Veracyte, Inc. VCYT
New risk paragraphs, branching off last year
Each branch is a paragraph in Risk Factors with nothing like it in the 10-K filed Feb 28, 2025. A box jumps to the paragraph as filed, below.
Paragraphs with nothing like them in last year's 10-K
11 paragraphs in Risk Factors of the 10-K filed Feb 26, 2026 with nothing like them in the 10-K filed Feb 28, 2025. Quoted exactly. Paragraphs that were only edited are under 10-K change.
•Prior to its acquisition, C2i was not required to maintain internal controls that would meet the requirements of a public company. Given the limited size and scope of C2i’s operations, its inclusion in the Company’s consolidated financial statements does not have a material impact on the Company’s internal control over financial reporting. The Company has integrated C2i into its existing internal control framework where appropriate and will continue to evaluate control needs as integration activities progress;
specifications, could negatively impact our ability to provide timely response and reports to our customers and, as a result, may materially impact our ability to generate revenue.
we encounter difficulty meeting market demand or quality standards, our reputation could be harmed and our future prospects and our business could suffer.
addition, sales of our tests outside the United States subject our business to foreign regulatory requirements and cost-reduction measures, which may also change over time.
to Class I or II for a new product type, and clinical data may be required. For laboratory tests for which FDA clearance, authorization or approval is required, the FDA may also require data to support analytical and clinical validity.
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benefits of its intended performance, and that any claims made about the performance and safety of the device are supported by suitable evidence.
IVDR’s transitional timelines regarding compliance deadlines according to IVD risk classifications as well as designations of Swiss Authorized Representatives.
•scale our laboratory processes and infrastructure to accommodate new tests; and
•in California, the Private Attorneys General Act, or PAGA, which empowers employees to bring representative actions for alleged violations of the California Labor Code. As a California-based employer, we face heightened legal and financial exposure under PAGA, including exposure related to scale and complexity of class actions, statutory PAGA penalties, and compliance and defense burden of such claims;
oncology diagnostics company based in Tel Aviv, Israel, with global operations. Doing business internationally involves a number of risks, including:
Furthermore, the C2i Acquisition included acquiring personal data that may originate from, be processed in, or be transferred to and from, Israel, the EU and other jurisdictions. Our ability to process, use and transfer such personal data may
Paragraphs in the 10-Q filed Nov 5, 2026 that were not in the one before
New in the latest 10-Q
25 paragraphs in the 10-Q filed Nov 5, 2026 with nothing like them in the 10-Q filed Jul 31, 2026 (at least half the words must differ; new numbers alone do not count). Quoted exactly, grouped by the item heading above them. This is text that changed, not a judgement of how serious it is.
10-Q
intention or obligation to publicly update or revise any forward-looking statements for any reason or to conform such statements to actual results or revised expectations, except as required by law.
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Financial statements and notes
In September 2026, the Company acquired Convergent Genomics, Inc., a diagnostics company focused on urine-based genomic testing. Refer to Note 4, Business Combination for additional information.
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The Company first determines whether a set of assets acquired and liabilities assumed constitute a business and should be accounted for as a business combination. If the assets acquired are not a business, the Company accounts for the transaction as an asset acquisition. Business combinations are accounted for by using the acquisition method of accounting. Under the acquisition method, assets acquired, and liabilities assumed are recorded at their respective fair values as of the acquisition date in the Company's consolidated financial statements. The estimated fair value of intangible assets acquired are based on discounted cash flows utilizing certain assumptions including revenues (such as projected testing volumes, growth rates), discount rates and expected economic life/obsolescence factors of the respective assets. The excess of the fair value of consideration transferred over the fair value of the net assets acquired is recorded as goodwill. Contingent consideration obligations incurred in connection with a business combination are recorded at fair value on the acquisition date and remeasured at each subsequent reporting period until the related contingencies are resolved, with the resulting changes in fair value recorded in general and administrative expense in the consolidated statements of operations.
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assumed to be used to repurchase shares. The following table sets forth the computation of basic and diluted EPS (in thousands, except per-share amounts):
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Amounts Balance as of December 31, 2025 $767,154 Goodwill acquired - Convergent 88,421 Balance as of September 30, 2026 $855,575
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On August 31, 2026, the Company closed a transaction to acquire certain assets for $ 5.3 million in cash and two mandatory annual license fee payments of $ 3.0 million due following the first and second anniversaries of the closing date. The acquisition was accounted for as a business combination and resulted in the recording of $ 9.0 million of intangible assets for manufacturing know-how.
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On September 14, 2026, or the Closing Date, the Company acquired 100 % of the outstanding equity interests of Convergent Genomics, Inc., or Convergent, a privately held company, through a merger under an Agreement and Plan of Merger, dated September 10, 2026, by and among the Company, Convergent, Compass Merger Sub, Inc., and Shareholder Representative Services LLC, which we refer to as the Convergent Acquisition. Convergent is a molecular diagnostics company that develops and commercializes UroAmp, a urine-based test for bladder cancers, including minimal residual disease, or MRD, monitoring in bladder cancer. The Convergent Acquisition adds Convergent’s UroAmp platform, including its proprietary urinary tumor DNA technology, to the Company’s development portfolio.
