What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-03 compared with 2024-03-19 · 343 added, 312 removed, 274 unchanged (71% of the section changed)

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“ Risk Factors .” Except as required by law, we do not undertake any responsibility to update any of these factors or to announce publicly any revisions to any of the forward-looking statements contained in this or any document, whether as a result of new information, future events, or otherwise.

We are an integrated clinical-stage biotechnology company discovering, developing, and commercializing next-generation immuno- and cellular therapies that bolster the natural immune system to drive and sustain an immune response.

Using our proprietary platforms that amplify both the innate and adaptive branches of the immune system, our teams of clinical, scientific, and manufacturing experts, advance novel therapies and vaccines aimed at defeating urologic and other cancers, as well as infectious diseases.

Although such designations may not lead to a faster development process or regulatory review and may not increase the likelihood that a product candidate will receive approval, N-803 (Anktiva), our lead biologic commercial product candidate, has received Breakthrough Therapy and Fast Track designations and is currently under review by the FDA for treatment in combination with BCG of patients with BCG-unresponsive NMIBC with CIS with or without Ta or T1 disease and has a new user fee goal date (PDUFA date) of April 23, 2024.

Our platforms and their associated product candidates are designed to attack cancer and infectious pathogens by activating both the innate immune system, including—NK cells, dendritic cells, and macrophages, as well as—the adaptive immune system comprising—B and T cells,—in an orchestrated manner.

ImmunityBio is a vertically-integrated commercial stage biotechnology company developing next-generation therapies that bolster the natural immune system to defeat cancers and infectious diseases.

The company’s range of immunotherapy platforms, alone and together, act to drive an immune response with the goal of creating durable immune memory generating safe protection against disease.

We are applying our science and platforms to treating cancers, including the development of potential cancer vaccines, as well as developing immunotherapies and cell therapies that we believe sharply reduce or eliminate the need for standard high-dose chemotherapy.

These platforms and their associated product candidates are designed to be more effective, accessible, and easily administered than current standards of care in oncology and infectious diseases.

Our Approved Product – ANKTIVA

Our lead biologic product ANKTIVA is a novel first-in-class IL-15 receptor superagonist antibody-cytokine fusion protein.

On April 22, 2024, the FDA approved our product, ANKTIVA with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with CIS with or without papillary tumors (the “approved product”).

ANKTIVA was approved with a label indicating an immunological mechanism of action which proliferates and activates NK, CD8+ and memory T cells without the proliferation of immunosuppressive T-reg cells leading to the establishment of memory T cells.

We began commercial distribution of our approved product in May 2024.

We believe there is potential for ANKTIVA to become a therapeutic foundation across all phases of treatment, including in adjunctive therapy, to amplify, reactivate or extend the efficacy of standard of care.

ANKTIVA is being clinically evaluated in multiple oncology indications.

We believe that other oncology indications with registration potential for ANKTIVA include other types of NMIBC ( BCG-unresponsive papillary, BCG-naïve CIS and BCG-naïve papillary), lung, colorectal, prostate and ovarian cancers, and GBM and NHL.

Data from multiple clinical trials suggest ANKTIVA has potential to enhance the activity of therapeutic mAbs, including CPIs (e.g., pembrolizumab/Keytruda), across a wide range of tumor types, including lung cancer.

Further, ANKTIVA has been observed to increase lymphocyte count in healthy adults, making it a potential therapy to rescue lymphopenia.

We are also exploring or pursuing several other studies of ANKTIVA in combination with our other product candidates, including in prostate cancer (ANKTIVA in combination with hAd5 PSA), colon cancer (ANKTIVA in combination with hAd5 TriAd), and NHL (ANKTIVA in combination with rituximab).

We are also exploring ANKTIVA in infectious diseases, including HIV and long COVID.

Table of Conten t s

Significant Developments

The following is a summary of selected significant developments affecting our business that occurred since the filing of our Quarterly Report dated September 30, 2024 with the SEC on November 12, 2024:

• ANKTIVA received a J-code assigned by the CMS in the U.S.

for ANKTIVA, which became effective January 1, 2025.

• With a permanent J-code awarded in January 2025, our February 2025 ANKTIVA unit sales volume grew 97% over unit sales volume in December 2024 and 67% over unit sales volume in January 2025.

• We completed the submission of MAAs for the treatment of patients with BCG-unresponsive NMIBC with CIS with or without papillary tumors for ANKTIVA in combination with BCG to the MHRA in the UK in November 2024 and to the EMA in the EU in December 2024.

Both MAAs were accepted for review, with the potential for approval in the UK and EU by 2026.

• In collaboration with Serum Institute, and in connection with our exclusive global supply arrangement that we announced during 2024, in February 2025 the FDA authorized an EAP allowing us to provide rBCG developed by Serum Institute to urologists to address the TICE BCG shortage in any settings where TICE BCG is approved, and we are also testing rBCG in an FDA-approved trial in the U.S.

Serum Institute’s GMP capacity to manufacture large-scale volumes of rBCG, already tested for safety and efficacy in clinical trials in Europe in subjects with NMIBC, aims to address the shortage of TICE BCG, which we believe will help to ensure a reliable supply for patients in need.

We expect to begin shipments of rBCG pursuant to the EAP during the first quarter of 2025.

• In January 2025, we announced a collaboration and supply agreement with BeiGene, Ltd.

(to be renamed to BeOne Medicines, Ltd.) to conduct a confirmatory randomized Phase 3 clinical trial combining BeOne’s tislelizumab, a PD-1 CPI, and ANKTIVA in participants with advanced or metastatic NSCLC who have acquired resistance to immune CPI therapy.

• On February 27, 2025, the FDA granted us RMAT designation for ANKTIVA and CAR-NK (PD-L1 t-haNK) in combination with standard-of-care chemotherapy/radiotherapy indicated for the reversal of lymphopenia and treatment of multiply relapsed locally advanced or metastatic pancreatic cancer.

This RMAT designation follows clinical data of ALC and significant overall survival correlations in QUILT trials across multiple tumor types including third-line or greater metastatic pancreatic cancer, checkpoint relapsed NSCLC, and supportive data from healthy volunteers.

The reversal of lymphopenia by our IL-15 receptor superagonist is consistent with the mechanism of action of ANKTIVA demonstrating proliferation and activation of NK cells, CD4+ T cells, CD8+ T cells and memory T cells without upregulation of suppressive T-reg cells and approved in the ANKTIVA label (approved for the treatment of adult patients with BCG-unresponsive NMIBC with CIS with or without papillary tumors).

We intend to submit a BLA for the indication of reversal of lymphopenia in patients receiving standard of care chemotherapy and/or radiation and for the treatment of locally advanced or metastatic pancreatic cancer which includes the first-in-class CAR-NK (PD-L1 t-haNK), and to provide data from fully enrolled clinical trials in metastatic pancreatic cancer (QUILT 88) and in checkpoint relapsed NSCLC (QUILT 3055, NSCLC Cohort) patients, as well as lymphopenia reversal across multiple tumor types (QUILT 3055, all Cohorts), with supportive data of lymphocyte proliferation in healthy volunteers (QUILT 1004).

In addition, we intend to file an EAP for ANKTIVA and PD-L1 t-haNK in combination with standard of care chemotherapy/radiotherapy and to submit the protocol to the FDA.

Table of Conten t s

Our proprietary platforms for the development of biologic products and product candidates include:

(i) cytokine fusion proteins, (ii) vaccine vectors, and (iii) cell therapies.

As of December 2024, our platforms have generated nine first-in-human therapeutic agents (including one agent approved by the FDA) that are currently or planned to be studied in clinical trials in liquid and solid tumors.

These indications are among the most frequent and lethal cancer types and where there are high failure rates for existing standards of care or no available effective treatment.

We are constantly monitoring and prioritizing clinical development based upon the availability of our resources and the efficacy and market developments of our competitors’ products and product candidates, among other factors.

Our platforms and their associated product and product candidates are designed to attack cancer and infectious pathogens by activating both the innate immune system, including NK cells, dendritic cells, and macrophages, as well as the adaptive immune system comprising B and T cells, in an orchestrated manner.

The goal of this potentially best-in-class approach is to generate immunogenic cell death thereby eliminating rogue cells from the body whether they are cancerous or virally-infected.

Our ultimate goal is to overcome the limitations of current treatments, such as checkpoint inhibitors, and/or reduce the need for standard high-dose chemotherapy in cancer by employing this coordinated approach to establish “immunological memory” that confers long-term benefit for the patient.

Our proprietary platforms for the development of biologic product candidates include:

(i) antibody-cytokine fusion proteins, (ii) DNA, RNA, and recombinant protein vaccines, and (iii) cell therapies.

These platforms have generated 9 novel therapeutic agents for which clinical trials are either underway or planned in solid and liquid tumors.

Specifically, our clinical focus includes bladder, lung, and colorectal cancers and GBM, which are among the most frequent and lethal cancer types, and where there are high failure rates for existing standards of care or no available effective treatment.

Our lead biologic commercial product candidate Anktiva is an IL-15 superagonist antibody-cytokine fusion protein.

In May 2022, we announced the submission of a BLA to the FDA for Anktiva in combination with BCG for the treatment of patients with BCG-unresponsive NMIBC with CIS with or without Ta or T1 disease .

On May 9, 2023, the FDA delivered a CRL to us regarding the BLA filed in May 2022, indicating that the FDA had determined that it could not approve the original BLA submission in its initial form, and the FDA made recommendations to address the issues raised.

The deficiencies in the CRL related to the FDA’s pre-license inspection of the company’s third-party CMOs, among other items.

Satisfactory resolution of the observations noted at the pre-license inspection would be required before the BLA could be approved.

At the time, the FDA further provided recommendations specific to additional CMC issues and assays to be resolved.

The CRL did not request new preclinical studies or Phase III clinical trials to evaluate safety or efficacy.

The FDA requested that the company provide updated duration of response data for the efficacy population as identified by the FDA in the company’s resubmission, as well as a safety update.

On October 23, 2023, we announced that we had completed the resubmission of the BLA addressing the issues in the CRL.

As part of our resubmission, we provided an update of the duration of response regarding the responders identified by the FDA in the efficacy population for BCG unresponsive subjects with high-risk CIS disease.

On October 26, 2023, we announced that the FDA had accepted our BLA resubmission for review and considered it as a complete response to the CRL.

The FDA has set a new user fee goal date (PDUFA date) of April 23, 2024.

While we believe the BLA resubmission addresses the issues identified in the CRL, there is no guarantee that the FDA will ultimately agree that such issues have been successfully addressed and resolved.

It is unclear when the FDA will approve our BLA, if at all.

Further late-stage efforts for Anktiva are in development within the broader bladder cancer space, including BCG-naïve NMIBC.

In addition, data from multiple clinical trials suggests N-803 has potential to enhance the activity of therapeutic mAbs, including checkpoint inhibitors (e.g., pembrolizumab/Keytruda), across a wide range of tumor types.

We believe there is potential for N-803 to become a therapeutic foundation across all phases of treatment, including in adjunctive therapy, to amplify, reactivate or extend the efficacy of standard of care.

In addition to N-803, we have active clinical programs evaluating therapeutic candidates from our DNA and RNA vaccine technology platforms and our NK cell-based therapy platforms in oncology and infectious disease indications.

On December 29, 2023, we entered into the RIPA with Infinity and Oberland.

Pursuant to the RIPA, Oberland acquired certain Revenue Interests from us for a gross purchase price of $200.0 million paid on closing, less certain transaction expenses.

In addition, Oberland may purchase additional Revenue Interests from us in exchange for the $100.0 million Second Payment upon satisfaction of certain conditions specified in the RIPA, including following the receipt of approval by the FDA of the company’s BLA for N-803 in combination with BCG for the treatment of patients with BCG-unresponsive NMIBC with CIS with or without Ta or T1 disease on or before June 30, 2024.

Under the RIPA, Oberland has the right to receive quarterly payments from us based on, among other things, a certain percentage of our worldwide net sales, excluding those in China, during such quarter.

Also, on December 29, 2023 and in connection with the RIPA, we entered into an SPOA with Oberland pursuant to which we sold an aggregate of approximately $10.0 million of our common stock at $4.1103 per share in a private placement.

Oberland also has an option to purchase up to an additional $10.0 million of our common stock, at a price per share to be determined by reference to the 30-day trailing volume weighted-average price of our common stock calculated from the date of exercise.

On December 21, 2020 , NantKwest and NantCell entered into the Merger Agreement, pursuant to which NantKwest and NantCell agreed to combine their businesses.

The Merger Agreement provided that a wholly-owned subsidiary of the company would merge with and into NantCell, with NantCell surviving the Merger as a wholly-owned subsidiary of the company.

On March 9, 2021 , we completed the Merger pursuant to the terms of the Merger Agreement.

Under the terms of the Merger Agreement, at the effective time of the Merger (the Effective Time), each share of NantCell common stock , par value $0.001 per share, issued and outstanding immediately prior to the Effective Time, subject to certain exceptions as set forth in the Merger Agreement, was converted automatically using the Exchange Ratio into newly issued shares of Company Common Stock, with cash paid in lieu of any fractional shares.

At the Effective Time, each share of the company’s common stock issued and outstanding immediately prior to the Effective Time, remained an issued and outstanding share of the combined company.

At the Effective Time, each outstanding option, RSU or warrant to purchase NantCell common stock was converted using the Exchange Ratio into an option, RSU or warrant, respectively, on the same terms and conditions immediately prior to the Effective Time, to purchase shares of Company Common Stock.

Immediately following the Effective Time, the former stockholders of NantCell held approximately 71.5% of the outstanding shares of Company Common Stock and the stockholders of NantKwest as of immediately prior to the Merger held approximately 28.5% of the outstanding shares of Company Common Stock.

As a result of the Merger and immediately following the Effective Time, Dr.

Patrick Soon-Shiong, our Executive Chairman and Global Chief Scientific and Medical Officer, and his affiliates beneficially owned, in the aggregate, approximately 81.8% of the outstanding shares of Company Common Stock.

Following the consummation of the Merger, the symbol for shares of the company’s common stock was changed to “IBRX.”

During the year ended December 31, 2021, w e recorded $13.0 million of costs i n connection with the Merger consisting of financial advisory, legal and other professional fees.

Accounting Treatment of the Merger

The Merger represents a business combination pursuant to FASB ASC Topic 805-50, Mergers (ASC 805-50), which was accounted for as a transaction between entities under common control as Dr.

Soon‑Shiong and his affiliates were the controlling stockholders of both the company and NantCell for all of the periods presented in this report.

As a result, all of the assets and liabilities of NantCell were combined with ours at their historical carrying amounts on the closing date of the Merger.

We recast our prior period financial statements for the year ended December 31, 2021 to reflect the conveyance of NantCell’s common shares as if the Merger had occurred as of the earliest date of the consolidated financial statements presented in Part II, Item 8.

“ Financial Statements and Supplementary Data ” of this Annual Report.

All material intercompany accounts and transactions have been eliminated in consolidation.

COVID-19 Pandemic

The COVID-19 pandemic continues to present a public health and economic challenge around the world.

Through the date of this Annual Report, we have not seen a material adverse impact to our business from the pandemic.

However, given the continuously evolving nature of the pandemic, we cannot at this time predict the specific extent, duration, or full impact that this pandemic may have on our financial condition and results of operations, including ongoing and planned clinical trials.

More specifically, the pandemic may result in prolonged impacts that we cannot predict at this time and we expect that such uncertainties will continue to exist for the foreseeable future.

We continue to monitor the impact of COVID-19 on our business, including our clinical trials, manufacturing facilities and capabilities, and ability to access necessary resources.

For a discussion of the risks presented by the COVID-19 pandemic to our results of operations and financial condition, see Part I, Item 1A.

“ Risk Factors.

Our ultimate goal is to overcome the limitations of current treatments, such as CPIs, by turning immunologically cold, MHC-deficient tumors into hot tumors, and/or reducing the need for standard high-dose chemotherapy in cancer by employing a coordinated approach to establish “immunological memory” that confers long-term benefit for the patient.

Operating Results

From inception through the date of this Annual Report, we have generated minimal revenue from non-exclusive license agreements related to our cell lines, the sale of our bioreactors and related consumables, and grant programs.

We have no clinical products approved for commercial sale and have not generated any revenue from therapeutic and vaccine product candidates that are under development.

Until April 2024, we had no clinical products approved for commercial sale and thus had not generated any revenue from therapeutic and vaccine product candidates that are or were under development.

Now that we have received FDA approval for ANKTIVA, we have begun to generate revenue although we expect it to take some time to generate significant revenue from our approved product and we can provide no assurance when, or if, this will occur.

We began commercial distribution of our approved product in May 2024;

however, we can provide no assurance with respect to our future revenues, market acceptance, reimbursement from third-party payors, or the profitability of our approved product or any other product candidate for which we may obtain approval.

We do not expect additional revenue from our other product candidates unless and until we obtain regulatory approval of and commercialize any of our other product candidates, and we do not know when, or if, this will occur.

We expect to continue to incur significant expenses as we seek to expand our business, including commercializing our approved product, seeking regulatory approvals, conducting research and development across multiple therapeutic areas, participating in clinical trial activities, continuing to acquire or in-license technologies, maintaining, protecting and expanding our intellectual property, and increasing our manufacturing capabilities.

Furthermore, the timing and magnitude of our approved product sales and revenue remain uncertain and may take a significant amount of time to materialize, if ever.

We have incurred net losses in each year since our inception and, as of December 31, 2024, we had an accumulated deficit of $3.4 billion.

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“Financial Statements and Supplementary Data” of this Annual Report for more information.

In anticipation of the commercialization of select drug candidates, we expect to continue to incur significant expenses and increasing operating losses for the foreseeable future, which may fluctuate significantly from quarter-to-quarter and year-to-year.

In anticipation of the ongoing commercialization of our approved product, we expect to continue to incur significant expenses and increasing operating expenses for the foreseeable future, which may fluctuate significantly from quarter-to-quarter and year-to-year.

See “ — Future Funding Requirements ” below for a discussion of our anticipated expenditures and sources of capital we expect to access to fund these expenditures.

Table of Conten t s

Collaboration Agreements

We anticipate that strategic collaborations will continue to be an integral part of our operations, providing opportunities to leverage our partners’ expertise and capabilities to gain access to new technologies and further expand the potential of our technologies and product candidates across relevant platforms.

We anticipate that strategic collaborations will continue to be an integral part of our operations, providing opportunities to leverage our partners’ expertise and capabilities to gain access to new markets for our approved product and acquire new technologies or further expand the potential of our technologies, approved product and product candidates across relevant platforms.

We believe we are well positioned to become a leader in immunotherapy due to our broad and vertically-integrated platforms and through complementary strategic partnerships.

We believe that our innovative approach to orchestrate and combine therapies for optimal immune system response will become a therapeutic foundation across multiple indications.

Additionally, we believe that data from multiple clinical trials indicates N-803 has broad potential to enhance the activity of therapeutic mAbs, including checkpoint inhibitors, across a wide range of tumor types.

Additionally, we believe that data from multiple clinical trials indicates ANKTIVA has broad potential to enhance the activity of therapeutic mAbs, including CPIs, across a wide range of tumor types and potentially rescue lymphopenia by proliferation and activation of NK and T cells.

We may also enter into supply arrangements for various investigational agents to be used in our clinical trials.

See Note 6 , Collaboration and License Agreements and Acquisition , of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report for more information regarding our collaboration and license agreements.

See Part I, Item 1.

“Business— Collaboration and License Agreements ” in this Annual Report for a more detailed discussion regarding our collaboration and license agreements.

Agreements with Related Parties

Our Executive Chairman, Global Chief Scientific and Medical Officer and principal stockholder, founded and has a controlling interest in NantWorks, which is a collection of companies in the healthcare and technology space.

We have entered into arrangements with NantWorks, and certain affiliates of NantWorks.

Affiliates of NantWorks are also affiliates of the company due to the common control by and/or common ownership interest of our Executive Chairman and Global Chief Scientific and Medical Officer.

Related-Party Debt

The following discussion of the company’s related-party promissory notes does not purport to be complete and is qualified in its entirety by reference to the full text of the notes, copies of which are incorporated by reference in Part IV, Item 15.

“Exhibits and Financial Statement Schedules” of this Annual Report.

Related-Party Convertible Promissory Notes

On September 11, 2023, the company entered into a stock purchase agreement with Nant Capital, NantMobile and NCSC (collectively, the “related-party purchasers”), which are entities affiliated with Dr.

Soon-Shiong, pursuant to which the related-party purchasers exchanged outstanding fixed-rate promissory notes held by such related-party purchasers, representing approximately $270.0 million in aggregate principal amount and accrued and unpaid interest, in exchange for an aggregate of 209,291,936 shares of common stock at an exchange price of $1.29 per share.

As a result of the exchange, the company is forever released and discharged from all its obligations and liabilities under these notes.

On September 11, 2023, the company executed a $200.0 million convertible promissory note with Nant Capital.

The note bears interest at Term SOFR plus 8.0% per annum.

The accrued interest shall be payable monthly commencing on September 30, 2023.

The outstanding principal amount and any accrued and unpaid interest are due on the earlier of (i) September 11, 2026 or (ii) upon the occurrence and during the continuance of an “event of default” (as defined in the note).

We may prepay the outstanding principal amount, together with any accrued interest, at any time, in whole or in part, without premium or penalty upon five (5) days’ written notice to the noteholder.

The noteholder has the sole option to convert all (but not less than all) of the outstanding principal amount and accrued but unpaid interest into shares of the company’s common stock at a conversion price of $1.9350 per share.

We received net proceeds of approximately $199.0 million from this financing, net of a $1.0 million origination fee paid to the noteholder.

On December 29, 2023 in connection with the RIPA, the company and Nant Capital entered into a letter amendment whereby this promissory note became subordinated to the RIPA payment obligations.

Related-Party Convertible Note at Fair Value

On March 31, 2023, the company executed a $30.0 million promissory note with Nant Capital.

This note bears interest at Term SOFR plus 8.0% per annum.

The outstanding principal amount and any accrued and unpaid interest are due on the earlier of December 31, 2023 or upon the occurrence and continuation of an event of default (as defined in the note).

The interest on this note is paid on a quarterly basis beginning on June 30, 2023.

The company may prepay the outstanding principal amount and any accrued and unpaid interest of the promissory note, at any time, in whole or in part, without penalty.

Upon receipt of a written notice of prepayment from the company, the noteholder has the right, at its option, to convert the outstanding principal amount to be prepaid and the accrued and unpaid interest thereon (as specified in the notice of prepayment) into shares of the company’s common stock at a price of $2.28 per share.

Additionally, the whole promissory note and any accrued interest may be converted into shares of the company’s common stock at a conversion price of $2.28 per share (subject to appropriate adjustment from time to time for any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event), at the option of the noteholder.

The company received net proceeds of approximately $29.9 million from this financing, net of a $0.1 million origination fee paid to the noteholder, which we used, together with other available funds, to progress our pre-commercialization efforts and clinical development programs, to fund other research and development activities, for capital expenditures, and for other general corporate purposes.

On September 11, 2023, the company and Nant Capital entered into a letter agreement pursuant to which the maturity date of this promissory note was extended from December 31, 2023 to December 31, 2024.

On December 29, 2023 in connection with the RIPA, the company and Nant Capital entered into a letter amendment pursuant to which the maturity date of this promissory note was extended to December 31, 2025, and the note became subordinated to the RIPA payment obligations.

This note was accounted for under the ASC 825-10-15-4 FVO election until it was amended on December 29, 2023.

Under the FVO election, the note was initially measured at its issuance date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date.

With each such remeasurement, the note was adjusted to fair value, with the change in fair value recorded in other expense, net , on the consolidated statement of operations.

Related-Party Nonconvertible Notes

On June 13, 2023, the company executed a $30.0 million promissory note with Nant Capital.

The company was able to request up to three (3) advances of $10.0 million each pursuant to the note.

The principal amount of each advance bears interest at Term SOFR plus 8.0% per annum.

The accrued interest on any advance is payable quarterly on the last business day of June, September and December.

The outstanding principal amount and any accrued and unpaid interest on advances were due on the earlier of (i) December 31, 2023 or (ii) upon the occurrence and during the continuance of an event of default (as defined in the note).

We may prepay the outstanding principal amount, together with any accrued interest, on any then-outstanding advances, at any time, in whole or in part, without premium or penalty, and without the prior consent of the noteholder, upon five (5) days written notice to the noteholder.

The company received net proceeds of approximately $29.9 million from this financing, net of a $0.1 million origination fee paid to Nant Capital, which we used, together with other available funds, to progress our regulatory approval efforts, pre-commercialization activities and clinical development programs, to fund other research and development activities, for capital expenditures, and for other general corporate purposes.

On September 11, 2023, the company and Nant Capital entered into a series of letter agreements pursuant to which the maturity date of related-party nonconvertible promissory notes totaling $505.0 million in principal were extended from December 31, 2023 to December 31, 2024.

On December 29, 2023 in connection with the RIPA, the company and Nant Capital entered into an amended and restated promissory note pursuant to which the existing $30.0 million promissory note, along with other existing related-party nonconvertible promissory notes, was amended to be included in the Tranche 2 principal amount of the amended $505.0 million December 2023 promissory note.

The Tranche 2 of the promissory note has a principal amount of $380.0 million, a maturity date of December 31, 2025, and an interest rate of Term SOFR plus 7.5% per annum.

Based on the terms of the amended and restated promissory note, the noteholder, at its sole discretion, may convert all of the $380.0 million principal amount into shares of common stock at a conversion price of $8.2690 per share.

The new note became subordinated to the RIPA payment obligations.

See Note 12 “Related-Party Debt” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report for more information regarding our related-party debt.

NantWorks, LLC

Our Founder, Executive Chairman and Global Chief Scientific and Medical Officer also founded and has a controlling interest in NantWorks, which is a collection of companies in the healthcare and technology space.

We have entered into arrangements with NantWorks, and certain affiliates of NantWorks.

Affiliates of NantWorks are also affiliates of the company due to the common control by and/or common ownership interest of our Founder, Executive Chairman and Global Chief Scientific and Medical Officer.

See Note 13 “Related-Party Agreements” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report for more information regarding our agreements with NantWorks.

I mmuno-Oncology Clinic, Inc.

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The Clinic is a related party as it is owned by an officer of the company and NantWorks manages the administrative operations of the Clinic.

In 2021, we completed a review of alternative structures that could support our more complex clinical trial requirements and made a decision to explore a potential transition of clinical trials at the Clinic to a new structure (including contracting with a new, non-affiliated professional corporation) to be determined and agreed upon by all parties.

While we have not yet finalized the potential transition, we continue discussions with potential partners around such alternative structures.

During the years ended December 31, 2023, 2022 and 2021 , we recorded $2.2 million, $2.4 million and $1.6 million, respectively, in research and development expense , on the consolidated statements of operations related to clinical trial and transition services provided by the Clinic.

See Note 13 “Related-Party Agreements” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report for more information regarding our agreements with the Clinic.

Related-Party Leases

605 Doug St, LLC

In June 2023, we exercised the option to extend the lease agreement with 605 Doug St, LLC, an entity owned by our Executive Chairman and Global Chief Scientific and Medical Officer, for one additional three-year term through July 2026.

23 Alaska, LLC

Effective August 31, 2023, we executed a lease termination agreement with 23 Alaska, LLC, an entity owned by our Executive Chairman and Global Chief Scientific and Medical Officer.

Duley Road, LLC

Effective October 3, 2023, we exercised the first option to extend the lease agreement with Duley Road, a related party that is indirectly controlled by our Executive Chairman and Global Chief Scientific and Medical Officer, for one additional five-year term through October 31, 2029.

We lease property in multiple facilities across the U.S.

and Italy, including facilities located in El Segundo and Culver City, CA that are leased from related parties.

See Note 13 “Related-Party Agreements” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report for more information regarding our related-party agreements.

“Financial Statements and Supplementary Data” of this Annual Report for more information about our related-party leases.

Related-Party Warrants

A total of 1,638,000 warrants issued to an affiliate of Dr.

Soon-Shiong with an exercise price of $3.24 per share were outstanding as of December 31, 2024.

See Note 16 “Stock-Based Compensation” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report for more information regarding the related-party warrants.

Table of Conten t s

Contingent Value Rights

In connection with our 2017 acquisition of Altor, we issued CVRs under which we agreed to pay the prior stockholders of Altor approximately $304.0 million of contingent consideration upon calendar-year worldwide net sales of ANKTIVA exceeding $1.0 billion prior to December 31, 2026, with amounts payable in cash or shares of our common stock or a combination thereof.

As of December 31, 2024, Dr.

Soon-Shiong, our Founder, Executive Chairman and Global Chief Scientific and Medical Officer, and his related party hold approximately $139.8 million of net sales CVRs.

See Note 9 “Commitments and Contingencies” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report for more information regarding the CVRs.

Components of our Results of Operations

We have no clinical products approved for commercial sale and have not generated any revenue from therapeutic and vaccine product candidates that are under development.

If we fail to complete the development of our product candidates in a timely manner or fail to obtain regulatory approval for them, we may never be able to generate substantial future revenue.

Product Revenue, Net

Prior to the approval of ANKTIVA for commercial sale, we primarily generated revenues from non-exclusive license agreements related to our cell lines, the sale of our bioreactors and related consumables, and grant programs.

The company expects to continue to generate revenue from these programs.

Until April 2024, we had no clinical products approved for commercial sale and thus had not generated any revenue from therapeutic and vaccine product candidates that are or were under development.

We began commercial distribution of our approved product in May 2024;

Cost of Sales

Cost of sales consists primarily of third-party manufacturing costs, distribution, and overhead costs related to ANKTIVA sales.

Cost of sales may also include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances.

All costs associated with the production of ANKTIVA prior to receiving regulatory approval were expensed in research and development expense , on the consolidated statement of operations in the period incurred and therefore are not reflected in cost of sales.

We expect the cost of sales for ANKTIVA to increase in relation to product revenues as we deplete these inventories.

Operating Expenses

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Research and development expense consists of expenses incurred while performing research and development activities to discover and develop our technology and product candidates.

This includes conducting preclinical studies and clinical trials, manufacturing development efforts and activities related to regulatory submissions for product candidates.

We recognize research and development expenses as they are incurred.

This includes conducting preclinical studies and clinical trials, manufacturing development efforts, and activities related to regulatory submissions for our approved product and product candidates.

We expense research and development costs as they are incurred.

Our research and development expenses primarily consist of:

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• expenses incurred under collaborative agreements;

Table of Conten t s

• manufacturing and testing costs and related supplies and materials;

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The company’s external and internal resources are not directly tied to any one research or drug discovery program and are typically deployed across multiple programs and are not allocated to specific product candidates or development programs.

We expect our research and development expenses to increase significantly for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates and conducting our ongoing and planned clinical trials .

We expect our research and development expenses to increase significantly for the foreseeable future as we continue to invest in research and development activities related to expanding our product into new indications and markets, developing our other product candidates, and conducting our ongoing and planned clinical trials .

The process of conducting clinical trials necessary to obtain regulatory approval is costly and time consuming.

The successful development of product candidates is highly uncertain.

At this time, we cannot reasonably estimate the nature, timing or costs required to complete the remaining development of any product candidates.

At this time, we cannot reasonably estimate the nature, timing or costs required to complete the remaining development of our other product candidates or to expand potential approved markets and indications for ANKTIVA.

This is due to the numerous risks and uncertainties associated with the development of product candidates.

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• the number of doses that patients receive;

• the cost of comparative agents used in clinical trials;

• the cost of comparative or combination agents used in clinical trials;

• the drop-out or discontinuation rates of patients;

• potential additional safety monitoring or other studies requested by regulatory agencies;

• potential additional safety monitoring or other studies or incremental cohorts requested by regulatory agencies;

• the duration of patient follow-up;

• the safety profile and efficacy of the product candidate.

We have only one product candidate, Anktiva in combination with BCG for the treatment of patients with BCG-unresponsive NMIBC with CIS with or without Ta or T1 disease, for which we submitted a BLA to the FDA in May 2022.

On October 23, 2023, we announced that we had completed the resubmission of the BLA addressing the issues in the CRL.

On October 26, 2023, we announced that the FDA had accepted our BLA resubmission for review and considered it as a

complete response to the CRL.

The FDA has set a new user fee goal date (PDUFA date) of April 23, 2024.

There can be no assurance that our product candidate will be approved for commercial sale by the FDA in the near term, if ever.

We do not expect any of our other product candidates to be commercially available for the foreseeable future, if ever.

We have only one approved product, ANKTIVA, for which we received approval from the FDA on April 22, 2024.

We began commercial distribution of our approved product in May 2024.

There can be no assurance that our other product candidates will be approved for commercial sale by the FDA in the near term, if ever.

Selling, General and Administrative

Selling, general and administrative expense consists primarily of salaries and personnel-related costs, including employee benefits and any stock-based compensation, for employees performing functions other than research and development.

This includes personnel in executive, finance, human resources, information technology, legal, and administrative support functions.

Other selling, general and administrative expenses include facility-related costs not otherwise allocated to research and development expense, professional fees for auditing, tax and legal services, advertising costs, expenses associated with strategic business transactions and business development efforts, obtaining and maintaining patents, consulting costs, royalties and licensing costs, and costs of our information systems.

We expect that our selling, general and administrative expense will increase for the foreseeable future as we expand operations, build out information systems and increase our headcount to support continued research activities and the development of our clinical programs.

This includes personnel in executive, finance, human resources, information technology, legal, sales and administrative support functions.

Other selling, general and administrative expenses include sales and marketing costs, facility-related costs not otherwise allocated to research and development expense, professional fees for auditing, tax and legal services, advertising costs, expenses associated with strategic business transactions and business development efforts, obtaining and maintaining patents, consulting costs, royalties and licensing costs, and costs of our information systems.

Table of Conten t s

We expect that our selling, general and administrative expense will increase for the foreseeable future as we commercialize our approved product and expand operations, build out information systems and increase our headcount to support continued research activities and the development of our clinical programs.

We have incurred and expect that we will continue to incur in the future, additional costs associated with operating as a public company, including costs to comply with stock exchange listing and SEC requirements, future funding efforts, corporate governance, internal controls, investor relations, disclosure and similar requirements applicable to public companies.

Additionally, if and when we believe that a regulatory approval of a product candidate appears likely, we expect to incur significant increases in our selling, general and administrative expense relating to the sales and marketing of the approved product candidate.

Other Expense, Net

Other expense, net consists primarily of interest and investment income, interest expense (including amortization of debt discounts), unrealized gains and losses from investments in equity securities and equity-method investments, changes in fair value of warrants, derivative liabilities, and a convertible note, realized gains and losses on debt and equity securities, and gains and losses on foreign currency transactions.

Additionally, if and when we believe that a regulatory approval of one of our other product candidates appears likely, we expect to incur significant increases in our selling, general and administrative expense relating to the sales and marketing of any additional approved product candidate.

Other Income (Expense), Net

Other income (expense), net consists primarily of interest and investment income (loss), interest expense (including amortization of debt discounts), unrealized gains and losses from investments in equity securities and equity-method investments, changes in fair value of warrant liabilities, derivative liabilities, and convertible notes, realized gains and losses on debt and equity securities, and gains and losses on foreign currency transactions.

We are subject to U.S.

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federal and state income taxes because of current and accumulated NOLs.

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Discussion of Consolidated Results of Operations

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($ in thousands)

Revenue $ 622 $ 240 $ 382 159 %

Operating expenses:

Product revenue, net $ 14,150 $ — $ 14,150 — %

Other revenues 595 622 (27) (4) %

Total revenue 14,745 622 14,123 2271 %

Operating costs and expenses

Cost of sales — — — — %

Research and development (including amounts

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Impairment of intangible assets — 886 (886) (100) %

Total operating expenses 362,872 351,538 11,334 3 %

Total operating costs and expenses 358,927 362,872 (3,945) (1) %

Loss from operations (344,182) (362,250) 18,068 (5) %

Other expense, net:

Interest and investment income (loss), net 1,131 (3,090) 4,221 (137) %

Other income (expense), net:

Interest and investment income, net 7,975 1,131 6,844 605 %

Interest expense (including amounts with related parties) (114,670) (128,934) 14,264 (11) %

Loss on equity method investment (7,549) (12,107) 4,558 (38) %

Change in fair value of related-party convertible notes 43,472 (36,203) 79,675 (220) %

Interest expense related to revenue interest liability (39,657) (264) (39,393) 14922 %

Change in fair value of warrant liabilities 19,955 (47,600) 67,555 (142) %

Change in fair value of convertible note (36,203) — (36,203) — %

Change in fair value of derivative liabilities 13,477 — 13,477 — %

Loss on equity method investment — (7,549) 7,549 (100) %

Other expense, net (including amounts

with related parties) (15) (2,223) 2,208 (99) %

Total other expense, net (221,642) (65,988) (155,654) 236 %

Total other income (expense), net (69,463) (221,642) 152,179 (69) %

Loss before income taxes and noncontrolling interests (413,645) (583,892) 170,247 (29) %

Income tax benefit (expense) 40 (34) 74 (218) %

Income tax benefit — 40 (40) (100) %

Net loss $ (413,645) $ (583,852) $ 170,207 (29) %

Revenue increased $0.4 million during the year ended December 31, 2023, as compared to the year ended December 31, 2022.

The increase was primarily driven by higher grant revenue received in 2023.

Product Revenue, Net

Product revenue, net increased $14.1 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The increase was driven by sales of ANKTIVA after FDA approval in April 2024.

Other Revenues

Other revenues are consistent during the year ended December 31, 2024, as compared to the year ended December 31, 2023.

Table of Conten t s

Cost of Sales

We did not report cost of sales during the years ended December 31, 2024 and 2023.

Cost of sales consists primarily of third-party manufacturing, distribution and overhead costs.

As a result, our initial product gross margin is higher as our pre-launch inventory costs are not included in the cost of sales.

We expect the cost of sales for ANKTIVA to increase in relation to product revenues as we deplete these inventories.

Research and Development Expense

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Total internal research and development expenses 160,876 165,242 (4,366)

Total research and development expenses $ 232,366 $ 248,149 $ (15,783)

Total research and development expense $ 190,144 $ 232,366 $ (42,222)

Research and development expense decreased $42.2 million primarily attributable to the following:

• A $5.1 million increase in external research and development expenses that was primarily due to higher qualification and testing costs, pre-licensing inspection costs, and outside consulting fees relating to regulatory and compliance services for the resubmission of the BLA, partially offset by a decrease in clinical trial costs and initial BLA submission fees;

• A $7.3 million decrease in personnel-related costs that was primarily due to the write off of accrued discretionary bonuses for 2022 not paid and a reduction in headcount, partially offset by an increase in stock-based compensation costs associated with new retention awards granted to existing employees;

• A $2.1 million decrease in equipment, depreciation, and facility costs that was primarily due to a reduction in activities related to facility expansion that occurred in the prior year, which resulted in lower expenditures for equipment qualification and certification, as well as lower expenses for sanitary services, partially offset by higher equipment maintenance costs;

• An $11.5 million decrease in other research and development costs, primarily attributable to reductions in laboratory and test supplies and material supplies used for internal manufacturing, and no impairment costs from long-lived assets in the current year compared to the prior year, as well as an increase in collaboration costs allocated to a joint venture.

Additionally, the write down of right-of-use assets from a lease used for R&D contributed to an additional decrease in other R&D expenses.

The reduction in costs were partially offset by higher R&D activities and increased costs related to R&D licenses.

• a $37.9 million decrease in external research and development expenses that was primarily due to a reduction in CMO fees and testing services, a reduction in clinical trial costs, and a reduction in outside service costs;

• a $1.8 million increase in personnel-related costs that was primarily due to an increase in salary and benefits expenses from the expansion of the regulatory and sales teams during the year ended December 31, 2024, a reversal in 2023 of the 2022 accrued discretionary bonuses and a reduction in headcount during the year ended December 31, 2023, partially offset by an increase in shared service costs charged out and a decrease in stock-based compensation costs due to the prior years’ retention awards fully vesting during the year ended December 31, 2024;

• a $0.4 million increase in equipment, depreciation, and facility costs that was primarily due to increases in software purchases, facility expenses and common area maintenance costs, partially offset by decreases in depreciation and amortization expenses and lease expenses;

• a $6.5 million decrease in other research and development costs, primarily attributable to lower material supply costs due to decreased production activities, a reclass of overhead costs to capitalized inventory and lower research agreement expenses, partially offset by an increase from no costs allocated to a joint venture and an increase in drug costs.

Table of Conten t s

Selling, General and Administrative Expense

Selling, general and administrative expense increased $39.2 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The rise in expenses was primarily due to a $28.9 million increase in legal expenses, which was driven by higher defense costs and general legal services, as well as fewer legal insurance reimbursements received compared to the prior year.

Additionally, there was a $1.1 million increase in personnel-related costs resulting from higher stock-based compensation expenses and travel costs, a $0.6 million increase in IT and security license fees, and a $0.2 million increase in marketing costs for pre-commercialization activities.

These increases were partially offset by a $2.7 million reduction in consulting services from ERP implementations and professional fees from accounting and tax services, and a $1.2 million reduction in insurance expenses and other operating costs.

The rise in expenses was primarily due to a $19.8 million increase in legal expenses driven by higher defense and settlement costs and increased general legal services, a $14.6 million increase in consulting fees primarily associated with commercial readiness activities, an $8.3 million increase in salary and benefits primarily from the reversal in 2023 of the 2022 accrued discretionary bonuses, and a reduction in headcount during the year ended December 31, 2023, a $2.2 million increase in other operating costs due to post commercialization marketing activities, a $1.3 million increase in license fees, a $1.1 million increase in audit and tax fees, a $0.9 million increase in recruiting and training costs and a $0.4 million increase in travel expenses, partially offset by a $9.4 million decrease in stock-based compensation expense.

Impairment of Intangible Assets

Impairment of intangible assets increased $0.2 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, due to an impairment charge of $0.9 million related to indefinite-lived intangible assets associated with the Tarmogen platform as the research and development program was limited in the current year.

The $0.7 million write off of the organized workforce with definite lives during 2022 was as a result of the workforce reduction at the Dunkirk Facility.

Other Expense, Net

Other expense, net increased $155.7 million during the year ended December 31, 2023, as compared to the year ended December 31, 2022, due to a $65.7 million increase in interest expense driven by higher related-party borrowings, an increase in the Term SOFR rate, and higher amortization of related-party notes discounts.

Additionally, there was a total increase in expense of $97.3 million driven by the change in the fair value of warrant liabilities and the change in the fair value of a related-party convertible note, and a $1.5 million increase in expense due to higher issuance costs associated with our registered direct offerings, and an increase in other expenses.

These changes were partially offset by a $4.6 million lower loss on equity method investments and a $4.2 million increase in investment income.

Impairment of intangible assets decreased $0.9 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The $0.9 million impairment charge during the year ended December 31, 2023 was related to indefinite-lived intangible assets associated with the Tarmogen platform as the research and development program was limited.

There was no impairment of intangible assets incurred during the year ended December 31, 2024.

Other Income (Expense), Net

Other income (expense), net decreased $152.2 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The reduction in other income (expense), net was primarily due to a change of $79.7 million in fair value of convertible notes driven by the revaluation gain of $43.5 million during the year ended December 31, 2024, as compared to the $36.2 million loss during the year ended December 31, 2023, a change of $67.6 million due to the reduction of fair value of warrant liabilities, a decrease of $14.3 million in i nterest expense (including amounts with related parties), a change of $13.5 million in the fair value of derivative liabilities, a decrease of $7.5 million due to loss on equity method investments recorded during the year ended December 31, 2023, an increase of $6.8 million in interest and investment income, net and a decrease of $2.2 million in other income (expense), net (including amounts with related parties), partially offset by an increase of $39.4 million in interest expense related to the revenue interest liability.

Comparison of the Years Ended December 31, 2023 to 2022

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Sources of Liquidity

Since our inception, we have funded our operations primarily through proceeds from the issuance of related-party promissory notes and sales of our common stock under the ATM and our shelf registration statement, and through registered direct offerings.

On December 29, 2023, we entered into the RIPA to support the commercialization of Anktiva for the treatment of BCG-unresponsive NMIBC with CIS with or without Ta or T1 disease, the further development of our other product platforms, and to provide for other working capital needs.

From inception through December 31, 2024, we have funded our operations primarily through proceeds from the issuance of related-party promissory notes, sales of common stock under our shelf registration statements and through RDOs, and a RIPA financing.

Cash and Marketable Securities on Hand

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The general condition of the financial markets and the economy may increase those risks and may affect the value and liquidity of investments and restrict our ability to access the capital markets.

Proceeds from the ATM

During the year ended December 31, 2023, we received net proceeds of approximately $16.1 million from the issuance of 5,605,323 shares under the ATM.

We used the net proceeds from this offering, together with other available funds, to progress our regulatory approval efforts, pre-commercialization activities and clinical development programs, to fund other research and development activities, for capital expenditures, and for other general corporate purposes.

As of December 31, 2023, we had $208.8 million available for future stock issuances under the ATM.

Shelf Registration Statement

During February 2023, we filed a $750.0 million shelf registration statement with the SEC on Form S-3 for the offering and sale of equity and equity-linked securities, including common stock, preferred stock, debt securities, depositary shares, warrants to purchase common stock, preferred stock or debt securities, subscription rights, purchase contracts, and units.

During the year ended December 31, 2023, we sold shares of our common stock and warrants valued at $184.4 million under the shelf.

As of December 31, 2023, we had $565.6 million available for use under the shelf.

This available shelf is in addition to the ATM.

Proceeds from Registered Direct Offerings

On February 15, 2023, we entered into a securities purchase agreement with certain institutional investors for the purchase and sale of 14,072,615 shares of our common stock, as well as warrants (the February 2023 Warrants) that allow such investors to purchase an additional 14,072,615 shares of common stock at an exercise price of $4.2636 per share, for a purchase price of $3.5530 per share and accompanying warrant.

This transaction generated net proceeds of approximately $47.0 million, after deducting placement agent fees and other offering costs.

Pursuant to the terms of a letter agreement dated July 25, 2023, the company and the investors agreed to reduce the exercise price of the outstanding February 2023 Warrants from $4.2636 per share to $3.2946 per share and extend the expiration date of the warrants until July 24, 2026.

On July 20, 2023, we entered into a securities purchase agreement with certain institutional investors for the purchase and sale of 14,569,296 shares of our common stock, as well as warrants that allow such investors to purchase an additional 14,569,296 shares of common stock at an exercise price of $3.2946 per share, for a purchase price of $2.7455 per share and accompanying warrant.

This transaction generated net proceeds of approximately $37.5 million, after deducting placement agent fees and other offering costs.

We used the net proceeds from these registered direct offerings, together with other available funds, to progress our regulatory approval efforts, pre-commercialization activities and clinical development programs, to fund other research and development activities, for capital expenditures, and for other general corporate purposes.

Related-Party Promissory Notes

On September 11, 2023, the company entered into a stock purchase agreement with Nant Capital, NantMobile and NCSC pursuant to which the noteholders exchanged promissory notes totaling approximately $270.0 million in aggregate principal amount and accrued and unpaid interest for an aggregate of 209,291,936 shares of common stock at an exchange price of $1.29 per share.

As a result of the exchange, the company was forever released and discharged from all its obligations and liabilities under the notes.

On September 11, 2023, the company and Nant Capital entered into a series of letter agreements pursuant to which the maturity date of the related-party nonconvertible notes described above totaling $505.0 million in principal was extended from December 31, 2023 to December 31, 2024.

In addition, the company entered into a $200.0 million September 2023 promissory note with Nant Capital.

On December 29, 2023 in connection with the RIPA, the company and Nant Capital entered into an amended and restated promissory note and a letter amendment for the following outstanding promissory notes.

Pursuant to the terms of the amended and restated promissory note, the amended $505.0 million December 2023 promissory note is comprised of a Tranche 1 principal amount of $125.0 million, which was previously the $125.0 million August 2022 promissory note before amendment, and a Tranche 2 with principal amount of $380.0 million, which is made up of the previous $300.0 million December 2021 promissory note, $50.0 million December 2022 promissory note, and $30.0 million June 2023 promissory note.

In addition, the amendment allows Nant Capital, in its sole discretion, to convert all the Tranche 2 principal amount of $380.0 million of the amended promissory note into shares of the company’s common stock.

The conversion price was determined subsequently at $8.2690 per share based on the agreement.

The maturity date of the amended promissory note is December 31, 2025.

Pursuant to the terms of the letter amendment, the maturity date of the $30.0 million March 2023 promissory note was extended from December 31, 2024 to December 31, 2025.

Also, in connection with the RIPA transaction, all outstanding related-party promissory notes became subordinated to the RIPA payment obligations.

After the amendment, the interest rates for the Tranche 1 principal amount and Tranche 2 principal amount of the $505.0 million December 2023 promissory note were Term SOFR plus 8.0% and Term SOFR plus 7.5%, respectively.

See Note 10 , Related-Party Debt , of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report for more information regarding our related-party debt.

Table of Conten t s

Shelf Registration Statements

During 2023, we filed a $750.0 million shelf registration statement with the SEC on Form S-3 for the offering and sale of equity and equity-linked securities, including common stock, preferred stock, debt securities, depositary shares, warrants to purchase common stock, preferred stock or debt securities, subscription rights, purchase contracts, and units.

As of December 31, 2024, we had $565.6 million available for use under this shelf.

In April 2024, we filed a shelf registration statement with the SEC on Form S-3ASR pursuant to which we may, from time to time, sell an indeterminate amount of our common stock, preferred stock, debt securities, depositary shares, warrants, subscription rights, purchase contracts, or units, and an associated prospectus related to the ATM.

Exercise of Warrants

Pursuant to warrant agreements issued in connection with our RDOs, we issued warrants to institutional holders.

During the year ended December 31, 2024, institutional holders exercised a total of 22,242,740 warrants pursuant to the warrant agreements at an exercise price of $3.2946 per share resulting in the issuance of 22,242,740 shares of the company’s common stock for proceeds totaling $73.3 million.

As of December 31, 2024, a total of 6,399,171 warrants remain outstanding with an exercise price of $3.2946 per share and an expiration date of July 24, 2026.

Revenue Interest Purchase Agreement

On December 29, 2023, we entered into the RIPA with Infinity and Oberland.

Pursuant to the RIPA, Oberland acquired certain Revenue Interests from us for a gross purchase price of $200.0 million paid on closing, less certain transaction expenses.

For more information, see Note 9 , Revenue Interest Purchase Agreement , of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report.

Pursuant to the RIPA, Oberland had the option to purchase additional Revenue Interests from us in exchange for a $100.0 million Second Payment upon satisfaction of certain conditions in the RIPA, including receipt of approval from the FDA of our BLA for ANKTIVA on or before June 30, 2024.

On April 22, 2024, the FDA approved our product ANKTIVA and as a result, on May 13, 2024 Oberland purchased additional Revenue Interests from us for a gross purchase price of $100.0 million, less certain issuance costs.

As consideration for the aforementioned payments, Oberland has the right to receive quarterly Revenue Interest Payments from us based on, among other things, a certain percentage of our net sales during such quarter, which are tiered payments ranging from 4.5% to 10.0% (before funding of the Second Payment, 3.0% to 7.0%) of the company’s worldwide net sales, excluding those in China.

See Note 11 “Revenue Interest Purchase Agreement” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report for more information regarding our payment obligations under the RIPA.

Conversion of Related-Party Promissory Notes

On December 10, 2024 in connection with an equity offering, the company received written notices from Nant Capital, the holder of the $30.0 million promissory note due December 31, 2025 and the $200.0 million promissory note due September 11, 2026, of its election to convert the entire outstanding principal and accrued interest due under the existing notes into shares of the company’s common stock.

As of such date, the total outstanding principal and accrued and unpaid interest due under the existing notes of approximately $30.7 million was converted into 13,475,172 shares of the company’s common stock at a price of $2.28 per share (for the $30.0 million note) and approximately $200.7 million was converted into 103,710,088 shares of the company’s common stock at a price of $1.9350 per share (for the $200.0 million note) in accordance with the terms of the existing promissory notes.

See Note 12 “Related-Party Debt” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report for more information regarding our related-party debt.

Stock Purchase and Option Agreement

On December 29, 2023 and in connection with the RIPA, we entered into an SPOA with Oberland.

Under this agreement, Oberland had an option to purchase up to $10.0 million of our common stock, at a price per share to be determined by reference to the 30-day trailing volume weighted-average price of our common stock, calculated from the date of exercise.

The option is exercisable by Oberland at any time until the earliest of (i) December 29, 2028, (ii) a change of control of the company, or (iii) a sale of substantially all of the company’s assets.

Among other limitations, the option may only be exercised to the extent that the common stock issuable pursuant to such exercise would not exceed 19.9% of the common stock outstanding immediately after giving effect to such exercise.

Table of Conten t s

Pursuant to the SPOA, in April 2024 Oberland exercised its option to purchase 858,990 shares of our common stock at an exercise price of $5.8208 per share generating net proceeds of approximately $4.9 million.

In relation to this transaction, we recorded $7.6 million in additional paid-in capital, on the statement of stockholders’ deficit during the year ended December 31, 2024.

Following such exercise, approximately $5.0 million remains available for future exercise under the SPOA as of December 31, 2024.

Uses of Liquidity

In addition to the cash used to fund our operating activities discussed in “ —Future Funding Requirements ” below, we will require cash to settle the following obligations:

• As of December 31, 2023, our indebtedness payable at maturity totaled $735.0 million (excluding unamortized related-party notes discounts), held by entities affiliated with Dr.

In connection with the RIPA, all of our related-party promissory notes are now general unsecured obligations of the company that are subordinated in right of payment to indebtedness, obligations and other liabilities under the RIPA, the Revenue Interests issued pursuant to such agreement, and refinancing of the foregoing.

In addition, the terms of promissory notes totaling $535.0 million were amended and restated to extend the maturity date by one year to December 31, 2025.

The remaining $200.0 million promissory note and any accrued and unpaid interest are due on the earlier of (i) September 11, 2026 or (ii) upon the occurrence and during the continuance of an event of default (as defined in the note).

◦ Pursuant to the terms of the amended and restated promissory note, the amended $505.0 million December 2023 promissory note is comprised of the Tranche 1 principal amount of $125.0 million and the Tranche 2 principal amount of $380.0 million.

All Tranche 2 principal amount of $380.0 million and any accrued and unpaid interest can be converted into shares of the company’s stock at $8.2690 per share at the option of the noteholder.

The interest rates for the Tranche 1 principal amount and Tranche 2 principal amount of the $505.0 million December 2023 promissory note were Term SOFR plus 8.0% per annum and Term SOFR plus 7.5% per annum, respectively.

◦ The $200.0 million convertible promissory note bears interest at Term SOFR plus 8.0% per annum.

The noteholder has the sole option to convert all of the outstanding principal amount and accrued but unpaid interest into shares of the company’s common stock at a conversion price of $1.9350 per share.

◦ The $30.0 million convertible promissory note bears interest at Term SOFR plus 8.0% per annum.

There can be no assurance that the company can refinance these promissory notes or what terms will be available in the market at the time of refinancing.

• As of December 31, 2024, our indebtedness payable at maturity is $505.0 million.

This convertible promissory note is held by Nant Capital, an entity affiliated with Dr.

In connection with the RIPA, our related-party promissory note is a general unsecured obligation of the company that is subordinated in right of payment to indebtedness, obligations, and other liabilities under the RIPA, the Revenue Interests issued pursuant to such agreement, and refinancing of the foregoing.

There can be no assurance that the company can refinance this promissory note or what terms will be available in the market at the time of refinancing.

Furthermore, if prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, then the interest expense relating to the refinanced indebtedness would increase.

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• On December 29, 2023 , we entered into the RIPA with Infinity and Oberland.

Oberland has the right to receive quarterly Revenue Interest Payments from us based on, among other things, our worldwide net sales, excluding those in China, which will be tiered payments initially ranging from 3.00% to 7.00% (or after funding of the Second Payment, 4.50% to 10.00% ), subject to increase or decrease, following December 31, 2029 (the Test Date) depending on whether our aggregate payments made to Oberland as of the Test Date have met or exceeded the Cumulative Purchaser Payments.

Oberland has the right to receive quarterly Revenue Interest Payments from us based on, among other things, our worldwide net sales, excluding those in China, which will be tiered payments initially ranging from 4.5% to 10.0% (before funding of the Second Payment, 3.0% to 7.0%) , subject to increase or decrease, following December 31, 2029 (the Test Date) depending on whether our aggregate payments made to Oberland as of the Test Date have met or exceeded the Cumulative Purchaser Payments.

In addition, if our aggregate payments made as of the Test Date to Oberland do not equal or exceed the amount of the Cumulative Purchaser Payments as of such date, then we are obligated to make a one-time True-Up Payment to Oberland in an amount equal to 100% of the Cumulative Purchaser Payments as of the Test Date, less the aggregate amount of our previous payments to Oberland as of the Test Date.

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“Financial Statements and Supplementary Data” of this Annual Report for more information regarding the RIPA.

• In connection with our 2017 acquisition of Altor, we issued CVRs under which we agreed to pay the prior stockholders of Altor approximately $304.0 million of contingent consideration upon calendar-year worldwide net sales of N-803 exceeding $1.0 billion prior to December 31, 2026, with amounts payable in cash or shares of our common stock or a combination thereof.

• In connection with our 2017 acquisition of Altor, we issued CVRs under which we agreed to pay the prior stockholders of Altor approximately $304.0 million of contingent consideration upon calendar-year worldwide net sales of ANKTIVA exceeding $1.0 billion prior to December 31, 2026, with amounts payable in cash or shares of our common stock or a combination thereof.

As of December 31, 2024, Dr.

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• In connection with our acquisition of VivaBioCell, we are obligated to pay the former owners approximately $2.1 million of contingent consideration upon the achievement of a regulatory milestone relating to the GMP-in-a-Box technology.

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Discussion of Consolidated Cash Flows

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Year Ended December 31,

Cash provided by (used in):

Cash (used in) provided by:

Operating activities $ (391,236) $ (366,757)

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Financing activities 281,630 558,341

Effects of exchange rate changes on cash, cash equivalents,

Effects of exchange rate changes on cash and cash equivalents,

and restricted cash (23) (292)

Net change in cash, cash equivalents, and restricted cash $ 160,822 $ (76,315)

Net change in cash and cash equivalents, and restricted cash $ (121,875) $ 160,822

Operating Activities

During the year ended December 31, 2024, net cash used in operating activities of $391.2 million consisted of a net loss of $413.6 million and $19.4 million of cash used in net working capital, partially offset by $41.8 million in adjustments for non-cash items.

The changes in net working capital consisted primarily of an increase of $8.3 million in inventories, a decrease of $5.5 million in operating lease liabilities, a decrease of $3.2 million in accounts payable, an increase of $2.4 million in accounts receivable, net, a decrease of $1.4 million in accrued expenses, and an increase of $1.1 million in other assets, partially offset by a decrease of $1.7 million in prepaid expenses and other current assets and an increase of $0.8 million with related parties.

Adjustments for non-cash items primarily consisted of $38.0 million of non-cash interest expense related to the revenue interest liability, $34.4 million in stock-based compensation expense, $22.6 million in amortization of related-party note discounts, $17.6 million in depreciation and amortization expense, $5.8 million in non-cash lease expense related to operating lease right‑of‑use assets, $1.2 million in non-cash interest primarily related to related-party promissory notes, $0.6 million in unrealized losses on equity securities driven by a decrease in the value of our investments, and $0.1 million in other items, reduced by a $43.5 million change in the fair value of a related-party convertible note, a $20.0 million change in fair value of warrant liabilities, a $13.5 million change in the fair value of derivative liabilities, and $1.5 million of accretion of discounts on marketable debt securities.

During the year ended December 31, 2023, net cash used in operating activities of $366.8 million consisted of a net loss of $583.9 million, partially offset by $213.1 million in adjustments for non-cash items and $4.0 million of cash provided by net working capital.

Adjustments for non-cash items primarily consisted of $49.2 million in stock-based compensation expense, $47.6 million in change in fair value of warrant liabilities, $42.4 million in amortization of debt issuance costs and accretion of discounts, $36.2 million in change in fair value of convertible notes, $18.5 million in depreciation and amortization expense, $9.2 million in non-cash interest primarily related to related-party promissory notes, $6.1 million in non-cash lease expense related to operating lease right‑of‑use assets, $2.0 million of transaction costs allocable to warrant liabilities, $1.6 million in unrealized losses on equity securities driven by a decrease in the value of our investments, $0.9 million in loss on impairment of intangible assets, partially offset by $0.5 million in other items, and a decrease of $0.1 million in amortization of premiums, net of discounts on marketable debt securities.

Adjustments for non-cash items primarily consisted of $49.2 million in stock-based compensation expense, $47.6 million in change in fair value of warrant liabilities, $42.4 million in amortization of debt issuance costs and accretion of discounts, $36.2 million in change in fair value of convertible notes, $18.5 million in depreciation and amortization expense, $8.9 million in non-cash interest primarily related to related-party promissory notes, $6.1 million in non-cash lease expense related to operating lease right‑of‑use assets, $2.0 million of transaction costs allocable to warrant liabilities, $1.6 million in unrealized losses on equity securities driven by a decrease in the value of our investments, $0.9 million in loss on impairment of intangible assets, and $0.3 million of non-cash interest expense related to the revenue interest liability, partially offset by $0.5 million in other items and a decrease of $0.1 million in amortization of premiums, net of discounts on marketable debt securities.

The changes in net working capital consisted primarily of an increase of $6.7 million in accrued expenses, a decrease of $6.0 million in prepaid expenses and other current assets, and a decrease of $1.9 million in other assets, partially offset by a decrease of $6.5 million in accounts payable, a decrease of $3.0 million in operating lease liabilities, and a decrease of $1.1 million in due to related parties.

During the year ended December 31, 2022, net cash used in operating activities of $337.5 million consisted of a net loss of $417.3 million and $8.0 million of cash used in net working capital, partially offset by $87.8 million in adjustments for non-cash items.

The changes in net working capital consisted primarily of an increase of $16.6 million in prepaid and other current assets, and decreases of $4.3 million in operating lease liabilities and $1.2 million with related parties, partially offset by an increase of $8.0 million in accounts payable, an increase of $4.1 million in accrued expenses and other liabilities, and a decrease of $2.0 million in investment and other assets.

Adjustments for non-cash items primarily consisted of $40.2 million in stock-based compensation expense, $18.3 million in depreciation and amortization expense, $16.3 million in amortization of debt issuance costs and accretion of discounts, $11.7 million in non-cash interest primarily related to related-party promissory notes, $5.9 million in non‑cash lease expense related to operating lease right-of-use assets, $4.2 million in unrealized losses on equity securities driven by a decrease in the value of our investments, $1.3 million in loss on impairment of fixed assets, $1.3 million in amortization of premiums, net of discounts, on marketable debt securities, $1.1 million in transaction costs allocable to a warrant liability, a non-cash $0.7 million loss on the impairment of intangible assets, and $0.3 million in other non-cash items, reduced by a $13.5 million change in fair value of a warrant liability.

We have historically experienced negative cash flows from operating activities, with such negative cash flows likely to continue for the foreseeable future.

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Investing Activities

During the year ended December 31, 2024, net cash used in investing activities was $12.2 million, which included cash outflows of $140.2 million for purchases of marketable debt securities, $6.9 million in purchases of property, plant and equipment, $1.0 million used for the acquisition of a business, net of transaction costs, and $0.7 million cash paid for other investments, partially offset by proceeds of $136.6 million from maturities and sales of marketable debt and equity securities.

During the year ended December 31, 2023, net cash used in investing activities was $30.5 million, which included cash outflows of $30.6 million in purchases of property, plant and equipment (including construction in progress and the completion of a warehouse facility), and $10.4 million in purchases of marketable debt securities, partially offset by cash inflows of $10.5 million from maturities and sales of marketable debt and equity securities.

Our investments in property, plant and equipment are primarily related to acquisitions of equipment that will be used for the manufacturing of our product candidates and expenditures related to the build out of our manufacturing facilities.

During the year ended December 31, 2022, net cash provided by investing activities was $27.3 million, which included cash inflows of $162.0 million from maturities and sales of marketable debt and equity securities, partially offset by $78.2 million of purchases of property, plant and equipment (including construction in progress and depreciable property acquired in the Dunkirk acquisition), $34.3 million of purchases of marketable debt securities, $21.2 million for purchase of intangible assets (related to the Dunkirk acquisition), and a $1.0 million investment in a joint venture.

We expect to accelerate our capital spending as we scale our cGMP manufacturing capabilities, which will require significant capital for the foreseeable future.

Our investments in property, plant and equipment are primarily related to acquisitions of equipment that will be used for the manufacturing of our approved product and product candidates and expenditures related to the buildout of our manufacturing facilities.

We expect to accelerate our capital spending as we scale our GMP manufacturing capabilities, which will require significant capital for the foreseeable future.

Financing Activities

During the year ended December 31, 2023, net cash provided by financing activities was $558.3 million, which consisted of $258.7 million in net proceeds from issuances of related-party promissory notes, $192.8 million in net proceeds from payments received pursuant to the RIPA, $84.4 million in net proceeds from registered direct offerings, $16.1 million in net proceeds from the ATM offering, $9.5 million in net proceeds from issuance of common stock in connection with the RIPA, and $0.3 million in proceeds from the exercise of stock options, partially offset by $3.4 million used for payment of payroll tax withholding in connection with the net share settlement of vested RSUs, and $0.1 million used for principal payments of finance leases.

During the year ended December 31, 2022, net cash provided by financing activities was $233.6 million, which consisted of $174.1 million in net proceeds from issuances of related-party promissory notes, $47.3 million in net proceeds from a registered direct offering, and $13.1 million in net proceeds from the ATM offering, partially offset by $0.6 million related to net share settlement of vested RSUs for payment of payroll tax withholding and a $0.3 million used in other financing activities.

We will need to raise additional capital to fund our future cash needs.

During the year ended December 31, 2024, net cash provided by financing activities was $281.6 million, which consisted of $111.4 million in net proceeds from equity offerings, $97.0 million in net proceeds from payments received pursuant to the RIPA, $73.3 million of proceeds from the exercise of warrants, $4.9 million in net proceeds from the partial exercise of the Oberland stock option, and $0.7 million in proceeds from the exercise of stock options, partially offset by $5.6 million related to net share settlement of vested RSUs for payment of payroll tax withholding and $0.1 million in principal payments of finance leases.

During the year ended December 31, 2023, net cash provided by financing activities was $558.3 million, which consisted of $258.7 million in net proceeds from issuances of related-party promissory notes, $192.8 million in net proceeds from payments received pursuant to the RIPA, $100.5 million in net proceeds from equity offerings, $9.5 million in net proceeds from issuance of common stock in connection with the RIPA, and $0.3 million in proceeds from the exercise of stock options, partially offset by $3.4 million related to net share settlement of vested RSUs for payment of payroll tax withholding, and $0.1 million used for principal payments of finance leases.

Comparison of the Years Ended December 31, 2023 to 2022

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Future Funding Requirements

From inception through the date of this Annual Report we have generated minimal revenue, we have no clinical products approved for commercial sale, and we have not generated any revenue from therapeutic and vaccine product candidates that are under development.

We do not expect to generate significant revenue unless and until we obtain regulatory approval of and commercialize any of our product candidates, and we do not know when, or if, this will occur.

In addition, we expect our operating expenses to significantly increase in connection with our ongoing development activities, particularly as we continue the research, development and clinical trials of, and seek regulatory approval for, our product candidates.

The company expects to continue to generate revenue from these programs.

Until April 2024, we had no clinical products approved for commercial sale and thus had not generated any revenue from therapeutic and vaccine product candidates that are or were under development.

We began commercial distribution of our approved product in May 2024;

In addition, we expect our operating expenses to significantly increase in connection with our ongoing development activities,

Table of Conten t s

particularly as we continue the research, development and clinical trials of, and seek regulatory approval for, our other product candidates.

We have also incurred and expect that we will continue to incur in the future additional costs associated with operating as a public company as well as costs related to future fundraising efforts.

In addition, subject to obtaining regulatory approval of our product candidates, we expect to incur significant commercialization expenses for product sales, marketing, manufacturing and distribution.

In addition, subject to obtaining regulatory approval of our other product candidates, we expect to incur significant incremental commercialization expenses for product sales, marketing, manufacturing and distribution.

We anticipate that we will need substantial additional funding in connection with our continuing operations.

We expect that our operating expenses will increase substantially if and as we:

• continue research and development, including preclinical and clinical development of our existing product candidates;

• potentially seek regulatory approval for our product candidates;

• commercialize our approved product;

• continue research and development, including preclinical and clinical development of our other existing product candidates;

• seek regulatory approval of our approved product in incremental markets and indications and potentially seek regulatory approval for our other product candidates;

• seek to discover and develop additional product candidates;

• establish a commercialization infrastructure and scale up our manufacturing and distribution capabilities to commercialize any of our product candidates for which we may obtain regulatory approval;

• establish a commercialization infrastructure and scale up our manufacturing and distribution capabilities to commercialize any of our other product candidates for which we may obtain regulatory approval;

• seek to comply with regulatory standards and laws;

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• incur additional legal, accounting and other expenses in operating as a public company.

As a result of continuing anticipated operating cash outflows, we believe that substantial doubt exists regarding our ability to continue as a going concern without additional funding or financial support.

However, we believe our existing cash, cash equivalents, and investments in marketable securities, together with capital to be raised through equity offerings (including but not limited to the offering, issuance and sale by us of our common stock that may be issued and sold under the ATM, of which we had $208.8 million available for future issuance as of December 31, 2023, and a February 2023 shelf registration statement, of which we had $565.6 million available for future offerings as of December 31, 2023), and our potential ability to borrow from affiliated entities, will be sufficient to fund our operations through at least the next 12 months following the issuance date of the consolidated financial statements based primarily upon our Executive Chairman and Global Chief Scientific and Medical Officer’s intent and ability to support our operations with additional funds, including loans from affiliated entities, as required, which we believe alleviates such doubt.

We may also seek to sell additional equity, through one or more follow-on public offerings, or in separate financings, or obtain a credit facility, issue other debt in compliance with the terms of the RIPA, or engage in strategic partnership transactions.

As a result of continuing anticipated operating cash outflows as we commercialize our approved product and accelerate our development efforts, we believe that substantial doubt exists regarding our ability to continue as a going concern without additional funding or financial support.

However, we believe our existing cash and cash equivalents, and investments in marketable securities;

sales of our approved product;

capital to be raised through equity offerings, including but not limited to, the offering, issuance and sale by us of our common stock under the February 2023 shelf registration statement, of which we had $565.6 million available for future offerings as of December 31, 2024;

and our potential ability to borrow from affiliated entities will be sufficient to fund our operations through at least the next 12 months following the issuance date of the consolidated financial statements based primarily upon our Founder, Executive Chairman and Global Chief Scientific and Medical Officer’s intent and ability to support our operations with additional funds, including loans from affiliated entities, as required, which we believe alleviates such doubt.

