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Item 8. Financial Statements and Supplementary Data

2025-03-18 compared with 2024-03-25 · 239 added, 379 removed, 680 unchanged (48% of the section changed)

Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated and Combined Balance Sheets

Consolidated and Combined Statements of Operations and Comprehensive Loss

Consolidated and Combined Statements of Stockholders’ Equity

Consolidated and Combined Statements of Cash Flows

Notes to Consolidated and Combined Financial Statements

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

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Opinion on the Financial Statements

We have audited the accompanying consolidated and combined balance sheets of OmniAb, Inc.

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

In our opinion, the consolidated and combined financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with U.S.

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

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the two 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 two years in the period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

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March 18, 2025

CONSOLIDATED AND COMBINED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

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Accrued expenses and other current liabilities 6,141 7,068

Income tax payable — 3,485

Current contingent liabilities 531 1,303

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Accumulated other comprehensive income 27 50

Retained earnings (accumulated deficit)

Accumulated deficit

( 101,400 ) ( 39,367 )

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Total liabilities and stockholders’ equity $ 325,558 $ 375,225

See accompanying notes to these consolidated and combined financial statements.

CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

See accompanying notes to these consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

Year Ended December 31,

License and milestone revenue $ 13,866 $ 20,699

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Royalty revenue 576 1,285

Total revenues 34,164 59,077

Total revenue

26,391 34,164

Operating expenses:

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Amortization of intangibles 17,407 13,554

Other operating (income) expense, net 191 ( 592 )

Other operating expense (income), net

( 2,365 ) 191

Total operating expenses 100,893 103,583

Loss from operations ( 74,502 ) ( 69,419 )

Other income (expense):

Other income (expense), net:

Interest income 3,106 5,055

Other income, net 1 —

Total other income, net 5,056 587

Loss before income tax ( 64,363 ) ( 26,061 )

Other income (expense), net

Total other income (expense), net

Loss before income taxes

( 71,411 ) ( 64,363 )

Income tax benefit 9,378 13,744

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Weighted-average shares outstanding, basic and diluted 102,365 99,683

See accompanying notes to these consolidated financial statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

Year Ended December 31,

Net loss $ ( 62,033 ) $ ( 50,619 )

Unrealized net gain on available-for-sale securities 41 9

Unrealized net gain (loss) on available-for-sale securities

Comprehensive loss $ ( 62,056 ) $ ( 50,578 )

See accompanying notes to these consolidated and combined financial statements.

CONSOLIDATED AND COMBINED STATEMENT OF STOCKHOLDERS’ EQUITY

See accompanying notes to these consolidated financial statements.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

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comprehensive

income (loss)

(accumulated deficit)

Parent company net investment Total

stockholders’

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115,218,229 $ 12 $ 330,100 $ 9 $ 11,252 $ 341,373

Parent allocation of shared-based compensation — — — — — 14,444 14,444

Net transfers from parent company — — — — — 15,047 15,047

Consummation of Separation transaction 97,611,032 10 230,202 — — ( 230,212 ) —

Issuance of common stock upon Business Combination, net of transaction costs 17,209,070 2 95,767 — — — 95,769

Issuance of common stock under employee stock compensation plans, net of tax 398,127 — 253 — — — 253

Issuance of common stock under stock compensation plans, net of tax 1,641,239 — 1,523 — — 1,523

Share-based compensation — — 24,820 — — 24,820

Unrealized net gain on available-for-sale securities — — — 41 — 41

Net income (loss) — — — — 11,252 ( 33,586 ) ( 22,334 )

Adjustments to net transfers of deferred income taxes, net from former parent company — — ( 2,553 ) — — ( 2,553 )

Net loss — — — — ( 50,619 ) ( 50,619 )

Balance at December 31, 2023 116,859,468 12 353,890 50 ( 39,367 ) 314,585

Issuance of common stock under employee stock compensation plans, net of tax 1,641,239 — 1,523 — — — 1,523

Issuance of common stock under stock compensation plans, net of tax 1,968,828 — 2,297 — — 2,297

Share-based compensation — — 21,499 — — 21,499

Unrealized net gain on available-for-sale securities — — — 41 — — 41

Adjustments to net transfers of deferred income taxes, net from former parent company — — ( 2,553 ) — — — ( 2,553 )

Unrealized net loss on available-for-sale securities — — — ( 23 ) — ( 23 )

Issuance of common stock under ATM facility, net of commissions and issuance costs 2,771,192 — 11,293 — — 11,293

Net loss — — — — ( 62,033 ) ( 62,033 )

Balance at December 31, 2024

See accompanying notes to these consolidated and combined financial statements.

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

121,599,488 $ 12 $ 388,979 $ 27 $ ( 101,400 ) $ 287,618

See accompanying notes to these consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

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Change in estimated fair value of contingent liabilities ( 2,547 ) ( 341 )

Other operating activities 100 190

Changes in operating assets and liabilities, net

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Other long-term assets 645 642

Accounts payable, accrued expenses, and other current liabilities 936 15,068

Accounts payable, accrued expenses, and other liabilities

( 2,410 ) 920

Operating lease liabilities ( 2,436 ) ( 563 )

Deferred revenue ( 5,988 ) ( 5,347 )

Other long-term liabilities ( 16 ) 17

Net cash provided by (used in) operating activities

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Proceeds from the maturity of short-term investments

78,000 96,900

Proceeds from sale of short-term investments 2,447 3,424

Payments to CVR holders ( 4,440 ) ( 1,440 )

Net cash used in investing activities ( 18,376 ) ( 73,313 )

Payments of contingent liabilities

( 400 ) ( 4,440 )

Net cash provided by (used in) investing activities

37,884 ( 18,376 )

Financing activities:

Proceeds from consummation of separation transaction — 1,842

Proceeds from issuance of common stock in Business Combination — 96,242

Proceeds from issuance of common stock from stock plans, net

Proceeds from issuance of common stock from stock compensation plans

Taxes paid related to net share settlement of equity awards

( 960 ) ( 1,324 )

Payments to CVR holders ( 300 ) ( 2,025 )

Payments of contingent liabilities

( 75 ) ( 300 )

Payment of transaction costs

( 571 ) ( 473 )

Net transfer from parent — 18,572

Proceeds from issuance of common stock under ATM facility, net of commissions

Net cash provided by (used in) financing activities

13,020 ( 892 )

Net increase in cash, cash equivalents, and restricted cash ( 16,921 ) 33,839

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

11,240 ( 16,921 )

Cash, cash equivalents and restricted cash at beginning of year 16,918 33,839

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Transaction cost recorded in accounts payable $ 15 $ 370

See accompanying notes to these consolidated and combined financial statements.

Notes to Consolidated and Combined Financial Statements

See accompanying notes to these consolidated financial statements.

Notes to Consolidated Financial Statements

Organization and Basis of Presentation

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(“OmniAb” or the “Company”, formerly known as Avista Public Acquisition Corp.

II (“APAC”)) is a biotechnology company with a Biological Intelligence powered multi-species antibody platform for the discovery of mono and bispecific therapeutic human antibodies.

II (“APAC”)) is a biotechnology company that licenses cutting-edge discovery research technology to the pharmaceutical and biotech industries and academic institutions to enable the discovery of next-generation therapeutics.

The Company’s technology platform creates and screens diverse antibody repertoires and is designed to quickly identify optimal antibodies and other target-binding proteins for its partners’ drug development efforts.

At the heart of the OmniAb platform is something the Company calls Biological Intelligence™, which powers the immune systems of its proprietary, engineered transgenic animals to create optimized antibody candidates for human therapeutics.

The Company primarily derives revenue from license fees for technology access, milestones from partnered programs and service revenue from research programs.

Separation and Business Combination

On November 1, 2022 (the “Closing Date”), the Company, Ligand Pharmaceuticals Incorporated, a Delaware corporation (“Ligand” or the “Parent”), OmniAb Operations, Inc., a Delaware corporation and wholly-owned subsidiary of Ligand (“Legacy OmniAb”, formerly known as OmniAb, Inc.

and, together with Ligand, collectively, the “Companies”), and Orwell Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of APAC (“Merger Sub”), consummated the transactions contemplated by the Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 23, 2022.

In connection with, and as contemplated by, the Merger Agreement, on November 1, 2022, in accordance with the terms of the Separation and Distribution Agreement, dated as of March 23, 2022, by and among APAC, Ligand and Legacy OmniAb (the “Separation Agreement”), Ligand transferred the Legacy OmniAb business, including certain related subsidiaries of Ligand, to Legacy OmniAb and made a contribution to the capital of Legacy OmniAb of $ 1.8 million, after deducting certain transaction and other expenses reimbursable by Legacy OmniAb (the “Separation”).

Following the Separation, as contemplated by the Separation Agreement, Ligand distributed on a pro rata basis to its stockholders all of the shares of common stock, par value $ 0.001 per share, of Legacy OmniAb (“Legacy OmniAb Common Stock”) held by Ligand, such that each holder of shares of common stock, par value $ 0.001 per share, of Ligand (“Ligand Common Stock”) was entitled to receive one share of Legacy OmniAb Common Stock for each share of Ligand Common Stock held by such holder as of the record date for the distribution, October 26, 2022 (the “Distribution”).

Following the Separation and Distribution, on November 1, 2022, Merger Sub merged with and into Legacy OmniAb, with Legacy OmniAb surviving as a direct, wholly owned subsidiary of OmniAb (the “Business Combination”).

See Note 4 – Business Combination, for further details.

The Business Combination was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“U.S.

Under this method of accounting, APAC was treated as the acquired company and Legacy OmniAb was treated as the acquirer for financial reporting purposes.

