What changed in this filing

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Item 9A. Controls and Procedures

2022-02-28 compared with 2021-02-26 · 85 added, 38 removed, 146 unchanged (46% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer, and our chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a–15(e) and 15d–15(e) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10–K.

Our management, with the participation of our chief executive officer, our chief financial officer, and our principal accounting officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a–15(e) and 15d–15(e) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10–K.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgement in evaluating the cost-benefit relationship of possible controls and procedures.

Based on this evaluation, our chief executive officer, chief financial officer and our principal accounting officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Based on this evaluation, our chief executive officer, chief fina ncial officer and our principal accounting officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f).

Under the supervision and with the participation of our management, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer , we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (COSO).

Based on our evaluation under this framework our management concluded that our internal control over financial reporting was effective as of December 31, 2020.

Pacific Biosciences of California, Inc’s internal control over financial reporting is designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

Based on our assessment, we concluded that, as of December 31, 2021, the Company’s internal control over financial reporting was effective based on those criteria.

Management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Omniome, Inc.

and Circulomics, Inc., which are included in our 2021 consolidated financial statements and constituted 2% of total assets as of December 31, 2021 and approximately 1% of consolidated revenues for the year then ended.

The Company’s internal control over financial reporting as of December 31, 2021 has been audited by Ernst &Young LLP, the independent registered public accounting firm who also audited the Company’s financial statements.

Ernst &Young’s attestation report on the Company’s internal control over financial reporting appears on page 106 hereof.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a–15 or 15d–15 that occurred during our fourth fiscal quarter that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer to determine whether any change in our internal control over financial reporting occurred during the fiscal quarter ended December 31, 2021 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There were no material changes in our internal control over financial reporting during the year ended December 31, 2021, that have materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Pacific Biosciences of California, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Pacific Biosciences of California, Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Pacific Biosciences of California, Inc.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Omniome, Inc.

and Circulomics, Inc., which are included in the 2021 consolidated financial statements of the Company and constituted 2% of total assets as of December 31, 2021 and 1% of revenues for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Omniome, Inc.

and Circulomics, Inc.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2021 consolidated financial statements of the Company and our report dated February 28, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Redwood City, California

February 28, 2022

OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

DIRECTORS , EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

2 unchanged sentences

Information responsive to this item is incorporated herein by reference to our definitive proxy statement with respect to our 2022 Annual Meeting of Stockholder to be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

‎ AND RELATED STOCKHOLDER MATTERS.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information responsive to this item is incorporated herein by reference to our definitive proxy statement with respect to our 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

‎ INDEPENDENCE.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

12 unchanged sentences

Refer to the Exhibit Index that follows.

Exhibit Index

Exhibit Ind ex

Incorporated by reference herein

24 unchanged sentences

August 5, 2020

2020 Inducement Equity Incentive Plan and related forms of agreement

December 4, 2020

Change in Control Severance Agreement by and between the Registrant and Susan K.

Barnes effective September 9, 2010

September 20, 2010

Change in Control Severance Agreement by and between the Registrant and James Michael Phillips effective September 9, 2010

September 20, 2010

Change in Control Severance Agreement by and between the Registrant and Michael Hunkapiller dated January 5, 2012

March 1, 2012

Pacific Biosciences of California, Inc.

2020 Inducement Equity Incentive Plan, as amended, and forms of agreement thereunder

April 19, 2021

Letter Relating to Employment Terms by and between the Registrant and Susan G.

5 unchanged sentences

Form of Change in Control and Severance Agreement for executive officers

Filed herewith

February 26, 2021

Letter Relating to Employment Terms by and between the Registrant and Christian O.

Henry effective September 14, 2020

Filed herewith

February 26, 2021

Change in Control and Severance Agreement by and between the Registrant and Christian O.

Henry effective September 14, 2020

Filed herewith

February 26, 2021

Amended Change in Control and Severance Agreement by and between the Registrant and Christian O.

Henry dated February 3, 2021

Filed herewith

February 26, 2021

Letter Relating to Employment Terms by and between the Registrant and Mark Van Oene effective January 8, 2021

Filed herewith

February 26, 2021

Letter Relating to Employment Terms by and between the Registrant and Peter Fromen effective January 8, 2021

Filed herewith

February 26, 2021

Lease Agreement by and between the Registrant and Menlo Park Portfolio II, LLC, dated July 22, 2015.

2 unchanged sentences

March 6, 2017

Agreement by and among Pacific Biosciences of California, Inc., Illumina, Inc.

and FC Ops Corp.

dated January 2, 2020

January 2, 2020

Development and Commercialization Agreement by and between the Registrant and Invitae Corporation dated January 12, 2021

Filed herewith

February 26, 2021

Amendment to Development and Commercialization Agreement, dated as of June 3, 2021, by and between Pacific Biosciences of California, Inc.

and Invitae Corporation

August 6, 2021

Investment Agreement, dated as of February 9, 2021, between Pacific Biosciences of California, Inc.

2 unchanged sentences

Exclusive License Agreement by and between the Registrant and Cornell Research Foundation, Inc., dated as of February 1, 2004

Filed herewith

October 22, 2010

Letter Relating to Employment Terms by and between the Registrant and Michele Farmer effective May 17, 2021

August 6, 2021

Agreement and Plan of Merger of Reorganization among Pacific Biosciences of California, Inc., Apollo Acquisition Corp., Apollo Acquisition Sub, LLC, Omniome, Inc.

and Shareholder Representative Services, LLC, as securityholder representative, dated as of July 19, 2021

Securities Purchase Agreement, dated as of July 19, 2021, by and between Pacific Biosciences of California, Inc.

and each of the Investors

Registration Rights Agreement, dated as of July 19, 2021, by and between Pacific Biosciences of California, Inc.

and each of the Investors

July 20, 2021

List of Subsidiaries of the Registrant

26 unchanged sentences

Filed herewith

_________________________

+ Indicates management contract or compensatory plan.

5 unchanged sentences

FORM 10-K SUMMARY

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

P ACIFIC B IOSCIENCES OF C ALIFORNIA , I NC .

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

Pacific Biosciences of California, Inc.

February 28, 2022

/s/ Christian O.

Chief Executive Officer and President

February 28, 2022

/s/ S USAN G.

1 unchanged sentence

February 28, 2022

/s/ Michele Farmer

Michele Farmer

Vice President and Chief Accounting Officer

2 unchanged sentences

Henry, Susan G.

Kim, Brett Atkins and Eric E.

Schaefer, jointly and severally, as his or her true and lawful attorney-in-fact and agent, with full power of substitution, each with power to act alone, to sign and execute on behalf of the undersigned any and all amendments to this Annual Report on Form 10-K, and to perform any acts necessary in order to file the same, with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requested and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or their or his or her substitutes, shall do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Kim, Brett Atkins and Michele Farmer, and each of them, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for each individual in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or the individual’s substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

/s/ Christian O.

5 unchanged sentences

February 28, 2022

/s/ Michele Farmer

Michele Farmer

Vice President and Chief Accounting Officer (Principal Accounting Officer)

7 unchanged sentences

February 28, 2022

/s/ Michael Hunkapiller

Michael Hunkapiller

/s/ Hannah A.

February 28, 2022

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures