical study.

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GOODWILL AND INTANGIBLE ASSETS

Due to the application of pushdown accounting, the Company’s balance sheet includes goodwill and intangible assets recognized by Illumina in connection with Illumina’s acquisition of the Company.

Due to the application of pushdown accounting, the Company’s consolidated balance sheet included goodwill and intangible assets recognized by Illumina in connection with Illumina’s acquisition of the Company.

Goodwill Impairment

Goodwill represents the excess of purchase price Illumina paid over the fair value of the net identifiable assets acquired upon the Acquisition of the Company.

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Goodwill represented the excess of purchase price Illumina paid over the fair value of the net identifiable assets acquired upon the Acquisition of the Company.

(in thousands) Goodwill

Balance as of January 1, 2023 $ 1,497,402

( 4,700,431 )

Balance as of January 1, 2023

Impairment ( 608,466 )

Balance as of December 31, 2023 888,936

Impairment ( 888,936 )

Balance as of December 31, 2024 $ —

2023 Goodwill Impairment

In Q2 2024, prior to the Spin-Off, the approval of the Spin-Off by Illumina’s board of directors represented a potential indicator of impairment, which also aligned with the timing of Illumina’s annual goodwill impairment test date for 2024.

The assessment was performed using a market approach to determine the fair value of goodwill which utilized the valuation ranges prepared by the divestment financial advisors engaged by Illumina in connection with the Spin-Off.

The valuation ranges were determined using revenue multiples from public company peers for 2024 and 2025.

The implied discount rate for the goodwill impairment assessment was 51.5 %.

These estimates and assumptions represent a Level 3 measurement because they include unobservable inputs that are supported by little or no market activity and reflect Company-determined and judgmental factors for these assumptions in measuring fair value.

The assumptions in the assessment of an impairment analysis are inherently subjective due to uncertainty and any slight changes in these rates and assumptions could have a significant impact on the concluded value of goodwill.

The Company recognized a goodwill impairment of $ 888.9 million as a result of the impairment assessment, primarily due to changes to the forecast of GRAIL’s value and the method for valuing GRAIL .

2023 Goodwill Impairment

In Q3 2023, Illumina concluded the sustained decrease in Illumina’s stock price and overall market capitalization during the quarter was a triggering event indicating the fair value of GRAIL might be less than its carrying amount which led the Company to test goodwill for impairment.

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The discount rate selected at the time of the goodwill impairment assessment was 24.0 % .

The Company recognized a goodwill impairment of $ 608.5 million as a result of the impairment assessment, primarily due to changes to expected timing of revenue and a higher discount rate selected for the fair value calculation of GRAIL.

The Company recognized a goodwill impairment of $ 608.5 as a result of the impairment assessment, primarily due to changes to expected timing of revenue and a higher discount rate selected for the fair value calculation of GRAIL.

2024 Goodwill Impairment

On July 13, 2022, the European General Court ruled that the European Commission had jurisdiction under the European Union Merger Regulation to review the Acquisition.

Additionally, on September 6, 2022, the European Commission issued a decision prohibiting the Acquisition.

These decisions constituted substantive changes in circumstances and led Illumina to test goodwill for impairment.

The assessment was performed using a combination of both an income and a market approach to determine the fair value of goodwill.

The income approach utilized the estimated discounted cash flows, while the market approach utilized comparable company information.

Estimates and assumptions used in the income approach included projected cash flows and a discount rate.

The discount rate selected at the time of the goodwill impairment assessment was 22.0 %.

These estimates and assumptions represent a Level 3 measurement because they include unobservable inputs that are

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supported by little or no market activity and reflect Company-determined and judgmental factors for these assumptions in measuring a fair value.

The valuation ranges were determined using revenue multiples from public company peers for 2024 and 2025.

The implied discount rate for the goodwill impairment assessment was 51.5 %.

The Company recognized a goodwill impairment of $ 888.9 as a result of the impairment assessment, primarily due to changes to the forecast of GRAIL’s value and the method for valuing GRAIL .

These estimates and assumptions in each of the evaluations described above represent a Level 3 measurement because they include unobservable inputs that are supported by little or no market activity and reflect Company-determined and judgmental factors for these assumptions in measuring fair value.

The Company recognized a goodwill impairment of $ 4.7 billion as a result of the impairment assessment, primarily due to the negative impact of capital market conditions and a higher discount rate selected for the fair value calculation of GRAIL.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Intangible Assets

Intangible assets recognized as part of the Acquisition include developed technologies, trade name and IPR&D that were measured at fair value as of the Closing Date.

The following roll-forward indicates the fair values assigned to identifiable assets from the Acquisition and the resulting amortization and impairmen t :

December 31, 2024

(in thousands) Gross Carrying Amount Accumulated Amortization Impairment Net Intangible Assets

Developed Technologies 2,410,000 ( 446,297 ) — 1,963,703

Trade Names 40,000 ( 14,813 ) — 25,187

Total Finite-Lived Intangible Assets 2,450,000 ( 461,110 ) — 1,988,890

In-process Research and Development (IPR&D) 560,000 — ( 532,000 ) 28,000

Total Intangible Assets 3,010,000 ( 461,110 ) ( 532,000 ) 2,016,890

December 31, 2023

(in thousands) Gross Carrying Amount Accumulated Amortization Impairment Net Intangible Assets

Intangible assets identified in connection with Illumina’s acquisition of the Company include developed technology, trade names and IPR&D and were measured at fair value as of the Closing Date.

The following roll-forward indicates the fair values assigned to finite-lived intangible assets and the resulting amortization:

December 31, 2025 December 31, 2024

(in thousands) Gross Carrying Amount Accumulated Amortization Net Intangible Assets Gross Carrying Amount Accumulated Amortization Net Intangible Assets

Developed Technologies $ 2,410,000 $ ( 580,185 ) $ 1,829,815 $ 2,410,000 $ ( 446,297 ) $ 1,963,703

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Total Finite-Lived Intangible Assets $ 2,450,000 $ ( 599,444 ) $ 1,850,556 $ 2,450,000 $ ( 461,110 ) $ 1,988,890

In-process Research and Development (IPR&D) 670,000 — ( 110,000 ) 560,000

Total Intangible Assets 3,120,000 ( 322,777 ) ( 110,000 ) 2,687,223

The fair values of the developed technologies, trade name and IPR&D were estimated using an income approach, under which an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset.

The estimated fair values were developed by discounting future net cash flows to their present value at market-based rates of return and inclusive of an assumption for technology obsolescence.

The useful lives of the intangible assets for amortization purposes were determined by considering the period of expected cash flows used to measure the fair values of the intangible assets, adjusted as appropriate for entity-specific factors including legal, regulatory, contractual, competitive, economic, and other factors that may limit the useful life.

The developed technology and trade name assets are amortized on a straight-line basis over their estimated useful lives.

The following roll-forward indicates the carrying value of the indefinite-lived intangible asset from the Acquisition and the impairment expenses recorded:

(in thousands) IPR&D

Balance as of January 1, 2023 $ 670,000

Impairment ( 110,000 )

Balance as of December 31, 2023 560,000

Impairment ( 532,000 )

Balance as of December 31, 2024 28,000

Impairment ( 28,000 )

Balance as of December 31, 2025 $ —

In conjunction with the Q3 2023 goodwill impairment assessment described above, the Company also evaluated the IPR&D intangible asset for potential impairment.

The evaluation for a potential impairment of the IPR&D intangible asset was performed by comparing its carrying value to the assessed estimated fair value, which was determined by the income approach, using a discounted cash flow model.

Estimates and assumptions used in the income approach included projected cash flows and a discount rate.

The discount rate selected at the time of the IPR&D intangible impairment assessment was 19.0 %.

Based on the impairment test performed, the Company assessed and determined that the carrying value of the IPR&D intangible asset exceeded its estimated fair value.

As a result, the Company recognized an impairment of $ 110.0 million, primarily due to a decrease in projected cash flows and a higher discount rate selected for the fair value calculation.

In conjunction with Illumina’s Q2 2024 goodwill impairment assessment, the IPR&D intangible asset of the GRAIL reporting unit was evaluated for potential impairment by Illumina prior to the Spin-Off.

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As a result of push down accounting, the Company recognized an impairment of $ 420.0 million primarily due to changes to revenue projections and the discount rate utilized.

Subsequent to the Spin-Off, the Company performed a portfolio review and determined to decrease investment in the development of the IPR&D asset, which impacted the amount and timing of expected future cash flows attributable to IPR&D.

This determination was driven by the impact of our post-Spin-Off capital

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

structure, constitution of our Board at the time of the Spin-Off as the key decision maker for the determination, and increased ability to revisit our business strategy and portfolio as a standalone public company without regulatory oversight.

In Q2 2024, subsequent to the Spin-Off, the Company performed a portfolio review and determined to decrease investment in the development of the IPR&D asset, which impacted the amount and timing of expected future cash flows attributable to IPR&D.

This determination was driven by the impact of the Company’s post-Spin-Off capital structure, constitution of the Company’s Board at the time of the Spin-Off as the key decision maker for the determination, and increased ability to revisit the Company’s business strategy and portfolio as a standalone public company without regulatory oversight.

This represented a potential impairment indicator.

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As a result, the Company recognized an additional impairment of $ 112.0 million, primarily due to a decrease in projected cash flows.

In conjunction with the Q3 2023 goodwill impairment assessment described above, the Company also evaluated the IPR&D intangible asset for potential impairment.

Estimates and assumptions used in the income approach included projected cash flows and a discount rate.

The discount rate selected at the time of the IPR&D intangible impairment assessment was 19.0 %.

In Q2 2025, the Company identified a change in market conditions in relation to its IPR&D asset which is in development.

The change is expected to impact the amount of future cash flows attributable to the technology underlying the IPR&D asset.

This represented a potential impairment indicator.

An impairment assessment was performed using a discounted cash flow model utilizing the updated projected cash flows and discount rate.

The discount rate selected was 21.0 %.

Based on the impairment test performed, the Company assessed and determined that the carrying value of the IPR&D intangible asset exceeded its estimated fair value.

As a result, the Company recognized an impairment of $ 110.0 million, primarily due to a decrease in projected cash flows and a higher discount rate selected for the fair value calculation.

The estimates and assumptions updated in each of these evaluations described above represent a Level 3 measurement because they include unobservable inputs that are supported by little or no market activity and reflect Company- determined and judgmental factors for these assumptions in measuring a fair value.

A recoverability test for the finite-lived intangible assets, which includes developed technology and trade names, was also performed.

Based on the assessment performed, no impairment was noted for the finite-lived intangibles.

As of December 31, 2024 the research and development project had not been completed or abandoned.

The IPR&D intangible asset is not currently subject to amortization.

As a result, the Company recognized an impairment of $ 28.0 million, resulting in the write off of the entire carrying value of the IPR&D asset.

The estimates and assumptions updated in each of the evaluations described above represent a Level 3 measurement because they include unobservable inputs that are supported by little or no market activity and reflect Company-determined and judgmental factors for these assumptions in measuring a fair value.

During 2024, the Company performed a recoverability test of its finite-lived intangible assets, and no impairment was identified.

In 2025, the Company determined that no triggering events occurred that would require performing a recoverability test, and accordingly, no impairment charge was recorded.

See Note 17, Subsequent Events, for information regarding a possible impairment indicator related to the Company’s finite-lived intangible assets identified during the three months ending March 31, 2026.

Amortization expense related to finite-lived intangible assets was $ 138.3 million for each of the years ended December 31, 2025, December 31, 2024 , and December 31, 2023 .

The estimated future annual amortization of finite-lived intangible assets is shown in the following table.

Actual amortization expense to be reported in future periods could differ from these estimates as a result of acquisitions, divestitures, and asset impairments, among other factors.

(in thousands) Estimated

(in thousands) Estimated Annual Amortization

2026 $ 138,333

Thereafter 1,160,372

Total $ 1,850,556

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

(in thousands)

Prepaid expenses and other current assets

Prepaid software $ 4,641 $ 4,734

Tax receivable 4,329 5,411

Prepaid insurance 2,439 814

Prepaid service and maintenance 601 1,220

Indirect taxes 145 1,383

Prepaid other 5,292 6,579

Total prepaid expenses and other current assets $ 17,447 $ 20,141

As of December 31,

(in thousands) 2024 2023

Property and equipment, net

Leasehold improvements $ 59,764 $ 58,439

Laboratory equipment

$ 54,113 $ 53,550

Computer hardware

Furniture and fixtures

Construction-in-process 1,296 7,966

Computer software

Leasehold improvements

59,769 59,764

Construction-in-process 804 1,296

Property and equipment, gross

122,266 122,941

Less accumulated depreciation and amortization

( 70,453 ) ( 53,880 )

Total property and equipment, net $ 51,813 $ 69,061

1 unchanged sentence

(in thousands) 2025 2024

Accounts Receivable, net

Trade accounts receivable, gross $ 21,899 $ 24,099

Allowance for credit losses ( 3,604 ) ( 3,787 )

Total accounts receivable, net $ 18,295 $ 20,312

As of December 31,

(in thousands) 2025

Accrued liabilities

Accrued compensation expenses

Accrued research and development expenses 7,914 6,692

Accrued clinical studies expenses 5,113 6,897

Accrued legal and professional expenses 2,966 7,820

Accrued marketing 605 1,882

$ 36,299 $ 34,530

Accrued clinical studies and research and development expenses

15,656 13,027

Accrued legal and professional service expenses

Accrued other expenses

Total accrued liabilities $ 63,945 $ 57,241

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FAIR VALUE MEASUREMENTS, CASH EQUIVALENTS AND MARKETABLE SECURITIES

The following tables represent the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2025 and December 31, 2024 :

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

2 unchanged sentences

Money market funds $ 63,195 $ 63,195 $ — $ —

$ 94,697 $ 94,697 $ — $ —

government treasury bills 184,041 184,041 — —

117,442 117,442 — —

Total cash equivalents

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government treasury bills 654,703 654,703 — —

549,236 549,236 — —

Total short-term marketable securities

654,703 654,703 — —

Total $ 761,375 $ 761,375 $ — $ —

$ 901,939 $ 901,939 $ — $ —

December 31, 2024

2 unchanged sentences

Money market funds $ 94,697 $ 94,697 $ — $ —

$ 92,640 $ 92,640 $ — $ —

government treasury bills 117,442 117,442 — —

Total cash equivalents

212,139 212,139 — —

government treasury bills 549,236 549,236 — —

Total short-term marketable securities

549,236 549,236 — —

$ 761,375 $ 761,375 $ — $ —

The following tables summarize the Company’s cash equivalents and marketable securities’ amortized costs, gross unrealized gains, gross unrealized losses and estimated fair values by significant investment category:

2 unchanged sentences

Gross Unrealized Gains

Gross Unrealized Losses

Estimated Fair Value

Money market funds $ 63,195 $ — $ 63,195

$ 94,697 $ — $ — $ 94,697

government treasury bills 838,368 376 838,744

$ 666,412 $ 266 $ — $ 666,678

761,109 266 — 761,375

Total $ 901,563 $ 376 $ 901,939

December 31, 2024

1 unchanged sentence

Gross Unrealized Gains

Gross Unrealized Losses

Estimated Fair Value

Money market funds $ 94,697 $ — $ 94,697

$ 92,640 $ — $ — $ 92,640

government treasury bills 666,412 266 666,678

Total $ 761,109 $ 266 $ 761,375

All of the Company’s marketable securities had maturities of less than one year.

There were no marketable securities in an unrealized loss position as of December 31, 2024 and none of the Company’s marketable securities had been in an unrealized loss position for more than one year as of December 31, 2024.

The Company evaluates investments that are in an unrealized loss position for impairment as a result of credit loss.

It was determined that no credit losses exist as of December 31, 2024 because no securities were in an unrealized loss position.

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There were no marketable securities in an unrealized loss position as of December 31, 2025 and December 31, 2024.

Accordingly, no credit loss impairment was recognized as of December 31, 2025 and December 31, 2024 .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Private Investment of Public Equity (the “PIPE”)

On October 18, 2025, the Company entered into a securities purchase agreement (the "Purchase Agreement") with certain investors for the private placement of (i) 2,640,970 shares of GRAIL's common stock at a price of $ 70.05 per share and (ii) pre-funded warrants to purchase an aggregate of 1,998,573 shares of GRAIL’s common stock (the "Pre-Funded Warrants") at a purchase price of $ 70.049 per Pre-Funded Warrant, which represents the per share price for the common stock less the $ 0.001 exercise price.

The PIPE closed on October 21, 2025, at which time the Company received aggregate net proceeds of $ 311.3 million, after deducting issuance costs of $ 13.7 million.

All of the Pre-Funded Warrants issued in the PIPE were outstanding as of December 31, 2025.

At the Market Equity Distribution Program (the “ATM Program”)

On November 14, 2025, the Company entered into an equity distribution agreement (“Equity Distribution Agreement”), with certain sales agents, establishing an ATM Program under which the Company may offer and sell shares of its common stock, having an aggregate offering price of $ 300.0 million or up to 6,900,000 shares of common stock.

During 2025, the Company issued 1,169,218 shares of its common stock and the Company received aggregate net proceeds of $ 107.5 million, after deducting issuance costs of $ 3.2 million.

As of December 31, 2025, $ 189.3 million worth of shares of common stock remained available for sale pursuant to the ATM Program.

Samsung Stock Purchase Agreement (the “Samsung SPA”)

On October 16, 2025, the Company entered into a stock purchase agreement (the “Samsung SPA”), by and among the Company, Samsung C&T Corporation (“Samsung C&T”), Samsung Electronics Singapore Pte.

(together with Samsung C&T, the “Samsung Investors”) and Samsung Electronics Co., Ltd.

(“Samsung Electronics”), providing for the issuance and sale by the Company to the Samsung Investors in a private placement of an aggregate of 1,570,308 shares of GRAIL’s common stock, at a purchase price of $ 70.05 per share, upon the terms and conditions set forth in the Samsung SPA, including closing conditions, for aggregate gross proceeds of approximately $ 110.0 million (the “Samsung Investment”).

The Company is also subject to a number of obligations described in the Samsung Stock Purchase Agreement.

The Samsung Stock Purchase Agreement contains customary representations, warranties and agreements by the Company, indemnification obligations of the Company and the Samsung Investors for liabilities under the Securities Act of 1933, as amended (the “Securities Act”), and other obligations of the parties.

The Company intends to use the net proceeds from the Samsung Investment to fund its commercial activities and reimbursement efforts, as well as for working capital and other general corporate purposes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

STOCK-BASED COMPENSATION

Stock-based compensation expense, which includes expense for both equity and liability-classified awards, reported in our consolidated statements of operations was as follows:

The components of stock-based compensation expense for both equity and liability-classified awards recognized in our consolidated statements of operations was as follows:

(in thousands) December 31, 2025

December 31, 2024

January 1, 2023 (3)

December 31, 2023

$ 54,564 $ 29,774 $ 1,127

660 1,514 577

Cash-based equity awards

— 54,796 95,531

Stock-based compensation expense, before taxes

58,283 86,084 97,235

Related income tax benefits ( 13,708 ) ( 20,890 ) ( 23,455 )

Stock-based compensation expense, net of taxes

$ 44,575 $ 65,194 $ 73,780

Stock-based compensation expense for both equity and liability-classified awards, reported in our consolidated statements of operations was as follows:

(in thousands) December 31, 2025

December 31, 2024

December 31, 2023

Cost of screening revenue (exclusive of amortization of intangible assets)

$ 2,226 $ 1,724 $ 1,932

Cost of development services revenue 36 230 38

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Stock-based compensation expense, before taxes

58,283 86,084 97,235

Related income tax benefits ( 13,708 ) ( 20,890 ) ( 23,455 )

Stock-based compensation expense, net of taxes

(1) Includes $ 54.7 million related to the Cash-Based Equity Awards, $ 29.9 million related to restricted stock units, $ 1.1 million related to Performance Options, and $ 0.4 million related to Replacement Awards.

(2) Includes $ 95.5 million related to the Cash-Based Equity Awards and $ 1.7 million related to Replacement Awards.

(3) Includes $ 65.8 million related to the Cash-Based Equity Awards and $ 9.9 million related to Replacement Awards.

$ 44,575 $ 65,194 $ 73,780

Unamortized compensation cost and weighted average service period of all unvested equity classified awards as of December 31, 2025 was as follows:

Unamortized Compensation Costs

Weighted Average Service Period

(in thousands)

RSUs and PSUs

Total unamortized compensation costs

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2024 Incentive Award Plan

The GRAIL, Inc.

2024 Incentive Award Plan (the “2024 Plan”) was adopted by GRAIL and approved by Illumina, in its capacity as GRAIL’s sole stockholder, in May 2024 to facilitate the grant of cash and equity incentive awards to non-employee directors, employees, and consultants of the Company and its subsidiaries and to enhance the ability of the Company and any of its subsidiaries to obtain and retain the services of these individuals following the Spin-Off.

2024 Incentive Award Plan (the “2024 Plan”) was adopted by the Company and approved by Illumina, in its capacity as GRAIL’s sole stockholder, in May 2024 to facilitate the grant of cash and equity incentive awards to non-employee directors, employees, and consultants of the Company and its subsidiaries and to enhance the ability of the Company and any of its subsidiaries to obtain and retain the services of these individuals following the Spin-Off.

This plan authorizes the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, performance-based awards, and other stock or cash based awards .

The restricted stock units granted to employees and directors consist of vesting periods ranging between 18 months and 48 months.

The maximum number of shares authorized for issuance under the 2024 Plan is the sum of (a) 8,656,817 shares;

and (b) an annual increase on the first day of each calendar year beginning on and including January 1, 2025 and ending on and including January 1, 2034, equal to the lesser of (i) 5 % of the aggregate number of shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the GRAIL board of directors.

The total number of shares authorized for issuance increased by 1,694,670 shares to 10,351,487 shares on the first day of fiscal year 2025 pursuant to the annual automatic evergreen increase provision of the 2024 Plan.

T he 2024 Plan is subject to an annual increase on the first day of each calendar year ending on January 1, 2034, equal to the lesser of (i) 5 % of the aggregate number of shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the GRAIL board of directors.

2024 Deferred Compensation Plan

The GRAIL, Inc.

Deferred Compensation Plan for Directors (the “2024 Deferred Compensation Plan”) was adopted by the Company’s board of directors on July 15, 2024 to provide the Company’s non-employee directors with an opportunity to defer payment of all or a portion of their eligible compensation, consisting of cash fees and/or equity awards granted during a given year.

Each director may make an irrevocable deferral election with respect to all or a portion of their eligible compensation in accordance with the terms and conditions of the 2024 Deferred Compensation Plan, deferring payment until the earlier of (i) a fixed date elected by the director (if any), (ii) the director’s separation from service, (iii) a “change in control” (as defined in the 2024 Plan) or (iv) the director’s death or permanent disability.

If a director elects to defer all or a portion of their cash fees, the Company will issue a number of deferred stock units (“DSUs”) to the director equal to the portion of cash fees deferred divided by the fair market value of a share of the Company’s common stock on the date that such fees would have otherwise been paid, rounded down to the nearest whole share.

If a director elects to defer their equity awards, the Company will issue a number of DSUs to the director equal to the number of shares of Company common stock underlying the deferred awards and subject to the same vesting, forfeiture and other restrictions that would have otherwise applied to such equity award absent the deferral.

All DSUs will be issued under the 2024 Plan.

As of December 31, 2025 , three of our directors elected to defer their 2025 cash fees and two of our directors elected to defer their equity awards granted in 2025 .

A summary of the Company’s shares available for grant under the 2024 Plan, was as follows:

Shares Available for Grant

Balance as of the Spin-Off 8,656,817

(in thousands)

Balance as of December 31, 2024 479,339

Annual increase 1,694,670

Awarded ( 2,152,456 )

1 unchanged sentence

Balance as of December 31, 2025 513,386

2024 Deferred Compensation Plan

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The GRAIL, Inc.

Deferred Compensation Plan for Directors (the “2024 Deferred Compensation Plan”) was adopted by GRAIL’s board of directors on July 15, 2024 to provide GRAIL’s non-employee directors with an opportunity to defer payment of all or a portion of their eligible compensation, consisting of cash fees and/or equity awards granted during a given year.

If a director elects to defer all or a portion of their cash fees, GRAIL will issue a number of DSUs to the director equal to the portion cash fees deferred divided by the fair market value of a share of GRAIL’s common stock on the date that such fees would have otherwise been paid, rounded down to the nearest whole share.

If a director elects to defer their equity awards, GRAIL will issue a number of deferred stock units to the director equal to the number of shares of GRAIL common stock underlying the deferred awards and subject to the same vesting, forfeiture and other restrictions that would have otherwise applied to such equity award absent the deferral.

All DSUs will be issued under the 2024 Incentive Award Plan.

As of December 31, 2024 , three of our directors had elected to defer their 2024 cash fees and two of our directors had elected to defer their equity awards granted in 2024.

2024 Inducement Award Plan

The GRAIL, Inc.

2024 Inducement Award Plan (the “2024 Inducement Plan”) was adopted by GRAIL’s board of directors on August 9, 2024.

2024 Inducement Award Plan (the “2024 Inducement Plan”) was adopted by the Company’s board of directors on August 9, 2024.

The 2024 Inducement Plan was adopted to enhance the ability of the Company and any of its subsidiaries to attract, retain and motivate eligible employees by providing these employees with equity ownership opportunities and/or equity-linked compensatory opportunities.

The plan is used exclusively for the grant of equity awards to prospective employees who (i) were not previously employees of GRAIL, or (ii) are returning to GRAIL following a bona fide period of non-employment, in any case, in connection with and as an inducement material to such prospective employee’s entering into employment with GRAIL pursuant to Nasdaq Listing Rule 5635(c)(4).

A summary of the Company’s restricted stock unit activity is as follows:

Stock Units Weighted-Average

Grant-Date Fair

Value Per Share

(Units in thousands)

The 2024 Inducement Plan is used exclusively for the grant of equity awards to prospective employees who (i) were not previously employees of the Company, or (ii) are returning to the Company following a bona fide period of non-employment, in any case, in connection with and as an inducement material to such prospective employee’s entering into employment with the Company pursuant to Nasdaq Listing Rule 5635(c)(4).

The 2024 Inducement Plan authorizes the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, performance-based awards, and other stock or cash based awards.

On May 14, 2025, the Company registered an additional 500,000 shares of common stock that may be issued pursuant to awards granted under the 2024 Inducement Plan.

The 2024 Inducement Plan does not have a specified limit on the number of shares authorized for issuance.

2024 Employee Stock Purchase Plan

The GRAIL, Inc.

2024 Employee Stock Purchase Plan (the “ESPP”) was adopted by the Company and approved by Illumina, in its capacity as the Company’s sole stockholder, in May 2024.

The number of shares of common stock available under the ESPP is subject to an annual increase on the first day of each calendar year ending on January 1, 2034, equal to the lesser of (i) 1 % of the aggregate number of shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the Company’s board of directors.

