|6 Months Ended|
Jun. 30, 2023
|Restructuring and Related Activities [Abstract]|
11. Restructuring Activities
As a result of the Restructuring Plan discussed in Note 1, the Company eliminated approximately 71.2% of its workforce.
Employees affected by the Restructuring Plan obtained involuntary termination benefits that are provided pursuant to a one-time benefit arrangement. For employees who were notified of their termination in February 2023 and have no requirements to provide future service, the Company recognized the liability for the termination benefits in full at fair value in the current period. For employees who are required to render services beyond a minimum retention period to receive their one-time termination benefits, the Company is recognizing the termination benefits ratably over their future service periods. The service periods began in February 2023 and all will
end at various dates through September 2023. The Company recorded charges during the six months ended June 30, 2023 of $3.3 million, which was included in restructuring and impairment costs in the condensed statements of operations and comprehensive loss.
The following table summarizes the Company’s restructuring liability that is included in accrued expenses and other current liabilities in the accompanying condensed balance sheet:
In addition, the board of directors determined that it was in the best interests of the Company and its stockholders to put in place arrangements designed to provide that the Company will have the continued dedication and commitment of those employees, including executives, determined to be key to the Company’s planned go-forward operations. The Board approved, and management implemented, a retention program for certain employees staying with the Company which includes cash retention bonuses totaling $4.0 million for certain retained employees provided that they remain within the Company through the requisite service period of March 1, 2024. As a result, these cash retention bonuses are being accrued over the requisite service period, with $0.9 million and $1.2 million recognized during the three and six months ended June 30, 2023, respectively.
In June 2023, the Company committed to a plan to sell certain of its lab equipment associated with the Restructuring Plan. As of June 30, 2023, the Company had $2.7 million in assets on the condensed balance sheet meeting the criteria of held for sale. These assets are recognized at the lower of cost or fair value less cost to sell using market approach. The fair value of these assets are classified as Level 3 in the fair value hierarchy due to a mix of unobservable inputs utilized such as independent research in the market as well as actual quotes from market participants. During the three and six months ended June 30, 2023, the Company recorded an impairment charge, which was included in restructuring and impairment costs in the condensed statements of operations and comprehensive loss, of $1.1 million. Subsequent changes to the estimated selling price of assets held for sale are recorded as gains or losses to the condensed statements of operations and comprehensive loss wherein the recognition of subsequent gains is limited to the cumulative loss previously recognized. The remaining value of $1.6 million is recognized on the condensed balance sheet under the line item assets held for sale.
The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef