What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-04 compared with 2025-03-18 · 165 added, 108 removed, 811 unchanged (25% of the section changed)

82 unchanged sentences

Service revenue 7,263 11,949

xPloration revenue 754 —

Royalty revenue 878 576

1 unchanged sentence

18,666 26,391

Operating expenses:

Costs and operating expenses:

Cost of xPloration revenue 303 —

Research and development 47,754 55,110

1 unchanged sentence

Amortization of intangibles 12,912 17,407

Other operating expense (income), net

Other operating income, net

( 2,549 ) ( 2,365 )

Total operating expenses 100,893 103,583

Total costs and operating expenses

87,635 100,893

Loss from operations ( 68,969 ) ( 74,502 )

14 unchanged sentences

Net loss $ ( 64,779 ) $ ( 62,033 )

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

Unrealized net loss on available-for-sale securities

( 15 ) ( 23 )

Comprehensive loss $ ( 64,794 ) $ ( 62,056 )

12 unchanged sentences

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

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

Issuance of common stock under stock compensation plans 1,454,789 — 490 — — 490

Share-based compensation — — 15,824 — — 15,824

Unrealized net loss on available-for-sale securities — — — ( 15 ) — ( 15 )

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

Issuance of common stock in private placement, net of commissions and issuance costs 21,254,106 2 27,933 — — 27,935

ATM facility issuance costs — — ( 46 ) — $ — ( 46 )

Net loss — — — — $ ( 64,779 ) ( 64,779 )

7 unchanged sentences

Net loss $ ( 64,779 ) $ ( 62,033 )

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

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 21,754 23,583

1 unchanged sentence

Amortization of discounts on short-term investments, net ( 858 ) ( 1,498 )

( 1,498 ) ( 3,441 )

Deferred income taxes, net ( 1,529 ) ( 9,040 )

Change in estimated fair value of contingent liabilities 325 ( 2,547 )

Gain on sale of ion channel asset

Other 761 544

Changes in operating assets and liabilities, net:

3 unchanged sentences

Accounts payable, accrued expenses, and other liabilities ( 231 ) ( 2,410 )

( 2,410 ) 920

Operating lease liabilities ( 2,830 ) ( 2,436 )

Deferred revenue ( 1,600 ) ( 5,988 )

Net cash provided by (used in) operating activities

Net cash used in operating activities

( 36,455 ) ( 39,664 )

Investing activities:

Purchases of property and equipment ( 1,875 ) ( 1,644 )

Purchases of short-term investments ( 46,858 ) ( 40,288 )

Proceeds from the maturity of short-term investments

Proceeds from maturity of short-term investments

50,800 78,000

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

Purchases of property and equipment ( 565 ) ( 1,875 )

Payments of contingent liabilities — ( 400 )

( 400 ) ( 4,440 )

Net cash provided by (used in) investing activities

37,884 ( 18,376 )

Proceeds from sale of short-term investments 90 2,447

Proceeds from sale of ion channel asset

Net cash provided by investing activities

Financing activities:

Proceeds from issuance of common stock from stock compensation plans

Taxes paid related to net share settlement of equity awards

( 960 ) ( 1,324 )

Payments of contingent liabilities ( 450 ) ( 75 )

( 75 ) ( 300 )

Payment of transaction costs

( 571 ) ( 473 )

Proceeds from issuance of common stock from stock plans

Taxes paid related to net share settlement of equity awards — ( 960 )

Proceeds from issuance of common stock in private placement, net of commissions

Proceeds from issuance of common stock under ATM facility, net of commissions — 11,369

Net cash provided by (used in) financing activities

Payment of transaction costs ( 324 ) ( 571 )

Net cash provided by financing activities

27,914 13,020

Net increase (decrease) in cash, cash equivalents, and restricted cash ( 2,074 ) 11,240

11,240 ( 16,921 )

Cash, cash equivalents and restricted cash at beginning of year 28,158 16,918

5 unchanged sentences

Purchase of fixed assets recorded in accounts payable $ 47 $ 77

Intangible additions recorded in contingent liabilities $ — $ 1,476

Transaction cost recorded in accounts payable $ — $ 15

18 unchanged sentences

Liquidity and Capital Resources

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 expects to continue to incur losses as it invests in research and development activities to improve its technology 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.

