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Item 7. Management’s Discussion and Analysis

2025-03-18 compared with 2024-02-29 · 286 added, 319 removed, 303 unchanged (67% of the section changed)

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You should read the following discussion and analysis of financial condition and results of operations together with our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

This discussion and analysis reflects our historical consolidated results of operations and financial position, and contain forward-looking statements that involve risks and uncertainties.

This discussion and analysis reflects our historical consolidated results of operations and financial position, and contains forward-looking statements that involve risks and uncertainties.

Our actual results could differ materially from those discussed in or implied by these forward-looking statements.

Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors.” Please also see the section titled “Forward Looking Statements.” We were incorporated in August 2020 and, pursuant to the organizational transactions described in Note 1 to our consolidated financial statements, became a holding company whose principal asset is a controlling equity interest in Topco LLC.

Factors that could cause or contribute to such differences include, but are not limited to, those discussed in Item 1A.

“Risk Factors.” Please also see the section titled “Special Note Regarding Forward Looking Statements.” We were incorporated in August 2020 and, pursuant to the organizational transactions described in Note 1 to our consolidated financial statements, became a holding company whose principal asset is a controlling equity interest in Topco LLC.

As the sole managing member of Topco LLC, we operate and control the business and affairs of Topco LLC and its subsidiaries.

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Our customers include the top global biopharmaceutical companies ranked by research and development expenditures according to industry consultants, and many other emerging biopharmaceutical and life sciences research companies, as well as leading academic research institutions and in vitro diagnostics companies.

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.

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.

We have and will continue to build a transformative life sciences products company by acquiring businesses and accelerating their growth through capital infusions and industry expertise.

Biomedical innovation is dependent on a reliable supply of reagents in the fields of nucleic acid production, biologics safety testing and protein labeling.

Biomedical innovation is dependent on a reliable supply of reagents in the fields of nucleic acid production and biologics safety testing.

From inventive startups to the world’s leading biopharmaceutical, vaccine, diagnostics and gene and cell therapy companies, these customers turn to us to solve their complex discovery challenges and help them streamline and scale their supply chain needs beginning from research and development through clinical trials to commercialization.

Our primary customers are biopharmaceutical companies who are pursuing novel research and product development programs.

Our primary end customers are biopharmaceutical companies who are pursuing novel research and product development programs.

Our customers also include a range of government, academic and biotechnology institutions.

As of December 31, 2023, we employed a team of over 650 employees, approximately 24% of whom have advanced degrees.

As of January 5, 2024, following the completion of a reduction in force (as described under “Restructuring” below), we had approximately 570 employees, approximately 25% of whom have advanced degrees.

As of December 31, 2024, we employed a team of ove r 570 fu ll-time employees, approximatel y 28% of whom have advanced degrees.

We primarily utilize a direct sales model for our sales to our customers in North America.

Our international sales, primarily in Europe and Asia Pacific, are effected through a combination of third-party distributors as well as via a direct sales model.

Our international sales, primarily in Europe and Asia Pacific, are through a combination of third-party distributors as well as via a direct sales model.

The percentage of our total revenue derived from customers in North America was 49.0% and 48.8% for the years ended December 31, 2024 and 2023, respectively.

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2024 and Recent Developments

In January 2023, we completed the acquisition of Alphazyme, LLC (“Alphazyme”), a privately-held original equipment manufacturer (“OEM”) and provider of custom, scalable, molecular biology enzymes to customers in the genetic analysis and nucleic acid synthesis markets, for a total purchase consideration of $75.3 million.

As a result of the acquisition, we own all the outstanding equity interest in Alphazyme.

Our consolidated results of operations for the year ended December 31, 2023 include the operating results of Alphazyme from the acquisition date.

See Note 2 to our consolidated financial statements for additional information.

Restructuring

In November 2023, the Company implemented a cost realignment plan (the “Cost Realignment Plan”) that included the termination of approximately 15% of the Company’s workforce, the termination of certain leases, and other actions to reduce expenses, all as part of a plan to optimize business operations and match them to current market conditions.

The reduction in

force was completed on January 5, 2024, following the end of the sixty-day notification period required by the Worker Adjustment and Retraining Notification Act.

The Company expects the remaining actions under the Cost Realignment Plan to be substantially complete during the first quarter of 2024.

During the year ended December 31, 2023, we incurred restructuring costs of $6.5 million, primarily related to severance and other employee-related costs, facility and other exit costs, professional fees and other restructuring costs.

We do not expect to incur any additional restructuring costs, however, we expect to recognize a benefit of $1.2 million during the first quarter of 2024 relating to equity award forfeitures associated with employee terminations.

We expect the Cost Realignment Plan to yield certain cost savings of approximately $30.0 million annually, of which $23.0 million relates to labor costs.

Goodwill Impairment

In connection with preparing our financial statements for the third quarter of 2024, we tested our reporting units for potential goodwill impairment in response to impairment indicators identified during our forecasting process.

We revised our long-term forecast to reflect lower projected near-term revenues due to lower demand in research and discovery products within our Nucleic Acid Production business.

This revision also considered the slower than expected transition to new mRNA clinical trials as customers prioritize existing programs and more conservatively invest in new programs as the results of continued macroeconomic pressures.

As such, we performed a quantitative goodwill impairment test on each of our four reporting units and as a result, we concluded that the TriLink reporting unit, which is contained in the Nucleic Acid Production segment, had a carrying value that exceeded its estimated fair value.

As a result, we recorded goodwill impairment of $154.2 million on the consolidated statements of operations, which was the entire goodwill balance at the TriLink reporting unit.

No impairment was recorded for any of our remaining three reporting units.

In connection with preparing our financial statements for the year ended December 31, 2024, we tested our reporting units for potential goodwill impairment in response to impairment indicators identified during our forecast process and the sustained

decline in our stock price.

As of December 31, 2024, we revised our long-term forecast to reflect lower projected near-term revenues due to lower demand in enzyme products within our Nucleic Acid Production business.

As such, we performed a quantitative goodwill impairment test on each of our reporting units with goodwill as of December 31, 2024, and as a result, we concluded that the Alphazyme reporting unit, which is contained in the Nucleic Acid Production segment, had a carrying value that exceeded its estimated fair value.

As a result, we recorded goodwill impairment of $11.9 million on the consolidated statements of operations.

No impairment was recorded for any of our other reporting units at that time.

See Note 4 to our consolidated financial statements for additional information.

Voluntary Prepayments on Term Loan

In December 2024, we voluntarily pre-paid, using cash on hand, $228.0 million of aggregate principal amount of the $600.0 million term loan facility provided under our credit agreement (“Term Loan”).

There were no prepayment penalties associated with this prepayment of principal.

As a result of the prepayment, we wrote off a portion of pre-existing deferred financing costs associated with the Term Loan.

Acquisition of Assets and Intellectual Property from Molecular Assemblies

In January 2025, we acquired assets and intellectual property from Molecular Assemblies, expanding TriLink’s ability to enable customers to develop next-generation mRNA and clustered regularly interspaced short palindromic repeats nucleic acid-based therapies.

The total consideration for this acquisition was a purchase price of $11.5 million, subject to customary post-closing adjustments.

Acquisition of Officinae Bio

In February 2025, we completed the acquisition of the DNA and RNA business of Officinae Bio (“Officinae”), a privately held technology company with a proprietary digital platform designed with artificial intelligence and machine learning capabilities to support the biological design of therapeutics.

The total consideration to acquire Officinae consisted of a base cash provisional purchase price of $10.0 million, subject to customary post-closing adjustments, and potential contingent consideration payments of up to $35.0 million, with $5.0 million of such contingent consideration payable in cash upon the achievement of a certain milestone and up to an additional $30.0 million payable in a mix of cash and shares of our Class A common stock upon the achievement of certain milestones.

Trends and Uncertainties

COVID-19 Related Revenue Trends and Uncertainties

Our results of operations and cash flows during each of the years ended December 31, 2022, 2021 and 2020 substantially benefited from the demand for COVID-19 related products and services, including our proprietary CleanCap® analogs and highly modified RNA products, particularly mRNA, which are used by our customers in the production of COVID-19 vaccines.

As a result of the general decrease in market demand for COVID-19 related products and services, including the supply and manufacture of COVID-19 vaccines, and in particular, following the end of U.S.

federal public health emergency declaration and World Health Organization declaration of the end of the pandemic in early May 2022, we expect to experience further declines in COVID-19 related revenue, as discussed in further detail below.

We estimate that revenue from COVID-19 related products and services represented approximately 21.0% and 67.9% of our total revenues for the years ended December 31, 2023 and 2022, respectively.

We believe that the second quarter of 2022 will have represented the highest revenue quarter for revenue attributable to our COVID-19 related products and services, and have experienced substantial declines in COVID-19 related revenue since such quarter as a result of the general market trend of reduced demand for COVID-19 related products and services as the pandemic subsides, including the supply and manufacture of COVID-19 related vaccines, and the World Health Organization declaring an end to the COVID-19 pandemic.

We expect further declines in COVID-19 related revenue for these reasons, as well as a result of unused inventory of our products that our customers have on hand.

We are currently unable to fully estimate the impact of this unused inventory on our future COVID-19 related revenue, nor are we able to predict when our customers will resume purchasing COVID-19 related products given that our customers generally have not provided us with detailed inventory data.

Our longer-term revenue prospects for COVID-19 related products are highly uncertain but are expected to be substantially less than pandemic highs.

The factors that could influence longer-term COVID-19 related revenue include:

the emergence, duration and intensity of new virus variants;

regional resurgences of the virus globally;

competition faced by our customers from other COVID-19 vaccine manufacturers and the development and availability of antiviral therapeutic alternatives;

the availability and administration of pediatric and booster vaccinations, vaccine supply constraints, vaccine hesitancy and the effectiveness of vaccines against new virus strains;

economy and global economy, including impacts resulting from supply chain constraints, labor market shortages and inflationary pressures.

This contraction in COVID-19 related demand will significantly decrease our revenue and cash flow, which in turn could have a material adverse impact on our operating results and financial condition in the future.

Other Trends and Uncertainties

While we believe that the long-term trend of biopharmaceutical customers relying on outside parties to provide important inputs and services for their clinical research and manufacturing remains a long-term growth driver for us, we believe that recent industry trends and uncertainties, including changes in our customers’ spending priorities and budgetary policies and practices, which negatively impacted our revenue and operating results in the year ended December 31, 2023, may continue and result in slower growth and/or cause a further decline in our revenues during the year ending December 31, 2024.

These trends and uncertainties, which we primarily attribute to lower levels of investment in the research and development funding of early-stage biotechnology companies and declines and uncertainties in the capital markets amidst ongoing negative macroeconomic challenges, has and may continue to cause those companies to take action to conserve capital, resulting in a potential reduction in research and development spending across the markets in which we participate.

Our results of operations and cash flows substantially benefit from high-volume sales of our proprietary CleanCap® analogs for commercial phase vaccine programs.

We estimate that revenue from high-volume sales of CleanCap for commercial phase vaccine programs represented approximately 25.4% and 21.0% of our total revenues for the years ended December 31, 2024 and 2023, respectively.

The amount, timing and durability of future high-volume CleanCap orders have become increasingly difficult to forecast because historical customers for such orders have been unable or unwilling to provide visibility into their anticipated future needs and plans to purchase CleanCap.

If high-volume orders for CleanCap do not materialize in the future at similar or greater levels than they have in the past it will significantly decrease our revenue and cash flow which, in turn, could have a material adverse impact on our operating results and financial condition in the future.

While we believe that the long-term trend of biopharmaceutical customers relying on outside parties to provide important inputs and services for their clinical research and manufacturing remains a long-term growth driver for us, lower demand for research and discovery products within our Nucleic Acid Production business coupled with slower than expected mRNA clinical trial progressions negatively impacted our revenue and operating results in the year ended December 31, 2024, which trend may continue and result in slower growth and/or cause a further decline in our revenues in the future.

Our businesses also continue to see headwinds from a general contraction in economic activity in Asia, particularly in China, which may negatively impact our revenue derived from those markets.

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The key measures we use to determine how our business is performing are revenue and Adjusted EBITDA.

Adjusted EBITDA is a non-GAAP financial measure that we define as net (loss) income adjusted for interest, provision for income taxes, depreciation, amortization and equity-based compensation expenses.

Adjusted EBITDA is a non-GAAP financial performance measure that we define as net (loss) income adjusted for interest, provision for income taxes, depreciation, amortization and stock-based compensation expenses.

Adjusted EBITDA reflects further adjustments to eliminate the impact of certain items, including certain non-cash and other items, that we do not consider representative of our ongoing operating performance.

We also present Adjusted Free Cash Flow, which is a non-GAAP measure that we define as Adjusted EBITDA less capital expenditures.

Management uses Adjusted EBITDA to evaluate the financial performance of our business and the effectiveness of our business strategies.

We present Adjusted EBITDA and Adjusted Free Cash Flow because we believe they are frequently used by analysts, investors and other interested parties to evaluate companies in our industry, and they facilitate comparisons on a consistent basis across reporting periods.

Further, we believe they are helpful in highlighting trends in our operating results because they exclude items that are not indicative of our core operating performance.

Adjusted EBITDA is also a component of the financial covenant under our credit agreement that governs our ability to access more than $63.0 million in aggregate letters of credit and available borrowings under our revolving credit facility.

In addition, if we borrow more than $63.0 million, we are required to maintain a specified net leverage ratio.

See “Liquidity and Capital Resources—Sources of Liquidity—Debt Covenants” for a discussion of this financial covenant.

Adjusted EBITDA and Adjusted Free Cash Flow have limitations as analytical tools and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP.

We present Adjusted EBITDA because we believe this performance measure is frequently used by analysts, investors and other interested parties to evaluate companies in our industry and they facilitate comparisons of performance on a consistent basis across reporting periods.

Further, we believe this performance measure is helpful in highlighting trends in our operating results because it excludes items that are not indicative of our core operating performance.

Adjusted EBITDA is also a component of the financial covenant under our credit agreement that governs our ability to access more than $58.5 million in aggregate letters of credit and available borrowings under the $167.0 million revolving credit facility provided under our credit agreement (the “Revolving Credit Facility”).

In addition, if we borrow more than $58.5 million under the Revolving Credit Facility, we are required to maintain a specified net leverage ratio.

See “Liquidity and Capital Resources—Credit Agreement” below for a discussion of this financial covenant.

Adjusted EBITDA is not a GAAP-based measure and therefore, may have limitations as an analytical tool and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP.

We may in the future incur expenses similar to the adjustments in the presentation of Adjusted EBITDA.

In particular, we expect to incur meaningful share-based compensation expense in the future.

Other limitations include that Adjusted EBITDA and Adjusted Free Cash Flow do not reflect:

Other limitations include that Adjusted EBITDA do not reflect:

• all expenditures or future requirements for capital expenditures or contractual commitments;

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• the impact of earnings or charges resulting from matters we consider not to be reflective, on a recurring basis, of our ongoing operations.

In addition, Adjusted EBITDA and Adjusted Free Cash Flow may not be comparable to similarly titled measures used by other companies in our industry or across different industries.

In addition, Adjusted EBITDA is not a measure of financial performance under GAAP and may not be comparable to similarly titled measures used by other companies in our industry or across different industries.

Components of Results of Operations

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Cost of Revenue

Cost of revenue associated with our products primarily consists of manufacturing related costs incurred in the production process, including personnel and related costs, equity-based compensation expense, inventory write-downs, costs of materials, labor and overhead, packaging and delivery costs and allocated costs, including facilities, information technology, depreciation, and amortization of intangibles.

Cost of revenue associated with our products primarily consists of manufacturing related costs incurred in the production process, including personnel and related costs, stock-based compensation expense, inventory write-downs, costs of materials, labor and overhead, packaging and delivery costs and allocated costs, including facilities, information technology, depreciation, and amortization of intangibles.

Cost of revenue also includes adjustments for excess, obsolete or expired inventory, and idle capacity.

Cost of revenue associated with our services primarily consists of personnel and related costs, equity-based compensation expense, cost of materials and allocated costs, including facilities and information technology costs.

Cost of revenue associated with our services primarily consists of personnel and related costs, stock-based compensation expense, cost of materials and allocated costs, including facilities and information technology costs.

Costs of services were not material for the years ended December 31, 2024 and 2023.

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Selling, General and Administrative

Our selling, general and administrative expenses primarily consist of salaries, benefits and equity-based compensation expense for our employees in our commercial sales functions, marketing, executive, accounting and finance, legal and human resource functions as well as travel expenses, professional services fees, such as consulting, audit, tax and legal fees, general corporate costs and allocated costs, including facilities, information technology and amortization of intangibles.

Our selling, general and administrative expenses primarily consist of salaries, benefits and stock-based compensation expense for our employees in our commercial sales functions, marketing, executive, accounting and finance, legal and human resource functions as well as travel expenses, professional services fees, such as consulting, audit, tax and legal fees, general corporate costs and allocated costs, including facilities, information technology and amortization of intangibles.

We expect that our selling, general and administrative expenses will gradually increase in future periods, primarily due to expanding facilities footprint to support anticipated long-term growth in the business, costs incurred in increasing our presence globally, and increases in marketing activities to drive awareness and adoption of our products and services.

Research and Development

Research and development costs primarily consist of salaries, benefits, equity-based compensation expense, outside contracted services, cost of supplies, in-process research and development costs from asset acquisitions and allocated facilities costs for employees engaged in research and development of products and services.

Research and development costs primarily consist of salaries, benefits, stock-based compensation expense, outside contracted services, cost of supplies, in-process research and development costs from asset acquisitions and allocated facilities costs for employees engaged in research and development of products and services.

We expense all research and development costs in the period in which they are incurred.

Payment made prior to the receipt of goods or services to be used in research and development are recognized as prepaid assets until the goods are received or services are rendered.

We expect our research and development costs to increase to support our research and development efforts, including meeting our customers’ needs.

We expect our research and development costs will increase to support our research and development efforts, including meeting our customers’ needs.

Change in Estimated Fair Value of Contingent Consideration

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These adjustments are based on our assessment of the probability of achieving certain revenue thresholds and other probability factors.

Goodwill Impairment

Goodwill impairment is recorded in connection with the impairment testing of our goodwill, and is performed at least annually and more frequently if changes in facts and circumstances indicate that the fair value of our reporting units may be less than their carrying amount.

In connection with the preparation of our financial statements for the third and fourth quarters of 2024, we performed quantitative goodwill impairment tests which resulted in a total goodwill impairment of $166.2 million.

See Note 4 to our consolidated financial statements for additional information.

Restructuring

Restructuring costs primarily consist of severance and other employee-related costs, facility and other exit costs, professional fees and other restructuring costs resulting from the Cost Realignment Plan.

See Note 3 to our consolidated financial statements for additional information.

Other Income (Expense)

Interest Expense

Interest expense consist of interest costs and the related amortization of the debt discount and deferred issuance costs on our outstanding debt.

Interest expense also consists of changes in the fair value of our interest rate cap agreement.

Interest expense consists of interest costs and the related amortization of the debt discount and deferred issuance costs on our outstanding debt, changes in the fair value of our interest rate cap agreement, and interest costs on our finance lease liabilities.

Interest Income

Interest income consists of interest earned on our cash balances and short-term investments in money market funds held at financial institutions.

Loss on extinguishment of debt

Loss on extinguishment of debt represents the write-off of remaining unamortized debt issuance costs in connection with the voluntary partial prepayment of our Term Loan and the write-off of capitalized financing costs for the refinancing of our revolving credit facility.

Change in Payable to Related Parties Pursuant to the Tax Receivable Agreement

During the year ended December 31, 2023, we determined that making a payment under the Tax Receivable Agreement for subsequent years was not probable under Accounting Standards Codification 450 - Contingencies as a result of a valuation allowance having been recorded against our deferred tax assets, and therefore, that it is more likely than not that we will not

generate sufficient future taxable income to utilize related tax benefits that would result in a payment under the Tax Receivable Agreement.

