GRAIL, Inc. 10-Q

Item 1A. Risk Factors Our business, financial condition and operating results are affected by a number of factors, whether currently known or unknown, including risks specific to us or the healthcare industry as well as risks that affect businesses in general. In addition to the information set forth in this Form 10-Q, you should consider carefully the factors discussed in Part I, Item 1A. “Risk Factors” in our 2024 Form 10-K. The risks and uncertainties disclosed in such Annual Report and in this Form 10-Q could materially adversely affect our business, financial condition, cash flows or results of operations and thus our stock price. These risk factors may be important to understanding other statements in this Form 10-Q and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-Q. Because of such risk factors, as well as other factors affecting our financial condition and operating results, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods. The Samsung Investment is subject to closing conditions, including conditions beyond our control, and no assurance can be given that closing will take place on the timeline currently anticipated, or at all, or that we will achieve our goals under the definitive agreements to be entered into with Samsung C&T and/or Samsung Electronics. Any failure to close the Samsung Investment or achieve such goals could adversely impact our business, financial conditions, results of operations and liquidity. On October 16, 2025, we entered into a stock purchase agreement (the “Samsung Stock Purchase Agreement”) with Samsung C&T Corporation (“Samsung C&T”), Samsung Electronics Singapore Pte. Ltd. (together with Samsung C&T, the “Samsung Investors”) and Samsung Electronics Co., Ltd. (“Samsung Electronics”), providing for the issuance and sale by us to the Samsung Investors in a private placement of an aggregate of 1,570,308 shares of our common stock, at a purchase price of $70.05 per share, upon the terms and conditions set forth in the Samsung Stock Purchase Agreement (the “Samsung Investment”). The Samsung Investment is subject to the satisfaction of certain closing conditions set forth in the Samsung Stock Purchase Agreement, including, but not limited to: (i) the satisfaction of certain regulatory approvals or clearances, including with respect to the Committee on Foreign Investment in the United States (“CFIUS”); (ii) the execution of a business collaboration agreement between us and Samsung C&T by January 31, 2026 relating to, among other things, Samsung C&T’s exclusive right to commercialize our Galleri test, and obligation not to commercialize any other multi-cancer early detection test, in Korea, the funding of such commercialization by Samsung C&T, a right of first negotiation for commercial rights to Japan and Singapore and commencement conditions with respect to negotiating and implementing a Korea-based laboratory; (iii) the execution of a strategic and operational collaboration agreement between us and Samsung Electronics by January 31, 2026; and (vi) certain other customary closing conditions. The agreements to be entered into in connection with such conditions are subject to the parties negotiating and entering into definitive agreements and the conditions included within the applicable definitive documents. The Samsung Stock Purchase Agreement requires Samsung C&T and us to negotiate the business collaboration agreement in good faith, and requires all parties to use commercially reasonable efforts to enter into the business collaboration agreement and the strategic opportunities collaboration agreement. We may experience delays and difficulties in satisfying the conditions for closing of the Samsung Investment, and no assurance can be given that closing will take place on the timeline currently anticipated or at all. Some of the closing conditions are outside of our control and it is possible that not all of the closing conditions for the Samsung Investment will be satisfied or that we will not receive the expected proceeds on the timeline currently anticipated or at all. For example, the Samsung Investment is subject to, among others, certain regulatory approvals and clearances, including with respect to CFIUS. In addition, certain closing conditions require us, 52 Samsung C&T, and Samsung Electronics to successfully negotiate and enter into definitive agreements. The final terms of all such definitive agreements are not yet established and such negotiation and execution, notwithstanding the term sheet attached to the Samsung Stock Purchase Agreement, may take longer than expected or may not be possible to accomplish on terms acceptable to us, or at all. This risk is higher with respect to terms that are not fully reflected in the term sheet, such as the commencement conditions for negotiation and implementation of a Korea-based laboratory. In addition, even if we are successful in closing the Samsung Investment and in negotiating and executing definitive agreements, no assurance can be given that any agreement we may reach will achieve our goals or be on terms that prove to be economically or strategically beneficial to us. For example, we may not recognize or accomplish our strategic objectives under the business collaboration agreement or strategic and operational collaboration agreement, or may ultimately find ourselves restricted by the terms that we have negotiated under such agreements. Any such adverse developments, including any failure to close the Samsung Investment, could adversely impact our business, financial condition, results of operations and liquidity. Our business and results of operations will suffer if we fail to perform effectively. There are market participants in the cancer detection space both in the United States and abroad, including Exact Sciences Corporation and Guardant Health, Inc., who have each introduced MCED products into the market in 2025. In addition, Adela, Inc., DELFI