Personalis Inc

Note 11. Contingencies

In June 2024, the Company and Foresight Diagnostics Inc. ("Foresight") entered into a Settlement and License Agreement (the "S&L Agreement") to settle litigation related to alleged patent infringement by Foresight. The Company filed complaints against Foresight—one in August 2022 and a second in June 2023—for infringement of certain of the Company's patents relating to detection of MRD. Foresight filed counterclaims and alleged that its solid tumor recurrence test does not infringe the Company's patents and invalidated two of the Company's patents, and sought to invalidate certain of the Company's other patents, through inter partes review proceedings with the U.S. Patent Trial and Appeal Board ("PTAB"). Pursuant to the S&L Agreement, Foresight and the Company agreed to dismiss the pending claims of infringement and related defenses and counterclaims, and to end the remaining inter partes review proceedings.

Under the S&L Agreement, the Company granted Foresight a non-exclusive, worldwide license under certain patents of the Company to develop, manufacture, commercialize and otherwise exploit products and services that use whole genome sequencing and a variable content minimal/molecular residual disease panel that utilizes phased variants in consideration for which Foresight agreed to pay the Company a low single-digit tiered royalty on sales of products and services covered by patents licensed by the Company, subject to customary reductions. The license is perpetual and irrevocable, except in certain limited circumstances, which apply on a patent-by-patent basis. Upon the occurrence of certain specified change of control events with respect to Foresight, the highest percentage of the royalty tiers is subject to a low single-digit increase and Foresight will pay a one-time fee in the low single-digit millions. The term of the S&L Agreement runs through expiration of the patents licensed by the Company to Foresight.