SCHEDULE: Tempus AI Increases Personalis Stake, Eases Standstill

Tempus AI, Inc. has increased its beneficial ownership in Personalis, Inc. to 14.3% and amended their commercial agreement to allow for further open market share purchases up to 19.99%.

Summary

• Tempus AI, Inc. and its controlling stockholder, Eric Lefkofsky, reported beneficial ownership of 14.3% and 14.5% respectively, of Personalis, Inc.'s common stock.
• On August 16, 2024, Tempus exercised warrants to acquire 9,218,800 shares for $18,437,600 and purchased an additional 3,500,000 shares for $5.07 per share, totaling 12,718,800 shares.
• The funding for these acquisitions came from Tempus's working capital.
• On September 11, 2025, Personalis and Tempus amended their Commercialization and Reference Laboratory Agreement to modify the existing standstill provision.
• The amendment now permits Tempus to acquire additional shares of Personalis common stock through open market purchases, provided its beneficial ownership does not exceed 19.99% of the outstanding common stock and Tempus is not in breach of other standstill terms.

Sentiment

Score: 7

Explanation: The filing indicates a deepening strategic relationship and continued investment from a key partner, Tempus AI, which is generally positive. The amendment to the standstill agreement allows for further open market purchases, signaling potential future commitment, though the 19.99% cap limits immediate control aspirations. The capital infusion from warrant exercise and share purchase is also a positive for Personalis.

Positives

• Tempus AI's increased investment demonstrates continued commitment to the commercialization partnership with Personalis.
• The exercise of warrants and direct share purchase provided Personalis with $18,437,600 in capital from warrant exercise and additional funds from the share purchase.
• The amendment to the standstill agreement allows Tempus greater flexibility to increase its stake, potentially signaling long-term strategic alignment.

Negatives

• The 19.99% beneficial ownership cap for open market purchases indicates a clear limit on Tempus's immediate control aspirations, preventing a full takeover without further negotiation.
• The standstill agreement, even with the amendment, still restricts Tempus from certain actions like seeking board control or forming a group, limiting its influence despite increased ownership.

Risks

• The standstill agreement, while amended, still imposes restrictions on Tempus's ability to influence Personalis's corporate governance or strategic direction beyond its current ownership stake.
• Future open market purchases by Tempus could create upward pressure on Personalis's stock price, potentially making future acquisitions more expensive for other parties or Tempus itself.
• The 19.99% cap could be seen as a ceiling for Tempus's investment, potentially limiting the perceived upside of a full acquisition by Tempus in the near term.

Future Outlook

Tempus AI is now permitted to acquire additional shares of Personalis, Inc. common stock through open market purchases, provided its beneficial ownership does not exceed 19.99% of the outstanding common stock. This indicates a potential for Tempus to further increase its stake in Personalis, Inc. within the defined limits of the amended standstill agreement, which remains in effect until at least June 4, 2027.

Management Comments

• Tempus AI, Inc. and Personalis, Inc. entered into Amendment No. 5 to the Commercialization and Reference Laboratory Agreement to amend the existing standstill provision.

Industry Context

This filing highlights a strategic investment and partnership evolution within the precision oncology and genomics sector. Tempus AI, a leader in AI-powered precision medicine, is deepening its ties with Personalis, a company focused on advanced genomic sequencing. Such collaborations are increasingly common as larger healthcare technology firms seek to integrate specialized diagnostic capabilities, potentially leading to more comprehensive patient solutions and market consolidation.

Comparison to Industry Standards

• While specific comparable companies or projects are not detailed in the filing, strategic investments and commercial agreements between diagnostic companies and AI/data analytics firms are a growing trend in the precision medicine industry.
• The 19.99% ownership cap is a common threshold used to avoid triggering certain accounting treatments (like equity method accounting) or regulatory requirements that apply at 20% or 25% ownership, suggesting a strategic intent to maintain influence without full control or consolidation.

Corporate Governance

Related Party Transactions

• The exercise of warrants and purchase of shares by Tempus AI, Inc. from Personalis, Inc. are transactions between related parties, given their existing Commercialization and Reference Laboratory Agreement and Tempus's significant ownership stake.
• The amendment to the Commercialization and Reference Laboratory Agreement itself is a related party transaction, modifying the terms of their ongoing business relationship.

Stakeholder Impact

• Shareholders: Increased ownership by a strategic partner (Tempus AI) could be viewed positively, signaling confidence. The ability for Tempus to buy more shares in the open market could provide some support for the stock price, but the 19.99% cap might limit expectations for a full takeover premium in the short term.
• Personalis, Inc. (Company): Received capital from the warrant exercise and share purchase. The deepened relationship with Tempus AI could strengthen its commercialization efforts and strategic direction.
• Tempus AI, Inc.: Gains increased ownership and flexibility to further invest in Personalis, aligning its financial interest more closely with the success of the commercial partnership.

Next Steps

• Tempus AI, Inc. may acquire additional shares of Personalis, Inc. common stock through open market purchases, up to a beneficial ownership limit of 19.99%.
• The Commercialization and Reference Laboratory Agreement, as amended, will continue to govern the partnership between Personalis and Tempus.

Key Dates

Recommendation

The filing indicates a strengthening strategic partnership and a significant capital infusion for Personalis from Tempus AI. The amendment allowing Tempus to increase its stake up to 19.99% in the open market suggests continued confidence and potential for further alignment. However, the explicit 19.99% cap on beneficial ownership, coupled with the ongoing standstill restrictions, implies that Tempus is not pursuing a full acquisition or control in the immediate future. This limits the potential for a near-term takeover premium. For existing shareholders, holding seems appropriate given the positive signals of partnership and investment, but new investors might wait for clearer indications of Personalis's independent growth trajectory or a change in Tempus's strategic intent regarding full control.

Keywords

Personalis Inc, Tempus AI Inc, Schedule 13D, Common Stock, Beneficial Ownership, Standstill Agreement, Warrant Exercise, Share Purchase, Commercialization Agreement, Biotechnology, Genomics, Healthcare Technology