What changed in this filing

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Item 9A. Controls and Procedures

2024-02-20 compared with 2023-02-21 · 501 added, 384 removed, 693 unchanged (56% of the section changed)

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Other Information.

During the three months ended December 31, 2023, 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).

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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Directors, Executive Officers and Corporate Governance.

The information required by this item will be included in our definitive proxy statement with respect to our 2023 Annual Meeting of Shareholders to be filed with the SEC and is incorporated herein by reference.

The following table contains the name and age of our Directors and executive officers as of December 31, 2023.

Name Age Position Held

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

Montalbano, CFA 58 Director

Andrew Lo, Ph.

Peter Thiel 56 Director

Hansen, Ph.D.

49 Chief Executive Officer and Director

Véronique Lecault, Ph.D.

39 Chief Operating Officer and Director

Andrew Booth 50 Chief Financial Officer

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

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

Hayden has served as a member of our Board of Directors since September 2019.

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.

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.

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.

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.

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.

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.

Montalbano, CFA.

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

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

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.

Montalbano also served as Vice Chair of RBC Wealth Management from April 2015 to December 2016.

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.

Lo is the Charles E.

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

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

Lo currently serves on the Board of Directors of BridgeBio Pharma a clinical-stage biopharmaceutical company, and Atomwise, an AI-powered drug discovery company.

Lo holds a B.A.

in Economics from Yale University and a Ph.D.

in Economics from Harvard

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

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

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

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

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

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

Thiel holds a B.A.

in Philosophy from Stanford University and a J.D.

from Stanford Law School.

We believe Mr.

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

Hansen, Ph.D.

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.

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.

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.

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.

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.

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.

Lecault has also served as a director of our wholly owned Australian biotechnology subsidiary, AbCellera Australia Pty.

Ltd., since September 2019.

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.

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.

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

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.

Booth was at GE from 2004 to 2009.

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

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

in Engineering Physics from the University of British Columbia.

Tryn Stimart.

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

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.

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.

Executive Compensation.

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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).

Lease between 0775021 BC Ltd.

and the Registrant dated June 2, 2017, as amended (incorporated by reference to Exhibit 10.1 of the Registrant’s Registration Statement on Form S-1, as amended (File No.

333-250838) filed on N ovember 20 , 2020).

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.

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

Separation Agreement and Release among the Registrant, Neil Berkley and Lineage Biosciences, Inc.

(incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on July 19, 2022).

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

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

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.

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.

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).

Subsidiaries of the Registrant.

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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AbCellera Biologics Inc.

Compensation Clawback Policy.

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

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___________________________________________

* Filed herewith

Portions of this exhibit (indicated by asterisks) have been omitted in accordance with the rules of the Securities and Exchange Commission.

† 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.

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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.

Chief Executive Officer and Director ( Principal Executive Officer )

Name Title Date

Hansen Chief Executive Officer and Director ( Principal Executive Officer )

February 20, 2024

Hansen, Ph.D.

/s/ Andrew Booth

Chief Financial Officer ( Principal Financial Officer and Principal Accounting Officer )

February 21, 2023

/s/ Véronique Lecault

Chief Operating Officer and Director

/s/ Andrew Booth Chief Financial Officer ( Principal Financial Officer and Principal Accounting Officer )

February 20, 2024

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

Véronique Lecault, Ph.D.

/s/ Andrew Lo

February 21, 2023

/s/ Andrew Lo Director February 20, 2024

Andrew Lo, Ph.D.

/s/ Michael Hayden

February 21, 2023

/s/ Michael Hayden Director February 20, 2024

Michael Hayden, Ph.D.

February 21, 2023

/s/ Peter Thiel

February 21, 2023

Montalbano Director February 20, 2024

/s/ Peter Thiel Director February 20, 2024

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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Consolidated Balance Sheets as of December 31, 202 2 and 20 23

Consolidated Statements of Income and Comprehensive Income for the Years ended December 31, 202 0 , 2021 and 202 2

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the Years ended December 31, 202 1 , 202 2 and 202 3

Consolidated Statements of Stockholders’ Equity for the Years ended December 31, 202 1 , 202 2 and 202 3

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors AbCellera Biologics, Inc.:

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, 2022 and 2021, the related consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of December 31, 2023 and 2022, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S.

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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.

Fair value of contingent consideration liability

As discussed in Note 20 to the consolidated financial statements, the Company completed a business combination with TetraGenetics, Inc.

(TetraGenetics) in 2021.

The purchase consideration for this business combination included contingent consideration consisting of potential milestone payments based on the achievement of specified technical milestones and additional development and commercial milestone payments related to successfully developed therapeutics.

As discussed in Note 16 to the consolidated financial statements, contingent consideration related to a business acquisition is recorded at fair value on the acquisition date and adjusted on a recurring basis for changes in its fair value.

As of December 31, 2022, the Company has a contingent consideration liability of $36,760 thousand related to the TetraGenetics acquisition.

The determination of the contingent consideration liability requires the Company to make significant estimates and assumptions.

We identified the assessment of the fair value of the contingent consideration liability associated with the TetraGenetics acquisition as a critical audit matter.

Evaluating the key assumptions, including certain non-observable inputs such as the probabilities of successful achievement of technical, development, and commercial milestones and forecasted revenues involved complex and challenging auditor judgment.

Changes in these key assumptions could have a significant impact on the measurement of the contingent consideration liability.

Identification of distinct performance obligations

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

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

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

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

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

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 process for determining the fair value of the contingent consideration liability, including the development of the key assumptions.

We performed sensitivity analyses and assessed the impact of possible changes to the key assumptions on the fair value of the contingent consideration liability.

We evaluated the probabilities of successful achievement of technical, development, and commercial milestones assumptions used in the Company’s model by comparing them to relevant and reliable publicly available third-party data and studies.

We evaluated the Company’s forecasted revenues by comparing them to relevant and reliable third-party industry data.

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

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

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

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

Chartered Professional Accountants

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Opinion on Internal Control Over Financial Reporting

We have audited AbCellera Biologics, Inc.’s and subsidiaries (the Company) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have audited AbCellera Biologics Inc.

and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2023, 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, 2023, 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, 2022 and 2021, the related consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements), and our report dated February 21, 2023 expressed an unqualified opinion on those consolidated financial statements.

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, 2023 and 2022, 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, 2023, and the related notes (collectively, the consolidated financial statements), and our report dated February 20, 2024 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

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Amounts are expressed in thousands except share data)

December 31, 2022 December 31, 2023

Current assets:

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Intangible assets, net 131,502 120,425

Goodwill 47,806 47,806

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

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Total long-term assets 515,416 616,109

Total assets $ 1,540,907 $ 1,488,094

Liabilities and shareholders' equity

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

Current portion of contingent consideration payable

Income taxes payable

Accrued royalties payable

Contingent consideration payable 44,211 50,475

Deferred revenue 21,612 18,958

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Deferred revenue 19,516 8,195

Deferred grant funding

Deferred government contributions 40,801 95,915

Contingent consideration payable 16,054 4,913

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Common shares:

no par value, unlimited authorized shares at December 31, 2021 and 2022:

283,257,104 and 286,851,595 shares issued and outstanding at December 31, 2021 and 2022 respectively

no par value, unlimited authorized shares at December 31, 2022 and December 31, 2023:

286,851,595 and 290,824,970 shares issued and outstanding at December 31, 2022 and December 31, 2023, respectively

734,365 753,199

Additional paid-in capital 74,118 121,052

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Total liabilities and shareholders' equity $ 1,540,907 $ 1,488,094

Subsequent event

The accompanying notes are an integral part of these consolidated financial statements.

AbCellera Biologics Inc.

Consolidated Statements of Income and Comprehensive Income

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

(All figures in U.S.

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Year ended December 31,

2021 2022 2023

Research fees $ 19,076 $ 40,802 $ 35,556

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Operating expenses:

Royalty fees 45,516 66,436 —

Research and development (1)

62,062 107,879 175,658

Sales and marketing (1)

6,913 11,270 14,180

General and administrative (1)

41,848 55,485 60,999

Depreciation, amortization, and impairment 14,451 27,843 24,395

Total operating expenses 170,790 268,913 275,232

Income from operations

Income (loss) from operations 204,413 216,511 ( 237,207 )

Other (income) expense

Interest (income) ( 3,330 ) ( 16,079 ) ( 42,247 )

Interest and other

Grants and incentives ( 17,486 ) ( 10,554 ) ( 14,155 )

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

Total other (income) ( 14,736 ) ( 22,588 ) ( 63,178 )

Net earnings before income tax

Income tax expense

Net earnings (loss) before income tax 219,149 239,099 ( 174,029 )

Income tax (recovery) expense 65,685 80,580 ( 27,631 )

Net earnings (loss) $ 153,464 $ 158,519 $ ( 146,398 )

Foreign currency translation adjustment 280 ( 1,671 ) ( 329 )

Comprehensive income

Net earnings per share attributable to common shareholders

Comprehensive income (loss) $ 153,744 $ 156,848 $ ( 146,727 )

Net earnings (loss) per share attributable to common shareholders

Basic $ 0.56 $ 0.56 $ ( 0.51 )

Diluted $ 0.48 $ 0.50 $ ( 0.51 )

Weighted-average common shares outstanding

Basic 275,763,745 285,056,606 289,166,486

Diluted 318,294,236 314,827,255 289,166,486

The accompanying notes are an integral part of these consolidated financial statements.

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Amounts are expressed in thousands except share data)

Preferred Shares

Common Shares

Accumulated Other Comprehensive

Common Shares Additional

Capital Accumulated

Earnings Accumulated

Comprehensive

Income (loss) Total

Shareholders'

Income (Loss)

December 31, 2019

Issuance of Series A2 preferred shares

Shares issued under stock option plan

Stock-based compensation expense

Issuance of common shares upon initial

public offering, net of issuance costs

of $ 32,609 (net of tax $ 8,462 )

Conversion of Series A1 and A2 preferred

Conversion of convertible note

Shares Amount

Balances as of December 31, 2020 269,497,768 $ 710,387 $ 5,919 $ 114,202 $ – $ 830,508

Shares issued under stock option plan and other

Shares issued and restricted stock units ("RSUs") vested under stock option plan 13,759,336 12,043 ( 5,477 ) – – 6,566

Stock-based compensation expense – – 29,240 – – 29,240

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Foreign currency translation adjustment – – – – 280 280

Net earnings – – – 153,464 – 153,464

Balances as of December 31, 2021 283,257,104 $ 722,430 $ 35,357 $ 267,666 $ 280 $ 1,025,733

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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

The accompanying notes are an integral part of these consolidated financial statements.

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(Expressed in thousands of U.S.

December 31, 2021 December 31, 2022 December 31, 2023

Cash flows from operating activities:

Net earnings (loss) $ 153,464 $ 158,519 $ ( 146,398 )

Cash flows from operating activities:

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Stock-based compensation 30,646 49,481 64,183

Deferred tax expense

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

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

Other 1,286 5,456 277

Changes in operating assets and liabilities:

Accounts and accrued research fees receivable

Research fee and grant receivable ( 37,386 ) ( 22,715 ) ( 45,933 )

Accrued royalties receivable 59,864 129,171 9,273

Income taxes payable

Accounts payable and accrued liabilities

Operating lease liabilities

Income taxes (payable) receivable ( 13,530 ) ( 88,609 ) 30,464

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

Deferred revenue 8,624 6,183 ( 13,976 )

Accrued royalties payable

Deferred grant revenue

Other operating assets and liabilities

Net cash provided by operating activities

Deferred grant income 30,718 9,264 39,521

Other assets ( 3,381 ) ( 1,375 ) 8,980

Net cash provided by (used in) operating activities 244,584 277,360 ( 43,877 )

Cash flows from investing activities:

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Purchase of intangible assets — ( 2,000 ) ( 560 )

Purchases of marketable securities

Purchase of marketable securities ( 274,710 ) ( 763,982 ) ( 1,021,510 )

Proceeds from marketable securities 27,608 510,631 910,937

Receipt of grant funding 32,621 16,434 25,311

Acquisitions, net of cash acquired

Long-term investments and other

Acquisitions ( 11,457 ) — —

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

Investment in and loans to equity accounted investees ( 30,323 ) ( 25,679 ) ( 13,690 )

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Cash flows from financing activities:

Repayment of long-term debt and contingent consideration

Proceeds from long-term debt and exercise of stock options

Proceeds from convertible debentures

Payment of liability for in-licensing agreement and other

Net proceeds from issuance of common shares

Proceeds from issuance of preferred shares - series A1 and A2 financing

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

Proceeds from long-term liabilities and exercise of stock options 5,487 2,755 11,590

Net cash provided by (used in) financing activities ( 3,886 ) ( 1,628 ) 10,356

Effect of exchange rate changes on cash and cash equivalents ( 1,425 ) ( 9,599 ) 589

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents and restricted cash, beginning of year

Cash and cash equivalents and restricted cash, end of year

Restricted cash included within other current and other long-term assets

Total cash, cash equivalents, and restricted cash shown on the balance sheets

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

Cash and cash equivalents and restricted cash, beginning of period 594,116 501,142 414,650

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

Restricted cash included in other assets — 3,115 2,290

Total cash, cash equivalents, and restricted cash shown on the balance sheet $ 501,142 $ 411,535 $ 158,320

Supplemental disclosure of non-cash investing and financing activities

Property and equipment purchases in accounts payable

Property and equipment in accounts payable 5,397 5,868 13,625

Right-of-use assets obtained in exchange for operating lease obligation 36,638 50,694 1,199

Purchase of intangible assets in exchange for in-licensing agreement payable

The accompanying notes are an integral part of these consolidated financial statements.

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

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

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

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

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dollars and references to “C$” and “CAD” are to Canadian dollars.

Initial public offering

The Company’s registration statement on Form S-1 related to its initial public offering (“IPO”) was declared effective on December 10, 2020, by the SEC, and the Company’s common shares began trading on the Nasdaq on December 11, 2020.

Upon close of the IPO, the Company sold 27,772,500 common shares at a price to the public of $ 20.00 per share.

The Company received gross proceeds of $ 555.5 million, or aggregate net proceeds of $ 522.8 million, after deducting offering costs, underwriting discounts and commissions.

Immediately prior to the completion of the IPO, all convertible preferred stock and notes then outstanding converted into an equivalent number of shares of common shares.

On December 4, 2020, the Board of Directors of the Company approved a 1 -for-10 forward stock split of its issued and outstanding common shares and stock options, which was affected on December 4, 2020.

All share and per share information in these consolidated financial statements has been retroactively restated to reflect the stock split.

Significant accounting policies

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Intercompany accounts and transactions have been eliminated.

In 2021, the Company entered into a participation agreement with a segregated accounts company for purposes of Director and Officer’s insurance.

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.

As the funds cannot be transferred to other parts of the Company, the funds are presented in current assets on the consolidated balance sheets as Restricted Cash.

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

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

Areas of significant estimates include, but are not limited to, revenue recognition including estimated timing of completion of performance obligations and

determining whether an option for additional goods or services represents a material right, the fair value of acquired intangible assets, and contingent consideration payable , and the estimates of stock-based compensation awards.

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

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Actual results could significantly differ from those estimates.

COVID-19 Pandemic

The full extent to which the ongoing COVID-19 pandemic and related developments may affect the Company’s future financial results and operations will depend on future developments which are difficult to predict .

As of the date of these consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities.

Actual results could differ from these estimates, and any such differences may be material to the Company’s consolidated financial statements .

Revenue recognition

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

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 that 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.

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.

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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.

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

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

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

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

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

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

The Company’s revenues from external customers in which the services originated were in Canada in 2020.

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

Of the Company’s long-term assets at December 31, 2021, $ 200.3 million was in the U.S.

and $ 159.5 million in Canada and $ 28.9 million in other foreign countries.

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

Government grants and credits

Government grants are recognized when there is reasonable assurance that the grant will be received, and all associated conditions will be complied with.

Reimbursements of eligible expenditures pursuant to government assistance programs are recorded when the related costs have been incurred and there is reasonable assurance regarding collection of the claim.

The Company recognizes the benefits of refundable government investment tax credits for scientific research and development expenditures in the year the qualifying expenditure is made providing there is reasonable assurance of recoverability.

The Company records the investment tax credits based on its estimates of amounts expected to be recovered.

Government grants and credits received 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.

Grant claims not settled by the balance sheet date are recorded as receivables provided their receipt is probable.

The determination of the amount of the claim and the corresponding receivable amount requires management judgement and interpretation of eligible expenditures in accordance with the terms of the programs.

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

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

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

In 2023, the Company's additions to property and equipment, contributions to joint ventures, and research and development expenses incurred in Canada were $ 86.6 million, $ 13.7 million, and $ 140.6 million, respectively, and $ 3.6 million, nil , and $ 35.1 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.

The Company has used its best estimate and understanding of the related program agreements in determining the receivable amount.

Functional currency

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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 and comprehensive income.

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

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

Foreign exchange gains or losses arising from the translation of these joint ventures’ assets and liabilities are included in foreign currency translation adjustment in the consolidated statements of income and comprehensive income.

Foreign exchange gains or losses arising from the translation of

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

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As of December 31, 2022, we had $ 126.2 million cash, $ 260.3 million cash equivalents and $ 28.1 million restricted cash.

Of the total restricted cash at December 31, 2022, $ 25.0 million is presented as a current asset, $ 2.2 million is included within other current assets, and $ 0.9 million is included within other long-term assets 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.

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government agency securities, and asset-backed securities.

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

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

Non-marketable securities

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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 are included as part of other long-term assets on the consolidated balance sheets.

Adjustments are determined primarily based on a market approach as of the transaction date and are recorded a component of interest and other on the consolidated statements of income and comprehensive income.

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

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

Accounts receivable

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

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

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

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

Computer equipment

Laboratory equipment

Office furniture and equipment

Leasehold improvements

Shorter of lease term or estimated useful life

Computer equipment 3 years

Laboratory equipment 5 - 10 years

Office furniture and equipment 5 years

Leasehold improvements Shorter of lease term or estimated useful life

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

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

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

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

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

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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 20 years

Impairment of long-lived assets

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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.

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.

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Royalty fees are recorded when the third-party sale occurs.

The Company accounts for income taxes under the 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 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.

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

Liability classified awards are initially measured using their grant date fair value and are

subsequently re-measured to fair value at each balance sheet date until exercised or cancelled, with changes in fair value recognized as compensation cost for the period.

As of Dec ember 31, 20 21 , and 20 22 , there were no liability classified options outstanding.

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

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

Business combinations and goodwill

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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 the Company’s consolidated statements of income and comprehensive income.

Net earnings per share

The Company follows the two-class method when computing net earnings per share as the Company has issued shares that meet the definition of participating securities.

The two-class method determines net earnings per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings.

The two-class method requires income available to common shareholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

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

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 attributable to common shareholders is computed by dividing the net earnings attributable to common shareholders by the weighted-average number of common shares outstanding for the period.

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

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

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

The Company’s convertible preferred shares, all of which converted prior to the completion of our IPO in 2020, contractually entitle the holders of such shares to participate in dividends but do not contractually require the holders of such shares to participate in losses of the Company.

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

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

Changes in significant accounting policies

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

Net earnings per share

Basic and diluted net earnings per share attributable to common shareholders was calculated as follows:

Net earnings (loss) per share

Basic and diluted net earnings (loss) per share was calculated as follows:

Year Ended December 31,

Basic earnings per share

earnings allocated to Preferred Shareholders ( 1)

Net earnings attributable to common shareholders - basic

2021 2022 2023

Basic earnings (loss) per share

Net earnings (loss) $ 153,464 $ 158,519 $ ( 146,398 )

Weighted-average common shares outstanding - basic 275,763,745 285,056,606 289,166,486

Net earnings per share attributable to common shareholders - basic

Diluted earnings per share

Net earnings attributable to common shareholders - diluted

Net earnings (loss) per share - basic $ 0.56 $ 0.56 $ ( 0.51 )

Diluted earnings (loss) per share

Net earnings (loss) $ 153,464 $ 158,519 $ ( 146,398 )

Weighted-average common shares outstanding - basic 275,763,745 285,056,606 289,166,486

Convertible preferred shares

Stock options and RSUs 42,530,491 29,770,649 –

Weighted-average common shares outstanding - diluted 318,294,236 314,827,255 289,166,486

Net earnings per share attributable to common shareholders - diluted

1 The Company’s preferred shares were all converted prior to the IPO in 2020.

The Company excluded nil, 908,409 , and 11,824,006 potential common shares for the years ended December 31, 2020, 2021, and 2022, respectively, from the computation of diluted net earnings per share attributable to common shareholders for the periods indicated because including them would have had an anti-dilutive effect.

Net earnings (loss) per share - diluted $ 0.48 $ 0.50 $ ( 0.51 )

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

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

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

Other current assets

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Property and equipment, net consisted of the following:

Computers $ 8,303 $ 3,517

Land 53,405 53,405

Building 11,361 43,947

Laboratory equipment 41,256 70,350

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Property and equipment, net $ 217,255 $ 287,696

As of December 31, 2021 and December 31, 2022, building and leasehold improvements include construction and tenant improvements in progress that have not commenced depreciation in the amount of $ 19.8 million and $ 25.6 million, respectively.

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

Depreciation expense on property and equipment for the years ended December 31, 2021, 2022 and 2023 was $ 4.4 million, $ 9.0 million and $ 12.8 million, respectively.

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Intangible assets consisted of the following:

December 31, 2021

December 31, 2022

December 31, 2022 December 31, 2023

amount Accumulated

amortization Net book

amount Accumulated

amortization Net book

License $ 37,873 $ 17,859 $ 20,014 $ 38,433 $ 26,861 $ 11,572

Technology 52,700 5,222 47,478 52,700 7,857 $ 44,843

IPR&D 64,010 — 64,010 64,010 — $ 64,010

$ 154,583 $ 23,081 $ 131,502 $ 155,143 $ 34,718 $ 120,425

Amortization expense related to intangible assets for the years ended December 31, 2021, 2022 and 2023 was $ 10.1 million, $ 10.5 million and $ 11.6 million, respectively.

Depreciation and amortization expense is reflected on the consolidated statements of income and comprehensive income.

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

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

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

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

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

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

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

In March 2020, the Company entered into an agreement with Alloy Therapeutics (Alloy) to use the ATX-Gx™ humanized mice platform to enable in vivo human antibody discovery for its partner programs.

Under the terms of the agreement, the Company will offer its biotechnology and pharmaceutical partners access to ATX-Gx™, Alloy’s proprietary suite of immunocompetent transgenic mice, for use in any antibody discovery program and against any therapeutic target.

The agreement provides for future alternative use to the Company and as such the corresponding value has been recorded as an intangible asset.

The asset will be amortized on a straight-line basis over the 10 -year term of the license agreement with Alloy.

The acquisition of $ 14.1 million consisted of an initial cash payment of $ 5.0 million, with two additional $ 5.0 million installment payments paid in twelve and twenty-four months , respectively.

The estimated fair value of the non-current portion of the financial obligation was determined by discounting future principal and interest amounts at estimated interest rates expected to be available to the Company with an interest rate of 10.98 %.

Goodwill consisted of the following:

Balance at December 31, 2020 1

Balance at December 31, 2021 1

Balance at December 31, 2022 1

1 Accumulated impairment as at December 31, 2021 and 2022 was nil .

Investments in and loans to equity accounted investees

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

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

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

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

To date, the Company has recorded immaterial amounts of proportionate income or loss with respect to either venture.

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

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

At December 31, 2021 and December 31, 2022, the equity investment balance was $ 19.6 million and $ 18.7 million, respectively.

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

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

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

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

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

At December 31, 2021, and December 31, 2022, the outstanding related party loan balance was $ 18.0 million and $ 38.1 million, respectively, to the Dayhu JV.

In July 2022, the Company entered into an agreement of up to CAD $ 46.0 million ($ 34.0 million a t December 31, 2022) with Dayhu (New Dayhu Loan) to replace Dayhu’s portion of the outstanding Dayhu JV L oan balance as at January 1, 2023, at a rate referenced to a Canadian bank prime rate adjusted for applicable margins as defined in the agreement.

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

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

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

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

Subsequent to December 31, 2022, the Company issued CAD $ 46.0 million ($ 34.0 million at December 31, 2022) to Dayhu from the New Dayhu loan, which was used to repay, in part, Dayhu’s 50 % portion of the Dayhu JV Loan.

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

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

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

At December 31, 2021 and December 31, 2022, the equity investment balance was $ 12.7 million and $ 15.7 million, respectively.

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

The lease agreement between the Company and the Beedie JV, which has a commencement date subsequent to December 31, 2023, 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 ($ 5.7 million at December 31, 2023) plus a construction loan for up to 80 % of Beedie’s share of construction costs.

The commitment is at a rate referenced to a Canadian bank prime rate adjusted for applicable margins as defined in the agreement, and repayment on the earlier of thirty months from the date of initial advancement of the construction loan and five years from the initial advancement of the land loan, or upon the triggering of certain repayment events as defined in the agreement.

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 was solely relates to the land loan to date, was $ 5.5 million as at December 31, 2022 and is included in other long-term assets.

The loan receivable balance, which relates to the land and construction loan, was $ 5.5 million and $ 13.9 million as at December 31, 2022 and December 31, 2023, respectively, and is included in other long-term assets.

Accounts payable and other liabilities

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Accounts payable and accrued liabilities $ 14,828 $ 25,509

Liability for in-licensing agreement

Current portion of operating lease liability 5,583 6,158

Payroll liabilities 6,454 7,707

Current portion of deferred grant funding

Current portion of deferred government contribution 6,285 7,112

Accrued royalties payable 19,347 3,094

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

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As of December 31, 2022 and 2023, 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.

The voting, dividend, and liquidation rights of the holders of the Company’s common shares are subject to and qualified by the rights, powers and preferences of the holders of the Series A preferred shares set forth below.

As of each balance sheet date, common shares consisted of the following:

December 31, 2021

December 31, 2022

Shares authorized

Shares issued and outstanding

Shares authorized

Shares issued and outstanding

Common shares

December 31, 2022 December 31, 2023

Shares authorized Shares issued and outstanding Shares authorized Shares issued and outstanding

Common shares Unlimited 286,851,595 Unlimited 290,824,970

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, subject to the preferential dividend rights of the preferred shares.

Common shareholders are entitled to receive dividends, if any, as may be declared by the board of directors.

Through December 31, 2023, no cash dividends had been declared or paid by the Company.

Series A1 and Series A2 Preferred shares

On August 3, 2018, the Company entered into an investment agreement with DCVC Bio, L.P.

for gross proceeds of CAD $ 10.0 million ($ 7.7 million) in exchange for 2,105,264 Series A1 preferred shares.

Total proceeds received net of financing costs were $ 7.6 million.

On March 23, 2020, the Company entered into an investment agreement with certain shareholders for gross proceeds of $ 75.0 million in exchange for 6,017,784 Series A2 preferred shares.

Total proceeds received net of financing costs were $ 74.7 million.

The Series A1 and A2 preferred shares were voting and were convertible, at any time and from time to time at the option of its holder, into fully paid and non-assessable common shares at a 1:10 ratio, subject to appropriate adjustment for splits, dividends, other similar recapitalization and the like.

Conversion of preferred shares to common shares was mandatory in the event of a Qualified Initial Public Offering with proceeds of at least $ 70.0 million.

The holders of the Series A1 and A2 preferred shares were entitled to vote, together with the holders of common shares, as a single class, on all matters submitted to the shareholders for a vote and were entitled to the number of votes equal to the number of common shares into which the Series A1 and A2 preferred shares could convert on the record date for determination of shareholders entitled to vote.

The holders of the Series A1 and A2 preferred shares were entitled to receive noncumulative dividends, as and if declared by the board of directors (the “Preferred Dividend”).

The Company may not pay any dividends on common shares of the Company unless the holders of Preferred Shares then outstanding first receive, or simultaneously receive, the Preferred Dividend on each outstanding Series A1 and A2 preferred share and a dividend on each outstanding Series A1 and A2 preferred share in an amount at least equal to the product of the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into common shares.

To the date of conversion, no cash dividends had been declared or paid by the Company.

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or Deemed Liquidation Event, the holders of Series A1 and A2 preferred shares then outstanding were entitled to a 1x non-participating liquidation preference.

Due to the various rights and privileges within the existing Series A1 and A2 Preferred and Common shareholder agreements, the Company concluded triggering a deemed liquidation event was within the control of the Company, and therefore the Series A1 and A2 preferred shares were classified as permanent equity.

Immediately prior to the completion of our IPO, all Series A1 and A2 preferred shares converted to an equal number of common shares.

Stock-based compensation

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The following table summarizes the Company’s stock options granted under the Pre-IPO Plan:

Shares Weighted-

Average Exercise

Price Weighted-

Average Contractual Term (years)

Outstanding as of December 31, 2022 33,694,150 $ 0.90 6.21

Exercised ( 2,918,029 ) 0.52

Forfeited ( 128,546 ) 0.96

Outstanding as of December 31, 2023 30,647,575 $ 0.94 5.28

1 unchanged sentence

The following table summarizes the Company’s stock options granted under the 2020 Plan:

Shares Weighted-

Average Exercise

Price Weighted-

Outstanding as of December 31, 2022 12,322,933 $ 14.81 9.14

Granted 2,735,338 8.75

Exercised — —

Forfeited ( 1,065,967 ) 12.28

Outstanding as of December 31, 2023 13,992,304 $ 13.82 8.35

3 unchanged sentences

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.

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.

1 unchanged sentence

The following table summarizes the Company’s RSUs granted under the 2020 Plan:

Grant Date Fair Value

Number of Shares

Weighted- Average Grant Date Fair Value

Outstanding as of December 31, 2022 3,946,985 $ 13.71

Granted 1,807,738 8.74

Vested and settled ( 1,055,346 ) 14.19

Forfeited ( 623,787 ) 12.21

Outstanding as of December 31, 2023 4,075,590 $ 11.61

The intrinsic value of RSUs vested and settled during 2020 and 2021 was nil, and $ 2.5 million in 2022.

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

As of December 31, 2023, there was $ 37.0 million of unamortized RSU expense that will be recognized over a weighted average period of 2.66 years.

Stock-based compensation expense was classified in the consolidated statements of income and comprehensive income as follows:

Stock-based compensation expense was classified in the consolidated statements of income (loss) and comprehensive income (loss) as follows:

Year ended December 31,

2021 2022 2023

Research and development expenses $ 15,663 $ 24,327 $ 31,781

1 unchanged sentence

General and administrative expenses 12,863 22,020 27,274

$ 30,646 $ 49,481 $ 64,184

The fair value of each option award is determined on the date of grant using the Black-Scholes option pricing model.

1 unchanged sentence

Year ended December 31,

Average risk-free interest rate 1

Expected volatility 2

Average expected term (years) 3

Expected dividend yield 4

Weighted average fair value of options granted 5

The weighted-average valuation assumptions for liability classified stock options outstanding at December 31, 2022 are as follows:

Year ended December 31,

2021 2022 2023

Average risk-free interest rate 1

1.23 % 2.86 % 3.73 %

Expected volatility 2

72.00 % 70.00 % 70.00 %

Average expected term (years) 3

6.21 6.24 6.25

Expected dividend yield 4

0.00 % 0.00 % 0.00 %

Weighted average fair value of options granted 5

This rate is from federal government marketable bonds for each option grant during the year, having a term that most closely resembles the expected life of the option.

$ 12.31 $ 7.77 $ 5.78

(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.

3 unchanged sentences

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

No dividends have been paid by the Company yet.

The Company granted stock options at exercise prices not less than the fair value of its common shares as determined by the Board, with input from management.

Management estimated the fair value of its common shares based on a number of objective and subjective factors, including internal valuations, external market considerations affecting the biotechnology industry and the historic prices at which the Company sold common shares.

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

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

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

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

Deferred Revenue

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During the years ended December 31, 2021, 2022 and 2023, the Company recognized $ 4.7 million, $ 11.5 million and $ 17.0 million, respectively, of revenue that had been included in deferred revenue in the previous year.

In March of 2020, 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.

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 an initial upfront payment of $ 26.7 million, of which $ 21.9 million was included in deferred revenue at December 31, 2020.

For the year ended December 31, 2021, the Company received an additional $ 1.7 million in payments, for total payments received in respect of this agreement of $ 28.4 million.

For the year ended December 31, 2022, the Company received $ 0.8 million in additional payments.

The Company recognized $ 6.9 million of revenue in the year ended December 31, 2022.

The agreement resulted in upfront payments of $ 28.4 million, of which $ 20.5 million was included in deferred revenue at December 31, 2021.

For the year ended December 31, 2022, the Company received an additional $ 0.8 million in payments, for total upfront payments received in respect of this agreement of $ 29.2 million .

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

The Company expects to recognize approximately $ 8.4 million in revenue in the next 12 months related to these payments under the agreement.

Of the remaining deferred revenue balance of $ 14.8 million, which is related to various other agreements, approximately $ 10.6 million is expected to be recognized in revenue in the next 12 months.

Government Funding

In 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 ($ 129.7 million as of December 31, 2022) 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.

Since inception, the Company incurred $ 79.3 million in expenditures in respect of the SIF grant funding.

$ 46.1 million relates to spending under phase 1 of the agreement and such amounts are not repayable, while $ 33.2 million was claimed in respect of phase 2 of the funding commitment, where repayment is conditional on achieving certain revenue thresholds in seven years starting a year following the completion of the funded project.

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

Such amounts are not repayable.

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

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 .

The funding and its associated conditional repayment is not and will not be secured by any of the Company’s assets, and includes certain non-financial covenants and restrictive covenants on dividend payments or other shareholder distributions that would prevent the Company in satisfying its obligations under the arrangement.

As of December 31, 2022, no amounts have been accrued related to the repayment terms as the conditions are estimated to be non-probable at December 31, 2022.

For the year ended December 31, 2020, 2021 and 2022, the Company incurred $ 12.4 million, $ 47.1 million, $ 18.9 million in expenditures in respect of the SIF grant funding, respectively.

For the year ended December 31, 2020, 2021 and 2022, $ 5.3 million, $ 13.8 million, $ 3.9 million, respectively, relates to research and development expenditures and is reflected in grants and incentives on the consolidated statements of income and comprehensive income.

The remaining $ 15.0 million is attributable to capital asset expenditures and is amortized into other income over the average asset life of seven years .

Unamortized amounts are included in accounts payable and other liabilities and long term deferred grant funding on the consolidated balance sheets.

The balance of SIF grant funding included in the balance of accounts and accrued receivable is $ 14.8 million and $ 6.9 million as of December 31, 2021 and 2022, respectively.

For financial reporting purposes, income before income taxes includes the following components:

Government Contribution 2

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

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

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

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

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

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

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

Impact to Consolidated Financial Statements

At December 31, 2022 and 2023, the Company recognized the following on the consolidated balance sheets:

December 31, 2022

Deferred Government Contribution

Accounts Receivable Government Grant 1

Non-repayable Conditionally Repayable 2

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

Current $ 6,927 $ 5,100 $ 1,185 $ — $ 6,285

Long-term $ — $ 9,764 $ 31,037 $ — $ 40,801

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, 2023

Deferred Government Contribution

Accounts Receivable Government Grant 1

Non-repayable Conditionally Repayable 2

Government Contribution 1 $ 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.

For financial reporting purposes, income (loss) before income taxes includes the following components:

2021 2022 2023

Canadian $ 211,471 $ 279,771 $ ( 146,322 )

Foreign 7,678 ( 40,672 ) ( 27,707 )

Total $ 219,149 $ 239,099 $ ( 174,029 )

The expense (benefit) for income taxes consists of:

2021 2022 2023

Canadian $ 60,498 $ 81,392 $ ( 29,591 )

Foreign 7,248 1,300 —

67,746 82,692 ( 29,591 )

Deferred and other:

Income tax expense

Current tax expense

Deferred tax expense (benefit)

Total tax expense

Canadian ( 1,342 ) 2,322 4,526

Foreign ( 719 ) ( 4,434 ) ( 2,566 )

( 2,061 ) ( 2,112 ) 1,960

Income tax expense (recovery) $ 65,685 $ 80,580 $ ( 27,631 )

2021 2022 2023

Current tax expense (recovery) $ 67,746 $ 82,692 $ ( 29,591 )

Deferred tax expense (recovery) ( 2,061 ) ( 2,112 ) 1,960

Total tax expense (recovery) $ 65,685 $ 80,580 $ ( 27,631 )

The consolidated effective income tax rate differs from the expected Canadian statutory tax rate of 27% (2021, 2022, 2023:

Reconciliation between the expected tax rate on income from operations and the statutory tax rate was as follows:

Net earnings before income taxes

2021 2022 2023

Net earnings (loss) before income taxes $ 219,149 $ 239,099 $ ( 174,029 )

Combined statutory tax rate 27 % 27 % 27 %

5 unchanged sentences

Change due to SR&ED ( 4,809 ) ( 5,908 ) ( 7,428 )

Foreign exchange

Income tax expense

Other ( 691 ) 285 ( 395 )

Income tax expense (recovery) $ 65,685 $ 80,580 $ ( 27,631 )

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.

1 unchanged sentence

Deferred tax assets:

Long-term debt

Government contributions $ 7,695 $ 4,389

Financing fee 4,827 3,092

2 unchanged sentences

Net operating losses carried forward 5,054 7,256

Capitalized research and development costs for tax purposes

Research and development expenditures and related credits 1,807 24,303

Other 4,696 3,725

47,476 81,217

Deferred tax liabilities:

Property and equipment $ ( 8,450 ) $ ( 17,303 )

Intangibles ( 32,682 ) ( 30,117 )

Operating lease right-of-use assets ( 16,687 ) ( 16,569 )

Government funding receivable

Other ( 4,094 ) ( 13,186 )

( 61,913 ) ( 77,175 )

( 14,437 ) 4,042

valuation allowance ( 13,411 ) ( 33,840 )

Net deferred tax asset (liability)

Net deferred tax liability ( 27,848 ) ( 29,798 )

Deferred tax asset 5,330 814

1 unchanged sentence

Net deferred tax assets (liability) $ ( 27,848 ) $ ( 29,798 )

Amounts recognized in the Company's consolidated balance sheets as of December 31, 2021 and 2022 comprise of $ 7.4 million and $ 5.3 million, respectively, included in other long-term assets and $ 37.4 million and $ 33.2 million, respectively, as deferred tax liability.

