On March 31, 2023, the board of directors of Pardes Biosciences, Inc. approved a reduction in workforce (the Plan) to align operations with the changes in the company's corporate strategy. Under the Plan, due to the company's decision to suspend its clinical development of pomotrelvir and winddown its research and development activities, the Company is reducing headcount by approximately 85% through a reduction in its workforce. The Plan will take place in phases, with the first reduction in force occurring in April 2023, and is anticipated to be completed in the second quarter of 2023.

The total cost related to the Plan is estimated to be approximately $5.7 million, all of which is cash-based expenditures related primarily to personnel expenses such as salaries, one-time severance payments and other benefits. The foregoing estimated amount does not include any non-cash charges associated with stock-based compensation. The Company also expects to incur other costs associated with the winddown of clinical and CMC operations and other contractual costs, the amounts of which are not capable of being estimated in good faith at this time.

The company expects to recognize substantially all of the charges related to the Plan in the second quarter of 2023. As the Plan is implemented, the company's management will re-evaluate the estimated costs and expenses set forth above and may revise the estimated restructuring charge as appropriate, consistent with generally accepted accounting principles. The company may incur other charges, including contract termination costs, and will record these expenses in the appropriate period as they are determined.

These estimates are subject to a number of assumptions, and actual results may differ. The company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the Plan. If the Company subsequently determines that it will incur additional material costs or charges or there are material differences from the amount provided above, the company will file an amendment to this Current Report on Form 8-K (this Current Report) or, to the extent permissible, include such information in its Quarterly Report on Form 10-Q for the three months ended March 31, 2023 to disclose any such material costs, charges or differences.