What changed in this filing

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Item 9A. Controls and Procedures

2025-02-27 compared with 2024-02-20 · 213 added, 276 removed, 918 unchanged (35% of the section changed)

26 unchanged sentences

Andrew Lo, Ph.

Peter Thiel 56 Director

Hansen, Ph.D.

3 unchanged sentences

Andrew Booth 51 Chief Financial Officer

Tryn Stimart 54 Chief Legal Officer, Chief Compliance Officer & Corporate Secretary

Tryn Stimart 55 Chief Legal Officer, Chief Compliance Officer, Corporate Secretary & Privacy Officer

Michael Hayden, MBCHB (M.D.), Ph.D.

23 unchanged sentences

Montalbano has served as a member of our Board of Directors since November 2020 and is the Chair of our Audit Committee, a member of our Compensation Committee, and a member of our Nominating and Corporate Governance Committee.

Montalbano has served as a member of the Board of Directors of Aritzia Inc., a public fashion company, since July 2019, and has served as a member of the Board of Directors and Audit Committee Chair for the Canada Pension Plan Investment Board, since February 2017.

Montalbano has served as a member of the Board of Directors of Aritzia Inc., a public fashion company, since July 2019, and he has served as a member of the Board of Directors and Audit Committee Chair for the Canada Pension Plan Investment Board, since February 2017.

Prior to his retirement, Mr.

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Lo is the Charles E.

Harris Professor at the MIT Sloan School of Management, director of the MIT Laboratory for Financial Engineering, a principal investigator at the MIT Computer Science and Artificial Intelligence Laboratory, and an affiliated faculty member of the MIT Department of Electrical Engineering and Computer Science, and has served as a professor at the MIT Sloan School of Management and MIT Department of Electrical Engineering and Computer Science since 1988.

He is also an external faculty member of the Santa Fe Institute and a research associate of the National Bureau of Economic Research.

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in Economics from Yale University and a Ph.D.

in Economics from Harvard

Lo’s qualifications to serve on our Board of Directors include his extensive experience as a professor and a leader at two premier educational institutions.

Thiel has served as a member of our Board of Directors since October 2020.

Thiel serves as Chair of our Nominating and Corporate Governance Committee.

He has served as president of Thiel Capital, an investment firm, since 2011 and as a partner of Founders Fund, a venture capital firm, since 2005.

Thiel co-founded PayPal, Inc., an online payment company, where he served as Chief Executive Officer, President, and Chairman of its Board of Directors from 2000 until its acquisition by eBay in 2002.

Thiel currently serves on the Board of Directors of Palantir Technologies Inc.

Thiel holds a B.A.

in Philosophy from Stanford University and a J.D.

from Stanford Law School.

We believe Mr.

Thiel is qualified to serve on our Board of Directors due to his leadership and experience as an entrepreneur and venture capitalist.

in Economics from

Harvard University.

Lo’s qualifications to serve on our Board of Directors include his extensive experience as a professor specializing in healthcare finance and a leader at two premier educational institutions.

Hansen, Ph.D.

25 unchanged sentences

Andrew Booth.

Booth has served as our Chief Financial Officer since August 2019, and previously served as a member of our Board of Directors from June 2016 to August 2019.

Booth has served as our Chief Financial Officer since August 2019, and he previously served as a member of our Board of Directors from June 2016 to August 2019.

From February 2017 to July 2019, Mr.

4 unchanged sentences

Booth has also previously served as a member of the Board of Directors of various private companies in the life sciences sector.

Booth holds an MBA from INSEAD, France, and a B.A.Sc.

Booth holds an MBA from INSEAD, and a B.A.Sc.

in Engineering Physics from the University of British Columbia.

Tryn Stimart.

Stimart has served as our Chief Legal Officer and Corporate Secretary since August 2019 and our Chief Compliance Officer since December 2020.

Stimart has served as our Chief Legal Officer and Corporate Secretary since August 2019, our Chief Compliance Officer since December 2020, and our Privacy Officer since 2023.

Prior to joining AbCellera, Mr.

10 unchanged sentences

There are no material legal proceedings to which any of our directors is a party adverse to us or any of our subsidiaries or in which any such person has a material interest adverse to us or our subsidiaries.

The remaining information required by this item will be included in our definitive proxy statement with respect to our 2025 Annual Meeting of Shareholders to be filed with the SEC and is incorporated herein by reference.

Executive Compensation.

44 unchanged sentences

333-250838) filed on December 7, 2020).

Sixth Amended and Restated Stock Option Plan, and form of award agreement thereunder (incorporated by reference to Exhibit 10.12 of the Registrant’s Registration Statement on Form S-1, as amended (File No.

333-250838) filed on December 7, 2020).

2020 Share Option and Incentive Plan and forms of award agreements thereunder (incorporated by reference to Exhibit 10.13 of the Registrant’s Registration Statement on Form S-1, as amended (File No.

333-250838) filed on December 7, 2020).

Seventh Amended and Restated Stock Option Plan, and form of award agreement thereunder (incorporated by reference to Exhibit 10.1 of the Registrant’s Curre nt Report on Form 10-Q , as amended (File No.

001-39781 ) filed on August 6 , 202 4 ).

2020 Share Option and Incentive Plan and forms of award agreements thereunder (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 10-Q, as amended (File No.

001-39781) filed on August 6, 2024).

Senior Executive Cash Incentive Bonus Plan (incorporated by reference to Exhibit 10.14 of the Registrant’s Registration Statement on Form S-1, as amended (File No.

6 unchanged sentences

333-250838) filed on December 7, 2020).

Strategic Innovation Fund Agreement between the Registrant and his Majesty the King in right of Canada as represented by the Minister of Industry, dated May 23, 2023.

Contribution Agreement between the Registrant and his Majesty the King in right of the Province of British Columbia, as represented by the Ministry of Jobs, Economic Development and Innovation, dated May 23, 2023 (incorporated by reference to Exhibit 10.17 o f the Registrant's Annual Report on F o r m 10-K (File No.

001-39781) filed on February 20, 2024) .

Strategic Innovation Fund Agreement between the Registrant and his Majesty the King in right of Canada as represented by the Minister of Industry, dated May 23, 2023 (incorporated by reference to Exhibit 10.1 8 o f the Registrant's Annual Report on F o r m 10-K (File No.

001-39781) filed on February 20, 2024) .

Lease between Dayhu Investments (4th and Columbia) Ltd.

1 unchanged sentence

001-39781) filed on November 2, 2023).

Insider Trading Compliance Policy .

Subsidiaries of the Registrant.

7 unchanged sentences

97 AbCellera Biologics Inc.

Compensation Clawback Policy.

Compensation Clawback Policy (incorporated by reference to Exhibit 97 of the Registrant's Annual Report on F o r m 10-K (File No.

001-39781) filed on February 20, 2024).

101.INS* Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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February 27, 2025

/s/ Véronique Lecault Chief Operating Officer and Director February 20, 2024

/s/ Véronique Lecault Chief Technology Officer and Director

February 27, 2025

Véronique Lecault, Ph.D.

4 unchanged sentences

Montalbano Director February 27, 2025

/s/ Peter Thiel Director February 20, 2024

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

29 unchanged sentences

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Identification of distinct performance obligations

As discussed in Note 3 to the consolidated financial statements, the Company identifies and assesses the goods and services promised within a contract to evaluate which promises are distinct from each other.

Promises that are not distinct at contract inception are combined into a single performance obligation.

For the year ended December 31, 2023, the Company recognized research revenues of $35,556 thousand.

We identified the evaluation of the distinct performance obligations identified by the Company as a critical audit matter.

Complex auditor judgment was required in evaluating the Company’s identification of distinct performance obligations, including evaluating the rights and obligations described in the contracts, their intended benefit to the customer, and the level of interdependence that exists between the promised goods and services in the contracts.

Evaluation of revenue recognition for certain research and development services

As discussed in Note 3 to the consolidated financial statements, the Company recognizes revenue using output methods to measure the progress toward satisfaction of performance obligations that are satisfied over time.

Where there is not a directly observable output to measure progress, an input which serves as a reasonable proxy for measuring progress is used.

For the year ended December 31, 2024, the Company recognized research fees of $26,284 thousand, of which a portion relates to partially satisfied performance obligations where an input was used to measure progress.

We identified the evaluation of revenue recognition for certain research and development services as a critical audit matter.

The Company’s estimate of the amount of revenues to recognize for partially satisfied performance obligations, where an input was used to measure progress, involved significant estimation.

Subjective auditor judgment was required to evaluate the Company’s estimate of the percentage of completion of such performance obligations, where they had been only partially satisfied by December 31, 2024.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of an internal control in the Company’s revenue recognition process related to the Company’s identification of distinct performance obligations within a contract.

We read a selection of new or amended revenue contracts to gain an understanding of the contractual terms and conditions and the commitments being made in the contracts.

We conducted interviews with the Company’s business development personnel to understand and to evaluate the nature of the commitments made to customers.

We evaluated the Company’s accounting analysis and assessed the identification of distinct performance obligations by comparing them to underlying documentation.

Chartered Professional Accountants

We evaluated the design and tested the operating effectiveness of an internal control related to the Company’s estimate of the percentage of completion of partially satisfied performance obligations.

For a selection of partially satisfied performance obligations, we (1) read the associated contracts with customers to gain an understanding of the nature of the work to be performed and to evaluate the Company’s method for measuring progress, (2) tested the Company’s estimate of the percentage of completion by comparing the Company’s prior period estimates to current period actual results to assess the Company’s ability to estimate accurately, and (3) inspected underlying documentation and compared them to the Company’s inputs and assumptions related to progress of work performed to date and the estimate of the remaining work required to satisfy the performance obligation.

We have served as the Company's auditor since 2017.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Chartered Professional Accountants

Vancouver, Canada

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Goodwill 47,806 47,806

Investments in and loans to equity accounted investees 72,522 65,938

Investments in equity accounted investees 65,938 82,297

Other long-term assets 94,244 96,538

3 unchanged sentences

Current liabilities:

Accounts payable and other liabilities $ 52,497 $ 49,580

Accounts payable and other current liabilities $ 49,580 $ 55,004

Contingent consideration payable 50,475 8,087

17 unchanged sentences

Additional paid-in capital 121,052 166,361

Accumulated other comprehensive income (loss) ( 1,391 ) ( 1,720 )

Accumulated other comprehensive loss ( 1,720 ) ( 4,378 )

Accumulated earnings 279,787 116,930

27 unchanged sentences

Grants and incentives ( 10,554 ) ( 14,155 ) ( 13,620 )

Other 6,080 4,045 ( 6,776 )

Other (Note 15) 4,045 ( 6,776 ) ( 62,278 )

Total other income ( 22,588 ) ( 63,178 ) ( 114,371 )

4 unchanged sentences

Comprehensive income (loss) $ 156,848 $ ( 146,727 ) $ ( 165,515 )

Net earnings (loss) per share attributable to common shareholders

Net earnings (loss) per share

Basic $ 0.56 $ ( 0.51 ) $ ( 0.55 )

19 unchanged sentences

Stock-based compensation expense – – 49,481 – – 49,481

Reclassification of liability classified options – – 5,675 – – 5,675

Foreign currency translation adjustment – – – – ( 1,671 ) ( 1,671 )

4 unchanged sentences

Foreign currency translation adjustment – – – – ( 329 ) ( 329 )

Net earnings – – – 158,519 – 158,519

Net loss – – – ( 146,398 ) – ( 146,398 )

Balances as of December 31, 2023 290,824,970 $ 753,199 $ 121,052 $ 279,787 $ ( 1,720 ) $ 1,152,318

16 unchanged sentences

Stock-based compensation 49,481 64,183 67,581

Deferred tax (expense) recovery ( 2,018 ) ( 2,114 ) 1,960

Change in fair value of contingent consideration and investments 2,284 3,091 ( 8,018 )

Fair value (gain) loss on contingent consideration and investments 3,091 ( 8,018 ) ( 64,727 )

Other 3,342 2,237 ( 19,708 )

3 unchanged sentences

Income taxes (payable) receivable ( 88,609 ) 30,464 6,651

Accounts payable and other liabilities ( 3,237 ) ( 2,094 ) ( 15,104 )

Accounts payable and accrued liabilities ( 2,094 ) ( 15,104 ) 10,635

Deferred revenue 6,183 ( 13,976 ) ( 7,931 )

8 unchanged sentences

Receipt of grant funding 16,434 25,311 35,708

Acquisitions ( 11,457 ) — —

Long-term investments and other assets ( 17,534 ) ( 17,369 ) ( 44,649 )

Investment in and loans to equity accounted investees ( 25,679 ) ( 13,690 ) ( 19,626 )

Net cash used in investing activities ( 332,247 ) ( 352,625 ) ( 221,108 )

Long-term investments and other assets ( 17,369 ) ( 44,649 ) 10,927

Net cash provided by (used in) investing activities ( 352,625 ) ( 221,108 ) 121,409

Cash flows from financing activities:

Payment of liability for in-licensing agreement, contingent consideration, and other ( 9,373 ) ( 4,383 ) ( 1,234 )

Payment of liability for in-licensing agreement and other ( 4,383 ) ( 1,234 ) ( 729 )

Proceeds from long-term liabilities and exercise of stock options 2,755 11,590 13,498

1 unchanged sentence

Effect of exchange rate changes on cash and cash equivalents ( 9,599 ) 589 ( 2,617 )

Decrease in cash and cash equivalents ( 92,974 ) ( 86,492 ) ( 254,040 )

Increase (decrease) in cash and cash equivalents ( 86,492 ) ( 254,040 ) 23,005

Cash and cash equivalents and restricted cash, beginning of period 501,142 414,650 160,610

11 unchanged sentences

Nature of operations

AbCellera Biologics Inc.’s (the “Company”) mission is to bring better antibody drugs to patients faster, solve long-standing problems, and transform how antibody drugs are discovered.

The Company aims to bring antibody therapeutics from target to clinic by combining expertise, technologies, and infrastructure to build an engine for antibody drug discovery and development.

The Company uses the engine to both work with partners to build a large and diversified portfolio of royalty (and equivalent) stakes in future antibody drugs and to develop its own pipeline of future antibody drugs.

AbCellera Biologics Inc.’s (the “Company”) mission is to bring better antibody drugs to patients faster, solve long-standing problems, and transform how antibody drugs are discovered and developed.

The Company aims to bring antibody therapeutics from target to clinic by combining expertise, technologies, and infrastructure to build our capabilities for antibody drug discovery and development.

The Company uses its capabilities to develop its own pipeline of future antibody drugs and work with partners to build a large and diversified portfolio of royalty (and equivalent) stakes in future antibody drugs.

The Company partners with companies of all sizes - from innovative biotechnology companies to leading pharmaceutical companies - propelling programs to the clinic, together .

3 unchanged sentences

All intercompany transactions and balances have been eliminated.

All amounts expressed in the consolidated financial statements of the Company and the accompanying notes thereto are expressed in thousands of U.S.

All amounts expressed in these consolidated financial statements of the Company and the accompanying notes thereto are expressed in thousands of U.S.

dollars, except for share and per share data and where otherwise indicated.

11 unchanged sentences

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Areas of significant estimates include, but are not limited to, revenue recognition including estimated timing of completion of performance obligations and determining whether an option for additional goods or services represents a material right, the fair value of acquired intangible assets, and contingent consideration payable, and the estimates of stock-based compensation awards.

Areas of significant estimates include, but are not limited to, revenue recognition including estimated timing of completion of performance obligations and determining whether an option for additional goods or services represents a material right, the impairment assessment of intangible assets and goodwill, and the fair value of contingent consideration payable, and the estimates associated with stock-based compensation awards.

The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances.

5 unchanged sentences

The terms of our arrangements generally include the payment of one or more of the following:

(i) non-refundable, up-front fixed fees, (ii) fixed fees for ‘discovery’ research support, (iii) fixed technology assignment fees, (iv) fixed payments based on the achievement of specified development and/or commercial milestones, (v) royalties on net sales by the customer of licensed products, and in some cases, (vi) early termination penalties, and (vii) reimbursements for costs incurred to fulfill the contract with the customer at cost or at cost plus an agreed upon mark-up.

the customer of licensed products, and in some cases, (vi) early termination penalties, and (vii) reimbursements for costs incurred to fulfill the contract with the customer at cost or at cost plus an agreed upon mark-up.

Promises that are not distinct at contract inception are combined into a single performance obligation.

5 unchanged sentences

The Company utilizes either the expected value method or the most likely amount method to estimate the amount of variable consideration to include in the transaction price, as most appropriate in the circumstances.

With respect to development and commercial milestone payments, at the inception of the arrangement, the Company evaluates whether the associated event is considered probable of achievement and estimate the amount to be included in the transaction price using the most likely amount method.

With respect to development and commercial milestone payments, at the inception of the arrangement, the Company evaluates whether the associated event is considered probable of achievement and estimates the amount to be included in the transaction price using the most likely amount method.

In determining the transaction price the Company constrains the transaction price for variable consideration to limit its inclusion so that it only includes the amount for which it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

6 unchanged sentences

For the licenses of our intellectual property the Company recognizes revenue from non-refundable, up-front fees when the license is transferred to the customer and the customer is able to use and benefit from the license.

Substantially all license revenue for the year ended December 31, 2021, related to the transgenic mouse platform.

Collaborative arrangements

4 unchanged sentences

The Company considers the nature and contractual terms of arrangements and assesses whether an arrangement involves a joint operating activity pursuant to which the Company is an active participant and is exposed to significant risks and rewards dependent on the commercial success of the activity as described under ASC 808, Collaborative Arrangements ( ASC 808).

For arrangements determined to be within the scope of ASC 808 where a collaborative partner is

not a customer for certain research and development activities, the Company accounts for payments received for the reimbursement of research and development costs as a contra-expense in the period such expenses are incurred.

For arrangements determined to be within the scope of ASC 808 where a collaborative partner is not a customer for certain research and development activities, the Company accounts for payments received for the reimbursement of research and development costs as a contra-expense in the period such expenses are incurred.

If payments from the collaborative partner to the Company represent consideration from a customer in exchange for distinct goods and services provided, then the Company accounts for those payments within the scope of ASC 606, Revenue from Contracts with Customers (ASC 606) .

The Company applied ASC 606 to all arrangements to date.

The Company applied ASC 606 to all collaborative arrangements to date.

Segmented and enterprise-wide information

The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions.

The Company’s focus is on the discovery and development of antibodies.

In 2021, $ 353.4 million and $ 21.8 million of revenues originated from services in Canada and the U.S., respectively, and in 2022, $ 484.2 million and $ 1.2 million of revenues originated from services in Canada and the U.S., respectively.

The Company’s focus is on the discovery and development of antibody drugs, and manages its business as one reportable and operating segment.

Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by the chief operating decision maker (CODM) in deciding how to allocate resources and assess performance.

The Company’s CODM is the Chief Executive Officer, who reviews consolidated financial information on a company-wide basis for purposes of allocating resources and assessing financial performance.

The accounting policies of the segment are the same as those described in Note 3.

The CODM uses consolidated net earnings (loss), as reported on the consolidated statements of income (loss) and comprehensive income (loss), to evaluate the earnings (loss) generated from segment assets in deciding the resources to be allocated towards the Company’s overall portfolio of internal and partner-initiated programs.

Consolidated net earnings (loss) are also used to monitor budget versus actual results in assessing performance of the Company and in establishing, in part, management compensation.

The measure of segment assets is reported on the consolidated balance sheets as total assets.

In 2022, $ 484.2 million and $ 1.2 million of revenues originated from services performed in Canada and the U.S., respectively, and in 2023, $ 36.0 million and $ 2.0 million of revenues originated from services in Canada and the U.S., respectively.

In 2024, $ 26.2 million and $ 2.7 million of revenues originated from services in Canada and the U.S., respectively.

Of the Company’s long-term assets at December 31, 2022, $ 183.7 million was in the U.S., $ 300.2 million in Canada, and $ 31.5 million in other foreign countries.

Of the Company’s long-term assets at December 31, 2023, $ 161.7 million was in the U.S., $ 429.7 million in Canada, and $ 24.7 million in other foreign countries.

Of the Company’s long-term assets at December 31, 2023, $ 429.7 million were located in Canada, $ 161.7 million in the U.S., and $ 24.7 million in other foreign countries.

Of the Company’s long-term assets at December 31, 2024, $ 505.1 million were located in Canada, $ 85.7 million in the U.S., and $ 18.4 million in other foreign countries.

In 2024, the Company's additions to property and equipment, contributions to joint ventures, and research and development expenses incurred in Canada were $ 69.1 million, $ 19.6 million, and $ 137.3 million, respectively, and $ 1.0 million, nil , and $ 30.0 million in other foreign countries.

14 unchanged sentences

Foreign currency gains and losses are recognized in the consolidated statements of income (loss) and comprehensive income (loss).

The functional currency of the Dayhu JV and Beedie JV, our equity method investments, is Canadian dollars and are translated into US dollars using the period-end exchange rate for assets and liabilities and the average exchange rates during the period for revenues, expenses, gains and losses.

The functional currency of the Dayhu JV and Beedie JV, our equity method investments, is Canadian dollars and are translated into U.S.

dollars using the period-end exchange rate for assets and liabilities and the average exchange rates during the period for revenues, expenses, gains and losses.

Foreign exchange gains or losses arising from the translation of

9 unchanged sentences

The Company’s marketable securities consist of U.S.

government agency securities, certificates of deposit, commercial paper, non-U.S.

government agency securities, and asset-backed securities.

The Company has classified and accounted for these marketable securities as held-for-trading and they are reported at fair value with $ 0.5 million and $ 1.7 million of unrealized fair value losses and $ 2.1 million of unrealized fair value gains recorded as a component of other on the consolidated statements of income (loss) and comprehensive income (loss) for the years ended December 31, 2021, 2022, and 2023, respectively.

government agency securities, certificates of deposit, commercial paper, corporate bonds, and asset-backed securities.

The Company has classified and accounted for these marketable securities as held-for-trading and they are reported at fair value with $ 1.7 million of unrealized fair value losses for the year ended December 31, 2022, and $ 2.1 million and $ 0.8 million of unrealized fair value gains for the years ended December 31, 2023, and 2024, respectively, recorded as a component of other on the consolidated statements of income (loss) and comprehensive income (loss).

Non-marketable securities

1 unchanged sentence

Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

Non-marketable securities of $ 18.5 million and $ 32.3 million at December 31, 2022 and December 31, 2023 are included as part of other long-term assets on the consolidated balance sheets.

Adjustments are determined primarily based on a market approach as of the transaction date and $ 1.7 million , nil , and $ 1.8 million of fair value gains were recognized within other on the consolidated statements of income (loss) and comprehensive income (loss) for the years ended December 31, 2021, 2022, and 2023, respectively.

Non-marketable securities of $ 32.3 million at December 31, 2023 and December 31, 2024 are included as part of other long-term assets on the consolidated balance sheets.

Adjustments are determined primarily based on a market approach as of the transaction date.

For the years ended December 31, 2022, 2023, and 2024, nil , $ 1.8 million , and $ 16.6 million fair value gains were recognized within other on the consolidated statements of income (loss) and comprehensive income (loss), respectively.

The fair value gain recognized in 2024 was due to the disposal of a non-marketable security.

Accounts receivable

The Company has trade receivables which are recorded at the invoiced amount and generally do not bear interest.

The Company evaluates the collectability of accounts receivable on a regular basis based on economic assessment of market conditions and review of customer financial history.

There was no allowance for doubtful accounts recorded as of December 31, 2021, 2022, and 2023.

The Company has trade receivables which are recorded at the invoiced amount.

The Company evaluates the collectability of accounts receivable on a regular basis based on an economic assessment of market conditions and review of customer financial history.

The expected credit loss provision recorded as of December 31, 2022, 2023, and 2024 was nil .

Property and equipment

2 unchanged sentences

Excluding land and assets not yet placed into service, p roperty and equipment are amortized using the straight-line method over the estimated useful lives of the property and equipment as follows:

Computer equipment 3 years

Laboratory equipment 5 - 10 years

Office furniture and equipment 5 years

Equipment 3 - 10 years

Leasehold improvements Shorter of lease term or estimated useful life

Estimated useful lives are periodically assessed to determine if changes are appropriate.

When assets are retired or otherwise disposed of, the cost of these assets and related accumulated depreciation or amortization are removed from the

accounts and any resulting gains or losses are included in loss from operations in the period of disposal.

When assets are retired or otherwise disposed of, the cost of these assets and related accumulated depreciation or amortization are removed from the accounts and any resulting gains or losses are included in loss from operations in the period of disposal.

Costs for capital assets not yet placed into service are capitalized as construction-in-progress and depreciated once placed into service.

3 unchanged sentences

No patent or intellectual property costs have been capitalized to date.

In process research and development (IPR&D) will be amortized on completion of IPR&D activities.

Acquired IPR&D represent the fair value assigned to research and development assets that have not reached technological feasibility.

Acquired in process research and development (IPR&D) represents the fair value assigned to research and development assets that have not reached technological feasibility.

IPR&D is classified as an indefinite-lived intangible asset and is not amortized.

4 unchanged sentences

Technology 3 - 20 years

Impairment of long-lived assets

The Company reviews the useful life for the intangible assets on an annual basis considering the current facts and circumstances available and may change due to legal, regulatory or contractual provisions that may limit the useful life, the effects of obsolescence, competition and other relevant economic factors.

This review resulted in a re-assessment of the useful life for certain technology assets.

The impact of the change in useful life in 2024 resulted in an increase of amortization by $ 9.4 million, and for 2025 to 2029, the impact to amortization expense will result in a reduction of $ 0.6 million per year.

Impairment of long-lived assets and goodwill

The Company assesses the recoverability of its long-lived assets, including property and equipment and intangible assets subject to amortization, for indicators of impairment on each reporting date.

If events or changes in circumstances indicate impairment, the Company measures recoverability by a comparison of the asset’s carrying amount to the estimated undiscounted future cash flows expected to be generated by the asset.

If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset.

When quoted market prices are not available, the Company uses the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset as an estimate of fair value.

No indicators of impairment were identified at the respective balance sheet dates.

If events or changes in circumstances indicate impairment, the Company measures recoverability by a comparison of the asset group's carrying amount to the estimated undiscounted future cash flows expected to be generated by the asset group.

If the carrying amount of the asset group exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds the fair value of the asset group.

No indicators of impairment of long-lived assets were identified at the respective balance sheet dates.

Indefinite-lived intangible assets are tested annually for impairment as of October 1, and between annual tests if indicators of potential impairment exist.

4 unchanged sentences

An impairment loss is recognized as the difference between the indefinite-lived intangible asset’s carrying amount and its fair value.

Goodwill is evaluated for impairment on an annual basis as of October 1, or more frequently if an indicator of impairment is present.

We have one operating segment and reporting unit, therefore our review of goodwill impairment is performed at the entity-wide level.

As part of the impairment evaluation, the Company may elect to perform an assessment of qualitative factors.

If this qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit that includes the goodwill is less than its carrying value, then a quantitative impairment test would be prepared to compare this fair value to the carrying value and record an impairment charge if the carrying value exceeds the fair value.

As of October 1, 2024, the Company updated its quantitative assessment for its annual impairment test of goodwill and concluded that the fair value of the reporting unit was more than its carrying value.

The Company further concluded there were no impairment indicators related to goodwill as at December 31, 2023 and 2024.

As at December 31, 2023, and December 31, 2024, the goodwill balance was $ 47.8 million.

There were no additions to goodwill in 2023 or 2024 and accumulated impairment as at December 31, 2023 and December 31, 2024 was nil .

The lease term includes all periods covered by renewal and termination options where the Company is reasonably certain to exercise the renewal options or not to exercise the termination options.

8 unchanged sentences

Research and development costs are expensed in the period incurred.

These costs related to spending for partner projects in addition to internal platform development programs and include required materials, salaries and benefits including stock-based compensation, and service contracts.

These costs are related to spending for internal program development and partner projects and include required materials, salaries and benefits including stock-based compensation, and third-party research and development service contracts.

These costs exclude depreciation and amortization.

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Income tax credit (“ITC”) policy

The Company earns income tax credits (ITCs) in jurisdictions in which it incurs eligible research and development expenditures.

The Company earns income tax credits in jurisdictions in which it incurs eligible research and development expenditures.

The Company uses the flow-through method to account for ITCs.

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For equity classified awards, a corresponding increase in additional paid-in capital is recorded when stock-based compensation is recognized.

When stock options are exercised, share capital is credited by the sum of the consideration received and the related portion of the stock-based compensation previously recorded in additional paid-in capital.

When stock options are exercised, share capital is credited by the sum of the consideration received and the related portion of the stock-

based compensation previously recorded in additional paid-in capital.

The effects of forfeitures of options and share awards are accounted for as they occur.

Awards with an exercise price which is not denominated in:

(a) the currency of a market in which a substantial portion of the Company’s equity securities traded, (b) the currency in which the individual’s pay is denominated, or (c) the Company’s functional currency, are classified as liabilities.

Liability classified awards are initially measured using their grant date fair value and are subsequently re-measured to fair value at each balance sheet date until exercised or cancelled, with changes in fair value recognized as compensation cost for the period.

As of December 31, 2022, and 2023, there were no liability classified options outstanding.

Business combinations and goodwill

Business combinations are accounted for using the acquisition method.

The fair value of total purchase consideration is allocated to the fair values of identifiable tangible and intangible assets acquired and liabilities assumed, with the remaining amount being classified as goodwill.

All assets, liabilities and contingent liabilities acquired or assumed in a business combination are recorded at their fair values at the date of acquisition.

If the Company’s interest in the fair value of the acquiree’s net identifiable assets exceeds the cost of the acquisition, the excess is recognized in earnings or loss immediately.

Transaction costs that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred.

Goodwill is evaluated for impairment on an annual basis as of October 1, or more frequently if an indicator of impairment is present.

As part of the impairment evaluation, the Company may elect to perform an assessment of qualitative factors.

As of October 1, 2023, the Company performed a qualitative assessment for its annual impairment test of goodwill after concluding that it was not more likely than not that the fair value of the reporting unit was less than its carrying value.

Consequently, the quantitative impairment test was not required.

The Company concluded that there were no impairment indicators related to goodwill as at December 31, 2022 and 2023.

Equity method investments

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Net earnings (loss) per share

Basic net earnings (loss) per share attributable to common shareholders is computed by dividing the net earnings attributable to common shareholders by the weighted-average number of common shares outstanding for the period.

Diluted net earnings attributable to common shareholders is computed by adjusting net earnings attributable to common shareholders to reallocate undistributed earnings based on the potential impact of dilutive securities.

Diluted net earnings (loss) per share attributable to common shareholders is computed by dividing the diluted net earnings attributable to common shareholders by the weighted-average number of common shares outstanding for the period, including potential dilutive common shares.

Basic net earnings (loss) per share is computed by dividing the net earnings (loss) in the period by the weighted-average number of common shares outstanding for the period.

Diluted net earnings per share is computed by dividing the net earnings in the period by the weighted-average number of common shares outstanding for the period, including potential dilutive common shares.

Potential dilutive common shares are excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect.

For purpose of this calculation, outstanding stock options and restricted share units (RSUs) are considered potential dilutive common shares.

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Recent accounting pronouncements adopted

There was no adoption of any new accounting standards that had a significant impact on the consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” which updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance.

This ASU is applicable to all public entities, including public entities that have a single reportable segment and requires disclosure of the title and position of the individual identified as the Chief Operating Decision Maker (“CODM”) and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

This standard has been applied and does not have a material effect on the Company's financial statements.

Recent accounting pronouncements not yet adopted

The Company has reviewed recent accounting pronouncements and concluded that they are either not applicable to the Company or that no material impact is expected in the consolidated financial statements as a result of future adoption.

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Disclosures about Expenses.

This ASU enhances the transparency of expense information presented in a company's financial statements by requiring disaggregation of certain expense categories and providing additional disclosures about the nature of these expenses.

The amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, including interim periods within those fiscal years.

The Company is currently evaluating the impact of ASU 2024-03 on its financial statements.

While the Company expects the adoption of this ASU could result in increased disclosures related to its expenses, it does not anticipate the amendments will have a material impact on its consolidated financial statements.

Net earnings (loss) per share

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Net earnings (loss) per share - diluted $ 0.50 $ ( 0.51 ) $ ( 0.55 )

The Company’s potentially dilutive securities, which include stock options and restricted share units (“RSUs”), have been excluded from the computation of diluted net loss per share for the year ended December 31, 2023 as the effect would be to reduce the net loss per share.

Therefore, the weighted-average number of common shares outstanding for the year ended December 31, 2023 used to calculate both basic and diluted net loss per share attributable to common shareholders is the same.

The Company excluded 908,409 , 11,824,006 , and 50,087,088 potential common shares for the years ended December 31, 2021, 2022, and 2023, respectively, from the computation of diluted net earnings (loss) per share for the periods indicated because including them would have had an anti-dilutive effect.

The Company’s potentially dilutive securities, which include stock options and restricted share units (“RSUs”), have been excluded from the computation of diluted net loss per share for the years ended December 31, 2023 and December 31, 2024 as the effect would be to reduce the net loss per share.

Therefore, the weighted-average number of common shares outstanding for the years ended December 31, 2023 and December 31, 2024 used to calculate both basic and diluted net loss per share is the same.

The Company excluded 11,824,006 , 50,087,088 , and 58,251,724 potential common shares for the years ended December 31, 2022, 2023, and 2024, respectively, from the computation of diluted net earnings (loss) per share because including them would have had an anti-dilutive effect.

Other current assets

Other current assets consisted of the following:

Taxes receivable $ 33,792 $ 26,534

Prepaid expenses and other 22,018 8,626

Materials and supplies 1,532 1,107

Loans receivable from JV partner (Note 8) – 31,980

Total other current assets $ 55,810 $ 67,140

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Property and equipment, net consisted of the following:

Computers $ 8,303 $ 3,517

Land $ 53,405 $ 53,405

Building 43,947 52,913

Laboratory equipment 41,256 70,350

Equipment 73,867 84,288

Leasehold improvements 73,944 122,892

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Property and equipment, net $ 287,696 $ 340,429

As of December 31, 2022 and December 31, 2023, property and equipment includes leasehold improvements and construction in progress in the amount of $ 25.6 million and $ 91.0 million, respectively, and construction deposits of nil and $ 13.7 million, respectively, that have not commenced depreciation.

As of December 31, 2023 and December 31, 2024, property and equipment includes leasehold improvements and construction in progress in the amount of $ 91.0 million and $ 103.2 million, respectively, and construction deposits of $ 13.7

million and $ 14.4 million, respectively, that have not commenced depreciation.

Depreciation expense on property and equipment for the years ended December 31, 2022, 2023 and 2024 was $ 9.0 million, $ 12.8 million and $ 12.5 million, respectively.

Intangible assets and goodwill

Intangible assets

Intangible Assets

Intangible assets consisted of the following:

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Amortization expense related to intangible assets for the years ended December 31, 2022, 2023 and 2024 was $ 10.5 million, $ 11.6 million and $ 14.3 million, respectively.

Depreciation and amortization expense is reflected within Depreciation, amortization, and impairment expense on the consolidated statements of income (loss) and comprehensive income (loss).

For the year ended December 31, 2022, the Company recorded a full impairment charge of the carrying value of $ 8.4 million (or $ 6.3 million, net of deferred income tax) associated with one of the next-generation transgenic humanized mice that was acquired through the 2020 Trianni acquisition.

The impairment was a result of the discontinuance of the validation and development of this specific rodent line.

Impairment expense is reflected within Depreciation, amortization, and impairment expense on the consolidated statements of income (loss) and comprehensive income (loss).

The Company concluded that there were no impairment indicators from the remaining intangible assets.

For the year ended December 31, 2024, the Company recorded a full impairment charge of the carrying value of $ 32.0 million (or $ 23.3 million, net of deferred income tax) associated with the IPR&D acquired through the 2021 acquisition of TetraGenetics.

Details of a corresponding impact reducing the contingent consideration associated with the TetraGenetics acquisition are disclosed in Note 15.

For the years ended December 31, 2022 and 2024, the Company recorded full impairment charges of the carrying value of $ 8.4 million (or $ 6.3 million, net of deferred income tax) and $ 32.0 million (or $ 23.3 million, net of deferred income tax), respectively, associated with the IPR&D acquired through the 2020 acquisition of Trianni.

The impairment charges were due to our ongoing internal program prioritization which also resulted in the discontinuance of the development of next-generation transgenic mice.

Depreciation and amortization expense and impairment charges are reflected within depreciation, amortization, and impairment expense on the consolidated statements of income (loss) and comprehensive income (loss).

Amortization expense on intangible assets subject to amortization is estimated to be as follows for each of the next five years ended December 31 :

As at December 31, 2022, and December 31, 2023, the goodwill balance was $ 47.8 million.

There were no additions to Goodwill in 2022 or 2023 and accumulated impairment as at December 31, 2022 and December 31, 2023 was nil .

Investments in and loans to equity accounted investees, and other long-term assets

The Company has entered into two separate 50 % joint ventures, Dayhu JV and Beedie JV, as part of the construction of future office and laboratory headquarters.

The Company has recorded nil , $ 0.9 million, and $ 1.8 million of proportionate income with respect to the Dayhu JV for the years ended December 31, 2021, 2022, and 2023, respectively.

Investments in equity accounted investees, and other assets

The Company has entered into two separate 50 % joint ventures, Dayhu JV and Beedie JV, as part of the construction of new office and laboratory headquarters.

The Company has recorded $ 0.9 million, $ 1.8 million, and $ 1.7 million of proportionate income with respect to the Dayhu JV for the years ended December 31, 2022 , 2023 , and 2024, respectively.

During 2020, the Company entered into a joint venture with Dayhu ("Dayhu JV").

As of December 31, 2022 and December 31, 2023, the equity investment balance was $ 18.7 million and $ 42.1 million, respectively, of which substantially all the assets in the Dayhu JV is comprised of property and equipment.

Additionally, as of December 31, 2022 and December 31, 2023, the Company recorded a right-of-use asset of $ 47.4 million and $ 49.1 million, respectively, and an operating lease liability of $ 47.2 million and $ 50.4 million, respectively, associated with the Dayhu JV.

In the years ended December 31, 2021, 2022 and 2023, the Company incurred lease expense of nil , $ 2.2 million, and $ 5.3 million, respectively, to the Dayhu JV included within operating expenses.

In March, 2021, th e Company made a commitment of up to CAD $ 82.7 million ($ 62.5 million at December 31, 2023) to the Dayhu JV ("Dayhu JV Loan") to fund the construction at a rate referenced to a Canadian bank prime rate adjusted for applicable margins as defined in the agreement, and repayment on the earlier of thirty months from the date of initial advancement and September 1, 2023, or upon the trigger of certain liquidity events as defined in the agreement.

The loan is secured by the underlying land and future assets of the Dayhu JV.

At December 31, 2022, and December 31, 2023, the outstanding related party loan balance was $ 38.1 million and nil , respectively, to the Dayhu JV and is included in investment in and loans to equity accounted investees.

In July 2022, the Company entered into an agreement of up to CAD $ 46.0 million ( $ 34.8 million at December 31, 2023) with Dayhu ("New Dayhu Loan") to replace Dayhu’s portion of the outstanding Dayhu JV Loan balance as at January 1, 2023, at a rate referenced to a Canadian bank prime rate adjusted for applicable margins as defined in the agreement.

The agreement has a maturity of December 31, 2025, with a call provision, callable by the Company after September 30, 2023, including customary make whole provisions.

As of December 31, 2023 and December 31, 2024, the equity investment balance was $ 42.1 million and $ 41.0 million, respectively, of which substantially all the assets in the Dayhu JV are comprised of property and equipment.

As of December 31, 2023 and December 31, 2024, the Company recorded a right-of-use asset of $ 49.1 million and $ 48.5 million, respectively, and an operating lease liability of $ 50.4 million and $ 46.3 million, respectively, associated with an office lease with the Dayhu JV.

In the years ended December 31, 2022 , 2023 and 2024, the Company incurred lease expense of $ 2.2 million, $ 5.3 million, and $ 5.3 million, respectively, to the Dayhu JV included within operating expenses.

In March 2021, th e Company made a commitment of up to CAD $ 82.7 million ($ 57.5 million at December 31, 2024) to the Dayhu JV ("Dayhu JV Loan") to fund the construction of the new office and laboratory headquarters.

In January 2023, the Company issued CAD $ 46.0 million ($ 32.0 million at December 31, 2024) to Dayhu (New Dayhu Loan), which was used to repay, in part, Dayhu’s 50 % portion of the original loan.

The New Dayhu Loan is at a rate referenced to a Canadian bank prime rate adjusted for applicable margins as defined in the agreement and has a maturity of December 31, 2025, with a call provision, callable by the Company after September 30, 2023, including customary make whole provisions.

The loan is secured by the underlying land and existing and future assets of the Dayhu JV.

In January 2023, the Company issued CAD $ 46.0 million ($ 34.8 million at December 31, 2023) to Dayhu from the New Dayhu loan, which was used to repay, in part, Dayhu’s 50 % portion of the Dayhu JV Loan.

At December 31, 2023, the loan balance was $ 34.7 million and is included in other long-term assets.

In March, 2021, the Company entered into the Beedie joint venture ("Beedie JV").

At December 31, 2022 and December 31, 2023, the equity investment balance was $ 15.7 million and $ 23.8 million, respectively, of which substantially all the assets in the Beedie JV is comprised of property and equipment.

At December 31, 2023, the loan balance was $ 34.7 million and included in other long-term assets.

At December 31, 2024, the loan balance was $ 32.0 million and is included in other current assets.

In March 2021, the Company entered into a joint venture with Beedie ("Beedie JV").

At December 31, 2023 and December 31, 2024, the equity investment balance was $ 23.8 million and $ 41.3 million, respectively, of which substantially all the assets in the Beedie JV are comprised of property and equipment.

The lease agreement between the Company and the Beedie JV, which has a commencement date subsequent to December 31, 2024, is included in Note 16.

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The loan receivable balance, which relates to the land and construction loan, was $ 13.9 million and $ 29.6 million as at December 31, 2023 and December 31, 2024, respectively, and is included in other long-term assets.

Accounts payable and other liabilities

Accounts payable and other liabilities consisted of the following:

Current accounts payable and other current liabilities

Accounts payable and accrued liabilities $ 28,603 $ 34,350

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Current portion of deferred government contribution 7,112 7,658

Accrued royalties payable 19,347 3,094

Total accounts payable and other liabilities $ 52,497 $ 49,580

Total accounts payable and other current liabilities $ 49,580 $ 55,004

Shareholders’ Equity

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Stock-based compensation

Sixth Amended and Restated Stock Option Plan:

Seventh Amended and Restated Stock Option Plan:

We maintain the AbCellera Biologics Inc.

Sixth Amended and Restated Stock Option Plan, our Pre-IPO Plan, which was approved by our board of directors on November 18, 2020.

Seventh Amended and Restated Stock Option Plan, our Pre-IPO Plan, which was approved by our board of directors on November 18, 2020.

The Pre-IPO Plan allows for the grant of options (and for U.S.

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Any awards granted under the Pre-IPO Plan will remain subject to the terms of our Pre-IPO Plan and applicable award agreements.

Options were granted under the Company’s Pre-IPO Plan in Canadian dollars and were converted to U.S dollars for administrative convenience in 2021.

In March 2021, substantially all employee option holders whose awards were liability-classified elected to convert the currency of their option exercise price from Canadian dollars to U.S.

dollars for administrative convenience.

As a result of the modification, $ 5.7 million was reclassified from liability to equity.

2020 Share Option and Incentive Plan:

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Outstanding as of December 31, 2024 6,629,833 $ 7.53

The intrinsic value of RSUs vested and settled during 2021, 2022, and 2023 was nil , $ 2.5 million , and $ 8.0 million , respectively.

The intrinsic value of RSUs vested and settled during 2022, 2023, and 2024 was $ 2.5 million , $ 8.0 million , and $ 5.4 million , respectively.

As of December 31, 2024, there was $ 35.4 million of unamortized RSU expense that will be recognized over a weighted average period of 2.3 years.

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The Company uses the simplified method to calculate the average expected term, which represents the average of the vesting period and the contractual term.

(4) No dividends have been paid by the Company.

(5) Options granted after the Company’s IPO are issued with exercise price equal to the fair market value of the Company’s common stock on the grant date.

(4) No dividends are expected to be paid by the Company.

(5) Options are granted with an exercise price equal to the fair market value of the Company’s common stock on the grant date.

The disaggregated revenue categories are presented on the consolidated statements of income (loss) and comprehensive income (loss).

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For the year ended December 31, 2023, the Company received an additional $ 2.3 million in payments, for total upfront payments received in respect of this agreement of $ 31.5 million.

For the year ended December 31, 2023, the Company received $ 2.3 million in additional payments and recognized $ 4.2 million of revenue in the year ended December 31, 2023.

For the year ended December 31, 2024, the Company received $ 7.2 million in additional payments and recognized $ 12.3 million of revenue in

the year ended December 31, 2024.

The Company expects to recognize approximately $ 4.7 million in revenue in the next 12 months related to these payments under the agreement.

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The Company has granted notice and consent rights to the counterparties upon certain events related to a change in control (as defined in the agreements) of the Company.

Other obligations in relation to Government

Contribution 2 include the maintenance of certain gross capital expenditures in Canada, certain research and development expenditures in Canada, and the achievement of certain headcount requirements in Canada.

Other obligations in relation to Government Contribution 2 include the maintenance of certain gross capital expenditures in Canada, certain research and development expenditures in Canada, and the achievement of certain headcount requirements in Canada.

Pursuant to the agreements, certain customary events of default, such as the Company’s breach of its covenants and obligations under the respective agreements, its insolvency, winding up or dissolution, and other similar events, may permit the Governments of Canada and British Columbia to declare an event of default under the respective agreements.

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Government Contribution 1

From inception to December 31, 2023, the Company has recorded CAD $ 140.8 million ($ 109.1 million) of the funding, of which CAD $ 58.7 million ($ 46.1 million) relates to the maximum claim amount under phase 1 of the agreement.

From inception to December 31, 2024, the Company incurred CAD $ 175.6 million ($ 134.6 million) in expenditures, of which CAD $ 58.7 million ($ 46.1 million) relates to the maximum claim amount under phase 1 of the agreement.

Such amounts are not repayable.

The Company has recorded CAD $ 82.1 million ($ 63.1 million) in respect of phase 2 of the funding commitment, where repayment is conditional on achieving certain revenue thresholds during the seven years starting the year after the completion of the funded project.

The Company has incurred CAD $ 116.9 million ($ 88.5 million) in expenditures under phase 2 of the funding commitment, where repayment is conditional on achieving certain revenue thresholds during the seven years starting the year after the completion of the funded project.

Repayment will be calculated as a percentage rate of the Company’s revenue, with payment made on an annual basis during the repayment period of fifteen years .

Government Contribution 2

In May of 2023, the Government of Canada has committed up to CAD $ 225.0 million ($ 166.7 million) of which CAD $ 56.2 million ($ 41.6 million) is non-repayable, CAD $ 78.8 million ($ 58.4 million) is repayable and CAD $ 90.0 million ($ 66.7 million) is conditionally repayable.

In May of 2023, the Government of Canada committed up to CAD $ 225.0 million ($ 166.7 million) of which CAD $ 56.2 million ($ 41.6 million) is non-repayable, CAD $ 78.8 million ($ 58.4 million) is repayable, and CAD $ 90.0 million ($ 66.7 million) is conditionally repayable.

Both the repayable and conditionally repayable amounts are repayable starting in 2033.

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The agreement will expire on the later of April 30, 2047, or the date of the last repayment, unless earlier terminated.

For the year ended December 31, 2023, the Company has recorded CAD $ 29.0 million ($ 21.6 million) in respect of the funding.

In May of 2023, the Government of British Columbia has committed up to CAD $ 75.0 million ($ 55.6 million) which includes partial reimbursement of certain eligible expenditures up to CAD $ 37.5 million ($ 27.8 million) towards eligible infrastructure investments paid over five years ;

and a CAD $ 37.5 million ($ 27.8 million) conditional portion paid upon achievement of certain defined milestones, including upon the Company’s undertaking of certain clinical trial activities in British Columbia.

For the years ended December 31, 2023 and December 31, 2024, the Company incurred expenditures of CAD $ 29.0 million ($ 21.6 million) and CAD$ 38.3 million ($ 27.8 million), respectively, in regards to the funding commitment.

In May of 2023, the Government of British Columbia committed up to CAD $ 75.0 million ($ 55.6 million) which includes partial reimbursement of certain eligible expenditures up to CAD $ 37.5 million ($ 27.8 million) towards eligible infrastructure investments paid over five years ;

and a CAD $ 37.5 million ($ 27.8 million) conditional portion paid upon achievement of certain defined milestones, including upon the Company’s undertaking of certain clinical trial activities in

British Columbia.

Up to a maximum of CAD $ 64.0 million ($ 48.0 million) may become payable starting in 2032, over up to fifteen years , conditional to the Company achieving revenue exceeding a given threshold.

The agreement will expire on the earlier of 2047, or the date of the last payment, unless earlier terminated, as prescribed in the agreement.

For the year ended December 31, 2023, the Company has recorded CAD $ 18.8 million ($ 14.1 million) in respect of the funding commitment.

For the years ended December 31, 2023 and December 31, 2024, the Company incurred expenditures of CAD $ 18.8 million ($ 14.1 million) and CAD $ 18.7 million ($ 13.8 million), respectively, in regards to the funding commitment.

Impact to Consolidated Financial Statements

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Non-repayable Conditionally Repayable 2

Government Contribution 1 $ 6,927 $ 14,864 $ 32,222 $ — $ 47,086

Government Contribution 1 (Canada) $ 13,677 $ 9,764 $ 57,790 $ — $ 67,554

Government Contribution 2 (Canada) 8,245 4,061 — 16,420 20,481

Government Contribution 2 (British Columbia) 14,129 — 14,006 — 14,006

Other Government Grants — 986 — — 986

Total $ 36,051 $ 14,811 $ 71,796 $ 16,420 $ 103,027

Current $ 26,945 $ 4,450 $ 2,662 $ — $ 7,112

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Non-repayable Conditionally Repayable 2

Government Contribution 1 $ 13,677 $ 9,764 $ 57,790 $ — $ 67,554

Government Contribution 1 (Canada) $ 12,262 $ 5,593 $ 80,114 $ — $ 85,707

Government Contribution 2 (Canada) 17,016 7,098 — 36,978 44,076

Government Contribution 2 (British Columbia) 21,413 — 26,781 — 26,781

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Total $ 239,099 $ ( 174,029 ) $ ( 200,395 )

The expense (benefit) for income taxes consists of:

The expense (recovery) for income taxes consists of:

2022 2023 2024

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Change due to SR&ED ( 5,908 ) ( 7,428 ) ( 8,224 )

Gain on contingent consideration — — ( 12,771 )

Capital treatment of items — — 2,205

Other 285 ( 395 ) 77

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Operating lease liability 17,211 15,648

Deferred revenue 6,042 21,241

Net operating losses carried forward 7,256 15,631

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( 77,175 ) ( 63,684 )

( 14,437 ) 4,042

valuation allowance ( 33,840 ) ( 49,909 )

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Net deferred tax assets (liability) $ ( 29,798 ) $ ( 10,052 )

As of December 31, 2023 the Company had incurred a Canadian non-capital loss of approximately $ 66.7 million and generated federal and provincial investment tax credits of approximately $ 10.2 million.

