0001601830-22-000035 | 10-Q | XBRL Viewer | Recursion Pharmaceuticals INC

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Commitments and Contingencies (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Loss contingency accrual	$ 0	$ 0

Collaborative Development Contracts (Details) $ in Thousands	1 Months Ended			3 Months Ended		9 Months Ended
	Jan. 31, 2022 USD ($) phenomap program performance_obligation	Oct. 31, 2020 USD ($)	Aug. 31, 2020 USD ($) performance_obligation project	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenue				$ 13,160	$ 2,534	$ 26,167	$ 7,645
Unearned revenue				46,753		46,753		$ 10,000
Unearned revenue, non-current				93,909		93,909		6,667
Operating revenue
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenue				13,053	$ 2,500	26,005	$ 7,500
Unearned revenue								2,500
Unearned revenue, non-current								$ 7,500
Roche and Genentech
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Remaining unearned revenue	$ 150,000			150,000		150,000
Number of performance obligations under the agreement (in performance obligations) \| performance_obligation	3
Remaining performance obligation revenue	$ 150,000
Unearned revenue				$ 6,500		$ 6,500
Roche and Genentech \| Phenomaps creation
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research project, fees and milestones payments receivable for an option on a lead series	$ 250,000
Number of eligible phenomaps (in phenomaps) \| phenomap	16
Roche and Genentech \| Phenomaps raw images
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research project, fees and milestones payments receivable for an option on a lead series	$ 250,000
Number of eligible phenomaps (in phenomaps) \| phenomap	12
Roche and Genentech \| Developed and commercialized programs
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research project, fees and milestones payments receivable for an option on a lead series	$ 300,000
Number of projects that may be initiated (in projects) \| program	40
Roche and Genentech \| Gastrointestinal cancer
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of performance obligations under the agreement (in performance obligations) \| performance_obligation	1
Roche and Genentech \| Neuroscience
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of performance obligations under the agreement (in performance obligations) \| performance_obligation	2
Bayer AG \| Collaborative arrangement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research project, fees and milestones payments receivable for an option on a lead series		$ 100,000
Number of projects that may be initiated (in projects) \| project			10
Number of performance obligations under the agreement (in performance obligations) \| performance_obligation			1
Remaining performance obligation revenue			$ 30,000
Collaborative agreement, term			5 years
Non-refundable upfront payment received		30,000
Research project, fees and milestones payments receivable for an option on a development candidate		$ 120,000

Stock-Based Compensation - Schedule of Share-based Payment Award, Stock Options, Valuation Assumption (Details) - Stock based compensation	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	6 years 2 months 12 days	6 years 2 months 12 days
Expected volatility	63.00%	66.00%
Expected dividend yield	0.00%	0.00%
Risk-free interest rate	1.90%	1.00%

Goodwill and Intangible Assets (Details) - USD ($)	3 Months Ended		9 Months Ended
Goodwill and Intangible Assets (Details) - USD ($)	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Change in carrying amount of goodwill	$ 0	$ 0	$ 0	$ 0
Goodwill impairment	0	0	0	0
Intangible Assets, Net
Gross carrying amount	1,211,000		1,211,000		$ 911,000
Accumulated Amortization	(658,000)		(658,000)		(430,000)
Net carrying amount	553,000		553,000		481,000
Indefinite-lived intangible asset	904,000		904,000		904,000
Intangible assets, gross	2,115,000		2,115,000		1,815,000
Intangible assets, net	1,457,000		1,457,000		$ 1,385,000
Amortization expense	76,000	228,000	76,000	228,000
Impairment of indefinite-lived intangible assets	$ 0	$ 0	$ 0	$ 0

Stock-Based Compensation - Summary of Stock-based Compensation Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based payment arrangement, expense	$ 8,653	$ 3,096	$ 19,498	$ 9,771
Cost of revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based payment arrangement, expense	732	0	1,560	0
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based payment arrangement, expense	3,674	1,305	7,404	3,000
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based payment arrangement, expense	$ 4,247	$ 1,791	$ 10,534	$ 6,771

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables summarize the Company’s assets and liabilities that are measured at fair value on a recurring basis:


			Basis of fair value measurement
(in thousands)	September 30, 2022		Level 1		Level 2		Level 3
Assets
Cash equivalents:
Money market funds	$	401,847	$	401,847	$	—	$	—
Restricted cash	10,244		10,244		—		—
Total assets	$	412,091	$	412,091	$	—	$	—


			Basis of fair value measurement
(in thousands)	December 31, 2021		Level 1		Level 2		Level 3
Assets
Cash equivalents:
Money market funds	$	155,731	$	155,731	$	—	$	—
Commercial paper	12,000		—		12,000		—
Corporate bonds	200		—		200		—
Restricted cash	10,233		10,233		—		—
Investments:
U.S. government debt	19,927		—		19,927		—
Corporate bonds	61,177		—		61,177		—
Certificates of deposit	21,440		—		21,440		—
Commercial paper	128,902		—		128,902		—
Total assets	$	409,610	$	165,964	$	243,646	$	—

Fair Value Disclosure of Asset and Liability Not Measured at Fair Value

The following tables summarize the Company’s financial instruments that are not measured at fair value:


	Book values				Fair values
(in thousands)	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Liabilities
Current portion of notes payable	$	95	$	90	$	95	$	90
Notes payable, net of current portion	561		633		561		633
Total liabilities	$	656	$	723	$	656	$	723

Leases - Maturities of Operating Lease Liabilties (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jan. 01, 2022
Leases [Abstract]
Remainder of 2022	$ 2,168
2023	9,490
2024	8,428
2025	8,612
2026	8,863
Thereafter	32,963
Total lease payments	70,524
Less: imputed interest	(18,990)
Present value of lease liabilities	$ 51,534	$ 47,800

Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized (in shares)	2,000,000,000	2,000,000,000
Common stock, shares issued (in shares)	174,072,906	170,272,462
Common sock, shares outstanding (in shares)	174,072,906	170,272,462
Class A
Common stock, shares authorized (in shares)	1,989,032,117	1,989,032,117
Common stock, shares issued (in shares)	166,187,697	160,906,245
Common sock, shares outstanding (in shares)	166,187,697	160,906,245
Class B
Common stock, shares authorized (in shares)	10,967,883	10,967,883
Common stock, shares issued (in shares)	7,885,209	9,366,217
Common sock, shares outstanding (in shares)	7,885,209	9,366,217

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2022
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsOn October 27, 2022, Recursion closed on a Stock Purchase Agreement for a Private Placement with certain qualified institutional buyers and institutional accredited investors, pursuant to which the Company sold an aggregate of 15,336,734 shares of the Company’s Class A shares at a purchase price of $9.80 per share for gross proceeds of approximately $150.3 million, before deducting placement agent fees and other expenses. As of the time of the closing of the Private Placement, the shares issued were not registered under the Securities Act of 1933, as amended. In connection with the Private Placement, the Company and the purchasers entered into a Registration Rights Agreement providing for the registration for resale of the shares. On October 28, 2022, Recursion filed a prospectus supplement, registering the shares issued in the Private Placement for resale. The Company has agreed to use commercially reasonable efforts to keep the registration statement continuously effective until such date that all Registrable Securities (as such term is defined in the Registration Rights Agreement) covered by the registration statement or prospectus supplement have been sold.

Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022
Leases [Abstract]
Operating lease cost	$ 2,017	$ 5,801
Variable lease cost	102	772
Lease cost	$ 2,119	$ 6,573

Supplemental Financial Information - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Jul. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2018	Sep. 30, 2019
Property, Plant and Equipment [Line Items]
Depreciation		$ 2,900	$ 2,500	$ 8,300	$ 6,300
Impairment of leasehold improvements				2,800
Loss on extinguishment of debt				$ 0	$ 827
Station 41 lease \| Notes payable
Property, Plant and Equipment [Line Items]
Proceeds from issuance of long-term debt						$ 992
Debt instrument, term						10 years
Debt Instrument, interest rate						8.00%
Midcap loan agreement, tranche 1 \| Line of credit
Property, Plant and Equipment [Line Items]
Maximum borrowing capacity							$ 11,900
Repayments of debt	$ 12,700
Midcap loan agreement \| Line of credit
Property, Plant and Equipment [Line Items]
Loss on extinguishment of debt	$ 996

Fair Value Measurements - Assets and Liabilities Measured on Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Restricted cash	$ 10,244	$ 10,233
Total assets	412,091	409,610
U.S. government debt
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		19,927
Corporate bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		61,177
Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		21,440
Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		128,902
Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	401,847	155,731
Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents		12,000
Corporate bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents		200
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Restricted cash	10,244	10,233
Total assets	412,091	165,964
Level 1 \| U.S. government debt
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		0
Level 1 \| Corporate bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		0
Level 1 \| Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		0
Level 1 \| Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		0
Level 1 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	401,847	155,731
Level 1 \| Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents		0
Level 1 \| Corporate bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents		0
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Restricted cash	0	0
Total assets	0	243,646
Level 2 \| U.S. government debt
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		19,927
Level 2 \| Corporate bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		61,177
Level 2 \| Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		21,440
Level 2 \| Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		128,902
Level 2 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	0	0
Level 2 \| Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents		12,000
Level 2 \| Corporate bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents		200
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Restricted cash	0	0
Total assets	0	0
Level 3 \| U.S. government debt
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		0
Level 3 \| Corporate bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		0
Level 3 \| Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		0
Level 3 \| Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments		0
Level 3 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	$ 0	0
Level 3 \| Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents		0
Level 3 \| Corporate bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents		$ 0

Collaborative Development Contracts	9 Months Ended
Collaborative Development Contracts	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Collaborative Development Contracts	Collaborative Development Contracts Roche and Genentech Description In December 2021, Recursion entered into a collaboration and license agreement with Roche and Genentech (collectively referred to as Roche). Recursion is constructing, using the Company’s imaging technology and proprietary machine-learning algorithms, unique maps of the inferred relationships amongst perturbation phenotypes in a given cellular context with the goal to discover and develop therapeutic small molecule programs in a gastrointestinal cancer indication and in key areas of neuroscience. Roche and Recursion will collaborate to select certain novel inferences with respect to small molecules or targets generated from the Phenomaps for further validation and optimization as collaboration programs. Roche and Recursion may also combine sequencing datasets from Roche with Recursion’s Phenomaps and collaborate to generate new algorithms to produce multi-modal maps from which additional collaboration programs may be initiated. For every collaboration program that successfully identifies potential therapeutic small molecules or validates a target, Roche will have an option to obtain an exclusive license to develop and commercialize such potential therapeutic small molecules or to exploit such target in the applicable exclusive field. Pricing In January 2022, Recursion received a $150.0 million non-refundable upfront payment from the Company’s collaboration with Roche. Recursion is eligible for additional milestone payments based on performance progress of the collaboration. Each of the Phenomaps requested by Roche and created by Recursion may be subject to either an initiation fee, acceptance fee or both. Such fees could exceed $250.0 million for 16 accepted Phenomaps. In addition, for a period of time after Roche’s acceptance of certain Phenomaps, Roche will have the option to obtain, subject to payment of an exercise fee, rights to use outside the collaboration the raw images generated in the course of creating those Phenomaps. If Roche exercises its external use option for all 12 eligible Phenomaps, Roche’s associated exercise fee payments to Recursion could exceed $250.0 million. Under the collaboration, Roche may initiate up to 40 programs, each of which, if successfully developed and commercialized, could yield more than $300.0 million in development, commercialization and net revenue milestones for Recursion, as well as tiered royalties on net revenue. Accounting This agreement represents a transaction with a customer and therefore will be accounted for in accordance with ASC 606. Recursion has determined that it has three performance obligations, one related to gastrointestinal cancer and two in neuroscience. These performance obligations are for performing research and development services for Roche to identify targets and medicines. The performance obligations also include potential licenses related to the intellectual property. The Company concluded that licenses within the contract are not distinct from the research and development services as they are interrelated due to the fact that the research and development services significantly impact the potential licenses. Any additional services are considered customer options and will be considered as separate contracts for accounting purposes. The Company has determined the transaction price to be $150.0 million, comprised of the upfront payment. Recursion will fully constrain the amounts of variable consideration to be received from potential milestones considering the stage of development and the risks associated with the remaining development required to achieve each milestone. Recursion will re-evaluate the transaction price each reporting period. The transaction price was allocated to the performance obligations based on the estimated relative stand-alone selling price of each performance obligation as determined using an expected cost plus margin approach. The Company recognizes revenue over time based on costs incurred relative to total expected costs to perform the research and development services. Recursion determined that this method provides a faithful depiction of the transfer of control to the customer. This method of recognizing revenue requires the Company to make estimates of total costs to provide the services required under the performance obligations. Significant inputs used to determine the total costs included the length of time required, service hours performed by Company employees and materials costs. A significant change in these estimates could have a material effect on the timing and amount of revenue recognized in future periods. Recursion has estimated the completion of the performance obligations by 2025. Bayer AG Description In August 2020, the Company entered into a Research Collaboration and Option Agreement (the Bayer Agreement) with Bayer AG (Bayer) for a five-year term pursuant to which the Company and Bayer may initiate approximately 10 research projects related to fibrosis across multiple organ systems, including the lung, liver and heart. Under the agreement, the Company contributed compounds from its proprietary library and Bayer contributed compounds from its proprietary library and will contribute scientific expertise throughout the collaboration. Under each research project, the Company will work with Bayer to identify potential candidates for development. Under the agreement, Bayer has the first option for licenses to potential candidates. Pricing In October 2020, the Company received a $30.0 million non-refundable upfront payment. Each such license could potentially result in option exercise fees and development and commercial milestone payments payable to the Company, with an aggregate value of up to approximately $100.0 million (for an option on a lead series) or up to approximately $120.0 million (for an option on a development candidate), as well as tiered royalties for each such license, ranging from low- to mid-single digit percentages of sales, depending on commercial success. Accounting The Company determined that it has one performance obligation under the agreement, which is to perform research and development services for Bayer. Recursion determined the transaction price to be $30.0 million, comprised of the upfront payment. The Company allocated the amount to the single performance obligation. The Company is recognizing revenue over time by measuring progress towards completion of the performance obligation. This method of recognizing revenue requires the Company to make estimates of the total time to provide the services required under the performance obligation. A significant change in these estimates could have a material effect on the timing and amount of revenue recognized in future periods. For the nine months ended September 30, 2021, cost of revenue for this agreement was insignificant and was included within “Research and development” in the Condensed Consolidated Statement of Operations. Recursion has estimated the completion of the performance obligation by 2023. Additional Revenue Disclosures Recursion recognized $13.1 million and $26.0 million of operating revenue during the three and nine months ended September 30, 2022, respectively, of which $2.5 million and $7.5 million were included in the unearned revenue balance as of December 31, 2021. All revenue recognized during the three and nine months ended September 30, 2021 was included in the unearned revenue balance as of December 31, 2020. Revenue recognized was from upfront payments received at the inception of the related contracts, which decreased the initial unearned revenue recognized. Unearned revenue of $150.0 million was recorded on the Condensed Consolidated Balance Sheet during the nine months ended September 30, 2022 related to the upfront payment from the Roche collaboration. As of September 30, 2022, the Company had $6.5 million of costs incurred to fulfill a contract on its Condensed Consolidated Balance Sheet within “Other current assets.” Unearned revenue was classified as short-term and long-term on the Condensed Consolidated Balance Sheets based on the Company’s estimate of revenue that will be recognized during the next twelve months.

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities
Net loss	$ (181,984)	$ (121,546)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	8,542	6,169
Stock-based compensation	20,214	10,501
Fixed asset impairment	2,806	0
Lease expense	5,747	0
Loss on debt extinguishment	0	827
Other, net	377	2,940
Changes in operating assets and liabilities:
Other receivables and assets	(5,574)	(6,746)
Unearned revenue	123,995	(7,500)
Accounts payable	1,072	5,252
Accrued development expense	3,696	1,524
Accrued expenses, deferred rent and other current liabilities	(12,740)	11,123
Operating lease liabilities	(4,927)	0
Net cash used in operating activities	(38,776)	(97,456)
Cash flows from investing activities
Purchases of property and equipment	(29,080)	(35,334)
Purchase of an intangible asset	(300)	0
Purchases of investments	0	(184,167)
Sales and maturities of investments	230,608	0
Net cash provided by (used in) investing activities	201,228	(219,501)
Cash flows from financing activities
Proceeds from initial public offering of common stock, net of issuance costs	0	462,901
Proceeds from equity incentive plans	7,156	4,620
Repayment of long-term debt	(67)	(12,777)
Net cash provided by financing activities	7,089	454,744
Net change in cash, cash equivalents and restricted cash	169,541	137,787
Cash, cash equivalents and restricted cash, beginning of period	295,349	267,167
Cash, cash equivalents and restricted cash, end of period	464,890	404,954
Supplemental schedule of non-cash investing and financing activities
Conversion of preferred stock to common stock	0	448,312
Accrued property and equipment	3,093	413
Deferred issuance costs recorded in equity	0	547
Right-of-use asset additions and modifications	3,950	0
Supplemental schedule of cash flow information
Cash paid for interest	42	665
Cash paid for operating leases	$ 4,927	$ 0

Common Stock	9 Months Ended
Common Stock	Sep. 30, 2022
Equity [Abstract]
Common Stock	Common Stock Each share of Class A common stock entitles the holder to one vote per share and each share of Class B common stock entitles the holder to 10 votes per share on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the Company’s Board of Directors. As of September 30, 2022 and December 31, 2021, no dividends had been declared. Initial Public Offering On April 20, 2021, the Company closed its IPO and issued 27,878,787 shares of its Class A common stock at a price of $18.00 per share for net proceeds of $462.4 million, after deducting underwriting discounts and commissions of $35.1 million and other offering costs of $4.3 million. In connection with the IPO, all shares of convertible preferred stock converted into 115,598,018 shares of Class A common stock. Stock Split In April 2021, the Board of Directors approved a 1.5-for-1 forward stock split of the Company’s common and convertible preferred stock. Each shareholder of record on April 9, 2021 received 1.5 shares for each then-held share. The split proportionally increased the authorized shares and did not change the par values of the Company’s stock. The split affected all stockholders uniformly and did not affect any stockholder's ownership percentage of the Company's shares of common stock. All shares and per share amounts presented within these Condensed Consolidated Financial Statements were adjusted to reflect the forward stock split for all periods presented. Class A and B Common Shares Authorization In April 2021, the Company’s Board of Directors authorized two classes of common stock, Class A and Class B. The rights of the holders of Class A and B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to 10 votes per share and is convertible at any time into one share of Class A common stock. All Class B common stock is held by Christopher Gibson, Ph.D., the Company’s Chief Executive Officer (CEO), or his affiliates. As of September 30, 2022, Dr. Gibson and his affiliates held outstanding shares of Class B common stock representing approximately 32% of the voting power of the Company’s outstanding shares. This voting power may increase over time as Dr. Gibson vests in and exercises equity awards outstanding. If all the exchangeable equity awards held by Dr. Gibson had been fully vested, exercised and exchanged for shares of Class B common stock as of September 30, 2022, Dr. Gibson and his affiliates would hold approximately 35% of the voting power of the Company’s outstanding shares. As a result, Dr. Gibson will be able to significantly influence any action requiring the approval of Recursion stockholders, including the election of the Board of Directors; the adoption of amendments to the Company’s certificate of incorporation and bylaws; and the approval of any merger, consolidation, sale of all or substantially all of the Company’s assets, or other major corporate transaction.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-Section 50
-Paragraph 18
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 6
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Summary of Stock-based Compensation Expenses

The following table presents the classification of stock-based compensation expense for stock options and RSUs for employees and non-employees within the Condensed Consolidated Statements of Operations:


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2022		2021		2022		2021
Cost of revenue	$	732	$	—	$	1,560	$	—
Research and development	3,674		1,305		7,404		3,000
General and administrative	4,247		1,791		10,534		6,771
Total	$	8,653	$	3,096	$	19,498	$	9,771

Schedule of Share-based Payment Arrangement, Option, Activity

The following table summarizes Recursion’s stock option activity during the nine months ended September 30, 2022:


(in thousands except share data)	Shares	Weighted-average exercise price		Weighted-average remaining contractual life (in years)	Aggregate intrinsic value
Outstanding as of December 31, 2021	19,191,714	$	3.78	8.1	$	260,867
Granted	2,483,336	11.10
Cancelled	(1,435,146)	5.63
Exercised	(3,063,033)	1.79			21,904
Outstanding as of September 30, 2022	17,176,871	$	5.04	7.7	$	113,301
Exercisable as of September 30, 2022	8,769,773	$	3.36	6.9	$	69,776

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The following weighted-average assumptions were used to calculate the grant-date fair value of stock options:


	Nine months ended September 30,
	2022		2021
Expected term (in years)	6.2		6.2
Expected volatility	63	%	66	%
Expected dividend yield	—		—
Risk-free interest rate	1.9	%	1.0	%

Schedule of Nonvested RSU Activity

The following table summarizes Recursion’s RSU activity during the nine months ended September 30, 2022:


	Stock units	Weighted-average grant date fair value
Outstanding as of December 31, 2021	478,136	$	23.40
Granted	7,300,841	7.22
Vested	(476,567)	6.74
Forfeited	(323,970)	9.35
Outstanding as of September 30, 2022	6,978,440	$	8.13

Summary Of Changes In Company's Warrant Liability

The following is a summary of the changes in the Company’s Series A and B warrant liability balance during the nine months ended September 30, 2021:


(in thousands)
Balance as of December 31, 2020	$	125
Increase in fair value of warrants	2,215
Recorded in equity upon exercise	(2,340)
Balance as of September 30, 2021	$	—

Basis of Presentation (Details) $ in Thousands		1 Months Ended
Basis of Presentation (Details) $ in Thousands	Apr. 09, 2021	Apr. 30, 2021	Sep. 30, 2022 USD ($)	Jan. 01, 2022 USD ($)	Dec. 31, 2021 USD ($)
Class of Stock [Line Items]
Stock split, conversion ratio	1.5	1.5
Operating lease right-of-use assets			$ 33,726	$ 32,900	$ 0
Present value of lease liabilities			$ 51,534	$ 47,800
Common Stock (Class A and B)
Class of Stock [Line Items]
Stock split, conversion ratio		1

Stock-Based Compensation - Schedule of Share-based Payment Arrangement, Option, Activity (Details) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Options, outstanding, number at beginning of period (in shares) \| shares	19,191,714
Options, granted in period (in shares) \| shares	2,483,336
Options, cancelled in period (in shares) \| shares	(1,435,146)
Options, exercised in period (in shares) \| shares	(3,063,033)
Options, outstanding, number at end of period (in shares) \| shares	17,176,871	19,191,714
Options, exercisable, number (in shares) \| shares	8,769,773
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Options, outstanding, weighted average exercise price at beginning of period (in dollars per share) \| $ / shares	$ 3.78
Options, grants in period, weighted average exercise price (in dollars per share) \| $ / shares	11.10
Options, cancelled in period, weighted average exercise price (in dollars per share) \| $ / shares	5.63
Options, exercised in period, weighted average exercise price (in dollars per share) \| $ / shares	1.79
Options, outstanding, weighted average exercise price at end of period (in dollars per share) \| $ / shares	5.04	$ 3.78
Options, exercisable, weighted average exercise price (in dollars per share) \| $ / shares	$ 3.36
Options, outstanding, weighted average remaining contractual life	7 years 8 months 12 days	8 years 1 month 6 days
Options, exercisable, weighted average remaining contractual life	6 years 10 months 24 days
Options, outstanding, intrinsic value \| $	$ 113,301	$ 260,867
Options, exercised in period, intrinsic value \| $	21,904
Options, exercisable, intrinsic value \| $	$ 69,776

Stock-Based Compensation - Summary of Warrants Outstanding (Details) - $ / shares	Jul. 31, 2018	May 31, 2017	Dec. 31, 2016
2016 Warrants
Warrants Arrangements [Line Items]
Warrants outstanding (in shares)			84,486
Warrants, exercise price (in dollars per share)			$ 0.71
2017 Warrants
Warrants Arrangements [Line Items]
Warrants outstanding (in shares)		28,161
Warrants, exercise price (in dollars per share)		$ 0.71
2018 Warrants
Warrants Arrangements [Line Items]
Warrants outstanding (in shares)	25,762
Warrants, exercise price (in dollars per share)	$ 2.79

Stock-Based Compensation - Summary Of Changes In Company's Warrant Liability (Details) - Warrants $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value of warrants at beginning of period	$ 125
Increase in fair value of warrants	2,215
Recorded in equity upon exercise	(2,340)
Fair value of warrants at end of period	$ 0

Investments - Type of Security (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Securities, Available-for-sale [Line Items]
Amortized cost	$ 401,847	$ 399,503
Gross unrealized gains	0	3
Gross unrealized losses	0	(129)
Fair values	401,847	399,377
Money market funds
Debt Securities, Available-for-sale [Line Items]
Amortized cost	401,847	155,731
Gross unrealized gains	0	0
Gross unrealized losses	0	0
Fair values	$ 401,847	155,731
U.S. government debt
Debt Securities, Available-for-sale [Line Items]
Amortized cost		19,960
Gross unrealized gains		0
Gross unrealized losses		(33)
Fair values		19,927
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Amortized cost		61,451
Gross unrealized gains		0
Gross unrealized losses		(74)
Fair values		61,377
Certificates of deposit
Debt Securities, Available-for-sale [Line Items]
Amortized cost		21,450
Gross unrealized gains		0
Gross unrealized losses		(10)
Fair values		21,440
Commercial paper
Debt Securities, Available-for-sale [Line Items]
Amortized cost		140,911
Gross unrealized gains		3
Gross unrealized losses		(12)
Fair values		$ 140,902

Common Stock (Details)			1 Months Ended	9 Months Ended	12 Months Ended
Common Stock (Details)	Apr. 20, 2021 USD ($) $ / shares shares	Apr. 09, 2021	Apr. 30, 2021	Sep. 30, 2022 USD ($) vote	Dec. 31, 2021 USD ($)
Class of Stock [Line Items]
Common stock, conversion ratio				1
Dividends declared				$ 0	$ 0
Stock split, conversion ratio		1.5	1.5
Christopher Gibson and his affiliates
Class of Stock [Line Items]
Affiliated holders, ownership percentage				0.32
Affiliated holders, potential ownership percentage when outstanding equity awards vest				0.35
Class A
Class of Stock [Line Items]
Vote per share of common stock (in votes) \| vote				1
Class B
Class of Stock [Line Items]
Vote per share of common stock (in votes) \| vote				10
IPO
Class of Stock [Line Items]
IPO, number of shares issued (in shares) \| shares	27,878,787
Price per share (in dollars per share) \| $ / shares	$ 18.00
IPO, net proceeds received	$ 462,400,000
IPO, underwriting discounts and commissions	35,100,000
IPO, expenses costs	$ 4,300,000
Shares issued in the period, upon conversion (in shares) \| shares	115,598,018

Leases - Future Minimum Payments Prior to ASC 842 Adoption (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Leases [Abstract]
2022	$ 3,977
2023	7,053
2024	7,325
2025	7,513
2026	7,739
Thereafter	26,448
Total minimum payments	$ 60,055

Leases (Tables)

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Components of Lease Cost, Supplemental Cash Flow Information Related to Leases, Lease Term and Discount Rates

The components of the lease cost are as follows:


(in thousands)	Three months ended September 30, 2022		Nine months ended September 30, 2022
Operating lease cost	$	2,017	$	5,801
Variable lease cost	102		772
Lease cost	$	2,119	$	6,573

Lease term and discount rates as of September 30, 2022 were:


(in thousands)
Operating leases
Weighted-average remaining lease term (years)	7.8
Weighted-average discount rate	7.3	%

Maturities of Operating Lease Liabilities

Maturities of operating lease liabilities as of September 30, 2022 were:


(in thousands)	Operating leases
Remainder of 2022	$	2,168
2023	9,490
2024	8,428
2025	8,612
2026	8,863
Thereafter	32,963
Total lease payments	70,524
Less: imputed interest	(18,990)
Present value of lease liabilities	$	51,534

Future Minimum Payments Prior to ASC 842 Adoption

Prior to adoption of ASC 842, future minimum lease payments as of December 31, 2021, as disclosed in our 2021 Annual Report, were:


(in thousands)	Amount
2022	$	3,977
2023	7,053
2024	7,325
2025	7,513
2026	7,739
Thereafter	26,448
Total minimum payments	$	60,055

Description of the Business (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ 582,064	$ 400,080
Proceeds received from strategic partnerships amount	$ 180,000

Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

The fair value hierarchy consists of the following three levels:

•Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets that the company has the ability to access;

•Level 2 — Valuations based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations in which all significant inputs are observable in the market; and

•Level 3 — Valuations using significant inputs that are unobservable in the market and include the use of judgment by the company's management about the assumptions market participants would use in pricing the asset or liability.

The Company is required to maintain a cash balance in a collateralized account to secure the Company’s credit cards. Additionally, the Company holds restricted cash related to an outstanding letter of credit issued by J.P. Morgan, which was obtained to secure certain Company obligations relating to tenant improvements.

The following tables summarize the Company’s assets and liabilities that are measured at fair value on a recurring basis:


			Basis of fair value measurement
(in thousands)	September 30, 2022		Level 1		Level 2		Level 3
Assets
Cash equivalents:
Money market funds	$	401,847	$	401,847	$	—	$	—
Restricted cash	10,244		10,244		—		—
Total assets	$	412,091	$	412,091	$	—	$	—


			Basis of fair value measurement
(in thousands)	December 31, 2021		Level 1		Level 2		Level 3
Assets
Cash equivalents:
Money market funds	$	155,731	$	155,731	$	—	$	—
Commercial paper	12,000		—		12,000		—
Corporate bonds	200		—		200		—
Restricted cash	10,233		10,233		—		—
Investments:
U.S. government debt	19,927		—		19,927		—
Corporate bonds	61,177		—		61,177		—
Certificates of deposit	21,440		—		21,440		—
Commercial paper	128,902		—		128,902		—
Total assets	$	409,610	$	165,964	$	243,646	$	—

In addition to the financial instruments that are recognized at fair value on the Condensed Consolidated Balance Sheet, the Company has certain financial instruments that are recognized at amortized cost or some basis other than fair value. The carrying amount of these instruments are considered to be representative of their approximate fair values.

The following tables summarize the Company’s financial instruments that are not measured at fair value:


	Book values				Fair values
(in thousands)	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Liabilities
Current portion of notes payable	$	95	$	90	$	95	$	90
Notes payable, net of current portion	561		633		561		633
Total liabilities	$	656	$	723	$	656	$	723

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

The Company has entered into various long-term real estate leases primarily related to office, research and development and operating activities. The Company has elected to utilize the package of practical expedients under the transition guidance of Accounting Standards Codification (ASC) Topic 842, Leases, which allows Recursion to not reassess whether any existing contract contains a lease, the classification of any existing leases and initial direct costs for any existing leases. The Company’s leases have remaining terms from 1 to 10 years and some of those leases include options that provide Recursion with the ability to extend the lease term for five years. Such options are included in the lease term when it is reasonably certain that the option will be exercised.

Certain leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes and usage-based amounts. Recursion will recognize these costs as they are incurred. The Company has also elected to apply the practical expedient for short-term leases whereby Recursion does not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months. The Company has

also elected to not separate consideration in the contract between lease and non-lease components of a contract that contains a lease.

Recursion classifies leases as operating or finance at the lease commencement date. All outstanding leases are operating leases. Certain leases have free rent periods or escalating rent payment provisions. The Company recognizes lease cost on a straight-line basis over the term of the lease.

Lease liabilities and right-of-use assets are calculated and recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. The incremental borrowing rate is equal to the rate of interest that Recursion would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. For operating leases that commenced prior to the Company’s adoption of Topic 842, Recursion measured the lease liabilities and right-of-use assets using the incremental borrowing rate as of January 1, 2022.

For the nine months ended September 30, 2022, Recursion entered into several lease modifications resulting in a decrease to the right-of-use assets and lease liabilities of $2.7 million and $2.8 million, respectively. The modifications resulted in an insignificant impact to the Condensed Consolidated Statements of Operations.

In February 2021, the Company entered into a lease agreement for laboratory and office space with approximately 51,869 square feet (the “Industry Lease”). This lease was separated into multiple lease components based on the intended use of the portions of the space. The right of use asset is expected to begin in the first quarter of 2023. The Industry Lease term is five years with a five-year renewal option. The lease includes provisions for escalating rent payments and a tenant improvement allowance of up to $2.1 million. Total fixed lease payments are expected to be approximately $7.6 million with additional variable expenses, including building and amenity expenses. The Company did not control the space or any of the assets being constructed as of September 30, 2022 and therefore no right of use asset or lease liability was recorded on the Condensed Consolidated Balance Sheet as of September 30, 2022.

In May 2022, the Company entered into a lease agreement for laboratory and office space in Toronto, Ontario with approximately 26,320 square feet (the “Toronto Lease”). This lease was separated into multiple lease components based on the intended use of the portions of the space. For some of those components, the right of use began May 2022 when the control of the assets were obtained. The right of use asset for the remaining lease component is expected to begin in the second quarter of 2023. The Toronto Lease terms for each component are ten years with a five-year renewal option. The Toronto Lease includes provisions for escalating rent payments and a tenant improvement allowance of up to $1.5 million. Total fixed payments are expected to be approximately $10.8 million with additional variable expenses, including building expenses.

The components of the lease cost are as follows:


(in thousands)	Three months ended September 30, 2022		Nine months ended September 30, 2022
Operating lease cost	$	2,017	$	5,801
Variable lease cost	102		772
Lease cost	$	2,119	$	6,573

Lease term and discount rates as of September 30, 2022 were:


(in thousands)
Operating leases
Weighted-average remaining lease term (years)	7.8
Weighted-average discount rate	7.3	%

Maturities of operating lease liabilities as of September 30, 2022 were:


(in thousands)	Operating leases
Remainder of 2022	$	2,168
2023	9,490
2024	8,428
2025	8,612
2026	8,863
Thereafter	32,963
Total lease payments	70,524
Less: imputed interest	(18,990)
Present value of lease liabilities	$	51,534

Prior to adoption of ASC 842, future minimum lease payments as of December 31, 2021, as disclosed in our 2021 Annual Report, were:


(in thousands)	Amount
2022	$	3,977
2023	7,053
2024	7,325
2025	7,513
2026	7,739
Thereafter	26,448
Total minimum payments	$	60,055

Total rent expense was $1.7 million and $4.4 million during the three and nine months ended September 30, 2021, respectively.

Supplemental Financial Information - Accruals (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Supplemental Financial Information [Abstract]
Accrued compensation	$ 11,814	$ 11,738
Accrued development expenses	6,546	4,682
Accrued early discovery expenses	1,950	2,114
Accrued construction	1,889	4,665
Accrued professional fees	148	1,793
Accrued other expenses	4,410	7,341
Accrued expenses and other liabilities	$ 26,757	$ 32,333

Investments (Tables)

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-Sale Investments by Type of Security

The following tables summarize the Company’s investment portfolio by type of security:


	September 30, 2022
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair values
Money market funds	$	401,847	$	—	$	—	$	401,847
Total	$	401,847	$	—	$	—	$	401,847


	December 31, 2021
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair values
Money market funds	$	155,731	$	—	$	—	$	155,731
U.S. government debt	19,960		—		(33)		19,927
Corporate bonds	61,451		—		(74)		61,377
Certificates of deposit	21,450		—		(10)		21,440
Commercial paper	140,911		3		(12)		140,902
Total	$	399,503	$	3	$	(129)	$	399,377

Schedule of Available -for-Sale Investments by Balance Sheet Classification

The following table summarizes the classification of the Company’s available-for-sale investments on the Condensed Consolidated Balance Sheets:


(in thousands)	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	401,847	$	167,931
Investments	—		231,446
Total	$	401,847	$	399,377

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

The following table summarizes intangible assets:


	September 30, 2022						December 31, 2021
(in thousands)	Gross carrying amount		Accumulated Amortization		Net carrying amount		Gross carrying amount		Accumulated Amortization		Net carrying amount
Definite-lived intangible asset	$	1,211	$	(658)	$	553	$	911	$	(430)	$	481
Indefinite-lived intangible asset	904		—		904		904		—		904
Intangible assets, net	$	2,115	$	(658)	$	1,457	$	1,815	$	(430)	$	1,385

Schedule of Indefinite-Lived Intangible Assets

The following table summarizes intangible assets:


	September 30, 2022						December 31, 2021
(in thousands)	Gross carrying amount		Accumulated Amortization		Net carrying amount		Gross carrying amount		Accumulated Amortization		Net carrying amount
Definite-lived intangible asset	$	1,211	$	(658)	$	553	$	911	$	(430)	$	481
Indefinite-lived intangible asset	904		—		904		904		—		904
Intangible assets, net	$	2,115	$	(658)	$	1,457	$	1,815	$	(430)	$	1,385

Net Loss Per Share - Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of loss per share, amount (in shares)	12,570,320	16,965,898	10,849,853	62,016,223
Convertible preferred stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of loss per share, amount (in shares)	0	0	0	46,324,206
Stock based compensation
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of loss per share, amount (in shares)	12,570,320	16,801,940	10,849,853	15,511,538
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of loss per share, amount (in shares)	0	163,958	0	180,479

Net Loss Per Share - Schedule of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Denominator:
Weighted average common shares outstanding, basic (in shares)	173,435,970	168,533,550	172,122,974	110,513,231
Weighted average common shares outstanding, diluted (in shares)	173,435,970	168,533,550	172,122,974	110,513,231
Net loss per share, basic (in dollars per shares)	$ (0.35)	$ (0.28)	$ (1.06)	$ (1.10)
Net loss per share, diluted (in dollars per shares)	$ (0.35)	$ (0.28)	$ (1.06)	$ (1.10)
Class A
Numerator:
Undistributed earnings, basic	$ (57,685)	$ (44,763)	$ (173,167)	$ (111,133)
Undistributed earnings, diluted	$ (57,685)	$ (44,763)	$ (173,167)	$ (111,133)
Denominator:
Weighted average common shares outstanding, basic (in shares)	165,518,152	159,065,667	163,783,626	101,045,348
Weighted average common shares outstanding, diluted (in shares)	165,518,152	159,065,667	163,783,626	101,045,348
Net loss per share, basic (in dollars per shares)	$ (0.35)	$ (0.28)	$ (1.06)
Net loss per share, diluted (in dollars per shares)	$ (0.35)	$ (0.28)	$ (1.06)
Class B
Numerator:
Undistributed earnings, basic	$ (2,759)	$ (2,664)	$ (8,817)	$ (10,413)
Undistributed earnings, diluted	$ (2,759)	$ (2,664)	$ (8,817)	$ (10,413)
Denominator:
Weighted average common shares outstanding, basic (in shares)	7,917,818	9,467,883	8,339,348	9,467,883
Weighted average common shares outstanding, diluted (in shares)	7,917,818	9,467,883	8,339,348	9,467,883
Net loss per share, basic (in dollars per shares)	$ (0.35)		$ (1.06)	$ (1.10)
Net loss per share, diluted (in dollars per shares)	$ (0.35)		$ (1.06)	$ (1.10)

Supplemental Financial Information (Tables)

9 Months Ended

Sep. 30, 2022

Supplemental Financial Information [Abstract]

Schedule of Property and Equipment

Property and Equipment


	September 30,		December 31,
(in thousands)	2022		2021
Lab equipment	$	42,692	$	33,076
Leasehold improvements	14,175		13,936
Office equipment	20,005		20,005
Construction in progress	35,957		16,445
Property and equipment, gross	112,829		83,462
Less: Accumulated depreciation	(27,052)		(18,737)
Property and equipment, net	$	85,777	$	64,725

Schedule of Accrued Expenses and Other Liabilities

Accrued Expenses and Other Liabilities


	September 30,		December 31,
(in thousands)	2022		2021
Accrued compensation	$	11,814	$	11,738
Accrued development expenses	6,546		4,682
Accrued early discovery expenses	1,950		2,114
Accrued construction	1,889		4,665
Accrued professional fees	148		1,793
Accrued other expenses	4,410		7,341
Accrued expense and other liabilities	$	26,757	$	32,333

Interest Income and Expense Disclosure

Interest Income (Expense), net


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2022		2021		2022		2021
Interest expense	$	(13)	$	(220)	$	(42)	$	(2,971)
Interest income	1,833		50		2,572		94
Interest income (expense), net	$	1,820	$	(170)	$	2,530	$	(2,877)

Net Loss Per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Net Loss Per Share

For the three and nine months ended September 30, 2022 and 2021, Recursion calculated net loss per share of Class A and Class B common stock using the two-class method. Basic net loss per share is computed using the weighted-average number of shares outstanding during the period. Diluted net loss per share is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of stock options, RSUs and other contingently issuable shares. For periods presented in which the Company reports a net loss, all potentially dilutive shares are anti-dilutive and as such are excluded from the calculation. For the three and nine months ended September 30, 2022 and 2021, the Company reported a net loss and therefore basic and diluted loss per share are the same.

The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A and Class B common stock are identical, except with respect to voting. As a result, the undistributed earnings for each period are allocated based on the contractual participation rights of the Class A and Class B common shares as if the earnings for the period had been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis and the resulting amount per share for Class A and Class B common stock was the same during the three and nine months ended September 30, 2022 and 2021.

The following tables set forth the computation of basic and diluted net loss per share of Class A and Class B common stock:


	Three months ended				Nine months ended
	September 30, 2022				September 30, 2022
(in thousands, except share amount)	Class A		Class B		Class A		Class B
Numerator:
Allocation of undistributed earnings	$	(57,685)	$	(2,759)	$	(173,167)	$	(8,817)
Denominator:
Weighted average common shares outstanding	165,518,152		7,917,818		163,783,626		8,339,348
Net loss per share, basic and diluted	$	(0.35)	$	(0.35)	$	(1.06)	$	(1.06)


	Three months ended				Nine months ended
	September 30, 2021				September 30, 2021
(in thousands, except share amounts)	Class A		Class B		Class A		Class B
Numerator:
Allocation of undistributed earnings	$	(44,763)	$	(2,664)	$	(111,133)	$	(10,413)
Denominator:
Weighted average common shares outstanding	159,065,667		9,467,883		101,045,348		9,467,883
Net loss per share, basic and diluted	$	(0.28)	$	(0.28)	$	(1.10)	$	(1.10)

The Company excluded the following potential common shares from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect:


	Three months ended September 30,		Nine months ended September 30,
	2022	2021	2022	2021
Convertible preferred stock	—	—	—	46,324,206
Stock based compensation	12,570,320	16,801,940	10,849,853	15,511,538
Warrants	—	163,958	—	180,479
Total	12,570,320	16,965,898	10,849,853	62,016,223

Stock-Based Compensation - Schedule of RSU Activity (Details) - Restricted stock	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Stock units
Beginning balance, outstanding (in shares) \| shares	478,136
Granted (in shares) \| shares	7,300,841
Vested (in shares) \| shares	(476,567)
Forfeited (in shares) \| shares	(323,970)
Ending balance, outstanding (in shares) \| shares	6,978,440
Weighted-average grant date fair value
Beginning balance, outstanding Weighted average grant date fair value (in dollars per share) \| $ / shares	$ 23.40
Granted (in dollars per share) \| $ / shares	7.22
Vested (in dollars per share) \| $ / shares	6.74
Forfeited (in dollars per share) \| $ / shares	9.35
Ending balance, outstanding Weighted average grant date fair value (in dollars per share) \| $ / shares	$ 8.13

Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 454,646	$ 285,116
Restricted cash	2,090	1,552
Accounts receivable	0	34
Other receivables	11,635	9,056
Investments	0	231,446
Other current assets	13,247	7,514
Total current assets	481,618	534,718
Restricted cash, non-current	8,154	8,681
Property and equipment, net	85,777	64,725
Operating lease right-of-use assets	33,726	0
Intangible assets, net	1,457	1,385
Goodwill	801	801
Other non-current assets	0	35
Total assets	611,533	610,345
Current liabilities
Accounts payable	3,890	2,819
Accrued expenses and other liabilities	26,757	32,333
Unearned revenue	46,753	10,000
Notes payable	95	90
Operating lease liabilities	5,541	0
Lease incentive obligation	0	1,416
Total current liabilities	83,036	46,658
Deferred rent	0	4,110
Unearned revenue, non-current	93,909	6,667
Notes payable, non-current	561	633
Operating lease liabilities, non-current	45,993	0
Lease incentive obligation, non-current	0	9,339
Total liabilities	223,499	67,407
Commitments and contingencies (Note 7)
Stockholders’ equity
Common stock, $0.00001 par value; 2,000,000,000 shares (Class A 1,989,032,117 and Class B 10,967,883) authorized as of September 30, 2022 and December 31, 2021; 174,072,906 shares (Class A 166,187,697 and Class B 7,885,209) and 170,272,462 shares (Class A 160,906,245 and Class B 9,366,217) issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	2	2
Additional paid-in capital	970,096	943,142
Accumulated deficit	(582,064)	(400,080)
Accumulated other comprehensive loss	0	(126)
Total stockholders’ equity	388,034	542,938
Total liabilities and stockholders’ equity	$ 611,533	$ 610,345

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Contract Obligations In the normal course of business, the Company enters into contracts with clinical research organizations, drug manufacturers and other vendors for preclinical and clinical research studies, research and development supplies and other services and products for operating purposes. These contracts generally provide for termination on notice and are cancellable contracts. Indemnification The Company has agreed to indemnify its officers and directors for certain events or occurrences, while the officer or director is or was serving at the Company’s request in such capacity. The Company purchases directors and officers liability insurance coverage that provides for reimbursement to the Company for covered obligations. This is intended to limit the Company’s exposure and enable it to recover a portion of any amounts it pays under its indemnification obligations. The Company had no liabilities recorded for these agreements as of September 30, 2022 and December 31, 2021, as no amounts are probable or estimable. Employee Agreements The Company has signed employment agreements with certain key employees pursuant to which, if their employment is terminated following a change of control of the Company, the employees are entitled to receive certain benefits, including accelerated vesting of equity incentives. Legal Matters The Company is not currently a party to any material litigation or other material legal proceedings. The Company may, from time to time, be involved in various legal proceedings arising in the normal course of business. An unfavorable resolution of any such matter could materially affect the Company’s future financial position, results of operations or cash flows.

Subsequent Events (Details) - Subsequent event - Private Placement - Class A $ / shares in Units, $ in Millions	Oct. 27, 2022 USD ($) $ / shares shares
Subsequent Event [Line Items]
Number of shares issued in transaction (in shares) \| shares	15,336,734
Price per share (in dollars per share) \| $ / shares	$ 9.80
Gross proceeds received on transaction \| $	$ 150.3

Basis of Presentation (Policies)	9 Months Ended
Basis of Presentation (Policies)	Sep. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of PresentationThe unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been condensed or omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes for the year ended December 31, 2021.
Recent Accounting Pronouncements	Recent Accounting Pronouncements On January 1, 2022, Recursion adopted Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842). Under Topic 842, lessees are required to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with terms greater than 12 months. The guidance also expanded the disclosure requirements of lease arrangements. The Company adopted Topic 842 using the modified retrospective method. Recursion elected the following practical expedients when assessing the transition impact: i) not to reassess whether any expired or existing contracts as of the adoption date are or contain leases; ii) not to reassess the lease classification for any expired or existing leases as of the adoption date; and iii) not to reassess initial direct costs for any existing leases as of the adoption date. Results for reporting periods beginning after December 31, 2021 are presented in accordance with the standard, while results for prior periods are not adjusted and continue to be reported in accordance with Recursion’s historical accounting. The January 1, 2022 adjustment to record lease right-of-use assets and lease liabilities was $32.9 million and $47.8 million, respectively. The impact to the condensed consolidated statements of income and cash flows was insignificant.

Fair Value Measurements - Asset and Liability Not Measured at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Book values
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Total liabilities	$ 656	$ 723
Book values \| Notes payable
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Current portion of notes payable	95	90
Notes payable, net of current portion	561	633
Fair values
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Total liabilities	656	723
Fair values \| Notes payable
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Current portion of notes payable	95	90
Notes payable, net of current portion	$ 561	$ 633

Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($)	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 0	$ 0	$ 0	$ 0

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Loss per Share

The following tables set forth the computation of basic and diluted net loss per share of Class A and Class B common stock:


	Three months ended				Nine months ended
	September 30, 2022				September 30, 2022
(in thousands, except share amount)	Class A		Class B		Class A		Class B
Numerator:
Allocation of undistributed earnings	$	(57,685)	$	(2,759)	$	(173,167)	$	(8,817)
Denominator:
Weighted average common shares outstanding	165,518,152		7,917,818		163,783,626		8,339,348
Net loss per share, basic and diluted	$	(0.35)	$	(0.35)	$	(1.06)	$	(1.06)


	Three months ended				Nine months ended
	September 30, 2021				September 30, 2021
(in thousands, except share amounts)	Class A		Class B		Class A		Class B
Numerator:
Allocation of undistributed earnings	$	(44,763)	$	(2,664)	$	(111,133)	$	(10,413)
Denominator:
Weighted average common shares outstanding	159,065,667		9,467,883		101,045,348		9,467,883
Net loss per share, basic and diluted	$	(0.28)	$	(0.28)	$	(1.10)	$	(1.10)

Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share

The Company excluded the following potential common shares from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect:


	Three months ended September 30,		Nine months ended September 30,
	2022	2021	2022	2021
Convertible preferred stock	—	—	—	46,324,206
Stock based compensation	12,570,320	16,801,940	10,849,853	15,511,538
Warrants	—	163,958	—	180,479
Total	12,570,320	16,965,898	10,849,853	62,016,223

Investments - Balance Sheet Classification (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Securities, Available-for-sale [Line Items]
Available for sale investments	$ 401,847	$ 399,377
Cash and cash equivalents
Debt Securities, Available-for-sale [Line Items]
Available for sale investments	401,847	167,931
Investments
Debt Securities, Available-for-sale [Line Items]
Available for sale investments	$ 0	$ 231,446

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2022	Oct. 31, 2022
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-40323
Entity Registrant Name	RECURSION PHARMACEUTICALS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-4099738
Entity Address, Address Line One	41 S Rio Grande Street
Entity Address, City or Town	Salt Lake City,
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84101
City Area Code	385
Local Phone Number	269 - 0203
Title of 12(b) Security	Class A Common Stock, par value $0.00001
Trading Symbol	RXRX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Central Index Key	0001601830
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		181,694,536
Class B
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		7,861,209

Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue
Revenue	$ 13,160	$ 2,534	$ 26,167	$ 7,645
Operating costs and expenses
Cost of revenue	15,409	0	37,435	0
Research and development	40,836	33,246	111,716	86,979
General and administrative	19,488	15,690	61,761	38,481
Total operating costs and expenses	75,733	48,936	210,912	125,460
Loss from operations	(62,573)	(46,402)	(184,745)	(117,815)
Other income (loss), net	2,128	(1,026)	2,761	(3,731)
Net loss	$ (60,445)	$ (47,428)	$ (181,984)	$ (121,546)
Per share data
Net loss per share of Class A and B common stock, basic (in dollars per share)	$ (0.35)	$ (0.28)	$ (1.06)	$ (1.10)
Net loss per share of Class A and B common stock, diluted (in dollars per share)	$ (0.35)	$ (0.28)	$ (1.06)	$ (1.10)
Weighted-average shares (Class A and B) outstanding, basic (in shares)	173,435,970	168,533,550	172,122,974	110,513,231
Weighted-average shares (Class A and B) outstanding, diluted (in shares)	173,435,970	168,533,550	172,122,974	110,513,231
Operating revenue
Revenue
Revenue	$ 13,053	$ 2,500	$ 26,005	$ 7,500
Grant revenue
Revenue
Revenue	$ 107	$ 34	$ 162	$ 145

Leases - Narrative (Details)	1 Months Ended		3 Months Ended	9 Months Ended
Leases - Narrative (Details)	May 31, 2022 USD ($) ft²	Feb. 28, 2021 USD ($) ft²	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Jan. 01, 2022 USD ($)	Dec. 31, 2021 USD ($)
Lessee, Lease, Description [Line Items]
Operating lease, renewal term				5 years
Decrease in operating lease right-of-use assets				$ 2,700,000
Decrease in operating lease liabilities				2,800,000
Operating lease right-of-use assets				33,726,000		$ 32,900,000	$ 0
Operating lease liability				51,534,000		$ 47,800,000
Rent expense			$ 1,700,000		$ 4,400,000
Industry lease
Lessee, Lease, Description [Line Items]
Operating lease, renewal term		5 years
Square footage of leased space (in square feet) \| ft²		51,869
Lease term		5 years
Tenant improvement allowance		$ 2,100,000
Expected fixed lease payments		$ 7,600,000
Operating lease right-of-use assets				0
Operating lease liability				$ 0
Toronto lease
Lessee, Lease, Description [Line Items]
Operating lease, renewal term	5 years
Square footage of leased space (in square feet) \| ft²	26,320
Lease term	10 years
Tenant improvement allowance	$ 1,500,000
Expected fixed lease payments	$ 10,800,000
Minimum
Lessee, Lease, Description [Line Items]
Remaining operating lease term				1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining operating lease term				10 years

Supplemental Financial Information

9 Months Ended

Sep. 30, 2022

Supplemental Financial Information [Abstract]

Supplemental Financial Information

Property and Equipment


	September 30,		December 31,
(in thousands)	2022		2021
Lab equipment	$	42,692	$	33,076
Leasehold improvements	14,175		13,936
Office equipment	20,005		20,005
Construction in progress	35,957		16,445
Property and equipment, gross	112,829		83,462
Less: Accumulated depreciation	(27,052)		(18,737)
Property and equipment, net	$	85,777	$	64,725

Depreciation expense on property and equipment was $2.9 million and $8.3 million during the three and nine months ended September 30, 2022, respectively, and $2.5 million and $6.3 million during the three and nine months ended September 30, 2021, respectively. The Company recorded an impairment of $2.8 million during the nine months ended September 30, 2022 related to a construction project for leasehold improvements as the Company no longer intended to use them. The impairment was recorded in “General and Administrative” in the Condensed Consolidated Statements of Operations.

The construction in progress balance primarily relates to leasehold improvements under construction for several leased locations.

Accrued Expenses and Other Liabilities


	September 30,		December 31,
(in thousands)	2022		2021
Accrued compensation	$	11,814	$	11,738
Accrued development expenses	6,546		4,682
Accrued early discovery expenses	1,950		2,114
Accrued construction	1,889		4,665
Accrued professional fees	148		1,793
Accrued other expenses	4,410		7,341
Accrued expense and other liabilities	$	26,757	$	32,333

Notes Payable

In 2018, the Company borrowed $992 thousand, which was available as part of a lease agreement for use on tenant improvements. Under the terms of the lease, the note will be repaid over a 10-year period at an 8% interest rate.

In September 2019, the Company entered into a lending agreement with Midcap Financial Trust (Midcap) and the other lenders party thereto (the Midcap loan agreement) for borrowing $11.9 million. In July 2021, the Company paid the balance due under the Midcap loan agreement. The total amount paid was $12.7 million. The Company recorded an early extinguishment loss of $996 thousand, which was included in “Other income (loss), net” on the Condensed Consolidated Statements of Operations.

Interest Income (Expense), net


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2022		2021		2022		2021
Interest expense	$	(13)	$	(220)	$	(42)	$	(2,971)
Interest income	1,833		50		2,572		94
Interest income (expense), net	$	1,820	$	(170)	$	2,530	$	(2,877)

For the three and nine months ended September 30, 2022, interest income primarily related to the investment portfolio. See Note 4, “Investments” for additional details on the investment portfolio. For the three and nine months ended September 30, 2021, interest expense primarily related to changes in fair value of the Series A and B warrants (see Note 10, “Stock-based Compensation” for additional details on the warrants). The Company also had expenses for the Midcap loan and tenant improvement allowance notes. Interest expense was included in “Other income (loss), net” on the Condensed Consolidated Statements of Operations.

Basis of Presentation	9 Months Ended
Basis of Presentation	Sep. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation Basis of Presentation The unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been condensed or omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes for the year ended December 31, 2021. In April 2021, the Company completed a 1.5-for-1 forward stock split of common and convertible preferred stock. All shares presented within these condensed consolidated financial statements were adjusted to reflect the forward stock split for all periods presented. See Note 8, “Common Stock” for additional details. In April 2021, the Company’s Board of Directors authorized two classes of common stock, Class A and Class B. Certain shares of Class A were exchanged for Class B on a one-for-one basis. The creation and issuance of the Class B common stock did not affect the loss per share for the Class A or Class B shares for any period. The Company presented the net loss per share amounts as if the authorization and exchange occurred as of the start of the 2021 reporting period. All share amounts presented prior to the authorization are referred to as Class A common stock. See Note 8, “Common Stock” for additional details. It is management’s opinion that these condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial statements. Revenue and net loss for any interim period are not necessarily indicative of future or annual results. Emerging Growth Company The Company is an emerging growth company (EGC), as defined by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act). The JOBS Act exempts EGCs from being required to comply with new or revised financial accounting standards until private companies are required to comply. Recursion has elected to use the extended transition period for new or revised financial accounting standards, although the Company may adopt certain new or revised accounting standards early. This may make comparisons of the Company’s financial statements with other public companies difficult because of the potential differences in accounting standards used. Recursion may remain an EGC until the earlier of (1) December 31, 2026; (2) December 31 of the year in which we (a) become a “large accelerated filer;” or (b) have annual gross revenues of $1.07 billion or more; or (3) the date on which we have issued more than $1.0 billion of non-convertible debt over a three-year period. The Company expects to be an EGC until December 31, 2022. Recent Accounting Pronouncements On January 1, 2022, Recursion adopted Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842). Under Topic 842, lessees are required to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with terms greater than 12 months. The guidance also expanded the disclosure requirements of lease arrangements. The Company adopted Topic 842 using the modified retrospective method. Recursion elected the following practical expedients when assessing the transition impact: i) not to reassess whether any expired or existing contracts as of the adoption date are or contain leases; ii) not to reassess the lease classification for any expired or existing leases as of the adoption date; and iii) not to reassess initial direct costs for any existing leases as of the adoption date. Results for reporting periods beginning after December 31, 2021 are presented in accordance with the standard, while results for prior periods are not adjusted and continue to be reported in accordance with Recursion’s historical accounting. The January 1, 2022 adjustment to record lease right-of-use assets and lease liabilities was $32.9 million and $47.8 million, respectively. The impact to the condensed consolidated statements of income and cash flows was insignificant.

Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	9 Months Ended
	Apr. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted in period, weighted average grant date fair value (in dollars per share)		$ 6.57	$ 6.41
Unvested stock options, unamortized stock-based compensation cost		$ 32.8
Unvested stock options, unamortized stock-based compensation cost, weighted average period recognition		3 years
Employee stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, vesting period		4 years
Stock options, expiration period		10 years
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, vesting period	4 years
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested stock options, unamortized stock-based compensation cost, weighted average period recognition		4 years
Fair market value of vested shares		$ 5.6
Unrecognized compensation cost		$ 51.2
2021 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, capital shares reserved for future issuance (in shares)	16,186,000
Number of shares available for grant (in shares)		15,161,662

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company did not record any income tax expense during the three and nine months ended September 30, 2022 and 2021. The Company has historically incurred operating losses and maintains a full valuation allowance against its net deferred tax assets. Foreign taxes were insignificant during the three and nine months ended September 30, 2022 and 2021. Net operating losses (NOLs) and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service (“IRS”) and may become subject to annual limitation due to ownership changes that have occurred previously or that could occur in the future under Section 382 of the Internal Revenue Code, as amended and similar state provisions. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three-year period. The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study. If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate and then could be subject to additional adjustments, as required. Any limitation may result in the expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization. Further, until a study is completed and any limitation is known, no amounts are being presented as an uncertain tax position. The Company files income tax returns in the United States, Canada, Utah, California and Massachusetts. The Company is not currently under examination in any of these jurisdictions. The Company is subject to income tax examinations on all federal returns since the 2018 tax return.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Leases - Lease Term and Discount Rates (Details)	Sep. 30, 2022
Leases [Abstract]
Weighted-average remaining lease term (years)	7 years 9 months 18 days
Weighted-average discount rate	7.30%

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill

There were no changes to the carrying amount of goodwill during the three and nine months ended September 30, 2022 and 2021. No goodwill impairment was recorded during the three and nine months ended September 30, 2022 and 2021.

Intangible Assets, Net

The following table summarizes intangible assets:


	September 30, 2022						December 31, 2021
(in thousands)	Gross carrying amount		Accumulated Amortization		Net carrying amount		Gross carrying amount		Accumulated Amortization		Net carrying amount
Definite-lived intangible asset	$	1,211	$	(658)	$	553	$	911	$	(430)	$	481
Indefinite-lived intangible asset	904		—		904		904		—		904
Intangible assets, net	$	2,115	$	(658)	$	1,457	$	1,815	$	(430)	$	1,385

Amortization expense was $76 thousand and $228 thousand during the three and nine months ended September 30, 2022 and 2021, respectively. Amortization expense was included in research and development in the Condensed Consolidated Statements of Operations.

The indefinite-lived intangible asset represents the Recursion domain name that the Company purchased. No indefinite-lived intangible asset impairment charges were recorded during the three and nine months ended September 30, 2022 and 2021.

Description of the Business	9 Months Ended
Description of the Business	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of the Business	Description of the Business Recursion Pharmaceuticals, Inc. (Recursion, the Company, we or our) was originally formed as a limited liability company on November 4, 2013 under the name Recursion Pharmaceuticals, LLC. In September 2016, the Company converted to a Delaware corporation and changed its name to Recursion Pharmaceuticals, Inc. Recursion is a biotechnology company that combines automation, artificial intelligence, machine learning, in vivo validation capabilities and a highly cross-functional team to discover novel medicines that expand our collective understanding of biology. Recursion’s rich, relatable database of biological images generated in-house on the Company’s robotics platform enables advanced machine learning approaches to reveal drug candidates, mechanisms of action, novel chemistry and potential toxicity with the eventual goal of decoding biology and advancing new therapeutics that radically improve people’s lives. As of September 30, 2022, the Company had an accumulated deficit of $582.1 million. The Company expects to incur substantial operating losses in future periods and will require additional capital to advance its drug candidates. The Company does not expect to generate significant revenue until the Company successfully completes significant drug development milestones with its subsidiaries or in collaboration with third parties, which the Company expects will take a number of years. In order to commercialize its drug candidates, the Company or its partners need to complete clinical development and comply with comprehensive regulatory requirements. The Company is subject to a number of risks and uncertainties similar to those of other companies of the same size within the biotechnology industry, such as the uncertainty of clinical trial outcomes, uncertainty of additional funding and a history of operating losses. The Company has funded its operations to date primarily through the issuance of convertible preferred stock and the issuance of Class A common stock in an Initial Public Offering (IPO), which was completed in April 2021 (see Note 8, “Common Stock” for additional details). Additionally, we have received payments of $180.0 million from our strategic partnerships. Recursion will likely be required to raise additional capital. As of September 30, 2022, the Company did not have any unconditional outstanding commitments for additional funding. See Note 14, “Subsequent Events” for details of a Stock Purchase Agreement for a private placement (the “Private Placement”) with certain qualified institutional buyers and institutional accredited investors that closed subsequent to September 30, 2022. If the Company is unable to access additional funds when needed, it may not be able to continue the development of its products or the Company could be required to delay, scale back or abandon some or all of its development programs and other operations. The Company’s ability to access capital when needed is not assured and, if not achieved on a timely basis, could materially harm its business, financial condition and results of operations. The Company believes that the Company’s existing cash and cash equivalents will be sufficient to fund the Company’s operating expenses and capital expenditures for at least the next 12 months.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) (unaudited) - USD ($) $ in Thousands	Total	Series A and Series B Warrants	Common Stock (Class A and B)	Common Stock (Class A and B) Series A and Series B Warrants	Additional Paid-in-Capital	Additional Paid-in-Capital Series A and Series B Warrants	Accumulated Deficit	Accumulated other comprehensive income (loss)
Temporary equity, shares outstanding at beginning of period (in shares) at Dec. 31, 2020	112,088,065
Temporary equity, carrying amount attributable to parent at beginning of period at Dec. 31, 2020	$ 448,312
Increase (Decrease) in Temporary Equity [Roll Forward]
Conversion of preferred stock to common stock (in shares)	(112,088,065)
Conversion of preferred stock to common stock	$ (448,312)
Temporary equity, shares outstanding at end of period (in shares) at Sep. 30, 2021	0
Temporary equity, carrying amount attributable to parent at end of period at Sep. 30, 2021	$ 0
Beginning balance (in shares) at Dec. 31, 2020			22,314,685
Beginning balance at Dec. 31, 2020	(206,289)		$ 0		$ 7,312		$ (213,601)	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(121,546)						(121,546)
Other comprehensive gain	2							2
Common stock issuance for initial public offering, net of issuance costs (in shares)			27,878,787
Common stock issuance for initial public offering, net of issuance costs	462,354		$ 1		462,353
Conversion of preferred stock to common stock and warrant exercises (in shares)			115,598,018	129,963
Conversion of preferred stock to common stock and warrant exercises	448,312	$ 2,340	$ 1		448,311	$ 2,340
Stock option exercises and other (in shares)			2,713,506
Stock option exercises and other	3,359				3,359
Stock-based compensation	10,500				10,500
Ending balance (in shares) at Sep. 30, 2021			168,634,959
Ending balance at Sep. 30, 2021	$ 599,032		$ 2		934,175		(335,147)	2
Temporary equity, shares outstanding at beginning of period (in shares) at Jun. 30, 2021	0
Temporary equity, carrying amount attributable to parent at beginning of period at Jun. 30, 2021	$ 0
Temporary equity, shares outstanding at end of period (in shares) at Sep. 30, 2021	0
Temporary equity, carrying amount attributable to parent at end of period at Sep. 30, 2021	$ 0
Beginning balance (in shares) at Jun. 30, 2021			168,425,907
Beginning balance at Jun. 30, 2021	642,714		$ 2		930,431		(287,719)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(47,428)						(47,428)
Other comprehensive gain	2							2
Stock option exercises and other (in shares)			209,052
Stock option exercises and other	382				382
Stock-based compensation	3,362				3,362
Ending balance (in shares) at Sep. 30, 2021			168,634,959
Ending balance at Sep. 30, 2021	$ 599,032		$ 2		934,175		(335,147)	2
Temporary equity, shares outstanding at beginning of period (in shares) at Dec. 31, 2021	0
Temporary equity, carrying amount attributable to parent at beginning of period at Dec. 31, 2021	$ 0
Temporary equity, shares outstanding at end of period (in shares) at Sep. 30, 2022	0
Temporary equity, carrying amount attributable to parent at end of period at Sep. 30, 2022	$ 0
Beginning balance (in shares) at Dec. 31, 2021	170,272,462		170,272,462
Beginning balance at Dec. 31, 2021	$ 542,938		$ 2		943,142		(400,080)	(126)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(181,984)						(181,984)
Other comprehensive gain	$ 126							126
Stock option exercises and other (in shares)	3,063,033		3,800,444
Stock option exercises and other	$ 6,740				6,740
Stock-based compensation	$ 20,214				20,214
Ending balance (in shares) at Sep. 30, 2022	174,072,906		174,072,906
Ending balance at Sep. 30, 2022	$ 388,034		$ 2		970,096		(582,064)	0
Temporary equity, shares outstanding at beginning of period (in shares) at Jun. 30, 2022	0
Temporary equity, carrying amount attributable to parent at beginning of period at Jun. 30, 2022	$ 0
Temporary equity, shares outstanding at end of period (in shares) at Sep. 30, 2022	0
Temporary equity, carrying amount attributable to parent at end of period at Sep. 30, 2022	$ 0
Beginning balance (in shares) at Jun. 30, 2022			172,815,409
Beginning balance at Jun. 30, 2022	437,579		$ 2		959,393		(521,619)	(197)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(60,445)						(60,445)
Other comprehensive gain	197							197
Stock option exercises and other (in shares)			1,257,497
Stock option exercises and other	1,794				1,794
Stock-based compensation	$ 8,909				8,909
Ending balance (in shares) at Sep. 30, 2022	174,072,906		174,072,906
Ending balance at Sep. 30, 2022	$ 388,034		$ 2		$ 970,096		$ (582,064)	$ 0

Investments

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Investments

InvestmentsIn August 2021, the Company invested cash in an investment portfolio. The primary objectives of the investment portfolio are to preserve principal, maintain prudent levels of liquidity and obtain investment returns. Recursion’s

investment policy limits investments to certain types of debt and money market instruments issued by institutions with investment-grade credit ratings and places restrictions on maturities and concentration by asset class and issuer.

The following tables summarize the Company’s investment portfolio by type of security:


	September 30, 2022
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair values
Money market funds	$	401,847	$	—	$	—	$	401,847
Total	$	401,847	$	—	$	—	$	401,847


	December 31, 2021
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair values
Money market funds	$	155,731	$	—	$	—	$	155,731
U.S. government debt	19,960		—		(33)		19,927
Corporate bonds	61,451		—		(74)		61,377
Certificates of deposit	21,450		—		(10)		21,440
Commercial paper	140,911		3		(12)		140,902
Total	$	399,503	$	3	$	(129)	$	399,377

The following table summarizes the classification of the Company’s available-for-sale investments on the Condensed Consolidated Balance Sheets:


(in thousands)	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	401,847	$	167,931
Investments	—		231,446
Total	$	401,847	$	399,377

As of September 30, 2022, the Company did not have any available-for-sale investments outstanding. As of December 31, 2021, all of the Company’s available-for-sale investments mature in one year or less.

There were no significant realized or unrealized losses during the three and nine months ended September 30, 2022 and 2021. No impairments were recorded during the three and nine months ended September 30, 2022 and 2021. Realized gains and losses on interest-bearing securities are recorded in “Other income (loss), net,” in the Condensed Consolidated Statements of Income.

Stock-Based Compensation

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

In April 2021, the Board of Directors and the stockholders of the Company adopted the 2021 Equity Incentive Plan (the 2021 Plan). Under the 2021 Plan, 16,186,000 shares of Class A common stock were reserved. Additionally, shares were reserved for all outstanding awards under the previous 2016 Plan. The Company may grant stock options, restricted stock units (RSUs), stock appreciation rights, restricted stock awards and other forms of stock-based compensation.

As of September 30, 2022, 15,161,662 shares of Class A common stock were available for grant.


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2022		2021		2022		2021
Cost of revenue	$	732	$	—	$	1,560	$	—
Research and development	3,674		1,305		7,404		3,000
General and administrative	4,247		1,791		10,534		6,771
Total	$	8,653	$	3,096	$	19,498	$	9,771

Stock Options

Stock options generally vest over four years and expire no later than 10 years from the date of grant. The following table summarizes Recursion’s stock option activity during the nine months ended September 30, 2022:


(in thousands except share data)	Shares	Weighted-average exercise price		Weighted-average remaining contractual life (in years)	Aggregate intrinsic value
Outstanding as of December 31, 2021	19,191,714	$	3.78	8.1	$	260,867
Granted	2,483,336	11.10
Cancelled	(1,435,146)	5.63
Exercised	(3,063,033)	1.79			21,904
Outstanding as of September 30, 2022	17,176,871	$	5.04	7.7	$	113,301
Exercisable as of September 30, 2022	8,769,773	$	3.36	6.9	$	69,776

The fair value of options granted to employees is calculated on the grant date using the Black-Scholes option valuation model. The weighted-average grant-date fair values of stock options granted during the nine months ended September 30, 2022 and 2021 were $6.57 and $6.41, respectively.

The following weighted-average assumptions were used to calculate the grant-date fair value of stock options:


	Nine months ended September 30,
	2022		2021
Expected term (in years)	6.2		6.2
Expected volatility	63	%	66	%
Expected dividend yield	—		—
Risk-free interest rate	1.9	%	1.0	%

As of September 30, 2022, $32.8 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next three years.

RSUs

In April 2021, Recursion redesigned certain aspects of its long-term incentive program. As a result, equity awards granted to employees since the redesign generally consist of a combination of stock options and RSUs. RSUs awarded to employees pursuant to the 2021 Plan generally vest over four years. The weighted-average grant-date fair value of RSUs generally is determined based on the number of units granted and the quoted price of Recursion’s common stock on the date of grant.

The following table summarizes Recursion’s RSU activity during the nine months ended September 30, 2022:


	Stock units	Weighted-average grant date fair value
Outstanding as of December 31, 2021	478,136	$	23.40
Granted	7,300,841	7.22
Vested	(476,567)	6.74
Forfeited	(323,970)	9.35
Outstanding as of September 30, 2022	6,978,440	$	8.13

The fair market value of RSUs vested was $5.6 million during the nine months ended September 30, 2022. As of September 30, 2022, $51.2 million of unrecognized compensation cost related to RSUs is expected to be recognized as expense over approximately the next four years.

Warrants

In December 2016, the Company issued fully vested warrants to purchase 84,486 shares of Series A Preferred Stock (First Series A warrant) at a purchase price of $0.71 per share. In May 2017, the Company drew on additional borrowing capacity, which required the Company to issue additional fully vested warrants to purchase for 28,161 shares of Series A Preferred Stock at a purchase price of $0.71 per share (Second Series A warrant and together with the First Series A warrant, the Series A warrants). These Series A warrants were exercised in April 2021.

In July 2018, the Company drew on additional borrowing capacity pursuant to an amended agreement. This required the Company to issue fully vested warrants to purchase 25,762 shares of Series B Preferred Stock (Series B warrants) at a purchase price of $2.79 per share. These Series B warrants were exercised in April 2021.

The FASB has issued accounting guidance on the classification of freestanding warrants and other similar instruments for shares that are redeemable (either puttable or mandatorily redeemable). The guidance requires liability classification for certain warrants that are exercisable into convertible preferred stock. The initial fair values of the Series A and B warrants were recorded as debt issuance costs, which resulted in a reduction in the carrying value of the debt and subsequent accretion. The Company remeasured the Series A and B warrants on each Condensed Consolidated Balance Sheet date. The change in valuation was recorded in the Condensed Consolidated Statements of Operations in “Other income (loss), net.” The liability was recorded to equity upon the exercise of the Series A and B warrants.

The following is a summary of the changes in the Company’s Series A and B warrant liability balance during the nine months ended September 30, 2021:


(in thousands)
Balance as of December 31, 2020	$	125
Increase in fair value of warrants	2,215
Recorded in equity upon exercise	(2,340)
Balance as of September 30, 2021	$	—

Supplemental Financial Information - PPE (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 112,829	$ 83,462
Less: Accumulated depreciation	(27,052)	(18,737)
Property and equipment, net	85,777	64,725
Lab equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	42,692	33,076
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	14,175	13,936
Office equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	20,005	20,005
Construction in progress
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 35,957	$ 16,445

Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Comprehensive Income [Abstract]
Net loss	$ (60,445)	$ (47,428)	$ (181,984)	$ (121,546)
Unrealized gain on investments	197	2	87	2
Net realized loss on investments reclassified into net loss	0	0	39	0
Other comprehensive income	197	2	126	2
Comprehensive loss	$ (60,248)	$ (47,426)	$ (181,858)	$ (121,544)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-URI https://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
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+ Details

Supplemental Financial Information - Interest (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Supplemental Financial Information [Abstract]
Interest expense	$ (13)	$ (220)	$ (42)	$ (2,971)
Interest income	1,833	50	2,572	94
Interest income (expense), net	$ 1,820	$ (170)	$ 2,530	$ (2,877)