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The total consideration for the Convergent Acquisition was $ 178.2 million, comprised of $ 154.7 million of cash consideration which includes amounts relating to the settlement of vested stock options of $ 13.1 million, amounts placed in escrow of $ 16.0 million, and net of cash acquired of $ 6.8 million. Other components of the cash consideration include $ 0.2 million deposited into a fund to cover the Convergent securityholders’ representative’s costs of administering post-closing matters and $ 1.4 million of seller transaction costs paid by the Company on behalf of Convergent. In addition to the cash consideration, the Company agreed to pay to Convergent securityholders up to $ 30.0 million in milestone-driven payments that are dependent on the achievement of reimbursement related milestones. The Company recognized a $ 23.5 million contingent consideration liability for the estimated fair value of the milestone payments which was included within within consideration transferred. The Company determined the estimated fair value of the contingent consideration based on a probability weighted expected return method. The fair value of the contingent milestone payments will be remeasured each quarter, with changes in fair value recognized within general and administrative expense.
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In connection with the Convergent Acquisition, the Company deposited $ 16.0 million into escrow, consisting of $ 1.0 million to settle post-closing purchase price adjustments and $ 15.0 million to secure the Convergent securityholders’ indemnification obligations. The indemnification portion, net of pending claims, is released to the Convergent securityholders 12 months after the Closing Date. These escrowed amounts are included in the purchase price.
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The Company also entered into retention arrangements with certain employees of Convergent, consisting of $ 1.6 million of cash retention and $ 2.7 million of restricted stock units. These arrangements are accounted for separately from the
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Convergent Acquisition and recognized as post-combination compensation expense over the service period. The Company incurred $ 1.7 million of transaction costs related to the Convergent Acquisition during the three months ended September 30, 2026, which were recorded as general and administrative expense.
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The Company included financial results of Convergent in its consolidated financial statements from the Closing Date, which contributed no revenue and $ 0.3 million of operating loss, including $ 0.2 million of intangible asset amortization during the three months ended September 30, 2026.
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Assets acquired and liabilities assumed are recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. While the Company believes that its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill. The following table summarizes the preliminary fair values of assets acquired and liabilities assumed in the Convergent Acquisition at the Closing Date (in thousands of dollars):
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Amount Assets acquired: Cash and cash equivalents $ 6,750 Accounts Receivable 410 Prepaid expenses and other current assets 347 Property, plant and equipment, net 646 Intangible assets, net 96,880 Total identifiable assets acquired 105,033 Accounts payable 146 Accrued Liabilities 148 Accrued employee transaction bonuses and promised option payment 2,144 Deferred revenue 258 Deferred tax liability 12,569 Net identifiable assets acquired 89,768 Goodwill 88,421 Total purchase price $ 178,189
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Based on the guidance provided in ASC 805, Business Combinations, the Company accounted for the Convergent Acquisition as a business combination in which the Company determined that Convergent was a business which combines inputs and processes to create outputs, and substantially all of the fair value of gross assets acquired was not concentrated in a single identifiable asset or group of similar identifiable assets.
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The Company's purchase price allocation for the Convergent Acquisition is preliminary and subject to revision as additional information about the fair value of the assets and liabilities becomes available. The fair values assigned to tangible and intangible assets acquired, and liabilities assumed, are based on management’s estimates and assumptions and may be subject to change as additional information is received. The purchase price allocation involves significant judgment in estimating the fair values of acquired assets and liabilities, including intangible assets, goodwill and related tax impacts. As the analysis is finalized and additional information becomes available, these preliminary estimates may be revised during the measurement period, which could materially impact the Company's results of operations and financial position.
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The intangible assets acquired included developed technology, trademarks and trade names and customer relationships. The preliminary fair value of the Company's intangible assets as of the acquisition date and the method used to value these assets as well as the estimated economic lives for amortizable intangible assets were as follows (in thousands of dollars, except useful life which is in years):
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Fair Value Estimated Useful Life Valuation Method ──────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── Intangible assets acquired: Developed technology $ 95,900 15 years Multi-period excess earnings method Trademarks and tradenames 60 5 years Relief from royalty Customer relationships 920 5 years With-and-without Total intangible assets acquired $ 96,880
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The fair value of the finite-lived acquired developed technology intangible asset was determined using the multi-period excess earnings income approach. This approach determines fair value based on estimated cash flow projections which are discounted to present value using a risk-adjusted rate of return. Management’s estimated cash flow projections include significant assumptions, including forecasted revenue, the related revenue growth rates and the discount rate. The discount rate used to determine the fair value of the developed technology was 15 %.
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The amortization expense for all acquired intangible assets will be recognized on a straight-line basis and recorded within intangible asset amortization.
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Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The Convergent Acquisition resulted in the recognition of $88.4 million of goodwill, which the Company believes primarily consists of expected synergies arising from the integration of the UroAmp platform with the Company's existing urologic cancer testing portfolio, anticipated future technologies and products, assembled workforce and expected growth opportunities. Goodwill created as a result of the Convergent Acquisition is not deductible for tax purposes.
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estimated fair value of the contingent consideration. As of September 30, 2026 and December 31, 2025, the Company calculated the estimated fair value of the milestones using the following significant unobservable inputs:
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In September 2026, we acquired Convergent Genomics, Inc., or Convergent, which added Convergent's UroAmp platform, including its proprietary urinary tumor DNA, or utDNA, technology, to our development portfolio.
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and related political, military and security conditions in and around Israel may disrupt our Israel business operations and employees that we acquired through our acquisition of 100% of the outstanding equity interests of C2i.
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Pursuant to the Agreement and Plan of Merger, dated as of September 10, 2026, by and among the Company, Convergent, Compass Merger Sub, Inc. and Shareholder Representative Services LLC, or the Merger Agreement, we may be required to pay up to an additional $30.0 million in cash to Convergent securityholders upon the achievement of certain milestones. As of September 30, 2026, we expect to achieve a portion of the milestones contained in the Merger Agreement within the next 12 months, requiring payments totaling up to $10.0 million.
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The 10-Q's risk factors against the 10-K
Item 1A of the 10-Q filed Nov 5, 2026 against Item 1A of the 10-K filed Feb 26, 2026.
A 10-Q repeats only the risks that changed, so a 10-K paragraph that is missing from it is not counted as removed.
Added is a paragraph with nothing like it in the 10-K, Reworded a sentence that is in both with several words changed,
Quiet changes a sentence in both where one to four words changed and one is a hedge or a modal
(cut words struck through, new words highlighted).
Text on the page, not a score; each links to the filing at sec.gov.
What the 10-Q itself says about its risk factors:In addition to the information set forth in this report, you should consider carefully the factors and other cautionary statements discussed in the section titled “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K. There have been no material changes in our risk factors from those described in our Annual Report.
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1 paragraph in the 10-Q's Item 1A, and none of them adds, rewords or quietly edits a paragraph of the 10-K's.
Phrases used for the first time
Two-word phrases in Risk Factors of the 10-K filed Feb 26, 2026 that are in none of the 1 earlier 10-Ks stored, back to Feb 28, 2025
Where each one is used
- afirma laboratory: Our financial results currently depend mainly on sales of our Decipher Prostate and Afirma laboratory developed tests (LDTs), and we may not generate sufficient revenue from these and our other diagnostic tests to grow our business.
- tests ldts: Our financial results currently depend mainly on sales of our Decipher Prostate and Afirma laboratory developed tests (LDTs), and we may not generate sufficient revenue from these and our other diagnostic tests to grow our business.
- prosigna ldt: Most of our revenue to date has been derived from sales of our Decipher Prostate and Afirma laboratory developed tests (LDTs), which are used in the diagnosis of urological and thyroid cancers. Over the next few years, we expect to continue to derive a substantial portion of our revenue from sales of our Decipher...
- european patents: In the EU, the Unified Patent Court, or UPC, has jurisdiction over all unitary and certain European patents in those EU member states that have ratified the Agreement on a Unified Patent Court, or UPCA. However, during the transitional period of seven years from June 1, 2023 (which may be extended), European...
- recent judicial: •Changes in healthcare policy, including legislation reforming the U.S. healthcare system, recent U.S. judicial decisions and potential changes in the regulatory environment, may have a material adverse effect on our financial condition and operations.
- skilled employees: •We depend on our senior management team, and the loss of one or more of our executive officers, or the inability to attract and retain highly skilled employees or other key personnel in our highly competitive industry, could adversely affect our business.
- ivd strategies: Most of our revenue to date has been derived from sales of our Decipher Prostate and Afirma laboratory developed tests (LDTs), which are used in the diagnosis of urological and thyroid cancers. Over the next few years, we expect to continue to derive a substantial portion of our revenue from sales of our Decipher...
- existing ldts: While there is continued FDA enforcement discretion for our existing LDTs, if the FDA were to determine that Decipher Prostate, Afirma and Decipher Bladder classifiers, or modifications thereof, are not within the scope of the FDA's enforcement discretion policy for LDTs for any reason, including based on rules,...
Used at least twice, small words left out. Counted, not picked: a phrase can be new because the company renamed something.
What was taken out
10 paragraphs of last year's Risk Factors with nothing like them now. The longest are quoted.
Sources
Item 1A of each 10-K and 10-Q on EDGAR, quoted exactly. Each paragraph links to the filing at sec.gov.
Also
10-K change: what was reworded or cut, section by section.
Work with it
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