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Item 9A. Controls and Procedures

2025-02-27 compared with 2024-02-28 · 612 added, 580 removed, 1130 unchanged (51% of the section changed)

3 unchanged sentences

“Disclosure controls and procedures” include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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The Company’s management, with the participation of the chief executive officer and the chief financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K (the “Evaluation Date”).

Based on that evaluation, the Company’s chief executive officer and chief financial officer have concluded that, as of the Evaluation Date, such controls and procedures were effective at the reasonable assurance level.

Based on that evaluation, the Company’s chief executive officer and chief financial officer have concluded that the Company’s disclosure controls and procedures were not effective because of the material weakness identified in the operation of certain IT general controls described below.

Management’s Report on Internal Control over Financial Reporting

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Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024.

In making this assessment, our management used the criteria set forth in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on its assessment, our management has determined that, as of December 31, 2023, our internal controls over financial reporting are effective based on those criteria.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control- Integrated Framework (2013 Framework).

Based on its assessment, our management has determined that, as of December 31, 2024, our internal controls over financial reporting were not effective because of the following identified material weakness:

• IT general controls deficiencies.

These deficiencies specifically related to ineffective change management review and periodic access review controls, with respect to the Company’s human resources information system (“HRIS”), which was implemented in 2024.

As a result of the deficiencies, certain change management and user access controls, as well as the related process-level IT dependent manual controls and automated application controls across various processes impacted by the HRIS were also determined to be ineffective.

Management performed additional substantive procedures and concluded that there were no instances of inappropriate access, unauthorized or inappropriate changes to the system or material misstatements.

While this material weakness did not result in a material misstatement of our financial statements, there is a reasonable possibility that business processes that depend on the HRIS or data from the HRIS could be adversely impacted and result in a material misstatement in the Company's annual or interim consolidated financial statements that would not be detected.

Accordingly, we determined that the deficiencies when considered in aggregate constituted a material weakness.

Management is in the process of implementing measures designed to remediate the control deficiencies that led to material weaknesses as of December 31, 2024, and have begun to implement the following steps:

• Enhancing the assignment of control responsibilities and accountability to responsible operational and IT personnel;

• Improving oversight by senior management;

• Additional training for control performers of controls related to human resources and payroll processing;

• Designing and implementing appropriate compensating controls.

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The material weakness will not be remediated until ITGC controls operate for a sufficient period and management has concluded, through testing, that these controls are operating effectively.

Ernst & Young LLP has issued a report on our internal control over financial reporting.

1 unchanged sentence

Changes in Internal Control over Financial Reporting

Our management, including our chief executive officer and chief financial officer, has evaluated any changes in our internal control over financial reporting that occurred during the year ended December 31, 2023 and has concluded that there was no change that occurred during the year ended December 31, 2023 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Our management, including our chief executive officer and chief financial officer, has evaluated changes in our internal control over financial reporting that occurred during the year ended December 31, 2024 and, other than controls related to the HRIS discussed above, has concluded that there was no change that occurred during the year ended December 31, 2024 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

Adoption of 10b5-1 Trading Plans by our Officers and Directors

During our fiscal quarter ended December 31, 2023, one of our officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) entered into a contract, instruction or written plan for the purchase or sale of our securities that is intended to satisfy the conditions specified in Rule 10b5-1(c) under the Exchange Act for an affirmative defense against liability for trading in securities on the basis of material nonpublic information.

We refer to this contract, instruction, and written plan as a “Rule 10b5-1 trading plan.” We describe the material terms of this Rule 10b5-1 trading plan below.

Filip Dubovsky, MD, President, Research & Development

On December 12, 2023 , Filip Dubovsky, MD , our President, Research & Development , entered into a Rule 10b5-1 trading plan that is intended to satisfy the affirmative defense of Rule 10b5-1(c) and provides that Dr.

Dubovsky, acting through a broker, may sell up to an aggregate of 13,365 shares of our common stock, subject to adjustments for stock splits, stock combinations, stock dividends and other similar changes to our common stock.

Sales of shares under the plan may only occur from March 15, 2024 to June 14, 2024.

The plan is scheduled to terminate on June 14, 2024, subject to earlier termination upon the sale of all shares subject to the plan or the expiration of all sale orders under the plan, upon termination by Dr.

Dubovsky or the broker, or as otherwise provided in the plan.

During the three months ended December 31, 2024, no director or “officer” (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408(a) of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

10 unchanged sentences

See also the information regarding our equity awards and ESPP in Note 13 to the consolidated financial statements included herewith.

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Equity Compensation Plan Information

17 unchanged sentences

9,827,073 $ 30.02 12,204,434

(1) Includes our 2015 Stock Incentive Plan, 2005 Stock Incentive Plan, and ESPP.

(1) Includes our 2015 Stock Incentive Plan and ESPP.

The weighted-average exercise price in column (b) excludes restricted stock units, which are not subject to an exercise price.

4 unchanged sentences

We incorporate herein by reference the information required by this item concerning principal accountant fees and services to be contained in the 2025 Proxy Statement.

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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

4 unchanged sentences

Consolidated Balance Sheets as of December 31, 202 4 and 202 3

Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 202 3 , 202 2 , and 202 1

Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 202 4 , 202 3 , and 202 2

Consolidated Statements of Cash Flows for the years ended December 31, 2 02 4 , 202 3 , and 202 2

4 unchanged sentences

Exhibits marked with a double plus sign (††) refer to management contracts, compensatory plans, or arrangements.

Confidential treatment has been granted for portions of exhibits marked with a double asterisk (**).

Confidential information contained in exhibits marked with a caret (^) has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

1 unchanged sentence

Number Description

Asset Purchase Agreement, by and between Novavax CZ a.s., Novo Nordisk Production Czech s.r.o.

and Novo Nordisk A/S, dated as of December 3, 2024.

3.1 Second Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015 (File No.

3.2 Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 9, 2019 (File No.

3.2 Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.

2 to the Company’s Current Report on Form 8-K filed on May 9, 2019 (File No.

3.3 Amended and Restated By-Laws of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 4, 2023 (File No.

1 unchanged sentence

4.1 Specimen stock certificate for shares of common stock of the Company, par value $.01 per share (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3, filed on December 31, 2019 (File No.

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4.2 Indenture (including form of Notes) with respect to the Company's 5.00% Convertible Senior Notes due 2027, dated as of December 20, 2022, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on December 21, 2022 (File No.

21 unchanged sentences

2015 Stock Incentive Plan (Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015 (File No.

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Form of Restricted Stock Unit Agreement granted under the Amended and Restated Novavax, Inc.

20 unchanged sentences

Consulting and Advisory Agreement between the Company and Dr.

Glenn, dated as of March 20, 2023 (Incorporated by reference to Exhibit 10.

4 to the Company’s Q ua rterly Report on Form 10- Q filed on Ma y 9 , 20 23 (File No.

Glenn, dated as of March 20, 2023 (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on May 9, 2023 (File No.

Employment Agreement between the Company and John A.

4 unchanged sentences

Trizzino dated March 3, 2014 (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed on May 5, 2016 (File No.

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Employment Agreement between the Company and James P.

1 unchanged sentence

Offer letter to James P.

Kelly dated J u l y 12, 2021 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed on November 5, 2021 (File No.

Offer letter to Mark Casey dated N o vember 10 , 202 3

Kelly dated July 12, 2021 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed on November 5, 2021 (File No.

Offer letter to Mark Casey dated November 10, 2023

Employment Agreement between the Company and Mark Casey dated November 10, 2023

1 unchanged sentence

Employment Agreement between the Company and Elaine O’Hara dated February 4, 2023

Offer Letter to Filip Dubovsky, M.D.

dat ed May 26, 2020

Employment Agreement between the Company and Filip Dubovsky, M.D.

dated May 26, 2 020

Form of Amendment to Employment Agreement, dated June 17, 2021, between the Company and each of Stanley C.

14 unchanged sentences

Amended and Restated Supply and License Agreement, dated July 1, 2021, between the Company and Serum Institute of India Private Limited (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed on November 5, 2021 (File No.

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Supply Agreement between the Company, Serum Institute of India Private Limited and Serum Life Sciences Limited, executed as of October 26, 2021 (Incorporated by reference to Exhibit 10.37 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022 (File No.

5 unchanged sentences

Collaboration and Exclusive License Agreement between the Company and SK bioscience Company Limited, dated as of February 12, 2021 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, filed on May 10, 2021 (File No.

Fir st Amendment to Collaboration and Exclusive License Agreement between the Company and SK bioscience Company Limited, dated as of December 23, 2021 (Incorporated by reference to Exhibit 10.39 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022 (File No.

Statement of Work No.

1 to Collaboration and Exclusive License Agreement between the Company and SK bioscience Company Limited, dated as of December 23, 2021 (Incorporated by reference to Exhibit 10.40 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022 (File No.

Change Order No.

1 to Statement of Work No.

1 to Collaboration and Exclusive License Agreement between the Company and SK bioscience Company Limited, dated as of March 31, 2022 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, filed on May 9, 2022 (File No.

First Amendment to Collaboration and Exclusive License Agreement between the Company and SK bioscience Company Limited, dated as of December 23, 2021 (Incorporated by reference to Exhibit 10.39 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022 (File No.

Collaboration and Exclusive License Agreement between the Company and Takeda Pharmaceutical Company Limited, dated as of February 24, 2021 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, filed on May 10, 2021 (File No.

Global Access Commitments Agreement between Bill & Melinda Gates Foundation and the Company, dated as of September 25, 2015 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, filed on November 9, 2015 (File No.

Asset Purchase Agreement between Company and Paragon Bioservices, Inc., dated June 26, 2019 (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, filed on August 7, 2019 (File No.

Amended and Restated SARS-CoV-2 Vaccine Supply Agreement, dated as of July 1, 2022, between the Company and The Secretary of State for Business, Energy and Industrial Strategy, acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 9, 2022 (File No.

3 unchanged sentences

Amendment No.

2 to Advanced Purchase Agreement, dated as of April 6, 2022, between the Company and the Commonwealth of Australia as Represented by the Department of Health (Incorporated by reference to Exhibit 10.

6 to the Company’s Quarterly Report on Form 10-Q filed on August, 8 202 3 (File No.

2 to Advanced Purchase Agreement, dated as of April 6, 2022, between the Company and the Commonwealth of Australia as Represented by the Department of Health (Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed on August, 8 2023 (File No.

Amendment No.

3 to Advanced Purchase Agreement, dated as of April 5, 2023, between the Company and the Commonwealth of Australia as Represented by the Department of Health (Incorporated by reference to Exhibit 10.

7 to the Company’s Quarterly Report on Form 10-Q filed on August, 8 202 3 (File No.

3 to Advanced Purchase Agreement, dated as of April 5, 2023, between the Company and the Commonwealth of Australia as Represented by the Department of Health (Incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q filed on August, 8 2023 (File No.

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Amendment No.

4 to Advanced Purchase Agreement, dated as of July 5, 2023, between the Company and the Commonwealth of Australia as Represented by the Department of Health (Incorporated by reference to Exhibit 10.

8 to the Company’s Quarterly Report on Form 10-Q filed on August, 8 202 3 (File No.

4 to Advanced Purchase Agreement, dated as of July 5, 2023, between the Company and the Commonwealth of Australia as Represented by the Department of Health (Incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q filed on August, 8 2023 (File No.

Amendment No.

5 to Advanced Purchase Agreement, dated as of December 12, 2024, between the Company and the Commonwealth of Australia as Represented by the Department of Health

Advanced Purchase Agreement, effective as of January 19, 2021, between the Company and Her Majesty the Queen in Right of Canada, as represented by the Minister of Public Works and Government Services (Incorporated by reference to Exhibit 10.37 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.

Amendment No.

1 to Advanced Purchase Agreement, effective as of January 26, 2022, between the Company and His Majesty the King in Right of Canada, as represented by the Minister of Public Works and Government Services, as successor in interest to Her Majesty the Queen in Right of Canada, as represented by the Minister of Public Works and Government Services (Incorporated by reference to Exhibit 10.

2 to the Company’s Quarterly Report on Form 10-Q filed on August, 8 202 3 (File No.

Amendment No.

2 to Advanced Purchase Agreement, effective as of October 18, 2022, between the Company and His Majesty the King in Right of Canada, as represented by the Minister of Public Works and Government Services, as successor in interest to Her Majesty the Queen in Right of Canada, as represented by the Minister of Public Works and Government Services (Incorporated by reference to Exhibit 10.

3 to the Company’s Quarterly Report on Form 10-Q filed on August, 8 202 3 (File No.

Amendment No.

3 to Advanced Purchase Agreement, effective as of April 25, 2023, between the Company and His Majesty the King in Right of Canada, as represented by the Minister of Public Works and Government Services, as successor in interest to Her Majesty the Queen in Right of Canada, as represented by the Minister of Public Works and Government Services (Incorporated by reference to Exhibit 10.

4 to the Company’s Quarterly Report on Form 10-Q filed on August, 8 202 3 (File No.

Amendment No.

4 to Advanced Purchase Agreement, effective as of June 30, 2023, between the Company and His Majesty the King in Right of Canada, as represented by the Minister of Public Works and Government Services, as successor in interest to Her Majesty the Queen in Right of Canada, as represented by the Minister of Public Works and Government Services (Incorporated by reference to Exhibit 10.

5 to the Company’s Quarterly Report on Form 10-Q filed on August, 8 202 3 (File No.

Advance Purchase Agreement, dated August 16, 2021, between the Company, Novavax CZ and the European Commission (Incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed on November 5, 2021 (File No.

Base Agreement between the Company and Advanced Technology International, dated June 25, 2020 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 (File No.

Modification No.

01 to Base Agreement between the Company and Advanced Technology International, dated as of March 23, 2022 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, filed on May 9, 2022 (File No.

Modification No.

02 to Base Agreement between the Company and Advanced Technology International, dated as of August 2, 2022 (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 9, 2022 (File No.

Modification No.

03 to Base Agreement between the Company and Advanced Technology International, dated as of November 30, 2022 (Incorporated by reference to Exhibit 10.56 to the Company’s Annual Report on Form 10-K, filed on February 28, 2023 (File No.

Undefinitized Project Agreement No.

1 between the Company and Advanced Technology International, dated July 6, 2020 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 (File No.

Modification No.

01 to Undefinitized Project Agreement No.

1 between the Company and Advanced Technology International, dated July 9, 2020 (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 (File No.

Modification No.

02 to Undefinitized Project Agreement No.

01, entered into September 10, 2020, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.41 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.

Modification No.

03 to Undefinitized Project Agreement No.

01, entered into September 18, 2020, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.42 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.

Modification No.

04 to Undefinitized Project Agreement No.

01, entered into December 23, 2020, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.43 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.

Modification No.

05 to Undefinitized Project Agreement No.

01, dated January 12, 2021, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.44 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.

Modification No.

06 to Undefinitized Project Agreement No.

01, entered into January 19, 2021, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.45 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.

Modification No.

07 to Undefinitized Project Agreement No.

01, dated April 23, 2021, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, filed on August 5, 2021 (File No.

Modification No.

08 to Undefinitized Project Agreement No.

01, dated June 4, 2021, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, filed on August 5, 2021 (File No.

Modification No.

09 to Undefinitized Project Agreement No.

01, dated July 16, 2021, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed on November 5, 2021 (File No.

Modification No.

10 to Undefinitized Project Agreement No.

01, dated August 6, 2021, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed on November 5, 2021 (File No.

Modification No.

11 to Undefinitized Project Agreement No.

01, dated August 26, 2021, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed on November 5, 2021 (File No.

Modification No.

12 to Undefinitized Project Agreement No.

01, dated December 20, 2021, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.64 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022 (File No.

Modification No.

13 to Undefinitized Project Agreement No.

01, dated February 1, 2022, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.65 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022 (File No.

Modification No.

14 to Undefinitized Project Agreement No.

01, dated July 1, 2022, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 9, 2022 (File No.

Modification No.

15 to Undefinitized Project Agreement No.

01, dated August 9, 2022, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 9, 2022 (File No.

Modification No.

16 to Undefinitized Project Agreement No.

01, dated September 9, 2022, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 9, 2022 (File No.

Modification No.

17 to Undefinitized Project Agreement No.

1, dated February 6, 2023, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May , 9 202 3 (File No.

Modification No.

18 to Undefinitized Project Agreement No.

1, dated May 25, 2023, between the Company and Advanced Technology International (Incorporated by reference to Exhibit 10.

1 to the Company’s Quarterly Report on Form 10-Q filed on August , 8 202 3 (File No.

Series A Convertible Preferred Subscription Agreement, dated June 15, 2020, between the Company and RA Capital Healthcare Fund, L.P.

(Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 19, 2020 (File No.

Restated Funding Agreement, entered into on May 11, 2020, between the Company and the Coalition for Epidemic Preparedness Innovations (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (File No.

Amendment Number 1 to the iPDP and Budget of the Outbreak Response Funding Agreement (Step 2), entered into on November 2, 2020, between the Company and the Coalition for Epidemic Preparedness Innovations (Incorporated by reference to Exhibit 10.56 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021 (File No.

Settlement Agreement, dated September 30, 2022, between the Company and FUJIFILM Diosynth Biotechnologies UK Limited, FUJIFILM Diosynth Biotechnologies Texas, LLC, and FUJIFILM Diosynth Biotechnologies USA, Inc.

(Incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed on November 9, 2022 (File No.

Settlement Agreement and General Release, dated August 8, 2023, between the Company and SK bioscience Co., Ltd.

(Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended Septembe r 30, 2023, filed on November , 9 202 3 (File No.

(Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, filed on November, 9 2023 (File No.

Securities Subscription Agreement, dated as of August 8, 2023, between the Company and SK bioscience Co., Ltd.

(Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 8, 2023 (File No.

10.101^*

Termination and Settlement Agreement, dated as of February 16, 2024, between the Company and Gavi Alliance

Termination and Settlement Agreement, dated as of February 16, 2024, between the Company and Gavi Alliance (Incorporated by reference to Exhibit 1 0.101 to the Company’s Annual Report on Form 10-K for the year ended December 31, 202 3 , filed on February 28 , 202 4 (File No.

Termination and Settlement Agreement, dated November 1, 2024, by and between the Company and The Secretary of State for Health and Social Care, acting as part of the Crown, through the UK Health Security Agency

Letter Amendment to the Termination and Settlement Agreement, dated November 1, 2024, by and between the Company and The Secretary of State for Health and Social Care, acting as part of the Crown, through the UK Health Security Agency

14 Code of Conduct (Incorporated by reference to Exhibit 14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022 (File No.

19 Insider Trading Polic y

21* Subsidiaries of the Company

1 unchanged sentence

31.1* Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(e) of the Securities Exchange Act

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31.2* Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(e) of the Securities Exchange Act

6 unchanged sentences

101 The following financial information from our Annual Report on Form 10-K for the year ended December 31, 2024, formatted in Extensible Business Reporting Language (XBRL):

(i) the Consolidated Balance Sheets as of December 31, 2023 and 2022, (ii) the Consolidated Statements of Operations for the three years in the period ended December 31, 2023, (iii) the Consolidated Statements of Comprehensive Loss for the three years in the period ended December 31, 2023, (iv) the Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three years in the period ended December 31, 2023, (v) the Consolidated Statements of Cash Flows for the three years in the period ended December 31, 2023, and (vi) the Notes to Consolidated Financial Statements.

(i) the Consolidated Balance Sheets as of December 31, 2024 and 2023, (ii) the Consolidated Statements of Operations for the three years in the period ended December 31, 2024, (iii) the Consolidated Statements of Comprehensive Loss for the three years in the period ended December 31, 2024, (iv) the Consolidated Statements of Changes in Stockholders’ Deficit for the three years in the period ended December 31, 2024, (v) the Consolidated Statements of Cash Flows for the three years in the period ended December 31, 2024, and (vi) the Notes to Consolidated Financial Statements.

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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FORM 10-K SUMMARY

5 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

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Name Title Date

13 unchanged sentences

Rodgers Director February 27, 2025

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

Consolidated Balance Sheets as of December 31, 202 4 and 202 3

Consolidated Statements of Changes in Stockholders’ Equity ( Deficit ) for the years ended December 31, 2023, 2022, and 2021

Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 202 4 , 202 3 , and 202 2

Consolidated Statements of Cash Flows for the years ended December 31, 202 4 , 202 3 , and 202 2

Notes to Consolidated Financial Statements

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Novavax, Inc.

To the Board of Directors and Stockholders of Novavax, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Novavax, Inc.

(the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders’ deficit, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2024 expressed an unqualified opinion thereon.

The Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company has suffered recurring losses, has negative working capital, and an accumulated deficit and has stated that substantial doubt exists about the Company’s ability to continue as a going concern.

Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 27, 2025 expressed an adverse opinion thereon.

Basis for Opinion

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

The communication of the critical audit matters do not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matter or on the account or disclosures to which they relate.

Inventory Excess and Obsolescence Reserve

Description of the Matter As of December 31, 2023, the Company had $41.7 million of inventory.

As disclosed in Note 2, inventories are stated at the lower of cost or net realizable value.

The Company assesses its inventory levels each reporting period and writes down inventory that is either expected to be at risk of expiration prior to sale, or for which there are inventory quantities in excess of expected requirements.

For the year ended December 31, 2023, inventory write-downs were $72.4 million and losses on firm purchase commitments were $73.5 million.

In addition, for the year ended December 31, 2023, the Company recorded recoveries on firm purchase commitments of $40.2 million related primarily to negotiated reductions to previously recognized firm purchase commitments.

Auditing management's estimates for excess and obsolete inventory involved subjective auditor judgment because the estimates rely on a number of factors that are affected by market and economic conditions outside the Company's control.

In particular, the obsolete and excess inventory calculations are sensitive to significant assumptions, including the expected demand for the Company’s products, assumptions about the vaccine’s life cycle, the effect on demand of competitive products and the Company's purchase commitments.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company's excess and obsolete inventory reserve process including management’s review of the significant assumptions described above and controls over the completeness and accuracy of the information used to develop the estimate.

Our substantive audit procedures included, among others, evaluating methodologies, assumptions and data utilized in the analysis for inventory expected to be at risk for expiration or excess.

We evaluated and compared forecasted demand to historical trends, compared actual inventory levels to forecasted demand requirements and evaluated the sensitivity of sales forecast assumptions on the amount of inventory reserves recorded.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the account or disclosures to which it relates.

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Revenue Recognition for Collaboration and Licensing Agreement with Sanofi

Description of the Matter

The Company recorded revenue from the collaboration and licensing agreement (“CLA”) with Sanofi of $459.3 million for the year ended December 31, 2024.

As disclosed in Note 2 and Note 4, the terms of the Sanofi CLA include performance obligations related to the transfer of licenses for the Company’s intellectual property and transition services.

The transaction price includes nonrefundable upfront license fees, and may also include transition service fees, payments based upon the achievement of specified milestones, and royalty payments based on product sales from licensed products.

The Company allocates the transaction price to each performance obligation based on its relative stand-along selling price (“SSP”), which is estimated using discounted cash flows or expected cost-plus profit margin.

Revenue related to the transition services performance obligations is recognized using an input method to measure progress utilizing actual costs incurred to-date relative to total expected costs.

Auditing the Company’s accounting for revenue from the Sanofi CLA was complex and required significant judgment to identify which promises represented performance obligations to the customer.

Also, due to the subjectivity of the assumptions driving the Company’s SSP estimates, auditing these estimates required significant judgment.

In addition, auditing the Company’s progress towards the satisfaction of the transition services performance obligation also required significant judgment as it involves subjective management assumptions about future costs necessary to satisfy the performance obligations.

The measurement and recognition of revenue for the Sanofi CLA is subject to these estimates and judgments developed by management.

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How We Addressed the Matter in Our Audit

Our audit procedures included, among others, reading the Sanofi CLA and evaluating the appropriateness of management’s technical accounting analysis for the identification of performance obligations under the arrangement.

To assess the reasonableness of the Company’s estimate of SSP for the license performance obligation, we compared key assumptions, including forecasted revenue to available third-party sources, tested the accuracy and completeness of the underlying data used in making the estimates, and performed sensitivity analyses of key inputs.

To assess the reasonableness of the Company’s estimate for SSP for the transition services performance obligation, we inspected communications from the Company’s research and development personnel who oversee the CLA and related clinical trials, compared the estimated future costs to third-party support, and performed sensitivity analyses of key inputs.

With the assistance of our valuation specialists, we tested the methodology utilized for the calculation of SSP for each performance obligation, including the discount rates utilized, as well as the profit margin utilized for the transition services performance obligation.

To test the measurement of efforts toward satisfying the transition services obligations recognized over time, we tested actual transition services costs incurred through December 31, 2024 and recalculated the revenue recognized for the period based on the ratio of costs incurred to date as compared to the total estimated costs through completion.

We tested management’s estimate of the remaining costs to complete the transition services as of December 31, 2024 by comparing the estimated future costs to third-party support, comparing actual costs incurred to date to prior estimates, inspecting updated communications from the Company’s research and development personnel who oversee the CLA and related clinical trials, inspecting CLA steering committee minutes, and by performing sensitivity analysis of key inputs.

Product Return Reserve Estimate - U.S.

Commercial Sales

Description of the Matter As of December 31, 2023, the Company recorded a liability for product returns related to US commercial sales of $82.5 million.

Description of the Matter As of December 31, 2024, the Company recorded a liability for estimated product returns related to US commercial sales of $58.3 million.

As disclosed in Note 2, the Company offers U.S.

commercial customers the right to return its product.

These return rights include the right of wholesale distributors to return unsold and expired doses and indirect customers the right to return any partial or unused vials upon expiry.

These return rights include the right of wholesale distributors and indirect customers to return expired doses.

The Company estimates variable consideration resulting from these product returns based on quantitative and qualitative data from various internal and external sources.

Auditing management’s estimate of product returns was complex and judgmental given the Company’s limited history of US commercial sales, and management considers the level of inventory in the distribution channel, projected market demand, utilization data, returns claims received, and product shelf life.

Auditing management’s estimate of product returns was complex and judgmental given the Company’s limited history of U.S.

commercial sales.

In addition, there is significant estimation uncertainty involved in projecting market demand for the inventory in the distribution channel over the product shelf life.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the product return reserve estimation process for U.S.

commercial sales, including management’s review of the level of inventory in the distribution channel, as well as inputs and assumptions used to develop the estimate of the product returns reserve.

Our substantive audit procedures included, among others, testing the level of product in the channel held by a sample of wholesale distributors at December 31, 2023.

For indirect customers, we obtained and reviewed the Company’s estimated channel mix, and compared relevant inputs to underlying actual sales data.

In addition, we assessed management’s estimate of projected market demand for the product through the expiration dates, by analyzing available internal and third party utilization data for the product for the current vaccination season, and we also assessed management’s estimate of total U.S.

commercial market size for the season by analyzing available third party data.

Our substantive audit procedures included, among others, testing the level of product in the channel held by the Company’s wholesale distributors as of December 31, 2024 based upon shipments made to the wholesalers during the period and third-party chargeback data.

For indirect customers, we obtained and reviewed the Company’s analysis of estimated channel mix and compared relevant inputs to underlying third-party chargeback data.

In addition, we assessed management’s estimate of projected market demand for the product through the expiration dates, by analyzing available internal and third-party utilization and market size data for the product for the current vaccination season.

We also evaluated the sensitivities of changes in projected demand on the product return reserve estimate recorded.

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February 27, 2025

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Report of Independent Registered Public Accounting Firm

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We have audited Novavax, Inc.’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Novavax, Inc.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 28, 2024 expressed an unqualified opinion that included an explanatory paragraph regarding the Company’s ability to continue as a going concern.

In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, Novavax, Inc.

(the Company) has not maintained effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment.

Management has identified a material weakness related to ineffective information technology (IT) general controls over change management and user access as well as the related process-level IT dependent manual controls and automated application controls across various processes impacted by a human resources information system (“HRIS”) that was implemented in 2024.

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2024 consolidated financial statements, and this report does not affect our report dated February 27, 2025, which expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting included in Item 9A.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

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and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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February 27, 2025

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NOVAVAX, INC.

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Product sales $ 190,212 $ 531,389 $ 1,554,961

Licensing, royalties, and other

491,950 24,993 43,990

Grants — 427,323 382,921

Royalties and other 24,993 43,990 197,581

Total revenue 682,162 983,705 1,981,872

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Interest expense ( 20,075 ) ( 14,416 ) ( 19,880 )

Other income (expense) 37,896 10,969 ( 6,833 )

Gain on disposition of Novavax CZ assets

40,442 37,896 10,969

Loss before income tax expense

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Other comprehensive income (loss):

Net unrealized gains (losses) on marketable securities available-for-sale, net of reclassifications — — ( 9 )

Net unrealized gains on marketable securities available-for-sale, net of reclassifications

Foreign currency translation adjustment ( 25,321 ) 9,099 ( 5,024 )

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

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NOVAVAX, INC.

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Cash and cash equivalents $ 530,230 $ 568,505

Marketable securities

Restricted cash 10,626 10,424

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Current portion of finance lease liabilities 7,009 5,142

Convertible notes payable — 324,881

Other current liabilities 219,596 861,408

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

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NOVAVAX, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

(in thousands, except share information)

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Income (Loss) Total

Stockholders’ Equity (Deficit)

Stockholders’ Deficit

Shares Amount

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9,672,398 97 249,133 — — — 249,230

Unrealized gain on marketable securities — — — — — ( 9 ) ( 9 )

Foreign currency translation adjustment — — — — — ( 5,024 ) ( 5,024 )

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19,093,397 191 256,218 — — — 256,409

Unrealized gain on available-for-sale marketable securities — — — — — 40 40

Foreign currency translation adjustment — — — — — ( 25,321 ) ( 25,321 )

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

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NOVAVAX, INC.

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Depreciation and amortization 48,496 41,225 29,054

Gain on disposition of Novavax CZ assets

( 51,949 ) — —

Right-of-use assets expensed, net of credits received 3,762 6,113 18,104

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Deferred revenue 67,105 350,868 ( 1,045,914 )

Net cash provided by (used in) operating activities ( 713,967 ) ( 415,937 ) 322,946

Net cash used in operating activities

( 87,263 ) ( 713,967 ) ( 415,937 )

Investing Activities:

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Internal-use software ( 1,582 ) ( 5,035 ) ( 3,929 )

Proceeds from disposition of Novavax CZ assets

Purchases of marketable securities ( 825,593 ) — —

Proceeds from maturities of marketable securities 443,551 — —

Net cash provided by (used in) investing activities ( 58,806 ) ( 92,985 ) 100,154

Net cash used in investing activities

( 204,038 ) ( 58,806 ) ( 92,985 )

Financing Activities:

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Payments of costs related to issuance of 2027 Convertible notes — ( 3,591 ) ( 5,258 )

( 3,591 ) ( 5,258 ) —

Net proceeds from the exercise of stock-based awards 1,305 159 ( 639 )

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Effect of exchange rate on cash, cash equivalents, and restricted cash ( 7,800 ) 3,272 4,520

Net (decrease) increase in cash, cash equivalents, and restricted cash

Net decrease in cash, cash equivalents, and restricted cash

( 38,518 ) ( 765,035 ) ( 179,414 )

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Capital expenditures included in accounts payable and accrued expenses $ 1,063 $ 7,899 $ 17,665

Right-of-use assets from new lease agreements

Right-of-use assets from new lease agreements, net of tenant improvement allowance on facility leases

$ ( 4,302 ) $ 103,299 $ 91,855

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Cash interest payments, net of amounts capitalized $ 17,572 $ 17,349 $ 18,035

Cash paid for income taxes $ 190 $ 17,980 $ 12,606

Cash paid for income taxes, net of refunds received

$ 949 $ 190 $ 17,980

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

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NOVAVAX, INC.

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Novavax, Inc.

(“Novavax,” and together with its wholly owned subsidiaries, the “Company”) is a biotechnology company that promotes improved health by discovering, developing, and commercializing innovative vaccines to prevent serious infectious diseases.

Novavax offers a differentiated vaccine platform that combines a recombinant protein approach, innovative nanoparticle technology and patented Matrix-M™ adjuvant to enhance the immune response.

Novavax currently has one commercial program, for vaccines to prevent COVID-19, which includes Nuvaxovid™ prototype COVID-19 vaccine ("NVX-CoV2373,” or “prototype vaccine”) and Nuvaxovid™ updated COVID-19 vaccine (“NVX-CoV2601,” or “updated vaccine”) (collectively, “COVID-19 Vaccine”).

Local regulatory authorities have also specified nomenclature for the prototype and updated vaccines within their territories (e.g., “Novavax COVID-19 Vaccine, Adjuvanted” and “Novavax COVID-19, Adjuvanted (2023-2024 Formula)”, respectively, for the U.S.).

The Company’s partner, Serum Institute of India Pvt.

(“SIIPL”), markets NVX-CoV2373 as “Covovax™.”

Beginning in 2022, the Company received approval, interim authorization, provisional approval, conditional marketing authorization, and emergency use authorization (“EUA”) from multiple regulatory authorities globally for its prototype vaccine for both adult and adolescent populations as a primary series and for both homologous and heterologous booster indications in select territories.

In October 2023, the U.S.

Food and Drug Administration (“U.S.

FDA”) amended the EUA for its prototype vaccine to include its updated vaccine.

The amended EUA authorizes use of the Company’s updated vaccine in individuals 12 years and older.

In October 2023, the European Commission (“EC”) granted approval for the Company’s updated vaccine for active immunization to prevent COVID-19 caused by SARS-CoV-2 in individuals aged 12 and older.

Currently, the Company significantly depends on its supply agreement with SIIPL and its subsidiary, Serum Life Sciences Limited (“SLS”), for co-formulation, filling and finishing (other than in Europe) and on its service agreement with PCI Pharma Services for finishing in Europe.

Novavax is advancing development of other vaccine candidates, including its COVID19-Influenza Combination (“CIC”) vaccine candidate and additional vaccine candidates.

The Company’s COVID-19 Vaccine and its other vaccine candidates incorporate the Company’s proprietary Matrix-M™ adjuvant to enhance the immune response and stimulate higher levels of functional antibodies and induce a cellular immune response.

(“Novavax,” and together with its wholly owned subsidiaries, the “Company”) is tackling global health challenges through scientific innovation that seeks to maximize its deep scientific expertise in vaccines and cutting-edge technology platform.

The differentiated platform features the Company’s recombinant protein-based nanoparticle technology and its unique Matrix-M ™ adjuvant.

The Company’s corporate growth strategy is focused on delivering value through in-house early-stage research and development (“R&D”) to build a pipeline of high-value assets using its proven technology along with seeking to enter into partnerships to drive value creation for its R&D assets early in the development process and for Matrix-M ™ adjuvant alone.

The Company’s three strategic priorities are:

focusing on its partnership with Sanofi Pasteur Inc.

("Sanofi”) announced in May 2024, leveraging its technology platform and pipeline to forge additional partnerships, and advancing its proven technology platform and early-stage pipeline.

In May 2024, Novavax entered into a Collaboration and License Agreement with Sanofi (the “Sanofi CLA”), to co-commercialize the Company’s COVID-19 vaccine, including future updated versions that address seasonal COVID-19 variants.

Under the terms of the agreement, the Company will continue to commercialize its updated COVID-19 vaccine through the end of the 2024-2025 vaccination season.

Beginning in 2025 and continuing during the term of the Sanofi CLA, the Company and Sanofi will commercialize the COVID-19 vaccine worldwide in accordance with a commercialization plan agreed by the parties, under which Novavax will continue to supply certain of its existing advance purchase agreement (“APA”) customers and strategic partners, including Takeda Pharmaceutical Company Limited (“Takeda”) and Serum Institute of India Pvt.

Upon completion of the existing APAs, the Company and Sanofi will jointly agree on commercialization activities of each party in each jurisdiction.

Additionally, Sanofi has the right to develop novel influenza-COVID-19 combination vaccines utilizing Novavax’s COVID-19 vaccine and Sanofi’s seasonal influenza vaccine, combination products containing Novavax’s COVID-19 vaccine and one or more non-influenza vaccines, and multiple new vaccines utilizing Novavax’s Matrix-M ™ adjuvant.

Novavax’s prototype COVID-19 vaccine (“NVX-CoV2373,” or “prototype vaccine”), the Company’s XBB COVID-19 vaccine (“NVX-CoV2601”), and the Company’s JN.1 COVID-19 (“NVX-CoV2705” or “updated vaccine”) are collectively referred to as the Company’s “COVID-19 vaccine”.

Local regulatory authorities have also specified nomenclature for the labeling of NVX-CoV2373, NVX-CoV2601 and NVX-CoV2705 within their territories (e.g., “Novavax COVID-19 Vaccine, Adjuvanted”, “Novavax COVID-19, Adjuvanted (2023-2024 or 2024-2025 Formula),” respectively, for the U.S., and “Nuvaxovid™” for ex-U.S.

territories).

The Company’s partner, SII, markets Novavax’s COVID-19 vaccine as “Covovax™.”

Currently, the Company significantly depends on its supply agreement with SII and its subsidiary, Serum Life Sciences Limited (“SLS” and together with SII, “Serum”), for co-formulation, filling, and finishing.

Note 2 – Summary of Significant Accounting Policies

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The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern within one year after the date that the financial statements are issued and contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainty described below.

As of December 31, 2023, the Company had $ 568.5 million in cash and cash equivalents and had a working capital deficiency.

In January 2024, pursuant to the June 2023 Amendment to the advance purchase agreement between the Company and the Canadian government (the “Canada APA”), the Company received the second installment of $ 174.8 million from the Canadian government that was contingent and payable upon the Company’s delivery of vaccine doses (see Note 3).

During the year ended December 31, 2023, the Company incurred a net loss of $ 545.1 million and had net cash flows used in operating activities of $ 714.0 million.

In accordance with Accounting Standards Codification (“ASC”) Topic 205-40 , Presentation of Financial Statements - Going Concern , the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that these consolidated financial

statements are issued.

While the Company’s current cash flow forecast for the one-year going concern look forward period estimates that there will be sufficient capital available to fund operations, this forecast is subject to significant uncertainty, including as it relates to revenue for the next 12 months and the Company’s ability to execute on certain cost-reduction initiatives.

The Company’s revenue projections depend on its ability to successfully develop, manufacture, distribute and market its updated vaccine for the 2024-2025 vaccination season, which is inherently uncertain and subject to a number of risks, including the Company’s ability to obtain regulatory authorizations, introduce a single-dose vial or pre-filled syringe product presentation for the U.S.

commercial and certain other markets, the incidence of COVID-19 during the 2024-2025 vaccination season, the Company’s ability to timely deliver doses and achieve commercial adoption and market acceptance of its updated vaccine.

Failure to meet regulatory milestones or achieve product volume or delivery timing obligations under the Company’s advance purchase agreements (“APAs”) may require the Company to refund portions of upfront and other payments or result in reduced future payments which would adversely affect the Company’s ability to continue as a going concern.

Management believes that, given the history of recurring losses, negative working capital and accumulated deficit, conditions or events exist that raise substantial doubt about the Company’s ability to continue as a going concern through one year from the date that these financial statements are issued.

Management’s plans to alleviate the conditions that exist include restructuring and cost reduction measures and successful execution of its commercial plans.

In May 2023, the Company announced a global restructuring and cost reduction plan (the “Restructuring Plan”), which includes a more focused investment in its COVID-19 Vaccine, reduction to its pipeline spending, the continued rationalization of its manufacturing network, a reduction to the Company’s global workforce, as well as the consolidation of facilities, and infrastructure.

In January 2024, as part of reducing combined research and development and selling, general and administrative expenses, the Company announced further reductions in its global workforce (the “2024 Cost Reduction Plan”) (see Note 18).

The Company intends to prioritize improvements to its long-term supply chain efficiency.

The Company expects the full annual impact of the Restructuring Plan to be realized in 2024 and the full annual impact of the 2024 Cost Reduction Plan to be realized in 2025 and approximately 85 % of the annual impact, excluding one-time charges, to be realized in 2024.

During the year ended December 31, 2023, the Company recorded a charge of $ 4.5 million related to one-time employee severance and benefit costs and recorded an impairment charge of $ 10.1 million related to the consolidation of facilities and infrastructure (see Note 17) and expects to record an additional charge of approximately $ 4 million to $ 7 million related to one-time employee severance and benefit costs, the majority of which is expected to be incurred in the first quarter of 2024.

Management’s plans may also include raising additional capital through a combination of equity and debt financing, collaborations, strategic alliances, asset sales, and marketing, distribution, or licensing arrangements.

New financings may not be available to the Company on commercially acceptable terms, or at all.

Also, any collaborations, strategic alliances, asset sales and marketing, distribution, or licensing arrangements may require the Company to give up some or all of its rights to a product or technology, which in some cases may be at less than the full potential value of such rights.

If the Company is unable to obtain additional capital, the Company will assess its capital resources and may be required to delay, reduce the scope of, or eliminate some or all of its operations, or further downsize its organization, any of which may have a material adverse effect on its business, financial condition, results of operations, and ability to operate as a going concern.

Due to the uncertainties associated with management’s plans, there is substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date that these financial statements are issued.

The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainty described below.

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As of December 31, 2024, the Company had $ 530.2 million in cash and cash equivalents, $ 392.9 million in marketable securities, and negative working capital of $ 25.5 million.

During the year ended December 31, 2024, the Company recognized net loss of $ 187.5 million, and had net cash flows used in operating activities of $ 87.3 million.

In accordance with Accounting Standards Codification (“ASC”) Topic 205-40, P resentation of Financial Statements - Going Concern , the Company evaluated its ability to continue as a going concern within one year after the date that the accompanying consolidated financial statements are issued.

Based on the Company’s current cash, cash equivalents and marketable securities balances and the Company's current cash flow forecast for the one-year going concern look forward period, the Company has concluded that it expects to have sufficient capital available to fund its operations for the one-year period from the date that these financial statements are issued.

As of December 31, 2023, the Company had concluded that there was substantial doubt about its ability to continue as a going concern primarily due to significant uncertainty related to its ability to successfully develop, manufacture, distribute, and market its COVID-19 Vaccine and execute on certain cost-reduction initiatives (see Note 18).

The Sanofi CLA combined with proceeds from the disposition of assets held by Novavax CZ a.s.

(“CZ”) (see Note 19), cost reductions and the settlement of certain liabilities, alleviated the substantial doubt.

Use of Estimates

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At contract inception, the Company analyzes its revenue arrangements to determine the appropriate accounting under U.S.

Currently, the Company’s revenue arrangements represent customer contracts within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), or are contributions subject to the guidance in ASC Topic 958-605, Not-for-Profit Entities – Revenue Recognition (“ASC 958-605”).

The Company recognizes revenue from arrangements within the

scope of ASC 606 following the five-step model:

Currently, the Company’s revenue arrangements represent customer contracts within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

The Company recognizes revenue from arrangements within the scope of ASC 606 following the five-step model:

(i) identify the contract(s) with a customer;

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The Company only recognizes revenue under the five-step model when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to its customer.

The Company recognizes contribution revenue within the scope of ASC 958-605 when the funder-imposed conditions have been substantially met.

Contributions are recorded as deferred revenue until the period in which research and development activities are performed that satisfy the funder-imposed conditions.

Product Sales - Advance Purchase Agreements

Product Sales - APAs

Product sales include sales associated with COVID-19 Vaccine supply agreements, sometimes referred to as APAs, with various international governments.

The Company recognizes revenue from product sales related to these APA’s based on the transaction price per dose calculated in accordance with ASC 606 at the point in time when control of the product transfers to the customer and customer acceptance has occurred, unless such acceptance provisions are deemed perfunctory.

The Company recognizes revenue from product sales related to these APAs based on the transaction price per dose calculated in accordance with ASC 606 at the point in time when control of the product transfers to the customer and customer acceptance has occurred, unless such acceptance provisions are deemed perfunctory.

The APAs typically contain terms that include upfront payments, which are reflected in Deferred revenue.

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These estimates are based on the amounts earned or to be claimed for related sales and are classified as either reductions of gross accounts receivable or a current liability based on the nature of the estimate, the expected settlement method, and net position by individual customer.

Where appropriate, these estimates are based on factors such as industry data and forecasted customer buying and payment patterns, the Company’s experience, current contractual and statutory requirements, specific known market events, and trends.

Where appropriate, these estimates are based on factors such as industry data and forecasted customer buying and payment patterns, the Company’s

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experience, current contractual and statutory requirements, specific known market events, and trends.

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

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• Product returns:

The Company offers U.S.

customers the right to return COVID-19 Vaccine.

These return rights include the right of wholesale distributors to return unsold and expired doses and the right of indirect customers to return any partial or unused vials upon expiry.

The Company offers wholesale distributors and indirect customers the right to return expired doses.

Estimated returns for COVID-19 Vaccine are determined considering levels of inventory in the distribution channel, projected market demand, utilization data, returns claims received, and product shelf life.

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Fees payable to retailers, healthcare providers, and buying groups, including certain patient assistance programs, are deducted from gross product sales in the period the related product sales are recognized.

Grant revenue includes both revenue from government contracts and grants from organizations such as the Coalition for Epidemic Preparedness Innovations (“CEPI”).

Licensing, royalties, and other

The Company also has various arrangements that include a right for a customer to use the Company's intellectual property as a functional license, where the Company’s performance obligation is satisfied at the point in time at which the license is granted.

These licensing arrangements include sales-based royalties, certain development and commercial milestone payments, and the sale of proprietary Matrix-M TM adjuvant.

Because certain development milestone payments are contingent on the achievement of milestones, such as regulatory approvals, that are not within the Company or licensee's control, the payments are not considered probable of being achieved and are excluded from the transaction price until the milestone is achieved, at which point the Company recognizes revenue.

For arrangements that include sales-based royalties related to a previously granted license, including milestone payments based upon the achievement of a certain level of product sales, the license is deemed to be the sole or predominant item to which the royalties relate and the Company recognizes revenue when the related sales occur.

The Company allocates the transaction price to each performance obligation based on a relative stand-alone selling price (“SSP”) basis.

The Company develops assumptions that require judgment to determine the stand-alone selling price for each performance obligation in consideration of applicable market conditions and relevant entity-specific factors, including factors that were contemplated in negotiating the agreement with the customer.

Revenue Recognition, Licensing and Transition Services

The terms of the Company’s third-party licensing agreements may contain multiple performance obligations, including licenses and transition services.

The Company evaluates licensing agreements under ASC 606 to determine the distinct performance obligations.

Prior to recognizing revenue, the Company estimates the transaction price, including variable consideration that is subject to a constraint.

Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved.

Total consideration may include nonrefundable upfront license fees, transition service fees, other payments based upon the achievement of specified milestones, and royalty payments based on product sales from licensed products.

For multiple performance obligation arrangements, the Company allocates the transaction price to each distinct performance obligation based on its relative stand-alone selling price.

The stand-alone selling price is generally determined for each performance obligation based on the prices charged to customers, discounted cash flows, or using expected cost-plus margin.

For stand-alone selling prices determined using discounted cash flows, the Company considers discounted, probability-

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weighted cash flows related to the performance obligation transferred.

In developing such estimates, the Company applies judgment in determining the forecasted revenue, expected margins, and the discount rate.

These estimates are subjective and require the Company to make assumptions about future cash flows.

Revenue related to performance obligations satisfied at a point in time is recognized when the customer obtains control of the promised asset.

For performance obligations recognized over time, the Company recognizes revenue using an input method to measure progress by utilizing costs incurred to-date relative to total expected costs.

Under this process, the Company considers the costs that have been incurred to-date, as well as projections to completion using various inputs and assumptions, including, but not limited to, progress towards completion, labor costs and level of effort, material and subcontractor costs, and indirect administrative costs.

Estimating the total cost at completion of the Company’s performance obligation under a contract is subjective and requires the Company to make assumptions about future activity and cost drivers.

Changes in these estimates can occur for a variety of reasons and may impact the timing of revenue recognition on the Company’s contracts.

Changes in estimates related to the process are recognized in the period when such changes are made on a cumulative catch-up basis.

Grant revenue includes revenue from government contracts.

The Company performs research and development under government funding, grant, license, and clinical development agreements.

The revenue primarily consists of funding under U.S.

government contracts and other arrangements to advance the clinical development and manufacturing of COVID-19 Vaccine.

government contracts to advance the clinical development and manufacturing of COVID-19 Vaccine.

government contracts, the Company is entitled to receive funding on a cost-reimbursable or cost-reimbursable-plus-fixed-fee basis, to support certain activities related to the development, manufacture, and delivery of COVID-19 Vaccine to the U.S.

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The Company includes the transaction price comprising both funded and unfunded portions of customer contracts in this estimate.

The Company’s other funding agreements currently include funding from CEPI in the form of a grant (“CEPI Grant Funding”) and one or more forgivable no interest term loans (“CEPI Forgivable Loan Funding”).

Under the Company’s grant funding arrangements, including the CEPI arrangement, the Company is primarily entitled to reimbursement for costs that support development related activities of COVID-19 Vaccine.

The Company analyzed these other funding arrangements and determined that they are not within the scope of ASC 606 as they do not provide a direct economic benefit to the grantor.

Payments received under the grant funding arrangements are considered conditional contributions under the scope of ASC 958-605 and are recorded as deferred revenue until the period in which such research and development activities are actually performed in a manner that satisfies the funder-imposed conditions.

Payments received under the CEPI Forgivable Loan Funding are only repayable if project vaccine, as defined under the CEPI funding agreement, manufactured by the contract manufacturing organization (“CMO”) network funded by CEPI is sold to one or more third parties (which could include sales credited under the Gavi Settlement Agreement), and such sales cover the Company’s costs of manufacturing such vaccine, not including manufacturing costs funded by CEPI.

As the financial risk remains with CEPI, the Company determined that the use of the funds from the CEPI agreement is outside the scope of ASC Topic 470, Debt .

The research and development risk was considered substantive, such that it was not probable that the development would be successful at the inception of the contract.

Therefore, the Company concluded that ASC Topic 730, Research and Development (“ASC 730”) was considered applicable and most appropriate.

Given the financial risk associated with the research and development activities lies with CEPI because repayment of any funds provided by CEPI depends solely on the results of the research and development activities having future economic benefit, the Company has accounted for the obligation under the CEPI Forgivable Loan Funding as a contract to perform research and development for others.

The Company has determined that payments received under these agreements should be recorded as revenue under ASC 958-605 rather than a reduction to research and development expenses.

This is consistent with the Company’s policy of presenting such amounts as revenue.

In reaching this determination, the Company

considered a number of factors, including whether it is principal under the arrangement, and whether the arrangement is significant to, and part of, the Company’s core operations.

The Company will record revenue as it performs the contractual research and development services.

Payments received in advance related to arrangements where revenue is recognized under ASC 958-605 that are related to future performance are deferred and recognized as revenue when the research and development activities are performed.

Such cash payments are restricted as to their use and are reflected in Restricted cash until expenditures contemplated in the funding agreements are incurred.

Royalties and Other

These licensing arrangements include sales-based royalties, certain development and commercial milestone payments, and the sale of proprietary Matrix-M TM adjuvant.

Because development milestone payments are contingent on the achievement of milestones, such as regulatory approvals, that are not within the Company or licensee's control, the payments are not considered probable of being achieved and are excluded from the transaction price until the milestone is achieved, at which point the Company recognizes revenue.

The Company allocates the transaction price to each performance obligation based on a relative standalone selling price basis.

It develops assumptions that require judgment to determine the standalone selling price for each performance obligation in consideration of applicable market conditions and relevant entity-specific factors, including factors that were contemplated in negotiating the agreement with the customer.

Cost of Sales

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Cost of sales does not include certain expenses related to raw materials, production, and manufacturing overhead costs that were expensed prior to regulatory authorization as described under the caption “Inventory.”

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Research and Development Expenses

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laboratory supplies;

consultants and subcontractors, including external contract research organizations (“CROs”), CMOs, and contract development and manufacturing organizations (“CDMOs”);

consultants and subcontractors, including external contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and contract development and manufacturing organizations (“CDMOs”);

and other expenses associated with the Company’s process development, manufacturing, clinical, regulatory, and quality assurance activities for its clinical development programs.

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Forfeitures for all awards are recognized as incurred.

The Company generally settles stock-based awards with newly issued shares.

The Company settles stock-based awards with newly issued shares.

The fair value of stock options and SARs is measured on the date of grant using the Black-Scholes option pricing model.

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Cash equivalents are recorded at cost, which approximates fair value due to their short-term nature.

Marketable Securities

The Company invests its excess cash balances in marketable debt securities with readily determinable fair values that can be converted to cash to fund operations, as required.

Investments with maturities greater than three months from the date of purchase are recognized in Current assets and are classified as “available-for-sale”.

Available-for-sale securities are measured at fair value in the consolidated balance sheets.

Marketable securities are evaluated for impairment considering multiple factors including whether a decline in value below the amortized cost basis is due to credit-related factors.

Management reviews criteria, such as the magnitude and duration of the decline, as well as the

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Company’s ability to hold the securities, including whether the Company will be required to sell a security prior to recovery of its amortized cost basis, the investment issuer’s financial condition and business outlook.

A credit-related impairment is recognized as an allowance against the value of the investment on the balance sheet with a corresponding adjustment to Other income (expense) in the consolidated statements of operations.

Unrealized gains and noncredit-related losses on marketable securities are reported as a separate component of stockholders’ equity (deficit) until realized.

Interest and dividend income is recorded when earned and included in other income in the consolidated statements of operations.

Premiums and discounts, if any, on marketable securities are amortized or accreted to maturity and included in other income in the consolidated statements of operations.

The specific identification method is used in computing realized gains and losses on the sale of the Company’s marketable securities.

Fair Value Measurements

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Payments received under grant agreements become unrestricted as the Company incurs expenses for services performed under these agreements.

As of December 31, 2023 and 2022, restricted cash balances (both current and non-current) consisted primarily of payments under the CEPI funding agreements and letter of credits.

Accounts Receivable

The Company recognizes amounts due from customers as accounts receivable when its right to payment is unconditional.

Gross-to-net deductions are classified as reductions of gross accounts receivable if settlement is expected to occur through a reduction in the amount paid to Novavax by its customer.

Account receivables are recorded net of any

allowance for credit losses.

Gross-to-net deductions are classified as reductions of gross accounts receivable if settlement is expected to occur through a reduction in the amount paid to the Company by its customer.

Account receivables are recorded net of any allowance for credit losses.

The Company’s estimate for the allowance for credit losses, which has not been significant to date, is determined based on the credit risk of its customers based on historical loss experience, economic conditions, the aging of receivables, and customer-specific risks.

Concentration of Risk

Financial instruments expose the Company to concentration of credit risk and consist primarily of cash and cash equivalents.

Financial instruments expose the Company to concentration of credit risk and consist primarily of cash and cash equivalents and marketable securities.

The Company’s investment policy limits investments to certain types of instruments, including asset-backed securities, high-grade corporate debt securities, and money market funds;

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At times, the Company maintains cash balances in financial institutions that may exceed federally insured limits.

The Company has not experienced any losses relating to such accounts and believes it is not exposed to a significant credit risk on its cash and cash equivalents.

The Company's accounts receivable arise from revenue arrangements with customers in different countries.

The Company's revenue is primarily due to product sales, grants made by government-sponsored and private organizations, and royalties from its collaboration and license partners.

The Company has not experienced any losses relating to such accounts and believes it is not exposed to a significant credit risk on its cash and cash equivalents and marketable securities.

The Company's accounts receivable arise from revenue arrangements with customers.

The Company's revenue is primarily due to product sales, grants made by government-sponsored organizations, and royalties from its collaboration and

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license partners.

The following customers accounted for more than 10% of total revenue or accounts receivable for the periods presented:

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Government of Canada * * 10 % * 59 %

Government of Israel * * * * 21 %

government (1)

Sanofi 68 % * * 46 % *

Serum Institute of India * * * 11 % *

McKesson Plasma and Biologics * * * 14 % *

Cardinal Health

* 43 % 19 % * *

CEPI * * 12 % * *

SK bioscience, Co., Ltd.

*Amounts represent less than 10%

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Department of Defense.

The Company currently depends significantly on one supplier for co-formulation, filling, and finishing of COVID-19 Vaccine.

The Company currently depends significantly on one supplier, SII and its subsidiary, SLS, for co-formulation, filling, and finishing of COVID-19 Vaccine.

The loss of this supplier could prevent or delay the Company’s delivery of customer orders.

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Prior to initial regulatory authorization for its product candidates, the Company expenses costs relating to raw materials, production, and manufacturing overhead costs as research and development expenses in the consolidated statements of operations, in the period incurred.

Subsequent to initial regulatory authorization for a product candidate, the Company

capitalizes the costs of production for a particular supply chain as inventory when the Company determines that it has a present right to the economic benefit associated with the product.

Subsequent to initial regulatory authorization for a product candidate, the Company capitalizes the costs of production for a particular supply chain as inventory when the Company determines that it has a present right to the economic benefit associated with the product.

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Property and Equipment

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For finance leases, the Company recognizes the amortization of the ROU asset over the shorter of the lease term or useful life of the underlying asset.

The Company expenses ROU assets acquired for research and development activities under ASC 730 if they do not have an alternative future use, in research and development projects or otherwise.

The Company uses significant assumptions and judgment in evaluating its lease contracts and other agreements under ASC 842, including the determination of whether an agreement is or contains a lease;

The Company expenses

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ROU assets acquired for research and development activities under ASC Topic 730, Research and Development , if they do not have an alternative future use, in research and development projects or otherwise.

The Company uses assumptions and judgment in evaluating its lease contracts and other agreements under ASC 842, including the determination of whether an agreement is or contains a lease;

whether a change in the terms and conditions of a lease contract represent a new or modified lease;

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Ongoing benefits are expensed when restructuring activities are probable and the benefit estimable.

See Note 17 for additional information on the severance and employee benefit costs for terminated employees and impairment of long-lived assets in connection with the Company’s Restructuring Plan and Note 18 for information on the expected severance and employee benefit costs as a result of the Company’s workforce reduction announced on January 31, 2024.

See Note 18 for additional information on the severance and employee benefit costs for terminated employees and impairment of long-lived assets in connection with the Company’s global restructuring and cost reduction plan (“Restructuring Plan”) announced in May 2023.

Goodwill is subject to impairment tests annually or more frequently should indicators of impairment arise.

The Company has determined that, because its only business is the development and commercialization of innovative vaccines, it operates as a single operating segment and has one reporting unit.

The Company has determined that, because its only business is in-house early-stage R&D to build a pipeline of high-value assets using its proven technology along with seeking to enter into partnerships to drive value creation for its assets, it operates as a single operating segment and has one reporting unit.

The one-step impairment test, which requires a comparison of the fair value of a reporting unit to its carrying value, including goodwill, is required to be applied to all reporting units including reporting units with zero or negative carrying value.

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Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled.

The effect of changes in tax rates on deferred tax assets and

liabilities is recognized in income in the period such changes are enacted.

The effect of changes in tax rates on deferred tax assets and liabilities is recognized in income in the period such changes are enacted.

A valuation allowance is established when necessary to reduce net deferred tax assets to the amount expected to be realized.

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The Global Intangible Low-Taxed Income (“GILTI”) provisions under the Tax Cuts and Jobs Act of 2017 impose U.S.

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As of December 31, 2024, the Company's 2027 Notes (see Note 11) would have been convertible into approximately 14 million shares of the Company's common stock assuming the common stock price is equal to or greater than $ 12.50 .

These shares, after giving effect to the add back of interest expense and unamortized discounts and debt issuance costs on the Notes and any shares due to the Company upon settlement of its capped call transactions, are excluded from the computation, as their effect is antidilutive under the if-converted method.

These shares, after giving effect to the add back of interest expense and unamortized discounts and debt issuance costs on the Notes are excluded from the computation, as their effect is antidilutive under the if-converted method.

In addition, all stock options, SARs, and unvested RSUs are excluded from the computation as their effect is antidilutive.

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Translation gains and losses are recognized as a component of accumulated other comprehensive income (loss) in the accompanying consolidated balance sheets.

The foreign currency translation adjustment balance included in accumulated other comprehensive income (loss) was $ 2.7 million of income and $ 6.4 million losses at December 31, 2023 and 2022, respectively.

The aggregate foreign currency transaction gains and losses resulting from the conversion of the transaction currency to functional currency were $ 7.9 million of gains, $ 2.5 million of losses, and $ 5.3 million of losses for the years ended December 31, 2023, 2022, and 2021, respectively, which are reflected in Other income (expense).

The foreign currency translation adjustment balance included in accumulated other comprehensive income (loss) was $ 22.6 million of losses and $ 2.7 million of gains at December 31, 2024 and 2023, respectively.

The aggregate foreign currency transaction gains and losses resulting from the conversion of the transaction currency to functional currency were $ 4.4 million of losses, $ 7.9 million of gains, and $ 2.5 million of losses for the years ended December 31, 2024, 2023, and 2022, respectively, which are reflected in Other income (expense).

Segment Information

The Company manages its business as one operating segment, the development and commercialization of innovative vaccines.

The Company does not operate separate lines of business with respect to its vaccine or vaccine candidates.

Accordingly, the Company does not have separately reportable segments as defined by ASC Topic 280, Segment Reporting .

The Company manages its business as one operating segment, in-house early-stage R&D to build a pipeline of high-value assets using its proven technology along with seeking to enter into partnerships to drive value creation for its assets.

Accordingly, it does not have separately reportable segments as defined by ASC Topic 280, Segment Reporting (“ASC 280”).

The Company’s Chief Executive Officer (“CEO”) is its chief operating decision-maker (“CODM”).

The accounting policies of this segment are described in Note 20.

Recent Accounting Pronouncements

Not Yet Adopted

In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements (“ASU 2023-06”), to clarify or improve disclosure and presentation requirements of a variety of topics and align the requirements in the FASB ASC with the SEC's regulations.

The Company is currently evaluating ASU 2023-06 to determine its impact on the Company's consolidated financial statements and disclosures.

In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”), to clarify or improve disclosure and presentation requirements of a variety of topics and align the

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requirements in the FASB ASC with the SEC's regulations.

The effective date for each amendment in the Update is the effective date that the SEC removes the disclosure requirement from its regulations.

The Company is currently evaluating ASU 2023-06, however, as the ASU codifies SEC regulations, the Company does not anticipate that its implementation will have a material effect on the Company's consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”).

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The ASU is effective for the Company beginning on January 1, 2025.

The Company is currently evaluating ASU 2023-09 to determine its impact on the Company's disclosures.

The Company is completing its evaluation of the impact of ASU 2023-09 on its disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”).

The ASU includes enhanced disclosure requirements, which mandate transparency in financial statements by requiring detailed disclosures of specific expenses like inventory purchases, employee compensation, depreciation, and intangible asset amortization.

ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of adopting this pronouncement on the Company’s consolidated financial statements and disclosures.

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

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The Company adopted ASU 2020-06 on January 1, 2023, using a modified retrospective approach, and it did not have a material impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which expands disclosures for reportable segments made by public entities and requires more detailed information about expenses within each reportable segment.

Entities with a single reportable segment are required to provide on both an interim and annual basis, all segment disclosures required in ASC 280, including the new disclosures for reportable segments under the amendments in ASU 2023-07.

The amendments do not change the existing guidance on how a public entity identifies and determines its reportable segments.

The ASU is effective for the Company’s annual period ended December 31, 2024 and interim periods thereafter and has been adopted by the Company (see Note 20).

Note 3 – Revenue

The Company's accounts receivable, net, included $ 286.4 million and $ 53.8 million related to amounts that were billed to customers and $ 10.8 million and $ 28.6 million related to amounts which had not yet been billed to customers as of December 31, 2023 and 2022, respectively.

During the years ended December 31, 2023 and 2022, changes in the Company's accounts receivables, deferred revenue, and allowance for doubtful accounts balances were as follows (in thousands):

The Company's accounts receivable, net, included $ 102.9 million and $ 286.4 million related to amounts that were billed to customers and $ 5.4 million and $ 10.8 million related to amounts which had not yet been billed to customers as of

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December 31, 2024 and 2023, respectively.

During the years ended December 31, 2024 and 2023, changes in the Company's accounts receivables, allowance for credit losses, and deferred revenue balances were as follows (in thousands):

Balance, Beginning of Period Additions Deductions Balance, End of Period

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96,210 1,472,768 ( 1,264,062 ) 304,916

Allowance for doubtful accounts (1) :

Allowance for credit losses (1) :

Year ended December 31, 2024

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549,551 581,569 ( 267,599 ) 863,521

(1) Bad debt expense was $ 13.8 million in the year ended 2022.

There was no bad debt expense in the year ended December 31, 2023 or 2021.

There was a $ 6.2 million reversal of a bad debt expense during the year ended December 31, 2023 due to the collection of a previously recognized allowance for doubtful accounts.

To estimate the allowance for doubtful accounts, the Company evaluates the credit risk related to its customers based on historical loss experience, economic conditions, the aging of receivables, and customer-specific risks.

(2) Deductions from Deferred revenue generally related to the recognition of revenue once performance obligations on a contract with a customer are met.

Amount is comprised of $ 241.3 million, $ 0.4 billion, and $ 1.4 billion current Deferred

revenue and $ 622.2 million, $ 179.4 million, and $ 172.5 million non-current Deferred revenue as of December 31, 2023, 2022, and 2021 respectively.

(3) In 2023, deductions from Deferred revenue included $ 151.1 million that was realized in Revenue and $ 112.5 million related to the Amended and Restated UK Supply Agreement (as described below), that was reclassified to Other current liabilities, as described below.

In 2022, deduction from Deferred revenue included $ 273.8 million that was realized in Revenue and $ 819.0 million, including $ 697.4 million related to the Advance Payment Amount (as described below) related to the Gavi arbitration and $ 112.5 million related to the Amended and Restated UK Supply Agreement, that was reclassified to Other current liabilities, as described below.

As of December 31, 2023, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties, the Gavi APA, and the reduction in doses related to the Amended and Restated SARS-CoV-2 Vaccine Supply Agreement, dated as of July 1, 2022 (as amended on September 26, 2022, the “Amended and Restated UK Supply Agreement”) between the Company and The Secretary of State for Business, Energy and Industrial Strategy (as assigned to the UK Health Security Agency), acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the “Authority”), which amended and restated the Original UK Supply Agreement, was approximately $ 2 billion of which $ 863.5 million was included in Deferred revenue.

Failure to meet regulatory milestones, obtain timely supportive recommendations from governmental advisory committees, or achieve product volume or delivery timing obligations under the Company’s APAs may require the Company to refund portions of upfront payments or result in reduced future payments, which could adversely impact the Company’s ability to realize revenue from its unsatisfied performance obligations.

The timing to fulfill performance obligations related to APAs will depend on timing of product manufacturing, receipt of marketing authorizations for additional indications, delivery of doses based on customer demand, and the ability of the customer to request variant vaccine in place of the prototype vaccine under certain of the Company’s APAs.

The remaining unfilled performance obligations not related to APAs are expected to be fulfilled in less than one year .

Under the terms of the Gavi APA and a separate purchase agreement between Gavi and SIIPL, 1.1 billion doses of the prototype vaccine were to be made available to countries participating in the COVAX Facility.

The Company expected to manufacture and distribute 350 million doses of the prototype vaccine to countries participating under the COVAX Facility.

Under a separate purchase agreement with Gavi, SIIPL was expected to manufacture and deliver the balance of the 1.1 billion doses of prototype vaccine for low- and middle-income countries participating in the COVAX Facility.

The Company expected to deliver doses with antigen and adjuvant manufactured at facilities directly funded under the Company's funding agreement with CEPI, with initial doses supplied by SIIPL and SLS under a supply agreement.

The Company expected to supply significant doses that Gavi would allocate to low-, middle- and high-income countries, subject to certain limitations, utilizing a tiered pricing schedule and Gavi could prioritize such doses to low- and middle- income countries, at lower prices.

Additionally, the Company could provide additional doses of prototype vaccine, to the extent available from CEPI-funded manufacturing facilities, in the event that SIIPL could not materially deliver expected vaccine doses to the COVAX Facility.

Under the agreement, the Company received an upfront payment of $ 350.0 million from Gavi in 2021 and an additional payment of $ 350.0 million in 2022 related to the Company’s achieving an emergency use license for the Company’s prototype vaccine by the World Health Organization (“WHO”) (the “Advance Payment Amount”).

On November 18, 2022, the Company delivered written notice to Gavi to terminate the Gavi APA on the basis of Gavi’s failure to procure the purchase of 350 million doses of the Company’s prototype vaccine from the Company as required by the Gavi APA.

As of November 18, 2022, the Company had only received orders under the Gavi APA for approximately 2 million doses.

On December 2, 2022, Gavi issued a written notice purporting to terminate the Gavi APA based on Gavi’s contention that the Company repudiated the agreement and, therefore, materially breached the Gavi APA.

Gavi also contended that, based on its purported termination of the Gavi APA, it was entitled to a refund of the Advance Payment Amount less any amounts that have been credited against the purchase price for binding orders placed by a buyer participating in the COVAX Facility.

As of December 31, 2023 and 2022, the remaining Gavi Advance Payment was $ 696.4 million and $ 697.4 million, respectively, pending resolution of the dispute with Gavi related to the return of the remaining Advance Payment Amount, and was classified within Other current liabilities in the Company’s consolidated balance sheet.

On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration based on the claims described above.

The Company filed its Answer and Counterclaims on March 2, 2023.

On April 5, 2023, Gavi filed its Reply to the Company’s Counterclaims.

On February 16, 2024, the Company and Gavi entered into a Termination and Settlement Agreement (the “Gavi Settlement Agreement”) terminating the Gavi APA, settling the arbitration proceedings and releasing both parties of all claims arising from, under or otherwise in connection with the Gavi APA.

Pursuant to the Gavi Settlement Agreement, the Company is responsible for payment to Gavi of (i) an initial settlement payment of $ 75 million, which the Company paid on February 20,

2024, and (ii) deferred payments, in equal annual amounts of $ 80 million payable each calendar year through a deferred payment term ending December 31, 2028.

The deferred payments are due in variable quarterly installments beginning in the first quarter of 2024 and total $ 400 million during the deferred payment term.

Such deferred payments may be reduced through Gavi’s use of an annual vaccine credit equivalent to the unpaid balance of such deferred payments each year, which may be applied to qualifying sales of any of the Company’s vaccines for supply to certain low-income and lower-middle income countries.

(1) There was no allowances for credit losses recorded in 2024.

In 2023, there was a $ 6.2 million reversal of a credit loss allowance due to the collection of a previously recognized allowance for credit losses.

To estimate the allowance for credit losses, the Company evaluates the credit risk related to its customers based on historical loss experience, economic conditions, the aging of receivables, and customer-specific risks.

(2) Deductions from Deferred revenue generally relate to the recognition of revenue once performance obligations on a contract with a customer are met.

In 2024, deductions from Deferred revenue included $ 91.8 million that was realized in Revenue and $ 61.5 million that was reclassified to Other current liabilities.

In 2023, deductions from Deferred revenue included $ 151.1 million that was realized in Revenue and $ 112.5 million related to the Amended and Restated UK Supply Agreement, that was reclassified to Other current liabilities.

In 2024, additions included a $ 225 million reclassification of an upfront payment from Other current liabilities to Deferred revenue related to the settlement with Gavi as discussed below.

As of December 31, 2024, the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied), excluding amounts related to sales-based royalties and constrained variable consideration, was $ 1.3 billion, of which $ 1.1 billion was included in Deferred revenue.

Failure to meet regulatory milestones, obtain timely supportive recommendations from governmental advisory committees, or achieve product volume or delivery timing obligations under the Company’s APAs may require the Company to refund portions of upfront and other payments or result in reduced future payments, which could adversely impact the Company’s ability to realize revenue from its unsatisfied performance obligations or result in the reversal of previously recognized revenue.

In the first quarter of 2025, the Company received written notice of a $ 23 million claim related to certain performance obligations under an APA agreement with a customer.

The Company believes it has fulfilled the requirements related to this matter and is evaluating the merits of the claim.

The timing to fulfill performance obligations related to APAs will depend on the timing of product manufacturing, receipt of marketing authorizations for additional indications, delivery of doses based on customer demand, and the ability of the customer to request the Company’s most recently updated vaccine under certain of the Company’s APAs.

The timing to fulfill performance obligations related to the Sanofi CLA will depend on the timing of delivery of Sanofi Transition Services and Sanofi Technology Transfer services and delivery of doses and other materials based on Sanofi demand.

Under an APA with Gavi, the Vaccine Alliance (“Gavi”), entered into in May 2021 (the “Gavi APA”), the Company received upfront payments of $ 700 million from Gavi (the “Advance Payment Amount”) to be applied against purchases of the Company’s prototype vaccine by certain countries participating in the COVAX Facility.

As of December 31, 2023, the remaining Gavi Advance Payment Amount was $ 696.4 million.

In February 2024, the Company entered into a Termination and Settlement Agreement with Gavi (the “Gavi Settlement Agreement”) terminating the Gavi APA, settling the arbitration proceedings, and releasing both parties of all claims arising from, under, or otherwise in connection with the Gavi APA.

In February 2024, the claims and counterclaims were dismissed with prejudice.

Pursuant to the Gavi Settlement Agreement, the Company is responsible for payment to Gavi of (i) an initial settlement payment of $ 75 million, which the Company paid in February 2024, and (ii) deferred payments, in equal annual amounts of $ 80 million payable each calendar year through a deferred payment term ending December 31, 2028.

The deferred payments are due in variable quarterly installments and total $ 400 million during the deferred payment term.

Such deferred payments may be reduced through Gavi’s use of an annual vaccine credit equivalent to the unpaid balance of such deferred payments each year, which may be applied to qualifying sales

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of any of the Company’s vaccines for supply to certain low-income and lower-middle income countries.

The Company has the right to price the vaccines offered to such low-income and lower-middle income countries in its discretion, and, when utilized by Gavi, the Company will credit the actual price per vaccine paid against the applicable credit.

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Also, pursuant to the Gavi Settlement Agreement, the Company granted Gavi an additional credit of up to $ 225 million that may be applied against qualifying sales of any of the Company’s vaccines for supply to such low-income and lower-middle income countries that exceed the $ 80 million deferred payment amount in any calendar year during the deferred payment term.

In addition, the Company and Gavi entered into a security agreement pursuant to which Novavax granted Gavi a security interest in accounts receivable from SIIPL under the SIIPL R21 Agreement (see Note 4), which will continue for the deferred payment term of the Gavi Settlement Agreement.

On February 22, 2024, the claims and counterclaims were dismissed with prejudice.

In total, the Gavi settlement agreement is comprised of $ 700 million of potential consideration, consisting of the $ 75 million initial settlement payment, deferred payments of up to $ 400 million that may be reduced through annual vaccine credits, and the additional credit of up to $ 225 million that may be applied for certain qualifying sales.

The Company recorded the $ 3.6 million difference between the refund liability recorded as of December 31, 2023 of $ 696.4 million and the $ 700 million of total consideration under the arrangement as a reduction to revenue during the year ended December 31, 2024.

As of December 31, 2024, the remaining amounts included on the Company’s consolidated balance sheet were $ 225.0 million in non-current Deferred revenue for the additional credit that may be applied against future qualifying sales, $ 85.0 million in Other current liabilities, and $ 275.0 million in Other non-current liabilities.

In addition, the Company and Gavi entered into a security agreement pursuant to which Novavax granted Gavi a security interest in accounts receivable from SII under the SII R21 Agreement (see Note 4), which will continue for the deferred payment term of the Gavi Settlement Agreement

Product Revenue

Product revenue by the Company’s customer’s geographic location was as follows (in thousands):

December 31, 2023 December 31, 2022

Year Ended December 31,

2024 2023 2022

North America

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Total product revenue $ 190,212 $ 531,389 $ 1,554,961

In the fourth quarter of 2023, the Company commenced sales of COVID-19 Vaccine to the U.S.

commercial market, in addition to continuing sales to various international governments.

Product sales in the U.S.

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are recorded net of gross-to-net deductions, as described in Note 2.

During the year ended December 31, 2023, changes in the Company’s gross-to-net deductions balances were as follows (in thousands):

During the years ended December 31, 2023 and 2024, changes in the Company’s gross-to-net deductions balances were as follows (in thousands):

Wholesale Distributor Fees, Discounts, and Chargebacks

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47,028 84,688 131,716

Credits/deductions

( 25,956 ) ( 72 ) ( 26,028 )

Balance as of December 31, 2023 21,072 84,616 105,688

As of December 31, 2023, $ 103.1 million of gross-to-net deductions were included in Accrued expenses and $ 2.6 million were included in Accounts receivable on the consolidated balance sheet.

The Company has an APA with the Commonwealth of Australia for the purchase of doses of COVID-19 Vaccine (the “Australia APA”).

In May 2023, the Company extended a credit for certain doses delivered and recognized within product revenue in 2022 that qualified for replacement under the Australia APA.

This credit is the result of a single lot sold to the Australian government that upon pre-planned 6-month stability testing was found to have fallen below the defined specifications and the lot therefore was removed from the market.

The credit will be applied against the future sale of doses to Australia and, during the year ended December 31, 2023, the Company recorded a reduction of $ 64.7 million in product sales, with a corresponding increase to Deferred revenue, non-current.

In July 2023, the Company amended the Australia APA to provide for replacement doses and to extend the delivery schedule through 2025.

As of February 2024, the Company had not yet received Therapeutic Goods Administration (“TGA”) authorization or delivered doses as contemplated in the July 2023

amendment and is in active discussions with the Australian government on both the TGA authorization and delivery of the doses previously scheduled for the fourth quarter of 2023.

In February 2024, the Company received notice from the Australian government purporting to cancel its order for such prototype vaccine doses.

The Company believes the cancellation was not proper under the amended Australia APA.

However, if such a cancellation were determined to be allowable, $ 6.0 million of the deferred revenue would become a credit towards future deliveries of doses and approximately $ 48 million of the contract value related to future deliverables would no longer be available.

The Company has an APA with the European Commission (“EC”) acting on behalf of various European Union member states to supply a minimum of 20 million and up to 100 million initial doses of prototype vaccine, with the option for the EC to purchase an additional 100 million doses up to a maximum aggregate of 200 million doses in one or more tranches, through 2023.

Under the terms of the APA, the Company agreed to manufacture the vaccine in facilities located in the European Union and ensure continued efficacy of the vaccine against variants of the SARS-CoV-2 virus.

Pursuant to the terms of the APA, the Company is prohibited from supplying prototype vaccine to any third party if such delivery would impede or limit the fulfillment of the Company’s obligations to the EC under the APA, except with respect to the Company’s obligations under the Gavi APA.

In 2022, the Company was notified by the EC that it was cancelling approximately 7 million doses of its prior commitment originally scheduled for delivery in the first and second quarters of 2022, in accordance with the APA, and reducing the order to approximately 63 million doses.

In January 2023, the Company finalized a revised delivery schedule for the remaining 20 million committed doses under the APA that were originally scheduled for delivery during the first and second quarters of 2022.

The APA expired in August 2023 and required that any open and outstanding orders from European Union member states be satisfied by February 2024.

Since August 2023, any additional doses have been managed by amending outstanding orders with deliveries made by February 2024.

The Company has an APA with His Majesty the King in Right of Canada as represented by the Minister of Public Works and Government Services, as successor in interest to Her Majesty the Queen in Right of Canada, as represented by the Minister of Public Works and Government Services (the “Canadian government”), for the purchase of doses of COVID-19 Vaccine (the “Canada APA”).

In April 2023, the Company amended the “Canada APA”, pursuant to which the Canadian government forfeited certain doses originally scheduled for delivery in 2022 for a payment of $ 100.4 million, which the Company received in the second quarter of 2023.

In June 2023, the Company entered into an additional amendment (the “June 2023 Amendment”) to the Canada APA.

Pursuant to the June 2023 Amendment, (i) the Canadian government forfeited certain doses of COVID-19 Vaccine previously scheduled for delivery and agreed to pay a total amount of $ 349.6 million to the Company in two equal installments, which total amount equaled the remaining balance owed by the Canadian government with respect to such forfeited vaccine doses, (ii) the amount of doses of COVID-19 Vaccine due for delivery was reduced, (iii) the delivery schedule for the remaining doses of COVID-19 Vaccine to be delivered was revised, and (iv) the parties agreed Novavax would use the Biologics Manufacturing Centre (“BMC”) Inc.

to produce bulk antigen for doses in 2024 and 2025.

The June 2023 Amendment maintained the total contract value of the original Canada APA.

The first Installment of $ 174.8 million was payable upon execution of the June 2023 Amendment and received by Novavax in July 2023, and the second installment of $ 174.8 million was contingent and payable upon the delivery of vaccine doses in the second half of 2023 and received by Novavax in January 2024.

The Canadian government may terminate the Canada APA, as amended, if the Company fails to receive regulatory approval for its COVID-19 Vaccine using bulk antigen produced at BMC on or before December 31, 2024.

The Company’s 2024 plans do not currently anticipate the submission for regulatory approval of its COVID-19 Vaccine using bulk antigen produced at BMC, and it plans to work with the Canadian government on an amendment that addresses possible alternatives, which may not be achievable.

As of December 31, 2023, $ 102.8 million was classified as short-term Deferred revenue and $ 485.3 million was classified as long-term Deferred revenue with respect to the Canadian APA in the Company’s consolidated balance sheet.

If the Canadian government terminates the Canada APA, $ 28.0 million of the deferred revenue would become refundable and approximately $ 224 million of the contract value related to future deliverables would no longer be available.

Pursuant to the June 2023 Amendment, Novavax and the Canadian government will endeavor to expand the previously agreed in-country commitment to Canada and to further partner to provide health, economic, and future pandemic preparedness benefits to Canada, which value may be provided through a number of activities, including without limitation, capital investments, the performance of activities or services, or the provision of technology or intellectual property licenses.

Further, the parties will endeavor to enter into a memorandum of understanding (the “MOU”) to illustrate the Company’s ability to deliver such benefits over a 15-year period with an aggregate value of not less than 100 % of the amount remaining to be paid under the June 2023 Amendment and ultimately received by the Company.

As of December 31, 2023, discussions regarding the MOU were ongoing.

The Company agreed to hold, when received, $ 20.0 million of the second installment payment in escrow for the benefit of the Canadian government, which amount is the sole recourse available to the Canadian government in the event of non-performance under the MOU.

In July 2022, the Company entered into an Amended and Restated SARS-CoV-2 Vaccine Supply Agreement (as amended on September 26, 2022, the “Amended and Restated UK Supply Agreement”) with The Secretary of State for

Business, Energy and Industrial Strategy (as assigned to the UK Health Security Agency), acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the “Authority”), which amended and restated in its entirety the SARS-CoV-2 Vaccine Supply Agreement, dated October 22, 2020, between the parties (the “Original UK Supply Agreement”).

Under the Original UK Supply Agreement, the Authority agreed to purchase 60 million doses of prototype vaccine and made an upfront payment to the Company.

Under the terms of the Amended and Restated UK Supply Agreement, the Authority agreed to purchase a minimum of 1 million doses and up to an additional 15 million doses (the “Conditional Doses”) of prototype vaccine, with the number of Conditional Doses contingent on, and subject to reduction based on, the Company’s timely achievement of supportive recommendations from the Joint Committee on Vaccination and Immunisation (the “JCVI”) that is approved by the UK Secretary of State for Health, with respect to use of the vaccine for (a) the general adult population as part of a SARS-CoV-2 vaccine booster campaign in the United Kingdom or (b) the general adolescent population as part of a SARS-CoV-2 vaccine booster campaign in the United Kingdom or as a primary series SARS-CoV-2 vaccination, excluding where that recommendation relates only to one or more population groups comprising less than one million members in the United Kingdom.

If the Authority did not purchase the Conditional Doses or the number of such Conditional Doses was reduced below 15 million doses of prototype vaccine, the Company would have to repay up to $ 225.0 million related to the upfront payment previously received from the Authority under the Original UK Supply Agreement.

Under the Amended and Restated UK Supply Agreement, the Authority also has the option to purchase up to an additional 44 million doses, in one or more tranches, through 2024.

As of November 30, 2022, the JCVI had not made a supportive recommendation with respect to prototype vaccine, thereby triggering, under the terms of the Amended and Restated UK Supply Agreement, (i) a reduction of the number of Conditional Doses from 15 million doses to 7.5 million doses, which reduced number of Conditional Doses are contingent on, and subject to further reduction based on, the Company’s timely achievement by November 30, 2023 of a supportive recommendation from JCVI that is approved by the UK Secretary of State for Health as described in the paragraph above, and (ii) an obligation for the Company to repay $ 112.5 million related to the upfront payment previously received from the Authority under the Original UK Supply Agreement.

In April 2023, the Company repaid the $ 112.5 million related to the November 30, 2022 triggering event.

As of November 30, 2023, the JCVI had not made a supportive recommendation with respect to the prototype vaccine, thereby triggering a reduction in the number of Conditional Doses from 7.5 million doses to zero .

As of February 2024, the Company is in discussions with the Authority regarding the treatment of the remaining upfront payment previously received of $ 112.5 million, which is reflected in Other current liabilities.

The Company recognized grant revenue as follows (in thousands):

Year Ended December 31,

2023 2022 2021

USG Agreement

$ 427,323 $ 380,996 $ 788,953

Amounts charged against product sales (1)

105,795 120,277 226,072

Other grant revenue

Total grant revenue $ 427,323 $ 382,921 $ 948,709

Credits/deductions ( 105,731 ) ( 88,196 ) ( 193,927 )

Balance as of December 31, 2024 $ 21,136 $ 116,697 $ 137,833

(1) Amounts charged against product sales include changes in estimates of $ 14.4 million of net adjustments made to prior period product sales, including adjustments of $ 17.7 million due primarily to previously estimated product returns, which are no longer eligible for customer credits and therefore were recognized in product revenue during the year ended December 31, 2024, offset by increases to other gross-to-net deductions.

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As of December 31, 2024, $ 77.1 million of gross-to-net deductions were included in Accrued expenses, $ 10.1 million were included Accounts payable, and $ 50.6 million were included in and reduced Accounts receivable on the consolidated balance sheet.

As of December 31, 2023, $ 103.1 million of gross-to-net deductions were included in Accrued expenses and $ 2.6 million were included in and reduced Accounts receivable on the consolidated balance sheet.

The Company has an APA with the Commonwealth of Australia (“Australia”) for the purchase of doses of COVID-19 Vaccine (the “Australia APA”).

In December 2024, the Company entered into an amendment to the Australia APA with Australia.

Pursuant to the amendment, the Company acknowledged the cancellation by Australia of the delivery of certain doses of COVID-19 Vaccine scheduled for delivery between the fourth quarter of 2023 and the fourth quarter of 2025 and the parties agreed to credit approximately $ 31 million of the advanced payment paid by Australia against outstanding invoices and invoices for the future delivery of approximately 3 million doses of COVID-19 Vaccine without requiring additional cash payments.

The parties also agreed to an updated delivery schedule providing for the potential delivery of COVID-19 Vaccine or future variant COVID-19 Vaccine through the end of 2029.

The amendment further provides for certain remedies for Australia, including return of unused credit, cancellation of doses, or termination of the APA, in the event the Company misses or under delivers doses to Australia or fails to receive regulatory approval of a variant COVID-19 vaccine.

The amendment also provides Australia with the right to cancel doses if the Company fails to timely notify Australia of changes to its commercialization plans.

As of December 31, 2024, $ 15.6 million was classified as current Deferred revenue and $ 118.2 million was classified as non-current Deferred revenue with respect to the Australia APA in the Company’s consolidated balance sheet, which will be recognized in product revenue as doses are delivered to Australia.

The Canadian government may terminate the Canada APA, as amended, as the Company failed to receive regulatory approval for its COVID-19 Vaccine using bulk antigen produced at Biologics Manufacturing Centre (“BMC”) Inc.

on or before December 31, 2024.

Therefore, the Company is in discussions with Canada regarding a potential amendment to the Canada APA to address possible alternatives, which may not be achievable on acceptable terms or at all.

As of December 31, 2024, $ 555.7 million was classified as current Deferred revenue with respect to the Canada APA in the Company’s consolidated balance sheet.

If the Canadian government terminates the Canada APA, $ 28.0 million of advanced payments previously received would become refundable, which was classified as Other current liabilities in the Company’s consolidated balance sheet, and approximately $ 224 million of contract proceeds related to future deliverables would no longer be available.

In November 2024, the Company and Secretary of State for Business, Energy and Industrial Strategy (as assigned to the UK Health Security Agency), acting on behalf of the government of the United Kingdom of Great Britain and Northern Ireland (the “Authority”) entered into a Termination and Settlement Agreement (the “Settlement Agreement”) and a Letter of Amendment to the Settlement Agreement (the “Settlement Agreement Amendment”), relating to the Amended and Restated SARS-CoV-2 Vaccine Supply Agreement (the “Amended and Restated UK Supply Agreement”) and the SARS-CoV-2 Vaccine Supply Agreement, dated October 22, 2020 (the “Original UK Supply Agreement”).

The Settlement Agreement resolved the disputes regarding the Amended and Restated Supply Agreement and released both parties of all claims arising out of or connected with the Amended and Restated Supply Agreement.

Under the terms of the Settlement Agreement and Settlement Agreement Amendment, the Company and the Authority agreed to terminate the Amended and Restated Supply Agreement and to fully settle the outstanding amount under dispute related to upfront payments of $ 112.5 million previously received by the Company from the Authority under the Amended and Restated Supply Agreement.

Pursuant to the Settlement Agreement, the Company agreed to pay a refund of $ 123.8 million (the “Settlement Payment”) to the Authority in equal quarterly installments of $ 10.3 million over a three year period, ending in June 2027.

The Settlement Payment amount includes an $ 11.3 million provision for interest over the period and may be avoided if the Company chooses to accelerate payments.

As of December 31, 2024, the remaining upfront payment previously received from the authority is classified as $ 36.4 million of Other current liabilities and $ 58.8 million of Other non-current liabilities on the Company’s consolidated balance sheet.

The Company has an APA with the Pharmaceutical Management Agency (“Pharmac”), a New Zealand Crown, entity for the purchase of doses of COVID-19 Vaccine (the “New Zealand APA”).

In July 2024, Pharmac provided notice of its termination of its APA.

Pharmac has requested a refund of certain advanced payments, and the Company is in discussion with Pharmac regarding whether a refund of the advanced payments is appropriate under the New Zealand APA.

As of December 31, 2024 , $ 31.3 million was classified as Other current liabilities with respect to the New Zealand APA in the

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Company’s consolidated balance sheet.

Approximately $ 125 million of the contract value related to future deliverables may no longer be available if the New Zealand APA is terminated.

The Company responded to Pharmac in September 2024 indicating it does not believe Pharmac has the right to unilaterally terminate the contract or receive a refund of any part of the remaining upfront payment.

The Company is in ongoing discussions with Pharmac to resolve this matter, which may not be achievable on acceptable terms or at all.

Licensing, Royalties, and Other

Licensing, royalties, and other includes licensing payments, transition services revenue, and technology transfer revenue from the Sanofi CLA;

royalty milestone payments;

sales-based royalties;

and Matrix-M™ adjuvant sales.

During year ended December 31, 2024, the Company recognized $ 398.2 million in revenue related to license fees and sales-based royalties, $ 20.5 million related to Matrix-M™ adjuvant sales, $ 69.7 million of transition services revenue and technology transfer revenue, and $ 3.5 million of other revenue.

During the year ended December 31, 2023, the Company recognized $ 8.5 million in revenue related to license fees and $ 16.5 million in revenue related to a Matrix-M™ adjuvant sales.

During the year ended December 31, 2022, the Company recognized $ 9.0 million in revenue related to sales-based royalties, $ 20.0 million related to milestone payments, and $ 15.0 million in revenue related to a Matrix-M™ adjuvant sales.

The Company’s U.S.

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government 100 million doses of the vaccine candidate.

Funding under the USG Agreement is payable to the Company for various development, clinical trial, manufacturing, regulatory, and other activities.

Funding under the USG Agreement was payable to the Company for various development, clinical trial, manufacturing, regulatory, and other activities.

The USG Agreement contains terms and conditions that are customary for U.S.

government agreements of this nature, including provisions giving the U.S.

government the right to terminate the Base Agreement or the Project Agreement based on a reasonable determination that the funded project will not produce beneficial results commensurate with the expenditure of resources and that termination would

be in the U.S.

government’s interest.

If the Project Agreement is terminated prior to completion, the Company is entitled to be paid for work performed and costs or obligations incurred prior to termination and consistent with the terms of the USG Agreement.

As of December 31, 2023, the Company has recognized the full $ 1.8 billion funding under the USG Agreement in revenue.

Coalition for Epidemic Preparedness Innovations

In May 2020, the Company entered into a restated funding agreement which was amended in November 2020 with CEPI, under which CEPI agreed to provide funding of up to $ 399.5 million to the Company to support the development of prototype vaccine.

The agreement provided up to $ 257.0 million in CEPI Grant Funding and up to $ 142.5 million in CEPI Forgivable Loan Funding, which are loans in the form of one or more forgivable no-interest term loans to fund certain manufacturing activities and are not subject to restrictive or financial covenants.

As of December 31, 2023 and 2022, the Company had recognized total revenue related to CEPI of $ 358.6 million, with the unused amounts primarily related to CEPI Forgivable Loan Funding.

Payments received under the CEPI Forgivable Loan Funding are only repayable if project vaccine, as defined under the CEPI funding agreement, manufactured by the CMO network funded by CEPI is sold to one or more third parties (which could include sales credited under the Gavi Settlement Agreement), and such sales cover the Company’s costs of manufacturing such vaccine, not including manufacturing costs funded by CEPI.

The timing and amount of any loan repayments is currently uncertain.

Royalties and Other

Royalties and other includes royalty milestone payments, sales-based royalties, and Matrix-M™ adjuvant sales.

During the year ended December 31, 2023, the Company recognized $ 8.5 million in revenue related to license fees, and $ 16.5 million in revenue related to a Matrix-M™ adjuvant sales.

During the year ended December 31, 2023, the Company did no t recognize revenue related to milestone payments.

During the year ended December 31, 2021, the Company recognized $ 178.6 million in revenue related to sales-based royalties and $ 20.0 million related to milestone payments.

If the Project Agreement was terminated prior to completion, the Company is entitled to be paid for work performed and costs or obligations incurred prior to termination and consistent with the terms of the USG Agreement.

As of December 31, 2023, the Company recognized the full $ 1.8 billion funding in revenue.

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Note 4 – Collaboration, License, and Supply Agreements

The Company previously granted SIIPL exclusive and non-exclusive licenses for the development, co-formulation, filling and finishing, registration, and commercialization of its prototype vaccine, its proprietary COVID-19 variant antigen candidate(s), and its CIC vaccine candidate.

SIIPL agreed to purchase the Company's Matrix-M™ adjuvant and the Company granted SIIPL a non-exclusive license to manufacture the antigen drug substance component of the Company’s COVID-19 Vaccine in SIIPL’s licensed territory solely for use in the manufacture of COVID-19 Vaccine.

The Company and SIIPL equally split the revenue from SIIPL’s sale of COVID-19 Vaccine in its licensed territory, net of agreed costs.

The Company also has a supply agreement with SIIPL and SLS under which SIIPL and SLS supply the Company with prototype vaccine, its proprietary COVID-19 variant antigen candidate(s), and its CIC vaccine candidate for commercialization and sale in certain territories, as well as a contract development manufacture agreement with SLS, under which SLS manufactures and supplies finished vaccine product to the Company using antigen drug substance and Matrix-M™ adjuvant supplied by the Company.

In March 2020, the Company entered into an agreement with SIIPL that granted SIIPL a non-exclusive license for the use of Matrix-M™ adjuvant supplied by the Company to develop, manufacture, and commercialize R21/Matrix-M™ adjuvant (“SIIPL R21 Agreement”), a malaria vaccine created by the Jenner Institute, University of Oxford (“R21/Matrix-M™”).

In December 2023 received prequalification by the WHO.

Under the SIIPL R21 Agreement, SIIPL purchases the Company's Matrix-M™ adjuvant for use in development activities at cost and for commercial purposes at a tiered commercial supply price, and pays a royalty in the single-to low- double-digit range based on vaccine sales for a period of 15 years after the first commercial sale of the vaccine in each country.

The Company previously granted SII exclusive and non-exclusive licenses for the development, co-formulation, filling and finishing, registration, and commercialization of its COVID-19 vaccine, and its COVID-19-Influenza (“CIC”) vaccine candidate.

SII agreed to purchase the Company's Matrix-M™ adjuvant and the Company granted SII a non-exclusive license to manufacture the antigen drug substance component of the Company’s COVID-19 Vaccine in SII’s licensed territory solely for use in the manufacture of COVID-19 Vaccine.

The Company and SII equally split the revenue from SII’s sale of COVID-19 Vaccine in its licensed territory, net of agreed costs.

In May 2024, the Company and SLS entered into a supply agreement (the “SLS Supply Agreement”) under which SLS agreed to supply the Company with antigen drug substance and finished COVID-19 Vaccine doses.

The SLS Supply Agreement includes the general terms and conditions of supply orders between the Company and SLS.

The Company and SLS execute firm purchase orders, which include specific quantities to be delivered under the SLS Supply Agreement.

The Company agreed to supply SLS with all Matrix-M™ adjuvant needed to manufacture finished COVID-19 Vaccine doses.

In March 2020, the Company entered into an agreement with SII that granted SII a non-exclusive license for the use of Matrix-M™ adjuvant supplied by the Company to develop, manufacture, and commercialize R21/Matrix-M™ adjuvant (“SII R21 Agreement”), a malaria vaccine created by the Jenner Institute, University of Oxford (“R21/Matrix-M™”).

In December 2023, R21/Matrix-M™ received prequalification by the World Health Organization (“WHO”).

Under the SII R21 Agreement, SII purchases the Company's Matrix-M™ adjuvant for use in development activities at cost and for commercial purposes at a tiered commercial supply price, and pays a royalty in the single-to low- double-digit range based on vaccine sales for a period of 15 years after the first commercial sale of the vaccine in each country.

Takeda Pharmaceutical Company Limited

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Under the agreement, Takeda purchases Matrix-M™ adjuvant from the Company to manufacture doses of COVID-19 Vaccine, and the Company is entitled to receive milestone and sales-based royalty payments from Takeda based on the achievement of certain development and commercial milestones, as well as a portion of net profits from the sale of COVID-19 Vaccine.

In September 2021, Takeda finalized an agreement with the Government of Japan’s Ministry of Health, Labour and Welfare ("MHLW") for the purchase of 150 million doses of its prototype vaccine.

In February 2023, MHLW canceled the remainder of doses under its agreement with Takeda.

As a result, it is uncertain whether the Company will receive future sales-based royalty payments from Takeda under the terms and conditions of their current collaboration and licensing agreement.

For the year ended December 31, 2023, the Company recognized $ 6.0 million of revenue as consideration for changes to certain terms of the license agreement which is included in Royalties and other revenue on the consolidated statements of operations.

For the year ended December 31, 2022, the Company recognized $ 20.0 million, upon the sale of prototype vaccine in Japan , which is included in Royalties and other revenue on the consolidated statements of operations.

In May 2024, the Company entered into the Sanofi CLA under which the Company granted and Sanofi received the following:

i) A co-exclusive license to commercialize the Company’s current stand-alone COVID-19 Vaccine, including the Company’s prototype vaccine and updated vaccines, that address seasonal variants throughout the world (the “COVID-19 Vaccine Products”);

ii) A sole license to develop and commercialize combination products containing a potential combination of the Company’s COVID-19 Vaccine and Sanofi’s seasonal influenza vaccine (“COVID-19 and influenza Combination Products” or “CIC Products”);

iii) A non-exclusive license to develop and commercialize combination products containing both the Company’s COVID-19 Vaccine and one or more non-influenza vaccines (“Other Combination Products” and together with the COVID-19 Vaccine Products, CIC Products, and Other Combination Products, “Licensed COVID-19 Products”);

iv) A non-exclusive license to develop and commercialize other vaccine products selected by Sanofi that include the Company’s Matrix-M™ adjuvant (as described below, the “Adjuvant Products”).

The Company is also responsible for performing services related to the technology transfer of its manufacturing process for the COVID-19 Vaccine Products and Matrix-M™ components to Sanofi.

Until the successful completion of such transfer, the Company will supply Sanofi with both COVID-19 Vaccine Products and Matrix-M™ intermediary components for Sanofi’s use and is eligible for reimbursement of such costs from Sanofi.

In addition, the Company is responsible for certain research and development and medical affairs services related to the COVID-19 Vaccine.

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Under the Sanofi CLA, the Company will continue to commercialize its updated COVID-19 vaccine through the end of the 2024-2025 vaccination season.

Beginning in 2025 and continuing during the term of the Sanofi CLA, Sanofi and the Company will commercialize the COVID-19 Vaccine Products worldwide in accordance with a commercialization plan agreed by the Company and Sanofi, under which the Company will continue to supply its existing APA customers and strategic partners, including Takeda and SII.

Upon completion of the existing APAs, the Company and Sanofi will jointly agree on commercialization activities of each party in each jurisdiction.

Pursuant to the Sanofi CLA, the Company received a non-refundable upfront payment of $ 500 million in the second quarter of 2024.

In addition, the Company is eligible to receive development, technology transfer, launch, and sales milestone payments totaling up to $ 700 million in the aggregate with respect to the COVID-19 Vaccine Products and royalty payments on Sanofi’s sales of such licensed products.

Milestone payments are comprised of a payment of $ 175 million upon the approval of the marketing authorization for a currently selected strain of the COVID-19 Vaccine in a pre-filled syringe from the U.S.

Food and Drug Administration (“U.S.

FDA”), $ 25 million upon the transfer of such approval to Sanofi, $ 25 million upon the transfer of European Medicines Agency approval of a COVID-19 Vaccine Product in a pre-filled syringe to Sanofi, $ 50 million upon database lock of an existing Phase 2/3 clinical trial (identifier 2019nCoV-503), $ 75 million upon the completion of the technology transfer of the Company’s manufacturing process for the COVID-19 Vaccine Products to Sanofi, $ 125 million upon achievement of certain CIC Product-related development milestones, and $ 225 million in CIC Product-related launch milestones.

The Company achieved the $ 50 million milestone for database lock of an existing Phase 2/3 clinical trial in 2024 and the amount is included in accounts receivable on the Company’s consolidated balance sheet.

The Company is also eligible to receive development, launch, and sales milestone payments of up to $ 200 million for each of the first four Adjuvant Products and $ 210 million for each Adjuvant Product thereafter, and royalty payments on Sanofi’s sales of all such licensed products.

In addition, a portion of the technology transfer costs and research and development costs incurred by the Company will be reimbursed by Sanofi in accordance with agreed upon plans and budgets.

The Company assessed whether the Sanofi CLA fell within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) based on whether the arrangement involved joint operating activities and whether both parties have active participation in the arrangement and are exposed to significant risks and rewards.

The Company determined that the Sanofi CLA did not fall within the scope of ASC 808, as the Company does not share in the significant financial risks of Sanofi's development or commercialization activities.

The Company then analyzed the arrangement pursuant to the provisions of ASC 606 and determined that the arrangement represents a contract with a customer and is therefore within the scope of ASC 606.

The Company identified the following performance obligations in the Sanofi CLA and determined that they were within the scope of ASC 606:

delivery of (i) the licenses described above (the COVID-19 Vaccine license, CIC Products license, Other Combination Product license, and Adjuvant Products license) (collectively the “Sanofi CLA Licenses’), (ii) research and development transition services that support further regulatory approval and development of the COVID-19 Vaccine, referred to as the “Sanofi Transition Services,” and (iii) technology transfer of the existing manufacturing process for the COVID-19 Vaccine Products and Matrix-M™ adjuvant, referred to as the “Sanofi Technology Transfer.”

The Company also evaluated whether certain options outlined in the Sanofi Agreement represented material rights that would give rise to a performance obligation and concluded that none of the options convey a material right to Sanofi and therefore are not considered separate performance obligations within the Sanofi CLA.

The Sanofi CLA Licenses performance obligations are considered functional intellectual property and distinct from other promises under the contract as Sanofi can benefit from the licenses on their own or together with other readily available resources.

Also, the Sanofi Transition Services provide a distinct benefit to Sanofi within the context of the contract, separate from the licenses, as the services could be provided by Sanofi or another third party without the Company’s assistance.

The Sanofi Technology Transfer obligation is distinct as Sanofi can benefit from the Sanofi CLA Licenses transferred by the Company at the inception of the agreement with other readily available resources.

Therefore, each represents a separate performance obligation within the contract with a customer under the scope of ASC 606 at contract inception.

The Company determined the initial transaction price at inception of the Sanofi CLA to be $ 620.2 million, consisting of (i) fixed consideration (the $ 500 million upfront nonrefundable fee), (ii) and $ 120.2 million of variable consideration attributed to a $ 50.0 million clinical milestone and $ 70.2 million of estimated cost reimbursement related to Sanofi Transition Services and Sanofi Technology Transfer.

Since the clinical milestone allocated to Sanofi Transition Services is entirely within the Company’s control, and the cost reimbursement variable consideration allocated to Sanofi Transition Services and Sanofi Technology Transfer would be recognized as revenue only as the costs are incurred, the Company determined it is not probable

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that a significant reversal of cumulative revenue would occur.

The Company utilized the expected value method to determine the amount of these payments.

The Company excluded certain regulatory and technology transfer milestones from the transaction price that were determined to be inherently uncertain of achievement and are highly susceptible to factors outside of the Company’s control.

Sales-based royalties and launch milestones are related to the license of the intellectual property rights and the Company will recognize revenue for these in the period when subsequent sales are made or sale-based milestones are achieved pursuant to the sales-based royalty exception under ASC 606.

The Company will re-evaluate the transaction price in each reporting period as uncertain events are resolved or other changes in circumstances occur.

The Company allocated the fixed consideration (i.e., the $ 500 million nonrefundable upfront fee) to the performance obligations in the Sanofi CLA based on each performance obligation’s relative SSP, as follows:

• $ 389.6 million for the upfront transfer of the licenses;

• $ 106.9 million for Sanofi Transition Services;

• $ 3.5 million for Sanofi Technology Transfer.

The SSP for the licenses were determined using an approach that considered discounted, probability-weighted cash flows related to the license transferred.

In developing such estimates, the Company applied judgment in determining the forecasted revenue and the discount rate.

The SSP for the ongoing Sanofi Transition Services and Sanofi Technology Transfer were based on estimates of the associated effort and cost of these services, adjusted for a reasonable gross profit margin that would be expected to be realized under similar contracts and the discount rate.

The Company recognized revenue related to the licenses at a point in time upon transfer of the rights and control of the license to Sanofi during the second quarter of 2024.

The Sanofi Transition Services and Sanofi Technology Transfer are recognized in revenue over time using an input method to measure progress by utilizing costs incurred to-date relative to total expected costs.

Revenue recognized related to Sanofi Transition Services and Sanofi Technology Transfer for the year ended December 31, 2024 was $ 69.7 million.

The Company’s consolidated balance sheet as of December 31, 2024 includes a deferred revenue balance of $ 87.6 million ($ 44.9 million included in Deferred revenue, current portion and $ 42.6 million included in Deferred revenue, non-current portion) related to Sanofi Transition Services and Sanofi Technology Transfer.

The Company recognized an asset for $ 35.0 million of direct costs incurred to obtain the Sanofi CLA.

These costs are amortized to expense over the expected period of the benefit in a manner that is consistent with the transfer of the related goods and services in the Sanofi CLA.

The Company recognized $ 29.1 million of amortization expense related to the asset in Selling, general, and administrative expense for the year December 31, 2024, respectively.

In May 2024, the Company also entered into a securities subscription agreement (the "Sanofi Subscription Agreement") with Sanofi, pursuant to which the Company sold and issued to Sanofi, in a private placement, 6.9 million shares of the Company’s common stock, at a price of $ 10.00 per share for aggregate gross proceeds to the Company of $ 68.8 million.

The opening price of the Company’s common stock on the date of the sale approximated $ 10.00 per share and therefore all gross proceeds were allocated to stockholders’ deficit.

Bill & Melinda Gates Medical Research Institute

In May 2023, the Company entered into a 3-year agreement with the Bill & Melinda Gates Medical Research Institute to provide the Company’s Matrix-M™ adjuvant for use in preclinical vaccine research.

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SK bioscience, Co., Ltd.

In February 2021, the Company entered into a Collaboration and License Agreement (“CLA”) with SK bioscience, Co., Ltd.

(“SK”) to manufacture and commercialize its prototype vaccine for sale to the government of South Korea.

The CLA was amended in December 2021 and July 2022 to include the sale of its prototype vaccine to Thailand and Vietnam and to supply the Company with the antigen component of prototype vaccine for use in the final drug product globally, including product to be distributed by the COVAX Facility.

Under the CLA, as amended, SK agreed to pay the Company a royalty on the sale of its prototype vaccine in the low to middle double-digit range.

The CLA was in addition to the Company's existing manufacturing arrangement with SK under a Development and Supply Agreement (“DSA”) entered into in August 2020.

In July 2022, the Company signed an additional agreement with SK for the technology transfer of the Company’s proprietary COVID-19 variant antigen materials so that SK can manufacture the drug substance targeting COVID-19 variants, including the Omicron subvariants.

The companies also signed an agreement to manufacture and supply its prototype vaccine in a prefilled syringe.

In June 2023, the Company entered into a material transfer agreement with SK for the use by SK of the Company’s Matrix-M™ adjuvant in preclinical vaccine experiments for shingles, influenza, and pan-sarbecovirus vaccine.

In August 2023, the Company and SK entered into a Settlement Agreement and General Release (the “Settlement Agreement”) regarding mutual release by the parties of all claims arising from or in relation to statements of work (“SOWs”) canceled by the Company under the DSA and the CLA (collectively the “Business Agreements”), and other SOWs under the Business Agreements (collectively, the “Subject SOWs”), in each case, in connection with the cessation of all drug substance and drug product manufacturing activity at SK for supply to the Company.

In August 2023, the Company and SK bioscience, Co., Ltd.

(“SK”) entered into a Settlement Agreement and General Release (the “Settlement Agreement”) regarding mutual release by the parties of all claims arising from or in relation to statements of work (“SOWs”) canceled by the Company under a Development and Supply Agreement (“DSA”) and the Collaboration and License Agreement (“CLA”) (collectively the “Business Agreements”), and other SOWs under the Business Agreements (collectively, the “Subject SOWs”), in each case, in connection with the cessation of all drug substance and drug product manufacturing activity at SK for supply to the Company.

Subject SOWs canceled by the Company under the Settlement Agreement included (i) Statement of Work No.

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6 dated as of July 18, 2022, and as amended as of December 28, 2022 under the DSA.

Pursuant to the Settlement Agreement, the Company is responsible for payment of $ 149.8 million to SK in connection with the cancellation of manufacturing activity for the SOWs under the Business Agreements, of which (i) $ 130.4 million was paid in August 2023 and (ii) the remaining balance was paid in November 2023.

Pursuant to the Settlement Agreement, the Company was responsible for payment of $ 149.8 million to SK in connection with the cancellation of manufacturing activity for the SOWs under the Business Agreements, which was paid in 2023.

Under the Settlement Agreement, the Company and SK agreed to a wind down plan with respect to the remaining products, materials and equipment under the SOWs.

Under the Settlement Agreement, the Company and SK agreed to remove certain restrictions under the CLA that have been triggered by the launch of SK’s competing vaccine SKYCovione™ in the Republic of Korea.

In addition, the Company agreed to extend the term of an exclusive license to SK under the CLA for the exploitation of antigen and vaccine products

utilizing Company’s proprietary coronavirus vaccine antigens and Matrix-M adjuvant in certain territories.

The Company recorded $ 4.0 million to Deferred revenue related to the extended licenses granted to SK under the Settlement Agreement.

In August 2023, the Company also entered into a Securities Subscription Agreement (the “Subscription Agreement”) with SK, pursuant to which the Company agreed to sell and issue to SK, in a private placement (the “Private Placement”), 6.5 million shares of the Company’s common stock, par value $ 0.01 per share (the “Shares”) at a price of $ 13.00 per share for aggregate gross proceeds to the Company of approximately $ 84.5 million.

In August 2023, the Company also entered into a Securities Subscription Agreement (the “SK Subscription Agreement”) with SK, pursuant to which the Company agreed to sell and issue to SK, in a private placement (the “Private Placement”), 6.5 million shares of the Company’s common stock, par value $ 0.01 per share at a price of $ 13.00 per share for aggregate gross proceeds to the Company of approximately $ 84.5 million.

The closing of the Private Placement occurred on August 10, 2023.

The fair value of the Company’s common stock on the date of closing, based on the quoted market price, was $ 46.5 million, which results in a premium paid by SK of approximately $ 38 million.

The Settlement Agreement and the Subscription Agreement were negotiated concurrently between the parties, and therefore were combined for accounting purposes and analyzed as a single arrangement.

The Settlement Agreement and the SK Subscription Agreement were negotiated concurrently between the parties, and therefore were combined for accounting purposes and analyzed as a single arrangement.

As a result, the Company recorded the $ 46.5 million fair value of common stock issued to SK, based on the quoted market price on the date of close, as an equity transaction.

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Other Supply Agreements

On September 30, 2022, the Company, FUJIFILM Diosynth Biotechnologies UK Limited (“FDBK”), FUJIFILM Diosynth Biotechnologies Texas, LLC (“FDBT”), and FUJIFILM Diosynth Biotechnologies USA, Inc.

(“FDBU” and together with FDBK and FDBT, “Fujifilm”) entered into a Confidential Settlement Agreement and Release (the “Fujifilm Settlement Agreement”) regarding amounts due to Fujifilm in connection with the termination of manufacturing activity at FDBT under the Commercial Supply Agreement (the “Fujifilm CSA”) dated August 20, 2021 and Master Services Agreement dated June 30, 2020 and associated statements of work (the “Fujifilm MSA”) by and between the Company and Fujifilm.

The Fujifilm MSA and Fujifilm CSA established the general terms and conditions applicable to Fujifilm’s manufacturing and supply activities related to prototype vaccine under the associated statements of work.

Pursuant to the Fujifilm Settlement Agreement, the Company agreed to pay up to $ 185.0 million (the “Settlement Payment”) to Fujifilm in connection with cancellation of manufacturing activity at FDBT under the CSA, of which (i) $ 47.8 million, constituting the initial reservation fee under the CSA, was credited against the Settlement Payment on September 30, 2022 and (ii) the remaining balance was to be paid in four equal quarterly installments of $ 34.3 million each, which began on March 31, 2023.

Under the Fujifilm Settlement Agreement, the final two quarterly installments due to Fujifilm were subject to Fujifilm’s obligation to use commercially reasonable efforts to mitigate losses associated with the vacant manufacturing capacity caused by the termination of manufacturing activities at FDBT under the CSA.

Any replacement revenue achieved by Fujifilm’s mitigation efforts between July 1, 2023 and December 31, 2023 would offset the final two settlement payments owed by the Company.

On October 2, 2023, the Company sent a notice of breach under the Fujifilm Settlement Agreement to Fujifilm setting forth the Company’s position that Fujifilm had not used commercially reasonable efforts to mitigate losses.

The Company withheld two installments of $ 34.3 million due to Fujifilm on September 30, 2023 and December 31, 2023, pending resolution of the issues identified in the notice of breach.

On October 30, 2023, FDBT filed a demand for arbitration with Judicial Arbitration and Mediation Services (“JAMS”) seeking payment of the third quarter installment of the Settlement Payment.

As of December 31, 2023, the remaining payment of $ 68.6 million was reflected in Accrued expenses.

The Company continues to assess its manufacturing needs and intends to modify its global manufacturing footprint consistent with its contractual obligations to supply, and anticipated demand for, its COVID-19 Vaccine, and in doing so, recognizes that significant costs may be incurred.

In March 2024, the Company, FUJIFILM Diosynth Biotechnologies UK Limited (“FDBK”), FUJIFILM Diosynth Biotechnologies Texas, LLC (“FDBT”) and FUJIFILM Diosynth Biotechnologies USA, Inc.

(“FDBU” and together with FDBK and FDBT, “Fujifilm”) entered into a Confidential Settlement Agreement and Release (the “Settlement Agreement”) to resolve disputes regarding amounts that Fujifilm claimed were due under a prior Confidential Settlement Agreement and Release effective September 30, 2022 (the “CSAR”) by and between the Company and Fujifilm.

Under the CSAR, the Company agreed to pay up to $ 185.0 million to Fujifilm in connection with the cancellation of manufacturing activity at FDBT.

The final two quarterly installments due to Fujifilm in 2023 under the CSAR, totaling $ 68.6 million, were subject to Fujifilm’s obligation to use commercially reasonable efforts to mitigate losses associated with the vacant manufacturing capacity caused by the termination of manufacturing activities at FDBT.

In October 2023, the Company sent Fujifilm a notice of breach and refused to pay the final two installments based on its contention that Fujifilm had not used commercially reasonable efforts to mitigate losses and should have offset some portion of the final two payments.

In October 2023, Fujifilm filed a demand for arbitration with Judicial Arbitration and Mediation Services (“JAMS”) seeking payment of the full amount (the “Fujifilm Arbitration”).

Pursuant to the Settlement Agreement, in March 2024, the Company paid $ 42.0 million to Fujifilm, the parties agreed to a mutual release of claims arising from, under or otherwise in connection with the CSAR, and Fujifilm agreed to dismiss the Fujifilm Arbitration.

This payment is less than amounts previously accrued for and reflected in Research and development expense, and accordingly, the Company recorded a benefit of $ 26.6 million as Research and development expense during the year ended December 31, 2024 upon the execution of the Settlement Agreement.

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The Company continues to assess its manufacturing needs and intends to modify its global manufacturing footprint consistent with its contractual obligations to supply, and anticipated demand for, its COVID-19 Program, and in doing so, recognizes that significant costs may be incurred.

Note 5 – Cash, Cash Equivalents, and Restricted Cash

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(1) Classified as Other non-current assets as of December 31, 2024 and 2023 .

Note 6 – Marketable Securities

Marketable securities classified as available-for-sale comprised of (in thousands):

December 31, 2024 December 31, 2023

Losses Fair Value Amortized

Losses Fair Value

Treasury securities

$ 184,438 $ 116 $ — $ 184,554 $ — $ — $ — $ —

Corporate debt securities

208,410 — ( 76 ) 208,334 — — — —

Total marketable securities $ 392,848 $ 116 $ ( 76 ) $ 392,888 $ — $ — $ — $ —

As of December 31, 2024, investments in marketable securities comprised of $ 184.6 million of treasury securities, of which $ 23.0 million mature in 2025 and $ 161.5 million mature in 2026, and $ 208.3 million of corporate debt securities, of which $ 195.2 million mature in 2025 and $ 13.1 million mature in 2026.

Marketable securities are classified as Current assets in the Consolidated balance sheet of the Company as of December 31, 2024.

Based on the Company’s policy under the expected credit loss model, including an assessment of the investment portfolio as of December 31, 2024, the Company concluded that any unrealized losses for its marketable securities were not attributable to credit and therefore an allowance for credit losses has not been recorded as of December 31, 2024.

As of December 31, 2024, the Company held no securities that were in an unrealized loss position for more than 12 months.

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Note 7 – Fair Value Measurements

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— 130,000 — — 200,000 —

Corporate debt securities (1)

Treasury securities

— 184,554 — — — —

Agency securities (1)

Corporate debt securities (2)

— 243,158 — — 45,622 —

Total cash equivalents $ 171,824 $ 245,622 $ — $ 398,834 $ 400,536 $ —

3.75 % Convertible notes due 2023

$ 287,393 $ 557,712 $ — $ 171,824 $ 245,622 $ —

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Total convertible notes payable $ — $ 174,386 $ — $ — $ 100,909 $ —

(1) All investments are classified as Cash and cash equivalents as of December 31, 2023 and 2022, on the consolidated balance sheets.

(1) Classified as cash and cash equivalents as of December 31, 2024 and 2023.

(2) Includes $ 34.8 million and $ 45.6 million classified as cash and cash equivalents as of December 31, 2024 and 2023, respectively, on the consolidated balance sheets.

Fixed-income investments categorized as Level 2 are valued at the custodian bank by a third-party pricing vendor’s valuation models that use verifiable observable market data, such as interest rates and yield curves observable at commonly quoted intervals and credit spreads, bids provided by brokers or dealers, or quoted prices of securities with similar characteristics.

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During the years ended December 31, 2024 and 2023, the Company did not have any transfers between Levels.

The amount in the Company’s consolidated balance sheets for accounts payable and accrued expenses approximates its fair value due to its short-term nature.

Note 8 – Inventory

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Total inventory $ 8,749 $ 41,696

Inventory write-downs as a result of excess, obsolescence, expiry, or other reasons, and losses on firm purchase commitments are recorded as a component of Cost of sales in the consolidated statements of operations.

Inventory write-downs as a result of excess, obsolescence, expiry, or other reasons, and losses on firm purchase commitments, offset by recoveries of such commitments, are recorded as a component of cost of sales in the Company’s consolidated statements of operations.

For the year ended December 31, 2024, inventory write-downs were $ 21.0 million and losses on firm purchase commitments were $ 7.4 million.

In addition, for the year ended December 31, 2024, the Company recorded recoveries on firm purchase commitments of $ 0.7 million related primarily to negotiated reductions to previously recognized firm purchase commitments.

Also, during the year ended December 31, 2023, the Company recorded an impairment charge of $ 6.1 million in Cost of sales related to an embedded lease agreement with a CMO for production capacity in excess of production needs.

For the year ended December 31, 2022, inventory write-downs and losses on firm purchase commitments were $ 447.6 million and $ 155.9 million respectively.

There were no inventory write-downs or losses on firm purchase commitments during 2021.

For the year ended December 31, 2023, inventory write-downs were $ 72.4 million, losses on firm purchase commitments were $ 73.5 million, and recoveries on firm purchase commitments were $ 40.2 million.

For the year ended December 31, 2022, inventory write-downs were $ 447.6 million and losses on firm purchase commitments were $ 155.9 million.

Also, during the years ended December 31, 2024 and 2023, the Company recorded impairment charges of $ 3.8 million and $ 6.1 million, respectively, in Cost of sales related to embedded lease agreements with CMOs for production capacity in excess of production needs.

Inventory reserves for write-downs are relieved when the inventory is disposed of through scrap or sale.

Activity in the reserve for excess and obsolete inventory was as follows (in thousands):

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Year Ended December 31,

Balance at January 1,

Beginning balance

$ 266,059 $ 368,383

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Deductions ( 209,386 ) ( 239,814 )

Balance at December 31,

Ending balance

$ 92,024 $ 266,059

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Note 9 – Goodwill

The Company has one reporting unit, which has a negative carrying amount as of December 31, 2023 and 2022, The change in the carrying amounts of goodwill was as follows (in thousands):

The Company has one reporting unit, which has a negative carrying amount as of December 31, 2024 and 2023.

The change in the carrying amounts of goodwill was as follows (in thousands):

Year Ended December 31,

Beginning balance $ 127,454 $ 126,331

Goodwill allocated to disposition of Novavax CZ assets (See Note 19)

Currency translation adjustments ( 7,605 ) 1,123

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During the years ended December 31, 2024 and 2023, the Company modified certain of its CMO and CDMO agreements that had previously been determined to represent embedded leases and, in accordance with its policy, the Company remeasured and reallocated the remaining consideration under the contracts and reassessed the lease classification as of the effective dates of the respective modifications.

During the year ended December 31, 2023 and 2022, as a result of new or modified leases, the Company recognized ROU assets, net of credits on modifications, and a corresponding lease liability of $ 6.8 million and $ 18.6 million, respectively, for its long-term finance and operating leases embedded in CMO and CDMO manufacturing supply agreements.

During 2020, the Company entered into a lease agreement for the premises located at 700 Quince Orchard Road, Gaithersburg, Maryland ("700QO").

The lease is for approximately 170,000 square feet of space that the Company is using for manufacturing, research and development, and offices.

The term of the lease expires in 2035 with options to extend the lease.

The lease provides for an annual base rent of $ 5.8 million that is subject to future rent increases and obligates the Company to pay building operating costs.

During the year ended December 31, 2022, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, certain floors located at the premises and recognized an ROU asset and related lease obligation of $ 73.2 million as lease commencement for accounting purposes occurred in 2022.

During the year ended December 31, 2024 and 2023, as a result of new or modified leases, the Company recognized ROU assets, net of credits on modifications, and a corresponding lease liability of $ 4.0 million and $ 6.8 million, respectively, for its long-term operating lease embedded in CMO and CDMO manufacturing supply agreements.

Also, during the year ended December 31, 2024 and 2023, the Company recorded an impairment charge of $ 3.8 million and $ 6.1 million, respectively, in Cost of sales related to embedded lease agreements with CMO for production capacity in excess of production needs.

During the year ended December 31, 2023, the Company obtained the right to direct the use of, and obtain substantially all of the benefit from, the remaining floors located at the premises and recognized a ROU asset and related lease obligation of $ 96.5 million as the lease commencement dates for accounting purposes had occurred for such remaining floors.

The lease obligation was reduced by $ 73.4 million for prepaid rent and prior costs incurred on behalf of the landlord during 2023.

As of December 31, 2023, facility leases, including the 700QO lease, have expirations that range from approximately two to thirteen years , some of which include options to extend the lease term.

As of December 31, 2024, facility leases, including the 700QO lease, have expirations that range from approximately one to twelve years , some of which include options to extend the lease term.

The facility leases contain provisions for future rent increases and obligate the Company to pay building operating costs.

During the year ended December 31, 2023, the Company recorded an impairment charge of $ 5.9 million related to ROU facility leases used for research and development, manufacturing and offices space that are impacted by the Restructuring Plan (see Note 17).

No impairment charge related to facility leases was recorded during the year ended December 31, 2024.

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Supplemental balance sheet information related to leases as of December 31, 2024 and 2023 was as follows (in thousands, except weighted-average remaining lease term and discount rate):

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Total finance lease expense $ 17,434 $ 15,481 $ 9,231

(1) During the year ended December 31, 2023, the Company recognized a short-term lease benefit of $ 48.0 million due to gains on the settlement of manufacturing supply agreements with CMOs and CDMOs that included embedded leases.

(1) During the year ended December 31, 2024 and 2023, the Company recognized a short-term lease benefit of $ 26.6 million and $ 48.0 million, respectively, due to gains on the settlement of manufacturing supply agreements with CMOs and CDMOs that included embedded leases.

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Supplemental cash flow information related to leases for the year ended December 31, 2024, 2023, and 2022 was as follows (in thousands):

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As of December 31, 2024, maturities of lease liabilities were as follows (in thousands):

Year Operating

2025 10,855 12,187

2026 7,006 7,570

2027 7,225 7,736

2028 7,431 7,905

2029 3,682 7,596

Thereafter 1,404 55,025

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The Company’s long-term debt consisted of the following (in thousands):

Current portion:

3.75 % Convertible notes due 2023

$ — $ 325,000

Unamortized debt issuance costs — ( 119 )

Total current convertible notes payable $ — $ 324,881

Non-current portion:

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Unamortized debt issuance costs ( 5,566 ) ( 7,234 )

Total non-current convertible notes payable $ 168,016 $ 166,466

Total convertible notes payable $ 169,684 $ 168,016

Interest expense incurred in connection with the convertible notes payable consisted of the following (in thousands):

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In December 2022, the Company issued $ 175.3 million aggregate principal amount of convertible senior unsecured notes that will mature on December 15, 2027 (the “2027 Notes”), unless earlier converted, redeemed, or repurchased.

The 2027 Notes were issued in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and pursuant to an indenture dated December 20, 2022 (the “2027 Indenture”) between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee.

Concurrently with the issuance of the 2027 Notes, the Company completed a public offering of shares of its common stock (see Note 11).

The 2027 Notes were issued in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of

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1933, as amended, and pursuant to an indenture dated December 20, 2022 (the “2027 Indenture”) between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee.

Concurrently with the issuance of the 2027 Notes, the Company completed a public offering of shares of its common stock.

The Company received $ 166.4 million in net proceeds from the issuance of the 2027 Notes after deducting the initial purchasers’ fees and the Company’s offering expenses.

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The conversion rate for the 2027 Notes will initially be 80.0000 shares of the Company’s common stock per $1,000 principal amount of 2027 Notes, which is equivalent to an initial conversion price of $ 12.50 per share of common stock.

The initial conversion price of the 2027 Notes represents a conversion premium of 25 % of the public offering price in the Company’s concurrent common stock offering that closed on December 20, 2022 (see Note 11).

The conversion rate for the 2027 Notes is subject to adjustment under certain circumstances in accordance with the terms of the 2027 Indenture.

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If the Company undergoes a Fundamental Change (as defined in the 2027 Indenture), holders may require, subject to certain conditions and exceptions as set forth in the 2027 Indenture, the Company to repurchase for cash all or any portion of their 2027 Notes at a Fundamental Change repurchase price equal to 100 % of the principal amount of the 2027 Notes to be repurchased, plus accrued and unpaid interest, to, but excluding, the Fundamental Change repurchase date.

If a holder of the 2027 Notes converted upon a Make-Whole Fundamental Change (as described in the 2027 Indenture), they may be eligible to

receive a make-whole premium through an increase to the conversion rate up to a maximum of 20.0000 shares per $1,000 principal amount of 2027 Notes (subject to other adjustments as described in the 2027 Indenture).

In accounting for the issuance of the 2027 Notes, the Company determined that the scope exceptions provided under ASC Topic 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity (“ASC 815-40”) apply to all but one of the conversion features embedded in the 2027 Notes.

If a holder of the 2027 Notes converted upon a Make-Whole Fundamental Change (as described in the 2027 Indenture), they may be eligible to receive a make-whole premium through an increase to the conversion rate up to a maximum of 20.0000 shares per $1,000 principal amount of 2027 Notes (subject to other adjustments as described in the 2027 Indenture).

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conversion features embedded in the 2027 Notes.

This remaining conversion feature, which is associated with a Fundamental Change of the Company, was determined to have a de minimis value as of December 31, 2024, and 2023.

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The 2023 Notes were senior unsecured debt obligations and were issued at par.

On January 31, 2023, the Company funded the outstanding principal amount of $ 325 million on the 2023 Notes, due February 1, 2023 and the indenture governing the 2023 Notes was subsequently satisfied and discharged in accordance with its terms.

The Company funded the outstanding principal amount of $ 325 million on the 2023 Notes, due February 1, 2023, and the indenture governing the 2023 Notes was subsequently satisfied and discharged in accordance with its terms.

The Company’s related “capped call transactions” expired by their terms on January 27, 2023.

The Company repaid the outstanding principal amount of $ 325 million together with accrued but unpaid interest on the maturity date.

The repayment was funded by the issuance of the 2027 Notes and the concurrent common stock offering, as well as cash on hand.

The 2023 Notes were issued pursuant to an indenture dated January 29, 2016 (the “2023 Indenture”) between the Company and the trustee.

The Company received $ 315.0 million in net proceeds from the offering after deducting underwriting fees and offering expenses.

The 2023 Notes bore cash interest at a rate of 3.75 %, payable on February 1 and August 1 of each year.

The 2023 Notes were not redeemable prior to maturity and were convertible into shares of the Company’s common stock.

As a result of the Company’s one-for-twenty reverse stock split in 2019 and pursuant to Section 14.04(a) of the 2023 Indenture, the 2023 Notes were initially convertible into approximately 2,385,800 shares of the Company’s common stock based on the initial conversion rate of 7.3411 shares of the Company’s common stock per $1,000 principal amount of the 2023 Notes.

This represents an initial conversion price of approximately $ 136.20 per share of the Company’s common stock, representing an approximate 22.5 % conversion premium based on the last reported sale price of the Company’s common stock of $ 111.20 per share on January 25, 2016.

In addition, the holders of the 2023 Notes may have required the Company to repurchase the 2023 Notes at par value plus accrued and unpaid interest following the occurrence of a Fundamental Change (as described in the 2023 Indenture).

If a holder of the 2023 Notes converted upon a Make-Whole Adjustment Event (as described in the 2023 Indenture), they may have been eligible to receive a make-whole premium through an increase to the conversion rate up to a maximum of 8.9928 shares per $1,000 principal amount of 2023 Notes (subject to other adjustments as described in the 2023 Indenture).

The 2023 Notes are accounted for in accordance with ASC 470-20, Debt with Conversion and Other Options (“ASC 470-20”) and ASC 815-40.

Under ASC 815-40, to qualify for equity classification (or non-bifurcation, if embedded) the instrument (or embedded feature) must be both (1) indexed to the issuer’s stock and (2) meet the requirements of the equity classification guidance.

Based upon the Company’s analysis, it was determined the 2023 Notes did contain embedded features indexed to its own stock, but did not meet the requirements for bifurcation, and therefore do not need to be separately accounted for as an equity component.

Since the embedded conversion feature met the equity scope exception from derivative accounting, and also since the embedded conversion option did not need to be separately accounted for as an equity component under ASC 470-20, the proceeds received from the issuance of the convertible debt were recorded as a liability on the consolidated balance sheets.

In connection with the issuance of the 2023 Notes, the Company also paid $ 38.5 million, including expenses, to enter into privately negotiated capped call transactions with certain financial institutions (the “capped call transactions”).

The capped call transactions expired by their terms on January 27, 2023.

The capped call transactions were generally expected to reduce the potential dilution upon conversion of the 2023 Notes in the event that the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, was greater than the strike price of the capped call transactions, which initially corresponded to the conversion price of the 2023 Notes, and was subject to anti-dilution adjustments generally similar to those applicable to the conversion rate of the 2023 Notes.

The cap price of the capped call transactions was initially $ 194.60 per share, which represented a premium of approximately 75 % based on the last reported sale

price of the Company’s common stock of $ 111.20 per share on January 25, 2016, and was subject to certain adjustments under the terms of the capped call transactions.

If, however, the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, exceeded the cap price, there would nevertheless have been dilution upon conversion of the 2023 Notes to the extent that such market price exceeded the cap price.

The Company evaluated the capped call transactions under ASC Topic 815-10, Derivatives and Hedging – Overall and determined that they should be accounted for as a separate transaction and that the capped call transactions would be classified as an equity instrument.

The Company incurred approximately $ 10 million of debt issuance costs in 2016 relating to the issuance of the 2023 Notes, which were recorded as a reduction to the 2023 Notes on the consolidated balance sheet.

The $ 10.0 million of debt issuance costs was amortized and recognized as additional interest expense over the seven-year contractual term of the 2023 Notes on a straight-line basis, which approximated the effective interest rate method.

The Company also incurred $ 0.9 million of expenses related to the capped call transactions, which were recorded as a reduction to additional paid-in-capital.

The repayment was funded by the issuance of the 2027 Notes and the common stock offering, as well as cash on hand.

Note 12 – Stockholders’ Deficit

In August 2023, the Company entered into an At Market Issuance Sales Agreement (the “August 2023 Sales Agreement”), which allows it to issue and sell up to $ 500 million in gross proceeds of shares of its common stock, and terminated its then-existing At Market Issuance Sales agreement entered in June 2021 (the “June 2021 Sales Agreement”).

During the year ended December 31, 2023, the Company sold 38.3 million shares of its common stock under its August 2023 Sales Agreement and 7.9 million shares of its common stock under its June 2021 Sales Agreement, resulting in net proceeds of approximately $ 321 million, of which $ 6.9 million was included in Prepaid expenses and other current assets as of December 31, 2023 and received in cash in January 2024.

During the year ended December 31, 2024, the Company sold 12.2 million shares of its common stock under its August 2023 Sales Agreement, resulting in net proceeds of approximately $ 188 million.

As of December 31, 2024, the remaining balance available under the August 2023 Sales Agreement was approximately $ 51 million.

During the year ended December 31, 2022, the Company sold 2.2 million shares of its common stock resulting in net proceeds of approximately $ 179 million , under its June 2021 Sales Agreement.

In August 2023, pursuant to the Securities Subscription Agreement with SK, the Company agreed to sell and issue to SK 6.5 million shares of the Company’s common stock at a price of $ 13.00 per share (the “Shares”) in a Private Placement for aggregate gross proceeds to the Company of approximately $ 84.5 million.

The Company recognized the Shares at the settlement date fair value of $ 46.5 million (see Note 4 for additional discussion of the Securities Subscription Agreement with SK).

In May 2024, the Company also entered into the Sanofi Subscription Agreement, pursuant to which the Company sold and issued to Sanofi, in a private placement, 6.9 million shares of the Company’s common stock, par value $ 0.01 per share at a price of $ 10.00 per share, for aggregate gross proceeds to the Company of $ 68.8 million.

In August 2023, pursuant to the SK Subscription Agreement, the Company agreed to sell and issue to SK 6.5 million shares of the Company’s common stock at a price of $ 13.00 per share (the “Shares”) in a Private Placement for aggregate gross proceeds to the Company of approximately $ 84.5 million.

The Company recognized the Shares at the settlement date fair value of $ 46.5 million.

The closing of the Private Placement occurred on August 10, 2023.

In December 2022, the Company completed a public offering of 7,475,000 shares of its common stock, including 975,000 shares of common stock that were issued upon the exercise in full of the option to purchase additional shares granted to the underwriters, at a price of $ 10.00 per share resulting in net proceeds, net of offering costs of $ 4.9 million, of approximately $ 70 million.

The Company completed this public offering concurrent with the issuance of the 2027 Notes (see Note 10).

Note 13 – Stock-Based Compensation

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Under the 2015 Plan, equity awards may be granted to officers, directors, employees, and consultants of and advisors to the Company and any present or future subsidiary.

The 2015 Plan authorizes the issuance of up to 21.0 million shares of common stock under equity awards granted under the 2015 Plan, which includes an increase of 6.2 million shares approved for issuance under the 2015 Plan at the Company’s 2023 annual meeting of stockholders.

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The 2015 Plan authorizes the issuance of up to 27.5 million shares of common stock under equity awards granted under the 2015 Plan.

All such shares authorized for issuance under the 2015 Plan have been reserved.

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The Amended and Restated 2005 Stock Incentive Plan (“2005 Plan”) expired in February 2015 and no new awards may be made under such plan, although awards will continue to be outstanding in accordance with their terms.

The 2015 Plan permits and the 2005 Plan permitted the grant of stock options (including incentive stock options), restricted stock, SARs, and RSUs.

In addition, under the 2015 Plan, unrestricted stock, stock units, and performance awards may be granted.

The 2023 Inducement Plan and the 2015 Plan permit, and the 2005 Plan permitted, the grant of stock options (including incentive stock options), restricted stock, stock appreciation rights (“SARs”), and restricted stock units (“RSUs”).

In addition, under the 2023 Inducement Plan and the 2015 Plan, unrestricted stock, stock units, and performance awards may be granted.

Stock options and SARs generally have a maximum term of ten years and may be or were granted with an exercise price that is no less than 100 % of the fair market value of the Company’s common stock at the time of grant.

Grants of stock options are generally subject to vesting over periods ranging from one to four years .

Grants of share-based awards are generally subject to vesting over periods ranging from one to one to four years .

The Company recorded stock-based compensation expense in the consolidated statements of operations as follows (in thousands):

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As of December 31, 2024, there was approximately $ 43 million of total unrecognized compensation expense related to unvested stock options, SARs, RSUs, and the ESPP.

This unrecognized non-cash compensation expense is expected to be recognized over a weighted-average period of approximately 1.0 year and will be allocated between cost of sales, research and development, and general and administrative expenses accordingly.

This unrecognized non-cash compensation expense is expected to be recognized over a weighted-average period of approximately 1.2 years and will be allocated between cost of sales, research and development, and general and administrative expenses accordingly.

This estimate does not include the impact of other possible stock-based awards that may be made during future periods.

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The aggregate intrinsic value of stock options and SARs exercises and vesting of RSUs for the years ending December 31, 2024, 2023, and 2022 was approximately $ 13 million, $ 5 million, and $ 21 million, respectively.

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Stock Options and Stock Appreciation Rights

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Expected term (in years) 3.8 - 6.3

The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs outstanding under the 2023 Inducement Plan, 2015 Plan and 2005 Plan as of December 31, 2023 was less than $ 0.1 million and 6.9 years, respectively.

The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs exercisable under the 2023 Inducement Plan, 2015 Plan and 2005 Plan as of December 31, 2023 was less than $ 0.1 million and 5.9 years, respectively.

The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs outstanding under the 2023 Inducement Plan and 2005 Plan as of December 31, 2024 was less than $ 3.2 million and 7.0 years , respectively.

The total aggregate intrinsic value and weighted-average remaining contractual term of stock options and SARs exercisable under the 2023 Inducement Plan and 2005 Plan as of December 31, 2024 was less than $ 1.0 million and 5.9 years , respectively.

Restricted Stock Units

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Outstanding and unvested at January 1, 2024

363,990 $ 10.66 3,714,870 $ 19.43

Restricted stock units granted 42,770 $ 9.01 4,545,824 $ 5.72

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Outstanding and unvested at December 31, 2024 285,429 $ 10.42 5,558,642 $ 8.27

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Employee Stock Purchase Plan

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The Company’s foreign subsidiaries have pension plans under local tax and labor laws and are obligated to make contributions to the plan.

Contributions and other expenses related to this plan were $ 3.0 million, $ 2.4 million, and $ 1.7 million in 2023, 2022, and 2021, respectively.

Contributions and other expenses related to these plans were $ 2.6 million, $ 3.0 million, and $ 2.4 million in 2024, 2023, and 2022, respectively.

Note 15 – Other Financial Information

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Property and equipment, net $ 138,413 $ 305,771

As of December 31, 2023 and 2022, approximately $ 155 million and $ 170 million, respectively, of net assets used in operations were located in the Czech Republic.

On December 30, 2024, the Company sold approximately $ 135 million of property and equipment, net, representing the Company’s biologics manufacturing campus and other moveable assets and equipment located in the Czech Republic (see

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Depreciation expense was approximately $ 48 million, $ 41 million, and $ 29 million for the years ended December 31, 2024, 2023, and 2022, respectively.

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Gross-to-net deductions

18,821 20,616

product sales returns accrual

58,259 82,506

Research and development accruals 37,847 131,027

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$ 87,901 $ 142,165

Other current liability related to Gavi (see Note 3)

Due to UK Authority (see Note 3)

Due to Gavi (see Note 3)

85,000 696,390

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Note 16 – Income Taxes

The Company’s loss before income tax expense by jurisdiction is as follows (in thousands):

The Company’s income (loss) before income tax expense by jurisdiction is as follows (in thousands):

Year Ended December 31,

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12,307 ( 12 ) 4,292

( 1,423 ) 2,043 —

Total income tax expense $ 10,884 $ 2,031 $ 4,292

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— % ( 1 ) % — %

Deferred tax asset write down

( 13 ) % — % — %

Non-US tax credits

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As of December 31, 2024, the Company has available federal and state net operating losses of $ 2.4 billion, $ 785.1 million, respectively, that may be applied against future taxable income in the respective jurisdiction.

The federal net operating losses of $ 2.4 billion can be carried forward indefinitely, with all but $ 11.3 million, which expires in 2037, limited to 80% of annual taxable income.

The federal net operating losses of $ 2.4 billion can be carried forward indefinitely, with all but $ 9.6 million, which expires in 2037, limited to use equal to 80% of future annual federal taxable income.

State net operating losses of $ 434.1 million have various expiration dates between 2030 and 2044.

The remaining state net operating losses of $ 351.0 million can be carried forward indefinitely.

The Company also has research tax credits of $ 51.9 million that will begin to expire in 2024 through 2043 and a foreign tax credit carryforward of $ 18.7 million that will expire in 2030.

Utilization of the federal and state net operating loss carryforwards and research tax credits may be subject to an annual limitation due to potential ownership changes of the Company.

The Company also has federal research tax credits of $ 51.3 million that will expire from 2025 through 2045 and a state research tax credit of $ 1.2 million that will expire from 2040 through 2042.

Utilization of the federal and state net operating loss carryforwards and research tax credits may be subject to an annual limitation due to potential future ownership changes of the Company.

As of December 31, 2024, the Company does not expect such limitation, if any, to impact the use of its net operating losses and research tax credits.

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Federal and state net operating loss carryforward $ 551,261 $ 550,272

Foreign net operating loss carryforward — 5,752

Research tax credits 51,343 51,878

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Allowance for sales returns

13,397 20,756

Non-cash stock-based compensation 22,376 30,727

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Intangibles ( 999 ) ( 1,279 )

Other — ( 704 )

Total deferred tax liabilities $ ( 42,650 ) $ ( 59,895 )

Net deferred tax assets (liabilities) $ ( 2,043 ) $ —

The Company has evaluated the positive and negative evidence bearing upon the realization of its deferred tax assets, including its history of significant losses in every year since inception and, in accordance with U.S GAAP, has fully reserved the net deferred tax asset.

Net deferred tax liabilities

$ ( 402 ) $ ( 2,043 )

The Company concluded that realization of its net deferred tax assets is not more-likely-than-not to be realized as of December 31, 2024 and 2023.

The valuation allowance increased by $ 108.8 million and $ 4.8 million for the years ended December 31, 2023 and 2022, respectively.

The net deferred tax liability of $ 2.0 million at December 31, 2023 is included within other non-current liabilities on the accompanying consolidated balance sheet.

The valuation allowance increased by $ 6.6 million and $ 108.8 million for the years ended December 31, 2024 and 2023, respectively, due to the pretax book losses recognized during these years.

The net deferred tax liability of $ 0.4 million and $ 2.0 million at December 31, 2024 and 2023, respectively, is included within other non-current liabilities on the accompanying consolidated balance sheet.

The Company recognizes the effect of an income tax position when it is more likely than not, based on the technical merits, that the income tax position will be sustained upon examination.

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Reductions for tax positions of prior year ( 137 ) ( 1,228 ) ( 8,027 )

Settlements of tax positions of prior years — — —

Unrecognized tax benefits balance at December 31, $ 4,100 $ 4,237 $ 5,194

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This guidance imposes a 15% minimum tax on the earnings of large multinational corporations.

Pillar Two is expected to be effective in 2024 for the jurisdictions in which the Company operates.

The Company is currently evaluating the application of Pillar Two and does not expect these rules to have a significant impact on its effective tax rate or its consolidated financial statements.

Pillar Two is effective in 2024 for the jurisdictions in which the Company operates.

The Company does not expect these rules to have a significant impact on its effective tax rate or its consolidated financial statements.

Note 17 – Commitment and Contingencies

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8:21-cv-02910-TDC (the “Sinnathurai Action”).

On January 26, 2022, the Maryland Court entered an order designating David Truong, Nuggehalli Balmukund Nandkumar, and Jeffrey Gabbert as co-lead plaintiffs in the Sinnathurai Action.

The co-lead plaintiffs filed a consolidated amended complaint on March 11, 2022, alleging that the defendants made certain purportedly false and misleading statements concerning the Company’s ability to manufacture prototype vaccine on a commercial scale and to secure the prototype vaccine’s regulatory approval.

The amended complaint defines the purported class as those stockholders who purchased the Company’s securities between February 24, 2021 and October 19, 2021.

On April 25, 2022, the defendants filed a motion to dismiss the consolidated amended complaint.

On December 12, 2022, the Maryland Court issued a ruling granting in part and denying in part defendants’ motion to dismiss.

The Maryland Court dismissed all claims against two individual defendants and claims based on certain public statements challenged in the consolidated amended complaint.

The Maryland Court denied the motion to dismiss as to the remaining claims and defendants, and directed the Company and other remaining defendants to answer within fourteen days .

On December 27, 2022, the Company filed its answer and affirmative defenses.

On March 16, 2023, the plaintiffs filed a motion for class certification and to appoint class representatives and counsel.

Due to the Maryland Court’s ruling on the dismissal motion, the motion sought to certify a class of stockholders who purchased the Company’s securities between May 11, 2021, and October 19, 2021.

The Company filed its opposition to the plaintiffs’ motion on September 22, 2023.

On December 4, 2023, the parties agreed to a binding settlement in principle (the “Proposed Settlement”) to fully resolve the surviving claims in the Sinnathurai Action.

Under the Proposed Settlement’s terms, the Company agreed to pay $47 million into a settlement fund, which will be funded by the Company’s directors and officers’ liability insurance and paid to members of a putative settlement class.

On January 12, 2024, after the parties negotiated and executed a written agreement governing the Proposed Settlement, plaintiffs filed an unopposed motion for the Proposed Settlement’s preliminary approval.

On January 23, 2024, the Maryland Court granted the motion for preliminary approval and, as requested by the parties, preliminarily certified, for the purposes of settlement only, the settlement class.

The court also scheduled a settlement hearing to consider final approval of the settlement for May 23, 2024.

The parties ultimately negotiated a settlement, which the Maryland Court approved on May 23, 2024.

The Maryland Court closed the Sinnathurai Action on May 24, 2024.

Upon the Maryland Court’s final approval, the Company relieved the $ 47 million estimated settlement liability within Accrued expenses and the $ 47 million estimated insurance recovery within Prepaid expenses and other current assets on the consolidated balance sheet.

After the Sinnathurai Action was filed, eight derivative lawsuits were filed:

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The Meyer, Yung, Snyder, and Blackburn Actions were filed in the Maryland Court.

The Kirst and Needelman Actions were filed in the Circuit Court for Montgomery County, Maryland.

The Kirst Action was filed in the Circuit Court for Montgomery County, Maryland, and shortly thereafter removed to the Maryland Court by the defendants.

The Needelman Action was also filed in the Circuit Court for Montgomery County, Maryland.

The Mesa and Acosta Actions were filed in the Delaware Court of Chancery (the “Delaware Court”).

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The Company is deemed a nominal defendant.

The plaintiffs assert derivative claims arising out of

substantially the same alleged facts and circumstances as the Sinnathurai Action.

The plaintiffs assert derivative claims arising out of substantially the same alleged facts and circumstances as the Sinnathurai Action.

Collectively, the derivative complaints assert claims for breach of fiduciary duty, insider selling, unjust enrichment, violation of federal securities law, abuse of control, waste, and mismanagement.

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The plaintiffs filed their opposition to the motion to dismiss on April 11, 2023.

Defendants filed their reply brief in further support of their motion to dismiss on May 11, 2023.

Defendants filed their reply brief in further support of their

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motion to dismiss on May 11, 2023.

On August 21, 2023, the court entered an order granting in part and denying in part the motion to dismiss.

the court allowed claims for alleged insider selling under Brophy v.

Cities Service Co., et al., 70 A.2d 5 (Del.

1949) and unjust enrichment claims to proceed, but dismissed the remaining claims in the second consolidated amended complaint.

On September 5, 2023, the Company filed an Answer to the consolidated amended complaint.

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On October 6, 2023, the Board of Directors of the Company formed a Special Litigation Committee (“SLC”) with full and exclusive power and authority of the Board to, among other things, investigate, review, and analyze the facts and circumstances surrounding the claims asserted in the pending derivative actions, including the claims that remain following the court’s order on the motion to dismiss in the Second Consolidated Derivative Action.

On November 7, 2023, the court entered an order granting the parties’ request to stay the Second Consolidated Derivative Action for up to six months from the date of entry of the order.

This includes staying the deadline for the individual defendants to respond to the consolidated amended complaint.

On November 7, 2023, the court entered an order granting the parties’ request to stay the Second Consolidated Derivative Action for up to six months from the date of entry of the order, and, on April 15, 2024, the court entered a further order extending the stay until June 6, 2024.

On June 7, 2024, the court entered another order extending the stay until August 5, 2024.

On August 19, 2024, the court entered another order extending the stay until November 4, 2024, to allow the SLC and the parties to continue then-ongoing mediation efforts.

On November 1, 2024, the parties notified the court that a settlement in principle had been reached and requested the stay to be extended until the definitive settlement agreement was filed.

On November 22, 2024, the SLC filed its Unopposed Motion for Preliminary Approval of Derivative Settlement, Approval of Form and Manner of Notice, and Setting Hearing Date on Final Approval of Settlement and supporting documents.

Under the terms of the proposed settlement, individual defendants Erck and Herrmann agreed to pay or cause their insurers to pay $ 6.8 million to Novavax in exchange for a release of claims.

In addition, Novavax and its Board of Directors agreed to adopt and implement certain governance provisions identified in the settlement stipulation.

On December 12, 2024, the court entered an order granting preliminary approval of the derivative settlement and setting a date for a hearing on the final approval of the settlement.

The hearing for final consideration of the proposed settlement is presently scheduled to be held on March 7, 2025 at 9:30 a.m.

EST at the United States District Court for the District of Maryland, Southern Division, 650 Cherrywood Lane, Greenbelt, MD 20770.

A copy of the settlement agreement, together with the Notice, can be found on the “Investor Hub” section of Novavax’s website.

The date and time of the final fairness hearing may change.

Any updates to the date or time of the final fairness hearing can also be found on the “Investor Hub” section of Novavax’s website or on the Maryland Court’s website.

The contents of Novavax’s website are not incorporated by reference into this Annual Report on Form 10-K and you should not consider information provided on Novavax’s website to be part of this Annual Report on Form 10-K.

The Kirst Action was filed on December 28, 2021, and the defendants immediately removed the case to the Maryland Court.

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On October 3, 2022, the Delaware Court entered an order granting the parties’ request to stay all proceedings and deadlines in the Mesa Action pending the earlier of dismissal of the Sinnathurai Action or the filing of an answer to the operative complaint in the Sinnathurai Action.

On January 18, 2023, defendants filed a motion to stay the Mesa Action pending a final judgment in the Second Consolidated Derivative Action.

The plaintiff filed his opposition on February 8, 2023.

Defendants filed their reply on February 22, 2023.

On February 28, 2023, the court granted the defendants’ motion to stay.

On August 31, 2023, the plaintiff filed a motion to lift the stay.

On January 9, 2023, following the ruling on the motion to dismiss the Sinnathurai Action, the Delaware Court entered an order granting the Mesa Action parties’ request to set a briefing schedule in connection with a motion to stay by defendants.

On February 28, 2023, the court granted the defendants’ motion and stayed the Mesa Action pending the entry of a final, non-appealable judgment in the Second Consolidated Derivative Action.

On August 31, 2023, the Mesa plaintiffs filed a motion to lift the stay in the Mesa Action.

On October 6, 2023, the Company filed an opposition to plaintiff’s motion to lift the stay.

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On October 13, 2023, the parties filed, and the Delaware Court entered, a stipulated order providing that (i) if the Delaware Court declines to lift the stay in the Mesa Action, the Acosta Action will also remain stayed, and (ii) if the Delaware Court lifts the stay in the Mesa Action, the stay in the Acosta Action will also be lifted.

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On April 17, 2023, the Needelman Action was filed.

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The court entered that order on July 17, 2023.

The parties continue to discuss next steps in the litigation following the Maryland Court’s ruling on the motion to dismiss the Second Consolidated Derivative Action.

The court entered that order on July 17, 2023.

On November 30, 2023, the court entered an order consolidating the Kirst and Needelman Actions.

On December 14, 2023, the parties filed a stipulation (i) extending the plaintiffs’ deadline to file a consolidated complaint until January 29, 2024, and (ii) otherwise staying all other proceedings in the case (including the defendants’ deadline to respond to the consolidated complaint) until February 12, 2024.

The stipulation entered by the court instructs the parties to discuss whether the stay should be further extended in light of the then-current status of the SLC’s investigation.

The financial impact of the derivative claims is not estimable.

On November 18, 2022, the Company delivered written notice to Gavi to terminate the Gavi APA based on Gavi’s failure to procure the purchase of 350 million doses of prototype vaccine from the Company as required by the Gavi APA.

As of November 18, 2022, the Company had only received orders under the Gavi APA for approximately 2 million doses.

Since December 31, 2022, the remaining Gavi Advance Payment Amount, which is $ 696.4 million as of December 31, 2023, pending resolution of the dispute with Gavi related to a return of the remaining Advance Payment Amount, has been classified within Other current liabilities in the Company’s consolidated balance sheet.

On January 24, 2023, Gavi filed a demand for arbitration with the International Court of Arbitration based on the claims described above.

The Company filed its Answer and Counterclaims on March 2, 2023.

On April 5, 2023, Gavi filed its Reply to the Company’s Counterclaims.

Pursuant to the Gavi Settlement Agreement, the Company is responsible for payment to Gavi of (i) an initial settlement payment of $ 75 million, which the Company paid on February 20, 2024, and (ii) deferred payments, in equal annual amounts of $ 80 million payable each calendar year through a deferred payment term ending December 31, 2028.

The deferred payments are due in variable quarterly installments beginning in the first quarter of 2024 and total $ 400 million during the deferred payment term.

Such deferred payments may be reduced through Gavi’s use of an annual vaccine credit equivalent to the unpaid balance of such deferred payments each year, which may be applied to qualifying sales of any of the Company’s vaccines funded by Gavi for supply to certain low-income and lower-middle income countries.

The Company has the right to price the vaccines offered to such low-income and lower-middle income countries at its discretion, and, when utilized by Gavi, the Company will credit the actual price per vaccine paid against the applicable credit.

The Company intends to price vaccines offered via the tender process, consistent with its shared goal with Gavi to provide equitable access to those countries.

On February 22, 2024, the claims and counterclaims were dismissed with prejudice.

On September 30, 2022, the Company and Fujifilm entered into the Fujifilm Settlement Agreement regarding amounts due to Fujifilm in connection with the termination of manufacturing activity at FDBT under the CSA dated August 20, 2021 and the MSA by and between the Company and Fujifilm.

The MSA and CSA established the general terms and conditions applicable to Fujifilm’s manufacturing and supply activities related to the Company’s prototype vaccine under the associated statements of work.

Any replacement revenue achieved by Fujifilm’s mitigation efforts between July 1, 2023 and December 31, 2023 would offset the final two settlement payments owed by the Company.

The Company withheld two installments of $ 34.3 million due to Fujifilm on September 30, 2023 and December 31, 2023, pending resolution of the issues identified in the notice of breach.

On October 30, 2023, FDBT filed a demand for arbitration with Judicial Arbitration and Mediation Services (“JAMS”) seeking payment of the third quarter installment of the Settlement Payment.

An arbitration hearing has been scheduled for May 2024.

As of December 31, 2023, the remaining payment of $ 68.6 million was reflected in Accrued expenses.

On May 3, 2024, the plaintiffs filed a consolidated complaint.

On May 14, 2024, the parties filed a stipulation staying the action until June 6, 2024.

On July 12, 2024, the court entered an order staying the action until August 5, 2024.

On September 24, 2024, the court entered another order staying the action until November 4, 2024.

On November 4, 2024, the parties filed a stipulation requesting a status conference with the court and further requesting that the action remain stayed until such status conference takes place.

To date, the court has not scheduled a status conference.

The financial impact of the First Consolidated Derivative action is described above and is dependent on the court’s approval of the settlement.

The financial impact of the Mesa, Kirst and Needleman Actions referenced above are not estimable.

The Company is also involved in various other legal proceedings arising in the normal course of business.

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The Company has entered into agreements in the normal course of business with CMOs and CDMOs supplying the Company with production capabilities, and with vendors for preclinical studies, clinical trials, and other goods or services.

A number of these arrangements are within the scope of lease accounting (see Note 9).

Certain agreements provide for termination rights subject to termination fees.

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The Company did not accrue obligations that were not reasonably estimable.

As of December 31, 2023, the Company had no non-cancelable purchase commitments with a remaining term of more than one year.

As of December 31, 2024, the Company had $ 2.8 million of non-cancelable purchase commitments with a remaining term of more than one year.

Note 18 – Restructuring

As of December 31, 2023, the restructuring charge recorded by the Company comprised (in thousands):

The restructuring charge recorded by the Company consisted of the following (in thousands):

Year Ended December 31,

2024 2023 2022

Severance and employee benefit costs $ 12,829 $ 4,503 $ —

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Total Restructuring charge (1)

(1) Restructuring charges of $ 0.5 million, $ 2.3 million and $ 11.5 million are included in Cost of sales, Research and development and Selling, general, and administrative expenses, respectively, in the Consolidated Statements of Operations for the period ended December 31, 2023.

$ 16,961 $ 14,584 $ —

(1) Restructuring charges of $ 1.0 million, $ 2.4 million and $ 13.6 million are included in Cost of sales, Research and development and Selling, general, and administrative expenses, respectively, in the Consolidated Statements of Operations for 2024.

Restructuring charges of $ 0.5 million, $ 2.3 million and $ 11.5 million are included in Cost of sales, Research and development and Selling, general, and administrative expenses, respectively, in the Consolidated Statements of Operations for 2023.

These charges reflect substantially all expected restructuring charges under the Restructuring Plan.

No restructuring charges were recorded during 2022.

Severance and employee benefit costs

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The Company recorded a severance and termination benefit cost in full for employees who were notified of their termination during the year ended December 31, 2024 and had no requirements for future service.

The Company fully paid $ 4.5 million for severance and employee benefit costs during the year ended December 31, 2023 and no remaining liability for the severance and employee benefit costs is included in the Company’s consolidated balance sheet as of December 31, 2023.

There were no severance and employee benefit costs during the year ended December 31, 2022 and 2021.

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Company paid $ 9.8 million for severance and employee benefit costs during the year ended December 31, 2024 and $ 3.1 million remaining liability for the severance and employee benefit costs is included in Accrued expenses in the Company’s consolidated balance sheet as of December 31, 2024.

The Company recorded and fully paid a severance and employee benefit costs of $ 4.5 million during the year ended December 31, 2023.

There were no severance and employee benefit costs during the year ended December 31, 2022.

Impairment of long-lived assets

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The evaluation is subject to judgment and actual results may vary from the estimates, resulting in potential future adjustments to amounts recorded.

During the year ended December 31, 2023, the Company recorded an impairment charge of $ 10.1 million related to the impairment of long-lived assets, including $ 5.9 million related to ROU assets for facility leases.

There were no impairment charges recorded during the year ended December 31, 2022 and 2021.

Note 18 – Subsequent Events

On January 31, 2024, the Company announced that the Board of Directors of the Company approved an approximately 12 % reduction of its global workforce, comprised of an approximately 9 % reduction in the Company’s full-time employees and the remainder comprised of contractors and consultants.

On February 16, 2024, the Company and Gavi entered into the Gavi Settlement Agreement terminating the Gavi APA, settling the arbitration proceedings and releasing both parties of all claims arising from, under or otherwise in connection with the Gavi APA.

The terms of the Gavi Settlement Agreement are outlined in Note 3 and Note 16.

During the year ended December 31, 2024 and 2023, the Company recorded an impairment charge of $ 4.1 million and $ 10.1 million, respectively, related to the impairment of long-lived assets, including $ 5.9 million related to ROU assets for facility leases in 2023.

There were no impairment charges recorded during the year ended December 31, 2022.

Note 19 – Disposition of Assets

On December 30, 2024, Novavax CZ a.s.

(“CZ”), a wholly-owned subsidiary of the Company, completed the sale of its biologics manufacturing campus located at Bohumil, Czech Republic (the “Facility”) to Novo Nordisk Production Czech s.r.o.

(the “Purchaser”), pursuant to an asset purchase agreement, dated as of December 3, 2024 (the “Asset Purchase Agreement”).

Under the Asset Purchase Agreement, CZ sold, transferred and assigned to the Purchaser:

(i) land and properties that comprise the Facility, as well as certain moveable assets and equipment located at the Facility (the “Transferred Assets”);

(ii) contracts related to the operation and management of the Transferred Assets (the “Transferred Contracts”);

and (iii) certain employees providing services related to the Transferred Assets (the “Transferred Employees”).

The total purchase price for the sale was $ 202.6 million and the assumption by the Purchaser of liabilities (on a look-forward basis) pertaining to the Transferred Assets, Transferred Contracts and Transferred Employees.

On the closing date, the Company received a cash payment of $ 180 million, net of the initial payment of $ 10 million made in October 2024 and $ 10 million placed in an escrow account to be released to the Company on the date which is 12 months following the closing date (subject to adjustment for any claims the Purchaser may have against the Seller under the Asset Purchase Agreement).

Pursuant to the terms of the Asset Purchase Agreement, the Company was also reimbursed $ 2.6 million, subject to adjustments, for costs incurred in continuing to operate and maintain the Transferred Assets, Transferred Contracts and Transferred Employees between December 3, 2024 and the completion of the sale.

The Company recognized a gain on the sale of $ 51.9 million, which has been reflected in Other income in the Company's consolidated income statement for the year ended December 31, 2024.

No gain on sale was recognized in the year ended December 2023 and 2022.

The disposition qualified as the sale of a business pursuant to ASC Topic 805, Business Combinations, and therefore, the Company allocation goodwill of $ 12.4 million to the sale on a relative fair value basis.

Note 20 – Segment Reporting

The Company manages its business as one reportable operating segment, in-house early-stage R&D to build a pipeline of high-value assets using its proven technology along with seeking to enter into partnerships to drive value creation for its assets.

The Company has determined its reportable operating segment based on the management approach, which considers the internal organization and reporting used by the Company’s CODM to make decisions about allocating resources and assessing the Company’s performance.

The Company’s CODM uses consolidated single-segment net loss as reported in the Consolidated Statements of Operations to evaluate performance, forecast future period financial results, allocate resources, and set incentive targets.

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The table below summarizes the significant expense categories regularly reviewed by the CODM (in thousands):

Year Ended December 31,

2024 2023 2022

$ 682,162 $ 983,705 $ 1,981,872

Cost of sales

202,739 343,768 902,639

Research and development expenses:

Direct coronavirus vaccines (1)

122,445 413,448 848,042

Direct other vaccine development programs (1)

4,632 3,241 9,821

Employee and benefit expenses

163,728 210,589 246,733

Facility and other research and development expenses (2)

100,364 110,224 130,682

Selling, general, and administrative expense

337,185 468,946 488,691

Other segment income (expense) (3)

61,432 21,449 ( 13,203 )

$ ( 187,499 ) $ ( 545,062 ) $ ( 657,939 )

(1) Direct research and development expenses are comprised primarily of costs paid to third parties for clinical and product development activities.

(2) Facility and other research and development expenses consist of indirect costs incurred in support of overall research and development activities and non-specific programs, such as overhead costs, information technology and facility-based expenses not allocated to a specific program.

(3) Other segment income (expense) includes interest expense, gain on disposition of Novavax CZ assets, income tax expense, and other income.

Total revenue by the Company’s customer’s or collaboration partner’s geographic location was as follows (in thousands):

Year Ended December 31,

2024 2023 2022

United States

$ 522,535 $ 443,894 $ 382,921

Rest of North America

4,462 13,388 194,480

Europe 96,143 271,964 826,829

Rest of the world

59,022 254,459 577,642

Total revenue

$ 682,162 $ 983,705 $ 1,981,872

Total long-lived assets of the Company by geographic location were as follows (in thousands):

United States

$ 295,879 $ 328,915

Europe 4,119 162,074

Total long-lived assets

$ 299,998 $ 490,989

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

What changed 10-K

Item 9A. Controls and Procedures