Company: PACB
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001299130-25-000168
Chunk: 78

Company: PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 78
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1 million for the right-of-use asset, leasehold improvements, and furniture and fixtures relating to the abandonment of the San Diego office. We also incurred cumulative charges to date for excess inventory of $3.6 million primarily relating to a decrease in internal demand resulting from the expense reduction initiatives which were recognized in cost of product revenues. The accelerated amortization and depreciation, which was recognized in sales, general and administrative expense, was determined as a result of the Company's change in estimate pertaining to its remaining useful life of the San Diego office utilizing the estimated date on which it planned to abandon the San Diego office. The lease liability pertaining to the San Diego office was also remeasured during the three months ended June 30, 2024 resulting in a reduction in the operating lease liability balance of $4.4 million, which was offset against the right-of-use asset on the condensed consolidated balance sheets. We fully exited our San Diego office in September 2024.A summary of the liabilities related to the restructuring is as follows:(In thousands)Other CostsTotalAmount recorded in current liabilities as of December 31, 2024$170 $170 Additional expense recorded888 888 Cash payments(1,058)(1,058)Amount recorded in current liabilities as of September 30, 2025$— $— Estimated total restructuring costs to still be incurred$— $— The table above excludes noncash activities and amounts incurred relating to the San Diego office lease liability. The ending balance of the San Diego office lease liability was $0 at the end of the second quarter of 2025.

Q3 Fiscal 2025 Form 10-Q21

NOTE 6.  COMMITMENTS AND CONTINGENCIESLeasesThe Company has entered into various operating lease agreements, primarily relating to our corporate offices. On March 7, 2025, we amended our existing lease covering our corporate headquarters, as well as our research and development, manufacturing, and distribution facilities in Menlo Park, California. The lease amendment extends the term to April 30, 2034. See Note 6 – Commitments and Contingencies, subsection titled “Leases”, in Part I, Item 1 of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 for information regarding the Company’s maturity of lease liabilities under its lease agreements.ContingenciesWe may become involved in legal proceedings, claims and assessments from time to time in the ordinary course of business. We