UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended September 30, ~~2022~~2023


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

Commission file number 001-39725

Maravai LifeSciences Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware

85-2786970

(State or other jurisdiction of incorporation or organization)

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

10770 Wateridge Circle, Suite 200

San Diego, California

92121

(Address of principal executive offices)

(Zip code)

Registrant’s telephone number, including area code: (858) 546-0004

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock, $0.01 par value

MRVI

The Nasdaq Stock Market LLC

~~Securities registered pursuant to section 12(g) of the Act: None~~

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 x No o

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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	ý	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

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. o

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

As of ~~October 28, 2022, 131,539,642~~November 1, 2023, 132,188,632 shares of the registrant’s Class A common stock were outstanding and ~~123,669,196~~119,094,026 shares of the registrant’s Class B common stock were outstanding.

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TABLE OF CONTENTS


			Page
Forward-Looking Statements			3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of September 30, ~~2022~~2023 (unaudited) and December 31, ~~2021~~2022			5
Condensed Consolidated Statements of ~~Income~~Operations for the Three and Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)			6
Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)			7
Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three and Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)			8
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)			1110
Notes to Condensed Consolidated Financial Statements (unaudited)			1312
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			3736
Item 3. Quantitative and Qualitative Disclosures About Market Risk			5654
Item 4. Controls and Procedures			5754

PART II - OTHER INFORMATION
Item 1. Legal Proceedings			5856
Item 1A. Risk Factors			5856
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			5857
Item 3. Defaults Upon Senior Securities			5857
Item 5. Other Information			5857
Item 6. Exhibits			5957
Signatures			6058

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this report, including, without limitation, statements under the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements often may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely” and other words and terms of similar meaning. These statements are based upon management’s current expectations, assumptions and estimates and are not guarantees of the timing or nature of our future operating or financial performance or other events. All forward-looking statements are subject to risks, uncertainties and other factors that may cause our actual results to differ materially from those that we expected, including:

•The extent and duration of our revenue associated with COVID-19 related products and services are uncertain and are dependent, in important respects, on factors outside of our control.

•We are dependent on the level of our customers’ spending on and demand for outsourced nucleic acid production and biologics safety testing products and services. A reduction in spending or change in spending priorities of our customers could significantly reduce demand for our products and services and could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.

•Ongoing macroeconomic challenges and changes in economic conditions, including adverse developments affecting banks and financial institutions, follow-on effects of those events and related systemic pressures, could negatively impact, directly or indirectly, our and our customers’ current and future business operations and our financial condition, revenue and earnings.

•Certain of our products are used by customers in the production of vaccines and therapies, some of which represent relatively new and still-developing modes of treatment. Unforeseen adverse events, negative clinical outcomes, development of alternative therapies, or increased regulatory scrutiny of these and their financial cost may damage public perception of the safety, utility, or efficacy of these vaccines and therapies or other modes of treatment and may harm our customers’ ability to conduct their business. Such events may negatively impact our revenue and have an adverse effect on our performance.

•We are dependent on our customers’ spending on and demand for outsourced nucleic acid production and biologics safety testing products and services. A reduction in spending or demand could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.

•We compete with life science, pharmaceutical and biotechnology companies who are substantially larger than we are and potentially capable of developing new approaches that could make our products, services and technology obsolete.

•If our products and services do not perform as expected or the reliability of the technology on which our products and services are based is questioned, we could experience lost revenue, delayed or reduced market acceptance of our products and services, increased costs and damage to our reputation.

•Our products are highly complex and are subject to quality control requirements.

•Our commercial success depends on the market acceptance of our life science reagents. Our reagents may not achieve or maintain significant commercial market acceptance.

•Until the 2020 fiscal year, we had incurred losses for each fiscal year since inception. We may incur losses in the future, and we may not be able to generate sufficient revenue to maintain profitability.

•Our operating results may fluctuate significantly in the future, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide.

•Ongoing geopolitical instability and the resulting economic disruption may negatively impact our business, operations and financial condition.

•Our acquisitions expose us to risks that could adversely affect our business, and we may not achieve the anticipated benefits of acquisitions of businesses or technologies.

•Product liability lawsuits against us could cause us to incur substantial liabilities, limit sales of our existing products and limit commercialization of any products that we may develop.

•Our acquisitions expose us to risks that could adversely affect our business, and we may not achieve the anticipated benefits of acquisitions of businesses or technologies.

•We depend on a limited number of customers for a high percentage of our revenue. If we cannot maintain our current relationships with customers, fail to sustain recurring sources of revenue with our existing customers, or if we fail to enter into new relationships, our future operating results will be adversely affected.

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•We rely on a limited number of suppliers or, in some cases, sole suppliers, for some of our raw materials and may not be able to find replacements or immediately transition to alternative suppliers.

•Our products could become subject to more onerous regulation by the FDA or other regulatory agencies in the future, which could increase our costs and delay or prevent commercialization of our products, thereby materially and adversely affecting our business, financial condition, results of operations, cash flows and prospects.

~~Table of Contents~~

•If we are unable to obtain, maintain and enforce intellectual property protection for our current or future products, or if the scope of our intellectual property protection is not sufficiently broad, our ability to commercialize our products successfully and to compete effectively may be materially adversely affected.

•If we fail to comply with our obligations under any license agreements, disagree over contract interpretation, or otherwise experience disruptions to our business relationships with our licensors, we could lose intellectual property rights that are necessary to our business.

•Our existing indebtedness could adversely affect our business and growth prospects.

•Our principal asset is our interest in Maravai Topco Holdings, LLC (“Topco LLC”), and, accordingly, we depend on distributions from Topco LLC to pay our taxes and expenses, including payments under a tax receivable agreement with the former owners of Topco LLC (the “Tax Receivable Agreement” or “TRA”). Topco LLC’s ability to make such distributions may be subject to various limitations and restrictions.

•Conflicts of interest could arise between our shareholders and Maravai Life Sciences Holdings, LLC (“MLSH 1”), the only other member of Topco LLC, which may impede business decisions that could benefit our shareholders.

•The Tax Receivable Agreement requires us to make cash payments to MLSH 1 and Maravai Life Sciences Holdings 2, LLC (“MLSH 2”), an entity through which certain of our former owners hold their interests in the Company, in respect of certain tax benefits to which we may become entitled, and we expect that the payments we will be required to make will be substantial.

•Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon MLSH 1 and MLSH 2 that will not benefit the other common shareholders to the same extent as they will benefit MLSH 1 and MLSH 2.

•GTCR, LLC (“GTCR”) controls us, and its interests may conflict with ours or yours in the future.

•Provisions of our corporate governance documents could make an acquisition of us more difficult and may prevent attempts by our shareholders to replace or remove our current management, even if beneficial to our shareholders.

We derive many of our forward-looking statements from our operating budgets and forecasts, which are based on many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause our actual results to differ materially from our expectations or cautionary statements are disclosed under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 and in this Quarterly Report on Form 10-Q.

The forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

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Part I.

Item 1. Financial Statements and Supplementary Data

MARAVAI LIFESCIENCES HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(Unaudited)


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash		$	617,446	$	551,272
Cash and cash equivalents						Cash and cash equivalents	$	579,605	$	632,138
Accounts receivable, net	Accounts receivable, net	114,069		117,512		Accounts receivable, net	45,674		138,624
Inventory	Inventory	62,424		51,557		Inventory	49,142		43,152
Prepaid expenses and other current assets	Prepaid expenses and other current assets	23,432		19,698		Prepaid expenses and other current assets	22,916		25,798
Government funding receivable	Government funding receivable	18,155		—		Government funding receivable	3,528		8,190

Total current assets	Total current assets	835,526		740,039		Total current assets	700,865		847,902
Property and equipment, net	Property and equipment, net	48,420		46,332		Property and equipment, net	153,565		52,694
Goodwill	Goodwill	283,535		152,766		Goodwill	326,029		283,668
Intangible assets, net	Intangible assets, net	222,899		117,571		Intangible assets, net	227,856		216,663
Deferred tax assets	Deferred tax assets	771,120		808,117		Deferred tax assets	773,659		765,799
Other assets	Other assets	87,399		53,451		Other assets	85,579		115,589
Total assets	Total assets	$	2,248,899	$	1,918,276	Total assets	$	2,267,553	$	2,282,315
Liabilities and stockholders’ equity	Liabilities and stockholders’ equity					Liabilities and stockholders’ equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	9,459	$	8,154	Accounts payable	$	9,424	$	5,991
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	60,187		34,574		Accrued expenses and other current liabilities	56,042		53,371
Deferred revenue	Deferred revenue	5,822		10,211		Deferred revenue	2,553		3,088
Current portion of payable to related parties pursuant to the Tax Receivable Agreement	Current portion of payable to related parties pursuant to the Tax Receivable Agreement	34,747		34,838		Current portion of payable to related parties pursuant to the Tax Receivable Agreement	4,198		42,254
Current portion of long-term debt	Current portion of long-term debt	5,440		6,000		Current portion of long-term debt	5,440		5,440
Current portion of finance lease liabilities						Current portion of finance lease liabilities	596		—

Total current liabilities	Total current liabilities	115,655		93,777		Total current liabilities	78,253		110,144
Long-term debt, less current portion	Long-term debt, less current portion	522,824		524,591		Long-term debt, less current portion	519,520		521,997

Finance lease liabilities, less current portion						Finance lease liabilities, less current portion	32,077		—
Deferred tax liabilities						Deferred tax liabilities	6,690		—

Payable to related parties pursuant to the Tax Receivable Agreement, less current portion	Payable to related parties pursuant to the Tax Receivable Agreement, less current portion	711,232		713,481		Payable to related parties pursuant to the Tax Receivable Agreement, less current portion	674,201		675,956
Other long-term liabilities	Other long-term liabilities	57,519		41,066		Other long-term liabilities	64,531		68,975
Total liabilities	Total liabilities	1,407,230		1,372,915		Total liabilities	1,375,272		1,377,072

Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Class A common stock, $0.01 par value - 500,000 shares authorized; 131,540 and 131,488 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		1,315		1,315
Class B common stock, $0.01 par value - 300,000 shares authorized; 123,669 shares issued and outstanding as of September 30, 2022 and December 31, 2021		1,237		1,237
Class A common stock, $0.01 par value - 500,000 shares authorized; 131,945 and 131,692 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively						Class A common stock, $0.01 par value - 500,000 shares authorized; 131,945 and 131,692 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	1,319		1,317
Class B common stock, $0.01 par value - 300,000 shares authorized; 119,094 and 123,669 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively						Class B common stock, $0.01 par value - 300,000 shares authorized; 119,094 and 123,669 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	1,191		1,237
Additional paid-in capital	Additional paid-in capital	134,077		128,386		Additional paid-in capital	125,088		137,898

Retained earnings	Retained earnings	367,132		184,561		Retained earnings	391,696		404,766
Total stockholders’ equity attributable to Maravai LifeSciences Holdings, Inc.	Total stockholders’ equity attributable to Maravai LifeSciences Holdings, Inc.	503,761		315,499		Total stockholders’ equity attributable to Maravai LifeSciences Holdings, Inc.	519,294		545,218
Non-controlling interest	Non-controlling interest	337,908		229,862		Non-controlling interest	372,987		360,025
Total stockholders’ equity	Total stockholders’ equity	841,669		545,361		Total stockholders’ equity	892,281		905,243
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	2,248,899	$	1,918,276	Total liabilities and stockholders’ equity	$	2,267,553	$	2,282,315

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

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MARAVAI LIFESCIENCES HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~INCOME~~OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021
(as adjusted)* 2022 2021
(as adjusted)*
Revenue $ 191,263 $ 204,810 $ 678,288 $ 570,796
Operating expenses:
Cost of revenue 38,176 32,221 115,704 101,423
Selling, general and administrative 30,795 26,512 92,056 74,483
Research and development 5,389 1,946 13,358 6,035
Change in estimated fair value of contingent consideration — — (7,800) —
Gain on sale of business — (11,249) — (11,249)
Total operating expenses 74,360 49,430 213,318 170,692
Income from operations 116,903 155,380 464,970 400,104
Other income (expense):
Interest expense (3,136) (7,685) (10,234) (23,238)
Loss on extinguishment of debt — — (208) —
Change in payable to related parties pursuant to the Tax Receivable Agreement — 3,246 2,340 9,132
Other (expense) income (4) 78 (1,272) 78
Income before income taxes 113,763 151,019 455,596 386,076
Income tax expense 14,110 18,842 52,362 43,937
Net income 99,653 132,177 403,234 342,139
Net income attributable to non-controlling interests 55,184 78,215 220,663 215,932
Net income attributable to Maravai LifeSciences Holdings, Inc. $ 44,469 $ 53,962 $ 182,571 $ 126,207
Net income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:
Basic $ 0.34 $ 0.46 $ 1.39 $ 1.16
Diluted $ 0.34 $ 0.44 $ 1.37 $ 1.13
Weighted average number of Class A common shares outstanding:
Basic 131,540 118,433 131,518 109,174
Diluted 131,651 258,028 255,323 257,799

~~____________________~~

*As adjusted to reflect the impact of the adoption of Accounting Standards Codification 842 (“ASC 842”). See Note 1 to the condensed consolidated financial statements for a summary of the adjustments.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue	$	66,865	$	191,263	$	214,804	$	678,288
Operating expenses:
Cost of revenue	36,686		38,176		113,635		115,704
Selling, general and administrative	38,864		30,795		112,912		92,056
Research and development	4,347		5,389		12,686		13,358
Change in estimated fair value of contingent consideration	2,385		—		69		(7,800)


Total operating expenses	82,282		74,360		239,302		213,318
(Loss) income from operations	(15,417)		116,903		(24,498)		464,970
Other income (expense):
Interest expense	(11,637)		(3,136)		(30,492)		(10,234)
Interest income	7,432		—		20,268		—
Loss on extinguishment of debt	—		—		—		(208)
Change in payable to related parties pursuant to the Tax Receivable Agreement	(1,007)		—		(2,342)		2,340
Other income (expense)	66		(4)		(1,386)		(1,272)
(Loss) income before income taxes	(20,563)		113,763		(38,450)		455,596
Income tax (benefit) expense	(5,461)		14,110		(10,057)		52,362
Net (loss) income	(15,102)		99,653		(28,393)		403,234
Net (loss) income attributable to non-controlling interests	(8,640)		55,184		(15,323)		220,663
Net (loss) income attributable to Maravai LifeSciences Holdings, Inc.	$	(6,462)	$	44,469	$	(13,070)	$	182,571

Net (loss) income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:
Basic	$	(0.05)	$	0.34	$	(0.10)	$	1.39
Diluted	$	(0.05)	$	0.34	$	(0.10)	$	1.37

Weighted average number of Class A common shares outstanding:
Basic	131,930		131,540		131,845		131,518
Diluted	131,930		131,651		131,845		255,323

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

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MARAVAI LIFESCIENCES HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands)

(Unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021
(as adjusted)* 2022 2021
(as adjusted)*
Net income $ 99,653 $ 132,177 $ 403,234 $ 342,139
Other comprehensive income:
Foreign currency translation adjustments — 39 — 55
Total other comprehensive income 99,653 132,216 403,234 342,194
Comprehensive income attributable to non-controlling interests 55,184 78,215 220,663 215,943
Total comprehensive income attributable to Maravai LifeSciences Holdings, Inc. $ 44,469 $ 54,001 $ 182,571 $ 126,251

~~____________________~~

*~~As adjusted to reflect the impact of the adoption of ASC 842. See Note 1 to the condensed consolidated financial statements for a summary of the adjustments.~~


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net (loss) income	$	(15,102)	$	99,653	$	(28,393)	$	403,234



Comprehensive (loss) income attributable to non-controlling interests	(8,640)		55,184		(15,323)		220,663
Total comprehensive (loss) income attributable to Maravai LifeSciences Holdings, Inc.	$	(6,462)	$	44,469	$	(13,070)	$	182,571

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

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MARAVAI LIFESCIENCES HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands)

(Unaudited)

Three Months Ended September 30, 2022
Class A Common Stock Class B Common Stock
Shares Amount Shares Amount Additional Paid-In Capital Retained Earnings Non-Controlling Interest Total Stockholders’ Equity
June 30, 2022 131,539 $ 1,315 123,669 $ 1,237 $ 131,373 $ 322,663 $ 317,204 $ 773,792
Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes 1 — — — 25 — — 25
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC — — — — (35) — 35 —
Stock-based compensation — — — — 2,443 — 2,297 4,740
Distribution for tax liabilities to non-controlling interest holder — — — — 271 — (36,812) (36,541)
Net income — — — — — 44,469 55,184 99,653
September 30, 2022 131,540 $ 1,315 123,669 $ 1,237 $ 134,077 $ 367,132 $ 337,908 $ 841,669


	Three Months Ended September 30, 2023
	Class A Common Stock			Class B Common Stock
	Shares	Amount		Shares	Amount		Additional Paid-In Capital		Retained Earnings		Non-Controlling Interest		Total Stockholders’ Equity
June 30, 2023	131,901	$	1,319	119,094	$	1,191	$	119,903	$	398,158	$	377,067	$	897,638


Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes	44	—		—	—		(242)		—		—		(242)
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC	—	—		—	—		178		—		(178)		—
Stock-based compensation	—	—		—	—		5,249		—		4,738		9,987


Net loss	—	—		—	—		—		(6,462)		(8,640)		(15,102)

September 30, 2023	131,945	$	1,319	119,094	$	1,191	$	125,088	$	391,696	$	372,987	$	892,281


		Nine Months Ended September 30, 2022												Nine Months Ended September 30, 2023
		Class A Common Stock			Class B Common Stock													Class A Common Stock			Class B Common Stock
		Shares	Amount		Shares	Amount		Additional Paid-In Capital		Retained Earnings		Non-Controlling Interest			Total Stockholders’ Equity			Shares	Amount		Shares	Amount		Additional Paid-In Capital		Retained Earnings		Non-Controlling Interest		Total Stockholders’ Equity
December 31, 2021		131,488	$	1,315	123,669	$	1,237	$	128,386	$	184,561	$	229,862		$	545,361

December 31, 2022																	December 31, 2022	131,692	$	1,317	123,669	$	1,237	$	137,898	$	404,766	$	360,025	$	905,243
Effects of Structuring Transactions																	Effects of Structuring Transactions	—	—		(4,575)	(46)		(26,348)		—		26,392		(2)

Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes	Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes	52	—		—	—		1,173		—		—			1,173		Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes	253	2		—	—		(208)		—		—		(206)
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC	Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC	—	—		—	—		(529)		—		529			—		Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC	—	—		—	—		493		—		(493)		—
Stock-based compensation	Stock-based compensation	—	—		—	—		6,532		—		6,143			12,675		Stock-based compensation	—	—		—	—		13,253		—		11,993		25,246
Distribution for tax liabilities to non-controlling interest holder	Distribution for tax liabilities to non-controlling interest holder	—	—		—	—		206		—		(119,289)			(119,083)		Distribution for tax liabilities to non-controlling interest holder	—	—		—	—		—		—		(9,607)		(9,607)
Impact of change to deferred tax asset associated with cash contribution to Topco LLC		—	—		—	—		(1,691)		—		—			(1,691)
Net income		—	—		—	—		—		182,571		220,663			403,234

September 30, 2022		131,540	$	1,315	123,669	$	1,237	$	134,077	$	367,132	$	337,908		$	841,669
Net loss																	Net loss	—	—		—	—		—		(13,070)		(15,323)		(28,393)

September 30, 2023																	September 30, 2023	131,945	$	1,319	119,094	$	1,191	$	125,088	$	391,696	$	372,987	$	892,281

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Three Months Ended September 30, 2021
Class A Common Stock Class B Common Stock
Shares Amount Shares Amount Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Non-Controlling Interest Total Stockholders’ Equity
June 30, 2021
(as adjusted)* 114,352 $ 1,143 143,308 $ 1,433 $ 118,486 $ (39) $ 74,769 $ 141,569 $ 337,361
Effect of exchange of LLC Units 17,068 171 (17,068) (171) 18,874 — — (18,874) —
Recognition of impact of the Tax Receivable Agreement due to exchanges of LLC Units — — — — 34,060 — — — 34,060
Stock-based compensation — — — — 1,614 — — 1,953 3,567
Distribution for tax liabilities to non-controlling interest holder — — — — 60 — — (50,061) (50,001)
Net income — — — — — — 53,962 78,215 132,177
Foreign currency translation adjustment — — — — — 39 — — 39
September 30, 2021
(as adjusted)* 131,420 $ 1,314 126,240 $ 1,262 $ 173,094 $ — $ 128,731 $ 152,802 $ 457,203

~~____________________~~

*~~As adjusted to reflect the impact of the adoption of ASC 842. See Note 1 to the condensed consolidated financial statements for a summary of the adjustments.~~


	Three Months Ended September 30, 2022
	Class A Common Stock			Class B Common Stock
	Shares	Amount		Shares	Amount		Additional Paid-In Capital		Retained Earnings		Non-Controlling Interest		Total Stockholders’ Equity
June 30, 2022	131,539	$	1,315	123,669	$	1,237	$	131,373	$	322,663	$	317,204	$	773,792
Effect of exchange of LLC Units	—	—		—	—		—		—		—		—

Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes	1	—		—	—		25		—		—		25
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC	—	—		—	—		(35)		—		35		—
Stock-based compensation	—	—		—	—		2,443		—		2,297		4,740
Distribution for tax liabilities to non-controlling interest holder	—	—		—	—		271		—		(36,812)		(36,541)

Net income	—	—		—	—		—		44,469		55,184		99,653

September 30, 2022	131,540	$	1,315	123,669	$	1,237	$	134,077	$	367,132	$	337,908	$	841,669

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Nine Months Ended September 30, 2021
Class A Common Stock Class B Common Stock
Shares Amount Shares Amount Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Non-Controlling Interest Total Stockholders’ Equity
December 31, 2020 96,647 $ 966 160,974 $ 1,610 $ 85,125 $ (44) $ 854 $ 66,235 $ 154,746
Cumulative effect of adoption of ASC 842, net of tax — — — — — — 1,670 2,784 4,454
Effect of exchange of LLC Units 34,734 348 (34,734) (348) 31,003 — — (31,003) —
Recognition of impact of the Tax Receivable Agreement due to exchanges of LLC Units — — — — 53,000 — — — 53,000
Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes 39 — — — 785 — — — 785
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC — — — — (420) — — 420 —
Stock-based compensation — — — — 3,507 — — 4,721 8,228
Distribution for tax liabilities to non-controlling interest holder — — — — 94 — — (106,298) (106,204)
Net income — — — — — — 126,207 215,932 342,139
Foreign currency translation adjustment — — — — — 44 — 11 55
September 30, 2021
(as adjusted)* 131,420 $ 1,314 126,240 $ 1,262 $ 173,094 $ — $ 128,731 $ 152,802 $ 457,203

~~____________________~~

*~~As adjusted to reflect the impact of the adoption of ASC 842. See Note 1 to the condensed consolidated financial statements for a summary of the adjustments.~~


	Nine Months Ended September 30, 2022
	Class A Common Stock			Class B Common Stock
	Shares	Amount		Shares	Amount		Additional Paid-In Capital		Retained Earnings		Non-Controlling Interest		Total Stockholders’ Equity
December 31, 2021	131,488	$	1,315	123,669	$	1,237	$	128,386	$	184,561	$	229,862	$	545,361


Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes	52	—		—	—		1,173		—		—		1,173
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC	—	—		—	—		(529)		—		529		—
Stock-based compensation	—	—		—	—		6,532		—		6,143		12,675
Distribution for tax liabilities to non-controlling interest holder	—	—		—	—		206		—		(119,289)		(119,083)
Impact of change to deferred tax asset associated with cash contribution to Topco LLC	—	—		—	—		(1,691)		—		—		(1,691)
Net income	—	—		—	—		—		182,571		220,663		403,234

September 30, 2022	131,540	$	1,315	123,669	$	1,237	$	134,077	$	367,132	$	337,908	$	841,669

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

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MARAVAI LIFESCIENCES HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2022		2021 (as adjusted)*			2023		2022
Operating activities:	Operating activities:					Operating activities:
Net income		$	403,234	$	342,139
Adjustments to reconcile net income to net cash provided by operating activities:
Net (loss) income						Net (loss) income	$	(28,393)	$	403,234
Adjustments to reconcile net (loss) income to net cash provided by operating activities:						Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation	Depreciation	5,604		4,668		Depreciation	8,966		5,604
Amortization of intangible assets	Amortization of intangible assets	18,033		14,685		Amortization of intangible assets	20,487		18,033
Amortization of right-of-use assets		4,437		5,111
Amortization of operating lease right-of-use assets						Amortization of operating lease right-of-use assets	6,348		4,437
Amortization of deferred financing costs	Amortization of deferred financing costs	2,134		1,995		Amortization of deferred financing costs	2,186		2,134
Stock-based compensation expense	Stock-based compensation expense	12,675		8,228		Stock-based compensation expense	25,246		12,675
Loss on extinguishment of debt	Loss on extinguishment of debt	208		—		Loss on extinguishment of debt	—		208
Deferred income taxes	Deferred income taxes	35,307		29,438		Deferred income taxes	(9,808)		35,307
Change in estimated fair value of contingent consideration	Change in estimated fair value of contingent consideration	(7,800)		—		Change in estimated fair value of contingent consideration	69		(7,800)
Gain on sale of business		—		(11,249)

Revaluation of liabilities under the Tax Receivable Agreement	Revaluation of liabilities under the Tax Receivable Agreement	(2,340)		(9,132)		Revaluation of liabilities under the Tax Receivable Agreement	2,342		(2,340)
Other	Other	(5,529)		177		Other	(4,474)		(5,529)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	3,502		(18,851)		Accounts receivable	93,180		3,502
Inventory	Inventory	(9,814)		(27,051)		Inventory	2,833		(9,814)
Prepaid expenses and other assets	Prepaid expenses and other assets	(36,375)		(6,037)		Prepaid expenses and other assets	1,761		(36,375)

Accounts payable	Accounts payable	1,890		1,543		Accounts payable	3,625		1,890
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	14,114		(10,927)		Accrued expenses and other current liabilities	8,962		14,114
Deferred revenue	Deferred revenue	(4,388)		(11,346)		Deferred revenue	(558)		(4,388)
Other long-term liabilities	Other long-term liabilities	1,750		(3,564)		Other long-term liabilities	(14,338)		1,750
Net cash provided by operating activities	Net cash provided by operating activities	436,642		309,827		Net cash provided by operating activities	118,434		436,642
Investing activities:	Investing activities:					Investing activities:
Cash paid for acquisition of a business, net of cash acquired	Cash paid for acquisition of a business, net of cash acquired	(238,836)		—		Cash paid for acquisition of a business, net of cash acquired	(69,622)		(238,836)
Purchases of property and equipment						Purchases of property and equipment	(48,754)		(10,876)
Proceeds from government assistance allocated to property and equipment						Proceeds from government assistance allocated to property and equipment	8,969		—

Purchases of property and equipment		(10,876)		(9,194)

Proceeds from sale of building		—		548
Proceeds from sale of business, net of cash divested	Proceeds from sale of business, net of cash divested	620		119,957		Proceeds from sale of business, net of cash divested	—		620
Net cash (used in) provided by investing activities		(249,092)		111,311
Net cash used in investing activities						Net cash used in investing activities	(109,407)		(249,092)
Financing activities:	Financing activities:					Financing activities:
Distributions for tax liabilities to non-controlling interests holders		(119,289)		(106,298)
Distributions for tax liabilities to non-controlling interest holders						Distributions for tax liabilities to non-controlling interest holders	(9,607)		(119,289)
Proceeds from borrowings of long-term debt	Proceeds from borrowings of long-term debt	8,455		—		Proceeds from borrowings of long-term debt	—		8,455
Principal repayments of long-term debt	Principal repayments of long-term debt	(12,535)		(4,500)		Principal repayments of long-term debt	(4,080)		(12,535)

Proceeds from employee stock purchase plan and exercise of stock options, net of shares withheld for employee taxes		1,993		1,329
Payments of finance lease liabilities						Payments of finance lease liabilities	(190)		—
Proceeds from derivative instruments						Proceeds from derivative instruments	3,845		—
Payment of acquisition consideration holdback						Payment of acquisition consideration holdback	(9,706)		—
Payments to MLSH 1 pursuant to the Tax Receivable Agreement						Payments to MLSH 1 pursuant to the Tax Receivable Agreement	(35,661)		—
Payments to MLSH 2 pursuant to the Tax Receivable Agreement						Payments to MLSH 2 pursuant to the Tax Receivable Agreement	(6,492)		—
Proceeds from issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes						Proceeds from issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes	331		1,993
Net cash used in financing activities	Net cash used in financing activities	(121,376)		(109,469)		Net cash used in financing activities	(61,560)		(121,376)
Effects of exchange rate changes on cash		—		45

Net increase in cash		66,174		311,714
Cash, beginning of period		551,272		236,184
Cash, end of period		$	617,446	$	547,898

Net (decrease) increase in cash and cash equivalents						Net (decrease) increase in cash and cash equivalents	(52,533)		66,174
Cash and cash equivalents, beginning of period						Cash and cash equivalents, beginning of period	632,138		551,272

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Nine Months Ended
September 30,
2022 2021
(as adjusted)*
Supplemental cash flow information:
Cash paid for interest $ 11,416 $ 20,612
Cash paid for income taxes $ 19,581 $ 16,569
Supplemental disclosures of non-cash activities:
Property and equipment included in accounts payable and accrued expenses $ 1,799 $ 866
Accrued receivable for capital expenditures to be reimbursed under a government contract $ 1,105 $ —
Right-of-use assets obtained in exchange for new operating lease liabilities $ 7,872 $ —
Fair value of contingent consideration liability recorded in connection with acquisition of a business $ 7,800 $ —
Accrued consideration payable $ 10,000 $ —
Recognition of liabilities under the Tax Receivable Agreement $ — $ 365,139
Recognition of deferred tax assets as a result of exchange of LLC Units $ — $ 418,140

~~____________________~~

*~~As adjusted to reflect the impact of the adoption of ASC 842. See Note 1 to the condensed consolidated financial statements for a summary of the adjustments.~~


	Nine Months Ended September 30,
	2023		2022
Cash and cash equivalents, end of period	$	579,605	$	617,446

Supplemental cash flow information:
Cash paid for interest	$	32,188	$	11,416
Cash (refunded) paid for income taxes, net	$	(3,077)	$	19,581

Supplemental disclosures of non-cash activities:
Property and equipment included in accounts payable and accrued expenses	$	3,703	$	1,799

Accrued receivable for capital expenditures to be reimbursed under a government contract	$	3,528	$	1,105
Right-of-use assets obtained in exchange for new finance lease liabilities	$	32,862	$	—
Right-of-use assets obtained in exchange for new operating lease liabilities	$	3,931	$	7,872


Fair value of contingent consideration liability recorded in connection with acquisition of a business	$	5,289	$	7,800
Accrued consideration payable for MyChem acquisition	$	—	$	10,000

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

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MARAVAI LIFESCIENCES HOLDINGS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.Organization and Significant Accounting Policies

Description of Business

Maravai LifeSciences Holdings, Inc. (the “Company”, and together with its consolidated subsidiaries, “Maravai”, “we”, “us”, and “our”) provides critical products to enable the development of drugs, therapeutics, diagnostics and vaccines and to support research on human diseases. Our products address the key phases of biopharmaceutical development and include complex nucleic acids for diagnostic and therapeutic applications and antibody-based products to detect impurities during the production of biopharmaceutical products.

The Company is headquartered in San Diego, California, and has ~~historically operated in three~~two principal businesses: Nucleic Acid Production and Biologics Safety ~~Testing and Protein Detection. In September 2021, the Company completed the divestiture of its Protein Detection business.~~Testing. Our Nucleic Acid Production business manufactures and sells products used in the fields of gene therapy, vaccines, nucleoside chemistry, oligonucleotide therapy and molecular diagnostics, including reagents used in the chemical synthesis, modification, labelling and purification of deoxyribonucleic acid (“DNA”) and ribonucleic acid (“RNA”). Our core Nucleic Acid Production offerings include messenger ribonucleic acid (“mRNA”), long and short oligonucleotides, our proprietary CleanCap® capping technology and oligonucleotide building ~~blocks.~~blocks, and custom enzyme development and manufacturing. Our Biologics Safety Testing business sells highly specialized analytical products for use in biologic manufacturing process development, including custom product-specific development antibody and assay development services.

Organization and Organizational Transactions

We were incorporated as a Delaware corporation in August 2020 for the purpose of facilitating an initial public offering (“IPO”). Immediately prior to the IPO, we effected a series of organizational transactions (the “Organizational Transactions”), which, together with the IPO, were completed in November 2020, that resulted in the Company operating, controlling all of the business affairs and becoming the ultimate parent company of Maravai Topco Holdings, LLC (“Topco LLC”) and its consolidated subsidiaries. Maravai Life Sciences Holdings, LLC (“MLSH 1”), which is controlled by investment entities affiliated with GTCR, is the only other member of Topco LLC.

The Company is the sole managing member of Topco LLC, which operates and controls TriLink Biotechnologies, LLC (“TriLink”), Glen Research, LLC, MockV Solutions, LLC, ~~and~~ Cygnus Technologies, LLC (“Cygnus”) and Alphazyme, LLC (“Alphazyme”) and their respective subsidiaries. ~~Prior~~

In connection with the Company’s acquisition of Alphazyme (see Note 2), the Company undertook a series of structuring transactions (the “Structuring Transactions”), including:

•On January 18, 2023, the Company acquired all of the outstanding membership interests in Alphazyme (see Note 2).

•On January 19, 2023, the Company entered into a contribution agreement (the “Contribution Agreement”) with Alphazyme Holdings, Inc. (“Alphazyme Holdings”), a wholly owned subsidiary of the Company, pursuant to which the Company contributed all such membership interests in Alphazyme (the “Alphazyme Membership Interest”) to Alphazyme Holdings.

•On January 22, 2023, Alphazyme Holdings entered into a contribution and exchange agreement (the “Contribution and Exchange Agreement”) with Topco LLC, pursuant to which it contributed all of the Alphazyme Membership Interests to TopCo LLC in exchange for 5,059,134 newly-issued LLC Units of Topco LLC at a price per unit of $13.87, which was equal to the 50-day volume-weighted average price of the Company’s ~~divestiture~~Class A common stock as calculated on January 18, 2023 (the “Contribution and Exchange”).

•Immediately following the Contribution and Exchange, the Company entered into a forfeiture agreement (the “Forfeiture Agreement”) with Alphazyme Holdings, TopCo LLC and MLSH 1, a related party, pursuant to which each of ~~its Protein Detection business in September 2021,~~the Company (together with Alphazyme Holdings) and MLSH 1 agreed to forfeit 5,059,134 and 4,871,970 LLC Units, respectively, representing 3.7% of the Company’s (together with Alphazyme Holdings) and MLSH 1’s respective LLC Units of Topco LLC, ~~also operated~~ and ~~controlled Vector Laboratories, Inc. and its subsidiaries (“Vector”).~~an equal number of shares of the Company’s Class B common stock, par value $0.01 per share, were forfeited by MLSH 1, in each case for no consideration.

These were considered transactions between entities under common control. As a result, the consolidated financial statements for periods prior to the these transactions have been adjusted to combine the previously separate entities for presentation purposes.

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Basis of Presentation

The Company operates and controls all of the business and affairs of Topco LLC, and, through Topco LLC and its subsidiaries, conducts its business. Because we manage and operate the business and control the strategic decisions and day-to-day operations of Topco LLC and also have a substantial financial interest in Topco LLC, we consolidate the financial results of Topco LLC, and a portion of our net (loss) income is allocated to the non-controlling interests in Topco LLC held by MLSH 1.

The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and accounts between the businesses comprising the Company have been eliminated in the accompanying consolidated financial statements.

Unaudited Interim Condensed Consolidated Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to Form 10-Q of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements include all adjustments necessary to fairly state the financial position and the results of our operations and cash flows for interim periods in accordance with GAAP. All such adjustments are of a normal, recurring nature. Operating results for the three and nine months ended September 30, ~~2022~~2023 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2022~~2023 or for any future period.

The condensed consolidated balance sheet presented as of December 31, ~~2021~~2022 has been derived from the audited consolidated financial statements as of that date. The condensed consolidated financial statements and notes are presented as permitted by

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Form 10-Q and do not contain all information that is included in the annual financial statements and notes thereto of the Company. The condensed consolidated financial statements and notes included in this report should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 (“~~2021~~2022 Form 10-K”) filed with the SEC.

Use of Estimates

The preparation of consolidated financial statements in accordance with GAAP requires the Company to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenue and expenses, and related disclosures. These estimates form the basis for judgments the Company makes about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company bases its estimates and judgments on historical experience and on various other assumptions that the Company believes are reasonable under the circumstances. These estimates are based on management’s knowledge about current events and expectations about actions the Company may undertake in the future. Significant estimates include, but are not limited to, the measurement of right-of-use assets and lease liabilities and related incremental borrowing rate, the payable to related parties pursuant to the Tax Receivable Agreement (as defined in Note ~~10)~~12), the realizability of our net deferred tax assets, and the valuation of goodwill and intangible assets acquired in business combinations. Actual results could differ materially from those estimates.

Significant Accounting Policies

A description of the Company’s significant accounting policies is included in Note 1 of the Notes to the Consolidated Financial Statements included in its ~~2021~~2022 Form 10-K. ~~Except as noted below, there~~There have been no material changes in the Company’s significant accounting policies during the three and nine months ended September 30, ~~2022.~~2023.

Revenue Recognition

The Company generates revenue primarily from the sale of products and, to a much lesser extent, services in the fields of nucleic acid production and biologics safety ~~testing and protein detection.~~testing. Revenue is recognized when control of promised goods or services is transferred to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for its arrangements with customers, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The majority of the Company’s contracts include only one performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is defined as the unit of account for revenue recognition. The Company also recognizes revenue from other contracts that may include a combination of products and services, the provision of solely services, or from license fee arrangements which may be associated with the delivery of product. Where there is a combination of products and services, the Company accounts for the promises as individual performance obligations if they are concluded to be distinct. Performance

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obligations are considered distinct if they are both capable of being distinct and distinct within the context of the contract. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract. As a practical expedient, we do not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less. Contracts with customers are evaluated on a contract-by-contract basis as contracts may include multiple types of goods and services as described below.

Nucleic Acid Production

Nucleic Acid Production revenue is generated from the manufacture and sale of highly modified, complex nucleic acids products to support the needs of our customers’ research, therapeutic and vaccine programs. The primary offering of products includes CleanCap®, mRNA and specialized oligonucleotides. Contracts typically consist of a single performance obligation. We also sell nucleic acid products for labeling and detecting proteins in cells and tissue samples research. The Company recognizes revenue from these products in the period in which the performance obligation is satisfied by transferring control to the customer. Revenue for nucleic acid catalog products is recognized at a single point in time, generally upon shipment to the customer. Revenue for contracts for certain custom nucleic acid products, with an enforceable right to payment and a reasonable margin for work performed to date, is recognized over time, based on a cost-to-cost input method over the manufacturing period. Payments received from customers in advance of manufacturing their products is recorded as deferred revenue until the products are delivered.

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Biologics Safety Testing

The Company’s Biologics Safety Testing revenue is associated with the sale of bioprocess impurity detection kit products. We also enter into contracts that include custom antibody development, assay development and antibody affinity extraction services. These products and services enable the detection of impurities that occur in the manufacturing of biologic drugs and other therapeutics. The Company recognizes revenue from the sale of bioprocess impurity detection kits in the period in which the performance obligation is satisfied by transferring control to the customer. Custom antibody development contracts consist of a single performance obligation, typically with an enforceable right to payment and a reasonable margin for work performed to date. Revenue is recognized over time based on a cost-to-cost input method over the contract term. Where an enforceable right to payment does not exist, revenue is recognized at a point in time when control is transferred to the customer. Assay development service contracts consist of a single performance obligation. Revenue is recognized at a point in time when a successful antigen test and report is provided to the customer. Affinity extraction services, which generally occur over a short period of time, consist of a single performance obligation to perform the extraction service and provide a summary report to the customer. Revenue is recognized either over time or at a point in time depending on contractual payment terms with ~~the customer.~~

~~Protein Detection~~

Prior to the divestiture of its Protein Detection business in September 2021, the Company also manufactured and sold protein labeling and detection reagents to customers that were used for basic research and development. The contracts to sell these catalog products consisted of a single performance obligation to deliver the reagent products. Revenue from these contracts was recognized at a point in time, generally upon shipment of the final product to the customer.

The Company elected the practical expedient to not disclose the unfulfilled performance obligations for contracts with an original length of one year or less. The Company had no material unfulfilled performance obligations for contracts with an original length greater than one year for any period presented.

The Company accepts returns only if the products do not meet customer specifications, and historically, the Company’s volume of product returns has not been significant. Further, no warranties are provided for promised goods and services other than assurance type warranties.

Revenue for an individual contract is recognized at the related transaction price, which is the amount the Company expects to be entitled to in exchange for transferring the products and/or services. The transaction price for product sales is calculated at the contracted product selling price. The transaction price for a contract with multiple performance obligations is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices for products are determined based on the prices charged to customers, which are directly observable. Standalone selling price of services are mostly based on time and materials. Generally, payments from customers are due when goods and services are transferred. As most contracts contain a single performance obligation, the transaction price is representative of the standalone selling price charged to customers. Revenue is recognized only to the extent that it is probable that a significant reversal of the cumulative amount recognized will not occur in future periods. Variable consideration has not been material to our consolidated financial statements.

Sales taxes

Sales taxes collected by the Company are not included in the transaction price as revenue as they are ultimately remitted to a governmental authority.

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Shipping and handling costs

The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. Accordingly, revenue for shipping and handling is recognized at the same time that the related product revenue is recognized.

Contract costs

The Company recognizes the incremental costs of obtaining contracts as an expense when incurred when the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in sales and marketing and general and administrative expenses. The costs to fulfill the contracts are determined to be immaterial and are recognized as an expense when incurred.

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Contract balances

Contract assets are generated when contractual billing schedules differ from revenue recognition timing and the Company records a contract receivable when it has an unconditional right to consideration. There were no contract asset balances as of September 30, ~~2022~~2023 and December 31, ~~2021.~~2022.

Contract liabilities include billings in excess of revenue recognized, such as customer deposits and deferred revenue. Customer deposits, which are included in accrued expenses, are recorded when cash payments are received or due in advance of performance. Deferred revenue is recorded when the Company has unsatisfied performance obligations. Total contract liabilities ~~were $7.4 million and $12.6~~was $4.8 million as of September 30, ~~2022~~2023 and December 31, ~~2021, respectively.~~2022. Contract liabilities are expected to be recognized as revenue within the next twelve months.

Disaggregation of revenue

The following tables summarize the revenue by segment and region for the periods presented (in thousands):


	Three Months Ended September 30, 2023
	Nucleic Acid Production		Biologics Safety Testing		Total
North America	$	27,893	$	6,622	$	34,515
Europe, the Middle East and Africa	3,703		3,919		7,622
Asia Pacific	19,601		5,022		24,623
Latin and Central America	31		74		105
Total revenue	$	51,228	$	15,637	$	66,865


	Nine Months Ended September 30, 2023
	Nucleic Acid Production		Biologics Safety Testing		Total
North America	$	88,961	$	20,392	$	109,353
Europe, the Middle East and Africa	21,345		12,418		33,763
Asia Pacific	55,495		15,820		71,315
Latin and Central America	143		230		373
Total revenue	$	165,944	$	48,860	$	214,804


	Three Months Ended September 30, 2022
	Nucleic Acid Production		Biologics Safety Testing		Total
North America	$	91,130	$	6,583	$	97,713
Europe, the Middle East and Africa	77,755		4,069		81,824
Asia Pacific	5,931		5,541		11,472
Latin and Central America	65		189		254
Total revenue	$	174,881	$	16,382	$	191,263

Nine Months Ended September 30, 2022
Nucleic Acid Production Biologics Safety Testing Total
North America $ 252,563 $ 21,274 $ 273,837
Europe, the Middle East and Africa 322,566 13,344 335,910
Asia Pacific 48,535 19,474 68,009
Latin and Central America 115 417 532
Total revenue $ 623,779 $ 54,509 $ 678,288

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Three Months Ended September 30, 2021
Nucleic Acid Production Biologics Safety Testing Protein Detection Total
North America $ 73,622 $ 7,203 $ 3,067 $ 83,892
Europe, the Middle East and Africa 103,929 3,811 1,392 109,132
Asia Pacific 5,332 5,441 795 11,568
Latin and Central America 18 171 29 218
Total revenue $ 182,901 $ 16,626 $ 5,283 $ 204,810


		Nine Months Ended September 30, 2021									Nine Months Ended September 30, 2022
		Nucleic Acid Production		Biologics Safety Testing		Protein Detection		Total			Nucleic Acid Production		Biologics Safety Testing		Total
North America	North America	$	207,469	$	20,052	$	11,016	$	238,537	North America	$	252,563	$	21,274	$	273,837
Europe, the Middle East and Africa	Europe, the Middle East and Africa	257,873		12,059		4,752		274,684		Europe, the Middle East and Africa	322,566		13,344		335,910
Asia Pacific	Asia Pacific	33,977		19,844		3,068		56,889		Asia Pacific	48,535		19,474		68,009
Latin and Central America	Latin and Central America	35		528		123		686		Latin and Central America	115		417		532
Total revenue	Total revenue	$	499,354	$	52,483	$	18,959	$	570,796	Total revenue	$	623,779	$	54,509	$	678,288

Total revenue is attributed to geographic regions based on the bill-to location of the transaction. For all periods presented, the majority of our revenue was recognized at a point in time.

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Non-Controlling Interests

Non-controlling interests represent the portion of profit or loss, net assets and comprehensive (loss) income of our consolidated subsidiaries that is not allocable to the Company based on our percentage of ownership of such entities.

In November 2020, following the completion of the Organizational Transactions, we became the sole managing member of Topco LLC. As of September 30, ~~2022,~~2023, we held approximately ~~51.5%~~52.6% of the outstanding LLC Units of Topco LLC, and MLSH 1 held approximately ~~48.5%~~47.4% of the outstanding LLC Units of Topco LLC. Therefore, we report non-controlling interests based on the percentage of LLC Units of Topco LLC held by MLSH 1 on the condensed consolidated balance sheet as of September 30, ~~2022.~~2023. Income or loss attributed to the non-controlling interest in Topco LLC is based on the LLC Units outstanding during the period for which the income or loss is generated and is presented on the condensed consolidated statements of ~~income~~operations and condensed consolidated statements of comprehensive (loss) income.

MLSH 1 is entitled to exchange its LLC Units of Topco LLC, together with an equal number of shares of our Class B common stock (together referred to as “Paired Interests”), for shares of Class A common stock on a one-for-one basis or, at our election, for cash, from a substantially concurrent public offering or private sale (based on the price of our Class A common stock in such public offering or private sale). As such, future exchanges of Paired Interests by MLSH 1 will result in a change in ownership and reduce or increase the amount recorded as non-controlling interests and increase or decrease additional paid-in-capital when Topco LLC has positive or negative net assets, respectively. ~~In April 2021 and September 2021, MLSH 1 executed an exchange of Paired Interests prior to the April 2021 Secondary Offering and September 2021 Secondary Offering, respectively.~~ For the nine months ended September 30, 2023 and 2022, MLSH 1 did not exchange any Paired Interests.

~~Exchanges and Secondary Offerings~~

~~April 2021 Exchange and Secondary Offering~~

~~In April 2021,~~Distributions of $9.6 million for tax liabilities were made to MLSH 1 ~~executed an exchange of 17,665,959 LLC Units (paired with~~during the corresponding shares of Class B common stock) in return for 17,665,959 shares of the Company’s Class A common stock. The corresponding shares of Class B common stock were subsequently cancelled and retired. The Company immediately completed a secondary offering (“April 2021 Secondary Offering”) of 20,700,000 shares of its Class A common stock by MLSH 1 and MLSH 2, which included 3,034,041 shares of Class A common stock previously held by MLSH 2, which included the full exercise of the underwriters’ option to purchase up to 2,700,000 additional shares of Class A common stock, at a price of $31.25 per share.

The selling stockholders were responsible for the underwriting discounts and commissions of the April 2021 Secondary Offering and received all of the net proceeds of $624.2 million from the sale of shares of Class A common stock. The Company was responsible for the offering costs associated with the April 2021 Secondary Offering of $1.0 million which were recorded within selling, general and administrative expenses in the condensed consolidated statements of income.

nine months ended September ~~2021 Exchange and Secondary Offering~~

In September 2021, MLSH 1 executed an exchange of 17,068,559 LLC Units (paired with the corresponding shares of Class B common stock) in return for 17,068,559 shares of the Company’s Class A common stock. The corresponding shares of Class B common stock were subsequently cancelled and retired. Shortly after the exchange, the Company completed a secondary offering (“September 2021 Secondary Offering”) of 20,000,000 shares of its Class A common stock by MLSH 1 and MLSH 2, which included 2,931,441 shares of Class A common stock previously held by MLSH 2 at a price of $50.00 per share.

The selling stockholders were responsible for the underwriting discounts and commissions of the September 2021 Secondary Offering and received all of the net proceeds of $977.5 million from the sale of shares of Class A common stock. The Company was responsible for the offering costs associated with the September 2021 Secondary Offering of $0.9 million which were recorded within selling, general and administrative expenses in the condensed consolidated statements of income.

30, 2023. Distributions of $36.8 million and $119.3 million for tax liabilities were made to MLSH 1 during the three and nine months ended September 30, 2022, respectively. ~~Distributions of $50.1 million and $106.3 million for tax liabilities~~No such distributions were made ~~to MLSH 1~~ during the three ~~and nine~~ months ended September 30, ~~2021, respectively.~~2023.

Segment Information

The Company ~~has historically operated~~operates in ~~three~~two reportable segments. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and assessing performance. The CODM ~~its Chief Executive Officer,~~ allocates resources and assesses performance based upon discrete financial information at the segment level. All of our long-lived assets are located in the United States. ~~After~~

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The carrying value of these cash equivalents approximates fair value. Cash and cash equivalents consist of deposits held at financial institutions and money market funds.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable primarily consist of amounts due from customers for product sales and services. The Company’s expected credit losses are developed using an estimated loss rate method that considers historical collection experience, current conditions, and reasonable and supportable forecasts that affect the ~~divestiture~~collectability of ~~Vector in September 2021,~~the reported amount. The estimated loss rates are applied to trade receivables with similar risk characteristics such as the length of time the balance has been outstanding, liquidity and financial position of the customer, and the geographic location of the customer. In certain instances, the Company ~~no longer has~~may identify individual accounts receivable assets that do not share risk characteristics with other accounts receivable, in which case the ~~Protein Detection segment. The~~ Company ~~has reported the historical results of the Protein Detection business as such discrete financial~~records its expected credit losses on an individual asset basis.

1716

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~~information evaluated by the CODM~~The allowance for ~~the periods presented included the information for this legacy segment. As~~credit losses was approximately $2.2 million as of September 30, ~~2022,~~2023 and December 31, 2022. Write-offs of accounts receivable were not significant during the ~~Company operated in two reportable segments: Nucleic Acid Production~~three and ~~Biologics Safety Testing.~~nine months ended September 30, 2023. There were $0.5 million of recoveries during the nine months ended September 30, 2023. There were no recoveries during the three months ended September 30, 2023. Write-offs of accounts receivable and recoveries were not significant during the three and nine months ended September 30, 2022.

Net (Loss) Income per Class A Common Share Attributable to Maravai LifeSciences Holdings, Inc.

Basic net (loss) income per Class A common share attributable to Maravai LifeSciences Holdings, Inc. is computed by dividing net (loss) income attributable to us by the weighted average number of Class A common shares outstanding during the period. Diluted net (loss) income per Class A common share is calculated by giving effect to all potential weighted average dilutive stock options, restricted stock units, and Topco LLC Units, that together with an equal number of shares of our Class B common stock, are convertible into shares of our Class A common stock. The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable. The Company reported net (loss) income attributable to Maravai LifeSciences Holdings, Inc. for the three and nine months ended September 30, ~~2022~~2023 and ~~2021.~~2022.

Government Assistance

The consideration awarded to the Company by the U.S. Department of Defense is outside the scope of the contracts with customers, income tax, funded research and development, and contribution guidance. This is because the awarding entity is not considered to be a customer, the receipt of the funding is not predicated on the Company’s income tax position, there are no refund provisions, and the entity is not receiving reciprocal value for their support provided to the Company. The Company’s elected policy is to recognize such assistance as a reduction to the carrying amount of the assets associated with the award when it is reasonably assured that the funding will be received as evidenced through the existence of an arrangement, amounts eligible for reimbursement are determinable and have been incurred or paid, the applicable conditions under the arrangement have been met, and collectability of amounts due is reasonably assured.

~~Contingent Consideration~~

Contingent consideration represents additional consideration that may be transferred to former owners of an acquired entity in the future if certain future events occur or conditions are met. Contingent consideration resulting from the acquisition of a business is recorded at fair value on the acquisition date. Such contingent consideration is re-measured to its estimated fair value at each reporting date with the change in fair value recognized within operating expenses in the Company’s condensed consolidated statements of income. Subsequent changes in the fair value of the contingent consideration are classified as an adjustment to cash flows from operating activities in the condensed consolidated statements of cash flows because the change in fair value is an input in determining net income. Cash paid in settlement of contingent consideration liabilities are classified as cash flows from financing activities up to the acquisition date fair value with any excess classified as cash flows from operating activities.

Changes in the fair value of contingent consideration liabilities associated with the acquisition of a business can result from updates to assumptions such as the expected timing or probability of achieving customer-related performance targets, specified sales milestones, changes in projected revenue or changes in discount rates. Judgment is used in determining those assumptions as of the acquisition date and for each subsequent reporting period. Therefore, any changes in the fair value will impact the Company’s results of operations in such reporting period, thereby resulting in potential variability in the Company’s operating results until such contingencies are resolved.

Fair Value of Financial Instruments

The Company defines fair value as the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The Company follows accounting guidance that has a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of the asset or liability as of the measurement date. Instruments with readily available actively quoted prices, or for which fair value can be measured from actively quoted prices in an orderly market, will generally have a higher degree of market price transparency and a lesser degree of judgment used in measuring fair value. The three levels of the hierarchy are defined as follows:

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;

Level 2—Include other inputs that are directly or indirectly observable in the marketplace; and

Level 3—Unobservable inputs which are supported by little or no market activity.

As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the carrying value of the Company’s current assets and liabilities approximated fair value due to the short maturities of these instruments. The fair values of the Company’s long-term debt approximated carrying value, excluding the effect of unamortized debt discount, as it is based on borrowing rates currently available to the Company for debt with similar terms and maturities (Level 2 inputs).

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Acquisitions

The Company evaluates mergers, acquisitions and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or an acquisition of assets. The Company first identifies the acquiring entity by determining if the target is a legal entity or a group of assets or liabilities. If control over a legal entity is being evaluated, the Company also evaluates if the target is a variable interest or voting interest entity. For acquisitions of voting interest entities, the Company applies a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen test is met, the transaction is accounted for as an acquisition of assets. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business.

The Company accounts for its business combinations using the acquisition method of accounting which requires that the assets acquired and liabilities assumed of acquired businesses be recorded at their respective fair values at the date of acquisition. The purchase price, which includes the fair value of consideration transferred, is attributed to the fair value of the assets acquired

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and liabilities assumed. The purchase price may also include contingent consideration. The Company assesses whether such contingent consideration is subject to liability classification and fair value measurement or meets the definition of a derivative. Contingent consideration liabilities are recognized at their estimated fair value on the acquisition date. Contingent consideration arrangements that are determined to be compensatory in nature are recognized as post combination expense in our condensed consolidated statements of ~~income~~operations ratably over the implied service period beginning in the period it becomes probable such amounts will become payable. The excess of the purchase price of the acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill. The fair value of assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed twelve months from the acquisition date. The results of acquired businesses are included in the Company’s consolidated financial statements from the date of acquisition. Transaction costs directly attributable to acquired businesses are expensed as incurred.

Determining the fair value of intangible assets acquired, ~~and liabilities assumed~~defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants, requires management to use significant judgment, ~~and estimates,~~ including the selection of valuation methodologies, ~~and~~ assumptions about future net cash flows, and discount ~~rates and market participants.~~rates. Each of these factors can significantly affect the value attributed to the identifiable intangible asset acquired in a business combination.

Contingent Consideration

Contingent consideration represents additional consideration that may be transferred to former owners of an acquired entity in the future if certain future events occur or conditions are met. Contingent consideration resulting from the acquisition of a business is recorded at fair value on the acquisition date. Such contingent consideration is re-measured to its estimated fair value at each reporting date with the change in fair value recognized within operating expenses in the Company’s condensed consolidated statements of operations. Subsequent changes in the fair value of the contingent consideration are classified as an adjustment to cash flows from operating activities in the condensed consolidated statements of cash flows because the change in fair value is an input in determining net (loss) income. Cash paid in settlement of contingent consideration liabilities are classified as cash flows from financing activities up to the acquisition date fair value with any excess classified as cash flows from operating activities.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and accounts receivable. The Company maintains substantially all of its cash balances at a financial institution that management believes is of high credit-quality and is financially stable. Cash is deposited with major financial institutions in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash is held. The Company provides credit, in the normal course of business, to international and domestic distributors and customers, which are geographically dispersed. The Company attempts to limit its credit risk by performing ongoing credit evaluations of its customers and maintaining adequate allowances for potential credit losses.

The following table summarizes revenue from each of our customers who individually accounted for 10% or more of our total revenue or accounts receivable for the periods presented:


		Revenue								Accounts Receivable, net							Revenue																Accounts Receivable, net
		Three Months Ended September 30,				Nine Months Ended September 30,				September 30, 2022				December 31, 2021			Three Months Ended September 30,									Nine Months Ended September 30,							September 30, 2023				December 31, 2022
		2022		2021		2022		2021					2023					2022					2023				2022
Nacalai USA, Inc.																Nacalai USA, Inc.	22.9		%			*				18.5		%		*			32.9		%		20.3	%
BioNTech SE	BioNTech SE	38.7	%	26.2	%	37.2	%	32.2	%			21.6	%				*			BioNTech SE	*				38.7		%		*			37.2		%		*			12.0	%
Pfizer Inc.	Pfizer Inc.	29.1	%	23.4	%	30.4	%	22.9	%	43.9	%			23.6	%	Pfizer Inc.	*					29.1		%		*				30.4	%		*				19.2	%
CureVac N.V.	CureVac N.V.	*		23.0	%	*		11.3	%	*				46.5	%	CureVac N.V.	*					*				*				*			*				15.7	%
Nacalai USA, Inc.		*		*		*		*		*				11.6	%

____________________

*Less than 10%

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For the three and nine months ended September 30, ~~2022~~2023, all of the revenue recorded for Nacalai USA, Inc. was generated by the Nucleic Acid Production Segment. For the three and ~~2021,~~nine months ended September 30, 2022, substantially all of the revenue recorded for BioNTech SE and Pfizer Inc. was generated by the Nucleic Acid Production segment.

2.Acquisitions

Alphazyme, LLC

On January 18, 2023, the Company completed the acquisition of Alphazyme, LLC (“Alphazyme”), a privately-held original equipment manufacturer (“OEM”) provider of custom, scalable, molecular biology enzymes to customers in the genetic analysis and nucleic acid synthesis markets. The acquisition will expand the Company’s internal enzyme product portfolio and increase the Company’s differentiated mRNA manufacturing services and product offerings. Alphazyme’s ability to manufacture custom enzymes allows the Company to expand into near adjacent markets and raise our enzyme vertical.

The Company acquired Alphazyme for a total purchase consideration of $75.3 million, subject to customary post-closing adjustments, including a working capital settlement. The total cash consideration was paid using existing cash on hand. The transaction was accounted for as an acquisition of a business as Alphazyme consisted of inputs and processes applied to those inputs that had the ability to contribute to the creation of outputs.

For the nine months ended September 30, 2023, the Company incurred $4.1 million in transaction costs associated with the acquisition of Alphazyme, which were recorded within selling, general and administrative expenses in the condensed consolidated statements of operations. The Company did not incur any such transaction costs during the three months ended September 30, 2023.

The acquisition date fair value of consideration transferred to acquire Alphazyme consisted of the following (in thousands):


Cash paid (1)	$	70,037
Fair value of contingent consideration	5,289
Total consideration transferred	$	75,326

____________________

(1)Represents cash consideration paid at closing of $70.1 million, net of a purchase price adjustment received in June 2023 of $0.1 million.

Pursuant to the Securities Purchase Agreement (the “Alphazyme SPA”) between the Company and sellers of Alphazyme, additional payments to the sellers of Alphazyme are dependent upon meeting or exceeding defined revenue targets during fiscal years 2023 through 2025 (the “Alphazyme Performance Payments”). The Alphazyme SPA provides for a total maximum Alphazyme Performance Payments of $75.0 million. The Alphazyme Performance Payments were recorded as contingent consideration and was included as part of the purchase consideration. The Company estimated the fair value of the Alphazyme Performance Payments contingent consideration based on a Monte-Carlo simulation model which utilized an income approach. The estimated fair value was based on Alphazyme revenue projections, expected payout term, volatility and risk adjusted discount rates which are Level 3 inputs (see Note 4).

The Alphazyme SPA also provides that the Company will pay certain employees of Alphazyme an additional amount totaling $9.3 million (the “Alphazyme Retention Payments”) as of various dates but primarily through December 31, 2025 as long as these individuals continue to be employed by the Company. The Company considers the payment of the Alphazyme Retention Payments as probable and is recognizing compensation expense related to these payments in the post-acquisition period ratably over the service period of approximately three years. For the three and nine months ended September 30, 2023, the Company recorded $0.6 million and $1.6 million, respectively, of compensation expense related to the Alphazyme Retention Payments within selling, general and administrative expenses in the condensed consolidated statements of operations. Compensation expense related to the Alphazyme Retention Payments recorded within cost of revenue and research and development expenses were not material.

The Company is in the process of finalizing the evaluation of the income tax implications related to the Structuring Transactions (see Note 1), which may change the allocation of purchase consideration and provisional measurements of

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~~Retrospective Application of a Change in Accounting Principle~~

deferred tax liabilities and goodwill. The ~~Company adopted Accounting Standards Codification (“ASC”) 842,~~ ~~Leases~~ ~~(“ASC 842”), which supersedes~~following table summarizes the ~~guidance in ASC 840,~~ ~~Leases~~ ~~(“ASC 840”), effective January 1, 2021. As the Company elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b)~~estimated fair values of the ~~Jumpstart Our Business Startups Act of 2012, ASC 842 was not adopted until~~assets acquired and liabilities assumed at the ~~fourth~~acquisition date (in thousands):


Cash	$	288
Inventory	7,246
Other current assets	660
Intangible assets, net	31,680
Other assets	5,043
Total identifiable assets acquired	44,917
Current liabilities	(482)
Other long-term liabilities	(11,470)
Total liabilities assumed	(11,952)
Net identifiable assets acquired	32,965
Goodwill	42,361
Net assets acquired	$	75,326

We recorded the preliminary purchase price allocation in the first quarter of ~~2021. The comparative information for~~2023. During the three ~~and nine~~ months ended September 30, ~~2021 has been adjusted~~2023, we recorded a measurement period adjustment resulting in a decrease to ~~reflect~~goodwill of $0.4 million, with an equal offset to other long-term liabilities.

The acquisition was accounted for under the ~~impact~~acquisition method of accounting, and therefore, the total purchase price was allocated to the identifiable tangible and intangible assets acquired and the liabilities assumed based on their respective fair values as of the ~~adoption~~acquisition date. Purchase consideration in excess of ~~ASC 842~~the amounts recognized for the net assets acquired was recognized as goodwill. Goodwill is primarily attributable to expanded synergies expected from the acquisition associated with a vertical supply integration. All of the goodwill acquired in connection with the acquisition of Alphazyme was allocated to the Company’s Nucleic Acid Production segment. None of the goodwill recognized is expected to be deductible for income tax purposes.

Upon closing of the acquisition, approximately $1.5 million was placed into escrow to cover potential working capital adjustments and approximately $3.0 million was placed into escrow to secure certain representations and warranties pursuant to the terms of the Alphazyme SPA. These amounts are included in the total purchase consideration of $75.3 million. The $1.5 million was released from escrow during the second quarter of 2023, of which the Company received $0.1 million related to net working capital adjustments. Because the remaining $3.0 million held in escrow is not controlled by the Company, this amount is not included in the accompanying condensed consolidated balance sheet as of ~~January 1, 2021.~~September 30, 2023.

~~Select line items~~The following table summarizes the estimated fair values of Alphazyme’s identifiable intangible assets as of the date of acquisition and their estimated useful lives:


	Estimated Fair Value (in thousands)		Estimated Useful Life (in years)
Trade names	$	220	5
Developed technology	31,000		12
Customer relationships	460		12
Total	$	31,680

The trade name and customer relationship intangible assets are related to Alphazyme’s name, customer loyalty and customer relationships. The developed technology intangible asset is related to its unique manufacturing process optimization capability to both scale production and achieve quality standards. The fair value of these intangible assets was based on Alphazyme’s projected revenues and was estimated using an income approach, specifically the relief from royalty method for trade names, the ~~condensed consolidated statements~~multi-period excess earnings method for developed technology, and the distributor method for customer relationships. Under the income approach, an intangible asset’s fair value is equal to the present value of ~~income reflecting~~future economic benefits to be derived from ownership of the ~~adoption~~asset. The estimated fair value was developed by discounting future net cash flows to their present value at market-based rates of ~~ASC 842 are as follows (in thousands):~~

Three Months Ended September 30, 2021
As Previously Reported Adjustments As Adjusted
Operating expenses:
Cost of revenue $ 32,047 $ 174 $ 32,221
Selling, general and administrative 25,189 1,323 26,512
Research and development 1,950 (4) 1,946
Total operating expenses 47,937 1,493 49,430
Income from operations 156,873 (1,493) 155,380
Other income (expense):
Interest expense (8,545) 860 (7,685)
Income before income taxes 151,652 (633) 151,019
Net income 132,810 (633) 132,177
Net income attributable to non-controlling interests 78,536 (321) 78,215
Net income attributable to Maravai LifeSciences Holdings, Inc. 54,274 (312) 53,962
Net income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:
Diluted $ 0.45 $ (0.01) $ 0.44

Nine Months Ended September 30, 2021
As Previously Reported Adjustments As Adjusted
Operating expenses:
Cost of revenue $ 99,928 $ 1,495 $ 101,423
Selling, general and administrative 72,511 1,972 74,483
Research and development 6,046 (11) 6,035
Total operating expenses 167,236 3,456 170,692
Income from operations 403,560 (3,456) 400,104
Other income (expense):
Interest expense (25,827) 2,589 (23,238)
Income before income taxes 386,943 (867) 386,076
Net income 343,006 (867) 342,139
Net income attributable to non-controlling interests 216,410 (478) 215,932
Net income attributable to Maravai LifeSciences Holdings, Inc. 126,596 (389) 126,207
Net income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:
Diluted $ 1.14 $ (0.01) $ 1.13
return utilizing Level 3 inputs. The useful lives for these intangible assets were determined based upon the remaining period for which the assets were expected to contribute directly or indirectly to future cash flows. Key quantitative assumptions used in the determination of fair value of the developed technology intangible

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included revenue growth rates ranging from 3.0% to 55.0%, a discount rate of 17.8% and an assumed technical obsolescent curve of 5.0%.

The ~~adoption~~carrying value of ~~ASC 842 had no impact~~the remaining assets acquired or liabilities assumed was estimated to equal their fair values based on their short-term nature. These estimates were based on the ~~Company’s basic earnings per share for~~assumption that the ~~three and nine months ended September 30, 2021.~~

~~Select line items from the condensed consolidated statements of comprehensive income reflecting the adoption of ASC 842 are as follows (in thousands):~~

Three Months Ended September 30, 2021
As Previously Reported Adjustments As Adjusted
Net income $ 132,810 $ (633) $ 132,177
Total other comprehensive income 132,849 (633) 132,216
Comprehensive income attributable to non-controlling interests 78,536 (321) 78,215
Total comprehensive income attributable to Maravai LifeSciences Holdings, Inc. 54,313 (312) 54,001

Nine Months Ended September 30, 2021
As Previously Reported Adjustments As Adjusted
Net income $ 343,006 $ (867) $ 342,139
Total other comprehensive income 343,061 (867) 342,194
Comprehensive income attributable to non-controlling interests 216,421 (478) 215,943
Total comprehensive income attributable to Maravai LifeSciences Holdings, Inc. 126,640 (389) 126,251

~~Select line items from the condensed consolidated statements of changes in stockholders’ equity reflecting the adoption of ASC 842 are as follows (in thousands):~~

As of September 30, 2021
As Previously Reported Adjustments As Adjusted
Additional paid-in capital $ 172,611 $ 483 $ 173,094
Retained earnings 127,450 1,281 128,731
Non-controlling interest 150,979 1,823 152,802
Total stockholders’ equity 453,616 3,587 457,203

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~~Select line items from the condensed consolidated statements of cash flows reflecting the adoption of ASC 842 are as follows (in thousands):~~

Nine Months Ended September 30, 2021
As Previously Reported Adjustments As Adjusted
Operating activities:
Net income $ 343,006 $ (867) $ 342,139
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 6,623 (1,955) 4,668
Amortization of right-of-use assets — 5,111 5,111
Other (875) 1,052 177
Changes in operating assets and liabilities:
Inventory (26,263) (788) (27,051)
Prepaid expenses and other assets (7,590) 1,553 (6,037)
Accrued expenses and other current liabilities (10,076) (851) (10,927)
Other long-term liabilities 267 (3,831) (3,564)
Net cash provided by operating activities 310,403 (576) 309,827
Investing activities:
Purchases of property and equipment (9,188) (6) (9,194)
Net cash provided by investing activities 111,317 (6) 111,311
Financing activities:
Payments made on facility financing lease obligation and capital lease (582) 582 —
Net cash used in financing activities (110,051) 582 (109,469)

~~Recently Adopted Accounting Pronouncements~~

~~In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-10,~~ ~~Government Assistance (Topic 832) - Disclosures by Business Entities about Government Assistance~~ (“ASU 2021-10”). ASU 2021-10 provides guidance to increase the transparency of government assistance including the disclosure of: (i) the types of assistance, (ii) an entity’s accounting for the assistance, and (iii) the effect of the assistance on an entity’s financial statements. Under the new guidance, an entity is required to provide the following annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy: (i) information about the nature of the transactions and the related accounting policy used to account for the transactions, (ii) the line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item, and (iii) significant terms and conditions of the transactions, including commitments and contingencies. The new guidance is requiredCompany believes to be adopted either: (i) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application, or (ii) retrospectively to those transactions. The Company adopted ASU 2021-10 on January 1, 2022 using the prospective method and is complying with the related disclosure requirements (see Note 6).

~~In October 2021, the FASB issued ASU 2021-08,~~ ~~Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities~~reasonable; however, actual results may differ from ~~Contracts with Customers~~ ~~(“ASU 2021-08”), which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with ASC 606,~~ ~~Revenue from Contracts with Customers,~~ as if it had originated the contracts. This approach differs from the current requirement to measure contract assets and contract liabilities acquired in a business combination at fair value. ASU 2021-08 is effective for years beginning after December 31, 2022, including interim periods within those fiscal years, with early adoption permitted. The ASU is to be applied prospectively to business combinations occurring on or after the effective date of its adoption. The Company early adopted ASU 2021-08, and there was no impact to the Company’s condensed consolidated financial statements as a result of the adoption of this ASU.

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2.~~Acquisition and Divestiture~~

~~Acquisition~~these estimates.

MyChem, LLC

On January 27, 2022, the Company completed the acquisition of MyChem, LLC (“MyChem”), a privately-held San Diego, California-based provider of ultra-pure nucleotides to customers in the diagnostics, pharma, genomics and research markets. The acquisition will vertically integrate the Company’s supply chain and expand its product offerings for inputs used in the development of therapeutics and vaccines.

The Company acquired MyChem for a total purchase consideration of ~~$257.8~~$257.9 million, ~~subject to customary post-closing adjustments, including a~~which is inclusive of net working capital ~~settlement.~~adjustments. The total cash consideration ~~paid at closing~~ was ~~$240.0 million~~paid using existing cash on hand. The transaction was accounted for as an acquisition of a business as MyChem consisted of inputs and processes applied to those inputs that had the ability to contribute to the creation of outputs.

For the nine months ended September 30, 2022, the Company incurred $3.4 million in transaction costs associated with the acquisition of MyChem, which were recorded within selling, general and administrative expenses in the condensed consolidated statements of ~~income.~~operations. For the three months ended September 30, 2022, the Company incurred an insignificant amount of such transaction costs.

The acquisition date fair value of consideration transferred to acquire MyChem consisted of the following (in thousands):


Cash paid(1)	$	~~240,012~~240,145
Consideration payable	10,000
Fair value of contingent consideration	7,800
Total consideration transferred	$	~~257,812~~257,945

____________________

(1)Represents cash consideration paid at closing of $240.0 million and a purchase price adjustment paid in November 2022 of $0.1 million.

Pursuant to the Securities Purchase Agreement (the “MyChem SPA”) between the Company and sellers of MyChem, additional payments to the sellers of MyChem ~~are~~were dependent upon meeting or exceeding defined revenue targets during fiscal 2022 (the ~~“Performance~~“MyChem Performance Payment”). The MyChem SPA provides for a total maximum MyChem Performance Payment of $40.0 million. The MyChem SPA also provides that the Company will pay to the sellers of MyChem an additional $20.0 million (the “Retention Payment”) as of the second anniversary of the closing of the acquisition date as long as two senior employees who are also the sellers of MyChem continue to be employed by TriLink. The Company considers the payment of the Retention Payment as probable and is recognizing compensation expense related to this payment in the post-acquisition period ratably over the expected service period of two years. The MyChem SPA further provides that the Company will pay to the sellers of MyChem an additional amount of up to $10.0 million subject to the completion of certain calculations associated with acquired inventory, which has been recorded within accrued expenses and other current liabilities on the condensed consolidated balance sheet as of September 30, 2022. The Performance Payment was recorded as contingent consideration and was included as part of the purchase consideration. For the three and nine months ended September 30, 2022, the Company recorded $2.5 million and $6.8 million, respectively, of compensation expense related to the Retention Payment within research and development in the condensed consolidated statements of income.

The Company estimated the fair value of the MyChem Performance Payment contingent consideration based on a Monte-Carlo simulation model which utilized an income approach. The estimated fair value was based on MyChem revenue projections, expected payout term, volatility and risk adjusted discount rates which are Level 3 inputs (see Note 4). The performance period applicable to the MyChem Performance Payment ended as of December 31, 2022 and it was determined that none of the defined revenue thresholds were achieved. Consequently, no payment was made to the sellers of MyChem.

AsThe MyChem SPA also provides that the Company will pay to the sellers of MyChem an additional $20.0 million (the “MyChem Retention Payment”) as of the second anniversary of the closing of the acquisition date as long as two senior employees who are also the sellers of MyChem continue to be employed by TriLink. The Company considers the payment of the MyChem Retention Payment as probable and is recognizing compensation expense related to this payment in the ~~process~~post-acquisition period ratably over the expected service period of ~~finalizing~~two years. For the ~~evaluation~~three and nine months ended September 30, 2023, the Company recorded $1.2 million and $3.0 million, respectively, of compensation expense related to the MyChem Retention Payment within cost of revenue in the condensed consolidated statements of operations. For the three and nine months ended September 30, 2023, the Company recorded $1.3 million and $3.8 million, respectively, of compensation expense related to the MyChem Retention Payment within research and development expenses in the condensed consolidated statements of operations. For the three and nine months ended September 30, 2022, the Company recorded $2.5 million and $6.8 million, respectively, of compensation expense related to the MyChem Retention Payment within research and development expenses in the condensed consolidated statements of operations.

The MyChem SPA further provides that the Company will pay to the sellers of MyChem an additional amount of up to $10.0 million subject to the completion of certain ~~liabilities~~calculations associated with acquired inventory. During the first quarter of 2023, but subsequent to the end of the measurement period, these calculations were completed and ~~assets,~~a payment of $9.7 million was made by the ~~allocation of purchase consideration is preliminary, and provisional measurements of certain liabilities and goodwill are subject~~Company to ~~change.~~the sellers. The remaining $0.3 million was recorded as non-cash gain within current year operations.

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The following table summarizes the ~~estimated~~final allocation of the purchase price based upon the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):


Cash	$	1,176
Current assets	2,741
Intangible assets, net	123,360
Other assets	~~9,288~~8,585
Total identifiable assets acquired	~~136,565~~135,862
Current liabilities	~~(1,123)~~(420)
Other long-term liabilities	(8,399)
Total liabilities assumed	~~(9,522)~~(8,819)
Net identifiable assets acquired	127,043
Goodwill	~~130,769~~130,902
Net assets acquired	$	~~257,812~~257,945

We recorded the preliminary purchase price allocation in the first quarter of 2022. During the fourth quarter of 2022, we recorded measurement period adjustments resulting in an increase to goodwill of $0.1 million and a decrease to other assets and current liabilities of $0.7 million.

The acquisition was accounted for under the acquisition method of accounting, and therefore, the total purchase price was allocated to the identifiable tangible and intangible assets acquired and the liabilities assumed based on their respective fair values as of the acquisition date. Purchase consideration in excess of the amounts recognized for the net assets acquired was recognized as goodwill. Goodwill is primarily attributable to expanded synergies expected from the acquisition associated with a vertical supply integration. There were no tax impacts associated with the acquisition due to the pass-through income tax treatment of MyChem. All of the goodwill acquired in connection with the acquisition of MyChem was allocated to the Company’s Nucleic Acid Production segment and is deductible to Topco LLC for income tax purposes.

Upon closing of the acquisition, approximately $1.0 million was placed into escrow to cover potential working capital adjustments and approximately $12.5 million was placed into escrow to secure certain representations and warranties pursuant to the terms of the MyChem SPA. These amounts are included in the total purchase consideration of ~~$257.8~~$257.9 million. ~~Because these amounts held~~The Company released the $1.0 million in escrow ~~are not controlled by~~and paid out an additional $0.1 million related to net working capital adjustments during the fourth quarter of 2022. During the first quarter of 2023, but subsequent to the end of the measurement period, $12.4 million of the amounts in escrow to secure certain representations and warranties was released to the sellers and the remaining $0.1 million was released to the Company ~~they are not included in the accompanying condensed consolidated balance sheet as~~for indemnification of ~~September 30, 2022.~~pre-closing liabilities, which was recorded within current year operations.

The following table summarizes the estimated fair values of MyChem’s identifiable intangible assets as of the date of acquisition and their estimated useful lives:


	Estimated Fair Value (in thousands)		Estimated Useful Life (in years)
Trade names	$	460	3
Developed technology	121,000		12
Customer relationships	1,900		12
Total	$	123,360

The trade name and customer relationship intangible assets are related to MyChem’s name, customer loyalty and customer relationships. The developed technology intangible asset is related to processes and techniques for synthesizing and developing ultra-pure nucleotides. The fair value of these intangible assets was based on MyChem’s projected revenues and was estimated using an income approach, specifically the multi-period excess earnings method. Under the income approach, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. The estimated fair value was developed by discounting future net cash flows to their present value at market-based rates of return utilizing Level 3 inputs. The useful lives for these intangible assets were determined based upon the remaining period for which the assets were expected to contribute directly or indirectly to future cash flows. Key quantitative assumptions used in the

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determination of fair value of the developed technology intangible included revenue growth rates ranging from 3.0% to 30.6%, a discount rate of 16.5% and an assumed technical obsolescent curve range of 5.0% to 7.5%.

Pursuant to the terms of the MyChem SPA, the Company recognized an indemnification asset of $8.0 million within other assets, which represented the seller’s obligation to reimburse pre-acquisition income tax liabilities assumed in the acquisition and was recorded within other long-term liabilities. ~~During the second quarter of 2022, the Company recorded an adjustment of $1.3 million to the indemnification asset within other expense in the condensed consolidated statements of income. As of~~

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~~September 30, 2022, the carrying value of the indemnification asset was $6.8 million recorded within other assets in the condensed consolidated balance sheet.~~

The carrying value of the remaining assets acquired or liabilities assumed was estimated to equal their fair values based on their short-term nature. ~~These estimates were based on the assumption that the Company believes to be reasonable; however, actual results may differ from these estimates.~~

~~Revenue and earnings from MyChem included in the Company’s condensed consolidated statements of income since the date of acquisition were immaterial.~~

No proforma revenue or earnings information for the three and nine months ended September 30, 2022 and 2021 have been presented as the impact was not determined to be material to the Company’s condensed consolidated revenues and net income for the respective periods.

~~Divestiture~~

~~Vector Laboratories, Inc.~~

In August 2021, the Company entered into a definitive agreement to sell Vector to Voyager Group Holdings, Inc. (“Voyager”), a third-party unrelated to the Company, for an all cash sale price of $124.0 million, subject to purchase price adjustments. The Company determined that the fair value of Vector, less estimated costs to sell, exceeded the book value of the Vector Disposal Group and there were no other indicators of asset impairment prior to the sale. The divestiture was completed in September 2021, and final net proceeds were $120.7 million, which were inclusive of working capital adjustments.

As a result of the divestiture, during the three and nine months ended September 30, 2021, the Company recognized a pre-tax gain on sale of $11.2 million, net of transactions costs of $0.9 million, in the condensed consolidated statements of income.

The Company’s Protein Detection segment was comprised of Vector. The sale of Vector represents a strategic shift as the Company will no longer be in the protein detection business after the sale. However, the sale did not qualify for presentation as discontinued operations since the sale of the Protein Detection segment did not have a major effect on the Company’s operations or financial results.

In connection with the divestiture, the Company entered into a Transition Services Agreement (“TSA”) with Voyager to help support its ongoing operations. Under the TSA, the Company will provide certain transition services to Voyager, including information technology, finance and ERP, marketing and commercial, human resources, employee benefits, and other limited services. Depending on the service, the initial period ranges from one month to five months and the extension period ranges from one month to eight months. Income from performing services under the TSA was recorded within other income in the condensed consolidated statements of income and was not significant for the three and nine months ended September 30, 2021.

In August 2020, the Company entered into an agreement with an executive of Vector whereby the executive received incentive units of MLSH 1. In connection with the divestiture, MLSH 1 amended this executive’s incentive units resulting in the recognition of incremental unit-based compensation expense in the Company’s consolidated financial statements of $2.4 million. This unit-based compensation expense was recorded within selling, general and administrative expenses in the condensed consolidated statements of income for the three and nine months ended September 30, 2021.

3.Goodwill and Intangible Assets

The Company’s goodwill of ~~$283.5~~$326.0 million and ~~$152.8~~$283.7 million as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, represents the excess of purchase consideration over the fair value of assets acquired and liabilities assumed. As of September 30, ~~2022 and December 31, 2021,~~2023, the Company had ~~three~~four reporting units, ~~two~~three of which are contained in the Nucleic Acid Production segment. During the ~~first quarter of 2022,~~nine months ended September 30, 2023, the Company recorded goodwill of ~~$130.8~~$42.4 million in connection with the acquisition of ~~MyChem~~Alphazyme that was completed in January ~~2022~~2023 (see Note 2). As of December 31, 2022, the Company had three reporting units, two of which were contained in the Nucleic Acid Production segment. The Company has not recognized any goodwill impairment in any of the periods presented.

The following table summarizes the activity in the Company’s goodwill by segment for the period presented (in thousands):

Nucleic Acid Production Biologics Safety Testing Total
Balance as of December 31, 2021 $ 32,838 $ 119,928 $ 152,766
Acquisition 130,769 — 130,769
Balance as of September 30, 2022 $ 163,607 $ 119,928 $ 283,535

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	Nucleic Acid Production		Biologics Safety Testing		Total
Balance as of December 31, 2022	$	163,740	$	119,928	$	283,668
Acquisition	42,361		—		42,361
Balance as of September 30, 2023	$	206,101	$	119,928	$	326,029

Intangible assets are being amortized on a straight-line basis, which reflects the expected pattern in which the economic benefits of the intangible assets are being obtained, over an estimated useful life ranging from 3 to 14 years.

The following are components of finite-lived intangible assets and accumulated amortization as of the periods ~~presented:~~presented (in thousands):


		September 30, 2022									September 30, 2023
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Estimated Useful Life	Weighted Average Remaining Amortization Period		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Estimated Useful Life	Weighted Average Remaining Amortization Period
				(in thousands)				(in years)	(in years)				(in thousands)				(in years)	(in years)
Trade names	Trade names	$	7,580	$	5,572	$	2,008	3 - 10	3.7	Trade names	$	7,800	$	6,214	$	1,586	3 - 10	3.0
Patents and developed technology	Patents and developed technology	288,649		79,484		209,165		10 - 14	9.7	Patents and developed technology	319,649		103,584		216,065		10 - 14	9.1
Customer relationships	Customer relationships	21,853		10,127		11,726		10 - 12	6.7	Customer relationships	22,313		12,108		10,205		10 - 12	6.1
Total	Total	$	318,082	$	95,183	$	222,899		9.5	Total	$	349,762	$	121,906	$	227,856		8.9


		December 31, 2021									December 31, 2022
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Estimated Useful Life	Weighted Average Remaining Amortization Period		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Estimated Useful Life	Weighted Average Remaining Amortization Period
				(in thousands)				(in years)	(in years)				(in thousands)				(in years)	(in years)
Trade names	Trade names	$	7,120	$	5,012	$	2,108	5 - 10	2.9	Trade names	$	7,580	$	5,746	$	1,834	3 - 10	3.5
Patents and developed technology	Patents and developed technology	167,648		63,465		104,183		5 - 14	8.5	Patents and developed technology	288,649		85,058		203,591		10 - 14	9.5
Customer relationships	Customer relationships	19,953		8,673		11,280		10 - 12	6.4	Customer relationships	21,853		10,615		11,238		10 - 12	6.5
Total	Total	$	194,721	$	77,150	$	117,571		8.1	Total	$	318,082	$	101,419	$	216,663		9.3

During the first quarter of ~~2022,~~2023, the Company recorded intangible assets of ~~$123.4~~$31.7 million in connection with the acquisition of ~~MyChem~~Alphazyme that was completed in January ~~2022~~2023 (see Note 2).

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The Company recognized ~~$5.6~~$6.2 million and ~~$15.9~~$18.5 million of amortization expense from intangible assets directly linked with revenue-generating activities within cost of revenue in the condensed consolidated statements of ~~income~~operations for the three and nine months ended September 30, ~~2022,~~2023, respectively. The Company recognized ~~$3.1~~$5.6 million and ~~$9.4~~$15.9 million of amortization expense from intangible assets directly linked with ~~revenue-generating~~revenue generating activities within cost of revenue in the condensed consolidated statements of ~~income~~operations for the three and nine months ended September 30, ~~2021,~~2022, respectively.

