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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 June 30, 2022
OR
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)
Delaware873185-2786970
(State or other jurisdiction of incorporation or organization)(Primary Standard Industrial
Classification Code Number)
(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 classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, $0.01 par valueMRVIThe 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 filerýAccelerated 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 July 29, 2022, 131,539,642 shares of the registrant’s Class A common stock were outstanding and 123,669,196 shares of the registrant’s Class B common stock were outstanding.
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TABLE OF CONTENTS
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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 our control.
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 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.
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.
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.
3

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 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.

4

Part I.
Item 1. Financial Statements and Supplementary Data
MARAVAI LIFESCIENCES HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
(Unaudited)
June 30, 2022December 31, 2021
Assets
Current assets:
Cash$550,676 $551,272 
Accounts receivable, net120,354 117,512 
Inventory60,113 51,557 
Prepaid expenses and other current assets19,664 19,698 
Government funding receivable8,575  
Total current assets759,382 740,039 
Property and equipment, net46,956 46,332 
Goodwill283,535 152,766 
Intangible assets, net229,153 117,571 
Deferred tax assets780,354 808,117 
Other assets72,419 53,451 
Total assets$2,171,799 $1,918,276 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$23,267 $8,154 
Accrued expenses and other current liabilities43,641 34,574 
Deferred revenue5,435 10,211 
Current portion of payable to related parties pursuant to a Tax Receivable Agreement34,747 34,838 
Current portion of long-term debt5,440 6,000 
Total current liabilities112,530 93,777 
Long-term debt, less current portion523,655 524,591 
Payable to related parties pursuant to a Tax Receivable Agreement, less current portion711,232 713,481 
Other long-term liabilities50,590 41,066 
Total liabilities1,398,007 1,372,915 
Stockholders' equity:
Class A common stock, $0.01 par value - 500,000 shares authorized; 131,539 and 131,488 shares issued and outstanding as of June 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 June 30, 2022 and December 31, 2021
1,237 1,237 
Additional paid-in capital131,373 128,386 
Retained earnings322,663 184,561 
Total stockholders' equity attributable to Maravai LifeSciences Holdings, Inc.456,588 315,499 
Non-controlling interest317,204 229,862 
Total stockholders' equity773,792 545,361 
Total liabilities and stockholders' equity$2,171,799 $1,918,276 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5

MARAVAI LIFESCIENCES HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(Unaudited)

Three Months Ended
June 30,
Six Months Ended
June 30,
20222021
(as adjusted)*
20222021
(as adjusted)*
Revenue$242,732 $217,775 $487,025 $365,986 
Operating expenses:
Cost of revenue37,496 37,811 77,528 69,202 
Selling, general and administrative28,061 24,500 61,261 47,971 
Research and development4,274 1,929 7,969 4,089 
Change in estimated fair value of contingent consideration(7,800) (7,800) 
Total operating expenses62,031 64,240 138,958 121,262 
Income from operations180,701 153,535 348,067 244,724 
Other income (expense):
Interest expense(4,434)(7,649)(7,098)(15,553)
Loss on extinguishment of debt  (208) 
Change in payable to related parties pursuant to a Tax Receivable Agreement  2,340 5,886 
Other expense(1,275)(3)(1,268) 
Income before income taxes174,992 145,883 341,833 235,057 
Income tax expense18,271 11,386 38,252 25,095 
Net income156,721 134,497 303,581 209,962 
Net income attributable to non-controlling interests85,481 85,354 165,479 137,717 
Net income attributable to Maravai LifeSciences Holdings, Inc.$71,240 $49,143 $138,102 $72,245 
Net income per Class A common share attributable to Maravai LifeSciences Holdings, Inc.:
Basic$0.54 $0.44 $1.05 $0.69 
Diluted$0.53 $0.44 $1.03 $0.69 
Weighted average number of Class A common shares outstanding:
Basic131,524 112,203 131,506 104,468 
Diluted255,361 112,280 255,324 257,686 
____________________
*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.
The accompanying notes are an integral part of these condensed consolidated financial statements.
6

MARAVAI LIFESCIENCES HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(Unaudited)

Three Months Ended
June 30,
Six Months Ended
June 30,
20222021
(as adjusted)*
20222021
(as adjusted)*
Net income$156,721 $134,497 $303,581 $209,962 
Other comprehensive income:
Foreign currency translation adjustments 8  16 
Total other comprehensive income156,721 134,505 303,581 209,978 
Comprehensive income attributable to non-controlling interests85,481 85,359 165,479 137,728 
Total comprehensive income attributable to Maravai LifeSciences Holdings, Inc.$71,240 $49,146 $138,102 $72,250 
____________________
*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.
The accompanying notes are an integral part of the condensed consolidated financial statements.
7

MARAVAI LIFESCIENCES HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands)
(Unaudited)

Three Months Ended June 30, 2022
Class A Common StockClass B Common Stock
SharesAmountSharesAmountAdditional Paid-In CapitalRetained EarningsNon-Controlling InterestTotal Stockholders' Equity
March 31, 2022131,490$1,315 123,669$1,237 $128,584 $251,423 $271,743 $654,302 
Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes49 — — — 1,114 — — 1,114 
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC— — — — (480)— 480  
Stock-based compensation— — — — 2,220 — 2,088 4,308 
Distribution for tax liabilities to non-controlling interest holder— — — — (65)— (42,588)(42,653)
Net income— — — — — 71,240 85,481 156,721 
June 30, 2022131,539$1,315 123,669$1,237 $131,373 $322,663 $317,204 $773,792 

Six Months Ended June 30, 2022
Class A Common StockClass B Common Stock
SharesAmountSharesAmountAdditional Paid-In CapitalRetained EarningsNon-Controlling InterestTotal Stockholders' Equity
December 31, 2021131,488$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 taxes51 — — — 1,148 — — 1,148 
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC— — — — (494)— 494  
Stock-based compensation— — — — 4,089 — 3,846 7,935 
Distribution for tax liabilities to non-controlling interest holder— — — — (65)— (82,477)(82,542)
Impact of change to deferred tax asset associated with cash contribution to Topco LLC
— — — — (1,691)— — (1,691)
Net income— — — — — 138,102 165,479 303,581 
June 30, 2022131,539$1,315 123,669$1,237 $131,373 $322,663 $317,204 $773,792 
8

MARAVAI LIFESCIENCES HOLDINGS, INC.
Three Months Ended June 30, 2021
Class A Common StockClass B Common Stock
SharesAmountSharesAmountAdditional Paid-In CapitalAccumulated Other Comprehensive LossRetained EarningsNon-Controlling InterestTotal Stockholders' Equity
March 31, 202196,647$966 160,974$1,610 $85,976 $(42)$25,626 $99,687 $213,823 
Effect of exchange of LLC Units
17,666 177 (17,666)(177)12,129 — — (12,129) 
Recognition of impact of Tax Receivable Agreement due to exchanges of LLC Units
— — — — 18,940 — — — 18,940 
Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes39 — — — 785 — — — 785 
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC— — — — (420)— — 420  
Stock-based compensation— — — — 1,039 — — 1,344 2,383 
Distribution for tax liabilities to non-controlling interest holder— — — — 37 — — (33,112)(33,075)
Net income— — — — — — 49,143 85,354 134,497 
Foreign currency translation adjustment— — — — — 3 — 5 8 
June 30, 2021
(as adjusted)*
114,352$1,143 143,308$1,433 $118,486 $(39)$74,769 $141,569 $337,361 
____________________
*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.
9

MARAVAI LIFESCIENCES HOLDINGS, INC.
Six Months Ended June 30, 2021
Class A Common StockClass B Common Stock
SharesAmountSharesAmountAdditional Paid-In CapitalAccumulated Other Comprehensive LossRetained EarningsNon-Controlling InterestTotal Stockholders' Equity
December 31, 202096,647$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
17,666 177 (17,666)(177)12,129 — — (12,129) 
Recognition of impact of Tax Receivable Agreement due to exchanges of LLC Units
— — — — 18,940 — — — 18,940 
Issuance of Class A common stock under employee equity plans, net of shares withheld for employee taxes39 — — — 785 — — — 785 
Non-controlling interest adjustment for changes in proportionate ownership in Topco LLC— — — — (420)— — 420  
Stock-based compensation— — — — 1,893 — — 2,768 4,661 
Distribution for tax liabilities to non-controlling interest holder— — — — 34 — — (56,237)(56,203)
Net income— — — — — — 72,245 137,717 209,962 
Foreign currency translation adjustment— — — — — 5 — 11 16 
June 30, 2021
(as adjusted)*
114,352$1,143 143,308$1,433 $118,486 $(39)$74,769 $141,569 $337,361 
____________________
*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.
The accompanying notes are an integral part of the condensed consolidated financial statements.
10

MARAVAI LIFESCIENCES HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Six Months Ended
June 30,
20222021
(as adjusted)*
Operating activities:
Net income$303,581 $209,962 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation3,747 2,871 
Amortization of intangible assets11,779 10,081 
Amortization of right-of-use assets2,639 3,510 
Amortization of deferred financing costs1,410 1,319 
Stock-based compensation expense7,935 4,661 
Loss on extinguishment of debt208  
Deferred income taxes26,073 18,211 
Change in estimated fair value of contingent consideration(7,800) 
Revaluation of liabilities under the Tax Receivable Agreement(2,340)(5,886)
Other(1,283)(101)
Changes in operating assets and liabilities:
Accounts receivable(2,332)(36,471)
Inventory(7,502)(18,494)
Prepaid expenses and other assets(10,052)(5,070)
Accounts payable6,310 4,161 
Accrued expenses and other current liabilities(1,773)(12,544)
Deferred revenue(4,776)31,430 
Other long-term liabilities759 (3,375)
Net cash provided by operating activities326,583 204,265 
Investing activities:
Cash paid for acquisition of a business, net of cash acquired(238,836) 
Purchases of property and equipment(4,409)(7,865)
Proceeds from sale of building 548 
Net cash used in investing activities(243,245)(7,317)
Financing activities:
Distributions for tax liabilities to non-controlling interests holders(82,477)(56,203)
Proceeds from borrowings of long-term debt8,455  
Principal repayments of long-term debt(11,175)(3,000)
Proceeds from employee stock purchase plan and exercise of stock options, net of shares withheld for employee taxes
1,263 1,018 
Net cash used in financing activities(83,934)(58,185)
Effects of exchange rate changes on cash 13 
Net (decrease) increase in cash including cash classified within current assets held for sale(596)138,776 
Less: Net increase in cash classified within current assets held for sale (250)
Net (decrease) increase in cash(596)138,526 
Cash, beginning of period551,272 236,184 
Cash, end of period$550,676 $374,710 
Supplemental cash flow information:
Cash paid for interest$6,132 $13,972 
Cash paid for income taxes$13,856 $9,087 
11

MARAVAI LIFESCIENCES HOLDINGS, INC.
Six Months Ended
June 30,
20222021
(as adjusted)*
Supplemental disclosures of non-cash investing and financing activities:
Property and equipment included in accounts payable and accrued expenses$2,145 $1,035 
Right-of-use assets obtained in exchange for new operating lease liabilities$773 $ 
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$ $137,706 
Recognition of deferred tax assets as a result of exchange of LLC Units$ $156,647 
____________________
*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.
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 principal businesses: Nucleic Acid Production, Biologics Safety Testing and Protein Detection. In September 2021, the Company completed the divestiture of its Protein Detection business. 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. 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
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 their respective subsidiaries. Prior to the Company’s divestiture of its Protein Detection business in September 2021, Topco LLC also operated and controlled Vector Laboratories, Inc. and its subsidiaries (“Vector”).
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 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 six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or for any future period.
The condensed consolidated balance sheet presented as of December 31, 2021, 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 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
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the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 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 payable to related parties pursuant to the Tax Receivable Agreement (as defined in Note 10), the realizability of our net deferred tax assets, and 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 Form 10-K. Except as noted below, there have been no material changes in the Company’s significant accounting policies during the three and six months ended June 30, 2022.
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, biologics safety testing and protein detection. 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 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 of 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 were delivered.
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
14

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.
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.
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 June 30, 2022 and December 31, 2021.
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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 $7.5 million and $12.6 million as of June 30, 2022 and December 31, 2021, respectively. Contract liabilities are expected to be recognized into 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 June 30, 2022
Nucleic Acid ProductionBiologics Safety TestingTotal
North America$82,015$7,172$89,187
Europe, the Middle East and Africa113,4614,578118,039
Asia Pacific29,7375,60535,342
Latin and Central America35129164
Total revenue$225,248$17,484$242,732
Six Months Ended June 30, 2022
Nucleic Acid ProductionBiologics Safety TestingTotal
North America$161,433$14,691$176,124
Europe, the Middle East and Africa244,8119,275254,086
Asia Pacific42,60413,93356,537
Latin and Central America50228278
Total revenue$448,898$38,127$487,025
Three Months Ended June 30, 2021
Nucleic Acid ProductionBiologics Safety TestingProtein DetectionTotal
North America$65,715$6,437$4,197$76,349
Europe, the Middle East and Africa106,0463,8991,892111,837
Asia Pacific20,7607,66891329,341
Latin and Central America20444248
Total revenue$192,521$18,208$7,046$217,775
Six Months Ended June 30, 2021
Nucleic Acid ProductionBiologics Safety TestingProtein DetectionTotal
North America$133,847$12,849$7,949$154,645
Europe, the Middle East and Africa153,9448,2483,360165,552
Asia Pacific28,64514,4032,27345,321
Latin and Central America1735794468
Total revenue$316,453$35,857$13,676$365,986
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.
Non-Controlling Interests
Non-controlling interests represent the portion of profit or loss, net assets and comprehensive income of our consolidated subsidiaries that is not allocable to the Company based on our percentage of ownership of such entities.
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In November 2020, following the completion of the Organizational Transactions, we became the sole managing member of Topco LLC. As of June 30, 2022, we held approximately 51.5% of the outstanding LLC Units of Topco LLC, and MLSH 1 held approximately 48.5% 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 June 30, 2022. 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 and condensed consolidated statements of comprehensive 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, MLSH 1 executed an exchange of Paired Interests prior to the April 2021 Secondary Offering. For the six months ended June 30, 2022, MLSH 1 did not exchange any Paired Interests.
Exchange and Secondary Offering
In April 2021, MLSH 1 executed an exchange of 17,665,959 LLC Units (paired with 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 in the condensed consolidated statements of income.
Distributions of $42.6 million and $82.5 million for tax liabilities were made to MLSH 1 during the three and six months ended June 30, 2022, respectively. Distributions of $33.1 million and $56.2 million for tax liabilities were made to MLSH 1 during the three and six months ended June 30, 2021, respectively.
Segment Information
The Company has historically operated in three reportable segments. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker (“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 the divestiture of Vector in September 2021, the Company no longer has the Protein Detection segment. The Company has reported the historical results of the Protein Detection business as such discrete financial information evaluated by the CODM for the periods presented included the information for this legacy segment. As of June 30, 2022, the Company operated in two reportable segments: Nucleic Acid Production and Biologics Safety Testing.
Net Income per Class A Common Share Attributable to Maravai LifeSciences Holdings, Inc.
Basic net income per Class A common share attributable to Maravai LifeSciences Holdings, Inc. is computed by dividing net income attributable to us by the weighted average number of Class A common shares outstanding during the period. Diluted net 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 income attributable to Maravai LifeSciences Holdings, Inc. for the three and six months ended June 30, 2022 and 2021.