Accordingly, for accounting purposes, the reverse recapitalization was treated as the equivalent of Legacy OmniAb issuing stock for the net assets of APAC, accompanied by a recapitalization.

The consolidated and combined assets, liabilities and results of operations prior to the Business Combination are those of Legacy OmniAb, and the assets, liabilities and results of operations of APAC were consolidated with Legacy OmniAb beginning on the Closing Date.

The net assets of APAC are stated at historical cost, with no goodwill or other intangible assets recorded.

Legacy OmniAb was determined to be the accounting acquirer based on the following predominant factors:

• Legacy OmniAb’s existing stockholders have the greatest voting interest in the Company with approximately 85 % of the voting interest;

• Legacy OmniAb nominated a majority of the initial members of the Company’s board of directors;

• Legacy OmniAb’s senior management is the senior management of the Company;

• Legacy OmniAb is the larger entity based on historical operating activity and has the larger employee base;

• The post-combination company assumed a Legacy OmniAb branded name:

“OmniAb, Inc.”

Business Combination

On November 1, 2022 (the “Closing Date”), the Company, Ligand Pharmaceuticals Incorporated, a Delaware corporation (“Ligand”), OmniAb Operations, Inc., a Delaware corporation and wholly-owned subsidiary of Ligand (“Legacy OmniAb”, formerly known as OmniAb, Inc.), and Orwell Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of APAC (“Merger Sub”), consummated the transactions contemplated by the Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 23, 2022 (the “Business Combination”).

Basis of Presentation

The Company’s accompanying consolidated and combined financial statements have been prepared in accordance with U.S.

The Company’s accompanying consolidated financial statements have been prepared in accordance with U.S.

Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S.

GAAP as included in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”).

Certain prior period amounts in the consolidated and combined financial statements have been reclassified to conform to the current period presentation.

Periods prior to Separation

The accompanying combined financial statements for periods prior to the Separation have been prepared on a stand-alone basis and are derived from Ligand’s consolidated financial statement accounting records.

The operations comprising Legacy OmniAb were in various legal entities wholly owned by Ligand.

Accordingly, Ligand’s net investment in these operations is shown in lieu of stockholder’s equity in the combined financial statements.

Legacy OmniAb comprised certain stand-alone legal entities for which discrete financial information was available.

As Ligand recorded transactions at the legal entity level, allocation methodologies were applied to certain accounts to allocate amounts to Legacy OmniAb, as discussed further below.

Legacy OmniAb entities were under the common control of Ligand as a result of, among other factors, Ligand’s ownership.

As the entities were under common control, the financial statements report the financial position, results of operations and cash flows of Legacy OmniAb as though the transfer of net assets and equity interests had occurred as of January 2016.

Transactions between Ligand and Legacy OmniAb were accounted through Parent company net investment in Legacy OmniAb.

The total net effect of the settlement of these intercompany transactions is reflected in Legacy OmniAb’s combined balance sheets as Parent company net investment in Legacy OmniAb.

All significant intercompany transactions with Ligand are deemed to have been paid in the period the costs were incurred.

Expenses related to corporate allocations from Ligand to Legacy OmniAb were considered to be effectively settled for cash in the combined financial statements at the time the transaction was recorded.

The combined financial statements include all revenues, expenses, assets and liabilities directly associated with the business activity of Legacy OmniAb as well as an allocation of certain general and administrative expenses related to facilities, functions and services provided by Ligand.

These corporate expenses have been allocated to Legacy OmniAb based on direct usage or benefit, where identifiable, with the remainder allocated based on headcount or a percentage of total operating expenses or other measures that management believes are consistent and reasonable.

See Note 3 – Relationship with Ligand and Related Entities.

Ligand maintained various share-based compensation plans at a corporate level.

Legacy OmniAb employees participated in those programs, and a portion of the compensation cost associated with those plans are included in Legacy OmniAb’s combined statements of operations and Parent company net investment.

The amounts presented in the combined financial statements are not necessarily indicative of future awards and may not reflect the results that Legacy OmniAb would have experienced as a stand-alone entity.

See Note 3 – Relationship with Ligand and Related Entities for additional discussion.

All of the allocations and estimates in the combined financial statements are based on assumptions that management believes are reasonable.

However, the combined financial statements included herein may not be indicative of the financial position, results of operations and cash flows of Legacy OmniAb in the future or if Legacy OmniAb had been a separate, stand-alone publicly traded entity during the periods presented.

Periods after the Separation

Following the Separation, the Company began accounting for its financial activities as an independent entity.

The Company’s financial statements as of December 31, 2023, December 31, 2022 and for the period from November 1, 2022 through December 31, 2022 are based on the reported results of OmniAb as a standalone company.

GAAP as included in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Certain prior period amounts in the consolidated financial statements have been reclassified to conform to the current period presentation.

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

All intercompany transactions and accounts within the Company have been eliminated.

Separation-related adjustments

Pursuant to the Separation Agreement, certain accounts receivables, accounts payables, and accrued liabilities included in Legacy OmniAb’s combined balance sheets immediately prior to the Separation were retained by Ligand, and therefore, were adjusted through the net parent investment in Legacy OmniAb’s combined financial statements.

In addition, in connection with the Separation, certain equity awards were converted in accordance with the Employee Matters Agreement, as further described in Note 11 – Share-Based Compensation.

As a standalone entity, the Company files tax returns on its own behalf, and tax balances and the effective income tax rate may differ from the amounts reported in the historical periods.

The difference between the tax attributes the Company historically calculated on a carve-out basis and the actual tax attributes that the Company received as a standalone entity on November 1, 2022 was adjusted through additional paid-in-capital.

In connection with the Separation on November 1, 2022, the Company adjusted its deferred tax and additional paid-in capital balances during the years ended December 31, 2023 and December 31, 2022 and computed its related tax provision to reflect operations as a standalone entity.

The following represents the impact of these Separation-related adjustments to the Company’s balance sheet following the Separation on November 1, 2022:

As of Separation-Related As of

(in thousands) October 31, 2022 Adjustments November 1, 2022

Current assets:

Cash and cash equivalents $ 1,842 $ 96,242 $ 98,084

Accounts receivable, net 5,541 ( 5,541 ) —

Prepaid expenses and other current assets 2,220 — 2,220

Total current assets 9,603 90,701 100,304

Deferred income taxes, net 167 ( 167 ) —

Intangible assets, net 166,182 — 166,182

Goodwill 83,979 — 83,979

Property and equipment, net 19,888 19 19,907

Operating lease right-of-use assets 21,290 — 21,290

Other long-term assets 1,448 — 1,448

Total assets $ 302,557 $ 90,553 $ 393,110

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable $ 8,569 $ ( 8,096 ) $ 473

Accrued expenses and other current liabilities 3,381 ( 3,356 ) 25

Current contingent liabilities 1,569 — 1,569

Current deferred revenue 8,582 — 8,582

Current operating lease liabilities 1,611 — 1,611

Total current liabilities 23,712 ( 11,452 ) 12,260

Long-term contingent liabilities 4,175 — 4,175

Deferred income taxes, net 15,136 5,731 20,867

Long-term operating lease liabilities 24,822 — 24,822

Long-term deferred revenue 5,004 — 5,004

Other long-term liabilities 298 ( 298 ) —

Total liabilities 73,147 ( 6,019 ) 67,128

Parent company net investment 229,410 ( 229,410 ) —

Common stock — 12 12

Additional paid-in capital — 325,970 325,970

Total liabilities and stockholders’ equity $ 302,557 $ 90,553 $ 393,110

Liquidity and Capital Resources

Prior to the Separation, Legacy OmniAb was dependent upon Ligand for all of its working capital and financing requirements, as Ligand used a centralized approach to cash management and financing its operations.

There were no cash amounts specifically attributable to Legacy OmniAb for the historical periods presented;

therefore, there was no cash reflected in the combined financial statements.

Accordingly, cash and cash equivalents, debt or related interest expense were not allocated to Legacy OmniAb in the combined financial statements.

Financing transactions related to OmniAb were accounted for as a component of the Parent company net investment in the combined balance sheets and as a financing activity including an interest expense component allocation on the accompanying combined statements of cash flows.

In connection with the Separation, Ligand funded the Company with approximately $ 1.8 million of cash.

Additionally, the Company’s proceeds, net of transactions costs from the Business Combination were $ 95.8 million.

See Note 4 – Business Combination, for further details.

The Company expects to continue to incur losses as it invests in research and development activities to improve its technology and platform, market and sell its technologies to existing and new partners, add operational, financial and management information systems and personnel to support its operations and incur ongoing costs associated with operating as a public company.

The Company’s ability to continue its operations is dependent upon its ability to generate cash flows from operations and potentially obtain additional capital in the future.

The Company believes its existing cash, cash equivalents and marketable securities and the cash it expects to generate from operations will provide it the flexibility needed to meet operating, investing, and financing needs and support operations through at least the next 12 months.

The accompanying consolidated and combined financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company believes its existing cash, cash equivalents and short-term investments are sufficient to support operations through at least the next 12 months from the date of issuance of these financial statements.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Emerging Growth Company

OmniAb qualifies as an “emerging growth company” (“EGC”) as defined in Section 2(a) of the Securities Act of 1933, as amended, (“Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”).

OmniAb qualifies as an emerging growth company as defined in Section 2(a) of the Securities Act of 1933, as amended, (“Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”).

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

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Use of Estimates

The preparation of these consolidated and combined financial statements in conformity with U.S.

GAAP requires the use of estimates and assumptions that affect the amounts reported in the consolidated and combined financial statements and the accompanying notes.

The preparation of these consolidated financial statements in conformity with U.S.

GAAP requires the use of estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes.

Actual results may differ from those estimates.

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Cash and cash equivalents consist of cash and highly liquid investments with maturities of three months or less when purchased.

As of December 31, 2023, cash and cash equivalents primarily consisted of bank deposits, money market funds as well as U.S.

Cash and cash equivalents generally consist of bank deposits, money market funds as well as U.S.

government and agency securities.

The following table provides a reconciliation of the components of cash, cash equivalents and restricted cash reported in the consolidated and combined balance sheets to the total of the amount presented in the consolidated and combined statements of cash flows:

The following table provides a reconciliation of the components of cash, cash equivalents and restricted cash reported in the consolidated balance sheets to the total of the amount presented in the consolidated statements of cash flows:

(in thousands) December 31, 2024 December 31, 2023

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Restricted cash

Total cash, cash equivalents and restricted cash presented in the consolidated and combined statements of cash flows $ 16,918 $ 33,839

The restricted cash relates to deposits for the Company’s property leases.

Total cash, cash equivalents and restricted cash presented in the consolidated statements of cash flows

$ 28,158 $ 16,918

Restricted cash relates to deposits for the Company’s property leases.

The restriction will lapse when the related leases expire.

Short-term Investments

Short-term investments primarily consist of commercial paper, corporate debt securities, asset-backed securities and government and agency securities.

Short-term investments generally consist of commercial paper, corporate debt securities, asset-backed securities and U.S.

government and agency securities.

The Company classifies short-term investments as “available-for-sale” as the sale of such investments may be required prior to maturity to implement management strategies.

Therefore, the Company has classified all investments with maturity dates beyond three months at the date of purchase as current assets in the accompanying consolidated and combined balance sheets based upon its ability and intent to use the investments to satisfy the liquidity needs of current operations.

Therefore, the Company has classified all investments with maturity dates beyond three months at the date of purchase as current assets in the accompanying consolidated balance sheets based upon its ability and intent to use the investments to satisfy the liquidity needs of current operations.

Any premium or discount arising at purchase is amortized and/or accreted to interest income as an adjustment to yield using the straight-line method over the life of the instrument.

Investments are reported at their estimated fair value.

Unrealized gains and losses are included in accumulated other comprehensive income as a component of stockholders’ equity until realized.

Accounts Receivable

Accounts receivable represents the amounts billed to the Company’s partners that are due unconditionally for services it has performed.

The Company establishes an allowance for credit losses to present the net amount of accounts receivable expected to be collected.

The allowance requires an estimation based upon historical loss experienced and adjusted for factors that are relevant to determining the expected collectability of accounts receivable.

Some of these factors include historical loss experience, delinquency trends, aging behavior of receivables, credit and liquidity quality indicators for industry groups, customer classes or individual customers and the current and expected future economic and market conditions.

Unrealized gains and losses are included in accumulated other comprehensive income (loss) as a component of stockholders’ equity until realized.

Property and Equipment

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The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the quantitative assessment for the goodwill impairment test.

The Company performed the annual assessment for goodwill impairment during the fourth quarter of 2023 and 2022, noting no impairment indicators under the qualitative assessment.

The Company performs its annual assessment for goodwill impairment during the fourth quarter each year.

No impairment indicators were noted in any periods presented in the consolidated financial statements under the qualitative assessment.

The Company’s identifiable intangible assets are composed of acquired core technologies, licensed technologies, contractual relationships, customer relationships and trade names.

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If the affected assets are not recoverable, the Company estimates the fair value of the assets and records an impairment loss if the carrying value of the assets exceeds the fair value.

Factors that may indicate potential impairment include market conditions, industry and economic trends, changes in regulations, clinical success, historical and forecasted financial results, significant changes in the ability of a particular asset to generate positive cash flows, and the pattern of utilization of a particular asset.

The Company did not identify indicators of impairment for the finite-lived intangibles and other long-lived assets at December 31, 2023 and 2022.

Public, Private Placement, Forward Purchase and Backstop Common Stock Warrants

Factors that may indicate potential impairment include market conditions, industry and economic trends, changes in regulations, historical and forecasted financial results, significant changes in the ability of a particular asset to generate positive cash flows, and the pattern of utilization of a particular asset.

Other than an impairment of the Company’s finite-lived intangible assets related to certain legacy assets from Ligand’s acquisition of Ab Initio Biotherapeutics, Inc.

(“Ab Initio”) in July 2019 and an impairment of certain small molecule ion channel intangible assets, as further described in Note 6 – Goodwill and Intangible Assets, Net, the Company did not identify indicators of impairment for its other finite-lived intangibles and long-lived assets at December 31, 2024 and 2023.

Public, Private Placement, Forward Purchase and Backstop Warrants

The Company assumed 7,666,667 warrants originally issued in APAC’s initial public offering (the “Public Warrants”) and 8,233,333 warrants issued in a private placement that closed concurrently with APAC’s initial public offering, (the “Private Placement Warrants”) in the Business Combination.

Additionally, as further discussed in Note 4 – Business Combination, pursuant to the Amended and Restated Forward Purchase Agreement, dated as of March 23, 2022 (the “A&R FPA”), on the Closing Date, the Company issued 1,666,667 warrants in the Forward Purchase (the “Forward Purchase Warrants”) and 1,445,489 warrants in the Redemption Backstop (the “Backstop Warrants”).

Additionally, pursuant to the Amended and Restated Forward Purchase Agreement, dated as of March 23, 2022 (the “A&R FPA”), on the Closing Date, the Company issued 1,666,667 warrants in the forward purchase (the “Forward Purchase Warrants”) and 1,445,489 warrants in the redemption backstop (the “Backstop Warrants”).

The Public, Private Placement, Forward Purchase and Backstop Warrants entitle the holder to purchase one share of common stock at an exercise price of $ 11.50 per share.

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The Company evaluated the Public, Private Placement, Forward Purchase and Backstop Warrants under ASC 815-40, Derivatives and Hedging-Contracts in Entity’s Own Equity (“ASC 815-40”), and concluded they meet the criteria for equity classification as they are considered to be indexed to the Company’s own stock.

Since the Public, Private Placement, Forward Purchase and Backstop Warrants met the criteria for equity classification upon the consummation of the Business Combination, the Company recorded these warrants in additional paid-in capital as part of the Business Combination.

Revenue Recognition

The Company applies the following five-step model in accordance with ASC 606, Revenue from Contracts with Customers , in order to determine revenue:

(i) identification of the promised goods or services in the contract;

(ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract;

(i) identification of the contract;

(ii) identification of the performance obligations in the contract, including whether they are distinct in the context of the contract;

(iii) measurement of the transaction price, including the constraint on variable consideration;

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The Company’s revenue is typically derived from license agreements with its partners and consists of:

(i) upfront or annual payments for technology access (license revenue), (ii) payments for the performance of research services (service revenue), (iii) downstream payments in the form of preclinical, intellectual property, clinical, regulatory, and commercial milestones (milestone revenue) and (iv) royalties on net sales from partners’ product sales.

License fees are generally recognized at a point in time once the Company grants partners access to intellectual property rights.

The Company generally satisfies its obligation to grant intellectual property rights on the effective date of the contract.

License fees are recognized when (or as) control of a performance obligation is transferred to the customer.

When combined performance obligations contain a promised license and related services or other promises, management judgment is required to determine whether revenue is recognized at a point in time or over time.

If a license for technology access is deemed to be the predominant promise in a performance obligation, the Company first determines the nature of the license, whether functional or symbolic intellectual property, to conclude whether revenue recognition as of a point in time or over time is most appropriate.

The determination of functional or symbolic intellectual property requires an assessment of whether the customer is able to benefit from the license in its current condition, or if the utility of the license is dependent on or influenced by the Company’s ongoing activities.

The Company recognizes service revenue for contracted R&D services performed for partners over time.

The Company measures its progress using an input method based on the effort it expends or costs it incurs toward the satisfaction of its performance obligation.

The Company estimates the amount of effort it expends, including the time it will take to complete the activities, or the costs it may incur in a given period, relative to the estimated total effort or costs to satisfy the performance obligation.

The Company measures its progress using an input method based on the effort it expends or costs it incurs relative to the estimated total effort or costs to satisfy the performance obligation.

This results in a percentage that it multiplies by the transaction price to determine the amount of revenue recognized each period.

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Because of the risk that products in development with partners will not reach development based milestones or receive regulatory approval, the Company generally recognizes any contingent payments that would be due to it upon or after achievement of the development milestone or regulatory approval.

Deferred Revenue

Depending on the terms of the arrangement, the Company may also defer a portion of the consideration received if it had to satisfy a future obligation.

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the consolidated and combined balance sheets.

For arrangements that include sales-based royalties, and under which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Each quarterly period, sales-based royalties are recorded based on estimated quarterly net sales of the associated collaboration products.

Differences between actual results and estimated amounts are adjusted for in the period in which they become known, which typically follows the quarterly period in which the estimate was made.

To date, actual royalties received have not differed materially from our estimates.

Accounts Receivable, Unbilled Receivables and Deferred Revenue

Accounts receivable represents the amounts billed to the Company’s partners that are due unconditionally for revenue it has earned.

The Company establishes an allowance for credit losses to present the net amount of accounts receivable expected to be collected.

The allowance requires an estimation based upon historical loss experienced and adjusted for factors that are relevant to determining the expected collectability of accounts receivable.

Some of these factors include delinquency trends, aging behavior of receivables, credit and liquidity quality indicators for industry groups, customer classes or individual customers and the current and expected future economic and market conditions.

