Adaptive Biotechnologies Corp 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act as of December 31, 2021. Based on that evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures were effective as of December 31, 2021. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. Management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on that assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2021 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with GAAP. The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by an independent registered public accounting firm, as stated in their report, which is included below. Changes in Internal Control There was not any change in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) under the Exchange Act, during the three months ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 132 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Adaptive Biotechnologies Corporation Opinion on Internal Control Over Financial Reporting We have audited Adaptive Biotechnologies Corporation’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Adaptive Biotechnologies Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, convertible preferred stock and shareholders’ (deficit) equity and cash flows for each of the three years in the period ended December 31, 2021, and related notes and our report dated February 15, 2022 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Inherent Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Seattle, Washington February 15, 2022 133 Item 9B. Other Information Not applicable. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable . 134 PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this Item 10 of Form 10-K will be included in our definitive proxy statement to be filed with the SEC in connection with the solicitation of proxies for our 2022 Annual Meeting of Shareholders (“2022 Proxy Statement”) and is incorporated herein by reference. Item 11. Executive Compensation The information required by this Item 11 of Form 10-K will be included in our 2022 Proxy Statement and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item 12 of Form 10-K, including with respect to our equity compensation plans, will be included in our 2022 Proxy Statement and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item 13 of Form 10-K will be included in our 2022 Proxy Statement and is incorporated herein by reference. Item 14. Principal Accounting Fees and Services The information required by this Item 14 of Form 10-K will be included in our 2022 Proxy Statement and is incorporated herein by reference. 135 PART IV Item 15. Exhibits, Financial Statement Schedules (a) The following documents are filed as part of this Annual Report on Form 10-K : (1) Financial Statements See Index to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K . (2) Financial Statement Schedules All financial statement schedules have been omitted since the required information was not applicable or was not present in amounts sufficient to require submission of the schedules, or because the information required is included in the consolidated financial statements or the accompanying notes. (3) Exhibits The exhibits listed in the following Index to Exhibits are filed, furnished or incorporated by reference as part of this Annual Report on Form 10-K . Index to Exhibits Incorporated by Reference Exhibit Number Exhibit Title Filed/Furnished With This Report Form File No. Exhibit Filing Date 3.1 Amended and Restated Articles of Incorporation 8-K 001-38957 3.1 7/1/2019 3.2 Amended and Restated Bylaws 8-K 001-38957 3.2 7/1/2019 4.1 Seventh Amended and Restated Investors' Rights Agreement among the Registrant and certain of its shareholders, dated May 30, 2019 S-1 333-231838 4.1 5/30/2019 4.2 Description of Securities 10-K 001-38957 4.3 2/26/2020 10.1† Strategic Collaboration and License Agreement between Genentech, Inc. and the Registrant, dated December 19, 2018 S-1 333-231838 10.1 5/30/2019 10.2† Strategic Collaboration Agreement between Microsoft Corporation and the Registrant, dated December 11, 2017 S-1 333-231838 10.2 5/30/2019 10.3† Master Terms & Conditions of Sale between Illumina, Inc. and the Registrant, dated May 28, 2019 S-1/A 333-231838 10.3 6/17/2019 10.4 Amended and Restated Side Letter Agreement among Viking Global Equities LP, Viking Global Equities II LP, VGE III Portfolio Ltd., Viking Long Fund Master Ltd. and the Registrant, dated May 8, 2019 S-1 333-231838 10.5 5/30/2019 10.5* Form of Amended and Restated Employment Agreement between the Registrant and certain of its executive officers S-1 333-231838 10.7 5/30/2019 10.6* Form of Amended and Restated Employment Agreement between the Registrant and each of Lance Baldo, MD and Francis T. Lo S-1 333-231838 10.8 5/30/2019 10.7* Form of Restated Non-Employee Director Change in Control Agreement between the Registrant and each of its non-employee directors S-1 333-231838 10.9 5/30/2019 10.8* Executive Severance Agreement between the Registrant and Lance Baldo, MD, dated April 22, 2019 S-1 333-231838 10.11 5/30/2019 136 Incorporated by Reference Exhibit Number Exhibit Title Filed/Furnished With This Report Form File No. Exhibit Filing Date 10. 