The non-capital loss and investment tax credits generated were carried back up to three years and applied against previously taxable income.

As at December 31, 2024, the Company had $ 27.1 million of net-operating losses and $ 8.5 million of tax carryforward credits to apply against future taxes in Canada.

At December 31, 2023, net-operating losses and credits generated were fully utilized to recover previous taxes paid.

The Company had operating losses carried forward related to U.S.

operations of approximately $ 19.4 million, $ 19.4 million and $ 17.9 million as of December 31, 2022, 2023 and 2024, respectively.

Certain tax attributes are subject to an annual limitation as a result of the acquisitions of Lineage and TetraGenetics which constitute a change of ownership.

Net operating losses arising from U.S.

operations in tax years ending after December 31, 2017, may be carried over to subsequent taxable years indefinitely and used to offset future taxable income.

non-operating losses total $ 14.0 million, of which $ 1.9 million, $ 1.5 million, $ 1.0 million, $ 1.2 million expire in 2034, 2035, 2036 and 2037, respectively, and $ 8.4 million may be carried forward indefinitely.

In Australia the Company had no unclaimed tax deductions for research and development expenses, and tax carryforward credits of $ 9.8 million.

Certain tax attributes are subject to an annual limitation as a result of acquisitions.

Of the U.S net-operating losses totaling $ 17.9 million of which $ 9.5 million will expire between the years 2030 and 2037 if not utilized, $ 8.4 million may be carried forward indefinitely.

In Australia, the Company has tax carryforward credits of $ 6.1 million.

As of December 31, 2024, the Company has immaterial accumulated undistributed earnings generated by foreign subsidiaries.

The Company has not provided a deferred liability for the income taxes associated with its foreign investments because it is the Company’s intention to indefinitely reinvest in its foreign investments.

The Company realized $ 0.1 million of previously unrecognized tax benefits during the year ended December 31.

2021 and nil for the years ended December 31, 2022 and 2023.

Total unrecognized tax benefits for the years ended December 31, 2021, 2022 and 2023 were nil.

The Company did not realize any previously unrecognized tax benefits with respect to uncertain tax positions during the years ended December 31, 2022, 2023, and 2024.

There were no unrecognized tax benefits with respect to uncertain tax positions for the years ended December 31, 2022, 2023 and 2024.

The Company is subject to taxation primarily in Canada, the United States, and Australia.

Further, while the statute of limitations in each jurisdiction where an income tax return has been filed generally limits the examination period, as a result of loss carry-forwards, the limitation period for examination generally does not expire until several years after the loss carry-forwards are utilized.

Tax years ranging from 2019 to 2023 remain subject to Canadian income tax examinations.

Tax years ranging from 2019 to 2023 remain subject to the foreign income tax examinations.

Further, while the statute of limitations in each jurisdiction where an income tax return has been filed generally limits the examination period, the limitation period for examination by a jurisdiction may be extended under various provisions.

Generally, tax years ranging from 2020 to 2024 remain open to income tax examination.

Other than routine audits done by tax authorities for tax credits and tax refunds that the Company has claimed, management is not aware of any other material income tax examination currently in progress by any taxing jurisdiction.

The Company primarily leases office and laboratory facilities in Vancouver and Montreal, Canada, Sydney, Australia, and Boston, USA.

The Company's operating leases have a fixed term with a remaining life between two months and fourteen years , with renewal options included in the contracts ranging from five to ten years .

The Company's operating leases have a fixed term with a remaining life between one year and thirteen years , with renewal options included in the contracts ranging from five to ten years .

The leases have varying contract terms, escalation clauses and renewal options.

Generally, there are no restrictions placed upon the lessee by entering into these leases, other than restrictions on use of property, sub-letting and alterations.

Generally, there are no significant restrictions placed upon the lessee by entering into these leases, other than restrictions on use of property, sub-letting and alterations.

T he balance sheet classification of the Company's lease liabilities was as follows:

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Financial Instruments

Fair Value Measurements

The Company categorizes its financial assets and liabilities measured at fair value into a three-level hierarchy established by U.S.

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and Level 3 inputs are not observable in the market.

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, marketable securities, accounts receivable, loans receivable, loans to equity accounted investees, accounts payable and other liabilities, and contingent consideration payable.

The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and other liabilities, loans receivable, and loans to equity accounted investees approximate their fair values, and are primarily classified as Level 2.

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, marketable securities, accounts receivable, loans receivable, accounts payable and other liabilities, and contingent consideration payable.

The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and other liabilities, and loans receivable, approximate their fair values, and are primarily classified as Level 2.

Contingent Consideration

Contingent consideration related to business acquisitions is recorded at fair value on the acquisition date and adjusted on a recurring basis for changes in its fair value.

Changes in the fair value of contingent consideration liabilities can result from changes in anticipated payments and changes in assumed discount periods and rates.

These inputs are unobservable in the market and are therefore categorized as Level 3 inputs.

Contingent consideration relates to potential earn-out payments and future successful milestone payouts from previous business acquisitions.

Contingent consideration is recorded at fair value on the acquisition date and adjusted on a recurring basis for changes in its fair value.

Changes in the fair value of contingent consideration liabilities can result from changes in anticipated payments and changes in assumed discount periods and rates and are included in other income on the consolidated statements of income (loss).

The inputs are unobservable in the market and are therefore categorized as

Level 3 inputs.

There were no changes to the valuation technique and inputs used in these fair value measurements since acquisition.

The following table presents the changes in fair value of the liability for contingent consideration:

December 31, 2023

Additions Increase in fair

value of liability

for contingent

consideration (i)

Repayment of contingent

consideration

$ 22,934 $ — $ 571 $ — $ 23,505

TetraGenetics (iii)

Liability at beginning of the year

Decrease in fair value of liability for contingent consideration

Repayment of contingent consideration

Liability at end of the year

Contingent consideration (i)

$ 60,265 $ ( 3,929 ) $ ( 948 ) $ 55,388

December 31, 2024

Additions Decrease in fair

value of liability

for contingent

consideration (i)

Repayment of contingent

consideration

$ 23,505 $ — $ ( 3,860 ) $ ( 948 ) $ 18,697

TetraGenetics (iii)

Liability at beginning of the year

Decrease in fair value of liability for contingent consideration

Repayment of contingent consideration

Liability at end of the year

Contingent consideration (i)

$ 55,388 $ ( 47,301 ) $ — $ 8,087

(i) Increase (decrease) in fair value of liability for contingent consideration is included within interest and other in other income on the consolidated statements of income (loss) and comprehensive income (loss).

(ii) The estimated fair value of the earn-out was categorized within Level 3 of the fair value hierarchy.

The earn-out relates to a specific customer license and the fair value was determined by estimating the payout of 85 % of the expected future net cash flows associated to the specific customer license during the earn-out period.

The significant assumptions inherent in the development of the value include the amount and timing of projected future net revenues received by us from the specific customer license, and the discount rate selected to measure the risks inherent in the future cash flows, which was approximately 22 %.

(iii) There were no changes to the valuation technique or significant changes to the inputs used in these fair value measurements since acquisition.

The discount rate applied increased to 12.8 % (from 8.0 % since acquisition date) associated to the TetraGenetics contingent consideration at December 31, 2023.

Further information related to the TetraGenetics contingent consideration is disclosed in Note 19.

(i) The estimated fair value was determined by estimating the expected future cash flows associated with the contingent payments.

The significant assumptions include the amount and timing of projected future cash flows, risk adjusted for various factors including probability of success, discounted at ranging from 12.8 % to 22 %, which measures the risks inherent in each relevant future cash flows stream.

In the year ended December 31, 2024, the fair value of the contingent consideration was adjusted to reflect the expected value due to the impact from the Company's ongoing internal program prioritization and expected achievement of a milestone required for an earn-out payment associated with a specific license.

Changes in the fair value of the liability for contingent consideration is recognized as a non-cash fair value gain through other income.

In-Process Research and Development Assets

As discussed in Note 7, the estimated fair values in support of the TetraGenetics full impairment charge were categorized within Level 3 of the fair value hierarchy and were determined using an income-based approach, which was based on a probability-adjusted present value of the future estimated after-tax cash flows attributable to the intangible assets.

The significant assumptions inherent in estimating the fair values, from the perspective of a market participant, include a probability-adjusted success rate of its continued development through to clinical trials, future revenue, operating and development costs, milestone and regulatory success, obsolescence, and profitability.

A de-risked discount rate of 12.8 % for TetraGenetics was used to present value the probability of success risk adjusted after-tax cash flows attributable to the IPR&D.

Marketable Securities

28 unchanged sentences

Pursuant to such agreements, the Company may be obligated to make research and development and regulatory milestone payments upon the occurrence of certain events and upon receipt of royalty payments in the low single-digits to mid-twenties based on certain net sales targets.

For the years ended December 31, 2021, 2022, and 2023, the Company expensed approximately $ 45.5 million, $ 66.4 million, and nil , respectively, related to such obligations, of which $ 19.3 million and $ 3.1 million is included in current liabilities as accounts payable and other liabilities as of December 31, 2022 and December 31, 2023, respectively.

Excluding the lease arrangements as accounted for in Note 14 – Leases, the Company has the following commitmen ts in respect of commitments, primarily related to the construction of our new facilities, in addition to the Beedie JV leased facility where the lease commencement date is subsequent to December 31, 2023:

The Company expensed approximately $ 66.4 million for the year ended December 31, 2022, and nil for the years ended December 31, 2023 and December 31, 2024.

Excluding the lease arrangements as accounted for in Note 14 – Leases, the Company has the following commitmen ts, primarily related to the construction of our new facilities, in addition to the Beedie JV leased facility where the lease commencement date is subsequent to December 31, 2024:

2025 $ 36,210

3 unchanged sentences

In the fourth quarter of 2023, the Company announced a reorganization and associated reduction in its workforce to better focus its efforts towards the clinical development of new antibody medicines for patients.

The Company reduced headcount by approximately 10 % and incurred total costs of $ 3.2 million included within operating expenses, of which $ 2.0 million was included in accounts payable and other liabilities at December 31, 2023 .

Financial Risk Management

7 unchanged sentences

Any adjustments made to our historical loss experience reflect current differences in asset-specific risk characteristics and current economic conditions.

At December 31, 2022 and 2023, accounts and accrued royalty receivable amounts were due from twenty-one and ten customers, respectively.

For the year ended December 31, 2022, royalty revenue totaled $ 443.0 million, exclusively from our partnership with Lilly, of which $ 9.3 million was receivable at December 31, 2022.

For the year ended December 31, 2023, there was no royalty revenue from our partnership with Lilly and no receivable amounts as of December 31, 2023.

At December 31, 2023 and 2024, accounts and accrued receivable amounts were due from 10 and 16 customers, respectively.

Interest Rate Risk

17 unchanged sentences

The operating results and financial position of the Company are reported in U.S.

dollars in the Company’s consolidated financial statements.

dollars in the Company’s

consolidated financial statements.

The fluctuation of the U.S.

2 unchanged sentences

For the year ended December 31, 2023, three of our partners accounted for 26 %, 17 % and 11 % of our research fees revenue.

Our partnership with Lilly constituted one of the partnerships that generated 10 % or more of our consolidated revenues.

For the year ended December 31, 2023, three of our partners accounted for 26 %, 17 % and 11 % of our research fee revenue.

Our partnerships with DARPA, AbbVie Inc., and Lilly.

constituted partnerships that generated 10 % or more of our consolidated research fees revenue.

Our partnership with these three partners generated 10% or more of our consolidated revenues.

For the year ended December 31, 2024, two of our partners accounted for 47 % and 22 % of our research fee revenue.

Our partnerships with these two partners generated 10% or more of our consolidated research fees revenue.

Related party transactions

In addition to the transactions with our joint ventures, the Company had the following related party transaction:

In addition to the transactions with our joint ventures in Note 8, the Company had the following related party transaction:

a) During 2022, the Company engaged advisory services with a firm co-founded by a director of the Company.

For the year ended December 31, 2022, $ 0.3 million was included in general and administrative expenses, of which $ 0.2 million was included in accounts payable at December 31, 2022.

TetraGenetics

On September 10, 2021, the Company completed a business combination with TetraGenetics, Inc.

(“TetraGenetics”), a biotechnology company with a proprietary platform for generating recombinant human ion channels and other transmembrane proteins.

The Company acquired 100 % of the issued and outstanding shares of TetraGenetics in exchange for:

upfront cash consideration of $ 12.5 million adjusted for certain closing amounts;

potential milestone payments up to $ 37.5 million based on the achievement of technical milestones, and additional development and commercial milestone payments related to successfully developed therapeutics.

The Company deposited an additional $ 12.5 million in escrow included as part of other long-term assets subject to release to the former shareholders of TetraGenetics upon the achievement of certain technical milestones.

The estimated fair value of the potential milestone payouts have been included in the final consideration.

The acquisition date fair value of the final purchase price consideration consisted of the following:

Estimated Fair Value

Closing consideration $ 12,926 (i)

Contingent consideration 35,100 (ii)

i) Pursuant to the merger agreement, the initial cash consideration adjusted for certain preliminary closing adjustments.

ii) Represents the estimated fair value of the contingent consideration related to potentially successful milestone events.

The estimated fair value was categorized within Level 3 of the fair value hierarchy and determined by estimating the expected future cash flows associated with the potential milestone events.

The significant assumptions inherent in estimating the fair value include the amount and timing of projected future cash flows, risk adjusted for various factors including probability of success and discounted at an 8 % discount rate to estimate the present value of the risk adjusted future cash flows.

In accordance with the acquisition method of accounting, the purchase price of TetraGenetics has been allocated to the acquired assets and assumed liabilities based on their estimated acquisition date fair values.

The fair value estimates were based on income, estimates and other analyses.

The excess of the total consideration over the estimated fair value of the amounts initially assigned to the identifiable assets acquired and liabilities assumed has been recorded as goodwill, which is not deductible for income tax purposes.

The goodwill balance represents the assembled workforce acquired, the combined company’s expectations of the strategic opportunities available as a result of the merger, and other synergies that will be derived from the merger.

Total transaction costs expensed in the consolidated statements of income (loss) and comprehensive income (loss) were immaterial.

During the year ended December 31, 2023, no adjustments were made to the allocation of the purchase price .

The following table summarizes the final purchase price allocation for the TetraGenetics transaction:

Fair value of assets and liabilities acquired Purchase Price Allocation

Other assets, including cash of $ 955

Intangibles 43,300 (i)

Goodwill 16,906 (ii)

Total assets 62,838

Other liabilities 2,984

Deferred tax liability 11,830

Total liabilities 14,814

Estimated fair value of net identifiable assets acquired and liabilities assumed $ 48,024

(i) The estimated fair value and useful lives of the intangible assets acquired is as follows:

Estimated fair value (a)

Estimated useful lives in years(b)

Technology $ 11,300 20

IPR&D 32,000 (c)

(a) The estimated fair values were categorized within Level 3 of the fair value hierarchy and were determined using an income-based approach, which was based on the present value of the future estimated after-tax cash flows attributable to each intangible asset.

The significant assumptions inherent in estimating the fair values, from the perspective of a market participant, include the amount and timing of projected future after-tax cash flows including revenue, operating costs, milestone and regulatory success, obsolescence, and profitability.

The discount rate selected to present value the future after-tax cash flows attributable to the Technology is a 20.1 % fully risked discount rate.

A de-risked discount rate of 8.0 % was used to present value the probability of success risk adjusted after-tax cash flows attributable to the IPR&D.

(b) The estimate of the useful life was based on an analysis of the expected use of the asset by the Company, any legal, regulatory or contractual provisions that may limit the useful life, the effects of obsolescence, competition and other relevant economic factors, and consideration of the expected cash flows used to measure the fair value of the intangible asset.

(c) IPR&D assets are indefinite life intangible assets at the time of acquisition and will be amortized upon completion of IPR&D activities.

(ii) Goodwill represents the excess of the estimated purchase price over the estimated fair value of TetraGenetics’ identifiable assets acquired and liabilities assumed.

The Company has not provided post acquisition and pro forma information relating to the pre-acquisition period as it is not material.

For the year ended December 31, 2022, $ 0.3 million was included in general and administrative expenses and $ 0.2 million, of which was included in accounts payable at December 31, 2022, was paid in 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures