Note 18. Subsequent Events

Lease Termination and Modification

On July 26, 2024, our wholly-owned subsidiary, MarkForged, Inc., entered into a Lease Termination Agreement (the “Termination Agreement”), with GRE Riverworks, LLC, a Delaware limited liability company (the “Landlord”), in connection with the termination of the Office Lease, dated July 29, 2020, by and between MarkForged, Inc., as tenant, and the Landlord (the “Lease Agreement”). Pursuant to the Termination Agreement, we paid the Landlord a termination fee of $2.75 million on August 1, 2024. Pursuant to the Termination Agreement, the Landlord holds a Letter of Credit in the amount of $0.6 million per the terms and conditions of the Lease Agreement and will initiate the return of the Letter of Credit to us by September 30, 2024.

2024 Cost Reduction Initiative

On August 8, 2024, we announced an approximately $25 million cost reduction initiative that is expected to reduce the Company’s operating expenses to a yearly run rate of approximately $70 million. We expect that most of these cost reduction initiatives will be completed in the second half of fiscal year 2024.