Company: PACB
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001299130-25-000061
Chunk: 161

Company: PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1
Chunk 161
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 using the effective interest method over the term of the 2030 Notes, resulting in an effective interest rate of 1.6%. We also paid accrued but unpaid interest of $2.5 million on the 2028 Notes in connection with the 2023 Exchange Transaction on June 30, 2023.We did not receive any cash proceeds from the 2023 Exchange Transaction. In exchange for issuing the 2030 Notes pursuant to the 2023 Exchange Transaction, we received and cancelled the exchanged 2028 Notes. Following the closing of the 2023 Exchange Transaction, $459.0 million in aggregate principal amount of 2028 Notes remained outstanding with terms unchanged.The net carrying amount of the liability for the 2030 Notes is included as convertible senior notes, net, non-current on our consolidated balance sheets as follows:December 31,(in thousands)20242023Principal amount$441,000 $441,000 Unamortized debt premium453 524 Unamortized debt issuance costs(5,959)(6,907)Net carrying amount$435,494 $434,617 Interest expense for the 2030 Notes for the years ended December 31, 2024, 2023, and 2022 was as follows:Years Ended December 31,(in thousands)202420232022Contractual interest expense$6,081 $3,032 $— Amortization of debt issuance costs950 463 — Total interest expense$7,031 $3,495 $— As of December 31, 2024, the estimated fair value (Level 2) of the 2030 Notes was $293.9 million. The fair value of the 2030 Notes is estimated using a binomial lattice model that is primarily affected by the trading price of our common stock, market interest rates and volatility.

Fiscal 2024 Form 10-K111

2028 Convertible Senior NotesOn February 9, 2021, we entered into an investment agreement with SBN relating to the issuance and sale to SBN of $900.0 million in aggregate principal amount of the 2028 Notes. The 2028 Notes were issued on February 16, 2021 and bore interest at a rate of 1.50% per annum. As discussed above, in June 2023 we completed an exchange of $441.0 million in aggregate principal amount of our 2028 Notes for $441