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United States securities and exchange commission logo
April 21, 2021
Susan Kim
Chief Financial Officer
Pacific Biosciences of California, Inc.
1305 O'Brien Drive
Menlo Park, CA 94025
Re: Pacific Biosciences
of California, Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2020
Filed on February
26, 2021
File No. 001-34899
Dear Ms. Kim:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comment. In our comment, we may ask
you to provide us
with information so we may better understand your disclosure.
Please respond to the comment within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to the comment, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2020
Notes to the Consolidated Financial Statements
Note 4. Financial Instruments
Estimated fair value of the Continuation Advances liability, page 60
1. You disclose that the
Continuation Advances constitute a financial liability and that you
elected the fair value
option to recognize this liability. Please address the following:
Explain how you
determined that the Continuation Advances met the definition of a
financial
liability. Also explain how you determined that these advances should be
accounted for
differently than the Reverse Termination Fee which you appear to have
accounted for as a
gain contingency based on your disclosure on page 54. Clarify
why your
Continuation Advances were not also considered a gain contingency under
ASC 450.
You state that the
estimated fair value of the Continuation Advances at both
December 31, 2020
and 2019 was determined to be zero as management estimated
Susan Kim
Pacific Biosciences of California, Inc.
April 21, 2021
Page 2
that there would be no future cash outflows associated with this
financial instrument
because the probabilities of either of the specified triggering
events occurring and
requiring repayment to Illumina were evaluated as being remote at
both of those
dates. However, in February 2021 you were required to repay $52
million of these
advances as a result of your issuance of $900 million in
convertible notes. Explain
the factors you considered in determining the probability of
repayment was remote
given the nature of the specified events that would trigger
repayment (particularly
an equity or debt financing) and the fact that the time period
that repayment of such
advances could be triggered extends out to March 2022.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Mary Mast at 202-551-3613 or Angela Connell at
202-551-3426 with
any questions.
FirstName LastNameSusan Kim Sincerely,
Comapany NamePacific Biosciences of California, Inc.
Division of
Corporation Finance
April 21, 2021 Page 2 Office of Life
Sciences
FirstName LastName