9 * Form of Executive Severance Agreement between the Registrant and certain of its executive officers 10-Q 001-38957 10.1 8/10/2020 10.10* Form of Indemnification Agreement between the Registrant and its directors and executive officers S-1 333-231838 10.13 5/30/2019 10.11* Adaptive Biotechnologies Corporation Non-Employee Director Compensation Policy 10-K 001-38957 10.12 2/24/2021 10.12* Adaptive Biotechnologies Corporation 2009 Equity Incentive Plan and form of award agreement thereunder S-1 333-231838 10.15 5/30/2019 10.13* Adaptive Biotechnologies Corporation 2019 Equity Incentive Plan and form of award agreement thereunder 10-Q 001-38957 10.12 8/13/2019 10.14* Adaptive Biotechnologies Corporation 2019 Employee Stock Purchase Plan S-1/A 333-231838 10.17 6/17/2019 10.15* Form of Stock Option Agreement for Non-U.S Participants 10-K 001-38957 10.16 2/24/2021 10.16* Form of Restricted Stock Unit Agreement for Non-U.S Participants 10-K 001-38957 10.17 2/24/2021 10.17 Lease Agreement between ARE-Seattle No. 11, LLC and Adaptive TCR Corporation, dated July 21, 2011, as amended by Amendment No. 1, dated August 26, 2011, Amendment No. 2, dated June 30, 2014, Amendment No. 3, dated November 5, 2015, Amendment No. 4, dated December 23, 2015, and Amendment No. 5, dated June 6, 2016 S-1 333-231838 10.18 5/30/2019 10.18† Sixth Amendment to Lease Agreement between Adaptive Biotechnologies Corporation and ARE-Seattle No. 11, LLC, dated August 2, 2019 8-K 001-38957 10.1 8/7/2019 10.19† Lease Agreement between Adaptive Biotechnologies Corporation and ARE-Seattle No. 12, LLC, dated August 2, 2019 8-K 001-38957 10.2 8/7/2019 21.1 List of Subsidiaries X 23.1 Consent of Independent Registered Public Accounting Firm X 24.1 Power of Attorney (included on the signature page) X 31.1 Certification of Principal Executive Officer pursuant to Rule 13a‑14(a) or Rule 15d‑14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 31.2 Certification of Principal Financial Officer pursuant to Rule 13a‑14(a) or Rule 15d‑14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 137 Incorporated by Reference Exhibit Number Exhibit Title Filed/Furnished With This Report Form File No. Exhibit Filing Date 32.1 Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 32.2 Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 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. X 101.SCH Inline XBRL Taxonomy Extension Schema Document X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X 104 Cover Page Interactive Data File (formatted in Inline XBRL and included in Exhibit 101) X * Management contract or compensation plan or arrangement. † Portions of this exhibit have been omitted pursuant to Item 601 of Regulation S-K promulgated under the Securities Act because the information is not material and would be competitively harmful if publicly disclosed. Item 16. Form 10-K Summary Not applicable . 138 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 , the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Seattle, State of Washington, on February 15, 2022. Adaptive Biotechnologies Corporation By: /s/ Chad Robins Chad Robins Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Chad Robins, his attorney-in-fact, with the power of substitution, for him in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the SEC, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Chad Robins Chad Robins Chief Executive Officer and Director (Principal Executive Officer) February 15, 2022 /s/ Chad Cohen Chad Cohen Chief Financial Officer (Principal Financial Officer) February 15, 2022 /s/ Kyle Piskel Kyle Piskel VP, Principal Accounting Officer (Principal Accounting Officer) February 15, 2022 /s/ Kevin Conroy Kevin Conroy Director February 15, 2022 /s/ Michelle Griffin Michelle Griffin Director February 15, 2022 /s/ Robert Hershberg Robert Hershberg, PhD, MD Director February 15, 2022 /s/ Peter Neupert Peter Neupert Director February 15, 2022 /s/ Katey Owen Katey Owen, PhD Director February 15, 2022 /s/ Michael Pellini Michael Pellini, MD Director February 15, 2022 /s/ Leslie Trigg Leslie Trigg Director February 15, 2022 139