AbCellera Biologics Inc. 10-K

Item 9A. Controls and Procedures. Disclosure Controls and Procedures Our “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, are designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are designed to ensure that information required to be disclosed is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, to allow timely decisions regarding required disclosure. The Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), with assistance from other members of management, have reviewed the effectiveness of our disclosure controls and procedures as of December 31, 2024, and, based on their evaluation, have concluded that the disclosure controls and procedures were effective as of such date. Management’s Annual Report on Internal Control Over Financial Reporting Management of the Company is responsible for establishing and maintaining adequate internal controls over financial reporting for the Company as defined in Rule 13a-15(f) under the Exchange Act. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s CEO and CFO, overseen by the Company’s Board of Directors and implemented by the Company’s management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with U.S. generally accepted accounting principles, and the requirements of the SEC. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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 policies and procedures may deteriorate. Under the supervision of and with the participation of our management, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2024, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based on this assessment, our management concluded that our internal control over financial reporting was effective as of December 31, 2024. Attestation Report of Independent Registered Public Accounting Firm The effectiveness of our internal control over financial reporting as of December 31, 2024, has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report included elsewhere in this Annual Report on Form 10-K. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during the fourth quarter of 2024 that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. Item 9B. Other Information. During the three months ended December 31, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted , terminated , or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K). Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 102 PART III Item 10. Directors, Executive Officers and Corporate Governance. The following table contains the name and age of our Directors and executive officers as of December 31, 2024. Name Age Position Held Michael Hayden, MBCHB (M.D.), Ph.D. 73 Director John S. Montalbano, CFA 59 Director Andrew Lo, Ph. D. 64 Director Carl L.G. Hansen, Ph.D. 50 Chief Executive Officer and Director Véronique Lecault, Ph.D. 40 Chief Operating Officer and Director Andrew Booth 51 Chief Financial Officer Tryn Stimart 55 Chief Legal Officer, Chief Compliance Officer, Corporate Secretary & Privacy Officer Michael Hayden, MBCHB (M.D.), Ph.D. Dr. Hayden has served as a member of our Board of Directors since September 2019. Dr. Hayden is the Lead director of the Board of Directors and serves as the Chair of our Compensation Committee, is a member of our Nominating and Corporate Governance Committee, and a member of our Audit Committee. Dr. Hayden has been the Chief Executive Officer of Prilenia Therapeutics B.V., a clinical stage biotechnology company since September 2018. From September 2012 to December 2017, Dr. Hayden served as Chief Science Officer and President of Global Research and Development at Teva Pharmaceutical Industries Ltd., a public pharmaceutical company. Dr. Hayden has founded a number of biotechnology companies, including Aspreva Pharmaceuticals Limited, a private pharmaceutical company; Neurovir Therapeutics, Inc., a private biopharmaceutical company; Xenon Pharmaceuticals Inc., a public clinical-stage biopharmaceutical company; and 89bio, Inc., a public clinical-stage biopharma company. Dr. Hayden has served as a member of the Board of Directors for each of Ionis Pharmaceuticals Inc., a public biotechnology company, since September 2018; 89bio since April 2018, and Xenon Pharmaceuticals Inc. from November 1996 to June 2022. From September 2018 to June 2020, Dr. Hayden also served as the executive chairman of the Board of Directors of Prilenia. Dr. Hayden is also a Killam Professor of Medical Genetics at the University of British Columbia, a Founder and Senior Scientist at the Centre for Molecular Medicine and Therapeutics, and a Canada Research Chair in Human Genetics and Molecular Medicine. Dr. Hayden holds an M.B., Ch.B. (M.D.) and a Ph.D. degree in Genetics from the University of Cape Town. He is board certified by the American Societies of Internal Medicine and Medical Genetics. He is also certified by the Royal College of Physicians of Canada (Internal Medicine). We believe Dr. Hayden is qualified to serve on our Board of Directors because of his academic background, as well as his extensive experience as a director and executive officer of both publicly and privately held biotechnology and biopharmaceutical companies. John S. Montalbano, CFA. Mr. 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. Mr. 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. Montalbano served as the Chief Executive Officer of RBC Global Asset Management from 2008 to 2015, and as the President of Phillips, Hager & North Investment Management Ltd., a private wealth management firm, from 2005 to 2008. Mr. Montalbano also served as Vice Chair of RBC Wealth Management from April 2015 to December 2016. Mr. Montalbano holds a B.Comm. in Finance from the University of British Columbia. We believe Mr. Montalbano is qualified to serve on our Board of Directors due to his leadership, experience as an entrepreneur, and financial expertise. Andrew Lo, Ph.D. Dr. Lo is the Charles E. and Susan T. 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 he has been an MIT faculty member 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. Dr. Lo currently serves on the Board of Directors of BridgeBio Pharma, a clinical-stage biopharmaceutical company, and Atomwise, an AI-powered drug discovery company. Dr. Lo holds a B.A. in Economics from Yale University and a Ph.D. in Economics from 103 Harvard University. Dr. 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. Carl L. G. Hansen, Ph.D. Dr. Hansen is our co-founder and has served as our Chief Executive Officer, President and as the Chairman of our Board of Directors since our inception in November 2012. Dr. Hansen co-founded Precision NanoSystems Inc., a Vancouver-based private company developing next-generation delivery technology for genetic medicines founded in 2010, where Dr. Hansen also served as a member of the Board of Directors from January 2011 to September 2015. Until August 2019, Dr. Hansen was a professor at the University of British Columbia, where he coauthored over 65 manuscripts in the fields of microfluidics, immunology, genomics and nanotechnology. Dr. Hansen also was a co-founder and served as a member of the Board of Directors of Resolution Diagnostics, a private genomics technology company, from May 2015 to April 2016. Prior to that, he served on the science advisory board of Fluidigm Corporation, a public company providing biotechnology tools, from January 2008 to January 2012. Dr. Hansen holds a Ph.D. in Applied Physics with a focus on Biotechnology from the California Institute of Technology, and a B.A.Sc. in Engineering Physics and Honors Mathematics from the University of British Columbia. We believe Dr. Hansen is qualified to serve on our Board of Directors because of the perspective and experience he brings as a co-founder and our Chief Executive Officer. Véronique Lecault, Ph.D. Dr. Lecault is a co-founder and has served in various positions with us since November 2012. Dr Lecault has been our Chief Operating Officer since January 2019 and a member of our Board of Directors since August 2018. Dr. Lecault has also served as Vice President of our wholly owned biotechnology subsidiary, Lineage Biosciences Inc., since January 2018 and Director of our wholly owned biotechnology subsidiary, Trianni Inc., since November 2020. Dr. Lecault has also served as a director of our wholly owned Australian biotechnology subsidiary, AbCellera Australia Pty. Ltd., since September 2019. Dr. Lecault received her Ph.D. in Chemical and Biological Engineering from the University of British Columbia where she co-invented the high-throughput microfluidic platform that is now part of our core technology. Dr. Lecault holds a B.A.Sc. in Chemical Engineering/Honours B.Sc. Biochemistry (Biotechnology) dual degree from the University of Ottawa. We believe Dr. Lecault is qualified to serve on our Board of Directors because of the perspective and experience she brings as an officer and as one of our co-founders. Andrew Booth. Mr. 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. Booth also served as the Chief Commercial Officer of STEMCELL Technologies Inc., a Vancouver-based private biotechnology company, and as the Chief Financial Officer of STEMCELL Technologies from March 2013 to January 2017, and as the VP, Instrumentation from January 2010 to February 2013. Prior to STEMCELL, Mr. Booth was at GE Healthcare based in London, UK leading M&A activities for EMEA and GE Lifesciences. Mr. Booth was at GE from 2004 to 2009. Mr. Booth has also previously served as a member of the Board of Directors of various private companies in the life sciences sector. Mr. Booth holds an MBA from INSEAD, and a B.A.Sc. in Engineering Physics from the University of British Columbia. Tryn Stimart. Mr. 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. Stimart was a partner at Gibbons P.C., a law firm, from October 2016 to August 2019. From May 2013 to September 2016, Mr. Stimart was a partner at Womble Bond, LLP, a law firm. Mr. Stimart holds a J.D. from the American University Washington College of Law, an M.Sc. in Chemistry from Old Dominion University, and B.Scs. degrees in Biochemistry and Genetics & Cell Biology from the University of Minnesota (twin cities). There are no family relationships between or among any of our directors or executive officers. The principal occupation and employment during the past five years of each of our directors was carried on, in each case except as specifically identified above, with a corporation or organization that is not a parent, subsidiary or other affiliate of us. There is no arrangement or understanding between any of our directors and any other person or persons pursuant to which he or she is to be selected as a director. 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. Item 11. Executive Compensation. The 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. 104 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The 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. Item 13. Certain Relationships and Related Transactions, and Director Independence. The 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. Item 14. Principal Accounting Fees and Services. Our independent registered public accounting firm is KPMG LLP, Vancouver, BC, Canada, PCAOB Auditor ID 85 . The 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. 105 PART IV Item 15. Exhibits, Financial Statement Schedules. (a) The following documents are filed as part of this Annual Report on Form 10-K: 1) The consolidated financial statements filed as part of this Annual Report on Form 10-K are listed in the “Index to Consolidated Financial Statements” under Part II, Item 8 of this Annual Report on Form 10-K. 2) No schedules are submitted because they are not applicable, not required or because information is included in the consolidated financial statements or the notes thereto. 3) The exhibits required by Item 601 of Regulation S-K and Item 15(b) of this Annual Report on Form 10‑K are listed in the Exhibit Index immediately preceding the signature page of this Annual Report on Form 10‑K. The exhibits listed in the Exhibit Index are incorporated by reference herein. Item 16. Form 10-K Summary None. Exhibit Index. Exhibit No. Description 3.1 Articles of the Registrant, as currently in effect (incorporated by reference to Exhibit 3.1 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on March 30, 2021). 4.1 Amended and Restated Investors Rights Agreement among the Registrant and certain of its shareholders, dated March 23, 2020 (incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-250838) filed on November 20, 2020). 4.2 Form of Specimen Common Share Certificate (incorporated by reference to Exhibit 4.2 of the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-250838) filed on December 7, 2020). 4.3 Description of Securities (incorporated by reference to Exhibit 4.3 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on March 30, 2021). 10.1† Research Collaboration and License Agreement between the Registrant and Eli Lilly and Company, dated March 11, 2020 (incorporated by reference to Exhibit 10.2 of the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-250838) filed on November 20, 2020). 10.2† Patent License Agreement between the U.S. Department of Health and Human Services, as represented by National Institute of Allergy and Infectious Diseases and the Registrant, dated May 4, 2020 (incorporated by reference to Exhibit 10.3 of the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-250838) filed on November 20, 2020). 10.3† License Agreement between the Board of Trustees of the Leland Stanford Junior University and Lineage Biosciences Inc., dated February 11, 2015 (incorporated by reference to Exhibit 10.4 of the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-250838) filed on November 20, 2020) . 10.4† Amendment No. 1 to License Agreement between the Board of Trustees of the Leland Stanford Junior University and Lineage Biosciences Inc., dated March 22, 2017 (incorporated by reference to Exhibit 10.5 of the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-250838) filed on November 20, 2020). 10.5† License Agreement between the University of British Columbia and the Registrant dated December 16, 2013 (incorporated by reference to Exhibit 10.6 of the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-250838) filed on November 20, 2020). 10.6† Strategic Innovation Fund Agreement between the Registrant and her Majesty the Queen in right of Canada as represented by the Minister of Industry, dated April 11, 2020 (incorporated by reference to Exhibit 10.7 of the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-250838) filed on November 20, 2020). 10.7# Employment Agreement between the Registrant and Carl L. G. Hansen, Ph.D., dated August 1, 2019, as amended (incorporated by reference to Exhibit 10.8 of the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-250838) filed on December 7, 2020). 106 10.8# Employment Agreement between the Registrant and Andrew Booth, dated April 12, 2019 (incorporated by reference to Exhibit 10.9 of the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-250838) filed on December 7, 2020). 10.9# Employment Agreement between the Registrant and Tryn Stimart, dated July 10, 2019 (incorporated by reference to Exhibit 10.10 of the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-250838) filed on December 7, 2020). 10.10# Employment Agreement between the Registrant and Véronique Lecault, Ph.D., dated December 20, 2016, as amended (incorporated by reference to Exhibit 10.11 of the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-250838) filed on December 7, 2020). 10.11# 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 ). 10.12# 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). 10.13# 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. 333-250838) filed on December 7, 2020). 10.14# 2020 Employee Share Purchase Plan (incorporated by reference to Exhibit 10.15 of the Registrant’s Registration Statement on Form S-1 (File No. 333-250838) filed on December 7, 2020). 10.15# Executive Severance Plan (incorporated by reference to Exhibit 10.16 of the Registrant’s Registration Statement on Form S-1, as amended (File No. 333-250838) filed on December 7, 2020). 10.16# Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.17 of the Registrant’s Registration Statement on Form S-1 (File No. 333-250838) filed on December 7, 2020). 10.17† 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) . 10.18† 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) . 10.19† Lease between Dayhu Investments (4th and Columbia) Ltd. and the Registrant (incorporated by reference to Exhibit 10.3 of the Registrant's Current Report on Form 10-Q (File No. 001-39781) filed on November 2, 2023). 19.1* Insider Trading Compliance Policy . 21.1* Subsidiaries of the Registrant. 23.1* Consent of KPMG LLP, Independent Registered Public Accounting Firm . 31.1* Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2* Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97 AbCellera Biologics Inc. 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. 101.SCH* Inline XBRL Taxonomy Extension Schema Document 107 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) ___________________________________________ * Filed herewith † Portions of this exhibit (indicated by asterisks or shown in black) have been omitted in accordance with the rules of the Securities and Exchange Commission. # Indicates a management contract or any compensatory plan, contract or arrangement. 108 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized . ABCELLERA BIOLOGICS INC. Date: February 27, 2025 By: /s/ Carl L. G. Hansen Carl L.G. Hansen, Ph.D. Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated. Name Title Date /s/ Carl L. G. Hansen Chief Executive Officer and Director ( Principal Executive Officer ) February 27, 2025 Carl L. G. Hansen, Ph.D. /s/ Andrew Booth Chief Financial Officer ( Principal Financial Officer and Principal Accounting Officer ) February 27, 2025 Andrew Booth /s/ Véronique Lecault Chief Technology Officer and Director February 27, 2025 Véronique Lecault, Ph.D. /s/ Andrew Lo Director February 27, 2025 Andrew Lo, Ph.D. /s/ Michael Hayden Director February 27, 2025 Michael Hayden, Ph.D. /s/ John S. Montalbano Director February 27, 2025 John S. Montalbano 109 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm F- 2 Consolidated Balance Sheets as of December 31, 202 3 and 202 4 F- 6 Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the Years ended December 31, 202 2 , 2 02 3 and 202 4 F- 7 Consolidated Statements of Stockholders’ Equity for the Years ended December 31, 202 2 , 202 3 and 202 4 F- 8 Consolidated Statements of Cash Flows for the Years ended December 31, 202 2 , 202 3 and 202 4 F- 9 Notes to Consolidated Financial Statements F- 10 F-1 Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors AbCellera Biologics Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of AbCellera Biologics Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income (loss) and comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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. 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. F-2 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 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. /s/ KPMG LLP We have served as the Company's auditor since 2017. Vancouver, Canada February 27, 2025 F-3 Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors AbCellera Biologics Inc.: Opinion on Internal Control Over Financial Reporting We have audited AbCellera Biologics Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income (loss), comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements), and our report dated February 27, 2025 expressed an “ unqualified opinion on those consolidated financial statements”. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. F-4 /s/ KPMG LLP Vancouver, Canada February 27, 2025 F-5 AbCellera Biologics Inc. Consolidated Balance Sheets (All figures in U.S. dollars. Amounts are expressed in thousands except share data.) December 31, 2023 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 133,320 $ 156,325 Marketable securities 627,265 469,289 Total cash, cash equivalents, and marketable securities 760,585 625,614 Accounts and accrued receivable 30,590 33,616 Restricted cash 25,000 25,000 Other current assets 55,810 67,140 Total current assets 871,985 751,370 Long-term assets: Property and equipment, net 287,696 340,429 Intangible assets, net 120,425 42,113 Goodwill 47,806 47,806 Investments in equity accounted investees 65,938 82,297 Other long-term assets 94,244 96,538 Total long-term assets 616,109 609,183 Total assets $ 1,488,094 $ 1,360,553 Liabilities and shareholders' equity Current liabilities: Accounts payable and other current liabilities $ 49,580 $ 55,004 Contingent consideration payable 50,475 8,087 Deferred revenue 18,958 13,521 Total current liabilities 119,013 76,612 Long-term liabilities: Operating lease liability 71,222 60,743 Deferred revenue 8,195 5,700 Deferred government contributions 95,915 149,893 Contingent consideration payable 4,913 — Deferred tax liability 30,612 10,052 Other long-term liabilities 5,906 1,469 Total long-term liabilities 216,763 227,857 Total liabilities 335,776 304,469 Commitments and contingencies Shareholders' equity: Common shares: no par value, unlimited authorized shares at December 31, 2023 and December 31, 2024: 290,824,970 and 295,757,002 shares issued and outstanding at December 31, 2023 and December 31, 2024, respectively 753,199 777,171 Additional paid-in capital 121,052 166,361 Accumulated other comprehensive loss ( 1,720 ) ( 4,378 ) Accumulated earnings 279,787 116,930 Total shareholders' equity 1,152,318 1,056,084 Total liabilities and shareholders' equity $ 1,488,094 $ 1,360,553 The accompanying notes are an integral part of these consolidated financial statements. F-6 AbCellera Biologics Inc. Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (All figures in U.S. dollars. Amounts are expressed in thousands except share and per share data.) Year ended December 31, 2022 2023 2024 Revenue: Research fees $ 40,802 $ 35,556 $ 26,284 Licensing revenue 696 969 1,049 Milestone payments 900 1,500 1,500 Royalty revenue 443,026 — — Total revenue 485,424 38,025 28,833 Operating expenses: Royalty fees 66,436 — — Research and development (1) 107,879 175,658 167,259 Sales and marketing (1) 11,270 14,180 12,779 General and administrative (1) 55,485 60,999 72,711 Depreciation, amortization, and impairment 27,843 24,395 90,850 Total operating expenses 268,913 275,232 343,599 Income (loss) from operations 216,511 ( 237,207 ) ( 314,766 ) Other (income) expense Interest income ( 16,079 ) ( 42,247 ) ( 38,473 ) Grants and incentives ( 10,554 ) ( 14,155 ) ( 13,620 ) Other (Note 15) 4,045 ( 6,776 ) ( 62,278 ) Total other income ( 22,588 ) ( 63,178 ) ( 114,371 ) Net earnings (loss) before income tax 239,099 ( 174,029 ) ( 200,395 ) Income tax (recovery) expense 80,580 ( 27,631 ) ( 37,538 ) Net earnings (loss) $ 158,519 $ ( 146,398 ) $ ( 162,857 ) Foreign currency translation adjustment ( 1,671 ) ( 329 ) ( 2,658 ) Comprehensive income (loss) $ 156,848 $ ( 146,727 ) $ ( 165,515 ) Net earnings (loss) per share Basic $ 0.56 $ ( 0.51 ) $ ( 0.55 ) Diluted $ 0.50 $ ( 0.51 ) $ ( 0.55 ) Weighted-average common shares outstanding Basic 285,056,606 289,166,486 294,327,532 Diluted 314,827,255 289,166,486 294,327,532 The accompanying notes are an integral part of these consolidated financial statements. 1 Exclusive of depreciation, amortization, and impairment F-7 AbCellera Biologics Inc. Consolidated Statements of Stockholders’ Equity (All figures in U.S. dollars. Amounts are expressed in thousands except share data.) Common Shares Additional Paid-in Capital Accumulated Earnings Accumulated Other Comprehensive Income (loss) Total Shareholders' Equity Shares Amount Balances as of December 31, 2021 283,257,104 $ 722,430 $ 35,357 $ 267,666 $ 280 $ 1,025,733 Shares issued and restricted stock units ("RSUs") vested under stock option plan 3,594,491 11,935 ( 10,720 ) – – 1,215 Stock-based compensation expense – – 49,481 – – 49,481 Foreign currency translation adjustment – – – – ( 1,671 ) ( 1,671 ) Net earnings – – – 158,519 – 158,519 Balances as of December 31, 2022 286,851,595 $ 734,365 $ 74,118 $ 426,185 $ ( 1,391 ) $ 1,233,277 Shares issued and restricted stock units ("RSUs") vested under stock option plan 3,973,375 18,834 ( 17,250 ) – – 1,584 Stock-based compensation expense – – 64,184 – – 64,184 Foreign currency translation adjustment – – – – ( 329 ) ( 329 ) 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 Shares issued and restricted stock units ("RSUs") vested under stock option plan 4,932,032 23,972 ( 22,272 ) – – 1,700 Stock-based compensation expense – – 67,581 – – 67,581 Foreign currency translation adjustment – – – – ( 2,658 ) ( 2,658 ) Net loss – – – ( 162,857 ) – ( 162,857 ) Balances as of December 31, 2024 295,757,002 $ 777,171 $ 166,361 $ 116,930 $ ( 4,378 ) $ 1,056,084 The accompanying notes are an integral part of these consolidated financial statements. F-8 AbCellera Biologics Inc. Consolidated Statements of Cash Flows (Expressed in thousands of U.S. dollars.) December 31, 2022 December 31, 2023 December 31, 2024 Cash flows from operating activities: Net earnings (loss) $ 158,519 $ ( 146,398 ) $ ( 162,857 ) Cash flows from operating activities: Depreciation of property and equipment 8,953 12,758 12,537 Amortization and impairment of intangible assets 18,890 11,637 78,312 Amortization of operating lease right-of-use assets 5,259 6,499 6,149 Stock-based compensation 49,481 64,183 67,581 Fair value (gain) loss on contingent consideration and investments 3,091 ( 8,018 ) ( 64,727 ) Other 3,342 2,237 ( 19,708 ) Changes in operating assets and liabilities: Research fee and grant receivable ( 22,715 ) ( 45,933 ) ( 75,119 ) Accrued royalties receivable 129,171 9,273 — Income taxes (payable) receivable ( 88,609 ) 30,464 6,651 Accounts payable and accrued liabilities ( 2,094 ) ( 15,104 ) 10,635 Deferred revenue 6,183 ( 13,976 ) ( 7,931 ) Deferred grant income 9,264 39,521 33,967 Other assets ( 1,375 ) 8,980 5,954 Net cash provided by (used in) operating activities 277,360 ( 43,877 ) ( 108,556 ) Cash flows from investing activities: Purchases of property and equipment ( 70,660 ) ( 76,947 ) ( 78,396 ) Purchase of intangible assets ( 2,000 ) ( 560 ) — Purchase of marketable securities ( 763,982 ) ( 1,021,510 ) ( 765,086 ) Proceeds from marketable securities 510,631 910,937 937,882 Receipt of grant funding 16,434 25,311 35,708 Investment in and loans to equity accounted investees ( 25,679 ) ( 13,690 ) ( 19,626 ) 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 and other ( 4,383 ) ( 1,234 ) ( 729 ) Proceeds from long-term liabilities and exercise of stock options 2,755 11,590 13,498 Net cash provided by (used in) financing activities ( 1,628 ) 10,356 12,769 Effect of exchange rate changes on cash and cash equivalents ( 9,599 ) 589 ( 2,617 ) 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 Cash and cash equivalents and restricted cash, end of period $ 414,650 $ 160,610 $ 183,615 Restricted cash included in other assets 3,115 2,290 2,290 Total cash, cash equivalents, and restricted cash shown on the balance sheet $ 411,535 $ 158,320 $ 181,325 Supplemental disclosure of non-cash investing and financing activities Property and equipment in accounts payable 5,868 13,625 12,767 Right-of-use assets obtained in exchange for operating lease obligation 50,694 1,199 1,898 The accompanying notes are an integral part of these consolidated financial statements. F-9 AbCellera Biologics Inc. Notes to Consolidated Financial Statements (Expressed in thousands of U.S. dollars except share and per share data) 1. 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 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 . 2. Basis of presentation These consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All intercompany transactions and balances have been eliminated. 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. References to “$” are to U.S. dollars and references to “C$” and “CAD” are to Canadian dollars. 3. Significant accounting policies Principles of consolidation The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and variable interest entities (“VIE”) when the Company possesses both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. Intercompany accounts and transactions have been eliminated. The Company entered into a participation agreement with a segregated accounts company for purposes of Director and Officer’s insurance. The Company contributed $ 25.0 million to the segregated account, representing the Company’s maximum loss exposure under the participation agreement, for security for a letter of credit issued to a third-party insurer. While the agreement is cancellable by the Company, the funds cannot be transferred to other parts of the Company, therefore the funds are presented in current assets on the consolidated balance sheets as Restricted Cash. Use of estimates The preparation of the consolidated financial statements in accordance with U.S. 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 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. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could significantly differ from those estimates. Revenue recognition The Company accounts for revenue from contracts with customers, which includes the identification and assessment of the goods and/or services promised within a contract to evaluate which promises are distinct from each other. 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 F-10 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. An option to acquire additional goods and/or services is evaluated on both quantitative and qualitative aspects to determine if such an option provides a material right to the customer that it would not have received without entering into the contract. If so, the option is accounted for as a separate performance obligation. If not, the option is considered a marketing offer and is accounted for as a separate contract upon the customer’s election. The transaction price generally includes fixed fees due at contract inception as well as fixed fees payable at the beginning and end of different phases of the discovery research support services performed. Where a fixed fee due at contract inception is an option to obtain additional goods or services and is considered to be a material right, we allocate the transaction price to the optional goods or services we expect to provide to the corresponding consideration we expect to receive. 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 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. The Company allocates the transaction price to each performance obligation identified in the contract based on relative observable standalone selling prices. Revenue is recognized based on the amount of the transaction price that is allocated to each respective performance obligation when or as the performance obligation is satisfied by transferring a promised good and/or service to the customer. The Company generally uses 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. Due to different types of end customers and nature of work involved, revenue contracts require formal inspection and approval of experiments and research plans at each stage of work, therefore, the output method is the most faithful depiction of the Company’s performance. Royalty revenue is recognized in the period in which the obligation is satisfied and the corresponding sales by our corporate partners occur. 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. Collaborative arrangements We may enter into collaborative and other similar arrangements with respect to the development and commercialization of potential drug candidates. Collaborative arrangements are contractual agreements with third parties that involve a joint operating activity, typically a research and/or commercialization effort, where both we and our partner are active participants in the activity and are exposed to the significant risks and rewards of the activity. Our rights and obligations under our collaborative arrangements vary and typically involve the partners to jointly perform research and development activities and/or participate together in commercializing, marketing, promoting, manufacturing and/or distributing a drug product. These arrangements typically include milestone as well as royalty or profit-share payments, contingent upon the occurrence of certain future events linked to the success of the asset in development, as well as expense reimbursements from or payments to the collaboration partner. 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. 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 collaborative arrangements to date. F-11 Segmented and enterprise-wide information 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, 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. Government contributions The Company receives government contributions that are comprised of non-repayable, conditionally repayable, and repayable portions which are dependent upon the Company’s co-investment expenditures over the term of the agreements, and are accounted for when it is probable that the grant will be received, and all associated conditions will be complied with. Non-repayable and conditionally repayable portions, where the conditions for repayment are non-probable, are accounted for as government grants. Government grants for expenditures on eligible research, development and capital expenditures are recognized ratably over the benefit period of the related expenditure for which the grants are intended to compensate in grants and incentives in other income. For repayable portions, the Company considers the contractual terms of the repayable portion of a below-market rate government contribution, and has determined that the interest rate is affected by legal restrictions prescribed by a governmental agency. Therefore, the Company does not impute interest on the repayable portion of the government contribution, and it is measured equal to the proceeds received or accrued. The determination of the amount of the claim and the corresponding receivable and liability amounts require management's judgement and interpretation of eligible expenditures and repayment conditions in accordance with the terms of the programs. The reimbursement claims submitted by the Company are subject to review by the relevant government agencies. Functional currency The reporting currency of the Company and its subsidiaries is the U.S. dollar. The functional currency of the Company and its subsidiaries is the U.S. dollar, and for the Dayhu JV and Beedie JV, is the Canadian dollar. Transactions in foreign currencies are translated to the functional currency at exchange rates at the date of the transactions. Period end balances of monetary assets and liabilities in foreign currencies are translated to the functional currency using the period end foreign currency rates. 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 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 F-12 these joint ventures’ assets and liabilities are included in foreign currency translation adjustment in the consolidated statements of income (loss) and comprehensive income (loss) Cash and cash equivalents and restricted cash Cash and cash equivalents are defined as cash on hand and deposits held with banks with maturity dates of less than three months. Cash and cash equivalents that are restricted as to withdrawal or usage, in accordance with specific commercial arrangements, are presented as restricted cash on the consolidated balance sheets. As of December 31, 2023, we had $ 127.5 million cash, $ 5.8 million cash equivalents and $ 27.3 million restricted cash. Of the total restricted cash at December 31, 2023, $ 25.0 million is presented as a current asset, $ 1.6 million is included within other current assets, and $ 0.7 million is included within other long-term assets on the consolidated balance sheets. As of December 31, 2024, we had $ 127.1 million cash, $ 29.2 million cash equivalents, and $ 27.3 million restricted cash. Of the total restricted cash at December 31, 2024, $ 25.0 million is presented as a current asset, $ 2.1 million is included within other current assets, and $ 0.2 million is included within other long-term assets on the consolidated balance sheets. Marketable securities The Company’s marketable securities consist of U.S. 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 Non-marketable securities not accounted for under the equity method are accounted for under the measurement alternative. 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 $ 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. 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 Property and equipment are recorded at cost less accumulated depreciation. Expenditures for major additions and improvements to property and equipment are capitalized and repairs and maintenance costs are expensed as incurred. 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: Asset Rate 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. Costs for capital assets not yet placed into service are capitalized as construction-in-progress and depreciated once placed into service. F-13 Intangible assets Costs incurred to acquire patents and to prosecute and maintain intellectual property rights are expensed as incurred to general and administrative expense due to the uncertainty surrounding the drug development process and the uncertainty of future benefits. Patents, and intellectual property acquired from third parties are capitalized and amortized over the remaining life of the patent, if related to approved products or if there are alternative future uses for the underlying technology. No patent or intellectual property costs have been capitalized to date. 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. All research and development costs incurred subsequent to the acquisition of IPR&D are expensed as incurred. Definite lived intangible assets are amortized using the straight-line method over the estimated useful lives of the assets as follows: Asset Useful Life License 3 - 10 years Technology 3 - 20 years 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 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. 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 group as an estimate of fair value. 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. The Company has the option of performing a qualitative assessment to first determine whether the quantitative impairment test is necessary. This involves an assessment of qualitative factors to determine the existence of events or circumstances that would indicate whether it is more likely than not that the carrying amount of the indefinite-lived intangible asset is less than its fair value. If the qualitative assessment indicates it is not more likely than not that the carrying amount is less than its fair value, a quantitative impairment test is not required. Where a quantitative impairment test is required, the procedure is to compare the indefinite-lived intangible asset’s fair value with its carrying amount. 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 . F-14 Leases 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. Corresponding right-of-use assets are recognized consisting of the lease liabilities, initial direct costs and any lease incentive payments. Lease liabilities are drawn down as lease payments are made and right-of-use assets are depreciated over the term of the lease. Operating lease expenses are recognized on a straight-line basis over the term of the lease, consisting of interest accrued on the lease liability and depreciation of the right-of-use asset. Lease payments are remeasured when a contingency upon which some or all of the variable lease payments to be paid over the remainder of the lease is resolved. Lease payments on short-term operating leases with lease terms twelve months or less are recognized on a straight-line basis over the lease term. The Company has elected to not separate non-lease elements embedded in its lease agreements. For the years ended December 31, 2023, and December 31, 2024, all of our leases are classified as operating leases. Research and development costs Research and development costs are expensed in the period incurred. 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. Royalty fees Royalty fees consist of certain contractual royalty payments to our strategic partners upon receipt of royalty revenue based on our customers’ third-party net sales. Royalty fees are recorded when the third-party sale occurs. Income taxes The Company accounts for income taxes under the deferred asset and liability method, which requires the recognition of deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) for the expected future tax consequences of existing differences between the financial statement and tax bases of assets and liabilities, and net operating loss and tax credit carryforwards for tax purposes. The DTAs and DTLs are computed using enacted tax rates and the effect of a change in enacted tax rates on DTAs and DTLs is recognized in income in the period of enactment. The Company recognizes DTAs to the extent that these assets are more likely than not to be realized. In making such a determination, all available positive and negative evidence are considered, including, but not limited to, future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. Valuation allowances are established for certain deferred tax assets to reduce the DTA to a level which, more-likely-than-not, will be realized. Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions, in the Company’s judgement, do not meet a more-likely-than-not threshold based on the technical merits of the positions. The Company realizes the largest amount of the tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company files consolidated federal income tax returns in the United States, which includes eligible subsidiaries. In addition, we file income tax returns in state, local and foreign jurisdictions as applicable. The Company's income tax provision is calculated and allocated under the separate return method. Income tax credit (“ITC”) policy 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. Under this method, the ITCs subject to income tax accounting are recognized as a reduction to income tax expense in the year they are earned. Stock-based compensation The Company accounts for awards of stock options and shares to directors, employees, consultants, and non-employees using the fair value method. Under this method, stock-based compensation expense is measured at the fair value at the date of grant and is expensed over the award’s vesting period. The requisite service period generally equals the vesting period of the awards. Equity classified awards are measured using their grant date fair value. 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- F-15 based compensation previously recorded in additional paid-in capital. The effects of forfeitures of options and share awards are accounted for as they occur. Equity method investments The Company accounts for its investments in equity-accounted joint ventures using the equity method. Under the equity method, the initial cost of the investment is adjusted for subsequent additional investments and the Company’s proportionate share of earnings or losses and distributions. The Company does not control the equity-accounted investments and as a result, the Company does not have the unilateral ability to determine whether cash generated by its equity-accounted investees is retained within the equity-investee or is distributed to the Company and other owners. In addition, equity-accounted investees do not control the timing of such distributions to the Company and other owners. The Company evaluates its investments in joint ventures for impairment when events or circumstances indicate that the carrying value of such investments may have experienced an other-than-temporary decline in value below carrying value. If the estimated fair value is less than the carrying value, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in other income in the Company’s consolidated statements of income (loss) and comprehensive income (loss). Net earnings (loss) per share 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. Changes in significant accounting policies Recent accounting pronouncements adopted 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 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. F-16 4. Net earnings (loss) per share Basic and diluted net earnings (loss) per share was calculated as follows: Year Ended December 31, 2022 2023 2024 Basic earnings (loss) per share Net earnings (loss) $ 158,519 $ ( 146,398 ) $ ( 162,857 ) Weighted-average common shares outstanding - basic 285,056,606 289,166,486 294,327,532 Net earnings (loss) per share - basic $ 0.56 $ ( 0.51 ) $ ( 0.55 ) Diluted earnings (loss) per share Net earnings (loss) $ 158,519 $ ( 146,398 ) $ ( 162,857 ) Weighted-average common shares outstanding - basic 285,056,606 289,166,486 294,327,532 Stock options and RSUs 29,770,649 – – Weighted-average common shares outstanding - diluted 314,827,255 289,166,486 294,327,532 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 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. 5. Other current assets December 31, 2023 2024 Taxes receivable $ 33,792 $ 26,534 Prepaid expenses and other 22,018 8,626 Loans receivable from JV partner (Note 8) – 31,980 Total other current assets $ 55,810 $ 67,140 6. Property and equipment, net Property and equipment, net consisted of the following: December 31, 2023 2024 Land $ 53,405 $ 53,405 Building 43,947 52,913 Equipment 73,867 84,288 Leasehold improvements 73,944 122,892 Operating lease right-of-use assets 73,141 66,649 Property and equipment 318,304 380,147 Less accumulated depreciation ( 30,608 ) ( 39,718 ) Property and equipment, net $ 287,696 $ 340,429 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 F-17 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. 7. Intangible assets Intangible Assets Intangible assets consisted of the following: December 31, 2023 December 31, 2024 Gross carrying amount Accumulated amortization Net book value Gross carrying amount Accumulated amortization Net book value License $ 38,433 $ 26,861 $ 11,572 $ 38,433 $ 29,111 $ 9,322 Technology 52,700 7,857 44,843 52,700 19,909 32,791 IPR&D 64,010 — 64,010 — — — $ 155,143 $ 34,718 $ 120,425 $ 91,133 $ 49,020 $ 42,113 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. 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 : Amortization Expense 2025 $ 3,732 2026 3,732 2027 3,732 2028 3,732 2029 3,732 $ 18,660 8. 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. F-18 Dayhu JV During 2020, the Company entered into a joint venture with Dayhu ("Dayhu JV"). 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. 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. Beedie JV 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. In June 2022, the Company made a commitment to our partner Beedie for a land loan of up to CAD $ 7.5 million ($ 5.2 million at December 31, 2024) plus a construction loan for up to 80 % of Beedie’s share of construction costs. The commitment is at a rate referenced to market yields as defined in the agreement, and repayable upon substantial completion of construction in early 2026, or upon the triggering of certain repayment events as defined in the agreement. The loan is secured by the underlying land and existing and future assets of the Beedie JV. 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. 9. Current accounts payable and other current liabilities December 31, 2023 2024 Accounts payable and accrued liabilities $ 28,603 $ 34,350 Current portion of operating lease liability 6,158 4,621 Payroll liabilities 7,707 8,375 Current portion of deferred government contribution 7,112 7,658 Total accounts payable and other current liabilities $ 49,580 $ 55,004 10. Shareholders’ Equity Common Shares As of December 31, 2023 and 2024, the Company’s articles of the corporation, as amended and restated, authorized the Company to issue unlimited voting common shares, each with no par value per share. As of each balance sheet date, common shares consisted of the following: December 31, 2023 December 31, 2024 Shares authorized Shares issued and outstanding Shares authorized Shares issued and outstanding Common shares Unlimited 290,824,970 Unlimited 295,757,002 F-19 Each voting common share entitles the holder to one vote on all matters submitted to a vote of the Company’s shareholders. Common shareholders are entitled to receive dividends, if any, as may be declared by the board of directors. Through December 31, 2024, no cash dividends had been declared or paid by the Company. Stock-based compensation Seventh Amended and Restated Stock Option Plan: We maintain the AbCellera Biologics Inc. 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. participants, either incentive stock options and/or nonstatutory stock options) to employees, directors, and consultants, subject in each case to compliance with applicable tax laws. Our 2020 Share option and Incentive Plan, or 2020 Plan, became effective on the date immediately prior to the date on which our initial S-1 registration statement was declared effective by the SEC on December 10, 2020. As a result, we do not expect to grant any additional awards under the Pre-IPO Plan following that date. Any awards granted under the Pre-IPO Plan will remain subject to the terms of our Pre-IPO Plan and applicable award agreements. 2020 Share Option and Incentive Plan: Our 2020 Plan was approved by our board of directors on November 18, 2020, and approved by our shareholders on December 1, 2020, and became effective on the date immediately prior to the date on which our initial S-1 registration statement was declared effective by the SEC on December 10, 2020. The 2020 Plan replaced our Pre-IPO Plan, as our board of directors will not make additional awards under the Pre-IPO Plan. The shares we issue under the 2020 Plan will be authorized but unissued shares or shares that we reacquire and typically vest over four years . The common shares underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of shares, expire or are otherwise terminated (other than by exercise) under the 2020 Plan and the Pre-IPO Plan will be added back to the common shares available for issuance under the 2020 Plan. The maximum aggregate number of common shares that may be issued as incentive share options may not exceed the Initial Limit cumulatively increased on January 1, 2022, and on each January 1 thereafter by the lesser of (i) the Annual Increase for such year or (ii) 21,280,000 common shares. As of December 31, 2024, the number of shares available for issuance under the 2020 Plan was 33,899,329 which includes awards granted and outstanding under the Pre-IPO Plan that are forfeited after December 10, 2020. The following table summarizes the Company’s stock options granted under the Pre-IPO Plan: Number of Shares Weighted- Average Exercise Price Weighted- Average Contractual Term (years) Outstanding as of December 31, 2023 30,647,575 $ 0.94 5.28 Granted — — Exercised ( 3,674,140 ) 0.52 Forfeited ( 240,979 ) 1.19 Outstanding as of December 31, 2024 26,732,456 $ 0.99 4.30 Options exercisable as of December 31, 2024 26,568,482 $ 0.99 4.29 F-20 The following table summarizes the Company’s stock options granted under the 2020 Plan: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Outstanding as of December 31, 2023 13,992,304 $ 13.82 8.35 Granted 11,112,021 5.15 Exercised — — Forfeited ( 1,095,661 ) 11.17 Outstanding as of December 31, 2024 24,008,664 $ 9.93 8.11 Options exercisable as of December 31, 2024 8,664,451 $ 14.90 7.10 The intrinsic value of options exercised during 2022, 2023, and 2024 was $ 34.4 million, $ 18.5 million and $ 14.7 million, respectively. As of December 31, 2024, there was $ 61.1 million of unrecognized compensation cost related to unvested stock options granted under the Plans, which is expected to be recognized over a weighted average period of 2.3 years. Restricted Share Units T he Company grants Restricted Share Units (RSUs) to certain employees that vest over a period of four years , in the amount of one-quarter each year on the anniversary of the grant date and a contractual term of ten years . RSUs are equity-settled on each vesting date, subject to the grantee’s continued employment with the Company on the vesting date. The fair value of RSUs granted was calculated by using the Company’s closing stock price on the grant date. The following table summarizes the Company’s RSUs granted under the 2020 Plan: Number of Shares Weighted- Average Grant Date Fair Value Outstanding as of December 31, 2023 4,075,590 $ 11.61 Granted 4,269,125 5.16 Vested and settled ( 1,257,892 ) 12.54 Forfeited ( 456,990 ) 8.07 Outstanding as of December 31, 2024 6,629,833 $ 7.53 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. Stock-based compensation expense was classified in the consolidated statements of income (loss) and comprehensive income (loss) as follows: Year ended December 31, 2022 2023 2024 Research and development expenses $ 24,327 $ 31,781 $ 30,779 Sales and marketing expenses 3,134 5,129 5,781 General and administrative expenses 22,020 27,274 31,021 $ 49,481 $ 64,184 $ 67,581 F-21 The fair value of each option award is determined on the date of grant using the Black-Scholes option pricing model. The weighted-average valuation assumptions for stock options granted in the period are as follows: Year ended December 31, 2022 2023 2024 Average risk-free interest rate 1 2.86 % 3.73 % 3.94 % Expected volatility 2 70.0 % 70.0 % 70.0 % Average expected term (years) 3 6.24 6.25 6.22 Expected dividend yield 4 0.0 % 0.0 % 0.0 % Weighted average fair value of options granted 5 $ 7.77 $ 5.78 $ 3.42 (1) This rate is from federal government marketable bonds for each option grant during the year, having a term that most closely resembles the expected term of the option. (2) Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. As the Company does not yet have sufficient history of its own volatility, the Company has identified several public entities of similar complexity and stage of development and calculates historical volatility using the volatility of these companies. (3) This is the period of time that the options granted are expected to remain unexercised. Options granted have a maximum term of ten years . 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 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. 11. Revenue The disaggregated revenue categories are presented on the consolidated statements of income (loss) and comprehensive income (loss). Deferred Revenue Deferred revenue represents payments received for performance obligations not yet satisfied and are presented as current or long-term in the accompanying consolidated balance sheets based on the expected timing of satisfaction of the underlying goods and/or services. Deferred revenue outstanding at each respective period is as follows: December 31, 2023 2024 Deferred revenue $ 27,153 $ 19,221 During the years ended December 31, 2022, 2023 and 2024, the Company recognized $ 11.5 million, $ 17.0 million and $ 20.6 million, respectively, of revenue that had been included in deferred revenue in the previous year. The Company entered into a research collaboration and license agreement with Eli Lilly pursuant to which the Company will perform discovery research for several targets for Eli Lilly to develop and commercialize. Under the agreement, the Company is entitled to receive an aggregate of up to $ 29.0 million of milestone payments as well as royalties in the low single digits based on net sales for non-COVID-19 targets and in the low- to mid-teens for aggregate sales below $ 125.0 million and mid-teens to mid-twenties on aggregate sales above $ 125.0 million. The agreement resulted in upfront payments of $ 29.2 million, of which $ 14.3 million was included in deferred revenue at December 31, 2022 . 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, 2024, the Company received $ 7.2 million in additional payments and recognized $ 12.3 million of revenue in F-22 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. Of the remaining deferred revenue balance of $ 12.0 million, which is related to various other agreements, approximately $ 8.8 million is expected to be recognized in revenue in the next 12 months. 12. Government Contributions In May of 2020, the Company received a funding commitment from the Government of Canada under Innovation, Science and Economic Development’s (ISED) Strategic Innovation Fund (SIF) for a total of CAD $ 175.6 million ($ 125.6 million), collectively "Government Contribution 1" which is intended to support research and development efforts related to the discovery of antibodies to treat COVID-19, and to build technology and manufacturing infrastructure for antibody therapeutics against future pandemic threats. In May of 2023, the Company entered into multi-year contribution agreements with the Government of Canada and the Government of British Columbia for a total of CAD $ 300.0 million ($ 222.3 million), collectively "Government Contribution 2." These investments are intended to build new capabilities in Canada to develop, manufacture, and deliver antibody medicines to patients through Phase 1 clinical trials and build expertise in translational science, technical operations, and clinical operations and research. Under these contribution agreements, the Company has agreed to certain financial and non-financial covenants and other obligations, including cross default provisions associated with other Canadian funding, and restrictive covenants on dividend payments or other shareholder distributions that would prevent the Company from satisfying its obligations under the arrangement. 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. 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. Upon an event of default, subject to applicable cure, the Governments of Canada and British Columbia may exercise a number of remedies, including suspending or terminating funding under the respective agreements, demanding repayment of funding previously received and/or terminating the respective agreements. The government contributions and their associated conditional repayments are not secured by any of AbCellera’s assets or those of the projects. Government Contribution 1 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 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 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. The repayable funding is payable over fifteen years and the conditionally repayable portion repaid based on a computed percentage rate of the Company’s revenue over a period of up to fifteen years , at a factor of up to 1.4 times the original conditionally repayable grant. The agreement will expire on the later of April 30, 2047, or the date of the last repayment, unless earlier terminated. 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 F-23 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 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 At December 31, 2023 and 2024, the Company recognized the following on the consolidated balance sheets: December 31, 2023 Deferred Government Contribution Accounts Receivable Government Grant 1 Total Non-repayable Conditionally Repayable 2 Repayable 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 Long-term $ 9,106 $ 10,361 $ 69,134 $ 16,420 $ 95,915 1 Government Contributions are amortized into other income over the weighted average life of approximately 8 years. 2 No amounts have been accrued related to the repayment terms as the conditions are estimated to be non-probable. December 31, 2024 Deferred Government Contribution Accounts Receivable Government Grant 1 Total Non-repayable Conditionally Repayable 2 Repayable 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 Other Government Grants — 987 — — 987 Total $ 50,691 $ 13,678 $ 106,895 $ 36,978 $ 157,551 Current $ 21,709 $ 4,125 $ 3,533 $ — $ 7,658 Long-term $ 28,982 $ 9,553 $ 103,362 $ 36,978 $ 149,893 1 Government Contributions are amortized into other income over the weighted average life of approximately 8 years. 2 No amounts have been accrued related to the repayment terms as the conditions are estimated to be non-probable. F-24 13. Income taxes a. For financial reporting purposes, income (loss) before income taxes includes the following components: December 31, 2022 2023 2024 Canadian $ 279,771 $ ( 146,322 ) $ ( 189,474 ) Foreign ( 40,672 ) ( 27,707 ) ( 10,921 ) Total $ 239,099 $ ( 174,029 ) $ ( 200,395 ) The expense (recovery) for income taxes consists of: December 31, 2022 2023 2024 Current Canadian $ 81,392 $ ( 29,591 ) $ ( 18,460 ) Foreign 1,300 — 671 82,692 ( 29,591 ) ( 17,789 ) Deferred and other Canadian 2,322 4,526 749 Foreign ( 4,434 ) ( 2,566 ) ( 20,498 ) ( 2,112 ) 1,960 ( 19,749 ) Income tax expense (recovery) $ 80,580 $ ( 27,631 ) $ ( 37,538 ) December 31, 2022 2023 2024 Current tax expense (recovery) $ 82,692 $ ( 29,591 ) $ ( 17,789 ) Deferred tax expense (recovery) ( 2,112 ) 1,960 ( 19,749 ) Total tax expense (recovery) $ 80,580 $ ( 27,631 ) $ ( 37,538 ) b. The consolidated effective income tax rate differs from the expected Canadian statutory tax rate of 27% (2022, 2023, 2024: 27%). Reconciliation between the expected tax rate on income from operations and the statutory tax rate was as follows: December 31, 2022 2023 2024 Net earnings (loss) before income taxes $ 239,099 $ ( 174,029 ) $ ( 200,395 ) Combined statutory tax rate 27 % 27 % 27 % Expected income tax expense (recovery) at statutory rates 64,557 ( 46,988 ) ( 54,107 ) Stock-based compensation 11,710 17,081 18,226 Change in valuation allowance 8,318 11,485 15,205 Tax rate differential ( 1,911 ) ( 1,042 ) 1,077 Prior year tax assessments and adjustments 3,529 ( 344 ) 774 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 Income tax expense (recovery) $ 80,580 $ ( 27,631 ) $ ( 37,538 ) F-25 c. Deferred income tax assets (“DTAs”) and liabilities (“DTLs”) result from the temporary differences between assets and liabilities recognized for financial statement and income tax purposes. The significant components of the Company’s deferred income tax assets and liabilities were as follows: December 31, 2023 2024 Deferred tax assets Government contributions $ 25,630 $ 33,308 Financing fee 3,092 1,352 Operating lease liability 17,211 15,648 Net operating losses carried forward 7,256 15,631 Research and development expenditures and related credits 24,303 33,566 Other 3,725 4,036 81,217 103,541 Deferred tax liabilities Property and equipment $ ( 17,303 ) $ ( 20,777 ) Intangibles ( 30,117 ) ( 9,592 ) Operating lease right-of-use assets ( 16,569 ) ( 15,862 ) Other ( 13,186 ) ( 17,453 ) ( 77,175 ) ( 63,684 ) 4,042 39,857 Less: valuation allowance ( 33,840 ) ( 49,909 ) Net deferred tax liability ( 29,798 ) ( 10,052 ) Deferred tax asset 814 — Deferred tax liability ( 30,612 ) ( 10,052 ) Net deferred tax assets (liability) $ ( 29,798 ) $ ( 10,052 ) d. 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. e. 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 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. f. In Australia, the Company has tax carryforward credits of $ 6.1 million. g. 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. h. 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, 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. F-26 14. Leases 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 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 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: December 31, 2023 December 31, 2024 Operating lease liabilities: Current portion, included in accounts payable and other liabilities $ 6,158 $ 4,621 Long-term portion 71,222 60,743 Total operating lease liabilities $ 77,380 $ 65,364 At December 31, 2024, the future minimum lease payments of the Company’s operating lease liabilities were as follows: Amount 2025 $ 7,824 2026 7,875 2027 7,776 2028 7,817 2029 7,918 Thereafter 48,155 As of December 31, 2024, the weighted-average remaining lease term is 11.0 years and the weighted-average discount rate used to determine the operating lease liabilities was approximately 5.1 %. The Company incurred total operating lease expenses, including fixed lease payments, of $ 7.1 million, $ 9.5 million and $ 9.1 million, and variable lease payments of $ 1.8 million, $ 1.1 million and $ 0.7 million during the years ended December 31, 2022, 2023 and 2024, respectively, and are included within operating expenses. 15. 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. GAAP that prioritizes those inputs to valuation techniques used to measure fair value based on the degree to which they are observable. The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices in active markets for identical assets and liabilities; Level 2 inputs, other than quoted prices included within Level 1, are observable for the asset or liability either directly or indirectly; 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, 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 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 F-27 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 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 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) 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 As part of the Company’s cash management strategy, the Company holds a diversified portfolio of high credit quality marketable securities that are available to support the Company’s operations. As of December 31, 2024, our marketable securities were rated A- or higher (or its equivalent) by at least two of the major rating agencies with a weighted average life of approximately 0.5 years. Level 2 marketable securities in the fair value hierarchy were based on quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs to determine fair value. There were no transfers between Level 1, Level 2 and Level 3 during the period. F-28 The following table presents information about the Company’s marketable securities that are measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values: Fair Value Measurements at December 31, 2023: Level 1 Level 2 Level 3 Total Marketable securities U.S. government agencies $ 142,674 $ — $ — $ 142,674 Certificate of deposit — 244,444 — 244,444 Commercial paper — 60,118 — 60,118 Corporate bonds — 128,519 — 128,519 Asset backed securities — 51,510 — 51,510 $ 142,674 $ 484,591 $ — $ 627,265 Fair Value Measurements at December 31, 2024: Level 1 Level 2 Level 3 Total Marketable securities U.S. government agencies $ 90,601 $ — $ — $ 90,601 Certificate of deposit — 90,632 — 90,632 Commercial paper — 53,757 — 53,757 Corporate bonds — 130,088 — 130,088 Asset backed securities — 104,211 — 104,211 $ 90,601 $ 378,688 $ — $ 469,289 16. Commitments, contingencies, and other From time to time, the Company may become involved in routine litigation arising in the ordinary course of business. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company does not have contingency reserves established for any litigation liabilities and any of the costs related to such legal proceedings are expensed as incurred. The Company may enter into certain agreements with strategic partners in the ordinary course of operations that may include contractual milestone payments related to the achievement of pre-specified research, development, regulatory and commercialization events and indemnification provisions, which are common in such agreements. 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. 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: Amount 1 2025 $ 36,210 2026 5,991 2027 5,991 2028 5,991 2029 5,991 Thereafter 120,662 1 Commitments related to the Beedie JV leased facility are $ 5,991 , $ 5,991 , $ 5,991 , $ 5,991 , and $ 120,662 , for years 2026, 2027, 2028, 2029, and thereafter, respectively. F-29 Restructuring Costs 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, and was paid in 2024 . 17. Financial Risk Management Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, marketable securities, restricted cash, and accounts and accrued receivable. Cash and cash equivalents, marketable securities, and restricted cash are invested with the primary objective being the preservation of capital and maintenance of liquidity. The guidelines on the diversification of the marketable securities portfolio and credit quality of financial instruments that the Company holds minimizes the exposure to concentration of credit risk. The Company further limits its exposure to credit loss by placing its cash and cash equivalents with multiple high credit quality financial institutions. The Company’s exposure to credit risk for accounts and accrued receivables is indicated by the carrying value of its accounts receivable and accrued receivables. We review our trade receivables, accrued revenue, and accrued royalties, and reserve for amounts if collectability is no longer reasonably assured based on an assessment of various factors including historical loss rates and expectations of forward-looking loss estimates. Any adjustments made to our historical loss experience reflect current differences in asset-specific risk characteristics and current economic conditions. At December 31, 2023 and 2024, accounts and accrued receivable amounts were due from 10 and 16 customers, respectively. Interest Rate Risk The Company’s exposure to interest rate risk is primarily attributable to its cash and cash equivalents, restricted cash, marketable securities, long-term contingent consideration payable and long-term operating lease liability. As of December 31, 2024, the Company had cash and cash equivalents of $ 156.3 million, restricted cash of $ 27.3 million, and marketable securities of $ 469.3 million, a majority of which was maintained in high credit quality and liquid bank accounts, term deposits, and held for trading marketable securities. The Company’s interest rate risk is affected by changes in the general level of interest rates, particularly because the majority of the Company’s investments are short-term in nature. Due to interest rates available to the Company, the short-term duration of the Company’s cash and cash equivalent holdings and marketable securities, and the low risk profile of the marketable securities, a 100 basis points change in interest rates would not have a material effect on the fair market value of cash, cash equivalents, restricted cash, and marketable securities. The Company also has the ability to hold the marketable securities until maturity, and therefore, the Company would not expect the Company’s operating results or cash flows to be affected to any significant degree by the effect of a sudden change in market interest rates. The Company does not enter into investments for speculative purposes and has not used any derivative financial instruments to manage interest rate exposure. The Company is further exposed to the risk that the fair value of the contingent consideration payable and operating lease liability will vary as a result of changes in market interest rates. In order to manage funding needs or capital structure goals, the Company may enter into arrangements that are subject to either fixed market interest rates set at the time of issue or floating rates determined by ongoing market conditions. Debt subject to variable interest rates exposes the Company to variability in interest expense, while debt subject to fixed interest rates exposes the Company to variability in the fair value of debt. To manage interest rate exposure, the Company may access various sources of financing and manages borrowings in line with debt ratings, liquidity needs, maturity schedule, and currency and interest rate profiles. Foreign Currency Risk The Company holds cash primarily in U.S. and Canadian dollars. The Company had Canadian denominated cash and cash equivalents of CAD $ 52.2 million and CAD $ 55.6 million as of December 31, 2023 and 2024, respectively. The Company incurs certain operating expenses and capital project investments, and carries accounts payable in currencies other than the U.S. dollar, primarily in Canadian dollars, and accordingly is subject to foreign exchange risk due to fluctuations in exchange rates. The Company does not use derivative instruments to hedge exposure to foreign exchange risk. The operating results and financial position of the Company are reported in U.S. dollars in the Company’s F-30 consolidated financial statements. The fluctuation of the U.S. dollar relative to the Canadian dollar will have an impact on the reported balances for net assets, net earnings and shareholders’ equity in the Company’s consolidated financial statements. Partner Program Counterparty Risk 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 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. 18. Related party transactions 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 and $ 0.2 million, of which was included in accounts payable at December 31, 2022, was paid in 2023. F-31