In addition to funds from the future sales of our approved product, which we expect to take time to establish, we may also seek to sell additional equity, through one or more follow-on public offerings, or in separate financings, or obtain a credit facility, issue other debt in compliance with the terms of the RIPA, or engage in strategic partnership transactions.

However, we may not be able to secure such external financing in a timely manner or on favorable terms, if at all.

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Further, because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we may need additional funds to meet our needs sooner than planned.

We will need to obtain additional financing to fund our future operations, including completing the development and commercialization of our product candidates.

We will need to obtain additional financing to fund our future operations, including completing the commercialization of our approved product and the development and commercialization of our other product candidates.

Changing circumstances may cause us to increase our spending significantly faster than we currently anticipate and we may need to raise additional funds sooner than we presently anticipate.

Moreover, research and development and our operating costs and fixed expenses such as rent and other contractual commitments, including those for our research collaborations, are substantial and are expected to increase in the future.

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Our future funding requirements will depend on many factors, including, but not limited to:

• our ability and the time required to successfully commercialize our approved product;

• progress, timing, number, scope and costs of researching and developing our product candidates and our ongoing, planned and potential clinical trials;

• time and cost of regulatory approvals;

• our ability to successfully commercialize any product candidates, if approved and the costs of such commercialization activities;

• our ability to successfully commercialize any of our other product candidates, if approved and the costs of such commercialization activities;

• revenue from product candidates that we may commercialize, if any, including the selling prices for such potential products and the availability of adequate third-party coverage and reimbursement for patients;

• interest and principal payments on our related-party promissory notes, and payment of Revenue Interests, the Second Payment and Test Date payments due under the RIPA;

• interest and principal payments on our related-party promissory note, and repayment of Revenue Interests and Test Date payments due under the RIPA;

• cost of building, staffing and validating our own manufacturing facilities in the U.S., including having a product candidate successfully manufactured consistent with FDA and EMA regulations;

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Unless and until we can generate a sufficient amount of revenues, we may finance future cash needs through public or private equity offerings, license agreements, debt financings, collaborations, strategic alliances and marketing or distribution arrangements.

However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms, or at all, including but not limited to the offering, issuance and sale by us of our common stock that may be issued and sold under the ATM.

To the extent that we raise additional capital through the sale of equity or equity-linked securities (including warrants), convertible debt or under the ATM, our shelf registration statement, or other offerings, or if any of our current debt is converted into equity or if our existing warrants are exercised, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder.

However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms, or at all.

To the extent that we raise additional capital through the sale of equity or equity-linked securities (including warrants), convertible debt or through our shelf registration statements, or other offerings, or if any of our current debt is converted into equity or if our existing warrants are exercised, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder.

The incurrence of additional indebtedness would result in increased fixed payment obligations and could involve certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.

If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms unfavorable to us.

We have no committed source of additional capital and if we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may be required to delay or reduce the scope of or eliminate one or more of our research or development programs or our commercialization efforts.

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• We are obligated to make payments to several related-party affiliates under written agreements and other informal arrangements.

We are also obligated to pay interest and to repay principal under our related-party promissory notes.

For information regarding our financing obligations, see Note 10 , Related-Party Debt, of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report.

We are also obligated to pay interest and to repay principal under our related-party promissory note.

See Note 12 “Related-Party Debt” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report for information regarding our financing obligations.

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• We are obligated to make payments to Oberland associated with our revenue interest liability, which do not have a fixed repayment schedule.

Oberland’s right to receive payments under the RIPA shall terminate when Oberland has received maximum payments (including any True-Up Payment) equal to 195.0% of the then Cumulative Purchaser Payments unless the RIPA is terminated prior to such date.

Under the terms of the agreement, prior to the Test Date, every $100.0 million of worldwide net sales, excluding those in China, of less than or equal to $600.0 million in a calendar year would result in a tiered Revenue Interest Payment of approximately $7.0 million or 7.0% (or $10.0 million or 10.0% after funding of the Second Payment).

Worldwide net sales, excluding those in China, for a calendar year exceeding $600.0 million would result in a tiered Revenue Interest Payment of approximately $3.0 million or 3.0% (or $4.5 million or 4.5% after funding of the Second Payment) for every $100.0 million of worldwide net sales, excluding those in China, above the threshold.

Under the terms of the agreement, prior to the Test Date, every $100.0 million of worldwide net sales, excluding those in China, of less than or equal to $600.0 million in a calendar year will result in a tiered Revenue Interest Payment of approximately $10.0 million or 10.0% (after funding of the Second Payment).

Worldwide net sales, excluding those in China, for a calendar year exceeding $600.0 million will result in a tiered Revenue Interest Payment of approximately $4.5 million or 4.5% (after funding of the Second Payment) for every $100.0 million of worldwide net sales, excluding those in China, above the threshold.

In the future, cumulative worldwide net sales, excluding those in China, levels up to the Test Date will determine whether or not we are required to make a True-Up Payment and implement modified payment rates.

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“Financial Statements and Supplementary Data” of this Annual Report for information regarding our contingent consideration obligations.

• We have contractual obligations to make payments to related-party affiliates and third parties under unconditional purchase arrangements.

• We have certain contractual commitments to make payments to related-party affiliates and third parties that are expected to be paid during the following periods:

◦ Fiscal Year 2025 – $37.0 million is estimated to be payable, primarily related to capital expenditures and open purchase orders as of December 31, 2024 for the acquisition of goods and services in the ordinary course of business, and near-term upfront milestone payments to third parties.

The timing of payment depends on the actual progress of buildouts, completion of services, and the realization of milestones associated with third-party agreements;

◦ Fiscal year 2026 and beyond – Up to a maximum of $387.8 million as of December 31, 2024 based on the achievement of various development, regulatory and commercial milestones for agreements with third parties.

These payments may not be realized or may be modified and are contingent upon the occurrence of various future events, substantially all of which have a high degree of uncertainty of occurring.

See Note 9 “Commitments and Contingencies—Unconditional Purchase Obligations” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report for information on these unconditional purchase obligations.

• We have certain contractual commitments that are expected to be paid in fiscal year 2024, depending on the progress of build outs, completion of services, and the realization of milestones associated with third-party agreements.

This amounts totals $60.8 million and is primarily related to capital expenditures, open purchase orders as of December 31, 2023 for the acquisition of goods and services in the ordinary course of business, and near-term upfront milestone payments to third parties.

• In addition, we have contractual commitments that are expected to be paid in fiscal year 2025 and beyond based on the achievement of various development, regulatory and commercial milestones for agreements with third parties.

These payments may not be realized or may be modified and are contingent upon the occurrence of various future events, substantially all of which have a high degree of uncertainty of occurring.

As of December 31, 2023, the maximum amount that may be payable related to these commitments is $769.3 million.

• In connection with our leasehold interest in the Dunkirk Facility, we committed to spend an aggregate of $1.52 billion on operational expenses during the initial 10-year term, and an additional $1.50 billion on operational expenses if we elect to renew the lease for the additional 10-year term.

These amounts are not included in the discussion above.

See Note 6 , Collaboration and License Agreements and Acquisition , of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

See Note 8 “Collaboration and License Agreements and Acquisition—Acquisition” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report for more information on these obligations.

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Critical Accounting Policies and Estimates

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The preparation of consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

On an ongoing basis, we evaluate our estimates, including those related to the valuation of equity-based awards, deferred income taxes and related valuation allowances, revenue interest liability, preclinical and clinical trial accruals, impairment assessments, CVR measurement and assessments, the measurement of right-of-use assets and lease liabilities, useful lives of long-lived assets, loss contingencies, fair value calculation of warrants and convertible promissory notes, fair value measurements, asset acquisition, and the assessment of our ability to fund our operations for at least the next 12 months from the date of issuance of these consolidated financial statements.

We base our estimates on historical experience and on various other market-specific and relevant assumptions that we believe to be reasonable under the circumstances.

Estimates are assessed each period and updated to reflect current information, such as the economic considerations related to the impact that any ongoing pandemic could have on our significant accounting estimates.

Actual results could differ from those estimates.

Those estimates can be complex and actual results could differ materially from those estimates.

Estimates are assessed each period and updated to reflect current information.

While our significant accounting policies are more fully described in the notes accompanying our consolidated financial statements that appear in Part II, Item 8.

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Revenue Recognition

We have primarily generated revenues from non-exclusive license agreements related to our cell lines, the sale of our bioreactors and related consumables and grant programs.

The nonexclusive license agreements with a limited number of pharmaceutical and biotechnology companies grant them the right to use our cell lines and intellectual property for non-clinical use.

Product Revenue, Net

After FDA approval in April 2024, the company began recognizing revenue from the sale of ANKTIVA in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers (ASC 606).

The provisions of ASC 606 require the following steps to determine revenue recognition:

(i) identification of contract with the customers;

(ii) identification of performance obligations;

(iii) measurement of the transaction price, including the constraint on variable consideration;

(iv) allocation of the transaction price to the performance obligations based on estimated selling prices;

and (v) recognition of revenue when (or as) we satisfy each performance obligation.

At contract inception, we assess the goods or services promised within each contract, determine whether each promised good or service is distinct and identify those that are performance obligations.

We recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The company entered into a third-party logistics agreement to engage a 3PL Agent to distribute the company’s products to its customers.

The 3PL Agent provides services to the company that include storage, shipping and distribution, processing product returns, as well as customer service, order to cash, and logistics support.

The company’s customers are currently limited to pharmaceutical specialty distributors and specialty pharmacy.

The company primarily sells ANKTIVA to specialty distributors through a drop-ship arrangement under which orders from various healthcare institutions such as hospitals, medical facilities, physician practices, pharmacies and government agencies are processed through and controlled by specialty distributors.

Under the drop-ship arrangement, the 3PL Agent ships the product to various health care institutions without the specialty distributor ever taking physical possession of the product.

The company recognizes product revenue when ANKTIVA is delivered to the destination as instructed and controlled by specialty distributors.

The company also sells ANKTIVA directly to a specialty pharmacy who then subsequently distributes ANKTIVA to physicians, clinics, and certain medical centers, hospitals or other healthcare institutions.

The company recognizes product revenue when ANKTIVA is delivered to the specialty pharmacy location.

Product revenue is recorded with each sale at wholesale acquisition cost, net of:

(a) consideration payable to customers;

and (b) variable considerations.

The company pays fees to the specialty distributors for certain administrative services associated with the distribution of the product wherein the terms of which are also detailed in its contracts.

Such fees are not for a distinct good or service and, accordingly, are recorded as a reduction of revenue, as well as a reduction of accounts receivable (trade discounts) or as a component of accrued expenses (distributor fees).

The variable consideration components include, but are not limited to, prompt payment discounts, product returns, chargebacks, rebates, and co-payment assistance, which are collectively referred to as “Gross-to-Net Adjustments.” In accordance with ASC 606, the company must make significant judgments to determine the estimates for certain variable considerations.

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The company utilizes the expected value method when estimating the amount of variable consideration to include in the transaction price with respect to each of the foregoing variable consideration components.

Where appropriate, these estimates are based on factors such as industry and forecasted customer buying and payment patterns, our experience, current contractual and statutory requirements, and specific known market events and trends.

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Variable considerations are reassessed each reporting period, and adjustments are recorded on a cumulative catch-up basis, which affects product revenue and net income in the period of adjustment.

The actual amounts of variable consideration ultimately received may differ from our estimates.

If actual results in future periods vary from our estimates, we adjust these estimates accordingly.

As we gain more experience, estimates will be more heavily based on the expected utilization from historical data we have accumulated since the ANKTIVA product launch.

The consideration payable to customers and contingent considerations reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the contracts.

Other Revenues

The company expects to continue to generate revenue from these programs.

We sell our proprietary GMP-in-a-Box bioreactors and related consumables to affiliated companies and third parties.

The arrangements typically include delivery of bioreactors, consumables, and providing installation service and perpetual software licenses for using the equipment.

We recognize revenue when customers obtain control and can benefit from the promised goods or services, generally upon installation of the bioreactors, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.

Upfront payments and fees are recorded as deferred revenue upon receipt and recognized as revenue when we satisfy our performance obligations under these arrangements.

Grant revenue is typically paid for reimbursable costs incurred over the duration of the associated research project or clinical trial and is recognized either when expenses reimbursable under the grants have been incurred and payments under the grants become contractually due or when cash is received, depending on the certainty of payment and other factors specific to each grant.

License Agreements with Third Parties

The company has nonexclusive license agreements with a limited number of pharmaceutical and biotechnology companies that grant them the right to use our cell lines and intellectual property for non-clinical use.

These agreements generally include upfront fees and annual research license fees for such use, as well as commercial license fees for sales of the licensee products developed or manufactured using our intellectual property and cell lines.

We have generated revenues from product sales of our proprietary GMP-in-a-Box bioreactors and related consumables, primarily to related parties.

Additionally, we also generated revenues from grant programs.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.

A contract’s transaction price is allocated to each distinct performance obligation based on relative standalone selling price and recognized as revenue when, or as, the performance obligation is satisfied.

Under our license agreements with customers, we typically promise to provide a license to use certain cell lines and related patents, the related know-how, and future research and development data that affect the license.

We have concluded that these promises represent one performance obligation due to the highly interrelated nature of the promises.

We have concluded that these promises represent a single performance obligation due to the highly interrelated nature of the promises.

We provide the cell lines and know-how immediately upon entering into the contracts.

Research and development data are provided throughout the term of the contract when and if available.

The license agreements may include non-refundable upfront payments, event-based milestone payments, sales-based royalty payments, or some combination of these.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.

Our license agreements may include non-refundable upfront payments, event-based milestone payments, sales-based royalty payments, or some combination of these.

The event-based milestone payments represent variable consideration, and we use the most likely amount method to estimate this variable consideration.

Given the high degree of uncertainly around the achievement of these milestones, we do not recognize revenue from these milestone payments until the uncertainty associated

with these payments is resolved.

Given the high degree of uncertainty around the achievement of these milestones, we do not recognize revenue from these milestone payments until the uncertainty associated with these payments is resolved.

We currently estimate variable consideration related to milestone payments to be zero and, as such, no revenue has been recognized for milestone payments.

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On a quarterly basis, we re-evaluate our estimate of milestone variable consideration to determine whether any amount should be included in the transaction price and recorded in revenue prospectively.

We also have sold our proprietary GMP-in-a-Box bioreactors and related consumables to affiliated companies.

The arrangements typically include delivery of bioreactors, consumables, and providing installation service and perpetual software licenses for using the equipment.

Upfront payments and fees are recorded as deferred revenue upon receipt and recognized as revenue when we satisfy our performance obligations under these arrangements.

Inventory is stated at the lower of cost or net realizable value and consists of raw materials, work-in-progress and finished goods.

Cost is determined using a standard cost method, which approximates actual cost, and assumes a FIFO flow of goods.

Inventory that is used for clinical development purposes is expensed in research and development expense , on the consolidated statement of operations when consumed.

Table of Conten t s

Cost of sales consists primarily of third-party manufacturing costs, distribution, and overhead costs related to sales of approved product subsequent to receiving regulatory approval.

Cost of sales may also include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances.

The work-in-progress materials consists of bulk drug substance and drug product, which have a multi-year shelf life.

When the bulk drug substance is manufactured into ANKTIVA drug product, those goods have a shelf life of two years from the date of manufacture.

During September 2024, the shelf life of ANKTIVA drug product was extended to three years.

The work-in-progress drug product gets converted to finished goods at the time of labeling.

Our expectation is to sell finished goods at least twelve months prior to expiration.

Due to our long manufacturing lead time, it was necessary to build up inventory in support of ANKTIVA forecasted sales.

As a result of being in the early stages of the ANKTIVA product launch, the company is continuing to evaluate the length of its operating cycle.

On a quarterly basis, the company analyzes its inventory levels for excess quantities and obsolescence (expiration), taking into account factors such as historical and anticipated future sales compared to quantities on hand and the remaining shelf life.

As of December 31, 2024, we determined that a reserve related to ANKTIVA inventory for excess quantities and obsolescence was not required.

In addition, since the FDA approval of ANKTIVA the company has not recorded any inventory write downs.

Revenue Interest Liability

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The terms of an embedded derivative related to a contingent exercisable prepayment feature of a convertible note have been evaluated and deemed to require bifurcation.

This embedded derivative will be initially measured at fair value and will be remeasured to fair value at each reporting date until the derivative is settled.

This embedded derivative was initially measured at fair value and is remeasured to fair value at each reporting date until the derivative is settled.

On December 10, 2024, the company and Nant Capital entered into a second amended and restated promissory note (the $505.0 million December 2024 Promissory Note) for which the FVO method of accounting was elected.

As such, the bifurcation of the embedded derivative is not required.

The embedded derivative is now included within the fair value of the second amended and restated promissory note recorded in related-party convertible note payable at fair value , on the consolidated balance sheet.

In addition, the RIPA contains certain features that meet the definition of being an embedded derivative requiring bifurcation as a separate compound financial instrument apart from the RIPA.

The derivative liability is initially measured at fair value upon issuance and is subject to remeasurement at each reporting period with changes in fair value recognized in other expense, net, on the consolidated statement of operations.

Preclinical and Clinical Trial Accruals

As part of the process of preparing the consolidated financial statements, we are required to estimate expenses resulting from obligations under contracts with vendors, clinical research organizations and consultants.

The financial terms of these contracts vary and may result in payment flows that do not match the periods over which materials or services are provided under such contracts.

We estimate clinical trial and research agreement-related expenses based on the services performed, pursuant to contracts with research institutions and clinical research organizations and other vendors that conduct clinical trials and research on our behalf.

In accruing clinical and research-related fees, we estimate the time period over which services will be performed and activity expended in each period.

If the actual timing of the performance of services or the level of effort varies from the estimate, we will adjust the accrual accordingly.

Payments made under these arrangements in advance of the receipt of the related services are recorded as prepaid expenses until the services are rendered.

The derivative liability is initially measured at fair value upon issuance and is subject to remeasurement at each reporting period with changes in fair value recognized in other income (expense), net , on the consolidated statement of operations.

Table of Conten t s

Research and Development Costs

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This includes instances when our third-party insurers have agreed to pay, on our behalf, certain legal defense costs and settlement amounts directly to applicable law firms and a settlement fund.

The company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC Topic 480, Distinguishing Liabilities from Equity (ASC 480) and FASB ASC Topic 815, Derivatives and Hedging (ASC 815).

indexed to the company’s own stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the company’s control, among other conditions for equity classification.

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the company’s own stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the company’s control, among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

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For warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and on each balance sheet date thereafter.

Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss in o ther expense, net , on the consolidated statement of operations.

Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss in other income (expense), net , on the consolidated statement of operations.

The fair value of the warrants was estimated using the Black-Scholes option pricing model.

Table of Conten t s

Fair Value Option Election

The company accounted for a convertible note issued on March 31, 2023 under the FVO election of ASC 825 until it was amended and restated on December 29, 2023.

Prior to its extinguishment on December 29, 2023 , the convertible note was a debt host financial instrument containing embedded features wherein the entire financial instrument was initially measured at its issuance-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date.

Changes in the estimated fair value of this convertible note were recorded in other expense, net, on the consolidated statement of operations, except that changes in estimated fair value caused by changes in the instrument-specific credit risk were recorded in other comprehensive (loss) income .

In accordance with ASC 470-50, when the convertible note was extinguished on December 29, 2023 , the cumulative amount previously recorded in other comprehensive (loss) income resulting from changes in the instrument-specific credit risk were reclassified and reported in current earnings on the consolidated statement of operations.

The company elected to apply the FVO method of accounting in line with ASC 825 and account for certain of its notes and embedded derivatives at fair value as a single instrument in accordance with ASC 815.

The notes for which the FVO is elected are recorded at fair value upon the date of issuance and subsequently remeasured to fair value at each reporting period.

Changes in the fair value of the notes accounted for at fair value are recorded as a component of other income (expense), net, on the consolidated statement of operations.

Any changes in fair value caused by instrument-specific credit risk are recorded separately in other comprehensive income (loss), on the consolidated statement of comprehensive loss.

The cumulative amount previously recorded in other comprehensive income (loss) resulting from changes in the instrument-specific credit risk for extinguished notes are reclassified and reported in current earnings on the consolidated statement of operations.

All costs associated with the issuance of the convertible promissory note accounted for using the FVO were expensed upon issuance.

The company has applied the FVO on the $505.0 million December 2024 Promissory Note and $30.0 million March 2023 Promissory Note prior to its extinguishment on December 29, 2023.

See Note 12 “Related-Party Debt” for more information.

During the year ended December 31, 2024, the company recorded $1.2 million changes in fair value related to instrument-specific credit risk.

Debt Modification and Extinguishment

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Amounts paid by the company to the lenders, are reflected as additional debt discount and amortized as an adjustment of interest expense over remaining term of modified debt using the effective interest rate method.

Provision for Income Taxes

Our provision for income taxes is computed under the asset and liability method.

Significant estimates are required in determining our provision for income taxes.

Some of these estimates are based on interpretations of existing tax laws or regulations.

We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.

Under this method, deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (temporary differences) at enacted tax rates in effect for the years in which the differences are expected to reverse.

A valuation allowance is established for deferred tax assets for which it is more likely than not that some portion or all of the deferred tax assets, including net operating losses and tax credits, will not be realized.

We periodically re-assess the need for a valuation allowance against our deferred tax assets based on various factors including our historical earnings experience by taxing jurisdiction, and forecasts of future operating results and utilization of net operating losses and tax credits prior to their expiration.

Significant judgment is required in making this assessment and, to the extent that a reversal of any portion of our valuation allowance against our deferred tax assets is deemed appropriate, a tax benefit will be recognized against our provision for income taxes in the period of such reversal.

Table of Conten t s

Stock-Based Compensation

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For awards with service or performance conditions, we recognize the effect of forfeitures in compensation cost in the period that the award was forfeited.

Business Combinations

Business combinations are accounted for using the acquisition method of accounting in accordance with ASC 805-50.

These standards require that the total cost of acquisition be allocated to the tangible and intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition, with the excess purchase price recorded as goodwill.

The allocation of the purchase price is dependent upon certain valuations and other studies.

Acquisition costs are expensed as incurred.

Contingent consideration incurred in connection with a business combination are recorded at their fair values on the acquisition date and re-measured at their fair values each subsequent reporting period until the related contingencies are resolved.

The resulting changes in fair values are recorded as research and development expense, on the consolidated statements of operations and comprehensive income (loss).

Changes in fair values reflect changes to our assumptions regarding probabilities of successful achievement of related milestones, the timing in which the milestones are expected to be achieved, and the discount rate used to estimate the fair value of the obligation.

Recent Accounting Pronouncements

See Note 2 “Summary of Significant Accounting Policies” of the “Notes to Consolidated Financial Statements” that appears in Part II, Item 8.

“Financial Statements and Supplementary Data” of this Annual Report for more information regarding recent accounting pronouncements or changes in accounting pronouncements that are of significance, or potential significance, to us.

“Financial Statements and Supplementary Data” of this Annual Report for a discussion of recent accounting pronouncements or changes in accounting pronouncements that are of significance, or potential significance, to us.

Other Company Information

Transition from Smaller Reporting Company Status

On December 31, 2024, we ceased to be a “smaller reporting company” because the market value of our common stock held by non-affiliates exceeded $700.0 million as of June 28, 2024.

However, we are complying with certain scaled disclosure requirements available to smaller reporting companies in this Annual Report (including as incorporated by reference to the information contained in our Proxy Statement), which we are permitted to do under SEC rules because we were a smaller reporting company in 2024.

As a result, the information that we provide to our stockholders may be different than what you might receive from other public reporting companies in which you hold equity interests.

Table of Conten t s

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis