What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-03-03 compared with 2024-03-19 · 1018 added, 706 removed, 1354 unchanged (56% of the section changed)

12 unchanged sentences

Notes to Consolidated Financial Statements

Table of Conten t s

Report of Independent Registered Public Accounting Firm

6 unchanged sentences

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 3, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

1 unchanged sentence

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

1 unchanged sentence

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

5 unchanged sentences

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Table of Conten t s

Related party transactions and disclosures

Description of the

Matter As described in Notes 10 and 11 to the consolidated financial statements, the Company’s Executive Chairman, Global Chief Scientific and Medical Officer and principal stockholder Dr.

Patrick Soon-Shiong has a controlling interest in certain entities with which the Company has entered into material transactions including related party debt transactions with Nant Capital, LLC, NantWorks, NantMobile, LLC and NantCancerStemCell.

Affiliates of such entities are also affiliates of the Company due to the common control of the Company’s Executive Chairman, Global Chief Scientific and Medical Officer and principal stockholder.

Matter As described in Notes 12 and 13 to the consolidated financial statements, the Company’s Founder, Executive Chairman and Global Chief Scientific and Medical Officer Dr.

Patrick Soon-Shiong has a controlling interest in certain entities with which the Company has entered into material transactions including related-party debt transactions with Nant Capital, LLC.

Affiliates of such entities are also affiliates of the Company due to the common control of the Company’s Founder, Executive Chairman and Global Chief Scientific and Medical Officer.

Assessing the sufficiency of procedures performed to identify related parties and significant related-party transactions and determining the identified significant related-party transactions were properly recorded, presented and disclosed was challenging due to the nature, volume and the significance of related-party transactions.

6 unchanged sentences

We inquired of management, members of the Company’s audit committee, and the Company’s related-party transaction committee chair regarding the completeness of the significant related-party transactions identified.

We also inspected questionnaires received from the Company’s directors and officers, read minutes of the meetings of Board of Directors and its various Committees, read employment and compensation contracts, proxy statements and other relevant filings with the Securities and Exchange Commission that relate to the Company’s financial relationships and transactions with the Company’s executive officers and with other entities controlled by the Company’s Executive Chairman, Global Chief Scientific and Medical Officer and principal stockholder.

We also inspected questionnaires received from the Company’s directors and officers, read minutes of the meetings of Board of Directors and its various Committees, read employment and compensation contracts, proxy statements and other relevant filings with the Securities and Exchange Commission that relate to the Company’s financial relationships and transactions with the Company’s executive officers and with other entities controlled by the Company’s Founder, Executive Chairman and Global Chief Scientific and Medical Officer.

We confirmed the significant transactions and/or balances, as applicable, with the related parties.

We also obtained the underlying agreements for significant related-party transactions and assessed the associated accounting and recognition.

We involved valuation specialists to assist in evaluating the appropriateness of the valuation methodologies and reasonableness of the assumptions used in the valuation of the related party debt including underlying conversion features and embedded derivatives, as deemed necessary, as described in Note 10 to the consolidated financial statements.

We involved valuation specialists to assist in evaluating the appropriateness of the valuation methodologies and reasonableness of the assumptions used in the valuation of the related-party debt including underlying conversion features, as described in Note 12 to the consolidated financial statements.

/s/ Ernst & Young LLP

2 unchanged sentences

March 3, 2025

Table of Conten t s

ImmunityBio, Inc.

6 unchanged sentences

Marketable securities 6,381 1,009

Accounts receivable, net 2,360 —

Inventories 8,272 —

Due from related parties 293 2,019

3 unchanged sentences

Property, plant and equipment, net 137,094 146,082

Intangible assets, net 17,093 20,003

Goodwill and intangible assets, net 15,933 17,093

Convertible note receivable 7,130 6,879

6 unchanged sentences

Accrued expenses and other liabilities 40,580 42,708

Related-party promissory notes, net of discounts and deferred issuance costs ( Note 10 )

Due to related parties 173 1,136

3 unchanged sentences

Related-party convertible notes and accrued interest, net of discount ( Note 12 )

576,951 241,271

Related-party convertible note payable, at fair value ( Note 7 and Note 12 )

Revenue interest liability ( Note 11 )

284,404 155,415

Derivative liabilities ( Note 11 and Note 12 )

25,800 35,333

Operating lease liabilities, less current portion (including amounts with related parties) 34,823 39,942

5 unchanged sentences

Common stock, $ 0.0001 par value;

1,350,000,000 and 900,000,000 shares authorized

as of December 31, 2023 and 2022, respectively;

1,350,000,000 shares authorized

as of December 31, 2024 and 2023;

852,904,340 and 670,867,344 shares

9 unchanged sentences

The accompanying notes are an integral part of these consolidated financial statements.

Table of Conten t s

ImmunityBio, Inc.

1 unchanged sentence

Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(in thousands, except per share amounts)

Year Ended December 31,

2024 2023 2022

Revenue $ 622 $ 240 $ 934

Operating expenses:

Product revenue, net $ 14,150 $ — $ —

Other revenues 595 622 240

Total revenue 14,745 622 240

Operating costs and expenses

Cost of sales — — —

Research and development (including amounts

3 unchanged sentences

Impairment of intangible assets — 886 681

Total operating expenses 362,872 351,538 331,214

Total operating costs and expenses 358,927 362,872 351,538

Loss from operations ( 344,182 ) ( 362,250 ) ( 351,298 )

Other expense, net:

Other income (expense), net:

Interest and investment income (loss), net 7,975 1,131 ( 3,090 )

Interest expense (including amounts with related parties) ( 114,670 ) ( 128,934 ) ( 63,515 )

Loss on equity method investment ( 7,549 ) ( 12,107 ) ( 803 )

Change in fair value of related-party convertible notes 43,472 ( 36,203 ) —

Interest expense related to revenue interest liability ( 39,657 ) ( 264 ) —

Change in fair value of warrant liabilities 19,955 ( 47,600 ) 13,460

Change in fair value of related-party convertible note ( 36,203 ) — —

Other (expense) income, net (including amounts

with related parties) ( 2,223 ) ( 736 ) 193

Total other expense, net ( 221,642 ) ( 65,988 ) ( 19,559 )

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

Loss on equity method investment — ( 7,549 ) ( 12,107 )

Other expense, net (including amounts with related parties) ( 15 ) ( 2,223 ) ( 736 )

Total other income (expense), net ( 69,463 ) ( 221,642 ) ( 65,988 )

Loss before income taxes and noncontrolling interests ( 413,645 ) ( 583,892 ) ( 417,286 )

3 unchanged sentences

Net loss attributable to ImmunityBio common stockholders $ ( 413,564 ) $ ( 583,196 ) $ ( 416,567 )

Net loss per ImmunityBio common share – basic and diluted $ ( 1.15 ) $ ( 1.04 ) $ ( 0.89 )

Net loss per ImmunityBio common share – basic $ ( 0.59 ) $ ( 1.15 ) $ ( 1.04 )

Net loss per ImmunityBio common share – diluted $ ( 0.62 ) $ ( 1.15 ) $ ( 1.04 )

Weighted-average number of common shares used in computing

net loss per share – basic and diluted 508,635,592 399,900,374 389,234,156

net loss per share – basic 697,312 508,636 399,900

Weighted-average number of common shares used in computing

net loss per share – diluted 700,443 508,636 399,900

The accompanying notes are an integral part of these consolidated financial statements.

Table of Conten t s

ImmunityBio, Inc.

5 unchanged sentences

Net loss $ ( 413,645 ) $ ( 583,852 ) $ ( 417,320 )

Other comprehensive (loss) income, net of income taxes:

Other comprehensive income (loss), net of income taxes:

Change in fair value of related-party convertible note related to

instrument-specific credit risk 1,221 — —

Net unrealized gains (losses) on available-for-sale securities 15 60 ( 183 )

2 unchanged sentences

Foreign currency translation adjustments ( 90 ) ( 218 ) 238

Total other comprehensive (loss) income ( 173 ) 179 ( 118 )

Total other comprehensive income (loss) 1,188 ( 173 ) 179

Comprehensive loss ( 412,457 ) ( 584,025 ) ( 417,141 )

3 unchanged sentences

The accompanying notes are an integral part of these consolidated financial statements.

Table of Conten t s

ImmunityBio, Inc.

15 unchanged sentences

offering, net of commissions and

offering costs of $ 4,674 ( Note 13 )

offering costs of $ 302

2,051,894 — 13,129 — — 13,129 — 13,129

Conversion of related-party convertible note and

accrued interest, net of unamortized debt discount,

into equity 9,986,920 1 51,946 — — 51,947 — 51,947

Issuance of shares in an RDO, net of discount and

offering costs of $ 1,897 and value ascribed

to associated warrants

9,090,909 1 13,006 — — 13,007 — 13,007

Stock-based compensation expense — — 40,179 — — 40,179 — 40,179

2 unchanged sentences

Net share settlement for RSUs vesting ( 156,011 ) — ( 616 ) — — ( 616 ) — ( 616 )

Sales of assets to an entity under common control — — 1,435 — — 1,435 — 1,435

Other comprehensive (loss) income, net of tax — — — — ( 118 ) ( 118 ) — ( 118 )

Shares issued pursuant to litigation settlement 2,229,296 — 10,656 — — 10,656 — 10,656

Gain on extinguishment of debt with related parties

under common control — — 82,858 — — 82,858 — 82,858

Other comprehensive income (loss), net of tax — — — — 179 179 — 179

Net loss — — — ( 416,567 ) — ( 416,567 ) ( 753 ) ( 417,320 )

1 unchanged sentence

421,569,115 42 1,930,936 ( 2,378,488 ) 183 ( 447,327 ) ( 2,493 ) ( 449,820 )

The accompanying notes are an integral part of these consolidated financial statements.

Table of Conten t s

ImmunityBio, Inc.

and Subsidiaries

Consolidated Statements of Stockholders’ Deficit (Continued)

(in thousands, except share amounts)

Common Stock Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Stockholders’

Deficit Noncontrolling

Interests Total

Stockholders’

Shares Amount

Issuance of common stock “at-the market”

offering, net of commissions and

offering costs of $ 302 ( Note 13 )

offering costs of $ 457

5,605,323 1 16,105 — — 16,106 — 16,106

Conversion of related-party convertible note and

accrued interest, net of unamortized debt discount,

into equity ( Note 10 )

Issuance of common stock in exchange for notes

payable 209,291,936 21 269,966 — — 269,987 — 269,987

Issuance of shares in RDOs, net of discounts and

offering costs of $ 3,535 and value ascribed

to associated warrants

28,641,911 3 36,928 — — 36,931 — 36,931

Issuance of shares in a registered direct offering,

net of discount and offering costs of $ 1,897

and value ascribed to associated warrants ( Note 12 )

Issuance of common stock in connection with the RIPA,

net of transaction costs of $ 473

2,432,894 — 11,581 — — 11,581 — 11,581

Gain on debt extinguishment with related-parties

under common control — — 36,110 — — 36,110 — 36,110

Increase in fair value of embedded conversion feature

from debt modification with entities under common

control — — 31,179 — — 31,179 — 31,179

Stock-based compensation expense — — 49,163 — — 49,163 — 49,163

2 unchanged sentences

Net share settlement for RSUs vesting ( 1,403,841 ) — ( 3,443 ) — — ( 3,443 ) — ( 3,443 )

Shares issued pursuant to litigation settlement 2,229,296 — 10,656 — — 10,656 — 10,656

Change in ownership interest in a joint venture due to

legal settlement — — ( 4,199 ) — — ( 4,199 ) 4,199 —

Other comprehensive income (loss), net of tax — — — — ( 173 ) ( 173 ) — ( 173 )

Net loss — — — ( 583,196 ) — ( 583,196 ) ( 656 ) ( 583,852 )

Balance as of December 31, 2023

670,867,344 67 2,374,620 ( 2,961,684 ) 10 ( 586,987 ) 1,050 ( 585,937 )

The accompanying notes are an integral part of these consolidated financial statements.

Table of Conten t s

ImmunityBio, Inc.

11 unchanged sentences

Shares Amount

Gain on extinguishment of debt with related parties

under common control — — 82,858 — — 82,858 — 82,858

Other comprehensive income (loss), net of tax — — — — 179 179 — 179

Net loss — — — ( 416,567 ) — ( 416,567 ) ( 753 ) ( 417,320 )

Balance as of December 31, 2022

421,569,115 42 1,930,936 ( 2,378,488 ) 183 ( 447,327 ) ( 2,493 ) ( 449,820 )

Issuance of common stock “at-the-market”

offering, net of commissions and

offering costs of $ 457 ( Note 13 )

5,605,323 1 16,105 — — 16,106 — 16,106

Issuance of common stock in exchange for notes

payable ( Note 10 )

209,291,936 21 269,966 — — 269,987 — 269,987

Issuance of shares in a registered direct offerings,

net of discounts and offering costs of $ 3,535

and value ascribed to associated warrants ( Note 12 )

28,641,911 3 36,928 — — 36,931 — 36,931

Issuance of common stock in connection with the RIPA,

net of transaction costs of $ 473 ( Note 13 )

2,432,894 — 11,581 — — 11,581 — 11,581

Gain on debt extinguishment with related-parties

under common control ( Note 10 )

offering costs of $ 660

427,368 — 3,625 — — 3,625 — 3,625

Increase in fair value of embedded conversion feature

from debt modification with entities under common

control ( Note 10 )

Conversion of related-party convertible notes and

accrued interest into equity 117,185,260 11 188,526 — — 188,537 — 188,537

Issuance of shares in an equity offering, net of

offering costs of $ 8,073

38,333,334 4 106,923 — — 106,927 — 106,927

Gain on debt extinguishment with related-parties under

common control — — 10,418 — — 10,418 — 10,418

Stock-based compensation expense — — 34,432 — — 34,432 — 34,432

2 unchanged sentences

Net share settlement for RSUs vesting ( 1,589,519 ) — ( 5,465 ) — — ( 5,465 ) — ( 5,465 )

Change in ownership interest in a joint venture due to

legal settlement ( Note 7 )

Exercise of warrants 22,242,740 3 163,519 — — 163,522 — 163,522

Exercise of Oberland stock option, net of commissions of $ 150

858,990 — 7,554 — — 7,554 — 7,554

4 unchanged sentences

The accompanying notes are an integral part of these consolidated financial statements.

Table of Conten t s

ImmunityBio, Inc.

7 unchanged sentences

Adjustments to reconcile net loss to net cash used in operating activities:

Change in fair value of convertible note ( 43,472 ) 36,203 —

Non-cash interest expense related to the revenue interest liability 38,004 264 —

Stock-based compensation expense 34,432 49,163 40,179

Change in fair value of warrant liabilities 47,600 ( 13,460 ) —

Amortization of related-party notes discounts 22,587 42,396 16,282

Change in fair value of convertible note 36,203 — —

Change in fair value of warrant liabilities ( 19,955 ) 47,600 ( 13,460 )

Depreciation and amortization 17,554 18,512 18,260

Non-cash interest items, net (including amounts with related parties) 9,189 11,746 12,417

Change in fair value of derivative liabilities ( 13,477 ) — —

Non-cash lease expense related to operating lease right-of-use assets 5,756 6,112 5,932

Transaction costs allocated to warrant liabilities 2,010 1,082 —

Accretion of discounts on marketable debt securities ( 1,489 ) ( 137 ) 1,318

Non-cash interest items, net (including amounts with related parties) 1,150 8,925 11,746

Unrealized losses on equity securities 632 1,591 4,190

Transaction costs allocated to warrant liabilities — 2,010 1,082

Impairment of intangible assets — 886 681

Amortization of premiums, net of discounts, on marketable

debt securities ( 137 ) 1,318 403

Impairment of fixed assets — — 1,333

1 unchanged sentence

Changes in operating assets and liabilities:

Accounts receivable ( 2,360 ) — —

Inventories ( 8,272 ) — —

Prepaid expenses and other current assets 1,703 5,958 ( 16,557 )

7 unchanged sentences

Investing activities:

Purchases of property, plant and equipment ( 30,584 ) ( 78,162 ) ( 33,563 )

Purchase of intangible assets — ( 21,229 ) —

Proceeds from sales of property, plant and equipment — — 20,498

Purchases of marketable debt securities, available-for-sale ( 140,218 ) ( 10,358 ) ( 34,312 )

Maturities of marketable debt securities, available for sale 10,100 128,188 56,166

Proceeds from maturities of marketable debt securities, available-for-sale 115,586 10,100 128,188

Proceeds from sales of marketable debt and equity securities 21,021 372 33,812

Purchases of property, plant and equipment ( 6,888 ) ( 30,584 ) ( 78,162 )

Acquisition of a business, net of transaction costs ( 1,000 ) — —

Cash paid for other investments ( 747 ) — —

Purchase of intangible assets — — ( 21,229 )

Investment in joint venture – an equity method investment — — ( 1,000 )

2 unchanged sentences

The accompanying notes are an integral part of these consolidated financial statements.

Table of Conten t s

ImmunityBio, Inc.

5 unchanged sentences

Financing activities:

Proceeds from issuance of related-party promissory notes

net of issuance costs paid $ 258,700 $ 174,125 $ 338,500

Proceeds from the RIPA, net of transaction costs 192,764 — —

Proceeds from equity offerings,

net of discounts and issuance costs $ 111,357 $ 100,561 $ 60,427

Proceeds from stock issuance in connection with the RIPA,

net of transaction costs 9,542 — —

Proceeds from exercises of stock options 294 74 5,461

Proceeds from the RIPA, net of issuance costs 96,956 192,764 —

Proceeds from exercises of warrants 73,281 — —

Net share settlement for RSUs vesting ( 5,465 ) ( 3,443 ) ( 616 )

Proceeds from exercise of Oberland stock option, net of commissions 4,850 — —

Proceeds from exercises of stock options 715 294 74

Principal payments of finance leases ( 64 ) ( 77 ) ( 58 )

Sale of assets to an entity under common control — — 1,435

Proceeds from issuance of related-party promissory notes

net of issuance costs paid

— 258,700 174,125

Proceeds from stock issuance in connection with the RIPA,

net of transaction costs — 9,542 —

Payment for contingent consideration — — ( 339 )

1 unchanged sentence

281,630 558,341 233,613

Effect of exchange rate changes on cash, cash equivalents, and

Effect of exchange rate changes on cash and cash equivalents, and

restricted cash ( 23 ) ( 292 ) 284

Net change in cash, cash equivalents, and restricted cash 160,822 ( 76,315 ) 146,186

Cash, cash equivalents, and restricted cash, beginning of year 104,965 181,280 35,094

Cash, cash equivalents, and restricted cash, end of year $ 265,787 $ 104,965 $ 181,280

Net change in cash and cash equivalents, and restricted cash ( 121,875 ) 160,822 ( 76,315 )

Cash and cash equivalents, and restricted cash, beginning of year 265,787 104,965 181,280

Cash and cash equivalents, and restricted cash, end of year $ 143,912 $ 265,787 $ 104,965

The accompanying notes are an integral part of these consolidated financial statements.

Table of Conten t s

ImmunityBio, Inc.

4 unchanged sentences

2024 2023 2022

Reconciliation of cash, cash equivalents, and restricted cash,

Reconciliation of cash and cash equivalents, and restricted cash,

Cash and cash equivalents $ 143,428 $ 265,453 $ 104,641

Restricted cash (Note 2 )

Cash, cash equivalents, and restricted cash, end of year $ 265,787 $ 104,965 $ 181,280

Cash and cash equivalents, and restricted cash, end of year $ 143,912 $ 265,787 $ 104,965

Supplemental disclosure of cash flow information:

5 unchanged sentences

net of unamortized discount, into equity $ 188,537 $ 269,987 $ 51,947

Gain on debt extinguishment with related-parties under common control $ 10,418 $ 36,110 $ 82,858

Right-of-use assets obtained in exchange for

operating lease liabilities $ 2,576 $ — $ 14,798

Unpaid offering and transaction costs included in accounts payable

and accrued expenses $ 805 $ 255 $ 277

Property and equipment purchases included in accounts payable,

accrued expenses and due to related parties $ 748 $ 1,156 $ 12,693

Initial measurement of warrants issued in connection with

registered direct offerings accounted for as liabilities $ 49,534 $ 35,096 $ —

Gain on extinguishment of debt with related parties under

common control $ 36,110 $ 82,858 $ —

RDOs accounted for as liabilities $ — $ 49,534 $ 35,096

Increase in fair value of embedded conversion feature from

debt modification $ — $ 31,179 $ —

Common stock issuance discount related to the revenue interest liability $ 2,039 $ — $ —

Property and equipment purchases included in accounts payable,

accrued expenses and due to related parties $ 1,156 $ 12,693 $ 11,654

Right-of-use assets obtained in exchange for

operating lease liabilities $ — $ 14,798 $ 23,069

Change in ownership interest in a joint venture due to legal settlement $ — $ 4,199 $ —

Right-of-use assets disposed in exchange for

operating lease liabilities $ — $ ( 3,777 ) $ —

Common stock issuance discount related to the revenue interest liability $ — $ 2,039 $ —

Common stock issued pursuant to litigation settlement $ — $ — $ 10,656

Unpaid offering and transaction costs included in accounts payable

and accrued expenses $ 255 $ 277 $ —

Cashless exercise of stock options $ — $ — $ 1,035

Accrued investment in joint venture $ — $ — $ 1,000

The accompanying notes are an integral part of these consolidated financial statements.

Table of Conten t s

ImmunityBio, Inc.

2 unchanged sentences

Description of Business

In these notes to the consolidated financial statements, the terms “ImmunityBio,” “the company,” “the combined company,” “we,” “us,” and “our” refer to ImmunityBio and subsidiaries.

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.

In these notes to the consolidated financial statements, the terms “ImmunityBio,” “the company,” “we,” “us,” and “our” refer to ImmunityBio and subsidiaries.

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 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.

On December 21, 2020 , NantKwest and NantCell, Inc.

(formerly known as ImmunityBio, Inc., a private company) ( NantCell) entered into an Agreement and Plan of Merger (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 (the Merger ), 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 auto matically 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 % o f 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, approxim ately 81.8 % of th e 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 in selling, general and administrative expense , on the consolidated statement of operations, consisting of financial advisory, legal and other professional fees.

Accounting Treatment of the Merger

The Merger represents a business combination pursuant to 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.

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

The following table provides the impact of the change in reporting entity on our unaudited condensed consolidated statement of operations for the three months ended March 31, 2021 (in thousands):

Three Months Ended

March 31, 2021

NantCell NantKwest Intercompany

Eliminations ImmunityBio,

Revenue $ 183 $ — $ ( 44 ) $ 139

Operating expenses:

Research and development (including amounts

with related parties) 21,509 19,725 ( 106 ) 41,128

Selling, general and administrative (including amounts

with related parties) 24,382 20,903 ( 10 ) 45,275

Loss from operations ( 45,708 ) ( 40,628 ) 72 ( 86,264 )

Other (expense) income, net (including amounts

with related parties) ( 848 ) 6,637 — 5,789

Income tax expense — ( 6 ) — ( 6 )

Net loss $ ( 46,556 ) $ ( 33,997 ) $ 72 $ ( 80,481 )

Our ultimate goal is to overcome the limitations of current treatments, such as CPIs, by turning immunologically cold, MHC-deficient tumors hot 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.

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

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

Specifically, our core clinical focus is on bladder and lung cancers with additional clinical efforts in prostate and colorectal cancers, hematologic malignancies 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 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.

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.

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

Summary of Significant Accounting Policies

2 unchanged sentences

GAAP and pursuant to the rules and regulations of the SEC.

Certain items in the prior years’ consolidated financial statements have been reclassified to conform to the current presentation.

Certain items in prior years consolidated financial statements have been reclassified to conform to the current presentation.

These reclassifications had no effect on the reported results of operations.

1 unchanged sentence

Principles of Consolidation

The consolidated financial statements include the accounts of the company, its wholly-owned subsidiaries, and a VIE for which the company is the primary beneficiary.

The accompanying consolidated financial statements include the accounts of the company, its wholly-owned subsidiaries, and a VIE for which the company is the primary beneficiary.

Any material intercompany transactions and balances have been eliminated upon consolidation.

For consolidated entities in which we have less than 100% ownership, we record net loss attributable to noncontrolling interests, net of tax, on the consolidated statement of operations equal to the percentage of the ownership interest retained in such entities by the respective noncontrolling parties.

Table of Conten t s

We assess whether we are the primary beneficiary of a VIE at the inception of the arrangement and at each reporting date.

This assessment is based on our power to direct the activities of the VIE that most significantly impacts the VIE’s economic performance and our obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

This assessment is based on our power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and our obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

If the entity is within the scope of the variable interest model and meets the definition of a VIE, we consider whether we must consolidate the VIE or provide additional disclosures regarding our involvement with the VIE.

4 unchanged sentences

We also had negative cash flows from operations of $ 391.2 million during the year ended December 31, 2024.

The company will likely need additional capital to further fund the development of, and to seek regulatory approvals for, our product candidates, and to begin to commercialize any approved products.

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

The consolidated financial statements have been prepared assuming the company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from the outcome of the uncertainty of our ability to continue as a going concern.

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 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), a potential $ 100.0 million Second Payment upon satisfaction of certain conditions specified in the RIPA, including upon approval of N-803 before June 30, 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 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 offerings, or in separate financings, or obtain incremental subordinated debt in compliance with our existing revenue interest liability.

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;

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 offerings, or in separate financings, or obtain incremental subordinated debt in compliance with our existing revenue interest liability.

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

Without additional funds, we may choose to delay or reduce our operating or investment expenditures.

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

Without significant sales of our approved product or additional funds, we may choose to delay or reduce our operating or investment expenditures.

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

Use of Estimates

1 unchanged sentence

GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and 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, 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, stock options, derivative liabilities, and convertible promissory notes, fair value measurements, revenue interest liability, 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.

On an ongoing basis, we evaluate our estimates 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.

Actual results could differ from those estimates.

We make certain judgments to determine whether transactions should be accounted for as acquisitions of assets or as business combinations.

If it is determined that substantially all of the fair value of gross assets acquired in a transaction is concentrated in a single asset (or a group of similar assets), the transaction is treated as an acquisition of assets.

We evaluate the inputs, processes, and outputs associated with the acquired set of activities and assets.

If the assets in a transaction include an input and a substantive process that together significantly contribute to the ability to create outputs, the transaction is treated as an acquisition of a business.

We account for business combinations using the acquisition method of accounting, which requires that assets acquired and liabilities assumed generally be recorded at their fair values as of the acquisition date.

Excess of consideration over the fair value of net assets acquired is recorded as goodwill.

Estimating fair value requires us to make significant judgments and assumptions.

We perform impairment testing of goodwill annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

In transactions accounted for as asset acquisitions, the cost of an asset acquisition, including transaction costs, are allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis.

Goodwill is not recognized in an asset acquisition.

Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values.

In an asset acquisition, upfront payments allocated to in-process research and development projects at the acquisition date are expensed unless there is an alternative future use.

In addition, product development milestones are expensed upon achievement.

Any contingent consideration, such as payments upon achievement of various developmental, regulatory, and commercial milestones, generally is not recognized at the acquisition date.

Estimates are assessed each period and updated to reflect current information and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates.

Table of Conten t s

Revenue Recognition

Product Revenue, Net

After FDA approval in April 2024, the company began recognizing revenue from the sale of ANKTIVA in accordance with 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 end user 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.

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

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.

Table of Conten t s

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.

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 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.

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.

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 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.

We recognize revenue from sales-based royalty payments when or as sales occur.

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.

Cost of Sales

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.

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.

Accounts Receivable, Net

Accounts receivable is recorded net of allowances for prompt payment discounts, product returns, chargebacks, and credit losses.

The company estimates an allowance for credit losses by considering factors such as credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay.

As of December 31, 2024, the credit profile for the company’s counterparty was deemed to be in good standing, and as such an allowance for credit losses was not recorded.

Table of Conten t s

Inventories are stated at the lower of cost or net realizable value.

Cost, which includes amounts related to materials, labor and overhead, is determined in a manner that approximates the first-in, first-out method.

Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation.

See Note 4 “ Inventories” for more information.

Contingencies

7 unchanged sentences

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.

Concentration of Major Customers

The company relies heavily on the limited number of customers to market and distribute ANKTIVA to various healthcare institutions or end users through the drop-ship arrangement.

For the year ended December 31, 2024, approximately 92 % of our total gross revenue was from our top three customers.

The largest customer accounted for 38 % of our total revenue, while the second and third largest accounted for 29 % and 25 %, respectively.

As of December 31, 2024, our accounts receivable, net are mainly from sales of ANKTIVA, and the majority are from specialty distributors.

Our dependency on a few key customers exposes us to several risks, including the potential for disruptions in our distribution network, changes in customers’ business strategies, or financial difficulties faced by these customers.

Any significant disruption or change in our relationship with these customers could materially and adversely affect our ability to effectively reach other potential end users and maintain our market position.

Additionally, we maintain regular communication and strong relationships with our existing customers to ensure alignment with our business objectives.

While we believe our relationships with these customers are strong and mutually beneficial, there can be no assurance that we will be able to maintain these relationships or that we will be able to replace them with new specialty distributors if necessary.

Concentration of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject us to concentrations of risk consist principally of cash and cash equivalents, marketable securities, and a convertible note receivable.

Financial instruments that potentially subject us to concentration of risk consist principally of cash and cash equivalents, marketable securities, accounts receivable and a convertible note receivable.

We attempt to minimize credit risk associated with our cash and cash equivalents by periodically evaluating the credit quality of our primary financial institutions.

2 unchanged sentences

We have not experienced any losses on such accounts.

We also monitor the creditworthiness of the borrower of the convertible promissory note.

We also monitor the creditworthiness of the borrower of the convertible note receivable.

We believe that any concentration of credit risk in its convertible note receivable was mitigated in part by our ability to convert, if necessary, at the qualifying financing event or upon a payment default into shares of the senior class of equity securities of the borrower.

2 unchanged sentences

If we were to be denied approval or clearance or any such approval or clearance was to be delayed, it would have a material adverse impact on us.

Table of Conten t s

Cash, Cash Equivalents, and Restricted Cash

13 unchanged sentences

Marketable Equity Securities

Investments in mutual funds and equity securities, other than equity method investments, are recorded at fair market value, if fair value is readily determinable and any unrealized gains and losses are included in other expense, net, on the consolidated statement of operations.

Realized gains and losses from the sale of the securities are determined on a specific identification basis and the amounts are included in other expense, net, on the consolidated statement of operations.

Investments in mutual funds and equity securities, other than equity method investments, are recorded at fair market value, if fair value is readily determinable and any unrealized gains and losses are included in other income (expense), net, on the consolidated statement of operations.

Realized gains and losses from the sale of the securities are determined on a specific identification basis and the amounts are included in other income (expense), net, on the consolidated statement of operations.

Evaluating Investments for Other-than-Temporary Impairments

7 unchanged sentences

In assessing whether we exercise significant influence, we consider the nature and magnitude of our investment, the voting and protective rights we hold, any participation in the governance of the other company and other relevant factors such as the presence of a collaborative or other business relationship.

Under the equity method of accounting, we record our share of the income or loss of the other company as loss on equity method investment , in our consolidated statement of operations.

Under the equity method of accounting, we record our share of the income or loss of the other company as loss on equity method investment , on the consolidated statement of operations.

Table of Conten t s

Property, Plant and Equipment, Net

9 unchanged sentences

Leasehold improvements The lesser of the lease term or life of the asset

Upon disposal of property, plant and equipment, the cost and related accumulated depreciation are removed from the consolidated financial statements and the net amount, less any proceeds, is included in other expense, net , on the consolidated statement of operations.

Upon disposal of property, plant and equipment, the cost and related accumulated depreciation are removed from the consolidated financial statements and the net amount, less any proceeds, is included in other income (expense), net , on the consolidated statement of operations.

We review impairment of property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

1 unchanged sentence

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected undiscounted future cash flows arising from the assets using a discount rate determined by management to be commensurate with the risk inherent to our current business model.

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.

Asset Acquisitions and Business Combinations

We make certain judgments to determine whether transactions should be accounted for as acquisitions of assets or as business combinations.

We evaluate the inputs, processes, and outputs associated with the acquired set of activities and assets.

Goodwill is not recognized in an asset acquisition.

Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values.

In an asset acquisition, upfront payments allocated to in-process research and development projects at the acquisition date are expensed unless there is an alternative future use.

In addition, product development milestones are expensed upon achievement.

Any contingent consideration, such as payments upon achievement of various developmental, regulatory, and commercial milestones, generally is not recognized at the acquisition date.

Business combinations are accounted for using the acquisition method of accounting, which requires that assets acquired and liabilities assumed generally be recorded at their fair values as of the acquisition date.

Excess of consideration over the fair value of net assets acquired is recorded as goodwill.

Estimating fair value requires us to make significant judgments and assumptions.

We perform impairment testing of goodwill annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

Acquisition costs related to a business combination are expensed as incurred.

Table of Conten t s

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.

9 unchanged sentences

Intangible assets acquired in a business combination or an asset acquisition are initially recognized at their fair value on the acquisition date.

Acquired indefinite-lived assets, such as IPR&D, are not amortized until they become definite-lived assets, upon the successful completion of the associated research and development effort.

At that time, we evaluate whether the recorded

amounts are impaired and make any necessary adjustments, and then determine the useful life of the asset and begin amortization.

Acquired indefinite-lived assets, such as IPR&D acquired in a business combination, are not amortized until they become definite-lived assets, upon the successful completion of the associated research and development effort.

At that time, we evaluate whether the recorded amounts are impaired and make any necessary adjustments and then determine the useful life of the asset and begin amortization.

If the associated research and development effort is abandoned, the related IPR&D assets is written-off and an impairment charge recorded.

IPR&D acquired in an asset acquisition is expensed immediately.

Acquired definite-lived intangible assets are amortized using the straight-line method over their respective estimated useful lives.

2 unchanged sentences

Patent costs, including related legal costs, are expensed as incurred and recorded in selling, general and administrative expense, on the consolidated statement of operations.

Cloud Computing Arrangement

The company capitalizes implementation costs under a cloud computing arrangement that is a service contract in line with its policy for internal-use software.

Costs incurred during the application development stage related to the implementation of the hosting arrangement are capitalized and included in prepaid expenses and other current assets and other assets, on the consolidated balance sheet.

Amortization of capitalized implementation costs is recognized on a straight-line basis over the shorter of the estimated useful life or the terms of the underlying hosting arrangement when it is ready for its intended use.

Costs related to preliminary project activities and post-implementation activities are expensed as incurred.

Fair Value Measurements

6 unchanged sentences

Our Level 1 assets consist of bank deposits, money market funds, and marketable equity securities.

Table of Conten t s

• Level 2—Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities.

8 unchanged sentences

We analyze our collaboration arrangements to assess whether they are within the scope of FASB ASC Topic 808, Collaborative Arrangements (ASC 808).

A collaborative arrangement is a contractual arrangement that involves a joint operating activity.

A collaborative arrangement is a contractual arrangement that involves joint operating activity.

These arrangements involve two or more parties who are active participants in the activity and are exposed to significant risks and rewards dependent on the commercial success of the activity.

1 unchanged sentence

To the extent the collaboration agreement is within the scope of ASC 808, we also assess whether the arrangement contains multiple elements that are within the scope of other accounting literature.

If we conclude that some or all aspects of the agreement are distinct and represent a transaction with a customer, we account for those aspects of the arrangement within the scope of FASB ASC Topic 606, Revenue from Contracts with Customers (ASC 606).

If we conclude that some or all aspects of the agreement are distinct and represent a transaction with a customer, we account for those aspects of the arrangement within the scope of ASC 606.

Amounts that are owed by collaboration partners within the scope of ASC 808 are recognized as an offset to research and development expense as such amounts are incurred by the collaboration partner.

14 unchanged sentences

Monthly accruals are made for all quarterly billing arrangements.

Table of Conten t s

Lease Obligations

9 unchanged sentences

The exercise of lease renewal options is at our sole discretion.

Several of our leases have renewal options, however, the exercise of renewal is only assured for five of our cGMP facilities where we have made significant improvements or extended the lease.

We combine our lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) with non-lease components (e.g., common-area maintenance costs and equipment maintenance costs) and as such, we account for lease and non-lease components as a single component.

10 unchanged sentences

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 recorded 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 accordance with ASC 825 and accounts 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.

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

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

6 unchanged sentences

Debt amendments that are considered debt modifications are accounted for prospectively through yield adjustments, based on the revised terms.

The increase in fair value of the embedded conversion feature from the debt modification was accounted for as an increase in debt discount with a corresponding increase in additional paid-in capital.

Legal fees and other costs incurred with third parties that are directly related to debt modifications are expensed as incurred.

12 unchanged sentences

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.

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.

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.

Pursuant to the RIPA, Oberland acquired certain Revenue Interests (as defined in the RIPA) from us for a gross purchase price of $ 200.0 million paid on closing and acquired additional Revenue Interests from us for a gross purchase price of $ 100.0 million paid on May 13, 2024.

Table of Conten t s

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.

The RIPA is considered a sale of future revenues and is accounted for as a liability net of a debt discount comprised of deferred issuance costs, the fair value of a freestanding option agreement related to the SPOA, and the fair value of embedded derivatives requiring bifurcation on the consolidated balance sheet.

8 unchanged sentences

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 within 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.

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.

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.

We have concluded that these promises represent one 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.

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.

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

We recognize revenue from sales-based royalty payments when or as sales occur.

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.

From inception through December 31, 2023, 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.

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.

Research and Development Costs

12 unchanged sentences

We adjust the accruals in the period when actual costs become known.

Table of Conten t s

Stock-Based Compensation

6 unchanged sentences

See Note 16 “Stock-Based Compensation” for more information.

Sale-Leaseback Transaction

A sale-leaseback transaction occurs when an entity sells an asset it owns and immediately leases the asset back from the buyer.

The seller then becomes the lessee and the buyer becomes the lessor.

When entering into a sale-leaseback transaction as a seller-lessee, the requirements in ASC 606, and all related ASUs to such Topic are applied in determining whether the transfer of an asset shall be accounted for as a sale of the asset by assessing whether it satisfies a performance obligation under the contract by transferring control of an asset.

If the company transfers control of an asset to the buyer-lessor, the transfer is accounted for as a sale and the company derecognizes the transferred asset.

The subsequent leaseback of the asset is accounted for in accordance with FASB ASC Topic 842, Leases , in the same manner as any third-party lease.

If the company does not transfer control of an asset to the buyer-lessor, the sale-leaseback transaction is accounted for as a financing arrangement.

Comprehensive Loss

1 unchanged sentence

Comprehensive income or loss is composed of net (loss) income and other comprehensive (loss) income.

Our other comprehensive income or loss consists of net unrealized gains (losses) on marketable debt securities classified as available-for-sale, net of income taxes and foreign currency translation adjustments.

Our other comprehensive income or loss consists of net unrealized gains (losses) on marketable debt securities classified as available-for-sale, the change in fair value of convertible note resulting from a change in the instrument-specific credit risk, net of income taxes and foreign currency translation adjustments.

Noncontrolling Interests

3 unchanged sentences

We record the noncontrolling interests’ share of loss based on the percentage of ownership interest retained by the respective noncontrolling interest holders.

Noncontrolling interests recorded on the consolidated financial statements result from the company’s share of GlobeImmune, of which we controlled 69.1 % as of December 31, 2023, 2022 and 2021, respectively, and NANTibody, of which we controlled 100.0 % as of December 31, 2023 and 60.0 % as of December 31, 2022 and 2021, respectively.

Noncontrolling interests recorded on the consolidated financial statements result from the company’s share of GlobeImmune, of which we controlled 69.1 % as of December 31, 2024, 2023 and 2022, respectively, and NANTibody, of which we controlled 100.0 % as of December 31, 2024 and 2023, and 60.0 % as of December 31, 2022, respectively.

Noncontrolling interest stockholders are common stockholders.

2 unchanged sentences

As of December 31, 2024 and 2023, there were no outstanding advances due from GlobeImmune under the promissory note agreement.

During the years ended December 31, 2023, 2022, and 2021, GlobeImmune recognized no revenue, respectively, and recognized $ 0.3 million, $ 0.5 million, and $ 0.7 million of operating expenses, respectively, during the years ended December 31, 2023, 2022 and 2021.

As of both December 31, 2023 and 2022, the consolidated balance sheets included approximately $ 1.4 million of total assets that can only be used to settle obligations of GlobeImmune, and no liabilities, respectively, related to GlobeImmune.

During the years ended December 31, 2024, 2023, and 2022, GlobeImmune recognized no revenue and recognized operating expenses of $ 0.3 million during the years ended December 31, 2024 and 2023, and $ 0.5 million during the year ended December 31, 2022.

As of both December 31, 2024 and 2023, the consolidated balance sheets included approximately $ 1.4 million of total assets that can only be used to settle obligations of GlobeImmune, and immaterial liabilities, respectively, related to GlobeImmune.

The creditors of GlobeImmune do not have recourse to the general credit of the primary beneficiary.

6 unchanged sentences

dollars are recorded as a component of other comprehensive (loss) income , on the consolidated statement of comprehensive loss.

Transaction gains and losses are recorded in other expense, net, on the consolidated statement of operations.

Transaction gains and losses are recorded in other income (expense), net, on the consolidated statement of operations.

Table of Conten t s

Basic and Diluted Net Loss per Share of Common Stock

1 unchanged sentence

Diluted loss per share is computed by dividing net loss attributable to ImmunityBio common stockholders by the weighted-average number of common shares, including the number of additional shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

For all periods presented, potentially dilutive securities are excluded from the computation of fully diluted loss per share as their effect is anti-dilutive.

The following table details those securities that have been excluded from the computation of potentially dilutive securities:

The following table reflects the calculation of basic and diluted loss per common share (in thousands, except per share data):

Year Ended December 31,

2024 2023 2022

Net loss per ImmunityBio common share – basic

Net loss attributable to ImmunityBio common stockholders $ ( 413,564 ) $ ( 583,196 ) $ ( 416,567 )

Weighted-average number of common shares outstanding – basic 697,312 508,636 399,900

Net loss per ImmunityBio common share – basic $ ( 0.59 ) $ ( 1.15 ) $ ( 1.04 )

Net loss per ImmunityBio common share – diluted

Net loss $ ( 413,645 ) $ ( 583,852 ) $ ( 417,320 )

Net loss attributable to noncontrolling interests, net of tax ( 81 ) ( 656 ) ( 753 )

Decrease in fair value of warrant liabilities ( 19,921 ) — —

Numerator for net loss per ImmunityBio common share – diluted $ ( 433,485 ) $ ( 583,196 ) $ ( 416,567 )

Weighted-average number of common shares outstanding – basic 697,312 508,636 399,900

Dilutive effect of assumed exercise of “in-the-money” third-party

warrants 3,131 — —

Denominator for net loss per ImmunityBio common share – diluted 700,443 508,636 399,900

Net loss per ImmunityBio common share – diluted $ ( 0.62 ) $ ( 1.15 ) $ ( 1.04 )

Potentially dilutive securities, whose effect would have been antidilutive, were excluded from the computation of diluted net loss per share.

The following table details the number of shares of common stock underlying those securities that were excluded from the computation of weighted-average number of common shares outstanding – diluted (shares in thousands):

As of December 31,

1 unchanged sentence

Related-party convertible notes 93,053 162,472 46,275

Outstanding third-party warrants 37,732,820 9,090,909 —

Outstanding stock options 15,408 9,820 9,263

1 unchanged sentence

Outstanding related-party warrants 1,638 1,638 1,638

Outstanding third-party warrants — 37,733 9,091

Total 116,044 219,167 72,818

The dilutive securities exclude the option to purchase up to $ 10.0 million of the company’s common stock pursuant to the SPOA entered in connection with the RIPA, as the exercise price is not yet determined.

The potentially dilutive securities shown in the table above exclude an option to purchase up to approximately $ 5.0 million of the company’s common stock pursuant to the SPOA entered in connection with the RIPA, as the exercise price cannot be determined until the date of exercise.

See Note 15 “Stockholders’ Deficit” for more information.

Segment and Geographic Information

We operate in one reporting segment focused on creating the next generation of immunotherapies to address serious unmet needs within oncology and infectious diseases.

Our CEO is the chief operating decision-maker of the company, and manages and allocates resources to our operations on a company-wide basis.

Consistent with this decision-making process, our CEO uses consolidated, single-segment financial information for purposes of evaluating performance, forecasting future-period financial results, allocating resources, and setting incentive targets.

We generate a portion of our revenues from outside of the U.S.

Information about our revenues by geographic region is as follows (in thousands):

Year Ended December 31,

2023 2022 2021

United States $ 31 $ 42 $ 373

Europe 591 198 561

Total segment revenue $ 622 $ 240 $ 934

Table of Conten t s

Recent Accounting Pronouncements

Application of New or Revised Accounting Standards – Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , to improve its income tax disclosure requirements.

Under the ASU, entities must annually (1) disclose specific categories in the rate reconciliation, (2) provide additional information for reconciling items that meet a quantitative threshold, and (3) disclose more detailed information about income taxes paid, including by jurisdiction;

pretax income (or loss) from continuing operations;

and income tax expense (or benefit).

The ASU is effective for fiscal years beginning after December 15, 2024, and interim periods beginning after December 15, 2025, with early adoption permitted.

We are currently evaluating the impact of this standard on our disclosures.

Application of New or Revised Accounting Standards – Adopted

In June 2022, the FASB issued ASU 2022-03 , Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions , which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

This ASU also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction and introduces certain disclosure requirements for equity securities subject to such restrictions.

We adopted this ASU on January 1, 2024 on a prospective basis with no impact on our consolidated financial statements.

In March 2023, the FASB issued ASU 2023-01, Leases – Common Control Arrangements (Topic 842).

This ASU provides updated guidance for accounting for leasehold improvements associated with common control leases.

We adopted this ASU on January 1, 2024 on a prospective basis with no impact on our consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

1 unchanged sentence

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis.

We are currently evaluating the impact of this standard on our disclosures.

We adopted this ASU on December 31, 2024 on a retrospective basis.

See Note 19 “Segment and Geographic Information” for more information.

Application of New or Revised Accounting Standards – Not Yet Adopted

In August 2023, the FASB issued ASU 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60):

2 unchanged sentences

We will apply this guidance prospectively in future reporting periods after the guidance is effective to any future arrangements meeting the definition of a joint venture.

In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842):

Common Control Arrangements , which requires that leasehold improvements associated with common control leases be amortized over the useful life of the leasehold improvements to the common control group, regardless of the lease term.

This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , to improve its income tax disclosure requirements.

Under this ASU, entities must annually (1) disclose specific categories in the rate reconciliation, (2) provide additional information for reconciling items that meet a quantitative threshold, and (3) disclose more detailed information about income taxes paid, including by jurisdiction;

pretax income (or loss) from continuing operations;

and income tax expense (or benefit).

This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of this standard on our disclosures.

In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , which requires that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.

This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

This ASU may be applied either on a prospective or retrospective basis.

We are currently evaluating the impact of this standard on our disclosures.

In November 2024, the FASB issued ASU 2024-04, Debt-Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments , which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

This ASU is effective for fiscal years beginning after December 15, 2025 and interim reporting periods within those annual reporting periods, with early adoption permitted.

We are currently evaluating the impact of this standard on our disclosures.

Other recent authoritative guidance issued by the FASB (including technical corrections to the ASC) and the SEC during the year ended December 31, 2024 did not, or are not expected to, have a material effect on our consolidated financial statements.

Table of Conten t s

As discussed in Note 2 “Summary of Significant Accounting Policies , ” revenues are recognized in accordance with ASC 606.

The following table presents our disaggregated revenue for the periods presented (in thousands):

Year Ended December 31,

2024 2023 2022

Product revenue, net $ 14,150 $ — $ —

Other revenues 595 622 240

Total revenue $ 14,745 $ 622 $ 240

Product Revenue, Net

During the year ended December 31, 2024, our only source of product revenue has been from U.S.

sales of ANKTIVA, which we began shipping to customers in May 2024.

During the year ended December 31, 2024, approximately $ 1.6 million of gross-to-net adjustments have been recorded as a reduction of revenue on the consolidated statement of operations .

As of December 31, 2024, approximately $ 0.2 million of allowances for prompt payment discounts, product returns and chargebacks were included in accounts receivable, net, and approximately $ 0.5 million related to accrued rebates, distributor fees and co-payment assistance were included in accrued expenses and other current liabilities, on the consolidated balance sheet.

Other Revenues

During the years ended December 31, 2024, 2023 and 2022, our primary sources of other revenues were bioreactors and related consumable product sales.

Inventories consist of the following (in thousands):

As of December 31,

Raw materials $ — $ —

Work-in-progress 7,505 —

Finished goods 767 —

Inventories $ 8,272 $ —

We began capitalizing inventory costs associated with ANKTIVA after receiving FDA approval in April 2024 when it was determined that the inventory had a probable future economic benefit.

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.

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.

Table of Conten t s

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.

Financial Statement Details

2 unchanged sentences

As of December 31,

Prepaid research and development costs $ 7,847 $ 11,704

Prepaid services $ 7,762 $ 5,869

Prepaid insurance 2,242 2,282

Prepaid research and development costs 5,815 7,847

Prepaid software license fees 2,687 2,100

Insurance premium financing asset 1,475 1,417

Insurance claims receivable 1,149 —

Prepaid insurance 2,057 2,242

Prepaid rent 1,532 1,113

Prepaid equipment maintenance 1,448 1,183

Insurance premium financing asset 1,248 1,475

ERP system implementation cost 187 1,087

Prepaid supplies — 2,160

Insurance claims receivable — 1,149

Other 1,116 1,538

11 unchanged sentences

Property, plant and equipment, net $ 137,094 $ 146,082

Table of Conten t s

During the years ended December 31, 2024, 2023 and 2022, depreciation expense related to property, plant and equipment totaled $ 15.5 million, $ 16.5 million and $ 16.3 million, respectively.

Intangible Assets, Net

The gross carrying amounts and accumulated amortization of intangible assets are as follows at the dates indicated (in thousands):

Goodwill and Intangible Assets, Net

The gross carrying amounts, accumulated amortization and impairment of goodwill and intangible assets, net are as follows at the dates indicated (in thousands):

December 31, 2024

1 unchanged sentence

Amount Accumulated

Amortization Impairment Net Carrying

Amortization Accumulated

Impairment Net Carrying

Definite-lived:

2 unchanged sentences

IPR&D 1,375 — ( 886 ) 489

Total intangible assets $ 21,804 $ ( 3,825 ) $ ( 886 ) $ 17,093

Total indefinite-lived assets 2,285 — ( 886 ) 1,399

Goodwill and intangible assets, net $ 22,683 $ ( 5,864 ) $ ( 886 ) $ 15,933

December 31, 2023

1 unchanged sentence

Amount Accumulated

Amortization Impairment Net Carrying

Amortization Accumulated

Impairment Net Carrying

Definite-lived:

Favorable leasehold rights 8.1 $ 20,398 $ ( 3,825 ) $ — $ 16,573

Organized workforce 831 ( 150 ) ( 681 ) —

Total definite-lived intangible assets 21,229 ( 1,935 ) ( 681 ) 18,613

Indefinite-lived:

IPR&D 1,406 — ( 886 ) 520

Total intangible assets $ 22,619 $ ( 1,935 ) $ ( 681 ) $ 20,003

Goodwill and intangible assets, net $ 21,804 $ ( 3,825 ) $ ( 886 ) $ 17,093

Definite-Lived Intangible Assets

2 unchanged sentences

See Note 8 “Collaboration and License Agreements and Acquisition” for more information.

During the years ended December 31, 2023 and 2022, we recorded amortization expense of definite-lived intangible assets totaling $ 2.0 million and $ 1.9 million, respectively, in research and development expense , on the consolidated statements of operations.

We recorded amortization expense of our definite-lived intangible assets of $ 2.0 million during the years ended December 31, 2024 and 2023, respectively, and $ 1.9 million, during the year ended December 31, 2022 in research and development expense , on the consolidated statements of operations.

Indefinite-Lived Intangible Assets

In September 2024, we entered into an asset purchase agreement with an unrelated party pursuant to which the company acquired the rights to hire its workforce and purchase certain office equipment in exchange for consideration of $ 1.0 million, net of transaction costs.

The transaction was accounted for as a business combination.

The fair value of the acquired identifiable net assets was $ 0.1 million.

We recognized the remaining $ 0.9 million as goodwill.

No goodwill impairment was recognized for the year ended December 31, 2024.

During the year ended December 31, 2023, we discontinued the research and development program associated with the Tarmogen platform based on results gathered from clinical data.

We recorded a charge totaling $ 0.9 million in impairment of intangible assets , on the consolidated statement of operations in connection with the writedown of the carrying value of Tarmogen to zero.

We recorded a charge totaling $ 0.9 million in impairment of intangible assets , on the consolidated statement of operations in connection with the write down of the carrying value of

Table of Conten t s

Tarmogen to zero .

No such impairments were recorded during the years ended December 31, 2024 and 2022.

As of December 31, 2023 and 2022, the company had indefinite-lived IPR&D intangible assets of $ 0.5 million and $ 1.4 million, respectively, which were obtained from business acquisitions.

Future amortization expense associated with our definite-lived intangible assets is as follows (in thousands):

As of December 31, 2024 and 2023, the company had indefinite-lived IPR&D intangible assets of $ 0.5 million, which were obtained from business acquisitions.

Future amortization expense associated with our definite-lived intangible assets, net is as follows (in thousands):

Years ending December 31:

18 unchanged sentences

As of December 31,

Accrued bonus $ 11,350 $ 12,068

Accrued professional and service fees $ 16,849 $ 9,829

Accrued research and development costs 7,700 1,930

Accrued bonus 10,346 11,350

Accrued compensation 4,679 6,241

Accrued research and development costs 3,002 7,700

Accrued preclinical and clinical trial costs 2,876 4,218

3 unchanged sentences

Accrued expenses and other liabilities $ 40,580 $ 42,708

Table of Conten t s

Interest and Investment Income (Loss), Net

2 unchanged sentences

2024 2023 2022

Unrealized losses from equity securities $ ( 1,591 ) $ ( 4,190 ) $ ( 4,615 )

Interest income 863 2,708 836

Investment accretion income (amortization expense), net $ 6,249 $ 1,844 $ ( 1,486 )

Net realized gains (losses) on investments 15 ( 122 ) 167

Interest income 2,400 863 2,708

Unrealized losses from equity securities ( 632 ) ( 1,591 ) ( 4,190 )

Net realized (losses) gains on investments ( 42 ) 15 ( 122 )

Interest and investment income (loss), net $ 7,975 $ 1,131 $ ( 3,090 )

Interest income includes interest from marketable securities, convertible notes receivable, other assets, and on bank deposits.

Interest income includes interest from marketable securities, convertible note receivable, other assets, and on bank deposits.

Investment accretion income (amortization expense), net includes accretion of discounts (amortization of premiums) from securities classified as cash equivalents and marketable debt securities.

Interest expense

5 unchanged sentences

Other interest expense 82 85 88

Interest expense $ 129,198 $ 63,515 $ 14,849

Interest expense (including amounts with related parties) $ 114,670 $ 128,934 $ 63,515

Financial Instruments

4 unchanged sentences

(in years) Amortized

Foreign bonds 0.8 $ 54 $ — $ — $ 54

Mutual funds 40 — ( 1 ) 39

Current portion 94 — ( 1 ) 93

Foreign bonds 3.3 939 — ( 48 ) 891

Total $ 1,033 $ — $ ( 49 ) $ 984

Treasury securities 0.3 $ 6,094 $ 2 $ — $ 6,096

As of December 31, 2024, no marketable debt securities were in an unrealized loss position.

Table of Conten t s

As of December 31, 2023, the weighted-average remaining contractual life, amortized cost, gross unrealized gains, gross unrealized losses, and fair value of marketable debt securities, which were considered as available-for-sale, by type of security were as follows (in thousands):

2 unchanged sentences

(in years) Amortized

Mutual funds $ 38 $ — $ ( 2 ) $ 36

Foreign bonds 0.8 $ 54 $ — $ — $ 54

Total $ 970 $ — $ ( 94 ) $ 876

As of December 31, 2023, 12 of the securities were in an unrealized loss position.

Accumulated unrealized losses on marketable debt securities that have been in a continuous loss position for less than 12 months and more than 12 months were as follows (in thousands):

December 31, 2023

Less than 12 months More than 12 months

Losses Estimated

Mutual funds 40 — ( 1 ) 39

Current portion 94 — ( 1 ) 93

Foreign bonds 3.3 939 — ( 48 ) 891

Total $ 1,033 $ — $ ( 49 ) $ 984

Accumulated unrealized losses on marketable debt securities that have been in a continuous loss position for less than 12 months and more than 12 months as of December 31, 2023 were as follows (in thousands):

December 31, 2023

5 unchanged sentences

During the years ended December 31, 2024, 2023 and 2022, we evaluated our securities for other-than-temporary impairment and did not recognize any other-than-temporary impairment losses.

Marketable Equity Securities

Investments in Marketable Equity Securities

As of December 31, 2024 and 2023, we held investments in marketable equity securities with readily determinable fair values of $ 0.3 million and $ 0.9 million, respectively.

During the years ended December 31, 2024, 2023 and 2022, unrealized losses recorded on these securities totaled $ 0.6 million, $ 1.6 million, and $ 4.2 million, respectively, in interest and investment income (loss), net , on the consolidated statements of operations.

Investment in Other Equity Security

In August 2024, the company entered into a SAFE with an unrelated party in exchange for the right to acquire certain shares of the investee.

Upon the closing of equity financing by the investee prior to the termination of the SAFE, the SAFE will convert into preferred shares.

We elected to apply the measurement alternative under FASB ASC Topic 321, Investments—Equity Securities (ASC 321), pursuant to which we measure our investment in the SAFE at cost, less impairment.

As of December 31, 2024, we recorded an investment in the SAFE of $ 0.7 million in other assets , on the consolidated balance sheet.

We evaluate this investment for any indications of impairment in value on a quarterly basis.

No factors indicative of impairment were identified during the year ended December 31, 2024.

Table of Conten t s

Fair Value Measurements

5 unchanged sentences

Cash and cash equivalents $ 143,428 $ 143,428 $ — $ —

Treasury securities 6,096 6,096 — —

Equity securities 285 285 — —

Foreign bonds 54 — 54 —

Mutual funds 39 39 — —

Foreign bonds 891 — 891 —

Total assets measured at fair value $ 149,809 $ 149,809 $ — $ —

1 unchanged sentence

Contingent consideration $ ( 19 ) (1) $ — $ — $ ( 19 )

Stock option purchase liability ( 819 ) (2) — — ( 819 )

Derivative liabilities ( 35,333 ) (3) — — ( 35,333 )

Warrant liabilities ( 118,770 ) (4) — — ( 118,770 )

Related-party convertible note payable at

fair value ( Note 12 )

( 461,877 ) — — ( 461,877 )

Derivative liabilities ( Note 11 )

( 25,800 ) — — ( 25,800 )

Warrant liabilities ( Note 14 )

( 8,575 ) — — ( 8,575 )

Stock option purchase liability ( Note 11 )

( 320 ) — — ( 320 )

Total liabilities measured at fair value $ ( 496,591 ) $ — $ — $ ( 496,591 )

4 unchanged sentences

Equity securities 916 916 — —

Foreign bonds 54 — 54 —

Mutual funds 39 39 — —

3 unchanged sentences

Contingent consideration $ ( 20 ) (1) $ — $ — $ ( 20 )

Warrant liability ( 21,636 ) (4) — — ( 21,636 )

Warrant liabilities ( Note 14 )

( 118,770 ) — — ( 118,770 )

Derivative liabilities ( Note 11 and Note 12 )

( 35,333 ) — — ( 35,333 )

Stock option purchase liability ( Note 11 )

( 819 ) — — ( 819 )

Total liabilities measured at fair value $ ( 154,942 ) $ — $ — $ ( 154,942 )

Table of Conten t s

_______________

(1) Contingent Consideration

(1) Contingent consideration is recorded at estimated fair value and revalued each reporting period until the related contingency is resolved.

6 unchanged sentences

Consideration paid — — 339

Net (increase) decrease in fair value ( 1 ) 51 144

Net decrease (increase) in fair value 1 ( 1 ) 51

Fair value, end of year $ ( 19 ) $ ( 20 ) $ ( 19 )

(2) Stock Option Purchase Liability

In connection with the RIPA, we entered into an SPOA pursuant to which Oberland has an option to purchase up to an additional $ 10.0 million of our common stock, at a price to be determined by reference to the 30-day trailing volume weighted-average price of our common stock calculated from the date of exercise.

This stock purchase option was classified as a liability at its fair value upon issuance.

The fair value was estimated using probability-weighted scenarios over the likelihood of this option being exercised.

As of December 31, 2023, the stock purchase option was outstanding.

The fair value of the stock purchase option was estimated at $ 0.8 million at issuance.

Due to the proximity of the inception date of the SPOA to December 31, 2023, the change in fair value was immaterial.

See Note 9 , Revenue Interest Purchase Agreement , for more information.

(3) Derivative Liabilities

The debt incurred pursuant to the RIPA entered on December 29, 2023 contains embedded derivatives requiring bifurcation as a single compound derivative instrument.

The company estimated the fair value of the derivative liability using a “with-and-without” method.

The with-and-without methodology involves valuing the whole instrument on an as-is basis and then valuing the instrument without the individual embedded derivative.

The difference between the entire instrument with the embedded derivative compared to the instrument without the embedded derivative is the fair value of the derivative liability, which is estimated at $ 34.5 million as of December 31, 2023.

The estimated probability and timing of underlying events triggering the exercisability of the Put Option contained in the RIPA, forecasted cash flows and the discount rate are significant unobservable inputs used to determine the estimated fair value of the entire instrument with the embedded derivative.

As of December 31, 2023, the discount rate used for valuation of the derivative liability was 12.1 %.

See N ote 9 , Revenue Interest Purchase Agreement, for more information.

In connection with the December 2023 debt extinguishment, the company identified an embedded derivative related to a contingently exercisable prepayment feature of the amended $ 505.0 million December 2023 promissory note, which allows the noteholder to request up to a $ 50.0 million prepayment and accrued interest upon occurrence of a specified transaction (defined in the promissory note).

This embedded derivative is recorded as a derivative liability on the consolidated balance sheet and is measured at fair value.

Changes in the fair value of the derivative liability are reported as change in fair value of derivative, on the consolidated statement of operations.

The fair value of the derivative liability is determined at each period end using a with and without method, which assesses the likelihood and timing of a specified transaction that if triggered could result in a repayment.

The fair value of the embedded derivative is estimated at $ 0.8 million as of December 31, 2023, and will be remeasured to fair value at each reporting date until the derivative is settled.

(4) Third-Party Warrant Liabilities

December 2022 Warrants

In connection with the December 12, 2022 registered direct offering of common stock, the company issued 9,090,909 warrants (December 2022 Warrants).

The warrants were classified as a liability at their fair value upon issuance.

As of December 31, 2023 and 2022, all warrants were outstanding.

The estimated fair value of the warrants was computed using the Black-Scholes option pricing model with the following unobservable assumptions at the following dates:

Year Ended December 31,

Exercise price per share $ 6.60 $ 6.60

Expected term 1.0 years 2.0 years

Expected average volatility 119.0 % 99.4 %

Expected dividend yield — % — %

Risk-free interest rate 4.7 % 4.4 %

February 2023 Warrants

In connection with the February 15, 2023 registered direct offering of common stock, the company issued 14,072,615 warrants.

The warrants were classified as a liability at their fair value upon issuance.

As of December 31, 2023, all warrants were outstanding.

The estimated fair value of the warrants was computed using the Black-Scholes option pricing model with the following unobservable assumptions at the following dates:

2023 Issuance Date

Exercise price per share $ 3.2946 $ 4.2636

Expected term 2.6 years 2.0 years

Expected average volatility 107.3 % 97.0 %

Expected dividend yield — % — %

Risk-free interest rate 4.1 % 4.6 %

On July 25, 2023, the company reduced the exercise price of the outstanding February 2023 Warrants from $ 4.2636 per share to $ 3.2946 per share and extended the expiration date of the warrants until July 24, 2026.

The effect of amending the terms of the warrants is reflected in a change in the fair value of warrant liability of $ 7.3 million.

July 2023 Warrants

In connection with the July 20, 2023 registered direct offering of common stock, the company issued 14,569,296 warrants (July 2023 Warrants).

The warrants were classified as a liability at their fair value upon issuance.

As of December 31, 2023, all warrants were outstanding.

