Personalis, Inc. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our chief executive officer, or CEO, and chief financial officer, or CFO, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or Exchange Act), as of the end of the period covered by this Annual Report on Form 10-K. Based on that evaluation, our CEO and CFO have concluded that as of December 31, 2020, our disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures. Management Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the 1934 Act. Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2020 based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of December 31, 2020, our internal control over financial reporting was effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. Our independent registered accounting firm is not required to issue an attestation report on our internal control over financial reporting for so long as we qualify as an “emerging growth company,” as defined under the JOBS Act. Changes in Internal Control None. Limitations on Controls Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives as specified above. Management does not expect, however, that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. Item 9B. Other Information. None. 97 PART III Item 10. Directors, Executive Officers and Corporate Governance. The information required by this Item is set forth under the headings “Executive Officers,” “Security Ownership of Certain Beneficial Owners and Management,” “Delinquent Section 16(a) Reports,” “Corporate Governance and Board of Directors Matters,” and “Proposal No. 1 Election of Directors—Information About Our Continuing Directors” in the Company’s 2021 Proxy Statement to be filed with the SEC within 120 days after December 31, 2020 in connection with the solicitation of proxies for the Company’s 2021 annual meeting of stockholders, and is incorporated herein by reference. Our board of directors has adopted a Code of Business Conduct and Ethics applicable to all officers, directors and employees, which is available on our website (investors.personalis.com) under "Corporate Governance." We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Business Conduct and Ethics by posting such information on the website address and location specified above. Item 11. Executive Compensation. The information required by this Item is set forth under the headings “Director Compensation,” “Executive Compensation,” and “Compensation Committee Interlocks and Insider Participation” in the Company’s 2021 Proxy Statement to be filed with the SEC within 120 days after December 31, 2020, and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this Item is set forth under the headings “Equity Compensation Plans at December 31, 2020” and “Security Ownership of Certain Beneficial Owners and Management” in the Company’s 2021 Proxy Statement to be filed with the SEC within 120 days after December 31, 2020, and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this Item is set forth under the headings “Corporate Governance and Board of Directors Matters” and “Transactions with Related Persons and Indemnification” in the Company’s 2021 Proxy Statement to be filed with the SEC within 120 days after December 31, 2020, and is incorporated herein by reference. Item 14. Principal Accounting Fees and Services. The information required by this Item is set forth under the headings “Principal Accountant Fees and Services” and “Pre-Approval Procedures” under the proposal “Ratification of Selection of Independent Registered Public Accounting Firm” in the Company’s 2021 Proxy Statement to be filed with the SEC within 120 days after December 31, 2020, and is incorporated herein by reference. 98 PART IV Item 15. Exhibits, Financial Statement Schedules. (a) Financial Statements and Schedules The financial statements are set forth under Item 8 of this Form 10-K, as indexed below. Financial statement schedules have been omitted since they either are not required, not applicable, or the information is otherwise included. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Consolidated Balance Sheets 72 Consolidated Statements of Operations 73 Consolidated Statements of Comprehensive Loss 74 Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) 75 Consolidated Statements of Cash Flows 76 Notes to Consolidated Financial Statements 77 Report of Independent Registered Public Accounting Firm 96 99 (b) Exhibits Incorporated by Reference Exhibit Number Description Form File No. Exhibit Filing Date 3.1 Amended and Restated Certificate of Incorporation of the Registrant. 8-K 001-38943 3.1 6/24/2019 3.2 Amended and Restated Bylaws of the Registrant. 