On July 30, 2026, our Board of Directors approved a restructuring plan to continue to better align our organizational structure and resources with our strategic initiatives. The restructuring included operating expense reductions and a reduction in force (the “Reduction in Force”). These restructuring actions resulted in a workforce reduction of 40 employees, or approximately 8% of our workforce, as we aligned our organizational structure with our strategic priorities.

During the three months ended September 30, 2026, we incurred aggregate pre-tax charges of approximately $1.8 million in connection with the Reduction in Force, primarily consisting of severance payments, employee benefits, outplacement services and related costs. These charges include $0.9 million in sales, general and administrative expense, $0.6 million in research and development expense, and $0.3 million in cost of revenue. The Reduction in Force was completed and these charges were incurred and paid during the three months ended September 30, 2026.

In the first quarter of 2025, we implemented an expense reduction initiative aimed at lowering our annualized run-rate operating expenses. These actions, which included workforce reductions and other cost-saving measures, were part of a broader strategic shift to prioritize the adoption of HiFi sequencing.

(1) Cumulative charges incurred to date include $3.8 million in sales, general and administrative expense and $2.1 million in research and development expense.

Charges included employee separation costs comprised of approximately $2.5 million related to salaries, wages and other employee benefits paid to terminated employees pursuant to the Worker Adjustment and Retraining Notification Act and approximately $2.3 million of severance costs.

In connection with the restructuring and strategic shift, we incurred an additional $389.9 million in costs. These primarily include $359.3 million of accelerated amortization of certain intangible assets, $15.0 million of IPR&D impairment charges, charges of $8.1 million related to excess inventory due to decreased external demand, $3.9 million for estimated losses on purchase commitments tied to anticipated future excess inventory included in cost of revenue, and $3.1 million of accelerated depreciation of fixed assets. See Note 3. Balance Sheet Components for additional information on the IPR&D impairment assessment and the change in estimated useful life of the intangible asset and accelerated amortization.


(In thousands)	Other Costs
Amount recorded in current liabilities as of December 31, 2025	$	389
Cash paid during 2026	(389)
Amount recorded in current liabilities as of September 30, 2026	$	—

Estimated total restructuring costs to still be incurred	$	—

In the second quarter of 2024, we implemented an expense reduction initiative that included workforce reductions, the closing of our San Diego office, and other actions to reduce annualized run-rate operating expenses. We recognized approximately $0.9 million of expense related to the 2024 restructuring during the nine months ended September 30, 2025. See Note 6 – Restructuring in Part II, Item 8 of the 2025 Annual Report for information regarding the 2024 restructuring initiative.