Financial Statements of The Leukemia & Lymphoma Society, Inc. (2021 and 2020), Lecture notes of Accounting

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Consolidated Financial Statements

June 30, 202 1

(with summarized comparative information as of June 30, 2020)

(With Independent Auditors’ Report Thereon)

Table of Contents

Page(s)

Independent Auditors’ Report 1 – 2

Consolidated Financial Statements:

Consolidated Balance Sheet 3

Consolidated Statement of Activities 4

Consolidated Statement of Functional Expenses 5

Consolidated Statement of Cash Flows 6

Notes to Consolidated Financial Statements 7 – 21

Report on Summarized Comparative Information

We have previously audited The Leukemia & Lymphoma Society, Inc. 20 20 consolidated financial statements, and we expressed an unmodified audit opinion on those audited consolidated financial statements in our report dated November 5 , 20 20. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 20 20 is consistent, in all material respects, with the audited consolidated financial statements from which it has been derived.

October 25 , 202 1

Consolidated Balance Sheet June 30, 2021 (with summarized comparative information at June 30, 2020) (In thousands)

Assets 2021 2020

Cash and cash equivalents $ 19,473 32, Prepaid expenses and other assets 3,891 3, Contributions and other receivable, net (note 7) 18,786 24, Investments (note 4) 708,071 520, Fixed assets, net (note 10) 11,128 9,

Total assets $ 761,350 591,

Liabilities and Net Assets

Liabilities: Accounts payable and accrued expenses $ 29,938 19, Deferred revenue (note 8) 13,134 13, Awards and grants payable (note 2) 36,704 35, Co-Pay assistance payable (note 3) 152,050 145, Other long-term liabilities (note 11) 4,534 4, Total liabilities 236,361 217,

Commitments and contingencies (notes 2, 3, 12 and 14)

Net assets: Without donor restrictions 339,806 255, With donor restrictions (notes 3 and 6) 185,183 118,

Total net assets 524,989 373, Total liabilities and net assets $ 761,350 591,

See accompanying notes to consolidated financial statements.

Consolidated Statement of Functional Expenses Year ended June 30, 2021 (with summarized comparative information for the year ended June 30, 2020) (In thousands)

Program services Supporting services Patient and Public Management Year-ended Direct donor benefit costs community health Professional and Fund Research service education education Total general raising Total 2021 2020 2021 2020 Awards and grants $ 33,392 — — — 33,392 — — — 33,392 25,108 — — Therapy acceleration program 1,411 — — — 1,411 — — — 1,411 2,091 — — Clinical trial 6,878 — — — 6,878 — — — 6,878 8,878 — — Financial aid to patients — 6,995 — — 6,995 — — — 6,995 11,577 — — Co-pay assistance (note 3) — 111,631 — — 111,631 — — — 111,631 131,211 — — Co-pay processing fees (note 3) — 6,924 — — 6,924 — — — 6,924 5,536 — — Donated services, goods, and media (note 9) 548 80 2,580 5 3,213 52 1,170 1,222 4,435 8,926 — — Salaries and employee benefits and taxes 12,487 28,062 11,523 6,215 58,287 29,879 29,846 59,725 118,012 130,398 — — Professional fees 7,699 6,171 5,306 2,410 21,586 5,411 5,340 10,751 32,337 23,741 1,526 3, Printing, advertising, and supplies 226 3,796 4,145 848 9,015 1,454 5,023 6,477 15,492 19,909 3,213 5, Occupancy, telephone, and insurance 957 3,099 921 401 5,378 2,921 3,368 6,289 11,667 12,591 — — Travel and meetings 29 31 (8) (8) 44 17 19 36 80 7,310 580 9, Equipment and software rentals and maintenance 1,170 2,032 863 300 4,365 2,494 2,875 5,369 9,734 8,511 — — Postage and shipping 93 1,699 1,428 72 3,292 541 1,546 2,087 5,379 5,875 — — Miscellaneous 398 1,178 224 116 1,916 849 933 1,782 3,698 3,162 549 1, Depreciation and amortization 114 241 12 7 374 2,877 279 3,156 3,530 3,663 — — Total expenses $ 65,402 171,939 26,994 10,366 274,701 46,495 50,399 96,894 371,595 408,487 5,868 19,

See accompanying notes to consolidated financial statements.

5

Consolidated Statement of Cash Flows

Year ended June 30, 2021 (with summarized comparative information for the year ended June 30, 2020)

(In thousands)

Cash flows from operating activities: Change in net assets $ 151,458 99, Adjustments to reconcile change in net assets to net cash provided by operating activities: Net increase in fair value of investments (38,208) (21,402) Depreciation, amortization and loss on sales of fixed assets 3,529 3, Provision for uncollectible accounts — 746 Changes in operating assets and liabilities: Prepaid expenses and other assets 42 720 Contributions and other receivables, net 5,707 (9,750) Accounts payable and accrued expenses 10,266 (3,815) Other long-term liabilities 514 (695) Deferred revenue 58 (663) Awards and grants payable 1,214 (15,484) Co-Pay assistance payable 6,660 50, Net cash provided by operating activities 141,240 103,

Cash flows from investing activities: Purchases of fixed assets (5,147) (4,012) Purchases of long-term investments (580,387) (256,159) Sales of investments 401,474 179,

Net cash used in investing activities (184,060) (80,817) Net (decrease) increase in cash and cash equivalents (42,820) 22,

Cash, cash equivalents, and restricted cash at beginning of period 62,385 39,

Cash, cash equivalents, and restricted cash at end of period $ 19,565 62,

Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheet that sum to the total of the same such amounts shown above: Cash and cash equivalents $ 19,473 32, Cash included in investments 92 30, Total cash, cash equivalents, and restricted cash $ 19,565 62,

See accompanying notes to consolidated financial statements.

Notes to Consolidated Financial Statements June 30, 202 1 (with comparative information for the year ended June 30, 20 20 ) (Amount in thousands)

8 (Continued)

(d) Estimates

The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires LLS’s management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The estimates made in the preparation of these consolidated financial statements include allocation of expenses, and valuation of donated goods, services and media. Actual results could differ from those estimates.

(e) Risks and Uncertainties

LLS invests in various investment securities. Investment securities are exposed to various risks such as interest rate risks, fluctuations in market values, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the consolidated balance sheet.

LLS’s principal source of revenue is contributions by the general public. Accordingly, LLS’s operations are dependent upon individual contributions, that are affected by general economic conditions, employment levels, and other factors over which LLS has little or no control. By contrast to the granularity of the general public donations, the Co-Pay program in 202 1 and 20 20 was funded by seven donors. In addition, the Beat AML Master Trial was primarily funded by eight and seven donors in 202 1 and 20 20 , respectively.

(f) Summarized Financial Information

The consolidated financial statements are presented with 20 20 summarized information. With respect to the consolidated statement of activities, such prior year information is not presented by net asset class and, in the consolidated statement of functional expenses, 20 20 expenses by object are presented in total rather than by functional category. Accordingly, such information should be read in conjunction with LLS’s 20 20 consolidated financial statements from which the summarized information was derived.

(g) Covid Impact

The spread of coronavirus (COVID-19) around the world has continued to cause significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies. LLS, however, does not expect any material impact to its operations.

(h) Net Asset Classifications

To ensure observance of limitations and restrictions placed on the use of resources available to LLS, funds that have similar characteristics have been classified into two net asset categories as follows:

Net assets without donor restrictions : Consist of funds that are fully available, at the discretion of LLS’s Board of Directors, for LLS to utilize in any of its programs or supporting services.

