Absci Corp

1. Organization and nature of operations

Absci Corporation (the “Company”) is a clinical-stage biopharmaceutical company advancing potential breakthrough antibody therapeutics with generative AI. The Company’s Integrated Drug Creation platform comprises, in part, cutting edge AI models aimed at designing better antibody therapeutics, including against hard-to-drug targets.

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 Company’s headquarters are located in Vancouver, Washington.

Unaudited interim financial information

The Company prepared its interim condensed consolidated financial statements that accompany these notes in conformity with accounting principles generally accepted in the United States, consistent in all material respects with those applied in its Annual Report on Form 10-K for the year ended December 31, 2024.

The Company has made estimates and judgments affecting the amounts reported in its condensed consolidated financial statements and the accompanying notes. The actual results that the Company experiences may differ materially from its estimates. The interim financial information is unaudited and reflects all normal adjustments that are, in the Company’s opinion, necessary to provide a fair statement of results for the interim periods presented. This report should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

2. Revenue recognition

Contract balances

Contract liabilities are recorded as deferred revenue when cash payments are received or due in advance of the satisfaction of performance obligations. As of September 30, 2025 and December 31, 2024, contract liabilities were $1.6 million and $1.1 million, respectively. During the three and nine months ended September 30, 2025, the Company recognized $0.2 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 nine months ended September 30, 2024, the Company recognized $0.8 million and $3.0 million, respectively, as revenue that had been included in deferred revenue at the beginning of the period.

Concentration of risk

During the three and nine months ended September 30, 2025, two partners represented approximately 93% andthree partners represented 98% of total partner program revenue, respectively. During the three and nine months ended September 30, 2024, two partners represented 100% of total partner program revenue.

3. Collaborative arrangements

As of September 30, 2025, the Company has collaborative arrangements with PrecisionLife, Memorial Sloan Kettering Cancer Center, Twist Bioscience, and Owkin that involve joint research and development activities and for which the parties are exposed to significant risks and rewards dependent on the commercial success of such activities. The Company performs drug creation activities to co-develop product candidates. These arrangements include rights for the parties to share in the potential value created by the programs, as well as cost sharing which may result in payments and/or credits between the parties. The Company’s accounting policy is to present cost sharing payments to and from the Company’s collaborators within research and development expense on the condensed consolidated statements of operations and comprehensive loss. The Company received $0.8 million of cost sharing payments and credits related to collaborative arrangements during the three and nine months ended September 30, 2025. The Company didnot have cost sharing payments related to collaborative arrangements during the three or nine months ended September 30, 2024.

4. Investments

Cash equivalents and marketable securities are classified as available-for-sale and are recorded at fair value on the condensed consolidated balance sheets, with any unrealized gains and losses reported in accumulated other comprehensive loss, which is reflected as a separate component of stockholders’ equity on the Company’s condensed consolidated balance sheets, until realized. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company considers all marketable securities to be current assets as they are available for use in current operations.

The amortized cost and fair value of investments are as follows (in thousands):

Proceeds from maturities of available-for-sale securities were $39.0 million and $65.2 million for the three and nine months ended September 30, 2025, respectively. Proceeds from maturities of available-for-sale securities were $43.0 million and $132.1 million for the three and nine months ended September 30, 2024, respectively. As of September 30, 2025, the Company held $32.6 million of marketable securities with a remaining maturity of greater than one year. There wereno realized gains or losses on securities for the three and nine months ended September 30, 2025 and 2024. Unrealized gains and losses on securities were primarily due to changes in interest rates.

5. Fair value measurements

The Financial Accounting Standards Board (“FASB”) has defined fair value to establish a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets.

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

When quoted market prices are available in active markets, the fair value of assets and liabilities is estimated within Level 1 of the valuation hierarchy.

If quoted prices are not available, then fair values are estimated by using pricing models, quoted prices of assets and liabilities with similar characteristics, or discounted cash flows, within Level 2 of the valuation hierarchy. In cases where Level 1 or Level 2 inputs are not available, the fair values are estimated by using inputs within Level 3 of the hierarchy.

The following tables summarize the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 (in thousands):

The Company reviews trading activity and pricing for its available-for-sale securities as of the measurement date.

There was no change to the value of liabilities measured at fair value using significant unobservable inputs (Level 3) for the nine months ended September 30, 2025. The contingent consideration liability is related to the acquisition of Totient, Inc. and is included in contingent consideration on the condensed consolidated balance sheet as of September 30, 2025 and December 31, 2024. The fair value estimate is based on a probability-weighted approach on conditions that existed as of September 30, 2025 (See Note 11: Subsequent events) . The contingent consideration of $15.0 million held in escrow shall be paid upon the achievement of the milestone of either entering into agreements meeting certain financial criteria with third parties using, or relating to, Totient technology or the first commercial sale of a Totient product. The contingent consideration held in escrow is included in restricted cash on the condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024.

The carrying amount of long-term debt approximates fair value.

6. Commitments and contingencies

The Company has access to compute capacity and other services through an agreement with Oracle Cloud Infrastructure (OCI) through early 2028. The remaining financial commitments for the years 2025, 2026, 2027, and 2028 are $0.7 million, $4.6 million, $8.3 million, and $2.3 million, respectively.

7. Common stock

Shelf registration statement on Form S-3

In August 2022, the Company filed a shelf registration statement on Form S-3 (the Prior Shelf Registration Statement) with the SEC relating to the registration of up to an aggregate of $250.0 million in shares of the Company’s common stock, preferred stock, debt securities, warrants and units or any combination thereof. In July 2025, the Company has issued 16,670,000 shares and received $46.7 million in net proceeds from the sale of securities pursuant to the Prior Shelf Registration Statement.

In August 2025, the Company filed a shelf registration statement on Form S-3 (the Shelf Registration Statement) with the SEC relating to the registration of up to an aggregate of $400.0 million in shares of the Company’s common stock, preferred stock, debt securities, warrants and units or any combination thereof. During the nine months ended September 30, 2025, the Company has not issued any shares pursuant to the Shelf Registration Statement.

At-the-market offering

In June 2023, the Company entered into a Sales Agreement with Cowen and Company, LLC, as Sales Agent (the “Prior Sales Agreement”), with respect to an “at the market offering” program under which the Company had the ability to offer and sell, from time to time, shares of its common stock, par value $0.0001 per share, having an aggregate offering price of up to $100.0 million through the Sales Agent. The Company agreed to pay the Sales Agent a commission up to 3.0% of the gross sales proceeds of any shares sold under the Prior Sales Agreement. During the nine months ended September 30, 2025, the Company has issued 10,377,752 shares and received $35.7 million in net proceeds from the sale of securities pursuant to the Prior Sales Agreement.

In August 2025, the Company entered into a Sales Agreement with TD Securities (USA) LLC, as Sales Agent (the “Sales Agreement”), with respect to an “at the market offering” program under which the Company may offer and sell, from time to time, shares of its common stock having an aggregate offering price of up to $100.0 million through the Sales Agent. The Company has agreed to pay the Sales Agent a commission of up to 3.0% of the gross proceeds of any shares sold under the Sales Agreement. Upon execution, the Sales Agreement terminated and superseded the Prior Sales Agreement in its entirety. During the nine months ended September 30, 2025, the Company did not issue any shares of common stock under the Sales Agreement.

Private investment in public equity

In January 2025, the Company entered into a strategic collaboration with Advanced Micro Devices, Inc. (AMD) and sold an aggregate of 5,714,285 shares of the Company’s common stock to AMD for net proceeds of $20.0 million through a private investment in public equity (PIPE). This strategic collaboration with AMD has a goal to optimize the performance of AMD Instinct TM accelerators and ROCm TMsoftware to support the Company’s AI drug creation, including its de novo antibody design models. The issuance of stock to AMD was at a premium of approximately $2.5 million over the market price on the issuance date. The premium was recorded to accrued expenses and other long-term liabilities on the condensed consolidated balance sheet and will be recognized as a credit to research and development expense over the collaboration term. The amortization of the premium was $0.2 million and $0.5 million for the three and nine months ended September 30, 2025, respectively.

8. Stock-based compensation

The Company grants stock options, restricted stock units, and stock appreciation rights (“SARs”) under the 2021 Stock Option and Incentive Plan (“2021 Plan”) and the 2023 Inducement Plan (the “2023 Inducement Plan”). On January 1, 2025, the number of shares of common stock reserved for future issuance under the 2021 Plan was increased by 5,768,113 shares pursuant to an automatic annual increase. As of September 30, 2025,5,483,484 shares were available for future grant under the 2021 Plan. As of September 30, 2025,1,724,200 shares were available for future grant under the 2023 Inducement 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):

Stock options

Activity for stock options is shown below:

As of September 30, 2025, total unrecognized stock-based compensation related to stock options was $22.0 million, which the Company expects to recognize over a remaining weighted average period of 2.1 years.

Determination of fair value

The estimated grant-date fair value of all the Company’s stock options was calculated using the Black-Scholes option pricing model, based on the following assumptions:

Restricted stock units

Activity for restricted stock units is shown below:

As of September 30, 2025, there was $5.9 million of unrecognized compensation expense related to the outstanding restricted stock units expected to be recognized over a remaining weighted-average period of 1.9 years.

9. Net loss per share

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

The common stock issuable upon the conversion or exercise of the following dilutive securities has been excluded from the diluted net loss per share calculation because their effect would have been anti-dilutive. Diluted net loss per share, therefore, does not differ from basic net loss per share for the periods presented.

The following potentially dilutive securities, presented based on amounts outstanding at period end, were excluded from the calculation of diluted net loss per share attributable to common stockholders because including them would be anti-dilutive:

10. Segment reporting

The Company hasone reportable segment.

The Company’s Chief Operating Decision Maker (the “CODM”), its Chief Executive Officer, manages the Company’s operations on a consolidated basis for the purposes of allocating resources, making operating decisions and evaluating performance. When evaluating the Company’s financial performance, the CODM regularly reviews total expenses by expense category and the CODM makes decisions using this information on a consolidated basis. There are no other measures of profitability used by the CODM, other than those disclosed in these condensed consolidated financial statements.

The table below is a summary of the significant segment expenses (in thousands) provided to the Company’s CODM on a regular basis:

(1) “Drug creation programs and platform” consists of research and development costs incurred related to the Company’s internally developed programs and drug creation partnership programs for activities prior to the nomination of a development candidate and the continued development of the Company’s Integrated Drug Creation platform.

(2) “External preclinical and clinical development” expense consists of external costs incurred following the Company’s nomination of a development candidate, including all subsequent contract research services, contract manufacturing, consulting fees, and other external costs related to preclinical and clinical development.

(3) “Personnel” expense consists of all employee wages, taxes, benefits, other employee related costs.

11. Subsequent events

In October 2025, the Company entered into an agreement with the selling stockholders of Totient to settle the contingent consideration liability for a payment of approximately $7.6 million and to release the remaining $8.7 million, held as restricted cash on the condensed consolidated balance sheets, from escrow to the Company.