0001564590-21-028008.txt : 20210514 0001564590-21-028008.hdr.sgml : 20210514 20210514160550 ACCESSION NUMBER: 0001564590-21-028008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 65 CONFORMED PERIOD OF REPORT: 20210331 FILED AS OF DATE: 20210514 DATE AS OF CHANGE: 20210514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AbCellera Biologics Inc. CENTRAL INDEX KEY: 0001703057 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 000000000 STATE OF INCORPORATION: A1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-39781 FILM NUMBER: 21924546 BUSINESS ADDRESS: STREET 1: 2215 YUKON STREET CITY: VANCOUVER STATE: A1 ZIP: V5Y 0A1 BUSINESS PHONE: (604) 559-9005 MAIL ADDRESS: STREET 1: 2215 YUKON STREET CITY: VANCOUVER STATE: A1 ZIP: V5Y 0A1 10-Q 1 abcl-10q_20210331.htm 10-Q abcl-10q_20210331.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 001-39781

 

AbCellera Biologics Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

British Columbia

Not Applicable

( State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

2215 Yukon Street

Vancouver, BC

V5Y 0A1

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (604) 559-9005

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common shares, no par value per share

 

ABCL

 

The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒    No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.     Yes      No  

As of May 10, 2021, the registrant had  270,925,888 common shares, no par value per share, outstanding.

 

 

 


 

 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

2

 

Condensed Consolidated Statements of Stockholders’ Equity

3

 

Condensed Consolidated Statements of Cash Flows

4

 

Notes to Unaudited Condensed Consolidated Financial Statements

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

12

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

23

Item 4.

Controls and Procedures

23

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

25

Item 1A.

Risk Factors

25

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

26

Item 3.

Defaults Upon Senior Securities

26

Item 4.

Mine Safety Disclosures

26

Item 5.

Other Information

26

Item 6.

Exhibits

27

 

Signatures

28

 

 

 

i


 

 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

AbCellera Biologics Inc.

Condensed Consolidated Balance Sheets

(Expressed in thousands of U.S. dollars except share data)

(Unaudited)

 

 

 

December 31, 2020

 

 

March 31, 2021

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

594,116

 

 

$

685,795

 

Accounts receivable

 

 

903

 

 

 

23,371

 

Accrued accounts receivable

 

 

212,336

 

 

 

193,071

 

Other current assets

 

 

5,970

 

 

 

5,745

 

Total current assets

 

 

813,325

 

 

 

907,982

 

Long term assets:

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

17,923

 

 

 

34,618

 

Intangible assets

 

 

115,153

 

 

 

112,688

 

Goodwill

 

 

31,500

 

 

 

31,500

 

Investments in and loans to equity accounted investees

 

 

19,247

 

 

 

32,187

 

Other long-term assets

 

 

8,388

 

 

 

9,548

 

Total long-term assets

 

 

192,211

 

 

 

220,541

 

Total assets

 

$

1,005,536

 

 

$

1,128,523

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and other liabilities

 

$

20,195

 

 

$

13,287

 

Current portion of contingent consideration payable

 

 

13,411

 

 

 

13,762

 

Income taxes payable

 

 

36,152

 

 

 

30,030

 

Accrued royalties payable

 

 

27,143

 

 

 

20,010

 

Deferred revenue

 

 

6,589

 

 

 

11,306

 

Total current liabilities

 

 

103,490

 

 

 

88,395

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Operating lease liability

 

 

3,715

 

 

 

16,973

 

Deferred revenue and grant funding

 

 

25,894

 

 

 

28,730

 

Contingent consideration payable

 

 

9,148

 

 

 

9,378

 

Deferred tax liability

 

 

26,161

 

 

 

26,992

 

Other long-term liabilities

 

 

6,620

 

 

 

931

 

Total long-term liabilities

 

 

71,538

 

 

 

83,004

 

Total liabilities

 

 

175,028

 

 

 

171,399

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Common shares: no par value, unlimited authorized shares at December 31, 2020 and March 31, 2021:  269,497,768 and 270,925,930 shares issued and outstanding at December 31, 2020 and March 31, 2021 respectively

 

 

710,387

 

 

 

711,139

 

Additional paid-in capital

 

 

5,919

 

 

 

14,562

 

Accumulated earnings

 

 

114,202

 

 

 

231,423

 

Total shareholders' equity

 

 

830,508

 

 

 

957,124

 

Total liabilities and shareholders' equity

 

$

1,005,536

 

 

$

1,128,523

 

Subsequent events

 

 

 

 

 

 

 

 

 

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

1


 

AbCellera Biologics Inc.

Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

(Expressed in thousands of U.S. dollars except share and per share data)

(Unaudited)

 

 

 

Three months ended March 31,

 

 

 

2020

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

 

Research fees

 

$

4,657

 

 

$

3,986

 

Licensing revenue

 

 

-

 

 

 

20,259

 

Milestone payments

 

 

-

 

 

 

7,000

 

Royalty revenue

 

 

-

 

 

 

171,496

 

Total revenue

 

 

4,657

 

 

 

202,741

 

Operating expenses:

 

 

 

 

 

 

 

 

Royalty fees

 

 

-

 

 

 

20,010

 

Research and development(1)

 

 

4,118

 

 

 

12,352

 

Sales and marketing(1)

 

 

437

 

 

 

2,578

 

General and administrative(1)

 

 

1,650

 

 

 

6,422

 

Depreciation and amortization

 

 

574

 

 

 

3,305

 

Total operating expenses

 

 

6,779

 

 

 

44,667

 

Income (loss) from operations

 

 

(2,122

)

 

 

158,074

 

Other (income) expense

 

 

 

 

 

 

 

 

Other (income) expense

 

 

1,001

 

 

 

(265

)

Grants and incentives

 

 

(1,030

)

 

 

(3,148

)

Total other income

 

 

(29

)

 

 

(3,413

)

Net earnings (loss) before income tax

 

 

(2,093

)

 

 

161,487

 

Provision for income tax

 

 

-

 

 

 

44,266

 

Net earnings (loss) and comprehensive income (loss) for the period

 

$

(2,093

)

 

$

117,221

 

Net earnings (loss) per share attributable to common shareholders

 

 

 

 

 

 

 

 

Basic

 

$

(0.01

)

 

$

0.43

 

Diluted

 

$

(0.01

)

 

$

0.37

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

151,859,924

 

 

 

269,697,212

 

Diluted

 

 

151,859,924

 

 

 

320,282,747

 

 

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

 

 

1Exclusive of depreciation and amortization

 

2


 

 

AbCellera Biologics Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Expressed in thousands of U.S. dollars except share data)

(Unaudited)

 

 

 

Series A1

Preferred Shares

 

 

Series A2

Preferred Shares

 

 

Common Shares

 

 

Additional

Paid-in

 

 

Accumulated

Earnings

 

 

Total

Shareholders'

 

(in thousands, except share data)

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

(Deficit)

 

 

Equity

 

Balances as of December 31, 2020

 

 

-

 

 

$

-

 

 

 

-

 

 

$

-

 

 

 

269,497,768

 

 

$

710,387

 

 

$

5,919

 

 

$

114,202

 

 

$

830,508

 

Shares issued under stock option plan

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,428,162

 

 

 

752

 

 

 

(579

)

 

 

-

 

 

 

173

 

Stock-based compensation expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,021

 

 

 

-

 

 

 

4,021

 

Reclassification of liability classified

   options

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,201

 

 

 

-

 

 

 

5,201

 

Net earnings

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

117,221

 

 

 

117,221

 

Balances as of March 31, 2021

 

 

-

 

 

$

-

 

 

 

-

 

 

$

-

 

 

 

270,925,930

 

 

$

711,139

 

 

$

14,562

 

 

$

231,423

 

 

$

957,124

 

 

 

 

Series A1

Preferred Shares

 

 

Series A2

Preferred Shares

 

 

Common Shares

 

 

Additional

Paid-in

 

 

Accumulated

Earnings

 

 

Total

Shareholders'

 

(in thousands, except share data)

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

(Deficit)

 

 

Equity

 

Balances as of December 31, 2019

 

 

2,105,264

 

 

$

7,546

 

 

 

-

 

 

$

-

 

 

 

151,681,382

 

 

$

5,122

 

 

$

2,300

 

 

$

(4,716

)

 

$

10,252

 

Issuance of Series A2 preferred shares

 

 

-

 

 

 

-

 

 

 

6,017,784

 

 

 

74,662

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

74,662

 

Shares issued under stock option plan

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

535,000

 

 

 

235

 

 

 

(111

)

 

 

-

 

 

 

124

 

Share-based compensation expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

744

 

 

 

-

 

 

 

744

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,093

)

 

 

(2,093

)

Balances as of March 31, 2020

 

 

2,105,264

 

 

$

7,546

 

 

 

6,017,784

 

 

$

74,662

 

 

 

152,216,382

 

 

$

5,357

 

 

$

2,933

 

 

$

(6,809

)

 

$

83,689

 

 

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

 

3


 

 

AbCellera Biologics Inc.

Condensed Consolidated Statements of Cash Flows

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

 

 

Three months ended March 31,

 

 

 

2020

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(2,093

)

 

$

117,221

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Depreciation of property and equipment

 

 

415

 

 

 

840

 

Amortization of intangible assets

 

 

158

 

 

 

2,465

 

Amortization of operating lease right-of-use-assets

 

 

73

 

 

 

661

 

Stock-based compensation

 

 

1,237

 

 

 

5,427

 

Deferred tax expense

 

 

-

 

 

 

623

 

Other

 

 

(28

)

 

 

(191

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts and accrued research fees receivable

 

 

(26,611

)

 

 

(30,073

)

Accrued royalties receivable

 

 

-

 

 

 

26,861

 

Income taxes payable

 

 

-

 

 

 

(6,123

)

Accounts payable and accrued liabilities

 

 

(156

)

 

 

(5,194

)

Deferred revenue

 

 

27,676

 

 

 

6,086

 

Accrued royalties payable

 

 

-

 

 

 

(7,134

)

Other assets and liabilities

 

 

(1,435

)

 

 

(1,924

)

Net cash (used in) provided by operating activities

 

 

(764

)

 

 

109,545

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(583

)

 

 

(3,644

)

Purchase of intangible assets

 

 

(5,000

)

 

 

-

 

Investment in equity investees

 

 

-

 

 

 

(12,195

)

Net cash used in investing activities

 

 

(5,583

)

 

 

(15,839

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Repayment of long-term debt

 

 

(2,033

)

 

 

(1,716

)

Proceeds from long-term debt

 

 

16,171

 

 

 

-

 

Payment of deferred financing fees

 

 

(799

)

 

 

-

 

Short-term borrowings

 

 

(387

)

 

 

-

 

Issuance of common shares pursuant to exercise of stock options

 

 

124

 

 

 

173

 

Proceeds from issuance of preferred shares - series A2 financing

 

 

74,662

 

 

 

-

 

Net cash provided by (used in) financing activities

 

 

87,738

 

 

 

(1,543

)

Effect of exchange rate changes on cash and cash equivalents

 

 

 

 

 

 

(484

)

Increase in cash and cash equivalents

 

 

81,391

 

 

 

91,679

 

Cash and cash equivalents, beginning of period

 

 

7,553

 

 

 

594,116

 

Cash and cash equivalents, end of period

 

$

88,944

 

 

$

685,795

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

 

 

 

Property plant and equipment in accounts payable

 

 

95

 

 

 

423

 

Right-of-use assets obtained in exchange for operating lease obligation

 

741

 

 

 

14,188

 

Purchase of intangible assets in exchange for in-licensing agreement payable

 

 

9,060

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

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

 

4


 

 

AbCellera Biologics Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Unaudited)

1. Nature of operations

AbCellera Biologics Inc.’s (the “Company”) mission is to improve health with technologies that transform the way that antibody-based therapies are discovered. The Company aims to become the centralized operating system for next generation antibody discovery. The Company’s full-stack, AI-powered drug discovery platform searches and analyzes the database of natural immune systems to find antibodies that can be developed as drugs. The Company believes its technology increases the speed and the probability of success of therapeutic antibody discovery, including enabling discovery against targets that may otherwise be intractable. Rather than advancing its own clinical pipeline of drug candidates, the Company forges partnerships with drug developers of all sizes, from large cap pharmaceutical to small biotechnology companies. 

2. Basis of presentation

The accompanying interim condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC for interim financial information. Accordingly, these financial statements do not include all the information and footnotes required for complete financial statements and should be read in conjunction with the audited consolidated financial statements of the Company and the accompanying notes thereto for the year ended December 31, 2020.

These unaudited interim condensed consolidated financial statements reflect all adjustments, consisting solely of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods presented. The results of operations for the three months ended March 31, 2021 and 2020 are not necessarily indicative of results that can be expected for a full year. These unaudited interim condensed consolidated financial statements follow the same significant accounting policies as those described in the notes to the audited consolidated financial statements of the Company for the year ended December 31, 2020, except for the new accounting guidance adopted during the period (Note 3).

All amounts expressed in the consolidated financial statements of the Company and the accompanying notes thereto are expressed in thousands of U.S. dollars, except for share and per share data and where otherwise indicated. References to “$” are to U.S. dollars and references to “C$” and “CAD” are to Canadian dollars.

3. Significant accounting policies

Use of estimates

The preparation of the consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Areas of significant estimates include, but are not limited to, revenue recognition including estimated timing of completion of performance obligations and determining whether an option for additional goods or services represents a material right, recoverability of investment tax credits receivable, value of contingent consideration payable and the fair value of stock-based compensation awards. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could significantly differ from those estimates.

COVID-19 Pandemic

With the global spread of the ongoing COVID-19 pandemic, the Company has implemented business continuity plans designed to address and mitigate the impact of the COVID-19 pandemic on its employees and its business. The Company has taken measures to secure its research and development activities, while work in its laboratories and facilities has been re-organized to reduce risk of COVID-19 transmission. Given the global economic impact, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the pandemic, the Company’s business, financial condition, and results of operations could be materially adversely affected. The Company continues to closely monitor the COVID-19 pandemic as it evolves its business continuity plans and response strategy. As of the date of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. Actual results could differ from these estimates, and any such differences may be material to the Company’s financial statements.

5


 

Recent accounting pronouncements not yet adopted

The Company has reviewed recent accounting pronouncements and concluded that they are either not applicable to the Company or that there was no material impact or no material impact is expected in the consolidated financial statements as a result of future adoption.

4. Net Earnings (Loss) per share

Basic and diluted net earnings (loss) per share attributable to common shareholders was calculated as follows:

 

 

 

Three months ended March 31,

 

 

 

2020

 

 

2021

 

 

 

(in thousands, except share and per share data)

 

Basic earnings (loss) per share

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

(2,093

)

 

$

117,221

 

Net earnings (loss) attributable to common shareholders - basic

 

$

(2,093

)

 

$

117,221

 

Weighted-average common shares outstanding - basic

 

 

151,859,924

 

 

 

269,697,212

 

Net earnings (loss) per share attributable to common shareholders - basic

 

$

(0.01

)

 

$

0.43

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share

 

 

 

 

 

 

 

 

Net earnings (loss) attributable to common shareholders - diluted

 

$

(2,093

)

 

$

117,221

 

Weighted-average common shares outstanding - basic

 

 

151,859,924

 

 

 

269,697,212

 

Stock options and RSUs

 

 

-

 

 

 

50,585,535

 

Weighted-average common shares outstanding - diluted

 

 

151,859,924

 

 

 

320,282,747

 

Net earnings (loss) per share attributable to common shareholders - diluted

 

$

(0.01

)

 

$

0.37

 

 

The Company’s potentially dilutive securities, which include convertible preferred shares and stock options have been excluded from the computation of diluted net loss per share for the three months ended March 31, 2020 as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding for the three months ended March 31, 2020 used to calculate both basic and diluted net loss per share attributable to common shareholders is the same.

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net earnings (loss) per share attributable to common shareholders for the periods indicated because including them would have had an anti-dilutive effect:

 

 

 

Three months ended March 31,

 

 

 

2020

 

 

2021

 

Options to purchase common shares

 

 

13,310,018

 

 

 

-

 

Convertible preferred shares

 

 

2,640,178

 

 

 

-

 

Total potential common shares excluded

 

 

15,950,196

 

 

 

-

 

 

5. Other current assets

Other current assets consisted of the following:

 

 

 

 

 

December 31,

2020

 

 

March 31,

2021

 

 

 

 

 

(in thousands)

 

Tax and investment tax credit receivable

 

 

 

$

489

 

 

$

249

 

Prepaid expenses

 

 

 

 

4,073

 

 

 

4,287

 

Materials and supplies

 

 

 

 

1,408

 

 

 

1,209

 

Total other current assets

 

 

 

$

5,970

 

 

$

5,745

 

 

6


 

 

6. Property and equipment, net

Property and equipment, net consisted of the following:

 

 

 

 

 

December 31,

2020

 

 

March 31,

2021

 

 

 

 

 

(in thousands)

 

Computers

 

 

 

$

6,324

 

 

$

6,309

 

Laboratory equipment

 

 

 

 

9,423

 

 

 

13,035

 

Furniture and fixtures

 

 

 

 

119

 

 

 

119

 

Leasehold improvements

 

 

 

 

3,708

 

 

 

3,977

 

Operating lease right-of-use assets

 

 

 

 

3,935

 

 

 

17,463

 

Property and equipment

 

 

 

 

23,509

 

 

 

40,903

 

Less accumulated depreciation

 

 

 

 

(5,586

)

 

 

(6,285

)

Property and equipment, net

 

 

 

$

17,923

 

 

$

34,618

 

 

Depreciation expense on property and equipment for the three months ended March 31, 2020 and 2021 was $0.4 million and $0.8 million, respectively.

7. Intangible assets:

 

Intangible assets consisted of the following:

 

 

 

March 31, 2021

 

 

 

Gross

carrying

amount

 

 

Accumulated

amortization

 

 

Net book

value

 

 

 

(in thousands)

 

License

 

$

35,873

 

 

$

4,125

 

 

$

31,748

 

Technology

 

 

41,400

 

 

 

860

 

 

 

40,540

 

IPR&D

 

 

40,400

 

 

 

-

 

 

 

40,400

 

 

 

$

117,673

 

 

$

4,985

 

 

$

112,688

 

 

At March 31, 2021, amortization expense on intangible assets is estimated to be as follows for each of the next five years:

 

 

 

Amortization

Expense

 

 

 

(in thousands)

 

2021

 

$

9,860

 

2022

 

 

9,860

 

2023

 

 

9,834

 

2024

 

 

3,476

 

2025

 

 

3,476

 

 

 

$

36,506

 

 

8. Investments in and loans to equity accounted investees

The Company has entered into two joint ventures as part of the construction of future office and laboratory headquarters. During 2020, the Company entered into a joint venture with Dayhu (Dayhu JV). To date, the equity investment balance of $19.3 million represents the cash contribution made since inception.   In the three months ended March 31, 2021 the Company entered into the Beedie joint venture (Beedie JV). To date we have contributed $11.7 million into the Beedie JV. To date, the Company has not recorded any amount of proportionate income or loss with respect to either venture.

In the three months ended March 31, 2021, the Company made a commitment up to CAD$

7


 

82.7 million ($61.5 million) to the Dayhu JV to fund the construction at a rate referenced to an applicable Canadian bank prime rate plus 0.6%, and repayment on the earlier of thirty months from the date of initial advancement and September 1, 2023, or upon the trigger of certain liquidity events as defined in the agreement. The loan is secured by the underlying land and future assets of the joint venture. At March 31, 2021, the outstanding related party loan balance was $1.2 million to the joint venture.

9. Accounts payable and other liabilities

Accounts payable and other liabilities consisted of the following:

 

 

 

 

 

December 31,

2020

 

 

March 31,

2021

 

 

 

 

 

(in thousands)

 

Accounts payable and accrued liabilities

 

 

 

$

7,130

 

 

$

3,585

 

Liability for in-licensing agreement

 

 

 

 

5,000

 

 

 

4,545

 

Operating lease liability

 

 

 

 

675

 

 

 

1,533

 

Liability classified options

 

 

 

 

4,270

 

 

 

474

 

Government remittances payable

 

 

 

 

1,988

 

 

 

1,207

 

Current portion of deferred grant funding

 

 

 

 

942

 

 

 

1,943

 

Current portion of long-term debt

 

 

 

 

190