Company: ADPT
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0000950170-25-030913
Chunk: 186

Company: Adaptive Biotechnologies Corp
Filing Date: 2025-03-03
Form: 10-K
Item: Item 1B
Chunk 186
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. For a change of control or a material divestiture, the Put/Call Price shall be equal to the applicable Return Cap.Accounting TreatmentWe evaluated the terms of the Purchase Agreement and concluded that the features of the Cumulative Purchaser Payments are similar to those of a debt instrument. Accordingly, we accounted for the transaction as debt recorded at amortized cost using the effective interest rate method. We further evaluated the terms of the debt and determined that the Put Option that is exercisable by the Purchasers upon certain contingent events requires bifurcation as a derivative. However, the value of the Put Option was determined to be immaterial due to the remote possibility of exercise. We assess the value of the Put Option periodically. To determine the amortization of the Purchase Agreement obligation, we are required to estimate the amount and timing of future Revenue Interest Payments based on our estimate of the timing and amount of future revenues and calculate an effective interest rate which will amortize the obligation to zero over the amortization period. The calculated effective interest rate as of December 31, 2024 was 8.8%.In connection with the Purchase Agreement, we incurred debt issuance costs of $0.6 million. Debt issuance costs have been recorded to debt and are being amortized over the estimated term of the debt using the effective interest method. The assumptions used in determining the expected repayment term of the obligation and amortization period of the issuance costs requires that we make estimates that could impact the short- and long-term classification of these costs, as well as the period over which these costs will be amortized. We periodically assess the amount and timing of expected Revenue Interest Payments based on internal forecasts. To the extent such payments are greater or less than our initial estimates or the timing of such payments is materially different than our original estimates, we will prospectively adjust the amortization of the revenue interest liability and the issuance costs, as well as the effective interest rate.

110

Adaptive Biotechnologies CorporationNotes to Consolidated Financial Statements (Continued) 

The following table sets forth the revenue interest liability, net activity during the years ended December 31, 2024 and 2023 (in thousands): 

        Revenue interest liability, net at December 31, 2022
         
        $
        125,360

        Interest expense

        13,800

        Revenue interest paid

        (6,225
        )

        Revenue interest payable

        (2,275
        )

        Revenue interest liability, net at December