Diagnostics, Inc., Exai Bio, Inc., Freenome Inc. and Harbinger Health and Natera, Inc. within the United States and AnchorDx, Anpac Bio-Medical Science Co., Ltd., Burning Rock Biotech Limited, Datar Cancer Genetics, Elypta AB, Gene Solutions JSC, Insighta, Singlera Genomics, Inc. and Seekin, Inc. outside of the United States, among others, have stated that they are attempting to develop tests designed to detect certain types of cancer, including some that will use cell free DNA (“cfDNA”) analyses. The precision oncology market includes companies such as Roche/Foundation Medicine, Inc., Natera, Inc., Guardant, Inc., Tempus AI, Inc., Clearnote Health, NeoGenomics Laboratories, Personalis, Inc., Twist Bioscience Corp. and Adaptive Biotechnologies Corp., among others. These companies have or may have greater financial, technical, and other resources, such as larger research and development staff, well-established marketing and sales forces, existing integrated systems connected to health practices’ electronic health or medical records to facilitate product ordering and results delivery, may have different strategies to obtain reimbursement for their products, may deploy more effective sales and marketing campaigns or may operate in jurisdictions where lower standards of evidence are required to bring products to market. These companies may succeed in developing, acquiring, or licensing, on an exclusive basis or otherwise, or providers, payers, patients and other stakeholders may believe that these companies or other new market entrants may have tests or services that are more effective, have higher performance, or are less costly than our products. In addition, established medical technology, biotechnology, or pharmaceutical companies may invest to accelerate discovery and development of tests that could make our products less successful than we anticipate. For example, large and long-tenured healthcare, life sciences, or technology companies may initiate research and development of MCED and bring significant resources and disruption to the cancer detection space. Our ability to perform successfully will depend largely on our ability to: • demonstrate compelling advantages in the performance and convenience of our products, including on a cost efficient basis; • achieve market acceptance of our products by healthcare providers and patients, including through our reputation; • achieve adequate coverage and reimbursement by third-party payors for our products; • differentiate our product from future tests and products of third parties; • attract qualified scientific, data science, clinical development, product development, and commercial personnel; 53 • obtain, maintain, defend, and enforce patent and other proprietary protection as necessary for our products; • obtain and maintain any necessary or desirable marketing authorizations or certifications from regulators in the United States and other jurisdictions, and notified bodies; • integrate product ordering and results delivery into practices’ electronic health or medical records systems; • successfully collaborate with institutions in the discovery, development, and commercialization of our products; and • successfully expand our operations and implement a successful sales and marketing strategy to support commercialization. We may not be able to perform effectively if we are unable to accomplish one or more of these or similar objectives. Our products or future products may not perform as expected, and the results of our clinical studies may not support the launch or use of our products or future products and may not comply with the requirements, or be replicated in later studies or in the post-market or real-world setting, required to support a commercial opportunity or for any necessary or desirable regulatory clearances, approvals, or certifications, or reimbursement or coverage. Our success depends on our ability to provide reliable, high-quality products that perform as indicated in our product labeling, marketing, and advertising material, as well as our ability to complete clinical studies and comply with applicable regulatory requirements that enable us to commercialize our products and future products. Our commercial product, Galleri, which we have launched as a laboratory developed test (“LDT”) in the United States and for which we are pursuing a premarket approval application (“PMA”) with the U.S. Food and Drug Administration (the “FDA”) and our precision oncology portfolio, which we currently offer on a research-use-only basis, and any future products in development, may not perform as expected. Results from our ongoing or future studies, or from the post-market or real-world setting, involving current or future products or our methylation platform may be inconsistent with certain results obtained from our previous studies, or from interim results initially reported on those studies. In addition, results from our ongoing or future studies may not support certain product launch opportunities. GRAIL intends to submit data from the prevalent screening round of the NHS-Galleri Trial as part of its evidence package for FDA premarket approval. The prevalent screening round is the first round of blood draws (of the three total blood draw rounds in the trial) with one year of follow up. The first early analysis was prepared for the NHS to determine whether the results were compelling enough to commence an implementation pilot in England prior to the final trial results. In May 2024, the NHS determined not to initiate the pilot on the basis of those available data and will evaluate the final results from the NHS-Galleri Trial, which are expected to be available in 2026, before determining whether to implement the Galleri test in the NHS. We believe the decision will include considerations such as NHS budget, political priorities, cost-effectiveness and implementation constraints in addition to an evaluation of the final results. We disclosed information regarding the prevalent screening round of the NHS-Galleri Trial. We plan to submit the full prevalent screening round analysis from the NHS-Galleri Trial, together with data from the first approximately 25,000 participants in the PATHFINDER 2 study, and a bridging analysis (comparing and measuring concordance of the version of Galleri used in the NHS-Galleri Trial and PATHFINDER 2 study with the updated version of the Galleri test that we plan to submit to the FDA for premarket approval) as part of our premarket approval application in the first quarter of 2026. Various factors are likely to cause the final results to differ from a review of the first round results only. For example, cancer screening trials designed to show clinical utility are commonly conducted over three years with an annual screening period, because data from the first screening round only can be influenced by the fact that screening detects many prevalent late-stage asymptomatic cancers that have not yet been diagnosed. It is possible that the final results will be unsuitable or unavailable, which could have a significant adverse impact on the success of our commercial efforts for Galleri, our ability to achieve FDA authorization at all or within our anticipated timelines, our brand and reputation, our business, and our growth prospects. Furthermore, other studies have been or may be conducted 54 in populations (such as our SUMMIT study which was conducted in a population of tobacco users) or under other circumstances which make their results more complicated to interpret or result in data that is more difficult to compare. In addition, as Galleri and our research-use-only offering are currently available to customers and others, any analyses or studies, including those conducted by third parties, that use our current or future products, or that examine elements of our methylation platform, may produce results that are inconsistent to evaluate independently or comparatively from our own studies. If any such inconsistent results were to be produced, either before or after launch of a product or future product, our reputation, business, financial condition, results of operations, and growth prospects would suffer. Our products require a number of complex and sophisticated biochemical and bioinformatics processes, which could be adversely impacted by a number of different factors. An operational or technological failure in one of these complex processes or fluctuations in external variables may result in performance characteristics, such as sensitivity or specificity rates, that are lower than we anticipate or that vary between test runs or in a higher than anticipated number of tests that fail to produce results. In addition, we continue to evaluate and refine our algorithms and other processes under development. These refinements may inadvertently result in unanticipated issues that may reduce our performance characteristics, such as sensitivity or specificity rates, or otherwise adversely affect the performance of our tests and their results. Galleri was launched in the United States as an LDT in mid-2021 and an updated commercial version of the Galleri test was launched in December 2024. We plan to complete a PMA submission for a further updated version of our Galleri test, for which we expect we have substantially completed development. We may also be required or decide voluntarily to seek clearance or approval from the FDA for future products or alternative versions of our Galleri test. In 2024, the FDA finalized a regulation pursuant to which LDTs would be subject to the FDA’s medical device requirements through a phase-out of its historical policy of enforcement discretion over LDTs over a period of four years (the “LDT Final Rule”). On March 31, 2025, the United States District Court for the Eastern District of Texas vacated the LDT Final Rule, reasoning that LDTs are not medical devices subject to the Federal Food, Drug, and Cosmetic Act (“FD&C Act”), and remanded the matter to the FDA for further consideration. It remains uncertain what impact this ruling may have on the FDA’s authority to review marketing applications for LDTs or to take enforcement action against LDTs. If the FDA imposes new or different requirements for marketing applications of LDTs to be reviewable in light of the District Court’s decision, LDT manufacturers seeking FDA review may be required to establish that the test is a medical device subject to the FD&C Act, which could involve significant modification to test configurations, processes, or operations. If we could not ultimately obtain marketing authorization for our Galleri test or other tests where required or appropriate, our business would be substantially harmed. It is possible that the District Court’s decision may limit the FDA’s authority to review or approve tests that are in the process of pursuing marketing authorization, or that we may need to perform additional activities to support FDA review of our products as a result of this ruling. Moreover, the FDA, other regulators, and notified bodies may require that we generate additional clinical data to support any clearance, approval, or certification we may seek, which could result in delays, increased costs, or other limitations or negative impacts on our ability to receive such clearance, approval, or certification, if at all, including narrowed indication or labeling than expected or desired. For additional information, see “-Risks Relating to Regulation and Legal Compliance-The regulatory clearance, approval, or certification processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming, and unpredictable. If we are ultimately unable to obtain any necessary or desirable regulatory approvals, clearances, or certifications, or if such approvals, clearances, or certifications are significantly delayed, our business will be substantially harmed.” in our 2024 Form 10-K. Further, we plan to improve our products to enhance performance, offerings, scalability, and/or cost of sales. However, we may not be successful in transitioning our products to a new or enhanced version or iteration. Product development involves a lengthy and complex process and we may be unable to commercialize, validate, or improve performance of any of our products on a timely basis, or at all. For example, to the extent an enhanced, modified or updated version of an existing product is developed, we may be required to conduct a non-inferiority study or bridging analysis involving such version as compared to the relevant then-current version of the test using data (for example, clinical data and/or real world evidence data obtained through Galleri’s commercial use as an LDT), or could be required to undertake other regulatory requirements if the enhanced, modified or updated version is not considered similar enough to the then- current version to conduct a non-inferiority study. With respect to Galleri, we intend to conduct one or more bridging studies to measure and evaluate concordance, 55 performance and safety of the subsequent, updated version of Galleri (for which we plan to submit our PMA) as compared to the version of Galleri used in our registrational trials. We plan to conduct any such bridging studies using previously collected clinical study data and other samples. Any such bridging study will need to be agreed upon with regulatory authorities and may be unsuccessful or insufficient to support approval. If unsuccessful or insufficient, we would be required to revert to a prior version of the test and forgo, or be delayed in, implementing any perceived or potential updates, including enhancements, or further enhance, modify or update to a new version of the test and run additional bridging studies. Reverting to a prior version of the test or running additional bridging studies may cause delays in our PMA submission timeline. Additionally, planned improvements to our products may cause unintentional technical, logistical or other issues. In late 2024, we began use of an updated commercial version of Galleri in commercial channels. This version incorporates an industrial scale platform with significant automation and is intended to enable us to scale more efficiently with future demand. In connection with implementation of this new version of Galleri, we have experienced and may continue to experience increased turnaround times, re-processing costs and sample failures. We continually monitor and evaluate laboratory operations and performance in an effort to achieve our intended sample processing metrics and costs; however from time to time, processing issues may arise that could impact our operations. We also expect that we have substantially completed development of the Galleri test version on a similar industrial scale platform that we will submit for PMA review. If we are unable to adequately prevent these issues from occurring, or to adequately identify and remedy these issues, we may experience reputational harm, lose customers and revenue, need to offer discounts, require additional expenditures, delay our PMA application, or suffer other negative consequences. Our failure to successfully develop new and/or improved products (including new versions of existing products) on a timely basis could have a material adverse effect on our results of operations and business. Data from our clinical trials that we announce or publish from time to time before our trials are complete may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. From time to time, we may publicly disclose preliminary or topline data from our clinical studies, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the topline or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Topline and preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the topline or preliminary data we previously published. As a result, topline and preliminary data should be viewed with caution until the final data are available. Audits, internal or external, including by the FDA’s Bioresearch Monitoring (“BIMO”) program, of our studies or associated data, can require substantial amounts of time, personnel, and other resources to comply with, and may not be anticipated. From time to time, we may also disclose interim data from our clinical studies. Interim data from these studies that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as subject enrollment continues and more data become available. Adverse differences between interim data and top-line, preliminary, or final data could significantly harm our business prospects. Further, disclosure of interim data by us or by third parties could result in volatility in the price of our common stock. In particular, in the United Kingdom, we are working with NHS England to complete our NHS-Galleri Trial. In May 2024, the NHS determined, based on data from an early analysis of Galleri test performance results in the intervention arm from the prevalent screening round of the NHS-Galleri Trial, not to initiate an implementation pilot in England prior to the final trial results. We submitted to NHS England and plan to submit to the FDA information from the prevalent screening round. Various factors are likely to cause the final results to differ from the prevalent screening round results. Further, it is possible that the early preliminary, interim or final data may not be as we expect, may be inconsistent with prior NHS-Galleri Trial data, or with other studies we have conducted, or may be unsuitable to the NHS or the FDA. Similarly, in October 2025, performance and safety results from the first approximately 25,000 participants of the PATHFINDER 2 study were presented at the European Society of Medical Oncology (“ESMO”) Congress 2025. PATHFINDER 2 was initiated in 2021 to evaluate the safety and performance of the Galleri test when added to standard of care single cancer screening in 35,878 adults aged 50 56 years and older with no clinical suspicion of cancer. As a result, not all data from our PATHFINDER 2 study has been reported, and as we continue to follow up the remaining approximately 10,000 participants in the study, we may find results that are not what we expect or that may be inconsistent with data previously presented. While we are not intending to include data from these 10,000 patients in our planned PMA submission, these data will be an important part of our future submission to, and communications with, the FDA to support our PMA. Any unexpected, unsuitable, or inconsistent results could have a significant adverse impact on the success of our commercial efforts for Galleri, our ability to achieve FDA authorization at all or within our anticipated timelines, our ability to achieve CMS or private payor reimbursement or coverage, our brand and reputation, our business, and our growth prospects. Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, and our ability to receive regulatory clearance or approval or commercialize a particular product and our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical study is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding our business. If the data that we report differ from final results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to commercialize or obtain regulatory clearance or approval for our products may be harmed, which could harm our reputation, business, operating results, prospects or financial condition. We face risks associated with tariffs and other trade and global macroeconomic restrictions, which may have a material adverse impact on our results of operations and financial condition. Our business is subject to risks associated with conducting business internationally. For example, some parties with whom we have collaborative relationships are located outside the United States, including in the United Kingdom and Israel. Additionally, while a significant majority of our supplier spend is with vendors located within the United States, whose products are produced in the United States, we also rely on suppliers and vendors located outside of the United States or who produce the products that we use outside the United States, including in China, Mexico, South Africa and various European Union member states. We expect to continue to increase our international presence over time, which could increase these risks or introduce new risks. Accordingly, our future results could be harmed by a variety of factors, including: • economic weakness, including inflation, or political instability, in particular non-U.S. economies and markets; • challenges enforcing our contractual and intellectual property rights, especially in those foreign jurisdictions that do not respect and protect intellectual property rights to the same extent as the United States; • trade protection measures, import or export controls and licensing requirements (including possible restrictions on licensing intellectual property to certain non-U.S. persons) or other restrictive actions by U.S. or non-U.S. governments; • changes in non-U.S. laws, regulations and customs, tariffs, and trade barriers; • changes in non-U.S. laws, regulations, and policies related to data privacy, data protection, and cybersecurity in the transfer or transmittal of data across boundaries and geographies; • exchange rate risk we may face from denominating a portion of our transactions in currencies other than the U.S. dollar; • changes in a specific country’s or region’s political or economic environment; • negative consequences from changes in tax laws; 57 • negative consequences from changes in U.S. national security laws, including those governing non-U.S. investors’ ownership of U.S. biotech and other technology companies and U.S. companies’ ability to enter into joint ventures with non-U.S. entities; • compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad, or for non-U.S. employees in the United States; • workforce uncertainty in countries where labor unrest is more common than in the United States; • difficulties associated with staffing and managing international operations, including differing labor relations; • potential liability under the Foreign Corrupt Practices Act (“FCPA”) or comparable foreign laws; and • business interruptions resulting from geopolitical actions, including war and terrorism, such as recent conflicts in the Middle East, pandemics, or natural disasters more common in certain regions, including earthquakes, typhoons, floods, and fires; and • negative consequences to our relationships with our customers, partners, and other collaborators in the event of impact to suppliers or our business internationally due to restrictive actions by U.S. or non-U.S. governments or changes in U.S. or non-U.S. laws. In addition, in recent years, U.S. administrations have publicly supported potential trade proposals that may affect U.S. trade relations with other countries. It is unclear at this point how, if at all, such actions or other potential actions, including under the most recent U.S. Presidential administration, may impact our business or operations, and the uncertainty surrounding these matters might create difficulties in our efforts to partner with certain healthcare providers, suppliers, and insurance carriers. For example, the United States has maintained elevated tariffs and targeted trade measures on imports from China and has signaled continued use of reciprocal and sector-specific actions that could expand or shift over time. Enforcement focused on Chinese supply chains—such as tighter anti-transshipment scrutiny and product-specific actions—has increased compliance complexity and could disrupt sourcing, raise input costs, and constrain pricing or margins. Similar policies may be applied or adjusted with respect to other countries, and ongoing policy changes or legal challenges could lead to further volatility in rates, coverage, and enforcement. Such actions could increase our expenses, reduce our margins or increase our prices, make it difficult to obtain inputs we need for our products or have a material adverse effect on the broader economy. These risks and impacts may be exacerbated by additional tariffs in the United States or retaliatory tariffs imposed by other governments. Our success depends in part on our ability to attract and retain the best available personnel with the necessary qualifications, which in a competitive global market means that our recruitment efforts should not be limited entirely to the United States. To the extent U.S. immigration-related policies, laws, rules, proclamations or orders restrict our ability to attract, or increase the cost of attracting, international talent, this could adversely impact our business and results of operations. For example, the current U.S. administration's decision, announced September 19, 2025, that, subject to limited exceptions, petitions for H-1B visas should be approved only if they are accompanied by a payment of $100,000, could hamper our recruitment efforts for any new personnel who require such a visa. Additional changes in U.S. immigration policies, rules, laws or orders could further increase our recruitment costs or delay key projects that require specialized expertise. In addition, restrictions or delays in the issuance of other visas or in immigration processing could adversely affect our ability to collaborate effectively with our employees outside the United States and to retain the qualified personnel needed for our operations. Moreover, future operational expansion into other geographies will subject us to additional political and regulatory regimes that will require us to invest further in compliance efforts and may result in additional risks, including, among others, exposure to various and potentially conflicting regulations, international sanctions and compliance rules, country-specific requirements for testing, approval, and processing of patient information and biological samples, as well as the risks associated with political and macroeconomic climates in any such geographies. For example, the potential commercialization of Galleri with the NHS, subject to the results of the NHS-Galleri Trial, may be delayed or otherwise impacted if there is a change in the government in the United 58 Kingdom. These and other risks associated with our planned international operations may materially and adversely affect our business, costs and growth prospects. We also face risks from our international operations for Galleri, our precision oncology portfolio and other products we may develop. Our clinical trials to date have been conducted in the United States and the United Kingdom, and use of our tests in populations outside of these regions could result in differences in performance. Any performance differences experienced in screening populations outside of the United States or United Kingdom could result in customer dissatisfaction, reputational harm, real world data or adverse events that would be reportable to the FDA or other regulators, regulatory actions by regulators in international jurisdictions and other risks, all of which could have a material and adverse impact on our business, regulatory pathway, results of operations and growth prospects. Our ability to successfully and efficiently conduct any required in-country studies in other countries or regions in which we seek to expand may also be impacted, or may be impossible, due to the regulatory requirements of such countries. Some countries may require that we carry out testing of our products or future products through government partnerships, which may be difficult to navigate or which may limit our ability to deliver the results we intend. Moreover, the demographics in other countries or regions may differ vastly, such that study results may not appear as successful, due to, for example, a lower incidence of cancer in the local population. Such outcomes may adversely impact demand for our products in other countries. Finally, our ability to expand internationally may be limited by the availability of international laboratory space or requirements that will permit us to store, collect, and analyze biological samples required for current or future products, including space that could be made available through potential partners in such countries or regions. These and other unknown risks make it difficult for us to assess the potential success of our international expansion and the costs associated therewith. For additional information, see “—Risks Relating to Regulation and Legal Compliance.” Changes in funding, leadership, resources or prioritization, or other disruptions, in the U.S. or international government, including at the FDA, other government agencies, and notified bodies, could hinder our ability to develop, approve, certify, commercialize or receive reimbursement for our test. Our ability to develop, approve, certify, commercialize or receive reimbursement for our test depends on interactions with, decisions of and approvals and payments by the U.S. and other governments. The ability of the FDA, foreign regulatory agencies, and notified bodies to review and clear, approve, or certify new products or changes to existing products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s, foreign regulatory agencies’, and notified bodies’ ability to hire and retain key personnel and accept the payment of user fees, government shutdowns, and other events that may otherwise affect the FDA’s, foreign regulatory agencies’ and notified bodies’ ability to perform routine functions. For example, in January 2025, federal employees were offered the option to make a deferred resignation and in April 2025 approximately 3,500 FDA staff positions were