16 unchanged sentences

government and agency securities.

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:

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 amount presented in the consolidated statements of cash flows:

(in thousands) December 31, 2025 December 31, 2024

6 unchanged sentences

Short-term Investments

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

Short-term investments generally consist of marketable securities 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 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 marketable securities, regardless of contractual maturity, 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.

1 unchanged sentence

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

The Company determines the cost of short‑term investments sold using the specific identification method.

Property and Equipment

8 unchanged sentences

Computer software Shorter of 3 years or useful life of asset

The Company first determines whether a set of assets acquired constitutes a business and should be accounted for as a business combination.

If the assets acquired are not a business, the Company accounts for the transaction as an asset acquisition.

Business combinations are accounted for by using the acquisition method of accounting which requires the Company to use significant estimates and assumptions, including fair value estimates, as of the business combination date and to refine those estimates as necessary during the measurement period (defined as the period, not to exceed one year, in which the Company may adjust the provisional amounts recognized).

Under the acquisition method of accounting, the Company recognizes separately from goodwill the identifiable assets acquired, the liabilities assumed, including contingent consideration and all contractual contingencies, generally at the acquisition date fair value.

Contingent purchase consideration to be settled in cash is remeasured to estimated fair value at each reporting period with the change in fair value recorded in the statement of operations.

Costs that the Company incurs to complete the business combination such as investment banking, legal and other professional fees are not considered part of consideration and the Company charges them to general and administrative expense as they are incurred.

The Company measures goodwill as of the acquisition date as the excess of consideration transferred, which is also measured at fair value, over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed.

Should the initial accounting for a business combination be incomplete by the end of a reporting period that falls within the measurement period, the Company reports provisional amounts in its financial statements.

During the measurement period, the Company adjusts the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date and the Company records those adjustments to its financial statements in the period of change, if any.

Under the acquisition method of accounting for business combinations, if the Company identifies changes to acquired deferred tax asset valuation allowances or liabilities related to uncertain tax positions during the measurement period and they relate to new information obtained about facts and circumstances that existed as of the acquisition date, those changes are considered a measurement period adjustment and the Company records the offset to goodwill.

The Company records all other changes to deferred tax asset valuation allowances and liabilities related to uncertain tax positions in current period income tax expense.

Goodwill, Intangible Assets and Other Long-Lived Assets

Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of net assets acquired.

Goodwill is reviewed for impairment at least annually during the fourth quarter, or more frequently if an event occurs indicating the potential for impairment.

During the goodwill impairment review, the Company assesses qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than the carrying amount, including goodwill.

The Company operates in one reporting unit.

The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, cost factors, the overall financial performance, and events affecting the reporting unit.

During the goodwill impairment review, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than the carrying amount, including goodwill.

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 operates in one reporting unit for the purpose of goodwill impairment testing.

The assessed qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, cost factors, the overall financial performance, and events affecting the reporting unit.

If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than the carrying amount, then no additional assessment is deemed necessary.

Otherwise, the Company proceeds to perform the quantitative assessment.

Otherwise, the Company proceeds to the quantitative assessment.

The Company will then evaluate goodwill for impairment by comparing the estimated fair value of the reporting unit to its carrying value, including the associated goodwill.

1 unchanged sentence

The Company’s cash flow assumptions consider historical and forecasted revenue, operating costs and other relevant factors.

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 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.

If the fair value of the reporting unit is lower than its carrying value, the Company would record an impairment loss in the period in which the determination was made.

Intangible Assets and Other Long-Lived Assets

The Company’s identifiable intangible assets are composed of acquired technologies and customer relationships.

Identifiable intangible assets with finite lives are generally amortized on a straight-line basis over the assets’ respective estimated useful life.

3 unchanged sentences

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.

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

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

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

For the purposes of identifying and measuring impairment, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

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

Public, Private Placement, Forward Purchase and Backstop Warrants

34 unchanged sentences

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

For xPloration instruments and related consumables sold by the Company, control transfers to the customer at a point in time.

To indicate the transfer of control, the Company must have a right to payment, legal title must have passed to the customer, and the customer must have the significant risks and rewards of ownership.

Returns for instruments sold are estimated and recorded as a reduction of revenue at the time of sale and are estimated based on historical experience and known trends.

