What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-03-01 compared with 2021-03-22 · 613 added, 602 removed, 836 unchanged (59% of the section changed)

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statemen ts of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Changes in Stockholders’/Member’s Equity

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generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 1, 2022 expressed an unqualified opinion thereon.

Adoption of ASU 2016-02, Leases

As discussed in Note 1 to the consolidated financial statements, the Company changed its method for accounting for its leases as a result of the adoption of Accounting Standards Update No.

2016-02, Leases (Topic 842), effective January 1, 2021.

Basis for Opinion

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Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

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.

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Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the 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 a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Payable to related parties pursuant to a Tax Receivable Agreement

Description of the Matter

As discussed in Notes 1 and 12 of the December 31, 2021 consolidated financial statements, the Company has recorded a $ 748.3 million payable to related parties pursuant to a Tax Receivable Agreement (TRA).

The TRA liability represents the amount the Company estimates to pay to the counterparties to the TRA that are former owners of the Company who are related parties (pre-IPO owners).

The liability is computed as 85% of the estimated cash tax savings to be received by the Company from utilizing the positive tax attributes contributed by pre-IPO owners.

Auditing management’s accounting for the TRA liability is complex because of the application of the tax laws used to determine the tax basis upon which to calculate the corresponding TRA liability, and judgmental because of the applicable state apportionment factors and nexus considerations utilized in determining the appropriate blended state income tax rate.

These factors involved subjective auditor judgment and audit effort in performing procedures and evaluating the appropriateness of the calculation of the tax basis and the blended tax rate.

In addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained from these procedures.

How We Addressed the Matter in Our Audit

Our audit procedures included, among others, testing the information used in the calculation of the TRA liability, and the involvement of professionals with specialized skills and knowledge to assist in (i) developing an independent calculation of the tax basis, (ii) comparing the independent calculation to management’s calculations to evaluate the reasonableness of the tax basis, (iii) evaluating the apportionment factors, nexus conclusions, and the resulting blended tax rate, and (iv) assessing management’s application of the tax laws.

Evaluating management’s determination of the apportionment factors involved considering the current and expected activity levels of the Company and whether the apportionment factors were consistent with evidence obtained in other areas of the audit.

/s/ Ernst & Young LLP

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CONSOLIDATED BALANCE SHEETS

(in thousands, except shares and unit amounts and par value)

(in thousands, except par value)

Current assets:

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Total assets $ 1,918,276 $ 1,270,691

Liabilities and stockholders'/member’s equity

Liabilities and stockholders' equity

Current liabilities:

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Deferred revenue 10,211 78,061

Current portion of payable to related parties pursuant to a Tax Receivable Agreement 34,838 —

Current portion of long-term debt 6,000 6,000

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Lease facility financing obligation, less current portion — 56,167

Payable to related parties pursuant to a Tax Receivable Agreement 389,546 —

Payable to related parties pursuant to a Tax Receivable Agreement, less current portion 713,481 389,546

Other long-term liabilities 41,066 2,231

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Commitments and contingencies (Note 6)

Stockholders' / member's equity

Member’s equity — 183,910

Stockholders' equity:

Class A common stock, $ 0.01 par value - 500,000 shares authorized;

96,646,515 shares issued and outstanding as of December 31, 2020 966 —

131,488 and 96,647 shares issued and outstanding as of December 31, 2021 and 2020, respectively

Class B common stock, $ 0.01 par value - 300,000 shares authorized;

160,974,129 shares issued and outstanding as of December 31, 2020 1,610 —

123,669 and 160,974 shares issued and outstanding as of December 31, 2021 and 2020, respectively

Additional paid-in capital 128,386 85,125

Retained earnings 184,561 854

Accumulated other comprehensive loss — ( 44 )

Retained earnings (accumulated deficit) 854 (42,381)

Total stockholders' / member's equity attributable to Maravai LifeSciences Holdings, Inc.

Total stockholders' equity attributable to Maravai LifeSciences Holdings, Inc.

315,499 88,511

Non-controlling interests 66,235 3,231

Total stockholders' / member’s equity 154,746 144,627

Total liabilities and stockholders' / member’s equity $ 1,270,691 $ 577,796

Non-controlling interest 229,862 66,235

Total stockholders' equity 545,361 154,746

Total liabilities and stockholders' equity $ 1,918,276 $ 1,270,691

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

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CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and unit amounts and per share and per unit amounts)

(in thousands, except per share and per unit amounts)

Year Ended December 31,

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Change in estimated fair value of contingent consideration — — 322

Gain on sale of business ( 11,249 ) — —

Gain on sale and leaseback transaction — ( 19,002 ) —

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Interest expense ( 30,260 ) ( 30,740 ) ( 29,959 )

Change in payable to related parties pursuant to a Tax Receivable Agreement 6,101 — —

Loss on extinguishment of debt — ( 7,592 ) —

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Net income (loss) 469,250 78,816 ( 5,201 )

Net (loss) attributable to non-controlling interests (10,156) (731) (12,443)

Net income (loss) attributable to non-controlling interests 287,213 ( 10,156 ) ( 731 )

Net income (loss) attributable to Maravai LifeSciences Holdings, Inc.

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Total other comprehensive income (loss) 469,305 78,772 ( 5,167 )

Comprehensive loss attributable to non-controlling interests (10,156) (731) (12,443)

Comprehensive income (loss) attributable to non-controlling interests 287,224 ( 10,156 ) ( 731 )

Total comprehensive income (loss) attributable to Maravai LifeSciences Holdings, Inc.

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Member's Equity Shares Amount Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Non-controlling Interest Total Stockholders'/Member's Equity

January 1, 2018 $ 199,614 — $ — — $ — $ — $ — $ (98) $ 15,428 $ 214,944

Distribution to non-controlling interest holder (52,056) — — — — — — — — (52,056)

Repurchase of incentive units (9) — — — — — — — — (9)

Equity-based compensation 1,495 — — — — — — — 626 2,121

Net loss (4,470) — — — — — — — (731) (5,201)

Foreign currency translation adjustment — — — — — — — (69) — (69)

December 31, 2018 $ 144,572 — $ — — $ — $ — $ — $ ( 167 ) $ 3,611 $ 148,016

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Issuance of Class A common stock in connection with the IPO, net of issuance costs of $$ 108,571

MARAVAI LIFESCIENCES HOLDINGS, INC.

Class A Common Stock Class B Common Stock

Member's Equity Shares Amount Shares Amount Additional Paid In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Non-controlling Interest Total Stockholders'/Member's Equity

— 69,000 690 — — 1,753,742 — — — 1,754,432

Acquisition of preexisting LLC Units from MLSH 1 — — — — — ( 1,421,760 ) — ( 29 ) ( 2,538 ) ( 1,424,327 )

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Net loss — — — — — — ( 3,044 ) — ( 17,787 ) ( 20,831 )

MARAVAI LIFESCIENCES HOLDINGS, INC.

Class A Common Stock Class B Common Stock

Member's Equity Shares Amount Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Non-controlling Interest Total Stockholders'/Member's Equity

Recognition of impact of entering into Tax Receivable Agreement $ — — $ — — $ — $ 42,776 $ — $ — $ — $ 42,776

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December 31, 2020 — 96,647 966 160,974 1,610 85,125 854 ( 44 ) 66,235 154,746

Cumulative effect of adoption of ASC 842, net of tax — — — — — — 1,670 — 2,784 4,454

Effect of exchanges of LLC Units — 34,734 348 ( 34,734 ) ( 348 ) 31,003 — — ( 31,003 ) —

Recognition of impact of Tax Receivable Agreement due to exchanges of LLC Units — — — — — 53,000 — — — 53,000

Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes — 107 1 — — 1,669 — — — 1,670

Impact of cash contribution to Topco LLC, exchange and forfeiture of LLC Units, and forfeiture of Class B common stock by MLSH 1 — — — ( 2,571 ) ( 25 ) ( 46,206 ) — — 51,451 5,220

Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC — — — — — ( 809 ) — — 809 —

Stock-based compensation — — — — — 4,645 — — 5,813 10,458

Distribution for tax liabilities to non-controlling interest holder — — — — — ( 41 ) — — ( 153,451 ) ( 153,492 )

Net income — — — — — — 182,037 — 287,213 469,250

Foreign currency translation adjustment — — — — — — — 44 11 55

December 31, 2021 $ — 131,488 $ 1,315 123,669 $ 1,237 $ 128,386 $ 184,561 $ — $ 229,862 $ 545,361

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

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Net income (loss) $ 469,250 $ 78,816 $ ( 5,201 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation 6,413 5,517 3,810

Amortization of intangible assets 18,339 20,320 20,274

Change in provision for doubtful accounts 233 (152) (415)

Non-cash operating lease expense 8,792 — —

Amortization of deferred financing costs 2,676 1,825 1,734

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Deferred income taxes 46,904 ( 5,464 ) ( 1,159 )

Change in estimated fair value of contingent consideration — 322 939

Gain on sale of business ( 11,249 ) — —

Gain on sale and leaseback transaction — ( 19,002 ) —

Acquired and in-process research and development costs — 2,881 —

Non-cash interest expense recognized on lease facility financing obligation 1,289 — —

Financing costs incurred for line of credit — ( 3,239 ) —

Revaluation of liabilities payable to related parties pursuant to a Tax Receivable Agreement ( 6,101 ) — —

Other ( 281 ) 2,419 688

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Prepaid expenses and other assets ( 9,513 ) ( 5,518 ) ( 1,983 )

Other assets — — (570)

Accounts payable 676 1,176 2,470

Accrued expenses and other current liabilities ( 3,457 ) 17,777 3,505

Earn-out liability — — (14,547)

Other long-term liabilities ( 4,521 ) ( 2,519 ) —

Deferred revenue ( 67,851 ) 77,220 80

Net cash provided by (used in) operating activities 152,187 24,115 (186)

Net cash provided by operating activities 368,570 152,187 24,115

Investing activities

Cash paid for asset acquisition, net of cash acquired — ( 3,024 ) —

Working capital adjustment for acquisition in prior year — — 160

Acquisition of patents — — (70)

Purchases of property and equipment ( 14,850 ) ( 25,408 ) ( 17,148 )

Proceeds from sale of building 548 34,500 —

Proceeds from sale of business, net of cash divested 119,957 — —

Net cash provided by (used in) investing activities 105,655 6,068 ( 17,148 )

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Payments made on facility financing lease obligation and capital lease — ( 201 ) ( 140 )

Payments to MLSH 1 pursuant to the Tax Receivable Agreement ( 1,115 ) — —

Payments to MLSH 2 pursuant to the Tax Receivable Agreement ( 192 ) — —

Payment for non-controlling interests in MLSC — ( 120,005 ) —

Payment to MLSH 2 for Blocker Mergers — ( 208,053 ) —

Proceeds from issuance of Class A common stock sold in IPO, net of offering costs 1,757,245 — —

MARAVAI LIFESCIENCES HOLDINGS, INC.

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2021 2020 2019

Proceeds from issuance of Class A common stock sold in IPO, net of offering costs — 1,757,245 —

Proceeds from issuance of Class B common stock sold to MLSH 1 — 1,687 —

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Repurchase of Class A common stock from MLSH 2 — ( 33,658 ) —

Proceeds from employee stock purchase plan 321 — —

Net cash provided by (used in) financing activities 53,212 (4,167) (9,167)

Proceeds from employee stock purchase plan and exercise of stock options, net of shares withheld for employee taxes 1,709 321 —

Net cash (used in) provided by financing activities ( 159,049 ) 53,212 ( 4,167 )

Effects of exchange rate changes on cash ( 88 ) 17 34

Net increase (decrease) in cash, and restricted cash 211,484 2,834 (12,873)

Net increase in cash 315,088 211,484 2,834

Cash, beginning of period 236,184 24,700 21,866

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Financing cost deducted from long-term debt proceeds $ — $ 6,000 $ —

Building and improvements capitalized under lease financing transaction $ 700 $ 51,200 $ 15,374

Building and improvements capitalized under lease financing transactions $ — $ 700 $ 51,200

Property and equipment under new capital lease $ — $ — $ 15

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Exchange of Class A common stock for the Blocker Mergers $ — $ 782,073 $ —

Recognition of deferred tax assets from Organizational Transactions $ 441,984 $ — $ —

Recognition of liabilities under Tax Receivable Agreement $ 389,546 $ — $ —

Recognition of deferred tax assets from Organizational Transactions, subsequent exchanges and cash contribution $ 423,361 $ 441,984 $ —

Recognition of liabilities under the Tax Receivable Agreement $ 366,179 $ 389,546 $ —

IPO issuance costs included in accounts payable and accrued expenses $ — $ 2,816 $ —

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Maravai LifeSciences Holdings, Inc.

(the “Company”, and together with its consolidated subsidiaries, “Maravai”, “we”, “us”, “our”) was formed as a Delaware corporation in August 2020 for the purpose of facilitating an initial public offering (“IPO”) of its Class A common stock, facilitate certain organizational transactions and to operate the business of Maravai Topco Holdings, LLC (“Topco LLC”) and its consolidated subsidiaries.

We are a leading life sciences company providing critical products to enable the development of drug therapies, diagnostics, novel vaccines and support research on human diseases.

Our products address the key phases of biopharmaceutical development and include complex nucleic acids for diagnostic and therapeutic applications, antibody-based products to detect impurities during the production of biopharmaceutical products, and products to detect the expression of proteins in tissues of various species.

The Company is headquartered in San Diego, California and has three principal businesses:

(the “Company”, and together with its consolidated subsidiaries, “Maravai”, “we”, “us”, “our”) provides critical products to enable the development of drugs, therapeutics, diagnostics, vaccines and support research on human diseases.

Our products address the key phases of biopharmaceutical development and include complex nucleic acids for diagnostic and therapeutic applications and antibody-based products to detect impurities during the production of biopharmaceutical products.

The Company is headquartered in San Diego, California and has historically operated in three principal businesses:

Nucleic Acid Production, Biologics Safety Testing, and Protein Detection.

In September 2021, the Company completed the divestiture of its Protein Detection business (see Note 2).

Our Nucleic Acid Production business manufactures and sells products used in the fields of gene therapy, vaccines, nucleoside chemistry, oligonucleotide therapy and molecular diagnostics, including reagents used in the chemical synthesis, modification, labelling and purification of deoxyribonucleic acid (“DNA”) and ribonucleic acid (“RNA”).

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Our Biologics Safety Testing business sells highly specialized analytical products for use in biologic manufacturing process development, including custom product-specific development antibody and assay development services.

Our Protein Detection business sells innovative labeling and detection reagents for researchers in immunohistochemistry.

Organizational Transactions and Initial Public Offering

In November 2020, the Company completed its initial public offering (“IPO”) and sold 69,000,000 shares of Class A common stock at a public offering price of $27.00 per share and received proceeds of $1.8 billion, net of underwriting discounts and commissions, which the Company used to purchase 55,823,011 previously-issued and 3,703,704 newly-issued LLC units in Topco LLC to pay Maravai Life Sciences Holdings 2 (“MLSH 2”) as consideration for certain organizational transactions that occurred before the IPO.

Immediately prior to, and in connection with, the completion of our IPO, the Company completed a series of organizational transactions (“Organizational Transactions”), including:

• The amendment and restatement of Topco LLC’s operating agreement (the “New LLC Operating Agreement”) to, among other things, (i) modify Topco LLC’s capital structure by replacing the membership interests held by Topco LLC’s existing owners with a new class of Topco LLC units (the “LLC Units”) and (ii) appoint the Company as the sole managing member of Topco LLC.

• Amend and restate the Company’s certificate of incorporation to among other things, authorize the Company to issue two classes of common stock:

Class A common stock and Class B common stock.

• The issuance of shares of the Company’s Class B common stock to Maravai Life Sciences Holdings, LLC (“MLSH 1”) which was Topco LLC’s pre-IPO owner on a one-to-one basis with the number of LLC Units owned;

The Company is the sole managing member of Topco LLC, which operates and controls TriLink Biotechnologies, LLC, Glen Research, LLC, Vector Laboratories, Inc., MockV Solutions, LLC and Cygnus Technologies, LLC (“Cygnus”) and their respective subsidiaries.

MLSH 1 is the only other member of Topco LLC.

Although we have a minority economic interest, we have sole voting power in, and control the management of, Topco LLC.

As a result, we consolidate Topco LLC financial results and report a non-controlling interest related to the portion of Topco LLC not owned by us.

As of December 31, 2020, we owned approximately 38% of Topco LLC.

The Organizational Transactions were considered transactions between entities under common control.

As a result, the consolidated financial statements for periods prior to the IPO and the Organizational Transactions have been adjusted to combine the previously separate entities for presentation purposes.

Basis of Presentation

Our Protein Detection business sold innovative labeling and detection reagents for researchers in immunohistochemistry.

We were incorporated as a Delaware corporation in August 2020 for the purpose of facilitating an initial public offering (“IPO”) and other related organizational transactions, completed in November 2020 as discussed in Note 8, in order to operate and control all of the business and affairs of Maravai Topco Holdings, LLC (“Topco LLC”) and its consolidated subsidiaries.

Maravai Life Sciences Holdings, LLC (“MLSH 1”) is the only other member of Topco LLC.

The Company is the sole managing member of Topco LLC, which operates and controls TriLink Biotechnologies, LLC (“TriLink”), Glen Research, LLC, MockV Solutions, LLC and Cygnus Technologies, LLC (“Cygnus”) and their respective subsidiaries.

Prior to the Company’s divestiture of its Protein Detection business in September 2021, Topco LLC also operated and controlled Vector Laboratories, Inc.

and its subsidiaries.

The Company operates and controls all of the business and affairs of Topco LLC, and through Topco LLC and its subsidiaries, conducts its business.

Because we manage and operate the business and control the strategic decisions and day-to-day operations of Topco LLC and also have a substantial financial interest in Topco LLC, we consolidate the financial results of Topco LLC, and a portion of our net income is allocated to the non-controlling interests in Topco LLC held by MLSH 1.

All significant intercompany transactions and accounts between the businesses comprising the Company have been eliminated in the accompanying consolidated financial statements.

Our audited consolidated financial statements are presented in U.S.

They have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.

GAAP") pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

The pre-IPO organizational transactions were considered transactions between entities under common control.

As a result, the consolidated financial statements for periods prior to the IPO have been adjusted to combine the previously separate entities for presentation purposes.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.

GAAP") pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and include our accounts and the accounts of our subsidiaries.

All intercompany transactions and accounts between the businesses comprising the Company have been eliminated in the accompanying consolidated financial statements.

Variable Interest Entities

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The Company’s determination about whether it should consolidate such VIEs is made continuously as changes to existing relationships or future transactions may result in a consolidation event.

On November 11, 2020, Topco LLC’s member approved an amendment to its operating agreement to increase the authorized common units from 1,000 to 253,916,941 and effect a 253,916.941-for-1 split of its common units.

All of the unit and per unit information included in the accompanying consolidated financial statements has been adjusted to reflect the split.

Use of Estimates

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These estimates are based on management’s knowledge about current events and expectations about actions the Company may undertake in the future.

Significant estimates include, but are not limited to, revenue recognition, the net realizable value of inventory, expected future cash flows including growth rates, discount rates, terminal values and other assumptions and estimates used to evaluate the recoverability of long-lived assets, estimated fair values of intangible assets and goodwill and the payable to related parties pursuant to the Tax Receivable Agreement, amortization methods and periods, valuation of intangible assets, the fair value of leased buildings and other assumptions associated with lease financing transactions, the estimated fair value of our long-term debt, equity-based compensation, the valuation of incentive units, allowance for doubtful accounts, and accounting for income taxes and assessment of valuation allowances.

Significant estimates include, but are not limited to, the measurement of right-of-use assets and lease liabilities and related incremental borrowing rate, the payable to related parties pursuant to the Tax Receivable Agreement, and the realizability of our net deferred tax assets.

Actual results could differ materially from those estimates.

Revenue Recognition

The Company generates revenue from the sale of products and services and the performance of services in the fields of nucleic acid production, biologics safety testing, and protein detection.

The Company generates revenue primarily from the sale of products, and to a much lesser extent, services in the fields of nucleic acid production, biologics safety testing, and protein detection.

Revenue is recognized when control of promised goods or services is transferred to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

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Performance obligations are considered distinct if they are both capable of being distinct and distinct within the context of the contract.

determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract.

In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract.

As a practical expedient, we do not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.

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Nucleic Acid Production revenue is generated from the manufacture and sale of highly modified, complex nucleic acids products to support the needs of our of customers’ research, therapeutic and vaccine programs.

The primary offering of products include;

CleanCap ® , mRNA, and specialized oligonucleotides.

The primary offering of products includes CleanCap, mRNA, and specialized oligonucleotides.

Contracts typically consist of a single performance obligation.

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Revenue for contracts for certain custom nucleic acid products, with an enforceable right to payment and a reasonable margin for work performed to date, is recognized over time, based on a cost-to-cost input method over the manufacturing period.

Payments received from customers in advance of manufacturing their products is recorded as deferred revenue until the products were delivered.

Biologics Safety Testing

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Assay development service contracts consist of a single performance obligation, revenue is recognized at a point in time when a successful antigen test and report is provided to the customer.

Affinity extraction services, which generally occur over a short period of time, consist of a single performance obligation to perform the extraction service and provide a summary report to the customer.

Affinity extraction services, which generally occur over a short period of

time, consist of a single performance obligation to perform the extraction service and provide a summary report to the customer.

Revenue is recognized either over time or at a point in time depending on contractual payment terms with the customer.

The Company also has certain licensing and royalty arrangements with an immaterial amount of revenue.

Protein Detection

The Company also manufactures and sells protein labeling and detection reagents to customers that are used for basic research and development.

The contracts to sell these catalog products consist of a single performance obligation to deliver the reagent products.

Revenue from these contracts is recognized at a point in time, generally upon shipment of the final product to the customer.

We recognize royalty revenue related to certain out-licensing and royalty arrangements in the period the sales or usage occur using third-party evidence to estimate the amount to be recorded.

To date this revenue has not been material to the consolidated financial statements.

The Company has elected the practical exemption to not disclose the unfulfilled performance obligations for contracts with an original length of one year or less.

The Company had no material unfulfilled performance obligations for contracts with an original length greater than one year at December 31, 2020 and 2019, respectively.

Prior to the divestiture of its Protein Detection business in September 2021 (see Note 2), the Company also manufactured and sold protein labeling and detection reagents to customers that were used for basic research and development.

The contracts to sell these catalog products consisted of a single performance obligation to deliver the reagent products.

Revenue from these contracts was recognized at a point in time, generally upon shipment of the final product to the customer.

The Company elected the practical exemption to not disclose the unfulfilled performance obligations for contracts with an original length of one year or less.

The Company had no material unfulfilled performance obligations for contracts with an original length greater than one year at December 31, 2021.

The Company accepts returns only if the products do not meet customer specifications and historically, the Company’s volume of product returns has not been significant.

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Standalone selling prices for products are determined based on the prices charged to customers, which are directly observable.

Standalone selling price of services are

mostly based on time and materials.

Standalone selling price of services are mostly based on time and materials.

Generally, payments from customers are due when goods and services are transferred.

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Variable consideration has not been material to our consolidated financial statements.

Sales taxes collected by the Company are not included in the transaction price as revenue they are ultimately remitted to a governmental authority.

Sales taxes collected by the Company are not included in the transaction price as revenue as they are ultimately remitted to a governmental authority.

Shipping and handling costs

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Contract assets are generated when contractual billing schedules differ from revenue recognition timing and the Company records contract receivable when it has an unconditional right to consideration.

Contract assets balances, which are included in prepaid and other current assets, totaled $0.2 million and $0.8 million as of December 31, 2020 and 2019, respectively.

Contract assets balances, which are included in prepaid and other current assets, were no t material as of December 31, 2020.

There were no contract asset balances as of December 31, 2021.

Contract liabilities include billings in excess of revenue recognized, such as customer deposits and deferred revenue.

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The following tables summarize the revenue by segment and region for the periods presented (in thousands):

For the year ended December 31, 2020 Nucleic Acid

Production Biologics

Testing Protein

Detection Total

Year Ended December 31, 2021

Nucleic Acid Production Biologics Safety Testing Protein Detection Total

North America $ 280,369 $ 25,686 $ 11,016 $ 317,071

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Total revenue $ 711,864 $ 68,417 $ 18,959 $ 799,240

For the year ended December 31, 2019 Nucleic Acid

Production Biologics

Testing Protein

Detection Total

Year Ended December 31, 2020

Nucleic Acid Production Biologics Safety Testing Protein Detection Total

North America $ 115,216 $ 21,787 $ 13,343 $ 150,346

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Total revenue $ 206,320 $ 54,897 $ 22,881 $ 284,098

For the year ended December 31, 2018 Nucleic Acid

Production Biologics

Testing Protein

Detection Total

Year Ended December 31, 2019

Nucleic Acid Production Biologics Safety Testing Protein Detection Total

North America $ 49,757 $ 18,984 $ 15,284 $ 84,025

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Total revenue $ 72,602 $ 44,416 $ 26,122 $ 143,140

The following table provides a disaggregation of revenue for the years ended December 31, 2020 and 2019, based on the pattern of revenue recognition (in thousands):

Revenue recognized at a point in time $ 272,231 $ 133,091

Revenue recognized over time 11,867 10,049

Total revenue $ 284,098 $ 143,140

Prior to January 1, 2019, revenue from the sale of products and services was recognized when all of the following conditions were met:

(1) there was persuasive evidence of an arrangement;

(2) the product had been delivered to the customer;

(3) the collection of the fees was reasonably assured;

and (4) the amount of fees to be paid by the customer was fixed or determinable.

When an arrangement involved multiple elements, the multiple elements, referred to as deliverables, were evaluated to determine whether they represent separate units of accounting.

The Company performed this evaluation at the inception of an arrangement and as each item was delivered in the arrangement.

Generally, the Company accounted for a deliverable separately if the delivered item has standalone value to the customer and delivery or performance of the undelivered item or service was probable and substantially in the Company’s control.

When multiple elements could be separated into separate units of accounting, arrangement consideration was allocated at the inception of the arrangement, based on each unit’s relative selling price, and recognized based on the method most appropriate for that unit.

Product sales

Revenue for manufacturing of products was recognized upon the delivery of the products in accordance with the terms of the contract, which specify transfer of title and risk of loss.

Payments received from customers in advance of manufacturing their products was recorded as deferred revenue until the products were delivered.

Service revenue

The Company also enters into custom antibody and assay development contracts with customers.

The Company performs a number of acts under these contracts for which the pattern of performance cannot be discerned and therefore the Company recognizes service revenue on a straight-line basis over the contractual term or expected term of the arrangement, whichever is longer.

Payments received in advance of performing these services was recognized as deferred revenue.

Revenue recognized at any point in time is limited to cash received and amounts contractually due.

Total revenue is attributed to geographic regions based on the bill-to location of the transaction.

For all periods presented, the majority of our revenue was recognized at a point in time.

Shipping and Handling Costs

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Research and Development

Research and development (“R&D”) expenses include personnel costs, including salaries, benefits and equity-based compensation for laboratory personnel, and costs of supplies.

Research and development (“R&D”) expenses include personnel costs, including salaries, benefits and equity-based compensation for laboratory personnel, outside contracted services, and costs of supplies.

R&D costs are expensed as incurred.

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Stock-Based Compensation

On November 19, 2020, in connection with the IPO, the Company’s board of directors adopted the 2020 Omnibus Incentive Plan (the “2020 Plan”).

We have subsequently granted stock options to purchase shares of our Class A commons stock as well as restricted stock units (“RSUs”) from the 2020 Plan.

The Company measures stock-based compensation at fair value on the grant date of the award.

The fair value of RSUs is determined based on the number of shares granted and the quoted market price of the Company’s Class A common stock on the date of grant.

The Company recognized stock-based compensation for all equity awards made to employees based upon the awards’ estimated grant date fair value.

For equity awards that vest subject to the satisfaction of service requirements, compensation expense is measured based on the fair value of the award on the date of grant and expense is recognized on a straight-line basis over the requisite service period, which is typically four years .

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If actual results are not consistent with the Company’s assumptions and judgments used in making these estimates, the Company may be required to increase or decrease compensation expense, which could be material to the Company’s consolidated results of operations.

The fair value of restricted stock units (“RSUs”) is determined based on the number of shares granted and the quoted market price of the Company’s Class A common stock on the date of grant.

Unit-Based Compensation

Prior to the IPO, MLSH 1 had granted unit-based awards to certain executives of Topco LLC who are also executives of the Company in the form of non-vested units.

Up until the IPO, MLSH 1 had granted unit-based awards to certain executives of Topco LLC who are also executives of the Company in the form of non-vested units.

Topco LLC’s controlled subsidiary, MLSC, also granted unit-based awards only to certain employees of its subsidiaries (collectively, the “Incentive Units”).

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Forfeitures are recognized when they occur.

These Incentive Units are subject to service, market and performance conditions.

For Incentive Units subject to performance conditions, the Company evaluates the probability of achieving each performance condition at each reporting date and recognizes expense over the requisite service period when it is deemed probable that a performance condition will be met using the accelerated attribution method over the requisite service period.

Upon the completion of the IPO all of the Incentive Units subject to a performance and market condition vested (see Note 10).

The grant date fair value of Incentive Unit awards was determined by the Company’s Board of Directors with the assistance of management and an independent third-party valuation specialist.

The grant date fair value of Incentive Units was determined first by estimating an aggregate equity value using a weighting of discounted cash flows, comparable public companies, and comparable-transactions valuation methodologies.

An Option-Pricing Method, which utilizes certain assumptions including volatility, time to liquidation, a risk-free interest rate, and an assumption for a discount for lack of marketability, was then used to allocate the total enterprise values to the different classes of ownership according to their rights and preferences.

determining the fair value of the Incentive Units, the methodologies used to estimate the enterprise values were performed using methodologies, approaches, and assumptions consistent with the American Institute of Certified Public Accountants Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (“AICPA Accounting and Valuation Guide”).

We are subject to U.S.

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federal and state income tax purposes.

Topco LLC’s wholly-owned U.S.

Topco LLC’s previously wholly-owned U.S.

subsidiary, Maravai Life Sciences, Inc.

(“Maravai Inc.”) and its subsidiaries, are taxpaying entities in the U.S., Canada, and the U.K.

(“Maravai Inc.”) and its subsidiaries, were taxpaying entities in the U.S., Canada, and the U.K.

Maravai Inc.’s subsidiaries were sold and Maravai Inc.

ceased to be a regarded entity and was deemed liquidated for U.S.

tax purposes during the year ended December 31, 2021.

Topco LLC’s other subsidiaries are treated as pass-through entities for federal and state income tax purposes.

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As such, our tax provision consists solely of the activities of Maravai Inc.

and its subsidiaries, as well as our share of income generated by Topco LLC.

and its subsidiaries, prior to their disposal, as well as our share of income generated by Topco LLC.

We account for income taxes under the asset and liability method of accounting.

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Such differences, if identified in future periods, could have a material effect on the amounts recorded in our consolidated financial statements.

Interest and penalties related to unrecognized tax benefits are recognized in income tax expense in the accompanying consolidated statements of operations and comprehensive income (loss).

Interest and penalties related to

unrecognized tax benefits are recognized in income tax expense in the accompanying consolidated statements of operations.

The provision for income taxes includes the effects of any accruals that the Company believes are appropriate, as well as any related net interest and penalties.

On March 18, 2020, the Families First Coronavirus Response Act (“FFCR Act”), and on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) were each enacted in response to the COVID-19 pandemic.

The FFCR Act and the CARES Act contain numerous income tax provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.

On June 29, 2020, Assembly Bill 85 (“A.B.

85”) was signed into California law.

85 provides for a three-year suspension of the use of net operating losses for medium and large businesses and a three-year cap on the use of business incentive tax credits to offset no more than $5.0 million of tax per year.

85 suspends the use of net operating losses for taxable years 2020, 2021 and 2022 for certain taxpayers with taxable income of $1.0 million or more.

The carryover period for any net operating losses that are suspended under this provision will be extended.

85 also requires that business incentive tax credits including carryovers may not reduce the applicable tax by more than $5.0 million for taxable years 2020, 2021 and 2022.

The FFCR Act and A.B.

85 did not have a material impact on the Company’s consolidated financial statements as of December 31, 2020;

however, the Company continues to examine the impacts the FFCR Act and A.B.

85 may have on its business, results of operations, financial condition, liquidity and related disclosures.

During the year-ended December 31, 2020, the Company released $1.3 million of valuation allowance on its interest expense carryforward due to the increase in limitation provided by the CARES Act (see Note 12).

Payables to Related Parties Pursuant to the Tax Receivable Agreement

In connection with the completion of our IPO we entered into a TRA with MLSH 1 and MLSH 2.

In November 2020, we entered into a Tax Receivable Agreement (“TRA”) with MLSH 1 and MLSH 2.

The TRA provides for the payment by us to MLSH 1 and MLSH 2, collectively, of 85 % of the amount of tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize from exchanges of LLC Units (together with the corresponding shares of Class B common stock) for Class A common stock, as a result of (i) certain increases in the tax basis of assets of Topco LLC and its subsidiaries resulting from purchases or exchanges of LLC Units, (ii) certain tax attributes of the Organization Transactions and (iii) certain other tax benefits related to our entering into the TRA, including tax benefits attributable to payments that we make under the TRA (collectively, the “Tax Attributes”).

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The current portion, if any, of the liability is the amount estimated to be paid within one year of the consolidated balance sheet date.

For purposes estimating the value of the payable to related parties for the TRA, the tax benefit deemed realized by us and payable to MLSH 1 and MLSH 2 is computed by taking 85% of the difference of between our undiscounted forecasted cash income tax liability over the term of benefit of the Tax Attributes and the forecasted amount of such taxes that we would have been required to pay had there been no Tax Attributes.

For purposes of estimating the value of the payable to related parties for the TRA, the tax benefit deemed realized by us and payable to MLSH 1 and MLSH 2 is computed by taking 85% of the difference of between our undiscounted forecasted cash income tax liability over the term of benefit of the Tax Attributes and the forecasted amount of such taxes that we would have been required to pay had there been no Tax Attributes.

The TRA applies to each of our taxable years, beginning with the taxable year that the TRA is entered into.

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In November 2020, and before the closing of the IPO, Topco LLC repurchased all of the outstanding non-controlling interests in MLSC for $ 166.4 million (see Note 11) .

• In November 2020, based on the Organizational Transactions described above, we became the sole managing member of Topco LLC.

As of December 31, 2020, we hold approximately 38% of the outstanding LLC Units of Topco LLC, and approximately 62% of the outstanding LLC Units of Topco LLC are held by MLSH 1.

• In November 2020, we became the sole managing member of Topco LLC (see Note 8).

As of December 31, 2021 and 2020, we owned approximately 52 % and 38 % of Topco LLC, respectively.

Therefore, we report non-controlling interests based on LLC Units of Topco LLC held by MLSH 1 on our consolidated balance sheet as of December 31, 2021.

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As such, future exchanges of Paired Interests by MLSH 1 will result in a change in ownership and reduce or increase the amount recorded as non-controlling interests and increase or decrease additional paid-in-capital when Topco LLC has positive or negative net assets, respectively.

For the year ended December 31, 2020 MLSH 1 had not exchanged any Paired Interests.

During the year ended December 31, 2018, $52.0 million of capital distributions were made to certain legacy unit holders of MLSC Holdings, LLC (“MLSC”), the parent entity of Cygnus.

The 2018 distribution was treated as a preferred return of capital

per the terms of the MLSC limited liability company agreement (the “MLSC LLC Agreement”).

There were no such distributions made during the year ended December 31, 2019.

A tax distribution of $0.3 million was made to the non-controlling interest holders of MLSC during the year ended December 31, 2020.

Segment Information

The Company operates in three reportable segments.

Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance.

The Company has historically operated in three reportable segments.

Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance.

The Company’s chief operating decision maker (“CODM”), its Chief Executive Officer, allocates resources and assesses performance based upon discrete financial information at the segment level.

Substantially all of our long-lived assets are located in the United States.

All of our long-lived assets are located in the United States.

After the divestiture of Vector in September 2021 (see Note 2), the Company no longer has the Protein Detection segment.

The Company has reported the historical results of the Protein Detection business as such discrete financial information evaluated by the CODM for the periods presented included the information for this legacy segment.

Cash consists of deposits held at financial institutions.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Credit Losses

Accounts receivable primarily consist of amounts due from customers for product sales and services.

Estimated allowances for doubtful accounts are provided for based on an evaluation of potential uncollectible accounts.

The Company evaluates accounts receivable to determine collectability.

Judgments and estimates are involved in performing this evaluation, which are based on the Company’s assessment of a customer’s ability to pay, credit quality of the customer, age of the receivable balance and current economic conditions.

As of December 31, 2020 and 2019, the allowance for doubtful accounts was approximately $0.4 million and $0.1 million, respectively.

Write-offs of accounts receivable and recoveries were not significant during either 2020 or 2019.

To manage credit risk certain Company subsidiaries require select customers to prepay for product prior to shipment.

Such prepayments approximated $1.1 million and $0.2 million as of December 31, 2020 and 2019, respectively, and were recorded within accrued expenses and other current liabilities and subsequently recognized as revenue upon shipment.

Prior to January 1, 2021, the Company recognized estimated allowance for credit losses based on an assessment of a customer’s ability to pay, credit quality of the customer, age of receivable balances and current economic conditions.

After January 1, 2021, the Company’s expected credit losses are developed using an estimated loss rate method that considers historical collection experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount.

The estimated loss rates are applied to trade receivables with similar risk characteristics such as the length of time the balance has been outstanding, liquidity and financial position of the customer, and the geographic location of the customer.

In certain instances, the Company may identify individual accounts receivable assets that do not share risk characteristics with other accounts receivable, in which case the Company records its expected credit losses on an individual asset basis.

As of December 31, 2021 and 2020, the allowance for credit losses was approximately $ 0.3 million and $ 0.4 million, respectively.

Write-offs of accounts receivable and recoveries were not significant during the years ended December 31, 2021 or 2020.

Inventories consist of raw materials, work in process and finished goods.

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Assets Useful Lives

Buildings 20-35 years

Building improvements 5-15 years

Leasehold improvements 5 - 15 years

Furniture, fixtures, equipment and software 3 - 11 years

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When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in the results of operations.

The Company is considered to be an owner lessee of certain buildings (Notes 5 and 6).

The leased buildings are being depreciated over the lease term to a residual value that will approximate the remaining lease financing obligation at the end of the lease.

Internal-Use Software Costs

The Company capitalizes costs for acquired or developed software for internal use.

Costs related to preliminary project activities and post implementation activities are expensed as incurred.

Once it is probable the project will be completed, and the software will be used to perform the function intended, internal and external costs, if direct and incremental, are capitalized until the application is substantially complete and ready for use.

Capitalized costs are included in property and equipment within furniture, fixtures, equipment, and software.

The Company capitalized approximately $0.9 million and $0.7 million of software development costs in each of the years ended December 31, 2020 and 2019, respectively, and recognized amortization expense of $0.4 million, $0.2 million, and an insignificant amount for the years ended December 31, 2020, 2019, and 2018, respectively.

Property and equipment balances during 2020 included certain leased buildings in which the Company was considered an owner lessee (see Note 5).

The leased buildings were being depreciated over the lease term to a residual value that will approximate the remaining lease financing obligation at the end of the lease and was derecognized on January 1, 2021 upon the Company’s adoption of the new lease accounting standard (see Note 5).

Goodwill represents the excess of consideration transferred over the estimated fair value of assets acquired and liabilities assumed in a business combination.

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In performing each annual impairment assessment and any interim impairment assessment, the Company determines if it should qualitatively assess whether it is more likely than not that the fair value of goodwill is less than its carrying amount (the qualitative impairment test).

If the Company concludes it is more likely than not that the fair value of the reporting unit is less than its carrying amount, or elect not to use the qualitative impairment test, a quantitative impairment test is performed The Company annual or interim quantitative impairment testing is performed by comparing the estimated fair value of the reporting unit to its carrying value.

If it is more likely than not that the fair value of the reporting unit is less than its carrying amount, or if the Company elects not to perform the qualitative impairment test, the Company then performs a quantitative impairment test.

The Company’s annual or interim quantitative impairment testing is performed by comparing the estimated fair value of the reporting unit to its carrying value.

An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the carrying value of goodwill.

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Impairment of Long-Lived and Intangible Assets

The Company periodically reviews long-lived assets, including property and equipment and finite-lived intangible assets, to determine whether current events or circumstances indicate that such carrying amounts may not be recoverable.

The Company periodically reviews long-lived assets, including property and equipment, right-of-use operating lease assets and finite-lived intangible assets, to determine whether current events or circumstances indicate that such carrying amounts may not be recoverable.

If such facts or circumstances are determined to exist, an estimate of the undiscounted future cash flows of these assets is compared to the carrying value the assets to determine whether impairment exists.

If the assets are determined to be impaired, the loss is measured based on the difference between the fair value and carrying value of the assets.

No impairment loss was recognized for long-lived or finite-lived intangible assets during the years ended either December 31, 2020, 2019 or 2018.

Contingent Consideration

Contingent consideration relates to the potential payment for an acquisition that is contingent upon the achievement of the acquired entity meeting certain performance milestones.

Contingent consideration resulting from the acquisition of a business is recorded at fair value on the acquisition date.

Such contingent consideration is re-measured to its estimated fair value at each reporting date with the change in fair value recognized as an operating expense in the Company’s consolidated statement of

Subsequent changes in the fair value of the contingent consideration are classified as an adjustment to cash flows from operating activities in the consolidated statement of cash flows because the change in fair value was is an input in determining net loss.

Cash paid in settlement of contingent consideration liabilities are classified as cash flows from financing activities up to the acquisition date fair value with any excess classified as cash flows from operating activities.

Changes in the fair value of contingent consideration liabilities associated with the acquisition of a business can result from updates to assumptions such as the expected timing or probability of achieving customer related performance targets, specified sales milestones, changes in projected revenue or changes in discount rates.

Significant judgment is used in determining those assumptions as of the acquisition date and for each subsequent reporting period.

Therefore, any changes in the fair value will impact the Company’s results of operations in such reporting period thereby resulting in potential variability in the Company’s operating results until such contingencies are resolved.

In 2017, the Company acquired Glen Research Corporation as an acquisition of a business.

The purchase agreement called for contingent consideration of up to $4.0 million to be paid out upon the achievement of defined 2018 and 2019 revenue targets which were subsequently achieved.

The change in fair value of this contingent consideration during 2019 and 2018, was approximating $0.3 million and $0.9 million, respectively.

The first $2.0 million was paid to former owners of Glen Research Corporation during 2019, and the remaining $2.0 million, was paid to these former owners during 2020.

If we determine that events and circumstances warrant a revision to the remaining period of amortization or depreciation for a specific long-lived asset, its remaining estimated useful life will be revised, and the remaining carrying amount of the long-lived asset will be depreciated or amortized prospectively over the revised remaining estimated useful life.

No impairment loss was recognized for long-lived assets for any period presented.

Debt Issuance Costs

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Deferred costs are recognized as a direct reduction in the carrying amount of the debt instrument on the consolidated balance sheets and are amortized to interest expense over the term of the related debt using the effective interest method.

Foreign Currency

The Company translates the assets and liabilities of its non-U.S.

dollar denominated functional currency subsidiaries into U.S.

dollars using exchange rates in effect at the end of each period.

Revenue and expenses for its foreign subsidiaries are translated using rates that approximate those in effect during the period.

Translation gains and losses are recognized in accumulated other comprehensive income (loss) within stockholders’/member’s equity on the consolidated balance sheets.

Foreign currency transaction gains and losses are included in net income or loss for the period.

Foreign currency losses have not been material for the years ended December 31, 2020, 2019 or 2018.

Accumulated Other Comprehensive Loss

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As of December 31, 2021 and 2020, the carrying value of current assets and liabilities approximates fair value due to the short maturities of these instruments.

The fair values of the Company’s long-term debt approximate carrying value, excluding the

effect of unamortized debt discount, as it is based on borrowing rates currently available to the Company for debt with similar terms and maturities (Level 2 inputs).

During 2017, the Company entered into two interest rate cap agreements to manage a portion of its variable interest rate risk on its then current borrowings.

During 2018, in connection with the Company’s debt refinancing, the Company entered into two additional interest rate cap agreements, bringing its total to four agreements as of December 31, 2019.

The contracts entitled the Company to receive from the counterparty at specified dates the amount, if any, by which a specified market rate exceeds the cap strike interest rate, applied to the contracts notional principal amount of approximately $262.0 million.

No principal payments were exchanged.

The interest rate cap agreements have not been designated as a hedging relationship and were recognized on the consolidated balance sheet at fair value within non-current assets with changes in fair value recognized in the consolidated statements of operations and comprehensive income (loss).

The fair value of the interest rate caps as of December 31, 2019 and 2018 were insignificant and all four interest rate cap agreements matured during 2020.

Leases, Deferred Rent, and Lease Facility Financing Obligation

The Company rents its office space and facilities under non-cancelable operating lease agreements and recognizes the related rent expense on a straight-line basis over the term of the lease.

The Company’s lease agreements contain rent holidays, scheduled rent increases, and renewal options.

Rent holidays and scheduled rent increases are included in the determination of rent expense to be recorded ratably over the lease term.

The Company does not assume renewals in its determination of the lease term unless they are deemed to be reasonably assured at the inception of the lease.

The Company begins recognizing rent expense on the date that it obtains the legal right to use and control the leased space.

Deferred rent consists of the difference between cash payments and the recognition of rent expense on a straight-line basis for the buildings the Company occupies.

In certain arrangements, the Company is involved in the construction of improvements to buildings it is leasing.

To the extent the Company is involved with the structural improvements of the construction project or takes construction risk, the Company is considered to be the owner of the building and related improvements for accounting purposes during the construction period.

The Company records the fair value of the building and related landlord and lessee funded improvements subject to the lease within property and equipment on the consolidated balance sheet.

The Company also records a corresponding construction payable obligation on its consolidated balance sheet representing the amounts financed by the lessor for the building and lessor financed improvements.

Once a construction project is complete, the Company considers the requirements for sale-leaseback accounting treatment.

If the Company concludes the arrangement does not qualify for sale-leaseback accounting treatment, the building and related improvements remain on the Company’s consolidated balance sheet and are subject to depreciation and assessment of impairment.

For such arrangements, at both pre and post the construction period, the Company bifurcates its lease payments into a portion allocated to the building and a portion allocated to the parcel of land on which the building has been built considering their respective fair values.

The land lease portion of the lease payments allocated to the land is treated for accounting purposes as operating lease payments, and therefore is recorded as rent expense in the consolidated statements of operations.

The portion of the lease payments allocated to the building is further bifurcated into a portion allocated to interest expense and a portion allocated to reduce the lease financing obligation.

The interest rate used for the lease financing obligation represents the Company’s estimated incremental borrowing rate at the inception of the lease, adjusted to reduce any built-in loss.

The fair value of the leased property, less its expected residual value, is depreciated over the term of the lease.

At the conclusion of the lease term, the Company will de-recognize both the then carrying values of the asset and lease facility financing obligation with any differences between the book value of the asset and remaining lease facility financing obligation being recognized in operations at that time.

These differences are not expected to be material.

The fair values of the Company’s long-term debt approximate carrying value, excluding the effect of unamortized debt discount, as it is based on borrowing rates currently available to the Company for debt with similar terms and maturities (Level 2 inputs).

Prior to January 1, 2021, the Company rented its office space and facilities under non-cancelable operating lease agreements and recognized related rent expense on a straight-line basis over the term of the lease.

The Company’s lease agreements contained rent holidays, scheduled rent increases, and renewal options.

Rent holidays and scheduled rent increases were included in the determination of rent expense to be recorded ratably over the lease term.

The Company did not assume renewals in its determination of the lease term unless they were deemed to be reasonably assured at the inception of the lease.

The Company began recognizing rent expense on the date that it obtained the legal right to use and control the leased space.

Deferred rent consisted of the difference between cash payments and the recognition of rent expense on a straight-line basis for the buildings the Company occupied.

In certain arrangements, the Company was involved in the construction of improvements to buildings it is leasing.

To the extent the Company was involved with the structural improvements of the construction project or took on construction risk, the Company was considered to be the owner of the building and related improvements for accounting purposes during the construction period.

The Company recorded the fair value of the building and related improvements subject to the lease within property and equipment on the balance sheet.

Once a construction project was complete, the Company considered the requirements for sale-leaseback accounting treatment.

If the Company concluded the arrangement did not qualify for sale-leaseback accounting treatment, the building and related improvements remained on the Company’s balance sheet and were subject to depreciation and assessment of impairment.

Subsequent to January 1, 2021, as a result of the adoption of the new lease accounting standard, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present at the inception of the arrangement and if such a lease is classified as a financing lease or operating lease.

Leases with a term greater than one year are included in other assets, accrued expenses and other current liabilities, and other long-term liabilities on our balance sheet as of December 31, 2021.

The Company has elected not to recognize on the balance sheet leases with terms of one year or less.

Right-of-use (“ROU”) assets represents the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease contract.

Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term.

In determining the net present value of lease payments, the interest rate implicit in lease contracts is typically not readily determinable.

As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

Certain adjustments to the ROU asset may be required for items such as initial direct costs paid or incentives received and impairment charges if we determine the ROU asset is impaired.

The Company considers a lease term to be the noncancelable period that it has the right to use the underlying asset, including any periods where it is reasonably assured the Company will exercise the option to extend the contract.

Periods covered by an option to extend are included in the lease term if the lessor controls the exercise of that option.

The Company recognizes lease expense on a straight-line basis over the expected lease term.

The Company has elected to not separate lease and non-lease components for its leased assets and accounts for all lease and non-lease components of its agreements as a single lease component.

The lease components resulting in a ROU asset have been recorded on the balance sheet and amortized as lease expense on a straight-line basis over the lease term.

Concentration of Credit Risk

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The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash is held.

The Company provides credit, in the normal course of business, to international and domestic distributors and customers, which are geographically dispersed.

The Company provides credit, in the normal course of business, to international and domestic distributors as well as certain customers, which are geographically dispersed.

The Company attempts to limit its credit risk by performing ongoing credit evaluations of its customers and maintaining adequate allowances for potential credit losses.

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Revenue Accounts Receivable, net

Year Ended December 31, December 31, 2020 December 31, 2019

Years Ended December 31, As of December 31,

2021 2020 2019 2021 2020

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23.3 % 14.2 % * 23.6 % 45.1 %

CureVac * * * 12.8 % *

15.3 % * * 46.5 % 12.8 %

Thermo Fisher Scientific Inc.

* * 10.4 % * *

Ultragenyx Pharmaceutical, Inc.

Nacalai USA, Inc.

* * * 11.6 % *

____________________

* Less than 10%

For the year ended December 31, 2021, substantially all of the revenue recorded for BioNTech SE, Pfizer Inc., and CureVac N.V.

was generated by our Nucleic Acid Production segment.

For the year ended December 31, 2020, substantially all of the revenue recorded for BioNTech SE and Pfizer Inc.

were generated by our Nucleic Acid Production segment.

The Company continues to experience significant revenue growth in our Nucleic Acid Production segment driven primarily by sales of CleanCap ® r elated products that represents a significant portion of the Company’s total revenue in fiscal year 2020.

was generated by our Nucleic Acid Production segment.

For the year ended December 31, 2019, 43.2 %, 30.1 %, and 26.7 %, of revenue recorded for Thermo Fisher Scientific Inc.

were generated by our Nucleic Acid Production, Biologics Safety Testing, and Protein Detection segments, respectively.

was generated by our Nucleic Acid Production, Biologics Safety Testing and Protein Detection segments, respectively.

Net Income (Loss) per Class A Common Share/Unit Attributable to Maravai LifeSciences Holdings, Inc.

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The Company reported a net loss attributable to Maravai LifeSciences Holdings, Inc.

for the years ended December 31, 2019 and 2018.

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”).

Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies.

The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

for the year ended December 31, 2019.

Recently Adopted Accounting Pronouncements

In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, Compensation—Stock Compensation (Topic 718):Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”).

ASU 2018-07 simplifies the accounting for share-based payment transactions in which a grantor acquires goods or services to be used or consumed in operations from a nonemployee.

This standard was effective for annual periods beginning after December 15, 2019.

The Company’s adoption of this standard as of January 1, 2020 did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820)—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”) removed the following disclosure requirements:

(1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy;

(2) the policy for timing of transfers between

and (3) the valuation processes for Level 3 fair value measurements.

Additionally, this update added the following disclosure requirements:

(1) the changes in unrealized gains and losses for the period included in other comprehensive income and loss for recurring Level 3 fair value measurements held at the end of the reporting period;

(2) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.

For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements.

The Company’s adoption of this standard as of January 1, 2020 did not have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

It also clarifies and simplifies other aspects of the accounting for income taxes.

This guidance is effective for fiscal years beginning after December 31, 2021, and interim periods within fiscal years beginning after December 15, 2022.

Early adoption is permitted.

The Company early adopted ASU 2019-12 effective January 1, 2020.

ASU 2019-12 removes the exception to the incremental approach for intra-period tax allocation in the event of a loss from continuing operations and income or gain from other items such as other comprehensive income.

The exception previously resulted in allocating a tax benefit to continuing operations and tax expense to other items, even when tax expense may have been zero.

Under the simplification, no tax expense or benefit will be recorded to continuing operations.

The Company has an immaterial minimum state tax liability in California and no franchises tax liability.

These amounts were recorded above-the-line prior to adoption of ASU 2019-12.

ASU 2019-12 requires non-income tax-based state franchise taxes to be recorded above-the-line.

The other provisions within ASU 2019-12 are not applicable to the Company.

The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260) , Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815):

Accounting for Certain Financial Instruments with Down Round Features;

Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception (“ASU 2017-11”).

Part I of this update addresses the complexity of accounting for certain financial instruments with down round features.

Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings.

Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option.

Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification.

This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests.

The amendments in Part II of this update do not have an accounting effect.

The amendments in Part I of this update were effective for fiscal years beginning after December 15, 2019.

The Company’s adoption of Part I of this standard on January 1, 2020 did not have a material impact on the audited consolidated financial statements.

In January 2017, the FASB adopted ASU 2017-04, Intangibles-Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test.

Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.

The implied fair value for a reporting unit is determined in the same manner as the amount of goodwill recognized in a business acquisition of the reporting unit.

Under the amendments in ASU 2017-04, an entity shall recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value;

however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

The updated guidance requires adoption on a prospective basis.

ASU 2017-04 is currently effective for the Company beginning January 1, 2022.

Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017.

The Company early adopted ASU 2017-04 for its 2020 annual impairment test.

The adoption of this ASU did not have a material impact on the audited consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (“Topic 842”), which supersedes the guidance in ASC 840, Leases .

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued, if certain criteria are met.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848) , the FASB issued additional clarification related to reference rate reform, permitting entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, computing variation margin settlements, and calculating price alignment interest in connection with reference rate reform activities under way in global

financial markets.

The standards are effective for all entities upon issuance and we will apply the amendments prospectively through December 31, 2022.

There was no impact to the Company’s consolidated financial statements for the year ended December 31, 2021 as a result of the adoption of these standards.

In February 2016, the FASB issued ASU 2016-02, Leases (“Topic 842”), which supersedes the guidance in Accounting Standards Codification (“ASC”) 840, Leases .

The new standard, as amended by subsequent ASUs on Topic 842 and recent extensions issued by the FASB in response to COVID-19, requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.

This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease.

is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification.

Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today.

The Company plans to adopt this standard using the modified retrospective approach with a cumulative effect adjustment to retained earnings at the beginning of the period of adoption.

The Company will also adopt certain practical expedients provided by Topic 842.

As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, and assuming the Company continues to be considered an Emerging Growth Company, Topic 842 will be effective for the Company on January 1, 2022.

The Company is currently assessing its inventory of leases but has not yet determined the full effects of Topic 842 on its consolidated financial statements but does expect the adoption of Topic 842 will have a material impact on the Company’s consolidated financial statements and related notes to the recognition of right of use (“ROU”) assets and lease liabilities on the Company’s consolidated balance sheets, but it will not have a material impact on the Company’s operations.

The adoption of Topic 842 will also result in enhanced disclosures.

A lessee is also required to record a ROU asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification.

Leases with a term of 12 months or less will be accounted for in a manner similar to the previous guidance for operating leases under ASC 840, Leases .

The Company adopted this standard on January 1, 2021 using the modified retrospective approach and elected the package of practical expedients permitted under transition guidance, which allowed the Company to carry forward its historical assessments of:

1) whether contracts are or contain leases, 2) lease classification and 3) initial direct costs, where applicable.

The Company elected the post-transition practical expedient to not separate lease components from non-lease components for all existing lease classes.

The Company also elected a policy of not recording leases on its balance sheets when the leases have a term of 12 months or less.

Leases with a term greater than one year are included in other assets, accrued expenses and other current liabilities, and other long-term liabilities as of December 31, 2021.

Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term.

In determining the net present value of lease payments, the interest rate implicit in lease contracts is typically not readily determinable.

Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received and impairment charges if we determine the ROU asset is impaired.

Periods covered by an option to extend are included in the lease term if the lessor controls the exercise of that option.

The Company recognizes lease expense on a straight-line basis over the expected lease term.

The impact of the adoption of Topic 842 on the balance sheet as of January 1, 2021 was as follows (in thousands):

Balance as of December 31, 2020 Adjustments due to Adoption of Topic 842 Balance as of January 1, 2021

Prepaid expenses and other current assets $ 11,095 $ ( 1,987 ) $ 9,108

Property and equipment, net 101,305 ( 59,759 ) 41,546

Deferred tax assets 431,699 ( 424 ) 431,275

Other assets 4,158 57,227 61,385

Accrued expenses and other current liabilities 38,546 2,570 41,116

Lease facility financing obligation, less current portion 56,167 ( 56,167 ) —

Other long-term liabilities 2,231 44,200 46,431

Stockholders' equity:

Retained earnings 854 1,670 2,524

Non-controlling interest 66,235 2,784 69,019

The adjustments due to the adoption of Topic 842 primarily related to the recognition of operating lease ROU assets and lease liabilities for the Company’s operating leases.

In addition, the adoption of Topic 842 resulted in a change to certain arrangements where we are involved with the construction of structural improvements or we take construction risk to buildings we are leasing.

Where we are no longer the accounting owner of the construction project as a result of the adoption of Topic 842, such assets and liabilities are derecognized and accounted for in the same manner as other leasing arrangements.

In June 2016, the FASB issued ASU 2016-13 , Financial Instruments-Credit Losses (Topic 326):

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In addition, this standard also modifies the impairment model for available-for-sale debt securities, which are measured at fair value, by eliminating the consideration for the length of time fair value has been less than amortized cost when assessing credit loss for a debt security and provides for reversals of credit losses through income upon credit improvement.

ASU 2016-13, is effective for the Company’s January 1, 2023, with early adoption permitted.

The Company is currently assessing the impact of adopting this standard on its consolidated financial statements and disclosures.

This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted.

As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, ASU 2016-13 was not adopted until the fourth quarter of 2021.

The Company’s adoption of this standard as of January 1, 2021 did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”).

The ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

This new standard also requires customers to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement.

This ASU is effective for years beginning after December 15, 2020, with early adoption permitted.

The Company has not yet determined the potential effects of this ASU on its consolidated financial statements.

This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted.

As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, ASU 2018-15 was not adopted until the fourth quarter of 2021.

The Company’s adoption of this standard as of January 1, 2021 did not have a material impact on the Company’s consolidated financial statements.

In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810):

Targeted Improvements to the Related Party Guidance for Variable Interest Entities .

Targeted Improvements to the Related Party Guidance for Variable Interest Entities (“ASU 2018-17”).

ASU 2018-17 changes how entities evaluate decision-making fees under the variable interest entity guidance.

To determine whether decision-making fees represent a variable interest, an entity considers indirect interests held through related parties under common control on a proportional basis, rather than in their entirety.

This guidance is effective for fiscal years, beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021, with early adoption permitted.

All entities are required to apply the amendments in this ASU retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented.

The Company is currently evaluating the impact this standard will have on its consolidated financial statements and disclosures.

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity’s own equity, and modifies the guidance on diluted earnings per share calculation as a result of these changes.

The standard is effective for the Company for annual reporting periods beginning after December 15, 2023.

The Company is currently evaluating the impact the adoption of this standard may have on its consolidated financial statements.

In March, 2020 the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“Update 2020-04”) , for facilitation of the effects of reference rate reform on financial reporting.

This update provides optional guidance for a limited period of time to help ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting.

The amendments in the guidance provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate form if certain criteria are met.

The amendments apply to contracts, hedging relationships, and other transactions that reference London inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform.

When elected, the optional expedients for contract modifications are applied consistently for all eligible contracts or eligible transactions within the relevant areas of GAAP.

This guidance was effective upon issuance and may generally be applied through December 31, 2022.

We are currently evaluating

our contracts and we do not expect that the adoption of this guidance will have a material impact on our consolidated financial statements and disclosures.

This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted.

As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, ASU 2018-17 was not adopted until the fourth quarter of 2021.

The Company’s adoption of this standard as of January 1, 2021 did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with ASC 606.

ASU 2021-08 is effective for years beginning after December 31, 2022, including interim periods within those fiscal years, with early adoption permitted.

The amendments in this ASU should be applied prospectively to business combinations occurring on or after the effective date of the amendments.

The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) - Disclosures by Business Entities about Government Assistance (“ASU 2021-10).

ASU 2021-10 provides guidance to increase the transparency of government assistance including the disclosure of i) the types of assistance, ii) an entity’s accounting for the assistance, and iii) the effect of the assistance on an entity’s financial statements.

Under the new guidance, an entity is required to provide the following annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy:

i) information about the nature of the transactions and the related accounting policy used to account for the transactions, ii) the line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item and, ii) significant terms and conditions of the transactions, including commitments and contingencies.

This update is effective for us on January 1, 2022, with early adoption permitted.

The amendments should be applied either i) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial

application or ii) retrospectively to those transactions.

The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.

Acquisition and Divestiture

In March 2020, the Company acquired all of the outstanding shares of MockV Solutions, Inc.

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The Earn-Outs were determined to be contingent consideration that was not subject to derivative accounting and will be recognized when the contingency is resolved, and the consideration becomes paid or payable.

As of December 31, 2021 and 2020, no such amounts were deemed to be payable.

As the Company had no tax basis in the acquired IPR&D asset, and the acquired IPR&D asset was expensed prior to the measurement of any deferred taxes, no deferred taxes were recognized for the initial transaction.

In November 2020, MockV was converted into a single member LLC and was deemed liquidated for income tax purposes.

In August 2021, the Company entered into a definitive agreement to sell Vector Laboratories, Inc.

and its subsidiaries (“Vector”) to Voyager Group Holdings, Inc.

(“Voyager”), a third-party unrelated to the Company, for an all cash sale price of $ 124.0 million, subject to purchase price adjustments.

The Company determined that the fair value of Vector, less estimated costs to sell, exceeded the book value of the Vector Disposal Group and there were no other indicators of asset impairment prior to the sale.

The divestiture was completed in September, 2021, and the Company received total considerations of $ 121.9 million, which included $ 120.3 million in cash and $ 1.6 million in receivables to be collected based on the finalization of working capital adjustments.

The sale price is also subject to adjustment based on the finalization of working capital.

As a result of the divestiture, during the year ended December 31, 2021, the Company recognized a pre-tax gain on sale of $ 11.2 million, net of transactions costs of $ 0.9 million, in the consolidated statements of operations.

The Company’s Protein Detection segment was comprised of Vector.

The sale of Vector represents a strategic shift as the Company will no longer be in the protein detection business after the sale.

However, the sale did not qualify for presentation as discontinued operations since the sale of the Protein Detection segment did not have a major effect on the Company’s operations or financial results.

In connection with the divestiture, the Company entered into a Transition Services Agreement (“TSA”) with Voyager to help support its ongoing operations.

Under the TSA, the Company will provide certain transition services to Voyager, including information technology, finance and ERP, marketing and commercial, human resources, employee benefits, and other limited services.

Depending on the service, the initial period ranges from one month to five months and the extension period ranges from one month to eight months .

Income from performing services under the TSA was recorded within other income in the consolidated statements of operations and was not significant for the year ended December 31, 2021.

In August 2020, the Company entered into an agreement with an executive of Vector whereby the executive received incentive units of MLSH 1.

In connection with the divestiture, MLSH 1 amended this executive’s incentive units resulting in the recognition of incremental unit-based compensation expense in the Company’s consolidated financial statements of $ 2.4 million.

This unit-based compensation expense was recorded within selling, general and administrative in the consolidated statements of operations for the year ended December 31, 2021.

Goodwill and Intangible Assets

The Company’s goodwill of $224.3 million as of December 31, 2020 and 2019 respectively, represents the excess of purchase consideration over the fair value of assets acquired and liabilities assumed.

In periods prior to 2020, the Company had three reporting units, Nucleic Acid Production, Biologics Safety Testing, and Protein Detection, with such reporting units being aligned with our segments.

However, during the year ended December 31, 2020, the Company determined that our Nucleic Acid Production segment contained two reporting units that should no longer be combined as a reporting unit due to a lack of economic similarities primarily driven by changes in margins realized by these reporting units.

These reporting units continue to be considered as one segment for purposes of segment reporting, as our CODM continues to review financial results and making operating decisions at the Nucleic Acid Production level.

The Company performed a quantitative goodwill impairment analysis on each of its four reporting units during the fourth quarter of 2020 and concluded that the fair value of each reporting unit exceeded its carrying value and therefore that it was more-likely-than-not that the fair value of goodwill exceeded its carrying value.

During 2019, given the lack of any triggering events being identified indicating that the fair value of the goodwill may be impaired, the Company completed its qualitative goodwill impairment analysis for the nucleic acid production and biologics safety testing reporting units during the fourth quarter of 2019 and concluded it was not more-likely-than-not that the fair value of goodwill exceeded its carrying value and no further testing was required.

Having identified triggering events for the Protein Detection reporting unit, the Company performed a quantitative analysis and also concluding that it was not more-likely-than-not that the fair value of goodwill exceeded its carrying value and no further testing was required.

The qualitative impairment test was elected for these two reporting units because of the growth in revenue and cashflows in excess of our initial projections.

The Company has not recognized any goodwill impairment in any of the periods presented.

The following is a rollforward of the Company’s goodwill by segment (in thousands):

Production Biologics

Testing Protein

Detection Total

December 31, 2020 $ 32,838 $ 119,928 $ 71,509 $ 224,275

December 31, 2019 32,838 119,928 71,509 224,275

During the year ended December 31, 2020, there was no change in the recorded segment goodwill balances.

The Company’s goodwill of $ 152.8 million and $ 224.3 million as of December 31, 2021 and 2020 respectively, represents the excess of purchase consideration over the fair value of assets acquired and liabilities assumed.

As of December 31, 2021, the Company had three reporting units, two of which are contained in the Nucleic Acid Production segment.

As of December 31, 2020, the Company had four reporting units, two of which were contained in the Nucleic Acid Production segment.

The Company performed a qualitative goodwill impairment analysis on each of its three reporting units during the fourth quarter of 2021 and concluded that it was more likely than not that the fair value of goodwill exceeded its carrying value and no further testing was required.

The qualitative impairment test was elected for these three reporting units because of the growth in revenue and cashflows in excess of our initial projections.

The Company has not recognized any goodwill impairment charges in any of the periods presented.

The following table summarizes the activity in the Company’s goodwill by segment for the periods presented (in thousands):

Nucleic Acid Production Biologics Safety Testing Protein Detection Total

Balance as of December 31, 2020 $ 32,838 $ 119,928 $ 71,509 $ 224,275

Divestiture — — ( 71,509 ) ( 71,509 )

Balance as of December 31, 2021 $ 32,838 $ 119,928 $ — $ 152,766

Intangible assets are being amortized on a straight-line basis, which reflects the expected pattern in which the economic benefits of the intangible assets are being obtained, over an estimated useful life ranging from 5 to 14 years.

The components of finite-lived intangible assets and accumulated amortization are as follows:

As of December 31, 2020

The following are components of finite-lived intangible assets and accumulated amortization as of the periods presented:

December 31, 2021

Amount Accumulated

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Total $ 194,721 $ 77,150 $ 117,571 8.1

As of December 31, 2019

December 31, 2020

(in thousands) (in years) (in years)

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Amortization expense for intangible assets that are not directly related to sales generating activities of $ 5.9 million, $ 7.6 million and $ 8.0 million was recorded as selling, general and administrative expenses for each of the years ended December 31, 2021, 2020, and 2019, respectively.

As of December 31, 2020, the estimated future amortization expense for finite-lived intangible assets is as follows (in thousands):

In September 2021, the Company completed its divestiture of the Protein Detection segment (see Note 2).

This resulted in the derecognition of $ 41.7 million in net intangible assets associated with the divested segment.

As of December 31, 2021, the estimated future amortization expense for finite-lived intangible assets were as follows (in thousands):

2022 $ 14,600

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Total estimated amortization expense $ 117,571

Fair Value Measurements

There were no assets or liabilities measured at fair value on a recurring basis as of December 31, 2020 or 2019.

The Company assesses the fair value of contingent consideration to be settled in cash related to acquisitions using probability weighted models for the various contractual earn-outs.

These are Level 3 measurements.

Significant unobservable inputs used in the estimated fair values of these contingent consideration liabilities include probabilities of achieving customer related performance targets, specified sales milestones, changes in projected revenue and risk adjusted discount rates.

The following table provides a reconciliation of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2019 (in thousands):

Consideration

Balance at January 1, 2019 $ 3,678

Change in fair value 322

Settlement (2,000)

Transfer out of Level 3 fair value hierarchy (2,000)

Balance at December 31, 2019 $ —

During the year ended December 31, 2019, upon the achievement of the maximum liability threshold of $4.0 million, as defined in the purchase agreement for Glen Research Corporation, the total contingent purchase consideration was no longer based on significant unobservable inputs and was reclassified out of Level 3 fair value hierarchy to accrued expenses.

Balance Sheet Components

Inventory consists of the following at December 31 (in thousands):

Inventory consisted of the following as of the periods presented (in thousands):

December 31, 2021 December 31, 2020

Raw materials $ 19,726 $ 11,112

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Property and equipment

Property and equipment consists of the following at December 31 (in thousands):

Property and equipment consisted of the following as of the periods presented (in thousands):

December 31, 2021 December 31, 2020

Land $ — $ 818

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Total property and equipment, net $ 46,332 $ 101,305

Depreciation expense totaled approximately $5.6 million, $3.8 million, $2.2 million for the years ended December 31, 2020, 2019, and 2018, respectively, and includes depreciation expense related to the Company’s capital leases.

Depreciation expense totaled approximately $ 6.4 million, $ 5.6 million, and $ 3.8 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Accrued expenses and other current liabilities

Accrued expenses consisted of the following at December 31 (in thousands):

Accrued expenses consisted of the following as of the periods presented (in thousands):

December 31, 2021 December 31, 2020

Employee related $ 18,894 $ 18,448

Lease liabilities, current portion 3,722 —

Professional services 2,897 7,670

Customer deposits 2,429 1,091

Sales and use tax liability 1,296 2,896

Consideration payable — 2,000

Federal tax liability 102 2,290

Other 5,234 6,151

Total accrued expenses and other current liabilities $ 34,574 $ 38,546

Commitments and Contingencies

Lease Commitments

The Company leases five facilities, including office, laboratory and manufacturing space under long-term non-cancelable operating leases.

The leased facilities have initial terms of two to twelve years, and two leases have multiple five-year renewal terms and the other leases having three-year and five-year renewal terms.

The Company also has capital leases for office equipment within initial terms of two to three years expiring in 2023.

Rent expense for each of the years ended December 31, 2020, 2019, and 2018 were approximately $3.2 million, $2.5 million, and $2.0 million, respectively.

For the year ended December 31, 2020, reported rent expense is net of approximately $1.4 million of deferred gain being recognized over the life of the lease associated with the Company’s sale leaseback arrangement for its Burlingame, California facility.

The Company leases facilities, including office, laboratory and manufacturing space under long-term non-cancelable operating leases.

Burlingame, California Facility

In January 2020, the Company completed the sale of land, building and related building improvements specific to its facility in Burlingame, California for approximately $ 34.5 million in cash.

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The Company’s sale of the building and immediate leaseback of the facility qualified for sale-leaseback accounting.

The lease was evaluated and classified as an operating lease.

Upon adoption of ASC 842, the lease was reevaluated and classified as an operating lease.

Given the Company was considered to retain more than a minor part but less than substantially all of the use of the property, the present value of the minimum lease payment over the lease term of $ 3.1 million was required to be deferred and recognized as a reduction of rent expense over the life of the lease.

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In August 2020, the Company executed a six-month extension for the leased property, including escalating rent payments, with total incremental lease payments associated with the extension of $ 1.8 million.

The unamortized deferred gain at the time of the modification, approximating $2.0 million, will be amortized on a prospective basis over the extended lease term.

Upon execution of the amendment inclusive of escalating rent payments, expense is being recognized on a straight-line basis and the difference between the recognized rent expense and the amounts paid under the lease are being recorded as deferred rent included in other short-term and long-term liabilities on the consolidated balance sheet as of December 31, 2020.

In July 2018, the Company entered into a lease for a new manufacturing facility (the “San Diego Facility Lease”).

The unamortized deferred gain at the time of the modification, approximating $ 2.0 million, was amortized on a prospective basis over the extended lease term.

Upon execution of the amendment inclusive of escalating rent payments, expense was being recognized on a straight-line basis and the difference between the recognized rent expense and the amounts paid under the lease was being recorded as deferred rent included in other short-term and long-term liabilities on the consolidated balance sheet as of December 31, 2020.

Upon adoption of ASC 842, the Company reassessed the classification of the lease as of January 1, 2021 and determined it to be classified as an operating lease and the remaining unrecognized deferred gain of $ 1.7 million on adoption date was derecognized from the balance sheet.

The lease was subsequently assumed by Voyager as part of the divestiture of Vector in September 2021 (see Note 2).

Wateridge San Diego Facility

In July 2018, the Company entered into a lease for a new manufacturing facility (the “Wateridge San Diego Facility Lease”).

The lease included tenant improvement provisions for construction prior to occupancy.

Construction on this new manufacturing facility began in 2018 and Company evaluated the extent of its financial and operational involvement in the tenant improvements of the new facility related to the San Diego Facility Lease to determine whether it was considered the owner of the construction project.

The Company concluded that it was deemed to be the owner of the facility for accounting purposes (even though it did not meet the definition for legal purposes) during the construction period which began in 2018 and was completed in 2019.

In 2019, upon completion of the construction, the Company evaluated the lease and concluded that the completed construction project failed to qualify for sale and leaseback accounting and has accounted for the lease as a financing lease transaction.

The leased building and related improvements remain on the Company’s balance sheet as of December 31, 2019 and rental payments associated with the San Diego Facility Lease have been allocated to operating lease expense for the ground underlying the leased building and principal and interest payments on the lease facility financing obligation.

The Company recorded the fair value of the building asset and improvements, which was estimated to be $59.0 million and the related lease facility financing obligation of $51.2 million.

The difference between the gross asset value and the lease facility financing obligation represents the approximate $8.0 million of building improvement costs reimbursed by the Company.

In September 2020, the Company amended its San Diego Facility lease agreement to provide for additional manufacturing and office space.

The amended lease agreement provides for tenant improvements for construction prior to occupancy of $2.7 million, rent concessions, and escalating rent payments over the life of the lease which now expires in May 2023.

The total future minimum lease payments under the amended lease agreement are $57.1 million, with an option to renew subject to certain conditions.

Similar to the original lease, once construction is completed on the expansion, the 2020 amended lease is

being accounted for as an increase to the financing lease transaction with rental payments allocated between principal and interest on the lease facility financing obligation.

As of December 31, 2020, the anticipated tenant improvement allowance has been recorded as a component of the lease facility financing obligation a $2.0 million receivable for lessor-funded financing within prepaid and other current assets, and $0.7 million in construction in progress for costs incurred to date as the Company has earned the right to this portion of the tenant allowance as of December 31, 2020.

Construction on this new manufacturing facility began in 2018 and Company evaluated the extent of its financial and operational involvement in the tenant improvements of the new facility related to the Wateridge San Diego Facility Lease to determine whether it was considered the owner of the construction project.

The Company therefore recorded the fair value of the building asset and improvements, which was estimated to be $ 59.0 million and the related lease facility financing obligation of $ 51.2 million.

The difference between the gross asset value and the lease facility financing obligation represented the approximate $ 8.0 million of building improvement costs reimbursed by the Company.

In September 2020, the Company amended its Wateridge San Diego Facility Lease agreement to provide for additional manufacturing and office space.

The amended lease agreement provides for tenant improvements for construction prior to occupancy of $ 2.7 million, rent concessions, and escalating rent payments over the life of the lease which expires in May 2023.

As of December 31, 2020, the anticipated tenant improvement allowance was recorded as a component of the lease facility financing obligation a $ 2.0 million receivable for lessor-funded financing within prepaid and other current assets, and $ 0.7

million in construction in progress for costs incurred to date as the Company has earned the right to this portion of the tenant allowance.

Additionally, during 2020, the Company incurred incremental building improvement costs for the initially leased space.

As of December 31, 2020, the Company has recognized $20.4 million and $1.7 million in construction in progress and accrued expenses, respectively, within the consolidated balance sheet specific to this facility.

The Company recognizes payments under the lease agreement as a reduction of the lease facility financing obligation using the effective interest method and the ground rent as operating lease expense as reflected in the schedule below.

Payments on the San Diego Facility Lease obligation for the year ended December 31, 2020, 2019, and 2018 were approximately $2.3 million and $0.9 million, $0.9 million, respectively.

For the years ended December 31, 2020, 2019 and 2018 the Company recognized rent expense associated with the ground lease for the San Diego Facility Lease of approximately $0.8 million, $0.8 million, and $0.4 million, respectively, in the consolidated statement of operations.

The Company is also considered to be the accounting owner of its Southport, North Carolina leased facility (the “Southport Facility”)

In 2017, the Company amended its initial lease with the former related party landlord (Note 14) to include the lease of additional space as well as an adjustment of the base rent for the existing space.

The Company continues to recognize payments under the amended lease agreement as a reduction of the facility financing obligation using the effective interest method and the ground rent as operating lease expense as notes in the schedule below.

As a result of the amendment, the Company anticipates the repayment of the financing obligation by September 2024.

The fair value of the leased property established at acquisition continues to be depreciated over the building’s estimated useful life of thirty-five years.

Payments on these lease obligations for the years ended December 31, 2020, 2019 and 2018 were approximately $0.3 million, respectively.

For the years ended December 31, 2020, 2019 and 2018, rent expense associated with the ground lease for the Southport Facility was not significant.

As of December 31, 2020, minimum annual payments under the Company’s non-cancelable lease agreements, capital lease agreements, and lease financing obligations were follows (in thousands):

As of December 31, 2020, the Company had recognized $ 20.4 million and $ 1.7 million in construction in progress and accrued expenses, respectively, within the consolidated balance sheet specific to this facility.

Upon adoption of Topic 842, the Company assessed the above Wateridge San Diego Facility Lease and determined that the Company was not the accounting owner of the construction projects and they would further be classified as operating leases.

Given the Company had previously recognized the building and financing lease obligation for the Wateridge San Diego Facility Lease as a result of the transactions build-to-suit designation under legacy GAAP, the Company derecognized the $ 59.0 million leased building and $ 55.1 million lease financing obligation from the balance sheet on January 1, 2021.

The unamortized cost incurred by the Company for lessor-owned tenant improvements of $ 8.0 million was recognized as a component of ROU Assets on January 1, 2021.

Southport Facility

The Company was also considered to be the accounting owner of its Southport, North Carolina leased facility (the “Southport Facility'') under legacy GAAP.

Upon adoption of Topic 842, the Company analyzed the Southport Facility lease under the new guidance and determined that the lease would be classified as an operating lease.

As the Company has previously recognized the building and financing lease obligation for the Southport Facility as a result of the transactions build-to-suit designation under legacy GAAP, the Company derecognized the $ 3.0 million leased building and $ 1.8 million lease financing obligation from the balance sheet on January 1, 2021.

All of the Company's office space and manufacturing facilities are occupied under operating lease arrangements with various expiration dates through 2030, some of which include options to extend the term of the lease.

The Company's leases have remaining lease terms of one year year to approximately 10 years, some of which may include options to extend the leases for up to 10 years.

The Company does not have any leases that include residual value guarantees.

The Company did not have any finance leases as of December 31, 2021.

The following table presents supplemental balance sheet information related to the Company's operating leases as of the period presented below (in thousands).

Line Item in the Consolidated Balance Sheet December 31, 2021

Right-of-use assets Other assets $ 49,095

Lease liabilities, current portion Accrued expenses and other current liabilities 3,722

Non-current lease liabilities Other long-term liabilities 40,906

The components of the net lease costs reflected in the Company's consolidated statement of operations were as follows for the period presented (in thousands):

Year Ended December 31, 2021

Operating lease costs $ 8,792

Variable lease costs 1,759

Total lease costs $ 10,551

The weighted average remaining lease term and weighted average discount rate related to the Company's ROU assets and lease liabilities for its operating leases were as follows as of December 31, 2021:

Weighted average remaining lease term (in years) 8.2

Weighted average discount rate 5.1 %

Supplemental information concerning the cash flow impact arising from the Company's leases recorded in the Company's consolidated statement of cash flows is detailed in the following table for the period presented (in thousands):

Year Ended December 31, 2021

Cash paid for amounts included in lease liabilities:

Operating cash flows used for operating leases $ 6,335

As of December 31, 2021, the Company expects that its future minimum lease payments will become due and payable as follows (in thousands):

Operating Leases

Thereafter 23,342

Total minimum lease payments $ 55,260

interest ( 10,632 )

Total lease liabilities $ 44,628

Lease Agreements Not Yet Commenced as of December 31, 2021

Leland Facility

In June 2021, the Company entered into a 10 year lease for a new manufacturing facility (the “Leland Facility”) with the option to extend the lease term for four 5-year periods.

The lease includes tenant improvement provisions for construction prior to occupancy of $ 3.6 million, a free rent period, and escalating rent payments over the life of the lease, which expires in 2032.

The total future minimum lease payments under the lease agreement are $ 12.7 million, with an option to extend subject to certain conditions.

Construction on this new manufacturing facility began in November 2021.

As of December 31, 2021, the Company did not have access to the space, concluded that the leasehold improvements were lessor owned, and determined that the lease has not yet commenced for accounting purposes.

Flanders San Diego Facility

In August 2021, the Company entered into an eleven year operating lease for a new manufacturing facility (the “Flanders San Diego Facility”) consisting of two buildings.

The lease included tenant improvement provisions for construction prior to occupancy.

The lease includes tenant improvement provisions for construction prior to occupancy of up to $ 11.5 million, rent abatement clauses, and escalating rent payments over the life of the lease, which expires in 2032.

The total future minimum lease payments under the lease agreement are $ 37.2 million, with optional term extensions subject to certain requirements.

Construction on the first and second building began in November 2021.

The Company concluded that it was not deemed to be the accounting owner of either buildings for accounting purposes during the construction period.

Prior to January 1, 2021, the Company accounted for leases under ASC 840.

Rent expense for each of the years ended December 31, 2020 and 2019 were approximately $ 3.2 million and $ 2.5 million, respectively.

As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and under the previous lease accounting standard, minimum annual payments under the Company’s non-cancelable lease agreements, capital lease agreements, and lease financing obligations were as follows (in thousands):

Capital Leases Lease Facility Financing Obligations Operating Leases

2021 $ 50 $ 4,126 $ 2,777

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2025 — 5,071 1,104

2025 and beyond — 24,232 5,286

Thereafter — 24,232 5,286

Total minimum payments 75 48,200 $ 14,936

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Present value of future minimum lease payments 59 20,370

Residual value of lease facility financing obligation — 36,547

short-term capital lease and lease facility financing obligations (36) (750)

Long-term capital lease and lease facility financing obligations $ 23 $ 56,167

Operating leases in the table above includes future minimum lease payments for the ground lease for the Southport and San Diego Facilities and Vector sale-leaseback.

Future minimum lease payments for the Vector sale-leaseback for fiscal years 2021 and 2022 are $1.6 million and $1.8 million, respectively.

Residual value of lease facility financing obligations — 36,547

short-term lease facility financing obligations ( 36 ) ( 750 )

Long-term lease facility financing obligations $ 23 $ 56,167

Operating leases in the table above includes future minimum lease payments for the ground lease for the Southport Facility, Wateridge San Diego Facility, and Burlingame, California Facility.

Commitments and Contingencies

Legal Proceedings

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The Company accrues for a loss contingency when it determines that it is probable, after consultation with counsel, that a liability has been incurred and the amount of such loss can be reasonably estimated.

The Company believes that the results of any such contingencies, either

individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

The Company believes that the results of any such contingencies, either individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

Indemnification Agreements

In the ordinary course of business, we may provide indemnification of varying scope and terms to vendors, lessors, customers and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties.

These indemnities include indemnities to our directors and officers to the maximum extent permitted under applicable state laws.

We have also agreed to our directors and officers to the maximum extent permitted under applicable state laws pursuant to standard director and officer indemnification agreements and our corporate charter and bylaws.

The maximum potential amount of future payments that we could be required to make under these indemnification agreements is, in many cases, unlimited.

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2020 Credit Agreements

In October 2020, Maravai Intermediate Holdings, LLC (“Intermediate”), a wholly-owned subsidiary of Topco LLC, along with its subsidiaries (the “New Borrowers”), entered into a credit agreement (the “New Credit Agreement”) to refinance existing $400.0 million long-term debt with a new $780.0 million facility.

The New Credit Agreement provides for a First Lien Term Loan (the “New First Lien Term Loan”) of $600.0 million, maturing October 2027, and a Revolving Credit Facility (the New Revolving Credit Facility”) for up to $180.0 million in funding.

The New Credit Agreement amended and restated the Company’s prior credit agreement as of August 2018 (the “First and Second Lien Credit Agreements”).

In November 2020, the Company repaid $50.0 million of principal balance of the New First Lien Term Loan using proceeds from the IPO.

Borrowings under the New Credit Agreement bear interest (a) initially, at our option, either (i) at the Base Rate plus 3.25% per annum or (ii) the Adjusted Eurocurrency Rate plus 4.25% per annum and (b) after delivery of the compliance certificate for the fiscal quarter ending March 31, 2021, at our option, either at (i) the Base Rate plus the applicable margin of 3.25% per annum with a stepdown to 3.00% based on Intermediate’s first lien net leverage ratio or (ii) the Adjusted Eurocurrency Rate plus the margin of 4.25% per annum with a stepdown to 4.00% based on Intermediate’s first lien net leverage ratio.

In October 2020, Maravai Intermediate Holdings, LLC (“Intermediate”), a wholly-owned subsidiary of Topco LLC, along with its subsidiaries (the “New Borrowers”), entered into a credit agreement (the “Credit Agreement”) to refinance existing $ 400.0 million long-term debt with a new $ 780.0 million facility.

The Credit Agreement provides for a First Lien Term Loan (the “Term Loan”) of $ 600.0 million, maturing October 2027, and a Revolving Credit Facility (the “Revolving Credit Facility”) for up to $ 180.0 million in funding.

The Credit Agreement amended and restated the Company’s prior credit agreement as of August 2018 (the “First and Second Lien Credit Agreements”).

In November 2020, the Company repaid $ 50.0 million of principal balance of the First Lien Term Loan using proceeds from the IPO.

Borrowings under the Credit Agreement bear interest (a) initially, at our option, either (i) at the Base Rate plus 3.25 % per annum or (ii) the Adjusted Eurocurrency Rate plus 4.25 % per annum and (b) after delivery of the compliance certificate for the fiscal quarter ended March 31, 2021, at our option, either at (i) the Base Rate plus the applicable margin of 3.25 % per annum with a stepdown to 3.00 % based on Intermediate’s first lien net leverage ratio or (ii) the Adjusted Eurocurrency Rate plus the margin of 4.25 % per annum with a stepdown to 4.00 % based on Intermediate’s first lien net leverage ratio.

Interest rates will also decrease an additional 0.25 % in any period if the Company’s credit ratings issued by Moody’s and S&P are B2 or better and B or better, respectively.

The Base Rate is defined as the greatest of (i) the rate last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (ii) the Federal Reserve Bank of New York Rate (“NYFRB”) plus 0.50 % per annum, (iii) the Adjusted Eurocurrency Rate for a one month interest period plus 1.00 % per annum, (iv) solely with respect to the initial term loans, 2.00 % per annum and (v) for any loans that are not initial term loans, 1.00 % per annum.

The “Adjusted Eurocurrency Rate” is defined as the greater of (a) with respect to the initial term loans the greater of (i) the Eurocurrency Rate for such interest period multiplied by the Statutory Reserve Rate (as such term is defined in the New Credit Agreement), and (ii) 1.00% and (b) with respect to the revolving loans, the greater of (i) the Eurocurrency Rate for such interest period multiplied by the Statutory Reserve Rate (as such term is defined in the New Credit Agreement), and (ii) 0%.

The “Eurocurrency Rate” is defined as the London Inter-bank Offered Rate (“LIBOR”) as displayed by Reuters (which if negative will be deemed to be 0%) or, if LIBOR is unavailable, a rate based on historical LIBOR, as determined by the administrative agent under the New Credit Agreement.

The New Term Loan contains prepayment provisions that allow for, at the Company’s option, to prepay all or a portion of the principal amount at any time.

Subject to certain exceptions and limitations and reinvestment rights, the Company is required to repay borrowings under the New Term Loan and New Revolving Credit Facility with the proceeds of certain occurrences, such as the incurrence of debt and certain asset sales or dispositions.

The New Credit Agreement also requires mandatory prepayments to be calculated commencing with the fiscal year ending December 31, 2021 upon certain excess cash flow as defined in the terms of the agreement.

The New Term Loan becomes repayable in quarterly payments of $1.5 million beginning on March 31, 2021, with all remaining outstanding principal due at maturity in October 2027.

All outstanding amounts drawn under the New Revolving Credit Facility will become due at maturity in October 2025.

Accrued interest under the New Credit Agreement is generally payable quarterly in arrears on the date of any repayment or prepayment and at maturity.

In addition to paying interest on outstanding principal under the New Credit Agreement we are required to pay a commitment fee to the lenders under the New Revolving Credit Facility for any unutilized commitments at 0.375% per annum, with one stepdown to 0.25% per annum based on Intermediate’s first lien net leverage ratio calculation.

As of December 31, 2020, the interest rate on the New Term Loan was 5.25% per annum.

The New Credit Agreement also provides for a $20.0 million dollar letters of credit limit, which remained unused as of December 31, 2020.

Borrowings under the New Credit Agreement are unconditionally guaranteed by Topco LLC, together with the existing and future material domestic subsidiaries of Topco LLC (subject to certain exceptions), as specified in the respective guaranty agreements.

Borrowings under the New Credit Agreement are also secured by a first-priority lien and security interest in substantially all of the assets (subject to certain exceptions) of existing and future material domestic subsidiaries of Topco LLC that are loan parties.

The accounting related to entering into the New Credit Agreement and using the proceeds to pay off the First and Second Lien Credit Agreements were evaluated on a creditor-by-creditor basis to determine whether each transaction should be accounted for as a modification or extinguishment.

The “Adjusted Eurocurrency Rate” is defined as the greater of (a) with respect to the initial term loans the greater of (i) the Eurocurrency Rate for such interest period multiplied by the Statutory Reserve Rate (as such term is defined in the Credit Agreement), and (ii) 1.00 % and (b) with respect to the revolving loans, the greater of (i) the Eurocurrency Rate for such interest period multiplied by the Statutory Reserve Rate (as such term is defined in the Credit Agreement), and (ii) 0 %.

The “Eurocurrency Rate” is defined as the London Inter-bank Offered Rate (“LIBOR”) as displayed by Reuters (which if negative will be deemed to be 0 %) or, if LIBOR is unavailable, a rate based on historical LIBOR, as determined by the administrative agent under the Credit Agreement.

The Term Loan contains prepayment provisions that allow for, at the Company’s option, to prepay all or a portion of the principal amount at any time.

Subject to certain exceptions and limitations and reinvestment rights, the Company is required to repay borrowings under the Term Loan and Revolving Credit Facility with the proceeds of certain occurrences, such as the incurrence of debt and certain asset sales or dispositions.

Commending with the fiscal year ended December 31, 2021, and each fiscal year thereafter, the Credit Agreement requires mandatory prepayments on the Term Loan principal upon certain excess cash flow, subject to certain step-downs based on the Company’s first lien net leverage ratio.

The excess cash flow shall be reduced to 25 % or 0 % if the first lien net leverage ratio was equal to or less than 4.75 :1.00 or 4.25 :1.00, respectively, however, no prepayment shall be required to the extent excess cash flow calculated for such period is equal to or less than $ 10.0 million.

As of December 31, 2021, our first lien net leverage ratio was less than 4.25 :1.00 thus the prepayment provision was not triggered.

The Term Loan is repayable in quarterly payments of $ 1.5 million which began on on March 31, 2021, with all remaining outstanding principal due at maturity in October 2027.

All outstanding amounts drawn under the Revolving Credit Facility will become due at maturity in October 2025.

Accrued interest under the Credit Agreement is generally payable quarterly in arrears on the date of any repayment or prepayment and at maturity.

In addition to paying interest on outstanding principal under the Credit Agreement we are required to pay a commitment fee to the lenders under the Revolving Credit Facility for any unutilized commitments at 0.375 % per annum, with one stepdown to 0.25 % per annum based on Intermediate’s first lien net leverage ratio calculation.

As of December 31, 2021, the interest rate on the Term Loan was 4.75 % per annum.

The Credit Agreement also provides for a $ 20.0 million limit for letters of credit, which remained unused as of December 31, 2021.

Borrowings under the Credit Agreement are unconditionally guaranteed by Topco LLC, together with the existing and future material domestic subsidiaries of Topco LLC (subject to certain exceptions), as specified in the respective guaranty agreements.

Borrowings under the Credit Agreement are also secured by a first-priority lien and security interest in substantially all of the assets (subject to certain exceptions) of existing and future material domestic subsidiaries of Topco LLC that are loan parties.

The accounting related to entering into the Credit Agreement and using the proceeds to pay off the First and Second Lien Credit Agreements were evaluated on a creditor-by-creditor basis to determine whether each transaction should be accounted for as a modification or extinguishment.

Certain creditors under the First and Second Lien Credit Agreements did not participate in this refinancing transaction and ceased being creditors of the Company and the repayment of their related outstanding debt balances has been accounted for as an extinguishment of debt.

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As part of the refinancing, the Company incurred $ 15.8 million of various costs, of which $ 6.0 million related to an original issuance discount, and were all capitalized in the accompanying balance sheet within long-term debt, and are subject to amortization over the term of the refinanced debt as an adjustment to interest expense using the effective interest method.

We also incurred $3.5 million of financing-related fees related to the New Revolving Credit Facility.

As of December 31, 2020, $3.4 million of such unamortized debt issuance costs are recorded as an asset within Other Assets our consolidated balance sheet as the there is no balance outstanding related to the New Revolving Credit Facility.

The New Credit Agreement contains certain covenants, including, among other things, covenants limiting our ability to incur or prepay existing certain indebtedness, pay dividends or distributions, dispose of assets, engage in mergers and consolidations, make acquisitions or other investments and make changes in the nature of the business.

We also incurred $ 3.5 million of financing-related fees related to the Revolving Credit Facility.

As of December 31, 2021 and 2020, $ 2.7 million and $ 3.4 million, respectively, of such unamortized debt issuance costs are recorded as assets within other assets on our consolidated balance sheets as there is no balance outstanding related to the Revolving Credit Facility.

In conjunction with the Company’s divestiture of the Protein Detection segment, the Company transferred, per the existing terms of the Credit Agreement, the portion of the Term Loan held by Vector of $ 118.4 million to Intermediate in its entirety.

This amount was not assumed by Voyager as part of the divestiture.

Total outstanding debt and loan covenant requirements remained unchanged as a result of the divestiture.

The Credit Agreement contains certain covenants, including, among other things, covenants limiting our ability to incur or prepay existing certain indebtedness, pay dividends or distributions, dispose of assets, engage in mergers and consolidations, make acquisitions or other investments and make changes in the nature of the business.

Additionally, the Credit Facility also requires us to maintain a certain net leverage ratio.

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Borrowings under the First Lien Credit Agreement and the Second Lien Credit Agreement were unconditionally guaranteed by Topco LLC and the existing and future material domestic subsidiaries of Topco LLC (subject to certain exceptions as specified in the respective guaranty agreements, and are secured by a lien and security interest in substantially all of the assets of existing and future material domestic subsidiaries of Topco LLC that are loan parties).

The refinancing of the previous debt was accounted for as a modification and also as an extinguishment of the related outstanding debt balances and resulted in a $5.6 million loss on extinguishment of debt in the accompanying consolidated statement of operations for the year ended December 31, 2018 and $1.7 million was related to the modified debt and immediately expensed to interest in the accompanying consolidated statement of operations for the year ended December 31, 2018.

The refinancing of the previous debt was accounted for as a modification and also as an extinguishment of the related outstanding debt balances.

Borrowings under the First Lien Credit Agreement bore interest at variable rates as defined in the respective agreements that could be elected at our option.

At December 31, 2019, the interest rates on the First Lien Term Loan and Second Lien Term Loan were 6.063% and 9.740%, respectively.

Accrued interest under the First Lien Credit Agreement was generally payable quarterly in arrears on the date of any repayment or prepayment and at maturity.

An annual commitment fee was applied to the daily unutilized amount under the Revolving Credit Facility at 0.50 % per annum, with one stepdown to 0.375 % per annum based on Intermediate’s first lien net leverage ratio calculation.

Long-term debt consisted of the following at December 31 (in thousands):

New First Lien Term Loan $ 550,000 $ —

Interest Rate Cap

In the first fiscal quarter of 2021, the Company entered into a new interest rate cap agreement to manage a portion of its variable interest rate risk on its outstanding long-term debt.

The contract, effective March 31, 2021, entitles the Company to receive from the counterparty at each calendar quarter end the amount, if any, by which a specified defined floating market rate exceeds the cap strike interest rate, applied to the contract’s notional amount of $ 415.0 million The floating rate of interest is reset at the end of each three month period.

The contract expires on March 31, 2023.

The interest rate cap agreement has not been designated as a hedging relationship and its fair value was insignificant for all periods presented.

The Company’s long-term debt consisted of the following as of the periods presented (in thousands):

December 31, 2021 December 31, 2020

First Lien Term Loan $ 544,000 $ 550,000

Second Lien Term Loan — 100,000

Unamortized debt issuance costs ( 13,409 ) ( 15,386 )

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Total long-term debt, less current portion $ 524,591 $ 528,614

There were no balances outstanding on the Company’s New Revolving Credit Facility as of December 31, 2020.

There were no balances outstanding on the Company’s Revolving Credit Facility as of December 31, 2021.

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Thereafter 514,000

Total debt $ 550,000

Total long-term debt $ 544,000

Stockholders’ / Member’s Equity

Prior to the Organizational Transactions, Topco LLC had established a single class of common units with MLSH 1 as its sole member.

Initial Public Offering

In November 2020, the Company completed its IPO and sold 69,000,000 shares of Class A common stock at a public offering price of $ 27.00 per share, inclusive of the 9,000,000 shares of Class A common stock purchased by underwriters pursuant to the underwriters’ option to purchase additional shares at the initial public offering price, less underwriting discounts and commissions.

The Company received net proceeds from the IPO of approximately $ 1.8 billion after deducting underwriting discounts and commissions, which was used to purchase 55,823,011 of previously-issued and 3,703,704 of newly-issued Topco LLC Units for approximately $ 94.5 million.

Immediately prior to, and in connection with, the completion of our IPO, the Company completed a series of organizational transactions (“Organizational Transactions”), including:

• Amend and restate the Company’s certificate of incorporation to among other things, authorize the Company to issue two classes of common stock:

Class A common stock and Class B common stock.

• The acquisition, by merger, of two members of Topco LLC (“the Blocker Entities”), for which we issued 28,965,664 shares of Class A common stock and paid cash of $ 208.1 million as consideration (“the Blocker Mergers”).Prior to the Organizational Transactions, Topco LLC had established a single class of common units with MLSH 1 as its sole member.

Topco LLC was authorized to issue up to 253,916,941 common units.

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Topco LLC’s common units have no conversion rights, special preferences or redemption rights.

No capital contributions were received by Topco LLC from MLSH 1 in 2019 or 2018.

No capital contributions were received by Topco LLC from MLSH 1 in 2019.

Prior to the Organizational Transactions, a distribution was made by Topco LLC to MLSH 1 in the amount of $ 88.6 million, with a subsequent distribution of $ 8.2 million in December 2020, totaling $ 96.7 million of distributions for the year ended December 31, 2020.

A distribution of $52.1 million was made by Topco LLC to MLSH 1 for the year ended December 31, 2018.

There were no distributions made to MLSH 1 during the year ended December 31, 2019.

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Except as otherwise required in the Certificate of Incorporation or by applicable law, the holders of Class A common stock and Class B common stock shall vote together as a single class on all matters on which stockholders are generally entitled to vote.

Holders of the Class A common stock are entitled to receive dividends, and upon the Company’s dissolution or liquidation, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of shares of Class A and common stock will be entitled to receive the Company’s pro rata remaining assets available for distribution.

Holders of the Class A common stock are

entitled to receive dividends, and upon the Company’s dissolution or liquidation, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of shares of Class A common stock will be entitled to receive the Company’s pro rata remaining assets available for distribution.

Holders of Maravai’s Class B common stock are not entitled to receive dividends and will not be entitled to receive any distributions upon dissolution or liquidation of Maravai.

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We are required to, at all times, maintain (i) a one-to-one ratio between the number of shares of Class A common stock outstanding and the number of LLC Units owned by us and (ii) a one-to-one ratio between the number of shares of Class B common stock owned by the MLSH 1 and the number of LLC Units owned by the MLSH 1.

We may issue shares of Class B

common stock only to the extent necessary to maintain these ratios.

Shares of Class B common stock are transferable only together with an equal number of LLC Units if we, at the election of a MLSH 1, exchange LLC Units for shares of Class A common stock.

We may issue shares of Class B common stock only to the extent necessary to maintain these ratios.

Shares of Class B common stock are transferable only together with an equal number of LLC Units if we, at the election of MLSH 1, exchange LLC Units for shares of Class A common stock.

All Class B common stock that is transferred shall be automatically retired and cancelled and shall no longer be outstanding.

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Blocker Mergers

As described in Note 1, pursuant to the Blocker Mergers, we acquired the Blocker Entities (together with 37,119,801 LLC Units held by the Blocker Entities), by merger, from MLSH 2.

Pursuant to the Blocker Mergers, we acquired the Blocker Entities (together with 37,119,801 LLC Units held by the Blocker Entities), by merger, from MLSH 2.

We issued an aggregate of 28,965,664 shares of Class A common stock and paid $ 208.1 million in cash to MLSH 2 in consideration of the Blocker Mergers.

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Repurchase of Class A Common Stock From MLSH 2

In November 2020, we repurchased 1,319,148 shares of Class A common stock from MLSH 2 for $33.7 million.

In November 2020, we repurchased 1,319,148 shares of Class A common stock from MLSH 2, a related party, for $ 33.7 million.

These shares were immediately retired.

Initial Public Offering

In November 2020, the Company completed an initial public offering of 69,000,000 shares of common stock, inclusive of the 9,000,000 shares of Class A common stock purchased by underwriters pursuant to the underwriters’ option to purchase additional shares at the initial public offering price, less underwriting discounts and commissions.

The Company received net proceeds from the IPO of approximately $1.8 billion after deducting underwriting discounts and commissions, which was used to purchase 55,823,011 of previously-issued and 3,703,704 of newly-issued Topco LLC Units for approximately $94.5 million.

Exchanges and Secondary Offerings

April 2021 Exchange and Secondary Offering

In April 2021, MLSH 1 executed an exchange of 17,665,959 LLC Units (paired with the corresponding shares of Class B common stock) in return for 17,665,959 shares of the Company’s Class A common stock.

The corresponding shares of Class B common stock were subsequently cancelled and retired.

The Company immediately completed a secondary offering (“April 2021 Secondary Offering”) of 20,700,000 shares of its Class A common stock by MLSH 1 and MLSH 2, which included 3,034,041 shares of Class A common stock previously held by MLSH 2, which included the full exercise of the underwriters’ option to purchase up to 2,700,000 additional shares of Class A common stock, at a price of $ 31.25 per share.

The selling stockholders were responsible for the underwriting discounts and commissions of the April 2021 Secondary Offering and received all of the net proceeds of $ 624.2 million from the sale of shares of Class A common stock.

The Company was responsible for the offering costs associated with the April 2021 Secondary Offering of $ 1.0 million which were recorded within selling, general and administrative in the consolidated statements of operations.

September 2021 Exchange and Secondary Offering

In September 2021, MLSH 1 executed an exchange of 17,068,559 LLC Units (paired with the corresponding shares of Class B common stock) in return for 17,068,559 shares of the Company’s Class A common stock.

The corresponding shares of Class B common stock were subsequently cancelled and retired.

Shortly after the exchange, the Company completed a secondary offering (“September 2021 Secondary Offering”) of 20,000,000 shares of its Class A common stock by MLSH 1 and MLSH 2, which included 2,931,441 shares of Class A common stock previously held by MLSH 2 at a price of $ 50.00 per share.

The selling stockholders were responsible for the underwriting discounts and commissions of the September 2021 Secondary Offering and received all of the net proceeds of $ 977.5 million from the sale of shares of Class A common stock.

was responsible for the offering costs associated with the September 2021 Secondary Offering of $ 0.9 million which were recorded within selling, general and administrative in the consolidated statements of operations.

Cash Contribution, Exchange, and Forfeiture Agreement

In December 2021, the Company entered into a Cash Contribution, Exchange and Forfeiture Agreement (the “Contribution Agreement”) with Topco LLC and MLSH 1, a related party.

Pursuant to the Contribution Agreement, the Company contributed $ 110.0 million of cash to Topco LLC in exchange for 2,732,919 newly-issued units LLC Units of Topco LLC at a price per unit of $ 40.25 , which was equal to the 50-day volume-weighted average price of the Company’s Class A common stock as calculated on December 31, 2021.

Immediately following the contribution, the Company and MLSH 1 agreed to forfeit 2.036 % of their respective LLC Units of Topco LLC and an equal number of shares of the Company’s Class B common stock, par value $ 0.01 per share, for no consideration.

The purpose of the Contribution Agreement was to reduce the excess cash that had accumulated at the Company as a result of quarterly tax distributions it has received from Topco LLC since its IPO.

Net Income (Loss) Per Class A Common Share/Unit Attributable to Maravai LifeSciences Holdings, Inc.

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Additionally, basic net income per Class A common stock for the year ended December 31, 2020, has been calculated by dividing net income for the period, adjusted for preferred unit dividends attributable to MLSC non-controlling interests and net income (loss) attributable to non-controlling interests, by the weighted average Class A common stock outstanding during the period.

Basic net income per Class A common stock for the year ended December 31, 2021, has been calculated by dividing net income for the period, adjusted for net income attributable to non-controlling interests, by the weighted average Class A common stock outstanding during the period.

Diluted net income (loss) per Class A common share/unit gives effect to potentially dilutive securities by application of the treasury stock method or if-converted method, as applicable.

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In September 2020, the Company entered into a Sale and Rollover Agreement and repurchased a majority of the outstanding MLSC Class B preferred units as well as entering into an agreement that resulted in an exchange of the remaining MLSC Class B preferred units and MLSC common units into 69,599 of MLSH 1 common units in November 2020 upon the IPO.

in the preferred unit dividends attributable to non-controlling interests line item for the year ended December 31, 2020, is a $10.2 million deemed dividend representing the excess of the fair value of the Class B preferred units, determined as of the date of the Sale and Rollover Agreement, over their related carrying value.

Included in the preferred unit dividends attributable to non-controlling interests line item for the year ended December 31, 2020, is a $ 10.2 million deemed dividend representing the excess of the fair value of the Class B preferred units, determined as of the date of the Sale and Rollover Agreement, over their related carrying value.

In September 2020, the Company also agreed and subsequently repurchased all MLSC Incentive Units, however, such incentive units remained outstanding until October 2020, and had the potential to be dilutive to earnings per unit until they were repurchased.

Prior to the Organizational Transactions and IPO, basic net loss per common unit attributable to our member for the years ended December 31, 2019 and 2018 is based on the weighted average number of common units outstanding during the period.

Prior to the Organizational Transactions and IPO, basic net loss per common unit attributable to our member for the year ended December 31, 2019 is based on the weighted average number of common units outstanding during the period.

Diluted net loss per common unit is computed by adjusting the net loss and the weighted-average number of common units outstanding to give effect to potentially dilutive securities.

The following table presents the computation of basic and diluted net income per common share/unit attributable to the Company for the periods presented (in thousands, except per share and per unit amounts):

Year Ended December 31,

2021 2020 2019

(in thousands, except share and unit amounts and per share and per unit amounts)

Net income (loss) per Class A common share/unit:

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preferred unit dividends attributable to the MLSC non-controlling interests — ( 15,270 ) ( 5,681 )

loss attributable to common non-controlling interests 13,342 2,396 4,444

(income) loss attributable to common non-controlling interests ( 287,213 ) 13,342 2,396

Net income (loss) attributable to Maravai LifeSciences Holdings, Inc.—basic $ 182,037 $ 76,888 $ ( 8,486 )

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Net income (loss) effect of dilutive securities:

Effect of dilutive employee stock purchase plan, RSUs and options $ 132 $ — $ —

Effect of the assumed conversion of Class B common stock 220,187 ( 8,802 ) —

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Weighted average Class A common shares/units outstanding—basic (1)

114,791 10,351 253,917

Net income (loss) per Class A common share/unit—basic $ 1.59 $ 7.43 $ ( 0.03 )

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Weighted average effect of dilutive securities:

Effect of dilutive restricted stock units 457 — —

Effect of dilutive employee stock purchase plan, RSUs and options 153 1 —

Effect of the assumed conversion of Class B common stock 142,859 18,556 —

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____________________

(1) Amounts for the year ended December 31, 2020 represent shares of Class A common stock outstanding.

Amounts for the years ended December 31, 2019 and 2018 represent Topco LLC units outstanding.

(1) Amounts for the years ended December 31, 2021 and 2020 represent shares of Class A common stock outstanding.

Amounts for the year ended December 31, 2019 represent Topco LLC units outstanding.

Shares of Class B common stock do not share in the earnings or losses of the Company, and are therefore not participating securities.

As such, a separate presentation of basic and diluted net income (loss) per share for Class B common stock under the two-class method has not been presented.

The following table presents potentially dilutive securities excluded from the computation of diluted net income (loss) per share/unit for the periods presented because their effect would have been anti-dilutive for the years ended December 31:

Year Ended December 31,

2021 2020 2019

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Stock-Based Compensation

In November 2020, in connection with the IPO, the Company’s board of directors adopted the 2020 Omnibus Incentive Plan (the “2020 Plan”).

The 2020 Plan provided that the initial aggregate number of shares of Class A common stock reserved and available for issuance was 25,762,064 shares of Class A common stock, and provides for an automatic increase in the number of shares reserved for issuance thereunder on January 1 of each of the first 10 calendar years during the term of the 2020 Plan, by the lesser of (i) 4% of the total number of shares of Class A common stock outstanding on each December 31 immediately prior to the date of increase or (ii) such number of shares of Class A common stock determined by our board of directors or compensation committee.

In November 2020, the Company’s board of directors adopted the 2020 Omnibus Incentive Plan (the “2020 Plan”).

The 2020 Plan provides for an automatic increase in the number of shares reserved for issuance thereunder on January 1 of each of the

first 10 calendar years during the term of the 2020 Plan, by the lesser of (i) 4 % of the total number of shares of Class A common stock outstanding on each December 31 immediately prior to the date of increase or (ii) such number of shares of Class A common stock determined by our board of directors or compensation committee.

Shares of Class A common stock subject to an award that expires or is cancelled, forfeited, exchanged, settled in cash or otherwise terminated without delivery of shares and shares withheld to pay the exercise price of, or to satisfy the withholding obligations with respect to, an award will again be available for delivery pursuant to other awards under the 2020 Plan.

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As of December 31, 2021, only stock options and restricted stock units have been issued.

In November 2020, the Company adopted the 2020 Employee Stock Purchase Plan (the “ESPP”) to assist employees in acquiring a stock ownership interest in the Company and to encourage them to remain in the employment of the Company.

The ESPP permits eligible employees to purchase shares of Class A common stock at a discount through payroll deductions during specified six-month purchase periods.

The price of shares purchased under the ESPP is equal to the lower of the grant date price less a 15 % discount or a 15 % discount to the market closing price on the date of purchase.

Compensation expense recognized for the ESPP was insignificant for all periods presented.

Stock Options

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(in thousands) Weighted Average Exercise Price per Stock Option Weighted Average Remaining Contractual Life

(Years) Aggregate Intrinsic Value

(in years) Aggregate Intrinsic Value

(in thousands)

Balance as of December 31, 2019 — — —

Outstanding as of December 31, 2020 1,514 $ 26.98 9.9 $ 1,621

Granted 454 39.98

Exercised ( 5 ) 27.00

Cancelled ( 554 ) 28.80

Balance as of December 31, 2020 1,514 $ 26.98 9.9 $ 1,621

No stock options were exercised or exercisable during the year ended December 31, 2020.

Outstanding as of December 31, 2021 1,409 $ 30.47 9.0 $ 16,846

Exercisable as of December 31, 2021 282 $ 26.98 8.8 $ 4,200

The Company uses the Black-Scholes option pricing model to estimate the fair value of each option grant on the date of grant or any other measurement date.

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Our historical share option exercise information is limited due to a lack of sufficient data points and does not provide a reasonable basis upon which to estimate an expected term.

• Expected volatility - The expected volatility was derived from the historical stock volatilities of peer public companies within our industry that are considered to be comparable to our business over a period equivalent to the expected term of the stock-based awards, since there has been no trading history of our stock.

• Risk-free interest rate - The risk-free interest rate is based on the U.S.

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• Expected dividend yield - The expected dividend yield is zero as we have no plans to make dividend payments.

The following table sets forth the weighted average assumptions used in estimating the grant date fair value of the awards granted:

A summary of the assumptions used to estimate the fair value of stock option grants for the years presented is as follows :

Year Ended December 31,

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Expected dividend yield — % — %

Stock-based compensation expense related to stock options was $0.6 million for the year ended December 31, 2020.

Stock-based compensation expense related to stock options was $ 4.6 million and $ 0.6 million for the years ended December 31, 2021 and 2020, respectively.

The total fair value of stock options vested was $ 4.3 million for the year ended December 31, 2021.

As of December 31, 2021, the total unrecognized stock-based compensation related to stock options was $ 18.0 million, which is expected be recognized over a weighted-average period of approximately 3.2 years.

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The following table summarizes RSU activity:

Restricted Stock Units Weighted Average Fair Value per RSU at Grant Date

Restricted Stock Units

(in thousands) Weighted Average Fair Value per RSU at Grant Date

Balance as of December 31, 2020 71 $ 27.00

Granted 43 37.46

Vested ( 24 ) 27.00

Balance as of December 31, 2021 90 $ 31.96

Stock-based compensation expense related to RSUs was $0.1 million for the year ended December 31, 2020.

Stock-based compensation expense related to RSUs was $ 0.8 million and $ 0.1 million for the years ended December 31, 2021 and 2020, respectively.

The total fair value of RSUs vested was $ 0.9 million for the year ended December 31, 2021.

As of December 31, 2021, the total unrecognized equity-based compensation related to RSUs was $ 2.6 million, which is expected be recognized over a weighted-average period of approximately 1.4 years.

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Topco LLC’s majority-owned subsidiary during the periods preceding the Organizational Transactions and wholly-owned subsidiary subsequent to the Organizational Transactions, issued incentive units (the “MLSC Incentive Units”) to its employees.

All MLSC Incentive Units were settled during 2020.

The MLSC Incentive Units were subject to either a combination of service, market or performance vesting conditions.

Vested MLSC Incentive Units were treated as common units for purposes of distributions.

Awards which vested based solely on a service condition provide for cliff-vesting over five years.

The MLSC Incentive Units that included performance conditions tied to the achievement of certain cash distribution multiples provided for full vesting upon meeting the performance condition.

The performance conditions that would allow the MLSC Incentive Units to vest was never deemed to be probable for any of the periods presented.

All vested MLSC Incentive Units were subject to repurchase for fair value at MLSC’s option upon a voluntary or involuntary separation event that was not deemed to be for cause and only after seven months have passed since the separation event.

No MLSC Incentive Units were granted in 2020 or 2019.

In September 2020, Topco LLC entered into agreements (the “Repurchase Agreements”) to repurchase all outstanding MLSC Incentive Units, including the 1,500,000 MLSC Incentive Units held by the President of Cygnus, a subsidiary of MLSC.

As part of the Repurchase Agreements, Topco LLC accelerated the vesting of all remaining unvested time-based MLSC Incentive Units and also removed the performance condition associated with the performance-based MLSC Incentive Units.

The Company has accounted for the acceleration of the vesting on the time-based MLSC Incentive Units under settlement accounting, which resulted in the recognition of all remaining unrecognized compensation cost.

Such accelerated compensation cost totaled $0.4 million.

The Company has accounted for the removal of the performance condition and the ensuing acceleration of the vesting of the 249,000 performance-based MLSC Incentive Units as an improbable-to-probable modification, which provides for pre-measurement of the related compensation cost at the fair value of these incentive units as of the date of the Agreements.

The total compensation cost recognized for these performance-based MLSC Incentive Units approximated $0.8 million.

In September 2020, Topco LLC entered into agreements (the “Repurchase Agreements”) to repurchase all remaining and outstanding MLSC Incentive Units, including the 1,500,000 MLSC Incentive Units, accelerated the vesting of all remaining unvested time-based MLSC Incentive Units and also removed the performance condition associated with the performance-based MLSC Incentive Units.

The total compensation cost recognized for these transactions approximated $ 0.8 million.

Topco LLC paid $ 9.1 million to settle the Repurchase Agreements in October 2020.

MLSC Incentive Unit activity during the periods indicated is as follows:

Number of Unvested MLSC Incentive Units Weighted Average Grant Date Fair Value Per Unit

Balance as of December 31, 2019 821,400 $ 0.88

Vested (821,400) 0.88

Balance as of December 31, 2020 —

Unit-based compensation expense for the fiscal years ended December 31, 2020, 2019 and 2018 was approximately $1.5 million, $0.4 million and $0.6 million, respectively.

There were no MLSC Incentive Units outstanding as of December 31, 2020.

The total fair value of the MLSC Incentive Units that vested in 2020, 2019 and 2018 was approximately $0.9 million, $0.6 million, and $0.6 million, respectively.

No MLSC Incentive Units were available for grant as of December 31, 2020.

Unit-based compensation expense related to MLSC Incentive Unit awards was approximately $ 1.5 million and $ 0.4 million for the years ended December 31, 2020 and 2019, respectively.

The total fair value of the MLSC Incentive Units vested was $ 0.9 million and $ 0.6 million for the years ended December 31, 2020 and 2019, respectively.

MLSH 1 Incentive Units

Prior to the Organizational Transactions, Topco LLC entered into agreements with certain executives and board members whereby those employees and board members were granted incentive units in MLSH 1.

Prior to the Organizational Transactions, Topco LLC entered into agreements with certain executives and board members whereby those employees and board members were granted incentive units in MLSH 1, a related party.

All MLSH 1 Incentive Unit awards were subject to a market condition which is subject to the achievement of a certain investment return threshold that increased on a compounding basis annually and a service condition subject to their continued employment.

Certain MLSH 1 Incentive Unit awards contained a performance condition tied to the achievement of certain cash distribution multiples.

All vested MLSH 1 Incentive Unit awards are subject to repurchase for fair value at MLSH 1’s option upon a voluntary or involuntary separation event that is not deemed to be for cause.

Upon the IPO, the performance condition was met for certain MLSH 1 Incentive Units and the Company recorded an additional $ 3.5 million of equity-based compensation expense.

The MLSH 1 Incentive Unit awards that include market and service conditions provide for cliff-vesting generally over four or five years .

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The fair value of MLSH 1 Incentive Unit awards was measured at the grant date and recognized as expense over the requisite service period for the awards.

During the years ended December 31, 2019 and 2018, all MLSH 1 Incentive Unit awards with performance conditions were subject to the achievement of defined cash distribution multiples.

No compensation cost was recorded for the MLSH 1 Incentive Unit awards with performance conditions during these periods, as achieving the cash distribution multiples performance condition associated with these awards was still not considered probable.

In November 2020, and before the IPO, MLSH 1 Incentive Unit awards were modified to allow for vesting subsequent to the termination of the employment for two employees (i.e.

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As a result of the modification and based on the performance condition being satisfied, the Company recognized an incremental equity-based compensation expense of $ 16.7 million for the year ended December 31, 2020.

Upon the IPO, the performance condition was met for certain MLSH 1 Incentive Units and the Company recorded an additional $3.5 million of equity-based compensation expense.

During the year ended December 31, 2020, a total of 62,000 MLSH 1 Incentive Unit awards were granted, none of which included performance condition vesting.

During the year ended December 31, 2019, a total of 169,500 MLSH 1 Incentive Unit awards were granted of which 34,500 included performance condition vesting.

All vested MLSH 1 Incentive Unit awards are subject to repurchase for fair value at MLSH 1’s option upon a voluntary or involuntary separation event that is not deemed to be for cause.

Total compensation cost recognized by the Company during each of the years ended December 31, 2020, 2019 and 2018 for all MLSH 1 Incentive Unit awards, was approximately $22.3 million, $1.3 million, and $1.5 million, respectively.

In connection with the divestiture of its Protein Detection business, the Company recognized incremental unit-based compensation expense of $ 2.4 million related to an amended agreement with an executive of Vector (see Note 2).

This unit-based compensation expense was recorded within selling, general and administrative in the consolidated statements of operations for the year ended December 31, 2021.

Unit-based compensation expense related to MLSH 1 Incentive Unit awards was approximately $ 3.9 million, $ 22.3 million, and $ 1.3 million for the years ended December 31, 2021, 2020 and 2019, respectively.

MLSH 1 Incentive Unit award activity during year ended December 31, 2021 is as follows:

Number of Unvested MLSH 1 Incentive Units Weighted Average Grant Date Fair Value Per Unit

Number of Unvested MLSH 1 Incentive Units

(in thousands) Weighted Average Grant Date Fair Value Per Unit

Balance as of December 31, 2020 349 $ 17.47

Granted 62,000 42.05

Forfeited ( 13 ) 46.78

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Equity-Based Compensation

The following table sets forth the total equity-based compensation expense included in the Company’s consolidated statements of operations for the years ended December 31, (in thousands):

The following table summarizes the total equity-based compensation expense included in the Company’s consolidated statements of operations for the periods presented (in thousands):

Year Ended December 31,

2021 2020 2019

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Repurchase of Non-Controlling Interests

In September 2020, Topco LLC and MLSH 1 entered into a Sale and Rollover Agreement with the President of Cygnus Technologies and his affiliated entity (collectively, the “Investors”) to purchase 43,264 MLSC Class B preferred units and 18,387,206 MLSC common units held by the Investors for approximately $120.0 million.

18,387,206 MLSC common units held by the Investors for approximately $ 120.0 million.

In October 2020, Topco LLC repurchased $ 120.0 million of the MLSC Class B preferred and common units for cash.

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In November 2020, the MLSC LLC Agreement was amended and restated to recapitalize the outstanding equity into 1,000 common units.

We are subject to U.S.

federal and state income taxes with respect to our allocable share of any taxable income or loss of Topco LLC generated after the IPO, as well as any stand-alone income or loss we generate.

Topco LLC is organized as a limited liability company and treated as a partnership for federal tax purposes, with the exception of Maravai Inc.

and its subsidiaries who are taxpaying entities in the U.S., Canada, and the U.K.

Topco LLC generally does not pay income taxes on its taxable

income in most jurisdictions.

As of December 31, 2021, we are subject to U.S.

federal and state income taxes with respect to our allocable share of any taxable income or loss of Topco LLC, as well as any stand-alone income or loss we generate.

Topco LLC is organized as a limited liability company and treated as a partnership for federal tax purposes and generally does not pay income taxes on its taxable income in most jurisdictions.

Instead, Topco LLC’s taxable income or loss is passed through to its members, including us.

Maravai, Inc.

files and pays corporate income taxes for U.S.

federal and state income tax purposes and internationally, primarily within the U.K.

We anticipate this structure to remain in existence for the foreseeable future.

Components of income (loss) from continuing operations before income taxes for the years ended December 31 were as follows (in thousands):

As of December 31, 2020, we were also subject to U.S.

federal and state corporate income taxes with respect to Maravai Inc.

and its subsidiaries who are taxpaying entities in the U.S., Canada, and the U.K.

During the year ended December 31, 2021, Maravai Inc.’s subsidiaries were sold and Maravai Inc.

ceased to be a regarded entity and was deemed liquidated for U.S.

tax purposes.

and its subsidiaries’ activity prior to their disposal is included in our continuing operations.

Components of income (loss) from continuing operations before income taxes for the periods presented were as follows (in thousands):

Year Ended December 31,

2021 2020 2019

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International ( 88 ) ( 316 ) ( 272 )

$ 81,696 $ (5,853) $ (16,498)

Income tax expense (benefit) consisted of the following for the years ended December 31 (in thousands):

Total income (loss) from continuing operations $ 530,765 $ 81,696 $ ( 5,853 )

Income tax expense (benefit) consisted of the following for the periods presented (in thousands):

Year Ended December 31,

2021 2020 2019

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State and local 1,623 2,251 2

International 3,697 — —

Total current tax expense 14,611 8,344 507

Deferred tax (benefit) expense

Deferred tax expense (benefit)

Federal $ 36,564 $ ( 3,922 ) $ ( 1,224 )

State and local 10,340 ( 1,542 ) 65

International — — 31

Total deferred tax (benefit) expense $ (5,463) $ (1,159) $ 324

Total deferred tax expense (benefit) 46,904 ( 5,464 ) ( 1,159 )

Total provision (benefit) for income taxes $ 61,515 $ 2,880 $ ( 652 )

A reconciliation between the Company’s effective tax rate and the applicable U.S.

federal statutory income tax rate as of December 31 is summarized as follows:

federal statutory income tax rate as of the periods presented is summarized as follows:

As of December 31,

2021 2020 2019

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Deferred tax revaluation — ( 1.8 ) —

One-time transition tax — % — % (0.7) %

Income of non-controlling interest ( 11.4 ) ( 18.9 ) —

Rate effect from pass-through entity — — ( 11.1 )

Taxable gain on subsidiary liquidation 2.7 % — % — %

Taxable (loss) gain on subsidiary liquidation ( 0.7 ) 2.7 —

Equity-based compensation 0.1 1.3 ( 0.8 )

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Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and operating loss and tax credit carryforwards.

Significant items comprising the net deferred tax assets at December 31 were (in thousands):

Significant items comprising the net deferred tax assets were as follows as of the periods presented below (in thousands):

December 31, 2021 December 31, 2020

Deferred tax assets

Interest limitation $ — $ 2,333

Net operating loss ("NOL") and credit carryforwards 3,392 455

Accruals 668 454

Inventories 228 19

Property, plant and equipment 93 —

Investment in Topco LLC $ 675,855 $ 360,861

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Deferred tax liabilities

Property, plant and equipment — (3,064)

Intangible assets — ( 11,341 )

Other — (326)

Deferred tax liabilities (11,341) (16,397)

Total net deferred tax asset (liability) $ 423,090 $ (14,697)

As a result of the Organizational Transactions and our IPO, we acquired LLC Units and recognized a deferred tax asset for the difference between the financial reporting and tax basis of our investment in Topco LLC which included net deferred tax assets of $445.5 million less a $13.3 million valuation allowance associated with:

(i) $364.4 million related to temporary differences in the book basis as compared to the tax basis of our Company’s investment in Topco LLC and (ii) $81.1 million related to tax benefits from future deductions attributable to payments under the TRA.

The valuation allowance increased by $12.1 million and decreased by an immaterial amount during the years ended December 31, 2020 and 2019, respectively.

Total deferred tax liabilities — ( 11,341 )

Total net deferred tax asset $ 808,117 $ 423,090

As a result of the Organizational Transactions, IPO, and subsequent exchanges and financing, we acquired LLC Units and recognized a deferred tax asset for the difference between the financial reporting and tax basis of our investment in Topco LLC which included net deferred tax assets of $ 808.1 million primarily associated with:

(i) $ 675.9 million related to temporary differences in the book basis as compared to the tax basis of our Company’s investment in Topco LLC and (ii) $ 154.1 million related to tax benefits from future deductions attributable to payments under the TRA and (iii) $ 23.1 million valuation allowance on these items.

The valuation allowance increased by $ 9.4 million and $ 12.1 million during the years ended December 31, 2021 and 2020, respectively.

The realizability of the Company’s deferred tax asset related to its investment in Topco LLC depends on the Company receiving allocations of tax deductions for its tax basis in the investment and on the Company generating sufficient taxable income to fully offset such deductions.

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However, a portion of the deferred tax asset may only be realizable through the sale or liquidation of the investment and our ability to generate sufficient capital gains.

Therefore, the change in the valuation allowance during December 31, 2020, is primarily due to the establishment of a $13.3 million valuation allowance to reflect the deferred tax asset that is more likely than not to not be realized.

Additionally, in response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in March 2020.

The CARES Act modified the interest expense utilization rules allowing taxpayers to deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for tax years beginning January 1, 2019 and 2020.

These changes to the interest expense limitation calculation allowed the Company to utilize additional interest expense that was previously disallowed causing a $1.3 million valuation allowance release in 2020.

For the years ended December 31, 2020 and 2019, December 31, 2019 and December 31, 2020, the amount of undistributed foreign earnings was $0.9 million and $1.2 million, respectively.

We have provided income taxes on the earnings of foreign subsidiaries, the amount of which is immaterial.

Net operating loss and tax credit carryforwards as of December 31, 2020 were as follows (in millions):

Therefore, the change in the valuation allowance during

December 31, 2021, is primarily due to the establishment of a $ 23.1 million valuation allowance to reflect the deferred tax asset that is more likely than not to not be realized.

Net operating loss (“NOL”) and tax credit carryforwards as of December 31, 2021 were as follows (in millions):

Amount Expiration Years

Net operating losses, federal (all post December 31, 2017) $ 12.5 Do not expire

Net operating losses, state (1)

$ 6.9 Beginning in 2034

Net operating losses, foreign 1.7 Do not expire

Tax credits, federal 0.2 2039 - 2040

Tax credits, state 0.3 CA - Do not expire

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(1) The carryforward rules for state net operating losses vary from state to state with some states not having an expiration date.

As of December 31, 2020 and 2019, the Company had $0.2 million and $0.2 million, respectively, of unrecognized tax benefits, all of which would affect the effective tax rate if recognized.

As of December 31, 2021 and 2020, the Company had insignificant unrecognized tax benefits, all of which would affect the effective tax rate if recognized.

The Company does not expect any significant increases or decreases to our unrecognized tax benefits in the next twelve months.

The aggregate changes in the balance of the Company’s unrecognized tax benefits were as follows as of December 31 (in thousands):

The Company recognizes interest related to uncertain tax benefits as a component of income tax expense.

The aggregate changes in the balance of the Company’s unrecognized tax benefits were as follows for the periods presented (in thousands):

Year Ended December 31,

2021 2020 2019

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The Company files income tax returns in the U.S.

federal jurisdiction, various U.S.

states, Canada, and the United Kingdom and is not under audit by taxing authorities in any of these jurisdictions.

In the normal course of business the Company is subject to examination by taxing authorities throughout the world.

federal jurisdiction and various states and is not under audit by taxing authorities in any of these jurisdictions.

With a few exceptions, the Company is no longer subject to U.S.

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Payable to Related Parties Pursuant to the TRA

Pursuant with our IPO, we entered into a tax receivable agreement with MLSH 1 and MLSH 2.

The Tax Receivable Agreement provides for the payment by us to MLSH 1 and MLSH 2, collectively, of 85% of the amount of tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of the Organizational Transactions and IPO.

Pursuant with our IPO, we entered into a TRA with MLSH 1 and MLSH 2.

Based on our current projections of taxable income, and before deduction of any specially allocated depreciation and amortization, we anticipate having enough taxable income to utilize most of these tax benefits.

Accordingly, in November 2020 a liability of $389.5 million payable to the MLSH 1 and MLSH 2 under the TRAs, representing approximately 85% of the calculated tax savings we anticipate being able to utilize in future years.

Accordingly, in November 2020 a liability of $ 389.5 million payable to the MLSH 1 and MLSH 2 under the TRAs was established.

This liability was increased by $ 137.7 million and $ 227.4 million as a result of the April 2021 Secondary Offering and September 2021 Secondary Offering, respectively.

The liability also increased by $ 1.0 million as a result of the Company’s cash contribution to Topco LLC in December 2021.

During the year ended December 31, 2021, the Company recognized a gain of $ 6.1 million on TRA liability adjustment reflecting a change in the tax benefit obligation attributable to a change in the expected tax benefit.

The remeasurement was primarily due to changes in our estimated state apportionment and the corresponding reduction of our estimated state tax rate.

The liability, represents approximately 85 % of the calculated tax savings we anticipate being able to utilize in future years.

The projection of future taxable income involves significant judgment.

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In this scenario, the reduction of the liability under the TRA would result in a benefit to our consolidated statement of operations.

No payments were made to MLSH1 or MLSH 2 pursuant to the Tax Receivable Agreement during 2020.

As of December 31, 2020, our liabilities under the Tax Receivable Agreement are $389.5 million.

We made payments of $ 1.3 million to MLSH 1 and MLSH 2 pursuant to the TRA during the year ended December 31, 2021.

No payments were made during the year ended December 31, 2020.

As of December 31, 2021 and 2020, our liabilities under the TRA were $ 748.3 million and $ 389.5 million, respectively.

Tax Distributions to Topco LLC’s Owners

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The agreement has numerous provisions related to allocations of income and loss, as well as timing and amounts of distributions to its owners.

This agreement also includes a provision requiring cash distributions enabling its owners to pay their taxes on income passing through from Topco LLC.

agreement also includes a provision requiring cash distributions enabling its owners to pay their taxes on income passing through from Topco LLC.

These tax distributions are computed based on an assumed income tax rate equal to the sum of (i) the maximum combined marginal federal and state income tax rate applicable to an individual and (ii) the net investment income tax.

The assumed income tax rate currently totals 46.7%, which may increase to 54.1% in certain cases where the qualified business income deduction is unavailable.

The assumed income tax rate ranges from 46.7 % to 54.1 % in certain cases where the qualified business income deduction is unavailable.

In addition, under the tax rules, Topco LLC is required to allocate taxable income disproportionately to its unit holders.

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and foreign jurisdictions where Topco LLC or any of our subsidiaries are subject to income tax.

During 2020, Topco LLC paid tax distributions of $8.2 million to its owners, excluding us.

No tax distributions were made by Topco LLC for the year ended December 31, 2019 and $0.1 million was made for the year ended December 31, 2018.

During the year ended December 31, 2021, Topco LLC paid tax distributions of $ 283.2 million to its owners, including $ 129.7 to us.

During the year ended December 31, 2020, Topco LLC paid tax distributions of $ 13.1 million to its owners, including $ 4.9 million to us.

No tax distributions were made by Topco LLC for the year ended December 31, 2019.

As of December 31, 2021, no amounts for tax distributions have been accrued as such payments were made during 2021.

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The Company provides for a cash match of up to 50 % of employee contributions up to the first 6 % of salary.

The Company match vests over a four-year term.

In February 2019, a retirement saving plan of one of our subsidiaries was closed and all funds in the plan were rolled over into the Maravai LifeSciences 401(k) Plan.

The Company also maintains a non-qualified Long-Term Incentive Plan (“LTIP”) for legacy employees of one of their subsidies which is not subject to the Employee Retirement Income Security Act of 1974.

As of December 31, 2019, the Company was no longer required to contribute to the plan under the terms of the historical purchase agreement.

Total contributions by the Company to these plans were approximately $1.0 million, $1.2 million, and $1.0 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Total contributions by the Company to the Maravai LifeSciences 401(k) Plan was approximately $ 1.3 million, $ 1.0 million, and $ 1.2 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Related Party Transactions

Prior to the IPO, GTCR, LLC (“GTCR”), MLSH 1’s majority owner, provided subsidiaries of the Company with financial and management consulting services through an advisory services agreement.

This advisory services agreement also provided that the Company pay placement fees to GTCR of 1.0% of the gross amount of any debt or equity financings.

During the years ended December 31, 2020 the Company entered into the New Credit Agreement (see Note 7) and paid GTCR a $3.7 million placement fee.

During the years ended December 31, 2019 and 2018, no placement fees were incurred.

The advisory services agreement provides that the Company pay a $0.1 million quarterly management fee to GTCR commencing on the date of the first acquisition.

For each of the years ended December 31, 2020, 2019, and 2018, the Company incurred approximately $4.2 million, $0.5 million, and $0.5 million in management fees to GTCR which were paid in full as of December 31, 2020, 2019, 2018, respectively.

MLSH 1’s majority owner is GTCR, LLC (“GTCR”).

The Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) are executives or MLSH 1.

The Company’s CEO, CFO and General Counsel are executives of MLSH 2.

Advisory and Services Agreement with GTCR

Prior to the IPO, GTCR, provided subsidiaries of the Company with financial and management consulting services through an advisory services agreement.

This advisory services agreement also provided that the Company pay placement fees to GTCR of 1.0 % of the gross amount of any debt or equity financings as well as quarterly management fees.

The advisory services agreement was terminated in connection with the IPO.

The Company also reimburses GTCR for out-of-pocket expenses incurred while providing the above professional services.

During the years ended December 31, 2020, 2019, and 2018, the Company incurred out-of-pocket expenses to GTCR of $0.2 million, $2.4 million, and $0.1 million, respectively.

Of these balances, the amounts included in accrued expense at December 31, 2019 was approximately $2.4 million.

The were no amounts included in accounts payable and accrued expenses as of December 31, 2020.

The non-controlling interests in MLSC represent equity interest that was retained by the shareholders of the MLSC entity prior to its acquisition by the Company.

The President of Cygnus and his affiliated entity were the owners of the non-controlling interests.

In September 2020, Topco LLC and MLSH 1 entered into a Sale and Rollover Agreement with the President of Cygnus and his affiliated entity to purchase certain MLSC Class B preferred units and common units as well as exchange the remaining MLSC Class B preferred units and common units for a variable number of MLSH 1 common units.

As a result of this transaction, the President of Cygnus and his affiliated entity no longer held a non-controlling interest in MLSC upon the exchange of MLSH 1 common units for the remaining MLSC Class B preferred and common units which occurred in November 2020 (see Note 11).

During the year ended December 31, 2020, the Company entered into the Credit Agreement (see Note 7) and paid GTCR a $ 3.7 million placement fee.

No such placement fees were incurred during the years ended December 31, 2021 and 2019.

For the year ended December 31, 2020, the Company incurred approximately $ 4.2 million in management fees to GTCR.

All other amounts paid or payable under these agreements to GTCR were insignificant for all periods presented.

Director Nomination Agreement with GTCR

In connection with the IPO, the Company entered into a Director Nomination Agreement with GTCR.

The Director Nomination Agreement provides GTCR the right to nominate to the Board a number of designees equal to at least:

(i) 100 % of the total number of directors comprising the Board, so long as GTCR beneficially owns shares of Class A common stock and Class B common stock representing at least 40 % of the total amount of shares of Class A common stock and Class B common stock it owns, (ii) 40 % of the total number of directors, in the event that GTCR beneficially owns shares of Class A common stock and Class B common stock representing at least 30 % but less than 40 % of the total amount of shares of Class A common stock and Class B common stock it owns, (iii) 30 % of the total number of directors, in the event that GTCR beneficially owns shares of Class A common stock and Class B common stock representing at least 20 % but less than 30 % of the total amount of shares of Class A common stock and Class B common stock it owns, (iv) 20 % of the total number of directors, in the event that GTCR beneficially owns shares of Class A common stock and Class B common stock representing at least 10 % but less than 20 % of the total amount of shares of Class A common stock and Class B common stock it owns and (v) one director, in the event that GTCR beneficially owns shares of Class A common stock and Class B common stock representing at least 5 % of the total amount of shares of Class A common stock and Class B common stock it owns.

In addition, GTCR shall be entitled to

designate the replacement for any of its Board designees whose Board service terminates prior to the end of the director’s term, regardless of GTCR’s beneficial ownership at that time.

GTCR shall also have the right to have its designees participate on committees of the Company/s Board proportionate to its voting power, subject to compliance with applicable law and stock exchange rules.

The Director Nomination Agreement also prohibits the Company from increasing or decreasing the size of our Board without the prior written consent of GTCR.

This agreement will terminate at such time as GTCR beneficially owns less than 5 % of the shares of Class A and Class B common stock it beneficially owned at the date of the IPO.

Registration Rights Agreement with MLSH 1 and MLSH 2

In connection with the IPO, Company entered into a registration rights agreement with MLSH 1 and MLSH 2.

MLSH 1 and MLSH 2 are entitled to request that the Company register their shares of capital stock on a long-form or short-form registration statement on one or more occasions in the future, which registrations may be “shelf registrations.” MLSH 1 and MLSH 2 are also entitled to participate in certain of our registered offerings, subject to the restrictions in the registration rights agreement.

During 2021, the Company registered shares of Class A shares held by MLSH 1 which were subsequently sold in an offering as selling shareholders as well as facilitated secondary offering transactions related to current year exchanges (see Note 8).

Exchange Agreement with MLSH 1

In connection with the IPO, the Company entered into an exchange agreement with MLSH 1, whereby MLSH 1 may surrender their LLC Units to Topco LLC or, at our election, exchange its LLC Units for shares of our Class A common stock on a one-for-one basis, or, at our election, for cash from a substantially concurrent public offering or private sale.

MLSH 1 is also required to deliver to us an equivalent number of shares of Class B common stock to effectuate an exchange.

MLSH 1 executed two exchanges under this agreement during 2021 (see Note 8).

Payable to Related Parties Pursuant to a Tax Receivable Agreement

Concurrent with the completion of the IPO, the Company entered into a TRA with MLSH 1 and MLSH 2.

During the year the Company made TRA payments to both MLSH 1 and MLSH 2 (see Note 12).

Cash Contribution, Exchange and Forfeiture Agreement with MLSH 1

In December 2021, the Company entered into a Cash Contribution, Exchange and Forfeiture Agreement (the “Contribution Agreement”) with MLSH 1 (see Note 8).

Topco LLC Operating Agreement

MLSH 1 is party to the Topco LLC operating agreement put in place at the date of the Organizational Transactions.

This agreement includes a provision requiring cash distributions enabling its owners to pay their taxes on income passing through from Topco LLC.

During the year ended December 31, 2021 and 2020, the Company made distributions of $ 153.5 million and $ 8.2 million for tax liabilities to MLSH 1 under this agreement.

Other Distributions

In October 2020, the Company made a $ 88.6 million distribution to MLSH 1.

Following the completion of the Organizational Transactions and IPO, Topco LLC made tax distributions of $8.2 million to MLSH 1.

The Company leases a facility, which through the date of the Organizational Transactions was owned by an entity controlled by a close relative of the President of one of its subsidiaries (see Note 6).

The President of this subsidiary also personally financed a loan to this entity which was used to acquire the property leased by the Company.

Upon completion of the Sale and Rollover Agreement (Note 11), this individual was no longer deemed to be a related party.

For the years ending December 31, 2020, 2019, and 2018, respectively, the Company paid $0.2 million in lease payments for the leased facility.

Concurrent with the completion of the IPO, the Company entered into a TRA with MLSH 1 and MLSH 2 (see Note 12).

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

Contract Development and Manufacturing Agreement with Curia Global

GTCR has significant influence over Curia Global.

During the year-ended December 31, 2021, the Company paid $ 7.4 million to Curia Global (“Curia”), an entity for which GTCR exercises significant influence, for contract manufacturing and development services.

Such amounts were included in research and development expense on the consolidated statement of operations for the year-ended December 31, 2021.

Maravai LifeSciences Foundation

In December 2021, the Company established a new charitable foundation to promote causes tied to Maravai’s mission.

During the year ended December 31, 2021, the Company contributed $ 2.0 million to the Foundation.

The Company does not control the Foundation’s activities, and accordingly, does not consolidate the Foundation.

in assessing performance.

When determining the reportable segments, the Company aggregated operating segments based on their similar economic and operating characteristics.

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• Protein Detection :

focuses on manufacturing and selling labeling and visual detection reagents to scientific research customers for their tissue-based protein detection and characterization needs.

focused on manufacturing and selling labeling and visual detection reagents to scientific research customers for their tissue-based protein detection and characterization needs.

The Company completed the divestiture of its Protein Detection business in September 2021 (see Note 2).

The Company has determined that adjusted earnings before interest, tax, depreciation, and amortization (“Adjusted EBITDA”) is the profit or loss measure that the CODM uses to make resource allocation decisions and evaluate segment performance.

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Corporate costs are managed on a standalone basis and not allocated to segments.

Following is financial information relating to the operating segments (in thousands):

For the year ended December 31, 2020 Nucleic Acid

Production Biologics

Testing Protein

Detection Corporate Eliminations Total

The following tables include financial information relating to the operating segments for the periods presented (in thousands):

Year Ended December 31, 2021

Nucleic Acid Production Biologics Safety Testing Protein Detection Corporate Eliminations Total

Revenue $ 712,520 $ 68,417 $ 18,959 $ — $ ( 656 ) $ 799,240

Adjusted EBITDA $ 565,254 $ 54,440 $ 6,391 $ ( 43,270 ) $ 5 $ 582,820

For the year ended December 31, 2019 Nucleic Acid

Production Biologics

Testing Protein

Detection Corporate Eliminations Total

Year Ended December 31, 2020

Nucleic Acid Production Biologics Safety Testing Protein Detection Corporate Eliminations Total

Revenue $ 207,597 $ 54,897 $ 22,881 $ — $ ( 1,277 ) $ 284,098

Adjusted EBITDA $ 133,822 $ 44,516 $ 9,225 $ ( 18,189 ) $ ( 209 ) $ 169,165

For the year ended December 31, 2018 Nucleic Acid

Year Ended December 31, 2019

Production Biologics

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Adjusted EBITDA $ 22,229 $ 36,371 $ 14,603 $ ( 11,189 ) $ — $ 62,014

During the year ended December 31, 2020, intersegment revenue was $1.3 million.

During the years ended December 31, 2021 and 2020, intersegment revenue was $ 0.7 million and $ 1.3 million, respectively.

The intersegment sales and the related gross margin on inventory recorded at the end of the period are eliminated for consolidation purposes in the Eliminations column.

Internal selling prices for intersegment sales are consistent with the segment’s normal retail price offered to external parties.

There was no commission expense recognized for intersegment sales for the year ended December 31, 2020.

There was no commission expense recognized for intersegment sales for the years ended December 31, 2021and 2020.

Intersegment revenue represents intersegment revenue between the Nucleic Acid Production and Protein Detection segments.

There was no inter-segment activity for the years ended December 31, 2019 and 2018.

There was no inter-segment activity for the year ended December 31, 2019.

The Company does not allocate assets to its reportable segments as they are not included in the review performed by the CODM for purposes of assessing segment performance and allocating resources.

Excluding approximately $0.4 million associated with a building in the United Kingdom, all of the Company’s long-lived assets are located within the United States.

A reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP measure, is set forth below (in thousands):

A reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, is set forth below for the periods presented (in thousands):

Year Ended December 31,

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GTCR management fees — 680 523

Gain on sale of business ( 11,249 ) — —

Gain on sale and leaseback transaction — ( 19,002 ) —

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Financing costs 2,383 9,784 —

Tax receivable agreement liability adjustment ( 6,101 ) — —

Loss on extinguishment of debt — 7,592 —

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Subsequent Events

In January 2021, the Company entered into a new interest rate cap agreement to manage a portion of its variable interest rate risk on its outstanding long-term debt.

The contract, effective March 31, 2021, entitles the Company to receive from the counter party at each calendar quarter end the amount, if any, by which the specified defined floating market rate exceeds the cap strike interest rate, applied to the contract notional amount of $415.0 million.

The floating rate of interest is reset at the end of each three month period.

The contract expires on March 31, 2023.

Amendment No.

2 to the Credit Agreement

In January 2022, certain subsidiaries of the Company entered into Amendment No.

2 (the “Amendment”) to the Credit Agreement, dated as of October 19, 2020, among Intermediate, Cygnus, and TriLink, as the borrowers, Topco LLC, as holdings, the lenders from time-to-time party thereto and Morgan Stanley Senior Funding, Inc., as administrative and collateral agent (as amended, supplemented or otherwise modified, the “Credit Agreement”).

The Amendment replaces the LIBOR based interest rate with a Term Secured Overnight Financing Rate (“SOFR”) based rate.

The Amendment also reduces the interest rate margins applicable to the term and revolving facilities under the Credit Agreement.

The previous interest rate margin on the facilities was, with respect to each LIBOR-based loan, 3.75 % to 4.25 % and, with respect to each base rate-based loan, 2.75 % to 3.25 % (depending, in each case, on consolidated first lien leverage).

Following the Amendment, the interest rate margin on the facilities is 3.00 %, with respect to each Term SOFR-based loan, and 2.00 %, with respect to each base rate-based loan.

Further, the Amendment reduces the base rate floor for the term loans from 2.00 % to 1.50 %, sets the floor for Term SOFR-based term loans at 0.50 % and sets the floor for Term SOFR-based revolving loans at 0.00 %.

No other significant terms under the Credit Agreement were changed in connection with the Amendment.

Acquisition of MyChem, LLC

In January 2022, the Company completed the acquisition of MyChem, LLC (“MyChem”), a privately-held San Diego, California-based provider of ultra-pure nucleotides to customers in the diagnostics, pharma, genomics and research markets.

The consideration to acquire MyChem comprised of gross purchase price $ 250.0 million, subject to purchase price adjustments, and potential earn out payments payable in cash of up to $ 60.0 million.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data