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Termination of Merger with Illumina | 12 Months Ended
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Dec. 31, 2019
Termination of Merger with Illumina [Abstract] |
Termination of Merger with Illumina | NOTE 2. TERMINATION OF MERGER WITH ILLUMINA On November 1, 2018, we entered into a Merger Agreement with Illumina and FC Ops Corp. We, Illumina and Merger Subsidiary entered into the Amendment on September 25, 2019. The Amendment, among other things, extended the End Time (as defined in the Merger Agreement) to December 31, 2019. Additionally, Illumina had until December 18, 2019 to exercise its unilateral right to extend the End Time to March 31, 2020. In addition, the Amendment provided that Illumina would make payments to us of $6.0 million on or before each of October 1, 2019, November 1, 2019 and December 2, 2019. If Illumina elected to further extend the End Time to March 31, 2020, then, except under limited situations, Illumina would be required to make payments to us of $6.0 million on or before each of January 2, 2020, and March 2, 2020, and a payment of $22.0 million on or before February 3, 2020. On December 17, 2019, the U.S. Federal Trade Commission publicly announced that it had authorized legal action to block the Merger. On December 18, 2019, we received written notice from Illumina pursuant to which Illumina exercised its right under Section 10.01(b)(i) of the Merger Agreement, to extend the End Time to March 31, 2020. In accordance with the terms of the Merger Agreement , we received Continuation Advances totaling $18.0 million from Illumina during the fourth quarter of 2019, which are reflected in the “Gain from Continuation Advances from Illumina” line in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2019. On January 2, 2020, we, Illumina and Merger Subsidiary entered into the Termination Agreement to terminate the Merger Agreement. As part of our agreement to terminate the Merger Agreement, Illumina subsequently paid us the Reverse Termination Fee from which we expect to pay our financial advisor associated fees of approximately $10 million. In addition, Illumina paid us the additional Continuation Advances of $6 million in January 2020 and $22 million in February 2020 and is scheduled to make a final Continuation Advance to us of $6 million in March 2020. However, pursuant to the Termination Agreement, in the event that, on or prior to September 30, 2020, we enter into a definitive agreement providing for, or consummate, a Change of Control Transaction (as defined in the Termination Agreement), then we will repay the Reverse Termination Fee (without interest) to Illumina in connection with the consummation of such Change of Control Transaction. If such Change of Control Transaction is not consummated by the two-year anniversary of the execution of the definitive agreement for such Change of Control Transaction, then we will not be required to repay the Reverse Termination Fee. In addition, up to the full amount of the Continuation Advances paid to us are repayable without interest to Illumina if, within two years of March 31, 2020, we enter into a Change of Control Transaction or raise at least $100 million in equity in a single transaction or debt financing (that may have multiple closings), with the amount repayable dependent on the amount raised by us. Please refer to “Note 3 Summary of Significant Accounting Policies” for additional accounting considerations relating to the Continuation Advances received. ﻿

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