For extended warranty and service, control transfers to the customer over the term of the arrangement and revenue is recognized based upon the period of time elapsed under the arrangement.

Cost of Revenue

Cost of revenue for xPloration instruments and consumables includes costs of material parts and associated freight, shipping and handling, contract manufacturing costs, warranty services, costs of servicing instruments at customer sites, and other direct costs related to xPloration revenue recognized in the period.

Accounts Receivable, Unbilled Receivables and Deferred Revenue

9 unchanged sentences

Unbilled receivables were $ 0.8 million and $ 2.6 million as of December 31, 2025 and 2024, respectively.

Deferred revenue as of December 31, 2025 is expected to be recognized within the next 12 months.

Deferred revenue was $ 3.2 million and $ 2.5 million as of December 31, 2025 and December 31, 2024, respectively.

During the year ended December 31, 2025, the amount recognized as revenue that was previously deferred at December 31, 2024 was $ 2.3 million.

30 unchanged sentences

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

Restructuring Costs

Restructuring costs relate to cost realignment actions implemented in February and July of 2025 by the Company to optimize business operations and better align its cost structure.

These costs primarily consist of severance and other employee-related expenses, including one-time termination benefits and other post-employment benefits.

Termination benefits are expensed at the date the entity notifies the employee, unless the employee must provide future service, in which case the benefits are recognized over the requisite service period.

During the year ended December 31, 2025, the Company recognized approximately $ 1.9 million of restructuring charges as operating expenses in the consolidated statement of operations, substantially all of which related to severance and benefit continuation costs.

Workforce reductions impacted 22 employees during the year ended December 31, 2025.

There were no restructuring costs incurred during the year ended December 31, 2024.

Recent Accounting Pronouncements

7 unchanged sentences

Effective for the Company for annual periods beginning after December 15, 2024, with early adoption permitted.

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

The Company adopted ASU 2023-09 as of January 1, 2025, which did not have a material impact on its consolidated financial statements and related disclosures.

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

14 unchanged sentences

(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, 2025, amounts due from three partners exceeded 10% of gross trade receivables and accounted for 83 % of net trade receivables.

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

Fair Value Measurement

13 unchanged sentences

Short-term investments

Government and agency securities $ 30,429 $ 1,316 — $ 31,745

Asset-backed securities — 91 — 91

Government securities

$ 28,501 $ — $ — $ 28,501

Total short-term investments $ 28,501 $ — $ — $ 28,501

23 unchanged sentences

The Company did not adjust or override any fair value measurements provided by these pricing services as of December 31, 2025 or December 31, 2024.

There were no Level 2 available-for-sale securities as of December 31, 2025.

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

8 unchanged sentences

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

( 341 ) 400 1,076 1,135

Balance as of December 31, 2024

6 unchanged sentences

_____________

(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.

(1) Changes in the fair values of contingent liabilities in connection with the acquisition of Icagen are recognized in Other operating 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.

(2) Changes in the fair values of contingent liabilities in connection with the acquisitions of Taurus 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.

4 unchanged sentences

The Company classified short-term investments as available-for-sale securities, as the sale of such investments may be required prior to maturity to implement management strategies.

The following tables summarize short-term investments as of December 31, 2024 and December 31, 2023:

The following tables summarize short-term investments as of December 31, 2025 and 2024:

December 31, 2025

(in thousands) Amortized Cost Gains Losses Estimated

Government and agency securities $ 31,719 $ 30 $ ( 3 ) $ 31,746

Asset-backed securities 90 — — 90

Total investments $ 31,809 $ 30 $ ( 3 ) $ 31,836

Government securities

$ 28,489 $ 12 $ — $ 28,501

Total short-term investments

$ 28,489 $ 12 $ — $ 28,501

December 31, 2024

2 unchanged sentences

Asset-backed securities 90 — — 90

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

Total short-term investments

$ 31,809 $ 30 $ ( 3 ) $ 31,836

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.

3 unchanged sentences

Due after one year

Total investments $ 31,809 $ 31,836

The following tables summarize the Company’s available-for-sale investments’ gross unrealized losses and fair value aggregated by investment category and length of time that individual securities have been in a continuous loss position, as of December 31, 2024 and December 31, 2023:

December 31, 2024

Less than 12 months More than 12 months Total

(in thousands) Count Fair

Value Unrealized

Losses Count Fair

Value Unrealized

Losses Count Fair

Value Unrealized

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

Total short-term investments

$ 28,489 $ 28,501

The following table summarizes the Company’s available-for-sale investments’ gross unrealized losses and fair value aggregated by investment category and length of time that individual securities have been in a continuous loss position, as of December 31, 2024.

There were no available-for-sale investments in a gross unrealized loss position as of December 31, 2025.

December 31, 2024

7 unchanged sentences

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

Asset-backed securities

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

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.

2 unchanged sentences

Balance Sheet Account Details

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following as of December 31, 2025 and 2024 .

(in thousands) 2025 2024

Prepaid expenses

xPloration related inventory

Other current assets

Total prepaid expenses and other current assets

$ 3,926 $ 3,432

Inventories are stated at the lower of cost or net realizable value and primarily consist of work‑in‑progress and finished xPloration instruments, along with related consumables.

Cost for xPloration instruments is determined using the specific identification method.

Property and Equipment, Net

10 unchanged sentences

Depreciation expense, which is included in operating expense, was $ 6.6 million and $ 4.1 million was recognized during the years ended December 31, 2025 and 2024, respectively, and was included in operating expenses.

The Company regularly assesses its business to determine whether events or circumstances exist that indicate whether the carrying amount of its long-lived assets may not be recoverable.

As part of its annual impairment assessment in 2025, the Company performed a quantitative assessment.

The Company performed a recoverability test by comparing the asset groups’ carrying amounts to their estimated undiscounted cash flows.

The Company identified two asset groups, antibody and ion channel, and based on the impairment test, it determined the carrying value of the ion channel asset group exceeded its current and expected future cash flows, on an undiscounted basis.

The fair value of the property, plant and equipment was determined based on estimated liquidation value, considering physical condition, functionality, and market conditions.

As a result, the Company recorded a $ 3.3 million impairment charge related to certain ion channel property and equipment, which was recognized as depreciation expense within “ Research and development ” in the consolidated statements of operations.

For the antibody asset group, the carrying value did not exceed its fair value and as a result, the Company did not perform a fair value analysis.

For the year ended December 31, 2024, there was no impairment of property and equipment.

The impairment charge was determined using Level 3 inputs measured based on orderly liquidation value.

Unobservable inputs for the orderly liquidation value included replacement cost estimates and assumptions regarding physical deterioration and obsolescence.

Observable market sales data for comparable assets was considered for corroborative information, however, significant unobservable inputs and liquidation-specific assumptions resulted in a Level 3 fair value measurement.

Accrued Expenses and Other Current Liabilities

2 unchanged sentences

Compensation $ 5,788 $ 5,468

Due to former parent Ligand

Professional service fees 262 324

Royalties owed to third parties 67 143

Other 174 206

Total accrued expenses and other current liabilities $ 6,291 $ 6,141

3 unchanged sentences

Goodwill $ 83,979 $ 83,979

Definite-lived intangible assets

Finite-lived intangible assets

Completed technology

5 unchanged sentences

Total goodwill and other identifiable intangible assets, net $ 209,128 $ 222,039

During the year ended December 31, 2025, the Company bypassed the qualitative test and performed a quantitative assessment using a combination of an income and a market approach to determine the fair value of its reporting unit.

Under the income approach, fair value was estimated using a discounted cash flow method, which incorporated cash flow projections and a discount rate.

The discount rate was developed using a weighted average cost of capital and other market and industry data.

Under the market approach, fair value was estimated using a guideline public company method, which incorporated market-based revenue multiples derived from comparable companies.

The significant assumptions used in these approaches include projected revenue, the discount rate (inclusive of a company-specific risk premium), and selected revenue multiples, which represented significant unobservable inputs and therefore are classified as Level 3 inputs.

To assess the reasonableness of the concluded fair value, the Company also performed a reconciliation to market capitalization, which included an implied control premium and other relevant market considerations.

There were no changes in the carrying amount of goodwill during the years ended December 31, 2025 and 2024.

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 amortization of intangibles expense on the consolidated statements of operations.

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” on the consolidated statements of operations.

Amortization expense of $ 12.9 million and $ 17.4 million was recognized for the years ended December 31, 2025 and 2024, respectively.

9 unchanged sentences

Total future amortization expense

Gain on Sale of Ion Channel Asset

On May 7, 2025, the Company entered into an Asset Purchase and Assignment Agreement (the “Asset Purchase Agreement”) with Angelini Pharma S.p.A.

(“Angelini”).

Under the Asset Purchase Agreement, the Company sold, transferred, assigned and conveyed to Angelini, and Angelini purchased, acquired and accepted from the Company, all of the Company’s rights, title and interest in and to the transferred assets, which include among other things the intellectual property and related know-how (collectively, the “Purchased Assets”) generated in connection with the license agreement, dated December 4, 2018, as amended on June 30, 2021, October 21, 2022, and December 22, 2023, by and between F.

Hoffmann-La Roche Ltd (“Roche”) and the Company’s subsidiary Icagen, which allowed the Company to receive potential development and commercial milestones and royalties on net sales of any approved products.

The sale qualified as a sale of a non-financial asset and the carrying value of the Purchased Assets as of May 7, 2025 was zero.

Cash proceeds from the sale of $ 3.0 million were recorded to other operating income, net during the year ended December 31, 2025, and included as a part of income from operations in accordance with ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets.

Commitments and Contingencies

11 unchanged sentences

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.

The below table provides supplemental cash flow and other information related to operating leases (in thousands, except for lease term and discount rate):

The below tables provide supplemental cash flow and other information related to operating leases (in thousands, except for lease term and discount rate):

Year Ended December 31,

2 unchanged sentences

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

As of December 31,

Weighted average remaining lease term (in years) 5.9 6.8

12 unchanged sentences

Total lease payments 23,265

Less tenant improvement allowance ( 3,883 )

Less imputed interest

Present value of lease liabilities $ 20,334

11 unchanged sentences

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.

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.

15 unchanged sentences

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.

Public, Private Placement, Forward Purchase and Backstop Warrants

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

38 unchanged sentences

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.

No shares of common stock in the ATM offering were issued during the year ended December 31, 2025.

PIPE Offering

On August 24, 2025, the Company entered into a securities purchase agreement with the purchasers named therein for the private placement (“August 2025 PIPE”) of 21,254,106 shares of the Company’s common stock at a price of $ 1.40 per share or, with respect to any purchaser that was an officer, director, employee or consultant of the Company, $ 1.85 per share.

The aggregate gross proceeds from the August 2025 PIPE were approximately $ 30.0 million, before deducting placement agent fees and offering expenses.

The closing of the August 2025 PIPE occurred on August 26, 2025.

On September 12, 2025, the Company filed a registration statement on Form S-3 with the SEC registering the resale of the shares of common stock issued in the August 2025 PIPE, which registration statement was declared effective by the SEC on September 19, 2025.

Share-Based Compensation

3 unchanged sentences

(in thousands) 2025 2024

Research and development expenses $ 10,588 $ 12,804

General and administrative expenses 10,911 12,016

General and administrative

$ 9,649 $ 10,911

Research and development

Total share-based compensation expense $ 15,824 $ 21,499

44 unchanged sentences

As of December 31, 2025, unrecognized stock-based compensation expense related to OmniAb options was $ 13.9 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.14 years.

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 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.

As of December 31, 2025, there was no unrecognized stock-based compensation expense related to Ligand options.

The aggregate intrinsic value of OmniAb options exercised by OmniAb service providers during the year ended December 31, 2025 was negligible.

Cash received from OmniAb options exercised by OmniAb service providers during the year ended December 31, 2025 was also negligible.

There were no OmniAb options exercised by Ligand service providers during the year ended December 31, 2025.

13 unchanged sentences

As of December 31, 2025, unrecognized stock-based compensation expense related to OmniAb RSUs was $ 3.9 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.28 years.

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, 2025 was $ 2.4 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

2 unchanged sentences

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.

During the year ended December 31, 2025, the PRSUs were achieved at a 158 % achievement level.

The following table summarizes the PRSU activity during the year ended December 31, 2025, under the Company’s equity awards plans:

3 unchanged sentences

Granted — $ —

Vested ( 149,882 ) $ 16.11

Change in units based on performance achievement 55,133 $ 16.11

Forfeited — $ —

Unvested balance at December 31, 2025

94,749 $ 16.11

_____________

(1) Pursuant to the terms of the awards granted, the actual number of awards earned could range between 0 % and 200 % of target.

The amount disclosed represents PRSU grants at target payout.

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

As of December 31, 2025, there is no unrecognized stock-based compensation expense related to PRSUs.

Employee Stock Purchase Plan

11 unchanged sentences

Dividend yield — % — %

As of December 31, 2024, there was $ 0.8 million of unrecognized compensation expense associated with the ESPP, which is expected to be recognized over an estimated weighted-average period of 1.25 years.

As of December 31, 2025, there was $ 0.4 million of unrecognized compensation expense associated with the ESPP, which is expected to be recognized over an estimated weighted-average period of 1.00 year.

During the year ended December 31, 2025, there were 398,562 shares issued pursuant to the ESPP.

4 unchanged sentences

Federal $ — $ ( 364 )

State 26 ( 62 )

Total current expense (benefit):

( 338 ) ( 902 )

Deferred expense (benefit):

4 unchanged sentences

Total income tax expense (benefit) $ ( 1,515 ) $ ( 9,378 )

A reconciliation of income tax expense (benefit) at the U.S.

In accordance with the updated disclosure requirements of ASU 2023‑09 for 2025, the reconciliation of the income tax benefit at the U.S.

federal statutory rate to the provision for income taxes is as follows:

Year Ended December 31,

(in thousands) 2025

Tax at federal statutory rate $ ( 13,922 ) 21.0 %

State and local income tax, net of federal income tax effect (1)

Research and development credits

( 1,035 ) 1.6 %

Changes in valuation allowances

11,869 ( 17.9 ) %

Nontaxable and nondeductible items

Share-based compensation

1,104 ( 1.7 ) %

Executive compensation limitation

467 ( 0.7 ) %

Total income tax benefit and effective tax rate

$ ( 1,515 ) 2.3 %

_____________

(1) California state taxes comprised the majority (greater than 50 percent) of the tax effect in this category.

As previously disclosed for the year ended December 31, 2024 and prior to the adoption of ASU 2023‑09, the reconciliation of income tax benefit at the U.S.

federal statutory rate to the provision for income taxes is as follows:

(in thousands) 2024

Tax at federal statutory rate $ ( 14,996 ) 21.0 %

State, net of federal benefit

( 1,376 ) 1.9 %

Share-based compensation 1,207 ( 1.8 ) %

7 unchanged sentences

Change in valuation allowance 4,688 ( 6.6 ) %

Other 8 0.0 % 7 0.0 %

Total income tax benefit and effective tax rate $ ( 9,378 ) 13.1 %

4 unchanged sentences

The Company offsets all deferred tax assets and liabilities by jurisdiction, as well as any related valuation allowance, and presents them on its consolidated balance sheet as a non-current deferred income tax asset or liability (as applicable).

For the year ended December 31, 2025, the valuation allowance increased by $ 13.3 million.

Deferred tax assets (liabilities) are comprised of the following:

9 unchanged sentences

Accrued liabilities

Other 544 527

Total deferred tax assets before valuation allowance

32 unchanged sentences

Additions based on tax positions related to the current year 125 99

Reductions for tax positions of prior years ( 30 ) ( 7 )

Additions (reductions) for tax positions of prior years

Balance at end of year $ 822 $ 638

7 unchanged sentences

Net operating loss and research credit carryforwards arising prior to these years are also open to examination if and when utilized.

Income taxes paid for the years ended December 31, 2025 and 2024 were negligible.

Net Loss Per Share

14 unchanged sentences

Earnout shares 16,292,542 16,292,542

Avista private placement warrants 8,233,333 8,233,333

Avista public warrants 7,666,667 7,666,667

Private placement warrants

8,233,333 8,233,333

Public warrants

7,666,667 7,666,667

Restricted stock units issued and outstanding

13 unchanged sentences

The following table outlines information about segment revenues, significant segment expenses, and segment net loss for the years ended December 31, 2025 and 2024:

(in thousands) December 31,

(in thousands) Year Ended December 31,

$ 18,666 $ 26,391

Cost of xPloration revenue

Research and development expenses

27 unchanged sentences

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