Depending on the terms of the arrangement, the Company may also defer a portion of the consideration received if it needs to satisfy a future obligation.

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the consolidated balance sheets.

The Company generally receives payment at the point it satisfies its obligation or soon after.

When revenue recognized exceeds the amount billed to the customer, the Company records an unbilled receivable for the amount entitled to be received based on an enforceable right to payment.

Any fees billed in advance of being earned are recorded as deferred revenue.

Unbilled receivables were $ 2.6 million and $ 0.8 million as of December 31, 2024 and 2023, respectively.

During the year ended December 31, 2024, the amount recognized as revenue that was previously deferred at December 31, 2023 was $ 7.0 million.

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Disaggregation of Revenue

The disaggregated revenue categories are presented on the face of the consolidated and combined statements of operations and comprehensive loss.

The disaggregated revenue categories are presented on the face of the consolidated statements of operations.

Research and Development Expenses

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The Company expenses these costs as they are incurred.

When the Company makes payments for research and development services prior to the services being rendered, it records those amounts as prepaid assets on its consolidated and combined balance sheets and it expenses them as the services are provided.

When the Company makes payments for research and development services prior to the services being rendered, it records those amounts as prepaid assets on its consolidated balance sheets and it expenses them as the services are provided.

Share-Based Compensation

Prior to the Separation, certain Company employees, directors, managers and advisors participated in share-based compensation plans sponsored by Ligand.

Ligand share-based compensation awards consisted of stock options, restricted stock units (“RSUs”), performance restricted stock units (“PRSUs”) and other cash-based or share-based awards.

As such, prior to the Separation the awards granted to Company employees, directors, managers and advisors are reflected in Parent company net investment within the combined statements of stockholders’ equity at the time they were expensed.

Prior to the Separation, the consolidated and combined statements of operations and comprehensive loss also include an allocation of Ligand’s corporate and shared employee share-based compensation expenses.

The Company recognizes share-based compensation expense based on the estimated fair value on a straight-line basis over the requisite service periods of the awards, taking into consideration forfeitures as they occur.

The fair value of RSUs is determined by the closing market price of the Company’s common stock on the date of grant.

PRSUs generally represent the right to receive a certain number of shares of common stock based on the achievement of the Company’s corporate performance goals and continued employment during the vesting period.

The fair value of restricted stock units (“RSUs”) is determined by the closing market price of the Company’s common stock on the date of grant.

Performance-based restricted stock units (“PRSUs”) generally represent the right to receive a certain number of shares of common stock based on the achievement of the Company’s corporate performance or market goals and continued employment during the vesting period.

Share-based compensation expense for these PRSUs is measured using the Monte-Carlo valuation model and is not adjusted for the achievement, or lack thereof, of the market conditions.

The Company uses the Black-Scholes-Merton option-pricing model to estimate the fair value of stock purchases under the ESPP and stock options granted.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock purchases under the ESPP and stock options granted.

The model assumptions include expected volatility, term, dividends, and the risk-free interest rate.

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If necessary, deferred tax assets are reduced by a valuation allowance to reflect the uncertainty associated with their ultimate realization.

The Company accounts for uncertain tax positions recognized in the consolidated and combined financial statements in accordance with the provisions of Topic 740 by prescribing a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

The Company accounts for uncertain tax positions recognized in the consolidated financial statements in accordance with the provisions of Topic 740 by prescribing a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

When uncertain tax positions exist, we recognize the tax benefit of tax positions to the extent that the benefit will more likely than not be realized.

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Any changes to these estimates, based on the actual results obtained and/or a change in assumptions, could affect its income tax provision in future periods.

Interest and penalty charges, if any, related to unrecognized tax benefits would be classified as a provision for income tax in its consolidated and combined statements of operations.

Prior to the Separation, Legacy OmniAb’s income taxes include current and deferred income taxes of Ligand allocated to its combined financial statements in a manner that is systematic, rational and consistent with the asset and liability method prescribed in Topic 740.

Accordingly, the Company’s income tax provision was prepared following the “Separate Return Method.” The Separate Return Method applies Topic 740 to the combined financial statements of the OmniAb members of the consolidated group as if the group member were a separate taxpayer which joined in filing a consolidated federal income tax return and combined state income tax returns separate from Ligand.

In general, the taxable income or loss of Legacy OmniAb for the tax periods prior to November 1, 2022 were included in Ligand’s U.S.

consolidated federal and combined state income tax returns, where applicable.

As such, separate income tax returns were not prepared for OmniAb.

Consequently, income taxes currently payable are deemed to have been remitted by Ligand in the period the liability arose and income taxes currently receivable were deemed to have been received from Ligand in the period that a refund could have been recognized by OmniAb had the Company been a separate taxpayer, if applicable.

For the tax periods after October 31, 2022, the Company files its own consolidated federal income tax return and combined state income tax returns separate from Ligand.

Any income taxes due for the tax periods after October 31, 2022 are directly payable by the Company.

Interest and penalty charges, if any, related to unrecognized tax benefits would be classified as a provision for income tax in its consolidated statements of operations.

Income (Loss) Per Share

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Diluted income (loss) per share is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period.

For periods prior to the Separation, basic and diluted income (loss) per share was calculated based on the 82.6 million shares issued to Ligand shareholders at the Closing Date.

Comprehensive Income (Loss)

Comprehensive income (loss) represents net income (loss) adjusted for the change during the periods presented in unrealized gains and losses on available-for-sale debt securities and reclassification adjustments for realized gains or losses included in net income (loss).

The unrealized gains or losses are reported in the consolidated and combined statements of operations and comprehensive income (loss).

The unrealized gains or losses are reported in the consolidated statements of comprehensive income (loss).

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date.

Unless otherwise discussed below, the Company believes that the impact of recently issued standards are either not applicable to the Company or will not have a material impact on its consolidated financial statements upon adoption.

The following table provides a brief description of recently issued accounting standards:

Unless otherwise discussed below, the Company believes that the impact of recently issued standards is either not applicable to the Company or will not have a material impact on its consolidated financial statements upon adoption.

The following table provides a brief description of recently issued accounting standards which may impact the Company’s financial statements:

Effective Date

Effect on the Financial Statements or Other Significant Matters

ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures ASU 2023-07 updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

Effective for the Company for fiscal years beginning after December 15, 2023 The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements and disclosures.

ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures The amendments in this ASU address investor requests for more transparency about income tax information through improvements to tax disclosures primarily related to the rate reconciliation and income taxes paid information.

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

ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

The amendments in this ASU require a public business entity to disclose specific information about certain costs and expenses in the notes to its financial statements for interim and annual reporting periods.

The objective of the disclosure requirements is to provide disaggregated information about a public business entity's expenses to help investors (a) better understand the entity's performance, (b) better assess the entity's prospects for future cash flows, and (c) compare an entity's performance over time and with that of other entities.

Effective in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

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

Segment Information

Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision-maker in deciding how to allocate resources and assess performance.

The Company operates in one reportable business segment.

Operating segments are components of an enterprise for which separate financial information is available and are evaluated regularly by the Company’s chief operating decision-maker in deciding how to allocate resources and assess performance.

The Company manages its business as one operating segment.

Concentrations of Business Risk

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Partner C 16 % 14 %

_____________

(1) Represents less than 10% of total revenue.

As of December 31, 2024, amounts due from two partners exceeded 10% of gross trade receivables and accounted for 55 % of net trade receivables.

As of December 31, 2023, amounts due from three partners exceeded 10% of gross trade receivables and accounted for 88 % of net trade receivables.

As of December 31, 2022, amounts due from one partner exceeded 10% of gross trade receivables and accounted for 83 % of net trade receivables.

Relationship with Ligand and Related Entities

Prior to the Separation, the OmniAb business was managed and operated in the normal course of business consistent with other affiliates of Ligand.

Accordingly, certain shared costs were allocated to the Company and reflected as expenses in the combined financial statements.

Management considered the allocation methodologies used to be reasonable and appropriate reflections of the historical Parent expenses attributable to OmniAb for purposes of the stand-alone financial statements.

However, the expenses reflected in the combined financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if OmniAb historically operated as a separate, stand-alone entity.

In addition, the expenses reflected in the combined financial statements may not be indicative of related expenses that will be incurred in the future by OmniAb.

General Corporate Overhead

The combined statements of operations include expenses for certain centralized functions (such as information systems, accounting, treasury, audit, purchasing, human resources, legal and facilities), executive compensation and other programs provided and/or administered by Ligand that were charged directly to the Company.

A portion of these costs benefited the Company and were allocated using a pro-rata method based on project-related costs or other measures that management believed were consistent and reasonable.

Costs of $ 5.5 million for the ten months ended October 31, 2022 have been reflected in the general and administrative expenses in our combined statements of operations for our allocated share of Parent’s corporate overhead.

Cash Management and Financing

The Company participated in Ligand’s centralized cash management and financing programs prior to the Separation.

Disbursements were made through centralized accounts payable systems which were operated by Ligand.

Cash receipts were transferred to centralized accounts, also maintained by Ligand.

As cash was disbursed and received by Ligand, it was accounted for through the Parent company net investment.

All obligations were financed by Ligand and financing decisions were determined by central Ligand treasury operations.

Equity-Based Incentive Plans

Certain of our employees participated in Ligand’s equity-based incentive plans.

Under the Ligand 2002 Stock Incentive Plan (2002 Plan), employees, directors, managers and advisors were awarded share-based incentive awards in a number of forms, including nonqualified stock options.

Under the 2002 Plan, employees could be awarded share-based incentive awards which included non-statutory stock options or incentive stock options, restricted stock units, performance stock units and other cash-based or share-based awards.

Awards granted to employees under the incentive plans typically vested 1/8 on the six month anniversary of the date of grant, and 1/48 each month thereafter for 42 months.

The Company measured share-based compensation for all share-based incentive awards at fair value on the grant date.

Share-based compensation expense was generally recognized on a straight-line basis over the requisite service periods of the awards.

Compensation costs associated with the Company’s employees’ participation in the incentive plans were specifically identified for employees who exclusively supported the Company’s operations and were allocated to the Company as part of the cost allocations from Ligand.

Total costs charged to the Company related to its employees’ participation in Ligand’s incentive plans, depending on the nature of the employee’s role in operations, was $ 14.4 million ($ 8.2 million in research and development expenses and $ 6.2 million in general and administrative expenses) during the ten months ended October 31, 2022.

Employee Stock Purchase Plan

The Company’s eligible employees participated in its former Parent’s ESPP.

The ESPP permitted eligible participants to purchase Ligand’s shares at a discount through regular payroll deductions of up to 10 % of their eligible compensation during the offering period.

The ESPP was typically implemented through consecutive six -month offering periods.

The purchase price of the shares was 85 % of the lesser of the fair market value of the closing price per share on the first day of the offering period and the fair market value of the closing price per share on the last day of the offering period.

Costs charged to the Company related to the Company’s participation in its former Parent’s ESPP was $ 0.1 million for the year ended December 31, 2022.

Business Combination

As discussed in Note 1 – Organization and Basis of Presentation, on November 1, 2022, the Company consummated the transactions contemplated by the Merger Agreement.

At the Closing Date, and subject to the terms and conditions of the Merger Agreement, each outstanding share of Legacy OmniAb Common Stock was cancelled in exchange for 4.90007 shares of common stock of OmniAb, par value $ 0.0001 per share (“OmniAb Common Stock”) and 0.75842 shares of OmniAb Common Stock subject to certain price-based earnout triggers (the “Earnout Shares”).

Holders of shares of Legacy OmniAb common stock received an aggregate 82,611,789 shares of the OmniAb Common Stock, excluding Earnout Shares, as consideration in the Business Combination.

In addition, all outstanding Legacy OmniAb equity awards were converted into OmniAb equity awards to purchase, in the case of options, or receive, in the case of restricted stock units and performance-vesting restricted stock units, shares of OmniAb Common Stock, in each case, equal to the number of shares underlying such Legacy OmniAb equity awards multiplied by the Exchange Ratio.

Each holder of an outstanding Legacy OmniAb equity award also received Earnout Shares equal to the number of shares of Legacy OmniAb Common Stock underlying such equity award multiplied by 0.75842 .

Holders of shares of Legacy OmniAb common stock and holders of Legacy OmniAb equity awards received an aggregate 14,999,243 Earnout Shares as consideration in the Business Combination.

Fifty percent of the Earnout Shares will vest on the date on which the volume-weighted average price (“VWAP”) equals or exceeds $ 12.50 on any 20 trading days in any 30 consecutive trading-day period, and all remaining Earnout Shares will vest on the date on which the VWAP equals or exceeds $ 15.00 on any 20 trading days in any 30 consecutive trading-day period, in each case provided such vesting occurs during the five year period following the Closing Date (the “Earnout Period”);

provided, that in the event of a Change of Control (as defined in the Merger Agreement) during the Earnout Period pursuant to which OmniAb or any of its stockholders have the right to receive, directly or indirectly, cash, securities or other property attributing a value of at least $ 12.50 (with respect to 50 % of the Earnout Shares) or $ 15.00 (with respect to all Earnout Shares) per share of OmniAb Common Stock, and such Change of Control has been approved by a majority of the independent directors of the OmniAb Board, then such Earnout Shares shall be deemed to have vested immediately prior to such Change of Control.

The Earnout Shares are accounted for as equity-classified equity instruments and recorded in additional paid-in capital as part of the Business Combination.

Pursuant to the Sponsor Insider Letter Agreement executed concurrently with the Merger Agreement, by and among APAC, Avista Acquisition LP II (the “Sponsor”), Legacy OmniAb and certain insiders of APAC, 1,293,299 shares of OmniAb Common Stock held by the Sponsor became subject to the same price-based vesting conditions as the Earnout Shares (the “Earnout Founder Shares”).

The Earnout Founder Shares are accounted for as equity-classified equity instruments and recorded in additional paid-in capital as part of the Business Combination.

On the Closing Date, the Company completed the issuance and sale of 1,500,000 shares of the Company’s common stock and 1,666,667 Forward Purchase Warrants to the Sponsor for an aggregate purchase price of $ 15.0 million (the “Forward Purchase”), pursuant to the amended and restated forward purchase agreement (the “A&R FPA”).

Additionally, and also pursuant to the A&R FPA, on the Closing Date, the Company completed the sale of 8,672,934 shares of the Company’s common stock and 1,445,489 Backstop Warrants to the Sponsor for a purchase price of $ 10.00 per share and aggregate purchase price of $ 86.7 million in order to backstop shareholder redemptions which would have otherwise resulted in the cash proceeds available to OmniAb following the Business Combination from OmniAb’s trust account to be less than $ 100,000,000 .

Refer to Note 10 – Stockholders' Equity, for additional information on the accounting for the Forward Purchase Warrants and Backstop Warrants.

The Business Combination was accounted for as a reverse recapitalization in accordance with U.S.

Under this method of accounting, APAC was treated as the “acquired” company and OmniAb is treated as the acquirer for financial reporting purposes.

Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of OmniAb issuing stock for the net assets of APAC, accompanied by a recapitalization.

The net assets of APAC are stated at historical cost, with no goodwill or other intangible assets recorded.

Upon the closing of the Business Combination, the Company’s certificate of incorporation was amended and restated to, among other things, increase the total number of authorized shares of all classes of capital stock to 1,100,000,000 shares, $ 0.0001 par value per share, of which, 1,000,000,000 shares are designated as OmniAb Common Stock and 100,000,000 shares are designated as preferred stock.

The following table reconciles the elements of the Business Combination to the consolidated statement of cash flows and the consolidated statement of stockholders’ equity for the year ended December 31, 2022:

in thousands Amount

Cash - A&R FPA - Backstop $ 86,729

Cash - A&R FPA 15,000

Cash - Avista trust and cash, net of redemptions 9,103

Transaction costs paid at closing by Avista ( 9,209 )

Transaction costs paid at closing by OmniAb ( 5,381 )

Cash contributions from the Business Combination, net of transaction costs 96,242

Transaction costs accrued not paid by OmniAb ( 473 )

Net Business Combination and related transactions $ 95,769

The number of shares of common stock issued immediately following the consummation of the Business Combination:

Shares issued pursuant to A&R FPA - Backstop 8,672,934

Avista shares held by the Sponsor 4,456,701

Shares issued pursuant to A&R FPA 1,500,000

Earnout shares issued to founders 1,293,299

Common stock of Avista net of redemptions 1,286,136

Total shares issued in Business Combination, A&R FPA 17,209,070

Shares issued for OmniAb common stock 82,611,789

Earnout shares issued to OmniAb 14,999,243

Total shares of common stock immediately following the Business Combination 114,820,102

Fair Value Measurement

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Financial Instruments Measured on a Recurring Basis

The following tables provide a summary of the assets and liabilities that are measured at fair value on a recurring basis as

of December 31, 2023 and 2022:

The following tables provide a summary of the assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2024 and 2023:

Fair Value Measurements as of

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Money market funds $ 12,289 $ — — $ 12,289

Government and agency securities — 2,987 — 2,987

Corporate debt securities — 1,510 — 1,510

Total cash equivalents $ 12,289 $ — $ — $ 12,289

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Government and agency securities $ 63,109 $ 4,998 — $ 68,107

Corporate debt securities — 1,983 — 1,983

Commercial paper — 17,491 — 17,491

Asset-backed securities — 2,518 — 2,518

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$ — $ — $ 4,506 $ 4,506

The carrying amounts reported in our consolidated and combined balance sheets for accounts receivable, other assets, accounts payable and other accrued expenses approximate fair value due to their relatively short periods to maturity.

The carrying amounts reported in the Company’s consolidated balance sheets for accounts receivable, other assets, accounts payable and accrued expenses and other current liabilities approximate fair value due to their relatively short periods to maturity.

Available-for-Sale Securities

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The Company validates the prices provided by the third-party pricing services by reviewing their pricing methods and obtaining market values from other pricing sources.

The Company did not adjust or override any fair value measurements provided by these pricing services as of December 31, 2023.

The Company did not adjust or override any fair value measurements provided by these pricing services as of December 31, 2024 or December 31, 2023.

The Company has not transferred any investment securities between classification levels.

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Balance as of January 1, 2023

Payments to CVR holders

$ 4,747 $ 1,600 $ 1,764 $ 8,111

Payments of contingent liabilities

( 300 ) ( 1,600 ) ( 2,840 ) ( 4,740 )

Fair value adjustments to contingent liabilities

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Balance as of December 31, 2023

Payments to CVR holders ( 300 ) ( 1,600 ) ( 2,840 ) ( 4,740 )

$ 4,106 $ 400 $ — $ 4,506

Payments of contingent liabilities

( 75 ) ( 400 ) — ( 475 )

Fair value adjustments to contingent liabilities ( 2,547 ) — — ( 2,547 )

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$ 1,484 $ — $ — $ 1,484

(1) Changes in the fair values of contingent liabilities in connection with the acquisition of Icagen are recognized in Other operating (income) expense, net in the consolidated and combined statements of operations and comprehensive loss and in the operating section of the statements of cash flows.

Payments to CVR holders are disclosed in the financing section of the statements of cash flows.

(2) Changes in the fair values of contingent liabilities in connection with the acquisitions of Taurus and xCella are recognized in Intangible assets, net in the consolidated and combined balance sheets.

Payments to CVR holders are disclosed in the investing section of the statement of cash flows.

_____________

(1) Changes in the fair values of contingent liabilities in connection with the acquisition of Icagen are recognized in Other operating expense (income), net in the consolidated statements of operations and in the operating section of the statements of cash flows.

Payments to contingent liability holders are disclosed in the financing section of the statements of cash flows.

(2) Changes in the fair values of contingent liabilities in connection with the acquisitions of Taurus and xCella are recognized in Intangible assets, net in the consolidated balance sheets.

Payments to contingent liability holders are disclosed in the investing section of the statement of cash flows.

Contingent liabilities are classified as Level 3 liabilities as their valuation requires substantial judgment and estimation of factors that are not currently observable in the market.

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If different assumptions were used for the various inputs to the valuation approaches, the estimated fair value could be materially higher or lower than the fair value determined.

Assets Measured on a Non-Recurring Basis

The Company applies fair value techniques on a non-recurring basis associated with valuing potential impairment losses related to available-for-sale securities, goodwill, finite-lived intangible assets, and long-lived assets.

No such fair value impairment was recognized during the years ended December 31, 2023 or 2022.

Short-Term Investments

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Government and agency securities $ 68,054 $ 57 $ ( 4 ) $ 68,107

Commercial paper 17,491 — — 17,491

Corporate debt securities 1,983 — — 1,983

Asset-backed securities 2,522 — ( 4 ) 2,518

Total investments $ 70,576 $ 57 $ ( 8 ) $ 70,625

The Company has classified all investments with maturity dates beyond three months at the date of purchase as short-term investments in the consolidated and combined balance sheets based upon its ability and intent to use the investments to satisfy the liquidity needs of current operations.

The Company classified all investments with maturity dates beyond three months at the date of purchase as short-term investments in the consolidated balance sheets based upon its ability and intent to use the investments to satisfy the liquidity needs of current operations.

The following table summarizes available-for-sale investments by maturity as of December 31, 2024:

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Due in one year or less $ 31,809 $ 31,836

Due after one year through five years

Due after one year

Total investments $ 31,809 $ 31,836

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Government and agency securities 2 $ 2,930 $ ( 3 ) — $ — $ — 2 $ 2,930 $ ( 3 )

Asset backed securities 3 2,518 ( 4 ) — — — 3 2,518 ( 4 )

2 $ 2,930 $ ( 3 ) — $ — $ — 2 $ 2,930 $ ( 3 )

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Government and agency securities 5 $ 10,402 $ ( 4 ) — $ — $ — 5 $ 10,402 $ ( 4 )

Asset-backed securities

3 2,518 ( 4 ) — — — 3 2,518 ( 4 )

The Company had certain available-for-sale debt securities in an unrealized loss position without an allowance for credit losses as of December 31, 2023.

Unrealized losses on these debt securities have not been recognized into income because (1) of the issuers’ high credit quality, (2) management does not intend to sell and it is likely that management will not be required to sell these securities prior to their anticipated recovery and (3) the decline in fair value is largely due to market conditions and/or changes in interest rates.

8 $ 12,920 $ ( 8 ) — $ — $ — 8 $ 12,920 $ ( 8 )

The Company had certain available-for-sale debt securities in an unrealized loss position without an allowance for credit loss as of December 31, 2024.

Unrealized losses on these debt securities have not been recognized into income because (1) the issuers have high credit quality, (2) management does not intend to sell and it is likely that management will not be required to sell these securities prior to their anticipated recovery and (3) the decline in fair value is largely due to market conditions and/or changes in interest rates.

The issuers continue to make timely interest payments on the securities, and the fair value is expected to recover as the bonds approach maturity.

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Lab and office equipment 9,785 9,452

Computer equipment and software 754 641

Computer hardware and software

Construction in progress 103 842

Property and equipment, at cost 28,393 27,125

Less accumulated depreciation and amortization ( 8,876 ) ( 5,188 )

Less accumulated depreciation

( 12,901 ) ( 8,876 )

Total property and equipment, net $ 15,492 $ 18,249

Depreciation expense of $ 4.0 million and $ 3.2 million was recognized during the years ended December 31, 2023 and 2022, respectively, and was included in operating expenses.

Depreciation expense, which is included in operating expense, was $ 4.1 million and $ 4.0 million was recognized during the years ended December 31, 2024 and 2023, respectively, and was included in operating expenses.

Accrued Expenses and Other Current Liabilities

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Total accrued expenses and other current liabilities $ 6,141 $ 7,068

Goodwill and Intangible Assets

The following is a summary of goodwill and intangible assets:

Goodwill and Intangible Assets, Net

Goodwill and intangible assets, net consisted of the following as of December 31, 2024 and 2023:

(in thousands) 2024 2023

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Intangible Assets

Amortization of finite-lived intangible assets is computed using the straight-line method over the estimated useful life of the asset of up to 20 years and is reflected within depreciation and amortization expense on the consolidated and combined statements of operations and comprehensive loss.

Amortization of finite-lived intangible assets is computed using the straight-line method over the estimated useful life of the asset of up to 20 years and is reflected within amortization of intangibles expense on the consolidated statements of operations.

Amortization expense of $ 17.4 million and $ 13.6 million was recognized for the years ended December 31, 2024 and 2023, respectively.

For each of the years ended December 31, 2023 and 2022, there was no impairment of intangible assets with finite lives.

During the year ended December 31, 2024, the Company determined that certain of its finite-lived intangible assets related to the acquisition of Ab Initio in July 2019 were fully impaired, and recorded a $ 1.2 million write-off of the net carrying value.

In addition, the Company recorded a $ 2.7 million impairment of certain small molecule ion channel intangible assets during the year ended December 31, 2024.

The impairment charges were recorded as “ Amortization of intangibles ” in the consolidated statements of operations.

For the year ended December 31, 2023, there was no impairment of intangible assets with finite lives.

The remaining weighted-average useful life of definite lived intangible assets is 11.1 years.

At December 31, 2023, future amortization expense on intangible assets is estimated to be as follows:

(in thousands) Years Ending December 31,

At December 31, 2024, future amortization expense on intangible assets is estimated to be as follows (in thousands):

Years Ending December 31,

2025 $ 12,912

Thereafter 73,500

Total future amortization expense

Commitments and Contingencies

Lease Commitments

The Company’s corporate headquarters and primary research and development facilities are located in Emeryville, California, where it leases approximately 35,000 square feet of space under leases expiring in 2032.

The Company also leases approximately 31,000 square feet of research and development space in Durham, North Carolina and Tucson, Arizona, under leases that expire between 2026 and 2029.

The Company’s corporate headquarters are located in Emeryville, California and its research facilities are located in Emeryville and Dixon, California, Durham, North Carolina, and Tucson, Arizona.

It leases approximately 70,000 square feet of space under leases expiring from 2026 and 2032.

The Company’s lease agreements do not contain any material residual value guarantees, material restrictive covenants, or material termination options.

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Lease terms include options to extend or terminate the lease when it is reasonably certain that those options will be exercised.

Leases with an initial term of 12 months or less are not recorded on the consolidated and combined balance sheets, and the expense for these short-term leases and for operating leases is recognized on a straight-line basis over the lease term.

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets, and the expense for these short-term leases and for operating leases is recognized on a straight-line basis over the lease term.

The depreciable life of lease assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

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Right-of-use assets obtained in exchange for lease obligations:

$ 328 $ 10,136

Weighted average remaining lease term (in years) 6.8 7.8

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In addition to base rent, certain of the Company’s operating leases require variable payments.

These variable lease costs include amounts relating to common area maintenance and are expensed when the obligation for those payments is incurred and are recognized as operating expenses in the consolidated and combined statements of operations.

The following table summarizes the components of operating lease expense for the years ended December 31, 2024 and 2023:

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From time to time, the Company has been and may be involved in various legal proceedings arising in its ordinary course of business.

In the opinion of management, resolution of any pending claims (either individually or in the aggregate) is not expected to have a material adverse impact on the consolidated and combined financial statements, cash flows or financial position and it is not possible to provide an estimated amount of any such loss.

In the opinion of management, resolution of any pending claims (either individually or in the aggregate) is not expected to have a material adverse impact on the consolidated financial statements, cash flows or financial position and it is not possible to provide an estimated amount of any such loss.

However, the outcome of disputes is inherently uncertain.

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As of December 31, 2024, no shares of preferred stock are issued or outstanding.

Holders of OmniAb Common Stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders, including the election of directors, and do not have cumulative voting rights.

Holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders, including the election of directors, and do not have cumulative voting rights.

Subject to preferences that may be applicable to any then outstanding preferred stock, holders of our common stock are entitled to receive ratably those dividends, if any, as may be declared by the Board out of legally available funds.

In the event of our liquidation, dissolution or winding up, the holders of Common Stock will be entitled to share ratably in the assets legally available for distribution to stockholders after the payment of or provision for all of the Company’s debts and other liabilities, subject to the prior rights of any preferred stock then outstanding.

Holders of OmniAb Common Stock have no preemptive or conversion rights or other subscription rights and there are no redemption or sinking fund provisions applicable to the Common Stock.

All outstanding shares of OmniAb Common Stock are duly authorized, validly issued, fully paid and nonassessable.

The rights, preferences and privileges of holders of OmniAb Common Stock are subject to and may be adversely affected by the rights of the holders of shares of any

series of preferred stock that the Company may designate and issue in the future.

In the event of our liquidation, dissolution or winding up, the

holders of common stock will be entitled to share ratably in the assets legally available for distribution to stockholders after the payment of or provision for all of the Company’s debts and other liabilities, subject to the prior rights of any preferred stock then outstanding.

Holders of common stock have no preemptive or conversion rights or other subscription rights and there are no redemption or sinking fund provisions applicable to the common stock.

All outstanding shares of common stock are duly authorized, validly issued, fully paid and nonassessable.

The rights, preferences and privileges of holders of common stock are subject to and may be adversely affected by the rights of the holders of shares of any series of preferred stock that the Company may designate and issue in the future.

Preferred stock

Under the terms of the Company’s certificate of incorporation, its board of directors has the authority, without further action by the Company’s stockholders, to issue up to 100,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the dividend, voting and other rights, preferences and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions thereon, and to increase or decrease the number of shares of any such series, but not below the number of shares of such series then outstanding.

The Company’s board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of OmniAb Common Stock.

The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deterring or preventing a change in the Company’s control and may adversely affect the market price of the Common Stock and the voting and other rights of the holders of OmniAb Common Stock.

The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deterring or preventing a change in the Company’s control and may adversely affect the market price of the common stock and the voting and other rights of the holders of common stock.

The Company has no current plans to issue any shares of preferred stock.

Earnout Shares

As of December 31, 2023, OmniAb Earnout Shares of 14,999,243 and Sponsor Earnout Shares of 1,293,299 are issued and outstanding.

Earnout Shares vest based upon the achievement of certain volume-weighted average trading prices (VWAP) for shares of the Company for any 20 trading days over a consecutive 30 trading-day period during the five-year period following the Closing Date, with (i) 50 % of such Earnout Shares vesting upon achievement of a VWAP of $ 12.50 per share of OmniAb Common Stock or upon the occurrence of a change of control transaction that will result in the holders of OmniAb Common Stock receiving a price per share in excess of $ 12.50 , and (ii) the remaining 50 % percent of the Earnout Shares vesting upon achievement of a VWAP of $ 15.00 per share of OmniAb Common Stock or upon the occurrence of a change of control transaction that will result in the holders of OmniAb Common Stock receiving a price per share in excess of $ 15.00 .

Some of the Company’s shares of common stock are subject to certain price-based earnout triggers (the “Earnout Shares”).

Earnout Shares vest based upon the achievement of certain volume-weighted average trading prices (“VWAP”) for shares of the Company for any 20 trading days over a consecutive 30 trading-day period during the five-year period following the Closing Date, with (i) 50 % of such Earnout Shares vesting upon achievement of a VWAP of $ 12.50 per share of common stock or upon the occurrence of a change of control transaction that will result in the holders of common stock receiving a price per share in excess of $ 12.50 , and (ii) the remaining 50 % percent of the Earnout Shares vesting upon achievement of a VWAP of $ 15.00 per share of common stock or upon the occurrence of a change of control transaction that will result in the holders of common stock receiving a price per share in excess of $ 15.00 .

The Earnout Shares are not transferable until the vesting condition for the applicable tranche of Earnout Shares has been achieved.

The Earnout Shares will be automatically forfeited for no consideration if an applicable OmniAb Triggering Event or Sponsor Triggering Event has not occurred from the Closing Date to and including the fifth anniversary of the Closing Date.

As of December 31, 2024, 14,999,243 Earnout Shares were issued and outstanding.

Pursuant to the Sponsor Insider Letter Agreement executed concurrently with the Merger Agreement, by and among APAC, Avista Acquisition LP II (the “Sponsor”), Legacy OmniAb and certain insiders of APAC, 1,293,299 shares of OmniAb common stock held by the Sponsor became subject to the same price-based vesting conditions as the Earnout Shares (the “Sponsor Earnout Shares”).

The Sponsor Earnout Shares are accounted for as equity-classified equity instruments and recorded in additional paid-in capital as part of the Business Combination.

As of December 31, 2024, 1,293,299 Sponsor Earnout Shares were issued and outstanding.

The Earnout Shares and Sponsor Earnout Shares will be automatically forfeited for no consideration if an applicable triggering event has not occurred from the Closing Date to and including the fifth anniversary of the Closing Date.

As part of APAC’s initial public offering, 7,666,667 Public Warrants were sold.

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2022 Ligand Service Provider Assumed Award Plan and the OmniAb, Inc.

2022 OmniAb Service Provider Assumed Award Plan, collectively referred to as the OmniAb Prior Plans, which govern the OmniAb equity awards issued upon adjustment of outstanding Ligand equity awards in connection with the Distribution.

All awards under the OmniAb Prior Plans that were outstanding as of the closing of the Business Combination continued to be governed by the terms, conditions and procedures set forth in the OmniAb Prior Plans and any applicable award agreements, as those terms may be equitably adjusted in connection with the Business Combination.

The Company assumed the OmniAb Prior Plans in connection with the closing of the Business Combination, and each of the awards thereunder.

No future awards will be granted under the OmniAb Prior Plans.

Shares subject to outstanding awards under the OmniAb Prior Plans as of the effective date of the 2022 Plan may, on or following the effective date of the 2022 Plan, become available for issuance pursuant to the 2022 Plan recycling provisions.

At the Market Offering

In December 2023, the Company entered into an Open Market Sale Agreement SM (the “Sales Agreement”), with Jefferies LLC (the “Sales Agent”) under which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $ 100.0 million in “at the market” (“ATM”) offerings through the Sales Agent.

Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of sale, or as otherwise agreed with the Sales Agent.

The Sales Agent will receive a commission from the Company of up to 3.0 % of the gross proceeds of any shares of common stock sold under the Sales Agreement.

Sales of its common stock made pursuant to the Sales Agreement are made under its shelf registration statement on Form S‐3 which was filed on December 8, 2023 and declared effective by the SEC on December 18, 2023.

The Company is not obligated to sell, and the Sales Agent is not obligated to buy or sell, any shares of common stock under the Sales Agreement.

During the year ended December 31, 2024, 2,771,192 shares of common stock in the ATM offering were issued for net proceeds of $ 11.4 million, after deducting commissions.

Share-Based Compensation

Conversion and Modification of Equity Awards Outstanding at Separation Date

In connection with the Separation on November 1, 2022, under the provisions of the existing plans, the Company adjusted its outstanding equity awards in accordance with the Merger Agreement to preserve the intrinsic value of the awards immediately before and after the Distribution.

Upon the Distribution, employees holding stock options, restricted stock units and performance restricted stock units denominated in pre-Distribution Ligand stock received a number of otherwise-similar awards either in post-Distribution Ligand stock or in a combination of post-Distribution Ligand stock and OmniAb stock based on conversion ratios outlined for each group of employees in the Merger Agreement that the Company entered into in

connection with the Distribution.

The equity awards that were granted prior to March 2, 2022 were converted under the shareholder method, wherein employees holding outstanding equity awards received equity awards in both Ligand and OmniAb.

For equity awards granted after March 2, 2022, for Ligand employees, the number of awards that were outstanding at the Separation were proportionately adjusted into post-Distribution Ligand stock to maintain the aggregate intrinsic value of the awards at the date of the Separation;

for OmniAb employees, the number of awards that were outstanding at the Separation were proportionately adjusted into post-Distribution OmniAb stock to maintain the aggregate intrinsic value of the awards at the date of the Separation.

The conversion ratio was determined based on the relative values of Ligand common stock in the “regular way” and “ex-distribution” markets during the five -trading day period prior to the closing of the Business Combination.

These modified awards otherwise retained substantially the same terms and conditions, including term and vesting provisions.

Due to the modification of the equity awards as a result of the Distribution, the Company compared the fair value of the outstanding equity awards immediately before and after the Distribution.

Due to the immaterial amount of incremental fair value, the Company did not recognize any incremental expense as a result of the modification.

The Company will not incur any future compensation cost related to equity awards held by Ligand employees and directors.

The Company will incur future compensation cost related to Ligand equity awards held by OmniAb employees.

Share-Based Compensation Expense

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• Expected volatility :

Since the Company is a newly public company and does not have a trading history for its common stock, the expected volatility assumption is based on volatilities of a peer group of similar companies whose share prices are publicly available.

The peer group was developed based on companies in the biotechnology industry.

The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

Due to the Company’s limited trading history for its common stock, the Company lacks sufficient historical data to support its expected stock price volatility.

As such, the Company utilized a weighted approach by blending its own limited historical data with the volatilities of publicly traded biotechnology peers.

The Company will continue to apply this approach until it has enough historical data to solely support its expected volatility.

• Expected term :

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Treasury securities with remaining terms similar to the expected term of the share-based awards.

Prior to the Separation on November 1, 2022, valuation assumptions were determined by the Company’s former parent, Ligand, using historical and implied volatility of Ligand stock to determine the expected volatility.

The expected term of an award was based on historical forfeiture experience, exercise activity, and on the terms and conditions of the stock awards.

The expected dividend yield was determined to be 0 % given that it had not paid any dividends on common stock in the past except for 2007, during which Ligand declared a cash dividend on its common stock of $ 2.50 per share, and did not expect to pay cash dividends or make any other distributions on common stock in the future.

The risk-free interest rate was based upon U.S.

Treasury securities with remaining terms similar to the expected term of the share-based awards.

Following the Separation on November 1, 2022, the fair value of each option issued to employees was estimated on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions:

The fair value of each option issued was estimated on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions:

Year Ended December 31,

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As of December 31, 2024, unrecognized stock-based compensation expense related to Ligand options was $ 0.3 million, which is expected to be recognized over a remaining weighted-average period of approximately 0.31 years.

The aggregate intrinsic value of OmniAb options exercised by OmniAb employees during the year ended December 31, 2023 was $ 0.2 million.

Cash received from OmniAb options exercised by OmniAb employees during the year ended December 31, 2023 was $ 0.6 million.

The aggregate intrinsic value of OmniAb options exercised by Ligand employees during the year ended December 31, 2023 was $ 0.1 million.

Cash received from OmniAb options exercised by Ligand employees during the year ended December 31, 2023 was $ 0.6 million.

The aggregate intrinsic value of OmniAb options exercised by OmniAb service providers during the year ended December 31, 2024 was $ 0.6 million.

Cash received from OmniAb options exercised by OmniAb service providers during the year ended December 31, 2024 was $ 2.0 million.

There were no OmniAb options exercised by Ligand service providers during the year ended December 31, 2024.

Restricted Stock Units

Restricted stock units (“RSUs”) are awards of nontransferable shares of common stock subject to certain vesting conditions and other restrictions.

RSUs generally represent the right to receive a certain number of shares of common stock subject to certain vesting conditions and other restrictions.

RSUs generally vest over three years .

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As of December 31, 2024, unrecognized stock-based compensation expense related to OmniAb RSUs was $ 5.5 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.25 years.

As of December 31, 2023, unrecognized stock-based compensation expense related to Ligand RSUs was $ 0.3 million, which is expected to be recognized over a remaining weighted-average period of approximately 0.31 years.

The aggregate fair value of OmniAb RSUs vested for OmniAb employees during the year ended December 31, 2023 was $ 2.9 million.

The aggregate fair value of OmniAb RSUs vested for Ligand employees during the year ended December 31, 2023 was $ 0.8 million.

As of December 31, 2024, there is no unrecognized stock-based compensation expense related to Ligand RSUs.

The aggregate intrinsic value of OmniAb RSUs vested for OmniAb service providers during the year ended December 31, 2024 was $ 4.5 million.

The aggregate intrinsic value of OmniAb RSUs vested for Ligand service providers during the year ended December 31, 2024 was $ 0.7 million.

Performance Restricted Stock Units

PRSUs are share awards that, upon vesting, will deliver to the holder shares of the Company’s common stock.

PRSUs vest over a continued employment period and are based on the achievement of certain corporate performance or market goals.

PRSUs generally represent the right to receive a certain number of shares of common stock based on the achievement of certain corporate performance or market goals and continued employment during the vesting period.

The Company’s PRSUs contain a market condition dependent upon the Company’s relative and absolute total stockholder return over a three-year period, with a payout range of 0 % to 200 % of the target shares granted.

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The amount disclosed represents PRSU grants at target payout.

As of December 31, 2023, unrecognized stock-based compensation expense related to OmniAb PRSUs was $ 0.6 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.00 year

As of December 31, 2024, there is no unrecognized stock-based compensation expense related to OmniAb PRSUs.

Employee Stock Purchase Plan

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In addition, on the first day of each calendar year beginning on January 1, 2023 and ending on (and including) January 1, 2032, the number of shares available for issuance under the ESPP will be increased by a number of shares equal to the lesser of (i) 1 % of the fully diluted shares outstanding on the final day of the immediately preceding calendar year, and (ii) such smaller number of shares as determined by the board of directors.

Following the Separation on November 1, 2022, the fair value of ESPP shares issued to employees was estimated on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions:

The fair value of ESPP shares issued to employees was estimated on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions:

Year Ended December 31,

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566 ( 0.8 ) % 995 ( 1.5 ) %

Foreign-derived intangible income — — % ( 55 ) 0.2 %

Research and development credits ( 904 ) 1.3 % ( 1,053 ) 1.6 %

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Capitalized research and experimental expenditures 7,956 7,500

Accrued liabilities

Other 544 527

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( 3,043 ) ( 3,615 )

Other — ( 56 )

Total deferred tax liabilities

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Deferred income taxes, net $ ( 2,314 ) $ ( 11,354 )

Prior to the Separation on November 1, 2022, OmniAb operated as part of Ligand and not as a stand-alone company.

The Company determined the OmniAb income tax provision as if Legacy OmniAb had filed consolidated federal income tax returns and combined state income tax returns separate from Ligand since its inception on January 8, 2016 when Ligand acquired Legacy OmniAb (originally known as Open Monoclonal Technology, Inc.

The Company recorded the deferred tax assets related to net operating loss and research credit carryforwards at December 31, 2023 and 2022 as a stand-alone company.

In connection with the Separation on November 1, 2022, the Company adjusted its deferred tax and additional paid-in capital balances during the years ended December 31, 2023 and December 31, 2022 to reflect the actual tax attributes that the Company received when it left the consolidated group of Ligand.

As of December 31, 2023 and 2022, its deferred tax assets reflect the tax attributes that are available for the Company to use going forward.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 requires taxpayers to capitalize and amortize certain research and experimental expenditures over five years for domestic research and 15 years for foreign research pursuant to Section 174 of the Internal Revenue Code of 1986, as amended.

For the years ended December 31, 2023 and 2022, the Company capitalized $ 4.1 million and $ 5.0 million of research and experimental expenditures under Section 174, respectively, as increases to its deferred tax assets.

The Company also recorded a $ 0.8 million reduction in its deferred tax assets for the year ended December 31, 2023 as a result of its return-to-provision adjustments in connection with capitalized research and experimental expenditures pursuant to Section 174 for the year ended December 31, 2022.

The following table presents the Company's U.S.

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The deferred tax assets as of December 31, 2024 are net of any previous limitations due to Section 382 and 383.

The Business Combination on November 1, 2022 did not trigger an ownership change under Section 382.

The Company accounts for income taxes by evaluating a probability threshold that a tax position must meet before a financial statement benefit is recognized.

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Net Loss Per Share

Income (Loss) Per Share

Loss Per Share

Basic loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period.

Diluted loss per share is computed based on the sum of the weighted average number of common shares and dilutive common shares outstanding during the period.

As described in Note 2 – Summary of Significant Accounting Policies, earnout shares issued in connection with the Business Combination, as further described in Note 4 – Business Combination, are subject to vesting based on the volume-weighted average trading prices (“VWAP”) of common shares during the earnout period.

As described in Note 8 – Stockholders' Equity, Earnout Shares issued in connection with the Business Combination are subject to vesting based on the VWAP of common shares during the earnout period.

The Earnout Shares are excluded from the calculation of basic and diluted weighted-average number of common shares outstanding until vested.

For periods prior to the Business Combination, basic and diluted loss per share was calculated based on 82.6 million shares issued to Ligand shareholders at the Closing Date.

The following table outlines the basic and diluted net loss per share for the years ended December 31, 2024 and 2023:

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Net loss per share, basic and diluted $ ( 0.61 ) $ ( 0.51 )

The following table outlines dilutive common share equivalents outstanding, which are excluded in the above diluted net loss per share calculation, as the effect of their inclusion would be anti-dilutive or the share equivalents were contingently issuable as of each period presented:

The following table outlines common share equivalents which were excluded from the computation of diluted net loss per share, as the effect of their inclusion would be anti-dilutive or the share equivalents were contingently issuable as of each period presented:

Options to purchase common stock issued and outstanding (1)

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Forward purchase warrants 1,666,667 1,666,667

Shares expected to be purchased under employee stock purchase plan 1,589,197 1,983,180

Backstop warrants 1,445,489 1,445,489

Shares expected to be purchased under employee stock purchase plan 687,515 1,589,197

Total anti-dilutive shares 59,841,760 59,807,439

_____________

(1) Outstanding stock options and restricted stock units include awards outstanding to employees of Ligand.

(1) Outstanding stock options include awards outstanding to employees of Ligand.

Segment Information

The Company operates under one reportable business segment, providing discovery research technology to enable the discovery of next-generation therapeutics.

The determination of a single reportable business segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (“CODM”).

The Company’s CODM is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance.

In addition to the significant expense categories included within the consolidated statements of operations, certain other disaggregated amounts that comprise research and development and general and administrative are reviewed by the CODM.

These expenses consist of (1) personnel related expenses, including salaries, benefits and share-based compensation, (2) external expenses, including third-party costs for goods and services such as lab supplies and contract research, and (3) facility and other overhead expenses, including depreciation and occupancy costs.

The following table outlines information about segment revenues, significant segment expenses, and segment net loss for the years ended December 31, 2024 and 2023:

(in thousands) December 31,

$ 26,391 $ 34,164

Research and development expenses

Personnel related expenses

28,444 29,259

External expenses

17,160 18,138

Facility and other overhead expenses

Total research and development expenses

55,110 56,525

General and administrative expenses

Personnel related expenses 21,733 21,904

External expenses 8,470 11,185

Facility and other overhead expenses 538 224

Total general and administrative expenses

30,741 33,313

Amortization of intangibles

17,407 13,554

Other operating expense (income), net

( 2,365 ) 191

Total other income, net

Income tax benefit

$ ( 62,033 ) $ ( 50,619 )

All long-term assets are maintained in, and all net losses are attributable to, the United States of America.

Employee Benefit Plan

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The Company, at its discretion, may make certain contributions to the 401(k) plan.

The Company’s matching contributions were $ 0.6 million for the year ended December 31, 2023 and $ 0.4 million for the year ended December 31, 2022.

The Company’s matching contributions were $ 0.6 million for both years ended December 31, 2024 and 2023.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data