Company: PACB
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001299130-25-000061
Chunk: 895

Company: PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 3
Chunk 895
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, 2023, and 2022 was $13.8 million, $11.5 million, and $9.5 million, respectively.In connection with the interim impairment test of goodwill in the second and fourth quarter of 2024, we also performed a recoverability test for the definite-lived asset group, which includes property and equipment, noting no impairment.

Fiscal 2024 Form 10-K103

Goodwill and Intangible AssetsGoodwillGoodwill is reviewed for impairment at least annually as of the first day of the second quarter, or more frequently if an event occurs indicating impairment. We performed our annual assessment for goodwill impairment, noting no impairment. Based primarily on the sustained decrease in our stock price during the second quarter and overall market capitalization as of the end of the second quarter of 2024 as well as other factors, we concluded that there was an indicator that it was more likely than not that the fair value of the reporting unit was less than its carrying amount that required an interim impairment test be performed on goodwill. As a result of the interim impairment test performed as of June 30, 2024, we concluded that the carrying amount of the entity-level reporting unit exceeded fair value and recorded $93.2 million of goodwill impairment. The impairment charge is included on our consolidated statements of operations and comprehensive loss for the year ended December 31, 2024.The decline in the fair value of the reporting unit below its carrying value as of June 30, 2024 resulted primarily from the decline in our stock price and changes in the timing of expected future cash flows as compared to our initial long-term plan, due to continued impact of longer than expected median sales cycles resulting from various factors. We performed our impairment test using a combination of an income and a market approach to determine the fair value of the reporting unit. The income approach utilized estimated discounted cash flows, while the market approach utilized comparable company information. Significant assumptions used in the income approach included revenue growth expectations and a selected discount rate of 12.0%. The discount rate was based on the weighted average cost of capital, determined using market, peer company, industry data, and related risk factors. The assessment is a level 3 fair value measurement due to its reliance on certain unobservable inputs and significant management judgment. The assumptions used were inherently subject to uncertainty and small changes in these assumptions could have had a significant impact on the concluded value. An increase of 100 basis points to the discount rate used in our assessment would have resulted in additional goodwill impairment