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing DTAs.

A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2022, in foreign subsidiaries.

Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth.

On the basis of this evaluation, valuation allowances of $ 9.2 million and $ 13.4 million as of December 31, 2021 and 2022, respectively, have been recorded to recognize only the portion of the DTA that is more likely than not to be realized against DTL that reverses in carryforward period.

The amount of the DTA considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is longer present and additional weight is given to subjective evidence such as our projections for growth.

As of December 31, 2022 the Company has Canadian a non-capital loss of approximately $ 58.2 million and we generated federal and provincial investment tax credit of approximately $ 7.2 million.

The non-capital loss and investment tax credits are available to be carried back up to three years against taxable income.

The Company had no unclaimed tax deductions for scientific research and experimental development.

The Company had operating losses carried forward related to foreign operations of approximately $ 1.5 million, $ 18.2 million and $ 19.4 million as of December 31, 2020, 2021 and 2022 respectively.

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

ownership as defined under IRC Section 382.

Certain operating losses available for the foreign subsidiary deferred tax assets can be carried forward indefinitely while the rest expire ranging from 2034 to 2037.

Net Operating Loss

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

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

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

operations of approximately $ 18.2 million, $ 19.4 million and $ 19.4 million as of December 31, 2021, 2022 and 2023 respectively.

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

Net operating losses arising from U.S.

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

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

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

As of December 31, 2023, 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.

A reconciliation of total unrecognized tax benefits for the years ended December 31, 2020, 2021 and 2022 were as follows:

January 1 balance

Gross increase - tax position in prior period

Gross increase - tax position in current period

Gross decrease - tax position in current period

December 31 balance

Included in the balance of unrecognized tax benefits at December 31, 2020, 2021 and 2022 are potential benefits of nil that, if recognized, would affect the effective tax rate on income from operations.

Recognition of these potential benefits would result in a deferred tax asset in the form of undeducted SR&ED expenditures or tax credits available for carry-forward, which would be subject to a valuation allowance based on conditions existing at the reporting date.

Net operating losses arising in tax years ending after December 31, 2017 can be carried over to each taxable year following the tax year of loss indefinitely.

Under the Coronavirus Aid, Relief, and Economic Security Act, losses incurred effective 2021 can only be used to offset 80% of taxable income.

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

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

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

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

3 unchanged sentences

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

The Company leases office and laboratory facilities in Vancouver, Canada and Sydney, Australia, Cambridge, United Kingdom and Boston, USA.

The Company's operating leases have a fixed term with a remaining life between fourteen months and 15 years, with renewal options included in the contracts ranging from one to ten years .

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

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

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

1 unchanged sentence

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

December 31, 2022 December 31, 2023

Operating lease liabilities:

Current portion

Current portion, included in accounts payable and other liabilities $ 5,583 $ 6,158

Long-term portion 76,675 71,222

1 unchanged sentence

At December 31, 2023, the future minimum lease payments of the Company’s operating lease liabilities were as follows:

Thereafter 58,818

As of December 31, 2023, the weighted-average remaining lease term is 11.5 years and the weighted-average discount rate used to determine the operating lease liabilities was approximately 5.0 %.

The Company incurred total operating lease expenses, including fixed lease payments, of $ 0.8 million, $ 3.7 million and $ 7.1 million and variable lease payments, of $ 0.3 million, $ 0.4 million and $ 1.8 million during the years ended December 31, 2020, 2021 and 2022, respectively.

The Company incurred total operating lease expenses, including fixed lease payments, of $ 3.7 million, $ 7.1 million and $ 9.5 million and variable lease payments, of $ 0.4 million, $ 1.8 million and $ 1.1 million during the years ended December 31, 2021, 2022 and 2023, respectively, and are included within operating expenses.

Financial Instruments

5 unchanged sentences

and Level 3 inputs are not observable in the market.

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

The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities, royalties payable, loans receivable, and loans to equity accounted investees approximate their fair values.

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

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

Contingent Consideration

2 unchanged sentences

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

Further information related to the Trianni and TetraGenetics contingent consideration is disclosed in Note 20.

There were no changes to the valuation technique or significant changes to the inputs used in these fair value

measurements since acquisition .

The discount rate applied increased to 10.7 % (from 8.0 % since acquisition date) associated to the TetraGenetics contingent consideration at December 31, 2022.

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

December 31, 2022

Increase in fair

Additions Increase in fair

value of liability

for contingent

consideration 1

consideration (i)

Repayment of contingent

consideration

TetraGenetics

$ 22,934 $ — $ 571 $ — $ 23,505

TetraGenetics (iii)

$ 35,886 $ — $ 874 $ — $ 36,760

December 31, 2023

Increase in fair

Additions Decrease in fair

value of liability

for contingent

consideration 1

consideration (i)

Repayment of contingent

consideration

TetraGenetics

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

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

TetraGenetics (iii)

$ 36,760 $ — $ ( 69 ) $ — $ 36,691

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

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

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

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

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

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

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

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, 2023, 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 0.4 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.

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Fair Value Measurements at December 31, 2022:

Level 1 Level 2 Level 3 Total

Marketable securities

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Corporate bonds — 138,776 — 138,776

government agencies

Asset backed securities — 13,061 — 13,061

$ 103,938 $ 396,012 $ — $ 499,950

Fair Value Measurements at December 31, 2023:

Level 1 Level 2 Level 3 Total

Marketable securities

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Asset backed securities — 51,510 — 51,510

Commitments and contingencies

$ 142,674 $ 484,591 $ — $ 627,265

Commitments, contingencies, and other

From time to time, the Company may become involved in routine litigation arising in the ordinary course of business.

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

For the years ended December 31, 2020, 2021, and 2022, the Company expensed approximately $ 27.1 million, $ 45.5 million, and $ 66.4 million, respectively, related to such obligations, of which $ 27.1 million, $ 22.5 million, and $ 19.3 million, respectively, is included in current liabilities as accued royalties payable.

Excluding the lease arrangements as accounted for in Note 15 – Leases, the Company has the following additional commitments in respect of leased facilities where the lease commencement dates are subsequent to December 31, 2022:

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

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

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

2024 $ 70,350

Thereafter 137,565

1 Commitments related to the Beedie JV leased facility are $ 6,507 , $ 6,507 , $ 6,507 , and $ 137,565 , for years 2026, 2027, 2028, and thereafter, respectively.

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 .

Financial Risk Management

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

At December 31, 2021 and 2022, accounts and accrued royalty receivable amounts were due from thirteen and twenty-one customers, respectively.

For the year ended December 31, 2021, we recognized milestone payments of $ 7.0 million and royalty revenue totaling $ 327.3 million, exclusively from our partnership with Lilly, of which $ 138.4 million was receivable at December 31, 2021.

For the year ended December 31, 2022, we recognized royalty revenue totaling $ 443.0 million, exclusively from our partnership with Lilly, of which $ 9.3 million was a receivable as of December 31, 2022.

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

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

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

Interest Rate Risk

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The Company had Canadian denominated cash and cash equivalents of CAD $ 44.9 million and CAD $ 52.2 million as of December 31, 2022 and 2023, respectively.

The Company incurs certain operating expenses and accounts payable in currencies other than the U.S.

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.

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Partner Program Counterparty Risk

For the year ended December 31, 2021, four of our partners accounted for 29 %, 17 %, 11 % and 10 % of our research fees revenue.

For the year ended December 31, 2022, three of our partners accounted for 29 %, 17 % and 11 % of our research fees revenue.

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

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

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

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

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

Related party transactions

In addition to the Dayhu JV Loan disclosed in Note 9, the Company had the following related party transaction s :

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

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

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

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

On November 3, 2020 , the Company completed a business combination with Trianni, Inc.

(“Trianni”), a biotechnology company with a humanized rodent platform, in which we were the acquirer.

To fund the merger, on October 30, 2020 AbCellera entered into convertible note agreement wherein AbCellera issued convertible notes in consideration of $ 90.0 million.

Issuance costs associated with the convertible notes was immaterial.

The convertible notes mature five years from the date of issuance and bear no interest for the first twelve months and bear five percent

( 5 %) interest per annum thereafter.

Interest is payable annually starting twenty-four months from the date of issuance until maturity .

Upon a liquidity event, such as an IPO, if occurred within 6 months of the issue date, then immediately prior to the liquidity event, noteholders may convert the principal amount of the note into common shares of the company at 85 % of the IPO issue price of common shares.

The convertible notes are also convertible at the option of the holders on the interest commencement date, which is 12 months after the issuance date.

The number of common shares to be issued will be equal to 800,000 common shares (for certain specified investors) plus the number of common shares determined by dividing (i) the aggregate of the outstanding principal of the convertible note by (ii) AbCellera’s pre-money valuation of as defined in the agreement divided by the aggregate number of our common shares outstanding at the time of conversion.

W e determined that no value should be assigned to the embedded derivatives and that there was no beneficial conversion feature.

Immediately prior to the completion of our IPO, the convertible notes were converted into 6,093,524 common shares of the Company in accordance with the terms of the convertible note agreement.

The convertible note was fully extinguished upon conversion and the carrying value of the convertible note was reclassified into common shares.

Estimated Purchase Price Consideration

Closing Payment

Earn-out payment

Pursuant to the merger agreement, the initial purchase price is $ 90.0 million adjusted for certain closing adjustments for working capital, indebtedness, transaction and other expenses as well as payments to Trianni option holders for the cancellation and extinguishment of Trianni options.

Represents the estimated fair value of the earn-out payments related to the specific customer license ending on April 9, 2024.

The estimated fair value was categorized within Level 3 of the fair value hierarchy and determined by estimating the payout of 85 % of the expected future net cash flows associated to the specific customer license during the earn-out period ending on April 9, 2024.

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

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

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

The goodwill balance represents the combined company’s expectations of the strategic opportunities available to it as a result of the merger, as well as other synergies that will be derived from the merger.

Goodwill also reflects the requirement to record deferred tax balances for the difference between the assigned values and the tax bases of assets acquired and liabilities assumed in the business combination.

Total transaction costs expensed in the consolidated statements of income and comprehensive income was immaterial.

During the period ended December 31, 2021, the Company has re corded immaterial adjustments to the preliminary allocation of the purchase price for the finalization of working capital adjustments, income taxes, and the resulting impact to goodwill.

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

Fair value of assets and liabilities acquired

Cash and cash equivalents

Other current assets

Total current assets

Current liabilities

Deferred income tax liability

Total liabilities

Estimated fair value of net identifiable assets acquired and liabilities assumed

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

fair value (a)

Estimated useful

lives in years (b)

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

The significant assumptions inherent in the development of the values, from the perspective of a market participant, include the amount and timing of projected future cash flows (including revenue, regulatory success and profitability), and the discount rate selected to measure the risks inherent in the future cash flows, which was between 19 %- 22 %.

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

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

Goodwill represents the excess of the estimated purchase price over the estimated fair value of Trianni’s identifiable assets acquired and liabilities assumed.

Goodwill is not deductible for tax purposes.

Net earnings for the period in the consolidated statements of income and comprehensive income includes immaterial amount of Trianni revenue and net loss of approximately $ 1.8 million from the acquisition date to the year ended December 31, 2020.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents consolidated results assuming the acquisition of Trianni occurred January 1, 2019.

Years Ended December 31,

TetraGenetics

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

Closing consideration

Contingent consideration

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

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

Estimated Fair Value

Closing consideration $ 12,926 (i)

Contingent consideration 35,100 (ii)

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

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

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

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

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

During the year ended December 31, 2022, no adjustments were made to the preliminary allocation of the purchase price .

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

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

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

Fair value of assets and liabilities acquired

Fair value of assets and liabilities acquired Purchase Price Allocation

Other assets, including cash of $ 955

Intangibles 43,300 (i)

Goodwill 16,906 (ii)

Total assets 62,838

Other liabilities 2,984

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

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

fair value (a)

Estimated useful

lives in years (b)

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

Estimated fair value (a)

Estimated useful lives in years(b)

Technology $ 11,300 20

IPR&D 32,000 (c)

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

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

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

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

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

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

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

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

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

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

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

What changed 10-K

Item 9A. Controls and Procedures