eliminated. These reductions in staff, and any future reductions, impact the workforce and resources of the FDA available to review products such as ours. Average review times at the FDA, foreign regulatory agencies, and notified bodies have fluctuated in recent years as a result of these factors. Disruptions at the FDA, other agencies, and notified bodies may also slow the time necessary for new medical devices or modifications to cleared, approved, or certified medical devices to be reviewed and/or approved, or certified by necessary government agencies or notified bodies, which would adversely affect our business. For example, in recent years, the U.S. government has shut down several times, including an extended shutdown beginning on October 1, 2025. These shutdowns could have a broad range of negative effects on our business. For example, certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. We also receive certain government reimbursement payments for tests provided to patients in our REACH clinical trial, and these payments may be delayed or not provided if the government remains shutdown, or they are not budgeted for as part of any continuing resolution. In the future, this risk could be amplified as we continue to seek, and hope to achieve, additional government reimbursement for our test. Additionally, the government shutdown may occupy the attention of legislators or provide a difficult political environment for other legislative agenda topics, which could prevent or delay passage of legislation we support, such as the proposed legislation to enable coverage of FDA-approved MCED tests by Medicare. If a prolonged government shutdown occurs, or occurs again in the future, we could suffer any of these negative effects, or others, any of which could have a material adverse effect on our business. 59 In addition, global health crises have impacted the ability of the FDA, foreign regulatory agencies, and notified bodies to perform their regular activities. For example, during the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points and the FDA has had to manage submission review times. Significant impact on the ability of the FDA, other regulatory authorities, or notified bodies to timely review and process our regulatory submissions, could have a material adverse effect on our business. In the EU, for example, notified bodies must be officially designated to certify products and services in accordance with the EU IVDR. Their designation process, which is significantly stricter under the new Regulation, has experienced considerable delays due to the COVID-19 pandemic. Despite a recent increase in designations, the current number of notified bodies designated under the new Regulation remains significantly lower than the number of notified bodies designated under the previous regime. The current designated notified bodies are therefore facing a backlog of requests as a consequence of which review times have lengthened. This has been one of the reasons for the recent extension of the transitional provisions under the EU IVDR. Despite these recent developments, the way we are conducting or intend to conduct our business in the EU and the EEA and the ability of the applicable notified body to timely review and process our regulatory submissions and perform its audits may still be impacted, and our ability to commercially launch Galleri in the EU and EEA could be delayed. We have launched Galleri as an LDT in the United States. In 2024, the FDA finalized a regulation that has been successfully challenged in federal court, pursuant to which the FDA planned to subject LDTs to medical device requirements through a phase-out of its historical policy of enforcement discretion over LDTs over a period of four years. A federal court recently vacated this rule. While we plan to complete our PMA submission seeking regulatory approval from the FDA for Galleri, we launched Galleri in the United States as an LDT. LDTs are in vitro diagnostic (“IVD”) tests that are intended for clinical use and are designed, manufactured, and used within a single laboratory certified for high complexity testing under CLIA. The FDA has historically exercised enforcement discretion and has not enforced certain otherwise applicable FDA requirements, including premarket review, with respect to LDTs, with certain exceptions such as in the case of tests for public health emergencies, where the tests are available directly to the consumer, where the tests represented a significant public health concern, or where the FDA has concerns that a company’s performance claims related to its tests are not sufficiently validated by clinical data. Even under that enforcement discretion policy, the FDA has issued warning letters to and safety communications about IVD device manufacturers for commercializing laboratory tests that were purported to be LDTs but that the FDA alleged failed to meet the definition of an LDT or otherwise were not subject to the FDA’s enforcement discretion policy. Even for those LDTs that were subject to the historical enforcement discretion policy, the FDA for a number of years stated its intention to modify this policy and impose applicable medical device requirements to LDTs more broadly. To this end, on May 6, 2024, the FDA issued the LDT Final Rule in an effort to clarify the FDA’s historical view that LDTs are medical devices subject to the requirements applicable to other IVDs, and to phase out its enforcement discretion policy over a period of four years from issuance of the LDT Final Rule. However, on March 31, 2025, the United States District Court for the Eastern District of Texas vacated the LDT Final Rule, reasoning that LDTs are not medical devices, and remanded the matter to the FDA for further consideration (the “LDT Final Rule Decision”). The decision was not appealed. Further, if the FDA is unable to review LDTs, we may be required to make changes to our PMA application, our laboratory testing or other elements of our test platform, or otherwise take actions to allow the FDA to treat Galleri or future tests as medical devices, notwithstanding the LDT Final Rule Decision. These changes could require us to change the PMA application we have begun, which could delay our PMA application or any potential approval, require additional expenditures, require additional development and validation on the changes we may decide to make and could subject us to additional regulation by the FDA. If we are not able to manage these risks and changes, there could be a material adverse effect on our business and operations. In addition, further efforts by the FDA or Congress to impose more regulation on LDTs could create a negative public perception about the validity, safety, effectiveness, or performance of LDTs, including our products, that could adversely affect patient, provider, and customer perception about, and confidence in, our products. 60 Moreover, the FDA may assert that we are improperly marketing our tests, including Galleri, as LDTs and may assert we do not comply with applicable medical device requirements, and in such cases may take enforcement action against us and/or require us to seek premarket review and obtain marketing authorizations, which may require that we cease marketing any LDT products until such marketing authorizations are obtained or the relevant applications are submitted. There can be no assurance that we will be able to obtain any required marketing authorization for our tests or that any labeling claims will be consistent with the claims we have made or intend to make for such products when launched as LDTs, or that such claims would be adequate to support continued adoption of and reimbursement for our products. In the event we are required to seek FDA marketing authorization for any current or planned products, the FDA may request that we provide additional analyses and information beyond that which we intend to produce based on the designs of our current and planned clinical studies, or that we modify or narrow our intended use or product claims. It is possible that the FDA, among other things, could disagree with our interpretation of data we have relied on to support our LDT launches for our intended uses. If we are required to provide additional analyses or additional data or perform additional clinical studies beyond those we currently contemplate to support the intended uses of our products or future products, our planned commercial launches may be delayed and we may be required to cease commercialization of any products we currently market as LDTs. A delay in the launch of our products or new versions of existing products, or significantly narrowing their intended uses, could negatively impact our financial condition and results of operations. In addition, Congress has, for over the past decade, considered a number of proposals, which if enacted, would subject LDTs to additional regulatory requirements. For example, in recent years, Congress has worked on legislation to create a novel regulatory framework governing a new category of FDA-regulated products, referred to as in vitro clinical tests (“IVCTs”), which would govern LDTs and would be separate and distinct from the existing medical device regulatory framework. For example, most recently, in March 2023, the Verifying Accurate Leading-edge IVCT Development Act of 2023 (the “VALID Act”) was introduced. The bill would have established a risk-based approach to imposing requirements related to premarket review, quality systems, and labeling requirements on all IVCTs, including LDTs, but would grandfather certain LDTs marketed before the effective date of the bill and exempt them from certain requirements. It is unclear whether legislative proposals such as the VALID Act (including any proposals that would, in contrast, reduce FDA oversight of LDTs) will be introduced or passed by Congress or signed into law by the President. Depending on the approach adopted under any potential legislation or regulation, certain LDTs (likely those of higher risk) may be required to undergo some form of premarket review, potentially with a transition period for compliance and a grandfathering provision. Any such legislation could substantially alter our commercial offering and marketing of LDTs and negatively impact our financial condition and results of operations. Additionally, as a result of the District Court decision the regulatory environment around LDTs could be significantly relaxed, which could increase competition and reduce the effectiveness of our regulatory and reimbursement strategy. If the FDA does not have authority to regulate LDTs as medical devices, there could be significant impacts to us and our industry, and our ability to compete could be impaired. We have invested significantly in pursuing a PMA for Galleri, including conducting our NHS-Galleri Trial and PATHFINDER 2 study to support our PMA. We believe PMA approval for Galleri, if obtained, could bolster our position in the MCED market, and increase or accelerate provider and patient adoption, commercial and government reimbursement and coverage, and international opportunities. In the event the FDA is not able to exercise its medical device authority with respect to LDTs, our competitors or potential competitors in the MCED market may face less stringent regulatory requirements to enter the market or to continue to market their tests and we may face increased competition in our industry, and adapting to the new regulatory and competitive environment could be difficult, costly and time-consuming. If we are not able to adapt to the changed regulatory environment and increased competition, our business and prospects could be materially impacted. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds None. 61 Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures Not applicable.