Adaptimmune Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Restructuring

Restructuring

3 Months Ended

Mar. 31, 2023

Note 14 – Restructuring

On November 8, 2022, the Company announced that in order to extend the Company’s cash runway from early 2024 into early 2025, it was re-focusing the business on core programs and deprioritizing non-core programs and undertaking a restructuring of the Company including a headcount reduction to be completed in the first quarter of 2023.

The redundancy process was completed in the first quarter of 2023 with a reduction of approximately 25% of global headcount. The redundancy packages to be paid to departing staff comprise a combination of contractual termination benefits, relating to payments that arise from terms of employment contracts and statutory redundancy pay, and one-time employee termination benefits that were provided or enhanced specifically for this redundancy process. Due to the structure of the redundancy scheme and the different employment regulations affecting the Company’s U.K. and U.S. employees, some of the expense associated with the one-time employee termination benefits were recognized over the remaining period of employee service to be rendered. Contractual termination benefits and other one-time employee termination benefits were expensed and recognized in the year ended December 31, 2022. All expenses have been recognized in General and administrative expenses in the Statement of Operations.

The amounts incurred in relation to the redundancy programme are as follows:


			One-time
	Contractual		employee		Total
	termination		termination		restructuring
	benefits		benefits		costs
Cumulative amount incurred to December 31, 2022	$	1,171	$	1,114	$	2,285
Amount incurred in the three months ended March 31, 2023		778		925		1,703
Total amount expected to be incurred and cumulative amount incurred to March 31, 2023	$	1,949	$	2,039	$	3,988

The table below is a summary of the changes in the restructuring provision in the consolidated balance sheets in the three months ended March 31, 2023:


			One-time
	Contractual		employee		Total
	termination		termination		restructuring
	benefits		benefits		provision
Provision at January 1, 2023	$	1,171	$	1,114	$	2,285
Costs incurred and charged to General and administrative expenses		670		947		1,617
Costs paid during the period		(1,955)		(1,953)		(3,908)
Adjustments to the liability		108		(22)		86
Effect of foreign exchange rates		6		2		8
Provision at March 31, 2023	$	—	$	88	$	88

The costs incurred during the period includes the element of one-time employee termination benefits that was recognized over the remaining period of employee service. The costs incurred during the period also include an addition to the provision for costs incurred relating to termination benefits paid to the former Chief Commercial Officer, who left employment with the Company in the first quarter of 2023.

No impairment losses were recognised as a result of the restructuring.