8-K 001-38943 3.2 6/24/2019 4.1 Description of Securities of Personalis, Inc. 4.2 Form of Common Stock Certificate of the Registrant. S-1/A 333-231703 4.1 6/7/2019 4.3 Amended and Restated Investor Rights Agreement by and among the Registrant and certain of its stockholders, dated December 16, 2014 . S-1 333-231703 4.2 5/23/2019 10.1# Personalis, Inc. 2011 Equity Incentive Plan, as amended, and forms of agreements thereunder. S-1 333-231703 10.1 5/23/2019 10.2# Personalis, Inc. 2019 Equity Incentive Plan and forms of agreements thereunder. S-1/A 333-231703 10.2 6/7/2019 10.3# Personalis, Inc. 2019 Employee Stock Purchase Plan. S-1/A 333-231703 10.3 6/7/2019 10.4# Form of Indemnification Agreement entered into by and between the Registrant and each director and executive officer. S-1/A 333-231703 10.4 6/7/2019 10.5# Employment Terms Letter, by and between John West and the Registrant, dated June 2, 2019. S-1/A 333-231703 10.5 6/7/2019 10.6# Employment Terms Letter, by and between Dr. Richard Chen and the Registrant, dated June 2, 2019. S-1/A 333-231703 10.7 6/7/2019 10.7# Employment Terms Letter, by and between Aaron Tachibana and the Registrant, dated June 2, 2019. S-1/A 333-231703 10.8 6/7/2019 10.8 Lease, by and between MENLO PREHC I, LLC, MENLO PREPI I, LLC, TPI INVESTORS 9, LLC and the Registrant, dated February 2, 2015. S-1 333-231703 10.9 5/23/2019 10.9¥ Contract No. VA240-17-D-0103, by and between the U.S. Department of Veterans Affairs and the Registrant, dated September 28, 2017. S-1 333-231703 10.10 5/23/2019 10.10¥ Master Services Subcontract Agreement, by and between Illumina, Inc. and the Registrant, dated November 1, 2017 . S-1 333-231703 10.13 5/23/2019 10.11¥ Quotation for Supply of Genetic Analysis Products No. 4192031, by and between Illumina, Inc. and the Registrant, dated March 1, 2019. S-1 333-231703 10.17 5/23/2019 10.12¥ Purchase Order No. P11405, by and between Illumina, Inc. and the Registrant, dated March 20, 2019. S-1 333-231703 10.18 5/23/2019 10.13¥ Pricing Agreement, by and between Illumina, Inc. and the Registrant, dated March 26, 2019. S-1 333-231703 10.19 5/23/2019 10.14 First Amendment to Lease, by and between MENLO PREPI I, LLC and TPI INVESTORS 9, LLC and the Registrant, dated April 8, 2020. 10-Q 001-38943 10.1 8/6/2020 10.15# Amendment to Employment Terms Letter, by and between John West and the Registrant, dated May 6, 2020. 10-Q 001-38943 10.1 5/7/2020 10.16# Personalis, Inc. 2020 Inducement Plan and forms of agreements thereunder. S-8 333-238080 99.1 5/7/2020 10.17# Personalis, Inc. N on-Employee Director Compensation Policy . 21.1 Subsidiaries of the Registrant as of December 31, 2020. 23.1 Consent of Independent Registered Public Accounting Firm. 24.1 Power of Attorney (included on the Signatures page of this Annual Report on Form 10-K). 31.1 Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1† Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2† Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 100 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document # Indicates management contract or compensatory plan or arrangement. † The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Annual Report on Form 10-K are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing. ¥ Portions of this exhibit (indicated by asterisks) have been omitted as the Registrant has determined that (i) the omitted information is not material and (ii) the omitted information would likely cause competitive harm to the Registrant if publicly disclosed. Item 16. Form 10-K Summary None. 101 SIGNAT URES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized . Date: February 25, 2021 Personalis, Inc. By: /s/ Aaron Tachibana Aaron Tachibana Chief Financial Officer (Principal Financial and Accounting Officer) POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John West and Aaron Tachibana, jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: Name and Signature Title Date /s/ John West President, Chief Executive Officer and Director February 25, 2021 John West (Principal Executive Officer) /s/ Aaron Tachibana Chief Financial Officer February 25, 2021 Aaron Tachibana (Principal Financial and Accounting Officer) /s/ Patrick Balthrop Director February 25, 2021 Patrick Balthrop /s/ A. Blaine Bowman Director February 25, 2021 A. Blaine Bowman /s/ Alan Colowick Director February 25, 2021 Alan Colowick, M.D. /s/ Karin Eastham Director February 25, 2021 Karin Eastham /s/ Kenneth Ludlum Director February 25, 2021 Kenneth Ludlum /s/ Jonathan MacQuitty Director February 25, 2021 Jonathan MacQuitty, Ph.D. /s/ Paul Ricci Director February 25, 2021 Paul Ricci 102