Amortization expense for intangible assets that are not directly related to sales-generating activities of $0.7 million and $2.0 million was recorded as selling, general and administrative expenses for the three and nine months ended September 30, 2023, respectively. Amortization expense for intangible assets that are not directly related to sales generating activities of $0.7 million and $2.2 million was recorded as selling, general and administrative expenses for the three and nine months ended September 30, 2022, respectively. Amortization expense for intangible assets that are not directly related to sales-generating activities of $1.5 million and $5.3 million was recorded as selling, general and administrative expenses for the three and nine months ended September 30, 2021, respectively.

As of September 30, ~~2022,~~2023, the estimated future amortization expense for finite-lived intangible assets were as follows (in thousands):


2022 (remaining three months)		$	6,236
2023		24,812
2023 (remaining three months)				2023 (remaining three months)	$	6,869
2024	2024	24,812		2024	27,478
2025	2025	24,669		2025	27,335
2026	2026	24,432		2026	27,098
2027				2027	26,082
Thereafter	Thereafter	117,938		Thereafter	112,994
Total estimated amortization expense	Total estimated amortization expense	$	222,899	Total estimated amortization expense	$	227,856

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4.Fair Value Measurements

The following ~~table summarizes~~tables summarize the Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy as of the periods presented (in thousands):


		Fair Value Measurements as of September 30, 2022									Fair Value Measurements as of September 30, 2023
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Assets	Assets									Assets
Money market funds										Money market funds	$	425,367	$	—	$	—	$	425,367
Interest rate cap	Interest rate cap	$	—	$	10,370	$	—	$	10,370	Interest rate cap	—		13,268		—		13,268
Total assets										Total assets	$	425,367	$	13,268	$	—	$	438,635

Liabilities										Liabilities

Contingent consideration, non-current										Contingent consideration, non-current	$	—	$	—	$	5,358	$	5,358

~~Assets and liabilities measured at~~


	Fair Value Measurements as of December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets
Interest rate cap	$	—	$	11,362	$	—	$	11,362

Contingent Consideration

In connection with the acquisition of Alphazyme (see Note 2), the Company is required to make contingent payments to the sellers of up to $75.0 million, subject to achieving certain revenue thresholds. The preliminary fair value of the liability for the contingent payments recognized upon the acquisition as part of the purchase accounting opening balance sheet totaled $5.3 million. The preliminary fair value of the contingent consideration was determined using a Monte-Carlo simulation-based model discounted to present value. Assumptions used in this calculation are expected revenue, a discount rate of 17.8% and various probability factors. The ultimate settlement of the contingent consideration could deviate from current estimates based on the actual results of these financial measures. The contingent consideration has three performance payments spanning over three years beginning 2024. This liability is considered to be a ~~recurring basis~~Level 3 financial liability that is remeasured each reporting period. Changes in fair value of contingent consideration are recognized as a gain or loss and recorded within change in estimated fair value of ~~December 31, 2021~~contingent consideration in the condensed consolidated statements of operations. During the three and

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nine months ended September 30, 2023, the Company recorded increases of $2.4 million and $0.1 million, respectively, in the estimated fair value of contingent consideration. These were ~~insignificant.~~

~~Contingent Consideration~~due to changes in estimates associated with Alphazyme revenue projections reaching thresholds that would trigger a contingent payment per the Alphazyme SPA.

In connection with the acquisition of MyChem (see Note 2), the Company is required to make contingent payments to the sellers of up to $40.0 million, subject to achieving certain revenue thresholds. The preliminary fair value of the liability for the contingent payments recognized upon the acquisition as part of the purchase accounting opening balance sheet totaled $7.8 million. The preliminary fair value of the contingent consideration was determined using a Monte-Carlo simulation-based model discounted to present value. Assumptions used in this calculation are expected revenue, a discount rate of 16.9% and various probability factors. The ultimate settlement of the contingent consideration could deviate from current estimates based on the actual results of these financial measures. The contingent consideration projected year of payment iswas 2023. This liability is considered to be a Level 3 financial liability that is remeasured each reporting period. Changes in fair value of contingent consideration are recognized as a gain or loss and recorded within change in estimated fair value of contingent consideration in the condensed consolidated statements of ~~income.~~operations. During the second quarter of 2022, the Company recorded a $7.8 million decrease in the estimated fair value of contingent consideration. This was due to a change in the estimate associated with MyChem revenue projections reaching thresholds that would trigger a contingent payment per the MyChem SPA. The contingent consideration expired as of December 31, 2022 and the revenue thresholds were not achieved.

The following table provides a reconciliation of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the period presented (in thousands):


	Contingent Consideration
Balance as of December 31, 2021	$	—
Contingent consideration related to the acquisition of MyChem	7,800
Change in estimated fair value of contingent consideration	(7,800)
Balance as of December 31, 2022	—
Contingent consideration related to the acquisition of Alphazyme	5,289
Change in estimated fair value of contingent consideration	69
Balance as of September 30, ~~2022~~2023	$	—5,358

5.Balance Sheet Components

Inventory

Inventory consisted of the following as of the periods presented (in thousands):

September 30, 2022 December 31, 2021
Raw materials $ 21,385 $ 19,726
Work-in-process 30,568 21,382
Finished goods 10,471 10,449
Total inventory $ 62,424 $ 51,557

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	September 30, 2023		December 31, 2022
Raw materials	$	26,787	$	13,486
Work-in-process	12,209		21,950
Finished goods	10,146		7,716
Total inventory	$	49,142	$	43,152

Other assets

Other assets consisted of the following as of the periods presented (in thousands):


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Right-of-use assets		$	54,118	$	49,095
Prepaid lease payments		10,731		—
Operating lease right-of-use assets						Operating lease right-of-use assets	$	62,859	$	63,896
Interest rate cap	Interest rate cap	10,370		541		Interest rate cap	13,268		11,362
Indemnification asset (see Note 2)	Indemnification asset (see Note 2)	6,766		—		Indemnification asset (see Note 2)	6,312		7,682
Prepaid lease payments						Prepaid lease payments	—		27,253
Other	Other	5,414		3,815		Other	3,140		5,396
Total other assets	Total other assets	$	87,399	$	53,451	Total other assets	$	85,579	$	115,589

~~Accrued expenses and other current liabilities~~

~~Accrued expenses and other current liabilities consisted~~

Table of ~~the following as of the periods presented (in thousands):~~Contents

September 30, 2022 December 31, 2021
Employee related $ 16,325 $ 18,894
Consideration payable (see Note 2) 10,000 —
Accrued construction costs 9,023 —
Lease liabilities, current portion 5,833 3,722
Professional services 3,143 2,897
Sales and use tax liability 2,268 1,296
Customer deposits 1,589 2,429
Other 12,006 5,336
Total accrued expenses and other current liabilities $ 60,187 $ 34,574

~~Other long-term liabilities~~

~~Other long-term liabilities consisted of the following as of the periods presented (in thousands):~~

September 30, 2022 December 31, 2021
Non-current lease liabilities $ 43,790 $ 40,906
Accrued Retention Payments (see Note 2) 6,794 —
Acquisition related tax liability (see Note 2) 6,766 —
Other 169 160
Total other long-term liabilities $ 57,519 $ 41,066

6.Government Assistance

Cooperative Agreement

In May 2022, TriLink entered into a cooperative agreement (the “Cooperative Agreement”) with the U.S. Department of Defense, as represented by the Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense on behalf of the Biomedical Advanced Research and Development Authority (“BARDA”), within the U.S. Department of Health and Human Services (“HHS”), to advance the development of domestic manufacturing capabilities and to expand TriLink’s domestic production capacity in its San Diego manufacturing campus (the “Flanders San Diego Facility”) for products critical to the development and manufacture of mRNA vaccines and therapeutics.

~~Pursuant to certain requirements, BARDA awarded TriLink an amount equal to $38.8 million or 50% of the construction and validation costs currently budgeted for the Flanders San Diego Facility.~~ The ~~contract period of performance is May 2022 through December 2023, which is the effective date of the~~ Cooperative Agreement ~~through the anticipated date of completion of construction and validation of manufacturing capacity. Amounts reimbursed are subject to audit and may be recaptured by~~has since transitioned from the U.S. Department of Defense to the HHS as of January 2023. The Flanders San Diego Facility consists of two buildings (“Flanders I” and “Flanders II”), however, the Cooperative Agreement is exclusively involved in ~~certain circumstances.~~

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Flanders I.

The Cooperative Agreement requires the Company to provide the U.S. Government with conditional priority access and certain preferred pricing obligations for a 10-year period from the completion of the construction project for the production of a medical countermeasure (or a component thereof) that the Company manufactures in the Flanders San Diego Facility during a declared public health emergency.

AsPursuant to certain requirements, BARDA awarded TriLink an amount equal to $38.8 million or 50% of the construction and validation costs budgeted for the Flanders San Diego Facility. The contract period of performance is May 2022 through January 2034, which is the effective date of the Cooperative Agreement through the anticipated expiration of the 10-year conditional priority access period. Amounts reimbursed are subject to audit and may be recaptured by the HHS in certain circumstances.

During the three and nine months ended September 30, 2023, the Company received $0.3 million and $9.0 million, respectively, of reimbursements under the Cooperative Agreement, with equal offsets recorded to property and equipment on the condensed consolidated balance sheet. During the three and nine months ended September 30, 2022, the Company had not yet received any reimbursements under the Cooperative ~~Agreement but~~Agreement. As of September 30, 2023, the Company has recorded a receivable of ~~$18.2~~$3.5 million, with ~~offsets recorded to: (i) prepaid lease payments associated with our Flanders San Diego Facility within other assets for $17.1 million; and (ii)~~an equal offset to property and ~~equipment for $1.1 million.~~equipment.

7.Leases

All of the Company's facilities, including office, laboratory and manufacturing space, are occupied under long-term non-cancelable lease arrangements with various expiration dates through 2038, some of which include options to extend up to 20 years. The Company does not have any leases that include residual value guarantees.

In January 2023, the Company assumed Alphazyme’s existing facility lease in Jupiter, Florida, in connection with the acquisition of Alphazyme (see Note 2). The lease term began in January 2023 and will end in January 2032. The lease is for 10 years with the option to extend for one additional 5-year period.

In February 2023, the Company entered into an agreement to expand the existing Alphazyme facility lease for additional space. The lease term will run concurrently with and as part of the initial lease term.

In March 2023 and June 2023, the Company’s leases for Flanders I and Flanders II, respectively, commenced. The Company entered into the lease agreement in August 2021. The leases are for eleven years with the option to extend for one additional 5-year period. The Company is reasonably certain to execute the renewal option and has, therefore, recognized this as part of its ROU assets and lease liabilities. The lease includes tenant improvement provisions, rent abatement clauses, and escalating rent payments over the life of the lease.

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The following table presents supplemental balance sheet information related to the Company's leases as of the periods presented (in thousands):


	Line Item in the Condensed Consolidated Balance Sheets	September 30, 2023		December 31, 2022
Right-of-use assets
Finance leases	Property and equipment, net	$	76,656	$	—
Operating leases	Other assets	62,859		63,896
Total right-of-use assets		$	139,515	$	63,896

Current lease liabilities
Finance leases	Current portion of finance lease liabilities	$	596	$	—
Operating leases	Accrued expenses and other current liabilities	7,093		6,269
Total current lease liabilities		$	7,689	$	6,269

Non-current lease liabilities
Finance leases	Finance lease liabilities, less current portion	$	32,077	$	—
Operating leases	Other long-term liabilities	49,953		51,556
Total non-current lease liabilities		$	82,030	$	51,556

The components of the net lease costs for the Company’s leases reflected in the Company's condensed consolidated statements of operations were as follows for the periods presented (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Finance lease costs:
Depreciation of leased assets	$	1,370	$	—	$	1,943	$	—
Interest on lease liabilities	684		—		1,015		—
Total finance lease costs	2,054		—		2,958		—

Operating lease costs	3,121		2,480		9,299		6,246
Variable lease costs	1,021		790		2,918		1,858
Total lease costs	$	6,196	$	3,270	$	15,175	$	8,104

The weighted average remaining lease term and weighted average discount rate related to the Company's ROU assets and lease liabilities for its leases were as follows as of the periods presented:


	September 30, 2023		December 31, 2022
Weighted average remaining lease term (in years):
Finance leases	14.4		*
Operating leases	7.4		7.9

Weighted average discount rate:
Finance leases	8.4	%	*
Operating leases	6.7	%	6.5	%

____________________

*The Company did not have any finance leases as of December 31, 2022.

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Supplemental information concerning the cash flow impact arising from the Company's leases recorded in the Company's condensed consolidated statements of cash flows is detailed in the following table for the periods presented (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Cash paid for amounts included in lease liabilities:
Financing cash flows used for finance leases	$	124	$	—	$	190	$	—
Operating cash flows used for finance leases	684		—		1,015		—
Operating cash flows used for operating leases	2,618		1,865		7,658		4,884

Non-cash transactions:
Right-of-use assets obtained in exchange for new finance lease liabilities	$	—	$	—	$	32,862	$	—
Right-of-use assets obtained in exchange for new operating lease liabilities	—		7,099		3,931		7,872

As of September 30, 2023, the Company expects that its future minimum lease payments will become due and payable as follows (in thousands):


	Finance Leases		Operating Leases		Total
2023 (remaining three months)	$	824	$	2,651	$	3,475
2024	3,327		10,774		14,101
2025	3,427		10,952		14,379
2026	3,530		10,042		13,572
2027	3,636		8,564		12,200
Thereafter	44,102		34,125		78,227
Total minimum lease payments	58,846		77,108		135,954
Less: interest	(26,173)		(20,062)		(46,235)
Total lease liabilities	$	32,673	$	57,046	$	89,719

8.Commitments and Contingencies

Unconditional Purchase Obligations

In the ordinary course of business, we enter into certain unconditional purchase obligations with our suppliers. These are agreements to purchase products and services that are enforceable, legally binding, and specify terms that include provisions with respect to quantities, pricing and timing of purchases.

Amounts purchased under these obligations totaled $0.3 million and $2.7 million for the three and nine months ended September 30, 2023, respectively. Such amounts were not material for the three and nine months ended September 30, 2022.

As of September 30, 2023, future minimum commitments under these obligations totaled $3.6 million, of which $0.3 million relates to the three months ending December 31, 2023 and $3.3 million relates to the year ending December 31, 2024.

9.Long-Term Debt

Credit Agreement

In October 2020, Maravai Intermediate Holdings, LLC (“Intermediate”), a ~~wholly-owned~~wholly owned subsidiary of Topco LLC, along with certain of its subsidiaries ~~Vector, TriLink and Cygnus~~ (together with Intermediate, the “Borrowers”), entered into a credit agreement (as amended, the “Credit Agreement”), which provides for a term loan facility and a revolving credit facility. In January 2022, the Company entered into an amendment (the “Amendment”) to refinance the term loan and to address the planned phase out of London Interbank Offered Rate (“LIBOR”), which was replaced with a Term Secured Overnight Financing Rate (“SOFR”) based rate.

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The Credit Agreement provides for a $600.0 million term loan facility, maturing October 2027 (the ~~“Term~~“Tranche B Term Loan”), and a $180.0 million revolving credit facility (the “Revolving Credit Facility”).

In August 2021, in conjunction with the Company’s divestiture of the Protein Detection segment, the Company transferred, per the existing terms of the Credit Agreement, the portion of the Term Loan held by Vector of $118.4 million to Intermediate in its entirety. This amount was not assumed by Voyager, the entity that acquired Vector, as part of the divestiture. Total outstanding debt and loan covenant requirements remained unchanged as a result of the divestiture.

In January 2022, the Company entered into an amendment (the “Amendment”) to the Credit Agreement to: (i) refinance $544.0 million in aggregate principal amount of first lien term loans initially issued thereunder (the “First Lien Term Loan”) and to replace it with a Tranche B Term Loan (the “Tranche B Term Loan”); (ii) replace the London Interbank Offered Rate (“LIBOR”) based interest rate with a Term Secured Overnight Financing Rate (“SOFR”) based rate; and (iii) reduce the interest rate margins applicable to the Term Loan and Revolving Credit Facility under the Credit Agreement. The previous interest rate margin on the facilities was, with respect to each LIBOR-based loan, 3.75% to 4.25% and, with respect to each base rate-based loan, 2.75% to 3.25% (depending, in each case, on consolidated first lien leverage). Following the Amendment, the interest rate margin on the facilities is 3.00%, with respect to each Term SOFR-based loan, and 2.00%, with respect to each base rate-based loan. Further, the Amendment reduces the base rate floor for the term loans from 2.00% to 1.50%, sets the floor for Term SOFR-based term loans at 0.50% and sets the floor for Term SOFR-based revolving loans at 0.00%. No other significant terms under the Credit Agreement were changed in connection with the Amendment.

As of September 30, ~~2022,~~2023, the interest rate on the Tranche B Term Loan was ~~5.55%~~8.32% per annum.

The Credit Agreement also provides for a $20.0 million limit for letters of ~~credit, which remained unused as~~credit. As of September 30, ~~2022.~~2023, the Company had a $0.5 million outstanding letter of credit as security for a lease agreement, which reduced the availability of credit under the Revolving Credit Facility by $0.5 million.

Borrowings under the Credit Agreement are unconditionally guaranteed by Topco LLC, together with the existing and future material domestic subsidiaries of Topco LLC (subject to certain exceptions), as specified in the respective guaranty agreements. Borrowings under the Credit Agreement are also secured by a first-priority lien and security interest in substantially all of the assets (subject to certain exceptions) of existing and future material domestic subsidiaries of Topco LLC that are loan parties.

The accounting related to entering into the Amendment was evaluated on a creditor-by-creditor basis to determine whether each transaction should be accounted for as a modification or extinguishment. Certain creditors under the First Lien Term Loan did not participate in this refinancing transaction, were repaid their principal and interest of $8.5 million and ceased being creditors of the Company and the repayment of their related outstanding debt balances has been accounted for as an extinguishment of debt. Proceeds of borrowings from new lenders of $8.5 million were accounted for as a new debt financing. The Company recorded a loss on extinguishment of debt of $0.2 million in the accompanying condensed consolidated statements of ~~income~~operations during the first quarter of 2022. For the remainder of the creditors, this transaction was accounted for as a modification because the change in present value of cash flows between the two term loans before and after the transaction was less than 10% on a creditor-by-creditor basis. As part of the refinancing, the Company incurred $0.9 million of various costs, of which an insignificant amount was related to an original issuance discount, and were all capitalized in the accompanying balance sheet within long-term debt and are subject to amortization over the term of the refinanced debt as an adjustment to interest expense using the effective interest method.

We also incurred $0.3 million of financing-related fees related to the Revolving Credit Facility. As of September 30, ~~2022,~~2023, unamortized debt issuance costs totaled ~~$2.4~~$1.6 million and are recorded as assets within other assets on the accompanying condensed consolidated balance sheet as there is no balance outstanding related to the Revolving Credit Facility.

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Commencing with the fiscal year ended December 31, 2021, and each fiscal year thereafter, the Credit Agreement requires that we make mandatory prepayments on the Tranche B Term Loan principal upon certain excess cash flow, subject to certain step-downs based on the Company’s first lien net leverage ratio. The mandatory prepayment shall be reduced to 25% or 0% of the calculated excess cash flow if the Company’s first lien net leverage ratio was equal to or less than 4.75:1.00 or 4.25:1.00, respectively, however, no prepayment shall be required to the extent excess cash flow calculated for the respective period is equal to or less than $10.0 million. As of September 30, ~~2022,~~2023, the Company’s first lien net leverage ratio was less than 4.25:1.00. Thus, a mandatory prepayment ~~was not required.~~

The Tranche B Term Loan became repayable in quarterly payments of $1.4 million beginning in March 2022, with all remaining outstanding principal due in October 2027. The Tranche B Term Loan includes prepayment provisions that allow the Company, at our option, to repay all or a portion of the principal amount at any time. The Revolving Credit Facility allows the Company to repay and borrow from time to time until October 2025, at which time all amounts borrowed must be repaid. Subject to certain exceptions and limitations, we are required to repay borrowings underon the Tranche B Term Loan ~~and Revolving Credit Facility with the proceeds~~out of ~~certain occurrences, such as the incurrence of debt, certain equity contributions and certain asset sales or dispositions.~~

Accrued interest under the Credit Agreement is payable by us (a) quarterly in arrears with respect to Base Rate loans, (b) at the end of each interest rate period (or at each three-month interval in the case of loans with interest periods greater than three months) with respect to Term SOFR Rate loans, (c) on the date of any repayment or prepayment and (d) at maturity (whether by acceleration or otherwise). An annual commitment fee is applied to the daily unutilized amount under the Revolving Credit Facility at 0.375% per annum, with one stepdown to 0.25% per annum based on Intermediate’s first lien net leverage ratio.our excess cash flow was not required.

The Credit Agreement contains certain covenants, including, among other things, covenants limiting our ability to incur or prepay certain indebtedness, pay dividends or distributions, dispose of assets, engage in mergers and consolidations, make acquisitions or other investments and make changes to the nature of the business. Additionally, the Credit Agreement also requires us to maintain a certain net leverage ~~ratio.~~ratio if the outstanding debt balance on the Revolving Credit Facility exceeds 35.0% of the aggregate amount of available credit of $180.0 million. The Company was in compliance with these covenants as of September 30, ~~2022.~~2023.

Interest Rate Cap

In the first quarter of 2021, the Company entered into an interest rate cap agreement to manage a portion of its variable interest rate risk on its outstanding long-term debt. The contract, which was effective March 31, 2021, entitles the Company to receive from the counterparty at each calendar quarter end the amount, if any, by which a specified defined floating market rate exceeds the cap strike interest rate, applied to the contract’s notional amount of $415.0 million. The floating rate of interest is reset at the end of each three-month period. The contract was set to expire on March 31, 2023.

In May 2022, the Company amended the interest rate cap agreement, effective June 30, 2022, to increase the contract’s notional amount to $500.0 million and to extend the maturity date to January 19, 2025. Additionally, the floating rate option changed from a LIBOR-based rate to a SOFR-based rate. Other provisions remained unchanged as a result of the amendment. Premiums paid to amend the interest rate cap agreement were immaterial.

The interest rate cap agreement has not been designated as a hedging relationship and has been recognized on the condensed consolidated balance sheet at fair value of ~~$10.4~~$13.3 million within other assets with changes in fair value recognized within interest expense in the condensed consolidated statements of ~~income.~~operations.

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The Company’s long-term debt consisted of the following as of the periods presented (in thousands):


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Tranche B Term Loan	Tranche B Term Loan	$	539,920	$	—	Tranche B Term Loan	$	534,480	$	538,560
First Lien Term Loan		—		544,000

Unamortized debt issuance costs	Unamortized debt issuance costs	(11,656)		(13,409)		Unamortized debt issuance costs	(9,520)		(11,123)
Total long-term debt	Total long-term debt	528,264		530,591		Total long-term debt	524,960		527,437
Less: current portion	Less: current portion	(5,440)		(6,000)		Less: current portion	(5,440)		(5,440)
Total long-term debt, less current portion	Total long-term debt, less current portion	$	522,824	$	524,591	Total long-term debt, less current portion	$	519,520	$	521,997

There were no balances outstanding on the Company’s Revolving Credit Facility as of September 30, ~~2022~~2023 and December 31, ~~2021.~~

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2022.

As of September 30, ~~2022,~~2023, the aggregate future principal maturities of the Company’s debt obligations for each of the next five years, based on contractual due dates, were as follows (in thousands):


2022 (remaining three months)		$	1,360
2023		5,440
2023 (remaining three months)				2023 (remaining three months)	$	1,360
2024	2024	5,440		2024	5,440
2025	2025	5,440		2025	5,440
2026	2026	5,440		2026	5,440
Thereafter		516,800
2027				2027	516,800

Total long-term debt	Total long-term debt	$	539,920	Total long-term debt	$	534,480

8.10.Net (Loss) Income Per Class A Common Share Attributable to Maravai LifeSciences Holdings, Inc.

Basic net (loss) income per Class A common share has been calculated by dividing net (loss) income for the period, adjusted for net (loss) income attributable to non-controlling interests, by the weighted average number of Class A common shares outstanding during the period. Diluted net (loss) income per Class A common share gives effect to potentially dilutive securities by application of the treasury stock method or if-converted method, as applicable. Diluted net (loss) income per Class A common share attributable to the Company is computed by adjusting the net (loss) income and the weighted average number of Class A common shares outstanding to give effect to potentially diluted securities. In computing the diluted net loss per share for the three and nine months ended September 30, 2023, potentially dilutive Class A common shares were excluded from the diluted loss per share calculation because of their anti-dilutive effect.

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The following table presents the computation of basic and diluted net (loss) income per Class A common share attributable to the Company for the periods presented (in thousands, except per share amounts):

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021
(as adjusted)* 2022 2021
(as adjusted)*
Numerator:
Net income $ 99,653 $ 132,177 $ 403,234 $ 342,139
Less: income attributable to common non-controlling interests (55,184) (78,215) (220,663) (215,932)
Net income attributable to Maravai LifeSciences Holdings, Inc.—basic 44,469 53,962 182,571 126,207
Net income effect of dilutive securities:
Effect of dilutive employee stock purchase plan (“ESPP”), restricted stock units (“RSUs”) and stock options 18 87 90 102
Effect of the assumed conversion of Class B common stock — 60,425 168,454 165,473
Net income attributable to Maravai LifeSciences Holdings, Inc.—diluted $ 44,487 $ 114,474 $ 351,115 $ 291,782
Denominator:
Weighted average Class A common shares outstanding—basic 131,540 118,433 131,518 109,174
Weighted average effect of dilutive securities:
Effect of dilutive ESPP, RSUs and stock options 111 368 136 157
Effect of the assumed conversion of Class B common stock — 139,227 123,669 148,468
Weighted average Class A common shares outstanding—diluted 131,651 258,028 255,323 257,799
Net income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:
Basic $ 0.34 $ 0.46 $ 1.39 $ 1.16
Diluted $ 0.34 $ 0.44 $ 1.37 $ 1.13

~~____________________~~

*~~As adjusted to reflect the impact of the adoption of ASC 842. See Note 1 for a summary of the adjustments.~~


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net (loss) income	$	(15,102)	$	99,653	$	(28,393)	$	403,234
Less: loss (income) attributable to common non-controlling interests	8,640		(55,184)		15,323		(220,663)
Net (loss) income attributable to Maravai LifeSciences Holdings, Inc.—basic	(6,462)		44,469		(13,070)		182,571
Net (loss) income effect of dilutive securities:
Effect of dilutive employee stock purchase plan (“ESPP”), restricted stock units (“RSUs”) and stock options	—		18		—		90
Effect of the assumed conversion of Class B common stock	—		—		—		168,454
Net (loss) income attributable to Maravai LifeSciences Holdings, Inc.—diluted	$	(6,462)	$	44,487	$	(13,070)	$	351,115

Denominator:
Weighted average Class A common shares outstanding—basic	131,930		131,540		131,845		131,518
Weighted average effect of dilutive securities:
Effect of dilutive ESPP, RSUs and stock options	—		111		—		136
Effect of the assumed conversion of Class B common stock	—		—		—		123,669
Weighted average Class A common shares outstanding—diluted	131,930		131,651		131,845		255,323

Net (loss) income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:
Basic	$	(0.05)	$	0.34	$	(0.10)	$	1.39
Diluted	$	(0.05)	$	0.34	$	(0.10)	$	1.37

Shares of Class B common stock do not share in the earnings or losses of the Company and are therefore not participating securities. As such, a separate presentation of basic and diluted net (loss) income per share for Class B common stock under the two-class method has not been presented.

The following table presents potentially dilutive securities excluded from the computation of diluted net (loss) income per share for the periods presented because their effect would have been anti-dilutive for the periods presented (in thousands):


		Three Months Ended September 30,		Nine Months Ended September 30,			Three Months Ended September 30,		Nine Months Ended September 30,
		2022	2021	2022	2021		2023	2022	2023	2022

RSUs						RSUs	3,768	—	3,209	—

Stock options	Stock options	2,338	283	2,338	289	Stock options	4,524	2,338	4,524	2,338
Shares estimated to be purchased under the ESPP	Shares estimated to be purchased under the ESPP	93	—	21	3	Shares estimated to be purchased under the ESPP	9	93	8	21
Shares of Class B common stock	Shares of Class B common stock	131,540	—	—	—	Shares of Class B common stock	119,094	131,540	119,094	—
Total	Total	133,971	283	2,359	292	Total	127,395	133,971	126,835	2,359

Shares underlying contingently issuable awards that have not met the necessary conditions as of the end of a reporting period are not included in the calculation of diluted net (loss) income per share of Class A common stock attributable to the Company for that period. The Company had contingently issuable PSUs outstanding that did not meet the market and performance conditions as of September 30, 2023 and, therefore, were excluded from the calculation of diluted net (loss) income per share of Class A common stock attributable to the Company. The maximum number of potentially dilutive Class A common shares that could be issued upon vesting for such awards was insignificant as of September 30, 2023. These amounts were also excluded

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from the potentially dilutive securities in the table above. The Company had no contingently issuable PSUs outstanding as of September 30, 2022.

9.11.Income Taxes

We are subject to U.S. federal and state income taxes with respect to our allocable share of any taxable income or loss of Topco LLC, as well as any stand-alone income or loss we generate. Topco LLC is organized as a limited liability company and treated

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as a partnership for federal tax purposes and generally does not pay income taxes on its taxable income in most jurisdictions. Instead, Topco LLC’s taxable income or loss is passed through to its members, including us.

The following table summarizes the Company’s income tax (benefit) expense and effective tax rate for the periods presented (in thousands, except percentages):

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021
(as adjusted)* 2022 2021
(as adjusted)*
Income before income taxes $ 113,763 $ 151,019 $ 455,596 $ 386,076
Income tax expense $ 14,110 $ 18,842 $ 52,362 $ 43,937
Effective tax rate 12.4 % 12.5 % 11.5 % 11.4 %

~~____________________~~

*~~As adjusted to reflect the impact of the adoption of ASC 842. See Note 1 for a summary of the adjustments.~~


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
(Loss) income before income taxes	$	(20,563)		$	113,763		$	(38,450)		$	455,596
Income tax (benefit) expense	$	(5,461)		$	14,110		$	(10,057)		$	52,362
Effective tax rate	26.6		%	12.4		%	26.2		%	11.5		%

The Company’s effective tax rates of 26.6% and 26.2% for the three and nine months ended September 30, 2023, respectively, differed from the U.S. federal statutory income tax rate of 21.0%, primarily due to (loss) income associated with the non-controlling interest, changes to our deferred tax assets due to changes in estimates associated with our state income tax rate, and the release of a previous uncertain tax position due to statue expiration.

The Company’s effective tax rates of 12.4% and 11.5% for the three and nine months ended September 30, 2022, respectively, differed from the U.S. federal statutory rate of 21.0%, primarily due to income associated with the non-controlling interest.

The Company’s effective tax rate of 12.5% and 11.4% for the three and nine months ended September 30, 2021, respectively, differed from the U.S. federal statutory rate of 21.0%, primarily due to income associated with the non-controlling interest, nondeductible expense related to the Tax Receivable Agreement, and changes to our deferred tax assets due to changes in the estimates associated with our state income tax rate.

Tax Distributions to Topco LLC’s Owners

Topco LLC is subject to an operating agreement put in place at the date of the Organizational Transactions (“LLC Operating Agreement”). The LLC Operating Agreement has numerous provisions related to allocations of income and loss, as well as timing and amounts of distributions to its owners. This agreement also includes a provision requiring cash distributions enabling its owners to pay their taxes on income passing through from Topco LLC. These tax distributions are computed based on an assumed income tax rate equal to the sum of (i) the maximum combined marginal federal and state income tax rate applicable to an individual and (ii) the net investment income tax. The assumed income tax rate currently totals 46.7%, which may increase to 54.1% in certain cases where the qualified business income deduction is unavailable.

In addition, under the tax rules, Topco LLC is required to allocate taxable income disproportionately to its unit holders. Because tax distributions are determined based on the holder of LLC Units who is allocated the largest amount of taxable income on a per unit basis, but are made pro rata based on ownership, Topco LLC is required to make tax distributions that, in the aggregate, will likely exceed the amount of taxes Topco LLC would have otherwise paid if it were taxed on its taxable income at the assumed income tax rate. Topco LLC is subject to entity level taxation in certain states and certain of its subsidiaries are subject to entity level U.S. and foreign income taxes. As a result, the accompanying condensed consolidated statements of ~~income~~operations include income tax expense related to those states and to U.S. and foreign jurisdictions where Topco LLC or any of our subsidiaries are subject to income tax.

During the three months ended September 30, 2023, Topco LLC did not pay any tax distributions to its owners. During the nine months ended September 30, 2023 Topco LLC paid tax distributions of $20.3 million to its owners, including $10.7 million to us.

During the three months ended September 30, 2022, Topco LLC paid tax distributions of $75.7 million to its owners, including $38.9 million to us. During the nine months ended September 30, 2022, Topco LLC paid tax distributions of $246.1 million to its owners, including $126.8 million to us.

During the three months ended September 30, 2021, Topco LLC paid tax distributions of $90.0 million to its owners, including $39.9 million to us. During the nine months ended September 30, 2021, Topco LLC paid tax distributions of $186.5 million to its owners, including $80.2 million to us.

As of September 30, ~~2022,~~2023, no amounts for tax distributions had been accrued as such payments were made during the period.

~~10.~~12.Related Party Transactions

MLSH 1’s majority owner is GTCR, LLC (“GTCR”). The Company’s Executive Chairman of the Board, Chief Financial Officer (“CFO”) and General Counsel are executives of MLSH 1 and MLSH 2.

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Payable to Related Parties Pursuant to the Tax Receivable Agreement

We are a party to a Tax Receivable Agreement (“TRA”) with MLSH 1 and MLSH 2. The TRA provides for the payment by us to MLSH 1 and MLSH 2, collectively, of 85% of the amount of certain tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of the Organizational Transactions, IPO and any subsequent purchases or exchanges of LLC Units of Topco LLC. Based on our current projections of taxable income, and before deduction of any specially allocated depreciation and amortization, we anticipate having enough taxable income to utilize most of these tax benefits.

As of September 30, ~~2022,~~2023, our liability under the TRA is ~~$746.0~~$678.4 million, payable to MLSH 1 and MLSH 2, representing approximately 85% of the calculated tax savings we anticipate being able to utilize in future years. During the three and nine months ended September 30, ~~2022,~~2023, the Company recognized ~~a gain~~losses of $1.0 million and $2.3 million, respectively, on TRA liability adjustment reflecting a change in the tax benefit obligation attributable to a change in the expected tax benefit. The remeasurement was primarily due to changes in our estimated state apportionment and the corresponding ~~reduction~~change of our estimated state tax rate.

~~During~~We made payments of $42.6 million to MLSH 1 and MLSH 2 pursuant to the TRA during the nine months ended September 30, 2023, of which $0.4 million was related to interest. No payments were made during the three months ended September 30, 2023 or the three and nine months ended September 30, ~~2022, no payments were made to~~2022.

Contribution, Exchange and Forfeiture Agreement with MLSH 1 or

In January 2023, the Company undertook Structuring Transactions and executed Contribution, Contribution and Exchange, and Forfeiture Agreements with MLSH ~~2 pursuant to the TRA.~~1 (see Note 1).

Topco LLC Operating Agreement

MLSH 1 is party to the LLC Operating Agreement put in place at the date of the Organizational Transactions. This agreement includes a provision requiring cash distributions enabling its owners to pay their taxes on income passing through from Topco LLC. During the nine months ended September 30, 2023, the Company made distributions of $9.6 million for tax liabilities to MLSH 1 under this agreement. During the three and nine months ended September 30, 2022, the Company made distributions of $36.8 million and $119.3 million, respectively, for tax liabilities to MLSH 1 under this agreement. ~~During~~No such distributions were made during the three ~~and nine~~ months ended September 30, ~~2021, the Company made distributions of $50.1 million and $106.3 million, respectively, for tax liabilities to MLSH 1 under this agreement.~~

~~Contract Development and Manufacturing Agreement with Curia Global~~

GTCR has significant influence over Curia Global (“Curia”). During the three and nine months ended September 30, 2022, the Company paid insignificant amounts to Curia for contract manufacturing and development services. During the three and nine months ended September 30, 2021, the Company paid $0.4 million and $7.1 million to Curia, respectively. Such amounts were included in research and development expense on the condensed consolidated statements of income.2023.

~~11.~~13.Segments

The Company’s financial performance is reported in ~~three~~two segments. A description of each segment follows:

•Nucleic Acid Production: focuses on the manufacturing and sale of highly modified nucleic acids products to support the needs of customers’ research, therapeutic and vaccine programs. This segment also provides research products for labeling and detecting proteins in cells and tissue samples.

•Biologics Safety Testing: focuses on manufacturing and selling biologics safety and impurity tests and assay development services that are utilized by our customers in their biologic drug manufacturing spectrum.

•~~Protein Detection~~: focused on manufacturing and selling labeling and visual detection reagents to scientific research customers for their tissue-based protein detection and characterization needs. The Company completed the divestiture of its Protein Detection business in September 2021.

The Company has determined that adjusted earnings before interest, tax, depreciation and amortization (“Adjusted EBITDA”) is the profit or loss measure that the CODM uses to make resource allocation decisions and evaluate segment performance. Adjusted EBITDA assists management in comparing the segment performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the core operations and, therefore, are not included in measuring segment performance. The Company defines Adjusted EBITDA as net (loss) income before interest, taxes, depreciation and amortization, certain non-cash items and other adjustments that we do not consider in our evaluation of ongoing operating performance from period to period. Corporate costs, net of eliminations, are managed on a standalone basis and are not allocated to segments.

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The following schedule includes revenue and adjusted EBITDA for each of the Company’s reportable operating segments (in thousands)~~. We have revised our presentation for~~:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue:
Nucleic Acid Production	$	51,228	$	174,881	$	165,944	$	623,786
Biologics Safety Testing	15,638		16,382		48,863		54,509
Total reportable segments’ revenue	66,866		191,263		214,807		678,295
Intersegment eliminations	(1)		—		(3)		(7)
Total	$	66,865	$	191,263	$	214,804	$	678,288

Segment adjusted EBITDA:
Nucleic Acid Production	$	16,591	$	133,816	$	58,656	$	502,906
Biologics Safety Testing	11,246		12,997		35,307		43,631
Total reportable segments’ adjusted EBITDA	27,837		146,813		93,963		546,537
Reconciliation of total reportable segments’ adjusted EBITDA to (loss) income before income taxes
Amortization	(6,870)		(6,254)		(20,487)		(18,033)
Depreciation	(4,071)		(1,857)		(8,966)		(5,604)
Interest expense	(11,637)		(3,136)		(30,492)		(10,234)
Interest income	7,432		—		20,268		—
Corporate costs, net of eliminations	(15,937)		(14,296)		(49,188)		(38,549)
Other adjustments:
Acquisition contingent consideration	(2,385)		—		(69)		7,800
Acquisition integration costs	(3,268)		(2,760)		(9,198)		(10,642)

Stock-based compensation	(9,987)		(4,740)		(25,246)		(12,675)


Merger and acquisition related expenses	(46)		—		(3,708)		(1,195)
Financing costs	—		(7)		—		(1,071)
Acquisition related tax adjustment	77		—		(1,370)		(1,264)
Tax Receivable Agreement liability adjustment	(1,007)		—		(2,342)		2,340

Other	(701)		—		(1,615)		(1,814)
(Loss) income before income taxes	(20,563)		113,763		(38,450)		455,596
Income tax benefit (expense)	5,461		(14,110)		10,057		(52,362)
Net (loss) income	$	(15,102)	$	99,653	$	(28,393)	$	403,234

During the ~~prior periods below to remove the presentation of Total Adjusted EBITDA~~three and ~~reconcile the total of our reportable segments’ measure of profit or loss to income before income taxes in addition to net income,~~nine months ended September 30, 2023 and removed corporate costs, net of eliminations from total reportable segments’ adjusted EBITDA and included such amounts in the reconciliation to income before income taxes. Additionally, we have revised our prior years’ presentation of our

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~~total reportable segments’ revenue, in which we removed intersegment eliminations from our total reportable segment’s revenue.~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021
(as adjusted)* 2022 2021
(as adjusted)*
Revenue:
Nucleic Acid Production $ 174,881 $ 183,055 $ 623,786 $ 499,962
Biologics Safety Testing 16,382 16,626 54,509 52,483
Protein Detection — 5,283 — 18,959
Total reportable segments’ revenue 191,263 204,964 678,295 571,404
Intersegment eliminations — (154) (7) (608)
Total $ 191,263 $ 204,810 $ 678,288 $ 570,796
Segment adjusted EBITDA:
Nucleic Acid Production $ 133,816 $ 150,347 $ 502,906 $ 401,699
Biologics Safety Testing 12,997 13,602 43,631 42,182
Protein Detection — 1,057 — 6,391
Total reportable segments’ adjusted EBITDA 146,813 165,006 546,537 450,272
Reconciliation of total reportable segments’ adjusted EBITDA to income before income taxes
Amortization (6,254) (4,604) (18,033) (14,685)
Depreciation (1,857) (1,797) (5,604) (4,668)
Interest expense (3,136) (7,685) (10,234) (23,238)
Corporate costs, net of eliminations (14,296) (10,140) (38,549) (30,132)
Other adjustments:
Acquisition contingent consideration — — 7,800 —
Acquisition integration costs (2,760) (21) (10,642) (38)
Stock-based compensation (4,740) (3,567) (12,675) (8,228)
Gain on sale of business — 11,249 — 11,249
Merger and acquisition related expenses — 366 (1,195) (1,496)
Financing costs (7) (1,034) (1,071) (2,092)
Acquisition related tax adjustment — — (1,264) —
Tax Receivable Agreement liability adjustment — 3,246 2,340 9,132
Other — — (1,814) —
Income before income taxes 113,763 151,019 455,596 386,076
Income tax expense (14,110) (18,842) (52,362) (43,937)
Net income $ 99,653 $ 132,177 $ 403,234 $ 342,139

~~____________________~~

*~~As adjusted to reflect the impact of the adoption of ASC 842. See Note 1 for a summary of the adjustments.~~

~~During~~ the nine months ended September 30, 2022, intersegment revenue was immaterial between the Nucleic Acid Production and Biologics Safety Testing segments. There was no intersegment revenue during the three months ended September 30, 2022. During the three and nine months ended September 30, 2021, intersegment revenue was $0.2 million and $0.6 million, respectively, between the Nucleic Acid Production and Protein Detection segments. TheAny intersegment sales and the related gross margin on inventory recorded at the end of the period are eliminated for consolidation purposes. Internal selling prices for intersegment sales are consistent with the segment’s normal retail price offered to external parties. There was no commission expense recognized for intersegment sales for the three and nine months ended September 30, ~~2022~~2023 and ~~2021.~~2022.

The Company does not allocate assets to its reportable segments as they are not included in the review performed by the CODM for purposes of assessing segment performance and allocating resources.

14.Subsequent Event

In November 2023, the Company announced a cost realignment initiative that is expected to result in the termination of approximately 15% of the Company’s workforce. As a result, the Company currently estimates it will incur one-time costs of approximately $5.0 million, consisting primarily of cash severance expenses, which the Company expects to recognize in the fourth quarter of 2023. The estimated expenses are subject to a number of assumptions and actual results may differ materially

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from the estimated amount. The Company may also incur additional expenses not currently contemplated due to events that may occur as a result of, or in connection with, the cost realignment initiative.

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~~12.Subsequent Event~~

On October 18, 2022, the Company placed William “Trey” Martin, III, Chief Executive Officer (“CEO”), on a paid leave of absence following a lawsuit filed against him and the Company by his previous employer alleging violation of a noncompetition agreement. The duration of Mr. Martin’s leave of absence has not yet been determined. During his leave of absence, Mr. Martin is not expected to perform any of the responsibilities of CEO of the Company.

As a result of Mr. Martin’s leave of absence, the Board of Directors (the “Board”) of the Company has appointed Carl Hull, Executive Chairman of the Board, to serve as interim CEO to maintain continuity of the day-to-day operations and draw upon his extensive knowledge of the management of the Company due to his prior service as the Company’s CEO.

The Company believes the allegations in this lawsuit are without merit and intends to defend itself vigorously against all claims asserted. The lawsuit is still in early stages and the Company cannot reasonably estimate a range of potential loss and expense at this time.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of financial condition and results of operations together with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, as filed with the Securities and Exchange Commission. This discussion and analysis reflects our historical results of operations and financial position and contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. Please also see the section titled “Special Note Regarding Forward-Looking Statements.” We were incorporated in August 2020 and, pursuant to the Organizational Transactions described in Note 1 to our condensed consolidated financial statements, became a holding company whose principal asset is a controlling equity interest in Topco LLC. As the sole managing member of Topco LLC, we operate and control the business and affairs of Topco LLC and its subsidiaries. Accordingly, we consolidate Topco LLC in our consolidated financial statements and report a non-controlling interest related to the portion of Topco LLC not owned by us. Because the Organizational Transactions were considered transactions between entities under common control, the consolidated financial statements for periods prior to the Organizational Transactions and the initial public offering have been adjusted to combine the previously separate entities for presentation purposes. Unless otherwise noted or the context otherwise requires, references in this Quarterly Report on Form 10-Q to “we,” “us” or “our” refer to Maravai LifeSciences Holdings, Inc. and its subsidiaries.

Overview

We are a leading life sciences company providing critical products to enable the development of drug therapies, diagnostics, novel vaccines and support research on human diseases. Our customers include the top global biopharmaceutical companies ranked by research and development expenditures according to industry consultants, and many other emerging biopharmaceutical and life sciences research companies, as well as leading academic research institutions and in vitro diagnostics companies. Our products address the key phases of biopharmaceutical development and include complex nucleic acids for diagnostic and therapeutic applications, antibody-based products to detect impurities during the production of biopharmaceutical products, and products to detect the expression of proteins in tissues of various species.

We have and will continue to build a transformative life sciences products company by acquiring businesses and accelerating their growth through capital infusions and industry expertise. Biomedical innovation is dependent on a reliable supply of reagents in the fields of nucleic acid production, biologics safety testing and protein labeling. From inventive startups to the world’s leading biopharmaceutical, vaccine, diagnostics and gene and cell therapy companies, these customers turn to us to solve their complex discovery challenges and help them streamline and scale their supply chain needs beginning from research and development through clinical trials to commercialization.

Our primary customers are biopharmaceutical companies who are pursuing novel research and product development programs. Our customers also include a range of government, academic and biotechnology institutions.

As of September 30, ~~2022,~~2023, we employed a team of over ~~600~~670 employees, approximately ~~18%~~21% of whom have advanced degrees. We primarily utilize a direct sales model for our sales to our customers in North America. Our international sales, primarily in Europe and Asia Pacific, are sold through a combination of third-party distributors as well as via a direct sales model. The percentage of our total revenue derived from customers in North America was ~~51.1%~~51.6% and ~~40.4%~~50.9% for the three and nine months ended September 30, ~~2022,~~2023, respectively. The percentage of our total revenue derived from customers in North America was ~~41.0%~~51.1% and ~~41.8%~~40.4% for the three and nine months ended September 30, ~~2021,~~2022, respectively.

We generated revenue of $66.9 million and $214.8 million for the three and nine months ended September 30, 2023, respectively, and $191.3 million and $678.3 million for the three and nine months ended September 30, 2022, ~~respectively, and $204.8 million and $570.8 million for the three and nine months ended September 30, 2021,~~ respectively.

Total revenue by segment was ~~$174.9~~$51.2 million in Nucleic Acid Production and ~~$16.4~~$15.6 million in Biologics Safety Testing for the three months ended September 30, ~~2022. Total revenue by segment was $182.9~~2023, compared to $174.9 million ~~in Nucleic Acid Production, $16.6~~and $16.4 million, ~~in Biologics Safety Testing and $5.3 million in Protein Detection~~respectively, for the three months ended September 30, ~~2021. We divested our Protein Detection segment in September 2021, and since then operate two business segments only, Nucleic Acid Production and Biologics Safety Testing.~~2022.

Total revenue by segment was ~~$623.8~~$165.9 million in Nucleic Acid Production and ~~$54.5~~$48.9 million in Biologics Safety Testing for the nine months ended September 30, ~~2022. Total revenue by segment was $499.4~~2023, compared to $623.8 million ~~in Nucleic Acid Production, $52.5~~and $54.5 million, ~~in Biologics Safety Testing and $19.0 million in Protein Detection~~respectively, for the nine months ended September 30, ~~2021.~~

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2022.

We focus a substantial portion of our resources supporting our core business segments. We are actively pursuing opportunities to expand our customer base both domestically and internationally by fostering strong relationships with both existing and new customers and distributors. Our management team has experience working with biopharmaceutical, vaccine, diagnostics and

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gene and cell therapy companies as well as academic and research scientists. We also intend to continue making investments in our overall infrastructure and business segments to support our growth. We incurred aggregate selling, general and administrative expenses of $38.9 million and $112.9 million for the three and nine months ended September 30, 2023, respectively, and $30.8 million and $92.1 million for the three and nine months ended September 30, 2022, ~~respectively, and $26.5 million and $74.5 million for the three and nine months ended September 30, 2021,~~ respectively.

Our research and development efforts are geared towards supporting our customers’ needs. We incurred research and development expenses of $4.3 million and $12.7 million for the three and nine months ended September 30, 2023, respectively, and $5.4 million and $13.4 million for the three and nine months ended September 30, 2022, ~~respectively, and $1.9 million and $6.0 million for the three and nine months ended September 30, 2021,~~ respectively. We intend to continue to invest in research and development and new products and technologies to support our customers’ needs for the foreseeable future.

Recent Developments

Acquisition

In January ~~2022,~~2023, we completed the acquisition of ~~MyChem,~~Alphazyme, LLC (“~~MyChem”~~Alphazyme”), a privately-held ~~San Diego, California-based~~original equipment manufacturer (“OEM”) provider of ~~ultra-pure nucleotides~~custom, scalable, molecular biology enzymes to customers in the ~~diagnostics, pharma, genomics~~genetic analysis and ~~research~~nucleic acid synthesis markets, for a total purchase consideration of ~~$257.8~~$75.3 million. As a result of the acquisition, we own all the outstanding interest in ~~MyChem.~~Alphazyme. Our consolidated results of operations for the three and nine months ended September 30, ~~2022~~2023 include the operating results of ~~MyChem~~Alphazyme from the acquisition date. See Note 2 ~~to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.~~

~~Government Assistance~~

In May 2022, TriLink entered into a cooperative agreement (“Cooperative Agreement”) with the U.S. Department of Defense, as represented by the Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense on behalf of the Biomedical Advanced Research and Development Authority (“BARDA”), within the U.S. Department of Health and Human Services, to advance the development of domestic manufacturing capabilities and to expand TriLink’s domestic production capacity for products critical to the development and manufacture of mRNA vaccines and therapeutics, including nucleoside triphosphates and CleanCap®~~, TriLink’s proprietary co-transcriptional mRNA capping reagents.~~

TriLink is expanding its San Diego manufacturing campus by making a significant investment in additional cleanroom and small molecule manufacturing space, implementing automation systems and adding support areas to augment production capacity (the “Flanders San Diego Facility”). Pursuant to certain requirements, BARDA awarded TriLink an amount equal to 50% of the construction and validation costs currently budgeted for the Flanders San Diego Facility. See Note 6 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Trends and Uncertainties

COVID-19 Related Revenue Trends and Uncertainties

~~Since the start of the COVID-19 pandemic in early 2020, our~~Our results of operations and cash flows ~~have~~during each of the years ended December 31, 2022, 2021 and 2020 substantially benefited from the ~~strong~~ demand for COVID-19 related products and services, including our proprietary CleanCap® analogs and highly modified RNA products, particularly ~~mRNA.~~ mRNA, which are used by our customers in the production of COVID-19 vaccines. As a result of the general decrease in market demand for COVID-19 related products and services, including the supply and manufacture of COVID-19 vaccines, and in particular, following the end of U.S. federal public health emergency declaration and World Health Organization declaration of the end of the pandemic in early May 2022, we expect to continue to see substantial sequential declines in COVID-19 related revenue.

We estimate that revenue from COVID-19 related products and services represented approximately ~~66.1%~~22.3% and ~~70.2%, respectively,~~19.7% of our total revenues for the three and nine months ended September 30, ~~2022. However, we expect~~2023, respectively, and 66.1% and 70.2% of our total revenues for the three and nine months ended September 30, 2022, respectively. We believe that the second quarter of 2022 ~~to represent~~will have represented the highest revenue quarter for revenue attributable to our COVID-19 related products and services, ~~with~~and have experienced substantial declines in COVID-19 related revenue ~~expected in the future. In addition to~~since such quarter as a result of the general market trend of reduced demand for COVID-19 related products and services as the pandemic subsides, ~~our~~including the supply and manufacture of COVID-19 related vaccines, and the World Health Organization declaring an end to the COVID-19 pandemic. We expect further declines in COVID-19 related revenue for ~~the remainder~~these reasons, as well as a result of ~~2022 and continuing into 2023 may be negatively impacted by~~ unused inventory of our products that our customers have on hand. We are currently unable to fully estimate the impact of this unused inventory on our future ~~demand given both binding contractual commitments by~~COVID-19 related revenue, nor are we able to predict when our customers ~~for additional purchases and~~will resume purchasing COVID-19 related products given that our customers generally ~~having~~have not provided us with detailed inventory data. Our longer-term revenue prospects for COVID-19 related products are highly uncertain but are expected to be substantially less than pandemic highs. The factors that could influence longer-term COVID-19 related revenue include: the emergence, duration and intensity of new virus variants; competition faced by our customers from other COVID-19 vaccine manufacturers or developers of alternative treatments; the availability and administration of pediatric and booster vaccinations, vaccine supply constraints, vaccine hesitancy and the effectiveness of vaccines against new virus strains; and the U.S. economy and global economy, including impacts resulting

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from supply chain constraints, labor market shortages and inflationary pressures. This contraction in COVID-19 related demand will significantly decrease our revenue and cash flow, which in turn could have a material adverse impact on our operating results and financial condition in the future.

Other Trends and Uncertainties

~~Biopharmaceutical~~While we believe that the long-term trend of biopharmaceutical customers ~~are increasingly~~ relying on outside parties to provide important inputs and services for their clinical research and manufacturing remains a ~~development driving~~long-term growth driver for ~~suppliers with unique capabilities and the ability to manufacture at an appropriate scale to support customer programs. We~~us, we believe that ~~suppliers like ourselves, with this rare combination~~recent industry trends and uncertainties, including changes in our customers’ spending priorities and budgetary policies and practices, which negatively impacted our revenue and operating results in the three quarters of ~~capabilities, proprietary products~~2023, may continue and result in slower

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growth and/or cause a further decline in our revenues during the ~~required~~fourth quarter of 2023. These trends and uncertainties, which we primarily attribute to lower levels of investment in ~~manufacturing~~the research and ~~quality systems, are benefiting from rapid growth as biopharmaceutical customers seek~~development funding of early-stage biotechnology companies and declines and uncertainties in the capital markets amidst ongoing negative macroeconomic challenges, has and may continue to ~~partner with~~cause those companies to take action to conserve capital, resulting in a ~~small number of trusted suppliers. In addition to~~potential reduction in research and development spending across the ~~continued trend toward outsourcing, several market developments are driving increased growth,~~markets in our addressable market segments, including: (i) pivot toward mRNA vaccines driven in part by the success of mRNA COVID-19 vaccines; (ii) rapid growth in development of cell and gene therapies; (iii) large and growing pipeline of protein-based therapeutics; and (iv) rise in molecular diagnostics driven by COVID-19.

which we participate.

Our ~~Biologics Safety Testing business continues~~businesses also continue to see headwinds from ~~business~~a general contraction in economic activity in Asia, ~~seeing impacts from the ongoing COVID-19 pandemic lock-downs~~particularly in China, ~~and~~which may negatively impact our ~~ongoing decisions not to ship into Russia.~~revenue derived from those markets.

How We Assess Our Business

We consider a variety of financial and operating measures in assessing the performance of our business. The key measures we use to determine how our business is performing are revenue and Adjusted EBITDA.

Adjusted EBITDA is a non-GAAP financial measure that we define as net (loss) income ~~(loss)~~ adjusted for interest expense, provision for income taxes, depreciation, amortization and stock-based compensation expenses. Adjusted EBITDA reflects further adjustments to eliminate the impact of certain items, including certain non-cash and other items, that we do not consider representative of our ongoing operating performance. We also present Adjusted Free Cash Flow, which is a non-GAAP measure that we define as Adjusted EBITDA less capital expenditures.

Management uses Adjusted EBITDA to evaluate the financial performance of our business and the effectiveness of our business strategies. We present Adjusted EBITDA and Adjusted Free Cash Flow because we believe they are frequently used by analysts, investors and other interested parties to evaluate companies in our industry and they facilitate comparisons on a consistent basis across reporting periods. Further, we believe they are helpful in highlighting trends in our operating results because they exclude items that are not indicative of our core operating performance. Adjusted EBITDA is also a component of the financial covenant under our credit agreement that governs our ability to access more than $63.0 million in aggregate letters of credit and available borrowings under our revolving credit facility. In addition, if we borrow more than $63.0 million, we are required to maintain a specified net leverage ratio. See “Liquidity and Capital Resources—Sources of Liquidity—Debt Covenants” below for a discussion of this financial covenant.

Adjusted EBITDA and Adjusted Free Cash Flow have limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. We may in the future incur expenses similar to the adjustments in the presentation of Adjusted EBITDA. In particular, we expect to incur meaningful share-based compensation expense in the future. Other limitations include that Adjusted EBITDA and Adjusted Free Cash Flow do not reflect:

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

•changes in our working capital needs;

•provision for income taxes, which may be a necessary element of our costs and ability to operate;

•the costs of replacing the assets being depreciated, which will often have to be replaced in the future;

•the non-cash component of employee compensation expense; and

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

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

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Components of Results of Operations

Revenue

Our revenue consists primarily of product revenue and, to a much lesser extent, service revenue. We generated total consolidated revenue of $66.9 million and $214.8 million for the three and nine months ended September 30, 2023, respectively, and $191.3 million and $678.3 million for the three and nine months ended September 30, 2022, respectively, ~~and $204.8 million and $570.8 million for the three and nine months ended September 30, 2021, respectively,~~ through the following segments: (i) Nucleic Acid Production and (ii) Biologics Safety ~~Testing and (iii) Protein Detection. We divested our Protein Detection segment in September 2021, and since then operate two business segments only, Nucleic Acid Production and Biologics Safety~~ Testing.

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Nucleic Acid Production Segment

Our Nucleic Acid Production segment focuses on the manufacturing and sale of highly modified nucleic acids products to support the needs of customers’ research, therapeutic and vaccine programs. This segment also provides research products for labeling and detecting proteins in cells and tissue samples.

Biologics Safety Testing Segment

Our Biologics Safety Testing segment focuses on manufacturing and selling biologics safety and impurity tests and assay development services that are utilized by our customers in their biologic drug manufacturing activities.

~~Protein Detection Segment~~

Our Protein Detection segment products, which included a portfolio of labeling and visual detection reagents, were purchased by our scientific research customers for their tissue-based protein detection and characterization needs. In September 2021, we completed the divestiture of Vector Laboratories, Inc. and subsidiaries (“Vector”), which made up our Protein Detection segment.

Cost of Revenue

Cost of revenue associated with our products primarily consists of manufacturing related costs incurred in the production process, including personnel and related costs, stock-based compensation expense, inventory write-downs, costs of materials, labor and overhead, packaging and delivery costs and allocated costs, including facilities, information technology, depreciation and amortization of intangibles. Cost of revenue associated with our services primarily consists of personnel and related costs, stock-based compensation expense, cost of materials and allocated costs, including facilities and information technology costs. Costs of services were not material for the three and nine months ended September 30, ~~2022~~2023 and ~~2021.~~

~~We expect cost of revenue to increase in future periods as our revenue grows.~~2022.

Operating Expenses

Selling, General and Administrative

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

We expect that our selling, general and administrative expenses will continue to increase, primarily due to ~~increased headcount and~~ an expanding facilities footprint to support anticipated long-term growth in the business, costs incurred in increasing our presence globally, and increases in marketing activities to drive awareness and adoption of our products and ~~services, and incremental costs associated with operating as a public company.~~services.

Research and Development

Research and development costs primarily consist of salaries, benefits, stock-based compensation expense, outside contracted services, cost of supplies, in-process research and development costs from asset acquisitions and allocated facilities costs for employees engaged in research and development of products and services. We expense all research and development costs in the period in which they are incurred. Payment made prior to the receipt of goods or services to be used in research and development are recognized as prepaid assets until the goods are received or services are rendered.

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We expect that our research and development costs ~~will~~to fluctuate in future periods as we continue ~~to increase to support~~ our research and development efforts, including meeting our customers’ needs. These costs may fluctuate from period to period due to the timing and scope of our development activities.

Change in Estimated Fair Value of Contingent Consideration

~~In the first quarter~~Change in estimated fair value of ~~2022, we completed the acquisition of MyChem and recorded a~~ contingent consideration ~~liability~~consists of ~~$7.8 million. In the second quarter of 2022, we recorded a~~ fair value ~~adjustment~~adjustments to ~~the liability~~contingent consideration liabilities associated with completed acquisitions. These adjustments are based on our assessment of the probability of achieving certain revenue thresholds and other probability factors. This was due to a change in estimate associated with MyChem revenue projections reaching thresholds that would trigger a contingent payment per the MyChem Securities Purchase Agreement (the “MyChem SPA”).

~~Gain on Sale of Business~~

~~In the third quarter of 2021, we completed the sale of Vector, which represented our Protein Detection business, to Voyager Group Holdings, Inc. (“Voyager”) and recorded a gain of $11.2 million.~~

Other Income (Expense)

Interest Expense

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

~~Loss~~Interest Income

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

Table of ~~Debt~~Contents

~~Loss on extinguishment of debt represent the write-off of remaining unamortized debt discount and deferred issuance costs on previously outstanding debt when we engage in refinancing activities.~~

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

The Tax Receivable Agreement liability adjustment reflects changes in the Tax Receivable Agreement liability recorded in our condensed consolidated balance sheets ~~as a result~~primarily due to changes in our estimated state apportionment and the corresponding change of ~~change in the~~our estimated state tax ~~benefit obligation attributable to a change in the expected tax benefit.~~rate.

Income Tax Expense

As a result of our ownership of LLC Units in Topco LLC, we are subject to U.S. federal, state and local income taxes with respect to our allocable share of any taxable income of Topco LLC and will be taxed at the prevailing corporate tax rates.

Non-Controlling Interests

Non-controlling interests represent the portion of profit or loss, net assets and comprehensive income or loss of our consolidated subsidiaries that is not allocable to the Company based on our percentage of ownership of such entities. Income or loss attributed to the non-controlling interests is based on the LLC Units outstanding during the period and is presented on the condensed consolidated statements of ~~income.~~operations. As of September 30, ~~2022,~~2023, we held ~~51.5%~~approximately 52.6% of the outstanding LLC Units of Topco LLC, and ~~48.5%~~MLSH 1 held approximately 47.4% of the outstanding LLC Units of Topco ~~LLC were held by MLSH 1.~~LLC.

Results of Operations

The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and notes included elsewhere in this Quarterly Report on Form 10-Q. For information with respect to recent

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accounting pronouncements that are of significance or potential significance to us, see Note 1 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.


		Three Months Ended September 30,							Three Months Ended September 30,
		2022		2021 (as adjusted)*		Change			2023		2022		Change
		(in thousands, except per share amounts)							(in thousands, except per share amounts)
Revenue	Revenue	$	191,263	$	204,810	(6.6)	%	Revenue	$	66,865	$	191,263	(65.0)	%
Operating expenses:	Operating expenses:							Operating expenses:
Cost of revenue (1)	Cost of revenue (1)	38,176		32,221		18.5	%	Cost of revenue (1)	36,686		38,176		(3.9)	%
Selling, general and administrative (1)	Selling, general and administrative (1)	30,795		26,512		16.2	%	Selling, general and administrative (1)	38,864		30,795		26.2	%
Research and development (1)	Research and development (1)	5,389		1,946		176.9	%	Research and development (1)	4,347		5,389		(19.3)	%
Change in estimated fair value of contingent consideration								Change in estimated fair value of contingent consideration	2,385		—		*

Gain on sale of business		—		(11,249)		#

Total operating expenses	Total operating expenses	74,360		49,430		50.4	%	Total operating expenses	82,282		74,360		10.7	%
Income from operations		116,903		155,380		(24.8)	%
(Loss) income from operations								(Loss) income from operations	(15,417)		116,903		(113.2)	%
Other income (expense), net	Other income (expense), net	(3,140)		(4,361)		(28.0)	%	Other income (expense), net	(5,146)		(3,140)		63.9	%
Income before income taxes		113,763		151,019		(24.7)	%
Income tax expense		14,110		18,842		(25.1)	%
Net income		$	99,653	$	132,177	(24.6)	%
Net income attributable to non-controlling interests		55,184		78,215		(29.4)	%
Net income attributable to Maravai LifeSciences Holdings, Inc.		$	44,469	$	53,962	(17.6)	%
(Loss) income before income taxes								(Loss) income before income taxes	(20,563)		113,763		(118.1)	%
Income tax (benefit) expense								Income tax (benefit) expense	(5,461)		14,110		(138.7)	%
Net (loss) income								Net (loss) income	(15,102)		99,653		(115.2)	%
Net (loss) income attributable to non-controlling interests								Net (loss) income attributable to non-controlling interests	(8,640)		55,184		(115.7)	%
Net (loss) income attributable to Maravai LifeSciences Holdings, Inc.								Net (loss) income attributable to Maravai LifeSciences Holdings, Inc.	$	(6,462)	$	44,469	(114.5)	%

Net income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:
Net (loss) income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:								Net (loss) income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:
Basic	Basic	$	0.34	$	0.46			Basic	$	(0.05)	$	0.34
Diluted	Diluted	$	0.34	$	0.44			Diluted	$	(0.05)	$	0.34
Weighted average number of Class A common shares outstanding:	Weighted average number of Class A common shares outstanding:							Weighted average number of Class A common shares outstanding:
Basic	Basic	131,540		118,433				Basic	131,930		131,540
Diluted	Diluted	131,651		258,028				Diluted	131,930		131,651
Non-GAAP measures:	Non-GAAP measures:							Non-GAAP measures:
Adjusted EBITDA	Adjusted EBITDA	$	132,517	$	154,866			Adjusted EBITDA	$	11,900	$	132,517
Adjusted Free Cash Flow	Adjusted Free Cash Flow	$	118,754	$	152,671			Adjusted Free Cash Flow	$	379	$	116,882

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		Nine Months Ended September 30,							Nine Months Ended September 30,
		2022		2021 (as adjusted)*		Change			2023		2022		Change
		(in thousands, except per share amounts)							(in thousands, except per share amounts)
Revenue	Revenue	$	678,288	$	570,796	18.8	%	Revenue	$	214,804	$	678,288	(68.3)	%
Operating expenses:	Operating expenses:							Operating expenses:
Cost of revenue (1)	Cost of revenue (1)	115,704		101,423		14.1	%	Cost of revenue (1)	113,635		115,704		(1.8)	%
Selling, general and administrative (1)	Selling, general and administrative (1)	92,056		74,483		23.6	%	Selling, general and administrative (1)	112,912		92,056		22.7	%
Research and development (1)	Research and development (1)	13,358		6,035		121.3	%	Research and development (1)	12,686		13,358		(5.0)	%
Change in estimated fair value of contingent consideration	Change in estimated fair value of contingent consideration	(7,800)		—		#		Change in estimated fair value of contingent consideration	69		(7,800)		(100.9)	%
Gain on sale of business		—		(11,249)		#

Total operating expenses	Total operating expenses	213,318		170,692		25.0	%	Total operating expenses	239,302		213,318		12.2	%
Income from operations		464,970		400,104		16.2	%
(Loss) income from operations								(Loss) income from operations	(24,498)		464,970		(105.3)	%
Other income (expense), net	Other income (expense), net	(9,374)		(14,028)		(33.2)	%	Other income (expense), net	(13,952)		(9,374)		48.8	%
Income before income taxes		455,596		386,076		18.0	%
Income tax expense		52,362		43,937		19.2	%
Net income		$	403,234	$	342,139	17.9	%
Net income attributable to non-controlling interests		220,663		215,932		2.2	%
Net income attributable to Maravai LifeSciences Holdings, Inc.		$	182,571	$	126,207	44.7	%
(Loss) income before income taxes								(Loss) income before income taxes	(38,450)		455,596		(108.4)	%
Income tax (benefit) expense								Income tax (benefit) expense	(10,057)		52,362		(119.2)	%
Net (loss) income								Net (loss) income	(28,393)		403,234		(107.0)	%
Net (loss) income attributable to non-controlling interests								Net (loss) income attributable to non-controlling interests	(15,323)		220,663		(106.9)	%
Net (loss) income attributable to Maravai LifeSciences Holdings, Inc.								Net (loss) income attributable to Maravai LifeSciences Holdings, Inc.	$	(13,070)	$	182,571	(107.2)	%

Net income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:
Net (loss) income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:								Net (loss) income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:
Basic	Basic	$	1.39	$	1.16			Basic	$	(0.10)	$	1.39
Diluted	Diluted	$	1.37	$	1.13			Diluted	$	(0.10)	$	1.37
Weighted average number of Class A common shares outstanding:	Weighted average number of Class A common shares outstanding:							Weighted average number of Class A common shares outstanding:
Basic	Basic	131,518		109,174				Basic	131,845		131,518
Diluted	Diluted	255,323		257,799				Diluted	131,845		255,323
Non-GAAP measures:	Non-GAAP measures:							Non-GAAP measures:
Adjusted EBITDA	Adjusted EBITDA	$	507,988	$	420,140			Adjusted EBITDA	$	44,775	$	507,988
Adjusted Free Cash Flow	Adjusted Free Cash Flow	$	484,582	$	410,080			Adjusted Free Cash Flow	$	4,990	$	479,633

____________________

*As adjusted to reflect the impact of the adoption of ASC 842. See Note 1 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for a summary of the adjustments.

# Not meaningful

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


		Three Months Ended September 30,							Three Months Ended September 30,
		2022		2021		Change			2023		2022		Change
Cost of revenue	Cost of revenue	$	1,129	$	364	210.2	%	Cost of revenue	$	2,169	$	1,129	92.1	%
Selling, general and administrative	Selling, general and administrative	3,288		3,198		2.8	%	Selling, general and administrative	7,094		3,288		115.8	%
Research and development	Research and development	323		5		6360.0	%	Research and development	724		323		124.1	%
Total stock-based compensation expense	Total stock-based compensation expense	$	4,740	$	3,567	32.9	%	Total stock-based compensation expense	$	9,987	$	4,740	110.7	%


		Nine Months Ended September 30,							Nine Months Ended September 30,
		2022		2021		Change			2023		2022		Change
Cost of revenue	Cost of revenue	$	2,956	$	1,383	113.7	%	Cost of revenue	$	5,676	$	2,956	92.0	%
Selling, general and administrative	Selling, general and administrative	8,984		6,647		35.2	%	Selling, general and administrative	17,647		8,984		96.4	%
Research and development	Research and development	735		198		271.2	%	Research and development	1,923		735		161.6	%
Total stock-based compensation expense	Total stock-based compensation expense	$	12,675	$	8,228	54.0	%	Total stock-based compensation expense	$	25,246	$	12,675	99.2	%

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Revenue

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


		Three Months Ended September 30,						Percentage of Revenue					Three Months Ended September 30,						Percentage of Revenue
		2022		2021		Change		2022		2021			2023		2022		Change		2023		2022
Nucleic Acid Production	Nucleic Acid Production	$	174,881	$	182,901	(4.4)	%	91.4	%	89.3	%	Nucleic Acid Production	$	51,228	$	174,881	(70.7)	%	76.6	%	91.4	%
Biologics Safety Testing	Biologics Safety Testing	16,382		16,626		(1.5)	%	8.6	%	8.1	%	Biologics Safety Testing	15,637		16,382		(4.5)	%	23.4	%	8.6	%
Protein Detection		—		5,283		#		—	%	2.6	%

Total revenue	Total revenue	$	191,263	$	204,810	(6.6)	%	100.0	%	100.0	%	Total revenue	$	66,865	$	191,263	(65.0)	%	100.0	%	100.0	%

Nine Months Ended September 30, Percentage of Revenue
2022 2021 Change 2022 2021
Nucleic Acid Production $ 623,779 $ 499,354 24.9 % 92.0 % 87.5 %
Biologics Safety Testing 54,509 52,483 3.9 % 8.0 % 9.2 %
Protein Detection — 18,959 # — % 3.3 %
Total revenue $ 678,288 $ 570,796 18.8 % 100.0 % 100.0 %

~~____________________~~

~~# Not meaningful~~


	Nine Months Ended September 30,						Percentage of Revenue
	2023		2022		Change		2023		2022
Nucleic Acid Production	$	165,944	$	623,779	(73.4)	%	77.3	%	92.0	%
Biologics Safety Testing	48,860		54,509		(10.4)	%	22.7	%	8.0	%

Total revenue	$	214,804	$	678,288	(68.3)	%	100.0	%	100.0	%

Comparison of Three Months Ended September 30, ~~2022~~2023 and ~~2021~~2022

Total revenue was ~~$191.3~~$66.9 million for the three months ended September 30, ~~2022~~2023 compared to ~~$204.8 million for the three months ended September 30, 2021, representing a decrease of $13.5 million, or 6.6%.~~

~~Nucleic Acid Production revenue decreased from $182.9 million for the three months ended September 30, 2021 to $174.9~~$191.3 million for the three months ended September 30, 2022, representing a decrease of ~~$8.0~~$124.4 million, or ~~4.4%~~65.0%.

Nucleic Acid Production revenue decreased from $174.9 million for the three months ended September 30, 2022 to $51.2 million for the three months ended September 30, 2023, representing a decrease of $123.7 million, or 70.7%. The decrease in Nucleic Acid Production revenue was primarily driven by decreased revenue from our proprietary CleanCap analogs as demand decreased from COVID-19 vaccine manufacturers. For the three months ended September 30, 2023, we estimate that approximately $14.9 million, or 60.4%, of our $24.7 million CleanCap revenue was a result of customer demand attributable to COVID-19 vaccines or other COVID-19 related commercial products or developmental programs. For the three months ended September 30, 2022, we estimate that approximately $126.5 million, or 92.7%, of our $136.5 million CleanCap revenue was a result of customer demand attributable to COVID-19 vaccines or other COVID-19 related commercial products or developmental programs. ~~For~~

Biologics Safety Testing revenue decreased from $16.4 million for the three months ended September 30, ~~2021,~~2022 to $15.6 million for the three months ended September 30, 2023, representing a decrease of $0.7 million, or 4.5%. The decrease from the prior period was not significant.

Comparison of Nine Months Ended September 30, 2023 and 2022

Total revenue was $214.8 million for the nine months ended September 30, 2023 compared to $678.3 million for the nine months ended September 30, 2022, representing a decrease of $463.5 million, or 68.3%.

Nucleic Acid Production revenue decreased from $623.8 million for the nine months ended September 30, 2022 to $165.9 million for the nine months ended September 30, 2023, representing a decrease of $457.8 million, or 73.4%. The decrease in Nucleic Acid Production revenue was primarily driven by decreased revenue from our proprietary CleanCap analogs as demand decreased from COVID-19 vaccine manufacturers. For the nine months ended September 30, 2023, we estimate that approximately ~~$131.3~~$42.4 million, or ~~85.5%~~52.4%, of our ~~$153.6~~$80.9 million CleanCap revenue was a result of customer demand attributable to COVID-19 vaccines or other COVID-19 related commercial products or developmental programs.

Biologics Safety Testing revenue decreased from $16.6 million for the three months ended September 30, 2021 to $16.4 million for the three months ended September 30, 2022, representing a decrease of $0.2 million, or 1.5%. The decrease from the prior period was not significant.

~~There was no Protein Detection revenue for the three months ended September 30, 2022 due to the sale of our Protein Detection business segment, which was completed in early September 2021.~~

~~Comparison of Nine Months Ended September 30, 2022 and 2021~~

Total revenue was $678.3 million for the nine months ended September 30, 2022 compared to $570.8 million for the nine months ended September 30, 2021, representing an increase of $107.5 million, or 18.8%.

Nucleic Acid Production revenue increased from $499.4 million for the nine months ended September 30, 2021 to $623.8 million for the nine months ended September 30, 2022, representing an increase of $124.4 million, or 24.9%. The increase in Nucleic Acid Production revenue was driven by demand for our proprietary CleanCap analogs as COVID-19 vaccine manufacturers scaled production earlier in the year, and ongoing demand for highly modified RNA products as this technology becomes incorporated into more therapeutic and vaccine development programs for a variety of indications. For the nine months ended September 30, 2022, we estimate that approximately $476.2 million, or 93.2%, of our $511.0 million CleanCap revenue was a result of customer demand attributable to COVID-19 vaccines or other COVID-19 related commercial products or developmental programs. For the nine months ended September 30, 2021, we estimate that approximately $377.6 million, or 91.7%, of our $411.8 million CleanCap revenue was a result of customer demand attributable to COVID-19 vaccines or other COVID-19 related commercial products or developmental programs.

~~Table of Contents~~

Biologics Safety Testing revenue ~~increased~~decreased from ~~$52.5 million for the nine months ended September 30, 2021 to~~ $54.5 million for the nine months ended September 30, 2022 ~~representing an increase of $2.0~~to $48.9 million ~~or 3.9%. The increase was driven by higher demand as the result of growth in the underlying markets supporting cell and gene therapies, biosimilar and other biologic programs.~~

~~There was no Protein Detection revenue~~ for the nine months ended September 30, ~~2022~~2023, representing a decrease of $5.6 million, or 10.4%. The decrease from the prior period was primarily due to an industry-wide weak demand environment and slowdowns in biologics manufacturing in the ~~sale of~~Asia Pacific region, which continued to impact demand for our ~~Protein Detection business segment, which was completed in early September 2021.~~HCP ELISA kits.

Segment Information

Management has determined that adjusted earnings before interest, tax, depreciation and amortization is the profit or loss measure used to make resource allocation decisions and evaluate segment performance. Adjusted EBITDA assists management in comparing the segment performance on a consistent basis for purposes of business decision-making by removing the impact

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of certain items that management believes do not directly reflect the core operations and, therefore, are not included in measuring segment performance. We define Adjusted EBITDA as net (loss) income before interest, taxes, depreciation and amortization, certain non-cash items and other adjustments that we do not consider in our evaluation of ongoing operating performance from period to period. Corporate costs, net of eliminations, are managed on a standalone basis and are not allocated to segments.

We do not allocate assets to our reportable segments as they are not included in the review performed by our Chief Operating Decision Maker for purposes of assessing segment performance and allocating resources.

As of September 30, ~~2022,~~2023, all of our long-lived assets were located within the United States.

The following schedule includes revenue and adjusted EBITDA for each of our reportable operating segments (in thousands)~~. We have revised our presentation for~~:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue:
Nucleic Acid Production	$	51,228	$	174,881	$	165,944	$	623,786
Biologics Safety Testing	15,638		16,382		48,863		54,509
Total reportable segments’ revenue	66,866		191,263		214,807		678,295
Intersegment eliminations	(1)		—		(3)		(7)
Total	$	66,865	$	191,263	$	214,804	$	678,288

Segment adjusted EBITDA:
Nucleic Acid Production	$	16,591	$	133,816	$	58,656	$	502,906
Biologics Safety Testing	11,246		12,997		35,307		43,631
Total reportable segments’ adjusted EBITDA	27,837		146,813		93,963		546,537
Reconciliation of total reportable segments’ adjusted EBITDA to (loss) income before income taxes
Amortization	(6,870)		(6,254)		(20,487)		(18,033)
Depreciation	(4,071)		(1,857)		(8,966)		(5,604)
Interest expense	(11,637)		(3,136)		(30,492)		(10,234)
Interest income	7,432		—		20,268		—
Corporate costs, net of eliminations	(15,937)		(14,296)		(49,188)		(38,549)
Other adjustments:
Acquisition contingent consideration	(2,385)		—		(69)		7,800
Acquisition integration costs	(3,268)		(2,760)		(9,198)		(10,642)

Stock-based compensation	(9,987)		(4,740)		(25,246)		(12,675)


Merger and acquisition related expenses	(46)		—		(3,708)		(1,195)
Financing costs	—		(7)		—		(1,071)
Acquisition related tax adjustment	77		—		(1,370)		(1,264)
Tax Receivable Agreement liability adjustment	(1,007)		—		(2,342)		2,340

Other	(701)		—		(1,615)		(1,814)
(Loss) income before income taxes	(20,563)		113,763		(38,450)		455,596
Income tax (benefit) expense	5,461		(14,110)		10,057		(52,362)
Net (loss) income	$	(15,102)	$	99,653	$	(28,393)	$	403,234

During the ~~prior periods below to remove the presentation of Total Adjusted EBITDA~~three and ~~reconcile the total of our reportable segments’ measure of profit or loss to income before income taxes, in addition to net income,~~nine months ended September 30, 2023 and removed corporate costs, net of eliminations from total reportable segments’ adjusted EBITDA and included such amounts in the reconciliation to income before income taxes. Additionally, we have revised our presentation for the prior

~~Table of Contents~~

~~periods below of our total reportable segments’ revenue, in which we removed intersegment eliminations from our total reportable segment’s revenue.~~

~~____________________~~

*~~As adjusted to reflect the impact of the adoption of ASC 842. See Note 1 for a summary of the adjustments.~~

~~During~~ the nine months ended September 30, 2022, intersegment revenue was immaterial between the Nucleic Acid Production and Biologics Safety Testing segments. There was no intersegment revenue during the three months ended September 30, 2022. During the three and nine months ended September 30, 2021, intersegment revenue was $0.2 million and $0.6 million, respectively, between the Nucleic Acid Production and Protein Detection segments. TheAny intersegment sales and the related gross margin on inventory recorded at the end of the period are eliminated for consolidation purposes. Internal selling prices for intersegment sales are consistent with the segment’s normal retail price offered to external parties. There was no commission expense recognized for intersegment sales for each of the three and nine months ended September 30, ~~2022~~2023 and ~~2021.~~

2022.

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Non-GAAP Financial Measures

Adjusted EBITDA

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021 (as adjusted)*		2022		2021 (as adjusted)*			2023		2022		2023		2022
Net income		$	99,653	$	132,177	$	403,234	$	342,139
Net (loss) income										Net (loss) income	$	(15,102)	$	99,653	$	(28,393)	$	403,234
Add:	Add:									Add:
Amortization	Amortization	6,254		4,604		18,033		14,685		Amortization	6,870		6,254		20,487		18,033
Depreciation	Depreciation	1,857		1,797		5,604		4,668		Depreciation	4,071		1,857		8,966		5,604
Interest expense	Interest expense	3,136		7,685		10,234		23,238		Interest expense	11,637		3,136		30,492		10,234
Income tax expense		14,110		18,842		52,362		43,937
Interest income										Interest income	(7,432)		—		(20,268)		—
Income tax (benefit) expense										Income tax (benefit) expense	(5,461)		14,110		(10,057)		52,362
EBITDA	EBITDA	125,010		165,105		489,467		428,667		EBITDA	(5,417)		125,010		1,227		489,467
Acquisition contingent consideration (1)	Acquisition contingent consideration (1)	—		—		(7,800)		—		Acquisition contingent consideration (1)	2,385		—		69		(7,800)
Acquisition integration costs (2)	Acquisition integration costs (2)	2,760		21		10,642		38		Acquisition integration costs (2)	3,268		2,760		9,198		10,642

Stock-based compensation (3)	Stock-based compensation (3)	4,740		3,567		12,675		8,228		Stock-based compensation (3)	9,987		4,740		25,246		12,675
Gain on sale of business (4)		—		(11,249)		—		(11,249)

Merger and acquisition related expenses (5)		—		(366)		1,195		1,496
Financing costs (6)		7		1,034		1,071		2,092
Acquisition related tax adjustment (7)		—		—		1,264		—
Tax Receivable Agreement liability adjustment (8)		—		(3,246)		(2,340)		(9,132)
Other (9)		—		—		1,814		—

Merger and acquisition related expenses (4)										Merger and acquisition related expenses (4)	46		—		3,708		1,195
Financing costs (5)										Financing costs (5)	—		7		—		1,071
Acquisition related tax adjustment (6)										Acquisition related tax adjustment (6)	(77)		—		1,370		1,264
Tax Receivable Agreement liability adjustment (7)										Tax Receivable Agreement liability adjustment (7)	1,007		—		2,342		(2,340)

Other (8)										Other (8)	701		—		1,615		1,814
Adjusted EBITDA	Adjusted EBITDA	$	132,517	$	154,866	$	507,988	$	420,140	Adjusted EBITDA	$	11,900	$	132,517	$	44,775	$	507,988

____________________

(1)Refers to the change in estimated fair value of ~~performance payments~~contingent consideration related to ~~the acquisition of MyChem, which was~~ completed ~~in January 2022.~~acquisitions.

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

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

(4)Refers to ~~the gain on the sale of Vector, which was completed in September 2021.~~

~~(5)Refers to~~ diligence, legal, accounting, tax and consulting fees incurred associated with acquisitions that were pursued but not consummated.

~~(6)~~(5)Refers to transaction costs related to the refinancing of our long-term debt ~~and costs from our secondary offering~~ that are not ~~capitalizable or cannot be offset against proceeds from such transactions.~~capitalizable.

~~(7)~~(6)Refers to non-cash (income) expense associated with adjustments to the indemnification asset recorded in connection with the acquisition of ~~MyChem.~~MyChem, LLC (“MyChem”), which was completed in January 2022.

~~(8)~~(7)Refers ~~to the gain related~~ to the adjustment of the Tax Receivable Agreement liability primarily due to changes in our estimated state apportionment and the corresponding ~~reduction~~change of our estimated state tax rate.

~~(9)~~(8)~~Refers~~For the three and nine months ended September 30, 2023, refers to severance payments, legal settlement amounts, inventory step-up charges in connection with the acquisition of Alphazyme, certain working capital and other adjustments related to the acquisition of MyChem, and other non-recurring costs. For the nine months ended September 30, 2022, refers to the loss recognized during the period associated with certain working capital and other adjustments ~~for~~related to the sale of Vector Laboratories, Inc., which was completed in September 2021, and the loss incurred on extinguishment of debt.

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Adjusted Free Cash Flow

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021 (as adjusted)*		2022		2021 (as adjusted)*			2023		2022		2023		2022
Adjusted EBITDA	Adjusted EBITDA	$	132,517	$	154,866	$	507,988	$	420,140	Adjusted EBITDA	$	11,900	$	132,517	$	44,775	$	507,988
Capital expenditures (1)	Capital expenditures (1)	(13,763)		(2,195)		(23,406)		(10,060)		Capital expenditures (1)	(11,521)		(15,635)		(39,785)		(28,355)
Adjusted Free Cash Flow	Adjusted Free Cash Flow	$	118,754	$	152,671	$	484,582	$	410,080	Adjusted Free Cash Flow	$	379	$	116,882	$	4,990	$	479,633

____________________

(1)We define capital expenditures as: (i) purchases of property and equipment which are included in cash flows from investing activities, ~~accounts payable and accrued expenses,~~ offset by government funding ~~recognized;~~received; and (ii) construction costs determined to be lessor improvements recorded as prepaid lease payments ~~including~~and right-of-use assets, offset by government funding received. We revised our capital expenditures definition in the quarter ended March 31, 2023 to exclude the portions ~~included~~ in accounts payable and accrued ~~expenses, offset by government funding recognized.~~expenses.

Operating Expenses

Operating expenses included the following for the periods presented (in thousands, except percentages):


		Three Months Ended September 30,						Percentage of Revenue					Three Months Ended September 30,						Percentage of Revenue
		2022		2021 (as adjusted)*		Change		2022		2021 (as adjusted)*			2023		2022		Change		2023		2022
Cost of revenue	Cost of revenue	$	38,176	$	32,221	18.5	%	20.0	%	15.7	%	Cost of revenue	$	36,686	$	38,176	(3.9)	%	54.9	%	20.0	%
Selling, general and administrative	Selling, general and administrative	30,795		26,512		16.2	%	16.1	%	12.9	%	Selling, general and administrative	38,864		30,795		26.2	%	58.1	%	16.1	%
Research and development	Research and development	5,389		1,946		176.9	%	2.8	%	1.0	%	Research and development	4,347		5,389		(19.3)	%	6.5	%	2.8	%
Change in estimated fair value of contingent consideration												Change in estimated fair value of contingent consideration	2,385		—		*		3.6	%	—	%

Gain on sale of business		—		(11,249)		#		—	%	(5.5)	%

Total operating expenses	Total operating expenses	$	74,360	$	49,430	50.4	%	38.9	%	24.1	%	Total operating expenses	$	82,282	$	74,360	10.7	%	123.1	%	38.9	%


		Nine Months Ended September 30,						Percentage of Revenue					Nine Months Ended September 30,						Percentage of Revenue
		2022		2021 (as adjusted)*		Change		2022		2021 (as adjusted)*			2023		2022		Change		2023		2022
Cost of revenue	Cost of revenue	$	115,704	$	101,423	14.1	%	17.1	%	17.8	%	Cost of revenue	$	113,635	$	115,704	(1.8)	%	52.9	%	17.1	%
Selling, general and administrative	Selling, general and administrative	92,056		74,483		23.6	%	13.6	%	13.0	%	Selling, general and administrative	112,912		92,056		22.7	%	52.6	%	13.6	%
Research and development	Research and development	13,358		6,035		121.3	%	2.0	%	1.1	%	Research and development	12,686		13,358		(5.0)	%	5.9	%	2.0	%
Change in estimated fair value of contingent consideration	Change in estimated fair value of contingent consideration	(7,800)		—		#		(1.2)	%	—	%	Change in estimated fair value of contingent consideration	69		(7,800)		(100.9)	%	0.0	%	(1.2)	%
Gain on sale of business		—		(11,249)		#		—	%	(2.0)	%

Total operating expenses	Total operating expenses	$	213,318	$	170,692	25.0	%	31.5	%	29.9	%	Total operating expenses	$	239,302	$	213,318	12.2	%	111.4	%	31.5	%

____________________

*~~As adjusted~~Not meaningful

Cost of Revenue

Comparison of Three Months Ended September 30, 2023 and 2022

Cost of revenue decreased by $1.5 million from $38.2 million for the three months ended September 30, 2022 to ~~reflect~~$36.7 million for the ~~impact~~three months ended September 30, 2023, or 3.9%. The decrease in cost of revenue was primarily attributable to a decrease of $11.9 million in direct product costs driven by decreased revenues and a decrease of $0.8 million in professional service fees. These were partially offset by an increase of $5.3 million due to lower direct labor and overhead expense absorption, an increase of $4.3 million in personnel costs primarily driven by additional headcount to support expanded manufacturing capacity and additional headcount related to the acquisition of Alphazyme, an increase of $1.0 million in depreciation and amortization expense due to new equipment and newly acquired intangible assets, and an increase of $0.6 million in facilities costs driven by new facilities.

Gross profit decreased by $122.9 million from $153.1 million for the three months ended September 30, 2022 to $30.2 million for the three months ended September 30, 2023. The decrease in the gross profit margin as a percentage of sales was primarily

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attributable to a decrease in volume, unfavorable product mix shift, and an overall increase in the cost of revenue as a percentage of sales as the result of higher labor and facility costs, depreciation and amortization, and lower manufacturing throughput and related absorption which increased the direct labor and overhead expenses incurred into cost of revenue in the period.

Comparison of Nine Months Ended September 30, 2023 and 2022

Cost of revenue decreased by $2.1 million from $115.7 million for the nine months ended September 30, 2022 to $113.6 million for the nine months ended September 30, 2023, or 1.8%. The decrease in cost of revenue compared to the prior period was primarily attributable to a decrease of $31.3 million in direct product costs driven by decreased revenues and a decrease of $0.5 million in supplies and materials. These were partially offset by an increase of $13.8 million in personnel costs primarily driven by additional headcount to support expanded manufacturing capacity and additional headcount related to the acquisition of Alphazyme, an increase of $11.6 million due to lower direct labor and overhead expense absorption, an increase of $3.2 million in depreciation and amortization expense due to new equipment and newly acquired intangible assets, and an increase of $1.1 million in facilities costs driven by new facilities.

Gross profit decreased by $461.4 million from $562.6 million for the nine months ended September 30, 2022 to $101.2 million for the nine months ended September 30, 2023. The decrease in the gross profit margin as a percentage of sales was primarily attributable to a decrease in volume, unfavorable product mix shift, an overall increase in the cost of revenue as a percentage of sales as the result of higher labor and facility costs, depreciation and amortization, and lower manufacturing throughput and related absorption which increased the direct labor and overhead expenses incurred into cost of revenue in the period.

Selling, General and Administrative

Comparison of Three Months Ended September 30, 2023 and 2022

Selling, general and administrative expenses increased by $8.1 million from $30.8 million for the three months ended September 30, 2022 to $38.9 million for the three months ended September 30, 2023, or 26.2%. The increase was primarily driven by an increase of $6.3 million in personnel costs driven by additional headcount to support the Company’s long-term strategic growth initiatives and an increase of $1.8 million in depreciation expense driven by new facilities.

Comparison of Nine Months Ended September 30, 2023 and 2022

Selling, general and administrative expenses increased by $20.9 million from $92.1 million for the nine months ended September 30, 2022 to $112.9 million for the nine months ended September 30, 2023, or 22.7%. The increase was primarily driven by an increase of $20.2 million in personnel costs driven by additional headcount to support the Company’s long-term strategic growth initiatives.

Research and Development

Comparison of Three Months Ended September 30, 2023 and 2022

Research and development expenses decreased by $1.0 million from $5.4 million for the three months ended September 30, 2022 to $4.3 million for the three months ended September 30, 2023, or 19.3%. The decrease in expenses compared to the prior period was primarily driven by a decrease of $0.8 million in personnel costs and a decrease of $0.5 million in professional services fees. These decreases were partially offset by an increase of $0.2 million in facilities costs driven by new facilities.

Comparison of Nine Months Ended September 30, 2023 and 2022

Research and development expenses decreased by $0.7 million from $13.4 million for the nine months ended September 30, 2022 to $12.7 million for the nine months ended September 30, 2023, or 5.0%. The decrease in expenses compared to the prior period was not significant.

Change in Estimated Fair Value of Contingent Consideration

Comparison of Three Months Ended September 30, 2023 and 2022

The increase in change in estimated fair value of contingent consideration of $2.4 million for the three months ended September 30, 2023 was due to the increase in estimated fair value of the ~~adoption~~liability for the contingent payments associated with the acquisition of ~~ASC 842.~~Alphazyme. This was due to a change in estimate associated with Alphazyme revenue projections relative to defined revenue targets or thresholds that would trigger a contingent payment per the Alphazyme SPA. See ~~Note~~Notes 2 and 4 to the

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condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Comparison of Nine Months Ended September 30, 2023 and 2022

The decrease in change in estimated fair value of contingent consideration of $7.9 million for the nine months ended September 30, 2023 was primarily due to the net change in estimated fair value of the liability for the contingent payments associated with the acquisition of MyChem. This was due to a change in estimate associated with revenue projections relative to defined revenue targets or thresholds that would trigger contingent payments per the MyChem SPA. See Notes 2 and 4 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for ~~a summary of the adjustments.~~

~~# Not meaningful~~

~~Cost of Revenue~~

~~Comparison of Three Months Ended September 30, 2022 and 2021~~

Cost of revenue increased by $6.0 million from $32.2 million for the three months ended September 30, 2021 to $38.2 million for the three months ended September 30, 2022, or 18.5%. The increase in cost of revenue was primarily attributable to higher inventory scrap charges of $4.1 million compared to the prior period and a $1.1 million increase in reserve for excess and obsolete inventory. Gross profit decreased by $19.5 million from $172.6 million for the three months ended September 30,

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2021 to $153.1 million for the three months ended September 30, 2022. The decrease in the gross profit margin as a percentage of sales was primarily attributable to a decrease in volume and unfavorable product mix shift, higher inventory scrap charges, increase in reserve for excess and obsolete inventory, and increase in amortization expense for intangible assets.

~~Comparison of Nine Months Ended September 30, 2022 and 2021~~

Cost of revenue increased by $14.3 million from $101.4 million for the nine months ended September 30, 2021 to $115.7 million for the nine months ended September 30, 2022, or 14.1%. The increase in cost of revenue was primarily attributable to an increase in amortization expense for intangible assets of $6.5 million, higher inventory scrap charges of $5.4 million compared to the prior period, and a $1.8 million increase in reserve for excess and obsolete inventory. Gross profit increased by $93.2 million from $469.4 million for the nine months ended September 30, 2021 to $562.6 million for the nine months ended September 30, 2022. The increase in the gross profit margin as a percentage of sales was primarily attributable to a favorable product mix shift, partially offset by inventory period costs incurred as a result of deficiencies in quality control during the period, an increase in the reserve for excess and obsolete inventory, and an increase in amortization expense for intangible assets.

~~Selling, General and Administrative~~

~~Comparison of Three Months Ended September 30, 2022 and 2021~~

Selling, general and administrative expenses increased by $4.3 million from $26.5 million for the three months ended September 30, 2021 to $30.8 million for the three months ended September 30, 2022, or 16.2%. The increase was primarily driven by a $1.9 million increase in personnel costs, a $0.5 million increase in marketing and consulting services, a $0.4 million increase in advertising and promotion expenses, a $0.3 million increase in software and licenses expenses, a $0.3 million increase in corporate insurance costs, and a $0.3 million increase in bad debt expense.

~~Comparison of Nine Months Ended September 30, 2022 and 2021~~

Selling, general and administrative expenses increased by $17.6 million from $74.5 million for the nine months ended September 30, 2021 to $92.1 million for the nine months ended September 30, 2022, or 23.6%. The increase was primarily driven by a $5.9 million increase in personnel costs, $3.4 million of transaction costs associated with the acquisition of MyChem, a $2.2 million increase in marketing and consulting services, $1.6 million from working capital adjustments related to the sale of Vector in September 2021, a $1.1 million increase in software and licenses expenses, a $1.1 million increase in advertising and promotion expenses, a $0.9 million increase in bad debt expense, $0.9 million of fees relating to the debt refinancing transaction, and a $0.6 million increase in corporate insurance costs.

~~Research and Development~~

~~Comparison of Three Months Ended September 30, 2022 and 2021~~

Research and development expenses increased by $3.4 million from $1.9 million for the three months ended September 30, 2021 to $5.4 million for the three months ended September 30, 2022, or 176.9%. The increase was primarily driven by $2.5 million in personnel costs relating to retention payment accruals associated with the acquisition of MyChem and $1.0 million in personnel costs relating to overall company growth, promotions and merit increases.

~~Comparison of Nine Months Ended September 30, 2022 and 2021~~

Research and development expenses increased by $7.3 million from $6.0 million for the nine months ended September 30, 2021 to $13.4 million for the nine months ended September 30, 2022, or 121.3%. The increase was primarily driven by $6.8 million in personnel costs relating to retention payment accruals associated with the acquisition of MyChem.

~~Change in Estimated Fair Value of Contingent Consideration~~

~~Comparison of Nine Months Ended September 30, 2022 and 2021~~

The change in estimated fair value of contingent consideration of $7.8 million for the nine months ended September 30, 2022 was due to the decrease in estimated fair value of the liability during the second quarter of 2022 for the contingent payments associated with the acquisition of MyChem. This was due to a change in estimate associated with MyChem revenue projections reaching thresholds that would trigger a contingent payment per the MyChem SPA.

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~~Gain on Sale of Business~~

~~Comparison of Three and Nine Months Ended September 30, 2022 and 2021~~

~~The gain on sale of business of $11.2 million for the three and nine months ended September 30, 2021was from the sale of Vector in September 2021.~~additional information.

Other Income (Expense)

Other income (expense) included the following for the periods presented (in thousands, except percentages):


		Three Months Ended September 30,						Percentage of Revenue					Three Months Ended September 30,						Percentage of Revenue
		2022		2021 (as adjusted)*		Change		2022		2021 (as adjusted)*			2023		2022		Change		2023		2022
Interest expense	Interest expense	$	(3,136)	$	(7,685)	(59.2)	%	(1.6)	%	(3.7)	%	Interest expense	$	(11,637)	$	(3,136)	271.1	%	(17.4)	%	(1.6)	%
Interest income												Interest income	7,432		—		*		11.1	%	—	%

Change in payable to related parties pursuant to the Tax Receivable Agreement	Change in payable to related parties pursuant to the Tax Receivable Agreement	—		3,246		#		—	%	1.6	%	Change in payable to related parties pursuant to the Tax Receivable Agreement	(1,007)		—		*		(1.5)	%	—	%
Other expense		(4)		78		#		0.0	%	0.0	%
Other income (expense)												Other income (expense)	66		(4)		*		0.1	%	0.0	%
Total other expense	Total other expense	$	(3,140)	$	(4,361)	(28.0)	%	(1.6)	%	(2.1)	%	Total other expense	$	(5,146)	$	(3,140)	63.9	%	(7.7)	%	(1.6)	%


		Nine Months Ended September 30,						Percentage of Revenue					Nine Months Ended September 30,						Percentage of Revenue
		2022		2021 (as adjusted)*		Change		2022		2021 (as adjusted)*			2023		2022		Change		2023		2022
Interest expense	Interest expense	$	(10,234)	$	(23,238)	(56.0)	%	(1.5)	%	(4.1)	%	Interest expense	$	(30,492)	$	(10,234)	197.9	%	(14.2)	%	(1.5)	%
Interest income												Interest income	20,268		—		*		9.4	%	—	%
Loss on extinguishment of debt	Loss on extinguishment of debt	(208)		—		#		0.0	%	—	%	Loss on extinguishment of debt	—		(208)		*		—	%	0.0	%
Change in payable to related parties pursuant to the Tax Receivable Agreement	Change in payable to related parties pursuant to the Tax Receivable Agreement	2,340		9,132		(74.4)	%	0.3	%	1.6	%	Change in payable to related parties pursuant to the Tax Receivable Agreement	(2,342)		2,340		(200.1)	%	(1.1)	%	0.3	%
Other expense		(1,272)		78		#		(0.2)	%	0.0	%
Other income (expense)												Other income (expense)	(1,386)		(1,272)		9.0	%	(0.6)	%	(0.2)	%
Total other expense	Total other expense	$	(9,374)	$	(14,028)	(33.2)	%	(1.4)	%	(2.5)	%	Total other expense	$	(13,952)	$	(9,374)	48.8	%	(6.5)	%	(1.4)	%

____________________

# Not meaningful

Comparison of Three Months Ended September 30, ~~2022~~2023 and ~~2021~~2022

Other expense was ~~$4.4 million for the three months ended September 30, 2021 compared to~~ $3.1 million for the three months ended September 30, 2022 compared to $5.1 million for the three months ended September 30, 2023, representing ~~a decrease~~an increase of ~~$1.2~~$2.0 million, or ~~28.0%~~63.9%. The ~~decrease~~overall increase in Other expense was primarily attributable to ~~a $4.5 million decrease~~an increase in interest expense ~~primarily due to a $5.1~~of $8.5 million ~~change~~which was driven by higher interest rates in ~~fair value of~~ the ~~interest rate cap.~~current year. The ~~decrease~~increase was ~~partially offset~~further driven by a ~~$3.2~~$1.0 million ~~decrease in gain~~loss recognized related to the ~~payable to related parties pursuant to a~~ Tax Receivable Agreement as a result of changes in our estimated state income tax apportionment and ~~the~~a corresponding ~~reduction of~~change in our estimated state income tax rate. These increases were further offset by a $7.4 million increase in interest income earned on funds deposited into money market funds and interest bearing deposits held at financial institutions in 2023.

Comparison of Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022

Other expense was ~~$14.0 million for the nine months ended September 30, 2021 compared to~~ $9.4 million for the nine months ended September 30, 2022 compared to $14.0 million for the nine months ended September 30, 2023, representing ~~a decrease~~an increase of ~~$4.7~~$4.6 million, or ~~33.2%~~48.8%. The ~~decrease~~overall increase in Other expense was primarily attributable to ~~a $13.0 million decrease~~an increase in interest expense ~~due to~~of $20.3 million which was driven by higher interest rates in the current year. The increase was further driven by a ~~$9.7~~$4.7 million change in fair value of the interest rate cap and $3.3 million decrease in interest expense driven by the lower interest rates from the debt refinancing transaction. This was partially offset by a $6.8 million decrease in gain (loss) recognized related to the ~~payable to related parties pursuant to a~~ Tax Receivable Agreement as a result of changes in our estimated state income tax apportionment and ~~the~~a corresponding ~~reduction of~~change in our estimated state income tax ~~rate,~~rate. These increases were further offset by a $20.3 million increase in interest income for interest earned on our new money market funds and ~~an increase of $1.3 million in other expense relating to adjustments to the indemnification asset recorded in connection with the acquisition of MyChem.~~

~~Relationship with GTCR, LLC (“GTCR”)~~

~~Prior to our initial public offering (“IPO”), we utilized GTCR for certain services pursuant to an advisory services agreement. Under this agreement, GTCR provided us with~~interest bearing deposits held at financial ~~and management consulting services in the areas of corporate strategy,~~institutions.

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budgeting for future corporate investments, acquisition and divestiture strategies, and debt and equity financings. The advisory services agreement provided that we pay a $0.1 million quarterly management fee toRelationship with GTCR, ~~for these services. We also reimbursed~~LLC (“GTCR”)

As of September 30, 2023, investment entities affiliated with GTCR ~~for out-of-pocket expenses incurred while providing these services. The advisory services agreement also provided that certain~~collectively controlled approximately 56% of the voting power of our ~~subsidiaries pay placement fees~~common stock, which enables GTCR to ~~GTCR~~control the vote of ~~1.0%~~all matters submitted to a vote of our shareholders and to control the election of members of the ~~gross amount~~Board and all other corporate decisions.

We made distributions of ~~debt or equity financings. In connection with our IPO, this advisory services agreement was terminated.~~

As GTCR continues to have representation on our Board of Directors, we will continue to pay GTCR for any direct reimbursable expenses related to their Board activities. We paid GTCR insignificant amounts$9.6 million during the ~~three and~~ nine months ended September 30, ~~2022~~2023, and ~~2021. We may continue to engage GTCR from time to time, subject to compliance with our related party transactions policy.~~

~~We made distributions of~~ $36.8 million and $119.3 million during the three and nine months ended September 30, 2022, respectively, ~~and $50.1 million and $106.3 million during the three and nine months ended September 30, 2021, respectively,~~ for tax liabilities to MLSH 1, which is ~~primarily~~controlled by GTCR and is the only holder of LLC Units other than us and our wholly owned ~~by GTCR.~~subsidiaries. No such distributions were made during the three months ended September 30, 2023.

We are also a party to athe Tax Receivable Agreement, or TRA, with MLSH 1, ~~who~~which is primarily owned by GTCR, and MLSH 2 (see Note 1012 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q). The TRA provides for the payment by us to MLSH 1 and MLSH 2, collectively, of 85% of the amount of tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, from exchanges of LLC Units (together with the corresponding shares of Class B common stock) for Class A common stock, as a result of (i) certain increases in the tax basis of assets of Topco LLC and its subsidiaries resulting from purchases or exchanges of LLC Units, (ii) certain tax attributes of the entities acquired from MLSH 1 and MLSH 2 in connection with the Organizational Transactions, Topco LLC and subsidiaries of Topco LLC that existed prior to the IPO, and (iii) certain other tax benefits related to our entering into the TRA, including tax benefits attributable to payments that we make under the TRA (collectively, the “Tax Attributes”). Payment obligations under the TRA are not conditioned upon any Topco LLC unitholders maintaining a continued ownership interest in us or Topco LLC, and the rights of MLSH 1 and MLSH 2 under the TRA are assignable. There is no stated term for the TRA, and the TRA will continue until all tax benefits have been utilized or expired unless we exercise our right to terminate the TRA for an agreed-upon amount.

NoWe made payments ~~were made~~of $42.6 million to MLSH 1 orand MLSH 2 pursuant to the TRA during the nine months ended September 30, 2023, of which $0.4 million was related to interest. No payments were made during the three months ended September 30, 2023 or the three and nine months ended September 30, 2022. As of September 30, ~~2022,~~2023, our liability under the TRA was ~~$746.0~~$678.4 million.

Liquidity and Capital Resources

Overview

We have financed our operations primarily from cash flow from operations, borrowings under long-term debt agreements and, to a lesser extent, the sale of our Class A common stock.

As of September 30, ~~2022,~~2023, we had cash and cash equivalents of ~~$617.4~~$579.6 million and retained earnings of ~~$367.1~~$391.7 million. We had a net ~~income~~loss of ~~$99.7~~$15.1 million and ~~$403.2~~$28.4 million for the three and nine months ended September 30, ~~2022, respectively.~~2023. We also had positive cash flows from operations of ~~$436.6~~$118.4 million for the nine months ended September 30, ~~2022.~~2023.

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

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

We plan to utilize our existing cash on hand, together with cash generated from operations, primarily to fund our commercial and marketing activities associated with our products and services, continued research and development initiatives, ~~investments in or acquisitions of complementary or enhancing technologies or businesses,~~ and ongoing investments into our manufacturing facilities to create efficiencies and build capacity. We believe our cash on hand, cash generated from operations and continued access to our credit facilities, will be sufficient to satisfy our cash requirements over the next 12 months and beyond.

To the extent revenue from sales in our two remaining business segments continues to grow, we expect our accounts receivable and inventory balances to increase. Any increase in accounts receivable and inventory may not be completely offset by increases in accounts payable and accrued expenses, which could result in greater working capital requirements. Moreover, we have and will continue to incur additional costs associated with operating as a public company, including expenses related to legal, accounting, regulatory, exchange listing and regulatory compliance matters.

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As a result of our ownership of LLC Units in Topco LLC, the Company is subject to U.S. federal, state and local income taxes with respect to its allocable share of any taxable income of Topco LLC and is taxed at the prevailing corporate tax rates. In addition to tax expenses, we also will incur expenses related to our operations and we will be required to make payments under the TRA with MLSH 1 and MLSH 2. Due to the uncertainty of various factors, we cannot precisely quantify the likely tax benefits we will realize as a result of LLC Unit exchanges and the resulting amounts we are likely to pay out to LLC Unitholders of Topco LLC pursuant to the TRA; however, we estimate that such payments may be substantial. Assuming no changes in the relevant tax law, and that we earn sufficient taxable income to realize all tax benefits that are subject to the TRA, we expect that future payments under the TRA relating to the purchase by the Company of LLC Units from MLSH 1 and the tax attributes to be approximately ~~$746.0~~$678.4 million and to range over the next 1517 years from approximately ~~$34.7~~$4.2 million to ~~$63.0~~ $71.5

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million per year and to decline thereafter. Future payments in respect of subsequent exchanges or financings would be in addition to these amounts and are expected to be substantial. The foregoing numbers are estimates and the actual payments could differ materially. We expect to fund these payments using cash on hand and cash generated from operations.

As a result of a change of control, material breach, or our election to terminate the TRA early, (1) we could be required to make cash payments to MLSH 1 and MLSH 2 that are greater than the specified percentage of the actual benefits we ultimately realize in respect of the tax benefits that are subject to the TRA, and (2) we will be required to make an immediate cash payment equal to the present value of the anticipated future tax benefits that are the subject of the TRA, which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits. In these situations, our obligations under the TRA could have a material adverse effect on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations, or other changes of control. There can be no assurance that we will be able to adequately finance our payment obligations under the TRA.

In addition to payments to be made under the TRA, we are also required to make tax distributions to MLSH 1 pursuant to the LLC Operating Agreement for the portion of income passing through to them from Topco LLC. We made distributions of $9.6 million during the nine months ended September 30, 2023, and $36.8 million and $119.3 million during the three and nine months ended September 30, 2022, respectively, for tax liabilities to MLSH 1 under this agreement. No such distributions were made during the three months ended September 30, 2023.

Credit Agreement

The Credit Agreement among Intermediate, Cygnus and TriLink, as the borrowers, Topco LLC, as holdings, the lenders from time-to-time party thereto and Morgan Stanley Senior Funding, Inc., as administrative and collateral agent (as amended, supplemented or otherwise modified, the “Credit Agreement”), provides us with a term-loan facility (the “Term Loan”) totaling $600.0 million and a revolving credit facility (the “Revolving Credit Facility”) of $180.0 million for letters of credit and loans to be used for working capital and other general corporate financing purposes. Borrowings under the Credit Agreement are unconditionally guaranteed by Topco LLC, along with the existing and future material domestic subsidiaries of Topco LLC (subject to certain exceptions) as specified in the respective guaranty agreements, and are secured by a lien and security interest in substantially all of the assets of existing and future material domestic subsidiaries of Topco LLC that are loan parties.

In January 2022, the Company entered into an amendment (the “Amendment”) to ~~the Credit Agreement to: (i)~~ refinance the ~~existing $544.0 million aggregate principal balance on the First Lien Term Loan~~term loan and to ~~replace it with a new Tranche B Term Loan~~address the planned phase out of London Interbank Offered Rate (“~~Tranche B Term Loan”~~LIBOR”), ~~(ii) replace the LIBOR-based interest rate~~which is replaced with a Term Secured Overnight Financing Rate (“SOFR”) based rate, and (iii) reduce the interest rate margins applicable to the Term Loan and Revolving Credit Facilities under the Credit Agreement. The previous interest rate margin on the facilities was, with respect to each LIBOR-based loan, 3.75% to 4.25% and, with respect to each base rate-based loan, 2.75% to 3.25% (depending, in each case, on consolidated first lien leverage). Following the Amendment, the interest rate margin on the facilities is 3.00%, with respect to each Term SOFR-based loan, and 2.00%, with respect to each base rate-based loan. Further, the Amendment reduced the base rate floor for the term loans from 2.00% to 1.50%, sets the floor for Term SOFR-based term loans at 0.50% and sets the floor for Term SOFR-based revolving loans at 0.00%. No other significant terms under the Credit Agreement were changed in connection with the Amendment.

The Base Rate is defined in the Credit Agreement as the greatest of (i) the rate last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (ii) the NYFRB Rate plus 0.50% per annum, (iii) the Term SOFR Rate for a one month interest period plus 1.00% per annum, (iv) solely with respect to the Tranche B Term Loans, 1.50% per annum and (v) for any loans that are not Tranche B Term Loans, 1.00% per annum. The “Term SOFR Rate,” as defined in the Credit Agreement, means with respect to any Term SOFR Rate Borrowing and for any other tenor comparable to the applicable interest period, the Term SOFR Reference Rate at approximately 5:00 a.m., Chicago time, two U.S. Government Securities Business Days prior to the commencement of such tenor comparable to the applicable interest period, as such rate is published by the CME Term SOFR Administrator; provided that in no event shall the Term SOFR Rate for any interest period (i) for Tranche B Term Loans be less than 0.50% or (ii) for any other Loans, be less than 0.00%.

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borrow from time to time until October 2025, at which time all amounts borrowed must be repaid. Subject to certain exceptions and limitations, we are required to repay borrowings under the Tranche B Term Loan and Revolving Credit Facility with the proceeds of certain occurrences, such as the incurrence of debt, certain equity contributions and certain asset sales or dispositions.rate.

Commencing with the fiscal year ended December 31, 2021, and each fiscal year thereafter, the Credit Agreement requires that we make mandatory prepayments on the Tranche B Term Loan principal out of certain excess cash flow, subject to certain step-downs based on the Company’s first lien net leverage ratio. The mandatory prepayment shall be reduced to 25% or 0% of the calculated excess cash flow if the Company’s first lien net leverage ratio was equal to or less than 4.75:1.00 or 4.25:1.00, respectively; however, no prepayment is required to the extent excess cash flow calculated for the respective period is equal to or less than $10.0 million. As of September 30, ~~2022,~~2023, our first lien net leverage ratio was less than 4.25:1.00. Thus, a mandatory prepayment on the Tranche B Term Loan out of excess cash flow was not required.

Debt Covenants

The Credit Agreement includes financial covenants. One financial covenant is a consolidated first lien coverage ratio measured as of the last day of each fiscal quarter. Another financial covenant requires that, if as of the end of any fiscal quarter the aggregate amount of letters of credit obligations and borrowings under the Revolving Credit Facility outstanding as of the end of such fiscal quarter (excluding cash collateralized letters of credit obligations and letter of credit obligations in an aggregate amount not in excess of $5.0 million at any time outstanding ~~and for the first four fiscal quarters ending after October 2020, borrowings of revolving credit loans made before October 2020)~~ exceeds 35% of the aggregate amount of all Revolving Credit Commitments in effect as of such date, then the net leverage ratio of Intermediate may not be greater than 8.00 to 1.00. For purposes of this covenant, the net leverage ratio is calculated by dividing outstanding first lien indebtedness (net of cash) by Adjusted EBITDA over the preceding four fiscal quarters. ~~As of September 30, 2022, we were in compliance with these covenants.~~

The Credit Agreement also contains negative and affirmative covenants in addition to the financial ~~covenant,~~covenants, including covenants that restrict our ability to, among other things, incur or prepay certain indebtedness, pay dividends or distributions, dispose of assets, engage in mergers and consolidations, make acquisitions or other investments, and make changes in the nature of the business. The Credit Agreement contains certain events of default, including, without limitation, nonpayment of principal, interest or other obligations, violation of the covenants, insolvency, court ordered judgments and certain changes of control. The Credit Agreement also requires the Company to provide audited consolidated financial statements to the lenders no later than 120 days after year-end.

As of September 30, ~~2022,~~2023, we were in compliance with these covenants.

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As of September 30, 2023, the interest rate on the Tranche B Term Loan was ~~5.55%~~8.32%.

Tax Receivable Agreement

We are a party to the TRA with MLSH 1 and MLSH 2. The TRA provides for the payment by us to MLSH 1 and MLSH 2, collectively, of 85% of the amount of certain tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of the Organizational Transactions, IPO and any subsequent purchases or exchanges of LLC Units of Topco LLC. Based on our current projections of taxable income, and before deduction of any specially allocated depreciation and amortization, we anticipate having enough taxable income to utilize most of these tax benefits.

As of September 30, ~~2022,~~2023, our liability under the TRA was ~~$746.0~~$678.4 million, representing 85% of the calculated tax savings we anticipated being able to utilize in future years. During the three and nine months ended September 30, 2023, we recognized losses of $1.0 million and $2.3 million, respectively, in connection with a TRA liability adjustment resulting from a change in the expected tax to us under the TRA primarily due to changes in our estimated state apportionment and a corresponding change in our estimated state income tax rate. We may record additional liabilities under the TRA when LLC Units are exchanged in the future and as our estimates of the future utilization of the Tax Attributes, net operating losses and other tax benefits change. We expect to make payments under the TRA, to the extent they are required, within 125 days after the extended due date of our U.S. federal income tax return for such taxable year. Interest on such payment will begin to accrue from the due date (without extensions) of such tax return at a rate of LIBOR plus 100 basis points. Any late payments will continue to accrue interest at LIBOR plus 500 basis points until such payments are made.

The payment obligations under the TRA are obligations of Maravai LifeSciences Holdings, Inc. and not of Topco LLC. Although the actual timing and amount of any payments that may be made under the TRA will vary, we expect that the aggregate payments that we will be required to make to MLSH 1 and MLSH 2 will be substantial. Any payments made by us under the TRA will generally reduce the amount of overall cash flow that might have otherwise been available to us or to Topco LLC and, to the extent that we are unable to make payments under the TRA for any reason, the unpaid amounts will be deferred

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and will accrue interest until paid by us. We anticipate funding ordinary course payments under the TRA from cash flow from operations of Topco LLC and its subsidiaries, available cash and/or available borrowings under the Credit Agreement.

Cash Flows

The following table summarizes our cash flows for the periods presented (in thousands):

Nine Months Ended September 30,
2022 2021
(as adjusted)*
Net cash provided by (used in):
Operating activities $ 436,642 $ 309,827
Investing activities (249,092) 111,311
Financing activities (121,376) (109,469)
Effects of exchange rate changes on cash — 45
Net increase in cash $ 66,174 $ 311,714

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*As adjusted to reflect the impact of the adoption of ASC 842. See Note 1 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for a summary of the adjustments.


	Nine Months Ended September 30,
	2023		2022
Net cash provided by (used in):
Operating activities	$	118,434	$	436,642
Investing activities	(109,407)		(249,092)
Financing activities	(61,560)		(121,376)


Net (decrease) increase in cash and cash equivalents	$	(52,533)	$	66,174

Operating Activities

Net cash provided by operating activities for the nine months ended September 30, 2023 was $118.4 million, which was primarily attributable to a net cash inflow from the change in our operating assets and liabilities of $95.5 million, non-cash depreciation and amortization of $29.5 million, non-cash amortization of operating lease right-of-use assets of $6.3 million, non-cash amortization of deferred financing costs of $2.2 million, non-cash stock-based compensation of $25.2 million, and non-cash loss on the revaluation of liabilities under the TRA of $2.3 million. These were partially offset by a net loss of $28.4 million, and non-cash deferred income taxes of $9.8 million.

Net cash provided by operating activities for the nine months ended September 30, 2022 was $436.6 million, which was primarily attributable to a net income of $403.2 million, non-cash depreciation and amortization of $23.6 million, non-cash amortization of operating lease right-of-use assets of $4.4 million, non-cash amortization of deferred financing costs of $2.1 million, non-cash stock-based compensation of $12.7 million, and non-cash ~~decrease in~~ deferred income taxes of $35.3 million. These were partially offset by a non-cash gain on the change in estimated fair value of contingent consideration of $7.8 million, non-cash gain on the revaluation of liabilities under the TRA of $2.3 million, and a net cash outflow from the change in our operating assets and liabilities of $29.3 million, of which $10.7 million was driven by an increase in prepaid lease payments for our leased Flanders San Diego Facility and ~~our~~ Leland ~~North Carolina facility (the “Leland Facility”).~~Facility.

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Investing Activities

Net cash ~~provided by operating~~used in investing activities for the nine months ended September 30, ~~2021~~2023 was ~~$309.8~~$109.4 million, which was primarily ~~attributable to a~~comprised of $69.8 million for the net ~~income~~cash consideration paid for the acquisition of ~~$342.1~~Alphazyme and cash outflows of $48.8 million ~~non-cash depreciation~~for property and amortization of $19.4 million, non-cash amortization of right-of-use assets of $5.1 million, non-cash amortization of deferred financing costs of $2.0 million, non-cash stock-based compensation of $8.2 million and non-cash decrease in deferred income taxes of $29.4 million.equipment purchases. These were partially offset by ~~a non-cash gain on sale~~proceeds from government assistance allocated to property and equipment of business of $11.2 million, a non-cash gain on the revaluation of liabilities under the Tax Receivable Agreement of $9.1 million and a net cash outflow from the change in our operating assets and liabilities of $76.2$9.0 million.

~~Investing Activities~~

Net cash used in investing activities for the nine months ended September 30, 2022 was $249.1 million, which was primarily comprised of $238.8 million for the net cash consideration paid for the acquisition of MyChem and ~~net~~ cash outflows of $10.9 million for property and equipment purchases.

Financing Activities

Net cash ~~provided by investing~~used in financing activities for the nine months ended September 30, ~~2021~~2023 was ~~$111.3~~$61.6 million, which was primarily ~~comprised~~attributable to $42.2 million of ~~net cash receipts~~payments to MLSH 1 and MLSH 2 pursuant to the TRA, $9.7 million payment of ~~$120.0~~acquisition consideration holdback relating to the acquisition of MyChem, $9.6 million ~~from~~of distributions for tax liabilities to non-controlling interest holders, required pursuant to the ~~sale~~terms of ~~Vector~~the LLC Operating Agreement, and ~~cash receipts~~$4.1 million of ~~$0.5 million from the sale~~principal repayments of ~~our United Kingdom facility. These were~~long-term debt. This was partially offset by ~~net cash outflows~~proceeds from derivative instruments of ~~$9.2 million for property and equipment purchases.~~

~~Financing Activities~~$3.8 million.

Net cash used in financing activities for the nine months ended September 30, 2022 was $121.4 million, which was primarily attributable to $119.3 million of distributions for tax liabilities to non-controlling interest holders, required pursuant to the terms of the LLC Operating Agreement, and $12.5 million of principal repayments of long-term debt. This was partially offset by proceeds from borrowings of long-term debt of $8.5 million.

Net cash used in financing activities for the nine months ended September 30, 2021 was $109.5 million, which was primarily attributable to $106.3 million of distributions for tax liabilities to non-controlling interest holders, required pursuant to the terms of the LLC Operating Agreement, and $4.5 million of principal repayments of long-term debt.

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Capital Expenditures

Capital expenditures for the nine months ended September 30, ~~2022~~2023 totaled ~~$23.4~~$39.8 million, which is net of government funding of $9.0 million. Capital expenditures, including costs incurred for lessor improvements, for the year ending December 31, ~~2022~~2023 are projected to be in the range of $50.0 million to ~~$55.0~~$60.0 million, which is net of anticipated government funding ~~of $28.0 million.~~recognized. This primarily includes new facility construction costs recorded as ~~prepaid lease payments,~~property and equipment for ~~our leased~~the Flanders San Diego ~~California and Leland, North Carolina locations.~~Facility.

Contractual Obligations and Commitments

The following table summarizes our contractual obligations and commitments as of September 30, ~~2022~~2023 (in thousands):


		Payments due by period											Payments due by period
		Total		1 year		2 - 3 years		4 - 5 years		5+ years			Total		1 year		2 - 3 years		4 - 5 years		5+ years
Operating leases (1)	Operating leases (1)	$	109,563	$	11,058	$	26,715	$	25,028	$	46,762	Operating leases (1)	$	69,311	$	10,701	$	21,585	$	17,172	$	19,853

Finance leases (2)												Finance leases (2)	35,341		3,302		6,905		7,326		17,808
Debt obligations ~~(2)~~(3)	Debt obligations ~~(2)~~(3)	539,920		5,440		10,880		10,880		512,720		Debt obligations ~~(2)~~(3)	534,480		5,440		10,880		518,160		—
TRA payments ~~(3)~~(4)	TRA payments ~~(3)~~(4)	745,979		34,747		84,377		86,745		540,110		TRA payments ~~(3)~~(4)	678,399		4,198		14,724		37,559		621,918
Unconditional purchase obligations ~~(4)~~(5)	Unconditional purchase obligations ~~(4)~~(5)	4,128		1,128		3,000		—		—		Unconditional purchase obligations ~~(4)~~(5)	3,551		251		3,300		—		—
Consideration payable (5)		10,000		10,000		—		—		—

Total	Total	$	1,409,590	$	62,373	$	124,972	$	122,653	$	1,099,592	Total	$	1,321,082	$	23,892	$	57,394	$	580,217	$	659,579

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(1)Represents operating lease ~~payments including~~payment obligations, excluding any renewal options we are reasonably certain to execute and have recognized as lease liabilities. See Note 7 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for our Leland Facility, which is expected to commence in December 2022. These also include operating lease payments for our Flanders San Diego Facility. At the request of the landlord, rent payments began in September 2022. However, the lease is not expected to commence until the first half of 2023.additional information.

(2)Represents ~~long-term debt principal maturities,~~finance lease payment obligations, excluding ~~interest.~~any renewal options we are reasonably certain to execute and have recognized as lease liabilities. See Note 7 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

(3)Represents long-term debt principal maturities, excluding interest. See Note 9 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

(4)Reflects the estimated timing of TRA payments as of September 30, ~~2022.~~2023. Such payments could be due later than estimated depending on the timing of our use of the underlying tax attributes. See Note 1012 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information regarding our liability under the TRA.

~~(4)~~(5)Represents firm purchase commitments to our suppliers.

~~(5)Represents an additional amount we may be required to pay to the sellers of MyChem subject to the completion of certain calculations associated with acquired inventory.~~ See Note 28 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

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Tax distributions are required under the terms of the Topco LLC Agreement. See Note 911 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information regarding tax distributions.

Commencing with the fiscal year ended December 31, 2021, and each fiscal year thereafter, the Credit Agreement requires that we make mandatory prepayments of the Term Loan principal upon certain excess cash flow, subject to certain step-downs based on our first lien net leverage ratio. The mandatory prepayment shall be reduced to 25% or 0% of the calculated excess cash flow if the first lien net leverage ratio was equal to or less than 4.75:1.00 or 4.25:1.00, respectively; however, no prepayment shall be required to the extent excess cash flow calculated for the respective period is equal to or less than $10.0 million. As of September 30, ~~2022,~~2023, our first lien net leverage ratio was less than 4.25:1.00.

In connection with our acquisition of MyChem, we may be required to make certain payments to its sellers. We may be required to make additional payments of up to $40.0 million to the sellers of MyChem dependent upon meeting or exceeding defined revenue targets during fiscal 2022. We may also be required to make certain payments of $20.0 million to ~~them~~its sellers as of the second anniversary of the closing of the acquisition date as long as the sellers of MyChem continue to be employed by TriLink. We cannot, at this time, determine when or if the related targets will be achieved or whether the events triggering the commencement of payment obligations will occur. Therefore, such payments were not included in the table above. See Note 2 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional details.

In connection with our acquisition of Alphazyme, we may be required to make additional payments of up to $75.0 million to the sellers of Alphazyme dependent upon meeting or exceeding defined revenue targets during fiscal years 2023 through 2025. We may also be required to make certain payments of $9.3 million to its sellers and certain employees as of various dates but primarily through December 31, 2025 as long as these individuals continue to be employed by the Company. We cannot, at this time, determine when or if the related targets will be achieved or whether the events triggering the commencement of payment obligations will occur. Therefore, such payments were not included in the table above. See Notes 2 and 4 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional details.

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Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our interim condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures in the consolidated financial statements. Our estimates are based on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates under different assumptions or conditions, and any such difference may be material. For a discussion of how these and other factors may affect our business, financial condition or results of operations, see “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022 and “Item 1A.Risk Factors” in Part II of this Quarterly Report on Form 10-Q.

The critical accounting estimates that we believe affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements presented in this report are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for fiscal year ended December 31, ~~2021.~~2022. Except as noted below, there have been no material changes to our critical accounting policies or estimates from those set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022.

Recognition of Intangible Assets as Part of a Business Combination

We account for our business combinations using the acquisition method of accounting which requires that the assets acquired and liabilities assumed of acquired businesses be recorded at their respective fair values at the date of acquisition. The purchase price, which includes the fair value of consideration transferred, is attributed to the fair value of the assets acquired and liabilities assumed. The excess of the purchase price of the acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill.

Determining the fair value of intangible assets acquired requires management to use significant judgment and estimates, including the selection of valuation methodologies, assumptions about future net cash flows, discount rates and market participants. Each of these factors can significantly affect the value attributed to the identifiable intangible asset acquired in a business combination.

We generally utilize a discounted cash flow method under the income approach to estimate the fair value of identifiable intangible assets acquired in a business combination. For the acquisition of ~~MyChem,~~Alphazyme, LLC, the estimated fair value of the developed technology intangible asset was based on the multi-period excess earnings method. The estimated fair value was

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developed by discounting future net cash flows to their present value at market-based rates of return. We selected the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated revenue growth rates, management’s plans, and guideline companies. Some of the more significant assumptions inherent in estimating the fair value of this intangible asset included revenue growth rates ranging from 3.0% to ~~30.6%~~55.0%, ~~technical obsolescent curves ranging from 5.0% to 7.5%, and~~ a discount rate of ~~16.5%~~17.8%, and an assumed technical obsolescent curve of 5.0%.

The use of alternative estimates and assumptions could increase or decrease the estimated fair value and amounts allocated to identifiable intangible assets acquired and future amortization expense as well as goodwill.

Recent Accounting Pronouncements

For a description of the expected impact of recent accounting pronouncements, if any, see Note 1 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

As of September 30, ~~2022,~~2023, our primary exposure to interest rate risk was associated with our variable rate long-term debt. Borrowings under our Credit Agreement bear interest at a rate equal to the Base Rate plus a margin of 2.00%, with respect to each Base Rate-based loan, or the Term SOFR (Secured Overnight Financing Rate) plus a margin of 3.00% with respect to each Term SOFR-based loan, subject in each case to an applicable Base Rate or Term SOFR floor (see Note 79 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q). Interest rates can fluctuate for a number of reasons, including changes in the fiscal and monetary policies or geopolitical events or changes in general economic conditions. This could adversely affect our cash flows.

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As of September 30, ~~2022,~~2023, we have an interest rate cap agreement in place to hedge a portion of our variable interest rate risk on our outstanding long-term debt. The agreement has a contract notional amount of $500.0 million and entitles us to receive from the counterparty at each calendar quarter end the amount, if any, by which a specified floating market rate exceeds the cap strike interest rate. The floating interest rate is reset at the end of each three-month period. The contract expires on January 19, 2025.

We had ~~$539.9~~$534.5 million of outstanding borrowings under our Tranche B Term Loan and no outstanding borrowings under our Revolving Credit Facility as of September 30, ~~2022.~~2023. For the three and nine months ended September 30, ~~2022,~~2023, the effect of a hypothetical 100 basis point increase or decrease in overall interest rates would have changed our interest expense by approximately $1.4 million and $4.1 million, respectively.

We had cash and cash equivalents of ~~$617.4~~$579.6 million as of September 30, ~~2022. Our cash~~2023. Given the short-term nature of our investments, we do not believe there is ~~held~~any material risk to the value of our investments with increases or decreases in ~~demand deposits and is not subject to market risk.~~interest rates.

Foreign Currency Risk

All of our revenue is denominated in U.S. dollars. Although approximately ~~48.9%~~48.4% and ~~59.6%~~49.1% of our revenue for the three and nine months ended September 30, ~~2022, respectively,~~2023 was derived from international sales, primarily in Europe and Asia Pacific, none of these sales are denominated in local currency. The majority of our expenses are generally denominated in the currencies in which they are incurred, which is primarily in the United States. As we expand our presence in international markets, to the extent we are required to enter into agreements denominated in a currency other than the U.S. dollar, results of operations and cash flows may increasingly be subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign currency exchange rates. To date, we have not entered into any hedging arrangements with respect to foreign currency risk. As our international operations grow, we will continue to reassess our approach to manage our risk relating to fluctuations in currency rates.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the

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time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of September 30, ~~2022.~~2023.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the three months ended September 30, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

5755

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Part II.

Item 1. Legal Proceedings

From time to time, we may be involved in various legal proceedings and subject to claims that arise in the ordinary course of business. Although the results of litigation and claims are inherently unpredictable and uncertain, we are not currently a party to any legal proceedings the outcome of which, if determined adversely to us, are believed to, either individually or taken together, have a material adverse effect on our business, operating results, cash flows or financial condition. Regardless of the outcome, litigation has the potential to have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

Item 1A. Risk Factors

Other than ~~the addition of the risk factor~~as set forth below, ~~to “Risk Factors—Risks Related to our Business and Strategy,”~~ there have been no material changes to the risk factors disclosed under the heading “Risk Factors” in our most recent Annual Report on Form 10-K.

Risks Related to Our Business and Strategy

~~The extent and duration~~We are dependent on the level of our ~~revenue associated with COVID-19 related~~customers’ spending on and demand for outsourced nucleic acid production and biologics safety testing products and services. A reduction in spending or change in spending priorities of our customers could significantly reduce demand for our products and services ~~are uncertain~~ and ~~are dependent, in important respects,~~could have a material adverse effect on ~~factors outside~~ our ~~control.~~business, financial condition, results of operations, cash flows and prospects.

~~Certain~~The success of our business depends primarily on the number and size of contracts with our customers, primarily pharmaceutical and biotechnology companies, for our products and services. For example, during the COVID-19 pandemic we benefited from a significant increase in demand for our products and service, including our proprietary CleanCap® analogs that are used by our customers in the production of COVID-19 ~~vaccines. The evolving nature~~vaccines, and also benefited during 2021 and 2022, more generally, from the overall growth of the ~~COVID-19 pandemic~~global biologics market, higher research and ~~the resulting global public health response will affect the continued~~development budgets of our customers and a greater degree of outsourcing by our customers. The level of our customers’ spending on and demand for our ~~COVID-19 related~~ products and services is also subject to, among other things, their own financial performance, changes in their available resources, the timing of their commercial manufacturing initiatives, their decisions to acquire in-house manufacturing capacity (rather than outsource), their spending priorities, including research and development budgets, and their budgetary policies and practices, which, ~~have comprised the majority~~in turn, are dependent upon a number of factors outside of our ~~revenue~~control.

Our customers determine their research and development budgets based on several factors, including their need to develop new biological products, their competitors’ discoveries, developments and commercial manufacturing initiatives and the anticipated market, clinical and reimbursement scenarios for specific products and therapeutic areas. In addition, consolidation in the industries in which our customers operate may have an impact on our customers’ spending as they integrate acquired operations, including research and development departments and associated budgets.

Access to capital is critical to many of our customers’ ability to fund research and development, particularly early-stage biotechnology and pharmaceutical companies, and historically, these companies have funded their research and development activities by raising capital privately or in the equity markets. Declines and uncertainties in the capital markets, including as a result of ongoing negative macroeconomic challenges, rising interest rates, recent ~~periods. More specifically,~~instability in the ~~ongoing manufacture~~banking sector, and ~~supply~~volatile credit markets, have limited access to capital and negatively affected companies’ ability to fund research and development efforts. While 2021 and 2022 saw a significant level of ~~COVID-19 vaccines (including potential booster doses)~~investment in venture- and private equity-backed startup companies, funding for companies at all stages, and particularly early-stage companies, has contracted considerably during 2023. In addition, in the wake of broader economic uncertainty, certain of our customers have implemented more stringent budgetary policies designed to conserve capital, which in turn, have caused a reduction in research and development spending and a decline in further purchases of our products and services. We have no assurance as to whether, or when, such research and development spending may stabilize or increase, if at all. Further, if the funding of venture- and private equity-backed early-stage biotechnology and pharmaceutical companies remains weak or continues to weaken, the research and development budgets of our customers may be further reduced or eliminated.

If our customers reduce their spending on our products and services as a result of any of these or other factors, our business, financial condition, results of operations, cash flows and prospects would be materially and adversely affected.

Moreover, we have no control over the timing and volume of purchases by our customers, ~~is uncertain~~ and ~~subject~~as a result, revenue can be difficult to ~~various political, social, economic,~~forecast. Our inability to forecast fluctuations in demand could harm our business, financial position and regulatory factors that are outside of our control, including the duration of the pandemic; emerging information concerning the severity and incidence of the virus and its variants; the emergence of additional virus variants; regional resurgences of the virus globally; the rate at which the population globally becomes vaccinated against COVID-19; the development and availability of antiviral therapeutic alternatives; and political and social debate relating to the need for, efficacy of, or side effects related to one or more specific COVID-19 vaccines. To the extent that the supply and manufacture of COVID-19 vaccines by our customers slows or becomes no longer necessary, demand for our COVID-19 related products and services would significantly decrease, which would have a material adverse effect on our revenue,future results of ~~operations and financial condition.~~operations.

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Item 2. Unregistered Sales of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 5. Other Information

~~None.~~Insider Trading Arrangements

None of the Company’s directors or officers (as defined in Section 16 of the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (each as defined in Item 408(a) and (c) of Regulation S-K) during the Company’s fiscal quarter ended September 30, 2023.

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Item 6. Exhibits


Exhibit Number						Description

~~2.1~~						Amendment No. 2, dated as of August 30, 2022, to the Agreement and Plan of Merger, dated as of August 5, 2021, among Maravai Life Sciences, LLC (f/k/a Maravai Life Sciences, Inc.), Voyager Group Holdings, Inc., Vector Laboratories, Inc., Maravai LifeSciences Holdings, Inc., and Maravai Intermediate Holdings, LLC

3.1						Amended and Restated Certificate of Incorporation of Maravai LifeSciences Holdings, Inc. dated November 19, 2020 (incorporated by reference to Exhibit 3.1 to Maravai Life Sciences Holdings, Inc.’s Form 8-K filed on November 25, 2020)

3.2						Amended and Restated Bylaws of Maravai LifeSciences Holdings, Inc. dated November 19, 2020 (incorporated by reference to Exhibit 3.2 to Maravai Life Sciences Holdings, Inc.’s Form 8-K filed on November 25, 2020).

10.1*						Employment Agreement of William “Trey” Martin, III, effective as of September 30, 2022, among Maravai LifeSciences Holdings, Inc., Maravai Intermediate Holdings, LLC and William “Trey” Martin, III (incorporated by reference to Exhibit 10.1 to Maravai LifeSciences Holdings, Inc.’s Form 8-K filed on October 3, 2022).

~~10.2~~						Amendment No.1, effective as of September 30, 2022, to the Employment Agreement of Carl W. Hull, dated November 24, 2020, among Maravai LifeSciences Holdings, Inc., Maravai Intermediate Holdings, LLC and Carl W. Hull (incorporated by reference to Exhibit 10.6 to Maravai LifeSciences Holdings, Inc.’s Form 8-K filed on October 3, 2022).

31.1						Certification of the Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2						Certification of the Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1**						Certification of the Chief Executive Officer pursuant to 18 U.S. C. Section 1350.

32.2**						Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						XBRL Taxonomy Extension Schema Document.

101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF						XBRL Extension Definition Linkbase Document.

101.LAB						XBRL Taxonomy Label Linkbase Document.

101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document.

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

_______________


*			~~Exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be provided on a supplemental basis to the Securities and Exchange Commission upon request.~~

**			The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the ~~Securities~~ Exchange Act, or otherwise subject to the liability of ~~1934,~~that section, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act,, except to the extent that the registrant specifically incorporates it by ~~reference.~~reference in such filing.

5957

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.


			Maravai LifeSciences Holdings, Inc.

			By:						/s/ Kevin Herde
			Name:						Kevin Herde
			Title:						Chief Financial Officer

Date: November ~~3, 2022~~8, 2023

6058


	Three Months Ended September 30, 2021
	Class A Common Stock			Class B Common Stock
	Shares	Amount		Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Non-Controlling Interest		Total Stockholders’ Equity
June 30, 2021 (as adjusted)*	114,352	$	1,143	143,308	$	1,433	$	118,486	$	(39)	$	74,769	$	141,569	$	337,361

Effect of exchange of LLC Units	17,068	171		(17,068)	(171)		18,874		—		—		(18,874)		—
Recognition of impact of the Tax Receivable Agreement due to exchanges of LLC Units	—	—		—	—		34,060		—		—		—		34,060



Stock-based compensation	—	—		—	—		1,614		—		—		1,953		3,567
Distribution for tax liabilities to non-controlling interest holder	—	—		—	—		60		—		—		(50,061)		(50,001)
Net income	—	—		—	—		—		—		53,962		78,215		132,177
Foreign currency translation adjustment	—	—		—	—		—		39		—		—		39
September 30, 2021 (as adjusted)*	131,420	$	1,314	126,240	$	1,262	$	173,094	$	—	$	128,731	$	152,802	$	457,203


	Three Months Ended September 30, 2021
	As Previously Reported		Adjustments		As Adjusted
Operating expenses:
Cost of revenue	$	32,047	$	174	$	32,221
Selling, general and administrative	25,189		1,323		26,512
Research and development	1,950		(4)		1,946
Total operating expenses	47,937		1,493		49,430
Income from operations	156,873		(1,493)		155,380
Other income (expense):
Interest expense	(8,545)		860		(7,685)
Income before income taxes	151,652		(633)		151,019
Net income	132,810		(633)		132,177
Net income attributable to non-controlling interests	78,536		(321)		78,215
Net income attributable to Maravai LifeSciences Holdings, Inc.	54,274		(312)		53,962

Net income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:
Diluted	$	0.45	$	(0.01)	$	0.44


	As of September 30, 2021
	As Previously Reported		Adjustments		As Adjusted
Additional paid-in capital	$	172,611	$	483	$	173,094
Retained earnings	127,450		1,281		128,731
Non-controlling interest	150,979		1,823		152,802
Total stockholders’ equity	453,616		3,587		457,203


	September 30, 2022		December 31, 2021
Employee related	$	16,325	$	18,894
Consideration payable (see Note 2)	10,000		—
Accrued construction costs	9,023		—
Lease liabilities, current portion	5,833		3,722
Professional services	3,143		2,897
Sales and use tax liability	2,268		1,296
Customer deposits	1,589		2,429

Other	12,006		5,336
Total accrued expenses and other current liabilities	$	60,187	$	34,574