absi-20220630
FALSE12/312022Q2000167268800016726882022-01-012022-06-3000016726882022-07-31xbrli:shares00016726882022-06-30iso4217:USD00016726882021-12-31iso4217:USDxbrli:shares00016726882022-04-012022-06-3000016726882021-04-012021-06-3000016726882021-01-012021-06-300001672688us-gaap:PreferredStockMemberus-gaap:RedeemableConvertiblePreferredStockMember2021-12-310001672688us-gaap:CommonStockMember2021-12-310001672688us-gaap:AdditionalPaidInCapitalMember2021-12-310001672688us-gaap:RetainedEarningsMember2021-12-310001672688us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001672688us-gaap:CommonStockMember2022-01-012022-03-310001672688us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-3100016726882022-01-012022-03-310001672688us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001672688us-gaap:RetainedEarningsMember2022-01-012022-03-310001672688us-gaap:PreferredStockMemberus-gaap:RedeemableConvertiblePreferredStockMember2022-03-310001672688us-gaap:CommonStockMember2022-03-310001672688us-gaap:AdditionalPaidInCapitalMember2022-03-310001672688us-gaap:RetainedEarningsMember2022-03-310001672688us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-3100016726882022-03-310001672688us-gaap:CommonStockMember2022-04-012022-06-300001672688us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001672688us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001672688us-gaap:RetainedEarningsMember2022-04-012022-06-300001672688us-gaap:PreferredStockMemberus-gaap:RedeemableConvertiblePreferredStockMember2022-06-300001672688us-gaap:CommonStockMember2022-06-300001672688us-gaap:AdditionalPaidInCapitalMember2022-06-300001672688us-gaap:RetainedEarningsMember2022-06-300001672688us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001672688us-gaap:PreferredStockMemberus-gaap:RedeemableConvertiblePreferredStockMember2020-12-310001672688us-gaap:CommonStockMember2020-12-310001672688us-gaap:AdditionalPaidInCapitalMember2020-12-310001672688us-gaap:RetainedEarningsMember2020-12-310001672688us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100016726882020-12-310001672688us-gaap:PreferredStockMemberus-gaap:RedeemableConvertiblePreferredStockMember2021-01-012021-03-310001672688us-gaap:CommonStockMember2021-01-012021-03-310001672688us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-3100016726882021-01-012021-03-310001672688us-gaap:RetainedEarningsMember2021-01-012021-03-310001672688us-gaap:PreferredStockMemberus-gaap:RedeemableConvertiblePreferredStockMember2021-03-310001672688us-gaap:CommonStockMember2021-03-310001672688us-gaap:AdditionalPaidInCapitalMember2021-03-310001672688us-gaap:RetainedEarningsMember2021-03-310001672688us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100016726882021-03-310001672688us-gaap:CommonStockMember2021-04-012021-06-300001672688us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001672688us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001672688us-gaap:RetainedEarningsMember2021-04-012021-06-300001672688us-gaap:PreferredStockMemberus-gaap:RedeemableConvertiblePreferredStockMember2021-06-300001672688us-gaap:CommonStockMember2021-06-300001672688us-gaap:AdditionalPaidInCapitalMember2021-06-300001672688us-gaap:RetainedEarningsMember2021-06-300001672688us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-3000016726882021-06-300001672688us-gaap:IPOMember2021-07-012021-07-310001672688us-gaap:OverAllotmentOptionMember2021-07-012021-07-310001672688us-gaap:IPOMember2021-07-3100016726882021-07-310001672688absi:ConvertiblePromissoryNotes2021Memberus-gaap:ConvertibleNotesPayableMember2021-03-012021-03-3100016726882021-07-2600016726882021-07-162021-07-16xbrli:pure0001672688us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMemberabsi:KBIBioPharmaIncMember2019-12-012019-12-310001672688us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMemberabsi:KBIBioPharmaIncMember2020-01-012022-06-300001672688us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMemberabsi:KBIBioPharmaIncMember2022-06-300001672688us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMemberabsi:KBIBioPharmaIncMember2021-09-012021-09-300001672688us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMemberabsi:KBIBioPharmaIncMember2021-12-310001672688absi:DenoviumMember2021-01-012021-01-310001672688absi:DenoviumMember2021-01-310001672688absi:DenoviumMember2022-01-310001672688us-gaap:CommonStockMemberabsi:DenoviumMember2021-01-012021-01-310001672688us-gaap:CommonStockMemberabsi:DenoviumMember2021-01-310001672688us-gaap:IntellectualPropertyMemberabsi:DenoviumMember2021-01-310001672688us-gaap:IntellectualPropertyMemberabsi:DenoviumMember2021-01-012021-01-310001672688absi:TotientMember2021-06-040001672688absi:TotientMember2021-06-042021-06-040001672688us-gaap:CommonStockMemberabsi:TotientMember2021-06-042021-06-0400016726882021-06-042021-06-040001672688absi:TotientMember2022-04-012022-06-300001672688absi:TotientMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2021-06-040001672688us-gaap:ShareBasedCompensationAwardTrancheTwoMemberabsi:TotientMember2021-06-040001672688us-gaap:ShareBasedCompensationAwardTrancheTwoMemberabsi:TotientMember2021-06-042021-06-040001672688us-gaap:CommonStockMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMemberabsi:TotientMember2021-06-042021-06-040001672688us-gaap:CommonStockMemberabsi:TotientMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2021-06-040001672688us-gaap:CommonStockMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMemberabsi:TotientMember2021-06-04absi:installment0001672688absi:IndividualContractMemberabsi:TotientMember2021-06-042021-06-040001672688absi:TotientMember2022-06-300001672688us-gaap:DatabasesMemberabsi:TotientMember2021-06-040001672688us-gaap:DatabasesMemberabsi:TotientMember2021-06-042021-06-040001672688us-gaap:DevelopedTechnologyRightsMemberabsi:TotientMember2021-06-040001672688us-gaap:DevelopedTechnologyRightsMemberabsi:TotientMember2021-06-042021-06-040001672688srt:MinimumMemberus-gaap:ValuationTechniqueDiscountedCashFlowMemberabsi:TotientMemberus-gaap:MeasurementInputDiscountRateMember2021-06-040001672688us-gaap:ValuationTechniqueDiscountedCashFlowMemberabsi:TotientMembersrt:MaximumMemberus-gaap:MeasurementInputDiscountRateMember2021-06-040001672688absi:TotientMember2022-01-012022-06-300001672688absi:TotientMember2021-01-012021-12-310001672688absi:TotientMember2021-04-012021-06-300001672688absi:TotientMember2021-01-012021-06-300001672688us-gaap:MoneyMarketFundsMember2022-06-300001672688us-gaap:USTreasuryBillSecuritiesMember2022-06-300001672688us-gaap:ConstructionInProgressMember2022-06-300001672688us-gaap:ConstructionInProgressMember2021-12-310001672688us-gaap:EquipmentMember2022-06-300001672688us-gaap:EquipmentMember2021-12-310001672688us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2022-06-300001672688us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-12-310001672688us-gaap:FurnitureAndFixturesMember2022-06-300001672688us-gaap:FurnitureAndFixturesMember2021-12-310001672688us-gaap:LeaseholdImprovementsMember2022-06-300001672688us-gaap:LeaseholdImprovementsMember2021-12-310001672688us-gaap:LineOfCreditMemberabsi:LoanAndSecurityAgreementMember2019-12-31absi:tranche0001672688us-gaap:LineOfCreditMemberabsi:LoanAndSecurityAgreementMember2018-01-012018-12-310001672688us-gaap:LineOfCreditMemberabsi:LoanAndSecurityAgreementMember2018-06-300001672688us-gaap:LineOfCreditMemberabsi:LoanAndSecurityAgreementFirstAmendmentMember2019-03-310001672688us-gaap:LineOfCreditMemberabsi:LoanAndSecurityAgreementSecondAmendmentMember2020-05-310001672688us-gaap:LineOfCreditMemberabsi:LoanAndSecurityAgreementMember2021-02-280001672688us-gaap:LineOfCreditMemberabsi:LoanAndSecurityAgreementMember2022-05-110001672688us-gaap:LineOfCreditMemberabsi:LoanAndSecurityAgreementMember2019-06-300001672688us-gaap:LineOfCreditMemberabsi:LoanAndSecurityAgreementMember2022-06-012022-06-300001672688absi:ConvertiblePromissoryNotes2021Memberus-gaap:ConvertibleNotesPayableMember2021-03-310001672688us-gaap:IPOMember2021-03-310001672688us-gaap:SecuredDebtMemberabsi:EquipmentFinancingMember2022-04-012022-06-300001672688srt:MinimumMemberus-gaap:SecuredDebtMemberabsi:EquipmentFinancingMember2022-04-012022-06-300001672688us-gaap:SecuredDebtMemberabsi:EquipmentFinancingMembersrt:MaximumMember2022-04-012022-06-300001672688srt:MinimumMemberus-gaap:SecuredDebtMemberabsi:EquipmentFinancingMember2022-06-300001672688us-gaap:SecuredDebtMemberabsi:EquipmentFinancingMembersrt:MaximumMember2022-06-300001672688us-gaap:StandbyLettersOfCreditMember2022-06-300001672688us-gaap:ResearchAndDevelopmentExpenseMember2022-04-012022-06-300001672688us-gaap:ResearchAndDevelopmentExpenseMember2021-04-012021-06-300001672688us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-06-300001672688us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-06-300001672688us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-04-012022-06-300001672688us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-04-012021-06-300001672688us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-06-300001672688us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-06-300001672688absi:A2015EquityBasedIncentivePlanMember2020-10-012020-10-310001672688us-gaap:RestrictedStockMemberabsi:A2020StockOptionAndGrantPlanMember2020-10-012020-10-310001672688us-gaap:RestrictedStockMember2021-12-310001672688us-gaap:RestrictedStockMember2022-01-012022-06-300001672688us-gaap:RestrictedStockMember2022-06-300001672688us-gaap:RestrictedStockMemberabsi:A2020StockOptionAndGrantPlanMember2022-06-300001672688us-gaap:RestrictedStockMemberabsi:A2020StockOptionAndGrantPlanMember2022-01-012022-06-300001672688us-gaap:RestrictedStockMemberabsi:A2021StockOptionAndGrantPlanMember2022-01-012022-06-300001672688us-gaap:RestrictedStockMemberabsi:A2021StockOptionAndGrantPlanMember2022-06-300001672688absi:A2020StockOptionAndGrantPlanMemberus-gaap:PhantomShareUnitsPSUsMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2022-01-012022-06-300001672688absi:A2020StockOptionAndGrantPlanMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:PhantomShareUnitsPSUsMember2022-01-012022-06-300001672688us-gaap:PhantomShareUnitsPSUsMember2020-12-310001672688us-gaap:PhantomShareUnitsPSUsMember2021-01-012021-06-300001672688us-gaap:PhantomShareUnitsPSUsMember2021-06-300001672688absi:A2020StockOptionAndGrantPlanMemberus-gaap:StockAppreciationRightsSARSMember2022-01-012022-06-300001672688absi:A2020StockOptionAndGrantPlanMemberus-gaap:StockAppreciationRightsSARSMember2022-06-300001672688absi:A2020StockOptionAndGrantPlanMemberus-gaap:EmployeeStockOptionMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2022-01-012022-06-300001672688absi:A2020StockOptionAndGrantPlanMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:EmployeeStockOptionMember2022-01-012022-06-300001672688absi:A2020StockOptionAndGrantPlanMembersrt:MinimumMemberabsi:SpecificOptionsMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2022-01-012022-06-300001672688absi:A2020StockOptionAndGrantPlanMemberabsi:SpecificOptionsMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMembersrt:MaximumMember2022-01-012022-06-3000016726882021-01-012021-12-310001672688absi:A2020StockOptionAndGrantPlanMemberus-gaap:EmployeeStockOptionMember2022-04-012022-06-300001672688absi:A2020StockOptionAndGrantPlanMemberus-gaap:EmployeeStockOptionMember2022-01-012022-06-300001672688absi:A2020StockOptionAndGrantPlanMemberus-gaap:EmployeeStockOptionMember2021-04-012021-06-300001672688absi:A2020StockOptionAndGrantPlanMemberus-gaap:EmployeeStockOptionMember2021-01-012021-06-300001672688absi:A2020StockOptionAndGrantPlanMemberus-gaap:EmployeeStockOptionMember2022-06-300001672688absi:A2020And2021PlanMemberus-gaap:StockAppreciationRightsSARSMember2022-06-300001672688absi:A2020And2021PlanMemberus-gaap:StockAppreciationRightsSARSMember2022-01-012022-06-300001672688srt:MinimumMember2022-04-012022-06-300001672688srt:MaximumMember2022-04-012022-06-300001672688srt:MinimumMember2021-04-012021-06-300001672688srt:MaximumMember2021-04-012021-06-300001672688srt:MinimumMember2022-01-012022-06-300001672688srt:MaximumMember2022-01-012022-06-300001672688srt:MinimumMember2021-01-012021-06-300001672688srt:MaximumMember2021-01-012021-06-300001672688absi:A2020StockOptionAndGrantPlanMember2021-06-012021-06-300001672688absi:A2021StockOptionAndGrantPlanMember2021-07-310001672688absi:A2021StockOptionAndGrantPlanMember2022-01-012022-01-010001672688absi:A2021StockOptionAndGrantPlanMember2022-06-300001672688absi:A2021EmployeeStockPurchasePlanMember2021-07-310001672688us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-06-300001672688us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-06-300001672688us-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001672688us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001672688us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USTreasuryBillSecuritiesMember2022-06-300001672688us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USTreasuryBillSecuritiesMember2022-06-300001672688us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryBillSecuritiesMember2022-06-300001672688us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryBillSecuritiesMember2022-06-300001672688us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-06-300001672688us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-06-300001672688us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001672688us-gaap:FairValueMeasurementsRecurringMember2022-06-300001672688us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310001672688us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-310001672688us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001672688us-gaap:FairValueMeasurementsRecurringMember2021-12-310001672688us-gaap:FairValueMeasurementsRecurringMemberabsi:ContingentConsiderationMember2021-12-310001672688us-gaap:FairValueMeasurementsRecurringMemberabsi:ContingentConsiderationMember2022-01-012022-06-300001672688us-gaap:FairValueMeasurementsRecurringMember2022-01-012022-06-300001672688us-gaap:FairValueMeasurementsRecurringMemberabsi:ContingentConsiderationMember2022-06-300001672688us-gaap:CommonStockMemberabsi:PhoenixVenturePartnersIILPMembersrt:AffiliatedEntityMember2021-01-012021-12-310001672688us-gaap:CommonStockMemberabsi:PhoenixVenturePartnersIILPMembersrt:AffiliatedEntityMember2021-12-310001672688us-gaap:RedeemableConvertiblePreferredStockMember2022-04-012022-06-300001672688us-gaap:RedeemableConvertiblePreferredStockMember2021-04-012021-06-300001672688us-gaap:RedeemableConvertiblePreferredStockMember2022-01-012022-06-300001672688us-gaap:RedeemableConvertiblePreferredStockMember2021-01-012021-06-300001672688absi:ConvertiblePreferredStockAndWarrantsMember2022-04-012022-06-300001672688absi:ConvertiblePreferredStockAndWarrantsMember2021-04-012021-06-300001672688absi:ConvertiblePreferredStockAndWarrantsMember2022-01-012022-06-300001672688absi:ConvertiblePreferredStockAndWarrantsMember2021-01-012021-06-300001672688us-gaap:EmployeeStockOptionMember2022-04-012022-06-300001672688us-gaap:EmployeeStockOptionMember2021-04-012021-06-300001672688us-gaap:EmployeeStockOptionMember2022-01-012022-06-300001672688us-gaap:EmployeeStockOptionMember2021-01-012021-06-300001672688us-gaap:RestrictedStockUnitsRSUMember2022-04-012022-06-300001672688us-gaap:RestrictedStockUnitsRSUMember2021-04-012021-06-300001672688us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-06-300001672688us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-06-300001672688us-gaap:RestrictedStockMember2022-04-012022-06-300001672688us-gaap:RestrictedStockMember2021-04-012021-06-300001672688us-gaap:RestrictedStockMember2022-01-012022-06-300001672688us-gaap:RestrictedStockMember2021-01-012021-06-30
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission file number 001-40646
ABSCI CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
85-3383487
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
18105 SE Mill Plain Blvd
Vancouver, WA

98683
(Address of Principal Executive Offices)
(Zip Code)
(360) 949-1041
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock. $0.0001 par value ABSIThe Nasdaq Global Select Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes     No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting 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
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).        Yes        N 
The registrant had outstanding 92,843,545 shares of $0.0001 par value common stock as of July 31, 2022.


Table of Contents
Table of Contents
Page No.


Table of Contents
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that may relate to our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs and other information that is not historical information. Many of these statements appear, in particular, under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Risk Factors”. Forward-looking statements can often be identified by the use of terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking. In particular, these forward-looking statements include, but are not limited to:
our expectations regarding our further development of, successful application of, and the rate and degree of market acceptance of, our Integrated Drug Creation Platform, including progress towards fully in silico biologic drug discovery;
our expectations regarding the markets for our services and technologies, including the growth rate of the biologics and next-generation biologics markets;
our ability to attract new partners and enter into technology development agreements that contain milestone and royalty obligations in favor of us;
our potential to receive revenue from the achievement of milestones and from royalties on net sales under agreements with our partners with respect to products originating from our Integrated Drug Creation Platform;
our ability to enter into license agreements for our existing Active Programs with those partners who do not have current milestone payment and royalty obligations to us;
our ability to manage and grow our business by expanding our relationships with existing partners or introducing our Integrated Drug Creation Platform to new partners;
our expectations regarding our current and future partners’ continued development of, and ability to commercialize, biologic drugs generated utilizing our platform;
our estimates of our expenses, ongoing losses, future revenue, capital requirements and our need for or ability to obtain additional funding before we can expect to generate any revenue;
our estimates of the sufficiency of our cash and cash equivalents;
our ability to establish, maintain or expand collaborations, partnerships or strategic relationships;
our ability to provide our partners with a full biologic drug discovery and cell line development solution from target to Investigational New Drug application (IND)-ready, including non-standard amino acid incorporation capabilities;
our ability to obtain, maintain and enforce intellectual property protection for our platform, products and technologies, the duration of such protection and our ability to operate our business without infringing on the intellectual property rights of others;
our ability to attract, hire and retain key personnel and to manage our growth effectively;
our expectations regarding use of our cash and cash equivalents, including the proceeds from our initial public offering;
our financial performance and that of companies in our industry and the financial markets generally;
the volatility of the trading price of our common stock;
3

Table of Contents
our competitive position and the development of and projections relating to our competitors or our industry;
the potential impact of the ongoing COVID-19 pandemic, including supply chain issues arising from the pandemic and the emergence of new variants and sub variants of the virus on our business or operations;
the impact of laws and regulations;
our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (JOBS Act); and
our expectations about market trends and effects from inflation.
We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements we make. Moreover, we operate in a competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures, or investments we may make or enter into.
You should read this Quarterly Report and the documents that we file with the Securities and Exchange Commission, or the SEC, with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Quarterly Report are made as of the date of this Quarterly Report, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
Except as otherwise indicated, references in this Quarterly Report on Form 10-Q to “Absci,” the “Company,” “we,” “us” and “our” refer to Absci Corporation and its subsidiaries.
Trademarks
This Quarterly Report on Form 10-Q contains references to our trademarks and service marks and to those belonging to third parties. Absci®, SoluPro® and SoluPure® are our registered trademarks with the U.S. Patent and Trademark Office. We also use various other trademarks, service marks and trade names in our business, including the Absci logo, ACE Assay, HiPrBind, Bionic Proteins, Translating Ideas into Drugs, Bionic SoluPro, Integrated Drug Creation, Denovium, and Denovium Engine. All other trademarks, service marks or trade names referred to in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Quarterly Report on Form 10-Q may be referred to with or without the ® and ™ symbols, but references which omit the ® and ™ symbols should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.
Availability of Other Information about Absci
Investors and others should note that we routinely communicate with investors and the public using our website (www.absci.com) and our investor relations website (investors.absci.com) free of charge, including without limitation, through the posting of investor presentations, SEC filings (including amendments and exhibits to such filings as soon as reasonably practicable after filed with or furnished to the SEC), press releases, public conference calls and webcasts on these websites. The information that we post on these websites could be deemed to be material information. As a result, investors, the media, and others interested in Absci are encouraged to review this information on a regular basis. The contents of our website, or any
4

Table of Contents
other website that may be accessed from our website, shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
5

Table of Contents
Part I. Financial Information
Item 1. Financial Statements
ABSCI CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
June 30,December 31,
(In thousands, except for share and per share data)20222021
ASSETS
Current assets:
Cash and cash equivalents$206,021 $252,569 
Restricted cash15,017 10,513 
Receivables under development arrangements310 1,425 
Prepaid expenses and other current assets6,540 8,572 
Total current assets227,888 273,079 
Operating lease right-of-use assets5,708 6,538 
Property and equipment, net54,890 52,114 
Intangibles, net53,308 54,992 
Goodwill21,335 21,335 
Restricted cash, long-term1,845 16,844 
Other long-term assets1,341 1,293 
TOTAL ASSETS$366,315 $426,195 
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable$5,470 $8,385 
Accrued expenses17,054 17,434 
Long-term debt, current2,135 2,400 
Operating lease obligations1,584 1,502 
Financing lease obligations2,651 2,785 
Deferred revenue2,798 1,353 
Total current liabilities31,692 33,859 
Long-term debt - net of current portion7,125 1,124 
Operating lease obligations - net of current portion8,175 8,969 
Finance lease obligations - net of current portion1,818 3,231 
Deferred tax, net1,085 743 
Other long-term liabilities227 12,162 
TOTAL LIABILITIES50,122 60,088 
Commitments (See Note 8)
STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021
  
Common stock, $0.0001 par value; 500,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 92,780,988 and 92,648,036 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
9 9 
Additional paid-in capital565,444 557,136 
Accumulated deficit(249,199)(191,025)
Accumulated other comprehensive loss(61)(13)
TOTAL STOCKHOLDERS' EQUITY316,193 366,107 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$366,315 $426,195 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6

Table of Contents
ABSCI CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
For the Three Months Ended June 30,For the Six Months Ended June 30,
(In thousands, except for share and per share data)2022202120222021
Revenues
Technology development revenue$636 $592 $1,090 $1,532 
Collaboration revenue366 136 731 259 
Total revenues1,002 728 1,821 1,791 
Operating expenses
Research and development16,241 11,040 32,068 18,090 
Selling, general and administrative10,507 5,179 21,396 9,864 
Depreciation and amortization3,141 1,201 6,047 1,677 
Total operating expenses29,889 17,420 59,511 29,631 
Operating loss(28,887)(16,692)(57,690)(27,840)
Other expense
Interest expense(211)(2,009)(406)(2,464)
Other income (expense), net148 (28,114)273 (27,950)
Total other expense, net(63)(30,123)(133)(30,414)
Loss before income taxes(28,950)(46,815)(57,823)(58,254)
Income tax (expense) benefit270 5,617 (351)6,094 
Net loss(28,680)(41,198)(58,174)(52,160)
Cumulative undeclared preferred stock dividends (1,047) (2,042)
Net loss applicable to common stockholders$(28,680)$(42,245)$(58,174)$(54,202)
Net loss per share attributable to common stockholders:
Basic and diluted
$(0.32)$(2.39)$(0.64)$(3.13)
Weighted-average common shares outstanding:
Basic and diluted
90,669,499 17,641,147 90,471,950 17,312,437 
Comprehensive loss:
Net loss$(28,680)$(41,198)$(58,174)$(52,160)
Foreign currency translation adjustments(40)(11)(50)(11)
Unrealized gain on investments2  2  
Comprehensive loss$(28,718)$(41,209)$(58,222)$(52,171)
The accompanying notes are an integral part of these condensed consolidated financial statements
7


ABSCI CORPORATION
STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’
EQUITY (DEFICIT) (UNAUDITED)
(In thousands, except for share and per share data)Redeemable Convertible
Preferred Stock
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossCondensed Total Stockholders’
Equity
SharesAmountSharesAmount
Balances - December 31, 2021 $ 92,648,036 $9 $557,136 $(191,025)$(13)$366,107 
Issuance of shares upon option exercise— — 187,151 213 — — 213 
Stock-based compensation— — — — 3,680 — — 3,680 
Foreign currency translation adjustments— — — — — — (10)(10)
Net loss— — — — — (29,494)— (29,494)
Balances - March 31, 2022 $ 92,835,187 $9 $561,029 $(220,519)$(23)$340,496 
Issuance of shares upon option exercise— — 195,418 — 215 — — 215 
Repurchase of common stock— — (249,618)— — — — — 
Stock-based compensation— — — — 4,200 — — 4,200 
Foreign currency translation adjustments— — — — — — (40)(40)
Unrealized gain on investments— — — — — — 2 2 
Other— — 1 — — — — — 
Net loss— — — — — (28,680)— (28,680)
Balances - June 30, 2022 $ 92,780,988 $9 $565,444 $(249,199)$(61)$316,193 
The accompanying notes are an integral part of these condensed consolidated financial statements.
8


ABSCI CORPORATION
STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’
EQUITY (DEFICIT) (UNAUDITED)
(In thousands, except for share and per share data)Redeemable Convertible
Preferred Stock
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossCondensed Total Stockholders’
Deficit
SharesAmountSharesAmount
Balances - December 31, 202013,752,043 $156,433 17,887,631 $2 $635 $(90,065)$ $(89,428)
Issuance of Series E preferred stock, net of issuance costs254,886 4,944 — — — — — — 
Issuance of restricted stock— — 703,425 — — — — — 
Stock-based compensation— — — — 1,519 — — 1,519 
Issuance of shares in acquisition of Denovium— — 1,010,296 — 368 — — 368 
Net loss— — — — — (10,962)— (10,962)
Balances - March 31, 202114,006,929 $161,377 19,601,352 $2 $2,522 $(101,027)$ $(98,503)
Issuance of shares upon option exercise— — 62,613 — 69 — — 69 
Stock-based compensation— — — — 1,490 — — 1,490 
Issuance of shares in acquisition of Totient— — 2,212,208 — 13,891 — — 13,891 
Foreign currency translation adjustments— — — — — — (11)(11)
Net loss— — — — — (41,198)— (41,198)
Balances - June 30, 202114,006,929 $161,377 21,876,173 $2 $17,972 $(142,225)$(11)$(124,262)
The accompanying notes are an integral part of these condensed consolidated financial statements.
9

Table of Contents
ABSCI CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30,
(In thousands)20222021
Cash Flows From Operating Activities
Net loss(58,174)(52,160)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization6,047 1,677 
Deferred income taxes342 (6,094)
Stock-based compensation7,949 3,593 
Change in fair value of convertible promissory notes 25,107 
Change in fair value of contingent consideration750  
Gain on extinguishment of loan payable (636)
Other(105)(11)
Preferred stock warrant liability expense 3,440 
Changes in operating assets and liabilities:
Receivables under development arrangements1,115 1,109 
Prepaid expenses and other current assets1,701 (921)
Operating lease right-of-use assets and liabilities(277)2,653 
Other long-term assets(47)(1,853)
Accounts payable659 2,744 
Accrued expenses and other liabilities(5,132)(404)
Deferred revenue1,444 (16)
Net cash used in operating activities(43,728)(21,772)
Cash Flows From Investing Activities
Purchases of property and equipment(10,745)(24,111)
Acquisitions, net of cash acquired(8,000)(28,130)
Proceeds from property insurance settlements665  
Net cash used in investing activities(18,080)(52,241)
Cash Flows From Financing Activities
Proceeds from issuance of redeemable convertible preferred units and stock, net of issuance costs 4,944 
Proceeds from issuance of long-term debt9,407  
Principal payments on long-term debt(3,698)(139)
Principal payments on finance lease obligations(1,372)(772)
Proceeds from issuance of common stock, net of issuance costs428 69 
Proceeds from issuance of convertible promissory notes 125,000 
Net cash (used in) provided by financing activities4,765 129,102 
Net (decrease) increase in cash, cash equivalents, and restricted cash(57,043)55,089 
Cash, cash equivalents and restricted cash - Beginning of year279,926 71,708 
Cash, cash equivalents, and restricted cash - End of period$222,883 $126,797 
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest$360 $315 
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Property and equipment purchased under finance lease$ $1,729 
Right-of-use assets obtained in exchange for operating lease obligation 3,330 
Cash paid for amounts included in the measurement of operating lease liabilities1,141 508 
Property and equipment purchases included in accounts payable1,990 4,187 
Deferred offering costs included in accounts payable 825 
The accompanying notes are an integral part of these condensed consolidated financial statements.
10

Table of Contents
ABSCI CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1.Organization and nature of operations
Absci Corporation (the “Company”) has developed an integrated drug creation platform (the “Integrated Drug Creation Platform”) by merging deep learning artificial intelligence and synthetic biology. The Integrated Drug Creation Platform enables the creation of biologics by unifying the drug discovery and cell line development processes into one process. The Company was organized in the State of Oregon in August 2011 as a limited liability company and converted to a limited liability company (“LLC”) in Delaware in April 2016. In October 2020, the Company converted from a Delaware LLC to a Delaware corporation (the “LLC Conversion”). The Company’s headquarters are located in Vancouver, Washington.
Authorized shares of common stock
In June 2021, the Company’s board of directors (the “Board”) and stockholders increased the number of authorized shares of common stock to 78,320,000.
Initial Public Offering
In July 2021, we completed our initial public offering (the “IPO”) and issued 14.4 million shares of our common stock, including 1.9 million shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a price of $16.00 per share and received net proceeds of $210.1 million from the IPO. Immediately prior to the completion of the IPO, all shares of redeemable convertible preferred stock then outstanding were converted into 46.3 million shares of common stock and all convertible notes issued in March 2021 were converted into 9.7 million shares of common stock.
Amendments to Certificate of Incorporation or Bylaws
In connection with the consummation of the IPO, the Company filed an amended and restated certificate of incorporation (the “Restated Certificate”) with the Secretary of State of the State of Delaware. The Board and stockholders previously approved the Restated Certificate to be filed in connection with, and to be effective upon, the consummation of the IPO. The Restated Certificate amended and restated the Company’s existing amended and restated certificate of incorporation, as amended, in its entirety to, among other things: (i) authorize 500,000,000 shares of common stock; (ii) eliminate all references to the previously-existing series of preferred stock; (iii) authorize 10,000,000 shares of undesignated preferred stock that may be issued from time to time by the Board in one or more series; (iv) establish a classified board divided into three classes, with each class serving staggered three-year terms and (v) require the approval of holders of at least 75% of the voting power of the Company’s outstanding shares of voting stock to amend or repeal certain provisions of the Restated Certificate.
Stock split
On July 16, 2021, the Board and stockholders approved an amendment to the Company’s amended and restated certificate of incorporation to effect a forward stock split of the Company’s issued and outstanding common stock at a 3.3031-to-1 ratio, which was effected on July 19, 2021. The par value and convertible preferred stock were not adjusted as a result of the forward stock split. All issued and outstanding common stock, options to purchase common stock and units, and per share and unit amounts contained in the financial statements have been retroactively adjusted to reflect the forward stock split for all periods presented. The financial statements have also been retroactively adjusted to reflect a proportional adjustment to the conversion ratio for each series of preferred stock that was effected in connection with the forward stock split.
Unaudited Interim Financial Information
We prepared our interim condensed consolidated financial statements that accompany these notes in conformity with U.S. GAAP, consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended December 31, 2021.
We have made estimates and judgments affecting the amounts reported in our condensed consolidated financial statements and the accompanying notes. The actual results that we experience may differ materially from our estimates. The interim financial information is unaudited and reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This
11

Table of Contents
ABSCI CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
report should be read in conjunction with the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021 where we include additional information about our critical accounting estimates.
2.Summary of significant accounting policies
Basis of presentation
The condensed consolidated financial statements are prepared in accordance with U.S. GAAP as defined by the Financial Accounting Standards Board (“FASB”). The condensed consolidated financial statements include the Company’s wholly-owned subsidiaries and entities under its control. The Company has eliminated all intercompany transactions and accounts.
There have been no material changes in the accounting policies from those disclosed in the audited consolidated financial statements and the related notes included in the Annual Report on Form 10-K, which was filed with the SEC on March 22, 2022.
3.Revenue recognition
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. As of June 30, 2022 and December 31, 2021, contract assets were $0.1 million and $0.6 million, respectively.
Contract liabilities are recorded in deferred revenue when cash payments are received or due in advance of the satisfaction of performance obligations. As of June 30, 2022 and December 31, 2021, contract liabilities were $2.8 million and $1.4 million, respectively. During the three and six months ended June 30, 2022, the Company recognized $0.4 million and $0.8 million, respectively, as revenue that had been included in deferred revenue at the beginning of the period. During the three and six months ended June 30, 2021, the Company recognized $0.1 million and $1.1 million, respectively, as revenue that had been included in deferred revenue at the beginning of the period.
KBI BioPharma, Inc. Collaboration agreement
In December 2019, the Company executed a four-year Joint Marketing Agreement (“JMA”) with KBI BioPharma, Inc. (“KBI”) to co-promote technologies through joint marketing efforts. The JMA provides for a non-refundable upfront payment of $0.8 million and milestone payments of $2.8 million in the aggregate, of which $2.3 million had been received as of June 30, 2022, upon the achievement of specific milestones. Upfront payments that relate to ongoing collaboration efforts required throughout the contract term such as joint marketing are recognized ratably throughout the contract term. The Company fully constrains revenue associated with the milestone payments until the specified milestones are probable of achievement. Additionally, KBI is obligated to make royalty payments to the Company during the fourth year of the JMA representing a percentage of its sales generated through the arrangement. Any costs incurred to KBI through the duration of the JMA are recognized as a reduction to collaboration revenue in the period in which they are incurred.
In September 2021, the JMA was amended to shorten the term to approximately three years, while all remaining payments, including potential royalty payments, were replaced with a one-time fee due from KBI in the amount of $0.3 million. The Company determined the remaining services were distinct from those provided prior to the modification and therefore recognizes the total remaining transaction price prospectively over the remaining contractual term.
As of June 30, 2022 and December 31, 2021, deferred revenues related to the JMA were $0.5 million and $1.2 million, respectively.
12

Table of Contents
ABSCI CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
4.Acquisitions
Acquisition of Denovium
In January 2021, the Company completed its acquisition of the common stock of Denovium, Inc. (“Denovium”), an artificial intelligence deep learning company focused on protein discovery and design. The Company is integrating Denovium’s technology into its Integrated Drug Creation Platform. The acquisition has been accounted for as a business combination.
Pursuant to the terms of the agreement, the Company acquired all outstanding equity of Denovium for estimated total consideration of $3.0 million, which consists of (in thousands):
Cash consideration$2,670 
Equity consideration368 
Total purchase consideration$3,038 
Cash consideration includes a $2.5 million upfront payment and a payment for working capital adjustments.
In addition to the $2.5 million paid upfront, $2.5 million was placed into escrow subject to the continued service and/or employment of Denovium’s co-founders over a one year period. This amount is not included in the total consideration and is accounted for as compensation expense over the one year service period, and was included in current restricted cash and accrued expenses on the condensed consolidated balance sheet as of December 31, 2021. The $2.5 million deferred payment was disbursed from escrow in January 2022.
The Company issued 1,010,296 shares of its common stock to the Denovium co-founders, of which 80% or 808,238 shares is subject to a Stock Restriction Agreement and vests monthly over a four year term subject to a service condition. The fair value of these shares of $1.5 million will be recognized as compensation cost over the four year service period. The remaining 20%, or 202,058 shares, vested immediately and is included in the total consideration.
The following table summarizes the allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed (in thousands):
Cash and cash equivalents$158 
Accounts receivable59 
Other current assets1 
Intangible assets2,507 
Goodwill1,055 
TOTAL ASSETS3,780 
Accounts payable and accrued expenses109 
Deferred tax liability633 
TOTAL LIABILITIES742 
Fair value of net assets acquired and liabilities assumed$3,038 
Goodwill arising from the acquisition of $1.1 million was attributable to the assembled workforce and expected synergies between the Integrated Drug Creation Platform and the Denovium Engine. The goodwill is not deductible for tax purposes. As of December 31, 2021, the Company had fully completed the analysis to assign fair values to all assets acquired and liabilities assumed.
13

Table of Contents
ABSCI CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table reflects the fair values of the identified intangible assets of Denovium and their respective weighted-average estimated amortization periods.
Estimated Fair Value (in thousands)Estimated Amortization Period (years)
Denovium Engine$2,507 5
$2,507 
Acquisition of Totient
On June 4, 2021, the Company entered into a merger agreement with Totient, Inc. (“Totient”), under which, at the effective time, a wholly owned entity, or Merger Sub, merged with Totient, with Merger Sub surviving as a wholly owned subsidiary of the Company.
Pursuant to the merger agreement, at closing, Totient shareholders became eligible to receive an aggregate payment of $55.0 million in cash, of which $40.0 million in cash was paid at closing, subject to customary purchase price adjustments and escrow restrictions, and $15.0 million in cash shall be paid upon the achievement of specified milestones, and 2,212,208 shares of the Company’s common stock. The $40.0 million cash consideration included $8.0 million of deferred cash payment, due in one year. This amount was included in current restricted cash and accrued expenses on the condensed consolidated balance sheet as of December 31, 2021. The $8.0 million of deferred cash payment was paid out in the three months ended June 30, 2022. All common stock issued is unrestricted, except for those shares granted to certain members of Totient’s management, of which 25% of the shares issued were vested upon the closing of the transaction and the remaining 75% will vest over 2.5 years, in six-month installments subject to their respective continuing service relationships with the Company.
The following table summarizes the purchase price (in thousands):
Estimated cash payment to Totient stockholders$35,368 (i)
Estimated stock payment to Totient stockholders13,891 (ii)
Estimated cash payment contingent on achieving specified milestone12,000 (iii)
Total$61,259 
(i)Pursuant to the merger agreement, the initial purchase price includes $40.0 million of cash adjusted for the agreed upon working capital value which includes the payment of Totient’s transaction and other expenses as well as payments to Totient stock option holders for the cancellation and extinguishment of Totient stock options.
(ii)Pursuant to the merger agreement, 2,212,208 shares of common stock issued in payment to Totient stockholders with 1,282,747 vesting immediately and therefore included in the purchase price consideration. The remaining 929,461 shares will vest ratably, every six months over 5 equal installments of a 2.5 years service period and will be expensed over the service period. These shares are subject to stock restriction agreements that require certain former key Totient executives to maintain a continued service relationship with Absci throughout the service period.
(iii)Represents the estimated fair value of the contingent consideration that is payable upon the achievement of the milestone of (i) Absci’s entering into one or more definitive commercialization agreements, or technology partnering or licensing agreements, or collaboration agreements, with third parties using, or related to, Totient’s technology, a target discovered or identified by using Totient’s technology, or a peptide, protein complex or amino acid sequence assembled using Totient’s technology, including any Totient product or enabled product, pursuant to which (a) Absci is entitled to receive at least $2.0 million in aggregate upfront cash or equity payments (provided, that the minimum upfront payment under any individual agreement shall be $1.0 million and (b) an option for a license or a license or similar right is granted to the third party; or (ii) first commercial sale of a Totient product or enabled product. The fair value estimate is based on a probability-weighted approach and will be updated as we obtain more information. The $12.0 million of contingent consideration originally measured was adjusted to reflect the increased probability of achievement. As of June 30, 2022 the fair value is $12.8 million and is included in accrued expenses on the condensed consolidated balance sheet as of June 30, 2022. Changes in the contingent consideration liability fair value are reflected within research and development expenses on the condensed consolidated statement of operations and comprehensive loss.
14

Table of Contents
ABSCI CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table summarizes the allocation of the estimated consideration to the identifiable assets and liabilities acquired by us as of June 4, 2021 (in thousands).
Current assets:
Cash and cash equivalents$1,751 
Prepaid expenses and other current assets189 
Total current assets1,940 
Operating lease right-of-use assets266 
Property and equipment, net118 
Goodwill20,280 (i)
Intangible assets54,600 (ii)
Other long-term assets23 
TOTAL ASSETS77,227 
Current liabilities:
Accounts payable78 
Accrued expenses6,588 
Operating lease obligations122 
Total current liabilities6,788 
Operating lease obligations - net of current portion144 
Deferred tax, net9,012 
Other long-term liabilities24 
TOTAL LIABILITIES15,968 
Fair value of net assets acquired and liabilities assumed$61,259 
(i)Goodwill represents the excess of the estimated purchase price over the estimated fair value of Totient’s identifiable assets acquired and liabilities assumed. Goodwill also reflects the requirement to record deferred tax balances for the difference between the assigned values and the tax bases of assets acquired and liabilities assumed in the business combination. Goodwill is not deductible for tax purposes.
(ii)The estimated fair value of and useful lives of the intangible assets acquired is as follows:

Estimated fair value (in thousands)(i)
Estimated useful lives (in years)(ii)
Monoclonal antibody library$46,300 20
Developed software platform and the related methods patents8,300 15
Total$54,600 
(i)The estimated fair values were categorized within Level 3 of the fair value hierarchy and were determined using an income-based approach, which was based on the present value of the future estimated after-tax cash flows attributable to each intangible asset. The significant assumptions inherent in the development of the values, from the perspective of a market participant, include the amount and timing of projected future cash flows (including revenue, regulatory success and profitability), and the discount rate selected to measure the risks inherent in the future cash flows, which was between 18%-23%. These fair values are based on the most recent estimate of the fair value available and will be updated as we obtain more information.
(ii)The estimate of the useful life was based on an analysis of the expected use of the asset by us, any legal, regulatory or contractual provisions that may limit the useful life, the effects of obsolescence, competition and other relevant economic factors, and consideration of the expected cash flows used to measure the fair value of the intangible asset.
As of March 31, 2022, the Company had fully completed the analysis to assign fair values to all assets acquired and liabilities assumed and recorded no adjustments to the preliminary purchase price allocation in the six months ended June 30, 2022. During the year ended December 31, 2021, the Company recorded adjustments to goodwill of $1.6 million primarily related to deferred taxes.
The Company’s results of operations for the three and six months ended June 30, 2022 include the operating results of Totient within the condensed consolidated statement of operations and comprehensive loss. The operating results of Totient are included within the condensed consolidated statement of operations and
15

Table of Contents
ABSCI CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
comprehensive loss from June 4, 2021 through June 30, 2021 for the three and six months ended June 30, 2021.
Acquisition costs of $0.9 million were included in the condensed consolidated statement of operations and comprehensive loss as selling, general and administrative for the three and six months ended June 30, 2021.
The financial information in the table below summarizes the combined results of operations of the Company and Totient on a pro forma basis, as though the companies had been combined as of January 1, 2020. These pro forma results were based on estimates and assumptions, which we believe are reasonable. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of our fiscal year 2020. The pro forma financial information includes adjustments to share-based compensation expense, amortization for acquired intangible assets, interest expense, and transaction costs, and related tax effects.
The pro forma financial information for the three and six months ended June 30, 2021 and combines our results, which include the results of Totient subsequent to June 4, 2021, and the historical results for Totient for the periods prior to acquisition.
The following table summarizes the pro forma financial information (in thousands):
For the Three Months Ended June 30,For the Six Months Ended June 30,
20212021
Net loss applicable to common stockholders and unitholders$(47,035)$(61,116)
5.Cash equivalents and investments
Cash equivalents, marketable securities and deposits are classified as available for sale and are, therefore, recorded at fair value on the condensed consolidated balance sheet, with any unrealized gains and losses reported in accumulated other comprehensive income, which is reflected as a separate component of stockholders’ equity in the Company’s condensed consolidated balance sheet, until realized.
The amortized cost and fair value of our cash equivalents and investments are as follows (in thousands):
June 30, 2022
Amortized costGross unrealized gainsFair market value
Assets
Money market funds$169 $ $169 
U.S. treasury bills49,831 2 49,833 
Total$50,000 $2 $50,002 
Classified as:
Cash equivalents$50,002 
Short-term investments 
Long-term investments 
Total$50,002 
All investments held as of June 30, 2022 were cash equivalents and had contractual maturities less than 90 days. There were no realized gains and losses on these securities for the period presented. Unrealized gains on these investments were primarily due to changes in interest rates. We did not have any investments in a continuous unrealized loss position for more than twelve months as of June 30, 2022. There were no investments held as of December 31, 2021.
16

Table of Contents
ABSCI CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
6.Property and equipment, net
Property and equipment as of June 30, 2022 and December 31, 2021 consists of the following (in thousands):
June 30,December 31,
20222021
Construction in progress$134 $933 
Lab Equipment34,161 27,776 
Software315 311 
Furniture, Fixtures and Other5,043 4,804 
Leasehold Improvements25,958 24,671 
Total Cost65,611 58,495 
Less accumulated depreciation and amortization(10,721)(6,381)
Property and equipment, net$54,890 $52,114 

Depreciation expense was $2.3 million and $4.4 million for the three and six months ended June 30, 2022, respectively. Depreciation expense was $0.9 million and $1.2 million for the three and six months ended June 30, 2021, respectively.
7.Long-term debt and other borrowings
Loan and Security Agreement (“LSA”)
In June 2018, the Company signed a Loan and Security Agreement (“LSA”) with Bridge Bank (“Bank”), a division of Western Alliance Bank. The purpose of the LSA was to provide long-term financing to the Company through term loans available for borrowing in three tranches up to a maximum of $3.0 million through December 2019 upon the attainment of certain milestones as delineated in the LSA. The first tranche of $0.3 million was borrowed in 2018. The Company was obligated to make interest-only payments until the amortization date of June 28, 2019 and after that date to make principal and interest payments. Interest on outstanding borrowings under the LSA is charged at a rate of 6% per annum. This loan was scheduled to originally mature in May 2022, at which time all outstanding principal and accrued and unpaid interest was due and payable. This loan is secured by substantially all tangible assets of the Company; intellectual property is excluded from the secured collateral but is subject to a negative pledge in favor of the Bank.
In March 2019, the Company entered into a first amendment to the LSA that increased total borrowings to $3.0 million and added a financial liquidity covenant. The amendment was accounted for as a debt modification and no gain or loss was recognized in the Company’s financial statements.
In May 2020, the Company entered into a second amendment to the LSA that increased total borrowings to $5.0 million. The amortization date was extended to May 1, 2021 except, if a certain revenue and new contract bookings milestone is achieved, the amortization date is extended to November 1, 2021. The maturity date of the loan was extended to May 11, 2024. The amendment was accounted for as a debt modification and no gain or loss was recognized in the Company’s financial statements.
In August 2020, the Company entered into a third amendment to the LSA that waived an event of default due to failure to meet a financial covenant. The amendment also expanded the definition of permitted indebtedness to include Payroll Protection Plan (“PPP”) loans, and modified financial and restrictive covenants.
In February 2021, the Company entered into a fourth amendment to the LSA. This amendment gave effect to the Company’s conversion to a corporation and its purchase of Denovium, including permitting certain cash and equity consideration linked to continued employment and service requirements, and adding Denovium as co-borrower to the LSA.
In June 2021, the Company entered into a fifth amendment to the LSA. This amendment modified the term loan’s maturity date to June 16, 2023.


Table of Contents
ABSCI CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
In February 2022, the Company entered into a sixth amendment to the LSA. This amendment modified various definitions and terms within the agreement, with no adjustments to the financial terms.
The Company may prepay all, but not less than all, of the term loans at any time upon 10 days written notice, with a prepayment premium beginning at 1.0% initially and declining to 0% after May 11, 2022. The Company is also required to pay a final payment equal to 3% of the principal amount funded, which is payable upon the earliest to occur of (i) the maturity date, (ii) acceleration and (iii) the prepayment of the loan. As part of the second amendment, the Company paid a one time amendment fee and a pro-rated final payment in connection with the amendment. The final payment represents an additional principal payment and is accounted for as a debt discount that will be accreted through the maturity date of the loan based on the effective interest method.
In connection with entering into the LSA in June 2018, the Company entered into an agreement whereby the Company is required to pay a fee of 3.5% of the aggregate amount of term loans funded by Bank under the LSA within three business days of a sale or other disposition of substantially all of the Company’s assets, a merger or consolidation, a change in control or an initial public offering. Concurrent with the second amendment, the Company and the Bank entered into an amended agreement which extended the term of the fee to May 11, 2030. This fee became payable upon completion of the Company’s IPO on July 26, 2021 and was paid during the year ended December 31, 2021.
In June 2022, the Company paid off the remaining $2.4 million outstanding balance of the LSA.
Convertible Note
In March 2021, the Company entered into a Note Purchase Agreement to issue and sell $125.0 million convertible promissory notes (the “2021 Notes”) to certain investors. The 2021 Notes accrued interest at 6% per annum. Due to certain embedded features within the 2021 Notes, the Company elected to account for these notes, including all of their embedded features, under the fair value option. The Company has elected to recognize interest expense based on the 6% per annum coupon rate of the Notes, which was included in other long-term liabilities on the condensed consolidated balance sheet through the date of the IPO. Based on the terms of the agreement, the 2021 Notes converted at an 18% discount from the offering price to the public in the IPO. Prior to the conversion, the Company recorded a final fair value adjustment of the 2021 Notes using the Company's common stock price at the IPO. Immediately prior to the completion of the IPO, all outstanding principal under the 2021 Notes and the related accrued interest expense were converted into an aggregate of 9,732,593 shares of our common stock based on an initial public offering price of $16.00 per share.
Equipment Financing
In the three months ended June 30, 2022, the Company received $9.4 million of proceeds from equipment financing arrangements with multiple financial institutions. Terms of the agreements require monthly payments over 42-48 month maturities with imputed interest rates ranging 8%-10%. All outstanding principal and accrued and unpaid interest is due and payable at maturity. These loans are secured by certain tangible assets of the Company and include certain financial liquidity covenants. The Company was in compliance with all applicable financial covenants as of June 30, 2022.


Table of Contents
ABSCI CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Future undiscounted payments for the Company’s financing liabilities as of June 30, 2022 are as follows (in thousands):
Years ending December 31:
2022 (six months remaining)$1,339 
20233,019 
20243,019 
20252,617 
2026852 
Thereafter 
Total future payments10,846 
Less: Imputed interest(1,586)
Total long-term debt$9,260 
8.Commitments and contingencies
As of June 30, 2022, future lease payments are secured by irrevocable standby letters of credit totaling $1.8 million. The irrevocable standby letters of credit are expected to be pledged for the full lease terms which extend through 2024 and 2028 for each of the Company’s facility leases.
The Company is not currently party to any material claims or legal proceedings. At each reporting date, the Company evaluates whether or not a potential loss or a potential range of loss is both probable and reasonably estimable.
9.Stock-based compensation
Prior to the LLC Conversion, the Company granted incentive units and phantom units under its 2015 Equity-Based Incentive Plan (“2015 Plan”) to employees and non-employee service providers. In October 2020, in conjunction with the LLC Conversion, the Company adopted the 2020 Stock Option and Grant Plan (“2020 Plan”) under which it granted stock options, restricted shares, and SARs as replacement awards for outstanding awards under the 2015 Plan and as new awards to incentivize employee service. Upon completion of the IPO, the Company adopted the 2021 Stock Option and Incentive Plan (“2021 Plan”).
Total stock-based compensation expense related to all of the Company’s stock-based awards was recorded in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):
For the Three Months Ended June 30,For the Six Months Ended June 30,
2022202120222021
Research and development1,697 851 3,120 1,927 
Selling, general and administrative2,550 591 4,906 1,666 
Total stock-based compensation expense$4,247 $1,442 $8,026 $3,593 
Restricted Stock
Upon the LLC Conversion, the outstanding 3,329,707 incentive units were exchanged for 2,671,907 restricted shares of common stock granted under the 2020 Plan based on a ratio determined by their threshold amount and the fair value of the restricted stock. The exchange was accounted for as a probable-to-probable modification (Type I modification), and the fair value of the restricted shares did not exceed the fair value of the incentive units on the date of exchange. Accordingly, the restricted shares are measured at the grant date fair value of the incentive units. Shares of restricted stock that do not vest are subject to our right of repurchase or forfeiture. In connection with its acquisitions of Denovium and Totient, the Company issued restricted shares of common stock that vest over time subject to continued service.


Table of Contents
ABSCI CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Activity for the restricted shares is shown below:
Number of shares
Unvested as of December 31, 20212,585,670 
Repurchased(249,618)
Vested(514,738)
Unvested as of June 30, 20221,821,314 
As of June 30, 2022, there was $8.4 million of unrecognized compensation expense related to the restricted shares expected to be recognized over a remaining weighted-average period of 1.8 years.
During the six months ended June 30, 2022, the Company granted 68,175 shares of restricted stock units to certain employees and consultants under the 2021 Plan. As of June 30, 2022, 68,175 shares of these restricted stock units were outstanding and unvested. As of June 30, 2022, total unrecognized stock-based compensation related to these restricted stock units was $0.5 million, which the Company expects to recognize over a remaining weighted average period of 3.1 years.
Phantom Units
Phantom units generally vested at 25% after one-year with the remainder vesting quarterly over the following three-year period. Upon the occurrence of a liquidity event, 100% of phantom units would vest. A liquidity event for purposes of the phantom units meant either of the following events: (i) a person or persons acting as a group (other than a person or group that currently owns more than 50% of the voting power of the Company) acquires ownership of common units that, together with the common units held by such person or group, constitutes more than 50% of the voting power of all common units of the Company or (ii) a person or persons acting as a group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value of more than 60% of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions. Upon a liquidity event, the phantom unit holders were entitled to a payment equal to the fair value of common units less a strike price. The payment was to be made in the same form of consideration as received by other unit holders as a result of the liquidity event. Other than this payment upon a liquidity event, phantom units provided no economic value and they provided no voting rights. Due to the presence of an exercise condition that was contingent upon a liquidity event, the Company determined that it was not probable that the phantom units would become exercisable and no compensation expense has been recognized.
Activity for the phantom units is shown below:
Number of UnitsWeighted Average Strike Price
Unvested as of December 31, 20201,202,435 $0.47 
Granted  
Vested  
Exchange of Phantom Units for Cash Payment Rights, SARs, and/or Stock Options(1,202,435)$0.47 
Unvested as of June 30, 2021 $ 
Following the LLC Conversion, the holders of phantom units were offered to exchange their awards for a combination of cash payment rights, SARs and/or stock options granted under the 2020 Plan. The exchange was accounted for as short-term inducement, with no accounting recognition prior to offer expiration in January 2021 as the exchange offer participants were able to modify their election through the expiration date. In January 2021, all participants accepted the offer. The exercisability of the SARs is contingent upon a liquidity event that is not probable of occurrence; accordingly, no compensation expense has been recognized for these awards. The stock options vest based on a service condition, generally over a 4-year term


Table of Contents
ABSCI CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
beginning with the vesting commencement date of the exchanged phantom units. The Company recognizes expense associated with the cash payment rights within stock-based compensation and began to make payments in February 2022 for vested rights. As cash payment rights continue to vest, payments are made monthly.
The aggregate intrinsic value of the 394,736 SARs outstanding as of June 30, 2022 is $1.3 million based on the estimated fair value of common stock of $3.32 per share.
Stock Options
Stock options generally vest 25% after one-year from the date of the grant with the remainder vesting monthly over the following three-year period. Certain options have alternative vesting schedules including ratably over 2-4 years and immediate vesting. The Company recognizes forfeitures as they occur and uses the straight-line expense recognition method. Activity for stock options is shown below:
Number of OptionsWeighted Average Exercise Price per ShareWeighted Average Remaining Contractual Term (in years)Aggregate Intrinsic Value (in
thousands $)
Outstanding at December 31, 20217,757,401 $3.72 9.2$40,939 
Granted4,281,834 7.23 
Exercised(382,569)1.12 
Canceled/ Forfeited(806,439)4.60 
Expired(9,747)1.12 
Outstanding at June 30, 202210,840,480 5.14 8.88,313 
Exercisable at June 30, 20222,629,096 $2.22 8.1$4,185 
Vested and expected to vest as of June 30, 202210,840,480 8.8$8,313 
The aggregate intrinsic value was calculated based on the estimated fair value of common stock of $3.32 per share.
The weighted-average grant date fair value of stock options granted during the three and six months ended June 30, 2022 was $