Company: TXG
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0001770787-25-000032
Chunk: 257

Company: 10x Genomics, Inc.
Filing Date: 2025-05-09
Form: 10-Q
Item: Part II, Item 1A
Chunk 257
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 terms or conditions of funding, they may reduce, delay or cancel entirely their purchases of our products and services, which could have a material adverse effect on our business, financial condition and results of operations. 

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Any changes in U.S. academic and government regulations, policies or operations that affect the terms of research funding could impact our customers’ ability to secure funding and, consequently, the timing and demand for our products and services. For example, in February 2025, the NIH imposed a standard indirect rate of 15% across all NIH grants for indirect costs, defined as “facilities” and “administration,” in lieu of a separately negotiated rate for indirect costs in every grant. Indirect costs represented $9 billion of the $35 billion in grants awarded by the NIH in 2023, which is more than 25% of total grant dollars awarded by the NIH. Our customers may face increased financial pressure due to this change or any future caps on indirect costs. The imposition of this cap, or other changes to grant terms, conditions or processes including those related to the disbursement of funds, could lead to delayed, reduced or cancelled funding otherwise available for purchasing research supplies and equipment, thereby negatively impacting our sales. 

In addition, various private, state, federal and international agencies that provide grants and other funding may be subject to budgetary or other constraints that could result in spending reductions, reduced grant making, reduced allocations or budget cutbacks, budget reprioritizations, delays or funding cancellations, which could jeopardize the ability of researchers to purchase our products. For example, congressional appropriations to the NIH have generally increased year-over-year in recent years, but the NIH also experiences occasional year-over-year decreases in appropriations. There is no guarantee that NIH appropriations will not decrease in the future and in April 2025 the United States Presidential administration proposed cuts to the NIH including a more than 40% cut to the NIH’s annual budget commencing with the 2026 fiscal year beginning in October 2025. Further, in January 2025 the Executive Office of the President’s Office of Management and Budget (OMB) issued a memorandum “temporarily paus[ing] all activities related to obligation or disbursement of all Federal financial assistance...” which may have the effect of preventing customers or potential customers from accessing grants or funding. Additionally, changes to the operations of our customers or the institutions that fund them including reductions in staffing or reorganizations of U.S. academic and government funding institutions may also cause delays, reductions or cancell