Under the ESPP, eligible employees are offered the opportunity to purchase shares by participating in a 6-month offering period commencing in May and November of each year.

Employees who participate in the ESPP may elect to have up to 15 % of their eligible compensation withheld to purchase shares of the Company’s common stock.

The purchase price of the Company’s common stock will be equal to 85 % of the lower of (i) the fair market value of the Company’s common stock at the beginning of the applicable 6-month offering period or (ii) the fair market value of the Company’s common stock at the end of the applicable 6-month offering period.

Our first offering period began in May 2025 with our first purchase date in November 2025.

There were no shares issued under the ESPP during the year ended December 31, 2024.

A summary of the Company’s shares available for grant under the ESPP, was as follows:

Shares Available for Grant

(in thousands)

Balance as of December 31, 2024 414,021

Annual increase 338,934

Balance as of December 31, 2025 616,404

(1) Represent $ 4.5 million in cash received for the issuance of common stock under the ESPP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Equity-Classified Awards

Restricted Stock Units

During the year ended December 31, 2025, the Company granted two PSU awards (the “PSU Awards”) under the 2024 Plan with vesting conditions tied to achievement of Company-specific performance and continued service.

The PSU Awards have differing vesting schedules.

The first PSU Award, covering 26,000 shares, vests as to one-third of the shares subject thereto upon the achievement of a Company-specific performance condition, with the remaining two-thirds of the shares subject thereto vesting in substantially equal installments on each of the first and second anniversaries of the initial vesting date, subject to continued service through the applicable vesting date.

The second PSU Award, covering 5,000 shares, vests as to 60 % of the shares subject thereto upon the achievement of a Company-specific performance condition, with the remaining 40 % of the shares subject thereto vesting on the first anniversary of the initial vesting date, subject to continued service through the applicable vesting date.

The PSU Awards had an aggregate grant-date fair value of $ 1.6 million and expire, to the extent unvested, in May and November 2035, respectively.

As of December 31, 2025, it was not probable that the performance conditions associated with the PSU Awards will be achieved and, therefore, no stock-based compensation expense has been recognized in the consolidated financial statements.

In February 2026, the performance condition of the first PSU Award was met.

As a result, the Company will commence recognizing stock-based compensation expense in the consolidated financial statements for this PSU Award in Q1 2026.

A summary of the Company’s RSUs, PSUs, and DSUs, issued under the 2024 Plan and 2024 Inducement Award Plan, were as follows:

Restricted Stock Units (1)

Weighted-Average Grant-Date Fair Value Per Share

(in thousands)

Outstanding at January 1, 2024 — $ —

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Outstanding at December 31, 2024 5,523 $ 14.22

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2,407 $ 40.79

Released ( 2,491 ) $ 15.21

Forfeited ( 576 ) $ 22.83

Outstanding at December 31, 2025 4,863 $ 25.84

(1) Includes 31,000 PSU awarded and 30,865 DSUs vested but unreleased related to three directors that had elected to defer their 2025 cash fees and two directors that had elected to defer release of their equity awards

The aggregate fair value of restricted stock units outstanding as of December 31, 2025 and December 31, 2024 was $ 416.2 million and $ 98.6 million.

The fair value of all RSUs that vested during the years ended December 31, 2025, December 31, 2024, and December 31, 2023 was $ 93.8 million , $ 45.5 million, and $ 0.5 million .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024 , there were 4,442 DSUs that were vested but unreleased related to the three directors that had elected to defer their 2024 cash fees.

As of December 31, 2024, approximately $ 48.2 million of total unrecognized compensation cost related to restricted stock units was expected to be recognized over a weighted average period of approximately 1.2 years.

Pre-tax intrinsic value of outstanding restricted stock a s of December 31, 2024, was $ 98.6 million.

There was no pre-tax intrinsic value of outstanding restricted stock as of December 31, 2023.

The fair value of restricted stock that vested during the years ended December 31, 2024 and December 31, 2023 was $ 45.5 million and $ 0.5 million, respectively.

2024 Employee Stock Purchase Plan

The GRAIL, Inc.

2024 Employee Stock Purchase Plan (the “ESPP”) was adopted by GRAIL and approved by Illumina, in its capacity as GRAIL’s sole stockholder, in May 2024.

The number of shares of Company common stock initially available under the ESPP is equal to (a) 414,021 (b) an annual increase on the first day of each calendar year beginning on and including January 1, 2025 and ending on and including January 1, 2034, equal to the lesser of (i) 1 % of the aggregate number of shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the GRAIL board of directors.

There were 414,021 shares of Company common stock initially available for issuance pursuant to the ESPP.

As of December 31, 2024 , no shares had been granted under the ESPP plan.

The total number of shares authorized for issuance increased by 338,934 shares to 752,955 shares on the first day of fiscal year 2025 pursuant to the annual automatic evergreen increase provision of the ESPP.

Performance Stock Options

The Company has two PSOs outstanding.

The outstanding PSOs, have contractual terms of ten years from the respective grant dates, generally vest monthly over three years upon the achievement of Company-specified performance targets, and are subject to continued service through the applicable vesting date.

The performance condition for one of the outstanding awards of PSOs covering 63,484 shares that has an exercise price of $ 14.00 per share was met on November 1, 2024, meaning that this option now vests and becomes exercisable in thirty-six equal monthly installments on the monthly anniversaries of November 1, 2024, subject to continued service through the vesting date.

As of December 31, 2025, 22,925 shares subject to this PSO were vested and exercisable.

The second outstanding award of PSOs covers 40,831 shares has an exercise price of $ 12.80 per share and will commence vesting upon meeting certain performance-based conditions;

achievement of this performance condition is not considered probable as of December 31, 2025.

As such, there has been no expense recognized for this PSO.

PSOs activity, issued under the 2024 Plan, were as follows:

Performance Options

The Company has two awards of performance-based stock options (“Performance Options”) outstanding.

The outstanding Performance Options, in general, have contractual terms of ten years from the respective grant dates.

The Performance Options generally vest monthly over three years upon the achievement of Company-specified performance targets and are subject to continued service through the applicable vesting date.

The performance condition for one of the outstanding awards of Performance Options covering 63,484 shares that has an exercise price of $ 14.00 per share was met on November 1, 2024, meaning that this option now vests and become exercisable in thirty-six equal monthly installments on the monthly anniversaries of November 1, 2024, subject to continued service through the vesting date.

As of December 31, 2024, 1,763 shares subject to this Performance Option were vested and exercisable.

The other outstanding award of Performance Options covers 40,831 shares has an exercise price of $ 12.80 per share and will commence vesting upon meeting certain performance-based conditions;

achievement of this performance condition is considered not probable as of December 31, 2024.

As such, there has been no expense recognized for this Performance Option.

As of December 31, 2024 , approximately $ 1.1 million of total unrecognized compensation cost related to the Performance Options was expected to be recognized over a period of approximately 2.9 years.

The aggregate intrinsic value of the Performance Options outstanding as of December 31, 2024 and December 31, 2023 was $ 0.5 million and $ 0.9 million, respectively.

Performance stock option activity was as follows:

(Units in thousands) Performance

Stock Options Weighted-Average

Exercise Price

Outstanding at December 31, 2023 — $ —

Converted 104 $ 13.53

Weighted-Average Exercise Price Per Share

Weighted-Average Contractual Term

(in thousands)

Outstanding at December 31, 2025 104 $ 13.53 4.2

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Vested and Exercisable at December 31, 2025 23 $ 14.00 4.2

The aggregate intrinsic value of the PSOs outstanding as of December 31, 2025 and December 31, 2024 was $ 7.5 million and $ 0.5 million.

Fair Value Valuation Assumptions

The fair value of employee stock purchase rights under the ESPP have been estimated with the following assumptions using the Black-Scholes-Merton option-pricing model:

December 31, 2025

Weighted-average assumptions:

Expected life (in years)

Risk-free interest rate

Expected volatility

Expected dividend

Weighted-average estimated grant date fair value per share $ 59.31

The expected term represents the term from the first day of the offering period to the purchase date.

The risk-free interest rate assumption was based upon observed interest rates of Treasury bills appropriate for the expected term.

For the Company’s first offering, the expected stock price volatility was estimated using the average of the Company’s historical volatility and the average historical volatility of comparable peer companies, as the Company had limited trading history as a public company.

For the current offering and future offerings, the expected stock price volatility is estimated using the Company’s historical volatility, as sufficient trading history has been established and is considered representative of expected future stock price trends.

Expected dividend yield was 0 % as the Company has not paid and does not anticipate paying dividends on its common stock.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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Payments in respect of the Cash-Based Equity Awards before such adjustment were paid out in cash based on the adjusted value of the Cash-Based Equity Award on the applicable vesting date.

During the second quarter of 2024, one-time Cash-Based Equity Awards were granted to GRAIL employees, including executives, for retention purposes (“2024 Transition Incentive Awards”) with a total grant date fair value of $ 40.2 million which were treated as a liability-classified awards.

Each 2024 Transition Award vests entirely in one year or less from its grant date, subject to the applicable holder’s continued service through the vesting date or, if earlier upon (i) the applicable holder’s termination due to death or disability or (ii) following a “change in control” (as defined in the award agreement evidencing the 2024 Transition Incentive Awards), the applicable holder’s termination without “cause” or for “good reason” (each as defined in the award agreement evidencing the 2024 Transition Incentive Awards).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Each 2024 Transition Incentive Awards vested entirely in one year or less from its grant date, subject to the applicable holder’s continued service through the vesting date.

In connection with the Spin-Off, the 2024 Transition Incentive Awards were converted into RSUs covering 2.5 million shares in accordance with the Employee Matters Agreement by dividing the aggregate award value by the volume-weighted average share price over the first four trading days following the Spin-Off.

On the modification date, June 28, 2024, these liability-classified 2024 Transition Incentive Awards in the amount of $ 4.4 million were reclassified to Additional Paid-In Capital.

On the modification date, June 28, 2024, these 2024 Transition Incentive Awards in the amount of $ 4.4 million were reclassified to Additional Paid-In Capital.

In connection with the Spin-Off, all outstanding Cash-Based Equity Awards, with the exception of the 2024 Transition Incentive Awards described above, were modified and converted into RSUs in accordance with the Employee Matters Agreement, with the number of RSUs determined by dividing the Aggregate Award Value (as discussed below) for such Cash-Based Equity Award by the volume-weighted average share price of GRAIL stock on the first four trading days following the Spin-Off.

All other terms and conditions of the awards, including vesting

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and payment terms, were unaffected by the conversion.

All other terms and conditions of the awards, including vesting and payment terms, were unaffected by the conversion.

For each Cash-Based Equity Award, the “Aggregate Award Value” is equal to, (i) for the portion of such award originally scheduled to vest in 2024, the initial grant value of such portion, and (ii) for the remaining unvested portion of such award, the initial grant value of such portion adjusted up or down based on a percentage, with such percentage determined by (A) GRAIL’s average closing market capitalization for the four trading days immediately following the distribution date minus the aggregate equity value of GRAIL at the time the Cash-Based Equity Award was granted, as reflected in the consolidated financial statements of Illumina (the “Baseline Equity Value”), divided by (B) the Baseline Equity Value.

For each Cash-Based Equity Award, the “Aggregate Award Value” was equal to, (i) for the portion of such award originally scheduled to vest in 2024, the initial grant value of such portion, and (ii) for the remaining unvested portion of such award, the initial grant value of such portion adjusted up or down based on a percentage, with such percentage determined by (A) GRAIL’s average closing market capitalization for the four trading days immediately following the distribution date minus the aggregate equity value of GRAIL at the time the Cash-Based Equity Award was granted, as reflected in the consolidated financial statements of Illumina (the “Baseline Equity Value”), divided by (B) the Baseline Equity Value.

Upon modification, the awards became equity-classified.

The value of tranches of the Cash-Based Equity Awards that vest in future years (exclusive of the 2024 Transition Incentive Awards described above) was reduced and, as a result, there was no incremental compensation cost.

The value of tranches of the Cash-Based Equity Awards (exclusive of the 2024 Transition Incentive Awards described above) was reduced and, as a result, there was no incremental compensation cost.

Approximately 1,300 grantees were impacted by this modification.

On the modification date, June 28, 2024, the liability-classified awards were reclassified to Additional Paid-In Capital at their fair value in the amount of $ 50.3 million.

Due to the higher value of the 2024 tranche of the Cash-Based Equity Awards, compensation cost will be recognized over the vesting period to ensure compensation cost has been recognized at least equal to the amount that is legally vested.

As the result of this modification, the Cash-Based Equity Awards that were outstanding on the Distribution Date (in addition to the 2024 Transition Incentive Awards) were converted to 4.0 million RSUs to be settled in GRAIL RSUs shares.

Cash-Based Equity Award activity was as follows:

Due to the higher value of the 2024 tranche of the Cash-Based Equity Awards, compensation cost was recognized over the vesting period to ensure compensation cost had been recognized at least equal to the amount that was legally vested.

There were no Cash-Based Equity Award outstanding as of December 31, 2025.

Cash-Based Equity Award activity for the periods presented was as follows:

(in thousands) December 31,

2024 December 31,

2023 January 1, 2023

Beginning balance $ 292,189

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Outstanding balance $ —

Replacement Awards

Illumina issued Replacement Awards to GRAIL employees in exchange for any of their remaining outstanding and unvested GRAIL equity awards as of the Closing Date.

The Replacement Awards, granted under Illumina’s 2015 Stock and Incentive Compensation Plan (the 2015 Stock Plan), consisted of restricted stock units and performance stock options that were issued as shares of Illumina common stock at vesting.

Replacement Awards granted in the form of restricted stock units generally vested over a two-year period with equal vesting quarterly.

The terms of the Replacement Awards were substantially similar to the former GRAIL equity awards for which they were exchanged.

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A summary of the Company’s replacement restricted stock unit activity is as follows:

Stock Units Weighted-Average

Grant-Date Fair

Value Per Share

(Units in thousands)

Outstanding at January 2, 2022 47 $ 510.61

Vested ( 39 ) $ 510.61

Cancelled ( 6 ) $ 510.61

Outstanding at January 1, 2023 2 $ 510.61

Vested ( 2 ) $ 510.61

Outstanding at December 31, 2023

A summary of the Company’s replacement performance options activity is as follows:

(Units in thousands) Performance

Stock Options Weighted-Average

Exercise Price

Outstanding at January 2, 2022 17 $ 85.54

Outstanding at January 1, 2023 17 $ 85.54

Exercised ( 1 ) $ 16.69

Outstanding at December 31, 2023 16 $ 87.74

As of the Distribution Date, there were two remaining unvested Performance Options.

In connection with the Spin-Off, unvested replacement performance-based stock options previously issued to GRAIL employees to purchase Illumina common stock were converted into Performance Options in accordance with the Employee Matters Agreement.

On June 28, 2024, the modification date, the Company accounted for the modification of the two Performance Options as Type I (for the Performance Option for which the performance condition was met on November 1, 2024) and Type IV (for the Performance Option for which achievement of the performance condition was considered not probable) modifications, respectively.

These options were converted at a ratio equal to the average of the volume weighted average per share price of Illumina stock trading during the four days immediately preceding the Distribution Date divided by the average of volume weighted average per share price of GRAIL common stock on the first four trading days immediately following the Distribution Date.

For the Performance Option with Type I modification, the incremental charge recognized of the difference in the fair value of the option before and immediately after the modification was immaterial.

For the Performance Option with Type IV modification, the fair value of the award as of the Modification Date will be used for expense purposes once the award becomes probable of achievement.

As the result of this modification, the Performance Options that were outstanding on the Distribution Date were converted to 0.1 million options.

The Company has entered into operating leases for facilities and equipment used for research and development.

The Company has entered into operating leases for facilities utilized for commercial and research and development.

Operating leases have remaining lease terms which range from less than 1 year to 8 years, and often include one or more options to renew.

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The Company also has variable lease payments that are primarily comprised of common area maintenance and utility charges.

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The Company’s weighted average remaining lease term is approximately 7.3 years and 7.6 years as of December 31, 2024, and December 31, 2023, respectively.

The Company’s weighted average discount rate for operating leases is 2.5 % and 2.4 % as of December 31, 2024, and December 31, 2023, respectively.

The components of lease costs are as follows:

(in thousands) December 31,

2024 December 31,

2023 January 1,

Operating lease costs $ 17,767 $ 18,577 $ 24,357

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Total lease costs $ 21,828 $ 23,243 $ 28,033

The Company’s weighted average remaining lease term and weighted average discount rate for operating leases were as follows:

As of December 31,

Weighted-average remaining lease term 6.9 years 7.3 years

Weighted average discount rate 2.6 % 2.5 %

Future undiscounted lease payments under operating leases as of December 31, 2025 were as follows:

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approximately $ 0.3 million in 2026 and $ 9.4 million thereafter.

Excluded from the lease obligation table above is a commercial lease agreement (the “Lease”) entered into by and between the Company and Sunnyvale Office Acquisition, LLC, as of September 11, 2025, pursuant to which the Company agreed to lease an aggregate of approximately 75,556 square feet for a new corporate headquarters in Sunnyvale, California, which will be recognized as an operating lease upon the lease commencement date.

The actual timing of lease commencement for accounting purposes, as well as the Company’s obligation to begin making payments and recognizing rental and other expenses, is dependent upon when the space is made available to the Company and the Company obtains control of the underlying asset.

The Company’s current estimate of the total estimated undiscounted lease payments, excluding the renewal option and option to expand into additional space, for this leased office space is approximately $ 61.7 million.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

COMMITMENTS AND CONTINGENCIES

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As of December 31, 2025

(in thousands) Purchase

(in thousands) Purchase Commitments

2026 $ 25,023

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These agreements contain minimum annual royalty payments which are cancellable at the Company’s discretion, therefore they are not reflected in the above chart.

Additionally, some of these licensing agreements include royalties that would be

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payable on net sales of Galler i , and any future products, pursuant to existing agreements and licenses with Illumina, the Chinese University of Hong Kong, and other third parties in excess of minimum annual royalty payments.

Additionally, some of these licensing agreements include royalties that would be payable on net sales of Galler i , and any future products, pursuant to existing agreements and licenses with Illumina, the Chinese University of Hong Kong, and other third parties in excess of minimum annual royalty payments.

Purchase Commitments

The purchase commitments primarily relate to contractual commitments for future use of web services, laboratory supplies and marketing events in the normal course of business.

The purchase commitments primarily relate to contractual commitments for future use of web services, and laboratory supplies in the normal course of business.

Intellectual Property

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As a result, the Company believes the estimated fair value of these agreements is minimal.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LEGAL AND REGULATORY PROCEEDINGS

The Company is subject to various claims, complaints, regulatory proceedings, and legal actions that arise from time to time in the ordinary course of business.

Antitrust and Competition Proceedings

On March 30, 2021, the U.S.

Federal Trade Commission (“FTC”) issued an administrative complaint seeking to prevent the Acquisition.

On September 1, 2022, an administrative law judge issued a decision in favor of the transaction and dismissed the FTC’s complaint.

The FTC’s complaint counsel appealed to the full FTC Commission.

On March 31, 2023, the FTC Commission issued a decision overturning the administrative law judge’s prior ruling.

GRAIL and Illumina appealed the FTC’s decision to the U.S.

Court of Appeals for the Fifth Circuit (“Fifth Circuit”).

On December 15, 2023, the Fifth Circuit issued its opinion and order, in which the court ruled that the FTC applied the incorrect standard in assessing Illumina’s open offer contract and, on that basis, vacated the FTC order and remanded the case to the FTC for reconsideration of the effects of the open offer contract under the proper standard as described in the Fifth Circuit Court’s decision, and in all other respects upheld the FTC’s decision.

Following completion of the Spin-Off, the Company and Illumina sought dismissal of the FTC’s complaint on July 30, 2024.

On August 15, 2024, the FTC dismissed without prejudice the complaint on

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the basis that the Spin-Off effectively abandoned the transaction giving rise to the complaint (the “FTC Dismissal”).

On April 19, 2021, the European Commission accepted a request for a referral of the GRAIL, Inc.

acquisition for European Union merger review, submitted by a Member State of the European Union (France), and joined by several other EEA Member States (Belgium, Greece, Iceland, the Netherlands, and Norway), under Article 22(1) of Council Regulation (EC) No 139/2004 (the “EU Merger Regulation”).

On April 28, 2021, Illumina filed an action in the General Court of the European Union (the “EU General Court”) asking for annulment of the European Commission’s assertion of jurisdiction to review the Acquisition under Article 22 of the EU Merger Regulation, as the Acquisition did not meet the jurisdictional criteria under the EU Merger Regulation or under the national merger control laws of any Member State of the European Union.

On July 13, 2022, the EU General Court confirmed the European Commission’s jurisdiction to examine the Acquisition (“EU General Court Article 22 Judgment”).

On September 22 and September 30, 2022, Illumina and the Company each asked for annulment of the EU General Court Article 22 Judgment at the Court of Justice of the European Union (“EU Court of Justice”).

On September 3, 2024, the EU Court of Justice set aside the EU General Court’s judgment and annulled the European Commission’s decision to review Illumina’s acquisition of Grail on the basis the European Commission did not have the jurisdiction to do so (the “ECJ Decision”).

During the period between the initial assertion of jurisdiction by the European Commission on April 19, 2021 and the completion of the Spin-Off, the European Commission adopted several additional orders consisting of orders imposing interim measures on October 29, 2021 and October 28, 2022 (the “Interim Measures Orders”), a decision finding Illumina’s acquisition of GRAIL, Inc.

incompatible with the internal market in the European Union on September 6, 2022 and a decision requiring Illumina to divest the Company and to restore the situation prevailing before the Company’s acquisition by Illumina (the “Divestment Decision”).

The Company operated under the Interim Measures Decisions from the period of adoption through the Spin-Off.

The Spin-Off was conducted pursuant to the Divestment Decision and a divestment plan prepared by Illumina and approved by the European Commission as provided by the terms of the Divestment Decision.

With the completion of the Spin-Off and the effectiveness of the ECJ Decision, these additional orders are no longer in effect.

With the completion of the Spin-Off, the FTC Dismissal and the ECJ Decision, the Company believes these matters are substantially concluded.

SEC Inquiry Letter

We may also be a party or otherwise involved in new litigation proceedings regarding the Acquisition.

For example, in July 2023, Illumina was informed that the staff of the SEC was conducting an investigation relating to Illumina and was requesting documents and communications primarily related to Illumina’s acquisition of GRAIL and certain statements and disclosures concerning GRAIL, our products and the acquisition, and related to the conduct and compensation of certain members of Illumina and GRAIL management, among other things.

GRAIL is cooperating with the SEC in this investigation.

Federal Securities Class Actions

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On June 21, 2024, the Lead Plaintiffs filed a consolidated amended complaint.

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The amended complaint alleges that GRAIL, in addition to Illumina, and certain of their respective current and former directors and others violated sections 10(b) and 20(a) of the Securities Exchange Act and SEC Rule 10b-5 in connection with Illumina's acquisition of GRAIL and disclosures concerning the same.

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On September 13, 2024 the plaintiffs further amended the complaint.

On November 12, 2024, the Company and other defendants filed a motion to dismiss the second amended consolidated complaint.

On December 20, 2024, the Lead Plaintiffs filed their opposition to the motion to dismiss.

The defendants’ final reply brief was filed on February 3, 2025.

No hearing date has been set.

The Company denies the allegations in the complaints and intends to vigorously defend the litigation.

On November 12, 2024, the Company moved to dismiss Lead Plaintiffs’ second amended complaint for failure to state a claim under Sections 10(b) and 20(a) of the Exchange Act.

Lead Plaintiffs filed their opposition to the motion to dismiss on December 20, 2024, and the Company filed its reply in support of its motion to dismiss on February 3, 2025.

On September 26, 2025, the court granted the motion to dismiss for failure to state a claim with leave to amend, and ordered the plaintiffs to file an amended complaint, if any, by October 27, 2025.

On October 27, 2025, the Lead Plaintiffs filed their third amended complaint.

On December 12, 2025, the Company filed a motion to dismiss Lead Plaintiffs’ third amended complaint.

In light of the fact that the lawsuits are in an early stage, the Company cannot predict the ultimate outcome of the suits.

Other Legal Matters

Legal matters include various claims, complaints, and legal actions that arise from time to time.

In addition to direct involvement in legal matters, the Company has entered into indemnification agreements with each of its current and former directors, executive officers, and certain other officers to provide these directors and officers with indemnification, and has certain indemnification obligations under the Company’s charter and bylaws to these individuals, which may give rise to liability for the Company even if the Company is not directly named.

The Company has indemnification obligations in respect of the Kangas Actions and with respect to other legal matters that may arise, or have arisen, from time to time.

There can be no assurance that existing or future legal proceedings arising in the ordinary course of business or otherwise will not have a material adverse effect on the Company’s financial statements.

In addition to direct involvement in legal matters, the Company has entered into indemnification agreements with each of its current and former directors, executive officers, and certain other officers to provide these directors and officers, and has certain indemnification obligations under the Company’s charter and bylaws to these individuals, which may give rise to liability for the Company even if the Company is not directly named.

The Company has indemnification obligations in respect of the Actions and with respect to other legal matters that may arise, or have arisen, from time to time.

The Company is involved in various lawsuits and claims arising in the ordinary course of business, including actions with respect to employment matters.

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The Company regularly reviews outstanding legal matters to determine the adequacy of the liabilities accrued and related disclosures.

The Company may change its estimates if its assessment of the various factors changes and the amount of ultimate loss may differ from estimates, resulting in a material effect on the Company’s business, financial statements.

As of December 31, 2024 , there were no pending litigation with any probable losses that can be reasonably estimated .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

financial condition, results of operations, and/or cash flows.

As of December 31, 2025 , the Company is unable to estimate a range of possible loss in excess of the amounts accrued .

Contingencies

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Should the Company not be able to secure the terms it expects, these estimates may change and will be recognized in the period in which they are identified.

In connection with the Spin-Off, Illumina provided the Company with disposal funding in the amount of $ 932.3 million in accordance with the Separation and Distribution Agreement, subject to a clawback feature.

The clawback is triggered if, prior to September 24, 2025 (the 15 -month anniversary of the Distribution Date), the Company (i) consummates a change in control of the Company or (ii) (1) pays any dividend on, or makes any other distribution in respect of, any shares of its capital stock or other equity or voting interests (other than a stock dividend or a stock split), or otherwise consummates a return of capital from GRAIL to any of its equity holders or (2) redeems, purchases or otherwise acquires any of its outstanding shares of capital stock or other equity or voting interests (other than the acquisition of any shares in order to effectuate a “net settlement” transaction for the purposes of satisfying tax withholding obligations arising in connection with the grant, vesting, exercise and/or settlement of any outstanding incentive equity awards of GRAIL held by its current or former employees).

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Company consummates a transaction described in the foregoing clause (ii), the Company must return to Illumina a cash amount equal to the payments made by the Company in connection with such transaction.

The amount of clawback payments made cannot exceed the amount of the initial disposal funding.

As of December 31, 2024 , no contingency liability was recorded as the contingent loss is not probable.

On June 21, 2024, in connection with the Spin-Off, Illumina and the Company also entered into the Tax Matters Agreement to govern the respective rights, responsibilities and obligations of Illumina and the Company after the Spin-Off with respect to all tax matters and will include restrictions to preserve the tax-free status of the Distribution.

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RESTRUCTURING

On August 9, 2024, following a portfolio review, the Company’s Board of Directors approved a restructuring plan (“Restructuring Plan”) designed to re-prioritize the Company’s resources to focus on its core MCED business and reduce overall spend as the Company progresses towards completion of registrational studies and premarket approval application (“PMA”) submission.

The Restructuring Plan was substantially completed in the fourth quarter of 2024, and the Company incurred approximately $ 18.3 million of total restructuring charges from August 9, 2024 through December 31, 2024, consisting primarily of employee severance, benefits, payroll taxes, asset impairments and other associated costs.

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Research and development $ ( 47 ) $ 111 $ 64

Sales and marketing ( 83 ) — ( 83 )

General and administrative ( 31 ) 16 ( 15 )

Total $ ( 161 ) $ 127 $ ( 34 )

Year Ended December 31, 2024

(in thousands) Severance and related benefit costs Other Costs

Research and development

$ 8,783 $ 297 $ 9,080

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$ 17,538 $ 775 $ 18,313

As of December 31, 2024, the Company had a $ 1.0 million remaining restructuring liability, consisting primarily of accrued severance costs, which are included in "Accrued liabilities" in the accompanying consolidated balance sheets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2025, the Company had no remaining restructuring liability.

The following table summarizes the restructuring-related liabilities:

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Restructuring charges $ 17,538 $ 775 $ 18,313

$ 17,538 $ 775 $ 18,313

Cash payments made ( 16,732 ) ( 454 ) ( 17,186 )

( 16,732 ) ( 454 ) ( 17,186 )

Non-cash charges — ( 99 ) ( 99 )

— ( 99 ) ( 99 )

Amount recorded in accrued liabilities as of December 31, 2024 806 222 1,028

$ 806 $ 222 $ 1,028

Restructuring charges ( 161 ) 127 ( 34 )

Cash payments made ( 645 ) ( 349 ) ( 994 )

Amount recorded in accrued liabilities as of December 31, 2025

NET LOSS PER SHARE

Prior to the completion of the Spin-Off from Illumina, the Company had no common shares issued and outstanding.

Prior to the Spin-Off, the Company had no common shares issued and outstanding.

In connection with the Spin-Off, on June 24, 2024, there were 31.0 million shares of GRAIL common stock distributed to Illumina stockholders.

This share amount is utilized for the calculation of basic and diluted

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earnings per share for all periods presented prior to the Spin-Off.

For the years ended December 31, 2023 and January 1, 2023, these shares are treated as issued and outstanding for purposes of calculating historical earnings per share.

The following table presents the calculation of the Company’s basic and diluted net loss per share attributable to common stockholders:

This share amount is utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the Spin-Off.

For the year ended December 31, 2023 these shares are treated as issued and outstanding for purposes of calculating historical earnings per share.

The following table presents the calculation of the Company’s basic and diluted net loss per share :

(in thousands, except share and per share data) December 31,

2024 December 31,

2023 January 1,

Net loss $ ( 408,351 ) $ ( 2,027,005 ) $ ( 1,465,685 )

Weighted average shares of common stock—basic and diluted 36,753,751 31,901,259 31,049,148

31,901,259 31,049,148 31,049,148

Net loss per share attributable to common stockholders

Net loss per share

Basic $ ( 11.11 ) $ ( 63.54 ) $ ( 47.21 )

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Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share, as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive.

The following weighted-average common stock equivalents were excluded from the calculation of diluted net loss per share for the periods presented as they had an anti-dilutive effect:

2024 December 31,

2023 January 1,

The following common stock equivalents were excluded from the calculation of diluted net loss per share for the periods presented as they had an anti-dilutive effect:

Unvested restricted stock units 4,831,956 5,523,029 6,564,282

Shares subject to options to purchase common stock 102,552 104,315 104,315

Unvested performance options 104,315 104,315 104,315

Unvested performance stock units

Shares issuable under ESPP 74,453 — —

5,041,724 5,627,344 6,668,597

Income (loss) before income taxes summarized by region was as follows:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loss before income taxes summarized by region was as follows:

(in thousands) December 31,

2024 December 31,

2023 January 1,

United States $ ( 540,192 ) $ ( 2,165,006 ) $ ( 1,509,885 )

Foreign 5,688 2,645 2,249

Loss before provision for (benefit from) income taxes $ ( 2,162,361 ) $ ( 1,507,636 ) $ ( 5,441,388 )

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The provision for (benefit from) income taxes consisted of the following:

Loss before benefit from income taxes

$ ( 534,504 ) $ ( 2,162,361 ) $ ( 1,507,636 )

The benefit from income taxes consisted of the following:

(in thousands) December 31,

2024 December 31,

2023 January 1,

Current taxes:

Federal $ 1,125 $ — $ —

Foreign — ( 1,628 ) ( 3,798 )

Total current income tax expense/(benefit)

$ 1,125 $ ( 1,628 ) $ ( 3,798 )

Deferred taxes:

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State ( 15,528 ) ( 41,544 ) ( 16,134 )

Total deferred income tax expense/(benefit) ( 133,728 ) ( 38,153 ) ( 39,063 )

Provision for (Benefit from) income taxes $ ( 135,356 ) $ ( 41,951 ) $ ( 42,290 )

The provision for (benefit from) income taxes reconciles to the amount computed by applying the federal statutory rate to income (loss) before income taxes as follows:

(in thousands) December 31,

2024 December 31,

2023 January 1,

Total deferred income tax benefit

( 127,278 ) ( 133,728 ) ( 38,153 )

Benefit from income taxes

$ ( 126,153 ) $ ( 135,356 ) $ ( 41,951 )

The benefit from income taxes reconciles to the amount computed by applying the federal statutory rate to loss before income taxes as follows:

(in thousands)

Tax at federal statutory rate

State, net of federal benefit (1)

( 11,190 ) 2.1 % ( 29,235 ) 1.4 % ( 13,283 ) 0.9 %

Research tax credits

( 3,589 ) 0.7 % ( 7,145 ) 0.3 % ( 1,827 ) 0.1 %

Change in valuation allowance

Impact of foreign operations ( 685 ) ( 1,299 ) ( 4,352 )

Stock compensation 252 134 1,767

Impact of acquisition related items 2,156 3,520 2,548

111 — % 166,475 ( 7.7 ) % 160,664 ( 10.7 ) %

Nontaxable or nondeductible items

Goodwill impairment

Change in tax rates — — —

Other 1,713 5,398 1,384

Total tax provision (benefit from) income taxes $ ( 135,356 ) $ ( 41,951 ) $ ( 42,290 )

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— — % 186,641 ( 8.6 ) % 127,778 ( 8.5 ) %

Stock compensation

( 5,920 ) 1.1 % 88 — % 134 — %

6,681 ( 1.3 ) % 1,942 ( 0.1 ) % 1,186 — %

Total tax benefit from income taxes

$ ( 126,153 ) 23.6 % $ ( 135,356 ) 6.3 % $ ( 41,951 ) 2.8 %

(1) State taxes in California, Georgia, New York, New York City, and Illinois made up the majority (greater than 50 percent) of the tax effect in this category.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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research and development expenses

16,497 23,088

Other amortization 53,792 57,401

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Purchased intangible amortization $ ( 461,714 ) $ ( 488,874 )

Property and equipment — ( 2,964 )

Operating lease right-of-use assets ( 12,957 ) ( 16,076 )

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Based on the available evidence as of December 31, 2025, the Company was not able to conclude it is more likely than not certain deferred tax assets will be realized.

Therefore, a valuation allowance of $ 7.7 million was recorded against certain foreign deferred tax assets.

As of December 31, 2024, the net operating loss carryforwards for federal and state tax purposes were $ 151.0 million and $ 107.1 million, respectively.

Therefore, a valuation allowance of $ 6.9 million was recorded against certain federal, state, and foreign deferred tax assets.

As of December 31, 2025, the net operating loss carryforwards for federal and state tax purposes were $ 567.0 million and $ 424.2 million.

Net operating loss carryforwards for state tax purposes will begin to expire in 2034 unless utilized prior.

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These annual limitations may result in the expiration of net operating losses and credits prior to utilization.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

(in thousands) December 31,

2024 December 31,

2023 January 1,

Balance at beginning of year $ 3,859 $ 59,295 $ 51,843

Increases related to prior year tax positions — — —

Decreases related to prior year tax positions — — —

Decreases related to the Spin-Off

— ( 59,295 ) —

Decreases related to prior year tax positions

Increases related to current year tax positions

3,823 3,859 7,452

Balance at end of year $ 7,636 $ 3,859 $ 59,295

Included in the balance of uncertain tax positions as of December 31, 2024, December 31, 2023 , and January 1, 2023 were $ 3.6 million, $ 54.4 million, and $ 47.6 million, respectively, of net unrecognized tax benefits that, if recognized, would reduce the effective income tax rate in future periods.

Included in the balance of uncertain tax positions as of December 31, 2025, December 31, 2024 , and December 31, 2023 were $ 7.1 million, $ 3.6 million, and $ 54.4 million, of net unrecognized tax benefits that, if recognized, would reduce the effective income tax rate in future periods.

The Company has not recognized any interest or penalties related to uncertain tax positions.

If interest and penalties are recognized in the future, such amounts will be included in the provision for income taxes.

The following table presents the disaggregation of income taxes paid by jurisdiction:

(in thousands) December 31, 2025

Massachusetts

South Carolina

New York City

North Carolina

All Other States

Total taxes paid

Tax years 2019 to 2025 remain subject to future examination by the major tax jurisdictions in which the Company is subject to tax.

It is reasonably possible that the balance of unrecognized tax benefits could change significantly over the next 12 months.

However, due to the number of years remaining that are subject to examination, the Company is unable to estimate a full range of possible adjustments to the balance of unrecognized tax benefits.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION

The Company operates and manages its business as one reportable operating segment which provides multi-cancer early detection testing and services.

The Company operates and manages its business as one reportable operating segment.

The Company's chief operating decision maker (“CODM”) is the chief executive officer.

The chief operating decision maker reviews financial information on an aggregate basis for the purposes of evaluating financial performance and allocating resources based on net income (loss), adjusted gross margin and adjusted EBITDA.

The CODM reviews financial information on an aggregate basis for the purposes of evaluating financial performance and allocating resources based on net income (loss), adjusted gross margin and adjusted EBITDA.

Net income (loss) is the measure of segment profit most consistent with U.S.

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The following table is representative of the significant expense categories regularly provided to the CODM when managing the Company’s single reporting segment.

A reconciliation to the consolidated net loss for the years ended December 31, 2024, December 31, 2023 and January 2, 2023 is included in the table below:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation to the consolidated net loss for the years ended December 31, 2025 , December 31, 2024 and December 31, 2023 is included in the table below:

(in thousands) December 31,

2024 December 31,

2023 January 1,

Screening revenue $

1 unchanged sentence

Total revenue

147,172 125,595 93,105

Costs and operating expenses:

3 unchanged sentences

2,605 6,444 6,861

310,157 311,375 252,838

Compensation 231,188 314,042 311,375

Depreciation and intangible assets amortization expense 149,794

Stock-based compensation 56,021 84,130 95,265

84,130 95,265 75,729

Professional services 36,821 63,443 48,994

63,630 49,151 49,751

Clinical studies 28,012 43,890 54,590

43,890 54,590 63,667

Laboratory supplies and research collaborations

43,205 41,863 39,805

17,748 20,475 22,321

Depreciation and intangible assets amortization expense

Goodwill and intangible assets impairment

28,000 1,420,936 718,466

Cloud computing and information technology 25,019 30,233 31,868

31,778 31,868 28,231

Facilities 21,666

Laboratory supplies and research collaborations 12,802 41,341 41,863

Other segment expenses (3)

44,156 67,799 72,043

Goodwill and intangible assets impairment

1,420,936 718,466 4,700,431

Total costs and operating expenses

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Interest income

28,652 26,733 7,954

Other income (expense), net

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( 2,027,005 )

(1) Other segment expenses includes costs related to contractors and temporary labor, marketing expenses, and legal expenses.

( 1,465,685 )

(1) Cost of screening revenue (exclusive of amortization of intangible assets) and cost of development services revenue include stock-based compensation expense.

See Note 8 — Stock-Based Compensation for further details.

(2) Cost of screening revenue (exclusive of amortization of intangible assets) and cost of development services revenue include $ 6.6 million, $ 4.8 million and $ 9.8 million of depreciation expense for the year ended December 31, 2025, December 31, 2024 and December 31, 2023.

(3) Other segment expenses include costs related to contractors and temporary labor, marketing expenses, and legal expenses .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RELATED PARTY TRANSACTIONS

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between August 19, 2021 to June 23, 2024.

Subsequent to the Spin-Off, Illumina retained a 14.5 % stake in the Company.

As of December 31, 2024, Illumina held a 13.3 % stake in the Company.

Subsequent to the Spin-Off, Illumina retained 4,502,126 shares which represented a 14.5 % stake in the Company as of the Spin-Off.

During the fourth quarter of 2025, Illumina sold 2,000,000 shares of the Company’s common stock, reducing its ownership to 2,502,126 shares, which represented approximately 6.0 % of the Company’s outstanding common stock as of December 31, 2025.

On February 17, 2026, Illumina filed a Schedule 13G reporting beneficial ownership of 1,302,126 shares of our common stock.

As a result of the reduction in ownership, Illumina no longer meets the definition of a related party.

Accordingly, following Illumina’s disposition on November 17, 2025, transactions and balances with Illumina are no longer considered related-party transactions.

Illumina is both a customer of the Company and a major supplier of the Company’s reagents and capital equipment.

Goods and services transactions with Illumina are invoiced and paid when due.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goods and services transactions with Illumina have been reflected in the consolidated financial statements as follows:

As of December 31,

(in thousands) 2024 2023

Goods and services transactions with Illumina, have been reflected in the consolidated financial statements for the periods during which Illumina qualified as a related party of the Company, as follows:

(in thousands) December 31, 2024

Accounts receivable

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Property and equipment, net

Accounts payable

Accrued liabilities

(in thousands) December 31, 2025 (1)

2024 December 31,

2023 January 1,

Screening revenue

$ 208 $ 460 $ 652

Cost of screening revenue

4,617 13,091 8,532

Cost of development services revenue

Operating expenses—Research and development

3,306 18,843 19,508

Operating expenses—General and administrative

On June 21, 2024, the Company entered into a fourth amendment to its Supply and Commercialization Agreement with Illumina.

(1) Included transactions from January 1, 2025 through November 17, 2025

In June 2024, the Company entered into an amendment to its Supply and Commercialization Agreement with Illumina.

Under the terms of the amended agreement, regardless of whether its products incorporate any Illumina technology, the Company has agreed to pay to Illumina a high single-digit royalty, subject to certain reductions, in perpetuity on net sales generated by its products or revenues otherwise generated or received by the Company, subject to certain exceptions, in the field of oncology.

Per the terms of the Separation and Distribution Agreement with Illumina, the royalty arrangement is suspended until the earlier of December 24, 2026 or any earlier change of control of the Company, at which time a high-single digit royalty payments will be payable.

Contributions from Member, Net

The following related party transactions between the Company and Illumina have been included in these consolidated financial statements.

As there was no intercompany loan agreement between Illumina and GRAIL and because these transactions had no history of being settled and were not settled per the terms of the Separation and Distribution Agreement, the total net effect of these transactions are reflected in the consolidated statements of cash flows as cash provided by financing activities and in the consolidated balance sheets as contribution from member, net, in member’s equity.

The following table presents the components of the net transfers to and from Illumina:

(in thousands) December 31,

2024 December 31,

2023 January 1,

Cash funding received from Illumina $ 1,244,300 $ 464,000 $ 609,000

Taxes paid related to net share settlement of equity awards — ( 234 ) ( 4,183 )

Other — — ( 544 )

Total contribution from member, net $ 1,244,300 $ 463,766 $ 604,273

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUBSEQUENT EVENTS

Subsequent to December 31, 2024, the Company granted 2.1 million restricted stock units (RSUs) of Class A common stock to employees.

Subject to continued service, the RSUs will generally vest annually over a service period of 3 to 4 years, and had a fair market value on the grant dates of $ 85.5 million.

2024 Incentive Award Plan

On January 1, 2026, in accordance with the automatic evergreen provision of the 2024 Incentive Award Plan the maximum number of shares that can be issued under the plan was increased to 12,368,055 .

Subsequent to December 31, 2025, the Company granted 1.7 million RSUs of Class A common stock to employees.

The RSUs are subject to continued service, vest annually over a service period 4 years, and had a fair market value on the grant date of $ 88.5 million.

2024 Employee Stock Purchase Plan

On January 1, 2026, in accordance with the automatic evergreen provision of the 2024 Employee Stock Purchase Plan the maximum number of shares that can be issued under the plan was increased to 1,156,269 .

Potential Impairment of Long-Lived Intangible Assets

On February 19, 2026, the Company issued a press release announcing top-line results from its NHS-Galleri trial, showing that, although the primary endpoint of statistically significant Stage 3 and 4 reduction was not observed, adding Galleri to standard of care screening resulted in a substantial reduction in Stage 4 cancer diagnoses, increased Stage 1 and 2 detection of deadly cancers, and four-fold higher cancer detection rate when compared to standard of care alone.

Immediately following the release of this information, the Company’s market capitalization decreased materially.

This decrease in market capitalization represents a possible impairment indicator that could result in an impairment of our long-lived intangible assets, which had a balance of $ 1.9 billion as of December 31, 2025.

As a result, the Company expects to perform an interim impairment test during the first quarter of 2026 as this is the period in which such information was available to management.

The Company has not yet completed this interim impairment test as of the date of this filing.

See Note 2 Summary of Significant Accounting Policies for information about how long-lived intangible assets are tested for impairment.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data