The estimated fair value of the warrants was computed using the Black-Scholes option pricing model with the following unobservable assumptions at the following dates:

2023 Issuance Date

Exercise price per share $ 3.2946 $ 3.2946

Expected term 2.6 years 3.0 years

Expected average volatility 107.3 % 121.0 %

Expected dividend yield — % — %

Risk-free interest rate 4.1 % 4.5 %

The change in the carrying amount of the warrant liabilities was as follows (in thousands):

Total December 2022

Warrants February 2023

Warrants July 2023

Fair value, December 31, 2022 $ 21,636 $ 21,636 $ — $ —

Fair value at issuance 49,534 — 23,698 25,836

Change in fair value 47,600 ( 4,545 ) 26,260 25,885

Fair value, December 31, 2023 $ 118,770 $ 17,091 $ 49,958 $ 51,721

December 2022

Fair value at issuance, December 12, 2022 $ 35,096

Change in fair value ( 13,460 )

Fair value, December 31, 2022 $ 21,636

(5) As of December 31, 2022, the Level 2 measurements include $ 32.0 million in U.S.

government agency securities and $ 8.8 million in corporate debt securities with original maturities of less than 90 days.

Non-Recurring Valuations

Non-financial assets and liabilities are recognized at fair value subsequent to initial recognition when they are deemed to be other-than-temporarily impaired.

Except for the impairments discussed in Note 3 , Financial Statement Details—Intangible Assets, Net , there were no other material non-financial assets or liabilities deemed to be other-than-temporarily impaired and measured at fair value on a non-recurring basis during the years ended December 31, 2023, 2022 and 2021.

We measured the fair value of the promissory notes before and after amendments that were entered on December 29, 2023 and August 31, 2022, as they were accounted for under the debt extinguishment accounting model.

We used discounted cash flow analyses for promissory notes without a holder conversion option and used binomial lattice models for promissory notes with a holder conversion option.

Since certain of the factors analyzed are considered to be unobservable inputs, both the discounted cash flow model and the lattice model are considered to be a Level 3 valuation.

Except for the impairments discussed in Note 5 “Financial Statement Details—Goodwill and Intangible Assets, Net” there were no other material non-financial assets or liabilities deemed to be other-than-temporarily impaired and measured at fair value on a non-recurring basis during the years ended December 31, 2024, 2023 and 2022.

We measured the fair value of the promissory notes and the embedded conversion features as of December 10, 2024, December 29, 2023 and September 11, 2023, respectively, upon debt amendments to determine the accounting treatment, using a “with and without” method.

We used binomial lattice models for the “with” scenario and discounted cash flow analyses for the “without” scenario.

Since certain of the factors analyzed are considered to be unobservable inputs, both the lattice model and the discounted cash flow model are considered to be a Level 3 valuation.

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

2 unchanged sentences

National Cancer Institute

2015 NCI CRADA

In May 2015, Etubics entered into a CRADA with the HHS as represented by the NCI of the NIH to collaborate on the preclinical and clinical development of an adenovirus technology expressing TAAs for cancer immunotherapy.

In January 2016, we acquired all of the outstanding equity interests in Etubics and Etubics became a wholly-owned subsidiary.

Effective January 2018, our subsidiary NantCell assumed the CRADA and it was amended to cover a collaboration for the preclinical and clinical development of our proprietary yeast-based Tarmogens expressing TAAs and proprietary adenovirus technology expressing TAAs for cancer immunotherapy.

Pursuant to the CRADA, the NCI provides scientific staff and other support necessary to conduct research and related activities as described in the CRADA.

During the term of the CRADA, we were required to make annual payments of $ 0.6 million to the NCI for support of research activities.

In November 2021, NantCell entered into a third amendment to the CRADA, which was effective as of March 16, 2021.

The principal changes effected by the third amendment are the following:

(i) assignment of the CRADA from NantCell to ImmunityBio;

(ii) modification of the research plan;

(iii) extension of the CRADA term through May 2026;

and (iv) an increase in funding for a total of $ 1.3 million per year, payable in semi-annual installments from 2022 through 2025.

During the years ended December 31, 2023, 2022 and 2021, we recorded R&D expense of $ 1.3 million, $ 1.2 million, and $ 1.1 million, respectively, in research and development expense on the consolidated statements of operations.

Pursuant to the updated CRADA research plan, NCI and ImmunityBio will collaborate on the preclinical and clinical development of ImmunityBio’s proprietary adenovirus platform expressing TAAs;

proprietary yeast platform expressing TAAs;

proprietary agent N-803 and derivatives, agent N-809 and derivatives, and/or TxM product candidates;

proprietary recombinant NK cells and mAbs;

proprietary RNA vaccines and adjuvants;

and other proprietary agents owned or controlled by ImmunityBio as contemplated in the research plan, for cancer immunotherapy.

Under any of the CRADAs, any party may unilaterally terminate the agreement by providing timely advance written notice to the other party before the desired termination date.

Pursuant to the terms of the CRADAs, we have an option to elect to negotiate an exclusive or non-exclusive commercialization license to any inventions discovered in the performance of any of the CRADAs.

The parties jointly own any inventions and materials that are jointly produced by employees of both parties in the course of performing activities under the CRADAs.

The company and its subsidiaries began their relationship with HHS, as represented by the NCI of the NIH in 2015.

Pursuant to the CRADAs, the NCI provides scientific staff and other support necessary to conduct research and related activities as described in the CRADAs.

During the term of the initial and amended CRADAs, we collaborated with the NCI on the preclinical and clinical development of our proprietary adenovirus technology expressing TAAs for cancer immunotherapy.

In 2021, the CRADA was amended and the research plan was modified to include the preclinical and clinical development of ImmunityBio’s proprietary adenovirus platform expressing TAAs, proprietary agent ANKTIVA and derivatives, an antibody-based cytokine fusion protein and derivatives and/or TxM product candidates, proprietary recombinant NK cells and mAbs, proprietary adjuvants, and other proprietary agents owned or controlled by ImmunityBio for cancer immunotherapy.

The term of the CRADA was extended through May 2026.

Under this agreement, we agreed to pay NCI funding totaling $ 1.3 million per year, payable in semi-annual installments each year through 2025.

During the years ended December 31, 2024 and 2023 we recorded $ 1.3 million, and $ 1.2 million during the year ended December 31, 2022 in research and development expense, on the consolidated statements of operations.

Table of Conten t s

Pursuant to the updated CRADA research plan, NCI and ImmunityBio will collaborate on the preclinical and clinical development of ImmunityBio’s proprietary adenovirus platform expressing TAAs, ANKTIVA and derivatives, an antibody-based cytokine fusion protein and derivatives and/or TxM product candidates, proprietary recombinant NK cells and mAbs, and other proprietary agents owned or controlled by ImmunityBio as contemplated in the research plan for cancer immunotherapy.

Under the CRADA, any party may unilaterally terminate the agreement by providing timely advance written notice to the other party before the desired termination date.

Pursuant to the terms of the CRADA, we have an option to elect to negotiate an exclusive or non-exclusive commercialization license to any inventions discovered in the performance of the CRADA.

The parties jointly own any inventions and materials that are jointly produced by employees of both parties in the course of performing activities under the CRADA.

Amyris Joint Venture

In December 2021, ImmunityBio and Amyris entered into a 50:50 joint venture arrangement and formed a new limited liability company to conduct the business of the joint venture.

In 2021, ImmunityBio and Amyris entered into a 50:50 joint venture arrangement and formed a new limited liability company to conduct the business of the joint venture.

The purpose of the joint venture is to accelerate commercialization of a next-generation COVID-19 vaccine utilizing an RNA vaccine-platform.

8 unchanged sentences

We account for our investment in the joint venture using the equity method of accounting.

During the years ended December 31, 2023, 2022 and 2021, we recorded our 50 % share of net losses from the joint venture totaling $ 7.5 million, $ 12.1 million, and $ 0.8 million, respectively, in other expense, net , on the consolidated statements of operations.

During the years ended December 31, 2023 and 2022, we recorded our 50 % share of net losses from the joint venture totaling $ 7.5 million and $ 12.1 million, respectively, in other income (expense), net , on the consolidated statements of operations.

During the years ended December 31, 2023 and 2022, such losses incurred included $ 7.5 million and $ 11.9 million, respectively, attributable to expenses incurred by us on behalf of the joint venture.

6 unchanged sentences

We have licensed rights to 3M-052, a synthetic TLR7/8 agonist, 3M-052 formulations and related technology from 3M IPC and its affiliates and AAHI.

In November 2021 we obtained nonexclusive rights in the field of SARS-CoV-2 and in June 2022 we modified those rights and expanded the scope of the license to include (1) SARS-CoV-2 and other infectious diseases including malaria, HIV, tuberculosis, hookworm and varicella zoster on an exclusive basis in countries other than LMIC, and (2) oncology applications, when used in combination with our proprietary technology and/or IL-15 agonists.

In 2021 we obtained nonexclusive rights in the field of SARS-CoV-2 and in June 2022 we modified those rights and expanded the scope of the license to include (1) SARS-CoV-2 and other infectious diseases including malaria, HIV, tuberculosis, hookworm and varicella zoster on an exclusive basis in countries other than LMIC, and (2) oncology applications, when used in combination with our proprietary technology and/or IL-15 receptor superagonist.

In consideration for the license, we agreed to make certain periodic license payments, including $ 2.25 million each year through June 2025.

1 unchanged sentence

Beginning in April 2026, the annual minimum licensing payment is $ 1.0 million, which can be credited against any royalty payments due under this agreement.

In June 2023 and 2022, we made annual license maintenance fee payments of $ 2.25 million and $ 1.75 million, respectively.

During the years ended December 31, 2023, 2022 and 2021, we expensed $ 2.0 million, $ 1.0 million, and $ 0.5 million, respectively, in research and development expense , on the consolidated statements of operations.

AAHI License Agreements

In May 2021, we entered into two license agreements with AAHI pursuant to which we received a license to certain patents and know-how relating to AAHI’s (i) adjuvant formulations for the treatment, prevention and/or diagnosis of SARS-CoV-2 (the AAHI Adjuvant Formulation License Agreement) and (ii) RNA vaccine platform as further described below (the AAHI RNA License Agreement).

Under both agreements, we were obligated to pay one-time, non-creditable, non-refundable upfront cash payments totaling $ 2.0 million.

In addition, under the AAHI Adjuvant Formulation License Agreement we owe milestone payments to a total of up to $ 2.5 million based on the achievement of certain development and regulatory milestones for the first licensed product and royalties on annual net sales of licensed products on a country-by-country and product-by-product basis of a low-single digit percentage, subject to certain royalty-reduction provisions.

During the years ended December 31, 2023 and 2022, no milestone fees were incurred.

In September 2021, we amended and restated the AAHI RNA License Agreement, pursuant to which AAHI granted us an exclusive, worldwide, sublicensable license to AAHI’s rights to an RNA vaccine platform for the development and commercialization of certain therapeutic, diagnostic, or prophylactic products for the prevention, treatment or diagnosis of any indication, other than those subject to pre-existing third-party license grants, including, without limitation, SARS-CoV-2.

Pursuant to the terms of the amended and restated AAHI RNA License Agreement, we made a one-time, non-creditable, non-refundable, upfront payment to AAHI of $ 1.5 million and a license maintenance fee of $ 3.0 million in June 2022.

The company is required to pay license maintenance fees to AAHI of $ 5.5 million annually from 2023 through 2030.

The company may terminate the restated agreement without cause by paying AAHI a $ 10.0 million one-time early termination fee.

In addition, the milestone payments to AAHI based on the achievement of certain development and regulatory milestones for the first licensed product were amended to a total of up to $ 4.0 million.

We are required to pay royalties on annual net sales of licensed products on a country-by-country and product-by-product basis of a low to mid-single digit percentage.

We made annual license maintenance fee payments of $ 2.25 million in 2024 and 2023, and $ 1.75 million in 2022.

During the years ended December 31, 2024, 2023 and 2022, we recorded $ 2.3 million, $ 2.0 million, and $ 1.0 million, respectively, in research and development expense , on the consolidated statements of operations.

In connection with the license agreements, in May 2021 we also entered into a sponsored research agreement with AAHI pursuant to which we will fund continued research of at least $ 2.0 million per year, payable in four equal quarterly installments each year until May 2024, or such year of earlier termination.

As of December 31, 2023, $ 0.5 million payable to AAHI in connection with the sponsored research agreement was recorded in accrued expenses and other liabilities , on the consolidated balance sheet.

During the year ended December 31, 2023, we recorded $ 1.2 million in research and development expense , and $ 3.7 million in loss on equity method investment, during the year ended December 31, 2022, respectively, on the consolidated statements of operations related to the sponsored research agreement.

Viracta License Agreement

In 2017, we entered into an agreement with Viracta under which we were granted exclusive worldwide rights to Viracta’s Phase II drug candidate, VRx-3996 (nanatinostat), for use in combination with our platform of NK cell therapies.

In consideration for the license, we are obligated to pay Viracta mid-single digit percentage royalties on net sales of licensed products for therapeutic use and milestone payments ranging from $ 10.0 million to $ 25.0 million up to an aggregate maximum of $ 100.0 million for various regulatory approvals and cumulative net sales levels.

We may terminate the agreement, at our sole discretion, in whole or on a product by product and/or country by country basis, at any time upon 90 days’ prior written notice.

In addition, either party may terminate the agreement in the event of a material breach or for bankruptcy of the other party.

To date, we have not had incurred any royalty or milestone payment obligations under this agreement, including during the years ended December 31, 2023, 2022 and 2021.

Table of Conten t s

AAHI Agreements

In 2021, ImmunityBio and AAHI entered into several agreements, including an RNA vaccine platform license agreement, an adjuvant formulation license agreement, and a sponsored research agreement (collectively, the “AAHI Agreements”).

ImmunityBio is no longer pursuing development of the AAHI RNA platform and related technology it had licensed from AAHI in 2021.

During the second half of 2024, the parties reached an agreement whereby ImmunityBio would owe no future payments to AAHI under the AAHI Agreements, ImmunityBio would return the licenses to AAHI, the AAHI Agreements were terminated, and each party mutually released and had no continuing obligations to the other.

With respect to the license agreements, we recorded $ 2.3 million, $ 4.5 million, and $ 1.8 million, respectively, in research and development expense , on the consolidated statements of operations during the years ended December 31, 2024, 2023 and 2022.

With respect to the sponsored research agreement, we recorded no expense and $ 1.2 million, respectively, in research and development expense , and $ 3.7 million in loss on equity method investment , on the consolidated statements of operations related to the sponsored research agreement during the years ended December 31, 2024, 2023 and 2022.

Dunkirk Facility Leasehold Interest

On February 14, 2022, we completed the acquisition of the Dunkirk Facility (approximately 409,000 rentable square feet) from Athenex, which we believe will provide us with a state-of-the-art biotech production center that will substantially expand and diversify our existing manufacturing capacity in the U.S.

On February 14, 2022, we completed the acquisition of the Dunkirk Facility (approximately 409,000 rentable square feet) from Athenex, which we believe has the potential to provide us with a state-of-the-art biotech production center that will substantially expand and diversify our existing manufacturing capacity in the U.S.

and the ability to scale production associated with certain of our product candidates.

15 unchanged sentences

We are eligible for certain sales-tax exemption savings during the development of the Dunkirk Facility, and certain property tax savings over the next 20 years, subject to certain terms and conditions, including performance of certain of the obligations described above.

Failure to satisfy the obligations over the lease term may give rise to certain rights and remedies of governmental authorities including, for example, termination of the Dunkirk Lease and other Facility Agreements and potential recoupment of a percentage of the grant funding received by Athenex for construction of the facility and other benefits received, subject to the terms and conditions of the applicable agreements.

Although we believe that governmental funding will assist in funding a portion of the further build-out of the Dunkirk Facility, which we estimate to be approximately $ 8.0 million to $ 10.0 million of governmental funding remaining available as of December 31, 2023, there can be no assurance as to the final acceptance and timing of the requests for governmental funding that we submit, and we will need to plan and fund most of the additional build-out of, and purchase additional equipment for, the Dunkirk Facility in connection with our planned full operations.

Failure to satisfy the obligations over the lease term may give rise to certain rights and remedies of governmental authorities including, for example, termination of the

Table of Conten t s

Dunkirk Lease and other Facility Agreements and potential recoupment of a percentage of the grant funding received by Athenex for construction of the facility and other benefits received, subject to the terms and conditions of the applicable agreements.

In addition, and related to the delayed completion of the facility as described above, in November 2024 we received written notice from our landlord alleging non-compliance with the initial employee headcount requirement of our lease for the Dunkirk Facility.

While we are seeking to resolve this matter expeditiously, there can be no assurance that we will succeed in doing so, and we may lose access to the Dunkirk Facility.

Although we believe that governmental funding will assist in funding a portion of the further buildout of the Dunkirk Facility, which we estimate to be approximately $ 8.0 million to $ 10.0 million of governmental funding remaining available as of December 31, 2024, there can be no assurance as to the final acceptance and timing of the requests for governmental funding that we submit, and we will need to plan and fund most of the additional buildout of, and purchase additional equipment for, the Dunkirk Facility in connection with our planned full operations.

In addition, any future governmental funding will be subject to the eligibility of submitted expenses, as well as our compliance with the obligations that we are subject to pursuant to the agreements with parties regarding the Dunkirk Facility as described above.

2 unchanged sentences

Dunkirk Facility Workforce Reduction

In September 2022, the company initiated a workforce reduction at the Dunkirk Facility and recorded severance and retention benefits for the terminated employees totaling $ 1.0 million during the year ended December 31, 2022 in selling, general and administrative expense , on the consolidated statement of operations.

The terminated employees were not required to render service through their termination date in December 2022 to receive these benefits.

In 2022, the company initiated a workforce reduction at the Dunkirk Facility and recorded severance and retention benefits for the terminated employees totaling $ 1.0 million during the year ended December 31, 2022 in selling, general and administrative expense , on the consolidated statement of operations.

Commitments and Contingencies

5 unchanged sentences

In connection with our acquisition of VBC, we are obligated to pay the former owners contingent consideration upon the achievement of certain milestones related to the GMP-in-a-Box technology.

A clinical milestone totaling $ 0.8 million was earned by the former owners of VivaBioCell, of which $ 0.4 million was paid during the year ended December 31, 2021, with the remaining $ 0.3 million clinical obligation, net of foreign exchange adjustment, settled during the year ended December 31, 2022.

If a government agency unconditionally approves the GMP-in-a-Box technology for commercial sale (the regulatory milestone) in the future, we will be obligated to pay an additional approximately $ 2.1 million to the former owners.

Altor BioScience, LLC

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 the transaction was recorded as an asset acquisition, future CVR payments will be recorded when the corresponding events are probable of achievement, or the consideration becomes payable.

As of December 31, 2024, Dr.

Soon-Shiong, our Executive Chairman and Global Chief Scientific and Medical Officer, and his related party hold approximately $ 139.8 million of net sales CVRs and they have both irrevocably agreed to receive shares of the company’s common stock in satisfaction of their CVRs.

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, and they have both irrevocably agreed to receive shares of the company’s common stock in satisfaction of their CVRs.

We may be required to pay the other prior Altor stockholders up to $ 164.2 million for their net sales CVRs should they choose to have their CVRs paid in cash instead of common stock.

3 unchanged sentences

Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

Table of Conten t s

Altor BioScience, LLC Litigation

2 unchanged sentences

Soon-Shiong, et al.

was filed in Delaware Chancery Court by plaintiffs Clayland Boyden Gray (Gray) and Adam R.

was filed in the Delaware Court of Chancery by plaintiffs Clayland Boyden Gray (Gray) and Adam R.

The plaintiffs, two minority stockholders, asserted claims against the company and other defendants for (1) breach of fiduciary duty and (2) aiding and abetting breach of fiduciary duty and filed a motion to enjoin the merger.

2 unchanged sentences

Henderson (Henderson)) filed a second amended complaint, including appraisal claims, and which the defendants subsequently moved to dismiss.

In a second action, Dyad Pharmaceutical Corporation (Dyad) filed a petition in Delaware Chancery Court for appraisal in connection with the merger.

In a second action, Dyad Pharmaceutical Corporation (Dyad) filed a petition in the Delaware Court of Chancery for appraisal in connection with the merger.

The defendants moved to dismiss the appraisal petition in 2018.

25 unchanged sentences

Trial had been set to commence in Sorrento’s Superior Court action on August 7, 2023, but on July 24, 2023 the Superior Court vacated the August 7, 2023 trial date at the parties’ request in light of the pending settlement discussed below.

Table of Conten t s

Also in 2019, the company and Dr.

17 unchanged sentences

The Superior Court entered judgments against Sorrento in the aggregate amount of approximately $ 176.4 million plus 10 % post-judgment interest, of which approximately $ 159.4 million was payable to NantCell, and the remainder of which was payable to NANTibody.

On February 13, 2023, Sorrento informed counsel to the company that it had filed a Chapter 11 proceeding in the U.S.

District Court for the Southern District of Texas, In re:

On February 13, 2023, Sorrento informed counsel to the company that it had filed a Chapter 11 proceeding in the United States District Court for the Southern District of Texas, In re:

Sorrento Therapeutics, Inc., et al., Case No.

8 unchanged sentences

ET on August 31, 2023, Sorrento had not paid the judgments held by NantCell and NANTibody.

Accordingly, in relevant part to the company and NantCell, a mutual release of claims became effective such that the aforementioned judgments were released, the litigation claims were released including, without limitation, the derivative litigation against NantCell described above, Sorrento relinquished its interests in NANTibody, and Sorrento forfeited its rights to any payments from NantCell arising out of its antibody exclusive license agreement with NantCell, including any royalties associated with the company’s engineered NK cell therapy in Phase II clinical trials, PD-L1 t-haNK.

As a result of the settlement, the parties filed dismissals of the litigation matters discussed above.

2 unchanged sentences

In 2020, we received a Request for Arbitration before the International Chamber of Commerce, International Court of Arbitration.

The arbitration relates to a license, development, and commercialization agreement that Altor entered into with Beike in 2014, which agreement was amended and restated in 2017, pursuant to which Altor granted to Beike an exclusive license to use, research, develop and commercialize products based on N-803 in China for human therapeutic uses.

In the arbitration, Beike is asserting a claim for breach of contract under the license agreement.

Among other things, Beike alleges that we failed to use commercially reasonable efforts to deliver to Beike materials and data related to N-803.

Among other things, Beike alleges that we failed to

Table of Conten t s

use commercially reasonable efforts to deliver to Beike materials and data related to ANKTIVA.

Beike is seeking specific performance and declaratory relief for the alleged breaches.

On September 25, 2020, the parties entered into a standstill agreement under which, among other things, the parties affirmed they would perform certain of their obligations under the license agreement by specified dates and agreed that all deadlines in the arbitration were indefinitely extended.

On September 25, 2020, the parties entered into a standstill and tolling agreement (standstill agreement) under which, among other things, the parties affirmed they will perform certain of their obligations under the license agreement by specified dates and agreed that all deadlines in the arbitration are indefinitely extended.

The standstill agreement could be terminated by any party on ten calendar days’ notice, and upon termination, the parties had the right to pursue claims arising from the license agreement in any appropriate tribunal.

On March 20, 2023, we terminated the standstill agreement, and on

April 11, 2023, Beike served an amended Request for Arbitration.

On March 20, 2023, we terminated the standstill agreement, and on April 11, 2023, Beike served an amended Request for Arbitration.

We served an Answer and Counterclaims on May 19, 2023.

Beike served a Reply to our counterclaims on June 21, 2023.

Beike’s Statement of Claim is due on March 22, 2024, and the company’s Statement of Defense and Counterclaim is due on June 21, 2024.

Beike served its Statement of Claim on March 22, 2024, and the company served its Statement of Defense and Counterclaim on June 21, 2024, and Beike served its Statement of Defense to the Counterclaim on August 2, 2024.

After the parties completed discovery, Beike served its Reply and Defense to Counterclaim on January 17, 2025.

The hearing in the arbitration is scheduled to begin on June 9, 2025.

Given that no discovery has occurred, it remains too early to evaluate the likely outcome of the case or to estimate any range of potential loss.

We believe the claims asserted against the company lack merit and intend to defend the case, and to pursue or counterclaims, vigorously.

Given that the proceeding is in the pre-hearing stages, it remains too early to evaluate the likely outcome of the case or to estimate any range of potential loss.

We believe the claims asserted against the company lack merit and intend to defend the case, and to pursue our counterclaims, vigorously.

Securities Class Action

1 unchanged sentence

ImmunityBio, Inc.

3:23-cv-01216-BEN-WVG, was filed in the U.S.

District Court for the Southern District of California against the company and three of its officers and/or directors, asserting violations of Sections 10(b) and 20(a) of the Exchange Act.

Stemming from the company’s disclosure on May 11, 2023 that it had received an FDA CRL stating, among other things, that it could not approve the company’s BLA for its 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, in its present form due to deficiencies related to its pre-license inspection of the company’s third-party CMOs, the complaint alleges that the defendants had previously made materially false and misleading statements and/or omitted material adverse facts regarding its third-party clinical manufacturing organizations and the prospects for regulatory approval of the BLA.

On September 27, 2023, the court appointed a lead plaintiff, approved their selection of lead counsel, and re-captioned the case In re.

ImmunityBio, Inc.

3:23-cv-01216-GPC-VET, was filed in the United States District Court for the Southern District of California against the company and three of its officers and/or directors, asserting violations of Sections 10(b) and 20(a) of the Exchange Act.

Stemming from the company’s disclosure on May 11, 2023 that it had received an FDA CRL stating, among other things, that it could not approve the company’s BLA for its then product candidate, ANKTIVA with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with CIS with or without papillary tumors, in its present form due to deficiencies related to its pre-license inspection of the company’s third-party CMOs, the complaint alleges that the defendants had previously made materially false and misleading statements and/or omitted material adverse facts regarding its third-party CMOs and the prospects for regulatory approval of the BLA.

The complaint did not specify the amount of damages being sought.

On September 27, 2023, the court appointed a lead plaintiff, approved their selection of lead counsel, and re-captioned the case In re ImmunityBio, Inc.

Securities Litigation, No.

3:23-cv-01216.

On November 17, 2023, lead plaintiff filed an amended complaint, which named the same defendants and asserted the same claims as the previous complaint.

On January 8, 2024, defendants filed a motion to dismiss the amended complaint.

A hearing on the motion is currently scheduled for April 23, 2024.The company believes the lawsuit is without merit and intends to defend the case vigorously.

The company is unable to estimate a range of loss, if any, that could result were there to be an adverse final decision in this action.

If an unfavorable outcome were to occur, it is possible that the impact could be material to the company’s results of operations in the period(s) in which any such outcome becomes probable and estimable.

On November 17, 2023, the lead plaintiff filed an amended complaint, which named the same defendants and asserted the same claims as the previous complaint.

On January 8, 2024, the defendants filed a motion to dismiss the amended complaint.

On June 20, 2024, the court issued an order granting in part and denying in part the motion to dismiss.

On July 16, 2024, the lead plaintiff notified the court that he would proceed with his current pleading, and the defendants answered the complaint on August 29, 2024.

On January 25, 2025, following a mediation and the parties’ agreement in principle to settle the securities class action for $ 10.5 million, the lead plaintiff filed an unopposed motion for preliminary approval of class action settlement.

The settlement is subject to preliminary and final approval by the U.S.

District Court for the Southern District of California.

A preliminary approval hearing is scheduled for March 7, 2025.

As a result of the foregoing, the company recorded legal settlement expense of $ 10.5 million in selling, general and administrative expense, on the consolidated statement of operations during the year ended December 31, 2024 and a corresponding amount in accrued expenses and other liabilities , on the consolidated balance sheet.

The company believes that approximately $ 6.0 million of this amount will be paid by the company’s insurers, which will be recorded upon receipt.

To the extent the court does not grant final approval of the settlement described above, the company is unable to estimate a range of loss, if any, that could result were there to be an adverse final decision in this action.

In this event and if an unfavorable outcome were to occur, it is possible that the impact could be material to the company’s results of operations in the period(s) in which any such outcome becomes probable and estimable.

Van Luven, Barbieri and Shin Derivative Actions

On October 29, 2024, a shareholder derivative action was filed in the United States District Court for the Southern District of California against the members of our Board of Directors and certain officers, captioned Van Luven v.

Soon-Shiong et al.

3:24-cv-02014-GPC-VET.

The plaintiff purports to bring the action derivatively on behalf of ImmunityBio, and ImmunityBio is a nominal defendant to the action.

Stemming from the company’s May 11, 2023 disclosure that it had received an FDA CRL stating, among other things, that it could not approve the company’s BLA for its then product candidate, ANKTIVA with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with CIS with or without papillary tumors, in its present form due to deficiencies related to its pre-license inspection of the company’s third-party CMOs, the derivative complaint

Table of Conten t s

alleges that the individual defendants authorized or permitted materially false and misleading statements and/or omitted material adverse facts regarding ImmunityBio’s third-party CMOs and the prospects for regulatory approval of the ANKTIVA BLA.

The derivative complaint asserts claims for violations of Section 14(a) of the Exchange Act as well as claims for breach of fiduciary duty, unjust enrichment, and waste of corporate assets.

The derivative complaint seeks unspecified damages on behalf of the company, disgorgement or restitution, declaratory relief, and an award of costs and expenses to the derivative plaintiff, including attorneys’ fees.

The court entered an order extending the defendants’ deadline to respond to the complaint to April 18, 2025.

On February 25, 2025, a second shareholder derivative action was filed in the United States District Court for the Southern District of California against certain members of our Board of Directors and certain officers, captioned Barbieri v.

Soon-Shiong, et al ., Case No.

3:25-cv-00416-AGS-JLB.

The plaintiff purports to bring the action derivatively on behalf of ImmunityBio, and ImmunityBio is a nominal defendant in the action.

This lawsuit asserts substantially similar claims and allegations as Van Luven .

On February 26, 2025, a third shareholder derivative action was filed in the United States District Court for the Southern District of California against certain current and former members of our Board of Directors and certain officers, captioned Shin v.

Soon-Shiong, et al.

3:25-cv-00423-JAH-DDL.

The plaintiff purports to bring the action derivatively on behalf of ImmunityBio, and ImmunityBio is a nominal defendant in the action.

This lawsuit asserts substantially similar claims and allegations as Van Luven .

Carlson Derivative Action

On November 20, 2024, a shareholder derivative action was filed in the Delaware Court of Chancery against the company’s Founder, Executive Chairman, Global Chief Scientific and Medical Officer and principal stockholder, Dr.

Soon-Shiong, certain affiliates of Dr.

Soon-Shiong, certain other members of management, and members of the company’s Board of Directors who serve on the Board of Directors’ Related Party Transaction Committee, captioned Carlson v.

Soon-Shiong, et al., Case No.

2024-1195-VCL.

The plaintiff purports to bring the action derivatively on behalf of ImmunityBio, and ImmunityBio is a nominal defendant to the action.

The plaintiff alleges that the previously disclosed September 2023 financing transactions between the company and Dr.

Soon-Shiong and his affiliates were not fair to the company.

In particular, the plaintiff alleges that the transactions were timed to benefit Dr.

Soon-Shiong and his affiliates during a temporary decline in the company’s stock price, resulting in an artificially low conversion price for certain convertible promissory notes that were among the transactions, when defendants knew the company’s stock price would increase following the company’s imminent resubmission of a BLA for, and the subsequent FDA approval of, ANKTIVA with BCG for the treatment of adult patients with BCG-unresponsive NMIBC with CIS with or without papillary tumors.

The complaint alleges that defendants breached their fiduciary duties by entering into these transactions at that time and on those terms, thereby unjustly enriching Dr.

Soon-Shiong and his affiliates.

The derivative complaint seeks unspecified damages on behalf of the company, corporate governance changes with respect to related-party transactions, and an award of costs and expenses to the derivative plaintiff, including attorneys’ fees.

On February 17, 2025, the defendants filed a motion to dismiss the complaint.

Unconditional Purchase Obligations

Unconditional purchase obligations are defined as an agreement to purchase goods or services that are enforceable and legally binding (non-cancelable, or cancelable only in certain circumstances).

In the normal course of business, we enter into unconditional purchase obligation arrangements with a third-party CMO to reserve manufacturing slots in its cGMP manufacturing facility for the manufacture and supply of cGMP batches per FDA and EMA regulations for commercial use.

The total amount of future non-cancelable purchase commitments related to the manufacture of cGMP batches is $ 2.0 million and $ 0.9 million for the years ending December 31, 2024 and 2025, respectively.

We estimate our total unconditional purchase obligation related to hosted software license subscription fees and implementation costs at $ 5.2 million as of December 31, 2023.

Payments by year are estimated as follows:

2024 ($ 1.6 million), 2025 ($ 1.8 million) and 2026 ($ 1.8 million).

Additionally, our total unconditional purchase obligation for laboratory cleanroom service costs are estimated at $ 1.9 million as of December 31, 2023.

Payments by year are estimated as follows:

2024 ($ 0.5 million) and 2025 ($ 1.4 million).

Unconditional purchase obligations are defined as an agreement to purchase goods or services that are enforceable and legally binding (non-cancelable, or cancellable only in certain circumstances).

Estimated future minimum unconditional purchase obligations as of December 31, 2024 are as follows (in thousands):

Years Ending December 31,

2025 2026 2027 2028 2029

Software license fees and installation costs $ 2,658 $ 2,675 $ 844 $ 159 $ 106

Reserved cGMP manufacturing capacity at

third-party CMO facilities 1,606 — — — —

Laboratory clean room services 716 — — — —

Commercial launch services 136 — — — —

Table of Conten t s

The purchase obligation amounts do not represent the entire anticipated purchases in the future but represent only those items for which we are contractually obligated.

1 unchanged sentence

For this reason, these amounts do not provide an indication of our expected future cash outflows related to purchases.

During the year ended December 31, 2023, we did not enter into any significant contracts or material unconditional purchase commitments, other than those disclosed in these consolidated financial statements.

During the year ended December 31, 2024, we did not enter into any significant contracts, other than those disclosed in these consolidated financial statements.

Lease Arrangements

2 unchanged sentences

Substantially all of our operating lease right-of-use assets and operating lease liabilities relate to facilities leases.

All of our finance leases are related to equipment rentals at the Dunkirk Facility.

All of our finance leases were related to equipment rental at the Dunkirk Facility.

See Note 13 “Related-Party Agreements” for more information about our related-party leases.

10 unchanged sentences

Operating lease liabilities Operating lease liabilities, less current portion 34,823 39,942

Finance lease liabilities Other liabilities — 64

Total lease liabilities $ 42,289 $ 45,250

3 unchanged sentences

Operating leases 4.8 years 6.2 years

Finance leases 0.8 years 1.8 years

Finance leases — 0.8 years

Weighted-average discount rate:

1 unchanged sentence

Finance leases — % 11.7 %

Table of Conten t s

The components of lease expense consist of the following (in thousands):

17 unchanged sentences

2025 $ 11,588

2025 10,864 — 10,864

2026 8,983 — 8,983

2027 8,220 — 8,220

2028 8,465 — 8,465

Thereafter 7,459

3 unchanged sentences

Present value of operating lease liabilities $ 42,289

During the year ended December 31, 2023, we extended some existing related-party leases and terminated an existing related-party lease.

See Note 11 , Related-Party Agreements, for more information regarding our related-party leases.

There have been no material changes related to our existing lease agreements during the year ended December 31, 2024.

Revenue Interest Purchase Agreement

On December 29, 2023, we entered into the RIPA with Infinity and Oberland, to support the commercialization of Anktiva, our lead product candidate, to further the development of our product platforms, and to provide for other working capital needs.

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 Anktiva 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.

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 will be tiered payments initially ranging from 3.00 % to 7.00 % (or after funding of the Second Payment, 4.50 % to 10.00 %) of the company’s worldwide net sales, excluding those in China.

If the aggregate Revenue Interest Payments made to Oberland as of December 31, 2029 equal or exceed the Cumulative Purchaser Payments as of that date, the initially tiered revenue interest rate will be decreased to a single rate of 1.50 % (or after the funding of the Second Payment, 2.25 %) of the company’s worldwide net sales, excluding those in China.

Revenue Interest Liability

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

Pursuant to the RIPA, Oberland acquired certain initial Revenue Interests from us for a gross purchase price of $ 200.0 million paid on closing, less $ 7.5 million of issuance costs.

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.

Table of Conten t s

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 $ 3.1 million of issuance costs.

The issuance costs incurred are being amortized to interest expense over the estimated term of the debt.

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.

If the aggregate Revenue Interest Payments made to Oberland as of December 31, 2029 (Test Date) equal or exceed the Cumulative Purchaser Payments ($ 300.0 million) as of that date, the initially tiered revenue interest rate will be decreased to a single rate of 2.25 % (before the funding of the Second Payment, 1.50 %) of the company’s worldwide net sales, excluding those in China.

If the aggregate Revenue Interest Payments made to Oberland as of the Test Date are less than the aggregate amount of Cumulative Purchaser Payments as of the Test Date, then following the Test Date the initially tiered revenue interest rate will increase to a rate that, had such increased rate applied during the period from December 29, 2023 through December 31, 2029, it would have resulted in Oberland receiving aggregate Revenue Interest Payments (excluding certain payments detailed in the RIPA) equal to the Cumulative Purchaser Payments as of the Test Date.

In addition, if aggregate Revenue Interest Payments made to Oberland as of the Test Date are less than the aggregate amount of Cumulative Purchaser Payments as of the Test Date, then the company must make the True-Up Payment.

Oberland’s rights to receive Revenue Interest Payments under the RIPA shall terminate when Oberland has received 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.

If Oberland has not received total payments (including any True-Up Payment) equal to 195.0 % of the then Cumulative Purchaser Payments on or before the twelfth anniversary of the RIPA, then the company shall be obligated to pay to Oberland an amount equal to 195.0 % of the then Cumulative Purchaser Payments less the aggregate payments (including any True-Up Payments) made as of such date.

Under the RIPA, the company has a Call Option to terminate the RIPA and repurchase the Revenue Interests at any time upon advance written notice, subject to certain limitations set forth in the RIPA.

Additionally, Oberland has a Put Option enabling them to terminate the RIPA and to require the company to repurchase the Revenue Interests upon enumerated events, such as a bankruptcy event, failure to make a payment, an uncured material breach, default in certain third-party agreements, a breach or default under any subordination agreements with respect to indebtedness to existing stockholders, or subordinated notes during certain time periods, judgments in excess of certain amounts against the company, a material adverse effect, the loss of regulatory approval of our product candidates or a change of control.

The required purchase price with respect to the Call Option and/or Put Option, as applicable, shall be (a) 120.0 % of the Cumulative Purchaser Payments as of such date, if Oberland exercises the Put Option (other than in connection with a change of control) on or prior to the first anniversary the Closing Date, (b) 135.0 % of the Cumulative Purchaser Payments as of such date, if the Put Option or the Call Option is exercised in connection with a change of control on or prior to the date that is eighteen (18) months after the Closing Date, and (c) in all other cases, (i) 175.0 % of the Cumulative Purchaser Payments as of such date, if the Put Option or the Call Option is exercised no later than the date that is thirty six (36) months after the Closing Date, and (ii) 195.0 % of the Cumulative Purchaser Payments as of such date, if the Put Option or the Call Option is exercised later than the date that is thirty six (36) months after the Closing Date, minus, in each case, the total payments made to Oberland on or prior to such date.

The company’s obligations under the RIPA are guaranteed by certain of its subsidiaries meeting materiality thresholds set forth in the RIPA.

2 unchanged sentences

As of December 31, 2024, the company was in compliance with all covenants.

The RIPA is considered a sale of future revenues and accounted for as long-term debt recorded at amortized cost using the effective interest rate method.

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.

This stock purchase option was classified as a liability estimated at fair value at issuance.

The $ 200.0 million received pursuant to the RIPA and $ 10.0 million received pursuant to the SPOA were allocated among the resulting financial instruments on a relative fair value basis, with $ 197.1 million allocated to the debt under the RIPA, $ 12.0 million allocated to the common stock issued under the SPOA, and $ 0.8 million allocated to the stock purchase option.

The Put Option under the RIPA that is exercisable by Oberland upon certain contingent events and the Call Option that is exercisable by the company upon a change of control were determined to be embedded derivatives requiring bifurcation and separately accounted for as a single compound derivative instrument.

The company recorded the initial fair value of the derivative liability of $ 34.5 million as a debt discount, which will be amortized to interest expense over the expected term of the debt using the effective interest rate method.

In connection with the RIPA, as of December 31, 2023 $ 155.4 million was recorded as revenue interest liability, on the consolidated balance sheet.

The RIPA is considered a sale of future revenues and is accounted for as long-term debt recorded at amortized cost using the effective interest rate method.

The company imputes interest expense associated with this liability using the effective interest rate method.

3 unchanged sentences

A significant increase or decrease in actual or forecasted net sales may materially impact the revenue interest liability, interest expense, other income, and the time period for repayment.

During the year ended December 31, 2023, we recorded $ 0.3 million of interest expense related to this arrangement.

The company incurred $ 7.5 million of issuance costs in connection with the RIPA, which will be amortized to interest expense over the estimated term of the debt.

The following table summarizes the revenue interest liability activity during the year ended December 31, 2023 (in thousands):

On December 10, 2024, the company entered into an amendment to the RIPA to add additional conditions to the payment of certain existing indebtedness.

Such amendment did not have an impact on the valuation of the revenue interest liability or the embedded derivative liabilities related to the RIPA.

During the years ended December 31, 2024 and 2023, we recorded $ 39.7 million and $ 0.3 million of interest expense, respectively, related to this arrangement.

Table of Conten t s

The following table summarizes the revenue interest liability activity during the years ended December 31, 2024 and 2023 (in thousands):

Revenue interest liability at inception $ —

Proceeds from the RIPA, gross 200,000

Issuance costs 7,491

Proceeds from the RIPA, net 192,509

Debt discount from:

Embedded contingent derivative liability ( 34,500 )

Proceeds from First Payment, net of issuance costs 192,509

Embedded contingent derivative liability related to First Payment ( 34,500 )

Issuance of common stock ( 2,039 )

1 unchanged sentence

Interest expense recognized 264

Revenue interest liability as of December 31, 2023 $ 155,415

Revenue interest liability, at December 31, 2023

Proceeds from Second Payment, net of issuance costs 96,956

Embedded contingent derivative liability related to Second Payment ( 6,150 )

Revenue interest payment ( 1,474 )

Interest expense recognized 39,657

Revenue interest liability, at December 31, 2024

Embedded Derivative Liabilities

Under the RIPA, the company has a Call Option to terminate the RIPA and repurchase the Revenue Interests at any time upon advance written notice, subject to certain limitations set forth in the RIPA.

The aforementioned Call and Put Options are considered embedded derivatives requiring bifurcation as a single compound derivative instrument.

The company estimated the fair value of the derivative liability using a “with-and-without” method.

The “with-and-without” methodology involves valuing the whole instrument on an as-is basis and then valuing the instrument without the individual embedded derivative.

The difference between the entire instrument with the embedded derivative compared to the instrument without the embedded derivative is the fair value of the derivative liability.

The company recorded $ 34.5 million for the initial fair value of the derivative liability upon the closing of the initial $ 200.0 million Revenue Interests acquired by Oberland.

The company recorded an incremental $ 6.2 million for the fair value of the derivative liability upon the closing of the additional $ 100.0 million Revenue Interests acquired by Oberland in May 2024.

The initial and incremental fair value allocated to the derivative liability is recorded against the RIPA as a debt discount, which is being amortized in interest expense, on the consolidated statement of operations over the expected term of the debt using the effective interest method.

The embedded derivative is subsequently remeasured at fair value each reporting period, with the change in fair value being recorded in change in fair value of derivative liabilities , on the consolidated statement of operations.

Table of Conten t s

As of December 31, 2024 and 2023, the discount rate used for valuation of the derivative liability was 10.4 % and 12.1 %, respectively.

The change in fair value of the derivative liabilities is as follows (in thousands):

Fair value, at December 31, 2023

Change in fair value ( 14,850 )

Embedded contingent derivative liability related to Second Payment 6,150

Fair value, at December 31, 2024

Stock Purchase and Option Agreement

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 had 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.

This stock purchase option was classified as a liability estimated at fair value at issuance.

The initial $ 200.0 million received pursuant to the RIPA and $ 10.0 million received pursuant to the SPOA were allocated among the resulting financial instruments on a relative fair value basis, with $ 197.1 million allocated to the debt under the RIPA, $ 12.0 million allocated to the common stock issued under the SPOA, and $ 0.8 million allocated to the stock purchase option as of December 31, 2023.

In April 2024, Oberland exercised part of their option and purchased 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.

This stock purchase option is classified in accrued expenses and other liabilities , on the consolidated balance sheet at its fair value and is subsequently remeasured at fair value each reporting period, with the change in fair value being recorded in change in fair value of derivative liabilities , on the consolidated statement of operations.

The estimated fair value of the stock option purchase liability was computed using the calculated exercise price and discounted back to a present value at the risk-free rate with the following unobservable assumptions at the following dates:

As of December 31,

Expected volatility 127.0 % 135.0 %

Risk-free rate 4.3 % 5.1 %

The change in fair value of the stock option purchase liability is as follows (in thousands):

Fair value, at December 31, 2023

Change in fair value 2,206

Exercise of stock option ( 2,705 )

Fair value, at December 31, 2024

Table of Conten t s

Related-Party Debt

Our related-party debt is summarized below (in thousands):

Balance as of December 31, 2024

Year Interest

Rate Principal

Amount Amount Leveling

Related-Party Convertible Note at Fair Value:

$ 505 million December 2024 Promissory Note (4)

$ 505,000 $ 461,877 Level 3

Balances as of December 31, 2023

20 unchanged sentences

Total related-party convertible notes $ 610,000 $ 33,049 $ 576,951

Balances as of December 31, 2022

Year Interest

Rate Principal

Amount Accrued PIK

Discounts Total

Related-Party Nonconvertible Notes:

$ 300 million December 2021

Promissory Note (1), (2), (3)

$ 300,000 $ — $ 35,822 $ 264,178

$ 125 million August 2022

Promissory Note (1), (2), (3)

125,000 — 7,039 117,961

$ 50 million December 2022

Promissory Note (1), (2), (3)

50,000 — 238 49,762

Total related-party nonconvertible notes $ 475,000 $ — $ 43,099 $ 431,901

Related-Party Convertible Notes:

Nant Capital 2015 Note Payable (1), (2)

2025 5.0 % $ 55,226 $ 9,320 $ 5,188 $ 59,358

Nant Capital 2020 Note Payable (1), (2)

$ 505 million December 2024 Promissory Note

On December 10, 2024 in connection with an equity offering, the company and Nant Capital entered into a second amended and restated promissory note.

Pursuant to the terms of the second amended and restated promissory note, Tranche 1 of the December 2023 Promissory Note with a principal amount of $ 125.0 million and Tranche 2 of the December 2023 Promissory Note with a principal amount of $ 380.0 million were combined into one convertible promissory note with a principal amount of $ 505.0 million with a maturity date of December 31, 2027.

The $ 505.0 million December 2024 Promissory Note bears an interest rate of Term SOFR plus 8.0 % per annum, payable on a quarterly basis.

Pursuant to the terms of the second amended and restated promissory note, the noteholder, in its sole discretion, may convert all of the outstanding principal amount into shares of common stock at a conversion price of $ 5.4270 per share.

In addition, the noteholder can request up to $ 50.0 million of the outstanding principal amount and accrued interest to be repaid upon consummation of a specified transaction.

In connection with the RIPA transaction, the outstanding related party convertible note was subordinated to the RIPA payment obligations.

Table of Conten t s

The following table summarizes the estimated future contractual obligations of our related-party debt as of December 31, 2024 (in thousands):

Payments Interest

Payments (1) Total

$ — $ 62,168 $ 62,168

Nant Capital 2021 Note Payable (1), (2)

— 62,168 62,168

NantMobile Note Payable (1), (2)

505,000 62,168 567,168

NCSC Note Payable (1), (2)

Total $ 505,000 $ 186,504 $ 691,504

_______________

Total related-party convertible notes $ 233,226 $ 29,153 $ 21,108 $ 241,271

(1) Interest payments on our promissory note are calculated based on Term SOFR plus the contractual spread per the loan agreement.

The weighted-average interest rate on our promissory note as of December 31, 2024 was 12.34 %.

Mandatory Prepayment Feature

The embedded derivative related to a contingently exercisable prepayment feature, which allows the noteholder to request up to a $ 50.0 million prepayment and accrued interest upon occurrence of a specified transaction (defined in the promissory note) was recorded as a derivative liability on the consolidated balance sheet and measured at fair value prior to the second amended and restated promissory note.

The fair value of the derivative liability was determined at each period end using the with-and-without method, which assessed the likelihood and timing of a specified transaction that if triggered could have resulted in a repayment.

Changes in the fair value of the derivative liability were reported in change in fair value of derivative liabilities , on the consolidated statement of operations.

Since the company elected the fair value option to account for the $ 505.0 million December 2024 Promissory Note, the embedded derivative is no longer required to be recorded separately but is considered when estimating the fair value of the $ 505.0 million December 2024 Promissory Note.

The change in fair value of the contingently exercisable prepayment feature embedded derivative through December 10, 2024, the date of the $ 505.0 million December 2024 Promissory Note amendment, was $ 0.8 million and $ 0.8 million during the year ended December 31, 2023.

$ 300.0 million December 2021 Promissory Note

On December 17, 2021, the company executed a $ 300.0 million promissory note with N ant Capital, an af filiated entity under common control of our Executive Chairman, Global Chief Scientific and Medical Officer, and principal stockholder.

On December 17, 2021, the company executed a $ 300.0 million promissory note with N ant Capital, an af filiated entity under common control of our Founder, Executive Chairman and Global Chief Scientific and Medical Officer.

The note bore an interest rate of Term SOFR plus 5.4 % per annum, payable on a quarterly basis.

4 unchanged sentences

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 this existing promissory note was amended to be included in the Tranche 2 principal amount of the amended $ 505.0 million December 2023 promissory note, with 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 Tranche 2 $ 380.0 million principal amount into shares of common stock at a conversion price of $ 8.2690 per share.

Based on the terms of the amended and restated promissory note, the noteholder, at its sole discretion, could convert all of the Tranche 2 $ 380.0 million principal amount into shares of common stock at a conversion price of $ 8.2690 per share.

Table of Conten t s

$ 125.0 million August 2022 Promissory Note

7 unchanged sentences

The note bore an interest rate of Term SOFR plus 8.0 % per annum, payable on a quarterly basis.

The company may prepay the outstanding promissory note, at any time, in whole or in part, without penalty.

In the event of a specified transaction (as defined in the note), the noteholder can request the outstanding principal and interest due on the loan to be repaid in full upon consummation of such specified transaction.

The company could prepay the outstanding promissory note, at any time, in whole or in part, without penalty.

In the event of a specified transaction (as defined in the note), the noteholder could request the outstanding principal and interest due on the loan to be repaid in full upon consummation of such specified transaction.

On September 11, 2023, the company and Nant Capital entered into a letter amendment pursuant to which the maturity date of the promissory note was further extended 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 promissory note was amended to be included in the Tranche 2 principal amount of the amended $ 505.0 million December 2023 promissory note, with a maturity date of December 31, 2025, and an interest rate of Term SOFR plus 7.5 % per annum.

Pursuant to the terms of the amended and restated promissory note, the investor, in its sole discretion may convert all of the outstanding Tranche 2 principal amount into shares of common stock at a conversion price of $ 8.2690 per share.

The noteholder can request up to $ 50.0 million of the Tranche 2 principal amount and accrued interest to be repaid upon consummation of such specified transaction.

Pursuant to the terms of the amended and restated promissory note, the investor, in its sole discretion, could convert all of the outstanding Tranche 2 principal amount into shares of common stock at a conversion price of $ 8.2690 per share.

The noteholder could request up to $ 50.0 million of the Tranche 2 principal amount and accrued interest to be repaid upon consummation of such specified transaction.

$ 30.0 million March 2023 Promissory Note

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, payable on a quarterly basis.

This note bore interest at Term SOFR plus 8.0 % per annum, payable on a quarterly basis.

The outstanding principal amount and any accrued and unpaid interest was originally due on December 31, 2023.

The company may prepay the outstanding 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 may choose to convert the outstanding principal amount to be prepaid and the accrued and unpaid interest thereon into shares of the company’s common stock at a price of $ 2.28 per share.

Additionally, the noteholder may at its option convert the entire outstanding principal amount of the promissory note and accrued interest into shares of the company’s common stock at a conversion price of $ 2.28 per share, at the option of the noteholder.

Upon receipt of a written notice of prepayment from the company, the noteholder could choose to convert the outstanding principal amount to be prepaid and the accrued and unpaid interest thereon into shares of the company’s common stock at a price of $ 2.28 per share.

Additionally, the noteholder could at its option convert the entire outstanding principal amount of the promissory note and accrued interest into shares of the company’s common stock at a conversion price of $ 2.28 per share, 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.

1 unchanged sentence

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

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

As of such date, the total outstanding principal amount and accrued and unpaid interest due under the existing note were converted into shares of the company’s common stock.

See Note 15 “Stockholders’ Deficit” for more information.

Table of Conten t s

$ 30.0 million June 2023 Promissory Note

2 unchanged sentences

The outstanding principal amount and any accrued and unpaid interest on advances was originally due on December 31, 2023.

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.

We could 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.

We received net proceeds of approximately $ 29.9 million from this promissory note, net of a $ 0.1 million origination fee paid to Nant Capital.

1 unchanged sentence

Pursuant to the terms of the amended and restated promissory note the investor, in its sole discretion may convert all of the Tranche 2 $ 380.0 million principal amount into shares of common stock at a conversion price of $ 8.2690 per share.

Pursuant to the terms of the amended and restated promissory note the investor, in its sole discretion, could convert all of the Tranche 2 $ 380.0 million principal amount into shares of common stock at a conversion price of $ 8.2690 per share.

$ 200.0 million September 2023 Promissory Note

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, payable on a monthly basis.

The outstanding principal amount and any accrued and unpaid interest are due on September 11, 2026.

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.

The note bore interest at Term SOFR plus 8.0 % per annum, payable on a monthly basis.

The outstanding principal amount and any accrued and unpaid interest were due on September 11, 2026.

We could 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 had 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.

The company 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 10, 2024 in connection with an equity offering, the company received a written notice from Nant Capital, the holder of 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 note into shares of the company’s common stock.

As of such date, the total outstanding principal amount and accrued and unpaid interest due under the note were converted into shares of the company’s common stock.

See Note 15 “Stockholders’ Deficit” for more information.

Footnotes to Related-Party Debt Tables

5 unchanged sentences

The terms of these fixed-rate promissory notes were amended and restated to include a conversion feature that gave each noteholder, at its sole option, at any time (other than when the noteholder is in receipt of a written notice of prepayment from the borrower), the right to convert the entire outstanding principal amount and accrued and unpaid interest due under each note at the time of conversion into shares of the company’s common stock at a price of $ 5.67 per share.

Table of Conten t s

Since all of the above promissory notes were entered into or amended at the same time and with entities under common control, the company determined that the promissory notes were required to be evaluated collectively to accurately capture the economics of the transactions entered in contemplation of each other and contemporaneously.

5 unchanged sentences

Also, the difference between the face values of the new and amended promissory notes (and accrued interest on the date of the amendment) and the fair values of the new and restated promissory notes was recorded as a debt discount to be amortized to interest expense over the remaining term (or until conversion in the case of fixed-rate promissory notes) of the respective promissory notes.

During the year ended December 31, 2022, we recorded amortization of related-party notes discounts totaling $ 16.3 million in interest expense , on the consolidated statement of operations.

During the years ended December 31, 2023 and 2022, we recorded amortization of related-party notes discounts totaling $ 42.4 million and $ 16.3 million, respectively, in interest expense , on the consolidated statement of operations.

The fair values of the promissory notes without a holder conversion option were estimated using discounted cash flow analyses, based on market rates available to the company for similar debt at issuance after consideration of default and credit risk and the level of subordination.

7 unchanged sentences

(2) September 11, 2023 Debt Modification

On September 11, 2023, the company entered into a stock purchase agreement with Nant Capital, NantMobile and NCSC pursuant to which the holders 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.

On September 11, 2023, the company entered into a stock purchase agreement with Nant Capital, NantMobile and NCSC pursuant to which the holders exchanged promissory notes totaling approximately $ 270.0 million in aggregate principal amount and accrued 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.

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 and the $ 30.0 million March 2023 Promissory Note was extended from December 31, 2023 to December 31, 2024.

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

No other material terms or conditions of these promissory notes were modified.

Table of Conten t s

Since all of the above promissory notes were entered into or amended at the same time on September 11, 2023 and with entities under common control, the company determined that the promissory notes were required to be evaluated collectively to accurately capture the economics of the transactions entered in contemplation of each other and contemporaneously.

5 unchanged sentences

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 with 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 common stock.

Pursuant to the terms of the amended and restated promissory note, the amended $ 505.0 million December 2023 promissory note became comprised of a Tranche 1 with 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 was 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 allowed 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 common stock.

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

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

The maturity date of the amended promissory note was 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.

2 unchanged sentences

Amount Maturity

Date Conversion

Year Conversion

Price Interest

15 unchanged sentences

before amendments $ 735,000

Table of Conten t s

The following table summarizes the Nant Capital promissory notes after the amendments on December 29, 2023 (principal amount in thousands):

Amount Maturity

Date Conversion

Year Conversion

Price Interest

17 unchanged sentences

Since all of the above outstanding promissory notes were amended at the same time, with entities under common control, the company determined that the promissory notes were required to be evaluated collectively to accurately capture the economics of the transactions entered in contemplation of each other and contemporaneously.

Also, in accordance with ASC 470-50 the company used the debt terms that existed before the September 11, 2023 modification to determine whether the current modification is substantially different, as the September 11, 2023 modification was within a year of the current transaction, and the promissory notes, at that time, had been modified without being deemed to be substantially different.

Also, in accordance with ASC 470-50 the company used the debt terms that existed before the September 11, 2023 modification to determine whether the modification was substantially different, as the September 11, 2023 modification was within a year of the transaction, and the promissory notes, at that time, had been modified without being deemed to be substantially different.

As the modifications (September 11, 2023 and December 29, 2023 on a cumulative basis) added a substantive conversion feature to the promissory notes, these promissory notes were determined to be extinguished given the contemporaneous nature of the amendments.

3 unchanged sentences

In addition, a debt premium totaling $ 354.9 million, calculated as the difference between the fair values of certain promissory notes after modifications and their respective face values, was also recorded in additional paid-in capital.

Collectively, net gain on debt extinguishment of $ 36.1 million was recorded in additional paid-in capital, on the consolidated statement of stockholders’ deficit for the year ended December 31, 2023.

Collectively, a net gain on debt extinguishment of $ 36.1 million was recorded in additional paid-in capital, on the consolidated statement of stockholders’ deficit for the year ended December 31, 2023.

Also, the difference between face values of certain new and amended promissory notes and their respective fair values of $ 53.1 million was recorded as a debt discount to be amortized as interest expense over the remaining term.

During the year ended December 31, 2023, we recorded amortization of related-party notes discounts totaling $ 0.5 million in interest expense, on the consolidated statement of operations related to the new and amended promissory notes.

In regard to the Tranche 2 principal amount of the $ 505.0 million December 2023 promissory note, the company identified an embedded derivative related to a contingent exercisable prepayment feature of the promissory note, which allows the noteholder to request up to a $ 50.0 million prepayment of the promissory note and accrued interest upon the occurrence of a specified transaction.

After the debt extinguishment, the company concluded that this promissory note was issued at a substantial discount, so the embedded derivative that is contingent exercisable was required to be bifurcated and accounted separately from the debt host instrument.

Table of Conten t s

In regard to the Tranche 2 principal amount of the $ 505.0 million December 2023 promissory note, the company identified an embedded derivative related to a contingent exercisable prepayment feature of the promissory note, which allowed the noteholder to request up to a $ 50.0 million prepayment of the promissory note and accrued interest upon the occurrence of a specified transaction.

After the debt extinguishment, the company concluded that this promissory note was issued at a substantial discount, so the embedded derivative that was contingently exercisable was required to be bifurcated and accounted separately from the debt host instrument.

The fair value of the embedded derivative was estimated at $ 0.8 million as of December 31, 2023, using a “with and without” method, which assesses the likelihood and timing of the specified transaction to be triggered and result in a repayment.

Significant unobservable inputs used for the valuation included a volatility of 118.0 %, a market yield of 23.2 % and a risk-free rate of 4.8 %.

The estimated fair value was computed with the following unobservable assumptions:

Amendment Date

December 29, 2023

Expected market yield 23.2 %

Expected volatility 118.0 %

Risk-free rate 4.8 %

The fair value of Tranche 1 principal amount of the amended $ 505.0 million December 2023 promissory note, which had no noteholder conversion option, was estimated using discounted cash flow analyses, based on market rates available to the company for similar debt at issuance after consideration of default and credit risk and the level of subordination.

3 unchanged sentences

Since certain of the factors analyzed were considered to be unobservable inputs, both the discounted cash flow model and the lattice model are considered to be Level 3 valuations.

Significant unobservable inputs used for the discounted cash flow analysis included a market yield of 23.2 % and the significant unobservable inputs used for the binomial lattice model included a volatility of 118.0 %, a market yield of 23.2 % and a risk-free rate of 4.4 %.

The effective unamortized debt discount rate of the amended Tranche 1 and Tranche 2 principal amount of the $ 505.0 million December 2023 promissory note is 23.65 % and 18.04 %, respectively.

The fair value of the $ 200.0 million September 2023 promissory note was determined using the binomial lattice model.

Significant unobservable inputs used for the valuation included a volatility of 119.3 %, a market yield of 23.3 % and a risk-free rate of 5.2 %.

The effective unamortized debt discount rate of the amended Tranche 1 and Tranche 2 principal amount of the $ 505.0 million December 2023 promissory note was 23.65 % and 18.04 %, respectively.

The estimated fair value was computed with the following unobservable assumptions:

Amendment Date

December 29, 2023

Expected market yield 23.2 %

Expected volatility 118.0 %

Risk-free rate 4.4 %

The fair value of the $ 200.0 million September 2023 promissory note was determined using the binomial lattice model with the following unobservable assumptions:

Amendment Date

December 29, 2023

Expected market yield 23.3 %

Expected volatility 119.3 %

Risk-free rate 5.2 %

Table of Conten t s

Prior to December 29, 2023, the $ 30.0 million March 2023 promissory note was accounted for under the ASC 825-10-15-4 FVO election.

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

The estimated fair value of the convertible note was computed using the binomial lattice model with the following observable assumptions before it was modified on December 29, 2023.

After the debt extinguishment, the note is accounted for under the amortized cost basis.

The estimated fair value of the convertible note was computed using the binomial lattice model with the following unobservable assumptions before it was modified on December 29, 2023.

After the debt extinguishment, the note was accounted for under the amortized cost basis.

Amendment Date

December 29, 2023

Expected market yield 23.5 %

6 unchanged sentences

Carrying value, December 29, 2023 $ 30,000

The following table summarizes the interest expense for our related-party promissory notes during the year ended December 31, 2023 (in thousands):

Year Ended December 31, 2023

(4) December 10, 2024 Debt Extinguishment

On December 10, 2024 in connection with an equity offering, the company and Nant Capital entered into a second amended and restated promissory note.

The $ 505.0 million December 2024 Promissory Note bears an interest rate of Term SOFR plus 8.0 % per annum, payable on a quarterly basis.

In addition, the noteholder can request up to $ 50.0 million of the outstanding principal amount and accrued interest to be repaid upon consummation of a specified transaction.

Also, on the same date, the company received a written notice from Nant Capital, the holder of the $ 30.0 million March 2023 Promissory Note due on December 31, 2025 and the $ 200.0 million September 2023 Promissory Note due on September 11, 2026 of its election to convert the entire outstanding principal and accrued interests of the such promissory notes into shares of the company’s common stock (the “Converted Promissory Notes”).

As of such date, the total outstanding principal amount and accrued and unpaid interests due under the Converted Promissory Notes were converted into shares of the company’s common stock.

Since the $ 505.0 million December 2024 Promissory Note, together with the Converted Promissory Notes, were executed contemporaneously and in contemplation with one another with entities under common control, the company evaluated these transactions collectively as a single unit of account to accurately capture the economics of the transactions.

The company determined the fair value of the conversion feature before and after the above transactions to assess whether there is a substantial change in fair value.

The company used binomial lattice models for the “with” scenario and discounted cash flow model for the “without” scenario.

The company determined that the fair value of the conversion feature before modification is substantially different than the fair value after modification, and as such, these transactions were accounted for as debt extinguishment in accordance with ASC 470-50.

Under this model, the company calculated a gain on debt extinguishment of $ 10.4 million, which represents the difference between the:

(a) fair value of the December 2024 Promissory Note and the reacquisition price of the Converted Promissory Notes on the date of conversion;

and (b) carrying value of the extinguished debt, net of any unamortized related party notes discounts plus, the debt premium previously recognized in additional paid-in capital , on the consolidated statement of stockholders’ deficit as a result of the December 29, 2023 Debt Extinguishment.

Since the debt was obtained from entities under common control, such gain on extinguishment was recorded in additional paid-in capital , on the consolidated statement of stockholders’ deficit.

Table of Conten t s

Due to the conversion of the Converted Promissory Notes, the Company also recorded $ 188.5 million in additional paid-in capital , on the consolidated statement of stockholders’ deficit as of December 31, 2024.

This represents the difference between the reacquisition price of the Converted Promissory Notes on the date of conversion and the debt premium previously recognized in additional paid-in capital , on the consolidated statement of stockholders’ deficit as a result of the December 29, 2023 Debt Extinguishment.

See Note 15 “Stockholders’ Deficit” for more information.

The estimated fair value of the Converted Promissory Notes were computed with the following unobservable assumptions at the amendment date on December 10, 2024:

Promissory Note

$ 200 million

September 2023

Promissory Note

Binomial lattice model:

Expected market yield 18.5 % 18.6 %

Expected volatility 103.2 % 118.6 %

Risk-free rate 4.2 % 4.2 %

Discounted cash flow model:

Discount rate 18.5 % 18.6 %

The company elected the fair value option for recognizing the $ 505.0 million December 2024 Promissory Note under ASC 825-10-15-4.

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

The estimated fair value of the convertible note was computed using the following unobservable assumptions at the following dates:

Immediately Before

the Amendment on

December 10, 2024

Immediately After

the Amendment on

December 10, 2024 As of

December 31, 2024

Binomial lattice model:

Expected market yield 18.5 % 18.7 % 19.3 %

Expected volatility 103.6 % 115.1 % 125.6 %

Risk-free rate 4.2 % 4.1 % 4.3 %

Discounted cash flow model:

Discount rate 18.5 % 18.7 % 19.3 %

The change in the carrying value of this note was as follows (in thousands):

Fair value at issuance date, December 10, 2024

Interest payment ( 11,808 )

Change in fair value, including $ 1.2 million related to instrument-specific credit risk

Ending fair value, at December 31, 2024

Table of Conten t s

The following tables summarize the interest expense for our related-party promissory notes during the years ended December 31, 2024 and 2023 (in thousands):

December 31, 2024

$ 505 million December 2024 Promissory Note

$ 505 million December 2023 Promissory Note Tranche 1

$ 505 million December 2023 Promissory Note Tranche 2

44,658 14,133

$ 30 million March 2023 Promissory Note

$ 200 million September 2023 Promissory Note

Total $ 92,001 $ 22,587

December 31, 2023

$ 300 million December 2021 Promissory Note (1)

$ 39,653 $ 27,967

$ 125 million August 2022 Promissory Note (1)

8 unchanged sentences

The interest expense recorded during this period was $ 0.4 million.

The following table summarizes the estimated future contractual obligations for our related-party debt as of December 31, 2023 (in thousands):

Principal Payments Interest Payments (1)

Notes Nonconvertible

Notes Convertible

Notes Nonconvertible

$ — $ — $ 79,778 $ 16,708 $ 96,486

410,000 125,000 79,556 16,663 631,219

200,000 — 18,590 — 218,590

Total $ 610,000 $ 125,000 $ 177,924 $ 33,371 $ 946,295

_______________

(1) Interest payments on our promissory notes are calculated based on Term SOFR plus the contractual spread per the loan agreements.

The weighted-average interest rate on our promissory notes as of December 31, 2023 was 13.09 %.

Table of Conten t s

Related-Party Agreements

10 unchanged sentences

Due to related party–the Clinic 21 57

Due to related party–NantWorks — 986

Due to related parties–Various 18 —

Total due to related parties $ 173 $ 1,136

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.

As described below, 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, Global Chief Scientific and Medical Officer, and principal stockholder.

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.

As described below, we have entered into arrangements with NantWorks, and certain affiliates of NantWorks, to facilitate the development of new immunotherapies for our product pipeline.

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, Global Chief Scientific and Medical Officer, and principal stockholder.

NantWorks, LLC

Shared Services Agreement

Under the amended and restated shared services agreement dated as of June 2016, but effective as of August 2015, NantWorks, a related party, provides corporate, general and administrative, certain research and development, and other support services.

We are charged for these services at cost plus reasonable allocations of employee benefits, facilities and other direct or fairly allocated indirect costs that relate to the employees providing the services.

Under the amended and restated shared services agreement with NantWorks dated as of June 2016, but effective as of August 2015, NantWorks, a related party, provides corporate, general and administrative, certain research and development, and other support services to us, and we provide certain of such services to them.

The receiving party is charged for the services at cost plus reasonable allocations of employee benefits, facilities and other direct or fairly allocated indirect costs that relate to the employees providing the services.

During the years ended December 31, 2024, 2023 and 2022, we recorded $ 2.6 million, $ 3.3 million and $ 3.8 million, respectively, in selling, general and administrative expense , and $ 3.3 million, $ 2.2 million, and $ 0.9 million, respectively, of expense reimbursements under this arrangement in research and development expense , on the consolidated statements of operations.

These amounts exclude certain general and administrative expenses provided by third-party vendors directly for our benefit, which were reimbursed to NantWorks based on those vendors’ invoiced amounts without markup by NantWorks.

As of December 31, 2023 and 2022, we had a receivable of $ 0.5 million and a payable of $ 1.0 million, respectively, for all agreements with NantWorks, which are included in due from/due to related parties, on the consolidated balance sheets.

We also recorded $ 1.0 million and $ 2.0 million of prepaid expenses for services that have been passed through to the company from NantWorks as of December 31, 2023 and 2022, respectively, which are included in prepaid expenses and other current assets , on the consolidated balance sheets.

As of December 31, 2024 and 2023, we had a receivable of $ 0.2 million and $ 0.5 million, respectively, for all agreements with NantWorks, which are included in due from related parties, on the consolidated balance sheets.

We also recorded $ 3.0 million and $ 1.0 million of prepaid expenses for various services that we expect will be passed through to the company from NantWorks as of December 31, 2024 and 2023, respectively, which are included in prepaid expenses and other current assets , on the consolidated balance sheets.

Facility License Agreement

2 unchanged sentences

Commencing January 1, 2022, the license fee increased by 3 % to approximately $ 56,120 per month.

Table of Conten t s

On May 6, 2022, we amended our facility license agreement with NantWorks to expand the licensed premises by 36,830 rentable square feet to an aggregate total of 46,330 rentable square feet.

Effective May 1, 2022, the license fee was approximately $ 273,700 per month and was subject to a 3 % increase commencing on January 1 of each year.

Effective May 1, 2022, the license fee is approximately $ 273,700 per month, which is subject to a 3 % increase commencing on January 1 of each year.

The space continues to be rented on a month-to-month basis, which can be terminated by either party with at least 30 days’ prior written notice to the other party.

4 unchanged sentences

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.

Based on this decision to explore a potential transition, we determined that it was more likely than not that a previously recorded prepaid asset would not result in the collection of fees for services performed by the Clinic as contemplated in the original agreements.

As a result, during the year ended December 31, 2021, we wrote down the remaining value of our prepaid asset and recorded approximately $ 4.4 million in research and development expense , on the consolidated statement of operations.

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.

As of December 31, 2023 and 2022, we owed the Clinic $ 0.1 million, which are included in due to related parties , on the consolidated balance sheets.

We continue discussions with potential partners around such alternative structures.

Related to clinical trial and transition services provided by the Clinic, during the years ended December 31, 2024, 2023 and 2022, we recorded $ 2.6 million, $ 2.2 million, and $ 2.4 million, respectively, in research and development expense , on the consolidated statements of operations.

As of December 31, 2024 and 2023, we owed the Clinic an immaterial amount and $ 0.1 million, respectively, which are included in due to related parties , on the consolidated balance sheets.

Brink Biologics, Inc.

In 2015, we entered into an agreement with Brink whereby we granted Brink worldwide exclusive licenses for the use of certain cell lines and intellectual property in non-clinical laboratory testing.

Brink is a related party as our Executive Chairman, Global Chief Scientific and Medical Officer and principal stockholder, and our Chief Corporate Affairs Officer and member of our Board of Directors, collectively own more than 50% of Brink’s outstanding shares.

During the years ended December 31, 2023 and 2022, we recognized revenue of an immaterial amount, respectively, and $ 0.4 million during the year ended December 31, 2021 related to this license.

Brink is a related party as our Founder, Executive Chairman and Global Chief Scientific and Medical Officer, and our Chief Corporate Affairs Officer and member of our Board of Directors, collectively own more than 50% of Brink’s outstanding shares.

During the years ended December 31, 2024, 2023, and 2022, we recognized revenue of an immaterial amount related to this license.

NantBio, Inc.

2 unchanged sentences

The agreement had an initial term of five years and renews automatically for successive one-year terms unless terminated by either party in the event of material default upon prior written notice of such default and the failure of the defaulting party to remedy the default within 30 days of the delivery of such notice, or upon 90 days’ prior written notice by NCSC.

During the years ended December 31, 2023 and 2022 , we recognized no revenue, respectively, and $ 0.3 million of revenue during the year ended December 31, 2021.

During the years ended December 31, 2024, 2023 and 2022, we recognized no revenue.

As of December 31, 2024 and 2023, we recorded $ 0.1 million of deferred revenue for bioreactors that were delivered but not installed in accrued expenses and other liabilities , on the consolidated balance sheets.

As of December 31, 2023 and 2022, we recorded $ 0.9 million, respectively, in due to related parties, on the consolidated balance sheets related to this agreement.

As of December 31, 2023, we recorded a payable of $ 0.9 million in due to related parties, on the consolidated balance sheet related to this agreement.

The payable was settled as of June 30, 2024.

In 2018, we entered into a shared service agreement pursuant to which we are charged for services at cost, without mark-up or profit by NantBio, but including reasonable allocations of employee benefits related to the employees providing the services.

In April 2019, we agreed with NantBio to transfer certain NantBio employees and associated research and development projects to the company.

After the transfer, we settled certain employee bonuses and benefits that were accrued by NantBio for 2018.

As of December 31, 2023 and 2022, we recorded a receivable from NantBio of $ 1.3 million in due from related parties on the consolidated balance sheets for amounts we paid on behalf of NantBio during the year ended December 31, 2019.

As of December 31, 2023, we recorded a receivable of $ 1.3 million in due from related parties, on the consolidated balance sheet for amounts we paid on behalf of NantBio during the year ended December 31, 2019.

The receivable was settled as of June 30, 2024.

605 Doug St, LLC

In 2016, we entered into a lease agreement with 605 Doug St, LLC, an entity owned by our Executive Chairman and Global Chief Scientific and Medical Officer, for approximately 24,250 rentable square feet in El Segundo, California, which has been converted to a research and development laboratory and a cGMP manufacturing facility.

The lease term was from July 2016 through July 2023.

In 2016, we entered into a lease agreement with 605 Doug St, LLC, an entity owned by our Founder, Executive Chairman and Global Chief Scientific and Medical Officer, for approximately 24,250 rentable square feet in El Segundo, California, which has been converted to a research and development laboratory and a cGMP manufacturing facility.

Table of Conten t s

term was from July 2016 through July 2023.

In June 2023, we exercised the option to extend the lease for one additional three-year term through July 2026.

The base rent is approximately $ 72,385 per month, with annual increases of 3 % that began in July 2017.

During the years ended December 31, 2023, 2022 and 2021, we recorded lease expense for this facility of $ 0.9 million, respectively, in research and development expense , on the consolidated statements of operations.

During the years ended December 31, 2024, 2023 and 2022, we recorded lease expense for this facility of $ 0.9 million in research and development expense , on the consolidated statements of operations.

Duley Road, LLC

In 2017, we entered into a lease agreement with Duley Road, a related party that is indirectly controlled by our Executive Chairman and Global Chief Scientific and Medical Officer, for approximately 11,980 rentable square feet of office and cGMP manufacturing facility space in El Segundo, California.

The lease term is from February 2017 through October 2024.

We have the option to extend the initial term for two consecutive five-year periods through October 2034.

The base rent is approximately $ 40,700 per month, with annual increases of 3 % that began in November 2018.

In 2017, we entered into a lease agreement with Duley Road, a related party that is indirectly controlled by our Founder, Executive Chairman and Global Chief Scientific and Medical Officer, for approximately 11,980 rentable square feet of office and cGMP manufacturing facility space in El Segundo, California.

The lease term was originally from February 2017 through October 2024.

We had and continue to have the option to extend the initial term for two consecutive five-year periods through October 2034.

The base rent is approximately $ 40,700 per month, with annual increases of 3 %.

Effective October 3, 2023, we exercised the first option to extend the lease for one additional five-year term through October 31, 2029.

Effective in 2019, we entered into two lease agreements with Duley Road for a second building located in El Segundo, California.

Effective in January 2019, we entered into two lease agreements with Duley Road for a second building located in El Segundo, California.

The first lease is for the first floor of the building with approximately 5,650 rentable square feet.

4 unchanged sentences

We have options to extend the initial terms of both leases for two consecutive five-year periods through 2036.

The base rent for the two leases is approximately $ 35,800 per month, with annual increases of 3 % per year.

The base rent for the two leases is approximately $ 35,800 per month, with annual increases of 3 %.

During the years ended December 31, 2024, 2023 and 2022, we recorded rent expense for these leases totaling $ 1.0 million, $ 0.9 million, and $ 0.8 million, respectively, in research and development expense , on the consolidated statements of operations.

As of December 31, 2023 and 2022, we recorded $ 0.1 million and $ 1.4 million of lease-related payables to Duley Road, respectively, in due to related parties , on the consolidated balance sheets.

As of December 31, 2024 and 2023, we recorded $ 0.1 million of lease-related payables to Duley Road in due to related parties , on the consolidated balance sheets.

605 Nash, LLC

1 unchanged sentence

This facility is used primarily for pharmaceutical development and manufacturing purposes.

The lease term commenced in January 2021 and expires in December 2027 , and includes an option to extend the lease for one three-year term through December 2030 .

The lease term commenced in January 2021 and was originally set to expire in December 2027 and included an option to extend the lease for one three-year term through December 2030 .

The base rent is approximately $ 20,300 per month with an annual increase of 3 % on January 1 of each year during the initial term, and if applicable, during the option term.

5 unchanged sentences

Base rent for the Expansion Premises is approximately $ 170,400 per month with annual increases of 3 % on April 1 of each year.

We are responsible for the build out of the facility space and associated costs.

We have included the options to extend the lease term of both the Initial and Expansion Premises for three years as part of the initial term of the leases as it is reasonably certain that we will exercise the options, which implies expiration of both leases in December 2030.

During the years ended December 31, 2023, 2022, and 2021, we recorded rent expense for the Initial and Expansion Premises leases totaling $ 2.2 million, respectively, i n research and development expense, on the consolidated statements of operations.

The terms of initial and amended leases provided for tenant improvement allowances totaling $ 2.9 million for costs and expenses related to improvements made by us to the Initial and Expansion Premises, which were received from the landlord during the year ended December 31, 2023.

We are responsible for the buildout of the facility space and associated costs.

During the years ended December 31, 2024, 2023, and 2022, we recorded rent expense for the Initial and Expansion Premises leases totaling $ 2.2 million i n research and development expense, on the consolidated statements of operations.

557 Doug St, LLC

On September 27, 2021, we entered into a Membership Interest Purchase Agreement with Nant Capital (the Purchase Agreement).

Nant Capital is a related party controlled by Dr.

The Purchase Agreement transferred all outstanding membership interests in 557 Doug St, LLC from the company to Nant Capital.

The only asset owned by 557 Doug St, LLC is the improved property located at 557 South Douglas Street, El Segundo, California with a building area of approximately 36,434 rentable square feet (the Douglas Property).

The purchase price under the purchase agreement was $ 22.0 million, and after the offset prorated property taxes of $ 0.1 million, the net proceeds from the sale were $ 21.9 million.

An independent appraisal of the Douglas Property assigned the Douglas Property a value of $ 22.0 million.

The net carrying value of the property was $ 20.5 million as of the closing date.

We accounted for the transfer as a sale of an asset to an entity under common control, recorded the transfer at book value and recognized the excess of net consideration over carrying book value of $ 1.4 million as a capital contribution received from Nant Capital in additional paid-in capital , on the consolidated statement of stockholders’ deficit during the year ended December 31, 2022.

In September 2021, we entered into a lease agreement with Nant Capital under which we leased back 557 South Douglas Street for an initial lease term of seven years , which commenced on September 27, 2021.

After transferring all outstanding membership interests in 557 Doug St, LLC to Nant Capital (a related party controlled by Dr.

Soon-Shiong) in September 2021, we entered into a lease agreement with Nant Capital for the improved property located at 557 South Douglas Street, El Segundo, California with a building area of approximately 36,434 rentable square feet (the Douglas Property).

Pursuant to the terms of the agreement, we leased back the Douglas Property for an initial lease term of

Table of Conten t s

seven years , which commenced on September 27, 2021.

The monthly base rent under the lease was approximately $ 81,976 per month with an annual increase of 3 % on October 1 of each year beginning in 2022 during the initial term.

1 unchanged sentence

we would begin paying rent on October 1, 2023 at the current monthly base rent.

We prepaid the first month rent and security deposit totaling $ 0.2 million upon the execution of the lease.

The lease was classified as an operating lease.

During the year ended December 31, 2021, we recorded $ 0.3 million of rent expense for the lease, in research and development expense , on the consolidated statement of operations.

We prepaid the first month rent and security deposit totaling $ 0.2 million upon execution of the lease.

Effective May 31, 2022, we executed a lease termination agreement with Nant Capital under which we received a full refund of the first month’s rent and security deposit totaling $ 0.2 million that we paid upon execution of the lease.

Prior to the termination of the lease, we recorded rent expense of $ 0.4 million during the year ended December 31, 2022 in research and development expense , on the consolidated statement of operations.

During the year ended December 31, 2022, we recognized a gain of $ 0.6 million on the disposal of this lease in other expense, net , on the consolidated statement of operations.

During the year ended December 31, 2022, we recognized a gain of $ 0.6 million on the disposal of this lease in other income (expense), net , on the consolidated statement of operations.

420 Nash, LLC

7 unchanged sentences

We have included the first option to extend the lease term for five years as part of the initial term of the lease as it is reasonably certain that we will exercise the option, which implies lease expiration in September 2031.

During the years ended December 31, 2023 and 2022, we recorded rent expense for this lease totaling $ 0.5 million, respectively, and $ 0.1 million during the year ended December 31, 2021 in research and development expense , on the consolidated statements of operations.

During the years ended December 31, 2024, 2023, and 2022 we recorded rent expense for this lease totaling $ 0.5 million in research and development expense , on the consolidated statements of operations.

23 Alaska, LLC

4 unchanged sentences

The company was responsible for the payment of real property taxes, repairs and maintenance, improvements, insurance, and operating expenses during the term of the lease.

The company was responsible for the costs associated with the build-out of the premises and was to receive a one-time tenant improvement allowance of approximately $ 0.9 million from the landlord.

The company was responsible for the costs associated with the buildout of the premises and was to receive a one-time tenant improvement allowance of approximately $ 0.9 million from the landlord.

As of December 31, 2022, we re-evaluated plans for the future development of the facility and deemed it unlikely to claim any of the allowance during the reimbursement time frame.

1 unchanged sentence

Effective August 31, 2023, we executed a lease termination agreement with the lessor under which we received a full refund of the security deposit totaling $ 0.1 million that we paid upon execution of the lease.

During the years ended December 31, 2023 and 2022, we recorded $ 1.2 million of rent expense for this lease, respectively, in research and development expense , on the consolidated statements of operations.

During the years ended December 31, 2023 and 2022, we recorded $ 1.2 million of rent expense for this lease in research and development expense , on the consolidated statements of operations.

During the year ended December 31, 2023, we recognized a gain of $ 0.6 million on the disposal of this lease in research and development expense , on the consolidated statement of operations.

Table of Conten t s

Warrant Liabilities

December 2022 Warrants

On December 12, 2022, in connection with the sale of 9,090,909 shares of our common stock to an institutional investor, we entered into a warrant agreement that allows such investor to purchase up to 9,090,909 shares at an exercise price of $ 6.60 per share.

In connection with the December 12, 2022 RDO, the company issued 9,090,909 warrants with an exercise price of $ 6.60 per share.

The warrants became immediately exercisable on December 12, 2022 and expired in full on December 12, 2024.

We classified the warrants as a liability at their fair value determined using the Black-Scholes option pricing model.

The fair value of the warrants was estimated at $ 35.1 million at the issuance date.

Of the placement agent fees and other offering costs totaling $ 3.0 million, $ 1.1 million was allocated to the warrants and recorded in other expense, net , on the consolidated statement of operations on the date of the transaction.

As of December 31, 2023 and 2022, all 9,090,909 underlying warrants were outstanding.

As of December 31, 2023 and 2022, the estimated fair value of the warrants were $ 17.1 million and $ 21.6 million, respectively .

During the year ended December 31, 2023, a decrease in fair value of $ 4.5 million was recorded in other expense, net , on the consolidated statement of operations.

Of the placement agent fees and other offering costs totaling $ 3.0 million , $ 1.1 million was allocated to the warrants and recorded in other income (expense), net , on the consolidated statement of operations on the date of the transaction.

February 2023 Warrants

On February 15, 2023, in connection with the sale of 14,072,615 shares of our common stock to certain institutional investors, we entered into a warrant agreement that allows such investors to purchase up to 14,072,615 shares at an exercise price of $ 4.2636 per share.

In connection with the February 15, 2023 RDO, the company issued 14,072,615 warrants with an exercise price of $ 4.2636 per share.

The warrants became immediately exercisable on February 17, 2023 and expire two years after the initial issuance date.

On July 25, 2023, the company amended the terms of the warrant, reducing the exercise price of the warrants from $ 4.2636 per share to $ 3.2946 per share and extending the expiration date of the warrants until July 24, 2026.

We classified the warrants as a liability at their fair value determined using the Black-Scholes option pricing model.

The fair value of warrants was estimated at $ 23.7 million at the issuance date.

Of the placement agent fees and other offering costs totaling $ 3.0 million, $ 1.0 million was allocated to the warrants and recorded in other expense, net , on the consolidated statement of operations on the date of the transaction .

Of the placement agent fees and other offering costs totaling $ 3.0 million, $ 1.0 million was allocated to the warrants and recorded in other income (expense), net , on the consolidated statement of operations on the date of the transaction .

Since the warrants were classified as liabilities and measured at fair value, we recognized the change of $ 7.3 million in fair value of warrant liability in earnings due to the warrant modification.

As of December 31, 2023, all 14,072,615 underlying warrants were outstanding, with an estimated fair value of $ 50.0 million.

During the year ended December 31, 2023, an increase in fair value of $ 26.3 million was recorded in other expense, net , on the consolidated statement of operations.

July 2023 Warrants

On July 20, 2023, in connection with the sale of 14,569,296 shares of our common stock to certain institutional investors, we entered into a warrant agreement that allows such investors to purchase up to 14,569,296 shares at an exercise price of $ 3.2946 per share.

In connection with the July 20, 2023 RDO, the company issued 14,569,296 warrants with an exercise price of $ 3.2946 per share.

These warrants became immediately exercisable on July 25, 2023 and expire on July 24, 2026.

We classified the warrants as a liability at their fair value determined using the Black-Scholes option pricing model.

The fair value of warrants was estimated at $ 25.8 million at the issuance date.

Of the placement agent fees and other offering costs totaling $ 2.5 million, $ 1.0 million was allocated to the warrants and recorded in other expense, net , on the consolidated statement of operations on the date of the transaction .

As of December 31, 2023, all 14,569,296 underlying warrants were outstanding, with an estimated fair value of $ 51.7 million.

During the year ended December 31, 2023, an increase in fair value of $ 25.9 million was recorded in other expense, net , on the consolidated statement of operations.

Of the placement agent fees and other offering costs totaling $ 2.5 million, $ 1.0 million was allocated to the warrants and recorded in other income (expense), net , on the consolidated statement of operations on the date of the transaction .

Warrant Liabilities

The following table summarizes the change in carrying amount of warrant liabilities measured at fair value during the years ended December 31, 2024, 2023, and 2022 (in thousands):

Total December 2022

Warrants February 2023

Warrants July 2023

Fair value at issuance, December 12, 2022

$ 35,096 $ 35,096 $ — $ —

Change in fair value ( 13,460 ) ( 13,460 ) — —

Fair value, at December 31, 2022

21,636 21,636 — —

Fair value at issuance 49,534 — 23,698 25,836

Change in fair value 47,600 ( 4,545 ) 26,260 25,885

Fair value, at December 31, 2023

118,770 17,091 49,958 51,721

Warrant exercises ( 90,240 ) — ( 46,083 ) ( 44,157 )

Change in fair value ( 19,955 ) ( 17,091 ) ( 103 ) ( 2,761 )

Fair value, at December 31, 2024

$ 8,575 $ — $ 3,772 $ 4,803

Table of Conten t s

Warrant Exercises

The following table summarizes warrant exercise activity during the years ended December 31, 2024, 2023, and 2022:

Total December 2022

Warrants February 2023

Warrants July 2023

Warrants issued, December 12, 2022

9,090,909 9,090,909 — —

Warrant exercises — — — —

Warrants outstanding, at December 31, 2022

9,090,909 9,090,909 — —

Warrant exercises — — — —

Warrant issuances 28,641,911 — 14,072,615 14,569,296

Warrants outstanding, at December 31, 2023

37,732,820 9,090,909 14,072,615 14,569,296

Warrant exercises ( 22,242,740 ) — ( 11,258,092 ) ( 10,984,648 )

Warrant expirations ( 9,090,909 ) ( 9,090,909 ) — —

Warrants outstanding, at December 31, 2024

6,399,171 — 2,814,523 3,584,648

Warrant Valuation Assumptions

The estimated fair value of the warrants was computed using the Black-Scholes option pricing model with the following unobservable assumptions at the following dates:

December 2022 Warrants February and July 2023 Warrants

2024 December 31,

2023 December 31,

2022 December 31,

2024 December 31,

Exercise price per share — $ 6.60 $ 6.60 $ 3.2946 $ 3.2946

Expected term — 1.0 year

Expected average volatility — 119.0 % 99.4 % 125.0 % 107.3 %

Expected dividend yield — — — — —

Risk-free interest rate — 4.7 % 4.4 % 4.2 % 4.1 %

The expected term is the time remaining until the expiration of the warrants.

The expected average volatility was estimated based on the historical and implied volatility of our common stock.

The expected dividend yield was based on our expectation of not paying dividends for the foreseeable future.

The risk-free interest rate was based on the U.S.

Treasury’s rates for U.S.

Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.

Stockholders’ Deficit

2 unchanged sentences

As of December 31, 2024, there were 852,904,340 shares of our common stock outstanding (excluding 163,800 shares held by a majority owned subsidiary of the company that are treated as treasury shares for accounting purposes).

Effective October 18, 2023, we amended and restated our Amended and Restated Certificate of Incorporation to increase the number of shares that the company is authorized to issue from 900,000,000 shares of common stock, $ 0.0001 par value per share, to 1,350,000,000 shares of common stock, $ 0.0001 par value per share.

The number of shares of preferred stock, $ 0.0001 par value per share, that the company is authorized to issue remained unchanged at 20,000,000 shares.

Common Stock Issued in Connection with the Merger

Under the terms of the Merger Agreement, at the Effective Time of the Merger, 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 into a right to receive 0.8190 newly issued shares of common stock , par value $ 0.0001 per share, resulting in the issuance of approximately 273.7 million shares of Company Common Stock.

From and after the Effective Time, all of such NantCell shares ceased to be outstanding, were canceled and ceased to exist.

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

Since the Merger was accounted for as a transaction between entities under common control, the outstanding shares presented on the consolidated financial statements assume that NantCell outstanding common stock was converted into shares of Company Common Stock during the period ended December 31, 2021, and in connection with the conversion, those shares of common stock were recorded at the company’s par value of $ 0.0001 per share.

Stock Repurchases

2015 Share Repurchase Program

In 2015, the Board of Directors approved the 2015 Share Repurchase Program, which allows our CEO or CFO to repurchase on behalf of the company, from time to time in the open market or in privately negotiated transactions, up to $ 50.0 million of our outstanding shares of common stock, exclusive of any commissions, markups, or expenses.

3 unchanged sentences

Shares repurchased under this program are formally retired through approval of the Board of Directors upon repurchase.

Table of Conten t s

During the years ended December 31, 2024, 2023 and 2022, no shares of our common stock were repurchased under the program.

Since the plan’s inception, we have repurchased a total of 6,403,489 shares at a total cost of $ 31.7 million.

Since the program’s inception, we have repurchased a total of 6,403,489 shares at a total cost of $ 31.7 million.

As of December 31, 2024, $ 18.3 million remained authorized to use for share repurchases under the program.

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 Open Market Sale Agreement described below.

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.

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

As of December 31, 2024 and 2023, 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.

During December 2024, we sold 38,333,334 shares of our common stock at $ 3.00 per share under the shelf generating net proceeds of approximately $ 106.9 million.

Open Market Sale Agreement

2 unchanged sentences

During the years ended December 31, 2024, 2023 and 2022, we received net proceeds of approximately $ 3.6 million, $ 16.1 million, and $ 13.1 million, respectively, from the issuance of shares under the ATM.

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

We are not obligated to sell any shares and may at any time suspend solicitation and offers under the Sale Agreement.

The Sale Agreement may be terminated by us at any time given written notice to the sales agent for any reason or by the sales agent at any time by giving written notice to us for any reason or immediately under certain circumstances and shall automatically terminate upon the issuance and sale of all of the shares.

We are not obligated to sell any shares and may at any time suspend solicitation and offers under the ATM.

The ATM may be terminated by us at any time given written notice to the sales agent for any reason or by the sales agent at any time by giving written notice to us for any reason or immediately under certain circumstances and shall automatically terminate upon the issuance and sale of all of the shares.

Registered Direct Offerings

9 unchanged sentences

The warrants became immediately exercisable on July 25, 2023 and expire on July 24, 2026.

Table of Conten t s

2022 Offering

1 unchanged sentence

This transaction generated net proceeds of approximately $ 47.0 million, after deducting placement agent fees and other offering costs of $ 3.0 million, of which $ 1.9 million was allocated to the sale of our common stock and recorded in additional-paid-in capital, on the consolidated statement of stockholders’ deficit during the year ended December 31, 2022.

Exercises of Warrants

During the year ended December 31, 2024, institutional holders exercised a total of 11,258,092 warrants pursuant to the February 2023 Warrant agreement at an exercise price of $ 3.2946 per share resulting in the issuance of 11,258,092 shares of the company’s common stock for proceeds totaling $ 37.1 million.

We recorded $ 83.2 million in additional paid-in capital, on the consolidated statement of stockholders’ deficit during the year ended December 31, 2024 related to these exercises of warrants.

During the year ended December 31, 2024, institutional holders exercised a total of 10,984,648 warrants pursuant to the July 2023 Warrant agreement at an exercise price of $ 3.2946 per share resulting in the issuance of 10,984,648 shares of the company’s common stock for proceeds totaling $ 36.2 million.

We recorded $ 80.3 million in additional paid-in capital, on the consolidated statement of stockholders’ deficit during the year ended December 31, 2024 related to these exercises of warrants.

Stock Purchase and Option Agreement

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, which resulted in the issuance of 2,432,894 shares of common stock.

We received net proceeds of approximately $ 9.5 million, after deducting offering costs of $ 0.5 million, which were allocated to the sale of our common stock and recorded in additional-paid-in capital, on the consolidated statement of stockholders’ deficit during the year ended December 31, 2023.

The option is exercisable by Oberland any time after the closing of the SPOA, 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.

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 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.

We have agreed to file a shelf registration statement allowing for the resale of the common stock acquired under the SPOA and to cause the registration statement to be effective no later than May 15, 2024, or if the SEC decides to review such registration statement, no later than June 30, 2024.

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.

Conversion of Promissory Notes into Common Stock

In connection with our December 2024 equity offering, the company received written notice from Nant Capital, the holder of the $ 30.0 million promissory note due December 31, 2025, of its election to convert the entire outstanding principal and accrued interest under the existing note into shares of the company’s common stock.

As of such date, the total outstanding principal amount and accrued and unpaid interest due under the existing note of approximately $ 30.7 million were converted into 13,475,172 shares of the company’s common stock at a price of $ 2.28 per share in accordance with the terms of the promissory note.

We recorded a net increase of $ 26.2 million in additional paid-in capital , on the consolidated balance sheet related to this transaction.

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

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

As of such date, the total outstanding principal amount and accrued and unpaid interest due under the existing note of approximately $ 200.7 million were converted into 103,710,088 shares of the company’s common stock at a price of $ 1.9350 per share in accordance with the terms of the promissory note.

We recorded a net increase of $ 162.3 million in additional paid-in capital , on the consolidated balance sheet related to this transaction.

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

Table of Conten t s

On September 11, 2023, the company entered into a stock purchase agreement with Nant Capital, NantMobile and NCSC pursuant to which the related-party purchasers exchanged all such fixed-rate promissory notes, 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.

On December 12, 2022, the company received written notice from NantWorks, the holder of the existing note, of its election to convert the entire outstanding principal and accrued interest under the existing note into shares of the company’s common stock.

On December 12, 2022, the company received written notice from NantWorks, the holder of the existing note, of its election to convert the entire outstanding principal and accrued and unpaid interest under the existing note into shares of the company’s common stock.

As of such date, the entire outstanding principal amount and accrued and unpaid interest due under the existing note of approximately $ 56.6 million and an unamortized debt discount of $ 4.7 million were converted into 9,986,920 shares of the company’s common stock at a price of $ 5.67 per share in accordance with the terms of the existing note.

5 unchanged sentences

In addition, the number of shares reserved for future grant under the 2015 Plan include shares subject to stock options granted under the 2014 Plan that expire or terminate without having been exercised in full and shares issued pursuant to awards granted under the 2014 Plan that are forfeited to or repurchased by us (provided that the maximum number of shares that may be added to the 2015 Plan pursuant to this provision is approximately 110,020 shares as of December 31, 2024).

Pursuant to the Merger, we assumed 7,121,110 RSUs (adjusted for the Exchange Ratio) issued under the NC 2015 Plan.

As of December 31, 2024, the 2015 Plan is the only equity plan available for grant of equity awards to employees, directors, and consultants of the company.

12 unchanged sentences

$ 34,432 $ 49,163 $ 40,179

Table of Conten t s

Stock Options

11 unchanged sentences

As of December 31, 2024, the unrecognized compensation cost related to outstanding stock options was $ 20.1 million, which is expected to be recognized over a remaining weighted-average period of 1.7 years.

During the year ended December 31, 2023, the total intrinsic value of stock options exercised was $ 0.3 million.

During the year ended December 31, 2024, 2023 and 2022, the total intrinsic value of stock options exercised was $ 0.9 million, $ 0.3 million, and immaterial , respectively.

During the years ended December 31, 2024, 2023 and 2022, cash proceeds received from stock option exercises were $ 0.7 million, $ 0.3 million, and $ 0.1 million, respectively.

14 unchanged sentences

The assumed dividend yield was based on our expectation of not paying dividends for the foreseeable future.

Table of Conten t s

Restricted Stock Units

8 unchanged sentences

As of December 31, 2024, there was $ 27.3 million of unrecognized stock-based compensation expense related to RSUs that is expected to be recognized over a weighted-average period of 1.9 years.

During the year ended December 31, 2023, the total intrinsic value of RSUs vested was $ 11.1 million.

During the years ended December 31, 2024, 2023 and 2022, the total fair value of RSUs vested was $ 14.6 million, $ 11.1 million, and $ 2.6 million, respectively.

Effective as of August 25, 2023, the Compensation Committee of the Board of Directors granted 5,727,159 RSUs to eligible employees of the company, with the intention of retaining such employees (the “retention award”).

The retention award vests according to the following schedule:

½ (one-half) was to vest and vested on September 1, 2023 and ½ (one-half) will vest on January 31, 2024, subject to the recipients continuing to be a “service provider” (as defined in the 2015 Plan) through each applicable vesting date.

½ (one-half) was to vest and vested on September 1, 2023 and ½ (one-half) on January 31, 2024, subject to the recipients continuing to be a “service provider” (as defined in the 2015 Plan) through each applicable vesting date.

With respect to RSUs granted, compensation cost was measured using the grant date fair value of $ 1.65 per share, the closing price of the company’s common stock on August 25, 2023.

RSUs awarded to employees and consultants of affiliated companies are accounted for as stock-based compensation in accordance with FASB ASU 2018-07, Compensation—Stock Compensation (Topic 718) , as the compensation was in exchange for continued support or services expected to be provided to the company over the vesting periods under the NantWorks shared services agreement discussed in Note 11 , Related-Party Agreements .

We have evaluated the associated benefit of these awards to the affiliated companies under common control and determined that the benefit is limited to the retention of their employees.

RSUs awarded to employees and consultants of affiliated companies are accounted for as stock-based compensation in accordance with ASU 2018-07, Compensation—Stock Compensation (Topic 718) , as the compensation was in exchange for continued support or services expected to be provided to the company over the vesting periods under the NantWorks shared services agreement discussed in Note 13 “Related-Party Agreements.” We have evaluated the associated benefit of these awards to the affiliated companies under common control and determined that the benefit is limited to the retention of their employees.

We estimated such benefit at the grant date fair value of $ 4.0 million.

During the years ended December 31, 2023 and 2022, we recorded $ 0.4 million, respectively, and $ 0.9 million of deemed dividends during the year ended December 31, 2021 in additional paid-in capital, on the consolidated balance sheets, with a corresponding credit to stock-based compensation expense.

During the year ended December 31, 2024, We recorded deemed dividends of $ 0.2 million during the year ended December 31, 2024 and $ 0.4 million during the years ended December 31, 2023 and 2022, respectively, in additional paid-in capital, on the consolidated balance sheets, with a corresponding credit to stock-based compensation expense.

Related-Party Warrants

In connection with the Merger, warrants issued to NantWorks, a related party, in connection with NantCell’s acquisition of Altor were assumed by the company.

After applying the Exchange Ratio at the Effective Time of the Merger, a total of 1,638,000 warrants with an exercise price of $ 3.24 per share were outstanding as of December 31, 2023.

The fair value of $ 18.0 million assigned to the warrants will be recognized in equity upon achievement of a performance-based vesting condition pertaining to building manufacturing capacity to support supply requirements for one of our product candidates.

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.

The warrants become exercisable 30 days following the achievement of the performance-based vesting condition (the “initial exercise date”) and expire on the 10th anniversary of the initial exercise date.

Table of Conten t s

We are subject to U.S.

9 unchanged sentences

We plan to indefinitely reinvest any future earnings of our foreign subsidiaries.

On March 9, 2021, the company completed the Merger with NantCell.

The Merger is accounted for as a transaction between entities under common control, and is considered a nontaxable transaction for U.S.

income tax purposes, as it is intended to qualify as a “reorganization” (within the meaning of Section 368(a) of the Code).

Our loss before income taxes is as follows (in thousands):

4 unchanged sentences

Loss before income taxes $ ( 413,645 ) $ ( 583,892 ) $ ( 417,286 )

Income tax benefit (expense) consists of the following (in thousands):

Income tax (expense) benefit consists of the following (in thousands):

Year Ended December 31,

7 unchanged sentences

Total deferred — 14 4

Total income tax benefit (expense) $ 40 $ ( 34 ) $ ( 9 )

Total income tax (expense) benefit $ — $ 40 $ ( 34 )

Table of Conten t s

The components that comprise our net deferred tax liabilities consist of the following (in thousands):

3 unchanged sentences

Section 174 R&E capitalization 111,598 87,721

Research and development credits 56,610 40,954

Interest expense 69,681 39,859

Research and development credits 68,070 56,610

Stock-based compensation 20,799 22,554

Capital loss 16,192 —

Operating lease liabilities 10,886 11,605

Valuation discount 6,641 9,095

Investments 7,544 5,886

Amortization 3,715 3,969

Accrued compensation 3,262 3,398

Other accrued liabilities 2,944 1,640

Other 32,604 34,496

19 unchanged sentences

The portion of the valuation allowance for deferred tax assets for which subsequently recognized tax benefits will be credited directly to contributed capital is $ 0.2 million.

Table of Conten t s

A reconciliation of the federal statutory income tax rate to our effective income tax rate is as follows:

36 unchanged sentences

Unrecognized tax benefits, end of year $ 34,543 $ 35,470 $ 16,252

Table of Conten t s

Included in the balance of unrecognized tax benefits as of December 31, 2024 is $ 16.4 million that, if recognized, would not impact our income tax benefit or effective tax rate as long as the deferred tax asset remains subject to a full valuation allowance.

3 unchanged sentences

Inflation Reduction Act of 2022

The Inflation Reduction Act 2022, which incorporates a corporate alternative minimum tax, was signed on August 16, 2022.

The IRA, which incorporates a corporate alternative minimum tax, was signed on August 16, 2022.

The changes are effective for the tax years beginning after December 31, 2022.

The new tax will require companies to compute two separate calculations for federal income tax purposes and pay the greater of the new minimum tax or their regular tax liability.

The company will be monitoring the impact of the act to determine if it will have an impact on the company for years beginning after December 31, 2022.

We currently do not expect this act will have a material effect on our consolidated financial statements.

The company is not an applicable corporation for the year ended December 31, 2024.

Employee Benefits

7 unchanged sentences

Therefore, we do not record an accrual for paid leave related to these employees since we are unable to reasonably estimate the compensated absences that these employees will take.

Segment Information

We operate in one business segment, and therefore have one reportable segment, focused on developing next-generation therapies that bolster the natural immune system while addressing serious unmet needs within urologic and other cancers as well as infectious diseases.

Our CEO is the chief operating decision-maker of the company and manages and allocates resources to our operations on a company-wide basis.

The measure of segment performance is net income (loss) as reflected in the consolidated statement of operations.

The CODM uses net income (loss) to allocate resources on a consolidated basis, which enables the CODM to assess both the overall level of resources available and optimize distribution of resources across functions, therapeutic areas, regions and research and development programs in line with our long-term corporate-wide strategic goals.

As the company manages its assets on a consolidated basis, the measure of segment assets is total assets, as reflected in the consolidated balance sheet.

Table of Conten t s

Net loss for our segment is as follows (in thousands):

Year Ended December 31,

2024 2023 2022

Product revenue, net $ 14,150 $ — $ —

Other revenues 595 622 240

Total revenue 14,745 622 240

Operating costs and expenses

Cost of sales — — —

Research and development – external (including amounts

with related parties) (1)

29,268 67,124 61,807

Research and development – internal (including amounts

with related parties) (2)

160,876 165,242 186,342

Selling, general and administrative expense (including amounts

with related parties) 168,783 129,620 102,708

Impairment of intangible assets — 886 681

Other segment items (3)

69,463 221,602 66,022

Total operating costs and expenses 428,390 584,474 417,560

Net loss $ ( 413,645 ) $ ( 583,852 ) $ ( 417,320 )

_______________

(1) Our external research and development expenses support our various preclinical and clinical programs.

(2) Our internal research and development expenses include payroll and benefits expenses, facilities and equipment expense, and other indirect research and development expenses incurred in support of its research and development activities.

(3) Other segment items include interest and investment income (loss), net;

interest expense (including amounts with related parties);

changes in the fair value of warrant liabilities, related-party convertible notes and derivative liabilities;

interest expense related to revenue interest liability;

loss on equity method investment;

other (expense) income, net (including amounts with related parties);

and income tax benefit (expense).

We generate a portion of our revenues from outside of the U.S.

Information about our revenue by geographic region is as follows (in thousands):

Year Ended December 31,

2024 2023 2022

$ 14,214 $ 31 $ 42

Europe 531 591 198

Total segment revenue $ 14,745 $ 622 $ 240

Table of Conten t s

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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 8. Financial Statements and Supplementary Data