Notes to Consolidated Financial Statements June 30, 202 1 (with comparative information for the year ended June 30, 20 20 ) (Amount in thousands)

9 (Continued)

Net assets with donor restrictions : Consist of funds that are restricted by donors for a specific time period and/or purpose. Also included in this category are net assets subject to donor imposed restrictions, which stipulate that the principal be maintained by LLS, but permits LLS to expend part or all of the income and gains derived there from. Expirations of restrictions are reported as net assets released from restrictions when the donor stipulated purpose has been fulfilled and/or the amount has been appropriated in compliance with the Board-approved spending policy (note 6).

Revenue and gains and losses on investments and other assets and liabilities are reported as changes in net assets without restrictions unless limited by explicit donor-imposed restrictions or by law. Expenses are reported as decreases in net assets without donor restrictions.

LLS delineates changes in net assets without donor restrictions as operating or non-operating activities. Operating activities include all operating revenues and expenses that are an integral part of its programs and supporting activities and net assets released from donor restrictions to support operating expenditures. The measure of operations include support for operating activities from both with donor restrictions and without donor restrictions designated for long-term investment according to LLS’s spending rate policy (note 6). Non-operating activities include changes in fair value of investments and foreign currency translation adjustment and other nonrecurring items.

(i) Foreign Currency Translation

LLSC uses the Canadian dollar as its functional currency. Accordingly, the currency translation of the financial statements of LLSC to U.S. dollars is included as a translation adjustment in the consolidated statement of activities.

(j) Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The three levels of the fair value hierarchy are as follows:

Level 1 inputs are quoted prices or published net asset value for funds with characteristics similar to a mutual fund (unadjusted) in active markets for identical assets or liabilities that a reporting entity has the ability to access at the measurement date.

Level 2 inputs other than quoted prices or published net asset value included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 unobservable inputs for the asset or liability.

LLS follows the provisions of Accounting Standards Codification (ASC) 820, Fair Value Measurement , for its alternative investments that do not have readily determinable fair values, including hedge funds, limited partnerships, and other funds. This guidance allows, as a practical expedient, for the estimation of the fair value of investments in investment companies for which the investment does not have a

Notes to Consolidated Financial Statements June 30, 202 1 (with comparative information for the year ended June 30, 20 20 ) (Amount in thousands)

11 (Continued)

that possess specialized skills, and would otherwise need to be purchased. These goods and services are recognized as revenue and expense (note 9).

(o) Donated Media

LLS has conducted national public service announcements (PSA) media campaigns and benefited from donated media time that was aired on television and radio. The value of contributed media, which is recognized in the consolidated financial statements, was estimated based on the placement, audience, and demographics of the PSA’s (note 9).

(p) Cash Equivalents

Cash equivalents consist of short-term investments with an original maturity of three months or less from date of purchase, except for amounts held in investments.

(q) Investments

Investments are stated at fair value based upon quoted or published market prices, except for the fair values of alternative investments which are based on NAVs provided by the fund managers or general partners, based upon the underlying net assets of the funds consistent with the concepts of ASC 820. These values are reviewed and evaluated by management.

(r) Fixed Assets and Depreciation

Fixed assets, which consist principally of equipment, software, and leasehold improvements, are recorded at cost, and are depreciated or amortized using the straight-line method over the estimated useful lives of the assets or the terms of the leases, if shorter, ranging from 2 to 10 years (leasehold improvements 7 years; furniture, fixtures, and office equipment 7 to 10 years, and computer equipment and software 2 to 5 years).

(s) Other Long-Term Liabilities

Other long-term liabilities represent LLS’s liability for the Internal Revenue Code Section 457 deferred compensation plans recorded at fair market value (note 11), straight-line rent of office leases (note 12), and capital leases.

(t) Professional Fees

Professional fees included in the consolidated financial statements principally include professional fund-raising fees, contracted software development, and legal and auditing fees.

(u) Upcoming Accounting Standards

ASU No. 2016 - 02 , Leases (Topic 842) - This guidance, effective for LLS’s fiscal year ending June 30, 2023 , requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments on the consolidated balance sheet and disclosing key information about leasing arrangements. Management is evaluating the effect ASU 2016 - 02 will have on its consolidated financial statements.

Notes to Consolidated Financial Statements June 30, 202 1 (with comparative information for the year ended June 30, 20 20 ) (Amount in thousands)

12 (Continued)

(v) Functional Allocation of Expense The costs of providing the various programs and other activities have been summarized on a functional basis. Accordingly, certain costs attributable to more than one program or supporting services function are allocated using cost allocation methods such as square footage and estimate of time and effort.

LLS allocates expenses relating to the operation and maintenance of plant and depreciation using building square footage based on functional use.

(w) Subsequent Events LLS evaluated subsequent events after the consolidated balance sheet date of June 30, 2021 through October 25 , 2021, which was the date the consolidated financial statements were available for issuance, and concluded no additional disclosures are required.

(2) Research

LLS has various activities that are utilized to carry out its mission as presented below:

Research Awards and Grants: Awards and grants for research are approved by LLS’s Board of Directors and are recognized as expense when contractual conditions have been satisfied. The budgets for multi-year grants, which are generally two to five years in length, are approved on an annual basis and may be terminated at the discretion of LLS’s Board of Directors. LLS has multi-year grant commitments of $33,837 at June 30, 2021 , which are conditioned upon future events and, accordingly, are not recorded. LLS has unconditional grants payable of $36,704 and $35,490 at June 30, 202 1 and 20 20 , respectively, which are anticipated to be paid in the next year. Grant refunds and cancellations of approximately $1,623 and $10,003 as of June 30, 202 1 and 20 20 , respectively, have been netted against awards and grants expense.

Therapy Acceleration Program (TAP): TAP is LLS’s strategic initiative to speed the development of blood-cancer treatments and supportive diagnostics by creating business alliances with biotechnology and pharmaceutical companies. TAP provides funding for investigational new drug-enabling studies and clinical-stage projects thru awarding grants, purchasing private and public equity, or other funding mechanisms. TAP contracts are recognized and paid in the year program milestones are achieved. Multi-year contracts, which are generally two to three years in length, are reviewed against milestones on a quarterly basis and may be terminated at the discretion of LLS’s Board of Directors. LLS has contract commitments of $6,950 and $8,700 at June 30, 2021 and 20 20 , respectively, that are conditioned upon future events and, accordingly, are not recorded. Grant refunds of approximately $409 and $ 0 as of June 30, 202 1 and June 30, 20 20 , respectively have been netted against TAP contractual return.

Notes to Consolidated Financial Statements June 30, 202 1 (with comparative information for the year ended June 30, 20 20 ) (Amount in thousands)

14 (Continued)

(4) Investments

The following tables present LLS’s fair value hierarchy of investments measured at fair value on an annual basis as of June 30 , 202 1 and June 30, 20 20 : June 30, 2021 Level 1 Level 2 Level 3

Money market funds and cash $ 127,508 127,508 — — Fixed income: Corporate bonds 430,010 430,010 — — Equities: Large cap equity 52,679 52,679 — — International equity 44,350 44,350 — — Small/mid cap equity 38,453 38,453 — — Commodities 5,515 5,515 — — 698,515 $ 698,515 — —

Investments reported at net asset value: Multi strategy hedge fund 9,

Total investments reported at net asset value 9, $ 708,

Notes to Consolidated Financial Statements June 30, 202 1 (with comparative information for the year ended June 30, 20 20 ) (Amount in thousands)

15 (Continued)

June 30, 2020 Level 1 Level 2 Level 3 Money market funds and cash $ 363,458 363,458 — — Fixed income: Corporate bonds 57,804 57,804 — — Equities: Large cap equity 39,957 39,957 — — International equity 24,121 24,121 — — Small/mid cap equity 23,764 23,764 — — Commodities 3,220 3,220 — — 512,324 $ 512,324 — —

Investments reported at net asset value: Multi strategy hedge fund 8,

Total investments reported at net asset value 8, $ 520,

Amounts included in the investment balance as of June 30 , 20 21 and June 30, 20 20 are $298,687 and $219,261 restricted to Co-Pay Assistance, respectively.

LLS’s alternative investments strategy:

Multi strategy hedge fund – represents an investment in a broad range of investment strategies that seek to exploit opportunities as they occur in the markets due to temporary dislocations or structural inefficiencies and include event-driven strategies, distressed debt, merger and other arbitrage, and value investing.

This strategy creates indirect exposure to LLS through short sales of securities, trading in future and forward contracts, and other derivative products. Derivatives are investment contracts used to hedge risk. While these financial instruments may contain varying degrees of risk, LLS’s risk with respect to such transactions is limited to its capital balance in each investment.

LLS’s alternative investments contain various redemption restrictions with required written notice ranging from 45– 95 days. By contrast, all of LLS’s nonalternative investments are highly liquid and can be

Notes to Consolidated Financial Statements June 30, 202 1 (with comparative information for the year ended June 30, 20 20 ) (Amount in thousands)

17 (Continued)

June 30 Financial assets at year end:^2021

Less amounts not available to be used within one year: Restricted to support Co-Pay Assistance Patients $ 301,294 229, Contributions and other receivable with donor restrictions not to be met in less than a year 3,673 15, Equity holdings not expected to be redeemed 10,639 6, Endowment, net of spending 7,585 6,

Total financial assets not available for use 323,191 257,

Financial assets available to meet general expenditures over the next twelve months $ 423,139 319,

(6) Net Assets with Donor Restrictions

Net assets with donor restrictions and the income earned are available for the following purposes at June 30 , 202 1 and June 30, 20 20 :

June 30 2021 2020

Co-Pay Assitance Program $ 148,354 83, Research 11,329 11, Patient and Community Service 3,327 2, Public Health Education 5,296 2, Professional Education 2,793 2, Beat AML Initiative and clinical trials 11,746 14, Children’s Initiative 1,983 357 Other 355 350

Total net assets with donor restriction $ 185,183 118,

Notes to Consolidated Financial Statements June 30, 202 1 (with comparative information for the year ended June 30, 20 20 ) (Amount in thousands)

18 (Continued)

LLS follows the provisions of the New York Prudent Management of Institutional Funds Act, which imposes guidelines on the management and investment of endowment funds. LLS has interpreted the relevant law as allowing LLS to appropriate for expenditure or accumulate so much of an endowment fund as LLS determines is prudent considering the uses, benefits, purposes, and duration for which the endowment fund is established, subject to the intent of the donor as expressed in the gift instrument.

LLS has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment funds while seeking to protect the original value of the gift. The spending rate policy at June 30, 202 1 and 20 20 was 4 %, plus any additional amounts advised by donors. Under this policy, the endowment assets are invested in a manner that is intended to produce results consistent with LLS’ overall investment strategy.

The following table presents changes in the donor-restricted endowment funds for the year ended June 30, 20 20 and 2019:

June 30 2021 2020

Endowment net assets at July 1 $ 6,302 6, Investment income/loss 1,794 (20) Foreign current translation adjustment 40 (11) Appropriation for expenditure (236) (247) Endowment net assets at June 30 $ 7,900 6,

(7) Contribution and Other Receivables

LLS’ contribution and other receivables at June 30 , 20 21 and June 30, 20 20 consist of unconditional promises to give, receivables associated with service revenue, and legacies for which the underlying wills have been declared valid by the probate court and no other conditions are required to be met. Contributions and other receivables consist of the following:

June 30 2021 2020

Campaign contributions $ 9,739 8, Other restricted contributions 5,293 10, Service revenue 3,754 5, Total $ 18,786 24,