During the years ended December 31, 2024 and 2023, we determined that making a payment under the Tax Receivable Agreement for subsequent years was not probable under Accounting Standards Codification 450 - Contingencies as a result of a valuation allowance having been recorded against our deferred tax assets, and therefore, that it is more likely than not that we will not generate sufficient future taxable income to utilize related tax benefits that would result in a payment under the Tax Receivable Agreement.

As a result, we remeasured the non-current portion of the liability due under the Tax Receivable Agreement to zero as of December 31, 2023 and recorded a corresponding gain on Tax Receivable Agreement liability remeasurement.

Income Tax Expense

There have been no changes to our position as of December 31, 2024.

Other Income (Expense)

Other income (expense) primarily consists of adjustments to the indemnification asset recorded in connection with the acquisition of MyChem, LLC, which was completed in January 2022.

Income Tax Expense (Benefit)

As a result of our ownership of LLC Units in Topco LLC, we are subject to U.S.

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During the year ended December 31, 2023, we recognized a full valuation allowance against our deferred tax assets and recorded a corresponding income tax expense.

There have been no changes to our position as of December 31, 2024.

Non-Controlling Interests

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Year Ended December 31,

2023 2022 Change

2024 2023 Year-Over-Year Change

(in thousands, except per share data)

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Change in estimated fair value of contingent consideration (2,003) (3,286) (39.0) %

Goodwill impairment

Restructuring (1)

(1,214) 6,466 *

Total operating expenses 494,802 320,593 54.3 %

(Loss) income from operations

Loss from operations

(235,617) (31,648) 644.5 %

Other income (expense), net 649,384 (22,744) (2955.2) %

Income before income taxes

Other (expense) income, net

(25,865) 649,384 (104.0) %

Income tax expense 756,111 60,809 1143.4 %

Net (loss) income $ (138,375) $ 490,663 (128.2) %

Net (loss) income attributable to non-controlling interests (19,346) 270,458 (107.2) %

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

(Loss) income before income taxes

(261,482) 617,736 (142.3) %

Net (loss) income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:

Basic $ (0.90) $ 1.67

Diluted $ (0.90) $ 1.67

Weighted average number of Class A common shares outstanding:

Basic 131,919 131,545

Diluted 131,919 255,323

Non-GAAP measures:

Adjusted EBITDA $ 65,309 $ 637,800

Adjusted Free Cash Flow $ 12,621 $ 586,052

Income tax (benefit) expense

(1,860) 756,111 (100.2) %

$ (259,622) $ (138,375) 87.6 %

Net loss attributable to non-controlling interests

(114,776) (19,346) 493.3 %

Net loss attributable to Maravai LifeSciences Holdings, Inc.

$ (144,846) $ (119,029) 21.7 %

Net loss per Class A common share attributable to Maravai LifeSciences Holdings, Inc., basic and diluted $ (1.05) $ (0.90)

Weighted average number of Class A common shares outstanding, basic and diluted 137,906 131,919

Adjusted EBITDA (Non-GAAP financial measure) $ 35,922 $ 65,309

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* Not meaningful

(1) Includes equity-based compensation expense as follows (in thousands, except percentages):

(1) Includes stock-based compensation expense as follows (in thousands, except percentages):

Year Ended December 31,

2023 2022 Change

2024 2023 Year-Over-Year Change

Cost of revenue $ 9,649 $ 7,324 31.7 %

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Restructuring

Total equity-based compensation expense $ 34,588 $ 18,670 85.3 %

(1,225) (101) 1112.9 %

Total stock-based compensation expense

$ 49,415 $ 34,588 42.9 %

Consolidated revenue by segment was as follows for the periods presented (in thousands, except percentages):

Year Ended December 31, Percentage of Revenue

2023 2022 Change 2023 2022

2024 2023 Year-Over-Year Change 2024 2023

Nucleic Acid Production $ 196,345 $ 224,769 (12.6) % 75.8 % 77.8 %

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Nucleic Acid Production revenue decreased from $224.8 million for the year ended December 31, 2023 to $196.3 million for the year ended December 31, 2024, representing a decrease of $28.4 million, or 12.6%.

The decrease in Nucleic Acid Production was primarily driven by decreased revenue from our proprietary CleanCap analogs as demand decreased from COVID-19 vaccine manufacturers.

For the year ended December 31, 2023, we estimate that approximately $60.8 million, or 54.7%, of our $111.1 million CleanCap revenue was a result of customer demand attributable to COVID-19 vaccines or other COVID-19 related commercial products or developmental programs.

For the year ended December 31, 2022, we estimate that approximately $599.8 million, or 90.8%, of our $660.5 million CleanCap revenue was a result of customer demand attributable to COVID-19 vaccines or other COVID-19 related commercial products or developmental programs.

The decrease in Nucleic Acid Production was primarily driven by lower demand for research and discovery products.

Biologics Safety Testing revenue decreased from $64.2 million for the year ended December 31, 2023 to $62.8 million for the year ended December 31, 2024, representing a decrease of $1.3 million, or 2.1%.

The decrease was primarily due to an industry-wide weak demand environment and slowdowns in biologics manufacturing, which continued to impact demand for our HCP ELISA kits.

The decrease was primarily driven by lower demand in the bioprocessing market, particularly in China.

Segment Information

Management has determined that adjusted earnings before interest, tax, depreciation and amortization is the profit or loss measure used to make resource allocation decisions and evaluate segment performance.

Adjusted EBITDA assists management in comparing the segment performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the core operations and, therefore, are not included in measuring segment performance.

Adjusted EBITDA assists management in comparing the segment performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect our core operations and, therefore, are not included in measuring segment performance.

We define Adjusted EBITDA as net (loss) income before interest, taxes, depreciation and amortization, certain non-cash items and other adjustments that we do not consider in our evaluation of ongoing operating performance from period to period.

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As of December 31, 2024, all of our long-lived assets were located within the United States.

The following schedule includes revenue and adjusted EBITDA for each of our reportable operating segments (in thousands):

The following schedules include revenue, expenses, and adjusted EBITDA for each of the Company’s reportable segments for the periods presented (in thousands):

Year Ended December 31, 2024

Nucleic Acid Production $ 224,769 $ 813,076

Biologics Safety Testing 64,179 69,932

Total reportable segments’ revenue 288,948 883,008

Intersegment eliminations (3) (7)

Total $ 288,945 $ 883,001

Segment adjusted EBITDA:

Nucleic Acid Production $ 82,658 $ 638,337

Biologics Safety Testing 46,908 54,841

Total reportable segments’ adjusted EBITDA 129,566 693,178

Nucleic Acid Production Biologics Safety Testing Total

$ 196,345 $ 62,840 $ 259,185

Cost of revenue (1)

Selling and marketing (1)

General and administrative (1)

Research and development (1)

Other segment items (2)

Adjusted EBITDA

50,813 43,841 $ 94,654

Reconciliation of total reportable segments’ adjusted EBITDA to loss before income taxes

Amortization (27,531)

Depreciation (20,852)

Interest expense (47,700)

Interest income 27,403

Corporate costs, net of eliminations (58,732)

Other adjustments:

Acquisition contingent consideration 2,003

Acquisition integration costs (5,559)

Stock-based compensation

Merger and acquisition related expenses (1,728)

Loss on extinguishment of debt (3,187)

Acquisition related tax adjustment (2,306)

Tax Receivable Agreement liability adjustment (40)

Goodwill impairment

Restructuring costs (3)

Other (2,330)

Loss before income taxes

Income tax benefit

Year Ended December 31, 2023

Nucleic Acid Production Biologics Safety Testing Total

Revenue $ 224,769 $ 64,176 $ 288,945

Intersegment revenues — 3 3

224,769 64,179 288,948

Elimination of intersegment revenues

Total consolidated revenues $ 288,945

Cost of revenue (1)

Selling and marketing (1)

General and administrative (1)

Research and development (1)

Other segment items (2)

Adjusted EBITDA 82,658 46,908 $ 129,566

Reconciliation of total reportable segments’ adjusted EBITDA to income before income taxes

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Acquisition integration costs (12,695)

Equity-based compensation (34,588) (18,670)

Stock-based compensation (34,588)

Merger and acquisition related expenses (4,392)

Financing costs — (1,078)

Acquisition related tax adjustment (1,293)

Tax Receivable Agreement liability adjustment 668,886

Chief Executive Officer transition costs (28) (2,426)

Restructuring costs (3)

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Income tax expense

Net (loss) income

$ (138,375) $ 490,663

Net loss $ (138,375)

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(1) Equity-based compensation benefit of $0.1 million related to forfeited equity awards in connection with the restructuring is included on the equity-based compensation line item.

During the year ended December 31, 2023 and 2022, intersegment revenue was immaterial between the Nucleic Acid Production and Biologics Safety Testing segments.

(1) Expenses are adjusted to remove the impact of certain items that management believes do not directly reflect our core operations, and, therefore, are not included in measuring segment performance.

(2) Other segment items for each reportable segment include realized and unrealized loss (gain) on foreign exchange transactions.

(3) For the years ended December 31, 2024 and 2023, stock-based compensation benefit of $1.2 million and $0.1 million, respectively, related to forfeited stock awards in connection with the Cost Realignment Plan is included on the stock-based compensation line item.

There was no intersegment revenue during the year ended December 31, 2024.

During the year ended December 31, 2023, intersegment revenue was immaterial between the Nucleic Acid Production and Biologics Safety Testing segments.

The intersegment sales and the related gross margin on inventory recorded at the end of the period are eliminated for consolidation purposes.

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There was no commission expense recognized for intersegment sales for the years ended December 31, 2024 and 2023.

Non-GAAP Financial Measures

Adjusted EBITDA

A reconciliation of net (loss) income to Adjusted EBITDA, which is a non-GAAP measure, is set forth below (in thousands):

Adjusted EBITDA (Non-GAAP Financial Measure)

A reconciliation of net loss to Adjusted EBITDA, which is a non-GAAP measure, is set forth below (in thousands):

Year Ended December 31,

Net (loss) income

$ (259,622) $ (138,375)

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Interest income (27,403) (27,727)

Income tax expense 756,111 60,809

Income tax (benefit) expense

(1,860) 756,111

EBITDA (192,802) 676,155

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Acquisition integration costs (2)

12,695 13,362

Equity-based compensation (3)

Stock-based compensation (3)

49,415 34,588

Merger and acquisition related expenses (4)

Financing costs (5)

Loss on extinguishment of debt (5)

Acquisition related tax adjustment (6)

Tax Receivable Agreement liability adjustment (7)

(668,886) 4,102

Chief Executive Officer transition costs (8)

Goodwill impairment (8)

Restructuring costs (9)

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(1) Refers to the change in the estimated fair value of contingent consideration related to completed acquisitions.

(2) Refers to incremental costs incurred to execute and integrate completed acquisitions, and retention payments in connection with these acquisitions.

(3) Refers to non-cash expense associated with equity-based compensation.

(2) Refers to incremental costs incurred to execute and integrate completed acquisitions, including retention payments related to integration that were negotiated specifically at the time of, the Company’s acquisition of MyChem, LLC (“MyChem”) and Alphazyme, LLC (“Alphazyme”), which were completed in January 2022 and January 2023, respectively.

These retention payments arise from the Company’s agreements executed in connection with its acquisitions of MyChem and Alphazyme and provide incremental financial incentives, over and above recurring compensation, to ensure the employees of these companies remain present and participate in integration of the acquired businesses during the integration and knowledge transfer periods.

The Company agreed to pay certain employees of Alphazyme retention payments totaling $9.3 million as of various dates but primarily through December 31, 2025, as long as these individuals continue to be employed by the Company.

The Company agreed to pay the sellers of MyChem retention payments totaling $20.0 million as of the second anniversary of the closing of the acquisition date as long as two senior employees (who were also the sellers of MyChem) continue to be employed by TriLink.

The Company considers the payment of these retention payments as probable and is recognizing compensation expense related to these payments in the post-acquisition period ratably over the service period.

Retention payment expenses were $5.2 million (MyChem $1.8 million;

Alphazyme $3.4 million) and $11.9 million (MyChem $9.3 million;

Alphazyme $2.6 million) for the years ended December 31, 2024 and 2023, respectively.

Retention expenses for MyChem concluded in the first quarter of 2024, and following the payments in the first quarter of 2024, there are no further retention expenses payable for MyChem.

The remaining retention accrual for Alphazyme is $3.4 million, expected to be accrued ratably each quarter through December 31, 2025, with payments expected to be made in the first quarter of 2026.

There are no further cash-based retention payments planned, other than those disclosed above, for acquisitions completed as of December 31, 2024.

(3) Refers to non-cash expense associated with stock-based compensation.

(4) Refers to diligence, legal, accounting, tax and consulting fees incurred associated with acquisitions that were pursued but not consummated.

(5) Refers to transaction costs related to the refinancing of our long-term debt that are not capitalizable.

(6) Refers to non-cash expense associated with adjustments to the carrying value of the indemnification asset recorded in connection with the acquisition of MyChem, LLC (“MyChem”), which was completed in January 2022.

(5) Refers to the non-cash loss incurred on partial extinguishment of debt primarily associated with the voluntary prepayment on the Term Loan.

(6) Refers to non-cash expense associated with adjustments to the carrying value of the indemnification asset recorded in connection with the acquisition of MyChem.

(7) For the year ended December 31, 2024, refers to the adjustment of the Tax Receivable Agreement liability primarily due to changes in our estimated state apportionment and the corresponding change of our estimated state tax rate.

For the year ended December 31, 2023, refers to the adjustment of our Tax Receivable Agreement liability primarily due to remeasuring the non-current portion of the liability to zero as we no longer consider the payments under the agreement to be probable.

For the year ended December 31, 2022, refers to the adjustment of our Tax Receivable Agreement liability primarily due to changes in our estimated state apportionment and the corresponding change of our estimated state tax rate.

(8) Refers to legal fees and other costs associated with the Chief Executive Officer leadership transition that occurred during July 2023.

(8) Refers to the goodwill impairment recorded for our Nucleic Acid Production segment.

(9) Refers to restructuring costs associated with the Cost Realignment Plan, which was implemented in November 2023.

Equity-based compensation benefit of $0.1 million related to forfeited equity awards in connection with the restructuring is included on the equity-based compensation line item.

For the years ended December 31, 2024 and 2023, stock-based compensation benefit of $1.2 million and $0.1 million, respectively, related to forfeited equity awards in connection with the restructuring is included in the stock-based compensation line item.

(10) For the year ended December 31, 2024, refers to the loss on abandoned projects, severance payments, inventory step-up charges and certain other adjustments in connection with the acquisition of Alphazyme, and other non-recurring costs.

For the year ended December 31, 2023, refers to severance payments, legal settlement amounts, inventory step-up charges in connection with the acquisition of Alphazyme, certain working capital and other adjustments related to the acquisition of MyChem, and other non-recurring costs.

For the year ended December 31, 2022, refers to the loss recognized during the period associated with certain working capital and other adjustments related to the sale of Vector Laboratories, Inc., which was completed in September 2021, and the loss incurred on extinguishment of debt.

Adjusted Free Cash Flow

A reconciliation of Adjusted Free Cash Flow, which is a non-GAAP measure that we define as Adjusted EBITDA less capital expenditures, is set forth below (in thousands):

Year Ended December 31,

Adjusted EBITDA $ 65,309 $ 637,800

Capital expenditures (1)

(52,688) (51,748)

Adjusted Free Cash Flow $ 12,621 $ 586,052

____________________

(1) We define capital expenditures as:

(i) purchases of property and equipment which are included in cash flows from investing activities, offset by government funding received;

and (ii) construction costs determined to be lessor improvements recorded as prepaid lease payments and right-of-use assets, offset by government funding received.

We revised our capital expenditures definition in the quarter ended March 31, 2023 to exclude the portions in accounts payable and accrued expenses.

Operating Expenses

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Year Ended December 31, Percentage of Revenue

2023 2022 Change 2023 2022

2024 2023 Year-Over-Year Change 2024 2023

Cost of revenue $ 150,876 $ 148,743 1.4 % 58.2 % 51.5 %

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Change in estimated fair value of contingent consideration (2,003) (3,286) (39.0) % (0.8) % (1.1) %

Goodwill impairment 166,151 — * 64.1 % — %

Restructuring (1,214) 6,466 * (0.5) % 2.2 %

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Cost of Revenue

Cost of revenue decreased by $20.2 million from $169.0 million for the year ended December 31, 2022 to $148.7 million for the year ended December 31, 2023, or 12.0%.

The decrease in cost of revenue compared to the prior period was primarily attributable to a decrease of $42.2 million in direct product costs driven by overall decreased revenues.

This was partially offset by an increase of $14.3 million in personnel costs primarily driven by retention payment accruals associated with the acquisition of MyChem, additional headcount to support expanded manufacturing capacity and additional headcount related to the acquisition of Alphazyme, an increase of $6.0 million in depreciation and amortization expense primarily due to new equipment and newly acquired intangible assets, and an increase of $1.6 million in facilities costs driven by new facilities.

Cost of revenue increased by $2.2 million from $148.7 million for the year ended December 31, 2023 to $150.9 million for the year ended December 31, 2024, or 1.4%.

The increase in cost of revenue was primarily driven by increases of $3.0 million in facility costs, $2.3 million in stock-based compensation, $1.8 million in supplies and materials, $1.6 million in depreciation expense driven by new facilities and an increase in assets placed in service during the current year, and $0.7 million related to the loss on abandoned projects.

These increases were partially offset by a decrease of $7.7 million due to lower personnel costs driven by the Cost Realignment Plan and a decrease in retention payment accruals associated with the acquisition of MyChem, which was completed and paid for during the first quarter of 2024.

Gross profit decreased by $31.9 million from $140.2 million for the year ended December 31, 2023 to $108.3 million for the year ended December 31, 2024.

The decrease in gross profit margin as a percentage of sales was primarily attributable to a decrease in volume, unfavorable product mix shift, an overall increase in the cost of revenue as a percentage of sales as the result of higher labor and facility costs, and depreciation and amortization.

The decrease in gross profit margin as a percentage of sales was primarily attributable to higher facility costs, stock-based compensation expense, supplies and materials, and depreciation expense as a percentage of sales.

Selling, General and Administrative

Selling, general and administrative expenses increased by $10.4 million from $151.4 million for the year ended December 31, 2023 to $161.8 million for the year ended December 31, 2024, or 6.9%.

The increase was primarily driven by an increase of $22.7 million in personnel costs largely due to additional headcount from the acquisition of Alphazyme and incremental equity-based compensation expense.

The increase was primarily driven by increases of $11.4 million in stock-based compensation expense and $5.9 million in depreciation expense driven by new facilities and an increase in assets placed in service during the current year.

These were partially offset by a decrease of $6.4 million in professional service fees primarily driven by lower expenses related to merger and acquisitions and contract services, and a decrease of $1.1 million in marketing expenses.

Research and Development

Research and development expenses decreased by $1.1 million from $18.4 million for the year ended December 31, 2022 to $17.3 million for the year ended December 31, 2023, or 5.9%.

The decrease in expenses compared to the prior period was primarily driven by a decrease of $1.8 million in personnel costs largely due to certain retention payment accruals now being included in cost of revenue.

This is partially offset by an increase of $0.6 million in facilities costs driven by new facilities.

Research and development expenses increased by $1.9 million from $17.3 million for the year ended December 31, 2023 to $19.2 million for the year ended December 31, 2024, or 11.2%.

The increase in expenses compared to the prior year was primarily driven by increases of $2.3 million in stock-based compensation expense, $1.3 million in professional service fees for contract services related to research and development studies, $1.0 million in supplies and materials, and $0.5 million in depreciation expense.

These were partially offset by a decrease of $3.1 million in personnel expenses primarily relating to a decrease in retention payment accruals associated with the acquisition of MyChem, which was completed and paid for during the first quarter of 2024.

Change in Estimated Fair Value of Contingent Consideration

The change in estimated fair value of contingent consideration changed by $4.5 million from $7.8 million for the year ended December 31, 2022 to $3.3 million for the year ended December 31, 2023, or 57.9%.

The changes were due to the decreases in estimated fair value of the liability for the contingent payments associated with the acquisitions of Alphazyme and MyChem.

These were due to changes in estimates associated with revenue projections relative to defined revenue targets or thresholds that would trigger contingent payments per the Securities Purchase Agreement between the Company and sellers of Alphazyme and the Securities Purchase Agreement between the Company and the sellers of MyChem.

See Notes 2 and 5 to our consolidated financial statements for additional information.

Restructuring

Restructuring costs for the year ended December 31, 2023 relate to the Cost Realignment Plan, which was implemented in November 2023.

These include severance and other employee-related costs of $4.3 million, offset by a $0.1 million equity-based compensation benefit, facility and other exit costs of $2.0 million, and professional fees and other associated costs of $0.3 million.

The decrease in change in estimated fair value of contingent consideration of $2.0 million and $3.3 million for the years ended December 31, 2024 and 2023, respectively, were due to decreases in estimated fair value of the liability for the contingent payments associated with the acquisition of Alphazyme.

Goodwill Impairment

As of December 31, 2024, we revised our long-term forecast to reflect lower projected near-term revenues due to lower demand in research and discovery products within our Nucleic Acid Production business.

As a result, we recorded goodwill impairment of $154.2 million during the year ended December 31, 2024, which was the entire goodwill balance at the TriLink reporting unit.

In connection with preparing our financial statements for the year ended December 31, 2024, we tested our remaining reporting units for potential goodwill impairment in response to impairment indicators identified during our forecasting process.

These indicators included a downward revision of our long-term forecast to reflect lower projected near-term revenues due to lower demand in enzyme products within our Nucleic Acid Production business, as well as the sustained decline in stock price.

As a result, we recorded goodwill impairment of $11.9 million during the year ended December 31, 2024.

See Note 4 to our consolidated financial statements for additional information.

Restructuring

Restructuring costs (benefit) for the years ended December 31, 2024 and 2023 relate to the Cost Realignment Plan, which was implemented in November 2023.

For the year ended December 31, 2024, restructuring costs (benefit) primarily consists of the stock-based compensation benefit recognized for the forfeiture of stock awards upon the termination of certain impacted employees.

For the year ended December 31, 2023, restructuring costs include severance and other employee-related costs of $4.3 million, offset by a $0.1 million stock-based compensation benefit, facility and other exit costs of $2.0 million, and professional fees and other associated costs of $0.3 million.

Other Income (Expense)

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Year Ended December 31, Percentage of Revenue

2023 2022 Change 2023 2022

2024 2023 Year-Over-Year Change 2024 2023

Interest expense $ (47,700) $ (45,892) 3.9 % (18.4) % (15.9) %

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(2,341) (1,337) 75.1 % (0.9) % (0.5) %

Total other income (expense), net $ 649,384 $ (22,744) * 224.7 % (2.6) %

Total other (expense) income, net

$ (25,865) $ 649,384 * (10.0) % 224.7 %

____________________

* Not meaningful

Other expense was $22.7 million for the year ended December 31, 2022 compared to Other income of $649.4 million for the year ended December 31, 2023, representing a change of $672.1 million.

The overall change in Other income (expense) was primarily attributable to a $668.9 million gain related to the payable to related parties pursuant to the Tax Receivable Agreement as we concluded that it was not probable that we will be able to realize the remaining tax benefits based on estimates of future taxable income.

This was partially offset by a $0.9 million increase in Other expense relating to the indemnification asset recorded in connection with the acquisition of MyChem.

Other income was $649.4 million for the year ended December 31, 2023 compared to Other expense of $25.9 million for the year ended December 31, 2024, representing a change of $675.2 million.

The overall change in Other (expense) income was primarily attributable to the prior year $668.9 million gain related to the payable to related parties pursuant to the Tax Receivable Agreement as we concluded that it was not probable that we will be able to realize the remaining tax benefits based on estimates of future taxable income.

The change is also driven by a loss on extinguishment of debt of $3.2 million primarily

driven by the write-off of pre-existing deferred financing costs as a result of the voluntary prepayment on the Term Loan, a $1.8 million increase in interest expense, and a $1.0 million increase in Other expense relating to the indemnification asset recorded in connection with the acquisition of MyChem.

Relationship with GTCR, LLC (“GTCR”)

As of December 31, 2023, investment entities affiliated with GTCR collectively controlled approximately 56% of the voting power of our common stock, which enables GTCR to control the vote of all matters submitted to a vote of our shareholders and to control the election of members of the Board and all other corporate decisions.

During the years ended December 31, 2023 and 2022, the Company made distributions of $9.6 million and $150.2 million, respectively, for tax liabilities to MLSH 1.

We are also a party to a Tax Receivable Agreement, or TRA, with MLSH 1, who is primarily owned by GTCR, and MLSH 2 (see Note 14 to our consolidated financial statements).

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 entities acquired from MLSH 1 and MLSH 2 in connection with the Organizational Transactions, Topco LLC and subsidiaries of Topco LLC that existed prior to the IPO, 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”).

As of December 31, 2024, investment entities affiliated with GTCR collectively controlled approximately 52% of the voting power of our common stock, which enables GTCR to control the vote of all matters submitted to a vote of our shareholders and to control the election of members of our Board of Directors and all other corporate decisions.

During the years ended December 31, 2024 and 2023, we made cash distributions of $0.5 million and $9.6 million, respectively, for tax liabilities to MLSH 1, which is controlled by investment entities affiliates with GTCR and is the only holder of LLC Units other than us and our wholly owned subsidiaries.

We are also a party to a Tax Receivable Agreement, or TRA, with MLSH 1, which is primarily owned by GTCR, and MLSH 2 (see Note 14 to our consolidated financial statements).

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 entities acquired from MLSH 1 and MLSH 2 in connection with the Organizational Transactions, Topco LLC and subsidiaries of Topco LLC that existed prior to the IPO, 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”).

Payment obligations under the TRA are not conditioned upon any Topco LLC unitholders maintaining a continued ownership interest in us or Topco LLC, and the rights of MLSH 1 and MLSH 2 under the TRA are assignable.

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This determination was based on our estimate of taxable income for the year ended December 31, 2024.

As of December 31, 2024, we did not have a current liability under the TRA.

As of December 31, 2023, our current liability under the TRA was $7.1 million.

As of December 31, 2023, the Company has derecognized the remaining non-current liability under the TRA after concluding it was not probable that the Company will be able to realize the remaining tax benefits based on estimates of future taxable income.

There have been no changes to our position as of December 31, 2024.

The estimation of liability under the TRA is by its nature imprecise and subject to significant assumptions regarding the amount, character, and timing of the taxable income in the future.

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As of December 31, 2024, we had cash and cash equivalents of $322.4 million and retained earnings of $140.9 million.

We had a net loss of $138.4 million for the fiscal year ended December 31, 2023.

We also had positive cash flow from operations of $126.2 million.

We have relied on revenue derived from product and services sales, and equity and debt financings to fund our operations to date.

We had positive cash flow from operations of $7.5 million.

We have historically relied on revenue derived from product and services sales, and proceeds from equity and debt financings to fund our operations to date.

Our principal uses of cash have been to fund operations, acquisitions and capital expenditures, as well as make tax distributions to MLSH 1, make TRA payments to MLSH 1 and MLSH 2 and make interest payments and mandatory principal payments on our long-term debt.

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We believe our cash on hand, cash generated from operations and continued access to our credit facilities, will be sufficient to satisfy our cash requirements over the next 12 months and beyond.

We expect to spend approximately $2.8 million in restructuring costs primarily during the first quarter of 2024 associated with the Cost Realignment Plan using existing cash on hand.

As a result of our ownership of LLC Units in Topco LLC, the Company is subject to U.S.

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Due to the uncertainty of various factors, we cannot precisely quantify the likely tax benefits we will realize as a result of LLC Unit exchanges and the resulting amounts we are likely to pay out to LLC Unitholders of Topco LLC pursuant to the TRA.

Assuming no changes in the relevant tax law, we expect that probable future payments under the TRA relating to the purchase by the Company of LLC Units from MLSH 1 and the corresponding tax attributes to be approximately $7.1 million.

This determination is based on our estimate of taxable income for the year ended December 31, 2023.

During the year ended December 31, 2023, we determined that making a payment under the non-current

portion of the TRA was not probable under Accounting Standards Codification 450 - Contingencies since a valuation allowance has been recorded against our deferred tax assets and we do not believe we will generate sufficient future taxable income to utilize related tax benefits and result in a payment under the TRA.

The foregoing numbers are estimates and the actual payments could differ materially.

We expect to fund these payments using cash on hand and cash generated from operations.

We do not expect any probable future payments under the TRA relating to the purchase by the Company of LLC Units from MLSH 1 and the corresponding tax attributes.

This determination is based on our taxable income for the year ended December 31, 2024.

During the years ended December 31, 2024 and 2023, we determined that making a payment under the non-current portion of the TRA was not probable under Accounting Standards Codification 450 - Contingencies since a valuation allowance has been recorded against our deferred tax assets and we do not believe we will generate sufficient future taxable income to utilize related tax benefits and result in a payment under the TRA.

If we had determined that making a payment under the TRA and generating sufficient future taxable income was probable, we would have also recorded a liability pursuant to the TRA, net of current portion, of approximately $683.8 million in the consolidated balance sheet.

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As a result of a change of control, material breach, or our election to terminate the TRA early, (1) we could be required to make cash payments to MLSH 1 and MLSH 2 that are greater than the specified percentage of the actual benefits we ultimately realize in respect of the tax benefits that are subject to the TRA, and (2) we will be required to make an immediate cash payment equal to the present value of the anticipated future tax benefits that are the subject of the TRA, which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits.

In these situations, our obligations under the TRA could have a material adverse effect on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combination, or other changes of control.

There can be no assurance that we will be able to finance our obligations under the TRA.

In addition to payments to be made under the TRA, we are also required to make tax distributions to MLSH 1 pursuant to the LLC Operating Agreement for the portion of income passing through to them from Topco LLC.

During the years ended December 31, 2023 and 2022, the Company made distributions of $9.6 million and $150.2 million, respectively, for tax liabilities to MLSH 1 under this agreement.

During the years ended December 31, 2024 and 2023, we made cash distributions of $0.5 million and $9.6 million, respectively, for tax liabilities to MLSH 1 under this agreement.

Credit Agreement

The Credit Agreement 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”), provides us with a term-loan facility (the “Term Loan”) totaling $600.0 million and a revolving credit facility (the “Revolving Credit Facility”) of $180.0 million for letters of credit and loans to be used for working capital and other general corporate financing purposes.

Borrowings under the Credit Agreement are unconditionally guaranteed by Topco LLC, along with 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.

In January 2022, the Company entered into an amendment (the “Amendment”) to refinance the term loan and to replace London Interbank Offered Rate (“LIBOR”) with a Term Secured Overnight Financing Rate (“SOFR”) based rate.

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

The mandatory prepayment shall be reduced to 25% or 0% of the calculated excess cash flow if the Company’s first lien net leverage ratio was equal to or less than 4.75:1.00 or 4.25:1.00, respectively;

however, no prepayment is required to the extent excess cash flow calculated for the respective period is equal to or less than $10.0 million.

As of December 31, 2023, our first lien net leverage ratio was less than 4.25:1.00.

Thus, a mandatory prepayment on the Term Loan out of excess cash flow was not required.

The Term Loan became repayable in quarterly payments of $1.4 million beginning in March 2022, with all remaining outstanding principal due in October 2027.

The Term Loan includes prepayment provisions that allow us, at our option, to repay all or a portion of the principal amount at any time.

The Revolving Credit Facility allows us to repay and borrow from time to time until October 2025, at which time all amounts borrowed must be repaid.

Maravai Intermediate Holdings, LLC (“Intermediate”), a wholly-owned subsidiary of Topco LLC, along with certain of its subsidiaries (together with Intermediate, the “Borrowers”) are parties to a credit agreement (as amended, the “Credit Agreement”), which provides for a $600.0 million term loan facility, maturing October 2027 (the “Term Loan”) and a $167.0 million revolving credit facility, maturing October 2029 (subject to springing maturity provisions based on the maturity of the Term Loan) (the “Revolving Credit Facility”).

Borrowings under the Credit Agreement bear interest at a variable rate based on Term Secured Overnight Financing Rate (“SOFR”) plus an applicable interest rate margin.

As of December 31, 2024, the interest rate on the Term Loan was 7.62% per annum.

There were no outstanding borrowings under the Revolving Credit Facility as of December 31, 2024.

The Revolving Credit Facility also provides availability for the issuance of letters of credit up to an aggregate limit of $20.0 million.

As of December 31, 2024, the Company had a $0.5 million outstanding letter of credit as security for a lease agreement, which reduced the availability for the future issuance of letters of credit under the Revolving Credit Facility to $19.5 million.

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 Term Loan requires mandatory quarterly principal payments of $1.4 million, which began in March 2022, and all remaining outstanding principal is due on maturity in October 2027.

The Term Loan includes prepayment provisions that allow the Company, at our option, to repay all or a portion of the outstanding principal at any time.

In December 2024, the Company voluntarily pre-paid, using cash on hand, $228.0 million of aggregate principal amount of the Term Loan.

There were no prepayment penalties associated with this prepayment of principal.

As a result of the prepayment, the Company recorded a loss on partial extinguishment of debt of $3.0 million related to the write-off of pre-existing deferred financing costs.

The Revolving Credit Facility allows the Company to repay and borrow from time to time until its maturity date, at which time all amounts borrowed must be repaid.

Subject to certain exceptions and limitations, we are required to repay borrowings under the Term Loan and Revolving Credit Facility with the proceeds of certain occurrences, such as the incurrence of debt, certain equity contributions and certain asset sales or dispositions.

Accrued interest under the Credit Agreement is payable by us (a) quarterly in arrears with respect to base rate loans, (b) at the end of each interest rate period (or at each three-month interval in the case of loans with interest periods greater than three months) with respect to Term SOFR rate loans, (c) on the date of any repayment or prepayment and (d) at maturity (whether by acceleration or otherwise).

An annual commitment fee is applied to the daily unutilized amount under the Revolving Credit Facility at 0.375% per annum, with one stepdown to 0.25% per annum based on Intermediate’s first lien net leverage ratio.

Debt Covenants

The Credit Agreement includes financial covenants.

One financial covenant is a consolidated first lien coverage ratio measured as of the last day of each fiscal quarter.

Another requires that, if as of the end of any fiscal quarter the aggregate amount of

letters of credit obligations and borrowings under the Revolving Credit Facility outstanding as of the end of such fiscal quarter (excluding cash collateralized letters of credit obligations and letter of credit obligations in an aggregate amount not in excess of $5.0 million at any time outstanding and for the first four fiscal quarters ending after October 2020, borrowings of revolving credit loans made before October 2020) exceeds 35% of the aggregate amount of all Revolving Credit Commitments in effect as of such date, then the net leverage ratio of Intermediate may not be greater than 8.00 to 1.00.

For purposes of this covenant, the net leverage ratio is calculated by dividing outstanding first lien indebtedness (net of cash) by Adjusted EBITDA over the preceding four fiscal quarters.

The Credit Agreement also contains negative and affirmative covenants in addition to the financial covenant, including covenants that restrict our ability to, among other things, incur or prepay 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.

The Credit Agreement contains certain events of default, including, without limitation, nonpayment of principal, interest or other obligations, violation of the covenants, insolvency, court ordered judgments and certain changes of control.

The Credit Agreement also requires the Company to provide audited consolidated financial statements to the lenders no later than 120 days after year-end.

As of December 31, 2023, we were in compliance with these covenants.

As of December 31, 2023, interest rate on the Term Loan was 8.40%.

The Credit Agreement requires that we make 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% of the calculated excess cash flow if the Company’s 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 the respective period is equal to or less than $10.0 million.

As of December 31, 2024, the Company’s first lien net leverage ratio was less than 4.25:1.00.

Thus, a mandatory prepayment on the Term Loan out of our excess cash flow was not required.

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

Additionally, the Credit Agreement requires us to maintain a certain net leverage ratio if the outstanding debt balance on the Revolving Credit Facility exceeds 35.0% of the aggregate amount of available credit of $167.0 million, or $58.5 million.

The Company was in compliance with these covenants as of December 31, 2024.

Tax Receivable Agreement

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The TRA provides for the payment by us to MLSH 1 and MLSH 2, collectively, of 85% of the amount of certain tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of the Organizational Transactions, IPO and any subsequent purchases or exchanges of LLC Units of Topco LLC.

As of December 31, 2023, our current liability under the TRA was $7.1 million, representing 85% of the calculated tax savings we expect to utilize for the year ended December 31, 2023.

During the year ended December 31, 2023, we recognized a gain of $668.9 million, in connection with a TRA liability adjustment due to remeasuring the non-current portion of the liability to zero as we no longer consider the payments under the agreement to be probable.

We recognize the amount of TRA payments expected to be paid within the next 12 months and classify this amount as current.

This determination was based on our estimate of taxable income for the year ended December 31, 2024.

As of December 31, 2024, we did not have a current liability under the TRA.

We may record additional liabilities under the TRA when LLC Units are exchanged in the future and as our estimates of the future utilization of the Tax Attributes, net operating losses and other tax benefits change.

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Generally, any late payments will continue to accrue interest at LIBOR (or a Replacement Rate, as applicable) plus 500 basis points until such payments are made.

Given the cessation of LIBOR, we have transitioned to the Secured Overnight Financing Rate (“SOFR”) as the applicable Replacement Rate as allowable under the Tax Receivable Agreement.

Given the cessation of LIBOR, we transitioned to SOFR as the applicable Replacement Rate as allowable under the TRA.

The payment obligations under the TRA are obligations of Maravai LifeSciences Holdings, Inc.

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We anticipate funding ordinary course payments under the TRA from cash flow from operations of Topco LLC and its subsidiaries, available cash and/or available borrowings under the Credit Agreement.

During the year ended December 31, 2023, we determined that making a payment under the non-current portion of the TRA was not probable under Accounting Standards Codification 450 - Contingencies as a result of a valuation allowance having been recorded against our deferred tax assets, and therefore, that it is more likely than not that we will not generate sufficient future taxable income to utilize related tax benefits that would result in a payment under the TRA.

future taxable income to utilize related tax benefits that would result in a payment under the TRA.

There have been no changes to our position as of December 31, 2024.

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Financing activities (235,712) (61,090)

Net (decrease) increase in cash and cash equivalents

Net decrease in cash and cash equivalents

$ (252,563) $ (57,176)

Operating Activities

Net cash provided by operating activities for the year ended December 31, 2023 was $126.2 million, which was primarily attributable to a net cash inflow from the change in our operating assets and liabilities of $97.8 million, non-cash depreciation and amortization of $40.3 million, non-cash amortization of operating lease right-of-use assets of $8.5 million, non-cash amortization of deferred financing costs of $2.9 million, non-cash equity-based compensation of $34.6 million, and non-cash deferred income taxes of $754.9 million.

These were partially offset by a net loss of $138.4 million, non-cash gain on the change in estimated fair value of contingent consideration of $3.3 million, and non-cash gain on the revaluation of liabilities under the TRA of $668.9 million.

Net cash provided by operating activities for the year ended December 31, 2022 was $536.0 million, which was primarily attributable to a net income of $490.7 million, non-cash depreciation and amortization of $31.8 million, non-cash amortization of operating lease right-of-use assets of $6.3 million, non-cash amortization of deferred financing costs of $2.8 million, non-cash equity-based compensation of $18.7 million, non-cash deferred income taxes of $42.3 million, and non-cash loss on the revaluation of liabilities under the TRA of $4.1 million.

These were partially offset by a non-cash loss on the change in estimated fair value of contingent consideration $7.8 million, and a net cash outflow from the change in our operating assets and liabilities of $45.1 million, which is net of government funding of $17.0 million.

The net cash outflow from the change in our operating assets includes $13.4 million relating to an increase in prepaid lease payments for Flanders I (as defined in Note 7 to our consolidated financial statements).

Net cash provided by operating activities for the year ended December 31, 2024 was $7.5 million, which was primarily attributable to non-cash depreciation and amortization of $48.4 million, non-cash amortization of operating lease right-of-use assets of $8.5 million, non-cash amortization of deferred financing costs of $2.9 million, non-cash stock-based compensation of $49.4 million, non-cash loss on extinguishment of debt of $3.2 million, non-cash goodwill impairment of $166.2 million, and non-cash acquisition related tax adjustment of $2.3 million.

These were partially offset by a net loss of $259.6 million, net cash outflow from the change in our operating assets and liabilities of $12.6 million, and non-cash gain on the change in estimated fair value of contingent consideration of $2.0 million.

Investing Activities

Net cash used in investing activities for the year ended December 31, 2023 was $122.3 million, which was primarily comprised of $69.8 million for the net cash consideration paid for the acquisition of Alphazyme and cash outflows of $65.6 million for property and equipment purchases.

These were partially offset by proceeds from government assistance allocated to property and equipment of $12.9 million.

Net cash used in investing activities for the year ended December 31, 2022 was $267.6 million, which was primarily comprised of $239.0 million for the net cash consideration paid for the acquisition of MyChem, net cash outflows of $17.1 million for property and equipment purchases, and $13.3 million of prepaid lease payments for Flanders II (as defined in Note 7 to our consolidated financial statements).

Net cash used in investing activities for the year ended December 31, 2024 was $24.3 million, which was primarily comprised of cash outflows of $29.7 million for property and equipment purchases, offset by proceeds from government assistance allocated to property and equipment of $7.1 million, and cash outflows of $1.5 million for the purchase of technology.

Financing Activities

Net cash used in financing activities for the year ended December 31, 2023 was $61.1 million, which was primarily attributable to $42.2 million of payments to MLSH 1 and MLSH 2 pursuant to the TRA, a $9.7 million payment of acquisition consideration holdback relating to the acquisition of MyChem, $9.6 million of distributions for tax liabilities to non-controlling interest holders, required pursuant to the terms of the LLC Operating Agreement, and $5.4 million of principal repayments of long-term debt.

This was partially offset by proceeds from derivative instruments of $6.2 million.

Net cash used in financing activities for the year ended December 31, 2022 was $187.5 million, which was primarily attributable to $150.2 million of distributions for tax liabilities to non-controlling interest holders, required pursuant to the terms of the LLC Operating Agreement, $34.2 million of payments to MLSH 1 and MLSH 2 pursuant to the TRA, and $13.9 million of principal repayments of long-term debt.

This was partially offset by proceeds from borrowings of long-term debt of $8.5 million.

Net cash used in financing activities for the year ended December 31, 2024 was $235.7 million, which was primarily attributable to $234.4 million of principal repayments of long-term debt, which included the voluntary principal prepayment on the Term Loan.

This was also driven by $7.1 million of payments to MLSH 1 and MLSH 2 pursuant to the TRA, $2.1 million of tax payments for shares withheld under employee equity plans, net of proceeds from the issuance of shares of our Class A common stock, $1.2 million of payments for financing costs incurred for long-term debt, $0.6 million of payments of finance lease liabilities, and $0.5 million of cash distributions for tax liabilities to MLSH 1, as required pursuant to the terms of the LLC Operating Agreement.

These were partially offset by proceeds from interest rate cap agreement of $9.3 million.

Capital Expenditures

We define capital expenditures as:

(i) purchases of property and equipment which are included in cash flows from investing activities, offset by government funding received;

and (ii) construction costs determined to be lessor improvements recorded as prepaid lease payments and right-of-use assets, offset by government funding received.

Capital expenditures for the year ended December 31, 2024 totaled $22.5 million, which is net of government funding of $7.1 million.

Capital expenditures for the year ending December 31, 2024 are projected to be in the range of $30.0 million to $35.0 million, which is net of anticipated government funding recognized.

This includes leasehold improvements and equipment primarily for the Flanders San Diego Facility.

Capital expenditures for the year ending December 31, 2025 are projected to be in the range of $15.0 million to $20.0 million, of which $10.0 million relates to the expansion of our enzyme manufacturing capabilities.

Contractual Obligations and Commitments

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299,680 5,440 294,240 — —

TRA payments (4)

7,069 7,069 — — —

Unconditional purchase obligations (4)

989 619 370 — —

MyChem retention payments (6)

20,000 20,000 — — —

Total $ 388,819 $ 20,085 $ 321,020 $ 25,965 $ 21,749

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See Note 8 to our consolidated financial statements for additional information.

(3) Represents long-term debt principal maturities, excluding interest.

(3) Represents long-term debt principal maturities, excluding interest and unamortized debt issuance costs.

See Note 10 to our consolidated financial statements for additional information.

(4) Reflects the estimated timing of the current TRA liability payment as of December 31, 2023.

See "Risk Factors-Risks Related to Our Organizational Structure" and Note 14 to our consolidated financial statements for additional information regarding our liability under the TRA.

(4) Represents firm purchase commitments to our suppliers.

See Note 9 to our consolidated financial statements for additional information.

(6) Represents certain payments to the sellers of MyChem as of the second anniversary of the closing of the acquisition date as long as they continue to be employed by TriLink.

See Note 2 to our consolidated financial statements for additional information.

Tax distributions are required under the terms of the Topco LLC Agreement.

Cash distributions for owner tax liabilities are required under the terms of the Topco LLC Agreement.

As of December 31, 2024, we have made tax distributions equal to the estimated obligation due for 2024.

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As of December 31, 2024, our first lien net leverage ratio was less than 4.25:1.00.

In connection with our acquisition of Alphazyme, we may be required to make additional payments of up to $75.0 million to the sellers of Alphazyme dependent upon meeting or exceeding defined revenue targets during fiscal years 2023 through 2025.

We may also be required to make certain payments of $9.3 million to its sellers and certain employees as of various dates but primarily through December 31, 2025 as long as these individuals continue to be employed by the Company.

In connection with our acquisition of Alphazyme, which was completed in January 2023, we were initially required to make contingent payments of up to $75.0 million to the sellers of Alphazyme dependent upon Alphazyme meeting or exceeding defined revenue targets during each of the fiscal years 2023 through 2025.

For the first and second performance periods which ended on December 31, 2023 and 2024, respectively, it was determined that the defined revenue targets were not achieved.

Consequently, no payments for contingent consideration were made to the sellers of Alphazyme in 2024 and 2025, respectively.

As of December 31, 2024, we may be required to make contingent payments to the sellers of Alphazyme of up to $25.0 million for the remaining performance period.

We may also be required to make certain retention payments of $9.3 million, of which $6.6 million is accrued as of December 31, 2024, to its sellers and certain employees as of various dates but primarily through December 31, 2025 as long as these individuals continue to be employed by the Company.

We cannot, at this time, determine when or if the related targets will be achieved or whether the events triggering the commencement of payment obligations will occur.

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Our preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures in the consolidated financial statements.

Our estimates are based on historical

experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Our estimates are based on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Actual results could differ from these estimates under different assumptions or conditions and any such difference may be material.

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We believe the following discussion addresses our most critical accounting estimates used in the preparation of our consolidated financial statements, which require subjective and complex judgments.

We are subject to U.S.

federal and state income taxes.

We are the controlling member of Topco LLC, which has been, and will continue to be, treated as a partnership for U.S.

federal and state income tax purposes.

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

subsidiary, Maravai Life Sciences, Inc.

(“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 wholly-owned subsidiary, Maravai LifeSciences International Holdings, Inc., is a taxpaying entity for U.S.

and foreign jurisdictions and had limited activity subject to a transfer pricing arrangement during the year ended December 31, 2023.

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

The income or loss generated by these entities is not taxed at the LLC level.

As required by U.S.

tax law, income or loss generated by these LLCs passes through to their owners.

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

and its subsidiaries, prior to their disposal, and Maravai LifeSciences International Holdings, Inc., as well as our share of income or loss generated by Topco LLC.

We anticipate this structure to remain in existence for the foreseeable future.

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

We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards.

We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which we expect to recover or settle those temporary differences.

We recognize the effect of a change in tax rates on deferred tax assets and liabilities in the results of operations in the period that includes the enactment date.

We reduce the measurement of a deferred tax asset, if necessary, by a valuation allowance if it is more likely than not that we will not realize some or all of the deferred tax asset.

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.

We believe it is more likely than not that the Company will not generate sufficient taxable income in the future to fully realize any deductions allocated to it from Topco LLC associated with the reversal of its tax basis as of December 31, 2023.

In addition, 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.

As such, a valuation allowance of $642.2 million has been recorded as of December 31, 2023 to reflect the deferred tax assets that are more likely than not to not be realized.

We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon technical merits, it is more likely than not that the position will be sustained upon examination.

Significant judgment is required in determining the accounting for income taxes.

In the ordinary course of business, many transactions and calculations arise where the ultimate tax outcome is uncertain.

Our judgments, assumptions and estimates relative to the accounting for income taxes take into account current tax laws, our interpretation of current tax laws, and possible outcomes of future audits conducted by foreign and domestic tax authorities.

Although we believe that our estimates are reasonable, the final tax outcome of matters could be different from our assumptions and estimates used when determining the accounting for income taxes.

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

Payable to Related Parties Pursuant to the Tax Receivable Agreement

In November 2020, we entered into a 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 share of Class B 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) increase in the tax basis of assets of Topco LLC received form LLC Units held by entities acquired from MLSH 1 and MLSH 2 in connection with the Organizational Transactions, Topco LLC and subsidiaries of Topco LLC that existed prior to this offering 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”).

The payment obligations under the TRA are not

conditioned upon any LLC Unitholder maintaining a continued ownership interest in us or Topco LLC and the rights of MLSH 1 and MLSH 2 under the TRA are assignable.

We expect to benefit from the remaining 15% of the tax benefits, if any, that we may actually realize.

We accrue a liability for the payable to related parties for the TRA and a reduction to stockholders’ equity, when it is deemed probable that the Tax Attributes will be used to reduce our taxable income, as the contractual percentage of the benefit of Tax Attributes that we expected to receive over a period of time.

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

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 between 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 (i.e.

a with-and-without analysis);

provided that, for purposes of determining the tax benefit with respect to state and local income taxes, use simplifying assumptions.

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

There is no maximum term for the TRA and the TRA will continue until all such tax benefits have been utilized or expired unless we exercise our right to terminate the TRA for an agreed-upon amount equal to the estimated present value of the remaining payments to be made under the agreement (calculated with certain assumptions, including as to utilization of the Tax Attributes).

We may record additional liabilities under the TRA when LLC Units of Topco LLC are exchanged in the future and as our estimates of the future utilization of the tax benefits change.

If, due to a change in facts, these tax attributes are not utilized in future years, it is reasonably possible no amounts would be paid under the TRA.

In this scenario, the reduction of the liability under the TRA would result in a benefit to our consolidated statements of operations.

Subsequent adjustments to the payable to related parties for the TRA based on changes in anticipated future taxable income, which could include changes in estimated income allocated to the partners of Topco LLC or apportionment of state income taxes, are recorded in our consolidated statements of operations.

The actual Tax Attributes, as well as any amounts paid to MLSH 1 and MLSH 2 under the TRA, will vary depending on a number of factors, including:

• the timing of any future exchanges—for instance, the increase in any tax deductions will vary depending on the fair value, which may fluctuate over time, of the depreciable or amortizable assets of Topco LLC and its flow-through subsidiaries at the time of each exchange;

• the price of shares of our Class A common stock at the time of any future exchanges—the increases and adjustments in our proportionate share of the existing tax basis of the assets of Topco LLC and its flow-through subsidiaries that are directly related to the price of shares of our Class A common stock at the time of future exchanges;

• the extent to which such exchanges are taxable—if an exchange is not taxable for any reason, increased tax deductions as a result of legacy IRC Section 754 election in place at Topco LLC will not be available to generate payments under the TRA;

• the amount and timing of our income—the TRA generally will require us to pay 85% of the tax benefits as and when those benefits are treated as realized by us under the terms of the TRA.

If we do not have taxable income in a particular taxable year, we generally will not be required (absent a change of control or other circumstances requiring an early termination payment) to make payments under the TRA for that taxable year because no tax benefits will have been actually realized.

Nevertheless, any tax benefits that do not result in realized tax benefits in a given taxable year will likely generate tax attributes that may be utilized to generate tax benefits in future (and possibly previous) taxable years.

The utilization of any such tax attributes will result in payments under the TRA;

• applicable tax rates—the tax rates in effect at the time a tax benefit is recognized.

The payment obligations under the TRA are obligations of Maravai LifeSciences Holdings, Inc.

and not of Topco LLC.

Although the actual timing and amount of any payments that may be made under the TRA will vary, we expect that the aggregate payments that we will be required to make to MLSH 1 and MLSH 2 may be substantial.

Any payments made by us under the TRA will generally reduce the amount of overall cash flow that might have otherwise been available to us or to Topco LLC and, to the extent that we are unable to make payments under the TRA for any reason, the unpaid amounts will be deferred and will accrue interest until paid by us.

We anticipate funding ordinary course payments under the TRA from cash flow from operations of Topco LLC and its subsidiaries, available cash and/or available borrowings under the Credit Agreement.

Assuming no changes in the relevant tax law, we expect that probable future payments under the TRA relating to the purchase by the Company of LLC Units from MLSH 1 and the tax attributes to be approximately $7.1 million.

This determination is based on our estimate of taxable income for the year ended December 31, 2023.

To the extent there is a change in the determination of the realizability of our deferred tax assets, this could impact the expected probable future payments under the TRA and the amount recorded in the consolidated balance sheet.

Future payments in respect of subsequent exchanges or

financings and tax attributes relating to the purchase by the Company of LLC Units from MLSH 1 would be in addition to this amount and may be substantial.

The foregoing numbers are estimates and the actual payments could differ materially.

It is possible that future transactions or events could increase or decrease the actual tax benefits realized and the corresponding TRA payments.

There may be a material negative effect on our liquidity if, as a result of timing discrepancies or otherwise, the payments under the TRA exceed the actual benefits we realize in respect of the tax attributes subject to the TRA and/or distributions to us by Topco LLC are not sufficient to permit us to make payments under the TRA after we have paid taxes.

The term of the TRA commenced upon the completion of our IPO and will continue until all such tax benefits have been utilized or expire, unless we exercise our rights to terminate the agreements or payments under the agreements are accelerated in the event we materially breach any of our material obligations under the agreements.

We evaluate goodwill at the reporting unit level on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value.

Such indicators could include, but are not limited to, current economic and market conditions, including a decline in market capitalization, a significant adverse change in legal factors, business climate, operational performance of the business or key personnel.

We evaluate goodwill at the reporting unit level on an annual basis and on an interim basis if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value.

We perform our annual impairment test in the fourth quarter.

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If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, management performs a quantitative goodwill impairment test.

In performing the quantitative impairment test, management considers a number of factors to determine the fair value of a reporting unit, including an independent valuation to conduct this test.

The valuation is based upon expected future discounted operating cash flows of a reporting unit as well as analysis of recent sales and ratio comparisons of similar companies.

We base the discount rate on the weighted average cost of capital, or WACC, or market participants.

If the carrying value of a reporting unit exceeds its estimated fair value, an impairment loss will be recognized for the amount in which the carrying amount exceeds the reporting unit’s fair value.

Due to the sustained decline in our stock price and the announcement of the Cost Realignment Plan in November 2023, we performed a quantitative analysis and compared our reporting units’ fair values to their respective carrying values to determine whether goodwill was impaired.

We determined the fair values of our reporting units using a combination of the income approach using discounted cash flows and the market approach utilizing data from comparable public companies.

The assumptions and estimates, including management’s estimated future revenue growth rates, estimated future margins and discount rates, used in the quantitative analysis were based on management’s best estimate about current and future conditions.

The result of the quantitative analysis showed that the reporting units’ fair values exceeded their carrying values and there was no impairment of the recorded goodwill as of December 31, 2023.

However, to the extent we continue to experience declines in our stock price or experience other impairment indicators, such as industry and market considerations or a decline in financial performance, or that the fair values of our reporting units are less than their carrying values, there could be a risk of goodwill impairment of our reporting units in future periods.

Recoverability and Impairment of Long-Lived Assets

We review the recoverability of our long-lived assets (including definite-lived intangible assets) if events or circumstances indicate the assets may be impaired.

We measure recoverability of assets by comparing the respective carrying value of the assets to the current and expected future cash flows, on an undiscounted basis, to be generated from such assets.

If our analysis indicates that the carrying value of these assets is not recoverable, we measure an impairment based on the amount by which the net carrying amount of the assets exceeds the fair values of the assets.

In conjunction with the goodwill impairment test performed during the fourth quarter of 2023, we also performed a recoverability assessment of our long-lived assets.

The results of the analysis did not result in an impairment charge.

If the carrying value of a reporting unit exceeds its estimated fair value, an impairment loss will be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value.

We revised our long-term forecast to reflect lower projected near-term revenues due to lower demand in research and discovery products within our Nucleic Acid Production business.

As such, we performed a quantitative goodwill impairment test and compared our reporting units’ fair values to their respective carrying values to determine whether goodwill was impaired.

We performed the impairment test using a combination of the income and the market approach to evaluate whether the fair value of each reporting unit was less than its carrying value.

The income approach utilizes a discounted cash flow model, incorporating both internal estimates and market-based data, while the market approach utilizes comparable company information.

The significant assumptions in the discounted cash flow models vary amongst, and are specific to, each reporting unit and include, but are not limited to, discount rates, projected revenue, revenue growth rates (including terminal growth rates) and EBITDA margins.

Discount rates were determined using a weighted average cost of capital specific to each reporting unit and other market and industry data.

These assumptions were formulated with consideration of prevailing market conditions and anticipated developments, including new product and service initiatives, competitive dynamics, and broader economic factors.

The result of the quantitative analysis indicated that the fair value of the TriLink reporting unit did not exceed its carrying value and consequently resulted in a $154.2 million impairment charge, which was the entire goodwill balance at the TriLink reporting unit.

As of December 31, 2024, we revised our long-term forecast to reflect lower projected near-term revenues due to lower demand in enzyme products within our Nucleic Acid Production business.

As a result, the Company conducted a quantitative goodwill impairment test for the Alphazyme reporting unit using the same methodology described above for TriLink, including the use of the following significant assumptions:

discount rates, projected revenue, revenue growth rates (including terminal growth rates) and EBITDA margins.

The selected discount rate was 28.5%, which was determined using a weighted average cost of capital specific to the Alphazyme reporting unit and other market and industry data.

These assumptions were developed in light of current market conditions and future expectations which include, but were not limited to, new product and service developments, the impact of competition and future economic conditions.

The result of the quantitative analysis indicated that the fair value of the Alphazyme reporting unit did not exceed its carrying value, and as a result, we recorded goodwill impairment of $11.9 million during the year ended December 31, 2024.

The excess of the estimated fair value over carrying value (expressed as a percentage of carrying value for the respective reporting unit) for the two reporting units not impaired, ranged from approximately 88% to approximately 275%.

In order to evaluate the sensitivity of the fair value calculations used in the goodwill impairment test, we applied a hypothetical 10% decrease to the fair values of each reporting unit and compared those hypothetical values to the reporting unit carrying values.

Based on this hypothetical 10% decrease, the excess of the estimated fair value over carrying value (expressed as a percentage of carrying value for the respective reporting unit) for the two reporting units not impaired, ranged from approximately 69% to approximately 238%.

However, to the extent that we continue to experience declines in financial performance or experience other impairment indicators, such as industry and market considerations, or that the fair values of our reporting units are less than their carrying values, there could be a risk of goodwill impairment of our reporting units in future periods.

Recognition of Intangible Assets as Part of a Business Combination

We account for our business combinations using the acquisition method of accounting which requires that the assets acquired and liabilities assumed of acquired businesses be recorded at their respective fair values at the date of acquisition.

The purchase price, which includes the fair value of consideration transferred, is attributed to the fair value of the assets acquired and liabilities assumed.

The purchase price, which includes the fair value of consideration transferred, is attributed to the fair value of the assets acquired and

liabilities assumed.

The excess of the purchase price of the acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill.

Determining the fair value of intangible assets acquired requires management to use significant judgment and estimates, including the selection of valuation methodologies, assumptions about future net cash flows, discount rates and market

participants.

Each of these factors can significantly affect the value attributed to the identifiable intangible asset acquired in a business combination.

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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 7. Management’s Discussion and Analysis