Tempus AI, Inc. announced a major acquisition agreement on July 20, 2026, entering into a definitive Agreement and Plan of Merger to acquire Personalis, Inc. The transaction is structured as a two-step merger involving two wholly owned Tempus subsidiaries: Aviary Development, Inc., a Delaware corporation, and Toucan Development, LLC, a Nevada limited liability company. Under the agreement, Aviary Development will first merge with and into Personalis, with Personalis surviving as a wholly owned subsidiary of Tempus. Immediately afterward, Personalis will merge with and into Toucan Development, which will survive as a wholly owned subsidiary of Tempus. The deal was approved by the boards of directors of both Tempus and Personalis. The Personalis board also resolved to recommend that Personalis stockholders adopt the merger agreement, subject to the terms and conditions of the deal. The parties intend for the transaction to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code. Under the merger terms, each outstanding share of Personalis common stock, other than cancelled shares and shares held by stockholders who properly exercise appraisal rights, will be converted into the right to receive Tempus Class A common stock based on an exchange ratio tied to Tempus’ trading price. If the Tempus stock price is equal to or below $48.42, the exchange ratio will be fixed at 0.3356 Tempus Class A shares for each Personalis share. If the Tempus stock price is above $48.42, the exchange ratio will equal $16.25 divided by the Tempus stock price. The Tempus stock price is defined as the volume-weighted average price of Tempus Class A common stock on Nasdaq for the 15 consecutive trading days before the last trading day prior to closing, subject to adjustment if Tempus enters into or completes certain transactions before closing. Tempus also has the right to elect to pay cash for up to 50% of the outstanding Personalis common shares, though that amount may be reduced to preserve the intended tax treatment of the mergers. If Tempus makes that cash election, affected Personalis holders would receive $16.25 per share in cash, without interest, for their pro rata portion of shares subject to the election, and Tempus Class A common stock for the remainder. Personalis holders will also receive cash in lieu of fractional Tempus shares and may receive post-closing distributions, if any. Tempus said the Class A shares issued as stock consideration will be listed on Nasdaq. The agreement also specifies detailed treatment for Personalis equity awards. Certain in-the-money Personalis options — including those held by former employees or non-employee directors, whether vested or unvested, and vested exercisable options held by current service providers — will be cancelled and converted into the right to receive Tempus stock consideration based on the net option shares. Other Personalis options will be assumed by Tempus and converted into options to purchase Tempus Class A common stock, with the number of shares and exercise price adjusted using the exchange ratio. Out-of-the-money Personalis options, whether vested or unvested, will be cancelled for no consideration. Personalis restricted stock units will generally be assumed and converted into Tempus restricted stock units using the exchange ratio. However, Personalis RSUs held by directors will fully accelerate immediately before closing and be cancelled in exchange for Tempus stock consideration. Personalis performance stock units will receive partial accelerated vesting based on the number of full calendar quarters elapsed in the applicable measurement period through the closing date; the vested portion will be cancelled for Tempus stock consideration, while the remaining unvested portion will be assumed as Tempus RSUs and will vest on a time-based schedule in equal quarterly installments through the end of the original measurement period, subject to continued service. The Personalis employee stock purchase plan will also be wound down. Existing offering periods will be limited, with no new participants and no increases in payroll deduction elections. Subject to completion of the mergers, the ESPP will terminate immediately before the effective time. If an offering period remains open at closing, its final purchase date will be accelerated to within 10 business days before the closing date. Closing remains subject to several conditions, including approval by holders of a majority of outstanding Personalis common stock entitled to vote, Nasdaq approval for listing the Tempus shares to be issued, effectiveness of a Tempus Form S-4 registration statement, expiration or termination of the Hart-Scott-Rodino antitrust waiting period and receipt of required regulatory approvals. The deal also requires the absence of legal restraints blocking the transaction, accuracy of representations and warranties, material compliance with covenants, receipt by Personalis of a tax opinion that the mergers qualify as a reorganization, and the absence of a material adverse effect affecting either company. The agreement includes customary operating covenants and a no-solicitation provision restricting Personalis from seeking alternative acquisition proposals. Personalis may, however, engage with a third party if its board determines in good faith that a written proposal constitutes or could reasonably lead to a superior proposal and that failing to engage would be inconsistent with fiduciary duties. Tempus has matching rights in certain circumstances. If the merger agreement is terminated under specified circumstances, including if Tempus terminates following an adverse change in the Personalis board recommendation, Personalis must pay Tempus a termination fee of approximately $76.8 million. A similar $76.8 million reverse termination fee may be payable by Tempus under certain antitrust-related termination scenarios tied to Tempus’ breach of regulatory obligations. Personalis also has a specific termination right if the final Tempus stock price falls below $46.00, exercisable only during a two-business-day period before the closing would otherwise be required to occur. The outside date for completion is April 20, 2027, though the agreement provides for automatic extensions of six months and then an additional six months under specified circumstances. The filing emphasizes that completion of the transaction is not guaranteed and remains subject to stockholder approval, regulatory clearance, market-price mechanics, and other closing conditions.