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Illumina 8-K Report, Exit or Disposal Costs (Jun 3, 2024)

Reports
Financial Events·Other Events
Filing Date
Filed June 3, 2024
Period End
June 3, 2024
Security
ILMN
In the record · 2016–202610-K1110-Q338-K167

ILMN filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 167 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Nov ’17Nov ’17
  2. Material agreement8-K · Sep ’20Sep ’20
  3. Leadership change8-K · Sep ’22Sep ’22
  4. Material agreement8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed June 3, 2024. Cited figures are marked; the original filing is the authoritative source.

On June 3, 2024, Illumina, Inc. disclosed that its board of directors approved the separation (the "Spin-Off") of GRAIL, including the timing and details of the distribution of at least 85.5%a of GRAIL's common stock to Illumina shareholders as a pro rata dividend.

The Distribution is expected to be effective at 12:01 a.m. New York City time on June 24, 2024, with GRAIL expected to begin "regular way" trading on the Nasdaq Global Select Market on June 25, 2024 under the ticker "GRAL." Immediately before the Spin-Off, GRAIL, LLC will convert into a Delaware corporation and be renamed GRAIL, Inc. Illumina holders will receive one share of GRAIL common stock for every six shares of Illumina common stock held at the close of business on June 13, 2024, the record date. Shareholders who sell Illumina shares regular way on or before the Distribution Date will also sell their right to receive GRAIL stock, so investors are encouraged to consult financial advisors.

Stockholders are not required to vote or pay any consideration, and the Distribution is subject to satisfaction or waiver of conditions described in GRAIL's Form 10 registration statement. Illumina estimates incremental charges of approximately $35 to $50 millionb related to the Spin-Off, primarily cash expenditures for legal and advisory fees, mostly in the second quarter of 2024 and substantially all by the third quarter of 2024.

The board's approval is a potential indicator of impairment in the second quarter of 2024, which could trigger an interim goodwill impairment test; the company cannot yet estimate any impairment charge and will amend this filing if one is recognized. As of March 31, 2024, GRAIL-related balances included goodwill of $1,466 millionc, non-amortizing in-process R&D of $561 million, and net amortizing intangible assets of $2,092 million.

02—Key points

Key Highlights

  1. Board approved the Spin-Off of GRAIL, with at least 85.5% of GRAIL common stock to be distributed to Illumina shareholders as a pro rata dividend.
  2. Distribution expected effective at 12:01 a.m. New York City time on June 24, 2024; GRAIL expected to trade "regular way" on Nasdaq Global Select Market on June 25, 2024 under "GRAL."
  3. Ratio: one share of GRAIL common stock for every six shares of Illumina common stock held at close of business on the June 13, 2024 record date.
  4. Illumina shareholders need not vote, pay consideration, or surrender shares to receive GRAIL stock.
  5. Incremental Spin-Off charges estimated at approximately $35 to $50 million, mainly cash legal and advisory fees, largely in Q2 2024 and substantially all by Q3 2024.
  6. Board approval is a potential impairment indicator in Q2 2024; no impairment estimate provided, and an 8-K amendment will follow if one is recognized.
  7. As of March 31, 2024, GRAIL carried goodwill of $1,466 million, non-amortizing IPR&D of $561 million, and net amortizing intangibles of $2,092 million.

03—Questions

Frequently Asked Questions

  1. What is the Spin-Off and when does it take effect?

    Illumina's board approved separating GRAIL by distributing at least 85.5% of GRAIL's common stock to Illumina shareholders as a pro rata dividend. The Distribution is expected to be effective at 12:01 a.m. New York City time on June 24, 2024, and GRAIL is expected to begin regular-way trading on Nasdaq under "GRAL" on June 25, 2024.

  2. How many GRAIL shares will I receive?

    Holders of Illumina common stock at the close of business on the June 13, 2024 record date will receive one share of GRAIL common stock for every six shares of Illumina common stock held.

  3. Do I need to take action or pay for the GRAIL shares?

    No. Stockholders are not required to vote or take other action, will not pay any consideration, and do not need to surrender or exchange Illumina shares. Those who sell Illumina shares regular way on or before the Distribution Date also sell their right to receive GRAIL shares, so investors should consult their financial advisors.

  4. What costs and accounting effects does the Spin-Off create for Illumina?

    Illumina estimates incremental charges of approximately $35 to $50 million, primarily cash legal and advisory fees, mostly incurred in Q2 2024 and substantially all by Q3 2024. The board's approval is a potential impairment indicator in Q2 2024, which could trigger an interim goodwill impairment test; the company cannot yet estimate any resulting charge.

  5. What GRAIL-related assets does Illumina carry on its balance sheet?

    As of March 31, 2024, Illumina carried goodwill of $1,466 million, non-amortizing in-process research and development of $561 million, and amortizing intangible assets of $2,092 million (net) related to GRAIL, LLC.

04—Continue

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