Company: PACB
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001299130-25-000061
Chunk: 692

Company: PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1A
Chunk 692
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 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 of approximately $85 million. The assessed fair value was deemed reasonable based on a market capitalization reconciliation and a supportable control premium. As of the end of the fourth quarter of 2024, we concluded that the significant increase in the carrying value of the reporting unit resulting primarily from the debt restructuring during the quarter and changes in the timing and amount of expected future cash flows due to macroeconomic headwinds, among other factors, indicated 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 impairment test performed as of December 31, 2024, we concluded that the carrying amount of the entity-level reporting unit exceeded fair value and recorded $51.3 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.We performed our impairment test consistent with the approach used to determine the fair value of the reporting unit in the second quarter of 2024. Significant assumptions used in the income approach included revenue growth expectations and a selected discount rate of 12.0%. 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 of approximately $95 million. The assessed fair value was deemed reasonable based on a market capitalization reconciliation.As a result of the impairments, the carrying value of goodwill now approximates fair value. Changes in our future operating results, cash flows, share price, market capitalization or discount rates, among others, used when conducting future goodwill impairment tests could affect the estimated implied fair value of goodwill and may result in additional impairment charges in the future.Changes to goodwill during the year ended December 31, 2024 were as follows:(in thousands)Balance as of December 31, 2023$462,261